Company Focus and Acquisitions - The company shifted its primary focus to the assets acquired from Atrin Pharmaceuticals, particularly the ATRN-119 and ATRN-W1051 programs, following the failure of its pivotal Phase 3 trial for APR-246[76]. - The acquisition of Atrin was evaluated as a strategic option to create long-term value for stockholders[76]. - Aprea acquired Atrin on May 16, 2022, with the transaction structured as a merger, resulting in Atrin becoming a wholly owned subsidiary[103]. - At the closing of the merger, Aprea issued 1,117,394 shares of common stock and 2,949,630 shares of Series A Preferred Stock, convertible into 10 shares of common stock[104]. Clinical Development - ATRN-119, an orally bioavailable small molecule inhibitor of ATR, has received FDA IND approval for a first-in-human clinical trial expected to begin in Q3 2022[90]. - ATRN-W1051, a selective WEE1 inhibitor, is currently in preclinical development with IND-enabling studies anticipated to commence in the second half of 2022[92]. - The company is planning to study ATRN-119 as both a monotherapy and in combination with standard care in Phase 1/2 clinical trials for solid tumor malignancies[90]. - The company has no ongoing clinical trials for eprenetapopt but has received clearance from the FDA to proceed with new Phase 1 dose-optimization trials in relapsed/refractory MDS/AML[93]. - Eprenetapopt (APR-246) has received Orphan Drug and Fast Track designations from the FDA for myelodysplastic syndromes (MDS) and acute myeloid leukemia (AML)[93]. - The company believes that the selectivity and toxicology profiles of ATRN-119 may differentiate it from other ATR inhibitors currently in development[90]. Financial Performance - Aprea reported net losses of $98.3 million and $106.2 million for the three and six months ended June 30, 2022, respectively, with an accumulated deficit of $287.3 million as of the same date[105]. - The net loss for Q2 2022 was $(98.3) million, compared to a net loss of $(10.3) million in Q2 2021, reflecting an increase in losses of $(88.0) million[140]. - The net loss for the six months ended June 30, 2022 was $(106.2) million, compared to $(19.9) million in the same period of 2021, indicating an increase in losses of $(86.3) million[145]. - The company incurred a net loss of $86.3 million, primarily due to acquired IPR&D associated with the Atrin acquisition[154]. Expenses and Cash Flow - The company anticipates significant increases in expenses due to planned clinical trials, research and development of product candidates, and establishing a commercialization infrastructure[106]. - General and administrative expenses are expected to increase due to costs associated with the merger and expansion of operations[122]. - Research and development expenses for Q2 2022 were $6.8 million, a slight increase of $0.1 million from $6.7 million in Q2 2021[143]. - General and administrative expenses for Q2 2022 were $15.6 million, up $12.3 million from $3.3 million in Q2 2021, primarily due to a $12.2 million increase in non-cash stock-based compensation[143]. - Total operating expenses for Q2 2022 reached $98.5 million, a significant increase of $88.5 million compared to $10.0 million in Q2 2021[140]. - For the six months ended June 30, 2022, research and development expenses totaled $10.9 million, down $2.5 million from $13.4 million in the same period of 2021[146]. - General and administrative expenses for the six months ended June 30, 2022 were $19.6 million, an increase of $12.8 million from $6.8 million in the same period of 2021[146]. - Total operating expenses for the six months ended June 30, 2022 were $106.5 million, up $86.4 million from $20.2 million in the same period of 2021[145]. - As of June 30, 2022, Aprea had cash and cash equivalents of $39.1 million, projected to fund operations through the end of 2023[110]. - For the six months ended June 30, 2022, net cash used in operating activities was $14.4 million, a decrease of $4.9 million compared to $19.3 million for the same period in 2021[154]. - The company has raised a total of $225.6 million from the sale of preferred and common stock since inception[151]. Future Outlook and Financing - Aprea expects to require additional financing to support operations until significant revenue from product sales is generated[109]. - The company expects expenses to increase significantly as it initiates clinical trials and seeks marketing approvals for product candidates[157]. - The company has no committed external sources of funds and may face dilution if additional capital is raised through equity sales[162]. - The company has filed a universal shelf registration statement for the issuance of securities up to an aggregate of $350 million[165]. Miscellaneous - The COVID-19 pandemic has not materially affected Aprea's financial results for the three and six months ended June 30, 2022, but uncertainties remain regarding its future impact[112]. - The company remains classified as an emerging growth company (EGC) and a smaller reporting company, with market value held by non-affiliates below $700 million and annual revenue below $100 million[138]. - The company does not currently have any significant direct foreign exchange risk and has not used derivative financial instruments to hedge such risk[169]. - There have been no changes in internal control over financial reporting that materially affected the company's financial reporting[172].

