Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis of Financial Condition
and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including
estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon
which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements generally are identified by the words “believes,” “project,” “expects,”
“anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,”
“will,” “would,” “will be,” “will continue,” “will likely result,” and similar
expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those
safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks
and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results
or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect
on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory
changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties
should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We
undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events
or otherwise. Further information concerning our business, including additional factors that could materially affect our financial
results, is included herein and in our other filings with the SEC.
Business Overview
Medinotec Inc. established Medinotec Capital Proprietary
Limited in South Africa as a wholly owned subsidiary, which in turn acquired DISA Medinotec Proprietary Limited, after successfully proving
that a private placement of a minimum of $3 Million was feasible.
Medinotec Capital Proprietary Limited acquired DISA
Medinotec Proprietary Limited (therefore establishing the Medinotec Group of Companies), a South African based medical device manufacturing
and distribution company.
In 2018, DISA Medinotec Proprietary Limited developed
its most innovative product to date – the Trachealator. This award-winning (Medical Design Excellence Awards – Gold Winner
2021) balloon catheter was developed to address an as-yet unmet supply need in the specialty of advanced airway management, more specifically
tracheal dilation. That makes this innovative product in our opinion a world first in its ability to dilate a patient’s airway while
maintaining ventilation to the patient without obstructing his/her airway.
This life-saving device has quite literally changed
the way that tracheal and, to a degree, bronchial stenosis, is managed in extremely ill patients. This is especially true in a post Covid-19
world where tracheal stenosis due to extended tracheal intubation is becoming an ever more frequent pathology encountered by surgeons,
who, thanks to The Medinotec Group of Companies, they now have a safe and effective tool at their disposal.
The Medinotec Group of Companies is currently in management’s
opinion considered a global leader in tracheal non-occlusive airway dilation technology. This belief of management was formed on the fact
that there are a number of airway dilation balloons that are offered for the management of tracheal stenosis, but to our knowledge all
of them are occlusive in nature. The fact that the Trachealator is a non-occlusive airway solution, allowing for continuous ventilation
during dilation, results in management believing that we could be regarded as a global leader in this technology.
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Other products manufactured by The Medinotec Group
of Companies include:
• The
“Cape Cross PTCA Catheter” The Medinotec Group of Companies also designed
and developed a range of semi-compliant coronary PTCA balloon catheters known as the Cape
Cross, which attained a CE Mark and are marketed around the world and in South Africa, becoming
a widely used interventional balloons in the market. A PTCA balloon catheter (also known
as a Plain Old Balloon Angioplasty [“POBA”] 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.
• 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
“Lamprey” Suction Dissector, a surgical tool used in the fields of neurosurgery,
ear, nose and throat (“ENT”) surgery and general surgery to combine the processes
of suctioning blood out of the surgeon’s field of view while allowing him/her to dissect
sensitive structures without having to change instruments.
• The
Aortic Perfusion and Dilation Catheter, a non-occlusive perfusion balloon to allow the expansion
of the aortic valve (“BAV” or Balloon Aortic Valvuloplasty) without impeding
the cardiac output, which is currently in the mid stages of research and development and
could potentially be used to post-dilate the artificial valve in Transcatheter Aortic Valve
Implantation (“TAVI”), a rapidly growing market, without the need for pacing.
• A
highly specific, niche Chronic Total Occlusion (“CTO”) Catheter of 1mm in diameter.
This micro balloon catheter addresses an extremely specific market need for difficult coronary
cases and will cement our position as one of the leading specialized coronary balloon catheter
manufacturers in the world.
• 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 build on our current expertise in the field of advanced airway management.
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.
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The products described have reached the following stages:
Trachealator:
The only outstanding phase is the commencement of material sales into the
United States. All the necessary preparations have been made (e.g., renting offices, hiring sales and admin staff) and it is therefore
envisaged that sales will begin once all paperwork and compliance matters are addressed. While unlocking the United States of America
as a commercial market for the product various Compliance documents and customer registration were completed, these customers are performing
their own in-house clinical overviews of the product. The first order for $10,000 was placed during December, 2022 which means commercialization
in the United States of America has started.
Cape Cross PTCA Catheter:
FDA 510(k) approval still needs to be obtained.
Cape Cross NC Catheter:
FDA 510(k) approval still needs to be obtained
Lamprey Suction Dissector:
R&D, Testing, Pre-Production Prototyping, Production, Clinical Trials, and CE Marking have all been completed. Commercialization of this product have been paused in order to prioritize other products with better commercial prospects.
