UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549





**FORM
      10-KSB**





[X]
            ANNUAL
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934For
                the
                fiscal year endedDecember
                31, 2005[
                ]
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACTFor
                the
                transition period from _________ to
                ________




Commission
              file number: 000-25911




**Skinvisible,
                Inc.**(Name
                of small business issuer in its
                charter)




**Nevada**
            **88-0344219**(State
                or other jurisdiction of incorporation or organization)
            (I.R.S.
                Employer Identification No.)




6320
                South Sandhill Road, Suite 10, Las Vegas, Nevada
            89120(Address
                of principal executive offices)
            (Zip
                Code)




Issuer’s
                telephone number(702)
                433-7154




Securities
                registered under Section 12(b) of the Exchange
                Act:




Title
                of each class
            Name
                of each exchange on which registeredNone
            Not
                ApplicableSecurities
                registered under Section 12(g) of the Exchange Act:Common
                Stock(Title
                of class)





Check
      whether the Issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act during the past 12 months (or for such
      shorter period that the registrant was required to file such reports), and
      (2)
      has been subject to such filing requirements for the past 90 days. Yes [X]
      No [
      ]





Check
      if
      disclosure of delinquent filers in response to Item 405 of Regulation S-B is
      not
      contained in this form, and no disclosure will be contained, to the best of
      registrant’s knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-KSB or any amendment
      to
      this Form 10-KSB [ ]





State
      issuer’s revenue for its most recent fiscal year: $ 850,280





State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the average bid and asked price of
      such
      common equity, as of a specified date within the past 60 days. $14,046,668
      as of February 28, 2006 . ****




State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date.


59,667,748  Common
      Shares as of February 28, 2006.





Transitional
      Small Business Disclosure Format (Check One): Yes: __; No X




1
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          of Contents





**TABLE
      OF CONTENTS**





PagePART
                IItem
                1.
            Description
                of Business
            3Item
                2.
            Description
                of Property
            9Item
                3.
            Legal
                Proceedings
            9Item
                4.
            Submission
                of Matters to a Vote of Security
                Holders
            10PART
                IIItem
                5.
            Market
                for Common Equity and Related Stockholder Matters
            10Item
                6.
            Management’s
                Discussion and Analysis
            11Item
                7.
            Financial
                Statements
            14Item
                8.
            Changes
                In and Disagreements With Accountants on Accounting and
                Financial Disclosure
            15Item
                8A.
            Controls
                and Procedures
            15Item
                8B.
            Other
                Information
            15PART
                IIIItem
                9.
            Directors,
                Executive Officers, Promoters and Control Persons;
                Compliance With Section 16(a) of the Exchange Act
            16Item
                10.
            Executive
                Compensation
            18Item
                11.
            Security
                Ownership of Certain Beneficial Owners and Management
                and Related Stockholder Matters
            19Item
                12.
            Certain
                Relationships and Related
                Transactions
            20Item
                13.
            Exhibits
            20Item
                14.
            Principal
                Accountant Fees and Services
            21





2
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          of Contents




**PART
      I**





**Item
      1. Description of Business**




**Business
      Development**





We
      were
      organized as a Nevada corporation on March 5, 1998 and previously operated
      under
      the name Microbial Solutions, Inc.





We
      conduct our business through the following wholly owned subsidiaries:





Name
                of Subsidiary
            Date
                of Incorporation
            Jurisdiction
                of IncorporationSkinvisible
                Pharmaceuticals, Inc.
              f/k/a
                Manloe Laboratories, Inc.
            June
                30, 1995
            NevadaSkinvisible
                Pharmaceuticals (Canada) Inc.
            October
                20, 1998
            Canada





We
      conduct our primary business activities such as research and development and
      marketing of our products through Skinvisible Pharmaceuticals, Inc., a Nevada
      corporation. We conduct our marketing activities in Canada through the Canadian
      entity Skinvisible Pharmaceuticals (Canada) Inc.





**Description
      of Business**





We
      develop innovative polymer delivery vehicles and related compositions
      that hold active ingredients on the skin for extended periods of time
      when applied topically.  Independent research has confirmed that our
      polymers can hold certain active ingredients on the skin for up to 4 hours
      resisting both wash-off and perspiration over a 4 hour period. We designed
      a
      process for combining water soluble and insoluble polymers that is
      specifically formulated to carry water insoluble active ingredients in
      water-based products without the use of alcohol, silicones, waxes, or other
      organic solvents.  This enables active agents the ability to perform their
      intended functions on the skin for an extended period of time.  Our polymer
      delivery vehicles allow normal skin respiration and perspiration.  The
      polymer compositions we develop wear off as part of the natural exfoliation
      process of the skin's outer layer cells.




Products
      that successfully incorporate
      our polymer delivery vehicles to
      date
      include antimicrobial hand sanitizers, suncare products, skincare moisturizers,
      sunless tanning products as well as various dermatology products for various
      skin disorders.  On an ongoing basis, we are seeking to develop polymer
      formulations that can successfully be incorporated into other products.




Our
      primary objective is to license our polymer delivery vehicles to
      established brand manufacturers and marketers of prescription and
      over-the-counter products in the dermatological, medical, cosmetic,
      and skincare markets.  With the exception of sales to one vendor, our
      management’s policy is to only sell our polymers to vendors that have executed a
      license agreement with us.  We conduct our research and development
      in-house.





**Manufacture
      and Distribution**





We
      perform research and development activities at our principal place of business
      located at 6320 South Sandhill Road, Unit #10, Las Vegas, Nevada 89120. We
      engage an outside manufacturer that currently handles all of our manufacturing
      and distribution needs.




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**Description
      of Current Products and Agreements**





Cosmetics
      and Personal Care Markets





On
      October 7, 2005, we entered into a Master Sales, Collaboration and Distribution
      Agreement (“Agreement”) with EMD Chemicals Inc. (“EMD”), a New York corporation
      and affiliate of Merck KGaA of Darmstadt, Germany.  Under the terms of this
      Agreement, we granted EMD the exclusive right to distribute and sell our
      patented polymer delivery system, Invisicare ® ,
      for the
      cosmetics and personal care markets in the entire world. EMD will be entitled
      to
      commission income based upon the gross revenues from the sale of sublicensing
      agreements as well as the polymers.  The initial term of this Agreement is
      until December 31, 2008 and this Agreement will automatically renew for
      successive three year terms unless either party provides fourteen months advance
      notice of its intention to terminate or not renew the Agreement.





Part
      of
      the consideration of the Agreement is that we would grant EMD options to
      purchase shares of our common stock. The terms for the issuance of options
      were
      established and we executed a stock option agreement on February 27, 2006 where
      we granted EMD the option to purchase 5,817,525 shares of common stock at the
      exercise price of $0.172 per share exercisable until December 31, 2006.





Antibacterial/Antimicrobial
      Hand Sanitizer





On
      February 21, 2005, we entered into a definitive distribution agreement with
      Dermal Defense, Inc. (“Dermal Defense”). Pursuant to this agreement, Dermal
      Defense acquired the exclusive marketing and distribution rights in the United
      States of America, Canada and Mexico for our antimicrobial hand sanitizer
      composition which utilizes the active ingredient Triclosan 1% and incorporates
      our patented Invisicare ® polymer
      delivery system (the “Product”).





Dermal
      Defense acquired these rights for the purchase price of $1,000,000. Dermal
      Defense has already paid $775,000 of this purchase price. The remaining balance
      is due and payable quarterly through September 30, 2006 in the amount of $75,000
      or 5% of the gross revenues generated by Dermal Defense from sales of the
      Product in the Territory in the prior quarter, whichever is greater. Under
      the
      terms of this agreement, Dermal Defense is also obligated to pay us a royalty
      fee quarterly in the amount of $20,000 or 5% of gross revenues generated by
      Dermal Defense from sales of the product in the quarter, whichever is
      greater.





During
      the second quarter of 2005 and with our approval, Dermal Defense entered into
      an
      exclusive sub-distribution agreement with JD Nelson & Associates of Columbus
      Ohio (“JD Nelson”) and transferred all of its rights that it possessed to
      distribute, market, and sell our antimicrobial hand sanitizer in the United
      States of America, Canada and Mexico. Under the terms of the sub-distribution
      agreement, JD Nelson will pay a license fee and royalty on product sales to
      Dermal Defense and Dermal Defense will continue to pay us as agreed in the
      Distribution Agreement of February 21, 2005. As a result, the fees and royalties
      that we are due under this agreement remain unchanged. Currently, all required
      fees and royalties due in accordance with this agreement are paid as agreed
      and
      up to date. Dermal Defense and JD Nelson & Associates are prohibited
      under this agreement from manufacturing, marketing, distributing, or selling
      any
      competing product while the Distribution Agreement is in full force and
      effect.





In
      May
      2005, we entered into a Distribution Agreement (“Agreement”) with Safe4Hours,
      Inc. (“Safe4Hours”), a Nevada corporation. Under the terms of this Agreement, we
      granted Safe4Hours the exclusive right to distribute, market, sell, and promote
      our antimicrobial hand sanitizer that utilizes the active ingredient Triclosan
      1% in every country in the world except Canada, the United States, and Mexico.
      As set forth above, the rights to distribute, market, sell, and promote our
      antimicrobial hand sanitizer in Canada, the






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United
      States, and Mexico are held by Dermal Defense. Safe4Hours acquired these rights
      for an up-front fee of $1,000,000, of which $100,000 has been received and
      the
      remaining $900,000 is payable in quarterly installments based upon a
      predetermined formula until the balance is received, and a royalty fee of no
      less than 5% of gross revenue of all sales. Currently, we are negotiating with
      Safe4Hours to revise the payment terms for the remaining $900,000 due under
      this
      agreement. Safe4Hours is
      prohibited under this agreement from manufacturing, marketing, distributing,
      or
      selling any competing product while the Distribution Agreement is in full force
      and effect.




Sunless
      Tanning Spray Product





On
      June
      9, 2004, our wholly-owned subsidiary, Skinvisible Pharmaceuticals, Inc., entered
      into a Trademark License Agreement and Distribution Agreement ("Distribution
      Agreement") with Cross Global, Inc. ("Cross Global"), a Delaware corporation,
      to
      grant Cross Global the exclusive right to distribute, market, sell, and promote
      our proprietary sunless tanning spray products in Canada, the United States,
      Mexico, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland,
      Luxembourg, Netherlands, Portugal, Spain, Sweden, United Kingdom, and Israel.
      Cross Global is also utilizing our proprietary polymer formula to manufacture
      nine additional sun care related products.





