OTC: MDNC

Our History

DISA Medinotec Proprietary Limited originated from
DISA Vascular 2015, a South African medical device business focused on vascular technologies. DISA Medinotec has historically developed
and manufactured medical devices, including products used in cardiology and airway-related procedures. The Company’s products are
sold through distributor arrangements in South Africa and certain international markets.

Following the acquisition by Medinotec Inc. through
Medinotec Capital Proprietary Limited, the Group continued operating its medical device manufacturing activities from Johannesburg, South
Africa. The Johannesburg facility includes manufacturing, warehousing, quality, regulatory, and administrative functions.

The Company has appointed distributors and obtained
distribution rights in certain territories, including South Africa, Namibia, Mauritius, the Middle East, Europe, South America, and portions
of Asia. The Company has also taken steps to develop sales channels in the United States following FDA 510(k) clearance for Trachealator
in November 2021 and Outflo in March 2025. The Company continues to evaluate additional regulatory filings and patent applications in
selected territories, subject to commercial feasibility, regulatory requirements, and available resources.

Raw materials and components used in manufacturing
are sourced from local and international suppliers. The Company maintains supplier evaluation procedures and quality processes intended
to support compliance with applicable regulatory and product specifications.

Employees

As of February 28, 2026, the Medinotec Group of Companies
had 48 employees and independent contractors supporting its operations. This consisted of 36 individual full time employees and 12 independent
contractors. The 12 independent contractors include a mix of individual
contractors and companies engaged to support the Group’s sales and commercialization activities.

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Certain of the independent contractors that are companies,
including U.S.-based companies, may in turn employ or engage individual sales representatives who participate in sales-related activities
for the Group’s products. These individuals are employed or engaged by the relevant independent contractor company and are not employees
or individual independent contractors of the Medinotec Group of Companies. Accordingly, where an independent contractor is a company,
that company is counted as one independent contractor in the table below, and any individuals employed or engaged by that company are
not included in the 48-person count.

The Group’s personnel support the following
functions:

Commercial and sales: pricing, customer engagement,
product support, marketing coordination, logistics support, and distributor liaison.

Marketing: product materials, trade show support,
customer communications, and coordination of industry events.

Warehouse and logistics: inbound and outbound
shipments, inventory storage, product handling, and shipment coordination in accordance with applicable quality requirements.

Technical and manufacturing support: maintenance
of manufacturing equipment and technical support for production activities.

Customer service: order support, customer
communication, and coordination of product-related queries.

Back-office and regulatory support: finance,
administration, quality, regulatory affairs, and research and development.

The Company operates in a specialized industry and
seeks to retain personnel with relevant technical, manufacturing, regulatory, commercial, and administrative experience. None of the Company’s
employees are represented by a labor union. The Company has not experienced any work stoppages.

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

Employer
Number of full-time employees
Number of part-time employees
Number of independent contractors

Medinotec Inc.
3
—
12

Medinotec Capital Proprietary Limited*
—
—
—

DISA Medinotec Proprietary Limited
33
—
—

Total
36
—
12

Group Contractors

DISA Medinotec Proprietary Limited holds distribution
arrangements with third-party medical device companies for cardiology and renal dialysis products. These arrangements form part of the
Company’s third-party distribution business and supplement the Group’s internally manufactured product portfolio.

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Certain third-party distribution relationships were
introduced through Minoan Medical Proprietary Limited, which previously acted as distributor before DISA Medinotec assumed responsibility
for the relevant distribution activities. The Company appointed DISA Life Sciences, a South African sub-distributor, to support sales
and marketing activities in South Africa. DISA Life Sciences also distributes certain internally manufactured Medinotec products in South
Africa.

The Company’s principal operating focus remains
the development, manufacture, and commercialization of products for which it owns or controls intellectual property, together with the
distribution of selected third-party products where management believes such arrangements are commercially appropriate.

The Trachealator received FDA 510(k) clearance in
November 2021, permitting the Company to market the product in the United States. As the Company did not have an established U.S. sales
infrastructure at that time, it entered into a relationship with Innovative Outcomes and provided a revolving credit facility of up to
$750,000 to support the development of distribution infrastructure.

During the quarter ended November 30, 2023, the Company
reassessed the relationship after determining that Innovative Outcomes’ focus on the wound care clinic market was no longer aligned
with the Company’s intended focus on niche surgical units. The parties separated their respective distribution activities. The note
receivable remained subject to its original terms and became payable during fiscal 2024. The Company recorded a full impairment allowance
against the receivable as of November 30, 2023 because the receivable was no longer supported by anticipated Trachealator-related revenue
streams. Any future recoveries will be recognized when received, as appropriate.

The Company relies on distributor relationships and
customer relationships to sell its products, particularly in South Africa. Through its distribution arrangements, the Group has access
to a network of sales representatives that service hospitals and healthcare providers in South Africa. The Company may seek to develop
or access similar distribution capabilities in the United States; however, there can be no assurance that it will be able to do so on
commercially acceptable terms or at all.

