HPTO hopTo Inc (CE)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended June 30, 2023

 

Commission File Number: 0-21683

 

 

hopTo Inc.

(Exact name of registrant as specified in its charter)

 

Delaware		13-3899021
(State of incorporation)		(IRS Employer Identification No.)

 

189 North Main St., Suite 102

Concord, NH 03301

(Address of principal executive offices)

 

Registrant’s telephone number:

(800) 472-7466

(408) 688-2674

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol		Name of each exchange on which registered
Common		HPTO		OTC Market

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

Yes ☒ No ☐

 

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

 

	Large accelerated filer	☐	Accelerated filer	☐
	Non-accelerated filer	☐	Smaller reporting company	☒
	Emerging growth company	☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

As of August 21, 2023, there were issued and outstanding 18,976,165 shares of the registrant’s common stock, par value $0.0001.

 

 

 

Table of Contents

 

		PAGE
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4.	Controls and Procedures	17
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	17
Item 1A.	Risk Factors	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3.	Defaults Upon Senior Securities	17
Item 4.	Mine Safety Disclosures	17
Item 5.	Exhibits	17
	Signatures	18

 

 

PART I. FINANCIAL INFORMATION

 

ITEM 1. Financial Statements

 

hopTo Inc.

Consolidated Balance Sheets

(unaudited)

 

		June 30,				December 31,
		2023				2022
Assets
Current assets
Cash and cash equivalents		$	5,627,700			$	5,037,300
Marketable securities			-				318,700
Accounts receivable, net			499,700				511,200
Prepaid expenses and other current assets			124,300				102,600
Total current assets			6,251,700				5,969,800
Right-of-use assets			36,400				51,600
Property and equipment, net			3,700				5,300
Other assets			22,800				22,900
Total assets		$	6,314,600			$	6,049,600
Liabilities and Stockholder’s Equity
Current liabilities
Accounts payable		$	215,200			$	234,200
Accrued expenses			116,300				61,800
Accrued wages			285,400				150,000
Lease liabilities- current			10,300				10,300
Deferred revenue- current			1,476,500				1,206,100
Total current liabilities			2,103,700				1,662,400
Long-term liabilities
Lease liabilities			25,700				40,900
Deferred revenue			203,700				264,800
Total liabilities			2,333,100				1,968,100
Commitments and contingencies			-				-
Stockholders’ equity
Preferred stock, $0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding as of June 30, 2023 and December 31, 2022			-				-
Common stock, $0.0001 par value, 195,000,000 shares authorized, 18,976,165 and 18,826,342 shares issued and outstanding as of June 30, 2023 and December 31, 2022			1,900				1,900
Additional paid-in capital			82,145,100				82,145,100
Accumulated deficit			(78,165,500	)			(78,065,500	)
Total stockholders’ equity			3,981,500				4,081,500
Total liabilities and stockholders’ equity		$	6,314,600			$	6,049,600

 

See accompanying notes to unaudited consolidated financial statements

 

 

hopTo Inc.

Consolidated Statements of Operations

(unaudited)

 

		2023				2022				2023				2022
		For the Three Months Ended								For the Six Months Ended
		June 30,				June 30,				June 30,				June 30,
		2023				2022				2023				2022
Revenues:
Software licenses		$	98,400			$	132,000			$	236,600			$	313,500
Software service fees			930,100				808,600				1,814,000				1,556,300
Other			29,900				21,000				50,900				42,000
Total revenue			1,058,400				961,600				2,101,500				1,911,800
Cost of revenue:
Software service costs			27,700				13,500				45,600				27,000
Software product costs			51,100				35,300				109,000				99,200
Total cost of revenue			78,800				48,800				154,600				126,200
Gross profit			979,600				912,800				1,946,900				1,785,600
Operating expenses:
Selling and marketing			357,500				315,900				668,400				439,000
General and administrative			382,400				165,900				627,500				370,800
Research and development			416,300				380,800				812,900				763,500
Total operating expenses			1,156,200				862,600				2,108,800				1,573,300
Income from operations			(176,600	)			50,200				(161,900	)			212,300
Other income (loss):
Unrealized gain (loss) in marketable securities			-				(29,800	)			17,700				(85,500	)
Interest and other income			42,000				900				44,200				1,000
Other income (loss)			42,000				(28,900	)			61,900				(84,500	)
Income (loss) before provision for income taxes			(134,600	)			21,300				(100,000	)			127,800
Provision for income taxes			-				-				-				-
Net income (loss)		$	(134,600	)		$	21,300			$	(100,000	)		$	127,800
Net income (loss) per share, basic		$	(0.01	)		$	0.00			$	(0.01	)		$	0.01
Net income (loss) per share, diluted		$	(0.01	)		$	0.00			$	(0.01	)		$	0.01
Weighted average number of common shares outstanding
Basic			18,901,253				18,846,664				18,863,797				18,848,658
Diluted			18,901,253				19,089,238				18,863,797				19,901,102

 

See accompanying notes to unaudited consolidated financial statements

 

 

hopTo Inc.

Consolidated Statements of Stockholders’ Equity

(unaudited)

 

		Shares				Amount				Capital				Deficit				Total
		Common Stock								Additional Paid-In				Accumulated
		Shares				Amount				Capital				Deficit				Total
Balance at December 31, 2021			18,850,675			$	1,900			$	82,155,200			$	(78,188,500	)		$	3,968,600
Net income			-				-				-				106,500				106,500
Balance at March 31, 2022 (unaudited)			18,850,675			$	1,900			$	82,155,200			$	(78,082,000	)		$	4,075,100
Purchase of hopTo treasury stock			(24,333	)			-				(10,100	)			-				(10,100	)
Net income			-				-				-				21,300				21,300
Balance at June 30, 2022 (unaudited)			18,826,342			$	1,900			$	82,145,100			$	(78,060,700	)		$	4,086,300
Balance at December, 2022			18,826,342			$	1,900			$	82,145,100			$	(78,065,500	)		$	4,081,500
Net income			-				-				-				34,600				34,600
Balance at March 31, 2023 (unaudited)			18,826,342			$	1,900			$	82,145,100			$	(78,030,900	)		$	4,116,100
Balance			18,826,342			$	1,900			$	82,145,100			$	(78,030,900	)		$	4,116,100
Warrant shares exercised			149,823				-				-				-				-
Net loss			-				-				-				(134,600	)			(134,600	)
Net Income (loss)			-				-				-				(134,600	)			(134,600	)
Balance at Jun 30, 2023 (unaudited)			18,976,165			$	1,900			$	82,145,100			$	(78,165,500	)		$	3,981,500
Balance			18,976,165			$	1,900			$	82,145,100			$	(78,165,500	)		$	3,981,500

 

See accompanying notes to unaudited consolidated financial statements

 

 

hopTo Inc.

