SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

x ~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED~~ ~~March 31,~~
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED September 30, 2008

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

Commission File No. 000-51783

Novint Technologies, Inc.

(Exact name of small business issuer as specified in it charter)

Delaware		85-0461778
(State or other jurisdiction of incorporation or		(IRS Employer Identification
organization)		No.)

4601 Paradise Boulevard NW, Suite B,

Albuquerque, New Mexico 87114

(Address of principal executive offices)

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

~~Large Accelerated filer~~ o~~Non-Accelerated Filer~~ o

Large Accelerated filer o

Non-Accelerated Filer o

Smaller Reporting Company x

The registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes o No x

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each issuer's classes of common stock, as of the latest practicable date: ~~31,936,619~~32,255,062 issued and outstanding as of ~~May 12,~~November 11, 2008.

NOVINT TECHNOLOGIES, INC.

TABLE OF CONTENTS

TO QUARTERLY REPORT ON FORM 10-Q

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~~Table of Contents~~

Novint Technologies, Inc.
BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS' EQUITY

The accompanying notes are an integral part of these financial statements.

Novint Technologies, Inc.

STATEMENTS OF OPERATIONS

For the Three Months Ended
March 31, 2008 March 31, 2007
(Unaudited) (Unaudited)
Revenue:
Project $ 27,579 $ 128,731
Product 44,250 —
Total revenue 71,829 128,731

Cost of goods sold:
Project 21,187 107,481
Product 58,883 —
Total cost of goods sold 80,070 107,481

Gross profit (8,241 ) 21,250

Operating expenses
Research and development 313,526 235,570
General and administrative 1,328,201 1,495,206
Depreciation and amortization 99,147 41,188
Sales and marketing 131,849 149,436
Total operating expenses 1,872,723 1,921,400

Loss from operations (1,880,964 ) (1,900,150 )

Other (income) expense
Interest income (12,252 ) (27,635 )
Interest expense 704 143,684
Other (income) expense (2,207 ) —

Net other expenses (13,755 ) 116,049

Net loss $ (1,867,209 ) $ (2,016,199 )

Loss per share, basic and diluted:
Net loss $ (0.06 ) $ (0.09 )

Weighted-average common shares outstanding,
basic and diluted 31,902,829 23,352,495

	For the Three Months Ended						For the Nine Months Ended
	September 30, 2008			September 30, 2007			September 30, 2008			September 30, 2007
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue:
Project	$	4,500		$	5,892		$	50,229		$	164,796
Product		71,649			81,785			181,848			117,275
Total revenue		76,149			87,677			232,077			282,071


Cost of goods sold:
Project		3,014			2,569			37,141			126,304
Product		81,396			87,896			210,549			129,341
Total cost of goods sold		84,410			90,465			247,690			255,645


Gross profit (loss)		(8,261	)		(2,788	)		(15,613	)		26,426

Operating expenses
Research and development		323,649			290,932			918,580			913,573
General and administrative		1,214,010			1,160,109			3,839,384			3,730,676
Depreciation and amortization		161,416			93,879			379,606			202,996
Sales and marketing		152,479			452,148			378,688			770,197
Total operating expenses		1,851,554			1,997,068			5,516,258			5,617,442

Loss from operations		(1,859,815	)		(1,999,856	)		(5,531,871	)		(5,591,016	)

Other (income) expense
Interest income		(1,521	)		(85,025	)		(15,312	)		(192,573	)
Interest expense		45,880			2,979			77,032			146,699
Debt discount related to convertible debts		431,264			-			867,087			-
Other (income) expense		-			-			(2,207	)		-

Net other (income) expense		475,623			(82,046	)		926,600			(45,874	)


Net loss	$	(2,335,438	)	$	(1,917,810	)	$	(6,458,471	)	$	(5,545,142	)

Loss per share, basic and diluted:
Net loss	$	(0.07	)	$	(0.06	)	$	(0.20	)	$	(0.19	)

Weighted-average common shares
outstanding, basic and diluted		32,259,424			31,626,498			32,023,821			28,772,362

The accompanying notes are an integral part of these financial statements.

Novint Technologies, Inc.

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Nine Months Ended September 30, 2008

(Unaudited)

											Accumulated
					Additional						Other
	Common Stock				Paid-in			Accumulated			Comprehensive
	Shares		Amount		Capital			(Deficit)			Loss			Total

Balances, December 31, 2007		31,898,955	$	318,990	$	25,348,138		$	(20,745,404	)	$	(4,605	)	$	4,917,119

Common stock issued for services		27,664		277		26,923			-			-			27,200
Common stock issued related to conversion of convertible debts		72,900		729		72,170			-			-			72,899
Common stock issued for settlement of accrued liabilities		117,993		1,180		115,720			-			-			116,900
Common stock issued related to exercise of options		135,000		1,350		66,150			-			-			67,500
Common stock issued related to cashless options		2,550		26		(26	)		-			-			-
Options vested for employees services		-		-		353,089			-			-			353,089
Options vested to consultants for services		-		-		381,219			-			-			381,219
Warrants issued for financing costs		-		-		48,459			-			-			48,459
Debt discount and beneficial conversion feature related to convertible notes		-		-		5,235,097			-			-			5,235,097
Net loss		-		-					(6,458,471	)		-			(6,458,471	)

Balances, September 30, 2008 (Unaudited)		32,255,062	$	322,552	$	31,646,939		$	(27,203,875	)	$	(4,605	)	$	4,761,011

The accompanying notes are an integral part of these financial statements.

Novint Technologies, Inc.
STATEMENTS OF CASH FLOWS

	For the Nine Months Ended
	September 30,			September 30,
	2008			2007
	(Unaudited)			(Unaudited)
Cash flows from operating activities:
Net loss	$	(6,458,471	)	$	(5,545,142	)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities
Depreciation and amortization		379,606			202,996
Amortization of capitalized finance cost and debt discount		932,809			-
Common stock issued for services		27,200			434,002
Options issued to employees and consultant for services		734,308			866,780
Changes in operating assets and liabilities:
Accounts receivable		52,269			(31,804	)
Prepaid expenses		(857,186	)		(1,133,704	)
Inventory		(1,150,187	)		(133,308	)
Deposit on purchase of inventory		420,705			-
Prepaid expenses		(854,007	)		-
Deposits		14,839			283,071
Accounts payable and accrued liabilities		(98,452	)		218,459
Accrued expenses related party		17,401			(53,122	)
Costs and estimated earnings in excess of billings on contracts, net		-			(5,892	)
Deferred revenues		(15,576	)		46,779
Billings in excess of costs and estimated earnings on contracts, net		-			(5,500	)
Net cash (used in) operating activities		(6,854,742	)		(4,856,385	)

Cash flows from (to) investing activities:
Intangible expenditures		(39,424	)		(155,462	)
Capital outlay for software development costs		(89,056	)		(406,519	)
Capital outlay for investment in marketable securities		-			(1,993,633	)
Property and equipment purchases		(132,354	)		(244,809	)
Net cash (used in) investing activities		(260,834	)		(2,800,423	)

Cash flows from (to) financing activities:
Proceeds from exercise of options		67,500			136,684
Proceeds from issuance of common stock		-			10,330,000
Offering costs		(315,501	)		(385,010	)
Proceeds from convertible notes payable		5,235,097			-
Net cash provided by financing activities		4,987,096			10,081,674

Net increase (decrease) in cash and cash equivalents		(2,128,480	)		2,424,866
Cash and cash equivalents at beginning of period		2,704,367			255,468

Cash and cash equivalents at end of period	$	575,887		$	2,680,334

Supplemental information:
Interest paid	$	-		$	-
Income taxes paid	$	-		$	-
Non-cash investing and financing activities:
Debt discount and deferred financing cost related to convertible notes
payable recorded against paid-in capital	$	5,235,097		$	-
Payment of offering costs with 60,000 warrants	$	48,459		$	-
Deferred financing cost recognize and netted against paid-in capital	$	-		$	54,354
Purchase of licenses with common stock	$	-		$	10,001
Conversion of convertible debts with common stock	$	72,899		$	-
Payment of notes payable and accrued interest with common stock	$	-		$	358,081
Payment of accrued liabilities with common stock	$	116,900		$	585,634

The accompanying notes are an integral part of these financial statements.

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~~Novint Technologies, Inc.~~

~~STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY~~

~~For the Three Months Ended March 31, 2008~~

Accumulated
Additional Other
Common Stock Paid-in Accumulated Comprehensive
Shares Amount Capital (Deficit) Loss Total

Balances, December 31, 2007 31,898,955 $ 318,990 $ 25,348,138 $ (20,745,404 ) $ (4,605 ) $ 4,917,119

Common stock issued for services 7,664 77 7,123 — — 7,200
Options vested for employees services — — 122,139 — — 122,139
Options vested to consultants for services — — 134,571 — — 134,571
Debt discount and financing cost related
to convertible notes — — 2,025,000 — — 2,025,000
Net loss — — (1,867,209 ) — (1,867,209 )

Balances, March 31, 2008 (Unaudited) 31,906,619 $ 319,067 $ 27,636,971 $ (22,612,613 ) $ (4,605 ) $ 5,338,820

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~~Novint Technologies, Inc.~~

~~STATEMENTS OF CASH FLOWS~~

For the Three Months Ended
March 31, March 31,
2008 2007
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net loss $ (1,867,209 ) $ (2,016,199 )
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities
Depreciation and amortization 99,147 41,188
Common stock issued for services 7,200 351,001
Options issued to employees and consultant for services 256,710 393,113
Changes in operating assets and liabilities:
Accounts receivable 47,550 (75,417 )
Prepaid expenses (414,778 ) 31,365
Inventory (483,786 ) —
Deposit on purchase of inventory (135,463 ) —
Prepaid expenses (502,679 ) —
Deposits 26,839 —
Accounts payable and accrued liabilities 42,190 195,421
Accrued expenses related party 248 35,494
Costs and estimated earnings in excess of billings on contracts, net — (48,675 )
Deferred revenues (3,273 ) 31,507
Billings in excess of costs and estimated earnings on contracts, net — 2,668
Net cash (used in) operating activities (2,927,304 ) (1,058,534 )

