0001558370-22-003671 | 10-K | XBRL Viewer

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Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities:
Net loss	$ (37,127,303)	$ (53,478,812)	$ (28,059,807)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	12,829	28,834	11,126
Stockbased compensation	7,813,743	4,983,023	1,345,722
Amortization of right of use lease asset	258,848	200,776	159,128
Foreign currency (gain) loss	(317,402)	890,252	(1,328,140)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(109,338)	(472,402)	(2,633,732)
Accounts payable	(2,730,587)	2,326,767	437,515
Accrued expenses and other liabilities	(5,218,241)	3,928,684	3,513,782
Lease liability	(268,728)	(209,794)	(154,301)
Net cash used in operating activities	(37,686,179)	(41,802,672)	(26,708,707)
Cash flows from investing activities:
Purchases of property and equipment		(25,709)	(30,901)
Net cash used in investing activities		(25,709)	(30,901)
Cash flows from financing activities:
Proceeds from the exercise of stock options	208,367	150,949	70,997
Proceeds from issuance of common stock in initial public offering, net			86,906,179
Proceeds from at-the-market sales of common stock, net	1,538,645
Proceeds from issuance of Series C convertible preferred, net			5,598,362
Net cash provided by financing activities	1,747,012	150,949	92,575,538
Decrease in cash and cash equivalents	(35,939,167)	(41,677,432)	65,835,930
Effect of exchange rate changes on cash	(2,467)	606,249	(1,422,992)
Cash and cash equivalents-beginning of year	89,017,686	130,088,869	65,675,931
Cash and cash equivalents-end of period	53,076,052	$ 89,017,686	$ 130,088,869
Non-cash investing and financing activities:
Operating lease liabilities arising from obtaining right-of-use assets	$ 124,043

Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) (Parenthetical)	12 Months Ended
	Dec. 31, 2019 USD ($)
IPO
Common stock issuance costs	$ 10,843,925
Series C convertible preferred stock
Convertible preferred stock issuance costs	$ 53,509

Summary of significant accounting policies - Leases and Property and equipment (Details)	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2019
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%
Computer equipment and software
Property and equipment
Useful life	3 years
Furniture and fixtures
Property and equipment
Useful life	7 years
Laboratory equipment and office furniture
Property and equipment
Useful life	7 years

Leases - Summary (Details)	12 Months Ended
Leases - Summary (Details)	Dec. 31, 2021 USD ($) lease	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Leases
Number of operating leases \| lease	2
Operating Expenses.
Leases
Rent expense \| $	$ 342,550	$ 327,205	$ 278,603

Stock option plans - Stock option activity (Details) - 2019 Equity Incentive Plan - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Number of options
Outstanding, beginning of period	3,771,459	3,499,934	1,844,188
Granted	1,179,650	446,800	2,018,796
Exercised	(226,394)	(164,075)	(322,267)
Cancelled/Forfeited	(138,100)	(11,200)	(40,783)
Outstanding, end of period	4,586,615	3,771,459	3,499,934	1,844,188
Exercisable	2,518,554
Vested or expected to vest	4,586,615
Weighted average exercise price per share
Outstanding, beginning of period	$ 9.10	$ 5.49	$ 0.82
Granted	5.87	35.51	8.82
Exercised	0.92	0.92	0.23
Cancelled/Forfeited	16.53	38.78	0.99
Outstanding, end of period	8.45	$ 9.10	$ 5.49	$ 0.82
Exercisable	6.89
Vested or expected to vest	$ 8.45
Weighted average remaining contractual term (in years)
Outstanding	6 years 7 months 6 days	6 years 9 months 18 days	7 years 6 months	7 years 7 months 6 days
Exercisable	5 years 6 months
Vested or expected to vest	6 years 7 months 6 days
Aggregate Intrinsic Value
Outstanding	$ 2,101,398
Exercisable	2,093,937
Vested or expected to vest	$ 2,101,398
Additional Disclosures
Weighted average grant date fair value of options granted	$ 4.29	$ 24.20	$ 6.68

Stock option plans (Tables)

12 Months Ended

Dec. 31, 2021

Stock option plan

Schedule of assumptions used in valuation of stock options


	Year ended December 31,
	2021	2020	2019
Expected volatility	88.1% ‑90.2%	78.9% ‑83.8%	73.5% ‑74.5%
Risk‑free rate	0.96% ‑1.04%	0.36% ‑1.43%	1.53% ‑2.63%
Expected dividend yield	0%	0%	0%
Expected term in years	5.50-6.08	5.50-6.08	6.08-7.59

