v3.26.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS (Policies)
 9 Months Ended
Jun. 30, 2026
Accounting Policies [Abstract]  
Basis of Presentation

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. and its subsidiaries Vertical Data Nordica (“VD Nordica”) and VDCA Inc. as of June 30, 2026. VD Nordica and VDCA Inc. were established in Sweden and Canada, respectively, for the purpose of conducting business operations in those countries. To that extent, the company owns 85% of the outstanding shares of VD Nordica with the remaining 15% ownership presented as non-controlling interest on the face of our financial statements. Further, VDCA Inc. did not commence principal operations as of June 30, 2026. The Company’s fiscal year-end is September 30.

 
Use of Estimates

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.

 
Recognition of Revenue from Contracts with Customers

Recognition of Revenue from Contracts with Customers

 

The 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:

 

  ● Step 1-Identify the contract(s) with a customer
  ● Step 2-Identify the performance obligations in the contract
  ● Step 3-Determing the transaction price
  ● Step 4-Allocate the transaction price to the performance obligations in the contract
  ● Step 5-Recognize revenue when (or as) the Company satisfies a performance obligation

 

IT Equipment Sales

 

The Company’s IT equipment sales contracts with its customers currently contain a single performance obligation comprised solely of the sale of IT equipment. 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 extend payment terms to its customers; payment for equipment is received via wire transfer at or before delivery. When the Company receives consideration from a customer in advance of transferring the equipment, the amount received is recorded as a contract liability and recognized as revenue upon delivery of the equipment to the customer at the agreed-upon location, which is the point at which control transfers.

 

During the interim period ended June 30, 2026, the Company recognized a $9.0 million customer prepayment primarily related to the future sale of computer equipment to the customer. The Company expects to recognize the amount to revenue during the period ended December 31, 2026.

 

 

Billing Service Revenue

 

The Company enters into arrangements under which it provides billing services on behalf of third-party vendors to end customers. Under such arrangements, the Company bills the end customer for the full amount of goods or services provided by the vendor, retains a portion of the amount billed as consideration for its billing services, and remits the remainder to the vendor. In accordance with ASC 606, the Company determined that it was the agent in these transactions and therefore recognized revenue on a net basis.

 

The Company’s revenue for the three and nine months ended June 30, 2026 disaggregated by service type was as follows:

   2026   2025   2026   2025 
   Three Months Ended June 30,   Nine Months Ended June 30, 
   2026   2025   2026   2025 
                 
IT hardware sales  $-   $-   $625,000   $3,666,000 
Billing service revenue   247,212    -    247,212    - 
Total revenue  $247,212   $-   $872,212   $3,666,000 

 
Translation of Foreign Operations

Translation of Foreign Operations

 

The financial results and position of foreign operations whose functional currency is different from the Company’s presentation currency are translated as follows:

 

●assets and liabilities are translated at period-end exchange rates prevailing at that reporting date;
●equity is translated at historical exchange rates; and
●income and expenses are translated at average exchange rates for the period.

 

Exchange differences arising on translation of foreign operations are recognized in accumulated other comprehensive loss in the consolidated financial statements. During the nine months ended June 30, 2026, the Company had one operating subsidiary with a functional currency other than the U.S. dollar.

 

The relevant translation rates are as follows:

      Period End
June 30, 2026		   Average 9
Months Ended
June 30, 2026		   Average 3
Months Ended
June 30, 2026		 
USD  U.S. Dollar   1.0000    1.0000    1.0000 
SEK  Swedish Krona   0.1031    0.1081    0.1067 

 
Foreign Currency Transactions

Foreign Currency Transactions

 

Transactions denominated in currencies other than the functional currency of the applicable entity are initially recorded using the exchange rate in effect on the transaction date. Monetary assets and liabilities denominated in foreign currencies are remeasured at the applicable exchange rate at each reporting date. Foreign currency transaction gains and losses resulting from settlement of such transactions and from remeasurement of monetary assets and liabilities are recognized in the consolidated statements of operations in the period in which they arise.

 
Non-Controlling Interest

Non-Controlling Interest

 

In accordance with ASC 810, Consolidation, the Company consolidates entities in which it has a controlling financial interest. Further, for less than wholly owned subsidiaries, the Company will present on the face of its consolidated financial statements i) the amounts of consolidated net income and consolidated comprehensive income and ii) the related amounts of each attributable to the parent and the noncontrolling interest.

 
Stock-Based Compensation

Stock-Based Compensation

 

The Company accounts for its stock-based compensation awards in accordance with ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments, including grants of employee stock options, to be recognized in the statements of operations by measuring the fair value of the award on the date of grant and recognizing this fair value as stock-based compensation over the requisite service period, generally the vesting period.

 

The Company estimates the grant date fair value of stock option awards using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model requires management to make assumptions with respect to the fair value of our underlying shares, the expected term of the option, the expected volatility of our Common Stock, the risk-free interest rates and expected dividend yield of our Common Stock.

 
Segments

Segments

 

The 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.

 
Concentrations of Credit Risk, Customers and Vendors

Concentrations of Credit Risk, Customers and Vendors

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company maintains its cash balances with financial institutions which, at times, may exceed federally insured limits. The Company has not experienced any losses on such accounts and believes it is not exposed to significant credit risk related to its cash balances.

 

The Company’s revenues are concentrated among a limited number of customers. For the three months ended June 30, 2026, one customer accounted for approximately 100% of total revenue. For the nine months ended June 30, 2026, customers representing 10% or more of revenue accounted for 100% of total revenue. The loss of a significant customer or a material reduction in business with such customer could adversely affect the Company’s results of operations.

 

The Company also purchases equipment and services from a limited number of vendors. As of June 30, 2026, 100% of the Company’s vendor deposits were associated with one vendor. The Company’s operations may therefore be affected by its ability to obtain equipment and services from these vendors on acceptable terms and within required delivery timelines.

 

The Company operates primarily in the United States and, through its majority-owned subsidiary VD Nordica, has commenced operations in Sweden. For the three and nine months ended June 30, 2026, substantially all of the Company’s revenue was generated from customers located in United States. The Company’s foreign operations expose it to risks associated with foreign currency movements and operating in foreign jurisdictions.

 
Recent Accounting Pronouncements

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 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.