Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 20, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | hopTo Inc. | |
Entity Central Index Key | 0001021435 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
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 Common Stock, Shares Outstanding | 11,572,880 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 1,467,000 | $ 1,541,900 |
Accounts receivable, net | 396,700 | 271,200 |
Prepaid expenses and other current assets | 193,200 | 59,000 |
Total current assets | 2,056,900 | 1,872,100 |
Property and equipment, net | ||
Other assets | 17,800 | 17,800 |
Total assets | 2,074,700 | 1,889,900 |
Current liabilities | ||
Accounts payable | 260,400 | 271,900 |
Accrued expenses | 121,000 | 106,000 |
Accrued wages | 144,500 | 136,400 |
Deferred revenue | 1,279,500 | 1,256,000 |
Total current liabilities | 1,805,400 | 1,770,300 |
Deferred revenue | 474,300 | 529,500 |
Total liabilities | 2,279,700 | 2,299,800 |
Commitments and contingencies | ||
Stockholders' equity (deficit) | ||
Preferred stock, $0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding as of March 31, 2020 (unaudited) or December 31, 2019 | ||
Common stock, $0.0001 par value, 195,000,000 shares authorized, 9,954,866 and 9,834,866 shares issued and outstanding as of March 31, 2020(unaudited) and December 31, 2019, respectively | 1,000 | 1,000 |
Additional paid-in capital | 79,619,300 | 79,523,500 |
Accumulated deficit | (79,825,300) | (79,934,400) |
Total stockholders' deficit | (205,000) | (409,900) |
Total liabilities and stockholders' deficit | $ 2,074,700 | $ 1,889,900 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
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 | 9,954,866 | 9,834,866 |
Common stock, shares outstanding | 9,954,866 | 9,834,866 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 844,600 | $ 1,053,800 |
Cost of revenues | 38,100 | 29,200 |
Gross profit | 806,500 | 1,024,600 |
Operating expenses: | ||
Selling and marketing | 104,400 | 117,000 |
General and administrative | 229,000 | 295,000 |
Research and development | 364,000 | 374,500 |
Total operating expenses | 697,400 | 786,500 |
Income from operations | 109,100 | 238,100 |
Other income (expense): | ||
Other income (expense) | 13,800 | |
Income before provision for income taxes | 109,100 | 251,900 |
Provision for income taxes | ||
Net income | $ 109,100 | $ 251,900 |
Net income per share, basic | $ 0.01 | $ 0.03 |
Net income per share, diluted | $ 0.01 | $ 0.03 |
Weighted average number of common shares outstanding | ||
Basic | 9,927,990 | 9,804,400 |
Diluted | 9,937,617 | 10,031,148 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Dec. 31, 2018 | $ 1,000 | $ 79,298,200 | $ (80,488,700) | $ (1,189,500) |
Beginning balance, shares at Dec. 31, 2018 | 9,804,400 | |||
Contributed services | 56,300 | 56,300 | ||
Net Income | 251,900 | 251,900 | ||
Ending balance at Mar. 31, 2019 | $ 1,000 | 79,354,500 | (80,236,800) | (881,300) |
Ending balance, shares at Mar. 31, 2019 | 9,804,400 | |||
Beginning balance at Dec. 31, 2019 | $ 1,000 | 79,523,500 | (79,934,400) | (409,900) |
Beginning balance, shares at Dec. 31, 2019 | 9,834,866 | |||
Contributed services | 56,200 | 56,200 | ||
Shares issued for settlement of accrued expenses | 39,600 | 39,600 | ||
Shares issued for settlement of accrued expenses, shares | 120,000 | |||
Net Income | 109,100 | 109,100 | ||
Ending balance at Mar. 31, 2020 | $ 1,000 | $ 79,619,300 | $ (79,825,300) | $ (205,000) |
Ending balance, shares at Mar. 31, 2020 | 9,954,866 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities | ||
Net income | $ 109,100 | $ 251,900 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation | 100 | |
Contributed services | 56,200 | 56,300 |
Changes in allowance for doubtful accounts | 5,600 | 15,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (131,100) | (199,500) |
Prepaid expenses and other current assets | (134,200) | 9,900 |
Accounts payable and accrued expenses | 51,200 | (7,100) |
Deposit liability | (12,100) | |
Deferred revenue | (31,700) | (4,300) |
Net cash provided (used) by operating activities | (74,900) | 110,200 |
Net change in cash | (74,900) | 110,200 |
Cash, beginning of the period | 1,541,900 | 892,500 |
Cash, end of the period | 1,467,000 | 1,002,700 |
Supplemental disclosure of cash flow information: | ||
Interest paid | ||
Income taxes paid | ||
