v3.26.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
 6 Months Ended 12 Months Ended
Jun. 30, 2026
Dec. 31, 2025
Accounting Policies [Abstract]    
SCHEDULE OF RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The following tables reconcile the amounts as originally filed (Form 10-Q, filed May 15, 2026) to the amounts as restated. The share and per-share amounts in the reconciliation tables below are presented on a pre-reverse-stock-split basis, consistent with the amounts as previously reported, and have not been retroactively adjusted for the reverse stock split described in Note 1:

 

SCHEDULE OF RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Consolidated Balance Sheet — March 31, 2026

 

                
   As Originally Filed   Adjustment   As Restated 
Cash and cash equivalents (including restricted cash)   36,891,541    (4,429,781)   32,461,760 
Accounts receivable, net   358,932    -    358,932 
Prepaid – current   345,612    -    345,612 
Related party receivable   30,154,645    4,865,084    35,019,729 
Prepaid – non-current   189,796    -    189,796 
Fixed assets, net   187,657    -    187,657 
Capitalized software, net   1,578,353    -    1,578,353 
Investment through subsidiary   34,510    -    34,510 
Accrued income   275,715    -    275,715 
Acquired intangible assets   1,250,397    (10,518)   1,239,879 
Tax receivable   187,508    -    187,508 
Other trade and tax receivable   -    88,986    88,986 
Fair value of trading positions for the firm, profit   72,386    -    72,386 
Right of use (lease)   668,214    98,124    766,338 
Total assets   72,195,266    611,895    72,807,161 
Accounts payable   502,087    -    502,087 
Line of credit   266,926    -    266,926 
Accrued expenses, related party   997,259    5,287    1,002,546 
Business acquisition loan   2,350,000    -    2,350,000 
Related party advances   3,296,890    524,289    3,821,179 
Client funds payable   28,339,255    -    28,339,255 
Operating lease liability, current   186,158    (42,356)   143,802 
Other current liabilities   1,642,601    -    1,642,601 
Deferred tax liabilities   372,339    -    372,339 
SBA loan – non-current   103,552    -    103,552 
Operating lease liability – non-current   482,056    (143,803)   338,253 
Accrued interest – non-current   43,650    (5,287)   38,363 
Total liabilities   38,582,773    338,130    38,920,903 
Series A Preferred stock   450    -    450 
Series B Preferred stock   237    -    237 
Common stock*   423    -    423 
Additional paid-in capital, Common and Series A Preferred   28,241,475    (195,777)   28,045,698 
Subscription receivable   (8,000,000)   -    (8,000,000)
Additional paid-in capital, Series B Preferred stock   3,344,063    -    3,344,063 
Accumulated other comprehensive income (loss)   (2,427)   188,472    186,045 
Accumulated surplus (deficit)   9,984,473    284,278    10,268,751 
Total FDCTech, Inc. stockholders’ equity (deficit)   33,568,694    276,973    33,845,667 
Noncontrolling interest   43,799    (3,208)   40,591 
Total liabilities and stockholders’ equity (deficit)   72,195,266    611,895    72,807,161 
 

Consolidated Statement of Operations — Three Months Ended March 31, 2026

 

    As Originally Filed     Adjustment     As Restated  
Total revenue     15,214,492       -       15,214,492  
Total cost of sales     3,583,338       -       3,583,338  
Gross profit     11,631,154       -       11,631,154  
Total operating expenses     4,775,845       (3,587 )     4,772,258  
Operating income (loss)     6,855,309       3,587       6,858,896  
Total other income (expense)     14,611       -       14,611  
Income (loss) before provision for income taxes     6,869,920       3,587       6,873,507  
Provision for income taxes     -       -       -  
Net income (loss)     6,869,920       3,587       6,873,507  
Net income (loss) attributable to noncontrolling interest     -       6,241       6,241  
Net income (loss) attributable to FDCTech, Inc.     6,869,920       (2,654 )     6,867,266  
  
*$42,308 (before reverse split) to $423 (after reverse split).
 

