UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 


FORM 6-K



Report of Foreign Private
Issuer Pursuant to Rule
13a-16 or 15d-16 of the
Securities Exchange Act
of 1934
 
July 30, 2020
 
Commission File
Number: 001-38283
 


InflaRx N.V.
 


Winzerlaer Str. 2
07745 Jena,
Germany
(+49) 3641508180
(Address of principal executive offices)



Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
 
Form 20-F ☒          Form 40-F ☐
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b) (1): ☐
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b) (7): ☐
 


INCORPORATION BY REFERENCE
 
Exhibits 99.1 and 99.2 to this Report on Form 6-K shall be deemed to be incorporated by reference into (i) the registration statement on Form S-8 (Registration Number 333-221656) and (ii) the registration statement on Form F-3 (Registration Number 333-239759) of InflaRx N.V. and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.
 
Exhibit 99.3 to this Report on Form 6-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.
 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Jena, Germany, July 30, 2020.
 
 
INFLARX N.V.
   
 
By:
/s/ Niels Riedemann
 

Name: Niels Riedemann
 

Title:   Chief Executive Officer

3

EXHIBIT INDEX
 
Exhibit
Description of Exhibit
   
InflaRx N.V. Unaudited Condensed Consolidated Financial Statements as of and for the Three and Six Months Ended June 30, 2020
   
InflaRx N.V. Management’s Discussion and Analysis of Financial Condition and Results of Operations
   
InflaRx N.V. Press Release dated July 30, 2020

 
4


Exhibit 99.1

INFLARX N.V.

UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS – JUNE 30, 2020
 
These unaudited condensed financial statements are consolidated financial statements for the group consisting of InflaRx N.V. and its wholly-owned subsidiaries InflaRx GmbH, Jena, Germany, and InflaRx Pharmaceutical Inc., Ann Arbor, Michigan, United States (together, the “Group”). The financial statements are presented in Euro (€).
 
InflaRx N.V. is a company limited by shares, incorporated and domiciled in Amsterdam, The Netherlands.
Its registered office and principal place of business is in Germany, Jena, Winzerlaer Str. 2.
 
F-1

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JUNE 30, 2020
 
Unaudited Condensed Consolidated Financial Statements
 
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2020 and 2019
3
Unaudited Condensed Consolidated Statements of Financial Position as of June 30, 2020 and December 31, 2019
4
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the six months ended June 30, 2020 and 2019
5
Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019
6
Notes to the Unaudited Condensed Consolidated Financial Statements
7
 
1. Net Financial Result
7
 
2. Other non-financial assets
7
 
3. Financial assets and financial liabilities
8
 
4. Cash and cash equivalents
8
 
5. Share-based payments
9
 
6. Protective foundation
10
 
7. Summary of significant accounting policies
10
 
(a)
Reporting entity and Group’s structure
10
 
(b)
Basis of preparation
11
 

(c)
New and amended standards adopted by the Group
11
 

(d)
Significant events of the quarter and changes in circumstances
12
 
(e)
Significant events after the reporting date
12

F-2

InflaRx N.V. and subsidiaries
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss
for the three and six months ended June 30, 2020 and 2019

         
For the three months
ended June 30,
   
For the six months
ended June 30,
 
(in €, except for share data)
 
Note
   
2020
(unaudited)
   
2019
(unaudited)
   
2020
(unaudited)
   
2019
(unaudited)
 
                               
Operating Expenses
                             
Research and development expenses
         
(7,356,326
)
   
(12,497,222
)
   
(14,655,125
)
   
(20,192,372
)
General and administrative expenses
         
(2,326,895
)
   
(3,647,849
)
   
(4,891,698
)
   
(6,949,015
)
Total Operating Expenses
         
(9,683,221
)
   
(16,145,071
)
   
(19,546,822
)
   
(27,141,387
)
Other income
         
102,332
     
2,866
     
197,292
     
67,702
 
Other expenses
         
(3,450
)
   
(79,183
)
   
(9,170
)
   
(83,068
)
Operating Result
         
(9,584,339
)
   
(16,221,387
)
   
(19,358,701
)
   
(27,156,753
)
Finance income
         
609,444
     
1,338,755
     
2,268,436
     
2,497,960
 
Finance expenses
         
(1,057,937
)
   
(388,097
)
   
(1,175,964
)
   
(449,807
)
Net Financial Result
   
1
     
(448,493
)
   
950,659
     
1,092,472
     
2,048,153
 
Loss for the Period
           
(10,032,832
)
   
(15,270,729
)
   
(18,266,229
)
   
(25,108,600
)
                                         
Share Information
                                       
Weighted average number of shares outstanding
           
26,172,023
     
25,964,379
     
26,138,639
     
25,964,379
 
Loss per share (basic/diluted)
           
(0.38
)
   
(0.59
)
   
(0.70
)
   
(0.97
)
                                         
Loss for the Period
           
(10,032,832
)
   
(15,270,729
)
   
(18,266,229
)
   
(25,108,600
)
Other comprehensive income that may be reclassified to profit or loss in subsequent periods:
                                       
Exchange differences on translation of foreign currency
           
(1,452,973
)
   
(1,622,079
)
   
260,895
     
695,468
 
Total Comprehensive Loss
           
(11,485,805
)
   
(16,892,807
)
   
(18,005,334
)
   
(24,413,132
)

The accompanying notes are an integral part of these condensed consolidated financial statements.

[3]

InflaRx N.V. and subsidiaries
Unaudited Condensed Consolidated Statements of Financial Position
as of June 30, 2020 and December 31, 2019

(in €)
 
Note
   
June 30,
2020
(unaudited)
   
December 31,
2019
 
                   
ASSETS
                 
Non-current assets
                 
Property, plant and equipment
         
493,377
     
576,373
 
Right-of-use assets
         
716,871
     
836,924
 
Intangible assets
         
404,251
     
452,400
 
Other assets
   
2
     
419,424
     
452,217
 
Financial assets
   
3
     
272,627
     
272,614
 
Total non-current assets
           
2,306,550
     
2,590,528
 
Current assets
                       
Other assets
   
2
     
2,973,228
     
3,500,884
 
Financial assets
   
3
     
62,191,912
     
82,353,867
 
Cash and cash equivalents
   
4
     
36,398,578
     
33,131,280
 
Total current assets
           
101,563,718
     
118,986,031
 
TOTAL ASSETS
           
103,870,268
     
121,576,558
 
                         
EQUITY AND LIABILITIES
                       
Equity
                       
Issued capital
           
3,152,427
     
3,132,631
 
Share premium
           
211,483,756
     
211,006,606
 
Other capital reserves
           
26,627,185
     
25,142,213
 
Accumulated deficit
           
(152,628,234
)
   
(134,362,006
)
Other components of equity
           
2,488,124
     
2,227,228
 
Total equity
           
91,123,258
     
107,146,673
 
Non-current liabilities
                       
Lease liabilities
           
203,636
     
330,745
 
Other non-financial liabilities
           
37,644
     
39,013
 
Total non-current liabilities
           
241,280
     
369,758
 
Current liabilities
                       
Trade and other payables
   
3
     
10,630,462
     
12,413,662
 
Lease liabilities
           
524,034
     
515,203
 
Employee benefits
           
867,121
     
975,629
 
Social security, other taxes and other non-financial liabilities
           
448,113
     
105,634
 
Provisions
           
36,000
     
50,000
 
Total current liabilities
           
12,505,730
     
14,060,128
 
Total Liabilities
           
12,747,010
     
14,429,886
 
TOTAL EQUITY AND LIABILITIES
           
103,870,268
     
121,576,558
 

The accompanying notes are an integral part of these condensed consolidated financial statements.

[4]

InflaRx N.V. and subsidiaries
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity
for the six months ended June 30, 2020 and 2019

(in €, except for share data)
 
Note
   
Shares
outstanding
   
Issued
capital
   
Share
premium
   
Other
capital
reserves
   
Accumulated
deficit
   
Other com-
ponents of
equity
   
Total equity
 
                                                 
Balance as of January 1, 2020
         
26,105,255
     
3,132,631
     
211,006,606
     
25,142,213
     
(134,362,006
)
   
2,227,228
     
107,146,673
 
Loss for the period
         
     
     
     
     
(18,266,229
)
   
     
(18,266,229
)
Exchange differences on
translation of foreign currency
         
     
     
     
     
     
260,895
     
260,895
 
Total comprehensive loss
         
     
     
     
     
(18,266,229
)
   
260,895
     
(18,005,334
)
Contributions
                                                             
Equity-settled share-based payments
   
6
     
     
     
     
1,484,972
     
     
     
1,484,972
 
Share options exercised
   
6
     
164,974
     
19,797
     
477,149
     
     
     
     
496,946
 
Total Contributions
           
164,974
     
19,797
     
477,149
     
1,484,972
     
     
     
1,981,918
 
Balance as of June 30, 2020
           
26,270,229
     
3,152,427
     
211,483,756
     
26,627,185
     
(152,628,234
)
   
2,488,124
     
91,123,258
 
                                                                 
Balance as of January 1, 2019
           
25,964,379
     
3,115,725
     
211,021,835
     
18,310,003
     
(81,107,188
)
   
50,196
     
151,390,571
 
Loss for the period
           
     
     
     
     
(25,108,600
)
   
     
(25,108,600
)
Exchange differences
on translation of foreign currency
           
     
     
     
     
     
695,468
     
695,468
 
Total comprehensive loss
           
     
     
     
     
(25,108,600
)
   
695,468
     
(24,413,132
)
Contributions
                                                               
Equity-settled share-based pay-ments
   
6
     
     
     
     
3,889,767
     
     
     
3,889,767
 
Total Contributions
           
     
     
     
3,889,767
     
     
     
3,889,767
 
Balance as of June 30, 2019
           
25,964,379
     
3,115,725
     
211,021,835
     
22,199,770
     
(106,215,788
)
   
745,663
     
130,867,206
 

[5]

InflaRx N.V. and subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
for the six months ended June 30, 2020 and 2019
(in €)
 
