FDCTECH, INC. 10-K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Annual Report Form 10-K contains forward-looking statements. Our actual results could differ materially from those set forth due to general economic conditions and changes in the assumptions used in making such forward-looking statements. The following discussion and analysis of our financial condition and results of operations should be read together with the audited financial statements and accompanying notes and the other financial information appearing elsewhere in this report. The analysis set forth below is provided pursuant to applicable Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events. The Company is building a diversified global financial services company driven by proprietary Condor trading technologies, complementary regulatory licenses, and a proven executive team. The Company plans to acquire, integrate, transform, and scale legacy financial service companies. The Company believes its proprietary technology and software development capabilities allow legacy financial services companies immediate exposure to –forex, stocks, ETFs, commodities, digital assets, social/copy trading, and other high-growth fintech markets. From December 2021 onwards, the Company expects to grow from its acquisition strategy, specializing in buying and integrating small to mid-size legacy financial services companies. The Company intends to build a diversified global software-driven financial services company. The Company plans to acquire, integrate, transform, and scale legacy financial service companies. The Company replaces conventional legacy software infrastructure with its regulatory-grade proprietary Condor trading technologies, intending to improve end-user experience, increase client retention, and realize cost synergies. Currently, we have three primary business segments: (1) Technology and Software Development, (2) Wealth Management, and (3) Investment and Margin Brokerage Business. In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic that continues throughout the United States. While the outbreak was initially concentrated in China, it spread to several other countries, including Russia and Cyprus, and infections were reported globally. Many countries worldwide, including the United States, have implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and the movement of people, and other material limitations on our business. These measures have resulted in work stoppages, absenteeism in the Company’s labor workforce, and other disruptions. The extent to which the coronavirus impacts our operations will depend on future developments. These developments are highly uncertain. We cannot predict them with confidence, including the duration and severity of the outbreak and the actions required to contain the coronavirus or treat its impact. In particular, the spread of the coronavirus globally could adversely impact our operations and workforce, including our marketing and sales activities and ability to raise additional capital, which could harm our business, financial condition, and operation results. The geopolitical situation in Eastern Europe intensified on February 24, 2022, with Russia’s invasion of Ukraine. The war between the two countries continues to evolve as military activity continues. The United States and certain European countries have imposed additional sanctions on Russia and specific individuals. By the end of August 2022, the Company closed its technical support and development office in Russia. We relocated our personnel to Turkey, currently considered a neutral zone. No individual associated with the Company is banned or under Special Designated Nationals and Blocked Person list. If the military activities worsen and expand in Europe, we may relocate our office from Turkey to other neutral zones in Asia. If we cannot relocate our technical and development operations to a safer zone, it may impact our software development capabilities and negatively impact the Company’s business plans. As of the date of this report, there has been no disruption in our operations. 