What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-04-22 compared with 2023-05-05 · 417 added, 369 removed, 12 unchanged (98% of the section changed)

8 unchanged sentences

Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events.

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

The Company believes its proprietary technology and software development capabilities allow legacy financial services

companies immediate exposure to –forex, stocks, ETFs, commodities, crypto, social/copy trading, and other high-growth fintech markets.

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.

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.

we have three primary business segments, (1) Wealth Management, (2) Technology and Software Development, and (3) Margin Brokerage Business.

The Company has signed a definitive agreement to acquire a controlling interest in the US Brokerage business pending regulatory approval.

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 reported infections 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.

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

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.

of the date of this report, there has been no disruption in our operations.

Management – AD Advisory Services Pty Ltd.

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”).

to the Agreement, the Company acquired 51% 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.

ADFP owns one hundred percent (100%) equity interest in AD Advisory Services Pty Ltd (“ADS”).

As a result, the Company is 51% owner of ADS.

Our wealth management business, AD Advisory Services (ADS), is subject to enhanced regulatory

scrutiny and is regulated by multiple regulators in Australia.

The Australian Securities and Investments Commission (ASIC) administers

a licensing regime for financial services providers.

ADS holds an Australian Financial Services License (AFSL) and meets various compliance,

conduct, and disclosure obligations.

Advisory Services Pty Ltd.

(ADS) is an Australian-regulated wealth management company with 20 offices, 28 advisors, and $530+ million

in funds under advice.

ADS provides licensing solutions for financial advisers & accountants in Australia.

ADS offers financial planners

different licensing, compliance, and education solutions to meet their practice’s specific needs.

Management Revenue & Gross Margins:

Fiscal year ended

December 31, 2022

Fiscal year ended

December 31, 2021*

Cost of sales, $

Gross Profit (loss), $

Includes prorate revenue from December 22, 2021, to December 31, 2021.

& Software Development – Condor Trading Technology

Company has three sources of revenue.

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,

Crypto Web Trader Platform, and other cryptocurrency-related solutions.

Software Development – The Company develops software for Customers with unique requirements outlined in the Software Development

Agreement (“Agreement”).

Services – The Company’s turnkey business solutions - Start-Your-Own-Brokerage (“SYOB”), Start-Your-Own-Prime

Brokerage (“SYOPB”), Start-Your-Own-Crypto Exchange (“SYOC”), FX/OTC liquidity solutions, and lead generations.

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, cryptocurrencies, and other

financial products.

Company released, marketed, and distributed its Condor Pro Multi-Asset Trading Platform in the second quarter of the fiscal year, December

The Company has developed the Condor Back Office API to integrate third-party CRM and banking systems into Condor Back Office.

Company has 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.

Company’s upgraded Condor Back Office (Risk Management) meets various jurisdictions’ regulatory requirements.

Office meets the directives under the Markets in Financial Instruments Directive (MiFID II/MiFIR), legislation by European Securities

and Market Authority (ESMA) implemented across the European Union on January 3, 2018.

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 second quarter of the fiscal year ending December 31, 2023.

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 has no plans to commercialize the NFT Marketplace in the

fiscal year ending December 31, 2023, as the market for NFT has slowed considerably.

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 expects to commercialize the Robo Advice Platform by the fiscal year ending

December 31, 2023.

& Software Development Revenue & Gross Margins:

Profit (loss), $

Brokerage (Europe and the Middle East) – NSFX Ltd.

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

NSFX Ltd (“NSFX”).

NSFX is an online trading brokerage firm regulated by the Malta Financial

Services Authority (MFSA).

The Company will assume a business acquisition loan liability of $350,000 to purchase the controlling interest

The Company amended the Agreement to February 28, 2023, to comply with the BVI Companies Act requirement for the

change of ownership.

The Company expects to consolidate the fair value of NSFX’s assets and liabilities on or after February 28,

2023 but no later than June 30, 2023.

NSFX 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.

NSFX trading platform services in the English, French, German, Italian, and Arabic-speaking markets,

whereby customers can trade in currency, commodity, equity, and cryptocurrency-linked derivatives in real time.

Brokerage – CIM Securities, LLC

July 19, 2022, the Company signed a non-binding letter of intent to acquire fifty-one percent (51%) equity interest in CIM Securities,

LLC (“CIM Securities”), a FINRA and SIPC member firm.

On September 30, 2022, the Company signed a definitive agreement pending

regulatory approval, paid a $20,000 non-refundable deposit, and transferred $180,000 to the escrow account to complete the transaction.

