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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2019	Mar. 27, 2020	Jun. 28, 2019
Document and Entity Information
Document Type	10-K
Document Period End Date	Dec. 31, 2019
Entity Registrant Name	Aprea Therapeutics, Inc.
Entity Well Known Seasoned Issuer	No
Entity Voluntary Filers	No
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 Public Float			$ 0
Entity Common Stock, Shares Outstanding		21,054,842
Entity Central Index Key	0001781983
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Amendment Flag	false

Consolidated Balance Sheets - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 130,088,869	$ 65,675,931
Prepaid expenses and other current assets	2,955,878	322,146
Total current assets	133,044,747	65,998,077
Property and equipment, net	41,639	24,450
Right of use lease asset	521,392
Other noncurrent assets	107	111
Total assets	133,607,885	66,022,638
Current liabilities:
Accounts payable	2,176,852	1,739,337
Accrued expenses	6,642,553	3,128,772
Lease liability—current	242,329
Total current liabilities	9,061,734	4,868,109
Lease liability—noncurrent	302,621
Total liabilities	9,364,355	4,868,109
Commitments and contingencies (Note _)
Convertible preferred stock:
Total convertible preferred stock		112,590,631
Stockholders’ deficit:
Common stock, $0.001 par value at December 31, 2019 and $0.11 par value at December 31, 2018; 000 and 1,155,366 shares issued and outstanding at December 31, 2019 and 2018, respectively.	21,023	127,091
Additional paid-in capital	226,284,548	19,666,588
Accumulated other comprehensive loss	(11,533,778)	(8,761,325)
Accumulated deficit	(90,528,263)	(62,468,456)
Total stockholders’ equity (deficit)	124,243,530	(51,436,102)
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$ 133,607,885	66,022,638
Series A convertible preferred stock
Convertible preferred stock:
Total convertible preferred stock		6,483,044
Series B convertible preferred stock
Convertible preferred stock:
Total convertible preferred stock		49,742,942
Series C convertible preferred stock
Convertible preferred stock:
Total convertible preferred stock		$ 56,364,645

Consolidated Balance Sheets (Parenthetical) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Common stock, par value	$ 0.001	$ 0.11
Common stock, shares issued	21,022,752	1,155,366
Common stock, outstanding	21,022,752	1,155,366
Series A convertible preferred stock
Convertible preferred stock, par value	$ 0.001	$ 0.001
Convertible preferred stock, issued	0	612,446
Convertible preferred stock, outstanding	0	612,446
Series B convertible preferred stock
Convertible preferred stock, par value	$ 0.001	$ 0.001
Convertible preferred stock, issued	0	7,235,969
Convertible preferred stock, outstanding	0	7,235,969
Convertible preferred stock, liquidation preference		$ 58,874,347
Series C convertible preferred stock
Convertible preferred stock, par value	$ 0.001	$ 0.001
Convertible preferred stock, issued	0	4,712,698
Convertible preferred stock, outstanding	0	4,712,698
Convertible preferred stock, liquidation preference		$ 57,115,312

Consolidated Statements of Operations and Comprehensive Loss - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Operating expenses:
Research and development	$ 20,950,672	$ 14,194,732	$ 13,392,631
General and administrative	8,593,626	2,294,671	2,459,744
Total operating expenses	29,544,298	16,489,403	15,852,375
Other income (expense):
Interest expense	156,351	(182)	(15)
Foreign currency gain	1,328,140	961,316	662,140
Total other income (expense)	1,484,491	961,134	662,125
Net loss	(28,059,807)	(15,528,269)	(15,190,250)
Other comprehensive income (loss):
Foreign currency translation	(2,772,453)	(473,919)	495,160
Total comprehensive loss	$ (30,832,260)	$ (16,002,188)	$ (14,695,090)
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share)	$ (4.67)	$ (13.45)	$ (13.17)
Weighted-average common shares outstanding, basic and diluted (in shares)	6,002,486	1,154,368	1,153,069

Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) - USD ($)	Common Stock IPO	Common Stock	Additional Paid-in capital IPO	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	IPO	Total
Temporary equity, beginning balance at Dec. 31, 2016							$ 6,483,044	$ 26,399,079
Temporary Equity, Beginning Balance (in shares) at Dec. 31, 2016							612,446	3,913,207
Increase (Decrease) in Temporary Equity
Issuance of convertible preferred stock, net of issuance costs								$ 23,343,863
Issuance of convertible preferred stock (in shares)								3,322,762
Temporary equity, ending balance at Dec. 31, 2017							$ 6,483,044	$ 49,742,942
Temporary Equity, Ending Balance (in shares) at Dec. 31, 2017							612,446	7,235,969
Equity, beginning balance at Dec. 31, 2016		$ 126,838		$ 18,940,120	$ (8,782,566)	$ (31,749,937)					$ (21,465,545)
Equity, Beginning Balance (in shares) at Dec. 31, 2016		1,153,061
Increase (Decrease) in Stockholders' Equity
Stock based compensation				395,440							395,440
Foreign currency translation					495,160						495,160
Net loss						(15,190,250)					(15,190,250)
Equity, ending balance at Dec. 31, 2017		$ 126,838		19,335,560	(8,287,406)	(46,940,187)					(35,765,195)
Equity, Ending Balance (in shares) at Dec. 31, 2017		1,153,061
Increase (Decrease) in Temporary Equity
Issuance of convertible preferred stock, net of issuance costs									$ 56,364,645
Issuance of convertible preferred stock (in shares)									4,712,698
Temporary equity, ending balance at Dec. 31, 2018							$ 6,483,044	$ 49,742,942	$ 56,364,645
Temporary Equity, Ending Balance (in shares) at Dec. 31, 2018							612,446	7,235,969	4,712,698
Increase (Decrease) in Stockholders' Equity
Exercise of stock options		$ 253		1,844							$ 2,097
Exercise of stock options (in shares)		2,305									2,306
Stock based compensation				329,184							$ 329,184
Foreign currency translation					(473,919)						(473,919)
Net loss						(15,528,269)					(15,528,269)
Equity, ending balance at Dec. 31, 2018		$ 127,091		19,666,588	(8,761,325)	(62,468,456)					(51,436,102)
Equity, Ending Balance (in shares) at Dec. 31, 2018		1,155,366
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
Exchange and conversion of preferred stock and common stock of Aprea Therapeutics AB into common stock of Aprea Therapeutics Inc		$ (128,792)		128,792
Temporary Equity, Ending Balance (in shares) at Dec. 31, 2019							0	0	0
Increase (Decrease) in Stockholders' Equity
Exercise of stock options		$ 3,179		67,818							$ 70,997
Exercise of stock options (in shares)		322,267									322,267
Issuance of common stock	$ 6,517		$ 86,899,563	100						$ 86,906,080	$ 100
Issuance of common stock (in shares)	6,516,667	160
Stock based compensation				1,345,722							1,345,722
Foreign currency translation					(2,772,453)						(2,772,453)
Conversion of preferred stock into common stock		$ 13,028		118,175,965			$ (6,483,044)	$ (49,742,942)	$ (61,963,007)		118,188,993
Conversion of preferred stock into common stock (in shares)		13,028,292					(612,446)	(7,235,969)	(5,179,877)
Net loss						(28,059,807)					(28,059,807)
Equity, ending balance at Dec. 31, 2019		$ 21,023		$ 226,284,548	$ (11,533,778)	$ (90,528,263)					$ 124,243,530
Equity, Ending Balance (in shares) at Dec. 31, 2019		21,022,752

Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit (Parenthetical) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Series B convertible preferred stock
Convertible preferred stock issuance costs			$ 47,047
Series C convertible preferred stock
Convertible preferred stock issuance costs	$ 53,509	$ 3,278,302

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Net loss	$ (28,059,807)	$ (15,528,269)	$ (15,190,250)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	11,126	8,316	7,932
Stock‑based compensation	1,345,722	329,184	395,440
Amortization of right of use lease asset	159,128
Foreign currency gain	(1,328,140)	(961,316)	(662,140)
Changes in operating assets and liabilities:
Prepaid expense and other current assets	(2,633,732)	(19,452)	4,041
Accounts payable	437,515	214,380	327,054
Accrued expenses and other liabilities	3,513,782	706,923	1,115,805
Lease liability	(154,301)
Net cash used in operating activities	(26,708,707)	(15,250,234)	(14,002,118)
Cash flows from investing activities:
Purchases of property and equipment	(30,901)	(3,702)
Net cash used in investing activities	(30,901)	(3,702)
Cash flows from financing activities:
Proceeds from the exercise of stock options	70,997	2,097
Proceeds from issuance of common stock in initial public offering, net	86,906,179
Net cash provided by financing activities	92,575,538	56,366,742	23,343,863
Increase in cash	65,835,930	41,112,806	9,341,745
Effect of exchange rate changes on cash	(1,422,992)	161,637	1,394,568
Cash and cash equivalents—beginning of year	65,675,931	24,401,488	13,665,175
Cash and cash equivalents—end of year	130,088,869	65,675,931	24,401,488
Series B convertible preferred stock
Cash flows from financing activities:
Proceeds from Issuance of Convertible Preferred Stock			$ 23,343,863
Series C convertible preferred stock
Cash flows from financing activities:
Proceeds from Issuance of Convertible Preferred Stock	$ 5,598,362	$ 56,364,645

Nature of business and basis of presentation	12 Months Ended
Nature of business and basis of presentation	Dec. 31, 2019
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 December 31, 2019 cash balance of $130,088,869 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 accounting policies

12 Months Ended

Dec. 31, 2019

Summary of significant accounting policies

Summary of significant accounting policies

2. Summary of significant accounting policies

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.

