0001663577-21-000432.txt : 20210816 0001663577-21-000432.hdr.sgml : 20210816 20210816172849 ACCESSION NUMBER: 0001663577-21-000432 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 52 CONFORMED PERIOD OF REPORT: 20210630 FILED AS OF DATE: 20210816 DATE AS OF CHANGE: 20210816 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SKINVISIBLE, INC. CENTRAL INDEX KEY: 0001085277 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 880344219 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-25911 FILM NUMBER: 211180006 BUSINESS ADDRESS: STREET 1: 6320 S SANDHILL ROAD STREET 2: SUITE 10 CITY: LAS VEGAS STATE: NV ZIP: 89120 BUSINESS PHONE: 7024337154 MAIL ADDRESS: STREET 1: 6320 S SANDHILL ROAD STREET 2: SUITE 10 CITY: LAS VEGAS STATE: NV ZIP: 89120 FORMER COMPANY: FORMER CONFORMED NAME: SKINVISIBLE INC DATE OF NAME CHANGE: 19990428 10-Q 1 skvi10q.htm
0001085277 false Q2 2021 --12-31 0001085277 2021-01-01 2021-06-30 0001085277 2021-08-09 0001085277 2021-06-30 0001085277 2020-12-31 0001085277 2021-04-01 2021-06-30 0001085277 2020-04-01 2020-06-30 0001085277 2020-01-01 2020-06-30 0001085277 us-gaap:CommonStockMember 2020-12-31 0001085277 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0001085277 SKVI:StockPayableMember 2020-12-31 0001085277 us-gaap:RetainedEarningsMember 2020-12-31 0001085277 us-gaap:CommonStockMember 2021-01-01 2021-03-31 0001085277 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-03-31 0001085277 SKVI:StockPayableMember 2021-01-01 2021-03-31 0001085277 us-gaap:RetainedEarningsMember 2021-01-01 2021-03-31 0001085277 2021-01-01 2021-03-31 0001085277 us-gaap:CommonStockMember 2021-03-31 0001085277 us-gaap:AdditionalPaidInCapitalMember 2021-03-31 0001085277 SKVI:StockPayableMember 2021-03-31 0001085277 us-gaap:RetainedEarningsMember 2021-03-31 0001085277 2021-03-31 0001085277 us-gaap:CommonStockMember 2021-04-01 2021-06-30 0001085277 us-gaap:AdditionalPaidInCapitalMember 2021-04-01 2021-06-30 0001085277 SKVI:StockPayableMember 2021-04-01 2021-06-30 0001085277 us-gaap:RetainedEarningsMember 2021-04-01 2021-06-30 0001085277 us-gaap:CommonStockMember 2021-06-30 0001085277 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0001085277 SKVI:StockPayableMember 2021-06-30 0001085277 us-gaap:RetainedEarningsMember 2021-06-30 0001085277 us-gaap:CommonStockMember 2019-12-31 0001085277 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001085277 SKVI:StockPayableMember 2019-12-31 0001085277 us-gaap:RetainedEarningsMember 2019-12-31 0001085277 2019-12-31 0001085277 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001085277 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001085277 SKVI:StockPayableMember 2020-01-01 2020-03-31 0001085277 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001085277 2020-01-01 2020-03-31 0001085277 us-gaap:CommonStockMember 2020-03-31 0001085277 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001085277 SKVI:StockPayableMember 2020-03-31 0001085277 us-gaap:RetainedEarningsMember 2020-03-31 0001085277 2020-03-31 0001085277 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001085277 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001085277 SKVI:StockPayableMember 2020-04-01 2020-06-30 0001085277 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001085277 us-gaap:CommonStockMember 2020-06-30 0001085277 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001085277 SKVI:StockPayableMember 2020-06-30 0001085277 us-gaap:RetainedEarningsMember 2020-06-30 0001085277 2020-06-30 0001085277 1998-12-06 2021-06-30 0001085277 SKVI:AmountMember 2021-06-30 0001085277 SKVI:Level1Member 2021-06-30 0001085277 SKVI:Level2Member 2021-06-30 0001085277 SKVI:Level3Member 2021-06-30 0001085277 2020-09-30 0001085277 SKVI:OptionsMember 2021-01-01 2021-06-30 0001085277 SKVI:WarrantsMember 2021-01-01 2021-06-30 0001085277 SKVI:ConvertibleNotesMember 2021-01-01 2021-06-30 0001085277 2019-06-30 0001085277 2019-01-01 2019-06-30 0001085277 us-gaap:ConvertibleNotesPayableMember 2021-01-01 2021-06-30 0001085277 us-gaap:ConvertibleNotesPayableMember 2019-06-30 0001085277 us-gaap:ConvertibleNotesPayableMember 2020-01-01 2020-06-30 0001085277 SKVI:RelatedPartyNotesPayableOneMember 2021-06-30 0001085277 SKVI:RelatedPartyNotesPayableOneMember 2020-12-31 0001085277 SKVI:NineteenNotesPayableMember 2018-12-31 0001085277 SKVI:NineteenNotesPayableMember 2013-05-22 2018-12-31 0001085277 SKVI:NineteenNotesPayableMember 2021-01-01 2021-06-30 0001085277 SKVI:NineteenNotesPayableMember 2021-06-30 0001085277 SKVI:PastDueMember 2021-06-30 0001085277 SKVI:ConvertibleNoteOneMember 2021-06-30 0001085277 SKVI:ConvertibleNote1Member 2021-06-30 0001085277 SKVI:ConvertibleNote1Member 2021-06-30 0001085277 SKVI:ConvertibleNote1Member 2020-12-31 0001085277 SKVI:ConvertibleNote10Member 2021-06-30 0001085277 SKVI:ConvertibleNote10Member 2020-12-31 0001085277 SKVI:ConvertibleNoteTwoMember 2015-10-26 0001085277 SKVI:ConvertibleNote2Member 2021-01-01 2021-06-30 0001085277 SKVI:ConvertibleNote2Member 2021-04-01 2021-06-30 0001085277 SKVI:ConvertibleNoteTwoMember 2021-06-30 0001085277 SKVI:ConvertibleNote2Member 2021-06-30 0001085277 SKVI:ConvertibleNote2Member 2020-12-31 0001085277 SKVI:ConvertibleNote3Member 2016-02-17 0001085277 SKVI:ConvertibleNote3Member 2021-01-01 2021-06-30 0001085277 SKVI:ConvertibleNote3Member 2021-06-30 0001085277 SKVI:ConvertibleNote3Member 2021-06-30 0001085277 SKVI:ConvertibleNote3Member 2020-12-31 0001085277 SKVI:ConvertibleNoteFourMember 2016-08-11 0001085277 SKVI:ConvertibleNote4Member 2021-01-01 2021-06-30 0001085277 SKVI:ConvertibleNote4Member 2021-04-01 2021-06-30 0001085277 SKVI:ConvertibleNoteFourMember 2021-06-30 0001085277 SKVI:ConvertibleNote4Member 2021-06-30 0001085277 SKVI:ConvertibleNote4Member 2020-12-31 0001085277 SKVI:ConvertibleNoteFiveMember 2017-01-27 0001085277 SKVI:ConvertibleNote5Member 2021-01-01 2021-06-30 0001085277 SKVI:ConvertibleNoteFiveMember 2021-06-30 0001085277 SKVI:ConvertibleNote5Member 2021-06-30 0001085277 SKVI:ConvertibleNote5Member 2020-12-31 0001085277 SKVI:ConvertibleNoteSixMember 2019-06-30 0001085277 SKVI:ConvertibleNote6Member 2019-04-01 2019-06-30 0001085277 SKVI:ConvertibleNote6Member 2021-01-01 2021-06-30 0001085277 SKVI:ConvertibleNote6Member 2020-01-01 2020-06-30 0001085277 SKVI:ConvertibleNote6Member 2021-06-30 0001085277 SKVI:ConvertibleNote6Member 2020-12-31 0001085277 SKVI:TotalConvertibleNotesMember 2021-06-30 0001085277 SKVI:TotalConvertibleNotesMember 2020-12-31 0001085277 SKVI:TotalConvertibleNotesCurrentMember 2021-06-30 0001085277 SKVI:TotalConvertibleNotesCurrentMember 2020-12-31 0001085277 SKVI:TotalLongTermConvertibleNotesCurrentMember 2021-06-30 0001085277 SKVI:TotalLongTermConvertibleNotesCurrentMember 2020-12-31 0001085277 SKVI:ExcercisePriceOneMember 2020-12-31 0001085277 SKVI:OptionExerciseMember 2021-01-01 2021-06-30 0001085277 SKVI:ExcercisePriceTwoMember 2020-12-31 0001085277 SKVI:WarrantsExpiredMember 2021-01-01 2021-06-30 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
   
