What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-05-10 compared with 2022-11-14 · 130 added, 122 removed, 127 unchanged (66% 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

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'').

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

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 $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

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

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

for the rest of 2022.

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

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

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.

For information and updates see www.quoipharma.com.

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.

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 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.

Results of Operations for the Three Months Ended March 31, 2023 and

Our revenue, which we combine from product sales,

royalties on patent licenses and license fees (product development fees), was $5,000 for the three months ended March 31, 2023, a decrease

from $59,980 for the same period ended March 31, 2022.

The decrease in Revenue was primarily the result of

a decrease in license fees.

We had $0 in cost of revenues for the three months

ended March 31, 2023, compared with $1,508 in cost of revenues for the three months ended March 31, 2022, so our gross profit was $5,000

for the three months ended March 31, 2023, as compared with gross profit of $58,472 for the three ended March 31, 2022.

Our gross profit decreased primarily as a result of decreased

revenue during the three months ended March 31, 2023 We hope to generate more revenues from our licenses with Quoin and Ovation for the

rest of 2023.

Operating Expenses

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 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.

Operating expenses decreased to $132,904 for the three months

ended March 31, 2023, from $138,011 for the same period ended March 31, 2022.

Our operating expenses for all periods consisted mainly of selling,

general and administrative expenses.

Our selling, general and administrative expenses for the three months

ended March 31, 2023, consisted mainly of accrued salaries and wages of $92,942 and audit and accounting of $17.810.

In comparison, our

selling, general and administrative 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.

Other Expenses

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.

We had other expenses of $1,387,152 for the three months ended March 31,

2023, as compared with other expenses of $134,980 for the three months ended March 31, 2022.

Our increase in other expenses is primarily a result

of the increased interest expense resulting from the amortization of debt discounts.

We recorded a net loss of $1,515,056 for the three months ended

March 31, 2023, as compared with a net loss of $214,519 for the three months ended March 31, 2022.

Liquidity and Capital Resources

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 September 30, 2022 were $3,622,050.

We had a working capital deficit

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

activities are detailed in the footnotes to our financial statements.

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.

The Company has incurred cumulative net losses of $38,513,104 since its inception and requires capital

for its contemplated operational and marketing activities to take place.

The Company’s ability to generate the necessary funds through

licensing of its core products or the ability to raise additional capital through the future issuances of common stock or debt is unknown.

The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations, and its transition,

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

These factors, among others,

raises substantial doubt about the Company’s ability to continue as a going concern.

The consolidated financial statements of the

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

As of March 31, 2023, we had total current assets

of $73,130 and total assets in the amount of $205,858.

Our total current liabilities as of March 31, 2023 were $2,726,313.

We had a working

capital deficit of $2,653,183 as of March 31, 2023, compared with a working capital deficit of $2,987,049 as of December 31, 2022.

Operating activities used $51,715 in cash for the

three months ended March 31, 2023, as compared with $40,940 used for the three months ended March 31, 2022.

Our negative operating cash

flows for 2023 and 2022 was largely the result of our net losses for those quarters, mainly offset by changes in operating assets and

liabilities and the amortization of debt discount.

We used cash of $525 and $0 in investing activities

for the three months ended March 31, 2023 and 2022, respectively, for the purchase of intangible assets.

We had no cash flow from financing activities for

either the three months ended March 31, 2023 or 2022.

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

8 unchanged sentences

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 $36,597,471 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 September 30, 2022, there were no off balance sheet arrangements.

As of March 31, 2023, 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 September 30, 2022, we had not recorded a reserve for doubtful accounts.

As of March 31, 2023, 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