Item 1B. Unresolved Staff Comments
ITEM
1B.
UNRESOLVED
STAFF COMMENTS
None.
ITEM
1C.
CYBERSECURITY
Risk
Management and Strategy
The
Company has adopted a cybersecurity risk management framework designed to identify, assess,
and manage material risks arising from cybersecurity threats to its information systems,
client data, and financial technology infrastructure. Key elements of our framework include:
●
Threat
identification and assessment. We conduct periodic assessments of our information systems to identify vulnerabilities, evaluate
potential cybersecurity threats, and prioritize remediation efforts based on risk severity. These assessments incorporate threat
intelligence from industry sources and regulatory guidance issued by the financial authorities that govern our subsidiaries, including
the Malta Financial Services Authority (MFSA) and the UK Financial Conduct Authority (FCA).
●
Technical
safeguards. We employ a combination of industry-standard security technologies including network access controls, data encryption,
multi-factor authentication, intrusion detection systems, and endpoint protection tools across our global operations.
●
Incident
response. We maintain written incident response procedures that establish protocols for detecting, containing, and remediating
cybersecurity incidents, including escalation procedures to senior management and, where applicable, regulatory notification obligations.
●
Employee
training. We provide cybersecurity awareness training to employees and contractors with access to our information systems, with
emphasis on phishing, social engineering, and data handling practices.
●
Third-party
risk management. We rely on certain third-party
service providers for technology infrastructure, cloud computing, and payment processing. We assess the cybersecurity practices of
material vendors as part of our onboarding and ongoing monitoring processes; however, we cannot guarantee that third parties will
maintain adequate safeguards at all times.
●
Integration
with enterprise risk management. Cybersecurity risk is considered as part of the Company’s overall enterprise risk management
process. Material cybersecurity risks are reported to senior management and escalated to the Board of Directors as warranted.
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The
Company’s regulated subsidiaries are subject to cybersecurity and data protection requirements
under applicable financial services regulations, including requirements imposed by the MFSA,
FCA, and ASIC. Compliance with these frameworks is reviewed as part of each subsidiary’s
ongoing regulatory supervision.
At
December 31, 2025, we are not aware of any cybersecurity incidents that have materially affected, or are reasonably likely to materially
affect, our business, results of operations, or financial condition. We recognize, however, that the threat landscape is continuously
evolving, and there can be no assurance that our controls will prevent all future incidents. See “Item 1A — Risk Factors”
for a discussion of cybersecurity-related risks.
Governance
Board
Oversight. The Board
of Directors is responsible for overseeing the Company’s cybersecurity risk management.
Senior management provides the Board with periodic updates on the cybersecurity threat environment,
the status of the Company’s security posture, significant vulnerabilities or incidents,
regulatory developments, and the effectiveness of remediation efforts. The
Board reviews and approves the Company’s overall risk management framework, within
which cybersecurity risk is addressed, and engages with management on cybersecurity matters
as circumstances warrant.
Management’s
Role. Primary responsibility
for cybersecurity risk management rests with the Company’s Chief Executive Officer, Mitchell M. Eaglstein, who also serves as the
Company’s principal technology and operations executive and Chief Financial Officer, Imran Firoz, who serves as the Company’s
principal finance and controller executive. Mr. Eaglstein and Mr. Firoz have over 20 years of experience each in financial technology
and SEC-reporting companies, with extensive involvement in information systems, regulatory compliance, and operational risk management.
Day-to-day cybersecurity activities are coordinated by our
technology team across our operating subsidiaries, with support from external IT security consultants where specialized expertise is
required. Management reports cybersecurity matters to the Board through regular updates and, for potentially material incidents, through
immediate escalation.
ITEM
2.
OPERATING
LEASES
Current
Operating Leases
Irvine,
California, USA (Company’s Headquarters)
Effective
October 29, 2019, to the present, the Company leased office space at 200 Spectrum Center Drive, Suite 300, Irvine, CA 92618. As per the
Commitment Term of the lease (“Agreement”), this Agreement shall continue on a month-to-month basis (any term after the Commitment
Term, also known as “Renewal Term”). The Commitment Term and all subsequent Renewal Terms shall constitute the “Term.”
The Company may terminate this Agreement by delivering to the lessor Form (“Exit Form”) at least one (1) whole calendar month
before the month in which the Company intends to terminate this Agreement (“Termination Effective Month”). The Company is
entitled to use the office and conference space if needed. The new rent payment or membership fee for the Irvine Office is $95 per month,
compared to the previous rent payment or membership fee for the New York Office of $890 per month, which covers general and administrative
expenses. This agreement is classified as a service contract rather than a lease under ASC 842 - Leases, and payments are accounted for
as operating expenses rather than recognizing a Right-of-Use (ROU) asset or lease liability.
Brisbane,
Australia (ADS Office)
Effective
January 1, 2024, to the present, the Company has leased office space at Level 38, 71 Eagle Street, Brisbane City, QLD 4000, Australia.
