What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-15 compared with 2025-11-13 · 388 added, 296 removed, 48 unchanged (93% of the section changed)

MANAGEMENT’S DISCUSSION

AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Quarterly Report Form 10-Q contains forward-looking statements.

14 unchanged sentences

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

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, digital assets, social/copy trading, and other high-growth fintech markets.

December 2021 onwards, the Company has been growing through its acquisition strategy, specializing in the purchase and integration of

small to mid-sized legacy financial services companies.

The Company intends to build a diversified global software-driven financial services

The Company continues to acquire, integrate, transform, and scale legacy financial service companies.

The Company replaces conventional

legacy software infrastructure of target companies with its proprietary, regulatory-grade Condor trading technologies, aiming to enhance

the end-user experience, increase client retention, and achieve cost synergies.

Company is a financial technology company specializing in developing and delivering innovative software solutions and business services

to the over-the-counter (OTC) brokerage and financial services industries.

The company provides a range of proprietary and third-party

technology solutions, including its flagship Condor Trading Technology , which supports multi-asset trading, risk management, and

pricing for forex, equities, commodities, and digital assets.

follows a strategic growth model centered on acquiring, integrating, and scaling legacy financial services firms.

Through its recent

acquisitions, the company has expanded its global footprint in wealth management, brokerage, and financial advisory services.

subsidiaries include:

AD Advisory Services

(ADS) – An Australian-regulated wealth management firm managing over $530 million in client assets with a network

of 28 financial advisors.

(“FDCTech,” “Company,” “we,” “us,” or “our”) is a financial technology

company specializing in developing and delivering innovative software solutions and business services to the over-the-counter (OTC) brokerage

and financial services industries.

The Company provides a range of proprietary and third-party technology solutions, including its flagship

Condor Trading Technology, which supports multi-asset trading, risk management, and pricing for forex, equities, commodities, and digital

FDCTech is a U.S.-based, fully reporting public company and currently trades under the symbol OTC:

in January 2016 as a back-office technology solution provider, FDCTech has transformed into a diversified global fintech platform through

strategic acquisitions.

Our growth trajectory includes the acquisitions of AD Advisory Services Pty Ltd.

(2021), Alchemy Markets Ltd.

(AML) – A Malta-based investment firm regulated by the Malta Financial Services Authority (MFSA), offering trading services

across multiple asset classes in various European markets.

Alchemy Prime Limited

(APL) – A UK-based investment firm regulated by the Financial Conduct Authority (FCA), providing investment advisory and

brokerage services.

AlchemyTech Ltd.

– A Cyprus-based technology, sales, and marketing service provider supporting the Company’s subsidiaries and affiliated

continues to drive innovation by developing next-generation trading platforms, such as the Condor Pro Multi-Asset Trading Platform ,

and expanding its market reach.

The company remains committed to leveraging proprietary technology and regulatory expertise to enhance

operational efficiencies and client engagement across global financial markets.

we have three primary business segments:

(1) Investment and Brokerage, (2) Wealth Management, and (3) Technology and Software Development.

and Brokerage (Europe and UK)

is authorized to deal with its account (market maker) as a Category 3 licensed entity by the Malta Financial Services Authority (MFSA),

receive and transmit orders for retail and professional clients, 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.

In May 2024, Mitchell M.

Eaglstein, CEO, was

appointed as the CEO and COO of Alchemy Markets Ltd.

(AML) to oversee operations in Malta.

is an investment firm regulated by the Financial Conduct Authority (FCA).

It provides investment advice, acts as an agent and principal,

and safeguards and administers assets in forex, equity, commodities, spread bets, and other financial assets.

It is authorized to do

business in several countries, including England, Scotland, Wales, and Northern Ireland.

May 27, 2025, FDCTech, Inc.

(the “Company”) formed a new wholly owned subsidiary, Prime Intermarket Group Eurasia (“PIG

Eurasia”), incorporated in the Republic of Mauritius.

PIG Eurasia is structured as a Private Company limited by shares and is regulated

by the Financial Services Commission of Mauritius under the Companies Act.

The subsidiary will operate under a SEC-2.1B Investment Dealer

License (Full-Service Dealer, excluding Underwriting).

At present, there PIG Eurasia has no operations.

and Brokerage (Trading Revenues) & Gross Margins*:

September 30,

Cost of sales

Gross Profit (loss)

Gross Margins

Management Business

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 Street, 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 a 51% owner of ADS.

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

scrutiny and is regulated by multiple Australian regulators.

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 28 advisors and $530+ million in funds under

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

ADS offers financial planners various

licensing, compliance, and education solutions to meet the specific needs of their practice.

Management Revenue & Gross Margins:

September 30,

Cost of sales

Gross profit (loss)

Gross margins

& Software Development Business

the three months ended September 30, 2025, and 2024, the Company had seven and nine licensing agreements, respectively, 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 is developing the Condor Investing & Trading App, a simplified trading platform designed for traders with varying levels

of experience in trading stocks, ETFs, and other financial markets, accessible from their mobile phones.

