What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-10 compared with 2022-05-16 · 93 added, 83 removed, 154 unchanged (53% of the section changed)

106 unchanged sentences

of the license Fee as shown below.

As partial consideration

for the rights conveyed by Skinvisible under this Agreement, Licensee agrees to pay to Skinvisible a one-time, non-refundable, non-creditable

license issue fee of one million USD dollars (USO $1,000,000) (''License Fee'').

To date, Licensee has paid three hundred ninety-two

thousand five hundred US dollars (USD $392,500) of this fee as part of the First Half Payment of the License Fee.

The balance due of

the First Half Payment is one hundred seven thousand five hundred US dollars (USD $107,500) which was received on July 7.

A further payment

of two hundred and fifty thousand dollars ($250,000) is due no later than ten (10) business days after receipt by Licensee of additional

funding from Altium Capital which coincides with the approval from the SEC on Quoin’s merger with a NASDAQ listed company, which

closed in October, 2021.

We received a payment of $50,000 during the three months ended March 31, 2022.

The remaining balance of two

hundred thousand dollars ($200,000) was still outstanding as of March 31, 2022,and was received on May 10, 2022.

As partial consideration for the rights conveyed by Skinvisible

under this Agreement, Licensee agrees to pay to Skinvisible a one-time, non-refundable, non-creditable license issue fee of one million

USD dollars (USO $1,000,000) (''License Fee'').

To date, Licensee has paid three hundred ninety-two thousand five hundred US dollars (USD

$392,500) of this fee as part of the First Half Payment of the License Fee.

The balance due of the First Half Payment is one hundred seven

thousand five hundred US dollars (USD $107,500) which was received on July 7.

A further payment of two hundred and fifty thousand dollars

($250,000) is due no later than ten (10) business days after receipt by Licensee of additional funding from Altium Capital which coincides

with the approval from the SEC on Quoin’s merger with a NASDAQ listed company, which closed in October, 2021.

The remaining balance

of two hundred and fifty thousand dollars ($250,000) was received on May 10, 2022.

Additionally, the milestones in the initial agreement were changed as shown

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completion of Phase 3 testing:

(iii) Regulatory approval in either 1· the US or EU,

whichever happens first:

Results of Operations for the Three Months Ended March 31, 2022 and

Our revenue, which we combine from product sales,

royalties on patent licenses and license fees (product development fees), was $59,980 for the three months ended March 31, 2022, an increase

from $12,051 for the same period ended March 31, 2021

(iii) Regulatory

approval in either 1· the US or EU, whichever happens first:

Results of Operations for the Three and Six Months Ended June 30, 2022

Our revenue, which we combine from product sales, royalties on patent licenses

and license fees (product development fees), was $205,000 for the three months ended June 30, 2022, a decrease from $287,099 for the same

period ended June 30, 2021.

Our revenue was $264,980 for the six months ended June 30, 2022, a decrease from $299,150 for the same period

ended June 30, 2021.

The revenue for 2022 was mainly from license fees with Quoin and the revenue

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for the rest of 2022.

We had $1,508 in cost of revenues for the three months ended March 31,

2022 and $3,300 in cost of revenues for the same period ended 2021, so our gross profit was $58,472 and $8,751 for the three months ended

March 31, 2022 and 2021, respectively.

We had some cost of product in 2021 as compared with 2022 where

Our gross profit increased in 2022 due to more revenues from our license with Quoin, and we hope to generate more revenues

from our licenses with Quoin and Ovation for the rest of 2022, which do not have a cost of revenue component.

We had no cost of revenues for the three months ended June 30, 2022 and

$1,508 in cost of revenues for the six months ended June 30, 2022, compared with no cost of revenues for the three months ended June 30,

2021 and $3,300 in cost of revenues for the six months ended June 30, 2021, so our gross profit was $205,000 and $263,472 for the three

and six months ended June 30, 2022, respectively, as compared with gross profit of $287,099 and $295,850 for the three and six months

ended June 30, 2021, respectively.

Our gross profit decreased in 2022 due to less revenues from our

license with Quoin, and we hope to generate more revenues from our licenses with Quoin and Ovation for the rest of 2022.

Operating Expenses

Operating expenses increased to $138,011 for the three months ended March

31, 2022 from $119,878 for the same period ended March 31, 2021.

Our operating expenses for the three months ended

March 31, 2022 consisted primarily of accrued salaries and wages of $87,942, audit and accounting of $28,809, insurance of $6,744 and

amortization of $4,251.

Our operating expenses for the three months ended March 31, 2021 consisted mainly of accrued salaries and wages

of $87,942, audit and accounting of $13,610, and amortization of $4,251.

Operating expenses decreased to $119,010 for the three months

ended June 30, 2022 from $127,579 for the same period ended June 30, 2021.

Operating expenses increased to $257,021 for the six months

ended June 30, 2022 from $247,457 for the same period ended June 30, 2021.

Our operating expenses for all periods consisted mainly of selling, general

and administrative expenses.

Our selling, general and administrative expenses for the six months ended

June 30, 2022 consisted mainly of accrued salaries and wages of $172,885 and audit and accounting of $ 39,419.

In comparison, our selling,

general and administrative expenses for the six months ended June 30, 2021 consisted of salaries and wages of $165,845 and audit and accounting

Other Expenses

We had other expenses of $134,980 for the three months ended March 31,

2022, as compared with other expenses of $324,378 for the three months ended March 31, 2021.

Our other expenses for the three months ended March

We had other expenses of $277,713 for the three months ended June 30, 2022,

as compared with other expenses of $428,034 for the three months ended June 30, 2021.

