MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We are an operating company which has experienced losses since our inception. Our sources of cash to date have been capital invested by shareholders and venture capital investors/lenders. On March 6, 2022, the Company acquired CM Tech and received $1,207,168 in revenue from the new operation through to the end of December 31, 2022.

On March 6, 2022, pursuant to a Securities Purchase Agreement (the "SPA"), Powerdyne International, Inc. (the "Company"), acquired all of the issued and outstanding membership interests of Creative Motion Technology, LLC, a Massachusetts limited liability company, (the "Membership Interests"). The Membership Interest is owned by Mr. James F. O'Rourke, the principal owner and sole director and officer of the Company. The purchase price paid by the Company was 2,000,000 shares of its Series A Preferred Stock valued at $1,500,000.

Creative Motion Technology, LLC ("CM Tech") is a small New England based motor manufacturer founded in 2004 and has been in business for over 17 years. CM Tech's management has over 60 years of design and manufacturing expertise, specializing in the design and custom building of industrial servomotors both brush and brushless motor designs. CM Tech's current market focus is on the niche motor demands for low volume, high-quality cost-effective motors which are primarily used in industrial robotics for the semiconductor manufacturing industry. The motors that CM Tech currently has in production primarily provide the X, Y, and Z axis articulation in factory automation robots.

Included with CM Tech acquisition is Frame One, which is a custom picture framing shop located in North Reading, MA. Frame One has been in business since 2006 and brings with it a strong client base consisting of local schools, colleges, artist guilds, artists, interior decorators/designers, museums, photographers, art galleries and theatres.

The foregoing description of the SPA does not purport to be complete and is qualified in its entirety by reference to the complete text of the document, which is filed as an exhibit to this report and is incorporated herein by reference.

The issuance of the 2,000,000 shares of Series A Preferred Stock pursuant to the Securities Purchase Agreement were made in reliance on the exemption from registration afforded under Section 4(2), of the Securities Act of 1933, as amended, and/or Rule 506 of Regulation D promulgated thereunder. Such offers and sale were not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the Seller/Investor in connection with the issuance by the Company of the Shares.

The following discussion contains forward-looking statements, as discussed above. Please see the sections entitled "Forward-Looking Condensed Statements" and "Risk Factors" for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.

Reclassifications

Certain amounts in the prior period have been reclassified to conform to the current period presentation. These reclassifications have no material effect on the reported financial results.

Results of Operations - The three months ended September 30, 2025, compared to the three months ended September 30, 2024:

Revenues

During the three months ended September 30, 2025, we generated $270,316 in revenue, and during the three months ended September 30, 2024, we generated $243,749 in revenue. There has been an overall slowdown due to the ongoing tariff uncertainty. Although management expects revenues to increase for CM Tech through the end of 2025.

Cost of Revenues

During the three months ended September 30, 2025, we incurred $143,315 in cost of revenues, and during the three months ended September 30, 2024, we generated $145,901 in cost of revenues.

Gross Profit

During the three months ended September 30, 2025, we generated $127,001 in gross profits, and during the three months ended September 30, 2024, we generated $127,848 in gross profit. Gross profit increased relatively in line with the increase in revenues.

Operating expenses

During the three months ended September 30, 2025, total operating expenses increased slightly to $147,431 from $115,026 for the three months ended September 30, 2024.

For the three months ended September 30, 2025, the Company had a net loss of $20,429 and for September 30, 2024, there was a profit of $12,821, respectively. The loss is due to an increase in expenses compared to the 2024 quarter for the same three-month period.

Results of Operations - The nine months ended September 30, 2025, compared to the nine months ended September 30, 2024:

Revenues

During the nine months ended September 30, 2025, we generated $872,135 in revenue, and during the nine months ended September 30, 2024, we generated $867,016 in revenue. Revenues increase by approximately $5,119 mostly in the second three months of 2025.

CM Tech generated $588,464 (nine months - September 30, 2024 - $588,464) in revenues during the nine months ended September 30, 2025, and Frame One generated $278,552 (nine months - September 30, 2024 - $278,552) in revenues during the same period ending.

