What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-04-15 compared with 2020-05-14 · 415 added, 577 removed, 200 unchanged (83% of the section changed)

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Audited Financial Statements:

Report of Independent

Registered Public Accounting Firm, May 14, 2020

Report of Independent Registered Public Accounting

Firm, April 12, 2019

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2020 and 2019

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We have audited the accompanying balance

sheet of Skinvisible, Inc.

(the “Company”) as of December 31, 2019, and the related statements of operations, stockholders’

deficit, and cash flows for the year ended December 31, 2019, and the related notes (collectively referred to as the financial

In our opinion, the financial statements present fairly, in all material respects, the financial position of the

Company as of December 31, 2019, and the results of its operations and its cash flows for the year ended December 31, 2019, in

conformity with accounting principles generally accepted in the United States of America.

sheets of Skinvisible, Inc.

(the Company) as of December 31, 2020 and 2019, and the related statements of operations, stockholders’

deficit, and cash flows for each of the years in the two-year period ended December 31, 2020, and the related notes (collectively

referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the

financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each

of the years in the two-year period ended December 31, 2020, in conformity with accounting principles generally accepted in the

United States of America.

Going Concern

The accompanying financial statements have

been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements,

the Company has minimal revenues, has negative working capital at December 31, 2019, has incurred recurring losses and recurring

negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt about its ability

to continue as a going concern.

Management’s plans concerning these matters are also described in Note 2.

The financial

statements do not include any adjustments that might result from the outcome of this uncertainty.

The accompanying financial statements have been

prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company

has incurred cumulative net losses, which raises substantial doubt about its ability to continue as a going concern.

Management’s

plans concerning these matters are also described in Note 2.

The financial statements do not include any adjustments that might

result from the outcome of this uncertainty.

Basis for Opinion

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rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with

We conducted our audits in accordance with

the standards of the PCAOB.

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nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required

to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the

effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures

to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures

in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable

basis for our opinion.

/s/ Prager Metis CPAs, LLC

We have served as the Company’s auditor since 2019

Las Vegas, Nevada

REPORT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

To the Board of Directors and Stockholders

Skinvisible, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheet

of Skinvisible, Inc.

(the “Company”) as of December 31, 2018 and the related consolidated statements of operations,

stockholders’

deficit, and cash flows for the period ended December 31, 2018, and the related notes (collectively referred

to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects,

the financial position of the Company as of December 31, 2018, and the results of its operations and its cash flows for the period

ended December 31, 2018 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based

on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement, whether due to error or fraud.

The company is not required to have,

nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required

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Accordingly, we express no such opinion.

Our audits included performing procedures to

assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures

Our audits included performing procedures

to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

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reasonable basis for our opinion.

The accompanying financial statements have been prepared assuming

that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company has negative

working capital at December 31, 2018, has incurred recurring negative cash flow from operating activities, and has an accumulated

deficit which raises substantial doubt about its ability to continue as a going concern.

Management’s plans concerning these

matters are also described in Note 2.

The financial statements do not include any adjustments that might result from the outcome

of this uncertainty .

/s/ AMC Auditing

Critical Audit Matters

The critical audit matters communicated

below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated

to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved

our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any

way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below,

providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition

As described in Note 3, to the financial

statements, the Company recognizes revenue when title to the products are transferred to the customer and only when no further

contingencies or material performance obligations are warranted, and thereby have earned the right to receive reasonably assured

payments for products sold and delivered.

The principal considerations for our determination

that performing procedures relating to revenue recognition as a critical audit matter are the significant judgement by management

in determining the nature, timing and extent in the recognition of revenue, this in turn led to significant auditor judgement,

subjectivity, and effort in performing procedures and evaluating audit evidence.

Addressing the matter involved performing

procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.

These procedures

1) evaluating the appropriateness and consistency of management’s methods and assumptions used in identification,

recognition, measurement and disclosure of revenue 2) reading contract source documents for each audit selection, including master

agreements, and other documents that were part of the agreement 3) testing management's identification and treatment of contract

terms 4) Assessing the terms in the customer agreement and evaluated the appropriateness of management's application of their

accounting policies, along with their use of estimates, in the determination of revenue recognition conclusions 5) testing the

mathematical accuracy of management's calculations of revenue and the associated timing of revenue recognized in the financial

Valuation of Intangible Assets

As disclosed in Note 6, to the financial

statements, intangible assets are tested for impairment at least annually and has determined that no impairment write-down is considered

necessary as of December 31, 2020.

Auditing management’s impairment tests of intangible assets was complex and highly judgmental

due to the significant measurement uncertainty in determining the fair values of intangible assets.

The principal considerations for our determination

that performing procedures relating to the valuation of intangible assets as a critical audit matter are the significant judgement

by management in determining the nature, timing and extent of the carrying value of intangible assets, this in turn led to significant

auditor judgement, subjectivity, and effort in performing procedures and evaluating audit evidence.

Addressing the matter included assessing

methodologies and testing the significant assumptions and underlying data used by the Company.

We compared the significant assumptions

used in the Company’s plan for the next twelve months, as well as revenue and operating margins, to current industry and

economic trends, including the impact of COVID-19.

/s/ Prager Metis CPAs, LLC

We have served as the Company’s auditor since 2019.

Las Vegas, Nevada

Basking Ridge, NJ

April 15, 2020

BALANCE SHEETS

December 31, 2019

December 31, 2018

Current assets

Accounts receivable

Due from related party

Prepaid expense and other current assets

Total current assets

Fixed assets, net of accumulated depreciation of $0 and $327,432, respectively

Intangible and other assets:

Patents and trademarks, net of accumulated amortization of $533,415 and $493,918, respectively

LIABILITIES AND STOCKHOLDERS' DEFICIT

expense and other current assets

current assets

and trademarks, net of accumulated amortization of $111,596 and $533,415, respectively

LIABILITIES AND STOCKHOLDERS'

Current liabilities

Accounts payable and accrued liabilities

Accounts payable related party

Accrued interest payable

Loans from related party

Loans payable

Convertible notes payable, net of unamortized debt discount of $254,450 and $78, respectively

Convertible notes payable related party, net of unamortized discount of $3,060,970 and $765,825 respectively

Total current liabilities

payable and accrued liabilities

payable related party

interest payable

from related party

notes payable, current portion

current liabilities

notes payable related party, net of unamortized discount of $2,603,581 and $3,060,970 respectively

notes payable, net of unamortized debt discount of $216,289 and $254,450, respectively, less current potion

Total liabilities

Commitments and Contingencies (Note 14)

and contingencies( Note 6)

Stockholders' deficit

Common stock;

$0.001 par value;

200,000,000 shares authorized;

4,471,746 and 2,896,689 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively

4,539,843 and 4,471,746 shares issued and outstanding at December

31, 2020 and 2019, respectively

Shares payable

Additional paid-in capital

Accumulated deficit

paid-in capital

(34,700,408 )

Total stockholders' deficit

Total liabilities and stockholders' deficit

stockholders' deficit

liabilities and stockholders' deficit

Accompanying Notes to Consolidated Financial Statements.

