Income Taxes:

12 Months Ended

Feb. 28, 2013

Income Taxes:

Income Taxes:

6. Income Taxes:

The costs incurred related to the conduct of FDA approved clinical trials incurred directly by Dr. Burzynski within his medical practice are deducted by Dr. Burzynski and are not included in the Company’s tax provision.

The actual income tax benefit attributable to the Company’s losses for the years ended February 28, 2013 and February 29, 2012, respectively, differ from the amounts computed by applying the U.S. federal income tax rate of 34% to the pretax loss as a result of the following:

	2013			2012
Expected benefit	$	(2,209,594	)	$	(2,433,605	)
Effect of expenses deducted directly by Dr. Burzynski	2,209,594			2,433,605
Other adjustments	(51,160		)	165,068
Change in valuation allowance	51,160			(165,068		)
Income tax expense	$	—		$	—

The components of the Company’s deferred income tax assets as of February 28, 2013 and February 29, 2012, repectively, are as follows:

	2013			2012
Deferred tax assets:
Net operating loss carryforwards	$	211,858		$	159,410
Excess book (tax) depreciation	(616		)	(641		)
Accrued expenses	5,925			7,238
Alternative minimum tax credit carryforwards	42,603			42,603
Total deferred tax assets	259,770			208,610
Less valuation allowance	(259,770		)	(208,610		)
Net deferred tax assets	$	—		$	—

The Company’s ability to utilize net operating loss carryforwards and alternative minimum tax credit carryforwards will depend on its ability to generate adequate future taxable income.  The Company has no historical earnings on which to base an expectation of future taxable income.  Accordingly, a valuation allowance for the total deferred tax assets has been provided.

The Company has net operating loss carryforwards available to offset future income in the amount of $623,111 as of February 28, 2013. The net operating loss carryforwards expire as follows:

Year ending
February 28, or 29,
2020	$	49,976
2021	$	24,116
2022	$	67,855
2023	$	73,401
2024	$	69,394
2025	$	13,475
2026	$	46,972
2027	$	31,220
2028	$	7,737
2029	$	31,868
2030	$	—
2031	$	—
2032	$	—
2033	$	207,097

In addition, the Company has alternative minimum tax credit carryforwards of $42,603 at February 28, 2013.