  For the quarterly period ended June 30, 2021
   
Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
   
  For the transition period from __________  to __________
   
  Commission File Number: 000-25911

 

Skinvisible, Inc.

(Exact name of Registrant as specified in its charter)

 

Nevada 88-0344219
(State or other jurisdiction of incorporation or organization)  (IRS Employer Identification No.)

 

6320 South Sandhill Road, Suite 10, Las Vegas, NV 89120
(Address of principal executive offices)

 

(702) 433-7154
(Registrant’s telephone number)
 
 _______________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days Yes No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YesNo

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 

☐   Large accelerated filer ☐   Accelerated filer
  Non-accelerated Filer Smaller reporting company
    Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes   No ☒  

 

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 4,539,843 common shares as of August 9, 2021.

 

 1 

 

 

  TABLE OF CONTENTS

 

Page

 

PART I – FINANCIAL INFORMATION

 

Item 1: Financial Statements 3
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations 4
Item 3: Quantitative and Qualitative Disclosures About Market Risk 7
Item 4: Controls and Procedures 7

 

PART II – OTHER INFORMATION

 

Item 1: Legal Proceedings 8
Item 1A: Risk Factors 8
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds 8
Item 3: Defaults Upon Senior Securities 8
Item 4: Mine Safety Disclosure 8
Item 5: Other Information 8
Item 6: Exhibits 8

 

 

 2 

 

PART I - FINANCIAL INFORMATION

 

Item 1.Financial Statements

 

Our consolidated financial statements included in this Form 10-Q are as follows:

 

F-1Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020 (unaudited);

 

F-2Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020 (unaudited);

 

  F-3 Consolidated Statements of Stockholders’ Equity (Deficit) for the six months ended June 30, 2021 and 2020 (unaudited);

 

  F-4 Consolidated Statements of Cash Flow for the six months ended June 30, 2021 and 2020 (unaudited);

 

  F-5 Notes to Consolidated Financial Statements.

 

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended June 30, 2021 are not necessarily indicative of the results that can be expected for the full year.

 

 3 

 

SKINVISIBLE, INC.

CONSOLIDATED BALANCE SHEETS 

 

   June 30, 2021  December 31, 2020
  (Unaudited)
ASSETS  .   
Current assets         
Cash  $54,975   $35,896
Accounts receivable   6,127    7,718
Prepaid expense and other current assets   7,250    6,500
Total current assets   68,352    50,114
          
Patents and trademarks, net   162,446    150,130
          
Total assets  $230,798   $200,244
          . 
LIABILITIES AND STOCKHOLDERS' DEFICIT         
Current liabilities         
Accounts payable and accrued liabilities  $985,574   $865,497
Accounts payable related party         7,616
Accrued interest payable   1,200,477    1,021,373
Loans from related party   52,299    52,499
Loans payable   486,100    552,000
Convertible notes payable   155,000    220,000
Derivative liability   190,669      
Total current liabilities   3,070,119    2,718,985
          
Convertible notes payable related party, net of unamortized discount of $2,142,844 and $2,447,770 respectively   2,092,365    1,787,439
Convertible notes payable, net of unamortized debt discount of $178,268 and $203,476, respectively   173,807    148,599
          
Total liabilities   5,336,291    4,655,023
          
Stockholders' deficit         
Common stock; $0.001 par value; 200,000,000 shares authorized; 4,539,843 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively   4,540    4,540
Additional paid-in capital   30,294,394    30,241,089
Accumulated deficit   (35,404,427)   (34,700,408)
Total stockholders' deficit   (5,105,493)   (4,454,779)
          
Total liabilities and stockholders' deficit  $230,798   $200,244

 

See Accompanying Notes to Condensed Consolidated Financial Statements.

 

 F-1 

 

SKINVISIBLE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED) 

 

   Three Months Ended  Six months ended
   June 30, 2021  June 30, 2020  June 30, 2021  June 30, 2020
             
             
Revenues  $287,099   $9,000   $299,150   $17,409
Revenues related party         110,970          118,613
                    
Cost of revenues               3,300      
                    
Gross profit   287,099    119,970    295,850    136,022
                    
Operating expenses                   
Depreciation and amortization   4,297    9,961    8,548    19,681
Selling general and administrative   123,282    122,771    238,909    259,095
Total operating expenses   127,579    132,732    247,457    278,776
                    
Income (loss) from operations   159,520    (12,762)   48,393    (142,754)
                    
Other income and (expense)                   
Interest expense   (308,084)   (300,031)   (591,991)   (600,123)
Loss on change in derivative liability   (203,503)         (243,974)     
Gain on settlement of debt   83,553          83,553      
Total other expense   (428,034)   (300,031)   (752,412)   (600,123)
                    
Net income (loss)  $(268,514)  $(312,793)  $(704,019)  $(742,877)
                    
Basic loss per common share  $(0.06)  $(0.07)  $(0.16)  $(0.17)
                    
Fully diluted loss per common share  $(0.06)  $(0.07)  $(0.16)  $(0.17)
                    
Basic weighted average common shares outstanding   4,471,746    4,471,746    4,539,843    4,471,746
                    
Fully diluted weighted average common shares outstanding   4,471,746    4,471,746    4,539,843    4,471,746

 

See Accompanying Notes to Condensed Consolidated Financial Statements.