Non-cash financing activites: shares issued for settlement of accrued expenses | $ 39,600 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organization hopTo Inc., through 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 | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation The unaudited 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 unaudited 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 consolidated financial statements do not include all information and footnote disclosures required in annual financial statements. The unaudited 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, 2019 which was filed with the SEC on April 14, 2020 (“2019 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, 2020 or any future period. Certain prior year information has been reclassified to conform to current year presentation. 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 significant estimates include the valuation of stock-based compensation expense, the allowance for doubtful accounts, depreciation of long-lived assets, and accruals of liabilities. 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. 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 following is a summary of how the Company recognizes revenue for its different 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. ● Service Revenue The Company has maintenance contracts with certain of its customers. Revenue from maintenance contracts is recognized ratably over the related contract period, which generally ranges from one to five years. The Company’s product sales by geographic area are presented in Note 5. 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 March 31, 2020 (unaudited) or December 31, 2019. 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 March 31,2020 and December 31, 2019, the allowance for doubtful accounts totaled $12,900 and $7,300, respectively. Concentration of Credit Risk For the three-month ended March 31, 2020 and 2019, we currently consider the following to be our most significant customers and partners. For the purposes of this presentation, “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. For the three months ended March 31, 2020, the Company had 2 customers comprising 10.8% and 12.8%, respectively, of total sales. For the three months ended March 31, 2019, the Company had 3 customers comprising 24.9%, 14.6%, and 11.0%, respectively, of total sales. A loss of one of these customers could potentially have a significant negative impact on the Company’s financial statements. As of March 31, 2020, the Company has 4 customers comprising 27.4%,14.3%, 12.9%, and 12.0%, respectively, of net accounts receivable. As of December 31, 2019, the Company has 1 customer comprising 17.9% of net accounts receivable. 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 March 31, 2020, representing 481,335 of outstanding in-the-money warrants, were included in the computation of diluted net income per share using the Treasury Stock Method. During the three months ended March 31, 2020 and 2019, the Company had total common stock equivalents of 93,076 and 106,077, respectively, which were excluded from the computation of net income (loss) per share because they are anti-dilutive. 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. Recently Adopted Accounting Pronouncements The FASB issues ASUs to amend the authoritative literature in ASC. There have been several ASUs to date, including those above, that amend the original text of ASC. Management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us or (iv) are not expected to have a significant impact our financial statements. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 3. Property and Equipment Property and equipment consisted of the following. March 31, December 31, 2020 2019 (Unaudited) Equipment $ 154,300 $ 154,300 Furniture and fixtures 1,600 1,600 155,900 155,900 Less: accumulated depreciation (155,900 ) (155,900 ) $ - $ - Depreciation expense amounted to $0 and $100 for the three months ended March 31, 2020 and 2019, respectively. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | 4. 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 March 31, 2020, 424,594 shares of common stock remained available for issuance under the 12 Plan. The following summarizes the stock option activity for the three months ended March 31, 2020. Weighted- Average Weighted- Remaining Average Contractual Exercise Life Options Price (Years) Outstanding at December 31, 2019 106,077 $ 2.77 1.53 Granted - Forfeited/cancelled (13,001 ) Exercised - Outstanding at March 31, 2020 (unaudited) 93,076 $ 3.03 1.49 Vested and expected to vest at March 31, 2020 (unaudited) 93,076 $ 3.03 1.49 Exercisable at March 31, 2020 (unaudited) 93,076 $ 3.03 1.49 The following table summarizes information about options outstanding and exercisable as of March 31, 2020. Options Outstanding Options Exercisable Weighted 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 14,533 0.78 $ 0.78 14,533 $ 0.78 2.00 - 4.00 63,677 1.62 3.21 63,677 3.21 4.20 - 6.68 14,866 1.65 4.46 14,866 4.46 93,076 93,076 Shares of Common Stock Issued During the three-month period ending March 31, 2020, the Company issued a total of 120,000 shares of common stock to two former members of our board of directors that was previously committed to them and included in accrued expenses. The issuance of the 120,000 shares of common stock settles a total of $39,600 of accrued expenses that was included in the Company’s balance sheet. Warrants As of March 31,2020 and December 31, 2019, the Company had 481,335 warrants outstanding. The warrants outstanding at March 31, 2020 are all exercisable at $0.01 and have an expiration date of May 20, 2023. |
