0001558370-21-006263 | 10-Q | XBRL Viewer

Leases - Future lease payments (Details)	Mar. 31, 2021 USD ($)
Future Lease Payments
2021	$ 196,458
2022	67,860
Total Lease Payments	264,318
Less: Imputed Interest	(5,018)
Total Lease Liabilities	$ 259,300

Leases - Summary (Details)	3 Months Ended
Leases - Summary (Details)	Mar. 31, 2021 USD ($) lease	Mar. 31, 2020 USD ($)
Leases
Number of operating leases \| lease	2
Operating Expenses
Leases
Rent expense - ASC 842 \| $	$ 91,686	$ 62,909

Accrued expenses (Tables)

3 Months Ended

Mar. 31, 2021

Accrued expenses

Schedule of accrued expenses


	March 31,		December 31,
	2021		2020
Professional fees	$	531,973	$	224,424
Compensation and benefits		556,634		1,515,312
Research and development		6,088,253		8,158,302
Other		355,613		673,199
Total accrued expenses	$	7,532,473	$	10,571,237

Summary of significant accounting policies (Policies)

3 Months Ended

Mar. 31, 2021

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 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, 2020 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, 2021 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 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. Operating 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 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 cash and cash equivalents and 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—The Company adopted the Lease standard (ASC 842) effective January 1, 2019, using the modified retrospective method. The new standard provided a number of optional practical expedients in transition. The Company elected to apply the ‘package of practical expedients’ which allowed them 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 also elected to apply (i) the practical expedient which allows them 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.

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 utilizes 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. 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 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.

The Company also awards restricted stock units (“RSUs”) to employees. RSUs are generally subject to forfeiture if employment terminates prior to the completion of the vesting restrictions. The Company expenses the cost of the RSUs, which is determined to be the fair market value of the shares of common stock underlying the RSUs at the date of grant, ratably over the period during which the vesting restrictions lapse.

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,
	2021	2020
Options to purchase common stock	4,794,236	3,845,944
Unvested restricted stock units	500,000	—
Total shares of common stock equivalents	5,294,236	3,845,944

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.

Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying financial statements

Stockholders' equity (deficit)	3 Months Ended
Stockholders' equity (deficit)	Mar. 31, 2021
Stockholders’ equity
Stockholders’ equity (deficit)	5. Stockholders’ equity 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, the holders of common stock shall be entitled to share in the remaining assets of the Company available for distribution, if any. Shelf Registration Statement On November 12, 2020, the Company filed a universal shelf registration statement with the SEC for the issuance of common stock, preferred stock, warrants, rights, debt securities and units up to an aggregate of $350.0 million. On November 30, 2020, the Shelf Registration Statement was declared effective by the SEC. The universal shelf registration statement includes an at-the-market (ATM) offering program for the sale of up to $50.0 million of shares of the Company’s common stock. As of March 31, 2021, no sales of any equity or debt securities occurred under the ATM Stock-Based Compensation Expense The Company recorded stock-based compensation expense of $1,822,562 and $905,471 for the three months ended March 31, 2021 and 2020, respectively.

Commitments and contingencies (Details)	3 Months Ended
Commitments and contingencies (Details)	Mar. 31, 2021 USD ($)
Commitments and contingencies
Provision for contingent losses	$ 0

Accrued expenses

3 Months Ended

Mar. 31, 2021

Accrued expenses

Accrued expenses

4. Accrued expenses

Accrued expenses consist of the following:


	March 31,		December 31,
	2021		2020
Professional fees	$	531,973	$	224,424
Compensation and benefits		556,634		1,515,312
Research and development		6,088,253		8,158,302
Other		355,613		673,199
Total accrued expenses	$	7,532,473	$	10,571,237

Leases - Quantitative Information (Details) - USD ($)	3 Months Ended
Leases - Quantitative Information (Details) - USD ($)	Mar. 31, 2021	Mar. 31, 2020
Quantitative information regarding the Company’s leases
Operating lease cost	$ 57,923	$ 55,768
Other Information
Operating cash flows paid for amounts included in the measurement of lease liabilities	$ 63,482	$ 62,909
Minimum
Other Information
Weighted average remaining lease term (years)	9 months	1 year 9 months
Weighted average discount rate	3.00%	3.00%
Maximum
Other Information
Weighted average remaining lease term (years)	1 year 3 months	2 years 3 months
Weighted average discount rate	4.30%	4.30%

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 77,616,074	$ 89,017,686
Prepaid expenses and other current assets	2,467,443	3,399,019
Total current assets	80,083,517	92,416,705
Property and equipment, net	33,572	38,515
Right of use lease asset	248,200	320,616
Other noncurrent assets	29,376	29,383
Total assets	80,394,665	92,805,219
Current liabilities:
Accounts payable	3,456,728	4,503,619
Accrued expenses	7,532,473	10,571,237
Lease liability—current	225,537	256,309
Total current liabilities	11,214,738	15,331,165
Lease liability—noncurrent	33,763	78,847
Total liabilities	11,248,501	15,410,012
Commitments and contingencies (Note 7)
Stockholders’ equity:
Common stock, $0.001 par value, 400,000,000 shares authorized, 21,186,827 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively.	21,187	21,187
Additional paid-in capital	233,240,918	231,418,356
Accumulated other comprehensive loss	(10,440,111)	(10,037,261)
Accumulated deficit	(153,675,830)	(144,007,075)
Total stockholders’ equity	69,146,164	77,395,207
Total liabilities and stockholders’ equity	$ 80,394,665	$ 92,805,219

