Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 11, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Immudyne, Inc. | |
Entity Central Index Key | 948,320 | |
Trading Symbol | IMMD | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 44,107,342 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash | $ 436,086 | $ 182,561 |
Trade accounts receivable, net | 519,624 | 444,743 |
Other receivables | 2,250 | |
Product deposit | 74,043 | |
Inventory, net | 127,448 | 160,270 |
Total Current Assets | 1,157,201 | 789,824 |
Current Liabilities | ||
Accounts payable and accrued expenses | 561,833 | 752,930 |
Derivative liabilities | 955,014 | 192,254 |
Convertible notes payable | 100,000 | |
Notes payable, net of discount in 2016 | 74,043 | 106,365 |
Total Current Liabilities | 1,590,890 | 1,151,549 |
Stockholders' Equity (Deficit) | ||
Common stock, $0.01 par value; 50,000,000 shares authorized, 40,995,763 and 35,570,157 shares issued, 40,657,963 and 35,245,157 outstanding as of June 30, 2017 and December 31, 2016, respectively | 409,957 | 355,701 |
Additional paid-in capital | 9,532,060 | 9,070,064 |
Accumulated (deficit) | (10,001,198) | (9,693,882) |
Equity | (59,181) | (268,117) |
Treasury stock, 337,800 and 325,000 shares, at cost | (90,204) | (87,053) |
Total Immudyne, Inc. Stockholders' (Deficit) | (149,385) | (355,170) |
Non-controlling interest | (284,304) | (6,555) |
Total Stockholders' (Deficit) | (433,689) | (361,725) |
Total Liabilities and Stockholders' (Deficit) | $ 1,157,201 | $ 789,824 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 40,995,763 | 35,570,157 |
Common stock, shares outstanding | 40,657,963 | 35,245,157 |
Treasury stock, common shares | 337,800 | 325,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Net Sales | $ 1,107,418 | $ 1,227,247 | $ 1,531,880 | $ 2,868,275 |
Cost of Sales | 329,246 | 700,977 | 532,602 | 2,038,919 |
Gross Profit | 778,172 | 526,270 | 999,278 | 829,356 |
Operating expenses | ||||
Compensation and related expenses | 243,956 | 475,056 | 602,444 | 715,511 |
Professional fees | 121,952 | 125,359 | 221,584 | 194,674 |
Marketing expenses | 289,070 | 299,870 | ||
General and administrative expenses | 348,671 | 79,487 | 475,843 | 177,899 |
Total operating expenses | 1,003,649 | 679,902 | 1,599,741 | 1,088,084 |
Operating (Loss) | (225,477) | (153,632) | (600,463) | (258,728) |
Change in fair value of derivative liability | 922,022 | 873,830 | ||
Interest (expense) | (250) | (2,750) | (649,607) | (5,813) |
Net Income (Loss) | 696,295 | (156,382) | (376,240) | (264,541) |
Net (loss) income attributable to noncontrolling interests | (41,194) | 43,594 | (68,924) | (2,516) |
Net Income (loss) attributable to Immudyne, Inc. | $ 737,489 | $ (199,976) | $ (307,316) | $ (262,025) |
Basic income (loss) per share attributable to Immudyne, Inc. | $ 0.02 | $ (0.01) | $ (0.01) | $ (0.01) |
Diluted income (loss) per share attributable to Immudyne, Inc. | $ 0.02 | $ (0.01) | $ (0.01) | $ (0.01) |
Average number of common shares outstanding | ||||
Basic | 40,849,638 | 32,338,946 | 39,224,839 | 32,174,661 |
Diluted | 47,254,218 | 32,338,946 | 39,224,839 | 32,174,661 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Deficit) (Unaudited) - 6 months ended Jun. 30, 2017 - USD ($) | Total | Common Stock | Additional Paid-in Capital | Accumulated (Deficit) | Treasury Stock | Sub Total | Noncontrolling interest |
Balance at Dec. 31, 2016 | $ (361,725) | $ 355,701 | $ 9,070,064 | $ (9,693,882) | $ (87,053) | $ (355,170) | $ (6,555) |
Balance, (in shares) at Dec. 31, 2016 | 35,570,157 | ||||||
Issuance of common stock for services | 160,833 | $ 1,250 | 159,583 | 160,833 | |||
Issuance of common stock for services, shares | 125,000 | ||||||
Sale of common stock and warrants | 673,245 | $ 29,271 | 643,974 | 673,245 | |||
Sale of common stock and warrants, shares | 2,927,156 | ||||||
Conversion of non-controlling interest equity for shares and warrants | $ 11,835 | 260,368 | 272,203 | (272,203) | |||
Conversion of non-controlling interest equity for shares and warrants, shares | 1,183,490 | ||||||
Conversion of note payable | 745,414 | $ 7,552 | 737,862 | 745,414 | |||
Conversion of note payable, shares | 755,179 | ||||||
Conversion of accrued expenses | 131,103 | $ 2,174 | 128,929 | 131,103 | |||
Conversion of accrued expenses, shares | 217,390 | ||||||
Issuance of common stock in relation to debt offering | 56,522 | $ 2,174 | 54,348 | 56,522 | |||
Issuance of common stock in relation to debt offering, shares | 217,391 | ||||||
Purchase of treasury stock | (3,151) | (3,151) | (3,151) | ||||
Issuance of stock options for services | 113,522 | 113,522 | 113,522 | ||||
Investment in subsidiary by noncontrolling interest, net of distributions | 63,378 | 63,378 | |||||
Reclassification of options, warrants and other contracts to derivative liabilities upon issuance | (1,636,590) | (1,636,590) | (1,636,590) | ||||
Net (loss) | (376,240) | (307,316) | (307,316) | (68,924) | |||
Balance at Jun. 30, 2017 | $ (433,689) | $ 409,957 | $ 9,532,060 | $ (10,001,198) | $ (90,204) | $ (149,385) | $ (284,304) |
Balance (in shares) at Jun. 30, 2017 | 40,995,763 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net (loss) attributable to Immudyne, Inc. | $ (307,316) | $ (262,025) |
Net (loss) attributable to noncontrolling interests | (68,924) | (2,516) |
Net (Loss) | (376,240) | (264,541) |
Adjustments to reconcile net (loss) to net cash (used) by operating activities | ||
Change in fair value of derivative liability | (873,830) | |
Bad debt recovery | (44,543) | |
Amortization of debt discount | 81,558 | |
Loss on settlement of notes and other payables | 634,325 | |
Stock compensation expense | 113,522 | 118,562 |
Common stock issued for services | 160,833 | 230,000 |
Changes in Assets and Liabilities | ||
Trade accounts receivable | (30,338) | (296,638) |
Other receivables | 2,250 | |
Product deposit | (74,043) | |
Inventory | 32,822 | (118,204) |
Accounts payable and accrued expenses | (138,885) | 254,159 |
Net cash (used) by operating activities | (512,569) | (76,662) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Investment in subsidiary by noncontrolling interest, net | 63,378 | 79,130 |
Proceeds from notes payable | 309,043 | |
Repayment of convertible note payable | (100,000) | |
Repayment of notes payable | (176,420) | |
Sale of common stock and warrants | 673,244 | |
Purchase of treasury stock | (3,151) | |
Net cash provided by financing activities | 766,094 | 79,130 |
Net increase in cash | 253,525 | 2,468 |
Cash at beginning of the period | 182,561 | 232,984 |
Cash at end of the period | 436,086 | 235,452 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid during the period for interest | 3,612 | 5,813 |
Issuance of company stock for notes and other payables | 242,192 | |
Conversion of equity invested in subsidiary to common stock and warrants | 272,203 | |
Reclassification of options, warrants and other contracts to derivative liabilities upon issuance | $ 1,636,590 |
Organization and Going Concern
Organization and Going Concern | 6 Months Ended |
Jun. 30, 2017 | |
Organization and Going Concern [Abstract] | |
Organization and Going Concern | 1. Organization and Going Concern Immudyne, Inc. (the “Company”) is a Delaware corporation established to develop, manufacture and sell natural immune support products containing the Company’s proprietary yeast beta glucans, a group of beta glucans naturally occurring in the cell walls of yeast that have been shown through testing and analysis to support the immune system. The Company’s products include once a day oral intake tablets and topical creams and gels for skin application. The Company concentrates its sales and marketing efforts on healthcare professionals, distributors for its all-natural raw material ingredient products and direct-to-consumer sales. In 2015, the Company formed a joint venture domiciled in Puerto Rico, Innate Skincare, LLC (“Innate”). Under the terms of the joint venture agreement, the Company held a 33.3% equity interest, and a 51% controlling voting interest, in Innate. On January 20, 2016, Innate amended its limited liability company operating agreement and changed its legal name to Immudyne PR LLC (“Immudyne PR”). On April 1, 2016, Immudyne PR further amended its operating agreement and restated the Company’s ownership and voting interest in Immudyne PR increasing its ownership to 78.1667% resulting in a charge to noncontrolling interest and additional paid-in-capital of $91,612. Immudyne PR was formed to launch a complete skin care regime formulated using strategic ingredients provided by the Company. In the second quarter of 2017, Immudyne PR expanded their product line and launched their in-licensed patented hair loss shampoo and conditioner. The Company has funded operations in the past through the sales of its products, issuance of common stock and through loans and advances from officers and directors. The Company’s continued operations are dependent upon obtaining an increase in its sales volume and the continued financial support from officers and directors or the issuance of additional shares of common stock. The accompanying financial statements have been prepared on the basis that the Company will continue as a going concern, which assumes the realization of assets and the satisfaction of liabilities in the normal course of business. At June 30, 2017, the Company has an accumulated deficit approximating $10.0 million and has incurred negative cash flows from operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. Based on the Company's cash balance at June 30, 2017, and projected cash needs for 2017, management estimates that it will need to increase sales revenue and/or raise additional capital to cover operating and capital requirements for the remainder of the 2017 year. Management will need to raise the additional needed funds through increased sales volume, issuing additional shares of common stock or other equity securities, or obtaining debt financing. Although management has been successful to date in raising necessary funding, there can be no assurance that sales revenue will substantially increase or that any required future financing can be successfully completed on a timely basis, or on terms acceptable to the Company. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The Company evaluates the need to consolidate affiliates based on standards set forth in Accounting Standard Codification (“ASC”) 810 Consolidation. The consolidated financial statements include the accounts of the Company and its majority owned subsidiary, Immudyne PR and variable interest entities (VIE’s) in which the Company has been determined to be the primary beneficiary. The non-controlling interest in Immudyne PR represents the 21.8333% equity interest held by other members of the joint venture. All significant consolidated transactions and balances have been eliminated in consolidation. Variable Interest Entities The Company follows ASC 810-10-15 guidance with respect to accounting for VIE’s. These entities do not have sufficient equity at risk to finance their activities without additional subordinated financial support from other parties or whose equity investors lack any of the characteristics of a controlling financial interest. A variable interest is an investment or other interest that will absorb portions of a VIE’s expected losses or receive portions of its expected residual returns and are contractual, ownership, or pecuniary in nature and that change with changes in the fair value of the entity’s net assets. A reporting entity is the primary beneficiary of a VIE and must consolidate it when that party has a variable interest, or combination of variable interests, that provides it with a controlling financial interest. A party is deemed to have a controlling financial interest if it meets both of the power and losses/benefits criteria. The power criterion is the ability to direct the activities of the VIE that most significantly impact its economic performance. The losses/benefits criterion is the obligation to absorb losses from, or right to receive benefits from, the VIE that could potentially be significant to the VIE. The VIE model requires an ongoing reconsideration of whether a reporting entity is the primary beneficiary of a VIE due to changes in facts and circumstances. As of June 30, 2017 and December 31, 2016, the Company consolidated nine VIEs. Immudyne PR as the primary beneficiary of Ace Account Management LLC, Innerwell Skincare LLC, MCD Merchants LLC, One Equity Research LLC, Inate Gems LLC, Retriever Health Products LLC, Spurs 5, LLC, Salus LLC and Huntley LLC which are qualified as VIEs. The assets and liabilities and revenues and expenses of these VIEs are included in the financial statements of Immudyne PR and further included in the consolidated financial statements. As of June 30, 2017, the VIEs had assets of $12,051, liabilities of $18,481, revenues of $1,507, and operating expenses of $1,519. As of December 31, 2016, the VIEs had assets of $10,306, liabilities of $5,748. The assets and liabilities include balances due from and due to the subsidiaries of Immudyne PR. Any inter-company receivables and payables are eliminated upon consolidation of the VIEs with Immudyne PR and Immudyne, Inc. No assets were pledged or given as collateral against any borrowings. The Company utilizes third party entities to provide and increase credit card processing capacity and optimize corresponding rates and fees. A majority of these entities provide this service as independent contractors in exchange for a one percent (1%) fee of the net revenues processed and collected by such contractors from sales initiated by the Company. The VIEs consolidated in the Company’s financial statements are primarily contracted to provide credit card processing through one or more merchant