FDCTECH, INC. 10-K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Annual Report Form 10-K contains forward-looking statements. Our actual results could differ materially from those set forth due to general economic conditions and changes in the assumptions used in making such forward-looking statements. The following discussion and analysis of our financial condition and results of operations should be read together with the audited financial statements and accompanying notes and the other financial information appearing elsewhere in this report. The analysis set forth below is provided pursuant to applicable Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events. The Company is building a diversified global financial services company driven by proprietary Condor trading technologies, complementary regulatory licenses, and a proven executive team. The Company plans to acquire, integrate, transform, and scale legacy financial service companies. The Company believes its proprietary technology and software development capabilities allow legacy financial services companies immediate exposure to forex, stocks, ETFs, commodities, digital assets, social/copy trading, and other high-growth fintech markets. From December 2021 onwards, the Company expects to grow from its acquisition strategy, specializing in buying and integrating small to mid-size legacy financial services companies. The Company intends to build a diversified global software-driven financial services company. The Company plans to acquire, integrate, transform, and scale legacy financial service companies. The Company replaces conventional legacy software infrastructure with its regulatory-grade proprietary Condor trading technologies, intending to improve end-user experience, increase client retention, and realize cost synergies. The 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. FDCTech 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. Key subsidiaries include: ● AD Advisory Services Pty Ltd. (ADS) – An Australian-regulated wealth management firm managing over $530 million in client assets with a network of 28 financial advisors. ● 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. (ATECH) – A Cyprus-based technology, sales, and marketing service provider supporting the Company’s subsidiaries and affiliated companies. FDCTech 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. Currently, we have three primary business segments: (1) Investment and Brokerage, (2) Wealth Management, and (3) Technology and Software Development. 13 Investment and Brokerage (Europe and UK) AML is authorized to deal with its account (market maker) as a Category 3 licensed entity by the MFSA, receive and transmit orders for retail and professional clients, and hold and control clients’ money and assets. AML trading platform services in the English, French, German, Italian, and Arabic-speaking markets, whereby customers can trade in currency, commodity, equity, and digital assets-linked derivatives in real time. AML is authorized countries to do business include Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Liechtenstein, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden. In May 2024, Mitchell M. Eaglstein, CEO, was appointed as the CEO and COO of Alchemy Markets Ltd. (AML) to oversee operations in Malta. APL 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. Investment and Brokerage (Trading Revenues) & Gross Margins*: Fiscal year ending December 31, 2024 (Audited) Fiscal year ended December 31, 2023* (Audited) Revenue, $ 18,803,184 5,016,053 Cost of sales, $ 8,802,990 1,146,029 Gross Profit (loss), $ 10,000,194 6,507,042 Gross Margins 53.18 % 77.15 % * The Company consolidated AML’s revenues from July 1, 2023, to December 31, 2023. The Company has consolidated APL’s revenue from December 1, 2023, to December 31, 2023. Wealth Management Business On December 22, 2021, the Company entered into a Share Exchange Agreement (the “Agreement”) with AD Financial Services Pty Ltd ACN 628 331 117 of Level 38/71 Eagle St, Brisbane, Queensland, Australia, 4000 (“ADFP” or “Target”). According to the Agreement, the Company acquired 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 regulators in Australia. The Australian Securities and Investments Commission (ASIC) administers a licensing regime for financial services providers. ADS holds an Australian Financial Services License (AFSL) and meets various compliance, conduct, and disclosure obligations. AD Advisory Services Pty Ltd. (ADS) is an Australian-regulated wealth management company with 28 advisors and $530+ million in funds under advice. ADS provides licensing solutions for financial advisers & accountants in Australia. ADS offers financial planners different