Consolidated Statements of Cash Flows

(unaudited)

 

		2023				2022
		For the Six Months Ended
		June 30,				June 30,
		2023				2022
Cash flows from operating activities
Net income (loss)		$	(100,000	)		$	127,800
Adjustments to reconcile net income to net cash provided by and used in operating activities:
Depreciation			1,600				1,300
Changes in allowance for doubtful accounts			(800	)			1,100
Realized (gain) loss from marketable securities			(17,700	)			85,500
Changes in operating assets and liabilities:
Accounts receivable			12,300				52,800
Prepaid expenses and other current assets			(21,600	)			(46,500	)
Accounts payable and accrued expenses			170,900				26,500
Lease liabilities			-				(400	)
Deferred revenue			209,300				213,900
Net cash provided by operating activities			254,000				462,000
Cash flows from investing activities
Purchase of hopTo common stock			-				(10,100	)
Proceeds from sale of marketable securities			336,400				-
Net cash provided (used) by investing activities			336,400				(10,100	)
Net change in cash			590,400				451,900
Cash and cash equivalents, beginning of the period			5,037,300				4,755,300
Cash and cash equivalents, end of the period		$	5,627,700			$	5,207,200

 

See accompanying notes to unaudited consolidated financial statements

 

 

hopTo Inc.

Notes to Unaudited Consolidated Financial Statements

 

1. Organization

 

hopTo Inc., a Delaware corporation, through its wholly-owned subsidiary GraphOn Corporation (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, hosting service providers, 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.

 

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, 2022, which was filed with the SEC on April 14, 2023 (“2022 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, 2023, 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 estimates include the valuation of the allowances for doubtful accounts, depreciation of long-lived assets, timing of revenue recognized over time, allowances for deferred tax assets and accruals of liabilities.

 

7

 

Revenue Recognition

 

The Company markets and licenses its products indirectly through channel distributors, value-added resellers, independent software vendors (“ISVs”), 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.

 

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 the Company portal. We recognize revenue upon delivery of these licenses.

 

Services Revenue

 

The Company has maintenance contracts that entitle customers to support and certain updates to the product. Revenue from maintenance contracts is recognized ratably over the related contract period, which generally ranges from one to five years.

 

Subscription Revenue

 

The Company sells subscription licenses that provide the customer with the right to use the software, maintenance and support and certain updates to the product. Subscription licenses are delivered electronically by either the Company’s cloud licensing server or by sending a term license key to the customer to download the related software from the Company portal. Revenue from subscription licenses is recognized ratably over the related contract period, which generally ranges from one month to one year.

 

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.

 

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 June 30, 2023 and December 31, 2022, the allowance for doubtful accounts totaled $4,800 and $5,600, respectively.

 

8

 

Concentration of Credit Risk

 

For the six months ended June 30, 2023 and June 30, 2022, the Company had four resellers comprising 13.7%,13.6%, 12.2% and 11.4%, four resellers comprising 12.1%,11.8%, 10.6% and 10.1%, respectively, of total sales.

 

As of June 30, 2023 and December 31, 2022, the Company had three resellers comprising 23.0%, 21.3%, and 12.8%, four resellers comprising 18.5%, 18.3%, 17.4% and 16.0%, respectively, of net accounts receivable.

 

For the purposes of this description, “sales” refers to the dollar value of orders received from these customers and partners in the period indicated. The 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. The loss of one of these resellers would not have a material impact as the Company could take over the end customer relationship.

 

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 reflects per share amounts that would have resulted if diluted potential common stock had been converted to common stock. The company had no dilutive common share equivalents as of June 30, 2023, compared to 248,216 of outstanding in-the-money warrants, were included in the computation of diluted net income per share using the Treasury Stock Method during December 31,2022. During the three months ended June 30, 2023 and 2022, the Company had total common stock equivalents of 0 and 3,200, respectively, which were excluded from the computation of net income 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.

 

3. Property and Equipment

 

Property and equipment consisted of the following.

 

Schedule of Property and Equipment

		June 30,				December 31,
		2023				2022
Equipment		$	162,400			$	164,100
Furniture and fixtures			1,600				1,600
Property and equipment gross			164,000				165,700
Less: accumulated depreciation			(160,300	)			(160,400	)
Property and equipment net		$	3,700			$	5,300

 

Depreciation expense amounted to $1,600 and $1,300 for the six months ended June 30, 2023 and 2022, respectively.

 

9

 

4. Stockholders’ Equity

 

Shares of Common Stock Issued

 

During the three and six-month periods ending June 30, 2023, the Company issued 0 and 149,216 shares and for the same periods ending 2022, the Company did not issue any shares of common stock.

 

Warrants

 

As of June 30, 2023 and December 31, 2022, the Company had 0 and 248,216 warrants outstanding. There were 149,216 shares of warrants exercised during the three-month periods ending June 30, 2023 and the remaining 98,393 shares were expired as of were expired on May 20, 2023.

 

5. Sales by Geographical Location

 

Revenue by country for the three and six months ended June 30, 2023 and 2022 was as follow :

 

Schedule of Revenue by Country

		2023				2022				2023				2022
		Three Months Ended								Six Months Ended
		2023				2022				2023				2022
Revenue by Country
United States		$	441,800				388,900				859,500				779,500
Brazil			291,100				256,500				573,100				467,500
Japan			81,200				53,000				175,200				125,900
Other Countries			244,300				263,200				493,700				538,900
Total		$	1,058,400			$	961,600				2,101,500				1,911,800

 

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 six months ended June 30, 2023 and 2022, the Company contributed a total of $9,400 and $15,400, 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.