The Company filed the CMA form with FINRA in February 2023.

Once the Company receives approval from FINRA and pays the balance of $180,000,

it will start consolidating income statements and balance sheets as it holds the controlling interest in CIM Securities.

Financial Summary

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 $8,695,165 in revenues from January

21, 2016 (inception) to December 31, 2022.

For the fiscal year ending December 31, 2022, and 2021, the Company generated $6,453,732 and

$457,661 in revenues, an increase of over 1,310%.

At December 31, 2022, the Company had a cash balance of $264,829 and an accumulated

deficit of $4,335,053.

Condition at December 31, 2022

December 31, 2022, the accumulated deficit, cash balance, and working capital deficit were $4,335,053, $264,829, and $541,359, respectively.

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.

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.

September 30, 2022, the Company issued 30,000,000 restricted common shares for cash valued at $300,000.

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.

Company increases its customer base globally, it intends to acquire long-lived assets that will provide a future economic benefit beyond

Condition at December 31, 2021

December 31, 2021, the accumulated deficit, cash balance, and working capital deficit were $3,230,679, $93,546, and $199,132, respectively.

December 31, 2021, the Company eliminated all four FRH Group convertible notes, including interest, of $1,256,908, in return for issuing

12,569,080 unregistered common stock of the Company (the “Shares”) to FRH.

Therefore, no current or non-current portion of

convertible notes payable and accrued interest existed.

Company executed two “Purchase Notice Rights” under an Investment Agreement with White Lion and received a net of $23,551

after deducting financing costs associated with the Investment Agreement for the fiscal year ending December 31, 2021.

The Company also

received a net amount of $81,000 from the related parties to fund its operations.

Our cash balance is $93,546 as of December 31, 2021.

The Company did not receive additional funding from U.S.

Small Business Administration (SBA) or Cares Act Paycheck Protection Program

during the fiscal year ending December 31, 2021.

We do not believe our cash balance is sufficient to fund our operations.

Company intends to continue its efforts to enhance its revenue from its acquisition strategy and 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 2021.

is a financial technology company that provides institutional liquidity, multi-asset trading solutions, wealth management services,

and proprietary trading technology to clients globally.

We operate through four business segments:

Margin Brokerage, Wealth Management,

Technology and Software Development, and Payment Intermediary Services.

Our regulated subsidiaries hold licenses from the Malta Financial

Services Authority (MFSA), the UK Financial Conduct Authority (FCA), the Australian Securities and Investments Commission (ASIC), and

the Seychelles Financial Services Authority (FSA), among others.

Fiscal year 2025 represented a year of substantial financial progress

for the Company.

Total revenues increased 29.8% to $34,959,399, driven by strong growth in Technology & Software revenues and continued

expansion of our Brokerage segment, including the contribution of Alchemy International Ltd.

(“AIL”), acquired in fiscal 2025.

We achieved an operating income of $6,053,209 compared to an operating loss of ($901,763) in fiscal 2024 (restated), reflecting improved

operational leverage across all three revenue-generating segments.

Net income (loss) attributable to FDCTech shareholders was $5,783,223

in fiscal 2025, compared to a loss of $18,781 in fiscal 2024 (restated).

The cash on hand at December 31, 2025, and 2024 was $17,669,749

from $25,376,957.

The cash held at various liquidity providers was $15,258,896 and $12,658,241 as of December 31, 2025, and 2024.

working capital improved to $14,883,171 from $853,533 as of December 31, 2025, and 2024.

of Fiscal Year 2024 Financial Statements

April 3, 2025, the Company’s Board of Directors dismissed Olayinka Oyebola & Co.

(“Olayinka”) as its independent

registered public accounting firm, following Olayinka’s designation as a Prohibited Service Provider by OTC Markets Group.

Company engaged LAO Professionals (PCAOB Firm ID:

7057) as its new independent auditor effective April 3, 2025.

part of the auditor transition, the fiscal year 2024 financial statements previously audited by Olayinka were reaudited by LAO Professionals.

The reaudit resulted in certain reclassifications and adjustments to the previously reported December 31, 2024, consolidated balance

sheet and related statements.

All comparisons presented in this Item 7 between fiscal year 2025 and fiscal year 2024 are based on the

LAO-reaudited 2024 figures.

Investors should not rely upon the financial statements as presented in the Company’s previously filed

Annual Report on Form 10-K for the year ended December 31, 2024 (filed March 3, 2025).

See Note 4 — Restatement of Previously Issued

Financial Statements for further detail.

of Operations

the fiscal year ending December 31, 2022, compared to the fiscal year ending December 31, 2021

the fiscal year ending December 31, 2022, and 2021, the Company had ten (10) and eight (8) active customers.

