What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-15 compared with 2023-11-15 · 268 added, 253 removed, 4 unchanged (99% of the section changed)

Management’s Discussion

and Analysis of Financial Condition and Results of Operations Forward-Looking Statements

quarterly report contains forward-looking statements.

Forward-looking statements are projections of events, revenues, income, future

economic performance or management’s plans and objectives for our future operations.

In some cases, you can identify forward-looking

statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”,

“believes”, “estimates”, “predicts”, “potential” or “continue” or the negative

of these terms or other comparable terminology.

These statements are only predictions and involve known and unknown risks, uncertainties

and other factors, including the risks in the section entitled “Risk Factors” and the risks set out below, any of which may

cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any

future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

include, by way of example and not in limitation:

uncertainty of profitability based upon our history of losses;

• legislative

or regulatory changes concerning skincare research and therapies;

related to failure to obtain adequate financing on a timely basis and on acceptable terms

to continue as going concern;

related to our operations and uncertainties related to our business plan and business strategy;

in economic conditions;

• uncertainty

with respect to intellectual property rights, protecting those rights and claims of infringement

Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements

This quarterly report contains forward-looking statements.

Forward-looking

statements are projections of events, revenues, income, future economic performance or management’s plans and objectives for our

future operations.

In some cases, you can identify forward-looking statements by terminology such as “may”, “should”,

“expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”,

“potential” or “continue” or the negative of these terms or other comparable terminology.

These statements are

only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk

Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance

or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied

by these forward-looking statements.

These risks include, by way of example and not in limitation:

• the uncertainty of profitability based upon our history of losses;

• legislative or regulatory changes concerning skincare research and therapies;

• risks related to failure to obtain adequate financing on a timely basis and on acceptable terms to continue

as going concern;

• risks related to our operations and uncertainties related to our business plan and business strategy;

• changes in economic conditions;

• uncertainty with respect to intellectual property rights, protecting those rights and claims of infringement

of other’s intellectual property;

• competition;

• cybersecurity

list is not an exhaustive list of the factors that may affect any of our forward-looking statements.

These and other factors should be

considered carefully, including those contained in our Annual Report on Form 10-K under “Risk Factors” for the year ended

December 31, 2022, and readers should not place undue reliance on our forward-looking statements.

Forward looking statements are made

based on management’s beliefs, estimates and opinions on the date the statements are made, and we undertake no obligation to update

forward-looking statements if these beliefs, estimates and opinions or other circumstances should change.

Although we believe that the

expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance

or achievements.

Except as required by applicable law, including the securities laws of the United States, we do not intend to update

any of the forward-looking statements to conform these statements to actual results.

financial statements are stated in United States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting

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 downsizing 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.

Flagship Product

to our success is our patented polymer delivery system technology Invisicare.

Invisicare is a patented polymer delivery system that enhances

the delivery of active ingredients for topically applied skin care products.

Its patented technology has a unique formula and process

for combining active ingredients with a delivery system that extends the duration of time the product remains on the skin and active.

is specifically formulated to carry water insoluble active and certain cationic active ingredients in water-based products without the

use of alcohol, silicones, waxes, or other organic solvents.

Products utilizing Invisicare have the proven ability to bond active ingredients

to the skin for up to four hours and longer.

They are non-occlusive and allow normal skin respiration and perspiration while moisturizing

and protecting against exposure from a wide variety of environmental irritants.

topically applied, these formulated products adhere to the skin's outer layers, forming a protective bond, resisting wash-off, and delivering

targeted levels of therapeutic or cosmetic skincare agents to the skin.

They allow enhanced delivery performance for a variety of skincare

agents resulting in improved efficacy, longer duration of action, reduced irritation and lower dosage of active agent required.

The "invisible"

polymer compositions wear off as part of the natural exfoliation process of the skin's outer layer cells.

advantage of products formulated with Invisicare is (1) Invisicare’s ability to bind active ingredients (the drug) to the skin,

forming a protective bond on the skin, for extended periods of time;

(2) Invisicare can deliver targeted levels (high or low) of therapeutic

or cosmetic ingredients to the skin in a controlled release;

(3) Invisicare can help to reduce the irritation of some active ingredients

due to how it controls the slower release of that active ingredient;

and (4) Invisicare science proves that it provides a protective

skin barrier which helps retain the natural moisture content of the skin, while still allowing it to breathe.

These benefits present

an excellent opportunity for clear scientific advantages and marketing messages which resonate with physicians and consumers.

