Aprea Therapeutics (APRE) 10-Q 15 May 20 2020 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 15, 2020
Document and Entity Information
Document Type	10-Q
Document Period End Date	Mar. 31, 2020
Entity Registrant Name	Aprea Therapeutics, Inc.
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		21,054,842
Entity Central Index Key	0001781983
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 122,513,357	$ 130,088,869
Prepaid expenses and other current assets	2,090,941	2,955,878
Total current assets	124,604,298	133,044,747
Property and equipment, net	45,934	41,639
Right of use lease asset	445,538	521,392
Other noncurrent assets	29,360	107
Total assets	125,125,130	133,607,885
Current liabilities:
Accounts payable	3,006,688	2,176,852
Accrued expenses	8,298,769	6,642,553
Lease liability—current	238,771	242,329
Total current liabilities	11,544,228	9,061,734
Lease liability—noncurrent	227,288	302,621
Total liabilities	11,771,516	9,364,355
Commitments and contingencies (Note 7)
Stockholders’ equity:
Common stock, $0.001 par value, 400,000,000 shares authorized, 21,054,872 and 21,022,752 shares issued and outstanding at March 31, 2020 and December 31, 2019 , respectively.	21,055	21,023
Additional paid-in capital	227,219,510	226,284,548
Accumulated other comprehensive loss	(13,958,431)	(11,533,778)
Accumulated deficit	(99,928,520)	(90,528,263)
Total stockholders’ equity	113,353,614	124,243,530
Total liabilities and stockholders’ equity	$ 125,125,130	$ 133,607,885

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
Condensed Consolidated Balance Sheets
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	400,000,000	400,000,000
Common stock, shares issued	21,054,872	21,022,752
Common stock, outstanding	21,054,872	21,022,752

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Operating expenses:
Research and development	$ 9,096,122	$ 3,678,444
General and administrative	2,776,468	729,326
Total operating expenses	11,872,590	4,407,770
Other income (expense):
Interest income (expense)	224,442	(3,348)
Foreign currency gain	2,247,891	935,916
Total other income (expense)	2,472,333	932,568
Net loss	(9,400,257)	(3,475,202)
Other comprehensive income (loss):
Foreign currency translation	(2,424,653)	(2,031,175)
Total comprehensive loss	$ (11,824,910)	$ (5,506,377)
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share)	$ (0.45)	$ (2.97)
Weighted-average common shares outstanding, basic and diluted (in shares)	21,052,726	1,171,193

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit - USD ($)	Common Stock	Additional Paid-in capital	Accumulated other comprehensive loss	Accumulated deficit	Series A convertible preferred stock	Series B convertible preferred stock	Series C convertible preferred stock	Total
Temporary equity, beginning balance at Dec. 31, 2018					$ 6,483,044	$ 49,742,942	$ 56,364,645
Temporary Equity, Beginning Balance (in shares) at Dec. 31, 2018					612,446	7,235,969	4,712,698
Increase (Decrease) in Temporary Equity
Issuance of convertible preferred stock, net of issuance costs							$ 5,598,362
Issuance of convertible preferred stock (in shares)							467,179
Temporary equity, ending balance at Mar. 31, 2019					$ 6,483,044	$ 49,742,942	$ 61,963,007
Temporary Equity, Ending Balance (in shares) at Mar. 31, 2019					612,446	7,235,969	5,179,877
Equity, beginning balance at Dec. 31, 2018	$ 127,091	$ 19,666,588	$ (8,761,325)	$ (62,468,456)				$ (51,436,102)
Equity, Beginning Balance (in shares) at Dec. 31, 2018	1,155,366
Increase (Decrease) in Stockholders' Equity
Exercise of stock options	$ 2,883	20,235						23,118
Exercise of stock options (in shares)	26,207
Stock based compensation		97,946						97,946
Foreign currency translation			(2,031,175)					(2,031,175)
Net loss				(3,475,202)				(3,475,202)
Equity, ending balance at Mar. 31, 2019	$ 129,974	19,784,769	(10,792,500)	(65,943,658)				(56,821,415)
Equity, Ending Balance (in shares) at Mar. 31, 2019	1,181,573
Equity, beginning balance at Dec. 31, 2019	$ 21,023	226,284,548	(11,533,778)	(90,528,263)				124,243,530
Equity, Beginning Balance (in shares) at Dec. 31, 2019	21,022,752
Increase (Decrease) in Stockholders' Equity
Exercise of stock options	$ 32	29,491						29,523
Exercise of stock options (in shares)	32,090
Stock based compensation		905,471						905,471
Foreign currency translation			(2,424,653)					(2,424,653)
Net loss				(9,400,257)				(9,400,257)
Equity, ending balance at Mar. 31, 2020	$ 21,055	$ 227,219,510	$ (13,958,431)	$ (99,928,520)				$ 113,353,614
Equity, Ending Balance (in shares) at Mar. 31, 2020	21,054,842

