FDCTech, Inc. disclosed on June 23 that its board of directors has concluded investors should no longer rely on the company's unaudited quarterly financial statements for the first three quarters of 2024. This expands a non-reliance determination the company first reported on June 3, which covered its audited full-year 2024 results.
What triggered the expanded warning
The company's new auditor, LAO Professionals, was hired in April 2025 after FDCTech dismissed its previous auditor, Olayinka Oyebola & Co., following that firm's designation as a Prohibited Service Provider by OTC Markets Group. During LAO's re-audit of the 2024 financials, management identified a series of accounting errors that led the board to conclude on June 3 that the audited 2024 annual statements were unreliable.
The SEC's Division of Corporation Finance subsequently asked the company whether those same errors also affected its 2024 quarterly filings. After evaluating the question with LAO, management and the board determined on June 23 that they did. The affected periods are the quarters ending March 31, June 30, and September 30, 2024.
The nature of the errors
The filing lists eight categories of errors that flowed through the 2024 interim periods, including:
- Incorrectly recorded general and administrative expenses
- Client funds from two subsidiaries, Alchemy Prime Limited and Alchemy Markets Ltd., mistakenly included in the company's cash balances
- Related party cash credits misclassified as cash on hand rather than as advances
- A subscription receivable recorded as a current asset instead of as a reduction to equity
- Intercompany elimination errors within related party receivables
- 500,000 shares of common stock issued in October 2021 that were omitted and must be recognized retroactively
- Client funds held by regulated brokerage subsidiaries not segregated as restricted cash
- Errors in foreign currency translation adjustments and the allocation between controlling and noncontrolling interests
Where to find corrected numbers
FDCTech will not amend the original 2024 quarterly reports. Instead, the restated figures for those periods appear as comparative prior-period information in the company's amended quarterly reports for the corresponding periods in 2025. Investors should rely on those amended 2025 filings, not the originally published 2024 quarterly numbers.
Internal control weaknesses
Management has identified material weaknesses in the company's internal control over financial reporting in connection with the restatements. Details on those weaknesses and the company's remediation plan are included in the amended annual and quarterly reports.
The board, which serves as the company's audit committee, has discussed the non-reliance determination with LAO. The company has also notified its former auditor, Olayinka, of the expanded non-reliance conclusion.