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United States
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended: June 30, 2006
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File No. 000-51783
 
 NOVINT TECHNOLOGIES, INC.
  Delaware
    
    85-0461778(State of Incorporation)
    
    (IRS Employer ID. No.)4109 Bryan Avenue NW, Albuquerque, NM
    
    87114(Address of Principal Executive Offices)
    
    (Zip Code)
 : (
 þ o
 o þ




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TABLE OF CONTENTS
 PART I  FINANCIAL INFORMATIONItem 1. Financial StatementsItem 2. Managements Discussion and Analysis or Plan of OperationItem 3. Controls and ProceduresPART II  OTHER INFORMATIONItem 1. Legal ProceedingsItem 2. Unregistered Sales of Equity Securities and Use of ProceedsItem 3. Defaults Upon Senior SecuritiesItem 4. Submission of Matters to a Vote of Security HoldersItem 5. Other InformationItem 6. ExhibitsITEM 13. EXHIBITSSIGNATURESEXHIBIT 31EXHIBIT 32
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##### Table of Contents



Novint Technologies, Inc.
 BALANCE SHEET
 June 30, 2006(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    301,122Prepaid expenses and other current assets
    
    
    31,838Accounts receivable, net
    
    
    925Deferred financing costs
    
    
    74,354Costs and estimated earnings in excess of billings on contracts
    
    
    23,402Total current assets
    
    
    431,641PROPERTY AND EQUIPMENT:Office equipment
    
    
    48,841Software
    
    
    7,246Computer equipment
    
    
    213,555269,642Less: Accumulated depreciation
    
    
    232,391Net property and equipment
    
    
    37,251INTANGIBLE ASSETS, NET
    
    
    136,472Total assets
    
    $
    605,364
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Novint Technologies, Inc.
 BALANCE SHEET
(Continued)
 June 30, 2006(Unaudited)LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)CURRENT LIABILITIES:Accounts payable
    
    $
    180,162Accrued payroll related liabilities
    
    
    133,322Accrued royalties
    
    
    15,000Accrued interest
    
    
    32,219Accrued research and development liabilities
    
    
    189,646Accrued expenses, related party
    
    
    43,750Other accrued liabilities
    
    
    82,597Convertible Notes payable
    
    
    358,081Note payable
    
    
    200,000Total current liabilities
    
    
    1,234,777COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY (DEFICIT):Preferred stock, Series A: $0.01 par value;
authorized 4,000 shares, 0 issued and outstanding
    
    
    Common stock, authorized 50,000,000 shares, $0.01 par value;
17,687,427 issued and outstanding
    
    
    176,874Additional paid-in capital
    
    
    9,039,307Accumulated deficit
    
    
    (9,840,989
    )Accumulated other comprehensive loss
    
    
    (4,605
    )Total stockholders equity (deficit)
    
    
    (629,413
    )Total liabilities and stockholders equity (deficit)
    
    $
    605,364
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Novint Technologies, Inc.
 STATEMENTS OF OPERATIONS
 For the
    
    
    For the
    
    
    For the
    
    
    For theThree Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJune 30, 2006
    
    
    June 30, 2005
    
    
    June 30, 2006
    
    
    June 30, 2005(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)RevenueProject
    
    $
    44,494
    
    
    $
    140,524
    
    
    $
    81,350
    
    
    $
    227,805Product
    
    
    286
    
    
    
    431
    
    
    
    2,211
    
    
    
    28,361Total revenue
    
    
    44,780
    
    
    
    140,955
    
    
    
    83,561
    
    
    
    256,166Cost of goods sold:Project
    
    
    37,888
    
    
    
    61,612
    
    
    
    63,567
    
    
    
    116,744Product
    
    
    
    
    
    
    3,653
    
    
    
    
    
    
    
    7,933Total cost of goods sold
    
    
    37,888
    
    
    
    65,265
    
    
    
    63,567
    
    
    
    124,677Gross margin
    
    
    6,892
    
    
    
    75,690
    
    
    
    19,994
    
    
    
    131,489Costs and expensesResearch and development
    
    
    73,704
    
    
    
    240,620
    
    
    
    163,544
    
    
    
    651,794General and administrative
    
    
    551,963
    
    
    
