What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-17 compared with 2026-05-15 · 486 added, 312 removed, 124 unchanged (87% of the section changed)

22 unchanged sentences

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.

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

Through its acquisitions,

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

in January 2016 as a back-office technology solution provider, FDCTech has transformed into a comprehensive, end-to-end trading platform

offering foreign exchange (FX), contracts for difference (CFDs), equities, bonds, and wealth management services.

Our growth trajectory

includes the acquisitions of AD Advisory Services Pty Ltd.

(2021), Alchemy Markets Ltd.

(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.

(2022–2023), Alchemy Prime Limited (2023),

Alchemy International Ltd.

(2025), and Alchemy Markets (Cayman) Ltd.

(2026), together with the establishment of Alchemytech Ltd., now

Integrated Solutions Ltd.

(2024), and Xoala Asia (2025), expanding our global footprint across Australia, Malta, the United

Kingdom, Cyprus, Seychelles, Mauritius, and the Cayman Islands.

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

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Trading & Third-party

Integrated Solutions Ltd.

International Ltd.

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Trading & Third-party

Markets (Cayman) Ltd.

Investment Business (Broker/Dealer)

International

Trading & Third-party

AP Cyprus Ltd.

(XOA, Cyprus)

Treasury and Payment Processing

June 2026, Alchemytech Ltd.

changed its name to T.I.C.G.

Integrated Solutions Ltd.

Xoala Asia holds 100% of Xoala

AP Cyprus Ltd.

(“XOA, Cyprus”), a Cyprus-based subsidiary providing intra-group treasury and payment-processing services.

In June 2026, the Company acquired 100% of Alchemy Markets (Cayman) Ltd.

(“AML Cayman”), a Cayman Islands company licensed

and regulated by the Cayman Islands Monetary Authority as a securities investment business licensee holding a Broker/Dealer license,

which authorizes it to buy, sell, subscribe for, or underwrite securities.

AML Cayman has been consolidated since June 19, 2026.

the intra-group exemption in Section 3(3)(n) of the Cyprus Payment Services Law, no Central Bank of Cyprus payment institution or electronic

money institution license is required for XOA, Cyprus.

Company’s operating subsidiaries are described below:

Advisory Services Pty Ltd.

(ADS) – An Australian-regulated wealth management firm regulated by the Australian Securities and Investments

Commission (ASIC), managing and advising on approximately $770 million in client funds under advice with a network of 26 financial advisors.

(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.

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

and brokerage services.

Integrated Solutions Ltd.

(ATECH) – A Cyprus-based technology, sales, and marketing service provider supporting the Company’s

subsidiaries and affiliated companies.

International Ltd.

(AIL) – A Seychelles-licensed securities dealer regulated under license number SD136 by the Financial Services

Authority (FSA).

Asia (XOA) – A Mauritian-based payment provider regulated by the Financial Services Commission of Mauritius (the “FSC”)

to operate as a payment intermediary in Mauritius.

Intermarket Group Eurasia (PIG) – A Mauritian-based company structured as a private company limited by shares and regulated by

the Financial Services Commission.

Markets (Cayman) Ltd.

(AML Cayman) – A Cayman Islands company licensed and regulated by the Cayman Islands Monetary Authority (CIMA)

as a securities investment business licensee.

AML Cayman holds a Broker/Dealer license, which authorizes it to buy, sell, subscribe for,

or underwrite securities.

AP Cyprus Ltd.

(XOA, Cyprus) – A Cyprus-based subsidiary of Xoala Asia providing intra-group treasury and payment-processing services.

History and Transformation

2021, the Company’s revenues came solely from technology licensing.

By fiscal year 2024 and during fiscal year 2025, the Company

had transformed into a diversified global fintech with revenues from technology, financial planning, and brokerage trading operations.

The Company has undergone a significant transformation since its inception to the present:

December 2021, the Company acquired 51% of AD Advisory Services Pty Ltd.

(ADS), an Australian wealth management firm.

