MED SPA VACATIONS INC. - Quarter Report: 2022 March (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

Commission file number: 333-210922

500 W. 5th Street, Suite 800, PMB #59, Winston Salem, NC 27101

(Address of principal executive offices)

(845) 548-3280

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

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.

☒ No ☐

(Note: The registrant is a voluntary filer of reports under Section 13 or 15(d) of the Securities Exchange Act of 1934; the registrant has filed during the preceding 12 months all reports it would have been required to file by Section 13 or 15(d) of the Securities Exchange Act of 1934 if the registrant had been subject to one of such Sections.)

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 this registrant has elected not to use the extended transition 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 Exchange Act). Yes ☒ No ☐

As of April 27, 2022, there were 10,005,000 shares of the registrant’s common stock, par value $0.001 per share, issued and outstanding.

MED SPA VACATIONS INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022

TABLE OF CONTENTS

MED SPA VACATIONS, INC.

INDEX TO AUDITED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MARCH 31, 2022

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

MED SPA VACATIONS INC.

Balance Sheets

(Unaudited)

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

MED SPA VACATIONS INC.

Statements of Operations

(Unaudited)

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

MED SPA VACATIONS INC.

Statements of Stockholders’ Deficit

(Unaudited)

For the Three Months Ended March 31, 2022

For the Three Months Ended March 31, 2021

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

MED SPA VACATIONS INC.

Statements of Cash Flow

(Unaudited)

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

MED SPA VACATIONS INC.

Notes to the Unaudited Financial Statements

March 31, 2022

Note 1 - Summary of Significant Accounting Policies

Basis of Presentation of Unaudited Interim Financial Statements

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of March 31, 2022, and the results of operations and cash flows for the periods presented. The results of operations for the period ended March 31, 2022, are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited interim financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 24, 2022.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. The Company had $5,899 and $2,266 in cash as of March 31, 2022 and December 31, 2021, respectively.

Reclassification

Certain accounts from prior periods have been reclassified to conform to the current period presentation.

Note 2 – Going Concern

Going concern and Liquidity Considerations

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of March 31, 2022, the Company has reoccurring losses from operations, an accumulated deficit of $568,971 and has earned no revenues. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending December 31, 2022.

The ability of the Company to emerge from the early stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings.

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 3 – Related Party Transactions

Note payable – related party

On May 10, 2021, the Company received a loan of $100,000 from Peter L. Coker, Sr., a shareholder of the Company. To evidence said loan, the Company issued to Mr. Coker a promissory note in the principal amount of $100,000 (in this case, the “Note”), with a maturity date of May 9, 2022. Interest on the Note accrues on the principal amount at the rate of six percent (6%) per annum, and shall be paid on a quarterly basis, in the amount of $1,500 per quarter, on the following dates: August 10, 2021, November 10, 2021, February 10, 2022, and May 10, 2022. The Company may prepay any amounts due under the Note without penalty or premium.

On September 28, 2021, the Company received a loan of $15,000 from Peter L. Coker, Sr., a shareholder of the Company. To evidence said loan, the Company issued to Mr. Coker a promissory note in the principal amount of $15,000 (in this case, the “Note”), with a maturity date of September 27, 2022. Interest on the Note accrues on the principal amount at the rate of six percent (6%) per annum, and shall be paid on a quarterly basis, in the amount of $225 per quarter, on the following dates: December 28, 2021, March 28, 2022, June 28, 2022, and September 27, 2022. The Company may prepay any amounts due under the Note without penalty or premium. On March 29, 2022, the Company repaid in full all outstanding principal note of $15,000 and an interest of $225. The Company did not incur any early termination penalties as a result of the repayment of indebtedness and termination of the loan.

 On October 27, 2021, the Company received a loan of $5,250 from Peter L. Coker, Sr., a shareholder of the Company. To evidence said loan, the Company issued to Mr. Coker a promissory note in the principal amount of $5,250 (in this case, the “Note”), with a maturity date of October 26, 2022. Interest on the Note accrues on the principal amount at the rate of six percent (6%) per annum, and shall be paid on a quarterly basis, in the amount of $78.75 per quarter, on the following dates: January 27, 2022, April 27, 2022, July 27, 2022, and October 26, 2022. The Company may prepay any amounts due under the Note without penalty or premium.

On November 29, 2021, the Company received a loan of $8,500 from Fiesta Homes, LLC (“Fiesta”), which controlled by family member of a shareholder of the Company. To evidence said loan, the Company issued to Fiesta a promissory note in the principal amount of $8,500 (in this case, the “Note”), with a maturity date of November 29, 2022. Interest on the Note accrues on the principal amount at the rate of six percent (6%) per annum, and shall be paid on a quarterly basis, in the amount of $127.50 per quarter, on the following dates: February 28, 2022, May 31, 2022, August 29, 2022, and November 29, 2022. The Company may prepay any amounts due under the Note without penalty or premium.