banks. Upon receipt of funds by each VIE, the collection of receipts less any returns, chargebacks and other fees charged by such merchant bank is transferred to Immudyne PR. Use of Estimates The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates required to be made by management include the determination of reserves for accounts receivable, returns and allowances, the accounting for derivatives, the valuation of inventory and stockholders’ equity based transactions. Actual results could differ from those estimates. Derivative Liabilities 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 derivative 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 both of these factors are variable, it is possible that the Company could have insufficient authorized shares to satisfy a cashless exercise. In this scenario, if the Company were unable to obtain shareholder approval to increase the number of authorized shares, the Company 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 the Company 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. The Company will continue to report the potential settlement obligation as a derivative liability until such time as these contracts are exercised or expire or we are otherwise able to modify the warrant agreements to remove the provisions which require this treatment. The Company also plans to amend its Articles of Incorporation in the third quarter of 2017 to increase the number of shares of its authorized common stock after the approval by its shareholders. Sequencing Policy Under ASC 815-40-35, the Company has adopted a sequencing policy whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of authorized but unissued shares, and all future instruments being classified as a derivative liability, with the exception of instruments related to share-based compensation issued to employees or directors. Inventory At June 30, 2017 and December 31, 2016, inventory consisted primarily of cosmetic and nutraceutical additives, and finished cosmetic products. Inventory is maintained in the Company’s leased Kentucky warehouse and third party warehouses in Pennsylvania and Louisiana. Inventory is valued at the lower of cost or market with cost determined on a first-in, first-out (“FIFO”) basis. Management compares the cost of inventory with the net realizable value and an allowance is made for writing down inventory to market value, if lower. At June 30, 2017 and December 31, 2016, the Company recorded an inventory reserve in the amount of $20,000. Inventory consists of the following: June 30, December 31, Raw materials $ 31,752 $ 38,460 Finished products 95,696 121,810 $ 127,448 $ 160,270 Revenue Recognition The Company’s policy is to record revenue as earned when a firm commitment, indicating sales quantity and price exists, delivery has taken place and collectability is reasonably assured. The Company generally records sales of nutraceutical and cosmetic additives once the product is shipped to the customer, and for sales of finished cosmetic products once the customer places the order and the product is simultaneously shipped, but in limited cases if title does not pass until the product reaches the customer’s delivery site, then recognition of revenue is deferred until that time. Delivery is considered to have occurred when title and risk of loss have transferred to the customer. Provisions for discounts, returns, allowances, customer rebates and other adjustments are netted with gross sales. The Company accounts for such provisions during the same period in which the related revenues are earned. Customer discounts, returns and rebates approximated $50,000 and $1,050,000 in the six months ended June 30, 2017 and 2016, respectively. Customer discounts, returns and rebates approximated $12,000 and $620,000 in the three months ended June 30, 2017 and 2016, respectively. There are no formal sales incentives offered to any of the Company’s customers. Volume discounts may be offered from time to time to customers purchasing large quantities on a per transaction basis. Revenue for the six months ended June 30, 2017 consisted of nutraceutical and cosmetic additives ($703,893) and finished cosmetic products ($827,987). Revenue for the six months ended June 30, 2016 consists of nutraceutical and cosmetic additives ($528,220) and finished cosmetic products ($2,340,055). Revenue for the three months ended June 30, 2017 consisted of nutraceutical and cosmetic additives ($447,330) and finished cosmetic products ($660,088). Revenue for the three months ended June 30, 2016 consists of nutraceutical and cosmetic additives ($262,310) and finished cosmetic products ($964,937). Accounts receivable Accounts receivable are carried at original invoice amount less an estimate made for holdbacks and doubtful receivables based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions and sets up an allowance for doubtful accounts when collection is uncertain. Customers’ accounts are written off when all attempts to collect have been exhausted. Recoveries of accounts receivable previously written off are recorded as income when received. At June 30, 2017 and December 31, 2016 the accounts receivable reserve was approximately $37,800 for both periods. As of June 30, 2017 and December 31, 2016, the reserve for sales returns and allowances was approximately $6,000 and $50,500, respectively. Segments The guidance for disclosures about segments of an enterprise requires that a public business enterprise report financial and descriptive information about its operating segments. Generally, financial information is required to be reported on the basis used internally for evaluating segment performance and resource allocation. The Company manages its operations in two reportable segments for purposes of assessing performance and making operating decisions. Revenue is generated predominately in the United States, and all significant assets are held in the United States, or United States territories. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. The Company allocates resources and evaluates the performance of segments based on income or loss from operations, excluding interest, corporate expenses and other income (expenses). A summary of the company’s reportable segments is as follows: Total assets: June 30, December 31, Nutraceutical and Cosmetic Additives $ 1,651,442 $ 556,234 Finished Cosmetic Products 473,763 422,288 Eliminations (968,004 ) (188,698 ) Total $ 1,157,201 $ 789,824 Three months ended Six months ended June 30, June 30, June 30, June 30, 2017 2016 2017 2016 Net sales by segment: Nutraceutical and Cosmetic Additives $ 447,330 $ 266,060 $ 703,893 $ 551,220 Finished Cosmetic Products 660,088 964,937 827,987 2,340,055 Eliminations - (3,750 ) - (23,000 ) Total $ 1,107,418 $ 1,227,247 $ 1,531,880 $ 2,868,275 Three months ended Six months ended June 30, June 30, June 30, June 30, Net (loss) income by segment: 2017 2016 2017 2016 Nutraceutical and Cosmetic Additives $ 154,825 $ 30,165 $ 181,632 $ 114,942 Finished Cosmetic Products (188,675 ) 199,668 (315,682 ) 130,503 Other unallocated amounts: Corporate expenses (191,627 ) (383,465 ) (466,413 ) (504,173 ) Other income (expense) 921,772 (2,750 ) 224,223 (5,813 ) Consolidated net income (loss) $ 696,295 $ (156,382 ) $ (376,240 ) $ (264,541 ) Income Taxes The Company files Corporate Federal and State tax returns, while Immudyne PR, which was formed as a limited liability corporation, files a separate tax return with any tax liabilities or benefits passing through to its members. The Company records current and deferred taxes in accordance with Accounting Standards Codification (ASC) 740, “Accounting for Income Taxes.” This ASC requires recognition of deferred tax assets and liabilities for temporary differences between tax basis of assets and liabilities and the amounts at which they are carried in the financial statements, based upon the enacted rates in effect for the year in which the differences are expected to reverse. The Company establishes a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. The Company periodically assesses the value of its deferred tax asset, a majority of which has been generated by a history of net operating losses and determines the necessity for a valuation allowance. ASC 740 also provides a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken or expected to be taken in a tax return. Using this guidance, a company may recognize the tax benefit from an uncertain tax position in its financial statements only if it is more likely-than-not (i.e., a likelihood of more than 50%) that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company’s tax returns for all years since December 31, 2013, remain open to taxing authorities. Stock-Based Compensation The Company follows the provisions of ASC 718, “Share-Based Payment”. Under this guidance compensation cost generally is recognized at fair value on the date of the grant and amortized over the respective vesting periods. The fair value of options at the date of grant is estimated using the Black-Scholes option pricing model. The expected option life is derived from assumed exercise rates based upon historical exercise patterns and represents the period of time that options granted are expected to be outstanding. The expected volatility is based upon historical volatility of the Company’s shares using weekly price observations over an observation period that approximates the expected life of the options. The risk-free rate approximates the U.S. Treasury yield curve rate in effect at the time of grant for periods similar to the expected option life. Due to limited history of forfeitures, the estimated forfeiture rate included in the option valuation was zero. Many of the assumptions require significant judgment and any changes could have a material impact in the determination of stock-based compensation expense. Earnings (Loss) Per Share Basic earnings (loss) per common share is based on the weighted average number of shares outstanding during each period presented. The diluted earnings per share computation includes the effect, if any, of shares that would be issuable upon the exercise of outstanding stock options, warrants, derivative liability and convertible debt, reduced by the number of shares which are assumed to be purchased by the Company from the resulting proceeds at the average market price during the period, when such amounts are dilutive to the earnings per share calculation. The weighted average number of common stock equivalents not included in diluted income per share, because the effects are anti-dilutive, was 5,145,693 for the three months ended June 30, 2017. Common stock equivalents comprising shares underlying 11,550,273 options and warrants for the six months ended June 30, 2017 have not been included in the loss per share calculation as the effects are anti-dilutive. Common stock equivalents comprising shares underlying 12,700,273 options and warrants for the six months ended June 30, 2016 have not been included in the loss per share calculations as the effects are anti-dilutive. Recent Accounting Pronouncements In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. The new standard provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This pronouncement is effective for annual reporting periods beginning after December 15, 2017 but early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 addresses eight specific cash flow issues with the objective of reducing diversity in practice regarding how certain cash receipts and cash payments are presented in the statement of cash flows. The standard provides guidance on the classification of the following items: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance policies, (6) distributions received from equity method investments, (7) beneficial interests in securitization transactions, and (8) separately identifiable cash flows. The Company is required to adopt ASU 2016-15 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017 on a retrospective basis. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of adoption of ASU 2016-15. In February 2016, a pronouncement was issued that creates new accounting and reporting guidelines for leasing arrangements. The new guidance requires organizations that lease assets to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases, regardless of whether they are classified as finance or operating leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease primarily will depend on its classification as a finance or operating lease. The guidance also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early application permitted. The new standard is to be applied using a modified retrospective approach. The Company is in the process of evaluating the impact of the new pronouncement on its consolidated financial statements. At this time, the adoption of this pronouncement is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures. In May 2014, the Financial Accounting Standards Board ("FASB") issued accounting guidance, "Revenue from Contracts with Customers." The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and clarify guidance for multiple-element arrangements. The standard will be effective for fiscal years and interim periods within those years beginning after December 15, 2017. Accordingly, the Company will adopt this standard in the first quarter of fiscal year 2018. The Company does not expect it to have a material effect on the Company's consolidated financial condition, results of operations, and cash flows. All other accounting standards that have been issued or proposed by the FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. Noncontrolling Interests The Company accounts for its less than 100% interest in Immudyne PR in accordance with ASC Topic 810, Consolidation, and accordingly the Company presents noncontrolling interests as a component of equity on its consolidated balance sheet and reports the noncontrolling interest’s share of the Immudyne PR net loss attributable to noncontrolling interests in the consolidated statement of operations. Concentration of Credit Risk The Company grants credit in the normal course of business to its customers. The Company periodically performs credit analysis and monitors the financial condition of its customers to reduce credit risk. The Company monitors its positions with, and the credit quality of, the financial institutions with which it invests. The Company, at times, maintains balances in various operating accounts in excess of federally insured limits. One customer in the nutraceutical and cosmetic additives division accounted for 35% and 17% of consolidated sales for the three month periods ended June 30, 2017 and 2016, respectively. This customer accounted for 42% and 16% of consolidated sales for the six month periods ended June 30, 2017 and 2016, respectively. This customer also accounted for 60% and 11% of the consolidated accounts receivable at June 30, 2017 and December 31, 2016, respectively. In the finished cosmetic products division, one credit card processor accounted for 20% of the consolidated accounts receivable at June 30, 2017. In the finished cosmetic products division, two credit card processors accounted for 35% and 32% of the consolidated accounts receivable at December 31, 2016. |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2017 | |