SKINVISIBLE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

STATEMENTS OF OPERATIONS

Revenues, related party

Cost of revenues

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on sale of fixed assets, related party

on sale of Ovation Science Inc.

on equity method investment

(loss) on extinguishment of debt

on extinguishment of debt

other income (expense)

income (loss)

loss before tax provision

$ (1,447,612 )

income (loss) per common share

diluted income (loss) per common share

$ (1,702,131)

loss per common share

diluted loss per common share

Basic weighted

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Accompanying Notes to Consolidated Financial Statements.

SKINVISIBLE, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

STATEMENT OF STOCKHOLDERS' DEFICIT

Paid-in Capital

Stockholders' Deficit

Total Stockholders'

December 31, 2018

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$ (4,719,415)

Shares issued

for accounts payable

Shares issued

for settlement of debts

Shares to be issued for settlement of debt

Discount on convertible

Debt modification

Issuance of shares payable

December 31, 2019

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$ (3,007,167)

Settlement of debt

Discount on convertible

Debt modification

Issuance of shares payable

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$ (34,700,408 )

$ (4,454,779)

Accompanying Notes to Consolidated Financial Statements.

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Cash flows from operating

Income (loss)

$ (1,447,612 )

to reconcile net income (loss) to net cash

$ (1,702,131)

to reconcile net income (loss) to net

provided (used) by operating activities:

and amortization

on sale of Ovation Science Inc.

of debt discount

on equity method investment

interest on Ovation Science loan

loss on extinguishment of debt

on extinguishment of debt

on sale of fixed assets, related party

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in due from related party

in promissory note from Ovation Science Inc.

in accrued interest

cash provided (used) by operating activities

cash provided by (used in) operating activities

Cash flows from investing

from sale of fixed assets

of intangible assets

cash used in investing activities

of fixed and intangible assets

cash (used in) provided by investing activities

Cash flows from financing

from related party loans, net of payments

on notes payable

cash provided by (used in) financing activities

from related party loans

on related party loans

cash provided by financing activities

Net change in cash

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investing and financing activities:

conversion feature on convertible debts

conversion feature on convertible debt

stock issued on extinguishment of debts

stock payable on extinguishment of debts

issued to settle shares payable

Accompanying Notes to Consolidated Financial Statements.

SKINVISIBLE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

OF BUSINESS AND HISTORY

Description of business –

Inc., (referred to as the “Company”) is focused on the development and manufacture and sales of innovative topical,

transdermal and mucosal polymer-based delivery system technologies and formulations incorporating its patent-pending formula/process

for combining hydrophilic and hydrophobic polymer emulsions.

The technologies and formulations have broad industry applications

within the pharmaceutical, over-the-counter, personal skincare and cosmetic arenas.

Additionally, the Company’s non-dermatological

formulations, offer solutions for a broad spectrum of markets women’s health, pain management, and others.

The Company maintains

executive and sales offices in Las Vegas, Nevada.

History –

The Company was incorporated

in Nevada on March 6, 1998, under the name of Microbial Solutions, Inc.

The Company underwent a name change on February 26, 1999,

when it changed its name to Skinvisible, Inc.

The Company’s subsidiary’s name of Manloe Labs, Inc.

was also changed

to Skinvisible Pharmaceuticals, Inc.

On September 26, 2017, the Company purchased

5,750,000 shares of common stock of Ovation Science Inc.

(“Ovation”) for $32,286 which at the time of purchase the

Company represented 99.9% of the then issued and outstanding common stock.

On March 28, 2018 the Company sold its interest in Ovation

to officers of the Company for $500,000 which at the time represented a 37.80% interest in Ovation.

Skinvisible, Inc., together with its subsidiaries,

shall herein be collectively referred to as the “Company.”

of business –

Skinvisible, Inc., (referred to as the “Company”) is focused on the development, manufacture

and sales of innovative topical, transdermal and mucosal polymer-based delivery system technologies and formulations incorporating

its patent-pending formula/process for combining hydrophilic and hydrophobic polymer emulsions.

The technologies and formulations

have broad industry applications within the pharmaceutical, over-the-counter, personal skincare and cosmetic arenas.

Additionally,

the Company’s non-dermatological formulations offer solutions for a broad spectrum of markets including women’s health,

pain management, and others.

The Company maintains executive and sales offices in Las Vegas, Nevada.

The Company was incorporated in Nevada on March 6, 1998, under the name of Microbial Solutions, Inc.

The Company underwent

a name change on February 26, 1999, when it changed its name to Skinvisible, Inc.

The Company’s subsidiary’s name

of Manloe Labs, Inc.

was also changed to Skinvisible Pharmaceuticals, Inc.

Inc., together with its subsidiaries, shall herein be collectively referred to as the “Company.”

OF PRESENTATION AND GOING CONCERN

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audited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the

United States of America and with the instructions to Annual Report on Form 10-K and Article 10 of Regulation S-X..

In the opinion

of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position

and the results of operations for the period presented have been reflected herein.

concern –

United States of America.

In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary

for a fair presentation of financial position and the results of operations for the period presented have been reflected herein.

Going concern –

accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and

the satisfaction of liabilities in the normal course of business.

The Company has incurred cumulative net losses of $33,252,796

since its inception and requires capital for its contemplated operational and marketing activities to take place.

