FDCT 10-K & 10-Q changes, risk factors and insider trading

Founded in January 2016 as a back-office technology solution provider, FDCTech has transformed into a diversifiedcomprehensive, globalend-to-end fintechtrading platform offering through strategicforeign acquisitions.exchange (FX), contracts for difference (CFDs), equities, bonds, and wealth management services. Our growth trajectory includes the acquisitions of AD Advisory Services Pty Ltd. (2021), Alchemy Markets Ltd. (2022-20232022–2023), Alchemy Prime Limited (2023), and, most recently, Alchemy International Ltd. (2025), and Alchemy Markets (Cayman) Ltd. (2026), together with the establishment of Alchemytech Ltd., now T.I.C.G. Integrated Solutions Ltd. (2024), and Xoala Asia (2025), expanding our global footprint across Australia, Malta, the United Kingdom, Cyprus, Seychelles, Mauritius, and Mauritius.the Cayman Islands.

Technology and Software Development: Through FDCTech and T.I.C.G. Integrated Solutions Ltd. (formerly Alchemytech Ltd.) (Cyprus), we develop and license our proprietary Condor Trading Technology suite, including the Condor Pro Multi-Asset Trading Platform and Condor Risk Management back-office system.

During the three months ended MarchJune 31,30, 2026, the Company generated total revenue of $15,214,492,$17,472,536, an increase of $8,252,944$12,052,745 (140.9%222.4%) over total revenue of $5,976,948$5,419,791 for the three months ended MarchJune 31,30, 2025. During the six months ended June 30, 2026, the Company generated total revenue of $32,687,028, an increase of $21,290,289 (186.8%) over total revenue of $11,396,739 for the six months ended June 30, 2025.

The full-quarter contribution from AIL during the three and six months ended MarchJune 31,30, 2026 (compared with no contribution during the three and six months ended MarchJune 31,30, 2025) accounted for the substantial majority of the year-over-year increase in the Margin Brokerage segment. The Technology and Software Development segment also contributed to the increase, while the Wealth Management segment was substantially flat compared with the prior-year period. The Company also benefited from continued operating leverage on a substantially fixed cost base.

Financial Condition as of MarchJune 31,30, 2026

As of MarchJune 31,30, 2026, the Company had total assets of $72,195,266,$55,089,794, compared to $63,771,196$64,051,886 as of December 31, 2025, representing ana increase decrease of $8,424,070,$8,962,092, or approximately 13.2%.14.0%. Total assets at MarchJune 31,30, 2026, were comprised primarily of cash and cash equivalents of $36,891,541,$18,184,787 and restricted cash (client funds, segregated) of $7,699,708, related party receivables of $30,154,645,$21,783,493, accounts receivable (net of allowance for doubtful accounts) of $358,932, $177,775, prepaid expenses (current and non-current) of $535,408,$541,225, capitalized software (net) of $1,578,353, $1,879,461, acquired intangible assets (net) of $1,250,397,$1,280,522, right-of-use lease assets of $668,214,$766,338, property and equipment (net) of $187,657,$180,424, and other current and non-current assets aggregating $570,019.$2,596,061.

As of MarchJune 31,30, 2026, the Company had total liabilities of $38,582,773,$15,779,315, compared to $41,360,599$41,360,598 as of December 31, 2025, representing a decrease of $2,777,826,$25,581,283, or approximately 6.7%.61.9%. Total liabilities at MarchJune 31,30, 2026 were comprised primarily of customerclient funds payable of $28,339,255,$7,699,708, business acquisition loan of $2,350,000, related party advances payable of $3,296,890,$1,931,797, accrued expenses to related parties of $997,259,$1,152,784, other businesscurrent acquisition loanliabilities of $2,350,000, accounts payable of $502,087,$831,415, operating lease liabilities (current and non-current) of $668,214,$482,055, accounts payable of $357,840, line of credit of $297,862, deferred tax liabilities of $191,469, financial liabilities at fair value through profit and loss of $172,968, income tax payable of $170,382, and the SBA loan and accrued non-current interest aggregating $147,202, deferred tax liabilities of $372,339, and other current liabilities of $1,909,527.$141,035.

