SecProbe.io

CORRESP
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filename1.htm

    SCOTT
    D. OLSON ESQ.

    Attorney
    at Law

    274 broadway

    Costa mesa, ca 92627

    M.
    310.985.1034

    e.
    sdoesq@gmail.com

March 31, 2025

United States Securities and Exchange Commission

Division of Corporation Finance

Office of Industrial Applications and Services

100 F Street, N.E.

Washington, DC 20549

Attention:  J. Conlon Danberg

 Re: Medical Exercise Inc.

Registration Statement on Form S-1

Filed January 27, 2025

File No. 333-284522

Ladies and Gentlemen:

This letter sets forth the responses of Medical
Exercise Inc. ("Company") to the comments of the reviewing Staff of the Securities and Exchange Commission (the “Staff”)
in connection with the above referenced filing as set forth in the comment letter dated February 23, 2025.

Prospectus Summary

Our Business, page 1

 1. It appears from your disclosure that you may be a shell company pursuant to Rule 405 under the Securities Act. In this regard,
we note that you currently appear to have no or nominal operations. Additionally, your non-cash assets as of September 30, 2024 appear
to be primarily comprised of $64,452 of property and equipment, net. However, you also note that you recognized aggregate impairment expense
of $47,772 due to certain long-lived assets having a fair value less than their carrying value and recognized a gain on the sale of property
and equipment during the three months ended September 30, 2024. Please explain whether you currently have more than nominal non-cash assets
and provide us with a detailed legal analysis explaining why you are not a shell company or otherwise prominently disclose your shell
company status on the cover page and the discuss the consequences of your shell company status throughout the registration statement,
such as the restrictions on your ability to use registration statements on Form S-8, enhanced reporting requirements imposed on shell
companies, the limitations on the ability of your security holders to resell their securities in reliance on Rule 144, and the potential
reduced liquidity or illiquidity of your securities.

Response:

We appreciate your comments regarding our shell
company status under Rule 405 of the Securities Act. We have carefully reviewed the issue, and below provide a detailed response to clarify
why Medical Exercise Inc. does not qualify as a shell company under Rule 405 and why we believe we should not be classified as one.

SCOTT D. OLSON ESQ.

In SEC Release No. 33-8587, published on July
15, 2005 (the “Release”), the Securities and Exchange Commission (the “SEC”) defined a “shell company”
as a company with no or nominal operations, and either no or nominal assets or assets consisting of any amount of cash and cash equivalents
and nominal other assets. In adopting this definition, the Commission stated in the Release that it was trying to better describe the
type of companies that were involved in certain schemes referred to in the Release. Specifically, it was focusing on companies which were
essentially non-operating public companies that had no business or purpose other than a potential business combination transaction. Thus,
the purpose of the shell definition was to provide a mechanism to address these types of schemes, and not to hamper the development of
startups and development stage companies. Further, the SEC stated that it intentionally did not define the term “nominal”
and it did not set a quantitative threshold of what constitutes a shell company. The SEC stated, “We are not defining the term ‘nominal,’
as we believe that this term embodies the principle that we seek to apply and is not inappropriately vague or ambiguous.” Indeed,
the challenge presented to the SEC is providing a definition that can fit a variety of industries. For example, an oil and gas company
or manufacturing operation would likely require much greater assets and operations than a software as a service company. Merriam-Webster
defines nominal as “existing as something in name only: not actual or real: very small amount.”

The SEC attempted to provide some clarity regarding
what they deemed “nominal” as a footnote to the Release (generally referred to as “Footnote 32”). In addition,
under the definition set forth in Rule 12b-2 under the Exchange Act and Rule 405 of the Securities Act, if a company has more than nominal
operations, further inquiry is not necessary as the company is not a shell company. Both Acts define a shell company as follows:

The term shell company means a registrant, other
than an asset-backed issuer as defined in

Item 1101(b) of Regulation AB, that has:

1. No or nominal operations; and

2. Either:

a. No or nominal assets;

b. Assets consisting solely
of cash and cash equivalents; or

c. Assets consisting of any
amount of cash and cash equivalents and nominal other assets.

