Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
As required by Rule 13a-15 under
the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures
as of the end of the period covered by this annual report, being December 31, 2022. This evaluation was carried out under the supervision
and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.
Disclosure controls and procedures
are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted
under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities
and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure
that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is accumulated
and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding
required disclosure.
Based upon that evaluation, including
our Chief Executive Officer and Chief Financial Officer, we have concluded that our disclosure controls and procedures were ineffective
as of the end of the period covered by this annual report.
Management’s Annual Report
on Internal Control over Financing Reporting
Our management is responsible for
establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange
Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2022 based
on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
As a result of this assessment, management concluded that, as of December 31, 2022, our internal control over financial reporting was
not effective. Our management identified the following material weaknesses in our internal control over financial reporting, which are
indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient
written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP
and SEC guidelines.
We plan to take steps to enhance
and improve the design of our internal control over financial reporting. During the period covered by this annual report on Form 10-K,
we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following
changes during our fiscal year ending December 31, 2023: (i) appoint additional qualified personnel to address inadequate segregation
of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting.
The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing
the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
This annual report does not include
an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s
report was not subject to attestation by our registered public accounting firm pursuant to an exemption for non-accelerated filers set
forth in Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Item 9B.
Other Information
None
Item 9C. Disclosure Regarding Foreign Jurisdictions
that Prevent Inspections.
None
20
Table of Contents
PART III
Item 10. Directors, Executive
Officers and Corporate Governance
The following information sets forth
the names, ages, and positions of our current directors and executive officers.
Name
Age
Position(s) and Office(s) Held
Terry Howlett
75
Chief Executive Officer, Chief Financial Officer, and Director
David St. James
50
Director
Set forth below is a brief description
of the background and business experience of each of our current executive officers and directors.
Mr. Terry H. Howlett , has
been our Chief Executive Officer and Director since March 5, 1998. Mr. Howlett has a diversified background in market initialization and
development, sales and venture capital financing for emerging growth companies. He has held senior management, marketing and sales positions
with various companies, including the Canadian Federation of Independent Business, Family Life Insurance, and Avacare of Canada and founded
Presley Laboratories, Inc., which marketed cosmetic and skin, care products on a direct sales basis. For the ten years prior to becoming
President of the Company, Mr. Howlett was the President and CEO of Voice-it Solutions, Inc., a publicly traded company on the Vancouver
Stock exchange that made voice response software for order entry systems.
Mr. David St. James is an
inventor and businessman based in Las Vegas, Nevada. He has invented and co-invented turbochargers and superchargers, some of which are
in use today on production vehicles and in Formula 1. He has also been involved in other various aspects of the automotive industry, including
product development, service, and repair. He has been an Officer and Director of Homeland Resources Ltd. since July of 2014 and currently
serves as the President and a Director. He has been the Vice President and a Director of Nouveau Ventures Inc. since August of 2014. Mr.
St. James served as the President of XLR Medical Corporation from January 2009 through January 2012.
Directors
Our bylaws authorize no less than
one (1) and more than twelve (12) directors. We currently have two directors.
Term of Office
Our Directors are appointed for a
one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with
our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
Significant Employees
Ms. Doreen McMorran ,
is head of Business Development. Ms. McMorran brings to the Company almost 20 years of experience in the medical and pharmaceutical industry,
specifically in the areas of strategic planning, sales and marketing. She has spent the last seven years selling to international dermatology
and skincare focused companies like Procter and Gamble, Johnson & Johnson, Stiefel, Galderma, Novartis and Graceway, to name a few.
Ms. McMorran, who holds a Bachelor of Commerce (Honors) degree, spent six years in the pharmaceutical industry with Astra Pharma. Additionally,
she has held senior management level positions with a number of healthcare companies, focusing on business development, sales, marketing
and operations.
Family Relationships
There are no family relationships
between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.