Note
   
For the six
months ended
June 30, 2020
(unaudited)
   
For the six
months ended
June 30, 2019
(unaudited)
 
             
Operating activities
                 
Loss for the period
         
(18,266,229
)
   
(25,108,600
)
Adjustments for:
                     
Depreciation & amortization of property, plant, equipment, right-of-use assets and intangible assets
         
353,976
     
307,130
 
Net financial result
   
1
     
(1,092,472
)
   
(2,048,153
)
Share-based payment expense
   
6
     
1,484,972
     
3,889,767
 
Net foreign exchange differences
           
(789,528
)
   
(205,103
)
Changes in:
                       
Other assets
           
560,449
     
(2,063,491
)
Employee benefits
           
(122,411
)
   
(84,890
)
Social security and other current non-financial liabilities
           
341,012
     
(184,120
)
Trade and other payables
           
(1,783,200
)
   
5,513,355
 
Interest received
           
1,096,651
     
1,269,745
 
Interest paid
           
(5,455
)
   
(16,308
)
Net cash used in operating activities
           
(18,222,235
)
   
(18,730,669
)
Investing activities
                       
Purchase of intangible assets, laboratory and office equipment
           
(35,107
)
   
(503,881
)
Purchase of non-current other financial assets
           
     
(75,543
)
Disposal of non-current other financial assets
           
     
3,088
 
Purchase of current financial assets
           
(59,196,096
)
   
 
Proceeds from the maturity of financial assets
           
79,504,059
     
17,709,459
 
Net cash from investing activities
           
20,272,857
     
17,133,122
 
Financing activities
                       
Proceeds from exercise of share options
           
496,946
     
 
Repayment of lease liabilities
           
(183,970
)
   
(125,075
)
Net cash from/ (used in) financing activities
           
312,976
     
(125,075
)
Net (decrease)/increase in cash and cash equivalents
           
2,363,597
     
(1,722,622
)
Effect of exchange rate changes on cash and cash equivalents
           
903,700
     
399,266
 
Cash and cash equivalents at beginning of period
           
33,131,280
     
55,386,240
 
Cash and cash equivalents at end of period
   
4
     
36,398,578
     
54,062,885
 

The accompanying notes are an integral part of these condensed consolidated financial statements.

[6]

InflaRx N.V. and subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
 
1. Net Financial Result
 
The net financial result is comprised of the following items for the three and six months ended June 30:
 
   
For the three months ended
June 30,
   
For the six months ended
June 30,
 
(in €)
 
2020
(unaudited)
   
2019
(unaudited)
   
2020
(unaudited)
   
2019
(unaudited)
 
                         
Finance income
                       
Foreign exchange income
   
261,123
     
271,886
     
1,518,680
     
628,357
 
Interest income
   
348,321
     
1,066,869
     
749,756
     
1,869,603
 
Total
   
609,444
     
1,338,755
     
2,268,436
     
2,497,960
 
Finance expenses
                               
Foreign exchange expense
   
(854,826
)
   
(380,764
)
   
(970,706
)
   
(434,786
)
Other
   
(203,111
)
   
(7,333
)
   
(205,258
)
   
(15,021
)
Total
   
(1,057,937
)
   
(388,097
)
   
(1,175,964
)
   
(449,807
)
Net Financial Result
   
(448,493
)
   
950,659
     
1,092,472
     
2,048,153
 

Interest income results from marketable securities and short-term deposits in U.S. Dollars held by the Company and its subsidiary InflaRx GmbH.
 
Foreign exchange income and expense is mainly derived from the translation of the U.S. Dollar cash, cash equivalents and securities held by InflaRx GmbH.
 
Other Finance expenses contains €0.2 million adjusted expected credit loss on marketable securities.
 
2. Other non-financial assets
 
(in €)
 
As of
June 30, 2020
(unaudited)
   
As of December
31, 2019
 
             
Non-current other assets
           
Prepaid expense
   
419,424
     
452,217
 
Total
   
419,424
     
452,217
 
Current other assets
               
Current tax assets
   
1,225,552
     
1,134,968
 
Prepayments on research & development projects
   
770,795
     
698,891
 
Prepaid expense
   
596,839
     
1,467,936
 
Costs directly attributable to a future equity transaction
   
281,668
     
 
Other
   
98,374
     
199,088
 
Total
   
2,973,228
     
3,500,884
 

Prepaid expense mainly consists of prepaid insurance expense. Total prepaid expense as of June 30, 2020 decreased as compared to December 31, 2019, primarily due to amortization of prepayments of Directors and Officers insurance which is prepaid annually in the fourth quarter of the year.
 
Current tax assets as of June 30, 2020 include tax reclaims because of capital yields tax withheld. Such tax is withheld by our banks from securities interest payments, and the Company is reimbursed after filing a tax return.
 
[7]

3. Financial assets and financial liabilities
 
Set out below is an overview of financial assets and liabilities, other than cash and cash equivalents, held by the Group as of June 30, 2020 and December 31, 2019:
 
(in €)
 
As of
June 30, 2020
(unaudited)
   
As of December
31, 2019
 
             
Financial assets at amortized cost
           
Non-current financial assets
   
272,627
     
272,614
 
Current financial assets
   
62,191,912
     
82,353,867
 
Financial liabilities at amortized cost
               
Trade and other payables
   
10,630,462
     
12,413,662
 
Interest bearing loans and borrowings
               
Non-current lease liabilities
   
203,636
     
330,745
 
Current lease liabilities
   
524,034
     
513,834
 

As of June 30, the fair value of current and non-current financial assets (primarily quoted debt securities) amounted to €62,522 thousand (Level 1). The Group’s debt instruments at amortized cost consist solely of quoted securities that are graded in the top investment category (AAA) by credit rating agencies such as S&P Global and, therefore, are considered low credit risk investments.
 
4. Cash and cash equivalents
 
(in €)
 
As of
June 30, 2020
(unaudited)
   
As of December
31, 2019
 
             
Short-term deposits
           
Deposits held in U.S. Dollars
   
22,506,614
     
27,803,153
 
Deposits held in Euro
   
9,900,000
     
 
Total
   
32,406,614
     
27,803,153
 
Cash at banks
               
Cash held in Euro
   
2,164,827
     
1,211,478
 
Cash held in U.S. Dollars
   
1,827,136
     
4,116,649
 
Total
   
3,991,963
     
5,328,127
 
Total cash and cash equivalents
   
36,398,578
     
33,131,280
 

[8]

5. Share-based payments
 
1.          Equity settled share-based payment arrangements
 
During its historical financing rounds, InflaRx GmbH established equity-settled share-based payment programs. Those InflaRx GmbH options were converted into options for common shares of InflaRx N.V. in November 2017:
 
Number of share options
 
2020
   
2019
 
Outstanding as of January 1,
   
148,433
     
533,820
 
Exercised during the six months ended June 30
   
     
 
Outstanding as of June 30,
   
148,433
     
533,820
 
thereof vested
   
148,433
     
533,820
 

Under the terms and conditions of the share option plan 2016, InflaRx GmbH granted rights to subscribe for InflaRx GmbH’s common shares to directors, senior management, and key employees. Those InflaRx GmbH options were converted into options for common shares of InflaRx N.V. in November 2017:
 
Number of share options
 
2020
   
2019
 
Outstanding as of January 1,
   
1,181,484
     
1,181,484
 
Exercised during the six months ended June 30
   
86,632
     
 
Outstanding as of June 30,
   
1,094,852
     
1,181,484
 
thereof vested
   
1,094,852
     
1,181,484
 

In conjunction with the closing of its initial public offering, InflaRx N.V. established a new incentive plan (the “2017 Long-Term Incentive Plan”). The initial maximum number of common shares available for issuance under equity incentive awards granted pursuant to the 2017 Long-Term Incentive Plan equals 2,341,097 common shares.
 
Number of share options
 
2020
   
2019
 
Outstanding as of January 1,
   
2,181,105
     
2,051,009
 
Granted during the six months ended June 30
   
     
54,450
 
Exercised during the six months ended June 30
   
78,342
     
 
Forfeited during the six months ended June 30
   
7,686
     
 
Outstanding as of June 30,
   
2,095,077
     
2,105,459
 
thereof vested
   
1,557,157
     
994,879
 

The number of share options granted during the six months ended June 30, 2019 under the plan was as follows, whereas in the six months ended June 30, 2020 there were no new grants:
 
Share options granted
 
Number
   
Fair
value
per
option
   
FX rate
as of
grant
date
   
Fair
value
per
option
   
Share price at
grant date /
Exercise price
   
Expected
volatility
   
Expected
life
(midpoint
based)
   
Risk-free rate
(interpolated,
U.S. sovereign
strips curve)
 
2019
                                               
January 1
   
   
$
14.45
     
0.88
   
12.69
   
$
26.02
*
   
0.65
     
4.8
     
3.00
%
February 4
   
18,450
   
$
18.17
     
0.87
   
15.87
   
$
32.63
*
   
0.65
     
4.9
     
2.60
%
May 14
   
36,000
   
$
22.54
     
0.89
   
20.08
   
$
41.39
*
   
0.65
     
4.7
     
2.30
%
     
54,450
                                                         

* On July 3, 2019, the board approved an amendment of the 2016 Option Plan and the 2017 Long-Term Incentive Plan. Following the amendment, the strike price of all vested and unvested options, other than those held by persons who were not employees or directors at the time of the amendment, was reduced to $3.35 per share.
Expected dividends are nil for all share options listed above.
None of the options granted in the six months ended June 30, 2019 were granted to members of the executive management or Board of Directors.

[9]

On January 1, 2021 and on January 1 of each calendar year thereafter, an additional number of shares equal to 3% of the total outstanding common shares on December 31 of the immediately preceding year (or any lower number of shares as determined by the board of directors) will become available for issuance under equity incentive awards granted pursuant to the 2017 Long-Term Incentive Plan.
 