The Company expects to commercialize

the Condor Investing & Trading App by the end of the 2025 fiscal year.

Sales & Marketing Service Provider (Cyprus)

March 19, 2024, the Company established Alchemytech Ltd.

(ATECH), a Cypriot company.

ATECH provides the Company’s subsidiaries

and affiliate companies with information technology, sales, and marketing services.

The Company has mandated ATECH to develop, market,

and distribute the Condor Pro Multi-Asset Trading Platform to qualified market participants, including brokers, professional traders,

hedge funds, and other financial institutions.

& Software Development Revenue & Gross Margins:

September 30,

Cost of sales

Gross profit (loss)

Gross Margins

Acquisition Termination

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 believed that this would cause further delays in the approval process.

board has decided that the management team focus on expanding and developing our core non-US foreign exchange business to maximize shareholder

Acquisition Termination

April 2024, the Company terminated the letter of intent to acquire a community bank in Iowa.

As part of the termination, the Company

paid the community bank a sum of $100,000 in six equal installments of $15,000, plus one final payment of $10,000, from April 2024 to

November 2024.

Financial Summary

Company has prepared consolidated financial statements on a going concern basis, which assumes the realization of assets and the settlement

of liabilities and commitments in the ordinary course of business.

For the nine months ended September 30, 2025, and 2024, the Company

generated $17,315,723 and $18,178,864 in revenues, and a net profit of $436,159 and $861,395.

Condition as of September 30, 2025

September 30, 2025, the accumulated deficit, cash balance, and working capital surplus were $2,241,003, $24,777,611, and $9,426,209,

respectively.

(2022-2023), Alchemy Prime Limited (2023), and, most recently, Alchemy International Ltd.

(2025), expanding our global footprint across

Australia, Malta, the United Kingdom, Cyprus, Seychelles, and Mauritius.

is the parent holding company with the following wholly-owned and majority-owned subsidiaries:

Advisory Services Ltd.

CFDs, Stocks, Bonds

(excl the United Kingdom)

Trading & Third-party

International Ltd.

Trading & Third-party

Intermediary Services

Intermarket Group Eurasia (PIG)

Trading & Third-party

Business Segments

operate through four complementary business segments:

Through Alchemy Markets Ltd.

(Malta, MFSA-regulated), Alchemy Prime Limited (UK, FCA-regulated), and Alchemy International

(Seychelles, FSA-regulated), we provide multi-asset trading services in forex, CFDs, equities, commodities, and digital assets to

retail and institutional clients globally.

Through AD Advisory Services Pty Ltd.

(Australia, ASIC-regulated), we operate a wealth management business with 28 financial

advisors managing and advising over $530 million in funds under advice under the aegis of our license, where we provide licensing solutions

and financial planning services to these financial advisors.

and Software Development:

Through FDCTech and Alchemytech Ltd.

(Cyprus), we develop and license our proprietary Condor Trading Technology

suite, including the Condor Pro Multi-Asset Trading Platform and Condor Risk Management back-office system.

Intermediary Services:

Through Xoala Asia (Mauritius, FSC-licensed), we are developing a payment gateway, merchant acquiring, and

cross-border payment capabilities to complement our brokerage and wealth management operations.

This segment is in the early stages of

the three months ended March 31, 2026, the Company generated total revenue of $15,214,492, an increase of $8,252,944 (140.9%) over total

revenue of $5,976,948 for the three months ended March 31, 2025.

substantial growth in revenue was driven primarily by the full-quarter contribution of Alchemy International Ltd.

following the change of control approved by the Seychelles Financial Services Authority on October 29, 2025, and the closing of the acquisition

on November 11, 2025.

a Seychelles-licensed securities dealer (license SD136) regulated by the Financial Services Authority, broadened the Company’s

regulated multi-asset brokerage footprint to include Seychelles in addition to Malta (AML, MFSA-regulated) and the United Kingdom (APL,

FCA-regulated), and added a base of offshore brokerages, high-frequency traders, and institutional clients seeking regulated access to

foreign exchange and multi-asset markets.

full-quarter contribution from AIL during the three months ended March 31, 2026 (compared with no contribution during the three months

ended March 31, 2025) accounted for the substantial majority of the year-over-year increase in the Margin Brokerage segment.

The Technology

and Software Development segment also contributed to the increase, while the Wealth Management segment was substantially flat compared

with the prior-year period.

The Company also benefited from continued operating leverage on a substantially fixed cost base.

Company is also pursuing a potential listing of its common stock on a national securities exchange (the New York Stock Exchange or the

Nasdaq Stock Market) in connection with a proposed public offering of equity securities.

In connection with these initiatives, the Company

has engaged Lucosky Brookman LLP as legal counsel and is in discussions with E.F.

Hutton and ThinkEquity LLC as financial advisors.

completion of any such offering or listing is subject to market conditions and customary regulatory and exchange approvals, and no assurance

can be given that any such transaction will be completed.

Condition as of March 31, 2026

As of March 31, 2026, the Company had total assets of $72,195,266, compared to $63,771,196 as of December 31, 2025,

representing an increase of $8,424,070, or approximately 13.2%.