 

 

Line Item  As Originally Reported   Adjustment   Amendment No. 1   Adjustment   As Restated
(Amend. No. 2)		 
Cash and cash equivalents  $17,669,749    -    17,669,749    (5,813,888)   11,855,861 
Restricted cash — client funds (segregated)   -    -    -    5,813,888    5,813,888 
Related party receivable   37,477,356    -    37,477,356    2,612,695    40,090,051 
Tax receivable   2,803,041    -    2,803,041    (2,612,695)   190,346 
Right of use asset (ROU)   530,348    -    530,348    280,690    811,038 
Total assets  $63,771,196    -    63,771,196    280,690    64,051,886 
Operating lease liability, current   501,236    -    501,236    (335,544)   165,692 
Operating lease liability, non-current   29,112    -    29,112    335,543    364,655 
Total liabilities  $41,360,599    -    41,360,599    (1)   41,360,598 
Additional paid-in capital   26,900,000    -    26,900,000    17,226    26,917,226 
Accumulated other comprehensive income (loss)   313,484    -    313,484    (17,227)   296,257 
Accumulated deficit   3,120,795    -    3,120,795    280,692    3,401,487 
Total FDCTech, Inc. stockholders’ equity (deficit)   22,377,274    -    22,377,274    280,691    22,657,965 
Total stockholders’ equity    22,410,597    -    22,410,597    280,691    22,691,288 
Total liabilities and stockholders’ equity  $63,771,196    -    63,771,196    280,690    64,051,886 

 

In connection with the preparation of Amendment No. 4 to its Annual Report on Form 10-K/A for the year ended December 31, 2025, the Company identified certain classification and measurement matters affecting the consolidated balance sheet as of December 31, 2025, previously presented in Amendment No. 2. The accompanying consolidated balance sheet has been restated to correct these matters. The effect of each adjustment is described below and summarized in the reconciliation that follows.

 

(a) Separate presentation of restricted cash. The Company reclassified $5,813,888 of restricted cash (client funds, segregated) out of Cash and cash equivalents into a separately presented Restricted cash caption. As a result, Cash and cash equivalents decreased from $17,669,749 to $11,855,861 and Restricted cash increased to $5,813,888. This adjustment had no effect on total current assets, total assets, total liabilities or total stockholders’ equity.

 

(b) Reclassification of related party balances. The Company reclassified $2,612,695 previously reported within Tax receivable to Related party receivable to appropriately reflect the nature of the counterparty. This adjustment had no effect on total assets, total liabilities or total stockholders’ equity.

 

(c) Re-measurement of operating lease right-of-use asset. The Company re-measured its operating lease right-of-use asset, increasing the asset by $280,690, and decreased accumulated deficit by $280,692, increasing total stockholders’ equity by $280,691.

 

(d) Classification of operating lease liability. The Company reclassified its operating lease liability between current and non-current, decreasing Operating lease liability, current by $335,544 and increasing Operating lease liability, non-current by $335,543, with no significant effect on total liabilities.

 

(e) Reclassification within stockholders’ equity. The Company reclassified $17,226 between Additional paid-in capital and Accumulated other comprehensive income (loss); Additional paid-in capital increased by $17,226 and Accumulated other comprehensive income (loss) decreased by $17,227, with no net effect on total stockholders’ equity.

 

December 31, 2024

 

Line Item  As Originally Reported   Adjustment   Amendment No. 1   Adjustment   As Restated
(Amend. No. 2)		 
Cash and cash equivalents  $25,376,957    -    25,376,957    (11,526,789)   13,850,168 
Restricted cash — client funds (segregated)   -    -    -    11,526,789    11,526,789 
Right of use asset (ROU)  $711,928    -    711,928    266,326   978,254 
Total assets  $33,502,601    -    33,502,601    266,326    33,768,927 
Operating lease liability, current   319,656    -    319,656    (138,076)   181,580 
Operating lease liability, non-current   392,272    -    392,272    138,076    530,348 
Total liabilities and stockholders’ equity  $33,502,601    -    33,502,601    266,326    33,768,927 

 

In connection with the restatement of its consolidated financial statements, the Company restated its previously issued consolidated balance sheet as of December 31, 2024, as originally reported and as previously presented in Amendment No. 1. The accompanying consolidated balance sheet as of December 31, 2024, has been restated to correct the classification and measurement matters described below, which are summarized in the reconciliation that follows.

