In this work, we propose a novel quadrotor design capable of folding its arms vertically to grasp objects and navigate through narrow spaces. The transformation is controlled actively by a central servomotor, gears, and racks. The arms connect the motor bases to the central frame, forming a parallelogram structure that ensures the propellers maintain a constant orientation during morphing. In its stretched state, the quadrotor resembles a conventional design, and when contracted, it functions as a gripper with grasping components emerging from the motor bases. To mitigate disturbances during transforming and grasping payloads, we employ an adaptive sliding mode controller with a disturbance observer. After fully folded, the quadrotor frame shrinks to 67% of its original size. The control performance and versatility of the morphing quadrotor are validated through real-world experiments.