(TheSee accompanying notes are an integral part of these condensedto unaudited consolidated financial statements)

RENOVACARE, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(Unaudited)

(TheSee accompanying notes are an integral part of these condensedto unaudited consolidated financial statements)

RENOVACARE, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(Unaudited)

(TheSee accompanying notes are an integral part of these condensedto unaudited consolidated financial statements)

RENOVACARE, INC. AND SUBSIDIARY

NOTES TO CONDENSEDUNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation, Organization, Nature and ContinuanceOverview of Operations, Liquidity, Recent Accounting Standards and Earnings (Loss) Per Share

Basis of Presentation

The accompanying interim unaudited condensedinterim consolidated financial statements and related disclosures of RenovaCare, Inc. and Subsidiary (the “Company”“Company”) as of March 31, 2021, and for the three months ended March 31, 2021 and 2020 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”SEC”) for  quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. These Consolidated Financial Statements should therefore be read in conjunction with the consolidated financial statementsConsolidated Financial Statements and notesNotes thereto for the fiscal year ended December 31, 2020 included in the Company’sour Annual Report on Form 10-K forfiled with the year ended DecemberSEC on March 31, 2019, filed on May 14, 2020. Certain information and footnote disclosures normally included in the financial statements2021.

The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principlesU.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in the United States of America (“GAAP”)Consolidated Financial Statements and accompanying disclosures. Actual results may differ from those estimates. The accompanying unaudited interim consolidated financial statements have been condensed or omitted.

Inprepared on the same basis as the audited financial statements and include all adjustments (including normal recurring adjustments) that are, in the opinion of management, the interim condensed consolidated financial statements reflect all adjustments considered necessary for a fair statementpresentation of the interim periods. All such adjustments areCompany’s consolidated financial position as of a normal, recurring nature.March 31, 2021, results of operations, stockholders’ equity and cash flows for the three months ended March 31, 2021 and 2020. The Company did not record an income tax provision during the periods presented due to net taxable losses. The results of operations for theany interim periodsperiod are not necessarily indicative of the results of operations to be expected for the year ended December 31, 2020.entire year.

Organization

RenovaCare, Inc. was incorporated on July 14, 1983 in the State of Utah under the name Far West Gold, Inc., and changed its domicile to Nevada in 1997. On January 7, 2014, the Company changed its name at the time from “Janus Resources, Inc.” to “RenovaCare, Inc.” so as to more fully reflect its current operations and business, and changed its trading symbol to “RCAR” effective as of January 9, 2014.

The Company has an authorized capital of 500,000,000 shares of $0.00001 par value common stock, of which 87,352,364 shares are outstanding as of March 31, 2021, and 10,000,000 shares of $0.0001 par value preferred stock, of which none are outstanding.

Overview of Operations

RenovaCare, Inc., together withthrough its wholly owned subsidiary, focusesRenovaCare Sciences Corp. is a development-stage company focusing on the acquisition, research, development and commercialization of autologous (using a patient'spatient’s own cells) cellular therapies that can be used for medical and aesthetic applications.

On July 12, 2013, the Company through its wholly owned subsidiary, RenovaCare Sciences Corp., completed the acquisition of its flagship technologies (collectively, the “CellMist^TM System”), along with associated United States patent applications and two foreign patent applications, the first of which was filed on August 23, 2007 (DE 10 2007 040 252.1) and the second of which was filed on April 27, 2011 (DE 10 2011 100 450.9), bothall of which have been granted. One ofThe CellMist™ System is a cell isolation procedure that enzymatically renders stem cells from the US patent applications was granted on November 29, 2016 (Patent No. US 9,505,000) and thepatient’s own skin or other patent application was granted on April 4, 2017 (Patent No. US 9,610,430). tissues. The resulting stem cell suspension is administered topically with our SkinGun™ spray device as a cell therapy onto wounds including burns to facilitate healing.

In August 2019, the Company was awarded a continuation of Patent No. US 9,505,000 (Patent No. US 10,376,658),a patent allowing the Company’s novel solution sprayer device (the “SkinGun^TM”) to now be used to spray all varieties of tissues and cells, thus allowing for its potential application in the regeneration of tissues and organs, beyond skin.skin; and, in November 2020, the Company was issued two new patents encompassing improvements to the SkinGun™, expanding its potential application beyond the surgical setting into the field, and allowing the use of liquid suspension solutions to include drugs, hormones, and other useful agents.

The CellMist^TM System is comprised

Improvements in the design and efficiency of (a)the CellMist™ System including a treatment methodology forclosed, automated cell isolation device and the SkinGun™ spray device are in development with StemCell Systems (Berlin, Germany), the Company’s R&D innovation partner. The Company is adapting its core technologies for possible use in other clinical indications. The Company is also developing the regenerationcell isolation and spray gun devices as stand-alone 510 (k)-cleared products for isolation of human skin cells (the “CellMist^TM Solution”)from other tissues and (b) the SkinGun^TM for delivering the cells to the treatment area.

Overviewspraying other solutions of Operationsmedical importance.