Summary of stock option activity


			Weighted‑		Weighted
			average		average
			exercise		remaining	Aggregate
	Number of		price per		contractual	intrinsic
	options		share		term (in years)	value
Outstanding at January 1, 2019		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
Granted		446,800		35.51
Exercised		(164,075)		0.92
Cancelled/Forfeited		(11,200)		38.78
Outstanding at December 31, 2020		3,771,459	$	9.10	6.8
Granted		1,179,650		5.87
Exercised		(226,394)		0.92
Cancelled/Forfeited		(138,100)		16.53
Outstanding at December 31, 2021		4,586,615	$	8.45	6.6	$	2,101,398
Exercisable at December 31, 2021		2,518,554	$	6.89	5.5	$	2,093,937
Vested or expected to vest at December 31, 2021		4,586,615	$	8.45	6.6	$	2,101,398

Summary of restricted stock units activity



		Weighted‑
		average
		grant date
	Shares	fair value
Restricted stock units outstanding at December 31, 2020	—	$	—
Granted	523,050		5.91
Vested	(107,331)		5.94
Cancelled/Forfeited	(16,000)		6.00
Outstanding at December 31, 2021	399,719	$	5.91

Stock option plans - Summary (Details) - 2019 Equity Incentive Plan - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Stock option plan
Options outstanding	4,586,615	3,771,459	3,499,934	1,844,188
Shares available for grant	907,589
Stock based compensation expense	$ 7,813,743	$ 4,983,023	$ 1,345,722
Unrecognized compensation cost	$ 13,596,148
Weighted average
Stock option plan
Recognition period for unrecognized compensation cost	2 years 3 months 18 days

Income taxes - Components of Deferred Taxes (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Deferred tax assets:
Net operating loss carryforward	$ 38,773,870	$ 32,183,004
Stock compensation	3,341,338	1,358,554
Lease liability - ASC 842	47,677	70,192
Gross deferred tax assets	42,162,885	33,611,750
Valuation allowance	(42,115,543)	(33,541,533)
Total deferred tax assets	47,342	70,217
Deferred tax liabilities:
Fixed assets	(818)	(1,130)
Right of use asset	(46,524)	(69,087)
Total deferred tax liabilities	$ (47,342)	$ (70,217)

Property and equipment

12 Months Ended

Dec. 31, 2021

Property and equipment

Property and equipment

3. Property and equipment

Property and equipment consist of the following:


	December 31,
	2021		2020
Lab equipment	$	90,770	$	100,249
Furniture & Fixtures		31,152		31,611
Computer equipment		18,955		20,935
Property and equipment, at cost		140,877		152,795
Less accumulated depreciation and amortization		(117,007)		(114,280)
Property and equipment—net	$	23,870	$	38,515

Depreciation expense for years ended December 31, 2021, 2020 and 2019 was $12,829, $28,834, $11,126, respectively.

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, 2018							$ 6,483,044	$ 49,742,942	$ 56,364,645
Temporary Equity, Beginning Balance (in shares) at Dec. 31, 2018							612,446	7,235,969	4,712,698
Increase (Decrease) in Temporary Equity
Issuance of convertible preferred stock, net of issuance costs									$ 5,598,362
Issuance of convertible preferred stock (in shares)									467,179
Conversion of preferred stock into common stock							$ (6,483,044)	$ (49,742,942)	$ (61,963,007)
Conversion of preferred stock into common stock (in shares)							(612,446)	(7,235,969)	(5,179,877)
Equity, beginning balance at Dec. 31, 2018		$ 127,091		$ 19,666,588	$ (8,761,325)	$ (62,468,456)					$ (51,436,102)
Equity, beginning balance (in shares) at Dec. 31, 2018		1,155,366
Increase (Decrease) in Stockholders' Equity
Issuance of common stock	$ 6,517		$ 86,899,563	100						$ 86,906,080	100
Issuance of common stock (in shares)	6,516,667	160
Exercise of stock options		$ 3,179		67,818							70,997
Exercise of stock options (in shares)		322,267
Stockbased compensation				1,345,722							1,345,722
Foreign currency translation					(2,772,453)						(2,772,453)
Exchange of preferred and common stock of Aprea Therapeutics AB into stock of Aprea Therapeutics, Inc.		$ (128,792)		128,792
Conversion of preferred stock into common stock		$ 13,028		118,175,965							118,188,993
Conversion of preferred stock into common stock (in shares)		13,028,292
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
Increase (Decrease) in Stockholders' Equity
Exercise of stock options		$ 164		150,785							150,949
Exercise of stock options (in shares)		164,075
Stockbased compensation				4,983,023							4,983,023
Foreign currency translation					1,496,517						1,496,517
Net loss						(53,478,812)					(53,478,812)
Equity, ending balance at Dec. 31, 2020		$ 21,187		231,418,356	(10,037,261)	(144,007,075)					77,395,207
Equity, ending balance (in shares) at Dec. 31, 2020		21,186,827
Increase (Decrease) in Stockholders' Equity
Issuance of common stock		$ 367		1,538,278							1,538,645
Issuance of common stock (in shares)		366,773
Exercise of stock options		$ 226		208,141							208,367
Exercise of stock options (in shares)		226,394
Stockbased compensation				7,813,743							7,813,743
Foreign currency translation					(321,695)						(321,695)
Vesting of restricted stock units		$ 79		(79)
Vesting of restricted stock units (in shares)		79,419
Net loss						(37,127,303)					(37,127,303)
Equity, ending balance at Dec. 31, 2021		$ 21,859		$ 240,978,439	$ (10,358,956)	$ (181,134,378)					$ 49,506,964
Equity, ending balance (in shares) at Dec. 31, 2021		21,859,413

