Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Apr. 14, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | hopTo Inc. | ||
Entity Central Index Key | 0001021435 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,606,838 | ||
Entity Common Stock, Shares Outstanding | 11,572,880 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 1,541,900 | $ 892,500 |
Accounts receivable, net | 271,200 | 210,800 |
Prepaid expenses and other current assets | 59,000 | 79,000 |
Total current assets | 1,872,100 | 1,182,300 |
Property and equipment, net | 400 | |
Other assets | 17,800 | 17,800 |
Total assets | 1,889,900 | 1,200,500 |
Current liabilities | ||
Accounts payable | 271,900 | 318,700 |
Accrued expenses | 106,000 | 121,600 |
Accrued wages | 136,400 | 145,800 |
Deposit liability | 12,100 | |
Deferred revenue | 1,256,000 | 1,300,300 |
Total current liabilities | 1,770,300 | 1,898,500 |
Long-term liabilities | ||
Deferred revenue | 529,500 | 491,500 |
Total liabilities | 2,299,800 | 2,390,000 |
Commitments and contingencies (Note 8) | ||
Stockholders' deficit | ||
Preferred stock, $0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding as of December 31, 2019 or 2018 | ||
Common stock, $0.0001 par value, 195,000,000 shares authorized, 9,834,866 and 9,804,400 shares issued and outstanding as of December 31, 2019 and 2018, respectively | 1,000 | 1,000 |
Additional paid-in capital | 79,523,500 | 79,298,200 |
Accumulated deficit | (79,934,400) | (80,488,700) |
Total stockholders' deficit | (409,900) | (1,189,500) |
Total liabilities and stockholders' deficit | $ 1,889,900 | $ 1,200,500 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
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 | 9,834,866 | 9,804,400 |
Common stock, shares outstanding | 9,834,866 | 9,804,400 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | ||
Total Revenue | $ 3,530,100 | $ 3,153,400 |
Cost of Revenue: | ||
Total cost of revenue | 149,800 | 145,800 |
Gross profit | 3,380,300 | 3,007,600 |
Operating expenses: | ||
Selling and marketing | 442,400 | 412,300 |
General and administrative | 864,700 | 1,236,900 |
Research and development | 1,533,000 | 1,518,700 |
Total operating expenses | 2,840,100 | 3,167,900 |
Income (loss) from operations | 540,200 | (160,300) |
Other income (expense): | ||
Other income (expense) | 14,100 | 129,800 |
Income (loss) before provision for income taxes | 554,300 | (30,500) |
Provision for income taxes | 900 | |
Net income (loss) | $ 554,300 | $ (31,400) |
Net income (loss) per share, basic | $ 0.06 | $ 0 |
Net income (loss) per share, diluted | $ 0.05 | $ 0 |
Weighted average number of common shares outstanding | ||
Basic | 9,821,177 | 10,150,867 |
Diluted | 10,287,183 | 10,150,867 |
Software License [Member] | ||
Revenues: | ||
Total Revenue | $ 952,600 | $ 812,900 |
Software Service Fees [Member] | ||
Revenues: | ||
Total Revenue | 2,483,600 | 2,240,300 |
Other [Member] | ||
Revenues: | ||
Total Revenue | 93,900 | 100,200 |
Software Service Costs [Member] | ||
Cost of Revenue: | ||
Total cost of revenue | 52,700 | 52,100 |
Software Product Costs [Member] | ||
Cost of Revenue: | ||
Total cost of revenue | $ 97,100 | $ 93,700 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Deficit) - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Dec. 31, 2017 | $ 1,000 | $ 78,539,300 | $ (81,849,200) | $ (3,308,900) |
Beginning balance, shares at Dec. 31, 2017 | 9,804,400 | |||
Cumulative effect from change of accounting policies | 1,391,900 | 1,391,900 | ||
Contributed services | 75,000 | 75,000 | ||
Issuance of warrants | 699,400 | 699,400 | ||
Payments for repurchase of warrants | (15,500) | (15,500) | ||
Net Income (loss) | (31,400) | (31,400) | ||
Ending balance at Dec. 31, 2018 | $ 1,000 | 79,298,200 | (80,488,700) | (1,189,500) |
Ending balance, shares at Dec. 31, 2018 | 9,804,400 | |||
Contributed services | 225,100 | 225,100 | ||
Exercise of warrants | 300 | 300 | ||
Exercise of warrants, shares | 30,466 | |||
Other rounding | (100) | (100) | ||
Net Income (loss) | 554,300 | 554,300 | ||
Ending balance at Dec. 31, 2019 | $ 1,000 | $ 79,523,500 | $ (79,934,400) | $ (409,900) |
Ending balance, shares at Dec. 31, 2019 | 9,834,866 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | ||
Net income (loss) | $ 554,300 | $ (31,400) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation | 400 | 29,700 |
Contributed services | 225,100 | 75,000 |
Changes in allowance for doubtful accounts | 3,700 | (4,200) |
Loss on disposal of property and equipment | 700 | |
Changes in deferred rent | (74,100) | |
Changes to liquidated damage on warrant liability | (155,700) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (64,100) | 220,200 |
Prepaid expenses and other current assets | 20,000 | 33,900 |
Accounts payable | (46,800) | 67,000 |
Accrued expenses | (15,600) | 13,900 |
Accrued wages | (9,400) | (129,900) |
Deposit liability | (12,100) | (81,400) |
Deferred revenue | (6,300) | (71,100) |
Net cash provided by (used in) operating activities | 649,200 | (107,400) |
Cash flows from financing activities | ||
Payments for repurchase of warrants | (15,500) | |
Proceeds from exercise of warrants | 300 | |
Other rounding | (100) | |
Net cash provided by (used in) financing activities | 200 | (15,500) |
Net change in cash and cash equivalents | 649,400 | (122,900) |
Cash and cash equivalents, beginning of the period | 892,500 | 1,015,400 |
Cash and cash equivalents, end of the period | 1,541,900 | 892,500 |
Supplemental disclosure of cash flow information: | ||
Interest paid | ||
Income taxes paid | 800 | |
Supplemental disclosure of non-cash investing and financing information: | ||
Reversal of accrual for liquidated damages | 855,100 | |
Issuance of warrants pursuant to reversal of accrual for liquidated damages | $ 699,400 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organization hopTo Inc., a Delaware corporation, and its subsidiaries (collectively, “we”, “us,” “our” or the “Company”) are developers of application publishing software which includes application virtualization software and cloud computing software for multiple computer operating systems including Windows, UNIX and several Linux-based variants. The Company sells a family of products under the brand name GO-Global, which is a software application publishing business and is the Company’s sole revenue source at this time. GO-Global is an application access solution for use and/or resale by independent software vendors, corporate enterprises, governmental and educational institutions, and others, who wish to take advantage of cross-platform remote access and Web-enabled access to their existing software applications, as well as those who are deploying secure, private cloud environments . |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of hopTo Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions are eliminated upon consolidation. The consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) applicable to financial information and the rules and regulations promulgated by the Securities and Exchange Commission (the “SEC”). Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. Amounts could materially change in the future. These estimates include: the amount of stock-based compensation expense; the allowance for doubtful accounts; the estimated lives of property of equipment, valuation and amortization of intangible assets (including capitalized software); depreciation of long-lived assets; valuation of warrants; post-employment benefits; and accruals for liabilities, deferred rent, and taxes. While the Company believes that such estimates are fair, actual results could differ materially from those estimates. Certain prior year information has been reclassified to conform to current year presentation. Liquidity The Company has incurred significant net losses since inception. As of December 31, 2019, we had an accumulated deficit of $79,934,400 and a working capital of $101,800, which includes deferred revenue of $1,256,000. Subsequent to December 31, 2019, we received gross proceeds of $480,191 from a rights offering to our stockholders (the “Rights Offering”) and expect to receive $2.12 million from the consummation of a private placement of common stock pursuant to a related backstop agreement (the “Backstop Agreement”). Our ability to continue to generate net income and positive cash flows from operations is dependent on our ability to continue to generate revenue from our legacy GO-Global business, which in turn is subject to a variety of risks. The Company believes its current cash balances coupled with anticipated cash flow from operating activities will be sufficient to meet its working capital requirements for at least one year from the date of the issuance of the accompanying financial statements. The Company continues to control its cash expenses as a percentage of expected revenue on an annual basis and thus may use its cash balances in the short-term to invest in revenue growth. Based on current internal projections, the Company believes it has and/or will generate