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, 2004[  
      ]
    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**
    **88-033442219**(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)
      433-7154Securities
      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: $519,972
 
 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. $3,817,947
as of March 22, 2005 . ****
 
 State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date.
 56,725,248
Common Shares as of March 22, 2005
 
 Transitional
Small Business Disclosure Format (Check One): Yes: __; No X
  1
 ***Table of
Contents***
  
 **TABLE OF CONTENTS**
  
 PagePART IItem
      1:
    Description of Business
    3Item
      2:
    Description of Property
    7Item
      3:
    Legal Proceedings
    7Item
      4:
    Submission of Matters to a Vote of Security
      Holders
    8PART IIItem
      5:
    Market for Common Equity and Related
      Stockholder Matters
    9Item
      6:
    Management’s Discussion and Analysis
    12Item
      7:
    Financial Statements
    15Item
      8:
    Changes In and Disagreements With Accountants
      on Accounting and Financial Disclosure
    16Item
      8A:
    Controls and Procedures
    16Item
      8B:
    Other Information
    16PART IIIItem
      9:
    Directors, Executive Officers, Promoters and
      Control Persons; Compliance With Section 16(a) of the Exchange
      Act
    17Item
      10:
    Executive Compensation
    20Item
      11:
    Security Ownership of Certain Beneficial Owners and
      Management and Related Stockholder Matters
    21Item
      12:
    Certain Relationships and Related
      Transactions
    22Item
      13:
    Exhibits
    22Item
      14:
    Principal Accountant Fees and
      Services
    22
 
  2
 ***Table of
Contents***
  **PART I**
 
 **Item
1:**   **Description of Business**
 
 **Company
Overview**
 
 We were
organized as a Nevada corporation on March 5, 1998 under the name "Microbial
Solutions, Inc." On February 26, 1999, we changed our name to "Skinvisible,
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
when topically applied hold active ingredients on the skin for up
to four hours. 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 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, sunscreen products, skincare
moisturizers, sunless tanning sprays, incontinence lotion, anti-fungals, and
acne. We are in the process of developing polymer formulations that can
successfully be utilized in insect repellents and liquid bandages.
 
 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 and
continuously are engaged in developing additional applications for our polymer
delivery vehicles.
 
 **Manufacture
and Distribution**
 
 We
previously manufactured our polymer delivery vehicles and products that
incorporate our polymer delivery on-site at our facility at 6320 South Sandhill
Road, Unit #10, Las Vegas, Nevada 89120. We also formerly distributed these
manufactured products from our facility. We engaged an outside party that
currently handles all of our manufacturing and distribution needs. At the
present time, we only perform research and development at our
facility.
 
 3
 ***Table of
Contents***
 ****
 **Description
of Current Products and Agreements**
 
 Antibacterial/Antimicrobial
Hand Sanitizer
 
 On July
9, 2003 our wholly-owned subsidiary, Skinvisible Pharmaceuticals, Inc.
(“Skinvisible”) signed a letter of intent with Health First Distributors North
America, Inc. of British Columbia, Canada (“Health First’) to grant Health First
the exclusive marketing and distribution rights to the antimicrobial hand
sanitizer product we manufacture that which utilizes the active ingredient
Triclosan 1% (the “Product”) in the North American countries of Canada, United
States, and Mexico. Due to Health First’s failure to satisfy certain conditions
set forth in the letter of intent, we never entered into a formalized License
Agreement and no further negotiations occurred.
 
 Our
management continued its attempts to license the exclusive marketing and
distribution rights to our antimicrobial hand sanitizer which utilizes the
active ingredient Triclosan 1% and entered into a letter of intent with Dermal
Defense, Inc. (“Dermal Defense”) on or about March 24, 2004. On February 21,
2005, we entered into a definitive distribution agreement with Dermal Defense.
Under the terms of 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.
 
 Dermal
Defense acquired these rights for the purchase price of $1,000,000. Dermal
Defense has already paid $475,000 of this purchase price. The remaining balance
is due and payable on a quarterly basis in the amount of $75,000 or 5% of gross
revenue from sales of the licensed product, whichever is greater until paid in
full.
 
 In
addition and under the terms of the 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. Under the
terms of this agreement, Dermal Defense is prohibited from manufacturing,
marketing, distributing, or selling any competing product while this agreement
is in full force and effect.
 
 Dermal
Defense was granted an option to acquire the exclusive marketing and
distribution rights for our antimicrobial hand sanitizer globally. This option
expired on March 30, 2005. If this option was exercised, Dermal Defense would
have been required to pay us $1 Million and a 5% royalty on all sales of the
licensed product globally. We are currently negotiating with Dermal Defense an
extension to the termination date of this option.
 
 Sunless
Tanning Sprays
 
 On June
9, 2004, our wholly-owned subsidiary, Skinvisible Pharmaceuticals, Inc.
("Skinvisible"), 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 Skinvisible’s 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 utilizing our
proprietary polymer formula to manufacture nine additional suncare related
products.
 