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.

• cybersecurity concerns.

This list is not an exhaustive list of the factors that may affect any

of our forward-looking statements.

These and other factors should be considered carefully, including those contained in our Annual Report

on Form 10-K under “Risk Factors” for the year ended December 31, 2023, and readers should not place undue reliance on our

forward-looking statements.

Forward looking statements are made based on management’s beliefs, estimates and opinions on the date

the statements are made, and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions

or other circumstances should change.

Although we believe that the expectations reflected in the forward-looking statements are reasonable,

we cannot guarantee future results, levels of activity, performance or achievements.

Except as required by applicable law, including the

securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to

actual results.

Our financial statements are stated in United States

dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

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.

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 Company is also exploring new opportunities in large medical

markets outside of the dermatology market such as obesity and other potential markets where a topical or transdermal solution would be

a viable alternative.

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 downsizing 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

Pivotal to our success is our patented polymer

delivery system technology Invisicare.

Invisicare is a patented polymer delivery system that enhances the delivery of active ingredients

for topically applied skin care products.

Its patented technology has a unique formula and process for combining active ingredients with

a delivery system that extends the duration of time the product remains on the skin and active.

Invisicare is specifically formulated to

carry water insoluble active and certain cationic active ingredients in water-based products without the use of alcohol, silicones, waxes,

or other organic solvents.

Products utilizing Invisicare have the proven ability to bond active ingredients to the skin for up to four

hours and longer.

They are non-occlusive and allow normal skin respiration and perspiration while moisturizing and protecting against

exposure from a wide variety of environmental irritants.

When topically applied, these formulated products

adhere to the skin's outer layers, forming a protective bond, resisting wash-off, and delivering targeted levels of therapeutic or cosmetic

skincare agents to the skin.

They allow enhanced delivery performance for a variety of skincare agents resulting in improved efficacy,

longer duration of action, reduced irritation and lower dosage of active agent required.

The "invisible" polymer compositions

wear off as part of the natural exfoliation process of the skin's outer layer cells.

The advantage of products formulated with Invisicare

is (1) Invisicare’s ability to bind active ingredients (the drug) to the skin, forming a protective bond on the skin, for extended

periods of time;

(2) Invisicare can deliver targeted levels (high or low) of therapeutic or cosmetic ingredients to the skin in a controlled

(3) Invisicare can help to reduce the irritation of some active ingredients due to how it controls the slower release of that

active ingredient;

and (4) Invisicare science proves that it provides a protective skin barrier which helps retain the natural moisture

content of the skin, while still allowing it to breathe.

These benefits present an excellent opportunity for clear scientific advantages

and marketing messages which resonate with physicians and consumers.

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.

CO-DEVELOPMENT :

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

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.

Agreement with Quoin

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

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.

License Agreement with

On October 17, 2019, we entered an Exclusive

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

license to certain patents for the development of products for commercial sale.

In exchange for the license, Quoin paid us a license fee

of one million USD dollars (USD $1,000,000) (the “License Fee”) and will additionally pay 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.

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.

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 (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:

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.

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.

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.

Agreement with Ovation Science

February 3, 2020, we entered into a License Agreement with Ovation Science Inc.

pursuant to which Skinvisible granted to Ovation Science

a license for the manufacture and distribution rights to its hand sanitizer product, DermSafe.

In exchange for the license, Ovation

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.

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 license fee.

We completed the required assignments during the year ending

December 31, 2020 and recognized $100,000 in revenue.

of Operations for the Three and Nine Months Ended September 30, 2023 and 2022

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 September 30, 2023, a decrease from $9,316 for the same period ended September 30, 2022.

revenue, which we combine from product sales, royalties on patent licenses and license fees (product development fees), was $15,000 for

the nine months ended September 30, 2023, a decrease from $274,296 for the same period ended September 30, 2022.

decrease in revenue for the three and nine months ended September 30, 2023, was primarily the result of a decrease in license fees.

had $0 in cost of revenues for the three months ended September 30, 2023, compared with $3,300 in cost of revenues for the three months

ended September 30, 2022, so our gross profit was $5,000 for the three months ended September 30, 2023, as compared with gross profit

of $6,016 for the three ended September 30, 2022.

We had $0 in cost of revenues for the nine months ended September 30, 2023, compared

with $4,808 in cost of revenues for the nine months ended September 30, 2022, so our gross profit was $15,000 for the nine months ended

September 30, 2023, as compared with gross profit of $269,488 for the nine months ended September 30, 2022.

gross profit decreased in Q3 2023 due to less revenues from our license with Quoin.

