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SKINVISIBLE INC
0001085277
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<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Description of business</u> – Skinvisible,
Inc., (referred to as the “Company”) is focused on the development and manufacture 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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>History</u> – Skinvisible, Inc. (referred
to as 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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Skinvisible, Inc. together with its subsidiary
shall herein be collectively referred to as the “Company”.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Going concern</u> – 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. The Company has incurred cumulative net losses of $23,601,123 since its inception
and requires capital for its contemplated operational and marketing activities to take place. The Company’s ability to raise
additional capital through the future issuances of common stock 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 ability to successfully resolve these factors raises substantial
doubt about the Company’s ability to continue as a going concern. The consolidated financial statements of the Company do
not include any adjustments that may result from the outcome of these aforementioned uncertainties.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Principles of consolidation</u> –
The consolidated financial statements include the accounts of the Company and its subsidiary. All significant intercompany balances
and transactions have been eliminated.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Use of estimates</u> – The preparation
of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Cash and cash equivalents</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For purposes of the statement of cash flows,
the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or
less to be cash equivalents.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Fair Value of Financial Instruments</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying amounts reflected in the balance
sheets for cash, accounts payable and accrued expenses approximate the respective fair values due to the short maturities of these
items.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As required by the Fair Value Measurements
and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the
inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2)
inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable
inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The three levels of the fair value hierarchy
are described below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 1: Unadjusted quoted prices in active
markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 2: Quoted prices in markets that are
not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 3: Prices or valuation techniques that
require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Revenue recognition</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"><u>Product sales</u> – 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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-right: 0; margin-left: 0.5in"><u>Royalty sales
</u>– The Company also recognizes royalty revenue from licensing its patented product formulations only when earned, when
no further contingencies or material performance obligations are warranted, and thereby have earned the right to receive and retain
reasonably assured payments.</p>
<p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-right: 0; margin-left: 0.5in"><u>Distribution and
license rights sales</u> – The Company also recognizes revenue from distribution and license rights only when earned (and
are amortized over a five year period), when no further contingencies or material performance obligations are warranted, and thereby
have earned the right to receive and retain reasonably assured payments.</p>
<p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-right: 0; margin-left: 0.5in"><u>Costs of Revenue
</u>– 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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Accounts Receivable</u> – 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 September 30, 2013, the Company
had not recorded a reserve for doubtful accounts. The Company has $1,000,000 in convertible notes payable which are secured by
the accounts receivable of a license agreement the Company has with Women's Choice Pharmaceuticals, LLC on its proprietary prescription
product, ProCort®.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Inventory</u> – Substantially all
inventory consists of finished goods and are valued based upon first-in first-out ("FIFO") cost, not in excess of market. The determination
of whether the carrying amount of inventory requires a write-down is based on an evaluation of inventory.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Goodwill and intangible assets</u> –
The Company follows Financial Accounting Standard Board’s (FASB) Codification Topic 350-10 (“ASC 350-10”), “<i>Intangibles
– Goodwill and Other</i>”. According to this statement, goodwill and 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. Fair value for
goodwill is based on discounted cash flows, market multiples and/or appraised values as appropriate. Under ASC 350-10, the carrying
value of assets are calculated at the lowest level for which there are identifiable cash flows.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Income taxes</u> – The Company accounts
for its income taxes in accordance with FASB Codification Topic ASC 740-10, “<i>Income Taxes</i>”, which requires recognition
of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Stock-based compensation</u> – The
Company follows the guidelines in FASB Codification Topic ASC 718-10 “<i>Compensation-Stock Compensation</i>”, 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 a Employee Stock Purchase Plan based on the estimated
fair values.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Stock based compensation expense recognized
under ASC 718-10 for the nine months ended September 30, 2013 and 2012 totaled $21,200 and $0 respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Earnings (loss) per share</u> – The
Company reports earnings (loss) per share in accordance with FASB Codification Topic ASC 260-10 “<i>Earnings Per Share</i>”,
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 since the effect of the assumed exercise of options and warrants to purchase common shares (common stock equivalents)
would have an anti-dilutive effect.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Description of business</u> – Skinvisible,
Inc., (referred to as the “Company”) is focused on the development and manufacture 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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>History</u> – Skinvisible, Inc. (referred
to as 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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Skinvisible, Inc. together with its subsidiary