Cost of Revenues

During the nine months ended September 30, 2025, we incurred $688,807 in cost of revenues, and during the nine months ended September 30, 2024, we incurred $641,393 in cost of revenues. The increase in cost of revenues was relatively consistent with the increase in revenue during the nine months ended September 30, 2025.

Gross Profit

During the nine months ended September 30, 2025, we generated $203,328 in gross profits, and during the nine months ended September 30, 2024, we generated $225,624 in gross profit.

Operating expenses

During the nine months ended September 30, 2025, total operating expenses increased to $435,022 from $331,841 for the nine months ended September 30, 2024.

For the nine months ended September 30, 2025, the Company had a net loss of $231,694 and for September 30, 2024, there was a loss of $106,217, respectively.

Liquidity and Capital Resources

As of September 30, 2025, and December 31, 2024, we had working capital deficits of $485,238 and $253,543, respectively.

For the nine months ended September 30, 2025, we had a $14,304 decrease in cash from the year-ended December 31, 2024. During the comparative nine months ended September 30, 2024, we had a $41,482 decrease.

		For the nine				For the nine
		months ended				months ended
		September 30, 2024				September 30, 2024
Operating Activities			(187,300	)			(112,236	)
Investing Activities			-				-
Financing Activities			172,996				70,754

The tariff uncertainty has slowed collections from our largest clients and sales orders. We have offset this slowdown in cash flow from operations by utilizing our line of credit, obtaining financing from related parties and by seeking third party financing. The Company has added new customers that will commence orders in early 2026 and is working to raise additional capital from third parties. The Company is working on identifying acquisition targets that can increase future cash flows.

On May 30th, 2024, CM Technology, LLC ("CM Tech") a wholly owned subsidiary of the Company entered into a line of credit with a financial institution that has national scope through one of their local branches. The line of credit is for a maximum of $170,000 which is collateralized and has a security interest in the deposit account or cash, inventories and trade accounts receivable of CM Tech and is due and payable on demand. Our CEO has personally guaranteed the line of credit. The Company paid a $450 documentation fee. On March 12, 2025, CM Tech was approved for an additional increase in the line of credit to $200,000. The additional increase in the line of credit does not change any terms from the original agreement as of May 30th, 2024. As of September 30, 2025, the Company has drawn $215,950 to finance working capital. The Company is not in default on the line of credit. The Company accrues monthly interest on outstanding balances at 2.5% plus the prime interest rate.

As of September 30, 2025, CM Tech has cash of $22,589, trade accounts receivable at $89,478 and inventories of $35,815 collateralized against the line of credit creating a security interest.

On June 23, 2025, Powerdyne International Inc. ("Powerdyne International Inc." or the "Company") (OTCPK: PWDY) entered into an investment agreement (the "Agreement") with GHS Investments, LLC (the "Investor"), whereby the Investor has agreed to invest up to $10,000,000 to purchase shares of our common stock. GHS Investments LLC is a Nevada limited liability company, with offices at 420 Jericho Turnpike, Suite 102, Jericho, NY 11753 (the "Investor").

Subject to the terms and conditions of the Investment Agreement and Registration Agreement, we may, in our sole discretion, deliver a put notice to the Investor which states the dollar amount which we intend to sell to the Investor on a certain date. The amount that we shall be entitled to sell to Investor shall be equal to two hundred percent (200%) of the average daily volume (U.S. market only) of the common stock for the ten (10) trading days prior to the applicable notice date so long as such amount does not exceed a calculated dollar amount per every 10 days of $500,000. The minimum amount shall be equal to $10,000.

In connection with the Agreement, we also entered into a registration rights agreement dated June 23, 2025, whereby we agreed to file a Registration Statement on Form S-1 with the Securities and Exchange Commission within thirty (30) days of the date of the registration rights agreement and to have the Registration Statement declared effective by the Securities and Exchange Commission within ninety (90) days after we have filed the Registration Statement.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is deemed by our management to be material to investors.

Recent Accounting Pronouncements

Refer to Note 3 of our condensed consolidated financial statements for recent accounting pronouncements.