Notes Payable [Abstract] | |
Notes Payable | 3. Notes Payable In November 2015, the Company borrowed $100,000 from a commercial lender. The loan incurred interest at 11% and with a maturity date of November 1, 2016. Interest expense related to this loan for the period ended March 31, 2016 amounted to $3,063. In October 2016, the Company repaid the entire principal balance. In the third quarter of 2016 the Company commenced an offering pursuant to which it offered 11% subordinated promissory notes in fifty thousand ($50,000) dollar increments combined with 62,500 shares of the Company’s Common Stock for a maximum offering amount of $200,000 (the “Offering”). In August and September 2016, the Company sold promissory notes totaling $150,000 to three unrelated individuals. Two of the promissory notes totaling $100,000 were payable in February 2017 and one promissory note for $50,000 was payable in March 2017. In October 2016, the Company sold promissory notes totaling $50,000 to two unrelated individuals. These promissory notes are payable in October 2017. In connection with these promissory notes sold, pursuant to the Offering, the Company issued 250,000 shares of common stock valued at $58,750 which was recorded as a debt discount and will be amortized over the term of these notes. Amortization of the debt discounts for the three months ended March 31, 2017 was $25,035. There was no amortization of debt discount during the second quarter of 2017. During 2016, the Company repaid $68,600 of the principal balance. Interest expense related to these notes for the six months ended June 30, 2017 amounted to $131,117. During 2017, the Company repaid $81,420 of the principal balance and converted the remaining balance of $49,980 into 196,000 shares of common stock and 98,000 warrants, which satisfied the note in full. The fair market value of the shares and warrants issued upon conversion was determined to be $179,384, of which $129,404 was included in interest expense as loss on settlement of notes payable. In December 2016, the Company borrowed $100,000 from an officer and issued a convertible promissory note with a maturity date of February 28, 2017. The loan incurs no interest. This note is convertible if not repaid by the maturity date at a conversion price of $0.23 per Unit. Each Unit shall consist of one share of the Company’s common stock and one three-year common-stock warrant to purchase one-half of one share of the Company’s common stock with an exercise price of $0.40 per share. In March 2017, the Company repaid the entire outstanding balance of this note. In January 2017, the Company borrowed $200,000 and issued a promissory note with a 5% original issue discount for a total principal amount of $210,000. The loan incurred 11% interest per annum and matured in various tranches from February 2017 through April 2017. In addition, the Company issued 217,391 shares of common stock related to this note. In February 2017, the Company repaid $70,000 of the principal balance of this note. In March 2017, the Company converted the remaining $140,000 of the principal balance of this note and accrued interest of $2,212 in exchange for 559,179 shares of common stock and 304,348 warrants which satisfied the note in full. The fair market value of the shares and warrants issued upon conversion was determined to be $566,030, of which $423,818 was included in interest expense as loss on settlement of notes payable. In February 2017, the Company borrowed $25,000 from an American Express working capital line with 60 days maturity. The interest for this loan is a flat fee of $250. On April 17, 2017, the Company repaid this loan. In June 2017, the Company borrowed $74,043 from an American Express working capital line with 90 days maturity. The interest for this loan is a flat fee of $1,111. As of June 30, 2017, there were $66,000 available borrowings under the working capital line. Interest expense related to loans from officers, directors and other related individuals amounted to $1,713 and $313 for the six month periods ended June 30, 2017 and 2016, respectively. There was no interest expense for the three months ended June 30, 2017 and 2016 related to loans from officers, directors and other related individuals as there were no loans outstanding during the three months ended June 30, 2017. Total interest expense on notes payable amounted to $649,607 and $5,813 for the six months ended June 30, 2017 and 2016, respectively. Total interest expense amounted to $250 and $2,750 for the three months ended June 30, 2017 and 2016, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | 4. Income Taxes The Company is not expected to have taxable income in 2017 and incurred a loss for the year ended December 31, 2016, and accordingly, no provision for federal income tax has been made in the accompanying financial statements. At June 30, 2017, the Company had available net operating loss carryforwards of approximately $4,260,600, expiring during various years through 2037. A summary of the deferred tax asset using an approximate 34% tax rate is as follows: Net operating loss $ 1,449,000 Accounts receivable reserves 15,000 Inventory reserves 7,000 Stock compensation 291,000 Net deferred tax asset 1,762,000 Valuation allowance (1,762,000 ) Total $ - The net operating loss carryforwards could be subject to limitation in any given year in the event of a change in ownership as defined by IRC Section 382. The difference between the statutory and the effective tax rate is primarily due to a change in valuation allowance on deferred taxes, as well as a permanent difference from the change in derivative liability. The Company has fully reserved the deferred tax asset resulting from available net operating loss carryforwards. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 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. For the six and three months ended June 30, 2017, the Company has recognized expense of $153,333 and $76,667, respectively, in connection with these agreements. For the six and three months ended June 30, 2016, the Company has recognized expense of $230,000. As of June 30, 2017 and December 31, 2016, the unamortized portion of these service agreements are $153,333 and $306,667, respectively. 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. During 2017, the Company purchased an additional 12,800 shares of outstanding Company common stock for a price per share of $0.24 to $0.26. As of the June 30, 2017, a total of 337,800 shares are being held by the Company valued at cost is $90,204 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 excisable any time prior to the secondary 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 the first quarter of 2017, the Company received subscriptions in the amount of 2,817,156 shares and issued 1,408,578 warrants and proceeds in the amount of $647,944. 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. The fair value of the shares and warrants issued were determined to be $131,103, of which $81,103 was included in general and administrative expense as loss on settlement of other payables. 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 three months ending June 30, 2017, $7,500 has been expensed and included in compensation and related expenses on the consolidated statement of operations. Noncontrolling Interest On April 1, 2016, the Company increased its ownership in Immudyne PR to 78.1667% decreasing the minority interest from 66.7% to 21.8333% resulting in a charge to noncontrolling interest and additional paid-in-capital of $91,612. For the six months ended June 30, 2017 and 2016, the net loss of Immudyne PR attributed to the noncontrolling interest amounted to $68,924 and $2,516, respectively. For the three months ended June 30, 2017, the net loss of Immudyne PR attributed to the noncontrolling interest amounted to $41,194. For the three months ended June 30, 2016, the net income of Immudyne PR attributed to the noncontrolling interest amounted to $43,594. 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 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. Accordingly, stock based compensation expense for the six months ended June 30, 2017 and 2016 included $113,522 and $40,829, respectively, related to such service-based stock options. Stock based compensation expense for the three months ended June 30, 2017 and 2016 included $-0- and $40,829, respectively, related to such service-based stock options. A summary of the outstanding service-based options are as follows: Number of Balance at December 31, 2016 10,700,273 Issued 500,000 Balance at June 30, 2017 11,200,273 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 service based options outstanding and exercisable at June 30, 2017 and December 31, 2016 amounted to $1,131,805 and $704,794, respectively. The significant assumptions used to determine the fair values of options issued in 2017, using the Black-Scholes option-pricing model are as follows: Significant assumptions: Risk-free interest rate at grant date 1.49 % Expected stock price volatility 216.7 % Expected dividend payout — Expected option life-years 3 years Weighted average grant date fair value $ 0.24 Forfeiture rate 0 % The following is a summary of outstanding service-based options at June 30, 2017: Exercise Price Number of Weighted Average Remaining Contractual Life $0.10 1,380,273 1 year $0.20 - $0.25 8,620,000 5 years $0.40 1,200,000 5 years Total 11,200,273 Performance-Based Stock Options Vested 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. During the year ended December 31, 2016, the Company cancelled 287,500 of these service-based options issued to two consultants, valued at $12,457. The fair value of the vested performance-based options aggregated $120,867 and was expensed over the implicit service period commencing once management believed the performance criteria was expected to be met. During 2016, the Company met the performance criteria and accordingly, recorded stock based compensation expense of $38,867 and $77,733 for the three and six months ended June 30, 2016, respectively. Unvested The Company granted performance-based options to purchase 1,150,000 shares of common stock at exercise prices of $0.40 and $0.80. The options expire at various dates between 2021 and 2027 and are exercisable upon the Company achieving annual sales revenue of $5,000,000 and $10,000,000. During the year ended December 31, 2016, the Company cancelled 287,500 of these service-based options issued to two consultants, valued at $5,542. The performance options exercisable upon the Company achieving annual sales revenue of $5,000,000 and $10,000,000 have an aggregate fair value of $85,608. As of June 30, 2017, no amounts have been expensed and the unearned compensation for all the performance based options is $85,608. Warrants The following is a summary of outstanding and exercisable warrants: Number of Shares Weighted Average Year of Balance at December 31, 2016 1,954,891 $ 0.19 2017 - 2019 Issued 2,566,367 0.40 2019 - 2020 Balance at June 30, 2017 4,521,258 0.31 2017 - 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. 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 403,348 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. The fair value of warrants granted during the period ended June 30, 2017, was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: Expected volatility 127% - 215% Risk free interest rate 1.24% - 2.14% Expected dividend yield - Expected term (in years) 1.2 - 8.3 Weighted average grant date fair value $0.12 - 0.30 As of June 30, 2017 and December 31, 2016, certain of the Company’s stock options, stock warrants and convertible debt instruments were accounted for as derivative liabilities due to insufficient authorized shares of common stock to settle outstanding contracts. At June 30, 2017 and December 31, 2016, the Company estimated the fair value of these stock options, stock warrants and embedded conversion features using the Black-Scholes option pricing model (“Black-Scholes”) to be $955,014 and $192,254, based on Level 2 valuation inputs. Stock Based Compensation The total stock based compensation expense related Service-Based Stock Options and Performance-Based Stock Options and Warrants amounted to $113,522 and $118,562 for the six months ended June 30, 2017 and 2016, respectively. For the three months ended June 30, 2017 and 2016, total stock based compensation amounted to $-0- and $79,695, respectively. Such amounts are included in compensation and related expenses in the accompanying statement of operations. Common stock issued for services amounted to $160,833 and $230,000 for the six months ended June 30, 2017 and 2016, respectively. For the three months ended June 30, 2017 and 2016, common stock issued for services amounted to $84,167 and $-0-, respectively. Such amounts are included in compensation and related expenses in the accompanying statement of operations. |