Managements plans

for the Company are to generate the necessary funding through licensing of its core products

and to seek additional debt and equity funding but the Company’s ability to generate the necessary funds through licensing

or raise additional capital through the future issuances of common stock or debt is unknown.

The obtainment of additional financing,

the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to the attainment

of profitable operations are necessary for the Company to continue operations.

These factors, among others, raises substantial

doubt about the Company’s ability to continue as a going concern.

The consolidated financial statements of the Company do

not include any adjustments that may result from the outcome of these aforementioned uncertainties.

SIGNIFICANT POLICIES

summary of significant accounting policies of Skinvisible Inc.

is presented to assist in understanding the Company’s consolidated

financial statements.

The consolidated financial statements and notes are representations of the Company’s management, who

For the year ended December 31, 2020, the Company had

a net loss of $1,447,612 The Company has also incurred cumulative net losses of $34,700,408 since its inception and requires capital

for its contemplated operational and marketing activities to take place.

These factors, among others, raises substantial doubt

about the Company’s ability to continue as a going concern within one year from the date of filing.

Managements plans for

the Company are to generate the necessary funding through licensing of its core products

and to seek additional debt and equity funding.

However, the Company’s ability to generate the necessary funds through

licensing or raise additional capital through the future issuances of common stock or debt is unknown.

The obtainment of additional

financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to

the attainment of profitable operations are necessary for the Company to continue operations.

The consolidated financial statements

of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

The Company's operations and business have

experienced disruption due to the unprecedented conditions surrounding the COVID-19 pandemic spreading throughout the United States

and elsewhere.

The spread of COVID-19 has caused a change in the availability of our staff and support services.

Due to the COVID-19

pandemic, there has been uncertainty and disruption in the global economy and financial markets.

The Company is not aware of any

specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of

its assets or liabilities as of the date of issuance of this filing.

These estimates could change in the future, as new events

occur, or additional information is obtained.

OF SIGNIFICANT POLICIES

This summary of significant accounting

policies of Skinvisible Inc.

is presented to assist in understanding the Company’s consolidated financial statements.

consolidated financial statements and notes are representations of the Company’s management, who

are responsible for their integrity and objectivity.

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The consolidated financial statements include the accounts of the Company and its subsidiary Skinvisible Pharmaceuticals Inc.

All significant intercompany balances and transactions have been eliminated.

Use of estimates –

The preparation

of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of

contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and

expenses during the reporting period.

significant intercompany balances and transactions have been eliminated.

of estimates –

The preparation of consolidated financial statements in conformity with accounting principles generally

accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts

of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements,

and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Significant estimates include estimates

used to review the Company’s, impairments and estimations of long-lived assets, allowances for uncollectible accounts, inventory

valuation, and the valuations of non-cash capital stock issuances.

The Company bases its estimates on historical experience and

on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making

judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results

may differ from these estimates under different assumptions or conditions.

Significant estimates include estimates used to review the Company’s impairments and estimations of long-lived assets, allowances

for uncollectible accounts, inventory valuation, and the valuations of non-cash capital stock issuances.

The Company bases its

estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the

results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily

apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

Cash and cash equivalents –

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maturities of three months or less to be cash equivalents.

There are $1,298 and $2,482 in cash as of December 31, 2019 and December

31, 2018 respectively.

of financial instruments –The carrying value of cash, accounts payable and accrued expenses, and debt (See Notes 8 &

Value of financial instruments –The carrying value of cash, accounts payable and accrued expenses, and debt (See Notes

6 & 8) approximate their fair values because of the short-term nature of these instruments.

Management believes the Company is not

exposed to significant interest or credit risks arising from these financial instruments.

Management believes the Company

is not exposed to significant interest or credit risks arising from these financial instruments.

The carrying amount of the Company’s

convertible debt is also stated at a fair value of $4,807,284

since the stated rate of interest approximates market rates.

Fair value is defined as the exchange price

that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market

for the asset or liability in an orderly transaction between market participants on the measurement date.

Valuation techniques

used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs.

The Company utilizes

a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable.

Level 1 Quoted prices in active markets for identical assets or liabilities.

These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets.

The Company uses Level 1 measurements to value the transactions when it issues shares, warrants, options and debt with beneficial conversion features.

Level 2 Quoted prices for similar assets and liabilities in active markets;

quoted prices included for identical or similar assets and liabilities that are not active;

and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

convertible debt is also stated at a fair value of $4,807,284 since the stated rate of interest approximates market rates.

value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in

the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on

the measurement date.

Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use

of unobservable inputs.

The Company utilizes a fair value hierarchy based on three levels of inputs, of which the first two are

considered observable and the last unobservable.

1 Quoted prices in active markets for identical assets or liabilities.

These are typically obtained from real-time quotes

for transactions in active exchange markets involving identical assets.

The Company uses Level 1 measurements to value the

transactions when it issues shares, warrants, options and debt with beneficial conversion features.

Level 2 Quoted prices

for similar assets and liabilities in active markets;

quoted prices included for identical or similar assets and liabilities

that are not active;

and model-derived valuations in which all significant inputs and significant value drivers are observable

in active markets.

These are typically obtained from readily available pricing sources for comparable instruments.

The Company did not rely on any Level 2 measurements for any of its transactions in the periods included in these financial statements.

Level 3 Unobservable inputs, where there is little or no market activity for the asset or liability.

These inputs reflect the reporting entity’s own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best information available in the circumstances.

The Company did not rely on any Level 3 measurements for any of its transactions in the periods included in these financial statements.

did not rely on any Level 2 measurements for any of its transactions in the periods included in these financial statements.

Level 3 Unobservable

inputs, where there is little or no market activity for the asset or liability.

These inputs reflect the reporting entity’s

own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best

information available in the circumstances.

The Company did not rely on any Level 3 measurements for any of its transactions

in the periods included in these financial statements.

Revenue recognition –

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(i) identify the contract with the customer;

(ii) identity the performance obligations

(ii) identify the performance obligations

in the contract;

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as the entity satisfied a performance obligation.

As of December 31, 2019 and December 31, 2018,

the Company had $10,204 and $8,459, respectively, in receivables related to royalty contracts.