Aortic Perfusion & Dilatation Catheter:
R&D, Testing, Pre-Production Prototyping, Testing, Production,
Clinical Trials, Application for MDR CE Mark Accreditation has been submitted.
Micro CTO Catheter:
R&D, Testing, Pre-Production Prototyping
Tracheal Stent:
R&D
Medinotec Inc. was formed in Nevada and is at the
moment a holding company, but it is expected to facilitate the sales of all products in the United States directly in the near future.
Therefore, over time, as we implement our business plan and realize commercial operations in the United States, we believe Medinotec Inc.
will become the primary operating company within the Medinotec Group of Companies and the South African DISA Medinotec Proprietary Limited
will be the manufacturing platform for the operations in the United States and other countries.
Results of Operations for the Three and Nine Months
ended November 30, 2022 and 2021
The Consolidated Medinotec Group of Companies’
revenue for the quarter ended November 30, 2022 was $387,989 compared to $180,748 in revenue being recorded in the comparative
quarter for the prior year. The Consolidated Medinotec Group of Companies’ revenue for the nine months ended November 30, 2022 was
$720,340 compared to $625,934 (proforma) revenue being recorded in the comparative nine months in the prior year.
Revenue
The Consolidated Medinotec Group of Companies’
revenue for the quarter ended November 30, 2022 was $387,989 compared to $180,748 in revenue being recorded in the comparative
quarter for the prior year. The Consolidated Medinotec Group of Companies’ revenue for the nine months ended November 30, 2022 was
$720,340 compared to $625,934 (proforma) revenue being recorded in the comparative nine months in the prior year.
The revenue was up in comparison to the prior year
with $207,241 for the quarter and up by $94,406 for the nine months. The reason for the higher sales growth in quarter three was due to
demand in the South African region and replenishing of inventory levels by hospitals as well as increased interest and demand in the products
of the Medinotec Group of Companies. The growth presented includes the following negative economic and internal issues:
· DISA Medinotec trades out of South Africa and its functional currency is
the South African Rand, The Rand weakened from an average conversion rate of 1$: 14.4 (2021) to 1$: 17.9 (2022) against the US Dollar.
This translated to a decrease of 24% due to dollar strength when the Rand was converted for reporting purposes, which means a decrease
of approx. $172,882 (for nine months) and $93,117 for the quarter in sales when converted to dollars from Rands. The Rand was very volatile
against the US Dollar especially in the third quarter ended November 30, 2022. Most of the year-to-date differences discussed here are
attributable to the second and third quarter during which the Rand experienced the most volatility.
· There was a machine breakdown that occurred in the last week of April and
the repair process lasted three weeks, therefore leaving a back log in production and invoicing of products volume losses in this period
accounted for an estimated $62,983 for the nine months and all of this can be attributed to the first quarter, since the breakdown lasted
from April to May. An increased number of sales were made in the third quarter due to most of the backlogs being addressed, therefore
a significant increase in sales volumes were experienced over and above the negative impact of the Rand conversion rate on sales.
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This table indicates the sales per product as a breakdown
of the total revenue balance:
Medinotec Inc Group Consolidated Three months ended (unaudited)
Medinotec Inc Group Consolidated
Nine months ended (unaudited)
Proforma Medinotec Inc
Group Consolidated Nine months ended (unaudited)
Proforma Medinotec Inc
Group Group Consolidated (unaudited)
Product Type
22-Nov
21-Nov
22-Nov
21-Nov
22-Nov
21-Nov
22- Feb
21- Feb
Cape Cross NC Catheter
134,202
33,378
187,573
83,157
187,573
115,588
135,272
122,835
Cape Cross PTCA Catheter
123,079
71,856
221,759
179,021
221,759
248,840
291,215
131,960
Trachealator Catheter
130,708
75,514
311,008
188,133
311,008
261,505
306,037
188,045
Components
-
-
-
-
-
-
483,381
50,800
387,989
180,748
720,340
450,311
720,340
625,934
1,215,905
493,640
For the nine months ending November, 30 2021 consolidated
figures are presented from April, 26. Proforma figures are presented from March, 1 to November, 30. This was done to demonstrate a full
comparative period compared to the same period in the current reporting period.
Revenue generated by affiliations to related parties
were as follows:
Sales to Minoan Medical stopped during Q1 of the 2023
financial year due to the fact that DISA Medinotec now employs its own international sales and marketing manager, which was outsourced
in the past. Minoan primarily facilitated export business on behalf of DISA Medinotec.