Income taxes - Income Taxes Rate Reconciliation (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Reconciliation of effect of applying the federal statutory rate to the net loss and the effective income tax rate
Statutory federal income tax rate	21.00%	21.00%	21.00%
Earnings in jurisdictions taxed at rates different from the statutory U.S. federal tax rate	(0.10%)	0.20%	0.40%
Permanent differences		1.70%	3.70%
Changes in valuation allowance	(18.20%)	(22.50%)	(25.10%)
Other	2.70%	0.40%

Summary of significant accounting policies - Net loss per share (Details) - shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Potentially dilutive securities
Total shares of common stock equivalents	4,986,334	3,771,459	3,499,934
Options to purchase common stock
Potentially dilutive securities
Total shares of common stock equivalents	4,586,615	3,771,459	3,499,934
Restricted stock units
Potentially dilutive securities
Total shares of common stock equivalents	399,719

Income taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income taxes

Schedule of components of income taxes


	Year ended December 31,
	2021		2020		2019
Foreign	$	(13,229,828)	$	(27,215,385)	$	(25,268,373)
Domestic		(23,897,475)		(26,263,427)		(2,791,434)
Net loss	$	(37,127,303)	$	(53,478,812)	$	(28,059,807)

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


	Year ended December 31,
	2021		2020		2019
Statutory federal income tax rate	21.0	%	21.0	%	21.0	%
Earnings in jurisdictions taxed at rates different from the statutory U.S. federal tax rate	(0.1)	%	0.2	%	0.4	%
Permanent differences	—	%	1.7	%	3.7	%
Changes in valuation allowance	(18.2)	%	(22.5)	%	(25.1)	%
Other	(2.7)	%	(0.4)	%	—	%
Effective income tax rate	—	%	—	%	—	%

Summary of significant components of deferred taxes


	December 31,
	2021		2020
Deferred tax assets:
Net operating loss carryforward	$	38,773,870	$	32,183,004
Stock compensation		3,341,338		1,358,554
Lease liability		47,677		70,192
Gross deferred tax assets		42,162,885		33,611,750
Valuation allowance		(42,115,543)		(33,541,533)
Total deferred tax assets		47,342		70,217
Deferred tax liabilities:
Fixed assets		(818)		(1,130)
Right of use asset		(46,524)		(69,087)
Total deferred tax liabilities		(47,342)		(70,217)
Net deferred tax assets (liabilities)	$	—	$	—

Stockholders' equity (Details)		12 Months Ended
Stockholders' equity (Details)	Nov. 12, 2020 USD ($)	Dec. 31, 2021 USD ($) Vote $ / shares shares	Dec. 31, 2020 $ / shares shares	Dec. 31, 2019 $ / shares shares	Sep. 30, 2019 $ / shares
Stockholders' equity
Stock, shares authorized		440,000,000
Common stock, shares authorized		400,000,000	400,000,000	400,000,000
Common stock, par value (in dollars per share) \| $ / shares		$ 0.001	$ 0.001	$ 0.001	$ 0.001
Preferred stock, shares authorized		40,000,000
Preferred stock, par value (in dollars per share) \| $ / shares		$ 0.001
Number of shares issued		366,773	0
Commission payable as a percentage of gross proceeds from sale of common stock under ATM offering	3.00%
Proceeds from at-the-market sales of common stock, net \| $		$ 1,538,645
Common stock, shares outstanding		21,859,413	21,186,827
Number of voting rights per common share \| Vote		1
Shelf Registration Statement
Maximum amount to be issued under universal shelf registration statement \| $	$ 350,000,000.0
Maximum amount to be issued under at-the-market offering program \| $	$ 50,000,000.0