 

Lease

 

Supplemental balance sheet information related to leases as of June 30, 2023 is as follows: 

 

Schedule of Operating Leases Future Minimum Lease Payments

Future minimum lease payments:
2023			15,500
2024			20,700
Thereafter			-
Total future minimum lease payments		$	36,200
Less: Lease imputed interest			200
Total		$	36,000

 

The Company leases its’ headquarters office in Concord, New Hampshire under a thirty-six-month noncancelable operating lease agreement which will expire on August 31, 2024. The terms of certain lease agreement provide for increasing rental payments at fixed twelve-month intervals.

 

 

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Information

 

This report includes, in addition to historical information, “forward-looking statements”. All statements other than statements of historical fact we make in this report are forward-looking statements. In particular, the statements regarding industry prospects and our expectations regarding future results of operations or financial position (including those described in this Management’s Discussion and Analysis of Financial Condition and Results of Operations) are forward-looking statements. Such statements are based on management’s current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ significantly from those described in the forward-looking statements. Factors that may cause such a difference include the following:

 

	●	the success of products depends on a number of factors including market acceptance and our ability to manage the risks associated with product introduction;
	●	local, regional, national and international economic conditions and events, and the impact they may have on us and our customers;
	●	our revenue could be adversely impacted if any of our significant customers reduces its order levels or fails to order during a reporting period; customer demand is based on many factors out of our control;
	●	as a result of the new revenue recognition standards, if any significant end user customer or reseller substantially changes its order level, or fails to order during the reporting period, whether the order is placed directly with us or through one of our non-stocking resellers, our software licenses revenue could be materially impacted; and
	●	other factors, including, but not limited to, those set forth under Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 which was filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2022, and in other documents we have filed with the SEC.

 

Statements included in this report are based upon information known to us as of the date that this report is filed with the SEC, and we assume no obligation to update or alter our forward-looking statements made in this report, whether as a result of new information, future events or otherwise, except as otherwise required by applicable federal securities laws.

 

Introduction

 

hopTo, Inc., through its wholly owned subsidiary GraphOn Corporation (collectively, “we”, “us,” “our” or the “Company”), is a developer 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. Our application publishing software solutions are sold under the brand name GO-Global, which is our sole revenue source. GO-Global is an application access solution for use by independent software vendors (“ISVs”), 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.

 

Critical Accounting Policies

 

We believe that several accounting policies are important to understanding our historical and future performance. We refer to these policies as “critical” because these specific areas require us to make judgments and estimates about matters that are uncertain at the time when we make the estimates. Actual results may differ from these estimates. For a summary of our critical accounting policies, please refer to our 2022 10-K Report and Note 2 to our unaudited consolidated financial Statements included under Item 1 – Financial Statements in this Form 10-Q.

 

 

Results of Operations for the Three-Month Periods Ended June 30, 2023 and 2022

 

The following are the results of our operations for the three months ended June 30, 2023 as compared to the three months ended June 30, 2022.

 

		For the Three Months Ended
		June 30,				June 30,
		2023				2022				$ Change
		(unaudited)				(unaudited)
Revenues		$	1,058,400			$	961,600			$	96,800
Cost of revenues			78,800				48,800				30,000
Gross profit			979,600				912,800				66,800
Operating expenses:
Selling and marketing			357,500				315,900				41,600
General and administrative			382,400				165,900				216,500
Research and development			416,300				380,800				35,500
Total operating expenses			1,156,200				862,600				293,600
Income from operations			(176,600	)			50,200				(226,800	)
Other income (loss):
Unrealized gain on marketable securities			-				(29,800	)			29,900
Interest and other income			42,000				900				41,000
Other income (loss)			42,000				(28,900	)			70,900
Income (loss) before provision for income taxes			(134,600	)			21,300				(155,900	)
Net income (loss)		$	(134,600	)		$	21,300			$	(155,900	)

 

Revenues

 

Our software revenue is entirely related to our GO-Global product line, and historically has been primarily derived from product licensing fees and service fees from maintenance contracts. The majority of this revenue has been earned, and continues to be earned, from a limited number of significant customers, most of whom are resellers. Many of our resellers purchase software licenses that they hold in inventory until they are resold to the ultimate end user (a “stocking reseller”).

 

When a software license is sold directly to an end user by us, or by one of our resellers who does not stock licenses into inventory, revenue is recognized immediately upon shipment, assuming all other criteria for revenue recognition are met. Consequently, if any significant end user customer substantially changes its order level, or fails to order during the reporting period, whether the order is placed directly with us or through one of our non-stocking resellers, our software licenses revenue could be materially impacted.

 

Almost all stocking resellers maintain inventories of our Windows products; few stocking resellers maintain inventories of our UNIX products.

 

 

The following is a summary of our revenues by category for the three months ended June 30, 2023 and 2022.

 

		For the Three Months Ended
		June 30,				June 30,
		2023				2022				$ Change
Revenue
Software Licenses
Windows		$	94,000			$	122,400			$	(28,400	)
UNIX/Linux			4,400				9,600				(5,200	)
Total			98,400				132,000				(33,600	)
Software Service Fees
Windows			903,000				776,600				126,400
UNIX/Linux			27,100				32,000				(4,900	)
Total			930,100				808,600				121,500
Other			29,900				21,000				8,900
		$	1,058,400			$	961,600			$	96,800

 

Software Licenses

 

Windows software licenses revenue decreased by $28,400 or 23.2% to $94.000 during the three months ended June 30, 2023, from $122,400 for the same period in 2022. The decrease was primarily due to lower level of new standard Window licenses orders sold for the three months ended June 30,2023.

 

Software licenses revenue from our UNIX/Linux products decreased by $5,200 or 54.2% to $4.400 for the three months ended June 30, 2023 from $9,600 for the same periods of 2022. The decrease was primarily due to lower revenue from stocking order licenses during the three months ended June 30, 2023

 

Software Service Fees

 

Service fees attributable to our Windows product service increased by $126,400 or 16.3% to $903,000 during three months ended June 30, 2023, from $776,600 for the same period in 2022. The increase was due to an increase in maintenance renewals from existing customers and higher subscription license orders.

 

Service fees revenue attributable to our UNIX products decreased by $4,900 or 15.3% to $27,100 during the three months ended June 30, 2023, from $32,000 for the same period in 2022. The decrease was primarily the result of the lower level of UNIX product sales throughout the prior year and an expiration of a long-term maintenance contract.