Sales by Geographical Location
Sales by Geographical Location | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Sales by Geographical Location | 5. Sales by Geographical Location Revenue by country for the three months ended March 31, 2020 and 2019 was as follows. Three Months Ended 2020 2019 Revenue by Country United States $ 312,600 $ 334,700 Brazil 164,900 146,000 The Netherland 81,800 262,900 Other Countries 285,300 310,200 Total $ 844,600 $ 1,053,800 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies 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 three months ended March 31, 2020 and 2019, the Company contributed a total of $9,500 and $12,200, respectively. Contingencies During the ordinary course of business, the Company is subject to various potential claims and litigation. Management is not aware of any outstanding litigation which would have a significant impact on the Company’s financial statements. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 7. Related Party Transactions The Company’s Chief Executive Officer and Interim Chief Financial Officer has served in these executive roles providing management services to the Company since September 2018, however, does not currently receive a salary or other forms of compensation. During the three months ended March 31, 2020 and 2019, the Company recorded an expense and contributed capital of $56,200 for contributed services based on the estimated market rate for these services. On January 31, 2020, we entered into the Backstop Agreement (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 our subscription rights offering to all of our stockholders (the “Rights Offering”). While upon the closing of the Rights Offering, we anticipated that the Backstop Agreement would close in April 2020, as of the filing of this Quarterly Report on Form 10-Q the Backstop Agreement has not closed and we now expect to consummate the Backstop Agreement transactions by the end of May 2020. Subsequent to the expiration 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 | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 8. Subsequent Events See Note 7 above regarding the Rights Offering and Backstop Agreement. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited 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 unaudited 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 consolidated financial statements do not include all information and footnote disclosures required in annual financial statements. The unaudited 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, 2019 which was filed with the SEC on April 14, 2020 (“2019 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, 2020 or any future period. Certain prior year information has been reclassified to conform to current year presentation. |
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 significant estimates include the valuation of stock-based compensation expense, the allowance for doubtful accounts, depreciation of long-lived assets, and accruals of liabilities. |
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. 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 following is a summary of how the Company recognizes revenue for its different 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. ● Service Revenue The Company has maintenance contracts with certain of its customers. Revenue from maintenance contracts is recognized ratably over the related contract period, which generally ranges from one to five years. The Company’s product sales by geographic area are presented in Note 5. |
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 March 31, 2020 (unaudited) or December 31, 2019. |
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 March 31,2020 and December 31, 2019, the allowance for doubtful accounts totaled $12,900 and $7,300, respectively. |