Pursuant
      to the terms of the Distribution Agreement, Cross Global paid us the license
      fee
      of $1,000,000. Under the terms of this agreement, we will receive a royalty
      fee
      of no less than 5% of gross revenue of all sales of our
      proprietary sunless tanning spray products. Cross Global is prohibited under
      this agreement from manufacturing, marketing, distributing, or selling any
      competing product while the Distribution Agreement is in full force and
      effect.





Sunscreen
      and Skin Care Products





We
      developed and
      successfully tested the application of our polymer delivery vehicles in sunscreen
      products with SPF 15 and SPF 30, sunless tanning lotions, moisturizing creams,
      aloe after-sun products, and other skin care products .
      We
      currently offer our polymer delivery vehicles for incorporation into these
      products on a private label basis and have multiple agreements in
      place.





**Status
      of Research and Development for New Applications**





We
      are
      continuing our research and development toward developing additional
      applications for our polymer delivery vehicles. We are currently researching
      whether the following potential applications are suitable to incorporate our
      polymer delivery vehicles:





·
            Insect
                repellents


·
            Anti-fungal


·
            Anti-inflammatory


·
            New
                antibacterial/antimicrobial hand
                sanitizer





Insect
      Repellants





We
      are in
      the process of developing an insect repellant with an active ingredient that
      incorporates our topical polymer-based delivery systems and are presently
      undergoing in-house research. We anticipate that our research will be completed
      by the end of April 2006.  The active ingredient for the insect repellant
      was provided by EMD.  In the event that we are successful in developing an
      effective insect repellant that incorporates our topical polymer-based delivery
      systems, the rights to distribute and sell the developed product will be subject
      to the terms of the Agreement with EMD entered into on October 7, 2005. There
      can






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be
      no
      assurance that we will be successful in developing a viable insect repellant
      that incorporates our topical polymer-based delivery systems and the active
      ingredient provided by EMD.




Anti-fungal





We
      have
      an oral agreement with a pharmaceutical company relating to the research and
      development of an anti-fungal product that incorporates our topical
      polymer-based delivery systems with an active compound they provided. This
      company paid for our research and development activities as it relates to this
      product in exchange for the ability to acquire the exclusive worldwide licensing
      rights to distribute and sell the product should our research and development
      prove successful.  We have completed our initial research and development,
      but further testing remains to be conducted.  The company is presently
      conducting certain skin sensitivity testing. In the event that the skin study
      is
      successfully completed and we execute a licensing agreement with the company,
      the company agreed to commence a filing with the FDA for a new drug approval
      in
      the United States. A definitive licensing agreement would require the company
      to
      pay us an upfront license fee plus ongoing royalty payments based on worldwide
      sales of the anti-fungal product.  There can be no assurance that we will
      successfully complete the research and development of this product or that
      this
      product will receive FDA approval to market and sell this potential product
      in
      the United States.





Anti-inflammatory





Subsequent
      to the reporting period, we entered into discussions with a pharmaceutical
      company to conduct the research and development relating to an anti-inflammatory
      product that incorporates our topical polymer-based delivery system.  This
      product is intended to treat hand skin disorders resulting from occupational
      conditions.  We are in discussions to grant a worldwide license for the
      exclusive rights to market and offer for sale the product in exchange for an
      upfront license fee plus royalty payments based on sales generated by the
      product should its development prove successful.  We have not entered into
      any definitive agreement and these discussions are ongoing.  There can be
      no assurance that we will be able to negotiate a definitive agreement. There
      can
      be no assurance that we will successfully complete the research and development
      of this product or that this product will receive FDA approval to market and
      sell this potential product in the United States.





New
      Antibacterial/Antimicrobial Hand Sanitizer





We
      have
      developed and sold the exclusive marketing and distribution rights to an
      antimicrobial hand sanitizer product that utilizes the active ingredient
      Triclosan 1%.  We have developed and are currently testing a new
      antimicrobial hand sanitizer product that utilizes the active ingredient
      Chlorhexidine (“Chlorhexidine antimicrobial hand sanitizer”). 
Chlorhexidine is the active agent in scrub soaps currently used
      in the operating rooms of most hospitals worldwide.





As
      a part
      our development efforts to develop the Chlorhexidine antimicrobial hand
      sanitizer, we developed a research plan that comprises of several studies. 
The first and second studies were in-vitro tests designed to gauge the
      effectiveness of the Chlorhexidine antimicrobial hand sanitizer when exposed
      to
      certain bacteria.  We received positive results from the first study. 
The results of the second study indicated that further strengthening of the
      product could improve the product’s effectiveness.  Our research department
      implemented the appropriate improvements and commenced a third study during
      the
      fourth quarter. The
      third
      study was conducted by Retroscreen Virology Ltd. (“RVL”), a research company
      that is a division of St. Bartholomew's Hospital and the Royal London Hospital
      based in London, England, and designed to test the effectiveness of the
      Chlorhexidine antimicrobial hand sanitizer in killing the H5N1 virus also known
      as the bird flu virus or avian flu. In-vitro testing conducted by RVL confirmed
      that the H5N1 virus was successfully killed by the Chlorhexidine antimicrobial
      hand sanitizer 99% of the time at the following four






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points
      in
      time: 15 seconds, 30 seconds, 1 minute, and 5 minutes following contact. This
      in-vitro study was conducted by placing the Chlorhexidine antimicrobial hand
      sanitizer in a dish and then exposing the H5N1 virus at the forgoing time
      intervals. Based upon these positive results, we retained RVL to conduct a
      further ex-vivo study to provide data on the effectiveness of the Chlorhexidine
      antimicrobial hand sanitizer when exposed to the H5N1 virus over an extended
      period of time.  This ex-vitro study will be conducted by applying the
      Chlorhexadine antimicrobial hand sanitizer to dead skin specimens, simulating
      normal conditions of wash-off and skin perspiration, and then exposing the
      H5N1
      virus to the skin specimen at various extended time intervals. We anticipate
      that the results of this second study will be available in late April 2006.





We
      also
      commenced another study referred to as a human repeat insult patch test
      (HRIPT).  This study exposes a minimum of 100 persons to the Chlorhexidine
      antimicrobial hand sanitizer to determine if continued use and exposure to
      the
      product will result in skin complications or sensitivities.  This study is
      expected to be completed prior to the end of April 2006.





If
      the
      event that the Chlorhexidine antimicrobial hand sanitizer proves to be a viable
      product, we may be required to file a New Drug Application with the US FDA
      because the drug Chlorhexidine is not presently an approved drug under the
      FDA
      Tentative Final Monograph (TFM) for Hand Sanitizers. We may also be required
      to
      seek similar regulatory approvals in other foreign jurisdictions. If we are
      required to file a New Drug Application with the US FDA, further development
      of
      this product may be both time and cost prohibitive for us. Under such
      circumstance, we would seek to license the product to a third party with
      experience in working with the FDA such as a pharmaceutical company.  There
      can be no assurance that we will successfully complete the research and
      development of this product or that this product will receive FDA approval
      to
      market and sell this potential product in the United States.





**Description
      of Other Applications For Which No Agreements Are Currently In
      Place**





We
      have
      developed and successfully tested the application of our polymer delivery
      vehicles in the following products:




·Incontinence
                Lotion·Anti-acne
                Product·Dermal
                Abrasion/Cosmetic Skin Care·Anti-microbial
                Wound Care





Our
      management is seeking to offer these products incorporating our polymer delivery
      vehicle on a licensing basis.





**Competition**





In
      terms
      of our current focus and long-term strategy, our primary products have been
      identified as the licensing of our polymer-based delivery system technologies
      and sale of our delivery systems as ingredients for topically administered
      finished product applications in the prescription Rx and OTC treatment,
      cosmetic, and skincare formulations. Market research undertaken to date has
      indicated that, at present, there is reasonably limited competition for our
      polymer-based delivery systems and related technologies such as delivery
      vehicles and technologies that offer the same performance capabilities for
      topically administered products.





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**Patents,
      Licenses, Trademarks, Franchises, Concessions, Royalty Agreements, or Labor
      Contracts**





Patents





On
      January 4, 2000, we filed a patent application for our antimicrobial dermal
      barrier composition. We received patent approval (US Patent No. 6,582,683)
      for
      our antimicrobial dermal barrier formulation in February 2003 and received
      the
      patent certificate in June 2003.





We
      filed
      a patent application on August 20, 2001 titled “Topical Compositions, Topical
      Composition Precursors, and Methods for Manufacturing and Using” for our *Invisicare* *®* topical
      compositions and our methodology for manufacturing and utilization of numerous
      delivery systems and related applications. The United States Patent and
      Trademark Office split this application into three different applications as
      follows: (a) Methods of Manufacturing (b) Topical Compositions and (c) Methods
      of Use. We received patent approval for the application on Methods of
      Manufacturing (US Patent No. 6,756,059). Subsequent to the reporting period,
      we
      received notice of patent approval for the Topical Compositions application
      (US
      Patent No. 10/154,723). Our patent application for Methods of Use is still
      pending.





We
      have
      also filed under the Patent Cooperation Treaty (PCT) the Patent titled “Topical
      Compositions, Topical Composition Precursors, and Methods for Manufacturing
      and
      Using” for certain foreign countries. As of December 31, 2005, this patent
      application is still pending.





We
      also
      have three United States patents currently pending, which cover our sunless
      tanning spray formula, sunscreen formula and our new antimicrobial hand
      sanitizer with chlorhexidine.





Trademarks





In
      January 2002, we received trademark approval in the United States for the name
      " *Invisicare* "
      to
      identify our family of polymer delivery systems. We have filed this trade name
      with the Cosmetic, Fragrance and Toiletries Association ("CFTA") as an
      ingredient for use in skincare and cosmetic formulations.





We
      have
      also applied and received trademark approval for the corporate logo
“ *Skinvisible* ”
and
      for
      our sunless and sun tanning products under the name “ *Solerra* .”





We
      are
      seeking to extend the protection of our trademarks in additional countries
      where
      we currently conduct business and those additional countries where we intend
      to
      conduct business.




**Research
      and Development**





We
      incurred research and development expenditures for the fiscal years ended
      December 30, 2004 and 2005 in the amount of $17,300 and $57,091
      respectively.