The company has made an accounting policy election

to exclude from the measurement of the transaction price all taxes assessed by governmental authorities that are collected by the

company from its customers (sales and use taxes, value added taxes, some excise taxes).

sales –

Revenues from the sale of products (Invisicare®

polymers) are recognized when title to the products

are transferred to the customer and only when no further contingencies or material performance obligations are warranted, and

thereby have earned the right to receive reasonably assured payments for products sold and delivered.

sales –

We also recognize royalty revenue from licensing our patented product formulations only when earned, with

no further contingencies or material performance obligations are warranted, and thereby have earned the right to receive and retain

reasonably assured payments.

and license rights sales –

We also recognize revenue from distribution and license rights when no further contingencies

or material performance obligations are warranted, and thereby have earned the right to receive and retain reasonably assured

Company has made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by

governmental authorities that are collected by the Company from its customers (sales and use taxes, value added taxes, some excise

Accounts Receivable –

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of creditworthiness, estimates the portion, if any, of the balance that will not be collected.

As of December 31, 2019, the Company

had not recorded a reserve for doubtful accounts.

Substantially all inventory consists of packing materials and

are valued based upon first-in first-out ("FIFO") cost, not in excess of market.

The determination of whether the carrying

amount of inventory requires a write-down is based on an evaluation of inventory.

As of December 31, 2020 and 2019,

the Company had determined it was not necessary to recognize a reserve for doubtful accounts.

assets –

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indefinite lives are no longer subject to amortization, but rather an annual assessment of impairment by applying a fair-value

Under ASC 350-10, the carrying value

of assets are calculated at the lowest level for which there are identifiable cash flows.

Income taxes –

The Company accounts

for its income taxes in accordance with FASB Codification Topic ASC 740-10, “

Income Taxes ”, which requires recognition

of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement

carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards.

assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary

differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates

is recognized in income in the period that includes the enactment date.

Stock-based compensation –

Company follows the guidelines in FASB Codification Topic ASC 718-10 “

Compensation-Stock Compensation ”, which

requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors

including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated

Stock based compensation expense recognized

under ASC 718-10 for the years ended December 31, 2019 and 2018 totaled $0 and $0, respectively.

Earnings (loss) per share –

Company reports earnings (loss) per share in accordance with FASB Codification Topic ASC 260-10 “

Earnings Per Share ”,

Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average

number of common shares available.

Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except

that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential

common shares had been issued and if the additional common shares were dilutive.

Diluted earnings (loss) per share has not been

presented for the year ending December 31, 2019, since the effect of the assumed exercise of options and warrants to purchase common

shares (common stock equivalents) would have an anti-dilutive effect.

There are 25,317,929 additional shares issuable in connection

with outstanding options, warrants, stock payable and convertible debts as of December 31, 2019.

The shares issuable under each

instrument is as follows;

100,000 shares issuable for options, 72,000 shares issuable for warrants, 59,602 shares issuable for

shares payable and 25,086,327 shares issuable under convertible notes.

Recently issued accounting pronouncements

In June 2018, the FASB issued ASU 2018-07, "Compensation-Stock Compensation (Topic 718):

Improvements to Nonemployee

Share-Based Payment Accounting,"

which modifies the accounting for share-based payment awards issued to nonemployees to largely

align it with the accounting for share-based payment awards issued to employees.

ASU 2018-07 is effective for us for annual periods

beginning January 1, 2019.

The adoption of the standard had no impact on our financial position or results of operations for the

year ending December 31, 2019.

In February 2016, the FASB issued ASU 2016-02,

“Leases”

(“ASC 842”).

The guidance requires lessees to recognize almost all leases on their balance sheet

as a right-of-use asset and a lease liability.

For income statement purposes, the FASB retained a dual model, requiring leases

to be classified as either operating or finance.

Lessor accounting is similar to the current model, but updated to align with certain

changes to the lessee model and the new revenue recognition standard.

Existing sale-leaseback guidance, including guidance for

real estate, is replaced with a new model applicable to both lessees and lessors.

ASC 842 is effective for fiscal years beginning

after December 15, 2018.

We adopted ASC 842 effective January 1, 2019

using the optional transition method of recognizing a cumulative-effect adjustment to the opening balance of retained earnings

on January 1, 2019.

Therefore, comparative financial information was not adjusted and continues to be reported under the prior

lease accounting guidance in ASC 840.

We elected the transition relief package of practical expedients, and as a result, we did

not assess 1) whether existing or expired contracts contain embedded leases, 2) lease classification for any existing or expired

leases, and 3) whether lease origination costs qualified as initial direct costs.

We elected the short-term lease practical expedient

by establishing an accounting policy to exclude leases with a term of 12 months or less.

The Company has evaluated all other recent

accounting pronouncements, and believes that none of them will have a material effect on the Company's financial position, results

of operations or cash flows.

Fixed assets consist of the following as of

December 31, 2019 and December 31, 2018:

December 31, 2019

December 31, 2018

Machinery and equipment

Furniture and fixtures

Computers, equipment and software

Leasehold improvements

Lab equipment

accumulated depreciation

Fixed assets, net of accumulated depreciation

Depreciation expense for the years ended December

31, 2019 and 2018 was $118 and $241, respectively.

During the year ended December 31, 2019, the

Company sold furniture, fixtures and lab equipment to Ovation Science, a related party, for $75,000, the assets had been fully

depreciated by the Company in prior years and the Company recorded a gain from related party of $75,000 as a result of the sale.

All other fixed assets were disposed of prior to December 31, 2019

Inventory consists of the following as of December 31,

2019 and December 31, 2018:

Under ASC 350-10, the carrying value of assets are calculated at the lowest level for which there are identifiable

taxes –

The Company accounts for its income taxes in accordance with FASB Codification Topic ASC 740-10, “

Taxes ”, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to

differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases

and tax credit carry-forwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable

income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets

and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

compensation –

The Company follows the guidelines in FASB Codification Topic ASC 718-10 “

Compensation-Stock

Compensation ”, which requires the measurement and recognition of compensation expense for all share-based payment awards

made to employees and directors including employee stock options and employee stock purchases related to an Employee Stock Purchase

Plan based on the estimated fair values.

(loss) per share –

The Company reports earnings (loss) per share in accordance with FASB Codification Topic ASC 260-10

“Earnings Per Share”, Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders

by the weighted average number of common shares available.