Summary of significant accounting policies (Tables)

12 Months Ended

Dec. 31, 2021

Summary of significant accounting policies

Summary of useful lives of property and equipment


Asset category		Estimated useful life
Computer equipment and software		3 years
Furniture and fixtures		7 years
Laboratory equipment and office furniture		7 years
Leasehold improvements		Remainder of lease term

Schedule of basic and diluted net loss per share attributable to common stockholders

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,
	2021	2020	2019
Options to purchase common stock	4,586,615	3,771,459	3,499,934
Unvested restricted stock units	399,719	—	—
Total shares of common stock equivalents	4,986,334	3,771,459	3,499,934

Summary of significant accounting policies

12 Months Ended

Dec. 31, 2021

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, 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, are used for, but not limited to, include stock-based compensation and accounting for research and development costs.

Foreign currency and currency translation— The functional currency for Aprea Therapeutics AB is the Swedish Krona. Assets and liabilities of Aprea Therapeutics 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 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 and comprehensive loss 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		3 years
Furniture and fixtures		7 years
Laboratory equipment and office furniture		7 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 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—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 allow 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 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 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 elects to account for forfeitures when they occur.

The Company also awards restricted stock units (“RSUs”) to employees and directors. 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.

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, 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.


	Year ended December 31,
	2021	2020	2019
Options to purchase common stock	4,586,615	3,771,459	3,499,934
Unvested restricted stock units	399,719	—	—
Total shares of common stock equivalents	4,986,334	3,771,459	3,499,934

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.

Nature of business and basis of presentation (Details)	1 Months Ended
Nature of business and basis of presentation (Details)	Sep. 30, 2019 $ / shares	Dec. 31, 2021 USD ($) $ / shares	Dec. 31, 2020 USD ($) $ / shares	Dec. 31, 2019 $ / shares
Cash balance \| $		$ 53,076,052	$ 89,017,686
Common stock, par value (in dollars per share) \| $ / shares	$ 0.001	$ 0.001	$ 0.001	$ 0.001
Cash \| $		$ 53,100,000
Aprea Therapeutics AB
Common stock, par value (in dollars per share) \| $ / shares	$ 0.11
Convertible preferred stock \| Aprea Therapeutics AB
Conversion ratio	1
Common Stock \| Aprea Therapeutics AB
Conversion ratio	1

Leases - Future lease payments (Details)	Dec. 31, 2021 USD ($)
Future Lease Payments
2022	$ 193,980
Total Lease Payments	193,980
Less: Imputed Interest	(3,509)
Total Lease Liabilities	$ 190,471

Income taxes

12 Months Ended

Dec. 31, 2021

Income taxes

Income Taxes

7. Income taxes

Components of income taxes consist of the following:


	Year ended December 31,
	2021		2020		2019
Foreign	$	(13,229,828)	$	(27,215,385)	$	(25,268,373)
Domestic		(23,897,475)		(26,263,427)		(2,791,434)
Net loss	$	(37,127,303)	$	(53,478,812)	$	(28,059,807)

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,
	2021		2020		2019
Statutory federal income tax rate	21.0	%	21.0	%	21.0	%
Earnings in jurisdictions taxed at rates different from the statutory U.S. federal tax rate	(0.1)	%	0.2	%	0.4	%
Permanent differences	—	%	1.7	%	3.7	%
Changes in valuation allowance	(18.2)	%	(22.5)	%	(25.1)	%
Other	(2.7)	%	(0.4)	%	—	%
Effective income tax rate	—	%	—	%	—	%

Significant components of the Company’s deferred taxes as of December 31, 2021 and 2020 are as follows:


	December 31,
	2021		2020
Deferred tax assets:
Net operating loss carryforward	$	38,773,870	$	32,183,004
Stock compensation		3,341,338		1,358,554
Lease liability		47,677		70,192
Gross deferred tax assets		42,162,885		33,611,750
Valuation allowance		(42,115,543)		(33,541,533)
Total deferred tax assets		47,342		70,217
Deferred tax liabilities:
Fixed assets		(818)		(1,130)
Right of use asset		(46,524)		(69,087)
Total deferred tax liabilities		(47,342)		(70,217)
Net deferred tax assets (liabilities)	$	—	$	—