The $2,777,826 $25,581,283 net decrease in total liabilities during the threesix months ended MarchJune 31,30, 2026 was primarily attributable to: (i) a decrease in related party advances payable of $25,900,580, $27,265,673, principally reflecting the settlement of AIL’s net advances payable to Alchemy DMCC through a combination of cash repayments and non-cash netting arrangements as further described in Note 5; (ii) a decrease in other current liabilities of $1,301,578; and (iii) a decrease in deferred tax liabilities of $186,506; partially offset by (iiiv) an increase in customerclient funds payable of $22,525,367, $1,885,820, reflecting growth in customer trading activity and customer deposits held by AIL in connection with the expansion of its brokerage operations; (iiiv) an increase in accrued expenses to related parties of $464,972,$620,497, primarily representing accrued executive compensation; and(vi) (iv) an increase in accounts payable and line of credit of $491,449$378,138 in the aggregate, reflecting normal operating activity.activity; and (vii) the recognition of financial liabilities at fair value through profit and loss of $172,968 and income tax payable of $170,382.

As of MarchJune 31,30, 2026, total stockholders’ equity attributable to FDCTech, Inc. stockholders was $33,568,694,$39,313,273, compared to $22,377,274 $22,657,965 as of December 31, 2025, representing an increase of $11,191,420,$16,655,308, or approximately 50.0%.73.5%. Total stockholders’ equity, including noncontrolling interests, was $33,612,493$39,310,479 as of March 31,June 30, 2026, compared to $22,410,597$22,691,288 as of December 31, 2025. The components of stockholders’ equity as of MarchJune 31,30, 2026 consisted of preferred stock and common stock at par value, additional paid-in capital of $28,199,590,$25,910,095, additional paid-in capital relating to Series B Preferred Stock of $3,344,063, subscription receivable of $(8,000,000), accumulated other comprehensive loss income of $(2,427),$78,321, and accumulated surplus of $9,984,473.$17,979,684.

The $11,191,420 $16,655,308 increase in stockholders’ equity attributable to FDCTech, Inc. stockholders during the threesix months ended MarchJune 31,30, 2026 was primarily attributable to: (i) net income attributable to FDCTech, Inc. shareholders of $6,863,678$14,578,197 for the period; and (ii) an increase in additional paid-in capital of $4,643,653 $2,295,047 arising from a transaction between entities under common control accounted for in accordance with ASC 805-50, Transactions Between Entities Under Common Control, with the residual change reflecting movement in accumulated other comprehensive loss during the period. No new shares of the Company’s common stock or preferred stock were issued during the three and six months ended MarchJune 31,30, 2026.

Working capital, defined as total current assets less total current liabilities, was $30,169,554$33,063,252 as of MarchJune 31,30, 2026, compared to $14,883,171 $17,831,410 as of December 31, 2025, representing an increase of $15,286,383,$15,231,842, or approximately 102.7%.85.4%. The increase in working capital reflects the combined effect of the increase in cash and cash equivalents and the settlement of the December 31, 2025, related party advances payable balance described above, partially offset by the increase in customer funds payable during the period. The Company’s improved working capital position, together with cash generated from operations, is expected to support the Company’s ongoing operations and growth initiatives for at least the next twelve months.

During the three and six months ended MarchJune 31,30, 2026, the Company recorded a net increase to additional paid-in capital of $4,643,653$2,295,047 in connection with the finalization of the consolidation entries relating to the acquisition of AIL, which was completed on November 11, 2025. The adjustment reflects the difference between the consideration transferred by the Company in connection with the AIL acquisition and AIL’s historical carrying value of net assets as of the acquisition date, the determination of which was finalized during the three and six months ended MarchJune 31,30, 2026. No new shares of the Company’s common stock or preferred stock were issued in connection with this adjustment, and the adjustment had no effect on the Company’s results of operations, cash flows, or total stockholders’ equity in the aggregate during the three and six months ended MarchJune 31,30, 2026, other than as reflected within the components of stockholders’ equity.