21
Table of Contents
Involvement in Certain Legal Proceedings
To the best of our knowledge, during
the past ten years, none of the following occurred with respect to a present or former director, executive officer, or employee: (1) any
bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise
limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent
jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities
or commodities law, and the judgment has not been reversed, suspended or vacated.
Audit Committee
We do not have a separately designated
standing audit committee. The entire board of directors performs the functions of an audit committee, but no written charter governs the
actions of the board of directors when performing the functions of that would generally be performed by an audit committee. The board
of directors approves the selection of our independent accountants and meets and interacts with the independent accountants to discuss
issues related to financial reporting. In addition, the board of directors reviews the scope and results of the audit with the independent
accountants, reviews with management and the independent accountants our annual operating results, considers the adequacy of our internal
accounting procedures and considers other auditing and accounting matters including fees to be paid to the independent auditor and the
performance of the independent auditor.
We do not have an audit committee
financial expert because of the size of our company and our board of directors at this time. We believe that we do not require an audit
committee financial expert at this time because we retain outside consultants who possess these attributes as needed.
For the fiscal year ending December
31, 2022, the board of directors:
1.
Reviewed and discussed the audited
financial statements with management, and
2..
Reviewed and discussed the written
disclosures and the letter from our independent auditors on the matters relating to the auditor’s independence.
Based upon the board of directors’ review and discussion of the matters above, the board of directors authorized inclusion of the audited financial statements for the year ended December 31, 2022 to be included in this Annual Report on Form 10-K and filed with the Securities and Exchange Commission.
Section
16(a) Beneficial Ownership Reporting Compliance
Section 16(a)
of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent of a registered
class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of
common stock and other equity securities of the Company. Officers, directors and greater than ten percent beneficial shareholders are
required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To the best of our knowledge based solely
on a review of Forms 3, 4, and 5 (and any amendments thereof) received by us during or with respect to the year ended December 31, 2022,
all filings were timely made.
Code of
Ethics
We adopted a Code of Ethics for Financial
Executives, which include our principal executive officer, principal financial officer, principal accounting officer or controller, or
persons performing similar functions. The Code of Ethics was filed as an exhibit to the annual report on Form 10KSB for the fiscal year
ended December 31, 2004 and filed with the SEC on April 14, 2005.
22
Table of Contents
Item
11. Executive Compensation
Compensation Discussion and Analysis
Currently, the objective of the cash
compensation paid by the company is to provide fair reimbursement for the time spent by our executive officer and independent directors
to the extent feasible within the financial constraints faced by our developing business. The stock options granted to our executive officer
and to our independent directors are intended to provide these individuals with incentives to pursue the growth and development of the
company’s operations and business opportunities. Although the options awarded to our executive and directors are typically exercisable
immediately, they also remain valid and exercisable for terms of several years. We believe this provides the proper balance of short-term
and long-term incentives to increase the value of the company. Although an immediate increase in share price following the issuance of
the options would obviously result in a profit if those options were exercised, the longer exercisable period of the options also provides
an incentive to increase value over the long term and gives our executive officer and directors the opportunity to realize gains based
on the sustained growth of our operations and revenues.
In addition, our sole executive officer
holds substantial ownership in the company and is generally motivated by a strong entrepreneurial interest in expanding our operations
and revenue base to the best of his ability.
Summary Compensation Table
The table below summarizes all compensation
awarded to, earned by, or paid to our former or current executive officers for the fiscal years ended December 31, 2022 and 2021.
SUMMARY COMPENSATION TABLE
Name and principal position
Year
Salary ($)
Bonus
($)
Stock
Awards
($)
Option
Awards
($)
Non-Equity
Incentive Plan
Compensation
($)
Nonqualified
Deferred
Compensation
Earnings ($)
All Other
Compensation
($)
Total
($)
Terry Howlett
CEO & CFO
2022
2021
180,000
180,000
—
—
—
—
—
—
180,000 1)
180,000 (2)
(1) Due to financial constraints,
however, the total paid to Mr. Howlett during the fiscal year ended December 31, 2022 was $0.