Concentration of Credit Risk | Concentration of Credit Risk For the three-month ended March 31, 2020 and 2019, we currently consider the following to be our most significant customers and partners. For the purposes of this presentation, “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. For the three months ended March 31, 2020, the Company had 2 customers comprising 10.8% and 12.8%, respectively, of total sales. For the three months ended March 31, 2019, the Company had 3 customers comprising 24.9%, 14.6%, and 11.0%, respectively, of total sales. A loss of one of these customers could potentially have a significant negative impact on the Company’s financial statements. As of March 31, 2020, the Company has 4 customers comprising 27.4%,14.3%, 12.9%, and 12.0%, respectively, of net accounts receivable. As of December 31, 2019, the Company has 1 customer comprising 17.9% of net accounts receivable. |
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 March 31, 2020, representing 481,335 of outstanding in-the-money warrants, were included in the computation of diluted net income per share using the Treasury Stock Method. During the three months ended March 31, 2020 and 2019, the Company had total common stock equivalents of 93,076 and 106,077, respectively, which were excluded from the computation of net income (loss) per share because they are anti-dilutive. |
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. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements The FASB issues ASUs to amend the authoritative literature in ASC. There have been several ASUs to date, including those above, that amend the original text of ASC. Management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us or (iv) are not expected to have a significant impact our financial statements. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following. March 31, December 31, 2020 2019 (Unaudited) Equipment $ 154,300 $ 154,300 Furniture and fixtures 1,600 1,600 155,900 155,900 Less: accumulated depreciation (155,900 ) (155,900 ) $ - $ - |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | The following summarizes the stock option activity for the three months ended March 31, 2020. Weighted- Average Weighted- Remaining Average Contractual Exercise Life Options Price (Years) Outstanding at December 31, 2019 106,077 $ 2.77 1.53 Granted - Forfeited/cancelled (13,001 ) Exercised - Outstanding at March 31, 2020 (unaudited) 93,076 $ 3.03 1.49 Vested and expected to vest at March 31, 2020 (unaudited) 93,076 $ 3.03 1.49 Exercisable at March 31, 2020 (unaudited) 93,076 $ 3.03 1.49 |
Schedule of Share-based Compensation, Shares Authorized Under Stock Option Plans, by Exercise Price Range | The following table summarizes information about options outstanding and exercisable as of March 31, 2020. Options Outstanding Options Exercisable Weighted 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 14,533 0.78 $ 0.78 14,533 $ 0.78 2.00 - 4.00 63,677 1.62 3.21 63,677 3.21 4.20 - 6.68 14,866 1.65 4.46 14,866 4.46 93,076 93,076 |
Sales by Geographical Location
Sales by Geographical Location (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Country | Revenue by country for the three months ended March 31, 2020 and 2019 was as follows. Three Months Ended 2020 2019 Revenue by Country United States $ 312,600 $ 334,700 Brazil 164,900 146,000 The Netherland 81,800 262,900 Other Countries 285,300 310,200 Total $ 844,600 $ 1,053,800 |
Significant Accounting Polici_3
Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Allowance for doubtful accounts | $ 12,900 | $ 7,300 | |
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 | 93,076 | 106,077 | |
Sales [Member] | Customer One [Member] | |||
Concentration of credit risk percentage | 10.80% | 24.90% | |
Sales [Member] | Customer Two [Member] | |||
Concentration of credit risk percentage | 12.80% | 14.60% | |
Sales [Member] | Customer Three [Member] | |||
Concentration of credit risk percentage | 11.00% | ||
Accounts Receivable [Member] | Customer One [Member] | |||
Concentration of credit risk percentage | 27.40% | 17.90% | |
Accounts Receivable [Member] | Customer Two [Member] | |||
Concentration of credit risk percentage | 14.30% | ||
Accounts Receivable [Member] | Customer Three [Member] | |||
Concentration of credit risk percentage | 12.90% | ||
Accounts Receivable [Member] | Customer Four [Member] | |||
Concentration of credit risk percentage | 12.00% |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 100 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Property and equipment gross | $ 155,900 | $ 155,900 |
Less: accumulated depreciation | (155,900) | (155,900) |
Property and equipment net | ||
Equipment [Member] | ||
Property and equipment gross | 154,300 | 154,300 |
Furniture and Fixtures [Member] | ||