The Company has no income tax expense due to operating losses incurred for the years ended December 31, 2021, 2020 and 2019, 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, 2021, the Company has $126.9 million, $45.6 million, and $45.2 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 2021 and 2019 by $8.6 million and $13.9 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. Income tax returns prior to 2018 in the United States and Massachusetts are no longer subject to examination and income tax returns prior to 2015 are no longer

subject to examination in Sweden. The Company is not currently under examination by the IRS or any other jurisdictions for any tax years.

In June 2018, Sweden passed laws on changes to the Swedish regulations on corporate income taxation. The law applies 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. The Company previously accounted for the change in rate in 2020 which resulted in offsetting changes to tax expense and the valuation allowance.

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. Substantially all of these unrecognized tax benefits, if recognized, would benefit the Company’s effective income tax rate.

As of December 31, 2021 and 2020, the Company had approximately $0.1 million and $0.8 million of liabilities, respectively, related to uncertain tax positions. The Company had no uncertain tax positions as of December 31, 2019. 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, 2020 and 2019.

On March 27, 2020, the U.S government enacted the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) under which several restrictions for income tax purposes were relaxed, including with respect to, the limitations on business interest expense deductions, the ability to use net operating losses, and the acceleration of alternative minimum tax credits. Given the Company’s history of losses, the CARES Act did not have a material impact on income taxes.

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

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

+ Details

Commitments and contingencies

12 Months Ended

Dec. 31, 2021

Commitments and contingencies.

Commitments and contingencies

10. 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, 2021, the Company has not recorded a provision for any contingent losses.

Property and equipment (Details) - USD ($)	12 Months Ended
Property and equipment (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Property and equipment
Property and equipment, at cost	$ 140,877	$ 152,795
Less accumulated depreciation and amortization	(117,007)	(114,280)
Property and equipment-net	23,870	38,515
Depreciation expense	12,829	28,834	$ 11,126
Lab equipment
Property and equipment
Property and equipment, at cost	90,770	100,249
Furniture and fixtures
Property and equipment
Property and equipment, at cost	31,152	31,611
Computer equipment
Property and equipment
Property and equipment, at cost	$ 18,955	$ 20,935

Leases

12 Months Ended

Dec. 31, 2021

Leases

Leases

5. 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 years ended December 31, 2021, 2020 and 2019 was $342,550, $327,205 and $278,603, respectively, which are included in operating expenses.

The Company has an operating lease in Boston, Massachusetts for office space which was amended effective July 1, 2021. The lease will expire in December 2022 and does not have any renewal options. The Company also has an operating lease for office and laboratory space in Solna, Sweden which was extended effective January 1, 2022 and now expires in June 2023.

Quantitative information regarding the Company’s leases for the years ended December 31, 2021, 2020 and 2019 is as follows:



	Year ended December 31,
Lease Cost	2021		2020			2019
Operating lease cost	$	236,364	$	226,275	$	161,856
Other Information
Operating cash flows paid for amounts included in the measurement of lease liabilities	$	255,078	$	251,636	$	174,846
Operating lease liabilities arising from obtaining right‑of‑use assets	$	124,043	$	—	$	355,330
Weighted average remaining lease term (years)		0.50 - 1.00		1.00 - 1.50		2.00 - 2.50
Weighted average discount rate		3.0 - 4.3%		3.0 - 4.3%		3.0 - 4.3%

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


	Operating
Future Lease Payments	Leases
2022	$	193,980
2023		—
Total Lease Payments	$	193,980
Less: Imputed Interest		(3,509)
Total Lease Liabilities	$	190,471

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, 2021

Accrued expenses

Accrued expenses

6. Accrued expenses

Accrued expenses consist of the following:


	December 31,		December 31,
	2021		2020
Professional fees	$	247,123	$	224,424
Compensation and benefits		1,418,309		1,515,312
Research and development		3,504,375		8,158,302
Other		183,189		673,199
Total accrued expenses	$	5,352,996	$	10,571,237