Financial Performance and Losses - The company has incurred significant losses since inception and expects to continue incurring losses for the foreseeable future, with no revenues generated to date[175]. - The company incurred significant net losses of $53.5 million, $28.1 million, and $15.5 million for the years ended December 31, 2020, 2019, and 2018, respectively, with an accumulated deficit of $144.0 million as of December 31, 2020[185]. - The company has not generated any revenue from drug sales to date and has financed operations primarily through private placements and IPO proceeds[185]. - The company expects to incur significant expenses and increasing operating losses for the foreseeable future, with future capital requirements dependent on various factors including clinical trial costs and regulatory reviews[189]. - The company expects substantial increases in expenses related to ongoing development activities for eprenetapopt and other product candidates[362]. Clinical Trials and Product Development - The pivotal Phase 3 MDS trial for the lead product candidate, eprenetapopt, failed to meet its predefined primary endpoint, which may materially harm the business[175]. - The pivotal Phase 3 trial for eprenetapopt failed to meet its predefined primary endpoint of complete remission (CR) rate[195]. - Clinical trials for eprenetapopt include patients with deteriorating health, with common adverse events reported such as nausea, vomiting, and fatigue[197]. - Serious adverse events in trials included febrile neutropenia, pneumonia, and sepsis, with some patient deaths reported possibly related to eprenetapopt[197]. - The company is conducting multiple clinical trials for its product candidates, including eprenetapopt and APR-548, with various phases currently enrolling patients[322]. Regulatory and Approval Challenges - The company has never obtained marketing approval for any product candidate, and the approval process is expensive, time-consuming, and uncertain[181]. - Regulatory authorities may require additional clinical trials or impose restrictions on approved products, affecting commercialization[199]. - The company faces challenges in obtaining marketing approval for p53 reactivators, as this has never been done before[195]. - The company may face significant delays in obtaining reimbursement for newly approved drugs, which could adversely affect its operating results[216]. - The company must comply with extensive regulatory requirements, including safety reporting, quality control, and advertising restrictions for approved drugs[267]. Competition and Market Risks - The company faces substantial competition, which may result in others commercializing products before it does[179]. - The company is dependent on the success of eprenetapopt, and difficulties in patient enrollment for clinical trials could delay necessary marketing approvals[175]. - The company operates in a highly competitive environment with major pharmaceutical and biotechnology companies, which may have greater resources and expertise[208]. - The success of product candidates will depend on market acceptance, efficacy, safety, and competitive pricing compared to existing treatments[206]. Intellectual Property and Patent Risks - The company may not be able to protect its intellectual property rights effectively, which could allow competitors to develop similar products[179]. - The company does not own or license any composition of matter patents for eprenetapopt, which is in the public domain[230]. - The current patent portfolio for eprenetapopt consists of method-of-use and formulation patent claims, which may not prevent competitors from using the same product candidate for other uses[232]. - The company may face challenges in maintaining valid and enforceable patents, which could adversely affect its business and financial condition[234]. - The company’s ability to stop unauthorized third parties from using its product candidates depends on valid and enforceable patents or trade secrets[230]. Funding and Financial Resources - The company may need substantial additional funding, which may not be available on acceptable terms, potentially delaying or eliminating research and development programs[175]. - Existing cash and cash equivalents as of December 31, 2020, are expected to fund operations into 2023, but changing circumstances may require seeking additional funds sooner[187]. - The company may need to transition from a research-focused entity to one capable of supporting commercial activities, which poses additional risks[187]. - If the company fails to raise additional capital when needed, it may have to delay or eliminate research and development programs or commercialization efforts[189]. Compliance and Legal Risks - The company must comply with Good Clinical Practice (GCP) regulations, and failure to do so could result in unreliable clinical data and delays in marketing approvals[222]. - The company is subject to ongoing changes in healthcare regulations that could impact the profitability of its products[273]. - The company faces substantial costs to ensure compliance with healthcare laws and regulations, and violations could lead to significant penalties, damages, and operational restructuring[283]. - The company is exposed to significant risks related to employee misconduct, which could lead to substantial fines or sanctions impacting business operations[285]. Market and Economic Conditions - The company expects that healthcare reform measures may lead to more rigorous coverage criteria and downward pressure on drug prices[275]. - Legislative changes may result in aggregate reductions in Medicare payments to providers of up to 2% per fiscal year through 2030[274]. - The company anticipates that pricing negotiations with governmental authorities outside the United States may delay revenue generation after marketing approval[275]. - The company may face significant costs and management diversion due to potential securities class action litigation following stock price declines, which is common in the pharmaceutical sector[309]. Employee and Operational Growth - The company anticipates significant growth in employee numbers and operational scope, particularly in drug development and clinical operations[294]. - The company may face challenges in managing growth due to limited financial resources and management experience[294]. - The company does not maintain "key person" insurance for its executives, which could impede its objectives if key personnel leave[294]. - General and administrative expenses are anticipated to rise as the company increases its headcount to support research and development activities[333].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-39069 Aprea Therapeutics, Inc. (Exact name of registrant as specified in its charter) Delaware 84- 2246769 (State or ...

