See
Accompanying Notes to Condensed Consolidated Financial Statements.
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.
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
|
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.
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
|
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
|
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
|
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.