Thank you, operator. Before we begin, I'd like to remind everyone that today's call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. For more details, please refer to the company's Form 10-Q for the quarter ended September 30, 2025, and other filings with the SEC. AtlasClear undertakes no obligation to update forward-looking statements, except as required by law. With that, I'll now turn the call over to AtlasClear's Executive Chairman, John Schaible.
Thank you, Jeff, and good morning, everyone. The September quarter marks a key inflection point for AtlasClear. For the first time since our de-SPAC, we achieved positive stockholders' equity of $6.9 million, eliminated the prior going concern qualification and further reduced de-SPAC liabilities by more than 80% from fiscal 2024. This achievement reflects our focus on disciplined execution and balance sheet optimization, which now positions AtlasClear as a more stable, growth-ready public company. Together, these efforts demonstrate that the foundational work we've done since our de-SPAC is delivering tangible results, establishing a platform for long-term scalability and value creation. We also secured $20 million in new institutional financing in October, half in convertible notes and half in equity units, strengthening our liquidity and providing a foundation for growth and acquisitions. Importantly, this funding allows us to execute on our strategic roadmap without requiring further near-term equity dilution. This progress comes amid a dynamic market for smaller financial institutions where access to efficient clearing, funding and technology infrastructure remains critical. We see this environment as an opportunity to demonstrate how AtlasClear's model delivers scalability and cost efficiency when it's needed most. Operationally, our subsidiary, Wilson-Davis and Company continued its track record of growing profitability, delivering strong commission, clearing and stock loan results. And strategically, we continued laying the groundwork for a vertically integrated technology-enabled platform for trading and clearing settlement and banking. With that foundation in place, I'll turn it over to our President, Craig Ridenhour, to review key operational highlights from the quarter.
Thanks, John. Let's take a closer look at our performance this quarter and how our operational progress continues to translate into financial strength. Operationally, we saw meaningful growth in diversification. Revenue for the quarter was $4.25 million, up 52% year-over-year. Operating loss narrowed to $877,000, an improvement from $941,000 last year. Net loss was $440,000 compared to net income in the prior year period. That benefited from onetime fair value adjustments. Total assets grew to $73.6 million, up 21% from June 30 at the consolidated level. Net capital at Wilson-Davis increased to $12.28 million, exceeding regulatory requirements by about $2 million. On the business development front, our third corresponding clearing client signed, and we anticipate we'll begin onboarding in Q1 calendar year 2026, which we expect to contribute materially to the fiscal 2026 revenues. We also are in discussions to expand our LocBox partnership for the potential launch of new product platforms next year. On the leadership side, we welcome Sandip Patel as Chief Financial Officer and General Counsel and Steven Carlson rejoined our Board as an independent director, further strengthening our governance and financial oversight framework. The consistent growing profitability at Wilson-Davis underscores the strength of our recurring revenue model and serves as the foundation for scalable growth. We now have clear visibility into an expanding pipeline of new correspondence which should deliver sustained revenue momentum going into next year and beyond. With that, I'll hand it back over to John to walk through the financial results in more detail.
Thank you, Craig. Let me walk through the financials in a bit more detail. Revenue of $4.25 million, up 52% was driven by commissions of $2.33 million, vetting fees of $0.37 million, clearing fees of $0.71 million and other revenues of $0.83 million. Operating expenses were $5.13 million, which were primarily compensation and technology costs as we are scaling our operations for growth. Our operating loss was $877,000 versus $941,000 in the prior year. Our net loss was $440,000 versus $10.7 million net income Q1 fiscal year 2025, but that included noncash gains from fair value adjustments. Cash and restricted cash, our cash is up to $32.2 million, up from $29.6 million at June 30, stockholders' equity, positive $6.86 million versus a negative $6.8 million deficit three months ago, a swing of over $13 million. These results validate the progress we've made in strengthening the balance sheet, simplifying our capital structure and positioning AtlasClear for profitable growth. Overall, the quarter's results demonstrate steady execution across both our operating and financial objectives, supporting our transition from stabilization to sustained growth. We continue to maintain strong inventory capital at Wilson-Davis, exceeding minimum requirements by a comfortable margin and expect this buffer to expand as profitability scales. As we move through fiscal 2026, we will remain focused on driving operating leverage, maintaining disciplined expense control and strengthening capital efficiency across all business lines. We are equally committed to new product development such as digital assets, proven risk management, compliance and operational oversight as we grow to ensure our platform meets the highest standards expected of the regulated financial institution. With that, I'll turn it back over to Craig to discuss our strategic priorities and outlook for fiscal 2026.