    400,595
    
    
    
    1,020,990
    
    
    
    919,180Depreciation and amortization
    
    
    25,201
    
    
    
    28,370
    
    
    
    49,898
    
    
    
    58,315Sales and marketing
    
    
    60,087
    
    
    
    19,380
    
    
    
    86,435
    
    
    
    73,638Total costs and expenses
    
    
    710,955
    
    
    
    688,965
    
    
    
    1,320,867
    
    
    
    1,702,927Loss from operations
    
    
    (704,063
    )
    
    
    (613,275
    )
    
    
    (1,300,873
    )
    
    
    (1,571,438
    )Other (income) expenseInterest income
    
    
    
    
    
    
    (2,923
    )
    
    
    
    
    
    
    (2,923
    )Interest expense
    
    
    167,982
    
    
    
    49,337
    
    
    
    200,909
    
    
    
    49,395Total other expenses
    
    
    167,982
    
    
    
    46,414
    
    
    
    200,909
    
    
    
    46,472Net loss
    
    
    (872,045
    )
    
    
    (659,689
    )
    
    
    (1,501,782
    )
    
    
    (1,617,910
    )Preferred stock accretion
    
    
    
    
    
    
    (7,294
    )
    
    
    (170,974
    )
    
    
    (14,384
    )Net loss available to common stockholders
    
    $
    (872,045
    )
    
    $
    (666,983
    )
    
    $
    (1,672,756
    )
    
    $
    (1,632,294
    )Loss per share, basic and diluted:Net loss
    
    $
    (0.05
    )
    
    $
    (0.05
    )
    
    $
    (0.09
    )
    
    $
    (0.12
    )Net loss available to common stockholders
    
    $
    (0.05
    )
    
    $
    (0.05
    )
    
    $
    (0.10
    )
    
    $
    (0.12
    )Weighted-average common shares outstanding,
basic and diluted
    
    
    17,150,198
    
    
    
    14,162,081
    
    
    
    16,316,950
    
    
    
    14,005,670
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Novint Technologies, Inc.
 STATEMENTS OF CASH FLOWS
 For theSix Months EndedJune 30, 2006
    
    
    June 30, 2005(Unaudited)
    
    
    (Unaudited)Cash flows from operating activities:Net loss
    
    $
    (1,501,782
    )
    
    $
    (1,617,910
    )Adjustments to reconcile net loss to net cash used in
operating activitiesDepreciation and amortization
    
    
    49,898
    
    
    
    58,314Common stock issued for services
    
    
    38,500
    
    
    
    290,700Options issued to employees for services
    
    
    158,840
    
    
    
    Options issued to consultants for services
    
    
    117,349
    
    
    
    40,770Warrants issued to consultants for services
    
    
    103,789
    
    
    
    Reprice of warrants previously granted in debt offering
    
    
    155,748
    
    
    
    Amortization of unearned compensation
    
    
    
    
    
    
    103,587Reserve for contract loss
    
    
    
    
    
    
    (5,007
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    74,215
    
    
    
    25,911Prepaid expenses
    
    
    (23,685
    )
    
    
    (12,866
    )Deferred financing costs
    
    
    (70,322
    )
    
    
    Accounts payable
    
    
    109,426
    
    
    
    (198,928
    )Accrued liabilities
    
    
    144,605
    
    
    
    448,137Accrued interest
    
    
    38,280
    
    
    
    Accrued royalties
    
    
    (15,000
    )
    
    
    (15,000
    )Costs and estimated earnings in excess of billings
on contracts, net
    
    
    (23,402
    )
    
    
    (59,855
    )Billings in excess of costs and estimated earnings
on contracts, net
    
    
    (12,670
    )
    
    
    (130,450
    )Net cash used by operating activities
    
    
    (656,211
    )
    
    
    (1,072,597
    )Cash flows from investing activities:Property and equipment acquisitions
    
    
    (15,294
    )
    
    
    (3,354
    )Net cash provided (used) by investing activities
    
    
    (15,294
    )
    
    
    (3,354
    )Cash flows from financing activities:Proceeds from notes payable
    
    
    340,000
    
    
    
    Repayment of notes payable
    
    
    (40,000
    )
    
