Dror Ortho-Design, Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES (a) Evaluation of Disclosure Controls and Procedures Our management, with the participation and supervision of our Principal Executive Officer, who also is our Principal Financial Officer, are responsible for our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified under the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to its principal executive officer and its principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, including our Principal Executive Officer who is also our Principal Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2020. Based on this evaluation, our Principal Executive Officer concluded that as of December 31, 2020, our disclosure controls and procedures were not effective at a reasonable assurance level due to the material weaknesses identified in our internal control over financial reporting as of December 31, 2020 (discussed in paragraph (b) to this Item 9A), which our management views as an integral part of our disclosure controls and procedures. (b) Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of our Chief Executive Officer who is also our Principal Financial Officer and effected by our Board of Directors, management and other personnel 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. Our internal control over financial reporting includes those policies and procedures that: ● pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; ● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of ours are being made only in accordance with authorizations of our management and directors; and ● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 13 A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by management or employees in the normal course of performing their assigned functions. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2020. Management’s assessment identified the following material weaknesses in our internal control over financial reporting: lack of segregation of duties due to lack of sufficient accounting and finance personnel, lack of sufficient entity level controls and lack of a sufficient technology infrastructure to support the financial reporting function In addition, we do not have a separately designated Audit Committee. Our small size, lack of revenue and inability to compensate officers or directors precludes us from attracting a sufficient number of directors to staff such a committee. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013) as the framework to evaluate effectiveness. Because of the material weaknesses described above, management believes that, as of December 31, 2020, our internal controls over financial reporting were not effective based on those criteria. Management intends to implement a remediation plan in fiscal year 2021 in response to the other identified material weakness in financial reporting. Our planned remediation efforts to address lack of segregation of duties and accounting for complex financial transactions include using third parties to perform accounting tasks, enhancing procedures for recording and reviewing complex transactions, performing more independent reconciliations or reviews and hiring more people. Our planned remediation efforts to address lack of sufficient technology infrastructure include upgrading and engaging technology consultants with specific financial reporting expertise using our accounting and financial reporting system. We believe that these remediation efforts, if successfully implemented, will improve our internal control over financial reporting. (c) Changes in Internal Controls During the quarter ended December 31, 2020, we initiated remediation efforts and are still working on implementing certain controls identified above in response to previously identified material weaknesses. Once fully implemented, we believe that these remediation steps will remediate our material weaknesses. ITEM 9B. OTHER INFORMATION None. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Directors and Executive Officers The information below sets forth the name, age and position of each of our current directors and executive officers as of March 23, 2021 . Martin Chopp – Director 69 Mr. Chopp has served as a Director of Novint Technologies since August 2013. Mr. Chopp’s extensive capital markets experience includes management roles in numerous investment funds and public companies. Mr. Chopp is the President of SDC Capital LLC and President, Chief Financial Officer and Secretary of Sons Capital, LLC, positions which he has held for more than five years. Additionally, Mr. Chopp is the General Partner of Ellis International as well as The Hewlett Fund, LP. Mr. Chopp served as the Chief Executive Officer, President and Director of Datatrend Services, Inc. (formerly Babystar, Inc.) until 1997. Mr. Chopp was President of Sun Capital Company from 1995 to February 2007 and a Director of Glen Rose Petroleum Corp. from April 2010 to March 2011. The Board feels Mr. Chopp is an appropriate director due to his capital markets experience. 