Revenues generated from

the top three (3) customers represented approximately 81.01% and 52.98% of total revenue for the fiscal year ending December 31, 2022,

and 2021, respectively.

The revenues generated for the fiscal year ending December 31, 2022, and 2021 were $6,453,732 and $457,661, respectively.

During the fiscal year ending December 31, 2022, and 2021, the Company incurred a net profit and a net loss of $1,104,374 and $1,736,695.

total revenue breakdown for the fiscal year ending December 31, 2022, and 2021 is below:

Management, $

& Software Development, $

Management, %

& Software Development, %

the fiscal years ended December 31, 2022, and 2021, the Company incurred General and administrative costs (“G and A”) of

$1,679,121 and $1,127,503, respectively.

The increase in G and A costs for the fiscal year ending December 31, 2021, was mainly due to

higher professional & consulting fees related to common stock issued for services.

The G and A expenses were 26.02% and 246.36% of

the fiscal revenue for the fiscal year ending December 31, 2022, and 2021.

Amortization expenses were $159,051 and $274,462 for the fiscal

year ending December 31, 2022, and 2021 respectively, and the Company has included them in the Cost of sales expense.

The decrease in

amortization expense for the fiscal year ending December 2022 is due to the complete amortization of Condor Back Office, Condor Crypto

Trading Platform, and Condor FX Trading Platform (Desktop).

rental expenses were $25,438 and $29,705 for the fiscal year ending December 31, 2022, and 2021.

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

and fixtures and any leasehold improvements at 200 Spectrum Drive, Suite 300, Irvine, CA 92618, as discussed in Note 2.

Effective February

2019, the Company leases office space at Suite 205, Building 9, Potamos Germasogeia, 4047, Limassol District, Cyprus, from an unrelated

party for a year.

The Company uses the office for sales and marketing in Europe and Asia.

The office’s monthly rent payment is

$1,750, which is included in the General and administrative expenses.

From February 2020, the Company extended the one-year agreement

to $1,750 monthly.

Effective April 2019, the Company leases office space at Suite 512, 83 Plan, Chelyabinsk, Russia, from an unrelated

party for an eleven-month term.

The office’s rent payment is $500 monthly, including the General and administrative expenses.

March 2020, this agreement continues month-to-month until the Company or the lessor chooses to terminate the agreement’s terms

by giving thirty 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.

Company incurred $382,864 and $648,833 in sales, marketing, and advertising costs (“sales and marketing”) for the fiscal

year ending December 31, 2022, and 2021, respectively.

The sales and marketing costs increase due to increased stock-based compensation

to certain marketing and branding consultants.

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

The sales, marketing, and advertising expenses represented 5.93% and 141.77% of the sales for the fiscal year ending December

31, 2022, and 2021, respectively.

following table presents a summary of our consolidated results of operations for the fiscal years ended December 31, 2025, and December

31, 2024 (restated), together with the dollar and percentage change between periods.

(Restated, Audited)

Technology & software

Wealth management

Total revenues

COST OF SALES

Technology & software

Wealth management

Total cost of sales

Gross margin %

OPERATING EXPENSES

General and administrative

Sales and marketing

Total operating expenses

Operating income (loss)

Operating margin %

OTHER INCOME (EXPENSE)

Other interest income (expense)

Other income (expense)

Total other income (expense)

$ (1,110,621 )

Income (loss) before income taxes

Provision for income taxes

Net income (loss)

Net income (loss) attributable to FDCTech shareholders

EPS — basic and diluted

Weighted avg shares outstanding

Total revenues for the fiscal year ended December 31, 2025, were $34,959,399,

an increase of $8,015,681, or 29.8%, compared to $26,943,718 for the fiscal year ended December 31, 2024 (restated).

Revenue growth was

driven primarily by the Brokerage and Technology & Software segments and continued expansion of brokerage trading volumes, partially

offset by a slight decline in Wealth Management revenues.

& software revenues for fiscal year 2025 were $5,099,187, an increase of $3,457,057, or 210.5%, compared to $1,642,130 in fiscal

This segment encompasses licensing and subscription revenues from our proprietary Condor Trading Technology suite, including

the Condor Pro Multi-Asset Trading Platform and Condor Risk Management back-office system, as well as consulting and custom development

services delivered through Alchemytech Ltd.

(ATECH) in Cyprus.

The increase reflects expanded adoption of the Condor platform by third-party

brokerages and new licensing contracts executed during fiscal year 2025.

