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NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Nature of Business Shefford Small Business, Inc. (the “Company”) was incorporated in the State of North Carolina on November 13, 2025 and has been inactive since inception, other than activities related to its formation and registration of its common stock under the Securities Exchange Act of 1934. The Company was formed to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more operating businesses (each, a “Target Business”). The Company does not currently have any operations or generate any revenues and is considered a “shell company” as defined in Rule 12b‑2 promulgated under the Exchange Act. The Company has not entered into a definitive agreement with any Target Business and there can be no assurance that it will be successful in identifying or completing a business combination on favorable terms, or at all. The Company will not limit its search for a Target Business to any particular industry, sector or geographic region and may pursue a business combination opportunity in any line of business or location that management believes offers attractive risk‑adjusted returns for the Company’s stockholders. The Company expects that, until it completes a business combination, its activities will be limited to organizational matters, SEC reporting compliance, and evaluating potential Target Businesses. The Company has not established any source of revenues sufficient to fund its operating activities and is dependent upon the financial support of its Chairman and Chief Executive Officer, who has funded formation and professional costs and has committed to continue funding operating expenses until the completion of a business combination without any obligation of repayment. These conditions raise substantial doubt about the Company’s ability to continue as a going concern, as further discussed in Note 3.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10‑Q and Article 8 of Regulation S‑X of the Securities and Exchange Commission (the “SEC”). They do not include all of the information and footnotes required by U.S. GAAP for complete annual financial statements. In the opinion of management, all normal, recurring adjustments considered necessary for a fair presentation of the Company’s financial position as of June 30, 2026 and its results of operations and cash flows for the interim periods presented have been included. The results of operations for the six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the full fiscal year ending December 31, 2026. These unaudited interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Registration Statement on Form 10‑12G for the year ended December 31, 2025, as declared effective by the SEC. The Company’s fiscal year ends on December 31. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Given the Company’s limited operations and development‑stage status, management’s estimates primarily relate to the assessment of going concern, the fair value of equity‑based compensation (if any), and the evaluation of deferred tax assets and related valuation allowances. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company maintains its cash with a high‑credit‑quality financial institution and, at times, such balances may exceed federally insured limits; management believes the credit risk is not significant. Concentration of Credit Risk Financial instruments which potentially subject the Company to concentration of credit risk consist of cash deposits. The Company maintains cash with various major financial institutions. The Company performs periodic evaluations of the relative credit standing of these institutions. Fair Value Measurements The Company accounts for fair value measurements in accordance with ASC 820, Fair Value Measurement, which defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. ASC 820 establishes a three-level hierarchy for fair value measurements based on the observability of inputs used to value assets and liabilities: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than quoted prices included within Level 1, including quoted prices for similar assets or liabilities and other observable market data. Level 3 – Unobservable inputs that reflect the Company's own assumptions about the assumptions market participants would use in pricing an asset or liability. The carrying amounts of the Company's financial instruments, including cash and accounts payable, approximate their fair values due to the short-term nature of these instruments. The Company did not have any assets or liabilities measured at fair value on a recurring or nonrecurring basis as of June 30, 2026. Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income in the period that includes the enactment date. The Company recognizes the financial statement effects of uncertain tax positions when it is more likely than not that the position will be sustained upon examination by the applicable taxing authorities. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense. Net Income (Loss) Per Share Net income (loss) per common share is computed pursuant to ASC 260-10-45, Earnings per Share—Overall—Other Presentation Matters. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. As of June 30, 2026, the Company had no potentially dilutive shares of common stock. Additionally, diluted amounts, if any, are not presented when the effect of the computations are anti-dilutive due to the losses incurred. Accordingly, there is no difference in the amounts presented for basic and diluted loss per share. Operating Segments Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”), or decision maker group, in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s chief operating decision making group is composed of the Chief Executive Officer. The Company has one operating segment as of June 30, 2026. Recent Accounting Pronouncements Management has evaluated recently issued accounting standards and concluded that none are expected to have a material impact on the Company's financial statements.

