10-K: Skinvisible Reports Deepening Losses Amid Promising Clinical Progress

Skinvisible Inc. reported a significant increase in net loss for fiscal year 2025, raising substantial doubt about its going concern status, despite ongoing positive clinical trial developments for its Invisicare technology.

Summary

• Skinvisible Inc. is a pharmaceutical research and development (R&D) company focused on its patented Invisicare polymer delivery system for topical products, out-licensing its technology globally.
• The company reported a net loss of $1,064,034 for the year ended December 31, 2025, a significant increase from a $565,654 net loss in 2024.
• Revenue remained flat at $20,000 for both 2025 and 2024.
• The company has an accumulated deficit of $41,010,176 as of December 31, 2025.
• A working capital deficit of $4,990,414 as of December 31, 2025, worsened from $3,637,658 in 2024.
• Substantial doubt exists about the company's ability to continue as a going concern due to recurring losses, negative cash flows, and insufficient cash to fund operations for the next twelve months.
• Key licensee Quoin Pharmaceuticals is making significant progress with QRX003 for Netherton Syndrome, receiving FDA Fast Track, Rare Pediatric Disease, and European Orphan Drug Designations.
• Quoin's clinical trials for QRX003 have shown positive initial data, a clean safety profile, and expanded to include teen and whole-body application studies.
• A new agreement with Ovation Science grants exclusive global rights to Invisicare with cannabinoids for topical/transdermal products, including new formulations for obesity and metabolic health.
• Skinvisible filed provisional patent applications in May and June 2024 for transdermal delivery of obesity drugs and glucose-controlling agents.
• Management identified a material weakness in internal controls over financial reporting related to inadequate segregation of duties, ineffective risk assessment, and insufficient written policies.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a highly speculative investment. While the clinical progress and new patent applications are promising, the severe financial distress, increasing losses, and going concern warning overshadow these developments, indicating extreme operational risk.

Positives

• Significant clinical and regulatory progress by licensee Quoin Pharmaceuticals for QRX003 (Netherton Syndrome) utilizing Invisicare technology.
• QRX003 received FDA Fast Track Designation, Rare Pediatric Disease (RPD) Designation, and European Medicines Agency (EMA) Orphan Drug Designation.
• FDA Type C meeting feedback suggests a single Phase 3 study may be sufficient for QRX003 marketing approval, potentially expediting the regulatory pathway.
• Quoin's clinical trials for QRX003 have demonstrated positive initial data and a clean safety profile, with reported significant clinical improvements in subjects.
• International expansion of QRX003 clinical trials to Saudi Arabia and the United Kingdom.
• New agreement with Ovation Science for exclusive global rights to Invisicare with cannabinoids for topical/transdermal products, including formulations targeting obesity and metabolic health.
• Filed provisional patent applications in May and June 2024 for transdermal delivery of obesity drugs and glucose-controlling agents, aiming for enhanced efficacy and reduced side effects.
• Operating expenses decreased to $516,315 in 2025 from $609,589 in 2024.
• Net cash used in operating activities improved to $38,410 in 2025 from $69,834 used in 2024.

Negatives

• Net loss significantly increased to $1,064,034 for the year ended December 31, 2025, compared to $565,654 in 2024.
• Revenue remained flat at $20,000 for both 2025 and 2024, indicating a lack of revenue growth.
• Accumulated deficit grew to $41,010,176 as of December 31, 2025.
• Working capital deficit worsened to $4,990,414 as of December 31, 2025, from $3,637,658 in 2024.
• Cash balance is critically low at $2,620 as of December 31, 2025, down from $10,336 in 2024.
• Substantial doubt exists about the company's ability to continue as a going concern.
• Management identified a material weakness in internal controls over financial reporting, citing inadequate segregation of duties, ineffective risk assessment, and insufficient written policies.
• Remediation of internal control weaknesses is dependent on securing additional financing, which is uncertain.
• The company has only two employees, including the CEO/CFO, which contributes to internal control weaknesses and reliance on key personnel.
• The company has not paid cash dividends and does not anticipate doing so in the foreseeable future.
• The stock is thinly traded on the OTCQB and subject to "Penny Stock" rules, which may reduce trading activity and liquidity.