Total assets at March 31, 2026, were comprised primarily of cash and cash

equivalents of $36,891,541, related party receivables of $30,154,645, accounts receivable (net of allowance for doubtful accounts) of

$358,932, prepaid expenses (current and non-current) of $535,408, capitalized software (net) of $1,578,353, acquired intangible assets

(net) of $1,250,397, right-of-use lease assets of $668,214, property and equipment (net) of $187,657, and other current and non-current

assets aggregating $570,019.

The $8,424,070 increase in total assets during the three months ended March 31, 2026 was primarily attributable to:

(i) an increase in cash and cash equivalents of $19,221,792, reflecting cash generated from operations and the receipt by Alchemy International

(“AIL”) of customer funds in connection with the expansion of its brokerage operations;

partially offset by (ii) a decrease

in related party receivables of $7,322,711, as further described in Note 5, principally reflecting the net effect of cash collections

and non-cash netting arrangements with Alchemy DMCC during the period;

(iii) a decrease in the fair value of trading positions for the

firm of $1,111,487, reflecting the closing-out and transfer of certain trading positions in the ordinary course;

and (iv) a decrease in

other trade and tax receivables of $2,615,533, principally reflecting collections of receivables outstanding at year-end.

Total Liabilities

As of March 31, 2026, the Company had total liabilities

of $38,582,773, compared to $41,360,599 as of December 31, 2025, representing a decrease of $2,777,826, or approximately 6.7%.

Total liabilities

at March 31, 2026 were comprised primarily of customer funds payable of $28,339,255, related party advances payable of $3,296,890, accrued

expenses to related parties of $997,259, business acquisition loan of $2,350,000, accounts payable of $502,087, operating lease liabilities

(current and non-current) of $668,214, the SBA loan and accrued non-current interest aggregating $147,202, deferred tax liabilities of

$372,339, and other current liabilities of $1,909,527.

The $2,777,826 net decrease in total liabilities during

the three months ended March 31, 2026 was primarily attributable to:

(i) a decrease in related party advances payable of $25,900,580,

principally reflecting the settlement of AIL’s net advances payable to Alchemy DMCC through a combination of cash repayments and

non-cash netting arrangements as further described in Note 5;

partially offset by (ii) an increase in customer funds payable of $22,525,367,

reflecting growth in customer trading activity and customer deposits held by AIL in connection with the expansion of its brokerage operations;

(iii) an increase in accrued expenses to related parties of $464,972, primarily representing accrued executive compensation;

an increase in accounts payable and line of credit of $491,449 in the aggregate, reflecting normal operating activity.

Stockholders’ Equity and Working Capital

As of March 31, 2026, total stockholders’ equity

attributable to FDCTech, Inc.

stockholders was $33,568,694, compared to $22,377,274 as of December 31, 2025, representing an increase

of $11,191,420, or approximately 50.0%.

Total stockholders’ equity, including noncontrolling interests, was $33,612,493 as of March

31, 2026, compared to $22,410,597 as of December 31, 2025.

The components of stockholders’ equity as of March 31, 2026 consisted

of preferred stock and common stock at par value, additional paid-in capital of $28,199,590, additional paid-in capital relating to Series

B Preferred Stock of $3,344,063, subscription receivable of $(8,000,000), accumulated other comprehensive loss of $(2,427), and accumulated

surplus of $9,984,473.

The $11,191,420 increase in stockholders’ equity

attributable to FDCTech, Inc.

stockholders during the three months ended March 31, 2026 was primarily attributable to:

(i) net income

attributable to FDCTech, Inc.

shareholders of $6,863,678 for the period;

and (ii) an increase in additional paid-in capital of $4,643,653

arising from a transaction between entities under common control accounted for in accordance with ASC 805-50, Transactions Between Entities

Under Common Control, with the residual change reflecting movement in accumulated other comprehensive loss during the period.

No new shares

of the Company’s common stock or preferred stock were issued during the three months ended March 31, 2026.

Working capital, defined as total current assets less

total current liabilities, was $30,169,554 as of March 31, 2026, compared to $14,883,171 as of December 31, 2025, representing an increase

of $15,286,383, or approximately 102.7%.

The increase in working capital reflects the combined effect of the increase in cash and cash

equivalents and the settlement of the December 31, 2025, related party advances payable balance described above, partially offset by the

increase in customer funds payable during the period.

The Company’s improved working capital position, together with cash generated

from operations, is expected to support the Company’s ongoing operations and growth initiatives for at least the next twelve months.

Note on Common Control Transactions Affecting Additional

Paid-in Capital

The Company’s acquisitions of Alchemy Markets

(“AML”), Alchemy Prime Ltd.

(“APL”), and Alchemy International Ltd.

(“AIL”) were transactions

between entities under common control, as each of AML, APL, and AIL was, at the date of the respective acquisition, controlled by Mr.

Kundnani, who is also a Director and the principal beneficial owner of the voting securities of the Company.