 

 F-2 

 

SKINVISIBLE, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(UNAUDITED)

 

     Common Stock                     
     Shares      Amount     Additional Paid-in Capital     Shares Payable    Accumulated Deficit     Total Stockholders'  Deficit
 Balance, December 31, 2020   4,539,843   $4,540   $30,241,089         $(34,700,408)  $(4,454,779)
 Net loss                           (435,505)   (435,505)
 Balance, March 31, 2021   4,539,843   $4,540   $30,241,089         $(35,135,913)  $(4,890,284)
 Derivative liability written off to APIC               53,305                53,305
 Net loss                           (268,514)   (268,514)
 Balance, June 30, 2021   4,539,843   $4,540   $30,294,394         $(35,404,427)  $(5,105,493)
                              
 Balance, December 31, 2019   4,471,746   $4,472   $30,181,555    59,602   $(33,252,796)  $(3,007,167)
 Net loss                           (430,084)   (430,084)
 Balance, March 31, 2020   4,471,746    4,472    30,181,555    59,602    (33,682,880)   (3,437,251)
 Net loss                           (312,793)   (312,793)
 Balance, June 30, 2020   4,471,746   $4,472   $30,181,555    59,602   $(33,995,673)  $(3,750,044)

 

See Accompanying Notes to Condensed Consolidated Financial Statements.

 

 F-3 

 

SKINVISIBLE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

   Six months ended
   June 30, 2021  June 30, 2020
       
Cash flows from operating activities:         
Net loss  $(704,019)  $(742,877)
Adjustments to reconcile net loss to net cash provided (used) by operating activities:         
Depreciation and amortization   8,548    19,681
Amortization of debt discount   330,134    330,274
Gain on settlement of debt   83,553    
Loss on change in derivative liability   243,974     
Changes in operating assets and liabilities:         
Decrease (Increase) in prepaid assets   (750)   (1,625)
Decrease (Increase) in accounts receivable   1,591    (4,395)
Increase in accounts payable and accrued liabilities   120,077    164,557
Decrease in due from related party   (7,616)     
Increase in accrued interest   262,657    270,849
Net cash provided by operating activities   171,043    36,464
          
Cash flows from investing activities:         
Purchase of fixed and intangible assets   (20,864)   (14,673)
Net cash used in investing activities   (20,864)   (14,673)
          
Cash flows from financing activities:         
Payments on related party loans   (200)   (15,000)
Proceeds from related party loans         27,000
Payments on loans payable   (65,900)     
Payments on convertible notes payable   (65,000)     
Net cash provided by (used in) financing activities   (131,100)   12,000
          
Net change in cash   19,079    33,791
          
Cash, beginning of period   35,896    1,298
          
Cash, end of period  $54,975   $35,089
          
Supplemental disclosure of cash flow information:         
Cash paid for interest  $     $  
Cash paid for tax  $     $  
          
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:         
Non-cash investing and financing activities:         

 

See Accompanying Notes to Condensed Consolidated Financial Statements. 

 

 F-4 

 

SKINVISIBLE, INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2021

 

1.       DESCRIPTION OF BUSINESS AND HISTORY

 

Description of business – Skinvisible, Inc., (referred to as the “Company”) is focused on the development and manufacture and sales of innovative topical, transdermal and mucosal polymer-based delivery system technologies and formulations incorporating its patent-pending formula/process for combining hydrophilic and hydrophobic polymer emulsions. The technologies and formulations have broad industry applications within the pharmaceutical, over-the-counter, personal skincare and cosmetic arenas. Additionally, the Company’s non-dermatological formulations, offer solutions for a broad spectrum of markets women’s health, pain management, and others. The Company maintains executive and sales offices in Las Vegas, Nevada.

 

History – The Company was incorporated in Nevada on March 6, 1998, under the name of Microbial Solutions, Inc. The Company underwent a name change on February 26, 1999, when it changed its name to Skinvisible, Inc. The Company’s subsidiary’s name of Manloe Labs, Inc. was also changed to Skinvisible Pharmaceuticals, Inc.

  

Skinvisible, Inc., together with its subsidiaries, shall herein be collectively referred to as the “Company.”

 

2.       BASIS OF PRESENTATION AND GOING CONCERN

 

Basis of presentation – The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X , and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements on Form 10-K filed with the SEC on April 15, 2021. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.

 

The condensed consolidated balance sheet at December 31, 2020 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles in the U.S. for complete 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. For the six months ended June 30, 2021, the Company had a net loss of $704,019. The Company has also incurred cumulative net losses of $35,404,427 since its inception and requires capital for its contemplated operational and marketing activities to take place. These factors, among others, raise  substantial doubt about the Company’s ability to continue as a going concern within one year from the date of filing.

 

Managements plans for the Company are to generate the necessary funding through licensing of its core products and to seek additional debt and equity funding. However, the Company’s ability to generate the necessary funds through licensing or 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. The consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties. 

 

COVID-19 Pandemic

 

In December 2019, an outbreak of a novel strain of coronavirus originated in Wuhan, China (“COVID-19”) and has since spread worldwide, including to the Unites States, posing public health risks that have reached pandemic proportions (the “COVID-19 Pandemic”). The COVID-19 Pandemic poses a threat to the health and economic wellbeing of our employees, customers and vendors. Like most businesses world-wide, the COVID-19 Pandemic has impacted the Company financially; however, management cannot presently predict the scope and severity with which COVID-19 will impact our business, financial condition, results of operations and cash flows.

 

 F-5 

 

3.       SUMMARY OF SIGNIFICANT POLICIES

 

This summary of significant accounting policies of Skinvisible Inc. is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and notes are representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the consolidated financial statements.  

 

Principles of consolidation

The consolidated financial statements include the accounts of the Company and its subsidiary Skinvisible Pharmaceuticals Inc. All significant intercompany balances and transactions have been eliminated.

 

Use of estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include estimates used to review the Company’s, impairments and estimations of long-lived assets, allowances for uncollectible accounts, inventory valuation, and the valuations of non-cash capital stock issuances. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

Cash and cash equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments and short-term instruments with original maturities of three months or less to be cash equivalents.

 

Fair Value of financial instruments

The carrying value of cash, accounts payable and accrued expenses, and debt approximate their fair values because of the short-term nature of these instruments. Management believes the Company is not exposed to significant interest or credit risks arising from these financial instruments. The carrying amount of the Company’s convertible debt is also stated at a fair value of $4,587,284 since the stated rate of interest approximates market rates.

 

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable.

 

  Level 1 Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets. The Company uses Level 1 measurements to value the transactions when it issues shares, warrants, options and debt with beneficial conversion features.

 

  Level 2 Quoted prices for similar assets and liabilities in active markets; quoted prices included for identical or similar assets and liabilities that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. These are typically obtained from readily available pricing sources for comparable instruments. The Company did not rely on any Level 2 measurements for any of its transactions in the periods included in these financial statements.

 

  Level 3 Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best information available in the circumstances. The Company did not rely on any Level 3 measurements for any of its transactions in the periods included in these financial statements.

 

Financial assets and liabilities measured at fair value on a recurring basis are summarized below as of June 30, 2021:

 

   Level 1  Level 2  Level 3  Total
Liabilities                   
Derivative Financial Instruments  $     $     $190,669   $190,669

 

As of June 30, 2021, the Company’s used the following assumptions to value the derivative liabilities using the for Binomial-Lattice valuation model. Stock price was $0.16, term 0.25 years, risk-free discount rate of 0.25% and volatility of 363.08%

 

The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs:

 

   Amount
Balance December 31, 2020  $  
Derivative reclassed to additional paid in capital   (53,305)
Change in fair market value of derivative liabilities   243,974
Balance June 30, 2021  $190,669

 

 F-6 

Revenue recognition

We recognize revenue in accordance with generally accepted accounting principles as outlined in the Financial Accounting Standard Board's (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts with Customers, which requires that five steps be followed in evaluating revenue recognition: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfied a performance obligation.

