NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Ukraine-Russia Conflict

The geopolitical situation in Eastern Europe intensified on February 24, 2022, with Russia’s invasion of Ukraine. The war between the two countries continues to evolve as military activity continues. The United States and certain European countries have imposed additional sanctions on Russia and specific individuals. By the end of August 2022, the Company closed its technical support and development office in Russia. We relocated our personnel to Turkey, currently considered a neutral zone. No individual associated with the Company is banned or under the Special Designated Nationals and Blocked Persons list. If the military activities worsen and expand in Europe, we may relocate our office from Turkey to other neutral zones in Asia. If we cannot relocate our technical and development operations to a safer zone, it may impact our software development capabilities and negatively impact the Company’s business plans.

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

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements include the accounts of FDCTech, Inc. and its wholly-owned subsidiaries. We have eliminated all intercompany balances and transactions. The Company has prepared the consolidated financial statements consistent with the accounting policies adopted by the Company in its financial statements. The Company has measured and presented its consolidated financial statements in US Dollars, the currency of the primary economic environment in which it operates (also known as its functional currency).

Financial Statement Preparation and Use of Estimates

The Company prepared consolidated financial statements according to accounting principles generally accepted in the United States of America (“GAAP”). The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions. This could impact the reported amounts of assets and liabilities, as well as the related disclosures, at the date of the consolidated financial statements, and the reported amounts of revenue and expenses for the periods presented. Estimates include revenue recognition, the allowance for doubtful accounts, website and internal-use software development costs, recoverability of intangible assets with finite lives, and other long-lived assets. Actual results could materially differ from these estimates. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties, including those arising from the current economic environment related to the coronavirus (“COVID-19”).

Defined Terms

In these consolidated financial statements and the related notes, the terms “Restricted cash — client funds (segregated),” “client funds,” and “client money” are used interchangeably to refer to amounts held by the Company’s regulated brokerage subsidiaries on behalf of clients in segregated accounts pursuant to applicable regulatory requirements, presented on the consolidated balance sheets as a separately captioned restricted cash line item with an equal and offsetting client funds payable liability.

Restatement of Previously Issued Financial Statements

Following the engagement of LAO Professionals (“LAO”) as the Company’s independent registered public accounting firm on April 3, 2025, and in connection with LAO’s reaudit of the Company’s consolidated financial statements for the year ended December 31, 2024, management and the Board of Directors identified errors in the Company’s previously issued condensed consolidated financial statements. On June 3, 2026, the Board of Directors, after consultation with management and LAO, concluded that the Company’s previously issued unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2025 (as included in the Original Filing) should no longer be relied upon. The Company is restating its affected financial statements in accordance with Accounting Standards Codification (“ASC”) Topic 250, “Accounting Changes and Error Corrections.” Concurrently with this Amendment, the Company has filed Amendment No. 2 to its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and Amendment No. 2 to its Annual Report on Form 10-K for the fiscal year ended December 31, 2025, restating its annual financial statements for the fiscal years ended December 31, 2024 and 2025, and the comparative periods. The restatement reflects the following adjustments: (a) Subscription Receivable Reclassification to Contra-Equity (ASC 505-10-45-2)—a subscription receivable totaling 8,200,000 originally recognized on November 30, 2023 has been reclassified from current assets to a contra-equity account; (b) Unrecorded Stock Issuance to Global Career Networks Inc. (ASC 250-10-45-23)—500,000 shares of common stock issued October 5, 2021 at 0.1095 per share were not recorded by the Company’s transfer agent and have been recognized retrospectively to the original transaction date; (c) Restricted Cash for Client Funds Segregated (ASC 230-10-50-8)—cash held by the Company’s regulated subsidiaries on behalf of clients has been reclassified from “Cash” to a separate line item, “Restricted cash — client funds (segregated),” with the corresponding liability re-titled “Client funds payable”; (d) Noncontrolling Interest Walk Correction (ASC 810-10)—noncontrolling interest balances have been corrected to reflect only the 49% noncontrolling share of AD Advisory Services Pty Ltd net income and other comprehensive income, with no common-control reallocation; (e) Accumulated Other Comprehensive Income Allocation Correction (ASC 220-10)—FDC’s accumulated other comprehensive income has been corrected to exclude the noncontrolling interest’s allocable share of foreign currency translation adjustment; (f) Reclassification of Balances Held Within AML Cash Accounts (ASC 940)—3,500,000 of client funds of Alchemy Prime Limited (“APL”) held within Alchemy Markets Ltd. (“AML”) designated liquidity provider account, and 3,574,201 (€3,453,334) of external third-party assets held by AML on behalf of a non-Group counterparty, aggregating 7,074,201, have been reclassified from “Cash” to “Restricted cash — client funds (segregated)” with corresponding recognition in “Client funds payable,” consistent with Adjustments B and C described in the Company’s Annual Report on Form 10-K/A (Amendment No. 2) for the year ended December 31, 2024; and (g) Segment Reclassification of ATECH Cost of Sales—cost of sales of Alchemytech Ltd. (“ATECH”), a Cyprus-based subsidiary providing information technology, sales, and marketing services to the Company’s affiliated brokerage operations, has been reclassified from the Technology & software segment to the Brokerage segment to reflect the segment to which those services support. Total cost of sales, gross profit, and net income (loss) are unaffected by this reclassification.

