Medinotec, Inc. - Form 10-K - February 28, 2025

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 UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K

 (Mark One)

 ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended February 28, 2025

 OR

 TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from
to

 Commission file number: 000-56737

 MEDINOTEC, INC.

 (Exact name of registrant as specified in its charter)

 Nevada

 36-4990343

 (State or other jurisdiction of

incorporation or organization)

 (I.R.S. Employer

Identification No.)

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

 North Riding | Johannesburg | South Africa 2169

 (Address of principal executive offices) (Zip Code)

 +27 87 330 2301

 (Registrant's telephone number, including area
code)

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

 Securities registered under Section 12(b) of the Exchange
Act: None

 Securities registered under Section 12(g) of the Exchange
Act: Common Stock, par value $0.001 per share

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

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

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

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

 Indicate by check mark whether the registrant is a
large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

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

 State the aggregate market value of the voting and
non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average
bid and asked price of such common equity, as of the last business day of the registrant's most recently completed fourth fiscal
quarter: $ 9,157,135

the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: 11,733,750
shares as of May 28, 2025.

 PAGE

 ITEM 1.

 BUSINESS

 ITEM 1A.

 RISK FACTORS

 ITEM 1B.

 UNRESOLVED STAFF COMMENTS

 ITEM 1C.

 CYBERSECURITY

 ITEM 2.

 PROPERTIES

 ITEM 3.

 LEGAL PROCEEDINGS

 ITEM 4.

 MINE SAFETY DISCLOSURES

 ITEM 5.

 MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 ITEM 6.

 [ RESERVED ]

 ITEM 7.

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

 ITEM 7A.

 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 ITEM 8.

 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 ITEM 9.

 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 ITEM 9A.

 CONTROLS AND PROCEDURES

 ITEM 9B.

 OTHER INFORMATION

 ITEM 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 ITEM 10.

 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 ITEM 11.

 EXECUTIVE COMPENSATION

 ITEM 12.

 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 ITEM 13.

 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 ITEM 14.

 PRINCIPAL ACCOUNTING FEES AND SERVICES

 ITEM 15.

 EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 ITEM 16.

 FORM 10-K SUMMARY

 SIGNATURES

 FORWARD-LOOKING STATEMENTS

 Except for statements of historical fact, some information
in this document contains "forward-looking statements" that involve substantial risks and uncertainties. You can identify
these forward-looking statements by words such as "may," "will," "should," "anticipate,"
"estimate," "plans," "potential," "projects," "continuing," "ongoing,"
"expects," "management believes," "we believe," "we intend" or the negative of these words
or other variations on these words or comparable terminology. The statements that contain these or similar words should be read carefully
because these statements discuss our future expectations, contain projections of our future results of operations or of our financial
position, or state other forward-looking information. We believe that it is important to communicate our future expectations to our investors.
However, there may be events in the future that we are not able accurately to predict or control. Further, we urge you to be cautious
of the forward-looking statements which are contained in this registration statement because they involve risks, uncertainties and other
factors affecting our operations, market growth, service, products and licenses. The factors listed in the sections captioned "Risk
Factors" and "Description of Business," as well as other cautionary language in this registration statement and events
in the future may cause our actual results and achievements, whether expressed or implied, to differ materially from the expectations
we describe in our forward-looking statements. We operate in a very competitive and rapidly changing environment. New risks emerge from
time to time. It is not possible for us to predict all those risks, nor can we assess the impact of all of those risks on our business
or the extent to which any factor may cause actual results to differ materially from those contained in any forward-looking statement.
The forward-looking statements in this registration statement are based on assumptions management believes are reasonable. However, due
to the uncertainties associated with forward-looking statements, you should not place undue reliance on any forward-looking statements.
Further, forward-looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation
or undertaking to publicly update any of them in light of new information, future events, or otherwise. The occurrence of any of the events
described as risk factors or other future events could have a material adverse effect on our business, results of operations and financial
position. Since our common stock is considered a "penny stock," we are ineligible to rely on the safe harbor for forward-looking
statements provided in Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act").

 As used in this Annual Report on Form 10-K, unless
the context otherwise requires, the terms the "Company," "Registrant," "we," "us," "our,"
"Medinotec," "Medinotec Group of Companies" or "MDNC" refer to Medinotec, Inc., a Nevada corporation,
and its wholly owned subsidiaries.

 ITEM 1.

 BUSINESS

 Company Overview

 Medinotec Inc. was registered on April 26, 2021, in
the State of Nevada. With an effective date of April 26, 2022, we acquired DISA Medinotec Propriety Limited, a South African corporation,
from Minoan Medical Proprietary Limited ("Minoan"), a company incorporated in South Africa, and owner of all the capital stock
of DISA Medinotec Propriety Limited. We accomplished the acquisition pursuant to the terms and conditions of a Share Exchange Agreement
under common control with Minoan whereby we acquired all the capital stock of DISA Medinotec Proprietary Limited in exchange for the issuance
of stock at par value and the transfer of the outstanding loan account.

 This Purchase was concluded between Minoan and a local
newly established investment vehicle of Medinotec Inc. called Medinotec Capital Proprietary Limited in South Africa after Medinotec Inc.
registered the company as a shelf company by injecting $10,000 into it on December 18, 2021. Medinotec Capital Proprietary Limited serves
as the acquisition vehicle for Medinotec Inc on the continent of Africa.

 Combined these companies now form the Medinotec Group
of Companies.

 Our History

 Prior to the above, in 2015, DISA Vascular 2015, an
innovative medical device company that specialized in vascular technology for the treatment of coronary artery disease, was established.
It was subsequently renamed DISA Medinotec Proprietary Limited. DISA Medinotec Proprietary Limited was situated in Cape Town, South Africa
and had been developing stents for the international market since 1998. It has since produced high-quality medical devices through in-depth
research and development capabilities ("R&D") and a total commitment to patient care. Today, the products are sold via
a network of distributor partners both in South Africa and internationally.

 A professional team consisting of our CEO and CFO
was recruited to implement and execute the strategy, and an infrastructure of a large manufacturing facility was established, substantially
increasing our manufacturing and warehousing capabilities.

 Various distributors were appointed, and rights obtained
to grow sales internationally, especially in Namibia and Mauritius, as well as the Middle East, Europe, South America, and portions of
Asia. We have started establishing various networks to export and distribute our products in North America and other highly regulated
countries such as, Australia, Japan, and China. The FDA approval that was granted for the Trachealator in November 2021 together with
the concluded private placement allowed for the roll out in the United States which started during the 2024 fiscal year. In addition,
we are finalizing multiple patent applications in several territories, which we believe will give us the ability not only to maintain
our intellectual property but also to market our products aggressively.

 The manufacture of medical devices for the
treatment of vascular and airway diseases is now performed in our facility in Johannesburg, South Africa. Raw materials and components
used in manufacture are sourced from a number of local and international suppliers to ensure continuity of supply while maintaining high
quality and reliability. Procedures and processes are in place to ensure that these materials meet the regulatory requirements and comply
with specifications, and suppliers are regularly evaluated to monitor their quality performance.

 The core values of care, learning, continuous
improvement, innovation, outstanding delivery, and relationship building are important to the success of our business. The quality of
the manufactured products is achieved through careful selection of suppliers and the maintenance of good manufacturing practices, thereby
mitigating risk.

 Employees

 As of February 28, 2025, the Medinotec Group of
Companies employed 51 employees, which consists of full-time employees and independent contractors.

 •

 Commercial
 team: Within the Group of Companies the Commercial team representing the products currently consists of 6 individuals responsible
 for all aspects of the sales process, including pricing, marketing, transportation and logistics, product development and general
 customer service and training.

 •

 Sales
 team: The team is organized by both region and end-market and comprises a group of experienced and dedicated team members
 who understand the industry and who are experts in their various medical fields. The team is led out of the Johannesburg head office
 and is regionally positioned in the major medical markets across South Africa. As the Company makes decisions to enter or expand
 its presence in certain markets or regions, it expects to continue to add dedicated team members to support that growth. The
 company currently has seventeen dedicated sales members in the United States and this number is expected to increase as the sales
 grow and regulatory and administrative hurdles are cleared to allow further revenue expansion.

 •

 Marketing
 team: This team coordinates all new and existing customer outreach efforts and identifies emerging market trends and new product
 opportunities. This includes producing exhibits for trade shows and exhibitions, manufacturing product overview materials, participating
 in both regional and international industry meetings and other trade associations and managing advertising efforts in trade journals.

 •

 Transportation
 Warehouse and Logistics team: The team manages domestic and international shipments and product deliveries by directing
 inbound and outbound ocean vessels and flights, supervising equipment maintenance, coordinating with freight carriers to ensure equipment
 availability, ensuring compliance with shipping regulations and strategically planning for future growth. This team also ensures
 storage and shipping happens in accordance with the quality requirements of each product.

 •

 Technical
 team: The team services and maintains all major equipment utilized in manufacturing.

 •

 Customer
 Services team: This team is dedicated to creating an exceptional customer experience and making it easy to do business with us.
 It aims to accomplish this by consistently exceeding customer expectations, continually improving service performance, offering efficient
 and timely responses to customer needs, being available to customers 24/7, and providing customers with personal points of contact.

 These
functions are supported by various back-office functions including, but not limited to, R&D, Quality, Finance, Admin and Regulatory
staff.

 Attracting the right talent is vital to the
success of the Medinotec Group of Companies, and the contribution they make to the business is highly valued. Our focus on attracting
the most competent and suitable people to operate in a rewarding work environment is a priority, particularly in the highly competitive
labor market in which we operate.

 The
table below shows the
approximate number of employees and independent contractors, the employment status as full or part time, and the employer within the
Medinotec Group of Companies. None of our employees are represented by a labor union with respect to their employment with us. We have
not experienced any work stoppages, and we consider our relations with our employees to be good.

 Employer

 Number of full-time employees

 Number of part-time employees

 Number of independent contractors

 Medinotec
 Inc.

 *

 —

 Medinotec
 Capital Proprietary Limited*

 *

 —

 —

 DISA
 Medinotec Proprietary Limited

 —

 —

 Total

 —

 * 2 Executives employed by Medinotec Inc. and
Medinotec Capital Proprietary Limited are the same individuals.

 Group Contractors

 DISA Medinotec Proprietary Limited successfully
secured multiple distribution contracts from renowned international medical device companies, collectively referred to as the Cardiology
distribution business. These contracts were awarded following adjudication by independent international third-party medical device companies.
The introduction to these esteemed companies was facilitated by Minoan Medical Proprietary Limited, the previous distributor, before DISA
Medinotec assumed responsibility. This transition underscores DISA Medinotec's strategic prowess in expanding its portfolio and underscores
the collaborative efforts within the medical device distribution sector. These distribution products currently and in the future are expected
to add to the product group of the business and help to achieve increased revenues, which consists of more mature but also profitable
products that will complement our in house developed products. The Company appointed DISA Life Sciences, 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 principle focus of the business unit remains the development of products
for which it owns the IP, while the distributor will perform the sales and marketing functions in this territory.

 The Trachealator product obtained FDA approval in
November 2021, which allowed the Company to sell this product into the United States. 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 facility to grow both their own distribution network and
infrastructure and also allow for the Company to utilize this network and infrastructure. However, during the 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 became payable
during 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 no longer backed by any Trachealator revenue streams and does not
change that Innovative Outcomes will still be liable for payment of this in the future. Should payments be received this provision will
be reversed with the same amount of cashflow received.

 Two of the most valuable assets the Medinotec
Group of Companies has are its long-term customer relationships and its strong distribution and marketing network. Through its distribution
partnership, the Group has a network of over 100 sales representatives, who cover approximately 60% of all hospital operating room floors
on a weekly basis in South Africa. The Group plans to replicate such a network in the US.

 The Group has historical reliance on two companies
for sales into South Africa: there is reliance on DISA Life Sciences Proprietary Limited ("Disa Life Sciences") as a customer;
and for exports out of South Africa there was historical reliance on Minoan Medical (a related party). These relationships provide the
Group with more than 100 sales representatives in the South African Market.

 Sales between the Medinotec Group and DISA
Life Sciences will continue into the future due to the vast distribution arm of DISA Life Sciences within South Africa. The Group's
expectation is to reduce reliance on the South African markets for customers and accounts as the Group endeavors to expand and enter into
international first world markets. However, there is no guarantee that our plan will result in a decrease in reliance on DISA Life Sciences
for customers and accounts. As with any expansion effort, there are barriers to entry and outside factors, such as regulatory approval,
competition, among others, that may prevent us from entering such markets. As such, there is a risk that the concentration of customer
issue will remain an ongoing issue unless we are successful in overcoming barriers to entry, competing with those in our markets and achieving
regulatory approvals, none of which can be guaranteed.

 The Medinotec Group of Companies operate in
countries where the market is dominated by certain players, and this creates a sales concentration risk which also causes an accounts
receivable concentration risk.

 Seasonality

 Sales reflect the cyclical nature of the business,
as the number of procedures incorporating our products does decrease in the summer holiday months of December and January within the South
African market, which is currently the predominant market in the Medinotec Group of Companies.

 Reliance on Other Parties

 The Medinotec Group of Companies in the past focused
solely on product development and manufacturing and therefore outsourced its sales function to two companies, namely, Minoan Medical Proprietary
Limited (a related party) and DISA Life Sciences. This was done to preserve funds for R&D and manufacturing and to ensure the products
that are developed are launched effectively.

 •

 DISA
 Life Sciences is, as per management's best estimation, one of the top 5 medical device distributors in South Africa and has
 a far reaching sales and marketing component to their business. DISA Medinotec partnered with DISA Life Sciences to create a market
 for the products in South Africa, due to the reach of this distributor, DISA Medinotec was able to reach its budgets and break even
 scenarios on products much faster than it would have attempting to launch on their own. DISA Life Sciences uses its own sales force
 and certain sub-contractors to penetrate the South African market. After we took exports in house, the DISA Life Sciences relationship
 consists of supplying products in South Africa.

 Please refer to the related party footnotes
in the financial statements and as disclosed in the Section of this Annual Report, entitled, "Certain Relationships and Related
Transactions, and Director Independence" where the nature and flow of transactions between related parties have been disclosed in
detail.

 Our Business Strategy

 As we are currently operating in various markets,
the below provides a brief overview of the Company structure as well as each individual entity's role within the Company:

 Medinotec Inc

 The company was incorporated in Nevada in April of 2021. Currently, this company houses the directorship and management of the business and owns the subsidiary, Medinotec Capital Proprietary Limited, which in turn wholly owns DISA Medinotec Proprietary Limited. Medinotec Inc. facilitates all sales into the United States.

 Medinotec Capital (Pty) Ltd

 This company was established and incorporated by Medinotec Inc. to establish an investment holding company on the continent of Africa. The intention in the future will be that the same structure gets established for any continent on which Medinotec Group of Companies would like to expand into. Consolidating all African investments under one holding company simplifies the transfer pricing policies inter group and would ensure a lower risk of breaching any transfer pricing regulations set by African regulators

 Disa Medinotec (Pty) Ltd

 This is the operational company acquired by Medinotec
 Capital in March of 2022. This company manufactures and develops the products that are sold to Medinotec Inc. It is a medical device
 manufacturing and distribution company with distribution channels predominately in South Africa, but also in the Middle East, South
 America, Europe and portions of Asia, with plans to enter the markets in countries such as Australia, Japan and China that have
 very strict regulatory approval processes.

 Our objective is to become one of the significant
industry players within the next five years. We plan to achieve this by:

 1.

 growing our product range;

 2.

 building our competences; and

 3.

 making strategic acquisitions.

 Our strategy includes investing in the entire value
chain, ranging from the importation of raw materials, manufacturing capabilities and the marketing and selling of products, through to
the distribution of our products to customers via our sales network.

 A
high-level overview of our strategy follows in the 10-K, which is followed by a discussion on how we implement this
strategy.

 (Image depicting two healthcare professionals
in surgical attire are preparing to intubate a patient in a medical setting. Source: Shutterstock)

 Our Strategic Differentiators

 We attri bute
our success to the following key strengths:

 •

 Commitment
 to innovation: We are dedicated to continuing to develop patentable products and offerings through R&D.

 •

 Experienced
 management team: The members of the Company's management team bring considerable experience to the dynamic environment
 in which we operate. Their expertise covers a range of disciplines, including industry-specific operating and technical knowledge.
 The Company has assembled an agile, creative, and responsive team that can quickly adapt to changing market conditions.

 •

 Extensive
 geographic footprint: We believe that the strategic location of our facilities and logistics capabilities contribute
 to our customer retention rates and our ability to reach broader market segments.

 •

 Low-cost
 operating structure: We focus on building and operating facilities with low operating costs to enable us to better manage market
 downturns.

 •

 Strong
 relationships with customers: We have a long and enviable track record of timely delivery of products, which contributes to a
 reputation for dependability. Our extensive network of technical resources and other expertise enables us to collaborate with customers
 to develop product offerings to improve their satisfaction.

 •

 Extensive
 knowledge of setting up distribution channels: We have various exclusive distribution agreements in place with distributors
 to ensure these distributors include our products into an extensive product mix, which includes some of the most innovative and cutting-edge
 technologies available today.

 •

 Focus
 on safety and wellbeing: We focus on the safety of our employees and our patients and maintain safe and responsible operations.
 We are known in the communities in which we operate as a preferred employer and as a responsible corporate citizen.

 The
Three Pillars of our Strategy

 1.

 Innovate and Grow our Product Range

 DISA Medinotec Proprietary Limited established itself
as a highly successful company that has been investing heavily in creating its own IP, as well as the R&D and manufacturing techniques
involved in producing unique niche medical devices, thereby creating a value base that is ready to enter advanced high-value markets in
North America.

 The approach, agility and excellent production
capabilities have allowed DISA Medinotec Proprietary Limited to capitalize on key medical trends, while an in-depth market knowledge and
understanding have enabled anticipation of market needs well in advance. This, combined with accelerated product development, innovation,
and speed to market, with a focus on cost reduction, equipment upgrades and low-cost facilities, has proved to be a recipe for success.

 We currently have three products that are commercially
available and a rich pipeline of developmental projects. We currently derive most of our profits by selling these products in South Africa,
leaving ample room to grow the basket offering that sales personnel take to the market. Our plan is also to constantly innovate and enhance
our product range to ensure our competitiveness.

 The products are generally targeted at more complex,
specialized surgical cases and are specifically relevant in medical centers of excellence. During 2018, DISA Medinotec Proprietary Limited
recognized the need to become a significant player in manufacturing in reaction to the risk of price sensitivity.

 DISA Medinotec Proprietary Limited currently specializes
in niche products within the disciplines of cardiology and respir atory
interventions in which we are involved in medical device design, development, manufacture, all supported by a well-trained and educated
sales and distribution channel. The specialty areas include:

 •

 Interventional
 Cardiology, which involves surgery performed on the heart and vessels to correct life-threatening conditions. The surgery is performed
 by minimally invasive intravascular methods depending on the condition to be corrected.

 •

 Interventional Endolaryngeal
 Endoscopy, which involves balloon dilation to treat suitable airway stenosis by ENT surgeons and anesthetists.

 The
focus of our expansion is on markets with surgical centers of excellence, including the Middle East, Europe, and the US, with the aim
of:

 •

 increasing
 the number of surgeons endorsing and using our products, not necessarily through sales, but through skills transfer;

 •

 increasing
 the number of procedures conducted; and

 •

 solidifying
 key opinion leader support and publications related to the use of our products during procedures.

 In
addition, we appoin ted and trained various distributors in the Middle East, Europe, portions of Asia and South America, with several
training initiatives also held in the USA where FDA approval have been granted for the Trachealator following the 510(k) substantially
equivalence process for Class II medical devices. This has enabled us to start sales in the USA.

 The Medinotec Group's growth plan is determined
by the surgical devices market, which is currently the main contributor to sales. Moreover, healthcare in developing countries –
our primary target market – is undergoing rapid changes. The growing population in these countries is likely to lead to increased
demand for healthcare, including medical devices. The growing burden of diseases and innovative medical treatments currently, according
to management's estimate, accounts for nearly two-thirds of the rise in spending.

 North America is expected to continue dominating the
overall market for medical supplies and investment opportunities. The US holds the largest market share in the region due to the superior
regulation of surgical devices and a growing awareness among the population of an alternative approach for procedures in the treatment
of injuries, and for chronic disease management. Our sales in the United States for the fiscal year was $678,105, which represents 7%
of total sales. This is up from $553,967 in the prior fiscal year, which represented 11% of total sales.

 Key Market Trends and Our Response to These

 There is currently a massive drive for minimal invasive
procedures done at lower costs, which in turn decreases hospitalization and the cost of procedures and operating room time. As
this is the primary market for our devices, i.e., minimally invasive procedures, it is important for us to be at the cutting-edge of
technological developments at the correct price point to remain relevant. It is also important to diversify product offerings to ensure
that all the products used during a procedure can be supplied by one service provider. The price of these devices is also expected to
fall given the entry of many new players in the market.

 Another market driver is the growing population
in developing countries for healthcare and procedures, which has increased significantly in recent years as previously mentioned.

 Major shifts in industry market share have
occurred in connection with product problems, physician advisories, safety alerts, results of clinical trials to support superiority claims,
and publications about products, reflecting the importance of product quality, product efficacy and quality systems in the medical device
industry.

 In the current environment of managed care,
economically motivated customers, consolidation among healthcare providers, increased competition, and declining reimbursement rates,
we have been increasingly required to compete on the basis of price. In order to continue to compete effectively, we must continue to
create or acquire advanced technology, incorporate this technology into proprietary product offerings, obtain regulatory approvals in
a timely manner, maintain high-quality manufacturing processes, and successfully market these products.

 Government and private sector initiatives to
limit the growth of healthcare costs, including price regulation, competitive pricing, bidding and tender mechanics, coverage and payment
policies, comparative effectiveness of therapies, technology assessments and managed-care arrangements, are continuing in many countries
in which the Medinotec Group does business, including the US.

 These initiatives put increased emphasis on
the delivery of more cost-effective medical devices and therapies. Government programs, including Medicare and Medicaid, private healthcare
insurance and managed-care plans have attempted to control costs by limiting the amount of reimbursement they will pay for particular
procedures or treatments, tying reimbursement to outcomes, shifting to population health management, and other mechanisms.

 Hospitals, which purchase our technology, are
also seeking to reduce costs through a variety of mechanisms, including, for example, centralized purchasing, and in some cases, limiting
the number of vendors that may participate in the purchasing program. Hospitals are also aligning interests with physicians through employment
and other arrangements, such as gainsharing, where a hospital agrees with physicians to share any realized cost savings resulting from
changes in practice patterns such as device standardization. This has created an increased level of price sensitivity among customers
for our products.

 (Image depicting a team of surgeons performing
an operation. Source: Shutterstock)

 The next logical step for us would be to secure
investment opportunities and additional distributor relationships through the North American territory and to further deploy this for
growth in our distribution channels.

 Our Competitor Landscape

 The Medinotec Group of companies operates in
highly competitive markets that are characterized by a number of large, multinational players as well as a number of small, regional or
local distributors. Some of the major players include Johnson & Johnson, Boston Scientific, Cook Medical, Cordis, B. Braun, Teleflex,
Medtronic, Merit Medical, Endotec, Conmed and Cadence.

 Competition is based on price, consistency
and quality of product, site location, distribution capability, customer service, reliability of supply, breadth of product offering and
technical support. The principal competitive factors in these markets are product features, value-added solutions, reliability, clinical
evidence, reimbursement coverage, and price.

 We compete with many companies having significantly
more capital resources, larger research laboratories and more extensive distribution systems. As such, there are no assurances that we
will be able to compete and gain market share.

 2.

 Build our Competencies

 Our investment in R&D has included the development
of a state-of-the-art production facility in Johannesburg, South Africa. This facility, designed to significantly enhance capacity and
output within an ISO 7 cleanroom environment, also features expanded laboratory space, including a "dry" laboratory for microscopy,
mechanical testing, prototyping, and experimentation, and a "wet" laboratory for pressure testing, weighing, liquid experimentation,
and 3D printing. Additionally, a workshop is equipped for turning, milling, grinding, and other processes required for custom machinery
and prototype development.

 The facility's large packaging area and dedicated
EtO sterilizer have enabled in-house sterilization, supporting operations governed by the ISO 13485 Quality Management System. Our CE-Marked
products, with IP protection, have benefited from expertise in advanced medical manufacturing techniques, including balloon forming, heat
and adhesive bonding, device coating, catheter laminating, and more. This has allowed for the commissioning of the latest balloon-forming
manufacturing equipment to increase production capabilities for interventional balloon catheter products.

 While this investment has been an integral part of
our growth strategy, we are temporarily shifting focus away from further expansion of the production facility. Instead, our strategic
focus will now center on the other two pillars of our strategy as these priorities are aligned with our vision to drive growth through
innovation and strategic alignment with key partners.

 By concentrating on these focus areas, the Medinotec
Group of Companies aims to maximize impact, accelerate innovation, and leverage our low-cost base in South Africa to strengthen our position
as a leading med-tech company globally.

 3.

 Make Strategic Bolt-on Acquisitions

 While strategic bolt-on acquisitions remain a consideration
in our business plan, we currently have no active due diligence processes underway and no imminent acquisition transactions at this time.

 Our Implementation Plan

 Any business strategy requires a plan that
outlines a roadmap for implementation. The Medinotec Group of Companies' plan is to continue
to ensure quality manufacturing of our current products, ongoing investment into our own IP, and planned acquisitions to ensure the financial
stability of current operations, the longevity of our organization and a smooth integration process for new businesses we may acquire.
The key drivers in our plan that support the business strategy are as follows:

 •

 Increase
 our presence and product offering in specialty product end-markets. In the past, we have signed various exclusive
 distribution agreements across multiple territories to enhance our product basket and reach.

 •

 Our
 R&D and business development teams work together to enhance existing product offering. These teams also pursue opportunities
 to acquire new product offerings through business acquisitions and distributorships that are expected to increase our presence and
 market share in certain specialty product markets and/or allow us to enter new markets. We manage a robust pipeline of new products
 and business relationships in various stages of development and are also in various stages of expanding capabilities to improve product
 offerings across our various platforms.

 •

 Further
 develop value-added capabilities to maximize margins. We expect to continue investing in ways to increase the value we provide
 to customers by growing our product offerings, improving our supply chain management, upgrading our IT, and enhancing our customer
 service model. We are also exploring other ways to expand our reach and our products to provide incremental value to our customers,
 including new acquisitions to vertically integrate our supply chain and to obtain more of the gross profit share of the entire customer
 experience.

 •

 Optimize
 product mix and keep operating costs low. We continue to actively manage our product mix as we seek to maximize profit margins.
 This requires us to use our proprietary expertise in balancing key variables, such as procurement and processing capacity, transportation
 availability, customer requirements and pricing. Additionally, we undertake continuous improvement efforts to increase the effectiveness
 and efficiency of our production and distribution facilities.

 •

 Effectively
 position logistic capabilities and supply chain network to meet customers' needs. We continue to strategically position
 our supply chain to deliver according to our customers' needs. We believe that our supply chain network and logistic capabilities
 are a competitive advantage that enables us to provide superior service to customers.

 •

 The
 strategic location of our distribution centers enables us to service major customers within 48 hours (this includes
 certain deliveries to rural and outlying areas in South Africa, which have limited road access and infrastructure). Additionally,
 our in-house delivery capabilities allow for direct deliveries and last-minute route adjustments to support our customers.

 •

 Evaluate
 expansion opportunities and other acquisitions. We expect to continue leveraging our reputation, procurement, distribution capabilities
 and infrastructure to increase our product offerings, as well as to explore other opportunities to expand our reserve base and sell
 new products.

 •

 We
 will pursue acquisitions of value-adding products and technologies. We will prioritize acquisitions that will provide us with
 opportunities to realize synergies, which include entering new geographic markets, acquiring attractive customer contracts, and improving
 operations.

 •

 Maintain
 balance sheet strength and flexibility. We intend to maintain financial strength and flexibility to enable us to better manage
 the business through industry downturns and pursue acquisitions and new growth opportunities as they arise. The business has good
 cash-producing prospects and this, together with our entrepreneurial mindset, ensures that we can quickly pursue opportunities that
 are time sensitive.

 •

 Carry
 sufficient levels of inventory to meet the product delivery needs of customers. We aim to carry sufficient inventory, and to
 provide payment terms to customers in the normal course of business to meet the operational demands of our customers. Due to the
 location of our distribution centers in relation to the US, Europe, and the Far East, we require our distributors to carry at minimum
 three (3) months of inventory on fast moving items to avoid supply chain pressures.