 

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. Revenue from royalty sales is recognized at the point of time in which sales occur which is determined by the receipt of royalty statements.

 

Distribution and license rights sales – We also recognize revenue from distribution and license rights when no further contingencies or material performance obligations are warranted, and thereby have earned the right to receive and retain reasonably assured payments. Revenue from distribution and license rights is recognized immediately meeting milestones and once the Company is reasonably assured of payment.

 

The Company has made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by governmental authorities that are collected by the Company from its customers (sales and use taxes, value added taxes, some excise taxes).

 

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 June 30, 2021 and December 31, 2020, the Company had not recorded a reserve for doubtful accounts.

 

Intangible assets

The Company follows Financial Accounting Standard Board’s (FASB) Codification Topic 350-10 (“ASC 350-10”), “Intangibles – Goodwill and Other”. According to this statement, intangible assets with indefinite lives are no longer subject to amortization, but rather an annual assessment of impairment by applying a fair-value based test.  Under ASC 350-10, the carrying value of assets are calculated at the lowest level for which there are identifiable cash flows.

 

Stock-based compensation

The Company follows the guidelines in FASB Codification Topic ASC 718-10 “Compensation-Stock Compensation”, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values.

  

Earnings (loss) per share

The Company reports earnings (loss) per share in accordance with FASB Codification Topic ASC 260-10 “Earnings Per Share”, Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share has not been presented for the year ending December 31, 2020, since the effect of the assumed exercise of options and warrants to purchase common shares (common stock equivalents) would have an anti-dilutive effect. There are 30,779,400 additional shares issuable in connection with outstanding options, warrants, stock payable and convertible debts as of June 30, 2021.  The shares issuable under each instrument is as follows; 100,000 shares issuable for options, 60,000 shares issuable for warrants, and 30,619,400 shares issuable under convertible notes.

  

Recently issued accounting pronouncements

On Aug. 5, 2020, the FASB issued ASU 2020-06, “Debt – Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) which eliminated several legacy accounting models to simplify the accounting for convertible instruments. In addition, the ASU modified the derivative scope exception guidance to remove certain criteria and clarify others, which likely will result in more instruments being equity classified or having more embedded features remain embedded. ASU 2020-06 is effective for public companies during interim and annual reporting periods beginning after December 15, 2021.

  

 F-7 

 

4.       INTANGIBLE AND OTHER ASSETS

 

Patents and trademarks and other intangible assets are capitalized at their historical cost and are amortized over their estimated useful lives. As of June 30, 2021, intangible assets total $282,590, net of $120,144 of accumulated amortization. As of December 31, 2020, intangible assets total $261,726, net of $111,596 of accumulated amortization.

 

Amortization expense for the six months ended June 30, 2021 and 2020 was $8,548 and $19,681, respectively. License and distributor rights were acquired by the Company in January 1999 and provide exclusive use distribution of polymers and polymer based products. The Company has a non-expiring term on the license and distribution rights. Accordingly, the Company annually assesses this license and distribution rights for impairment and has determined that no impairment write-down is considered necessary as of June 30, 2021.

 

5.        RELATED PARTY TRANSACTIONS

 

During the six months ended June 30, 2021 and 2020, $0 and $27,000 was advanced by an officer and $200 and $15,000 was repaid, respectively .

 

As of June 30, 2021 and December 31, 2020, $52,299 and $52,499 in advances remained due to officers of the company, respectively. All other related party notes have been extinguished or re-negotiated as convertible notes. (See note 9 for additional details.)

 

Convertible Notes Related Party

 

Convertible Notes Payable Related Party consists of the following:   June 30, 2021   December 31, 2020
On June 30, 2019, the Company renegotiated accrued salaries, accrued interest, unpaid reimbursements, cash advances, and outstanding convertible notes for its two officers. Under the terms of the agreements, all outstanding notes totaling $2,464,480, accrued interest of $966,203, accrued salaries of $617,915, accrued vacation of $64,423, unpaid reimbursements of $11,942 and cash advances of $110,245 were converted to promissory notes convertible into common stock with a warrant feature. The convertible promissory notes are unsecured, due five years from issuance, and bear an interest rate of 10%. At the investor’s option until the repayment date, the note may be converted to shares of the Company’s common stock at a fixed price of $0.20 per share along with warrants to purchase one share for every two shares issued at the exercise price of $0.30 per share for three years after the conversion date.
 
The Company has determined the value associated with the beneficial conversion feature in connection with the notes to be $3,369,244. The aggregate beneficial conversion feature associated with these notes has been accreted and charged to interest expenses as a financing expense in the amount of $105,590 and $304,926 during the six months ended June 30, 2021 and 2020, respectively.
  $ 4,235,209     $ 4,235,209
Unamortized debt discount     (2,142,844 )     (2,447,770)
Total, net of unamortized discount   $ 2,092,365     $ 1,787,439

 

 F-8 

 

6.       NOTES PAYABLE

 

Secured debt offering

During the period from May 22, 2013 and December 31, 2018, the Company entered into a 9% notes payable to nineteen investors and received proceeds of $552,000. The notes were due two years from the anniversary date of execution. The Notes are secured by the US Patent rights granted for the Company's Sunscreen Products: US patent number #8,128,913: "Sunscreen Composition with Enhanced UV-A Absorber Stability and Methods.”

 

During the three months ended June 30, 2021, the Company entered to settlement agreements to settle various notes. As part of the settlement the principal balance of the note was settled for cash and all interest due through the date of settlement was forgiven. As of June 30, 2021, the Company has recorded a gain on settlement of the debt of $38,375 associated with the settlement of $65,900 of principal. As of June 30, 2021, $486,100 of the outstanding notes payable are past due and in default and have been classified as current notes payable.

 

7.       CONVERTIBLE NOTES PAYABLE

 

Convertible Notes Payable consists of the following:   June 30,   December 31,
    2021   2020
$40,000 face value 9% secured notes payable to investors, due in 2015. At the investor’s option until the repayment date, the note and related interest may be converted to shares of the Company’s common stock a discount of 90% of the current share price after the first anniversary of the note. The notes are secured by the accounts receivable of a license agreement the Company has with Womens Choice Pharmaceuticals, LLC on its proprietary prescription product, ProCort®. The notes have reached maturity and are now in default, under the notes default provisions the entire balance is now due upon demand. The Company evaluated the conversion feature of the note and concluded that it represents an embedded derivative. As of June 30, 2021, the fair value of the derivative is $49,205. The Company determined the derivative was immaterial as of December 31, 2020. The notes have reached maturity and are now in default, under the notes default provisions the entire balance is now due upon demand.     40,000       40,000
Original issue discount                
Unamortized debt discount                
Total, net of unamortized discount     40,000       40,000
               