Restatement Adjustments by Category

Background

Subsequent to the issuance of its unaudited interim consolidated financial statements for the three and nine months ended September 30, 2025 (originally filed on Form 10-Q on November 13, 2025, Accession No. 0001493152-25-022191) and for the three and nine months ended September 30, 2024 (originally filed on Form 10-Q on November 19, 2024, Accession No. 0001493152-24-052613), management of FDCTech, Inc. (the “Company”) identified errors in the presentation and classification of certain balance-sheet, statement-of-operations, and statement-of-cash-flows captions. The Company has restated those interim financial statements to correct these errors. The restated amounts have no effect on the Company’s compliance with debt covenants or regulatory capital requirements.

Description of restatement adjustments

(a) Segregation of restricted cash (client funds). The Company previously reported all cash, including cash held on behalf of brokerage customers, in a single “Cash” caption and the related liability as “Customer funds.” The restated balance sheets present client funds segregated from operating cash as “Restricted cash (client funds, segregated)” with a corresponding liability captioned “Client funds payable.” The statements of cash flows have been conformed to present the change in client funds (segregated) within operating activities and to present the beginning- and ending-of-period reconciliation on a combined cash, cash equivalents, and restricted cash basis.

(b) Subscription receivable reclassification. The Company previously reported 8,200,000 of subscription receivable as a current asset. Management determined that the subscription receivable, which represents amounts due from investors in respect of equity instruments, should be presented as a contra-equity reduction of stockholders’ equity in accordance with SAB Topic 4.E and ASC 505-10-45-2. The reclassification reduces total current assets and total stockholders’ equity in equal amounts and has no effect on net income (loss) or cash flows from operating, investing, or financing activities, except for reclassification of the original recognition through changes in paid-in capital in the prior-year cash-flow statement.

(c) Disaggregation of additional paid-in capital. Additional paid-in capital was previously reported on a combined basis covering common stock, Series A Preferred and Series B Preferred. The restated balance sheets present “Additional paid-in capital” (attributable to common and Series A Preferred) and “Additional paid-in capital, Series B Preferred stock” as separate captions to provide users with the components of paid-in capital by class of equity security.

(d) Reclassification within receivables and operating leases. Certain amounts previously reported within “Related party receivable” and the right-of-use asset / operating lease liability have been reclassified to conform to the restated presentation, including (i) reduction of Related party receivable for amounts determined to relate to other parties or other balance-sheet captions and (ii) re-measurement of the right-of-use asset and current/non-current operating lease liability to correct an error in the lease-term schedule.

(e) Reclassification of operating expenses and other income (expense). General and administrative expense and sales and marketing expense for the three and nine months ended September 30, 2025 and 2024 have been re-presented to correct certain misclassifications between G&A, S&M, cost of sales (brokerage), and other income (expense). In addition, the three months ended September 30, 2025 reflect a 31,000 reduction in technology & software revenue to correct a cut-off error.

(f) Effect on accumulated deficit and AOCI. The cumulative net effect of the foregoing adjustments on accumulated deficit at September 30, 2025 was a favorable adjustment of 355,277 (from (2,241,003) as previously reported to ($1,885,726) as restated). The cumulative effect on accumulated other comprehensive income (loss) at September 30, 2025 was an unfavorable adjustment of (19,511) (from 43,314 as previously reported to 23,803 as restated). The corresponding adjustments to accumulated deficit at September 30, 2024 reduced accumulated deficit by 165,321 (from (3,488,102) to (3,322,781) — favorable).