licensing, compliance, and education solutions to meet their practice’s specific needs. Wealth Management Revenue & Gross Margins: Fiscal year ending December 31, 2024 (Audited) Fiscal year ending December 31, 2023 (Audited) Revenue, $ 6,498,404 5,927,424 Cost of sales, $ 5,925,652 5,338,510 Gross Profit (loss), $ 572,752 588,914 Gross Margins 8.81 % 9.94 % 14 Technology & Software Development Business For the nine months ended December 31, 2024, and 2023, the Company had fourteen (14) and seventeen (17) licensing agreements for its Condor Pro Multi-Asset Trading Platform. The Company continuously negotiates additional licensing agreements with several retail online brokers to use the Condor Pro Multi-Asset Trading Platform. Condor Pro Multi-Asset Trading Platform is available in desktop, web, and mobile versions. The Company is developing the Condor Investing & Trading App, a simplified trading platform for traders with varied experiences in trading stocks, ETFs, and other financial markets from their mobile phones. The Company expects to commercialize the Condor Investing & Trading App by the end of the first quarter of the 2025 fiscal year. IT, Sales & Marketing Service Provider (Cyprus) On 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. Technology & Software Development Revenue & Gross Margins: Fiscal year ending December 31, 2024 (Audited) Fiscal year ending December 31, 2023 (Audited) Revenue, $ 1,642,130 1,811,423 Cost of sales, $ 173,708 22,503 Gross Profit (loss), $ 1,468,422 1,788,920 Gross Margins 89.42 % 98.76 % CIM Acquisition Termination On July 31, 2023, the Company sent the notice of termination of the purchase agreement to CIM Securities, as future events may result in a change of ownership in the CMA application. The Company believes that this would cause further delays in the approval process. Our board has mandated the management team to concentrate on expanding and developing our core non-US forex business to maximize shareholder value. Bank Acquisition Termination In April 2024, the Company terminated the letter of intent to acquire a community bank in Iowa. As part of the termination, the Company shall pay the community bank a sum of $100,000 in six equal installments of $15,000 and one final payment of $10,000 from April 2024 to November 2024. Consolidated Financial Summary The Company has prepared consolidated financial statements on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the ordinary business course. For the fiscal year ending December 31, 2024, and 2023, the Company generated $26,943,718 and $12,754,900 in revenues, an increase of over 111.24%. At December 31, 2024, the Company had a cash balance of $24,781,389 and an accumulated deficit of $2,563,620. Financial Condition at December 31, 2024 On December 31, 2024, the accumulated deficit, cash balance, and working capital surplus were $2,563,620, $24,781,389, and $9,417,247, respectively. Even though we believe that our cash balance is sufficient to fund our operations and growth, the Company plans to raise additional capital as disclosed in Subsequent Events. The Company intends to continue its efforts to enhance its revenue from its diversified portfolio of technological solutions, become cash flow positive, and raise funds through private placement offerings and debt financing. As the Company increases its customer base globally, it intends to acquire long-lived assets that will provide a future economic benefit beyond the fiscal year 2024. Financial Condition at December 31, 2023 On December 31, 2023, the accumulated deficit, cash balance, and working capital deficit were $2,643,647, $31,316,461, and $7,460,959, respectively. On November 30, 2023, Kundnani purchased 2,500,000 Series A Preferred stock of FDCTech for $2.5 million. The Company has issued the Series A Preferred stock to Kundnani. On November 30, 2023, Kundnani purchased 50,000,000 Common stock of the Company for $5.5 million. The Company has issued the Common Stock to Kundnani. The Company expects to receive funds by the end of April 2024. 