2.          Share options exercised
 
In the six months ended June 30, 2020, 164,974 shares were issued upon the exercise of share options, resulting in proceeds to the Company in the amount of €497 thousand. 86,632 share options exercised were granted under the 2016 Share Option Plan and 78,342 share options exercised were granted under the 2017 Long-Term Incentive Plan. In the six months ended June 30, 2019, no share options were exercised.
 
3.          Share-based payment expense recognized
 
For the three and six months ended June 30, 2020, the Company has recognized €584 thousand and €1,485 thousand, respectively, (2019: € 1,792 thousand, €3,890 thousand) of share-based payment expense in the statements of comprehensive loss.
 
None of the share-based payments awards were dilutive in determining earnings per share due to the Group’s loss position.
 
6. Protective foundation
 
According to the articles of association of the Company, up to 55,000,000 common shares and up to 55,000,000 preferred shares with a nominal value of €0.12 per share are authorized to be issued. All shares are registered shares. No share certificates shall be issued.
 
In order to deter acquisition bids, the Company`s general meeting of shareholders approved the right of an in-dependent foundation under Dutch law, or protective foundation, to exercise a call option pursuant to the call option agreement, upon which preferred shares will be issued by the Company to the protective foundation of up to 100% of the Company’s issued capital held by others than the protective foundation, minus one share. The protective foundation is expected to enter into a finance arrangement with a bank or, subject to applicable restrictions under Dutch law, the protective foundation may request us to provide, or cause the Company’s subsidiaries to provide, sufficient funding to the protective foundation to enable it to satisfy its payment obligation under the call option agreement.
 
These preferred shares will have both a liquidation and dividend preference over the Company`s common shares and will accrue cash dividends at a pre-determined rate. The protective foundation would be expected to re-quire us to cancel its preferred shares once the perceived threat to the Company and its stake-holders has been removed or sufficiently mitigated or neutralized. We are of the opinion that the call option does not represent a significant fair value based on a Level 3 valuation, since the preference shares are restricted in use and can be can-celled by us as stated above.
 
In the three and six months ended June 30, 2020, the Company expensed €13 thousand and €30 thousand, respectively, (2019: €20 thousand, €35 thousand) of ongoing costs to reimburse expenses incurred by the protective foundation.
 
7. Summary of significant accounting policies
 

(a)
Reporting entity and Group’s structure
 
InflaRx N.V. is a Dutch public company with limited liability (naamloze vennootschap) with its corporate seat in Amsterdam, The Netherlands, and is registered in the Commercial Register of The Netherlands Chamber of Commerce Business Register under CCI number 68904312. The Company’s registered office is at Winzerlaer Straße 2 in 07745 Jena, Germany. Since November 10, 2017, InflaRx N.V.’s common shares have been listed on The NASDAQ Global Select Market under the symbol IFRX.
 
[10]

InflaRx is a clinical-stage biopharmaceutical Group focused on applying its proprietary anti-C5a technology to discover and develop first-in-class, potent and specific inhibitors of the complement activation factor known as C5a.
 
These consolidated financial statements of InflaRx comprise the Company and its wholly-owned subsidiaries InflaRx GmbH, Jena, Germany and InflaRx Pharmaceutical Inc., Ann Arbor, Michigan, United States (together referred to as the “Group”).
 
InflaRx GmbH is a clinical-stage biopharmaceutical company founded in 2008. In 2017, InflaRx N.V. became the sole shareholder of InflaRx GmbH through the contribution of the subsidiary’s shares to InflaRx N.V. by its existing shareholders in exchange of new shares issued by InflaRx N.V.
 

(b)
Basis of preparation
 
These interim condensed consolidated financial statements for the three- and six-month reporting periods ended June 30, 2020 and 2019 have been prepared in accordance with IAS 34 Interim Financial Reporting. These condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements. Accordingly, this report is to be read in conjunction with the financial statements in our annual report for the year ended December 31, 2019 on Form 20-F.
 
The interim condensed consolidated financial statements were authorized for issue by the board of directors on July 29, 2020.
 
The financial statements are presented in Euro (€). Euro is the functional currency of InflaRx GmbH. The functional currency of InflaRx N.V. and InflaRx Pharmaceutical Inc. is U.S. Dollars. All financial information presented in Euro has been rounded. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that precede them or may deviate from other tables.
 
The accounting policies adopted are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended December 31, 2019, except for the adoption of new standards effective as of January 1, 2020 as set out below. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
 
For better clarity, the Group presented right-of-use assets separately from property, plant and equipment in the unaudited condensed consolidated statements of financial position as of June 30, 2020 and reclassified comparatives as of December 31, 2019 accordingly. The Group also renamed some line items in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss, Financial Position and Cash Flows to better reflect their substance.
 

(c)
New and amended standards adopted by the Group
 
The below listed amendments and interpretations apply for the first time in 2020, but do not have an impact on the condensed consolidated financial statements of the Group:
 

Conceptual Framework Amendments, References to the Conceptual Framework in IFRS Standards (IFRS 2 Share-Based Payment,  IFRS 3 Business Combinations, IAS 1 Presentation of Financial Statements, IAS 8 Accounting Policies, IAS 34 Interim Financial Reporting, IAS 37 Provisions, Contingent Liabilities and Contingent Assets, IFRIC 12 Service Concession Arrangements, IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments IFRIC 22 Foreign Currency Transactions and Advance Consideration, SIC 32 Intangible Assets — Web Site Costs,), effective as of January 1, 2020

IFRS 3 Business Combinations, Definition of a business, effective January 1, 2020

IAS 39 Financial Instruments: Recognition and Measurement, IFRS 7 Financial Instruments Disclosures, IFRS 9 Financial Instruments, Interest Rate Benchmark Reform, effective January 1, 2020

IAS 1 Presentation of Financial Statements, IAS 8 Accounting Policies, Definition of Material, as of January 1, 2020
 
[11]


(d)
Significant events of the quarter and changes in circumstances
 
Phase 3 development program for the use of IFX-1 in the treatment of hidradenitis suppurativa
 
In June 2020, the Company completed an end of Phase II meeting with the U.S. Food and Drug Administration (the “FDA”) to discuss a Phase III development program for the use of IFX-1 in the treatment of hidradenitis suppurativa (“HS”). During the course of the meeting, the FDA agreed to key proposals to support a biologics license application (BLA) submission, including aspects of the Phase III trial design, IFX-1 dosing, target study population, and the nonclinical and clinical pharmacology packages. As part of the Phase III design, the Company proposed using the International Hidradenitis Suppurativa Severity Score (“IHS4”) as the primary efficacy endpoint. While the FDA did not agree that the IHS4 score is fit for purpose as a primary efficacy endpoint tool to support labeling, the FDA recommended that the Company obtain HS patient input to help determine the validity of the IHS4 score. The FDA also indicated a reasonable primary endpoint would be the Hidradenitis Suppurativa Clinical Response Score 50 (“HiSCR”). The Company is now assessing different strategies for a potential pathway to regulatory approval for IFX-1 in the United States and plans to engage with the FDA on next steps. See (e) Significant events after the reporting date below.
 
Effect of COVID-19 Pandemic
 
The COVID-19 pandemic, which began in December 2019 has spread worldwide and continues to cause many governments to maintain measures to slow the spread of the outbreak through quarantines, travel restrictions, closure of borders and requiring maintenance of physical distance between individuals.
 
By the end of June 2020, the company was able to resume full operations. During the second quarter of 2020 employees were able to work from their home offices or return to their work at the offices. Our service providers also resumed full operations, and the recruitment of patients and new sites likewise continued in the second quarter.
 
The full extent to which the global COVID-19 pandemic may impact our business will depend on future developments, which are highly uncertain and cannot be predicted at this time. As such, we cannot presently predict the scope and severity of any potential business shutdowns or disruptions, the impacts on our business, financing or clinical trial activities or on the healthcare system and the global economy.
 

(e)
Significant events after the reporting date
 
Advice from the European Medicines Agency

The Company requested scientific advice from the European Medicines Agency about the European pathway for regulatory approval and received feedback in July 2020. Although the EMA noted certain considerations regarding the Company’s proposal, the EMA acknowledged that HiSCR response does not account for the clinical relevance of a reduction in draining fistulas and the effort to construct a new endpoint that better captures these changes was endorsed in principle. According to the EMA, although HiSCR was used as an endpoint in previous studies, IHS4 could be an appropriate tool to evaluate efficacy of a novel compound in HS. The Company is working diligently to address the additional feedback received and analyzing the strategy for its Phase III development in HS.

At the Market Transaction - Offering of Common Shares
 
On July 7, 2020, the Company filed with the United States Securities and Exchange Commission (SEC) a Form F-3 with respect to the offer and sale of up to $200 million of securities of the Company (Shelf Registration Statement). Furthermore, the board authorized the Company to file with the SEC a supplement to the prospectus (Prospectus Supplement) filed with the Shelf Registration Statement describing the offering of common shares with an aggregate offering price of up to $50 million.
 
The Company implemented an at-the-market program providing for the sales over time. The offering is conducted under the Company’s effective Registration Statement pursuant to the Prospectus Supplement. On July 20, 2020, the Company entered into a Sales Agreement with SVB Leerink LLC. The total value authorized under the Sales Agreement is up to $50.0 million of the Company`s common shares. As of July 28, 2020, the Company had issued 1,800,000 common shares resulting in €10.1 million in net proceeds to the Company. Following these issuances, the remaining value authorized for sale under the sales agreement is $39.6 million.
 
Changes to the Board and Management
 
On July 16, 2020, Jens Holstein resigned as member of the Board and Audit Committee.
 
On July 29, 2020, Mark Kübler was elected to the Audit Committee.
 
Arnd Christ has notified the Company of his decision to resign as Chief Financial Officer. Mr. Christ will continue to serve as Chief Financial Officer during the notice period under his employment agreement with the Company. Jason Marks has notified the Company of his decision to resign as Chief Legal Officer and General Counsel, effective July 31, 2020.
 