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 fair value of stock-based compensation expense.

Stock split—In September 2019, the Company effected a 1-for-1.6045 stock split of the Company’s preferred and common stock. All share and per share amounts of preferred and common stock contained in the Company’s consolidated financial statements have been retroactively adjusted for all periods presented to give effect to the stock split.

Foreign currency and currency translation— The functional currency for Aprea Therapeutics AB and its wholly owned foreign subsidiary, 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 (expense), net in the consolidated statements of operations as incurred.

Concentrations of credit risk—Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash. Periodically, the Company may maintain deposits in financial institutions in excess of government insured limits. Management believes that the Company is not exposed to significant credit risk as the Company’s deposits are held at financial institutions that management believes to be of high credit quality, and the Company has not experienced any losses on these deposits.

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.

Property and equipment—Property and equipment are recorded at cost. Expenditures for repairs and maintenance are expensed as incurred. When assets are retired or disposed of, the assets and related accumulated depreciation are eliminated from the accounts, and any resulting gain or loss is included in the determination of net income or loss. Fixed assets acquired for research and development purposes are assessed for alternative future use. Depreciation is provided using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the asset.


Asset category		Estimated useful life
Computer equipment and software		5 years
Furniture and fixtures		5 years
Laboratory equipment and office furniture		5 years
Leasehold improvements		Remainder of lease term

Impairment of long-lived assets—Periodically, the Company evaluates its long-lived assets, which consist primarily of property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. To date, no impairments have occurred.

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.

Convertible preferred stock— The Company has classified convertible preferred stock as temporary equity in the accompanying December 31, 2018 balance sheet due to certain change in control events that are outside of the Company’s control, including sale or transfer of control of the Company, as holders of the Preferred Stock could cause redemption of the shares in these situations. The Company does not accrete the carrying values of the Preferred Stock to the redemption values since a liquidation event was not considered probable as of December 31, 2018. Subsequent adjustments of the carrying values to the ultimate redemption values will be made only if it becomes probable that such a liquidation event will occur.

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 will be 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 has 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.

Research and development costs—Research and development costs are charged to expense as incurred. Research and development expenses incurred in performing research and development activities, include salaries and benefits, materials and supplies, preclinical expenses, stock-based compensation expense, depreciation of equipment, contract services, and other outside expenses. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using or information provided to the Company by its vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development.

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.

Determination of Fair Value of Common Stock

Prior to the completion of the Company’s IPO, there had been no public market for the Company’s common stock, the estimated fair value of its common stock had been determined by its board of directors as of the date of each option grant, with input from management, considering the Company’s most recently available third party valuations of common stock and its board of directors’ assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent valuation through the date of the grant. These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately Held Company Equity Securities Issued as Compensation.

The Company’s common stock valuations were prepared using a hybrid method, which used market approaches to estimate its enterprise value. The hybrid method is a probability weighed expected return method, or PWERM, where the equity value in one or more scenarios is calculated using an option pricing method, or OPM. The OPM treats common stock and preferred stock as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes. Under this method, the common stock has value only if the funds available for distribution to stockholders exceeded the value of the preferred stock liquidation preference at the time of the liquidity event, such as a strategic sale or a merger. The PWERM is a scenario-based methodology that estimates the fair value of common stock based upon an analysis of future values for the company, assuming various outcomes. The common stock value is based on the probability weighted present value of expected future investment returns considering each of the possible outcomes available as well as the rights of each class of stock. The future value of the common stock under each outcome is discounted back to the valuation date at an appropriate risk adjusted discount rate and probability weighted to arrive at an indication of value for the common stock. These third party valuations were performed at various dates, which resulted in valuations of the Company’s common stock of $0.92 per share as of May 31, 2016, $1.01 per share as of October 2, 2017, $3.18 per share as of December 31, 2018 and $10.95 per share as of July 15, 2019.

In addition to considering the results of these third‑party valuations, the Company’s board of directors considered various objective and subjective factors to determine the fair value of its common stock as of each grant date, including:

the prices at which the Company sold shares of preferred stock and the superior rights and preferences of the preferred stock relative to its common stock at the time of each grant;

the progress of the Company’s research and development programs, including the status and results of preclinical studies and clinical trials for its product candidates;

the Company’s stage of development and commercialization and its business strategy;

external market conditions affecting the biopharmaceutical industry and trends within the biopharmaceutical industry;

the Company’s financial position, including cash on hand, and its historical and forecasted performance and operating results;

the lack of an active public market for the Company’s common stock and its preferred stock;

the likelihood of achieving a liquidity event, such as an IPO, or sale of the Company in light of prevailing market conditions; and

the analysis of IPOs and the market performance of similar companies in the biopharmaceutical industry.