15 RESULTS OF OPERATIONS For the fiscal year ending December 31, 2024, compared to the fiscal year ending December 31, 2023 Revenues The revenues generated for the fiscal year ending December 31, 2024, and 2023 were $26,943,718 and $12,754,900, respectively. The increase in revenue was mainly due to the consolidation of AML’s trading revenue as of June 30, 2023. During the fiscal year ending December 31, 2024, and 2023, the Company incurred a net profit and a net loss of $80,027 and $1,573,176, respectively. The decrease in net profit was mainly due to investment and brokerage business’s net profit from July 1, 2023, to December 31, 2023. The total revenue breakdown for the fiscal year ending December 31, 2024, and 2023 is below: Fiscal year ending December 31, 2024 (Audited) Fiscal year ending December 31, 2023 (Audited) Technology & Software Development $ 1,642,130 $ 1,811,423 Wealth Management 6,498,404 5,927,424 Investment and Brokerage* 18,803,184 5,016,053 Total, $ 26,943,718 12,754,900 Fiscal year ending December 31, 2024 (Audited) Fiscal year ending December 31, 2023 (Audited) Technology & Software Development 6.09 % 14.20 % Wealth Management 24.127 % 46.47 % Investment and Brokerage* 69.79 % 39.33 % Total 100.00 % 100.00 % * Trading Revenue For the fiscal year ending December 31, 2024, and 2023, the Company had fourteen (14) and seventeen (17) active technology and software development customers. General and administrative expenses During the fiscal years ended December 31, 2024, and 2023, the Company incurred General and administrative expenses (“G and A”) of $11,191,357 and $2,943,913, respectively. The increase in G and A costs for the fiscal year ending December 31, 2023, was mainly due to the inclusion of G and A of AML, APL, and ATECH, for the full year for the period ending December 31, 2024, compared to inclusion of such expenses from the transaction date of AML (June 30, 2023), APL (November 30, 2023), and ATECH (March 19, 2024). The G and A expenses were 41.54% and 23.08% of the fiscal revenue for the fiscal year ending December 31, 2024, and 2023. Sales & marketing expenses The Company incurred $1,466,616 and $1,512,790 in sales, marketing, and advertising costs (“sales and marketing”) for the fiscal year ending December 31, 2024, and 2023, respectively. The sales, marketing, and advertising expenses represented 5.44% and 11.86% of the sales for the fiscal year ending December 31, 2024, and 2023, respectively. 16 Depreciation and Amortization expenses The depreciation expenses for furniture and computers for the year ended December 31, 2024, and 2023, were $186,350 and $213,910. Amortization expenses were $0 and $22,503 for the fiscal year ending December 31, 2024, and 2023, respectively, and the Company has included them in the Cost of sales expense. Office Facility and Other Operating Leases The rental expenses were $543,325 and $25,438 for the fiscal year ending December 31, 2024, and 2023. The increase in rental costs for the fiscal year ending December 31, 2024, was mainly due to the inclusion of rental of AML, APL, and ATECH, for the full year for the period ending December 31, 2024, compared to inclusion of such expenses from the transaction date of AML (June 30, 2023), APL (November 30, 2023), and ATECH (March 19, 2024). Irvine Lease, California, USA (Company’s Headquarter) Effective October 29, 2019, to the present, the Company leased office space at 200 Spectrum Center Drive, Suite 300, Irvine, CA 92618. As per the Commitment Term of the lease (“Agreement”), this Agreement shall continue on a month-to-month basis (any term after the Commitment Term, also known as “Renewal Term”). The Commitment Term and all subsequent Renewal Terms shall constitute the “Term.” The Company may terminate this Agreement by delivering to the lessor Form (“Exit Form”) at least one (1) whole calendar month before the month in which the Company intends to terminate this Agreement (“Termination Effective Month”). The Company is entitled to use the office and conference space if needed. The new rent payment or membership fee for the Irvine Office is $95 per month compared to the previous rent payment or membership fee for the New York Office of $890 per month as the General and administrative expenses. 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 leased office space at Level 38/71 Eagle St, 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 around $125 per month and is included as the 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. 17 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 leased a bigger office space in the Limassol District, Cyprus, from an unrelated party for a year. The office’s monthly rent payment is approximately $3,500, which is included in the general and administrative expenses. From July 2023 to the present, the Company leased office space for its CEO. The office’s monthly rent payment is $3,500, which is included in the general and administrative expenses. The down payment for the lease was approximately $6,300. The lease is for one year and is renewable two months before the term ends 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, which is payable in monthly installments of €8,000 (or $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. 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 conference room usage. 