Diluted earnings (loss) per share is computed similar to basic earnings

(loss) per share except that the denominator is increased to include the number of additional common shares that would have been

outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

Diluted earnings

(loss) per share has not been presented for the year ending December 31, 2020 since the effect of the assumed exercise of options

and warrants to purchase common shares (common stock equivalents) would have an anti-dilutive effect.

There are 30,779,400 additional

shares issuable in connection with outstanding options, warrants, stock payable and convertible debts as of December 31, 2020.

The shares issuable under each instrument is as follows;

100,000 shares issuable for options, 60,000 shares issuable for warrants,

30,619,400 shares issuable under convertible notes.

There were 25,317,929 additional shares issuable in connection with outstanding

options, warrants, stock payable and convertible debts as of December 31, 2019.

The shares which were issuable at that date under

each instrument were as follows;

100,000 shares issuable for options, 72,000 shares issuable for warrants, 59,602 shares issuable

for shares payable and 25,086,327 shares issuable under convertible notes.

issued accounting pronouncements –

The Company has evaluated all other recent accounting pronouncements and believes

that none of them will have a material effect on the Company's financial position, results of operations or cash flows.

RELATED PARTY TRANSACTIONS

the year ended December 31, 2020, $26,900 was advanced by an officer and $21,300 was repaid to another officer.

of December 31, 2020, $52,499 in advances remained due to officers of the company.

All other related party notes have been extinguished

or re-negotiated as convertible notes.

(See note 9 for additional details.)

Agreement with Ovation Science for DermSafe hand sanitizer - On February 3, 2020, we entered into a License Agreement

with Ovation Science Inc., a related party, pursuant to which Skinvisible granted to Ovation Science Inc.

a license for the manufacture

and distribution rights to its hand sanitizer product, DermSafe.

In exchange for the license, Ovation Science Inc.

agreed to pay

to Skinvisible a percentage on all net sales on the licensed products subject to adjustment in certain situations plus

a license fee payable in year 3 of the agreement if it chooses to continue the license.

June 10, 2020, Ovation Science Inc.

the Company the fee otherwise due in year 3 and in exchange the Company extended the term of Ovation’s license to 6-years

and granted Ovation additional rights to its hand sanitizer products and assigned Canadian Identification Numbers 02310589 and

02355558, all DermSafe Trademarks, DermSafe clinical data and the right to patent DermSafe where not currently patented.

for these rights Ovation paid a $100,000 license fee.

The Company completed the required assignments during the year ending December

31, 2020 and recognized $100,000 in revenue.

Company earned $15,860 in royalties under the license agreement during the year ending December 31, 2020.

Company sold polymer products to Ovation Science Inc and earned $7,132 and 0 as of December 31, 2020 and 2019, respectively.

Notes Related Party

Convertible Notes Payable Related Party consists of the following:

December 31, 2020

December 31, 201 9

Shipping and Packing materials

Finished Goods

Raw Materials

The Company wrote off $10,265 in inventory during the

year ending December 31, 2019.

On June 30, 2019, the Company renegotiated accrued salaries, accrued interest, unpaid reimbursements, cash advances, and outstanding convertible notes for its two officers.

Under the terms of the agreements, all outstanding notes totaling $2,464,480, accrued interest of $966,203, accrued salaries of $617,915, accrued vacation of $64,423, unpaid reimbursements of $11,942 and cash advances of $110,245 were converted to promissory notes convertible into common stock with a warrant feature.

The convertible promissory notes are unsecured, due five years from issuance, and bear an interest rate of 10%.

At the investor’s option until the repayment date, the note may be converted to shares of the Company’s common stock at a fixed price of $0.20 per share along with warrants to purchase one share for every two shares issued at the exercise price of $0.30 per share for three years after the conversion date.

The Company has determined the value associated with the beneficial conversion feature in connection with the notes to be $3,369,244.

The aggregate beneficial conversion feature associated with these notes has been accreted and charged to interest expenses as a financing expense in the amount of $613,200 during the year ended December 31, 2020 and $308,274 for the year ended December 31, 2019.

Unamortized debt discount

Total, net of unamortized discount

expense for the years ended December 31, 2020 and 2019 was $0 and $119, respectively.

the year ended December 31, 2019, the Company sold furniture, fixtures and lab equipment to Ovation Science, a related party,

for $75,000, the assets had been fully depreciated by the Company in prior years and the Company recorded a gain from related

party of $75,000 as a result of the sale.

AND OTHER ASSETS

Patents and trademarks and other intangible

assets are capitalized at their historical cost and are amortized over their estimated useful lives.

As of December 31, 2019, intangible

assets total $698,800, net of $533,415 of accumulated amortization.

As of December 31, 2018, intangible assets total $672,685,

net of $493,918 of accumulated amortization.

The Company capitalized $25,190 in patent cost during the

year ended December 31, 2019.

Amortization expense for the years ended December 31, 2019

and 2018 was $39,497 and $38,731, respectively.

License and distributor rights were acquired by the Company

in January 1999 and provide exclusive use distribution of polymers and polymer based products.

The Company has a non-expiring term

on the license and distribution rights.

Accordingly, the Company annually assesses this license and distribution rights for impairment

and has determined that no impairment write-down is considered necessary as of December 31, 2019.

STOCK OPTIONS

The following is a summary of option activity during the

nine months ended December 31, 2019.

Number of Shares

Weighted Average Exercise Price

Balance, December 31, 2018

Options granted and assumed

Options expired

Options canceled

Options exercised

Balance, December 31, 2019

As of December 31, 2019, all stock options outstanding

are exercisable.

Stock warrants -

The following is a summary of warrants activity

during the year ended December 31, 2018.

Number of Shares

Weighted Average Exercise Price

Balance, December 31, 2018

Warrants granted and assumed

Warrants expired

Warrants canceled

Warrants exercised

Balance, December 31, 2019

All warrants outstanding as of December 31,

2019 are exercisable.

NOTES PAYABLE

Secured debt offering

During the period from May 22, 2013 and September 30, 2015,

the Company entered into sixty-four 9% notes payable to investors and received total proceeds of $2,326,000.

The notes were due

two years from the anniversary date of execution.

The notes have not been paid as of maturity date and are in default.

are secured by the US Patent rights granted for the Company's Sunscreen Products:

and other intangible assets are capitalized at their historical cost and are amortized over their estimated useful

As of December 31, 2020 intangible assets total $261,726, net of $111,596 of accumulated amortization.

