SOURCE: hopTo Inc

hopTo Inc

November 21, 2016 16:01 ET

hopTo Inc. Announces Third Quarter 2016 Business Update and Results

CAMPBELL, CA--(Marketwired - Nov 21, 2016) -  hopTo Inc. (OTCQB: HPTO), developer and provider of the most comprehensive mobile productivity platform, today announced its financial results for the third quarter ended September 30, 2016.

Third Quarter 2016 Financial Update:

  • Revenue of $899 thousand  
  • Net Loss of $462 thousand  
  • Basic and diluted loss per share of $0.05  

Third Quarter 2016 Operational Summary and Business Update

"As we have previously communicated to our shareholders in our August 15, 2016 earnings call and our Form 10-Q filed with the Securities and Exchange Commission ("SEC") as well as our other SEC filings, throughout the first half of 2016 we did not succeed in monetizing our hopTo Work product despite our best efforts with the limited resources available to us," stated Eldad Eilam, President and CEO of hopTo Inc.

"Despite this lack of success with hopTo Work, our GO-Global business continues to generate positive cash flow and, while it is seeing some reduction in revenue, we expect it to continue to generate cash. Owning and operating GO-Global has always been an important aspect of our overall company and provides us and our shareholders with some hedge against the risk and expense of seeking to launch a new product like hopTo Work." 

"We continue to work to extract value from the hopTo technology, intellectual property and software that we have built. We are also evaluating opportunities related to GO-Global. Although there is no certainty as to timing or success of these efforts, and shareholders should not place any significant reliance on the outcome of such efforts unless and until definitive agreements are reached. This may include the sale of certain of our hopTo software products, the sale of patents, and the monetization of the GO-Global business or some combinations of these transactions. To assist with the possible sale of patents we have retained the services of Aqua Licensing LLC, a specialist in the marketing and sales of IP portfolios. "

"Although we continue to believe we have a number of opportunities to extract value from our hopTo and GO-Global assets, there are significant risks and uncertainties associated with those efforts. Our Quarterly Report on Form 10-Q that was filed on August 15, 2016 included additional new risk factors in this regard. In addition, although our GO-Global business continues to generate cash, due to our recent conclusion that it is unlikely we will generate revenue from hopTo Work in the reasonably foreseeable future, our Quarterly Report on Form 10-Q which was filed today with the SEC continues to include disclosure regarding our determination that there are substantial doubts about our ability to continue as a going concern. We nevertheless intend to further manage our expenses to preserve as many opportunities for the company as reasonably possible. In particular, we will seek to preserve resources to enable the continued operation and customer support of our GO-Global business, which we believe is achievable given the positive cash flow profile of that business. Although maintaining our SEC filing status is a significant expense, we are considering all options to preserve value for shareholders, including potentially suspending or terminating our filing status, however we have not made any decision to do so."

Results for the Nine Months Ended September 30, 2016
In the nine months of Fiscal Year 2016, the Company recognized $2.86 million in revenue, a year-over-year decrease of approximately 28% from $3.96 million in 2015. This revenue is entirely from the Company's Go-Global products and services and the decrease is due primarily to a number of unique large orders which we received in the first half of 2015. Gross profit for the first nine months of 2016 was $2.73 million, compared to $3.64 million   for the same period of 2015, a year over year decrease of 25% commensurate with the change in revenue.

For the nine months of 2016, the Company reported an operating loss of $1.9 million, which was an improvement of approximately 45% compared with the $3.49 million loss from the same period last year.

The total operating expense for the nine months of 2016 was $4.64 million, which is a year-over-year improvement of $2.49 million from $7.13 million that we reported for the same period in 2015.

Third Quarter Ended September 30, 2016
Total revenue for the third quarter 2016 of $899 thousand represents a decrease of 20% from $1.13 million for the same period in the prior year. This revenue is entirely from the Company's Go-Global products and services and the decrease is due primarily to a number of unique large orders which we received in the second quarter of 2015.

Gross profit for the third quarter of 2016 amounted to $890 thousand  as compared to $1.02 million, for the same period in 2015.

Total operating expenses for the third quarter were $1.4 million, compared to $2.23 million for the same period in 2015.

hopTo reported a net loss for the quarter ended June 30, 2016 of $462 thousand, or $0.05 per basic and diluted share  , compared to $1.21 million   or $0.14 per basic and diluted share  for the same period in 2015.

As of September 30, 2016 the Company had cash of $364 thousand and accounts receivable of $150 thousand.