14 Technology & Software Development Business The Company has three sources of revenue. ● Technology Solutions – The Company licenses its proprietary and sometimes resells third-party technologies to customers. Our proprietary technology includes but is not limited to Condor Risk Management Back Office (“Condor Risk Management”), Condor Pro Multi-Asset Trading Platform (previously known as Condor FX Pro Trading Terminal), Condor Pricing Engine, Digital Assets Web Trader Platform, and other digital assets-related solutions. ● Customized Software Development – The Company develops software for Customers with unique requirements outlined in the Software Development Agreement (“Agreement”). ● Consulting Services – The Company’s turnkey business solutions - Start-Your-Own-Brokerage (“SYOB”), Start-Your-Own-Prime Brokerage (“SYOPB”), and FX/OTC liquidity solutions. The Company has completed the Condor Pro Multi-Asset Trading Platform, previously known as the Condor FX Trading Platform. The Condor Pro Multi-Asset Trading Platform is a regulatory-grade trading platform targeted at day traders and retail investors. The industry characterized such platforms by their ease of use and helpful features, such as the simplified front-end (user interface/user experience), back-end (reporting system), news feeds, and charting system. The Condor Pro Multi-Asset Trading Platform includes risk management (dealing desk, alert system, margin calls, etc.), a pricing engine (best bid/ask), and connectivity to multiple liquidity providers or market makers. We have tailored the Condor Pro Multi-Asset Trading Platform to markets such as forex, stocks, commodities, digital assets, and other financial products. The Company released, marketed, and distributed its Condor Pro Multi-Asset Trading Platform in the second quarter of the fiscal year, December 31, 2019. The Company has developed the Condor Back Office API to integrate third-party CRM and banking systems into Condor Back Office. For the fiscal year ending December 31, 2023, and 2022, the Company had seventeen (17) and ten (10) licensing agreements for its Condor Pro Multi-Asset Trading Platform. The Company continuously negotiates additional licensing agreements with several retail online brokers to use the Condor Pro Multi-Asset Trading Platform. Condor Pro Multi-Asset Trading Platform is available in desktop, web, and mobile versions. The Company’s upgraded Condor Back Office (Risk Management) meets various jurisdictions’ regulatory requirements. Condor Back Office meets the directives under the Markets in Financial Instruments Directive (MiFID II/MiFIR), legislation by the European Securities and Market Authority (ESMA) implemented across the European Union on January 3, 2018. The Company is developing the Condor Investing & Trading App, a simplified trading platform for traders with varied experiences in trading stocks, ETFs, and other financial markets from their mobile phones. The Company expects to commercialize the Condor Investing & Trading App by the end of the fourth quarter of the fiscal year ending December 31, 2024. 15 The Company had developed NFT Marketplace, a decentralized NFT marketplace, a multichain platform with a lazy minting option to reduce and limit unnecessary blockchain usage fees, also known as gas fees. The Company did not commercialize the NFT Marketplace in the fiscal year ending December 31, 2023, as the market for NFT has slowed considerably. The Company and its subsidiary, ADS, intend to develop a digital wealth management company, initially including a Robo Advice Platform catering to Australia’s wealth management industry. The Company does not expect to commercialize the Robo Advice Platform. Technology & Software Development Revenue & Gross Margins: Fiscal year ended December 31, 2023 (Audited) Fiscal year ended December 31, 2022 (Audited) Revenue, $ 1,811,423 626,600 Cost of sales, $ 22,503 159,051 Gross Profit (loss), $ 1,788,920 466,949 Gross Margins 98.76 % 74.59 % Wealth Management Business On December 22, 2021, the Company entered into a Share Exchange Agreement (the “Agreement”) with AD Financial Services Pty Ltd ACN 628 331 117 of Level 38/71 Eagle St, Brisbane, Queensland, Australia, 4000 (“ADFP” or “Target”). According to the Agreement, the Company acquired a controlling interest of fifty-one percent (51.00%) of ADFP’s issued and outstanding shares of capital stock in exchange for 45,000,000 (the “Consideration”) newly issued “restricted” common shares. The operating and licensed entity of ADFP is AD Advisory Services Pty Ltd. (“ADS”). ADFP owns one hundred percent (100.00%) equity interest in ADS. As a result, the Company owns 51.00% of ADS. The Company closed the acquisition on December 22, 2021, and combined the financial statements of ADS in its annual report, 10-K, filed with the SEC on March 28, 2022. AD Advisory Services Pty Ltd. (ADS) is an Australian-regulated wealth management company with 28 financial advisors and $530+ million in funds under advice. ADS provides licensing solutions for financial advisers and accountants in Australia and offers financial planners different licensing, compliance, and education solutions to meet their practice’s specific needs. Wealth Management Revenue & Gross Margins: Fiscal year ended December 31, 2023 (Audited) Fiscal year ended December 31, 2022 (Audited) Revenue, $ 5,927,424 5,827,732 Cost of sales, $ 5,338,510 5,275,741 Gross Profit (loss), $ 588,914 551,990 Gross Margins 9.94 % 9.47 % Investment and Margin Brokerage Business (Europe and UK) On December 31, 2022, the Company announced the sales purchase agreement (“Agreement”) under which the Company acquired a 50.10% equity interest in New Star Capital Trading Ltd., a British Virgin Island company (“New Star”) and its operating subsidiary Alchemy Markets Ltd. (“AML”), formerly known as NSFX Ltd (“NSFX”). AML is an investment firm regulated by the Malta Financial Services Authority (MFSA). 