Accordingly, the

Company has accounted for these acquisitions in accordance with ASC 805-50, Transactions Between Entities Under Common Control.

this guidance, the assets and liabilities of AML, APL, and AIL were recognized in the Company’s consolidated financial statements

at the historical carrying values of the transferor on the respective dates of transfer, and no goodwill or intangible assets were recognized

in connection with these common-control combinations.

The difference between the consideration transferred by the Company and the historical

carrying value of the net assets received was recorded as an adjustment to additional paid-in capital.

During the three months ended March 31, 2026, the

Company recorded a net increase to additional paid-in capital of $4,643,653 in connection with the finalization of the consolidation entries

relating to the acquisition of AIL, which was completed on November 11, 2025.

The adjustment reflects the difference between the consideration

transferred by the Company in connection with the AIL acquisition and AIL’s historical carrying value of net assets as of the acquisition

date, the determination of which was finalized during the three months ended March 31, 2026.

No new shares of the Company’s common

stock or preferred stock were issued in connection with this adjustment, and the adjustment had no effect on the Company’s results

of operations, cash flows, or total stockholders’ equity in the aggregate during the three months ended March 31, 2026, other than

as reflected within the components of stockholders’ equity.

The Company’s acquisition of AD Advisory Services

(“ADS”), an Australia-incorporated subsidiary, in which the Company acquired a 51% controlling interest, was not

a transaction between entities under common control.

The ADS acquisition was effected at arm’s length with an unrelated counterparty

and was accounted for as a business combination under ASC 805-10, Business Combinations, using the acquisition method.

Accordingly, the

assets and liabilities of ADS were recognized at their estimated fair values as of the acquisition date, and goodwill of $1,250,397 was

recognized in connection with the ADS acquisition, representing the excess of the consideration transferred over the fair value of the

identifiable net assets acquired.

The noncontrolling interest in ADS was measured at the proportionate share of the fair value of the

identifiable net assets at the acquisition date.

No adjustment to additional paid-in capital was recognized in connection with the ADS

Condition at December 31, 2025

of December 31, 2024, the accumulated deficit, cash balance, and working capital surplus were $2,563,620, $24,781,389, and $9,097,591,

respectively.

we believe 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 global customer base, it intends to acquire long-lived assets that will provide future economic benefits beyond fiscal 2025.

of December 31, 2025, the Company had total assets of $63,771,196, comprised primarily of cash and cash equivalents of $17,669,749, related

party receivables of $37,477,356, accounts receivable, net of $3,902,316, capitalized software (net) of $1,480,246, and other balance-sheet

items as further described in the Company’s Annual.

on Form 10-K/A for the fiscal year ended December 31, 2025.

liabilities at December 31, 2025, were $41,360,599, comprised primarily of related party advances payable of $25,900,580 (which were

settled during the three months ended March 31, 2026 — see Note 5 to the unaudited condensed consolidated financial statements);

accounts payable, accrued expenses, and other current liabilities;

the SBA loan;

the business acquisition loan;

and lease and other obligations.

stockholders’ equity at December 31, 2025, was $22,377,274, including an accumulated surplus of $3,120,795.

Working capital at

December 31, 2025, was $14,883,171.

OF OPERATIONS

Months Ended September 30, 2025, compared with Three Months Ended September 30, 2024

The consolidated revenues for the three months ended

September 30, 2025, and 2024 were $5,903,372 and $5,673,008, respectively.

During the three months ended September 30, 2025, and 2024,

the Company reported a net income and a net loss of $755,408 and $649,565, respectively.

total revenue breakdown for the three months ended September 30, 2025, and 2024 is below:

Three Months Ended

September 30,

Revenue Description

Technology Solutions

Months Ended March 31, 2026, compared with Three Months Ended March 31, 2025

The following table sets forth, for the periods indicated, the principal components of the Company’s consolidated

results of operations and the change between the comparative periods (dollar amounts in U.S.

Three Months Ended March 31,

Technology & software

Wealth management

During the three months ended September 30, 2025,

and 2024, the Company incurred general and administrative costs (“G&A”) of $2,743,574 and $2,754,088 (excluding amortization

expenses), respectively.

The G&A costs were 46.47% and 48.55% of the revenue for the three months ended September 30, 2025, and 2024,

respectively.

Amortization expenses were $0 and $93,541 for the three months ended September 30, 2025, and 2024, respectively, included

in the Cost of sales.

rental expense was $66,511 and $10,861 for the three months ended September 30, 2025, and 2024, respectively.

Company incurred $323,634 and $383,777 in sales, marketing, and advertising costs (“sales and marketing”) for the three months

ended September 30, 2025, and 2024.

The sales and marketing costs mainly included travel costs for tradeshows, customer meetings, online

marketing on industry websites, press releases, and public relations activities.

The sales, marketing, and advertising expenses represented

5.48% and 6.76% of the sales for the fiscal year ending September 30, 2025, and 2024, respectively.

months ended September 30, 2025, compared with Nine months ended September 30, 2024

The consolidated revenues for the nine months ended

September 30, 2025, and 2024 were $17,315,723 and $18,178,864, respectively.