For fiscal year

2021, the Company reported revenue of $0.46 million and net assets of $1.41 million.

June 2023, the Company acquired 51% of Alchemy Markets Ltd.

(AML), a Malta-based financial services firm regulated by the Malta Financial

Services Authority.

For fiscal year 2022, the Company reported revenue of $6.4 million and net assets of $1.60 million.

November 2023, the Company acquired 100% of AML and Alchemy Prime Ltd.

(APL), a UK-based prime-of-prime brokerage regulated by the Financial

Conduct Authority.

For fiscal year 2023, the Company reported revenue of $12.8 million and net assets of $13.05 million.

March 2024, the Company established Alchemytech Ltd.

(ATECH) in Cyprus as a technology, sales, and marketing service provider supporting

the Company’s subsidiaries and affiliated companies.

year 2024 represented the first full year of integration of ADS, AML, and APL.

For fiscal year 2024, the Company reported revenue of

$26.9 million and net assets of $14.45 million.

October 2025, the Company acquired AIL, a key operational subsidiary within the Company’s expanding global architecture, enabling

the Company to serve a broader base of offshore brokerages, high-frequency traders, and institutional clients seeking regulated access

to foreign exchange and multi-asset markets.

November 2025, the Company established Xoala Asia, which was granted a Payment Intermediary Services (“PIS”) license by the

Financial Services Commission of Mauritius (the “FSC”) to operate as a payment intermediary in Mauritius.

Xoala Asia holds

100% of Xoala AP Cyprus Ltd., a Cyprus company providing intra-group treasury and payment-processing services.

June 2026, Alchemytech Ltd.

changed its name to T.I.C.G.

Integrated Solutions Ltd., and the Company acquired 100% of Alchemy Markets

(Cayman) Ltd.

(AML Cayman), a Cayman Islands company licensed by the Cayman Islands Monetary Authority to conduct securities investment

business under a Broker/Dealer license.

The acquisition extends the Company’s regulated brokerage footprint to the Cayman Islands.

Business Segments

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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.

Through FDCTech and T.I.C.G.

Integrated Solutions Ltd.

(formerly 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:

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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.

the three months ended June 30, 2026, the Company generated total revenue of $17,472,536, an increase of $12,052,745 (222.4%) over total

revenue of $5,419,791 for the three months ended June 30, 2025.

During the six months ended June 30, 2026, the Company generated total

revenue of $32,687,028, an increase of $21,290,289 (186.8%) over total revenue of $11,396,739 for the six months ended June 30, 2025.

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

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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.

full-quarter contribution from AIL during the three and six months ended June 30, 2026 (compared with no contribution during the three

and six months ended June 30, 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

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

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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

Condition as of June 30, 2026

of June 30, 2026, the Company had total assets of $55,089,794, compared to $64,051,886 as of December 31, 2025, representing a decrease

of $8,962,092, or approximately 14.0%.

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

Total assets at June 30, 2026, were comprised primarily of cash and cash equivalents of $18,184,787

and restricted cash (client funds, segregated) of $7,699,708, related party receivables of $21,783,493, accounts receivable (net of allowance

for doubtful accounts) of $177,775, prepaid expenses (current and non-current) of $541,225, capitalized software (net) of $1,879,461,

acquired intangible assets (net) of $1,280,522, right-of-use lease assets of $766,338, property and equipment (net) of $180,424, and

other current and non-current assets aggregating $2,596,061.

$8,962,092 decrease in total assets during the six months ended June 30, 2026 was primarily attributable to:

(i) a decrease in related

party receivables of $18,306,558, 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;

(ii) a decrease in the fair value of trading positions for the firm of $1,094,757,

reflecting the closing-out and transfer of certain trading positions in the ordinary course;

and (iii) net decreases in acquired intangible

assets, right-of-use lease assets, prepaid expenses, and other non-current assets in the ordinary course;

partially offset by (iv) an

increase in cash, cash equivalents, and restricted cash of $8,214,746, reflecting cash generated from operations and the receipt by Alchemy

International Ltd.