Financial Performance - As of June 30, 2020, the company reported net losses of $16.4 million and $25.8 million for the three and six months ended June 30, 2020, respectively, with an accumulated deficit of $116.3 million [73][75]. - The net loss for Q2 2020 was $16.4 million, compared to a net loss of $5.3 million in Q2 2019, representing an increase in loss of $11.1 million [117]. - The net loss for the six months ended June 30, 2020, was $25.8 million, compared to a net loss of $8.7 million for the same period in 2019, reflecting an increase of $17.0 million [122]. - Cash used in operating activities for the six months ended June 30, 2020, was $17.2 million, an increase of $8.0 million from $9.2 million in the same period of 2019 [127]. - The total operating expenses for the six months ended June 30, 2020, were $26.4 million, compared to $10.3 million for the same period in 2019, reflecting an increase of $16.0 million [122]. Cash and Funding - The company had cash and cash equivalents of $112.9 million as of June 30, 2020, which is expected to fund operations into 2023 [79]. - Net cash provided by financing activities for the six months ended June 30, 2020, was $150,949, compared to $5.6 million for the same period in 2019 [129]. Research and Development - Research and development expenses for Q2 2020 were $10.7 million, up from $4.3 million in Q2 2019, an increase of $6.4 million [117]. - The increase in R&D expenses was primarily due to the advancement of the clinical product candidate APR-246, which is involved in pivotal Phase 3 clinical trials [117]. - Research and development expenses for the six months ended June 30, 2020, were $19.8 million, up $11.8 million from $8.0 million in the prior year, primarily due to advancements in the clinical product candidate APR-246 [123]. - The company expects substantial increases in expenses related to ongoing development activities and operating as a public company [131]. Clinical Trials and Product Development - The company has completed enrollment of 154 patients in its pivotal Phase 3 trial of eprenetapopt with azacitidine for frontline treatment of TP53 mutant MDS, expecting top-line data by year-end 2020 [68]. - The second product candidate, APR-548, is in preclinical development and has filed an IND with the FDA, but human clinical trials cannot commence until additional information is provided [70]. - The company has received orphan drug, fast track, and breakthrough therapy designations from the FDA for eprenetapopt in MDS [68]. - The company anticipates significant commercialization expenses if marketing approval is obtained for any product candidates [76]. General and Administrative Expenses - General and administrative expenses for the six months ended June 30, 2020, were $6.5 million, an increase of $4.2 million compared to $2.3 million for the same period in 2019 [124]. - The company expects to incur increased general and administrative expenses as it expands its headcount and operations related to research and development [95]. Foreign Exchange and Taxation - The company did not record any U.S. federal, state, or foreign income tax expense due to uncertainty in realizing benefits from net losses [100]. - A valuation allowance was provided for the full amount of net deferred tax assets, indicating that it is more likely than not that these assets will not be realized in the future [100]. - The company considers investments in foreign subsidiaries with a functional currency other than the U.S. dollar as long-term [144]. - The company does not believe it currently has any significant direct foreign exchange risk [144]. - The company has not used any derivative financial instruments to hedge exposure to foreign exchange risk [144]. COVID-19 Impact - The COVID-19 pandemic initially decreased patient screening and enrollment in clinical trials, but recent activity has returned to expected levels [81].