sufficient cash for its operational needs, for at least one year from the date of issuance of the accompanying financial statements. Management is focused on growing the Company’s existing product offering, as well as its customer base, to increase its revenues. The Company cannot give assurance that it can increase its cash balances or limit its cash consumption and thus maintain sufficient cash balances for its planned operations or future acquisitions. Future business demands may lead to cash utilization at levels greater than recently experienced. The Company may need to raise additional capital in the future. However, the Company cannot assure that it will be able to raise additional capital on acceptable terms, or at all. Revenue Recognition The Company markets and licenses its products indirectly through channel distributors, independent software vendors (“ISVs”), value-added resellers (“VARs”) (collectively, “resellers”) and directly to hosting service providers, 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. There are no rights of return granted to purchasers of the Company’s software products. The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers.” Revenues under ASC 606 are recognized when the promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. The Company recorded $1,391,900 to opening accumulated deficit as of January 1, 2018 due to the cumulative impact of adopting ASC 606, with the impact primarily related to deferred license revenue associated with stocking orders placed in prior periods which had not been sold through to end users prior to January 1, 2018. Effective January 1, 2018, ASC 606, Revenue from Contracts with Customers, changed the recognition of revenue standards for reporting periods beginning after December 31, 2017. For the year ended December 31, 2018, revenue recognition was determined by ● identifying the contract, or contracts, with a customer; ● identifying the performance obligations in each contract; ● determine the transaction price; ● allocating the transaction price to the performance obligations in each contract; and ● recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services When control of the promised products and services are transferred to our customers, we recognize revenue in the amount that reflects the consideration we expect to receive in exchange for these products and services. Product Sales All of our licenses are delivered to the customer electronically. The Company sends the license key to the customer to download the related software from Company portal. We recognize revenue upon delivery of these licenses. For stocking resellers who purchase licenses through inventory stocking orders with the intent to resell to an end-user, revenue is recognized when the resellers’ accounts have been credited, at their discretion, for the number of licenses purchased. Maintenance revenue was also recognized from service contracts ratably over the related contract period. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (ASC 606). This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (ASC 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to reporting periods beginning after December 15, 2017, with early adoption permitted for reporting periods beginning after December 15, 2016. Subsequently, FASB issued ASUs in 2016 containing implementation guidance related to ASU 2014-09, including: ASU 2016-08, Revenue from Contracts with Customers (ASC 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations; ASU 2016-10, Revenue from Contracts with Customers (ASC 606): Identifying Performance Obligations and Licensing, which is intended to clarify two aspects of ASC 606: identifying performance obligations and the licensing implementation guidance; and ASU 2016-12, Revenue from Contracts with Customers (ASC 606): Narrow-Scope Improvements and Practical Expedients, which contains certain practical expedients in response to identified implementation issues. The Company elected to adopt ASC 606 under the Modified Retrospective approach. Under the Modified Retrospective approach, only contracts with customers for which there were remaining unsatisfied performance obligations (open contracts) at the beginning of initial year of adoption must be restated to apply retrospectively the guidance under ASC 606. Any resulting impact for such contracts prior to the beginning of the initial year of adoption are made as an adjustment to opening accumulated deficit for such year. On January 1, 2018, the Company adopted ASC 606 using the Modified Retrospective method. This method required retrospective application of the new accounting standard to those contracts which were not completed as of January 1, 2018. Results for the reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605. The change to the current revenue policy is the timing of revenue recognition for software licenses purchased by stocking resellers. Under the guidance ASC 605, the Company recognized revenue upon the delivery of licenses to end users when they were purchased from the stocking reseller. Under the guidance ASC 606, license revenue is recognized upon crediting of the licenses to the stocking resellers account for draw down at their discretion after placement of the stocking order by the stocking reseller. During the year ended December 31, 2018, this change in revenue policy resulted in lower license revenue of $231,300 and which had the same impact on gross profit, income (loss) from operations and net income (loss). The Company recorded $1,391,900 to opening accumulated deficit as of January 1, 2018 due to the cumulative impact of adopting ASC 606, with the impact primarily related to reversal of deferred license revenue associated with stocking orders placed in prior periods which had not been sold through to end users prior to January 1, 2018. The cumulative effect of the changes made to our condensed consolidated balance sheet as of January 1, 2018 under current assets, deferred revenue and accumulated deficit for the adoption ASU 2014-09, Revenue - Revenue from Contracts with Customers were as follows: Balance Sheet Balance at December 31, 2017 Adjustments Balance at Current Assets Deferred COGS $ — $ 20,000 $ 20,000 Liabilities and Stockholders’ Equity Accumulated Deficit, net of tax $ (81,849,200 ) $ 1,391,900 $ (80,457,300 ) Current Liabilities Deferred Revenue $ 1,845,100 $ (609,700 ) $ 1,235,400 Long Term Liabilities Deferred Revenue $ 1,409,700 $ (802,200 ) $ 607,500 All of the Company’s software licenses are denominated in U.S. dollars. As a result of the adoption of ASU NO. 2014-09, our 2018 revenues were subject to greater variability. The Company operates in one reportable segment. The Company’s product sales by geographic area are presented in Note 6. Cash and Cash Equivalents The Company considers all highly liquid holdings with maturities of three months or less at the time of purchase to be cash equivalents. The Company had no cash equivalents as of December 31, 2019 or 2018. 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. As of December 31, 2019 and 2018, the allowance for doubtful accounts totaled $7,300 and $3,600, respectively. 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. No such impairment charge was recorded during the three or nine months ended December 31, 2019 or 2018. Property and Equipment Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives ranging from three to seven years. Software Development Costs Under the criteria set forth in Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) 985-20, “Costs of Software to be Sold, Leased or Marketed,” Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentration of credit risk, consist principally of cash and trade receivables. The Company places its cash with high quality financial institutions and, by policy, limits the amount of credit exposure to any one financial institution. As of December 31, 2019, the Company had approximately $1,291,900 of cash with financial institutions in excess of FDIC insurance limits. For the years ended December 31, 2019 and 2018, we currently consider the following to be our most significant customers and partners. For the purposes of this table, “Sales” refers to the dollar value of orders received from these customers and partners in the period indicated. These Sales values do not necessarily equal recognized revenue for these periods due to our revenue recognition policies which require deferral of revenue associated with prepaid software service fees. 2019 2018 Customer % Sales % Accounts Receivable % Sales % Accounts Receivable Centric System 7.8 % 17.9 % 9.5 % 3.2 % Elosoft 8.9 % 8.1 % 10.4 % 32.1 % GE 6.5 % 0.6 % 3.9 % 15.4 % KitASP 14.0 % 3.0 % 6.2 % 1.7 % Thermo LabSystems 2.9 % 9.7 % 4.1 % 10.8 % Uniface 14.3 % 7.5 % 4.2 % 5.1 % Total 54.4 % 46.8 % 38.3 % 68.3 % Income Taxes The Company accounts for income taxes in accordance with ASC 740, “Income Taxes,” using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Basic and Diluted Earnings Per Share In accordance with ASC 260, “Earnings Per Share,” the basic income (loss) per common share is computed by dividing the net income (loss) available to common stockholders by the weighted average common shares outstanding during the period. Diluted income (loss) per share reflect per share amounts that would have resulted if diluted potential common stock had been converted to common stock. Dilutive common share equivalents as of December 31, 2019, representing 481,335 outstanding in-the-money warrants, were included in the computation of diluted net income (loss) per share using the Treasury Stock Method. During the year ended December 31, 2019 and 2018, the Company had total common stock equivalents of 106,077 and 353,231 shares, respectively, which excluded from the computation of net income per share because they are anti-dilutive. Comprehensive Income (Loss) FASB ASC 220-10, “Reporting Comprehensive Income,” Stock-Based Compensation The Company applies the fair value recognition provisions of FASB ASC 718-10, “ Compensation – Stock Compensation. Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses. The carrying amount of these financial instruments approximates fair value due to the nature of the accounts and their short-term maturities. The fair value of the Company’s warrants are determined in accordance with FASB 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. Recently Adopted Accounting Pronouncements Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842),” which requires lessees to recognize a right-of-use asset and a lease liability for most leases on the balance sheet as well as other qualitative and quantitative disclosures. ASU 2016-02 is to be applied using a modified retrospective method and was effective for the Company on January 1, 2019. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842),” which provides an optional transition method allowing entities to recognize a cumulative-effect adjustment to the opening balance of stockholders’ equity in the period of adoption, with no restatement of comparative prior periods required. The Company adopted the standard using this optional transition method. The Company also made an accounting policy to exclude leases with an initial term of 12 months or less from the balance sheet as permitted under the new guidance. The Company assessed the impact that the new lease recognition standard had on its consolidated financial statements. As of the adoption date of January 1, 2019, the Company had only one lease, which was for its office space it leases under a month-to-month arrangement for a monthly amount of $4,000, which can be cancelled at any time by either party with a six-month advance notice. As management has elected a policy to exclude leases with an initial term of 12 months of less from the balance sheet presentation required under Topic 842, the office lease has been excluded from balance sheet presentation as it has an original term of 12 months or less. The rent associated with the lease continues to be expensed as incurred. Rent expense for year ended December 31, 2019 and 2018, amounted to $48,000 and $48,000, respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 3. Property and Equipment Property and equipment as of December 31, 2019 and 2018 consisted of the following: December 31, 2019 December 31, 2018 Equipment $ 154,300 $ 154,300 Furniture and fixtures 1,600 1,600 155,900 155,900 Less: accumulated depreciation (155,900 ) (155,500 ) $ - $ 400 Depreciation expense for the years ended December 31, 2019 and 2018 was $400 and $29,700, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 4. Accrued Expenses Accrued expenses as of December 31, 2019 and 2018 consisted of the following: 2019 2018 Consulting services $ 2,000 $ 10,600 Board of director fees 85,600 85,600 Legal fees 6,400 - Rent - 8,000 Royalty fees - 5,400 Other 12,000 12,100 $ 106,000 $ 121,700 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 5. Stockholders’ Equity Stock-Based Compensation Plans In November 2012, the Company’s 2012 Equity Incentive Plan (the “12 Plan”) was approved by the stockholders. Pursuant to the terms of the 12 Plan, stock options, stock appreciation rights, restricted stock and restricted stock units (sometimes referred to individually or collectively as “awards”) may be granted to officers and other employees, non-employee directors and independent consultants and advisors who render services to the Company. The Company is authorized to issue options to purchase up to 643,797 shares of common stock, stock appreciation rights, or restricted stock in accordance with the terms of the 12 Plan. In the case of a restricted stock award, the entire number of shares subject to such award would be issued at the time of the grant and subject to vesting provisions based on time or other conditions specified by the Board or an authorized committee of the Board. For awards based on time, should the grantee’s service to the Company end before full vesting occurred, all unvested shares would be forfeited and returned to the Company. In the case of awards granted with vesting provisions based on specific performance conditions, if those conditions were not met, then all shares would be forfeited and returned to the Company. Until forfeited, all shares issued under a restricted stock award would be considered outstanding for dividend, voting and other purposes. Under the 12 Plan, the exercise price of non-qualified stock options granted is to be no less than 100% of the fair market value of the Company’s common stock on the date the option is granted. The exercise price of incentive stock options granted is to be no less than 100% of the fair market value of the Company’s common stock on the date the option is granted provided, however, that if the recipient of the incentive stock option owns greater than 10% of the voting power of all shares of the Company’s capital stock then the exercise price will be no less than 110% of the fair market value of the Company’s common stock on the date the option is granted. The purchase price of the restricted stock issued under the 12 Plan shall also not be less than 100% of the fair market value of the Company’s common stock on the date the restricted stock is granted. All options granted under the 12 Plan are immediately exercisable by the optionee; however, there is a vesting period for the options. The options (and the shares of common stock issuable upon exercise of such options) vest, ratably, over a 33-month period; however, no options (and the underlying shares of common stock) vest until after three months from the date of the option grant. The exercise price is immediately due upon exercise of the option. The maximum term of options issued under the 12 Plan is ten years. Shares issued upon exercise of options are subject to the Company’s repurchase, which right lapses as the shares vest. The 12 Plan will terminate no later than November 7, 2022. As of December 31, 2019, 411,593 shares of common stock remained available for issuance under the 12 Plan. The following table summarizes the stock option activity for the year ended December 31, 2019 and 2018. Weighted- Average Exercise Weighted- Average Remaining Contractual Life Options Price (Years) Outstanding at December 31, 2017 315,167 $ 2.46 Granted - Forfeited/cancelled (197,492 ) Outstanding at December 31, 2018 117,675 $ 2.57 Granted - Forfeited/cancelled (11,598 ) Exercised - Outstanding at December 31, 2019 106,077 $ 2.77 1.53 Vested and expected to vest at December 31, 2019 106,077 $ 2.77 1.53 Exercisable at December 31, 2019 106,077 $ 2.77 1.53 The following table summarizes information about stock options outstanding and exercisable as of December 31, 2019. Options Outstanding Options Exercisable Weighted- Weighted- Range of Average Average Average Exercise Number Remaining Exercise Number Exercise Price of Shares Life (Years) Price of Shares Price $ 0.75 - 1.00 27,527 0.56 $ 0.82 27,527 $ 0.82 1.79 - 4.00 63,684 1.87 3.21 63,684 3.21 4.20 - 6.68 14,866 1.90 4.46 14,866 4.46 106,077 106,077 Warrants During the year ended December 31, 2018, pursuant to a settlement agreement to issue warrants to purchase 564,556 shares of the Company’s Common stock, we derecognized the accrued liability for potential liquidated damages of $855,100 by crediting additional paid-in Capital for $699,400 and other income for $155,700. Following the issuance, the Company purchased back 52,755 shares from certain warrant holders. During the year ended December 31, 2019, the Company issued 30,466 shares of common stock for the exercise of warrants. As of December 31, 2019, and 2018, the Company had 481,335 and 622,912 warrants outstanding, respectively. The warrants outstanding at December 31, 2019 are all exercisable at $0.01 and have an expiration date of May 20, 2023. The following summarized changes in the number of warrants outstanding for the year ended December 31, 2019 and 2018. Warrants Outstanding at December 31, 2017 698,119 Granted 564,556 Repurchase (52,755 ) Forfeited/cancelled (587,008 ) Outstanding at December 31, 2018 622,912 Granted - Forfeited/cancelled (111,111 ) Exercised (30,466 ) Outstanding at December 31, 2019 481,335 |