 The
Distribution Agreement provides that Cross Global must pay Skinvisible an
up-front royalty in the amount of $1,000,000. Cross Global has paid us $700,000.
The remaining $300,000 is due on May 30, 2005.
 
 4
 ***Table of
Contents***
 
 Under the terms of the Distribution Agreement, Cross
Global is prohibited 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.
 
 **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-fungal·Anti-acne·Anti-Inflammatory·Dermal
      Abrasion/Cosmetic Skin Care·Anti-microbial
      Wound Care
 
 Our
management is seeking to offer our polymer delivery vehicles for incorporation
into these products on a private label basis.
 
 **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 the
following potential applications for our polymer delivery vehicles:
 
 ·Insect
      repellants·Liquid
      bandages·New
      antibacterial/antimicrobial hand sanitizer
  In the
event that these studies determine that we can successfully incorporate our
topical polymer-based delivery system into any of these products set forth
below, we will move forward to secure all appropriate governmental approvals for
the distribution of this product in the United States. It is our anticipation
that the process to complete all studies and secure all government approvals
will take approximately twelve (12) to eighteen (18) months from the beginning
of each study.
 
 Insect
Repellants
 
 We are in
the process of developing a mosquito repellant that incorporates our topical
polymer-based delivery systems. The approximate cost of the outside study is
$100,000 and our management is seeking to negotiate a deal with a third party
where they would pay the cost of the study in exchange for licensing rights.
 We expect
to commence outside studies on this product once a deal is in place to provide
funding for the outside study.
  5
 ***Table of
Contents***
  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 a currently testing a new antimicrobial hand
sanitizer product that utilizes the active ingredient Chlorhexadine.
Chlorhexadine is the active agent in scrub soaps currently used
in the operating rooms of most hospitals in North America and Europe.
  We have
received positive results from the first study we commissioned and are currently
in the process of a second study. We anticipate that the results of the second
study will be
available before the end of the second quarter of fiscal 2005. This product may
require us filing of a New Drug Application with the US FDA because the drug
Chlorhexadine is not an approved drug for Hand Sanitizers in the US under the
FDA Tentative Final Monograph. If we are required to file a New Drug Application
with the US FDA, the development of this product may be both time and cost
prohibitive for us. Under such circumstance, we would seek a pharmaceutical
partner to fund the remaining studies.
 
 **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.
 
 **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). Our patent applications on Topical
Compositions and Methods of Use are 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 March 22, 2005, we did not receive
any response.
  We also
have two patents currently pending, which cover our sunless tanning spray
formula and sunscreen formulas.
  6
 ***Table of
Contents***
  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.
 
 **Employees**
 
 We
currently have five full-time employees including our President, Chief Executive
Officer, and Chief Financial Officer, Terry Howlett.
 
 ****
 **Research
and Development**
 
 We
incurred research and development expenditures for the fiscal years ended
December 30, 2003 and 2004 in the amount of $3,500 and $17,300
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.
 
 We are
not subject to any significant or material environmental regulation in the
normal operation of our business.
 
 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
 
 Subsequent
to the reporting period 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
 
 7
 ***Table of
Contents***
 
 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 March 31, 2005, HFD had not answered or otherwise
responded to the litigation.
 
 Subsequent
to the reporting period, 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. We believe that the lawsuit against Skinvisible
Pharmaceuticals, Inc. and our Chief Executive Officer is without merit and plan
to file a motion to dismiss.
 
 **Item
4:**   **Submission of Matters to a Vote of the Security
Holders**
 
 No other
matters were submitted to our security holders for a vote during the reporting
period.
 
 Subsequent
to the reporting period on January 10, 2005, we held our annual shareholder
meeting. The meeting was called for the purpose of electing directors to the
board of directors and to transact any other business that may properly come
before the meeting. The number of votes present in person or by proxy was
sufficient to constitute a quorum. A majority of the shareholders elected Terry
Howlett, Jost Steinbruchel, and Greg McCartney to serve on the board of
directors until the next annual meeting of the shareholders, or until removed by
other action as allowed by the corporate bylaws. The tabulation of the votes was
as follows:
 
 Nominee
    Votes
      Cast For
    Votes
      Cast Against
    Votes
      AbstainedTerry
      Howlett
    8,422,052
    0
    0Jost
      Steinbruchel
    8,422,052
    0
    0Greg
      McCartney
    8,422,052
    0
    0
   8
 ***Table of
Contents***
  **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, which is sponsored
by the National Association of Securities Dealers (“NASD”). The OTC Bulletin
Board 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 OTC Bulletin
Board 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 NASD 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, 2004Quarter
      Ended
    High
      $
    Low
      $March
      31, 2004
    0.20
    0.12June
      30, 2004
    0.15
    0.10September
      30, 2004
    0.08
    0.06December
      31, 2004
    0.09
    0.06Fiscal
      Year Ending December 31, 2003Quarter
      Ended
    High
      $
    Low
      $March
      31, 2003
    0.11
    0.03June
      30, 2003
    0.23
    0.07September
      30, 2003
    0.23
    0.08December
      31, 2003
    0.29
    0.10
 
 On March
22, 2005 closing price per share of our common stock, as reported by the NASD
OTC Bulletin Board, was $0.19.
 
