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Item 1. Financial Statements

2026-05-15 compared with 2026-02-13 · 174 added, 80 removed, 117 unchanged (68% of the section changed)

FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2025 AND AUDITED AS OF SEPTEMBER 30, 2025)

As of December

BALANCE SHEETS

AS OF MARCH 31, 2026 AND AUDITED AS OF SEPTEMBER 30, 2025)

As of March 31,

As of September 30,

Current assets:

Restricted cash

Prepaid expenses

Total current assets

and equipment, net

Property and equipment, net

LIABILITIES AND EQUITY

1 unchanged sentence

Accrued liabilities

Current Liabilities

current liabilities

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.

Contract liability

Insurance premium financing payable

Total current liabilities

Total liabilities

Common stock, $ 0.0001 par value, 100,000,000 shares authorized;

12,093,741 and 41,193,052 shares issued and outstanding at

March 31, 2026 and September 30, 2025, respectively.

Additional paid in capital

Accumulated deficit

( 6,153,313 )

( 4,170,677 )

equity (deficit)

liabilities and equity

The accompanying notes are an integral part of these financial statements.

STATEMENT OF OPERATIONS

Months Ended December 31,

Cost of revenue

Total equity (deficit)

Total liabilities and equity

accompanying notes are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF OPERATIONS

Three Months Ended March 31,

Six Months Ended March 31,

Cost of goods sold

Operating expenses:

and administrative

General and administrative

Total operating expenses

2 unchanged sentences

( 1,404,996 )

( 1,982,636 )

( 2,242,454 )

$ ( 1,330,001 )

$ ( 1,404,996 )

$ ( 1,982,636 )

$ ( 2,242,454 )

Net loss per common share:

Weighted average common

shares outstanding:

Basic and diluted

Weighted average common shares outstanding:

Basic and diluted

accompanying notes are an integral part of these financial statements.

STATEMENT OF SHAREHOLDERS’ EQUITY

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

September 30, 2024

3 unchanged sentences

( 1,188,057 )

September 30, 2025

Issuance of common stock

Stock-based compensation

( 1,404,996 )

March 31, 2025

( 2,593,053 )

September 30, 2025

( 4,170,677 )

Issuance of common stock

5 unchanged sentences

( 4,823,312 )

Issuance of common stock

Employee stock-based compensation

Non-employee stock-based compensation

( 1,330,001 )

March 31, 2026

( 6,153,313 )

accompanying notes are an integral part of these unaudited financial statements.

VERTICAL DATA INC.

STATEMENT OF CASH FLOWS

Months Ended December 31,

Cash flows from operating

Adjustments to reconcile

net (loss) income to net cash used in operating activities

Stock-based compensation

CONSOLIDATED STATEMENT OF CASH FLOWS

Six Months Ended March 31,

Cash flows from operating activities:

$ ( 1,982,636 )

$ ( 2,242,454 )

Adjustments to reconcile net (loss) income to net cash used in operating activities

Employee stock-based compensation

Non-employee stock-based compensation

Depreciation expense

Changes in operating assets

and liabilities:

Changes in operating assets and liabilities:

Prepaid expenses

( 6,210,530 )

Other current assets

Accrued liabilities

current liabilities

cash from (used) in operating activities

Cash flows from financing

of common stock, net of fees and costs

cash provided by financing activities

Net change in cash and cash

and cash equivalents, beginning of period

and cash equivalents, end of period

Supplemental disclosures

of cash flow information:

Contract liability

Other current liabilities

Net cash provided by (used in) operating activities

$ ( 551,847 )

Cash flows from investing activities:

Purchase of property and equipment

Net cash used in investing activities

Cash flows from financing activities:

Issuance of common stock

Payments on insurance premium financing payable

Net cash provided by financing activities

Net change in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of period

Cash, cash equivalents and restricted cash, end of period

Cash, cash equivalents and restricted cash reconciliation:

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents and restricted cash

Supplemental disclosures of cash flow information:

Cash paid for interest

Cash paid for taxes

Supplemental disclosures of non-cash investing and financing activities:

Insurance premiums financed with issuance of a liability

accompanying notes are an integral part of these unaudited financial statements.

18 unchanged sentences

of Presentation

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.

and for the three months ended December 31, 2025 and 2024.

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

and its subsidiaries Vertical Data Nordic and VDCA Inc.

as of March 31, 2026.

Vertical Data Nordic and VDCA Inc.

recently established in Sweden and Canada, respectively, for the purpose of conducting business operations in those countries.

entities did not commence principal operations as of March 31, 2026.

The Company’s fiscal year-end is September 30.

10 unchanged sentences

that are believed to be reasonable, the results of which form the basis for the amounts recorded in the financial statements.

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.

of Revenue from Contracts with Customers

Company recognizes revenue from its contracts with customers in accordance with the core principle outlined in ASC 606 Revenue from

Contracts with Customers .

Specifically, the Company recognizes revenue “to depict the transfer of promised goods or services

to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services”.

To that extent, the Company recognizes revenue in accordance with the ASC Topic by applying the following five steps:

1-Identify the contract(s) with a customer

2-Identify the performance obligations in the contract

3-Determing the transaction price

4-Allocate the transaction price to the performance obligations in the contract

5-Recognize revenue when (or as) the Company satisfies a performance obligation

Company’s contracts with its customers currently only contain a single performance obligation comprised solely of the sale of IT

To that extent, the Company does not provide any installation or customization services at this time that might be considered

a separate performance obligation.

