Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 14, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | hopTo Inc. | |
Entity Central Index Key | 1,021,435 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 9,804,400 | |
Trading Symbol | HPTO | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash | $ 551,300 | $ 546,200 |
Accounts receivable, net | 353,300 | 355,300 |
Prepaid expenses | 26,800 | 38,700 |
Total Current Assets | 931,400 | 940,200 |
Property and equipment, net | 39,800 | 143,300 |
Other assets | 109,000 | 109,000 |
Total Assets | 1,080,200 | 1,192,500 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 759,700 | 975,800 |
Deferred rent | 23,400 | 24,100 |
Capital lease | 6,800 | |
Lease liability | 24,900 | |
Deferred revenue | 1,579,500 | 1,759,000 |
Other current liabilities | 855,100 | 571,100 |
Total Current Liabilities | 3,242,600 | 3,336,800 |
Deposit liability | 93,500 | 81,400 |
Deferred revenue | 1,523,600 | 1,694,600 |
Deferred rent | 41,500 | 2,600 |
Total Liabilities | 4,901,200 | 5,115,400 |
Commitments and contingencies | ||
Stockholders' Deficit: | ||
Preferred stock, $0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding | ||
Common stock, $0.0001 par value, 195,000,000 shares authorized, 9,804,400 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 14,700 | 14,700 |
Additional paid-in capital | 78,526,700 | 78,512,200 |
Accumulated deficit | (82,362,400) | (82,449,800) |
Total Stockholders' Deficit | (3,821,000) | (3,922,900) |
Total Liabilities and Stockholders' Deficit | $ 1,080,200 | $ 1,192,500 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 195,000,000 | 195,000,000 |
Common stock, shares issued | 9,804,400 | 9,804,400 |
Common stock, shares outstanding | 9,804,400 | 9,804,400 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenue | $ 1,025,900 | $ 898,500 | $ 2,933,200 | $ 2,864,400 |
Costs of revenue | 15,900 | 8,300 | 53,000 | 129,500 |
Gross profit | 1,010,000 | 890,200 | 2,880,200 | 2,734,900 |
Operating expenses: | ||||
Selling and marketing | 87,400 | 93,900 | 259,400 | 664,600 |
General and administrative | 206,700 | 821,600 | 1,268,900 | 2,114,600 |
Research and development | 383,800 | 491,500 | 1,123,900 | 1,860,900 |
Total operating expenses | 677,900 | 1,407,000 | 2,652,200 | 4,640,100 |
Gain / (loss) from operations | 332,100 | (516,800) | 228,000 | (1,905,200) |
Other income (expense): | ||||
Change in fair value of warrants liability | 54,400 | 29,300 | ||
Other income (expense), net | (63,700) | 1,100 | (123,800) | (3,700) |
Loss from operations before provision for income tax | 268,400 | (461,300) | 104,200 | (1,872,200) |
Provision for income tax | 14,800 | 700 | 16,800 | 2,300 |
Net profit / (loss) | $ 253,600 | $ (462,000) | $ 87,400 | $ (1,874,500) |
Basic and diluted earnings / (loss) per share | $ 0.03 | $ (0.05) | $ 0.01 | $ (0.19) |
Average weighted common shares outstanding - basic and diluted | 9,804,400 | 9,784,163 | 9,804,400 | 9,763,111 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Dec. 31, 2015 | $ 14,600 | $ 78,189,300 | $ (80,596,900) | $ (3,965,400) | |
Beginning balance, shares at Dec. 31, 2015 | 9,731,233 | ||||
Employee stock option issuances | |||||
Employee stock option issuances, shares | 1,800 | ||||
Vesting of restricted stock awards | $ 100 | ||||
Vesting of restricted stock awards, shares | 71,429 | ||||
Stock-based compensation expense | 303,400 | 303,400 | |||
Company payment of employee taxes for stock-based compensation | (2,700) | (2,700) | |||
Proceeds from exercise of employee stock options | 1,500 | 1,500 | |||
Other Rounding | (200) | (200) | |||
Net profit / (loss) | (1,874,500) | (1,874,500) | |||
Ending balance at Sep. 30, 2016 | $ 14,700 | 78,491,300 | (82,471,400) | (3,965,400) | |
Ending balance, shares at Sep. 30, 2016 | 9,804,400 | ||||
Beginning balance at Dec. 31, 2016 | $ 14,700 | 78,512,200 | (82,449,800) | (3,922,900) | |
Beginning balance, shares at Dec. 31, 2016 | 9,804,400 | ||||
Stock-based compensation expense | 14,500 | 14,500 | |||
Net profit / (loss) | 87,400 | 87,400 | |||
Ending balance at Sep. 30, 2017 | $ 14,700 | $ 78,526,700 | $ (82,362,400) | $ (3,821,000) | |
Ending balance, shares at Sep. 30, 2017 | 9,804,400 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows Provided By (Used In) Operating Activities: | ||
Net profit / (loss) | $ 87,400 | $ (1,874,500) |
Adjustments to reconcile net profit/loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 42,200 | 76,200 |
Write-down of capitalized purchased technology | 15,500 | |
Stock-based compensation expense | 14,500 | 303,400 |
Company payment of employee taxes for stock-based compensation | (2,700) | |
Change in fair value of derivative instruments - warrants | (29,300) | |
Accretion of warrants liability for consulting services | (2,300) | |
Changes in severance liability | (5,900) | |
Changes in deferred rent | 23,200 | |
Changes to allowance for doubtful accounts | (3,300) | (12,000) |
Revenue deferred to future periods | 1,828,500 | 1,955,700 |
Recognition of deferred revenue | (2,179,000) | (2,478,800) |
Loss / (gain) on disposal of fixed assets | 60,400 | (3,200) |
Loss on sublease | 63,100 | |
Interest accrued for capital lease | 200 | 800 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 5,300 | 296,400 |
Prepaid expenses | 11,900 | (40,900) |
Accounts payable and accrued expenses | (216,100) | (127,300) |
Deposit liability | 12,100 | |
Other liabilities | 284,000 | 392,900 |
Net Cash Provided By (Used In) Operating Activities | 11,200 | (1,431,000) |
Cash Flows Provided By (Used In) Investing Activities: | ||
Proceeds from sale of equipment | 900 | 23,300 |
Cash Flows Provided By (Used In) Financing Activities: | ||
Proceeds from exercise of employee stock options | 1,500 | |
Payment for capital lease | (7,000) | (7,000) |
Net Cash Provided By (Used In) Financing Activities | (7,000) | (5,500) |
Net Increase (Decrease) in Cash | 5,100 | (1,413,200) |
Cash - Beginning of Period | 546,200 | 1,777,300 |
Cash - End of Period | $ 551,300 | $ 364,100 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of hopTo Inc. and its subsidiaries (collectively, “we”, “us”,”our” or the “Company”); significant intercompany accounts and transactions are eliminated upon consolidation. The unaudited condensed consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) applicable to interim financial information and the rules and regulations promulgated by the Securities and Exchange Commission (the “SEC”). Accordingly, such unaudited condensed consolidated financial statements do not include all information and footnote disclosures required in annual financial statements. The unaudited condensed consolidated financial statements included herein reflect all adjustments, which include only normal, recurring adjustments, that are, in our opinion, necessary to state fairly the results for the periods presented. This Quarterly Report on Form 10-Q should be read in conjunction with our audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2016, which was filed with the SEC on April 7, 2017 (“2016 10-K Report”). The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending December 31, 2017 or any future period. |
Going Concern and Management's