Property and equipment gross | $ 1,600 | $ 1,600 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Note 9 - Stockholders' Equity (Details) [Line Items] | ||
Accrued expenses | $ 121,000 | $ 106,000 |
Warrants outstanding | 481,335 | 481,335 |
Warrants outstanding exercisable price | $ 0.01 | |
Warrants expiration date | May 20, 2023 | |
Common Stock [Member] | ||
Note 9 - Stockholders' Equity (Details) [Line Items] | ||
Number of common stock shares issued | 120,000 | |
Accrued expenses | $ 39,600 | |
Board of Directors [Member] | ||
Note 9 - Stockholders' Equity (Details) [Line Items] | ||
Number of common stock shares issued | 120,000 | |
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 | 424,594 | |
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) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Equity [Abstract] | |
Options Outstanding, Beginning Balance | shares | 106,077 |
Options Outstanding, Granted | shares | |
Options Outstanding, Forfeited/cancelled | shares | (13,001) |
Options Outstanding, Exercised | shares | |
Options Outstanding, Ending Balance | shares | 93,076 |
Options Outstanding, Vested and expected to vest at March 31, 2020 | shares | 93,076 |
Options Exercisable at March 31, 2020 | shares | 93,076 |
Weighted Average Exercise Price, Outstanding Beginning Balance | $ / shares | $ 2.77 |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Exercise Price, Forfeited/cancelled | $ / shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Outstanding Ending Balance | $ / shares | 3.03 |
Weighted Average Exercise Price, Vested and expected to vest at March 31, 2020 | $ / shares | 3.03 |
Weighted Average Exercise Price, Exercisable at March 31, 2020 | $ / shares | $ 3.03 |
Weighted Average Remaining Contractual Life (Years) Outstanding, Beginning Balance | 1 year 6 months 10 days |
Weighted Average Remaining Contractual Life (Years) Outstanding, Ending Balance | 1 year 5 months 27 days |
Weighted Average Remaining Contractual Life (Years), Vested and expected to vest at March 31, 2020 | 1 year 5 months 27 days |
Weighted Average Remaining Contractual Life (Years) Exercisable at March 31, 2020 | 1 year 5 months 27 days |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Share-based Compensation, Shares Authorized Under Stock Option Plans, by Exercise Price Range (Details) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options Outstanding, Number of shares | shares | 93,076 |
Options Exercisable, Number of shares | shares | 93,076 |
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 | shares | 14,533 |
Options Outstanding, Weighted Average Remaining Life (Years) | 9 months 11 days |
Options Outstanding, Weighted Average Exercise Price | $ 0.78 |
Options Exercisable, Number of shares | shares | 14,533 |
Options Exercisable, Weighted Average Exercise Price | $ 0.78 |
Exercise Price Range 2 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price Range, Lower Range Limit | 2 |
Exercise Price Range, Upper Range Limit | $ 4 |
Options Outstanding, Number of shares | shares | 63,677 |
Options Outstanding, Weighted Average Remaining Life (Years) | 1 year 7 months 13 days |
Options Outstanding, Weighted Average Exercise Price | $ 3.21 |
Options Exercisable, Number of shares | shares | 63,677 |
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 | shares | 14,866 |
Options Outstanding, Weighted Average Remaining Life (Years) | 1 year 7 months 24 days |
Options Outstanding, Weighted Average Exercise Price | $ 4.46 |
Options Exercisable, Number of shares | shares | 14,866 |
Options Exercisable, Weighted Average Exercise Price | $ 4.46 |
Sales by Geographical Locatio_2
Sales by Geographical Location - Schedule of Revenue by Country (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue by country | $ 844,600 | $ 1,053,800 |
United States [Member] | ||
Revenue by country | 312,600 | 334,700 |
Brazil [Member] | ||
Revenue by country | 164,900 | 146,000 |
The Netherlands [Member] | ||
Revenue by country | 81,800 | 262,900 |
Other Countries [Member] | ||
Revenue by country | $ 285,300 | $ 310,200 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Profit sharing plans | $ 9,500 | $ 12,200 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jan. 31, 2020 | May 20, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Contributed services | $ 56,200 | $ 56,300 | ||
Backstop Agreement [Member] | Subsequent Event [Member] | ||||
Gross proceeds from issuance of private placement | $ 2,120,000 | |||
Number of restricted shares of common stock | $ 7,000,000 | |||
Backstop Agreement [Member] | Accredited Investors [Member] | Novelty Capital Partners LP [Member] | ||||
Shares issued purchase price, per share | $ 0.30 | |||
Backstop Agreement [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 |