Consolidated Balance Sheets - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 53,076,052	$ 89,017,686
Prepaid expenses and other current assets	3,508,358	3,399,019
Total current assets	56,584,410	92,416,705
Property and equipment, net	23,870	38,515
Right of use lease asset	185,811	320,616
Other noncurrent assets	29,372	29,383
Total assets	56,823,463	92,805,219
Current liabilities:
Accounts payable	1,773,032	4,503,619
Accrued expenses	5,352,996	10,571,237
Lease liability-current	190,471	256,309
Total current liabilities	7,316,499	15,331,165
Lease liability-noncurrent		78,847
Total liabilities	7,316,499	15,410,012
Commitments and contingencies (Note 10)
Stockholders' equity:
Common stock, $0.001 par value, 400,000,000 shares authorized, 21,859,413 and 21,186,827 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively.	21,859	21,187
Additional paid-in capital	240,978,439	231,418,356
Accumulated other comprehensive loss	(10,358,956)	(10,037,261)
Accumulated deficit	(181,134,378)	(144,007,075)
Total stockholders' equity	49,506,964	77,395,207
Total liabilities and stockholders' equity	$ 56,823,463	$ 92,805,219

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2021	Dec. 31, 2020
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	21,859,413	21,186,827
Common stock, shares outstanding	21,859,413	21,186,827

Consolidated Statements of Operations and Comprehensive Loss - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Operating expenses:
Research and development	$ 23,895,875	$ 37,879,325	$ 20,950,672
General and administrative	13,550,478	14,931,887	8,593,626
Total operating expenses	37,446,353	52,811,212	29,544,298
Other income (expense):
Interest income, net	1,648	222,652	156,351
Foreign currency gain (loss)	317,402	(890,252)	1,328,140
Total other income (expense)	319,050	(667,600)	1,484,491
Net loss	(37,127,303)	(53,478,812)	(28,059,807)
Other comprehensive loss:
Foreign currency translation	(321,695)	1,496,517	(2,772,453)
Total comprehensive loss	$ (37,448,998)	$ (51,982,295)	$ (30,832,260)
Net loss per share attributable to common stockholders, basic (in dollars per share)	$ (1.74)	$ (2.53)	$ (4.67)
Net loss per share attributable to common stockholders, diluted (in dollars per share)	$ (1.74)	$ (2.53)	$ (4.67)
Weighted-average common shares outstanding, basic (in shares)	21,286,547	21,133,651	6,002,486
Weighted-average common shares outstanding, diluted (in shares)	21,286,547	21,133,651	6,002,486

Summary of significant accounting policies (Policies)

12 Months Ended

Dec. 31, 2021

Summary of significant accounting policies

Principles of consolidation

Use of estimates

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		3 years
Furniture and fixtures		7 years
Laboratory equipment and office furniture		7 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.

Accounting for leases

Research and development costs

Stock based compensation

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.

Income taxes

Net loss per share


	Year ended December 31,
	2021	2020	2019
Options to purchase common stock	4,586,615	3,771,459	3,499,934
Unvested restricted stock units	399,719	—	—
Total shares of common stock equivalents	4,986,334	3,771,459	3,499,934

Recently issued accounting pronouncements

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.

Commitments and contingencies (Details)	12 Months Ended
Commitments and contingencies (Details)	Dec. 31, 2021 USD ($)
Commitments and contingencies.
Provision for contingent losses	$ 0

Property and equipment (Tables)

12 Months Ended

Dec. 31, 2021

Property and equipment

Schedule of property and equipment


	December 31,
	2021		2020
Lab equipment	$	90,770	$	100,249
Furniture & Fixtures		31,152		31,611
Computer equipment		18,955		20,935
Property and equipment, at cost		140,877		152,795
Less accumulated depreciation and amortization		(117,007)		(114,280)
Property and equipment—net	$	23,870	$	38,515

Income taxes - Components of Income Taxes (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income taxes
Net loss	$ (37,127,303)	$ (53,478,812)	$ (28,059,807)
Foreign
Income taxes
Net loss	(13,229,828)	(27,215,385)	(25,268,373)
Domestic
Income taxes
Net loss	$ (23,897,475)	$ (26,263,427)	$ (2,791,434)

- Definition

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

+ References

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+ Details

Stock option plans - Valuation assumptions (Details) - 2019 Equity Incentive Plan	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Stock option plan
Expected volatility, minimum	88.10%	78.90%	73.50%
Expected volatility, maximum	90.20%	83.80%	74.50%
Risk-free rate, minimum	0.96%	0.36%	1.53%
Risk-free rate, maximum	1.04%	1.43%	2.63%
Expected dividend yield	0.00%	0.00%	0.00%
Minimum
Stock option plan
Expected term in years	5 years 6 months	5 years 6 months	6 years 29 days
Maximum
Stock option plan
Expected term in years	6 years 29 days	6 years 29 days	7 years 7 months 2 days