The Company does not have any commercialized products. The Company's activities have consisted principally of performing research and development activities and raising capital to support such activities. The Company has enlisted the assistance of several Contract Manufacturing Organizations (CMO) to manufacture clinical supplies including components of the CellMist System™ and the electronic SkinGun™ spray devices in compliance with FDA’s guidance for current Good Manufacturing Practices (cGMP) and Contract Research Organizations (CRO) to test and validate the Company’s products and processes and to conduct clinical trials that evaluate initially the safety and feasibility of an autologous skin cell therapy using the Company’s products to facilitate burn wound healing. These development activities are subject to significant risks and uncertainties, including possible failure of preclinical and clinical testing. The Company has not generated any revenue since inception and has sustained recurring losses and negative cash flows from operations since inception. The Company expects to incur losses as it continues development of its products and technologies and expects that it will need to raise additional capital through partnerships or the sale of its securities to accomplish its business plan. Failing to secure such additional funding before achieving sustainable revenue and profit from operations poses a significant risk. The Company's ability to fund the development of its cellular therapies depends on the amount and timing of cash receipts from future financing activities. There can be no assurance as to the availability or terms upon which such financing and capital might be available. Additionally, there is significant uncertainty relating to the full impact of the COVID-19 pandemic on the Company’s operations and capital requirements. Should financing when needed be unavailable or prohibitively expensive or the COVID-19 pandemic continue, it may adversely affect the Company’s ability to (i) retain employees and consultants; (ii) obtain additional financing on terms acceptable to the Company, if at all; (iii) delay regulatory submissions and approvals; (iv) delay, limit or preclude the Company from securing clinical study sites; (v) delay, limit or preclude the Company from achieving technology or product development goals, milestones, or objectives; and (vi) preclude or delay entry into joinjoint venture or partnership arrangements. The occurrence of any one or more of such events may affect the Company’s ability to continue on its pathway to commercialization of its technology or products.

Liquidity

As of June 30, 2020,March 31, 2021, the Company had $10,258,068$5,607,845 of cash on hand and cash equivalents, and working capital of $9,864,952.$5,303,836. As a result, of the cash on hand and working capital, the Company believes it currently has sufficient cash to meet its funding requirements over the next twelve months following the issuance of this Quarterly Report on Form 10-Q. However, the Company has experienced and continues to experience negative cash flows from operations, as well as an ongoing requirement for substantial additional capital investment. The Company expects that it may need to raise additional capital to accomplish its business plan over the next several years. If additional funding is required, the Company expects to seek to obtain that funding through private equity or convertible debt. There can be no assurance as to the availability or terms upon which such financing and capital might be available. See “Overview of Operations” above.

Additionally, there is significant uncertainty relating to the full impact of the COVID-19 pandemic on the Company’s operations and capital requirements. Should financing when needed be unavailable or prohibitively expensive or the COVID-19 pandemic continue, it may adversely affect the Company’s ability to (i) retain employees and consultants; (ii) obtain additional financing on terms acceptable to the Company, if at all; (iii) delay regulatory submissions and approvals; (iv) delay, limit or preclude the Company from the operation of clinical study sites and testing laboratories; (v) delay, limit or preclude the Company from achieving technology or product development goals, milestones, or objectives; and (vi) preclude or delay entry into joint venture or partnership arrangements. The occurrence of any one or more of such events may affect the Company’s ability to continue on its pathway to commercialization of its technology or products.

New

Recent Accounting Standards

Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative non-governmental US GAAP as found in the Financial Accounting Standards Board's Accounting Standards Codification.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for the Company beginning in fiscal 2021. The Company is currently assessing the impact that this pronouncement will have on its consolidated financial statements.

The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable, the Company has not identified any standards that the Company believes merit further discussion other than as discussed above. The Company believes that none of the new standards will have a significant impact on the financial statements.

Earnings (Loss) Per Share

The Company presents both basic and diluted earnings per share ("EPS") amounts. Basic EPS is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period presented. Diluted EPS amounts are based upon the weighted average number of common and common equivalent shares outstanding during the period presented. The Company has not included the effects of warrants, or stock options and convertible debt on net loss per share because to do so would be antidilutive.

Following is the computation of basic and diluted net loss per share for the three and six months ended June 30, 2020March 31, 2021 and 2019:2020:

The shares listed below were not included in the computation of diluted losses per share because to do so would have been antidilutive for the periods presented:

Note 2. Other Current Assets

Other current assets consist of the following:

Note 3.2. Assets – Intellectual Property

On July 12, 2013, the Company, together with its wholly owned subsidiary, RenovaCare Sciences, entered into an asset purchase agreement (“APA”) with Dr. Jörg Gerlach, MD, PhD, pursuant to which RenovaCare Sciences purchased all of Dr. Gerlach’s rights, title and interest in the CellMist^TM System. Acquisition related costs amounted to $52,852 and were capitalized together with the cash payment upon the closing of the transaction in July 2013 of $100,002. Intangible assets amounted to $152,854 at June 30,as of December 31, 2020 and December 31, 2019.