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit (Parenthetical)	3 Months Ended
	Mar. 31, 2019USD ($)
Series C convertible preferred stock
Convertible preferred stock issuance costs	$ 53,509

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities:
Net loss	$ (9,400,257)	$ (3,475,202)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	3,812	2,141
Stock‑based compensation	905,471	97,946
Amortization of right of use lease asset	63,962	25,782
Foreign currency gain	(2,247,891)	(935,916)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	864,937	57,929
Accounts payable	829,836	202,292
Accrued expenses and other liabilities	1,656,216	(145,555)
Lease liability	(217,711)	(26,763)
Net cash used in operating activities	(7,541,625)	(4,197,346)
Cash flows from investing activities:
Purchases of property and equipment	(12,165)
Net cash used in investing activities	(12,165)
Cash flows from financing activities:
Proceeds from the exercise of stock options	29,523	23,118
Deferred offering costs		(188,826)
Proceeds from issuance of Series C convertible preferred, net		5,598,362
Net cash provided by financing activities	29,523	5,432,654
Increase (decrease) in cash and cash equivalents	(7,524,267)	1,235,308
Effect of exchange rate changes on cash	(51,245)	(1,228,692)
Cash and cash equivalents—beginning of year	130,088,869	65,675,931
Cash and cash equivalents—end of year	$ 122,513,357	65,682,547
Non‑cash activities:
Cumulative effect of change in accounting principle—ASC 842 adoption		$ 329,384

Nature of business and basis of

Nature of business and basis of presentation	3 Months Ended
	Mar. 31, 2020
Nature of business and basis of presentation
Nature of business and basis of presentation	1. Nature of business and basis of presentation Nature of business —Aprea Therapeutics, Inc. (or the “Company”) is a clinical‑stage biopharmaceutical company focused on developing and commercializing novel cancer therapeutics that reactivate mutant tumor suppressor protein p53. p53 is the protein expressed from the TP53 gene, the most commonly mutated gene in cancer. The Company began principal operations in 2006 and is headquartered in Boston, Massachusetts with research facilities in Stockholm, Sweden. Corporate reorganization - In September 2019, the Company completed a corporate reorganization whereby Aprea Therapeutics AB became a wholly-owned subsidiary of the Company. In connection with the corporate reorganization, each issued and outstanding share of Series A, Series B and Series C convertible preferred stock of Aprea Therapeutics AB was exchanged on a one for one basis into shares of Series A, Series B and Series C convertible preferred stock of the Company. Each share of common stock of Aprea Therapeutics AB ($0.11 par value) was also exchanged on a one for one basis into shares of common stock of the Company ($0.001 par value). Basis of presentation and management plans —The accompanying financial statements are prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, and raising capital, and has financed its operations through the issuance of convertible preferred stock and common stock. The Company is subject to risks common to companies in the biopharmaceutical industry. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be maintained, that any therapeutic products developed will obtain required regulatory approval or that any approved or consumer products will be commercially viable. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will generate significant product sales. The Company believes that the March 31, 2020 cash balance of approximately $122.5 million will be sufficient to fund the Company’s operations into 2023. In the event that additional funds are not available thereafter, management would expect to significantly reduce expenditures to conserve cash, which would involve scaling back or curtailing new development activity.