Looking ahead to fiscal 2026, our priorities are clear: One, capitalize on our strengthened balance sheet and new growth funding. The $20 million raised in October mitigated liquidity concerns and fully resolved the going concern qualification. We expect this capital to fund the integration of our technology stack, expand our stock loan and margin lending programs and support acquisition activity. Two, accelerate client onboarding and expansion. Our third correspondent clearing client is signed and we believe we've begun onboarding in Q1 calendar year 2026, while we continue to expand our pipeline. Each new relationship adds recurring revenue, scale and operating leverage. Three, advance the Commercial Bancorp acquisition. Once complete, it will provide low-cost funding and a regulated bank charter to support our clearing and custody ecosystem. Four, enhance and deploy technology. We plan continued rollouts of our OLA digital account opening system and LocBox infrastructure, including digital asset and credit capabilities for institutional clients. Five, pursue selective M&A opportunities. We will evaluate targets that enhance product capabilities, broaden client reach or offer complementary technology and strong financial returns. In parallel, we will continue deepening our relationships with FinTech partners to expand distribution channels and integrate complementary technologies that enhance our value proposition. Looking more broadly, the market opportunity for modern technology-driven clearing and banking infrastructure continues to expand. Smaller institutions are increasingly seeking flexible, cost-efficient platforms, a space where AtlasClear is uniquely positioned to lead. With these priorities in place, fiscal 2026 is shaping up to be a pivotal year, one focused on disciplined expansion, operational scale and sustained execution.
To summarize, AtlasClear entered this fiscal year in its strongest position yet. We eliminated the going concern uncertainty, achieved positive equity, secured new institutional capital and maintained profitability at our core operating subsidiary. These milestones reflect a year of disciplined execution and set the stage for the next phase of growth. With a stronger balance sheet, expanding client base and a clear path toward integrating our clearing technology and banking operations, we are well positioned to scale efficiently and deliver sustained shareholder value. We are executing now from a position of strength, focused on sustainable growth and long-term value creation. With a clear strategy, a strong capital foundation and the committed team, AtlasClear is well positioned to deliver measurable progress throughout 2026 and beyond. As we continue this momentum, our emphasis will remain on disciplined execution, transparency with our shareholders and building a durable platform that can scale with our clients' success. Our mission remains unchanged, to build a vertically integrated tech-driven financial platform that modernizes clearing and banking for emerging financial institutions and other fintechs. Thank you to our employees, clients, Board of Directors, and most of all, the shareholders for your continued trust and support. Your confidence drives our progress, and we look forward to keeping you updated as we execute our 2026 roadmap and build long-term value. We look forward to updating you on our progress throughout fiscal 2026. Thank you.
Thank you, John and Craig. Before the call, we collected questions from analysts and investors, which we will address now. First one is, "the $20 million in Funicular financing seems pivotal. Can you elaborate on its structure and how this capital strengthens your ability to execute on both near-term client wins and longer-term platform build-out. Some investors view alternative financings warily, what should give them confidence that the structure supports growth rather than just short-term liquidity?"
I'll take that, Jeff. Thank you for the question. The $20 million Funicular financing is pivotal, and it's not just other parties that came in. We took 2 pieces in that financing. The first was a convertible note, which has a coupon of 11% to 5-year note striking at $0.75 a share, which obviously is far above the market price today. We also took in a unit offering that was comprised of equity and warrants striking at $0.75, and that was for another $10 million roughly, give or take. I totally appreciate, especially going through the de-SPAC process, how the convertible notes can be viewed with skepticism and concern because they can cause significant dilution where we stand today and the present strikes were far above the market. And so we believe this $20 million that we took in will put us in a position to grow the company in a way that will not be nearly as dilutive as what we suffered through the de-SPAC. So we're excited about the financing. Our partners, including Funicular, have been absolutely fantastic to us. They are strategic and we look forward to 2026.
So given that the share price is currently below $1, can you provide an update on the company's compliance with New York Stock Exchange listing requirements?