On October 26, 2015 the Company issued a $135,000 face value 9% unsecured notes payable to investors, due October 26, 2017. At the investor’s option until the repayment date, the note and related interest may be converted to shares of the Company’s common stock a discount of 90% of the current share price after the first anniversary of the note. The notes are secured by the accounts receivable of a license agreement the Company has with Womens Choice Pharmaceuticals, LLC on its proprietary prescription product, ProCort®. The note has reached maturity and is in default. The Company evaluated the conversion feature of the note and concluded that it represents an embedded derivative. During the three months ended June 30, 2021, the Company made payments of $50,000 on the balance of the note. The fair value of the embedded derivative associated with the payments was $43,305 and was recorded to additional paid in capital. As of June 30, 2021, the fair value of the derivative is $104,561. The Company determined the derivative was immaterial as of December 31, 2020. The note has reached maturity and is now in default, under the notes default provisions the entire balance is now due upon demand.     85,000       135,000
Unamortized debt discount                
Total, net of unamortized discount     85,000       135,000
               
On February 17, 2016, the Company entered into a convertible promissory note pursuant to which it borrowed $20,000. Interest under the convertible promissory note is 9% per annum, and the principal and all accrued but unpaid interest is due on February 17, 2018. The note is convertible at any time following 90 days after the issuance date at noteholders option into shares of our common stock at a variable conversion price of 90% of the average five day market price of our common stock during the 5 trading days prior to the notice of conversion, subject to adjustment as described in the note. The holder’s ability to convert the note, however, is limited in that it will not be permitted to convert any portion of the note if the number of shares of our common stock beneficially owned by the holder and its affiliates, together with the number of shares of our common stock issuable upon any full or partial conversion, would exceed 4.99% of the Company’s outstanding shares of common stock. The note has reached maturity and is in default. The Company evaluated the conversion feature of the note and concluded that it represents an embedded derivative. As of June 30, 2021, the fair value of the derivative is $24,603. The Company determined the derivative was immaterial as of December 31, 2020. The notes have reached maturity and are now in default, under the notes default provisions the entire balance is now due upon demand.     20,000       20,000
Unamortized debt discount                
Total, net of unamortized discount     20,000       20,000

 

 F-9 

 

On August 11, 2016, the Company entered into a convertible promissory note pursuant to which it borrowed $15,000. Interest under the convertible promissory note is 9% per annum, and the principal and all accrued but unpaid interest is due on August 11, 2018. The note is convertible into shares of our common stock at a variable conversion price of 90% of the average market price of our common stock during the 5 trading days prior to the notice of conversion, subject to adjustment as described in the note. The note has reached maturity and is in default. The Company evaluated the conversion feature of the note and concluded that it represents an embedded derivative. During the three months ended June 30, 2021, the Company made payments of $15,000 on the balance of the note and the note was paid in full. The fair value of the embedded derivative associated with the payments was $10,000 and was recorded to additional paid in capital.                15,000
Unamortized debt discount                   
Total, net of unamortized discount                         15,000
               
On January 27, 2017, the Company entered into a convertible promissory note pursuant to which it borrowed $10,000. Interest under the convertible promissory note is 9% per annum, and the principal and all accrued but unpaid interest is due on January 27, 2019. The note is convertible into shares of our common stock at a variable conversion price of 90% of the average market price of our common stock during the 5 trading days prior to the notice of conversion, subject to adjustment as described in the note. The note has reached maturity and is in default. The Company evaluated the conversion feature of the note and concluded that it represents an embedded derivative. As of June 30, 2021, the fair value of the derivative is $12,301. The Company determined the derivative was immaterial as of December 31, 2020. The notes have reached maturity and are now in default, under the notes default provisions the entire balance is now due upon demand.     10,000       10,000
Unamortized debt discount                
Total, net of unamortized discount     10,000       10,000
               
On June 30, 2019, the Company renegotiated accrued salaries and interest and outstanding convertible notes for a former employee. Under the terms of the agreements, all outstanding notes totaling $224,064, accrued interest of $119,278, accrued salaries of $7,260 and accrued vacation of $1,473 were converted to a promissory note convertible into common stock with a warrant feature. The convertible promissory note is unsecured, due five years from issuance, and bears an interest rate of 10%. At the noteholder’s option until the repayment date, the note may be converted to shares of the Company’s common stock at a fixed price of $0.20 per share along with warrants to purchase one share for every two shares issued at the exercise price of $0.30 per share for three years after the conversion date.
 
The Company has determined the value associated with the beneficial conversion feature in connection with the notes to be $280,076 as valued under the intrinsic value method. The aggregate beneficial conversion feature has been accreted and charged to interest expenses in the amount of $25,208 and $25,348 for the six months ended June 30, 2021 and 2020, respectively.
    352,075       352,075
Unamortized debt discount     (178,268 )     (203,476)
Total, net of unamortized discount     173,807       148,599

Total Convertible Notes   $ 328,807     $ 368,599
Current portion:     155,000       220,000
Total long-term convertible notes   $ 173,807     $ 148,599

 

 F-10 

 

8.       COMMITMENTS AND CONTINGENCIES

 

License Agreement

 

On October 17, 2019, Skinvisible entered an Exclusive License Agreement with Quoin pursuant to which Skinvisible 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 Skinvisible a license fee of $1,000,000 and a royalty percentage on all net sales on the licensed products subject to adjustment in certain situations. The agreement also requires that Quoin make certain milestone payments to Skinvisible upon achieving regulatory approval milestones for certain drug products.

 

The agreement is 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 on December 31, 2019. 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, as amended under the same terms to expire on September 30, 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 (USO $1,000,000) (''License Fee''). To date, Licensee has paid three hundred ninety-two thousand five hundred US dollars (USD $392,500) of this fee as part of the First Half Payment of the License Fee, $125,000 of which was paid in the year ending December 31, 2020 and $267,500 in the six months ended June 30, 2021. The balance due of the First Half Payment is one hundred seven thousand five hundred US dollars (USD $107,500) which was received on July 7, 2021. A further payment of two hundred and fifty thousand dollars ($250,000) is due no later than ten (10) business days after receipt by Licensee of additional funding from Altium Capital which coincides with the approval from the SEC on Quoin’s merger with a NASDAQ listed company, expected in September. The remaining balance of two hundred and fifty thousand dollars ($250,000) will be paid on December 31, 2021.

 

As of June 30, 2021the Company has recognized $392,500 under the agreement including $267,500 during the six months ended June 30, 2021. The balance of licensing fee has not yet been recognized as it is not yet probable that substantially all of the consideration will be collected.

 

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, the agreement was further amended to provide additional assignment rights for its hand sanitizer products in exchange for $100,000. 

 

9.       STOCK OPTIONS AND WARRANTS

 

The following is a summary of option activity during the six months ended June 30, 2021.

 

   Number of Shares  Weighted Average Exercise Price
Balance, December 31, 2020   100,000    1.51
          
Options granted and assumed           
Options expired   (70,000)     
Options canceled           
Options exercised           
          
Balance, June 30, 2021   30,000    1.51

 

As of June 30, 2021, all stock options outstanding are exercisable.

 

Stock warrants -

 

The following is a summary of warrants activity during the year ended June 30, 2021.

 

   Number of Shares  Weighted Average Exercise Price
Balance, December 31, 2020   60,000   $1.11
          
Warrants granted and assumed           
Warrants expired           
Warrants canceled           
Warrants exercised           
          
Balance, June 30, 2021   60,000   $1.11

 

As of June 30, 2021, all stock warrants outstanding are exercisable.

  

 10.       STOCKHOLDERS’ DEFICIT

 

The Company is authorized to issue 200,000,000 shares of $0.001 par value common stock. The Company had 4,539,843 and 4,539,843 issued and outstanding shares of common stock as of June 30, 2021 and December 31, 2020, respectively.

