INCOME TAXES

12 Months Ended

Feb. 29, 2012

Notes to Financial Statements

NOTE 4 - INCOME TAXES

MetaStat uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. During the fiscal years ended February 29, 2012, and February 28, 2011, MetaStat incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $1,933,066 at February 29, 2012, and will expire in the years 2029, 2030 and 2031.

As at February 29, 2012, deferred tax assets consisted of the following:

	2012			2011
Net operating loss carryforwards	$	1,933,066		$	340,460
Deferred tax asset	$	676,573		$	676,573
Less: Valuation allowance		(676,573	)		(676,573	)
Net deferred tax asset	$	-		$	-