**Government
      Regulation**




We
      are
      not subject to any significant or material federal or state government
      regulation in connection with the research and development and licensing of
      our
      innovative topical polymer-based delivery systems and technologies.





With
      respect to our products under development, our licensing agreements require
      the
      licensee to seek all required approvals for marketing, distribution, and sale
      in
      the jurisdictions for which it is desired to make the product available should
      we succeed in developing a successful product.






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We
      are
      not subject to any significant or material environmental regulation in the
      normal operation of our business.





**Compliance
      with Environmental Laws**





We
      did
      not incur any costs in connection with the compliance with federal, state,
      or
      local environmental laws.





**Employees**





We
      currently have five full-time employees including our sole officer, Mr. Terry
      Howlett.





**Item
      2. Description of Property**





Currently,
      we do not own any real estate. We
      are
      leasing our executive offices and research facility. We are located at 6320
      South Sandhill Road, Suite 10, Las Vegas, Nevada 89120 .





Skinvisible
      Pharmaceuticals, Inc., our wholly owed subsidiary, owns the manufacturing and
      laboratory equipment at this location.





**Item
      3. Legal Proceedings**





On
      March
      8, 2005, we initiated litigation in the U.S. District Court for the District
      of
      Nevada against Health First Distributors North America, Inc., a British Columbia
      corporation (“HFD”).  The complaint seeks declaratory relief to the effect
      that the parties must arbitrate a dispute between them in Las Vegas, Nevada,
      as
      required by the parties’ July 9, 2003, letter of intent as amended by a
      subsequent letter dated October 29, 2003.  The underlying dispute concerns
      whether we must return what we contend was a non-refundable deposit of $100,000
      USD towards North American distribution rights for our products.  HFD has
      claimed in demand letters that we must return the deposit and has threatened
      to
      bring suit in British Columbia if we fail to do so.  We disagree with HFD’s
      position and have demanded that the dispute be arbitrated in Las Vegas, Nevada,
      as required by the parties’ agreement.  HFD has refused.  Our lawsuit
      seeks only a declaration from the court that arbitration is required and that
      it
      must take place in Las Vegas, Nevada.  We served the summons and complaint
      on March 17, 2005. As of December 31, 2005, HFD had not answered or otherwise
      responded to the litigation.





Skinvisible
      Pharmaceuticals, Inc. and our Chief Executive Officer, Terry Howlett, were
      named
      as defendants in a lawsuit initiated in the U.S. District Court for the Eastern
      District of Michigan on March 11, 2005. The lawsuit seeks a judgment against
      all
      defendants jointly and severally in the amount of $1,025,000 plus other costs,
      interest and expenses as the court finds appropriate. The underlying dispute
      concerns the circumstances under which the plaintiffs purchased common stock
      in
      Dermal Defense, Inc., a Nevada corporation. Based on ongoing negotiations,
      we
      anticipate that the case against Skinvisible Pharmaceuticals, Inc. and our
      Chief
      Executive Officer, Terry Howlett, will be dismissed by the plaintiff without
      prejudice.





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**Item
      4. Submission of Matters to a Vote of the Security
      Holders**





No
      matters were submitted to our security holders for a vote, through the
      solicitation of proxies or otherwise, during the fourth quarter of the fiscal
      year ended December 31, 2005.





**PART
      II**





**Item
      5. Market for Common Equity and Related Stockholder
      Matters**





**Market
      Information**





Our
      common stock is currently quoted on the OTC Bulletin Board (“OTCBB”), which is
      sponsored by the National Association of Securities Dealers (“NASD”). The OTCBB
      is a network of security dealers who buy and sell stock. The dealers are
      connected by a computer network that provides information on current "bids"
      and
      "asks", as well as volume information. Our shares are quoted on the OTCBB under
      the symbol “SKVI.”





The
      following table sets forth the range of high and low bid quotations for our
      common stock for each of the periods indicated as reported by the OTCBB. These
      quotations reflect inter-dealer prices, without retail mark-up, mark-down or
      commission and may not represent actual transactions.





Fiscal
                Year Ending December 31, 2005Quarter
                Ended
            
            High
                $
            
            Low
                $March
                31, 2005
            
            0.20
            
            0.16June
                30, 2005
            
            0.195
            
            0.17September
                30, 2005
            
            0.21
            
            0.195December
                31, 2005
            
            0.28
            
            0.19Fiscal
                Year Ending December 31, 2004Quarter
                Ended
            
            High
                $
            
            Low
                $March
                31, 2004
            
            0.19
            
            0.095June
                30, 2004
            
            0.175
            
            0.10September
                30, 2004
            
            0.11
            
            0.06December
                31, 2004
            
            0.10
            
            0.045





**Holders
      of Our Common Stock**





As
      of
      December 31, 2005, we had approximately one hundred seventy nine (179) holders
      of record of our common stock and several other stockholders hold shares in
      street name.





**Dividends**





There
      are
      no restrictions in our articles of incorporation or bylaws that prevent us
      from
      declaring dividends. The Nevada Revised Statutes, however, do prohibit us from
      declaring dividends where, after giving effect to the distribution of the
      dividend:





1.
            we
                would not be able to pay our debts as they become due in the usual
                course
                of business; or





2.
            our
                total assets would be less than the sum of our total liabilities
                plus the
                amount that would be needed to satisfy the rights of shareholders
                who have
                preferential rights superior to those






10
 Table
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receiving the
              distribution.





We
      have
      not declared any dividends, and we do not plan to declare any dividends in
      the
      foreseeable future.





**Recent
      Sales of Unregistered Securities**





The
      information set forth below relates to our issuances of securities without
      registration under the Securities Act of 1933 during the reporting period which
      were not previously included in a Quarterly Report on Form 10QSB or Current
      Report on Form 8-K.





During
      the fourth quarter of the fiscal year ended December 31, 2005, we issued 50,000
      shares of restricted common stock to a consultant for services rendered. These
      shares were issued pursuant to Section 4(2) of the Securities Act of 1933,
      as
      amended. We did not engage in any general solicitation or advertising. We issued
      the stock certificates and affixed the appropriate legends to the restricted
      stock.





**Securities
      Authorized for Issuance Under Equity Compensation Plans**





**Equity
      Compensation Plans as of December 31, 2005**


A
              B
              C**Plan
                  Category**
              **Number
                  of securities to be issued upon exercise of outstanding options,
                  warrants
                  and rights**
              **Weighted-average
                  exercise price of outstanding options, warrants and
                  right**
              **Number
                  of securities remaining available for future issuance under equity
                  compensation plans (excluding securities reflected in column
                  (A))**Equity
                  compensation plans
                approved
                  by security
                holders
              1,125,000
              $0.085
              -Equity
                  compensation plans
                not
                  approved by security
                holders
              8,762,500
              $0.13
              -Total
              9,887,500
              $0.127
              -


**Item
      6. Management’s Discussion and Analysis**





**Forward-Looking
      Statements**




Historical
      results and trends should not be taken as indicative of future operations.
      Management’s statements contained in this report that are not historical facts
      are forward-looking statements within the meaning of Section 27A of the
      Securities Act of 1933, as amended, and Section 21E of the Securities and
      Exchange Act of 1934 (the “Exchange Act”), as amended. Actual results may differ
      materially from those included in the forward-looking statements. The Company
      intends such forward-looking statements to be covered by the safe-harbor
      provisions for forward-looking statements contained in the Private Securities
      Litigation Reform Act of 1995, and is including this statement for purposes
      of
      complying with those safe-harbor provisions.






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Forward-looking
      statements, which are based on certain assumptions and describe future plans,
      strategies and expectations of the Company, are generally identifiable by use
      of
      the words “believe,” “expect,” “intend,” “anticipate,” “estimate,”
“project,” “prospects,” or similar expressions. The Company’s ability to predict
      results or the actual effect of future plans or strategies is inherently
      uncertain. Factors which could have a material adverse affect on the operations
      and future prospects of the Company on a consolidated basis include, but are
      not
      limited to: changes
      in economic conditions generally and the retail market specifically,
      legislative/regulatory changes, availability of capital, interest rates,
      competition, and generally accepted accounting principles .
      These
      risks and uncertainties should be considered in evaluating forward-looking
      statements and undue reliance should not be placed on such statements. Further
      information concerning the Company and its business, including additional
      factors that could materially affect the Company’s financial results, is
      included herein and in the Company’s other filings with the Securities and
      Exchange Commission.





**Results
      of Operations for the Years Ended December 31, 2005 and
      2004**





For
      the
      year ended December 31, 2005, we generated total revenue of $850,280 compared
      to
      revenue in the amount of $519,972 for the year ended December 31, 2004. The
      increase in revenue is primarily attributable to the receipt of payments under
      licensing agreements entered into with Dermal Defense, Inc., Safe4Hours, Inc.,
      and Cross Global, Inc. We received $556,000 for distribution and licensing
      rights in the year ended December 31, 2005, compared to $325,000 for
      distribution and licensing rights in the year ended December 31, 2004. We
      generated $273,520 in revenue from product sales in the year ended December
      31,
      2005, compared to $174,020 in revenue from product sales in the previous year.





Our
      cost
      of revenues for the year ended December 31, 2005 increased to $140,399 from
      the
      same reporting period in the prior year when cost of revenues was $96,781.
      The
      increase in our cost of revenues is attributable to increased product sales.





Gross
      profit for the year ended December 31, 2005 was $709,881 compared to $423,191
      for the year ended December 31, 2004. The increase in gross profit for the
      year
      ended December 31, 2005 is primarily attributable to increased licensing fees
      that are not offset by any cost of revenue.





We
      incurred operating expenses in the amount of $1,743,139 for the year ended
      December 31, 2005. Our expenses for the year ended December 31, 2005 consisted
      of selling and administrative costs of $1,225,626, depreciation and amortization
      of $275,710, and stock based compensation in the amount of $241,803. We incurred
      expenses in the amount of $1,228,163 for the year ended December 31, 2004.
      Our
      expenses for the year ended December 31, 2004 consisted of selling and
      administrative costs of $1,084,674, depreciation and amortization of $111,339,
      and stock based compensation in the amount of $32,150. The increase in operating
      expenses from fiscal 2004 to fiscal 2005 is primarily attributable to the
      payment of stock based compensation and increased selling and administrative
      costs.




Our
      net
      loss for the year ended December 31, 2005 was $1,031,151, compared to a net
      loss
      of $804,972 in the prior year.





