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Item 1. Business

2023-03-30 compared with 2022-03-31 · 87 added, 180 removed, 90 unchanged (75% of the section changed)

Recent Developments

On October 17, 2019, we entered an Exclusive License Agreement with Quoin

Pharmaceuticals, Inc., a Delaware corporation (“Quoin”) pursuant to which we 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 us a license fee of $1,000,000

(the “License Fee”) 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 us upon achieving regulatory approval milestones

for certain drug products.

The agreement was 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.

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 under the same terms to expire

on December 31, 2020, and on January 27, 2021 the companies agreed to revise the milestone payments due under the agreement and to extend

the agreement indefinitely.

On June 14, 2021, the Company entered into an amendment to change the terms

of the license Fee as shown below.

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

The balance due of the First Half Payment is one hundred seven thousand five hundred US dollars (USD $107,500) which was received

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.

The remaining balance of two hundred and fifty thousand dollars ($250,000) was still outstanding

as of December 31, 2021 .

Additionally,

the milestones in the initial agreement were changed as shown below:

Successful completion of Phase 2 testing:

Successful completion of Phase 3 testing:

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

through our wholly owned subsidiary Skinvisible Pharmaceuticals Inc., are a pharmaceutical research and development (“R&D”)

company that has developed and patented an innovative polymer delivery system, Invisicare® and formulated over forty topical skin

products, which we out-license globally.

We were incorporated in 1998, and target an estimated $80 billion global skincare and dermatology

market and a $30 billion global over-the-counter market as well as other healthcare / medical and consumer goods markets.

the research and development complete on forty products and numerous patents issued (technology and product patents), we are ready to

monetize our investment.

Our business model will continue to be to out-license our patented prescription and over-the-counter (“OTC”)

products featuring Invisicare to established manufacturers and marketers of brands internationally and to maximize profits from the products

we have already out-licensed.

opportunity for us to license our products continues to be a viable model as the need for pharmaceutical companies to access external

R&D companies for new products due to their own down-sizing or elimination of internal R&D departments.

The demand for our products

is enhanced due to the granting of key US and international patents and the completed development of a number of unique products.

Company Overview

We, through our wholly owned subsidiary Skinvisible Pharmaceuticals Inc.,

are a pharmaceutical research and development (“R&D”) company that has developed and patented an innovative polymer delivery

system, Invisicare® and formulated over forty topical skin products, which we out-license globally.

We were incorporated in 1998,

and target an estimated $80 billion global skincare and dermatology market and a $30 billion global over-the-counter market as well as

other healthcare / medical and consumer goods markets.

With the research and development complete on forty products and numerous

patents issued (technology and product patents), we are ready to monetize our investment.

Our business model will continue to be to out-license

our patented prescription and over-the-counter (“OTC”) products featuring Invisicare to established manufacturers and marketers

of brands internationally and to maximize profits from the products we have already out-licensed.

The opportunity for us to license our products continues to be a viable

model as the need for pharmaceutical companies to access external R&D companies for new products due to their own down-sizing or elimination

of internal R&D departments.

The demand for our products is enhanced due to the granting of key US and international patents and the

completed development of a number of unique products.

Our Flagship Product

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resonate with physicians and consumers.

The dermatology market is large, with over 80% of Americans affected by

some kind of skin condition in their lifetime.

The worldwide market for dermatology products including prescription, OTC and cosmeceuticals

is estimated at $80 billion.

We formed Skinvisible Pharmaceuticals, Inc.

(“Skinvisible”),

in March 1998 and purchased the exclusive worldwide manufacturing and marketing rights for a polymer delivery system invention now called

Invisicare® from the inventor for $2 million.

We have continued to develop the Invisicare technology and subsequent product development

resulting in over seven series of Invisicare and over forty unique, patented formulations offering distinctive benefits that differentiate

them significantly from other leading products in the marketplace.

We have positioned ourselves in the $80 billion worldwide prescription

and over-the-counter dermatology and skincare market.

We have positioned ourselves in the $80 billion

worldwide prescription and over-the-counter dermatology and skincare market.

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

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

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

their drugs coming off patent.

Corporate Ownership

We are a publicly traded company under the symbol SKVI, quoted on the OTC

markets since February 1999 and currently trading on the OTCQB in the United States.

We carry on business primarily through our wholly owned subsidiaries:

Pharmaceuticals, Inc.

a Nevada corporation.

We have patents granted in 11 countries, including comprehensive patents

on Invisicare, the foundation of all of our products;

the United States, and internationally in Canada, Europe (4), China, India, Australia,

Hong Kong, and Korea.

The Invisicare patents cover manufacturing, composition and use.

Additionally, we have been granted product specific

patents in the United States for dermal barrier products, sunscreens (photostability of avobenzone), retinoids (stabilization), cationic

products and acne products.

Our value lies in our ability to continually generate new IP on dermatology

and medical products formulated with Invisicare.

Patent approvals are sought (initially in the United States.

and later internationally)

for all products developed.

All patents with Invisicare are owned by us.

When developing new products using Invisicare, we file for both patent

and trademark protection.

We have been granted trademarks in the U.S.

and Canada for the following names:

- Skinvisible® w Invisicare® w JUSTCARE® w Kintari® w Skinbrella®

Revenue generation :

We plan to achieve revenues from a combination

of four revenue streams including:

Research and development fees;

Upfront license fee;

Ongoing royalties based on product sales;

Licensees purchase Invisicare polymers from us.

The polymers make up 6-8%

of each final product formulation for OTC and cosmetic formulas and less for prescription formulas.