16 The Company will assume a business acquisition loan liability of $350,000 to purchase the controlling interest in AML. The Company amended the Agreement to October 15, 2024, to comply with the BVI Companies Act requirement for the change of ownership. The Company closed the acquisition as of June 30, 2023, and consolidated the fair value of AML’s assets and liabilities from June 30, 2023. The Company completed the acquisition of the remaining 49.90% of the issued and outstanding shares of Alchemy Markets Holdings Ltd (Alchemy BVI), formerly known as New Star and its subsidiary AML on November 30, 2023 (“Acquisition Date”), from Alchemy Prime Holdings Ltd. (APHL), through an exchange for 833,621 Series B preferred convertible stocks (“Series B Preferred Stock”) valued at $1,175,406. AML is authorized to deal with its account (market maker) as a Category 3 licensed entity by the MFSA, receive and transmit orders for retail and professional clients, and hold and control clients’ money and assets. AML trading platform services in the English, French, German, Italian, and Arabic-speaking markets, whereby customers can trade in currency, commodity, equity, and digital assets-linked derivatives in real-time. AML is authorized countries to do business include Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Liechtenstein, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden. The Company”) completed the acquisition of 100.00% of the issued and outstanding shares of Alchemy Prime Limited (“APL”) on November 30, 2023 (“Acquisition Date”) from APHL, through an exchange for 966,379 Series B Preferred Stock valued at $1,362,594. APL is an investment firm regulated by the Financial Conduct Authority (‘FCA’). It provides investment advice, acts as agent and principal, safeguards and administers assets in forex, equity, commodities, spread bets, and other financial assets, and is authorized to do business in several countries, including England, Scotland, Wales, and Northern Ireland. Mr. Gope S. Kundnani (“Kundnani”) is the (sole) natural person holding one hundred percent (100%) shareholding in the APHL. Kundnani (“Control Person”) is also a controlling shareholder in the Company. Brokerage Trading Revenue & Gross Margins*: Fiscal year ended December 31, 2023 (Audited) Fiscal year ended December 31, 2022 (Audited) Revenue, $ 5,016,053 - Cost of sales, $ 1,146,029 - Gross Profit (loss), $ 6,507,042 - Gross Margins 77.15 % - * The Company consolidated AML’s revenues from July 1, 2023, to December 31, 2023. The Company has consolidated APL’s revenue from December 1, 2023, to December 31, 2023. CIM Acquisition Termination At July 31, 2023, the Company sent the notice of termination of the purchase agreement to CIM Securities as future events may result in a change of ownership in the CMA application. The Company believes that this would cause further delays in the approval process. Our board has mandated the management team to concentrate on expanding and developing our core non-US forex business to maximize shareholder value. 17 Consolidated Financial Summary The Company has prepared consolidated financial statements on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the ordinary business course. The Company generated $21,617,200 in revenues from January 21, 2016 (inception) to December 31, 2023. For the fiscal year ending December 31, 2023, and 2022, the Company generated $12,754,900 and $6,453,732 in revenues, an increase of over 101.81%. At December 31, 2023, the Company had a cash balance of $31,316,461 and an accumulated deficit of $2,643,647. Financial Condition at December 31, 2023 On December 31, 2023, the accumulated deficit, cash balance, and working capital deficit were $2,643,647, $31,316,461, and $11,260,603, respectively. On November 30, 2023, Kundnani purchased 2,500,000 Series A Preferred stock of FDCTech for $2.5 million. The Company has issued the Series A Preferred stock to Kundnani. On November 30, 2023, Kundnani purchased 50,000,000 Common stock of the Company for $5.5 million. The Company has issued the Common stock to Kundnani. The Company expects to receive funds by the end of April 2024. Even though we believe that our cash balance is sufficient to fund our operations and growth, the Company plans to raise additional capital as disclosed in Subsequent Events. The Company intends to continue its efforts to enhance its revenue from its diversified portfolio of technological solutions, become