(2) Due to financial constraints,
however, the total salary paid to Mr. Howlett during the fiscal year ended December 31, 2021 was $0.
Narrative Disclosure to the Summary Compensation Table
We granted Mr. Howlett the
right to convert his accrued compensation of $630,000and $450,000 as of December 31, 2022 and 2021 into our common stock at $0.10 per
share at any time until 2028. If exercised, we also agreed to issue one three-year warrant for every two shares converted by Mr. Howlett
exercisable at $0.15 per share.
Outstanding Equity Awards
at Fiscal Year-End
There were no unexercised options,
stock that has not vested, or equity incentive plan awards as of December 31, 2022.
The table below
summarizes all compensation of our directors as of December 31, 2022.
DIRECTOR COMPENSATION
Name
Fees Earned or Paid in Cash
($)
Stock Awards ($)
Option Awards
($)
Non-Equity Incentive Plan Compensation ($)
Non-Qualified Deferred Compensation Earnings
($)
All Other Compensation ($)
Total
($)
David St. James
$6,000
-
-
-
-
-
-
23
Table of Contents
Narrative Disclosure to the Director
Compensation Table
All the fees earned or paid in cash
and stock options awards granted to Terry Howlett were earned in connection with his service as an executive officer. Mr. Howlett received
no compensation for his service as a member of our board of directors.
Mr St. James was paid $6,000 for
his services during the year ended December 31, 2022.
On September 22, 2018, we granted
an option to purchase 2,000 shares of our common stock to Mr. St. James. The options have a strike price of $1.75. The stock options were
exercisable upon grant and have a life of 5 years. The stock options were valued at $35,497 using the Black-Scholes option pricing model.
Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth, as
of March 31, 2023, the beneficial ownership of our common stock by each executive officer and director, by each person known by us to
beneficially own more than 5% of our common stock and by the executive officers and directors as a group.
Title of class
Name
and address of beneficial owner (1)
Amount
of beneficial ownership (2)
Percent
of class (3)
Executive
Officers & Directors:
Common
Terry Howlett (4)
11,041,001 shares
40.0
%
Common
David St. James (5)
2,000 shares
Less than 1
%
Total of All Directors
and Executive Officers:
11,043,001 shares
40.20
%
More Than 5% Beneficial
Owners:
Doreen McMorran (6)
10,250,510 shares
37.0
%
(1)
Except as otherwise indicated, the address of each person named in this table is c/o Skinvisible, Inc., 6320 South Sandhill Road, Suite 10, Las Vegas, Nevada 89120.
(2)
As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have "beneficial ownership" of any security that such person has the right to acquire within 60 days after such date.
(3)
Except as otherwise indicated, all shares are owned directly and the percentage
shown is based on 27,741,990 shares of common stock issued and outstanding and dilutive shares on March 31, 2023.
(4)
Includes 154,466 shares held in his name as indicated on our shareholder
list, and 10,886,535, shares of common stock held in derivative securities.
(5)
Includes an option to purchase 2,000 shares of common stock at $0.035 per share.
(6)
Includes 36,000 shares held in her name as indicated on our shareholder list, and 10,214,510 shares of common stock held in derivative securities.
24
Table of Contents
Item
13. Certain Relationships and Related Transactions, and Director Independence
Aside from that which follows and
in “Executive Compensation,” none of our directors or executive officers, nor any proposed nominee for election as a director,
nor any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to all of our
outstanding shares, nor any members of the immediate family (including spouse, parents, children, siblings, and in-laws) of any of the
foregoing persons has any material interest, direct or indirect, in any transaction for the last two fiscal years or in any presently
proposed transaction which, in either case, has or will materially affect us.
On February 3, 2020, we entered into a License Agreement
with Ovation Science, pursuant to which the Company 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.