Sure, I’ll address that. We frequently receive questions about this topic, and we completely understand the concerns from our investors and shareholders regarding the dollar threshold since it tends to weigh on people's minds. We don't like being below $1, and we know the reasons behind our current situation. We believe our existing price does not truly reflect the value of our company and our performance metrics, and we hope this will soon be just a memory. However, the key point is whether we are compliant with NYSE listing standards. We are listed on NYSE American, where there is currently no dollar threshold. Therefore, we are in good standing. Without the pressure of worrying about that dollar value affecting decisions, we can focus on our growth strategy, make informed choices for our shareholders, and ensure the company's long-term success. While it may be uncomfortable for some to see the price at this level, we are compliant with NYSE AMEX standards and we are not worried about the dollar issue since it is not a requirement for us. Thank you for the question.
Thanks Craig. Next question I have is, "can you speak to your digital asset strategy going forward? Given recent market volatility and evolving SEC guidance, how are you thinking about near-term revenue goals for this segment over the next year? And how does the Commercial Bancorp acquisition help support that growth?"
I'll address that question. It's quite detailed. Digital assets are a key priority for us as we move into 2026. We're observing the SEC's guidance and the current openness towards financial services firms entering the crypto space, and we intend to position ourselves effectively and quickly. We view crypto as another product line within our trading assets, whether it's Bitcoin, Ethereum, or other cryptocurrencies, which regulatory-wise are not that different from securities, bonds, or mutual funds. We aim to be the platform that integrates these products, providing custody that enhances portfolio margin opportunities for our customers, seeing crypto as an essential part of this strategy. We're actively considering certain acquisitions in this area that could be beneficial. We're focused on how to connect crypto, traditional finance, and decentralized finance in the most efficient manner possible, and we believe the acquisition of Commercial Bancorp will assist us in achieving that. As a Wyoming state-chartered bank, it has a reputation for being progressive regarding crypto, and being a member of the Federal Reserve will enable us to settle transactions in ways that may be more efficient than our competitors. I’m optimistic that by the second or possibly third quarter of next year, we could begin generating crypto revenues on our platform. We treat crypto similarly to other asset classes from a trading standpoint, but I also want to highlight the potential for crypto settlement functions, utilizing an on-chain immutable ledger for instant settlements, which we believe represents the future of all financial products. In summary, we are proactive in this area, exploring acquisitions, and developing plans for crypto lending and trading. We eagerly anticipate 2026, as we believe it will be a significant year for us in the crypto sector.
Very good, very good. Great. So the last question I have is, "with regard to Commercial Bancorp, the acquisition agreement was just extended through Q1 2026. Can you give us the latest on regulatory progress and integration planning, and how confident are you in closing within that window?"
Sure, Jeff. I'll take this. It's a great question and one that sometimes gets overlooked. The industry recognizes the opportunity we have with Commercial Bancorp, Wyoming, which is a smaller but profitable Fed member bank with a charter over 110 years old. We’re excited about moving forward with the Fed for potential approval and aim to formally file by January 31. While things can change, that's our internal goal. Once we file, the Fed approval process will begin, which can be lengthy, but we're hopeful it might be faster with the new administration. Our ultimate goal is effective approval, and we’re confident in achieving that based on our management's experience with growing banks. In terms of integration, we have immediate and long-term plans. Initially, we need to enhance the tech to support our longer-term strategies. As John mentioned, there are many advantages to digital assets within Wyoming's jurisdiction, and we anticipate forming a Fed master account, which is very valuable. Right away post-approval, we plan to create an internal ecosystem to facilitate deposit sweeps from Wilson-Davis to Commercial Bancorp and extend credit from Farmers State Bank to Wilson-Davis clients for margin trading and other functions. This can be implemented without significant tech modifications. In the longer term, we foresee expanding our footprint. Currently, Commercial Bancorp is in Pine Bluffs, Wyoming, and we have communicated our intention to grow our presence there. We’ll inject additional capital to enhance their balance sheet and increase their deposit-taking capacity. This is an exciting opportunity for us, especially considering the current landscape where many crypto companies seek Fed member firms, and we already have one under contract. We are set to begin the approval process and believe we will be successful. If we secure approval and combine it with our existing clearing licenses through Wilson-Davis and custody powers, we’ll have a solid licensing presence that is tough to replicate. We’re eager to start the approval process and will keep our shareholders and the investing public updated. Thank you again for the question.
This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.