 

(a) Separate presentation of restricted cash. The Company reclassified $11,526,789 of restricted cash (client funds, segregated) out of Cash and cash equivalents into a separately presented Restricted cash caption. As a result, Cash and cash equivalents decreased from $25,376,957 to $13,850,168, and Restricted cash increased to $11,526,789. This adjustment had no effect on total current assets, total assets, total liabilities, or total stockholders’ equity.

 

(b) Re-measurement of operating lease right-of-use asset. The Company re-measured its operating lease right-of-use asset, increasing the asset by $266,326 (from $711,928 to $978,254), with a corresponding decrease in accumulated deficit of $266,326, increasing total stockholders’ equity by $266,326.

 

(c) Classification of operating lease liability. The Company reclassified its operating lease liability between current and non-current, decreasing Operating lease liability, current by $138,076 (from $319,656 to $181,580) and increasing Operating lease liability, non-current by $138,076 (from $392,272 to $530,348), with no effect on total liabilities.

 

 

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

 

Line Item  As Originally Reported   Adjustment   Amendment No. 1   Adjustment   As Restated
(Amend. No. 2)		 
Revenue   34,959,399    -    34,959,399    -    34,959,399 
Cost of sales   15,815,358    -    15,815,358    -    15,815,358 
Gross Profit   19,144,041    -    19,144,041    -    19,144,041 
Total operating expenses   13,090,832    -    13,090,832    (14,365)   13,076,467 
Other interest income (expense)   16,157    -    16,157    (122,246)   (106,089)
Other income (expense)   (254,754)   -    (254,754)   122,247    (132,507)
Net income (loss)   5,814,612    -    5,814,612    14,366    5,828,978 
Net income (loss) per common share   0.01    -    0.01    -    0.01 

 

Year Ended December 31, 2024

 

Line Item  As Originally Reported   Adjustment   Amendment No. 1   Adjustment   As Restated
(Amend. No. 2)		 
Revenue   26,943,718    -    26,943,718    -    26,943,718 
Cost of sales   14,902,350    -    14,902,350    -    14,902,350 
Gross Profit   12,041,368    -    12,041,368    -    12,041,368 
Total operating expenses   12,943,131    -    12,943,131    (266,324)   12,676,807 
Total other income (expense)   872,025    -    872,025    -    872,025 
Net income (loss)   (29,739)   -    (29,739)   266,325    236,586 
Net income (loss) per common share   (0.00)    -    (0.00)    -    0.00 

 

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

 

Line Item  As Originally Reported   Adjustment   Amendment No. 1   Adjustment   As Restated
(Amend. No. 2)		 
Operating Activities:                         
Net income (loss)   5,814,612    -    5,814,612    14,366    5,828,978 
Change in foreign currency translation   (313,484)   699,749    386,265    (17,227)    369,038 
Total comprehensive income (loss)   5,501,128    699,749    6,200,877    (2,861)    6,198,016 
Comprehensive income (loss) attributable to NCI   (9,254)   26,444    17,190    22,622    39,812 
Comprehensive income (loss) attributable to FDCTech stockholders   5,510,382    673,305     6,183,687     (25,483)    6,158,204 

 

Year Ended December 31, 2024

 

Line Item  As Originally Reported   Adjustment   Amendment No. 1   Adjustment   As Restated
(Amend. No. 2)		 
Operating Activities:                         
Net income (loss)   (29,739)   -    (29,739)   266,325    236,586 
Change in foreign currency translation   72,781    (370,790)   (298,009)   -    (298,009)
Total comprehensive income (loss)   43,042    (370,790)   (327,748)   266,325    (61,423)
Comprehensive income (loss) attributable to NCI   (43,178)   65,628    22,450    (22,408)   43 
Comprehensive income (loss) attributable to FDCTech stockholders   86,220    (436,418)   (350,198)   288,733    (61,466)

 

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

 