    
    Proceeds from sale of common stock
    
    
    645,000
    
    
    
    Payment of offering costs
    
    
    (14,500
    )
    
    
    Net cash provided by financing activities
    
    
    930,500
    
    
    
    Net increase (decrease) in cash and cash equivalents
    
    
    258,995
    
    
    
    (1,075,951
    )Cash and cash equivalents at beginning of period
    
    
    42,127
    
    
    
    1,329,428Cash and cash equivalents at end of period
    
    $
    301,122
    
    
    $
    253,477Supplemental information:Non-cash: Issuance of common stock in connection with accrued
research and development liabilities
    
    $
    465,000
    
    
    $
    Non-cash: Issuance of common stock in connection with note
payable and accrued interest
    
    $
    983,846
    
    
    $
    Research and Development paid with Note Payable
    
    $
    
    
    
    $
    418,436Fair value accretion on conditionally redeemable, convertible preferred stock
    
    $
    170,974
    
    
    $
    7,090
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PART 1  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 Novint Technologies, Inc.
 NOTES TO FINANCIAL STATEMENTS
 JUNE 30, 2006 AND 2005 (Unaudited)
 NOTE 1  BASIS OF PRESENTATION AND NATURE OF BUSINESS
 Basis of Presentation
  Nature of Business
  Going Concern and Managements Plans
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NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Software Development Costs
  Property and Equipment
  Intangible Assets
   Year Ended December 31,2006
    
    
    37,7902007
    
    
    73,0882008
    
    
    3,9142009
    
    
    3,9142010 and after
    
    
    17,766Total
    
    $
    136,472
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Revenue and Cost Recognition
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Loss per Common Share
 , Earnings Per Share
 Stock Option Plans
   Net loss available to common shareholders, as reported
    
    $
    (1,632,294
    )Add: Stock-based employee compensation expense included in reported net income
    
    
    103,587Deduct: Total stock-based employee compensation expense determined under fair
value-based method for all awards
    
    
    (161,795
    )Pro forma net loss available to common shareholders
    
    $
    (1,690,502
    )Loss available to common shareholders per share, basic and diluted:As reported
    
    $
    (0.12
    )Pro forma
    
    $
    (0.12
    )
  Classification and Measurement of Freestanding Financial Instruments
Originally Issued in Exchange for Employee Services under FASB Statement No. 123(R)
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Application of EITF Issue No. 00-19 to
Freestanding Financial Instruments Originally Issued as Employee Accounting for Derivative Instruments and Hedging
 Research and Development
  Reclassification
  Recent Accounting Pronouncements
  Accounting Changes and
Error Corrections Accounting Changes Reporting Accounting Changes in Interim Financial Statements
   NOTE 3  COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS ON CONTRACTS AND BILLINGS IN EXCESS OF
COSTS AND ESTIMATED EARNINGS ON CONTRACTS
  Costs and estimated earnings incurred on uncompleted contracts
    
    $
    68,678Billings on uncompleted contracts
    
    
    ( 45,276
    )Costs and estimated earnings in excess of billings on uncompleted contracts
    
    $
    23,402
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Billings on uncompleted contracts
    
    $
    Costs and estimated earnings incurred on uncompleted contracts
    
    
    Billings in excess of costs and estimated earnings on uncompleted contracts
    
    $
    
 NOTE 4  INTANGIBLE ASSETS
  Licensing agreements
    
    $
    880,000Patent
    
    
    10,734Software development costs
    
    
    7,071Less accumulated amortization
    
    
    (761,333
    )$
    136,472
 NOTE 5  NOTES PAYABLE
  NOTE 6  CONVERTIBLE NOTES PAYABLE
  NOTE 7  COMMITMENTS AND CONTINGENCIES
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NOTE 8  STOCKHOLDERS EQUITY
 Conditionally Redeemable, Convertible Preferred Stock
    Stock Options
   Shares
    
    
    
    
    
    
    Weighted-Under
    
    
    Price per
    
    
    AverageOption
    
    
    Share
    
    
    Exercise PriceOptions outstanding at 12/31/05
    
    
    8,003,341
    
    
    $
    0.01-$0.66
    
    
    $
    0.26Granted
    
    
    1,768,830
    
    
    $
    1.00
    
    
    $
    1.00Exercised
    
    
    55,505
    
    
    $
    0.01-$0.66
    
    
    $
    0.07Canceled
    
    
    
