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 29, 2016 and February 28, 2015 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:

	2016			2015
Expected benefit	$	(681,734	)	$	(983,296	)
Effect of expenses deducted directly by Dr. Burzynski	681,734			983,296
Other adjustments	12,691			4,175
Change in valuation allowance	(12,691		)	(4,175		)

Income tax expense	$	—		$	—

The components of the Company’s deferred income tax assets as of February 29, 2016 and February 28, 2015 are as follows:

	2016			2015
Deferred tax assets:
Net operating loss carryforwards	$	222,957		$	235,514
Excess book (tax) depreciation	(230		)	(462		)
Accrued expenses	—			366
Alternative minimum tax credit carryforwards	42,603			42,603

Total deferred tax assets	265,330			278,021
Less valuation allowance	(265,330		)	(278,021		)

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 $655,757 as of February 29, 2016. The net operating loss carryforwards expire as of February 28 or 29 of the following years:

2020	$	5,980	2029	$	31,868
2021	$	24,116	2030	$	—
2022	$	67,855	2031	$	—
2023	$	73,401	2032	$	—
2024	$	69,394	2033	$	207,097
2025	$	13,475	2034	$	76,642
2026	$	46,972	2035	$	—
2027	$	31,220	2036	$	—
2028	$	7,737

In addition, the Company has alternative minimum tax credit carryforwards of $42,603 at February 29, 2016.