The assumptions underlying these valuations represented management’s best estimate, which involved inherent uncertainties and the application of management’s judgment. As a result, if the Company had used significantly different assumptions or estimates, the fair value of its common stock and its stock‑based compensation expense could have been materially different.

Income taxes—The Company accounts for income tax in accordance with ASC 740-10, Income Taxes (“ASC 740-10”), which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company’s financial statements and tax returns. Deferred tax assets and liabilities are determined based upon the differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and for loss and credit carryforwards, using enacted tax rates expected to be in effect in the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that these assets may not be realized. The Company determines whether it is more likely than not that a tax position will be sustained upon examination. If it is not more likely than not that a position will be sustained, none of the benefit attributable to the position is recognized. The tax benefit to be recognized for any tax position that meets the more-likely-than-not recognition threshold is calculated as the largest amount that is more than 50% likely of being realized upon resolution of the contingency. The Company accounts for interest and penalties related to uncertain tax positions as part of its provision for income taxes.

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 and convertible preferred 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):


	Year ended December 31,
	2019	2018	2017
Series A convertible preferred stock	—	612,446	612,446
Series B convertible preferred stock	—	7,235,969	7,235,969
Series C convertible preferred stock	—	4,712,698	—
Options to purchase common stock	3,499,934	1,844,188	1,897,206
Total shares of common stock equivalents	3,499,934	14,405,301	9,745,621

Recently issued accounting pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“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. The Company is currently assessing the impact of adopting this authoritative guidance on its financial statements.

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 we do 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.

Property and equipment

12 Months Ended

Dec. 31, 2019

Property and equipment

Property and equipment

3. Property and equipment

Property and equipment consist of the following:


	December 31,
	2019		2018
Lab equipment	$	88,107	$	69,770
Furniture & Fixtures		20,580		16,313
Computer equipment		18,399		12,689
Property and equipment, at cost		127,086		98,772
Less accumulated depreciation and amortization		(85,447)		(74,322)
Property and equipment—net	$	41,639	$	24,450

Depreciation expense for years ended December 31, 2019, 2018 and 2017 was $11,126, $8,316 and $7,932, respectively.

Fair value measurements	12 Months Ended
Fair value measurements	Dec. 31, 2019
Fair value measurements
Fair value measurements	4. Fair value measurements 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. 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 proceeds that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. All fair value measurements are classified in the three-tier fair value hierarchy, which categorizes the inputs used in measuring fair value. These categories include (in descending order of priority) Level 1, defined as observable inputs, such as quoted prices in active markets for identical securities; Level 2, defined as inputs other than quoted prices included in Level 1 that are either directly or indirectly observable; and Level 3, defined as significant unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Leases

12 Months Ended

Dec. 31, 2019

Leases

Leases

5. 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 (Note 2). The Company is party to two operating leases for office or 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 years ended December 31, 2019, 2018 and 2017 was $278,603, $263,518 and $242,263, respectively, which are included in operating expenses.

Further, the Company has applied the guidance in ASC 842 to its corporate office and laboratory leases and has determined that these should be classified as operating leases. Consequently, as a result of the adoption of ASC 842, the Company recognized a ROU lease asset of approximately $329,384 with a corresponding lease liability of approximately $348,040 based on the present value of the minimum rental payments of such leases. In accordance with ASC 842, the beginning balance of the ROU lease asset was reduced by the existing deferred rent liability at inception of approximately $18,656. In the consolidated balance sheets at December 31, 2019, the Company has a ROU asset balance of $521,392 and a current and non-current lease liability of $242,329 and $302,621, respectively, relating to the ROU lease asset. The balance of both the ROU lease asset and the lease liabilities primarily consists of future payments under the Company’s office lease in Boston, Massachusetts.

The Company is party to an operating lease in Boston, Massachusetts for office and laboratory space. The lease commenced in November 2016 with the initial term set to expire in December 2021. This office lease does not have any renewal options.

The Company was party to an operating lease in Solna, Sweden that had month-to-month payments and expired on June 30, 2019. Additionally, the Company entered into a new operating lease for office and laboratory space in Solna, Sweden that is effective July 1, 2019 and expires in June 2022. Base rent for this lease is approximately $128,000 annually. The Company recognized a ROU lease asset of approximately $355,330 with a corresponding lease liability of the same amount based on the present value of the minimum rental payments of such leases.

