H-CYTE, Inc Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

INCOME TAXES

12 Months Ended

Dec. 31, 2015

For the years ended December 31, 2015 and 2014, the Company has incurred net losses and, therefore, has no current income tax liability. The net deferred tax asset generated by these losses, which principally consist of start-up costs deferred for income tax purposes, is fully reserved as of December 31, 2015, since it currently more likely than not that the benefit will not be realized in future periods.

The provision for Federal income tax consists of the following at December 31,:

Current Income Tax Expense:		2015			2014
Federal	$	—		$	—
State		—			—

Total Current Income Tax Expense		—			—

Deferred Income Tax Benefit
Federal		2,426,744			1,223,108
State		280,164			141,206

Total Deferred Tax Benefit		2,706,908			1,364,314

Valuation Allowance		(2706,908	)		(1,364,314	)

Total	$	—		$	—

A reconciliation of the statutory federal income tax expense (benefit) to the effective tax is as follows:

Statutory rate - federal	34.0	%
State taxes, net of federal benefit	4.0

Income tax benefit	38.0	%
Less valuation allowance	(38.0	)

Total	0.0	%

Deferred tax assets and liabilities consist of the following at December 31,:

		2015			2014
Deferred Tax Assets:
Start-up costs	$	3,528,944		$	1,336,486
Share-based compensation		122,834			26,633
Total Deferred Tax Assets		3,651,778			1,363,119
Valuation Allowance		(3,651,778	)		(1,363,119	)
Net Deferred Tax Asset	$	—		$	—

The Company is required to file federal income tax returns and state income tax returns in the states of Florida, Georgia and Minnesota. There are no uncertain tax positions at December 31, 2015. The Company has not undergone any tax examinations since inception and is therefore not subject to examination by any applicable tax authorities.