Cash flows from (to) investing activities:
Intangible expenditures (22,539 ) —
Capital outlay for software development costs (27,424 ) (15,639 )
Property and equipment purchases (77,683 ) —
Net cash (used in) investing activities (127,646 ) (15,639 )

Cash flows from (to) financing activities:
Proceeds from exercise of options — 57,636
Proceeds from issuance of common stock — 9,500,000
Offering costs (60,000 ) (370,010 )
Proceeds from convertible notes payable 2,025,000 —
Net cash provided by financing activities 1,965,000 9,187,626

Net increase (decrease) in cash and cash equivalents (1,089,950 ) 8,113,453
Cash and cash equivalents at beginning of period 2,704,367 255,468

Cash and cash equivalents at end of period $ 1,614,417 $ 8,368,921

Supplemental information:
Interest paid $ — $ —
Income taxes paid $ — $ —
Non-cash investing and financing activities:
Debt discount and deferred financing cost related to convertible notes
payable recorded against paid-in capital $ 2,025,000 $ —
Payment of offering costs with 60,000 warrants $ 41,728 $ —
Deferred financing cost recognize and netted against paid-in capital $ — $ 54,354
Purchase of licenses with common stock $ — $ 10,001
Payment of notes payable and accrued interest with common stock $ — $ 358,081
Payment of accrued liabilities with common stock $ — $ 74,000
Receivable related to stock options exercised $ — $ 75,000

~~The accompanying notes are an integral part of these financial statements.~~

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Novint Technologies, Inc.

NOTES TO FINANCIAL STATEMENTS

~~MARCH 31,~~SEPTEMBER 30, 2008 ~~and~~AND 2007

(Unaudited)

NOTE 1 — BASIS OF PRESENTATION AND NATURE OF BUSINESS

Basis of Presentation

The unaudited financial statements have been prepared by Novint Technologies, Inc. (the ~~“Company”~~“Company“ or “Novint”), in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited interim financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-KSB for the period ended December 31, 2007. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented. The results of the three and nine months ended ~~March 31,~~September 30, 2008 are not necessarily indicative of the results to be expected for the full year ending December 31, 2008.

Reclassifications

Certain prior year amounts were reclassified to conform to the ~~March 31,~~September 30, 2008 presentation.

Nature of Business

Novint Technologies, Inc. (the “Company” or “Novint”) iswas 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. 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 in the consumer interactive computer gaming market, but the ~~Company~~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 the Company’s website at www.novint.com and retail outlets.

Management’s Plans

As of ~~March 31,~~September 30, 2008, the Company had total current assets of ~~$3,883,510~~$3,408,802 and total current liabilities of ~~$843,659,~~$1,146,219, resulting in a working capital surplus of ~~$3,039,851.~~$2,262,583. As of ~~March 31,~~September 30, 2008, the Company had cash totaling ~~$1,614,417.~~$575,887. During the ~~three~~nine months ended ~~March 31,~~September 30, 2008 as further discussed in Note 4, the Company raised approximately ~~$2,025,000~~$5,235,000 from the issuance of convertible notes and warrants through a subscription ~~agreement with a maximum offering amount of $3,750,000. In April 2008 and May 2008, the Company closed an additional $1,725,000 and $703,280, respectively, of debt securities.~~agreement. The Company believes that it has sufficient working capital to ~~sustain~~maintain its operations for twelve months; however, it will ~~require~~continue to seek additional working capital in order to fully execute on its business plans with respect to the haptics technology and the further development of the Novint Falcon and related software and accessories.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Software Development Costs

The Company accounts for its software development costs in accordance with Statement of Financial Accounting Standards (SFAS) Number 86, Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed. This statement requires that, once technological feasibility of a developing product has been established, all subsequent costs incurred in developing that product to a commercially acceptable level be capitalized and amortized ratably over the estimated life of the product, which is generally 5 years. The Company has capitalized software development costs in connection with its haptics technology beginning in 2000. Amortization is computed on the straight-line basis over the estimated life (5 years) of the haptics technology. As of ~~March 31,~~September 30, 2008, the Company’s capitalized software development costs totaled ~~$634,513~~$923,224 (net of ~~$227,694~~$307,627 of accumulated amortization). The estimated annual amortization expense related to the capitalized software development cost is approximately

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~~$155,000~~ $155,000 per year. Amortization expense related to software development costs for the three and nine months ended ~~March 31,~~September, 2008 and 2007 totaled ~~$37,758~~$40,170 and ~~$15,813,~~$117,153, and $32,089 and $66,637, respectively.

The Company follows Statement of Position (SOP) No. 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use, which requires capitalization of certain costs incurred during the development of internal use software. Through ~~March 31,~~September 30, 2008, capitalizable costs incurred have not been significant for any development projects. Accordingly, the Company has charged all related costs to research and development expense in the periods incurred.

Property and Equipment

Property and equipment is stated at cost. Depreciation on property and equipment is calculated on a straight-line depreciation method over the estimated useful lives of the assets, which range from 3 to 5 years for software and computer equipment, ~~2-5 years for leasehold improvements based upon the life of the lease~~ and 5 years for office equipment. Repairs and maintenance costs are expensed as incurred. Depreciation expense was ~~$24,170~~$26,468 and ~~$6,416~~$77,487, and $14,707 and $32,304 for the three and nine months ended ~~March 31,~~September 30, 2008 and 2007, respectively.

Intangible Assets

Intangible assets consist of licensing agreements of ~~$711,125~~$1,245,543 and patents of $40,706, and are carried at cost less accumulated amortization of ~~$361,751.~~$508,960. Amortization is computed using the straight-line method over the economic life of the assets, which range between 3 and 12 years. For the three and nine months ended ~~March 31,~~September 30, 2008 and 2007, the Company recognized amortization expense of approximately ~~$37,219~~$94,778 and ~~$18,959,~~$184,966, and $47,083 and $104,055, respectively, related to intangible assets.

Annual amortization of intangible assets remaining at ~~March 31,~~September 30, 2008, is as follows:

Year Ended December 31,
2008	$	131,975		382,916
2009		171,165		326,020
2010		81,565		67,103
2011		4,750		1,250
2012 and after		625		--
Total	$	390,080	$	777,289

Revenue and Cost Recognition

The Company recognizes revenue from the sale of software products under the provisions of SOP 97-2, Software Revenue Recognition, as amended by SOP 98-4 and SOP 98-9. SOP 97-2 generally requires that revenue recognized from software arrangements be allocated to each element of the arrangement based on the relative vendor specific objective evidence of fair values of the elements, such as software products, upgrades, enhancements, post contract customer support, installation or training. Under SOP 97-2, if the determination of vendor specific objective evidence of fair value for each element of the arrangement does not exist, all revenue from the arrangement is deferred until such time that evidence does exist or until all elements of the arrangement are delivered.

SOP 97-2 was amended in December 1998 by SOP 98-9, Modification of SOP 97-2 Software Revenue Recognition with Respect to Certain Transactions. SOP 98-9 clarified what constitutes vendor specific objective evidence of fair value and introduced the concept of the “residual method” for allocating revenue to elements in a multiple element arrangement.

The Company’s revenue recognition policy is as follows:

Project revenue consists of programming ~~and demonstration~~ services provided to unrelated parties under fixed-price contracts. Revenues from fixed price programming contracts are recognized in accordance with SOP 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts, and Accounting Research Bulletin (ARB) 45, Long-Term Construction-Type Contracts, using the percentage-of-completion method, measured by the percentage of costs incurred to date compared with the total estimated costs for each contract. The Company accounts for these measurements in the accompanying balance sheets under costs and estimated earnings in excess of billings on contracts, and billings in excess of costs and estimated earnings on contracts. Provisions for estimated losses on uncompleted contracts are made and recorded in the period in which the loss is identified. As of ~~March 31,~~September 30, 2008 the Company did not have any costs and estimated earnings in excess of billings on contracts or any

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billings in excess of costs and estimated earnings on contracts. All contracts were 100% complete as of ~~March 31,~~September 30, 2008.

Revenue from product sales relates to the sale of the Falcon haptics interface, which is a human-computer user interface (the “Falcon”) 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 the 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.

As of ~~March 31,~~September 30, 2008, the Company had recorded ~~$41,693~~$29,390 of deferred revenue, which represents fees received for product and project revenues that have not met all revenue recognition requirements.

Emerging Issues Task Force (EITF) 00-10, Accounting for Shipping and Handling Fees and Costs, require amounts billed to a customer in a sales transaction related to shipping and handling, if any, to be classified and accounted for as revenues earned for the goods provided whereas shipping and handling costs incurred by a company are required to be classified as cost of sales. The Company’s costs associated with shipping product items to the Company’s customers are included in the Company’s Cost of Goods Sold, which for the three and nine months ended ~~March 31,~~September 30, 2008 and 2007 approximated ~~$8,140~~$2,531 and ~~$0,~~$27,436, and $16,645 and $21,044, respectively.

Arrangements made with certain customers, including slotting fees and co-operative advertising, are accounted for in accordance with EITF No. 01-9, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor's Products). These incentives are recognized as a reduction in revenue or as a selling, general, and administrative expense, respectively, when payment is made to a customer (or at the time the Company has incurred the obligation, if earlier) unless the Company receives a benefit over a period of time and the Company meets certain other criteria, such as retailer performance, recoverability and enforceability, in which case the incentive is recorded as an asset and is amortized as a reduction of revenue over the term of the arrangement.