Quantitative information regarding the Company’s leases for the year ended December 31, 2019 is as follows:


	Year Ended
	December 31,
Lease Cost	2019
Operating lease cost	$	161,856
Other Information
Operating cash flows paid for amounts included in the measurement of lease liabilities	$	174,846
Operating lease liabilities arising from obtaining right‑of‑use assets	$	355,330
Weighted average remaining lease term (years)		2.0 -2.5
Weighted average discount rate		3.0% - 4.3%

Future lease payments under noncancelable leases are as follows at December 31, 2019:


	Operating
Future Lease Payments	Leases
2020	$	251,008
2021		253,303
2022		63,539
Total Lease Payments	$	567,850
Less: Imputed Interest		(22,900)
Total Lease Liabilities	$	544,950

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

12 Months Ended

Dec. 31, 2019

Accrued expenses

Accrued expenses

6. Accrued expenses

Accrued expenses at consist of the following:


	December 31,
	2019		2018
Professional fees	$	207,917	$	80,771
Compensation and benefits		961,790		624,298
Research and development		4,992,311		2,178,086
Other		480,535		245,617
Total accrued expenses	$	6,642,553	$	3,128,772

Income Taxes

12 Months Ended

Dec. 31, 2019

Income Taxes

Income Taxes

7. Income taxes

Components of the net loss consist of the following:


	Year ended December 31,
	2019		2018		2017
Foreign	$	(25,268,373)	$	(15,713,032)	$	(15,185,931)
Domestic		(2,791,434)		184,763		(4,319)
Net loss	$	(28,059,807)	$	(15,528,269)	$	(15,190,250)

A reconciliation of the effect of applying the federal statutory rate to the net loss and the effective income tax rate:


	Year ended December 31,
	2019		2018		2017
Statutory federal income tax rate	21.0	%	21.0	%	34.0	%
Earnings in jurisdictions taxed at rates different from the statutory U.S. federal tax rate	0.4	%	1.0	%	(12.0)	%
Permanent differences	3.7	%	0.4	%	(0.1)	%
Changes in valuation allowance	(25.1)	%	(16.7)	%	(21.5)	%
Rate change due to TCJA	—	%	—	%	(0.4)	%
Rate change due to Swedish tax reform	—	%	(5.7)	%	—	%
Effective income tax rate	—	%	—	%	—	%

Significant components of the Company’s deferred taxes as of December 31, 2019 and 2018 are as follows:


	December 31,
	2019		2018
Deferred tax assets:
Net operating loss carryforward	$	20,536,344	$	12,816,395
Capitalized research and development		—		1,951
Intangible assets		26,842		—
Accrued expenses		17,779		—
Lease liability - ASC 842		128,337		—
Gross deferred tax assets		20,709,302		12,818,346
Valuation allowance		(19,676,794)		(12,661,874)
Total deferred tax assets		1,032,508		156,472
Deferred tax liabilities:
Fixed assets		(1,692)		(2,050)
Stock Compensation		(908,322)		(154,422)
Right of Use Asset - ASC 842		(122,494)		—
Total deferred tax liabilities		(1,032,508)		(156,472)
Net deferred tax assets (liabilities)	$	—	$	—

The Company has no income tax expense due to operating losses incurred for the years ended December 31, 2019, 2018 and 2017, respectively. 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. At December 31, 2019, the Company has $89.9 million, $7.3 million and $5.8 million of foreign, federal and state net operating loss carryforwards, respectively, that expire at various dates through 2037. Certain of these foreign, federal and state net operating loss carryforwards may be subject to Internal Revenue Code Section 382 or similar provisions, which impose limitations on their utilization.

The valuation allowance increased in 2019 and 2018 by $7.0 million and $2.5 million, respectively due to the increase in the deferred tax assets by the same amounts; primarily due to net operating loss carryforwards. Realization of the future tax benefits is dependent on many 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 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 in 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 December 31, 2019, the Company had no uncertain tax positions. The Company has elected to recognize interest and penalties related to income tax matters as a component of income tax expense, of which no interest or penalties were recorded for the years ended December 31, 2019, 2018 and 2017.

In June 2018, Sweden promulgated changes to the Swedish regulations on corporate income taxation. The law will apply from January 1, 2019. Among other things, the changes decrease the corporate income tax rate in two steps from 22% to 21.4% as of January 1, 2019 and 20.6% as of January 1, 2020. U.S. GAAP requires companies to revalue their deferred tax assets and deferred tax liabilities as of the date of enactment, with the resulting tax effects accounted for in the reporting period of enactment. This revaluation resulted in an overall reduction of deferred taxes of $0.7 million and a corresponding reduction in the valuation allowance. As such, there was no net impact to the Company’s statement of operations as a result of the reduction in tax rates.