On January 18, 2022, the Company received a loan of $15,000 from 12804 Morehead Investments, LLC (“Morehead”), which controlled by a shareholder of the Company. To evidence said loan, the Company issued to Morehead a promissory note in the principal amount of $15,000 (in this case, the “Note”), with a maturity date of January 18, 2023. Interest on the Note accrues on the principal amount at the rate of six percent (6%) per annum, and shall be paid on a quarterly basis, in the amount of $225 per quarter, on the following dates: April 18,2022, July 18, 2022, October 18, 2022, and January 18, 2023. The Company may prepay any amounts due under the Note without penalty or premium

On March 1, 2022, the Company received a loan of $19,500 from Morehead, which controlled by a shareholder of the Company. To evidence said loan, the Company issued to Morehead a promissory note in the principal amount of $19,500 (in this case, the “Note”), with a maturity date of March 1, 2023. Interest on the Note accrues on the principal amount at the rate of six percent (6%) per annum, and shall be paid on a quarterly basis, in the amount of $292.50 per quarter, on the following dates: June 1, 2022, September 1, 2022, December 1, 2022, and March 1, 2023. The Company may prepay any amounts due under the Note without penalty or premium

On March 1, 2022, The Company received a loan of $20,000 from Peter L. Coker, Sr., a shareholder of the Company. To evidence said loan, the Company issued to Mr. Coker a promissory note in the principal amount of $20,000 (in this case, the “Note”), with a maturity date of March 1, 2023. Interest on the Note accrues on the principal amount at the rate of six percent (6%) per annum, and shall be paid on a quarterly basis, in the amount of $300 per quarter, on the following dates: June 1,2022, September 1, 2022, December 1, 2022, and March 1, 2023. The Company may prepay any amounts due under the Note without penalty or premium

During the three months ended March 31, 2022, the Company recorded interest expense of $2,273 and repaid $2,156 of interest. As of March 31, 2022, the outstanding balances of promissory note – related party and accrued interest were $168,250 and $1,313, respectively.

Note 4 – Commitments.

On June 18, 2018, the Company entered into a consulting agreement (the “Benchmark Consulting Agreement”) with Benchmark Capital, LLC, a New Jersey limited liability company (“Benchmark”), effective as of July 1, 2021, pursuant to which Benchmark will assist the Company in connection with all fillings required by the Company to be made with the SEC, for a consulting fee of $2,500 per month. The Benchmark Consulting Agreement can be terminated by either party, at any time, upon 30 days’ prior written notice. During the three months ended March 31, 2022, the Company incurred and paid consulting fees of $7,500.

Note 5 – Subsequent Events

Management has evaluated subsequent events through the date these financial statements were available to be issued. Based on our evaluation no material events have occurred that require disclosure.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein. You should carefully review the risks described herein and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

All references in this Form 10-Q to the “Company,” “we,” “us,” or “our,” are to Med Spa Vacations Inc.

General Overview

We were incorporated in the State of Nevada on October 5, 2015 to develop a business that specialized in marketing health and wellness vacations to both individuals and corporate groups looking to revitalize and develop a fuller day-to-day life. Because we were not able to raise sufficient capital to execute our original business plan, we discontinued that line of business. Our office address is 500 W. 5th Street, Suite 800, PMB #59, Winston Salem, NC 27101.

The Company is a shell company, as that term is defined in Rule 12b-2 of the Exchange Act of 1934, as amended. The Company is seeking a business combination with a private entity whose business would present an opportunity for its shareholders. No specific assets or businesses have been definitively identified and there is no certainty that any such assets or business will be identified or that any transactions will be consummated.

On February 4, 2021, our controlling stockholder Kynson Health Limited, a company incorporated and existing under the law of the British Virgin Islands (“Kynson Health”), closed stock purchase and sale transactions pursuant to which Kynson Health sold an aggregate of 9,985,329 restricted shares (the “Shares”) of the Company’s common stock, $0.001 par value per share, to eleven purchasers at a purchase price of $0.030044 per share, or an aggregate purchase price of $299,998.60 (the “Share Sale Transaction”). The Shares represented approximately 99.8% of the Company’s issued and outstanding shares of common stock as of the date of the closing of the Share Sale Transaction, taking into account the share cancellations further described below.

On February 4, 2021, in connection with, and as a condition to, the consummation of the Share Sale Transaction, eleven shareholders of the Company returned an aggregate of 4,345,000 shares of the Company’s common stock to the Company for cancellation, in consideration for $0.001 per share. Said shares were returned to the Company’s number of authorized and unissued shares of common stock.