During fiscal years 2025 and 2024, the Company had approximately

fourteen to seventeen active technology and software development customers.

Cost of sales for this segment was $nil in fiscal year 2025

$173,708), as development costs in 2025 were capitalized as software development costs.

Technology & Software revenues represented

14.6% of total revenues in fiscal year 2025 compared to 6.1% in fiscal year 2024.

management revenues for fiscal year 2025 were $6,430,897, a decrease of $67,507, or 1.0%, compared to $6,498,404 in fiscal year 2024.

This segment is operated by AD Advisory Services Pty Ltd.

(“ADS”), our 51%-owned Australian subsidiary regulated by ASIC,

which provides licensing solutions and financial planning services to a network of approximately 28 financial advisers with more than

$530 million in funds under advice.

slight revenue decline reflects normal variability in adviser activity levels and does not indicate a structural deterioration of the

Cost of sales in this segment — principally payments to advisers, compliance costs, and platform fees — decreased

to $5,755,675 from $5,925,652, contributing to a segment gross margin improvement to 10.5% from 8.8% in fiscal year 2024.

Wealth management

represented 18.4% of total revenues in fiscal year 2025 compared to 24.1% in fiscal year 2024, reflecting the relative growth of the

Brokerage and Technology segments.

revenues for fiscal year 2025 were $23,429,315, an increase of $4,626,131, or 24.6%, compared to $18,803,184 in fiscal year 2024.

segment encompasses trading commissions, spreads, and related revenues from our regulated brokerage entities:

Alchemy Markets Ltd.

MFSA-regulated), Alchemy Prime Limited (United Kingdom, FCA-regulated), and Alchemy International Ltd.

(Seychelles, FSA-regulated).

latter was acquired in fiscal year 2025, contributing incremental brokerage revenues not present in the prior year.

Brokerage revenues represented 67.0% of total revenues in fiscal year

2025 compared to 69.8% in fiscal year 2024.

The segment gross margin decreased slightly to 42.9% from 46.8%, reflecting an increase in

trading costs.

Cost of sales in this segment principally consists of liquidity provider fees, introducing broker commissions, and direct

trading infrastructure costs.

profit for fiscal year 2025 was $19,144,041, an increase of $7,102,673, or 59.0%, from $12,041,368 in fiscal year 2024.

gross margin expanded to 54.8% in fiscal year 2025 from 44.7% in fiscal year 2024, an improvement of approximately 1,010 basis points.

The margin expansion was driven by (i) elimination of technology cost of sales in fiscal year 2025 as development costs were fully capitalized,

(ii) improved scale in the Brokerage segment as revenues grew faster than variable costs, and (iii) modest efficiency gains in the Wealth

Management segment.

Total operating expenses for fiscal year 2025

were $13,090,832, an increase of $147,701, or 1.1%, compared to $12,943,131 in fiscal year 2024.

Despite revenue growth of approximately

30%, total operating expenses grew only 1.1%, demonstrating meaningful operating leverage.

As a percentage of total revenues, operating

expenses declined to 37.4% in fiscal year 2025 from 47.8% in fiscal year 2024.

General and Administrative Expenses.

and administrative expenses (“G&A”) for fiscal year 2025 were $11,575,393, an increase of $285,228, or 2.5%, compared

to $11,290,165 in fiscal year 2024 (restated).

G&A as a percentage of revenues declined to 33.1% from 41.9%, reflecting the benefit

of operating leverage on a largely fixed cost base.

G&A principally includes employee compensation, professional fees (legal, accounting,

and audit), regulatory compliance costs across our multiple licensed subsidiaries, office rent and occupancy, and other corporate overhead.

The modest absolute increase reflects incremental compliance and operational costs associated with the addition of Alchemy International

and related regulatory obligations.

and Marketing Expenses.

Sales and marketing expenses for fiscal year 2025 were $1,336,685, a decrease of $129,931, or 8.9%, compared

to $1,466,616 in fiscal year 2024.

As a percentage of revenues, sales and marketing costs declined to 3.8% from 5.4%.

These expenses

primarily consist of trade show participation, client entertainment, online marketing, public relations, and related activities across

our brokerage and technology businesses.

Depreciation.

Depreciation expense for fiscal year

2025 was $178,754, a decrease of $7,596, or 4.1%, compared to $186,350 in fiscal year 2024, primarily reflecting the aging of the fixed

asset base, partially offset by additions during the year.

Income (Loss)

Operating income for fiscal year 2025 was $6,053,209, compared to an

operating loss of ($901,763) in fiscal year 2024 (restated).