14 Ryan Christoff - Director 49 Mr. Christoff has served as a Director of Novint Technologies since April of 2011. Prior to that, Mr. Christoff was the President of Force Tek, which merged with Novint just prior to April 2011. Mr. Christoff provided operational expertise and helped design the biomechanics of XIO, the full arm controller that provided force feedback for gaming and other applications, produced by Force Tek. Mr. Christoff has been the President and owner of The Physical Therapy Institute (PTI) since 2008. PTI has operations in central and western Pennsylvania and Eastern Indiana. Mr. Christoff holds a Doctorate degree in Orthopedic Physical Therapy, a Master’s Degree in physical therapy from Chatham University, and a B.S. degree in sports medicine from the University of Pittsburgh. The Board feels Mr. Christoff is an appropriate director due to his gaming industry experience. Orin Hirschman – President, Treasurer and Director 51 Mr. Hirschman has served as a Director of Novint Technologies since August 2013. Mr. Hirschman has over 25 years of experience in money management, leveraged buyouts, restructuring and venture capital. Mr. Hirschman has been the manager of AIGH Investment Partners, LP since 2011. From 1994 until 2001 Mr. Hirschman served as a co-manager of two private investment funds, Adam Smith Investment Partnerships and Adam Smith Investment Partners, Ltd (the “Adam Smith Funds”). In addition to Mr. Hirschman’s private placement investments over the last fifteen years, the Adam Smith Funds, and AIGH Investment Partners, LP, his experience in the securities industry includes tenures with Wesray Capital, the investment firm founded by former U.S. Secretary of the Treasury William E. Simon, and Randall Rose & Company, a $100 million money management firm based in New York. Mr. Hirschman has been actively involved in the financing and structuring of over 70 companies, including many high technology companies. Mr. Hirschman’s educational background includes an M.B.A. in Finance from New York University Graduate School of Business and a degree in Biology and Finance from Touro College where he graduated Summa Cum Laude. The Board feels Mr. Hirschman is an appropriate director due to his capital markets experience. Arrangements between Officers and Directors To our knowledge, there is no arrangement or understanding between any of our officers or directors and any other person, including directors, pursuant to which the officer or director was selected to serve as an officer or director. Involvement in Certain Legal Proceedings We are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy, insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of Regulation S-K. Corporate Governance General We believe that good corporate governance is important to ensure that the Company is managed for the long-term benefit of our stockholders. This section describes key corporate governance practices that we have adopted. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than ten percent of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. Officers, directors and greater than ten percent stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To our knowledge, based solely upon a review of Forms 3, 4, and 5 furnished to us during the fiscal year ended December 31, 2020, we believe that the directors, executive officers, and greater than ten percent beneficial owners have complied with all applicable filing requirements during the fiscal year ended December 31, 2020. 15 Code of Ethics Our Board of Directors adopted a Code of Conduct and Ethics (the “Code”) in March 2006, which applies to our officers, directors and employees. The purpose of the Code is to deter wrongdoing and to promote: ● honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; ● full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to the Securities and Exchange Commission (“SEC”) and in other public communications made by the Company; ● compliance with applicable laws and governmental rules and regulations; ● the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and ● accountability for adherence to the Code. A copy of the Code is filed as Exhibit 14.1 and is incorporated herein by reference. Audit Committee and Financial Experts; Compensation Committee; Nominating and Governance Committee Currently, we do not have separately designated Audit, Compensation or Nominating and Governance Committees. Our small size, lack of revenue and inability to compensate officers or directors precludes us from attracting a sufficient number of directors to staff such committees. ITEM 11. EXECUTIVE COMPENSATION Summary Compensation Table There was no compensation paid, earned or accrued for services by our executive officers in the fiscal years ended December 31, 2020 and December 31, 2019. Director Compensation As of December 31, 2020, there is no cash compensation paid to directors for their service on our board of directors. Equity Compensation Plan Information As of December 31, 2020, there is no equity compensation plan in effect. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Security Ownership of Certain Beneficial Holders and Management The following tables set forth, as of December 31, 2020, certain information concerning the beneficial ownership of our capital stock by each stockholder known by us to own beneficially 5% or more of any class of our outstanding stock; each director; each named executive officer; all of our executive officers and directors as a group; and each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of any class of our outstanding stock. As of December 31, 2020, the Company had authorized 500,000,000 shares of common stock, par value $0.0001, of which there were 202,308,728 shares of common stock outstanding. Beneficial ownership is determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to our common stock. Shares of our common stock subject to options that are currently exercisable or exercisable within 60 days of December 31, 2020 are considered outstanding and beneficially owned by the person holding the options for the purpose of calculating the percentage ownership of that person but not for the purpose of calculating the percentage ownership of any other person. Except as otherwise noted, we believe the persons and entities in this table have sole voting and investing power with respect to all of the shares of our common stock beneficially owned by them, subject to community property laws, where applicable. 16 Security Ownership of Certain Beneficial Owners & Management Name and Address of Beneficial Owner Shares Owned (6) Fully Diluted Ownership Percentage (1) AIGH Investment Partners, LLC (2) 8,662,500 4.28% 6006 Berkeley Avenue Baltimore, MD 21209 Congregation Ahavas Tzdokah Vchesed Inc. (7) 61,722,996 30.51% 1655 E 24th St Brooklyn, NY 11229 Ellis International (3) 9,396,328 4.64% 100 Merrick Road–Suite 400W Rockville Centre, NY 11570 Alpha Capital Anstalt (8) 10,736,961 5.31% 510 Madison Avenue, 14th Floor New York, NY 10022 Globis Capital related entities (4) 12,060,546 5.96% 805 Third Avenue, 15th floor New York, New York 10022 Ryan Christoff 11,142,857 5.51% c/o Novint Technologies All Officers and Directors 29,201,685 14.43% as a Group (5) (1) Calculated on the basis of 202,308,728 shares of Common Stock outstanding (2) Mr. Hirschman a Director of the Company has sole voting and dispositive power over shares held by AIGH Investment Partners LLC (3) Mr. Chopp a Director of the Company shares voting and dispositive power over shares held by Ellis International (4) Mr. Packer has sole voting and dispositive power over 687,068 common shares held by Mr. Packer personally. Mr. Packer shares voting and dispositive power over 11,373,478 common shares held by Globis Capital Partners and by Globis Overseas Fund Ltd. (5) Mr. Christoff, Mr. Chopp and Mr. Hirschman are serving as directors of the Company. Mr. Hirschman is serving as President on an interim part-time basis. (6) Applicable percentage of ownership is based on 202,308,728 shares of common stock outstanding on December 31, 2020. Percentage ownership is determined based on shares owned together with securities exercisable or convertible into shares of common stock within 60 days of December 31, 2020, for each stockholder. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to securities exercisable or convertible into shares of common stock that are currently exercisable or exercisable within 60 days of December 31, 2020, are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Our common stock is our only issued and outstanding class of securities eligible to vote. Unless otherwise stated, all shareholders can be reached at mailing address 100 Merrick Road–Suite 400W, Rockville Centre, NY 11570. (7) Rabbi Nusyn Pinches Erlich has sole voting and dispositive power over those shares. (8) Konrad Ackermann is the managing director and has sole voting power over those shares. 17 Change in Control We are not aware of any arrangement that might result in a change in control in the future. We have no knowledge of any arrangements, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’s control. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The Company has no agreement that provides for payment to executive officers at, following, or in connection with the resignation, retirement or other termination, or a change in control of Company or a change in any executive officer’s responsibilities following a change in control. Mr. Hirschman, the Company’s Interim President and sole employee serves on an unpaid basis. Director Independence ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Audit Fees. The aggregate fees billed and expected to be billed for professional services rendered by Sadler, Gibb & Associates, LLC for the 2020 fiscal year, primarily related to the audit of our annual consolidated financial statements for the 2020 fiscal year, and the reviews of the financial statements included in our Quarterly Reports on Form 10-Q for the 2020 fiscal year were approximately $17,750 (including direct engagement expenses). The aggregate fees billed for professional services rendered by Sadler, Gibb & Associates, LLC for the 2019 fiscal year, primarily related to the audit of our annual consolidated financial statements for the 2019 fiscal year, the reviews of the financial statements included in our Quarterly Reports on Form 10-Q for the 2019 fiscal year, comfort letters and registration statements, were $37,417 (including direct engagement expenses). Audit-Related Fees No fees were billed by Sadler, Gibb & Associates, LLC for audit-related services for the 2020 or 2019 fiscal year. Tax Fees No fees were billed by Sadler, Gibb & Associates, LLC for tax-related services for the 2020 or 2019 fiscal year. All Other Fees No fees were billed by Sadler, Gibb & Associates, LLC for services other than the audit for the 2020 and 2019 fiscal years. 