 •

 Training
 and skills development: Our continued investment into the healthcare landscape through training and academic development assists
 in retaining and maintaining the necessary skills base within southern Africa. Training and skills development in healthcare is an
 intrinsic and necessary part of our growth strategy. We use a state-of-the-art training facility at our Johannesburg head office,
 which includes the latest cardiology simulators, to assist young surgeons and health professionals to develop their procedural skills.
 We also have a full array of non-occlusive balloon dilation technology for training purposes and for hands-on product technical training.

 Product Distribution

 We have appointed various distributors to grow sales
internationally, especially in Europe, North America, South America, Middle East, portions of Asia as well as Namibia and Mauritius.

 We are currently represented in approximately
29 countries, with product registration in progress for an additional 8 countries. We currently have 28 appointed distributors to represent
our products globally. All exports are managed directly out of South Africa by an export manager.

 We have had several training initiatives held in the US where
FDA approval has been granted for the Trachealator following the 510(k) substantially equivalence process for Class II medical devices

 We intend to complete our various networks and obtain
regulatory approvals to be able to export and distribute our product to countries such as Australia, Japan and China.

 Through the operating subsidiary DISA Medinotec Proprietary
Limited, we ship our products to customers directly by freight or by air and through our network of in-house and courier partners. Recent
market trends have resulted in more product volumes being transported by high-efficiency road freight.

 Our distribution centers in Johannesburg, South Africa
and New York, United States of America are strategically located to provide access to road and air freight. We also continually explore
ways of optimizing our network to ensure that the product remains close to the point of end use. This approach allows us to provide excellent
customer service and positions us to take advantage of opportunistic sales.

 Product Manufacturing – Quality Assurance and Regulatory
Requirements

 Quality Management

 The safety and quality of our medical devices is assured
through rigorous documented procedures and an accredited Quality Management System ("QMS"), which was established in accordance
with the requirements of ISO 13485, the European Union Medical Device Regulation 2017/745, the US FDA 21 CFR 820 regulations, and the various
applicable acts and guidelines legislated by the South African regulatory authorities.

 Our QMS is implemented through the Medinotec Group
of Companies' policies, procedures and work instructions followed and utilized by all departments. We also maintain an active post-market
surveillance program, which enables product performance to be regularly assessed and to be reported to the regulatory authorities if any
incident/malfunction occurs that results in severe injury to the patient or death.

 Additionally, we maintain quality standards relevant
to the storage and distribution of our products. These include technical/quality agreements with our suppliers. Since we import raw materials,
all manufacturing of the products is performed in DISA Medinotec South Africa's clean room facilities, and all instructions and
quality manuals are written to convert a series of raw materials into finished goods against the applicable quality assurance standards
and internal procedures. No manufacturing steps are outsourced at the moment.

 Compliance to all procedures is monitored via an internal
audit system and augmented by audits conducted annually by European and American notified bodies.

 International Quality Regulations

 Many products require CE marking before they can be
sold in the European Union. CE marking indicates that a product has been assessed by the manufacturer and deemed to meet EU safety, health
and environmental protection requirements. It is required for products manufactured anywhere in the world that are then marketed in the
European Union.

 Most of our products carry the CE Mark, ensuring conformity
to the legal requirements of the European Union. The valid CE certificates for the devices concerned have been issued in compliance with
the Medical Device Directive 93/42/EEC and these devices could initially be placed on the market until May 2024, but an extension has
been granted till the end of 2027 due to the European Notified Bodies being unable to handle the volume of the applications.

 We are currently in the process of ensuring compliance
with the new and very demanding Medical Device Regulation (MDR) 2017/745 with the Trachealator already being certified under this regulation.
The Technical Files for the remaining products are currently being reviewed by DEKRA.

 DEKRA is a global testing, inspection, and certification
organization. In Europe, DEKRA is recognized as a Notified Body for medical devices, meaning it is authorized by the European Union to
assess whether medical devices comply with EU regulations and standards. This involves evaluating the design, manufacturing process, and
quality management systems of medical devices to ensure they meet the required safety and performance criteria before they can be marketed
in the EU. DEKRA's role includes conducting conformity assessments, issuing CE certifications, and performing post-market surveillance
to ensure ongoing compliance.

 FDA certification via the 510(k) substantially equivalence
process for Class II medical devices for the Trachealator has been obtained and sales have started in the US during the past financial
year. For two cardiac catheters, we are in the process of obtaining the required FDA certification for our devices, thus enabling us to
market and sell our products in the US.

 In addition, we are subject to numerous and increasingly
stringent environmental laws and regulations concerning, among other things, the generation, handling, storage, transportation, treatment
and disposal of toxic and hazardous substances, the discharge of pollutants into the air and water and the cleanup of contamination. We
are required to maintain and comply with environmental permits and controls for some of our operations, and these permits are subject
to modification, renewal, and revocation by the issuing authorities. Our environmental compliance may increase in the future because of
changes in environmental laws and regulations or increased manufacturing activities at any of our facilities. We could incur significant
costs or liabilities because of any failure to comply with environmental laws, including fines, penalties, third-party claims, and the
costs of undertaking a clean-up on-site or at a site to which any waste materials were transported. In addition, we are planning to grow
in part by acquisition, and our diligence may not have identified environmental impacts from historical operations at sites we may acquire
in the future. We have an extensive health and safety program. This also stipulates how we handle waste materials and staff safety in
the cleanroom facility. Our health and safety costs are included in our compliance costs.

 The Medinotec Group of Companies for the Years Ended

 February 28, 2025

 February 29, 2024

 Compliance cost

 $
 526,603

 $
 186,338

 It should be noted that as we approach market and
sales readiness with our products our compliance costs are increased to facilitate the path to sell products into new territories and
to ensure legal and statutory compliance in these markets. The fluctuations in annual and quarterly compliance costs can be attributed
to these new markets being prepared for sales activities.

 Medical Device Regulation

 Regulatory body approvals and market acceptance play
a material role in the success of our business plan. The approval process of the governing bodies for example FDA/CE is lengthy, time
consuming and inherently unpredictable, and if we are ultimately unable to obtain marketing approval for our products it will have a material
impact on our business, we may encounter substantial delays in completing our clinical studies which in turn will require additional costs,
or we may fail to demonstrate adequate safety and efficacy to the satisfaction of applicable regulatory authorities. If we are not able
to obtain, or if there are delays in obtaining, required regulatory approvals, we will not be able to commercialize, or will be delayed
in commercializing, our product candidates and our ability to generate revenue will be impaired even if our product candidates receive
marketing approval, they may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in
the medical community necessary for commercial success. Regulatory approvals are aligned with our operating segments, with U.S. Food and
Drug Administration (FDA) requirements primarily applicable to our operations within the United States, while also relevant in certain
non-European international markets. The Conformit Europ enne (CE) marking, historically required for European market access,
is now being replaced by the European Union's new regulatory framework under the Medical Device Regulation (EU MDR) and In Vitro
Diagnostic Regulation (IVDR), collectively referred to as the EU's FDR (Future Device Regulation), which governs our activities
in Europe and certain other international jurisdictions

 Regulation of Medical Devices in Europe

 Medical devices placed on the market in the European
Economic Area, or EEA must meet the relevant essential requirements laid down in Annex I of Directive 93/42/EEC concerning medical devices
("the Medical Devices Directive"). The most fundamental essential requirement is that a medical device must be designed and
manufactured in such a way that it will not compromise the clinical condition or safety of patients, or the safety and health of users
and others. In addition, the device must achieve the performances intended by the manufacturer and be designed, manufactured, and packaged
in a suitable manner. The European Commission has adopted various standards applicable to medical devices. These include standards governing
common requirements, such as sterilization and safety of medical electrical equipment and product standards for certain types of medical
devices. There are also harmonized standards relating to design and manufacture. While not mandatory, compliance with these standards
is viewed as the easiest way to satisfy the essential requirements as a practical matter. Compliance with a standard developed to implement
an essential requirement also creates a rebuttable presumption that the device satisfies that essential requirement.

 To demonstrate compliance with the essential requirements
laid down in Annex I to the Medical Devices Directive, medical device manufacturers must undergo a conformity assessment procedure, which
varies according to the type of medical device and its classification. Conformity assessment procedures require an assessment of available
clinical evidence, literature data for the product, and post-market experience in respect of similar products already marketed. Except
for low-risk medical devices (Class I non-sterile, non-measuring devices), where the manufacturer can self-declare the conformity of its
products with the essential requirements (except for any parts which relate to sterility or metrology), a conformity assessment procedure
requires the intervention of a Notified Body. Notified bodies are often separate entities and are authorized or licensed to perform such
assessments by government authorities. The notified body would typically audit and examine a product's technical dossiers and the
manufacturers' quality system. If satisfied that the relevant product conforms to the relevant essential requirements, the notified
body issues a certificate of conformity, which the manufacturer uses as a basis for its own declaration of conformity. The manufacturer
may then apply the CE Mark to the device, which allows the device to be placed on the market throughout the EEA. Once the product has
been placed on the market in the EEA, the manufacturer must comply with requirements for reporting incidents and field safety corrective
actions associated with the medical device.

 In order to demonstrate safety and efficacy for their
medical devices, manufacturers must conduct clinical investigations in accordance with the requirements of Annex X to the Medical Devices
Directive ("MDD"), Annex 7 of the Active Implantable Medical Devices Directive ("AIMDD"), and applicable European
and International Organization for Standardization standards, as implemented or adopted in the EEA member states. Clinical trials for
medical devices usually require the approval of an ethics review board and approval by or notification to the national regulatory authorities.
Both regulators and ethics committees also require the submission of serious adverse event reports during a study and may request a copy
of the final study report.

 On April 5, 2017, the European Parliament passed the
Medical Devices Regulation (Regulation 2017/745), which repeals and replaces the E.U. Medical Devices Directive and the Active Implantable
Medical Devices Directive. Unlike directives, which must be implemented into the national laws of the EEA member States, the regulations
would be directly applicable, i.e., without the need for adoption of EEA member State laws implementing them, in all EEA member States
and are intended to eliminate current differences in the regulation of medical devices among EEA member States. The Medical Devices Regulation,
among other things, is intended to establish a uniform, transparent, predictable, and sustainable regulatory framework across the EEA
for medical devices and ensure a high level of safety and health while supporting innovation. The Medical Device Regulation became applicable
in May 2021. The new regulations:

 •

 strengthen the rules on placing devices on the market and reinforce surveillance once they are available;

 •

 establish explicit provisions on manufacturers' responsibilities for the follow-up of the quality, performance, and safety of devices placed on the market;

 •

 improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number;

 •

 set up a central database to provide patients, healthcare professionals, and the public with comprehensive information on products available in the E.U.; and

 •

 strengthen the rules for the assessment of certain high-risk devices, such as implants, which may have to undergo an additional check by experts before they are placed on the market.

 In the European Union, member states are responsible
for enforcing the EU's medical device rules and for ensuring that only compliant medical devices are placed on the market or put
into service in their jurisdictions. They have the power to suspend the marketing and use, or demand the recall, of unsafe or non-compliant
devices. They also have the power to bring enforcement action against companies or individuals for breaches of the device rules. Non-compliance
may also result in Notified Bodies revoking any certificate of conformity that they have issued for a device or the manufacturer's
quality system.

 We are subject to regulations and product registration
requirements in many foreign countries in which we may sell our products, including in the areas of:

 •

 design, development, and manufacturing;

 •

 product standards;

 •

 product safety;

 •

 product safety reporting;

 •

 marketing, sales, and distribution;

 •

 packaging and storage requirements;

 •

 labeling requirements;

 •

 content and language of instructions for use;

 •

 clinical trials;

 •

 record keeping procedures;

 •

 advertising and promotion;

 •

 recalls and field corrective actions;

 •

 post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury;

 •

 import and export restrictions;

 •

 tariff regulations, duties, and tax requirements;

 •

 registration for reimbursement; and

 •

 necessity of testing performed in country by distributors for licensees.

 The time required to obtain clearance required by
foreign countries may be longer or shorter than that required for FDA clearance, and requirements for licensing a product in a foreign
country may differ significantly from FDA requirements.

 Regulation of Medical Devices in South Africa

 In South Africa, medical device manufacturing is regulated
by the South African Health Products Regulatory Authority ("SAHPRA"), with guidelines published in the Government Gazette
No. 40480 in 2016, which refer to licensing of medical devices establishments and the registration required to ensure an acceptable level
of safety, quality, and performance. DISA Medinotec Proprietary Limited is registered with SAHPRA and possesses the above-described licenses
and registrations for all our products.

 Federal, State, and Foreign Fraud and Abuse
and Physician Payment Transparency Laws.

 In addition to FDA restrictions on marketing and promotion
of drugs and devices, other federal and state laws may restrict our business practices if our products will be reimbursable under federal
healthcare programs. These laws include, without limitation, foreign, federal, and state anti-kickback and false claims laws, as well
as transparency laws regarding payments or other items of value provided to healthcare providers.

 The federal Anti-Kickback Statute prohibits, among
other things, knowingly and willfully offering, paying, soliciting or receiving any remuneration (including any kickback, bribe or rebate),
directly or indirectly, overtly or covertly, in cash or in kind to induce or in return for purchasing, leasing, ordering or arranging
for or recommending the purchase, lease or order of any good, facility, item or service reimbursable, in whole or in part, under Medicare,
Medicaid or other federal healthcare programs.

 Violation of the AKS also triggers liability under
the Civil Monetary Penalties Law (CMPL). The CMPL carries penalties of up to $50,000 per kickback, in addition to three times the
amount of the remuneration. Similarly, violations can result in exclusion from participation in government healthcare programs, including
Medicare and Medicaid. Liability under the federal Anti-Kickback Statute may also arise because of the intentions or actions of the parties
with whom we do business.

 The federal civil False Claims Act prohibits, among
other things, any person or entity from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval
to the federal government or knowingly making, using, or causing to be made or used a false record or statement material to a false or
fraudulent claim to the federal government. A claim includes "any request or demand" for money or property presented
to the U.S. government. The federal civil False Claims Act also applies to false submissions that cause the government to be paid less
than the amount to which it is entitled, such as a rebate. Intent to deceive is not required to establish liability under the federal
civil False Claims Act.

 In addition, private parties may initiate "qui
tam" whistleblower lawsuits against any person or entity under the federal civil False Claims Act in the name of the government
and share in the proceeds of the lawsuit. Penalties for federal civil False Claim Act violations include fines for each false claim, plus
up to three times the amount of damages sustained by the federal government and, most critically, may provide the basis for exclusion
from the federally funded healthcare program. The criminal False Claims Act prohibits the making or presenting of a claim to the government
knowing such claim to be false, fictitious or fraudulent and, unlike the federal civil False Claims Act, requires proof of intent to submit
a false claim. When an entity is determined to have violated the federal civil False Claims Act, the government may impose civil fines
and penalties ranging from $13,946 to $27,894 for each false claim, plus treble damages, and exclude the entity from participation in
Medicare, Medicaid, and other federal healthcare programs.

 The Civil Monetary Penalty Act of 1981 imposes penalties
against any person or entity that, among other things, is determined to have presented or caused to be presented a claim to a federal
healthcare program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent,
or offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence
the beneficiary's decision to order or receive items or services reimbursable by the government from a particular provider or supplier.

 The Health Insurance Portability and Accountability
Act of 1996 ("HIPAA") also created additional federal criminal statutes that prohibit among other actions, knowingly and willfully
executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly
and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare
offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious
or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the federal
Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order
to have committed a violation.

 Many foreign countries have similar laws relating
to healthcare fraud and abuse. Foreign laws and regulations may vary greatly from country to country. For example, the advertising and
promotion of our products is subject to E.U. directives concerning misleading and comparative advertising and unfair commercial practices,
as well as other EEA Member State legislation governing the advertising and promotion of medical devices. These laws may limit or restrict
the advertising and promotion of our products to the general public and may impose limitations on our promotional activities with healthcare
professionals. Also, many U.S. states have similar fraud and abuse statutes or regulations that may be broader in scope and may apply
regardless of payor, in addition to items and services reimbursed under Medicaid and other state programs.

 Data Privacy and Security Laws.

 In the future, we may also be subject to various federal,
state, and foreign laws that protect personal information including certain patient health information, such as the E.U. General Data
Protection Regulation ("GDPR") and the California Consumer Privacy Act ("CCPA"), and restrict the use and disclosure
of patient health information, such as HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act ("HITECH"),
in the U.S.

 HIPAA established uniform standards governing the
conduct of certain electronic healthcare transactions and requires certain entities, called covered entities, to comply with standards
that include the privacy and security of Protected Health Information ("PHI"). HIPAA also requires business associates, such
as independent contractors or agents of covered entities that have access to PHI in connection with providing a service to or on behalf
of a covered entity, of covered entities to enter into business associate agreements with the covered entity and to safeguard the covered
entity's PHI against improper use and disclosure.

 The HIPAA privacy regulations cover the use and disclosure
of PHI by covered entities as well as business associates, which are defined to include subcontractors that create, receive, maintain,
or transmit PHI on behalf of a business associate. They also set forth certain rights that an individual has with respect to his or her
PHI maintained by a covered entity, including the right to access or amend certain records containing PHI, or to request restrictions
on the use or disclosure of PHI. The security regulations establish requirements for safeguarding the confidentiality, integrity, and
availability of PHI that is electronically transmitted or electronically stored. HITECH, among other things, established certain
health information security breach notification requirements. A covered entity must notify any individual whose PHI is breached according
to the specifications set forth in the breach notification rule. The HIPAA privacy and security regulations establish a uniform federal
"floor" and do not supersede state laws that are more stringent or provide individuals with greater rights with respect to
the privacy or security of, and access to, their records containing PHI or insofar as such state laws apply to personal information that
is broader in scope than PHI as defined under HIPAA.

 HIPAA requires the notification of patients, and other
compliance actions, in the event of a breach of unsecured PHI. If notification to patients of a breach is required, such notification
must be provided without unreasonable delay and in no event later than 60 calendar days after discovery of the breach. In addition, if
the PHI of 500 or more individuals is improperly used or disclosed, we would be required to report the improper use or disclosure to HHS
which would post the violation on its website, and to the media. Failure to comply with the HIPAA privacy and security standards can result
in civil monetary penalties up to $68,928 per violation, not to exceed $2.07 million per calendar year for non-compliance of an identical
provision.

 HIPAA authorizes state attorneys general to file suit
on behalf of their residents for violations. Courts are able to award damages, costs and attorneys' fees related to violations of
HIPAA in such cases. While HIPAA does not create a private right of action allowing individuals to file suit against us in civil court
for violations of HIPAA, its standards have been used as the basis for duty of care cases in state civil suits such as those for negligence
or recklessness in the misuse or breach of PHI. In addition, HIPAA mandates that the Secretary of HHS conduct periodic compliance audits
of HIPAA covered entities, and their business associates for compliance with the HIPAA privacy and security standards. It also tasks HHS
with establishing a methodology whereby harmed individuals who were the victims of breaches of unsecured PHI may receive a percentage
of the civil monetary penalty paid by the violator.

 In addition, California enacted the CCPA, effective
January 1, 2020, which, among other things, creates new data privacy obligations for covered companies and provides new privacy rights
to California residents, including the right to opt out of certain disclosures of their information. The CCPA also creates a private right
of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data breach. Although
the law includes limited exceptions, including for "protected health information" maintained by a covered entity or business
associate, it may regulate or impact our processing of personal information depending on the context.

 In the EEA, we may become subject to laws which restrict
our collection, control, processing, and other use of personal data (i.e. data relating to an identifiable living individual) including
the GDPR (and any national laws implementing the GDPR). As part of our operations, we process personal data belonging to data subjects
in the EEA, including employees, contractors, suppliers, distributors, service providers, customers, patients, or clinical trial participants.
For patients or clinical trial participants, we process special categories of personal data like health and medical information. We need
to ensure compliance with the GDPR (and any applicable national laws implementing the GDPR) in each applicable EEA jurisdiction.

 Healthcare Reform.

 The U.S. and some foreign jurisdictions are considering
or have enacted a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability
to sell our products profitably. Among policy makers and payors in the U.S. and elsewhere, there is significant interest in promoting
changes in healthcare systems with the stated goals of containing healthcare costs, improving quality or expanding access. Current and
future legislative proposals to further reform healthcare or reduce healthcare costs may limit coverage of or lower reimbursement for
the procedures associated with the use of our products. The cost containment measures that payors and providers are instituting and the
effect of any healthcare reform initiative implemented in the future could impact our revenue from the sale of our products.

 We expect additional state and federal healthcare
reform measures to be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare
products and services, which could result in reduced demand for our products or additional pricing pressure.

 Our Key Products

 Medinotec's innovative surgical and healthcare
products are market leaders and meet high quality standards. These are as follows with the Trachealator being one of our most sought-after
and innovative offerings.

 The Trachealator

 The Trachealator has changed the way that tracheal,
and, to a degree, bronchial stenosis is managed in extremely ill patients. While there are multiple causes of tracheal stenosis, it is
estimated that thousands of cases are reported every year. Multiple, safe, serial dilations of the trachea are often curative and the
Trachealator is currently in our opinion as management the only device that is non-occlusive and which allows the procedure to be done
with the patient fully awake and un-sedated.

The Trachealator received its CE Mark in 2019 and is currently sold in various markets across Europe, Middle East, South America and portions
of Asia and has been used successfully on thousands of patients. The FDA approval through the 510(k) substantially equivalence process
for Class II medical devices was obtained in November 2021. In May of 2021 in recognition of the technology advancement in the device,
it was awarded a Gold Medal in the Medical Design Excellence Awards.

 The Trachealator received the CE Mark of approval
by a European notifying body (DEKRA). CE Marking is a qualification mandatory for any product to be sold in countries of the European
Union.

 The USA recognizes only an FDA approval to accept
products in its market – a 510(k) accreditation that was obtained in November 2021 for the Trachealator and sales has since commenced
in the USA.

 From prior experience, an FDA certificate and CE Mark
are widely accepted by other countries in the world as a valid accreditation for entry into their markets; however, the medical device
approval process differs for each country and territory in the world and each may have additional requirements over and above CE mark
and FDA accreditation, or may even require their own quality standards. Since the business plan is drafted mainly around the USA and European
markets the CE marking and planned future FDA submissions, entry into other markets will only be investigated if the expected launch of
our product candidates does not commercialize in the United States and Europe and each entry will be assessed on its own merits and requirements.

 For example, Australia, Japan and China have
their own quality accreditation systems (TGF, JIS & CFDA respectively) and do not accept CE marking and/or an FDA certificate.

 The
Trachealator

 The Trachealator

 The Cape Cross PTCA Catheter

 The Medinotec Group of Companies also designed
and developed a range of semi-compliant coronary PTCA 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 balloon in the market.

 A PTCA catheter 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.

 The Cape Cross PTCA Catheter

 Cape Cross Non-Compliant ("NC")
Catheter

 On the back of the Cape Cross, the Cape Cross
NC Catheter was developed for post 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 Cape Cross Non-Compliant ("NC")
Catheter

 Aortic Valve Dilation Balloon Catheter

 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.

 This catheter could 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).

 Submission for FDA certification via the 510(k)
substantially equivalence process was made on May 31, 2024. FDA clearance was obtained on March 11, 2025, after the financial year end.

 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 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.

 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 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.

 Product
Development Pipeline

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

 1)

 R&D

 2)

 Pre-production prototyping

 3)

 Testing

 4)

 Production

 5)

 Clinical trials

 6)

 MDR/CE Mark accreditation

 7)

 Local marketing & selling

 8)

 International sales outside the US

 9)

 FDA 510 (k) approval

 10)

 Sales to the United States.

 The products described have reached the following stages:

 Trachealator:

 The Company is pleased to report that, since sales commenced, it has supplied
 940 Trachealators, both in private and academic hospitals throughout the United States of America.

 FDA clearance and CE certification was obtained.

 Cape Cross PTCA Catheter:

 Application for FDA 510(k) clearance in progress with external consultants. Final submission pending. CE certification under the MDD has been obtained, and is still valid under Regulation (EU) 2023/607. CE certification under the MDR is in progress.

 Cape Cross NC Catheter:

 Application for FDA 510(k) clearance in progress with external consultants. Final submission pending. CE certification under the MDD has been obtained, and is still valid under Regulation (EU) 2023/607. CE certification under the MDR is in progress.

 A ortic
 Valve Dilation Balloon Catheter (OutFlo):

 FDA clearance was obtained on March 11, 2025, after the financial year end.

 Micro CTO Catheter:

 R&D, Testing, Pre-Production Prototyping, Clinical Trials MDR/CE Mark accreditation application was submitted in July 2023.

 Tracheal Stent:

 R&D

 Epistaxis Catheter:

 R&D, Testing, Pre-Production Prototyping, Testing, Production, Clinical Trials – FDA 510(k) exempted (Class I product)

 Intellectual Property

 Medinotec Group of Companies currently holds various
product registration certificates and operating licenses, which allow us to operate as an importer of raw materials for the manufacture
of medical devices and an exporter and distributor of these products within the territories we service. We also hold various patents,
trademarks, and other intangible proprietary rights that are considered material to the business and its ability to compete effectively
with other companies.

 Medinotec Group of Companies pursues a policy of obtaining
patent protection in the US, China, Europe, Middle East, and Australia for patentable subject matter in our products and attempt to review
third-party patents and patent applications to the extent publicly available to develop an effective patent strategy. This assists in
avoiding the infringement of third-party patents, helps identify licensing opportunities and monitors the patent claims of others.

 Due to the Trachealator being fairly new, patent applications
for the Trachealator have been filed in the following countries or regions: USA, European Union, China, Australia, Korea and South Africa.
All other products are either not novel enough to file a patent or not yet developed far enough to start filing processes.

 The status of these applications is listed below:

 1)

 USA:

 Patent No. 12,036,376, B2 has been granted on July 16, 2024. This patent is valid until April 28, 2040.

 2)

 China:

 Patent No. 201880086558.2 has been granted on March 31, 2023. This patent is valid until December 12, 2038.

 3)

 South Korea:

 Patent No. 10-2635372 has been granted on February 5, 2024. This patent is valid until September 4, 2040.

 4)

 European Union:

 Intention to grant: EP 3768363 / November 11, 2024. This patent is valid until December 12, 2038.

 5)

 South Africa:

 Patent No. 2020/02618 has been granted on July 27, 2022. This patent is valid until July 27, 2040.

 6)

 Australia:

 Acceptance to be advertised, 2018406682, November 14, 2024. This patent is valid until December 12, 2038.

 No patents have been licensed from third parties.

 Trade Secrets

 With respect to some of our products, Medinotec Group
of Companies rely principally on trade secrets, rather than patents, to protect proprietary processes, methods, documentation, and other
technologies, as well as certain other business information.

 Although the Medinotec Group of Companies seek patents
from time to time as discussed above, patent protection for other industrial and specialty products requires a costly federal registration
process with an uncertain outcome that would place confidential information in the public domain.

 The Medinotec Group of Companies also relies on trade
secrets, expertise, continuing technological innovations, and licensing opportunities to develop, maintain and strengthen our competitive
position. We strive to protect our trade secrets indefinitely through the use of confidentiality agreements and other security measures,
understanding that these efforts may prove to be ineffective.

 Research and Development

 All R&D is conducted within the Medinotec Group
of Companies, which employs the necessary engineers, and technical and support personnel. The in-house technical expertise includes biomedical
engineering and product design. The R&D team focuses primarily on developing new products and supporting existing products.

 Condition of Physical Assets and Insurance

 Parts of the Medinotec Group of Companies are capital
intensive and require ongoing capital investment for the replacement, modernization and/or expansion of equipment and facilities. We therefore
maintain insurance policies against property loss and business interruption and insure against other risks that are typical in the operation
of the business, in amounts that we believe to be reasonable. Where costs are deemed to be commercially unviable, we self-insure. Such
insurance, however, contains exclusions and limitations on coverage, particularly with respect to environmental liability and political
risk. There can thus be no assurance that claims would be paid under such insurance policies in connection with a particular event.

 Primary Customers

 Medinotec Group of Companies primary customers include
hospitals, clinics, third-party healthcare providers, distributors, and other institutions, including governmental healthcare programs
and group purchasing organizations ("GPOs"). We also benefit from strong and long-standing relationships with customers in
each of the industrial and specialty products end markets we serve.

 Third Party Coverage and Reimbursement

 Healthcare providers that purchase medical devices
generally rely on third-party payors, including private payors, such as indemnity insurers, employer group health insurance programs and
managed care plans, to reimburse all or part of the cost of the products. As a result, demand for our products is and will continue to
be dependent in part on the coverage and reimbursement policies of these payors.