EITF 01-14, Income Statement Characterization of Reimbursements Received for “Out-of-Pocket” Expenses Incurred, requires reimbursements received for out-of-pocket expenses incurred while providing services to be characterized in the statements of operations as revenue. The Company’s out-of-pocket expenses incurred in connection with their project revenues are recognized in revenues based on a computed overhead rate that is included in their project labor costs to derive a project price.

In accordance with EITF 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent, the Company recognizes its product sales on a gross basis. The Company is responsible for fulfillment, including the acceptability of the product ordered. The Company has risks and rewards of ownership such as the risk of loss for collection, delivery or returns. Title passes to the customer upon receipt of the product by the customer. In accordance with the Company’s agreement with its customer, further obligation is limited to the terms defined in its warranty.

The Company’s customers are provided a one (1) year limited warranty on the Falcon. This warranty guarantees that the products shall be free from defects in material and workmanship. Additionally, the Company offers its customers of the Falcon a 30 day money back guarantee. The Company continually evaluates its reserve accounts for both the limited warranty and 30 day money back guarantee based on its historical activities. As of ~~March 31,~~September 30, 2008, the Company has ~~recorded $8,190~~accrued $11,800 as warranty ~~and money back guarantee reserves.~~reserve.

Loss per Common Share

Statement of Financial Accounting Standards No. 128, Earnings ~~per~~Per Share, (SFAS 128) provides for the calculation of “Basic” and “Diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net ~~income (loss)~~loss available to common shareholders by the weighted average number of common shares outstanding for the period. All potentially dilutive securities have been excluded from the computations since they would be antidilutive. However, these dilutive securities could potentially dilute earnings per share in the future. As of ~~March 31,~~September 30, 2008 and 2007, the Company had a total of ~~14,270,736~~12,736,867 and ~~26,245,724~~27,322,342 in potentially dilutive securities, respectively.

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~~Stock-Based Compensation~~Stock Option Plans

The Company adopted SFAS No. 123 (Revised 2004), Share Based Payment (“SFAS No. 123R”), under the modified-prospective transition method on January 1, 2006. SFAS No. 123R requires companies to measure and recognize the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value. Share-based compensation recognized under the modified-prospective transition method of SFAS No. 123R includes share-based compensation based on the grant-date fair value determined in accordance with the original provisions of SFAS No. 123, Accounting for Stock-Based Compensation, for all share-based payments granted prior to and not yet vested as of January 1, 2006 and share-based compensation based on the grant-date fair-value determined in accordance with SFAS No. 123R for all share-based payments granted after January 1, 2006.

The Company recognized ~~$122,139~~$353,033 and ~~$393,113~~$303,878 in employee share-based compensation expense for the ~~three~~nine months ended ~~March 31,~~September 30, 2008 and 2007, respectively. The fair value of the stock options was estimated using the Black-Scholes option pricing model. In calculating the fair value of options for stock based compensation for the ~~three~~nine months ended ~~March 31,~~September 30, 2008, the following assumptions were used: closing price of the common stock at the date of grant, risk-free rates ranged from ~~5.00%~~4.00% to 5.25%, volatility of the options ranged from 73% to 157%, estimated lives of 3 to 10 years and exercise prices ranged from $0.66 to $1.20 per share.

Research and Development

Research and development costs are expensed as incurred and amounted to ~~$313,526~~$323,649 and ~~$235,570~~$918,580, and $290,932 and $913,573 for the three and nine months ended ~~March 31,~~September 30, 2008 and 2007, respectively.

Recently Issued Accounting Pronouncements

The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective is not anticipated to have a material effect on the financial position or results of operations of the Company.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133” (“SFAS No. 161”). SFAS No. 161 amends and expands the disclosure requirements of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”). The objective of SFAS No. 161 is to provide users of financial statements with an enhanced understanding of how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations, and how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS No. 161 applies to all derivative financial instruments, including bifurcated derivative instruments (and nonderivative instruments that are designed and qualify as hedging instruments pursuant to paragraphs 37 and 42 of SFAS No. 133) and related hedged items accounted for under SFAS No. 133 and its related interpretations. SFAS No. 161 also amends certain provisions of SFAS No. 131. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. SFAS No. 161 encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The Company has not yet determined the effect on its consolidated financial statements, if any, upon adoption of SFAS No. 161.

NOTE 3 — INTANGIBLE ASSETS

Intangible assets consisted of the following at ~~March 31,~~September 30, 2008:


Licensing agreements	$	711,125		$	1,245,543
Patent		40,706			40,706
Less accumulated amortization		(361,751	)		(508,960	)
	$	390,080		$	777,289

NOTE 4- CONVERTIBLE NOTES PAYABLE

OnIn March ~~31,~~ 2008, the Company closed on a $2,025,000 private placement of debt securities under Regulation D promulgated under the Securities Act of 1933 pursuant to the terms of a subscription agreement among the Company and the subscribers’ signatory thereto (the "Subscription Agreement"). InFrom April 2008 through June 2008, the Company closed an additional ~~$1,725,000~~$3,210,097 for an aggregate Subscription Agreement amount of ~~$3,750,000 as discussed in Note 9 for additional discussion.~~$5,235,097. Each Subscriber acquired an unsecured convertible note in the principal amount invested and a warrant to purchase shares of the Company’s common stock with an exercise price of $1.00 per share. In each case, the number of shares of common stock underlying the warrant equals the principal amount of the unsecured convertible note. Each warrant is exercisable for a term of five (5) years. The unsecured convertible notes have a three (3) year maturity, require payment of principal and interest in full on the maturity date, and accrue interest at a rate of seven percent (7%) beginning on the first anniversary of their respective dates of issuance. At the option of the holder, principal outstanding under a note may be converted into common stock at the conversion rate then in effect, initially $1.00 per share. Upon conversion, the holder will receive common stock at the conversion price of $1.00 per share and additional warrants to purchase shares of common stock at an exercise price of $1.50 per share. The number of shares of common stock underlying the additional warrants shall equal one-half (1/2) the principal and interest amounts converted. The additional warrants shall be exercisable for a term of five (5) years. Certain existing shareholders of the Company are entitled to purchase notes and warrants under the terms of the Subscription Agreement and the Company was required to create a second offering of these notes and warrants. The Company has recorded ~~$132,678~~$459,073 as deferred financing costs associated with the closing that occurred on ~~March 31,~~June 9, 2008. This amount represents ~~$31,400~~$197,049 accrued for legal expenses associated with the private placement, ~~$60,000~~$149,403 paid to an investment banking company and ~~$41,278~~$112,621 for the value of warrants to purchase ~~60,000~~143,403 shares of the Company’s

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common stock at $1.00 per share for 5 years owed to the same investment banking company. These amounts ~~will be~~are being amortized to interest expense over the term of the notes.

The Company has determined the convertible debenture contains a beneficial conversion feature and qualifies for treatment under Emerging Issues Task Force No. ~~00-27.~~00-27 and 00-19. The estimated fair value of the detachable warrants of ~~$1,398,766~~$4,462,663 has been determined using Black-Scholes option pricing model using the following assumptions: stock price volatility of 124% to 125%, risk free interest rate of 3.77%; dividend yield of 0% and 3 year term. The face amount of the convertible debenture of ~~$2,025,000~~$5,235,097 was proportionately allocated to the debenture and the warrants in the amount of ~~$1,197,694~~$2,849,425 and ~~$827,306,~~$2,385,672, respectively. The convertible ~~debenture's~~debentures’ proportionate allocated value of ~~$1,197,694~~$2,849,425 was then further allocated between the debenture and the beneficial conversion feature, and the entire remaining value of ~~$1,197,694~~$2,849,425 was allocated to the beneficial conversion feature. The combined total value of the warrant and beneficial conversion feature of ~~$2,025,000~~$5,235,097 has been accounted for as a debt discount that is being amortized and treated as interest expense over the term of the convertible debenture under the effective interest method. For the three and nine months ended September 30, 2008, the Company debt discount amortization expense totaled $431,264 and $867,087, respectively. The remaining unamortized debt discount at September 30, 2008 totaled $4,368,010.

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.

The Company has licensing agreements with various parties providing gaming software. These licensing agreements have royalty provisions which require royalty fees ranging from 5% to 50% of either gross revenue or net revenue and one licensing agreement has a royalty provision of $0.50 per end user. Royalty fees paid or accrued for the nine months ended September 30, 2008 and 2007 related to these licensing agreements approximated $1,709,880 and $172,000, respectively, of which $1,959,426 remains as prepaid expenses as of September 30, 2008. Based upon reaching certain milestones, the Company may be required to pay additional amounts.

NOTE 6 — STOCKHOLDERS’ EQUITY

Sale of Common Stock and Warrant

During January 2007, the Company sold 500,000 shares of common stock and warrants for 500,000 shares of common stock to 8 investors for a total of $500,000. The warrants have an exercise price of $1.00 per share and life of five years.