As of December 31,

2019, intangible assets total $698,800, net of $533,415 of accumulated amortization.

Company capitalized $16,767 in patent cost during the year ended December 31, 2020.

expense for the years ended December 31, 2020 and 2019 was $34,056 and $39,497, respectively.

License and distributor rights were

acquired by the Company in January 1999 and provide exclusive use distribution of polymers and polymer based products.

has a non-expiring term on the license and distribution rights.

Accordingly, the Company annually assesses this license and distribution

rights for impairment and has determined that no impairment write-down is considered necessary as of December 31, 2020.

debt offering

the period from May 22, 2013 and December 31, 2018, the Company entered into a 9% notes payable to nineteen investors and received

proceeds of $552,000.

The notes were due two years from the anniversary date of execution.

The Notes are secured by the US Patent

rights granted for the Company's Sunscreen Products:

US patent number #8,128,913:

"Sunscreen

Composition with Enhanced UV-A Absorber Stability and Methods.”

During the year ending December 31, 2018 the Company made

principal payments of $5,000 and executed agreements with 41 noteholders that participated in the Company’s debt offerings.

In accordance with the agreements the Company and the investors agreed to settle a total of $1,663,875 in outstanding principal

and $385,563 in accrued interest in exchange for the issuance of 1,024,719 shares of the Company’s common stock.

fair valued the shares issuable on the date each investors signed their respective agreement.

As a result of the transaction the

Company recorded stock payable of $874,294 and a gain on settlement of debt of $1,175,145.

As of December 31, 2019 the Company

had issued 982,660 shares and had 42,059 shares remaining to be issued to the investors as a result of the transaction and has

a remaining stock payable of $52,574.

During the year ending December 31, 2019, the Company executed

agreements with an additional noteholder that participated in the Company’s debt offerings.

In accordance with the agreement

the Company and the investor agreed to settle a total of $42,000 in outstanding principal and $13,574 in accrued interest in exchange

for the issuance of 26,038 shares of the Company’s common stock.

The Company fair valued the shares issuable on the date

the investor signed their agreement and recorded a gain of $48,546 as a result of the settlement.

As of the December 31, 2019 the Company had not yet issued

the shares and as a result of the transaction recorded a stock payable of $7,028.

Unsecured debt offering

On January 27, 2016, the Company entered into a 12% unsecured

note payable to an investor and received total proceeds of $33,000.

The note was due on May 30, 2016.

The note was paid in full

on September 20, 2019.

As of December 31, 2019, $552,000 of the outstanding notes

payable are past due and in default and have been classified as current notes payable.

RELATED PARTY

During the year ended December 31, 2019, $117,144 was advanced

by an officer.

As of December 31, 2019, $46,899 in advances remained due

to officers of the company.

All other related party notes have been extinguished or re-negotiated as convertible notes.

11 for additional details.)

During the year ended December 31, 2019, the Company sold

its polymer laboratory facility furniture, fixtures and equipment to Ovation Science for $75,000, the assets had been fully depreciated

by the Company in prior years and the Company recorded a gain from related party of $75,000 as a result of the sale.

approved by the board of directors and Mr.

Howlett abstained from voting due to his relationship with Ovation Science.

Ovation Science Inc.

subleased office space from the Company

from February 2019 through July 2019..

During the year ended December 31, 2019 Ovation Science Inc.

paid the Company $15,400 in

CONVERTIBLE NOTES PAYABLE

"Sunscreen Composition with Enhanced UV-A

Absorber Stability and Methods.”

of December 31, 2020, $552,000 of the outstanding notes payable are past due and in default and have been classified as current

notes payable.

NOTES PAYABLE

Convertible Notes Payable consists of the following:

$40,000 face value 9% secured notes payable to investors, due in 2015.

At the investor’s option until the repayment date, the note

and related interest may be converted to shares of the Company’s common stock a discount of 90% of the current share price

after the first anniversary of the note.

The notes are secured by the accounts receivable of a license agreement the Company has

with Womens Choice Pharmaceuticals, LLC on its proprietary prescription product, ProCort®.

The notes have reach maturity and

are now in default, under the notes default provisions the entire balance is now due upon demand.

During the year

ending December 31, 2018, the Company executed agreements with 14 of the noteholders that participated in the Company’s

convertible debt offering.

In accordance with the agreements the Company and the ivestors agreed to settle a total of $960,000

in outstanding principal and $219,172 in accrued interest in exchange for the issuance of 589,586 shares of the Company’s

common stock.

The company treated the loan modification as a debt repurchase.

At the investor’s option until the repayment date, the note and related interest may be converted to shares of the Company’s common stock a discount of 90% of the current share price after the first anniversary of the note.

The notes are secured by the accounts receivable of a license agreement the Company has with Womens Choice Pharmaceuticals, LLC on its proprietary prescription product, ProCort®.

The notes have reached maturity and are now in default, under the notes default provisions the entire balance is now due upon demand.

Original issue discount

24 unchanged sentences

The note has reached maturity and is in default.

The Company has determined the value associated with the beneficial conversion feature in connection with the notes negotiated on January 27, 2017 to be $2,138.

The aggregate beneficial conversion feature has been accreted and charged to interest expenses as a financing expense in the amount of $78 during the year ended ended December 31, 2019.

The beneficial conversion feature is valued under the intrinsic value method

Unamortized debt discount

2 unchanged sentences

Under the terms of the agreements, all outstanding notes totaling $224,064, accrued interest of $119,278, accrued salaries of $7,260 and accrued vacation of $1,473 were converted to a promissory note convertible into common stock with a warrant feature.

The promissory note is unsecured, due five years from issuance, and bears an interest rate of 10%.

The convertible promissory note is unsecured, due five years from issuance, and bears an interest rate of 10%.

At the noteholder’s option until the repayment date, the note may be converted to shares of the Company’s common stock at a fixed price of $0.20 per share along with warrants to purchase one share for every two shares issued at the exercise price of $0.30 per share for three years after the conversion date.

The Company has determined the value associated with the beneficial conversion feature in connection with the notes to be $280,076.

The aggregate beneficial conversion feature will be accreted and charged to interest expenses as a financing expense.