The turnaround of $6,954,972 reflects the combination of significant revenue

growth, gross margin expansion, and strong operating leverage on the expense base.

The operating margin improved to 17.3% in fiscal year

2025 from a negative of 3.1% in fiscal year 2024.

Income (Expense)

Total other expense for fiscal year 2025 was $238,597, compared to

other income of $872,024 in fiscal year 2024.

The change of ($1,110,621) is primarily attributable to two items:

Other interest income (expense).

income was $16,157 in fiscal year 2025, compared to net interest expense of $638,483 in fiscal year 2024.

The improvement reflects significantly

reduced reliance on interest-bearing debt and improved cash management during fiscal year 2025.

Other income (expense).

Other expense was

($254,754) in fiscal year 2025, compared to other income of $1,510,507 in fiscal year 2024.

Fiscal year 2024 included a significant one-time

other income item that did not recur in fiscal year 2025.

The fiscal year 2025 amount reflects net foreign exchange transaction losses

and other miscellaneous items arising from the Company’s multi-currency operations.

for Income Taxes

The provision for income taxes was $nil for both

fiscal years 2025 and 2024.

The Company’s U.S.

parent entity has historically generated operating losses and maintains a full valuation

allowance against its domestic deferred tax assets.

The Company’s foreign subsidiaries are subject to income taxes in their respective

jurisdictions;

however, taxable income has been offset by available deductions or existing tax attributes.

See Note 15 to the consolidated

financial statements for further discussion of income taxes.

Net income (loss) attributable to FDCTech

Net income (loss) attributable to FDCTech shareholders

for fiscal year 2025 was $5,783,223, or $0.01 per basic and diluted share based on weighted average shares outstanding of 423,084,729,

compared to net loss of $18,781, or $0.0001 per share, in fiscal year 2024 (restated).

The improvement reflects the factors described

strong revenue growth, gross margin expansion, operating leverage, and the absence of significant non-recurring expenses in fiscal

The noncontrolling interest in fiscal year 2025

represents the 49% minority interest held by third parties in AD Advisory Services Pty Ltd.

Net income (loss) attributable to noncontrolling

interest was $31,389 in fiscal year 2025 (2024:

net loss attributable to NCI of $10,958).

and Capital Resources

December 31, 2022, and 2021, we had a cash balance of $264,829 and $93,546, respectively.

At December 31, 2022, and 2021, the working

capital surplus and deficit were $541,359 and $199,132, respectively.

The increase in the working capital surplus was mainly due to

the acquisition of NSFX, resulting in the increase of current assets over current liabilities as of December 31, 2022.

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 expenditures 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.

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.

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

The Company intends to continue growing its operations and raising funds through private equity and debt financing.

February 22, 2016, and April 24, 2017, the Company borrowed $1,000,000 from FRH Group, a founder and principal shareholder.

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 convertible into common stock initially at $0.10 per share but may be discounted under certain circumstances.

will the conversion price be less than $0.05 per share with a maximum of 20,000,000 shares.

January 29, 2019, to February 15, 2019, the Company issued 33,000 registered shares under the Securities Act of 1933 for a cash amount

The Company closed its offering effective February 26, 2019.

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.

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”).

May 22, 2020, the Company received proceeds of one hundred and forty-four thousand nine hundred and 00/100 Dollars ($144,900.00).

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.

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.

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.

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.

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.

April 2022, the Company engaged CIM Securities, LLC as its private placement agent to raise capital.

The Company did not raise any funds.

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.

September 30, 2022, the Company issued 30,000,000 restricted common shares for cash valued at $300,000.

CONCERN CONSIDERATION

have generated revenues of $6,453,732 for the fiscal year ending on December 31, 2022.

As of December 31, 2022, and 2021, the Company

had an accumulated deficit of $4,335,053 and $3,230,679.

Our independent auditors included an explanatory paragraph in their report on

the audited financial statements for the fiscal year ending December 31, 2022, and 2021, and the period from January 21, 2016 (inception)

to December 31, 2016, regarding concerns about our ability to continue as a going concern.

Our financial statements contain additional

note disclosures describing the circumstances that lead 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.

Accounting Policies and Significant Judgments and Estimates

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.

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.

have described significant accounting policies in Note 2 of our annual financial statements included in our 10-K for the fiscal year

ending December 31, 2020, filed with the SEC on March 3, 2021.

We evaluate our critical accounting estimates and judgments required by

our policies on an ongoing basis and update them as appropriate based on changing conditions.

Act Accounting Election

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.