(“AIL”) of customer funds in connection with the expansion of its brokerage operations, (v) an increase

in accrued income of $2,017,206, and (vi) an increase in capitalized software (net) of $399,215.

of June 30, 2026, the Company had total liabilities of $15,779,315, compared to $41,360,598 as of December 31, 2025, representing a decrease

of $25,581,283, or approximately 61.9%.

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

Total liabilities at June 30, 2026 were comprised primarily of client funds payable of $7,699,708,

business acquisition loan of $2,350,000, related party advances payable of $1,931,797, accrued expenses to related parties of $1,152,784,

other current liabilities of $831,415, operating lease liabilities (current and non-current) of $482,055, accounts payable of $357,840,

line of credit of $297,862, deferred tax liabilities of $191,469, financial liabilities at fair value through profit and loss of $172,968,

income tax payable of $170,382, and the SBA loan and accrued non-current interest aggregating $141,035.

$25,581,283 net decrease in total liabilities during the six months ended June 30, 2026 was primarily attributable to:

(i) a decrease

in related party advances payable of $27,265,673, 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;

(ii) a decrease in other

current liabilities of $1,301,578;

and (iii) a decrease in deferred tax liabilities of $186,506;

partially offset by (iv) an increase

in client funds payable of $1,885,820, reflecting growth in customer trading activity and customer deposits held by AIL in connection

with the expansion of its brokerage operations;

(v) an increase in accrued expenses to related parties of $620,497, primarily representing

accrued executive compensation;

(vi) an increase in accounts payable and line of credit of $378,138 in the aggregate, reflecting normal

operating activity;

and (vii) the recognition of financial liabilities at fair value through profit and loss of $172,968 and income tax

payable of $170,382.

Stockholders’

Equity and Working Capital

of June 30, 2026, total stockholders’ equity attributable to FDCTech, Inc.

stockholders was $39,313,273, compared to $22,657,965

as of December 31, 2025, representing an increase of $16,655,308, or approximately 73.5%.

Total stockholders’ equity, including

noncontrolling interests, was $39,310,479 as of June 30, 2026, compared to $22,691,288 as of December 31, 2025.

The components of stockholders’

equity as of June 30, 2026 consisted of preferred stock and common stock at par value, additional paid-in capital of $25,910,095, additional

paid-in capital relating to Series B Preferred Stock of $3,344,063, subscription receivable of $(8,000,000), accumulated other comprehensive

income of $78,321, and accumulated surplus of $17,979,684.

$16,655,308 increase in stockholders’ equity attributable to FDCTech, Inc.

stockholders during the six months ended June 30, 2026

was primarily attributable to:

(i) net income attributable to FDCTech, Inc.

shareholders of $14,578,197 for the period;

and (ii) an increase

in additional paid-in capital of $2,295,047 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

and six months ended June 30, 2026.

capital, defined as total current assets less total current liabilities, was $33,063,252 as of June 30, 2026, compared to $17,831,410

as of December 31, 2025, representing an increase of $15,231,842, or approximately 85.4%.

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.

on Common Control Transactions Affecting Additional Paid-in Capital

Company’s acquisitions of Alchemy Markets Ltd.

(“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

(“APL”), and Alchemy International

(“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.

Under 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.

the three and six months ended June 30, 2026, the Company recorded a net increase to additional paid-in capital of $2,295,047 in connection

with the finalization of the consolidation entries relating to the acquisition of AIL, which was completed on November 11, 2025.

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 and six

months ended June 30, 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 and six months ended June 30, 2026, other than as reflected within the components of stockholders’

Company’s acquisition of AD Advisory Services Pty Ltd.

(“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 acquired intangible assets, including goodwill (carrying value of $1,280,522 at June 30, 2026), were 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 acquisition.