 SCHEDULE OF RESTATEMENT ADJUSTMENTS BY CATEGORY 

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, bank deposits, and other short-term, highly liquid investments with original maturities of three months or less. The Company maintains its cash balances at multiple financial institutions, both domestic and foreign. For US financial institutions, the balances do not exceed Federal Deposit Insurance Corporation (FDIC) limits. As of September 30, 2025, and December 31, 2024, the majority of the cash balance was held with non-FDIC financial institutions in Malta, the United Kingdom, Cyprus, and Australia.

Restricted Cash — Client Funds Segregated

The Company’s regulated brokerage subsidiaries — Alchemy Markets Limited (Malta, MFSA-licensed), Alchemy Prime Limited (UK, FCA-licensed), and AD Advisory Services Pty Ltd (Australia, ASIC-licensed) — hold cash on behalf of clients in segregated bank accounts in accordance with the client-money rules of their respective regulators. These segregated client funds are not available for general corporate use and are matched by a corresponding liability presented as “Client funds payable” on the consolidated balance sheet. In accordance with Accounting Standards Codification (“ASC”) 230-10-50-8 and SEC Staff Accounting Bulletin Topic 11.M, these balances are classified as restricted cash and presented as a separate line item on the consolidated balance sheet under the caption “Restricted cash — client funds (segregated).” The Company adopted this presentation in connection with the restatement described in this Note and applied the change retrospectively to all periods presented.

The following table reconciles the components of cash, cash equivalents, and restricted cash reported on the consolidated balance sheet to the total amounts shown in the consolidated statement of cash flows:

 SCHEDULE OF CASH EQUIVALENTS AND RESTRICTED CASH

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounts Receivable

Accounts Receivable primarily represent the amount from four (4) technology customers. In some cases, customer receivables are due immediately upon demand; however, in most cases, the Company offers net 30 terms, where payment is due in full 30 days after the invoice date. The Company has based the allowance for doubtful accounts on its assessment of the collectability of customer accounts. The Company regularly reviews the allowance by considering historical experience, credit quality, the age of accounts receivable balances, and economic conditions that may affect a customer’s ability to pay, and the expected default frequency. Trade receivables are written off when they are considered uncollectible.

At September 30, 2025, and December 31, 2024, the Management determined that the allowance for doubtful accounts was $22,382 and $22,382, respectively. The fiscal year’s bad debt expense ended September 30, 2025, and December 31, 2024, was 0 and 0, respectively.

Sales, Marketing, and Advertising

The Company recognizes sales, marketing, and advertising expenses when incurred.

The Company incurred $887,520 and $1,211,724 in sales, marketing, and advertising costs (“sales and marketing”) for the nine months ended September 30, 2025 and 2024, respectively. The sales and marketing costs primarily included travel for trade shows, customer meetings, online marketing on industry websites, press releases, and public relations activities. The decrease in sales and marketing expenses is mainly due to higher promotional marketing costs for the three months ended September 30, 2024.

The sales, marketing, and advertising expenses represented 5.14% and 6.67% of sales for the nine months ended September 30, 2025, and 2024, respectively.

Revenue Recognition

On January 1, 2019, the Company adopted ASU 2014-09 Revenue from Contracts with Customers. The majority of the Company’s revenues come from two contracts – IT support and maintenance (‘IT Agreement’) and software development (‘Second Amendment’) that fall within the scope of ASC 606.

The Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services as per the contract with the customer. As a result, the Company accounts for revenue contracts with customers by applying the requirements of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (Topic 606), which includes the following steps:

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company adopted ASC 606 using the modified retrospective method, applying it to all contracts not completed as of January 1, 2019. The Company presents results for reporting periods beginning after January 1, 2019, under ASC 606, while prior period amounts are reported following legacy GAAP. In addition to the above guidelines, the Company also considers implementing guidance on warranties, customer options, licensing, and other topics. The Company considers revenue collectability, methods for measuring progress toward complete satisfaction of a performance obligation, warranties, customer options for additional goods or services, non-refundable upfront fees, licensing, customer acceptance, and other relevant categories.

The Company accounts for a contract when the Company and the customer (‘parties’) have approved it and are committed to performing their respective obligations. Each party can identify its rights, obligations, and payment terms; the contract has commercial substance. The Company will collect all of the considerations. Revenue is recognized when performance obligations are satisfied by transferring control of the promised service to a customer. The Company fixes the transaction price for goods and services at contract inception. The Company’s standard payment terms are net 30 days and, in some cases, due upon receipt of the invoice.

