UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~November~~May 3031, ~~2023~~2024

☐ Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ________ to __________

Commission File Number: 333-265368

Medinotec, Inc.

(Exact name of registrant as specified in its charter)

Nevada		36-4990343
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

Northlands Deco Park | 10 New Market Street | Stand 299 Avant Garde Avenue

North Riding | South Africa | 2169

(Address of principal executive offices)

+27 87 330 2301

(Registrant's telephone number)

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

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

Title of each class		Trading symbol		Name of each exchange on which registered
None		N/A		N/A

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 (§ 229.405 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.

☐ Large accelerated filer	☐ Accelerated filer
☒ Non-accelerated Filer	☒ Smaller reporting company
	☒ Emerging growth company

If an emerging growth company, indicate by check mark if the 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 ☒

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 11,733,750 common shares as of ~~January~~July 2210, 2024.

Table of Contents

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TABLE OF CONTENTS

		Page
	PART I – FINANCIAL INFORMATION
Item 1:	~~Condensed~~ Consolidated Financial Statements (unaudited for period ended ~~November~~May 3031, ~~2023~~2024)	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	119
Item 4:	Controls and Procedures	119
	PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	1211
Item 1A:	Risk Factors	1211
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	1511
Item 3:	Defaults Upon Senior Securities	1511
Item 4:	Mine Safety Disclosure	1611
Item 5:	Other Information	1611
Item 6:	Exhibits	1611

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Our ~~condensed~~ unaudited consolidated financial statements included in this Form 10-Q are as follows:

Page Number
F-1	Unaudited ~~Condensed~~ Consolidated Balance Sheets as of ~~November~~May 3031, ~~2023,~~2024 and February 2829, ~~2023~~2024;
F-2	Unaudited ~~Condensed~~ Consolidated Statements of Operations and Comprehensive Income/(Loss) for the three ~~and nine~~ months ended ~~November~~May 3031, ~~2023,~~2024 and ~~2022~~May 31, 2023;
F-3	Unaudited ~~Condensed~~ Consolidated ~~Statement~~Statements of Stockholders’ Equity / (Deficit) for the three ~~and nine~~ months ended ~~November~~May 3031, ~~2023,~~2024 and ~~2022~~May 31, 2023;
F-4	Unaudited ~~Condensed~~ Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~November~~May 3031, ~~2023,~~2024 and ~~2022~~May 31, 2023; and
F-5	Notes to the Unaudited ~~Condensed~~ Consolidated Financial Statements.

These Unaudited Condensed Consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended November 30, 2023, are not necessarily indicative of the results that can be expected for the full year.

Table of Contents

~~Unaudited Condensed~~Medinotec ~~Consolidated Balance Sheets (Unaudited) (in US$)~~Incorporated

	November 30			February 28
	2023			2023
	$			$
Assets
Current Assets
Cash		2,678,748			2,827,457
Accounts receivable, net of allowances		76,230			21,074
Inventory		712,271			354,304
Other current assets		126,844			166,643
Total Current Assets		3,594,093			3,369,478
Loans and notes receivable		—			605,130
Property, plant and equipment, net of accumulated depreciation		341,969			406,873
Deferred tax asset		55,888			108,951
Total Assets		3,991,950			4,490,432
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued liabilities		334,602			71,311
Due to stockholders/directors		1,588			—
Total Current Liabilities		336,190			71,311
Long Term Liabilities
Related party loans payable		1,580,514			1,863,066
Total Liabilities		1,916,704			1,934,377
Commitments and Contingencies
Stockholders’ Equity
Common stock		11,734			11,734
Common stock additional paid in capital		3,296,391			3,296,391
Retained Earnings (Deficit)		(1,339,885	)		(836,637	)
Accumulated comprehensive income		107,006			84,567
Total Stockholders’ Equity		2,075,246			2,556,055
Total Liabilities and Stockholders’ Equity		3,991,950			4,490,432

Consolidated Financial Statements

~~The accompanying~~Consolidated ~~notes~~Balance ~~are an integral part of these financial statements.~~Sheets (Unaudited)

	May 31 2024 $			February 29 2024 $
Assets
Current Assets
Cash		2,519,083			2,808,910
Accounts receivable, net of allowances		358,679			589,761
Inventory		958,337			863,452
Other current assets		98,951			117,174
Total Current Assets		3,935,050			4,379,297
Loans and notes receivable		—			—
Property, plant and equipment, net of accumulated depreciation		316,335			320,122
Deferred tax asset		14,095			42,881
Operating right-of-use asset		56,760			61,979
Total Assets		4,322,240			4,804,279
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued liabilities		744,591			801,550
Due to stockholders/directors		1,588			1,587
Operating lease liability, current portion		25,575			24,316
Total Current Liabilities		771,754			827,453
Long Term Liabilities
Related party loans payable		1,266,390			1,769,957
Operating lease liability, net of current portion		33,873			39,698
Total Liabilities		2,072,017			2,637,108
Stockholders’ Equity
Capital stock		11,734			11,734
Capital stock additional paid in capital		3,296,391			3,296,391
Retained Earnings (Deficit)		(1,154,121	)		(1,241,325	)
Accumulated other comprehensive income		96,219			100,371
Total Equity		2,250,223			2,167,171
Total Liabilities and Stockholders’ Equity		4,322,240			4,804,279

The accompanying notes are an integral part of these Consolidated financial statements.

F-1

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~~Unaudited Condensed~~Medinotec ~~Consolidated~~Incorporated ~~Statements of Operations and Comprehensive Income/(Loss)~~

	Three months ended						Nine months ended
	November 30, 2023 $			November 30, 2022 $			November 30, 2023 $			November 30, 2022 $
Revenue
Goods sold	$	2,002,547		$	387,989		$	2,769,547		$	720,339
Cost of goods sold		1,138,628			164,685			1,298,116			300,142
Gross profit		863,919			223,304			1,471,431			420,197
Operating expenses
Depreciation and amortization expense		11,604			10,329			36,449			52,860
General and administrative expenses		552,342			159,822			951,786			461,794
Research and development expenses		2,728			6,405			16,846			62,356
Selling expenses		39,335			21,249			111,855			38,278
Total operating expenses		606,009			197,805			1,116,936			615,288
Income (loss) from operations		257,910			25,499			354,495			(195,091	)
Non-operating income and expenses
Interest income		14,859			9,235			42,563			9,349
Other revenue/(expense)		(5,933	)		13,245			(5,232	)		26,353
Provision for impairment of note receivable		(629,458	)		—			(629,458	)		—
Interest expense		(66,727	)		(64,760	)		(203,133	)		(160,593	)
Total non-operating income and expenses		(687,259	)		(42,280	)		(795,260	)		(124,891	)
Income (loss) before income taxes		(429,349	)		(16,781	)		(440,765	)		(319,982	)
Income taxes
Current income taxes		—			—			(12,300	)		—
Deferred income taxes		(63,022	)		(19,560	)		(50,183	)		(30,905	)
Net income (loss)		(492,371	)		(36,341	)		(503,248	)		(289,077	)
Other comprehensive income (loss) from operations		460			(12,469	)		22,439			45,404
Total comprehensive income (loss)	$	(491,911	)	$	(48,810	)	$	(480,809	)	$	(243,673	)
Earnings Per Share:
Loss per share	$	(0.04	)	$	(0.00	)	$	(0.04	)	$	(0.00	)

Consolidated Statements of Operations and Comprehensive Income/(Loss)

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


	Three months ended (Unaudited)
	May 31, 2024 $			May 31, 2023 $
Revenue		2,327,249			416,208
Cost of goods sold		(1,399,020	)		(98,498	)
Gross profit		928,229			317,710
Operating expenses
Depreciation expense		(17,916	)		(12,444	)
General and administrative expenses		(605,156	)		(216,115	)
Research and development expenses		(14,981	)		(2,262	)
Selling expenses		(21,008	)		(46,039	)
Total operating expenses		(659,061	)		(276,860	)
Income/(loss) from operations		269,168			40,850
Non-operating income and expenses
Interest income		14,768			14,333
Interest expense		(58,022	)		(65,573	)
Other revenue/(expense)		1,177			30,709
Provision for impairment of note receivable		(12,948	)		—
Total non-operating income and expenses		(55,025	)		(20,531	)
Income/(loss) before income taxes		214,143			20,319
Income taxes
Current income taxes		(100,156	)		—
Deferred income taxes		(26,783	)		1,969
Net income/(loss)		87,204			22,288
Net income/(loss) per share, basic and diluted		0.01			0.00
Weighted average shares used in computing net loss per share, basic and diluted		11,733,750			11,733,750
Other comprehensive income/(loss)
Foreign currency translation gain/(loss)		(4,152	)		44,603
Total comprehensive income/(loss)		83,052			66,891

The accompanying notes are an integral part of these Consolidated financial statements.

F-2

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~~Unaudited~~Medinotec ~~Condensed Consolidated Statements of Stockholders’ Equity~~Incorporated

	Common Stock presented in US$
	Shares		Amount $		Common Stock Additional Paid in Capital $		Retained Earnings (Deficit) $			Accumulated Comprehensive Income $			Total $
Balance, August 31, 2022		11,733,750		11,734		3,296,391		(729,826	)		54,978			2,633,277
Net income (loss) for the period		—		—		—		(36,341	)		—			(36,341	)
Other comprehensive income
Net foreign currency translation adjustment		—		—		—		—			(12,469	)		(12,469	)
Balance, November 30, 2022		11,733,750		11,734		3,296,391		(766,167	)		42,509			2,584,467

Consolidated Statements of Stockholders’ Equity / (Deficit) (Unaudited)

Balance February 28, 2022		10,000,000		10,000		—			(477,090	)		(2,895	)		(469,985	)
	Common Stock				Common Stock Additional Paid in Capital
Stock issued
	Shares		Amount $		Amount $			Accumulated Comprehensive Income $			Retained Earnings (Deficit) $			Total $
Stock issued - pursuant to acquisitions @ $2 per share		1,733,750		1,734		3,465,766			—			—			3,467,500
Balance, Feb 28, 2023		11,733,750		11,734		3,296,391			84,567			(836,637	)		2,556,055
Raising fees capitalized		—		—		(169,375	)		—			—			(169,375	)
Net income (loss) for the period		—		—		—			—			22,288			22,288
Net loss for the period		—		—		—			(289,077	)		—			(289,077	)
Other comprehensive income
Other comprehensive income
Net foreign currency translation adjustment		—		—		—			44,603			—			44,603
Net foreign currency translation adjustment		—		—		—			—			45,404			45,404
Balance, May 31, 2023		11,733,750		11,734		3,296,391			129,170			(814,349	)		2,622,946
Balance, November 30, 2022		11,733,750	$	11,734	$	3,296,391		$	(766,167)		$	42,509		$	2,584,467
Balance, Feb 29, 2024		11,733,750		11,734		3,296,391			100,371			(1,241,325	)		2,167,171
Net income (loss) for the period		—		—		—			—			87,204			87,204
Other comprehensive income
Net foreign currency translation adjustment		—		—		—			(4,152)			—			(4,152)
Balance, May 31, 2024		11,733,750		11,734		3,296,391			96,219			(1,154,121	)	$	2,250,223

	Common Stock presented in US$
	Shares		Amount $		Common Stock Additional Paid in Capital $		Retained Earnings (Deficit) $			Accumulated Comprehensive Income $		Total $
Balance, August 31, 2023		11,733,750		11,734		3,296,391		(752,760	)		11,792		2,567,157
Net income (loss) for the period		—		—		—		(492,371	)		—		(492,371	)
Other comprehensive income
Foreign currency apportionment reclassification		—		—		—		(94,754	)		94,754		—
Net foreign currency translation adjustment		—		—		—		—			460		460
Balance, November 30, 2023		11,733,750		11,734		3,296,391		(1,339,885	)		107,006		2,075,246

The accompanying notes are an integral part of these Consolidated financial statements.

Balance, February 28,2023	11,733,750	11,734	3,296,391	(836,637	)	84,567	2,556,055
Stock issued
Net income (loss) for the period	—	—	—	(503,248	)	—	(503,248	)
Other comprehensive income
Net foreign currency translation adjustment	—	—	—	—		22,439	22,439
Balance, November 30, 2023	11,733,750	11,734	3,296,391	(1,339,885	)	107,006	2,075,246

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

F-3

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~~Unaudited Condensed~~Medinotec ~~Consolidated Statements of Cash Flows~~Incorporated

		Nine months ended
	November 30, 2023 $			November 30, 2022 $
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) for the period		(503,248	)		(289,077	)
Depreciation		54,664			64,153
Interest received		(22,662	)		—
Deferred income taxes and tax credits		53,063			(38,630	)
Impairment provision on note receivable		629,458			—
(Increase) decrease in receivables		(55,156	)		(250,467	)
(Increase) decrease in inventories		(357,977	)		(309,856	)
(Increase) decrease in prepaid expense and other assets		39,799			(6,880	)
Increase (decrease) in accounts payable and accrued expenses		263,291			(17,383	)
TOTAL CASH FLOWS PROVIDED BY/(USED IN) OPERATING ACTIVITIES		101,232			(848,140	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments to acquire property, plant, and equipment		(851	)		(57,042	)
Cash used in note receivable		—			(594,243	)
NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES		(851	)		(651,285	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt		—			931,713
Settlement of long-term debt		(282,552	)		—
Capital raising fee paid in equity		—			(169,375	)
Proceeds from issuance of common stock		—			3,467,500
NET CASH PROVIDED/(USED) BY FINANCING ACTIVITIES		(282,552	)		4,229,838
OTHER ACTIVITIES:
Effect of exchange rate on cash and cash equivalents		33,462			(15,193	)
Net cash (decrease) increase in cash and cash equivalents		(148,709	)		2,715,220
Cash and cash equivalents at beginning of the period		2,827,457			131,573
Cash and cash equivalents at end of period		2,678,748			2,846,793
Supplemental disclosure of cash flow information:
Cash paid for:
Interest		30,244			41,347
Income taxes		—			—
Cash received for:
Interest		—			357
Income taxes		—			—

Consolidated Statements of Cash Flows

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


	Three months ended (unaudited)
	May 31, 2024 $			May 31, 2023 $
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss)		87,204			22,288
Depreciation		23,228			18,665
Interest (received)/paid		—			51,240
Foreign currency transaction gain/(loss), unrealized		(985	)		—
Deferred income taxes and tax credits		52,164			(1,969	)
Provisions		(110,633	)		—
Impairment provision on notes receivable		12,948			—
Provision for doubtful accounts		(9,143	)		—
Operating lease liability		(5,940	)		—
(Increase)/Decrease in prepayments		(50,931	)		—
(Increase)/Decrease in receivables		308,431			(239,626	)
(Increase)/Decrease in inventories		(76,681	)		(134,971	)
Increase/(Decrease) in accounts payable and accrued expenses		29,469			9,655
Net cashflow from/(used in) operations		259,131			(274,718	)
Accrued interest		(12,948	)		—
TOTAL CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES		246,183			(274,718	)
CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES:
Payments to acquire property, plant, and equipment		(6,055	)		—
TOTAL CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES		(6,055	)		—
CASH FLOWS FROM/(USED BY) FINANCING ACTIVITIES:
Proceeds from assuming long-term debt					63,436
Proceeds from issuance of long-term debt					14,186
Repayment of related party loan		(541,541	)		—
TOTAL CASH FLOWS FROM/(USED BY) FINANCING ACTIVITIES		(541,541	)		77,622
OTHER ACTIVITIES:
Effect of exchange rate on cash and cash equivalents		11,586			79,848
Net cash increase (decreases) in cash and cash equivalents		(289,827	)		(117,248	)
Cash and cash equivalents at beginning of the period		2,808,910			2,827,457
Cash and cash equivalents at end of period		2,519,083			2,710,209
Supplemental disclosure of cash flow information:
Cash paid for:
Interest		—			10,600
Income taxes		—			—
Cash received for:
Interest		1,196			1,225
Income taxes		95,232			—
Supplemental disclosure for non-cash activities
Right-of-use assets in exchange for lease liabilities		1,861			—

The accompanying notes are an integral part of these Consolidated financial statements.

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~~Description of~~Medinotec ~~Business~~Incorporated

~~Medinotec~~Notes ~~Inc.~~to is a US-based company with a primary investment in DISA Medinotec Proprietary Limited (“DISA Medinotec”), a South African medical device manufacturing and distribution company, which in management’s opinion is a global leader in tracheal non-occlusive airway dilation technology and medical device design. “The Company” consists of Medinotec Inc. in Nevada and its wholly owned subsidiaries, Medinotec Capital Proprietary Limited and DISA Medinotec, of which both are incorporated in South Africa. Combined, the ~~Company~~Unaudited ~~has the experience~~Consolidated inEntities ~~establishing~~Financial ~~facilities for the manufacturing and design of niche medical devices and establishing international distribution networks to commercialize these devices.~~Statements

~~The~~For ~~Company is seeking to expand sales and distribution operations into~~ the ~~United~~period ~~States~~ended ~~of America and other markets. Further to the impact of the various military actions~~May ~~and the related sanctions on the world economy~~31, their impact is not determinable as of the date of these financial statements. The specific impact of these on the Company’s financial condition, results of operations, and cash flows is also not determinable and remains unknown as of the date of these Unaudited Condensed Consolidated Financial Statements.2024

The Company’s Unaudited Condensed Consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business1. ~~The~~Description Company received FDA 510(k) approval through the substantial equivalence process for Class II medical devices for its main product, the Trachealator, in November 2021. A private placement was completed in the wake of the successful research and development (R&D) and subsequent regulatory approval in the prior financial year for $3,467,500. The Company recently embarked on obtaining various distribution contracts from principals to ensure a full sales basket and cash generation to sustain growth and product development in the near future.Business

~~Significant~~Medinotec Inc. is a US-based ~~Accounting~~company ~~Policies~~with a primary investment and operations in DISA Medinotec Proprietary Limited (“DISA Medinotec”), a South African medical device manufacturing and distribution company, which in management’s opinion is a global leader in tracheal non-occlusive airway dilation technology and medical device design. “The Company” consists of Medinotec Inc. in Nevada, which primary operations in the United States is in Long Island, New York. and its wholly owned subsidiaries, Medinotec Capital Proprietary Limited and DISA Medinotec, of which both are incorporated in South Africa. Combined, the Company has experience in establishing facilities for the manufacturing and design of niche medical devices and establishing international distribution networks to commercialize these devices.

The Company is seeking to expand sales and distribution operations into the United States of America and other markets.

The Company’s audited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company received FDA 510(k) approval through the substantial equivalence process for Class II medical devices for its main product, the Trachealator, in November 2021.

The reason for the higher sales growth for the quarter as compared with the same quarter of the prior year was due to various new distribution agreements in the surgical specialty of cardiology the Company entered into. These agreements are short term in nature and can be cancelled on non-performance clauses by either party. It has a strong geographical country specific risk, which is mainly concentrated to South Africa. This led to increased revenues in South Africa. The rapid sales growth is attributable to the fact that these distributors already have existing business as well as a reputation for quality product in South Africa. Disa Medinotec got awarded these contracts due to years of good relationships between the external third-party distributors and the current executive management of Disa Medinotec. In addition, the Company realized more sales for its Trachealator in the United States with fewer such sales inside the United States for the prior year period.

The Company recently embarked on obtaining various distribution contracts from principals to ensure a full sales basket and cash generation to sustain growth and product development in the near future.

2. Significant Accounting Policies

a. Nature of business/basis of preparation

~~The~~Basis ~~Unaudited Condensed Consolidated Financial Statements included herein have been prepared in accordance with accounting principles generally accepted in the United States~~ of ~~America~~presentation (“GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations of the SEC for interim financial reporting. The Company’s management believes that the disclosures are adequate to make the information presented not misleading. These Company’s Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2023.

~~Emerging~~The ~~Growth~~consolidated ~~Company~~financial ~~(EGC)~~statements ~~status~~are prepared in accordance with generally accepted accounting principles in the United States.

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

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Emerging Growth Company (ECG) status

b. Foreign currency translation

1i. Translation of foreign subsidiary

The accounts of the foreign subsidiaries are translated into ~~the~~U.S. ~~reporting currency United States Dollar~~dollars. Assets and liabilities are translated at year -end exchange rates ~~and~~ and income and expense accounts are translated at average exchange rates in effect during the year. Translation adjustments resulting ~~from~~ from fluctuations in the exchange rates are recorded in accumulated other comprehensive income, a separate component of stockholders' equity.

2ii. Exposed to currency variations in subsidiary.

The primary operations and functional currency of aboth ~~subsidiary's~~Disa ~~business~~Medinotec (Pty) Ltd and Medinotec Capital (Pty) Ltd is in South African Rand. Due to the emerging market nature of this currency the spread volatility of the currency low and high can be material during a year. The conversion of the currency from Rand to reporting currency US Dollar can cause significant up or downward trends that are recorded in reserves under the heading accumulated comprehensive income.

c.The functional ~~Accounts~~currency ~~Receivables~~as well as the reporting currency for Medinotec Inc is the US Dollar.

~~Allowance~~c. Cash ~~based on a review~~ and ~~management~~cash ~~evaluation.~~equivalents

~~Accounts receivables are presented on the condensed consolidated balance sheets, net of estimated uncollectible amounts~~i. ~~The carrying amounts of trade accounts receivable~~ Highly ~~and~~ liquid ~~unbilled~~investments accounts receivable represent the maximum credit risk exposure of these assets. On a quarterly basis, in accordance with FASB ASC 326, Measurement of Credit Losses on Financial Instruments ("ASC 326"), the Company evaluates the collectability of outstanding accounts receivable balances to determine an allowance for credit losses that reflects its best estimate of the lifetime expected credit losses. The allowance for credit loss is based on an assessment of past events, current economic conditions, and forecasts of future events. Individual uncollectible accounts are written off against the allowance when collection of the individual accounts appears doubtful. As at February 28, 2023 no allowance had been recognized as our United States roll-out had only begun and we therefore did not have sufficient sales history to make an assessment.

~~Allowance~~The Medinotec ~~for~~Group ~~Credit~~of ~~Losses~~Companies –considers all highly liquid investments with a remaining maturity of three months or less at the time ~~Accounts~~ of ~~Receivable~~purchase to be cash equivalents. These cash equivalents consist primarily of term deposits and certificates of deposit. Investments with maturities from greater than three months to one year are classified as short-term investments, while those with maturities in excess of one year are classified as long-term investments. Cash equivalents and short-term investments are stated at cost which approximates market value.

The allowance for credit losses required under ASC 326 is a valuation account that is deducted from the accounts receivables’ amortized cost basis on the Company’s Unaudited Condensed consolidated balance sheetsd. ~~Our accounts receivable is generated from the sales revenue. The Company elected to estimate~~ Accounts expected losses using an analytical model based on methods that utilize the accounts receivable aging schedule. This analytical model incorporates historical loss activity, geographic location, customer-specific information, collection terms and customer amounts. The Company evaluates the estimated allowance on an aggregate basis as each individual account receivable shares similar risk characteristics. During the fiscal period, the Company adopted ASC 326 using the modified retrospective transition method and, as of November 30, 2023, the Company determined that the allowance for credit losses, if any, is immaterial as of adoption date and the Company will continue to evaluate the accounts receivable portfolio on an on-going basis.Receivables

~~An appropriate allowance for doubtful~~i. Allowance ~~accounts~~based ~~has been recognized as of November 30, 2023, and February 28, 2023, respectively. Exports out of South Africa are done~~ on a ~~pre-payment basis~~review with exception of one customer whose account was settled in full post quarter end. Sales inside South Africa are conducted through DISA Lifesciences whose account was settled in full after the end of the quarter. All sales in the United States were made for the first time during the first quarter and ~~fully~~management ~~collected~~evaluation ~~post quarter within terms.~~

Accounts receivables are presented on the consolidated balance sheets, net of estimated uncollectible amounts. The carrying amounts of trade accounts receivable represent the maximum credit risk exposure of these assets.

In accordance with FASB ASC 326, Measurement of Credit Losses on Financial Instruments ("ASC 326"), the Company evaluates the collectability of outstanding accounts receivable balances to determine an allowance for credit losses that reflects its best estimate of the lifetime expected credit losses.

An allowance for credit losses is calculated taking into account all accounts older than 121+ days.

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de. Property, plant ~~Revenue~~and ~~recognition~~equipment

~~The Company generates revenues~~i. Depreciation ~~through two distinct revenue sources:~~rates

1. From the sale of high-quality medical devices which are self-manufactured through in-depth research and development; and


Plant and machinery			10 years
Laboratory equipment			5 years
Furniture and fixtures			6 years
Motor vehicles			5 years
Computer equipment			3 years
Office equipment			6 years
Computer software			2 years
Leasehold improvements			3 years
Small assets			1 year

2f. ~~Through the distribution of finished products on behalf of other principals around the world into pre-agreed territories which are usually exclusive territories granted by such principal.~~ Inventories

i. Valuation, costing and obsolescence

Inventories are stated at the lower of cost (weighted average) or net realizable value and consist of raw materials, work-in process and finished goods and include purchased materials, machine time, direct labor and manufacturing overhead.

Management evaluates the need to record adjustments to write down inventory to the lower of cost or net realizable value on an annual basis. The Company’s policy is to assess the valuation of all inventories, including raw materials, work-in-process and finished goods and it writes down its inventory for estimated obsolescence based upon the age of inventory and assumptions about future demand and usage.

g. Impairment of long-lived assets

The Company assesses long-lived assets for impairment in accordance with the provisions of Financial Accounting Standards Board ASC 360, Property, Plant and Equipment. Long-lived assets (asset group), such as property and equipment subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted future cash flows expected to result from the use and eventual disposition of the asset. The amount of impairment loss, if any, is measured as the difference between the carrying value of the asset and its estimated fair value.

Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary.

h. Leases

We determine if an arrangement is a lease at inception. We determine the classification of the lease, whether operating or financing, at the lease commencement date, which is the date the leased assets are made available for use. We use the non-cancelable lease term when recognizing the right-of-use (“ROU”) assets and lease liabilities, unless it is reasonably certain that a renewal or termination option will be exercised. We account for lease components and non-lease components as a single lease component. Modifications are assessed to determine whether incremental differences result in new contract terms and accounted for as a new lease or whether the additional right of use should be included in the original lease and continue to be accounted for with the remaining ROU asset.

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Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. Lease payments consist of the fixed payments under the arrangement, less any lease incentives. Variable costs, such as common area maintenance costs and additional payments for percentage rent, are not included in the measurement of the ROU assets and lease liabilities but are expensed as incurred. As the implicit rate of the leases is not determinable, we use an incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments in determining the present value of the lease payments. Lease expenses are recognized on a straight-line basis over the lease term. We do not recognize ROU assets on lease arrangements with a term of 12 months or less.

i. Allowance for loan impairment

The Company records allowances for loan impairment when it is determined that the Company will be unable to collect amounts due to the Company according to the terms of the underlying agreement.

j. Employee benefit plans

The Company contributes 2.5% for eligible employees to a pension plan registered under the laws of South Africa. The Company also contributes a portion of the medical aid contribution for eligible employees to an approved medical insurance scheme.

k. Income taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

The Company records interest related to unrecognized tax benefits in interest expense and penalties in general and administrative expenses.

l. Financial instruments

i. Fair Value Measurements

Fair value accounting is applied for all assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The consolidated entities follow the established framework for measuring fair value and expands disclosures about fair value measurements.

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ii. Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, trade accounts receivable and loans. The Company invests its excess cash in low-risk, highly liquid money market funds and certificates of deposit with a major financial institution.

iii. Exposed to currency variations in subsidiary

The primary operations and functional currency of a subsidiary's business is in South African Rand. Due to the emerging market nature of this currency the spread volatility of the currency low and high can be material during a year. The conversion of the currency from Rand to reporting currency US Dollar can cause significant up or downward trends that is recorded in reserves under the heading accumulated comprehensive income. The effect on the reserves for the quarter ended May 31, 2024 was $4,152 compared to $44,603 for the quarter ended May 31, 2023.

iv. Interest rate Risk

Market interest rate risk may result in loss from fluctuations in the future cash flows or fair values of financial instruments. Interest rate risk is managed principally through monitoring interest rate gaps and basis risk and by having pre-approved limits for repricing bands.

The interest rate risk relates solely to the related party loan.

m. Comprehensive income/loss

i. Comprehensive income / loss

Comprehensive income/loss consists of net income/loss and other gains and losses affecting stockholders’ equity that, under GAAP, are excluded from net income/loss. Our other comprehensive income represents foreign currency translation adjustment attributable to our operations. Refer to Consolidated Statements of Comprehensive Income/(Loss).

Total foreign currency transaction gains and losses for the quarter ended May 31, 2024 was $4,152 compared to $44,603 for the quarter ended May 31, 2023.

n. Revenue recognition

The Company generates revenues through two distinct revenue sources

From the sale of high-quality medical devices which are self-manufactured through in-depth research and development; and

ii.

Through the distribution of finished products on behalf of other principals around the world into pre-agreed territories which are usually exclusive territories granted by such principal.

The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its arrangements:

identify the contract with a customer,

ii.

identify the performance obligations in the contract,

iii.

determine the transaction price,

iv.

allocate the transaction price to performance obligations in the contract, and

recognize revenue as the performance obligation is satisfied.

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Revenue from the sale of self-manufactured products

These products are developed in-house.

The Company’s clients are billed based on a pricelist that ~~are~~is agreed ~~upon~~ on in each customer’s contract,. ~~orders~~Orders are shipped on a per order basis from the Company’s warehouse with Free-onOn-Board Inco terms~~, therefore the client assumes the risk of the sale at delivery and at the point of invoice, which will incur within 72 hours of delivery~~.

Revenues relating to the self-manufactured products are recognized when control of the promised goods or services is transferred to a customer in an amount that reflects the consideration that the Company expects to receive in exchange for those products. ~~The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its arrangements:~~

• identify the contract with a customer,

• identify the performance obligations in the contract,

• determine the transaction price,

• allocate the transaction price to performance obligations in the contract, and

• recognize revenue as the performance obligation is satisfied.

