0001654954-22-010638infrx

0001654954-22-010638infrx_6k.htm

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 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2022

Commission File Number: 001-38283

InflaRx N.V.

(Translation of registrant's name into English)

Winzerlaer Str. 2

07745 Jena, Germany

(Address of principal executive office)

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): ☐

EXPLANATORY NOTE

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 (File No. 333-221656) and (ii) the registration statement on Form F-3 (File No. 333-239759) of InflaRx N.V. and to be a part thereof from the date on which this report is submitted, to the extent not superseded by documents or reports subsequently filed or furnished.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, as amended (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, as amended, 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.

	INFLARX N.V.

Date: August 5, 2022	By:	/s/ Niels Riedemann
	Name:	Niels Riedemann
	Title:	Chief Executive Officer

EXHIBIT INDEX

Exhibit No.		Description

99.1		InflaRx N.V. Unaudited Condensed Consolidated Financial Statements as of and for the Three and Six Months Ended June 30, 2022

99.2		InflaRx N.V. Management’s Discussion and Analysis of Financial Condition and Results of Operations

99.3		InflaRx N.V. Press Release dated August 5, 2022

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

0001654954-22-010638infrx_ex991.htm

EXHIBIT 99.1

INFLARX N.V.

UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS - JUNE 30, 2022

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.

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE AND SIX MONTHS ENDED JUNE 30, 2022

Unaudited Condensed Consolidated Financial Statements
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2022 and 2021.			3
Unaudited Condensed Consolidated Statements of Financial Position as of June 30, 2022 and December 31, 2021.			4
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the six months ended June 30, 2022 and 2021.			5
Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021.			6
Notes to the Unaudited Condensed Consolidated Financial Statements.			7
	Summary of significant accounting policies and other disclosures.		7
		Reporting entity and Group’s structure.	7
		Basis of preparation.	7
		Significant events of the quarter and changes in circumstances.	8
	Other income.		9
	Net financial result.		10
	Other assets.		11
	Financial assets and financial liabilities.		11
	Cash and cash equivalents.		12
	Equity.		12
	Share-based payments.		12
		Equity settled share-based payment arrangements.	12
		Share-based payment expense recognized.	14
	Protective foundation.		14

InflaRx N.V. and subsidiaries

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss

for the three and six months ended June 30, 2022 and 2021

			For the three months ended June 30,					For the six months ended June 30,
(in €, except for share data)	Note			2022 (unaudited)		2021 (unaudited)			2022 (unaudited)		2021 (unaudited)

Operating Expenses
Research and development expenses				(11,180,958	)	(11,299,270	)		(21,652,881	)	(16,206,155	)
General and administrative expenses				(4,346,965	)	(2,697,839	)		(8,734,408	)	(5,720,177	)
Total Operating Expenses				(15,527,923	)	(13,997,109	)		(30,387,289	)	(21,926,332	)
Other income		2		14,441,541		15,216			14,443,135		20,678
Other expenses				(279	)	(279	)		(844	)	(844	)
Operating Result				(1,086,661	)	(13,982,172	)		(15,944,999	)	(21,906,498	)
Finance income		3		82,401		35,622			110,362		58,584
Finance expenses		3		(7,945	)	(3,050	)		(32,531	)	(6,734	)
Foreign exchange result		3		1,563,580		(826,303	)		2,291,513		905,367
Other financial result		3		(86,000	)	(5,000	)		39,000		43,000
Income Taxes				-		-			-		-
Income (Loss) for the Period				465,376		(14,780,903	)		(13,536,654	)	(20,906,280	)

Share Information
Weighted average number of shares outstanding				44,203,763		44,186,279			44,203,763		39,024,533
Income (Loss) per share (basic/diluted)				0.01		(0.33	)		(0.31	)	(0.54	)
Other comprehensive income (loss) that may be reclassified to profit or loss in subsequent periods:
Exchange differences on translation of foreign currency				4,408,940		(1,427,302	)		5,718,815		2,077,397
Total Comprehensive Income (Loss)				4,874,316		(16,208,205	)		(7,817,839	)	(18,828,883	)

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

InflaRx N.V. and subsidiaries

Unaudited Condensed Consolidated Statements of Financial Position

as of June 30, 2022 and December 31, 2021

(in €)	Note		June 30, 2022 (unaudited)			December 31, 2021

ASSETS
Non-current assets
Property and equipment				231,133			274,373
Right-of-use assets				1,506,039			1,408,078
Intangible assets				187,218			235,216
Other assets		4		341,666			336,566
Financial assets		5		237,412			27,206,990
Total non-current assets				2,503,468			29,461,224
Current assets
Current other assets		4		10,130,597			10,983,458
Current tax assets				1,518,072			1,282,177
Financial assets from government grants		5		8,260,503			-
Other financial assets		5		76,804,249			57,162,266
Cash and cash equivalents		6		15,416,152			26,249,995
Total current assets				112,129,573			95,677,896
TOTAL ASSETS				114,633,041			125,139,120

EQUITY AND LIABILITIES
Equity
Issued capital		7		5,304,452			5,304,452
Share premium		7		280,310,744			280,310,744
Other capital reserves				35,259,689			30,591,209
Accumulated deficit				(227,512,333	)		(213,975,679	)
Other components of equity				8,769,086			3,050,270
Total equity				102,131,638			105,280,996
Non-current liabilities
Lease liabilities		5		1,170,237			1,066,354
Other liabilities				37,733			35,019
Total non-current liabilities				1,207,970			1,101,373
Current liabilities
Trade and other payables		5		7,912,503			8,574,244
Liabilities from government grants		5		2,145,135			8,300,000
Lease liabilities		5		370,153			366,171
Employee benefits				735,304			1,378,130
Other liabilities				130,338			138,206
Total current liabilities				11,293,433			18,756,751
Total Liabilities				12,501,404			19,858,124
TOTAL EQUITY AND LIABILITIES				114,633,041			125,139,120

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

InflaRx N.V. and subsidiaries

Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity

for the six months ended June 30, 2022 and 2021

(in €, except for share data)	Note		Shares outstanding		Issued capital		Share premium			Other capital reserves		Accumulated deficit			Other components of equity			Total equity

Balance as of January 1, 2022				44,203,763		5,304,452		280,310,744			30,591,209		(213,975,679	)		3,050,271			105,280,996
Loss for the period				-		-		-			-		(13,536,654	)		-			(13,536,654	)
Exchange differences on translation of foreign currency				-		-		-			-		-			5,718,815			5,718,815
Total comprehensive loss				-		-		-			-		(13,536,654	)		5,718,815			(7,817,839	)
Equity-settled share-based payments		8		-		-		-			4,668,481		-			-			4,668,481
Balance as of June 30, 2022*				44,203,763		5,304,452		280,310,744			35,259,689		(227,512,333	)		8,769,086			102,131,638

Balance as of January 1, 2021				28,228,415		3,387,410		220,289,876			26,259,004		(168,345,620	)		(3,726,790	)		77,863,880
Loss for the period				-		-		-			-		(20,906,280	)		-			(20,906,280	)
Exchange differences on translation of foreign currency				-		-		-			-		-			2,077,397			2,077,397
Total comprehensive loss				-		-		-			-		(20,906,280	)		2,077,397			(18,828,883	)
Issuance of common shares and warrants				15,610,022		1,873,203		63,269,346			-		-			-			65,142,549
Transaction costs				-		-		(4,219,222	)		-		-			-			(4,219,222	)
Equity-settled share-based payments		8		-		-		-			2,687,779		-			-			2,687,779
Share options exercised		8		347,842		41,741		921,994			-		-			-			963,735
Balance as of June 30, 2021*				44,186,279		5,302,354		280,261,994			28,946,783		(189,251,900	)		1,649,393			123,609,838

*unaudited

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

InflaRx N.V. and subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

for the six months ended June 30, 2022 and 2021

(in €)	Note		For the six months ended June 30, 2022 (unaudited)			For the six months ended June 30, 2021 (unaudited)