Summary of significant accounti

Summary of significant accounting policies	3 Months Ended
	Mar. 31, 2020
Summary of significant accounting policies
Summary of significant accounting policies	2. Summary of significant accounting policies The Company's complete listing of significant accounting policies are described in Note 2 to the Company's audited consolidated financial statements as of December 31, 2019 included in its annual report on Form 10-K filed with the Securities and Exchange Commission (or the “SEC”). Principles of consolidation —The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Aprea Therapeutics AB, Aprea Personal AB, which was incorporated in May 2009, and Aprea US, Inc., which was incorporated in June 2016. Management has concluded it has a single reporting segment for purposes of reporting financial condition and results of operations. All intercompany transactions and balances have been eliminated. Unaudited interim consolidated financial statements —The accompanying unaudited interim condensed consolidated financial statements have been prepared by the Company in accordance with U.S. GAAP for interim information and pursuant to the rules and regulations of the SEC for reporting on Form 10-Q. Accordingly, certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited condensed interim financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2019 filed with the SEC. The unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements, and in management’s opinion, include all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the financial information for the interim periods have been made. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the full fiscal year or any future period. Use of estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses as of and during the reporting period. The Company bases estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. The Company assesses estimates on an ongoing basis; however, actual results could materially differ from those estimates. Significant items subject to such estimates and assumptions include stock-based compensation expense. Foreign currency and currency translation —The functional currency for Aprea Therapeutics AB and Aprea Personal AB, is the Swedish Krona. Assets and liabilities of Aprea Therapeutics AB and Aprea Personal AB are translated into United States dollars at the exchange rate in effect on the balance sheet date. Revenues and expenses are translated at the average exchange rate in effect during the period. Unrealized translation gains and losses are recorded as a cumulative translation adjustment, which is included in the consolidated statements of convertible preferred stock and stockholders’ equity (deficit) as a component of accumulated other comprehensive loss. Adjustments that arise from exchange rate changes on transactions denominated in a currency other than the local currency are included in other income and expense in the condensed consolidated statements of operations and comprehensive loss as incurred. Cash and cash equivalents— The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Fair value of financial instruments —The accounting standard for fair value measurements provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability between market participants at measurement dates. ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a three‑level valuation hierarchy for instruments measured at fair value. The hierarchy is based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The hierarchy defines three levels of valuation inputs, of which the first two are considered observable and the last is considered unobservable: · Level 1 inputs: Quoted prices in active markets for identical assets or liabilities. · Level 2 inputs: Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. · Level 3 inputs: Unobservable inputs developed using estimates or assumptions developed by the Company, which reflect those that a market participant would use in pricing the asset or liability. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company’s financial instruments consist of accounts payable. The carrying amount of accounts payable is considered a reasonable estimate of fair value due to the short‑term maturity. Accounting for leases —In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016 02, “Leases” (“ASC 842”) to enhance the transparency and comparability of financial reporting related to leasing arrangements. Under this new lease standard, most leases are required to be recognized on the balance sheet as right‑of‑use assets and lease liabilities. Disclosure requirements have been enhanced with the objective of enabling financial statement users to assess the amount, timing, and uncertainty of cash flows arising from leases. Prior to January 1, 2019, GAAP did not require lessees to recognize assets and liabilities related to operating leases on the balance sheet. The new standard establishes a right‑of‑use (“ROU”) model that requires a lessee to recognize a ROU asset and corresponding lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement as well as the reduction of the right of use asset. The Company adopted the standard effective January 1, 2019, using the modified retrospective method. The new standard provides a number of optional practical expedients in transition. The Company has elected to apply the ‘package of practical expedients’ which allow us to not reassess (i) whether existing or expired arrangements contain a lease, (ii) the lease classification of existing or expired leases, or (iii) whether previous initial direct costs would qualify for capitalization under the new lease standard. The Company has also elected to apply (i) the practical expedient which allows us to not separate lease and non‑lease components, for new leases entered into after adoption and (ii) the short‑term lease exemption for all leases with an original term of less than 12 months, for purposes of applying the recognition and measurements requirements in the new standard. For the impact to the Company’s consolidated financial statement upon adoption of the new leasing standard, see Note 3 to our unaudited condensed consolidated financial statements. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable. Operating lease liabilities and their corresponding right‑of‑use assets are recorded based on the present value of future lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company will utilize the incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. As of the ASC 842 effective date, the Company’s incremental borrowing rate ranged from approximately 3.0% to 4.3% based on the remaining lease term of the applicable leases. The Company has elected not to separate lease and non‑lease components as a single component. Operating leases are recognized on the balance sheet as ROU lease assets, lease liabilities current and lease liabilities non‑current. Fixed rents are included in the calculation of the lease balances while variable costs paid for certain operating and pass‑through costs are excluded. Lease expense is recognized over the expected term on a straight‑line basis. Stock‑based compensation —The Company measures stock options and other stock-based awards granted to employees and directors based on their fair value on the date of the grant and recognize compensation expense of those awards, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award. The Company applies the straight‑line method of expense recognition to all awards with only service based vesting conditions. For stock-based awards granted to non‑employees, compensation expense is recognized over the period during which services are rendered by such non‑employees until completed in accordance with the FASB issued ASU No. 2018‑07, Compensation Stock Compensation (Topic 718): Improvements to Nonemployee Share Based Payment Accounting. The new standard largely aligns the accounting for share based payment awards issued to employees and nonemployees by expanding the scope of ASC 718 to apply to nonemployee share based transactions, as long as the transaction is not effectively a form of financing. The Company estimates the fair value of each stock option grant on the date of grant using the Black Scholes option pricing model, which uses as inputs the fair value of the Company’s common stock and assumptions the Company makes for the volatility of its common stock, the expected term of its stock options, the risk free interest rate for a period that approximates the expected term of its stock options and its expected dividend yield. Net loss per share —The Company has reported losses since inception and has computed basic net loss per share attributable to common stockholders by dividing net loss attributable to common stockholders by the weighted‑average number of common shares outstanding for the period, without consideration for potentially dilutive securities. The Company computes diluted net loss per common share after giving consideration to all potentially dilutive common shares, including options to purchase common stock, outstanding during the period determined using the treasury‑stock and if‑converted methods, except where the effect of including such securities would be antidilutive. Because the Company has reported net losses since inception, these potential common shares have been anti‑dilutive and basic and diluted loss per share have been the same. The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti‑dilutive (in common stock equivalent shares): Three months ended March 31, 2020 2019 Series A convertible preferred stock — 612,446 Series B convertible preferred stock — 7,235,969 Series C convertible preferred stock — 5,179,877 Options to purchase common stock 3,845,944 2,802,576 Total shares of common stock equivalents 3,845,944 15,830,868 Recently issued accounting pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards have or may have a material impact on our consolidated financial statements or disclosures. In June 2018, the FASB issued ASU No. 2018-07, “ Compensation—Stock Compensation”, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees, except for specific exceptions. This ASU is effective for annual or any interim periods beginning after December 15, 2019. ASU No. 2018-07 was adopted by the Company on January 1, 2020 and had no impact on the Company’s financial condition or results of operations. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. ASU 2016-13 was adopted by the Company on January 1, 2020 and has no current impact on the Company as the Company does not have any financial instruments covered by the topic. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying financial statements.