The Company considers changes in scope, price, or both to be contract modifications. The parties describe contract modifications as changes, variations, or amendments. A contract modification exists when the parties approve a modification that either creates new or changes existing enforceable rights and obligations. The Company assumes a contract modification by oral agreement or by implication from the customer’s customary business practice, provided the modification is agreed in writing. If the parties to the contract have not approved a contract modification, the Company continues to apply the existing contract’s guidance until the contract modification is approved. The Company recognizes contract modifications in various forms— partial termination, an extension of the contract term with a corresponding price increase, adding new goods or services to the contract, with or without a corresponding price change, and reducing the contract price without a change in the goods/services promised.

At contract inception, the Company assesses the solutions, services, or bundles of solutions and services obligated in the contract with a customer to identify each performance obligation within the contract, and then evaluates whether the performance obligations are capable of being distinct within the context of the agreement. Solutions and services that are not capable of being distinct and distinct within the contract context are combined and treated as a single performance obligation for the purposes of allocating and recognizing revenue. For multi-element transactions, the Company allocates the transaction price to each performance obligation on a relative stand-alone selling price basis. The Company determines the stand-alone selling price for each item at the transaction’s inception, taking into account these multiple elements.

Since January 21, 2016 (‘Inception’), the Company has derived its revenues mainly from consulting services, technology solutions, and customized software development. The Company recognizes revenue when it has satisfied a performance obligation by transferring control of a product to a customer or by delivering a service to a customer. We measure revenue based on the consideration outlined in an arrangement or contract with a customer.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company’s standard performance obligations include the following:

The Company assumes that the goods or services promised in the existing contract will be transferred to the customer to determine the transaction price. The Company believes that the contract will not be canceled, renewed, or modified; therefore, the transaction price includes only those amounts to which the Company has rights under the present contract. For example, suppose the Company enters a contract with a customer with an original term of one year and expects the customer to renew it for a second year. In that case, the Company will determine the transaction price based on the initial one-year period. When choosing the transaction price, the company first identifies the fixed consideration, including non-refundable upfront payment amounts.

To allocate the transaction price, the Company gives the amount that best represents the consideration that the entity expects to receive for transferring each promised good or service to the customer. The Company allocates the transaction price to each performance obligation identified in the contract on a relatively standalone selling price basis to meet the allocation objective. In determining the standalone selling price, the Company uses the best evidence of the price it charges similar customers in similar circumstances. The Company sometimes uses the adjusted market assessment approach to determine the standalone selling price. It evaluates the market in which it sells the goods or services and estimates the price that customers in that market would pay for those goods or services when sold separately.

The Company recognizes revenue when, or as, it transfers the promised goods or services to the contract. The Company considers the “transfers” of the promised goods or services to have occurred when the customer obtains control of the goods or services. The Company believes a customer “obtains control” of an asset when it can directly use and substantially benefit from all remaining benefits of the asset. The Company recognizes deferred revenue related to services it will deliver within one year as a current liability. The Company presents deferred revenue for services to be provided more than one year in the future as a non-current liability.

According to the contract’s terms and conditions, the Company invoices the customer at the beginning of the month for the month’s services. The invoice amount is due upon receipt. The Company recognizes the revenue at the end of each month, equal to the invoice amount.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Wealth Management

AD Advisory Services Pty (ADS), the Company’s wealth management revenue, primarily consists of advisory revenue, commission revenue from insurance products, fees for preparing the statement of advice, rebalancing portfolios, and other financial planning activities. ADS is authorized and regulated by the Australian Securities & Investments Commission (ASIC) to conduct licensing activities in Australia.

ASC 606 establishes a five-step model for revenue recognition to enhance comparability and transparency across entities, industries, and capital markets. The Company only recognizes revenue that reflects the transfer of promised goods or services to customers in exchange for the consideration to which the entity expects to be entitled.

For ADS, a contract is an agreement between ADS and a client that creates enforceable rights and obligations, encompassing advisory services, insurance product commissions, and other financial planning activities. Contracts may be written, oral, or implied by customary business practices and are identified when both parties approve the agreement; each party can identify rights regarding the goods or services to be transferred, establish payment terms, and confirm that the contract has commercial substance and that payment collection is probable.

A performance obligation is a promise in a contract to transfer a distinct good or service to the Customer. For ADS, performance obligations may include:

We evaluate these services to determine if they are distinct, considering whether the Customer can benefit from the service on its own or with other readily available resources, and if the promise to transfer the service is separately identifiable from other promises in the contract.