Strategic Growth Opportunities

Our growth strategy is to:

Generate revenue from private label products;

Capitalize on the success of current licensees;

Increase the value of our current pipeline;

Boost licensing revenues by securing additional licensees globally and develop a robust royalty revenue stream that will finance our future growth.

Private Label Products

Our sunscreen is a broad spectrum SPF 30 known as Skinbrella®.

independent testing to validate our broad spectrum sunscreen claims according to the labeling guidelines of the FDA, which are designed

to help reduce the incidents of skin cancer in the U.S.

Our claims are as follows:

Claim # 1 – Broad-Spectrum:

According to the FDA, in order for a

sunscreen to be labeled “broad spectrum” it must prove it protects against both UVA and UVB rays by having an SPF (Sun Protection

Factor) of at least 15 and a critical wave length of at least 370 nm.

Our sunscreen has surpassed both of these criteria, allowing our

broad spectrum sunscreen label to also state “prevents sunburn, skin cancer and aging due to the sun.”

Claim # 2 – Water-Resistant 80 Minutes:

The FDA sunscreen water

resistant claim requires that a sunscreen must have the same SPF after being in water or sweating for 40 or 80 minutes.

Our testing was

conducted at an independent laboratory specializing in sunscreen testing.

The test involved human subjects that applied sunscreen to their

arm, followed by the immersion of the arm into a Jacuzzi for 80 minutes (10 minutes in / 10 minutes out).

Our sunscreen successfully completed

this testing and is allowed to use “Water-resistant for 80 Minutes” on its sunscreen label, the longest length of time allowed

Claim # 3 – Unique Patented Technology / Eight-Hour Photostability:

As previously announced, we were granted a patent from the United States Patent and Trademark Office entitled “Sunscreen Composition

with Enhanced UVA Absorber Stability and Methods”, which provides protection until November 2029.

Skinvisible successfully formulated

a unique Invisicare® delivery system specifically for stabilizing avobenzone;

the key sunscreen used in the USA.

Data submitted to

the US patent office proved that our sunscreen provides a minimum of eight hours of photostability.

Additional Skinvisible Products

Sunless Tanning Products

We have developed a sunless tanning mousse / foam which uses a unique foam

with Invisicare®, developed specifically for its foaming properties.

This adds to Skinvisible’s line of sunless tanning products

which includes sunless tanning lotions (light, medium and dark), pre-sun moisturizer and after-sun moisturizer along with sunless tanning

spray products for commercial use.

The addition of a sunless tanning mousse enhances this line of products.

Sunscreen Products

We have developed 3 broad spectrum sunscreens, with SPF 15, 30 and 50 (the

highest SPF allowed by the FDA).

All are formulated with Avobenzone, the only UVA sun filter allowed under the US FDA monograph.

UVA/UVB sunscreen was granted a patent from the United States patent office in 2013.

Avobenzone is known for breaking down in the sun

after only two hours – thus the requirement to reapply every 2 hours.

Skinvisible’s patent was granted based on Invisicare's®

minimum 8 hour photo stability.

For countries outside the United States, Skinvisible has additionally patented UVA/UVB sunscreens formulated

with Tinosorb S.

Capitalize On Current Licensees:

We continue to work diligently with our licensees to ensure they have a

smooth manufacturing process, ongoing R&D support and marketing feedback.

Ovation Science Inc.

On February 3, 2020, we entered into a License Agreement

with Ovation Science Inc.

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

On October 17, 2019, we entered an Exclusive License

Agreement with Quoin Pharmaceuticals, Inc., a Delaware corporation (“Quoin”) pursuant to which we 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 us a license

fee of $1,000,000 (the “License Fee”) 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 us upon achieving regulatory

approval milestones for certain drug products.

The agreement was 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.

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

under the same terms to expire on December 31, 2020, and on January 27, 2021 the companies agreed to revise the milestone payments due

under the agreement and to extend the agreement indefinitely.

On June 14, 2021, the Company entered into an

amendment to change the terms 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 (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 below:

(i) Successful

completion of Phase 2 testing:

(ii) Successful

completion of Phase 3 testing:

(iii) Regulatory

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

On June 6, 2022 we announced

that Quoin has received U.S.

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 is underway.

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.

License Agreement with Ovation Science

On February 3, 2020, we entered into a License

Agreement with Ovation Science Inc.

pursuant to which Skinvisible granted to Ovation Science Inc.

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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.

Women’s Choice Pharmaceuticals

ProCort®, long lasting prescription hemorrhoid cream launched

in the United States August 2011.

Sales and Royalties:

Skinvisible receives a royalty based on net sales

Women’s Choice has been successfully growing their sales of ProCort®

Increasing The Value of Skinvisible’s Pipeline:

We have a pipeline of over forty products which are available for licensing.

Testing is conducted in-house generating proof of concept including release of the active ingredient as well as long term shelf life (stability).

Additional studies conducted on specific products including skin sensitivity, toxicity and product efficacy are outsourced to FDA compliant

laboratories.

These studies are critical in attracting potential licensees.

Our clinical strategy is to find a partner for our prescription

product portfolio.

This would allow for a partner to seek FDA approval using the 505b2 pathway for one or more of our products.

agreed to pay to Skinvisible a royalty

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.

On June 10, 2020, Ovation Science paid us the

fee otherwise due in year 3 and in exchange we extended the term of Ovation Science’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.

In exchange for these rights, Ovation Science paid a $100,000

We completed the required assignments during the year ending December 31, 2020 and recognized $100,000 in revenue.

Market research indicates there is reasonably limited direct competition

55 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-K

Item 1. Business