[12]

Modification of the 2017 Long-Term Incentive Plan
 
The annual general meeting on July 16, 2020, approved an amendment to the 2017 Long-Term Incentive Plan (LTIP) with effect from January 1, 2021:
 
a)
increasing the maximum annual number of ordinary shares in the Company’s capital available for issuance under the LTIP, starting on January 1, 2021, to 4% (from 3%) of the Company’s outstanding ordinary shares (determined as of December 31 of the immediately preceding year); and
 
b)
removing certain restrictions from the LTIP, which will allow the committee administering the LTIP and the Board to (i) lower the exercise price per share of any options and/or share appreciation rights issued under the LTIP or take any other action treated as a ‘repricing’ of an award and (ii) cancel any option and/or share appreciation rights in exchange for cash or another award granted under the LTIP, in either case, without prior approval of the Company’s shareholders.

The Company intends to file a Registration Statement on Form S-8 to register 6,800,000 additional common shares to be distributed under the Plan.
 
[13]


Exhibit 99.2
 
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
This management’s discussion and analysis is designed to provide you with a narrative explanation of our financial condition and results of operations. We recommend that you read this discussion together with our unaudited condensed consolidated financial statements, including the notes thereto, as of and for the three- and six-month periods ended June 30, 2020 and 2019 included as Exhibit 99.1 to the Report on Form 6-K to which this discussion is attached as Exhibit 99.2. We also recommend that you read our management’s discussion and analysis and our audited consolidated financial statements for fiscal year 2019, and the notes thereto, which appear in our Annual Report on Form 20-F for the year ended December 31, 2019 (the “Annual Report”) filed with the U.S. Securities and Exchange Commission (the “SEC”). In addition, we recommend that you read any public announcements made by InflaRx N.V.
 
The following discussion is based on our financial information prepared in accordance with IFRS as issued by the IASB, which may differ in material respects from generally accepted accounting principles in the United States and other jurisdictions. We maintain our books and records in euros. Unless otherwise indicated, all references to currency amounts in this discussion are in euros. We have made rounding adjustments to some of the figures included in this discussion and analysis. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that precede them.
 
The following discussion includes forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those described under “Risk factors” in the Annual Report.
 
Unless otherwise indicated or the context otherwise requires, all references to “InflaRx” or the “company,” “we,” “our,” “ours,” “us” or similar terms refer to InflaRx N.V. and its subsidiaries InflaRx GmbH and InflaRx Pharmaceuticals, Inc.
 
Overview
 
We are a clinical-stage biopharmaceutical company focused on applying our proprietary anti-C5a technology to discover and develop first-in-class, potent and specific inhibitors of the complement activation factor known as C5a. C5a is a powerful inflammatory mediator involved in the progression of a wide variety of autoimmune and other inflammatory diseases. Our lead product candidate, IFX-1, is a novel intravenously delivered first-in-class anti-C5a monoclonal antibody that selectively binds to free C5a and has demonstrated disease-modifying clinical activity and tolerability in multiple clinical settings.
 
We have been developing IFX-1 for the treatment of HS, a chronic debilitating systemic inflammatory skin disease. In June 2019, we announced that our Phase IIb clinical trial of IFX-1 in HS did not meet its primary endpoint. On July 18, 2019, we published a post-hoc analysis showing multiple signals of efficacy for the IFX-1 high dose group compared to the placebo group within the initial phase of the SHINE study. On November 6, 2019, we reported additional data from the open label extension (OLE) phase of the international SHINE Phase IIb study. In June 2020, we completed an end of Phase II meeting with the FDA to discuss a Phase III development program for the use of IFX-1 in the treatment of hidradenitis suppurativa (HS).
 
We are also developing IFX-1 in severe COVID-19 induced pneumonia with an adaptive randomized open label multicenter trial in Europe. On June 17, 2020, we announced interim results from the first 30 patients treated in the adaptive randomized Phase II/III trial in patients with severe COVID-19 induced pneumonia.
 
We intend to develop IFX-1 and other proprietary antibodies and molecules, and evaluate other technologies as well, to address a wide array of complement-mediated and other diseases with significant unmet needs, including Anca associated vasculitis, or AAV, a rare, life-threatening autoimmune disease, Pyoderma Gangraenosum, or PG, a rare inflammatory skin disorder and indications in oncology and potentially other indications and diseases.
 
II-1

Since our inception in December 2007, we have devoted substantially all of our resources to establishing our company, raising capital, developing our proprietary anti-C5a technology, identifying and testing potential product candidates and conducting clinical trials of our lead product candidate, IFX-1. To date, we have no products, have not generated any revenue and have financed our operations primarily through public offerings, private placements and other income from various grants. As of June 30, 2020, we had raised an aggregate of approximately €206.75 million, comprised of €49.2 million in net proceeds from a follow-on public offering in May 2018, €81.8 million in net proceeds from our initial public offering, €74.0 million in gross proceeds from private placements of our securities and €1.75 million in payments in connection with various grants. With the board decision on July 7, 2020, the board authorized the Company to file with the United States Securities and Exchange Commission (SEC) a Form F-3 with respect to the offer and sale of up to $200,000,000 of securities of the Company (Shelf Registration Statement). Furthermore, the board authorized the Company to file with the SEC a supplement to the prospectus (Prospectus Supplement) filed with the Shelf Registration Statement describing the offering of common shares with an aggregate offering price of up to $50,000,000. The Company has implemented an at-the-market program providing for the sales over time of up to $50,000,000 of its ordinary shares. As of June 30, 2020, we had cash and cash equivalents of €36.4 million and financial assets of €62.5 million. As of June 30, 2020, we had an accumulated deficit of €152.6 million. We have incurred significant net operating losses in every year since our inception and expect to continue to incur net operating losses for the foreseeable future. Our net losses may fluctuate significantly from quarter to quarter and year to year.
 
We anticipate that our expenses might increase if and as we:
 

continue to develop and conduct clinical trials with respect to our lead product candidate, IFX-1, including in connection with the evaluation of any additional clinical development in HS, in connection with the ongoing Phase II clinical trials in AAV and PG as well as planned Phase II studies in oncology and a Phase III trial in severe COVID-19 induced pneumonia;
 

initiate and continue research, preclinical and clinical development efforts for any future product candidates, including IFX-2;
 

actively seek to identify additional research programs and additional product candidates;
 

seek regulatory and marketing approvals for our product candidates that successfully complete clinical trials, if any;
 

establish sales, marketing, distribution and other commercial infrastructure in the future to commercialize various products for which we may obtain marketing approval, if any;
 

require the manufacture of larger quantities of product candidates for clinical development and, potentially, commercialization;
 

collaborate with strategic partners to optimize the manufacturing process for IFX-1 and IFX-2;
 

maintain, expand and protect our intellectual property portfolio;
 

hire and retain additional personnel, such as clinical, quality control and scientific personnel; and
 

add operational, financial and management information systems and personnel, including personnel to support our product development and help us comply with our obligations as a public company.
 
Our expenses in any quarter may not be indicative of our expenses in future periods, and in particular we expect that our expenses, and therefore our net losses, could vary depending on the going forward strategy relating to the clinical development of IFX-1 in HS, AAV, PG, COVID-19 and additional indications as well as any potential addition of a technology platform or asset.
 
We do not expect to generate revenue from product sales unless and until we successfully complete development and obtain regulatory approval for a product candidate, which we expect will take a number of years and is subject to significant uncertainty. If we obtain regulatory approval for any product candidate, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, we may seek to further fund our operations through public or private equity or debt financings or other sources, including strategic collaborations. We may, however, be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements as and when needed, would have a negative impact on our financial condition and our ability to develop IFX-1 or any additional product candidates.
 
II-2

Recent Developments
 
In June 2020, we completed an end of Phase II meeting with the FDA to discuss a Phase III development program for the use of IFX-1 in the treatment of hidradenitis suppurativa (HS). During the course of the meeting, the FDA agreed to key proposals to support a BLA submission, including aspects of the Phase III trial design, IFX-1 dosing, target study population, and the nonclinical and clinical pharmacology packages. As part of the Phase III design, the company proposed using the International Hidradenitis Suppurativa Severity Score (IHS4) as the primary efficacy endpoint. While the FDA did not agree that the IHS4 score is fit for purpose as a primary efficacy endpoint, the FDA recommended that the company obtain HS patient input to help determine the validity of the IHS4 score. The FDA also indicated a reasonable primary endpoint would be the Hidradenitis Suppurativa Clinical Response Score 50 (HiSCR). InflaRx is now assessing different strategies for a potential pathway to regulatory approval for IFX-1 in the United States and plans to engage with the FDA on next steps. Additionally, the Company has requested scientific advice from the EMA about the European pathway for regulatory approval and received feedback in July 2020. Although the EMA noted certain considerations regarding the Company’s proposal, the EMA acknowledged that HiSCR response does not account for the clinical relevance of a reduction in draining fistulas to patients and in consequence the effort to construct a new endpoint that better captures these changes was endorsed in principle. According to the EMA, although HiSCR was used as an endpoint in previous studies in the development program, the IHS4 score could be an appropriate tool to evaluate efficacy of a novel compound in HS. The Company is working diligently to address the additional feedback received and analyzing the strategy for its Phase III development in HS.

On June 17, 2020, the Company announced interim results from the first 30 patients treated in the adaptive randomized Phase II/III trial in patients with severe COVID-19 induced pneumonia. The Phase II part of the study evaluated IFX-1 treatment plus best supportive care compared to best supportive care alone for up to 28 days. Relative change in the oxygenation index at day 5 showed no differences between treatment groups. However, IFX- 1 treatment was associated with a lower 28-day all-cause mortality when compared to the best supportive care group, along with trends in disease improvement, as evidenced by fewer patients experiencing renal impairment assessed by estimated glomerular filtration rates, more patients showing reversal of blood lymphocytopenia and a greater lowering of lactate dehydrogenase concentrations. In IFX-1-treated patients, pulmonary embolisms reported as serious adverse events were lower compared to the best supportive care arm. Also, a temporary increase of D-dimer levels, as potential expression of induction of blood clot lysis, was detected in the first days after initiation of IFX-1 treatment. The data have been submitted for review to a scientific journal. The company now plans a Phase III development for IFX-1 in patients with severe COVID-19 induced pneumonia.

