Dror Ortho-Design, Inc. 10-Q

Item 1. Financial Statements Novint Technologies, Inc. CONDENSED BALANCE SHEETS September 30, December 31, 2022 2021 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 97,708 $ 185,935 Accounts receivables - related party — 1,360 Prepaid expenses 5,093 5,068 Total Current Assets 102,801 192,363 TOTAL ASSETS $ 102,801 $ 192,363 LIABILITIES AND STOCKHOLDERS’ DEFICIT CURRENT LIABILITIES: Accounts payable and accrued expenses $ 99,903 $ 104,337 Accrued Royalties 670,632 633,132 Total Current Liabilities 770,535 737,469 TOTAL LIABILITIES 770,535 737,469 STOCKHOLDERS’ DEFICIT Preferred stock, $ 0.0001 par value; 12,500,000 shares authorized, 0 shares issued and outstanding as of September 30, 2022 and December 31, 2021 — — Common stock, $ 0.0001 par value; 500,000,000 shares authorized, 202,308,728 shares issued and outstanding as of September 30, 2022 and December 31, 2021 20,231 20,231 Additional paid in capital 41,059,293 41,059,293 Accumulated deficit ( 41,747,258 ) ( 41,624,630 ) TOTAL STOCKHOLDERS’ DEFICIT ( 667,734 ) ( 545,106 ) TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 102,801 $ 192,363 The accompanying notes are an integral part of these financial statements. 3 Novint Technologies, Inc. CONDENSED STATEMENTS OF OPERATIONS (Unaudited) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Revenue $ — $ 913 $ — $ 2,568 Operating Expenses Professional fees 13,325 6,664 52,828 40,596 General and administrative expenses 23,131 21,410 69,786 73,890 Total Operating Expenses 36,456 28,074 122,614 114,486 Loss from operations ( 36,456 ) ( 27,161 ) ( 122,614 ) ( 111,918 ) Other expense: Interest expense, net — ( 50 ) ( 14 ) ( 155 ) Total other expense — ( 50 ) ( 14 ) ( 155 ) Loss before provision for income taxes ( 36,456 ) ( 27,211 ) ( 122,628 ) ( 112,073 ) Provision for income taxes — — — — Net loss $ ( 36,456 ) $ ( 27,211 ) $ ( 122,628 ) $ ( 112,073 ) Net loss per share Basic and Diluted $ ( 0.00 ) $ ( 0.00 ) $ ( 0.00 ) $ ( 0.00 ) Weighted-average common shares outstanding Basic and Diluted 202,308,728 202,308,728 202,308,728 202,308,728 The accompanying notes are an integral part of these financial statements. 4 Novint Technologies, Inc. CONDENSED STATEMENTS OF STOCKHOLDERS’ DEFICIT (Unaudited) Three Months Ended September 30, 2022 Additional Common Stock Paid-in Accumulated Shares Amount Capital (Deficit) Total Balances, June 30, 2022 202,308,728 $ 20,231 $ 41,059,293 $ ( 41,710,802 ) $ ( 631,278 ) Net Loss for the Three Months — — — ( 36,456 ) ( 36,456 ) Balances, September 30, 2022 202,308,728 $ 20,231 $ 41,059,293 $ ( 41,747,258 ) $ ( 667,734 ) Nine Months Ended September 30, 2022 Additional Common Stock Paid-in Accumulated Shares Amount Capital (Deficit) Total Balances, December 31, 2021 202,308,728 $ 20,231 $ 41,059,293 $ ( 41,624,630 ) $ ( 545,106 ) Net Loss for the Nine Months — — — ( 122,628 ) ( 122,628 ) Balances, September 30, 2022 202,308,728 $ 20,231 $ 41,059,293 $ ( 41,747,258 ) $ ( 667,734 ) Three Months Ended September 30, 2021 Additional Common Stock Paid-in Accumulated Shares Amount Capital (Deficit) Total Balances, June 30, 2021 202,308,728 $ 20,231 $ 41,059,293 $ ( 41,538,983 ) $ ( 459,459 ) Net Loss for the Three Months — — — ( 27,211 ) ( 27,211 ) Balances, September 30, 2021 202,308,728 $ 20,231 $ 41,059,293 $ ( 41,566,194 ) $ ( 486,670 ) Nine Months Ended September 30, 2021 Additional Common Stock Paid-in Accumulated Shares Amount Capital (Deficit) Total Balances, December 31, 2020 202,308,728 $ 20,231 $ 41,059,293 $ ( 41,454,121 ) $ ( 374,597 ) Net Loss for the Nine Months — — — ( 112,073 ) ( 112,073 ) Balances, September 30, 2021 202,308,728 $ 20,231 $ 41,059,293 $ ( 41,566,194 ) $ ( 486,670 ) The accompanying notes are an integral part of these financial statements. 5 Novint Technologies, Inc. CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) For the Period Ended September 30, 2022 2021 Cash flows from operating activities: Net loss $ ( 122,628 ) $ ( 112,073 ) Changes in operating assets and liabilities: Prepaid expenses and other current assets ( 25 ) 1,072 Accounts receivables – related party 1,360 ( 1,360 ) Accounts payable and accrued expenses ( 4,434 ) ( 18,149 ) Accrued Royalties 37,500 37,500 Net cash used in operating activities ( 88,227 ) ( 93,010 ) Net cash used in financing activities — — Net decrease in cash ( 88,227 ) ( 93,010 ) Cash and cash equivalents, beginning of year 185,935 322,032 Cash and cash equivalents, end of period $ 97,708 $ 229,022 Supplemental cash flow information: Cash paid for interest $ 14 $ 155 Cash paid for taxes $ — $ — The accompanying notes are an integral part of these financial statements. 6 NOVINT TECHNOLOGIES, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS SEPTEMBER 30, 2022 (Unaudited) NOTE 1 – DESCRIPTION OF BUSINESS Novint Technologies, Inc. (the “Company” or “Novint”) 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 is engaged in the business of sales of 3D haptics products and equipment. Haptics refers to one’s sense of touch. The Company’s focus is in the consumer interactive computer gaming market. Additionally, the Company conducts project work in other areas. The Company sells its haptics products primarily to consumers through online retail marketplaces. 