18 PART IV INDEX TO FINANCIAL STATEMENTS NOVINT TECHNOLOGIES, INC. FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm – Sadler, Gibb & Associates, LLC F-2 Balance Sheets as of December 31, 2020 and 2019 F-3 Statements of Operations for the Years Ended December 31, 2020 and 2019 F-4 Statement of Stockholders’ Deficit for the Years Ended December 31, 2020 and 2019 F-5 Statements of Cash Flows for the Years Ended December 31, 2020 and 2019 F-6 Notes to Financial Statements F-7 F- 1 Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Novint Technologies, Inc.: Opinion on the Financial Statements We have audited the accompanying balance sheets of Novint Technologies, Inc. (“the Company”) as of December 31, 2020 and 2019, the related statements of operations, stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2020 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. Explanatory Paragraph Regarding Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) related to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Going Concern Critical Audit Matter Description As described further in Note 1 to the financial statements, the Company has incurred losses each year from inception through December 31, 2020 and expects to incur additional losses in the future. The ability of the Company to continue as a going concern is dependent on raising capital to fund its initial business plan and ultimately to attain profitable operations. Accordingly, the Company has determined that these factors raise substantial doubt as to the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. Management intends to continue to fund its business by way of private placements and advances from related parties as may be required, in order satisfy the Company’s obligations as they come due for at least one year from the financial statement issuance date. However, the Company has not concluded that these plans alleviate the substantial doubt related to its ability to continue as a going concern. How the Critical Audit Matter Was Addressed in the Audit We determined the Company’s ability to continue as a going concern is a critical audit matter due to the estimation and uncertainty regarding the Company’s available capital and the risk of bias in management’s judgments and assumptions in their determination. Our audit procedures related to the Company’s assertion on its ability to continue as a going concern included the following, among others: • We inquired of Company management and reviewed company records to assess whether there are additional factors that contribute to the uncertainties disclosed. • We assessed whether the Company’s determination that there is substantial doubt about its ability to continue as a going concern was adequately disclosed. • We performed testing procedures such as analytical procedures to identify conditions and events that indicate there could be substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time. • We reviewed and evaluated management’s plans for dealing with adverse effect of these conditions and events. /s/ Sadler, Gibb & Associates, LLC We have served as the Company’s auditor since 2017. Draper, UT March 23, 2021 F- 2 Novint Technologies, Inc. BALANCE SHEETS December 31, December 31, 2020 2019 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 322,032 $ 431,715 Prepaid expenses and other current assets 6,040 2,048 Total Current Assets 328,072 433,763 TOTAL ASSETS $ 328,072 $ 433,763 LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Accounts payable and accrued expenses $ 702,669 $ 640,374 Total Current Liabilities 702,669 640,374 TOTAL LIABILITIES 702,669 640,374 STOCKHOLDERS' DEFICIT Preferred stock, $0.0001 par value; 12,500,000 shares authorized, 0 shares issued and outstanding as of December 31, 2020 and 2019 — — Common stock, $0.0001 par value; 500,000,000 shares authorized, 202,308,728 shares issued and outstanding as of December 31, 2020 and 2019 20,231 20,231 Additional paid in capital 41,059,293 41,059,293 Accumulated deficit (41,454,121 ) (41,286,135 ) TOTAL STOCKHOLDERS' DEFICIT (374,597 ) (206,611 ) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 328,072 $ 433,763 The accompanying notes are an integral part of these financial statements F- 3 Novint Technologies, Inc. STATEMENTS OF OPERATIONS Years Ended December 31 2020 2019 Revenue $ 1,000 $ — Operating Expenses Professional fees 81,331 51,380 General and administrative expenses 87,376 82,483 Total Operating Expenses 168,707 133,863 Loss from operations (167,707 ) (133,863 ) Other expense: Interest expense, net (279 ) (239 ) Total other expense (279 ) (239 ) Loss before provision for income taxes (167,986 ) (134,102 ) Provision for income taxes — (75 ) Net loss $ (167,986 ) $ (134,177 ) Net loss per share Basic and Diluted $ (0.00 ) $ (0.00 ) Weighted-average common shares outstanding Basic and Diluted 202,308,728 202,308,728 The accompanying notes are an integral part of these financial statements F- 4 Novint Technologies, Inc. STATEMENT OF STOCKHOLDERS’ DEFICIT Additional Common Stock Paid-in Accumulated Shares Amount Capital (Deficit) Total Balances, December 31, 2018 202,308,728 $ 20,231 $ 41,059,293 $ (41,151,958 ) $ (72,434 ) Net Loss — — — (134,177 ) (134,177 ) Balances, December 31, 2019 202,308,728 20,231 41,059,293 (41,286,135 ) (206,611 ) Net Loss — — — (167,986 ) (167,986 ) Balances, December 31, 2020 202,308,728 $ 20,231 $ 41,059,293 $ (41,454,121 ) $ (374,597 ) The accompanying notes are an integral part of these financial statements F- 5 Novint Technologies, Inc. STATEMENTS OF CASH FLOWS Years Ended December 31, 2020 2019 Cash flows from operating activities: Net loss $ (167,986 ) $ (134,177 ) Changes in operating assets and liabilities: Prepaid expenses and other current assets (3,992 ) 2,065 Accounts payable and accrued expenses 62,295 55,280 Net cash used in operating activities (109,683 ) (76,832 ) Net decrease in cash (109,683 ) (76,832 ) Cash and cash equivalents, beginning of year 431,715 508,547 Cash and cash equivalents, end of period $ 322,032 $ 431,715 Supplemental cash flow information: Cash paid for interest $ 279 $ 214 Cash paid for taxes $ — $ — The accompanying notes are an integral part of these financial statements F- 6 NOVINT TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 NOTE 1 – DESCRIPTION OF BUSINESS Novint Technologies, Inc. (the “Company”, “Novint”, “we” or “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 of the Company. 