Investor Communications
As part of our continued expense management, hopTo Inc. will not be hosting an investor conference call to discuss its financial results for this quarter. 

In lieu of a conference call, we invite shareholders to submit questions via email to the following email address:

We will accumulate questions for 48 hours after the filing of our Form 10-Q on November 21, 2016. We will review the questions and we will use our best efforts to provide written answers to those questions that we believe we can answer, subject to normal confidentiality policies, via a Form 8-K that we intend to file with the SEC on or before November 30, 2016. We will also post the answers at

About hopTo:
Founded in its current form in 2012, hopTo Inc. is an innovator of a unique mobile productivity workspace platform. The hopTo mobile solution delivers an unparalleled user experience without compromising enterprise security. hopTo brings a new standard of mobile productivity by enabling individuals to Search, Access, Create, Edit and Share content from their mobile devices, efficiently and effectively, by leveraging any combination of on-premise or cloud stored content, documents and data as well as enterprise applications. The company is based in Campbell, CA.

For more information on hopTo, please visit:

This press release contains statements that are forward looking as that term is defined by the United States Private Securities Litigation Reform Act of 1995. These statements include statements regarding future growth and the expected impact of our products on the marketplace. These 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: our lack of cash resources makes it extremely difficult to execute on our efforts to extract value from our hopTo and Go-Global assets, and creates risks that we may be unable to realize full value for such assets; we may be unable to manage our expenses to a degree to preserve our opportunities to extract value from our assets, and may be forced to sell them at unfavorable prices; there is no assurance that any transaction will be achieved for any hopTo assets in a timely manner, on reasonable terms, or at all; and other factors, including those set forth under Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2015 and in other documents we have filed with the SEC, including the new risk factors in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 which was filed on August 15, 2016.

hopTo Inc.            
Condensed Consolidated Balance Sheets            
    September 30,     December 31,  
    2016     2015  
    (Unaudited)     (Unaudited)  
Cash   $ 364,100     $ 1,777,300  
Accounts receivable, net     150,500       434,900  
Prepaid expenses     98,300       139,200  
Total current assets     612,900       2,351,400  
Capitalized software, net     -       20,800  
Property and equipment, net     161,600       252,500  
Other assets     109,000       109,000  
Total assets   $ 883,500     $ 2,733,700  
Liabilities and stockholders' deficit                
Accounts payable and accrued liabilities   $ 885,000     $ 1,018,000  
Deferred revenue     1,705,100       2,467,000  
Deferred rent     61,600       21,000  
Capital lease     9,000       8,400  
Other current liabilities     392,900       -  
Total current liabilities     3,053,600       3,514,400  
Warrants liability     -       31,600  
Deposit liability     81,400       81,400  
Deferred revenue     1,704,600       1,465,800  
Deferred rent     9,300       26,700  
Capital lease     -       6,800  
Stockholders' deficit     (3,965,400 )     (2,393,000 )
Total liabilities and stockholders' deficit   $ 883,500     $ 2,733,700  
Condensed Consolidated Statements of Operations  
    Three Months Ended Sep 30,     Nine Months Ended Sep 30,  
    2016     2015     2016     2015  
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  
Revenue   $ 898,500     $ 1,128,800     $ 2,864,400     $ 3,958,700  
Costs of revenue     8,300       108,900       129,500       319,200  
Gross profit     890,200       1,019,900       2,734,900       3,639,500  
Operating expenses                                
Selling and marketing     93,900       419,800       664,600       1,373,500  
General and administrative     821,600       773,300       2,114,600       2,452,400  
Research and development     491,500       1,038,400       1,860,900       3,304,500  
Total operating expenses     1,407,000       2,231,500       4,640,100       7,130,400  
Loss from operations     (516,800 )     (1,211,600 )     (1,905,200 )     (3,490,900 )
Other income (expense) - change in fair value of warrants liability     54,400       (2,400 )     29,300       126,900  
Other income (expense), net     1,100       200       3,700       (100 )
Loss before provision for income tax     (461,300 )     (1,213,800 )     (1,872,200 )     (3,364,100 )
Provision for income tax     700       700       2,300       3,300  
Net loss   $ (462,000 )   $ (1,214,500 )   $ (1,874,500 )   $ (3,367,400 )
Basic and diluted loss per share   $ (0.05 )   $ (0.14 )   $ (0.19 )   $ (0.42 )
Average weighted common shares outstanding - basic and diluted     9,784,163       8,937,264       9,763,111       8,006,689