Line Item  As Originally Reported   Adjustment   Amendment No. 1   Adjustment   As Restated
(Amend. No. 2)		 
Net income (loss)   5,783,223    -    5,783,223    45,755    5,828,978 
Common stock issued for services   -    -    -    35,200    35,200 
Series B Convertible Preferred stock for services   -    14,100    14,100    -    14,100 
Right of use of assets   181,580    -    181,580    (14,364)   167,216 
Net cash provided by (used in) operating activities   (40,999,098)   14,100    (40,984,998)   66,590    (40,918,408)
Acquisition of AIL   -    -    -    8,933,118    8,933,118 
Changes in paid-in capital, common control   -    -    -    1,054,389    1,054,389 
Net cash used in investing activities   2,069,328    -    2,069,328    9,584,016    11,670,570 
Series B Convertible Preferred stock for services   14,100    (14,100)   -    -    - 
Common stock issued at a discount   9,969,735    -    9,969,735    (9,969,735)   - 
Common stock issued for cash   35,200    -    35,200    (35,200)   - 
Capital contribution   546    -    546    (546)   - 
Net cash provided by financing activities   31,208,462    -    31,208,462    (10,036,853)   21,171,592 

 

Year Ended December 31, 2024

 

Line Item  As Originally Reported   Adjustment   Amendment No. 1   Restatement Adjustment   As Restated
(Amend. No. 2)		 
Net income (loss)   (18,781)   -    (18,781)   255,367    236,586 
Less: Net income (loss) attributable to noncontrolling interest   -    -    -    10,958    10,958 
Operating lease   672,245    -    672,245    -    672,245 
Right of asset use   (672,245)   -    (672,245)   (266,326)   (938,571)
Net cash provided by (used in) operating activities   (13,621,417)   -    (13,621,417)   (10,958)    (13,632,376)

  

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

 

   As Originally Reported   Adjustment   As Restated 
Assets               
Current assets:               
Cash and cash equivalents  $24,781,389   $(10,931,221

)

  $13,850,168 
Restricted cash — client funds (segregated)  $-   $

11,526,789

   $

11,526,789

 
Accounts receivable, net  $25,000    -   $25,000 
Subscription receivable  $8,200,000   $(8,200,000)   - 
Prepaid – current  $156,335    -   $156,335 
Related party receivable  $2,414,825   $(732,375)  $1,682,450 
Total current assets  $35,577,549   $(8,336,807)  $27,240,742 
Fixed assets, net  $185,195    -   $185,195 
Capitalized software, net  $1,163,309    -   $1,163,309 
Investment through subsidiary  $36,062    -   $36,062 
Accrued income  $2,073,193    -   $2,073,193 
Acquired intangible assets  $1,317,108    -   $1,317,108 
Tax receivable  $167,907    -   $167,907 
Fair value of trading positions, profit  $607,157    -   $607,157 
Right of use (lease)  $711,929    266,325   $978,254 
Total assets  $41,839,408   $(8,070,481)  $33,768,927 
                
Liabilities and Stockholders’ Equity (Deficit)               
Current liabilities:               
Accounts payable  $229,316    -   $229,316 
Line of credit  $115,337    -   $115,337 
Accrued expenses, related party  $519,500    -   $519,500 
Business acquisition loan  $350,000    -   $350,000 
CARES Act – PPP advance  $5,661    -   $5,661 
Related party advances  $1,011,388   $6,981,452   $7,992,840 
Client funds payable  $18,600,990   $(7,074,201)  $11,526,789 
Operating lease liability, current  $181,580    -   $181,580 
Other current liabilities  $5,328,110    -   $5,328,110 
Total current liabilities  $26,341,882   $(92,749)  $26,249,133 
Deferred tax liabilities  $333,418    -   $333,418 
SBA loan – non-current  $114,184    -   $114,184 
Operating lease liability, non-current  $530,348    -   $530,348 
Accrued interest – non-current  $70,493    -   $70,493 
Total liabilities  $27,390,325   $(92,749)  $27,297,576 
                
Stockholders’ Equity (Deficit):               
Preferred stock  $450    -   $450 
Series B Preferred stock  $236    -   $236 
Common stock  $39,058   $50   $39,108 
Additional paid-in capital  $13,679,445   $(125,789)  $13,553,656 
Subscription receivable (contra-equity)   -   $(8,000,000)  $(8,000,000)
Additional paid-in capital, Series B Preferred  $3,329,964    -   $3,329,964 
Accumulated other comprehensive income (loss)  $(53,270)  $(19,511)  $(72,781)
Accumulated deficit  $(2,563,620)  $