Note 3. Prepaid Expenses

Prepaid expenses consist of the following:

Note 4. Common Stock and Warrants

Common Stock

At June 30, 2020,March 31, 2021, the Company had 500,000,000 authorized shares of common stock with a par value of $0.00001 per share, 87,352,364 shares of common stock outstanding and 19,440,76516,593,266 shares reserved for issuancefuture issuances under the Company’s 2013 Long-Term Incentive Plan (the “2013 Plan”“2013 Plan”) as adopted and approved by the Company’s Board of Directors (the “Board”“Board”) and stockholders on June 20, 2013 and ratified by the Company’s stockholders on November 15, 2013, that provides for the grant of stock options to employees, directors, officers, and consultants. During the six months ended June 30, 2020, the Company granted options to purchase an aggregate 2,470,571 shares of the Company’s common stock to employees and consultants. See “Note 5.7. Stock Options” for further discussion.

During the three months ended March 31, 2021 and 2020, the Company did not have any common stock transactions.

Warrants

The Company has issued warrants to purchase common stock at various exercise prices in connection with loan agreements and private placements. The following table summarizes information about warrants outstanding at June 30, 2020March 31, 2021 and December 31, 2019:2020:

Note 5. Stock Options

The following table summarizes stock option activity for the period endedOn June 30, 2020:

On January 2, 2020, the Company granted Alan L. Rubino,20, 2013, the Company’s PresidentBoard adopted the 2013 Long-Term Incentive Plan and Chief Executive Officer,on November 15, 2013, a stockholder owning a majority of the Company’s issued and outstanding stock approved adoption to the 2013 Plan. Pursuant to the terms of the 2013 Plan, an option to purchase up to 620,571aggregate of 20,000,000 shares of the Company’s common stock at an exercise price of $3.23. The option was granted in fulfillment ofhave been reserved for issuance to the Company’s obligationofficers, directors, employees and consultants in order to attract and hire key technical personnel and management. Options granted to employees under the terms of Mr. Rubino’s employment agreement dated November 15, 2019. On May 22, 2020, the Board of Directors approved the modification of these 620,5712013 Plan, including directors and officers who are employees, may be incentive stock options or non-qualified stock options; options granted to accelerate the vesting from November 14, 2023 to November 14, 2022. The Company calculated the fair value of the options immediately before and after the modification using the Black-Scholes model. There was no incremental consideration due to the modification.

On May 22, 2020, the Company granted options to two consultants and a board member to purchase an aggregate 1,550,000 shares of the Company’s common stock at an exercise price of $1.40. On June 1, 2020, pursuant to his employment agreement, the Company granted Dr. Robin Robinson, the Company’s Chief Scientific Officer, an option to purchase up to 200,000 shares of the Company’s common stock at an exercise price of $1.65. On June 22, 2020, pursuant to his employment agreement, the Company granted Robert Cook, the Company’s Chief Financial Officer, an option to purchase up to 100,000 shares of the Company’s common stock at an exercise price of $1.96. The fair value of the options was estimated at the date of grant using the Black-Scholes option pricing model. Assumptions regarding volatility, expected term, dividend yield and risk-free interest rate are requiredothers under the Black-Scholes model. The volatility assumption is based on the Company’s historical experience. The risk-free interest rate is based on a U.S. Treasury note with maturity similar2013 Plan are limited to the option award’s expected life. The expected life represents the average periodnon-qualified stock options. As of time that options granted are expected to be outstanding.March 31, 2021, there were 16,593,266 shares available for future grants.

The assumptions for volatility, expected life, dividend yield and risk-free interest rate for the options granted are as follows:

The 2013 Plan is administered by the Board or a committee designated by the Board. Subject to the provisions of the 2013 Plan, the Board has the authority to determine the officers, employees and consultants to whom options will be granted, the number of shares covered by each option, vesting rights and the terms and conditions of each option that is granted to them; however, no person may be granted options to purchase more than 2,000,000 shares in any one fiscal year under the 2013 Plan, and the aggregate fair market value (determined at the time the option is granted) of the shares with respect to which incentive stock options are exercisable for the first time by an optionee during any calendar year cannot exceed $100,000. Options granted pursuant to the 2013 Plan are exercisable no later than ten years after the date of grant.

The exercise price per share of common stock for options granted under the 2013 Plan is the fair market value of the Company's common stock on the date of grant, using the closing price of the Company's common stock on the last trading day prior to the date of grant, except for incentive stock options granted to a holder of ten percent or more of the Company's common stock, for whom the exercise price per share will not be less than 110% of the fair market value. No option can be granted under the 2013 Plan after June 20, 2023.

The following table summarizes stock option activity for the three months ended March 31, 2021:

The valuation methodology used to determine the fair value of stock options is the Black-Scholes Model. The Black Scholes Model requires the use of a number of assumptions including volatility of the stock price, the risk-free interest rate, and the expected term of the stock options. The ranges of assumptions used in the Black-Scholes Model during the three months ended March 31, 2020 is set forth in the table below:

The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the expected term. Estimated volatility is a measure of the amount by which the stock price is expected to fluctuate each year during the term of an award. Our calculation of estimated volatility is based on historical stock prices over a period equal to the term of the awards. The average expected life is based on the contractual terms of the stock option using the simplified method. We utilize a dividend yield of zero based on the fact that we have never paid cash dividends and have no current intention to pay cash dividends. Future stock-based compensation may significantly differ based on changes in the fair value of our Common Stock and our estimates of expected volatility and the other relevant assumptions.