cash flow positive, and raise funds through private placement offerings and debt financing. As the Company increases its customer base globally, it intends to acquire long-lived assets that will provide a future economic benefit beyond fiscal 2023. Financial Condition at December 31, 2022 On December 31, 2022, the accumulated deficit, cash balance, and working capital deficit were $4,216,823, $264,829, and $345,269, respectively. On January 27, 2022, the Company signed a promissory note (‘AJB Note’) with AJB Capital Investments, LLC (‘AJB Capital’), a Delaware limited liability company, for the principal amount of $550,000 with a maturity date of July 27, 2022, and a coupon of 10%. The parties extended the AJB Note maturity date by another six months till January 23, 2023. As part of the AJB Note, the Company entered into a securities purchase agreement, where AJB Capital will receive equity equal to US $155,000 of the Company’s common stock. The Company issued 2,214,286 common stock valued at $71,521 upon issuance of the Note (the “Shares”) and 1,000,000 3-year cash warrants (‘Warrants’) priced at $0.30. The Warrants and the Shares, collectively known as the ‘Incentive Fee,’ are issued upon execution of the agreement. The Company executed five “Purchase Notice Rights” under an Investment Agreement with White Lion and received a net of $72,420 after deducting financing costs associated with the Investment Agreement for the nine months ended September 30, 2022. On September 30, 2022, the Company issued 30,000,000 restricted common shares for cash valued at $300,000. We do not believe that our cash balance is sufficient to fund our operations and growth; as a result, the Company plans to raise additional capital as disclosed in Subsequent Events. The Company intends to continue its efforts to enhance its revenue from its diversified portfolio of technological solutions, become cash flow positive, and raise funds through private placement offerings and debt financing. As the Company increases its customer base globally, it intends to acquire long-lived assets that will provide a future economic benefit beyond fiscal 2023. 18 RESULTS OF OPERATIONS For the fiscal year ending December 31, 2023, compared to the fiscal year ending December 31, 2022 The revenues generated for the fiscal year ending December 31, 2023, and 2022 were $12,754,900 and $6,453,732, respectively. The increase in revenue was mainly due to the consolidation of AML’s trading revenue as of June 30, 2023. During the fiscal year ending December 31, 2023, and 2022, the Company incurred a net profit and a net loss of $1,573,176 and $1,069,267. The increase in net profit was mainly due to margin brokerage business’ net profit from July 1, 2023, to December 31, 2023. The total revenue breakdown for the fiscal year ending December 31, 2023, and 2022 is below: Fiscal year ended December 31, 2023 (Audited) Fiscal year ended December 31, 2022 (Audited) Technology & Software Development $ 1,811,423 $ 5,827,731 Wealth Management 5,927,424 626,600 Trading Revenue 5,016,053 - Total, $ 12,754,900 6,453,731 Fiscal year ended December 31, 2023 (Audited) Fiscal year ended December 31, 2022 (Audited) Technology & Software Development 14.20 % 9.70 % Wealth Management 46.47 % 90.30 % Trading Revenue 39.33 % - Total 100.00 % 100.00 % During the fiscal years ended December 31, 2023, and 2022, the Company incurred General and administrative costs (“G and A”) of $2,943,913 and $1,623,031, respectively. The increase in G and A costs for the fiscal year ending December 31, 2023, was mainly due to the inclusion of G and A of AML and APL, effective June 30, 2023, and November 30, 2023, respectively. The G and A expenses were 23.08% and 25.15% of the fiscal revenue for the fiscal year ending December 31, 2023, and 2022. Amortization expenses were $22,503 and $159,051 for the fiscal year ending December 31, 2023, and 2022, respectively, and the Company has included them in the Cost of sales expense. The decrease in amortization expense for the fiscal year ending December 2023 is due to the complete amortization of Condor Back Office, Condor Digital Assets Platform, and Condor FX Trading Platform (Desktop). The depreciation expenses for furniture and computers for the year ended December 31, 2023, and 2022, were $213,910 and $3,894. The Company incurred $1,512,790 and $382,864 in sales, marketing, and advertising costs (“sales and marketing”) for the fiscal year ending December 31, 2023, and 2022, respectively. The sales and marketing costs increased in fiscal 2023 due to an increase in sales and marketing expenses related to margin brokerage business. During fiscal 2022, the sales and marketing costs mainly included stock-based payment to marketing and branding consultants, travel costs for tradeshows, customer meetings, online marketing