shall herein be collectively referred to as the “Company”.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Going concern</u> – 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. The Company has incurred cumulative net losses of $23,601,123 since its inception
and requires capital for its contemplated operational and marketing activities to take place. The Company’s ability to raise
additional capital through the future issuances of common stock 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 ability to successfully resolve these factors raises substantial
doubt about the Company’s ability to continue as a going concern. The consolidated financial statements of the Company do
not include any adjustments that may result from the outcome of these aforementioned uncertainties.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Principles of consolidation</u> –
The consolidated financial statements include the accounts of the Company and its subsidiary. All significant intercompany balances
and transactions have been eliminated.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Use of estimates</u> – The preparation
of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Cash and cash equivalents</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For purposes of the statement of cash flows,
the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or
less to be cash equivalents.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Fair Value of Financial Instruments</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying amounts reflected in the balance
sheets for cash, accounts payable and accrued expenses approximate the respective fair values due to the short maturities of these
items.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As required by the Fair Value Measurements
and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the
inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2)
inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable
inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The three levels of the fair value hierarchy
are described below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 1: Unadjusted quoted prices in active
markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 2: Quoted prices in markets that are
not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 3: Prices or valuation techniques that
require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Revenue recognition</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"><u>Product sales</u> – 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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-right: 0; margin-left: 0.5in"><u>Royalty sales
</u>– The Company also recognizes royalty revenue from licensing its patented product formulations only when earned, when
no further contingencies or material performance obligations are warranted, and thereby have earned the right to receive and retain
reasonably assured payments.</p>
<p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-right: 0; margin-left: 0.5in"><u>Distribution and
license rights sales</u> – The Company also recognizes revenue from distribution and license rights only when earned (and
are amortized over a five year period), when no further contingencies or material performance obligations are warranted, and thereby
have earned the right to receive and retain reasonably assured payments.</p>
<p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-right: 0; margin-left: 0.5in"><u>Costs of Revenue
</u>– 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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Accounts Receivable</u> – 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 September 30, 2013, the Company
had not recorded a reserve for doubtful accounts. The Company has $1,000,000 in convertible notes payable which are secured by
the accounts receivable of a license agreement the Company has with Women's Choice Pharmaceuticals, LLC on its proprietary prescription
product, ProCort®.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Inventory</u> – Substantially all
inventory consists of finished goods and are valued based upon first-in first-out ("FIFO") cost, not in excess of market. The determination
of whether the carrying amount of inventory requires a write-down is based on an evaluation of inventory.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Goodwill and intangible assets</u> –
The Company follows Financial Accounting Standard Board’s (FASB) Codification Topic 350-10 (“ASC 350-10”), “<i>Intangibles
– Goodwill and Other</i>”. According to this statement, goodwill and 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. Fair value for
goodwill is based on discounted cash flows, market multiples and/or appraised values as appropriate. Under ASC 350-10, the carrying
value of assets are calculated at the lowest level for which there are identifiable cash flows.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Income taxes</u> – The Company accounts
for its income taxes in accordance with FASB Codification Topic ASC 740-10, “<i>Income Taxes</i>”, which requires recognition
of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Stock-based compensation</u> – The
Company follows the guidelines in FASB Codification Topic ASC 718-10 “<i>Compensation-Stock Compensation</i>”, 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 a Employee Stock Purchase Plan based on the estimated
fair values.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Stock based compensation expense recognized
under ASC 718-10 for the nine months ended September 30, 2013 and 2012 totaled $21,200 and $0 respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Earnings (loss) per share</u> – The
Company reports earnings (loss) per share in accordance with FASB Codification Topic ASC 260-10 “<i>Earnings Per Share</i>”,
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 since the effect of the assumed exercise of options and warrants to purchase common shares (common stock equivalents)
would have an anti-dilutive effect.</p>
1998-03-06
1000000
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Fixed assets consist of the following as of
September 30, 2013 and December 31, 2012:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 45%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">September 30, 2013</td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid">December 31, 2012</td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; width: 54%">Machinery and equipment</td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%"> </td>
<td style="text-align: right; width: 20%">48,163</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">45,208</td>
<td style="text-align: left; width: 1%"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify">Furniture and fixtures</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">113,635</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">113,635</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify">Computers, equipment and software</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">38,540</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">38,105</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify">Leasehold improvements</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">12,569</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">12,569</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt">Lab equipment</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">113,461</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">113,461</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify">Total</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">326,368</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">322,978</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt">Less: accumulated depreciation</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">(322,477</td>