 **Penny
Stock**
 
 Until our
shares qualify for inclusion in the Nasdaq system, the public trading, if any,
of our common stock will be on the OTC Bulletin Board. As a result, an investor
may find it more difficult to dispose of, or to obtain accurate quotations as to
the price of, the common stock offered. Our common stock is subject to
provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), commonly referred to as the "penny stock
rule." Section 15(g) sets forth certain requirements for transactions in penny
stocks, and Rule 15g-9(d)incorporates the definition of "penny stock" that is
found in Rule 3a51-1 of the Exchange Act. The SEC generally defines "penny
stock" to be any equity security that has a market price less than $5.00 per
share, subject to certain exceptions. If our common stock is deemed to be a
penny stock, trading in the shares will be subject to additional sales practice
requirements on broker-dealers who sell penny stocks to persons other than
established customers and accredited investors. "Accredited investors" are
persons with assets in excess of $1,000,000 or annual income exceeding $200,000
or $300,000 together with their spouse. For transactions covered by these rules,
broker-dealers must make a special suitability determination for the purchase of
such security and must have the purchaser’s written consent to the transaction
prior to the purchase. Additionally, for any transaction involving a penny
stock, unless exempt, the rules require the delivery, prior to the first
transaction, of a
 
 9
 ***Table of
Contents***
 
 risk
disclosure document, prepared by the SEC, relating to the penny stock market. A
broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, and current quotations for the
securities. Finally, monthly statements must be sent disclosing recent price
information for the penny stocks held in an account and information on the
limited market in penny stocks. Consequently, these rules may restrict the
ability of a broker-dealer to trade and/or maintain a market in our common stock
and may affect the ability of our shareholders to sell their
shares.
 
 **Holders
of Our Common Stock**
 
 As of
March 31, 2005, there were 174 registered holders of our common
stock.
 
 **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 receiving the distribution.
 
 We have
not declared any dividends, and we do not plan to declare any dividends in the
foreseeable future.
 
 **Securities
Authorized for Issuance Under Equity Compensation Plans**
 
 **Equity
Compensation Plans as of December 31, 2004**
 
 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
    1,085,000
    $0.08
    415,000Equity
      compensation
      plans
      not
      approved by
      security
      holders
    -
    -
    -Total
    1,085,000
    $0.08
    415,000
 
  10
 ***Table of
Contents***
 ****
 **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 past three
years.
 
 Subsequent
to the reporting period on February 4, 2005, we issued 500,000 shares of
restricted common stock each to two of our directors in connection with services
rendered during the 2004 fiscal year. These shares were issued pursuant to
Section 4(2) of the Securities Act. We did not engage in any general
solicitation or advertising.
 
 During
the first quarter of 2004, we raised $547,894 in the form of a private placement
and issued 5,478,940 shares of restricted common stock plus 2,739,470 warrants
to 3 accredited investors. The warrant gave the holders the right to purchase
one share of common stock at $0.15 per share on or before March 26, 2005, then
at $0.20 per share on or before the close of business on March 25, 2006. These
shares were issued pursuant to the exemption available under Section 4(2) of the
Securities Act of 1933. Each purchaser represented his or her intention to
acquire the securities for investment intent only and not with a view toward
distribution. Each investor was given adequate information about us to make an
informed investment decision. We did not engage in any public solicitation or
general advertising. No registration rights were granted to any of the
purchasers. We issued the stock certificates and affixed the appropriate legends
to the restricted stock.
 
 During
the second quarter of 2003, we secured financing in the form of a private
placement. We raised $228,000 and issued 4,545,000 shares of restricted common
stock plus 2,275,500 warrants to 25 accredited investors. The common stock was
issued at $0.05 per share. The warrant gave the holders the right to purchase
one share of common stock at $0.10 per share on or before July 14, 2003, then at
$0.15 per share on or before May 28, 2004, and at $0.20 per share on or before
May 27, 2006. These shares were issued pursuant to the exemption available under
Section 4(2) of the Securities Act of 1933. Each purchaser represented his or
her intention to acquire the securities for investment intent only and not with
a view toward distribution. Each investor was given adequate information about
us to make an informed investment decision. We did not engage in any public
solicitation or general advertising. No registration rights were granted to any
of the purchasers. We issued the stock certificates and affixed the appropriate
legends to the restricted stock.
 
