Last Updated: May 2, 2022


Many shareholders have asked when will VCSY’s stock will be trading again.

VCSY is currently seeking funding to cover the costs of the audit (plus the first and likely the second quarterly review of our financial statements. In connection with an audit, we also need to have funds to pay employee’s salaries as well as other ancillary costs associated with the audit and as well as the application fees and costs for listing on the OTC Link (aka the Pink Sheets).

Realize that the company has to balance the need to successfully prosecute ongoing legal proceedings with the need to get VCSY common stock in a position to trade on the Pink Sheets.

For those shareholders wondering when the audit will be completed, realize the company has to have all costs covered before an auditor can be engaged (that is one reason why VCSY often filed late). The auditors will need some time before we will have a sense of when the audit will be completed. We will update our shareholders but only when we have a clear sense of a timeline that we will be able to meet.

In sum, we are working to raise the capital required to get the stock re-listed and we appreciate your patience.

We cannot disclose our strategies for ongoing legal proceedings. However, we do want to provide you with a general update on the status of the following legal proceedings:

1. Litigation Against Richard Wade and William Mills

a. Dallas Lawsuit

On May 25, 2021, the plaintiffs filed a non-suit against William Mills (“Mills”), the former director and corporate secretary of Vertical. Please see the Collin County Action below for more details.

Due to Richard Wade’s continued failure to comply with discovery requests, Vertical and Luiz Valdetaro, the CTO of Vertical, prosecuted their case against Wade in the Dallas court where the shareholder derivative action was originally filed. The trial was held on April 19, 2022, and the court rendered judgment in favor of Vertical and Valdetaro and against Wade. Consequently, the court awarded damages (a) to Vertical in the amount of $20,169,000 and (b) to Luiz Valdetaro in the amount of $1,505,359, plus interest at the rate of 5% per annum. While Vertical does not anticipate being able to collect against Wade since the Company does not believe Wade has any material assets, the Company will reduce its liabilities related to Wade on its balance sheet by approximately $1,275,000 in connection with compensation, promissory notes, and interest that was owed to Wade.

To view all filed documents concerning this lawsuit, please visit the Dallas County court online portal at:

Dallas County Courts- Case Portal    Case #: DC-21-06094 (original action: Case #-DC 20-06209)

b. Collin County Action (Richardson, TX): Certain Shareholders vs. William Mills

On June 11, 2021, certain shareholders (who originally filed the Dallas lawsuit) filed a new lawsuit against William Mills. On October 18, 2021, this lawsuit was settled between certain shareholders, Vertical and Mr. Mills. Under the terms of the settlement, Mr. Mills will return 5,200,000 VCSY common shares to certain shareholders who helped fund the lawsuit and Vertical as well as cash. All parties mutually released one another and Vertical will be reducing any liabilities related to Mr. Mills and his law firm Parker Mills, LLP on Vertical’s balance sheet by almost $600,000 when the court entered the Agreed Order of Dismissal. For more details about court filings for this case, please visit the Collin County Courts Case Portal below. Please note that copies of actual filings are not available online.

Collin County Courts- Case Portal    Case #: 380-3102-2021


2. Lawsuit vs Farias - Lakeshore Investments, LLC vs. Now Solutions, Inc., Vertical Computer Systems, Inc.

Our motion to file a Cross-Complaint was granted in December 2020. Under the amended cross-complaint we are seeking damages in excess of $5.5 million. On May 17, 2021, Lakeshore filed a motion to strike and demurrer to the amended cross-complaint. Vertical and NOW Solutions filed oppositions to these motions. We filed an amended cross-complaint on August 11, 2021. On September 7, 2021, Lakeshore filed a motion to strike portions of the amended cross-complaint and Lakeshore filed a demurrer to the amended cross-complaint. On September 24, 2021, Vertical and NOW Solutions filed oppositions to these motions. Lakeshore filed its reply briefs on September 30, 2021. On October 15, 2021, the court overruled Lakeshore’s demurrer with respect to the first cause of action (breach of contract) and the seventh cause of action (Common Count). While the court sustained Lakeshore’s demurrer with respect to the second, third, fourth, fifth and six causes of action without prejudice to Vertical and Now Solutions.