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 with 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 at Fifth Floor, 142 Central Street, Clerkenwell, London, EC1V BAR. The lease is with Agop Tanielian and Hourig Mercedes Tanielian as landlords and the Company, through its subsidiary Alchemy Prime Limited, as 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 prior written notice is given. 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. 18 Right-of-Use Assets and Lease Liabilities The Company’s subsidiaries – APL and ATECH have entered into operating lease agreements for its facilities and equipment. The right-of-use asset (ROU) is measured at the present value of the lease payments over the lease term, adjusted for lease incentives, initial direct costs, and any lease payments made at or before the commencement date. As of December 31, 2024, the ROU is $711,928. Lease liabilities are measured at the present value of the remaining lease payments, discounted using the Company’s incremental borrowing rate (10.00%) at the lease commencement date. The Operating Lease Liability was estimated to be $319,656 current and $392,273 noncurrent. The lease expense for the fiscal year ending December 31, 2024, consists of an operating lease expense of $543,325. This increase reflects the inclusion of all leases for the Company and its subsidiaries through December 31, 2024. The Company has included all rental expenses in the General and Administrative costs. The Company determines the lease term as the non-cancelable period of the lease, together with periods covered by an option to extend the lease if it is reasonably certain to be exercised and periods covered by an option to terminate the lease if it is reasonably certain not to be exercised. The discount rate of 10.00% used to measure the lease liabilities was determined based on the Company’s incremental borrowing rate, as the rate implicit in the lease is not readily determinable. LIQUIDITY AND CAPITAL RESOURCES On December 31, 2024, and 2023, we had a cash balance of $24,781,389 and $31,316,461, respectively. At December 31, 2024, and 2023, the working capital surplus was $9,417,247 and $7,460,959, respectively. The increase in the working capital surplus was mainly due to the consolidation of AML and APL, resulting in an increase of current assets over current liabilities as of December 31, 2024. We generate a substantial portion of our operating income outside the United States, and this income 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. The 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. Key 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. Future capital-raising efforts may be necessary to fund acquisitions and market expansion. Management believes that existing cash reserves , coupled with expected revenue growth and potential financing opportunities, will provide adequate liquidity to meet operational and strategic needs. However, external market conditions, regulatory changes, and acquisition-related expenditures could impact future liquidity requirements. We anticipate that our existing domestic cash, short-term investments, and cash flows from operations will be sufficient to fund our domestic operating activities and fulfill our cash commitments for investing and financing activities, such as regular quarterly dividends, debt repayments, and capital expenditures, for at least the next 12 months and for the foreseeable future. 19 Should we require additional capital in the United States beyond what our domestic operations generate—for instance, to fund significant discretionary activities such as business acquisitions or share repurchases—we could choose to repatriate future earnings from foreign jurisdictions or raise capital within the United States through debt or equity issuances. These alternatives may result in higher effective tax rates, increased interest expenses, or dilution of our earnings. We have previously borrowed funds domestically and believe that we can continue to do so at reasonable interest rates. Over 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. The 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. If additional capital is needed, the company may seek to restructure or refinance existing debt, secure financing from financial institutions, or raise funds through private equity or debt issuance. FDCTech remains committed to expanding its operations while exploring strategic funding opportunities to support long-term growth. Initial Seed Funding in 2016 Between February 22, 2016, and April 24, 2017, the Company borrowed $1,000,000 from FRH Group, a founder and principal shareholder. Effective June 1, 2017, we raised $98,000 through our common stock’s private placement to our officers, directors, friends, relatives, and business associates. Between