 On
November 12, 2002, We completed an offering of 6,478,000 restricted shares of
the common stock at a price of $0.05 per share to a total of nineteen (19)
accredited investors pursuant to Rule 506 of Regulation D of the 1933 Act. We
also issued warrants for the purchase of 3,239,000 shares of the common stock. A
commission in the amount of $25,900 was paid to 3 parties in connection with the
completion of this offering. Each purchaser represented his or her intention to
acquire the securities for investment intent only and not with a view toward
distribution. Each investor was given adequate information about us to make an
informed investment decision. We did not engage in any public solicitation or
general advertising. No registration rights were granted to any of the
purchasers. We issued the stock certificates and affixed the appropriate legends
to the restricted stock.
 
 On June
7, 2002, as part of a loan conversion agreement, we issued 3,000,000 restricted
common shares to one (1) accredited investor at a price of $0.05 per share as
well as warrants for the purchase of 1,500,000 shares of common stock. These
shares were issued pursuant to the exemption available under Section 4(2) of the
Securities Act of 1933. We did not engage in any public solicitation or general
advertising. We issued the stock certificates and affixed the appropriate
legends to the restricted stock.
 
 On April
26, 2002, as part of a loan conversion agreement we issued 2,000,000 restricted
common shares to
  11
 ***Table of
Contents***
 
 one (1)
accredited investor at a price of $0.05 per share as well as warrants for the
purchase of 1,000,000 shares of common stock. These shares were issued pursuant
to the exemption available under Section 4(2) of the Securities Act of 1933. We
did not engage in any public solicitation or general advertising. We issued the
stock certificates and affixed the appropriate legends to the restricted stock.
 
 On April
26, 2002, as part of a loan conversion agreement, we issued 2,000,000 restricted
common shares to one (1) accredited investor at a price of $0.05 per share as
well as warrants for the purchase of 1,000,000 shares of common stock. These
shares were issued pursuant to the exemption available under Section 4(2) of the
Securities Act of 1933. We did not engage in any public solicitation or general
advertising. We issued the stock certificates and affixed the appropriate
legends to the restricted stock.
 
 In
January 2002, we issued a total of 264,775 shares of common stock to four (4)
employees and one (1) consultant upon the exercise of their stock options
granted pursuant to the Company's incentive stock option plan. These shares were
issued at a price of $0.10 per share, for a total purchase price of $26,477.50.
These shares were issued pursuant to the exemption available under Section 4(2)
of the Securities Act of 1933. We did not engage in any public solicitation or
general advertising. We issued the stock certificates and affixed the
appropriate legends to the restricted stock.
 
 **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 Exchange
Act of 1934, 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. 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
year ended December 31, 2004, we generated total revenue of $519,972, compared
to revenue in the amount of $193,988 for the year ended December 31, 2003. Our
increase in revenue is primarily attributable to the receipt of payments under
our agreements entered into during the reporting period with Dermal Defense and
Cross Global. We received $325,000 for distribution and licensing rights granted
in the year ended December 31, 2004. We generated $174,020 in revenue from
product sales in the year ended December 31, 2004.
 
 12
 ***Table of
Contents***
 
 We
incurred operating 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. We incurred
expenses in the amount of $1,456,087 for the year ended December 31, 2003. Our
expenses for the year ended December 31, 2003 consisted of selling and
administrative costs of $1,016,020, depreciation and amortization of $61,815,
and stock based compensation in the amount of $378,252. The decrease in expenses
from fiscal 2003 to fiscal 2004 is primarily attributable to the payment of
significantly less stock based compensation.
 
 Our net
loss for the year ended December 31, 2004 was $804,972, compared to a net loss
of $1,310,220 in the prior year.
 
 **Assets**
 
 As of
December 31, 2004, we had current assets of $248,063 and total assets in the
amount of $1,547,570. As of December 31, 2004, our current assets consisted of
cash of $92,434, accounts receivable of $19,940, inventory of $112,642, $21,126
due from a related party, and $1,921 in prepaid expenses and other current
assets.
 
 **Liabilities
and Stockholders Deficit**
 
 Our total
liabilities as of December 31, 2004 were $969,317. Our liabilities consisted of
accounts payable and accrued liabilities in the amount of $346,317 and unearned
revenue in the amount of $623,000.
 
 **Liquidity
and Capital Resources**
 
 As of
December 31, 2004, we had current assets of $248,063. Our total
current liabilities as of December 31, 2004 were $969,317. As a result, on
December 31, 2004, we had a working capital deficit of $721,254.
 
 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 Agreements with Cross Global and
Dermal Defense.
 
 **Off
Balance Sheet Arrangements**
 
 As of
December 31, 2004, 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, 2004, we had incurred cumulative
net losses of approximately $10,561,000.
 
 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.
 