Going Concern and Management's Liquidity Plans | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern and Management's Liquidity Plans | 2. Going Concern and Management’s Liquidity Plans The accompanying condensed consolidated financial statements have been prepared in conformity with GAAP, assuming we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Accordingly, the condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. Although for the three and nine months ended September 30, 2017, respectively, the Company generated net profits of $253,600 and $87,400, respectively, historically we have incurred significant net losses since our inception. At September 30, 2017, the Company had an accumulated deficit of $82,362,400 and a working capital deficit of $2,311,200. We were unable to generate meaningful revenue from our hopTo Work business and our most recent estimation is that revenue from this product is unlikely in any reasonable time frame. We have, however, recently improved our revenue and operating results from our legacy GO-Global business. If this trend continues, subject to our contingent liabilities, we believe we would have sufficient capital resources to fund our GO-Global business (which is our only active business) for at least the next 12 months. However, due to the uncertainty at the current time about this trend and the outcome of our contingent liabilities, we have determined that our cash resources may not be sufficient to fund our business for at least the next 12 months. The Company’s ability to continue as a going concern is dependent on our ability to continue to generate revenue from our legacy GO-Global business and to raise additional capital through the issuance of new equity, debt financing, or from the sale of certain assets to meet short and long-term operating requirements. If the Company raises additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our current shareholders could be reduced, and such securities might have rights, preferences or privileges senior to the Company’s common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage of prospective business endeavors or opportunities, which could significantly and materially restrict our operations. We are continuing to pursue external financing alternatives to improve our working capital position. If the Company is unable to obtain the necessary capital, the Company may have to cease operations. These factors raise substantial doubt about our ability to continue as a going concern. In order to maintain operations, we previously implemented significant expense reductions, including a limited number of employee layoffs, and continue to implement further costs and employment reductions. During the three month period ended September 30, 2016, our CEO and CFO voluntarily agreed with our board of directors to defer 50% of their salary beginning September 1, 2016 until such time as the Company can reasonably pay such compensation upon approval by the board of directors. See Note 12 – Subsequent Events. Although maintaining our SEC filing status is a significant expense, we currently intend to maintain such status; however, we consider all options to preserve value for shareholders, including potentially suspending or terminating our filing status. We have worked extensively to explore additional sources of capital including the issuance of new shares, securing debt financing, and the sale of assets including certain software products and patents. Although this process is ongoing and we are in active discussions with multiple parties, there is no guarantee that they will result in transactions that are sufficient to provide the Company with the required liquidity to remove the substantial doubt as to our ability to continue as a going concern. See Note 12 – Subsequent Events. We are also in discussions with some parties about the possibility of other strategic transactions although there is no guarantee that these discussions will result in an actual transaction. The accompanying condensed consolidated financial statements do not include any adjustments that may result from the outcome of the uncertainties set forth above. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 3. Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates include: the amount of stock-based compensation expense; the allowance for doubtful accounts; the estimated lives, valuation, and amortization of intangible assets (including capitalized software); depreciation of long-lived assets; valuation of warrants; post-employment benefits, and accruals for liabilities. While we believe that such estimates are fair, actual results could differ materially from those estimates. Revenue Recognition We market and license our products indirectly through channel distributors, independent software vendors (“ISVs”), value-added resellers (“VARs”) (collectively, “resellers”) and directly to corporate enterprises, governmental and educational institutions and others. Our product licenses are perpetual. We also separately sell intellectual property licenses, maintenance contracts, which are comprised of license updates and customer service access, as well as other products and services. Software license revenues are recognized when: ● Persuasive evidence of an arrangement exists, (i.e., when we sign a non-cancellable license agreement wherein the customer acknowledges an unconditional obligation to pay, or upon receipt of the customer’s purchase order), and ● Delivery has occurred or services have been rendered and there are no uncertainties surrounding product acceptance (i.e., when title and risk of loss have been transferred to the customer, which occurs when the media containing the licensed program(s) is provided to a common carrier or, in the case of electronic delivery, when the customer is given access to the licensed program(s)), and ● The price to the customer is fixed or determinable, as typically evidenced in a signed non-cancellable contract, or a customer’s purchase order, and ● Collectability is probable. If collectability is not considered probable, revenue is recognized when the fee is collected. Revenue recognized on software arrangements involving multiple deliverables is allocated to each deliverable based on vendor-specific objective evidence (“VSOE”) or third party evidence of the fair values of each deliverable; such deliverables include licenses for software products, maintenance, private labeling fees, and customer training. We limit our assessment of VSOE for each deliverable to either the price charged when the same deliverable is sold separately or the price established by management having the relevant authority to do so, for a deliverable not yet sold separately. If sufficient VSOE of the fair value does not exist so as to permit the allocation of revenue to the various elements of the arrangement, all revenue from the arrangement is deferred until such evidence exists or until all elements are delivered. If VSOE of the fair value does not exist, and the only undelivered element is maintenance, then we recognize revenue on a ratable basis. If VSOE of the fair value of all undelivered elements exists but does not exist for one or more delivered elements, then revenue is recognized using the residual method. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is recognized as revenue. Certain resellers (“stocking resellers”) purchase product licenses that they hold in inventory until they are resold to the ultimate end user (an “inventory stocking order”). At the time that a stocking reseller places an inventory stocking order, no product licenses are shipped by us to the stocking reseller; rather, the stocking reseller’s inventory is credited with the number of licenses purchased and the stocking reseller can resell (issue) any number of licenses from their inventory at any time. Upon receipt of an order to issue a license(s) from a stocking reseller’s inventory (a “draw down order”), we will ship the license(s) in accordance with the draw down order’s instructions. We defer recognition of revenue from inventory stocking orders until the underlying licenses are sold and shipped to the end user, as evidenced by the receipt and fulfillment of the stocking reseller’s draw down order, assuming all other revenue recognition criteria have been met. There are no rights of return granted to resellers or other purchasers of our software products. Revenue from maintenance contracts is recognized ratably over the related contract period, which generally ranges from one to five years. All of our software licenses are denominated in U.S. dollars. Deferred Rent The leases for both of the Company’s subleased former offices in Campbell, California contain free rent and predetermined fixed escalations in our minimum rent payments. Rent expense related to these leases is recognized on a straight-line basis over the terms of the leases. Any difference between the straight-line rent amounts and amounts payable under the leases is recorded as part of deferred rent in current or long-term liabilities, as appropriate. The monthly rent payments due to the Company for the sublease of the office at 1919 S. Bascom Avenue fully offset the rent payments due under the Company’s lease for that space. The monthly rent payments due to the Company for the sublease of the office at 51 East Campbell Avenue will offset approximately 62% of the monthly rent payments due to the landlord under the Company’s lease for that space. During the three-month period ended September 30, 2017, the Company recorded a loss of $62,900 representing the total of the shortfall of monthly rent payments over the life of this sublease. As of September 30, 2017, $24,900 remains on the balance sheet as a lease liability to be amortized over the remaining 12 months of the sublease. Incentives that we received upon entering into the S. Bascom Avenue lease agreement are recognized on a straight-line basis as a reduction to rent over the term of the lease. We record the unamortized portion of these incentives as a part of deferred rent in current or long-term liabilities, as appropriate. Long-Lived Assets Long-lived assets are assessed for possible impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable, whenever we have committed to a plan to dispose of the assets or, at a minimum, annually. Typically, for long-lived assets to be held and used, measurement of an impairment loss is based on the fair value of such assets, with fair value being determined based on appraisals, current market value, comparable sales value, and discounted future cash flows, among other variables, as appropriate. Assets to be held and used (which assets are affected by an impairment loss) are depreciated or amortized at their new carrying amount over their remaining estimated life; assets to be sold or otherwise disposed of are not subject to further depreciation or amortization. During the three month and nine month period ended September 30, 2016 we determined that an impairment of $0 and $15,500, respectively, existed with certain capitalized software development costs associated with our hopTo Work product and recognized that cost as part of cost of revenue. No such impairment charge was recorded during either of the three or nine-month periods ended September 30, 2017. Allowance for Doubtful Accounts We maintain an allowance for doubtful accounts that reflects our best estimate of potentially uncollectible trade receivables. The allowance is based on assessments of the collectability of specific customer accounts and the general aging and size of the accounts receivable. We regularly review the adequacy of our allowance for doubtful accounts by considering such factors as historical experience, credit worthiness, and current economic conditions that may affect a customer’s ability to pay. We specifically reserve for those accounts deemed uncollectible. We also establish, and adjust, a general allowance for doubtful accounts based on our review of the aging and size of our accounts receivable. The following table sets forth the details of the Allowance for Doubtful Accounts for the three-month periods ended September 30, 2017 and 2016: Beginning Balance Charge Offs Recoveries Provision Ending Balance 2017 $ 15,300 $ — $ — $ (10,900 ) $ 4,400 2016 14,900 — — (9,600 ) 5,300 The following table sets forth the details of the Allowance for Doubtful Accounts for the nine-month periods ended September 30, 2017 and 2016 Beginning Balance Charge Offs Recoveries Provision Ending Balance 2017 $ 7,700 $ — $ — $ (3,300 ) $ 4,400 2016 17,300 — — (12,000 ) 5,300 Concentration of Credit Risk For the three and nine-month periods ended September 30, 2017 and 2016 respectively, we considered the customers listed in the following tables to be our most significant customers. The tables set forth the percentage of sales attributable to each customer during the periods presented, and the respective customer’s ending accounts receivable balance as a percentage of reported accounts receivable, net, as of September 30, 2017 and 2016. Three Months Ended September 30, 2017 As of September 30, 2017 Three Months Ended September 30, 2016 As of September 30, 2016 Customer Sales Accounts Receivable Sales Accounts Receivable Centric 9.5 % 14.3 % 2.0 % 3.8 % Elosoft 13.6 % 26.5 % 10.8 % 10.4 % Uniface 15.1 % 27.0 % 6.0 % 16.5 % Total 38.2 % 67.8 % 18.8 % 30.7 % Nine Months Ended September 30, 2017 As of September 30, 2017 Nine Months Ended September 30, 2016 As of September 30, 2016 Customer Sales Accounts Receivable Sales Accounts Receivable Centric 6.9 % 14.3 % 5.4 % 3.8 % Elosoft 13.8 % 26.5 % 8.9 % 10.4 % Uniface 8.2 % 27.0 % 6.1 % 16.5 % Total 28.9 % 67.8 % 20.4 % 30.7 % Fair Value of Financial Instruments The fair value of our accounts receivable, accounts payable and accrued liabilities approximate their carrying amounts due to the relative short maturities of these items. The fair value of warrants at issuance and for those recorded as a liability at each reporting date are determined in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurement,” ● Level 1: Defined as observable inputs, such as quoted (unadjusted) prices in active markets for identical assets or liabilities. ● Level 2: Defined as observable inputs other than quoted prices included in Level 1. This includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3: Defined as unobservable inputs to the valuation methodology that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation. Recent Accounting Pronouncements In May 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-09 “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). Subsequently FASB has released several updates to ASU 2014-09 including ASU 2016- 20, ASU 2016-12, ASU-2016-10, ASU-2016-08, and ASU-2015-14. The effective date for ASU 2014-09 will be the first quarter of fiscal year 2018 with early adoption permitted in the first quarter of fiscal year 2017. During the three-month period ended June 30, 2017, the Company completed a detailed review of the Topic 606 standard relative to our revenue recognition policies and practice. That review is still in process and the Company expects that it will be completed by November 30, 2017. However, the Company continues to believe that adoption of this standard will not have a material effect on either our historical financial results or future financial results. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment was: September 30, 2017 December 31, 2016 Equipment $ 184,600 $ 258,700 Furniture 3,600 190,600 Leasehold improvements 167,600 167,600 355,800 616,900 Less: accumulated depreciation and amortization 316,000 473,600 $ 39,800 $ 143,300 Aggregate property and equipment depreciation and amortization expense was $8,900 and $42,200 during the three-month period and nine-month ended September 30, 2017, respectively, and $21,200 and $70,800 during the same periods ended September 30, 2016. During the nine-month periods ended September 30, 2017 and 2016, we disposed of equipment and furniture with a combined net book value of $61,300 and $20,100, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 5. Stock-Based Compensation The following table summarizes the stock-based compensation expense, net of amounts capitalized, we recorded in our Unaudited Condensed Consolidated Statements of Operations for the three and nine-month periods ended September 30, 2017 and 2016, respectively, by classification: Three Months Ended September 30, Nine Months Ended September 30, Statement of Operations Classification 2017 2016 2017 2016 Costs of revenue $ — $ 2,200 $ 100 $ 5,400 Selling and marketing expense — 4,600 200 69,000 General and administrative expense (4,100 ) 40,500 14,100 135,500 Research and development expense — 26,400 100 93,500 $ (4,100 ) $ 73,700 $ 14,500 $ 303,400 |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2017 | |
Revenue Tables | |
Revenue | 6. Revenue Revenue for the three-month periods ended September 30, 2017 and 2016 was: 2017 Over (Under) 2016 Revenue 2017 2016 Dollars Percent Software Licenses Windows $ 360,300 $ 222,500 $ 137,800 61.9 % UNIX/Linux 71,200 64,000 7,200 11.3 % 431,500 286,500 145,000 50.6 % Software Service Fees Windows 445,200 444,700 500 0.1 % UNIX/Linux 131,600 149,400 (17,800 ) -11.9 % 576,800 594,100 (17,300 ) -2.9 % Other 17,600 17,900 (300 ) -1.7 % Total Revenue $ 1,025,900 $ 898,500 $ 127,400 14.2 % Revenue for the nine-month periods ended September 30, 2017 and 2016 was: 2017 Over (Under) 2016 Revenue 2017 2016 Dollars Percent Software Licenses Windows $ 939,800 $ 774,200 $ 165,600 21.4 % UNIX/Linux 223,300 209,200 14,100 6.7 % 1,163,100 983,400 179,700 18.3 % Software Service Fees Windows 1,324,300 1,367,200 (42,900 ) -3.1 % UNIX/Linux 403,400 473,700 (70,300 ) -14.8 % 1,727,700 1,840,900 (113,200 ) -6.1 % Other 42,400 40,100 2,300 5.7 % Total Revenue $ 2,933,200 $ 2,864,400 $ 68,800 2.4 % |
Cost of Revenue
Cost of Revenue | 9 Months Ended |
Sep. 30, 2017 | |
Cost of Revenue [Abstract] | |
Cost of Revenue | 7. Cost of Revenue Cost of revenue for the three-month periods ended September 30, 2017 and 2016 was: 2017 Over (Under) 2016 2017 2016 Dollars Percent Software service costs $ 13,000 $ 2,100 $ 10,900 519.0 % Software product costs 2,900 6,200 (3,300 ) -53.2 % Total Cost of Revenue $ 15,900 $ 8,300 $ 7,600 91.6 % Cost of revenue for the nine-month periods ended September 30, 2017 and 2016 was: 2017 Over (Under) 2016 2017 2016 Dollars Percent Software service costs $ 44,000 $ 78,100 $ (34,100 ) -43.7 % Software product costs 9,000 51,400 (42,400 ) -82.5 % Total Cost of Revenue $ 53,000 $ 129,500 $ (76,500 ) -59.1 % |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies On February 1, 2014, we relocated our corporate offices to a larger suite within our landlord’s office complex on South Bascom Avenue in Campbell, California. We are currently leasing 10,659 square feet under a five-year lease that, unless renewed, will expire in October 2018. On August 11, 2015 we entered into a sublease agreement to sublease the entirety of the South Bascom Avenue office space to a third party. The term of the sublease extends from November 1, 2015 through the end of our office lease term for that space in October 2018. The monthly rent payments due to hopTo under this sublease fully offset the monthly rent payments due to the landlord under hopTo’s lease for that space. On August 24, 2015, we entered into a new office lease for our corporate headquarters at 51 East Campbell Avenue in Campbell, California which was better suited to our California operations and resulted in significant monthly savings. The term of this lease is from October 1, 2015 through September 30, 2018. On April 28, 2017 we entered into a sublease agreement to sublease the entirety of the leased space at 51 East Campbell Avenue to a third party. The term of the sublease began on June 1, 2017 and extends through the end of our office lease term for that space. The monthly rent payments due to hopTo will offset approximately 62% of the monthly rent payments due to the landlord under hopTo’s lease for that space. (See Deferred Rent section of Note 3.) The following table sets forth the net minimum lease payments we will be required to make throughout the remainder of these leases: Lease Payments Sublease Receipts Total Remainder of 2017 $ 150,200 $ (179,900 ) $ (29,700 ) 2018 475,400 (420,800 ) 54,600 $ 625,600 $ (600,700 ) $ 24,900 During the three-month period ended September 30, 2016, our CEO and CFO voluntarily agreed with our board of directors to defer 50% of their salary beginning September 1, 2016 until such time as the Company can reasonably pay such compensation upon approval by the board of directors. The deferred salaries are recorded as a component of accounts payable and accrued expenses on the Condensed Consolidated Balance Sheet. See Note 12 – Subsequent Events. During the three and nine-month periods ended September 30, 2017, respectively, we reported non-cash expense of $0 and $284,000, respectively, related to potential liquidated damages resulting from delays in filing registration statements for shares and shares underlying warrants for certain of the private placements that the Company closed in prior periods. There were no such expenses recorded in the comparable prior year period. We are in the process of seeking waivers from shareholders for such liquidated damages. The potential liquidated damages is reported as other current liabilities on the condensed consolidated balance sheet and as a component of general and administrative expense on the condensed consolidated statements of operations. |
Supplemental Disclosure of Cash