During the three months ended September 30, 2025, and 2024,

the Company reported net income and a net loss of $436,159 and $861,395, respectively.

total revenue breakdown for the three months ended September 30, 2025, and 2024 is below:

Nine months ended

September 30,

Revenue Description

Technology Solutions

Total revenue

Cost of sales:

Technology & software

Wealth management

the nine months ended September 30, 2025, and 2024, the Company incurred general and administrative costs (“G&A”) of

$7,523,340 and $7,575,616 (excluding amortization expenses), respectively.

The G&A costs were 43.45% and 41.67% of the revenue for the nine months ended September 30, 2025, and 2024,

respectively.

Amortization expenses were $0 and $119,708 for the nine months ended September 30, 2025, and 2024, respectively, included

in the Cost of sales.

rental expense was $199,533 and $32,583 for the nine months ended September 30, 2025, and 2024, respectively.

Company incurred $898,430 and $1,211,724 in sales, marketing, and advertising costs (“sales and marketing”) for the nine

months ended September 30, 2025, and 2024.

The sales and marketing costs mainly included travel costs for tradeshows, customer meetings,

online marketing on industry websites, press releases, and public relations activities.

The sales, marketing, and advertising expenses

represented 5.19% and 6.67% of the sales for the fiscal year ending September 30, 2024, and 2023, respectively.

Total cost of sales

Operating expenses:

General and administrative

Sales and marketing

Total operating expenses

Operating income

Total other income (expense), net

Income before provision for income taxes

Provision for income taxes

Total revenue increased to $15,214,492 for the three

months ended March 31, 2026, compared to $5,976,948 for the three months ended March 31, 2025, an increase of $9,237,544, or approximately

The growth was driven primarily by the Margin Brokerage segment, which contributed $12,009,418 total revenue for the three months

ended March 31, 2026, compared to $3,628,349 for the comparable prior-year period, representing an increase of $8,381,069, or approximately

The increase in Margin Brokerage revenue reflects the full-quarter contribution of Alchemy International Ltd.

following the closing of the AIL acquisition on November 11, 2025 (with the change of control approved by the Seychelles Financial Services

Authority on October 29, 2025), together with the continuing operations of the Company’s other regulated brokerage subsidiaries,

Alchemy Markets Ltd.

(“AML”) in Malta and Alchemy Prime Ltd.

(“APL”) in the United Kingdom.

Technology and software revenue was $1,639,222 for

the three months ended March 31, 2026, compared to $813,747 for the comparable prior-year period, representing an increase of $825,475,

or approximately 101.4%, reflecting the expansion of the Company’s technology and platform services to its expanded broker-dealer

Wealth Management revenue was $1,565,852 for the three months ended March 31, 2026, compared to $1,534,852 for the comparable

prior-year period, representing an increase of $31,000, or approximately 2.0%, and was substantially consistent with the prior-year period.

Cost of Sales and Gross Profit

Cost of sales was $3,583,338 for the three months

ended March 31, 2026, compared to $3,117,389 for the three months ended March 31, 2025, an increase of $465,949, or approximately 14.9%.

The increase in cost of sales principally reflects higher liquidity-provider, payment-processing, and clearing costs incurred in support

of the Margin Brokerage and Wealth Management segments.

The rate of increase in cost of sales was substantially lower than the rate of

increase in revenue, principally as a result of (i) operating leverage on the Margin Brokerage segment’s fixed-cost base relative

to substantially higher transaction volumes, and (ii) the run-off during the period of certain technology cost of sales recognized in

the comparable prior-year period.

Gross profit was $11,631,154 for the three months

ended March 31, 2026, compared to $2,859,559 for the three months ended March 31, 2025, an increase of $8,771,595, or approximately 306.7%.

Consolidated gross margin was approximately 76.4% for the three months ended March 31, 2026, compared to approximately 47.8% for the three

months ended March 31, 2025, principally reflecting the change in revenue mix toward the higher-margin Margin Brokerage segment.

Operating Expenses

Total operating expenses were $4,775,845 for the three

months ended March 31, 2026, compared to $2,455,306 for the three months ended March 31, 2025, an increase of $2,320,539, or approximately

The increase in total operating expenses reflects higher general and administrative expense of $4,324,900 (compared to $2,140,270

for the comparable prior-year period, representing an increase of $2,184,630, or approximately 102.1%), higher sales and marketing expense

of $404,302 (compared to $276,204 for the comparable prior-year period, representing an increase of $128,098, or approximately 46.4%),

and higher depreciation expense of $46,643 (compared to $38,832 for the comparable prior-year period, representing an increase of $7,811,

or approximately 20.1%).

The increase in general and administrative expense

principally reflects additional compliance, audit, legal, and personnel-related expenses to support the Company’s expanded operating

footprint following the AIL acquisition, together with professional fees and other costs incurred in connection with the Company’s

contemplated listing of its common stock on a national securities exchange and the related proposed public offering.

The increase in sales

and marketing expense reflects expanded promotional and marketing activities in support of the Company’s broader brokerage and technology

client base, as further described in Note 2.