 Possible reductions in, or eliminations of, coverage
or reimbursement by third-party payors, or denial of, or provision of uneconomical reimbursement for new products may affect our customers'
revenue and ability to purchase our products. Any changes in the healthcare regulation, payment or enforcement landscape relative to our
customers' healthcare services have the potential to significantly affect our operations and revenue.

 Additional Information

 The public may read and copy any materials the Company
files with the SEC in the SEC's Public Reference Section, Room 1580, 100 F Street N.E., Washington, D.C. 20549. The public may obtain
information on the operation of the Public Reference Section by calling the SEC on 1-800-SEC-0330. Additionally, the SEC maintains an
Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically
with the SEC, which can be found at

 Item 1A.

 Risk Factors.

 You should carefully consider the risks described
below together with all of the other information included in this Annual Report before making an investment decision with regard to our
securities. The statements contained in or incorporated herein that are not historic facts are forward-looking statements that are subject
to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking
statements. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed.
In that case, you may lose all or part of your investment. In addition to other information in this registration statement and in other
filings we make with the Securities and Exchange Commission, the following risk factors should be carefully considered in evaluating our
business as they may have a significant impact on our business, operating results and financial condition. If any of the following risks
actually occurs, our business, financial condition, results of operations and future prospects could be materially and adversely affected.
Because of the following factors, as well as other variables affecting our operating results, past financial performance should not be
considered as a reliable indicator of future performance and investors should not use historical trends to anticipate results or trends
in future periods.

 SUMMARY OF RISK FACTORS

 The following is a condensed summary of the principal
risks associated with our business. These risks represent the key challenges and uncertainties we face, and they are described in greater
detail in the "Risk Factors" section of this report. Investing in our securities involves a high degree of risk, and the occurrence
of any of these factors could materially and adversely affect our business, financial condition, results of operations, or stock price.

 Financial Risks: We carry substantial debt,
may need additional financing, and face exposure to interest rate changes, accounting rule shifts, and tax regulation updates, all of
which could impact financial flexibility and results.

 Operational Challenges: Our success depends
on product development, supply chain continuity, and competitive positioning. Industry consolidation, pricing pressures, IT disruptions,
and foreign exchange volatility pose risks to our operations and profitability.

 Customer and Market Exposure: We rely heavily
on a limited number of customers, including DISA Life Sciences, which increases the risk of revenue concentration. Inadequate insurance
coverage and internal control weaknesses may further exacerbate operational vulnerabilities.

 Management and Governance: Our business depends
on a small number of key personnel, many of whom are located outside the U.S. Concentrated voting power among founders and limited public-company
experience heighten governance and compliance risks.

 Regulatory and Legal: Delays in obtaining regulatory
approvals, potential product liability, compliance with marketing and reimbursement rules, IP protection, and evolving environmental and
data privacy laws all pose significant risks. Violations could lead to penalties or legal action.

 Geopolitical and Regional Risks: Political
and economic instability in South Africa—such as load-shedding, exchange controls, and FATF grey-listing—may impair operations.
Broader geopolitical tensions and trade disputes also affect supply chains and market access. Geopolitical and trade risks due to
tariffs and trade wars.

 Market and Securities Risks: Our shares trade
on the OTCQX market and are considered penny stocks, which may limit liquidity. Future equity issuances could dilute existing shareholders,
and share prices may fluctuate significantly due to external factors

 Details of the above risks are as follows:

 Risks Related to our Financial Position and
Need for Capital

 •

 The Medinotec Group of Companies' substantial leverage and debt service obligations could adversely affect the business.

 •

 The Medinotec Group of Companies may need additional financing – any limitation on our ability to obtain such additional financing could have a material adverse effect on the business, financial condition, and results of operations.

 •

 Future changes in financial accounting standards or practices or existing taxation rules or practices may cause adverse or unexpected revenue fluctuations and affect the reported results of operations within The Medinotec Group of companies.

 Risks Related to Our Business Operations

 •

 Consolidation in the healthcare industry could have an adverse effect on revenues and results of operations of the Medinotec Group of Companies.

 •

 Healthcare industry cost-containment measures could result in reduced sales of the Medinotec Group of Companies medical devices and medical device components.

 •

 The continuing development of many of our products and offerings depends on our maintaining strong relationships with healthcare professionals, and these professionals are external to the Medinotec Group of Companies.

 •

 Products in the development pipeline of The Medinotec Group of Companies may not come to market or fail to commercialize.

 •

 The Medinotec Group of Companies operate in a highly competitive industry and may be unable to compete effectively.

 •

 Reduction or interruption in supply or other manufacturing difficulties may adversely affect operations and related product sales within the Medinotec Group of Companies.

 •

 The Medinotec Group of Companies rely on the proper function, security and availability of our IT systems and data to operate the business, and a breach, cyber-attack or other disruption to these systems or data could materially and adversely affect the business, results of operations, financial condition, cash flows, reputation, or competitive position.

 •

 The Medinotec Group of Companies business model is concentrated around developing countries with higher growth rates, although this model also causes forex risk exposure which may cause adverse or unexpected revenue fluctuations and affect the reported results of operations.

 •

 The Medinotec Group of Companies operate in countries where the market is dominated by certain players, and this creates a sales concentration risk which also causes an accounts receivable concentration risk.

 •

 The Medinotec Group of Companies insurance program may not be adequate to cover future losses.

 •

 The Medinotec Group of Companies future growth is dependent upon the development of new products and line extensions, which requires significant research and development, clinical trials and regulatory approvals, all of which are very expensive and time-consuming and may not result in a commercially viable product.

 •

 If the Medinotec Group of Companies fails to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, our ability to operate and investors' views of us.

 •

 We have limited experience in marketing and sales and are in the early stages of building our sales channels in the life science market and internationally

 •

 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.

 •

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

 •

 We have identified material weaknesses in our internal control over financial reporting. Failure to achieve and maintain effective internal controls over financial reporting could adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner, which could have an adverse impact on our business.

 Risks Related to Management, Personnel and Control
Persons

 •

 The Medinotec Group of Companies depends on our senior management personnel and may not be able to retain or replace these individuals or recruit additional personnel, which could harm our business.

 •

 If the Medinotec Group of Companies are unable to find, train and retain key personnel, including new showroom employees that reflect our brand image and embody our culture, we may not be able to grow or sustain our operations.

 •

 The Medinotec Group of Companies' largest shareholder, officer and director, Dr. Gregory Vizirgianakis, has substantial control over us and our policies and will be able to influence corporate matters.

 •

 The Medinotec Group of Companies' officers and directors are located outside of the U.S., so it will be difficult to effect service of process and enforcement of legal judgments upon our officers and directors.

 •

 The Medinotec Group of companies' officers and directors have limited experience managing a public company.

 Risk Associated with Legal and Regulatory Matters

 •

 The Medinotec Group of Companies are subject to extensive medical device regulation that may impede or hinder the approval process for our products and, in some cases, may not ultimately result in approval or may result in the recall or seizure of previously approved products.

 •

 Failure to obtain clearance or authorization for our
 medical devices, or other delays in the development of our medical devices, would adversely affect our ability to grow our business.

 •

 Modifications to our products may require new 510(k)
 clearances, de novo submissions, or pre-market approvals, or may require us to cease marketing or recall the modified products until clearances
 are obtained.

 •

 Failure to obtain clearance or authorization for our
 medical devices, or other delays in the development of our medical devices, would adversely affect our ability to grow our business.

 We may be liable if the FDA or other U.S. enforcement
 agencies determine we have engaged in the off-label promotion of our products or have disseminated false or misleading labeling or promotional
 materials.

 •

 Healthcare policy changes may have a material adverse effect on the Medinotec Group of Companies.

 •

 The Medinotec Group of Companies is subject to environmental laws and regulations and the risk of environmental liabilities, violations, and litigation.

 •

 Claims made against the Medinotec Group of Companies from time to time can result in litigation that could distract management from our business activities and result in significant liability or damage to our brand.

 •

 The Medinotec Group of Companies' failure to
 comply with laws and regulations relating to reimbursement of healthcare goods and services may subject it to penalties and adversely
 impact its reputation, business, results of operations, financial condition, and cash flows.

 •

 Quality problems and product liability claims could lead to recalls or safety alerts, reputational harm, adverse verdicts or costly settlements, and could have a material adverse effect on the business, results of operations, financial condition and cash flows.

 •

 The Medinotec Group of Companies may not be able to protect our intellectual property rights effectively.

 •

 Security breaches, loss of data and other disruptions could also compromise sensitive information related to the business, preventing it from accessing critical information or expose us to liability, which could adversely affect the business and reputation.

 •

 Changes in tax laws or exposure to additional income tax liabilities could have a material impact on the Medinotec Group of Companies, the results of operations, financial conditions and cash flows.

 •

 The failure to comply with anti-corruption laws could materially affect the Medinotec Group of Companies and result in civil and/or criminal sanctions.

 •

 Laws and regulations governing international business operations could adversely impact the Medinotec Group of Companies.

 •

 As an Emerging Growth Company under the Jobs Act, the Medinotec Group of Companies are permitted to rely on exemptions from certain disclosures requirements.

 •

 Because we are a "Smaller Reporting Company," we may take advantage of certain scaled disclosures available to us, resulting in holders of our securities receiving less company information than they would receive from a public company that is not a Smaller Reporting Company.

 Risks Associated with Political Instability
and Regional Issues

 •

 Geopolitical and trade risks due to tariffs and trade
 wars

 •

 South Africa Specific Risk of stable power supply

 •

 South Africa Specific Risk of Political instability may affect the Medinotec Group of Companies ability to operate effectively.

 •

 South Africa Specific Risk that BEE requirements may restrict growth opportunities and limit the Medinotec Group of Companies' ability to attract key talent.

 •

 South Africa Specific Risk that South African authorities may disallow or delay a transfer of funds from South Africa to the United States

 •

 South Africa Specific Risk of being Grey listed by
 the FATF- Financial Action Task Force

 •

 Medinotec faces heightened geopolitical and trade risks due to South African international relations, as potential revocation of AGOA benefits, increased tariffs, and stricter import regulations on South African goods could significantly impact the cost, compliance, and competitiveness of its U.S.-bound medical exports.

 Risks Relating to Our Securities

 •

 If the Medinotec Group of Companies undertakes future offerings of our common stock, shareholders will experience dilution of their ownership percentage.

 •

 If a market for the Medinotec Group of Companies' common stock does not develop, shareholders may be unable to sell their shares.

 •

 The Medinotec Group of Companies' common stock price may be volatile and could fluctuate widely in price which could result in substantial losses for investors.

 •

 If securities analysts do not initiate coverage or continue to cover the Common Stock or publish unfavorable research or reports about the business, this may have a negative impact on the market price of the Common Stock of the Medinotec Group of Companies.

 •

 Because we are subject to the "Penny Stock" rules and our shares are quoted on the over-the-counter bulletin board, the level of trading activity in the Medinotec Group of Companies' stock may be reduced.

 •

 If the Medinotec Group of Companies issues shares of preferred stock with superior rights than the common stock, it could result in a decrease in the value of our common stock and delay or prevent a change in control.

 •

 The Medinotec Group of Companies does not expect to pay dividends in the foreseeable future. Any return on investment may be limited to the value of our common stock.

 •

 Provisions in the Nevada Revised Statutes and our Bylaws could make it very difficult for an investor to bring any legal actions against the Medinotec Group of companies' directors or officers for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors or officers in any such actions.

 Risks Related to our Financial Position and Need
for Capital

 The Medinotec Group of Companies' substantial
leverage and debt service obligations could adversely affect the business.

 As of February 28, 2025, the consolidated Medinotec
Group of Companies had approximately $1,505,047 of current liability obligations and $1,033,097 of long-term liabilities outstanding.

 The long-term debt relates to the non-current
portion of the operating lease liability, deferred tax liabilities as well as an unsecured loan from the related party Minoan
Medical, which was the prior shareholder of DISA Medinotec Proprietary Limited. The Medinotec Group of Companies has a period of 3 years
post the Initial Public Offer ("IPO") date of 31 March 2023 to repay the loan, during these 3 years the loan will carry interest
at the prevailing prime lending rate of the time. The prevailing prime lending rate as of February 28, 2025, in South Africa is 11.00%.

 The interest charged for the year ended
February 28, 2025, for the consolidated Medinotec Group of Companies was $176,416 and a 1% movement in the interest rates constitutes
a value of $16,038 on an annual basis.

 From time to time the Group utilized trade
finance to assist with funding of orders for raw materials with longer lead and shipping times the interest spent on trade finance for
the year ended February 28, 2025 for the consolidated Medinotec Group of Companies was $28,126 and $35,317 for the year ended February
29, 2024. Trade Finance carries a charge of prime plus 1% therefore 12.00%, at February 28, 2025. A 1% movement in the interest rate would
equate to $2,344 for the year ending February 28, 2025. Trade finance is use specific and linked to inventory ordering therefore no forecast
will be disclosed for an expected change in annual utilization and the quarter and six-month sensitivity adjustments are disclosed on
the current orders financed by trade finance at the time.

 As of February 28, 2025, the related party
loan for the consolidated Medinotec Group of Companies had a balance of $940,277 with an interest charge of $141,748 per annum at the
prevailing prime interest rate of 11.00% at that date. A 1% movement in the interest rates constitutes a value of $12,886.

 The Medinotec Group of Companies has
the option to settle earlier, and settlement can be in cash or any form of equivalent. It is currently the intention of management to
settle the loan in equity at some point in the future, since the agreement allows the Medinotec Group Companies to settle the amounts
either in equity or in cash. If equity is used, the impact on cashflow would be zero.

 If we elect to settle the loan in cash: Cash
reserves available in February 2025 in the Consolidated Medinotec Group of Companies were $2,769,686 and the loan account outstanding
at the same time was $940,277. Therefore, if settled today it would constitute 34% of available cash.

 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 at arm's length and justifiable rate that can be applied
to a loan within the borders of the Republic of South Africa.

 We may also incur
additional indebtedness in the future. This could have adverse consequences, including the following:

 •

 making it more difficult for us to satisfy our financial obligations;

 •

 increasing vulnerability to adverse economic, regulatory and industry conditions;

 •

 placing us at a disadvantage to our competitors that are less leveraged;

 •

 limiting the ability to compete and flexibility in planning for, or reacting to, changes in the business and the industry in which we operate;

 •

 limiting the ability to borrow additional funds for working capital, capital expenditures, acquisitions and general corporate or other purposes; and

 •

 exposing us to greater interest rate risk since the interest rate on floating rate borrowings is variable.

 Our debt service obligations require us to use a portion
of the operating cash flow to pay interest and principal on indebtedness instead of for other corporate purposes, including funding the
future expansion of the business, acquisitions, and ongoing capital expenditures, which could impede growth. If operating cash flow and
capital resources are insufficient to service debt obligations, we may be forced to sell assets, seek additional equity or debt financing
or to restructure our debt, which could harm long-term business prospects.

 Our failure to comply with the terms of our indebtedness
could also result in an event of default which, if not cured or waived, could result in the acceleration of all its debt and impact our
ability to operate as a going concern.

 Management evaluated the Company's ability to
continue as a going concern in accordance with ASC 205-40 and concluded that, based on current cash, projected operations, and available
funding, there is no substantial doubt about the Company's ability to meet its obligations for at least 12 months from the issuance
of these financial statements.

 The Medinotec Group of Companies may need additional
financing – any limitation on our ability to obtain such additional financing could have a material adverse effect on the business,
financial condition, and results of operations.

 Our expansion plans may require additional capital
and we may need capital to operate our business in response to circumstances caused by the risks in conducting business in this industry.
The raising of additional capital could result in dilution to stockholders. In addition, there is no assurance that we will be able to
obtain additional capital if we need it, or that if available, it will be available to us on favorable or reasonable terms. Any limitation
on our ability to obtain additional capital as and when needed could have a material adverse effect on the business, financial condition
and results of operations.

 Future changes in financial accounting standards
or practices or existing taxation rules or practices may cause adverse or unexpected revenue fluctuations and affect the reported results
of operations within The Medinotec Group of companies.

 A change in accounting standards or practices or a
change in existing taxation rules or practices can have a significant effect on our reported results and may even affect our reporting
of transactions completed before the change is effective. This also applies to new standards, practices, and rules.

 Changes to existing rules or the questioning of current
practices may adversely affect our reported financial results or the way we conduct our business. The fact that we operate in multiple
territories and have a worldwide footprint heightens this risk in specific territories.

 Risks Relating to Business Operations

 Consolidation in the healthcare industry could
have an adverse effect on revenues and results of operations of the Medinotec Group of Companies.

 Many healthcare companies, including healthcare systems,
distributors, manufacturers, providers, and insurers, are consolidating or have formed strategic alliances. As the healthcare industry
consolidates, competition to provide goods and services to industry participants will become more intense. Further, this consolidation
creates larger enterprises with greater negotiating power, which they can use to negotiate price concessions. If we must reduce our prices
because of industry consolidation, or if we lose customers as a result of consolidation, the business, financial condition, results of
operations and cash flows could be adversely affected.

 Healthcare industry cost-containment measures
could result in reduced sales of the Medinotec Group of Companies medical devices and medical device components.

 Most of our customers and the healthcare providers
to whom our customers supply medical devices, rely on third-party payers, including government programs and private health insurance plans,
to reimburse some or all the cost of the procedures in which medical devices that incorporate components we manufacture or assemble are
used.

 The continuing efforts of governmental authorities,
insurance companies and other payers of healthcare costs to contain or reduce these costs could lead to patients being unable to obtain
approval for payment from these third-party payers.

 If third-party payer payment approval cannot be obtained
by patients, sales of finished medical devices that include our components may decline significantly and our customers may reduce or eliminate
purchases of these components.

 The cost-containment measures that healthcare providers
are instituting, both in the US and outside of the US could harm our ability to operate profitably.

 The continuing development of many of our products
and offerings depends on our maintaining strong relationships with healthcare professionals, and these professionals are external to the
Medinotec Group of Companies.

 If we fail to maintain our working relationships with
healthcare professionals, many of our products may not be launched and marketed in line with the needs and expectations of the professionals
who use and support our products, which could cause a decline in earnings and profitability.

 The research, development, marketing and sale of many
of our new products depends on our maintaining working relationships with healthcare professionals, relying on them to provide considerable
knowledge and experience regarding the development, marketing and sale of products. Physicians assist us as researchers, product consultants,
inventors, and public speakers.

 Any failure to maintain these relationships and expand
our network to include new professionals in the territories we enter will have a negative impact on our financial success.

 Products in the development pipeline of The
Medinotec Group of Companies may not come to market or fail to commercialize.

 We will, at any time, have several innovative products
in the R&D phase. However, some of these projects may fail to come to market for a number of reasons, which could include competitors
releasing a similar product at the same time, a lack of viability in terms of production costs or projected sales, or low/no acceptance
in the market, failures on safety and efficacy measures, among other factors.

 The Medinotec Group of Companies operate in
a highly competitive industry and may be unable to compete effectively.

 We compete in medical markets throughout the world,
which are characterized by rapid changes resulting from technological advances and scientific discoveries. In the product lines in which
we compete, we face competition ranging from large companies with multiple business lines to small, specialized manufacturers that offer
a limited selection of niche products. Development by other companies of new or improved products, processes, technologies, or the introduction
of reprocessed products or generic versions when our proprietary products lose their patent protection may make existing or planned products
less competitive.

 We believe our ability to compete depends upon many
factors both within and beyond our control, including product performance and reliability, product technology and innovation, product
quality and safety, breadth of product lines, product support services, customer support, cost-effectiveness and price, reimbursement
approval from healthcare insurance providers, and changes to the regulatory environment.

 Competition may increase as additional companies enter
our markets or modify their existing products to compete directly with ours. In addition, academic institutions, governmental agencies,
and other public and private research organizations also may conduct research, seek patent protection, and establish collaborative arrangements
for discovery, research, clinical development and marketing of similar products.

 These companies and institutions compete with us in
recruiting and retaining qualified scientific and management personnel, as well as in acquiring necessary product technologies. From time
to time we have lost, and may in the future lose, market share in connection with product problems, physician advisories, safety alerts
and publications about our products, which highlights the importance of product quality, product efficacy and quality systems to the business.

 In the current environment of managed care, consolidation
among healthcare providers, increased competition, and declining reimbursement rates, we have been increasingly required to compete on
the basis of price. Further, our continued growth and success depend on our ability to develop, acquire and market new and differentiated
products, technologies, and intellectual property. As a result, we also face competition for marketing, distribution, and collaborative
development agreements, establishing relationships with academic and research institutions and licenses to intellectual property.

 In order to continue to compete effectively, we must
continue to create, invest in or acquire advanced technology, incorporate this technology into its proprietary products, obtain regulatory
approvals in a timely manner, and manufacture and successfully market our products. Given these factors, we cannot guarantee that we will
be able to compete effectively or continue its current level of success.

 Reduction or interruption in supply or
other manufacturing difficulties may adversely affect operations and related product sales within the Medinotec Group of Companies.

 The supply of products requires timely delivery and
exact planning due to most of our raw material either being manufactured by suppliers or imported. These suppliers/strategic partners
require a sufficient amount of quality components and materials and are highly exacting and complex, due in part to strict regulatory
requirements.

 We have generally been able to obtain adequate supplies
of such finished goods, raw materials, components, and services. However, for reasons of quality assurance, cost effectiveness, or availability,
certain components, raw materials, goods, and services needed to fill our supply chain are obtained from various sole suppliers.

 Although we work closely with our suppliers to ensure
continuity of supply while maintaining high quality and reliability, the supply of these goods, components, raw materials, and services
may be interrupted or insufficient. In addition, due to the stringent regulations and requirements of regulatory agencies, regarding the
manufacture and import/export of our products, we may not be able to quickly establish additional or replacement sources. In addition,
a reduction or interruption in supply, and an inability to develop alternative sources for such supply, could adversely affect our ability
to supply products in a timely or cost-effective manner and could result in lost sales.

 Other disruptions in the supply chain process or product
sales and fulfilment systems for any reason, including equipment malfunction, failure to follow specific protocols and procedures, supplier
facility shut-downs, defective raw materials, wars and conflict, natural disasters such as hurricanes, tornadoes or wildfires, property
damage from riots, and other environmental factors and the impact of epidemics or pandemics, such as Covid-19, and actions by businesses,
communities and governments in response, could lead to launch delays, product shortage, unanticipated costs, lost revenues and damage
to our reputation. For example, in the past we have experienced an information technology ("IT") systems interruption that
affected our customer ordering, distribution, and manufacturing processes. Furthermore, any failure to identify and address manufacturing
problems prior to the release of products to customers could result in quality or safety issues.

 These disruptions are exacerbated by global economic
uncertainty and heightened geopolitical tensions, such as the Russian war on Ukraine, between the United States and China as well as Brexit
and conflicts in the Middle East, which can also have an impact on several factors influencing prices, exchange rates, and interest rates,
all of which can affect our business in turn.

 In addition, several key components are manufactured
or sterilized at a particular facility, with limited alternate facilities. If an event occurs that results in damage to or closure of
one or more of such facilities, such as the damage caused by natural disasters, power outages, civil unrest, and other factors, we may
be unable to manufacture or sterilize the relevant products at the previous levels or at all. Because of the time required to approve
and license a manufacturing or sterilization facility, a third-party may not be available on a timely basis to replace production capacity
in the event manufacturing or sterilization capacity is lost.

 In order to manage any supply chain risk, we have
identified key and crucial components in our manufacturing lines that we deem not to be readily available, and we have vetted 2-3 trusted
suppliers, which we believe mitigates the risk of becoming overly reliant on a specific supplier. Despite this precaution, there is no
assurances that we will be able to secure the materials needed in the event these sources are unable to fulfil orders. Any failure in
the supply chain would result in a lack of inventory and an inability to sell products. For all other non-key materials, we find that
these are readily available from a variety of suppliers and therefore, the risk of sourcing them is minimal or non-existent.

 The Medinotec Group of Companies rely on the
proper function, security and availability of our IT systems and data to operate the business, and a breach, cyber-attack or other disruption
to these systems or data could materially and adversely affect the business, results of operations, financial condition, cash flows, reputation,
or competitive position.

 We are increasingly dependent on sophisticated IT
systems to operate the business, including to process, transmit and store sensitive data, and many of our products and services include
integrated software and IT that collects data regarding patients or connects to its systems.

 Like other multi-national corporations, we could experience,
and in the past have experienced, attempted or actual interference with the integrity of, and interruptions to, our IT systems, as well
as data breaches, such as cyber-attacks, malicious intrusions, breakdowns, interference with the integrity of our products and data or
other significant disruptions.

 Furthermore, we rely on third-party vendors to supply
and/or support certain aspects of our IT systems. These third-party systems could also become vulnerable to cyber-attack, malicious intrusions,
breakdowns, interference, or other significant disruptions, and may contain defects in design or manufacture or other problems that could
result in system disruption or compromise the information security of our own systems.

 In addition, we continue to grow in part through new
business acquisitions and, as a result, may face risks associated with defects and vulnerabilities in their systems, or difficulties or
other breakdowns or disruptions in connection with the integration of the acquisitions into its own IT systems.

 Our worldwide operations mean that we are subject
to laws and regulations, including data protection and cybersecurity laws and regulations, in many jurisdictions. Any data security breaches,
cyber-attacks, malicious intrusions or significant disruptions could result in actions by regulatory bodies and/or civil litigation, any
of which could materially and adversely affect the business, results of operations, financial condition, cash flows, reputation or competitive
position.

 In addition, our IT systems require an ongoing commitment
of significant resources to maintain, protect, and enhance existing systems and develop new systems to keep pace with continuing changes
in information processing technology, evolving legal and regulatory standards, the increasing need to protect patient and customer information,
changes in the techniques used to obtain unauthorized access to data and information systems, and the IT needs associated with changing
products and services.

 There can be no assurance that the process of consolidating,
protecting, upgrading, and expanding systems and capabilities, continuing to build security into the design of products, and developing
new systems to keep pace with continuing changes in information processing technology will be successful or that additional systems issues
will not arise in the future.

 If our IT systems, products or services or sensitive
data are compromised, patients or employees could be exposed to financial or medical identity theft or suffer a loss of product functionality.
We could lose existing customers, have difficulty attracting new customers, have difficulty preventing, detecting, and controlling fraud,
be exposed to the loss or misuse of confidential information, have disputes with customers, physicians, and other healthcare professionals,
suffer regulatory sanctions or penalties under federal laws, state laws, or the laws of other jurisdictions, experience increases in operating
expenses or an impairment in our ability to conduct operations, incur expenses or lose revenues as a result of a data privacy breach,
product failure, IT outages or disruptions, or suffer other adverse consequences including lawsuits or other legal action and damage to
reputation.

 During the years ended February 28, 2025, and February
29, 2024, we did not, to our knowledge, experience any cybersecurity incidents or breaches that materially impacted or are reasonably
likely to materially impact our business, performance or results.

 The Medinotec Group of Companies business model
is concentrated around developing countries with higher growth rates, although this model also causes forex risk exposure which may cause
adverse or unexpected revenue fluctuations and affect the reported results of operations.

 Foreign exchange risk refers to the losses that an
international financial transaction may incur due to currency fluctuations. Also known as currency risk, forex risk and exchange-rate
risk, it describes the possibility that an investment's value may decrease due to changes in the relative value of the involved
currencies. Investors may experience jurisdiction risk in the form of foreign exchange risk. Foreign exchange risk arises when a company
engages in financial transactions denominated in a currency other than the currency where that company is based. Any appreciation/depreciation
of the base currency or the depreciation/appreciation of the denominated currency will affect the cash flows emanating from that transaction.
Foreign exchange risk can also affect investors who trade in international markets, and businesses engaged in the import/export of products
or services to multiple countries.

 Our business of import/exports of raw materials and
goods exposes us to foreign exchange risk by having account payables and receivables affected by currency exchange rates. This risk originates
when a contract between us and our suppliers specifies exact prices for goods or services, as well as delivery dates. If a currency's
value fluctuates between when the contract is signed and the delivery date, it could cause a loss for one of the parties.

 Our business model is concentrated around developing
countries with higher growth rates which causes greater exposure to forex risk which may cause adverse or unexpected revenue fluctuations
and affect the reported results of operations. Usually, the attractive growth rates of these developing countries offset the long term
forex implications of their volatile currencies.

 There are three types of foreign exchange risk that
we are exposed to:

 •

 Transaction risk: This is the risk that we face when we are buying a product from a company located in another country. The price of the product will be denominated in the selling company's currency. If the selling company's currency were to appreciate versus the buying company's currency, then the company doing the buying will have to make a larger payment in its base currency to meet the contracted price.