167,518

  $(2,396,102)
Total FDCTech stockholders’ equity  $14,432,263   $(7,977,732)  $6,454,531 
Noncontrolling interest  $16,820    -   $16,820 
Total liabilities and stockholders’ equity  $41,839,408   $(8,070,481)  $33,768,927 

 

 

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

 

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

 

   As Originally Reported   Adjustment   As Restated 
Revenues:               
Technology & software  $1,642,130    -   $1,642,130 
Wealth management  $6,498,404    -   $6,498,404 
Brokerage  $18,803,184    -   $18,803,184 
Total revenue  $26,943,718    -   $26,943,718 
Cost of sales:               
Technology & software  $173,708    -   $173,708 
Wealth management  $5,925,652    -   $5,925,652 
Brokerage  $8,802,990    -   $8,802,990 
Total cost of sales  $14,902,350    -   $14,902,350 
Gross Profit  $12,041,368    -   $12,041,368 
Operating expenses:               
General and administrative  $11,191,357   $(167,516)  $11,023,841 
Sales and marketing  $1,466,616    -   $1,466,616 
Depreciation  $186,350    -   $186,350 
Total operating expenses  $12,844,323   $(167,516)  $12,676,807 
Operating income (loss)  $(802,955)  $

167,516

  $(635,439)
Other income (expense):               
Other interest income (expense)  $(638,483)   -   $(638,483)
Other income (expense)  $1,510,508    -   $1,510,508 
Total other income (expense)  $872,025    -   $872,025 
Income (loss) before income taxes  $69,069   $

167,517

  $

236,586

Provision (benefit) for income taxes   -    -    - 
Net income (loss)  $69,069   $

167,517

  $236,586
Less: Net income (loss) attributable to NCI  $(10,958)   -   $(10,958)
Net income (loss) attributable to FDCTech shareholders  $80,027   $

167,517

  $247,544

 

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

 

   As Originally Reported   Adjustment   As Restated 
Operating Activities:               
Net income (loss)  $80,027   $

156,559

  $236,586
Adjustments to reconcile net loss to net cash:               
Depreciation  $186,350    -   $186,350 
Common stock issued for services   -   $54,750   $54,750 
Series B Preferred issued for services  $792,200    -   $792,200 
Accounts receivable allowance  $22,382    -   $22,382 
Fixed assets, net  $(207,973)   -   $(207,973)
Acquired intangible assets  $(11,615)   -   $(11,615)
Changes in assets and liabilities:               
Gross accounts receivable  $981,618    -   $981,618 
Prepaid  $246,856    -   $246,856 
Related party receivable  $(2,414,825)  $732,375   $(1,682,450)
Accounts payable  $49,337    -   $49,337 
Other current liabilities  $4,557,126    -   $4,557,126 
Accrued interest  $37,431    -   $37,431 
Client funds payable (Customer funds)  $(11,619,280)  $(7,074,201)  $(18,693,481)
Fair value of trading position, net  $268,101    -   $268,101 
Operating lease  $672,245    -   $672,245 
Deferred taxes  $(513,163)   -   $(513,163)
Related party guarantee  $1,353,170    -   $1,353,170 
Tax receivable by subsidiaries  $9,299    -   $9,299 
Accrued income  $(1,037,574)   -   $(1,037,574)
Right of use of assets (lease)  $(672,245)   (266,326)  $(938,571)
Accrued expenses, related party  $(15,000)   -   $(15,000)
Net cash provided (used) in operating activities  $(7,235,533)  $

(6,396,843

)  $(13,632,376)
                