The beneficial conversion feature is valued under the intrinsic value method.

Unamortized debt discount

Total, net of unamortized discount

NOTES PAYABLE RELATED PARTY

Convertible Notes Payable Related Party consists of the following:

December 31, 2019

December 31, 2018

Between December 30, 2012 and July 1, 2017, the Company re-negotiated accrued salaries and interest for its officers and several former employees.

As of December 31, 2018, there were $2,688,544 face value unsecured promissory notes are unsecured, due five years from issuance, bearing an interest rate of 10%.

At the investor’s option until the repayment date, the notes were convertible to shares of the Company’s common stock at fixed prices between $0.50 and $2.00 per share along with warrants to purchase one share for every two shares issued at the exercise prices between $1.00 and $3.00 per share for three years after the conversion date.

The aggregate beneficial conversion feature associated with these notes has been accreted and charged to interest expenses as a financing expense in the amount of $227,314 during the year ended December 31, 2019.

On June 30, 2019 all of the convertible notes payable were settled through the issuance of new convertible debts as described below and in Note 9.

Unamortized debt discount

Total, net of unamortized discount

On June 30, 2019, the Company renegotiated accrued salaries, accrued interest, unpaid reimbursements, cash advances, and outstanding convertible notes for its two officers.

The promissory notes are unsecured, due five years from issuance, and bear an interest rate of 10%.

The Company has determined the value associated with the beneficial conversion feature in connection with the notes to be $3,369,244.

The aggregate beneficial conversion feature associated with these notes has been accreted and charged to interest expenses as a financing expense in the amount of $308,274 during the year ended December 31, 2019.

The Company treated the loan settlement as a debt extinguishment per ASC 470 and recorded a corresponding loss on settlement of debt of $241,969.

The Company has determined the value associated with the beneficial conversion feature in connection with the notes to be $280,076 as valued under the intrinsic value method.

The aggregate beneficial conversion feature has been accreted and charged to interest expenses in the amount of $50,974 and $25,626 for the years ended December 31, 2020 and 2019, respectively.

Unamortized debt discount

Total, net of unamortized discount

STOCKHOLDERS’

The Company is authorized to issue 200,000,000

shares of $0.001 par value common stock.

The Company had 4,471,746 and 2,896,689 issued and outstanding shares of common stock

as of December 31, 2019 and December 31, 2018, respectively.

During the year

ending December 31, 2018, the Company executed agreements with 45 noteholders that participated in the Company’s debt offerings

between May 22, 2013 and December 31, 2015.

In accordance with the agreements the Company and the investors agreed to settle a

total of $2,623,875 in outstanding principal and $604,736 in accrued interest in exchange for the issuance of 1,614,305 shares

fair valued at $2,053,466.

The Company fair valued the shares issuable on the date each investor signed their respective agreement.

During the year

ending December 31, 2019, the Company executed agreements with an additional noteholder that participated in the Company’s

debt offerings between May 22, 2013 and September 30, 2015.

In accordance with the agreement the Company and the investor agreed

to settle a total of $42,000 in outstanding principal and $13,574 in accrued interest in exchange for the issuance of 26,038 shares

of the Company’s common stock fair valued at $7,028.

The Company fair valued the shares issuable on

the date the investor signed their agreement and recorded a gain of $48,546 as a result of the settlement.

As of December 31, 2019 the Company had issued

1,575,057 shares and had 68,097 shares remaining to be issued to the investors as a result of the settlement agreements and has

a remaining stock payable of $59,602.

The Company provides for income

taxes under FASB ASC 740, Accounting for Income Taxes.

FASB ASC 740 requires the use of an asset and liability approach in

accounting for income taxes.

Deferred tax assets and liabilities are recorded based on the differences between the financial statement

and tax bases of assets and liabilities and the tax rates in effect currently.

FASB ASC 740 requires the reduction

of deferred tax assets by a valuation allowance, if, based on the weight of available evidence, it is more likely than not that

some or all of the deferred tax assets will not be realized.

In the Company’s opinion, it is uncertain whether they will

generate sufficient taxable income in the future to fully utilize the net deferred tax asset.

Accordingly, a valuation allowance

equal to the deferred tax asset has been recorded.

The total deferred tax asset is approximately $2.8 million as of December 31,

2019 which is calculated by multiplying a 21% estimated tax rate by the cumulative net operating loss (NOL) of approximately $13.2

Due to the enactment of the Tax

Reform Act of 2017, we have calculated our deferred tax assets using an estimated corporate tax rate of 21%.

US Tax codes and

laws may be subject to further reform or adjustment which may have a material impact to the Company’s deferred tax assets

and liabilities.

The Company will recognize

interest and penalties related to uncertain tax positions as a component of income tax expense.

As of December 31, 2019, the

Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the

Company’s statement of operations.

The significant components of the

Company's deferred tax assets and liabilities as of December 31, 2019 and 2018 are as follows:

Total Convertible Notes

Current portion:

Total long-term convertible notes

COMMITMENTS AND CONTINGENCIES

October 17, 2019, Skinvisible entered an Exclusive License Agreement with Quoin pursuant to which Skinvisible granted to Quoin

a license to certain patents for the development of products for commercial sale.

In exchange for the license, Quoin agreed to

pay to Skinvisible a license fee of $1,000,000 and a royalty percentage on all net sales on the licensed products subject to adjustment

in certain situations.

The agreement also requires that Quoin make certain milestone payments to Skinvisible upon achieving regulatory

approval milestones for certain drug products.

agreement is subject to termination, if among other things, 50% of the license fee is not paid by December 31, 2019 and if the

full License Fee is not paid by March 31, 2020.

No payments were made by Quoin and the agreement was terminated on December 31,

Both Parties subsequently determined that they continue to see the value in a partnership and therefore on May 8, 2020 and

again on July 31, 2020 the companies agreed to extend the Exclusive License Agreement, as amended under the same terms to expire

on September 30, 2020 and

on January 27, 2021 the companies agreed to revise the milestone payments due under the agreement and to extend the agreement indefinitely

(See note 13).

As of December 31, 2020 the Company has received $125,000 in licensing fee income per this agreement.

Company provides for income taxes under FASB ASC 740, Accounting for Income Taxes.