Operating Income

Operating income was $6,855,309 for the three months

ended March 31, 2026, compared to operating income of $404,253 for the three months ended March 31, 2025, representing an increase of

The increase in operating income reflects the increase in gross profit described above, partially offset by the increase in

total operating expenses described above.

Other Income (Expense), Net

Total other income (expense), net, was net other income

of $14,611 for the three months ended March 31, 2026, compared to net other expense of $(299,705) for the three months ended March 31,

2025, an improvement of $314,316.

Total other income (expense), net, for the three months ended March 31, 2026, consisted of other interest

income (expense) of $132,492 (compared to $4,483 for the comparable prior-year period) and other income (expense) of $(117,881) (compared

to $(304,188) for the comparable prior-year period).

The change principally reflects foreign exchange gains and losses on transactions

denominated in currencies other than the functional currency of the applicable subsidiary, interest income on operating cash balances,

and other miscellaneous items.

Net Income and Earnings per Share

Net income was $6,869,920 for the three months ended

March 31, 2026, compared to net income of $104,548 for the three months ended March 31, 2025, an increase of $6,765,372.

for income taxes was recorded for either period.

Net income attributable to FDCTech, Inc.

stockholders was $6,863,678 for the three months

ended March 31, 2026 ($0.016 per share, basic and diluted), compared to net income attributable to FDCTech, Inc.

stockholders of $118,046

for the three months ended March 31, 2025 ($0.000 per share, basic and diluted).

AND CAPITAL RESOURCES

of September 30, 2025, and December 31, 2024, we had cash balances of $24,777,611 and $24,781,389, respectively.

At September 30, 2025,

and December 31, 2024, the working capital surplus was $9,426,209 and $9,097,591, respectively.

The increase in working capital surplus

was primarily due to the acquisition of AML and APL, resulting in an increase in current assets over current liabilities as of September

generate a substantial portion of our operating income outside the United States, which is 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.

company maintains multiple sources of liquidity, including cash flow from operations, potential capital raises, and strategic financing

arrangements.

FDCTech is actively managing its working capital to support ongoing business expansion, including the development of its

Condor Trading Technology , regulatory compliance initiatives, and integration of newly acquired entities.

liquidity factors include:

Operating Cash Flow:

The company continues to invest in technology infrastructure and operational efficiency to drive sustainable revenue growth.

Capital Expenditures:

Investment in proprietary trading platforms and software development remains a priority.

Financing Activities:

FDCTech has historically relied on equity offerings, debt instruments, and related-party financing to support its expansion.

capital-raising efforts may be necessary to fund acquisitions and market expansion.

believes that existing cash reserves , combined with expected revenue growth and potential financing opportunities, will provide

sufficient liquidity to meet both operational and strategic needs.

However, external market conditions, regulatory changes, and acquisition-related

expenditures could impact future liquidity requirements.

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.

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.

the next 12 months, the Company will continue investing in sales, marketing, product development, and technology solutions to enhance

customer service and expand its market presence.

Capital expenditures are anticipated to rise to $1.000,000.

This allocation will encompass

working capital, software development, sales and marketing initiatives, as well as infrastructure enhancements, including the procurement

of computers and servers.

company expects that its existing cash reserves, cash equivalents, operational cash flows, and access to private equity and capital markets

will be sufficient to fund operations for at least the next 12 months.

These resources will support continued business operations, including

debt obligations and significant capital expenditures.

However, achieving sustainable revenue growth may require additional funding,

and there is no guarantee that financing will be available on favorable terms.

additional capital is required, the company may consider restructuring or refinancing existing debt, securing financing from financial

institutions, or raising funds through private equity or debt issuance.

FDCTech remains committed to expanding its operations while exploring

strategic funding opportunities to support long-term growth.

and SBA Funding in 2020

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”).

The Company paid off the PPP Note and all accrued interest as of September 30, 2025.

May 22, 2020, the Company received proceeds of $144,900.

The outstanding balance of the SBA loan, including accrued interest, is $107,805

as of September 30, 2025.

Party Investments and Acquisitions in 2023

January 25, 2023, the Company issued 5,309,179 restricted common shares to AJB as compensation for consideration shares related to the

AJB Note, valued at $60,525.

January 25, 2023, the Company issued 115,000,000 restricted common shares for cash valued at $550,000 to Kundnani, considered a related

March 28, 2023, the Company issued 2,000,000 restricted common shares for cash valued at $20,000.

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.

November 30, 2023, Kundnani, a related party, purchased 2,500,000 shares of the Company’s Series A Preferred stock for $2.5 million.

The Company has issued the Series A Preferred stock to Kundnani.

On November 30, 2023, Kundnani purchased 50,000,000 shares of the Company’s

common stock for $5.5 million.

The Company has issued the Common stock to Kundnani.

The Company has not received funds as of the date of the report.