Investing Activities:               
Capitalized software  $(75,766)   -   $(75,766)
Effect of exchange rates  $(278,498)  $278,498   $- 
Changes in paid-in capital, common control  $798,996   $19,511   $818,507 
Net cash provided (used) by investing activities  $444,732    298,009   $742,741 
Financing Activities:               
Borrowing from (payments to) line of credit  $54,595    -   $54,595 
Net proceeds from PPP (repayment)  $(14,991)   -   $(14,991)
Net proceeds from SBA loan (repayment)  $(8,505)   -   $(8,505)
Related party advances  $218,049   $6,981,452   $7,199,501 
Series A Preferred cancellation  $(200)   -   $(200)
Common stock issued for cash  $20,000    -   $20,000 
Changes in paid-in capital, shares issued at discount  $8,900    -   $8,900 
Changes in NCI  $

(22,118

)   -   (22,118)
Noncontrolling interest income  $

10,958

   -   $

10,958

Net cash provided (used) by financing activities  $255,729   $6,981,452   $

8,733,622

 
Effect of exchange rates  $ (278,498)   (19,511)   (298,009)
Net increase (decrease) in cash  $(6,535,072)  $595,568   $(5,939,504

)

Cash, cash equivalents, and restricted cash at beginning of the period  $31,316,461    -

  $31,316,461 
Cash, cash equivalents, and restricted cash at end of the period  $24,781,389   $595,568

  $25,376,957 

 

 

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

 

D. Effect of Each Restatement Adjustment

 

Line item  A: G&A omitted   B: APL client funds   C: Third-party assets   D: RP advances reclass   E: Subscription receivable   F: Intercompany elimination   G: 500K shares 2021   OCI re-translation*    Cash segregation*    Total 
Balance Sheet                                                     
Cash and cash equivalents  $(44,058)  $(3,500,000)  $(3,574,201)  $7,713,827    -    -    -    -    $ (11,526,789 )  $(10,931,221

)

Restricted cash — client funds (segregated)   

-

    

-

    

-

    

-

    

-

    

-

    

-

         $ 11,526,789     

11,526,789

 
Related party receivable   -    -    -    -    -   $(732,375)   -    -      -    $(732,375)
Subscription receivable (asset)   -    -    -    -   $(8,200,000)   -    -    -      -    $(8,200,000)
Related party advances (liability)   -    -    -   $7,713,827    -   $(732,375)   -    -      -    $6,981,452 
Customer funds (Client funds payable)   -   $(3,500,000)  $(3,574,201)   -    -    -    -    -      -    $(7,074,201)
Common stock   -    -    -    -    -    -   $50    -      -    $50 
Additional paid-in capital   -    -    -    -   $(200,000)   -   $54,700   $19,511      -    $(125,789)
Subscription receivable (contra-equity)   -    -    -    -   $(8,000,000)   -    -    -      -    $(8,000,000)
AOCI (loss)   -    -    -    -    -    -    -   $(19,511)     -    $(19,511)
Accumulated deficit  $(44,058)   -    -    -    -    -   $(54,750)   -      -    $(98,808)
                                                       
Income Statement                                                     
General and administrative expense  $44,058    -    -    -    -    -   $54,750    -      -    $98,808 
Rental expenses adjustment per ASC 842   

(266,325

)   -    -    -    -    -    -    -      -    $(266,325)
Net income (loss) attributable to shareholders  $222,268   -    -    -    -    -   $(54,750)   -           $167,518
SCHEDULE OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

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

SCHEDULE OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

 

   June 30, 2026   December 31, 2025 
Cash and cash equivalents  $18,184,787   $11,855,861 
Restricted cash (client funds, segregated)   7,699,708    5,813,888 
Total cash, cash equivalents, and restricted cash  $25,884,495   $17,669,749 
  
SCHEDULE OF EXCHANGE RATE

The exchange rate at the reporting end date: 

 

   June 30, 2026   December 31, 2025 
USD: AUD  $1.4459    1.4888 
USD: EUR  $0.8484    0.8523 
USD: GBP  $0.7543    0.7436 

 

Average exchange rate for the period:

 

   Six Months Ended
June 30, 2026		   Six Months Ended
June 30, 2025		 
USD: AUD  $1.4241    1.5605 
USD: EUR  $0.8675    0.8814 
USD: GBP  $0.7437    0.7489 

The exchange rate at the reporting end date:

 

 