FASB ASC 740 requires the use of an asset

and liability approach in accounting for income taxes.

Deferred tax assets and liabilities are recorded based on the differences

between the financial statement and tax bases of assets and liabilities and the tax rates in effect currently.

ASC 740 requires the reduction of deferred tax assets by a valuation allowance, if, based on the weight of available evidence,

it is more likely than not that some or all of the deferred tax assets will not be realized.

In the Company’s opinion, it

is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset.

a valuation allowance equal to the deferred tax asset has been recorded.

The total deferred tax asset is approximately $3.0 million

as of December 31, 2020 which is calculated by multiplying a 21% estimated tax rate by the cumulative net operating loss (NOL)

of approximately $14.6 million.

to the enactment of the Tax Reform Act of 2017, we have calculated our deferred tax assets using an estimated corporate tax rate

US Tax codes and laws may be subject to further reform or adjustment which may have a material impact to the Company’s

deferred tax assets and liabilities.

Company will recognize interest and penalties related to uncertain tax positions as a component of income tax expense.

As of December

31, 2020, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized

in the Company’s statement of operations.

significant components of the Company's deferred tax assets and liabilities as of December 31, 2020 and 2019 are as follows:

As of December 31,

Cumulative tax net operating losses (in millions)

3 unchanged sentences

Income tax expense

December 31, 2019, and 2018, the Company had gross federal net operating loss carryforwards of approximately $13.2 million and

of December 31, 2020, and 2019, the Company had gross federal net operating loss carryforwards of approximately $14.6 million and

$13.2 million, respectively.

plans to file its U.S.

Company plans to file its U.S.

federal return for the year ended December 31, 2020 upon the issuance of this filing.

Upon filing of the

tax return for the year ended December 31, 2019 the actual deferred tax asset and associated valuation allowance available to

the Company may differ from management’s estimates.

The tax years 2016-2018 remained open to examination for federal income

tax purposes by the major tax jurisdictions to which the Company is subject.

No tax returns are currently under examination by

any tax authorities.

AND CONTINGENCIES

Lease obligations –

has satisfied all lease obligations and has no future lease obligations.

Rental expense, resulting from operating lease

agreements, approximated $29,810 and $54,688 for the years ended December 31, 2019 and 2018, respectively.

Due to the COVID-19 pandemic, there has been

uncertainty and disruption in the global economy and financial markets.

The Company is not aware of any specific event or circumstance

that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as

of the date of issuance of this Annual Report on Form 10-K.

These estimates could change in the future, as new events occur, or

additional information is obtained.

As previously reported, on or about March 26,

2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Quoin Pharmaceuticals,

Inc., a Delaware corporation (“Quoin”), and Quoin Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary

of Parent (“Merger Sub”).

The Merger Agreement provided that, subject

to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into Quoin (the “Merger”),

with Quoin surviving the Merger as a wholly-owned subsidiary of Skinvisible.

On October 17, 2019, Skinvisible entered into

a Termination and Release Agreement with Quoin to terminate the Merger Agreement and the aforementioned ancillary agreements and

to release each other from liability..

The parties decided to be responsible for their own costs and the Termination Agreement

specifically voids any break-up fee.

On October 17, 2019, Skinvisible entered a

Exclusive License Agreement with Quoin pursuant to which Skinvisible granted to Quoin a license to certain patents for the development

of products for commercial sale.

In exchange for the license, Quoin agreed to pay to Skinvisible a license fee of $1,000,000 and

a single digit royalty interest of all net sales on the licensed products subject to adjustment in certain situations.

The agreement

also requires that Quoin make certain milestone payments to Skinvisible upon achieving regulatory approval milestones for certain

drug products.

The agreement terminated, if among other things, 50% of the license

fee is not paid by December 31, 2019 and if the full License Fee is not paid by March 31, 2020.

No payments were made by Quoin

and the agreement was terminated.

Both Parties subsequently determined that they continue to see the value in a partnership and

therefore on May 8, 2020 the companies agreed to extend the Exclusive License Agreement under the same terms to expire now on July

Agreement with Ovation Science for DermSafe hand

On February 3, 2020, we entered into a License

Agreement with Ovation Science Inc., a related party, pursuant to which Skinvisible granted to Ovation Science Inc.

a license for

the manufacture and distribution rights to its hand sanitizer product, DermSafe.

In exchange for the license, Ovation Science Inc.

agreed to pay to Skinvisible a single digit royalty interest on all net sales on the licensed products subject to adjustment in

certain situations plus a license fee payable in year

3 of the agreement if it chooses to continue the license.

of the tax return for the year ended December 31, 2019 the actual deferred tax asset and associated valuation allowance available

to the Company may differ from management’s estimates.

The tax years 2017-2019 remained open to examination for federal

income tax purposes by the major tax jurisdictions to which the Company is subject.

No tax returns are currently under examination

by any tax authorities.

OPTIONS AND WARRANTS

following is a summary of option activity during the years ended December 31, 2019 and 2020.

Number of Shares

Weighted Average Exercise Price

Balance, December 31, 2018

Options granted and assumed

Options expired

Options canceled

Options exercised

Balance, December 31, 2019

Options granted

Options expired

Options canceled

Options exercised

Balance, December

of December 31, 2020, all stock options outstanding are exercisable.

following is a summary of warrants activity during the years ended December 31, 2019 and 2020.

Number of Shares

Average Exercise Price

December 31, 2018

granted and assumed

December 31, 2019

granted and assumed

December 31, 2020

of December 31, 2020 , all stock warrants outstanding are exercisable.

STOCKHOLDERS’

Company is authorized to issue 200,000,000 shares of $0.001 par value common stock.

The Company had 4,539,843 and 4,471,746 issued

and outstanding shares of common stock as of December 31, 2020 and December 31, 2019, respectively.

the year ended December 31, 2020, the Company issued 68,097 shares valued at $59,602 to investors in settlement of outstanding

stock payable.

On January 27, 2021 the Company and Quoin agreed to revise the milestone

payments due under the Exclusive License Agreement to the following:

(i) Successful completion

of Phase 2 testing:

(ii) Successful completion

of Phase 3 testing:

(iii) Regulatory approval

(iv) Regulatory approval

In addition as part the amendment the Companies

also agreed to extend the agreement indefinitely.

Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data