Sales by Geographical Location
Sales by Geographical Location | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Sales by Geographical Location | 6. Sales by Geographical Location Revenue by country for the year ended December 31, 2019 and 2018 was as follows. For the Year Ended December 31, 2019 December 31, 2018 Revenue by Country United States $ 1,133,400 $ 1,188,500 Brazil 580,800 652,700 Japan 410,000 236,600 Germany 175,800 177,100 The Netherlands 445,100 144,800 Other Countries 785,000 753,700 Total $ 3,530,100 $ 3,153,400 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes The components of the provision (benefit) for income taxes for the years ended December 31, 2019 and 2018 consisted of the following: 2019 2018 Current Federal $ — $ — State — — Foreign — 900 $ — $ 900 Deferred Federal $ — $ — State — — Foreign — — — — Total $ — $ 900 The following table summarizes the differences between income tax expense and the amount computed applying the federal income tax rate of 21% for the years ended December 31, 2019 and 2018, respectively: 2019 2018 Federal income tax (benefit) at statutory rate $ 116,400 $ (6,600) State income tax (benefit) at statutory rate 13,900 (900) Foreign tax rate differential — 900 SBC – NQ cancellations (2,700 ) (83,900) Change in valuation allowance (284,900 ) (92,800) Meals and entertainment (50%) 1,000 700 Prior year true-up adjustments 103,400 165,300 Deferred compensation — 17,800 Contributed services 52,900 — Other items — 400 Provision (benefit) for income tax $ — $ 900 Deferred income taxes and benefits result from temporary timing differences in the recognition of certain expense and income items for tax and financial reporting purposes. The following table sets forth those differences as of December 31, 2019 and 2018: 2019 2018 Net operating loss carryforwards $ 13,702,300 $ 13,870,200 Tax credit carryforwards 977,500 977,500 Compensation expense – non-qualified stock options 69,000 166,800 Deferred revenue and maintenance service contracts 419,800 425,000 Depreciation, amortization, and capitalized software — 11,300 Reserves and other 58,200 52,400 Total deferred tax assets 15,226,800 15,503,100 Deferred tax liability – depreciation, amortization and capitalized software — — Net deferred tax asset 15,226,800 15,503,100 Valuation allowance (15,226,800 ) (15,503,100 ) Net deferred tax asset $ — $ — For financial reporting purposes, with the exception of the years ended December 31, 2019, the Company has incurred a loss in each year since inception. Based on the available objective evidence, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company has provided a full valuation allowance against its net deferred tax assets at December 31, 2019 and 2018. The net change in the valuation allowance was decreased by $276,000 and $139,000 for the years ended December 31, 2019 and 2018, respectively. At December 31, 2019, the Company had approximately $62.9 million of federal net operating loss carryforwards and approximately $6.9 million of California state net operating loss carryforwards available to reduce future taxable income. The federal loss carryforwards began to expire in 2019 and the California state loss carry forwards begin to expire in 2028. Under the Tax Reform Act of 1986, the amount of benefits from net operating loss carryforwards may be impaired or limited if the Company incurs a cumulative ownership change of more than 50%, as defined, over a three-year period. At December 31, 2019, the Company had approximately $0.9 million of federal research and development tax credits that began to expire in 2018. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Leases Our headquarters in Concord, NH is a month-to-month rent basis, requiring a six-month notice from the lessor to terminate. Rent on the corporate headquarters continues at $4,000 per month. Rent expense aggregated approximately $48,000 for both years ended December 31, 2019 and 2018. Contingencies Under its Amended and Restated Certificate of Incorporation and Second Amended and Restated Bylaws and certain agreements with officers and directors, the Company has agreed to indemnify its officers and directors for certain events or occurrences arising as a result of the officer’s or director’s serving in such capacity. Generally, the term of the indemnification period is for the officer’s or director’s lifetime. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is limited as the Company currently has a directors and officers liability insurance policy that limits its exposure and enables it to recover a portion of any future amounts paid. The Company believes the estimated fair value of these indemnification agreements is minimal and has no liabilities recorded for these agreements as of December 31, 2019. The Company enters into indemnification provisions under (i) its agreements with other companies in its ordinary course of business, including contractors and customers and (ii) its agreements with investors. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities or, in some cases, as a result of the indemnified party’s activities under the agreement. These indemnification provisions often include indemnifications relating to representations made by the Company with regard to intellectual property rights, and often survive termination of the underlying agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated fair value of these agreements is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2019. The Company’s software license agreements also generally include a performance guarantee that the Company’s software products will operate substantially as described in the applicable program documentation for a period of 90 days after delivery. The Company also generally warrants that services that the Company performs will be provided in a manner consistent with reasonably applicable industry standards. To date, the Company has not incurred any material costs associated with these warranties and has no liabilities recorded for these agreements as of December 31, 2019. Profit Sharing Plans The Company has adopted a 401(k) plan to provide retirement benefits for employees under which the Company makes discretionary matching contributions. During the years ended December 31, 2019 and 2018, the Company contributed a total of $14,100 and $17,400, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9. Related Party Transactions On December 28, 2018, the Company entered into an agreement with an unaffiliated stockholder of the Company to acquire 450,000 shares of the Company’s common stock and warrants to purchase an aggregate of 48,896 shares of the Company’s common stock for an aggregate cash consideration of $149,700. The Company agreed to assign its right to purchase 450,000 shares of common stock under the purchase agreement to a member of the Company’s board of directors and an entity controlled by a member of the Company’s board of directors and an executive officer at the company named Novelty Capital Partners LP. A member of our board of directors controls an entity named Novelty Capital Partners LP that is a significant shareholder in the Company and also serves as the Chief Executive Officer and Interim Chief Financial Officer of the Company. The related party has served in these executive roles providing management services to the Company since September 4, 2018; however, does not receive salary or other forms of cash compensation. Management has estimated the market rate for the services rendered for the years ended December 31, 2019 and 2018 as $225,100 and $75,000, respectively. The services have been recorded in the financial statements as a capital contribution. On January 31, 2020, we entered into the Backstop Agreement with a consortium of accredited investors, including all of our directors and led by Novelty Capital Partners LP, pursuant to which such investors agreed to purchase in a private placement, at $0.30 per share, up to $2.41 million of shares of our common stock. The consummation of the investment pursuant to the Backstop Agreement was conditioned on the closing of the Rights Offering. The Rights Offering expired on March 31, 2020. While upon the closing of the Rights Offering, we anticipated that the Backstop Agreement would close by April 14, 2020, as of the filing of this Annual Report on Form 10-K the Backstop Agreement has not closed and we now expect to consummate the Backstop Agreement transactions by the end of April 2020. At the closing of the Rights Offering, we received gross proceeds of $480,191 in exchange for 1.6 million shares of common stock. Pursuant to the Backstop Agreement, we expect to receive proceeds of $2.12 million in exchange for the issuance of 7.0 million restricted shares of common stock. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10. Subsequent Events See Note 9 above regarding the Rights Offering and Backstop Agreement. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of hopTo Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions are eliminated upon consolidation. The consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) applicable to financial information and the rules and regulations promulgated by the Securities and Exchange Commission (the “SEC”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. Amounts could materially change in the future. These estimates include: the amount of stock-based compensation expense; the allowance for doubtful accounts; the estimated lives of property of equipment, valuation and amortization of intangible assets (including capitalized software); depreciation of long-lived assets; valuation of warrants; post-employment benefits; and accruals for liabilities, deferred rent, and taxes. While the Company believes that such estimates are fair, actual results could differ materially from those estimates. Certain prior year information has been reclassified to conform to current year presentation. |
