NOTE 4. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Background for fiscal year ending December 31, 2025

The Company originally filed its Annual Report on Form 10-K for the year ended December 31, 2025, on April 17, 2026 (the “Original Filing”). On April 22, 2026, the Company filed Amendment No. 1 on Form 10-K/A (the “Amendment No. 1”). Amendment No. 1 had no impact on the Consolidated Balance Sheet, the previously reported net income (loss), total assets, total liabilities, or stockholders’ equity (deficit).

Subsequent to the filing of Amendment No. 1, in response to comments received from the Staff of the Securities and Exchange Commission, the Company is filing Amendment No. 2 on Form 10-K/A (the “Restatement”) to (i) disaggregate the previously reported ‘Cash’ line item on the Consolidated Balance Sheet into two separately captioned line items, ‘Cash and cash equivalents’ and ‘Restricted cash — client funds (segregated),’ with a corresponding ‘Client funds payable’ liability presented separately on the face of the Consolidated Balance Sheet; (ii) reflect cash, cash equivalents, and restricted cash on a combined basis on the Consolidated Statements of Cash Flows in accordance with ASC 230-10-50-8, with the reconciliation between the consolidated balance sheets and the consolidated statements of cash flows set forth in Note 11; and (iii) add Note 11 Client Funds. Restricted cash — client funds (segregated) represent amounts held on behalf of customers of the Company’s regulated brokerage subsidiaries, with an offsetting client funds payable liability. In addition to those presentation and disclosure reclassifications — which by themselves do not change any previously reported total — the Restatement records corrections principally relating to the recalculation of the parent company operating lease under ASC 842, a related reclassification within other income (expense), and the foreign currency translation and noncontrolling interest allocations. For the fiscal year ended December 31, 2025, these corrections increase total assets by $280,690 to $64,051,886, increase consolidated net income by $14,366 to $5,828,978 (net income attributable to FDCTech, Inc.’s shareholders of $5,797,589, compared to $5,783,223 as previously reported), and increase the accumulated surplus by $280,692 to $3,401,487; for the comparative fiscal year ended December 31, 2024, they conform the comparative amounts to the restated figures described under “Background for fiscal year ending December 31, 2024” below. Previously reported total revenue, total cost of sales, gross profit, and basic and diluted earnings per share are unchanged, and no subtotal of the Consolidated Statements of Cash Flows is changed by the presentation reclassifications.

The following tables present the effects of the Adjustment (Amendment No. 1) and the Restatement (Amendment No. 2) on the affected line items of the Consolidated Balance Sheet and Consolidated Statement of Cash Flows. The Consolidated Statement of Operations is presented to show the effect of the Restatement on total operating expenses, other income (expense), and net income (loss); see Note 14, Comprehensive Income, for the comprehensive income presentation added in Amendment No. 1 and further corrected in the Restatement.

A. CONSOLIDATED BALANCE SHEET

December 31, 2025

SCHEDULE OF RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS 

December 31, 2024

Note: The label “Customer funds” was renamed to “Client funds payable” in Amendment No. 2; no dollar change.

NOTE 4. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (continued)

B. CONSOLIDATED STATEMENT OF OPERATIONS

The Adjustment (Amendment No. 1) did not change any previously reported amount in the Consolidated Statement of Operations through net income (loss) attributable to FDCTech, Inc.’s shareholders, or basic and diluted earnings per share. The Restatement (Amendment No. 2) corrects the calculation of the parent company operating lease under ASC 842, reducing rental expense within general and administrative expense by $14,365, and reclassifies amounts between other interest income (expense) ($(122,246)) and other income (expense) ($122,247), increasing net income (loss) by $14,366 with no change to basic and diluted earnings per share of $0.01.

Year Ended December 31, 2025

Year Ended December 31, 2024

Refer to Note 14. Comprehensive Income for the comprehensive income (loss) presentation was added in Amendment No. 1.