On October 18, 2021, Robert Farias filed a motion to strike portions of the amended cross-complaint and he filed a demurrer to the amended cross-complaint., On November 3, 2021, Vertical and Now Solutions filed oppositions to these motions. On November 17, 2021, the Court overruled the demurrer by Defendant Farias to the second cause of action (for Breach of Contract) and sustained the demurrer by Defendant Farias to the first, third, fourth, sixth, and eighth causes of action. Farias did not demur on the fifth cause of action (Breach of Fiduciary Duty), so that cause of action remains in Vertical and Now’s cross-complaint. For the seventh cause of action (Common Count), the court overruled the demurrer to the extent this cause of action asserted a claim for Money Had and Received and sustained the demurrer to the extent this cause of action asserted a claim for Unjust Enrichment. The Court denied the motion to strike by Farias, as the claim for punitive damages may be predicated on the cause of action for Breach of Fiduciary Duty, and the allegations made by Vertical and Now Solutions were sufficient for purposes of the pleading stage.

Discovery is ongoing. We will provide limited updates on material developments on the status of this lawsuit that become publicly available in court.

While access to the filings in this case is open to the general public, you will need to sign up for an account and pay fees to access this case.

Los Angeles Superior Court- Case Portal   Case #: 19STCV15381

Ploinks® is a private and secure communication application for sharing and transmitting data which offers additional privacy and security beyond encryption. Ploinks® is built on top of our Private Mobile Framework. That framework can decentralize data sharing and transmission because its technology bypasses the need and cost associated with massive centralized servers.

    At present, our Private Mobile Framework has been used to develop the Ploinks® application, which is used for communication and data sharing with other users, and the Puddle™ application used for back-up solution, and is comprised of four parts:

  • The Ploinks® application, which provides Ploinks® users with peer-to-peer messaging, sharing of content (i.e., pictures, videos, files) and peer-to-peer private and secure voice calls.

  • The Puddle™ application, which provides a backup for the data that you store within Ploinks®. Because the data you store in Ploinks® is not stored in the cloud, you can use the Puddle™ to backup, sync and see your Ploinks® content.

  • The Ploinks® Server application, which contains the mobile web server allowing you to communicate peer-to- peer.

  • The Puddle™ Server application, which is the engine used for the Ploinks® data backup, sync and recovery (in case access to data on the user's primary mobile devices is lost).

Currently, there is not a functional version of Ploinks® that works on iOS, the mobile operating system created and developed by Apple.

While Luiz Valdetaro, the CTO of VCSY, has been diligently working to bring the Android versions of Ploinks® up-to-date and fix glitches in the software, we are working on securing funding to continue development of the Ploinks-based technology.

The NOW Solutions team has been diligently working on several fronts:

First, the NOW Solutions’ website has been completely revamped to reflect its improved offering and an overall better look and feel. New pages are being added to offer increased exposure to the solution suite.

Second, the latest version of our emPath® Human Resources and Payroll suite will be in April 2021. More information on that release and upcoming features is available at NOW Solutions corporate site.

The NOW Solutions team has also begun deploying its marketing plans for 2021, which include participation in various HR and Payroll community groups, a social media presence and being more active in responding to RFP’s and the tender process.

In addition, emPath® has also been upgraded throughout to further improve its overall ability toward paperless solutions which will save our customers time, money and, of course, paper. In short, NOW Solutions is helping employers go green!

NOW Solutions is currently focused on identifying and promoting the strengths of its solutions on its corporate website and increasing its representation on social media platforms so that it can begin going after potential clients where emPath® is the best fit. The sales cycle for payroll, HRMS and talent solutions can take anywhere from 6 to 18 months.

After the change in board and management at the VCSY level, the team at NOW Solutions is energized and motivated for NOW Solutions to achieve its full potential.

Upon the appointment of the new board and management, the first and immediate problem we faced was that Vertical had been locked out of the old office in September 2020 due to previous management’s failure to pay rent and there were no available funds when the new team came on board. By the end of March 2021, we were able to obtain access and remove all equipment (including servers and PCs) as well as all company books and records from the old office. Having our books and records back under our control will enable the company to better run the business from an operational standpoint and to proceed in ongoing litigation and regulatory matters.

Once the Vertical stock is trading and we are current with the alternative reporting requirements with the standards set by the OTC Markets, the board intends to hold a shareholder meeting as soon as reasonably practicable.

To reach the Shareholder Advisory Board directly, please email: shareholdersboard@vcsy.com