Sheet Arrangements and Contractual Obligations

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.

Accounting Pronouncements

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.

have adopted ASC 606 - Revenue Recognition from January 1, 2019, and Amended ASU 2016-02, Leases (Topic 840) from January 1, 2020.

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, 2020, filed with the SEC on March 3, 2021.

Our primary sources of liquidity are cash generated

from operations, proceeds from financing activities, including related party advances and equity issuances, and cash held at our regulated

brokerage subsidiaries.

As of December 31, 2025, we had cash and cash equivalents of $17,669,749, out of which $15,258,896 was held at

various liquidity providers.

We have a positive working capital of $14,883,171, and total stockholders’ equity of $22,377,274.

believe our current liquidity position is sufficient to fund our operating and capital requirements for at least twelve months from the

date of this Annual Report.

While the Company achieved profitability in fiscal

year 2025, we note that operating cash flows were negative $41.0 million due to a substantial increase in related party receivables of

approximately $35.8 million, which represents intercompany funding arrangements expected to be settled during fiscal year 2026.

this item, adjusted operating cash generation reflects the improved profitability of the business.

Management continues to monitor working

capital carefully, given the scale of related party balances.

following table summarizes our cash flows for the fiscal years ended December 31, 2025, and December 31, 2024 (restated):

(Restated, Audited)

Net cash used in operating activities

$ (40,984,998 )

(13,621,417 )

Net cash provided by investing activities

Net cash provided by financing activities

Net increase (decrease) in cash

$ (7,707,208 )

Cash at beginning of period

Cash at end of period

Net cash used in operating activities for fiscal year 2025 was ($40,984,998),

compared to net cash used in operating activities of ($13,621,417) in fiscal year 2024.

While fiscal year 2025 net income was $5,783,223,

the primary driver of negative operating cash flow was a net increase in related party receivables of approximately $35.8 million, reflecting

advances to affiliated entities as part of the Company’s intercompany funding structure.

This is expected to be substantially settled

during fiscal year 2026.

notable working capital changes in fiscal year 2025 included:

(i) a decrease in customer funds of $5,712,901, held by our regulated brokerage entities;

(ii) a decrease in other current liabilities of ($3,195,117);

recovery of accrued income of $1,793,304.

Non-cash items included depreciation of $178,754.

Cash paid for interest and income taxes

was $nil in each year.

fiscal year 2024, net cash used in operating activities was ($13,621,417), reflecting a net decrease in customer funds of ($18,693,481),

partially offset by increases in other current liabilities of $4,557,126 and collections of accounts receivable of $981,618.

Net cash provided by investing activities for

fiscal year 2025 was $2,069,328, compared to $444,732 in fiscal year 2024.

In fiscal year 2025, the Company received a credit of $2,000,000

in seller financing for the business acquisition seller’s note and capitalized $316,937 of software development costs.

Foreign currency

translation effects contributed $386,265.

In fiscal year 2024, investing activities primarily

reflected changes in paid-in capital attributable to common control transactions of $1,338,592, partially offset by capitalized software

development costs of $75,766 and foreign currency effects of ($298,009).

Net cash provided by financing activities for

fiscal year 2025 was $31,208,462, compared to $7,237,181 in fiscal year 2024.

The fiscal year 2025 amount was primarily composed of:

related party advances received of $21,204,630, (ii) changes in additional paid-in capital of $9,969,735 related to equity transactions

and intercompany adjustments, and (iii) common stock issued for cash of $35,200.

These were partially offset by repayments of the Cares

Act PPP advance of ($5,661) and SBA loan repayments of ($8,506).

In fiscal year 2024, financing activities consisted

primarily of related party advances of $7,199,501 and common stock issued for cash of $20,000, partially offset by repayments of government-assistance

Cash and Cash Equivalents.

As of December

31, 2025, we had cash and cash equivalents of $17,669,749, out of which $15,258,896 was held at various liquidity providers.

is held primarily in operating accounts of our subsidiaries across multiple jurisdictions and in segregated client money accounts at our

regulated brokerage entities.

Of the total cash balance, a portion is subject to regulatory minimum requirements and is not freely available

for general corporate purposes.

Related Party Receivables and Advances.

of December 31, 2025, related party receivables totaled $37,477,356, representing amounts due from affiliated entities and related parties

under intercompany funding arrangements.

These are expected to be settled in the ordinary course of business during fiscal year 2026.

Related party advances payable of $29,197,470 represent amounts received from related parties to support the Company’s operations,

and these are expected to be repaid or converted during fiscal year 2026.

