Medical Exercise Inc. Faces Going Concern Doubt Amid Zero Revenue, Widening Losses

TL;DR

**MEDICAL EXERCISE INC. is a zombie company with no revenue and a massive deficit; avoid at all costs until they prove a viable business model and secure operations.**

AI Summary

MEDICAL EXERCISE INC. reported a significant increase in net loss for the six months ended September 30, 2025, reaching $155,010, compared to a net loss of $122,186 for the same period in 2024. The company generated no revenue for the three and six months ended September 30, 2025, a sharp decline from $1,294 in revenue for the six months ended September 30, 2024. Operating expenses rose to $154,143 for the six months ended September 30, 2025, up from $123,424 in the prior year, primarily driven by an increase in selling, general and administrative expenses to $137,875 from $70,166. The company's cash position improved to $23,358 as of September 30, 2025, from $450 on March 31, 2025, largely due to $103,394 in proceeds from related party advances and $8,500 from common share issuance. However, the working capital deficit expanded to $257,956, and the accumulated deficit grew to $634,009, raising substantial doubt about its ability to continue as a going concern. The company is actively seeking new funding and a new operating location in Ft. Lauderdale, Florida, after terminating its previous lease effective June 30, 2024.

Why It Matters

This filing reveals a critical juncture for MEDICAL EXERCISE INC., with zero revenue and a substantial net loss of $155,010 for the past six months, indicating a complete halt in core operations. For investors, this signals extreme risk, as the company's ability to continue is dependent on securing new funding and a new physical location, which is highly uncertain. Employees face job insecurity given the operational standstill and going concern warning. Customers, particularly those seeking physical therapy services for back or neck pain, are directly impacted by the company's lack of an operating facility. In the competitive physical therapy market, MEDICAL EXERCISE INC.'s current state suggests it is losing ground rapidly, potentially creating opportunities for rivals.

Risk Assessment

Risk Level: high — The company explicitly states a 'working capital deficit of $257,956' and a 'net loss of $155,010' for the six months ended September 30, 2025, which 'raise substantial doubt about the Company's ability to continue as a going concern.' Furthermore, it generated '$ -' in revenues for the three and six months ended September 30, 2025, indicating a complete lack of operational income.

Analyst Insight

Investors should avoid MEDICAL EXERCISE INC. given its zero revenue, significant losses, and explicit going concern warning. Monitor for concrete evidence of successful capital raises and the establishment of a new, revenue-generating operating facility before considering any investment.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

$69,505

total Debt

$281,314

net Income

$-155,010

eps

$-0.01

gross Margin

N/A

cash Position

$23,358

revenue Growth

-100.0%

Revenue Breakdown

Key Numbers

• $155,010 — Net loss for six months ended September 30, 2025 (Increased from $122,186 in the prior year, indicating worsening financial performance.)
• $0 — Revenue for six months ended September 30, 2025 (Represents a complete cessation of revenue generation, down from $1,294 in 2024.)
• $257,956 — Working capital deficit as of September 30, 2025 (Indicates current liabilities significantly exceed current assets, raising going concern doubts.)
• $634,009 — Accumulated deficit as of September 30, 2025 (Reflects substantial historical losses, increasing from $478,999 on March 31, 2025.)
• $23,358 — Cash as of September 30, 2025 (An increase from $450 on March 31, 2025, primarily from financing activities, not operations.)
• $103,394 — Proceeds from related party advances for six months ended September 30, 2025 (Key source of liquidity, highlighting reliance on related party funding.)
• 12,327,000 — Common shares outstanding as of December 15, 2025 (Represents the total number of shares issued and outstanding.)
• $137,875 — Selling, general and administrative expenses for six months ended September 30, 2025 (Increased significantly from $70,166 in the prior year, contributing to higher operating expenses.)