NOTE 4. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (continued)

C. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

Year Ended December 31, 2025

Year Ended December 31, 2024

Note: Only line items affected by the Adjustment (Amendment No. 1) or otherwise relevant for traceability are shown. The Restatement (Amendment No. 2) does not change any subtotal or line item of the Consolidated Statements of Cash Flows; rather, it (i) relabels ‘Cash at beginning/end of the period’ to ‘Cash, cash equivalents, and restricted cash at beginning/end of the period’ to reflect the inclusion of client funds — segregated as restricted cash under ASC 230-10-50-8, and (ii) adds the corresponding reconciliation between the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows in Note 11(d).

D. CONSOLIDATED STATEMENT OF CASH FLOWS

Amendment No. 1 added the presentation of comprehensive income (loss) below net income (loss) on the Consolidated Statements of Operations — a presentation change only. Amounts shown reflect the comprehensive income (loss) disclosure as added; refer to Note 14. Comprehensive Income.

Year Ended December 31, 2025

Year Ended December 31, 2024

F. STOCKHOLDERS’ EQUITY AND EARNINGS PER SHARE — CONFIRMATION OF NO IMPACT

The Adjustment (Amendment No. 1) did not change total stockholders’ equity (deficit) or the components of stockholders’ equity. The Restatement (Amendment No. 2) increased the accumulated surplus by $280,692 to $3,401,487 and total FDCTech, Inc. stockholders’ equity to $22,657,965 ($22,691,288 including noncontrolling interest), with no change to basic and diluted earnings per share.

NOTE 4. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (continued)

Background for fiscal year ending December 31, 2024

On April 3, 2025, the Company’s Board of Directors dismissed Olayinka Oyebola & Co. (“Olayinka”) as its independent registered public accounting firm, following Olayinka’s designation as a Prohibited Service Provider by OTC Markets Group. The Company engaged LAO Professionals (PCAOB Firm ID: 7057) as its successor independent auditor, effective on the same date.

As part of the auditor transition, LAO Professionals conducted a reaudit of the Company’s consolidated financial statements for the fiscal year ended December 31, 2024 (previously audited by Olayinka and filed with the SEC on March 3, 2025). The reaudit identified two adjustments to the previously reported figures. Accordingly, the Company has restated its consolidated balance sheet as of December 31, 2024, and its consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for the year then ended. Investors should not rely upon the financial statements as presented in the Annual Report on Form 10-K for the year ended December 31, 2024, as originally filed.

The Company has restated its previously issued consolidated financial statements for the year ended December 31, 2024 to correct certain errors. The effects of the restatement on the Consolidated Balance Sheet, Consolidated Statement of Operations, and Consolidated Statement of Cash Flows are presented below.

A. Consolidated Balance Sheet — As of December 31, 2024

NOTE 4. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (continued)

B. Consolidated Statement of Operations — Year Ended December 31, 2024

C. Consolidated Statement of Cash Flows — Year Ended December 31, 2024

NOTE 4. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (continued)

D. Effect of Each Restatement Adjustment

Nature of Restatement Adjustments

Adjustment A — Correction of General and Administrative Expense ($222,268)

The reaudit identified $44,058 of G&A expenses omitted from the previously reported consolidated statement of operations for the year ended December 31, 2024. The corresponding entry reduces cash by $44,058. This correction increases G&A expense by $44,058, reduces net income by $44,058, and increases accumulated deficit by $44,058.

Adjustment in rental expenses per lease accounting under US GAAP (ASC 842) with a reduction in lease expenses of $266,325 from January 1, 2024, to December 31, 2024, increases net income by $266,325.

Net income attributable to the Company’s shareholders increased from $80,027 to a net income of $247,544.

Adjustment B — Reclassification of Client Funds of Alchemy Prime Limited (APL) from Alchemy Markets Ltd. (AML) Cash ($3,500,000)

Client funds aggregating $3,500,000 belonging to APL and held within AML’s cash account (designated as the liquidity provider account) were recorded within AML’s general cash balance rather than as a separately designated client funds account. ASC 940, “Financial Services–Brokers and Dealers,” the Company presents client funds as a separately captioned asset on the consolidated balance sheet. This reclassification transfers the balance from AML’s unrestricted cash to a client funds account. No effect on consolidated net income or total stockholders’ equity; reduces unrestricted cash and correspondingly reduces the Client funds liability.