<td style="text-align: left; padding-bottom: 1pt">)</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">(318,519</td>
<td style="text-align: left; padding-bottom: 1pt">)</td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt">Fixed assets, net of accumulated depreciation</td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left"> </td>
<td style="border-bottom: black 2.5pt double; text-align: right">3,891</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">4,459</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Depreciation expense for the nine months ended
September 30, 2013 and 2012 was $1,003 and $943, respectively.</p>
<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 45%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center">September 30, 2013</td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="border-bottom: black 1pt solid">December 31, 2012</td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; width: 54%">Machinery and equipment</td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%"> </td>
<td style="text-align: right; width: 20%">48,163</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">45,208</td>
<td style="text-align: left; width: 1%"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify">Furniture and fixtures</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">113,635</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">113,635</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify">Computers, equipment and software</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">38,540</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">38,105</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify">Leasehold improvements</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">12,569</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">12,569</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt">Lab equipment</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">113,461</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">113,461</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify">Total</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">326,368</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">322,978</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt">Less: accumulated depreciation</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">(322,477</td>
<td style="text-align: left; padding-bottom: 1pt">)</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">(318,519</td>
<td style="text-align: left; padding-bottom: 1pt">)</td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt">Fixed assets, net of accumulated depreciation</td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left"> </td>
<td style="border-bottom: black 2.5pt double; text-align: right">3,891</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">4,459</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td></tr>
</table>
48163
45208
113635
113635
38540
38105
12569
12569
113461
113461
326368
322978
1003
943
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Patents and trademarks are capitalized at its
historical cost and are amortized over their useful lives. As of September 30, 2013, patents and trademarks total $584,898, net
of $239,208 of accumulated amortization. Amortization expense for the nine months ended September 30, 2013 and 2012 was $26,003
and $43,039, respectively. The Company has secured $1,000,000 in notes payable with its 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".</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">License and distributor rights (“agreement”)
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 September
30, 2013.</p>
<p style="margin: 0pt"></p>
584898
239208
26003
43039
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 16, 2013, the company terminated
its licensing agreement with Panalab dated January 23, 2008. The agreement provided Panalab the right to distribute, market, sell
and promote Skinvisible’s proprietary formulas made with Invisicare and Adapalene through-out Panalabs assigned territory.
Panalab had failed to sell or sub-license the products in the territory, thereby not fulfilling the conditions as set forth in
the agreement and allowing for immediate termination of the agreement. As a result of this cancelation, unearned revenue of $19,792
has been recognized as revenue during the nine months ended September 30, 2013.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="margin: 0pt"></p>
19792
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following is a summary of option activity
during the nine months ended September 30, 2013.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 45%; border-collapse: collapse; font-size: 10pt">
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: center; padding-left: 0.75pt"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">Number of Shares</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: center">Weighted Average Exercise Price</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.75pt; width: 54%">Balance, December 31, 2012</td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%"> </td>
<td style="text-align: right; width: 20%">9,400,000</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">0.05</td>
<td style="text-align: left; width: 1%"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.75pt">Options granted and assumed</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">300,000</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">0.03</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.75pt">Options expired</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">400,000</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">0.05</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.75pt">Options canceled</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 0.75pt">Options exercised</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 0.75pt">Balance, September 30, 2013</td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left"> </td>
<td style="border-bottom: black 2.5pt double; text-align: right">9,300,000</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">0.05</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of September 30, 2013, 9,300,000 stock options
are exercisable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 23, 2013, the Company granted
stock options for 300,000 shares of its common stock with a strike price of $0.03. The stock options were exercisable upon grant
and have a life of 5 years. The stock options were valued at $8,400 using the Black-Scholes option pricing model based upon the
following assumptions: term of 5 years, risk free interest rate of 1.33%, a dividend yield of 0% and volatility rates of 443%.