The transaction price is the amount of consideration ADS expects to receive in exchange for transferring the promised goods or services to the Customer. These services include fixed fees, commissions from insurance products, and variable consideration for performance-based fees. ADS estimates the amount of variable consideration to which it will be entitled in a manner that reflects the likelihood and magnitude of a revenue reversal.

If a contract includes more than one performance obligation, ADS allocates the transaction price to each performance obligation based on its standalone selling price. When standalone selling prices are not directly observable, ADS estimates them using methods such as cost-plus margin, market assessment, or a residual approach, while considering the Customer’s perceived value of each service.

ADS recognizes revenue when (or as) a performance obligation is satisfied, i.e., when the control of the promised good or service is transferred to the Customer. For ongoing services, revenue is recognized over time, reflecting the continuous transfer of services. For services performed at a specific point in time, revenue is recognized upon completion. The pattern of revenue recognition is determined based on when the Customer obtains control of the promised good or service, which, for advisory services, is typically throughout the contract, and for transaction-based services (like insurance commissions or fees for specific planning activities), is at the point in time when the transaction is executed, or the service is rendered. If we receive payments before services, we defer and recognize them as revenue when we are satisfied with our performance obligation. Advisory revenue includes fees charged to clients in advisory accounts for which we are the licensed investment advisor. We bill advisory fees weekly.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Investment and Margin Brokerage Business

Alchemy Markets Ltd (Alchemy Malta) and Alchemy Prime Ltd (Alchemy UK) are providers of trading services and solutions specializing in over-the-counter (“OTC”) and exchange-traded markets in Europe. Malta Financial Services Authority (MFSA) regulates Alchemy Malta with authorized countries, including Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Liechtenstein, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden. The Financial Conduct Authority (FCA) regulates Alchemy UK in authorized countries, including England, Scotland, Wales, and Northern Ireland.

The Company operates its brokerage business in two segments: retail and institutional (“clients” or “customers”). Through its retail and institutional segment, the Company provides its customers (individuals) around the world with access to a diverse range of global financial markets, including spot forex, precious metals, spread bets, and contracts for difference (“CFDs”) on currencies, commodities, indices, individual equities, cryptocurrencies, bonds, and interest rate products, as well as OTC options. The FCA defines a retail customer as a client who is not a professional or an eligible counterparty. A professional client is an entity that must be authorized or regulated to operate in the financial markets. According to the MFSA, a retail client is a client who is not a professional client or an eligible counterparty. A professional client possesses the knowledge, experience, and expertise to assess risks and make informed investment decisions.

We recognize Brokerage (Trading) revenue under the principal model, following the guidance in ASC 606, Revenues from Contracts with Customers. The Company primarily generates revenue through market-making and trading execution services for its clients, known as Brokerage (Trading) Revenues. The Brokerage (Trading) revenue is the Company’s largest source of revenue. Brokerage (Trading) revenue comprises retail OTC and advisory business revenue. OTC trading includes forex trading (“forex”), precious metals trading, CFDs, and spread betting (in markets that do not prohibit such transactions), as well as other financial products.

We realize gains or losses when we liquidate customer transactions. We revalue unrealized gains or losses on trading positions at prevailing market rates at the date of the balance sheet. We include them in Receivables from brokers, Payables to customers, and Payables to brokers on the Consolidated Balance Sheets. We record changes in net unrealized gains or losses in Brokerage (Trading) revenue on the Consolidated Statements of Operations and Comprehensive (Loss)/Income. We record Brokerage (Trading) revenue on a trade date basis.

We also generate business through an agency model by earning commissions and spreads for executing customer trades. We book these revenues on a trade-date basis. The Company acts as an agent for clearing trades but is the principal for fees paid to introducing brokers. The Company does not assume any market-making risk related to customer trades in this business.

Net interest revenue consists primarily of revenue generated by the Company’s cash and customer cash held at banks, as well as funds on deposit with the Company’s liquidity providers as collateral, less interest paid to the Company’s customers.

We record interest revenue and interest expense when earned and incurred, respectively.

Concentrations of Credit Risk

Cash

Cash and cash equivalents include cash on hand, bank deposits, and other short-term, highly liquid investments with a maturity of three months or less. The Company maintains its cash balances at multiple financial institutions, both domestic and foreign. For US financial institutions, the balances do not exceed Federal Deposit Insurance Corporation (FDIC) limits as of September 30, 2025. However, as of December 31, 2024, the majority of the cash balance was held with non-FDIC financial institutions in Malta, the UK, and other countries. On September 30, 2025, and December 31, 2024, the Company had $17,614,722 and $25,376,957 in total cash, cash equivalents, and restricted cash (client funds segregated) held at the financial institution.