The following table sets forth the share-based compensation cost resulting from stock option grants, including those previously granted and vesting over time, is expensed ratably overthat were recorded in the respective vesting periods. DuringCompany’s Statements of Operations for the three and six months ended June 30, 2020,March 31, 2021 and 2020:

Three Months Ended March 31, 2021

During our first quarter 2021, certain individuals resigned from the Company resulting in the forfeiture and cancellation of 2,730,571 options. Compensation expense was recorded on these options prior to their full vesting. As a result, the Company recognized $465,763 and $2,052,285, respectively, in stock-based compensation. During eacha $1,248,575 reversal of the three and six months ended June 30, 2019, the Companyprior recognized $832 in stock-based compensation. As of June 30, 2020, the Company’s unrecognized compensation costexpense related to unvested stockthe cancelled options. The expensed recognized for options was $2,919,698 to be amortized through 2022. Stock-based compensation has been includedstill in the consolidated statement of operations as follows:

The following table summarizes information about stock options outstandingtheir vesting period totaled $373,815 ($278,815 in R&D expense and exercisable at June 30, 2020:$95,000 in G&A expense).

Note 6. Leases

The Company determines if an arrangement is a lease, or contains a lease, at the inception of an arrangement. If the Company determines that the arrangement is a lease, or contains a lease, at lease inception, it then determines whether the lease is an operating lease or finance lease. Operating and finance leases result in recording a right-of-use (“ROU”) asset and lease liability on the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. For purposes of calculating operating lease ROU assets and operating lease liabilities, the Company uses the non-cancellable lease term plus options to extend that it is reasonably certain to exercise. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. The Company’s leases generally do not provide an implicit rate. As such, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company has elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset. The Company has elected not to separate lease and non-lease components for any class of underlying asset.

In February of 2020, the Company entered into a two-year lease for office premises located at 4 Becker Farm Road, Suite 105, Roseland, New Jersey. Monthly base rent in year one of the lease is $3,998;$4,356; and $4,100$4,459 in year 2 of the lease. The term (and payment of the monthly rent) commences upon substantial completion of the landlord’s work, which was expected to occur on or before May 31, 2020. Due to the COVID-19 pandemic the landlord’s work has not been completed as of the date these condensed interim financial statements have been released. During the period of the landlord’s work, thelease term commenced on August 1, 2020.

The Company does not have the right of use of the office premise; accordingly, the Company has not recognized a ROU asset andany finance leases.

Supplemental lease liabilityinformation as of June 30, 2020.March 31, 2021:

Supplemental cash flow information for the three months ended March 31, 2021:

The Company leases office space under a non-cancellable operating lease expiring in 2022. Future lease payments included in the measurement of lease liabilities on the balance sheet at March 31, 2021 for future periods are as follows:

Note 7. Commitments and Contingencies

In connection with the Company’s anticipated regulatory filings, the Company has engaged StemCell Systems GmbH (“StemCell Systems”Systems”) to provide it with prototypes and related documents under various agreements. On July 1, 2020, the Company and StemCell Systems entered into a Strategic R&D Agreement (the “Strategic Agreement”) having an initial term of three years with successive one-year extensions unless earlier terminated. The Strategic Agreement includes a $27,000 monthly fee to be paid to StemCell Systems along with any additional expenses incurred. The Company, StemCell Systems and certain affiliates of StemCells entered into a Rights of First Refusal and Corporate Opportunities Agreement (the “ROFR Agreement”). Pursuant to the ROFR Agreement, (i) in the event a StemCell Systems stockholder receives an offer from a third party to acquire the StemCell Systems stockholders ownership interest, the Company shall have ten business days to purchase such ownership, and (ii) if during the terms of the Strategic Agreement, any StemCell Systems inventions, with respect to skin, burns and wounds, designs, inventions and among other things, whether or not patentable, copyrightable or otherwise legally protectable are discovered by StemCell Systems, the Company shall have the first option to negotiate mutually agreeable terms for the Company’s acquisition or licensing of the StemCell Systems inventions. Pursuant to these engagements the Company incurred expenses of $122,312approximately $120,000 and $198,772 in$76,000 during the three and six months ended June 30,March 31, 2021 and 2020, and, $85,175 and $161,775 during the three and six months ended June 30, 2019, respectively. Dr. Gerlach, from whom the Company purchased the CellMist^TM System and SkinGun^TM technologies, is a principal of StemCell Systems.