Risks

• Investors may lose their entire investment due to the company's financial status and going concern doubt.
• Failure to raise additional capital or generate sufficient cash flows could reduce competitiveness and adversely affect operations.
• Inability to generate revenues by implementing the business plan could lead to a complete loss of investment.
• Products or licensed products may not be deemed desirable or suitable for purchase, limiting demand and revenues.
• Slowdown in demand for products due to economic conditions, competitive environment, inability to anticipate consumer preferences, or issues with production/delivery.
• Inability to compete effectively due to competitors having longer operating histories, greater resources, and name recognition.
• Reliance on third parties for manufacturing introduces risks such as product failure, limited availability of quality ingredients, poor quality manufacturing, and new competition.
• Exposure to product liability claims, including claims of contamination, improper labeling, or inadequate warnings.
• Adverse publicity within the skin care markets could negatively affect business and financial performance.
• Exposure to local business risks in different countries due to international transactions, including legal/regulatory requirements, tax consequences, nationalization risk, and political instability.
• Potential for government regulations or laws to increase operational costs or decrease income generation.
• Risk of infringing on third-party intellectual property rights, leading to litigation, damages, or inability to commercialize products.
• Inability to manage growth effectively could strain management, operational, and financial resources.
• Dependence on continuing to hire and retain qualified personnel, including the CEO/CFO and technical personnel.
• Inability to attract new distributors and customers or sell additional products to existing ones could adversely affect business growth and cash flows.
• Key management personnel may leave, which could adversely affect the ability to continue operations.
• Material weakness in internal controls over financial reporting, which may not be effectively remediated, leading to potential financial misstatements or regulatory sanctions.
• Lack of an active and liquid trading market for common stock, making it difficult for shareholders to sell shares without depressing value.
• Common stock price may be volatile and fluctuate widely due to various factors.
• Future equity issuances could result in substantial dilution for existing investors.
• Provisions in Nevada Revised Statutes and Bylaws could make it difficult to bring legal actions against directors or officers for fiduciary duty violations and may require the company to indemnify them.

Future Outlook

The company hopes to generate more revenues from its licenses with Quoin and Ovation in 2026 and plans to enter into commercial arrangements with pharma and biotech companies to exploit its recently filed patent applications for transdermal obesity and glucose-controlling agents. Quoin Pharmaceuticals remains on track to complete patient recruitment into its Phase 3 program by the end of 2026 and potentially file for FDA approval for QRX003 as the first treatment for Netherton Syndrome in 2027. The company expects operating expenses to increase in the future as it begins to generate more licensing revenue.

Management Comments

• "We hope to generate more revenues from our licenses with Quoin and Ovation in 2026."
• "We also plan to enter into commercial arrangements with pharma and biotech companies to exploit our patent applications that were recently filed, and we hope to generate revenue from these efforts in the future."
• "We believe these protocol amendments could ultimately result in the generation of a highly compelling data set, which could support regulatory filings and approval for QRX003 as the first treatment for Netherton Syndrome."
• "We believe this announcement [FDA clearance for teen subjects] is important as: Clearance to include teen patients in both Quoins open label and placebo-controlled studies are expected to significantly expand the number of eligible subjects, potentially expedite recruitment and lead to a more robust data set."
• "It is believed that the inclusion of this patient population in Quoins studies will be a critical component of the development of a robust data set that could result in regulatory approval with a broad label as QRX003 is being tested both as monotherapy and in conjunction with off-label treatments."
• "By utilizing Invisicare, we aim to not only offer patients a convenient and effective alternative to traditional oral or injectable therapies but to also enhance drug efficacy and potentially significantly reduce side effects as transdermal delivery avoids first-pass metabolism."
• "For long-term treatment of obesity and glucose controlling agents, a transdermal delivery system could feasibly provide a convenient method for administering maintenance doses for these medications."
• "We are actively pursuing strategic partnerships with pharmaceutical and/or biotech companies to facilitate the introduction of the first transdermal obesity therapies to market and to explore the application of its delivery platform across diverse disease domains."
• "We expect our operating expenses will increase in the future as the Company begins to generate more licensing revenue."
• "We intend to fund operations through increased sales and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements."
• "We plan to seek additional financing in a private equity offering to secure funding for operations."

Industry Context

StockSavvy.ai notes that Skinvisible Inc.'s strategy to out-license its Invisicare technology aligns with a broader pharmaceutical industry trend where major companies increasingly rely on external R&D for new product pipelines, especially given internal R&D downsizing. The focus on Netherton Syndrome, a rare pediatric disease, positions QRX003 for potential orphan drug benefits and priority review, reflecting a growing emphasis on underserved patient populations. Furthermore, the company's expansion into transdermal delivery for obesity and glucose-controlling agents taps into a rapidly expanding and high-value market, with Morgan Stanley projecting a $150 billion market by 2035 for obesity treatments, indicating a strategic move to address significant unmet medical needs and capitalize on innovative delivery methods to mitigate side effects of traditional therapies.