Unit Subscription Agreement

On March 5, 2007, the Company entered into a Unit Subscription Agreement (the “Agreement”) with 42 accredited investors (the “Purchasers”) pursuant to which the Company issued and sold $9,000,000 of Units, at a price of one dollar per Unit. Each Unit consists of one share of common stock, and one five-year warrant to purchase one share of common stock at an exercise price of $1.50. Accordingly, an aggregate of 9,000,000 shares of its common stock, and warrants to purchase 9,000,000 shares of common stock were issued (the “Financing”). The Financing closed on March 5, 2007. Under the terms of the Unit Subscription Agreement the Company may sell an additional 1,000,000 Units for $1,000,000 to a strategic investor, of which the Company closed on the sale of 580,000 units for $580,000 on May 11, 2007. Gross proceeds from the Financing to the Company were $9,000,000, of which $320,010 was paid to certain individuals who served as placement agents for the transaction and approximately $50,000 was paid to counsel for the Purchasers in connection with the transaction. In addition, the Company had netted a previously capitalized deferred offering cost totaling $54,354 towards the gross proceeds from the Financing. The Company granted warrants to purchase 320,000 shares of common stock with an exercise price of $1.50 to certain individuals who served as placement agents in the financing and options to purchase 173,419 shares of common stock with an exercise price of $1.00 to AF Double Eagle upon the closing of the Financing. These warrants and options have been accounted for as related offering costs. Mr. Tom Anderson, the Company’s Chief Executive Officer, invested $25,000 in the Financing.

As part of the terms of the Agreement, the Company entered into an Investor Rights Agreement among the Purchasers pursuant to which the Company has agreed to file a registration statement to register for resale of the shares of common stock sold in the Financing, including the shares of common stock underlying the warrants, within 55 days following the closing of the Financing. Subject to certain exceptions, in the event the registration statement is not filed within such 55 day period or does not become effective within certain time periods set forth in the Investor Rights Agreement, the Company would be required to pay each purchaser in the Financing an amount in cash equal to 0.0333% of the sum of (i) the purchase amount paid by the Purchaser and (ii) the amount paid upon exercise of the warrants for each day the filing or effectiveness of the registration statement is delayed and, pursuant to the terms of the warrants, the Purchasers would be entitled to exercise their warrants pursuant to a cashless

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exercise formula. In addition, the Company has agreed not to grant any registration rights that are senior to the registration rights of the Purchasers for a period of two years from the closing date without the prior written consent of a majority of the Purchasers. The Company filed a Form SB-2 registration statement as required by the Agreement on May 24, 2007 and it became effective on June 19, 2007 within the required timeline of the Agreement.

NOTE 7 — RELATED PARTIES

On February 18, 2004, the Company granted to a significant shareholder, for future services, 125,000 options to purchase common stock at an exercise price of $0.66 per share. The options have a 5-year annual vesting provision. Options granted to consultants are valued each reporting period to determine the amount to be recorded as consultant expense in the respective period. As the options vest, they will be valued one last time on the vesting date and an adjustment will be recorded for the difference between the value already recorded and the current value on date of vesting. At ~~March 31,~~September 30, 2008, the Company calculated the value of the options using the Black-Scholes model based on the following assumptions: a risk-free rate of ~~5.00%~~4.00%, volatility of ~~124%~~115%, estimated life of 10 years and a fair market value of ~~$0.99~~$0.70 per share. At March 31, 2004, the Company calculated the initial value of the options using the Black-Scholes model based on the following assumptions: a risk-free rate of 4.05%, volatility of 91%, estimated life of 10 years and a fair market value of $1.00 per share. The vesting schedule is prorated over the reporting period, and ~~$4,890~~$12,210 and ~~$13,809,~~$12,148, respectively, was recorded as consultant expense during the ~~three~~nine months ended ~~March 31,~~September 30, 2008 and 2007.

In March 2004, Normandie New Mexico Corporation, which is owned by the former Chief Executive Officer (CEO) of Manhattan Scientific (a significant shareholder) who is also a member of the Company’s Board of Directors, entered into an agreement with the Company to provide consulting services in relation to business development and marketing support. Fees per the agreement are $6,250 per month. For the ~~three~~nine months ended ~~March 31,~~September, 2008 and 2007, the Company had paid ~~$25,000~~$50,000 and ~~$-0-,~~$121,875, respectively, for these services. As of ~~March 31,~~September 30, 2008, ~~and 2007,~~ the Company owed ~~$-0- and $90,625~~$6,250 to Normandie New Mexico under the agreement.

On June 10, 2004, the Company granted 250,000 options to purchase common stock to one of the member of the Company’s Board of Directors for future consulting services at an exercise price of $0.66 per share. The options have a 5-year annual vesting provision. At June 30, 2004, the Company calculated the initial value of these options using the Black-Scholes model based on the following assumptions: a risk-free rate of 4.81%, volatility of 100%, estimated life of 10 years and a fair market value of $1.00 per share. At ~~March 31,~~September 30, 2008, the Company calculated the value of the options using the Black-Scholes model based on the following assumptions: a risk-free rate of ~~5.00%~~4.00%, volatility of ~~124%~~117%, estimated life of 10 years and a fair market value of ~~$0.99~~$0.70 per share. The vesting schedule is prorated over the reporting period, and approximately ~~$14,000~~$33,699 and ~~$26,000,~~$58,598, respectively, was recorded as consulting expense during the ~~three~~nine months ended ~~March 31,~~September 30, 2008 and 2007.

One of the members of the Company’s Board of Directors provided legal services to Company. Total legal expense incurred by the Company for such legal services by this director totaled ~~$32,829~~$120,250 and ~~$22,086~~$106,560 for the ~~quarters~~nine months ended ~~March 31,~~September 30, 2008 and 2007, respectively. At the beginning of 2008, the Company granted this board member options to purchase 100,000 shares of common stock with an exercise price of $.89 per share for service performed and to be performed in relation to the Company’s patents. As of ~~March 31,~~September 30, 2008, ~~5,667~~6,709 options had vested and the Company recorded ~~$3,840~~$7,089 in expense related to these vested options.

~~NOTE 8 - COMMITMENTS AND CONTINGENCIES~~

The Company has licensing agreements with various parties providing gaming software. These licensing agreements have royalty provisions which require royalty fees ranging from 5% to 50% of either gross revenue or net revenue and one licensing agreement has a royalty provision of $0.50 per end user. Royalty fees paid or accrued for the three months ended March 31, 2008 and 2007 related to these licensing agreements approximated $984,507 and $0, respectively, of which $1,256,769 remains as prepaid expenses as of March 31, 2007.

~~NOTE 9 - SUBSEQUENT EVENTS~~

~~As discussed in Note 4, the Company closed an additional $1,725,000 of debt securities for an aggregate total of $3,750,000.~~

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In May 2008, the Company closed on a $703,280 private placement of debt securities under Regulation D promulgated under the Securities Act of 1933 pursuant to the terms of a subscription agreement among the Company and the subscribers signatory thereto. Each Subscriber acquired an unsecured convertible note in the principal amount invested and a warrant to purchase shares of the Company’s common stock with an exercise price of $1.00 per share. In each case, the number of shares of common stock underlying the warrant equals the principal amount of the unsecured convertible note. Each warrant is exercisable for a term of five (5) years. The unsecured convertible notes have a three (3) year maturity, require payment of principal and interest in full on the maturity date, and accrue interest at a rate of seven percent (7%) beginning on the first anniversary of their respective dates of issuance. At the option of the holder, principal outstanding under a note may be converted into common stock at the conversion rate then in effect, initially $1.00 per share. Upon conversion, the holder will receive common stock at the conversion price of $1.00 per share and additional warrants to purchase shares of common stock at an exercise price of $1.50 per share. The number of shares of common stock underlying the additional warrants shall equal one-half (1/2) the principal and interest amounts converted. The additional warrants shall be exercisable for a term of five (5) years. In connection with this private placement, the Company notified investors who had participated in a prior offering of their right to participate in this private placement on the same terms and conditions as the Purchasers. These investors may participate in this private placement by providing written notice to the Company by May 15, 2008 of their intent to participate. As of the date of this Report, one of these investors has provided such notice to the Company.

Subsequent to March 31, 2008, the Company issued 30,000 shares of common stock for payment of $30,000 in royalties, granted 1,000 options to an employee and granted 5,000 fully vested warrants to a consultant.

Forward Looking Statements

Certain statements in the Management’s Discussion and Analysis (“MD&A”), other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the section under “Risk Factors”. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

As used in this Form 10-Q, unless the context requires otherwise, “we” or “us” or the “Company” or “Novint” means Novint Technologies, Inc.

~~ITEM 6.~~ ~~MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION~~

Statements included in this management’s discussion and analysis of financial condition and results of operations, and in future filings by the Company with the SEC, in the Company’s press releases and in oral statements made with the approval of an authorized executive officer which are not historical or current facts are “forward-looking statements” and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. You are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect the Company’s actual results and could cause the Company’s actual financial performance to differ materially from that expressed in any forward-looking statement: (i) the extremely competitive conditions that currently exist in the market for companies similar to the Company and (ii) lack of resources to maintain the Company’s good standing status and requisite filings with the SEC. The foregoing list should not be construed as exhaustive and the Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. The following discussion should be read in conjunction with our financial statements and their explanatory notes included as part of this annual report.

OVERVIEW

We were initially incorporated in the State of New Mexico as Novint Technologies, Inc. in April 1999. On February 26, 2002, we changed our state of incorporation to Delaware by merging into Novint Technologies, Inc., a Delaware corporation. We have no subsidiaries and operate our business under Novint Technologies, Inc. We are a haptics technology company (haptics refers to your sense of touch). We develop, market and sell applications and technologies that allow people to use their sense of touch to interact with computers.

We have derived revenues from 3D touch hardware sales, 3D touch software sales, and the development of professional applications for our customers. We launched our Falcon product in June 2007, and are selling it in our on-line store and in a number of retailers and other websites. We launched an on-line game store in November 2007. We also have completed a number of professional application contracts with customers who desire custom developed software.

