Skinvisible, Inc 10-K for FY2019

Skinvisible, Inc. (SKVI)

10-K 2020-05-14 For: 2019-12-31

Added on April 06, 2026

About this 10-K

Skinvisible, Inc filed this 10-K on May 14, 2020, covering the fiscal year ended December 31, 2019 (FY2019).

Headline figures

Fiscal year ended December 31, 2019, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $43.17K; down 37.8% from $69.35K a year earlier
Net loss: $1.7M; compared with net income of $158.34K a year earlier

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[X]	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the fiscal year ended December 31, 2019

[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

	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)		(I.R.S. Employer Identification No.)
6320 South Sandhill Road, Suite 10, Las Vegas, NV		89120
(Address of principal executive offices)		(Zip Code)
Registrant’s telephone number: 702.433.7154
Securities registered under Section 12(b) of the Exchange Act:
Title of each class	Name of each exchange on which registered
None	not applicable
Securities registered under Section 12(g) of the Exchange Act:
Title of each class
Common Stock, par value $0.001

[ ] Large accelerated filer	[ ] Accelerated filer
[ ] Non-accelerated filer	[X] Smaller reporting company
	[ ] Emerging growth company

		Page
PART I
Item 1.	Business	3
Item 1A.	Risk Factors	8
Item 2.	Properties	14
Item 3.	Legal Proceedings	14
Item 4.	Mine Safety Disclosures	14
PART II
Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities	15
Item 6.	Selected Financial Data	17
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 8.	Financial Statements and Supplementary Data	20
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	21
Item 9A.	Controls and Procedures	21
Item 9B.	Other Information	21
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	22
Item 11.	Executive Compensation	24
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	26
Item 13.	Certain Relationships and Related Transactions, and Director Independence	26
Item 14.	Principal Accountant Fees and Services	27

Fiscal Year Ending December 31, 2019
Quarter Ended		High $		Low $
	December 31, 2019		0.188		0.02
	September 30, 2019		0.134		0.012
	June 30, 2019		0.33		0.20
	March 31, 2019		0.85		0.10

Fiscal Year Ending December 31, 2018
Quarter Ended		High $		Low $
	December 31, 2018		0.0253		0.002
	September 30, 2018		0.026		0.009
	June 30, 2018		0.0241		0.0121
	March 31, 2018		0.0503		0.0201

1.	we would not be able to pay our debts as they become due in the usual course of business, or;
2.	our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

	A	B	C
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and right	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (A))
Equity compensation plans approved by security holders	100,000	$1.51	39,000
Equity compensation plans not approved by security holders	72,200	$1.18	-
Total	172,200	$1.37	-

F-1	Report of Independent Registered Public Accounting Firm, May 14, 2020
F-2	Report of Independent Registered Public Accounting Firm, April 12, 2019
F-3	Consolidated Balance Sheets as of December 31, 2019 and 2018
F-4	Consolidated Statements of Operations for the years ended December 31, 2019 and 2018
F-5	Consolidated Statement of Stockholders’ Deficit for the years ended December 31, 2019 and 2018
F-6	Consolidated Statements of Cash Flows for the years ended December 31, 2019 and 2018
F-7	Notes to Consolidated Financial Statements

	December 31, 2019			December 31, 2018
ASSETS
Current assets
Cash	$	1,298		$	2,482
Accounts receivable		10,204			8,459
Inventory		—			17,417
Due from related party		—			1,145
Prepaid expense and other current assets		4,875			12,000
Total current assets		16,377			41,503

Fixed assets, net of accumulated depreciation of $0 and $327,432, respectively		—			118
Intangible and other assets:
Patents and trademarks, net of accumulated amortization of $533,415 and $493,918, respectively		165,385			178,767

Total assets	$	181,762		$	220,388

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued liabilities	$	597,291		$	944,380
Accounts payable related party		9,274			10,490
Accrued interest payable		491,601			1,169,293
Loans from related party		46,899			40,000
Loans payable		552,000			633,000
Convertible notes payable, net of unamortized debt discount of $254,450 and $78, respectively		317,625			219,922
Convertible notes payable related party, net of unamortized discount of $3,060,970 and $765,825 respectively		1,174,239			1,922,718
Total current liabilities		3,188,929			4,939,803

Total liabilities		3,188,929			4,939,803

Commitments and Contingencies (Note 14)		—			—

Stockholders' deficit
Common stock; $0.001 par value; 200,000,000 shares authorized; 4,471,746 and 2,896,689 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively		4,472			2,897
Shares payable		59,602			2,053,466
Additional paid-in capital		30,181,555			24,774,887
Accumulated deficit		(33,252,796	)		(31,550,665)
Total stockholders' deficit		(3,007,167	)		(4,719,415)