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10‑Q and Article 8 of Regulation S‑X of the Securities and Exchange Commission (the “SEC”). They do not include all of the information and footnotes required by U.S. GAAP for complete annual financial statements. In the opinion of management, all normal, recurring adjustments considered necessary for a fair presentation of the Company’s financial position as of June 30, 2026 and its results of operations and cash flows for the interim periods presented have been included. The results of operations for the six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the full fiscal year ending December 31, 2026. These unaudited interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Registration Statement on Form 10‑12G for the year ended December 31, 2025, as declared effective by the SEC. The Company’s fiscal year ends on December 31.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Given the Company’s limited operations and development‑stage status, management’s estimates primarily relate to the assessment of going concern, the fair value of equity‑based compensation (if any), and the evaluation of deferred tax assets and related valuation allowances.

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company maintains its cash with a high‑credit‑quality financial institution and, at times, such balances may exceed federally insured limits; management believes the credit risk is not significant.

Financial instruments which potentially subject the Company to concentration of credit risk consist of cash deposits. The Company maintains cash with various major financial institutions. The Company performs periodic evaluations of the relative credit standing of these institutions.

The Company accounts for fair value measurements in accordance with ASC 820, Fair Value Measurement, which defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. ASC 820 establishes a three-level hierarchy for fair value measurements based on the observability of inputs used to value assets and liabilities: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than quoted prices included within Level 1, including quoted prices for similar assets or liabilities and other observable market data. Level 3 – Unobservable inputs that reflect the Company's own assumptions about the assumptions market participants would use in pricing an asset or liability. The carrying amounts of the Company's financial instruments, including cash and accounts payable, approximate their fair values due to the short-term nature of these instruments. The Company did not have any assets or liabilities measured at fair value on a recurring or nonrecurring basis as of June 30, 2026.

The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income in the period that includes the enactment date. The Company recognizes the financial statement effects of uncertain tax positions when it is more likely than not that the position will be sustained upon examination by the applicable taxing authorities. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense.

Net income (loss) per common share is computed pursuant to ASC 260-10-45, Earnings per Share—Overall—Other Presentation Matters. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. As of June 30, 2026, the Company had no potentially dilutive shares of common stock. Additionally, diluted amounts, if any, are not presented when the effect of the computations are anti-dilutive due to the losses incurred. Accordingly, there is no difference in the amounts presented for basic and diluted loss per share.

Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”), or decision maker group, in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s chief operating decision making group is composed of the Chief Executive Officer. The Company has one operating segment as of June 30, 2026.

Management has evaluated recently issued accounting standards and concluded that none are expected to have a material impact on the Company's financial statements.

NOTE 3 – GOING CONCERN The accompanying unaudited condensed financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the foreseeable future. Since its inception on November 13, 2025, the Company has not commenced principal operations and has not generated any revenues. The Company has incurred losses from operations and has funded its activities primarily through capital contributions from its Chairman and Chief Executive Officer, who has paid formation, regulatory and professional fees on behalf of the Company without any obligation of repayment. The Company expects to continue to incur operating losses and negative cash flows until such time, if ever, that it consummates a business combination with an operating company and that business generates sufficient revenues to cover ongoing costs. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the financial statements are issued. Management’s plans to address this uncertainty primarily include seeking to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more operating businesses and continuing to rely on the financial support of its Chairman and Chief Executive Officer to fund operating costs until such a transaction is completed. There can be no assurance that the Company will be successful in identifying or completing a business combination on favorable terms, or at all, or that additional financing will be available on acceptable terms. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties. If the Company is unable to obtain additional financing as needed and/or complete a business combination, it may be required to curtail or cease its operations.