The Company’s acquisition of AD Advisory Services Pty Ltd. (“ADS”), an Australia-incorporated subsidiary, in which the Company acquired a 51% controlling interest, was not a transaction between entities under common control. The ADS acquisition was effected at arm’s length with an unrelated counterparty and was accounted for as a business combination under ASC 805-10, Business Combinations, using the acquisition method. Accordingly, the assets and liabilities of ADS were recognized at their estimated fair values as of the acquisition date, and acquired intangible assets, including goodwill (carrying value of $1,250,397$1,280,522 wasat June 30, 2026), were recognized recognized in connection with the ADS acquisition, representing the excess of the consideration transferred over the fair value of the identifiable identifiable net assets acquired. The noncontrolling interest in ADS was measured at the proportionate share of the fair value of the identifiable identifiable net assets at the acquisition date. No adjustment to additional paid-in capital was recognized in connection with the ADS acquisition.

As of December 31, 2025, the Company had total assets of $63,771,196,$64,051,886, comprised primarily of cash, cash equivalents, and restricted cash equivalents of $17,669,749, related party receivables of $37,477,356,$40,090,051, accounts receivable, net of $3,902,316,$188,415, capitalized software (net) of $1,480,246, and other balance-sheet items as further described in the Company’s Annual.

Total liabilities at December 31, 2025, were $41,360,599,$41,360,598, comprised primarily of related party advances payable of $25,900,580$29,197,470 (of which were$27,265,673 was settled during the three and six months ended MarchJune 31,30, 2026 — see Note 5 to the unaudited condensed consolidated financial statements); accounts payable, accrued expenses, and other current liabilities; the SBA loan; the business acquisition loan; and lease and other obligations.

ThreeRESULTS MonthsOF EndedOPERATIONS Marchthree and 31,six months ended June 30, 2026, compared with Threethree Monthsand Endedsix Marchmonths 31,ended June 30, 2025

Total revenue increased to $15,214,492 for the three months ended March 31, 2026, compared to $5,976,948$17,472,536 for the three months ended MarchJune 31,30, 2026, compared to $5,419,791 for the three months ended June 30, 2025, an increase of $12,052,745, or approximately 222.4%. For the six months ended June 30, 2026, total revenue was $32,687,028, compared to $11,396,739 for the six months ended June 30, 2025, an increase of $9,237,544,$21,290,289, or approximately 154.6%. 186.8%. The growth was driven primarily by the Margin Brokerage segment, which contributed $12,009,418$14,264,990 of total revenue for the three months ended MarchJune 31,30, 2026, compared to $3,628,349 $2,587,906 for the comparable prior-year period, representing an increase of $8,381,069,$11,677,084, or approximately 451.2%, and $26,274,408 for 231.0%.the six months ended June 30, 2026, compared to $6,216,255 for the comparable prior-year period, representing an increase of $20,058,153, or approximately 322.7%. The increase in Margin Brokerage revenue reflects the full-quarter contribution of Alchemy International Ltd. (“AIL”) following the closing of the AIL acquisition on November 11, 2025 (with the change of control approved by the Seychelles Financial Services Authority on October 29, 2025), together with the continuing operations of the Company’s other regulated brokerage subsidiaries, subsidiaries, Alchemy Markets Ltd. (“AML”) in Malta and Alchemy Prime Ltd. (“APL”) in the United Kingdom.

Technology and software revenue was $1,639,222$1,393,442 for the three months ended MarchJune 31,30, 2026, compared to $813,747$1,178,215 for the comparable prior-year period, representing an increase of $215,227, or approximately 18.3%, and $3,032,664 for the six months ended June 30, 2026, compared to $1,991,962 for the comparable prior-year period, representing an increase of $825,475, $1,040,702, or approximately 101.4%,52.2%, in each case reflecting the expansion of the Company’s technology and platform services to its expanded broker-dealer client base. Wealth Management revenue was $1,565,852 $1,814,104 for the three months ended MarchJune 31,30, 2026, compared to $1,534,852$1,653,670 for the comparable prior-year period, representing an increase of $31,000,$160,434, or approximately 9.7%, and $3,379,956 for the six months ended June 30, 2026, compared to $3,188,522 for the comparable prior-year period, representing an increase of $191,434, or approximately 2.0%, and was substantially consistent with the prior-year period.6.0%.