Thus, the rule requires an analysis of, first,
the operations of the company as nominal or not. If it is determined that the issuer has greater than nominal operations, no further analysis
is required. However, if nominal operations are determined, we must then analyze the assets. The assets can be neither nominal nor solely
consisting of cash and cash equivalent. Again, the determination of nominal is on a case by case basis. However, if an issuer whose assets
consist solely of cash or cash equivalents, the issuer would be deemed a shell. It should be noted that although revenues are a good indicator
of actual operations, the lack of revenues alone does not deem an issuer to have less than nominal operations.

    PAGE 2

SCOTT D. OLSON ESQ.

As previously stated, due to the less than precise
definition of a ‘nominal” each issuer must be evaluated on a case by case basis. In evaluating an issuer’s shell status,
we must look at the requirements of the issuer to successfully operate their business. What is more, the SEC has expressly stated in in
Footnote 172 of the Release, the restrictions of a shell company as stated under Rule 144, generally, are not intended to “capture”
startup companies with limited operating history. Therefore, the fact that an issuer has limited operations and assets or is a development
stage company does not make an issuer a shell company, so long as it has taken active steps to implement a legitimate business plan, AND
the issuer has no intention of placing an operating business, with operations and/or assets in excess of nominal within the issuer in
order to avoid the restrictions of Rule 419 and seek an acquisition target otherwise.

Analyzing Medical Exercise Inc. as it relates
a shell company:

Business Operations and Activity

While we recognize that, as of September 30, 2024,
our non-cash assets consist primarily of property and equipment valued at $64,452, we respectfully submit that this does not mean we are
a shell company. The fact that we have non-cash assets, such as property and equipment, coupled with our ongoing operations and expansion
efforts, demonstrates that we have more than nominal operations.

As disclosed in our S-1, we are actively in the
business of providing spinal care services and have operated a fully staffed clinic in North Palm Beach, Florida, from January 2024 through
June 2024. This clinic served as a vital test location for our business model, refining our systems, staff training, operational procedures,
and general workflows. Despite its closure in September 2024, we continue to maintain the North Palm Beach location’s property and
have incurred ongoing rent payments to expedite its relocation. This demonstrates that we are actively working toward furthering our business
and operations.

Additionally, as of June 2024, we received possession
of 2 MedX, Inc. (MedX) medical lumbar extension machines, which are stored and ready for use in opening a second location. This marks
an essential step in our expansion strategy. We are also actively looking for suitable locations to secure the new clinic and have plans
to relocate the Palm Beach clinic to a higher-traffic area, with an estimated cost of $500,000 to relocate and operate. This further reinforces
that we are an active business with ongoing operational plans.

This a timeline of material activity:

 ● September 21, 2023: Medical Exercise Inc. is incorporated in Florida.

 ● September 2023: The company acquired certain assets of MedX Fit Tech Inc., marking the transition to operating
as a spinal care clinic provider.

    PAGE 3

SCOTT D. OLSON ESQ.

 ● Late 2023: The company operates in the early stages of establishing its business model, focusing on the
development of spinal care services and technology integration, and facility renovations.

 ● January 2024-June 2024: The first clinic in North Palm Beach is fully staffed and operational. This location
serves as a critical foundation for the company, offering a cost-effective and efficient environment to fine-tune and validate the business
model. The North Palm Beach clinic required very little renovation, allowing the company to adopt a capital-light approach and test and
fine tune its systems, staff training, establish operation procedures, and general workflows affordably. It provided valuable insights
that enabled the company to refine and validate its processes and prepare for future clinic expansions.

 ● June 2024: Medical Exercise Inc. receives possession of 2 MedX medical lumbar extension machines, which
are currently in storage and ready for use in opening a second location once the North Palm Beach clinic has been relocated and operational.

 ● September 2024: The company exits the North Palm Beach location as part of its strategic move to a more
prominent, high-traffic site.

 ● October 2024: The company begins planning for its next clinic location with a focus on higher visibility
and convenience, targeting retail centers for expansion.

 ● Late 2024: Medical Exercise Inc. evaluates its early operations, with the intention to refine business
practices and focus on expanding its clinic base.

 ● 2025 (Ongoing): The company actively looks for suitable locations for its clinic. The estimated cost to
relocate and operate the North Palm Beach clinic model in a new high-traffic location is approximately $500,000. In addition to our spinal
care operations, Medical Exercise Inc. is actively engaged in ongoing research and development within the fitness industry, focusing on
building strength training programs, nutrition strategies, and assessment techniques to enhance overall physical health and rehabilitation
outcomes.