Liquidity | Liquidity The Company has incurred significant net losses since inception. As of December 31, 2019, we had an accumulated deficit of $79,934,400 and a working capital of $101,800, which includes deferred revenue of $1,256,000. Subsequent to December 31, 2019, we received gross proceeds of $480,191 from a rights offering to our stockholders (the “Rights Offering”) and expect to receive $2.12 million from the consummation of a private placement of common stock pursuant to a related backstop agreement (the “Backstop Agreement”). Our ability to continue to generate net income and positive cash flows from operations is dependent on our ability to continue to generate revenue from our legacy GO-Global business, which in turn is subject to a variety of risks. The Company believes its current cash balances coupled with anticipated cash flow from operating activities will be sufficient to meet its working capital requirements for at least one year from the date of the issuance of the accompanying financial statements. The Company continues to control its cash expenses as a percentage of expected revenue on an annual basis and thus may use its cash balances in the short-term to invest in revenue growth. Based on current internal projections, the Company believes it has and/or will generate sufficient cash for its operational needs, for at least one year from the date of issuance of the accompanying financial statements. Management is focused on growing the Company’s existing product offering, as well as its customer base, to increase its revenues. The Company cannot give assurance that it can increase its cash balances or limit its cash consumption and thus maintain sufficient cash balances for its planned operations or future acquisitions. Future business demands may lead to cash utilization at levels greater than recently experienced. The Company may need to raise additional capital in the future. However, the Company cannot assure that it will be able to raise additional capital on acceptable terms, or at all. |
Revenue Recognition | Revenue Recognition The Company markets and licenses its products indirectly through channel distributors, independent software vendors (“ISVs”), value-added resellers (“VARs”) (collectively, “resellers”) and directly to hosting service providers, 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. There are no rights of return granted to purchasers of the Company’s software products. The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers.” Revenues under ASC 606 are recognized when the promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. The Company recorded $1,391,900 to opening accumulated deficit as of January 1, 2018 due to the cumulative impact of adopting ASC 606, with the impact primarily related to deferred license revenue associated with stocking orders placed in prior periods which had not been sold through to end users prior to January 1, 2018. Effective January 1, 2018, ASC 606, Revenue from Contracts with Customers, changed the recognition of revenue standards for reporting periods beginning after December 31, 2017. For the year ended December 31, 2018, revenue recognition was determined by ● identifying the contract, or contracts, with a customer; ● identifying the performance obligations in each contract; ● determine the transaction price; ● allocating the transaction price to the performance obligations in each contract; and ● recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services When control of the promised products and services are transferred to our customers, we recognize revenue in the amount that reflects the consideration we expect to receive in exchange for these products and services. Product Sales All of our licenses are delivered to the customer electronically. The Company sends the license key to the customer to download the related software from Company portal. We recognize revenue upon delivery of these licenses. For stocking resellers who purchase licenses through inventory stocking orders with the intent to resell to an end-user, revenue is recognized when the resellers’ accounts have been credited, at their discretion, for the number of licenses purchased. Maintenance revenue was also recognized from service contracts ratably over the related contract period. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (ASC 606). This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (ASC 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to reporting periods beginning after December 15, 2017, with early adoption permitted for reporting periods beginning after December 15, 2016. Subsequently, FASB issued ASUs in 2016 containing implementation guidance related to ASU 2014-09, including: ASU 2016-08, Revenue from Contracts with Customers (ASC 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations; ASU 2016-10, Revenue from Contracts with Customers (ASC 606): Identifying Performance Obligations and Licensing, which is intended to clarify two aspects of ASC 606: identifying performance obligations and the licensing implementation guidance; and ASU 2016-12, Revenue from Contracts with Customers (ASC 606): Narrow-Scope Improvements and Practical Expedients, which contains certain practical expedients in response to identified implementation issues. The Company elected to adopt ASC 606 under the Modified Retrospective approach. Under the Modified Retrospective approach, only contracts with customers for which there were remaining unsatisfied performance obligations (open contracts) at the beginning of initial year of adoption must be restated to apply retrospectively the guidance under ASC 606. Any resulting impact for such contracts prior to the beginning of the initial year of adoption are made as an adjustment to opening accumulated deficit for such year. On January 1, 2018, the Company adopted ASC 606 using the Modified Retrospective method. This method required retrospective application of the new accounting standard to those contracts which were not completed as of January 1, 2018. Results for the reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605. The change to the current revenue policy is the timing of revenue recognition for software licenses purchased by stocking resellers. Under the guidance ASC 605, the Company recognized revenue upon the delivery of licenses to end users when they were purchased from the stocking reseller. Under the guidance ASC 606, license revenue is recognized upon crediting of the licenses to the stocking resellers account for draw down at their discretion after placement of the stocking order by the stocking reseller. During the year ended December 31, 2018, this change in revenue policy resulted in lower license revenue of $231,300 and which had the same impact on gross profit, income (loss) from operations and net income (loss). The Company recorded $1,391,900 to opening accumulated deficit as of January 1, 2018 due to the cumulative impact of adopting ASC 606, with the impact primarily related to reversal of deferred license revenue associated with stocking orders placed in prior periods which had not been sold through to end users prior to January 1, 2018. The cumulative effect of the changes made to our condensed consolidated balance sheet as of January 1, 2018 under current assets, deferred revenue and accumulated deficit for the adoption ASU 2014-09, Revenue - Revenue from Contracts with Customers were as follows: Balance Sheet Balance at December 31, 2017 Adjustments Balance at Current Assets Deferred COGS $ — $ 20,000 $ 20,000 Liabilities and Stockholders’ Equity Accumulated Deficit, net of tax $ (81,849,200 ) $ 1,391,900 $ (80,457,300 ) Current Liabilities Deferred Revenue $ 1,845,100 $ (609,700 ) $ 1,235,400 Long Term Liabilities Deferred Revenue $ 1,409,700 $ (802,200 ) $ 607,500 All of the Company’s software licenses are denominated in U.S. dollars. As a result of the adoption of ASU NO. 2014-09, our 2018 revenues were subject to greater variability. The Company operates in one reportable segment. The Company’s product sales by geographic area are presented in Note 6. |