 13
 ***Table of
Contents***
 ****
 **Revenue
Recognition**
 
 Revenues
are recognized during the period in which the revenues are received. Costs and
expenses are recognized during the period in which they are
incurred.
  14
 ***Table of
Contents***
  **Item
7:**   **Financial
Statements**
 
 
 Index to
Audited Consolidated Financial Statements:
 
 F-2   Independent
Auditor’s Report
 
 F-3   Consolidated
Balance Sheet - December 31, 2004
 
 F-4   Consolidated
Statements of Operations - Years Ended December 31, 2004 and December 31,
2003
 
 F-5   Consolidated
Statements of Stockholders’ Equity (Deficit) - Years Ended December 31, 2004 and
December 31, 2003
 
 F-6   Consolidated
Statements of Cash Flows - Years Ended December 31, 2004 and December 31,
2003
 
 F-7   Notes to
Consolidated Financial Statements
  15
 ***Table of
Contents***
  SKINVISIBLE,
INC.
 CONSOLIDATED
FINANCIAL STATEMENTS
 
 
 TABLE OF
CONTENTS
 
 
 PAGE NO.
 
 Report of
Independent Registered Public Accounting Firm 1
 
 Consolidated
Financial statements
 
 Consolidated
balance sheet 2
 
 Consolidated
statements of operations 3
 
 Consolidated
statement of stockholders’ equity 4
 
 Consolidated
statements of cash flows 7
 
 Notes to
consolidated financial statements 9
 ***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, 2004, and the related consolidated statements of operations,
stockholders’ equity, and cash flows for the years ended December 31, 2004 and
2003. 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 audits.

We
conducted our audits 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 audits provide 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, 2004, and the consolidated results of its operations and cash flows
for the years ended December 31, 2004 and 2003 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 suffered recurring 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. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.


/s/
Sarna & Company Certified Public Accountants
Sarna
& Company Certified Public Accountants
March 28,
2005
Westlake
Village, California
 F -
2
 ***Table of
Contents***
 
 SKINVISIBLE,
INC.
 CONSOLIDATED
BALANCE SHEET
 DECEMBER
31, 2004
 
 
 ASSETSCurrent
      assetsCash
    $
    92,434Accounts
      receivable
    
    19,940Inventory
    
    112,642Due
      from related party
    
    21,126Prepaid
      expense and other current assets
    
    1,921Total
      current assets
    
    248,063Fixed
      assets, net
    
    47,894Intangible
      and other assetsPatents
      and trademarks, net
    
    61,613License
      and distributor rights
    
    50,000Prepaid
      royalty fees
    
    1,140,000Total
      assets
    $
    1,547,570LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilitiesAccounts
      payable and accrued liabilities
    $
    346,317Unearned
      revenue
    
    623,000Total
      current liabilities
    
    969,317Long-term
      liabilities
    
    --Total
      liabilities
    
    969,317Commitments
      and contingencies
    
    --Stockholders'
      equityCommon
      stock; $0.001 par value; 100,000,000 shares55,625,248
      shares issued and outstanding
    
    55,625Additional
      paid-in capital
    
    11,083,799Accumulated
      deficit
    
    (10,561,171)Total
      stockholders' equity
    
    578,253Total
      liabilities and stockholders' equity
    $
    1,547,570
  See
Accompanying Notes to Consolidated Financial Statements
 
 F -
3
 ***Table of
Contents***
 
 SKINVISIBLE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
 
 For
      the year ended
    
    For
      the year endedDecember
      31, 2004
    
    December
      31, 2003Revenues
    $
    519,972
    
    $
    193,988Cost
      of revenues
    
    96,781
    
    
    136,125Gross
      profit
    
    423,191
    
    
    57,863Operating
      expensesDepreciation
      and amortization
    
    111,339
    
    
    61,815Stock
      based compensation
    
    32,150
    
    
    378,252Selling
      general and administrative
    
    1,084,674
    
    
    1,016,020Total
      operating expenses
    
    1,228,163
    
    
    1,456,087Loss
      before provision for income taxes
    
    (804,972)
    
    
    (1,398,224)Other
      income (expense)Forfeited
      license deposit
    
    --
    
    
    100,000Loss
      on disposal of fixed assets
    
    --
    
    
    (12,016)Interest
      income
    
    --
    
    
    20Total
      other income
    
    --
    
    
    88,004Provision
      for income taxes
    
    --
    
    
    --Net
      loss
    $
    (804,972)
    
    $
    (1,310,220)Basic
      income (loss) per common share
    $
    (0.01)
    
    $
    (0.03)Diluted
      income (loss) per common share
    $
    (0.01)
    
    $
    (0.03)Basic
      weighted average commonshares
      outstanding
    
    55,625,248
    
    
    43,218,767
 See Accompanying Notes to Consolidated Financial
Statements
 
 F -
4
 ***Table of
Contents***
 
 SKINVISIBLE, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2004

TotalCommon
      Stock
    
    Additional
    
    Accumulated
    
    Stockholders'Shares
    
    Amount
    
    Paid-in
      Capital
    
    Deficit
    
    EquityBalance,
      December 31, 2002
    
    38,789,808
    
    
    38,790
    
    
    9,442,838
    
    
    (8,445,979)
    