Comparison to Industry Standards

• QRX003's FDA Fast Track, Rare Pediatric Disease, and European Orphan Drug Designations are significant regulatory achievements, comparable to those sought by specialized biotech firms developing treatments for rare conditions, such as Amicus Therapeutics for Pompe disease or Sarepta Therapeutics for Duchenne muscular dystrophy. These designations can lead to accelerated review, market exclusivity (10 years in Europe for QRX003), and potential Priority Review Vouchers (PRV), which have been sold for $67.5 million to $350 million in the past.
• The FDA's indication that a single Phase 3 study may be sufficient for QRX003 approval is a notable deviation from the traditional requirement of two pivotal studies, potentially expediting market entry. This is a favorable regulatory outcome, typically reserved for therapies addressing critical unmet needs where robust early data is compelling.
• The expansion into transdermal delivery for obesity and glucose-controlling agents, targeting a projected $150 billion market by 2035 (Morgan Stanley), positions Skinvisible alongside major pharmaceutical players like Eli Lilly (with Zepbound) and Novo Nordisk (with Wegovy) who are dominating the GLP-1 agonist market. Skinvisible's approach aims to differentiate by potentially reducing side effects and offering a convenient alternative to injectables, a key competitive angle in this high-growth sector.

Corporate Governance

Related Party Transactions

• Convertible notes payable to related parties (officers) totaling $5,372,403 as of December 31, 2025, converted from accrued salaries, vacation, and outstanding notes on January 31, 2023. These notes are unsecured, bear 10% interest, and are convertible into common stock at $0.10 per share with warrants at $0.15 per share.
• Terry Howlett (CEO & CFO) had $180,000 in accrued compensation for both 2025 and 2024, which he has the right to convert into common stock at $0.10 per share with warrants.
• Doreen McMorran (Head of Business Development) holds 10,250,510 shares beneficially, including derivative securities, indicating a significant related party interest.

Stakeholder Impact

• Shareholders face substantial risk of losing their entire investment due to the company's going concern issues, increasing losses, and potential dilution from future capital raises. The thinly traded nature of the stock and penny stock rules further limit liquidity and price stability.
• Employees (currently only two, including CEO/CFO) face high job insecurity tied to the company's ability to secure financing and achieve profitability. The concentrated operational structure also poses risks.
• Customers/Licensees (Quoin, Ovation) benefit from the continued development and regulatory progress of Invisicare-powered products, potentially leading to new market opportunities. However, Skinvisible's financial instability could pose a long-term risk to the ongoing support and development of the licensed technology.
• Creditors face significant risk given the company's substantial liabilities ($10,390,348 total liabilities vs. $127,567 total assets) and going concern warning, making repayment uncertain.

Next Steps

• Quoin Pharmaceuticals plans to submit clinical data from ongoing Phase 2 and pediatric investigator studies.
• Quoin plans to request a meeting with the FDA to discuss clinical data prior to initiating the Phase 3 pivotal program for QRX003.
• Quoin remains on track to complete patient recruitment into its Phase 3 program by the end of 2026.
• Quoin potentially plans to file for FDA approval for QRX003 as the first treatment for Netherton Syndrome in 2027.
• Skinvisible plans to enter into commercial arrangements with pharma and biotech companies to exploit its new patent applications for obesity and glucose-controlling agents.
• Skinvisible plans to seek additional financing in a private equity offering to secure funding for operations.
• Skinvisible plans to implement changes during fiscal year ending December 31, 2026, to remediate material weaknesses in internal controls, including appointing additional qualified personnel and adopting sufficient written policies and procedures.

Key Dates

Recommendation

The company's severe financial distress, including a substantial increase in net loss, critically low cash reserves, and a worsening working capital deficit, raises significant going concern doubts. While there are promising clinical developments and new patent applications, the immediate financial instability and material weaknesses in internal controls present an extremely high risk profile. The stock is thinly traded and subject to penny stock rules, further limiting liquidity. Without a clear path to sustainable revenue and profitability, the risk of capital loss is exceptionally high, making it a strong sell for investors.

Keywords

Skinvisible Inc., Invisicare, pharmaceutical R&D, topical delivery system, Netherton Syndrome, QRX003, Quoin Pharmaceuticals, Orphan Drug Designation, Rare Pediatric Disease Designation, Fast Track Designation, transdermal delivery, obesity drugs, glucose-controlling agents, Ovation Science, DermSafe, biotech licensing, SEC 10-K, going concern, material weakness, SKVI