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. The Company’s focus is on the consumer interactive computer gaming market but the Company also does project work in other areas. The Company’s operations are based in New Mexico with sales of its haptics products primarily to consumers through retail outlets. Going Concern and Management’s Plans These 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. The Company has incurred recurring losses and at December 31, 2020, had an accumulated deficit of $41,454,121. For the year ended December 31, 2020, the Company sustained a net loss of $167,986. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the date these financial statements were issued. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary should the Company be unable 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. Management intends to source new inventory and generate revenue. The Company will continue to seek to raise additional funding through debt or equity financing during the next twelve months. We may be at risk as a result of the current COVID-19 pandemic. Risks that could affect our business include the duration and scope of the COVID-19 pandemic and the impact on the demand for our products; actions by governments, businesses and individuals taken in response to the pandemic; the length of time of the COVID-19 pandemic and the possibility of its reoccurrence; the timing required to develop effective treatments and a vaccine in the event of future outbreaks; the eventual impact of the pandemic and actions taken in response to the pandemic on global and regional economies; and the pace of recovery when the COVID-19 pandemic subsides. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. F- 7 NOVINT TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 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 the following five-step process to achieve this core principle:(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. Revenue shown in these financial statements relates to revenue from the sale of the Falcon 3D Touch Haptic Controller (the “Falcon”), 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 is recognized when 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 revenue recognition requirements are not met, such sales will be recorded as deferred revenue until revenue recognition requirements are met. 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, inventory, prepaid expenses, accounts payable, accrued expenses, payroll and related liabilities, and advances approximate their fair values because of the short maturity of these instruments. F- 8 NOVINT TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 Recently Issued Accounting Pronouncements The Company has reviewed the recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC and they did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statement presentation or disclosures. NOTE 3 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses are as follows: December 31, December 31, 2020 2019 Trade payables $ 117,313 $ 99,486 Accrued expenses 2,224 7,756 Accrued royalties 583,132 533,132 Total accounts payable and accrued expenses $ 702,669 $ 640,374 Accrued royalties relate to the Company’s licensing agreements with various parties providing gaming software. These licensing agreements have royalty fees ranging from 5% to 50% of either gross or net revenue, and a flat per user end fee of $0.50. Under one or more of these agreements, there was an annual aggregate minimum payment due of $50,000 which has been recorded as accrued royalties but remains unpaid. Accrued royalty fees as of December 31, 2020 and December 31, 2019 was $583,132 and $533,132, respectively. If contested, the Company may be found to be in breach of obligations to pay these amounts (although the Company believes this obligation is no longer ongoing), thus the remaining obligation under this agreement will remain as a liability. NOTE 4 – COMMITMENTS AND CONTINGENCIES From time to time, in the normal course of business, the Company is subject to routine litigation incidental to its business. Although there can be no assurances as to the ultimate disposition of any such matters, it is the opinion of management, based upon the information available at this time, that there are no matters, individually or in the aggregate, that will have a material adverse effect on the results of operations and financial condition of the Company. NOTE 5 – INCOME TAXES The Company files corporate income tax returns in the United States (federal), in New Mexico and in New York. The Company is subject to