Total liabilities and stockholders' deficit	$	181,762		$	220,388

	Years Ended
	December 31, 2019			December 31, 2018

Revenues	$	43,166		$	69,347

Cost of revenues		17,551			20,701

Gross profit		25,615			48,646

Operating expenses
Depreciation and amortization		39,616			38,972
Selling general and administrative		525,776			607,609
Total operating expenses		565,392			646,581

Loss from operations		(539,777	)		(597,935)

Other income and (expense)
Other income - related party		15,400			4,807
Gain on sale of fixed assets, related party		75,000			—
Interest expense		(1,004,756	)		(1,013,162)
Gain on sale of Ovation Science Inc.		—			595,127
Loss on equity method investment		—			(21,810)
Gain (loss) on extinguishment of debt		(247,998	)		1,191,315
Total other income (expense)		(1,162,354	)		756,277

Net income (loss)	$	(1,702,131	)	$	158,342

Basic income (loss) per common share	$	(0.57	)	$	0.06

Fully diluted income (loss) per common share	$	(0.57	)	$	0.01

Basic weighted average common shares outstanding		3,008,885			2,863,094

Fully diluted weighted average common shares outstanding		3,008,885			30,091,501

	Common Stock
	Shares		Amount		Additional Paid-in Capital			Shares payable			Accumulated Deficit			Total Stockholders' Deficit
Balance, December 31, 2017	2,737,281	$	2,737	$	24,884,672		$	61,976		$	(31,709,007	)	$	(6,759,622)
Shares issued for accounts payable	95,453		96		136,549			1,991,490			—			2,128,135
Loss on debt modification	—		—		(320,756	)		—			—			(320,756)
Shares issued for settlement of debts	63,955		64		74,422						—			74,486
Net income	—		—		—			—			158,342			158,342
Balance, December 31, 2018	2,896,689	$	2,897	$	24,774,887		$	2,053,466		$	(31,550,665	)	$	(4,719,415)
Settlement of debt	—		—		—			7,028			—			7,028
Discount on convertible notes	—		—		3,649,320			—			—			3,649,320
Debt modification	—		—		(241,969	)		—			—			(241,969)
Issuance of shares payable	1,575,057		1,575		1,999,317			(2,000,892	)		—			—
Net loss	—		—		—			—			(1,702,131	)		(1,702,131)
Balance, December 31, 2019	4,471,746	$	4,472	$	30,181,555		$	59,602		$	(33,252,796	)	$	(3,007,167

	December 31, 2019		December 31, 2018

Machinery and equipment	$	—	$	48,163
Furniture and fixtures		—		113,635
Computers, equipment and software		—		39,722
Leasehold improvements		—		12,569
Lab equipment		—		113,461
Total		—		327,550
Less: accumulated depreciation		—		(327,432
Fixed assets, net of accumulated depreciation	$	—	$	118

	December 31, 2019		December 31, 2018

Shipping and Packing materials	$	—	$	8,611
Finished Goods		—		2,687
Raw Materials		—		6,119
Total	$	—	$	17,417

	Number of Shares			Weighted Average Exercise Price
Balance, December 31, 2018		161,000		$	1.50

Options granted and assumed		—			—
Options expired		(61,000	)		2.25
Options canceled		—			—
Options exercised		—			—

Balance, December 31, 2019		100,000			1. 51

Convertible Notes Payable consists of the following:	December 31,		December 31,
	2019		2018
$1,000,000 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 reach maturity and are now in default, under the notes default provisions the entire balance is now due upon demand. During the year ending December 31, 2018, the Company executed agreements with 14 of the noteholders that participated in the Company’s convertible debt offering. In accordance with the agreements the Company and the ivestors agreed to settle a total of $960,000 in outstanding principal and $219,172 in accrued interest in exchange for the issuance of 589,586 shares of the Company’s common stock. The company treated the loan modification as a debt repurchase.		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.		135,000		135,000
Unamortized debt discount		—		—
Total, net of unamortized discount		135,000		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		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		15,000			15,000
Unamortized debt discount		—			—
Total, net of unamortized discount		15,000			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 has determined the value associated with the beneficial conversion feature in connection with the notes negotiated on January 27, 2017 to be $2,138. The aggregate beneficial conversion feature has been accreted and charged to interest expenses as a financing expense in the amount of $78 during the year ended ended December 31, 2019. The beneficial conversion feature is valued under the intrinsic value method		10,000			10,000
Unamortized debt discount		—			(78)
Total, net of unamortized discount		10,000			9,922

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 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. The aggregate beneficial conversion feature will be accreted and charged to interest expenses as a financing expense. The beneficial conversion feature is valued under the intrinsic value method.		352,075			—
Unamortized debt discount		(254,450	)		—
Total, net of unamortized discount		97,625			—

