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Stockholders' Equity | 12 Months Ended
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Dec. 31, 2017
Stockholders' Equity [Abstract] |
Stockholders' Equity |
5. | Stockholders’ Equity
Common Stock On April 1, 2016, the Company entered into two agreements with two consultants to provide services over a nine- month period in exchange for 2,300,000 shares of common stock. The Company calculated a fair value of $690,000 based on the market price of the shares on the date of the agreements. During the third quarter of 2016, the Company and the consultants renegotiated the agreements by extending the service requirement to December 31, 2017. At December 31, 2017 and December 31, 2016, the unamortized portion of these service agreements are $0 and $306,667, respectively. On September 1, 2016, the Company issued 200,000 shares of common stock for $46,000. In connection with this issuance the Company issued 100,000 warrants with an exercise price of $0.50 per share. These warrants are fully vested and expire in two years. In August 2016, the Company issued 125,000 shares of common stock pursuant to sale of two promissory notes in the Offering. In September 2016, the Company issued 62,500 shares of common stock pursuant to the sale of one promissory note in the Offering. In October 2016, the Company issued 62,500 shares of common stock pursuant to the sale of two promissory notes in the Offering. In November 2016, the Company issued 434,782 shares of common stock pursuant to a conversion of an equity contribution into Immudyne PR by the noncontrolling interest. In connection with this issuance the Company issued 217,391 warrants with an exercise price of $0.40 per share. These warrants are fully vested and expire in two years. In December 2016, the Company received proceeds of $30,000 from exercises of options at $0.10 per share. The Company issued 300,000 shares of common stock pursuant to these exercises. On December 23, 2016, the Company issued 75,000 shares of common stock for $17,250. In connection with this issuance the Company issued 37,500 warrants with an exercise price of $0.50 per share. These warrants are fully vested and expire in two years. During 2016, the Company purchased 325,000 shares of outstanding Company common stock through an exchange for a price per share of $0.23 to $0.29. As of the December 31, 2016, these shares being held by the Company valued at cost is $87,053 and are included in treasury stock in the consolidated balance sheet. In January 2017, the Company issued 1,183,490 shares of common stock pursuant to a conversion of Immudyne PR equity contributions of $272,203 into equity of Immudyne, Inc. by the noncontrolling interest. In January 2017, the Company issued 217,391 shares of common stock in relation to issuance of a $210,000 note payable. In the first quarter of 2017, the Company commenced an offering to sell up to 4,000,000 shares of common stock at a price of $0.23 per share and warrants to purchase up to 2,000,000 shares of common stock exercisable any time prior to the second anniversary of the issuance. The warrants are paired with the stock on the basis of one warrant for every two shares of stock purchased. During 2017, the Company received subscriptions in the amount of 2,927,156 shares and issued 1,463,578 warrants and proceeds in the amount of $673,246. Common Stock In March 2017, the Company issued 755,179 shares of common stock for the conversion of the outstanding balance of three notes payable totaling $499,802 (see Note 3). On April 24, 2017, the Company, issued 217,390 shares of common stock pursuant to a stock subscription agreement and the Company issued 108,696 warrants with an exercise price of $0.40 per share for the stated consideration and satisfaction of obligation to pay $50,000 on the 180-day anniversary of the execution of the Sole and Exclusive License, Royalty, and Advisory Agreement dated September 1, 2016 with Pilaris Laboratories, LLC. During the second quarter of 2017 the Company received subscriptions in the amount of 110,000 shares and issued 55,000 warrants and proceeds in the amount of $25,300. On June 1, 2017, the Company entered into an agreement with a consultant to provide services, with a six-month term, and issued 125,000 shares of common stock as compensation. The shares were valued at $45,000 and the Company is recognizing the expense over the term of the agreement. For the year ending December 31, 2017, $45,000 has been expensed and included in compensation and related expenses on the consolidated statement of operations. In July 2017, the Company and JLS Ventures entered into a separate three year incentivized second amendment to a Service Agreement effective July 1, 2017. As compensation, the Company issued 900,000 shares of common stock valued at $432,000. The Company is recognizing the expense over the term of the agreement. For the year ending December 31, 2017, $72,000 has been expensed and included in compensation and related expenses on the consolidated statement of operations. In July 2017, Mark McLaughlin, the Company’s former President and Chief Executive Officer, exercised 1,500,000 warrants on a cashless basis and was issued 1,140,000 shares of common stock. In July 2017, Mark McLaughlin exercised 1,000,000 options on a cashless basis and was issued 