Further, as noted above, revenue is recognized at a point in time upon delivery of the equipment to

the customer at the agreed upon location.

The Company does not currently extend any form of payment terms to its customers and, as such,

full payment for the equipment is received from the customer (via wire payment) immediately upon delivery of the equipment.

The Company will recognize a contract liability to the extent it receives consideration from a customer prior to

providing the equipment.

During the interim period ended March

31, 2026, the Company received an $ 11.2 million customer prepayment primarily related to the future sale of computer equipment to the

The Company expects to recognize the amount to revenue during its interim period ended June 30, 2026.

Restricted Cash

Company presents cash and cash items that are restricted as to withdrawal and usage as restricted cash on its consolidated balance sheet.

As of March 31, 2026, the Company classified $ 1.2 .

million in cash as restricted cash as the Company was legally obligated to use the

amount to purchase computer equipment from a vendor for an existing customer.

Company currently reports under a single operating segment, which constitutes all of the consolidated entity.

Further, the Company’s

CODM, which is its CEO, reviews the entity-wide operating results and performance.

As such, the measure of profit or loss for the segment

is net loss as presented in our consolidated statement of operations.

Accounting Pronouncements

11 unchanged sentences

our financial statements.

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.

November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures

9 unchanged sentences

SCHEDULE OF PREPAID EXPENSES

September 30,

Prepaid commissions

Prepaid server storage

Vendor deposits

Prepaid insurance

Prepaid expenses

of March 31, 2026 and September 30, 2025, prepaid expenses totaled $ 6,468,024

and $ 144,994 ,

respectively.

Vendor deposits of $ 6,170,718

as of March 31, 2026 represent payments made to the Company’s equipment vendor for the settlement of contract liabilities related

to future purchase of equipment for its customers.

The Company did not receive the equipment as of the March 31, 2026 balance sheet date.

PROPERTY AND EQUIPMENT

1 unchanged sentence

SCHEDULE OF PROPERTY AND EQUIPMENT

September 30,

Tools, machinery, and equipment

Less – accumulated

Total property and equipment,

depreciation expense was $ 90 and $ 67 for three months ended December 31, 2025 and 2024, respectively.

Less – accumulated depreciation

Total property and equipment, net

depreciation expense was $ 91 and $ 181 for three and six months ended March 31, 2026, respectively, and $ 83 and $ 150 for the three and

six months ended March 31, 2025, respectively.

ACCRUED LIABILITIES

1 unchanged sentence

SCHEDULE OF ACCRUED LIABILITIES

September 30,

Wages accrual

2 unchanged sentences

Total accrued liabilities

INSURANCE PREMIUM FINANCING PAYABLE

On January 30, 2026, the Company entered into a premium financing agreement

to fund an annual Director and Officer (D&O) insurance policy.

The agreement provided for a total financed amount of $ 112,500 , representing

the premium balance after a down payment of $ 37,500 .

The note carries a finance charge of $ 4,667 , resulting in total obligation of $ 117,167 .

The note is payable in 9 equal monthly installments of $ 13,019 , maturing

on October 30, 2026.

The total finance charge of $ 4,667 is amortized as interest expense over the term of the agreement within general

and administrative in the statement of operations.

As of March 31, 2026, the outstanding principal balance of this note, net of unamortized

discount, was $ 87,500 .

STOCKHOLDERS’ EQUITY

2 unchanged sentences

Stock Issuances

the three months ended December 31, 2025, the Company sold 364,000 shares of Company stock in an unregistered offering for net proceeds

the three months ended March 31, 2026, the Company sold 280,000 shares of Company stock in an unregistered offering for net proceeds

of $ 40,000 .

the six months ended March 31, 2026, the Company sold 644,000 shares of Company stock in an unregistered offering for net proceeds of

October of 2025, certain founders and other Company shareholders voluntarily surrendered an aggregate of 31,752,690 shares of Common

2 unchanged sentences

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.

Option Cancellations

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.

Option Exercises

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 .

January of 2026, a total of 788,199 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 709,379 .

Stock to be Issued for Services Provided

the three months ended March 31, 2026, the Company entered into agreements with various service providers to settle existing obligations through the future

issuance of 864,900 shares resulting in the settlement of liabilities totaling $ 432,450 .

No gain or loss was recognized from recognition

of the transaction.

the three months ended March 31, 2026, the Company entered into a agreements with two employees for the payment of bonuses through the

future issuance of 360,000 shares resulting in the settlement of liabilities totaling $ 180,000 .

No gain or loss was recognized from the transaction.

the three months ended March 31, 2026, the Company entered into an agreement with a service provider for to settle an existing obligation through the future

issuance of 103,065 shares resulting in the settlement of liabilities totaling $ 51,533 .

No gain or loss was recognized from recognition

of the transaction.

SUBSEQUENT EVENTS

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 .

accordance with ASC 855 Subsequent Events , the Company has evaluated events and transactions subsequent to March 31, 2026 through

the date these financial statements were issued.

Management did not identify any subsequent events that

would require disclosure in these consolidated financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements