2. Significant Accounting Policies

3 Months Ended

May 31, 2025

2. Significant Accounting Policies

a. Nature of business/basis of preparation

Basis of presentation

The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States.

Emerging Growth Company (EGC) status

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.

b. Foreign currency translation

i. Translation of foreign subsidiary

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

Exchange gains or losses incurred foreign exchange currency transactions conducted by one of the Company’s operations in a currency other than the operation’s functional currency are reflected in other revenue/(expense).

ii. Exposed to currency variations in subsidiary

The primary operations and functional currency of both Disa 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.

The functional currency as well as the reporting currency for Medinotec Inc is the US Dollar.

c. Cash and cash equivalents

i. Highly liquid investments

The Medinotec Group of Companies considers all highly liquid investments with a remaining maturity of three months or less at the time of 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.

d. Accounts Receivables

i. Allowance based on a review and management evaluation

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 91+ days.

e. Property, plant and equipment

i. Depreciation rates


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

The Company utilizes the straight-line method of depreciation for its assets, which allows for the systematic allocation of the cost of the asset over its useful life. The primary categories of assets include plant and machinery and laboratory equipment, which are depreciated based on their estimated useful lives, typically determined by industry standards and historical experience.

To establish the depreciation rate for each asset, the Company considers several factors, including the asset's purchase price, estimated useful life, and residual value at the end of that life. Useful lives are assessed based on the nature of the asset, technological advancements, and the expected rate of wear and tear. For other supportive assets, such as computer equipment, furniture and fittings, motor vehicles, office equipment, off-the-shelf software, leasehold improvements, and smaller assets, the straight-line method is also applied. Each asset's depreciation rate is reviewed periodically and adjusted if necessary to reflect changes in usage patterns or asset conditions. This method ensures that the expense recognition of these assets is consistent with their utilization and accurately reflects the Company’s financial position.

f. 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 a quarterly 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.

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 credit losses on notes receivable

The Company maintains an allowance for credit losses on loans receivable in accordance with ASC 326, Financial Instruments—Credit Losses. This allowance reflects management’s estimate of expected credit losses over the contractual life of the loans, considering historical loss experience, current conditions, and reasonable and supportable forecasts. The estimate is developed using a combination of quantitative data and qualitative factors, including borrower creditworthiness, loan-specific risk characteristics, macroeconomic trends, and other relevant information. The allowance is adjusted through a provision for credit losses in the Company’s consolidated statements of operations, and loans are charged off against the allowance when deemed uncollectible.

j. Employee benefit plans

The Company contributes 2.5% of basic salaries 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 non-financial 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.

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 are recorded in reserves under the heading accumulated comprehensive income. The effect on the reserves for the three months ended May 31, 2025 was $15,791 compared to $4,152 for the three months ended May 31, 2024.

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

Total foreign currency transaction gains and losses for the three months ended May 31, 2025 were $15,791 compared to $4,152 for the three months ended May 31, 2024.

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.

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 is agreed on in each customer’s contract. Orders are shipped on a per order basis from the Company’s warehouse with Free-On-Board Inco terms.

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.

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’s 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.

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.

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 orders are placed, invoiced, and shipped on a per order basis as and when the clients require additional inventory. 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 creditworthiness 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 Life Sciences. For the quarter ending May 31, 2025, 84% of the Company's total revenue is derived from this single customer in the distribution environment in South Africa compared to 65% for the quarter ending May 31, 2024.

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

	Medinotec Inc Group Consolidated Years Ended
	May 31, 2025 (Unaudited) $		May 31, 2024 $
Outside of United States of America
Internally Designed/Manufactured Sales		338,862		801,282
Distribution Agreement Sales		1,645,101		314,823
Sales Generated inside the United States of America
Internally Designed/Manufactured Sales		150,063		135,773
		2,134,026		1,251,878

o. Segment Reporting

Chief Operating Decision Maker (CODM)

The Company’s CODM is the Chief Executive Officer, who is responsible for strategic decision-making and resource allocation. The CEO, with support from the executive leadership team, regularly reviews financial and operational results segmented by geographic region. These reports form the basis for internal decision-making and operational management.

The Company has determined that it operates in two reportable geographic segments: Inside the United States and Outside the United States. These segments reflect the manner in which the Chief Operating Decision Maker (CODM) assesses financial performance and allocates resources.

Basis of Segmentation

Operating segments are determined based on the internal reports regularly reviewed by the CODM. Geographic segmentation reflects the Company's internal management structure and reporting lines, as operations within the United States and internationally are subject to distinct market, regulatory, and customer dynamics.

Performance Measures Reviewed by CODM

The CODM evaluates segment performance primarily using income/loss from operations, which includes revenues, cost of goods sold, and major operating expenses. This measure is reviewed regularly and is considered the most relevant indicator of segment profitability and operating efficiency. Segment results are prepared on a basis consistent with the Company’s consolidated financial statements, with no adjustments for intersegment transactions.

Granular Segment Expense Reporting

To support effective decision-making, the CODM reviews segment-level performance at a more detailed level than presented in the consolidated financial statements. Specifically, the CODM receives and evaluates reports that disaggregate significant expenses such as:

	•	Selling Expenses
	•	Depreciation
	•	General and Administrative Expenses
	•	Research and Development Expenses

This level of detail enables the CODM to evaluate cost drivers and profitability more effectively across geographic segments.

The following table sets forth financial information by reportable segment for the periods ending May 31, 2025 and May 31, 2024:

Income/(loss) from operations (In U.S. Dollars)


	Inside the United States						Outside the United States						Total
	2025			2024			2025			2024			2025			2024
Revenue		150,063			135,773			1,983,963			1,116,105			2,134,026			1,251,878
Cost of goods sold		(47,683	)		(13,477	)		(1,160,827	)		(638,122	)		(1,208,695	)		(651,599	)
Gross profit		102,195			122,296			823,136			477,983			925,331			600,279
Selling expenses		(5,355	)		(11,939	)		(16,418	)		(9,069	)		(21,773	)		(21,008	)
Depreciation expense		—			—			(7,506	)		(17,916	)		(7,506	)		(17,916	)
General and administrative expenses		(385,842	)		(132,397	)		(183,739	)		(144,809	)		(569,581	)		(277,206	)
Research and development expenses		—			—			(49,014	)		(14,981	)		(49,014	)		(14,981	)
Income/(loss) from operations		(289,002	)		(22,040	)		566,459			291,208			277,457			269,168
Other income/(expenditure)														(163,673	)		(181,964	)
Net income/(loss)														113,784			87,204

Other income/(expenditure) includes items not considered by the CODM at segment level, and consist of items such as interest income, interest expense, current income taxes and deferred income taxes.

The following table sets forth financial information by reportable segment for the periods ending May 31, 2025 and February 28, 2025:

Total Assets (In U.S. Dollars)

Inside the United States

Outside the United States

Total

May 31 2025

Feb 28 2025

May 31 2025

Feb 28 2025

May 31 2025

Feb 28 2025

Total assets

2,151,462

2,181,184

5,252,564

4,627,789

7,404,026

6,808,973

The major component of total assets is "Cash" of $1,950,876 as of May 31, 2025 and $2,769,686 as of February 28, 2025. A significant portion of this is maintained Inside the United States in USD of $1,808,894 as of May 31, 2025 and $2,019,628 as of February 28, 2025.

p. 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.

q. General and administrative expenses

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

r. Research and development

The Company follows the guidance provided in ASC 730, "Research and Development," in accounting for research and development (R&D) expenses. R&D activities primarily focus on the development of new products through modifications of existing technologies or projects with an established proof of concept. As such, the Company typically incurs R&D expenses related to production support, process improvements, and quality enhancement initiatives.

In accordance with ASC 730, the Company expenses all R&D costs as incurred. This includes costs directly related to research activities, as well as expenses associated with the design, development, and testing of new products and processes.

In instances where R&D projects evolve and the nature of the expenses becomes capital in nature, the Company will evaluate these costs against the following criteria to determine if they should be capitalized:

	•	Technological Feasibility: The project must have reached a stage where technological feasibility has been established. This typically occurs when all necessary design, testing, and evaluation processes have been completed, and the product can be produced to meet its specifications.

