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AtlasClear Holdings, Inc. (NYSE American:ATCH), a small-cap financial services company with a market capitalization of $10.45 million and trailing twelve-month revenue of $14.83 million, disclosed Thursday that it entered into securities purchase agreements with institutional investors for the private placement of additional convertible promissory notes totaling $2.4 million in principal amount. The gross purchase price for these notes was $2 million, reflecting a 20% original issue discount, before fees and expenses. The closing of this transaction occurred on Tuesday. According to InvestingPro data, this financing comes at a crucial time as the company’s current ratio of 0.71 indicates its short-term obligations exceed its liquid assets.
The company engaged Dawson James Securities, Inc. as placement agent for the offering, agreeing to pay a 5% fee on the gross proceeds and to reimburse certain expenses. Dawson James Securities is not required to purchase or sell any specific amount of securities.
Of the new notes, $1 million in principal was purchased by Sandip Patel, a member of the AtlasClear board and, as of Wednesday, an executive officer. An additional $450,000 in notes was purchased by Sixth Borough Capital Fund, LP, an entity controlled by board member Robert D. Keyser, Jr., who is also CEO of Dawson James Securities.
The convertible notes and any securities issuable upon conversion have not been registered under the Securities Act of 1933. AtlasClear stated it relied on private placement exemptions for the transaction, and the securities are subject to transfer restrictions unless registered or exempted.
The company also announced new and amended employment agreements with executives. On Friday and Wednesday, AtlasClear entered into agreements with Executive Chairman John Schaible and President Craig Ridenhour, providing for three-year terms with automatic one-year renewals, initial annual base salaries of $400,000 (increasing to $450,000 and $500,000 in subsequent years), signing bonuses, stock grants, and performance-based equity awards. If terminated without cause or for good reason, the executives are eligible for lump sum severance, pro-rata bonuses, and continued health coverage, with enhanced terms in the event of a change in control.
On Wednesday, AtlasClear entered into an employment agreement with Sandip Patel as General Counsel and Chief Financial Officer, with terms similar to those for other executives.
Additionally, Steven Carlson was appointed to the board and to board committees on Wednesday. Sandip Patel resigned from all board committees on the same day.
This information is based on a press release statement contained in a filing with the Securities and Exchange Commission.
In other recent news, AtlasClear Holdings, Inc. has completed a $5 million financing round through promissory notes issued to strategic investors and board members. This financing includes the final $2 million portion of a previously announced raise, following an initial $3 million. The notes come with a 20% original issue discount, resulting in an aggregate principal amount of $6.25 million. Additionally, Steven Carlson has rejoined the AtlasClear Holdings board as an independent member, replacing Sandip Patel on the Audit and Nominating and Governance Committees. Patel has transitioned to the roles of General Counsel and Chief Financial Officer. AtlasClear Holdings also announced a $500,000 debenture investment from Sixth Borough Capital LP, led by Dawson James CEO Robert D. Keyser, Jr., which aligns with the company’s growth initiatives. These developments reflect AtlasClear’s ongoing efforts to enhance its financial position and strategic direction.
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