 

11.       SUBSEQUENT EVENTS

 

In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to June 30, 2021 to the date these financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements.  

 

 F-11 

 

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements

 

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 SEC.

 

Overview

 

COVID-19

 

The full extent of the impact of the COVID-19 pandemic on our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict at the present time. In an effort to contain COVID-19 or slow its spread, governments around the world have enacted various measures, including orders to close all businesses not deemed “essential,” isolate residents to their homes or places of residence, and practice social distancing when engaging in essential activities. We anticipate that these actions and the global health crisis caused by COVID-19 will negatively impact business activity across the globe. While we have not observed any noticeable impact on our revenue related to these conditions in the past fiscal year, or through the date of this filing, we cannot estimate the impact COVID-19 will have in the future as business and consumer activity decelerates across the globe.

 

We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required by federal, state, local or foreign authorities, or that we determine are in the best interests of our employees, customers, partners and stockholders. It is not clear what the potential effects any such alterations or modifications may have on our business, including the effects on our customers, partners, or vendors, or on our financial results.

 

Recent Developments

 

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 September 30, 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 (USO $1,000,000) (''License Fee''). To date, Licensee has paid three hundred ninety-two thousand five hundred US dollars (USD $392,500) of this fee as part of the First Half Payment of the License Fee. The balance due of the First Half Payment is one hundred seven thousand five hundred US dollars (USD $107,500) which was received on July 7. A further payment of two hundred and fifty thousand dollars ($250,000) is due no later than ten (10) business days after receipt by Licensee of additional funding from Altium Capital which coincides with the approval from the SEC on Quoin’s merger with a NASDAQ listed company, expected in September. The remaining balance of two hundred and fifty thousand dollars ($250,000) will be paid on December 31, 2021.

 

 4 

 

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

(iii)       Regulatory approval in either 1· the US or EU, whichever happens first: $5,000,000

 

Results of Operations for the Three and Six Months Ended June 30, 2021 and 2020

 

Revenues

 

Our revenue, which we combine from product sales, royalties on patent licenses and license fees (product development fees), was $287,099 for the three months ended June 30, 2021, an increase from $119,970 for the same period ended June 30, 2020. Our revenue was $299,150 for the six months ended June 30, 2021, an increase from $136,022 for the same period ended June 30, 2020.

 

The revenue for both periods in 2021 was mainly from license fees with Quoin and the revenue for both periods in 2020 was mainly from license fees with Ovation. We hope to generate more revenues from our licenses with Quoin and Ovation for the rest of the year.

 

Gross Profit

 

We had $3,300 in cost of revenues for the six months ended June 30, 2021, no cost of revenues for the three months ended June 30, 2021, and no cost of revenues for the three and six months ended June 30, 2020, so our gross profit was $287,099 and $295,850 for the three and six months ended June 30, 2021, respectively, as compared with gross profit of $119,970 and $136,022 for the three and six months ended June 30, 2020, respectively.

 

We had some product sales resulting in a reduced gross profit for 2021 as compared with 2020. We hope that our gross profit increases in 2021 with more revenues from our licenses with Quoin and Ovation expected for the rest of the year, which do not have a cost of revenue component.

 

Operating Expenses

 

Operating expenses decreased to $127,579 for the three months ended June 30, 2021 from $132,732 for the same period ended June 30, 2020. Operating expenses decreased to $247,457 for the six months ended June 30, 2021 from $278,776 for the same period ended June 30, 2020.

 

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

 

Our selling, general and administrative expenses for the six months ended June 30, 2021 consisted mainly of accrued salaries and wages of $165,845, audit and accounting of $32,993. In comparison, our selling general and administrative expenses for the six months ended June 30, 2020 consisted mainly of accrued salaries and wages of $87,942 and audit and accounting of $16,610.

 

Other Expenses

 

We had other expenses of $428,034 for the three months ended June 30, 2021, as compared with other expenses of $300,031 for the three months ended June 30, 2020. We had other expenses of $752,412 for the six months ended June 30, 2021, as compared with other expenses of $600,123 for the six months ended June 30, 2020.

 

Our other expenses for the three months ended June 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. Our other expenses for the six months ended June 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. Our other expenses for the six months ended June 30, 2020 consisted mainly of interest expense.

 

Net Loss

 

We recorded a net loss of $268,514 for the three months ended June 30, 2021, as compared with a net loss of $312,793 for the three months ended June 30, 2020. We recorded a net loss of $704,019 for the six months ended June 30, 2021, as compared with a net loss of $742,877 for the six months ended June 30, 2020.

 

 5 

 

Liquidity and Capital Resources

 

As of June 30, 2021, we had total current assets of $68,352 and total assets in the amount of $230,798. Our total current liabilities as of June 30, 2021 were $3,070,119. We had a working capital deficit of $3,001,767 as of June 30, 2021, compared with a working capital deficit of $2,668,871 as of December 31, 2020.

 

Operating activities provided $171,043 in cash for the six months ended June 30, 2021, as compared with $36,464 provided for the six months ended June 30, 2020. Our positive operating cash flow for each period was largely the result of the amortization of debt discount and changes in accounts payable and accrued liabilities and accrued interest.

 

We used cash of $20,864 and $14,673 in investing activities for the six months ended June 30, 2021 and 2020, respectively, for the purchase of fixed and intangible assets.

 

Cash flows used by financing activities during the six months ended June 30, 2021 amounted to $131,100, as compared with cash provided of $12,000 for the six months ended June 30, 2020. Our negative financing cash flow for the six months ended June 30, 2021 resulted from the repayments of debt. Our positive financing cash flow for the six months ended June 30, 2020 consisted of proceeds from related party loans, offset by repayments on the same.

 

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 $35,404,427 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 is unknown. 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 June 30, 2021, 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 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.

 

 6 

 

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 June 30, 2021, 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.

 

Item 3.Quantitative and Qualitative Disclosures About Market Risk

 

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

 

  Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2021. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2021, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of June 30, 2021, our disclosure controls and procedures were not effective: (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.

 

Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

 

Our company plans to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending December 31, 2021: (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 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.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during the six months ended June 30, 2021 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

 

 7 

 

PART II – OTHER INFORMATION

 

Item 1.Legal Proceedings

 

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

 

  Item 1A. Risk Factors

 

See risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2020 filed on April 15, 2021.

 

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

 

None

 

Item 3.Defaults upon Senior Securities

 

None

 

Item 4.Mine Safety Disclosures

 

Not applicable.

 

Item 5.Other Information

 

None

 

Item 6.Exhibits

 

Exhibit Number Description of Exhibit

31.1Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1Certification 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**The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 formatted in Extensible Business Reporting Language (XBRL).

**Provided herewith

 

 8 

SIGNATURES

 

Pursuant to the requirements of the Securities 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.