For the quarter ending November 30, 2022, we generated
revenue through sales to DISA Lifesciences Proprietary Limited of $117,772 and $335,786 for the nine months ended November 30, 2022. Pieter
van Niekerk ceased to be a director on DISA Lifesciences on October 14, 2022 after which the business will not be a related party to the
Medinotec Group anymore, but due to the extensive sales reach of DISA Lifesiences it will remain a material distributor for the Medinotec
Group in South Africa which generates 68% of the sales for the Medinotec Inc Group of Companies.
For the quarter ending November 30, 2021,
we generated revenue through sales to DISA Lifesciences Proprietary Limited of $150,254 and $375,419 for the nine months ended November
30, 2021.
The profit percentage on these related party transactions
was determined by a benchmark study that was completed by an external firm who compared the profit margins of a distribution/wholesale
business. The allowed profit margin was concluded as being within the appropriate benchmark and therefore arm’s length. The data
base used to determine the market related margin is the Worldwide Private Company Data Base from Thomson Reuters. Therefore, this agreement
is deemed to be market related and at arm’s length and compliant with. ASC 850-10-50-6 and ASC 850-10-50-5.
Cost of Goods
The Consolidated Medinotec Group of Companies recorded
cost of goods of $164,685 for the quarter ending November 30, 2022 up from $72,300 for the quarter ending November 30, 2021. For the nine
months ending November 30, 2022, the Consolidated entities recorded Cost of Goods Sold of $300,142, up from $222,737 (Proforma) for the
nine months ending November 30, 2021.
The most material change in the increase of cost of
goods is the function that it is directly relatable to sales and therefore the cost of goods followed the same upward trend as sales.
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This increase in Cost of sales over time follows the
sales trend but also indicates a shift in production to include the sale of more complex products into the product mix, therefore the
production facility is approaching its fuller capacity and the allocations of labor and machine time to product costing per unit manufactured
is expected to increase. The Rand weakened from an average conversion rate of 1$: 14.4 (2021) to 1$: 17.9 (2022) a 24% decline against
the US Dollar. Therefore, even though on the face value it seems like cost of sales per unit decreased on a three and nine month basis
from FY 2022 to 2021 it includes a positive conversion adjustment of approximately $41,171 for the quarter ending November 30, 2022 and
a foreign exchange conversion of the $75,031 for the nine months ending November 30, 2022. As discussed above constituted the bulk of
this increase. The Rand was very volatile against the US Dollar especially second and third quarter. Most of the differences discussed
here are attributable to these two quarters.
Due to the once off sales transaction of $483,381
in Q4 for the prior fiscal for DISA Medinotec Proprietary Limited there is no obsolete stock for the period ending November 30, 2022.
This transaction was concluded to sell components that was close to expiration date due to sales declining during the covid pandemic.
No related party transactions are recorded in cost
of sales for both quarters in 2022 and 2021.
Operating Expenses
The Consolidated Medinotec Group of Companies
operating expenses were $197,805 for the quarter ended November 30, 2022, up from $178,684 for the quarter ended November 30, 2021. The
Consolidated Medinotec Group of Companies operating expenses were $615,287 for the nine months ended November 30, 2022, up from $545,617
(Proforma) for the nine months ended November 30, 2021.
The Rand weakened from an average conversion rate
of 1$: 14.4 (2021) to 1$: 17.9 (2022) against the US Dollar. Therefore, this will cause an expense decrease/improvement of 24% on the
operating expenses due to dollar strength within the conversion rate applied. The currency effect is a decrease in operating expenses
of $94,946 for the nine months of which $47,473 related to the third quarter ending November 30, 2021. The Rand was very volatile against
the US Dollar especially in the third quarter ended November 30, 2022. Most of the differences discussed here are attributable to the
third quarter:
After taking into account the effects of the foreign
currency exchange, the remaining changes are mainly attributable to the Sales and Marketing expenses that, together with the Compliance
cost, showed a step cost increase to support the higher sales figure. Due to the amount of territories entered during the year, there
was also an increase in general compliance costs to list products in these countries and to provide initial training and marketing into
these countries.
One of the major components that affects the operating
expenses is the costs of compliance for the business. These costs increased significantly as we started to grow our product portfolio
in FY2022 and is expected to rise as we enter new sales territories. 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.
Medinotec Inc Group Consolidated Three months ended (unaudited)
Medinotec Inc Group Consolidated Nine months ended (unaudited )
Proforma Medinotec Inc Group Consolidated Nine months ended (unaudited )
Proforma Medinotec Inc Group Group Consolidated (unaudited )
22-Nov
21-Nov
22-Nov
21-Nov
22-Nov
21-Nov
22-Feb
21-Feb
Compliance cost
67,693
12,426
162,805
72,519
162,805
102,563
161,168
83,145
For the nine months ending November, 30 2021, consolidated
figures are presented from April, 26. Proforma figures are presented from March, 1 to November, 30. This was done to demonstrate a full
comparative period compared to the same period in the current reporting period.
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Sales and Marketing expenses was insignificant due
to Covid restrictions stopping travel and conferences, this started to normalize in FY 2022 and is expected to grow significantly in the
later end of FY 2023 since most trade shows and conferences happen in the final two quarters of our financial year, the dedicated sales
force will continue to grow as new territories pass the compliance hurdles.
Medinotec Inc Group Consolidated Three months ended (unaudited)
Medinotec Inc Group Consolidated Nine months ended (unaudited )
Proforma Medinotec Inc Group Consolidated Nine months ended (unaudited )
Proforma Medinotec Inc Group Consolidated (unaudited )
22-Nov
21-Nov
22-Nov
21-Nov
22-Nov
21-Nov
22-Feb
21-Feb
Sales and Marketing
21,249
9,992
38,278
11,058
38,278
12,650
17,271
13,091
For the nine months ending November, 30 2021 consolidated
figures are presented from April, 26. Proforma figures are presented from March, 1 to November, 30. This was done to demonstrate a full
comparative period compared to the same period in the current reporting period.
Related party expenses included in operating expenses
include Minoan Capital Proprietary Limited for Rental expenses in the third quarter ending was $8,204. The related party rental expenses
in the same quarter preceding year ending November 30, 2021 amounted to $9,529.
Related party expenses included in operating
expenses include Minoan Capital Proprietary Limited for Rental expenses in the nine months ending November 30, 2022 was $25,804. The related
party rental expenses in the same nine months in the preceding year ending November 30, 2021 amounted to $22,616. The rent
charge 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. ASC 850-10-50-6.
Net Loss
The Consolidated Medinotec Group of Companies for
the quarter ending November 30, 2022 showed total net loss of $36,341 down from a loss of $74,428 from the prior quarter ending November
30, 2021. The Consolidated Medinotec Group of Companies for the nine months ended November 30, 2022 showed a total net loss of $ 289,076,
up from $180,742 (Proforma) in the prior financial year nine month period.
The change is mainly attributable to the currency
fluctuations, general and Admin expenses and sales and marketing expenses which showed a step cost increase to support the higher sales
figure, which includes the compliance costs discussed in operating expenses above which is expected to continue to rise as new planned
roll territories become active.
Related party expenses included in operating expenses
include Minoan Capital Proprietary Limited for rental expenses in the third quarter ending November 30, 2022 was $8,205. The related party
rental expenses in the same quarter preceding quarter ending November 30, 2021 amounted to $9,539. Related party expenses included
in operating expenses include Minoan Capital Proprietary Limited for Rental expenses in the nine months ending November 30, 2022 was $25,804
and for the nine months ending November 30, 2021 amounted to $22,616. The rent charge 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. ASC 850-10-50-6.
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Interest charged on the loan account for the quarter
ended in favor of related party Minoan Medical Proprietary Limited was $51,545 for the quarter ended November 30, 2022, up from $0 in
the same quarter ending November 30, 2021. This change is attributable to the fact that there was an interest waiver in place from the
main shareholder at the time to support the company through Covid 19 the interest charges resumed in 2022 at the prime lending rate of
South Africa. Interest charged on the loan account for the nine months ended in favor of related party Minoan Medical Proprietary Limited
was $125,966 for the nine months ended November 30, 2022, up from $0 in the same nine months ending November 30, 2021. This change is
attributable to the fact that there was an interest waiver in place from the main shareholder at the time to support the company through
Covid 19 the interest charges resumed in 2022 at the prime lending rate of South Africa. The interest rate chargeable is a guideline determined
by the South African Reserve Bank and gets utilized by financial institutions to determine the financial gain they may derive from a loan.
The Prime rate is therefore an arm’s length transaction and justifiable rate that can be applied to a loan within the borders of
the Republic of South Africa and therefore complies with the arm’s length definitions in ASC 850-10-50-6
Liquidity and Capital Resources
The Consolidated Medinotec Group of Companies
as of November 30, 2022, had total current assets of $3,933,651 and total assets in the amount of $5,092,265. Total current liabilities
as of November 30, 2022 was $178,804. Consolidated we had working capital of $3,754,847 as of November 30, 2022.
As of November 30, 2021 the Consolidated Medinotec
Group of Companies had total current assets of $721,702 and total assets in the amount of $ 1,323,031. Consolidated total current
liabilities as of November 30, 2021 was $209,019. We had working capital of $512,683 as of November 30, 2021.
This increase was mainly due to growth in
working capital to support future sales growth and the successful private placement during which $3,467,500 was raised.
Investing activities used $621,725 during the
quarter ended November 30, 2022 and $23,485 for the prior quarter ending November 30, 2021. Investing activities used $651,285 during
the nine months ended November 30, 2022 and $39,913 for the nine months ending November 30, 2021. The investment into property, plant
and equipment peaked in the 2021 Fiscal period as the plant reached maximum potential production its current form. The new focus will
be on sales and compliance activities as described in the operating expenses section during the third quarter ending November 30, 2022.
$594,243 was invested into a revolving credit facility with a company called Innovative Outcomes Inc. Innovative outcomes will utilize
this facility to build a sales and infrastructure for Medinotec Inc Group in the United States. The maximum draw down allowed for this
facility is $750,000 and this facility constitutes the only planned major capital commitments that existed at November 30, 3022.
Operating activities used cash of $255,576 during
the quarter ended November 30, 2022 compared to $468,879 for the same quarter ended 2021. This is mainly due to the net loss and operating
expenses described above and an increase in investment for accounts receivables. Since sales significantly increased quarter over quarter
the terms of customers to pay the business also increased with approximately $258,411 in accounts receivables. As the business continues
to grow the terms of customers will continue to affect the growth in accounts receivables.
Operating activities used cash of $848,140 during
the nine months ended November 30, 2022 compared to $637,179 for the same period in 2021. This is mainly due to the net loss and operating
expenses described above and an increase in investment for inventories of approximately $309,856and an increase in accounts receivable
of approximately $250,467 to ensure we are adequately stocked for new markets we plan to enter and to provide new customers with payment
terms to settle their accounts.
Financing activities provided cash of $328,214 during
the quarter ended November 30, 2022 and $509,567 for the same quarter in the prior year. For the nine months ended November 30, 2022 financing
activities provided cash of $4,229,838 and for the nine months ended November 30, 2021 cash of $804,812 was provided. The increase in
the current year is mainly due to the private placement being concluded during which $3,467,500 was raised and capital raising fees of
$ 169,375 was incurred, the remaining balance is due to additional draw down on the related party borrowing from Minoan Medical Proprietary
Limited. The loan account in favor of Minoan Medical Proprietary Limited increased by $328,214 during the quarter ended November 30, 2022.
In the prior year the loan account increased by $509,567 in the quarter ended November 30, 2021. The loan account is used to fund operational
requirements. For the nine months ended November 30, 2022, the loan account increased to $931,713 and $794,812 for the nine months ended
November 30, 2021.
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We expect to incur future additional losses as the
Medinotec Group of Companies builds out the territory of the United States and expects to return to profitability once this territory
establishes a sales force. 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 financial statements are issued. In the event that we do not achieve
the revenue anticipated in its current operating plan, management has the ability and commitment to reduce operating expenses as necessary.
Our long-term success is dependent upon our ability to successfully raise additional capital, market our existing services, increase revenues,
and, ultimately, to achieve profitable operations.
Our financial statements have been prepared on a going-concern
basis, which contemplate s 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 in November 2021. As the research and development phase of this product has been completed, we expect to see an
increase in sales being realized against expenditure incurred. A private placement was done in the wake of the successful research and
development and subsequent regulatory approval.
Off Balance Sheet Arrangements
As of November 30, 2022, there were no off-balance
sheet arrangements.
Critical Accounting Policies
In December 2001, the SEC requested that all registrants
list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical
accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires
management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of
matters that are inherently uncertain.
Our critical accounting policies are set forth in
Note 3 to the financial statements.
Recently Issued Accounting Pronouncements
The Company does not expect the adoption of recently
issued accounting pronouncements to have a significant impact on the Company’s results of operation, financial position or cash
flow.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable
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