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

DISA Life Sciences remains a significant customer
and distribution partner in South Africa. The Company expects to continue selling products to DISA Life Sciences while it remains commercially
viable to do so. Management’s strategy includes seeking to reduce customer and geographic concentration over time by expanding into
additional markets. There can be no assurance that these efforts will be successful. Regulatory requirements, market acceptance, reimbursement,
competition, pricing pressure, and other barriers to entry may limit or delay the Company’s ability to diversify revenue away from
the South African market and from DISA Life Sciences.

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

Seasonality

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

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Reliance on Other Parties

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

•
DISA Life Sciences is a South African medical device distributor with an established sales and marketing presence in the South African market. DISA Medinotec entered into the relationship to access existing distribution capabilities rather than building a separate internal sales force for the South African market. DISA Life Sciences uses its own sales personnel and certain subcontractors to support sales within South Africa. Following the Company’s decision to manage exports internally, the DISA Life Sciences relationship primarily relates to sales and distribution within South Africa.

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

Our Business Strategy

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

Medinotec Inc

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

Medinotec Capital (Pty) Ltd

Medinotec Capital Proprietary Limited was incorporated in South Africa as an investment holding company for the Group’s African operations. It currently holds the Company’s investment in DISA Medinotec Proprietary Limited. The use of a holding company structure assists the Group in managing its African investments, intercompany arrangements, and related transfer pricing considerations.

Disa Medinotec (Pty) Ltd

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

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The Company’s business strategy is focused on:

1.
maintaining and expanding its existing product portfolio;

2.
developing internal manufacturing, quality, regulatory, and commercial
capabilities; and

3.
evaluating acquisitions, distribution arrangements, or other strategic
transactions where management believes they may support the Company’s operations or market access.

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

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

Operating Capabilities

The Company’s operations include product development,
manufacturing, quality management, regulatory affairs, sales support, and distribution management. Management believes the following operating
capabilities are relevant to the Company’s business:

experience in developing and manufacturing selected
balloon catheter and airway dilation products;

manufacturing operations in South Africa, including
cleanroom production capabilities;

quality management and regulatory processes applicable
to medical device manufacturing;

distributor relationships in South Africa and selected
international markets;

experience with product registration and regulatory
submissions in selected jurisdictions; and

internal technical, quality, regulatory, finance,
and administrative support functions.

These capabilities are subject to the risks described
in Item 1A, including risks relating to regulation, customer concentration, manufacturing, product quality, market acceptance, competition,
and the Company’s ability to obtain additional funding if required.

The Three Pillars of our Strategy

The Company’s strategy is organized around three
areas: (1) maintaining and expanding its proprietary product portfolio, (2) developing internal manufacturing, quality, and regulatory
capabilities, and (3) evaluating acquisitions, distribution arrangements, or other strategic relationships where management believes they
may support the Company’s business.

1.
Innovate and Grow our Product Range

DISA Medinotec Proprietary Limited develops and manufactures
selected medical devices, including products used in cardiology and airway-related procedures. The Company has invested in product development,
intellectual property protection, manufacturing processes, and regulatory submissions for certain products.

The Company currently has commercially available products
and developmental products. Historically, a significant portion of revenue and gross profit has been generated in South Africa. Management’s
strategy includes maintaining the existing South African business while seeking opportunities to commercialize selected products in additional
markets, including the United States and certain other regulated markets, subject to regulatory clearance, distributor arrangements, market
acceptance, pricing, reimbursement, and available resources.

The Company also evaluates changes to existing products
and new product development opportunities where management believes these may be commercially viable and consistent with the Company’s
technical and regulatory capabilities.

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

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

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

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

The Company’s expansion efforts are focused on markets where the
relevant procedures are performed and where the Company believes its products may be commercially viable. These efforts may include:

identifying and appointing distributors;

supporting product training and technical education where appropriate;

obtaining or maintaining required regulatory approvals or registrations;

supporting product adoption by healthcare providers; and

evaluating whether clinical data, publications, or other product information
may support market access.

There can be no assurance that these activities will result in increased
sales, market acceptance, or reduced customer concentration.

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

Demand for the Company’s products is affected
by procedure volumes, healthcare infrastructure, hospital purchasing patterns, reimbursement, pricing pressure, regulatory requirements,
and broader economic conditions in the markets in which the Company operates. The Company’s current revenue remains concentrated
in South Africa, although management continues to evaluate opportunities in other markets where regulatory and commercial conditions support
market entry.

The United States is an important target market for
the Company because certain of its products have received, or may in the future seek, FDA 510(k) clearance. U.S. sales for fiscal 2026
were $611,860, representing 6% of total sales, compared to $678,105, representing 7% of total sales, in fiscal 2025. The Company’s
ability to increase U.S. revenue will depend on factors including regulatory clearance, product adoption, distributor or sales arrangements,
reimbursement, pricing, competition, and available capital.

Key Market Trends and Our Response to These

Medical device markets are affected by demand for
less invasive procedures, hospital cost controls, reimbursement practices, product innovation, and competition. These factors may create
opportunities for products used in minimally invasive procedures, but they may also increase pricing pressure and require ongoing investment
in product development, regulatory compliance, quality systems, and commercial support.

The Company seeks to respond to these trends by maintaining
its current product portfolio, evaluating product development opportunities, managing manufacturing costs, and supporting regulatory submissions
in selected markets. The Company’s ability to benefit from these trends is subject to market acceptance, regulatory clearance, reimbursement,
competition, and the risks described in