Operating activities
Loss for the period				(13,536,654	)		(20,906,280	)
Adjustments for:
Depreciation & amortization of property and equipment, right-of-use assets and intangible assets				300,870			337,581
Net finance income				(2,408,345	)		(1,000,217	)
Share-based payment expense		7		4,668,481			2,687,779
Net foreign exchange differences				130,347			71,050
Changes in:
Financial assets from government grants		5		(8,260,503	)		-
Other assets				611,843			172,001
Employee benefits				(640,112	)		(662,388	)
Other liabilities				(7,867	)		7,020
Liabilities from government grants		5		(6,154,865	)		-
Trade and other payables				(661,741	)		672,727
Interest received				631,504			371,665
Interest paid				(32,039	)		(5,491	)
Net cash used in operating activities				(25,359,081	)		(18,254,553	)
Investing activities
Purchase of intangible assets, property and equipment				(9,728	)		(18,734	)
Purchase of current financial assets				(47,031,216	)		(27,535,842	)
Proceeds from the maturity of financial assets				59,595,044			29,497,122
Net cash from investing activities				12,554,101			(1,942,546	)
Financing activities
Proceeds from issuance of common shares		6		-			65,142,549
Transaction costs from issuance of common shares		6		-			(4,219,222	)
Proceeds from exercise of share options		7		-			963,735
Repayment of lease liabilities				(182,014	)		(183,128	)
Net cash from (used in) financing activities				(182,014	)		61,703,934
Net decrease increase in cash and cash equivalents				(12,986,995	)		45,391,927
Effect of exchange rate changes on cash and cash equivalents				2,153,152			999,820
Cash and cash equivalents at beginning of period				26,249,995			25,968,681
Cash and cash equivalents at end of period		5		15,416,152			72,360,428

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

InflaRx N.V. and subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

Summary of significant accounting policies and other disclosures

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.

InflaRx is a clinical-stage biopharmaceutical Group focused on applying its proprietary anti-C5a and C5aR technologies to discover and develop first-in-class, potent and specific inhibitors of the complement activation factor known as C5a and its receptor known as C5aR.

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.

Basis of preparation

These interim condensed consolidated financial statements for the three- and six-month reporting periods ended June 30, 2022 and 2021 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, 2021 on Form 20-F.

The interim condensed consolidated financial statements were authorized for issue by the Board of Directors on August 4, 2022.

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, 2021, except for the adoption of new standards effective as of January 1, 2022 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.

The following amendments have been adopted effective January 1, 2022 and do not have a material impact on the consolidated financial statements of the Group:

	·	Reference to the Conceptual Framework - Amendments to IFRS 3
	·	Property, Plant and Equipment: Proceeds before Intended Use- Amendments to IAS 16
	·	Onerous Contracts - Costs of Fulfilling a Contract -Amendments to IAS 37
	·	AIP IFRS 9 Financial Instruments - Fees in the ’10 per cent’ 5

The following standards issued will be adopted in a future period and the potential impact, if any, they will have on the Group’s consolidated financial statements is being assessed:

	·	IFRS 17 Insurance Contracts
	·	Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Noncurrent and Classification of Liabilities as Current or Non-current
	·	Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates
	·	Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction
	·	Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2

Significant events of the quarter and changes in circumstances

Russian-Ukraine Conflict

The conflict between Russia and Ukraine has resulted, and is expected to further result, in significant disruption, instability and volatility in global markets, as well as higher energy and other commodity prices. Since the Company is not currently conducting any business or receiving any services from vendors located in Russia or Ukraine, it does not expect that the ongoing war will have a direct impact on its operations in the near term. However, the Company may be affected by price increases or certain fiscal policy changes in Germany, where the Company is headquartered, such as new tax legislation, economic sanctions and comparable measures, although at this point, it does not foresee any such macroeconomic changes that are expected to have a direct impact on its business operations.

COVID-19 Pandemic

The COVID-19 pandemic continues to impact our operations as many governments continue to maintain measures to slow the spread of the outbreak through quarantines, travel restrictions, closure of borders and requiring maintenance of social distancing measures.

During the first six months of 2022, the Company has continued to use a hybrid working model that supports a blend of in-office and remote employees, depending on their role and location. Our service providers have continued at regular operational levels, and the recruitment of patients and new clinical trial sites also continued in the first six months of 2022 through the date of issuance of these interim financial statements. Business travel, however, has been significantly reduced and widely replaced by other means of communication, e.g. through video-conferencing.

Development programs

On May 12, 2022 the Company announced the results of a strategic review of its development programs considering the current financing environment. As a result of this strategic review, the Company decided to halt the clinical development of vilobelimab in HS for the time being. Furthermore, given the resources required and long duration of necessary Phase III studies of vilobelimab in AAV needed to potentially gain regulatory approval in this indication, the Company also decided to halt the clinical development of vilobelimab in AAV for the time being. Moving forward, the development focus will be on the Phase III development of vilobelimab in PG, on gaining regulatory approval for vilobelimab in severe COVID-19 and in starting the clinical development of INF904.

On June 29, 2022, the Company announced that vilobelimab has been granted orphan drug designation for the treatment of PG by both the Food and Drug Administration (FDA) in the US and the European Medicines Agency (EMA) in Europe. In addition, the Company reported about a productive end-of-phase II meeting with the FDA related to its plans for a Phase III development program in PG. The FDA indicated its support for a randomized, controlled Phase III development program during the meeting and offered to review the study protocol, recognizing PG as a serious and rare condition. Based on the FDA’s feedback and recommendations, InflaRx is now finalizing the design for a Phase III trial and continues to be in dialogue with the FDA related to this. Subsequently, on July 6, 2022 the Company announced that the FDA has also granted a Fast Track designation to the development of vilobelimab for the treatment of PG.

Following the encouraging Phase III results from the randomized, placebo-controlled, multi-national PANAMO study in mechanically ventilated severe COVID-19 patients announced on March 31, 2022, on July 26, 2022, InflaRx announced its plans to submit a request for Emergency Use Authorization (EUA), following constructive interactions with the US Food and Drug Administration (FDA) at a recently held Type B meeting. The application for EUA is planned to be submitted by end of Q3 2022. In addition, the Company is in ongoing dialogue with the EMA related to next regulatory steps for vilobelimab in mechanically ventilated severe COVID-19 patients towards a potential filing for approval for this indication.

Management changes

On June 29, 2022, the Company announced the departure of Mr. Jordan Zwick, its Chief Strategy Officer. Mr. Zwick left InflaRx to pursue other professional opportunities. However, Mr. Zwick agreed to continue to serve as an advisor to the Company.

In July, Dr. Korinna Pilz, the Chief Clinical Development Officer informed the Company about her intention to leave InflaRx for personal reasons. The Company subsequently signed a separation agreement with Dr. Pilz, in which the parties mutually agreed that she will continue to provide her services until October 28, 2022. Beyond this date Dr. Pilz will continue to advise us on specific matters on an as needed basis.

Other income

For the three months ended June 30,

For the six months ended June 30,

(in €)

2022

(unaudited)

2021

(unaudited)

2022

(unaudited)

2021

(unaudited)

Other income from government grants

14,415,368

Further other incomes

26,173

15,216

27,767

20,678

Total

14,441,541

15,216

14,443,135

20,678

Other income increased by €14.4 million. The increase was due to an increase in amounts recognized from grant payments received from the German government.

A portion of this increase is attributable to the recognition of €7.1 million, which was initially deferred in Q4 2021 as a liability as, prior to Q2 2022, there was not reasonable assurance as to whether all grant conditions were fulfilled. With receipt in Q2 2022 of a written confirmation from the agency administering the grant on behalf of the German federal government, reasonable assurance of grant conditions being fulfilled was reached. Further, this confirmation amended the grant, including amending the amounts eligible for each of the various cost categories covered by the grant, with no change to the overall grant amount, and amending the timeline during which eligible costs related to the manufacturing process development activities can be incurred. In addition, reimbursable costs incurred during Q1 and Q2 2022, in the amount of €7.3 million, were also recognized as other income in Q2 2022.

Going forward, the Company will recognize other income as reimbursable costs under the grant are incurred. Grant payments received for the Company’s pre-payment of goods and services will be recognized as a liability, while reimbursable amounts for costs incurred but not yet claimed for reimbursement will be recorded as other receivables in “Financial assets in government grants.”

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 €)	2022 (unaudited)			2021 (unaudited)				2022 (unaudited)		2021 (unaudited)

Financial income
Interest income		82,401			35,622			110,362		58,584
Financial expenses
Interest expenses		(2,243	)		(305	)		(22,102	)	(2,885	)
Interest on lease liabilities		(5,702	)		(2,745	)		(10,429	)	(3,849	)
Total		74,456			32,572			77,831		51,850

Interest income results from marketable securities and short-term deposits in U.S. Dollars held by the Company and its subsidiaries.