 

Cost of Revenues

 

Cost of revenue is comprised primarily of software service costs, which represent the costs of customer service. Also included in cost of revenue are software product costs, which are primarily comprised of the amortization of costs associated with licenses to third party software included in our product offerings, and the required import tax withholdings from Brazil resellers. We incur no significant shipping or packaging costs as virtually all of our deliveries are made via electronic means over the Internet.

 

Cost of revenue for the three months ended June 30, 2023 increased by $30,000, or 61.5%, to $78,800 for the three months ended June 30, 2023 from $48,800 for the same period in 2022. Cost of revenue 7.4% of total revenue for the three months ended June 30, 2023 and 5.1% for the same period in 2022. The increase was due to some increase in personnel costs and combined with import tax withholdings associated with higher revenue from Brazil resellers for the three-month period ended June 30, 2023.

 

Selling and Marketing Expenses

 

Selling and marketing expenses primarily consisted of employee, outside services and travel and entertainment expenses.

 

Selling and marketing expenses increased by $41,600, or 13.2%, to $357,500 for the three months ended June 30, 2023 from $315,900 for the same period in 2022. Selling and marketing expenses represented approximately 33.8% and 32.9% of total revenue for the three months ended June 30 2023 and 2022, respectively. The increase in selling and marketing expenses was due to an increase in consulting services as we continue to expand our sales and marketing initiatives for the three months ended June 30, 2023.

 

 

General and Administrative Expenses

 

General and administrative expenses primarily consist of employee costs, legal, accounting, other professional services (including those related to our patents), rent, travel and entertainment and insurance. Certain costs associated with being a publicly held corporation are also included in general and administrative expenses, as well as bad debt expense.

 

General and administrative expenses increased by $216,500, or 130.5%, to $382,400 for the three months ended June 30, 2023 from $165,900 for the same period in 2022. General and administrative expenses represented approximately 36.1% and 17.3% of total revenue for the three months ended June 30, 2023 and 2022, respectively.

 

The increase in general and administrative expense was primarily due to employee related expenses during the three months ended June 30, 2023.

 

Research and Development Expenses

 

Research and development expenses consist primarily of employee costs, payments to contract programmers, software subscriptions, travel and entertainment for our engineers, and all rent for our leased engineering facilities.

 

Research and development expenses increased by $35,500, or 9.3% to $416,300 for the three months ended June 30, 2023 from $380,800 for the same period in 2022. This represented approximately 39.3% and 39.6% of total revenue for the three months ended June 30, 2023 and 2022, respectively.

 

The increase in research and development expense was primarily due to an increase personnel and software subscriptions during the three months ended June 30, 2023.

 

Other Income

 

Other income increased by $70,900 for the three months ended June 30, 2023, compared to the same periods in 2022. The increase primarily due to interest earned for the three months ended June 30,2023, compared to an unrealized loss from a marketable securities account during the same periods in 2022.

 

Results of Operations for the Six-Month Periods Ended June 30, 2023 and 2022

 

		For the Six Months Ended
		June 30,				June 30,
		2023				2022				$ Change
		(Unaudited)				(Unaudited)
Revenues		$	2,101,500			$	1,911,800			$	189,700
Cost of revenues			154,600				126,200				28,400
Gross profit			1,946,900				1,785,600				161,300
Operating expenses:
Selling and marketing			668,400				439,000				229,400
General and administrative			627,500				370,800				256,700
Research and development			812,900				763,500				49,400
Total operating expenses			2,108,800				1,573,300				535,500
Income from operations			(161,900	)			212,300				(374,200	)
Other income:
Realized gain on marketable securities			17,700				(85,500	)			103,200
Interest and other income			44,200				1,000				43,200
			61,900				(84,500	)			146,400
Income (loss) before provision for income taxes			(100,000	)			127,800				(227,800	)
Provision for income taxes			-				-				-
Net income (loss)		$	(100,000	)		$	127,800			$	(227,800	)

 

 

Revenues

 

The following is a summary of our revenues by category for the six months ended June 30, 2023 and 2022.

 

		For the Six Months Ended
		June 30,				June 30,
		2023				2022				$ Change
Revenue
Software Licenses
Windows		$	222,700			$	299,500			$	(76,800	)
UNIX/Linux			13,900				14,000				(100	)
Total			236,600				313,500				(76,900	)
Software Service Fees
Windows			1,760,100				1,491,200				268,900
UNIX/Linux			53,900				65,100				(11,200	)
Total			1,814,000				1,556,300				257,700
Other			50,900				42,000				8,900
		$	2,101,500			$	1,911,800			$	189,700

 

Software Licenses

 

Windows software licenses revenue decreased by $76,800 or 25.6% to $222,700 during the six months ended June 30, 2023, from $299,500 for the same period in 2022. The decrease for the six months ended June 30,2023 was due to lower license orders from standard licenses.

 

Software licenses revenue from our UNIX/Linux products decreased by $100 or 0.7% to $13,900 for the six months ended June 30, 2023 from $14,000 for the same period of 2022.

 

Software Service Fees

 

Service fees attributable to our Windows product service increased by $268,800 or 18.0% to $1,760,100 during the six months ended June 30, 2023, from $1,491,200 for the same period in 2022. The increase was due to an increase in maintenance renewals from existing customers and higher subscription license orders.

 

Service fees revenue attributable to our UNIX products decreased by $11,200 or 17.2% to $53.900 during the six months ended June 30, 2023, from $65,100 for the same period in 2022. The decrease was primarily the result of the lower level of UNIX product sales throughout the prior year and an expiration of a long-term maintenance contract.

 

Other

 

Other revenue consists of private labeling fees, professional services, and other non-recurring revenues. Other revenue increased by $8,900 or 21,2% for the six months ended June 30, 2023, compared to the same period in 2022. The increase was primarily due to an increase in professional service revenue.

 

Cost of Revenues

 

Cost of revenue is comprised primarily of software service costs, which represent the costs of customer service. Also included in cost of revenue are software product costs, which are primarily comprised of the amortization of costs associated with licenses to third party software included in our product offerings, and the required import tax withholdings from Brazil resellers. We incur no significant shipping or packaging costs as virtually all of our deliveries are made via electronic means over the Internet.