Leases (Tables)

12 Months Ended

Dec. 31, 2021

Leases

Summary of quantitative information regarding the Company's leases



	Year ended December 31,
Lease Cost	2021		2020			2019
Operating lease cost	$	236,364	$	226,275	$	161,856
Other Information
Operating cash flows paid for amounts included in the measurement of lease liabilities	$	255,078	$	251,636	$	174,846
Operating lease liabilities arising from obtaining right‑of‑use assets	$	124,043	$	—	$	355,330
Weighted average remaining lease term (years)		0.50 - 1.00		1.00 - 1.50		2.00 - 2.50
Weighted average discount rate		3.0 - 4.3%		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 December 31, 2021:


	Operating
Future Lease Payments	Leases
2022	$	193,980
2023		—
Total Lease Payments	$	193,980
Less: Imputed Interest		(3,509)
Total Lease Liabilities	$	190,471

Accrued expenses (Tables)

12 Months Ended

Dec. 31, 2021

Accrued expenses

Schedule of accrued expenses


	December 31,		December 31,
	2021		2020
Professional fees	$	247,123	$	224,424
Compensation and benefits		1,418,309		1,515,312
Research and development		3,504,375		8,158,302
Other		183,189		673,199
Total accrued expenses	$	5,352,996	$	10,571,237

Stockholders' equity

12 Months Ended

Dec. 31, 2021

Stockholders' equity

Stockholders' equity

8. 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 and 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. The Company agreed to pay a commission of 3% of the gross proceeds of any common stock sold in connection with the ATM offering program. During the year ended December 31, 2021, the Company issued and sold 366,773 shares of common stock under the ATM offering program resulting in net proceeds to the Company of approximately $1.5 million. The Company did not sell any common stock under the ATM offering program during the year ended December 31, 2020.

Stock option plans - Restricted stock units (Details) - Restricted stock units	12 Months Ended
	Dec. 31, 2021 USD ($) $ / shares shares
Unrecognized compensation cost related to RSU \| $	$ 1,644,247
Recognition period for unrecognized compensation cost	1 year 10 months 24 days
Restricted stock units
Granted (in shares)	523,050
Vested (in shares)	(107,331)
Cancelled/Forfeited (in shares)	(16,000)
Ending balance (in shares)	399,719
Weighted average grant date fair value
Granted, Weighted average grant date fair value \| $ / shares	$ 5.91
Vested, Weighted average grant date fair value \| $ / shares	5.94
Cancelled/Forfeited, Weighted average grant date fair value \| $ / shares	6.00
Ending balance, Weighted average grant date fair value \| $ / shares	$ 5.91
Executive officers and Certain other employees
Restricted stock units
Granted (in shares)	500,000
Cancelled/Forfeited (in shares)	(16,000)
Non employee directors
Restricted stock units
Granted (in shares)	23,050
Vesting On 6 Month, 12 Month and 18 Month Anniversaries Of Grant Date \| Executive officers and Certain other employees
Restricted stock units
Granted (in shares)	322,000
Vesting On 6 Month Anniversary Of Grant Date
Restricted stock units
Vesting period	6 months
Vesting On 12 Month Anniversary Of Grant Date
Restricted stock units
Vesting period	12 months
Vesting On 18 Month Anniversary Of Grant Date
Restricted stock units
Vesting period	18 months
Vesting On One Year, Two Year and Three Year Anniversaries Of Grant Date \| Executive officers and Certain other employees
Restricted stock units
Granted (in shares)	162,000
Vesting On One Year Anniversary Of Grant Date
Restricted stock units
Vesting period	1 year
Vesting On Two Year Anniversary Of Grant Date
Restricted stock units
Vesting period	2 years
Vesting On Three Year Anniversary Of Grant Date
Restricted stock units
Vesting period	3 years

Leases - Quantitative Information (Details) - USD ($)	12 Months Ended
Leases - Quantitative Information (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Quantitative information regarding the Company's leases
Operating lease cost	$ 236,364	$ 226,275	$ 161,856
Other Information
Operating cash flows paid for amounts included in the measurement of lease liabilities	255,078	$ 251,636	174,846
Operating lease liabilities arising from obtaining right-of-use assets	$ 124,043		$ 355,330
Minimum
Other Information
Weighted average remaining lease term (years)	6 months	1 year	2 years
Weighted average discount rate	3.00%	3.00%	3.00%
Maximum
Other Information
Weighted average remaining lease term (years)	1 year	1 year 6 months	2 years 6 months
Weighted average discount rate	4.30%	4.30%	4.30%