	For the three months ended June 30,					For the six months ended June 30,
(in €)		2022 (unaudited)		2021 (unaudited)			2022 (unaudited)		2021 (unaudited)

Foreign exchange result
Foreign exchange income		2,947,221		1,635,201			4,057,629		4,092,239
Foreign exchange expense		(1,383,641	)	(2,461,504	)		(1,766,116	)	(3,186,872	)
Total		1,563,580		(826,303	)		2,291,513		905,367

Foreign exchange income and expense is mainly derived from the translation of the U.S. Dollar cash, cash equivalents and securities held by the Company and its subsidiaries.

For the three months ended June 30,

For the six months ended June 30,

(in €)

2022

(unaudited)

2021

(unaudited)

2022

(unaudited)

2021

(unaudited)

Other financial result

(86,000

)

(5,000

)

39,000

43,000

Other financial result includes an allowance for expected credit loss on marketable securities.

Other assets

(in €)	As of June 30, 2022 (unaudited)		As of December 31, 2021

Non-current other assets
Prepaid expense		341,666		336,566
Total		341,666		336,566
Current other assets
Prepayments on research & development projects		8,785,786		10,649,174
Current tax assets		1,518,072		1,282,177
Prepaid expense		1,343,166		334,284
Other		1,645		-
Total		11,648,669		12,265,635

Prepaid expense mainly consisted of prepaid insurance expense.

As of June 30, 2022, prepayments on research & development (R&D) projects amounted to €8.8 million compared to €10.6 million as of December 31, 2021, and consisted of prepayments on clinical and R&D material production contracts.

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, 2022 and December 31, 2021:

(in €)	As of June 30, 2022 (unaudited)		As of December 31, 2021

Financial assets at amortized cost
Non-current financial assets		237,412		27,206,990
Financial assets from government grants		8,260,503		-
Other current financial assets		76,804,249		57,162,266
Financial liabilities at amortized cost
Liabilities from government grants		2,145,135		8,300,000
Trade and other payables		7,912,503		16,874,244
Interest bearing loans and borrowings		2,145,135		-
Non-current lease liabilities		1,170,237		1,066,354
Current lease liabilities		370,153		366,171

As of June 30, 2022, financial assets from government grants amount to €8.3 million. Thereof €1.6 million are claims for which a request for payment has already been submitted. €6.7 million of the financial assets are claims for eligible costs incurred as of Q2 2022, but for which we expect a request for payment to be submitted in future periods (also see Note 2).

As of June 30, 2022, the fair value of current and non-current financial assets (primarily quoted debt securities) amounted to €84.3 million (Level 1). The Group’s debt instruments at amortized cost consist solely of quoted securities that are graded highly by credit rating agencies such as S&P Global and, therefore, are considered low credit risk investments.

Liabilities from government grants partly comprise funds received for advance payments to third parties. If goods or services from such third parties have not been received, corresponding amounts are not recognized as other income. Our right to retain these funds is contingent on meeting all grant conditions.

Cash and cash equivalents

(in €)	As of June 30, 2022 (unaudited)		As of December 31, 2021

Short-term deposits
Deposits held in U.S Dollars		3,514		12,584,892
Total		3,514		12,584,892
Cash at banks
Cash held in U.S. Dollars		13,336,087		7,612,467
Cash held in Euro		2,076,551		6,052,636
Total		15,412,638		13,665,102
Total cash and cash equivalents		15,416,152		26,249,995

Equity

On July 8, 2020, the Company filed a Form F-3 (Registration Statement) with the United States Securities and Exchange Commission (SEC) with respect to the offer and sale of securities of the Company. The Company also filed a prospectus supplement (Prospectus Supplement) with the SEC relating to an at-the-market program providing for the sale of up to $50.0 million of its common shares over time pursuant to a Sales Agreement with SVB Leerink LLC. The remaining value authorized for sale under the Sales Agreement amounts to $35.2 million.

On February 25, 2021, the Company sold an aggregate of 15,000,000 common shares through a public offering. The common shares were sold at a price of $5.00 per share and have a nominal value of €0.12 per share. For each common share purchased, an investor also received a warrant to purchase a common share at an exercise price of $5.80. The shares and warrants were issued and the transaction closed on March 1, 2021 with gross offering proceeds to the Group from this offering being $75.0 million (€62.2 million), before deducting $4.5 million (€3.7 million) in underwriting discounts and other offering expenses of $0.4 million (€0.3 million). The warrants were exercisable immediately and expired on March 1, 2022. No warrants were exercised.

Share-based payments

Equity settled share-based payment arrangements

During its historical financing rounds prior to 2016, InflaRx GmbH granted stock options under the 2012 Stock Option Plan. Those InflaRx GmbH options were converted into options for common shares of InflaRx N.V. in November 2017:

Number of share options under the 2012 Plan	2022		2021
Outstanding as of January 1,		148,433		148,433
Exercised during the six months ended June 30		-		-
Outstanding as of June 30,		148,433		148,433
thereof vested		148,433		148,433

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 under the 2016 Plan	2022		2021
Outstanding as of January 1,		888,632		1,094,852
Exercised during the six months ended June 30		-		(202,020	)
Outstanding as of June 30,		888,632		892,832
thereof vested		888,632		892,832

In conjunction with the closing of its initial public offering, InflaRx N.V. established a new incentive plan, the 2017 Long-Term Incentive Plan (“LTIP”). The initial maximum number of options to common shares available for issuance pursuant to the LTIP amounted to 2,341,097 common shares.

At the annual general meeting on July 16, 2020, the Company’s shareholders approved an amendment to the LTIP with effect from January 1, 2021:

	·	increasing the maximum annual number of options for common 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 common shares (determined as of December 31 of the immediately preceding year); and

	·	removing certain restrictions from the LTIP, which will allow the Board of Directors and the committee administering the LTIP 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.

Number of share options under the LTIP	2022			2021
Outstanding as of January 1,		3,170,046			2,146,478
Granted during the six months ended June 30		1,561,666			870,928
Exercised during the six months ended June 30		-			(145,822	)
Forfeited during the six months ended June 30		(117,259	)		(15,000	)
Outstanding as of June 30,		4,614,453			2,856,584
thereof vested		3,306,162			1,954,858

On April 13, 2022, following the significant and persistent decrease of the stock price of the Company's common shares during the first half year 2022 and especially after March 31, 2022, the Board of Directors assessed its impact on the value of the options to purchase common shares in the Company's capital awarded under the LTIP and concluded that due to the extraordinary situation and in order to ensure that the options continue to be an appropriate performance incentive for the Company’s management, employees and directors, the exercise price of all outstanding and unexercised options held by active employees or directors of the Company or its affiliates would be adjusted to $1.86 per share.

The repricing decision on April 13, 2022 affected the 2016 Plan and the LTIP. 888,632 share options from the 2016 Plan and 4,544,248 share options from the LTIP were affected. The valuation of past grants with the new exercise price of $1.86 resulted in incremental fair values of the outstanding options (i.e., additional compensation expense had to be recognized).

The number of share options granted during the six months ended June 30, 2022 under the LTIP was as follows:

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)
2022
January 12		1,516,666	$	3.66		0.9008	€	3.30	$	4.13		1.35		5.31		1.57	%
January 12		45,000	$	3.68		0.9008	€	3.32	$	4.13		1.35		5.50		1.59	%
		1,561,666

The number of share options granted during the six months ended June 30, 2022 under the LTIP, considering the repricing decision on April 13, 2022 was as follows:

Share options granted	Number		Fair value per option		FX rate as of repricing date		Fair value per option		Share price at repricing date / Exercise price		Expected volatility		Expected life (midpoint based)		Risk-free rate (interpolated, U.S. sovereign strips curve)
2022
January 12		1,516,666	$	1.61		0.9237	€	1.49	$	1.86		1.35		4.69		2.6	%
January 12		45,000	$	1.59		0.9237	€	1.47	$	1.86		1.35		4.50		2.6	%
		1,561,666

Of the 1,561,666 options granted in the six months ended June 30, 2022, 1,362,500 were granted to members of the Executive Management or Board of Directors.

Expected dividends are nil for all share options listed above.

Share-based payment expense recognized

For the six months ended June 30, 2022, the Company recognized €4,668 thousand of share-based payment expense, which included an expense of €651 thousand for the valuation of past grants with the new exercise price as a result of the repricing of options.

Protective foundation

According to the articles of association of the Company, up to 110,000,000 common shares and up to 110,000,000 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 require us to cancel its preferred shares once the perceived threat to the Company and its stakeholders has been removed or sufficiently mitigated or neutralized. We believe 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 cancelled by us.