   December 31,
2025		   December 31,
2024		 
USD: AUD  $1.4993    1.6168 
USD: EUR  $0.8523    0.9662 
USD: GBP  $0.7436    0.7990 

 

Average exchange rate for the period:

 

   Q1 2025   Q2 2025   Q3 2025   Q4 2025 
USD: AUD  $1.5939    1.5605    1.5282    1.5040 
USD: EUR  $0.9507    0.8814    0.8553    0.8590 
USD: GBP  $0.7944    0.7489    0.7417    0.7519 
SCHEDULE OF ACQUISITION CONSIDERATION BREAKDOWN  

 

  

Net Financial Assets

(Book Value)

   Purchase %   Purchase Price ($)   Type of Shares  Price per Shares   # of Shares 
   Local Currency   USD ($)                    
Shares of                           
APL  £1,118,035    1,362,594(1)   100.00%  $1,362,594   Series B  $1.41    966,379 
AML  €2,255,556    2,351,192(2)   49.90%  $1,175,406   Series B  $1.41    833,621 
Total                 $2,538,000            1,800,000 

 

  (1) As of June 30, 2022, £1 = $1.2165, Net Financial Assets based on June 30, 2022, audited financial statements

 

  (2) As of November 30, 2022, €1 EUR = $1.042, Net Financial Assets based on November 30, 2022, audited financial statements
SCHEDULE OF PURCHASE PRICE ALLOCATION  

AML’s Balance Sheet as of November 30, 2023 (Acquisition Date):

 

Description  Book Value, $ 
Assets:     
Cash and cash equivalents (1)   3,215,638 
Prepaid   5,277 
Financial Assets through profit and less (2)   1,070,795 
Related party guarantee (3)   1,340,432 
Accrued income   1,545,557 
Tax receivable (4)   175,538 
Capitalized software, net   295,391 
Fixed assets (5)   2,391 
Total assets:  $7,651,019 
Liabilities:     
Accounts Payable (6)   173,060 
Financial liability at fair value through profit and loss (7)   515,906 
      
Client funds(8)   2,773,824 
Deferred tax liabilities(9)   348,570 
Total liabilities  $3,811,360 
Net assets, (A)   3,839,660 
Accumulated other comprehensive income (loss), (B)   53,605 
Purchase Price, 833,621 Series B Preferred Stock valued at $1.41, (C)   1,175,406 
Increase in APIC (A) – (B) – (C)  $2,610,648 

 

APL Purchase Price Allocation

 

APL’s Balance Sheet as of November 30, 2023 (Acquisition Date):

 

Description  Book Value, $ 
Assets:     
Cash and cash equivalents, including cash at liquidity provider (1)   28,562,337 
Fixed assets (2)   157,520 
Prepaid   405,702 
Total assets:  $29,125,559 
Liabilities:     
Deferred Tax(9)   430,142 
Current liabilities - Creditors (10)   874,636 
Client funds (8)   26,239,126 
Related party advances   2,500,619 
Total liabilities  $30,044,523 
Net assets (A)   (918,964)
Accumulated other comprehensive income (loss), (B)   (5,539)
Purchase Price, 966,379 Series B Preferred Stock valued at $1.41, (C)   1,362,594 
Increase in APIC (A) – (B) – (C)  $(2,276,019)

 

(1) We recognize cash and cash equivalents held by AML and APL, and deposits in bank accounts and liquidity providers that can be accessed on demand or within 90 days.

 

(2) Financial assets at fair values for AML through profit and loss are derivative contracts in favor of AML. They are included in our other current assets in the consolidated balance sheet as of November 30, 2023. We determine financial assets at fair values by reference to market prices or rates quoted at the end of the reporting period. Observable market prices or rates support the valuation techniques since their variables include only data from observable markets. We categorize AML’s derivative financial instruments as level 2.

 

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

(3) Guarantee provided by Alchemy BVI as a parent to AML for any shortfall in the net capital.
   
(4) Estimated overpaid tax to the Commissioner of Tax Revenue, Malta.
   
(5) All property and equipment are initially recorded at historical cost and included in our fixed assets, net in the consolidated balance sheet as of November 30, 2023. Historical cost includes expenditures directly attributable to the Acquisition of the items. We calculate depreciation using the straight-line method to allocate their cost or revalued amounts to their residual values over their estimated useful lives.
   