Summary of significant accounting policies - Net loss per share (Details) - shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Potentially dilutive securities that have been excluded from the calculation of diluted net loss per share
Total shares of common stock equivalents	5,294,236	3,845,944
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	4,794,236	3,845,944
Restricted stock units
Potentially dilutive securities that have been excluded from the calculation of diluted net loss per share
Total shares of common stock equivalents	500,000

Condensed Consolidated Statements of Stockholders’ Equity - USD ($)	Common Stock	Additional Paid-in capital	Accumulated other comprehensive loss	Accumulated deficit	Total
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
Equity, beginning balance at Dec. 31, 2020	$ 21,187	231,418,356	(10,037,261)	(144,007,075)	77,395,207
Equity, beginning balance (in shares) at Dec. 31, 2020	21,186,827
Increase (Decrease) in Stockholders' Equity
Stock‑based compensation		1,822,562			1,822,562
Foreign currency translation			(402,850)		(402,850)
Net loss				(9,668,755)	(9,668,755)
Equity, ending balance at Mar. 31, 2021	$ 21,187	$ 233,240,918	$ (10,440,111)	$ (153,675,830)	$ 69,146,164
Equity, ending balance (in shares) at Mar. 31, 2021	21,186,827

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
Condensed Consolidated Balance Sheets
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	21,186,827	21,186,827
Common stock, shares outstanding	21,186,827	21,186,827

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2021	May 06, 2021
Document and Entity Information
Document Type	10-Q
Document Period End Date	Mar. 31, 2021
Entity Registrant Name	Aprea Therapeutics, Inc.
Title of 12(b) Security	Common stock, par value $0.001 per share
Trading Symbol	APRE
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
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		21,186,827
Entity Central Index Key	0001781983
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false

Commitments and contingencies	3 Months Ended
Commitments and contingencies	Mar. 31, 2021
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, 2021, the Company has not recorded a provision for any contingent losses.

Leases (Tables)

3 Months Ended

Mar. 31, 2021

Leases

Summary of quantitative information regarding the Company’s leases



	Three months ended March 31,
Lease Cost	2021		2020
Operating lease cost	$	57,923	$	55,768
Other Information
Operating cash flows paid for amounts included in the measurement of lease liabilities	$	63,482	$	62,909
Operating lease liabilities arising from obtaining right‑of‑use assets	$	—	$	—
Weighted average remaining lease term (years)		0.75 - 1.25		1.75 - 2.25
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, 2021:


	Operating
Future Lease Payments	Leases
2021	$	196,458
2022		67,860
Total Lease Payments	$	264,318
Less: Imputed Interest		(5,018)
Total Lease Liabilities	$	259,300

Income taxes - Narrative (Details) - USD ($)	3 Months Ended
Income taxes - Narrative (Details) - USD ($)	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Income Taxes
Income tax expense	$ 0	$ 0
Uncertain tax positions	$ 800,000		$ 800,000

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Summary of significant accounting policies - Leases and Property and equipment (Details)	3 Months Ended
	Mar. 31, 2021
Leases
Leases, election of practical expedients package	true
Minimum
Leases
Incremental borrowing rate (as a percent)	3.00%
Maximum
Leases
Incremental borrowing rate (as a percent)	4.30%

Stockholders’ equity (deficit) (Details)	3 Months Ended
Stockholders’ equity (deficit) (Details)	Mar. 31, 2021 USD ($) Vote $ / shares shares	Mar. 31, 2020 USD ($)	Dec. 31, 2020 $ / shares shares	Nov. 12, 2020 USD ($)	Sep. 30, 2019 $ / shares
Stockholders’ equity
Aggregate number of authorized shares for all classes of equity \| shares	440,000,000
Common stock, shares authorized \| shares	400,000,000		400,000,000
Common stock, par value (in dollars per share) \| $ / shares	$ 0.001		$ 0.001		$ 0.001
Preferred stock, shares authorized \| shares	40,000,000
Preferred stock, par value (in dollars per share) \| $ / shares	$ 0.001
Number of voting rights per common share \| Vote	1
Maximum amount to be issued under universal shelf registration statement				$ 350,000,000
Maximum amount to be issued under at-the-market offering program				$ 50,000,000
Amount of equity or debt securities sold under at-the-market offering program	$ 0
Stock based compensation expense	$ 1,822,562	$ 905,471