Cost of sales was $3,583,338 for the three months ended March 31, 2026, compared to $3,117,389$5,598,307 for the three months ended MarchJune 31,30, 2026, compared to $3,114,093 for the three months ended June 30, 2025, an increase of $2,484,214, or approximately 79.8%. For the six months ended June 30, 2026, cost of sales was $9,181,645, compared to $6,231,482 for the six months ended June 30, 2025, an increase of $465,949,$2,950,163, or approximately 14.9%. 47.3%. The increase in cost of sales principally reflects higher liquidity-provider, payment-processing, and clearing costs incurred in support of the Margin Brokerage and Wealth Management segments. The rate of increase in cost of sales was substantially lower than the rate of increase in revenue, principally as a result of (i) operating leverage on the Margin Brokerage segment’s fixed-cost base relative to substantially higher transaction volumes, and (ii) the run-offreclassification, duringin the periodrestated comparative period, of certainAlchemytech Ltd. cost of sales from the Technology & Software segment to the Brokerage segment, which reduced technology cost of sales recognizedin in theboth comparableperiods prior-year period.presented.

Gross profit was $11,631,154 for the three months ended March 31, 2026, compared to $2,859,559$11,874,229 for the three months ended MarchJune 31,30, 2025,2026, ancompared increaseto of $8,771,595, or approximately 306.7%. Consolidated gross margin was approximately 76.4%$2,305,698 for the three months ended MarchJune 31,30, 2025, an increase of $9,568,531, or approximately 415.0%. For the six months ended June 30, 2026, gross profit was $23,505,383, compared to $5,165,257 for the six months ended June 30, 2025, an increase of $18,340,126, or approximately 47.8%355.1%. Consolidated gross margin was approximately 68.0% and 42.5% for the three months ended MarchJune 31,30, 2026, and 2025, respectively, and approximately 71.9% and 45.3% for the six months ended June 30, 2026, and 2025, respectively, principally reflecting the change in revenue mix toward the higher-margin Margin Brokerage segment.

The increase in general and administrative expense principally reflects additional compliance, audit, legal, and personnel-related expenses to support the Company’s expanded operating footprint following the AIL acquisition, together with professional fees and other costs incurred in connection with the Company’s contemplated listing of its common stock on a national securities exchange and the related proposed public offering. The increase in sales and marketing expense for the six-month period reflects expanded promotional and marketing activities in support of the Company’s broader brokerage and technology client base, as further described in Note 2.

Operating income was $6,855,309 for the three months ended March 31, 2026, compared to operating income of $404,253$7,383,880 for the three months ended MarchJune 31,30, 2026, compared to an operating loss of $(166,545) for the three months ended June 30, 2025, representing an improvement of $7,550,425. For the six months ended June 30, 2026, operating income was $14,242,776, compared to operating income of $241,300 for the six months ended June 30, 2025, representing an increase of $6,451,056. $14,001,476. The increase in operating income reflects the increase in gross profit described above, partially offset by the increase in total operating expenses described above.