Supplemental Disclosure of Cash Flow Information | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosure of Cash Flow Information | 9. Supplemental Disclosure of Cash Flow Information We disbursed $200 and $800 for the payment of interest expense during the nine-month periods ended September 30, 2017 and 2016, respectively. We disbursed $2,800 and $2,300 for the payment of foreign income taxes associated with the operation of our Israeli subsidiary during the nine-month periods ended September 30, 2017 and 2016, respectively. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | 10. Earnings (Loss) Per Share Earnings or loss per share is calculated by dividing the net income or loss for the period by the weighted average number of shares of common stock outstanding during the period. Diluted earnings or loss per share (“Diluted EPS”) is calculated by dividing the net income or loss for the period by the total of the weighted average number of shares of common stock outstanding during the period plus the effects of any dilutive securities. Diluted EPS considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of such potential shares of common stock would have an anti-dilutive effect. During all periods presented in our Condensed Consolidated Statements of Operations, potentially dilutive securities included shares of common stock potentially issuable upon exercise of stock options, release of unvested restricted stock awards and exercise of warrants. Diluted EPS excludes the impact of potential issuance of shares of common stock related to our stock options in periods in which the exercise price of the stock option is greater than the average market price of our common stock during such periods. For the three and nine-month periods ended September 30, 2017 and for the three and nine-month periods ended September 30, 2016, 1,375,509 and 1,412,507 shares of common stock equivalents, respectively, were excluded from the computation of dilutive loss per share since their effect would be anti-dilutive. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | 11. Segment Information Revenue by country for the three-month and nine-month periods ended September 30, 2017 and 2016 was as follows: Three Months Ended September 30, Nine Months Ended September 30, Revenue by Country 2017 2016 2017 2016 United States $ 292,100 $ 370,800 $ 922,300 $ 1,158,100 Brazil 220,200 122,900 582,600 418,100 Other Countries 513,600 404,800 1,428,200 1,288,200 Total $ 1,025,900 $ 898,500 $ 2,933,100 $ 2,864,400 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events On October 10, 2017, the Company and salesforce.com entered into a Patent Purchase Agreement (effective as of October 5, 2017), pursuant to which the Company sold seven of its patents for an aggregate consideration of $400,000, and also received, subject to various terms, conditions and limitations, a license back of those patents. The patents sold were U.S. Patent numbers: 9395826, 9398111, 9419848, 8745280, 8892782, 8738814 and 8856907. On October 25, 2017, the board of directors of the Company determined that the financial status of the Company had improved from the financial status of the Company during the three month period ended September 30, 2016, when the Company’s CEO and CFO voluntarily agreed with the board of directors to defer 50% of their salary beginning September 1, 2016 until such time as the Company could reasonably pay such compensation upon approval by the board of directors. Accordingly, the board of directors determined that it was reasonable for the Company to pay 50% of this deferred salary and such payments were made to the CFO and CEO on October 30, 2017. |
Significant Accounting Polici19
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates include: the amount of stock-based compensation expense; the allowance for doubtful accounts; the estimated lives, valuation, and amortization of intangible assets (including capitalized software); depreciation of long-lived assets; valuation of warrants; post-employment benefits, and accruals for liabilities. While we believe that such estimates are fair, actual results could differ materially from those estimates. |
Revenue Recognition | Revenue Recognition We market and license our products indirectly through channel distributors, independent software vendors (“ISVs”), value-added resellers (“VARs”) (collectively, “resellers”) and directly to corporate enterprises, governmental and educational institutions and others. Our product licenses are perpetual. We also separately sell intellectual property licenses, maintenance contracts, which are comprised of license updates and customer service access, as well as other products and services. Software license revenues are recognized when: ● Persuasive evidence of an arrangement exists, (i.e., when we sign a non-cancellable license agreement wherein the customer acknowledges an unconditional obligation to pay, or upon receipt of the customer’s purchase order), and ● Delivery has occurred or services have been rendered and there are no uncertainties surrounding product acceptance (i.e., when title and risk of loss have been transferred to the customer, which occurs when the media containing the licensed program(s) is provided to a common carrier or, in the case of electronic delivery, when the customer is given access to the licensed program(s)), and ● The price to the customer is fixed or determinable, as typically evidenced in a signed non-cancellable contract, or a customer’s purchase order, and ● Collectability is probable. If collectability is not considered probable, revenue is recognized when the fee is collected. Revenue recognized on software arrangements involving multiple deliverables is allocated to each deliverable based on vendor-specific objective evidence (“VSOE”) or third party evidence of the fair values of each deliverable; such deliverables include licenses for software products, maintenance, private labeling fees, and customer training. We limit our assessment of VSOE for each deliverable to either the price charged when the same deliverable is sold separately or the price established by management having the relevant authority to do so, for a deliverable not yet sold separately. If sufficient VSOE of the fair value does not exist so as to permit the allocation of revenue to the various elements of the arrangement, all revenue from the arrangement is deferred until such evidence exists or until all elements are delivered. If VSOE of the fair value does not exist, and the only undelivered element is maintenance, then we recognize revenue on a ratable basis. If VSOE of the fair value of all undelivered elements exists but does not exist for one or more delivered elements, then revenue is recognized using the residual method. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is recognized as revenue. Certain resellers (“stocking resellers”) purchase product licenses that they hold in inventory until they are resold to the ultimate end user (an “inventory stocking order”). At the time that a stocking reseller places an inventory stocking order, no product licenses are shipped by us to the stocking reseller; rather, the stocking reseller’s inventory is credited with the number of licenses purchased and the stocking reseller can resell (issue) any number of licenses from their inventory at any time. Upon receipt of an order to issue a license(s) from a stocking reseller’s inventory (a “draw down order”), we will ship the license(s) in accordance with the draw down order’s instructions. We defer recognition of revenue from inventory stocking orders until the underlying licenses are sold and shipped to the end user, as evidenced by the receipt and fulfillment of the stocking reseller’s draw down order, assuming all other revenue recognition criteria have been met. There are no rights of return granted to resellers or other purchasers of our software products. Revenue from maintenance contracts is recognized ratably over the related contract period, which generally ranges from one to five years. All of our software licenses are denominated in U.S. dollars. |
