{"url_path":"/sec/fdct/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 **","topic":"sec","document":{"doc_type":"10-Q/A","doc_date":"2026-06-08","source_url":"https://www.sec.gov/Archives/edgar/data/1722731/0001493152-26-027765-index.html","accession_number":"0001493152-26-027765","cik":"0001722731","ticker":"FDCT","issuer_name":"FDCTECH, INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1722731/0001493152-26-027765-index.html","primary_entity_key":"0001722731","primary_entity_name":"FDCTECH, INC."},"word_count":1085,"has_tables":true,"body_markdown":"**ITEM 1.**\n**LEGAL PROCEEDINGS.**\n\n \n\nOn December 23, 2023, the Company received legal correspondence\nand supporting documents addressed to APSI Holdings Limited (formerly Alchemy Prime Holdings Limited) and FDCTech, Inc. The nature of\nthe legal claims or disputes has not been fully specified in the received correspondence. The Company is assessing the situation and will\nrespond appropriately. While management cannot predict the outcome of these matters, any adverse resolution could potentially have a material\nimpact on the Company’s business, financial condition, and results of operations. The Company intends to defend its interests vigorously\nand will provide further updates as material developments arise.\n\n \n\n*Asher Alkoby, et\nal. v. FDCTech, Inc.*\n\n \n\nOn December 9, 2024,\nAsher Alkoby and other former shareholders of Alchemy Markets Ltd. (“AML”), the Company’s Malta-incorporated broker-dealer\nsubsidiary acquired in June 2023, filed a claim against the Company in the London Circuit Commercial Court (Claim No. LM-2024-000330).\nThe claimants seek approximately $1.02 million in amounts they allege are owed under the Share Sale Agreement, together with rectification\nof the agreement to render it legally enforceable. Following completion of the acquisition, the Company identified anti-money laundering\ndeficiencies at the subsidiary that had resulted in a 2019 administrative fine by the Malta Financial Intelligence Analysis Unit (“FIAU”),\nas well as undisclosed loans taken by the previous shareholders from the subsidiary that had not been repaid, resulting in net capital\nlower than disclosed during negotiations. Based on these findings, the Company withheld the final payment otherwise due to the sellers.\nThe Company has filed a counterclaim seeking a declaration that the Share Sale Agreement is ineffective and unenforceable and repayment\nof $915,000 previously paid to the sellers. The Company served its Defense and Counterclaim on May 9, 2025. Subsequent to March 31, 2025,\non October 17, 2025, the Court granted the claimants permission to amend their claim to include a third claimant. A Costs and Case Management\nConference took place on November 17, 2025, at which directions were given for trial, which is scheduled for November 2026. The Company\nbelieves it has meritorious defenses and counterclaims and intends to defend the action vigorously. Due to the inherent uncertainty of\nlitigation, the Company cannot predict the outcome of this matter with certainty.\n\n \n\n*Alchemy Markets\nLtd. v. Il-Korp għall-Analizi ta’ Informazzjoni Finanzjarja (Ref: 104/2023)*\n\n \n\nOn October 19, 2023,\nAML filed an appeal in the Court of Appeal (Inferior Jurisdiction) in Malta challenging an administrative penalty of €419,997 and\na follow-up directive imposed by the FIAU on September 23, 2023. The FIAU penalty was based on a compliance examination conducted between\nNovember 25, 2019 and December 5, 2019, prior to the Company’s acquisition of AML and under different ownership and control of\nthe subsidiary. The appeal challenges the decision-making process leading to the penalty and the law on which it was based, asserts that\nthe penalty is arbitrary and excessive, and contends that certain aspects of the decision are unfounded in law and fact. The case is\nin the evidentiary production stage pertaining to the Company as appellant. Subsequent to March 31, 2025, a hearing was held on October\n24, 2025 for the Company to continue presenting evidence. The Court has scheduled an additional hearing for February 2, 2026 for the\nFIAU to cross-examine the Company’s witnesses, following which the matter will be adjourned for final legal submissions. The Company\nbelieves it has meritorious grounds for the appeal and intends to pursue it vigorously.\n\n \n\n*Alchemy Markets\nLtd. v. L-Avukat tal-Istat u Il-Korp għall-Analizi ta’ Informazzjoni Finanzjarja (Ref: 159/2024)*\n\n \n\nOn April 2, 2024, AML\nfiled a constitutional challenge before the First Hall Civil Court (Constitutional Jurisdiction) in Malta relating to the same September\n23, 2023 FIAU decision described above. The application challenges (i) the composition of the FIAU and its enabling law; (ii) the FIAU’s\ndecision-making processes as allegedly breaching the Company’s fundamental right to a fair hearing; and (iii) the imposition of\nan administrative penalty of a penal nature without adjudication by an independent court, in alleged breach of the Constitution of Malta.\nThe Company seeks to have the FIAU decision set aside in its entirety. A first procedural hearing took place on May 7, 2024, and the\nCompany has presented its evidence in support of the claim. The First Hall Civil Court (Constitutional Jurisdiction) has, in prior judgments\ninvolving other subject persons, characterized FIAU administrative penalties as more akin to penal sanctions and quashed FIAU decisions\non that basis, although certain of those judgments have been overturned on appeal. The Company considers that the principles underpinning\nsuch prior judgments are applicable to its case.\n\n \n\n*FDCTech, Inc. v.\nIntelligenceline.com, Fintelegram.com, et al.*\n\n \n\nSubsequent to March\n31, 2025, the Company filed a complaint in the Superior Court of California, County of Orange, against the operators of the websites\nIntelligenceline.com, Fintelegram.com, and Criticalintel.com. The complaint alleges that the defendants published false and defamatory\nstatements accusing the Company of fraud, illegal conduct, and regulatory violations, causing reputational and financial harm including\nlost business opportunities, and engaged in an extortion scheme by demanding payment for the removal of defamatory content. The complaint\nasserts claims for defamation per se, defamation per quod, trade libel, and false light, and seeks damages and injunctive relief. As\nof the date of this filing, the complaint had not yet been served. A hearing took place on December 15, 2025 on the Company’s motion,\nfollowing which the court instructed the Company to conduct an investigation as to the beneficial owner of Intelligenceline.com. The\nCompany is the plaintiff in this matter.\n\n \n\nThe Company records\na liability for loss contingencies when management, in consultation with legal counsel, determines that a loss is probable and the amount\ncan be reasonably estimated. As of March 31, 2025, no amounts have been accrued for the matters described above, as management has determined,\nin consultation with counsel, that a loss is not probable or, where reasonably possible, cannot be reasonably estimated. The Company\nis unable to estimate the reasonably possible loss or range of loss, if any, in excess of amounts accrued for the matters described above.\nThe Company believes it has meritorious defenses and counterclaims in the matters in which it is a defendant and intends to defend them\nvigorously; however, litigation is inherently uncertain, and the Company cannot predict the outcomes with certainty.\n\n \n\n13\n\n \n\n \n\nOther than the matters\ndescribed above, neither the Company nor any of its subsidiaries is a party to, nor is any of their property the subject of, any material\npending legal proceedings other than ordinary routine litigation incidental to the business."}