United States securities and exchange commission logo
August 18, 2022
Pieter van Niekerk
Chief Financial Officer
Medinotec Inc.
Northlands Deco Park
10 New Market Street
Stand 299 Avant Garde Avenue
North Riding 2169
Re: Medinotec Inc.
Amendment No. 1 to
Registration Statement on Form S-1
Filed August 4,
2022
File No. 333-265368
Dear Mr. van Niekerk:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our June
28, 2022 letter.
Amendment No. 1 to Registration Statement on Form S-1
Summary
Organizational Structure, page 1
1. We reissue comment 9 in
part, as your diagram does not include all the entities listed in
our comment or in the
filing. In particular, please clearly and concisely revise your
disclosure in this
section of the Summary to briefly describe the relationships between the
Medinotec Group of
Companies and each of the Minoan entities and DISA Life Sciences,
respectively.
Pieter van Niekerk
FirstName
Medinotec LastNamePieter van Niekerk
Inc.
Comapany
August 18, NameMedinotec
2022 Inc.
August
Page 2 18, 2022 Page 2
FirstName LastName
Business Summary, page 3
2. We reissue comment 3. Disclose that until the parent company realizes
its business plan
and becomes operational, you will rely on your subsidiaries for cash.
Disclose whether
you have been restricted in time or amount on the transfer of cash
from your subsidiaries
in the past. Disclose whether the South African authorities may
disallow a transfer and
how long they may suspend or delay a transfer. Add a risk factor
addressing these risks
and highlight these risks in your summary. Tell us what, if any, other
material restrictions
South Africa places on your ability to do business. We note, for
example, your
representation on the board of DISA Life Sciences appears to be a
requirement. Please
advise.
3. We note your response to prior comment 4 and reissue in part. With
respect to your
products that have not yet received FDA approval, please balance any
statements about
your expectations of their future contribution to your company with
the reality that they
may not obtain FDA-approval in the time frame you anticipate and may
never obtain
FDA-approval. Please also refrain from stating that you "do not
foresee any material
objections by the FDA", you "do not anticipate any regulatory push
back", that "the risk in
not achieving appropriate regulatory approvals is minimal" and any
similar claims as such
statements are speculative.
4. We note the revised disclosure on page 5 in response to comment 8 and
reissue the
comment. As you are not raising funds in this offering, revise the
language to remove the
reference to raising money "[t]hrough this listing."
5. We note your response to prior comment 10 and re-issue. Please revise
your Summary
section to include a series of concise, bulleted or numbered
statements that is no more
than two pages which summarizes the principal factors that make an
investment in your
company and/or this offering speculative or risky. For guidance, refer
to Item 105(b) of
Regulation S-K.
6. Your disclosure on page 49 indicates that you were reliant on two
related parties, Minoan
Medical and DISA Lifesciences, for a significant majority of your
revenue in both the
fiscal year ended February 29, 2022 and the quarter ended May 31,
2022. Please revise
your disclosure here and in the section titled "Description of
Business" to discuss your
reliance on these two customers.
7. We note your revised disclosure indicating that Medinotec Inc. "proved
the viability of its
business plan" to the shareholders of DISA Medinotec Proprietary
Limited ("DISA
Medinotec") on March 2, 2022 in order to close Medinotec Inc.'s
acquisition of DISA
Medinotec. Please describe how Medinotec proved the viability of its
business plan to the
shareholders of DISA Medinotec.
Pieter van Niekerk
Medinotec Inc.
August 18, 2022
Page 3
Risks Related to Financial Condition, page 6
8. We reissue comment 11 to the extent you have not disclosed the
percentage of your
cash flow that must be dedicated to debt service, both principal and
interest.
Security Ownership of Certain Beneficial Owners and Management, page 29
9. Your disclosure on the prospectus cover page and in risk factors
indicates that Gregory
Vizirgianakis owns 81% of the shares in your company. However, your
disclosure here
indicates that Gregory Vizirgianakis owns 45% of your common stock and
that
Stavros Vizirgianakis owns 36% of your common stock. Please reconcile
your disclosure
or advise. Please also revise to describe any arrangements whereby
Gregory Vizirgianakis
and Stavros Vizirgianakis have agreed to vote their shares together.
Company Overview, page 32
10. We reissue comment 17. Revise to provide additional information on the
need for
government approvals (including FDA approvals), effect of government
regulation, and
costs and effects of compliance with environmental laws on your
business. Refer to Items
101 (vii), (ix), and (xi) of Regulation S-K.
Description of Business, page 32
11. Your disclosure appears to indicate that you acquired DISA Medinotec
Proprietary
Limited on March 2, 2022, and that you also acquired it in 2015 (when
it was named
"Disa Vascular"). Please reconcile your disclosure or advise.
Human Resources, page 33
12. We note the revised disclosure on page 33 in response to comment 24
regarding your
commercial team of over 100 individuals and your disclosure that you
have retained three
independent consulting companies. Please tell us why it is appropriate
to state that these
companies are "within the Medinotec Group of Companies" if they are
also
independent. Further, please revise your disclosure to describe the
material terms of your
agreements with each of these three companies and file the agreements
as exhibits to your
registration statement. Refer to Item 601(b)(10)(ii) of Regulation
S-K.