We hope to generate more revenues from our licenses

with Quoin and Ovation for the rest of 2023.

expenses decreased to $118,110 for the three months ended September 30, 2023, from $133,183 for the same period ended September 30, 2022.

Operating expenses decreased to $368,837 for the nine months ended September 30, 2023, from $390,204 for the same period ended September

operating expenses for all periods consisted mainly of selling, general and administrative expenses.

selling, general and administrative expenses for the nine months ended September 30, 2023, consisted mainly of accrued salaries and wages

of $263,329 and audit and accounting of $33,029.

In comparison, 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.

had other expenses of $174,408 for the three months ended September 30, 2023, as compared with other expenses of $290,901 for the three

months ended September 30, 2022.

We had other expenses of $1,724,812 for the nine months ended September 30, 2023, as compared with other

expenses of $703,594 for the nine months ended September 30, 2022.

other expenses for the nine months ended September 30, 2023 consisted mainly of interest expense, netted against a gain on forgiveness

of debt and gain on derivative liability changes.

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.

recorded a net loss of $287,518 for the three months ended September 30, 2023, as compared with a net loss of $418,068 for the three

months ended September 30, 2022.

We recorded a net loss of $2,078,649 for the nine months ended September 30, 2023, as compared with

a net loss of $824,310 for the nine months ended September 30, 2022.

increase in net loss is primarily the result of the increase in interest expense during the nine months ended September 30, 2023 compared

and Capital Resources

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 $39,076,697

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

The consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these

aforementioned uncertainties.

of September 30, 2023, we had total current assets of $52,905 and total assets in the amount of $185,061.

Our total current liabilities

as of September 30, 2023 were $3,243,621.

We had a working capital deficit of $3,190,716 as of September 30, 2023, compared with a working

capital deficit of $2,920,522 as of June 30, 2023 and $3,535,040 as of December 31, 2022.

activities used $73,314 in cash for the nine months ended September 30, 2023, as compared with $90,680 provided for the nine months ended

September 30, 2022.

Our negative operating cash flows for 2023 was largely the result of our net loss for those quarter, mainly offset

by changes in operating assets and liabilities and the amortization of debt discount.

operating cash flows for 2022 was largely the result of changes in operating assets and liabilities, amortization of debt discount offset

mainly by the net loss for the periods.

used cash of $9,333 and $2,005 in investing activities for the nine months ended September 30, 2023 and 2022, respectively, for the purchase

of intangible assets.

flow provided from financing activities was $2,000 for the nine months ended September 30, 2023, as compared with cash

flows used by financing activities during the nine months ended September 30, 2022 amounted to $27,299.

Our negative financing cash flow

for the nine months ended September 30, 2022 resulted from repayment of related party debt.

features of the debt instruments and payables concerning our financing activities are detailed in the footnotes to our financial statements.

upon our current financial condition, we do not have sufficient cash to operate our business at the current level for the next twelve

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.

There can be no assurance that such additional financing will be available

to us on acceptable terms or at all.

Balance Sheet Arrangements

of September 30, 2023, there were no off-balance sheet arrangements.

Accounting Policies

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.

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.

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

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 payments.

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.

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 September

30, 2023, we had not recorded a reserve for doubtful accounts.

Issued Accounting Pronouncements

do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial

position or cash flow.

Quantitative and Qualitative

Disclosures About Market Risk

smaller reporting company is not required to provide the information required by this Item.

The agreement also requires that Quoin make a milestone

payment of $5 million to us upon achieving the first to occur of either FDA or European Union regulatory approval for one product licensed.

In addition, and upon the successful

approval in the US or European Union, whichever occurs first, Skinvisible is entitled to receive a single digit royalty percentage of

Quoins net sales revenues for any licensed product covered by the patent rights licensed under the License Agreement.

Plus, Quoin also

agreed to pay Skinvisible 25% of any revenues they receive as royalties in the event they sublicense any licensed products to a third

On June 6, 2022, the Company announced that its

licensee Quoin and its product QRX003, was the first Invisicare delivery technology product to receive U.S.

FDA Acceptance of Investigational

New Drug Application and that Quoin was actively working towards obtaining necessary FDA and other regulatory approvals for marketing

the product in the United States and other countries.