**Liquidity
      and Capital Resources**





As
      of
      December 31, 2005, we had current assets of $243,621. Our
      total
      current liabilities as of December 31, 2005 were $1,184,717. Included in our
      current liabilities is unearned revenue in the amount of $978,000. As a result,
      on December 31, 2005, we had a working capital deficit of $941,096.






12
 Table
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Management
      believes that we will have sufficient capital to finance our operations for
      the
      next twelve months based upon revenues anticipated to be received in the current
      fiscal year and royalty payments due under the current license
      agreements.





**Off
      Balance Sheet Arrangements**





As
      of
      December 31, 2005, there were no off balance sheet arrangements.





**Going
      Concern**





Our
      independent auditors have stated in their Auditor’s Report included in the Form
      10-KSB that we have incurred operating losses, accumulated deficit, and negative
      cash flow from operations. As of December 31, 2005, we had incurred cumulative
      net losses of approximately $11,592,300.





Our
      ability to raise additional capital through future issuance of common stock
      is
      unknown. The successful development of our business plan and our attainment
      of
      profitable operations is unknown. These factors, among others, raise substantial
      doubt about our ability to continue as a going concern. The accompanying
      consolidated financial statements do not include any adjustments related to
      recoverability and classification of asset carrying amounts or the amount and
      classification of liabilities that might result should we be unable to continue
      as a going concern.





**Revenue
      Recognition**





Revenues
      are recognized during the period in which the revenues are earned. Costs and
      expenses are recognized during the period in which they are
      incurred.




**Recently
      Issued Accounting Pronouncements**





In
      November 2004, the FASB issued SFAS No. 151, Inventory Costs, an amendment
      of
      ARB No. 43, Chapter 4. SFAS No. 151 amends the guidance in ARB No. 43, Chapter
      4, Inventory Pricing, to clarify the accounting for abnormal amounts of idle
      facility expense, freight, handing costs, and spoilage. This statement requires
      that those items be recognized as current period charges regardless of whether
      they meet the criterion of "so abnormal" which was the criterion specified
      in
      ARB No. 43. In addition, this Statement requires that allocation of fixed
      production overheads to the cost of production be based on normal capacity
      of
      the production facilities. This pronouncement is effective for the Company
      beginning October 1, 2005. The Company does not believe adopting this new
      standard will have a significant impact to its financial
      statements.





In
      December 2004, the FASB issued SFAS No. 123 (revised 2004). Share-Based Payment,
      which is a revision of SFAS No. 123, Accounting for Stock-Based Compensation.
      SFAS No. 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued
      to
      Employees and amends SFAS No. 95, Statement of Cash Flows. Generally, the
      approach in SFAS No. 123(R) is similar to the approach described in SFAS No.
      123. However, SFAS No. 123(R) requires all share-based payments to employees,
      including grants of employee stock options, to be recognized in the income
      statement based on their fair values. Pro forma disclosure is no longer an
      alternative. The new standard will be effective for the Company in the first
      interim or annual reporting period beginning after December 15, 2005. The
      Company expects the adoption of this standard will have a material impact on
      its
      financial statements assuming employee stock options are granted in the
      future.





In
      May
      2005, The Financial Accounting Standards Board issued Statement of Financial
      Accounting Standard No. 154, “Accounting Changes and Error Corrections.” The
      Statement applies to all voluntary changes in accounting principle and to
      changes required by an accounting pronouncement that do not include explicit






13
 Table
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transition
      provisions. SFAS No. 154 requires that changes in accounting principle be
      retroactively applied, instead of including the cumulative effect in the income
      statement. The correction of an error will continue to require financial
      statement restatement. A change in accounting estimate will continue to be
      accounted for in the period of change and in subsequent periods, if necessary.
      SFAS No. 154 is effective for fiscal years beginning after December 31, 2005.
      We
      do not expect the adoption of this Statement to have a material impact on our
      financial condition or results of operations.




**Item
      7. Financial Statements**




Index
                to Audited Consolidated Financial Statements:F-1
            Report
                of Independent Registered Public Accounting
                Firm;F-2
            Balance
                Sheet as of December 31, 2005;F-3
            Statements
                of Operations - Years Ended December 31, 2005 and
                December 31, 2004;F-4
            Statement
                of Stockholders’ Equity (Deficit) and Comprehensive
                Loss for the Years EndedDecember
                31, 2005 and December 31, 2004;F-5
            Statements
                of Cash Flows for the Years Ended December 31,
                2005 and December 31, 2004;F-6
            Notes
                to Financial
                Statements;




14
 Table
          of Contents


REPORT
          OF
          INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
  
 To
          the
          Board of Directors
 Skinvisible,
          Inc.
 Las
          Vegas, Nevada
 
 We
          have
          audited the accompanying consolidated balance sheet of Skinvisible, Inc.
          as of
          December 31, 2005, and the related consolidated statements of operations,
          stockholders’ equity, and cash flows for the years ended December 31, 2005
          and 200 4.
          These
          consolidated financial statements are the responsibility of the Company’s
          management. Our responsibility is to express an opinion on these consolidated
          financial statements based on our audit.
 
 We
          conducted our audit in accordance with standards of the Public Company
          Accounting Oversight Board (United States). Those standards require that
          we plan
          and perform the audit to obtain reasonable assurance about whether the
          consolidated financial statements are free of material misstatement. An
          audit
          includes examining, on a test basis, evidence supporting the amounts and
          disclosures in the consolidated financial statements. An audit also includes
          assessing the accounting principles used and significant estimates made
          by
          management, as well as evaluating the overall consolidated financial statement
          presentation. We believe that our audit provides a reasonable basis for
          our
          opinion.
 
 In
          our
          opinion, the consolidated financial statements referred to above present
          fairly,
          in all material respects, the financial position of Skinvisible, Inc. as
          of
          December 31, 2005, and the consolidated results of its operations and cash
          flows
          for the years ended December 31, 2005 and 2004 in conformity with accounting
          principles generally accepted in the United States.
 
 The
          accompanying financial statements have been prepared assuming that the
          Company
          will continue as a going concern. As discussed in Note 1 to the financial
          statements, the Company has incurred losses from operations, which raise
          substantial doubt about its ability to continue as a going concern. Management's
          plans regarding those matters also are described in Note 1. Absent the
          successful completion of one of these alternatives, the Company’s operating
          results will increasingly become uncertain. The financial statements do
          not
          contain any adjustments that might result from the outcome of this
          uncertainty.
 
 
  Sarna
          & Company, Certified Public Accountants
 March
          8,
          2006
 Westlake
          Village, California
  Table
            of Contents
   **SKINVISIBLE,
        INC.**
 **CONSOLIDATED
        BALANCE SHEET**


ASSETS
                
                December
                    31, 2005Current
                    assetsCash
                $
                30,729Accounts
                    receivable
                
                127,989Inventory
                
                73,794Due
                    from related party
                
                4,765Prepaid
                    expense and other current assets
                
                6,344Total
                    current assets
                
                243,621Fixed
                    assets, net
                
                26,480Intangible
                    and other assetsPatents
                    and trademarks, net
                
                51,394License
                    and distributor rights
                
                50,000Prepaid
                    royalty fees
                
                900,000Total
                    assets
                $
                1,271,495LIABILITIES
                    AND STOCKHOLDERS' EQUITYCurrent
                    liabilitiesAccounts
                    payable and accrued liabilities
                $
                206,717Unearned
                    revenue
                
                978,000Total
                    current liabilities
                
                1,184,717--Long-term
                    liabilities1,184,717Total
                    liabilities--Commitments
                    and contingenciesStockholders'
                    equity58,225,248
                    shares issued and outstanding
                
                58,225Additional
                    paid-in capital
                
                11,486,002Stock
                    subscription payable
                
                134,873Accumulated
                    deficit
                
                (11,592,322)Total
                    stockholders' equity
                
                86,778$
                1,271,495Total
                    liabilities and stockholders' equity
  See
          Accompanying Report of Independent Registered Public Accounting Firm and
          Notes
          to Consolidated Financial Statement
   F-2
 Table
              of Contents
 **SKINVISIBLE,
            INC.**
 **CONSOLIDATED
            STATEMENT OF OPERATIONS**
 
 For
                        the twelve months ended
                    
                    
                    For
                        the twelve months endedDecember
                        31, 2005
                    
                    
                    December
                        31, 2004Revenues
                    $
                    850,280
                    
                    $
                    519,972Cost
                        of revenues
                    
                    140,399
                    
                    
                    96,781Gross
                        profit
                    
                    709,881
                    
                    
                    423,191Operating
                        expensesDepreciation
                        and amortization
                    
                    275,710
                    
                    
                    111,339Stock
                        based compensation
                    
                    241,803
                    
                    
                    32,150Selling
                        general and administrative
                    
                    1,225,626
                    
                    
                    1,084,674Total
                        operating expenses
                    
                    1,743,139
                    
                    
                    1,228,163Loss
                        before provision for income taxes
                    
                    (1,033,258)
                    
                    
                    (804,972)Other
                        income (expense)
                    
                    2,107
                    
                    
                    --Total
                        other income (expense)
                    
                    2,107
                    
                    
                    --Provision
                        for income taxes
                    
                    --
                    
                    
                    --Net
                        loss
                    $
                    (1,031,151)
                    
                    $
                    (804,972)Basic
                        income (loss) per common share
                    $
                    (0.02)
                    
                    $
                    (0.01)Diluted
                        income (loss) per common share
                    $
                    (0.02)
                    
                    $
                    (0.01)Basic
                        weighted average commonshares
                        outstanding
                    
                    57,263,522
                    
                    
                    55,625,248
  See
            Accompanying Report of Independent Registered Public Accounting Firm
            and Notes
            to Consolidated Financial Statement
  F-3
 Table
              of Contents
  **SKINVISIBLE,
            INC.**
 **CONSOLIDATED
            STATMENT OF STOCKHOLDERS' EQUITY**
   Stock
                    
                    
                    TotalCommon
                        Stock
                    
                    
                    Additional
                    
                    
                    Subscription
                    
                    
                    Accumulated
                    
                    
                    Stockholders'Shares
                    
                    
                    Amount
                    
                    
                    Paid-in
                        Capital
                    
                    
                    Receivable
                    
                    
                    Deficit
                    
                    
                    EquityBalance,
                        December 31, 2003
                    $
                    48,714,618
                    