Revenue from the distribution of products

The distribution products are sold via a network, which consists of a mixture of sub-distributors and, in some instances, a direct sales force. The Company’s clients are billed based on a pricelist that are agreed upon in each customer contract, orders are shipped on a per order basis from the Company’s warehouse with Free-on-Board Inco terms. The Company’s sub-distributors order from the Company on the same basis as its customers and have no preferential return rights on their inventory orders, therefore the client assumes the risk of the sale at point of invoice.

Revenues relating to the distribution products are recognized when control of the promised goods or services are transferred to a customer in an amount that reflects the consideration that the Company expects to receive in exchange for those products. ~~The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its arrangements:~~

• identify the contract with a customer,

• identify the performance obligations in the contract,

• determine the transaction price,

• allocate the transaction price to performance obligations in the contract, and

• recognize revenue as the performance obligation is satisfied.

Goods delivered to a consignee pursuant to a consignment arrangement are not considered sales, and do not qualify for revenue recognition. Once it is determined that substantial risk of loss, rewards of ownership, as well as control of the asset have transferred to the consignee, revenue recognition would then be appropriate, assuming all other criteria for revenue recognition have been satisfied.

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For both revenue streams

The Company has two operating segments, inside the United States and outside the United States. These sales are split by these territories and further segregated into the specific revenue streams sold into these territories.

The Company has no contract assets or liabilities representing accrued revenues that have not yet been billed to the customers due to certain contractual terms, because of ~~the fact that~~ orders are placed, invoiced, and shipped on a per order basis as and when the clients require additional inventory. ~~All~~ All revenue is recognized at a specific point and time.

Under ASC Topic 606, the Company estimates the transaction price, including variable consideration, at the commencement of the contract and recognizes revenue at point of sale when risks and rewards are transferred to the customer. There are no contract revenue agreements that would need to be recognized over time and the point of risks and rewards being transferred is very clear.

Payment Terms

Our payment terms vary per segments; export sales made from within South Africa are subject to prepayment, where accounts are granted. They generally have payment terms of 30 days from statement and sales made inside the United States are 45 to 60 days. Terms can be extended by the Company when it deems the business case and ~~credit~~creditworthiness ~~worthiness~~ of the customer is strong enough. The time between a customer’s payment and the receipt of funds is not significant. The Company’s contracts with customers do not result in significant obligations associated with returns, refunds, or warranties. Payment terms are generally fixed and do not include variable revenues.

The Company sells a significant amount to DISA Vascular Distribution trading as DISA Life Sciences. For the quarter ending November 30, 2023, 79% (November 30, 2022: 64%) and for the nine months ended November 30, 2023, 66% (November 30, 2022: 66%) of the Company's total revenue is derived from this single customer in the distribution environment in South Africa.F-10

e.Table ~~Research~~of ~~and development~~Contents

The Company sells a significant amount to DISA Life Sciences. For the quarter ending May 31, 2024, 65% of the Company's total revenue is derived from this single customer in the distribution environment in South Africa compared to 33% for the quarter ending May 31, 2023.

This table indicates the sales per revenue stream as a breakdown of the total revenue balance:

	Medinotec Inc Group Consolidated Years Ended
	May 31, 2024 $		May 31, 2023 $
Outside of United States of America
Internally Designed/Manufactured Sales		801,282		241,288
Distribution Agreement Sales		1,390,194		—
Sales Generated inside the United States of America
Internally Designed/Manufactured Sales		135,773		174,920
		2,327,249		416,208

The following table sets forth financial information by reportable segment for the periods ending May 31, 2024 and May 31, 2023:

Income/(loss) from operations


	Inside the United States		Outside the United States		Total
	2024	2023	2024	2023	2024	2023
Revenue	135,773	174,920	2,191,476	241,288	2,327,249	416,208
Cost of goods sold	(13,477)	(13,931)	(1,385,543)	(84,567)	(1,399,020)	(98,498)
Gross profit	122,296	160,989	805,933	156,721	928,229	317,710
Selling expenses	(11,939)	(9,164)	(9,069)	(36,875)	(21,008)	(46,039)
Depreciation expense	—	—	(17,916)	(12,444)	(17,916)	(12,444)
General and administrative expenses	(132,397)	(114,895)	(472,759)	(101,220)	(605,156)	(216,115)
Research and development expenses	—	—	(14,981)	(2,262)	(14,981)	(2,262)
Income/(loss) from operations	(22,040)	36,930	291,208	3,920	269,168	40,850
Provision for impairment of note receivable	(12,948)	—	—	—	(12,948)	—

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The following table sets forth financial information by reportable segment for the periods ending May 31, 2024 and February 29, 2024:

Total Assets


	Inside the United States		Outside the United States		Total
	May 31 2024	Feb 29 2024	May 31 2024	Feb 29 2024	May 31 2024	Feb 29 2024
Total assets	2,703,704	2,697,502	1,618,536	2,106,777	4,322,240	4,804,279

The major component of total assets is "Cash" of $2,519,083 for the period ending May 31, 2024 and $2,808,910 for the period ending February 29, 2024. A significant portion of this is maintained Inside the United States in USD of $2,420,605 for the period ending May 31, 2024 and $2,478,434 for the period ending February 29, 2024.

o. Cost of goods sold

The cost of goods sold consists primarily of raw material purchases, manufacturing costs and employee benefits paid to operational personnel associated with the production of our medical devices.

p. General and administrative expenses

General and administrative expenses consist mostly of personnel costs, consulting fees as well as audit fees.

q. Research and development

All research and development expenses are expensed as incurred and are included in operating expenses.

fr. ~~Earnings~~Interest ~~per share~~expense

~~Basic~~Interest ~~earnings~~expense ~~per~~relates ~~share~~mostly to an unsecured loan from Minoan Medical, which is repayable over the next 2 years. The loan carries interest at the prevailing prime lending rate of the time. The prevailing lending rate in South Africa was 11.75% at year end. The terms of this loan are deemed to be market related.

s. Earnings per share

Basic earnings (loss) per share are computed based on the weighted average number of ordinary shares outstanding during each year.

gThe diluted earnings per share is computed by giving effect to all potentially dilutive securities outstanding for the period. ~~Payables~~For periods in which we report net losses, diluted net loss per share is the same as basic net loss per share because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

~~One~~t. ~~major~~Principles ~~European~~of ~~Cardiac~~consolidation ~~supplier~~i. ~~constitutes~~Consolidated ~~68% (0%~~- inall ~~prior~~intercompany ~~period)~~transactions ~~of the total Cost of Goods Sold.~~eliminated

hThe consolidated financial statements include the accounts of Medinotec Inc., ~~New~~Medinotec ~~accounting~~Capital ~~pronouncements~~Proprietary Limited and the financial statements of DISA Medinotec Proprietary Limited, known as the Medinotec Group of Companies. All significant intercompany transactions have been eliminated.

~~In September 2022, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) ASU 2022~~F-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, which enhances transparency surrounding the use of supplier finance programs. The new guidance requires qualitative and quantitative disclosure sufficient to enable users of the financial statements to understand the nature, activity during the period, changes from period to period and potential magnitude of such programs. The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on roll forward information, which is effective for fiscal years beginning after December 15, 2023. The Company is currently evaluating the ASU to determine its impact on the Company’s disclosures.12

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~~Recently Issued~~u. ~~Accounting~~Use ~~Pronouncements~~of estimates i. Actual results could differ

InThe ~~August~~preparation ~~2023,~~of ~~the~~consolidated ~~Financial~~financial ~~Accounting~~statements ~~Standards~~in ~~Board~~accordance ~~(“FASB”)~~with ~~issued~~accounting ~~Accounting~~principles ~~Standards~~generally ~~Update~~accepted ~~(“ASU”)~~in ~~2023-05, Business~~the ~~Combinations-Joint~~United ~~Venture~~States ~~Formations (Subtopic 805-60): Recognition and Initial Measurement (“ASU 2023-05”), which~~of ~~addresses~~America ~~the~~requires ~~accounting~~management ~~for contributions made~~ to amake ~~joint~~estimates ~~venture,~~and ~~upon~~assumptions ~~formation,~~that inaffect athe ~~joint~~reported ~~venture’s~~amounts ~~separate financial statements. The amendments require certain joint ventures to apply a new basis~~ of ~~accounting~~assets ~~upon~~and ~~formation~~liabilities ~~by recognizing~~ and ~~initially measuring~~disclosure ~~most~~ of ~~their~~contingent assets and liabilities at ~~fair~~the ~~value.~~date ~~The objectives~~ of the ~~amendments~~consolidated ~~are to provide decision-useful information to investors and other allocators of capital in a joint venture’s~~ financial statements and ~~also~~the toreported ~~reduce~~amounts ~~diversity~~of inrevenues ~~practice. ASU 2023-05 is effective for both public~~ and ~~private joint venture entities with a formation date on or after January 1, 2025. Early~~expenses ~~adoption~~during ~~is permitted. Entities may elect to apply~~ the ~~guidance~~reporting ~~retrospectively to joint ventures with a formation date prior to January 1, 2025~~period. ~~The~~Actual ~~Company~~results ~~does~~could ~~not~~differ ~~expect~~from ~~the~~those ~~adoption~~estimates ofand ~~this~~may ~~standard to~~ have aan ~~material~~ impact on ~~its~~future ~~condensed consolidated financial statements and related disclosures~~periods.

v. Recently issued accounting standards

In August 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-05, Business Combinations-Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement (“ASU 2023-05”), which addresses the accounting for contributions made to a joint venture, upon formation, in a joint venture’s separate financial statements. The amendments require certain joint ventures to apply a new basis of accounting upon formation by recognizing and initially measuring most of their assets and liabilities at fair value. The objectives of the amendments are to provide decision-useful information to investors and other allocators of capital in a joint venture’s financial statements and also to reduce diversity in practice. ASU 2023-05 is effective for both public and private joint venture entities with a formation date on or after January 1, 2025. Early adoption is permitted. Entities may elect to apply the guidance retrospectively to joint ventures with a formation date prior to January 1, 2025. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements and related disclosures.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820), Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions to clarify that a contractual restriction on the sale of an equity security is not considered part of a unit of account of the equity security, and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The amendments also require the following disclosures for equity securities subject to the contractual sale restrictions.

1. ~~The~~ The fair value of equity securities subject to the contractual sale restrictions is reflected on the balance sheet.

2. The nature and remaining duration of the restriction(s).

3. The circumstances that could cause a lapse in the restriction(s).

This ~~guidance~~ guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within those financial years. The Company does not expect the adoption of this standard to have a material impact on the Company’s ~~condensed~~ consolidated financial statements and related disclosures.

In ~~November 2023~~September 2022, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU ~~2023~~”) ASU 2022-0704, Liabilities ~~"Segment~~- ~~Reporting~~Supplier Finance Programs (~~Topic~~Subtopic ~~280~~405-50): ~~Improvements~~Disclosure toof ~~Reportable~~Supplier ~~Segment~~Finance ~~Disclosures"~~Program Obligations, which ~~amends~~enhances transparency surrounding the ~~disclosure~~use toof ~~improve reportable~~supplier ~~segment~~finance ~~disclosure~~programs. ~~requirements,~~The ~~primarily~~new ~~through~~guidance ~~enhanced~~requires ~~disclosures~~qualitative ~~about~~and ~~significant~~quantitative ~~segment~~disclosure ~~expenses~~sufficient onto ~~an annual and~~enable ~~interim~~users ~~basis~~of ~~for~~the tofinancial ~~enable~~statements ~~investors~~ to ~~develop~~understand ~~more~~the ~~decision-useful~~nature, ~~financial~~activity ~~analyses.~~during ~~All~~the ~~public~~period, ~~entities~~changes ~~will~~from beperiod ~~required~~ to ~~report segment~~period ~~information~~and inpotential ~~accordance~~magnitude of ~~with~~such ~~the~~programs. ~~new~~The ~~guidance~~amendments ~~starting~~are ineffective ~~annual~~for ~~periods~~fiscal years beginning after December 15, ~~2023.~~2022, ~~The~~including ~~Company~~interim isperiods ~~currently~~within those ~~assessing~~fiscal ~~potential~~years, ~~impacts~~except offor ~~ASU~~the ~~2023-06~~amendment ~~and~~on ~~does~~roll ~~not~~forward ~~expect~~information, ~~the~~which ~~adoption~~is ofeffective ~~this~~for ~~guidance~~fiscal ~~will~~years ~~have~~beginning aafter ~~material~~December ~~impact~~15, 2023. onThe ~~its~~Company ~~condensed consolidated~~is ~~financial~~currently ~~statements~~evaluating ~~and~~the ~~disclosures~~ASU asto ~~disclosed~~determine inits ~~Note~~impact 20on the Company’s disclosures.

~~In December 2023, the FASB issued ASU 2023~~F-09, " Income Taxes (Topic 740): Improvements to Income Tax Disclosures", which amends the disclosure to address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information and includes certain other amendments to improve the effectiveness of income tax disclosures. For entities other than public business entities, the requirements will be effective for annual periods beginning after December 15, 2025. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently assessing potential impacts of ASU 2023-09 and does not expect the adoption of this guidance will have a material impact on its condensed consolidated financial statements and disclosures and the Company is in a loss position and not incurring any tax expenses.13

All other ASUs issued and not yet effective for the three months ended November 30, 2023, and through the date of this report, were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s financial position or results of operations.

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Table of Contents

~~Fair~~In November ~~Value~~2023, ~~Measurements~~the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which amends the disclosure to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses on an annual and interim basis for to enable investors to develop more decision-useful financial analyses. All public entities will be required to report segment information in accordance with the new guidance starting in annual periods beginning after December 15, 2023. The Company is currently assessing the potential impacts of ASU 2023-06 and does not expect the adoption of this guidance will have a material impact on its consolidated financial statements and disclosures.

~~The~~In December ~~Company~~2023, ~~reports~~the ~~all~~FASB ~~financial~~issued ~~assets~~ASU ~~and liabilities and non~~2023-~~financial~~09, ~~assets~~" ~~and~~Income ~~liabilities~~Taxes ~~that~~(Topic ~~are~~740): ~~recognized~~Improvements orto ~~disclosed~~Income atTax ~~fair value~~Disclosures", inwhich amends the ~~Unaudited~~disclosure to ~~Condensed~~address ~~Consolidated~~investor ~~financial~~requests ~~statements~~for onmore atransparency ~~recurring~~about ~~basis.~~income ~~Valuation~~tax ~~techniques~~information ~~used~~through improvements to ~~measure~~income ~~fair~~tax ~~value~~disclosures primarily ~~must~~related ~~maximize~~to the ~~use~~rate ofreconciliation ~~observable~~and ~~inputs~~income taxes paid information and ~~minimize~~includes ~~the~~certain ~~use~~other amendments to improve the effectiveness of ~~unobservable~~income ~~inputs~~tax disclosures. ~~The~~For ~~authoritative~~entities ~~guidance~~other ~~establishes~~than apublic ~~fair value~~business ~~hierarchy~~entities, ~~that~~the ~~prioritizes~~requirements ~~the~~will ~~inputs~~be toeffective ~~valuation~~for ~~techniques~~annual ~~used~~periods tobeginning after ~~measure~~December ~~fair~~15, ~~value~~2025. The ~~hierarchy~~guidance ~~gives~~will be applied on a prospective basis with the ~~highest~~option ~~priority~~ to ~~unadjusted~~apply ~~quoted~~the ~~prices~~standard inretrospectively. ~~active~~Early adoption ~~markets~~is ~~for~~permitted. ~~identical~~The ~~assets~~Company oris ~~liabilities~~currently ~~(Level~~assessing 1potential ~~measurements)~~impacts of ASU 2023-09 and does not expect the ~~lowest~~adoption ~~priority~~of tothis ~~measurements~~guidance ~~involving~~will ~~significant~~have ~~unobservable~~a ~~inputs~~material ~~(Level~~impact 3on ~~measurements).~~its ~~The~~consolidated ~~three~~financial ~~levels~~statements ofand disclosures and the ~~fair~~Company ~~value~~is ~~hierarchy~~in ~~are~~a asloss ~~follows:~~position and not incurring any tax expenses.

3. Fair Value Measurements

The Consolidated entities report all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1—Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2—Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

Level 3—Inputs are unobservable inputs for the asset or liability.

The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is significant to the fair value measurement in its entirety.

On ~~November~~ 30May 31, ~~2023~~2024, and ~~February~~May 2831, 2023, all of the Company’s cash and cash equivalents, trade accounts receivable and trade accounts payable were short term in nature, and their carrying amounts approximate fair value. ~~The~~Our ~~Company’s~~ current and long-term debt arrangements are classified as level 2 financial instruments.

~~Property, plant and equipment~~F-14

Property, plant and equipment consist of the following:

	November 30, 2023 $		February 28, 2023 $
Leasehold improvement	18,606		19,134
Computer equipment	148,518		152,731
Computer software	56,935		58,551
Office equipment	7,073		7,273
Furniture and fixtures	100,721		103,578
Motor vehicles	12,103		12,446
Small assets	13,756		14,146
Plant and machinery	1,074,571		1,104,182
Laboratory equipment	243,098		249,995
Total cost	1,675,381		1,722,036
Foreign currency adjustment	46,131		90,379
Total accumulated depreciation	(1,379,543	)	(1,405,542	)
Total	341,969		406,873

F-10

Table of Contents

~~Depreciation expenses~~4. ~~totaled $17~~Property,~~397~~ ~~for~~plant ~~the quarter, $54,664 for the nine months ending November 30, 2023,~~ and ~~$16,932 for the quarter and $64,153 for the nine months ending November 30, 2022.~~ equipment

~~There were immaterial cash additions of $851 for the three and nine months ending November 30~~Property, ~~2023, and there were additions of $57,042 for the nine months~~ ~~ending~~plant ~~November 30, 2022. These additions in the prior period were to support the scale~~ and ~~growth~~equipment ~~expected~~consist ~~in sales by launching the Trachealator product into the territory~~ of the ~~United States of America.~~following:


	May 31, 2024 $			Feb 29, 2024 $
Leasehold improvements		—			—
Computer software		1,133			—
Office equipment		—			—
Motor vehicles		12,144			11,889
Small assets		—			—
Plant and machinery		1,083,882			1,056,830
Furniture and fittings		101,224			99,098
Computer equipment		149,568			145,891
Laboratory equipment		243,923			238,799
Total cost		1,591,874			1,552,507
Foreign currency adjustment		(1,679	)		35,626
Total accumulated depreciation		(1,273,860	)		(1,268,011	)
Total		316,335			320,122

Depreciation of property, plant and equipment totaled approximately $23,228 for the period ending May 31, 2024 compared to $18,665 for the period ending May 31, 2023.

The Company has not acquired any property and equipment under capital leases.

Depreciation Allocation to Cost of Goods Sold:

A portion of the depreciation expense related to Property, Plant, and Equipment has been allocated to the Cost of Goods Sold. This practice is in accordance with the company's accounting policy, which recognizes a portion of the depreciation expense as part of the cost of producing goods.

The allocation of depreciation to Cost of Goods Sold is based on the estimation of the assets' usage in the production process. This method is employed to better match the cost of assets with the revenue generated during the period.

Depreciation of $185,~~215~~312 was allocated to Cost of Goods Sold for the ~~nine~~period ~~months~~ ending ~~November~~May 3031, ~~2023. For the nine months ending November 30~~2024, ~~2022~~compared to $116,~~293~~221 ~~was~~for ~~allocated to~~the ~~Cost~~period ofending ~~Goods~~May ~~Sold.~~31, 2023

~~For the quarter ended November 30, 2023 depreciation of $~~5~~,793 was allocated to Cost of Goods Sold compared to $6,603 in the prior year quarter ended November 30, 2022~~. Inventories

~~Other~~a. Accounts ~~current~~by ~~assets~~ period

	November 30, 2023 $		February 28, 2023 $
Tax and statutory refunds		60,794		166,643
Prepayments		64,640		—
Other receivable		1,410		—
Total		126,844		166,643

Inventory

Inventory consists of the following:

	November 30, 2023 $			February 28, 2023 $
	May 31, 2024 $			Feb 29, 2024 $
Finished goods		498,654			59,004
Stock on hand		957,497			861,451
Raw material		156,597			288,030
Less provisions for obsolescence		(10,441	)		(10,221	)
Work in progress		67,425			34,356
Goods in transit		11,281			12,223
Less provisions for obsolescence		(10,405	)		(27,086	)
Total		958,337			863,452
Total		712,271			354,304

F-1115

Table of Contents

~~Loans~~6. ~~and~~ Note ~~notes receivable~~Receivable

	November 30 2023 $			February 28 2023 $
	May 31, 2024 $			Feb 29, 2024 $
Innovative Outcomes		629,458			605,130
Note receivable		—			—
Allowance for impairment		(629,458	)		—
Total		—			—
Total		—			605,130

The Trachealator product obtained FDA approval in November 2021, which allowed the Company ~~entered~~to sell this product into the United States of America. Since the Company had no prior sales channels or infrastructure in the United States, management found it prudent to plan a roll ~~revolving~~out ~~credit~~of ~~facility~~the product with a distributor that had an established network and infrastructure. For this business, the Company partnered with a company called Innovative Outcomes ~~for~~and upentered into a revolving credit facility to a maximum of $750,000. Innovative Outcomes would use this to ~~support~~grow ~~the~~both ~~launch~~their ofown ~~the~~distribution ~~Trachealator~~network inand infrastructure and also allow for the USCompany to utilize this network and infrastructure. However, during quarter ending November 30, 2023, there was a material change in strategic focus where the Company ~~due~~would require its products to be marketed to niche surgical units, Innovative Outcomes would be servicing the wound care clinic market only which meant that the future growth of the combined network and infrastructure would not be a strategic ~~shift,~~match between the ~~Company~~two ~~fully~~entities. It ~~reserved~~was ~~for~~therefore decided to separate the network and infrastructure developed and for each company to pursue its strategic focus. The note receivable ~~during~~will continue on the ~~quarter~~same ~~ended~~terms and become payable later in the 2025 financial year, but the Company decided to provide full impairment against this receivable on November 30, 2023,. asThis decision was made in prudence due to the ~~planned~~fact that the receivable ~~combined~~is ~~network~~not ~~and~~backed ~~infrastructure~~by ~~with~~any Trachealator revenue streams anymore. This does not change that Innovative Outcomes ~~was~~will nostill ~~longer~~be ~~aligned~~liable for payment of this in the future Interest will accrue as normal until maturity date. Should payments be received this provision will be reversed with the same amount of cashflow received.

~~Loans~~7. ~~payable~~ Loans Payable

a. Loans from related parties

Loans payable consists of a $1,580,514 unsecured loan from the prior parent entity of DISA Medinotec in South Africa called Minoan Medical Proprietary Limited (“Minoan Medical”). This loan originated to fund working capital and capex expansions of DISA Medinotec during the developmental and startup phase. After the acquisition of DISA Medinotec on March 2, 2022, the Company assumed this liability The Company has a period of 3 years after the IPO date or a date at which the Company starts trading on a recognizable exchange to repay the loan. During these 3 years the loan will carry interest at the prevailing prime lending rate of the time.

	May 31 2024 $			Feb 29 2024 $
Minoan Medical Proprietary Limited
Opening balance		1,769,688			1,862,793
Interest		46,222			236,873
Received/Issued		10,319			2,076,257
Repayments		(597,370	)		(2,323,089	)
Foreign exchange difference		37,256			(83,326	)
Closing balance		1,266,115			1,769,688

Minoan Capital Proprietary Limited
Opening balance		269			273
Foreign exchange difference		6			(4	)
Closing balance		275			269

Total debt		1,266,390			1,769,957

~~The Minoan Medical loan decreased by $282,552 during the quarter ended November 30, 2023.~~ F-16

The prevailing prime lending rate on the quarter ending November 30, 2023, in South Africa is 11.75%. The interest charged for the quarter was $56,645 and $172,889 for the nine months. A 1% movement in the interest rates constitutes a value of $1,341 on a quarterly basis and $17,288 for the nine months ending November 30, 2023. The interest rate chargeable is a guideline determined by the South African Reserve Bank and gets utilized by financial institutions to determine the financial gain they may derive from a loan. The Prime rate is therefore an arm’s length transaction and justifiable rate that can be applied to a loan within the borders of the Republic of South Africa and therefore complies with the arm’s length definitions in ASC 850-10-50-6.

The loan can be settled in cash or any other form of equivalent. Under statutory banking regulations, the South African Reserve Bank would need to approve any settlement made by Medinotec Inc on behalf of its subsidiary DISA Medinotec.

F-12

Table of Contents

Minoan Medical’s ~~ultimate~~Proprietary beneficial owner is the CEO of the Company, Dr. Gregory Vizirgianakis, and is used to hold his medical investments and exports of which DISA Medinotec was one of these investments before it was transferred into the Company. Pieter van Niekerk (CFO) also serves as a director for Minoan Medical.Limited:

~~Operational~~Loans ~~charges~~payable ~~are~~consists ~~charged~~of toa $1,266,115 unsecured loan from the prior parent entity of DISA Medinotec in South Africa called Minoan Medical. This loan ~~account~~originated to fund working capital and capex expansions of DISA Medinotec during the developmental and startup phase. After the acquisition of DISA Medinotec on March 2, 2022, the Company assumed this liability. The Company has a period of 3 years after the IPO date or a date at which the Company starts trading on a recognizable exchange to repay the loan. During these 3 years the loan will carry interest at the prevailing prime lending rate of the time. The prevailing lending rate in South Africa was 11.75% on May 31, 2024. The terms of this loan are deemed to be market related.

	November 30 2023 $		February 28 2023 $
Minoan Medical Proprietary Limited		1,580,249		1,862,793
Minoan Capital Proprietary Limited		265		273
Total loans payable		1,580,514		1,863,066

The Minoan Medical loan decreased by $503,573 during the quarter ending May 31, 2024.

~~Accounts~~The ~~payable~~interest charged for the quarter was $46,222 and ~~accrued~~a ~~expenses~~ 1% movement in the interest rates constitutes a value of $3,934.

The Company has the option to make early settlement in cash or any form of equivalent.

Minoan Medical Proprietary Limited’s ultimate beneficial owner is the CEO of the Medinotec Group of Companies Dr. Gregory Vizirgianakis and is used to hold his medical investments and exports of which DISA Medinotec Proprietary Limited Incorporated was one of these investments before it got transferred into the Medinotec Group of Companies. Pieter van Niekerk also serves as a director of Minoan Medical Proprietary Limited.

Minoan Capital Proprietary Limited:

This is an unsecured, interest-free loan with no fixed terms of repayment.

Minoan Medical and Minoan Capital are related parties of the Group as the CEO Dr Gregory Vizirgianakis has common control.

8. Accounts payable and accrued expenses

a. Accounts payable by period

Accounts payable consist of the following:

	November 30		February 28
	May 31, 2024 $		Feb 29, 2024 $
	2023		2023
Trade accounts payable		502,217		588,640
	$		$
Accrued payroll, payroll taxes and leave pay		1,210		11,684
Trade accounts payable		270,695		53,615
Provision for professional fees		22,682		92,000
Accrued payroll, payroll taxes and vacation		15,943		6,995
Royalties payable		11,577		35,139
Royalties payable		35,664		10,701
Tax Liability		198,617		53,646
Provision for income tax		12,300		—
Other payables		8,288		20,441
Total		~~334~~744,~~602~~591		71801,~~311~~550

~~Commitments~~One major European Cardiac supplier constitutes 51% (61% on February 29, 2024) of the total trade accounts payable.

~~a. Leases and deferred rent~~F-17

The Company leases office and warehouse space under noncancelable operating lease agreements, which became effective on August 1, 2023, for a period of 3 years, terminating July 31, 2026. The Company is required to pay property taxes, insurance, and normal maintenance costs for certain of these facilities and will be required to pay any increases over the base year of these expenses on the remainder of the Consolidated entities facilities.

Certain of the Company’s operating leases contain predetermined fixed escalations of minimum rentals during the lease term. For these leases, the Company recognizes the related rental expense on a straight- line basis over the life of the lease from the date the Company takes possession of the office and records the difference between amounts charged to operations and amounts paid as deferred rent. As of November 30, 2023, $0 had been accrued.

F-13

Table of Contents

~~Rent expense under the agreement was $23,391 for the quarter ending November 30, 2023~~9. ~~Rent commitments, before considering renewal options that generally are present, were as follows:~~ Commitments

Financial year ending February 28			$
2024			15,853
2025			31,705
2026			31,705
2027			13,210
2028			—
Total			92,473

a. Leases and deferred rent

The Company leases office and warehouse spaces under a cancelable operating lease agreement with contractual terms from August 1, 2023 to July 31, 2026. The Company is required to pay property taxes, insurance, and normal maintenance costs for certain of these facilities and will be required to pay any increases over the base year of these expenses on the remainder of the Company’s facilities.

Rental expense for operating leases for the period ended May 31, 2024 was $12,678 compared to $7,883 for the period ended May 31, 2023.

Lease cost associated with operating leases is charged to general and administrative expenses in our consolidated financial statements. The exercise of lease renewal options is at our sole discretion. No extension period has been included in the determination of the right of use asset or the lease liability, as we concluded that it is not reasonably certain that we would exercise such option.

Maturities of our operating lease liability as of May 31, 2024 was as follows:

	Amounts

Remainder of 2025		23,409
2026		31,211
2027		13,005
Total undiscounted lease payments:		67,625
Less: Imputed Interest		(8,177	)
Total operating lease liabilities		59,448

Operating lease liabilities, current portion		25,575
Operating lease liabilities, net of current portion		33,873

b. Litigation

From time to time, the Company may become involved in various legal proceedings in the ordinary course of its business and may be subject to third-party infringement claims.

In ~~the~~ the normal course of business, the ~~Company~~consolidated ~~may~~entities my agree to indemnify third parties with whom ~~they~~it ~~enter~~enters into contractual relationships, including customers, lessors, and parties to other transactions with the ~~Company~~Consolidated entities, with respect to certain matters. The Consolidated ~~Company~~entities has agreed, under certain conditions, to hold these third parties harmless against specified losses, such as those arising from a breach of representations or covenants, other third-party claims that the ~~Company~~Group’s products, when used for their intended purposes infringe the intellectual property rights of such other third parties, or other claims made against certain parties. It is not possible to determine the maximum potential amount of liability under these indemnification obligations due to the ~~Company’s~~Consolidated entities limited history of prior indemnification claims and the unique facts and circumstances that are likely to be involved in each claim.

From time to time, the Company is subject to various claims that arise in the ordinary course of business. Management believes that any liability of the Condensed Consolidated entities that may arise out of or with respect to these matters will not materially adversely affect the financial position, results of operations, or cash flows of the Company.F-18

AsTable of ~~November 30, 2023, there were no known material litigation or claims against the Company.~~Contents

~~Stockholders'~~From ~~equity~~time to time, the Consolidated entities are subject to various claims that arise in the ordinary course of business. Management believes that any liability of the consolidated entities that may arise out of or with respect to these matters will not materially affect the financial position, results of operations, or cash flows of the Consolidated entities.

At the reporting date there is no known material litigation or claims against the Group.

10. Stockholders’ equity

a. Authorized and issued stock by period

Authorized:

As of May ~~November 30~~31, ~~2023~~2024, ~~Medinotec Inc.,~~ the ~~parent~~ Company, had ~~188~~200,~~266~~000,~~250~~000 shares of common stock authorized, ~~and~~par value $0.001 per share, with 188,266,250 available to issue for purposes of satisfying conversion of preferred stock, the exercise ~~of warrants, the exercise~~ and future grant of common stock options, and for purposes of any future business acquisitions and transactions.

As of May ~~November 30~~31, ~~2023~~2024, ~~Medinotec Inc.,~~ the ~~parent~~ Company, had 20,000,000 shares of preferred stock authorized, par value $0.001 per share, and available to issue.

	November 30 2023 $		February 28 2023 $
Common stock		11,734		11,734
Common stock additional paid in capital		3,296,391		3,296,391
Total		3,308,125		3,308,125

This has remained unchanged from the previous financial year ending February 29, 2024.

~~F-14~~Issued and outstanding shares


	May 31 2024		Feb 29 2024
Common shares		11,733,750		11,733,750
Stock issued		—		—
Total		11,733,750		11,733,750

Amount of shares


	May 31 2024 $		Feb 29 2024 $
Common shares		11,734		11,734
Stock issued		—		—
Total		11,734		11,734

11. Income taxes

For the three months ended May 31, 2024 and 2023, our provision for income taxes was an expense of $126,939 and $1,969, respectively. The effective tax rate for the three months ended May 31, 2024 and 2023 was 59% and 10%, respectively. The effective tax rate for the three months ended May 31, 2024 differed from the U.S. statutory federal income tax rate of 21% primarily due to permanent differences which includes GILTI, and foreign rate differentials. The effective tax rate for the three months ended May 31, 2023 differed from the U.S. statutory federal income tax rate of 21% primarily due to foreign rate differentials.

F-19

Table of Contents

~~Income taxes~~12. Transactions with related parties

c. Provision for income taxes

Name	Relationship with the Medinotec Group of Companies	Related transactions with the Medinotec Group of Companies	Related Directors with the Medinotec Group of Companies	Related Owners with the Medinotec Group of Companies
Minoan Medical Proprietary Limited	Medical investment company controlled by Dr Gregory Vizirgianakis	Related Party Loan	Dr Gregory Vizirgianakis Pieter van Niekerk	Dr Gregory Vizirgianakis is the ultimate beneficial owner
Minoan Capital Proprietary Limited	Property investment company controlled by Dr Gregory Vizirgianakis	Related party loan Rental Expenses	Dr Gregory Vizirgianakis is the ultimate beneficial owner	Dr Gregory Vizirgianakis is the ultimate beneficial owner
Medinotec Capital Proprietary Limited	The African holding company of the Medinotec Group of Companies	Related party loan payable to Minoan Capital	Dr Gregory Vizirgianakis Pieter van Niekerk	Medinotec Incorporated in Nevada is the 100% ultimate parent entity
DISA Medinotec Proprietary Limited	The African operating and manufacturing company	Related party loan with Minoan Medical Operational income and expenses with Minoan Medical	Dr Gregory Vizirgianakis Pieter van Niekerk	Medinotec Incorporated in Nevada is the 100% ultimate parent entity
Medinotec Incorporated Nevada	Ultimate parent of Medinotec Capital and DISA Medinotec	All of the above for its related subsidiaries	Dr Gregory Vizirgianakis Pieter van Niekerk Joseph P Dwyer Stavros Vizirgianakis Athanasios Spirakis	This is the entity owned by the shareholders and primarily controlled by Dr Gregory Vizirgianakis and his Brother Stavros Vizirgianakis
Medinotec Group of Companies	The Consolidated group name of Medinotec Incorporated, Medinotec Capital Proprietary Limited and DISA Medinotec Proprietary Limited	above for its related subsidiaries	Dr Gregory Vizirgianakis Pieter van Niekerk Joseph P Dwyer Stavros Vizirgianakis Athanasios Spirakis	This is the entity owned by the shareholders and primarily controlled by Dr Gregory Vizirgianakis and his Brother Stavros Vizirgianakis

~~The components of income tax expense are as follows:~~F-20

	Three months ended (unaudited)				Nine months ended (unaudited)
	November 30, 2023 $		November 30, 2022 $		November 30, 2023 $		November 30, 2022 $
Tax from operations
Current		—		—		12,300		—
Foreign		63,022		19,560		50,183		(30,905	)
Total		63,022		19,560		62,483		(30,905	)

The reconciliation of income tax expense (benefit) computed at the Federal statutory tax rates to income tax expense (benefit) is as follows:

	Three months ended (unaudited)					Nine months ended (unaudited)
	November 30, 2023			November 30, 2022		November 30, 2023			November 30, 2022
	$			$		$			$
Tax at federal statutory rates		21			21		21			21
Deferred taxes and timing differences		(6	)		3		(7	)		(11	)
Total		15			24		28			10

No uncertain tax positions have been identified for the current or comparative period.

a. Deferred taxes/Future income tax assets and valuation allowance

Significant components of the Company's future tax assets are as follows:

	November 30 2023 $		February 28 2023 $
Leave pay provision		2,224		3,102
Tax credits assessed by tax authorities		36,877		105,849
Provision for credit losses		5,011		—
Provision for stock obsolescence		2,147		—
Provision for Royalties		9,629		—
Total		55,888		108,951
Net deferred/future tax asset		55,888		108,951

Deferred tax assets refer to assets that are attributable to differences between the Condensed Consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets in essence represent future savings of taxes that would otherwise be paid in cash. The realization of the deferred tax assets is dependent upon the generation of sufficient future taxable income, including capital gains. If it is determined that the deferred tax assets cannot be realized, a valuation allowance must be established, with a corresponding charge to net income. The current nine months ending November 30, 2023, the Company is approaching its breakeven point with marginal profitability. The on boarding of various planned new products as discussed in the post balance sheet events note is expected to change the profitability of the Company materially into the future and therefore the deferred tax assets on the tax losses will be utilized as these profits build up over time.

F-15

Table of Contents

Pieter van Niekerk Chief financial officer of the Medinotec Group of Companies Transactions relating to mutual entities disclosed above Related ~~party~~ ~~transactions~~directorships disclosed above Minority Shareholder in Medinotec Inc Gregory Vizirgianakis Chief Executive officer of the Medinotec Group of Companies Brother of Stavros Vizirgianakis Transactions relating to mutual entities disclosed above Related directorships disclosed above Shareholder in Medinotec Inc and Kingstyle investments. Stavros Vizirgianakis Non-Executive director of the Medinotec Group of companies Brother of Gregory Vizirgianakis Transactions relating to mutual entities disclosed above No Related other Directorships in Medinotec Group of Companies n/a Joseph Dwyer Non-Executive director of the Medinotec Group of companies Transactions relating to mutual entities disclosed above No Related other Directorships in Medinotec Group of Companies n/a Athanasios Spirakis Independent director of the Medinotec Group of companies Transactions relating to mutual entities disclosed above No Related other Directorships in Medinotec Group of Companies n/a

The following table shows the transactions that the Company’s directors, executive officers, holders of 5% or more of any class of our capital stock have had with respect to a direct or indirect material interest in the Company.

Related Party Summary

Name	Relationship with the Medinotec Group of Companies	Related transactions with the Medinotec Group of Companies	Related Directors with the Medinotec Group of Companies	Related Owners with the Medinotec Group of Companies
Minoan Medical Proprietary Limited	Medical investment company controlled by Dr Gregory Vizirgianakis	Related Party Loan and Sales	Dr Gregory Vizirgianakis Pieter van Niekerk	Dr Gregory Vizirgianakis is the ultimate beneficial owner
Minoan Capital Proprietary Limited	Property investment company controlled by Dr Gregory Vizirgianakis	Related party loan Rental Expenses	Dr Gregory Vizirgianakis is the ultimate beneficial owner
DISA Vascular Distribution Proprietary Limited trading as DISA Lifesciences	Sub-distributor appointed by DISA Medinotec Proprietary Limited for Africa	Sales Income	Pieter van Niekerk – Serves as independent non- executive according to distribution agreement.	n/a external third party
			Pieter van Niekerk resigned as a non- executive director on October 14, 2022 and therefore the related party relationship ceased to exist on the same date.
Medinotec Capital Proprietary Limited	The African holding company of the Medinotec Group of Companies	Related party loan payable to Minoan Capital	Dr Gregory Vizirgianakis Pieter van Niekerk	Medinotec Incorporated in Nevada is the 100% ultimate parent entity

F-16

Table of Contents

Name	Relationship with the Medinotec Group of Companies	Related transactions with the Medinotec Group of Companies	Related Directors with the Medinotec Group of Companies	Related Owners with the Medinotec Group of Companies
DISA Medinotec Proprietary Limited	The African operating and manufacturing company	Related party loan with Minoan medical Operational income and expenses with Minoan Medical	Dr Gregory Vizirgianakis Pieter van Niekerk	Medinotec Incorporated in Nevada is the 100% ultimate parent entity
Medinotec Incorporated Nevada	Ultimate parent of Medinotec Capital and DISA Medinotec	All of the above for its related subsidiaries	Dr Gregory Vizirgianakis Pieter van Niekerk Joseph P Dwyer Stavros Vizirgianakis	This is the entity owned by the shareholders and primarily controlled by Dr Gregory Vizirgianakis and his Brother Stavros Vizirgianakis
Medinotec Group of Companies	The Consolidated group name of Medinotec Incorporated, Medinotec Capital Proprietary Limited and DISA Medinotec Proprietary Limited	above for its related subsidiaries	Dr Gregory Vizirgianakis Pieter van Niekerk Joseph P Dwyer Stavros Vizirgianakis	This is the entity owned by the shareholders and primarily controlled by Dr Gregory Vizirgianakis and his Brother Stavros Vizirgianakis
Pieter van Niekerk	Chief financial officer of the Medinotec Group of Companies	Transactions relating to mutual entities disclosed above	Related directorships disclosed above	Minority Shareholder in Medinotec Inc
Gregory Vizirgianakis	Chief Executive officer of the Minoan Group of Companies Brother of Stavros Vizirgianakis	Transactions relating to mutual entities disclosed above	Related directorships disclosed above	Shareholder in Medinotec Inc

F-17

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Name Relationship with the Medinotec Group of Companies Related transactions with the Medinotec Group of Companies Related Directors with the Medinotec Group of Companies Related Owners with the Medinotec Group of Companies Stavros Vizirgianakis Non-Executive director of the Medinotec Group of companies Brother of Gregory Vizirgianakis Transactions relating to mutual entities disclosed above No Related other Directorships in Medinotec Group of Companies n/a Joseph Dwyer Non-Executive director of the Medinotec Group of companies Transactions relating to mutual entities disclosed above No Related other Directorships in Medinotec Group of Companies n/a

a. Rent

DISA Medinotec Propriety Limited leases commercial buildings from Minoan Capital ~~Proprietary Limited (“Minoan Capital”)~~. Minoan Capital is ~~fully~~ owned 100% by the Chief Executive Officer of the Medinotec ~~Company~~Group of Companies, Dr. Gregory Vizirgianakis. Pieter van Niekerk, CFO of the ~~Company~~Medinotec Group of Companies, also serves as a director on Minoan Medical Proprietary Limited. We are currently also renting storage and office space in the US on a 12-month lease agreement.

~~The~~Rental ~~lease~~expense ~~agreement~~for ~~was~~operating ~~renewed,~~leases ~~effective~~for ~~August~~the 1,quarter ~~2023~~ended February 29, ~~for~~2024 awas ~~period~~$12,678 ofcompared 3to ~~years~~$7,883 ~~terminating~~for ~~July~~the quarter ended May 31, ~~2026~~ 2023.

Set forth below is a table showing the ~~Company’s~~Consolidated entities' rent paid ~~and accounts payable~~ for the ~~quarters~~quarter ended ~~November~~May 3031, ~~2023,~~2024 ~~and 2022,~~ with Minoan Capital:

	Three months ended (unaudited)				Nine months ended (unaudited)
		May 31, 2024 $		May 31, 2023 $
	November 30, 2023		November 30, 2022		November 30, 2023		November 30, 2022
Rent		7,793		7,883
	$		$		$		$
Rent expense		7,797		13,957		23,650		32,309
Total		7,797		13,957		23,650		32,309

~~Reporting~~Rent ~~Segments~~is comparable to rent charged for similar properties in the same relative area. The company does market research of a Minimum and ~~Disaggregated~~a ~~Revenue~~Maximum rental value within the area at every renewal of the rental agreement to ensure this is market related, this exercise is undertaken together with a registered property agent who has the appropriate knowledge of the area.

The Company has two reportable segments that comprise the structure used by the Company to make key operating decisions and assess performance. The Company’s reportable segments are operating segments that are differentiated by the activities that each undertakes and the products they manufacture and market (referred to as business segments). Each business utilizes the same technology, manufacturing, and marketing strategies, but differs by geographical region only.F-21

Our reportable segments from a geographical perspective are segmented within the territory of the United States and outside the United States. From a product sales perspective, management separately considers the activities in these geographies on a segmental basis. The Company manufactures and sells medical devices in two divisions namely: sales inside the United States (Domestic) and sales outside the United States (International). This is further segmented into “Internally Designed/Manufactured Sales” and “Distribution Agreement Sales” Internally Designed/Manufactured sales represents sales made of products for which the Intellectual know how was created within the Company where the Company has distributed products on behalf of other principals the sales are categorized as Distribution Agreement Sales. No further segmentation is currently required by the Company due to the fact that all sales of the business regardless of segment are in the cardiovascular and upper airway health care market.

The financial information of the Company’s reportable segments is used for the purpose of making decisions about allocating resources to the segment and assessing its performance.

Operating segments are reported in a manner consistent with the internal reporting provided to the Company, which is responsible for allocating resources and assessing the performance of the operating segments.

F-18

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~~Income statement~~b. ~~measures applied~~Loan

Reporting Segments and Disaggregated Revenue - Income statement measures applied
	Three months ended (unaudited)				Nine months ended (unaudited)
	November 30, 2023		November 30, 2022		November 30, 2023		November 30, 2022
	$		$		$		$
Inside United States of America		131,225		—		415,518		—
Outside United States of America		1,871,322		387,989		2,354,029		720,339
Total		2,002,547		387,989		2,769,547		720,339

This is an unsecured loan from the prior parent entity of DISA Medinotec Proprietary Limited incorporated in South Africa called Minoan Medical. This loan originated to fund working capital and capex expansions of DISA Medinotec Proprietary Limited Incorporated during the developmental and startup phase.

