XML 16 R7.htm IDEA: XBRL DOCUMENT v3.22.1
Organization and Liquidity
12 Months Ended
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Liquidity

Note 1. Organization and Liquidity

 

Organization

 

RenovaCare, Inc., formerly Janus Resources, is a Nevada corporation. RenovaCare, Inc. was incorporated under the laws of the State of Utah on July 14, 1983 as Far West Gold, Inc.

 

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 December 31, 2021, and 10,000,000 shares of $0.0001 par value preferred stock, of which none are outstanding.

 

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 “CellMistTM System”). 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 the Company’s novel solution sprayer device (the “SkinGunTM”) as a cell therapy onto wounds including burns to facilitate healing.

 

Currently, our proprietary technologies are the subject of forty-four (44) U.S. and foreign granted or pending patents or patent applications and seventeen (17) U.S. and foreign trademarks. Of the issued patents, five (5) are U.S. patents and seventeen (17) have issued or are allowed in Australia, Canada, China, Europe, Germany, France, Italy, Japan, Korea, Netherlands, Spain, Switzerland/Liechtenstein, and the United Kingdom. The Company has six (6) allowed trademarks in the United States, two (2) European registered trademarks, two (2) United Kingdom trademarks, two (2) Japan trademarks, and two (2) pending in Canada.

 

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.

 

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 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.

 

Liquidity

 

The Company has not generated any revenue since inception and has sustained recurring losses and negative cash flows from operations since inception. We expect to incur losses as we continue our research and development activities. The Company's activities are subject to significant risks and uncertainties due to the stage of the development of the Company's cellular therapies. At December 31, 2021, the Company had approximately $2,800,000 in cash on hand and an accumulated deficit of $34,239,904. The Company has historically funded its operations through the issuance of convertible notes, the sale of common stock and issuance of warrants.

 

The Company evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year beyond the filing of this Annual Report on Form 10-K. Based on such evaluation and the Company’s current plans, which are subject to change, management believes that the Company’s existing cash as of December 31, 2021 is sufficient to satisfy its operating cash needs for the year after the filing of this Annual Report on Form 10-K.

 

The Company is responsible to bear the costs to defend itself and its directors and officers, pursuant to the indemnification clause in the Company’s bylaws, against the Lawsuits. Subsequent to December 31, 2021, the Company depleted the funds available under its D&O Policy. The legal costs to defend the Company against the Lawsuits are expected to be material. The Company’s legal counsel provided a non-binding estimate of the legal costs to defend the Company of approximately $3,000,000 over the next 16 – 20 months. To assist the Company in paying the costs to defend against the Lawsuits, the Company’s Chairman loaned the Company $800,000 on March 18, 2022 pursuant to a convertible note, see Note 11 – Subsequent Events, for additional information. Due to the nature of the Lawsuits, and the early stage of the proceedings, the estimated amounts disclosed above is only an estimate. The estimate above does not include the potential costs to the Company in the event that it is not successful in its defense.

 

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 future of the Company will depend on its ability to successfully raise capital from external sources. As noted above, management believes that the Company’s existing cash as of December 31, 2021 are sufficient to satisfy its operating cash needs for the year after the filing of this Annual Report on Form 10-K. However, if the Company is unable to maintain sufficient financial resources, its business, financial condition and results of operations will be materially and adversely affected. This could affect future development and business activities and potential future product development and/or other future ventures. There can be no assurance that the Company will be able to obtain the needed financing on acceptable terms or at all. Additionally, equity or convertible debt financings will likely have a dilutive effect on the holdings of the Company’s existing stockholders. Debt financing may involve agreements that include covenants limiting or restricting the Company’s ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, and may be secured by all or a portion of the Company’s assets.