Cash and Cash equivalents | Cash and Cash Equivalents The Company considers all highly liquid holdings with maturities of three months or less at the time of purchase to be cash equivalents. The Company had no cash equivalents as of December 31, 2019 or 2018. |
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. As of December 31, 2019 and 2018, the allowance for doubtful accounts totaled $7,300 and $3,600, respectively. |
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. No such impairment charge was recorded during the three or nine months ended December 31, 2019 or 2018. |
Property and Equipment | Property and Equipment Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives ranging from three to seven years. |
Software Development Costs | Software Development Costs Under the criteria set forth in Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) 985-20, “Costs of Software to be Sold, Leased or Marketed,” |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentration of credit risk, consist principally of cash and trade receivables. The Company places its cash with high quality financial institutions and, by policy, limits the amount of credit exposure to any one financial institution. As of December 31, 2019, the Company had approximately $1,291,900 of cash with financial institutions in excess of FDIC insurance limits. For the years ended December 31, 2019 and 2018, we currently consider the following to be our most significant customers and partners. For the purposes of this table, “Sales” refers to the dollar value of orders received from these customers and partners in the period indicated. These Sales values do not necessarily equal recognized revenue for these periods due to our revenue recognition policies which require deferral of revenue associated with prepaid software service fees. 2019 2018 Customer % Sales % Accounts Receivable % Sales % Accounts Receivable Centric System 7.8 % 17.9 % 9.5 % 3.2 % Elosoft 8.9 % 8.1 % 10.4 % 32.1 % GE 6.5 % 0.6 % 3.9 % 15.4 % KitASP 14.0 % 3.0 % 6.2 % 1.7 % Thermo LabSystems 2.9 % 9.7 % 4.1 % 10.8 % Uniface 14.3 % 7.5 % 4.2 % 5.1 % Total 54.4 % 46.8 % 38.3 % 68.3 % |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740, “Income Taxes,” using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. |
Basic and Diluted Earnings Per Share | Basic and Diluted Earnings Per Share In accordance with ASC 260, “Earnings Per Share,” the basic income (loss) per common share is computed by dividing the net income (loss) available to common stockholders by the weighted average common shares outstanding during the period. Diluted income (loss) per share reflect per share amounts that would have resulted if diluted potential common stock had been converted to common stock. Dilutive common share equivalents as of December 31, 2019, representing 481,335 outstanding in-the-money warrants, were included in the computation of diluted net income (loss) per share using the Treasury Stock Method. During the year ended December 31, 2019 and 2018, the Company had total common stock equivalents of 106,077 and 353,231 shares, respectively, which excluded from the computation of net income per share because they are anti-dilutive. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) FASB ASC 220-10, “Reporting Comprehensive Income,” |
Stock-Based Compensation | Stock-Based Compensation The Company applies the fair value recognition provisions of FASB ASC 718-10, “ Compensation – Stock Compensation. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses. The carrying amount of these financial instruments approximates fair value due to the nature of the accounts and their short-term maturities. The fair value of the Company’s warrants are determined in accordance with FASB 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. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842),” which requires lessees to recognize a right-of-use asset and a lease liability for most leases on the balance sheet as well as other qualitative and quantitative disclosures. ASU 2016-02 is to be applied using a modified retrospective method and was effective for the Company on January 1, 2019. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842),” which provides an optional transition method allowing entities to recognize a cumulative-effect adjustment to the opening balance of stockholders’ equity in the period of adoption, with no restatement of comparative prior periods required. The Company adopted the standard using this optional transition method. The Company also made an accounting policy to exclude leases with an initial term of 12 months or less from the balance sheet as permitted under the new guidance. The Company assessed the impact that the new lease recognition standard had on its consolidated financial statements. As of the adoption date of January 1, 2019, the Company had only one lease, which was for its office space it leases under a month-to-month arrangement for a monthly amount of $4,000, which can be cancelled at any time by either party with a six-month advance notice. As management has elected a policy to exclude leases with an initial term of 12 months of less from the balance sheet presentation required under Topic 842, the office lease has been excluded from balance sheet presentation as it has an original term of 12 months or less. The rent associated with the lease continues to be expensed as incurred. Rent expense for year ended December 31, 2019 and 2018, amounted to $48,000 and $48,000, respectively. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Deferred Revenue and Accumulated Deficit | The cumulative effect of the changes made to our condensed consolidated balance sheet as of January 1, 2018 under current assets, deferred revenue and accumulated deficit for the adoption ASU 2014-09, Revenue - Revenue from Contracts with Customers were as follows: Balance Sheet Balance at December 31, 2017 Adjustments Balance at Current Assets Deferred COGS $ — $ 20,000 $ 20,000 Liabilities and Stockholders’ Equity Accumulated Deficit, net of tax $ (81,849,200 ) $ 1,391,900 $ (80,457,300 ) Current Liabilities Deferred Revenue $ 1,845,100 $ (609,700 ) $ 1,235,400 Long Term Liabilities Deferred Revenue $ 1,409,700 $ (802,200 ) $ 607,500 |
Schedules of Concentration of Risk, by Risk Factor | These Sales values do not necessarily equal recognized revenue for these periods due to our revenue recognition policies which require deferral of revenue associated with prepaid software service fees. 2019 2018 Customer % Sales % Accounts Receivable % Sales % Accounts Receivable Centric System 7.8 % 17.9 % 9.5 % 3.2 % Elosoft 8.9 % 8.1 % 10.4 % 32.1 % GE 6.5 % 0.6 % 3.9 % 15.4 % KitASP 14.0 % 3.0 % 6.2 % 1.7 % Thermo LabSystems 2.9 % 9.7 % 4.1 % 10.8 % Uniface 14.3 % 7.5 % 4.2 % 5.1 % Total 54.4 % 46.8 % 38.3 % 68.3 % |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment as of December 31, 2019 and 2018 consisted of the following: December 31, 2019 December 31, 2018 Equipment $ 154,300 $ 154,300 Furniture and fixtures 1,600 1,600 155,900 155,900 Less: accumulated depreciation (155,900 ) (155,500 ) $ - $ 400 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses as of December 31, 2019 and 2018 consisted of the following: 2019 2018 Consulting services $ 2,000 $ 10,600 Board of director fees 85,600 85,600 Legal fees 6,400 - Rent - 8,000 Royalty fees - 5,400 Other 12,000 12,100 $ 106,000 $ 121,700 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes the stock option activity for the year ended December 31, 2019 and 2018. Weighted- Average Exercise Weighted- Average Remaining Contractual Life Options Price (Years) Outstanding at December 31, 2017 315,167 $ 2.46 Granted - Forfeited/cancelled (197,492 ) Outstanding at December 31, 2018 117,675 $ 2.57 Granted - Forfeited/cancelled (11,598 ) Exercised - Outstanding at December 31, 2019 106,077 $ 2.77 1.53 Vested and expected to vest at December 31, 2019 106,077 $ 2.77 1.53 Exercisable at December 31, 2019 106,077 $ 2.77 1.53 |
Schedule of Share-based Compensation, Shares Authorized Under Stock Option Plans, by Exercise Price Range | The following table summarizes information about stock options outstanding and exercisable as of December 31, 2019. Options Outstanding Options Exercisable Weighted- Weighted- Range of Average Average Average Exercise Number Remaining Exercise Number Exercise Price of Shares Life (Years) Price of Shares Price $ 0.75 - 1.00 27,527 0.56 $ 0.82 27,527 $ 0.82 1.79 - 4.00 63,684 1.87 3.21 63,684 3.21 4.20 - 6.68 14,866 1.90 4.46 14,866 4.46 106,077 106,077 |
Schedule of Warrants Outstanding | The following summarized changes in the number of warrants outstanding for the year ended December 31, 2019 and 2018. Warrants Outstanding at December 31, 2017 698,119 Granted 564,556 Repurchase (52,755 ) Forfeited/cancelled (587,008 ) Outstanding at December 31, 2018 622,912 Granted - Forfeited/cancelled (111,111 ) Exercised (30,466 ) Outstanding at December 31, 2019 481,335 |
Sales by Geographical Location