Cash, Working Capital and Overview

As of March 31, 2026, the Company had cash and cash

equivalents of $36,891,541, compared to $17,669,749 as of December 31, 2025, representing an increase of $19,221,792, or approximately

Working capital, defined as total current assets less total current liabilities, was $30,169,554 as of March 31, 2026, compared

to $14,883,171 as of December 31, 2025, representing an increase of $15,286,383, or approximately 102.7%.

The increase in working capital

principally reflects the settlement of $25,900,580 of related party advances payable during the three months ended March 31, 2026, together

with the continued generation of operating cash flow, partially offset by an increase in customer funds payable in connection with the

expansion of the Company’s brokerage operations.

Cash Flows from Operating Activities

Net cash provided by operating activities was $40,727,261

for the three months ended March 31, 2026, compared to net cash provided by operating activities of $166,036 for the three months ended

March 31, 2025.

The increase in net cash provided by operating activities principally reflects (i) net income of $6,869,920 for the three

months ended March 31, 2026 (compared to $104,548 for the comparable prior-year period);

(ii) an increase in customer funds payable of

$22,525,367, reflecting the expansion of the Company’s brokerage operations and customer trading activity at Alchemy International

(iii) a decrease in related party receivables of $7,322,711, principally reflecting the net effect of cash collections and non-cash

netting arrangements with related parties as further described in Note 5;

(iv) a decrease in the fair value of trading positions for the

firm of $1,111,487, reflecting the closing-out of certain trading positions in the ordinary course;

(v) a decrease in tax receivables

from subsidiaries of $2,615,533;

and (vi) an increase in accrued expenses to related parties of $464,972 and an increase in accounts payable

partially offset by (vii) a decrease in other current liabilities of $490,392 and an increase in gross accounts receivable

Cash Flows from Investing Activities

Net cash provided by investing activities was $4,547,098

for the three months ended March 31, 2026, compared to net cash provided by investing activities of $828,537 for the three months ended

March 31, 2025.

Net cash provided by investing activities for the three months ended March 31, 2026 principally consisted of (i) $4,643,653

representing changes in paid-in capital arising from a transaction between entities under common control accounted for in accordance with

ASC 805-50, Transactions Between Entities Under Common Control, in connection with the Company’s prior acquisitions of subsidiaries

under common control, as further described elsewhere in this Report;

and (ii) $1,552 of net investment activity through a subsidiary,

partially offset by (iii) capitalized software development costs of $98,107.

Cash Flows from Financing Activities

Net cash used in financing activities was $25,736,656

for the three months ended March 31, 2026, compared to net cash provided by financing activities of $1,027,563 for the three months ended

March 31, 2025.

Net cash used in financing activities for the three months ended March 31, 2026 principally consisted of (i) the $25,900,580

settlement of related party advances payable as further described in Note 5, and (ii) net repayments of $2,126 on the Company’s

SBA loan, partially offset by (iii) net draws of $155,574 on the Company’s lines of credit and (iv) $10,476 of net activity attributable

to noncontrolling interest.

Net Change in Cash

The Company’s cash and cash equivalents increased

by $19,221,792 during the three months ended March 31, 2026, comprising net cash provided by operating activities of $40,727,261, net

cash provided by investing activities of $4,547,098, net cash used in financing activities of $(25,736,656), and the effect of exchange

rate changes on cash of $(315,911).

Cash and cash equivalents were $36,891,541 as of March 31, 2026, compared to $17,669,749 as of December

Long-Term Obligations and Capital Adequacy

As of March 31, 2026, the Company’s principal

long-term contractual obligations consisted of (i) the SBA loan in the non-current principal amount of $103,552, which bears interest

at a rate of 3.75% per annum and is scheduled to mature thirty (30) years from the date of the underlying promissory note;

(ii) the Business

acquisition loan of $2,350,000, comprising the $350,000 withheld portion of the purchase consideration owed to the former shareholders

of Alchemy Markets Ltd.

(which is currently the subject of litigation as further described in Note 7) and the $2,000,000 non-interest

bearing seller financing obligation owed to Sync Capital Limited, an entity controlled and owned by Mr.

Kundnani, a Director and

majority shareholder of the Company, which obligation is repayable from the proceeds of the Company’s contemplated listing of its

common stock on a national securities exchange;

(iii) operating lease liabilities (current and non-current) of $668,214 in the aggregate,

principally relating to the Company’s office facilities (see Note 8);

and (iv) deferred tax liabilities of $372,339 and accrued

non-current interest of $43,650.

Management believes that the Company’s existing cash and cash equivalents, anticipated cash flows generated

from operations, and available borrowings under its existing credit lines will be sufficient to fund the Company’s operations and

meet its known contractual obligations and capital commitments for at least the twelve (12) months following the date of this Report.

The Company may from time to time raise additional capital through private or public offerings of equity or debt securities, or through

additional credit facilities, to support its strategic growth initiatives, including in connection with the Company’s contemplated

listing of its common stock on a national securities exchange and any related underwritten public offering.

There can be no assurance

that additional capital, if needed, will be available on terms acceptable to the Company or at all.

CONCERN CONSIDERATION

generated revenues of $17,315,723 and $18,178,864 for the nine months ended September 30, 2025, and 2024, respectively.