Condition at December 31, 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.

of December 31, 2025, the Company had total assets of $64,051,886, comprised primarily of cash, cash equivalents, and restricted cash

of $17,669,749, related party receivables of $40,090,051, accounts receivable, net of $188,415, 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);

liabilities at December 31, 2025, were $41,360,598, comprised primarily of related party advances payable of $29,197,470 (of which $27,265,673

was settled during the three and six months ended June 30, 2026 — see Note 5 to the unaudited condensed consolidated financial

accounts payable, accrued expenses, and other current liabilities;

1 unchanged sentence

the business acquisition loan;

and lease and other obligations.

and other obligations.

stockholders’ equity at December 31, 2025, was $22,691,288, including an accumulated surplus of $3,401,487.

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OF OPERATIONS

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,

and six months ended June 30, 2026, compared with three and six months ended June 30, 2025

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 June 30,

Technology & software

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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

Net income attributable to noncontrolling interest

Net income attributable to FDCTech, Inc.

Six Months Ended June 30,

Technology & software

Wealth management

Total revenue

Cost of sales:

Technology & software

Wealth management

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

Net income attributable to noncontrolling interest

Net income attributable to FDCTech, Inc.

revenue increased to $17,472,536 for the three months ended June 30, 2026, compared to $5,419,791 for the three months ended June 30,

2025, an increase of $12,052,745, or approximately 222.4%.

For the six months ended June 30, 2026, total revenue was $32,687,028, compared

to $11,396,739 for the six months ended June 30, 2025, an increase of $21,290,289, or approximately 186.8%.

The growth was driven primarily

by the Margin Brokerage segment, which contributed $14,264,990 of total revenue for the three months ended June 30, 2026, compared to

$2,587,906 for the comparable prior-year period, representing an increase of $11,677,084, or approximately 451.2%, and $26,274,408 for

the six months ended June 30, 2026, compared to $6,216,255 for the comparable prior-year period, representing an increase of $20,058,153,

or approximately 322.7%.

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.

(“AIL”) 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,

and software revenue was $1,393,442 for the three months ended June 30, 2026, compared to $1,178,215 for the comparable prior-year period,

representing an increase of $215,227, or approximately 18.3%, and $3,032,664 for the six months ended June 30, 2026, compared to $1,991,962

for the comparable prior-year period, representing an increase of $1,040,702, or approximately 52.2%, in each case reflecting the expansion

of the Company’s technology and platform services to its expanded broker-dealer client base.

Wealth Management revenue was $1,814,104

for the three months ended June 30, 2026, compared to $1,653,670 for the comparable prior-year period, representing an increase of $160,434,

or approximately 9.7%, and $3,379,956 for the six months ended June 30, 2026, compared to $3,188,522 for the comparable prior-year period,

representing an increase of $191,434, or approximately 6.0%.

of Sales and Gross Profit

of sales was $5,598,307 for the three months ended June 30, 2026, compared to $3,114,093 for the three months ended June 30, 2025, an

increase of $2,484,214, or approximately 79.8%.

For the six months ended June 30, 2026, cost of sales was $9,181,645, compared to $6,231,482

for the six months ended June 30, 2025, an increase of $2,950,163, or approximately 47.3%.

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

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 reclassification, in the restated comparative period, of Alchemytech Ltd.

cost of sales from the Technology & Software

segment to the Brokerage segment, which reduced technology cost of sales in both periods presented.

profit was $11,874,229 for the three months ended June 30, 2026, compared to $2,305,698 for the three months ended June 30, 2025, an

increase of $9,568,531, or approximately 415.0%.

For the six months ended June 30, 2026, gross profit was $23,505,383, compared to $5,165,257

for the six months ended June 30, 2025, an increase of $18,340,126, or approximately 355.1%.

Consolidated gross margin was approximately

68.0% and 42.5% for the three months ended June 30, 2026, and 2025, respectively, and approximately 71.9% and 45.3% for the six months

ended June 30, 2026, and 2025, respectively, principally reflecting the change in revenue mix toward the higher-margin Margin Brokerage

operating expenses were $4,490,349 for the three months ended June 30, 2026, compared to $2,472,243 for the three months ended June 30,

2025, an increase of $2,018,106, or approximately 81.6%.