 

Cost of revenue for the six months ended June 30, 2022 increased by $28,400, or 22.5%, to $154,600 for the six months ended June 30, 2023 from $126,200 for the same period in 2022. Cost of revenue represented 7.4% and 6.6% of total revenue for the six months ended June 30, 2023 and 2022, respectively. The primarily increase was due increase in personnel expense and import tax withholdings associated with higher revenue from Brazil resellers for the six-month period ended June 30, 2023.

 

 

Selling and Marketing Expenses

 

Selling and marketing expenses primarily consisted of employee, outside services and travel and entertainment expenses.

 

Selling and marketing expenses increased by $229,400, or 52.3%, to $668,400 for the six months ended June 30, 2023 from $439,000 for the same period in 2022. Selling and marketing expenses represented approximately 31.8% and 23.5% of total revenue for the six months ended June 2023 and 2022, respectively. The increase in selling and marketing expenses was due to an increase in personnel related expenses and consulting services as we continue to expand our sales and marketing initiatives.

 

General and Administrative Expenses

 

General and administrative expenses primarily consist of employee costs, legal, accounting, board fees, other professional services (including those related to our patents), rent, travel and entertainment and insurance. Certain costs associated with being a publicly held corporation are also included in general and administrative expenses, as well as bad debt expense.

 

General and administrative expenses decreased by $256,700, or 69.2%, to $627,500 for the six months ended June 30, 2023 from $370,800 for the same period in 2022. General and administrative expenses represented approximately 29.9% and 19.4% of total revenue for the six months ended June 30, 2023 and 2022, respectively.

 

The increase in general and administrative expense was primarily due to increase in personnel related expenses.

 

Research and Development Expenses

 

Research and development expenses consist primarily of employee costs, payments to contract programmers, software subscriptions, travel and entertainment for our engineers, and all rent for our leased engineering facilities.

 

Research and development expenses increased by $49,400 or 6.5% to $812,900 for the six months ended June 30, 2023 from $763,500 for the same period in 2022. This represented approximately 38.7% and 39.9% of total revenue for the six months ended June 30, 2023 and 2022, respectively.

 

The increase in research and development expense was primarily due to increase in personnel related expenses and software subscriptions.

 

Other Income

 

Other income increased by $146,400 for the six months ended June 30, 2023, compare to the same periods in 2022 was primarily related to income earned for the six month ended June 30,2023 while during prior year for the same periods, the Company had unrealized losses from a marketable securities account.

 

Liquidity and Capital Resources

 

As of June 30, 2023, we had cash of $5,627,700 and a working capital position of $4,148,000 as compared to cash of $5,037,300 and a working capital position of $4,307,400 at December 31, 2022. The increase in cash as of June 30, 2023 was the result of cash provided by operations and cash provided by investing activities. We expect our results from operations and capital resources will be sufficient to fund our operations for at least the next 12 months.

 

The following is a summary of our cash flows from operating, investing and financing activities for the six months ended June 30, 2023 and 2022.

 

		For the Three Months Ended
		June 30,				June 30,
		2023				2022
Cash flows provided by operating activities		$	254,000			$	462,000
Cash flows provided (used) by investing activities		$	336,400			$	(10,100	)
Cash flows provided by financing activities		$	-			$	-

 

Net cash flows provided by operating activities for the six months ended June 30, 2023 was $254,000 while net cash flows provided for the same periods ended June 30,2022 was $462,000. The decrease in cash flows provided by operating activities is the result of net loss, increase in accrued expenses and change in value in marketable securities compared to the prior year period.

 

The Company had net cash flows of $336,400 provided by investing activities from the proceeds of the sale of marketable securities for the six months ended June 30, 2023, while the Company had net cash outflows of $10,100 used in marketable securities for the same periods ended June 30, 2022.

 

 

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

 

Not applicable.

 

ITEM 4. Controls and Procedures

 

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2023.

 

There has not been any change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended June 30, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

PART II. OTHER INFORMATION

 

ITEM 1. Legal Proceedings

 

Not applicable

 

ITEM 1A. Risk Factors

 

There have been no material changes in our risk factors from those set forth under Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the Securities and Exchange Commission on April 14, 2023.

 

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

ITEM 3. Defaults Upon Senior Securities

 

Not applicable

 

ITEM 4. Mine Safety Disclosures

 

Not applicable

 

ITEM 5. Exhibits

 

Exhibit Number		Exhibit Description
31		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32		Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	hopTo Inc.
	(Registrant)
	Date:	August 21, 2023
	By:	/s/ Jonathon R. Skeels
		Jonathon R. Skeels
		Chief Executive Officer (Principal Executive Officer) and
		Interim Chief Financial Officer
		(Principal Financial Officer and
		Principal Accounting Officer)

 

 

 

EXHIBIT 31

 

CERTIFICATIONS

 

I, Jonathon R. Skeels, certify that:

 

1.	I have reviewed this Quarterly Report on Form 10-Q of hopTo Inc. (“registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Dated: August 21, 2023

 

By:	/s/ Jonathon R. Skeels
	Jonathon R. Skeels
	Chief Executive Officer and Interim Chief Financial Officer

 

 

 

Exhibit 32

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report on Form 10-Q of hopTo Inc. (the “Company”) for the quarter ending June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I Jonathon R. Skeels, Chief Executive Officer and Interim Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated: August 21, 2023	By:	/s/ Jonathon R. Skeels
		Jonathon R. Skeels
		Chief Executive Officer, Interim Chief Financial Officer

 