On February 14, 2024, the Company announced that

there was significant progress in Quoin's clinical trials for product formulations containing Invisicare targeting Netherton Syndrome.

The trials focus on the innovative formulation "QRX003," powered by Skinvisible’s Invisicare® proprietary drug delivery

The updates include:

Positive Initial Data and Clean Safety Profile:

The trials have

demonstrated positive initial data and a clean safety profile, leading to the implementation of an optimization plan.

Optimization Plan Implementation:

Quoin has increased the size

of both clinical trials significantly and adjusted dosing frequency to twice-daily from once-daily for both trials.

Elimination of Lower Dose:

In the blinded trial, a lower dose

has been eliminated based on the positive outcomes observed.

Protocol Amendments:

Quoin's press release highlights protocol

amendments aimed at enhancing the data set and potentially expediting regulatory approval.

We believe these protocol amendments could ultimately

result in the generation of a highly compelling data set, which could support regulatory filings and approval for QRX003 as the first

treatment for Netherton Syndrome.

On March 4, 2024

Quoin announced a further milestone:

it received FDA Clearance to recruit teen subjects into both ongoing Netherton Syndrome clinical

We believe this announcement is important as:

Clearance to include teen patients in both Quoin’s open

label and placebo-controlled studies are expected to significantly expand the number of eligible subjects, potentially expedite recruitment

and lead to a more robust data set.

This development represents the first ever inclusion of non-adult

subjects in Netherton Syndrome clinical studies conducted under an open Investigational New Drug Application.

It is believed that the inclusion of this patient population

in Quoin’s studies will be a critical component of the development of a robust data set that could result in regulatory approval

with a broad label as QRX003 is being tested both as monotherapy and in conjunction with off-label treatments.

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 license fee.

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

Filing of Patent Application

The Company expects to file a US patent application

for the delivery of weight loss actives in the coming days.

Results of Operations for the Three Months Ended March 31, 2024 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, 2024, a decrease from $0 for the same period ended March 31, 2023.

We had $0 in cost of revenues for the three months ended March 31, 2024,

compared with $0 in cost of revenues for the three months ended March 31, 2023, so our gross profit was $5,000 for the three months ended

March 31, 2024, as compared with gross profit of $5,000 for the three ended March 31, 2023.

Operating Expenses

Operating expenses decreased to $128,184 for the three months

ended March 31, 2024, from $132,904 for the same period ended March 31, 2023.

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, 2024, consisted mainly of accrued salaries and wages of $87,942 and audit and accounting of $17,610.

In comparison, 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.

Other Expenses

We had other expenses of $167,188 for the three months ended March 31,

2024, as compared with other expenses of $1,387,152 for the three months ended March 31, 2023.

Our other expenses for the three months ended March

31, 2024 consisted mainly of interest expense and losses on derivative liability changes.

Our other expenses for the three months ended

March 31, 2023 was primarily a result of the increased interest expense resulting from the amortization of debt discounts.

We recorded a net loss of $290,372 for the three months ended March

31, 2024, as compared with a net loss of $1,515,056 for the three months ended March 31, 2023.

Liquidity and Capital Resources

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 $39,670,860 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.

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, 2024, we had total current assets

of $30,689 and total assets in the amount of $153,403.

Our total current liabilities as of March 31, 2024 were $4,094,415.

We had a working

capital deficit of $4,063,726 as of March 31, 2024, compared with a working capital deficit of $3,476,947 as of December 31, 2023.

Operating activities used $12,291 in cash for

the three months ended March 31, 2024, as compared with $51,715 used for the three months ended March 31, 2023.

Our negative operating

cash flows for 2023 and 2024 was largely the result of our net loss for those quarter, mainly offset by changes in operating assets and

liabilities and the amortization of debt discount.

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

for the three months ended March 31, 2024 and 2023, respectively, for the purchase of intangible assets.

Cash flow provided from financing activities was

$19,500 for the three months ended March 31, 2024, as compared with no cash flows for financing

activities during the three months ended March 31, 2023.

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 capital.

Off Balance Sheet Arrangements

As of March 31, 2024, there were no off-balance sheet arrangements.

Critical Accounting Policies

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

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 payments.

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.

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 March 31, 2024, we had not recorded a reserve for doubtful accounts.

Recently Issued Accounting Pronouncements

We do not expect the adoption of recently issued accounting pronouncements

to have a significant impact on our results of operations, financial position or cash flow.

Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company is not required to provide the information

required by this Item.

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