Leases

Leases	3 Months Ended
	Mar. 31, 2020
Leases
Leases	3. Leases On January 1, 2019, the Company adopted ASC 842 using the modified retrospective transition approach allowed under ASU 2018‑11 which releases companies from presenting comparative periods and related disclosures under ASC 842 and requires a cumulative‑effect adjustment to the opening balance of retained earnings in the period of adoption (see Note 2). The Company is party to two operating leases for office and laboratory space. The Company’s finance leases are immaterial both individually and in the aggregate. The Company has elected to apply the short‑term lease exception to all leases of one year or less. Rent expense for three months ended March 31, 2020 and 2019 was $62,909 and $69,905, respectively, which are included in operating expenses. The Company has an operating lease in Boston, Massachusetts for office space. The lease will expire in December 2021 and does not have any renewal options. The Company also has an operating lease for office and laboratory space in Solna, Sweden that expires in June 2022. Quantitative information regarding the Company’s leases for the three months ended March 31, 2020 and 2019 is as follows: Three months ended March 31, Lease Cost 2020 2019 Operating lease cost $ 55,768 $ 25,782 Other Information Operating cash flows paid for amounts included in the measurement of lease liabilities $ 62,909 $ 30,409 Operating lease liabilities arising from obtaining right‑of‑use assets $ — $ — Weighted average remaining lease term (years) 1.75 - 2.25 2.75 Weighted average discount rate 3.0% - 4.3% 3.0% - 4.3% Future lease payments under noncancelable leases are as follows at March 31, 2020: Operating Future Lease Payments Leases 2020 $ 181,068 2021 243,719 2022 58,747 Total Lease Payments $ 483,534 Less: Imputed Interest (17,475) Total Lease Liabilities $ 466,059 As most of the Company’s leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the incremental borrowing rate on January 1, 2019 for operating leases that commenced prior to that date.