	Three months ended (unaudited)				Nine months ended (unaudited)
	November 30, 2023		November 30, 2022		November 30, 2023		November 30, 2022
	$		$		$		$
Outside of United States of America
Internally Designed/Manufactured Sales		526,519		387,989		1,009,226		720,339
Distribution Agreement Sales		1,344,803		—		1,344,803		—
		1,871,322		387,989		2,354,029		720,339
Sales Generated inside the United States of America
Internally Designed/Manufactured Sales		131,225		—		415,518		—
Total		2,002,547		387,989		2,769,547		720,339

The Consolidated entities, particularly Medinotec Inc., have the option to settle earlier in cash or any form of equivalent.

~~The Company sells a significant amount to DISA Vascular Distribution Proprietary Limited trading as DISA Life Sciences (“DISA Lifesciences”)~~13. ~~For the quarter ending~~ ~~November~~ Subsequent 30, 2023, 79% (November 30, 2022: 64%) and for the nine months ended November 30, 2023, 66% (November 30, 2022: 66%) of the Company's total revenue is derived from this single customer in the distribution environment in South Africa.events

	Three months ended (unaudited)				Nine months ended (unaudited)
	November 30, 2023		November 30, 2022		November 30, 2023		November 30, 2022
	$		$		$		$
Depreciation and amortization
Inside United States of America		—		—		—		—
Outside United States of America	$	17,397		16,932		54,664		64,153

In accordance with ASC 855-10, we have analyzed events and transactions that occurred subsequent to May 31, 2024 through the date these financial statements were issued and have determined that we do not have any other material subsequent events to disclose or recognize in these financial statements.

~~Subsequent events~~F-22

There were no subsequent events for the quarter ending November 30, 2023.

F-19

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~Forward-Looking Statements~~

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward- looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe-harbor provisions. Forward-~~looking statements are based on current expectations and assumptions~~Looking that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include but are not limited to changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.Statements

This quarterly report contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans and objectives for our future operations. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks include, by way of example and not in limitation:

	•	the uncertainty of profitability based upon our history of losses;
	•	legislative or regulatory changes concerning cardiac devices and therapies;
	•	risks related to our outstanding loans and our ability to service debt;
	•	risks related to our operations and uncertainties related to our business plan and business strategy;
	•	changes in economic conditions;
	•	uncertainty with respect to intellectual property rights, protecting those rights and claims of infringement of other’s intellectual property;
	•	competition; and
	•	cybersecurity concerns.

This list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully, including those contained in our Annual Report on Form 10-K under “Risk Factors” for the year ended December 31, 2023, and readers should not place undue reliance on our forward-looking statements. Forward looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made, and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

Business Overview

Medinotec Inc. established Medinotec Capital Proprietary Limited in South Africa as a wholly owned subsidiary, which in turn acquired DISA Medinotec Proprietary Limited, after successfully proving that a private placement of a minimum of $3 ~~million~~Million was feasible.

Medinotec Capital ~~Proprietary~~ Proprietary Limited acquired DISA Medinotec Proprietary Limited (therefore establishing the Medinotec Group of Companies), a South African based medical device manufacturing and distribution company.

In 2018, DISA Medinotec developed its most innovative product to date – the Trachealator. This award-winning (Medical Design Excellence Awards – Gold Winner 2021) balloon catheter was developed to address an as-yet unmet supply need in the specialty of advanced airway management, more specifically tracheal dilation. That makes this innovative product in the Company’s opinion a world first in its ability to dilate a patient’s airway while maintaining ventilation to the patient without obstructing his/her airway.

This life-saving device has quite literally changed the way that tracheal and, to a degree, bronchial stenosis, is managed in extremely ill patients. This is especially true in a post Covid-19 world where tracheal stenosis due to extended tracheal intubation is becoming an ever more frequent pathology encountered by surgeons.

In management’s opinion, the Company is currently considered a global leader in tracheal non-occlusive airway dilation technology. This belief of management was formed on the fact that there are a number of airway dilation balloons that are offered for the management of tracheal stenosis, but to the Company’s knowledge all of them are occlusive in nature. The fact that the Trachealator is a non-occlusive airway solution, allowing for continuous ventilation during dilation, results in management believing that the Company could be regarded as a global leader in this technology.

Table of Contents

~~Other~~The ~~products manufactured by the Company include:~~Trachealator

•In ~~The~~2018, ~~“Cape~~DISA ~~Cross~~Medinotec Proprietary ~~PTCA~~Limited ~~Catheter”: The Company also designed and~~ developed aits ~~range~~most ofinnovative ~~semi-compliant~~product ~~coronary~~to ~~PTCA~~date ~~balloon~~– ~~catheters known as~~ the ~~Cape Cross, which attained a CE Mark and are marketed around the world and in South Africa, becoming a widely used interventional balloons in the market~~Trachealator. AThis ~~PTCA~~award-winning ~~balloon catheter~~ (~~also~~Medical ~~known~~Design asExcellence Awards a– ~~Plain~~Gold ~~Old~~Winner ~~Balloon Angioplasty [“POBA”] catheter~~2021) is inserted either from the groin or the arm and threaded through the blood vessels, through the aorta into the heart. The cardiac surgeon and/or interventional cardiologist will move the catheter to the blocked artery (plaque). The balloon ~~part of the~~ catheter is inflated to open the blockage in the artery, after which the balloon is deflated, and the entire catheter withdrawn and removed. If this procedure is not effective enough to open the artery, a coronary stent will be placed inside the diseased area of the artery. • Cape “Cross Non-Compliant (“NC”)” : Catheter on the back of the Cape Cross, the Cape Cross NC Catheter was developed ~~for~~to ~~post~~address ~~dilation purposes. The product has become a mainstay of our cardiology range. It is CE Marked and widely used in South Africa. After a stent is placed in~~ an artery, it is followed up by moving a NC catheter to the site where the stent was placed. The NC catheter balloon part is then inflated inside the stent. This is done to “seat” the stent inside the artery wall. In other words, if the stent was not optimally placed, the NC Catheter can be used to make the stent fit “snugly” against the artery wall to avoid dislodgement and movement of the stent after placement. • The OUTFLO: Aortic Perfusion and Dilation Catheter, a nonas-~~occlusive~~yet ~~perfusion~~unmet ~~balloon~~supply toneed ~~allow the expansion of the aortic valve (“BAV” or Balloon Aortic Valvuloplasty) without impeding the cardiac output, which is currently~~ in the ~~mid~~specialty ~~stages~~ of ~~research~~advanced ~~and development and could potentially be used to post-dilate the artificial valve in Transcatheter Aortic Valve Implantation (“TAVI”)~~airway management, amore ~~rapidly~~specifically ~~growing~~tracheal ~~market, without the need for pacing~~dilation. •That Amakes ~~highly~~this ~~specific,~~innovative ~~niche~~product ~~Chronic Total Occlusion (“CTO”) Catheter of 1mm~~ in ~~diameter: This micro balloon catheter addresses an extremely specific market need for difficult coronary cases and may cement in~~ our opinion a ~~position~~world asfirst ~~one of the leading specialized coronary balloon catheter manufacturers~~ in ~~the~~its ~~world.~~ability •to Adilate a ~~new~~patient’s ~~self-expanding,~~airway ~~temporary,~~while ~~silicone~~maintaining ~~Tracheal~~ventilation ~~Stent~~ to ~~be used in conjunction with~~ the ~~Trachealator~~patient inwithout ~~the~~obstructing ~~treatment~~his/her ~~of tracheal stenosis. The complimentary nature of this product will build on our current expertise in the field of advanced~~ airway ~~management and provide the surgeon with additional treatment options for complicated Airway Stenosis cases~~. The Epistaxis: an inflatable non-occlusive balloon nasal catheter has been designed for fast control of intranasal bleeding. The preliminary clinical trials conducted were in the Company’s opinion satisfactory.

~~The~~This ~~following~~life-saving device ~~distinct~~has quite literally changed the way that tracheal and, ~~finite~~to ~~developmental~~a ~~phases~~degree, /bronchial ~~stages~~stenosis, is managed in extremely ill patients. ~~are~~This ~~applicable~~is especially true in a post Covid-19 world where tracheal stenosis due to ~~all~~extended ~~the~~tracheal ~~Company’s~~intubation ~~product~~is ~~pipeline~~becoming an ever more frequent pathology encountered by surgeons, ~~namely:~~who, thanks to The Medinotec Group of Companies, they now have a safe and effective tool at their disposal.

The Medinotec Group of Companies is currently in management’s opinion considered a global leader in tracheal non-occlusive airway dilation technology. This belief of management was formed on the fact that there are a number of airway dilation balloons that are offered for the management of tracheal stenosis, but to our knowledge all of them are occlusive in nature. The fact that the Trachealator is a non-occlusive airway solution, allowing for continuous ventilation during dilation, results in management believing that we could be regarded as a global leader in this technology.

Other products manufactured by The Medinotec Group of Companies include:

Aortic Valve Dilation Balloon Catheter (Developmental)

The Aortic Perfusion and Dilation Catheter is a non-occlusive perfusion balloon to allow the expansion of the aortic valve without impeding the cardiac output.

It is currently in the mid stages of research and development. This catheter could potentially be used to post dilate the artificial valve in TAVI (Transcatheter Aortic Valve Implantation) without the need for pacing.

A clinical study was conducted in 2022, as part of the development of the Technical File documentation which is currently undergoing examination by our Notified Body (DEKRA).

FDA certification via the 510(k) substantially equivalence process is currently underway, with submission expected by the end of April 2024 .

The Micro CTO Catheter (Developmental)

We have developed a highly specific niche CTO (Chronic Total Occlusion) catheter balloon range with diameters of 0.70 to 1.25 mm, as a size range extension to the current Cape Cross Rx PTCA Balloon Catheter.

These micro-balloon catheters address an extremely specific market need for difficult coronary cases and will further cement our position as one of the premier specialized coronary balloon catheter manufacturers. The Technical File was submitted to our Notified Body at the end of July 2023 and is currently undergoing examination.

The process of obtaining FDA certification for the full range of Cape Cross PTCA catheters via the 510(k) substantial equivalence process commenced in January 2024 and the expected submission date is July 2024 .

The Tracheal Stent (Developmental)

We are currently in the initial stages of development of a new self-expanding, temporary, silicone tracheal stent to be used in conjunction with the Trachealator balloon in the treatment of tracheal stenosis.

The complimentary nature of this product will further build on our know-how in the field of advanced airway management, and we look forward to its further design and testing over the upcoming months.

Table of Contents

The following distinct and finite developmental phases / stages are applicable to all our product pipeline, namely:

R&D

Pre-production prototyping

Testing

Production

Clinical trials

MDR/CE Mark accreditation

Local marketing & selling

8) International sales outside the ~~United States~~US

FDA 510 (k) approval

10) Sales to the United States.

Table of Contents

The products described have reached the following stages:

	Trachealator:	~~From~~The ~~humble beginnings, the~~ Company is pleased to report that, since sales commenced, it has supplied ~~over~~501 ~~400~~ Trachealators, both in private and academic hospitals throughout the United States of America. FDA listing and CE registration was obtained.
		FDA listing registration for Medinotec Inc was obtained.
	Cape Cross PTCA Catheter:	Application for FDA 510(k) clearance in progress with external consultants. Final submission pending. CE certification has been obtained.
	Cape Cross PTCA Catheter:	FDA 510(k) clearance pending.
	Cape Cross NC Catheter:	Application for FDA 510(k) clearance in progress with external consultants. Final submission pending. CE certification has been obtained.
	Cape Cross NC Catheter:	FDA 510(k) clearance pending
	Lamprey Suction Dissector:	The progress of this product's development has been temporarily suspended to prioritize the pursuit of products with greater economic viability.
	OUTFLO Aortic Perfusion Dilatation Catheter	R&D, Testing, Pre-Production Prototyping, Testing, Production, Clinical Trials, Application or MDR CE Mark Accreditation has been submitted. FDA 510 (K) clearance in progress.
	Aortic Valve Dilation Balloon Catheter (Outflo):	R&D, Testing, Pre-Production Prototyping, Testing, Production, Clinical Trials, Application for MDR CE Mark Accreditation has been submitted. Application for FDA 510(k) clearance in progress with external consultants. Final submission pending.
	Micro CTO Catheter:	R&D, Testing, Pre-Production Prototyping, Clinical Trials MDR/CE Mark accreditation application ~~has~~was ~~been~~ submitted in July 2023.
	Tracheal Stent:	R&D
	Epistaxis Catheter	R&D, Testing, Pre-Production Prototyping, Testing, Production, Clinical Trials.
	Epistaxis Catheter:	R&D, Testing, Pre-Production Prototyping, Testing, Production, Clinical Trials – FDA 510(k) exempted (Class I product)

Results of Operations for the Three and Nine Months ended November 30, 2023, and 2022

Medinotec Inc. was formed in Nevada and is a holding company and is currently facilitating the sales of all products in the United States directly. Therefore, over time, as we implement our business plan and realize commercial operations in the United States, we believe Medinotec Inc. will become the primary operating company within the Medinotec Group of Companies and the South African DISA Medinotec will be the manufacturing platform for the operations in the United States of America and other countries.

Revenue

The Company’s revenue for the quarter ended November 30, 2023, was $2,002,547, compared to $387,989 in revenue being recorded in the comparative quarter for the prior year. The Company’s revenue for the nine months ended November 30, 2023, was $2,769,547, compared to $720,339 in revenue being recorded in the comparative nine months in the prior year.

This table indicates the sales per revenue stream as a breakdown of the total revenue balance:

	Three months ended (unaudited)				Nine months ended (unaudited)
	November 30, 2023		November 30, 2022		November 30, 2023		November 30, 2022
	$		$		$		$
Outside of United States of America
Internally Designed/Manufactured Sales		526,519		387,989		1,009,226		720,339
Distribution Agreement Sales		1,344,803		—		1,344,803		—
		1,871,322		387,989		2,354,029		720,339
Sales Generated inside the United States of America
Internally Designed/Manufactured Sales		131,225		—		415,518		—
Total		2,002,547		387,989		2,769,547		720,339

Table of Contents

~~Revenue increased~~Results inof ~~comparison to the prior year by $1,614,558~~ Operations for the ~~quarter~~Three ~~and~~Months byended ~~$2,049,208~~May ~~for the nine months. The reason for the higher sales growth was due to new distribution agreements the Company entered into. This led to increased revenues in South Africa. In addition~~31, ~~the~~ ~~Company~~2024 ~~realized sales for its Trachealator in the United States for the three~~ and ~~nine~~May ~~months ended November 30~~31, 2023~~, with no such sales inside the United States for the prior year periods.~~

The increase for the sales category “Internally Designed/Manufactured ” which includes the Trachealator product in both the outside and inside United States territories, is substantiated by the roll out of this product as our lead product in the non-occlusive tracheal dilation market and the increase in its popularity and use within these territories.Revenue

NoThe Consolidated Medinotec Group of Companies’ revenue for the period ended May 31, 2024 was ~~generated~~$2,327,249 bycompared ~~affiliations~~ to ~~related~~$416,208 ~~parties~~in ~~during~~revenue for the period ~~three~~ended orMay ~~nine~~31, ~~months~~2023, ~~ending~~an ~~November~~increase 30of $1,~~2023~~911,041.

