SKINVISIBLE, INC. Certain statements, other than purely historical information, including
estimates, projections, statements relating to our business plans, objectives,
and expected operating results, and the assumptions upon which those statements
are based, are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements generally are identified by the words "believes,"
"project," "expects," "anticipates," "estimates," "intends," "strategy," "plan,"
"may," "will," "would," "will be," "will continue," "will likely result," and
similar expressions. We intend such forward-looking statements to be covered by
the safe-harbor provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995, and are including this
statement for purposes of complying with those safe-harbor provisions.
Forward-looking statements are based on current expectations and assumptions
that are subject to risks and uncertainties which may cause actual results to
differ materially from the forward-looking statements. Our ability to predict
results or the actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material adverse affect on our operations
and future prospects on a consolidated basis include, but are not limited to:
changes in economic conditions, legislative/regulatory changes, availability of
capital, interest rates, competition, and generally accepted accounting
principles. These risks and uncertainties should also be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements. We undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. Further information concerning our business, including
additional factors that could materially affect our financial results, is
included herein and in our other filings with the
Company Overview
We, through our wholly owned subsidiary
With the research and development complete on forty products and numerous patents issued (technology and product patents), we are ready to monetize our investment. Our business model will continue to be to out-license our patented prescription and over-the-counter ("OTC") products featuring Invisicare to established manufacturers and marketers of brands internationally and to maximize profits from the products we have already out-licensed.
The opportunity for us to license our products continues to be a viable model as the need for pharmaceutical companies to access external R&D companies for new products due to their own down-sizing or elimination of internal R&D departments. The demand for our products is enhanced due to the granting of key US and international patents and the completed development of a number of unique products.
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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.
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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 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.
What We Do
We have positioned ourselves in the
• LICENSING: 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;
• 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 Quoin
On
The agreement was subject to termination, if among other things, 50% of the
license fee is not paid by
On
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As partial consideration for the rights conveyed by
Additionally, the milestones in the initial agreement were changed as shown below:
(i) Successful completion of Phase 2 testing: $0
(ii) Successful completion of Phase 3 testing: $0
Regulatory approval in either 1· the US or EU, whichever happens
(iii) first: $5,000,000 On
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,
Results of Operations for the Three and Nine Months Ended
Revenues
Our revenue, which we combine from product sales, royalties on patent licenses
and license fees (product development fees), was
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.
Gross Profit
We had
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.
Operating Expenses
Operating expenses increased to
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
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We had other expenses of
Our other expenses for the nine months ended
Net Loss
We recorded a net loss of
Liquidity and Capital Resources
As of
Operating activities provided
We used cash of
Cash flows used by financing activities during the nine months ended
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. There can 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
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Off Balance Sheet Arrangements
As of
Critical Accounting Policies
In
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 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. 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
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.
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