The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements included elsewhere in this report and the "Cautionary Note Regarding Forward-Looking Statements" above.





Overview

Novint Technologies, Inc. ("Novint", the "Company", "we", "our", "us") was originally incorporated in the State of New Mexico in April 1999. On February 26, 2002, the Company changed its state of incorporation to Delaware by merging with Novint Technologies, Inc., a Delaware corporation. This merger was accounted for as a reorganization.





Nature of Business

The Company currently is engaged in the development and sale of 3D haptics products and equipment. Haptics refers to one's sense of touch. Our focus is in the consumer interactive computer gaming market, but we conduct project work in other non-gaming areas as well.

Our principal product is the Falcon, an extensible, grounded (e.g., desktop), three-dimensional (3D) haptic interaction device with characteristics optimized for real-time force-feedback and tactile interaction. Additionally, we have developed but not yet commercialized the Xio product, a next generation, full arm, game controller with forced feedback. Currently, we are focused on engaging in discussions with potential partners and studying other ways to realize value from the Falcon and Xio products.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates and assumptions made in the preparation of the financial statements relate to accrued royalties and contingent consideration. Actual results could differ from those estimates.





Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with maturities of three months or less to be cash equivalents. The Company maintains cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation ("FDIC") up to federally insured limits. At times, balances may exceed FDIC insured limits. The Company has not experienced any losses in such accounts.





Revenue and Cost Recognition

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606), and has since issued amendments thereto (collectively referred to as "ASC 606"). The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, and the guidance defines a five-step process to achieve this core principle. The five-step process to achieve this principle is as follows: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract(s), (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract(s), and (v) recognize revenue when, or as, the entity satisfies a performance obligation. ASC 606 also mandates additional disclosure about the nature, amount, timing and uncertainty of revenues and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.





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Revenue from product sales relates to the sale of the Falcon haptics interface, which is a human-computer user interface and related accessories. The Falcon allows the user to experience the sense of touch when using a computer, while holding its interchangeable handle. The Falcons are manufactured by an unrelated party. Revenue from product sales is recognized when the products are shipped to the customer and the Company has earned the right to receive and retain reasonable assured payments for the products sold and delivered. Consequently, if all these revenue from product sales requirements are not met, such sales will be recorded as deferred revenue until such time as all revenue recognition requirements are met.

During the year ended December 31, 2022, the Company did not purchase any production materials or sell any products.





Income Taxes

The Company accounts for its income taxes under the provisions of ASC Topic 740, "Income Taxes". The method of accounting for income taxes under ASC 740 is an asset and liability method which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that includes the enactment date.

Fair Value of Financial Instruments

The Company follows the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") for disclosures about fair value of its financial instruments and to measure the fair value of its financial instruments. The FASB ASC establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of fair value hierarchy are described below:

? Level 1: Quoted market prices available in active markets for identical assets

or liabilities as of the reporting date.

? Level 2: Pricing inputs other than quoted prices in active markets included in

Level 1, which are either directly or indirectly observable as of the reporting

date.

? Level 3: Pricing inputs that are generally observable inputs and not

corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The carrying amounts of the Company's financial assets and liabilities, including cash, prepaid expenses, accounts payable, accrued expenses and related liabilities, approximate their fair values because of the short maturity of these instruments.





RESULTS OF OPERATIONS

Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021





Revenues



              Year Ended December 31,
          2022         2021        Change
Revenue   $   -       $ 2,568     $ (2,568 )



During the year ended December 31, 2022, the Company did not earn any revenue.
During the year ended December 31, 2021, the Company earned revenue of $2,568
from Falcon sales.



Operating Expenses



                               Year Ended December 31,
                       2022          2021            Change
Operating Expenses   $ 178,736     $ 172,870     $     5,866

Operating Expenses for the year ended December 31, 2022 and 2021, were $178,736 and $172,870, respectively, an increase of $5,866 or 3%. The increase was primarily due to an increase in professional fees relating to regular filings with the SEC.





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Other Expense



                     Year Ended December 31,
                 2022          2021       Change
Other Expense   $   14       $    207     $  (193 )

Other expenses for the year ended December 31, 2022 and 2021, were $14 and $207, respectively, a decrease of $193 or 93%. The decrease was primarily due to a decrease in finance charges of $193 in 2022.





Net Loss



                   Year Ended December 31,
              2022            2021          Change
Net Loss   $ (178,750 )    $ (170,509 )    $ (8,241 )

Net loss for the years ended December 31, 2022 and 2021, were $178,750 and $170,509, respectively, an increase of $8,241. The decrease was primarily due to an increase in operating expenses. We expect to continue to incur expenses and operating losses for the foreseeable future. Our net loss may fluctuate significantly from quarter to quarter and year to year.





Impact of Inflation

The impact of inflation upon our revenue and income / (loss) from operations during each of the past two fiscal years has not been material to our financial position or results of operations for those years.

Liquidity and Capital Resources

Management has evaluated whether there is substantial doubt about our ability to continue as a going concern and has determined that substantial doubt exists as of the date of this filing. This determination is based on the following: the Company has incurred recurring losses and at December 31, 2022, had an accumulated deficit of $41,803,380 and a working capital deficit of $723,856 and sustained a net loss of $178,750 for the year ended December 31, 2022. In the opinion of management, these factors, among others, raise substantial doubt about our ability to continue as a going concern. The Company's continuation as a going concern is contingent upon its ability to obtain additional financing and to generate revenue and cash flow to meet its obligations on a timely basis. The Company will continue to seek additional funding through debt or equity financing during the next twelve months. While the Company believes in the viability of generating revenues from the sale of its products and in its ability to raise additional funds, there can be no assurances to that effect.

The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.





Cash Flow Activities

As of December 31, 2022, we had a total cash balance of $55,081. Our cash flow from operating activities for the fiscal year ended December 31, 2022 resulted in net cash used in operating activities of $130,854 compared with net cash used in operating activities of $136,097 for the previous year ended December 31, 2021. We did not have any cash flow from investing activities or financing activities for the years ended December 31, 2022 or 2021.





Contractual Obligations

We do not currently have fixed contractual obligations or commitments that include future estimated payments.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to our investors. We have no guarantees or obligations other than those that arise out of our ordinary business operations.





Recent Accounting Standards

See Item 15 - Note 2 to the Consolidated Financial Statements, Summary of Significant Accounting Policies, for a discussion of recent accounting standards.

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