    
    1,035,649Issuance
      of stock for cash, weighted averageprice
      of $0.09 per share
    
    4,725,000
    
    
    4,725
    
    
    400,275
    
    
    --
    
    
    405,000Issuance
      of stock related to exercise of stock optionsfor
      services, weighted average price of $0.05 per share
    
    200,000
    
    
    200
    
    
    9,800
    
    
    --
    
    
    10,000Issuance
      of stock for services, $0.10 per share
    
    2,504,810
    
    
    2,505
    
    
    297,976
    
    
    --
    
    
    300,481Issuance
      of stock in satisfaction of Companyliabilities,
      weighted average price of $0.09 per share
    
    2,495,000
    
    
    2,495
    
    
    232,005
    
    
    --
    
    
    234,500Issuance
      of stock options for services
    
    --
    
    
    --
    
    
    67,771
    
    
    --
    
    
    67,771Net
      loss
    
    --
    
    
    --
    
    
    --
    
    
    (1,310,220)
    
    
    (1,310,220)Balance,
      December 31, 2003
    
    48,714,618
    
    
    48,715
    
    
    10,450,665
    
    
    (9,756,199)
    
    
    743,181Issuance
      of stock for cash, weighted average
    
    6,579,130
    
    
    6,579
    
    
    601,315
    
    
    -
    
    
    607,894price
      of $0.10 per shareIssuance
      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)
    
    $
    578,253
 See Accompanying Notes to Consolidated Financial
Statements
 
 F -
5
 ***Table of
Contents***
 
 SKINVISIBLE, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
 
 For
      the year ended
    
    For
      the year endedDecember
      31, 2004
    
    December
      31, 2003Cash
      flows from operating activities:Net
      loss
    $
    (804,972)
    
    $
    (1,310,220)Adjustments
      to reconcile net loss to netcash
      used by operating activities:Depreciation
      and amortization
    
    111,339
    
    
    61,815Stock
      based compensation
    
    32,150
    
    
    378,252Loss
      on disposal of assets
    
    --
    
    
    12,016Changes
      in operating assets and liabilities:Change
      in inventory
    
    (35,954)
    
    
    47,018Change
      in accounts receivable
    
    8,237
    
    
    16,596Change
      in deposits
    
    --
    
    
    225Change
      in prepaid expenses and other current assets
    
    (1,921)
    
    
    3,088Change
      in bank overdraft
    
    --
    
    
    (762)Change
      in related party receivable
    
    (21,126)
    
    
    --Change
      in accounts payable and accrued liabilities
    
    (371,998)
    
    
    309,527Change
      in unearned revenue
    
    623,000
    
    
    --Net
      cash used by operating activities
    
    (461,245)
    
    
    (482,445)Cash
      flows from investing activities:Purchase
      of fixed assets and untangible assets
    
    (54,215)
    
    
    --Proceeds
      from disposal of fixed assets
    
    --
    
    
    41,084Net
      cash provided (used) by investing activities
    
    (54,215)
    
    
    41,084Cash
      flows from financing activities:Proceeds
      from notes payable
    
    -
    
    
    31,739Proceeds
      from issuance of common stock
    
    607,894
    
    
    405,000Net
      cash provided by financing activities
    
    607,894
    
    
    436,739Net
      change in cash
    
    92,434
    
    
    (4,622)Cash,
      beginning of period
    
    --
    
    
    4,622Cash,
      end of period
    $
    92,434
    
    $
    --Supplemental
      disclosure of cash flow information:Cash
      paid for interest
    $
    4,051
    
    $
    7,449**Schedule
      of non-cash financing and investing activities**Issuarnce
      of 2,495,000 sahres of common stock insatisfaction of
    
    -
    
    $
    234,500accounts
      payable and loans payable
 See Accompanying Notes to Consolidated Financial
Statements
 
 F -
6
 ***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 (Canda), Inc. On January 1, 2000, the
Company decided to discontinue operations of its subsidiary, Skinvisible
International, Inc.

On April
20, 2000, the Company formed a subsidiary titled safe4Hours, Inc. for the
purpose of marketing its own proprietary brands of products.

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 $10,561,000 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 received.
Costs and expenses are recognized during the period in which they are
incurred.

F -
7
***Table of
Contents***


SKINVISIBLE,
INC.
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS











1. DESCRIPTION
OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES (continued)





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.





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.




F -
8
 ***Table of
Contents***


SKINVISIBLE,
INC.
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


1. DESCRIPTION
OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES (continued)





Comprehensive
income (loss) - The
Company has no components of other comprehensive income. Accordingly, net loss
equals comprehensive loss for all periods.





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. No advertising costs have been incurred for the years ended December
31, 2004 and 2003.