                    
                    48,715
                    
                    $
                    10,450,665
                    
                    $
                    --
                    
                    $
                    (9,756,199)
                    
                    $
                    743,181Issuance
                        of stock for cash, weighted average price of $0.10 per
                        share
                    
                    6,579,130
                    
                    
                    6,579
                    
                    
                    601,315
                    
                    
                    --
                    
                    
                    --
                    
                    
                    607,894Issuance
                        of stock for services, $ 0.10 per share
                    
                    331,500
                    
                    
                    331
                    
                    
                    31,819
                    
                    
                    --
                    
                    
                    --
                    
                    
                    32,150Net
                        loss
                    
                    --
                    
                    
                    --
                    
                    
                    --
                    
                    
                    --
                    
                    
                    (804,972)
                    
                    
                    (804,972)Balance,
                        December 31, 2004
                    
                    55,625,248
                    
                    
                    55,625
                    
                    
                    11,083,799
                    
                    
                    --
                    
                    
                    (10,561,171)
                    
                    
                    578,253Issuance
                        of stock for services, $ 0.18 per share
                    
                    1,100,000
                    
                    
                    1,100
                    
                    
                    196,900
                    
                    
                    --
                    
                    
                    --
                    
                    
                    198,000Issuance
                        of stock in lieu of debt, $ 0.13 per share
                    
                    1,000,000
                    
                    
                    1,000
                    
                    
                    129,000
                    
                    
                    --
                    
                    
                    --
                    
                    
                    130,000Issuance
                        of stock for settlement of debt, $0.10 per share
                    
                    100,000
                    
                    
                    100
                    
                    
                    9,900
                    
                    
                    --
                    
                    
                    --
                    
                    
                    10,000Issuance
                        of stock for cash, $0.10 per share
                    
                    100,000
                    
                    
                    100
                    
                    
                    9,900
                    
                    
                    --
                    
                    
                    --
                    
                    
                    10,000Issuance
                        of stock in lieu of debt, $ 0.10 per share
                    
                    210,000
                    
                    
                    210
                    
                    
                    20,790
                    
                    
                    --
                    
                    
                    --
                    
                    
                    21,000Issuance
                        of stock for cash, $0.05 per share
                    
                    40,000
                    
                    
                    40
                    
                    
                    1,960
                    
                    
                    --
                    
                    
                    --
                    
                    
                    2,000Issuance
                        of stock for services, $ 0.21 per share
                    
                    50,000
                    
                    
                    50
                    
                    
                    10,450
                    
                    
                    --
                    
                    
                    --
                    
                    
                    10,500Cash
                        rceived for future issuance of stock
                    
                    --
                    
                    
                    --
                    
                    
                    --
                    
                    
                    134,873
                    
                    
                    --
                    
                    
                    134,873Issuance
                        of stock options
                    
                    --
                    
                    
                    --
                    
                    
                    4,257
                    
                    
                    --
                    
                    
                    --
                    
                    
                    4,257--Issuance
                        of stock warrants
                    
                    --
                    
                    
                    --
                    
                    
                    19,046
                    
                    
                    --
                    
                    
                    --
                    
                    
                    19,046--Net
                        loss
                    
                    --
                    
                    
                    --
                    
                    
                    --
                    
                    
                    --
                    
                    
                    (1,031,151)
                    
                    
                    (1,031,151)Balance,
                        December 31, 2005
                    
                    58,225,248
                    
                    $
                    58,225
                    
                    $
                    11,486,002
                    
                    $
                    134,873
                    
                    $
                    (11,592,322)
                    
                    $
                    86,778
  See
            Accompanying Report of Independent Registered Public Accounting Firm
            and Notes
            to Consolidated Financial Statement
   F-4
 Table
                of Contents
  **SKINVISIBLE,
              INC.**
 **CONSOLIDATED
              STATEMENT OF CASH FLOWS**
   For
                          the twelve months ended
                      
                      
                      For
                          the twelve months endedDecember
                          31, 2005
                      
                      
                      December
                          31, 2004Cash
                          flows from operating activities:Net
                          loss
                      $
                      (1,031,151)
                      
                      $
                      (804,972)Adjustments
                          to reconcile net loss to netcash
                          used by operating activities:Depreciation
                          and amortization
                      
                      275,710
                      
                      
                      111,339Stock
                          based compensation
                      
                      241,803
                      
                      
                      32,150Changes
                          in operating assets and liabilities:Change
                          in inventory
                      
                      38,848
                      
                      
                      (35,954)Change
                          in accounts receivable
                      
                      (108,048)
                      
                      
                      8,237Change
                          in prepaid expenses and other current assets
                      
                      (4,423)
                      
                      
                      (1,921)Change
                          in related party receivable
                      
                      16,361
                      
                      
                      (21,126)Change
                          in accounts payable and accrued liabilities
                      
                      11,399
                      
                      
                      (371,998)Change
                          in unearned revenue
                      
                      355,000
                      
                      
                      623,000Net
                          cash used by operating activities
                      
                      (204,501)
                      
                      
                      (461,245)Cash
                          flows from investing activities:Purchase
                          of fixed assets and untangible assets
                      
                      (4,077)
                      
                      
                      (54,215)Net
                          cash used by investing activities
                      
                      (4,077)
                      
                      
                      (54,215)Cash
                          flows from financing activities:Proceeds
                          from notes payable
                      
                      --
                      
                      
                      --Proceeds
                          from stock subscription payable
                      
                      134,873
                      
                      
                      --Proceeds
                          from issuance of common stock
                      
                      12,000
                      
                      
                      607,894Net
                          cash provided by financing activities
                      
                      146,873
                      
                      
                      607,894Net
                          change in cash
                      
                      (61,705)
                      
                      
                      92,434Cash,
                          beginning of year
                      
                      92,434
                      
                      
                      --Cash,
                          end of year
                      $
                      30,729
                      
                      $
                      92,434Supplemental
                          disclosure of cash flow information:Cash
                          paid for interest
                      $
                      --
                      
                      $
                      4,051Stock
                          issued for conversion of accounts payable, 100,000 shares
                          at
                          $0.10
                      $
                      21,000
                      
                      $
                      --
  See
              Accompanying Report of Independent Registered Public Accounting Firm
              and Notes
              to Consolidated Financial Statement
 F-5
 Table
              of Contents
  **SKINVISIBLE,
          INC.**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  1.  DESCRIPTION
            OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
  Description
            of business -
            Skinvisible, Inc., (referred to as the “Company”) is focused on the development
            and manufacture of innovative topical 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. The Company’s antibacterial/antimicrobial
            hand sanitizer formulations, available for private label commercialization
            opportunities, offer skincare solutions for the healthcare, food service,
            industrial, cosmetic and salon industries, as well as for personal use
            in the
            retail marketplace. The Company maintains manufacturing, executive and
            sales
            offices in Las Vegas, Nevada.
 
 History -
        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.
 
 During
        1999, the Company also formed a subsidiary titled Skinvisible International,
        Inc. and Skinvisible Pharmaceuticals (Canada), Inc. On January 1, 2000, the
        Company decided to discontinue operations of its subsidiary, Skinvisible
        International, Inc.
 
 Skinvisible,
        Inc. together with its subsidiaries shall herein be collectively referred
        to as
        the “Company”.
 
 Going
        concern -
        The
        accompanying financial statements have been prepared on a going concern basis,
        which contemplates the realization of assets and the satisfaction of liabilities
        in the normal course of business. The Company has incurred cumulative net
        losses
        of approximately $11,592,322 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 the 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 raise 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.
 
 Principles
        of consolidation -
        The
        consolidated financial statements include the accounts of the Company and
        its
        subsidiaries. All significant intercompany balances and transactions have
        been
        eliminated.
  Definition
        of fiscal year -
        The
        Company’s fiscal year end is December 31.
  Use
        of
        estimates -
        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.
  Revenue
        recognition -
        Revenues are recognized during the period in which the revenues are earned.
        Costs and expenses are recognized during the period in which they are
        incurred.
 
 Inventory -
        Substantially all inventory consist 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.
 
  F-6
 Table
            of Contents
  
 SKINVISIBLE,
          INC.
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
  1.    
        DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES(continued)
 
 Fixed
        assets -
        Fixed
        assets are stated at cost less accumulated depreciation. Depreciation is
        provided principally on the straight-line method over the estimated useful
        lives
        of the assets, which are generally 3 to 10 years. The cost of repairs and
        maintenance is charged to expense as incurred. Expenditures for property
        betterments and renewals are capitalized. Upon sale or other disposition
        of a
        depreciable asset, cost and accumulated depreciation are removed from the
        accounts and any gain or loss is reflected in other income (expense).
 
 The
        Company periodically evaluates whether events and circumstances have occurred
        that may warrant revision of the estimated useful life of fixed assets or
        whether the remaining balance of fixed assets should be evaluated for possible
        impairment. The Company uses an estimate of the related undiscounted cash
        flows
        over the remaining life of the fixed assets in measuring their recoverability.
 
 Goodwill
        and intangible assets -
        Beginning January 1, 2002, the Company adopted Statement of Financial Accounting
        Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets”. 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
        SFAS
        No. 142, the carrying value of assets are calculated at the lowest level
        for
        which there are identifiable cash flows.
 
 SFAS
        142
        requires the Company to compare the fair value of the reporting unit to its
        carrying amount on an annual basis to determine if there is potential
        impairment. If the fair value of the reporting unit is less than its carrying
        value, an impairment loss is recorded to the extent that the fair value of
        the
        goodwill within the reporting unit is less than its carrying value. Upon
        adoption and during 2002, the Company completed an impairment review and
        did not
        recognize any impairment of goodwill and other intangible assets already
        included in the financial statements. The Company expects to receive future
        benefits from previously acquired goodwill over an indefinite period of time.
        Accordingly, beginning January 1, 2002, the Company has foregone all related
        amortization expense. Prior to January 1, 2002, the Company amortized goodwill
        over an estimated useful life ranging from 3 to 15 years using the straight-line
        method.
 
 Fair
        value of financial instruments -
        Financial accounting standards Statement No. 107, “Disclosure About Fair Value
        of Financial Instruments”, requires the Company to disclose, when reasonably
        attainable, the fair market values of its assets and liabilities which are
        deemed to be financial instruments. The carrying amounts and estimated fair
        values of the Company’s financial instruments approximate their fair value due
        to the short-term nature.
 