Deferred Rent | Deferred Rent The leases for both of the Company’s subleased former offices in Campbell, California contain free rent and predetermined fixed escalations in our minimum rent payments. Rent expense related to these leases is recognized on a straight-line basis over the terms of the leases. Any difference between the straight-line rent amounts and amounts payable under the leases is recorded as part of deferred rent in current or long-term liabilities, as appropriate. The monthly rent payments due to the Company for the sublease of the office at 1919 S. Bascom Avenue fully offset the rent payments due under the Company’s lease for that space. The monthly rent payments due to the Company for the sublease of the office at 51 East Campbell Avenue will offset approximately 62% of the monthly rent payments due to the landlord under the Company’s lease for that space. During the three-month period ended September 30, 2017, the Company recorded a loss of $62,900 representing the total of the shortfall of monthly rent payments over the life of this sublease. As of September 30, 2017, $24,900 remains on the balance sheet as a lease liability to be amortized over the remaining 12 months of the sublease. Incentives that we received upon entering into the S. Bascom Avenue lease agreement are recognized on a straight-line basis as a reduction to rent over the term of the lease. We record the unamortized portion of these incentives as a part of deferred rent in current or long-term liabilities, as appropriate. |
Long-Lived Assets | Long-Lived Assets Long-lived assets are assessed for possible impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable, whenever we have committed to a plan to dispose of the assets or, at a minimum, annually. Typically, for long-lived assets to be held and used, measurement of an impairment loss is based on the fair value of such assets, with fair value being determined based on appraisals, current market value, comparable sales value, and discounted future cash flows, among other variables, as appropriate. Assets to be held and used (which assets are affected by an impairment loss) are depreciated or amortized at their new carrying amount over their remaining estimated life; assets to be sold or otherwise disposed of are not subject to further depreciation or amortization. During the three month and nine month period ended September 30, 2016 we determined that an impairment of $0 and $15,500, respectively, existed with certain capitalized software development costs associated with our hopTo Work product and recognized that cost as part of cost of revenue. No such impairment charge was recorded during either of the three or nine-month periods ended September 30, 2017. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts We maintain an allowance for doubtful accounts that reflects our best estimate of potentially uncollectible trade receivables. The allowance is based on assessments of the collectability of specific customer accounts and the general aging and size of the accounts receivable. We regularly review the adequacy of our allowance for doubtful accounts by considering such factors as historical experience, credit worthiness, and current economic conditions that may affect a customer’s ability to pay. We specifically reserve for those accounts deemed uncollectible. We also establish, and adjust, a general allowance for doubtful accounts based on our review of the aging and size of our accounts receivable. The following table sets forth the details of the Allowance for Doubtful Accounts for the three-month periods ended September 30, 2017 and 2016: Beginning Balance Charge Offs Recoveries Provision Ending Balance 2017 $ 15,300 $ — $ — $ (10,900 ) $ 4,400 2016 14,900 — — (9,600 ) 5,300 The following table sets forth the details of the Allowance for Doubtful Accounts for the nine-month periods ended September 30, 2017 and 2016 Beginning Balance Charge Offs Recoveries Provision Ending Balance 2017 $ 7,700 $ — $ — $ (3,300 ) $ 4,400 2016 17,300 — — (12,000 ) 5,300 |
Concentration of Credit Risk | Concentration of Credit Risk For the three and nine-month periods ended September 30, 2017 and 2016 respectively, we considered the customers listed in the following tables to be our most significant customers. The tables set forth the percentage of sales attributable to each customer during the periods presented, and the respective customer’s ending accounts receivable balance as a percentage of reported accounts receivable, net, as of September 30, 2017 and 2016. Three Months Ended September 30, 2017 As of September 30, 2017 Three Months Ended September 30, 2016 As of September 30, 2016 Customer Sales Accounts Receivable Sales Accounts Receivable Centric 9.5 % 14.3 % 2.0 % 3.8 % Elosoft 13.6 % 26.5 % 10.8 % 10.4 % Uniface 15.1 % 27.0 % 6.0 % 16.5 % Total 38.2 % 67.8 % 18.8 % 30.7 % Nine Months Ended September 30, 2017 As of September 30, 2017 Nine Months Ended September 30, 2016 As of September 30, 2016 Customer Sales Accounts Receivable Sales Accounts Receivable Centric 6.9 % 14.3 % 5.4 % 3.8 % Elosoft 13.8 % 26.5 % 8.9 % 10.4 % Uniface 8.2 % 27.0 % 6.1 % 16.5 % Total 28.9 % 67.8 % 20.4 % 30.7 % |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of our accounts receivable, accounts payable and accrued liabilities approximate their carrying amounts due to the relative short maturities of these items. The fair value of warrants at issuance and for those recorded as a liability at each reporting date are determined in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurement,” ● Level 1: Defined as observable inputs, such as quoted (unadjusted) prices in active markets for identical assets or liabilities. ● Level 2: Defined as observable inputs other than quoted prices included in Level 1. This includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3: Defined as unobservable inputs to the valuation methodology that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-09 “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). Subsequently FASB has released several updates to ASU 2014-09 including ASU 2016- 20, ASU 2016-12, ASU-2016-10, ASU-2016-08, and ASU-2015-14. The effective date for ASU 2014-09 will be the first quarter of fiscal year 2018 with early adoption permitted in the first quarter of fiscal year 2017. During the three-month period ended June 30, 2017, the Company completed a detailed review of the Topic 606 standard relative to our revenue recognition policies and practice. That review is still in process and the Company expects that it will be completed by November 30, 2017. However, the Company continues to believe that adoption of this standard will not have a material effect on either our historical financial results or future financial results. |
