Vertical Data Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS VERTICAL DATA INC. BALANCE SHEETS (UNAUDITED AS OF DECEMBER 31, 2025 AND AUDITED AS OF SEPTEMBER 30, 2025) As of December 31, As of September 30, 2025 2025 ASSETS Current assets: Cash $ 220,006 $ 372,718 Prepaid expenses 200,443 144,994 Total current assets 420,449 517,712 Property and equipment, net 1,367 1,457 Total assets 421,816 519,169 LIABILITIES AND EQUITY Current liabilities: Accrued liabilities $ 354,264 $ 252,058 Other Current Liabilities 5,000 - Total current liabilities 359,264 252,058 Total liabilities 359,264 252,058 Equity: Common stock, $ 0.0001 par value, 100,000,000 shares authorized; 9,804,362 and 41,193,052 shares issued and outstanding at December 31, 2025 and September 30, 2025, respectively. 980 4,119 Additional paid in capital 4,884,884 4,433,669 Accumulated deficit ( 4,823,312 ) ( 4,170,677 ) Total equity (deficit) 62,552 267,111 Total liabilities and equity $ 421,816 $ 519,169 The accompanying notes are an integral part of these financial statements. F- 1 VERTICAL DATA INC. UNAUDITED STATEMENT OF OPERATIONS (UNAUDITED) 2025 2024 Three Months Ended December 31, 2025 2024 Revenue $ 57,000 $ 3,666,000 Cost of revenue 48,900 3,598,000 Gross margin $ 8,100 $ 68,000 Operating expenses: General and administrative 660,735 905,458 Total operating expenses 660,735 905,458 Loss from operations ( 652,635 ) ( 837,458 ) Net loss $ ( 652,635 ) $ ( 837,458 ) Net loss per common share: Basic and diluted $ ( 0.05 ) $ ( 0.02 ) Weighted average common shares outstanding: Basic and diluted 12,201,465 39,020,726 The accompanying notes are an integral part of these financial statements. F- 2 VERTICAL DATA INC. UNAUDITED STATEMENT OF SHAREHOLDERS’ EQUITY (UNAUDITED) # of Shares Amount APIC Deficit Total Common Stock Accumulated # of Shares Amount APIC Deficit Total September 30, 2024 38,397,052 3,839 1,102,685 ( 350,599 ) 755,925 Issuance of common stock 2,186,000 219 1,093,181 - 1,093,400 Stock-based compensation - - 464,118 - 464,118 Net loss - - - ( 837,458 ) ( 837,458 ) December 31, 2024 40,583,052 4,058 2,659,984 ( 1,188,057 ) 1,475,985 September 30, 2025 41,193,052 4,119 4,433,669 ( 4,170,677 ) 267,111 Balance 41,193,052 4,119 4,433,669 ( 4,170,677 ) 267,111 Issuance of common stock 364,000 36 181,964 - 182,000 Common stock cancellation ( 31,752,690 ) ( 3,175 ) 3,175 - - Stock-based compensation - - 266,076 - 266,076 Net loss - - - ( 652,635 ) ( 652,635 ) December 31, 2025 9,804,362 980 4,884,884 ( 4,823,312 ) 62,552 Balance 9,804,362 980 4,884,884 ( 4,823,312 ) 62,552 The accompanying notes are an integral part of these unaudited financial statements. F- 3 VERTICAL DATA INC. UNAUDITED STATEMENT OF CASH FLOWS (UNAUDITED) 2025 2024 Three Months Ended December 31, 2025 2024 Cash flows from operating activities: Net loss ( 652,635 ) ( 837,458 ) Adjustments to reconcile net (loss) income to net cash used in operating activities Stock-based compensation 266,076 464,118 Depreciation expense 90 67 Changes in operating assets and liabilities: Prepaid expenses ( 55,449 ) ( 36,574 ) Other current assets - 305,877 Accrued liabilities 102,206 25,890 Other current liabilities 5,000 152,328 Net cash from (used) in operating activities ( 334,712 ) 74,248 Cash flows from financing activities: Sale of common stock, net of fees and costs 182,000 1,093,400 Net cash provided by financing activities 182,000 1,093,400 Net change in cash and cash equivalents ( 152,712 ) 1,167,648 Cash and cash equivalents, beginning of period 372,718 427,722 Cash and cash equivalents, end of period 220,006 1,595,370 Supplemental disclosures of cash flow information: Cash paid for interest - - Cash paid for taxes - - The accompanying notes are an integral part of these unaudited financial statements. F- 4 VERTICAL DATA INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. NATURE OF OPERATIONS Vertical Data Inc. (the “Company”) was incorporated in Nevada on May 3, 2024 and has a fiscal year-end of September 30. The Company’s current service to its customers is comprised solely of the sale of artificial intelligence related hardware. The Company plans to expand its service offerings in the future to include technology consulting, design and engineering, project management, systems integration, system installation and facilities management. The Company’s corporate office is located in Las Vegas, Nevada. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS The accompanying notes to the Company’s unaudited interim financial statements have been prepared in accordance with the requirements of ASC 270, Interim Reporting and Article 8 of Regulation S-X. To that extent, footnote disclosure which would substantially duplicate the disclosure contained in the Company’s latest audited financial statements has been omitted. In the opinion of management, these unaudited interim consolidated financial statements include all adjustments and accruals, consisting only of normal, recurring adjustments that are necessary for a fair statement of the results of all interim periods reported herein. The results of the interim periods are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period. Basis of Presentation The accompanying financial statements have been prepared using the accrual basis of accounting in accordance with generally accepted accounting principles (“GAAP”) promulgated in the United States of America. The financial statements include Vertical Data Inc. as of and for the three months ended December 31, 2025 and 2024. The Company’s fiscal year-end is September 30. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable, the results of which form the basis for the amounts recorded in the financial statements. Going Concern Pursuant to the guidance in ASC 205-40 Going Concern, for each annual and interim reporting period an entity’s management must evaluate whether there are conditions and events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. To that extent, the Company incurred a net loss of approximately $ 0.7 million during the three months ended December 31, 2025. Further, the Company had cash on hand of approximately $ 0.2 million as of December 31, 2025. Based on the above, the Company determined that there was substantial doubt about its ability to continue as a going concern. The Company hopes to mitigate the substantial doubt through its future capital raises and operating income. F- 5 Recent Accounting Pronouncements In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires incremental disclosures related to a public entity’s reportable segments. Required disclosures include, on an annual and interim basis, significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, an amount for other segment items (which is the difference between segment revenue less segment expenses and less segment profit or loss) and a description of its composition, the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The standard also permits disclosure of more than one measure of segment profit. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted the new standard on September 30, 2025. The adoption of the new standard did not have a material impact to our financial statements. In December 2023, the FASB issued ASU 2023-09-Income Taxes (Topic 740)-Improvements to Income Tax Disclosures, which requires entities to provide additional information in the rate reconciliation and additional disclosures about income taxes paid. The guidance should be applied prospectively and is effective for annual periods beginning after December 15, 2024. The Company does not expect the issued standard to have a material impact on its financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The amendments in this update require disclosure, in the notes to financial statements, of specified information about certain costs and expenses at each interim and annual reporting period. The amendments are effective for annual periods beginning after December 15, 2026, and reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of the new ASU to its financial statements. 3. PREPAID EXPENSES Prepaid expenses consisted of the following: SCHEDULE OF PREPAID EXPENSES December 31, 2025 September 30, 2025 Prepaid commissions $ 149,578 $ 132,625 Prepaid server storage 50,865 - Other - 12,369 Prepaid expenses $ 200,443 $ 144,994 4. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT Description December 31, 2025 September 30, 2025 Tools, machinery, and equipment $ 1,811 $ 1,811 Less – accumulated depreciation ( 444 ) ( 354 ) Total property and equipment, net $ 1,367 $ 1,457 Total depreciation expense was $ 90 and $ 67 for three months ended December 31, 2025 and 2024, respectively. F- 6 5. ACCRUED LIABILITIES Accrued liabilities consisted of the following: SCHEDULE OF ACCRUED LIABILITIES December 31, 2025 September 30, 2025 Wages accrual $ 210,000 $ 102,397 Expenses accrual 131,115 131,115 Credit card accrual 13,149 18,546 Total accrued liabilities $ 354,264 $ 252,058 6. STOCKHOLDERS’ EQUITY Upon formation, the authorized capital of the Company was 100,000,000 shares consisting of 100,000,000 shares of common stock, par value $ 0.0001 . Common Stock The Company’s common shares do not include any dividend or liquidation preferences, participation rights, call prices or unusual voting rights. Common Stock Issuances During the three months ended December 31, 2025, the Company sold 364,000 shares of Company stock in an unregistered offering for net proceeds of $ 182,000 . Share Cancellation During October of 2025, certain founders and other Company shareholders voluntarily surrendered an aggregate of 31,752,690 shares of Common Stock to the Company for no consideration. The cancellation was not given retroactive effect on the balance sheet as, pursuant to SAB Topic 4.C, it was not a stock dividend, stock split or reverse split. Stock Option Cancellations During October of 2025, the Company cancelled 2,426,488 stock options that were issued to five individuals. The Company recorded an immaterial amount of incremental stock-based compensation expense related to these cancellations. 7. SUBSEQUENT EVENTS In accordance with ASC 855 Subsequent Events , the Company has evaluated events and transactions subsequent to December 31, 2025 through the date these financial statements were issued. Other than the items identified below, there are no subsequent events identified that would require disclosure in these consolidated financial statements. Stock Option Exercises During January of 2026, a total of 1,300,000 stock options were exercised at a weighted average exercise price of $ 0.05 , resulting in proceeds of $ 65,000 . During January of 2026, a total of 788,198 stock options were exercised. These stock options were exercised as a cashless exercise whereby the consideration provided for exercise was forfeiture of 78,820 shares, resulting in net shares issued of 709,378 . F- 7