On June 3, 2019, the Company entered into a Charitable Gift Agreement with the University of Pittsburgh (“University”), pursuant to which the Company committed to provide a charitable donation to the University in the agreement amount of $250,000 (the “Grant”). The Company paid the Grant in four installments with the first payment made in July 2019. During the three and six months ended June 30, 2020 the Company made payments totaling $0 and $62,500, respectively. During each of the three and six months ended June 30, 2019 the Company made payments totaling $62,500. At June 30, 2020, the balance remaining under this gift was $62,500 which has been included in accounts payable and accrued liabilities in the accompanying condensed consolidated balance sheets. Subsequent to the quarter ending June 30, 2020 the Company paid $62,500 fulfilling its obligation under the Grant. Dr. Gerlach, from whom the Company purchased the CellMist^TM System and SkinGun^TM technology, is a professor at the University.

See also “Note 8. Related Party Transactions.”

Note 8. Related Party Transactions

On June 3, 2019, the Company entered into a Charitable Gift Agreement with the University of Pittsburgh (the "University"), pursuant to which the Company committed to provide a charitable donation to the University in the aggregate amount of $250,000. The Company paid the Grant in four installments with the first payment made in July 2019. During the six months ended June 30, 2020, the Company made the third of four payments totaling $62,500 and made the final payment of $62,500 in July 2020. Dr. Gerlach, from whom the Company purchased the CellMist^TM System and SkinGun^TM technology, is a professor at the University.

During the three months ended June 30,March 31, 2020, Talia Jevan Properties, Inc. made a payment ofpayments totaling $5,287 to Stephen Yan-Klassen, former CFO who resigned in 2020, for his salary on behalf of the Company. Talia Jevan Properties, Inc. is a related party of Harmel S. Rayat, Chairman of the Board. The total compensation Talia Jevan Properties, Inc. made to Stephen Yan-Klassen during the three and six months ended June 30, 2020 was $5,287 and $10,811, respectively.

On August 1, 2013, the Company entered into a consulting agreement, as amended on May 1, 2016, with Jatinder Bhogal, an individual owning in excess of 5% of ourthe Company’s issued and outstanding shares of common stock, to provide consulting services to the Company through his wholly owned company, Vector Asset Management, Inc. (“VAM”VAMI”). Pursuant to the consulting agreement, VectorVAMI assisted the Company with identifying subject matter experts in the medical device and biotechnology industries and assisted the Company with its ongoing research, development and eventual commercialization of its Regeneration Technology. Pursuant to an amendment dated May 1, 2016, the VAMVAMI monthly consulting fee was increased from $5,000 to $6,800. On June 22, 2018, the Company and VAM entered into an Executive Consulting Agreement (“ECA”(the “ECA”) pursuant to which Mr. Bhogal served as the Company’s Chief Operating Officer. The ECA supersedes the prior consulting agreement. Pursuant to the ECA, VAM will receiveVAMI received compensation of $120,000 per year. On July 1, 2020 the Company amended the ECA and paid VAMI $4,000 per month through November 30, 2020 and $200 per month thereafter until May 31, 2021 at which time the agreement will expire. During each of the three months ended June 30,March 31, 2021 and 2020, and 2019, the Company recognized expenses of $30,000$600 and $60,000 during each of the six months ended June 30, 2020 and 2019$30,000 for consulting services provided by VAM.VAMI. Jatinder Bhogal resigned as the Company’s COO effective June 30, 2020.

Kalen Capital Corp (“KCC”) is wholly owned by Mr. Harmel Rayat, the Chairman of the Board. On April 1, 2020 KCC provided a short-term advance of $50,000 to the Company. The short-term advance was repaid by the Company to KCC subsequent to June 30, 2020.

Note 9. Subsequent Events

Research and Development Agreement

The Company and StemCell Systems GmbH (“SCS”), entered into a Strategic R&D Agreement dated July 1, 2020 (the “Strategic Agreement”) having an initial term of three years with successive one-year extensions unless earlier terminated. The Strategic Agreement includes a $25,000 monthly fee to paid to SCS along with any additional expenses incurred.

The Company, SCS, and certain affiliates of SCS entered into a non-binding memorandum of understanding dated July 1, 2020 (the “MOU”) which was subject to execution and delivery of a definitive agreement on or before July 31, 2020 relating to among other things, certain rights of first refusal and first offer pertaining to SCS Inventions and Ownership Interests as defined in the MOU. On July 29, 2020, the Company and SCS entered into a Right of First Refusal and Corporate Opportunities Agreement (the “ROFR Agreement”). Pursuant to this ROFR Agreement, (i) in the event an SCS Stockholder receives an offer from a third party to acquire the SCS Stockholder’s SCS ownership interest, the Company shall have ten business days to purchase such ownership interest, and (ii) if during the term of the Strategic Agreement, any SCS Inventions, with respect to skin, burns and wounds, designs, inventions and among other things, whether or not patentable, copyrightable or otherwise legally protectable are discovered by SCS, the Company shall have the first option to negotiate mutually agreeable terms for the Company’s acquisition or licensing of the SCS Inventions.

In consideration of entering into the ROFR Agreement, SCS was granted an option to purchase up to 999,999 shares of the Company’s common stock. The option grant will vest as follows: (i) 99,999 on July 29, 2020, (ii) 900,000 in equal monthly installments beginning on August 31, 2020. Concurrent with the option grant, SCS assigned and transferred its rights in the options to Dr. Jörg Gerlach, MD, PhD.