Accrued expenses

Accrued expenses	3 Months Ended
	Mar. 31, 2020
Accrued expenses
Accrued expenses	4. Accrued expenses Accrued expenses consist of the following: March 31, December 31, 2020 2019 Professional fees $ 103,067 $ 207,917 Compensation and benefits 1,109,672 961,790 Research and development 6,637,811 4,992,311 Other 448,219 480,535 Total accrued expenses $ 8,298,769 $ 6,642,553

Stockholders' equity (deficit)

Stockholders' equity (deficit)	3 Months Ended
	Mar. 31, 2020
Stockholders’ equity (deficit)
Stockholders’ equity (deficit)	5. Stockholders’ equity (deficit) The total number of shares of all classes of capital stock that the Company is authorized to issue is 440,000,000 shares, consisting of 400,000,000 shares of common stock, par value $0.001 per share and 40,000,000 shares of preferred stock, par value $0.001 per share. Common Stock The holders of common stock are entitled to one vote for each share of common stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, after the payment or provision for payment of all debts and liabilities of the Company with respect to the distribution of assets in liquidation, the holders of common stock shall be entitled to share ratably in the remaining assets of the Company available for distribution. Stock-Based Compensation Expense The Company recorded stock-based compensation expense of $905,471 and $97,946 for the three months ended March 31, 2020 and 2019, respectively.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2020
Income Taxes
Income Taxes	6. Income Taxes The Company has no income tax expense due to operating losses incurred for the three months ended March 31, 2020 and 2019. The Company has provided a valuation allowance for the full amount of the net deferred tax assets as, based on all available evidence, it is considered more likely than not that all the recorded deferred tax assets will not be realized in a future period. Realization of the future tax benefits is dependent on may factors, including the Company’s ability to generate taxable income within the net operating loss carryforward period. Under the provisions of the U.S. Internal Revenue Code and Sweden tax law, certain substantial changes in the Company’s ownership, including a sale of the Company or significant changes in ownership due to sales of equity, may have limited, or may limit in the future, the amount of net operating loss carryforwards that could be used annually to offset future taxable income. For U.S. and Swedish income tax purposes, the Company has not completed a study to assess whether a change of control has occurred or whether there have been changes of control since the Company’s formation due to the complexity and cost associated with such study and because there could be additional changes of control in the future. As a result, the Company is not able to estimate the effect of the change in control, if any, on the Company’s ability to utilize U.S. or Swedish net operating losses or other tax attribute carryforwards in the future. For Swedish income tax purposes, the Company’s net operating losses may be subject to limitations in accordance with the country’s group contribution restriction laws. The Company files tax returns in Sweden, the United States and Massachusetts, and all tax years since inception remain open to examination by the major taxing jurisdictions to which the Company is subject, as carryforward attributes generated in years past may still be adjusted upon examination by the Internal Revenue Service (IRS) or other authorities if they have or will be used in a future period. The Company is not currently under examination by the IRS or any other jurisdictions for any tax years. As of March 31, 2020 and December 31, 2019, the Company had no uncertain tax positions or related interest and penalties accrued. On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) under which several restrictions for income tax purposes were relaxed, including with respect to, the limitation on business interest expense deductions, the ability to use net operating losses, and the acceleration of alternative minimum tax credits. Given the Company’s history of losses, the CARES Act is not expected to have a material impact on income taxes.

Commitments and contingencies

Commitments and contingencies	3 Months Ended
	Mar. 31, 2020
Commitments and contingencies
Commitments and contingencies	7. Commitments and contingencies The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. As of March 31, 2020, the Company has not recorded a provision for any contingent losses.