The Company recorded an expense of $8,400 for the nine months ended September 30, 2013.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Stock warrants -</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following is a summary of warrants activity
during the nine months ended September 30, 2013.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 45%; border-collapse: collapse; font-size: 10pt">
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: center; padding-left: 0.75pt"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">Number of Shares</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: center">Weighted Average Exercise Price</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.75pt; width: 54%">Balance, December 31, 2012</td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%"> </td>
<td style="text-align: right; width: 20%">6,765,200</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">0.06</td>
<td style="text-align: left; width: 1%"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.75pt">Warrants granted and assumed</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">471,280</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">0.06</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.75pt">Warrants expired</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">2,562,500</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">0.05</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.75pt">Warrants canceled</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 0.75pt">Warrants exercised</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 0.75pt">Balance, September 30, 2013</td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left"> </td>
<td style="border-bottom: black 2.5pt double; text-align: right">4,673,980</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">0.06</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">All warrants outstanding as of September 30,
2013 are exercisable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">271,280 warrants were issued during the three
months ended March 31, 2013 as part of a series of convertible notes with attached warrants. The warrants issued allow the holder
to purchase one share for every two shares issued upon conversion at an exercise price of $0.07 cents per share.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 22, 2013 200,000 warrants were issued
as compensation for consulting services. The warrants issued allow the holder to purchase one share at an exercise price of $0.04
cents per share.</p>
<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 45%; border-collapse: collapse; font-size: 10pt">
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: center; padding-left: 0.75pt"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">Number of Shares</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: center">Weighted Average Exercise Price</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.75pt; width: 54%">Balance, December 31, 2012</td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%"> </td>
<td style="text-align: right; width: 20%">9,400,000</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">0.05</td>
<td style="text-align: left; width: 1%"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.75pt">Options granted and assumed</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">300,000</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">0.03</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.75pt">Options expired</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">400,000</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">0.05</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.75pt">Options canceled</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 0.75pt">Options exercised</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 0.75pt">Balance, September 30, 2013</td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left"> </td>
<td style="border-bottom: black 2.5pt double; text-align: right">9,300,000</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">0.05</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" align="center" style="width: 45%; border-collapse: collapse; font-size: 10pt">
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: center; padding-left: 0.75pt"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">Number of Shares</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: center">Weighted Average Exercise Price</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.75pt; width: 54%">Balance, December 31, 2012</td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%"> </td>
<td style="text-align: right; width: 20%">6,765,200</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">0.06</td>
<td style="text-align: left; width: 1%"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.75pt">Warrants granted and assumed</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">471,280</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">0.06</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.75pt">Warrants expired</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">2,562,500</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">0.05</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.75pt">Warrants canceled</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 0.75pt">Warrants exercised</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">—</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 0.75pt">Balance, September 30, 2013</td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left"> </td>
<td style="border-bottom: black 2.5pt double; text-align: right">4,673,980</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">0.06</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td></tr>
</table>
9300000
9400000
0.05
0.05
300000
.05
400000
0.05
4673980
6765200
0.06
0.06
471280
0.06
2562500
0.05
9300000
.03
8400
0.0133
0
8400
200000
271280
.04
.07
2013-05-22
P5Y
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 23, 2013, the Company granted
stock options for 300,000 shares of its common stock to an employee. See Note 5 for additional information.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three months ended September 30,
2013 the Company advanced $40,143 to employees of the Company for business related expenses. The advance is non-interest bearing