federal, state and local income tax examinations by tax authorities for the tax years 2017 through 2020. As of December 31, 2020, the Company had federal and state net operating loss carry forwards of $34.0 million and $0.7 million, respectively. Federal net operating losses generated prior to January 1, 2018, amounting to $33.5 million, and may be offset against future taxable income, subject to limitation under IRC Section 382, which begin to expire in 2022 if not utilized prior to that date, and fully expire during various years through 2037 for federal purposes. Net operating losses generated after January 1, 2018, amounting to $0.4 million, no longer have an expiration. State net operating loss carryforwards will begin to expire in 2035 through 2040. The Company does not incur a provision for income taxes because the Company has historically incurred operating losses and maintains a full valuation allowance against its net deferred tax assets due to the uncertainty surrounding the realizability of the benefit, based on a more likely than not criteria and in consideration of available positive and negative evidence. The valuation allowance overall increased by approximately $41,000 and 34,000 in the years ended 2020 and 2019, respectively, and was approximately $7,059,000 and $7,018,000, respectively. The Company has fully reserved the deferred tax asset resulting from available net operating loss carryforwards. F- 9 NOVINT TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 The reconciliation of income tax expense computed at the U.S. federal statutory rate to the income tax provision for the years ended December 31, 2020 and 2019 is as follows: Years Ended December 31, 2020 2019 Income before income taxes $ (167,986 ) $ (134,102 ) Taxes under statutory US tax rates (35,277 ) (28,161 ) Increase (decrease) in taxes resulting from: State taxes (6,370 ) (5,036 ) Other — 10 Increase (decrease) in valuation allowance 41,647 33,262 Income tax expense $ — $ 75 The increase in the Company's net valuation allowance was caused by continued net operating losses from ongoing operations. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities consist of the following: Years Ended December 31, 2020 2019 Deferred Tax Assets $ 7,059,329 $ 7,017,682 Valuation allowance (7,059,329 ) (7,017,682 ) Net deferred tax assets $ — $ — NOTE 6 – STOCKHOLDERS’ EQUITY Preferred Stock The Company is authorized to issue up to 12,500,000 shares of $0.0001 par value preferred stock. No shares of preferred stock are currently outstanding. The Board of Directors may designate the authorized but unissued shares of the preferred stock with such rights and privileges as the Board of Directors may determine. As such, the Board of Directors may issue preferred shares and designate the conversion, voting and other rights and preferences without notice to the shareholders and without shareholder approval. Common Stock The Company is authorized to issue up to 500,000,000 shares of $0.0001 par value common stock. All issued shares of common stock are entitled to vote on a 1 share/1 vote basis. The Company had 202,308,728 shares of common stock issued and outstanding as of December 31, 2020. NOTE 7 – SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date these financial statements were issued and included in this Annual Report on Form 10-K filed with the SEC. F- 10 NOVINT TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 AND 2019 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a)(1) Financial Statements. For the financial statements included in this annual report, see “Index to the Financial Statements” on page F-1. (a)(2) Financial Statement Schedules. All schedules are omitted because they are not applicable or because the required information is included in the financial statements or notes thereto. (a)(3) Exhibits. The list of exhibits filed as a part of this annual report is set forth on the Exhibit Index immediately preceding such exhibits and is incorporated by reference in this Item 15(a)(3). (b) Exhibits. See Exhibit Index. (c) Separate Financial Statements and Schedules . None. EXHIBIT INDEX 31.1 Certification of the President and Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to section 302 of the Sarbanes- Oxley Act of 2002 (filed herewith). 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes- Oxley Act of 2002 (filed herewith). 101.INS* XBLR Instance Document 101.SCH* XBLR Taxonomy Extension Schema Document 101.CAL* XBLR Taxonomy Extension Calculation Linkbase Document 101.DEF* XBLR Taxonomy Extension Definition Linkbase Document 101.LAB* XBLR Taxonomy Extension Label Linkbase Document 101.PRE* XBLR Taxonomy Extension Presentation Linkbase Document * Filed herewith. ** Furnished herewith. † Management contract or compensatory plan or arrangement. ± Confidential treatment has been granted with respect to certain portions of this exhibit. 19 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. March 23, 2021 NOVINT TECHNOLOGIES, INC. By: /s/ Orin Hirschman Name: Orin Hirschman Title: President (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities indicated, and on the dates indicated below: Signature Title Date /s/Orin Hirschman President, Principal Executive Officer and Director (Principal Financial Officer) March 23, 2021 Orin Hirschman /s/ Martin Chopp Director March 23, 2021 Martin Chopp /s/ Ryan Christoff Director March 23, 2021 Ryan Christoff 20