Summary of significant accoun_2

Summary of significant accounting policies (Policies)	3 Months Ended
	Mar. 31, 2020
Summary of significant accounting policies
Principles of consolidation	Principles of consolidation —The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Aprea Therapeutics AB, Aprea Personal AB, which was incorporated in May 2009, and Aprea US, Inc., which was incorporated in June 2016. Management has concluded it has a single reporting segment for purposes of reporting financial condition and results of operations. All intercompany transactions and balances have been eliminated.
Unaudited interim condensed consolidated financial statements	Unaudited interim consolidated financial statements —The accompanying unaudited interim condensed consolidated financial statements have been prepared by the Company in accordance with U.S. GAAP for interim information and pursuant to the rules and regulations of the SEC for reporting on Form 10-Q. Accordingly, certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited condensed interim financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2019 filed with the SEC. The unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements, and in management’s opinion, include all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the financial information for the interim periods have been made. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the full fiscal year or any future period.
Use of estimates	Use of estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses as of and during the reporting period. The Company bases estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. The Company assesses estimates on an ongoing basis; however, actual results could materially differ from those estimates. Significant items subject to such estimates and assumptions include stock-based compensation expense.
Foreign currency and currency translation	Foreign currency and currency translation —The functional currency for Aprea Therapeutics AB and Aprea Personal AB, is the Swedish Krona. Assets and liabilities of Aprea Therapeutics AB and Aprea Personal AB are translated into United States dollars at the exchange rate in effect on the balance sheet date. Revenues and expenses are translated at the average exchange rate in effect during the period. Unrealized translation gains and losses are recorded as a cumulative translation adjustment, which is included in the consolidated statements of convertible preferred stock and stockholders’ equity (deficit) as a component of accumulated other comprehensive loss. Adjustments that arise from exchange rate changes on transactions denominated in a currency other than the local currency are included in other income and expense in the condensed consolidated statements of operations and comprehensive loss as incurred.
Cash and cash equivalents	Cash and cash equivalents— The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.
Fair value of financial instruments	Fair value of financial instruments —The accounting standard for fair value measurements provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability between market participants at measurement dates. ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a three‑level valuation hierarchy for instruments measured at fair value. The hierarchy is based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The hierarchy defines three levels of valuation inputs, of which the first two are considered observable and the last is considered unobservable: · Level 1 inputs: Quoted prices in active markets for identical assets or liabilities. · Level 2 inputs: Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. · Level 3 inputs: Unobservable inputs developed using estimates or assumptions developed by the Company, which reflect those that a market participant would use in pricing the asset or liability. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company’s financial instruments consist of accounts payable. The carrying amount of accounts payable is considered a reasonable estimate of fair value due to the short‑term maturity.
Accounting for leases	Accounting for leases —In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016 02, “Leases” (“ASC 842”) to enhance the transparency and comparability of financial reporting related to leasing arrangements. Under this new lease standard, most leases are required to be recognized on the balance sheet as right‑of‑use assets and lease liabilities. Disclosure requirements have been enhanced with the objective of enabling financial statement users to assess the amount, timing, and uncertainty of cash flows arising from leases. Prior to January 1, 2019, GAAP did not require lessees to recognize assets and liabilities related to operating leases on the balance sheet. The new standard establishes a right‑of‑use (“ROU”) model that requires a lessee to recognize a ROU asset and corresponding lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement as well as the reduction of the right of use asset. The Company adopted the standard effective January 1, 2019, using the modified retrospective method. The new standard provides a number of optional practical expedients in transition. The Company has elected to apply the ‘package of practical expedients’ which allow us to not reassess (i) whether existing or expired arrangements contain a lease, (ii) the lease classification of existing or expired leases, or (iii) whether previous initial direct costs would qualify for capitalization under the new lease standard. The Company has also elected to apply (i) the practical expedient which allows us to not separate lease and non‑lease components, for new leases entered into after adoption and (ii) the short‑term lease exemption for all leases with an original term of less than 12 months, for purposes of applying the recognition and measurements requirements in the new standard. For the impact to the Company’s consolidated financial statement upon adoption of the new leasing standard, see Note 3 to our unaudited condensed consolidated financial statements. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable. Operating lease liabilities and their corresponding right‑of‑use assets are recorded based on the present value of future lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company will utilize the incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. As of the ASC 842 effective date, the Company’s incremental borrowing rate ranged from approximately 3.0% to 4.3% based on the remaining lease term of the applicable leases. The Company has elected not to separate lease and non‑lease components as a single component. Operating leases are recognized on the balance sheet as ROU lease assets, lease liabilities current and lease liabilities non‑current. Fixed rents are included in the calculation of the lease balances while variable costs paid for certain operating and pass‑through costs are excluded. Lease expense is recognized over the expected term on a straight‑line basis.
Stock based compensation	Stock‑based compensation —The Company measures stock options and other stock-based awards granted to employees and directors based on their fair value on the date of the grant and recognize compensation expense of those awards, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award. The Company applies the straight‑line method of expense recognition to all awards with only service based vesting conditions. For stock-based awards granted to non‑employees, compensation expense is recognized over the period during which services are rendered by such non‑employees until completed in accordance with the FASB issued ASU No. 2018‑07, Compensation Stock Compensation (Topic 718): Improvements to Nonemployee Share Based Payment Accounting. The new standard largely aligns the accounting for share based payment awards issued to employees and nonemployees by expanding the scope of ASC 718 to apply to nonemployee share based transactions, as long as the transaction is not effectively a form of financing. The Company estimates the fair value of each stock option grant on the date of grant using the Black Scholes option pricing model, which uses as inputs the fair value of the Company’s common stock and assumptions the Company makes for the volatility of its common stock, the expected term of its stock options, the risk free interest rate for a period that approximates the expected term of its stock options and its expected dividend yield.
Net loss per share	Net loss per share —The Company has reported losses since inception and has computed basic net loss per share attributable to common stockholders by dividing net loss attributable to common stockholders by the weighted‑average number of common shares outstanding for the period, without consideration for potentially dilutive securities. The Company computes diluted net loss per common share after giving consideration to all potentially dilutive common shares, including options to purchase common stock, outstanding during the period determined using the treasury‑stock and if‑converted methods, except where the effect of including such securities would be antidilutive. Because the Company has reported net losses since inception, these potential common shares have been anti‑dilutive and basic and diluted loss per share have been the same. The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti‑dilutive (in common stock equivalent shares): Three months ended March 31, 2020 2019 Series A convertible preferred stock — 612,446 Series B convertible preferred stock — 7,235,969 Series C convertible preferred stock — 5,179,877 Options to purchase common stock 3,845,944 2,802,576 Total shares of common stock equivalents 3,845,944 15,830,868
Recently issued accounting pronouncements	Recently issued accounting pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards have or may have a material impact on our consolidated financial statements or disclosures. In June 2018, the FASB issued ASU No. 2018-07, “ Compensation—Stock Compensation”, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees, except for specific exceptions. This ASU is effective for annual or any interim periods beginning after December 15, 2019. ASU No. 2018-07 was adopted by the Company on January 1, 2020 and had no impact on the Company’s financial condition or results of operations. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. ASU 2016-13 was adopted by the Company on January 1, 2020 and has no current impact on the Company as the Company does not have any financial instruments covered by the topic. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying financial statements

