Aprea Therapeutics, Inc. Form 8-K Summary
Business Context and Reporting Period
Aprea Therapeutics, Inc. filed a Form 8-K dated August 15, 2022, reporting a Nasdaq continued-listing deficiency. The deficiency was based on stockholders’ equity reported in the company’s Form 10-Q for the quarter ended June 30, 2022. The filing was signed on August 19, 2022.
Key Financial Metrics and Capitalization
- Net stockholders’ deficit was approximately $35.8 million as of June 30, 2022.
- Nasdaq Listing Rule 5450(b)(1)(A) requires at least $10.0 million of stockholders’ equity for continued listing on the Nasdaq Global Select Market.
- The deficit included approximately $76.0 million of acquired in-process research and development expense related to the Atrin acquisition.
- The company’s approximately $68.8 million of Series A Convertible Preferred Stock was excluded from stockholders’ equity because it had not yet converted into common stock.
- The filing does not provide revenue, net loss, cash flow, cash balance, margins, debt, or liquidity figures.
Material Changes and Management Response
On August 15, 2022, Nasdaq notified the company that it did not satisfy the minimum stockholders’ equity requirement. Company stockholders had approved conversion of the Series A Convertible Preferred Stock into common stock at the July 28, 2022 annual meeting. Management believes that completing the conversion may resolve the deficiency.
The company intends to submit a compliance plan within 45 calendar days of Nasdaq’s notification and will evaluate available options to regain compliance. If Nasdaq accepts the plan, the company may receive up to 180 calendar days from August 15, 2022, to demonstrate compliance.
Outlook, Risks, and Unusual Items
- The Nasdaq notification had no immediate effect on the listing or trading of the company’s common stock, which continued to trade on the Nasdaq Global Select Market under the symbol APRE, subject to compliance with other listing requirements.
- The company may apply to transfer its listing to the Nasdaq Capital Market, subject to satisfying that market’s requirements.
- There is no assurance that the company will regain compliance with Nasdaq Listing Rule 5450(b)(1)(A) or maintain compliance with other Nasdaq listing standards.
- The $76.0 million acquired in-process research and development expense and the exclusion of the $68.8 million preferred stock balance were significant unusual factors affecting reported stockholders’ equity.
Investor Verification Points
- Verify completion and accounting treatment of the Series A Convertible Preferred Stock conversion.
- Review the company’s submitted Nasdaq compliance plan and Nasdaq’s response.
- Confirm whether the company regained the required stockholders’ equity level or transferred to the Nasdaq Capital Market.
- Assess the company’s cash position, financing needs, operating losses, and liquidity using the June 30, 2022 Form 10-Q, as those details are not included in this 8-K.