Skinvisible, Inc 10-Q for FY2021 Q2

Skinvisible, Inc. (SKVI)

10-Q 2021-08-16 For: 2021-06-30

Added on April 06, 2026

About this 10-Q

Skinvisible, Inc filed this 10-Q on August 16, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $287.1K; up 3090.0% from $9000 a year earlier
Net loss: $268.51K; compared with a net loss of $312.79K a year earlier

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☒	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

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

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

	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

	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


	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


	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)

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

	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


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


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

	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

	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

By:	/s/ Terry Howlett
Name:	Terry Howlett
Title:	Principal Executive Officer, Principal Financial Officer and Director
Date:	August 16, 2021