Royalties
Royalties | 6 Months Ended |
Jun. 30, 2017 | |
Royalties [Abstract] | |
Royalties | 6. Royalties The Company is subject to a royalty agreement based upon sales of certain hair care products. For the three months ended June 30, 2017, the Company recognized $12,112 in royalty expense related to this agreement. As of June 30, 2017, the $12,112 was included in accounts payable and accrued expenses in regards to this agreement. In addition, the Company shall pay a performance fee in relation to this agreement. In April 2017, the Company issued 217,390 shares of common stock and 108,696 warrants, pursuant to a subscription agreement, for the stated consideration and satisfaction of obligation to pay $50,000 of the performance fee (see Note 7). |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Leases The Company leases a plant in Kentucky under an operating lease which expired on May 31, 2016. Management is currently discussing renewal lease options for the Kentucky plant and is operating on a month-to-month lease arrangement until a final agreement has been accepted. Monthly base rental payments are approximately $9,000. The Company’s principal executive offices are in office space provided to us by the Company’s President, Mr. McLaughlin, at the rate of $2,000 per month, which includes rents, utilities and other office related expenditures. This arrangement commenced as of January 1, 2016. In addition, Immudyne PR utilizes office space in Puerto Rico which is subleased from Justin Schreiber (President of Immudyne PR) and incurs expense of approximately $4,000 a month for this office space. Rent expense for the six month periods ended June 30, 2017 and 2016, was $74,100 and $43,900, respectively. Rent expense for the three month periods ended June 30, 2017 and 2016, was $38,039 and $27,284, respectively. Employment and Consulting Agreements The Company has entered into various agreements with officers, directors, employees and consultants that expire in one to five years. The agreements provide for annual compensation of up to $145,000 and the issuance of stock options, at exercise prices of $0.40 and $0.80, to purchase 4,400,000 shares of common stock issuable upon the Company’s revenue exceeding $5,000,000 and $10,000,000, as defined. In addition, the agreements provide for bonus compensation to these individuals aggregating up to 15% (with no individual having more than 5%) of the Company’s pretax income. Restricted Stock and Options The Company has entered into two agreements on April 1, 2016 with two consultants of Immudyne PR for business development, marketing and sales related services (the “Consultant Agreements”). The consultants are treated as employees for accounting purposes. Upon signing, each consultant was issued 1,000,000 restricted shares of Immudyne, Inc. common stock. In addition, each consultant shall receive an additional 150,000 restricted shares of Immudyne, Inc. common stock for each $500,000 distributed by Immudyne PR to the Company. For each consultant, the amount of shares to be issued by the Company to the consultants shall be capped at 1,500,000 restricted shares when Immudyne PR has transferred $5,000,000 to the Company, for a combined capped total of 3,000,000 restricted shares. For the three and six months ended June 30, 2017, -0- restricted shares of common stock have been issued related to these agreements. During 2016, 2,300,000 restricted shares of common stock were issued related to these agreements. The Company valued the shares at their grant date for a value of $0.30 per share for a total of $690,000 to be expensed over the estimated service period ending December 31, 2017. In addition, the Consulting Agreements provided that each consultant shall receive a bonus of an additional 750,000 restricted shares of Immudyne, Inc. common stock, plus an option to buy 1,000,000 shares of Immudyne, Inc. common stock at $0.20/share (including a cashless exercise feature) when Immudyne PR has transferred to the Company at each of the following three (3) thresholds: $1,250,000, $2,000,000 and $3,000,000 for a total of 2,250,000 of restricted shares of Immudyne, Inc. common stock and options to purchase up to 3,000,000 shares of Immudyne, Inc. common stock at $0.20/share. As of June 30, 2017, no bonus shares have been issued and no options have been granted under these agreements. Sole and Exclusive License, Royalty, and Advisory Agreement On September 1, 2016 Immudyne PR entered into a sole and exclusive license, royalty and advisory agreement with Pilaris Laboratories, LLC (“Pilaris”) relating to Pilaris’ PilarisMax shampoo formulation and conditioner. The term of the agreement will be the life of the US Patent held by Pilaris. As consideration for granting Immudyne PR this license, Pilaris will receive on quarterly basis, 10% of the net income collected by the licensed products based on the following formula: Net Income = total income – cost of goods sold – advertising and operating expenses directly related to the marketing of the licensed products. In addition, Immudyne PR shall pay Pilaris a performance fee of $50,000 on the 180-day anniversary of the agreement and an additional $50,000 performance fee on the 365-day anniversary of the agreement. For the three and six months ended June 30, 2017, the Company recognized expenses related to the performance fee in the amount of $25,000 and $83,333, respectively. In April 2017, the Company issued 217,390 shares of common stock and 108,696 warrants, pursuant to a subscription agreement, for the stated consideration and satisfaction of obligation to pay $50,000 on the 180-day anniversary of the execution of this agreement. As of June 30, 2017, the balance in accounts payable and accrued expenses is $33,333 expense related to this agreement. Legal Matters In the normal course of business operations, the Company may become involved in various legal matters. At June 30, 2017, the Company’s management does not believe that there are any potential legal matters that could have an adverse effect on the Company’s financial position. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 8. Related Party Transactions During 2016, legal and business advisory services were provided to the Company by one of its directors. For the three and six months ended June 30, 2016 this director was compensated $3,000 and $9,000, respectively. No services were provided during the six months ended June 30, 2017. During the six months ended June 30, 2017 and 2016, the Company’s President received $14,000 and $14,000, respectively for reimbursement of home office expenditures, including rent, utilities and other related expenses for two offices. During the three months ended June 30, 2017 and 2016, the Company’s President received $6,000 and $6,000, respectively for reimbursement of these expenses. Immudyne, Inc. employs the wife of the President of the Company as an accountant and incurs $3,000 per month, plus an annual incentive bonus award equal to 0.5% of the Company’s pre-tax earnings. Immudyne PR utilizes BV Global Fulfillment, owned by the father of Immudyne PR’s President, and incurred $32,160 and $42,556 for the three and six months ended June 30, 2017, respectively, for these services. During the three and six months ended June 30, 2016, Immudyne PR did not utilize BV Global Fulfillment. Taggart International Trust (“Taggart”), a shareholder, provides credit card processing services through one or more merchant banks. Taggart did not receive any compensation for these services. JLS Ventures LLC, owned by a shareholder, provides credit card processing services through one or more merchant banks. JLS Ventures LLC did not receive any compensation for these services. JSDC, Inc., owned by a shareholder, provides credit card processing services through one or more merchant banks. JSDC, Inc. did not receive any compensation for these services. Immudyne PR utilizes office space in Puerto Rico which is subleased from the President of Immudyne PR and incurs expense of approximately $4,000 a month for this office space. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 9. Subsequent Events The Company has evaluated subsequent events through the date these financial statements were issued. In July 2017, the Company appointed Justin Schreiber and Stefan Galluppi to the Board of Directors. In July 2017, the Company and JLS Ventures entered into a separate three year incentivized second amendment to Service Agreement effective July 1, 2017. As compensation, the Company issued 900,000 shares of common stock valued at $432,000. In addition, the Company issued performance based options that vest, in intervals, upon receipt by Immudyne, Inc. of cash from Immudyne PR within three years from the effective date of the agreement. Upon receipt of $4,000,000 of cash the Company will issue a ten year option to buy 1,500,000 shares at $0.25. Upon receipt of an additional $1,000,000, the Company will issue an additional ten year option to buy 1,500,000 shares at $0.25. Upon receipt of each additional $1,000,000, up to a total of $7,000,000, the Company will issue an additional ten year option to buy 1,500,000 shares at $0.35. In July 2017, the Company and Brunilda McLaughlin entered into a three year employment agreement effective July 1, 2017. Upon signing as additional compensation, the Company issued a ten year option to buy 75,000 shares at $0.35. In July 2017, the Company entered into a three year employment agreement with Mark McLaughlin (“McLaughlin”) as the Company’s President, Chief Executive Officer and to serve as a Director of the Company. McLaughlin will be entitled to receive an annual salary of $145,600, plus an annual cash bonus of $100,000 if the Company achieves $4,000,000 in pre-tax earnings plus, an additional cash bonus of $75,000 if the Company achieves $6,000,000 in pre-tax earnings. As additional compensation, the Company issued 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. In addition, the Company issued McLaughlin performance based options to that vest, in intervals, upon the Company achieving pre-tax earnings of $4,000,000, the Company will issue a ten year option to buy 500,000 shares at $0.25; and upon the achievement of an additional $1,000,000 of pre-tax earnings, the Company will issue an additional ten year option to buy 500,000 shares at $0.25; and upon the achievement of each additional $1,000,000 of pre-tax earnings, up to a total of $7,000,000, the Company will issue an additional ten year option to buy 500,000 shares at $0.35. In July 2017, the Company entered into two separate, three year director agreements with Anthony Bruzzese M.D. (“Bruzzese”) and John R. Strawn, Jr. (“Strawn”). Bruzzese and Strawn will be entitled to receive an annual retainer to be negotiated in good faith. Upon signing as additional compensation, the Company issued to both Bruzzese and Strawn a ten year option to buy 100,000 shares at $0.35. In addition, the Company issued both Bruzzese and Strawn performance based options to that vest, in intervals, upon the Company achieving pre-tax earnings of $4,000,000, the Company will issue a ten year option to buy 75,000 shares at $0.25; and upon the achievement of an additional $1,000,000 of pre-tax earnings, the Company will issue an additional ten year option to buy 75,000 shares at $0.25; and upon the achievement of each additional $1,000,000 of pre-tax earnings, up to a total of $7,000,000, the Company will issue an additional ten year option to buy 75,000 shares at $0.35. In August 2017, the Company renewed the BV Global Services Agreement dated August 3, 2016 with BV Global Fulfillment, LLC (“BV Global”) for fulfillment services. Upon signing, as additional compensation, the Company issued to BV Global a ten year option to buy 50,000 shares at $0.35. In addition, the Company issued both Bruzzese and Strawn performance based options to that vest, in intervals, upon the Company achieving pre-tax earnings of $4,000,000, the Company will issue a ten year option to buy 62,500 shares at $0.25; and upon the achievement of an additional $1,000,000 of pre-tax earnings, the Company will issue an additional ten year option to buy 62,500 shares at $0.25; and upon the achievement of each additional $1,000,000 of pre-tax earnings, up to a total of $7,000,000, the Company will issue an additional ten year option to buy 62,500 shares at $0.35. In August 2017, the Company entered into a Professional Service Agreement with Acorn Management Partners L.L.C. (“Acorn”) for financial advisory, strategic business planning and other investor relation services for a year of one year effective August 8, 2017. During the term of the Agreement, Acorn shall receive $7,500 cash monthly. As additional compensation, the Company shall issue within five (5) days of signing 100,000 shares of the Company’s common stock and upon each three (3) month period thereafter during the term of the Agreement an additional 100,000 shares of the Company’s common stock for a total of 400,000 shares of the Company’s common stock. In July 2017, Mark McLaughlin, the Company’s 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. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The Company evaluates the need to consolidate affiliates based on standards set forth in Accounting Standard Codification (“ASC”) 810 Consolidation. The consolidated financial statements include the accounts of the Company and its majority owned subsidiary, Immudyne PR and variable interest entities (VIE’s) in which the Company has been determined to be the primary beneficiary. The non-controlling interest in Immudyne PR represents the 21.8333% equity interest held by other members of the joint venture. All significant consolidated transactions and balances have been eliminated in consolidation. |