    
    
    
    
    
    
    $
    Options outstanding at 6/30/06
    
    
    9,716,666
    
    
    $
    0.01-$0.66
    
    
    $
    0.39Exercisable at 6/30/06
    
    
    6,411,236
    
    
    $
    0.01-$1.00
    
    
    $
    0.20
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Outstanding
    
    
    ExercisableWeightedWeighted-
    
    
    Average
    
    
    
    
    
    
    WeightedAverage
    
    
    Remaining
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    Exercise
    
    
    Contractual
    
    
    
    
    
    
    ExercisePrice
    
    Number
    
    
    Price
    
    
    Life (years)
    
    
    Number
    
    
    Price$0.01
    
    
    287,911
    
    
    $
    0.01
    
    
    
    2.05
    
    
    
    287,911
    
    
    $
    0.01$0.05
    
    
    4,600,000
    
    
    $
    0.05
    
    
    
    5.96
    
    
    
    4,600,000
    
    
    $
    0.05$0.50
    
    
    1,173,031
    
    
    $
    0.50
    
    
    
    7.64
    
    
    
    498,031
    
    
    $
    0.50$0.66
    
    
    1,886,894
    
    
    $
    0.66
    
    
    
    8.20
    
    
    
    720,394
    
    
    $
    0.66$1.00
    
    
    1,768,830
    
    
    $
    1.00
    
    
    
    4.73
    
    
    
    304,900
    
    
    $
    1.00Total
    
    
    9,716,666
    
    
    $
    0.39
    
    
    
    7.10
    
    
    
    6,411,236
    
    
    $
    0.20
 NOTE 9  EQUITY TRANSACTIONS
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NOTE 10 WARRANTS
  June 30, 2006Wtd AvgShares
    
    
    Ex PriceOutstanding at December 31, 2005
    
    
    3,138,000
    
    
    $
    1.29Granted
    
    
    397,500
    
    
    
    2.00Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (
    )
    
    
    Outstanding at June 30, 2006
    
    
    3,535,500
    
    
    
    1.38Exercisable at June 30, 2006
    
    
    3,285,500
    
    
    
    1.37Weighted average fair value of warrants granted
    
    $
    1.62
    
    
    $
  Warrants Outstanding
    
    Warrants ExercisableWeighted-Average
    
    Weighted-
    
    
    
    
    
    Weighted-Number
    
    Remaining
    
    Average
    
    Number
    
    AverageRange of
    
    Outstanding at
    
    Contractual
    
    Exercise
    
    Exercisable
    
    ExerciseExercise Prices
    
    6/30/06
    
    Life
    
    Price
    
    at 6/30/06
    
    Price$0.00 to $0.25
    
    
    600,000
    
    
    7.26 years
    
    
    $
    0.25
    
    
    
    600,000
    
    
    $
    0.25$0.26 to $0.50
    
    
    250,000
    
    
    
    7.35
    
    
    
    0.50
    
    
    
    250,000
    
    
    
    0.50$0.51 to $1.00
    
    
    838,500
    
    
    
    4.45
    
    
    
    1.00
    
    
    
    588,500
    
    
    
    1.00$1.01 to $2.00
    
    
    1,847,000
    
    
    
    2.64
    
    
    
    2.00
    
    
    
    1,847,000
    
    
    
    2.00$0.25 to $2.00
    
    
    3,535,500
    
    
    
    
    
    
    
    
    
    
    
    3,285,500
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NOTE 11  RELATED PARTIES
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NOTE 12  SUBSEQUENT DISCLOSURE
    
 Item 2. Managements Discussion and Analysis or Plan of Operation.
 Note Regarding Forward-Looking Statements
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MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
  OVERVIEW
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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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Item 3. Defaults Upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 Item 5. Other Information.
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Item 6. Exhibits
 