Product Manufacturing
FirstName LastNamePieter-- Quality Assurance and Regulatory Requirements, page
42
van Niekerk
Comapany
13. NameMedinotec
Please Inc.to clarify whether you manufacture your
products or if the
revise this section
Augustmanufacturing
18, 2022 Page is3 outsourced to third parties.
FirstName LastName
Pieter van Niekerk
FirstName
Medinotec LastNamePieter van Niekerk
Inc.
Comapany
August 18, NameMedinotec
2022 Inc.
August
Page 4 18, 2022 Page 4
FirstName LastName
Our Key Products, page 43
14. We reissue comment 21 in part. Please revise your disclosure to
clearly state whether you
have applied for FDA approval of your Cape Cross products. Please also
provide the basis
for your statement implying that FDA approval will be obtained by the
end of Q4 2022.
Alternatively, please remove this statement.
15. Please provide us with the basis for your statements that (i) the CE
Mark is recognized as
a valid accreditation by all countries in the world outside of the
U.S., Canada, Australia,
Japan and China and (ii) that Canada recognizes FDA approvals.
Description of Property, page 47
16. Revise the disclosure to summarize the material terms of the lease,
including the term.
We note, for example, that you disclose a five-year lease, but the
exhibit you filed
indicates a three year lease, under which the initial period ends
January 31, 2023.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations for the Years Ended February 28, 2022 and 2021, page 49
17. Please revise this section to provide a revenue breakdown for each of
your four products.
Results of Operations for the Years Ended February 28, 2022 and 2021, page 49
18. You noted that the increase in revenue was due to the European
market and the fact that
lighter Covid restrictions allows for less restricted travel and
training to be conducted.
Please quantify each of the reasons noted for your increase in revenue
and provide
additional information how less restricted travel and training were
factors to the increase
in revenue. Please also quantify the factors discussed with regards to
Cost of Goods and
Operating Expense. For example, quantify the factors noted related to
the adjustment for
obsolete inventory, compliance costs to list products, and training
and marketing.
Results of Operations for the Quarter Ended May 31, 2022 and 2021, page 50
19. Please describe and quantify the reasons why revenue for the quarter
ended May 31, 2022
decreased as compared to the quarter ended May 31, 2021 and provide a
revenue
breakdown for each of your four products. Please also revise to
describe why you did not
make any sales to Minoan Medical Proprietary Limited during the
quarter ended May 31,
2022.
Executive Compensation, page 56
20. Please describe the material terms of your employment arrangements
with your named
executive officers ("NEOs"). To the extent your NEOs have signed
employment
agreements or offer letters, please file such documents as exhibits to
your registration
statement.
Pieter van Niekerk
FirstName
Medinotec LastNamePieter van Niekerk
Inc.
Comapany
August 18, NameMedinotec
2022 Inc.
August
Page 5 18, 2022 Page 5
FirstName LastName
Changes In and Disagreements with Accountants, page 58
21. We have considered your response to comment 26 in our June 28, 2022
letter. Please
provide all of the disclosures required by Item 304(a) and (b) of
Regulation S-K regarding
your prior and current auditors in your amended filing.
Medinotec Incorporated Group
Consolidated Statement of Operations
For the Three Months Ended May 31, 2022 (Unaudited) and May 31, 2021, page F-27
22. Please remove the line items referencing discontinued operations or
provide all the
disclosures required under ASC 205-20-50.
Notes to the Financial Statements
2. Significant Accounting Policies
l. Revenue recognition, page F-33
23. You note that you recognize revenue over the contract term. You also
note that sales
revenue is recognized in accordance with industry practice which is
when all the risks and
benefits of ownership of products have been transferred to customers
under executed sales
agreements. Please revise to clarify when control of the promised
goods or services are
transferred to a customer. Refer to ASC 606-10-50-12a.
12. Business Acquisitions
a. Acquisition of Disa Medinotec Proprietary Limited , page F-44
24. On page 5 you note that on March 2, 2022 Medinotec Inc. proved the
viability of its
business plan to the Shareholders of DISA Medinotec Proprietary
Limited in South
Africa, which meant that a business combination under common control
originated on this
date. Please tell us how this meets ASC 805-50-25-2 as the date of
transfer.
25. Please tell us your consideration of ASC 805-50-45 with regards to
financial statement
presentation in the period of transfer and for prior periods.
Exhibits
26. Please file the documentation governing your loan payable to Minoan
Medical Proprietary
Limited as an exhibit to your registration statement.
You may contact Gary Newberry at 202-551-3761 or Sasha Parikh at
202-551-3627 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Abby Adams at 202-551-6902 or Alan Campbell at 202-551-4224 with any
other
questions.
Pieter van Niekerk
Medinotec Inc.
August 18, 2022
Page 6
Sincerely,
FirstName LastNamePieter van Niekerk
Division of Corporation Finance
Comapany NameMedinotec Inc.
Office of Life Sciences
August 18, 2022 Page 6
cc: Scott Doney, Esq.
FirstName LastName