For the six months ended June 30, 2026, total operating expenses were $9,262,607,

compared to $4,923,957 for the six months ended June 30, 2025, an increase of $4,338,650, or approximately 88.1%.

For the three months

ended June 30, 2026, the increase reflects higher general and administrative expense of $4,230,569 (compared to $2,135,030, an increase of $2,095,539, or approximately 98.2%) and higher depreciation expense of $45,695 (compared to $43,276, an increase of $2,419, or approximately

5.6%), partially offset by lower sales and marketing expense of $214,085 (compared to $293,937, a decrease of $79,852, or approximately

For the six months ended June 30, 2026, general and administrative expense was $8,551,882 (compared to $4,271,708, an increase

of $4,280,174, or approximately 100.2%), sales and marketing expense was $618,387 (compared to $570,141, an increase of $48,246, or approximately

8.5%), and depreciation expense was $92,338 (compared to $82,108, an increase of $10,230, or approximately 12.5%).

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 for the six-month period reflects

expanded promotional and marketing activities in support of the Company’s broader brokerage and technology client base, as

further described in Note 2.

income was $7,383,880 for the three months ended June 30, 2026, compared to an operating loss of $(166,545) for the three months ended

June 30, 2025, representing an improvement of $7,550,425.

For the six months ended June 30, 2026, operating income was $14,242,776, compared

to operating income of $241,300 for the six months ended June 30, 2025, representing an increase of $14,001,476.

The increase in operating

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

Income (Expense), Net

other income (expense), net, was net other income of $292,125 for the three months ended June 30, 2026, compared to net other expense

of $(258,911) for the three months ended June 30, 2025, an improvement of $551,036.

For the six months ended June 30, 2026, total other

income (expense), net, was net other income of $306,736, compared to net other expense of $(352,634) for the six months ended June 30,

2025, an improvement of $659,370.

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.

For the three months ended June 30, 2026, total other income (expense), net, consisted of other interest

income of $72,848 (compared to $10,986 for the comparable prior-year period) and other income of $219,277 (compared to $(269,897) for

the comparable prior-year period).

For the six months ended June 30, 2026, it consisted of other interest income of $205,296 (compared

to $15,469) and other income of $101,440 (compared to $(368,103)).

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.

Income and Earnings per Share

Net income was $7,676,005 for the three months ended June 30, 2026, compared to a net loss of $(425,456) for the

three months ended June 30, 2025, an improvement of $8,101,461.

For the six months ended June 30, 2026, net income was $14,549,512, compared

to a net loss of $(111,334) for the six months ended June 30, 2025, an improvement of $14,660,846.

No provision for income taxes was recorded

for any period presented;

as described in Note 14, the Company had not received complete income tax information from its foreign subsidiaries

as of the date of this Report, and management currently estimates the consolidated provision for the six months ended June 30, 2026, once

determined, in the range of approximately $83,000 to $177,000.

Investors should not regard the absence of a recorded tax provision as

an indication that the Company’s foreign operations bear no income tax.

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).

stockholders was $7,710,931

for the three months ended June 30, 2026 ($1.82 per share basic and $0.03 per share diluted), compared to a net loss attributable to FDCTech,

stockholders of $(437,923) for the three months ended June 30, 2025 ($(0.10) per share, basic and diluted), and $14,578,197 for the

six months ended June 30, 2026 ($3.45 per share basic and $0.06 per share diluted), compared to a net loss of $(145,111) for the six months

ended June 30, 2025 ($(0.03) per share, basic and diluted).

per-share amounts for the 2026 periods reflect the assumed conversion of the 2,371,844 outstanding shares of Series B Convertible Preferred

Stock at 100 shares of Common Stock per preferred share, being the most dilutive rate available under the Certificate of Designation.

Because the applicable conversion rate had not been fixed as of June 30, 2026, that rate has been used for the periods presented.

July 13, 2026 the Board fixed the conversion rate at 50 shares of Common Stock per preferred share, as described in Note 16.