on industry websites, press releases, and public relations activities. The sales, marketing, and advertising expenses represented 11.86% and 5.93% of the sales for the fiscal year ending December 31, 2023, and 2022, respectively. The rental expenses were $47,768 and $25,438 for the fiscal year ending December 31, 2023, and 2022. Effective October 29, 2019, the Company rents its servers, computers, and data center from an unrelated third party. Under the rent Agreement, the lessor provides furniture, fixtures, and leasehold improvements at 200 Spectrum Center Drive, Suite 300, Irvine, CA 92618, as discussed in Note 2. Irvine Lease, California, USA (Headquarter) Effective October 29, 2019, to the present, the Company leased office space at 200 Spectrum Center Drive, Suite 300, Irvine, CA 92618. As per the Commitment Term of the lease (“Agreement”), this Agreement shall continue on a month-to-month basis (any term after the Commitment Term, also known as “Renewal Term”). The Commitment Term and all subsequent Renewal Terms shall constitute the “Term.” The Company may terminate this Agreement by delivering to the lessor Form (“Exit Form”) at least one (1) whole calendar month before the month in which the Company intends to terminate this Agreement (“Termination Effective Month”). The Company is entitled to use the office and conference space if needed. The new rent payment or membership fee for the Irvine Office is $95 per month compared to the previous rent payment or membership fee for the New York Office of $890 per month as the General and administrative expenses. 19 Limassol, Cyprus Lease (Europe Office) From February 2019 to July 2023, the Company leased office space in Limassol District, Cyprus, from an unrelated party for a year. The office’s monthly rent payment is $1,750, which is included in the general and administrative expenses. From July 2023 to the present, the Company leased a bigger office space in Limassol District, Cyprus, from an unrelated party for a year. The office’s monthly rent payment is approximately $3,500, which is included in the general and administrative expenses. From July 2023 to the present, the Company leased office space for its CEO. The office’s monthly rent payment is $3,500, which is included in the general and administrative expenses. The down payment for the lease was approximately $6,300. The lease is for one year and renewable two months before the term in June 2025. Limassol, Cyprus Lease, Europe (Ecastica) From October 2023 to January 2024, the Company leased office space in the Limassol District, Cyprus, for a specific purpose. This space was intended for our subsidiary, Alchemytech Ltd, to be established in Cyprus in March 2024. The monthly rent payment for this office was approximately $1,000, and the down payment for the lease was approximately $6,300. These expenses were included in the general and administrative expenses. Chelyabinsk, Russia (Terminated) From February 2020, this agreement continues every year upon written request by the Company. The Company uses the office for sales and marketing in Europe and Asia. From April 2019 to August 2022, the Company leased office space in Chelyabinsk, Russia, from an unrelated party for an eleven (11) month term. The office’s rent payment is $500 per month, and the Company has included it in the General and administrative expenses. From March 2020, this agreement continues on a month-to-month basis until the Company, or the lessor chooses to terminate by the agreement’s terms by giving thirty (30) days’ notice. The Company uses the office for software development and technical support. Effective August 2022, the Company closed its offices in Russia and relocated its team to Turkey. In April 2023, we relocated our personnel to Kazakhstan. Right-of-Use Assets and Lease Liabilities The Company has entered into operating lease agreements for its facilities and equipment. The right-of-use asset (ROU) is measured at the present value of the lease payments over the lease term, adjusted for lease incentives, initial direct costs, and any lease payments made at or before the commencement date. As of December 31, 2023, the ROU: $39,683. Lease liabilities are measured at the present value of the remaining lease payments, discounted using the Company’s incremental borrowing rate (10.00%) at the lease commencement date. The Operating Lease Liability was estimated to be $36,419 current and $3,264 noncurrent. The lease expense for the fiscal year ended December 31, 2023, consists of an operating lease expense of $42,390. The Company has included all rental expenses in the General and Administrative costs. The Company determines the lease term as the non-cancelable period of the lease, together with periods covered by an option to extend the lease if it is reasonably certain to be exercised and