Significant Accounting Polici20
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Allowance for Doubtful Accounts | The following table sets forth the details of the Allowance for Doubtful Accounts for the three-month periods ended September 30, 2017 and 2016: Beginning Balance Charge Offs Recoveries Provision Ending Balance 2017 $ 15,300 $ — $ — $ (10,900 ) $ 4,400 2016 14,900 — — (9,600 ) 5,300 The following table sets forth the details of the Allowance for Doubtful Accounts for the nine-month periods ended September 30, 2017 and 2016 Beginning Balance Charge Offs Recoveries Provision Ending Balance 2017 $ 7,700 $ — $ — $ (3,300 ) $ 4,400 2016 17,300 — — (12,000 ) 5,300 |
Schedule of Concentration of Credit Risk | The tables set forth the percentage of sales attributable to each customer during the periods presented, and the respective customer’s ending accounts receivable balance as a percentage of reported accounts receivable, net, as of September 30, 2017 and 2016. Three Months Ended September 30, 2017 As of September 30, 2017 Three Months Ended September 30, 2016 As of September 30, 2016 Customer Sales Accounts Receivable Sales Accounts Receivable Centric 9.5 % 14.3 % 2.0 % 3.8 % Elosoft 13.6 % 26.5 % 10.8 % 10.4 % Uniface 15.1 % 27.0 % 6.0 % 16.5 % Total 38.2 % 67.8 % 18.8 % 30.7 % Nine Months Ended September 30, 2017 As of September 30, 2017 Nine Months Ended September 30, 2016 As of September 30, 2016 Customer Sales Accounts Receivable Sales Accounts Receivable Centric 6.9 % 14.3 % 5.4 % 3.8 % Elosoft 13.8 % 26.5 % 8.9 % 10.4 % Uniface 8.2 % 27.0 % 6.1 % 16.5 % Total 28.9 % 67.8 % 20.4 % 30.7 % |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment was: September 30, 2017 December 31, 2016 Equipment $ 184,600 $ 258,700 Furniture 3,600 190,600 Leasehold improvements 167,600 167,600 355,800 616,900 Less: accumulated depreciation and amortization 316,000 473,600 $ 39,800 $ 143,300 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock-Based Compensation Expense | The following table summarizes the stock-based compensation expense, net of amounts capitalized, we recorded in our Unaudited Condensed Consolidated Statements of Operations for the three and nine-month periods ended September 30, 2017 and 2016, respectively, by classification: Three Months Ended September 30, Nine Months Ended September 30, Statement of Operations Classification 2017 2016 2017 2016 Costs of revenue $ — $ 2,200 $ 100 $ 5,400 Selling and marketing expense — 4,600 200 69,000 General and administrative expense (4,100 ) 40,500 14,100 135,500 Research and development expense — 26,400 100 93,500 $ (4,100 ) $ 73,700 $ 14,500 $ 303,400 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Revenue Tables | |
Schedule of Revenue | Revenue for the three-month periods ended September 30, 2017 and 2016 was: 2017 Over (Under) 2016 Revenue 2017 2016 Dollars Percent Software Licenses Windows $ 360,300 $ 222,500 $ 137,800 61.9 % UNIX/Linux 71,200 64,000 7,200 11.3 % 431,500 286,500 145,000 50.6 % Software Service Fees Windows 445,200 444,700 500 0.1 % UNIX/Linux 131,600 149,400 (17,800 ) -11.9 % 576,800 594,100 (17,300 ) -2.9 % Other 17,600 17,900 (300 ) -1.7 % Total Revenue $ 1,025,900 $ 898,500 $ 127,400 14.2 % Revenue for the nine-month periods ended September 30, 2017 and 2016 was: 2017 Over (Under) 2016 Revenue 2017 2016 Dollars Percent Software Licenses Windows $ 939,800 $ 774,200 $ 165,600 21.4 % UNIX/Linux 223,300 209,200 14,100 6.7 % 1,163,100 983,400 179,700 18.3 % Software Service Fees Windows 1,324,300 1,367,200 (42,900 ) -3.1 % UNIX/Linux 403,400 473,700 (70,300 ) -14.8 % 1,727,700 1,840,900 (113,200 ) -6.1 % Other 42,400 40,100 2,300 5.7 % Total Revenue $ 2,933,200 $ 2,864,400 $ 68,800 2.4 % |
Cost of Revenue (Tables)
Cost of Revenue (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Cost of Revenue [Abstract] | |
Schedule of Cost of Revenue | Cost of revenue for the three-month periods ended September 30, 2017 and 2016 was: 2017 Over (Under) 2016 2017 2016 Dollars Percent Software service costs $ 13,000 $ 2,100 $ 10,900 519.0 % Software product costs 2,900 6,200 (3,300 ) -53.2 % Total Cost of Revenue $ 15,900 $ 8,300 $ 7,600 91.6 % Cost of revenue for the nine-month periods ended September 30, 2017 and 2016 was: 2017 Over (Under) 2016 2017 2016 Dollars Percent Software service costs $ 44,000 $ 78,100 $ (34,100 ) -43.7 % Software product costs 9,000 51,400 (42,400 ) -82.5 % Total Cost of Revenue $ 53,000 $ 129,500 $ (76,500 ) -59.1 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments | The following table sets forth the net minimum lease payments we will be required to make throughout the remainder of these leases: Lease Payments Sublease Receipts Total Remainder of 2017 $ 150,200 $ (179,900 ) $ (29,700 ) 2018 475,400 (420,800 ) 54,600 $ 625,600 $ (600,700 ) $ 24,900 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Country | Revenue by country for the three-month and nine-month periods ended September 30, 2017 and 2016 was as follows: Three Months Ended September 30, Nine Months Ended September 30, Revenue by Country 2017 2016 2017 2016 United States $ 292,100 $ 370,800 $ 922,300 $ 1,158,100 Brazil 220,200 122,900 582,600 418,100 Other Countries 513,600 404,800 1,428,200 1,288,200 Total $ 1,025,900 $ 898,500 $ 2,933,100 $ 2,864,400 |
Going Concern and Management'27
Going Concern and Management's Liquidity Plans (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Net profit | $ 253,600 | $ (462,000) | $ 87,400 | $ (1,874,500) | |
Accumulated deficit | 82,362,400 | 82,362,400 | $ 82,449,800 | ||
Working capital deficit | $ 2,311,200 | $ 2,311,200 | |||
CFO And CEO [Member] | |||||
Percentage for employee compensation | 50.00% |
Significant Accounting Polici28
Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||||
Monthly rent payments, percentage | 62.00% | ||||
Loss on sublease | $ 62,900 | $ 63,100 | |||
Lease liability | 24,900 | 24,900 | |||
Impairment of capitalized computer software | 15,500 | ||||
Impairment charges of long-lived assets |
Significant Accounting Polici29
Significant Accounting Policies - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accounting Policies [Abstract] | ||||
Beginning balance | $ 15,300 | $ 14,900 | $ 7,700 | $ 17,300 |
Charge offs | ||||
Recoveries | ||||
Provision | (10,900) | (9,600) | (3,300) | (12,000) |
Ending balance | $ 4,400 | $ 5,300 | $ 4,400 | $ 5,300 |
Significant Accounting Polici30
Significant Accounting Policies - Schedule of Concentration of Credit Risk (Details) - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Sales Revenue, Net [Member] | ||||
Percentage of Concentration of Credit Risk | 38.20% | 18.80% | 28.90% | 20.40% |
Sales Revenue, Net [Member] | Centric [Member] | ||||
Percentage of Concentration of Credit Risk | 9.50% | 2.00% | 6.90% | 5.40% |
Sales Revenue, Net [Member] | Elosoft [Member] | ||||
Percentage of Concentration of Credit Risk | 13.60% | 10.80% | 13.80% | 8.90% |