Revenues

For the nine months ended September 30, 2025, and 2024, the Company generated $17,269,111 and $18,178,864 in revenues, representing a decrease of over 5.00% from the previous period. It comprises three main business segments: Investment and Brokerage, Wealth Management, and Technology and Software Development.

Accounts Receivable

Accounts Receivable primarily represent the amount from four (4) technology customers. In some cases, customer receivables are due immediately upon demand; however, in most cases, the Company offers net 30 terms, where payment is due in full 30 days after the invoice date. The Company has based the allowance for doubtful accounts on its assessment of the collectability of customer accounts. The Company regularly reviews the allowance by considering historical experience, credit quality, the age of accounts receivable balances, economic conditions that may affect a customer’s ability to pay, and expected default rates. Trade receivables are written off when they are considered uncollectible.

As of September 30, 2025, and December 31, 2024, management determined that the allowance for doubtful accounts was $22,382 and $22,382, respectively. The fiscal year’s bad debt expense ended September 30, 2025, and December 31, 2024, was 0 and 0, respectively.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Research and Development (R and D) Cost

The Company acknowledges that future benefits from research and development (R and D) are uncertain; therefore, we cannot capitalize on R and D expenditures. The GAAP accounting standards require us to expense all research and development expenditures as incurred. For the Three Months ended September 30, 2025, and 2024, the Company incurred R and D costs of 0 and 0. The R and D costs in the previous period were based on an evaluation of the technological feasibility costs of the Condor Investing and Trading App.

Legal Proceedings

The Company discloses a loss contingency if there is at least a reasonable possibility that a material loss has been incurred. The Company records its best estimate of loss related to pending legal proceedings when the loss is probable, and the amount can be reasonably estimated. The Company can reasonably estimate a range of losses with no best estimate in the range; the Company records the minimum estimated liability. As additional information becomes available, the Company assesses the potential liability related to pending legal proceedings, revises its estimates, and updates its disclosures accordingly. The Company’s legal costs associated with defending itself are recorded as expenses when incurred.

The Company and its subsidiaries are involved in the following legal proceedings:

Asher Alkoby, et al. v. FDCTech

This action is pending in the London Circuit Commercial Court under Claim Number LM-2024-000330 as of December 9, 2024. The claimants are Asher Alkoby and other former shareholders of Alchemy Markets Ltd. (“AML”), a Malta-incorporated broker that FDCTech purchased in June 2023. Following completion of the acquisition, the Company discovered that in 2019, the target company had anti-money laundering deficiencies and was fined by the Financial Intelligence Analysis Unit.

An external audit also revealed that the previous shareholders had taken loans from the company that were never repaid, resulting in the net capital of the company being lower than disclosed during negotiations. Based on these findings, FDCTech withheld the final payment to the sellers.

The claimants are seeking approximately 1.02 million in amounts they allege are owing under the Share Sale Agreement, which they are seeking to rectify to make it legally enforceable. The Company has counterclaimed for a declaration that the Share Sale Agreement is ineffective and unenforceable and seeks repayment of 915,000 paid to the sellers. On October 17, 2025, the Court granted the claimants permission to amend their claim to include a third claimant. The Company has prepared an Amended Defense and Counterclaim through Counsel, which will be served shortly. A Costs and Case Management Conference has been scheduled for November 17, 2025, at which directions will be given to the trial.

FDCTech, Inc. v. Intelligenceline.com, Fintelegram.com, et al.

This action is pending in the Superior Court of California, County of Orange. FDCTech alleges that the defendants, through their websites Intelligenceline.com, Fintelegram.com, and Criticalintel.com, published false and defamatory statements accusing the Company of fraud, illegal conduct, and regulatory violations. The Company claims these statements have caused significant reputational and financial harm, including lost business opportunities. FDCTech further alleges that the defendants engaged in an extortion scheme by demanding payment for the removal of defamatory content.

The complaint asserts claims for defamation per se, defamation per quod, trade libel, and false light, seeking damages and injunctive relief. The complaint was filed in 2025 but had not yet been served as of September 30, 2025. A hearing is scheduled for December 15, 2025, on the Company’s motion.