Adjustment C — Reclassification of External Third-Party Assets from AML Cash on Hand ($3,574,201 / EUR 3,453,334)

Assets totaling $3,574,201 (EUR 3,453,334) held by AML on behalf of an external third-party counterparty were included within AML’s cash on hand balance (Account 1028). These assets belong to an external party and do not constitute Company assets. The reclassification removes third-party assets from cash and presents them within client funds, with corresponding recognition of amounts due to the external party. No effect on consolidated net income, net revenue, or total stockholders’ equity.

Adjustment D — Reclassification of Cash Credit at Various Related Parties from Cash on Hand to Related Party Advances ($7,713,827)

The classification of certain cash credits, net of $7,713,827, for various related parties was corrected to related party advances. As a result, cash on hand increased by $7,713,827 for the fiscal year ended December 31, 2024, with an offsetting increase to the related party advances liability.

Adjustment E — Reclassification of Subscription Receivable from Current Asset to Contra-Equity ($8,200,000)

The previously filed December 31, 2024, balance sheet included a subscription receivable of $8,200,000 classified as a current asset, representing amounts due from shareholders for equity instruments previously issued but not yet paid. Under ASC 505-10-45-2, receivables arising from the issuance of equity instruments shall be presented as a contra-equity item rather than as an asset. Accordingly, $8,000,000 has been reclassified from current assets to a contra-equity offset within stockholders’ equity, and $200,000, representing proceeds from the September 2021 cancellation of 2,000,000 shares of subscription receivable that had been credited to additional paid-in capital without a corresponding cash receipt, has been reversed from additional paid-in capital. This reclassification has no effect on the consolidated statements of operations, comprehensive income, or cash flows.

Adjustment F — Elimination of Intercompany Receivable Against Intercompany Payable for AML ($732,375)

An intercompany receivable of $732,375 recorded as “Amount Due from AML” had not been eliminated against the corresponding “Amount Due to AML” intercompany payable in consolidation. Per ASC 810, all intercompany balances and transactions must be eliminated upon consolidation. This adjustment eliminates the gross presentation of the intercompany receivable and payable. Net effect: reduces total consolidated assets and total consolidated liabilities by $732,375 each. No impact on stockholders’ equity or net income.

NOTE 4. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (continued)

Adjustment G — Correction of 500,000 Shares Issued for Services in October 2021 ($54,750)

Corrects the under-issuance of 500,000 shares that should have been issued in October 2021 at $0.1095 per share. The entry records the omitted share consideration at the original transaction price. Stock-based compensation expense increases by $54,750, with an increase in common stock and APIC of $50 and $54,700, respectively. As a result, shares issued and outstanding increased from 390,584,729 to 391,084,729.

Adjustment H — Correction of Foreign Currency Translation Adjustment for Fiscal Year 2024 ($225,228)

In connection with LAO Professionals’ reissuance of the Report of Independent Registered Public Accounting Firm, the Company further corrected the foreign currency translation adjustment by $225,228, from $(72,781) (as presented on the initial restated basis following the Olayinka-to-LAO reaudit reclassification) to $(298,009). Per ASC 830, foreign currency translation adjustments are recognized in OCI with an offset in AOCI within stockholders’ equity. No effect on net income, total current assets, total current liabilities, working capital, or cash flows for fiscal 2024. The adjustment reduces total comprehensive income for fiscal 2024 from $43,042 to $(316,790), and reduces comprehensive income attributable to FDCTech stockholders to $(61,466).

OCI Translation — $(19,511) mechanical re-translation effect

LAO Professionals re-performed the translation of the Company’s foreign subsidiary financial statements from functional currency to U.S. dollar reporting currency per ASC 830. The re-translation produced an AOCI loss of $(72,781) at December 31, 2024, compared to the $(53,270) balance previously reported by Olayinka Oyebola & Co. The $(19,511) difference represents the mechanical effect of the re-translation and does not reflect a separate adjusting entry. The effect is further re-corrected by Adjustment H above.

E. Consolidated Statement of Comprehensive Income — Year Ended December 31, 2024

(in U.S. dollars)

SCHEDULE OF STATEMENT OF COMPREHENSIVE INCOME