The Company implemented an at-the-market program providing for the sales over time. The offering is conducted under the Company’s effective Registration Statement pursuant to the Prospectus Supplement. On July 20, 2020, the Company entered into a Sales Agreement with SVB Leerink LLC. The total value authorized under the Sales Agreement is up to $50.0 million of the Company`s common shares. As of July 28, 2020, the Company had issued 1,800,000 common shares resulting in €10.1 million in net proceeds to the Company. Following these issuances, the remaining value authorized for sale under the sales agreement is $39.6 million.

The Company also intends to file a Registration Statement on Form S-8 to register 6,800,000 additional common shares to be distributed under the Plan.

Research and Development Expenses
 
Research and development expenses have consisted principally of:
 

expenses incurred under agreements with contract research organizations, or CROs, contract manufacturing organizations, or CMOs, consultants and independent contractors that conduct research and development, preclinical and clinical activities on our behalf;
 

employee-related expenses, including salaries, benefits and share-based compensation expense based upon employees’ role within the organization; and
 

professional legal fees related to the protection and maintenance of our intellectual property.
 
We anticipate that our total research and development expenses in 2020 might increase compared to our expenses in 2019. Such increased research and development expenses primarily relate to the following key programs:
 

IFX-1. We expect our expenses associated with IFX-1 will increase in the remainder of 2020 as we will initiate a Phase III study in COVID-19 and evaluate initiating a Phase III study in HS, conduct our Phase II clinical program of IFX-1 in patients with AAV and our Phase II clinical trial program in patients with PG and plan to initiate a Phase II clinical program in cancer and potentially additional indications. In addition, we are also incurring expenses related to the manufacturing of clinical trial material and investigating commercial scale production options.
 
II-3


IFX-2.  We are continuing preclinical development of IFX-2, expenses for which mainly consist of salaries, costs for preclinical testing conducted by CROs and costs for the production of preclinical material.
 

Other development programs. Our other research and development expenses relate to our preclinical studies of other product candidates and discovery activities, expenses for which mainly consist of salaries, costs for production of preclinical compounds and costs paid to CROs.
 
In 2019, we incurred €44.6 million of research and development expense. For the six months ended June 30, 2020 and 2019, we incurred research and development expenses of €14.7 million and €20.2 million, respectively. The principal driver of the decrease in our research and development expenses was primarily due to no contribution of expense in the period from the Phase IIb clinical development of IFX-1 in HS since this study was completed in 2019 offset by the COVID-19 trial expenses. Our research and development expenses may vary substantially from period to period based on the timing of our research and development activities, including due to timing of clinical trial initiation and potential enrollment. Research and development expenses are expected to increase as we advance the clinical development of IFX-1 and IFX-2 and further advance the research and development of our preclinical product candidates.
 
We expense research and development costs as incurred. We recognize costs for certain development activities, such as preclinical studies and clinical trials, based on an evaluation of the progress to completion of specific tasks. We use information provided to us by our vendors such as patient enrollment or clinical site activations for services received and efforts expended. Research and development activities are central to our business model. We anticipate that our research and development expenses might increase for the foreseeable future as our current development programs progress and new programs are added.
 
The successful development of our product candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing and estimated costs of the efforts that will be necessary to complete the development of, or the period, if any, in which material net cash inflows may commence from, any of our product candidates. For a discussion of our other key financial statement line items, please see “Management’s discussion and analysis of financial condition and results of operations—Financial operations overview” in the Annual Report.
 
II-4

Results of Operations
 
The numbers below were derived from our condensed consolidated financial statements included elsewhere herein. The discussion below should be read along with these condensed consolidated financial statements, and it is qualified in its entirety by reference to them.
 
Comparison of the Three Months Ended June 30, 2020 and 2019
 
   
Three Months Ended June 30,
 
(in €)
 
2020
   
2019
   
Change
 
Operating Expenses
                 
Research and development expenses
   
(7,356,326
)
   
(12,497,222
)
   
(5,140,896
)
General and administrative expenses
   
(2,326,895
)
   
(3,647,849
)
   
(1,320,954
)
Total Operating Expenses
   
(9,683,221
)
   
(16,145,071
)
   
(6,461,850
)
Other income
   
102,332
     
2,866
     
(99,466
)
Other expense
   
(3,450
)
   
(79,183
)
   
(75,733
)
Operating Result
   
(9,584,339
)
   
(16,221,387
)
   
(6,637,048
)
Finance income
   
609,444
     
1,338,755
     
729,311
 
Finance expenses
   
(1,057,937
)
   
(388,097
)
   
669,840
 
Net Financial Result
   
(448,493
)
   
950,659
     
1,399,152
 
Loss for the Period
   
(10,032,832
)
   
(15,270,729
)
   
(5,237,897
)
Exchange differences on translation of foreign currency
   
(1,452,973
)
   
(1,622,079
)
   
(169,106
)
Total Comprehensive Loss
   
(11,485,805
)
   
(16,892,807
)
   
(5,407,002
)

Research and Development Expenses
 
   
Three Months Ended June 30,
 
(in €)
 
2020
   
2019
   
Change
 
Third-party expenses
   
5,990,439
     
10,398,711
     
(4,408,272
)
Personnel expenses
   
1,124,546
     
1,724,813
     
(600,267
)
Legal and consulting fees
   
161,964
     
90,871
     
71,093
 
Other expenses
   
79,377
     
282,827
     
(203,450
)
Total Research and development expenses
   
7,356,326
     
12,497,222
     
(5,140,896
)

We use our employee and infrastructure resources across multiple research and development programs directed toward developing IFX-1 and IFX-2. We manage certain activities such as contract research and manufacturing of IFX-1 and our discovery programs through our third-party vendors.
 
Research and development expenses incurred for the three months ended June 30, 2020 decreased over the corresponding period in 2019 by €5.1 million. This decline was primarily due to lower contribution of expense in the period from the Phase IIb clinical development of IFX-1 in HS since this study was completed in 2019, offset by the COVID-19 trial expenses. These two factors led to a net decline of €3.1 million in third-party expenses. Furthermore third-party manufacturing expenses also declined by €1.2 million. Additionally, equity-settled share-based compensation recognized in personnel expenses decreased by €0.6 million.
 
II-5

General and Administrative Expenses
 
   
Three Months Ended June 30,
 
(in €)
 
2020
   
2019
   
Change
 
Personnel expenses
   
1,298,990
     
1,894,581
     
(595,591
)
Legal, consulting and audit fees
   
313,777
     
954,841
     
(641,064
)
Other expenses
   
714,128
     
798,427
     
(84,299
)
Total General and administrative expense
   
2,326,895
     
3,647,849
     
(1,320,954
)

General and administrative expenses decreased by €1.3 million to €2.3 million for the three months ended June 30, 2020, from €3.6 million for the three months ended June 30, 2019. This decrease is attributable to lower expenses from equity-settled share-based compensation recognized in personnel expenses (€0.7 million). Additionally, legal, consulting and other expenses decreased by €0.7 million to €1.0 million for the three months ended June 30, 2020, from €1.8 million for the three months ended June 30, 2019. In 2019, consulting costs were higher due to a one-time strategic project.
 
Net financial result
 
   
Three Months Ended June 30,
 
(in €)
 
2020
   
2019
   
Change
 
Finance income
                 
Foreign exchange gains
   
261,123
     
271,886
     
(10,763
)
Interest income
   
348,321
     
1,066,869
     
(718,548
)
Total
   
609,444
     
1,338,755
     
(729,311
)
Finance expenses
                       
Foreign exchange losses
   
(854,826
)
   
(380,764
)
   
474,062
 
Other
   
(203,111
)
   
(7,333
)
   
195,778
 
Total
   
(1,057,937
)
   
(388,097
)
   
669,840
 
Net Financial Result
   
(448,493
)
   
950,659
     
(1,399,152
)

Net financial result decreased by €1.4 million to €(0.4) million for the three months ended June 30, 2020, from €1.0 million for the three months ended June 30, 2019. This decrease is mainly attributable to (a) higher foreign exchange losses, which increased by €0.5 million and (b) interest on marketable securities, which decreased by €0.7 million, due to declining yield curves since the begin of the global COVID-19 pandemic.
 
II-6

Comparison of the Six Months Ended June 30, 2020 and 2019
 
   
Six Months Ended June 30,
 
(in €)
 
2020
   
2019
   
Change
 
Operating Expenses
                 
Research and development expenses
   
(14,655,125
)
   
(20,192,372
)
   
(5,537,247
)
General and administrative expenses
   
(4,891,698
)
   
(6,949,015
)
   
(2,057,317
)
Total Operating Expenses
   
(19,546,822
)
   
(27,141,387
)
   
(7,594,565
)
Other income
   
197,292
     
67,702
     
(129,590
)
Other expense
   
(9,170
)
   
(83,068
)
   
(73,898
)
Operating Result
   
(19,358,701
)
   
(27,156,753
)
   
(7,798,052
)
Finance income
   
2,268,436
     
2,497,960
     
229,524
 
Finance expenses
   
(1,175,964
)
   
(449,807
)
   
726,157
 
Net Financial Result
   
1,092,472
     
2,048,153
     
955,681
 
Loss for the Period
   
(18,266,229
)
   
(25,108,600
)
   
(6,842,371
)
Exchange differences on translation of foreign currency
   
260,895
     
695,468
     
434,573
 
Total Comprehensive Loss
   
(18,005,334
)
   
(24,413,132
)
   
(6,407,798
)

Research and Development Expenses
 
   
Six Months Ended June 30,
 
(in €)
 
2020
   
2019
   
Change
 
Third-party expenses
   
11,539,430
     
16,037,160
     
(4,497,730
)
Personnel expenses
   
2,307,547
     
3,296,479
     
(988,932
)
Legal and consulting fees
   
593,061
     
331,251
     
261,810
 
Other expenses
   
215,086
     
527,483
     
(312,397
)
Total Research and development expenses
   
14,655,125
     
20,192,372
     
(5,537,247
)

We use our employee and infrastructure resources across multiple research and development programs directed toward developing IFX-1 and IFX-2. We manage certain activities such as contract research and manufacturing of IFX-1 and our discovery programs through our third-party vendors.
 