Income taxes - Narrative (Details) - USD ($) $ in Millions			12 Months Ended
Income taxes - Narrative (Details) - USD ($) $ in Millions	Jan. 01, 2020	Jan. 01, 2019	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income taxes
Income tax expense			$ 0.0	$ 0.0	$ 0.0
Valuation allowance increase due to increase in the deferred tax assets			8.6		13.9
Uncertain tax positions			$ 0.1	$ 0.8	$ 0.0
Corporate income tax rate			21.00%	21.00%	21.00%
Foreign
Income taxes
Operating loss carryforwards			$ 126.9
Domestic
Income taxes
Operating loss carryforwards			45.6
State
Income taxes
Operating loss carryforwards			$ 45.2
Sweden.
Income taxes
Corporate income tax rate	20.60%	21.40%				22.00%

Fair value measurements

12 Months Ended

Dec. 31, 2021

Fair value measurements

Fair value measurements

4. Fair value measurements

The Company’s financial instruments consist of cash and cah equivalents and 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

Accrued expenses (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Accrued expenses
Professional fees	$ 247,123	$ 224,424
Compensation and benefits	1,418,309	1,515,312
Research and development	3,504,375	8,158,302
Other	183,189	673,199
Total accrued expenses	$ 5,352,996	$ 10,571,237

Nature of business and basis of presentation

12 Months Ended

Dec. 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 December 31, 2021 cash balance of approximately $53.1 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.

Stock option plans

12 Months Ended

Dec. 31, 2021

Stock option plan

Stock option plans

9. Stock option plans

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 a previous 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.

The Board of Directors has the discretion to provide for accelerated vesting under the 2019 Plan. At December 31, 2021, there were 907,589 shares available for future grant under the 2019 Plan.

The Company recorded stock-based compensation expense of $7,813,743, $4,983,023 and $1,345,722 during the years ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021, there was $13,596,148 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 2.3 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 prior to completion of the Company’s IPO, 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,
	2021	2020	2019
Expected volatility	88.1% ‑90.2%	78.9% ‑83.8%	73.5% ‑74.5%
Risk‑free rate	0.96% ‑1.04%	0.36% ‑1.43%	1.53% ‑2.63%
Expected dividend yield	0%	0%	0%
Expected term in years	5.50-6.08	5.50-6.08	6.08-7.59

A summary of option activity under the Plan during the years ended December 31, 2021, 2020 and 2019 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, 2019		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
Granted		446,800		35.51
Exercised		(164,075)		0.92
Cancelled/Forfeited		(11,200)		38.78
Outstanding at December 31, 2020		3,771,459	$	9.10	6.8
Granted		1,179,650		5.87
Exercised		(226,394)		0.92
Cancelled/Forfeited		(138,100)		16.53
Outstanding at December 31, 2021		4,586,615	$	8.45	6.6	$	2,101,398
Exercisable at December 31, 2021		2,518,554	$	6.89	5.5	$	2,093,937
Vested or expected to vest at December 31, 2021		4,586,615	$	8.45	6.6	$	2,101,398

The weighted-average grant date fair value of options granted during the years ended December 31, 2021, 2020 and 2019, was $4.29, $24.20, $6.68 per share, respectively.

Restricted Stock Units

During the year ended December 31, 2021, the Company granted a total of 500,000 RSUs to executive officers and certain other employees of the Company, 16,000 of which were canceled prior to vesting. The remaining RSUs vest as follows: 322,000, vest ratably on the 6 month, 12 month and 18 month anniversaries of the grant date and 162,000, vest ratably on the one-year, two-year and three-year anniversaries of the grant date. During the year ended December 31, 2021, the Company granted a total of 23,050 RSUs to non-employee directors of the Company. These RSUs vest on the one-year anniversary of the grant date.

As of December 31, 2021, there was $1,644,247 of unrecognized compensation cost related to RSUs granted under the 2019 Plan, which is expected to be recognized over a weighted-average period of approximately 1.9 years.

The following table shows restricted stock unit activity during the year ended December 31, 2021:



		Weighted‑
		average
		grant date
	Shares	fair value
Restricted stock units outstanding at December 31, 2020	—	$	—
Granted	523,050		5.91
Vested	(107,331)		5.94
Cancelled/Forfeited	(16,000)		6.00
Outstanding at December 31, 2021	399,719	$	5.91