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Operating expenses:
Research and development	$ 6,763,848	$ 9,096,122
General and administrative	3,425,833	2,776,468
Total operating expenses	10,189,681	11,872,590
Other income (expense):
Interest (expense) income	(1,057)	224,442
Foreign currency gain	521,983	2,247,891
Total other (expense) income	520,926	2,472,333
Net loss	(9,668,755)	(9,400,257)
Other comprehensive loss:
Foreign currency translation	(402,850)	(2,424,653)
Total comprehensive loss	$ (10,071,605)	$ (11,824,910)
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share)	$ (0.46)	$ (0.45)
Weighted-average common shares outstanding, basic and diluted (in shares)	21,186,827	21,052,726

Nature of business and basis of presentation	3 Months Ended
Nature of business and basis of presentation	Mar. 31, 2021
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 the 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, 2021 cash balance of approximately $77.6 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.

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2021
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, 2021 and 2020. 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 tax law is complex and often subject to varied interpretations, it is uncertain whether some of the Company’s tax positions will be sustained upon examination. Tax liabilities associated with uncertain tax positions represent unrecognized tax benefits, which arise when the estimated benefit recorded in the Company’s financial statements differs from the amounts taken or expected to be taken in a tax return because of the uncertainties described above. If recognized, the Company’s uncertain tax positions would all be absorbed by net operating losses. As of March 31, 2021 and December 31, 2020, the Company had approximately $0.8 million of liabilities related to uncertain tax positions. As the Company’s uncertain tax positions can be offset by available net operating losses, the Company did not recognize interest and penalties for 2021 and 2020.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Summary of significant accounting policies

3 Months Ended

Mar. 31, 2021

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, 2020 included in its annual report on Form 10-K filed with the Securities and Exchange Commission (or the “SEC”).

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.

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.


	Three months ended March 31,
	2021	2020
Options to purchase common stock	4,794,236	3,845,944
Unvested restricted stock units	500,000	—
Total shares of common stock equivalents	5,294,236	3,845,944

Recently issued accounting pronouncements

Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying financial statements.

Summary of significant accounting policies (Tables)

3 Months Ended

Mar. 31, 2021

Summary of significant accounting policies

Schedule of potentially dilutive securities excluded from calculation of diluted net loss per share


	Three months ended March 31,
	2021	2020
Options to purchase common stock	4,794,236	3,845,944
Unvested restricted stock units	500,000	—
Total shares of common stock equivalents	5,294,236	3,845,944

Leases

3 Months Ended

Mar. 31, 2021

Leases

Leases

3. Leases

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 the three months ended March 31, 2021 and 2020 was $91,686 and $62,909, respectively.

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, 2021 and 2020 is as follows:



	Three months ended March 31,
Lease Cost	2021		2020
Operating lease cost	$	57,923	$	55,768
Other Information
Operating cash flows paid for amounts included in the measurement of lease liabilities	$	63,482	$	62,909
Operating lease liabilities arising from obtaining right‑of‑use assets	$	—	$	—
Weighted average remaining lease term (years)		0.75 - 1.25		1.75 - 2.25
Weighted average discount rate		3.0 - 4.3%		3.0 - 4.3%

Future lease payments under noncancelable leases are as follows at March 31, 2021:


	Operating
Future Lease Payments	Leases
2021	$	196,458
2022		67,860
Total Lease Payments	$	264,318
Less: Imputed Interest		(5,018)
Total Lease Liabilities	$	259,300

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.

Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities:
Net loss	$ (9,668,755)	$ (9,400,257)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	3,588	3,812
Stock‑based compensation	1,822,562	905,471
Amortization of right of use lease asset	72,416	63,962
Foreign currency loss (gain)	(521,983)	(2,247,891)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	931,576	864,937
Accounts payable	(1,046,891)	829,836
Accrued expenses and other liabilities	(3,038,763)	1,656,216
Lease liability	(75,856)	(217,711)
Net cash used in operating activities	(11,522,106)	(7,541,625)
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
Net cash provided by financing activities		29,523
Decrease in cash and cash equivalents	(11,522,106)	(7,524,267)
Effect of exchange rate changes on cash	120,494	(51,245)
Cash and cash equivalents—beginning of year	89,017,686	130,088,869
Cash and cash equivalents—end of period	$ 77,616,074	$ 122,513,357

Accrued expenses (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Accrued expenses
Professional fees	$ 531,973	$ 224,424
Compensation and benefits	556,634	1,515,312
Research and development	6,088,253	8,158,302
Other	355,613	673,199
Total accrued expenses	$ 7,532,473	$ 10,571,237

Nature of business and basis of presentation (Details) $ / shares in Units, $ in Millions	1 Months Ended
	Sep. 30, 2019 $ / shares	Mar. 31, 2021 USD ($) $ / shares	Dec. 31, 2020 $ / shares
Cash balance \| $		$ 77.6
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001
Aprea Therapeutics AB
Common stock, par value (in dollars per share)	$ 0.11
Convertible preferred stock \| Aprea Therapeutics AB
Conversion ratio	1
Common Stock \| Aprea Therapeutics AB
Conversion ratio	1