Total other income (expense), net, was net other income of $14,611$292,125 for the three months ended MarchJune 31,30, 2026, compared to net other expense of $(258,911) for the three months ended June 30, 2025, an improvement of $551,036. For the six months ended June 30, 2026, total other income (expense), net, was net other income of $306,736, compared to net other expense of $(299,705352,634) for the six months ended June 30, 2025, an improvement of $659,370. For the three months ended MarchJune 31, 2025,30, an2026, improvement of $314,316. Totaltotal other income (expense), net, for the three months ended March 31, 2026, consisted of other interest income (expense) of $132,492$72,848 (compared to $4,483$10,986 for the comparable prior-year period) and other income (expense) of $(117,881)$219,277 (compared to $(304,188269,897) for the comparable prior-year period). For the six months ended June 30, 2026, it consisted of other interest income of $205,296 (compared to $15,469) and other income of $101,440 (compared to $(368,103)). The change principally reflects foreign exchange gains and losses on transactions denominated in currencies other than the functional currency of the applicable subsidiary, interest income on operating cash balances, and other miscellaneous items.

As of MarchJune 31,30, 2026, the Company had cash, cash equivalents, and restricted cash equivalents of $36,891,541,$25,884,495, compared to $17,669,749 as of December 31, 2025, representing an increase of $8,214,746, or approximately 46.5%. Working capital, defined as total current assets less total current liabilities, was $33,063,252 as of June 30, 2026, compared to $17,831,410 as of December 31, 2025, representing an increase of $19,221,792, or approximately 108.8%. Working capital, defined as total current assets less total current liabilities, was $30,169,554 as of March 31, 2026, compared to $14,883,171 as of December 31, 2025, representing an increase of $15,286,383,$15,231,842, or approximately 102.7%.85.4%. The increase in working capital principally reflects the settlement of $25,900,580$27,265,673 of related party advances payable during the threesix months ended MarchJune 31,30, 2026, together with the continued generation of operating cash flow, partially offset by an increase in customer funds payable in connection with the expansion of the Company’s brokerage operations.

Net cash providedused byin operating activities was $40,727,261 $(21,138,011) for the threesix months ended MarchJune 31,30, 2026, compared to net cash used provided byin operating activities of $166,036$(2,819,517) for the threesix months ended March 31,June 30, 2025. The increase in netNet cash providedused byin operating activities for the six months ended June 30, 2026 principally reflects (i) net income of $6,869,920$14,549,512 for the three six months ended MarchJune 31,30, 2026 (compared to $104,548a net loss of $(111,334) for the comparable prior-year period), which included non-cash related party income; (ii) an increase in customerrelated party receivables of $(36,532,537), presented excluding the non-cash settlement arrangements described in Note 5; (iii) an increase in client funds payable of $22,525,367, $1,885,820, reflecting the expansion of the Company’s brokerage operations and customer trading activity at Alchemy International International Ltd.; (iii) a decrease in related party receivables of $7,322,711, principally reflecting the net effect of cash collections and non-cash netting arrangements with related parties as further described in Note 5; (iv) a decrease in the fair value of trading positions for the firm firm, net of $1,111,487,financial liabilities at fair value, of $1,267,725, reflecting the closing-out of certain trading positions in the ordinary course; (v) a decrease in tax receivables from subsidiaries of $2,615,533; and (vi) an increase in accrued expenses to related parties of $464,972$620,497; (vi) a net decrease in trade and tax receivables and income tax payable of $275,609; and (vii) an increase in accounts payable payable of $335,875$191,628; partially offset by (viiviii) an increase in accrued income of $2,017,206 and a decrease in other current liabilities of $490,392 and an increase in gross accounts receivable of $170,517.$1,301,578.

The Company’s cash, cash equivalents, and restricted cash equivalents increased by $19,221,792$8,214,746 during the threesix months ended MarchJune 31,30, 2026, comprising net cash providedused byin operating activities of $40,727,261,$(21,138,011), net cash provided byused in investing activities of $4,547,098,$(472,602), net cash usedprovided inby financing activities of $(25,736,656), and$35,308,397, the effect of exchange rate changes on cash of $(315,911217,936)., Casha $(7,432) change in the noncontrolling interest share of subsidiary net assets, and the $(5,257,670) non-cash assignment of the Company’s liquidity-provider balance previously included within cash and cash equivalentsequivalents. Cash, cash equivalents, and restricted cash were $36,891,541$25,884,495 as of MarchJune 31,30, 2026, compared to $17,669,749 as of December 31, 2025.