 

v3.23.2

Cover - shares	6 Months Ended
	Jun. 30, 2023	Aug. 21, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	0-21683
Entity Registrant Name	hopTo Inc.
Entity Central Index Key	0001021435
Entity Tax Identification Number	13-3899021
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	189 North Main St.
Entity Address, Address Line Two	Suite 102
Entity Address, City or Town	Concord
Entity Address, State or Province	NH
Entity Address, Postal Zip Code	03301
City Area Code	(800)
Local Phone Number	472-7466
Title of 12(b) Security	Common
Trading Symbol	HPTO
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		18,976,165

v3.23.2

Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 5,627,700	$ 5,037,300
Marketable securities		318,700
Accounts receivable, net	499,700	511,200
Prepaid expenses and other current assets	124,300	102,600
Total current assets	6,251,700	5,969,800
Right-of-use assets	36,400	51,600
Property and equipment, net	3,700	5,300
Other assets	22,800	22,900
Total assets	6,314,600	6,049,600
Current liabilities
Accounts payable	215,200	234,200
Accrued expenses	116,300	61,800
Accrued wages	285,400	150,000
Lease liabilities- current	10,300	10,300
Deferred revenue- current	1,476,500	1,206,100
Total current liabilities	2,103,700	1,662,400
Long-term liabilities
Lease liabilities	25,700	40,900
Deferred revenue	203,700	264,800
Total liabilities	2,333,100	1,968,100
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding as of June 30, 2023 and December 31, 2022
Common stock, $0.0001 par value, 195,000,000 shares authorized, 18,976,165 and 18,826,342 shares issued and outstanding as of June 30, 2023 and December 31, 2022	1,900	1,900
Additional paid-in capital	82,145,100	82,145,100
Accumulated deficit	(78,165,500)	(78,065,500)
Total stockholders’ equity	3,981,500	4,081,500
Total liabilities and stockholders’ equity	$ 6,314,600	$ 6,049,600

v3.23.2

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
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	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	195,000,000	195,000,000
Common stock, shares issued	18,976,165	18,826,342
Common stock, shares outstanding	18,976,165	18,826,342

v3.23.2

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenues:
Total revenue	$ 1,058,400	$ 961,600	$ 2,101,500	$ 1,911,800
Cost of revenue:
Total cost of revenue	78,800	48,800	154,600	126,200
Gross profit	979,600	912,800	1,946,900	1,785,600
Operating expenses:
Selling and marketing	357,500	315,900	668,400	439,000
General and administrative	382,400	165,900	627,500	370,800
Research and development	416,300	380,800	812,900	763,500
Total operating expenses	1,156,200	862,600	2,108,800	1,573,300
Income from operations	(176,600)	50,200	(161,900)	212,300
Other income (loss):
Unrealized gain (loss) in marketable securities		(29,800)	17,700	(85,500)
Interest and other income	42,000	900	44,200	1,000
Other income (loss)	42,000	(28,900)	61,900	(84,500)
Income (loss) before provision for income taxes	(134,600)	21,300	(100,000)	127,800
Provision for income taxes
Net income (loss)	$ (134,600)	$ 21,300	$ (100,000)	$ 127,800
Net income (loss) per share, basic	$ (0.01)	$ 0.00	$ (0.01)	$ 0.01
Net income (loss) per share, diluted	$ (0.01)	$ 0.00	$ (0.01)	$ 0.01
Weighted average number of common shares outstanding
Basic	18,901,253	18,846,664	18,863,797	18,848,658
Diluted	18,901,253	19,089,238	18,863,797	19,901,102
License [Member]
Revenues:
Total revenue	$ 98,400	$ 132,000	$ 236,600	$ 313,500
Technology Service [Member]
Revenues:
Total revenue	930,100	808,600	1,814,000	1,556,300
Service, Other [Member]
Revenues:
Total revenue	29,900	21,000	50,900	42,000
Service [Member]
Cost of revenue:
Total cost of revenue	27,700	13,500	45,600	27,000
Product [Member]
Cost of revenue:
Total cost of revenue	$ 51,100	$ 35,300	$ 109,000	$ 99,200

v3.23.2

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2021	$ 1,900	$ 82,155,200	$ (78,188,500)	$ 3,968,600
Balance, shares at Dec. 31, 2021	18,850,675
Net Income (loss)			106,500	106,500
Balance at Mar. 31, 2022	$ 1,900	82,155,200	(78,082,000)	4,075,100
Balance, shares at Mar. 31, 2022	18,850,675
Balance at Dec. 31, 2021	$ 1,900	82,155,200	(78,188,500)	3,968,600
Balance, shares at Dec. 31, 2021	18,850,675
Net Income (loss)				127,800
Balance at Jun. 30, 2022	$ 1,900	82,145,100	(78,060,700)	4,086,300
Balance, shares at Jun. 30, 2022	18,826,342
Balance at Mar. 31, 2022	$ 1,900	82,155,200	(78,082,000)	4,075,100
Balance, shares at Mar. 31, 2022	18,850,675
Net Income (loss)			21,300	21,300
Purchase of hopTo treasury stock		(10,100)		(10,100)
Purchase of hopTo treasury stock, shares	(24,333)
Balance at Jun. 30, 2022	$ 1,900	82,145,100	(78,060,700)	4,086,300
Balance, shares at Jun. 30, 2022	18,826,342
Balance at Dec. 31, 2022	$ 1,900	82,145,100	(78,065,500)	4,081,500
Balance, shares at Dec. 31, 2022	18,826,342
Net Income (loss)			34,600	34,600
Balance at Mar. 31, 2023	$ 1,900	82,145,100	(78,030,900)	4,116,100
Balance, shares at Mar. 31, 2023	18,826,342
Balance at Dec. 31, 2022	$ 1,900	82,145,100	(78,065,500)	4,081,500
Balance, shares at Dec. 31, 2022	18,826,342
Net Income (loss)				(100,000)
Balance at Jun. 30, 2023	$ 1,900	82,145,100	(78,165,500)	3,981,500
Balance, shares at Jun. 30, 2023	18,976,165
Balance at Mar. 31, 2023	$ 1,900	82,145,100	(78,030,900)	4,116,100
Balance, shares at Mar. 31, 2023	18,826,342
Net Income (loss)			(134,600)	(134,600)
Warrant shares exercised
Issuance of shares due to exercise of warrants, shares	149,823
Balance at Jun. 30, 2023	$ 1,900	$ 82,145,100	$ (78,165,500)	$ 3,981,500
Balance, shares at Jun. 30, 2023	18,976,165

v3.23.2

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities
Net income (loss)	$ (100,000)	$ 127,800
Adjustments to reconcile net income to net cash provided by and used in operating activities:
Depreciation	1,600	1,300
Changes in allowance for doubtful accounts	(800)	1,100
Realized (gain) loss from marketable securities	(17,700)	85,500
Changes in operating assets and liabilities:
Accounts receivable	12,300	52,800
Prepaid expenses and other current assets	(21,600)	(46,500)
Accounts payable and accrued expenses	170,900	26,500
Lease liabilities		(400)
Deferred revenue	209,300	213,900
Net cash provided by operating activities	254,000	462,000
Cash flows from investing activities
Purchase of hopTo common stock		(10,100)
Proceeds from sale of marketable securities	336,400
Net cash provided (used) by investing activities	336,400	(10,100)
Net change in cash	590,400	451,900
Cash and cash equivalents, beginning of the period	5,037,300	4,755,300
Cash and cash equivalents, end of the period	$ 5,627,700	$ 5,207,200

v3.23.2

Organization	6 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
Organization	1. Organization   hopTo Inc., a Delaware corporation, through its wholly-owned subsidiary GraphOn Corporation (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, hosting service providers, 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.

