FDCTECH, INC. (FDCT) stock intrinsic value fair value estimate & owner earnings analysis

FDCTech runs online foreign-exchange, metals and CFD brokerage (trading with retail and institutional clients as the counterparty), plus a smaller wealth-management arm and a software business that licenses its Condor trading platform. Revenue in 2025 was $34.96 million: $23.43 million from brokerage, $6.43 million from wealth management and $5.10 million from technology. Revenue has risen every year, from $6.45 million in 2022 to $12.75 million in 2023, $26.94 million in 2024 and $34.96 million in 2025, largely through purchases of licensed brokerages from the company's controlling shareholder, Gope Kundnani. What changed the picture: on October 29, 2025 the company bought Alchemy International Ltd, a Seychelles-licensed securities dealer, for $2 million in cash from an entity wholly owned by Mr. Kundnani. The company says Alchemy International contributed about $6.28 million of profit in its first two months. Net income for 2025 was $5.78 million, so almost all of it came from that one acquired business, and the rest of the company roughly broke even or lost money. Profit in the first half of 2026 was $14.58 million ($6.87 million in the first quarter and $7.71 million in the second) on revenue of $32.69 million. Why we are cautious about those profits. First, Alchemy International's business runs largely through trading relationships with Alchemy Capital Markets and Alchemy DMCC, companies tied to the controlling shareholder. At December 31, 2025 it was owed $40.9 million by Alchemy Capital Markets and affiliates, and the company as a whole showed $37.5 million of related-party receivables against $29.2 million of related-party advances owed. Second, cash flow does not match profit: operating cash flow was negative $41.0 million in 2025 (mainly a $35.8 million increase in related-party receivables) and negative $21.1 million in the first half of 2026, even though profits were positive. Management says the receivables will be settled in 2026; we could not confirm from the filings we reviewed how the 2026 balances reconcile to the cash flow, so we did not treat the higher 2026 profit level as proven. Third, the 2025 annual report states that internal controls over financial reporting were not effective, the 2024 results were restated, and the 2025 annual report has been amended several times. Fourth, a 419,997 euro penalty imposed in 2023 by Malta's financial intelligence unit on Alchemy Markets is under appeal, which is small but shows the regulatory exposure of the business. Earlier annual reports carried a going-concern warning; for 2025 management concluded that resources are sufficient for at least twelve months. How we measured earnings. We started from cash flow from operations and removed the swings in receivables, customer money and related-party balances, because they are intercompany funding and client-money movements rather than earnings. We then subtracted stock-based pay and the ongoing part of capitalized software spending. That gives owner earnings of about $5.59 million for 2025 and $0.81 million for 2024, or roughly $0.046 and $0.007 per share on the roughly 122.8 million shares outstanding after the July 2026 one-for-100 reverse split and the conversion of the Series B preferred stock. A cross-check from net income plus depreciation and other non-cash items matches exactly. Per-share figures for both years are shown on today's share count so they can be compared. Earlier years are not comparable because the business was a tiny software company. The 2025 figure includes only two months of the acquired dealer, and small later amendments to the annual report were not all reflected in the detail. Bear case, about $0.08 per share. The profits earned through the related-party trading relationships continue for two more years at the 2025 level of $5.59 million a year and then stop, leaving the pre-acquisition business, which earned close to nothing. The evidence: the acquired dealer's income depends on counterparties controlled by one shareholder, with no contract we can point to that locks it in. Base case, about $0.43 per share. Earnings stay at the audited 2025 level of $5.59 million a year for ten years, with no growth, and then run off evenly over the following ten years. We do not credit the higher 2026 profits in the base case because their cash conversion is unconfirmed and they depend on related-party counterparties. We also credit no growth from new acquisitions (Alchemy Global, Xoala in Sweden), the planned Nasdaq or NYSE listing, or the technology segment, none of which is yet earning at scale. Year-one growth is assumed at zero: owner earnings grew about sevenfold from 2024 to 2025 because of the acquisition, which we do not extrapolate. The twenty-year run-off reflects a licensed brokerage with a four-year record of rising revenue but nothing we can point to that continues after that. Bull case, about $2.16 per share. The first-half 2026 pace holds: net income of $14.58 million for six months, annualized to $29.16 million and reduced by about $0.93 million a year of capitalized software spending, gives about $28.2 million a year for ten years, then the same ten-year run-off. Evidence: two consecutive quarters above $6.8 million after the acquired dealer's $6.28 million in its first two months, gross margin of 68.0% in the second quarter of 2026 versus 42.5% a year earlier, and a company-reported 81.6% of second-quarter revenue from brokerage. It is not a case for further growth. What the shares appear to be worth: between roughly $0.08 and $2.16, with the middle case at $0.43. The very wide range reflects real uncertainty about whether the profits are durable and collectable. The margin-of-safety price of $0.17 is about 60% below the middle case, because of the related-party dependence, the weak controls and the small size of the company. Share count also matters: a planned offering of about $20 million of new stock, which we have not modeled, would add shares, and 4.5 million Series A preferred shares carry 50 votes each. What would make this wrong: if the related-party balances are collected in cash and operating cash flow turns positive, the higher 2026 profit level deserves more weight; if the receivables prove uncollectable or the affiliated counterparties change their trading with the company, the bear case becomes the likely outcome.