In December 2017, what is commonly known as the Tax Cuts and Jobs Act (the Tax Act), was signed into law. Among other things, the Tax Act permanently lowers the corporate federal income tax rate to 21% from the statutory rate of 35%, effective for tax years including or commencing January 1, 2018. As a result of the reduction of the corporate federal income tax rate to 21%, U.S. GAAP requires companies to revalue their deferred tax assets and deferred tax liabilities as of the date of enactment, with the resulting tax effects accounted for in the reporting period of enactment. This revaluation resulted in an overall reduction of deferred taxes of $0.1 million and a corresponding reduction in the valuation allowance. As such, there was no net impact to the Company’s statement of operations as a result of the reduction in tax rates.

Convertible preferred stock

12 Months Ended

Dec. 31, 2019

Convertible preferred stock

Convertible preferred stock

8. Convertible preferred stock

The Company has 440,000,000 shares authorized for all classes of equity combined.

Series A Preferred

In June 2011, the Company issued 145,469 shares of Series A Preferred for gross proceeds of $3,233,417. In March 2016, the Company issued 466,977 shares of Series A Preferred as settlement of its outstanding bridge loans totaling $3,249,627. All 612,446 shares of Series A Preferred were issued to related parties.

In connection with the completion of the Company’s IPO in October 2019 (see Note 9), all outstanding shares of Series A Preferred stock were converted to common stock.

Prior to its conversion to common stock, the rights and preferences of the Series A Preferred were as follows:

Conversion—Each share of Series A Preferred may be converted at any time, at the option of the holder, into a share of common stock. The Series A Preferred automatically converts into shares of common stock when 1) shareholders representing a majority of the outstanding preferred shares calls for such conversion or 2) at the closing of an initial public offering of the Company’s common stock at a per share price of at least one and a half (1.5) times the average amount (EUR 16.05 based on all Series C preferred shares issued as of December 31, 2018) paid per Series C preferred share (as adjusted for share splits and similar) and aggregate proceeds in excess of EUR 50,000,000.

Dividends—Holders of Series A Preferred do not accrue dividends.

Voting rights—Preferred Stock and common stock vote together as one class on an as converted basis. Common stock voting rights on certain matters are subject to the powers, preferences, and rights of the Preferred Stock. Holders are entitled to vote on all matters and shall have the number of votes equal to the number of shares of common stock into which the shares of Preferred Stock held by such holder are then convertible.

Series B Preferred

In March 2016, the Company issued 3,322,762 shares of Series B Preferred for gross proceeds of $22,609,485. The Company also issued 590,445 shares of Series B Preferred in settlement of its outstanding bridge loans totaling $4,108,818. In October 2017, the Company issued 3,322,762 Series B preferred shares at a price per share of $7.02, for an aggregate purchase price of $23,349,617. All 7,235,969 shares of Series B Preferred were issued to related parties.

In connection with the completion of the Company’s IPO in October 2019 (see Note 9), all outstanding shares of Series B Preferred stock were converted to common stock.

Prior to its conversion to common stock, the rights and preferences of the Series B Preferred were as follows:

Conversion—Each share of Series B Preferred may be converted at any time, at the option of the holder, into a share of common stock. The Series B Preferred automatically converts into shares of common stock when 1) shareholders representing a majority of the outstanding preferred shares calls for such conversion or 2) at the closing of an initial public offering of the Company’s common stock at a per share price of at least one and a half (1.5) times the average amount (EUR 16.05 based on all Series C preferred shares issued as of December 31, 2018) paid per Series C preferred share (as adjusted for share splits and similar) and aggregate proceeds in excess of EUR 50,000,000.

Dividends—Holders are entitled to dividends of 8%, compounded annually if not paid. No dividends have been declared or paid . The Company has not accrued dividends on the Series B Preferred since dividends are only payable upon the occurrence of a liquidation event, including the transfer of more than fifty percent of the Company’s outstanding shares or the transfer of substantially all of the Company’s intellectual property. Approximately $8,806,426 of accrued dividends that were payable through December 31, 2018 was added to the stated liquidation preference amount of the Series B Preferred, which totaled $58,874,347 at December 31, 2018.

Series C Preferred

In November 2018, the Company issued 4,712,698 shares of Series C Preferred for gross proceeds of $56,725,342. In February 2019, the Company issued 467,173 shares of Series C Preferred for gross proceeds of $5,651,872. A total of 4,219,854 shares of Series C Preferred were issued to related parties.

In connection with the completion of the Company's IPO in October 2019 (see Note 9), all outstanding shares of Series C Preferred stock were converted to common stock.