Alchemy Markets Ltd. v. Il-Korp għall-Analizi ta’ Informazzjoni Finanzjarja (Ref: 104/2023)

This appeal is pending before the Court of Appeal (Inferior Jurisdiction) in Malta. On September 23, 2023, the Financial Intelligence Analysis Unit (FIAU) imposed an administrative penalty of €419,997 and a follow-up directive on Alchemy Markets Ltd. (formerly NSFX Limited), a subsidiary of the Company, based on a compliance examination conducted between November 25, 2019, and December 5, 2019. The examination occurred approximately four years prior to the decision and under a different ownership and control of the subsidiary.

The Company filed this appeal on October 19, 2023, challenging the decision-making process that led to the imposition of the penalty as well as the law on which it was based, asserting that the penalty is arbitrary and excessive, and claiming that certain aspects of the decision are unfounded both by law and in fact. The Company seeks to overturn the administrative penalty and the follow-up directive imposed by FIAU. The case is in the evidentiary production stage pertaining to the Company as appellant. On October 24, 2025, a hearing was held for the Company to continue presenting evidence. The Court is expected to schedule an additional hearing for the FIAU to cross-examine the Company’s witnesses, following which the matter will be adjourned for final legal submissions.

Alchemy Markets Ltd. v. L-Avukat tal-Istat u Il-Korp għall-Analizi ta’ Informazzjoni Finanzjarja (Ref: 159/2024)

This constitutional challenge is pending before the First Hall Civil Court (Constitutional Jurisdiction) in Malta and relates to the same September 23, 2023, FIAU decision described above. The Company filed this application on April 2, 2024, challenging: (i) the composition of the FIAU and its enabling law; (ii) the decision-making processes which allegedly breach the Company’s fundamental human right to a fair hearing; and (iii) that given the penal nature of the penalty, in breach of the Constitution of Malta, the Company was not adjudged by an independent court. The Company requests the Constitutional Court to set aside the FIAU decision in its entirety.

A first procedural hearing took place on May 7, 2024, and the Company has brought its evidence in support of the claim. The First Hall Civil Court (Constitutional Jurisdiction) has, in various instances, pronounced that administrative penalties being imposed by the FIAU are more akin to a penal sanction and that, therefore, subject persons should be afforded the full rights afforded to an accused under criminal law and has consistently quashed FIAU decisions on this basis. While these judgments are, in most part, subject to further appeal before the Constitutional Court of Appeal and have, in two instances, been overturned by the Constitutional Court of Appeal, the Company considers that the principles underpinning such previous judgments are applicable to the Company. The case remains pending as of September 30, 2025.

The Company believes it has meritorious defenses and counterclaims in the above matters and intends to defend them vigorously. However, litigation is inherently uncertain, and the Company cannot predict the outcome of these proceedings with certainty.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment in accordance with FASB ASC 360, Property, Plant, and Equipment. Under the standard, long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. An impairment charge is recognized when the asset’s carrying value exceeds the fair value. There were no impairment charges as of September 30, 2025, and December 31, 2024.

Provision for Income Taxes

The provision for income taxes is determined using the asset and liability method. This method calculates deferred tax assets and liabilities based on the temporary differences between the consolidated financial statement and income tax bases of assets and liabilities using the enacted tax rates applicable each year.

The Company utilizes a two-step approach to recognizing and measuring uncertain tax positions (“tax contingencies”). The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount, exceeding 50%, that is likely to be realized upon ultimate settlement. The Company considers various factors when evaluating and estimating its tax positions and benefits, which necessitate periodic adjustments that may not accurately predict actual outcomes. The Company includes interest and penalties related to tax contingencies in the provision for income taxes in the consolidated statements of its operations. The Company’s management does not expect the total amount of unrecognized tax benefits to change significantly in the next twelve (12) months.

Software Development Costs

According to ASC 985-20, Software development costs, including expenses incurred to develop software sold, leased, or otherwise marketed, are capitalized after establishing technological feasibility, if significant. The Company amortizes the capitalized software development costs using the straight-line method over the estimated useful life of the application software. By the end of February 2016, the Company completed the technical feasibility of the Condor FX Back Office, Condor Pro Multi-Asset Trading Platform Version, and Condor Pricing Engine. The Company established the technical feasibility of the Digital Assets Web Trader Platform in February 2018. The Company completed the technical feasibility of the Condor Investing and Trading App in January 2021.

The Company estimates the useful life of the software to be three (3) years.