NOTE 4 – STOCKHOLDER’S EQUITY Upon formation, the Board of Directors issued 1,000,000 shares of common stock for $100 to Mr. Cross. In addition, Mr. Cross contributed an additional $265 to form the Company and to open the Company’s bank account. The stockholder’s equity section of the Company contains the following classes of capital stock as of June 30, 2026: <table cellpadding="0" style="border-spacing:0;text-align:justify;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"> </td><td style="width:4%;vertical-align:top;">·</td><td style="vertical-align:top;">Common stock, $ 0.0001 par value: 100,000,000 shares authorized; 1,000,000 shares issued and outstanding</td></tr><tr style="height:15px"><td> </td><td> </td><td> </td></tr><tr style="height:15px"><td> </td><td style="vertical-align:top;">·</td><td style="vertical-align:top;">Preferred stock, $ 0.0001 par value: 10,000,000 shares authorized; none issued and outstanding. At present, no rights have been established for the preferred stock and we have no plans to either issue any preferred stock nor adopt any series, preferences or other classification of preferred stock</td></tr></tbody></table>

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NOTE 5 – RELATED PARTY TRANSACTIONS Jonathan Cross is the Company’s founder, sole director and Chairman and Chief Executive Officer (the “Founder”). Since inception, the Founder has paid, from his personal funds, all expenses incurred by the Company, including state and local filing fees, bank charges, audit fees, EDGAR filing and conversion fees, and transfer agent fees, without any obligation of repayment. For the six months ended June 30, 2026, the Founder paid professional fees and other operating expenses on behalf of the Company totaling $11,664, consisting primarily of audit fees, SEC/EDGAR filing fees and transfer agent fees. These payments have been recorded by the Company as capital contributions and credited to additional paid‑in capital in the accompanying financial statements. No amounts are recorded as due to the Founder, and there were no related‑party payables outstanding as of June 30, 2026. The Founder has also made his office space, utilities and certain administrative support available to the Company at no cost. Management believes that the fair value of such contributed office space and services for the periods presented is immaterial and, accordingly, no expense or capital contribution has been recognized in the accompanying financial statements for these items. The Founder has committed to continue funding the Company’s operating expenses, without expectation of repayment, until the Company completes a business combination. There can be no assurance that the Founder will have sufficient financial resources or will continue to fund such expenses in the future, which could adversely affect the Company’s ability to continue as a going concern (see Note 3).

11664

NOTE 6 – INCOME TAXES The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities using enacted tax rates expected to apply in the years in which such differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when management determines it is more likely than not that such assets will not be realized. For the six months ended June 30, 2026, the Company recorded no provision for income taxes. The Company incurred a net loss of $11,664 for the period and continues to maintain a full valuation allowance against its deferred tax assets, as management has determined that it is more likely than not that such assets will not be realized. The Company's deferred tax assets increased as a result of current-period operating losses. Because management continues to believe it is more likely than not that these deferred tax assets will not be realized, a full valuation allowance has been maintained. The following table reconciles the combined statutory income tax rate to the Company’s effective tax rate for the six months ended June 30, 2026: <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;margin-left:auto;margin-right:auto;width:85%"><tbody><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Federal statutory rate</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">21.0</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">State taxes, net of federal benefit</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">2.0</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Combined statutory rate</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">23.0</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Change in valuation allowance</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(23.0</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)%</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Effective income tax rate</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0.0</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr></tbody></table>

-11664

<table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;margin-left:auto;margin-right:auto;width:85%"><tbody><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Federal statutory rate</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">21.0</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">State taxes, net of federal benefit</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">2.0</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Combined statutory rate</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">23.0</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;">Change in valuation allowance</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(23.0</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)%</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;">Effective income tax rate</td><td style="width:1%;white-space: nowrap;"> </td><td style="width:1%;white-space: nowrap;"> </td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0.0</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr></tbody></table>

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NOTE 7 – SUBSEQUENT EVENTS The Company has evaluated subsequent events in accordance with ASC Topic 855, Subsequent Events. Management evaluated events occurring after the balance sheet date through August 13, 2026, the date on which the financial statements are available to be issued. Based on this evaluation, management concluded that there were no events occurring during this subsequent‑event evaluation period that required recognition in the financial statements or disclosure in the notes thereto.