 •

 Translation risk: A parent company owning a subsidiary in another country could face losses when the subsidiary's financial statements, which will be denominated in that country's currency, is translated back to the parent company's currency.

 •

 Economic risk: Also called forecast risk, this refers to when market value is continuously impacted by an unavoidable exposure to currency fluctuations.

 We continually assess our foreign exchange risks and
implement varying strategies based on the current economic conditions to implement hedging strategies to mitigate that risk. This usually
involves forward contracts, options, and other exotic financial products that, if done properly, can protect us from unwanted foreign
exchange moves during periods of high volatility. We may also impose a strategy of not hedging due to the costs involved outweighing the
benefits. We then leave exposures unhedged until market conditions and costs justify proceeding with a hedging strategy into the future.

 The long-term strategy is to make certain strategic
investments that will generate revenue in first-world, stable currencies to offset the impacts of cost of sales imports in developing
currencies.

 The Medinotec Group of Companies operate in
countries where the market is dominated by certain players and this creates a sales concentration risk which also causes an accounts receivable
concentration risk.

 Accounts receivable concentration risk is the
level of revenue risk a portfolio holds as a result of relying on a small pool of customers. High customer concentration occurs when any
single customer accounts for 20% or more of revenue. Much like anything, there are benefits and risks associated with high customer concentration.

 The Group has historical reliance on two parties
for sales into South Africa: there is reliance on DISA Life Sciences as a customer; and for exports out of South Africa there was historical
reliance on Minoan Medical Proprietary. These relationships provide the Group with more than 100 sales representatives in the South African
Market.

 Sales between DISA Life Sciences and the Medinotec
Group will continue into the future due to the vast distribution arm of DISA Life Sciences within South Africa. The Medinotec Inc. Group's
expectation is to reduce reliance on the South African markets for customers and accounts as the Group endeavors to expand and enter international
first world markets. However, there is no guarantee that our plan will result in a decrease in reliance on DISA Life Sciences for customers
and accounts. As with any expansion effort, there are barriers to entry and outside factors, such as regulatory approval, competition,
among others, that may prevent us from entering such markets. As such, there is a risk that the concentration of customer issue will remain
an ongoing issue unless we are successful in overcoming barriers to entry, competing with those in our markets and achieving regulatory
approvals, none of which can be guaranteed.

 Please refer to the related parties and entities section
for a more detailed discussion on each function and the relationships involved as well as any arm's length disclosures.

 These relationships have the upside of:

 •

 Developing long-term relationships with fewer large customers

 •

 Less contractual agreements and overheads per dollar

 •

 Greater focus on customer service and customer needs

 •

 Work with large customers similarly to partners

 These relationships also pose the following risks
and downsides:

 •

 Loss can devastate revenue, profit, and cash flow

 •

 Holds pricing and negotiating leverage, which can decrease revenue

 •

 Diverts disproportionate amounts of resources away from smaller customers

 •

 Causes difficulty diversifying over time

 •

 Can decrease the value of a company

 Due to the nature of the territories that we operate
in, it will be impossible to eliminate concentration risk. However, we do plan to diversify into a larger product basket and increase
our international footprint, either by growing operations into other territories or alternatively acquiring more business share in other
geographical territories.

 The Medinotec Group of Companies insurance program
may not be adequate to cover future losses.

 We have elected to combine a mix of self-insurance
and insured risks for most of the insurable risks across our company. We made this decision based on cost and availability factors in
the insurance marketplace.

 We continue to maintain a directors and officers liability
insurance policy with third-party insurers that provides coverage for our directors and officers. This policy also covers product liability
claims to a limited extent. We also maintain a detailed stock throughput policy to ensure inventory is ensured against losses and fire
risk. All other assets fall into the category of self-insurance.

 We continue to monitor the insurance marketplace to
evaluate the value of obtaining insurance coverage for other categories of losses in the future. Although we believe, based on historical
loss trends, that our self-insurance program accruals and existing insurance coverage will be adequate to cover future losses, historical
trends may not be indicative of future losses.

 Risks associated with insurance plans include:

 •

 Insurance costs could increase significantly, or the availability of insurance may decrease, either of which could adversely impact our financial condition;

 •

 Deductible or retention amounts could increase, or our coverage could be reduced in the future and to the extent losses occur, there could be an adverse effect on our financial results depending on the nature of the loss and the level of insurance coverage we maintained;

 •

 Insurance may not be available to us at an economically reasonable cost, or our insurance may not adequately cover our liability in connection with claims brought against us; and

 •

 As our business inherently exposes us to claims, we may become subject to claims for which we are not adequately insured. Unanticipated payment of a large claim may have a material adverse effect on our business.

 The absence of sufficient third-party insurance coverage
for other categories of losses increases our exposure to unanticipated claims and these losses could have a materially adverse impact
on the business, results of operations, financial condition, and cash flows.

 The Medinotec Group of Companies future growth
is dependent upon the development of new products and line extensions, which requires significant research and development, clinical trials,
and regulatory approvals, all of which are very expensive and time-consuming and may not result in a commercially viable product.

 In order to develop new products and improve current
product offerings through our strategic partnerships with other principals, we focus our research and development programs largely on
the development of, or obtaining the exclusive distribution rights to, next-generation and technology offerings across multiple programs
and opportunities.

 As a part of the regulatory process of obtaining marketing
clearance from the respective countries' regulators for new products, we and our strategic partners conduct and participate in numerous
clinical trials with a variety of study designs, patient populations and trial endpoints. Unfavorable or inconsistent clinical data from
existing or future clinical trials conducted by us or partners related to us, by our competitors or by third parties, or the market's
perception of this clinical data, may adversely impact our ability to obtain product approvals from the regulators, our position in, and
share of, the markets in which we participate and our business, financial condition, results of operations or future prospects.

 If the Medinotec Group of Companies fails to
maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which
could harm our operating results, our ability to operate and investors' views of us.

 Our failure to maintain the effectiveness of our internal
controls in accordance with the requirements of best practices could have a material adverse effect on the business. It could lose investor
confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on the price of the Common Stock.
In addition, if our efforts to comply with new or changed laws, regulations, and standards differ from the activities intended by regulatory
or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us, and the
business may be harmed.

 We have limited experience in marketing and
sales and are in the early stages of building our sales channels in the life science market and internationally.

 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 our key markets. During 2025, 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 considering 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.

 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; and

 •

 capacity shortages.

 We distribute commodity medical products on
behalf of multinational manufacturers 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.

 We have identified material weaknesses in our
internal control over financial reporting. Failure to achieve and maintain effective internal controls over financial reporting could
adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner, which could
have an adverse impact on our business.

 Since becoming a public company, ensuring that we
have adequate internal financial and accounting controls and procedures in place to produce accurate financial statements on a timely
basis has been, and will continue to be, costly and a time-consuming effort. In addition, the rapid changes in our operations and corporate
structure have created a need for additional resources within the accounting and finance functions in order to produce timely financial
information and to ensure the level of segregation of duties customary for a U.S. public company.

 Our management is responsible for establishing and
maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles
in the United States ("GAAP"). Our management is also required, on a quarterly basis, to evaluate the effectiveness of our
internal controls and to disclose any changes and material weaknesses identified. 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
in our annual or interim consolidated financial statements might not be prevented or detected on a timely basis, as occurred with our
interim consolidated financial statements in 2023, which were then restated and corrected in amended Quarterly Reports on Form 10-Q prior
to the filing of this Annual Report on Form 10-K. As described in Item 9A of this Annual Report on Form 10-K, there were several material
weaknesses identified in our internal control over financial reporting.

 We are working to remediate our material weaknesses
as soon as practicable. Our remediation plan, which is continuing to be developed, can only be accomplished over time, and these initiatives
may not accomplish their intended effects. Failure to maintain our internal control over financial reporting could adversely impact our
ability to report our financial position and results from operations on a timely and accurate basis or result in misstatements. Likewise,
if our financial statements are not filed on a timely basis, we could be subject to regulatory actions, legal proceedings or investigations
by FINRA, the SEC or other regulatory authorities, which could result in a material adverse effect on our business and/or we may not be
able to maintain compliance with certain of our agreements. Ineffective internal controls could also cause investors to lose confidence
in our financial reporting, which could have a negative effect on our stock price, business strategies and ability to raise capital.

 Even after the remediation of our material weaknesses,
our management does not expect that our internal controls will ever prevent or detect all errors and all fraud. A control system, no matter
how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be
met. No evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control
issues and instances of fraud, if any, within the business will have been detected.

 Risks Related to Management, Personnel and Control
Persons

 The Medinotec Group of Companies depends on
our senior management personnel and may not be able to retain or replace these individuals or recruit additional personnel, which could
harm our business.

 Our future success is substantially dependent on the
continued service of Dr. Gregory Vizirgianakis, our Founder, President, Chief Executive Officer and a member of our board of directors,
and Pieter van Niekerk, our Chief Financial Officer, Treasurer and a member of our board of directors. Dr. Vizirgianakis and Mr. van Niekerk
have extensive experience both with our company and in our industry and are familiar with our business, systems, and processes. Their
loss would be catastrophic to our product offerings and ability to manage our business effectively, as we will likely not be able to find
suitable individuals to replace them on a timely basis or at all.

 If the Medinotec Group of Companies are unable
to find, train and retain key personnel, including new showroom employees that reflect our brand image and embody our culture, we may
not be able to grow or sustain our operations.

 We depend on several key management, executive, sales
and marketing, and technical personnel. The loss of the services of one or more key employees could delay the achievement of business
objectives. Our success will also depend on our ability to attract and retain additional highly qualified executives, management, sales
and marketing and technical personnel to meet its growth goals. We further face intense competition for qualified personnel, many of whom
are often subject to competing employment offers, and we do not know whether we will be able to attract and retain such personnel.

 Our success depends in large part on the continued
service of the senior management team. In particular, the continued service of this group of individuals is critical to our vision, strategic
direction, culture, products, and business plan. We do not maintain key-man insurance for any of the senior management team, and thus
the loss of any of our executives, even temporarily, or any other member of senior management, could harm the business.

 The Medinotec Group of Companies' largest
shareholder, officer and director, Dr. Gregory Vizirgianakis, has substantial control over us and our policies and will be able to influence
corporate matters.

 Dr. Gregory Vizirgianakis, our Founder, President,
Chief Executive Officer and a member of our board of directors, and his brother, Stavros Vizirgianakis, also a member of our board of
directors, together control our company with an 81% vote on all matters regarding shareholder approval by virtue of his ownership in our
common stock.

 Gregory and Stavros Vizirgianakis have not agreed
to vote their shares together. If they decide to vote together on any matter, they are able to exercise significant influence over our
company, including the election of directors, the approval of significant corporate transactions, and any change of control of our company.
They could prevent transactions, which might be in the best interests of the other shareholders. Their interests may not necessarily be
in the best interests of the shareholders in general. The rest of our shareholders will be considered minority shareholders and these
will have little say in the direction of the Company as a result of their holdings.

 The Medinotec Group of Companies' officers
and directors are located outside of the U.S., so it will be difficult to effect service of process and enforcement of legal
judgments upon our officers and directors.

 Our officers and directors are located outside of
the United States and reside in South Africa. As a result, it may be difficult to effect service of process within the
United States and enforce judgments of the US courts obtained against our executive officers and directors. Particularly, our shareholders
may not be able to:

 •

 Effect service of process in the U.S. on any of our officers and directors;

 •

 Enforce judgments obtained in U.S. courts against our officers and directors based upon the civil liability provisions of the U.S. federal securities laws;

 •

 Enforce, in a court outside of the U.S., judgments of U.S. courts based on the civil liability provisions of the U.S. federal securities laws; and

 •

 Bring an original action in a court in South Africa to enforce liabilities against any of our officers and directors based upon the U.S. federal securities laws.

 The Medinotec Group of companies' officers
and directors have limited experience managing a public company.

 Our officers and directors have limited experience
managing a public company. Consequently, we may not be able to raise any funds or run our public company successfully. Our executive officer's
and director's lack of experience of managing a public company could cause you to lose some or all of your investment.

 Risk Associated with Legal and Regulatory Matters

 The Medinotec Group of Companies are subject
to extensive medical device regulation that may impede or hinder the approval process for our products and, in some cases, may not ultimately
result in approval or may result in the recall or seizure of previously approved products.

 The medical technology industry is regulated extensively
by governmental authorities, principally the FDA, and state regulatory agencies with oversight of various aspects of drug and device distribution,
sale, and use. The regulations are very complex, have become more stringent over time, and are subject to rapid change and varying interpretations.
Regulatory restrictions or changes could limit our ability to carry on or expand our operations or result in higher than anticipated costs
or lower than anticipated sales. The FDA and other federal and state governmental agencies regulate numerous elements of our business,
including:

 •

 product design and development;

 •

 pre-clinical and clinical testing and trials;

 •

 product safety;

 •

 establishment registration and product listing;

 •

 labeling and storage;

 •

 marketing, manufacturing, sales, and distribution;

 •

 pre-market clearance or approval;

 •

 servicing and post-marketing surveillance, including reporting of deaths or serious injuries and malfunctions that, if they recurred, could lead to death or serious injury;

 •

 advertising and promotion;

 •

 post-market approval studies;

 •

 product import and export; and

 •

 recalls and field-safety corrective actions.

 Before we can market or sell a new regulated product
or a significant modification to an existing product in the United States, we must obtain either clearance under Section 510(k) of the
FDCA, grant of a de novo classification request, or approval of a pre-market approval, or PMA, application from the FDA, unless an exemption
from pre-market review applies. In the 510(k) clearance process, the FDA must determine that a proposed device is "substantially
equivalent" to a legally marketed "predicate" device (in most cases Class II devices, with a few exceptions), with respect
to intended use, technology and safety and effectiveness, in order to clear the proposed device for marketing. Class III devices approved
under the PMA process cannot serve as predicates. Clinical data are sometimes required to support substantial equivalence. In the de novo
process, the FDA must determine that general and special controls are sufficient to provide reasonable assurance of the safety and effectiveness
of a device, which is low to moderate risk and has no predicate (in other words, the applicant must justify the "down-classification"
to Class I or II for a new product type that would otherwise automatically be placed into Class III, but is lower risk). The PMA process
requires an applicant to demonstrate the safety and effectiveness of the device based on extensive data, including, but not limited to,
technical, preclinical, clinical trial, manufacturing, and labeling data.

 The PMA process is typically required for devices
that are deemed to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices. Products that are approved
through a PMA application generally need FDA approval before they can be modified. Similarly, some modifications made to products cleared
through a 510(k) may require a new 510(k). The 510(k), de novo, and PMA processes can be expensive and lengthy and require the payment
of significant fees, unless an exemption applies. The FDA's 510(k) clearance process usually takes from 3 to 12 months, but may
take longer. The FDA's stated goal is to review de novo classification requests within 150 days, 50% of the time, but in reality
the process for many applicants generally takes even longer, up to a year or more. The process of obtaining a PMA is much more costly
and uncertain than the 510(k) clearance process and generally takes from one to three years, or longer, from the time the application
is submitted to the FDA until an approval is obtained. The process of obtaining regulatory clearances, approvals, and emergency use authorization
to market a medical device can be costly and time-consuming, and we may not be able to obtain these clearances, approvals, or authorizations
on a timely basis, or at all for our proposed products.

 If the FDA requires us to go through a lengthier,
more rigorous examination for marketing authorization of our medical devices or future modifications to our medical devices than we had
expected, our product introductions or modifications could be delayed or canceled, which could cause our sales to decline or to not increase
in line with our forecasts. In addition, the FDA may determine that future products will require the more costly, lengthy, and uncertain
PMA process. Although we do not market any devices under PMA, the FDA may demand that we obtain a PMA prior to marketing certain of our
future products. Further, even with respect to those future products where a PMA is not required, we cannot assure you that we will be
able to obtain the 510(k) clearances with respect to those products.

 The FDA can delay, limit, or deny clearance, approval,
or authorization of a device for many reasons, including:

 •

 we may not be able to demonstrate that our products are safe and effective for their intended users;

 •

 the data from our clinical trials may be insufficient to support clearance, approval, or authorization; and

 •

 the manufacturing process or facilities we use may not meet applicable requirements.

 In addition, the FDA may change its clearance and
approval policies, adopt additional regulations or revise existing regulations, or take other actions which may prevent or delay approval
or clearance of our products under development. Any delay in, or failure to obtain or maintain, clearance or approval for our products
under development could prevent us from generating revenue from these products and adversely affect our business operations and financial
results. Additionally, the FDA and other regulatory authorities have broad enforcement powers. Regulatory enforcement or inquiries, or
other increased scrutiny of us, could dissuade some customers from using our products and adversely affect our reputation and the perceived
safety and efficacy of our product. Failure to comply with applicable regulations could jeopardize our ability to sell our products and
result in enforcement actions such as fines, civil penalties, injunctions, warning letters, recalls of products, delays in the introduction
of products into the market, refusal of the FDA or other regulators to grant future clearances or approvals, and the suspension or withdrawal
of existing clearances or approvals by the FDA or other regulators. Any of these sanctions could result in higher than anticipated costs
or lower than anticipated sales and negatively impact our reputation, business, financial condition and operating results. Furthermore,
any operations or product applications outside of the United States will subject us to various additional regulatory and legal requirements
under the applicable laws and regulations of the international markets we enter. These additional regulatory requirements may involve
significant costs and expenditure and, if we are not able to comply with any such requirements, our international expansion and business
could be significantly harmed.

 Failure to obtain clearance or authorization
for our medical devices, or other delays in the development of our medical devices, would adversely affect our ability to grow our business.

 Commercialization of our medical devices may require
an Emergency Use Authorization (EUA), FDA clearance of a 510(k) premarket notification submission, or authorization of a de novo submission.
The process for submitting and obtaining FDA clearance of a 510(k), authorization of a de novo submission, or EUA can be expensive and
lengthy. The FDA's review process can take several months or longer, and we may not be able to obtain FDA clearance, de novo authorization,
or Emergency use Authorization for our medical devices on a timely basis, if at all. The FDA's refusal of, or any significant delays
in receiving 510(k) clearance, de novo authorization, or Emergency use Authorization of our medical devices, would have an adverse effect
on our ability to expand our business.

 FDA approval has been granted for the Trachealator
following the 510(k) substantially equivalence process for Class II medical devices. We have no such FDA approval with respect to the
rest of our medical devices and we have not performed any clinical testing of our medical devices, which will likely be required before
the device can be marketed. Even if a clinical trial is completed, there can be no assurance that the data generated during a clinical
trial will meet the safety and effectiveness endpoints or otherwise produce results that will lead the FDA to grant marketing clearance,
approval, or authorization. In addition, any other delays in the development of our medical devices, for example, unforeseen issues during
product validation, would have an adverse effect on our ability to commercialize our medical devices.

 Modifications to our products may require new
510(k) clearances, de novo submissions, or pre-market approvals, or may require us to cease marketing or recall the modified products
until clearances are obtained.

 FDA approval has been granted for the Trachealator
following the 510(k) substantially equivalence process for Class II medical devices. Any modification to a 510(k)-cleared device that
could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, design, or manufacture,
requires a new 510(k) clearance or, possibly, a de novo or PMA. The FDA requires every manufacturer to make this determination in the
first instance, and provides some guidance on decision making, but the FDA may review any manufacturer's decision at any time. The
FDA may not agree with our decisions regarding whether new clearances or approvals are necessary. If the FDA disagrees with our determination
and requires us to submit new 510(k) notifications, de novo submissions or PMAs for modifications to our previously cleared or approved
products for which we have concluded that new clearances or approvals are unnecessary, we may be required to cease marketing or to recall
the modified product until we obtain clearance or approval, and we may be subject to significant regulatory fines or penalties.

 We may be liable if the FDA or other U.S. enforcement
agencies determine we have engaged in the off-label promotion of our products or have disseminated false or misleading labeling or promotional
materials.

 Our promotional materials and training methods must
comply with FDA and other applicable laws and regulations, including laws and regulations prohibiting marketing claims that promote the
off-label use of our products or that make false or misleading statements. Healthcare providers may use our products off-label, as the
FDA does not restrict or regulate a physician's choice of treatment within the practice of medicine. FDA also could conclude that
a performance claim is misleading if it determines that there are inadequate non-clinical and/or clinical data supporting the claim. If
the FDA determines that our promotional materials or training promote of an off-label use or make false or misleading claims, it could
request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance
of an untitled letter, a warning letter, injunction, seizure, civil fines, and criminal penalties. It is also possible that other federal,
state, or foreign enforcement authorities might take action if they determine that our promotional or training materials promote an unapproved
use or make false or misleading claims, which could result in significant fines or penalties. Although our policy is to refrain from statements
that could be considered off-label promotion of our products or false or misleading, the FDA or another regulatory agency could disagree.
Violations of the FDCA may also lead to investigations alleging violations of federal and state health care fraud and abuse laws, as well
as state consumer protection laws, which may lead to costly penalties and may adversely impact our business. Recent court decisions have
impacted FDA's enforcement activity regarding off-label promotion in light of First Amendment Considerations; however, there are
still significant risks in this area, in part due to the potential for False Claims Act exposure. In addition, the off-label use of our
products may increase the risk of product liability claims. Product liability claims are expensive to defend and could result in
substantial damage awards against us and harm our reputation.

 Healthcare policy changes may have a material
adverse effect on the Medinotec Group of Companies.

 In response to perceived increases in healthcare costs
in recent years, there have been and continue to be proposals by several governments, regulators, and third-party payers globally, including
the US federal and state governments, to control these costs and, more generally, to reform healthcare systems.

 Certain of these proposals could, among other things,
limit the prices we are able to charge for products or the amounts of reimbursement available for our products, and could also limit the
acceptance and availability of such products.

 The adoption of some or all of these proposals could
have a material adverse effect on the business, results of operations, financial condition and cash flows. If we experience decreasing
prices for our goods and services and we are unable to reduce expenses, there may be a materially adverse effect on the business, results
of operations, financial condition and cash flows.

 The Medinotec Group of Companies is subject
to environmental laws and regulations and the risk of environmental liabilities, violations, and litigation.

 We are subject to numerous US and non-US environmental,
health and safety laws and regulations concerning, among other things, the health and safety of employees; the generation, storage, use
and transportation of hazardous materials; emissions or discharges of substances into the environment; investigation and remediation of
hazardous substances or materials at various sites; chemical constituents in medical products; and end-of-life disposal and take-back
programs for medical devices.

 Our operations and those of certain third-party suppliers
involve the use of substances subject to these laws and regulations, primarily those used in manufacturing and sterilization processes.
If we or our suppliers violate these environmental laws and regulations, facilities could be shut down and violators could be fined, criminally
charged, or otherwise sanctioned.

 Furthermore, environmental laws outside of the US
are becoming more stringent, resulting in increased costs and compliance burdens. Certain environmental laws also assess liability on
current or previous owners or operators of real property for the costs of investigation, removal or remediation of hazardous substances
or materials at their properties or at properties which they have disposed of hazardous substances. In addition to clean-up actions brought
by governmental authorities, private parties could bring personal injury or other claims due to the presence of, or exposure to, hazardous
substances. The ultimate cost of site clean-up and timing of future cash outflows is difficult to predict, given the uncertainties regarding
the extent of the required clean-up, the interpretation of applicable laws and regulations, and alternative clean-up methods.

 The costs of complying with current or future environmental
protection and health and safety laws and regulations, or liabilities arising from past or future releases of, or exposures to, hazardous
substances, may exceed our estimates, or have a material adverse effect on the business, results of operations, financial conditions,
and cash flows.

 Finally, in some jurisdictions around the world, culture
and practice encourages reuse of disposable products when the product is clearly labelled for single use. Such reuse may expose us to
liability in these jurisdictions.

 Claims made against the Medinotec Group of Companies
from time to time can result in litigation that could distract management from our business activities and result in significant liability
or damage to our brand.

 As a company with expanding operations, we increasingly
face the risk of litigation and other claims against us. We have no such claims at present. Litigation and other claims may arise in the
ordinary course of our business and include employee claims, commercial disputes, landlord-tenant disputes, intellectual property issues,
product-oriented allegations and slip and fall claims. These claims can raise complex factual and legal issues that are subject to risks
and uncertainties and could require significant management time. Litigation and other claims against us could result in unexpected expenses
and liabilities, which could materially affect our operations and our reputation.

 In addition, the medical device industry is characterized
by extensive litigation and, from time to time, we are the subject of various claims. Regardless of the outcome, such claims are expensive
to defend and divert management and operating personnel from other business issues. A successful claim or claims against us could result
in payment of significant monetary damages and/or injunctive relief.

 The Medinotec Group of Companies' failure
to comply with laws and regulations relating to reimbursement of healthcare goods and services may subject it to penalties and adversely
impact its reputation, business, results of operations, financial condition and cash flows.

 Our devices, products and therapies are purchased
principally by hospitals or physicians that typically bill various third-party payers, such as governmental healthcare programs, private
insurance plans and managed care plans, for the healthcare services provided to their patients.

 The ability of customers to obtain appropriate reimbursement
for products and services from third-party payers is critical because it affects which products customers purchase and the prices they
are willing to pay. As a result, our devices, products, and therapies are subject to regulation regarding quality and cost for reimbursement
and regulation of health goods and services, including laws and regulations related to kickbacks, false claims, self-referrals and healthcare
fraud.

 Many territories have similar laws that apply to reimbursement
by state and other funded programs as well as in some cases to all payers. In certain circumstances, insurance companies attempt to bring
a private cause of action against a manufacturer for causing false claims.

 In addition, our strategic investments position the
company as a manufacturer of FDA-approved devices reimbursable by federal healthcare programs. We are thus subject to the Physician Payments
Sunshine Act, which requires us to annually report certain payments and other transfers of value our company makes to US-licensed physicians
or US teaching hospitals. Any failure to comply with these laws and regulations could subject us or our officers and employees to criminal
and civil financial penalties.

 We are also subject to risks relating to changes in
government and private medical reimbursement programs and policies, and changes in legal regulatory requirements in the US and around
the world. Implementation of further legislative or administrative reforms to these reimbursement systems, or adverse decisions relating
to coverage of / or reimbursement for our products by administrators of these systems, could have an impact on the acceptance of and demand
for our products and the prices that customers are willing to pay for them.

 Quality problems and product liability claims
could lead to recalls or safety alerts, reputational harm, adverse verdicts or costly settlements, and could have a material adverse effect
on the business, results of operations, financial condition and cash flows.

 Quality is extremely important to us and our customers
due to the impact of our products on patients, and the serious and potentially costly consequences of product failure. We are thus exposed
to potential product liability risks that are inherent in the design, manufacture, and marketing of medical devices.

 In addition, many products are used
in intensive care settings with seriously ill patients. Component failures, manufacturing nonconformance, design defects, off-label use,
or inadequate disclosure of product-related risks or product related information with respect to our products, if they were to occur,
could result in an unsafe condition or injury to, or death of, a patient.

 This could lead to recall of, or issuance of a safety
alert relating to, our products, and could result in product liability claims and lawsuits, including class actions, which could ultimately
result, in certain cases, in the removal from the body of such products and claims regarding costs associated therewith. Due to the strong
brand recognition of Medinotec name and our brands, a material adverse event involving one of our products could result in reduced market
acceptance and demand for all products within that brand and could harm our reputation and ability to market products in the future.

 Should we fall short of these standards and our products
become subject to recalls or safety alerts, our reputation could be damaged, we could lose customers and revenue and results of operations
could decline. Our success also depends on the ability to manufacture to exact specifications for precision engineered components, sub-assemblies
and finished devices from multiple materials. If components fail to meet these standards or fail to adapt to evolving standards, our reputation,
competitive advantage, and market share could be harmed.

 In certain situations, we may undertake a voluntary
recall of products or temporarily shut down production lines based on performance relative to our own internal safety and quality monitoring
and testing data. Any of the foregoing problems, including future product liability claims or recalls, regardless of their ultimate outcome,
could harm our reputation and have a material adverse effect on the business, results of operations, financial condition, and cash flows.

 The Medinotec Group of Companies may not be
able to protect our intellectual property rights effectively.

 Patents, trademarks and other intangible proprietary
rights are and will be essential to the business and our ability to compete effectively with other companies. During normal day-to-day
trade, we also rely on trade secrets, know-how, continuing technological innovations, strategic alliances, and licensing opportunities
to develop, maintain and strengthen our competitive position.

 We pursue a policy of obtaining patent protection
in both the US and overseas for patentable subject matter of our proprietary devices and attempt to review third-party patents and patent
applications to the extent publicly available to develop an effective patent strategy, avoid infringement of third-party patents, identify
licensing opportunities and monitor the patent claims of others.