Key Players & Entities

• MEDICAL EXERCISE INC. (company) — Registrant
• SEC (regulator) — U.S. Securities and Exchange Commission
• MedX Back Pain Clinics Inc. (company) — Previous name of the registrant
• Florida (company) — State of incorporation
• Ft. Lauderdale, Florida (company) — Location where the company is exploring new operations
• FASB (regulator) — Financial Accounting Standards Board
• Federal Deposit Insurance Corporation (regulator) — Insurer of bank accounts

FAQ

Risk Factors

• Going Concern Doubt [high — financial]: The company has a working capital deficit of $257,956 as of September 30, 2025, and incurred a net loss of $155,010 for the six months ended September 30, 2025. Net cash used in operating activities was $100,424 during the same period, raising substantial doubt about its ability to continue as a going concern.
• Dependence on Related Party and External Funding [high — financial]: The company's ability to continue operations is dependent on obtaining additional capital through equity or debt offerings, or other sources. During the six months ended September 30, 2025, $102,094 in net advances were received from a related party, highlighting reliance on this funding.
• Cessation of Revenue Generation [high — operational]: The company generated no revenue for the three and six months ended September 30, 2025, a complete halt from the $1,294 generated in the prior year. This lack of revenue is a critical operational risk.
• Lease Termination and Relocation Uncertainty [medium — operational]: The company terminated its previous office lease effective June 30, 2024, and is actively searching for a new operating location in Ft. Lauderdale, Florida. Uncertainty regarding securing a new location and associated costs poses an operational risk.
• Increasing Operating Expenses [medium — financial]: Total operating expenses rose to $154,143 for the six months ended September 30, 2025, from $123,424 in the prior year. This increase was primarily driven by a significant rise in selling, general and administrative expenses to $137,875 from $70,166.
• Growing Accumulated Deficit [medium — financial]: The accumulated deficit has grown to $634,009 as of September 30, 2025, an increase from $478,999 on March 31, 2025. This reflects substantial historical losses and a persistent inability to achieve profitability.

Industry Context

Medical Exercise Inc. operates in the physical therapy services sector, focusing on individuals with back or neck pain. This industry is generally characterized by a need for specialized equipment, qualified personnel, and adherence to healthcare regulations. The competitive landscape can include independent clinics, hospital-based physical therapy departments, and larger healthcare systems.

Regulatory Implications

As a healthcare provider, Medical Exercise Inc. is subject to various healthcare regulations, including those related to patient privacy (HIPAA) and potentially licensing requirements depending on its service offerings and location. Failure to comply with these regulations could result in fines or operational disruptions.

What Investors Should Do

1. Monitor funding efforts closely
2. Evaluate the new operating location strategy
3. Assess the viability of the business model without revenue
4. Scrutinize related party transactions

Key Dates

• 2024-06-30: Lease termination effective — The company ceased operations at its previous location, necessitating a search for a new operating base.
• 2024-11-05: Name change to Medical Exercise Inc. — Reflects a rebranding or shift in the company's identity.
• 2025-09-30: Balance Sheet date — Shows a significant working capital deficit of $257,956 and a cash balance of $23,358.
• 2025-09-30: End of interim reporting period — Period during which revenue was $0 and net loss was $155,010.

Glossary

Working capital deficit

A situation where a company's current liabilities exceed its current assets, indicating potential short-term liquidity issues. (The company has a substantial working capital deficit of $257,956 as of September 30, 2025, contributing to going concern doubts.)

Accumulated deficit

The total cumulative net losses of a company since its inception that have not been offset by profits. (The company's accumulated deficit grew to $634,009 as of September 30, 2025, indicating significant historical unprofitability.)

Going concern

An assumption that a company will continue to operate for the foreseeable future, typically at least 12 months from the reporting date. (Substantial doubt exists regarding Medical Exercise Inc.'s ability to continue as a going concern due to its financial condition.)

Related party advances

Loans or financial contributions provided by individuals or entities that have a close relationship with the company, such as major shareholders or management. (The company received $103,394 in proceeds from related party advances, a key source of its current liquidity.)

Selling, general and administrative expenses (SG&A)

Costs incurred by a company for selling products and managing its overall business operations, excluding direct costs of production. (SG&A expenses increased significantly to $137,875 for the six months ended September 30, 2025, driving up total operating expenses.)

Year-Over-Year Comparison

Compared to the prior year's six-month period, Medical Exercise Inc. has seen a dramatic deterioration in its financial performance. Revenue has dropped from $1,294 to $0, while the net loss has widened from $122,186 to $155,010. Operating expenses have increased, driven by a near doubling of SG&A costs. The company's cash position has improved due to financing, but its working capital deficit and accumulated deficit have both grown substantially, intensifying going concern risks.