We had other expenses of $412,693 for the six months

ended June 30, 2022, as compared with other expenses of $752,412 for the six months ended June 30, 2021.

Our other expenses for the six months ended June 30,

2022 consisted mainly of interest expense, netted against a gain on settlement of debt.

Our other expenses for the three months ended

March 31, 2021 consisted mainly of interest expense.

We recorded a net loss of $214,519 for the three months ended March 31,

2022, as compared with a net loss of $435,505 for the three months ended March 31, 2021.

Our other expenses for the six months ended

June 30, 2021 consisted mainly of interest expense and a loss on the changes in derivative liability, offset by a gain on the settlement

We recorded a net loss of $191,723 for the three months ended June

30, 2022, as compared with a net loss of $268,514 for the three months ended June 30, 2021.

We recorded a net loss of $412,693 for the

six months ended June 30, 2022, as compared with a net loss of $704,019 for the six months ended June 30, 2021.

Liquidity and Capital Resources

As of March 31, 2022, we had total current assets

of $35,126 and total assets in the amount of $183,588.

Our total current liabilities as of March 31, 2022 were $3,067,102.

We had a working

capital deficit of $2,883,514 as of March 31, 2022, compared with a working capital deficit of $3,031,976 as of December 31, 2021.

Operating activities used $40,940 in cash for the

three months ended March 31, 2022, as compared with $15,663 used for the three months ended March 31, 2021.

Our negative operating cash

flow for 2022 was largely the result of the net loss for the period.

Our negative operating cash flow for 2021 was largely the result

of our net loss for the period, offset by adjustments to amortization of debt discount and increases in accrued interest

We used cash of $0 and $450 in investing activities

for the three months ended March 31, 2022 and 2021, respectively, for the purchase of fixed and intangible assets.

Cash flows used by financing activities during the

three months ended March 31, 2022 amounted to $0, as compared with cash used of $7,616 for the three months ended March 31, 2021.

cash flow for the three months ended March 31, 2021 consisted of repayments of related party loans.

The features of the debt instruments and payables

concerning our financing activities are detailed in the footnotes to our financial statements.

Based upon our current financial condition, we do

not have sufficient cash to operate our business at the current level for the next twelve months.

We intend to fund operations through

increased sales and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements.

We plan to seek additional financing in a private equity offering to secure funding for operations.

There can be no assurance that we

will be successful in raising additional funding.

If we are not able to secure additional funding, the implementation of our business

plan will be impaired.

There can be no assurance that such additional financing will be available to us on acceptable terms or at all.

Going concern – The 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.

We have incurred cumulative net losses of $35,987,680 since our inception and require capital for our

contemplated operational and marketing activities to take place.

Our ability to raise additional capital through the future issuances

of common stock is unknown.

The obtainment of additional financing, the successful development of our contemplated plan of operations,

and our transition, ultimately, to the attainment of profitable operations are necessary for us to continue operations.

The ability to

successfully resolve these factors raise substantial doubt about our ability to continue as a going concern.

These consolidated financial

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

As of June 30, 2022, we had total current assets of $174,801 and total

assets in the amount of $320,590.

Our total current liabilities as of June 30, 2022 were $3,410,690.

We had a working capital deficit

of $3,235,889 as of June 30, 2022, compared with a working capital deficit of $2,987,049 as of December 31, 2021.

Operating activities provided $123,603 in cash for the six months ended

June 30, 2022, as compared with $171,043 provided for the six months ended June 30, 2021.

Our positive operating cash flow for 2022 was

largely the result of amortization of debt discount and changes in accounts payable and accrued liabilities and accrued interest.

positive operating cash flow for each period was largely the result of the amortization of debt discount and changes in accounts payable

and accrued liabilities and accrued interest.

We used cash of $2,005 and $20,864 in investing activities for the six

months ended June 30, 2022 and 2021, respectively, for the purchase of fixed and intangible assets.

Cash flows used by financing activities during the six months ended June

30, 2022 amounted to $27,299, as compared with cash used of $131,100 for the six months ended June 30, 2021.

Our negative financing cash

flow for the six months ended June 30, 2022 resulted from repayment of related party debt.

Our negative financing cash flow for the six

months ended June 30, 2021 resulted from the repayments of debt.

The features of the debt instruments and payables concerning our financing

activities are detailed in the footnotes to our financial statements.

Based upon our current financial condition, we do not have sufficient cash

to operate our business at the current level for the next twelve months.

We intend to fund operations through increased sales and debt

and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements.

We plan to seek additional

financing in a private equity offering to secure funding for operations.

There can be no assurance that we will be successful in raising

additional funding.

If we are not able to secure additional funding, the implementation of our business plan will be impaired.

be no assurance that such additional financing will be available to us on acceptable terms or at all.

Going concern – The 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.

We have incurred cumulative net losses of $36,179,403 since our inception and require capital for our contemplated

operational and marketing activities to take place.

Our ability to raise additional capital through the future issuances of common stock

The obtainment of additional financing, the successful development of our contemplated plan of operations, and our transition,

ultimately, to the attainment of profitable operations are necessary for us to continue operations.

The ability to successfully resolve

these factors raise substantial doubt about our ability to continue as a going concern.

These consolidated financial statements do not

include any adjustments that may result from the outcome of these aforementioned uncertainties.

Off Balance Sheet Arrangements

As of March 31, 2022, there were no off balance sheet arrangements.

As of June 30, 2022, there were no off balance sheet arrangements.

Critical Accounting Policies

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

As of March 31, 2022, we had not recorded a reserve for doubtful accounts.

As of June 30, 2022, we had not recorded a reserve for doubtful accounts.

Recently Issued Accounting Pronouncements

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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-Q

Item 2. Management’s Discussion and Analysis