 We also operate in an industry that is susceptible
to significant intellectual property litigation. This litigation is expensive, complex, and lengthy and its outcome is difficult to predict.
Future patent litigation may result in significant royalty or other payments or injunctions that can prevent the sale of products and
may significantly divert the attention of our technical and management personnel.

 In addition, we may have to take legal action in the
future to protect our patents, trade secrets, or know-how or to assert our intellectual property rights against claimed infringement by
others. Any such legal action could be costly and time consuming and no assurances can be made that any lawsuit will be successful.

 The invalidation of key patents or proprietary rights
that we own, or an unsuccessful outcome in lawsuits to protect intellectual property, could have a material adverse effect on the business,
financial condition, and results of operations. In the event that the right to market any of our products is successfully challenged,
or if we fail to obtain a required license or are unable to design around a patent, the business, financial condition, and results of
operations could be compromised.

 Security breaches, loss of data and other disruptions
could also compromise sensitive information related to the business, preventing it from accessing critical information or expose us to
liability, which could adversely affect the business and reputation.

 In the ordinary course of business, we collect and
store sensitive data, including patient health information, personally identifiable information about employees, intellectual property,
and proprietary business information. We manage and maintain applications and data utilizing on-site and off-site systems. These applications
and data encompass a wide variety of business-critical information including research and development information, commercial information
and business and financial information.

 The secure processing, storage, maintenance, and
transmission of this critical information is vital to operations and business strategy, and we devote resources to protecting such information.
Although we take measures to protect sensitive information from unauthorized access or disclosure, our IT and infrastructure may be vulnerable
to attacks by hackers, viruses, breaches, or interruptions due to employee error or malfeasance, terrorist attacks, hurricanes, fire,
flood, other natural disasters, power loss, computer systems failure, data network failure, internet failure, or lapses in compliance
with privacy and security mandates. Any such virus, breach or interruption could compromise our networks and the information stored there
could be accessed by unauthorized parties, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information
could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, government enforcement
actions and regulatory penalties.

 C hanges in tax laws or
exposure to additional income tax liabilities could have a material impact on the Medinotec Group of Companies, the results of operations,
financial conditions and cash flows.

 We are subject to income taxes, as well as non-income-based
taxes, in South Africa, and other jurisdictions in which we operate, as well as jurisdictions such as the United States, in which we intend
to have operations. The tax laws in these could change on a prospective or retroactive basis, and any such changes could adversely affect
us and our effective tax rate.

 Taxation regulation in territories around the world
can also change very quickly, which may mean that all the implications for businesses may not have been fully thought through by the regulating
authorities before final guidelines and laws are issued. Furthermore, any changes made by tax authorities, together with other legislative
changes, to the mandatory sharing of company information (financial and operational) with tax authorities on both a local and global basis,
could lead to disagreements between jurisdictions with respect to the proper allocation of profits between such jurisdictions. We therefore
continuously monitor changes to tax regulation and double tax treaties between the territories in which we operate. We also maintain a
comprehensive transfer pricing policy to govern the flow of funds between various tax territories.

 We are further subject to ongoing tax audits in the
various jurisdictions in which we operate. We regularly assess the likely outcomes of these audits to determine the appropriateness of
our tax provisions. However, there can be no assurance that we will accurately predict the outcomes of these audits, which could have
a material impact on the business, financial condition, results of operations, and cash flows.

 While we have recorded reserves for potential payments
to various tax authorities related to uncertain tax positions, the calculation of such tax liabilities involves the application of complex
tax regulations in many jurisdictions. Therefore, any dispute with a tax authority may result in payment that is significantly different
from our estimates. If the payment proves to be less than the recorded reserves, the reversal of the liabilities would generally result
in tax benefits being recognized in the period when we determine the liabilities to be no longer necessary. Conversely, if the payment
proves to be more than the reserves, we would incur additional charges, and these could have a materially adverse effect on the business,
financial condition, results of operations, and cash flows.

 The failure to comply with anti-corruption laws
could materially affect the Medinotec Group of Companies and result in civil and/or criminal sanctions.

 FCPA and similar anticorruption laws in other jurisdictions
generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining
or retaining business. Because of the predominance of government-administered healthcare systems in many jurisdictions around the world,
many of our customer relationships are with governmental entities and are therefore potentially subject to such laws.

 We also participate in public-private partnerships
and other commercial and policy arrangements with governments around the globe. Global enforcement of anti-corruption laws has increased
in recent years, including investigations and enforcement proceedings leading to assessment of significant fines and penalties against
companies and individuals.

 Our international operations create a risk of unauthorized
payments or offers of payments by one of our employees, consultants, sales agents, or distributors. The business maintains policies and
programs to implement safeguards to educate employees and agents on these legal requirements, and to prevent and prohibit improper practices.
However, existing safeguards and any future improvements may not always be effective, and employees, consultants, sales agents, or distributors
may engage in conduct for which we could be held responsible.

 In addition, regulators could seek to hold us liable
for conduct committed by companies in which we invest or that we acquire. Any alleged or actual violations of these regulations may subject
us to government scrutiny, criminal or civil sanctions and other liabilities, including exclusion from government contracting, and could
disrupt the business, adversely affect our reputation and result in a material adverse effect on the business, results of operations,
financial condition, and cash flows.

 Laws and regulations governing international
business operations could adversely impact the Medinotec Group of Companies.

 The US Department of the Treasury's Office of
Foreign Assets Control ("OFAC"), and the Bureau of Industry and Security at the US Department of Commerce ("BIS")
administer certain laws and regulations that restrict US persons and, in some instances, non-US persons, in conducting activities, transacting
business with or making investments in certain countries, governments, entities and individuals subject to US economic sanctions.

 Our international operations subject us to these laws
and regulations, which are complex, restrict business dealings with certain countries, governments, entities, and individuals, and are
constantly changing. Further restrictions may be enacted, amended, enforced, or interpreted in a manner that materially impacts our operations.
From time to time, certain subsidiaries have limited business dealings in countries subject to comprehensive sanctions.

 Certain of our subsidiaries sell medical devices,
and may provide related services, to distributors and other purchasing bodies in such countries. These business dealings represent an
insignificant amount of our consolidated revenues and income but expose us to a heightened risk of violating applicable sanctions regulations.
Violations of these regulations are punishable by civil penalties, including fines, denial of export privileges, injunctions, asset seizures,
debarment from government contracts and revocations or restrictions of licenses, as well as criminal fines and imprisonment.

 We have established policies and procedures designed
to assist with compliance with such laws and regulations. However, there can be no assurance that these will prevent us from violating
these regulations in every transaction in which we may engage. As such a violation could adversely affect our reputation, business, financial
condition, results of operations and cash flows.

 As an Emerging Growth Company under the Jobs
Act, the Medinotec Group of Companies are permitted to rely on exemptions from certain disclosures requirements.

 We qualify as an "emerging growth company"
under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long
as we are an emerging growth company, we will not be required to:

 •

 have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

 •

 comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

 •

 submit certain executive compensation matters to shareholder advisory votes, such as "say-on-pay" and "say-on-frequency;" and

 •

 disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive's compensation to median employee compensation.

 In addition, Section 107 of the JOBS Act also provides
that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities
Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain
accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits
of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such
new or revised accounting standards.

 We will remain an "emerging growth company"
for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed
$1 billion, (ii) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange
Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the
last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion
in non-convertible debt during the preceding three year period.

 Until such a time, however, we cannot predict if investors
will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive
as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

 Because we are a "Smaller Reporting Company,"
we may take advantage of certain scaled disclosures available to us, resulting in holders of our securities receiving less company information
than they would receive from a public company that is not a Smaller Reporting Company.

 We are a "smaller reporting company" as
defined in the Exchange Act. As a smaller reporting company, we may take advantage of certain of the scaled disclosures available to smaller
reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) our voting and non-voting common
stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter, or (ii) our annual
revenue is less than $100 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates
is less than $700 million measured on the last business day of our second fiscal quarter. To the extent we take advantage of any reduced
disclosure obligations, it may make it harder for investors to analyze the Company's results of operations and financial prospectus
in comparison with other public companies.

 Risks Associated with Political Instability and
Regional Issues

 Geopolitical and Trade Risks due to tariffs
and trade wars

 Medinotec Inc. operates in a challenging geopolitical
and trade environment that exposes the company to several risks that could adversely affect our financial performance and operations.

 The U.S. has recently impos ed
significant tariffs on imports from South Africa and other nations, with tariffs ranging up to 30% on a variety of goods, including
machinery, vehicles, and precious metals. This has raised concerns regarding the future of the African Growth and Opportunity Act (AGOA),
which has previously provided preferential trade benefits, including duty-free access to the U.S. market for South African goods. Should
these benefits be revoked, we could face increased export costs and reduced demand for our products in the U.S., which represents a significant
market for our business.

 At the May 21, 2025
Oval Office meeting, U.S. President Donald J. Trump and South African President Cyril Ramaphosa met, but no changes to the imposed tariffs
were announced.

 While the South African
government is exploring the possibility of negotiating a bilateral trade agreement with the U.S., the outcome and timeline of these discussions
are uncertain. As a result, the tariffs and the potential loss of AGOA benefits could significantly disrupt our U.S. market strategy
and increase the costs of our exports to the U.S.

 The current global trade tensions, including the tariffs
imposed by the U.S., have led to a ripple effect in other markets, including Europe. European governments may respond with retaliatory
tariffs or other trade measures, potentially increasing the cost of medical device products we distribute from European suppliers. These
price increases could have an adverse impact on our business, as we may be unable to offset the rising costs without passing them onto
customers. Since we are locked into agreements with our suppliers for the distribution of their products in South Africa, our ability
to mitigate these cost increases is limited.

 South Africa is experiencing significant political
instability, with tensions rising within the ruling coalition government. The potential collapse of the government of national unity and
the uncertainty surrounding fiscal policies, such as increases in VAT or other tax rates, could disrupt business operations. In particular,
such instability may lead to regulatory changes, higher operating costs, or interruptions to our manufacturing activities in South Africa.

 While Medinotec Inc. cannot directly influence these
political developments, we are closely monitoring the situation and assessing potential risks to our operations. We are also considering
contingency plans to manage any disruptions that could arise from governmental changes or civil unrest.

 While we are not large enough to directly engage with
policymakers, we are actively monitoring developments related to trade tariffs and political instability in South Africa. We will continue
to adapt our strategies based on emerging trends and adjust our risk management approach accordingly.

 For our self-manufactured products, we are actively
exploring options to diversify our supply chain, which will help reduce exposure to any disruptions caused by tariff changes or political
instability. However, for our agency business, where we distribute products for multinational medical device companies, we are reliant
on our suppliers and their pricing decisions, which limit our ability to mitigate the impact of potential tariff-induced cost increases.

 Despite these efforts, the interconnected nature of
these risks means that their cumulative impact could be more significant than anticipated, potentially affecting our financial results
and operational stability.

 South Africa Specific Risk of Unstable Power
Supply

 Electricity demand in South Africa is extremely high
and energy plants do not meet the demand. Therefore, there are frequent rolling black outs that are handled by a schedule of "load
shedding" during which the supply and demand of electricity is balanced out to prevent the entire power grid from collapsing. This
results in unstable energy sources and frequent production halts for our company. DISA Medinotec has a backup generator big enough to
sustain the entire production facility in case of a power outage. In addition, South Africa is also a very solar capable country due to
the weather being warm with sub-tropical like conditions. Therefore, we are looking into solar power as a means to run our production
facilities more efficiently in the longer run.

 South Africa Specific Risk of Political instability
May Affect the Medinotec Group of Companies' ability to operate effectively.

 Political instability in the countries in which we
operate, including South Africa, where episodes of violent civil unrest (riots) have further destabilized the country's economy
and resulted in extensive damage to commercial property, and may cause increased uncertainty about our ability to exist in this environment.
This may adversely affect investor confidence as well as our business planning, operations and our market capitalization.

 This risk extends to global economic uncertainty and
heightened geopolitical tensions, such as those in involved in the Russian war on Ukraine, between the United States and China as well
as Brexit, which can also have an impact on several factors influencing commodity prices, exchange rates, and interest rates, all of which
can affect our business in turn.

 South Africa Specific Risk that Broad-based
Black Economic Empowerment ("BEE") requirements may restrict growth opportunities and limit the Medinotec Group of Companies'
ability to attract key talent.

 In South Africa, the correction of inequalities amongst
the key demographic groups of the country as a result of Apartheid is regulated by the Broad-based Black Economic Empowerment Act 53 of
2003. This is a legislative framework for the promotion of BEE that seeks to advance economic transformation and enhance the economic
participation of Black people in the South African economy. Companies failing to meet the requirements of the Act and its associated codes
may be at risk of not being able to attract investment and may also face more limited opportunities for growth (both organic and acquisitive)
and failure to attract, recruit and retain key candidates and suitably qualified personnel.

 South Africa Specific Risk that South African
authorities may disallow or delay a transfer of funds from South Africa to the United States

 The Central Reserve Bank of South Africa oversees
the flow of currency in and out of the republic of South Africa and the South African Revenue services oversee all transfer pricing issues.
The Medinotec Group of Companies has transfer pricing bench marking in place for future planned transactions between its South African
subsidiaries and Medinotec Inc., its U.S. parent company, and makes use of an external exchange control advisor to ensure any cross-border
transactions complies with the requirements of both the Reserve Bank and the South African Revenue services. This is an approval process
for the flow of funds and therefore may cause timing delays to transfer funds cross border but does not mean that it is disallowed entirely.
We have successfully concluded a Private Placement during May of 2022 to the value of $ 3.3 million in the name of Medinotec Inc., which
raise provided enough cashflow to fund our expected American operations and therefore we do not foresee that in the near future there
will be intercompany or cross border dependence for operational activities. We believe that once Medinotec Inc. establishes its own sales
network the company is expected to become self-sustaining. If for some reason there is a time delay and the funding raised during the
private placement is not enough, to realize the business plan of the parent, the operating subsidiary in South Africa would be its only
source of cashflow to sustain the Medinotec Group of Companies.

 Allowable cash flows and their expected timelines
are disclosed in the following table:

 Method

 Description

 Normal Time Delay Experienced

 Management fees

 Restricted to an amount that the business would need to prove that the services rendered by the Medinotec Group Internationally to the local company is at an arm's length amount. If this cannot be proven authorities will disallow the charge and in certain instances levy fines and penalties

 If these charges are proven to be at arm's length, flow of funds can happen within a one-week time frame.

 Loans

 Restricted to arm's length terms and would need to apply for formal approval to the authorities.

 The application may be accepted or declined and would require 6-10 weeks before approval will be obtained.

 Dividends

 Dividends may be declared from time to time depending on the fact that the company declaring these dividends are liquid and solvent.

 Since Medinotec Inc. is the registered owner
 of the business in South Africa dividends may be declared at a Board meeting and these can be paid to the parent entity. A dividends withholdings
 tax of 20% would apply and the funds may then exit the country.

 The timeline to ensure compliance and transfer
 the funds will be 2-3 weeks.

 It is important to note that the above-mentioned
table is the only three options to externalize funds out of South Africa. The time delays mentioned are based on prior experience and
guidance from expert advisors. The authorities do have the final decision-making powers on any transaction and therefore time delays may
become material and can have a material impact on the business and its ability to function especially when a dispute arises from interactions
with the regulators. Management fees and loans can easily be declined by authorities whereas dividends are less likely to be declined.

 Our entire business plan is based on the successful
private placement that was concluded, and this funding is expected to facilitate two years of funding required before any funding would
be needed from the South African subsidiaries, therefore this leaves some time to obtain regulatory approvals in advance if the business
plan roll out in the United States is slower than expected. If the Central Reserve Bank declines or imposes any restrictions including
time delays for approvals for flow of funds it may have a material impact on the business operations of the Group and may delay its roll
out in the American Markets until a follow up capital raise or alternatively debt finance can be obtained on an international level. It
is important to note that this successful raise of money does not guarantee that we will obtain regulatory approval in the USA for product
candidates that fall outside the Trachealator product which already obtained FDA approval in November 2021. In addition to this it also
does not guarantee successful commercializing of any products in the United States of America.

 South Africa Specific Risk of South Africa Being
Grey listed by the FATF- Financial Action Task Force

 The FATF- Financial Action Task Force is a global
inter-governmental body, that promotes policies and sets international standards relating to the combating of money laundering, terrorist
financing, and the financing of the proliferation of weapons of mass destruction. There are currently 39 members of the FATF; 37 jurisdictions
including South Africa and 2 regional organizations (the Gulf Cooperation Council and the European Commission). There are a further 31
international and regional organizations which are Associate Members or Observers of the FATF and participate in its work. South Africa
is the only African member of FATF, but other African jurisdictions participate through FATF Regional Bodies like the Eastern and Southern
Africa Anti-Money Laundering Group (ESAAMLG) who are associate members of FATF.

 The FATF grey list refers to the FATF's practice
of publicly identifying countries with strategic Anti- Money Laundering and Countering the Financing of Terrorism (AML/CFT) deficiencies.
The FATF maintains two such lists: I. jurisdictions under "increased monitoring" that are actively working with the FATF to
address strategic deficiencies in their regimes" and II. "high-risk jurisdictions subject to a call for action" that
are not actively engaging with the FATF to address these deficiencies.

 South Africa did poorly in its 2021 mutual evaluation,
which was conducted in 2019 when many institutions (especially law-enforcement agencies) were at their weakest following state capture.
Whilst no country is fully compliant with all 40 FATF Recommendations and all 11 effective immediate outcomes, South Africa was deemed
to have too many weaknesses in its legal framework (being deemed to be inadequately compliant with 20 of FATF's recommendations)
in all 11 effectiveness immediate outcomes. South Africa was put under a one-year observation period in October 2021, giving the country
time to address 67 Recommended Actions. South Africa made significant progress during the observation period, passing two major Amendment
Acts in 2022, and strengthening its institutions. A January 2023 assessment of SA's progress found that South Africa had made significant
and positive progress, reducing the 67 Recommended Actions to 8 strategic deficiencies, where more progress is required.

 The most significant implication to a country that
is grey-listed is the reputational damage to the country, as its effectiveness in combatting financial crimes like corruption
and money-laundering as well as terror financing are deemed to be below international standards. The second and related implication arises
from consequential action taken regarding cross-border transactions, particularly possible action taken by foreign banks that provide
correspondent banking services. It should be noted that FATF does not require enhanced due diligence measures to be applied, but rather
that all jurisdictions take account of it in their risk analysis. The same FATF statement quoted above notes:

 "The FATF does not call for the application
of enhanced due diligence measures to be applied to these jurisdictions. The FATF Standards do not envisage de-risking, or cutting-off
entire classes of customers, but call for the application of a risk-based approach. Therefore, the FATF encourages its members and all
jurisdictions to take into account the information presented below in their risk analysis." However, despite the FATF requirement,
selected institutions are expected to undertake more enhanced monitoring, for their own business reasons, or as may be required by their
own laws (eg EU directives). Hence institutions based in a grey-listed country that engages in cross-border trade and other activities
may be subject to higher levels of customer due diligence by financial institutions outside of that country. In practice, this means
being more thorough processing and vetting clients and understanding the sources of their funds. However, if a country has demonstrated
that it has taken strong and credible steps to prevent or get out of grey listing, the costs of grey listing will likely be reduced.
In the case of South Africa, none of the items on the action plan relate directly to preventive measures in respect of the financial
sector, reflecting significant progress since the mutual evaluation in the application of a risk-based approach to the supervision of
banks and insurers. National Treasury, therefore, expects that if South Africa continues to make significant improvements in effectiveness
and swiftly exits grey listing, it will have a limited impact on financial stability and costs of doing business with South Africa, particularly
if South Africa moves speedily to get out of grey listing.

 Companies in South Africa, responding to the grey-listing
will require context-specific solutions depending on the broader impact of the grey listing on their plans around aspects such as strategic
expansions, capital raising, and any general increased cost of doing business. Medinotec trades in a highly regulated environment
already and applies high levels of due diligence and financial control therefore the additional costs of compliance expected to be incurred
due to the grey listing is in our opinion minimal, this assessment may however change based on Government's response into
the future. This status may however make it harder for the business to raise capital in the future, Generally, it takes from one to three
years for countries to address the deficiencies and to be taken off the grey list, something that occurs after a final, on-site assessment
when both FATF and the relevant country believe that all elements of the action plan have been largely or fully addressed. The South
African Government communicated that it plans to address the eight (8) areas of strategic deficiencies identified by the FATF, by no
later than the end of January 2025 and that government has an intention to exit the grey list as fast as possible. There may, however,
be unplanned delays.

 Despite the progress the South African Government
is making on addressing deficiencies, it is still unclear how long this designation will remain in place and what ramifications, if any,
the designation will have for the Company.

 Risks Relating to Our Securities

 If the Medinotec Group of Companies undertakes
future offerings of our common stock, shareholders will experience dilution of their ownership percentage.

 Generally, existing shareholders will experience dilution
of their ownership percentage in the company if and when additional shares of common stock are offered and sold. In the future, we may
be required to seek additional equity funding in the form of private or public offerings of our common stock. In the event that we undertake
subsequent offerings of common stock, your ownership percentage, voting power as a common shareholder, and earnings per share, if any,
will be proportionately diluted. This may, in turn, result in a substantial decrease in the per-share value of your common stock.

 If a market for our common stock does not develop,
stockholders may be unable to sell their shares

 Our common stock is quoted under the symbol "MDNC"
on the OTCQX operated by OTC Markets Group, Inc., an electronic inter-dealer quotation medium for equity securities. We were approved
for trading in March 2023, and we do not have an active trading market. We can provide no assurances that an active trading market will
ever occur, and you may have issues selling your securities in our company.

 The Medinotec Group of Companies' common
stock price may be volatile and could fluctuate widely in price, which could result in substantial losses for investors.

 The market price of our common stock is likely to
be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including:

 •

 new products and services by us or our competitors;

 •

 government regulation of our products and services;

 •

 intellectual property disputes;

 •

 additions or departures of key personnel;

 •

 sales of our common stock;

 •

 our ability to integrate operations, technology, products and services;

 •

 our ability to execute our business plan;

 •

 operating results below expectations;

 •

 loss of any strategic relationship;

 •

 industry developments;

 •

 economic and other external factors; and

 •

 period-to-period fluctuations in our financial results.

 You should consider any one of these factors to be
material. Our stock price may fluctuate widely as a result of any of the above.

 In addition, the securities markets have from time-to-time
experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market
fluctuations may also materially and adversely affect the market price of our common stock.

 If securities analysts do not initiate coverage
or continue to cover the Common Stock or publish unfavorable research or reports about the business, this may have a negative impact on
the market price of the Common Stock of the Medinotec Group of Companies.

 The trading market for the Common Stock will depend
on the research and reports that securities analysts publish about our business and us. We do not have any control over these analysts.
There is no guarantee that securities analysts will cover the Common Stock. If securities analysts do not cover the Common Stock, the
lack of research coverage may adversely affect our market price.

 If we are covered by securities analysts, and the
stock is the subject of an unfavorable report, the stock price and trading volume would likely decline. If one or more of these analysts
ceases to cover our company or fails to publish regular reports on us, we could lose visibility in the financial markets, which could
cause the stock price or trading volume to decline.

 Because we are subject to the "Penny Stock"
rules and our shares are quoted on the over-the-counter bulletin board, the level of trading activity in the Medinotec Group of Companies'
stock may be reduced.

 The Securities and Exchange Commission has adopted
regulations which generally define "penny stock" to be any listed, trading equity security that has a market price less than
$5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides
information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current
bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly
account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules
generally require that prior to a transaction in a penny stock, the broker-dealer make a special written determination that the penny
stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure
requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to
the penny stock rules which may increase the difficulty Purchasers may experience in attempting to liquidate such securities.

 If the Medinotec Group of Companies issues shares
of preferred stock with superior rights to the common stock, it could result in a decrease in the value of our common stock and delay
or prevent a change in control of us.

 Our board of directors is authorized to issue up to
20,000,000 shares of preferred stock. Our board of directors has the power to establish the dividend rates, liquidation preferences, voting
rights, redemption and conversion terms and privileges with respect to any series of preferred stock. The issuance of any shares of preferred
stock having rights superior to those of the common stock may result in a decrease in the value or market price of the common stock. Holders
of preferred stock may have the right to receive dividends, certain preferences in liquidation and conversion rights. The issuance of
preferred stock could, under certain circumstances, have the effect of delaying, deferring, or preventing a change in control of us without
further vote or action by the stockholders and may adversely affect the voting and other rights of the holders of common stock.

 The Medinotec Group of Companies does not expect
to pay dividends in the foreseeable future. Any return on investment may be limited to the value of our common stock.

 We do not anticipate paying cash dividends on our
common stock in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and
other business and economic factors affecting it at such time as the board of directors may consider relevant. If we do not pay dividends,
our common stock may be less valuable because a return on your investment will occur only if our stock price appreciates.

 Provisions in the Nevada Revised Statutes and
our Bylaws could make it very difficult for an investor to bring any legal actions against the Medinotec Group of companies' directors
or officers for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors or officers in any
such actions.

 Members of our board of directors and our officers
will have no liability for breaches of their fiduciary duty of care as a director or officer, except in limited circumstances, pursuant
to provisions in the Nevada Revised Statutes and our Bylaws as authorized by the Nevada Revised Statutes. Specifically, Section 78.138
of the Nevada Revised Statutes provides that a director or officer is not individually liable to the company or its shareholders or creditors
for any damages as a result of any act or failure to act in his or her capacity as a director or officer unless it is proven that (1)
the director's or officer's act or failure to act constituted a breach of his or her fiduciary duties as a director or officer
and (2) his or her breach of those duties involved intentional misconduct, fraud or a knowing violation of law.

 This provision is intended to afford directors and
officers protection against and to limit their potential liability for monetary damages resulting from suits alleging a breach of the
duty of care by a director or officer. Accordingly, you may be unable to prevail in a legal action against our directors or officers even
if they have breached their fiduciary duty of care.

 In addition, our Bylaws allow us to indemnify our
directors and officers from and against any and all costs, charges and expenses resulting from their acting in such capacities with us.
This means that if you were able to enforce an action against our directors or officers, in all likelihood, we would be required to pay
any expenses they incurred in defending the lawsuit and any judgment or settlement they otherwise would be required to pay. Accordingly,
our indemnification obligations could divert needed financial resources and may adversely affect our business, financial condition, results
of operations and cash flows, and adversely affect prevailing market prices for our common stock.

 Management evaluated the Company's ability to
continue as a going concern in accordance with ASC 205-40 and concluded that, based on current cash, projected operations, and available
funding, there is no substantial doubt about the Company's ability to meet its obligations for at least 12 months from the issuance
of these financial statements.

 ITEM 1B.

 UNRESOLVED STAFF COMMENTS

 This information is not required for smaller reporting
companies.

 ITEM 1C.

 CYBERSECURITY

 Cybersecurity Risk Management and Strategy

 We rely on our information technology to operate our
business. As such, we have policies and processes designed to protect our information technology systems, some of which are managed by
third parties, and resolve issues in a timely manner in the event of a cybersecurity threat or incident.

 We have designed our business applications and hosting
services to minimize the impact that cybersecurity incidents could have on our business and have identified back-up systems where appropriate.
We seek to further mitigate cybersecurity risks through a combination of monitoring and detection activities, use of anti-malware applications,
employee training, quality audits and communication and reporting structures, among other processes. We engage a third-party consultant
to assist us with our cybersecurity risk management framework, including the monitoring and detection of cybersecurity threats and responding
to any cybersecurity threats or incidents.

 The Company maintains an ongoing partnership with
a third-party cybersecurity service provider, which facilitates continuous communication through regular electronic updates and periodic
onsite engagements. This collaboration ensures alignment in key areas of cybersecurity, including threat detection, vulnerability management,
and incident response.

 We have implemented internal communication protocols
designed to promptly escalate any cybersecurity incidents to the appropriate personnel responsible for evaluating their significance and
potential materiality. Upon identification of an incident, the matter is assessed in coordination with our cybersecurity service provider.
Relevant information is then communicated to the Board of Directors, which is responsible for determining whether public disclosure is
required under applicable securities laws. This process is intended to support timely and accurate reporting in accordance with the Company's
disclosure obligations.

