10.      INCOME TAX

There was no income tax provision or benefit for the years ended December 31, 2014, 2013 and 2012.

The provision for income taxes was different from the expected statutory federal income tax rate as follows:

The Company’s net deferred tax assets and deferred tax liabilities were recorded in other assets and accrued and other liabilities, respectively on the Consolidated Balance Sheets and consist of the following as of December 31, 2014 and 2013:

Based on the available evidence, the Company has recorded a full valuation allowance against its net deferred income tax assets as it is more likely than not that the benefit of these deferred tax assets will not be realized. The valuation allowance increased by $7.6 million and $7.6 million during the years ended December 31, 2014 and December 31, 2013, respectively.

On August 8, 2014 Alpine Biosciences Inc., merged into and with Protocell Therapeutics Inc., a wholly owned subsidiary of Oncothyreon Inc. For tax purposes this transaction is treated as a stock acquisition and therefore the tax attributes of Alpine were recorded through purchase accounting. There was no release of the valuation allowance due to the acquisition.

The Company has recorded the following reserve for uncertain tax positions as of December 31, 2014, 2013 and 2012:

None of the unrecognized tax benefits that, if recognized, would affect the effective tax rate due to valuation allowance. We are currently not under audit by the federal, state and foreign tax authorities. We do not believe that it is reasonably possible that the total amounts of unrecognized tax benefit will materially increase or decrease within the next 12 months.

United States

The Company has accumulated net operating losses in the United States of $183.9 million and $168.4 million for United States federal tax purposes at December 31, 2014 and 2013, respectively, some of which are restricted pursuant to Section 382 of the Internal Revenue Code, and which may not be available entirely for use in future years. These losses expire in fiscal years 2018 through 2034. The Company has federal research and development tax credit carry forwards of $0.5 million that will expire in fiscal years 2018 through 2023, if not utilized.

Canada

The Company has unclaimed Canada federal investment tax credits of $17.6 million and $19.1 million at December 31, 2014 and 2013, respectively, that expire in fiscal years 2018 through 2029. The Company has scientific research & experimental development expenditures of $118.0 million and $128.3 million for Canada federal purposes and $51.7 million and $56.2 million for provincial purposes at December 31, 2014 and 2013, respectively. These expenditures may be utilized in any period and may be carried forward indefinitely. The Company also has Canada federal capital losses of $160.3 million and $174.3 million and provincial capital losses of $160.4 million and $174.4 million at December 31, 2014 and 2013, respectively, that can be carried forward indefinitely to offset future capital gains. The Company has accumulated net operating losses of $5.5 million and $5.7 million at December 31, 2014 and 2013 for Canada federal tax purposes and $3.5 million and $3.6 million at December 31, 2014 and 2013 for provincial purposes which expire between 2027 and 2033. The Company is subject to examination by the Canada Revenue Agency for years after 2008. However carryforward attributes that were generated prior to 2008 may still be adjusted by a taxing authority upon examination if the attributes have been or will be used in a future period.

Other

The Company files federal and foreign income tax returns in the United States and abroad. For U.S. federal income tax purposes, the statute of limitations is open for 1998 and onward for the United States and Canada due to net operating loss carried forwards.