New Board Member

On August 1, 2020, the Company appointed Lydia M. Evans, M.D. to its Board of Directors. In connection with the appointment, Dr. Evans was granted an option to purchase up to 20,000 shares of the Company’s common stock at an exercise price of $3.00 per share. 10,000 of the options vest immediately with the balance vesting August 3, 2021.

Related Party Advance Repayment

Subsequent to the period ended June 30, 2020, the Company repaid a $50,000 short-term advance from Kalen Capital Corp, a wholly owned corporation of Mr. Harmel Rayat, the Chairman of the Board.

Management has reviewed material events subsequent of the period ended June 30, 2020,March 31, 2021 and prior to the filing of financial statements in accordance with FASB ASC 855 “Subsequent Events”.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Regarding Forward-Looking Statements

You should read the followingThis discussion and analysis of our financial condition and results of operations together with our financial statementsis based upon and related notes appearing elsewhere in this Quarterly Report filed on Form 10-Q. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors.

This discussion and analysis should be read in conjunction with the accompanying unaudited interim consolidated financial statements of RenovaCare, Inc. (“RenovaCare”) and related notes. The discussion and analysis ofits wholly-owned subsidiary (collectively with RenovaCare, “we,” “our,” “us,” or the financial condition and results of operations are based upon the unaudited interim consolidated financial statements,“Company”), appearing elsewhere in this Quarterly Report on Form 10-Q, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires usthe Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis we review ourthe Company reviews its estimates and assumptions. The estimates were based on historical experience and other assumptions that we believethe Company believes to be reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or conditions, but we do not believe such differences will materially affect our financial position or results of operations. Critical accounting policies, the policies usthe Company believes are most important to the presentation of its financial statements and require the most difficult, subjective and complex judgments, are outlined below in "Critical“Critical Accounting Policies,"” and have not changed significantly.

Cautionary Note Regarding Forward-Looking Statementssignificantly since 2020.

This Quarterly Report on Form 10-Q also contains certain "forward-looking statements"“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, as well as information relating to RenovaCare, Inc. and its subsidiariesthe Company that is based on management's exercise of business judgment and assumptions made by and information currently available to management. Although forward-looking statements in this Quarterly Report on Form 10-Q reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. When used in this document and other documents, releases and reports released by us, the words "anticipate," "believe," "estimate," "expect," "intend," "the“anticipate,” “believe,” “estimate,” “expect,” “intend,” “the facts suggest"suggest” and words of similar import, are intended to identify any forward-looking statements. You should not place undue reliance on these forward-looking statements. These statements reflect our current view of future events and are subject to certain risks and uncertainties as noted below. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results could differ materially from those anticipated in these forward-looking statements. Actual events, transactions and results may materially differ from the anticipated events, transactions or results described in such statements. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance that our expectations will materialize. Many factors could cause actual results to differ materially from our forward-looking statements and unknown, unidentified or unpredictable factors could materially and adversely impact our future results. We undertake no obligation and do not intend to update, revise or otherwise publicly release any revisions to our forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of any unanticipated events. Several of these factors include, without limitation:

The safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, apply to forward-looking statements made by us. The reader is cautioned that no statements contained in this Form 10-Q should be construed as a guarantee or assurance of future performance or results. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks described in this report and matters described in this report generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur.

Overview

RenovaCare, Inc. (formerly Janus Resources, Inc.) (together with its wholly owned subsidiary, “RenovaCare” the “Company” “we” “us” and “our”) was incorporated under the laws of the State of Nevada and has an authorized capital of 500,000,000 shares of $0.00001 par value common stock, of which 87,352,364 shares are outstanding as of June 30, 2020, and 10,000,000 shares of $0.0001 par value preferred stock, of which none are outstanding.

On January 7, 2014, we filed a Certificate of Amendment to Articles of Incorporation changing our name from “Janus Resources, Inc.” to “RenovaCare, Inc.” so as to more fully reflect our operations. The Financial Industry Regulatory Authority (“FINRA”) declared the name change effective as of January 9, 2014. In conjunction with the name change, we changed our stock symbol on the OTCQB from “JANI” to “RCAR”.

Our principal executive offices are located at 4 Becker Farm Road, Suite 105, Roseland, NJ 07068. Our telephone number is (888) 398-0202.

Description of Business

We are a development-stage biotechnology and medical device company focusing on the research, development and commercialization of autologous (using a patient’spatient's own cells) cellular therapies that can be used for medical and aesthetic applications. The Company does not have any commercialized products. The Company's activities have consisted principally of performing research and development activities, business development efforts, and raising capital to support such activities.

The Company, through its wholly owned subsidiary, RenovaCare Sciences Corp., owns the CellMist™ System which is comprised of (a) a treatment methodology for cell isolation procedure that enzymatically renders stem cells from the patient’s own skin or other tissues. The resulting stem cell suspension is administered topically with our SkinGun™ spray device as a cell therapy onto wounds including burns to facilitate healing.