The reason for the higher sales growth was due to various new distribution agreements in the surgical specialty of cardiology the Company entered into. These agreements are short term in nature and can be cancelled on non-performance clauses by either party. It has a strong geographical country specific risk which is mainly concentrated to South Africa. This led to increased revenues in South Africa. The rapid sales growth is attributable to the fact that these distributors already have existing business as well as a reputation for quality product in South Africa. Disa Medinotec got awarded these contracts due to years of good relationships between the external third-party distributors and the current executive management of Disa Medinotec. In addition, the Company realized increased sales of $[*]for its Trachealator in the United States for the quarter ended May 31, 2024, as compared with $174,920 in sales inside the United States for the prior year period.

The increase in the sales of the Trachealator product, is substantiated by the roll out of this product as our lead product in the non-occlusive tracheal dilation market and the increase in its popularity and use within these territories.

Cost of Goods

~~The~~Cost ~~Company recorded cost~~ of goods sold ofwas $1,~~138~~399,~~628~~020 ~~for~~with ~~the~~a ~~quarter~~gross ~~ending~~profit ~~November~~percentage ~~30,~~of ~~2023,~~40% ~~up from $164,685~~ for the ~~quarter~~period ending ~~November~~May 3031, ~~2022~~2024. For the ~~nine~~period ~~months~~ ending ~~November~~May 3031, 2023, the ~~consolidated entities recorded~~ cost of goods sold ofwas $198,~~298,116,~~498 upwith ~~from~~a ~~$300,142~~gross ~~for~~profit ~~the~~percentage ~~nine~~of ~~months ending November 30, 2022~~76%.

The most material change in the increase in the cost of goods, is that it functions in a direct correlation to sales and therefore the cost of goods followed the same upward trend as sales.

~~Due~~The gross profit margin decreased due to the fact that distribution revenues are distributed at lower gross profit ~~margins~~ than internally designed products~~, there has been a substantial increase in the cost of goods, which has a direct correlation to the amount of distribution sales generated~~. The Rand weakened from an average conversion rate of 1$: 17.9 (2022) to 1$: 18.81 (2023) a 5% decline against the US Dollar. Therefore, even though on the face value it seems like cost of sales per unit decreased on a three- and nine-month basis from FY 2022 to 2023 it includes a positive conversion adjustment of approximately $61,435 for the quarter ending November 30, 2023, and a foreign exchange conversion of $69,410 for the nine months ending November 30, 2023. The Rand was very volatile against the US Dollar in the past two fiscal reporting periods.

No related party transactions are recorded in cost of sales for ~~both~~the ~~quarters~~period ~~and nine months~~ ending ~~November~~May 3031, ~~2023 and 2022~~2024.

Operating Expenses

~~The Company’s operating expenses~~Operating ~~were $606,009 for the quarter ended November 30, 2023, up from $197,805 for the quarter ended November 30, 2022. The Company’s operating~~ expenses were $1659,~~116,936~~061 for the ~~nine~~period ~~months~~ ended ~~November~~May 3031, ~~2023~~2024, up from $~~615~~276,~~288~~860 for the ~~nine~~period ~~months~~ ended ~~November~~May 3031, ~~2022~~2023.

~~The~~One ~~South African Rand weakened from an average conversion rate~~ of ~~1$: 17.9 (2022) to 1$: 18.81 (2023) a 5% decline against~~ the USmajor ~~Dollar.~~components ~~Therefore, this will cause an expense~~that ~~decrease/improvement~~affects ~~of 5% on~~ the operating expenses ~~due~~is ~~to dollar strength within~~ the ~~conversion~~costs ~~rate applied. This is estimated at a value~~ of ~~$30,300~~compliance for the ~~quarter~~business. ~~ending~~Certain ~~November~~costs ~~30,2023~~are ~~and~~once ~~$47,800~~off ~~for~~in ~~the~~nature ~~nine~~and ~~months~~others ~~ending~~will ~~November~~be ~~30,2023~~recurring.

After considering the effects of the foreign currency exchange, the remaining changes are mainly attributable to the General and administrative expenses that, together with the Compliance cost, showed a step cost increase to support the higher sales figure mainly due to the new revenue stream of the cardiology distribution business in South Africa for the nine months ended November 30, 2023.

The Consolidated Medinotec Group of Companies for the Periods Ended May 31

2024

2023

Compliance cost

57,403

60,263

Table of Contents

	Three months ended (Unaudited)										Nine months ended (Unaudited)
	Medinotec Inc Group Consolidated Periods Ended May 31
	November 30, 2023		November 30, 2022		Value Change						November 30, 2023		November 30, 2022		Value Change
	2024 $		2023 $
	$		$		$			% Change			$		$		$			% Change
Depreciation and amortization expense		17,916		12,444
Operating expenses
General and administrative expenses		605,156		216,115
Depreciation and amortization expense		11,604		10,329		1,275			12	%		36,449		52,860		(16,411)		(31)	%
Research and development expenses		14,981		2,262
General and administrative expenses		552,342		159,822		392,520			246	%		951,786		461,794		489,992		106	%
Selling expenses		21,008		46,039
Research and development expenses		2,728		6,405		(3,677	)		(57	)%		16,846		62,356		(45,510	)	(73	)%
Total operating expenses		659,061		276,860
Selling expenses		39,335		21,249		18,086			85	%		111,855		38,278		73,577		192	%
Total operating expenses		606,009		197,805		408,204			206	%		1,116,936		615,288		501,648		82	%

~~Due~~Limited toR&D ~~the~~activities ~~number~~were ofconducted ~~territories~~in ~~entered~~2023 ~~during~~due to the ~~year,~~focus ~~there~~on ~~was~~rolling ~~also~~out anthe ~~increase~~Trachealator in ~~general~~the ~~compliance~~United ~~costs~~States towhich ~~list~~consumed ~~products~~all ~~in these~~production ~~countries~~ and totesting ~~provide~~resources. ~~initial~~R&D ~~training~~activities ~~and~~have ~~marketing~~since ~~into~~resumed ~~these~~in ~~countries~~the current financial year.

~~Limited~~General and ~~R&D~~administrative ~~activities~~expenses ~~were conducted~~showed insignificant ~~this~~growth ~~quarter~~mainly due to ~~the~~increases ~~focus~~in onindependent ~~rolling~~contractor ~~out~~fees ~~the Trachealator~~ in the United States ~~which consumed all production~~ and ~~testing~~ ~~resources.~~more ~~R&D~~staff ~~activities have resumed and are expected to increase~~ for the ~~rest~~new ofCardiology ~~the~~distribution ~~year~~Revenues.

~~General~~ Net ~~and~~Income ~~administrative~~/ expenses showed significant growth mainly due to increases in independent contractor fees in the United States and higher staff compliment of 25 sales representatives in for the new Cardiology distribution Revenues.(Loss)

~~Other~~Net ~~costs~~Income ~~included but not as material:~~for ~~indemnity~~the ~~insurance~~quarter ~~and~~ending ~~payments~~May ~~made~~31, to2024 ~~service~~was ~~providers~~$87,204 asup ~~part~~from of ~~obtaining our quotation on the OTCQX markets and costs relating to the quotation on the OTC markets that will not be non-recurring in the future are estimated at~~ $3022,~~000~~288 ~~and~~from ~~all~~the ~~other~~prior ~~costs~~quarter ~~will~~ending ~~be repeated~~May ~~in the future~~31,2023.

AThe ~~future~~change ~~expected major component that affects the operating expenses~~ is mainly ~~the~~attributable ~~costs~~to ~~of compliance for~~ the ~~business.~~higher ~~These~~sales ~~costs increased significantly~~ as wediscussed ~~started to grow our product portfolio and are expected to rise as we enter new sales territories~~above. ~~Certain costs are once off in nature and others will be recurring. This will be determined after the markets have been entered and all regulatory requirements met.~~

	Three months ended (unaudited)				Nine months ended (unaudited)
	November		November		November		November
	30		30		30		30
	2023		2022		2023		2022
	$		$		$		$
Compliance cost		56,212		67,693		122,174		72,519

Liquidity and Capital Resources

*ComplianceAs of ~~costs~~May ~~are~~31, ~~included~~2024, the Company had current assets of $3,935,050 and total assets in the ~~General~~amount of $4,322,240. Current liabilities as of May 31, 2024, were $771,754. The Company had working capital of $3,163,296 as of May 31, 2024. In comparison, as of February 29, 2024, the Company had current assets of $4,379,297 and ~~Admin~~total assets in the amount of $4,804,279. Current liabilities as of February 29, 2024, ~~expenses~~were ~~line~~$827,453. ~~item~~Working capital was $3,551,844 as of February 29, 2024.

~~Sales~~Cash ~~and Marketing expenses are becoming more significant to~~flow ~~support the new Cardiology Distribution business in South Africa and to support the roll out of the Trachealator, an internally designed and manufactured product in the United States.~~movements

The following table summarizes our cash flows from continuing operations for the periods indicated:

	Quarter Ended May 31, 2024			Quarter Ended May 31, 2023
Net cash provided by (used in):
Operating Activities		246,183			(274,718	)
Investing Activities		(6,055	)		—
Financing Activities		(541,541	)		77,622

Cash flows from Operating Activities

The increase in net cash from operating activities from continuing operations for the quarter ending May 31, 2024 over the prior year quarter was due to a $64,916 increase in net income, as well as changes in assets and liabilities that had a current period cash flow impact, such as $210,288 of changes in working capital. The change in non-cash charges compared to the change in the prior year comparable period was primarily driven by a $4,563 increase in depreciation, a $54,133 variance in deferred income taxes, a $110,633 change in provisions and a bad debt write of amounting to $9,143 that was not present in the previous financial year.

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~~Related party expenses include~~Cash ~~$7,797~~flows tofrom ~~Minoan~~Investing ~~Capital for rental expenses in the quarter ending November 30, 2023. The related party rental expenses in the quarter ending November 30, 2022, amounted to $13,957.~~Activities

The ~~rent charge is comparable~~ toincrease ~~rent charged for similar properties~~ in ~~the~~net ~~same~~cash ~~relative~~used ~~area.~~by ~~The~~investing ~~company~~activities ~~does~~was ~~market~~due ~~research~~to ~~of a minimum and a maximum rental value within~~ the ~~area~~purchase ~~at every renewal~~ of ~~the rental agreement to ensure this is market related~~property, ~~this~~plant ~~exercise~~and isequipment ~~undertaken~~for ~~together~~operations ~~with~~during athe ~~registered~~period ~~property~~ending ~~agent~~May ~~who~~31, ~~has the appropriate knowledge of the area~~2024. ~~ASC 850-10-50-6.~~

~~Net~~Cash flow ~~Profit~~from /Financing ~~Loss~~Activities

~~The~~Cash flow ~~Company~~used ~~showed~~in ~~net~~financing ~~losses~~activities ofdecreased ~~$429,371 and~~during ~~$503~~the current period ending May 31,~~248~~ ~~for~~2024 ~~the~~when ~~three~~compared ~~and~~to ~~nine~~the ~~months~~prior ~~ended~~period ~~November~~ending 30May 31, 2023, ~~respectively,~~ as ~~compared~~a ~~with~~result ~~net~~of ~~losses~~the repayment of ~~$36,341~~a ~~and~~portion ~~$289,077 for~~of the ~~three~~related ~~and~~party ~~nine~~loan ~~months~~during ~~ended~~the ~~November~~current 30period, ~~2022,~~whereas ~~respectively~~during the prior period proceeds from long term debt were received.

The change is mainly attributable to the higher sales of the new cardiology distribution business in South Africa and increased sales of the Trachealator, an internally designed and manufactured product sold in the United States.

Also under non-operating expenses, a 1% movement in the interest rates constitutes a value of $1,606 on a quarterly basis and $14,454 for the nine months ending November 30, 2023. The interest charged for the three and nine months ending November 30, 2023, was $56,645 and $172,889, respectively. The interest charged for the three and nine months ending November 30, 2022, was $51,545 and $128,740, respectively. This change is attributable to an increase in the prime lending rate and additional drawdowns on the loan. The company utilizes a trade finance facility with a reputable third-party trade finance company in South Africa, the effect of this is recorded in trade receivables and interest is incurred at prime plus 1% which is market related. This facility is unsecured, and this facility accounts for the difference in interest reported as related party and external interest paid within the Interest Expense line item.

The interest rate chargeable is a guideline determined by the South African Reserve Bank and gets utilized by financial institutions to determine the financial gain they may derive from a loan. The Prime rate is therefore an arm’s length transaction and justifiable rate that can be applied to a loan within the borders of the Republic of South Africa and therefore complies with the arm’s length definitions in ASC 850-10-50-6.

Liquidity and Capital Resources

As of November 30, 2023, the Company had total current assets of $3,594,093 and total assets in the amount of $3,991,950. Total current liabilities as of November 30, 2023, were $336,190. The Company had working capital of $3,257,903 as of November 30, 2023. In comparison, as of February 28, 2023, the Company had total current assets of $3,369,487 and total assets in the amount of $4,490,432. Total current liabilities as of February 28, 2023, was $71,311. Consolidated, we had working capital of $3,298,167 as of February 28, 2023.

The research and development phase of the internally designed product lines have largely concluded. Therefore, we expect to see an increase in sales and marketing expenses, to build out of the territory of the United States. Combined with the Cardiology distribution contract business in South Africa.

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A private placement was completed in the wake of the successful research and development and subsequent regulatory approval in the prior financial year for $3,467,500 and therefore the Company has enough cash reserves and working capital to fund the roll out in the market of the United States including new research and development activities and Marketing and Sales functions.

The Company has obtained a significant distribution revenue stream in South Africa. These distribution products currently and in the future are expected to add to the product basket of the business and ensure more revenues are generated in the Company, which consists of more mature but also profitable products that will complement our in house developed products. The Company appointed DISA Lifesciences, a South African based sub-distributor, which already distributes the in house manufactured brands of Medinotec within the market territory of South Africa. This sub-distributor will facilitate sales into the territory of South Africa while the main focus of the business unit still remains development of products for which it owns the IP, while the distributor will perform the sales and marketing functions in this territory. Sales contributed for the quarter ending November 30, 2023, is $1,344,803.

The Trachealator product obtained FDA approval in November 2022, which allowed the Company to sell this product into the United States of America. Since the Company had no prior sales channels or infrastructure in the United States, management found it prudent to plan a roll out of the product with a distributor that had an established network and infrastructure. For this business, the Company partnered with a company called Innovative Outcomes and entered into a revolving credit facility to a maximum of $750,000. Innovative Outcomes would use this to grow both their own distribution network and infrastructure and also allow for the Company to utilize this network and infrastructure. However, during quarter ending November 30, 2023, there was a material change in strategic focus where the Company would require its products to be marketed to niche surgical units, Innovative Outcomes would be servicing the wound care clinic market only which meant that the future growth of the combined network and infrastructure would not be a strategic match between the two entities. It was therefore decided to separate the network and infrastructure developed and for each company to pursue its strategic focus. The note receivable will continue on the same terms and become payable later in the 2024 financial year, but the Company decided to provide full impairment against this receivable on November 30, 2023. This decision was made in prudence due to the fact that the receivable is not backed by any Trachealator revenue streams anymore and does not change that Innovative Outcomes will still be liable for payment of this in the future Interest will accrue as normal until maturity date. Should payments be received this provision will be reversed with the same amount of cashflow received.