	•	Intent to Complete: There must be a clear intention to complete the project for sale or use. This involves assessing whether the Company plans to bring the product to market and if there is a viable market for it.

	•	Future Economic Benefits: The project is expected to generate future economic benefits, such as revenue from product sales or cost savings from process improvements.

	•	Directly Attributable Costs: The costs being evaluated for capitalization must be directly attributable to the development of the product or process, including materials, labor, and overhead.

Any costs deemed eligible for capitalization will be recorded as assets and amortized over their useful lives, while all other R&D expenditures will continue to be expensed in the period incurred.

s. Interest expense

Interest expense relates 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 11.00% at May 31, 2025. The terms of this loan are deemed to be market related.

t. Earnings per share

Basic Earnings Per Share (EPS)

Basic earnings (loss) per share are computed based on the weighted average number of common shares outstanding during the reporting period. This calculation provides a straightforward measure of the Company’s earnings attributable to each share.

Diluted Earnings Per Share (EPS)

Diluted earnings per share are computed by giving effect to all potentially dilutive securities outstanding during the period, including options, warrants, and convertible securities. The calculation aims to reflect the potential dilution that could occur if these securities were converted into common shares.

In periods where the Company reports net losses, diluted net loss per share is the same as basic net loss per share. This is because potentially dilutive common shares are not assumed to have been issued if their inclusion would be anti-dilutive.

Treasury Stock Method

For options and warrants, the Company employs the treasury stock method to calculate the dilutive effect. Under this method, it is assumed that the proceeds from the exercise of options and warrants would be used to repurchase common shares at the average market price during the period. The number of shares repurchased is then subtracted from the total number of shares that would be issued upon exercise, resulting in the net increase in shares outstanding. This method effectively illustrates the potential dilution impact of these securities on earnings per share.

u. Principles of consolidation

i. Consolidated - all intercompany transactions eliminated

The consolidated financial statements include the accounts of Medinotec Inc., Medinotec Capital Proprietary Limited and the financial statements of DISA Medinotec Proprietary Limited, known as “the Company”. All intercompany transactions have been eliminated.

v. Use of estimates

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that impact the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities as of the date of the financial statements. Additionally, these estimates influence the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates, which could have an impact on future periods.

Key estimates that management typically needs to make in a smaller medical device public company include:

	•	Revenue Recognition: Estimating the timing and amount of revenue to be recognized, particularly in relation to sales agreements, warranties, and return policies.

	•	Inventory Valuation: Assessing the net realizable value of inventory, including potential obsolescence and excess stock, to ensure that inventory is stated at the lower of cost or market.

	•	Impairment of Assets: Determining whether there are indicators of impairment for long-lived assets, including intangible assets and goodwill, which involves assessing the recoverability of the asset's carrying value.


	•	Clinical Trial Costs: Estimating the costs associated with clinical trials and research and development activities, which can be significant for product development.

	•	Contingent Liabilities: Evaluating potential legal and regulatory claims, including product liabilities, and estimating the likelihood and potential financial impact of such claims.

	•	Useful Lives of Assets: Estimating the useful lives of property, plant, and equipment, as well as intangible assets, to determine appropriate depreciation and amortization expense.

Management continually evaluates these estimates and assumptions based on historical experience and various other factors, including current market conditions. Changes in these estimates may have a material effect on the Company’s financial position and results of operations.

w. Recently issued accounting standards

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU is intended to enhance transparency of income statement disclosures primarily through additional disaggregation of relevant expense captions. The standard is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with prospective or retrospective application permitted. The Company is currently evaluating the impact of this guidance on its disclosures in the consolidated financial statements.

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 has evaluated the effect of this standard on its operations and has determined that it has no material impact.

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 fair value of equity securities subject to the contractual sale restrictions 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 is effective for fiscal years beginning after December 15, 2023, and interim periods within those financial years. The Company has evaluated the effect of this standard on its operations and has determined that it has no material impact.

In September 2022, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) ASU 2022-04, 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 has evaluated the effect of this standard on its operations and has determined that it has no material impact.

In November 2023, 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 has implemented this standard for the current fiscal year.

In December 2023, the FASB issued ASU 2023-09, " 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.

Medinotec Inc. 10-Q