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:





2003 2004


Net loss,
as
reported $ (1,310,220) $  (804,972 )


Add:
Stock-based employee compensation


expense
included in reported loss,


net of
related tax
effects -- --


Deduct:
Total stock-based employee


compensation
expense determined under


fair
value based methods for all awards,


net of
related tax
effects (33,330 ) --


Pro forma
net
loss $ (1,343,550 ) $  (804,972 )







Net loss
per common share


Basic and
diluted loss, as
reported $ (0.03 ) $ (0.01 )




Basic and
diluted loss, pro
forma $ (0.03 ) $ (0.01 )







As
required, the pro forma disclosures above include options granted for years
ended December 31, 2003 and 2004. 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.




F -
9
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SKINVISIBLE,
INC.
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS






1.
    DESCRIPTION
      OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES(continued)





New
accounting pronouncements - In
April 2002, the FASB issued Statement No. 145, *Rescission
of FASB Statements No. 4, 44, and 64, Amendments of FASB Statement
No. 13, and Technical Corrections* . The
Company does not believe that the adoption of this pronouncement will have a
material effect on its financial statements.





In June
2002, the FASB issued Statement No. 146, *Accounting
for Costs Associated With Exit or Disposal Activities.* This
statement requires the recognition of a liability for a cost associated with an
exit or disposal activity when the liability is incurred versus the date the
Company commits to an exit plan. In addition, this statement states the
liability should be initially measured at fair value. The statement is effective
for exit or disposal activities that are initiated after December 31, 2002.
The Company does not believe that the adoption of this pronouncement will have a
material effect on its financial statements.





In
November 2002, the Financial Accounting Standards Board issued FASB
Interpretation No. 45 ("FIN No. 45"), Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others an interpretation of SFAS No. 5, 57, and 107 and rescission of FASB
Interpretation No. 34, was issued. FIN No. 45 clarifies the requirements of SFAS
No. 5, Accounting for Contingencies, relating to a guarantor's accounting for,
and disclosure of, the issuance of certain types of guarantees. The adoption of
the provisions of FIN No. 45 did not have a material impact on the Company's
results of operations, financial position or cash flows.





In
January 2003, the FASB issued Interpretation No. 46, *Consolidation
of Variable Interest Entities.* This
interpretation establishes standards for identifying a variable interest entity
and for determining under what circumstances a variable interest entity should
be consolidated with its primary beneficiary. Until now, a company generally has
included another entity in its consolidated financial statements only if it
controlled the entity through voting interests. Interpretation No. 46
changes that by requiring a variable interest entity to be consolidated by a
company if that company is subject to a majority of the risk of loss from the
variable interest entity’s activities or is entitled to receive a majority of
the entity’s residual returns or both. The Company does not believe that the
adoption of this pronouncement will have a material effect on its financial
statements.





Reclassification - The
financial statements from 2004 and 2003 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, 2004:





Machinery
and
equipment                                                                                                                        
$ 55,463


Furniture
and
fixtures 113,635


Computers,
equipment and
software 36,145


Lab
equipment 115,946


321,189


Less:
accumulated
depreciation 273,295





Fixed
assets,
net                                                                                                                                          
$ 47,894






F -
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SKINVISIBLE,
INC.
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS











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, 2004, patents and trademarks total
$70,233, net of accumulated amortization of $8,620.





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, 2004.





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, 2004, the Company has
paid a total of $1,610,000 of which $470,000 has been expensed and $1,140,000
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, 2004 and 2003, the Company granted stock options to
employees totaling -0- and 1,750,000 shares of its common stock with a weighted
average strike price of $-0- and $0.10 per share, respectively. Certain stock
options were exercisable upon grant and have a life ranging from 4 months to 5
years. As of December 31, 2004, stock options outstanding totaled 2,585,000 with
a weighted average strike price of $0.06 per share.





Stock
warrants - During
the year ended December 31, 2004 and 2003, the Company granted stock warrants
related to common stock issued through a private placement totaling -0- and
4,802,500, respectively, with a weighted average strike price of $0.20 per
share. As of December 31, 2004, stock warrants outstanding totaled 8,901,500
with a weighted average strike price of $0.20 per share.




5. FORFEITED
LICENSE DEPOSIT





On July
9, 2003, the Company entered into a letter of intent with Health First
Distributors North America, Inc. of British Columbia, Canada ("Health First’) to
grant Health First the exclusive marketing and distribution rights to the
antimicrobial hand sanitizer product the Company manufactures that is identified
as Triclosan 1% formula (the "Product"). On October 29, 2003, the parties
revised the letter of intent. Despite repeated assurances of payment from Health
First, the Company did not received the second of the required non-refundable
deposits in the amount of $100,000 that was due on November 30, 2003. As a
result of Health First’s failure to satisfy the conditions precedent to entering
into a formalized License Agreement, the Company has terminated negotiations
with Health First and intend to retain the $100,000 non-refundable deposit
previously paid by Health First as provided in the Letter of Intent.
Accordingly, the Company recorded the forfeited deposit as income for the year
ended December 31, 2003.