Variable Interest Entities | Variable Interest Entities The Company follows ASC 810-10-15 guidance with respect to accounting for VIE’s. These entities do not have sufficient equity at risk to finance their activities without additional subordinated financial support from other parties or whose equity investors lack any of the characteristics of a controlling financial interest. A variable interest is an investment or other interest that will absorb portions of a VIE’s expected losses or receive portions of its expected residual returns and are contractual, ownership, or pecuniary in nature and that change with changes in the fair value of the entity’s net assets. A reporting entity is the primary beneficiary of a VIE and must consolidate it when that party has a variable interest, or combination of variable interests, that provides it with a controlling financial interest. A party is deemed to have a controlling financial interest if it meets both of the power and losses/benefits criteria. The power criterion is the ability to direct the activities of the VIE that most significantly impact its economic performance. The losses/benefits criterion is the obligation to absorb losses from, or right to receive benefits from, the VIE that could potentially be significant to the VIE. The VIE model requires an ongoing reconsideration of whether a reporting entity is the primary beneficiary of a VIE due to changes in facts and circumstances. As of June 30, 2017 and December 31, 2016, the Company consolidated nine VIEs. Immudyne PR as the primary beneficiary of Ace Account Management LLC, Innerwell Skincare LLC, MCD Merchants LLC, One Equity Research LLC, Inate Gems LLC, Retriever Health Products LLC, Spurs 5, LLC, Salus LLC and Huntley LLC which are qualified as VIEs. The assets and liabilities and revenues and expenses of these VIEs are included in the financial statements of Immudyne PR and further included in the consolidated financial statements. As of June 30, 2017, the VIEs had assets of $12,051, liabilities of $18,481, revenues of $1,507, and operating expenses of $1,519. As of December 31, 2016, the VIEs had assets of $10,306, liabilities of $5,748. The assets and liabilities include balances due from and due to the subsidiaries of Immudyne PR. Any inter-company receivables and payables are eliminated upon consolidation of the VIEs with Immudyne PR and Immudyne, Inc. No assets were pledged or given as collateral against any borrowings. The Company utilizes third party entities to provide and increase credit card processing capacity and optimize corresponding rates and fees. A majority of these entities provide this service as independent contractors in exchange for a one percent (1%) fee of the net revenues processed and collected by such contractors from sales initiated by the Company. The VIEs consolidated in the Company’s financial statements are primarily contracted to provide credit card processing through one or more merchant banks. Upon receipt of funds by each VIE, the collection of receipts less any returns, chargebacks and other fees charged by such merchant bank is transferred to Immudyne PR. |
Use of Estimates | Use of Estimates The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates required to be made by management include the determination of reserves for accounts receivable, returns and allowances, the accounting for derivatives, the valuation of inventory and stockholders’ equity based transactions. Actual results could differ from those estimates. |
Derivative Liabilities | Derivative Liabilities 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 derivative 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 both of these factors are variable, it is possible that the Company could have insufficient authorized shares to satisfy a cashless exercise. In this scenario, if the Company were unable to obtain shareholder approval to increase the number of authorized shares, the Company 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 the Company 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. The Company will continue to report the potential settlement obligation as a derivative liability until such time as these contracts are exercised or expire or we are otherwise able to modify the warrant agreements to remove the provisions which require this treatment. The Company also plans to amend its Articles of Incorporation in the third quarter of 2017 to increase the number of shares of its authorized common stock after the approval by its shareholders. |
Sequencing Policy | Sequencing Policy Under ASC 815-40-35, the Company has adopted a sequencing policy whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of authorized but unissued shares, and all future instruments being classified as a derivative liability, with the exception of instruments related to share-based compensation issued to employees or directors. |
Inventory | Inventory At June 30, 2017 and December 31, 2016, inventory consisted primarily of cosmetic and nutraceutical additives, and finished cosmetic products. Inventory is maintained in the Company’s leased Kentucky warehouse and third party warehouses in Pennsylvania and Louisiana. Inventory is valued at the lower of cost or market with cost determined on a first-in, first-out (“FIFO”) basis. Management compares the cost of inventory with the net realizable value and an allowance is made for writing down inventory to market value, if lower. At June 30, 2017 and December 31, 2016, the Company recorded an inventory reserve in the amount of $20,000. Inventory consists of the following: June 30, December 31, Raw materials $ 31,752 $ 38,460 Finished products 95,696 121,810 $ 127,448 $ 160,270 |
Revenue Recognition | Revenue Recognition The Company’s policy is to record revenue as earned when a firm commitment, indicating sales quantity and price exists, delivery has taken place and collectability is reasonably assured. The Company generally records sales of nutraceutical and cosmetic additives once the product is shipped to the customer, and for sales of finished cosmetic products once the customer places the order and the product is simultaneously shipped, but in limited cases if title does not pass until the product reaches the customer’s delivery site, then recognition of revenue is deferred until that time. Delivery is considered to have occurred when title and risk of loss have transferred to the customer. Provisions for discounts, returns, allowances, customer rebates and other adjustments are netted with gross sales. The Company accounts for such provisions during the same period in which the related revenues are earned. Customer discounts, returns and rebates approximated $50,000 and $1,050,000 in the six months ended June 30, 2017 and 2016, respectively. Customer discounts, returns and rebates approximated $12,000 and $620,000 in the three months ended June 30, 2017 and 2016, respectively. There are no formal sales incentives offered to any of the Company’s customers. Volume discounts may be offered from time to time to customers purchasing large quantities on a per transaction basis. Revenue for the six months ended June 30, 2017 consisted of nutraceutical and cosmetic additives ($703,893) and finished cosmetic products ($827,987). Revenue for the six months ended June 30, 2016 consists of nutraceutical and cosmetic additives ($528,220) and finished cosmetic products ($2,340,055). Revenue for the three months ended June 30, 2017 consisted of nutraceutical and cosmetic additives ($447,330) and finished cosmetic products ($660,088). Revenue for the three months ended June 30, 2016 consists of nutraceutical and cosmetic additives ($262,310) and finished cosmetic products ($964,937). |
Accounts receivable | Accounts receivable Accounts receivable are carried at original invoice amount less an estimate made for holdbacks and doubtful receivables based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions and sets up an allowance for doubtful accounts when collection is uncertain. Customers’ accounts are written off when all attempts to collect have been exhausted. Recoveries of accounts receivable previously written off are recorded as income when received. At June 30, 2017 and December 31, 2016 the accounts receivable reserve was approximately $37,800 for both periods. As of June 30, 2017 and December 31, 2016, the reserve for sales returns and allowances was approximately $6,000 and $50,500, respectively. |
Segments | Segments The guidance for disclosures about segments of an enterprise requires that a public business enterprise report financial and descriptive information about its operating segments. Generally, financial information is required to be reported on the basis used internally for evaluating segment performance and resource allocation. The Company manages its operations in two reportable segments for purposes of assessing performance and making operating decisions. Revenue is generated predominately in the United States, and all significant assets are held in the United States, or United States territories. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. The Company allocates resources and evaluates the performance of segments based on income or loss from operations, excluding interest, corporate expenses and other income (expenses). A summary of the company’s reportable segments is as follows: Total assets: June 30, December 31, Nutraceutical and Cosmetic Additives $ 1,651,442 $ 556,234 Finished Cosmetic Products 473,763 422,288 Eliminations (968,004 ) (188,698 ) Total $ 1,157,201 $ 789,824 Three months ended Six months ended June 30, June 30, June 30, June 30, 2017 2016 2017 2016 Net sales by segment: Nutraceutical and Cosmetic Additives $ 447,330 $ 266,060 $ 703,893 $ 551,220 Finished Cosmetic Products 660,088 964,937 827,987 2,340,055 Eliminations - (3,750 ) - (23,000 ) Total $ 1,107,418 $ 1,227,247 $ 1,531,880 $ 2,868,275 Three months ended Six months ended June 30, June 30, June 30, June 30, Net (loss) income by segment: 2017 2016 2017 2016 Nutraceutical and Cosmetic Additives $ 154,825 $ 30,165 $ 181,632 $ 114,942 Finished Cosmetic Products (188,675 ) 199,668 (315,682 ) 130,503 Other unallocated amounts: Corporate expenses (191,627 ) (383,465 ) (466,413 ) (504,173 ) Other income (expense) 921,772 (2,750 ) 224,223 (5,813 ) Consolidated net income (loss) $ 696,295 $ (156,382 ) $ (376,240 ) $ (264,541 ) |
Income Taxes | Income Taxes The Company files Corporate Federal and State tax returns, while Immudyne PR, which was formed as a limited liability corporation, files a separate tax return with any tax liabilities or benefits passing through to its members. The Company records current and deferred taxes in accordance with Accounting Standards Codification (ASC) 740, “Accounting for Income Taxes.” This ASC requires recognition of deferred tax assets and liabilities for temporary differences between tax basis of assets and liabilities and the amounts at which they are carried in the financial statements, based upon the enacted rates in effect for the year in which the differences are expected to reverse. The Company establishes a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. The Company periodically assesses the value of its deferred tax asset, a majority of which has been generated by a history of net operating losses and determines the necessity for a valuation allowance. ASC 740 also provides a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken or expected to be taken in a tax return. Using this guidance, a company may recognize the tax benefit from an uncertain tax position in its financial statements only if it is more likely-than-not (i.e., a likelihood of more than 50%) that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company’s tax returns for all years since December 31, 2013, remain open to taxing authorities. |