In August 2020, the Company announced that the US Food and Drug Administration (FDA) conditionally approved the Company’s Investigational Device Exemption (IDE) application to conduct a clinical trial that will evaluate the safety and feasibility of autologous skin and pluripotent stem cells rendered by its manual CellMist™ System from donor skin and applied topically with the electronic SkinGun™ spray device for the regenerationtreatment of acute burn wounds. The clinical trial protocol is an open-label single-arm clinical study that will enroll 14 adult human skin cells (the “CellMist™ Solution”)burn subjects with partial-thickness, second-degree thermal burn wounds covering between 10% and (b) a solution sprayer device (the (SkinGun™”) for delivering cells to the treatment30% total body surface area. Along with US patent applications that were granted in November 2016 (Patent No. US 9,505,000), and April 2017 (Patent No. 9,610,430) and, most recently, in August 2019 (Patent No. 10,376,658). The Company has filed additional patent applications relatedexpects to conduct the CellMist™ System and other technologies.clinical study at four (4) U.S. burn centers commencing in the second quarter of 2021.

The development of our new closed, automated cell isolation device for the CellMist^TM System is in the early stage, and we anticipate that we will be required to expendexpect significant time and resources will be devoted to further develop our technology and determine whether a commercially viable product can be developed.the commercial feasibility of the product. Research and development of new technologies involvesinvolve a high degree of risk, and there is no assurance that our development activities will result in a commercially viable product. The long-term profitability of our operations will be, in part, directly related to the cost and success of our development programs, which may be affected by a number of factors.

The Company has not generated any revenue and has sustained recurring losses and negative cash flows from operations since inception. The Company expects to incur losses as it continues development of its products and technologies and expects that it will need to raise additional capital through partnerships or the sale of its securities to accomplish its business plan. Failing to secure such additional funding before achieving sustainable revenue and profit from operations poses a significant risk. The Company's ability to fund the development of its cellular therapies depends on the amount and timing of cash receipts from future financing activities. There can be no assurance as to the availability or terms upon which such financing and capital might be available.

Additionally, there is significant uncertainty relating to the full impact of the COVID-19 pandemic on the Company’s operations and capital requirements. Should financing when needed be unavailable or prohibitively expensive or the COVID-19 pandemic continue, it may adversely affect the Company’s ability to (i) retain employees and consultants; (ii) obtain additional financing on terms acceptable to the Company, if at all; (iii) delay regulatory submissions and approvals; (iv) delay, limit or preclude the Company from the operation of clinical study sites and testing laboratories; (v) delay, limit or preclude the Company from achieving technology or product development goals, milestones, or objectives; and (vi) preclude or delay entry into joint venture or partnership arrangements. The occurrence of any one or more of such events may affect the Company’s ability to continue its pathway to commercialization of its technology or products.

Components of Our Results of Operations

We are currently evaluating

Revenue

To date we have not generated any product revenues and do not expect to generate any revenue for the potentialforeseeable future. Our ability to generate revenue and become profitable depends upon our ability to obtain marketing approval and successfully commercialization of our CellMist^TM System.

Research and Development

Research and development (“R&D”) expenses consist primarily of costs incurred for the development of our CellMist^TM System in the treatment of tissue that has been subject to severe trauma such as second-degree burns. The CellMist^TM System utilizes the patient’s own skin stem cells, and can reduce the size of the donor site and significantly decrease scarring. Furthermore, we believe the CellMist^TM System could enable treatment of other skin disorders with minimal scarring.

In August 2020, the Company announced that the US Food and Drug Administration (“FDA”) conditionally approved the Company’s Investigational Device Exemption (IDE) application to conduct a clinical trial to evaluate the safety and feasibility of autologous stem cells rendered by its CellMist™ System from donor skin and applied topically with the SkinGun™ spray device for treatment of burn wounds. The clinical trial protocol is for an open-label single-arm clinical study that will enroll 14 human burn subjects with partial-thickness second- or- third degree thermal burn wounds. The Company expects to conduct the clinical study at multiple U.S. burn centers.

Our Mission and Strategy

Our ultimate goal is to leverage the potential of our CellMist^TM System, as cutting-edge treatments in skin therapy. Before we can do so, however, there are a number of steps we must first take, including:include:

We do not believe that it is possible at this time to accurately project total expenses required for us to reach commercialization of our CellMist^TM System. In the future, we now have an experienced leadership team which has come togetherexpect that research and development expenses will increase due to achieve our mission of improving the lives of burn patients by creating potentially more effective, saferongoing product development and tolerable treatments. To achieve our goal, we have established the following strategic priorities:approval efforts. We expense research and development costs as incurred.

General and Administrative

General and administrative expenses consist primarily of personnel costs, including non-cash stock-based compensation related to directors and employees, professional service costs including legal, accounting, and other consulting fees and other general and administrative expenses including investor relations, insurance, and facilities costs. We intendexpect general and administrative expenses to continue to pursue our efforts to secure regulatory (FDA) approval in 2020, and if ultimately approved, commence our feasibility studyincrease in the United States.future as we hire personnel and incur additional costs to support the expansion of our research and development activities and our operation as a public company.