In the three and six months ended June 30, 2022, the Company expensed €15 thousand and €30 thousand, respectively, of ongoing costs to reimburse expenses incurred by the protective foundation.

0001654954-22-010638infrx_ex992.htm

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, for the three- and six- month periods ended June 30, 2022 and 2021, respectively, 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 2021, and the notes thereto, which appear in our Annual Report on Form 20-F for the year ended December 31, 2021 (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 “ITEM 3. KEY INFORMATION—C. 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 and C5aR technologies to discover and develop first-in-class, potent and specific inhibitors of the complement activation factor known as C5a and its receptor known as C5aR. C5a is a powerful inflammatory mediator involved in the progression of a wide variety of autoimmune and other inflammatory diseases. Our lead product candidate, vilobelimab, 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.

Severe COVID-19

We are developing vilobelimab in severe COVID-19. In March 2020, we initiated a randomized open label multicenter trial Phase II/III clinical development program (PANAMO) with vilobelimab in severe COVID-19 patients with severely progressed pneumonia. In the Phase II part of the study, we evaluated vilobelimab treatment plus best supportive care compared to best supportive care alone for up to 28 days. Vilobelimab 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.

II-1

On March 31, 2022, we announced Phase III top-line results from the PANAMO study of vilobelimab in mechanically ventilated patients with COVID-19. Vilobelimab treatment resulted in a relative reduction in 28-day all-cause mortality by 23.9% compared to placebo but did not show statistical significance on the pre-specified primary endpoint. Three pre-specified subgroup analyses assessed the treatment effect of vilobelimab in patients with higher baseline disease severity. These analyses all showed a statistically significant signal towards a reduction in 28-day all-cause mortality in the vilobelimab arm compared to the placebo arm in mechanically ventilated patients with one or more additional organ support, captured as baseline ordinal scale of 7, in patients with severe acute respiratory distress syndrome (ARDS) and in patients with kidney impairment. A pre-specified analysis of patients from Western European countries also showed a statistically significant relative reduction in 28-day all-cause mortality of 43% (p=0.014), suggesting an improvement in mortality in line with the reported Phase II data of the PANAMO trial. 60-day all-cause mortality, a key secondary endpoint, showed a continued reduction of mortality in the vilobelimab arm. Following the encouraging Phase III results from the PANAMO trial, on July 26, 2022, we announced our plans to submit a request for Emergency Use Authorization (EUA), following constructive interactions with the U.S. Food and Drug Administration (FDA) at a recently held Type B meeting. The application for EUA is planned to be submitted by end of Q3 2022. In addition, we are in ongoing dialogue with the EMA related to next regulatory steps for vilobelimab in mechanically ventilated severe COVID-19 patients towards a potential filing for approval for this indication.

On October 19, 2021, we announced that we received a grant of up to €43.7 million from the German Ministry of Education and Research and the German Ministry of Health to support our development of vilobelimab for the treatment of severe COVID-19 patients. The grant is structured as a reimbursement of 80% of certain pre-specified expenses related to the clinical development and manufacturing of vilobelimab and awarded in four tranches. Each subsequent tranche is conditional on reaching agreed-upon development and manufacturing-related milestones for the preceding tranche and is structured as a reimbursement for company expenses. Individual tranches will not be paid if the preceding milestone of a tranche is not met. The initial tranche amounted to up to EUR 25.8 million. With availability of the data from the COVID Phase III study, the agency handling the grant on behalf of the German government determined that we reached the first milestone in the funded project. With achievement of the first milestone, the second tranche of the awarded grant has been unlocked for future withdrawal. To date, we have received €8.3 million in grant funds; further funding in the amount of €1.6 million to which we are eligible has already been applied for and in addition refundable invoices in the amount of €6.7 million will be submitted in the near future.

Pyoderma Gangraenosum (PG)

We are also developing vilobelimab for the treatment of pyoderma gangraenosum (PG), a rare neutrophilic dermatosis associated with chronic cutaneous ulcerations. PG usually has a devastating effect on a patient’s life due to severe pain and induction of significant movement impairment depending on the lesions’ locations. In February 2019, we initiated an open label, multicenter Phase IIa exploratory study, enrolling 18 patients with moderate to severe PG in Canada, the United States and Poland. The objective of this study was to evaluate the safety and efficacy of vilobelimab in this patient population in three different doses.

On April 15, 2021, the study reached its enrollment target of 19 patients. On October 27, 2021, we announced preliminary results from the study. In the third dosing cohort at 2400mg biweekly, six of the seven patients achieved clinical remission with a physician global assessment (PGA) score of ≤ 1, which reflects a closure of the target ulcer. All patients in cohort 3 had elevated C5a levels at baseline that were continuously suppressed after initiation of vilobelimab treatment. Amongst all cohorts, two patients had related severe adverse events (SAEs) that were reported: one patient experienced an erysipelas leading to hospitalization (judged as non-related by the sponsor), the other developed a rash due to a delayed hypersensitivity reaction and withdrew from the study (which had been previously disclosed from cohort 2). No dose-related adverse events (AEs) were found. Overall, the observed AE profile was in line with the underlying diseases. Final data from the study were presented at the 2022 American Academy of Dermatology Association (AAD) Annual Meeting on March 26, 2022. With these results, during the second quarter of 2022, we had a productive End-of-Phase II meeting with the (Food and Drug Administration (FDA) in the United States related to our plans for a Phase III development program in PG. The FDA indicated its support for a randomized, controlled Phase III clinical trial and offered to review the study protocol, recognizing PG as a serious and rare condition. Based on the FDA’s feedback and recommendations, we are now finalizing the design for a Phase III trial and continue to be in dialogue with the FDA related to this. During the second quarter, vilobelimab was granted orphan drug designation for the treatment of PG by both the FDA in the United States and the European Medicines Agency (EMA) in Europe. Moreover, on July 6, 2022 we announced that the FDA also granted a Fast Track designation to the development of vilobelimab for the treatment of PG.

II-2

Cutaneous Squamous Cell Carcinoma (cSCC)

We are also developing vilobelimab for the treatment of programmed cell death protein 1 (PD-1) / programmed death ligand 1 (PD-L1) inhibitor resistant/refractory locally advanced or metastatic cutaneous squamous cell carcinoma (cSCC). cSCC is the second most common skin cancer. The incidence of cSCC increases with increasing sun exposure and age and individuals with fair skin and hair are more often affected. The potential for local recurrence or metastasis of cSCC varies with the pathologic variant and localization of the primary lesion, and the risk for metastasis in cSCC is approximately 2-5%. Advanced cSCC 10-year survival rates are less than 20% with regional lymph node involvement and less than 10% with distant metastases.

In June 2021, we announced the dosing of the first patient in the study. After five weeks of treatment with the first three patients in the monotherapy arm, a safety assessment was completed, and enrollment in the combination arm was opened.

On February 16, 2022, we reported that in the combination Arm B of our ongoing clinical Phase II study of vilobelimab in cSCC, three patients have been treated for at least 36 days in the first dosing cohort of the study, receiving intravenous infusions of 400 mg of vilobelimab on days 1, 4, 8, and 15 and from day 22 onwards, 800 mg every two weeks. Patients are also receiving 400 mg of pembrolizumab starting on day 8 of the first cycle and every six weeks thereafter. The data from the first 36 days of treatment have been reviewed by an independent Steering Committee and no safety concerns were raised. The Steering Committee recommended to continue the study as planned and to open enrollment for the second dosing cohort with 1200 mg vilobelimab every two weeks after administration of 600 mg vilobelimab on days 1, 4, 8 and 15. Meanwhile, nine patients have been treated in Arm B. The interim analysis in Arm B which is required to move to the second stage of the Phase II trial, is expected after ten patients have been treated and are evaluable for response assessment at the recommended Phase II dose level, which will be selected based on data from the safety run-in phase of the study. These data are expected to be available in the second half of 2023.

In parallel, enrollment continues in the monotherapy Arm A. Nine patients are now enrolled in this arm. In this arm, patients are receiving a dose of 800 mg vilobelimab on days 1, 4, 8, and 15 of the first cycle, followed by a dose of 1600 mg vilobelimab every two weeks starting on day 22. The interim analysis in Arm A required to proceed to the second stage is expected to be available after ten patients are evaluable for response assessment. These data are expected to be available in the second half of 2022.