v3.23.2

Significant Accounting Policies	6 Months Ended
	Jun. 30, 2023
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, 2022, which was filed with the SEC on April 14, 2023 (“2022 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, 2023, 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 estimates include the valuation of the allowances for doubtful accounts, depreciation of long-lived assets, timing of revenue recognized over time, allowances for deferred tax assets and accruals of liabilities.     Revenue Recognition   The Company markets and licenses its products indirectly through channel distributors, value-added resellers, independent software vendors (“ISVs”), 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.   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 the Company portal. We recognize revenue upon delivery of these licenses.   Services Revenue   The Company has maintenance contracts that entitle customers to support and certain updates to the product. Revenue from maintenance contracts is recognized ratably over the related contract period, which generally ranges from one to five years.   Subscription Revenue   The Company sells subscription licenses that provide the customer with the right to use the software, maintenance and support and certain updates to the product. Subscription licenses are delivered electronically by either the Company’s cloud licensing server or by sending a term license key to the customer to download the related software from the Company portal. Revenue from subscription licenses is recognized ratably over the related contract period, which generally ranges from one month to one year.   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.   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 June 30, 2023 and December 31, 2022, the allowance for doubtful accounts totaled $4,800 and $5,600, respectively.     Concentration of Credit Risk   For the six months ended June 30, 2023 and June 30, 2022, the Company had four resellers comprising 13.7%,13.6%, 12.2% and 11.4%, four resellers comprising 12.1%,11.8%, 10.6% and 10.1%, respectively, of total sales.   As of June 30, 2023 and December 31, 2022, the Company had three resellers comprising 23.0%, 21.3%, and 12.8%, four resellers comprising 18.5%, 18.3%, 17.4% and 16.0%, respectively, of net accounts receivable.   For the purposes of this description, “sales” refers to the dollar value of orders received from these customers and partners in the period indicated. The 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. The loss of one of these resellers would not have a material impact as the Company could take over the end customer relationship.   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 reflects per share amounts that would have resulted if diluted potential common stock had been converted to common stock. The company had no dilutive common share equivalents as of June 30, 2023, compared to 248,216 of outstanding in-the-money warrants, were included in the computation of diluted net income per share using the Treasury Stock Method during December 31,2022. During the three months ended June 30, 2023 and 2022, the Company had total common stock equivalents of 0 and 3,200, respectively, which were excluded from the computation of net income 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.

v3.23.2

Property and Equipment	6 Months Ended
	Jun. 30, 2023
Property, Plant and Equipment [Abstract]
Property and Equipment	3. Property and Equipment   Property and equipment consisted of the following.   Schedule of Property and Equipment     June 30,     December 31,       2023     2022                 Equipment   $ 162,400     $ 164,100   Furniture and fixtures     1,600       1,600   Property and equipment gross     164,000       165,700                     Less: accumulated depreciation     (160,300 )     (160,400 ) Property and equipment net   $ 3,700     $ 5,300     Depreciation expense amounted to $1,600 and $1,300 for the six months ended June 30, 2023 and 2022, respectively.

v3.23.2

Stockholders’ Equity	6 Months Ended
	Jun. 30, 2023
Equity [Abstract]
Stockholders’ Equity	4. Stockholders’ Equity   Shares of Common Stock Issued   During the three and six-month periods ending June 30, 2023, the Company issued 0 and 149,216 shares and for the same periods ending 2022, the Company did not issue any shares of common stock.   Warrants   As of June 30, 2023 and December 31, 2022, the Company had 0 and 248,216 warrants outstanding. There were 149,216 shares of warrants exercised during the three-month periods ending June 30, 2023 and the remaining 98,393 shares were expired as of were expired on May 20, 2023.

v3.23.2

Sales by Geographical Location	6 Months Ended
	Jun. 30, 2023
Sales By Geographical Location
Sales by Geographical Location	5. Sales by Geographical Location   Revenue by country for the three and six months ended June 30, 2023 and 2022 was as follow :   Schedule of Revenue by Country     2023     2022     2023     2022       Three Months Ended     Six Months Ended       2023     2022     2023     2022   Revenue by Country                                 United States   $ 441,800       388,900       859,500       779,500   Brazil     291,100       256,500       573,100       467,500   Japan     81,200       53,000       175,200       125,900   Other Countries     244,300       263,200       493,700       538,900   Total   $ 1,058,400     $ 961,600       2,101,500       1,911,800

v3.23.2

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2023
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 six months ended June 30, 2023 and 2022, the Company contributed a total of $9,400 and $15,400, 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.   Lease   Supplemental balance sheet information related to leases as of June 30, 2023 is as follows:    Schedule of Operating Leases Future Minimum Lease Payments           Future minimum lease payments:         2023     15,500   2024     20,700   Thereafter     -   Total future minimum lease payments   $ 36,200   Less: Lease imputed interest     200   Total   $ 36,000     The Company leases its’ headquarters office in Concord, New Hampshire under a thirty-six-month noncancelable operating lease agreement which will expire on August 31, 2024. The terms of certain lease agreement provide for increasing rental payments at fixed twelve-month intervals.