Non-Cash Assets and Impairment

Regarding the impairment expense of $47,772 recognized
on certain long-lived assets, we would like to emphasize that this impairment was a non-cash transaction. The impairment was primarily
a result of adjusting certain assets to their fair market value as part of our ongoing asset management strategy, especially as we refine
our business model. While we recognized a gain on the sale of property and equipment during the three months ended September 30, 2024,
this sale was part of our strategy to reposition assets and enhance our ability to move forward with operations, particularly the relocation
of the clinic and the acquisition of new equipment. While the impairment expense reflects some adjustments in asset values, it should
not be viewed as indicative of a lack of operations or business activity. Rather, it reflects the company’s ongoing efforts to optimize
its operations and realign its assets as it prepares for future expansion.

Shell Analysis:

 1. Active Operations: We have successfully operated a clinic in North Palm Beach and are actively planning
for licensing technology and assets for a relocation and opening of a new clinic. We are not merely holding assets; we are engaged in
active business operations within the spinal care and rehabilitation industry. The North Palm Beach clinic, though closed, was an essential
operational site that allowed us to validate and fine-tune our business model and test our processes in a real-world environment.

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SCOTT D. OLSON ESQ.

 2. Non-Cash Assets: Our property and equipment, including the MedX medical lumbar extension machines we’ve
acquired, are critical non-cash assets necessary for our business operations. These assets are not sitting idle; they are integral to
the operation of our clinics, and we are actively using them to prepare for the opening of additional locations. We also continue to hold
these assets as we prepare for further business development, which clearly exceeds the nominal asset threshold.

 3. Expansion and Growth: We are actively looking for suitable locations for our second clinic and have already
secured medical equipment to support the expansion. The relocation and operation of the North Palm Beach clinic in a new location is a
key part of our growth strategy. The company has an ongoing plan for further clinic openings and is working towards securing funding for
the next stage of growth.

Based on the facts above, we believe that Medical
Exercise Inc. does not meet the definition of a shell company under Rule 405. While our non-cash assets, including property and equipment,
have been adjusted for impairment, we are actively engaged in a legitimate business operation with plans for expansion. We are not just
holding assets; we are using them to develop and grow our business.

Given these factors, we respectfully request that
the SEC reconsider the classification of Medical Exercise Inc. as a shell company and allow us to proceed with our registration as planned.
We also note that we prominently disclose our non-shell status throughout the registration statement, including the consequences of being
considered a shell company, such as the restrictions on the use of Form S-8, enhanced reporting requirements, and limitations on the resale
of securities under Rule 144, should any of these matters need to be addressed further.

 2. We note your statement that Medical Exercise Inc. owns a pain clinic located in the city of North Palm
Beach that recently closed. We also refer to your statements on page 26 that you do not own any real estate or other properties and on
page 32 that you exited the sublease for this initial clinic location. Please revise your disclosure in the prospectus summary and throughout
the prospectus to clarify, if true, that you do not currently own or operate any clinics. If the North Palm Beach location is permanently
closed, please clearly state so instead of using the present tense.

Response: The North Palm Beach location
is permanently closed. We have revised the prospectus to clarify this and remove the present tense.

 3. Please provide a description of your material business operations during the time when the business
is not operating any clinics as well as the steps you will need to take to open and operate any new clinics or otherwise execute on your
business plan, including the current status and expected timeline of your growth strategy. In this regard, we note the following statements
on page 35 that appear to contradict the description of your business plan elsewhere in the prospectus: "We do not intend to own
and operate fitness centers directly. Our primary focus will initially be on licensing, and then ultimately franchising, our comprehensive
system to independent operators."

Response: We note our description of our business in response
to comment 1. Our material business operations during the time when the business is not operating any clinics have been focused on searching
for a new location, researching opportunities in the fitness industry and prepare for the company’s public listing. We intend to
raise additional capital to fund the relocation and expansion within the next 6 months. Our plan is move away from an operator model to
a licensee and ultimately, a franchisee model.

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SCOTT D. OLSON ESQ.

 4. Please revise to balance your disclosure in the Prospectus Summary
to