Key Financial Figures

• $0.001 — g) of the Act: Common Stock, par value $0.001 per share Indicate by check mark if th

Filing Documents

• ea0268980-10q_medical.htm (10-Q) — 381KB
• ea026898001ex31-1_medical.htm (EX-31.1) — 9KB
• ea026898001ex32-1_medical.htm (EX-32.1) — 4KB
• 0001213900-25-121625.txt ( ) — 2877KB
• ck0002001249-20250930.xsd (EX-101.SCH) — 28KB
• ck0002001249-20250930_cal.xml (EX-101.CAL) — 28KB
• ck0002001249-20250930_def.xml (EX-101.DEF) — 133KB
• ck0002001249-20250930_lab.xml (EX-101.LAB) — 236KB
• ck0002001249-20250930_pre.xml (EX-101.PRE) — 145KB
• ea0268980-10q_medical_htm.xml (XML) — 215KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements MEDICAL EXERCISE INC.

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS Page Balance Sheets as of September 30, 2025 (Unaudited) and March 31, 2025 F-2 F-3 F-4 F-6 Condensed Notes to Financial Statements (Unaudited) F-7 F-1 MEDICAL EXERCISE INC. BALANCE SHEETS September 30, March 31, 2025 2025 (Unaudited) Assets Current assets: Cash $ 23,358 $ 450 Total current assets 23,358 450 Property and equipment, net 41,273 59,903 Intangible assets, net 4,874 4,908 Total assets $ 69,505 $ 65,261 Liabilities and Stockholders' Deficit Current liabilities: Accounts payable and accrued expenses $ 93,018 $ 46,358 Advances payable - related parties 181,642 79,548 Contract liabilities 5,929 5,929 Sales tax payable 725 725 Total current liabilities 281,314 132,560 Commitments and contingencies - See Note 7 Stockholders' deficit: Common stock, no par value; 100,000,000 shares authorized; 12,327,000 and 12,222,000 shares issued and outstanding, respectively 422,700 412,200 Subscription receivable ( 5,000 shares) ( 500 ) ( 500 ) Accumulated deficit ( 634,009 ) ( 478,999 ) Total stockholders' deficit ( 211,809 ) ( 67,299 ) Total liabilities and stockholders' deficit $ 69,505 $ 65,261 The accompanying condensed notes are an integral part of the unaudited financial statements. F-2 MEDICAL EXERCISE INC. (Unaudited) For the For the For the For the Three Months Three Months Six Months Six Months Ended Ended Ended Ended September 30, September 30, September 30, September 30, 2025 2024 2025 2024 Revenues $ - $ - $ - $ 1,294 Cost of revenues - - - 445 Operating pro

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2025 AND 2024 NOTE 1 — NATURE OF OPERATIONS Overview Medical Exercise Inc. (the "Company") is a provider of physical therapy services for individuals suffering from back or neck pain. The Company offered its services in one location until providing notice to the landlord to terminate its office space effective June 30, 2024. Subsequent to providing notice termination of the lease, the Company began the search for another location for its operations. The Company is exploring options in Ft. Lauderdale, Florida. The Company's fiscal year end is March 31. The Company, having originally incorporated as MedX Back Pain Clinics Inc. on September 21, 2023, changed its name to Medical Exercise Inc. on November 5, 2024. NOTE 2 — GOING CONCERN AND MANAGEMENT'S LIQUIDITY PLANS As of September 30, 2025, the Company had cash of $ 23,358 and a working capital deficit (current liabilities in excess of current assets) of $ 257,956 . During the six months ended September 30, 2025, the net loss was $ 155,010 and net cash used in operating activities was $ 100,424 . These conditions raise substantial doubt about the Company's ability to continue as a going concern for one year from the issuance of the financial statements. During the six months ended September 30, 2025, the Company received proceeds of $ 8,500 from the issuance of common shares and advances of $ 102,094 , net of repayments, from a related party. The Company has experienced net losses and negative cash flows from operations since inception. The Company's ability to continue its operations is dependent upon its ability to obtain additional capital through public or private equity offerings, debt financings or other sources; however, financing may not be available to the Company on acceptable terms, or at all. The Company's failure to raise capital as and when needed could have a negative impact on its financial condition and its ability to pursue its business strat