Novint focuses the majority of its efforts to exploit opportunities in the consumer console and PC interactive games market. Using our haptics technology, games and applications will have the crucial missing “third sense”, touch, to human computer interaction. Users will be able to directly and intuitively feel the shape, texture, and physical properties of virtual objects using our computer touch software. Our haptic technology and related hardware for consumers is now the primary focus of our operations whereas in the past it had been professional applications. We will devote a majority of our resources to further developing this market and seeking new business relationships with video game developers and publishers and hardware manufacturers. We began selling our haptic product, the Novint Falcon, in June 2007 through our website at www.novint.com. We currently are selling one haptic hardware product which is a haptic game controller device called the Novint Falcon marketed in a bundled package which includes several games. We launched an on-line game store in late 2007, where consumers can purchase and download a variety of game titles. Although our sales of the Novint Falcon and games since product launch have been limited, we anticipate sales of the Novint Falcon and games to increase resulting from increased sales and distributions to retailers and release of new software and games in 2008. One of the most significant drivers of revenue for Novint will be games and content. This is true not only in the revenue we get from the games themselves, but largely because this is a criterion we see many of our customers desiring in order to justify the Falcon hardware purchase. For example, if the Novint Falcon has many games available to play on it, a customer can purchase a single piece of hardware and then over time purchase multiple games that give a unique gaming experience, making the initial hardware purchase valuable over a larger amount of time and across a larger number of games. Given our recent licensing deals with Valve, Electronic Arts, and Codemasters, and therefore dozens of AAA level games that will be supported by the Falcon, we believe these new licensed games, when released, will drive additional revenue that we have not seen before the AAA games were released.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

High-quality financial statements require rigorous application of accounting policies. Our policies are discussed in our financial statements for the quarter ended ~~March 31,~~September 30, 2008 and are considered by management to be critical for an understanding of our financial statements because their application places

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the most significant demands on management’s judgment, with financial reporting results relying on estimation about the effect of matters that are inherently uncertain. We review the accounting policies we use in reporting our financial results on a regular basis. As part of such review, we assess how changes in our business processes and products may affect how we account for transactions. We have not changed our critical accounting policies or practices during 2008. New accounting policies and ~~practice~~practices were implemented in 2007 as necessary based on the launch of our haptics product sales in June 2007.

REVENUE AND COST RECOGNITION — We recognize revenue from the sale of software products under the provisions of Statement of Position (“SOP”) 97-2, Software Revenue Recognition, as amended by SOP 98-4 and SOP 98-9. SOP 97-2 generally requires that revenue recognized from software arrangements be allocated to each element of the arrangement based on the relative vendor specific objective evidence of fair values of the elements, such as software products, upgrades, enhancements, post contract customer support, installation, or training. Under SOP 97-2, if the determination of vendor specific objective evidence of fair value for each element of the arrangement does not exist, all revenue from the arrangement is deferred until such time that evidence does exist or until all elements of the arrangement are delivered.

Our revenue recognition policy is as follows:

Project revenue consists of programming services provided to unrelated parties under fixed-price contracts. Revenues from fixed price programming contracts are recognized in accordance with SOP 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts, and Accounting Research Bulletin 45, Long-Term Construction-Type Contracts, using the percentage-of-completion method, measured by the percentage of costs incurred to date compared with the total estimated costs for each contract. The Company accounts for these measurements in the accompanying balance sheets under costs and estimated earnings in excess of billings on contracts, and billings in excess of costs and estimated earnings on contracts. Provisions for estimated losses on uncompleted contracts are made and recorded in the period in which the loss is identified. As of ~~March 31,~~September 30, 2008, the Company did not have any costs and estimated earnings in excess of billings on contracts, and no billings in excess of costs and estimated earnings on contracts. All contracts were 100% complete as of ~~March 31,~~September 30, 2008.

Revenue from product sales relates to the sale of the Falcon haptics interface, which is a human-computer user interface (the “Falcon”). and related accessories. The Falcon allows the user to experience ~~sensory information~~the sense of touch when using a computer, ~~and~~while holding its ~~handle and is the approximate size and shape of a racquetball.~~interchangeable handle. The Falcons are manufactured by an unrelated party. Revenue from the product sales ~~are~~is recognized when the products are shipped to the customer and ~~thereby have~~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.

As of ~~March 31,~~September 30, 2008, the Company had recorded ~~$41,693~~$29,390 of deferred ~~revenue.~~revenue, which represents fees received for product and project revenues that have not met all revenue recognition requirements.

Emerging Issues Task Force ~~(“EITF”)~~(EITF) 00-10, Accounting for Shipping and Handling Fees and Costs, ~~requires~~require amounts billed to a customer in a sales transaction related to shipping and handling, if any, to be classified and accounted for as revenues earned for the goods provided whereas shipping and handling costs incurred by a company are required to be classified as cost of sales. The Company’s costs associated with shipping product items to the Company’s customers are included in the Company’s Cost of Goods Sold, which for the ~~quarters~~three and nine months ended ~~March 31,~~September 30, 2008 and 2007 approximated ~~$8,140~~$2,531 and ~~$-0-,~~$27,436, and $16,645 and $21,044, respectively.

Arrangements made with certain customers, including slotting fees and co-operative advertising, are accounted for in accordance with EITF No. 01-9, Accounting for Consideration Given by a Vendor to a

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Customer (Including a Reseller of the Vendor's Products). These incentives are recognized as a reduction in revenue or as a selling, general, and administrative expense, respectively, when payment is made to a customer (or at the time the Company has incurred the obligation, if earlier) unless the Company receives a benefit over a period of time and the Company meets certain other criteria, such as retailer performance, recoverability and enforceability, in which case the incentive is recorded as an asset and is amortized as a reduction of revenue over the term of the arrangement.

The Company’s customers are provided a one (1) year limited warranty on the ~~Falcon haptics interface product.~~Falcon. This warranty guarantees that the products shall be free from defects in material and workmanship. Additionally, the Company offers its customers of the Falcon a 30 day money back guarantee. The Company continually evaluates its reserve accounts for both the limited warranty and 30 day money back guarantee based on its historical activities. As of ~~March 31,~~September 30, 2008, the Company has accrued ~~$8,190~~$11,800 as warranty ~~and money back guarantee~~ reserve.

IMPAIRMENT — In accordance with Statement of Financial Accounting (“SFAS”) 144, Accounting for the Impairment or Disposal of Long-Lived Assets, we review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

SOFTWARE DEVELOPMENT COSTS — We account for our software development costs in accordance with SFAS 86, Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed. This statement requires that, once technological feasibility of a developing product has been established, all subsequent costs incurred in developing that product to a commercially acceptable level be capitalized and amortized ratably over the estimated life of the product, which is 5 years. We have capitalized software development costs in connection with our haptic software beginning in 2000. Amortization is computed on the straight-line basis over the estimated life (5 years) of the haptics technology.

STOCK BASED COMPENSATION - We account for stock based compensation in accordance with SFAS 123(R), Share-Based Payment, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors, including employee stock options and employee stock purchases, related to a Employee Stock Purchase Plan based on the estimated fair values. We have used stock option awards in the past and continue to use them as a means of rewarding our employees and directors for their continued commitment and efforts in helping us execute our overall business plans.

Additionally, the Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective is not anticipated to have a material effect on the financial position or results of operations of the Company.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities - ~~16 -~~an amendment of FASB Statement No. 133” (“SFAS No. 161”). SFAS No. 161 amends and expands the disclosure requirements of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”). The objective of SFAS No. 161 is to provide users of financial statements with an enhanced understanding of how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations, and how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS No. 161 applies to all derivative financial instruments, including bifurcated derivative instruments (and nonderivative instruments that are designed and qualify as hedging instruments pursuant to paragraphs 37 and 42 of SFAS No. 133) and related hedged items accounted for under SFAS No. 133 and its related interpretations. SFAS No. 161 also amends certain provisions of SFAS No. 131. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. SFAS No. 161 encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The Company has not yet determined the effect on its consolidated financial statements, if any, upon adoption of SFAS No. 161.

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RESULTS OF OPERATIONS

THREE MONTHS ENDED ~~MARCH 31,~~SEPTEMBER 30, 2008 COMPARED TO THE THREE MONTHS ENDED ~~MARCH 31,~~SEPTEMBER 30, 2007.

REVENUES. During the quarter ended ~~March 31,~~September 30, 2008, we had revenues of ~~$71,829~~$76,149 as compared to revenues of ~~$128,731~~$87,677 during the quarter ended ~~March 31,~~September 30, 2007, a decrease of approximately ~~44%~~13%. We launched our Falcon product in June 2007, and launched the on-line game store in November 2007. In September 2007, we launched our pistol grip for the ~~first quarter~~Falcon. We had reservations for 600 pistol grips at the announcement of ~~2007,~~the launch, and shipped approximately 100 units in the last two weeks of the quarter. Prior to the launch of our Falcon and the games, all of our revenues were derived from the development of professional ~~applications; however in~~applications. In 2008 our revenues were mainly derived from consumer products, which is a much different focus. ~~Given that the revenues were from different types of business activities, a comparison between them has limited meaning.~~

~~During 2006, we redirected much of our attention in the development and completion of our haptics technology and hardware platforms for consumers.~~ Our ~~haptics game controller device was launched in June 2007, and our on-line game store was launched in November 2007. As a result, our~~ revenues in the ~~first~~ quarter ofended September 30, 2008 were derived from both ~~projects and~~the sales of our haptics ~~products.~~products and projects. During the quarter ended ~~March 31,~~September 30, 2008, ~~our~~we had revenues ~~were derived~~ from ~~the refurbishment of hardware and development and demonstration of professional applications for customers totaling $27,579, and~~ the sale of our haptics technology products ~~totaling $44,250.~~of $71,649, as compared to revenues of $81,785 during the quarter ended September 30, 2007, a decrease of approximately 12%. During the quarter ended September 30, 2008, we had revenues from projects of $4,500, as compared to revenues of $5,892 during the quarter ended September 30, 2007, a decrease of approximately 24%, as the company shifts its focus to consumer products. We will continue to provide development of professional applications in future ~~years.~~years, but the primary focus remains on revenues derived from consumer products.