 

Date: August 16, 2021

 

By: /s/ Terry Howlett

Terry Howlett

Title: Chief Executive Officer, Chief Financial Officer and Director

 

 9 
GRAPHIC 2 image_001.jpg GRAPHIC begin 644 image_001.jpg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end EX-101.SCH 3 skvi-20210630.xsd XBRL SCHEMA FILE 00000001 - Document - Cover link:presentationLink link:calculationLink link:definitionLink 00000002 - Statement - CONSOLIDATED BALANCE SHEETS link:presentationLink link:calculationLink link:definitionLink 00000003 - Statement - CONSOLIDATED BALANCE SHEETS (Parenthetical) link:presentationLink link:calculationLink link:definitionLink 00000004 - Statement - CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) link:presentationLink link:calculationLink link:definitionLink 00000005 - Statement - CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (UNAUDITED) link:presentationLink link:calculationLink link:definitionLink 00000006 - Statement - CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) link:presentationLink link:calculationLink link:definitionLink 00000007 - Disclosure - 1. DESCRIPTION OF BUSINESS AND HISTORY link:presentationLink link:calculationLink link:definitionLink 00000008 - Disclosure - 2. BASIS OF PRESENTATION AND GOING CONCERN link:presentationLink link:calculationLink link:definitionLink 00000009 - Disclosure - 3. SUMMARY OF SIGNIFICANT POLICIES link:presentationLink link:calculationLink link:definitionLink 00000010 - Disclosure - 4. INTANGIBLE AND OTHER ASSETS link:presentationLink link:calculationLink link:definitionLink 00000011 - Disclosure - 5. RELATED PARTY TRANSACTIONS link:presentationLink link:calculationLink link:definitionLink 00000012 - Disclosure - 6. NOTES PAYABLE link:presentationLink link:calculationLink link:definitionLink 00000013 - Disclosure - 7. CONVERTIBLE NOTES PAYABLE link:presentationLink link:calculationLink link:definitionLink 00000014 - Disclosure - 9. STOCK OPTIONS AND WARRANTS link:presentationLink link:calculationLink link:definitionLink 00000015 - Disclosure - 10. STOCKHOLDERS’ DEFICIT link:presentationLink link:calculationLink link:definitionLink 00000016 - Disclosure - 11. SUBSEQUENT EVENTS link:presentationLink link:calculationLink link:definitionLink 00000017 - Disclosure - 2. BASIS OF PRESENTATION AND GOING CONCERN (Policies) link:presentationLink link:calculationLink link:definitionLink 00000018 - Disclosure - 3. SUMMARY OF SIGNIFICANT POLICIES (Policies) link:presentationLink link:calculationLink link:definitionLink 00000019 - Disclosure - 3. SUMMARY OF SIGNIFICANT POLICIES (Tables) link:presentationLink link:calculationLink link:definitionLink 00000020 - Disclosure - 5. RELATED PARTY TRANSACTIONS (Tables) link:presentationLink link:calculationLink link:definitionLink 00000021 - Disclosure - 7. CONVERTIBLE NOTES PAYABLE (Tables) link:presentationLink link:calculationLink link:definitionLink 00000022 - Disclosure - 9. STOCK OPTIONS AND WARRANTS (Tables) link:presentationLink link:calculationLink link:definitionLink 00000023 - Disclosure - 1. DESCRIPTION OF BUSINESS AND HISTORY (Details Narrative) link:presentationLink link:calculationLink link:definitionLink 00000024 - Disclosure - 2. BASIS OF PRESENTATION AND GOING CONCERN (Details Narrative) link:presentationLink link:calculationLink link:definitionLink 00000025 - Disclosure - 3. SUMMARY OF SIGNIFICANT POLICIES - Fair Value of Financial Instruments (Details) link:presentationLink link:calculationLink link:definitionLink 00000026 - Disclosure - 3. SUMMARY OF SIGNIFICANT POLICIES - Fair Value of Drivative Asset (Details) link:presentationLink link:calculationLink link:definitionLink 00000027 - Disclosure - 3. SUMMARY OF SIGNIFICANT POLICIES (Details Narrative) link:presentationLink link:calculationLink link:definitionLink 00000028 - Disclosure - 4. INTANGIBLE AND OTHER ASSETS (Details Narrative) link:presentationLink link:calculationLink link:definitionLink 00000029 - Disclosure - 5. RELATED PARTY TRANSACTIONS - Schedule of Convertible Notes Payable Related Party (Details) link:presentationLink link:calculationLink link:definitionLink 00000030 - Disclosure - 5. RELATED PARTY TRANSACTIONS (Details Narrative) link:presentationLink link:calculationLink link:definitionLink 00000031 - Disclosure - 7. CONVERTIBLE NOTES PAYABLE - Schedule of Convertible Notes Payable (Details) link:presentationLink link:calculationLink link:definitionLink 00000032 - Disclosure - 6. NOTES PAYABLE (Details Narrative) link:presentationLink link:calculationLink link:definitionLink 00000033 - Disclosure - 8. STOCK OPTIONS AND WARRANTS - Schedule of Option Summary (Details) link:presentationLink link:calculationLink link:definitionLink 00000034 - Disclosure - 8. STOCK OPTIONS AND WARRANTS - Schedule of Warrant Summary (Details) link:presentationLink link:calculationLink link:definitionLink 00000035 - Disclosure - 10. STOCKHOLDERS’ DEFICIT (Details Narrative) link:presentationLink link:calculationLink link:definitionLink EX-101.CAL 4 skvi-20210630_cal.xml XBRL CALCULATION FILE EX-101.DEF 5 skvi-20210630_def.xml XBRL DEFINITION FILE EX-101.LAB 6 skvi-20210630_lab.xml XBRL LABEL FILE Equity Components [Axis] Common Stock [Member] Additional Paid-in Capital [Member] Stock Payable [Member] Retained Earnings [Member] Investment Type [Axis] Amount [Member] Level 1 Level 2 Level 3 Options [Member] Warrants [Member] Convertible Notes [Member] Related Party Transaction [Axis] Convertible Notes Payable [Member] Debt Instrument [Axis] Related Party Notes Payable One Nineteen Notes Payable Past Due [Member] Scenario [Axis] Convertible Note One Convertible Note 1 Convertible Note 10 [Member] Convertible Note Two Convertible Note 2 Convertible Note 3 Convertible Note Four Convertible Note 4 Convertible Note Five Convertible Note 5 Convertible Note Six Convertible Note 6 Total Comvertible Notes Total Convertible Notes Current [Member] Total Long Term Convertible Notes Current [Member] Derivative Instrument [Axis] Excercise Price One [Member] Option Exercise [Member] Excercise Price Two [Member] Warrants Expired [Member] Cover [Abstract] Document Type Amendment Flag Amendment Description Document Registration Statement Document Annual Report Document Quarterly Report Document Transition Report Document Shell Company Report Document Shell Company Event Date Document Period Start Date Document Period End Date Document Fiscal Period Focus Document Fiscal Year Focus Current Fiscal Year End Date Entity File Number Entity Registrant Name Entity Central Index Key Entity Primary SIC Number Entity Tax Identification Number Entity Incorporation, State or Country Code Entity Address, Address Line One Entity Address, Address Line Two Entity Address, Address Line Three Entity Address, City or Town Entity Address, State or Province Entity Address, Country Entity Address, Postal Zip Code Country Region City Area Code Local Phone Number Extension Written Communications Soliciting Material Pre-commencement Tender Offer Pre-commencement Issuer Tender Offer Title of 12(b) Security No Trading Symbol Flag Trading Symbol Security Exchange Name Title of 12(g) Security Security Reporting Obligation Annual Information Form Audited Annual Financial Statements Entity Well-known Seasoned Issuer Entity Voluntary Filers Entity Current Reporting Status Entity Interactive Data Current Entity Filer Category Entity Small Business Entity Emerging Growth Company Elected Not To Use the Extended Transition Period Document Accounting Standard Other Reporting Standard Item Number Entity Shell Company Entity Public Float Entity Bankruptcy Proceedings, Reporting Current Entity Common