Summary of significant accoun_3

Summary of significant accounting policies (Tables)	3 Months Ended
	Mar. 31, 2020
Summary of significant accounting policies
Schedule of potentially dilutive securities excluded from calculation of diluted net loss per share	The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti‑dilutive (in common stock equivalent shares): Three months ended March 31, 2020 2019 Series A convertible preferred stock — 612,446 Series B convertible preferred stock — 7,235,969 Series C convertible preferred stock — 5,179,877 Options to purchase common stock 3,845,944 2,802,576 Total shares of common stock equivalents 3,845,944 15,830,868

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2020
Leases
Summary of quantitative information regarding the Company’s leases	Three months ended March 31, Lease Cost 2020 2019 Operating lease cost $ 55,768 $ 25,782 Other Information Operating cash flows paid for amounts included in the measurement of lease liabilities $ 62,909 $ 30,409 Operating lease liabilities arising from obtaining right‑of‑use assets $ — $ — Weighted average remaining lease term (years) 1.75 - 2.25 2.75 Weighted average discount rate 3.0% - 4.3% 3.0% - 4.3%
Schedule of future lease payments under noncancellable leases	Future lease payments under noncancelable leases are as follows at March 31, 2020: Operating Future Lease Payments Leases 2020 $ 181,068 2021 243,719 2022 58,747 Total Lease Payments $ 483,534 Less: Imputed Interest (17,475) Total Lease Liabilities $ 466,059

Accrued expenses (Tables)

Accrued expenses (Tables)	3 Months Ended
	Mar. 31, 2020
Accrued expenses
Schedule of accrued expenses	March 31, December 31, 2020 2019 Professional fees $ 103,067 $ 207,917 Compensation and benefits 1,109,672 961,790 Research and development 6,637,811 4,992,311 Other 448,219 480,535 Total accrued expenses $ 8,298,769 $ 6,642,553