800,000 shares of common stock. In July 2017, Mark McLaughlin exercised 339,473 options on a cashless basis and was issued 271,579 shares of common stock. In August 2017, the Company issued 100,000 shares of common stock valued at $40,000 to Acorn Management Partners L.L.C. (“Acorn”) for financial advisory, strategic business planning and other investor relation services. The Company is recognizing the expense over the term of the agreement. For the year ending December 31, 2017, $40,000 has been expensed and included in compensation and related expenses on the consolidated statement of operations. In August 2017, the Company issued 50,000 shares of common stock valued at $20,000 to BV Global Fulfillment, LLC (“BV Global”) for fulfillment services. In November 2017, the Company issued 100,000 shares of common stock valued at $44,000 to an employee as a bonus. In November 2017, the Company issued 135,721 shares of common stock pursuant to a conversion of Immudyne PR equity contributions of $31,216 into equity of Immudyne, Inc. by the noncontrolling interest. Noncontrolling Interest On April 1, 2016, the Company increased its ownership in Immudyne PR from to 78.16667% decreasing the minority interest from 66.7% to 21.83% resulting in a charge to noncontrolling interest and additional paid-in-capital of $91,612. In 2016, the net change in loans, contributions and distributions by other members of Immudyne PR resulted an increase in noncontrolling interests of $63,377. In 2017, the net change in loans, contributions and distributions by other members of Immudyne PR resulted an increase in noncontrolling interests of $119,894. During 2017, the Company issued a total of 1,319,211 shares of common stock and 659,606 warrants pursuant to a conversion of Immudyne PR equity contributions of $303,418 into equity of Immudyne, Inc. by the noncontrolling interest. For the years ended December 31, 2017 and 2016, the net income (loss) of Immudyne PR attributed the Company amounted to $(12,488) and (115,749), respectively. Service-Based Stock Options In May 2016, the Company issued 175,000 service-based options valued at $40,829 to two consultants at exercise prices of $0.20 per share. The options are fully vested and expire in 10 years. In July 2016, the Company issued 50,000 service-based options valued at $12,397 to a consultant with an exercise price of $0.20 per share. The options are fully vested and expire in 10 years. In November 2016, the Company issued 50,000 service-based options valued at $9,980 to a consultant with an exercise price of $0.50 per share. The options are fully vested and expire in 2 years. In January 2017, the Company issued 100,000 service-based options valued at $24,109 to Brunilda McLaughlin as additional compensation in an employment agreement. These options have an exercise price of $0.40 per shares, are fully vested, and expire in 10 years. In February 2017, the Company issued 500,000 service-based options valued at $113,522 to a director with an exercise price of $0.20 per share. The options are fully vested and expire in 10 years. In July 2017, the Company issued 75,000 service-based options valued at $20,985 to Brunilda McLaughlin as additional compensation in an employment agreement. These options have an exercise price of $0.35 per shares, are fully vested, and expire in 10 years. In July 2017, the Company issued 300,000 service-based options valued at $83,939 to three directors with an exercise price of $0.35 per share. The options are fully vested and expire in 10 years. In July 2017, the Company issued 125,000 service-based options valued at $49,219 to a consultant with an exercise price of $0.40 per share. The options are fully vested and expire in 5 years. In July 2017, the Company issued Mark McLaughlin a ten year option to buy 750,000 shares at $0.35 vesting one-third or 250,000 shares upon signing, and 250,000 shares on July 1, 2018 and 250,000 shares on July 1, 2019. Once the options are fully vested, they expire in 10 years. The options vested at December 31, 2017 are valued at $69,949. On October 1, 2017, Michael Borenstein was appointed to our Board of Directors. As a director, Mr. Borenstein received a ten-year, fully-vested option to purchase 100,000 shares of our common stock at a price of $0.35 per share. In addition, Mr. Borenstein received four ten-year options to each purchase 75,000 shares of our common stock at prices of $0.25, $0.25, $0.35, and $0.35 per share, which vest upon the Company earning $4,000,000, $5,000,000, $6,000,000 and $7,000,000 in earnings before income taxes, respectively. In October 2017, the Company entered into a consulting agreement with Mr. Kalkstein and issued him a ten-year option to buy 500,000 shares at $0.40 vesting 30% upon signing, 35% shall vest on the two-year anniversary of this Agreement and 35% shall vest on the three year anniversary of this Agreement. Once the options are fully vested, they expire in 10 years. The fair value of the options upon issuance was $199,897 to be recognized as an expense over the three-year term of the agreement. For the year ended December 31, 2017 $16,658 has been recognized as expense. Accordingly, stock based compensation for the years ended December 31, 2017 and 2016 included $599,354 and $63,206, respectively, related to such service-based stock options. A Summary of the outstanding service-based options are as follows:
|  |  | Number of Options |
| Balance at December 31, 2015 |  |  | 11,025,273 |
| Exercised |  |  | 300,000 |
| Expired |  |  | 50,000 |
| Cancelled |  |  | (250,000 | )
| Issued |  |  | 275,000 |
| Balance at December 31, 2016 |  |  | 10,700,273 |
| Issued |  |  | 1,600,000 |
| Exercised |  |  | (1,339,473 | )
| Balance at December 31, 2017 |  |  | 10,960,800 |
All outstanding options are exercisable and have a cashless exercise provision, and certain options provide for accelerated vesting provisions and modifications, as defined, if the Company is sold or acquired. The intrinsic value of options outstanding and exercisable at December 31, 2017 and 2016 amounted to $1,210,342 and $704,794, respectively. The intrinsic value of options exercised for years ending December 31, 2017 and 2016 was $267,895 and $54,000, respectively. The significant assumptions used to determine the fair values of options issued, using a Black-Scholes option-pricing model are as follows:
| Significant assumptions: |  |  |
| Risk-free interest rate at grant date |  |  | 1.49% - 1.98 | %
| Expected stock price volatility |  |  | 194% - 217 | %
| Expected dividend payout |  |  | — |
| Expected option life-years |  |  | 3 years |
| Weighted average grant date fair value |  | $ | 0.23 - 0.41 |
| Forfeiture rate |  |  | 0 | %
The following is a summary of outstanding service-based options at December 31, 2017:
| Exercise Price |  | Number of Options |  |  | Weighted Average Remaining Contractual Life |
| $0.10 |  |  | 40,800 |  |  |  | 1 year |
| $0.20 - $0.25 |  |  | 8,620,000 |  |  |  | 5 years |
| $0.35 |  |  | 725,000 |  |  |  | 10 years |
| $0.40 |  |  | 1,575,000 |  |  |  | 5 years |
| Total |  |  | 10,960,800 |  |  |  |  |
Performance-Based Stock Options Vested In 2016, the Company granted performance-based options to purchase 2,925,000 shares of common stock at exercise prices of $0.40. The options expire at various dates between 2021 and 2026 and are exercisable upon the Company achieving annual sales revenue of $5,000,000. The Company recorded stock based compensation expense of $120,867 for the year ended December 31, 2016, related to these performance-based options. During the year ended December 31, 2016, the Company cancelled 287,500 of these service-based options issued to two consultants, valued at $17,999. In February 2017, the Company granted performance-based options to purchase 250,000 shares of common stock at exercise prices of $0.40. The options expire in 2027 and are exercisable upon the Company achieving annual sales revenue of $5,000,000. The options are valued at $55,439. During 2017, the Company met the performance criteria. The Company recorded stock based compensation expense of $55,439 for the year ended December 31, 2017, related to these performance-based options. Unvested The Company granted performance-based options to purchase 900,000 shares of common stock at exercise price of $0.80. The options expire at various dates between 2021 and 2027 and are exercisable upon the Company achieving annual sales revenue of $10,000,000. During 2017, these unvested options were cancelled. In July 2017, the Company granted performance-based options to purchase 6,000,000 shares of common stock with an exercise prices of $0.35 per share. The options expire in 10 years and are exercisable upon cash received by Immudyne, Inc. from Immudyne PR between $4,000,000 and $7,000,000. The aggregate fair value of these performance-based options is $1,688,212. In the third quarter of 2017, the Company granted performance-based options to purchase 3,150,000 shares of common stock with an exercise prices of $0.25 and $0.35 per share. The options expire in 10 years and are exercisable upon the company achieving pre-tax earnings benchmarks between $4,000,000 and $7,000,000. The aggregate fair value of these performance-based options is $910,146. In the fourth quarter of 2017, the Company granted performance-based options to purchase 600,000 shares of common stock with an exercise prices of $0.25 and $0.35 per share. The options expire in 10 years and are exercisable upon the company achieving pre-tax earnings benchmarks between $4,000,000 and $7,000,000. The aggregate fair value of these performance-based options is $242,709. Warrants The following is a summary of outstanding and exercisable warrants:
|  |  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Year of Expiration |
| Balance at December 31, 2015 |  |  | 1,750,000 |  |  |  | 0.16 |  |  |  | 2016 - 2017 |
| Issued |  |  | 454,891 |  |  |  | 0.42 |  |  |  | 2018 - 2019 |
| Expired |  |  | (250,000 | ) |  |  | 0.40 |  |  |  | 2016 |
| Balance at December 31, 2016 |  |  | 1,954,981 |  |  |  | 0.19 |  |  |  | 2017 - 2019 |
| Issued |  |  | 2,634,228 |  |  |  | 0.40 |  |  |  | 2018 - 2020 |
| Exercised |  |  | (1,500,000 | ) |  |  | 0.12 |  |  |  | 2017 |
| Balance at December 31, 2017 |  |  | 3,089,119 |  |  |  | 0.40 |  |  |  | 2018 - 2020 |