and due upon demand.</p>
<p style="margin: 0pt"></p>
300000
<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 60%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify">Convertible Notes Payable consists of the following:</td>
<td> </td>
<td colspan="3" style="text-align: center">September 30,</td>
<td> </td>
<td colspan="3" style="text-align: center">December 31,</td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1pt; font-weight: bold"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center; font-weight: bold">2013</td>
<td style="padding-bottom: 1pt; font-weight: bold"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center; font-weight: bold">2012</td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt; width: 54%">$52,476 face value,10% unsecured note payable to an investor, note interest and payment are due on demand. The note could be converted to option rights for Skinvisible, Inc. shares at ten cents per share ($0.10), these rights expired January 12, 2010. Note is currently in default, no penalties occur due to default. <br />
<br />During the nine months ended September 30, 2013, the Company made $12,000 in cash payment to reduce the note balance.</td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">40,476</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">52,476</td>
<td style="text-align: left; width: 1%"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt">$27,000 face value 10% unsecured $27,000 notes payable to investors, due October, 2012. At the investor’s written request, until the repayment date the note may be converted at the investors option to shares of the Company’s common stock at a fixed price of $0.05 per share along with additional warrants to purchase one share for every two shares issued at the exercise price of $0.07 per share for two years after the conversion date. The Company has determined the value associated with the beneficial conversion feature in connection with the notes to be $19,385. The aggregate beneficial conversion feature has been fully accreted and was charged to general and administrative expenses during the year ended December 31, 2012. The beneficial conversion feature is valued under the intrinsic value method. Interest due to lender can also be converted at a rate of ($0.05) per share into warrants. <br /> <br />During the nine months ended September 30, 2013, the Company made a $2,000 cash payment to reduce the note balance and converted principal of $15,000 plus accrued interest of $1,277 to 542,560 shares of common stock and granted 271,280 warrants with the exercise price of $0.07 per shares for two years.</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">10,000</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">27,000</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">$1,000,000 face value 9% notes payable to investors, due two years from the anniversary date of execution. The notes mature at various times from September 2014 to
December 2014. 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 Women's Choice Pharmaceuticals, LLC on its proprietary prescription product, ProCort®. The Company has determined the value associated with the beneficial conversion feature in connection with the notes and interest to be $111,110. The aggregate original issue discount feature has been accreted and charged to general and administrative expenses as a financing expense in the amount of $40,476 and $8,910 during the periods ending September 30, 2013 and December 31, 2012, respectively. The original issue discount feature is valued under the intrinsic value method.</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">1,000,000</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">1,000,000</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">1,050,476</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">1,079,476</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.5in">Original issue discount</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">111,110</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">111,110</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 0.5in">Unamortized debt discount</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">(61,724</td>
<td style="text-align: left; padding-bottom: 1pt">)</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">(102,200</td>
<td style="text-align: left; padding-bottom: 1pt">)</td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: left; padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">1,099,862</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">1,088,386</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 60%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify">Convertible Notes Payable consists of the following:</td>
<td> </td>
<td colspan="3" style="text-align: center">September 30,</td>
<td> </td>
<td colspan="3" style="text-align: center">December 31,</td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1pt; font-weight: bold"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center; font-weight: bold">2013</td>
<td style="padding-bottom: 1pt; font-weight: bold"> </td>
<td colspan="3" style="border-bottom: black 1pt solid; text-align: center; font-weight: bold">2012</td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt; width: 54%">$52,476 face value,10% unsecured note payable to an investor, note interest and payment are due on demand. The note could be converted to option rights for Skinvisible, Inc. shares at ten cents per share ($0.10), these rights expired January 12, 2010. Note is currently in default, no penalties occur due to default. <br />
<br />During the nine months ended September 30, 2013, the Company made $12,000 in cash payment to reduce the note balance.</td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">40,476</td>
<td style="text-align: left; width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="text-align: left; width: 1%">$</td>
<td style="text-align: right; width: 20%">52,476</td>
