What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-03-30 compared with 2022-03-31 · 89 added, 77 removed, 71 unchanged (70% of the section changed)

36 unchanged sentences

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

and license fees (product development fees), was $663,426 for the year ended December 31, 2021, an increase from $275,566 for the same

and license fees (product development fees), was $279,296for the year ended December 31, 2022, an decrease from $663,426 for the same

period ended December 31, 2021.

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

for 2020 was mainly from license fees with Ovation.

We hope to generate more revenues from our licenses with Quoin and Ovation for the

rest of 2022.

for 2021 was mainly from license fees with Quoin and Ovation.

We hope to generate more revenues from our licenses with Quoin and Ovation

We had $4,808 in cost of revenues for the year ended December 31, 2022,

as compared with no cost of revenues for the year ended December 31, 2020, so our gross profit was $660,126, or 99% of sales for 2021

and $275,556, or 100% of sales for 2020, respectively.

We had some product sales resulting in a increased gross profit for 2021

as compared with 2020.

Our gross profit increased in 2021 due to more revenues from our licenses with Quoin and Ovation, 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.

as compared with $3,300 in cost of revenues for the year ended December 31, 2021, so our gross profit was $274,488, or 98% of sales for

2022 and $660,126, or 99% of sales for 2021.

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

with Quoin, We hope to generate more revenues from our licenses with Quoin and Ovation in2023.

Operating Expenses

1 unchanged sentence

2022 from $472,046 for the same period ended December 31, 2021.

Our operating expenses for the year ended December 31, 2021 consisted of

selling, general and administrative expenses of $454,107 and depreciation and amortization of $17,939.

In comparison, our operating expenses

for the year ended December 31, 2020 consisted mainly of selling, general and administrative expenses of $497,199 and depreciation and

amortization of $32,022.

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

and administrative expenses.

Our selling, general and administrative expenses for the year December

31, 2022 consisted mainly of accrued salaries and wages of $328,769 and audit and accounting of $53,638.

In comparison, our selling, general

and administrative expenses for the year ended December 31, 2021 consisted mainly of accrued salaries and wages of $316,769, audit and

accounting of $49,712.

Other Expenses

1 unchanged sentence

as compared with other expenses of $1,260,833 for the year ended December 31, 2021.

Our other expenses for the year ended December 31, 2021 consisted of interest

expense and a loss on the changes in derivative liability, offset by a gain on the settlement of debt.

Our other expenses for the year

ended December 31, 2020 consisted of interest expense.

Our other expenses for the year ended December 31, 2022

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

expenses for the year ended December 31, 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 $1,224,887 for the year ended December 31, 2022,

14 unchanged sentences

that may result from the outcome of these aforementioned uncertainties.

As of December 31, 2021, we had total current assets of $74,244 and total

assets in the amount of $227,299.

As of December 31, 2022, we had total current assets of $109,946

and total assets in the amount of $246,793.

Our total current liabilities as of December 31, 2022 were $3,644,986.

We had a working capital deficit

of $2,987,049 as of December 31, 2021, compared with a working capital deficit of $2,668,871 as of December 31, 2020.

Operating activities provided $374,605 in cash for the year ended December

31, 2021, as compared with $45,765 used for the year ended December 31, 2020.

Our positive operating cash flow for 2021 was largely the

result of the amortization of debt discount, loss on derivative liabilities, and an increase in accrued interest, offset mainly by our

net loss for the year.

For 2020, our net loss was the main component of our negative operating cash flow, offset mainly by an increase

in accrued interest, amortization of debt discount and an increase in accounts payable and accrued liabilities.

We used cash of $20,864 and $16,767 in investing activities for the year

ended December 31, 2021 and 2020, respectively, for the purchase of fixed and intangible assets.

We had a working capital

deficit of $3,535,040 as of December 31, 2022, compared with a working capital deficit of $2,987,049 as of December 31, 2022.

Operating activities provided $45,170 in cash for the year ended

December 31, 2022, as compared with $374,605 provided for the year ended December 31, 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 $2.530 and $20,864 in investing activities for

the years ended December 31, 2022 and 2021, respectively, for the purchase of fixed and intangible assets.

Cash flows used by financing activities during the year ended December

31, 2021 used $323,600, as compared with cash provided of $5,600 for the year ended December 31, 2020.

Our negative financing cash flow

for the year ended December 31, 2021 resulted from the repayments of debt.

Cash flows for the year ended December 31, 2020 consisted of

$26,900 in proceeds from related party debt offset by $21,300 paid on notes payable.

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.

31, 2022 amounted to $27,299, as compared with cash used of $323,600 for the year ended December 31, 2021.

Our negative financing cash

flow for the year ended December 31, 2022 resulted from payments on related party loans.

Our negative financing cash flow for the year

ended December 31, 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 addition

Off Balance Sheet Arrangements

1 unchanged sentence

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations

is based upon the accompanying financial statements, which have been prepared in accordance with the accounting principles generally accepted

in the United States of America and are expressed in United States dollars.

Preparing financial statements requires management to make

estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses.

These estimates and assumptions

are affected by management’s application of accounting policies.

We believe that understanding the basis and nature of the estimates

and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

In December 2001, the SEC requested that all registrants

list their most “critical accounting polices” in the Management Discussion and Analysis.

The SEC indicated that a “critical

accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires

management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of

matters that are inherently uncertain.

Product 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.

Royalty 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.

Distribution and license rights sales – We

also recognize revenue from distribution and license rights only when earned (and are amortized over a five-year period), with no further

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

Costs of Revenue – Cost of revenue includes

raw materials, component parts, and shipping supplies.

Shipping and handling costs is not a significant portion of the cost of revenue.

Accounts Receivable – Accounts receivable

is comprised of uncollateralized customer obligations due under normal trade terms requiring payment within 30 days from the invoice date.

The carrying amount of accounts receivable is reviewed periodically for collectability.

If management determines that collection is unlikely,

an allowance that reflects management’s best estimate of the amounts that will not be collected is recorded.

Management reviews

each accounts receivable balance that exceeds 30 days from the invoice date and, based on an assessment of creditworthiness, estimates

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

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

Recently Issued Accounting Pronouncements

In August 2020, FASB issued ASU 2020-06, Accounting for Convertible

Instruments and Contracts in an Entity;

Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to

reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information

provided to users of financial statements.

Among other changes, the new guidance removes from GAAP separation models for convertible

debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required

to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium.

As a result, after adopting the

guidance, entities will no longer separately present such embedded conversion features in equity, and will instead account for the

convertible debt wholly as debt.

The new guidance also requires use of the “if-converted” method when calculating the

dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment

under the current guidance.

The guidance is effective for financial statements issued for fiscal years

beginning after December 15, 2021, and interim periods within those

fiscal years, with early adoption permitted, but only at the beginning of the fiscal year.

The Company is

currently evaluating the impact the adoption of ASU 2020-06 will have on the Company’s financial statements.

In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments

and Contracts in an Entity;

Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to reduce costs and

complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial

Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible

debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as

a derivative or the debt is issued at a substantial premium.

As a result, after adopting the guidance, entities will no longer separately

present such embedded conversion features in equity, and will instead account for the convertible debt wholly as debt.

The new guidance

also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share,

which is consistent with the Company’s current accounting treatment under the current guidance.

The guidance is effective for financial

statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption

permitted, but only at the beginning of the fiscal year.

The Company is currently evaluating the impact the adoption of ASU 2020-06 will

have on the Company’s financial statements.

Quantitative and Qualitative Disclosures About Market Risk

2 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 7. Management’s Discussion and Analysis