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 September 30, 2022, had an accumulated deficit of $ 41,747,258 . For the period ended September 30, 2022, the Company sustained a net loss of $ 122,628 . These factors, among others, indicate that there is 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 and raise additional funding through debt or equity financing during the next twelve months. Based on management’s current assessment, the Company does not expect any material impact on its liquidity due to the COVID-19 pandemic. While the Company is experiencing limited financial impacts at this time, given the global economic slowdown, and the other risks and uncertainties associated with the pandemic, it could have a material adverse effect on our business, financial condition, results of operations and growth prospects. In addition, to the extent the ongoing COVID-19 pandemic adversely affects our business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties faced by the Company. NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed financial statements were prepared using generally accepted accounting principles (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X set forth by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all information or notes required by U.S. GAAP for complete financial statements and should be read in conjunction with the Company’s annual financial statements included within the Company’s Special Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 23, 2022. In the opinion of management, the unaudited condensed financial statements included herein contain all adjustments necessary to present fairly the Company’s financial position and the results of its operations and cash flows for the interim periods presented. Such adjustments are of a normal recurring nature. The results of operations for the three and nine months ended September 30, 2022 may not be indicative of results for the full year. Use of Estimates and Assumptions The preparation of financial statements in conformity with U.S. GAAP 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. The Company bases estimates and assumptions on historical experience, when available, and on various factors that it believes to be reasonable under the circumstances. Management evaluates its estimates and assumptions on an ongoing basis. 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 of $ 250,000 for each institution where accounts are held. At September 30, 2022 and December 31, 2021, our primary operating accounts held approximately $ 97,708 and $ 185,935 , respectively. At times our cash balances may exceed FDIC insured limits. The Company has not experienced any losses in such accounts. 7 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. Revenue from product sales relates to the sale of the Falcon 3D Touch Haptic Controller (the “Falcon”), which is a human-computer user interface and related accessories. The Falcons are manufactured by an unrelated party. Revenue from product sales 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. Accounts Receivable Accounts receivable are stated at the amounts management expects to collect. An allowance for doubtful accounts is recorded based on a combination of historical experience, aging analysis and information on specific accounts. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of September 30, 2022 and December 31, 2021, the company has recorded $ 0 and $ 0 in accounts receivable, respectively. Management has determined that $ 0 allowance is required at September 30, 2022 and December 31, 2021. Accounts Receivable – Related Party Accounts receivable from related party arise from proceeds from the sale of the Company’s products that were collected by a director of the Company on behalf of the Company. As of September 30, 2022 and December 31, 2021, the total accounts receivable from the related party was $ 0 and $ 1,360 , respectively. Income Taxes The Company accounts for income taxes under the asset and liability method as provided in ASC Topic 740, “Income Taxes”. Under this method, deferred tax assets are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates in effect for the year in which the differences are expected to be recovered or settled. 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 based on the weight of available evidence, including expected future earnings. 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. As of September 30, 2022, the Company assessed its income tax expense based on its projected future taxable income for the year ending December 31, 2022 and therefore recorded no amount of income tax expense for the nine months ended September 30, 2022. In addition, the Company has significant deferred tax assets available to offset income tax expense due to net operating loss carry forwards, which currently are subject to a full valuation allowance based on the Company’s assessment of future taxable income. For further information, see our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. 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, payroll and related liabilities, and advances approximate their fair values because of the short maturity of these instruments. 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. 8 NOTE 3 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses are as follows: September 30, December 31, 2022 2021 Trade payables $ 99,313 $ 102,313 Accrued expenses 590 2,024 Total accounts payable and accrued expenses $ 99,903 $ 104,337 NOTE 4 – ACCRUED ROYALTIES Accrued royalties relate to the Company’s licensing agreements with various parties providing gaming software to the Company. These licensing agreements have royalty fees ranging from 5 % to 50 % of either gross or net revenue, and a flat fee per end user of $ 0.50 . Under one or more of these agreements, there is an annual aggregate minimum payment due of $ 50,000 , which has been recorded as accrued royalties but remains unpaid. Accrued royalties as of September 30, 2022 and December 31, 2021 were $ 670,632 and $ 633,132 , respectively. If contested, the Company may be found to be in breach of obligations to pay these amounts (though the Company believes this obligation is no longer due), thus the remaining obligation under this agreement remains as a liability on the Company’s Balance Sheet. NOTE 5 – 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 6 – STOCKHOLDERS’ EQUITY Preferred Stock The Company is currently 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 currently 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 September 30, 2022, and December 31, 2021. NOTE 7 – SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date these financial statements were issued. The Company confirms non-occurrence of any subsequent agreements or events. 9