periods covered by an option to terminate the lease if it is reasonably certain not to be exercised. The discount rate of 10.00% used to measure the lease liabilities was determined based on the Company’s incremental borrowing rate, as the rate implicit in the lease is not readily determinable. The Company incurred $1,512,790 and $382,864 in sales, marketing, and advertising costs (“sales and marketing”) for the fiscal year ending December 31, 2023, and 2022, respectively. The sales and marketing costs increased in fiscal 2023 due to an increase in sales and marketing expenses related to margin brokerage business. During fiscal 2022, the sales and marketing costs mainly included stock-based payment to marketing and branding consultants, travel costs for tradeshows, customer meetings, online marketing on industry websites, press releases, and public relations activities. The sales, marketing, and advertising expenses represented 11.86% and 5.93% of the sales for the fiscal year ending December 31, 2023, and 2022, respectively. For the fiscal year ending December 31, 2023, and 2022, the Company had seventeen (17) and ten (10) active technology and software development customers. Revenues generated from the top three (3) customers represented approximately 11.58% and 7.83% of total revenue for the fiscal year ending December 31, 2023, and 2022, respectively. 20 LIQUIDITY AND CAPITAL RESOURCES On December 31, 2023, and 2022, we had a cash balance of $31,316,461 and $264,829, respectively. At December 31, 2023, and 2022, the working capital surplus and deficit were $11,260,603 and $345,269, respectively. The increase in the working capital surplus was mainly due to the acquisition of AML and APL, resulting in the increase of current assets over current liabilities as of December 31, 2023. We generate a substantial portion of our operating income outside the United States, and this income is deemed to be indefinitely reinvested in foreign jurisdictions. Consequently, as outlined under “Cash and Cash Equivalent,” the majority of our cash and short-term investments are held by our foreign subsidiaries. At present, we do not intend to repatriate these funds and do not foresee a need to do so. We anticipate that our existing domestic cash, short-term investments, and cash flows from operations will be sufficient to fund our domestic operating activities and fulfill our cash commitments for investing and financing activities, such as regular quarterly dividends, debt repayments, and capital expenditures, for at least the next 12 months and for the foreseeable future. Should we require additional capital in the United States beyond what our domestic operations generate—for instance, to fund significant discretionary activities such as business acquisitions or share repurchases—we could choose to repatriate future earnings from foreign jurisdictions or raise capital within the United States through debt or equity issuances. These alternatives may result in higher effective tax rates, increased interest expenses, or dilution of our earnings. We have previously borrowed funds domestically and believe that we can continue to do so at reasonable interest rates. In the next twelve (12) months, the Company will continue investing in sales, marketing, product development, new technology solutions, and existing technology support to serve our customers. We expect capital expenditure to increase to $500,000 in the next twelve (12) months to support the growth, including working capital, software development, sales & marketing, and purchasing computers and servers. We expect the combination of existing cash, cash equivalents, cash flows from operations, and access to private equity and capital markets to be sufficient for at least twelve (12) months. The availability of funds will fund our operating activities to meet the need for investing and financing, such as debt maturities and material capital expenditures. However, we may need additional funds to achieve a sustainable sales level to fund our ongoing operations out of revenues. There is no assurance that any additional financing will be available or, if available, on terms that will be acceptable to us. Should we require additional capital, the Company’s operations are insufficient to fund its capital requirements. The Company may attempt to restructure Notes, refinance existing Notes with financial institutions, or raise capital by selling additional capital stock or debt issuance. The Company intends to continue growing its operations and raising funds through private equity and debt financing. Initial Seed Funding in 2016 Between February 22, 2016, and April 24, 2017, the Company borrowed $1,000,000 from FRH Group, a founder and principal shareholder. Effective June 1, 2017, we raised $98,000 through our common stock’s private placement to