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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes |
(1 4) | Income Taxes
There is no income tax expense recognized for the years ended December 31, 2020 and 2019, respectively. Loss before taxes consists of:
|  | December 31, 2020 |  |  | December 31, 2019 |
Domestic |  | $ | (23,643 | ) |  | $ | (4,882 | )
Foreign |  |  | (513 | ) |  |  | (3,997 | )
Income (loss) before taxes |  | $ | (24,156 | ) |  | $ | (8,879 | )
The provision for income taxes differs from the amount computed by applying the statutory rate as follows:
|  | December 31, 2020 |  |  | December 31, 2019 |
Income taxes using U.S federal statutory rate |  | $ | (5,073 | ) |  | $ | (1,865 | )
Nondeductible interest |  |  | 315 |  |  |  | 994 |
Loss on extinguishment of debt |  |  | — |  |  |  | 361 |
Loss of tax benefit of state net operating loss carryforwards |  |  | (11 | ) |  |  | 1,477 |
Loss of tax benefit of federal tax credit carryforwards |  |  | — |  |  |  | 324 |
Branch income |  |  | (238 | ) |  |  | — |
State income taxes, net of federal benefit |  |  | (1,788 | ) |  |  | (1,461 | )
Foreign rate differential |  |  | (238 | ) |  |  | 664 |
Valuation allowance |  |  | 6,281 |  |  |  | 3,512 |
Derivative charge |  |  | 595 |  |  |  | (3,674 | )
Stock option exercises and cancellations |  |  | 308 |  |  |  | — |
Research and development costs |  |  | (166 | ) |  |  | (316 | )
Other |  |  | 15 |  |  |  | (16 | )
Total |  | $ | — |  |  | $ | — |
Significant components of the Company’s deferred tax assets are as follows:
|  | December 31, 2020 |  |  | December 31, 2019 |
Deferred tax assets: |  |  |  |  |  |  |  |
Employee compensation accruals |  | $ | 796 |  |  | $ | 84 |
Accrued liabilities |  |  | 361 |  |  |  | — |
Research tax credits |  |  | 346 |  |  |  | 135 |
Lease obligation |  |  | 265 |  |  |  | 206 |
Other |  |  | 87 |  |  |  | 72 |
Net operating losses |  |  | 19,742 |  |  |  | 14,502 |
Total deferred tax assets |  |  | 21,597 |  |  |  | 14,999 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Right of use asset |  |  | 265 |  |  |  | 206 |
Total deferred tax liabilities |  |  | 265 |  |  |  | 206 |
Valuation allowance |  |  | 21,332 |  |  |  | 14,793 |
Net deferred tax assets |  | $ | — |  |  | $ | — |
As of December 31, 2020, and 2019, the Company had net operating loss carryforwards for U.S. federal income tax purposes of approximately $260,622 and $246,347, respectively. A significant portion of the federal amount is subject to an annual limitation as low as $27,500 as a result of changes in the Company’s ownership in May 2003, November 2016, and multiple dates throughout 2017, 2018 and 2019, as defined by Section 382 of the United States Internal Revenue Code of 1986, as amended (the “IRC”), and the related income tax regulations. As a result of the limitations caused by the May 2003, November 2016 and multiple 2017, 2018 and 2019 ownership changes, approximately $206,112 of the total net operating loss carryforwards is expected to expire unutilized and will be unavailable to offset future federal taxable income. Approximately $54,510 of net operating loss carryforwards remains available to offset future federal taxable income, of which $1,737 will expire between 2020 and 2037 and $52,773 will have an unlimited carryforward period as a result of the Tax Cuts and Jobs Act. In addition, the Company’s state net operating losses are also subject to annual limitations that generally follow IRC Section 382 provisions (with the exception of Connecticut), adjusted for each state’s respective income apportionment percentages. As of December 31, 2020, and 2019, the Company had net operating loss carryforwards for state and city income tax purposes between approximately $26,414 and $192,466 and between approximately $27,311 and $180,611, respectively, which expire through 2040. As a result of the IRC Section 382 limitations, approximately $168,826 and $153,056 of New York State and New York City net operating losses are expected to expire unutilized and will be unavailable to offset future taxable income. Approximately $23,641 and $23,623 of net operating loss carryforwards, respectively, will be available to offset future state and city taxable income. As of December 31, 2020, and 2019 the Company had a net operating loss carryforward for foreign income tax purposes of $30,880 and $26,141, respectively, which have indefinite carryforward periods. As of December 31, 2020, and 2019, the Company had federal research and development tax credit carryforwards of approximately $5,458 and $5,292, respectively, which expire through 2040. As a result of the IRC Section 382 limitations, all but $346 of the tax credit carryforwards is expected to expire unutilized. Management has established a 100% valuation allowance against the deferred tax assets as management does not believe it is more likely than not that these assets will be realized. The Company’s valuation allowance increased by approximately $6,540 and $3,428 in 2020 and 2019, respectively. The change in valuation is as follows:
|  | December 31, 2020 |  |  | December 31, 2019 |
Beginning balance |  | $ | 14,793 |  |  | $ | 11,364 |
Charged to costs and expenses |  |  | 6,281 |  |  |  | 3,512 |
Charged to additional paid-in capital |  |  | — |  |  |  | — |
Charged to retained earnings |  |  | — |  |  |  | — |
Charged to other comprehensive income |  |  | 258 |  |  |  | (83 | )
Ending balance |  | $ | 21,332 |  |  | $ | 14,793 |
On March 27, 2020, President Trump signed into law the $2 trillion bipartisan Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748). The CARES Act includes a variety of economic and tax relief measures intended to stimulate the economy, including loans for small businesses, payroll tax credits/deferrals, and corporate income tax relief. Due to the Company’s history of tax loss carryforwards and full valuation allowance, the CARES Act did not have a significant effect on the income tax provision, as the corporate income tax relief was directed towards cash taxpayers. The Company complies with the provisions of ASC 740-10 in accounting for its uncertain tax positions. ASC 740-10 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company has determined that the Company has no significant uncertain tax positions requiring recognition under ASC 740-10 and therefore has not included a tabular rollforward of unrecognized tax benefits. As there are no uncertain tax positions recognized, interest and penalties have not been accrued. The Company is subject to income tax in the U.S., as well as various state and international jurisdictions. The Company has not been audited by any state tax authorities in connection with income taxes. The Company has not been audited by international tax authorities or any states in connection with income taxes. The Company’s New York State tax returns have been subject to annual desk reviews which have resulted in insignificant adjustments to the related franchise tax liabilities and credits. The Company is no longer subject to federal and state examination for tax years ending prior to December 31, 2017; tax years ending December 31, 2017 through December 31, 2020 remain open to examination. The Republic of Ireland is the Company’s only significant foreign jurisdiction. The Company is no longer subject to Ireland tax examination for tax years ending prior to December 31, 2016 (as Ireland has not initiated an audit of 2015 as of December 31, 2020); tax years ending December 31, 2016 through December 31, 2020 remain open to examination. However, the Company’s tax years December 31, 1998 through December 31, 2020 generally remain open to adjustment for all federal, state and foreign tax matters until its net operating loss and tax credit carryforwards are utilized or expire prior to utilization, and the applicable statutes of limitation have expired in the utilization year. The federal and state tax authorities can generally reduce a net operating loss (but not create taxable income) for a period outside the statute of limitations in order to determine the correct amount of net operating loss which may be allowed as a deduction against income for a period within the statute of limitations. Delcath recognizes interest accrued related to unrecognized tax benefits and penalties, if incurred, as a component of income tax expense.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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