February 22, 2016, and April 24, 2017, the Company borrowed $1,000,000 from FRH Group, a founder and principal shareholder (“FRH”). The Company executed Convertible Promissory Notes, due between February 28, 2018, and April 24, 2019. The Notes were initially convertible into common stock at $0.10 per share but may be discounted under certain circumstances. In no event will the conversion price be less than $0.05 per share, with a maximum of 20,000,000 shares. Going Public in 2019 From January 29, 2019, to February 15, 2019, the Company issued 33,000 registered shares under the Securities Act of 1933 for a cash amount of $4,950. The Company closed its offering effective February 26, 2019. PPP and SBA Funding in 2020 On May 01, 2020, the Company received proceeds of $50,632 from the Promissory Note (“PPP Note”) under the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). On May 22, 2020, the Company received proceeds of one hundred and forty-four thousand nine hundred and 00/100 Dollars ($144,900). On July 15, 2020, the Company engaged Kingswood Capital Markets, a Benchmark Investments division, Inc., as its exclusive general financial advisor for strategic corporate planning and investment banking services. On August 25, 2020, the Company and Broker-Dealer terminated all obligations other than maintaining confidentiality with no fees to the Broker-Dealer. The Broker-Dealer agreed to return the 2,745,053 shares of the Company’s common stock. On September 02, 2020, the Company engaged Garden State Securities Inc. (GSS) as its exclusive advisor for the private placement of debt or equity securities to fulfill the Company’s business plan and an offering of debt securities to assist in the Company’s acquisition strategy. On October 05, 2021, the Company and GSS terminated all obligations other than maintaining confidentiality, with no fees to the GSS. The Broker-Dealer agreed to return the 1,750,000 shares of the Company’s common stock. 20 Settlement of FRH Debt and Equity Line of Credit (Investment Agreement) in 2021 On February 22, 2021, the Company entered into an Assignment of Debt Agreement (the “Agreement”) with FRH and FRH Group Corporation. The Company eliminated all four FRH Group convertible notes, including interest, of $1,256,908 in return for the issuance of 12,569,080 of unregistered common stock of the Company (the “Shares”) to FRH. Following the Agreement, FRH assigned the Shares to FRH Group Corporation, also owned by Mr. Hong. On September 27, 2021, the Company engaged EF Hutton, a division of Benchmark Investments, LLC (“EF Hutton”). EF Hutton will act as lead underwriter, deal manager, and investment banker for the proposed firm commitment public offering and uplisting (“Offering”) by the Company in connection with the offering of the Company’s equity, debt, or equity derivative instruments (the “Securities”). The Company engagement expired as of December 31, 2022. On October 04, 2021, the Company filed a prospectus that relates to the resale of up to 22,670,000 shares of our Common Stock issued or issuable to selling shareholders for up to $2,200,000, including (i) up to 2,000,000 shares issued to AD Securities America, LLC, (ii) up to 20,000,000 issuable to White Lion Capital, LLC (“White Lion”), according to a “Purchase Notice Right” under an Investment Agreement and (iii) 670,000 shares issued to White Lion as a commitment fee associated with the Investment Agreement. From October 2021 to February 2022, the Company executed five “Purchase Notice Rights” under an Investment Agreement with White Lion and received a net of $38,824 after deducting financing costs associated with the Investment Agreement. Investment Agreement, Promissory Note, Related Party Investments in 2022 From January 2021 to February 2022, the Company executed five “Purchase Notice Rights” under an Investment Agreement with White Lion and received a net of $33,596 after deducting financing costs associated with the Investment Agreement. From October 2021 to February 2022, the Company received $72,420 from the Investment Agreement. On January 27, 2022, the Company signed a promissory note (AJB Note’) with AJB Capital Investments, LLC (‘AJB Capital’), a Delaware limited liability company, for the principal amount of $550,000 with a maturity date of July 27, 2022, and a coupon of 10%. The parties extended the AJB Note maturity date by another six months till January 23, 2023. As part of the AJB Note, the Company entered into a securities purchase agreement, where AJB Capital will receive equity equal to US $155,000 of the Company’s common stock. The Company issued 2,214,286 common stock valued at $71,521 upon issuance of the Note (the “Shares”) and 1,000,000 3-year cash warrants (‘Warrants’) priced