Sales by Geographical Location (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Country | Revenue by country for the year ended December 31, 2019 and 2018 was as follows. For the Year Ended December 31, 2019 December 31, 2018 Revenue by Country United States $ 1,133,400 $ 1,188,500 Brazil 580,800 652,700 Japan 410,000 236,600 Germany 175,800 177,100 The Netherlands 445,100 144,800 Other Countries 785,000 753,700 Total $ 3,530,100 $ 3,153,400 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of the provision (benefit) for income taxes for the years ended December 31, 2019 and 2018 consisted of the following: 2019 2018 Current Federal $ — $ — State — — Foreign — 900 $ — $ 900 Deferred Federal $ — $ — State — — Foreign — — — — Total $ — $ 900 |
Schedule of Effective Income Tax Rate Reconciliation | The following table summarizes the differences between income tax expense and the amount computed applying the federal income tax rate of 21% for the years ended December 31, 2019 and 2018, respectively: 2019 2018 Federal income tax (benefit) at statutory rate $ 116,400 $ (6,600) State income tax (benefit) at statutory rate 13,900 (900) Foreign tax rate differential — 900 SBC – NQ cancellations (2,700 ) (83,900) Change in valuation allowance (284,900 ) (92,800) Meals and entertainment (50%) 1,000 700 Prior year true-up adjustments 103,400 165,300 Deferred compensation — 17,800 Contributed services 52,900 — Other items — 400 Provision (benefit) for income tax $ — $ 900 |
Schedule of Deferred Tax Assets and Liabilities | The following table sets forth those differences as of December 31, 2019 and 2018: 2019 2018 Net operating loss carryforwards $ 13,702,300 $ 13,870,200 Tax credit carryforwards 977,500 977,500 Compensation expense – non-qualified stock options 69,000 166,800 Deferred revenue and maintenance service contracts 419,800 425,000 Depreciation, amortization, and capitalized software — 11,300 Reserves and other 58,200 52,400 Total deferred tax assets 15,226,800 15,503,100 Deferred tax liability – depreciation, amortization and capitalized software — — Net deferred tax asset 15,226,800 15,503,100 Valuation allowance (15,226,800 ) (15,503,100 ) Net deferred tax asset $ — $ — |
Significant Accounting Polici_4
Significant Accounting Policies (Details Narrative) - USD ($) | Jan. 31, 2020 | Jan. 02, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 02, 2018 | Dec. 31, 2017 |
Accumulated deficit | $ (79,934,400) | $ (80,488,700) | $ 1,391,900 | $ (81,849,200) | ||
Working capital deficit | 101,800 | |||||
Deferred revenue | 1,256,000 | 1,300,300 | $ 1,845,100 | |||
License revenue | 231,300 | |||||
Cash equivalents | ||||||
Allowance for doubtful accounts | 7,300 | $ 3,600 | ||||
Cash, FDIC insured amount | $ 1,291,900 | |||||
Number of common shares equivalents of outstanding in money warrants | 481,335 | |||||
Shares of common stock equivalents were excluded from the computation of diluted earnings per share since its effect would be antidilutive | 106,077 | 353,231 | ||||
Rent expense | $ 4,000 | $ 48,000 | $ 48,000 | |||
Minimum [Member] | ||||||
Property, plant and equipment, useful life | 3 years | |||||
Maximum [Member] | ||||||
Property, plant and equipment, useful life | 7 years | |||||
Subsequent Event [Member] | Rights Offering [Member] | ||||||
Proceeds from offering | $ 480,191 | |||||
Subsequent Event [Member] | Backstop Agreement [Member] | ||||||
Proceeds from private placement | $ 21,200,000 |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Deferred Revenue and Accumulated Deficit (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 02, 2018 | Dec. 31, 2017 |
Current Assets: Deferred COGS | ||||
Liabilities and Stockholders' Equity: Accumulated Deficit, net of tax | $ (79,934,400) | $ (80,488,700) | $ 1,391,900 | (81,849,200) |
Current Liabilities: Deferred Revenue | 1,256,000 | 1,300,300 | 1,845,100 | |
Long Term Liabilities: Deferred Revenue | 529,500 | $ 491,500 | $ 1,409,700 | |
Adjustments due to ASC 606 [Member] | ||||
Current Assets: Deferred COGS | 20,000 | |||
Liabilities and Stockholders' Equity: Accumulated Deficit, net of tax | 1,391,900 | |||
Current Liabilities: Deferred Revenue | (609,700) | |||
Long Term Liabilities: Deferred Revenue | (802,200) | |||
January 1, 2018 [Member] | ||||
Current Assets: Deferred COGS | 20,000 | |||
Liabilities and Stockholders' Equity: Accumulated Deficit, net of tax | (80,457,300) | |||
Current Liabilities: Deferred Revenue | 1,235,400 | |||
Long Term Liabilities: Deferred Revenue | $ 607,500 |
Significant Accounting Polici_6
Significant Accounting Policies - Schedules of Concentration of Risk, by Risk Factor (Details) - Customer Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Sales Revenue, Net [Member] | ||
Concentration of Credit Risk | 54.40% | 38.30% |
Sales Revenue, Net [Member] | Centric Systems [Member] | ||
Concentration of Credit Risk | 7.80% | 9.50% |
Sales Revenue, Net [Member] | Elosoft [Member] | ||
Concentration of Credit Risk | 8.90% | 10.40% |
Sales Revenue, Net [Member] | GE [Member] | ||
Concentration of Credit Risk | 6.50% | 3.90% |
Sales Revenue, Net [Member] | KitASP [Member] | ||
Concentration of Credit Risk | 14.00% | 6.20% |
Sales Revenue, Net [Member] | Thermo Lab Systems [Member] | ||
Concentration of Credit Risk | 2.90% | 4.10% |
Sales Revenue, Net [Member] | Uniface [Member] | ||
Concentration of Credit Risk | 14.30% | 4.20% |
Accounts Receivable [Member] | ||
Concentration of Credit Risk | 46.80% | 68.30% |
Accounts Receivable [Member] | Centric Systems [Member] | ||
Concentration of Credit Risk | 17.90% | 3.20% |
Accounts Receivable [Member] | Elosoft [Member] | ||
Concentration of Credit Risk | 8.10% | 32.10% |
Accounts Receivable [Member] | GE [Member] | ||
Concentration of Credit Risk | 0.60% | 15.40% |
Accounts Receivable [Member] | KitASP [Member] | ||
Concentration of Credit Risk | 3.00% | 1.70% |
Accounts Receivable [Member] | Thermo Lab Systems [Member] | ||
Concentration of Credit Risk | 9.70% | 10.80% |
Accounts Receivable [Member] | Uniface [Member] | ||
Concentration of Credit Risk | 7.50% | 5.10% |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 400 | $ 29,700 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Property and equipment gross | $ 155,900 | $ 155,900 |
Less: accumulated depreciation and amortization | (155,900) | (155,500) |
Property and equipment net | 400 | |
Equipment [Member] | ||
Property and equipment gross | 154,300 | 154,300 |
Furniture and Fixtures [Member] | ||
Property and equipment gross | $ 1,600 | $ 1,600 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Consulting services | $ 2,000 | $ 10,600 |
Board of director fees | 85,600 | 85,600 |
Legal fees | 6,400 | |
Rent | 8,000 | |
Royalty fees | 5,400 | |
Other | 12,000 | 12,100 |
Accrued expenses | $ 106,000 | $ 121,600 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Note 9 - Stockholders' Equity (Details) [Line Items] | ||
Number of common stock issued for exercise of warrants | 30,466 | 564,556 |
Accrued liability for potential liquidated damages | $ 855,100 | |
Number of warrants purchased back, shares | 52,755 | |
Warrants outstanding | 481,335 | 622,912 |
Warrants outstanding exercisable price | $ 0.01 | |
Warrants expiration date | May 20, 2023 | |
Crediting Additional Paid-in-Capital [Member] | ||
Note 9 - Stockholders' Equity (Details) [Line Items] | ||
Accrued liability for potential liquidated damages | $ 699,400 | |
Crediting Other Income [Member] | ||
Note 9 - Stockholders' Equity (Details) [Line Items] | ||
Accrued liability for potential liquidated damages | $ 155,700 | |
2012 Equity Incentive Plan [Member] | ||
Note 9 - Stockholders' Equity (Details) [Line Items] | ||
Share-based compensation arrangement by share-based payment award, number of shares authorized | 643,797 | |
Plan terminate term | The 12 Plan will terminate no later than November 7, 2022. | |
Share-based compensation arrangement by share-based payment award, number of shares available for grant | 411,593 | |
2012 Equity Incentive Plan [Member] | Non Qualified Stock Options [Member] | Minimum [Member] | ||
Note 9 - Stockholders' Equity (Details) [Line Items] | ||
Share-based compensation arrangement by share-based payment award, purchase price of common stock, percent | 100.00% | |
2012 Equity Incentive Plan [Member] | Incentive Stock Options [Member] | Minimum [Member] | ||
Note 9 - Stockholders' Equity (Details) [Line Items] | ||
Share-based compensation arrangement by share-based payment award, purchase price of common stock, percent | 10.00% | |
2012 Equity Incentive Plan [Member] | Incentive Stock Options [Member] | Minimum [Member] | If Recipient Owns Greater Than Ten Percent Voting Power [Member] | ||
Note 9 - Stockholders' Equity (Details) [Line Items] | ||
Share-based compensation arrangement by share-based payment award, purchase price of common stock, percent | 110.00% | |
2012 Equity Incentive Plan [Member] | Restricted Stock [Member] | Minimum [Member] | ||
Note 9 - Stockholders' Equity (Details) [Line Items] | ||
