What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-08-10 · 77 added, 75 removed, 172 unchanged (47% of the section changed)

75 unchanged sentences

We generate revenue by:

We develop topical prescription

and over-the-counter products enhanced with Invisicare to license to pharmaceutical and consumer goods companies around the world for

an upfront fee and ongoing royalties;

We develop topical prescription and over-the-counter products enhanced with Invisicare to

license to pharmaceutical and consumer goods companies around the world for an upfront fee and ongoing royalties;

CO-DEVELOPMENT:

We assist pharmaceutical

clients in the early development of the most optimal formulation, which they then take forward into clinical testing;

We assist pharmaceutical clients in the early development of the most optimal formulation, which they then

take forward into clinical testing;

LIFE CYCLE MANAGEMENT:

We provide cost-effective

solutions to global pharmaceutical companies by reformulating their products coming off patent with a new Invisicare patent and new product

benefits and line extensions.

Pharmaceutical companies are under a lot of pressure to develop innovative strategies to counteract the

revenue loss from their drugs coming off patent.

We provide cost-effective solutions to global pharmaceutical companies by reformulating their products

coming off patent with a new Invisicare patent and new product benefits and line extensions.

Pharmaceutical companies are under a lot

of pressure to develop innovative strategies to counteract the revenue loss from their drugs coming off patent.

License Agreement with Quoin

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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.

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

To date, Licensee has paid one million US dollars (USD $1,000,000)

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

(i) Successful

completion of Phase 2 testing:

(ii) Successful

completion of Phase 3 testing:

(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

Successful completion of Phase 2 testing:

Successful completion of Phase 3 testing:

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

On June 6, 2022 we announced that Quoin has received

FDA acceptance of its Investigational New Drug (IND) application for its licensed formulation which uses our Invisicare proprietary

drug delivery technology.

The topical formulation "QRX003" was developed to treat Nethertons Syndrome, a debilitating hereditary

disorder that affects the skin, hair and the immune system.

There currently is no cure or approved treatment for Netherton Syndrome.

With the IND approved, the clinical trial will be

underway shortly.

We look forward to assisting Quoin in their success and potential FDA approval as well as potentially bringing a treatment

to patients suffering from Nethertons Syndrome.

Quoin is responsible for obtaining all FDA and other

regulatory body approvals necessary to market the products in the US and other countries.

Upon the successful completion of various clinical

and regulatory milestones, Skinvisible is entitled to receive a milestone payment of $5 million and ongoing royalties from sales.

Results of Operations for the Three and Nine Months Ended September

30, 2022 and 2021

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.

and license fees (product development fees), was $9,316 for the three months ended September 30, 2022, a decrease from $111,421 for the

same period ended September 30, 2021.

Our revenue was $274,296 for the nine months ended September 30, 2022, a decrease from $410,571

for the same period ended September 30, 2021.

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

2 unchanged sentences

for the rest of 2022.

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.

We had $3,300 and $4,808 in cost of revenues for the three and nine months

ended September 30, 2022, compared with no cost of revenues for the three months ended September 30, 2021 and $3,300 in cost of revenues

for the nine months ended September 30, 2021, so our gross profit was $6,016 and $269,488 for the three and nine months ended September

30, 2022, respectively, as compared with gross profit of $111,421 and $407,271 for the three and nine months ended September 30, 2021,

respectively.

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

1 unchanged sentence

Operating Expenses

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.

Operating expenses increased to $133,183 for the three months

ended September 30, 2022 from $119,274 for the same period ended September 30, 2021.

Operating expenses increased to $390,204 for the

nine months ended September 30, 2022 from $366,731 for the same period ended September 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

Our selling, general and administrative expenses for the nine months

ended September 30, 2022 consisted mainly of accrued salaries and wages of $245,827 and audit and accounting of $46,528.

In comparison,

our selling, general and administrative expenses for the nine months ended September 30, 2021 consisted mainly of accrued salaries and

wages of $243,826, audit and accounting of $43,102.

Other Expenses

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 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.

We had other expenses of $290,901 for the three months ended September

30, 2022, as compared with other expenses of $195,499 for the three months ended September 30, 2021.

We had other expenses of $703,594

for the nine months ended September 30, 2022, as compared with other expenses of $947,911 for the nine months ended September 30, 2021.

Our other expenses for the nine months ended September

30, 2022 consisted mainly of interest expense, netted against a gain on settlement of debt and gain on derivative liability changes.

other expenses for the nine months ended September 30, 2021 consisted mainly of interest expense and a loss on the changes in derivative

liability, offset by a gain on the settlement of debt.

We recorded a net loss of $418,068 for the three months ended September

30, 2022, as compared with a net loss of $203,352 for the three months ended September 30, 2021.

We recorded a net loss of $824,310 for

the nine months ended September 30, 2022, as compared with a net loss of $907,371 for the nine months ended September 30, 2021.

Liquidity and Capital Resources

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

As of September 30, 2022, we had total current assets of $138,098 and total

assets in the amount of $279,158.

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

Our total current liabilities as of September 30, 2022 were $3,622,050.

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.

of $3,483,952 as of September 30, 2022, compared with a working capital deficit of $2,987,049 as of December 31, 2021.

Operating activities provided $90,680 in cash for the nine months ended

September 30, 2022, as compared with $220,791 provided for the nine months ended September 30, 2021.

Our positive operating cash flows

for 2022 and 2021 was largely the result of changes in operating assets and liabilities, amortization of debt discount offset mainly by

the net loss for the periods.

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

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

Cash flows used by financing activities during the nine months ended September

30, 2022 amounted to $27,299, as compared with cash used of $186,600 for the nine months ended September 30, 2021.

Our negative financing

cash flow for the nine months ended September 30, 2022 resulted from payments on related party loans.

Our negative financing cash flow

for the nine months ended September 30, 2021 resulted from the repayments of debt.

The features of the debt instruments and payables concerning our financing

23 unchanged sentences

Off Balance Sheet Arrangements

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

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

Critical Accounting Policies

25 unchanged sentences

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

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

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

Recently Issued Accounting Pronouncements

5 unchanged sentences

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