RESEARCH AND DEVELOPMENT EXPENSES. Research and development totaled $323,649 for the quarter ended September 30, 2008 compared to $290,932 for the quarter ended September 30, 2007, an increase of $32,717 or 11%. Our research and development for 2008 increased as we continue to develop new software associated with the haptics technology product, as well as specialized grips for use with the product.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses totaled $1,214,010 for the quarter ended September 30, 2008, compared to $1,160,109 for the quarter ended September 30, 2007, an increase of $53,901 or 5%. The increase in general and administrative expenses compared to the prior year was primarily related to the addition of infrastructure to support the business that launched in June 2007. Business and professional fees decreased approximately $115,000, royalty expense decreased approximately $23,000 as first-year minimums on license agreements were being reached, and payroll and other overhead expenses increased approximately $191,000 as new employees, insurance, office space, warehousing, and other expenses were added to support the business. We anticipate such expenses to stabilize as we continue to market and promote the product.

DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and amortization expense totaled $161,416 for the quarter ended September 30, 2008 compared to $93,879 for the quarter ended September 30, 2007, an increase of $67,537 or 72%. This has increased as we have increased our investment in fixed assets, intangibles, and capitalized software.

SALES AND MARKETING EXPENSE. Sales and marketing expense totaled $152,479 for the quarter ended September 30, 2008 compared to $452,148 for the quarter ended September 30, 2007, a decrease of $299,669 or 66%. In 2007, we had programs focused on the launch of the Falcon, which occurred in September 2007, and in 2008 expenses continued for website development, trade show expenses and an “Evangelist Program” to encourage early adopters to tell others about the product. Promotional efforts will continue in 2008 with print advertising, trade shows, branding, and promotion through the website.

LOSS FROM OPERATIONS: We had a loss from operations of $1,859,815 for the quarter ended September 30, 2008, compared to a loss from operations of $1,999,856 for the quarter ended September 30, 2007. Our net losses have decreased slightly as a result the changes in our operating expenses as described above.

NET LOSS. We had a net loss of $2,335,438, or $0.07 per share, for the quarter ended September 30, 2008, compared to $1,917,810, or $0.06 per share, for the quarter ended September 30, 2007. There was an increase in the net loss of $417,628, which is a result of an decrease in the loss from operations of approximately $140,000, a decrease in interest income of approximately $84,000, and an increase in interest expense and debt discount related to convertible debt of approximately $474,000.

NINE MONTHS ENDED SEPTEMBER 30, 2008 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2007.

REVENUES. During the nine months ended September 30, 2008, we had revenues of $232,077 as compared to revenues of $282,071 during the nine months ended September 30, 2007, a decrease of approximately 18%. We launched our Falcon product in June 2007, and launched the on-line game store in November 2007. Prior to this launch, all of our revenues were derived from the development of professional applications. In 2008 our revenues were mainly derived from consumer products, which is a much different focus.

Our revenues in the nine months ended September 30, 2008 were derived from both the sales of our haptics products and projects. During the nine months ended September 30, 2008, we had revenues from the sale of our haptics technology products of $181,848, as compared to revenues of $117,275 during the nine months ended September 30, 2007, an increase of approximately 55%. During the nine months ended September 30, 2008, we had revenues from projects of $50,229, as compared to revenues of $164,796 during the nine months ended September 30, 2007, a decrease of approximately 70%. We will continue to provide development of professional applications in future years, but the primary focus remains on revenues derived from consumer products.

COST OF GOODS SOLD AND GROSS PROFIT (LOSS). Cost of goods sold for our haptics technology products includes the cost of the haptics technology products sold and the costs associated with shipping product to customers. The cost of goods sold for our development of professional applications includes materials purchased for resale to customers and the direct labor incurred for delivering on projects. Costs of goods sold were ~~$80,070~~$247,690 for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2008, compared to ~~$107,481~~$255,645 for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2007. ~~In the first quarter of 2007, our revenues were only derived from development of professional applications, and in June 2007 we launched the sales of our haptics technology products.~~ Our overall gross loss percentage was approximately ~~(11)~~ (7)% for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2008, which is a result of our gross profit from our development of professional applications approximately 26%, and gross loss from the sale of our haptics technology product approximated (16) %, compared to a gross profit percentage of 9% for the nine months ended September 30, 2007, which is a result of our gross profit from our development of professional applications approximately 23%, and gross loss from the sale of our haptics technology product approximated ~~(33) %, compared to a gross profit percentage of 17% for the quarter ended March 31, 2007, which consisted only of gross profit from our development of professional applications.~~(10) %. Our gross profit from the development of professional applications has remained consistent from year to year. Our gross loss experienced from the sale of our haptics technology product ~~was~~continues to be impacted by efforts to drive market penetration—freight costs to meet the demands of product distribution, costs to place product into major retail chains, third-party warehousing costs, and lower pricing for retailer and ~~distributors. Many~~distributors; however, we have begun to see improvement in many of these costs ~~will be improved~~ as our processes are worked out.

RESEARCH AND DEVELOPMENT EXPENSES. Research and development totaled ~~$313,526~~$918,580 for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2008 compared to ~~$235,570~~$913,573 for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2007, ana increase of ~~$77,956~~$5,007 or ~~33%~~1%. Our research and development for 2008 increased slightly as we continue to develop new software associated with the haptics technology product, as well as specialized grips for use with the product.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses totaled ~~$1,328,201~~$3,839,384 for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2008, compared to ~~$1,495,206~~$3,730,676 for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2007, ~~a decrease~~an increase of ~~$167,005~~$108,708 or ~~11%~~3%. The ~~decrease~~increase in general and administrative expenses compared to the prior year was primarily related to the ~~stabilization~~addition of infrastructure to support the business ~~following the launch of the product~~that launched in June ~~2007.~~2007, offset by the reduction in business and professional fees. Business and professional fees decreased approximately ~~$522,000,~~$779,000, royalty expense increased approximately $13,000, and payroll and other overhead expenses increased approximately ~~$355,000~~$875,000 as new employees, insurance, office space, warehousing, and other expenses were added to ~~expand~~support the business. We anticipate such expenses to stabilize as we continue to ~~slightly increase, only as we add~~market and promote the ~~necessary organization for the business.~~product.

DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and amortization expense totaled ~~$99,147~~$379,606 for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2008 compared to ~~$41,188~~$202,996 for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2007, an increase of ~~$57,959~~$176,610 or ~~141%~~87%. This has increased as we have increased our investment in fixed assets, intangibles, and capitalized software.

SALES AND MARKETING EXPENSE. Sales and marketing expense totaled ~~$131,849~~$378,688 for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2008 compared to ~~$149,436~~$770,197 for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2007, a decrease of ~~$17,587~~$391,509 or ~~12%~~51%. In 2007, we had programs focused on the launch of the Falcon, which occurred in June 2007, and in 2008 expenses continued for website development, trade show expenses and an “Evangelist Program” to encourage early adopters to tell others about the product. Promotional efforts will continue in 2008 with print advertising, trade shows, branding, and promotion through the website.

LOSS FROM OPERATIONS: We had a loss from operations of ~~$1,880,964~~$5,531,871 for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2008, compared to a loss from operations of ~~$1,900,150~~$5,591,016 for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2007. Our net losses have decreased slightly as a result the changes in our operating expenses as described above.

NET LOSS. We had a net loss of ~~$1,867,209,~~$6,458,471, or ~~$0.06~~$0.20 per share, for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2008, compared to ~~$2,016,199,~~$5,545,142, or ~~$0.09~~$0.19 per share, for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2007. There was ~~a decrease~~an increase in the net loss of ~~148,990,~~$913,329, which is a result of a decrease in interest income of approximately $177,000, an increase in other income of approximately $2,000, a net increase in interest expense and debt discount related to convertible debt of approximately $797,000, offset by a decrease in the loss from operations of approximately ~~$20,000, a decrease in interest income of approximately $15,000, and a decrease in interest expense of $143,000.~~$59,000

LIQUIDITY AND CAPITAL RESOURCES

As of ~~March 31,~~September 30, 2008, we had a total cash balance of ~~$1,614,417.~~$575,887. Our cash flow from operating activities for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2008 resulted in a deficit of ~~$2,927,304~~$6,854,742 compared with a deficit of ~~$1,058,534~~$4,856,385 in the same period of the prior year. Our cash flow from investing activities for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2008 resulted in a deficit of ~~$127,646~~$260,834 compared with a deficit of ~~$15,639~~$2,800,423 in the same period of the prior year. Our cash flow from financing activities for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2008 resulted in a surplus of ~~$1,965,000~~$4,987,096 compared to a surplus of ~~$9,187,626~~$10,081,674 in the same period of the prior year. Overall, our cash decreased by ~~$1,089,950~~$2,128,480 during the ~~three~~nine months ended ~~March 31,~~September 30, 2008.

As of ~~March 31,~~September 30, 2008, the Company had total current assets of ~~$3,883,510~~$3,408,802 and total current liabilities of ~~$843,659,~~$1,146,219, resulting in a working capital surplus of ~~$3,039,851.~~$2,262,583. As of ~~March 31,~~September 30, 2008, the Company had cash totaling ~~$1,614,417.~~$575,887. During the ~~three~~nine months ended ~~March 31,~~September 30, 2008, the Company raised approximately ~~$2,025,000~~$5,235,000 from the issuance of convertible notes and warrants through a subscription ~~agreement with a maximum offering amount of $3,750,000. In April 2008 and May 2008, the Company closed an additional $1,725,000 and $703,280, respectively, of debt securities.~~agreement. The Company believes that ~~it has sufficient capital to sustain its operations for twelve months; however,~~ it will require additional working capital in order to fully execute on its business plans with respect to the haptics technology and the further development of the Novint Falcon and related software and accessories.