Hidradenitis Suppurativa (HS)

We were developing vilobelimab for the treatment of hidradenitis suppurativa (HS), a chronic debilitating systemic inflammatory skin disease. In June 2019, we announced that our Phase IIb clinical trial of vilobelimab in HS (SHINE) did not meet its primary endpoint. We subsequently announced the results of additional analysis and first interim results of the open label extension trial. In light of all available data from the post-hoc analysis of the completed SHINE study and our interaction with the regulatory authorities, we initiated a Phase III study with vilobelimab in HS in January 2022, which we subsequently paused in February 2022, after having received conflicting advice from the FDA regarding the proposed clinical trial protocol and the primary endpoint of the study described therein. In March 2022, the FDA corrected its advice to us. However, after performing a strategic review of our development programs and considering the current financing environment, we decided to halt the development of vilobelimab in HS for the time being.

ANCA-associated Vasculitis (AAV)

We were developing vilobelimab for the treatment of anti-neutrophil cytoplasmic antibody (ANCA) associated vasculitis (AAV), a rare, life-threatening autoimmune disease associated with powerful inflammatory flares that impair kidney function and lead to fatal organ dysfunction.

In May 2021, we reported top-line data for our Phase II safety study in patients with moderate to severe AAV (IXPLORE), indicating that vilobelimab, when dosed in addition to standard of care, proved to be safe and well tolerated.

II-3

Furthermore, in November 2021, we announced top-line results from our randomized, double-blind, placebo-controlled Phase II clinical trial of vilobelimab in patients with AAV (IXCHANGE). In this study with 57 patients, we showed a comparable clinical response of vilobelimab to standard of care, while significantly reducing the need for glucocorticoid (GC) treatment in this life-threatening indication.

Despite these encouraging results, taking into account the resources required and long duration of necessary Phase III studies to gain regulatory approval, in April 2022 we decided to halt the clinical development of vilobelimab in AAV for the time being.

INF904

We are developing INF904, an oral, small molecule drug candidate that targets the C5aR receptor. C5aR, a G-protein-coupled-receptor expressed primarily by granulocytes, mediates the pathophysiological effects of C5a. We plan on targeting complement-mediated, chronic auto-immune and inflammatory conditions where an oral small molecule is the preferred route of administration for patients.

On January 10, 2022, we reported that we have been granted a composition of matter patent for INF904 and associated compounds by the U.S. Patent and Trademark Office and have completed investigational new drug (IND)-enabling (preclinical) studies that demonstrated no obvious toxicological findings even in the highest dose groups in required GLP toxicity analyses. In these preclinical studies, oral INF904 showed higher plasma exposure in animals, including non-human primates, and improved inhibitory activity in a hamster neutropenia model compared to the marketed C5aR inhibitor. Anti-inflammatory therapeutic effects in several preclinical disease models were also demonstrated by INF904. Further, in contrast to the marketed C5aR inhibitor, in vitro experiments showed INF904 has substantially less inhibition of the cytochrome P450 3A4/5 (CYP3A4/5) enzymes, which play an important role in the metabolism of a variety of drugs, including glucocorticoids. We expect to initiate a Phase I program in the second half of 2022 and plan to study INF904 in complement-mediated, chronic autoimmune and inflammatory diseases where oral administration is the preferred choice for patients.

IFX002

To expand the breadth of our anti-C5a technology, we are also developing IFX002 for the treatment of chronic inflammatory indications. IFX002 shares the same mechanism of action as vilobelimab, blocking C5a with high specificity, but is designed with a dosing regimen that may be more suitable for chronic therapy. IFX002 is in pre-clinical development.

Management changes

On June 29, 2022, we announced the departure of Mr. Jordan Zwick, our Chief Strategy Officer. Mr. Zwick left us to pursue other professional opportunities. However, Mr. Zwick agreed to continue to serve as an advisor to us.

In July, Dr. Korinna Pilz, our Chief Clinical Development Officer informed us about her intention to leave the Company for personal reasons. We subsequently signed a separation agreement with Dr. Pilz, in which we mutually agreed that she will continue to provide her services until October 28, 2022. Beyond this date Dr. Pilz will continue to advise us on specific matters on an as needed basis.

Financial Highlights

As of June 30, 2022, we had cash and cash equivalents of €15.4 million and marketable securities of €76.4 million. In April 2022, we conducted a strategic review of our programs and decided to halt development of vilobelimab for HS and AAV until if and when we have sufficient resources to run Phase III trials for the respective programs. As a result of this prioritization, we believe that our current funds will be sufficient to fund our planned operations into the second half of 2024.

We anticipate that the level of our expenses will be affected if and as we:

	·	engage with regulators with respect to potential approval paths for vilobelimab in COVID-19 and PG and determine and execute on next steps for the clinical development of, and regulatory approval for, vilobelimab in severe COVID-19 and/or PG;

	·	further develop vilobelimab for cSCC, depending on the results of the ongoing trial in that indication;

	·	initiate and continue research programs and development activities, including development of IFX002 and INF904; and

II-4

manufacture clinical trial material and continue to validate our manufacturing process for vilobelimab to meet regulatory standards for approval as a commercial-grade manufacturing process.

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 regulatory approval of vilobelimab in severe COVID-19 patients, PG, cSCC and additional indications as well as any potential addition of a technology platform or assets.

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 to be 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 vilobelimab or any additional product candidates.

Research and Development Expenses

Research and development expenses consisted principally of:

	·	expenses incurred under agreements with contract research organizations (CROs), contract manufacturing organizations (CMOs), consultants and independent contractors that conduct research and development, manufacturing 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.

Our research and development expenses primarily relate to the following key programs:

	·	Vilobelimab. We expect our expenses associated with vilobelimab will increase in 2022 compared to 2021, as we complete the outstanding clinical trial activities in COVID-19, explore the regulatory approval submission for vilobelimab in severe COVID-19, complete outstanding activities in our Phase II clinical program of vilobelimab in patients with AAV and our Phase II clinical trial program in patients with PG, potentially start a Phase III study in PG, and continue the Phase II clinical program in cSCC. In addition, we are also incurring expenses related to the manufacturing of clinical trial material and by validating our manufacturing process for vilobelimab to meet regulatory standards for approval as a commercial-grade manufacturing process. Furthermore, we are investigating commercial-scale production options.

	·	INF904. We are developing an oral, small molecule drug candidate that targets the C5aR receptor. All IND-enabling studies have been completed and we plan to initiate the Phase I program in the second half of 2022.

	·	IFX002. We are continuing preclinical development of IFX002, expenses for which mainly consist of salaries, costs for preclinical testing conducted by CROs and costs of production for 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 of production for preclinical compounds and costs paid to CROs.

In 2021, we incurred €35.7 million in research and development expenses. For the six months ended June 30, 2022 and 2021, we incurred research and development expenses of €21.7 million and €16.2 million, respectively. The principal driver of the increase in our research and development expenses was the completion of the Phase III clinical trial of vilobelimab in severe COVID-19. 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 enrollment.

II-5

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.

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 “ITEM 5. Operating and Financial Review and Prospects—Operating results” in the Annual Report.

General and Administrative Expenses

We expect that our general and administrative expenses will increase in the future as our business expands and we incur additional costs associated with operating as a public company. These public company-related costs relate primarily to additional personnel, additional professional and legal fees, audit fees, directors’ and officers’ liability insurance premiums and costs associated with investor relations.

In 2021, we incurred €12.0 million in general and administrative expenses. For the six months ended June 30, 2022 and 2021, we incurred general and administrative expenses of €8.7 million and €5.7 million, respectively. The principal driver of the increase in our general and administrative expenses is attributable to higher personnel expenses from equity-settled share-based compensation recognized in personnel expenses of €2.7 million in the six months ended June 30, 2022 (versus €1.7 million in the same period of 2021). Especially, the decision to reprice outstanding stock options made on April 13, 2022 contributed to the increase in these expenses. Additionally, legal, consulting and other expenses increased to €4.2 million for the six months ended June 30, 2022, from €2.2 million for the six months ended June 30, 2021.

Results of Operations

The information below was derived from our condensed consolidated financial statements included elsewhere herein. The discussion below should be read along with these condensed consolidated financial statements and our Annual Report on Form 20-F for the year ended December 31, 2021 filed with the SEC.