As of September

30, 2025, and December 31, 2024, the accumulated deficit was $2,241,003 and $2,563,620.

Our independent auditors included an explanatory

paragraph in their reports on the audited financial statements for the fiscal years ending December 31, 2024, and 2023, regarding concerns

about our ability to continue as a going concern.

Our financial statements include additional note disclosures that describe the circumstances

leading 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.

Company has prepared its accompanying consolidated financial statements on a going concern basis, which contemplates the realization

of assets and the satisfaction of liabilities and other commitments in the ordinary course of business.

In accordance with Accounting

Standards Codification (“ASC”) 205-40, Presentation of Financial Statements — Going Concern, management has evaluated

whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to

continue as a going concern within one year after the date that these consolidated financial statements are issued.

As of March 31, 2026, the Company had cash and cash

equivalents of $36,891,541, working capital of $30,169,554, total stockholders’ equity of $33,612,493, and an accumulated surplus

of $9,984,473, compared to cash and cash equivalents of $17,669,749, working capital of $14,883,171, total stockholders’ equity

of $22,410,597, and an accumulated surplus of $3,120,795 as of December 31, 2025.

During the three months ended March 31, 2026, the Company

generated revenues of $15,214,492 (compared to $5,976,948 for the three months ended March 31, 2025), net income of $6,869,920 (of which

$6,863,678 was attributable to the stockholders of FDCTech, Inc.

and $6,242 was attributable to noncontrolling interests, compared to

consolidated net income of $104,548 for the three months ended March 31, 2025), and net cash provided by operating activities of $40,727,261

(compared to $166,036 for the three months ended March 31, 2025).

Based on management’s evaluation of the Company’s historical and projected operating cash flows, existing

cash and cash equivalents, working capital position, accumulated surplus, available borrowing capacity under existing credit facilities,

and known contractual obligations and capital commitments, management has concluded that the Company’s existing cash and cash equivalents

and anticipated cash flows from operations are sufficient to fund the Company’s operations and meet its known obligations as they

become due for at least the twelve months following the date of issuance of these consolidated financial statements.

Accordingly, management

has concluded that there is no substantial doubt about the Company’s ability to continue as a going concern within one year after

the date that these consolidated financial statements are issued.

Accounting Policies and Significant Judgments and Estimates

5 unchanged sentences

as of the date of the financial statements, and the reported amounts of revenues and expenses for the reporting periods.

more detail, we have described significant accounting policies in Note 2 of our annual financial statements included in our 10-K for

the fiscal year ended December 31, 2023, filed with the SEC on October 15, 2024.

more detail, we have described significant accounting policies in Note 2 of our annual financial statements included in our 10-K/A for

the fiscal year ended December 31, 2025, filed with the SEC on April 22, 2026.

We continually evaluate our critical accounting estimates

15 unchanged sentences

for applicability and impact on its consolidated financial statements.

have adopted ASC 606, Revenue from Contracts with Customers, and ASC 842 (formerly ASU 2016-02, Leases) as of March 31, 2020.

The amendments

in these ASUs are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.

Early adoption was permitted and consistent with SEC guidance;

we implemented these standards as required.

The adoption of these standards

did not have a material impact on our consolidated financial statements.

Company has reviewed recently issued ASUs that are not yet effective and expects no significant impact on its financial statements or

disclosures upon adoption.

As a smaller reporting company, we have elected to take advantage of the extended transition period for complying

with new or revised accounting standards, as permitted by the JOBS Act and SEC rules applicable to emerging growth companies.

November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,”

which requires public entities to disclose significant segment expenses regularly provided to the chief operating decision maker, an

amount and description of other segment items, and additional segment information.

The Company adopted ASU 2023-07 effective January

1, 2024, on a retrospective basis.

The adoption did not have a material impact on the Company’s consolidated financial statements

but expanded segment disclosures.

December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” which requires

public business entities to disclose, on an annual basis, specific categories in the rate reconciliation and information about income

taxes paid by jurisdiction.

ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024,

with early adoption permitted.

The Company will adopt ASU 2023-09 in its Annual Report on Form 10-K for the fiscal year ending December

31, 2026, and is currently evaluating the impact on its consolidated financial statement disclosures.

November 2024, the FASB issued ASU 2024-03, “Income Statement — Reporting Comprehensive Income — Expense Disaggregation

Disclosures (Subtopic 220-40),” which requires public business entities to disclose disaggregated information about specific income

statement expense categories.

ASU 2024-03 is effective for public business entities for annual periods beginning after December 15, 2026,

and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is

currently evaluating the impact on its consolidated financial statement disclosures.

recently issued ASUs not yet adopted by the Company are not expected to have a material impact on the Company’s consolidated financial

statements when adopted.

a more detailed description of our significant and critical accounting policies, please refer to Note 2 in the consolidated financial

statements included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on September 30, 2025.

QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISKS.

statements included in our Annual Report on Form 10-K/A for the year ended December 31, 2025, filed with the SEC on April 22, 2026.

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.

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-Q

Item 2. Management’s Discussion and Analysis