UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2026

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to____________

Commission File Number: 000-56745

MEDICAL EXERCISE INC.

(Exact name of registrant as specified in its charter)

4051 Albert Street

Regina, SK, Canada S4S 3R6

Registrant’s Principal Executive Offices

(561) 772-3853

(Registrant’s telephone number, including area code)

7901 4th St N STE 300

St. Petersburg, FL 33702

Agent for Service

(850) 807-4500

(Agent’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act:

Securities registered pursuant to section 12(g) of the Act:

Common Stock, no par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transaction period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

As of August 19, 2026, there were 13,327,000 shares of common stock, no par value , issued and outstanding.

MEDICAL EXERCISE INC.

Quarterly Report on Form 10-Q

For the Quarter ended June 30, 2026

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

MEDICAL EXERCISE INC.

BALANCE SHEETS

The accompanying condensed notes are an integral part of the unaudited financial statements.

MEDICAL EXERCISE INC.

STATEMENTS OF OPERATIONS

(Unaudited)

The accompanying condensed notes are an integral part of the unaudited financial statements.

MEDICAL EXERCISE INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED JUNE 30, 2026 AND 2025

The accompanying condensed notes are an integral part of the unaudited financial statements.

MEDICAL EXERCISE INC.

STATEMENTS OF CASH FLOWS

(Unaudited)

The accompanying condensed notes are an integral part of the unaudited financial statements.

MEDICAL EXERCISE INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2026 AND 2025

MEDICAL EXERCISE INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2026 AND 2025

MEDICAL EXERCISE INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2026 AND 2025

MEDICAL EXERCISE INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2026 AND 2025

MEDICAL EXERCISE INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2026 AND 2025

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with the “Summary Statements of Operations Data” and our financial statements and the notes to those statements appearing elsewhere in this quarterly report. This discussion and analysis contains forward-looking statements reflecting our management’s current expectations that involve risks, uncertainties and assumptions. Our actual results and the timing of events may differ materially from those described in or implied by these forward-looking statements due to several factors, including those discussed below and elsewhere in this quarterly report.

Overview

Going Concern

We have financed operations primarily through the sale of equity securities and short-term debt. Until revenues are sufficient to meet our needs, we will continue to attempt to secure financing through equity and/or debt securities. We continue to incur negative cash flows from operating activities and net losses. We had minimal cash, negative working capital, and negative total equity as of June 30, 2026. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The financial statements included in this quarterly report do not include any adjustments that might result from the outcome of this uncertainty.

For us to eliminate substantial doubt about our ability to continue as a going concern, we must achieve profitability, generate positive cash flows from operating activities and obtain the necessary debt or equity funding to meet our projected capital investment requirements. Our management’s plans with respect to this uncertainty consist of raising additional capital by issuing debt or equity securities and increasing the sales of our products and services. There can be no assurance, however, that we will be able to raise sufficient additional capital or that revenues will increase rapidly enough to offset operating losses. If we are unable to increase revenues or obtain additional financing, we will be unable to continue the development of our products and services and may have to cease operations.

Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included elsewhere in this prospectus.

Three Months Ended June 30, 2026 and 2025.

Revenues for the three months ended June 30, 2026 and 2025 was $1,000 and $0, respectively. Revenue recognized during the three months ended June 30, 2026 consisted of a one-time franchise fee of $1,000 received pursuant to a franchise agreement entered into during the period with Degco Fitness Ventures Ltd., a related party entity controlled by the Company’s President and Chief Executive Officer.

Compensation expense for the three months ended June 30, 2026 and 2025 was $5,000 and $5,000, respectively. Compensation expense remained flat year-over-year as officer compensation terms remained unchanged during the periods.

Depreciation and amortization expense for the three months ended June 30, 2026 and 2025 was $542 and $2,881, respectively, a decrease of $2,339, or 81%. Depreciation decreased in the current year period primarily due to the sale of property and equipment in July 2025, March 2026 and April 2026. Amortization decreased in the current year period as a result of the derecognition of the legacy website in March 2026.