v3.23.2

Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2023
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, 2022, which was filed with the SEC on April 14, 2023 (“2022 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, 2023, 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 estimates include the valuation of the allowances for doubtful accounts, depreciation of long-lived assets, timing of revenue recognized over time, allowances for deferred tax assets and accruals of liabilities.
Revenue Recognition	Revenue Recognition   The Company markets and licenses its products indirectly through channel distributors, value-added resellers, independent software vendors (“ISVs”), 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.   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 the Company portal. We recognize revenue upon delivery of these licenses.   Services Revenue   The Company has maintenance contracts that entitle customers to support and certain updates to the product. Revenue from maintenance contracts is recognized ratably over the related contract period, which generally ranges from one to five years.   Subscription Revenue   The Company sells subscription licenses that provide the customer with the right to use the software, maintenance and support and certain updates to the product. Subscription licenses are delivered electronically by either the Company’s cloud licensing server or by sending a term license key to the customer to download the related software from the Company portal. Revenue from subscription licenses is recognized ratably over the related contract period, which generally ranges from one month to one year.   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.
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 June 30, 2023 and December 31, 2022, the allowance for doubtful accounts totaled $4,800 and $5,600, respectively.
Concentration of Credit Risk	Concentration of Credit Risk   For the six months ended June 30, 2023 and June 30, 2022, the Company had four resellers comprising 13.7%,13.6%, 12.2% and 11.4%, four resellers comprising 12.1%,11.8%, 10.6% and 10.1%, respectively, of total sales.   As of June 30, 2023 and December 31, 2022, the Company had three resellers comprising 23.0%, 21.3%, and 12.8%, four resellers comprising 18.5%, 18.3%, 17.4% and 16.0%, respectively, of net accounts receivable.   For the purposes of this description, “sales” refers to the dollar value of orders received from these customers and partners in the period indicated. The 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. The loss of one of these resellers would not have a material impact as the Company could take over the end customer relationship.
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 reflects per share amounts that would have resulted if diluted potential common stock had been converted to common stock. The company had no dilutive common share equivalents as of June 30, 2023, compared to 248,216 of outstanding in-the-money warrants, were included in the computation of diluted net income per share using the Treasury Stock Method during December 31,2022. During the three months ended June 30, 2023 and 2022, the Company had total common stock equivalents of 0 and 3,200, respectively, which were excluded from the computation of net income 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.

v3.23.2

Property and Equipment (Tables)	6 Months Ended
	Jun. 30, 2023
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment	Property and equipment consisted of the following.   Schedule of Property and Equipment     June 30,     December 31,       2023     2022                 Equipment   $ 162,400     $ 164,100   Furniture and fixtures     1,600       1,600   Property and equipment gross     164,000       165,700                     Less: accumulated depreciation     (160,300 )     (160,400 ) Property and equipment net   $ 3,700     $ 5,300

v3.23.2

Sales by Geographical Location (Tables)	6 Months Ended
	Jun. 30, 2023
Sales By Geographical Location
Schedule of Revenue by Country	Revenue by country for the three and six months ended June 30, 2023 and 2022 was as follow :   Schedule of Revenue by Country     2023     2022     2023     2022       Three Months Ended     Six Months Ended       2023     2022     2023     2022   Revenue by Country                                 United States   $ 441,800       388,900       859,500       779,500   Brazil     291,100       256,500       573,100       467,500   Japan     81,200       53,000       175,200       125,900   Other Countries     244,300       263,200       493,700       538,900   Total   $ 1,058,400     $ 961,600       2,101,500       1,911,800

v3.23.2

Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Schedule of Operating Leases Future Minimum Lease Payments	Supplemental balance sheet information related to leases as of June 30, 2023 is as follows:    Schedule of Operating Leases Future Minimum Lease Payments           Future minimum lease payments:         2023     15,500   2024     20,700   Thereafter     -   Total future minimum lease payments   $ 36,200   Less: Lease imputed interest     200   Total   $ 36,000

v3.23.2

Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Product Information [Line Items]
Allowance for doubtful accounts	$ 4,800		$ 4,800		$ 5,600
Number of common shares equivalents of outstanding in money warrants			0		248,216
Anti-dilutive shares	0	3,200
Revenue Benchmark [Member] | Resellers One [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration of credit risk percentage			13.70%	12.10%
Revenue Benchmark [Member] | Resellers Two [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration of credit risk percentage			13.60%	11.80%
Revenue Benchmark [Member] | Resellers Three [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration of credit risk percentage			12.20%	10.60%
Revenue Benchmark [Member] | Resellers Four [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration of credit risk percentage			11.40%	10.10%
Accounts Receivable [Member] | Resellers One [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration of credit risk percentage			23.00%		18.50%
Accounts Receivable [Member] | Resellers Two [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration of credit risk percentage			21.30%		18.30%
Accounts Receivable [Member] | Resellers Three [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration of credit risk percentage			12.80%		17.40%
Accounts Receivable [Member] | Resellers Four [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration of credit risk percentage					16.00%

v3.23.2

Schedule of Property and Equipment (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment gross	$ 164,000	$ 165,700
Less: accumulated depreciation	(160,300)	(160,400)
Property and equipment net	3,700	5,300
Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment gross	162,400	164,100
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment gross	$ 1,600	$ 1,600

v3.23.2

Property and Equipment (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 1,600	$ 1,300

v3.23.2

Stockholders’ Equity (Details Narrative) - shares	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023	Dec. 31, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of common stock shares issued	0	149,216
Warrant [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Warrants outstanding	0	0	248,216
Number of warrant exercised	149,216
Number of warrant expired	98,393
Warrants maturity date	May 20, 2023	May 20, 2023

v3.23.2

Schedule of Revenue by Country (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Total	$ 1,058,400	$ 961,600	$ 2,101,500	$ 1,911,800
UNITED STATES
Total	441,800	388,900	859,500	779,500
BRAZIL
Total	291,100	256,500	573,100	467,500
JAPAN
Total	81,200	53,000	175,200	125,900
Other Countries [Member]
Total	$ 244,300	$ 263,200	$ 493,700	$ 538,900

v3.23.2

Schedule of Operating Leases Future Minimum Lease Payments (Details)	Jun. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2023	$ 15,500
2024	20,700
Thereafter
Total future minimum lease payments	36,200
Less: Lease imputed interest	200
Total	$ 36,000

v3.23.2

Commitments and Contingencies (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Profit sharing plans	$ 9,400	$ 15,400

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