 Earnings
        (loss) per share -
        Basic
        earnings (loss) per share exclude any dilutive effects of options, warrants
        and
        convertible securities. Basic earnings (loss) per share is computed using
        the
        weighted-average number of outstanding common stocks during the applicable
        period. Diluted earnings per share is computed using the weighted-average
        number
        of common and common stock equivalent shares outstanding during the period.
        Common stock equivalent shares are excluded from the computation if their
        effect
        is antidilutive.
 
 Income
        taxes -
        The
        Company accounts for its income taxes in accordance with Statement of Financial
        Accounting Standards No. 109, 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.
 
 Comprehensive
        income (loss) -
        The
        Company has no components of other comprehensive income. Accordingly, net
        loss
        equals comprehensive loss for all periods.
 
  F-7
 Table
            of Contents
   1. DESCRIPTION
        OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES (continued)
 
 Segment
        information -
        The
        Company discloses segment information in accordance with Statements of Financial
        Accounting Standards (SFAS) No. 131, “Disclosures about Segments of an
        Enterprise and Related Information,” which uses the Management approach to
        determine reportable segments. The Company operates under one segment.
 
 Advertising
        costs -
        Advertising costs incurred in the normal course of operations are expensed
        as
        incurred. During the years ended December 31, 2005 and 2004, the Company
        incurred advertising costs totaling $32,913 and $9,555, respectively.
 
 Research
        and development costs -
        Research and development costs are charged to expense when incurred. Costs
        incurred to internally develop the product, including costs incurred during
        all
        phases of development, are charged to expense as incurred.
 
 Expenses
        of offering -
        The
        Company accounts for specific incremental costs directly to a proposed or
        actual
        offering of securities as a direct charge against the gross proceeds of the
        offering.
 
 Stock-based
        compensation -
        The
        Company applies Accounting Principles Board (“APB”) Opinion No. 25, Accounting
        for Stock Issued to Employees, and Related Interpretations, in accounting
        for
        stock options issued to employees. Under APB No. 25, employee compensation
        cost
        is recognized when estimated fair value of the underlying stock on date of
        the
        grant exceeds exercise price of the stock option. For stock options and warrants
        issued to non-employees, the Company applies SFAS No. 123, Accounting for
        Stock-Based Compensation, which requires the recognition of compensation
        cost
        based upon the fair value of stock options at the grant date using the
        Black-Scholes option pricing model.
 
 The
        following table represents the effect on net loss and loss per share if the
        Company had applied the fair value based method and recognition provisions
        of
        Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
        Stock-Based Compensation", to stock-based employee compensation:
 
 2004
                
                
                2005Net
                    loss, as
                    reported
                $
                (804,972)
                
                $
                (966,475)Add:
                    Stock-based employee compensationexpense
                    included in reported loss,net
                    of related tax
                    effects
                
                -0-
                
                
                -0-Deduct:
                    Total stock-based employeecompensation
                    expense determined underfair
                    value based methods for all awards,net
                    of related tax
                    effects
                
                -0-
                
                
                -0-Pro
                    forma net
                    loss
                $
                (804,972)
                
                $
                (966,475)Net
                    loss per common share
                $
                (0.01)
                
                $
                (0.02)Basic
                    and diluted loss, pro
                    forma
                $
                (0.01)
                
                $
                (0.02)
  
 F-8
 Table
            of Contents
 
  1. DESCRIPTION
        OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES (continued)
 
 As
        required, the pro forma disclosures above include options granted for years
        ended December 31, 2004 and 2005. Consequently, the effects of applying SFAS
        123
        for providing pro forma disclosures may not be representative of the effects
        on
        reported net income for future years until all options outstanding are included
        in the pro forma disclosures.
 
 In
        December 2003, the FASB issued SFAS No. 148, "Accounting for Stock-Based
        Compensation-Transition and Disclosure". SFAS No. 148 amends the transition
        and
        disclosure provisions of SFAS No. 123. The Company is currently evaluating
        SFAS
        No. 148 to determine if it will adopt SFAS No. 123 to account for employee
        stock
        options using the fair value method and, if so, when to begin transition
        to that
        method.
 
 New
        accounting pronouncements - In
        November 2004, the FASB issued SFAS No. 151, Inventory Costs, an amendment
        of
        ARB No. 43, Chapter 4. SFAS No. 151 amends the guidance in ARB No. 43, Chapter
        4, Inventory Pricing, to clarify the accounting for abnormal amounts of idle
        facility expense, freight, handing costs, and spoilage. This statement requires
        that those items be recognized as current period charges regardless of whether
        they meet the criterion of "so abnormal" which was the criterion specified
        in
        ARB No. 43. In addition, this Statement requires that allocation of fixed
        production overheads to the cost of production be based on normal capacity
        of
        the production facilities. This pronouncement is effective for the Company
        beginning October 1, 2005. The Company does not believe adopting this new
        standard will have a significant impact to its financial
        statements.
 
 In
        December 2004, the FASB issued SFAS No. 123 (revised 2004). Share-Based Payment,
        which is a revision of SFAS No. 123, Accounting for Stock-Based Compensation.
        SFAS No. 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued
        to
        Employees and amends SFAS No. 95, Statement of Cash Flows. Generally, the
        approach in SFAS No. 123(R) is similar to the approach described in SFAS
        No.
        123. However, SFAS No. 123(R) requires all share-based payments to employees,
        including grants of employee stock options, to be recognized in the income
        statement based on their fair values. Pro forma disclosure is no longer an
        alternative. The new standard will be effective for the Company in the first
        interim or annual reporting period beginning after December 15, 2005. The
        Company expects the adoption of this standard will have a material impact
        on its
        financial statements assuming employee stock options are granted in the
        future.
 
 In
        May
        2005, The Financial Accounting Standards Board issued Statement of Financial
        Accounting Standard No. 154, “Accounting Changes and Error Corrections.” The
        Statement applies to all voluntary changes in accounting principle and to
        changes required by an accounting pronouncement that do not include explicit
        transition provisions. SFAS No. 154 requires that changes in accounting
        principle be retroactively applied, instead of including the cumulative effect
        in the income statement. The correction of an error will continue to require
        financial statement restatement. A change in accounting estimate will continue
        to be accounted for in the period of change and in subsequent periods, if
        necessary. SFAS No. 154 is effective for fiscal years beginning after December
        31, 2005. We do not expect the adoption of this Statement to have a material
        impact on our financial condition or results of operations.
 
 Reclassification -
        The
        financial statements from 2004 reflect certain reclassifications, which have
        no
        effect on net income, to conform to classifications in the current year.
 
 2. FIXED
        ASSETS
 
 Fixed
        assets consist of the following as of December 31, 2005:
  Machinery
                and equipment
              $
              55,463Computers,
                equipment and software
              
              113,635Furniture
                and fixtures
              
              40,223Lab
                equipment
              
              115,946325,267Less:
                accumulated depreciation
              
              298,787Fixed
                assets, net
              $
              26,480
   F-9
 Table
            of Contents
   3. INTANGIBLE
        AND OTHER ASSETS
 
 Patents
        and trademarks are capitalized at its historical cost and are amortized over
        their useful lives. As of December 31, 2005, patents and trademarks total
        $70,233, net of accumulated amortization of $18,839.
 
 License
        and distributor rights (“agreement”) was acquired by the Company in January 1999
        and provides 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 December 31, 2005.
 
 Prepaid
        royalties fees are amounts prepaid by the Company related to the license
        and
        distributor rights. The future royalties payments required by the Company
        total
        $2,000,000. The royalties fees are to be paid at the equal to the greater
        of (a)
        $6,000 per month; or (b) 1.5% of net revenues realized by the sale of the
        associated polymer products subject to a cap of $2,000,000. The Company will
        make payments of $6,000 per month, and by a payment on any royalties in excess
        of $72,000 in each year payable on annual basis calculated within 60 days
        of
        each anniversary date of the agreement. As of December 31, 2005, the Company
        has
        paid a total of $1,610,000 of which $710,000 has been expensed and $900,000
        has
        been recorded as prepaid royalties which will expense in the future in
        accordance to the terms of the agreement. The remaining future royalties
        payments related to the agreement approximates $390,000.
 
 4.  STOCK
        OPTIONS AND WARRANTS
 
 Stock
        options -
        During
        the year ended December 31, 2005 and 2004, the Company granted stock options
        totaling 35,000 and -0- shares of its common stock with a weighted average
        strike price of $0.13 and $-0- per share, respectively. Certain stock options
        were exercisable upon grant and have a life ranging from 3 months to 5 years.
        As
        of December 31, 2005, stock options outstanding totaled 1,810,000 with a
        weighted average strike price of $0.13 per share.
 
 Stock
        warrants -
        During
        the year ended December 31, 2005 and 2004, the Company granted stock warrants
        totaling 145,000 and -0- shares of its common stock with a weighted average
        strike price of $0.13 and $-0- per share, respectively. As of December 31,
        2005,
        stock warrants outstanding totaled 8,077,500 with a weighted average strike
        price of $0.13 per share.
 
 5. LETTER
        OF INTENT AND DEFINITIVE AGREEMENT
 
 In
        March
        2004, the Company entered into a letter of intent (“LOI”) with Dermal Defense,
        Inc. for the exclusive marketing and distribution rights to its patented
        Antimicrobial Hand Sanitizer product for North America. Terms of the LOI
        require
        Dermal Defense, Inc. to pay a fee of $1 million comprising of a non-refundable
        deposit of $250,000 with the balance of $750,000 payable as to $75,000 per
        calendar quarter or 5% of product sales (whichever is greater) until the
        entire
        $750,000 is received. The $1 million fee will be recognized as revenue ratably
        over a five year period. As of December 31, 2005, the Company has received
        $717,000 and has reflected $417,000 as unearned revenue and $300,000 as revenue
        in the accompanying consolidated financial statements. In addition and further
        to the payment fee of $1 million, Dermal Defense, Inc. agrees to pay a royalty
        fee of 5% on product sales of the Antimicrobial Hand Sanitizer.
 