  Number
    
    Description3.1*
    
    Articles of Incorporation3.2*
    
    Bylaws3.3*
    
    Articles of Merger3.4*
    
    Certificate of Merger4.1*
    
    Articles of Incorporation (See Exhibit 3.1)4.2 **
    
    Form of Common Stock Purchase Warrant, April 2006.10.1*
    
    License Agreement with Sandia; Amendments10.2*
    
    Lease for 9620 San Mateo10.3*
    
    Employment Agreement with Tom Anderson10.4*
    
    Employment Agreement with Walter Aviles10.5*
    
    2004 Incentive Stock Plan10.6*
    
    Shareholders Agreement10.7*
    
    Lock Up Agreement10.8*
    
    Miscellaneous Technical Services Agreement between Aramco Services Company and Novint Technologies,
Inc.10.9*
    
    Contract Addendum between Aramco Services Company and Novint Technologies, Inc.10.10*
    
    Amendment to Contract between Aramco Services Company and Novint Technologies, Inc.10.11*
    
    Amendment to Contract between Aramco Services Company and Novint Technologies, Inc.10.12*
    
    Statement of Work between Chevron Corporation and Novint Technologies, Inc.10.13*
    
    Purchase Order from DaimlerChrylser Corporation10.14*
    
    Purchase Order # 94059 from LockheedMartin Corporation10.15*
    
    Purchase Order # 96996 from LockheedMartin Corporation10.16*
    
    Purchase Order # 97860 from LockheedMartin Corporation10.17*
    
    Purchase Order # Q50601685 from LockheedMartin Corporation10.18*
    
    Purchase Order # QQ060592 from LockheedMartin Corporation10.19*
    
    Purchase Order # Q50608809 from LockheedMartin Corporation10.20*
    
    Purchase Order #24232 from Sandia National Laboratories10.21*
    
    Purchase Order #27467 from Sandia National Laboratories10.22*
    
    Purchase Order #117339 from Sandia National Laboratories10.23*
    
    Purchase Order #250810 from Sandia National Laboratories10.24*
    
    Undersea Exploration Modeling Agreement between Woods Hole Oceanographic Institute and Novint
Technologies, Inc.
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Number
    
    Description10.25*
    
    Purchase Order for Lunar Design, Inc. dated April 7, 200510.26*
    
    Sublicense Agreement between Manhattan Scientifics and Novint Technologies, Inc.10.27*
    
    License and Royalty Agreement between Manhattan Scientifics and Novint Technologies, Inc.10.28*
    
    Research Development and License Agreement between Manhattan Scientifics and Novint Technologies, Inc.10.29*
    
    Intellectual Property License Agreement with Force Dimension LLC10.30*
    
    Purchase Order with Lockheed Martin dated April 1, 200510.31*
    
    Purchase Order with Lockheed Martin dated April 4, 200510.32*
    
    Purchase Order with Lockheed Martin dated April 21, 200510.33*
    
    Purchase Order with Deakin University dated April 6, 200410.34*
    
    Purchase Order with Robarts Research dated September 24, 200410.35*
    
    Purchase Order with University of New Mexico dated March 16, 200410.36*
    
    Amendment to Agreement with Force Dimension Dated May 5, 200510.37*
    
    Amendment to contract between Aramco Services Company and Novint Technologies, Inc.10.36#
    
    Purchase Order with Lockheed Martin dated February 16, 200610.37#
    
    Amendment to Intellectual Property License Agreement with Force Dimension LLC dated March 9, 200610.38#
    
    Purchase Order with Lockheed Martin dated March 3, 200610.39
    
    Form of Subscription Agreement for Securities, April 2006.14#
    
    Code of Ethics31
    
    Certification Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 200232
    
    Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The
Sarbanes-Oxley Act Of 2002
 
 *
    
    Filed with the Issuers Registration Statement on Form SB-2 on May 17, 2004, and as
subsequently amended, and incorporated herein by reference.#
    
    Filed with the Issuers Annual Report on Form 10-KSB, filed with the Commission on April 17,
2006, and incorporated herein by reference.**
    
    Filed with the Issuers Periodic Report on Form 10-QSB, filed with the Commission on May 22,
2006, and incorporated herein by reference.  29




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SIGNATURES
  NOVINT TECHNOLOGIES,INC.By:
    /s/  TOM ANDERSONTom AndersonChief Executive Officer ,
President and Chief Financial
OfficerAugust 21, 2006 30