This lease will continue on a month-to-month basis. ADS may terminate this Agreement by delivering to the lessor at least one (1) whole
calendar month before the month in which ADS intends to terminate the lease. ADS is entitled to use the office and conference space if
needed. The new rent payment or membership fee for the ADS Office is approximately $125 per month and is included as a general and administrative
expense. This agreement is classified as a service contract rather than a lease under ASC 842 - Leases, and payments are accounted for
as operating expenses rather than recognizing a Right-of-Use (ROU) asset or lease liability.
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Limassol,
Cyprus Lease (Company’s Executive Rental)
From
February 2019 to July 2023, the Company leased office space in Limassol District, Cyprus, from an unrelated party for a year. The office’s
monthly rent payment is $1,750, which is included in the general and administrative expenses. From July 2023 to the present, the Company
has leased a larger office space in the Limassol District, Cyprus, from an unrelated party for a one-year term. The office’s monthly
rent payment is approximately $3,500, which is included in the general and administrative expenses. From July 2023 to the present, the
Company has leased office space for its Chief Executive Officer. The down payment for the lease was approximately $6,300. The lease is
for one year and is renewable two months prior to the term’s end in June 2025. This agreement is classified as a residential rental
contract rather than a commercial lease and does not create a Right-of-Use (ROU) asset under ASC 842.
Limassol,
Cyprus Lease, Europe (ATECH Office)
Effective
August 26, 2024, ATECH has entered into a Sublease Agreement for office premises located on the ground floor at 10A-10C Eleftheriou Venizelou
Street, Limassol, Cyprus. The sublease is between Aldeon Property Partners Ltd (the “Sublessor”) and Alchemytech Ltd (the
“Sublessee”), with FDCTech, Inc. acting as the Guarantor. The leased premises are designated strictly for office use, and
any other usage is explicitly prohibited under the terms of the agreement. The lease term is for twenty-four (24) months, commencing
on October 1, 2024, and expiring on September 30, 2026. The lease agreement includes an option to extend the tenancy for up to two additional
two-year terms. The rent is subject to a 5% increase for each renewal period. Under the agreement, the Sublessee is obligated to pay
a total rent of €192,000 over the lease term, payable in monthly installments of €8,000 (or approximately $8,600) plus VAT.
Under ASC 842 - Leases, this agreement qualifies as a lease, and the Company will recognize a Right-of-Use (ROU) asset and corresponding
lease liability on its financial statements.
St.
Julian, Malta (AML Office)
Effective
July 11, 2024, to the present, AML leased office space with Regus Malta at Portomaso Business Centre, Portomaso, St. Julian, PTM01, Malta.
As per the lease, this agreement shall continue on a month-to-month basis (any term after the term, also known as “Renewal Term”).
The term and all subsequent renewal terms shall constitute the “Term.” AML may terminate this agreement by delivering to
Regus Malta at least one (1) whole calendar month before the month in which AML intends to terminate this lease. AML is entitled to use
the office and conference space if needed. The rent payment or membership fee for the AML Office is €1,659 per month. This agreement
is classified as a service contract rather than a lease under ASC 842 - Leases, and payments are accounted for as operating expenses
rather than recognizing a Right-of-Use (ROU) asset or lease liability.
Tel
Aviv, Israel (AML Sales Office)
Effective
July 1, 2023, AML has entered into a service agreement with Mindspace Ltd. for the use of office space and related services at Menachem
Begin 11, Ramat Gan, Israel. The agreement provides access to designated office space, common areas, and various business services, including
internet connectivity, printing, and access to conference rooms. The agreement operates on a monthly, automatically renewing basis with
a total monthly fee of $4,500 (including VAT). Additionally, an advance deposit of $6,300 was paid as security for the Company’s
obligations under the agreement. Under the terms of the agreement, Mindspace retains full discretion over space allocation and may relocate
the Company to a different office within the premises, provided that it gives prior notice. AML does not have exclusive control over
a specific office unit, and Mindspace provides shared services across its facilities. The agreement does not create a lease under ASC
842 – Leases and is accounted for as a service contract. As a result, payments under this agreement are classified as operating
expenses rather than recognizing a Right-of-Use (ROU) asset or lease liability.
London,
United Kingdom (APL Office)
Effective
December 20, 2024, APL entered into a lease agreement for office space located on the fifth floor at 142 Central Street, Clerkenwell,
London, EC1V BAR. Agop Tanielian and Hourig Mercedes Tanielian hold the lease as landlords, and the Company, through its subsidiary Alchemy
Prime Limited, is the tenant. The lease has a fixed term of five years, commencing in 2024 and expiring in 2029, with an annual rent
of £112,500 (or $12,000 monthly), payable in quarterly installments. APL is also liable for service charges, insurance, rent, and
maintenance responsibilities as specified in the agreement. The lease includes an option to terminate (“Break Clause”) on
or after 2026, provided that a four-month written notice is given prior. Additionally, the agreement requires APL to restore the premises
upon termination, including the removal of any alterations or fixtures made during the lease term. Under ASC 842 - Leases, this agreement
qualifies as a lease, and the Company will recognize a Right-of-Use (ROU) asset and corresponding lease liability on its financial statements.
Rental
expenses are included in General and Administrative costs.
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