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SKINVISIBLE,
INC.
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS








6. 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, 2004, the Company has received
$448,000 and has reflected $248,000 as unearned revenue and $200,000 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.





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 recognized as revenue ratably over a five year period. As of December 31,
2004, the Company has received $500,000 and has reflected $375,000 as unearned
revenue and $125,000 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.







F -
12
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****


**Item
8:**   **Changes
in and Disagreements With Accountants on Accounting and Financial****Disclosure**





There
have been no changes in or disagreements with our accountants since our
formation required to be disclosed pursuant to Item 304 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, 2004. 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 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. An internal control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. 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.





16
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**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 directors and executive
officers, their ages and their present positions with the Company as of March
31, 2005. The directors serve for a term of one year or until the next annual
meeting of the shareholders. Each officer serves at the discretion of the Board
of Directors.





*Name*
    *Age*
    *Office(s) Held*Terry Howlett
    57
    Chief Executive Officer, Chief Financial Officer, and
    DirectorJost Steinbruchel
    65
    DirectorGreg McCartney
    54
    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 American
Stock Exchange. 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.





**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 or executive officer: (1)
any bankruptcy petition filed by or against any business





17
 ***Table of
Contents***





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.





**Term
of Office**





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





**Significant
Employees**





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




**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.




**Audit
Committee**





We do not
have a separately-designated standing audit committee. The entire board of
directors is acting as our audit committee.





**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 our 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
shareholders are required by SEC regulations to furnish us with copies of all
Section 16(a) forms they file. To our knowledge, the following persons have
failed to file, on a timely basis, the identified reports required by Section
16(a) of the Exchange Act during fiscal year ended December 31, 2004:





18
 ***Table of
Contents***








Name
      and principal position
    Number
      of
      late
      reports
    Transactions
      not
      timely
      reported
    Known
      failures to
      file
      a required formTerry Howlett
      CEO, CFO, and Director
    1
    1
    0Jost Steinbruchel
      Director
    0
    0
    0Carol Patterson Neves
      Former Director
    0
    0
    0





**Code
of Ethics Disclosure**





Subsequent
to the reporting period, 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, as required by sections 406 and 407 of the Sarbanes-Oxley Act of
2002. The Code of Ethics is attached as an exhibit to this annual report.




19
 ***Table of
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**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
    2004
      2003
      2002
    $198,242
      73,000
      27,836
    0
      0
      0
    0
      0
      0
    0
      0
      28,000
    0
      1,200,000
      1,300,000
    0
      0
      0
    0
      0
      0





**Compensation
to Directors**





Subsequent
to the reporting period 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.





**Stock
Option Grants**





We did
not grant any stock options to our executive officers or employees during the
year ended December 31, 2004. We have not granted any stock options to our
executive officers or employees since December 31, 2004.





20
 ***Table of
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**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 March 31, 2005 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
    6,315,352
    15.0%1Common
    Jost Steinbruchel
      6320 South Sandhill Road, Suite 10
      Las Vegas, Nevada 89120
    1,750,000
    5.8%2Common
    Greg McCartney
      6320 South Sandhill Road, Suite 10
      Las Vegas, Nevada 89120
    0
    0.2%3**Total of all directors and executive
    officers**
    8,065,352
    21.0%Common
    Lutz Family Trust
      71 Biltmore Estates
      Phoenix, Arizona 85016
    6,500,000
    11.5%Common
    York Fidelity Limited
      63 Market Street #20-04
      Singapore 048942
    4,800,000
    8.5%








The
percent of class is based on 56,725,248 shares of common stock issued and
outstanding as of March 22, 2005.





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





1 Includes
1,200,000 options that may be exercised immediately to purchase 1,200,000 shares
of common stock at a price of 0.05 per share and 1,000,000 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
300,000 options that may be exercised immediately to purchase 300,000 shares of
common stock at a price of $0.05 per share, 1,000,000 warrants that may be
exercised immediately to purchase 1,000,000 shares of common stock at a price of
$0.05 per share, and 250,000 warrants that may be exercised immediately to
purchase 250,000 shares of common stock at a price of $0.20 per
share.





21
 ***Table of
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3 Includes
100,000 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**





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





Our
policy regarding related transactions requires that any director or officer who
has an interest in any transaction disclose the presence and the nature of the
interest to the board of directors prior to any approval of the transaction by
the board of directors. The transaction may then be approved by a majority of
the disinterested directors, provided that an interested director may be counted
in determining the presence of a quorum at the meeting of the board of directors
to approve the transaction.





Item
13 :             
Exhibits


Exhibit Number
    Description14.1
    Code of Ethics31.1
    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.
    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





**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, 2003 and 2004 were
approximately $17,000 and $29,140 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.




22
 ***Table of
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**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, 2003 and 2004.





**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, 2003 and 2004 were $0 and $0 respectively.




23
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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, Chief Financial Officer, &
  DirectorDate:
      April 13, 2005




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