at $0.30. The Warrants and the Shares, collectively known as the ‘Incentive Fee,’ are issued upon execution of the agreement. In April 2022, the Company engaged CIM Securities, LLC as its private placement agent to raise capital. The Company did not raise any funds. On September 30, 2022, the Company issued 30,000,000 restricted common shares for cash valued at $300,000 to Kundnani, considered a related party. Related Party Investments and Acquisitions in 2023 On January 25, 2023, the Company issued 5,309,179 restricted common shares to AJB to compensate for consideration shares related to the AJB Note valued at $60,525. On January 25, 2023, the Company issued 115,000,000 restricted common shares for cash valued at $550,000 to Kundnani, considered a related party. On March 28, 2023, the Company issued 2,000,000 restricted common shares for cash valued at $20,000. At July 31, 2023, the Company sent the notice of termination of the purchase agreement to CIM Securities as future events may result in a change of ownership in the CMA application. The Company terminated the escrow agreement and released $180,000 to increase cash on hand. On November 30, 2023, Kundnani, considered a related party, purchased 2,500,000 Series A Preferred stock of the Company for $2.5 million. The Company has issued the Series A Preferred stock to Kundnani. On November 30, 2023, Kundnani purchased 50,000,000 Common stock of the Company for $5.5 million. The Company has issued the common stock to Kundnani. The Company expects to receive funds by the end of April 2024. GOING CONCERN CONSIDERATION We have generated revenues of $26,943,718 for the fiscal year ending on December 31, 2023. As of December 31, 2024, and 2023, the Company had an accumulated deficit of $2,563,620 and $2,643,647. Our independent auditors included an explanatory paragraph in their report on the audited financial statements for the fiscal year ending December 31, 2024, and 2023 regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that led to this disclosure by our independent auditors. Our financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classifications of liabilities that may result in the Company being unable to continue as a going concern. 21 Critical Accounting Policies and Significant Judgments and Estimates We have based our management’s discussion and analysis of our financial condition and operations results on our financial statements, which we have prepared following the U.S. Generally Accepted Accounting Principles (GAAP). In preparing our financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Our actual results could differ from these estimates, and such differences could be material. We have described significant accounting policies in Note 2 of our annual financial statements included in our 10-K/A for the fiscal year ending December 31, 2023, filed with the SEC on October 15, 2024. We continuously evaluate our critical accounting estimates and judgments required by our policies and update them as appropriate based on changing conditions. JOBS Act Accounting Election We are an “ emerging growth company ,” as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards after enacting the JOBS Act until those standards apply to private companies. As an emerging growth company, we may delay adopting certain accounting standards until they apply to private companies. Off-Balance Sheet Arrangements and Contractual Obligations We have not engaged in any off-balance sheet arrangements defined in Item 303(c) of the SEC’s Regulation S-B. We had no relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established to facilitate off-balance sheet arrangements or other contractually narrow or limited purposes. Recent Accounting Pronouncements The ASU amendments are effective for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. We have adopted ASC 606 - Revenue Recognition from January 1, 2019, and Amended ASU 2016-02, Leases (Topic 840) from January 1, 2020. The ASU is currently not expected to have a material impact on our consolidated financial statements. We believe the accounting policies described in Note 2 are critical to the judgments and estimates used to prepare our financial statements. As a result, we have described significant accounting policies in more detail in Note 2 of our annual financial statements included in our 10-K for the fiscal year ending December 31, 2023, filed with the SEC on May 5, 2023. 22 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS. Not Applicable. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA All financial statements required by this Item are presented beginning on Page F-20 and are incorporated herein by this reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.