our officers, directors, friends, relatives, and business associates. Between February 22, 2016, and April 24, 2017, the Company borrowed $1,000,000 from FRH Group, a founder and principal shareholder (“FRH”). The Company executed Convertible Promissory Notes, due between February 28, 2018, and April 24, 2019. The Notes were initially convertible into common stock at $0.10 per share but may be discounted under certain circumstances. In no event will the conversion price be less than $0.05 per share with a maximum of 20,000,000 shares. Going Public in 2019 From January 29, 2019, to February 15, 2019, the Company issued 33,000 registered shares under the Securities Act of 1933 for a cash amount of $4,950. The Company closed its offering effective February 26, 2019. PPP and SBA Funding in 2020 On May 01, 2020, the Company received proceeds of Fifty-Thousand Six Hundred and Thirty-Two ($50,632) from the Promissory Note (“PPP Note”) under the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). On May 22, 2020, the Company received proceeds of one hundred and forty-four thousand nine hundred and 00/100 Dollars ($144,900). 21 On July 15, 2020, the Company engaged Kingswood Capital Markets, a Benchmark Investments division, Inc., as its exclusive general financial advisor for strategic corporate planning and investment banking services. On August 25, 2020, the Company and Broker-Dealer terminated all obligations other than maintaining confidentiality with no fees to the Broker-Dealer. The Broker-Dealer agreed to return the 2,745,053 shares of the Company’s common stock. On September 02, 2020, the Company engaged Garden State Securities Inc. (GSS) as its exclusive advisor for the private placement of debt or equity securities to fulfill the Company’s business plan and an offering of debt securities to assist in the Company’s acquisition strategy. On October 05, 2021, the Company and GSS terminated all obligations other than maintaining confidentiality, with no fees to the GSS. The Broker-Dealer agreed to return the 1,750,000 shares of the Company’s common stock. Settlement of FRH Debt and Equity Line of Credit (Investment Agreement) in 2021 On February 22, 2021, the Company entered into an Assignment of Debt Agreement (the “Agreement”) with FRH and FRH Group Corporation. The Company eliminated all four FRH Group convertible notes, including interest, of $1,256,908 in return for the issuance of 12,569,080 of unregistered common stock of the Company (the “Shares”) to FRH. Following the Agreement, FRH assigned the Shares to FRH Group Corporation, also owned by Mr. Hong. On September 27, 2021, the Company engaged EF Hutton, a division of Benchmark Investments, LLC (“EF Hutton”). EF Hutton will act as lead underwriter, deal manager, and investment banker for the proposed firm commitment public offering and uplisting (“Offering”) by the Company in connection with the offering of the Company’s equity, debt, or equity derivative instruments (the “Securities”). The Company engagement expired as of December 31, 2022. On October 04, 2021, the Company filed a prospectus that relates to the resale of up to 22,670,000 shares of our Common Stock issued or issuable to selling shareholders for up to $2,200,000, including (i) up to 2,000,000 shares issued to AD Securities America, LLC, (ii) up to 20,000,000 issuable to White Lion Capital, LLC (“White Lion”), according to a “Purchase Notice Right” under an Investment Agreement and (iii) 670,000 shares issued to White Lion as a commitment fee associated with the Investment Agreement. From October 2021 to February 2022, the Company executed five “Purchase Notice Rights” under an Investment Agreement with White Lion and received a net of $38,824 after deducting financing costs associated with the Investment Agreement. 22 Investment Agreement, Promissory Note, Related Party Investments in 2022 From January 2021 to February 2022, the Company executed five “Purchase Notice Rights” under an Investment Agreement with White Lion and received a net of $33,596 after deducting financing costs associated with the Investment Agreement. From October 2021 to February 2022, the Company received $72,420 from the Investment Agreement. On January 27, 2022, the Company signed a promissory note (‘AJB Note’) with AJB Capital Investments, LLC (‘AJB Capital’), a Delaware limited liability company, for the principal amount of $550,000 with a maturity date of July 27, 2022, and a coupon of 10%. The parties extended the AJB Note maturity date by another six months till January 23, 2023. As part of the AJB Note, the Company entered into a securities purchase agreement, where AJB Capital will receive equity equal to US $155,000 of the Company’s common stock. The Company issued 2,214,286 common stock valued at $71,521 upon issuance of the Note (the “Shares”) and 1,000,000 3-year cash