The net related party position (receivable less payable) was

approximately $8,279,886 as of December 31, 2025.

Customer Funds.

Our regulated brokerage

subsidiaries hold customer funds of $5,813,888 as of December 31, 2025 (2024:

$11,526,789).

These amounts are maintained in segregated

client accounts pursuant to applicable regulatory requirements and are not available for general corporate purposes.

Customer funds are

recognized as both an asset (segregated cash) and a corresponding liability in our consolidated balance sheet.

Lines of Credit and Debt.

As of December

31, 2025, our total outstanding debt obligations were approximately $2,567,030, consisting primarily of a business acquisition loan of

$2,350,000, a line of credit balance of $111,352, and an SBA Economic Injury Disaster Loan of $105,678 (non-current).

The SBA loan bears

interest at 3.75% per annum.

Capital Requirements

regulated subsidiaries are subject to minimum capital requirements imposed by their respective regulatory authorities.

Alchemy Markets

(MFSA, Malta) and Alchemy Prime Limited (FCA, United Kingdom) are subject to European Union and UK capital adequacy requirements

applicable to investment firms.

Alchemy International Ltd.

is subject to capital requirements under the laws of Seychelles.

Services Pty Ltd.

is subject to ASIC’s financial requirements for Australian financial services licensees.

As of December 31, 2025,

management believes that all regulated subsidiaries were in compliance with their respective minimum regulatory capital requirements.

Regulatory capital requirements may limit the ability of subsidiaries to distribute cash upstream to the parent company.

As of December 31, 2025, working capital was $14,883,171,

compared to working capital of $853,533 as of December 31, 2024 (restated).

The improvement of approximately $14.0 million reflects primarily

the growth in the related party receivable (classified as current), which increased by approximately $37.5 million, comprising primarily AIL’s current account receivable from Alchemy Capital Markets Ltd.

(ACM) and related affiliates,

which is partially offset by

an increase in related party advances payable of approximately $36.9 million, primarily owed to Alchemy DMCC ($25.5M), a Kundnani-affiliated entity.

Excluding related party receivables and advances, the Company’s

underlying working capital remains modestly positive.

Obligations and Commitments

principal contractual obligations as of December 31, 2025, consist of operating lease commitments, amounts outstanding under government-assistance

loan programs, and the business acquisition loan.

We have no material off-balance sheet arrangements.

We lease office space for our corporate headquarters in Irvine, California, and for our subsidiary offices in Malta, the United

Kingdom, Australia, Cyprus, and Seychelles.

As of December 31, 2025, right-of-use assets were $530,348, current operating lease liabilities

were $501,236, and non-current operating lease liabilities were $29,112.

The weighted-average remaining lease term for operating leases

was approximately 1.1 years, and the weighted-average discount rate was approximately 5.5%.

We have an outstanding Economic Injury Disaster Loan from the U.S.

Small Business Administration with a non-current balance

of $105,678 as of December 31, 2025.

The loan bears interest at 3.75% per annum with monthly principal and interest payments.

Acquisition Loan.

We have a business acquisition loan with a current balance of $2,350,000 as of December 31, 2025, an increase

of $2,000,000 from the prior year’s balance of $350,000, reflecting additional amounts drawn to fund the acquisition of Alchemy

International Ltd.

during fiscal year 2025.

Capital Requirements

future capital requirements will depend on a number of factors, including the growth rate of our revenue, our technology development

investments, regulatory capital requirements at our subsidiaries, the timing and extent of any strategic acquisitions, and general economic

and market conditions.

We believe our existing cash, anticipated cash generation from operations, and available financing sources will

be adequate to fund our operations and planned capital expenditures for at least the next twelve months.

If additional capital is required,

we may seek equity or debt financing;

however, there can be no assurance that financing will be available on acceptable terms or at all.

Any equity financing may result in dilution to existing stockholders.

are also pursuing a potential listing of our common stock on a national securities exchange in connection with a proposed public offering

of common stock (see Note 17 — Subsequent Events).

Proceeds from such an offering, if completed, would significantly enhance our

liquidity position and capital resources.

Sheet Arrangements

of December 31, 2025, we did not have any relationships with unconsolidated organizations, special purpose entities, or other arrangements

that would constitute off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K that have or are reasonably likely

to have a material current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital

expenditures, or capital resources.

Accounting Policies and Estimates

preparation of our consolidated financial statements in conformity with U.S.

GAAP requires management 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 period.

Actual results could differ materially from

those estimates.

We consider the following policies to be critical because they involve the most significant judgments and estimates

used in the preparation of our financial statements.