<td style="text-align: left; width: 1%"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-left: 5.4pt">$27,000 face value 10% unsecured $27,000 notes payable to investors, due October, 2012. At the investor’s written request, until the repayment date the note may be converted at the investors option to shares of the Company’s common stock at a fixed price of $0.05 per share along with additional warrants to purchase one share for every two shares issued at the exercise price of $0.07 per share for two years after the conversion date. The Company has determined the value associated with the beneficial conversion feature in connection with the notes to be $19,385. The aggregate beneficial conversion feature has been fully accreted and was charged to general and administrative expenses during the year ended December 31, 2012. The beneficial conversion feature is valued under the intrinsic value method. Interest due to lender can also be converted at a rate of ($0.05) per share into warrants. <br /> <br />During the nine months ended September 30, 2013, the Company made a $2,000 cash payment to reduce the note balance and converted principal of $15,000 plus accrued interest of $1,277 to 542,560 shares of common stock and granted 271,280 warrants with the exercise price of $0.07 per shares for two years.</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">10,000</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">27,000</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">$1,000,000 face value 9% notes payable to investors, due two years from the anniversary date of execution. The notes mature at various times from September 2014 to
December 2014. 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 Women's Choice Pharmaceuticals, LLC on its proprietary prescription product, ProCort®. The Company has determined the value associated with the beneficial conversion feature in connection with the notes and interest to be $111,110. The aggregate original issue discount feature has been accreted and charged to general and administrative expenses as a financing expense in the amount of $40,476 and $8,910 during the periods ending September 30, 2013 and December 31, 2012, respectively. The original issue discount feature is valued under the intrinsic value method.</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">1,000,000</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">1,000,000</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">1,050,476</td>
<td style="text-align: left; padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">1,079,476</td>
<td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: justify; padding-left: 0.5in">Original issue discount</td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">111,110</td>
<td style="text-align: left"> </td>
<td> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">111,110</td>
<td style="text-align: left"> </td></tr>
<tr style="background-color: white; vertical-align: bottom">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 0.5in">Unamortized debt discount</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">(61,724</td>
<td style="text-align: left; padding-bottom: 1pt">)</td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: black 1pt solid; text-align: left"> </td>
<td style="border-bottom: black 1pt solid; text-align: right">(102,200</td>
<td style="text-align: left; padding-bottom: 1pt">)</td></tr>
<tr style="background-color: rgb(204,238,204); vertical-align: bottom">
<td style="text-align: left; padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">1,099,862</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: black 2.5pt double; text-align: left">$</td>
<td style="border-bottom: black 2.5pt double; text-align: right">1,088,386</td>
<td style="text-align: left; padding-bottom: 2.5pt"> </td></tr>
</table>
52476
27000
1000000
0.1
0.1
0.09
0.05
0.05
0.10
0.07
0.07
2010-01-12
12000
2000
15000
15000
1277
1277
300000
542560
271280
0.07
P2Y
19385
40476
8910
2012-10-01
2014-08-01
0.05
0.05
0.9
44476
52476
10000
27000
1000000
1000000
111110
111110
61724
102200
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 31, 2011, the Company re-negotiated
accrued salaries and interest for three employees. Under the terms of the agreements, the notes dated before December 31, 2010
and all salaries not previously converted were converted to promissory notes convertible into common stock with a warrant feature.
The $802,864 face value 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 $0.04 per share along with additional warrants to purchase one share for every two shares issued at the exercise
price of $0.06 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 $538,295 for the notes negotiated on December 31, 2010, $45,557 for the notes
negotiated on July 1, 2011 and $1,123,078 for the notes negotiated December 31, 2011. The beneficial conversion feature is valued
under the intrinsic value method. The aggregate beneficial conversion feature has been accreted and charged to general and administrative
expenses as a financing expense in the amount of $124,818 for the nine months ended September 30, 2013. As of September 30, 2013,
the aggregate convertible notes payable are $568,638, net of unamortized beneficial conversion feature of $541,965.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 30, 2012, the Company re-negotiated
accrued salaries and interest for three employees. Under the terms of the agreements, the notes dated before July 1, 2011 and all
salaries not previously converted were converted to promissory notes convertible into common stock with a warrant feature. The
$325,023 face value 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 $0.04
per share along with additional warrants to purchase one share for every two shares issued at the exercise price of $0.06 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 $209,809. The beneficial conversion feature is valued under the intrinsic value method. The
aggregate beneficial conversion feature has been accreted and charged to general and administrative expenses as a financing expense
in the amount of $32,161 for the nine months ended September 30, 2013. As of September 30, 2013, the aggregate convertible notes
payable are $169,080, net of unamortized beneficial conversion feature of $155,942.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 30 and 31, 2012, the Company re-negotiated
accrued salaries and interest for three employees. Under the terms of the agreements, $182,083 of related party notes accrued interest
and salaries not previously converted were converted to promissory notes convertible into common stock with a warrant feature.
