| Organization, Overview of Operations, Basis of Presentation, Liquidity, Recent Accounting Standards and Earnings (Loss) Per Share | Note
1. Organization, Overview of Operations, Basis of Presentation, Liquidity, Recent Accounting Standards
and Earnings (Loss) Per Share 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 June 30, 2021, and
10,000,000 shares
of $ 0.0001 par
value preferred stock, of which none are
outstanding. Overview
of Operations RenovaCare,
Inc., through its wholly owned subsidiary, RenovaCare Sciences Corp. is a development-stage company focusing on the research, development
and commercialization of autologous (using a patient’s own cells) cellular therapies that can be used for medical and aesthetic
applications. On
July 12, 2013, the Company completed the acquisition of its flagship technologies (collectively, the “ CellMist TM The CellMist™ System is a 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 from SkinGun TM as a cell therapy onto wounds
including burns to facilitate healing. In
August 2019, the Company was awarded a continuation of a patent allowing the SkinGun TM 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. On
May 6, 2021 the Food and Drug Administration gave full-approval of the Company’s Investigational Device Exemption (IDE) application
to proceed with initial clinical testing of the CellMist™ System and SkinGun™ spray device in adult burn patients. The
Company has four United States patents and patents in Germany, Australia, Canada, and Europe, with the European patent being validated
in France, Germany, Italy, Netherlands, Spain, Switzerland/Lichtenstein, and United Kingdom. The Company also has patent applications
pending in the United States and in multiple countries. The
Company has six allowed trademarks in the United States and two pending applications. Globally, the Company has two European registered
trademarks, two United Kingdom trademarks, two pending in Canada, and one allowed and one pending in Japan. Improvements
in the design and efficiency of the CellMist™ System including a closed, 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 cell isolation and
spray gun devices as stand-alone 510(k)-cleared products for isolation of cells from other tissues and spraying other solutions of medical
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 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. Basis
of Presentation The
accompanying unaudited interim consolidated financial statements of RenovaCare, Inc. and Subsidiary (the “ Company SEC U.S. GAAP The
accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires management
to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying disclosures.
Actual results may differ from those estimates. The accompanying unaudited interim consolidated financial statements have been prepared
on the same basis as the audited financial statements and include all adjustments (including normal recurring adjustments) that are,
in the opinion of management, necessary for a fair presentation of the Company’s consolidated financial position as of June 30,
2021, results of operations and stockholders’ equity for the three and six months ended June 30, 2021 and 2020, and cash flows
for the six months ended June 30, 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 any interim period are not necessarily indicative of the results of operations for
the entire year. Liquidity As
of June 30, 2021, the Company had $ 4,342,978 of
cash on hand and cash equivalents, and working capital of $ 4,592,838 .
As a result, 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. 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 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. 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. 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, 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, 2021 and 2020:
Summary
of computation of basic and diluted net loss per share
Three
Months Ended Six
Months Ended
June
30, June
30,
2021 2020 2021 2020
Basic
and Diluted EPS Computation
Numerator:
Loss
available to common stockholders' $ (911,961 ) $ (3,011,593 ) $ (1,429,203 ) $ (4,186,346 )
Denominator:
Weighted
average number of common shares outstanding 87,352,364 87,352,364 87,352,364 87,352,364
Basic
and diluted EPS $ (0.01 ) $ (0.03 ) $ (0.02 ) $ (0.05 )
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:
Stock
options 3,089,999 4,788,071 3,089,999 4,788,071
Warrants 12,296,912 12,296,912 12,296,912 12,296,912
Total
shares not included in the computation of diluted losses per share 15,386,911 17,084,983 15,386,911 17,084,983 |