Other Income (Expense)

Other income consists of interest income earned on our cash and cash equivalents.

Income Taxes

We intendhave yet to continue to pursue strategic licensing, partnership, and joint venture opportunities.generate taxable income. We have historically incurred operating losses resulting in carry forward tax losses totaling approximately $22.3 million as of December 31, 2020. We anticipate that we will continue to target opportunitiesgenerate tax losses for the foreseeable future and that will complement our existing technology and operations to create value for stockholders and support our business strategy and mission.

Additionally, we will needbe able to pursue financing opportunities, traditional and non-dilutive, and if available on acceptable terms, if at all, in ordercarry forward these tax losses indefinitely to raise sufficient capitalfuture taxable years. Accordingly, we do not expect to fund our ongoing research and development operations in order to expandpay taxes until we have taxable income after the range of possible clinical applicationsfull utilization of our CellMist^TM System.carry forward tax losses. We have provided a full valuation allowance with respect to the deferred tax assets related to these carry forward losses.

Our Market Opportunity

We believe that expedited healing is urgently needed for patients suffering from burns, chronic wounds, acute wounds and scars. In the U.S. alone, this $45 billion market is greater than spending on high-blood pressure management, cholesterol treatments, and back pain therapeutics.Results of Operations

BurnsComparison of Three Months Ended March 31, 2021 and March 31, 2020

Burns are one of the most common and devastating forms of trauma. Most burn injuries involve layers of the upper skin, the epidermis. Severe major trauma involves a complete loss of the entire thickness of the skin and often requires major surgery involving split-skin mesh-grafting. Skin grafting is a procedure where healthy skin is removed from one area of the body and transplanted to a wound site.

Patients with serious thermal injury require immediate specialized care in order to minimize morbidity and mortality. Data from the National Center for Injury Prevention and Control in the U.S. show that approximately 2 million fires are reported each year which result in 1.2 million people with burn injuries (see American Burn Association Burn Incidence and Treatment in the US: 2000 Fact Sheet, available at: http://www.ameriburn.org). Moderate to severe burn injuries requiring hospitalization account for approximately 100,000 of these cases, and about 5,000 patients die each year from burn-related complications (see Church D, Elsayed S, Reid O, Winston B, Lindsay R “Burn wound infections” Clinical Microbiology Reviews 2006;19(2):403–34, available at: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1471990).

The prevalence of patients with severe burns is even higher in emerging economies. For example, according to the World Health Organization over 1,000,000 people in India are moderately to severely burnt every year and approximately 180,000 people worldwide die from burn related injuries (see World Health Organization “Burns: Fact Sheet No. 365,” reviewed March 6, 2018, available at: http://www.who.int/mediacentre/factsheets/fs365/en/). According to Critical Care, an international clinical medical journal, burns are also among the most expensive traumatic injuries because of long and costly hospitalization, rehabilitation and wound and scar treatment (see Brusselaers, N., Monstrey, et al, “Severe Burn Injury in Europe: A systematic Review of the Incidence, Etiology, Morbidity, and Mortality” available at: http://ccforum.com/content/14/5/R188).

Burn injuries account for a significant cost to the health care system in North America and worldwide. In the U.S. there are currently 128 centers specializing in burn care. Recent estimates in the U.S. show that 40,000 patients are admitted annually for treatment with burn injuries, over 60% of the estimated U.S. acute hospitalizations related to burn injury were admitted to burn centers. Such centers now average over 200 annual admissions for burn injury and skin disorders requiring similar treatment. The other 4,500 U.S. acute care hospitals average less than 3 burn admissions per year (see American Burn Association Burn Incidence and Treatment in the US: 2013 Fact Sheet, available at: http://www.ameriburn.org).

According to the Agency for Healthcare Research and Quality, the annual costs for the treatment of burns is $1.5 billion, with another $5 billion in costs associated with lost work (see http://www.hcup-us.ahrq.gov/reports/statbriefs/sb217-Burn-Hospital-Stays-ED-Visits-2013.pdf). Initial hospitalization costs and physicians' fees for specialized care of a patient with a major burn injury are currently estimated to be $200,000. Overall, costs escalate for major burn cases because of repeated admissions for reconstruction and rehabilitation therapy. In the U.S., current annual estimates show that more than $18 billion is spent on specialized care of patients with major burn injuries (see Church D, Elsayed S, Reid O, Winston B, Lindsay R “Burn wound infections” Clinical Microbiology Reviews 2006;19(2):403–34, available at: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1471990).

WoundsResearch and Development Expenses

According to The Wall Street Journal, 6.5 million people are affected by chronic wounds, and $25 billion is spent annually on treating chronic wounds on patients in the U.S. alone (see Järbrink, Krister et al. “Prevalence and incidence of chronic wounds and related complications: a protocol for a systematic review.” Systematic reviews vol. 5,1 152. 8 Sep. 2016 doi:10.1186/s13643-016-0329-y).