Disclosure Controls and Procedures

As of the end of the period covered by this quarterly report, we carried out an evaluation, under the supervision of, and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to enable us to record, process, summarize and report information required to be included in our reports that we file or submit under the Exchange Act within the time periods required.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) during the quarter ended ~~March 31,~~September 30, 2008 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our company.

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~~Table of Contents~~

ITEM 1A. RISK FACTORS

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In ~~January~~July 2008, we issued ~~6,664~~3,030 shares of common stock to Ralph Anderson in payment for services rendered on our audit committee. We relied upon the exemption from registration as set forth in Section 4(2) of the Securities Act for the issuance of these shares. The shareholder took the shares for investment purposes without a view to distribution and had access to information concerning Novint and our business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the issuance of the shares. The shareholder was permitted access to our management for the purpose of acquiring investment information. Due to the shareholder’s status on our audit committee and his dealings with companies similar to ours, we deem the shareholder sophisticated for the purposes of Section 4(2) of the Securities Act.

In ~~January~~August 2008, we issued ~~1,000~~135,000 shares of common stock to ~~Karen Rosolowski~~an investor upon his exercise of warrants for cash in ~~payment for services rendered as our outside accountant.~~the amount of $67,500. The recipient of the common stock was an accredited investor within the meaning of Regulation D of the Securities Act. We relied upon the exemption from registration as set forth in Section 4(2) of the Securities Act for the issuance of these ~~shares.~~securities. The shareholder took the ~~shares~~securities for investment purposes without a view to distribution and had access to information concerning Novint and our business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the issuance of the ~~shares.~~securities. The shareholder was permitted access to our management for the purpose of acquiring investment information. Due to the shareholder’s status as ~~our outside accountant~~accredited investors and ~~her~~his dealings with development companies ~~similar to ours,~~generally, we deem the shareholder sophisticated for the purposes of Section 4(2) of the Securities Act.

In September 2008, we issued 20,000 shares of common stock to a consultant for services rendered to the Company. We relied upon the exemption from registration as set forth in Section 4(2) of the Securities Act for the issuance of these securities. The shareholder took the securities for investment purposes without a view to distribution and had access to information concerning Novint and our business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the issuance of the securities. The shareholder was permitted access to our management for the purpose of acquiring investment information. Due to the shareholder’s dealings with development companies generally, we deem the shareholder sophisticated for the purposes of Section 4(2) of the Securities Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

~~None.~~On July 28, 2008, the Company held its Annual Meeting of Stockholders. Of the 31,969,266 shares eligible to vote, 17,290,799 shares, or 54.08%, appeared in person or by proxy and established a quorum for the meeting. The stockholders were voting on the election of directors Thomas G. Anderson, Marvin Maslow and V. Gerald Grafe, and ratification of the appointment of AJ Robbins, P.C. as the Company’s independent registered public accounting firm. The proposals listed in the table below were approved by the stockholders.


	VOTES FOR		VOTES AGAINST		VOTES WITHHELD		NOT VOTED
Election of Directors
Thomas G. Anderson		17,290,799		—		—		—
Marvin Maslow		17,270,434		20,365		—		—
V. Gerald Grafe		17,289,634		1,165		—		—

		VOTES FOR			VOTES AGAINST			VOTES WITHHELD			NOT VOTED
Ratification of appointment of AJ Robbins, P.C. as the Company’s independent registered public accounting firm			17,279,091			1,165			10,543			—

ITEM 5. OTHER INFORMATION

(a)

None.

(b)	There were no changes to the procedures by which security holders may recommend nominees to our board of directors.

ITEM 6. EXHIBITS

EXHIBIT INDEX

Number		Description
3.1 (9)		Amend and Restated Certificate of Incorporation

3.2 (6)		Amended and Restated Bylaws

3.3 (1)		Articles of Merger

3.4 (1)		Certificate of Merger

4.1 (1)		Articles of Incorporation (See Exhibit 3.1)

4.2 (3)		Form of Common Stock Purchase Warrant, April 2006

~~- 19 -~~

~~Table of Contents~~


4.3 (7)		Form of Common Stock Purchase Warrant, March 2007

4.4 (13)		Form of Note, April 2008

4.5 (13)		Form of Common Stock Purchase Warrant, April 2008

4.6 (14)		Form of Note, May 2008

4.7 (14)		Form of Common Stock Purchase Warrant, May 2008

~~10.1 (1)~~4.8 (15)		~~License Agreement with Sandia; Amendments~~Form of Note, June 2008

~~10.2 (1)~~4.9 (15)		~~Lease for 9620 San Mateo~~Form of Common Stock Purchase Warrant, June 2008

~~10.3~~10.1 (1)		Employment Agreement with Tom Anderson

~~10.4~~10.2 (1)		Employment Agreement with Walter Aviles

~~10.5~~10.3 (10)		Amended and Restated 2004 Stock Incentive Plan

~~10.6 (1)~~		~~Shareholders Agreement~~

~~10.7 (1)~~		~~Lock Up Agreement~~

~~10.8 (1)~~		~~Miscellaneous Technical Services Agreement between Aramco Services Company and Novint Technologies, Inc.~~

~~10.9 (1)~~		~~Contract Addendum between Aramco Services Company and Novint Technologies, Inc.~~

~~10.10 (1)~~		~~Amendment to Contract between Aramco Services Company and Novint Technologies, Inc.~~

~~10.11 (1)~~		~~Amendment to Contract between Aramco Services Company and Novint Technologies, Inc.~~

~~10.12 (1)~~		~~Statement of Work between Chevron Corporation and Novint Technologies, Inc.~~

~~10.13 (1)~~		~~Purchase Order from DaimlerChrylser Corporation~~

~~10.14 (1)~~		~~Purchase Order # 94059 from LockheedMartin Corporation~~

~~10.15 (1)~~		~~Purchase Order # 96996 from LockheedMartin Corporation~~

~~10.16 (1)~~		~~Purchase Order # 97860 from LockheedMartin Corporation~~

~~10.17 (1)~~		~~Purchase Order # Q50601685 from LockheedMartin Corporation~~

~~10.18 (1)~~		~~Purchase Order # QQ060592 from LockheedMartin Corporation~~

~~10.19 (1)~~		~~Purchase Order # Q50608809 from LockheedMartin Corporation~~

~~- 20 -~~

~~Table of Contents~~

~~10.20 (1)~~		~~Purchase Order # 24232 from Sandia National Laboratories~~

~~10.21 (1)~~		~~Purchase Order # 27467 from Sandia National Laboratories~~

~~10.22 (1)~~		~~Purchase Order # 117339 from Sandia National Laboratories~~

~~10.23 (1)~~		~~Purchase Order # 250810 from Sandia National Laboratories~~

~~10.24 (1)~~		~~Undersea Exploration Modeling Agreement between Woods Hole Oceanographic Institute and Novint Technologies, Inc.~~

~~10.25 (1)~~		~~Purchase Order for Lunar Design, Inc. dated April 7, 2005~~

~~10.26 (1)~~		~~Sublicense Agreement between Manhattan Scientifics and Novint Technologies, Inc.~~

~~10.27 (1)~~		~~License and Royalty Agreement between Manhattan Scientifics and Novint Technologies, Inc.~~

~~10.28 (1)~~		~~Research Development and License Agreement between Manhattan Scientifics and Novint Technologies, Inc.~~

~~10.29 (1)~~		~~Intellectual Property License Agreement with Force Dimension LLC~~

~~10.30 (1)~~		~~Purchase Order with Lockheed Martin dated April 1, 2005~~

~~10.31 (1)~~		~~Purchase Order with Lockheed Martin dated April 4, 2005~~

~~10.32 (1)~~		~~Purchase Order with Lockheed Martin dated April 21, 2005~~

~~10.33 (1)~~		~~Purchase Order with Deakin University dated April 6, 2004~~

~~10.34 (1)~~		~~Purchase Order with Robarts Research dated September 24, 2004~~

~~10.35 (1)~~		~~Purchase Order with University of New Mexico dated March 16, 2004~~

~~10.36 (1)~~		~~Amendment to Agreement with Force Dimension Dated May 5, 2005~~

~~10.37 (1)~~		~~Amendment to contract between Aramco Services Company and Novint Technologies, Inc.~~

~~10.38~~10.4 (2)		Purchase Order with Lockheed Martin dated February 16, 2006

~~10.39~~10.5 (2)		Amendment to Intellectual Property License Agreement with Force Dimension LLC dated March 9, 2006

~~10.40~~10.6 (2)		Purchase Order with Lockheed Martin dated March 3, 2006

~~10.41~~10.7 (3)		Form of Subscription Agreement for Securities, April 2006.

~~10.42~~10.8 (4)		Board of Directors Agreement between V. Gerald Grafe and Novint Technologies, Inc.


~~10.44~~10.9 (5)		Manufacturing Agreement dated December 19, 2006 by and between Novint Technologies, Inc. and VTech Communications Ltd.

~~- 21 -~~

~~Table of Contents~~

~~10.45~~10.10 (5)		Novint Purchase Order 1056. (Portions of this exhibit have been omitted pursuant to a request for confidential treatment.)