Prior to its conversion to common stock, the rights and preferences of the Series C Preferred were as follows:

Conversion—Each share of Series C Preferred may be converted at any time, at the option of the holder, into a share of common stock. The Series C Preferred automatically converts into shares of common stock when 1) shareholders representing a majority of the outstanding preferred shares calls for such conversion or 2) at the closing of an initial public offering of the Company’s common stock at a per share price of at least one and a half (1.5) times the average amount (EUR 16.05 based on all Series C preferred shares issued as of December 31, 2018) paid per Series C preferred share (as adjusted for share splits and similar) and aggregate proceeds in excess of EUR 50,000,000.

Dividends—Holders are entitled to dividends of 8%, compounded annually if not paid. No dividends have been declared or paid as of December 31, 2018. The company has not accrued dividends on the Series C Preferred since dividends are only payable upon the occurrence of a liquidation event, including the transfer of more than fifty percent of the Company’s outstanding shares or the transfer of substantially all of the Company’s intellectual property. Approximately $389,970 of accrued dividends that were payable through December 31, 2018 was added to the stated liquidation preference amount of the Series C Preferred, which totaled $57,115,312 at December 31, 2018.

Liquidation preference

Upon liquidation, dissolution, or winding up of business, the Preferred Stock holders are entitled to receive a liquidation preference in priority to holders of common stock at the original issue price plus, in the case of Series B and Series C Preferred, any unpaid accumulated dividends as follows:

If a liquidation event occurs prior to the Company achieving a certain clinical milestone, Series C Preferred shareholders shall receive an amount per Series C Preferred share equal to the original subscription price per Series C Preferred share (as adjusted for share splits and similar) plus unpaid accumulated dividends. Secondly, after the Series C Preferred shareholders have received full payment, the Series B Preferred shareholders shall receive an amount per Series B preferred share equal to the original subscription price per Series B Preferred share (as adjusted for share splits and similar) plus unpaid accumulated dividends. Thirdly, after the Series B and C Preferred shareholders have received full payment, the Series A Preferred shareholders shall receive an amount per Series A preferred share equal to the original subscription price per Series A Preferred share (as adjusted for share splits and similar). When the Preferred A, B and C shareholders are satisfied in full, any excess assets available for distribution will be allocated ratably among holders of common stock and preferred stock based on their pro rata shareholdings on an as‑if‑converted basis.

If a liquidation event occurs after the Company achieves a certain clinical milestone, Series B and C Preferred shareholders, based on their pro rata shareholdings, shall receive an amount per Series B and C Preferred share equal to the original subscription price per Series B and C Preferred share (as adjusted for share splits and similar) plus unpaid accumulated dividends. Secondly, after the Series B and C Preferred shareholders have received full payment, the Series A Preferred shareholders shall receive an amount per Series A preferred share equal to the original subscription price per Series A Preferred share (as adjusted for share splits and similar). When the Preferred A, B and C shareholders are satisfied in full, any excess assets available for distribution will be allocated ratably among holders of common stock and preferred stock based on their pro rata shareholdings on an as‑if‑converted basis.

The liquidation preferences apply to each series of preferred stock only to the extent the holders would receive less than three times their respective original purchase prices.

Common stock	12 Months Ended
Common stock	Dec. 31, 2019
Common stock
Common stock	9. Common stock In October 2019, the Company completed its IPO of 6,516,667 shares of common stock at a price to the public of $15.00 per share, which included the exercise in full by the underwriters of their option to purchase an additional 850,000 shares of common stock. The Company received net proceeds of approximately $86.6 million, after deducting underwriting discounts and commissions and other offering expenses. The Company has 21,022,752 shares of common stock outstanding as of December 31, 2019. 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, the holders of common stock shall be entitled to share in the remaining assets of the Company available for distribution, if any.

Stock option plan

12 Months Ended

Dec. 31, 2019

Stock option plan

Stock option plans

10. Stock option plans

In October 2016, the Board of Directors adopted the 2016 Amended and Restated Stock Option Program (the “ 2016 Plan”), which provided for the grant of stock options to the Company’s employees, officers, directors, and outside consultants for the purchase of up to 1,224,824 shares of the Company’s common stock. During 2017, the 2016 Plan was amended to provide up to 1,946,849 shares of the Company’s common stock. During 2018, the 2016 Plan was further amended to provide up to 3,069,999 shares of the Company’s common stock. Holders of stock options shall be entitled to exercise the vested portion of the stock option provided that a trade sale, as defined in the plan, or initial public offering has occurred. The holders of stock options may also exercise the vested portion of the stock option within six months of termination of employment. Stock options generally vested over a four-year period and were scheduled to expire in October 2026.