The $182,083 face value 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 $0.03 per share along with additional warrants to purchase one share for every two shares issued at the exercise
price of $0.04 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 $182,083. The beneficial conversion feature is valued under the intrinsic
value method. The aggregate beneficial conversion feature has been accreted and charged to general and administrative expenses
as a financing expense in the amount of $27,223 for the nine months ended September 30, 2013. As of September 30, 2013, the aggregate
convertible notes payable are $27,236, net of unamortized beneficial conversion feature of $154,847.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 30, 2013, the Company re-negotiated
accrued salaries and interest for two employees. Under the terms of the agreements, $106,153 of related party notes accrued interest
and salaries not previously converted were converted to promissory notes convertible into common stock with a warrant feature.
The $106,153 face value 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 $0.03 per share along with additional warrants to purchase one share for every two shares issued at the exercise
price of $0.04 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 $70,768. The beneficial conversion feature is valued under the intrinsic
value method. The aggregate beneficial conversion feature will be accreted and charged to general and administrative expenses as
a financing expense As of September 30, 2013, the aggregate convertible notes payable are $38,950, net of unamortized beneficial
conversion feature of $67,202.</p>
<p style="margin: 0pt"></p>
802864
325023
182083
106153
P5Y
P5Y
P5Y
P5Y
0.1
0.1
0.1
0.1
0.04
0.04
0.03
0.03
1
1
1
1
0.06
0.06
0.04
0.04
P3Y
P3Y
P3Y
P3Y
538295
45557
1123078
209809
182083
70768
124818
32161
27223
<p style="margin: 0pt"><font style="font: 10pt Times New Roman, Times, Serif">On May 22, 2013 the Company approved a financing
plan to offer accredited investors up to $1,000,000 in secured promissory notes. During the nine months ended September 30, 2013
the Company entered into twenty-four <font style="color: black">9% notes payable to investors</font> and received total proceeds
of 1,000,000. The notes are<font style="color: black"> due two years from the anniversary date of execution. </font>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".</font></p>
<p></p>
2013-05-22
1000000
.09
1000000
P2Y
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is authorized to issue 200,000,000
shares of $0.001 par value common stock. The Company has 110,729,969 and 109,507,409 issued and outstanding shares of common stock
as of September 30, 2013 and December 31, 2012, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September 30,
2013, the Company issued a total of 680,000 shares of common stock, with a fair value of $16,100 for the conversion of debts totaling
$18,000. The Company recorded a gain of $3,100 on extinguishment of debts.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 11, 2013, the Company issued a
total of 300,000 shares of common stock for conversion of principal on convertible notes payable of $15,000 plus $1,277 accrued
interest. The Company issued an additional 242,560 shares of common stock for this conversion of convertible notes payable, which
the shares were fair valued at $7,277.</p>
<p style="margin: 0pt"></p>
680000
16100
18000
2013-02-11
242560
7277
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Lease obligations</u> – The Company
has operating leases for its offices. Future minimum lease payments under the operating leases for the facilities as of September
30, 2013 are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Fiscal year ending 2013 14,050</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Fiscal year ending 2014 33,156</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Fiscal year ending 2015 5,526</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Rental expense, resulting from operating lease
agreements, approximated $14,942 and $40,434 for the nine months ended September 30, 2013 and 2012, respectively.</p>
<p style="margin: 0pt"></p>
14942
40434
14050
33156
5526
<p style="margin: 0pt"><font style="font: 10pt Times New Roman, Times, Serif">The Company has evaluated events subsequent to the
balance sheet through the issuance date of these financial statements in accordance with FASB ASC 855 and has determined that
there are no such events that would require adjustment to, or disclosure in, the financial statements.</font></p>
<p></p>
4.43
40143
134
7661