Stock-Based Compensation | Stock-Based Compensation The Company follows the provisions of ASC 718, “Share-Based Payment”. Under this guidance compensation cost generally is recognized at fair value on the date of the grant and amortized over the respective vesting periods. The fair value of options at the date of grant is estimated using the Black-Scholes option pricing model. The expected option life is derived from assumed exercise rates based upon historical exercise patterns and represents the period of time that options granted are expected to be outstanding. The expected volatility is based upon historical volatility of the Company’s shares using weekly price observations over an observation period that approximates the expected life of the options. The risk-free rate approximates the U.S. Treasury yield curve rate in effect at the time of grant for periods similar to the expected option life. Due to limited history of forfeitures, the estimated forfeiture rate included in the option valuation was zero. Many of the assumptions require significant judgment and any changes could have a material impact in the determination of stock-based compensation expense. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per common share is based on the weighted average number of shares outstanding during each period presented. The diluted earnings per share computation includes the effect, if any, of shares that would be issuable upon the exercise of outstanding stock options, warrants, derivative liability and convertible debt, reduced by the number of shares which are assumed to be purchased by the Company from the resulting proceeds at the average market price during the period, when such amounts are dilutive to the earnings per share calculation. The weighted average number of common stock equivalents not included in diluted income per share, because the effects are anti-dilutive, was 5,145,693 for the three months ended June 30, 2017. Common stock equivalents comprising shares underlying 11,550,273 options and warrants for the six months ended June 30, 2017 have not been included in the loss per share calculation as the effects are anti-dilutive. Common stock equivalents comprising shares underlying 12,700,273 options and warrants for the six months ended June 30, 2016 have not been included in the loss per share calculations as the effects are anti-dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. The new standard provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This pronouncement is effective for annual reporting periods beginning after December 15, 2017 but early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 addresses eight specific cash flow issues with the objective of reducing diversity in practice regarding how certain cash receipts and cash payments are presented in the statement of cash flows. The standard provides guidance on the classification of the following items: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance policies, (6) distributions received from equity method investments, (7) beneficial interests in securitization transactions, and (8) separately identifiable cash flows. The Company is required to adopt ASU 2016-15 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017 on a retrospective basis. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of adoption of ASU 2016-15. In February 2016, a pronouncement was issued that creates new accounting and reporting guidelines for leasing arrangements. The new guidance requires organizations that lease assets to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases, regardless of whether they are classified as finance or operating leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease primarily will depend on its classification as a finance or operating lease. The guidance also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early application permitted. The new standard is to be applied using a modified retrospective approach. The Company is in the process of evaluating the impact of the new pronouncement on its consolidated financial statements. At this time, the adoption of this pronouncement is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures. In May 2014, the Financial Accounting Standards Board ("FASB") issued accounting guidance, "Revenue from Contracts with Customers." The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and clarify guidance for multiple-element arrangements. The standard will be effective for fiscal years and interim periods within those years beginning after December 15, 2017. Accordingly, the Company will adopt this standard in the first quarter of fiscal year 2018. The Company does not expect it to have a material effect on the Company's consolidated financial condition, results of operations, and cash flows. All other accounting standards that have been issued or proposed by the FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. |
Noncontrolling Interests | Noncontrolling Interests The Company accounts for its less than 100% interest in Immudyne PR in accordance with ASC Topic 810, Consolidation, and accordingly the Company presents noncontrolling interests as a component of equity on its consolidated balance sheet and reports the noncontrolling interest’s share of the Immudyne PR net loss attributable to noncontrolling interests in the consolidated statement of operations. |
Concentration of Credit Risk | Concentration of Credit Risk The Company grants credit in the normal course of business to its customers. The Company periodically performs credit analysis and monitors the financial condition of its customers to reduce credit risk. The Company monitors its positions with, and the credit quality of, the financial institutions with which it invests. The Company, at times, maintains balances in various operating accounts in excess of federally insured limits. One customer in the nutraceutical and cosmetic additives division accounted for 35% and 17% of consolidated sales for the three month periods ended June 30, 2017 and 2016, respectively. This customer accounted for 42% and 16% of consolidated sales for the six month periods ended June 30, 2017 and 2016, respectively. This customer also accounted for 60% and 11% of the consolidated accounts receivable at June 30, 2017 and December 31, 2016, respectively. In the finished cosmetic products division, one credit card processor accounted for 20% of the consolidated accounts receivable at June 30, 2017. In the finished cosmetic products division, two credit card processors accounted for 35% and 32% of the consolidated accounts receivable at December 31, 2016. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of inventory | June 30, December 31, Raw materials $ 31,752 $ 38,460 Finished products 95,696 121,810 $ 127,448 $ 160,270 |
Summary of reportable segments | Total assets: June 30, December 31, Nutraceutical and Cosmetic Additives $ 1,651,442 $ 556,234 Finished Cosmetic Products 473,763 422,288 Eliminations (968,004 ) (188,698 ) Total $ 1,157,201 $ 789,824 Three months ended Six months ended June 30, June 30, June 30, June 30, 2017 2016 2017 2016 Net sales by segment: Nutraceutical and Cosmetic Additives $ 447,330 $ 266,060 $ 703,893 $ 551,220 Finished Cosmetic Products 660,088 964,937 827,987 2,340,055 Eliminations - (3,750 ) - (23,000 ) Total $ 1,107,418 $ 1,227,247 $ 1,531,880 $ 2,868,275 Three months ended Six months ended June 30, June 30, June 30, June 30, Net (loss) income by segment: 2017 2016 2017 2016 Nutraceutical and Cosmetic Additives $ 154,825 $ 30,165 $ 181,632 $ 114,942 Finished Cosmetic Products (188,675 ) 199,668 (315,682 ) 130,503 Other unallocated amounts: Corporate expenses (191,627 ) (383,465 ) (466,413 ) (504,173 ) Other income (expense) 921,772 (2,750 ) 224,223 (5,813 ) Consolidated net income (loss) $ 696,295 $ (156,382 ) $ (376,240 ) $ (264,541 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Income Taxes [Abstract] | |
Summary of deferred tax asset | Net operating loss $ 1,449,000 Accounts receivable reserves 15,000 Inventory reserves 7,000 Stock compensation 291,000 Net deferred tax asset 1,762,000 Valuation allowance (1,762,000 ) Total $ - |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Warrants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of outstanding service-based options | Number of Shares Weighted Average Year of Balance at December 31, 2016 1,954,891 $ 0.19 2017 - 2019 Issued 2,566,367 0.40 2019 - 2020 Balance at June 30, 2017 4,521,258 0.31 2017 - 2020 |
Summary of significant assumptions used to determine fair values of options issued using Black-Scholes option-pricing model | Expected volatility 127% - 215% Risk free interest rate 1.24% - 2.14% Expected dividend yield - Expected term (in years) 1.2 - 8.3 Weighted average grant date fair value $0.12 - 0.30 |
Service-Based Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of outstanding service-based options | Number of Balance at December 31, 2016 10,700,273 Issued 500,000 Balance at June 30, 2017 11,200,273 |
Summary of significant assumptions used to determine fair values of options issued using Black-Scholes option-pricing model | Significant assumptions: Risk-free interest rate at grant date 1.49 % Expected stock price volatility 216.7 % Expected dividend payout — Expected option life-years 3 years Weighted average grant date fair value $ 0.24 Forfeiture rate 0 % |
Summary of outstanding service-based options exercise price | Exercise Price Number of Weighted Average Remaining Contractual Life $0.10 1,380,273 1 year $0.20 - $0.25 8,620,000 5 years $0.40 1,200,000 5 years Total 11,200,273 |
Organization and Going Concern
Organization and Going Concern (Details) - USD ($) | Apr. 01, 2016 | Jun. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Organization and Going Concern (Textual) | ||||
Accumulated deficit | $ (10,001,198) | $ (9,693,882) | ||
Additional paid-in-capital [Member] | ||||
Organization and Going Concern (Textual) | ||||
Reduction in noncontrolling interest | $ 91,612 | |||
Immudyne PR LLC [Member] | ||||
Organization and Going Concern (Textual) | ||||
Percentage of ownership equity interest | 78.1667% | |||
Innate Skincare, LLC [Member] | ||||
Organization and Going Concern (Textual) | ||||
Percentage of ownership equity interest | 33.30% | |||
Percentage of voting controlling interest | 51.00% |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Summary of inventory | ||
Raw materials | $ 31,752 | $ 38,460 |
Finished products | 95,696 | 121,810 |
Inventory, net | $ 127,448 | $ 160,270 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Summary of reportable segments [Line Items] | |||||
Total assets | $ 1,157,201 | $ 1,157,201 | $ 789,824 | ||
Net sales | 1,107,418 | $ 1,227,247 | 1,531,880 | $ 2,868,275 | |
Net (loss) income | 696,295 | (156,382) | (376,240) | (264,541) | |
Other unallocated amounts: | |||||
Corporate expenses | (191,627) | (383,465) | (466,413) | (504,173) | |
Other income (expense) | 921,772 | (2,750) | 224,223 | (5,813) | |
Nutraceutical and Cosmetic Additives [Member] | |||||
Summary of reportable segments [Line Items] | |||||
Total assets | 1,651,442 | 1,651,442 | 556,234 | ||
Net sales | 447,330 | 266,060 | 703,893 | 551,220 | |
Net (loss) income | 154,825 | 30,165 | 181,632 | 114,942 | |
Finished Cosmetic Products [Member] | |||||
Summary of reportable segments [Line Items] | |||||
Total assets | 473,763 | 473,763 | 422,288 | ||
Net sales | 660,088 | 964,937 | 827,987 | 2,340,055 | |
Net (loss) income | (188,675) | 199,668 | (315,682) | 130,503 | |
Eliminations [Member] | |||||
Summary of reportable segments [Line Items] | |||||
Total assets | (968,004) | (968,004) | $ (188,698) | ||
Net sales | $ (3,750) | $ (23,000) |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Summary of Significant Accounting Policies (Textual) | |||||
Non-controlling interest rate | 21.8333% | ||||
Variable Interest Entity, assets | $ 12,051 | $ 12,051 | $ 10,306 | ||
Variable Interest Entity, liabilities | 18,481 | 18,481 | 5,748 | ||
Variable Interest Entity, revenues | 1,507 | ||||
Variable Interest Entity, operating expenses | 1,519 | ||||
Inventory reserve | 20,000 | 20,000 | 20,000 | ||
Customer discounts, returns and rebates | 12,000 | $ 620,000 | 50,000 | $ 1,050,000 | |
Revenue | 1,107,418 | 1,227,247 | 1,531,880 | 2,868,275 | |
Accounts receivable reserve | $ 37,800 | 37,800 | 37,800 | ||
Weighted average number of common stock | 5,145,693 | ||||
Sales returns and allowances | $ 6,000 | $ 50,500 | |||
Consolidated VIE, description | Company consolidated nine VIEs. | Company consolidated nine VIEs. | |||
Noncontrolling interests, description | The Company accounts for its less than 100% interest in Immudyne PR in accordance with ASC Topic 810, Consolidation, and accordingly the Company presents noncontrolling interests as a component of equity on its consolidated balance sheet and reports the noncontrolling interest's share of the Immudyne PR net loss attributable to noncontrolling interests in the consolidated statement of operations. | ||||
Income tax, description | More than 50 | ||||
Nutraceutical and Cosmetic Additives [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Revenue | $ 447,330 | 266,060 | $ 703,893 | 551,220 | |
Finished Cosmetic Products [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Revenue | $ 660,088 | $ 964,937 | $ 827,987 | $ 2,340,055 | |
Sales [Member] | One customer [Member] | Nutraceutical and Cosmetic Additives [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Concentration risk percentage | 35.00% | 17.00% | 42.00% | 16.00% | |
Accounts Receivable [Member] | One credit card processor [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Concentration risk percentage | 20.00% | 35.00% | |||
Accounts Receivable [Member] | Two credit card processor [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Concentration risk percentage | 32.00% | ||||
Accounts Receivable [Member] | One customer [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Concentration risk percentage | 60.00% | 11.00% | |||
Option [Member] | Warrant [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Antidilutive securities excluded from computation of earnings per share | 11,550,273 | 12,700,273 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Oct. 31, 2016 | Mar. 31, 2017 | Feb. 28, 2017 | Jan. 31, 2017 | Nov. 30, 2015 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2016 | Aug. 31, 2016 |
Notes Payable (Textual) | |||||||||||||
Borrowed from commercial lender | $ 309,043 | ||||||||||||
Interest rate on notes payable | 11.00% | ||||||||||||
Maturity date on notes payable | Nov. 1, 2016 | ||||||||||||
Interest expense | $ 3,063 | $ 250 | $ 2,750 | 649,607 | 5,813 | ||||||||
Interest rate period | 11.00% | ||||||||||||
Common stock shares issued | 250,000 | 62,500 | |||||||||||
Issuance of common stock in relation to debt offering | $ 58,750 | 56,522 | |||||||||||
Amortization of debt discount | $ 25,035 | 81,558 | |||||||||||
Repaid of principal amount | $ 70,000 | 81,420 | 81,420 | $ 68,600 | |||||||||
Common stock for maximum offering | $ 200,000 | ||||||||||||
Conversion price | $ 0.23 | ||||||||||||
Exercise price | $ 0.40 | ||||||||||||
Term of warrant | 3 years | ||||||||||||
Common stock shares issued related promissory note | 217,391 | ||||||||||||
Interest expense on notes | 131,117 | ||||||||||||