We have no revenues and limited cash on hand. We have sustained losses since inception. We have never declared bankruptcy, been in receivership, or involved in any kind of legal proceeding.

Results of Operations

Three Months Ended March 31, 2022, Compared to Three Months Ended March 31, 2021

Our results of operations for the three months ended March 31, 2022 and 2021 are summarized below:

Revenue

During the three months ended March 31, 2022 and 2021, we did not generate any revenues from operations.

Operating Expenses

Operating expenses for the three months ended March 31, 2022, and 2021 were $33,711 and $77,105, respectively. For the three months ended March 31,2022, operating expenses consisted of professional fees of $29,756, management fees of $3,000 and general and administrative expenses of $955.  For the three months ended March 31,2021, operating expenses consisted of professional fees of $75,535, management fees of $1,000 and general and administrative expenses of $570.

The decrease in operation expenses is primarily the result of a reduction in legal and consulting fees of $46,000 as compared to the corresponding period in the prior year.

Other Expenses

For the three months ended March 31, 2022 and 2021, other expenses consisted of interest on promissory notes of $2,273 and $1,159, respectively.

Net Loss

As a result of the foregoing, we incurred a net loss of $35,984 for the three months ended March 31, 2022, compared to a net loss of $78,264 for the three months ended March 31, 2021.

Liquidity and Capital Resources

As of the date of this report, we had yet to generate any revenues from our business operations. 

As of March 31, 2022, we had current assets of $5,899, current liabilities of $169,569, and our working capital deficit was $163,670. The increase in working capital deficit during the three months ended March 31, 2022, compared to three months ended March 31,2021, was mainly due to an increase in notes payable related to promissory notes issued to a related party of $39,500 and offset by an increase in cash of $3,633. We anticipate that our current liquidity is not sufficient to meet the obligations associated with being a company that is fully reporting with the SEC.

To date, we have managed to keep our monthly cash flow requirement low for two reasons. First, our sole officer draws only a nominal salary at this time. Second, we have been able to keep our operating expenses to a minimum by operating in space provided at no or nominal expense by our shareholders or consultants.

We currently have no external sources of liquidity such as arrangements with credit institutions or off-balance sheet arrangements that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.

Our financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplates our continuation as a going concern. We have not yet generated any revenue and have incurred losses to date of $568,971. In addition, our current liabilities exceed our current assets by $163,670. These factors raise substantial doubt about our ability to continue operating as a going concern. Our ability to continue our operations as a going concern, realize the carrying value of our assets, and discharge our liabilities in the normal course of business is dependent upon our ability to raise capital sufficient to fund our commitments and ongoing losses, and ultimately generate profitable operations.

Cash Flows

Operating Activities

For the three months ended March 31, 2022, net cash used in operating activities was $35,867, related to our net loss of $35,984, reduced by an increase in accrued interest payable to related party of $117.

For the three months ended March 31, 2021, net cash used in operating activities was $34,822, related to our net loss of $78,264, reduced by an increase in expenses paid by related party of $74,184, and accrued note payable interest of $1,159, and increased by a change in accounts payable and accrued liabilities of $31,901.

During the three months ended March 31, 2022 and 2021, the Company’s sole director and officer paid $0 and $74,184 on behalf of the Company for business operation purpose, respectively.

Investing Activities

The Company did not use any funds for investing activities during the three months ended March 31, 2022 and 2021.

Financing Activities

The Company provided $39,500 and $150,000 by financing activities during the three months ended March 31, 2022, and 2021, respectively. During the three months ended March 31, 2022, the Company received loans from related parties in the aggregate amount of $54,500 and repaid the outstanding principal note - related party of $15,000 and accrued interest payable of $225.

During the three months ended March 31, 2021, the Company received a loan of $150,000.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of March 31, 2022, the Company has reoccurring losses from operations, an accumulated deficit of $568,971 and has earned no revenues. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending December 31, 2022.

The ability of the Company to emerge from the early stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings.

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.

Contractual Obligations

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in our Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to our management, as appropriate, to allow timely decisions regarding required disclosure.

Our management has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, management has concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting identified in connection with the evaluation we conducted on the effectiveness of our internal control over financial reporting as of March 31, 2022, that occurred during our first fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We know of no active or pending legal proceedings against us, nor are we involved as a plaintiff in any proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest adverse to us.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Other than as previously reported in our Current Reports on Form 8-K, we did not sell any unregistered securities during the three-month period ended March 31, 2022, or subsequent period through the date hereof.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are included as part of this report:

_______

*Filed herewith

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 thereunto duly authorized.