We have cash available on hand and believe that this cash will be sufficient to fund operations and meet our obligations as they come due within one year from the date these Condensed Consolidated financial statements are issued. In the event that we do not achieve the revenue anticipated in its current operating plan, management has the ability and commitment to reduce operating expenses as necessary. Our long-term success is dependent upon our ability to successfully raise additional capital, market our existing services, increase revenues, and, ultimately, to achieve profitable operations.

Our Unaudited Condensed Consolidated Financial Statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We received FDA 510(k) approval through the substantially equivalence process for Class II medical devices for our main product being the Trachealator. During the quarter ending November 30, 2023, the Company also obtained cardiology distribution revenues in South Africa, which significantly contributed to the overall profitability of the Company. With the research and development phase of most products completed, we expect to see an increase in sales being realized against the sales expenditure incurred.

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Cash Flow movements

Operating activities provided cash of $101,232 for the nine months ending November 30, 2023, whereas operating activities used cash $848,140 for the nine months ending November 30, 2022. This is mainly due to an increase in sales and profitability with the incorporation of the new Cardiology distribution revenues in South Africa and the growth of the Trachealator sales in the United States since sales significantly increased year on year and quarter on quarter.

Financing activities used cash of $282,552 during the nine months ended November 30, 2023, and provided cash of $4,229,838 for the same quarter in the prior year. The increase in the prior year is mainly due to the private placement being concluded during which $3,467,500 was raised and capital raising fees of $169,375 were incurred. The outflow year to date is due to the part settlement of the related party borrowing from Minoan Medical. The loan account in favor of Minoan Medical decreased by $282,552 during the nine months ended November 30, 2023. In the prior year the loan account increased by $931,713 in the nine months ended November 30, 2022. The loan account is used to fund operational requirements.

Off Balance Sheet Arrangements

As of ~~November~~May 3031, ~~2023~~2024, there were no off-balance sheet arrangements.

Critical Accounting Policies

Our critical accounting policies ~~estimates~~ are set forth in Note 2 to the ~~Unaudited Condensed~~ Consolidated ~~Financial~~financial ~~Statements~~statements.

We are classified as an emerging growth company for our first five fiscal years after obtaining an IPO since our gross revenues does not exceed $1.07 billion, we have not issued over $1 billion in non-convertible debt over three years, and have not elected to become a large, accelerated filer. We also qualify as a small reporting company since our public float is below $250 Million and ~~has~~ less than $100 million in revenue. If a company qualifies as a “smaller reporting company”,” as defined in Item 10(f)(1) of Regulation S-K, it may choose to prepare it’s ~~its~~ disclosure relying on scaled disclosure requirements for smaller reporting companies in Regulation S-K. With the current information available the company expects to remain an Emerging Growth Company for at least five years.

Recently Issued Accounting Pronouncements

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s Consolidated results of operation, financial position, or cash flow.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable

Item 4. Controls and Procedures ~~Disclosure Controls and Procedures~~

WeDisclosure ~~conducted~~Controls ~~an evaluation, with the participation of our Chief Executive Officer~~ and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of November 30, 2023, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of November 30, 2023, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses identified and described below.Procedures

11We conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of May 31, 2023, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of May 31, 2024, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses identified and described below.

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Our principal executive officers do not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive officers have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim Consolidated financial statements will not be prevented or detected on a timely basis. AsManagement ~~previously reported management~~ identified the following three material weaknesses that have caused management to conclude that, as of ~~November~~May 3031, ~~2023~~2024, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the reasonable assurance level:

1. We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes- Oxley Act as of the period ending ~~November~~May 3031, ~~2023~~2024. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness. 2. We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness. 3. Effective controls over the control environment were not maintained. Specifically, a formally adopted written code of business conduct and ethics that governs our employees, officers, and directors was not in place. Additionally, management has not developed and effectively communicated to employees its accounting policies and procedures. This has resulted in inconsistent practices. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

2. Mitigating Wefactors do not have sufficient segregation of duties within accounting functions. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency represented a material weakness.include:

~~3. Effective~~• ~~controls~~The ~~over~~board ~~the~~consists ~~control environment~~of ~~were~~40% ~~not~~executive ~~maintained.~~and ~~Specifically,~~60% anon-executive ~~formally~~directors. ~~adopted~~• ~~written~~There ~~code~~are oftwo ~~business~~independent ~~conduct~~non-executive ~~and~~directors ~~ethics~~on ~~that~~the ~~governs~~board. ~~our~~• ~~employees, officers,~~The ~~and~~audit ~~directors~~committee ~~was~~is ~~not~~chaired inby ~~place.~~an ~~Additionally,~~independent ~~management~~non-executive director who has ~~not~~extensive ~~developed~~experience and ~~effectively~~deemed ~~communicated~~ to ~~employees~~be ~~its~~a ~~accounting policies~~financial ~~and procedures~~expert. ~~This~~• ~~has~~Management ~~resulted~~is in ~~inconsistent~~the ~~practices,~~process ~~and~~of ~~based~~developing ona control charter. • Management has made new appointments which will increase the ~~assessment~~segregation ~~represented~~of aduties ~~material~~between ~~weakness~~staff.

4. In ~~There~~addition isto aaddress ~~lack~~these ofmaterial aweaknesses, ~~sufficient complement~~management ofperformed ~~personnel~~additional ~~within~~analyses and other procedures to ensure that the ~~finance~~Consolidated financial ~~and~~statements ~~accounting~~included ~~function~~herein ~~with~~fairly anpresent, ~~appropriate~~in ~~degree~~all ofmaterial ~~knowledge~~respects, ~~experience~~our Consolidated financial position, results of operations and ~~training~~cash flows for the periods presented. Accordingly, we believe that the Consolidated financial statements included in this report USfairly ~~GAAP~~present, ~~and~~in ~~SEC~~all ~~rules~~material ~~and~~respects, ~~regulations~~our tofinancial ~~evaluate~~condition, ~~and~~results ~~appropriately~~of ~~record~~operations and ~~disclose~~cash ~~complex~~flows ~~and/or~~for ~~unusual~~the ~~transactions~~periods presented.

To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

We intend to remedy our material weaknesses with regard to insufficient segregation of duties by hiring additional employees in order to segregate duties in a manner that establishes effective internal controls once resources become available.

Changes in Internal Control over Financial Reporting

No change in our system of internal control over financial reporting occurred during the period covered by this report, the period ended May 31, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

1210

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not a party to any material pending legal proceedings. We are not aware of any pending legal ~~proceedings~~proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

Item 1A: Risk Factors

WeIn addition to ~~have~~the ~~limited~~other ~~experience~~information set forth in ~~marketing~~this ~~and~~Quarterly ~~sales~~Report ~~and~~on ~~are~~Form in10-Q, carefully consider the ~~early~~risk ~~stages~~factors ofdescribed ~~building~~under ~~our~~the ~~sales~~heading “Part ~~channels~~I – Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K for the ~~life~~fiscal ~~science~~year ~~market~~ended February 29, 2024. Such risks described are not the only risks facing us. Additional risks and ~~internationally~~uncertainties not currently known to us, or that our management currently deems to be immaterial, also may adversely affect our business, financial condition, and/or operating results. There have been no material changes to those risk factors since their disclosure in our most recent Annual Report on Form 10-K.

We may not be able to market, sell or distribute our current and future products effectively enough to support our planned growth. Currently, we sell our products through a combination of direct sales efforts and partnerships with distributors across all of our key markets. During 2022, our distributors accounted for a significant portion of our total revenue. We are in the process of broadening and diversifying our sales channels across all markets. In the future, if we fail to maintain good relationships with, or fail to successfully motivate any of our large distributors, our revenue may decline. If we do not diversify our sales channels and effectively utilize our direct sales force, we will continue to be susceptible to risks associated with having a large percentage of revenue concentrated with a limited number of distributors.

Competition for employees capable of selling expensive medical devices within the pharmaceutical and biotechnology industries is intense. We may not be able to attract and retain personnel or be able to build an efficient and effective sales organization, which could negatively impact sales and market acceptance of our products and limit our revenue growth and potential profitability.

In addition, the time and cost of establishing a specialized sales, marketing and customer service force for a particular product or service may be difficult to justify in light of the revenue projected to be generated by such additional personnel and resources. We also intend to add additional distribution partners in the life science market, and if we are unable to do so successfully, it will adversely impact on our ability to increase the revenue from our product offerings.

We rely on distributors for the sale of our products abroad and are entering into new agreements for the United States. We intend to continue to grow our business internationally and in the United States and to do so we must attract additional distributors and retain existing distributors to maximize the commercial opportunity for our products. We exert limited control over existing distributors under our agreements with them, and if their sales and marketing efforts for our products in their particular region are not successful, our business would be materially and adversely affected. Locating, qualifying and engaging additional distribution partners with local industry experience and knowledge will be necessary in at least the short to mid-term to effectively market and sell our platform in certain countries outside the United States. We may not be successful in finding, attracting, and retaining distribution partners, or we may not be able to enter into such arrangements on favorable terms.

Most of our distribution relationships are non-exclusive and permit such distributors to distribute competing products. As such, our distributors may not commit the necessary resources to market our products to the level of our expectations or may choose to favor marketing the products of our competitors. Some of our distribution relationships are exclusive where the company is forced to rely on their efforts. Our distribution partners may compete against our inside sales force for sales opportunities. If current or future distributors do not perform adequately, offer competitive products, compete with our own sales staff, or we are unable to enter into effective arrangements with distributors in particular geographic areas, we may not realize long-term international revenue growth.

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We rely on a limited number of subcontractors to manufacture, assemble, package and production test our products, and the failure of any of these third-party subcontractors to deliver products or otherwise perform as requested could damage our relationships with our customers, decrease our sales and limit our growth.

While we design and market our products and conduct test development in-house, we do not manufacture, assemble, package and production test the vast majority of components of our products, and we must rely on third-party subcontractors to perform these services. If these subcontractors do not provide us with high-quality products, services and production and production test capacity in a timely manner, or if one or more of these subcontractors terminates its relationship with us, we may be unable to obtain satisfactory replacements to fulfill customer orders on a timely basis, our relationships with our customers could suffer, our sales could decrease, and our growth could be limited.

In addition, the consolidation of foundry subcontractors, as well as the increasing capital intensity and complexity associated with fabrication in smaller process geometries has limited the diversity of our suppliers and increased our risk of a "single point of failure." The lack of diversity of suppliers could also drive increased prices and adversely affect our results of operations, including our product gross margins.

We currently do not have long-term supply contracts with any of our third-party subcontractors. Therefore, they are not obligated to perform services or supply products to us for any specific period, in any specific quantities or at any specific price, except as may be provided in a particular purchase order. None of our third-party subcontractors has provided contractual assurances to us that adequate capacity will be available to us to meet future demand for our products. Our subcontractors may allocate capacity to the production of other companies' products while reducing deliveries to us on short notice. Other customers that are larger and better financed than we are or that have long- term agreements with these subcontractors may cause these subcontractors to reallocate capacity to those customers, thereby decreasing the capacity available to us.

Other significant risks associated with relying on these third-party subcontractors include:

• reduced control over product cost, delivery schedules and product quality. • potential price increases. • inability to achieve sufficient production, increase production or test capacity and achieve acceptable yields on a timely basis • increased exposure to potential misappropriation of our intellectual property. • shortages of materials used to manufacture products. • capacity shortages.

See Risk Factors set forth in our annual report on Form 10-K for the year ended February 28, 2023, filed with the SEC on May 20, 2023.

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We distribute commodity medical products on behalf of multinational firms for a substantial portion of our sales, and our failure to maintain and further develop these relationships could harm our business.

We act as a distributor on behalf of multinational firms, and we depend on these third-party contracts for cardiac commodity product inventory to consumers. Our distribution efforts for these other products, some of which are competitive with our own commodity products such as our Cape Cross NC and Cape Cross products, currently do and are expected to account for most of our net sales in the near future. These relationships are mostly non-exclusive and terminable upon a certain number of days’ notice. The loss of, or business disruption at, one or more of these firms or a negative change in our relationship with them, or a disruption to any one of our sales channels could have a material adverse effect on our business. If we do not maintain our relationship with these product suppliers or develop relationships with other firms for inventory to sell, the growth of our business may be adversely affected, and our business may be harmed. If we are required to obtain additional or alternative distribution agreements or arrangements in the future, we cannot be certain that we will be able to do so on satisfactory terms or in a timely manner. Our inability to enter into satisfactory distribution agreements may inhibit our ability to implement our business plan or to establish markets necessary to expand the distribution of products successfully.

We may not be able to successfully implement our growth strategy for our own branded products as a result of the distribution efforts we engage in of outside product offerings we distribute for.

We believe that our future success depends, in part, on our ability to implement our growth strategy of leveraging our existing brand and products to drive increased sales. Our ability to implement this strategy depends, among other things, on our ability to:

• enter distribution and other strategic arrangements with third-party retailers and other potential distributors of our products successfully compete in the product categories in which we choose to operate.

• successfully compete in the product categories in which we choose to operate.

• introduce new and appealing products and successfully innovate our existing products.

• develop and maintain consumer interest in our brand; and

• increase our brand recognition and loyalty.

We may not be able to implement this growth strategy successfully. Our planned marketing expenditures may not result in increased total sales or generate sufficient levels of consumer interest or brand awareness, and our high rates of sales and income growth may not be sustainable over time. Our sales and results of operations will be negatively affected if we fail to implement our growth strategy or if we invest resources in a growth strategy that ultimately proves unsuccessful.

Additionally, please see Risk Factors set forth in our annual report on Form 10-K for the year ended February 28, 2023 filed with the SEC on May 20, 2023.

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

None

Item 3. Defaults upon Senior Securities

None

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Item 4. Mine Safety Disclosure

Not applicable

Item 5. Other Information

None

Item 6. Exhibits

Exhibit Number		Description of Exhibit
31.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

EX-101.INS**		XBRL Instance Document

EX-101.SCH**		XBRL Taxonomy Extension Schema Document

EX-101.CAL**		XBRL Taxonomy Extension Calculation Linkbase

EX-101.DEF**		XBRL Taxonomy Extension Definition Linkbase

EX-101.LAB**		XBRL Taxonomy Extension Labels Linkbase

EX-101.PRE**		XBRL Taxonomy Extension Presentation Linkbase

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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SIGNATURES

In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Medinotec, Inc.
Date: March 14, 2024
Date: July 12, 2024
	By:	/s/ Gregory Vizirgianakis
		Gregory Vizirgianakis
	Title:	Chief Executive Officer and Principal Executive Officer

	Medinotec, Inc.
Date: March 14, 2024
Date: July 12, 2024
	By:	/s/ Pieter van Niekerk
		Pieter van Niekerk
	Title:	Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer

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