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2025 AND 2024 NOTE 3 — ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") for financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). In the opinion of the Company's management, all adjustments (consisting of normal recurring adjustments and reclassifications and non-recurring adjustments) necessary to present fairly the results of operations for the three and six months ended September 30, 2025 and 2024, cashflows for the six months ended September 30, 2025 and 2024, and the balance sheet at September 30, 2025 have been made. The Company's results of operations for such interim periods are not necessarily indicative of the operating results to be expected for the full fiscal year ending March 31, 2026. Certain information and disclosures normally included in the notes to the Company's annual audited financial statements have been condensed or omitted from the Company's interim unaudited financial statements. Accordingly, these interim unaudited financial statements should be read in conjunction with the Company's audited financial statements and notes thereto for the fiscal year ended March 31, 2025. The March 31, 2025 balance sheet is derived from those statements. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates in the accompanying financial statements include the valuation of propert

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2025 AND 2024 Fair Value Measurements Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company classifies assets and liabilities recorded at fair value under the fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. Property and Equipment Property and equipment consists of machinery and equipment and leasehold improvements and is recorded at cost. Repairs and maintenance costs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is recorded over the estimated useful lives of the related assets using the straight-line method, or, in the case of leasehold improvements, the lease term, i

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2025 AND 2024 Reclassifications Certain reclassifications have been made to the prior years' data in order to conform to the current year presentation. These reclassifications had no effect on reported losses. In particular, director fees and management fees have been reclassified from Selling, general and administrative expenses to Compensation expense. Income Taxes The Company accounts for its income taxes in accordance with accounting principles generally accepted in the United States of America, which requires, among other things, recognition of future tax benefits and liabilities measured at enacted rates attributable to temporary differences between financial statement and income tax bases of assets and liabilities and to net tax operating loss carryforwards to the extent that realization of these benefits is more likely than not. The Company periodically evaluates the realizability of its net deferred tax assets. The Company's policy is to account for interest and penalties relating to income taxes, if any, in "income tax expense" in its statements of operations and include accrued interest and penalties within "accrued liabilities" in its balance sheets, if applicable. For the periods presented, no income tax related interest or penalties were assessed or recorded. Revenue Recognition and Contract Liabilities The Company follows Accounting Standards Codification 606 ("ASC 606"). ASC 606 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASC also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer purchase orders, including significant judgments. Revenues consist of fees derived from individuals that receive treatment services on the Comp

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2025 AND 2024 Advertising The Company charges the costs of advertising to expense as incurred. Advertising costs were $ 177 and $ 1,209 for the three and six months ended September 30, 2025 and $ 20 and $ 5,416 for the three and six months ended September 30, 2024, respectively. Stock-Based Compensation Expense Stock-based compensation expense is measured at the grant date fair value of the award and is expensed over the requisite service period. For stock-based awards to employees, non-employees and directors, the Company calculates the fair value of the award on the date of grant using the Black-Scholes option pricing model, which includes variables such as the expected volatility of the Company's share price, the exercise behavior of its grantees, interest rates, and dividend yields. These variables are projected based on the Company's historical data, experience, and other factors. In the case of awards with multiple vesting periods, the Company has elected to use the graded vesting attribution method, which recognizes compensation cost on a straight-line basis over each separately vesting portion of the award as if the award was, in substance, multiple awards. Leases In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02, Leases (Topic 842). The updated guidance requires lessees to recognize lease assets and lease liabilities for most operating leases. In addition, the updated guidance requires that lessors separate lease and non-lease components in a contract in accordance with the new revenue guidance in ASC 606. Under Topic 842, operating lease right of use ("ROU") assets represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company may utilize an incremental borr

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2025 AND 2024 Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, which simplifies the guidance on accounting for convertible debt instruments by removing the separation models for: (1) convertible debt with a cash conversion feature; and (2) convertible instruments with a beneficial conversion feature. As a result, the Company will not separately present in equity an embedded conversion feature in such debt. Instead, we will account for a convertible debt instrument wholly as debt, unless certain other conditions are met. We expect the elimination of these models will reduce reported interest expense and increase reported net income for the Company's convertible instruments falling under

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