Share-based compensation arrangement by share-based payment award, purchase price of common stock, percent | 100.00% |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Share-based Compensation, Stock Options, Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||
Options Outstanding, Beginning Balance | 117,675 | 315,167 |
Options Outstanding, Granted | ||
Options Outstanding, Forfeited/cancelled | (11,598) | (197,492) |
Options Outstanding, Exercised | ||
Options Outstanding, Ending Balance | 106,077 | 117,675 |
Options Outstanding, Vested and expected to vest at December 31, 2019 | 106,077 | |
Options Exercisable at December 31, 2019 | 106,077 | |
Weighted Average Exercise Price, Outstanding Beginning Balance | $ 2.57 | $ 2.46 |
Weighted Average Exercise Price, Granted | ||
Weighted Average Exercise Price, Forfeited or expired | ||
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Outstanding Ending Balance | 2.77 | $ 2.57 |
Weighted Average Exercise Price, Vested and expected to vest at December 31, 2019 | 2.77 | |
Weighted Average Exercise Price, Exercisable at December 31, 2019 | $ 2.77 | |
Weighted Average Remaining Contractual Life (Years) Outstanding, Beginning Balance | 0 years | |
Weighted Average Remaining Contractual Life (Years) Outstanding, Ending Balance | 1 year 6 months 10 days | 0 years |
Weighted Average Remaining Contractual Life (Years), Vested and expected to vest at December 31, 2019 | 1 year 6 months 10 days | |
Weighted Average Remaining Contractual Life (Years) Exercisable, Ending Balance | 1 year 6 months 10 days |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Share-based Compensation, Shares Authorized Under Stock Option Plans, by Exercise Price Range (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Options Outstanding, Number of shares | 106,077 | 117,675 | 315,167 |
Options Outstanding, Weighted Average Remaining Contractual Life (Years) | 0 years | ||
Options Exercisable, Number of shares | 106,077 | ||
Options Exercisable, Weighted Average Exercise Price | $ 2.77 | ||
Exercise Price Range 1 [Member] | |||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Exercise Price Range, Lower Range Limit | 0.75 | ||
Exercise Price Range, Upper Range Limit | $ 1 | ||
Options Outstanding, Number of shares | 27,527 | ||
Options Outstanding, Weighted Average Remaining Contractual Life (Years) | 6 months 21 days | ||
Options Outstanding, Weighted Average Exercise Price | $ 0.82 | ||
Options Exercisable, Number of shares | 27,527 | ||
Options Exercisable, Weighted Average Exercise Price | $ 0.82 | ||
Exercise Price Range 2 [Member] | |||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Exercise Price Range, Lower Range Limit | 1.79 | ||
Exercise Price Range, Upper Range Limit | $ 4 | ||
Options Outstanding, Number of shares | 63,684 | ||
Options Outstanding, Weighted Average Remaining Contractual Life (Years) | 1 year 10 months 14 days | ||
Options Outstanding, Weighted Average Exercise Price | $ 3.21 | ||
Options Exercisable, Number of shares | 63,684 | ||
Options Exercisable, Weighted Average Exercise Price | $ 3.21 | ||
Exercise Price Range 3 [Member] | |||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |||
Exercise Price Range, Lower Range Limit | 4.20 | ||
Exercise Price Range, Upper Range Limit | $ 6.68 | ||
Options Outstanding, Number of shares | 14,866 | ||
Options Outstanding, Weighted Average Remaining Contractual Life (Years) | 1 year 10 months 25 days | ||
Options Outstanding, Weighted Average Exercise Price | $ 4.46 | ||
Options Exercisable, Number of shares | 14,866 | ||
Options Exercisable, Weighted Average Exercise Price | $ 4.46 |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Warrants Outstanding (Details) - Warrant [Member] - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares Subject to Warrants, Outstanding, beginning balance | 622,912 | 698,119 |
Number of Shares Subject to Warrants Outstanding, Granted | 564,556 | |
Number of Shares Subject to Warrants Outstanding, Repurchase | (52,755) | |
Number of Shares Subject to Warrants Outstanding, Exercised | (30,466) | |
Number of Shares Subject to Warrants Outstanding, Forfeited/cancelled | (111,111) | (587,008) |
Number of Shares Subject to Warrants, Outstanding, ending balance | 481,335 | 622,912 |
Sales by Geographical Locatio_2
Sales by Geographical Location - Schedule of Revenue by Country (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue by country | $ 3,530,100 | $ 3,153,400 |
United States [Member] | ||
Revenue by country | 1,133,400 | 1,188,500 |
Brazil [Member] | ||
Revenue by country | 580,800 | 652,700 |
Japan [Member] | ||
Revenue by country | 410,000 | 236,600 |
Germany [Member] | ||
Revenue by country | 175,800 | 177,100 |
The Netherlands [Member] | ||
Revenue by country | 445,100 | 144,800 |
Other Countries [Member] | ||
Revenue by country | $ 785,000 | $ 753,700 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Note 10 - Income Taxes (Details) [Line Items] | ||
Federal income tax rate | 21.00% | 21.00% |
Valuation allowance, deferred tax asset, increase (decrease), amount | $ 276,000 | $ 139,000 |
Percentage of cumulative ownership | 50.00% | |
Domestic Tax Authority [Member] | Research Tax Credit Carryforward [Member] | ||
Note 10 - Income Taxes (Details) [Line Items] | ||
Operating loss expiration date | Expire in 2018 | |
Tax credit carryforward, amount | $ 900,000 | |
Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member] | ||
Note 10 - Income Taxes (Details) [Line Items] | ||
Operating loss carryforwards | $ 62,900,000 | |
Operating loss expiration date | Expire in 2019 | |
State and Local Jurisdiction [Member] | California Franchise Tax Board [Member] | ||
Note 10 - Income Taxes (Details) [Line Items] | ||
Operating loss carryforwards | $ 6,900,000 | |
Operating loss expiration date | Expire in 2028 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Federal | ||
State | ||
Foreign | 900 | |
Current income tax expense | 900 | |
Federal | ||
State | ||
Foreign | ||
Deferred income tax expense | ||
Provision (benefit) for income tax | $ 900 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax (benefit) at statutory rate | $ 116,400 | $ (6,600) |
State income tax (benefit) at statutory rate | 13,900 | (900) |
Foreign tax rate differential | 900 | |
SBC - NQ cancellations | (2,700) | (83,900) |
Change in valuation allowance | (284,900) | (92,800) |
Meals and entertainment (50%) | 1,000 | 700 |
Prior year true-up adjustments | 103,400 | 165,300 |
Deferred compensation | 17,800 | |
Contributed services | 52,900 | |
Other items | 400 | |
Provision (benefit) for income tax | $ 900 |
Income Taxes - Schedule of Ef_2
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) (Parenthetical) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Meals and entertainment, percent | 50.00% | 50.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 13,702,300 | $ 13,870,200 |
Tax credit carryforwards | 977,500 | 977,500 |
Compensation expense - non-qualified stock options | 69,000 | 166,800 |
Deferred revenue and maintenance service contracts | 419,800 | 425,000 |
Depreciation, amortization, and capitalized software | 11,300 | |
Reserves and other | 58,200 | 52,400 |
Total deferred tax assets | 15,226,800 | 15,503,100 |
Deferred tax liability - depreciation, amortization and capitalized software | ||
Net deferred tax asset | 15,226,800 | 15,503,100 |
Valuation allowance | (15,226,800) | (15,503,100) |
Net deferred tax asset |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Rent expense | $ 48,000 | $ 48,000 |
Profit sharing plans | 14,100 | $ 17,400 |
Concord, NH Headquarters [Member] | ||
Rent expense | $ 4,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jan. 31, 2020 | Dec. 28, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Contributed services | $ 225,100 | $ 75,000 | ||
Purchase Agreement [Member] | Board of Directors and Executive Officer [Member] | ||||
Stock issued during period, shares | 450,000 | |||
Backstop Agreement [Member] | Subsequent Event [Member] | ||||
Offering agreements expiration, description | Backstop Agreement transactions by the end of April 2020. | |||
Gross proceeds from issuance of private placement | $ 21,200,000 | |||
Number of restricted shares of common stock | $ 7,000,000 | |||
Backstop Agreement [Member] | Subsequent Event [Member] | Accredited Investors [Member] | Novelty Capital Partners LP [Member] | ||||
Shares issued purchase price, per share | $ 0.30 | |||
Offering agreements expiration, description | The Rights Offering expired on March 31, 2020 | |||
Backstop Agreement [Member] | Subsequent Event [Member] | Accredited Investors [Member] | Novelty Capital Partners LP [Member] | Maximum [Member] | ||||
Number of shares issued in private placement | 2,410,000 | |||
Rights Offering [Member] | Subsequent Event [Member] | ||||
Number of shares issued in private placement | 1,600,000 | |||
Proceeds from offering | $ 480,191 | |||
Unaffiliated Stockholder [Member] | ||||
Stock issued during period, shares | 450,000 | |||
Aggregate warrants to purchase, shares | 48,896 | |||
Stock issued during period, value | $ 149,700 |