Comparison of the Three Months Ended June 30, 2022 and 2021

	Three Months Ended June 30,
(in €)	2022			2021			Change
Operating Expenses
Research and development expenses		(11,180,958	)		(11,299,270	)		(118,312	)
General and administrative expenses		(4,346,965	)		(2,697,839	)		1,649,127
Total Operating Expenses		(15,527,923	)		(13,997,109	)		1,530,815
Other income		14,441,541			15,216			14,426,325
Other expenses		(279	)		(279	)		—
Operating Result		(1,086,661	)		(13,982,172	)		(12,895,510	)
Finance income		82,401			35,622			(46,779	)
Finance expenses		(7,945	)		(3,050	)		4,895
Foreign exchange result		1,563,580			(826,303	)		(2,389,883	)
Other financial result		(86,000	)		(5,000	)		81,000
Income (Loss) for the Period		465,376			(14,780,903	)		(15,246,278	)
Exchange differences on translation of foreign currency		4,408,940			(1,427,302	)		5,836,242
Total Comprehensive Income (Loss)		4,874,316			(16,208,205	)		(21,082,521	)

II-6

Research and Development Expenses

	Three Months Ended June 30,
(in €)	2022		2021		Change
Third-party expenses		8,694,344		9,517,378		(823,034	)
Personnel expenses		2,117,975		1,387,293		730,682
Legal and consulting fees		277,274		290,697		(13,423	)
Other expenses		91,364		103,902		(12,538	)
Total Research and development expenses		11,180,958		11,299,270		(118,312	)

We use our employee and infrastructure resources across multiple research and development programs directed toward developing vilobelimab and our pre-clinical programs. We manage certain activities such as contract research and manufacturing of vilobelimab and our discovery programs through our third-party vendors.

Research and development expenses incurred for the three months ended June 30, 2022 remained relatively flat compared to the corresponding period in 2021.

General and Administrative Expenses

	Three Months Ended June 30,
(in €)	2022		2021		Change
Personnel expenses		2,052,710		1,541,027		511,683
Legal, consulting and audit fees		1,141,416		239,301		902,115
Other expenses		1,152,838		917,511		235,327
Total General and administrative expense		4,346,965		2,697,839		1,649,126

General and administrative expenses increased by €1.6 million to €4.3 million for the three months ended June 30, 2022, from €2.7 million for the three months ended June 30, 2021. This increase is attributable to higher expenses from equity-settled share-based compensation recognized in personnel expenses (€0.6 million). Additionally, legal, consulting and other expenses increased to €2.3 million for the three months ended June 30, 2022, from €1.2 million for the three months ended June 30, 2021, mainly due to higher consulting and audit costs due to implementation and testing of the ICFR environment.

Other income

Three Months Ended June 30,

(in €)

2022

2021

Change

Other income from government grants

14,415,368

—

14,415,368

Further other incomes

26,173

15,216

10,957

Total Other income

14,441,541

15,216

14,426,326

Other income increased by €14.4 million. The increase was due to an increase in amounts recognized from grant payments received from the German government.

A portion of this increase is attributable to the recognition of €7.1 million, which was initially deferred in Q4 2021 as a liability as, prior to Q2 2022, there was not reasonable assurance as to whether all grant conditions were fulfilled. With receipt in Q2 2022 of a written confirmation from the agency administering the grant on behalf of the German federal government, reasonable assurance of grant conditions being fulfilled was provided. Further, this confirmation amended the grant, including amending the amounts eligible for each of the various cost categories covered by the grant, with no change to the overall grant amount, and amended the timeline during which eligible costs related to the manufacturing process development activities can be incurred. In addition, reimbursable costs incurred during Q1 and Q2 2022, in the amount of €7.3 million, were also recognized as other income in Q2 2022.

II-7

Net financial result

Financial Result	Three Months Ended June 30,
(in €)	2022			2021			Change
Financial income
Interest income		82,401			35,622			46,779
Financial expenses
Interest expenses		(2,243	)		(305	)		(1,938	)
Interest on lease liabilities		(5,702	)		(2,745	)		(2,957	)
Total		74,456			32,572			41,884

Foreign exchange result

Three Months Ended June 30,

(in €)

2022

2021

Change

Foreign exchange result

Foreign exchange income

2,947,221

1,635,201

1,312,020

Foreign exchange expense

(1,383,641

)

(2,461,504

)

1,077,863

Total

1,563,580

(826,303

)

2,389,883

Other financial result

Three Months Ended June 30,

(in €)

2022

2021

Change

Other financial result

(86,000

)

(5,000

)

(81,000

)

Net financial result increased by €2.4 million to a gain of €1.6 million for the three months ended June 30, 2022 from a loss of €0.8 million for the three months ended June 30, 2021. This increase is mainly attributable to lower foreign exchange losses, which decreased by €1.1 million and by higher foreign exchange gains of €1.3 million. Interest on marketable securities also increased slightly by €47 thousand. Other financial result consists of an adjustment for expected credit losses on marketable securities.

Comparison of the Six Months Ended June 30, 2022 and 2021

	Six Months Ended June 30,
(in €)	2022			2021			Change
Operating Expenses
Research and development expenses		(21,652,881	)		(16,206,155	)		(5,446,726	)
General and administrative expenses		(8,734,408	)		(5,720,177	)		(3,014,232	)
Total Operating Expenses		(30,387,289	)		(21,926,332	)		(8,460,957	)
Other income		14,443,135			20,678			14,422,457
Other expense		(844	)		(844	)		—
Operating Result		(15,944,999	)		(21,906,498	)		5,961,499
Finance income		110,362			58,584			51,778
Finance expenses		(32,531	)		(6,734	)		(25,797	)
Foreign exchange result		2,291,513			905,367			1,386,146
Other financial result		39,000			43,000			(4,000	)
Loss for the Period		(13,536,654	)		(20,906,280	)		7,369,626
Exchange differences on translation of foreign currency		5,718,815			2,077,397			3,641,418
Total Comprehensive Loss		(7,817,839	)		(18,828,883	)		11,011,044

II-8

Research and Development Expenses

	Six Months Ended June 30,
(in €)	2022		2021		Change
Third-party expenses		16,782,955		12,506,440		4,276,515
Personnel expenses		4,225,598		2,977,971		1,247,627
Legal and consulting fees		471,361		510,817		(39,456	)
Other expenses		172,967		210,927		(37,960	)
Total research and development expenses		21,652,881		16,206,155		5,446,726

Research and development expenses incurred for the six months ended June 30, 2022 increased compared to the corresponding period in 2021 by €5.4 million. This increase was primarily due to higher expenses for the Phase III part of our COVID-19 trial as well as costs for manufacturing development activities and was driven by an overall increase in third-party expenses of €4.3 million. The €1.2 million increase in personnel expenses was mainly related to equity-settled share-based compensation.

General and Administrative Expenses

	Six Months Ended June 30,
(in €)	2022		2021		Change
Personnel expenses		4,529,727		3,541,486		988,241
Legal, consulting and audit fees		1,911,707		580,449		1,331,258
Other expenses		2,292,974		1,598,242		694,732
Total General and administrative expense		8,734,408		5,720,177		3,014,231

General and administrative expenses increased by €3.0 million to €8.7 million for the six months ended June 30, 2022, from €5.7 million for the six months ended June 30, 2021. This increase is primarily attributable to increasing expenses associated with equity-settled share-based compensation recognized in personnel expenses. Furthermore, legal, consulting and other expenses increased by €2.0 million to €4.2 million for the six months ended June 30, 2022, from €2.2 million for the six months ended June 30, 2021, mainly due to higher consulting and audit costs in conjunction to enhancing the ICFR environment.

Other income

Six Months Ended June 30,

(in €)

2022

2021

Change

Other income from government grants

14,415,368

—

14,415,368

Further other incomes

27,767

20,678

7,089

Total Other income

14,443,135

20,678

14,422,457

Other income for the six months ended June 30, 2022, amounted to €14.4 million. The increase was due to an increase in amounts recognized as other income from government grants.

A part of this increase was attributable to the reversal of a liability of €7.1 million, which was initially recorded in Q4 2021 as a liability since until Q2 2022 it was not clear whether all grant conditions were fulfilled. With receipt of the written confirmation by the agency handling the grant on behalf of the German government of having reached the first milestone in the funded project (data from the COVID Phase III study available) and having agreed on substantial changes in the grant project, including certain changes to amounts and timelines related to the manufacturing process development activities, these liabilities were now recognized as other income. In addition, the refundable portion of costs incurred in this project during Q1 and Q2 in the amount of €7.3 million were also recognized as other income.