Sales Revenue, Net [Member] | Uniface [Member] | ||||
Percentage of Concentration of Credit Risk | 15.10% | 6.00% | 8.20% | 6.10% |
Accounts Receivable [Member] | ||||
Percentage of Concentration of Credit Risk | 67.80% | 30.70% | 67.80% | 30.70% |
Accounts Receivable [Member] | Centric [Member] | ||||
Percentage of Concentration of Credit Risk | 14.30% | 3.80% | 14.30% | 3.80% |
Accounts Receivable [Member] | Elosoft [Member] | ||||
Percentage of Concentration of Credit Risk | 26.50% | 10.40% | 26.50% | 10.40% |
Accounts Receivable [Member] | Uniface [Member] | ||||
Percentage of Concentration of Credit Risk | 27.00% | 16.50% | 27.00% | 16.50% |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 8,900 | $ 21,200 | $ 42,200 | $ 70,800 |
Disposed of equipment | $ 61,300 | $ 20,100 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Property and equipment gross | $ 355,800 | $ 616,900 |
Less: accumulated depreciation and amortization | 316,000 | 473,600 |
Property and equipment net | 39,800 | 143,300 |
Equipment [Member] | ||
Property and equipment gross | 184,600 | 258,700 |
Furniture [Member] | ||
Property and equipment gross | 3,600 | 190,600 |
Leasehold Improvements [Member] | ||
Property and equipment gross | $ 167,600 | $ 167,600 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary Of Stock-Based Compensation Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Compensation expense | $ (4,100) | $ 73,700 | $ 14,500 | $ 303,400 |
Costs of Revenue [Member] | ||||
Compensation expense | 2,200 | 100 | 5,400 | |
Selling and Marketing Expense [Member] | ||||
Compensation expense | 4,600 | 200 | 69,000 | |
General and Administrative Expense [Member] | ||||
Compensation expense | (4,100) | 40,500 | 14,000 | 135,500 |
Research and Development Expense [Member] | ||||
Compensation expense | $ 26,400 | $ 100 | $ 93,500 |
Revenue - Schedule of Revenue (
Revenue - Schedule of Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Other | $ 17,600 | $ 17,900 | $ 42,400 | $ 40,100 |
Increase (Decrease) in Other | $ (300) | $ 2,300 | ||
Increase (Decrease) in Other, Percentage | (1.70%) | 5.70% | ||
Total Revenue | $ 1,025,900 | 898,500 | $ 2,933,200 | 2,864,400 |
Increase (Decrease) in Total Revenue | $ 127,400 | $ 68,800 | ||
Increase (Decrease) in Total Revenue | 14.20% | 2.40% | ||
Software Licenses [Member] | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Software Licenses | $ 431,500 | 286,500 | $ 1,163,100 | 983,400 |
Increase (Decrease) in Software Licenses | $ 14,500 | $ 179,700 | ||
Increase (Decrease) in Software Licenses, Percentage | 50.60% | 18.30% | ||
Software Service Fees | $ 576,800 | 594,100 | $ 1,727,700 | 840,900 |
Increase (Decrease) in Software Service Fees | $ (17,300) | $ (113,200) | ||
Increase (Decrease) in Software Service Fees, Percentage | (2.90%) | (6.10%) | ||
Software Licenses [Member] | Windows [Member] | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Software Licenses | $ 360,300 | 222,500 | $ 939,800 | 774,200 |
Increase (Decrease) in Software Licenses | $ 137,800 | $ 165,600 | ||
Increase (Decrease) in Software Licenses, Percentage | 61.90% | 21.40% | ||
Software Service Fees | $ 445,200 | 444,700 | $ 1,324,300 | 1,367,200 |
Increase (Decrease) in Software Service Fees | $ 500 | $ (42,900) | ||
Increase (Decrease) in Software Service Fees, Percentage | 0.10% | 3.10% | ||
Software Licenses [Member] | Unix Linux [Member] | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Software Licenses | $ 71,200 | 64,000 | $ 223,300 | 209,200 |
Increase (Decrease) in Software Licenses | $ 7,200 | $ 14,100 | ||
Increase (Decrease) in Software Licenses, Percentage | 11.30% | 6.70% | ||
Software Service Fees | $ 131,600 | $ 149,400 | $ 403,400 | $ 473,700 |
Increase (Decrease) in Software Service Fees | $ (17,800) | $ (70,300) | ||
Increase (Decrease) in Software Service Fees, Percentage | (11.90%) | (14.80%) |
Cost of Revenue - Schedule of C
Cost of Revenue - Schedule of Cost of Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Costs of Revenue | $ 15,900 | $ 8,300 | $ 53,000 | $ 129,500 |
Increase (Decrease) in Costs of Revenue | $ 7,600 | $ (76,500) | ||
Increase (Decrease) in Costs of Revenue, Percentage | 91.60% | (59.10%) | ||
Software Service Costs [Member] | ||||
Costs of Revenue | $ 13,000 | 2,100 | $ 44,000 | 78,100 |
Increase (Decrease) in Costs of Revenue | $ 10,900 | $ (34,100) | ||
Increase (Decrease) in Costs of Revenue, Percentage | 519.00% | (43.70%) | ||
Software Product Costs [Member] | ||||
Costs of Revenue | $ 2,900 | $ 6,200 | $ 9,000 | $ 51,400 |
Increase (Decrease) in Costs of Revenue | $ (3,300) | $ (42,100) | ||
Increase (Decrease) in Costs of Revenue, Percentage | (53.20%) | (82.50%) |
Commitments and Contingencies36
Commitments and Contingencies (Details Narrative) | Apr. 28, 2014 | Feb. 01, 2014ft² | Sep. 30, 2017USD ($) | Sep. 30, 2016 | Sep. 30, 2017USD ($) |
Monthly rent payments, percentage | 62.00% | ||||
Non-cash expenses | $ | $ 0 | $ 284,000 | |||
CFO And CEO [Member] | |||||
Percentage for employee compensation | 50.00% | ||||
Campbell Facility [Member] | |||||
Lease square feet | ft² | 10,659 | ||||
Lease term | 5 years | ||||
Lease expire date | 2018-10 | ||||
Campbell Facility [Member] | Sublease Agreement [Member] | |||||
Monthly rent payments, percentage | 62.00% | ||||
Lease description | The term of the sublease began on June 1, 2017 and extends through the end of our office lease term for that space. The monthly rent payments due to hopTo will offset approximately 62% of the monthly rent payments due to the landlord under hopTos lease for that space. |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) | Sep. 30, 2017USD ($) |
Remainder of 2017 | $ (29,700) |
2,018 | 54,600 |
Total | 24,900 |
Lease Payments [Member] | |
Remainder of 2017 | 150,200 |
2,018 | 475,400 |
Total | 625,600 |
Sublease Receipts [Member] | |
Remainder of 2017 | (179,900) |
2,018 | (420,800) |
Total | $ (600,700) |
Supplemental Disclosure of Ca38
Supplemental Disclosure of Cash Flow Information (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Supplemental Cash Flow Elements [Abstract] | ||
Payment of interest expense | $ 200 | $ 800 |
Payment of income taxes | $ 2,800 | $ 2,300 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details Narrative) - shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities | 1,375,509 | 1,412,507 |
Segment Information - Schedule
Segment Information - Schedule of Revenue by Country (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue by country | $ 1,025,900 | $ 898,500 | $ 2,933,200 | $ 2,864,400 |
United States [Member] | ||||
Revenue by country | 292,100 | 370,800 | 922,300 | 1,158,100 |
Brazil [Member] | ||||
Revenue by country | 220,200 | 122,900 | 582,600 | 418,100 |
Other Countries [Member] | ||||
Revenue by country | $ 513,600 | $ 404,800 | $ 1,428,200 | $ 1,288,200 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Oct. 25, 2017USD ($)Integer | Sep. 30, 2016 |
CFO And CEO [Member] | ||
Percentage for employee compensation | 50.00% | |
Subsequent Event [Member] | CFO And CEO [Member] | ||
Percentage for employee compensation | 50.00% | |
Subsequent Event [Member] | Patent Purchase Agreement [Member] | ||
Number of Patents | Integer | 7 | |
Aggregate consideration received | $ | $ 400,000 |