We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers.

Revenue is recognized when,

or as, control of promised goods or services is transferred to a customer in an amount that reflects the consideration we expect to receive.

For technology and software licensing, revenue is generally recognized over the contract term on a straight-line basis.

For brokerage

commissions and spreads, revenue is recognized on a trade-date basis.

For wealth management services, revenue is generally recognized

as services are rendered.

Management exercises judgment in determining the appropriate contract term, transaction price, and timing of

revenue recognition for arrangements with variable consideration or multiple performance obligations.

Software Development Costs.

We capitalize internal and external costs incurred during the application development stage of internal-use

software in accordance with ASC 350-40, Intangibles — Goodwill and Other — Internal-Use Software.

Preliminary project stage

and post-implementation costs are expensed as incurred.

Management exercises judgment in determining the appropriate stage of development

at which capitalization begins and ceases.

Capitalized costs are amortized on a straight-line basis over the estimated useful life of

the software, which we have generally estimated to be three to five years.

Impairment of capitalized software is assessed whenever events

or changes in circumstances indicate that the carrying amount may not be recoverable.

Currency Translation.

The functional currency of each of our foreign subsidiaries is the respective local currency.

Assets and liabilities

of foreign subsidiaries are translated into U.S.

dollars at exchange rates in effect at the balance sheet date, while revenues and expenses

are translated at average exchange rates for the reporting period.

Resulting translation adjustments are recorded as a component of accumulated

other comprehensive income (loss) in stockholders’ equity and are not included in determining net income.

Transaction gains and

losses arising from transactions denominated in currencies other than the functional currency are recognized in other income (expense)

in our consolidated statements of operations.

Value of Financial Instruments.

The Company’s brokerage subsidiaries carry trading positions at fair value, based on

quoted market prices (Level 1) or observable inputs (Level 2 in the fair value hierarchy).

As of December 31, 2025, the net fair

value of trading positions held by the firm was $1,183,873 (asset).

Management exercises judgment in

classifying assets and liabilities within the fair value hierarchy and in determining whether observable inputs are available for

valuation purposes.

and Intangible Assets.

Acquired intangible assets are recognized at fair value at the acquisition date and amortized over their estimated

useful lives.

Management exercises judgment in identifying and measuring intangible assets at acquisition, estimating their useful lives,

and assessing them for impairment.

As of December 31, 2025, acquired intangible assets, net, were $1,326,062.

There were no impairment

charges recognized in fiscal year 2025.

We account for income taxes using the asset and liability method, which requires recognition of deferred tax assets and liabilities

for the expected future tax consequences of differences between the financial reporting and tax bases of assets and liabilities.

the likelihood that deferred tax assets will be realized and establish valuation allowances when, in management’s judgment, it

is more likely than not that some or all of a deferred tax asset will not be realized.

operations carry a full valuation allowance.

The assessment of valuation allowances requires significant judgment regarding expected future taxable income, tax planning strategies,

and the reversal of temporary differences.

Issued Accounting Standards

Company evaluates accounting standards issued by the Financial Accounting Standards Board (FASB) and the SEC on an ongoing basis.

were no recently issued accounting standards that had or are expected to have a material impact on the Company’s consolidated financial

statements for fiscal year 2025.

As an emerging growth company, the Company has elected to use the extended transition period provided

by the JOBS Act for complying with new or revised financial accounting standards.

Act and Emerging Growth Company Status

are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as modified by the Jumpstart Our

Business Startups Act of 2012 (the “JOBS Act”).

As an emerging growth company, we are permitted to, and do, rely on exemptions

from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies, including

exemption from compliance with the auditor attestation requirement in the assessment of our internal control over financial reporting

pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 and reduced disclosure obligations regarding executive compensation in our

periodic reports.

the JOBS Act, emerging growth companies may delay adopting new or revised accounting standards until those standards apply to private

We have elected to avail ourselves of this extended transition period.

As a result, our financial statements may not be comparable

to those of companies that comply with such new or revised accounting standards on a non-delayed basis.

will remain an emerging growth company until the earliest of:

(i) the last day of the fiscal year following the fifth anniversary of

the completion of our initial public offering;

(ii) the last day of the fiscal year in which we have total annual gross revenue of at

least $1.235 billion;

(iii) the date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three-year

and (iv) the last day of the fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million

as of the prior June 30.

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.

STATEMENTS AND SUPPLEMENTARY DATA

financial statements required by this Item are presented beginning on Page F-20, and are incorporated herein by this reference.

IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K/A

Item 7. Management’s Discussion and Analysis