In September 2019, the Company’s Board of Directors approved the 2019 Equity Incentive Plan (the “2019 Plan) and each outstanding option to purchase Aprea AB ordinary shares pursuant to the 2016 Plan was cancelled and the Company issued to each holder of such Aprea AB option, a substitute option to purchase, on the same terms and conditions as were applicable to such Aprea AB option, shares of the Company’s common stock pursuant to the 2019 Plan. As of December 31, 2019, there are no outstanding options under the 2016 Plan.

The Board of Directors has the discretion to provide for accelerated vesting under the 2019 Plan. At December 31, 2019, there were 1,175,494 shares available for future grant under the 2019 Plan.

The Company recorded stock-based compensation expense of $1,345,722, $329,814 and $395,440 during the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, there was $10,811,939 of unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the 2019 Plan, which is expected to be recognized over a weighted-average period of approximately 3.6 years.

The fair value of each option award is estimated on the date of grant using Black-Scholes, with the assumptions noted in the table below. Expected volatility for the Company’s common stock was determined based on an average of the historical volatility of a peer group of similar public companies. The expected term of options granted to employees was calculated using the simplified method, which represents the average of the contractual term of the option and the weighted-average vesting period of the option. The Company uses the simplified method because it does not have sufficient historical option exercise data to provide a reasonable basis upon which to estimate expected term. The contractual life of the option was used for the expected life of options granted to non-employee. The assumed dividend yield is based upon the Company’s expectation of not paying dividends in the foreseeable future. The risk-free rate for periods within the expected life of the option is based upon the Swedish Government Bond Rate in effect at the time of grant.

In determining the exercise prices for options granted, the Company’s Board of Directors has considered the fair value of the common stock as of the measurement date. The fair value of the common stock at each award grant date was based upon a variety of factors, including the results obtained from an independent third-party valuation, the Company’s financial position and historical financial performance, the status of technological developments within the Company’s proposed products, an evaluation or benchmark of the Company’s competition, the current business climate in the marketplace, the illiquid nature of the common stock, arm’s length sales of the Company’s capital stock, including Preferred Stock, the effect of the rights and preferences of the preferred shareholders, and the prospects of a liquidity event, among others.

The assumptions used in Black-Scholes are as follows:


	Year ended December 31,
	2019	2018		2017
Expected volatility	73.5% ‑ 74.5%	71.5	%	71.9% ‑ 75.4%
Risk‑free rate	1.53% ‑ 2.63%	2.9	%	2.3% ‑ 2.5%
Expected dividend yield	0%	0	%	0%
Expected term in years	6.08 - 7.59	8.2		8.6 ‑ 9.7

A summary of option activity under the Plan during the years ended December 31, 2019, 2018 and 2017 are as follows:


			Weighted‑		Weighted
			average		average
			exercise		remaining	Aggregate
	Number of		price per		contractual	intrinsic
	options		share		term (in years)	value
Outstanding at January 1, 2017		1,237,292	$	1.85	9.2
Granted		663,224		0.73
Exercised		—		—
Cancelled/Forfeited		(3,310)		0.92
Outstanding at December 31, 2017		1,897,206	$	1.46	8.3
Granted		24,067		1.01
Exercised		(2,306)		0.92
Cancelled/Forfeited		(74,779)		17.31
Outstanding at December 31, 2018		1,844,188	$	0.82	7.6
Granted		2,018,796		8.82
Exercised		(322,267)		0.23
Cancelled/Forfeited		(40,783)		0.99
Outstanding at December 31, 2019		3,499,934	$	5.49	7.5	$	141,413,705
Exercisable at December 31, 2019		1,203,298	$	0.93	6.7	$	54,101,434
Vested or expected to vest at December 31, 2019		3,499,934	$	5.49	7.5	$	141,413,705

The weighted-average grant date fair value of options granted during the years ended December 31, 2019, 2018 and 2017, was $6.68, $0.69 and $0.75 per share, respectively.

Commitments and contingencies	12 Months Ended
Commitments and contingencies	Dec. 31, 2019
Commitments and contingencies
Commitments and contingencies	11. 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 December 31, 2019, the Company has not recorded a provision for any contingent losses.

Summary of significant accounting policies (Policies)

12 Months Ended

Dec. 31, 2019

Summary of significant accounting policies

Principles of consolidation

Use of estimates

Stock split

Foreign currency and currency translation

Concentrations of credit risk

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.

Property and equipment


Asset category		Estimated useful life
Computer equipment and software		5 years
Furniture and fixtures		5 years
Laboratory equipment and office furniture		5 years
Leasehold improvements		Remainder of lease term

Impairment of long lived assets

Fair value of financial instruments

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.

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.

Convertible preferred stock

Accounting for leases

Research and development costs

Stock based compensation