II-9

Net financial result

Financial Result	Six Months Ended June 30,
(in €)	2022			2021			Change
Financial income
Interest income		110,362			58,584			51,778
Financial expenses
Interest expenses		(22,102	)		(2,885	)		(19,217	)
Interest on lease liabilities		(10,429	)		(3,849	)		(6,580	)
Total		77,831			51,850			25,981

Foreign exchange result	Six Months Ended June 30,
(in €)	2022			2021			Change
Foreign exchange result
Foreign exchange income		4,057,629			4,092,239			(34,610	)
Foreign exchange expense		(1,766,116	)		(3,186,872	)		1,420,756
Total		2,291,513			905,367			1,386,146

Other financial result

Six Months Ended June 30,

(in €)

2022

2021

Change

Other financial result

39,000

43,000

(4,000

)

Net financial result increased by €1.4 million to €2.4 million for the six months ended June 30, 2022, from €1.0 million for the six months ended June 30, 2021. This increase was mainly attributable to lower foreign exchange losses which decreased by €1.4 million.

Liquidity and Capital Resources

Since inception, we have incurred significant operating losses. For the six months ended June 30, 2022, we incurred a net loss of €13.5 million. To date, we have financed our operations primarily through the sale of our securities. As of June 30, 2022, we had cash and cash equivalents of €15.4 million, in addition to marketable securities of €76.4 million. Our cash and cash equivalents primarily consist of bank deposit accounts and fixed U.S. Dollar term deposits. Our quoted debt securities have high credit ratings.

II-10

Cash Flows

The table below summarizes our consolidated statement of cash flows for the six months ended June 30, 2022 and 2021:

	Six Months Ended June 30,
(in €)	2022			2021
Net cash used in operating activities		(25,359,081	)		(18,254,553	)
Net cash from investing activities		12,554,101			1,942,546
Net cash from/ (used in) financing activities		(182,014	)		61,703,934
Cash and cash equivalents at the beginning of the period		26,249,995			25,968,681
Exchange gains on cash and cash equivalents		2,153,152			999,820
Cash and cash equivalents at the end of the period		15,416,152			72,360,428

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 increased by €7.1 million to €25.4 million for the six months ended June 30, 2022 compared to the six months ended June 30, 2021, during which net cash used in operating activities was €18.3 million.

Net Cash from Investing Activities

Net cash from investing activities increased by €10.6 million for the six months ended June 30, 2022 mainly due to an increase of €30.1 million in repayments from matured marketable securities and offset by an increase of €19.5 million in purchases of marketable securities for the six months ended June 30, 2022 compared to the six months ended June 30, 2021.

Net Cash from Financing Activities

Net cash from financing activities decreased by €61.9 million in the six months ended June 30, 2022 compared to the six months ended June 30, 2021, primarily due to no financings having been undertaken in the first six months of 2022, whereas funds were raised in a follow-on offering in March 2021 and through our at-the-market program during the first six months of 2021.

Funding Requirements

We expect our expenses associated with vilobelimab will increase in 2022 compared to 2021, as we expect to complete the outstanding clinical trial activities in COVID-19, explore the regulatory approval submission for vilobelimab in severe COVID-19, complete outstanding activities in our Phase II clinical program of vilobelimab in patients with AAV and our Phase II clinical trial program in patients with PG, potentially start a Phase III study in PG, and continue the Phase II clinical program in cSCC. In addition, we are also incurring expenses related to the manufacturing of clinical trial material and by validating our manufacturing process for vilobelimab to meet regulatory standards for approval as a commercial-grade manufacturing process. Furthermore, we are investigating commercial-scale production options. Furthermore, we are developing an oral, small molecule drug candidate that targets the C5aR receptor denominated as INF904. All IND-enabling studies have been completed and we plan to initiate the Phase I program in the second half of 2022. We are also continuing preclinical development of IFX002. We also continue with our other research and development efforts towards other product candidates and early discovery activities. 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. 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-11

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, research and development grant income, 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, the interest of our current shareholders 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 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 “ITEM 3. KEY INFORMATION—C. Risk factors” in our Annual Report on Form 20-F for the year ended December 31, 2021 filed with the SEC.

Off-Balance Sheet Arrangements

As of June 30, 2022, 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 our Annual Report on Form 20-F for the year ended December 31, 2021 filed with the SEC.

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 our Annual Report on Form 20-F for the year ended December 31, 2021 filed with the SEC.

Quantitative and Qualitative Disclosures about Market Risk

During the six months ended June 30, 2022, 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 our Annual Report 2021 on Form 20-F for the year ended December 31, 2021 filed with the SEC.

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 our Annual Report 2021 on Form 20-F for the year ended December 31, 2021 filed with the SEC.

II-12

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. As of December 31, 2022, we will no longer qualify as an emerging growth company. Accordingly, in our Annual Report on Form 20-F for the year ended December 31, 2022, we will no longer be subject to the reduced reporting requirements applicable to emerging growth companies and we will be required to adhere to, among other things, the auditor attestation requirement in the assessment of internal controls over financial reporting and compliance with the requirement that the Public Company Accounting Oversight Board has adopted regarding a supplement to the auditor’s report providing additional information about the audit and the financial statements. As a result of losing our emerging growth company status at the end of 2022, we have begun to incur additional costs that may continue as we refine our financial reporting processes and expand our operations.

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, our history of operating losses and our accumulated deficit of €227.5 million as of June 30, 2022;

	·	the timing, progress and results of clinical trials of vilobelimab and any other product candidates, including for the development of vilobelimab to treat PG and critical COVID-19, and 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 submission of an application to the FDA in the third quarter of 2022 for emergency use authorization for vilobelimab to treat critical COVID-19;

	·	the timing and outcome of any discussions or submission of filings for regulatory approval of vilobelimab or any other product candidate, and the timing of and our ability to obtain and maintain regulatory approval of vilobelimab 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 vilobelimab 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 vilobelimab 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 vilobelimab 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 and our ability to engage additional third-party manufacturers for our planned future clinical trials and potentially for commercial supply of vilobelimab;

II-13

	·	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 vilobelimab;

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

	·	our ability to commercialize vilobelimab 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; and

	·	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— C. Risk factors” section of our Annual Report for the year ended December 31, 2021 filed with the SEC 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 or in our Annual Report 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-14

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EXHIBIT 99.3

InflaRx Reports Second Quarter 2022

Financial & Operating Results

·	Fast Track and Orphan Drug designation for vilobelimab in pyoderma gangrenosum (PG) granted by the FDA

·	Plans to submit EUA with the FDA for vilobelimab in critically ill COVID-19 patients announced

·	Grant income of €14.4 million realized during the second quarter

·	Cash, cash equivalents and marketable securities of €91.8 million, expected to finance operations until year-end 2024

Jena, Germany, August 5, 2022 – InflaRx N.V. (Nasdaq: IFRX), a clinical-stage biopharma-ceutical company developing anti-inflammatory therapeutics by targeting the complement system, announced today financial and operating results for the three and six months ended June 30, 2022.

“We have made strong progress in recent months in advancing our strategy for vilobelimab,” said Prof. Niels C. Riedemann, Chief Executive Officer and Founder of InflaRx. “Following positive Phase IIa data and productive discussions with the FDA, we are finalizing the design of our Phase III trial in PG. Our discussions with the FDA related to vilobelimab for the treatment of critically ill, invasively mechanically ventilated COVID-19 patients following the results from our Phase III trial were encouraging. Based on this, we are preparing to apply for emergency use authorization in the U.S. and expect to complete the submission by the end of the third quarter this year. We are also looking forward to further discussing in greater detail our vilobelimab results in critically ill COVID-19 patients with the regulatory agencies in Europe to understand next steps towards a potential submission for marketing authorization. It is a busy time at InflaRx, and we are excited to be moving our programs forward with the goal of ultimately helping patients in need of more effective treatments."

Dr. Thomas Taapken, Chief Financial Officer of InflaRx, said: “We are well financed to follow through with the next steps of our development programs after sharpening our strategic focus, which we announced in May. We are also grateful for the grant of up to €43.7 million from the German federal government for the clinical development of vilobelimab in COVID-19 and the development of the manufacturing process of vilobelimab. Through this strong backing and our focused development strategy, we believe that we have been able to significantly extend our cash runway to YE 2024 in this challenging market environment.”