Borrowing amount | 499,802 | 25,000 | $ 210,000 | 499,802 | (50,000) | ||||||||
Flat fee | $ 250 | ||||||||||||
Agreement term | 60 days | ||||||||||||
Converted remaining principle balance | 140,000 | 49,980 | |||||||||||
Conversion of fair market value shares and warrants issued | 566,030 | 179,384 | |||||||||||
Loss on settlement of notes payable | 423,818 | 129,404 | |||||||||||
Accrued interest | $ 2,212 | $ 2,212 | |||||||||||
Borrowings under working capital | $ 66,000 | ||||||||||||
Common Stock [Member] | |||||||||||||
Notes Payable (Textual) | |||||||||||||
Common stock shares issued | 217,391 | ||||||||||||
Issuance of common stock in relation to debt offering | $ 2,174 | ||||||||||||
Converted remaining principle balance, shares | 559,179 | 196,000 | |||||||||||
Warrant [Member] | |||||||||||||
Notes Payable (Textual) | |||||||||||||
Converted remaining principle balance, shares | 304,348 | 98,000 | |||||||||||
Promissory note [Member] | |||||||||||||
Notes Payable (Textual) | |||||||||||||
Interest rate on notes payable | 11.00% | ||||||||||||
Original debt, discount | 5.00% | ||||||||||||
Original debt, principle amount | $ 210,000 | ||||||||||||
Borrowing amount | $ 50,000 | $ 200,000 | $ 150,000 | $ 150,000 | |||||||||
Promissory note one [Member] | |||||||||||||
Notes Payable (Textual) | |||||||||||||
Borrowing amount | 50,000 | $ 50,000 | |||||||||||
Promissory note two [Member] | |||||||||||||
Notes Payable (Textual) | |||||||||||||
Borrowing amount | $ 100,000 | ||||||||||||
Officer [Member] | |||||||||||||
Notes Payable (Textual) | |||||||||||||
Maturity date on notes payable | Feb. 28, 2017 | ||||||||||||
Interest expense | 0 | $ 0 | 1,713 | $ 313 | |||||||||
Convertible promissory note | $ 100,000 | ||||||||||||
American Express Working Capital [Member] | |||||||||||||
Notes Payable (Textual) | |||||||||||||
Borrowing amount | $ 74,043 | 74,043 | |||||||||||
Flat fee | $ 1,111 | ||||||||||||
Agreement term | 90 days | ||||||||||||
Commercial Lender [Member] | |||||||||||||
Notes Payable (Textual) | |||||||||||||
Borrowed from commercial lender | $ 100,000 |
Income Taxes (Details)
Income Taxes (Details) | Jun. 30, 2017USD ($) |
Components of deferred tax liabilities and assets | |
Net operating loss | $ 1,449,000 |
Accounts receivable reserves | 15,000 |
Inventory reserves | 7,000 |
Stock compensation | 291,000 |
Net deferred tax asset | 1,762,000 |
Valuation allowance | (1,762,000) |
Total |
Income Taxes (Details Textual)
Income Taxes (Details Textual) | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Income Taxes (Textual) | |
Net operating loss carryforwards | $ 4,260,600 |
Operating loss carryforwards, expiration date | Dec. 31, 2037 |
Percentage of tax rate | 34.00% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Service-Based Stock Options [Member] | 6 Months Ended |
Jun. 30, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Options/Warrants, Beginning Balance | 10,700,273 |
Number of Options, Issued | 500,000 |
Number of Options/Warrants, Ending balance | 11,200,273 |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - Stock Options [Member] | 6 Months Ended |
Jun. 30, 2017$ / shares | |
Summary of significant assumptions used to determine the fair values of options using black-scholes option-pricing model | |
Risk-free interest rate at grant date | 1.49% |
Expected stock price volatility | 216.70% |
Expected dividend payout | |
Expected option life-years | 3 years |
Weighted average grant date fair value | $ 0.24 |
Forfeiture rate | 0.00% |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - $ / shares | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Employee Stock Option [Member] | ||
Summary of outstanding service-based options | ||
Number of Options | 11,200,273 | 10,700,273 |
$0.10 [Member] | ||
Summary of outstanding service-based options | ||
Exercise Price | $ 0.10 | |
Number of Options | 1,380,273 | |
Weighted Average Remaining Contractual Life | 1 year | |
$0.20 - $0.25 [Member] | ||
Summary of outstanding service-based options | ||
Number of Options | 8,620,000 | |
Weighted Average Remaining Contractual Life | 5 years | |
$0.20 - $0.25 [Member] | Minimum [Member] | ||
Summary of outstanding service-based options | ||
Exercise Price | $ 0.20 | |
$0.20 - $0.25 [Member] | Maximum [Member] | ||
Summary of outstanding service-based options | ||
Exercise Price | 0.25 | |
0.40 [Member] | ||
Summary of outstanding service-based options | ||
Exercise Price | $ 0.40 | |
Number of Options | 1,200,000 | |
Weighted Average Remaining Contractual Life | 5 years |
Stockholders' Equity (Details 3
Stockholders' Equity (Details 3) - Warrant [Member] | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Options/Warrants, Beginning Balance | shares | 1,954,981 |
Number of shares, issued | shares | 2,566,367 |
Number of Options/Warrants, Ending balance | shares | 4,521,258 |
Weighted Average Exercise Price, Beginning Balance, | $ / shares | $ 0.19 |
Weighted Average Exercise Price, Issued | $ / shares | 0.40 |
Weighted Average Exercise Price, Ending Balance, | $ / shares | $ 0.31 |
Year of Expiration, Beginning Balance | 2017-2019 |
Year of Expiration, Issued | 2019 - 2020 |
Year of Expiration, Ending Balance | 2017-2019 |
Stockholders' Equity (Details 4
Stockholders' Equity (Details 4) - Warrant [Member] | 6 Months Ended |
Jun. 30, 2017$ / shares | |
Summary of fair value of options and warrants granted using black-scholes option-pricing model with weighted-average assumptions | |
Expected dividend yield | |
Maximum [Member] | |
Summary of fair value of options and warrants granted using black-scholes option-pricing model with weighted-average assumptions | |
Expected volatility | 215.00% |
Risk free interest rate | 2.14% |
Expected term (in years) | 1 year 2 months 12 days |
Weighted average grant date fair value | $ 0.30 |
Minimum [Member] | |
Summary of fair value of options and warrants granted using black-scholes option-pricing model with weighted-average assumptions | |
Expected volatility | 127.00% |
Risk free interest rate | 1.24% |
Expected term (in years) | 8 years 3 months 19 days |
Weighted average grant date fair value | $ 0.12 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) | Jun. 01, 2017USD ($)shares | Apr. 01, 2016USD ($) | Mar. 31, 2016USD ($)Consultantsshares | Apr. 30, 2017USD ($)$ / sharesshares | Apr. 24, 2017USD ($)$ / sharesshares | Feb. 28, 2017USD ($)$ / sharesshares | Jan. 31, 2017USD ($)$ / sharesshares | Nov. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Jul. 31, 2016USD ($)$ / sharesshares | May 31, 2016USD ($)Consultants$ / sharesshares | Jun. 30, 2017USD ($)shares | Mar. 31, 2017USD ($)$ / sharesshares | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($)Consultants$ / sharesshares | Apr. 02, 2016 |
Stockholders' Equity (Textual) | ||||||||||||||||||
Common stock issued for services as per agreement | $ 84,167 | $ 0 | $ 160,833 | $ 230,000 | ||||||||||||||
Outstanding shares purchased | shares | 12,800 | 12,800 | 325,000 | |||||||||||||||
Purchase of common stock description | Common stock for a price per share of $0.24 to $0.26. | Common stock through an exchange for a price per share of $0.23 to $0.29. | ||||||||||||||||
Treasury stock, value | $ 90,204 | $ 90,204 | $ 87,053 | |||||||||||||||
Treasury stock, common shares | shares | 337,800 | 337,800 | 325,000 | |||||||||||||||
Common stock, shares issued | shares | 217,391 | 40,995,763 | 40,995,763 | 35,570,157 | ||||||||||||||
Note payable | $ 25,000 | $ 210,000 | $ (50,000) | $ 499,802 | ||||||||||||||
Recognized expense | $ 76,667 | 230,000 | $ 153,333 | 230,000 | ||||||||||||||
Offering to sell shares of common stock | shares | 4,000,000 | |||||||||||||||||
Sale of stock, price per share | $ / shares | $ 0.23 | |||||||||||||||||
Warrants to purchase of common stock | shares | 2,000,000 | |||||||||||||||||
Subscriptions shares received | shares | 217,390 | 2,817,156 | ||||||||||||||||
Issued of warrants | shares | 108,696 | 1,408,578 | ||||||||||||||||
Proceeds from subscription of value | $ 647,944 | |||||||||||||||||
Conversion of common stock, shares | shares | 755,179 | |||||||||||||||||
Net (Loss) | 696,295 | (156,382) | (376,240) | (264,541) | ||||||||||||||
Stock compensation expense | 79,695 | 0 | 113,522 | 118,562 | ||||||||||||||
Intrinsic value of options exercised | $ 1,131,805 | $ 704,794 | ||||||||||||||||
Stock options, expiration date | Dec. 31, 2017 | |||||||||||||||||
Fair value stock options, stock warrants embedded conversion features | $ 955,014 | 192,254 | ||||||||||||||||
Warrants exercise price | $ / shares | $ 0.40 | |||||||||||||||||
Unamortized of service agreements | 153,333 | 153,333 | $ 306,667 | |||||||||||||||
General and administrative expense | 348,671 | 79,487 | $ 475,843 | 177,899 | ||||||||||||||
Issuance of Common Stock [Member] | Subscription Agreement [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Issued of warrants | shares | 131,103 | |||||||||||||||||
Aggregate fair value | $ 131,103 | |||||||||||||||||
Warrants issued | shares | 108,696 | |||||||||||||||||
Warrants exercise price | $ / shares | $ 0.40 | |||||||||||||||||
Issuance of company stock, shares | shares | 217,390 | |||||||||||||||||
General and administrative expense | $ 81,103 | |||||||||||||||||
Satisfaction of obligation to pay amount | $ 50,000 | |||||||||||||||||
Stock Options [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Number of stock options issued | shares | 500,000 | |||||||||||||||||
Stock compensation expense | 40,829 | $ 113,522 | 40,829 | |||||||||||||||
Stock Options [Member] | Director [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Number of stock options issued | shares | 500,000 | |||||||||||||||||
Number of options granted, value | $ 113,522 | |||||||||||||||||
Weighted average exercise price stock option issued | $ / shares | $ 0.20 | |||||||||||||||||
Options fully vested and expiration period | 10 years | |||||||||||||||||
Performance-Based Stock Options [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Stock compensation expense | 0 | 38,867 | ||||||||||||||||
Aggregate fair value | 85,608 | |||||||||||||||||
Unearned share based compensation | 85,608 | $ 85,608 | ||||||||||||||||
Performance-Based Stock Options [Member] | Vested [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Number of stock options issued | shares | 2,925,000 | |||||||||||||||||
Weighted average exercise price stock option issued | $ / shares | $ 0.40 | |||||||||||||||||
Number of consultant | Consultants | 2 | |||||||||||||||||
Stock compensation expense | 38,867,000 | 77,733 | ||||||||||||||||
Annual sales revenue target | $ 5,000,000 | |||||||||||||||||
Company cancelled service-based options, shares | shares | 287,500 | |||||||||||||||||
Company cancelled service-based options, value | $ 12,457 | |||||||||||||||||
Fair value stock options, stock warrants embedded conversion features | $ 120,867 | |||||||||||||||||
Performance-Based Stock Options [Member] | Unvested [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Number of stock options issued | shares | 1,150,000 | |||||||||||||||||
Number of consultant | Consultants | 2 | |||||||||||||||||
Company cancelled service-based options, shares | shares | 287,500 | |||||||||||||||||
Company cancelled service-based options, value | $ 5,542 | |||||||||||||||||
Warrant [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Issued of warrants | shares | 55,000 | |||||||||||||||||
Proceeds from subscription of value | $ 25,300 | $ 25,300 | ||||||||||||||||
Warrants exercise price | $ / shares | $ 0.19 | |||||||||||||||||
Warrant [Member] | Sale of common stock [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Warrants issued | shares | 55,000 | 100,000 | 37,500 | |||||||||||||||
Warrants exercise price | $ / shares | $ 0.40 | $ 0.50 | $ 0.50 | |||||||||||||||
Warrants fully vested and expiration period | 2 years | 2 years | 2 years | |||||||||||||||
Warrant [Member] | Consulting services [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Warrants issued | shares | 100,000 | |||||||||||||||||
Warrants fully vested and expiration period | 3 years | |||||||||||||||||
Warrant [Member] | Issuance of Common Stock [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Subscriptions shares received | shares | 110,000 | 110,000 | ||||||||||||||||
Warrants issued | shares | 108,696 | 591,745 | 403,348 | 217,391 | ||||||||||||||
Warrants exercise price | $ / shares | $ 0.40 | $ 0.40 | $ 0.40 | $ 0.40 | ||||||||||||||
Warrants fully vested and expiration period | 3 years | 2 years | 2 years | 2 years | ||||||||||||||
Warrant One [Member] | Issuance of Common Stock [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Warrants issued | shares | 1,408,578 | |||||||||||||||||
Warrants exercise price | $ / shares | $ 0.40 | |||||||||||||||||
Warrants fully vested and expiration period | 2 years | |||||||||||||||||
Minimum [Member] | Performance-Based Stock Options [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Annual sales revenue target | $ 5,000,000 | |||||||||||||||||
Minimum [Member] | Performance-Based Stock Options [Member] | Vested [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Stock options, expiration date | Dec. 31, 2021 | |||||||||||||||||
Minimum [Member] | Performance-Based Stock Options [Member] | Unvested [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Weighted average exercise price stock option issued | $ / shares | $ 0.40 | |||||||||||||||||
Stock options, expiration date | Dec. 31, 2021 | |||||||||||||||||
Annual sales revenue target | $ 5,000,000 | |||||||||||||||||
Minimum [Member] | Warrant [Member] | Consulting services [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Warrants exercise price | $ / shares | $ 0.20 | |||||||||||||||||
Maximum [Member] | Performance-Based Stock Options [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Annual sales revenue target | $ 10,000,000 | |||||||||||||||||
