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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes At December 31, 2022, Cardiff Oncology had federal net operating loss carryforwards (“NOLs”) of approximately $5.1 million which, if not used, will continue to expire through 2037, and federal net operating loss carryforwards of approximately $85.8 million, which do not expire. Cardiff Oncology also has California NOLs of approximately $17.3 million which, if not used, will begin to expire in 2029. Cardiff Oncology also has research and development tax credits available for federal and California purposes of approximately $1.0 million and $2.3 million, respectively. The federal research and development tax credits will begin to expire on January 31, 2025. The California research and development tax credits do not expire. Pursuant to the Internal Revenue Code of 1986, as amended (the “Code”) Sections 382 and 383, annual use of a company’s NOL and research and development credit carryforwards may be limited if there is a cumulative change in ownership of greater than 50% within a three-year period. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. If limited, the related tax asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance. The Company has established a valuation allowance as the realization of such deferred tax assets has not met the more likely than not threshold requirement. Due to the existence of the valuation allowance, further changes in the Company’s unrecognized tax benefits will not impact the Company’s effective tax rate. During 2022, the Company completed an assessment of the available net operating loss and tax credit carryforwards under Section 382 and 383 and determined that the Company underwent two ownership changes during the period from 2014 to 2022. As a result, net operating loss and tax credit carryforwards attributable to the pre-ownership changes are subject to substantial annual limitations under Section 382 and 383 of Code due to the ownership changes. The Company has adjusted their net operating loss and tax credit carryforwards to address the impact of the ownership changes. This resulted in a reduction of available gross federal and state net operating loss carryforwards of approximately $123.9 million and $62.8 million, respectively which related to the year ended December 31, 2021 and prior. The tax effected federal and state NOL amounts were $26.0 million and $4.4 million respectively. This also resulted in a reduction of federal tax credit carryforwards of approximately $1.8 million related to the years ended December 31, 2021 and prior. Accordingly, the net operating loss and tax credit carryforwards presented below for the year ending December 31, 2021 were reduced by $30.4 million and $1.8 million, respectively, with a corresponding reduction to the valuation allowance of $32.2 million. The provision for income taxes based on losses from continuing operations consists of the following at December 31:
| Years ended December 31,
(in thousands) | 2022 |  | 2021 |  |
Current: |  |  |  |  |
State | $ | — |  |  | $ | 1 |  |  |
Total current provision | — |  |  | 1 |  |  |
Deferred: |  |  |  |  |
Federal | 19,054 |  |  | (5,551) |  |  |
State | 4,902 |  |  | (531) |  |  |
Total deferred (benefit) expense | 23,956 |  |  | (6,082) |  |  |
Valuation allowance | (23,956) |  |  | 6,081 |  |  |
Total income tax provision | $ | — |  |  | $ | — |  |  |
Significant components of the Company’s taxes and the rates as of December 31 are shown below:
| Years ended December 31,
(in thousands, except percentages) | 2022 |  | 2021
Tax computed at the federal statutory rate | $ | (8,128) |  |  | 21 | % |  | $ | (5,941) |  |  | 21 | %
State tax, net of federal tax benefit | (518) |  |  | 1 | % |  | (233) |  |  | 1 | %
Permanent items | 32,369 |  |  | (84) | % |  | 62 |  |  | — | %
Stock based compensation | 553 |  |  | (1) | % |  | 325 |  |  | (1) | %
Research and development credits | (319) |  |  | 1 | % |  | (366) |  |  | 1 | %
Return to provision and true ups | — |  |  | — | % |  | — |  |  | — | %
Other | (1) |  |  | — | % |  | 72 |  |  | — | %
Valuation allowance increase (decrease) | (23,956) |  |  | 62 | % |  | 6,081 |  |  | (22) | %
Provision for income taxes | $ | — |  |  | — | % |  | $ | — |  |  | — | %
Significant components of the Company’s deferred tax assets and liabilities from federal and state income taxes as of December 31 are shown below (in thousands):
| Years ended December 31,
(in thousands) | 2022 |  | 2021
Deferred tax assets: |  |  |
Tax loss carryforwards | $ | 20,289 |  |  | $ | 17,506 |
Research and development credits and other tax credits | 2,743 |  |  | 2,226 |
Stock-based compensation | 1,317 |  |  | 962 |
Capitalized research and development | 4,794 |  |  | — |
Other | 1,431 |  |  | 1,750 |
Total deferred tax assets | 30,574 |  |  | 22,444 |
Deferred tax liabilities: |  |  |
Operating lease right-of-use assets | (492) |  |  | (611) |
Other | — |  |  | — |
Total deferred tax liabilities | (492) |  |  | (611) |
Net deferred tax assets before valuation allowance | 30,082 |  |  | 21,833 |
Valuation allowance | (30,082) |  |  | (21,833) |
Net deferred tax asset | $ | — |  |  | $ | — |
Since inception the Company has incurred continuing losses and expects to continue to incur losses for the foreseeable future. The Company has recorded a full valuation allowance against its net deferred tax assets as it is more likely than not they will not be realized. Cardiff Oncology does not have any unrecognized tax benefits. Cardiff Oncology’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense, and none have been incurred to date. The Company does not anticipate a significant change in unrecognized tax benefits over the next 12 months. The Company is subject to taxation in the U.S. and California. Due to net operating losses all tax years since inception remain open to examination.

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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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://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 https://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 https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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