 Cybersecurity Governance

 The Company's cybersecurity program is supported
by a third-party consultant team, which provides expertise in monitoring, threat detection, and risk mitigation. This team operates under
the oversight of senior leadership, specifically the Chief Executive Officer and an Independent Director with relevant experience. Together,
they are responsible for managing the relationship with the cybersecurity consultants and ensuring that cybersecurity risk management
remains aligned with the Company's overall strategic objectives and risk tolerance.

 Our cybersecurity program is informed by industry-recognized
best practices, including the National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF), which guides our efforts
across key domains such as risk identification, protection, threat detection, incident response, and recovery. This framework helps ensure
consistency and effectiveness in our cybersecurity approach and supports compliance with evolving regulatory expectations.

 Cybersecurity oversight is also integrated into the
Company's broader corporate governance structure. Management provides updates to the Board of Directors at least quarterly, or more
frequently as necessary in response to immediate threats or incidents. These updates cover any material cybersecurity events, as well
as incidents of lesser impact that may indicate emerging risks or operational vulnerabilities. The Board, in exercising its oversight
responsibilities, evaluates the potential impact of such incidents on the Company's operations, financial condition, and disclosure
obligations.

 This governance framework is designed to ensure that
the Company remains responsive to the dynamic cybersecurity landscape, maintains regulatory compliance, and protects the integrity of
its information systems and data assets.

 Our management team is responsible for assessing and
managing our material risks from cybersecurity threats.

 Risks from Cybersecurity threats

 Although cybersecurity risks have not materially affected
us, including our business strategy, results of operations or financial condition, to date, we face numerous and evolving cybersecurity
threats in our business. For more information about the cybersecurity risks we face, see the risk factor entitled "The Medinotec
Group of Companies rely on the proper function, security and availability of our IT systems and data to operate the business, and a breach,
cyber-attack or other disruption to these systems or data could materially and adversely affect the business, results of operations, financial
condition, cash flows, reputation, or competitive position." in Item 1A. Risk Factors.

 During the years ended February 28, 2025 and February
29, 2024, we did not, to our knowledge, experience any cybersecurity incidents or breaches that materially impacted or are reasonably
likely to materially impact our business, performance or results.

 ITEM 2.

 PROPERTIES

 Currently, we do not own any real estate. Our principal
executive offices and manufacturing facility are located at Northlands Business Park at 170-171 Bush Telegraph Avenue, North Riding,
Johannesburg, South Africa. We have entered into a lease for this 8,783 square foot facility. We also rent office space in Melville,
New York under a short-term rental agreement. We believe that our properties are adequate for our current needs, but growth potential
may require larger facilities due to the anticipated addition of personnel.

 We do not have any policies regarding investments
in real estate, securities, or other forms of property.

 Please refer to related party footnotes in the financial
statements and as disclosed in the Section of this Annual Report, entitled, "Certain Relationships and Related Transactions, and
Director Independence" for the related party effects of the lease.

 We are also currently renting office and storage space in Long Island,
New York.

 ITEM 3.

 LEGAL PROCEEDINGS

 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 normal course of business, the Company may
agree to indemnify third parties with whom it enters into contractual relationships, including customers, lessors, and parties to other
transactions with the Company, with respect to certain matters. The Company 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'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 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 Company 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 Company.

 As of the date of this Annual Report, there is no
known material litigation or claims against the Company.

 ITEM 4.

 MINE SAFETY DISCLOSURES

 Not applicable.

 ITEM 5.

 MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 Market Information.

 Our common stock is qualified for quotation on the
OTCQX under the symbol "MDNC" and has been quoted on the OTC since March 2023. There currently is no liquid trading market
for our common stock. There can be no assurance that a significant active trading market in our common stock will develop, or if such
a market develops, that it will be sustained.

 The ability of individual stockholders to trade their
shares in a particular state may be subject to various rules and regulations of that state. A number of states require that an issuer's
securities be registered in their state or appropriately exempted from registration before the securities are permitted to trade in that
state. Presently, we have no plans to register our securities in any particular state. Further, our shares are subject to the provisions
of Section 15(g) and Rule 15g-9 of the Exchange Act, commonly referred to as the "penny stock" rule. Section 15(g) sets forth
certain requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates the definition of penny stock as that used in
Rule 3a51-1 of the Exchange Act.

 Holders

 As
of May 29, 2025, we had 56 shareholders of common stock per transfer agent's shareholder list.

 Dividends

 The Company has not paid any cash dividends to date
and does not anticipate or contemplate paying any dividends in the foreseeable future. It is the present intention of management to utilize
all available funds for the growth of the Registrant's business.

 Equity Compensation Plan Information

 The Company does not currently have an equity compensation
plan in place.

 ITEM 6.

 [RESERVED]

 ITEM 7.

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

 Results
of Operations for the Years February 28, 2025 and February 29, 2024

 Revenue

 For the fiscal year ended February 28, 2025, the Consolidated Medinotec
Group of Companies reported revenue of $9,113,607, an increase of $4,093,216 or 81.5% compared to $5,020,391 in the prior year. This
growth was primarily driven by the full-year impact of newly established distribution agreements, the initial commercialization of
a key product in the U.S. market, and continued expansion of our global sales footprint.

 Key Drivers of Revenue Growth

 •

 First Full Year Under New Distribution Agreements

 During the third quarter of fiscal 2024, the Company entered into multiple new distribution agreements in the surgical cardiology segment,
primarily concentrated in South Africa. Fiscal 2025 represents the first full year of revenue contribution under these agreements. The
performance-based nature of these short-term contracts, while beneficial for flexibility, also introduces potential variability depending
on distributor execution and market dynamics.

 •

 Geographic Concentration and Relationship-Driven Wins

 The revenue increase was concentrated in South Africa, where our distribution partners brought strong reputations and existing market
presence. These contract awards were, in part, the result of long-standing relationships between distributor principals and current executive
management. While this contributed to accelerated growth, the geographic concentration poses a potential risk in the event of contract
changes, local disruptions, or economic volatility.

 •

 U.S. Market Commercialization of Trachealator

 In fiscal 2024, we began generating revenue in the United States through sales of our Trachealator device. This represents the
first year of U.S. commercialization for the product, which serves the non-occlusive tracheal dilation market. The rollout has been positively
received and forms a key component of our growth strategy going forward.

 •

 Expanded Product Portfolio

 The Company also secured several new distribution agreements with international principals late in the fiscal year to broaden its product
offerings. These agreements are expected to support future revenue diversification, reduced concentration risk, and additional entry points
into both existing and new markets.

 Seasonality and Operating Patterns

 While our business is not subject to pronounced
seasonality, we typically observe modest declines in sales during periods that coincide with regional holidays or extended breaks—particularly
in markets like South Africa. These trends are known and budgeted for as part of our operating planning cycle.

 Related Party Transactions

 No revenue was generated from related party affiliations
during the fiscal year ended February 28, 2025.

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

 Medinotec Inc Group Consolidated Years Ended

 Feb 28, 2025
 $

 Feb 29, 2024
 $

 Outside of United States of America

 Internally Designed/Manufactured Sales

 863,337

 976,291

 Distribution Agreement Sales

 7,572,165

 3,490,133

 Sales Generated inside the United States of America

 Internally Designed/Manufactured Sales

 678,105

 553,967

 9,113,607

 5,020,391

 The following table sets forth financial information
by reportable segment for the years ending February 28, 2025 and February 29, 2024:

 1.

 Income/(loss) from operations

 Inside the United States

 Outside the United States

 Total

 2025

 2024

 2025

 2024

 2025

 2024

 Revenue

 $678,105

 $553,967

 $8,435,502

 $4,466,424

 $9,113,607

 $5,020,391

 Cost of goods sold

 (87,826)

 (47,708)

 (4,164,995)

 (2,530,214)

 (4,252,821)

 (2,577,922)

 Gross profit

 590,279

 506,259

 4,270,507

 1,936,210

 4,860,786

 2,442,469

 Selling expenses

 (65,646)

 (30,611)

 (47,548)

 (53,953)

 (113,194)

 (84,564)

 Depreciation expense

 -

 -

 (73,846)

 (63,948)

 (73,846)

 (63,948)

 (725,834)

 (477,226)

 (665,280)

 (1,193,802)

 (1,391,114)

 (1,671,028)

 Research and development expenses

 (50,000)

 -

 (41,133)

 (22,351)

 (91,133)

 (22,351)

 Income/(loss) from operations

 $(251,201)

 $(1,578)

 $3,442,700

 $602,156

 $3,191,499

 $600,578

 Provision for impairment of note receivable

 -

 (642,012)

 -

 -

 -

 (642,012)

 2.

 Total Assets

 Inside the United States

 Outside the United States

 Total

 2025

 2024

 2025

 2024

 2025

 2024

 Total assets

 $2,181,184

 $2,697,502

 $4,627,789

 $2,106,777

 $6,808,973

 $4,804,279

 The major component of total assets is "Cash"
of $2,769,686 for the year ending February 28, 2025 and $2,808,910 for the year ending February 29, 2024. A significant portion of this
is maintained inside the United States in USD of $2,019,628 for the year ending February 28, 2025 and $2,478,434 for the year ending
February 29, 2024.

 Cost of Goods

 For the fiscal year ended February 28, 2025, the Consolidated
Medinotec Group of Companies recorded cost of goods sold (COGS) of $4,252,821, compared to $2,577,922 for the year ended February 29,
2024. This represents a year-over-year increase of $1,674,899, in line with the significant growth in sales.

 Gross profit for fiscal 2025 was $4,860,786, representing
a gross margin of 53%, compared to a gross margin of 49% in fiscal 2024. The increase in gross margin is primarily attributable to increased
sales, together with manufacturing and sales processes becoming more efficient as time progresses, as well as an improved sales mix
favoring higher-margin products. The effect of exchange rate differences on imports and exports were also more stable during the year.

 Key Factors Affecting COGS and Gross Margin

 • Sales-Driven
Increase in COGS: The rise in COGS is consistent with higher product sales, particularly under third-party distribution agreements, which
resulted in a proportional increase in associated costs.

 • Operational
Efficiencies: As the Group matures operationally, efficiencies in manufacturing and sales processes have improved. This ongoing operational
refinement has contributed positively to gross margins through reduced unit costs and optimized workflows.

 • Stabilization
of Exchange Rates: The Group is exposed to foreign exchange fluctuations related to both imports and exports, which can materially affect
margins due to timing differences between procurement and sales. During fiscal 2025, exchange rates remained relatively stable, with
the South African Rand appreciating by approximately 4.6% against the U.S. Dollar. This stability helped mitigate currency-related margin
volatility.

 Related Party Transactions

 No related party transactions were recorded in cost
of sales for the fiscal year ended February 28, 2025.

 Operating Expenses

 For the fiscal year ended February 28, 2025, operating
expenses totaled $1,669,287, a decrease from $1,841,891 for the fiscal year ended February 29, 2024. This decrease was primarily due to
reclassification adjustments, offsetting the increased costs related to business expansion and product rollout.

 One of the major components that affect the operating
expenses is the costs of compliance for the business. Certain costs are once off in nature and others will be recurring. This will be
determined after the markets were entered and all regulatory requirements met.

 The Consolidated Medinotec Group of Companies for the Years Ended

 Feb 28,
 2025
 $

 Feb 29,
 2024
 $

 Compliance cost

 526,603

 186,338

 Medinotec Inc Group Consolidated Years Ended

 Feb 28,
 2025
 $

 Feb 29,
 2024
 $

 Depreciation and amortization expense

 73,846

 63,948

 1,391,114

 1,671,028

 Research and development expenses

 91,133

 22,351

 Selling expenses

 113,194

 84,564

 Total operating expenses

 1,669,287

 1,841,891

 Key Drivers of Operating Expense Trends

 General and Administrative Expenses: General
and administrative (G&A) expenses decreased significantly, although this was partially due to the reclassification of $327,950 in
expenses to revenue in the first quarter of fiscal 2025, relating to activities outside the United States. Excluding this reclassification,
G&A expenses increased by $48,036, mainly driven by the addition of payroll costs related to new distribution agreements and higher
compliance costs as the Company expanded its market presence.

 Research and Development (R&D): The Company
recorded R&D expenses of $91,133 for the year ended February 28, 2025, up from $22,351 in the prior year. However, R&D spending
remains a relatively small portion of our overall operating expenses. This increase was primarily focused on perfecting existing manufacturing
processes to support the scaling of our Trachealator product and other potential product integrations. Given the nature of our operations,
the majority of our R&D efforts are directed toward refining production methods and ensuring that products can be efficiently manufactured
within our current infrastructure. We only engage in R&D for products where a working prototype and proof of concept are already in
hand, and we focus exclusively on products that align with our existing capabilities. This approach significantly reduces our R&D
costs compared to companies engaged in speculative or early-stage development.

 Compliance Costs: A substantial portion of
our operating expenses relates to compliance activities required to maintain international standards, including ISO certifications and
CE/FDA product registrations. These compliance costs are essential for ensuring that our products meet regulatory requirements in the
markets where we operate. Additionally, we incur costs for maintaining distribution licenses and product registrations with local health
authorities in each country, such as the South African Health Products Regulatory Authority (SAHPRA) in South Africa. While some of these
compliance costs are one-time in nature, many will be recurring as the Company enters new territories and ensures ongoing regulatory compliance.
As we expand into more markets, particularly within the medical device industry, these compliance costs will likely increase.

 Future Operating Expense Growth

 Looking forward, we anticipate that future operating
expenses will grow primarily in two areas:

 1.

 Regulatory Compliance: As we expand into additional territories, we expect ongoing costs related to maintaining
and obtaining product registrations, as well as adhering to the evolving regulatory standards in different jurisdictions. This includes
the maintenance of certifications such as ISO, CE, and FDA approvals, as well as local health authority requirements in each market.

 2.

 Sales and Marketing: As we increase our global footprint, particularly with the Trachealator and other products, we expect
to allocate more resources toward sales and marketing efforts. These costs will be essential to drive product adoption, support new distribution
agreements, and build brand awareness in new regions.

 In addition, while R&D expenses will remain relatively
modest, the Company's focus will remain on optimizing manufacturing processes, ensuring that production capabilities are aligned with
increased product demand and the scalability of our operations.

 Non-operating income and expenses

 Non-operating income and expenses for the fiscal year
ended February 28, 2025, primarily consist of interest earned on free cash and the management of liquid assets. These amounts are immaterial
relative to our core operating results and do not significantly affect the business's overall financial performance. However, there
were some key non-operating transactions that impacted both the balance sheet and income statement during the prior fiscal year.

 Note Receivable

 On November 30, 2023, the Company fully
impaired its note receivable from Innovative Outcomes, which amounted to $642,012. This decision was made prudently, as the receivable
was no longer supported by any ongoing Trachealator revenue streams. While the receivable was impaired, it does not eliminate the future
liability of Innovative Outcomes to repay the amount. No interest income is recognized on the note while it remains impaired. The full
recoverability of the receivable has not yet been definitively tested.

 Interest Expense

 Interest expense primarily relates to the
interest on the related party loan of $141,748 and the interest paid to our logistics service provider of $28,126. These expenses are
recorded in line with the terms of the respective agreements and are consistent with prior periods.

 Interest Income

 Interest income for the fiscal year
was earned from two main sources: the note receivable which was impaired and a tax refund receivable. No interest income is recognized
on the impaired note receivable, although interest continues to accrue contractually in accordance with the terms of the agreement, while
interest on the tax refund receivable was earned during the prior fiscal year, contributing to the total interest income recognized.
During the fiscal year ended February 28, 2025, no interest was recognized in respect of the note receivable; while an amount of $8,668
was earned on tax refund receivable, representing a total of $8,668 interest income for the year.

 Net Income

 The Consolidated Medinotec Group of Companies reported
a net profit of $2,159,473 for the year ending February 28, 2025, compared to a net loss of $404,688 for the year ended February 29, 2024.

 This increase in net income is primarily driven
by the higher sales generated from the new cardiology distribution business in South Africa, as well as the increased sales of the Trachealator,
an internally designed and manufactured product, in the United States. The growth in both distribution revenues and the Trachealator's
success in new markets were key factors in driving this positive shift in profitability.

 Liquidity and Capital Resources

 As of February 28, 2025, the Company had
total current assets of $6,423,186 and total assets of $6,808,973. Total current liabilities as of February 28, 2025, were $1,505,047.
The Company had working capital of $4,918,139 as of February 28, 2025. In comparison, as of February 29, 2024, the Company had total
current assets of $4,379,297 and total assets of $4,804,279. Total current liabilities as of February 29, 2024, were $827,453. Consolidated,
we had working capital of $3,551,844 as of February 29, 2024.

 The research and development phase of the
internally designed product lines has largely concluded. Therefore, we expect to see an increase in sales and marketing expenses, primarily
for the rollout in the United States and the expansion of the cardiology distribution contract business in South Africa.

 The Company has sufficient cash reserves and
working capital to fund the roll-out in the market of the United States, including new research and development activities, as well as
marketing and sales functions.

 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 our 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 achieve profitable operations.

 As of February 28, 2025, we have no material
capital expenditure commitments. All planned capital projects have been completed, and there are no additional contractual obligations
for plant expansion or equipment purchases. Our manufacturing facility currently operates below its maximum capacity, which allows us
to absorb modest increases in production without significant additional investment. This available capacity enables us to respond efficiently
to changes in customer demand with minimal incremental capital outlay.

 We fund our operations and working capital
needs primarily from cash generated by our ongoing business activities. Over the past two fiscal years, our operating cash flows have
been positive and sufficient to meet our cash requirements, and we expect this trend to continue in the near future. We maintain strong
operational controls that allow us to manage our working capital effectively, ensuring liquidity is available for daily operations and
short-term commitments.

 In the longer term, we may require additional
capital to support strategic initiatives, including select product enhancements and potential expansion efforts. While we do not currently
anticipate large-scale capital expenditures, the need for future funding to support ongoing business growth or research and development
(R&D) efforts may arise. As a smaller reporting company with limited R&D activities, we continue to focus our research investments
on incremental product refinements rather than early-stage or speculative development. These expenditures remain modest, as previously
disclosed, and are primarily directed toward refining existing production processes. However, any significant future R&D initiatives
or product development would likely require external funding, either through equity or debt financing.

 Liquidity

 In terms of liquidity, we currently have sufficient
cash resources to meet our short-term obligations and continue day-to-day operations. We regularly evaluate cash needs based on forecasted
operational demands and have identified no material trends or uncertainties that would cause a significant change in our liquidity position.
Any potential changes in liquidity would likely arise from strategic decisions, such as expansion or increased investment in R&D,
but we expect that cash flows from ongoing operations will continue to provide the necessary funds.

 Capital Resources

 As of the end of the latest fiscal period,
our capital requirements are primarily focused on sustaining and optimizing existing operations, rather than large-scale growth or capital
expansion. We have no material capital expenditures committed for the near term. However, as our business continues to evolve, we anticipate
that we may seek external financing options, such as equity offerings or debt financing, should the need arise for larger investments
in new products or significant capacity expansion.

 While our current capital structure remains
primarily equity-based, we are mindful of changing trends in the availability and cost of capital resources, including any shifts in equity
or debt market conditions that may affect our financing strategy. We continue to explore opportunities to optimize our capital resources,
balancing the need for flexibility with prudent financial management.

 Currency Fluctuations and Exchange Rate
Risks

 Given the Company's exposure to various
currencies, particularly the South African Rand and the U.S. Dollar, fluctuations in exchange rates could impact our working capital and
cash reserves. We monitor foreign exchange risks and may take steps to hedge against significant adverse movements. While we have not
implemented any hedging strategy at this time, we will continue to assess the impact of currency fluctuations on our financial position
and operations.

 Funding Strategy for Expansion

 As part of our growth strategy, the Company
continues to explore opportunities for alternative funding sources, including strategic partnerships, grants, and government incentives,
to support expansion into new markets and product development initiatives. These options could provide additional capital if needed for
larger-scale projects or unforeseen expenditures.

 Future Plans and Financing Needs

 Looking ahead, we anticipate that any major
strategic initiatives, such as entering new markets or funding larger-scale projects, may require additional capital. We continue to explore
all available financing options to ensure that we can access the necessary resources to fund future growth and innovation. This includes
potential equity or debt offerings, as well as exploring potential partnerships or other arrangements that could provide non-dilutive
funding.

 Our 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. 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 in the 2024 fiscal year. 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,
as was the result in the current fiscal year.

 Cash Flows

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

 2025

 2024

 Net cash provided by (used in):

 Operating Activities

 877,834

 14,242

 Investing Activities

 (89,013

)

 10,125

 Financing Activities

 (894,482

)

 (8,092

)

 Cash flows provided by Operating Activities

 Net cash provided by operating activities
from continuing operations increased significantly for the fiscal year ended February 28, 2025. This improvement was primarily due to
a $2,564,161 increase in profitability, with the Group reporting net income of $2,159,473, compared to a net loss of $404,688 in the
prior year. This turnaround was mainly driven by strong growth in distribution revenue, particularly from the launch of the cardiology
distribution business in South Africa and expanded U.S. sales of the Trachealator product.

 Operational cash flow also benefited from
improved working capital management, including better receivables collection and inventory optimization. Operating expenses were carefully
controlled, allowing the Group to support growth initiatives—especially in sales and marketing—while maintaining positive
cash generation from operations. Management also notes customer concentration risk, with most customers situated within the South African
segment, which should be considered in assessing the quality and stability of these cash flows.

 Management believes that these improvements,
alongside efficiencies and sustained revenue momentum, position the Group for continued positive cash flow generation. Non-cash adjustments,
including depreciation and share-based compensation, are minimal in our business.

 Cash flows used in Investing Activities

 Net cash used in investing activities
increased for the fiscal year ended February 28, 2025. This change was primarily driven by the absence of inflows from a note receivable,
which had generated positive cash flows through repayments in the prior year. In contrast, during the current year, the outstanding balance
of the note receivable increased and was subsequently impaired, resulting in no corresponding cash inflow.

 Additionally, the Group increased its
investment in property, plant, and equipment (PP&E), reflecting continued expansion and operational scaling. These capital expenditures
contributed to higher cash outflows from investing activities compared to the prior year.

 Cash flows used in Financing Activities

 Cash flows used in financing activities
for the fiscal years ended February 28, 2025, and February 29, 2024, primarily related to the repayment of a related party loan. In fiscal
2025, the Company repaid $895,279, an increase compared to $9,680 in the prior year. This increased repayment reflects the Company's
continued efforts to reduce financial liabilities and strengthen its balance sheet.

 Looking ahead, the Company may evaluate additional financing
options—including potential debt or equity issuances—to support its strategic growth objectives. This may include funding
expansion into new markets, increasing production capacity, and scaling marketing and distribution efforts to drive long-term value creation.

 Off Balance Sheet Arrangements

 As of February 28, 2025, there were no off-balance
sheet arrangements.

 Critical Accounting Estimates

 While our significant accounting policies are described
in the notes to our consolidated financial statements, we believe that the accounting estimates below are most critical to understanding
our financial condition and historical and future results of operations.

 Allowance for credit losses on loans receivable

 The Company records allowances for loan impairment
when it is determined that the Company will be unable to collect all amounts due according to the terms of the underlying agreement. Interest
income on impaired loans is recognized only when interest payments are received.

 The Trachealator product obtained FDA approval in
November 2021, 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 the 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 became payable in the 2024 fiscal 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 no longer backed by any Trachealator revenue streams.
This does not change that Innovative Outcomes will still be liable for payment of this in the future. While impaired, no interest income
will be recognized on the receivable. Should payments be received this provision will be reversed with the same amount of cashflow received.

 Management believes that prior allowances for this
note receivable were determined with appropriate assumptions and were as accurate as possible given the information available at the time.
We continuously compare actual repayments and write-offs against our allowances and revise our estimate when subsequent events or newly
obtained information indicate that adjustments are necessary.

 There have been no material changes during the current
year to the assumptions or methodologies used in estimating expected credit losses on the note receivable. Our approach to incorporating
historical loss data, current borrower assessments and forward-looking information remains consistent with prior periods.

 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.

 The provision for stock obsolescence is
assessed at the end of every reporting period. Due to the long shelf life of our products as well as the ability to re-sterilize products
to reset the shelf life, this provision, in management's opinion, will never increase significantly.

 Management believes that our historical
inventory valuations, including weighted-average cost measurements and obsolescence provisions for raw materials, work-in-process and
finished goods,were determined with appropriate assumptions and were as accurate as possible given the information available.

 There have been no material changes during
the current year to the key assumptions or methodologies applied to inventory valuation or obsolescence provisioning. Our approach to
calculating weighted-average cost, assessing net realizable value for each inventory category and performing annual age-based obsolescence
reviews remains consistent with prior periods.

 Management does not anticipate any material
changes to the methodologies or key assumptions used to determine inventory valuation or obsolescence provisions in future periods.

 Deferred tax assets and liabilities

 We identify temporary differences between
the financial statement basis and tax basis of our assets and liabilities, as well as available loss and credit carryforwards. We apply
the enacted statutory tax rates expected to be in effect when such differences reverse, pursuant to U.S. federal and state tax law and,
where applicable, South African Income Tax Act provisions. We then assess positive and negative evidence—such as future taxable
income projections, historical earnings patterns, tax-planning strategies and the expiration dates of carryforwards—to conclude
whether it is "more likely than not" that DTAs will be realized. A valuation allowance is recorded against DTAs when realization
is not deemed more likely than not.

 Management believes that prior deferred
tax asset estimates were prepared with appropriate assumptions and were as accurate as possible given the information available at the
time. We continue to perform retrospective evaluations of those estimates against actual outcomes to confirm the reasonability of our
methodologies, and we adjust valuation allowances when subsequent events or newly obtained information indicate that revisions are warranted.

 There have been no material changes to
the assumptions or estimates used in determining our deferred tax assets and liabilities during the current year. Our methodologies, including
income forecasts, tax-law interpretations and valuation allowance assessments, remain consistent with those applied in prior periods.

 Recently Issued Accounting Pronouncements

 See Note 2 to our Consolidated Financial Statements
included in Part IV, Item 15 of this Annual Report on Form 10-K for more information about recent accounting pronouncements, the timing
of their adoption, and our assessment, to the extent we have made one, of their potential impact on our financial condition and results
of operations.

 ITEM 7A.

 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 We are not required to provide the information required
by this Item because we are a smaller reporting company.

 ITEM 8.

 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 The financial statements required by this Item 8 are
included in this Annual Report following Item 15 hereof. As a smaller reporting company, we are not required to provide supplementary
financial information.

 ITEM 9.

 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 In July, 2024, we replaced BDO South Africa Inc.
with Mercurius & Associates LLP as our current independent registered public accounting firm.. The engagement of the new accountant
was approved by our Audit Committee of the Board of Directors. For more information on the change in auditor, see our Current Report
on Form 8-K filed with the SEC on June 20, 2023.

 ITEM 9A.

 CONTROLS AND PROCEDURES

 Evaluation of Disclosure Controls and Procedures

 We maintain disclosure controls and procedures that
are designed to ensure that information required to be disclosed in our reports, filed under the Securities Exchange Act of 1934, is recorded,
processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is
accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to
allow timely decisions regarding required disclosure.

 Based on the evaluation performed as of
February 28, 2025, as a result of the material weaknesses in internal control over financial reporting that are described below in Management's
Report on Internal Control Over Financial Reporting, our Chief Executive Officer and Chief Financial Officer determined that our disclosure
controls and procedures were not effective as of such date.

 Management's Report on Internal Controls Over Financial
Reporting

 Management is responsible for establishing
and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).
A company's internal control over financial reporting is a process designed by, or under the supervision of, its Chief Executive
Officer and Chief Financial Officer, and effected by such company's board of directors, management and other personnel to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles and includes those policies and procedures that:

 •

 pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

 •

 provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

 •

 provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

 In designing and evaluating the disclosure controls
and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable
and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily
was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design
of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate
because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations
in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

 As required by the SEC Rules 13a-15(b) and 15d-15(b),
we carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer
and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the
end of the period covered by this report based on the framework set forth in Internal Control-Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the foregoing, our principal executive officer and principal
financial officer concluded that our disclosure controls and procedures were not effective as of February 28, 2025, at the reasonable
assurance level due to the material weaknesses described below.

 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 which is applicable to us for the year ended February 28, 2025. 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 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. 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.

 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 and represented a material weakness.

 Management is actively engaged in addressing the material
weaknesses in internal control over financial reporting identified as of February 28, 2025. These weaknesses relate to the absence of
formal documentation of internal control procedures, limited segregation of duties within accounting functions, and an underdeveloped
control environment.

 While
the Company's size and structure present certain limitations, we recognize the importance of strengthening our internal controls
and have initiated steps to improve our control framework. During the fiscal year ending February 28, 2026, we plan to:

 •

 Begin formal documentation
 of key internal control processes and procedures, consistent with the COSO 2013 framework;

 •

 Enhance segregation of
 duties within our finance function to the extent feasible, and implement additional review controls where full segregation is not
 practical;

 •

 Adopt a formal Code of
 Business Conduct and Ethics and communicate it throughout the organization;

 •

 Improve communication and
 documentation of our accounting policies and procedures.

 We have also engaged external consultants to assist
in evaluating and enhancing our internal control environment and to provide additional support during the remediation process.

 These efforts are ongoing, and while the material
weaknesses had not been fully remediated as of February 28, 2025, we are committed to making meaningful progress in the coming year. We
will continue to assess the effectiveness of these actions and report on our remediation progress in future filings.

 Changes in Internal Control Over Financial Reporting

 There
has been no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d)
of the Exchange Act that occurred during our fourth quarter ended February
28, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, except
for the planned remedial action toward the control deficiencies detailed above.

 Limitations on Effectiveness of Controls and Procedures

 The effectiveness of any system of internal
control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing,
implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly,
any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable,
not absolute assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls
may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but there can be no
assurance that such improvements will be sufficient to provide us with effective internal control over financial reporting.

 ITEM 9B.

 OTHER INFORMATION

 On February 19, 2025, we held our 2024 Annual Meeting
of the shareholders, at which the shareholders voted on the matters disclosed in our Proxy Statement. The final voting results for the
matters submitted to a vote of the shareholders were as follows:

 Proposal No. 1 - Election of Directors

 Our shareholders elected the persons listed below
for a one-year term expiring at our 2025 Annual Meeting or until their respective successors are duly elected and qualified:

 FOR

 AGAINST

 ABSTAIN

 Stavros G. Vizirgianakis

 Proposal No. 2 – Ratification of Independent
Registered Public Accounting Firm

 Our shareholders ratified the appointment of Mercurius
& Associates LLP as our independent registered public accounting firm for fiscal 2025.

 FOR

 AGAINST

 ABSTAIN

 9,937,799

 7,415

 ITEM 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 None.

 ITEM 10.

 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 The following information sets forth the names, ages,
and positions of our current directors and executive officers.

 Name

 Age

 Position(s) and Office(s) Held

 President, Secretary, CEO and Director

 CFO, Treasurer and Director

 Stavros G. Vizirgianakis

 Set forth below is a brief description of the background
and business experience of our current executive officers and directors.

 The Company is led by Dr Vizirgianakis as the Chief
Executive Officer, a qualified medical doctor, with a specialty interest in the field of neuroscience. He has many years of experience
in the international and South African health markets. Dr Vizirgianakis is the founding ultimate shareholder of DISA Medinotec Proprietary
Limited and has been involved in several successful entrepreneurial ventures. For the last five years, Dr. Vizirgianakis has been employed
as CEO of Minoan Medical and DISA Medinotec Proprietary Limited.

 Aside from that provided above, Dr. Vizirgianakis
does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant
to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an
investment company under the Investment Company Act of 1940.

 The Board believes that Dr. Vizirgianakis has the
experience, qualifications, attributes and skills necessary to serve on the Board because of the fact that he held similar positions for
more than 10 years and his designation as a medical doctor, he is also a founding shareholder in the company and has a long-standing track
record in the industry.

 Mr. Pieter van Niekerk is a qualified Chartered
Accountant and the Company's CFO and has been involved in multiple listings on various exchanges in the United States of America and South
Africa. He has 10 years of executive management experience. For the last five years, Mr. van Niekerk has been employed as CFO of Minoan
Medical and DISA Medinotec Proprietary Limited.

 Aside from that provided above, Mr. van Niekerk
does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant
to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an
investment company under the Investment Company Act of 1940.

 The Board believes that Mr. van Niekerk has the experience,
qualifications, attributes and skills necessary to serve on the Board because of the fact that he held similar positions for more than
10 years and his designation as a chartered accountant, he is also a founding shareholder in the company and has a long-standing track
record in the industry.

 Stavros G. Vizirgianakis

 Mr. Vizirgianakis is an investor and strategic
advisor to companies in the medical device field. He currently serves on the Board of Directors at Tally Surgical, Inc., Theragenics
Corporation, Xtant Medical Holdings, Inc. (NYSE American: XTNT) and Medinotec, Inc. (OTCQX:MDNC). Mr. Vizirgianakis previously served
on the Board of Directors at Bioventus Inc. (Nasdaq: BVS) and Tenaxis Medical. Mr. Vizirgianakis is the former Chief Executive Officer
of medical device company, Misonix, Inc., which he led from 2016 through the company's acquisition by Bioventus Inc. in 2021. He
previously served as Managing Director of the Medical Devices business at Ascendis Health Limited (JSE: ASC) from 2014 to 2016. Mr. Vizirgianakis
co-founded Surgical Innovations, one of the largest privately-owned medical device distributors in the African region, which later became
part of Ascendis Health Limited. His career in the medical device industry also includes experience serving as Director of Sales for
sub-Saharan Africa at United States Surgical Corporation and as General Manager of South Africa at Tyco Healthcare. Mr. Vizirgianakis
holds a degree in Commerce from the University of South Africa.

 Aside from that provided above, Mr. Vizirgianakis
does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant
to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an
investment company under the Investment Company Act of 1940.

 Mr. Vizirgianakis has a degree in commerce
from the University of South Africa. The Board believes Mr. Vizirgianakis' industry knowledge, sales and marketing experience and
his international business relationships qualify him to serve as a director.

 Mr. Dwyer has been serving as the Chief Financial
Officer of Archive360, LLC since June, 2022. He served as Misonix's Chief Financial Officer from August 2, 2017 through November
2021, and then as a financial consultant to Misonix's acquirer, Bioventus, through April, 2022. From June 2015 to July 2017, Mr.
Dwyer provided financial consulting and advisory services to various companies, through the firms Dwyer Holdings and TechCXO. Prior thereto,
from November 2012 until June 2015, he was Chief Financial Officer of Virtual Piggy, Inc., a publicly traded technology company. Prior
to joining Virtual Piggy, Mr. Dwyer served as chief financial officer of Open Link Financial, Inc., a privately held company, which provides
software solutions for trading and risk management in the energy, commodity, and capital markets.

 During 2011 and 2012, Mr. Dwyer was a member of the
board of directors and chairman of the audit committee and served as interim chief administrative officer of Energy Solutions International,
Inc., a privately held company providing pipeline management software to energy companies and pipeline operators. From 2010 through 2011,
Mr. Dwyer served as chief administrative officer of Capstone Advisory Group, LLC, a privately held financial advisory firm providing corporate
restructuring, litigation support, forensic accounting, expert testimony and valuation services. Mr. Dwyer served as a consultant to Verint
Systems, Inc., a software company listed on the NASDAQ Global Market, from 2009 through 2010, assisting with SEC reporting and compliance.

 From 2005 through 2009, Mr. Dwyer served as chief
financial officer and executive vice president of AXS-One Inc., a publicly traded software company. During 2004, Mr. Dwyer served as chief
financial officer of Synergen, Inc., a privately held software company providing energy technology to utilities. Prior to 2004, Mr. Dwyer
also served as chief financial officer and executive vice president of Caminus Corporation, an enterprise application software company
that was formerly listed on the NASDAQ National Market, chief financial officer of ACTV, Inc., a digital media company that was formerly
listed on the NASDAQ National Market, and chief financial officer of Winstar Global Products, Inc., a manufacturer and distributor of
hair care, bath and beauty products until its acquisition by Winstar Communications, Inc. in 1995 when Mr. Dwyer went on to serve as senior
vice president, finance of Winstar Communications.

 Aside from that provided above, Mr. Dwyer does not
hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to
Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment
company under the Investment Company Act of 1940.

 Mr. Dwyer received his BBA in Accounting from the
University of Notre Dame in 1978 and is licensed as a Certified Public Accountant in the State of New York.

 Having received two Masters of Science degrees in
Electromechanical & Computer Engineering as well as in Biomedical Engineering in 1984 and 1988 respectively, Mr. Spirakis embarked
in an academic career in 1989 becoming a Senior Lecturer and the Head of the Biomechanics Group at the Department of Biomedical Engineering
of the University of Cape Town.

 During Mr Spirakis' tenure, besides his academic
outputs in the form of publications, conference presentations, post-graduate students' supervision and lecturing, Mr. Spirakis undertook
consulting research projects in total Knee and Hip Arthroplasty for Johnson & Johnson (DePuy) and designed orthopedic implants which
were subsequently manufactured by South African & international companies such as Zimmer (now Zimmer-Biomet).

 In 1995, Mr. Spirakis left the academic world and
assumed the responsibilities of Research & Development as well as Quality Assurance & Regulatory Affairs Directorships within
Macmed Orthopaedics, a manufacturer of total joint prostheses and spinal implants till the end of 1999.

 In 2000 Mr. Spirakis became the Business Development
Director of two sister South African marketing and selling medical devices organizations, namely SA Biomedical and Orthomedics.

 The former dealing in medical devices for a large
variety of surgical specialties (Cardiac / Vascular / General Surgery / Arthroscopy / Urology / ENT) and the latter in total joint replacements.
Orthomedics was acquired by J&J in 2008 and Mr. Spirakis continued his involvement as a business development director till 2011 when
he became one of the founders and director of Advanced Orthopaedics.

 In 2016 Mr. Spirakis accepted the Chief Executive
Officer position within Elite Surgical, a South African medical devices manufacturer and held it till 2021 when he decided to join Minoan
Medical / Disa Life Sciences as their Chief Operating Officer.

 Aside from that provided above, Mr. Spirakis does
not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant
to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an
investment company under the Investment Company Act of 1940.

 Term of Office

 Our directors are appointed for a one-year term to
hold office until the next annual general meeting of our shareholders or until they are removed from office in accordance with our bylaws.
Our officers are appointed by our board of directors and hold office until removed by the board.

 Significant Employees

 We have no significant employees other than our officer
and director.

 Family Relationships

 Aside from Gregory Vizirgianakis and Stavros G. Vizirgianakis,
who are brothers, there are no family relationships between or among the directors, executive officers or persons nominated or chosen
by us to become directors or executive officers.

 Involvement
in Certain Legal Proceedings.

 During the past 10 years, none of our current directors,
nominees for directors or current executive officers has been involved in any legal proceeding identified in Item 401(f) of Regulation
S-K, including:

 1. Any petition under the Federal bankruptcy
laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the
business or property of such person, or any partnership in which he or she was a general partner at or within two years before the time
of such filing, or any corporation or business association of which he or she was an executive officer at or within two years before the
time of such filing;

 2. Any conviction in a criminal proceeding
or being named a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

 3. Being subject to any order, judgment,
or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining
him or her from, or otherwise limiting, the following activities:

 i. Acting as a futures commission merchant,
introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person
regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter,
broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association
or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

 ii. Engaging in any type of business practice;
or

 iii. Engaging in any activity in connection
with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal
commodities laws;

 4. Being subject to any order, judgment or
decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for
more than 60 days the right of such person to engage in any type of business regulated by the Commodity Futures Trading Commission, securities,
investment, insurance or banking activities, or to be associated with persons engaged in any such activity;

 5. Being found by a court of competent jurisdiction
in a civil action or by the SEC to have violated any Federal or State securities law, and the judgment in such civil action or finding
by the Commission has not been subsequently reversed, suspended, or vacated;

 6. Being found by a court of competent jurisdiction
in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such
civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

 7. Being subject to, or a party to, any Federal
or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to
an alleged violation of:

 i. Any Federal or State securities or commodities
law or regulation; or

 ii. Any law or regulation respecting financial
institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution,
civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

 iii. Any law or regulation prohibiting mail
or wire fraud or fraud in connection with any business entity; or

 8. Being subject to, or a party to, any sanction
or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the
Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))),
or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated
with a member.

 Audit Committee

 On May 5, 2023, in connection with a requirement for
quotation on the OTCQX markets, our Board of Directors authorized the creation of an Audit Committee. Gregory Vizirgianakis, Athanasios
Spirakis and Joseph P. Dwyer currently serve on the Audit Committee.

 Athanasios Spirakis and Joseph P. Dwyer have been
determined by the Board to be independent directors within the meaning of NASDAQ Rule 5605. Mr. Dwyer was identified and designated by
the Board as an "audit committee financial expert," as defined by the SEC in Item 407 of Regulation S-K.

 The Audit Committee approves the selection of our
independent accountants and meets and interacts with the independent accountants to discuss issues related to financial reporting. In
addition, the Audit Committee reviews the scope and results of the audit with the independent accountants, reviews with management and
the independent accountants our annual operating results, considers the adequacy of our internal accounting procedures, including our
internal control over financial reporting, and considers other auditing and accounting matters including fees to be paid to the independent
auditor and the performance of the independent auditor.

 For the fiscal year ending February 28, 2025, the
Audit Committee:

 •

 Reviewed and discussed the audited financial statements with management, and

 •

 Reviewed and discussed the written disclosures and the letter from our independent auditors on the matters relating to the auditor's independence.

 Based upon the Audit Committee's review and discussion of the matters
above, the board of directors authorized inclusion of the audited financial statements for the year ended February 28, 2025 to be included
in this Annual Report on Form 10-K and filed with the Securities and Exchange Commission.

 At the 2024 annual meeting of the shareholders, our
shareholders did not ratify the appointment of BDO South Africa Inc. as our independent registered public accounting firm for fiscal
2025. Mercurius and Associates LLP was subsequently appointed as our independent registered public accounting firm.

 ITEM 11.

 EXECUTIVE COMPENSATION.

 The following summary compensation table sets forth
all compensation awarded to, earned by, or paid to the named executive officers paid by us during the years ended February 28, 2025 and
February 29, 2024.

 SUMMARY COMPENSATION TABLE

 Name

and

principal

position

 Year

 Salary ($)

 Bonus

 ($)

Stock

Awards

($)

 Option

 Awards

 ($)

 Non-Equity

Incentive Plan

Compensation

($)

 Nonqualified

 Deferred

 Compensation

 Earnings

 ($)

 All Other

 Compensation

 ($)

 Total

 ($)

 2025

 —

 —

 —

 —

 —

 —

 6,597

 —

 CEO

 2024

 —

 —

 —

 —

 —

 —

 6,597

 —

 Peter van Niekerk

 2025

 —

 —

 —

 —

 —

 —

 3,958

 —

 CFO

 2024

 —

 —

 —

 —

 —

 —

 3,958

 —

 Narrative Disclosure to the Summary Compensation
Table

 Although we do not currently compensate our officers
with any regularity, we reserve the right to provide compensation at some time in the future. Our decision to compensate officers depends
on the availability of our cash resources with respect to the need for cash to further business purposes.

 Outstanding Equity Awards at Fiscal Year-End

 The table below summarizes all unexercised options, stock that has not
vested, and equity incentive plan awards for each named executive officers as of February 28, 2025.

 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

 OPTION AWARDS

 STOCK AWARDS

Name

Number of

Securities

Underlying

Unexercised

Options

Exercisable

Number of

Securities

Underlying

Unexercised

Options

Unexercisable

Equity

Incentive

Plan

Awards:

Number of

Securities

Underlying

Unexercised

Unearned

Options

 Option

 Exercise

 Price

 ($)

Option

Expiration

Date

Number

of

Shares

or Units

of

Stock That

Have

Not

Vested

Market

Value

of

Shares

or

Units

of

Stock

That

Have

Not

Vested

($)

 Equity

 Incentive

 Plan

 Awards:

 Number

 of

 Unearned

 Shares,

 Units or

 Other

 Rights

 That Have

 Not

 Vested

 Equity

 Incentive

 Plan

 Awards:

 Market or

 Payout

 Value of

 Unearned

 Shares,

 Units or

 Other

 Rights

 That

 Have Not

 Vested

 -

 -

 -

 -

 -

 -

 -

 -

 -

 Peter van Niekerk

 -

 -

 -

 -

 -

 -

 -

 -

 -

 ITEM 12.

 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 The following table sets forth, as of May 29, 2025,
the beneficial ownership of our common and preferred stock by each executive officer and director, by each person known by us to beneficially
own more than 5% of our common stock and by the executive officers and directors as a group. Unless otherwise noted, the address of each
beneficial owner is located at Northlands Deco Park | 10 New Market Street | Stand 299 Avant Garde Avenue | North Riding | 2169.

 Title of class

 Name and address of beneficial owner (1)

 Number of shares - Beneficial ownership

 Percent of class (2)

 Gregory Vizirgianakis (3)

 4,750,179

 40.5%

 401,965

 3%

 Stavros G. Vizirgianakis (4)

 4,750,179

 40.5%

 0%

 0%

 Total of All Directors and Executive Officers (5 persons):

 9,902,323

 84%

 More Than 5% Beneficial Owners:

 NONE

 (1)

 As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have "beneficial ownership" of any security that such person has the right to acquire within 60 days after such date.

 (2)

 The percent of class is based on 11,733,750 voting shares as of May 29, 2025.

 (3)

 Includes 4,750,179 shares of common stock held by Medisol Pty Ltd that Mr. Vizirgianakis has sole voting and investment power.

 (4)

 Includes 4,750,179 shares held in his name.

 ITEM 13.

 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

 Other than as disclosed below and in "Executive
Compensation," there have been no transactions involving the Company since the beginning of the last fiscal year, or any currently
proposed transactions, in which the Company was or is to be a participant and the amount involved exceeds $120,000 or one percent of the
average of the Company's total assets at year-end for the last two completed fiscal years, and in which any related person had or
will have a direct or indirect material interest.

 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

 Amount
 for the 2025 fiscal year

 Minoan Medical Proprietary Limited

 Medical investment company controlled by Dr Gregory Vizirgianakis

 Related Party Loan

 Loan
 payable - $940,001

 Minoan Capital Proprietary Limited

 Property investment company controlled by Dr Gregory Vizirgianakis

 Related party loan

 Rental Expenses

 Loan payable - $276

 Lease liability - $40,756

 Medinotec Capital Proprietary Limited

 The African holding company of the Medinotec Group of Companies

 Related party loan payable to Minoan Capital

 Medinotec Incorporated in Nevada is the 100% ultimate parent entity

 n/a

 DISA Medinotec Proprietary Limited

 The African operating and manufacturing company

 Related party loan with Minoan Medical

 Operational income and expenses with Minoan Medical

 Medinotec Incorporated in Nevada is the 100% ultimate parent entity

 n/a

 Medinotec Incorporated Nevada

 Ultimate parent of Medinotec Capital and DISA Medinotec

 All of the above for its related subsidiaries

 Joseph P Dwyer

 This is the entity owned by the shareholders and primarily controlled by Dr Gregory Vizirgianakis and his Brother Stavros Vizirgianakis

 n/a

 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

 Joseph P Dwyer

 This is the entity owned by the shareholders and primarily controlled by Dr Gregory Vizirgianakis and his Brother Stavros Vizirgianakis

 n/a

 Chief financial officer of the Medinotec Group of Companies

 Related directorships disclosed above

 Minority Shareholder in Medinotec Inc

 n/a

 Chief Executive officer of the Minoan Group of Companies

 Brother of Stavros Vizirgianakis

 Related directorships disclosed above

 Shareholder in Medinotec Inc and Kingstyle investments.

 n/a

 Non-Executive director of the Medinotec Group of companies

 Brother of Gregory Vizirgianakis

 n/a

 n/a

 Joseph Dwyer

 Non-Executive director of the Medinotec Group of companies

 n/a

 n/a

 Independent director of the Medinotec Group of companies

 n/a

 n/a

 a. Rent

 DISA Medinotec Propriety Limited
leases commercial buildings from Minoan Capital Proprietary Limited ("Minoan Capital"). Minoan Capital is owned 100 % by the
Chief Executive Officer of the Medinotec Group of Companies, Dr. Gregory Vizirgianakis.

 Set forth below is a table showing
the Consolidated entities' rent paid for the year ended February 28, 2025, with Minoan Capital and the Melville, New York Office:

 February 28,
 2025

 February 29,
 2024

 Rent

 51,759

 32,142

 Rent is comparable to rent charged for
similar properties in the same relative area. The Consolidated entities do market research of a Minimum and a 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 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.

 b. Loan

 Loans payable includes an unsecured
loan of a $940,001 from the prior parent entity of DISA Medinotec in South Africa called 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 from the IPO date or from the date
at which the Company starts trading on a national exchange (as defined in Section 3(a)(1) of the Securities Exchange Act of 1934, as
amended), to repay the loan. During these 3 years the loan will carry interest at the prevailing prime lending rate of the time.

 The Minoan Medical loan decreased
by $829,687 during the year ended February 28, 2025.

 The prevailing prime lending rate
on the quarter ending February 28, 2025 in South Africa is 11.00%. The interest charged for the year was $141,748 and a 1% movement in
the interest rates constitutes a value of $12,886. 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.

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

 Minoan Medical's ultimate
beneficial owner is the CEO of the Medinotec Group of Companies Dr. Gregory Vizirgianakis and is used to hold his investments of which
DISA Medinotec Proprietary Limited Incorporated was one before was got transferred into the Medinotec Group of Companies.

 ITEM 14.

 PRINCIPAL ACCOUNTING FEES AND SERVICES.

 Mercurius & Associates LLP served as our independent
registered auditors for the year ended February 28, 2025.

 Audit
Fees

 Please refer below for the total audit fees for the
Company's fiscal years ended February 28, 2025 and February 29, 2024, for professional services rendered by our independent auditors
for the audit and review of our financial statements.

 February 28,
 2025

 February 29,
 2024

 Audit Fees

 159,620

 166,271

 Audit Related Fees

 There were no fees for audit related services rendered
by our independent auditors for the years ended February 28, 2025 and February 29, 2024, respectively.

 Tax Fees

 For the Company's fiscal years ended February
28, 2025 and February 29, 2024, there were no fees for professional services rendered by our independent auditors for tax compliance,
tax advice, and tax planning.

 All Other Fees

 For the Company's fiscal years ended February
28, 2025 and February 29, 2024, we were not billed any other fees by our auditors.

 ITEM 15.

 EXHIBIT AND FINANCIAL STATEMENT SCHEDULES.

 (a)(1)

 FINANCIAL STATEMENTS.

 The following documents are included on pages F-1
through F-23 attached hereto and are files as part of this Annual Report on Form 10-K. Reference is made to the Index to Consolidated
Financial Statements on Page F-1.(a)(2) EXHIBITS.

 (a)(2)

 EXHIBITS

 We have filed the exhibits listed on the accompanying
Exhibit Index of this registration statement and below in this Item 15:

 Incorporated by

 Exhibit

 Reference

 Filed or Furnished

 Number

 Exhibit Description

 Form

 Exhibit

 Filing Date

 Herewith

 2.1

 Share Exchange Agreement, dated March 2, 2022

 S-1

 2.1

 6/2/2022

 3.1

 Articles of Incorporation

 S-1

 3.1

 6/2/2022

 3.2

 Articles of Amendment

 S-1

 3.3

 6/2/2022

 3.3

 Bylaws

 S-1

 3.3

 6/2/2022

 4.1

 Unsecured Revolving Promissory Note, dated September 16, 2022

 S-1/A

 4.1

 11/2/2022

 4.2

 Description of Registrant's Securities

 4.2

 7/5/2024

 10.1

 Lease Agreement dated January 28, 2020 between Minoan Capital and DISA Medinotec Proprietary Limited

 S-1/A

 10.1

 8/4/2022

 10.2

 Exclusive Distribution Agreement dated March 1, 2020 between Disa Life Sciences Proprietary Limited and DISA Medinotec Proprietary Limited

 S-1/A

 10.2

 8/4/2022

 10.3

 Letter of Offer, dated April 26, 2021 with Gregory Vizirgianakis

 S-1/A

 10.3

 10.4

 Letter of Offer, dated April 26, 2021 with Peter van Niekerk

 S-1/A

 10.4

 10.5

 Letter of Offer, dated June 13, 2021 with Stavros Vizirgianakis

 S-1/A

 10.5

 10.6

 Letter of Offer, dated June 13, 2021 with Joseph P Dwyer

 S-1/A

 10.6

 10.7

 Loan Certificate dated Mary 1, 2017

 S-1/A

 10.7

 21.1

 List
 of Subsidiaries Medinotec Capital Proprietary Limited and DISA Medinotec Proprietary Limited

 21.1

 5/30/2023

 31.1

 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

 X

 31.2

 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

 X

 32.1

 Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350.

 X

 101.INS

 X

 101.SCH

 X

 101.CAL

 X

 101.DEF

 X

 101.LAB

 X

 101.PRE

 X

 ITEM 16.

 10-K SUMMARY

 None

 SIGNATURES

 Pursuant to the requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

 DATE

 TITLE

 /s/ Gregory Vizirgianakis

 Chief Executive Officer and Director

 (Principal Executive Officer)

 DATE

 TITLE

 /s/ Pieter van Niekerk

 Chief Financial Officer and Director

 (Principal Financial Officer and Principal Accounting Officer)

 Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates
indicated.

 DATE

 TITLE

 /s/ Gregory Vizirgianakis

 Chief Executive Officer and Director

 (Principal Executive Officer)

 DATE

 TITLE

 /s/ Pieter van Niekerk

 Chief Financial Officer and Director

 (Principal Financial Office and Principal Accounting Officer)

 DATE

 TITLE

 /s/ Stavros G. Vizirgianakis

 Stavros G. Vizirgianakis

 DATE

 TITLE

 /s/ Joseph P. Dwyer

 ITEM 15

 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 MEDINOTEC, INC.

 CONSOLIDATED FINANCIAL STATEMENTS

 FOR THE YEARS ENDED FEBRUARY 28, 2025 AND FEBRUARY
29, 2024

 CONTENTS

 Page

 Reports of Independent Registered Public Accounting Firms

 Report for the year ended February 28, 2025 – Mercurius & Associates LLP - Firm ID: 3223

 Report for the year ended February 29, 2024 – BDO South Africa Inc. - Firm ID: 1368

 Consolidated Balance Sheets as of February 28, 2025 and February 29, 2024

 Consolidated Statements of Operations and Comprehensive Income/ (Loss) for the Years Ended February 28, 2025 and February 29, 2024

 Consolidated Statements of Stockholders' Equity for the Years Ended February 28, 2025 and February 29, 2024

 Consolidated Statements of Cash Flows for the Years Ended February 28, 2025 and February 29, 2024

 Notes to Consolidated Financial Statements

 Report of Independent Registered Public Accounting
Firm

 To the Shareholders and Board of Directors of
Medinotec Inc.

 Opinion on the Consolidated Financial Statements

 We have audited the accompanying consolidated balance
sheet of Medinotec Inc. and its subsidiaries (collectively, the "Company") as of February 28, 2025, the related consolidated
statement of operations and comprehensive income/(Loss), consolidated statement of stockholders' equity and consolidated statements
of cash flows for the year then ended, and the related notes (collectively referred to as the "consolidated financial statements").
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company
as of February 28, 2025 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.

 Basis for Opinion

 These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements
based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audit in accordance with the standards
of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion.

 Our audit included performing procedures to assess
the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides
a reasonable basis for our opinion.

 Critical Audit Matters

 Critical Audit matters are matters arising from the
current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee
and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially
challenging, subjective or complex judgments. We determined that there are no critical audit matters.

 Mercurius & Associates LLP

 We have served as the Company's auditor since
2024

 New Delhi, India

 F- 1

 Report of Independent Registered Public Accounting Firm

 Shareholders and Board of Directors

 Medinotec Inc.

 Johannesburg, South Africa

 Opinion on the Consolidated Financial
Statements

 We have audited the accompanying consolidated
balance sheet of Medinotec Inc. (the "Company") as of February 29, 2024, the related consolidated statements of operations
and comprehensive loss, stockholders' equity/(deficit), and cash flows for the year then ended, and the related notes (collectively
referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly,
in all material respects, the financial position of the Company at February 29, 2024, and the results of its operations and its cash flows
for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

 Basis for Opinion

 These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated
financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audit in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain
an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of
the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our audit included performing procedures
to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides
a reasonable basis for our opinion.

 /s/ BDO South Africa Inc.

 BDO South Africa Incorporated

 Registered Auditors

 Jacques Barradas

 We served as the Company's auditor from 2023 to 2024.

 Johannesburg,
South Africa

 July 3, 2024

 BDO South Africa Incorporated

 Registration number:
1995/002310/21

 Practice number: 905526

 VAT number: 4910148685

 Chief Executive Officer: LD Mokoena

 A full list of all company directors is available on www.bdo.co.za

 The company's principal place of business is at The Wanderers
Office Park, 52 Corlett Drive, Illovo, Johannesburg where a list of directors' names is available for inspection. BDO South Africa
Incorporated, a South African personal liability company, is a member of BDO International Limited, a UK company limited by guarantee,
and forms part of the international BDO network of independent member firms.

 F- 2

 Consolidated
Balance Sheets for the Medinotec Group of Companies as of February 28, 2025 and February 29, 2024

 2025

 $

 2024

 $

 Assets

 Current Assets

 Cash

 2,769,686

 2,808,910

 Accounts receivable, net of allowances

 2,612,440

 589,761

 Inventory

 988,341

 863,452

 Other current assets

 52,719

 117,174

 Total Current Assets

 6,423,186

 4,379,297

 Note receivable

 —

 —

 Property, plant and equipment, net of accumulated depreciation

 348,486

 320,122

 Deferred tax asset

 —

 42,881

 Operating right-of-use asset

 37,301

 61,979

 Total Assets

 $

 6,808,973

 $

 4,804,279

 Liabilities and Stockholders' Equity

 Current Liabilities

 Accounts payable and accrued liabilities

 1,476,987

 801,550

 Due to stockholders/Directors

 —

 1,587

 Operating lease liability, current portion

 28,060

 24,316

 Total current Liabilities

 1,505,047

 827,453

 Long Term Liabilities

 Loans payable

 940,277

 1,769,957

 Deferred tax liabilities

 80,124

 —

 Operating lease liability, net of current portion

 12,696

 39,698

 Total Liabilities

 2,538,144

 2,637,108

 Equity

 Capital stock

 Capital stock additional paid in capital

 Retained earnings (Accumulated deficit) - ending

 918,115

 ( 1,241,325

)

 Accumulated other comprehensive income

 44,589

 100,371

 Total Equity

 4,270,829

 2,167,171

 Total Liabilities and Equity

 $

 6,808,973

 $

 4,804,279

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

 F- 3

 Consolidated Statements of Operations and Comprehensive Income/ (Loss)
for the Medinotec Group of Companies for the Years Ended February 28, 2025 and February 29, 2024

2025
 $

 2024
 $

 Revenue

 9,113,607

 5,020,391

 Cost of goods sold

 ( 4,252,821
)

 ( 2,577,922
)

 Gross profit

 4,860,786

 2,442,469

 Operating expenses

 Selling expenses

 ( 113,194
)

 ( 84,564
)

 Depreciation and amortization expense

 ( 73,846
)

 ( 63,948
)

 ( 1,391,114
)

 ( 1,671,028
)

 Research and development expenses

 ( 91,133
)

 ( 22,351
)

 Total operating expenses

 ( 1,669,287
)

 ( 1,841,891
)

 Income
 from operations

 3,191,499

 600,578

 Non operating income and expenses

 Interest income

 8,668

 60,590

 Interest expense

 ( 176,416
)

 ( 277,230
)

 Other revenue

 4,304

 Impairment of note receivable

 —

 ( 642,012
)

 Total non-operating income and expenses

 ( 167,361
)

 ( 854,348
)

 Income/(loss) before income taxes

 3,024,138

 ( 253,770
)

 Income taxes

 Current income taxes

 ( 737,389
)

 ( 81,198
)

 Deferred income taxes

 ( 127,276
)

 ( 69,720
)

 Net income/(loss)

)

 Net earnings/ (loss) per share, basic and diluted:

 0.18

 ( 0.03
)

 Weighted average shares used in computing net loss per share, basic and diluted

 Net income/(loss)

)

 Other comprehensive income/(loss)

 Foreign currency translation gain/(loss)

 ( 55,815
)

 15,804

 Other comprehensive income/(loss)

 (55,815
)

 15,804

 Comprehensive income/(loss)

 2,103,658

 ( 388,884
)

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

 F- 4

 Consolidated Statements of Stockholders' Equity for the
Years Ended February 28, 2025 and February 29, 2024

 Common Stock

 Common Stock Additional Paid in Capital

 Shares

 Amount
 $

 Amount
 $

 Retained Earnings/(Accumulated Deficit)
 $

 Accumulated Comprehensive Income
 $

 Total
 $

 Balance, March 1, 2023

 ( 836,637
)

 84,567

 2,556,055

 Net (loss) for the period

 —

 —

 —

)

 —

)

 Other comprehensive income / (loss)

 —

 —

 —

 —

 15,804

 15,804

 Balance February 29, 2024

 ( 1,241,325
)

 100,371

 2,167,171

 Net income for the period

 —

 —

 —

 —

 Other comprehensive income / (loss)

 —

 —

 —

 —

 ( 55,815
)

 ( 55,815
)

 Reclassification adjustment

 —

 —

 —

 ( 33
)

 —

 Balance, February 28, 2025

 918,115

 44,589

 4,270,829

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

 F- 5

 Consolidated Statements of Cash Flows for the Years Ended February 28,
2025 and February 29, 2024

 2025

 $

 2024

 $

 CASH FLOWS FROM OPERATING ACTIVITIES:

 Net income/(loss)

)

 Depreciation

 73,846

 88,225

 Foreign currency transaction gain (loss), unrealized

 ( 5,765

)

 ( 3,916

)

 Deferred income taxes and tax credits

 127,276

 97,273

 for income taxes

 737,389

 139,712

 Impairment provision on notes receivable

 —

 642,012

 Bad debt write-off

 —

 52,133

 Operating lease liability

 ( 32,030

)

 ( 13,299

)

 (Increase)/Decrease in prepayments

 ( 11,944

)

 ( 10,674

)

 (Increase)/Decrease in receivables

 ( 2,039,246

)

 ( 631,248

)

 (Increase)/Decrease in inventories

 ( 91,639

)

 ( 480,640

)

 Increase/(Decrease) in accounts payable and accrued expenses

 226,855

 621,650

 Net cashflow from/ (used in) operations

 1,144,215

 96,540

 Accrued interest

 —

 ( 49,262

)

 Tax paid

 ( 266,381

)

 ( 33,036

)

 TOTAL CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES

 877,834

 14,242

 CASH FLOWS FROM INVESTING ACTIVITIES:

 Payments to acquire property, plant, and equipment

 ( 89,013

)

 ( 2,255

)

 Cash received from note receivable

 —

 12,380

 TOTAL CASH FLOWS FROM/(USED BY) INVESTING ACTIVITIES

 ( 89,013

)

 10,125

 CASH FLOWS FROM FINANCING ACTIVITIES:

 Proceeds from issuance of long-term debt

 1,588

 Repayment
 of debt

 ( 895,279

)

 ( 9,680

)

 TOTAL CASH FLOWS FROM/(USED BY) FINANCING ACTIVITIES

 ( 894,482

)

 ( 8,092

)

 OTHER ACTIVITIES:

 Effect of exchange rate on cash and cash equivalents

 66,437

 ( 34,822

)

 Net cash increase (decreases) in cash and cash equivalents

 ( 39,224

)

 ( 18,547

)

 Cash and cash equivalents at beginning of period

 2,808,910

 2,827,457

 Cash and cash equivalents at end of period

 2,769,686

 2,808,910

 Supplemental disclosures

 Interest income

 73,468

 60,590

 Interest expense

 ( 176,416

)

 ( 277,230

)

 Right-of-use Assets in exchange for lease liabilities

 —

 76,940

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

 F- 6

 Notes to Consolidated Financial Statements

 1. Description of
Business

 Medinotec Inc. is a US-based company
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.

 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.

 F- 7

 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 year-end exchange rates and income and expense accounts are
translated at average exchange rates in effect during the year. 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.

 One major client constitutes 87 %
of the accounts receivable balance as at February 28, 2025, compared to 83 % on February 29, 2024.

 An allowance for credit losses is
calculated taking into account all accounts older than 91+ days.

 F- 8

 e. Property, plant and
equipment

 i. Depreciation
rates

 Property and equipment are stated
at cost less accumulated depreciation and amortization. Depreciation is provided for using the straight-line method over the estimated
useful lives as follows for the major classes of assets:

 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

 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.

 F- 9

 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 loans 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.

 F- 10

 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 is recorded in reserves under the heading accumulated comprehensive income. The effect on
the reserves for the year ended February 28, 2025 was ( $ 55,815) compared to $ 15,804 for the year ended February 29, 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
loss for the year ended February 28, 2025 was $ 55,815, compared to gains of $ 15,804 for the year ended February 29, 2024.

 n. Revenue recognition

 Revenue represents the amount of
consideration expected to be received from customers in exchange for the transfer of products. Net sales exclude value added and other
taxes we collect from customers. Other costs to obtain and fulfill contracts are generally expensed as incurred due to the short-term
nature of most of our sales. Shipping and handling costs charged to customers are included in net revenue.

 F- 11

 The Company
generates revenues through two distinct revenue sources:

 1.

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

 2.

 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,

 •

 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 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 customers 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 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 transfer of control will typically be on the date of shipment.

 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.

 F- 12

 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
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 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 Life Sciences. For the year ending February 28, 2025, 88 %
of the Company's total revenue is derived from this single customer in the distribution environment in South Africa compared to 86 %
for the year ending February 29, 2024. During fiscal 2025, a receivable was recognized for revenue earned from DISA Life Sciences.
As of February 28, 2025, no sales taxes have been recorded, as no invoice has been issued. The related sales tax return will be finalized
in accordance with standard invoicing timelines or adjusted as necessary upon invoice issuance.

 o. Segment Reporting

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

 Medinotec Inc Group Consolidated Years Ended

 Feb 28, 2025
 $

 Feb 29, 2024
 $

 Outside of United States of America

 Internally Designed/Manufactured Sales

 863,337

 976,291

 Distribution Agreement Sales

 7,572,165

 3,490,133

 Sales Generated inside the United States of America

 Internally Designed/Manufactured Sales

 678,105

 553,967

 9,113,607

 5,020,391

 F- 13

 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 years ending February 28, 2025 and February 29, 2024:

 1.

 Income/(Loss) from
 operations

 Inside the United States

 Outside the United States

 Total

 2025

 2024

 2025

 2024

 2025

 2024

 Revenue

 678,105

 553,967

 8,435,502

 4,466,424

 9,113,607

 5,020,391

 Cost of goods sold

 ( 87,826)

 ( 47,708)

 ( 4,164,995)

 ( 2,530,214)

 ( 4,252,821)

 ( 2,577,922)

 Gross profit

 590,279

 506,259

 4,270,507

 1,936,210

 4,860,786

 2,442,469

 Selling expenses

 ( 65,646)

 ( 30,611)

 ( 47,548)

 ( 53,953)

 ( 113,194)

 ( 84,564)

 Depreciation expense

 -

 -

 ( 73,846)

 ( 63,948)

 ( 73,846)

 ( 63,948)

 ( 725,834)

 ( 477,226)

 ( 665,280)

 ( 1,193,802)

 ( 1,391,114)

 ( 1,671,028)

 Research and development expenses

 ( 50,000)

 -

 ( 41,133)

 ( 22,351)

 ( 91,133)

 ( 22,351)

 Income/(loss) from operations

 ( 251,201)

 ( 1,578)

 3,442,700

 602,156

 3,191,499

 600,578

 Other
 income/(expenditure)

 -

 -

 -

 -

 ( 1,032,026)

 ( 1,005,266)

 Net
 income/(loss)

 -

 -

 -

 -

 ( 404,688)

 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.

 F- 14

 2.

 Total Assets

 Inside the United States

 Outside the United States

 Total

 2025

 2024

 2025

 2024

 2025

 2024

 Total
 assets

 2,181,184

 2,697,502

 4,627,789

 2,106,777

 6,808,973

 4,804,279

 The major component of total assets is
"Cash" of $ 2,769,686 for the year ending February 28, 2025 and $ 2,808,910 for the year ending February 29, 2024. A significant
portion of this is maintained inside the United States in USD of $ 2,019,628 for the year ending February 28, 2025 and $ 2,478,434
for the year ending February 29, 2024.

 p. Cost of goods sold

 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

consist mostly of personnel costs, consulting fees as well as audit fees.

 r. Research and development

 All research and development expenses
are expensed as incurred and are included in operating expenses. Our research and development efforts are limited in scope and primarily
focused on enhancing existing production processes. We undertake R&D projects only when a working prototype and proof of concept exist,
and after assessing economic viability. Projects that cannot be efficiently integrated into our current manufacturing infrastructure are
not pursued.

 s. Interest expense

 Interest expense relates mostly
to is 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 year end. The terms of this loan are deemed to be
market related.

 t. Earnings per share

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

 The diluted earnings/(loss) per
share is computed by giving effect to all potentially dilutive securities outstanding for the period, by applying the treasury stock
method. 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. There were no potentially dilutive securities
outstanding during the fiscal year ended February 28, 2025; accordingly, no additional shares have been included in the diluted earnings
per share calculation.

 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.

 F- 15

 v. Use
of estimates

 i. Actual
results could differ

 The preparation of consolidated financial
statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates and may have an impact on future periods. As detailed in the Critical Accounting
Estimates section above, the key accounting estimates are as follows:

 •

 Allowance for credit losses on loans receivables

 •

 Inventory: Valuation, costing and obsolescence

 •

 Deferred tax assets

 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 does not expect the adoption
of this standard to have a material impact on its condensed 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 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 does not expect the adoption of
this standard to have a material impact on the Company's condensed consolidated financial statements and related disclosures.

 F- 16

 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 and the Company is in a loss position and not incurring any
tax expenses.

 3. Fair
Value Measurements

 The Consolidated entities report
all financial 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. 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.

 At February 28, 2025 and February
29, 2024, 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. Our current and long-term debt arrangements are classified as level 2 financial
instruments.

 F- 17

 4. Property, plant and equipment

 a. Accounts by year end

 Property, plant and equipment consist
of the following:

 Feb
 28,

 2025
 $

 Feb
 29,

 2024
 $

 Computer software

 1,133

 —

 Office equipment

 —

 —

 Motor vehicles

 11,889

 11,889

 Small assets

 —

 —

 Plant and machinery

 1,144,371

 1,056,830

 Furniture and fittings

 99,098

 99,098

 Computer equipment

 146,437

 145,891

 Laboratory equipment

 239,834

 238,799

 Total cost

 1,642,762

 1,552,507

 Foreign currency adjustment

 38,373

 35,626

 Total accumulated depreciation

 ( 1,332,649
)

 ( 1,268,011
)

 Total

 348,486

 320,122

 Depreciation of property, plant and
equipment totaled approximately $ 95,734 for the period ending February 28, 2025 compared to $ 88,225 for the period ending February 29,
2024.

 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 $ 21,888 was allocated
to Cost of Goods Sold for the year ending February 28, 2025, compared to $ 24,277 for the year ending February 29, 2024.

 5. Accounts
receivable, net of allowances

 a. Accounts receivable by
period

 Accounts receivable consist of
the following:

 2025
 $

 2024
 $

 Trade
 accounts receivable

 2,682,361

 641,367

 Allowance for
 expected credit losses

 ( 69,921
)

 ( 51,606
)

 Total

 2,612,440

 589,761

 F- 18

 6. Inventories

 a. Accounts by period

 Inventory consists of the following:

 2025
 $

 2024
 $

 Raw
 materials

 261,899

 291,389

 Work in progress

 —

 Finished goods

 731,788

 570,061

 Less provisions
 for obsolescence

 ( 10,494
)

 ( 10,221
)

 Goods in transit

 4,842

 12,223

 Total

 988,341

 863,452

 7. Other
current assets

 a. Other current assets by
period

 Other current assets consist
of the following:

 2025
 $

 2024
 $

 Prepayments

 48,405

 39,959

 Deposits paid

 2,681

 2,612

 Other receivables

 1,633

 74,603

 Total

 52,719

 117,174

 8. Note
 receivable

 2025

 $

 2024

 $

 Note receivable

 —

 —

 Total

 —

 —

 The Trachealator product obtained FDA
approval in November 2021, 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 no longer backed by any Trachealator revenue streams.
This does not change that Innovative Outcomes will still be liable for payment of this in the future. Should payments be received this
provision will be reversed with the same amount of cashflow received. We have taken legal action in order to recover the amount outstanding.

 F- 19

 9. Loans
 Payable

 a. Loans from related parties

 2025
 $

 2024
 $

 Minoan Medical Proprietary Limited

 Opening balance

 1,769,688

 1,862,973

 Interest accrued

 141,748

 236,873

 Received/Issued (1)

 1,664,939

 2,076,257

 Repayments (1)

 ( 2,701,966
)

 ( 2,323,089
)

 Foreign exchange difference

 65,592

 ( 83,326
)

 Closing balance

 940,001

 1,769,688

 Minoan Capital Proprietary Limited

 Opening balance

 Foreign exchange difference

 ( 4
)

 Closing balance

 Total debt

 940,277

 1,769,957

 (1)
During the fiscal year ended February 29, 2024, the
Company entered into a non-cash settlement arrangement involving its loan payable to Minoan Medical. Under this arrangement, a third-party
trading partner settled a portion of the loan balance directly with Minoan Medical on behalf of Medinotec. The net impact of this arrangement
was a non-cash offset of $ 339,209. During the fiscal year ended February 29, 2024, the Company made cash loan payment in the amount a
 $ 9,680, which is included in the financing cash outflows in the consolidated statement of cash flows.

 Minoan Medical Proprietary Limited:

 Loans payable consists of a $ 940,001
unsecured loan from the prior parent entity of DISA Medinotec in South Africa called 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 of 31 March 2023 or a date at
which the Company starts trading on a a national exchange (as defined in Section 3(a)(1) of the Securities Exchange Act of 1934, as amended)
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 11.00 % at year end compared to 11.75 % on February 29, 2024. The terms of this loan are deemed to be market
related.

 The Minoan Medical loan decreased
by $ 829,687 during the year ended February 28, 2025 as detailed in the table above.

 The interest charged for the year
was $ 141,748 and a 1% movement in the interest rates constitutes a value of $12,886.

 The Company has the option for
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.

 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.

 F- 20

 10. Accounts
 payable and accrued expenses

 a. Accounts payable by period

 Accounts payable consist of the following:

 2025

 $

 2024

 $

 Trade accounts payable

 1,198,953

 588,640

 Accrued payroll, payroll taxes and leave pay

 9,656

 11,684

 Provision for professional fees

 —

 92,000

 Royalties payable

 16,462

 35,139

 Tax liability

 195,037

 53,646

 Other payables

 56,879

 20,441

 Total

 1,476,987

 801,550

 One major European Cardiac supplier constitutes 74% (61% in prior period)
of the total trade accounts payabl e

 11. Commitments

 a. Leases and deferred rent

 The Company accounts for leases under ASC
842, Leases. The Company leases office and warehouse spaces under a cancelable operating lease agreement with contractual terms
from August 1, 2023 to July 31, 2026 from a third-party entity that is considered a related party due to mutual directorship with a member
of the Company's Board. 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.
Management believes the terms of the lease are consistent with market rates and were entered into at arm's length.

 Operating lease right-of-use (ROU) assets
and corresponding lease liabilities are recognized on the consolidated balance sheet at the commencement date based on the present value
of future lease payments. The Company uses its incremental borrowing rate to discount lease payments, as the implicit rate is not readily
determinable. Lease expense is recognized on a straight-line basis over the lease term. Short-term leases (terms of 12 months or less)
are not capitalized and are expensed as incurred.

 Rental expense for operating leases
for the period ended February 28, 2025 was $ 32,031 compared to $ 32,142 for the period ended February 29, 2024.

 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 February 28, 2025 was as follows:

 Years ending February 26/27:

 Amounts

 2026

 31,370

 2027

 13,071

 Total undiscounted lease payments:

 44,441

 Less: Imputed Interest

 ( 3,685
)

 Present value of operating lease liabilities

 40,756

 Operating lease liabilities, current portion

 28,060

 Operating lease liabilities, net of current portion

 12,696

 F- 21

 The carrying amount of the operating right-of-use
asset as of February 28, 2025 was as follows:

 Amounts

 Opening balance at March 1, 2024

 61,979

 Accumulated depreciation

 ( 24,678
)

 Closing balance at February 28, 2025

 37,301

 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 normal course of business,
the consolidated entities my agree to indemnify third parties with whom it enters into contractual relationships, including customers,
lessors, and parties to other transactions with the Consolidated entities, with respect to certain matters. The Consolidated 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 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 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 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.

 12. Stockholders'
 equity/(deficit)

 a. Authorized and issued stock by period

 Authorized:

 As of February 28, 2025 the Company
had 188,266,250 shares of common stock authorized and available to issue for purposes of satisfying conversion of preferred stock, the
exercise and future grant of common stock options, and for purposes of any future business acquisitions and transactions.

 As of February 28, 2025, Medinotec
Inc., the parent Company had 20,000,000 shares of preferred stock authorized and available to issue.

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

 Issued and outstanding shares

 2025

 2024

 Common shares

 Stock issued

 —

 —

 Total

 Amount of shares

 2025
 $

 2024
 $

 Common shares

 Stock issued

 —

 —

 Total

 F- 22

 13. Income
 taxes

 a. Provision for income taxes

 The components of income tax expense are
as follows:

 2025

 2024

 Current expense from income taxes:

 Federal

 17,666

 ( 47,753
)

 State

 1,525

 ( 5,892
)

 Foreign

 ( 756,580
)

 ( 27,553
)

 Total current expense from income taxes

 ( 737,389
)

 ( 81,198
)

 Deferred benefit (expense) from income taxes

 Federal

 —

 —

 State

 —

 —

 Foreign

 ( 127,276
)

 ( 69,720
)

 Total deferred benefit (expense) from income taxes

 ( 127,276
)

 ( 69,720
)

 Total

 $
 ( 864,665
)

 $
 ( 150,918
)

 The following table sets forth a reconciliation
from the U.S statutory federal income tax rate to the effective income tax rate:

 2025

 2024

 Federal income tax rate

 %

 %

 Permanent differences

 ( 4

 %)

 ( 18

 %)

 State taxes

 %

 ( 2

 %)

 Valuation allowance

 %

 ( 52

 %)

 Foreign rate differential

 %

 ( 7

 %)

 Other

 %

 ( 1

 %)

 Effective rate

 %

 ( 59

 %)

 F- 23

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

 The following table sets forth the significant
components of deferred tax assets and liabilities:

 2025

 $

 2024

 $

 Deferred tax assets

 for Professional fees

 —

 24,840

 Leave
 pay provision

 1,244

 for stock obsolescence

 2,166

 2,110

 for bad debt

 17,504

 13,792

 Unrealised profit

 inventory

 24,503

 —

 for royalties

 4,445

 9,487

 Commission
 accrual

 3,731

 Impairment
 of note receivable

 173,803

 167,574

 Foreign
 tax credits

 264,820

 —

 Net
 operating loss - State

 6,066

 —

 Advanced
 income

 12,661

 —

 Lease
 liabilities

 38,234

 17,283

 Total
 deferred tax assets

 545,829

 236,790

 Less
 valuation allowance

 ( 462,576

)

 ( 177,175

)

 Deferred
 tax assets, net

 83,253

 59,615

 Deferred
 tax liabilities:

 Right-of-use
 assets

 ( 37,302

)

 ( 16,734

)

 Uninvoiced
 revenue GAAP adjustment

 ( 126,075

)

 —

 Total
 deferred tax liabilities

 ( 163,377

)

 ( 16,734

)

 Deferred
 tax assets/(liabilities), net

 ( 80,124)

 42,881

 Deferred tax assets refer to assets that
are attributable to differences between the 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.
It is management's estimate that certain deferred tax assets will be utilized in full in the next 12 months.

 c. Other

 The
geographic components of income/(loss) before income taxes consisted of the following for the years ended February 28, 2025 and February
29, 2024:

 2025

 2024

 United
 States operations

 $
 ( 248,501
)

 $
 ( 594,328
)

 International
 operations

 3,272,639

 340,558

 (Loss)
 income before taxes

 $
 3,024,138

 $
 ( 253,770
)

 F- 24

 No
U.S. federal tax has been provided on the undistributed earnings of the foreign subsidiaries as of February 28, 2025 as the company intends
to permanently reinvest the earnings. As of February 28, 2024, the Company has no liabilities for uncertain tax positions. It is the
Company's policy to record inter est and penalties as a component of tax expense. The Company files income tax returns in
the U.S. Federal jurisdiction, various U.S. state jurisdictions and South Africa. With few exceptions, the fiscal years that remain subject
to examination are February 29, 2024 through February 28, 2025.

 In October 2021, the Organisation for Economic
Co-operation and Development (OECD)/G20 Inclusive Framework released a two-pillar solution to address the tax challenges of the digital
economy. Pillar Two introduces a global minimum corporate tax regime that applies to multinational enterprises (MNEs) with annual consolidated
revenue of 750 million or more.

 The Company operates manufacturing and
distribution activities in several jurisdictions, including the United States and South Africa. Although South Africa has announced its
intention to implement a Qualified Domestic Minimum Top-Up Tax (QDMTT) beginning in 2024 under Pillar Two, the Group's consolidated
revenue for the past two fiscal years has not exceeded the 750 million threshold. As such, the Group is not currently within the
scope of the Pillar Two global minimum tax rules.

 The Company continues to monitor developments
related to Pillar Two in the jurisdictions in which it operates, including the United States and South Africa. If future changes to revenue
thresholds or group composition bring the Company into scope, the potential tax impacts will be assessed in accordance with ASC 740, Income
Taxes.

 Based on the current scope criteria and
the absence of substantively enacted legislation in the United States, no amounts have been recognized in the consolidated financial statements
related to Pillar Two. Any future obligations arising from the implementation of these rules, should the Group become subject to them,
will be accounted for as current-period tax expenses, consistent with the FASB staff guidance issued in 2023.

 14. Transactions with
related parties

 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

 Amount
 for the 2025 fiscal year

 Minoan Medical Proprietary Limited

 Medical investment company controlled by Dr Gregory Vizirgianakis

 Related Party Loan

 Loan
 payable - $ 940,001

 Minoan Capital Proprietary Limited

 Property investment company controlled by Dr Gregory Vizirgianakis

 Related party loan

 Rental Expenses

 Loan payable - $ 276

 Lease liability - $ 40,756

 Medinotec Capital Proprietary Limited

 The African holding company of the Medinotec Group of Companies

 Related party loan payable to Minoan Capital

 Medinotec Incorporated in Nevada is the 100% ultimate parent entity

 n/a

 DISA Medinotec Proprietary Limited

 The African operating and manufacturing company

 Related party loan with Minoan Medical

 Operational income and expenses with Minoan Medical

 Medinotec Incorporated in Nevada is the 100% ultimate parent entity

 n/a

 F- 25

 Medinotec Incorporated Nevada

 Ultimate parent of Medinotec Capital and DISA Medinotec

 All of the above for its related subsidiaries

 Joseph P Dwyer

 This is the entity owned by the shareholders and primarily controlled by Dr Gregory Vizirgianakis and his Brother Stavros Vizirgianakis

 n/a

 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

 Joseph P Dwyer

 This is the entity owned by the shareholders and primarily controlled by Dr Gregory Vizirgianakis and his Brother Stavros Vizirgianakis

 n/a

 Chief financial officer of the Medinotec Group of Companies

 Related directorships disclosed above

 Minority Shareholder in Medinotec Inc

 n/a

 Chief Executive officer of the Minoan Group of Companies

 Brother of Stavros Vizirgianakis

 Related directorships disclosed above

 Shareholder in Medinotec Inc and Kingstyle investments.

 n/a

 Non-Executive director of the Medinotec Group of companies

 Brother of Gregory Vizirgianakis

 n/a

 n/a

 Joseph Dwyer

 Non-Executive director of the Medinotec Group of companies

 n/a

 n/a

 Independent director of the Medinotec Group of companies

 n/a

 n/a

 F- 26

 a. Rent

 DISA Medinotec Propriety Limited leases
commercial buildings from Minoan Capital Proprietary Limited ("Minoan Capital"). Minoan Capital is owned 100% by the Chief
Executive Officer of the Medinotec Group of Companies, Dr. Gregory Vizirgianakis. We are currently also renting storage and office space
in the US on a 12-month lease agreement.

 Set forth below is a table showing
the Consolidated entities' rent paid for the year ended February 28, 2025 and February 29, 2024 with Minoan Capital and for the Melville,
New York office:

 2025

 $

 2024

 $

 Rent

 51,759

 32,142

 Rent is comparable to rent charged
for similar properties in the same relative area. The company does market research of a Minimum and a 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.

 b. Loan

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

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

 15. Subsequent
 events

 We obtained FDA clearance for the Aortic
Valve Dilatation Balloon Catheter (OutFlo) on March 11, 2025.

 There were no other subsequent events for
the year ending February 28, 2025.

 F- 27