AND CAPITAL RESOURCES

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.

Working Capital and Overview

of June 30, 2026, the Company had cash, cash equivalents, and restricted cash of $25,884,495, compared to $17,669,749 as of December

31, 2025, representing an increase of $8,214,746, or approximately 46.5%.

Working capital, defined as total current assets less total

current liabilities, was $33,063,252 as of June 30, 2026, compared to $17,831,410 as of December 31, 2025, representing an increase of

$15,231,842, or approximately 85.4%.

The increase in working capital principally reflects the settlement of $27,265,673 of related party

advances payable during the six months ended June 30, 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.

Flows from Operating Activities

Net cash used in operating activities was $(21,138,011) for the six months ended June 30, 2026, compared to net cash

used in operating activities of $(2,819,517) for the six months ended June 30, 2025.

Net cash used in operating activities for the six

months ended June 30, 2026 principally reflects (i) net income of $14,549,512 for the six months ended June 30, 2026 (compared to a net

loss of $(111,334) for the comparable prior-year period), which included non-cash related party income;

(ii) an increase in related party

receivables of $(36,532,537), presented excluding the non-cash settlement arrangements described in Note 5;

(iii) an increase in client

funds payable of $1,885,820, reflecting the expansion of the Company’s brokerage operations and customer trading activity at Alchemy

International Ltd.;

(iv) a decrease in the fair value of trading positions for the firm, net of financial liabilities at fair value, of

$1,267,725, reflecting the closing-out of certain trading positions in the ordinary course;

(v) an increase in accrued expenses to related

parties of $620,497;

(vi) a net decrease in trade and tax receivables and income tax payable of $275,609;

and (vii) an increase in accounts

payable of $191,628;

partially offset by (viii) an increase in accrued income of $2,017,206 and a decrease in other current liabilities

of $1,301,578.

Flows from Investing Activities

Net cash used in investing activities was $(472,602) for the six months ended June 30, 2026, compared to net cash

used in investing activities of $(202,708) for the six months ended June 30, 2025.

Net cash used in investing activities for the six months

ended June 30, 2026 principally consisted of (i) capitalized software development costs, net, of $464,777 and (ii) purchases of fixed

assets of $8,142, partially offset by (iii) $317 of net investment activity in private entities.

Capital expenditure of $73,704 that was

previously reported within operating activities as “Fixed assets, net” has been reclassified to investing activities, comprising

$65,562 of capitalized software development costs and $8,142 of purchases of fixed assets.

The $2,295,047 common-control adjustment to

additional paid-in capital previously reported within investing activities has been reclassified to financing activities.

The comparable

prior-year period has been conformed to this presentation, reclassifying $74,721 of fixed asset purchases from operating activities and

$1,529,884 of common-control paid-in capital movements from investing to financing activities.

Flows from Financing Activities

Net cash provided by financing activities was $35,308,397 for the six months ended June 30, 2026, compared to net

cash used in financing activities of $(3,619,920) for the six months ended June 30, 2025.

Net cash provided by financing activities for

the six months ended June 30, 2026 principally consisted of (i) $32,831,092 of related party advances, presented excluding the non-cash

settlement arrangements described in Note 5;

(ii) the $2,295,047 common-control adjustment to additional 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, of which $2,151,066 is disclosed as a non-cash item;

and (iii) net draws of $186,510 on the Company’s lines of credit,

partially offset by (iv) net repayments of $4,252 on the Company’s SBA loan.

Change in Cash

The Company’s cash, cash equivalents, and restricted cash increased

by $8,214,746 during the six months ended June 30, 2026, comprising net cash used in operating activities of $(21,138,011), net cash used

in investing activities of $(472,602), net cash provided by financing activities of $35,308,397, the effect of exchange rate changes on

cash of $(217,936), a $(7,432) change in the noncontrolling interest share of subsidiary net assets, and the $(5,257,670) non-cash assignment

of the Company’s liquidity-provider balance previously included within cash and cash equivalents.