The Company is developing the Condor Investing and Trading App. The Company is currently capitalizing on the costs associated with the development. The R and D costs in the period ending September 30, 2022, were incurred in evaluating the technological feasibility of the Robo Advice Platform. The R and D costs in the period ending December 31, 2022, were incurred while evaluating the technological feasibility of the Condor Investing and Trading App. There were no R and D costs for the three months ending September 30, 2025, and 2024.

The Company capitalizes major costs incurred during the application development stage for internal-use software.

Convertible Debentures

The cash conversion guidance in ASC 470-20, Debt with Conversion and Other Options, is considered when evaluating the accounting for convertible debt instruments, including certain convertible preferred stock classified as a liability, to determine whether the conversion feature should be recognized as a separate component of equity. The cash conversion guidance applies to all convertible debt instruments that, upon conversion, may be settled entirely or partially in cash or other assets where the conversion option is not bifurcated and separately accounted for pursuant to ASC 815.

If the conversion features of conventional convertible debt provide a conversion rate below market value, this feature is characterized as a beneficial conversion feature (“BCF”). The Company records BCF as a debt discount in accordance with ASC Topic 470-20, Debt with Conversion and Other Options. In such circumstances, the convertible debt is recorded net of the discount related to the Black-Scholes formula. The Company amortizes the discount to interest expense over the life of the debt using the effective interest method.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Foreign Currency Translation and Re-measurement

The Company translates its foreign operations into US dollars in accordance with ASC 830, “Foreign Currency Matters.” Gains or losses resulting from translating the foreign currency financial statements are accumulated as a separate component of accumulated other comprehensive income (“AOCI”) in the Company’s stockholders’ equity and noncontrolling interests. Transaction gains and losses resulting from exchange rate changes on transactions denominated in currencies other than the functional currency of the applicable subsidiary are included in the Consolidated Statements of Income, within “Other (income) expense, net”, in the year in which the change occurs.

We have translated the local currency of ADS and AML in the Australian Dollar (AUD), Euro Dollar (EUR), and British Pound (GBP), respectively, into US1.00 at the following exchange rates for the respective dates:

The exchange rate at the reporting end date:

SCHEDULE OF EXCHANGE RATE

Average exchange rate for the period:

ADS’ functional currency is AUD, and the reporting currency is the US dollar. AML’s functional currency is the EUR, and its reporting currency is the US dollar. APL’s functional currency is GBP, and its reporting currency is US dollars.

The Company translates its records into USD as follows:

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair Value

The Company uses current market values to recognize certain assets and liabilities at a fair value. The fair value is the estimated price at which the Company can sell the asset or settle a liability in an orderly transaction to a third party under current market conditions. The Company uses the following methods and valuation techniques for deriving fair values:

Market Approach – The market approach uses the prices associated with actual market transactions for similar or identical assets and liabilities to derive a fair value.

Income Approach – The income approach utilizes estimated future cash flows or earnings, adjusted by a discount rate that reflects the time value of money and the risk of not achieving the cash flows, to derive a discounted present value.

Cost Approach – The cost approach uses the estimated cost to replace an asset, adjusted for the obsolescence of the existing asset.

The Company ranks the fair value hierarchy of information sources from Level 1 (the best) to Level 3 (the worst). The Company uses these three levels to select inputs for valuation techniques:

Basic and Diluted Income (Loss) per Share

The Company follows ASC 260, Earnings Per Share, to account for earnings per share. Basic earnings per share (“EPS”) calculations are determined by dividing net profit (loss) by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. As of September 30, 2025, and 2024, the Company had weighted 423,084,729 and 390,139,674 basic and dilutive shares issued and outstanding.

During the period ended September 30, 2025, common stock equivalents were dilutive due to net income. Hence, they were considered in the computation.

During the period ended September 30, 2024, common stock equivalents were anti-dilutive due to net loss. Hence, they were not considered in the computation.

Reclassifications

We have reclassified certain amounts from the prior period to conform to the current year’s presentation. None of these classifications impacted reported operating or net loss for any presented period.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific requirements. ASU 2014-09 establishes a five-step revenue recognition process; an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from customers’ contracts. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of ASU 2014-09 by one (1) year. The Company adopted ASC 606 using the modified retrospective method, applying it to all contracts not completed as of January 1, 2019. The Company presents results for reporting periods beginning after January 1, 2019, under ASC 606, while prior period amounts are reported in accordance with legacy GAAP. Refer to Note 2, Revenue from Major Contracts with Customers, for further discussion on the Company’s accounting policies for revenue sources within the scope of ASC 606.