 
 F-10
 Table
            of Contents
 
  5. LETTER
        OF INTENT AND DEFINITIVE AGREEMENT (continued)
 
 In
        June
        2004, the Company entered into a definitive agreement with Cross Global,
        Inc.
        (“Cross Global”) whereby, the Company would provide exclusive marketing and
        distribution rights to its proprietary "Sunless Tanning Spray Formulation"
        for
        Canada, the United States, Mexico, Austria, Belgium, Denmark, Finland, France,
        Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain,
        Sweden, United Kingdom and Israel. In addition CGI is granted the right to
        use
        the name "Solerra(TM)" within the territory. Terms of the agreement require
        Cross Global to pay a fee of $1 million comprising of a non-refundable deposit
        of $200,000 with the balance of $800,000 payable as $200,000 due August 30,
        2004, November 30, 2004, February 28, 2005 and May 30, 2005. The $1 million
        fee
        will be recognized as revenue ratably over a five year period. As of December
        31, 2005, the Company has received $700,000 and has reflected $475,000 as
        unearned revenue and $225,000 as revenue in the accompanying consolidated
        financial statements. In addition and further to the payment fee of $1 million
        Cross Global agrees to pay a royalty fee of 5% on product sales of the Sunless
        Tanning Spray Formulation.
 
 In
        May
        2005, the Company entered into a distribution agreement with Safe4Hours,
        Inc.
        (“Safe4Hours”) whereby, the Company would provide exclusive marketing and
        distribution rights to its proprietary antimicrobial hand sanitizer for all
        countries of the world except Canada, United States, and Mexico. Terms of
        the
        agreement require Safe4Hours to pay a fee of $1 million comprising of a
        non-refundable deposit of $25,000 with the balance of $975,000 payable as
        recognized as revenue ratably over a five year period. As of December 31,
        2005,
        the Company has received $95,000 and has reflected $175,000 as revenue in
        the
        accompanying consolidated financial statements. The Company has yet to receive
        $80,000 as reflected under the contract. This amount that is due to the Company
        has been record as an accounts receivable. In addition and further to the
        payment fee of $1 million Safe4Hours, Inc. agrees to pay a royalty fee of
        5% on
        product sales of the antimicrobial hand sanitizer beginning in the 3 rd quarter
        of 2005.
 
 In
        October 2005, the Company entered into a distribution agreement with EMD
        Chemicals Inc. (“EMD”) whereby, the Company would provide exclusive marketing
        and distribution rights to its proprietary polymer delivery system “Invisicare”
for all countries of the world. Terms of the agreement states that the Company
        would grant EMD options to purchase shares of their common stock. A stock
        option
        agreement was executed on February 27, 2006, where the Company granted EMD
        the
        option to purchase 5,817,525 shares of common stock at the exercise price
        of
        $0.172 per share until December 31, 2006.
 
 6. COMMITMENTS
        AND CONTINGENCIES
 
 Lease
        obligations - The
        Company has operating leases for its offices. Future minimum lease payments
        under the operating leases for the facilities as of December 31, 2005 are
        as
        follows:
  2006  $ 98,771
 
 Rental
        expense, resulting from operating lease agreements, approximated $91,356
        for the
        year ended December 31, 2005.
 
 7.
            SUBSEQUENT
                EVENTS 
 As
        of
        February 9, 2006 the Company has issued 900,000 shares to fulfill the stock
        subscription as of December 31, 2005.


F-11
 Table
          of Contents






**Item
      8. Changes In and Disagreements With Accountants on Accounting and
      Financial Disclosure**





No
      events
      occurred requiring disclosure under Item 304(b) of Regulation S-B.





**Item
      8A. Controls and Procedures**





We
      carried out an evaluation of the effectiveness of the design and operation
      of
      our disclosure controls and procedures (as defined in Exchange Act Rules
      13a-15(e) and 15d-15(e)) as of December 31, 2005. This evaluation was carried
      out under the supervision and with the participation of our Chief Executive
      Officer and Chief Financial Officer, Mr. Terry Howlett. Based upon that
      evaluation, our Chief Executive Officer and Chief Financial Officer concluded
      that, as of December 31, 2005, our disclosure controls and procedures are
      effective. There have been no significant changes in our internal controls
      or in
      other factors, which could significantly affect internal controls subsequent
      to
      the date we carried out our evaluation.





Disclosure
      controls and procedures are controls and other procedures that are designed
      to
      ensure that information required to be disclosed in our reports filed or
      submitted under the Exchange Act are recorded, processed, summarized and
      reported, within the time periods specified in the Securities and Exchange
      Commission's rules and forms. Disclosure controls and procedures include,
      without limitation, controls and procedures designed to ensure that information
      required to be disclosed in our reports filed under the Exchange Act are
      accumulated and communicated to management, including our Chief Executive
      Officer and Chief Financial Officer, to allow timely decisions regarding
      required disclosure.





Limitations
      on the Effectiveness of Internal Controls





Our
      management does not expect that our disclosure controls and procedures or our
      internal control over financial reporting necessarily prevent all fraud and
      material error. Our disclosure controls and procedures are designed to provide
      reasonable assurance of achieving our objectives and our Chief Executive Officer
      and chief Financial Officer concluded that our disclosure controls and
      procedures are effective at that reasonable assurance level. Further, the design
      of a control system must reflect the fact that there are resource constraints,
      and the benefits of controls must be considered relative to their costs. Because
      of the inherent limitations in all control systems, no evaluation of controls
      can provide absolute assurance that all control issues and instances of fraud,
      if any, within the Company have been detected. These inherent limitations
      include the realities that judgments in decision-making can be faulty, and
      that
      breakdowns can occur because of simple error or mistake. Additionally, controls
      can be circumvented by the individual acts of some persons, by collusion of
      two
      or more people, or by management override of the internal control. The design
      of
      any system of controls also is based in part upon certain assumptions about
      the
      likelihood of future events, and there can be no assurance that any design
      will
      succeed in achieving its stated goals under all potential future conditions.
      Over time, control may become inadequate because of changes in conditions,
      or
      the degree of compliance with the policies or procedures may deteriorate.





**Item
      8B. Other Information**





None.




15
 Table
          of Contents




**PART
      III**





**Item
      9. Directors, Executive Officers, Promoters and Control Persons; Compliance
      with
      Section 16(a)****of
      the Exchange Act**





The
      following information sets forth the names of our current directors and
      executive officers, their ages and their present positions with the Company
      as
      of December 31, 2005.





Name
            Age
            Office(s)
                HeldTerry
                Howlett
            58
            Chief
                Executive Officer, Chief Financial Officer, and
                DirectorJost
                Steinbruchel
            66
            DirectorGreg
                McCartney
            55
            Director





**Mr.
      Terry H. Howlett** has been
      our Chief Executive Officer and Director since March 5, 1998. Mr. Howlett has
      a
      diversified background in market initialization and development, sales and
      venture capital financing for emerging growth companies. He has held senior
      management, marketing and sales positions with various companies, including
      the
      Canadian Federation of Independent Business, Family Life Insurance, and Avacare
      of Canada and founded Presley Laboratories, Inc., which marketed cosmetic and
      skin, care products on a direct sales basis. For the ten years prior to becoming
      President of the Company, Mr. Howlett was the President and CEO of Voice-it
      Solutions, Inc., a publicly traded company on the Vancouver Stock exchange
      that
      made voice response software for order entry systems .




**Mr.
      Jost Steinbruchel** has been
      a Director of the Company since February 17, 1999. Mr. Steinbruchel has operated
      his own company since 1984, in Geneva Switzerland specializing in financial
      engineering in international trade throughout a wide network of banking
      relations, principally in Europe, China, Australia and Africa. Previously,
      he
      spent 20 years of his professional career as an executive in international
      banking with Lloyds of London, Citicorp and Credit Suisse. Mr. Steinbruchel
      has
      a law degree from Sorboure, Paris.





**Mr.
      Greg McCartney** was
      elected as a director of the Company since January 10, 2005. Mr. McCartney
      is
      currently the Chairman of the Board for Genesis Bioventures and also formerly
      served as their CEO. Genesis Bioventures is currently trading on the OTCBB.
      Mr.
      McCartney has over 20 years experience serving as officer and director of both
      private and public companies in various manufacturing and technology industries.
      Prior to founding BioLabs in 1997, Mr. McCartney was the founder and director
      of
      Aspenwood Holdings Corporation, a business consulting firm specializing in
      financing, public relations and venture capital in the technology and
      manufacturing industries. From 1986 to 1995 he was the President of an emerging
      high technology company and also served as officer and director of other
      companies. Previously, he was involved with international real estate and land
      development.





**Term
      of Office**





Our
      directors are appointed for a one-year term to hold office until the next annual
      meeting of our shareholders or until removed from office in accordance with
      our
      bylaws.





**Significant
      Employees**





We
      have
      one significant employee that makes a significant contribution to our business
      other than our officers and directors.






16
 Table
          of Contents







**Dr.
      James A. Roszell,** **Ph.D,** is
      a
      doctoral chemist with over 35 years' experience in product formulation,
      experimental design, analysis, and method validation. Since joining
      Skinvisible in 1998, he has been responsible for research and
      development of our patented technology, related polymer delivery vehicles,
      product formulations and compositions. Dr. Roszell is a joint contributor
      to Skinvisible's Patent Number 6.756.059 and responsible for our four
      pending patents. Prior to joining Skinvisible, he worked as chemist
      for Supertech Products, Inc. in Florida where his responsibilities included
      ensuring compliance with OSHA, EPA and other standards and regulations,
      maintenance of quality control, research and development for new products.
      Dr.
      Roszell's background includes work in chemical, pharmaceutical,
      environmental and clinical laboratory arenas. His chemical and scientific
      expertise makes a significant contribution to our business.





**Family
      Relationships**





There
      are
      no family relationships between or among the directors, executive officers
      or
      persons nominated or chosen by the Company to become directors or executive
      officers.





**Involvement
      in Certain Legal Proceedings**





To
      the
      best of our knowledge, during the past five years, none of the following
      occurred with respect to a present or former director, executive officer, or
      employee : (1) any bankruptcy petition filed by or against any business of
      which
      such person was a general partner or executive officer either at the time of
      the
      bankruptcy or within two years prior to that time; (2) any conviction in a
      criminal proceeding or being subject to a pending criminal proceeding (excluding
      traffic violations and other minor offenses); (3) being subject to any order,
      judgment or decree, not subsequently reversed, suspended or vacated, of any
      court of any competent jurisdiction, permanently or temporarily enjoining,
      barring, suspending or otherwise limiting his involvement in any type of
      business, securities or banking activities; and (4) being found by a court
      of
      competent jurisdiction (in a civil action), the SEC or the Commodities Futures
      Trading Commission to have violated a federal or state securities or commodities
      law, and the judgment has not been reversed, suspended or vacated.