Selling, general and administrative expenses for the three months ended June 30, 2026 and 2025 was $48,227 and $61,378, respectively, a decrease of $13,151, or 21%. Selling, general and administrative expenses decreased in the current year period primarily due to decreased professional fees and legal fees during the current year period.

Gain on disposal of property and equipment for the three months ended June 30, 2026 and 2025 was $103 and $0, respectively, an increase of $103. Gain on disposal of property and equipment increased in the current year period due to the sale of property and equipment in the current year period.

The net loss for the three months ended June 30, 2026 and 2025 was ($52,666) and ($70,291), respectively, a decrease in the net loss of $17,625, or 25%. The net loss for the current year period decreased primarily due to lower selling, general and administrative expenses and depreciation and amortization during the current year period.

Capital Resources and Liquidity

Net cash used in operating activities for the three months ended June 30, 2026 and 2025 was ($46,722) and ($78,583), respectively, a decrease of $31,861, and resulted primarily from a decrease in the net loss of $17,625 and an increase in accounts payable and accrued expenses of $19,678.

Net cash provided by (used in) investing activities for the three months ended June 30, 2026 and 2025 was $6,362 and ($900), respectively, a change of $7,262, and resulted from an increase in proceeds from the sale of property and equipment of $7,462, partially offset by an increase in purchases of intangible assets of $200.

Net cash provided by financing activities for the three months ended June 30, 2026 and 2025 was $0 and $82,824, respectively, a decrease of $82,824, and resulted from a decrease in proceeds from the sale of common shares of $8,500, and a decrease in advances, net of repayments, received from the Company’s directors of $74,324.

As of June 30, 2026, we had $3,089 in cash and a working capital deficit of $238,799.

Off Balance Sheet Arrangements

None

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company, we are not required to provide information required by this Item.

Item 4. Controls and Procedures.

Within 90 days prior to the end of the period covered by this report the registrant carried out an evaluation of the effectiveness of the design and operation of disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This evaluation was done under the supervision and with the participation of registrants President and Principal Financial Officer. Based on that Evaluation he concluded that the registrant’s disclosure controls and procedures are not effective in gathering, analyzing and disclosing information needed to satisfy the registrant’s disclosure obligations under the Exchange Act due to the material weaknesses disclosed below.

There were no significant changes in the registrant’s disclosure control and procedure, in factors that could significantly affect those controls and procedures since their most recent evaluation.

Item 4(T). Controls and Procedures

Our management is responsible for establishing and maintaining adequate internal control over financial report for the company. Internal control over financial reporting is to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition , use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected.

As of June 30, 2026, management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures that the Company’s management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and lack of a majority of outside directors on the Company’s board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by the Company’s Chief Financial Officer in connection with the audit of our financial statements as of March 31, 2026, and communicated to our management.

Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not have an effect on the Company’s financial results. However, management believes that the lack of a functioning audit committee and lack of a majority of outside directors on the Company’s board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures can result in the Company’s determination to its financial statements for the future years.

We are committed to improving our financial organization. As part of this commitment, we will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to the Company: i) Appointing one or more outside directors to our board of directors who shall be appointed to the audit committee of the Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; and ii) Preparing and implementing sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.

Management believes that the appointment of more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on the Company’s Board. In addition, management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support the Company if personnel turn over issues within the department occur. This coupled with the appointment of additional outside directors will greatly decrease any control and procedure issues the company may encounter in the future.

We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

There have been no significant changes in our internal controls over financial reporting that occurred during the year ended March 31, 2026, that have materially affected or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our Directors, Officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors.

As a “smaller reporting company” (as defined in Exchange Act Rule 12B-2), we are not required to provide the information required by this Item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None. The Company did not issue or sell any unregistered equity securities or equity-linked securities during the quarterly period covered by this report.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None

Item 6. Exhibits.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.