Cash, cash equivalents, and restricted

cash were $25,884,495 as of June 30, 2026, compared to $17,669,749 as of December 31, 2025.

Obligations and Capital Adequacy

of June 30, 2026, the Company’s principal long-term contractual obligations consisted of (i) the SBA loan in the non-current principal

amount of $101,426, 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

Kundnani, a Director and majority shareholder of the Company, which obligation matures on September 30, 2026 and

is repayable from the proceeds of the Company’s contemplated listing of its common stock on a national securities exchange;

operating lease liabilities (current and non-current) of $482,055 in the aggregate, principally relating to the Company’s office

facilities (see Note 8);

and (iv) deferred tax liabilities of $191,469 and accrued non-current interest of $39,609.

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

5 unchanged sentences

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.

of June 30, 2026, the Company had cash, cash equivalents, and restricted cash of $25,884,495, working capital of $33,063,252, total stockholders’

equity of $39,310,479, and an accumulated surplus of $17,979,684, compared to cash, cash equivalents, and restricted cash of $17,669,749,

working capital of $17,831,410, total stockholders’ equity of $22,691,288, and an accumulated surplus of $3,401,487 as of December

During the six months ended June 30, 2026, the Company generated revenues of $32,687,028 (compared to $11,396,739 for the six

months ended June 30, 2025), net income of $14,549,512 (of which $14,578,197 was attributable to the stockholders of FDCTech, Inc.

$(28,685) was attributable to noncontrolling interests, compared to a consolidated net loss of $(111,334) for the six months ended June

30, 2025), and net cash used in operating activities of $(21,138,011) (compared to net

cash used in operating activities of $(2,819,517) for the six months ended June 30, 2025).

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/A for

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

We continually evaluate our critical accounting estimates

and judgments, as required by our policies, and update them as necessary based on changing conditions.

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

for the fiscal year ended December 31, 2025, as most recently amended by Amendment No.

4 on Form 10-K/A filed with the SEC on July 1,

We continually evaluate our critical accounting estimates and judgments, as required by our policies, and update them as necessary

based on changing conditions.

Act Accounting Election

are an “ emerging growth company ,” as defined in the JOBS Act.

Under the JOBS Act, emerging growth companies can delay

adopting new or revised accounting standards issued after the enactment of the JOBS Act until those standards apply to private companies.

As an emerging growth company, we have applied for an exemption;

as a result, the Company may delay the adoption of certain accounting

standards until the standards apply to private companies.

to December 31, 2022, the Company qualified as an “emerging growth company” as defined in the Jumpstart Our Business Startups

Act of 2012 (the “JOBS Act”) and, as permitted under the JOBS Act, elected to delay the adoption of new or revised financial

accounting standards until those standards would otherwise apply to private companies.

The Company ceased to qualify as an emerging growth

company effective December 31, 2022.

Accordingly, the extended transition period for complying with new or revised financial accounting

standards is no longer available to the Company, and the Company applies the effective dates applicable to public business entities for

all periods presented in this Report.

Sheet Arrangements and Contractual Obligations

have not engaged in any off-balance sheet arrangements as 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.

We have not engaged in any off-balance sheet arrangements as defined in

Item 303 of the SEC’s Regulation S-K.

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

2 unchanged sentences

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.

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.

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.

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.

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.

Company adopted ASU 2023-09 effective January 1, 2025, on a prospective basis;

the adoption expanded the Company’s annual income

tax disclosures and did not affect its consolidated financial position, results of operations, or cash flows.

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 complete description of accounting pronouncements recently adopted and issued but not yet adopted, see Note 2, Summary of Significant

Accounting Policies — Recent Accounting Pronouncements, to the unaudited condensed consolidated financial statements included in

Part I, Item 1 of this Report.

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/A for the year ended December 31, 2025, filed with the SEC on April 22, 2026.

statements included in our Annual Report on Form 10-K for the year ended December 31, 2025, as most recently amended by Amendment No.

4 on Form 10-K/A filed with the SEC on July 1, 2026.

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis