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Item 1A. Risk Factors

2026-05-28 compared with 2025-05-29 · 463 added, 478 removed, 1057 unchanged (47% of the section changed)

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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

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

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:

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.

below, together with all of the other information included in this Annual Report on Form 10-K, before making an investment decision regarding

our securities.

The occurrence of any of the following risks, or additional risks and uncertainties not presently known to us or that

we currently deem immaterial, could materially and adversely affect our business, financial condition, results of operations, cash flows

and the trading price of our common stock.

In such a case, you may lose all or part of your investment.

SUMMARY OF PRINCIPAL RISK FACTORS

The following is a summary of the principal risks

that could materially and adversely affect our business, financial condition, results of operations and stock price.

This summary does

not include every risk we face;

a more complete discussion of the risks set forth below appears later in this Item 1A under the corresponding

You should read the full “Risk Factors” section for a more detailed discussion of these and other material risks.

Liquidity, Capital Needs and Dilution Risk

We may require additional capital to fund U.S.

commercialization, product development and potential acquisitions.

There can be no assurance

that such financing will be available on favorable terms, or at all.

Any future equity offerings would dilute existing shareholders, and

our failure to obtain necessary capital could delay or prevent execution of our growth strategy.

Customer and Geographic Concentration Risk

We derive a substantial majority of our revenue from a limited number of customers and geographic markets.

In particular, sales to DISA

Life Sciences in South Africa represented approximately 89% of our total revenue for the fiscal year ended February 28, 2026.

or material reduction in business with DISA Life Sciences, or any disruption in the South African market, would have a material adverse

effect on our revenue, profitability and cash flows.

Regulatory and Product Approval Risk

Our ability to commercialize current and future products in the United States and other major markets depends on obtaining and maintaining

regulatory clearances and approvals, including FDA 510(k) clearance and compliance with the EU Medical Device Regulation (MDR).

in, or failure to obtain, these approvals, or any subsequent product modifications that require new clearances, could prevent or significantly

delay product launches, harm our reputation and materially adversely affect our growth and financial results.

South Africa-Specific Operational and Political

Our primary manufacturing operations are located in South Africa, exposing us to country-specific risks including frequent load-shedding

and unstable power supply, political instability, Broad-Based Black Economic Empowerment (BEE) requirements that could limit growth or

talent acquisition, stringent exchange controls that may restrict or delay repatriation of funds to the United States, and potential changes

in South African tax, labor or regulatory policy.

Any of these factors could disrupt manufacturing, increase costs or impair our ability

Geopolitical, Trade and Tariff Risks

We are subject to risks arising from U.S.

tariffs on South African goods, potential revocation or modification of AGOA benefits, retaliatory

trade measures, and broader geopolitical tensions (including conflicts involving Iran and global shipping disruptions).

These developments

could materially increase our costs, reduce competitiveness in the U.S.

market, disrupt supply chains and adversely affect revenue and

Dependence on Key Personnel and Founder Control

Our future success depends heavily on the continued service of our founder, CEO and director Dr.

Gregory Vizirgianakis and our CFO Pieter

In addition, Dr.

Vizirgianakis and his brother Stavros together control approximately 81% of our voting power.

either key executive, or any actions by the controlling shareholders that are not aligned with minority shareholders, could materially

harm our business, strategy execution and governance.

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

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.

agencies determine we have engaged in the off-label promotion of our products or have disseminated false or misleading labeling or promotional

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

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.

Our common stock trades on the OTCQX and is subject to “penny stock” rules, which may limit liquidity and make it more difficult

for investors to sell shares.

The market price of our stock may be highly volatile, and we may be unable to uplist to a national securities

exchange or maintain such a listing if achieved.

These factors could result in substantial losses for investors and limit our ability

to raise capital in the future.

Product Development, Competition and Commercialization

Our growth depends on successfully developing and commercializing new products and line extensions.

Many of these products are in the

development pipeline and may never reach market, may fail to obtain regulatory approval or may not achieve commercial acceptance.

face intense competition from much larger, well-capitalized medical device companies, which could limit our market share and profitability.

Investing in our securities involves a high degree

You should carefully review the full discussion of these and other risks in the “Risk Factors” section below before

making an investment decision.

Risks Related to our Financial Position and Need

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

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:

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.

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.

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, particularly the continued commercialization

of our products in the United States (including the Trachealator and Outflo), pursuit of additional FDA 510(k) clearances, and scaling

of manufacturing and regulatory compliance activities, may require additional capital.

We may also need capital to operate our business

in response to circumstances caused by the risks described in this report, including customer concentration, foreign exchange volatility,

and South Africa-specific operational challenges.

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.

We may also incur additional indebtedness in

This could have adverse consequences, including the following:

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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.

Any potential future debt service obligations may

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.

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 any potential

future debt obligations 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

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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.

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

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The fact that we operate in multiple

territories and have a worldwide footprint heightens this risk in specific territories.

territories (including the United States and South Africa) heightens this risk in specific territories.

Risks Relating to Business Operations

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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.

creates larger enterprises with greater negotiating power, which they can use to negotiate price concessions or demand more favorable

contract terms.

As a smaller company with limited market share, we

are particularly vulnerable to these dynamics.

Our business is already subject to significant price pressure in both our proprietary product

lines and our distribution business.

Larger consolidated customers or distributors may demand deeper discounts, volume-based rebates,

or exclusive arrangements that favor our much larger, better-capitalized competitors.

If we are forced to reduce our prices or lose existing

distributor relationships (including our significant relationship with DISA Life Sciences) as a result of industry consolidation, our

revenues, gross margins, profitability, and cash flows could be materially and adversely affected.

We believe our low-cost manufacturing base in South

Africa provides some competitive advantage, but there can be no assurance that this advantage will be sufficient to offset the pricing

and contracting leverage held by larger consolidated entities.

Healthcare industry cost-containment measures

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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

to whom our customers supply medical devices, rely on third-party payers, including government programs (such as Medicare and Medicaid

in the United States and public healthcare funding in South Africa) 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.

insurance companies and other payers of healthcare costs to contain or reduce these costs, through mechanisms such as reduced reimbursement

rates, bundled payments, competitive tender processes, prior-authorization requirements, and value-based purchasing, could lead to patients

being unable to obtain approval for payment from these third-party payers or could cause hospitals and other providers to favor lower-cost

alternatives.

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.

by patients, or if providers face increased pressure to reduce procedure costs, sales of finished medical devices that include our components

(including our proprietary Trachealator, Outflo, and Cape Cross products) may decline significantly.

Our customers, including distributors

and hospitals, may reduce or eliminate purchases of our devices in favor of lower-priced competitors.

These pressures are particularly

acute in the U.S.

market where we are expanding commercialization efforts and in South Africa where a large portion of our current revenue

is generated.

The cost-containment measures that healthcare providers are instituting, both in the United States and outside of the United

States, could harm our ability to maintain pricing levels, achieve anticipated sales volumes, and operate profitably.

The continuing development of many of our products

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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.

of our new products — including the Trachealator, Outflo, Cape Cross family, and our development pipeline (Micro CTO Catheter, StaXstop

Catheter, Septus Balloon, and Vaultseal Balloon) — depends on our maintaining working relationships with healthcare professionals.

Physicians, surgeons, and other key opinion leaders assist us as researchers, product consultants, clinical advisors, trainers, inventors,

and public speakers.

These relationships are critical for product feedback, clinical validation, surgeon training programs, endorsement,

and adoption in both existing and new markets, particularly as we expand commercialization in the United States.

Any failure to maintain these relationships or to

expand our network to include new professionals in the territories we enter (especially in highly regulated markets such as the United

States), will have a negative impact on our ability to develop, obtain regulatory clearance for, launch, and achieve market acceptance

of our products, which could materially and adversely affect 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.

We currently have several innovative products in various

stages of the research and development pipeline, including the Micro CTO Catheter (Technical File submitted to our Notified Body in July

2023 and currently under review), as well as the StaXstop Catheter, Septus Balloon, and Vaultseal Balloon (in earlier developmental stages).

However, some of these projects may fail to come to market for a number of reasons, including delays or failure to obtain necessary regulatory

clearances (such as additional FDA 510(k) clearances or full compliance with the EU Medical Device Regulation), competitor products reaching

the market first, lack of economic viability due to high production costs relative to projected sales, insufficient market acceptance

by physicians and hospitals, or unfavorable results from safety, efficacy, or clinical evaluations.

Our growth strategy depends in significant part on

successfully commercializing these and future pipeline products, particularly in the United States and other higher-value regulated markets,

to diversify revenue and reduce our current heavy reliance on South African sales.

Any failure to advance these products through regulatory

approval, scale manufacturing, or achieve meaningful market adoption could materially delay or prevent revenue growth, limit our ability

to compete effectively, and adversely affect our business, financial condition, and results of operations.

The Medinotec Group of Companies operate in

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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.

we compete, we face competition ranging from large, multinational companies with multiple business lines and significantly greater financial,

technical, marketing, and distribution resources (such as Johnson & Johnson, Boston Scientific, Medtronic, and others) to small, specialized

manufacturers that offer 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.

of lower cost alternatives, including reprocessed products or generic versions when our proprietary products lose their patent protection,

may make existing or planned products less competitive.

As a smaller company with limited market share, we are particularly vulnerable

to these competitive pressures, especially as we seek to expand commercialization of our proprietary devices (including the Trachealator,

Outflo, and Cape Cross family) into the highly regulated and competitive United States market.

We believe our ability to compete depends upon many

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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.

facility shut-downs, defective raw materials, wars and conflict, natural disasters, power outages (including frequent load-shedding in

South Africa), civil unrest, or other environmental factors, could lead to launch delays, product shortage, unanticipated costs, lost

revenues and damage to our reputation.

These risks are particularly relevant to us because our primary manufacturing facility is located

in Johannesburg, South Africa, and we rely on both local and international suppliers for critical inputs.

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

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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

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.

A significant portion of our manufacturing operations

and supply chain is based in South Africa, where the functional currency is the South African Rand (ZAR).

We import a substantial amount

of raw materials and components, many of which are priced or paid in U.S.

dollars or other foreign currencies, while a large part of our

current revenue is generated in ZAR (primarily through our South African distribution activities).

Our consolidated financial statements

are reported in U.S.

As a result, fluctuations in the ZAR relative to the U.S.

dollar and other currencies directly affect our

cost of goods sold, gross margins, and the translated value of our revenue and expenses.

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

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investments that will generate revenue in first-world, stable currencies to offset the impacts of cost of sales imports in developing

Material adverse movements in exchange rates could increase our costs, reduce gross margins, cause volatility in our reported

financial results, and materially and adversely affect our business, financial condition, and results of operations.

The Medinotec Group of Companies operate in

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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

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.

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.

We have historically relied, and continue to rely

heavily, on a limited number of customers and distributors for a substantial portion of our revenue.

In particular, sales to DISA Life

Sciences in South Africa represented approximately 89% of our total revenue for the fiscal year ended February 28, 2026.

This high customer

concentration also creates significant accounts receivable concentration risk.

The loss or material reduction in business with DISA

Life Sciences, or any disruption in our South African distribution relationships, would have a material adverse effect on our revenue,

gross profit, cash flows, and overall financial condition.

Although we are actively working to diversify our customer base and geographic

revenue mix through expanded U.S.

commercialization and new international distributor relationships, there is no assurance that these

efforts will succeed or reduce our concentration risk in the near term.

Barriers to entry in new markets, regulatory delays, competitive

pressures, and other factors may prevent or delay successful diversification.

As a result, our business, results of operations,

and financial condition remain highly dependent on the continued success of our relationship with DISA Life Sciences and the stability

of the South African market.

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:

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and opportunities.

Our current pipeline includes the Micro CTO Catheter (Technical File submitted to our Notified Body in July 2023 and

currently under review), as well as the StaXstop Catheter, Septus Balloon, and Vaultseal Balloon (in earlier developmental stages).

As a part of the regulatory process of obtaining marketing

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share of, the markets in which we participate and our business, financial condition, results of operations or future prospects.

Our growth strategy depends in significant part on

successfully advancing these pipeline products through regulatory approval and achieving commercial acceptance, particularly in the United

States and other higher-value regulated markets to diversify revenue and reduce our current heavy reliance on South African sales.

delays, failures, or unfavorable outcomes in product development, clinical testing, or regulatory processes could materially delay or

prevent revenue growth, limit our ability to diversify away from our current concentration in South Africa, and adversely affect our business,

financial condition, and results of operations.

If the Medinotec Group of Companies fails to

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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.

If we fail to maintain effective internal control

over financial reporting, our ability to report our financial condition and results of operations accurately and on a timely basis could

be adversely affected.

Although management concluded that our internal control

over financial reporting was effective as of February 28, 2026, internal controls can provide only reasonable assurance and may not prevent

or detect all misstatements.

During fiscal 2026, we implemented remediation measures to address previously identified material weaknesses.

There can be no assurance that these measures will continue to operate effectively or that additional material weaknesses or other control

deficiencies will not be identified in the future.

Any failure to maintain effective internal control over financial reporting could adversely

affect our ability to report our financial condition and results of operations accurately and on a timely basis, which could negatively

affect investor confidence in our reported financial information and adversely affect our business and the market price of our common

We have limited experience in marketing and

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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.

During the fiscal year ended February 28, 2026, our

distributors (including DISA Life Sciences, which accounted for approximately 89% of our total revenue) represented the substantial majority

of our sales.

We are in the process of broadening and diversifying our sales channels across all markets, particularly as we expand commercialization

of the Trachealator and Outflo in the United States.

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

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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.

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

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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.

In particular, our relationship with DISA Life Sciences in South Africa represented

a very significant portion of our total revenue for the fiscal year ended February 28, 2026.

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.

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

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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.

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

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.

or brand awareness, and our high rates of sales and income growth may not be sustainable over

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.

Risks Related to Management, Personnel and Control

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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.

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.

We have no such FDA clearance with respect to the

Cape Cross PTCA Catheter family, the Cape Cross NC Catheter, or the Micro CTO Catheter (for which the Technical File was submitted in

July 2023 and is currently under review).

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

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product validation, would have an adverse effect on our ability to commercialize our medical devices.

Our growth strategy depends in significant part on

successfully obtaining additional FDA clearances for our pipeline products and launching them in the United States and other regulated

Any failure or material delay in obtaining these clearances could prevent or significantly delay revenue growth, limit our ability

to diversify away from our current concentration in South Africa, and materially and adversely affect our business, financial condition,

and results of operations.

Modifications to our products may require new

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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,

FDA 510(k) clearance has been granted for the Trachealator

(November 2021) and the Outflo Aortic Valve Dilation Balloon Catheter (March 2025).

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.

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the modified product until we obtain clearance or approval, and we may be subject to significant regulatory fines or penalties.

As we continue to expand commercialization of our

products in the United States and make iterative improvements to existing devices or develop line extensions, the need for new regulatory

submissions could arise frequently.

Any requirement to suspend marketing or initiate a recall while awaiting clearance could result in

lost sales, damage to customer relationships, and harm to our reputation, all of which could materially and adversely affect our business,

financial condition, and results of operations.

We may be liable if the FDA or other U.S.

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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.

Violations of the FDCA may also lead to investigations alleging violations of federal and state health care

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

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acceptance and availability of such products.

These pressures are particularly relevant to us as we expand commercialization of our proprietary

devices (including the Trachealator and Outflo) into the United States, where reimbursement policies, competitive bidding, value-based

purchasing, and prior-authorization requirements by Medicare, Medicaid, and private payers can significantly influence hospital and physician

purchasing decisions.

Similar cost-containment measures in South Africa and other markets where we generate revenue could also reduce

demand or force price concessions.

The adoption of some or all of these proposals could

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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.

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

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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

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.

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,

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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.

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.

We are subject to income taxes, as well as non-income-based

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and trade environment that exposes the company to several risks that could adversely affect our financial performance and operations.

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.

has recently imposed 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.

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.

Because our primary manufacturing

operations are located in South Africa and we export medical devices to the United States, any revocation or material reduction of AGOA

benefits, or the continuation or increase of these tariffs, could significantly raise the cost of our U.S.-bound shipments, reduce our

competitiveness in the U.S.

market, compress profit margins, and materially adversely affect our revenue and financial results.

market is an important part of our growth strategy, particularly for our proprietary products such as the Trachealator and Outflo.

At the May 21, 2025 Oval Office meeting, U.S.

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.

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

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facilities more efficiently in the longer run.

However, load shedding remains unpredictable and can

still disrupt manufacturing schedules, increase operating costs (including fuel for generators), delay product shipments, and impair our

ability to meet customer demand — particularly as we expand sales in the United States.

Any prolonged or severe power instability

could materially and adversely affect our production capacity, supply chain reliability, revenue, and overall financial results.

South Africa Specific Risk of Political instability

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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.

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.

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can affect our business in turn.

Any significant political instability in South Africa

could lead to interruptions in manufacturing, higher operating costs, delays in product shipments, or restrictions on the movement of

goods and capital.

These disruptions could materially and adversely affect our ability to meet customer demand (particularly in the United

States), our revenue, profitability, and overall financial condition.

South Africa Specific Risk that Broad-based

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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

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.

In South Africa, the correction of historical inequalities

is regulated by the Broad-based Black Economic Empowerment Act 53 of 2003 and its associated codes.

This legislative framework promotes

economic transformation and increased economic participation of Black people in the South African economy.

Companies are evaluated on

a scorecard that considers ownership, management control, skills development, enterprise and supplier development, and socio-economic

Failure to meet the requirements of the Act and its

associated codes may limit our ability to qualify for certain government contracts, licenses, or incentives in South Africa.

restrict organic and acquisitive growth opportunities and make it more difficult to attract, recruit, and retain key candidates and suitably

qualified personnel, particularly in technical, engineering, and management roles.

Because our primary manufacturing operations and the

majority of our workforce are located in South Africa, non-compliance or lower BEE ratings could materially limit our growth prospects,

increase compliance costs, and adversely affect our ability to compete effectively in the local market.

We continue to monitor and work

toward compliance with BEE requirements;

however, there can be no assurance that we will be able to meet evolving scorecard targets or

that failure to do so will not have a material adverse effect on our business, financial condition, and results of operations in South

South Africa Specific Risk that South African

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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.

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.

completed a private placement in May 2022 for approximately $3.3 million, which provided funding for expected U.S.

Company’s U.S.

business plan takes longer than expected, if operating costs exceed management’s expectations, or if additional

funding is required, the Company may need to obtain additional debt or equity financing.

There can be no assurance that such financing

will be available on acceptable terms or at all.

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.

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

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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.

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:

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

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.

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.

Newly imposed or increased U.S.

tariffs, changes

in trade policy, or reduced preferential market access for South African goods may materially impact our U.S.

revenue, profit margins

and competitiveness.

The United States has recently imposed increased tariff

measures on certain imported goods, including goods from South Africa, and may further revise tariff rates, trade terms, or import restrictions

in response to broader trade policy objectives or geopolitical developments.

In July 2025, the White House announced updated reciprocal

tariff rates applicable from August 1, 2025, including a 30% tariff rate for South Africa.

These measures, together with any future revisions,

exemptions, or enforcement actions, may materially affect the landed cost of our products in the United States.

As a company that exports goods from South Africa

into the United States, tariffs or similar import measures may increase the cost of our U.S.-bound shipments, reduce our gross margins,

and impair our competitiveness in the U.S.

Such measures may also lead to delayed, reduced or cancelled purchase orders from distributors

or customers, require price increases that reduce demand, or necessitate

changes to our sourcing, manufacturing or distribution arrangements.

In addition, our U.S.

market access may be adversely

affected by changes in trade policy, including any reduction in preferential treatment for South African exports, changes in customs or

import procedures, stricter compliance requirements, or increased scrutiny of South African-origin products.

Any such developments could

increase our costs, lengthen delivery times, reduce commercial flexibility and adversely affect our revenue and profitability.

We are actively assessing the potential impact of

tariff and trade-policy developments on our operations and financial results and evaluating contingency strategies, including pricing

adjustments, sourcing alternatives and geographic diversification of revenue.

However, there can be no assurance that these measures will

be successful or that tariffs, trade restrictions or related policy changes will not materially and adversely affect our business, financial

condition and results of operations.

Geopolitical tensions, including conflict involving

Iran and South Africa’s geopolitical positioning, may materially adversely affect our business, financial condition and results

of operations.

Our business is exposed to geopolitical risk due to

our corporate structure and operating footprint.

While Medinotec Inc.

is publicly quoted in the United States, our primary operating subsidiary

is based in South Africa, an emerging market and member of BRICS.

As a result, we are sensitive to geopolitical developments affecting

both global markets and South Africa specifically.

Conflict involving Iran and related instability in

the Middle East have contributed to volatility in global energy markets, shipping routes, freight pricing, insurance costs and financial

Disruptions affecting the Strait of Hormuz and surrounding trade corridors may increase fuel, transportation, logistics and input

costs, while also contributing to inflationary pressures and currency volatility.

Reuters has recently reported disruptions to shipping

and surges in war-risk insurance and oil prices associated with the Iran conflict and Strait of Hormuz instability.

Our reliance on international distribution partners

and cross-border supply chains exposes us to risks arising from trade disruptions, higher shipping costs, supply shortages, delays, sanctions-related

compliance burdens and reduced market access.

Escalation of conflict or broader regional instability could impair our ability to efficiently

source, manufacture and supply products to our key markets, including the United States and other international jurisdictions.

South Africa’s geopolitical positioning and

foreign policy stance may further increase our risk exposure.

Divergence between South Africa’s international relationships and

the policy positions of the United States or other major trading partners could result in heightened regulatory scrutiny, trade friction,

investor caution, reduced access to capital, tariffs or other restrictions on market access.

Recent South African market weakness linked

to renewed U.S.-Iran tensions illustrates how these geopolitical developments may affect the rand and broader financial conditions.

Macroeconomic instability associated with these geopolitical

dynamics, including fluctuations in the South African rand, may also impact our reported financial results, particularly where revenues

and costs are denominated in different currencies.

Sustained uncertainty may also reduce healthcare spending, delay procurement decisions

or impair customer demand in certain markets.

The duration, scope and outcome of these geopolitical

developments remain highly uncertain.

Any escalation or prolonged instability could have a material adverse effect on our supply chain,

operating costs, revenue generation, access to capital and overall financial performance.

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.

South Africa’s international relations

and foreign policy positioning may affect its trade relationship with the United States and other key markets.

Any deterioration in those

relationships could result in reduced preferential market access, increased tariffs, enhanced customs scrutiny, stricter import requirements,

sanctions-related restrictions or other barriers affecting South African exports.

Because our primary operating subsidiary manufactures

in South Africa and exports products into the United States, our business is particularly exposed to such developments.

Increases in tariffs

or changes in import rules may raise the cost of our products in the United States, reduce our competitiveness, compress margins, delay

shipments, increase compliance burdens, or reduce the willingness of U.S.

distributors and customers to purchase our products.

These risks may be heightened by broader geopolitical

tensions, diplomatic disagreements, trade negotiations, or changes in U.S.

trade policy.

tariff actions applicable to South

African goods illustrate the potential for these developments to materially affect our business.

If any of these events occur, our ability to grow

revenue, maintain profit margins and expand our international operations could be materially adversely affected.

Risks Relating to Our Securities

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the penny stock rules which may increase the difficulty Purchasers may experience in attempting to liquidate such securities.

We may be unable to uplist our common stock

to a national securities exchange, or maintain such a listing if achieved, which could adversely affect the liquidity and price of our

common stock.

We intend to pursue an uplisting of our common stock

to a national securities exchange, such as the Nasdaq Capital Market or NYSE American.

However, there can be no assurance that we will

satisfy the applicable initial listing requirements, including quantitative and qualitative standards relating to stockholders’

equity, market value of publicly held shares, public float, bid price, number of round lot holders, corporate governance and other criteria.

Even if we satisfy those requirements initially, there can be no assurance that we will be able to maintain continued listing standards

following any uplisting.

Failure to achieve or maintain an uplisting could

reduce investor interest in our common stock, limit trading liquidity, restrict access to certain institutional investors, impair our

ability to raise capital and negatively affect our stock price, valuation and strategic flexibility.

In addition, efforts to achieve an uplisting may require

us to incur substantial additional costs, including accounting, auditing, legal, governance, investor-relations and compliance costs.

We may also seek additional financing in connection with an uplisting or to support operations more generally.

Any such financing could

be dilutive to existing stockholders, involve unfavorable terms, or be unavailable when needed.

Actions taken in pursuit of an uplisting, including

public or private financings, governance changes, structural transactions or other corporate actions, could also increase volatility in

our stock price or otherwise adversely affect existing stockholders.

There can be no assurance that any uplisting strategy will be successful

or that the benefits of a listing on a national securities exchange will be realized.

If the Medinotec Group of Companies issues shares

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What changed 10-K

Item 1A. Risk Factors