	$	317,625		$	219,922

Convertible Notes Payable Related Party consists of the following:	December 31, 2019			December 31, 2018
Between December 30, 2012 and July 1, 2017, the Company re-negotiated accrued salaries and interest for its officers and several former employees. As of December 31, 2018, there were $2,688,544 face value unsecured promissory notes are unsecured, due five years from issuance, bearing an interest rate of 10%. At the investor’s option until the repayment date, the notes were convertible to shares of the Company’s common stock at fixed prices between $0.50 and $2.00 per share along with warrants to purchase one share for every two shares issued at the exercise prices between $1.00 and $3.00 per share for three years after the conversion date. 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 $227,314 during the year ended December 31, 2019. On June 30, 2019 all of the convertible notes payable were settled through the issuance of new convertible debts as described below and in Note 9.	$	—		$	2,688,544
Unamortized debt discount		—			(765,825)
Total, net of unamortized discount	$	—		$	1,922,718

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 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 $308,274 during the year ended December 31, 2019. The Company treated the loan settlement as a debt extinguishment per ASC 470 and recorded a corresponding loss on settlement of debt of $241,969.	$	4,235,209		$	—
Unamortized debt discount		(3,060,970	)		—
Total, net of unamortized discount	$	1,174,239		$	—

As of December 31,	2019			2018
Cumulative tax net operating losses (in millions)	$	13.2		$	12.7

Deferred tax asset (in millions)	$	2.8		$	2.7
Valuation allowance (in millions)		(2.8	)		(2.7)
Current taxes payable		—			—
Income tax expense	$	—		$	—

Name	Age	Position(s) and Office(s) Held
Terry Howlett	71	Chief Executive Officer, Chief Financial Officer, and Director
David St. James	47	Director

Name and principal position	Number of late reports	Transactions not timely reported	Known failures to file a required form
Terry Howlett CEO, CFO & Director	0	4	0
David St. James	0	0	0
Doreen McMorran	0	4	0

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OPTION AWARDS	STOCK AWARDS

Title of class	Name and address of beneficial owner ⁽¹⁾	Amount of beneficial ownership⁽²⁾	Percent of class⁽³⁾
Executive Officers & Directors:
Common	Terry Howlett⁽⁴⁾	10,886,535 shares	71.2%
Common	David St. James⁽⁵⁾	2,000	Less than 1%
Total of All Directors and Executive Officers:		10,888,535 shares	71.2%

More Than 5% Beneficial Owners:
Doreen McMorran⁽⁶⁾		10,289,510 shares	69.8%


	⁽²⁾	As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have "beneficial ownership" of any security that such person has the right to acquire within 60 days after such date.


	⁽³⁾	Except as otherwise indicated, all shares are owned directly and the percentage shown is based on 4,471,746 shares of common stock issued and outstanding on April 24. 2020.

	⁽⁴⁾	Includes 154,466 shares held in his name as indicated on our shareholder list, and 11,075,001 shares of common stock held in derivative securities.

	⁽⁵⁾	Includes an option to purchase 2,000 shares of common stock at $0.035 per share.



	⁽⁶⁾	Includes 36,000 shares held in her name as indicated on our shareholder list, and 10,350,510 shares of common stock held in derivative securities.

Noteholder	Date of Note	Interest	Maturity	Outstanding Principal as of December 31, 2019
Terry Howlett	June 30, 2019	10%	December 31, 2024	$2,108,519
Terry Howlett	June 30, 2019	10%	December 31, 2024	$68,788
Terry Howlett	December 31, 2019	10%	December 31, 2019	$25,899
				Accrued Interest as of December 31, 2019
Terry Howlett				$109,760

Financial Statements for the Year Ended December 31	Audit Services		Audit Related Fees		Tax Fees		Other Fees
2019	$	34,500	$	0	$	0	$	0
2018	$	35,000	$	0	$	0	$	0

Exhibit Number	Description
2.1	Agreement and Plan of Merger⁽⁵⁾
3.1	Articles of Incorporation ⁽¹⁾
3.2	Bylaws, as amended ⁽¹⁾
3.3	Certificate of Amendment⁽²⁾
3.4	Certificate of Change⁽⁶⁾
10.1	Termination and Release Agreement, dated October 17, 2019⁽⁷⁾
10.2	Promissory Note, dated October 8, 2015⁽⁴⁾
14.1	Code of Ethics ⁽³⁾
31.1	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification 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

	³	Incorporated by reference to Current report on Form 10-KSB filed with the Securities and Exchange Commission on April 14, 2005.
	⁴	Incorporated by reference to the Report on Form 8-K filed on August 8, 2018
	⁵	Incorporated by reference to the Report on Form 8-K filed on March 29, 2018
	⁶	Incorporated by reference to the Report on Form 8-K filed on January 22, 2019
	⁷	Incorporated by reference to the Report on Form 8-K filed on October 22, 2019

	Skinvisible, Inc.

By:	/s/ Terry Howlett
	Terry Howlett President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Director
	May 14, 2020

By:	/s/ Terry Howlett
	Terry Howlett
	President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer and Director
	May 14, 2020

By:	/s/ Terry Howlett
Name:	Terry Howlett
Title:	Principal Executive Officer, Principal Financial Officer and Director
Date:	May 14, 2020