Maximum [Member] | Performance-Based Stock Options [Member] | Vested [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Stock options, expiration date | Dec. 31, 2026 | |||||||||||||||||
Maximum [Member] | Performance-Based Stock Options [Member] | Unvested [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Weighted average exercise price stock option issued | $ / shares | $ 0.80 | |||||||||||||||||
Stock options, expiration date | Dec. 31, 2027 | |||||||||||||||||
Annual sales revenue target | $ 10,000,000 | |||||||||||||||||
Maximum [Member] | Warrant [Member] | Consulting services [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Warrants exercise price | $ / shares | $ 0.50 | |||||||||||||||||
Immudyne PR [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Common stock issued for services as per agreement | $ 500,000 | |||||||||||||||||
Common stock, shares issued | shares | 1,183,490 | |||||||||||||||||
Conversion of common stock | $ 272,203 | |||||||||||||||||
Recognized expense | $ 25,000 | 83,333 | ||||||||||||||||
Minority interest rate | 78.1667% | |||||||||||||||||
Charge to noncontrolling interest | $ 91,612 | |||||||||||||||||
Net (Loss) | $ 41,194 | $ 43,594 | 68,924 | $ 2,516 | ||||||||||||||
Immudyne PR [Member] | Minimum [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Minority interest rate | 21.8333% | |||||||||||||||||
Immudyne PR [Member] | Maximum [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Minority interest rate | 66.70% | |||||||||||||||||
Consultants [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Common stock issued for services as per agreement, shares | shares | 125,000 | 2,300,000 | ||||||||||||||||
Common stock issued for services as per agreement | $ 45,000 | 690,000 | ||||||||||||||||
Charge to noncontrolling interest | $ 91,612 | |||||||||||||||||
Number of consultant | Consultants | 2 | |||||||||||||||||
Stock compensation expense | $ 7,500 | |||||||||||||||||
Consultants [Member] | Stock Options [Member] | ||||||||||||||||||
Stockholders' Equity (Textual) | ||||||||||||||||||
Number of stock options issued | shares | 50,000 | 50,000 | 175,000 | |||||||||||||||
Number of options granted, value | $ 9,980 | $ 12,397 | $ 40,829 | |||||||||||||||
Weighted average exercise price stock option issued | $ / shares | $ 0.50 | $ 0.20 | $ 0.20 | |||||||||||||||
Options fully vested and expiration period | 2 years | 10 years | 10 years | |||||||||||||||
Number of consultant | Consultants | 2 |
Royalties (Details)
Royalties (Details) - USD ($) | 1 Months Ended | 3 Months Ended |
Apr. 30, 2017 | Jun. 30, 2017 | |
Royalties (Textual) | ||
Royalty expense | $ 12,112 | |
Accounts payable and accrued expenses | $ 12,112 | |
Issuance of common stock [Member] | Subscription Agreement [Member] | ||
Royalties (Textual) | ||
Warrants issued | 108,696 | |
Issuance of company stock | 217,390 | |
Satisfaction of obligation to pay amount | $ 50,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Jun. 01, 2017USD ($) | Sep. 01, 2016 | Apr. 01, 2016USD ($)shares | Apr. 30, 2017USD ($)shares | Jun. 30, 2017USD ($)Thresholds$ / sharesshares | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)Thresholds$ / sharesshares | Jun. 30, 2016USD ($) | Dec. 30, 2017USD ($) | Dec. 31, 2016$ / sharesshares |
Commitments and Contingencies (Textual) | ||||||||||
Operating lease expired date | May 31, 2016 | |||||||||
Monthly base lease rental payments | $ 9,000 | |||||||||
Operating leases, rent expense | $ 38,039 | $ 27,284 | 74,100 | $ 43,900 | ||||||
Annual compensation | $ 145,000 | |||||||||
Stock option exercise prices lower range limit | $ / shares | $ 0.40 | |||||||||
Stock option exercise prices upper range limit | $ / shares | $ 0.80 | |||||||||
Stock issued during period performance based options to purchase common stock | shares | 4,400,000 | 4,400,000 | ||||||||
Annual revenue base | $ 5,000,000 | |||||||||
Annual revenue exceeding | $ 10,000,000 | |||||||||
Percentage of bonus compensation for pretax income | 15.00% | |||||||||
Pretax income percentage | 5.00% | |||||||||
Restricted shares issued | shares | 2,250,000 | |||||||||
Common stock issued for services as per agreement | $ 84,167 | 0 | $ 160,833 | 230,000 | ||||||
Share price | $ / shares | $ 0.20 | $ 0.20 | $ 0.30 | |||||||
Stock options, Expiration date | Dec. 31, 2017 | |||||||||
Purchase common stock option | shares | 3,000,000 | |||||||||
Number of thresholds | Thresholds | 3 | 3 | ||||||||
Accrued expense | $ 33,333 | $ 33,333 | ||||||||
Recognized expenses related to performance fee | 76,667 | $ 230,000 | 153,333 | 230,000 | ||||||
Issuance of Common Stock [Member] | Subscription Agreement [Member] | ||||||||||
Commitments and Contingencies (Textual) | ||||||||||
Warrants issued | shares | 108,696 | |||||||||
Issuance of company stock, shares | shares | 217,390 | |||||||||
Satisfaction of obligation to pay amount | $ 50,000 | |||||||||
Mark McLaughlin [Member] | ||||||||||
Commitments and Contingencies (Textual) | ||||||||||
Operating leases, rent expense | 2,000 | |||||||||
Immudyne PR [Member] | ||||||||||
Commitments and Contingencies (Textual) | ||||||||||
Office space subleased | 4,000 | |||||||||
Restricted shares issued | shares | 150,000 | |||||||||
Common stock issued for services as per agreement | $ 500,000 | |||||||||
Restricted shares value | $ 5,000,000 | |||||||||
Agreements of performance fees, Description | In addition, Immudyne PR shall pay Pilaris a performance fee of $50,000 on the 180-day anniversary of the agreement and an additional $50,000 performance fee on the 365-day anniversary of the agreement. For the three and six months ended June 30, 2017, the Company recognized expenses related to the performance fee in the amount of $25,000 and $83,333, respectively. | |||||||||
Percentage of net income | 10.00% | |||||||||
Recognized expenses related to performance fee | $ 25,000 | $ 83,333 | ||||||||
Consultants [Member] | ||||||||||
Commitments and Contingencies (Textual) | ||||||||||
Restricted shares issued | shares | 1,000,000 | |||||||||
Common stock issued for services as per agreement | $ 45,000 | $ 690,000 | ||||||||
Combined capped | shares | 1,500,000 | |||||||||
Restricted Stock and Options [Member] | ||||||||||
Commitments and Contingencies (Textual) | ||||||||||
Restricted shares issued | shares | 2,300,000 | |||||||||
Share price | $ / shares | $ 0.20 | $ 0.20 | ||||||||
Restricted Stock and Options [Member] | Scenario, Forecast [Member] | ||||||||||
Commitments and Contingencies (Textual) | ||||||||||
Restricted stock expense | $ 690,000 | |||||||||
Restricted Stock One [Member] | ||||||||||
Commitments and Contingencies (Textual) | ||||||||||
Common stock issued for services as per agreement | $ 0 | $ 0 | ||||||||
Restricted shares value | $ 1,250,000 | |||||||||
Combined capped | shares | 3,000,000 | |||||||||
Additional bonus shares | shares | 750,000 | |||||||||
Option to buy shares | shares | 1,000,000 | |||||||||
Restricted Stock Two [Member] | ||||||||||
Commitments and Contingencies (Textual) | ||||||||||
Restricted shares value | $ 2,000,000 | |||||||||
Restricted Stock Three [Member] | ||||||||||
Commitments and Contingencies (Textual) | ||||||||||
Restricted shares value | $ 3,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Related Party Transactions (Textual) | ||||
Compensation for legal and business advisory services | $ 3,000 | $ 9,000 | ||
Accountant charges per month | $ 121,952 | 125,359 | 221,584 | 194,674 |
Immudyne PR [Member] | ||||
Related Party Transactions (Textual) | ||||
Compensation for legal and business advisory services | 32,160 | 42,556 | ||
Accountant charges per month | $ 3,000 | |||
Annual incentive bonus award percentage | 0.50% | |||
Office space subleased | $ 4,000 | |||
President [Member] | ||||
Related Party Transactions (Textual) | ||||
Reimbursement of home office expenditures | $ 6,000 | $ 6,000 | $ 14,000 | $ 14,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Aug. 31, 2017 | Jul. 31, 2017 | Apr. 24, 2017 | Feb. 28, 2017 | Mar. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Subsequent Events (Textual) | |||||||
Stock issued for cash, value | $ 673,245 | ||||||
Share price | $ 0.20 | $ 0.30 | |||||
Agreement term | 60 days | ||||||
Issued of warrants | 108,696 | 1,408,578 | |||||
Subsequent Events [Member] | |||||||
Subsequent Events (Textual) | |||||||
Shares of common stock, value | $ 432,000 | ||||||
Shares of common stock, shares | 900,000 | ||||||
Pre-tax earnings | $ 6,000,000 | ||||||
Subsequent Events [Member] | Option One [Member] | |||||||
Subsequent Events (Textual) | |||||||
Pre-tax earnings | $ 1,000,000 | ||||||
Options vested term | 10 years | ||||||
Option to buy shares | 500,000 | ||||||
Option vested share price | $ 0.25 | ||||||
Subsequent Events [Member] | Option Two [Member] | |||||||
Subsequent Events (Textual) | |||||||
Pre-tax earnings | $ 1,000,000 | ||||||
Options vested term | 10 years | ||||||
Option to buy shares | 500,000 | ||||||
Option vested share price | $ 0.25 | ||||||
Subsequent Events [Member] | Option Three [Member] | |||||||
Subsequent Events (Textual) | |||||||
Pre-tax earnings | $ 7,000,000 | ||||||
Option to buy shares | 500,000 | ||||||
Option vested share price | $ 0.35 | ||||||
Subsequent Events [Member] | Mark McLaughlin [Member] | |||||||
Subsequent Events (Textual) | |||||||
Agreement term | 3 years | ||||||
Annual salary | $ 145,600 | ||||||
Annual cash bonus | 100,000 | ||||||
Additional cash bonus | 75,000 | ||||||
Pre-tax earnings | 4,000,000 | ||||||
Subsequent Events [Member] | Mark McLaughlin [Member] | Option [Member] | |||||||
Subsequent Events (Textual) | |||||||
Pre-tax earnings | $ 4,000,000 | ||||||
Options vested term | 10 years | ||||||
Option to buy shares | 500,000 | ||||||
Option vested share price | $ 0.25 | ||||||
Option vesting, description | As additional compensation, the Company issued 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. | ||||||
Subsequent Events [Member] | Mark McLaughlin [Member] | Option Four [Member] | |||||||
Subsequent Events (Textual) | |||||||
Shares of common stock, shares | 800,000 | ||||||
Option exercised, shares | 1,000,000 | ||||||
Subsequent Events [Member] | Mark McLaughlin [Member] | Option Five [Member] | |||||||
Subsequent Events (Textual) | |||||||
Shares of common stock, shares | 271,579 | ||||||
Option exercised, shares | 339,473 | ||||||
Subsequent Events [Member] | Mark McLaughlin [Member] | Warrant [Member] | |||||||
Subsequent Events (Textual) | |||||||
Shares of common stock, shares | 1,140,000 | ||||||
Exercised of warrants | 1,500,000 | ||||||
Subsequent Events [Member] | Bruzzese and Strawn [Member] | |||||||
Subsequent Events (Textual) | |||||||
Agreement term | 3 years | ||||||
Subsequent Events [Member] | Bruzzese and Strawn [Member] | Option [Member] | |||||||
Subsequent Events (Textual) | |||||||
Pre-tax earnings | $ 4,000,000 | $ 4,000,000 | |||||
Options vested term | 10 years | ||||||
Option to buy shares | 62,500 | 100,000 | |||||
Option vested share price | $ 0.25 | $ 0.35 | |||||
Subsequent Events [Member] | Bruzzese and Strawn [Member] | Option One [Member] | |||||||
Subsequent Events (Textual) | |||||||
Pre-tax earnings | $ 1,000,000 | $ 1,000,000 | |||||
Options vested term | 10 years | 10 years | |||||
Option to buy shares | 62,500 | 75,000 | |||||
Option vested share price | $ 0.25 | $ 0.25 | |||||
Subsequent Events [Member] | Bruzzese and Strawn [Member] | Option Two [Member] | |||||||
Subsequent Events (Textual) | |||||||
Additional option, description | Up to a total of $7,000,000, the Company will issue an additional. | ||||||
Pre-tax earnings | $ 1,000,000 | $ 7,000,000 | |||||
Options vested term | 10 years | 10 years | |||||
Option to buy shares | 62,500 | 75,000 | |||||
Option vested share price | $ 0.35 | $ 0.35 | |||||
Subsequent Events [Member] | Bruzzese and Strawn [Member] | Option Three [Member] | |||||||
Subsequent Events (Textual) | |||||||
Pre-tax earnings | $ 1,000,000 | ||||||
Options vested term | 10 years | ||||||
Option to buy shares | 75,000 | ||||||
Option vested share price | $ 0.25 | ||||||
Subsequent Events [Member] | BV Global Fulfillment, LLC [Member] | Option [Member] | |||||||
Subsequent Events (Textual) | |||||||
Options vested term | 10 years | ||||||
Option to buy shares | 50,000 | ||||||
Option vested share price | $ 0.35 | ||||||
Subsequent Events [Member] | Acorn Management Partners, LLC [Member] | |||||||
Subsequent Events (Textual) | |||||||
Shares of common stock, shares | 100,000 | ||||||
Cash receive from Acorn | $ 7,500 | ||||||
Service agreement, description | The Agreement, Acorn shall receive $7,500 cash monthly. As additional compensation, the Company shall issue within five (5) days of signing 100,000 shares of the Company's common stock and upon each three (3) month period thereafter during the term of the Agreement an additional 100,000 shares of the Company's common stock for a total of 400,000 shares of the Company's common stock. | ||||||
Subsequent Events [Member] | Brunilda McLaughlin [Member] | |||||||
Subsequent Events (Textual) | |||||||
Share price | $ 0.35 | ||||||
Number of shares, issued | 75,000 | ||||||
Options vested term | 10 years | ||||||
Subsequent Events [Member] | Immudyne PR [Member] | |||||||
Subsequent Events (Textual) | |||||||
Stock issued for cash, value | $ 4,000,000 | ||||||
Stock issued for cash, shares | 1,500,000 | ||||||
Additional option, description | Upon receipt of an additional $1,000,000, the Company will issue an additional ten year option to buy 1,500,000 shares at $0.25. Upon receipt of each additional $1,000,000, up to a total of $7,000,000, the Company will issue an additional ten year option to buy 1,500,000 shares at $0.35. | ||||||
Share price | $ 0.25 | ||||||
Agreement term | 3 years |