Stock, Shares Outstanding Documents Incorporated by Reference [Text Block] Statement of Financial Position [Abstract] ASSETS Current assets Cash Accounts receivable Prepaid expense and other current assets Total current assets Patents and trademarks, net Total assets LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities Accounts payable and accrued liabilities Accounts payable related party Accrued interest payable Loans from related party Loans payable Convertible notes payable Derivative liability Total current liabilities Convertible notes payable related party, net of unamortized discount of $2,142,844 and $2,447,770 respectively Convertible notes payable, net of unamortized debt discount of $178,268 and $203,476, respectively Total liabilities Stockholders' deficit Common stock; $0.001 par value; 200,000,000 shares authorized; 4,539,843 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively Additional paid-in capital Accumulated deficit Total stockholders' deficit Total liabilities and stockholders' deficit Convertible Notes Payable, related party, net of unamortized discount Convertible Notes Payable, net of unamortized debt discount Common stock, par value Common stock, shares authorized Common stock, shares issued Common stock, shares outstanding Income Statement [Abstract] Revenues Revenues related party Cost of revenues Gross profit Operating expenses Depreciation and amortization Selling general and administrative Total operating expenses Income (loss) from operations Other income and (expense) Interest expense Loss on change in derivative liability Gain on settlement of debt Total other expense Net income (loss) Basic loss per common share Fully diluted loss per common share Basic weighted average common shares outstanding Fully diluted weighted average common shares outstanding Statement [Table] Statement [Line Items]  Beginning balance, value Beginning balance, shares  Net loss  Derivative liability written off to APIC Derivative liability written off to APIC, shares  Ending balance, value Ending balance, shares Statement of Cash Flows [Abstract] Cash flows from operating activities: Net loss Adjustments to reconcile net loss to net cash provided (used) by operating activities: Amortization of debt discount Loss on change in derivative liability Changes in operating assets and liabilities: Decrease (Increase) in prepaid assets Decrease (Increase) in accounts receivable Increase in accounts payable and accrued liabilities Decrease in due from related party Increase in accrued interest Net cash provided by operating activities Cash flows from investing activities: Purchase of fixed and intangible assets Net cash used in investing activities Cash flows from financing activities: Payments on related party loans Proceeds from related party loans Payments on loans payable Payments on convertible notes payable Net cash provided by (used in) financing activities Net change in cash Cash, beginning of period Cash, end of period SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest Cash paid for tax Non-cash investing and financing activities: Accounting Policies [Abstract] 1. DESCRIPTION OF BUSINESS AND HISTORY 2. BASIS OF PRESENTATION AND GOING CONCERN 3. SUMMARY OF SIGNIFICANT POLICIES Goodwill and Intangible Assets Disclosure [Abstract] 4. INTANGIBLE AND OTHER ASSETS Related Party Transactions [Abstract] 5. RELATED PARTY TRANSACTIONS Debt Disclosure [Abstract] 6. NOTES PAYABLE 7. CONVERTIBLE NOTES PAYABLE Share-based Payment Arrangement [Abstract] 9. STOCK OPTIONS AND WARRANTS Equity [Abstract] 10. STOCKHOLDERS’ DEFICIT Subsequent Events [Abstract] 11. SUBSEQUENT EVENTS Going concern COVID-19 Pandemic Principles of consolidation Use of estimates Cash and cash equivalents Fair Value of financial instruments Revenue recognition Accounts Receivable Intangible assets Stock-based compensation Earnings (loss) per share Recently issued accounting pronouncements 3. SUMMARY OF SIGNIFICANT POLICIES - Fair Value of Financial Instruments 3. SUMMARY OF SIGNIFICANT POLICIES - Fair Value of Drivative Asset 5. RELATED PARTY TRANSACTIONS - Schedule of Convertible Notes Payable Related Party 7. CONVERTIBLE NOTES PAYABLE - Schedule of Convertible Notes Payable 8. STOCK OPTIONS AND WARRANTS - Schedule of Option Summary 8. STOCK OPTIONS AND WARRANTS - Schedule of Warrant Summary Date of Incorporation Net Income (Loss) Attributable to Parent Investment Income [Table] SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] Derivative Asset Derivative Asset, Current Other Additional Capital Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Gain (Loss) Included in Earnings New Accounting Pronouncements or Change in Accounting Principle [Line Items] Carrying amount of convertiblle debt at fair value Additional shares issuable Shares issuable Intangible Assets Accumulated Amortization Amortization Expense Schedule of Related Party Transactions, by Related Party [Table] Related Party Transaction [Line Items] Convertible Notes Payable, Value Accrued Interest Accrued salaries Accrued vacation Unpaid reimbursements Cash advances Conversion terms Debt instrument, term Debt instrument, interest rate Beneficial conversion feature on convertible debt Financing Expense Convertible notes payable Unamortized debt discount Total, net of Unamortized Discount Officer Advanced Repayment to officer Due to Officers Schedule of Short-term Debt [Table] Short-term Debt [Line Items] Interest Rate Discount Of Current Share Price Fair value of the derivative Convertible note payable Original issue discount Unamortized debt discount Total Net of Unamortized Discount Due date for unpaid interest Payment of Note Conversion terms Outstanding notes value Interest Expense Current portion: Total long-term convertible notes Notes payable, interest rate Notes payable, proceeds Notes payable, term Debtor Reorganization Items, Gain (Loss) on Settlement of Other Claims, Net Debt settlement of principal Loans Payable Offsetting Assets [Table] Summary of Investment Holdings [Line Items] Balance, number of shares Balance, weighted average exercise price Options granted and assumed, number of shares Options granted and assumed, weighted average exercise price Options expired, number of shares Options expired, weighted average exercise price Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price Balance, number of shares Balance, weighted average exercise price Warrants granted, number of shares Warrants granted, weighted average exercise price Warrants expired, number of shares Warrants expired, weighted average exercise price Warrants cancelled , number of shares Warrants cancelled, weighted average exercise price Warrants exercised, number of shares Warrants exercised, weighted average exercise price Common Stock, Shares Authorized Common Stock, Par Value Common Stock, Issued Assets, Current Assets Liabilities, Current Liabilities Gross Profit Operating Expenses Other Expenses Stockholders' Equity Attributable to Parent Shares, Issued Net Cash Provided by (Used in) Operating Activities Payments to Acquire Other Productive Assets Net Cash Provided by (Used in) Investing Activities Proceeds from Collection of (Payments to Fund) Long-term Loans to Related Parties Payments for Loans Repayments of Notes Payable Net Cash Provided by (Used in) Financing Activities Cash and Cash Equivalents, at Carrying Value Debt Instrument, Unamortized Discount, Current Common Stock, Terms of Conversion Class of Warrant or Right, Outstanding Class of Warrant or Right, Exercise Price of Warrants or Rights EX-101.PRE 7 skvi-20210630_pre.xml XBRL PRESENTATION FILE