In September 2016, the Company issued 100,000 warrants with an exercise price of $0.50 per share, in relation to a sale of common stock. These warrants are fully vested and expire in two years. In September 2016, the Company issued 100,000 warrants with exercise prices between $0.20 and $0.50 per share, for consulting services. These warrants are fully vested and expire in three years. The fair value of these warrants are $20,585 and is included in compensation and related expenses in the accompanying statement of operations. In December 2016, the Company issued 37,500 warrants with an exercise price of $0.50 per share, in relation to a sale of common stock. These warrants are fully vested and expire in two years. In December 2016, the Company issued 217,391 warrants with an exercise price of $0.40 per share, in relation to an issuance of common stock. These warrants are fully vested and expire in two years. In January 2017, the Company issued 591,745 warrants with an exercise price of $0.40 per share, in relation to an issuance of common stock for the conversion of an equity contribution into Immudyne PR by the noncontrolling interest. These warrants are fully vested and expire in two years. In March 2017, the Company issued 402,348 warrants with an exercise price of $0.40 per share, in relation to an issuance of common stock for the conversion of debt. These warrants are fully vested and expire in two years. In the first quarter of 2017, the Company issued 1,408,578 warrants with an exercise price of $0.40 per share, in relation to a sale of common stock. These warrants are fully vested and expire in two years. In April 2017, the Company issued 55,000 warrants with an exercise price of $0.40 per share, in relation to a sale of common stock. These warrants are fully vested and expire in two years. In April 2017, the Company issued 108,696 warrants with an exercise price of $0.40 per share, in relation to an issuance of common stock for conversion of a payable. These warrants are fully vested and expire in three years. In November 2017, the Company issued 67,861 warrants with an exercise price of $0.40 per share, in relation to an issuance of common stock for conversion of an equity contribution into Immudyne PR by the noncontrolling interest. These warrants are fully vested and expire in three years. Warrants outstanding and exercisable amounted to 3,089,119 and 1,954,891 at December 31, 2017 and 2016, respectively. The weighted average exercise price of warrants outstanding at December 31, 2017 and 2016 is $0.40 and $0.19, respectively. The warrants expire at various times between December 2017 and September 2019. The fair value of options and warrants granted (or extended) during the years ended December 31, 2017 and 2016, was estimated on the date of grant (or extension) using the Black-Scholes option-pricing model with the following weighted-average assumptions:
|  |  | 2017 |  |  | 2016 |
| Expected volatility |  |  | 215 | % |  |  | 203 | %
| Risk free interest rate |  |  | 1.52 | % |  |  | .88 | %
| Expected dividend yield |  |  | - |  |  |  | - |
| Expected option term (in years) |  |  | 3 |  |  |  | 2 - 3 |
| Weighted average grant date fair value |  | $ | 0.32 |  |  | $ | 0.20 |
Under ASC 815-40-05, Accounting for Derivative Financial Instruments Indexed to and Potentially Settled in a Company’s Own Stock, in the event the Company does not have a sufficient number of authorized and unissued shares of common stock to satisfy obligations for stock options, warrants and other instruments potentially convertible into common stock, the fair value of these instruments should be reported as a liability. Pursuant to the outstanding option, warrant and convertible debt agreements, there is currently no effective registration statement covering the shares of common stock underlying these agreements, which are currently subject to a cashless exercise whereby the holders, at their option, may surrender their options and warrants to the company in exchange for shares of common stock. The number of shares of common stock into which an option or a warrant would be exchangeable in such a cashless exercise depends on both the exercise price of the options or warrant and the market price of the common stock, each at or near the time of exercise. Because the market price is variable, it is possible that we could have insufficient authorized shares to satisfy a cashless exercise. In this scenario, if we were unable to obtain shareholder approval to increase the number of authorized shares, we could be obligated to settle such a cashless exercise with cash rather than by issuing shares of common stock. Further, ASC 815-40-05 requires that we record the potential settlement obligation at each reporting date using the current estimated fair value of these contracts, with any changes in fair value being recorded through our statement of operations. We reported the potential settlement obligation as a liability until such time as these contracts are exercised or expire or we are otherwise able to modify the agreements to remove the provisions which require this treatment. On September 21, 2017, the Company filed an amendment to its certificate of incorporation with the Delaware Secretary of State increasing the number of authorized shares of the Company’s common stock from 50,000,000 to 100,000,000, which enabled the Company to reclassify the derivative liability. The Company measures fair value and discloses fair value measurements for financial assets and liabilities. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:
● | Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
● | Level 2: Observable inputs that are based on inputs not quoted on active markets, but corroborated by market data.
● | Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs, to the extent possible, and considers credit risk in its assessment of fair value. The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2017:
|  |  |  |  |  |  |  | Quoted Prices |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  | in Active |  |  |  | Significant |  |  |  |  |
|  |  |  | Balance at |  |  |  | Markets for |  |  |  | Other |  |  |  | Significant |
|  |  |  | December 31, 2017 |  |  |  | Identical Assets |  |  |  | Observable Inputs |  |  |  | Unobservable Inputs |
|  |  |  |  |  |  |  | (Level 1) |  |  |  | (Level 2) |  |  |  | (Level 3) |
| Fair value of liability for derivative instruments |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
| Total |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2016:
|  |  |  |  |  | Quoted Prices |  |  |  |  |  |  |
|  |  |  |  |  | in Active |  |  | Significant |  |  |  |
|  |  | Balance at |  |  | Markets for |  |  | Other |  |  | Significant |
|  |  | December 31, 2016 |  |  | Identical Assets |  |  | Observable Inputs |  |  | Unobservable Inputs |
|  |  |  |  |  |  |  | (Level 1) |  |  |  | (Level 2) |  |  |  | (Level 3) |
| Fair value of liability for derivative instruments |  | $ | 192,254 |  |  | $ | — |  |  | $ | — |  |  | $ | 192,254 |
| Total |  | $ | 192,254 |  |  | $ | — |  |  | $ | — |  |  | $ | 192,254 |
| Reclass from APIC to derivatives |  |  | 132,858 |
| Newly issued securities as derivatives |  |  | 59,397 |
| Derivative Value 12/31/16 |  |  | 192,254 |
| Settlement upon repayment-convertible debt |  |  | (59,397 | )
| Newly issued securities as derivatives |  |  | 1,098,703 |
| Reclass from APIC to derivatives |  |  | 530,138 |
| Change in fair value |  |  | 48,192 |
| Derivative Value 3/31/17 |  |  | 1,809,890 |
| Newly issued securities as derivatives |  |  | 67,146 |
| Change in fair value |  |  | (922,022 | )
| Derivative Value 6/30/17 |  |  | 955,014 |
| Newly issued securities as derivatives |  |  | 49,219 |
| Reclass from APIC to derivatives |  |  | 115,714 |
| Change in fair value |  |  | 377,213 |
| Derivative Value 9/21/17 |  |  | 1,497,160 |
| Reclass from liability to equity |  |  | (1,497,160 | )
| Derivative Value 9/30/17 |  |  | - |
The fair value of derivative liabilities during the years ended December 31, 2017 and 2016, was estimated using the Black-Scholes option-pricing model with the following assumptions:
|  |  |  | 2017 |  |  |  | 2016 |
| Expected volatility |  |  | 125%-214 | % |  |  | 130%-217 | %
| Risk free interest rate |  |  | 1.24%-2.65 | % |  |  | 1.20%-1.47 | %
| Expected dividend yield |  |  | - |  |  |  | - |
| Expected life (in years) |  |  | 2 - 8 |  |  |  | 1 - 3 |
The unobservable inputs that had the greatest sensitivity to change in valuation were stock price volatility and expected life. Stock Based Compensation The total stock based compensation expense related to Service-Based Stock Options, Performance-Based Stock Options and Warrants issued for service amounted to $1,001,679 and $587,991 for the years ended December 31, 2017 and 2016, respectively. Such amounts are included in compensation and related expenses in the consolidated statement of operations.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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