Nature of business and basis _2

Nature of business and basis of presentation (Details) $ / shares in Units, $ in Millions	1 Months Ended
	Sep. 30, 2019$ / shares	Mar. 31, 2020USD ($)$ / shares	Dec. 31, 2019$ / shares
Cash balance | $		$ 122.5
Common stock, par value	$ 0.001	$ 0.001	$ 0.001
Aprea Therapeutics AB
Common stock, par value	$ 0.11
Convertible preferred stock | Aprea Therapeutics AB
Conversion ratio	1
Common Stock | Aprea Therapeutics AB
Conversion ratio	1

Summary of significant accoun_4

Summary of significant accounting policies - Accounting for leases (Details)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Property and equipment
Leases, election of practical expedients package	true
Minimum
Property and equipment
Incremental borrowing rate	3.00%	3.00%
Maximum
Property and equipment
Incremental borrowing rate	4.30%	4.30%

Summary of significant accoun_5

Summary of significant accounting policies - Net loss per share (Details) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Potentially dilutive securities that have been excluded from the calculation of diluted net loss per share
Total shares of common stock equivalents	3,845,944	15,830,868
Series A convertible preferred stock
Potentially dilutive securities that have been excluded from the calculation of diluted net loss per share
Total shares of common stock equivalents		612,446
Series B convertible preferred stock
Potentially dilutive securities that have been excluded from the calculation of diluted net loss per share
Total shares of common stock equivalents		7,235,969
Series C convertible preferred stock
Potentially dilutive securities that have been excluded from the calculation of diluted net loss per share
Total shares of common stock equivalents		5,179,877
Options to purchase common stock
Potentially dilutive securities that have been excluded from the calculation of diluted net loss per share
Total shares of common stock equivalents	3,845,944	2,802,576

Leases - Summary (Details)

Leases - Summary (Details)	3 Months Ended
	Mar. 31, 2020USD ($)lease	Mar. 31, 2019USD ($)
Leases
Number of operating leases | lease	2
Operating Expenses
Leases
Rent expense - ASC 842 | $	$ 62,909	$ 69,905

Leases - Quantitative Informati

Leases - Quantitative Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Quantitative information regarding the Company’s leases
Operating lease cost	$ 55,768	$ 25,782
Other Information
Operating cash flows paid for amounts included in the measurement of lease liabilities	$ 62,909	$ 30,409
Weighted average remaining lease term (years)		2 years 9 months
Minimum
Other Information
Weighted average remaining lease term (years)	1 year 9 months
Weighted average discount rate	3.00%	3.00%
Maximum
Other Information
Weighted average remaining lease term (years)	2 years 3 months
Weighted average discount rate	4.30%	4.30%

Leases - Future lease payments

Leases - Future lease payments (Details)	Mar. 31, 2020USD ($)
Future Lease Payments
Remainder of 2020	$ 181,068
2021	243,719
2022	58,747
Total Lease Payments	483,534
Less: Imputed Interest	(17,475)
Total Lease Liabilities	$ 466,059

Accrued expenses (Details)

Accrued expenses (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
Accrued expenses
Professional fees	$ 103,067	$ 207,917
Compensation and benefits	1,109,672	961,790
Research and development	6,637,811	4,992,311
Other	448,219	480,535
Total accrued expenses	$ 8,298,769	$ 6,642,553

Stockholders_ equity (deficit)

Stockholders’ equity (deficit) (Details)	3 Months Ended
	Mar. 31, 2020USD ($)Vote$ / sharesshares	Mar. 31, 2019USD ($)	Dec. 31, 2019$ / sharesshares	Sep. 30, 2019$ / shares
Stockholders’ equity (deficit)
Aggregate number of authorized shares for all classes of equity	440,000,000
Common stock, authorized	400,000,000		400,000,000
Common stock, par value | $ / shares	$ 0.001		$ 0.001	$ 0.001
Preferred stock, authorized	40,000,000
Preferred stock, par value | $ / shares	$ 0.001
Number of voting rights per common share | Vote	1
Stock based compensation expense | $	$ 905,471	$ 97,946

Income taxes (Details)

Income taxes (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Income Taxes
Income tax expense	$ 0	$ 0
Unrecognized tax benefits	$ 0		$ 0

Commitments and contingencies (

Commitments and contingencies (Details)	3 Months Ended
	Mar. 31, 2020USD ($)
Commitments and contingencies
Provision for contingent losses	$ 0