(6) Trade and other payables comprise obligations to pay for goods or services acquired from suppliers in the ordinary course of business. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.
   
(7) Financial liabilities at fair values for AML through profit and loss are derivative contracts against AML. They are included in our other current assets in the consolidated balance sheet as of November 30, 2023. We determine financial liabilities at fair values by reference to market prices or rates quoted at the end of the reporting period. Observable market prices or rates support the valuation techniques since their variables include only data from observable markets. We categorize AML’s derivative financial instruments as level 2.
   
(8) Customer net trading deposits are funds placed with the Company by clients intended to trade FX, securities, or other investment activities.
   
(9) We recognize deferred tax using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements. We include deferred tax liabilities in our consolidated balance sheet as of November 30, 2023. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill; deferred tax is not accounted for if it stems from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates (and Malta laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred tax asset is realized, or the deferred tax liability is settled.
   
(10) Short-term borrowings are primarily composed of lines of credit and short-term loans from financial institutions.
SCHEDULE OF ACQUISITION DATE REPRESENTS A CAPITAL CONTRIBUTION  

 

      
100% Net Book Value of AIL at October 31, 2025  $10,944,062 
Less: Consideration paid (per SPA)   (2,000,000)
Less: Non-Controlling Interest (0.1% of Net Book Value)   (10,944)
APIC – Capital Contribution from Controlling Shareholder  $8,933,118 
SCHEDULE OF AIL’s BALANCE SHEETS  

AIL’s Balance Sheet as of October 31, 2025 (proxied Acquisition Date):

 

Description  Book Value, $ 
Assets:     
Plant and Machinery, net (1)   1,005 
Liquidity Provider Accounts, net (2)   10,815,560 
C/A – Alchemy Capital Markets Ltd (3)   24,994,050 
C/A – Alchemy Markets EU (4)   552,490 
Net Intercompany Receivables (5)   1,589,085 
Rebates Receivable   46,970 
Payment Gateways (6)   599,510 
Other Debtors, Prepayments, and Deposits   30,096 
Cash at Banks   5,954,369 
C/A – FXIFY   5,985 
Total assets:  $44,589,120 
Liabilities:     
Trade Creditors   91,268 
Client Money Liabilities – Retail (7)   618,443 
Client Money Liabilities – TTCA (7)   12,432,686 
C/A – Shareholders   50,000 
C/A – Intercompany (payable)   240,645 
C/A – Alchemy DMCC (8)   19,933,099 
Other Payables, Rebates, Accruals, and Sundry   278,917 
Total liabilities  $33,645,058 
Net assets (A)   10,944,062 
Non-Controlling Interest, 0.1% of Net Assets (B)   10,944 
Consideration paid, $2,000,000 cash (C)   2,000,000 
APIC – Capital Contribution (A) – (B) – (C)  $8,933,118 

 

(1) Plant and machinery are recorded at historical cost, net of accumulated depreciation, as carried on AIL’s books at the Acquisition Date. No fair value adjustment has been applied.
   
(2) Liquidity provider accounts represent net balances held with third-party liquidity providers in connection with AIL’s FX and CFD trading operations.
   
(3) Current account receivable from Alchemy Capital Markets Ltd (ACM), a related-party affiliate, reflecting intercompany trading and operational balances at book value.
   
(4) Current account receivable from Alchemy Markets EU, a related-party affiliate, reflecting intercompany trading and operational balances at book value.
   
(5) Net intercompany receivables represent amounts due from other entities within the consolidated group, recorded at carrying value and eliminated upon consolidation.
   
(6) Balances held with payment gateway providers represent client deposits and settlement amounts in transit.
   
(7) Client money liabilities represent net trading deposits placed with AIL by clients for FX, CFD, and other investment activities. Retail client funds and professional/TTCA client funds are presented separately in accordance with applicable regulatory requirements.
   
(8) Current account payable to Alchemy DMCC, a related-party affiliate. This balance is included in the Company’s consolidated related-party disclosures. At December 31, 2025, this balance had increased to $25,512,642.