Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

The Company's loss before income taxes is as follows:

The provision for income tax (benefit) expense consists of the following:


	Years ended December 31,
(in thousands)	2025			2024
Current:
Federal	$	—		$	—
State		—			—
Total current income tax (benefit) expense		—			—
Deferred:
Federal		(8,615	)		(8,697	)
State		(213	)		(566	)
Total deferred income tax (benefit) expense		(8,828	)		(9,263	)
Valuation allowance		8,828			9,263
Total income tax (benefit) expense	$	—		$	—

Significant components of the Company’s taxes and the rates are shown below:


	Years ended December 31,
(in thousands, except percentages)	2025					2024
US federal statutory rate	$	(9,628	)	21.0	%	$	(9,540	)	21.0	%
State and local taxes net of federal income tax effect(1)		(408	)	0.9	%		1		—	%
Tax Credits:
Research and development credits		(591	)	1.3	%		(642	)	1.4	%
Change in valuation allowance		8,615		(18.8	)%		8,816		(19.4	)%
Nontaxable or Nondeductible Items:
Officers' compensation		348		(0.7	)%		588		(1.3	)%
Stock-based compensation		432		(1.0	)%		488		(1.1	)%
Other		5		—	%		5		—	%
Other adjustments		400		(0.9	)%		284		(0.6	)%
Change in unrecognized tax benefits		827		(1.8	)%		—		—	%
Effective income tax rate	$	—		—	%	$	—		—	%

(1) Income tax rate associated with the state of California.

Significant components of the Company’s deferred tax assets and liabilities from federal and state income taxes are shown below:


	Years ended December 31,
(in thousands)	2025			2024
Deferred tax assets:
Tax loss carryforwards	$	31,977		$	27,374
Research and development credits and other tax credits		4,685			4,556
Stock-based compensation		1,645			1,252
Capitalized research and development		17,597			14,209
Operating lease liabilities		180			327
Other		1,314			967
Total deferred tax assets		57,398			48,685
Deferred tax liabilities:
Operating lease right-of-use assets		(136	)		(251	)
Total deferred tax liabilities		(136	)		(251	)
Net deferred tax assets before valuation allowance		57,262			48,434
Valuation allowance		(57,262	)		(48,434	)
Net deferred tax asset	$	—		$	—

A summary of changes to the Company's valuation allowance is presented below:


	Years ended December 31,
(in thousands)	2025		2024
Deferred Tax Assets - Valuation Allowance
Balance at beginning of year	$	48,434	$	39,171
Federal increase/(decrease) charge to expenses		8,615		8,816
State increase/(decrease) charge to expenses		213		447
Balance at end of year	$	57,262	$	48,434

The Company's gross unrecognized tax benefits are as follows:


	Years ended December 31,
(in thousands)	2025		2024
Unrecognized tax benefits
Beginning balance	$	—	$	—
Increases related to prior year tax positions		777		—
Increases related to current year tax positions		158		—
Balance at end of year	$	935	$	—

The amounts of cash taxes paid are as follows:

Cardiff Oncology, Inc. 10-K