warrants (‘Warrants’) priced at $0.30. The Warrants and the Shares, collectively known as the ‘Incentive Fee,’ are issued upon execution of the agreement. In April 2022, the Company engaged CIM Securities, LLC as its private placement agent to raise capital. The Company did not raise any funds. On September 30, 2022, the Company issued 30,000,000 restricted common shares for cash valued at $300,000 to Kundnani, considered a related party. Related Party Investments and Acquisitions in 2023 On January 25, 2023, the Company issued 5,309,179 restricted common shares to AJB to compensate for consideration shares related to the AJB Note valued at $60,525. On January 25, 2023, the Company issued 115,000,000 restricted common shares for cash valued at $550,000 to Kundnani, considered a related party. On March 28, 2023, the Company issued 2,000,000 restricted common shares for cash valued at $20,000. At July 31, 2023, the Company sent the notice of termination of the purchase agreement to CIM Securities as future events may result in a change of ownership in the CMA application. The Company terminated the escrow agreement and released $180,000 to increase cash on hand. On November 30, 2023, Kundnani, considered a related party, purchased 2,500,000 Series A Preferred stock of the Company for $2.5 million. The Company has issued the Series A Preferred stock to Kundnani. On November 30, 2023, Kundnani purchased 50,000,000 Common stock of the Company for $5.5 million. The Company has issued the Common stock to Kundnani. The Company expects to receive funds by the end of April 2024. GOING CONCERN CONSIDERATION We have generated revenues of $12,754,900 for the fiscal year ending on December 31, 2023. As of December 31, 2023, and 2022, the Company had an accumulated deficit of $2,643,647 and $4,216,823. Our independent auditors included an explanatory paragraph in their report on the audited financial statements for the fiscal year ending December 31, 2023, and 2022 regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that led to this disclosure by our independent auditors. Our financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classifications of liabilities that may result in the Company being unable to continue as a going concern. 23 Critical Accounting Policies and Significant Judgments and Estimates We have based our management’s discussion and analysis of our financial condition and operations results on our financial statements, which we have prepared following the U.S. Generally Accepted Accounting Principles (GAAP). In preparing our financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Our actual results could differ from these estimates, and such differences could be material. We have described significant accounting policies in Note 2 of our annual financial statements included in our 10-K/A for the fiscal year ending December 31, 2022, filed with the SEC on May 5, 2023. We continuously evaluate our critical accounting estimates and judgments required by our policies and update them as appropriate based on changing conditions. JOBS Act Accounting Election We are an “ emerging growth company ,” defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards after enacting the JOBS Act until those standards apply to private companies. We have applied for exemption as an emerging growth company; thus, the Company may delay adopting certain accounting standards until the standards would otherwise apply to private companies. Off-Balance Sheet Arrangements and Contractual Obligations We have not engaged in any off-balance sheet arrangements defined in Item 303(c) of the SEC’s Regulation S-B. We had no relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established to facilitate off-balance sheet arrangements or other contractually narrow or limited purposes. Recent Accounting Pronouncements The ASU amendments are effective for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. We have adopted ASC 606 - Revenue Recognition from January 1, 2019, and Amended ASU 2016-02, Leases (Topic 840) from January 1, 2020. The ASU is currently not expected to have a material impact on our consolidated financial statements. We believe the accounting policies described in Note 2 are critical to the judgments and estimates used to prepare our financial statements. As a result, we have described significant accounting policies in more detail in Note 2 of our annual financial statements included in our 10-K for the fiscal year ending December 31, 2022, filed with the SEC on May 5, 2023. 24 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS. Not Applicable. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA All financial statements required by this Item are presented beginning on Page F-20 and are incorporated herein by this reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.