On June 10, 2020, Ovation Science Inc. paid
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. In exchange for these rights Ovation
paid a $100,000 license fee. The Company completed the required assignments during the year ending December 31, 2021 and recognized $100,000
in revenue.
The Company earned $0 and $2,458 in royalties
under the license agreement during the years ending December 31, 2022 and 2021, respectively.
The
Company sold polymer products to Ovation Science Inc and earned $0 and $2,458 as of December 31, 2022 and 2021, respectively.
During the year ended December 31, 2022, $0 in advances were repaid to
Mr. Howlett.
During the year ended December 31, 2022, $25,200 in advances were repaid
to Ms. McMorran.
As of December 31, 2022, $27,299
and $52,499 in advances remained due to Mr. Howlett and Ms. McMorran, respectively, and all other related party notes have been extinguished
or re-negotiated as convertible notes.
The following table details
the notes that are outstanding for Terry Howlett and Doreen McMorran.
Noteholder
Date of Note
Interest
Maturity
Outstanding Principal as of December 31, 2022
Terry Howlett
June 30, 2019
10%
December 31, 2024
$2,108,519
Terry Howlett
June 30, 2019
10%
December 31, 2024
$68,788
Accrued Interest as of December 31, 2022
Terry Howlett
$765,338.19
Noteholder
Date of Note
Interest
Maturity
Outstanding Principal as of December 31, 2022
Doreen McMorran
June 30, 2019
10%
December 31, 2024
$2,004,502
Doreen McMorran
June 30, 2019
10%
December 31, 2024
$38,400
Accrued Interest as of December 31, 2022
Doreen McMorran
$720,553.15
Item 14. Principal Accounting
Fees and Services
Below is the table of Audit Fees
(amounts in US$) billed by our auditor in connection with the audit of the Company’s annual financial statements for the years ended:
Financial Statements for the
Year Ended December 31
Audit Services
Audit Related Fees
Tax Fees
Other Fees
2021
$
31,124
$
0
$
0
$
0
2022
$
33,500
$
0
$
0
$
0
25
Table of Contents
PART IV
Item 15. Exhibits, Financial Statements
Schedules
(a)
Financial Statements and Schedules
The following
financial statements and schedules listed below are included in this Form 10-K.
Financial Statements
(See Item 8)
(b)
Exhibits
Exhibit Number
Description
2.1
Agreement and Plan of Merger (4)
2 .2
Termination and Release Agreement (6)
3.1
Articles of Incorporation, as amended (1)
3.2
Bylaws, as amended (1)
3.3
Certificate of Amendment (2)
3.4
Certificate of Change (5)
14.1
Code of Ethics (3)
31.1
Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
1
Incorporated by reference to the Registration Statement on Form 10SB12G filed on April; 30, 1999.
2
Incorporated by reference to the Report on Form 8-K filed on September 12, 2008.
3
Incorporated by reference to Current report on Form 10-KSB filed with the Securities and Exchange Commission on April 14, 2005.
4
Incorporated by reference to the Report on Form 8-K filed on March 29, 2018
5
Incorporated by reference to the Report on Form 8-K filed on January 22, 2019
6
Incorporated by reference to the Report on Form 8-K filed on October 22, 2019
Item 16. Form 10-K Summary
None.
26
Table of Contents
SIGNATURES
Pursuant to
the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Skinvisible, Inc.
By:
/s/ Terry Howlett
Terry Howlett
President, Chief Executive Officer, Principal Executive Officer,
Chief Financial Officer, Principal Financial Officer, Principal Accounting
Officer and Director
March 29, 2023
Pursuant to
the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
By:
/s/ Terry Howlett
Terry Howlett
President, Chief Executive Officer, Principal Executive Officer,
Chief Financial Officer, Principal Financial Officer, Principal Accounting
Officer and Director
March 29, 2023
By:
/s/ David St. James
David St. James
Director
March 29, 2023
27
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.