Research and development expenses incurred for the six months ended June 30, 2020 decreased over the corresponding period in 2019 by €5.5 million. This decline was primarily due to lower contribution of expense in the period from the Phase IIb clinical development of IFX-1 in HS since this study was completed in 2019, offset by the COVID-19 trial expenses. These two factors led to a net decline of €3.7 million in third-party expenses. Furthermore third-party manufacturing expenses also declined by €1.0 million. Additionally, equity-settled share-based compensation recognized in personnel expenses decreased by €0.9 million.
 
II-7

General and Administrative Expenses
 
   
Six Months Ended June 30,
 
(in €)
 
2020
   
2019
   
Change
 
Personnel expenses
   
2,808,583
     
4,198,960
     
(1,390,377
)
Legal, consulting and audit fees
   
512,327
     
1,397,027
     
(884,700
)
Other expenses
   
1,570,788
     
1,353,028
     
217,760
 
Total General and administrative expense
   
4,891,698
     
6,949,015
     
(2,057,317
)

General and administrative expenses decreased by €2.1 million to €4.9 million for the six months ended June 30, 2020, from €6.9 million for the six months ended June 30, 2019. This decrease is primarily attributable to decreasing expenses associated with equity-settled share-based compensation recognized in personnel expenses (€1.5 million). Furthermore, legal, consulting and other expenses decreased by €0.7 million to €2.1 million for the six months ended June 30, 2020, from €2.8 million for the six months ended June 30, 2019. In 2019, consulting costs were higher due to a one-time strategic project.
 
Net financial result
 
   
Six Months Ended June 30,
 
(in €)
 
2020
   
2019
   
Change
 
Finance income
                 
Foreign exchange gains
   
1,518,680
     
628,357
     
890,323
 
Interest and other finance income
   
749,756
     
1,869,603
     
(1,119,847
)
Total
   
2,268,436
     
2,497,960
     
(229,524
)
Finance expenses
                       
Foreign exchange losses
   
(970,706
)
   
(434,786
)
   
535,920
 
Other
   
(205,258
)
   
(15,021
)
   
190,237
 
Total
   
(1,175,964
)
   
(449,807
)
   
726,157
 
Net Financial Result
   
1,092,472
     
2,048,153
     
(955,681
)

Net financial result decreased by €1.0 million to €1.1 million for the six months ended June 30, 2020, from €2.0 million for the six months ended June 30, 2019. This decrease is mainly attributable to lower interest on marketable securities (€1.1 million), only partially compensated by a higher foreign exchange result (higher gains €0.9 million and €0.5 million higher losses).
 
Liquidity and Capital Resources
 
Since inception, we have incurred significant operating losses. For the six months ended June 30, 2020, we incurred a net loss of €18.3 million. To date, we have financed our operations primarily through the sale of our securities. As of June 30, 2020, we had cash and cash equivalents of €36.4 million, plus financial assets of €62.5 million. Our cash and cash equivalents primarily consist of bank deposit accounts and fixed U.S. Dollar term deposits. Our quoted debt securities have AAA credit ratings.
 
II-8

Cash Flows
 
The table below summarizes our consolidated statement of cash flows for the six months ended June 30, 2020 and 2019:
 
   
Six Months Ended June 30,
 
(in €)
 
2020
   
2019
 
Net Cash used in operating activities
   
(18,222,235
)
   
(18,730,669
)
Net cash from investing activities
   
20,272,857
     
17,133,122
 
Net cash from/ (used in) financing activities
   
312,976
     
(125,075
)
Cash and cash equivalents at the beginning of the period
   
33,131,280
     
55,386,240
 
Exchange gains on cash and cash equivalents
   
903,700
     
399,266
 
Cash and cash equivalents at the end of the period
   
36,398,578
     
54,062,885
 

Net Cash used in Operating Activities
 
The use of cash in all periods resulted primarily from our net losses, adjusted for non-cash charges and changes in components of working capital.
 
Net cash used in operating activities decreased to €18.2 million in the six months ended June 30, 2020, from €18.7 million in the six months ended June 30, 2019, mainly due to the decrease of cash expenses, such as third-party expenses for manufacturing and clinical trials for our lead program IFX-1, compensated by lower payments on trade liabilities in the six months ended June 30, 2019.
 
Net Cash from Investing Activities
 
Net cash from investing activities increased by €3.1 million in the six months ended June 30, 2020 mainly due to higher repayments from matured marketable securities in the six months ended June 30, 2020 compared to the six months ended June 30, 2019.
 
Net Cash from/ (used in) Financing Activities
 
Net cash from in financing activities increased by €0.4 million in the six months ended June 30, 2020, due to the exercise of share options, resulting in proceeds to the Company in the amount of €0.5 million.
 
Funding Requirements
 
In 2020, we anticipate that our expenses might increase in connection with our ongoing activities. In particular, we anticipate that we will continue and complete Phase II clinical trials in AAV, PG, COVID-19 and an oncology indication, we might start Phase III clinical development in HS and COVID-19 and might pursue additional indications. We also want to continue preclinical development of IFX-2. We plan to initiate new research and preclinical development efforts and we may seek marketing approval for any product candidates that we successfully develop and where we receive approval. Should we commence further clinical development with IFX-1 in HS, there may be additional costs in connection with such development. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to establishing sales, marketing, distribution and other commercial infrastructure to commercialize such products. The Company does not expect marketing approval in the next 12 to 24 months. Furthermore, we expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts. We believe that our existing cash and cash equivalents and financial assets will enable us to fund our operating expenses and capital expenditure requirements under our current business plan for at least the next 24 months.
 
II-9

Until such time, if ever, that we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, royalty-based financings, future collaborations, strategic alliances, and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include voting or other rights that adversely affect your rights as a common shareholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise funds through additional collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.
 
For more information as to the risks associated with our future funding needs, see “Risk factors” in the Annual Report.
 
Off-Balance Sheet Arrangements
 
As of June 30, 2020, and during the periods presented, we did not have any off-balance sheet arrangements other as described under “Management’s discussion and analysis of financial condition and results of operations—Off-balance sheet arrangements” in the Annual Report.
 
Contractual Obligations and Commitments
 
As of the date of this discussion and analysis, we do not have any, and during the periods presented we did not have any, contractual obligations and commitments other than as described under “Management’s discussion and analysis of financial condition and results of operations—Contractual obligations and commitments” in the Annual Report.
 
Quantitative and Qualitative Disclosures about Market Risk
 
During the six months ended June 30, 2020, there were no significant changes to our quantitative and qualitative disclosures about market risk from those reported in “Management’s discussion and analysis of financial condition and results of operations–Quantitative and qualitative disclosures about market risk” in the Annual Report.
 
Critical Judgments and Accounting Estimates
 
There have been no material changes to the significant accounting policies and estimates described in “Management’s discussion and analysis of financial condition and results of operations—Critical judgments and accounting estimates” in the Annual Report.
 
JOBS Act Exemptions
 
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for an “emerging growth company.” As an emerging growth company, we are not required to provide an auditor attestation report on our system of internal controls over financial reporting. This exemption will apply for a period of five years following the completion of our initial public offering or until we no longer meet the requirements of being an “emerging growth company,” whichever is earlier. We would cease to be an emerging growth company if we have more than $1.07 billion in annual revenue, have more than $700 million in market value of our common shares held by non-affiliates as of the specified testing date or issue more than $1.0 billion of non-convertible debt over a three-year period.
 
II-10

Cautionary Statement Regarding Forward Looking Statements
 
This discussion contains forward-looking statements that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “estimate,” “believe,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions intended to identify statements about the future. These statements speak only as of the date of this discussion and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements include, without limitation, statements about the following:
 

our operation as a development stage company with limited operating history and a history of operating losses; as of June 30, 2020, our accumulated deficit was €152.6 million;
 

the timing, progress and results of clinical trials of IFX-1 and any other product candidates, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available, the costs of such trials and our research and development programs generally;
 

the timing of any submission of filings for regulatory approval of IFX-1 or any other product candidate, and the timing of and our ability to obtain and maintain regulatory approval of IFX-1 for any indication;
 

our ability to leverage our proprietary anti-C5a technology to discover and develop therapies to treat complement-mediated autoimmune and inflammatory diseases;
 

our ability to protect, maintain and enforce our intellectual property protection for IFX-1 and any other product candidates, and the scope of such protection;
 

whether the FDA, EMA or comparable foreign regulatory authority will accept or agree with the number, design, size, conduct or implementation of our clinical trials, including any proposed primary or secondary endpoints for such trials;
 

the success of our future clinical trials for IFX-1 and any other product candidates and whether such clinical results will reflect results seen in previously conducted preclinical studies and clinical trials;
 

our expectations regarding the size of the patient populations for, market opportunity for and clinical utility of IFX-1 or any other product candidates, if approved for commercial use;
 

our manufacturing capabilities and strategy, including the scalability and cost of our manufacturing methods and processes and the optimization of our manufacturing methods and processes, and our ability to continue to rely on our existing third-party manufacturers for our planned future clinical trials;
 

our estimates of our expenses, ongoing losses, future revenue, capital requirements and our needs for or ability to obtain additional financing;
 

our expectations regarding the scope of any approved indication for IFX-1;
 

our ability to defend against costly and damaging liability claims resulting from the testing of our product candidates in the clinic or, if, approved, any commercial sales;
 

our ability to commercialize IFX-1 or our other product candidates;
 

if any of our product candidates obtain regulatory approval, our ability to comply with and satisfy ongoing obligations and continued regulatory overview;
 

our ability to comply with enacted and future legislation in seeking marketing approval and commercialization;
 

our future growth and ability to compete, which depends on our retaining key personnel and recruiting additional qualified personnel;
 

our competitive position and the development of and projections relating to our competitors in the development of C5a inhibitors or our industry;
 
II-11


our expectations regarding the time during which we will be an emerging growth company under the JOBS Act or a foreign private issuer; and
 

other risk factors discussed under “Risk factors” in the Annual Report.
 
Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. You should refer to the “ITEM 3. KEY INFORMATION: - D. Risk factors” section of the Annual Report for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this discussion will prove to be accurate. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. You should, however, review the factors and risks and other information we describe in the reports we will file from time to time with the SEC after the date of this discussion.
 

II-12

Exhibit 99.3


InflaRx Reports Q2 2020 Financial & Operating Results

Announced encouraging results from the Phase II portion of the Phase II/III adaptive, randomized, controlled trial in patients with COVID-19 induced pneumonia, showing a trend in lower 28-day all-cause mortality rate
Completed end-of-Phase II meeting with the FDA for IFX-1 in hidradenitis suppurativa
Received positive EMA scientific advice suggesting that IHS4 could be used as primary endpoint in InflaRx´s pivotal development in hidradenitis suppurativa
Cash, cash equivalents and financial assets of approximately €98.9 million as of June 30, 2020

Jena, Germany, 30 July 2020 – InflaRx (Nasdaq: IFRX), a clinical-stage biopharmaceutical company developing anti-inflammatory therapeutics by targeting the complement system, announced today financial results for the three and six months ended June 30, 2020.

“The encouraging data from the randomized exploratory first part of our study in COVID-19 are in line with the mode of action of IFX-1 and give hope that C5a inhibition with IFX-1 may be a life-saving treatment option. The results have been submitted for publication in a peer-reviewed medical journal and to a pre-print server, and we are planning an adequately controlled and powered Phase III part of the study in critically ill COVID-19 patients,” said Prof. Niels C. Riedemann, Chief Executive Officer and Founder of InflaRx.

Prof. Riedemann continued, “We just received the EMA scientific advice agreeing with our arguments on the limitations of the currently used score in hidradenitis suppurativa development (HiSCR) and suggesting that IHS4 could be used as the primary endpoint in our pivotal studies. Our initial interactions with both EMA and FDA related to a Phase III development program in hidradenitis suppurativa have shown us that IFX-1 is a Phase III ready drug candidate. We are working on a strategy to address the FDA´s concerns related to the suggested change in the primary endpoint and plan additional FDA interactions on this topic. Our other clinical programs with IFX-1 are moving forward in pyoderma gangraenosum and ANCA-associated vasculitis. Depending on the COVID-19 situation, we expect readouts in these indications in 2021.”



Recent R&D Highlights

IFX-1 in COVID-19 induced pneumonia: In June 2020, InflaRx announced encouraging results from the first 30 patients treated in the adaptive randomized Phase II/III trial in patients with severe COVID-19 induced pneumonia.  Positive treatment trends were seen in the 28-day all-cause mortality rate and in various other endpoints.  Twenty-eight-day all-cause mortality in the IFX-1 treatment group was 13% (2 out of 15) versus 27% (4 out of 15) in the control group. In the best supportive care group, four patients died of COVID-19-induced multi-organ failure, and three of them had pulmonary embolisms reported as a serious adverse event. In the IFX-1 treatment arm, one patient died after an acute ventilator tube complication (leakage) leading to hypoxia, and one patient who met an exclusion criterion with a history of severe chronic obstructive pulmonary disease, which was not known at time point of enrollment, died of pulmonary failure.  Additionally, fewer patients in the IFX-1 treatment arm experienced renal impairment assessed by estimated glomerular filtration rates, and more patients showed reversal of blood lymphocytopenia and a greater lowering of lactate dehydrogenase concentrations as a sign of reduction in tissue damage. A temporary significant increase of D-dimer levels in the first days following IFX-1 administration was noted, as potentially an expression of induction of blood clot lysis. No statistically significant group differences on the chosen primary endpoint of relative change (%) from baseline to day 5 in oxygenation index (defined as PaO2/FiO2 ratio) were detected. However, the exploratory first part of this study was not powered to show such differences. InflaRx is now planning an adequately powered, placebo-controlled, double blinded Phase III part using 28-day all-cause mortality as the primary endpoint, an accepted regulatory primary endpoint for critical care studies.

IFX-1 in Hidradenitis Suppurativa (HS): In June 2020, InflaRx completed an end-of-Phase II meeting with the FDA to discuss a Phase III program for the use of IFX-1 for the treatment of HS. The FDA agreed to key proposals to support a Biologics License Application (BLA) submission, including aspects of the Phase III trial design, IFX-1 dosing, target study population, and the nonclinical and clinical pharmacology packages. While the FDA did not agree that the International Hidradenitis Suppurativa Severity Score (“IHS4”) is fit for purpose as a primary efficacy endpoint tool to support labeling, the FDA recommended that the Company obtain HS patient input to help determine the validity of the IHS4 score. The Company is now assessing different strategies for a potential pathway to regulatory approval for IFX-1 in the United States and plans to engage with the FDA on next steps.


 
Additionally, the Company requested scientific advice from the European Medicines Agency (EMA) about the European pathway for regulatory approval and received feedback in July 2020. Although the EMA noted certain considerations regarding the Company’s proposal, the EMA acknowledged that HiSCR response does not account for the clinical relevance of a reduction in draining fistulas and the effort to construct a new endpoint that better captures these changes was endorsed in principle.  According to the EMA, although HiSCR was used as an endpoint in previous studies, IHS4 could be an appropriate tool to evaluate the efficacy of a novel compound in HS. The Company is working diligently to address the additional feedback received and analyzing the strategy for its Phase III development in HS.

IFX-1 in Pyoderma Gangraenosum (PG): The Phase IIa open label trial continues to enroll patients in the higher dose groups. Additional clinical trial sites continue to be opened to support enrollment. Results from the higher dose groups are expected in 2021.

IFX-1 in ANCA-associated vasculitis (AAV): In the European Phase II IXCHANGE trial, Part 2 continues to enroll patients.  Final results are expected in 2021.

IFX-1 in oncology: Activities are ongoing for the Phase IIa oncology program, with expected initiation in the first half of 2021.

Financial highlights – H1 2020

Research and development expenses incurred for the six months ended June 30, 2020

decreased over the corresponding period in 2019 by €5.5 million. This decline was primarily due to lower contribution of expense in the period from the Phase IIb clinical development of IFX-1 in HS since this study was completed in 2019, offset by the COVID-19 trial expenses. These two factors led to a net decline of €3.7 million in third-party expenses. Furthermore third-party manufacturing expenses also declined by €1.0 million. Additionally, equity-settled share-based compensation recognized in personnel expenses decreased by €0.9 million.

General and administrative expenses decreased by €2.1 million to €4.9 million for the six months ended June 30, 2020, from €6.9 million for the six months ended June 30, 2019. This decrease is primarily attributable to decreasing expenses associated with equity-settled share-based compensation recognized in personnel expenses (€1.5 million). Furthermore, legal, consulting and other expenses decreased by €0.7 million to €2.1 million for the six months ended June 30, 2020, from €2.8 million for the six months ended June 30, 2019. In 2019, consulting costs were higher due to a onetime strategic project.


 
Net financial result decreased by €1.0 million to €1.1 million for the six months ended June 30, 2020, from €2.0 million for the six months ended June 30, 2019. This decrease is mainly attributable to lower interest earned on marketable securities (€1.1 million), partially offset by a higher foreign exchange result (higher gains €0.9 million and €0.5 million higher losses).

Net loss for the six months ended June 30, 2020 was €18.3 million or €(0.70) per common share, compared to €25.1 million or €(0.97) per common share for the six months ended June 30, 2019. On June 30, 2020, the Company’s total funds available were approximately €98.9 million, composed of cash and cash equivalents (€36.4 million) and financial assets (€62.5 million).

Net cash used in operating activities decreased to €18.2 million in the six months ended June 30, 2020, from €18.7 million in the six months ended June 30, 2019, mainly due to the decrease of cash expenses, such as third-party expenses for manufacturing and clinical trials for our lead program IFX-1, compensated by lower payments on trade liabilities in the six months ended June 30, 2019.

Additional information regarding these results and other relevant information is included in the notes to the unaudited Condensed Consolidated Financial Statements as of June 30, 2020, as well as the financial statements as of December 31, 2019 in “ITEM 18. Financial statements,” which is included in InflaRx’s Annual Report on Form 20-F as filed with the U.S. Securities and Exchange Commission (SEC).


 
InflaRx N.V. and subsidiaries
Unaudited Condensed Consolidated Statements of Operations and
Comprehensive Loss for the three and six months ended June 30, 2020 and 2019

 
   
For the three months ended
June 30,
   
For the six months ended
June 30,
 
(in €, except for share data)
 
2020
(unaudited)
   
2019
(unaudited)
   
2020
(unaudited)
   
2019
(unaudited)
 
                         
Operating Expenses
                       
Research and development expenses
   
(7,356,326
)
   
(12,497,222
)
   
(14,655,125
)
   
(20,192,372
)
General and administrative expenses
   
(2,326,895
)
   
(3,647,849
)
   
(4,891,698
)
   
(6,949,015
)
Total Operating Expenses
   
(9,683,221
)
   
(16,145,071
)
   
(19,546,822
)
   
(27,141,387
)
Other income
   
102,332
     
2,866
     
197,292
     
67,702
 
Other expenses
   
(3,450
)
   
(79,183
)
   
(9,170
)
   
(83,068
)
Operating Result
   
(9,584,339
)
   
(16,221,387
)
   
(19,358,701
)
   
(27,156,753
)
Finance income
   
609,444
     
1,338,755
     
2,268,436
     
2,497,960
 
Finance expenses
   
(1,057,937
)
   
(388,097
)
   
(1,175,964
)
   
(449,807
)
Net Financial Result
   
(448,493
)
   
950,659
     
1,092,472
     
2,048,153
 
Loss for the Period
   
(10,032,832
)
   
(15,270,729
)
   
(18,266,229
)
   
(25,108,600
)
                                 
Share Information
                               
Weighted average number of shares outstanding
   
26,172,023
     
25,964,379
     
26,138,639
     
25,964,379
 
Loss per share (basic/diluted)
   