~~10.46~~10.11 (7)		Form of Unit Subscription Agreement, March 2007

~~10.47~~10.12 (7)		Form of Investor Rights Agreement, March 2007

~~10.48~~10.13 (8)		Amendment No. 1 to Unit Subscription Agreement dated March 2, 2007

~~10.49~~10.14 (8)		Amendment No. 2 to Unit Subscription Agreement dated March 30, 2007

~~10.50~~10.15 (8)		Amendment No. 1 to Investor Rights Agreement dated March 30, 2007

~~10.51~~10.16 (10)		Purchase Order with The Falk Group, LLC dated January 16, 2007

~~10.52~~10.17 (11)		Tournabout Intellectual Property Acquisition Agreement dated July 17, 2007

~~10.53~~10.18 (12)		Lease Agreement dated May 29, 2007

~~10.54~~10.19 (12)		Lease Agreement dated June 21, 2007

~~10.55~~10.20 (13)		Form of Subscription Agreement, April 2008

~~10.56~~10.21 (14)		Form of Subscription Agreement, May 2008

10.22 (15)		Form of Subscription Agreement, June 2008

14 (2)		Code of Ethics

31		Certification Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002 — Chief Executive Officer and Chief Financial Officer

32		Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002 — Chief Executive Officer and Chief Financial Officer

(1)		Filed with the Issuer’s Registration Statement on Form SB-2 on May 17, 2004, and as subsequently amended, and incorporated herein by reference.

(2)		Filed with the Issuer’s Annual Report on Form 10-KSB, filed with the Commission on April 17, 2006, and incorporated herein by reference.

(3)		Filed with the Issuer’s Periodic Report on Form 10-QSB, filed with the Commission on May 22, 2006, and incorporated herein by reference.

(4)		Filed with the Issuer’s Current Report on Form 8-K, filed with the Commission on September 22, 2006, and incorporated herein by reference.

(5)		Filed with the Issuer’s Current Report on Form 8-K, filed with the Commission on December 20, 2006, and incorporated herein by reference.

(6)		Filed with the Issuer’s Current Report on Form 8-K, filed with the Commission on March 1, 2007.

~~- 22 -~~

~~Table of Contents~~


(7)		Filed with the Issuer’s Current Report on Form 8-K, filed with the Commission on March 9, 2007.

(8)		Filed with the Issuer’s Periodic Report on Form 10-QSB, filed with the Commission on May 15, 2007.

(9)		Filed with the Issuer’s Current Report on Form 8-K, filed with the Commission on June 21, 2007.

(10)		Filed with the Issuer’s Registration Statement on Form SB-2 on May 24, 2007.

(11)		Filed with the Issuer’s Current Report on Form 8-K, filed with the Commission on July 23, 2007.

(12)		Filed with the Issuer’s Registration Statement on Form SB-2 on July 27, 2007.

(13)		Filed with the Issuer’s Current Report on Form 8-K, filed with the Commission on April 15, 2008.

(14)		Filed with the Issuer’s Current Report on Form 8-K, filed with the Commission on May 12, 2008.

(15)		Filed with the Issuer’s Current Report on Form 8-K, filed with the Commission on June 13, 2008.

All other exhibits are filed herewith.

~~- 23 -~~25

~~Table of Contents~~

~~In accordance with Section 13 or 15(d)~~Pursuant to the requirements of the Securities Exchange Act of 1934, ~~as amended,~~ the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NOVINT TECHNOLOGIES, INC.
	(Registrant)

Date: ~~May 15,~~November 19, 2008	By:	/s/ Tom Anderson
		Tom Anderson
		Chief Executive Officer

		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Balance Sheets	3
	Statements of Operations	4
	~~Statements~~Statement of Changes in ~~Stockholders'~~Stockholders’ Equity	5
	Statements of Cash Flows	6
	Notes to Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	1821
Item 4.	Controls and Procedures	1821

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	1821
Item 1A.	Risk Factors	1921
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1922
Item 3.	Defaults Upon Senior Securities	1922
Item 4.	Submission of Matters to a Vote of Security Holders	1922
Item 5.	Other Information	1922
Item 6.	Exhibits	1923
Signatures		2426
Exhibits

	March 31, 2008			December 31, 2007				September 30, 2008			December 31, 2007
	(Unaudited)							(Unaudited)
ASSETS							ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	1,614,417		$	2,704,367			$	575,887		$	2,704,367
Accounts receivable, net		33,174			80,724				28,455			80,724
Prepaid expenses and other current assets		672,565			257,787				1,130,873			257,787
Inventory		958,247			474,461				1,624,648			474,461
Deposit on purchase of inventory		605,107			469,644				48,939			469,644

Total current assets		3,883,510			3,986,983				3,408,802			3,986,983

PROPERTY AND EQUIPMENT, NET		497,089			443,576				498,443			443,576
DEFERRED FINANCING COSTS		132,678			—				393,350			-
PREPAID EXPENSES - NET OF CURRENT PORTION		628,385			125,706				979,713			125,706
SOFTWARE DEVELOPMENT COSTS, NET		634,513			644,308				615,597			644,308
INTANGIBLE ASSETS, NET		390,080			405,299				777,289			405,299
DEPOSITS		16,224			43,063				28,224			43,063

Total assets	$	6,182,479		$	5,648,935			$	6,701,418		$	5,648,935


LIABILITIES AND STOCKHOLDERS' EQUITY							LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable	$	370,588		$	230,677			$	658,163		$	230,677
Accrued payroll related liabilities		153,286			195,549				217,656			195,549
Accrued expenses		255,280			238,060				219,045			238,060
Accrued expenses - related parties		22,812			22,564				21,965			22,564
Deferred revenue		41,693			44,966				29,390			44,966

Total current liabilities		843,659			731,816				1,146,219			731,816

LONG TERM LIABILITIES:
Convertible notes payable, net of unamortized debt
discount and financing cost of $2,025,000		—			—
discount of $4,368,010									794,188			-

Total liabilities		843,659			731,816				1,940,407			731,816

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Common stock, authorized 150,000,000 shares, $0.01
par value; 31,906,619 and 31,898,955 shares issued
par value; 32,255,062 and 31,898,955 shares issued
and outstanding, respectively		319,067			318,990				322,552			318,990
Additional paid-in capital		27,636,971			25,348,138				31,646,939			25,348,138
Accumulated deficit		(22,612,613	)		(20,745,404	)			(27,203,875	)		(20,745,404	)
Accumulated other comprehensive loss		(4,605	)		(4,605	)			(4,605	)		(4,605	)

Total stockholders' equity		5,338,820			4,917,119				4,761,011			4,917,119

Total liabilities and stockholders' equity	$	6,182,479		$	5,648,935			$	6,701,418		$	5,648,935

Large Accelerated filer o	Non-Accelerated Filer o
Accelerated Filer o	Smaller Reporting Company x

	For the Three Months Ended
	March 31, 2008			March 31, 2007
	(Unaudited)			(Unaudited)
Revenue:
Project	$	27,579		$	128,731
Product		44,250			—
Total revenue		71,829			128,731


Cost of goods sold:
Project		21,187			107,481
Product		58,883			—
Total cost of goods sold		80,070			107,481


Gross profit		(8,241	)		21,250

Operating expenses
Research and development		313,526			235,570
General and administrative		1,328,201			1,495,206
Depreciation and amortization		99,147			41,188
Sales and marketing		131,849			149,436
Total operating expenses		1,872,723			1,921,400

Loss from operations		(1,880,964	)		(1,900,150	)

Other (income) expense
Interest income		(12,252	)		(27,635	)
Interest expense		704			143,684
Other (income) expense		(2,207	)		—

Net other expenses		(13,755	)		116,049

Net loss	$	(1,867,209	)	$	(2,016,199	)

Loss per share, basic and diluted:
Net loss	$	(0.06	)	$	(0.09	)

Weighted-average common shares outstanding,
basic and diluted		31,902,829			23,352,495

	For the Three Months Ended
	March 31,			March 31,
	2008			2007
	(Unaudited)			(Unaudited)
Cash flows from operating activities:
Net loss	$	(1,867,209	)	$	(2,016,199	)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities
Depreciation and amortization		99,147			41,188
Common stock issued for services		7,200			351,001
Options issued to employees and consultant for services		256,710			393,113
Changes in operating assets and liabilities:
Accounts receivable		47,550			(75,417	)
Prepaid expenses		(414,778	)		31,365
Inventory		(483,786	)		—
Deposit on purchase of inventory		(135,463	)		—
Prepaid expenses		(502,679	)		—
Deposits		26,839			—
Accounts payable and accrued liabilities		42,190			195,421
Accrued expenses related party		248			35,494
Costs and estimated earnings in excess of billings on contracts, net		—			(48,675	)
Deferred revenues		(3,273	)		31,507
Billings in excess of costs and estimated earnings on contracts, net		—			2,668
Net cash (used in) operating activities		(2,927,304	)		(1,058,534	)

Cash flows from (to) investing activities:
Intangible expenditures		(22,539	)		—
Capital outlay for software development costs		(27,424	)		(15,639	)
Property and equipment purchases		(77,683	)		—
Net cash (used in) investing activities		(127,646	)		(15,639	)

Cash flows from (to) financing activities:
Proceeds from exercise of options		—			57,636
Proceeds from issuance of common stock		—			9,500,000
Offering costs		(60,000	)		(370,010	)
Proceeds from convertible notes payable		2,025,000			—
Net cash provided by financing activities		1,965,000			9,187,626

Net increase (decrease) in cash and cash equivalents		(1,089,950	)		8,113,453
Cash and cash equivalents at beginning of period		2,704,367			255,468

Cash and cash equivalents at end of period	$	1,614,417		$	8,368,921

Supplemental information:
Interest paid	$	—		$	—
Income taxes paid	$	—		$	—
Non-cash investing and financing activities:
Debt discount and deferred financing cost related to convertible notes
payable recorded against paid-in capital	$	2,025,000		$	—
Payment of offering costs with 60,000 warrants	$	41,728		$	—
Deferred financing cost recognize and netted against paid-in capital	$	—		$	54,354
Purchase of licenses with common stock	$	—		$	10,001
Payment of notes payable and accrued interest with common stock	$	—		$	358,081
Payment of accrued liabilities with common stock	$	—		$	74,000
Receivable related to stock options exercised	$	—		$	75,000