**Audit
      Committee**





We
      do not
      have a separately-designated standing audit committee. The entire board of
      directors performs the functions of an audit committee, but no written charter
      governs the actions of the board of directors when performing the functions
      of
      that would generally be performed by an audit committee. The board of directors
      approves the selection of our independent accountants and meets and interacts
      with the independent accountants to discuss issues related to financial
      reporting. In addition, the board of directors reviews the scope and results
      of
      the audit with the independent accountants, reviews with management and the
      independent accountants our annual operating results, considers the adequacy
      of
      our internal accounting procedures and considers other auditing and accounting
      matters including fees to be paid to the independent auditor and the performance
      of the independent auditor.





For
      the
      fiscal year ending December 31, 2005, the board of directors:





1.
            Reviewed
                and discussed the audited financial statements with management,
                and





2.
            Reviewed
                and discussed the written disclosures and the letter from our independent
                auditors on the matters relating to the auditor’s
                independence.







17
 Table
          of Contents






Based
      upon the board of directors’ review and discussion of the matters above, the
      board of directors authorized inclusion of the audited financial statements
      for
      the year ended December 21, 2005 in this Annual Report on Form 10-KSB and filed
      with the Securities and Exchange Commission.





**Section
      16(A) Beneficial Ownership Reporting Compliance**





Section
      16(a) of the Securities Exchange Act of 1934 requires our directors and
      executive officers and persons who beneficially own more than ten percent of
      a
      registered class of the Company’s equity securities to file with the SEC initial
      reports of ownership and reports of change in ownership of common stock and
      other equity securities of the Company. Officers, directors and greater than
      ten
      percent beneficial shareholders are required by SEC regulations to furnish
      us
      with copies of all Section 16(a) forms they file. To the best of our knowledge
      based solely on a review of Forms 3, 4, and 5 (and any amendments thereof)
      received by us during or with respect to the year ended December 31, 2005,
      the
      following persons have failed to file, on a timely basis, the identified reports
      required by Section 16(a) of the Exchange Act during the fiscal year ended
      December 31, 2005:





Name
                and principal position
            Number
                of
              late
                reports
            Transactions
                not
              timely
                reported
            Known
                failures to
              file
                a required formTerry
                Howlett
              CEO,
                CFO, and Director
            5
            6
            0Jost
                Steinbruchel
              Director
            1
            3
            0Greg
                McCartney
              Director
            1
            1
            0





**Code
      of Ethics Disclosure**





We
      adopted a Code of Ethics for Financial Executives, which include our principal
      executive officer, principal financial officer, principal accounting officer
      or
      controller, or persons performing similar functions. The Code of Ethics was
      filed as an exhibit to the annual report on Form 10KSB for the fiscal year
      ended
      December 31, 2004 and filed with the SEC on April 14, 2005.




**Item
      10. Executive Compensation**





The
      table
      below summarizes all compensation awarded to, earned by, or paid to our
      executive officers for each of the last three completed fiscal
      years.





Annual
                Compensation
            Long
                Term CompensationName
            Title
            Year
            Salary
              ($)
            Bonus
              ($)
            Other
                Annual Compensation
              ($)
            Restricted
                Stock Awarded
              ($)
            Warrants
              &
                Options
              (#)
            LTIP
                payouts
              ($)
            All
                Other Compensation
              ($)Terry
                Howlett
            Director,
                CEO, and CFO
            2005
              2004
              2003
            $145,000
              $198,242
              $73,000
            0
              0
              0
            $24,522
              0
              0
            85,000
              0
              0
            0
              0
              1,200,000
            0
              0
              0
            0
              0
              0





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**Compensation
      to Directors**





On
      February 4, 2005, we issued 500,000 shares of restricted common stock each
      Terry
      Howlett and Jost Steinbruchel in connection with services rendered during the
      2004 fiscal year to us as members of our board of directors. During the year
      ended December 31, 2005, we issued Mr. Greg McCartney options to purchase
      100,000 shares of our common stock at the exercise price of $0.10 per shares
      exercisable for a period of five years from the date of issuance.





**Stock
      Option Grants**





We
      did
      not grant any stock options to our executive officers during the year ended
      December 31, 2005. We have not granted any stock options to our executive
      officers since December 31, 2005.





**Item
      11. Security Ownership of Certain Beneficial Owners and Management and Related
      Stockholder****Matters**





The
      following table sets forth information regarding the beneficial ownership of
      our
      shares of common stock at February 28, 2006 by (i) each person known by us
      to be
      the beneficial owner of more than 5% of our outstanding shares of common stock,
      (ii) each of our directors, (iii) our executive officers, and (iv) by all
      directors and executive officers as a group. Each person named in the table,
      has
      sole voting and investment power with respect to all shares shown as
      beneficially owned by such person.




**Title
                of class**
            **Name
                and address of beneficial owner**
            **Amount
                of beneficial ownership**
            **Percent
                of class**Common
            Terry
                Howlett
              6320
                South Sandhill Road, Suite 10
              Las
                Vegas, Nevada 89120
            5,893,052
            13.6%1Common
            Jost
                Steinbruchel
              6320
                South Sandhill Road, Suite 10
              Las
                Vegas, Nevada 89120
            1,750,000
            5.4%2Common
            Greg
                McCartney
              6320
                South Sandhill Road, Suite 10
              Las
                Vegas, Nevada 89120
            0
            0.2%3**Total
                of all directors and executive officers**
            7,643,052
            19.2%Common
            Lutz
                Family Trust
              71
                Biltmore Estates
              Phoenix,
                Arizona 85016
            6,500,000
            10.9%Common
            York
                Fidelity Limited
              63
                Market Street #20-04
              Singapore
                048942
            4,800,000
            8.0%




The
      percent of class is based on 59,667,748 shares of common stock issued and
      outstanding as of February
      28, 2006.




As
      used in this table, "beneficial ownership" means
      the sole or shared power to vote, or to direct the voting




19
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of,
      a security, or the sole or shared investment power with respect to a security
      (i.e., the power to dispose of, or to direct the disposition of, a security).
      In
      addition, for purposes of this table, a person is deemed, as of any date, to
      have "beneficial ownership" of any security that such person has the right
      to
      acquire within 60 days after such date.





1 Includes
      options that may be exercised immediately to purchase 1,200,000 shares of common
      stock at a price of 0.05 per share and warrants that may be exercised
      immediately to purchase 1,000,000 shares of common stock at a price of $0.05
      per
      share.





2 Includes
      options that may be exercised immediately to purchase 300,000 shares of common
      stock at a price of $0.05 per share, warrants that may be exercised immediately
      to purchase 1,000,000 shares of common stock at a price of $0.05 per share,
      and
      warrants that may be exercised immediately to purchase 150,000 shares of common
      stock at a price of $0.15 per share.





3 Includes
      options that may be exercised immediately to purchase 100,000 shares of common
      stock at a price of $0.10 per share.





**Item
      12. Certain Relationships and Related
      Transactions**





Except
      as
      disclosed, none of our directors or executive officers, nor any proposed nominee
      for election as a director, nor any person who beneficially owns, directly
      or
      indirectly, shares carrying more than 5% of the voting rights attached to all
      of
      our outstanding shares, nor any members of the immediate family (including
      spouse, parents, children, siblings, and in-laws) of any of the foregoing
      persons has any material interest, direct or indirect, in any transaction during
      the last two years or in any presently proposed transaction which, in either
      case, has or will materially affect us





**Item
      13. Exhibits**





Exhibit
                Number
            Description10.1
            Distribution
                Agreement with Safe4Hours, Inc.110.2
            Master
                Sales, Collaboration and Distribution Agreement with EMD Chemicals,
                Inc.214.1
            Code
                of Ethics331.1
            Certification
                of Chief Executive Officer pursuant to
                Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant
                to
                Section 302 of the Sarbanes-Oxley Act of 200231.2
            Certification
                of Chief Financial Officer pursuant to
                Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant
                to
                Section 302 of the Sarbanes-Oxley Act of 200232.1
            Certification
                of Chief Executive Officer and Chief
                Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
                pursuant
                to Section 906 of the Sarbanes-Oxley Act of
                2002





(1)  Previously
      filed as an exhibit to Current report on Form 8-K filed with the Securities
      and
      Exchange Commission on May 11, 2005


(2)  Previously
      filed as an exhibit to Current report on Form 8-K filed with the Securities
      and
      Exchange Commission on October 13, 2005


(3) Previously
      filed as an exhibit to Current report on Form 10-KSB filed with the Securities
      and Exchange Commission on April 14, 2005.




20
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**Item
      14. Principal Accountant Fees and
      Services**





**Audit
      Fees**





The
      aggregate fees billed by our auditors for professional services rendered in
      connection with a review of the financial statements included in our quarterly
      reports on Form 10-QSB and the audit of our annual consolidated financial
      statements for the fiscal years ended December 31, 2004 and 2005 were
      approximately $29,140 and $19,890 respectively.





**Audit-Related
      Fees**





Our
      auditors did not bill any additional fees for assurance and related services
      that are reasonably related to the performance of the audit or review of our
      financial statements.





**Tax
      Fees**





The
      aggregate fees billed by our auditors for professional services for tax
      compliance, tax advice, and tax planning were $0 and $0 for the fiscal years
      ended December 31, 2004 and 2005.





**All
      Other Fees**





The
      aggregate fees billed by our auditors for all other non-audit services, such
      as
      attending meetings and other miscellaneous financial consulting, for the fiscal
      years ended December 31, 2004 and 2005 were $0 and $0 respectively.




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**SIGNATURES**





Pursuant
      to the requirements of Section 13 and 15 (d) of the Securities Exchange Act
      of
      1934, the Registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized.








**Skinvisible,
                Inc.**By:
            /s/
                Terry HowlettTerry
                HowlettChief
                Executive Officer, and Chief Financial OfficerDate:March
                29, 2006




In
      accordance with the requirements of the Securities Act of 1933, this
      registration statement was signed by the following persons in the capacities
      and
      on the date stated:




By:      /s/ Terry
                Howlett
              Terry
                Howlett
              Director
            By:    
                /s/ Jost Steinbruchel
              Jost
                  Steinbruchel
                DirectorBy:     
                /s/
                Greg McCartney
              Greg
                McCartney
              Director