(0.38
)
   
(0.59
)
   
(0.70
)
   
(0.97
)
                                 
Loss for the Period
   
(10,032,832
)
   
(15,270,729
)
   
(18,266,229
)
   
(25,108,600
)
Other comprehensive income that may be reclassified to profit or loss in subsequent periods:
                               
Exchange differences on translation of foreign currency
   
(1,452,973
)
   
(1,622,079
)
   
260,895
     
695,468
 
Total Comprehensive Loss
   
(11,485,805
)
   
(16,892,807
)
   
(18,005,334
)
   
(24,413,132
)


 
InflaRx N.V. and subsidiary
Unaudited Condensed Consolidated Statements of Financial Position
as of June 30, 2020 and December 31, 2019

in €
 
June 30,
2020
(unaudited)
   
December 31,
2019
 
             
ASSETS
           
Non-current assets
           
Property, plant and equipment
   
493,377
     
576,373
 
Right-of-use assets
   
716,871
     
836,924
 
Intangible assets
   
404,251
     
452,400
 
Other assets
   
419,424
     
452,217
 
Financial assets
   
272,627
     
272,614
 
Total non-current assets
   
2,306,550
     
2,590,528
 
Current assets
               
Other assets
   
2,973,228
     
3,500,884
 
Financial assets
   
62,191,912
     
82,353,867
 
Cash and cash equivalents
   
36,398,578
     
33,131,280
 
Total current assets
   
101,563,718
     
118,986,031
 
TOTAL ASSETS
   
103,870,268
     
121,576,558
 
                 
EQUITY AND LIABILITIES
               
Equity
               
Issued capital
   
3,152,427
     
3,132,631
 
Share premium
   
211,483,756
     
211,006,606
 
Other capital reserves
   
26,627,185
     
25,142,213
 
Accumulated deficit
   
(152,628,234
)
   
(134,362,006
)
Other components of equity
   
2,488,124
     
2,227,228
 
Total equity
   
91,123,258
     
107,146,673
 
Non-current liabilities
               
Lease liabilities
   
203,636
     
330,745
 
Other non-financial liabilities
   
37,644
     
39,013
 
Total non-current liabilities
   
241,280
     
369,758
 
Current liabilities
               
Trade and other payables
   
10,630,462
     
12,413,662
 
Lease liabilities
   
524,034
     
515,203
 
Employee benefits
   
867,121
     
975,629
 
Social security, other tax and non-financial liabilities
   
448,113
     
105,634
 
Provisions
   
36,000
     
50,000
 
Total current liabilities
   
12,505,730
     
14,060,128
 
Total Liabilities
   
12,747,010
     
14,429,886
 
TOTAL EQUITY AND LIABILITIES
   
103,870,268
     
121,576,558
 


 
InflaRx N.V. and subsidiary
Unaudited Condensed Consolidated Statements of Changes in Shareholders’
Equity for the six months ended June 30, 2020 and 2019

(in €, except for share data)
 
Issued
capital
   
Share
premium
   
Other
capital
reserves
   
Accumulated
deficit
   
Other
components of
equity
   
Total
equity
 
                                     
Balance as of January 1, 2020
   
3,132,631
     
211,006,606
     
25,142,213
     
(134,362,006
)
   
2,227,228
     
107,146,673
 
Loss for the period
   
     
     
     
(18,266,229
)
   
     
(18,266,229
)
Exchange differences on translation of foreign currency
   
     
     
     
     
260,895
     
260,895
 
Total comprehensive loss
   
     
     
     
(18,266,229
)
   
260,895
     
(18,005,334
)
Contributions
                                               
Equity-settled share-based payment
   
     
     
1,484,972
     
     
     
1,484,972
 
Share options exercised
   
19,797
     
477,149
     
     
     
     
496,946
 
Total Contributions
   
19,797
     
477,149
     
1,484,972
     
     
     
1,981,918
 
Balance as of June 30, 2020
   
3,152,427
     
211,483,756
     
26,627,185
     
(152,628,234
)
   
2,488,124
     
91,123,258
 
                                                 
Balance as of January 1, 2019
   
3,115,725
     
211,021,835
     
18,310,003
     
(81,107,188
)
   
50,196
     
151,390,571
 
Loss for the period
   
     
     
     
(25,108,600
)
   
     
(25,108,600
)
Exchange differences on translation of foreign currency
   
     
     
     
     
695,468
     
695,468
 
Total comprehensive loss
   
     
     
     
(25,108,600
)
   
695,468
     
(24,413,132
)
Contributions
                                               
Equity-settled share-based payment
   
     
     
3,889,767
     
     
     
3,889,767
 
Total Contributions
   
     
     
3,889,767
     
     
     
3,889,767
 
Balance as of June 30, 2019
   
3,115,725
     
211,021,835
     
22,199,770
     
(106,215,788
)
   
745,663
     
130,867,206
 
                                                 


 
InflaRx N.V. and subsidiary
Unaudited Condensed Consolidated Statements of Cash Flows
for the six months ended June 30, 2020 and 2019

in €
 
For the six months ended June 30, 2020
(unaudited)
   
For the six months ended June 30, 2019
(unaudited)
 
             
Operating activities
           
Loss for the period
   
(18,266,229
)
   
(25,108,600
)
Adjustments for:
               
Depreciation & amortization of property, plant, equipment, right-of-use assets and intangible assets
   
353,976
     
307,130
 
Net financial result
   
(1,092,472
)
   
(2,048,153
)
Share-based payment expense
   
1,484,972
     
3,889,767
 
Net foreign exchange differences
   
(789,528
)
   
(205,103
)
Changes in:
               
Other assets
   
560,449
     
(2,063,491
)
Employee benefits
   
(122,411
)
   
(84,890
)
Social security and other current non-financial liabilities
   
341,012
     
(184,120
)
Trade and other payables
   
(1,783,200
)
   
5,513,355
 
Interest received
   
1,096,651
     
1,269,745
 
Interest paid
   
(5,455
)
   
(16,308
)
Net cash used in operating activities
   
(18,222,235
)
   
(18,730,669
)
Investing activities
               
Purchase of intangible assets, laboratory and office equipment
   
(35,107
)
   
(503,881
)
Purchase of non-current other financial assets
   
     
(75,543
)
Disposal of non-current other financial assets
   
     
3,088
 
Purchase of current financial assets
   
(59,196,096
)
   
 
Proceeds from the maturity of financial assets
   
56,553,296
     
17,709,459
 
Net cash from investing activities
   
20,272,857
     
17,133,122
 
Financing activities
               
Proceeds from exercise of share options
   
496,946
     
 
Repayment of lease liabilities
   
(183,970
)
   
(125,075
)
Net cash from/ (used in) financing activities
   
312,976
     
(125,075
)
Net (decrease)/increase in cash and cash equivalents
   
2,363,597
     
(1,722,622
)
Effect of exchange rate changes on cash and cash equivalents
   
903,700
     
399,266
 
Cash and cash equivalents at beginning of period
   
33,131,280
     
55,386,240
 
Cash and cash equivalents at end of period
   
36,398,578
     
54,062,885
 


 
About IFX-1:

IFX-1 is a first-in-class monoclonal anti-human complement factor C5a antibody, which highly and effectively blocks the biological activity of C5a and demonstrates high selectivity towards its target in human blood. Thus, IFX-1 leaves the formation of the membrane attack complex (C5b-9) intact as an important defense mechanism, which is not the case for molecules blocking the cleavage of C5. IFX-1 has been demonstrated to control the inflammatory response driven tissue and organ damage by specifically blocking C5a as a key “amplifier” of this response in pre-clinical studies. IFX-1 is believed to be the first monoclonal anti-C5a antibody introduced into clinical development. Approximately 300 people have been treated with IFX-1 in clinical trials, and the antibody has been shown to be well tolerated. IFX-1 is currently being developed for various indications, including Hidradenitis Suppurativa, ANCA-associated vasculitis, Pyoderma Gangraenosum and COVID-19 pneumonia.

About InflaRx N.V.:

InflaRx (Nasdaq: IFRX) is a clinical-stage biopharmaceutical company focused on applying its proprietary anti-C5a technology to discover and develop first-in-class, potent and specific inhibitors of C5a. Complement C5a is a powerful inflammatory mediator involved in the progression of a wide variety of autoimmune and other inflammatory diseases. InflaRx was founded in 2007, and the group has offices and subsidiaries in Jena and Munich, Germany, as well as Ann Arbor, MI, USA. For further information please visit www.inflarx.com.

Contacts:

InflaRx N.V.

Jordan Zwick – Global Head of Business Development & Corporate Strategy
Email: jordan.zwick[at]inflarx.de
Tel: +1 917-338-6523

MC Services AG

Katja Arnold, Laurie Doyle, Andreas Jungfer
Email: inflarx[at]mc-services.eu
Europe: +49 89-210 2280
US: +1-339-832-0752


 
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements. All statements other than statements of historical fact are forward-looking statements, which are often indicated by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “believe,” “estimate,” “predict,” “potential” or “continue” and similar expressions. Forward-looking statements appear in a number of places throughout this release and may include statements regarding our intentions, beliefs, projections, outlook, analyses and current expectations concerning, among other things, our ongoing and planned preclinical development and clinical trials; the impact of the COVID-19 pandemic on the Company; the timing  of and our ability to commence and conduct clinical trials; potential results from current or potential future collaborations; our ability to make regulatory filings, obtain positive guidance from regulators, and obtain and maintain regulatory approvals for our product candidates; our intellectual property position; our ability to develop commercial functions; expectations regarding clinical trial data; our results of operations, cash needs, financial condition, liquidity, prospects, future transactions, growth and strategies; the industry in which we operate; the trends that may affect the industry or us and the risks, uncertainties and other factors described under the heading “Risk Factors” in InflaRx’s periodic filings with the Securities and Exchange Commission. These statements speak only as of the date of this press release and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements, and we assume no obligation to update these forward-looking statements, even if new information becomes available in the future, except as required by law.