Recent Corporate and R&D Highlights

Development of Vilobelimab in Pyoderma Gangrenosum (PG):

InflaRx recently reported that vilobelimab was granted orphan drug designation for the treatment of PG by both the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA). In addition, the Company had a productive End-of-Phase II meeting with the FDA related to its plans for a Phase III development program in PG. The FDA indicated its support for a randomized, controlled Phase III development program during the meeting and offered to review the study protocol, recognizing PG as a serious and rare condition. Based on the FDA’s feedback and recommendations, InflaRx is now finalizing the design for a Phase III trial and continues to be in dialogue with the FDA related to this. Moreover, the FDA has granted Fast Track designation for the development of vilobelimab for the treatment of ulcerative PG. The Company had submitted a request for Fast Track designation to the FDA on the basis of previously reported positive outcome data from its Phase IIa open-label dose-escalation study in PG.

Development of Vilobelimab in Critically Ill COVID-19 Patients:

InflaRx recently announced its plans to submit a request for emergency use authorization (EUA) following encouraging interactions with the FDA at a recently held Type B meeting. As previously announced, the Company had requested the meeting to discuss a potential EUA submission and the development of its first-in-class anti-C5a monoclonal antibody vilobelimab in critically ill, invasively mechanically ventilated COVID-19 patients. In the meeting with the FDA, the Company discussed in detail the completed Phase III part of the PANAMO study and obtained guidance from the agency on deliverables related to its planned submission for EUA. InflaRx committed to submitting the request for an EUA by the end of the third quarter 2022 and is dedicated to achieving that ambitious goal. The Company had previously announced encouraging topline results from the PANAMO Phase III study, an international, double-blind, placebo-controlled, randomized clinical trial investigating vilobelimab in invasively mechanically ventilated COVID-19 patients. The primary efficacy endpoint was 28-day all-cause mortality. In this trial, vilobelimab treatment resulted in a 23.9% relative reduction in 28-day all-cause mortality compared to the placebo arm in the global data set (n=368 patients). A pre-specified analysis of patients from Western European countries (n=209) showed a 43% relative reduction in 28-day all-cause mortality in the vilobelimab treatment arm compared to placebo.

Development of Vilobelimab in Cutaneous Squamous Cell Carcinoma (cSCC):

In 2021, InflaRx started treating patients in an open-label, multicenter Phase II study evaluating vilobelimab alone and in combination with pembrolizumab in patients with programmed cell death protein 1 (PD-1) or programmed cell death ligand 1 (PD-L1) inhibitor resistant/refractory locally advanced or metastatic cSCC. To date, InflaRx has recruited nine patients in Arm A of this study (vilobelimab alone). Interim clinical data are expected in the second half of 2022. Arm B of this study (vilobelimab plus pembrolizumab) has enrolled nine patients so far in the first two dose groups. The interim analysis of Arm B is expected once ten patients treated at the dose level recommended by the independent Steering Committee are evaluable for response assessment. These data, which are required to move to the second stage of the Phase II trial, are expected to be available in the second half of 2023.

INF904 – Small Molecule C5aR Inhibitor:

InflaRx expects to initiate a Phase I program in the second half of 2022 and plans to study INF904 in complement-mediated, chronic autoimmune and inflammatory diseases where oral administration is the preferred choice for patients.

Financial Highlights – Q2 2022

Research and Development Expenses

Research and development expenses incurred for the six months ended June 30, 2022 increased compared to the corresponding period in 2021 by €5.4 million to €21.7 million. This increase was primarily due to higher expenses for the Phase III part of the COVID-19 trial as well as costs for manufacturing development activities and was driven by an overall increase in third-party expenses of €4.3 million.

General and Administrative Expenses

General and administrative expenses increased by €3.0 million to €8.7 million for the six months ended June 30, 2022, from €5.7 million for the six months ended June 30, 2021. This increase is primarily attributable to higher expenses associated with equity-settled share-based compensation recognized in personnel expenses. Furthermore, legal, consulting and other expenses increased by €2.0 million to €4.2 million for the six months ended June 30, 2022, from €2.2 million, mainly due to consulting, implementation and testing costs of the internal control over financial reporting (ICFR) environment.

Other income

Other income for the six months ended June 30, 2022 amounted to €14.4 million. This was attributable to income recognized from grant payments received from the German federal government for the development of vilobelimab in COVID-19, including expenses related to clinical development and manufacturing process development.

Net Financial Result

Net Loss

Net loss for the six months ended June 30, 2022 was €13.5 million, compared to €20.9 million for the six months ended June 30, 2021.

Net Cash Used in Operating Activities

Cash, Cash Equivalents and Marketable Securities

On June 30, 2022, the Company’s total funds available were approximately €91.8 million, composed of cash and cash equivalents of €15.4 million and marketable securities of €76.4 million. These funds are expected to finance operations until year-end 2024.

Additional information regarding these results and other relevant information is included in the notes to the unaudited interim condensed consolidated financial statements as of June 30, 2022, and the three and six months ended June 30, 2022 and 2021, as well as the consolidated financial statements as of and for the year ended December 31, 2021 in “ITEM 18. Financial Statements,” in InflaRx’s Annual Report on Form 20-F for the year ended December 31, 2021 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, 2022 and 2021

	For the three months ended June 30,						For the six months ended June 30,
(in €, except for share data)		2022 (unaudited)			2021 (unaudited)			2022 (unaudited)		2021 (unaudited)

Operating Expenses
Research and development expenses		(11,180,958	)		(11,299,270	)		(21,652,881	)	(16,206,155	)
General and administrative expenses		(4,346,965	)		(2,697,839	)		(8,734,408	)	(5,720,177	)
Total Operating Expenses		(15,527,923	)		(13,997,109	)		(30,387,289	)	(21,926,332	)
Other income		14,441,541			15,216			14,443,135		20,678
Other expenses		(279	)		(279	)		(844	)	(844	)
Operating Result		(1,086,661	)		(13,982,172	)		(15,944,999	)	(21,906,498	)
Finance income		82,401			35,622			110,362		58,584
Finance expenses		(7,945	)		(3,050	)		(32,531	)	(6,734	)
Foreign exchange result		1,563,580			(826,303	)		2,291,513		905,367
Other financial result		(86,000	)		(5,000	)		39,000		43,000
Income Taxes		—			—			—		—
Income (Loss) for the Period		465,376			(14,780,903	)		(13,536,654	)	(20,906,280	)

Share Information
Weighted average number of shares outstanding		44,203,763			44,186,279			44,203,763		39,024,533
Income (Loss) per share (basic/diluted)		0.01			(0.33	)		(0.31	)	(0.54	)

Loss for the Period		465,376		(14.780.903)				(13,536,654	)	(20,906,280	)
Other comprehensive income (loss) that may be reclassified to profit or loss in subsequent periods:
Exchange differences on translation of foreign currency		4,408,940			(1,427,302	)		5,718,815		2,077,397
Total Comprehensive Income (Loss)		4,874,316			(16,208,205	)		(7,817,839	)	(18,828,883	)

InflaRx N.V. and subsidiaries

Unaudited Condensed Consolidated Statements of Financial Position as of June 30, 2022 and December 31, 2021

in €	June 30, 2022 (unaudited)			December 31, 2021

ASSETS
Non-current assets
Property and equipment		231,133			274,373
Right-of-use assets		1,506,039			1,408,078
Intangible assets		187,218			235,216
Other assets		341,666			336,566
Financial assets		237,412			27,206,990
Total non-current assets		2,503,468			29,461,224
Current assets
Current other assets		10,130,597			10,983,458
Current tax assets		1,518,072			1,282,177
Financial assets from government grants		8,260,503			—
Other financial assets		76,804,249			57,162,266
Cash and cash equivalents		15,416,152			26,249,995
Total current assets		112,129,573			95,677,896
TOTAL ASSETS		114,633,041			125,139,120

EQUITY AND LIABILITIES
Equity
Issued capital		5,304,452			5,304,452
Share premium		280,310,744			280,310,744
Other capital reserves		35,259,689			30,591,209
Accumulated deficit		(227,512,333	)		(213,975,679	)
Other components of equity		8,769,086			3,050,270
Total equity		102,131,638			105,280,996
Non-current liabilities
Lease liabilities		1,170,237			1,066,354
Other liabilities		37,733			35,019
Total non-current liabilities		1,207,970			1,101,373
Current liabilities
Trade and other payables		7,912,503			8,574,244
Liabilities from government grants received		2,145,135			8,300,000
Lease liabilities		370,153			366,171
Employee benefits		735,304			1,378,130
Other financial liabilities		130,338			138,206
Total current liabilities		11,293,433			18,756,751
Total Liabilities		12,501,404			19,858,124
TOTAL EQUITY AND LIABILITIES		114,633,041			125,139,120

InflaRx N.V. and subsidiaries

Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the six months ended June 30, 2022 and 2021

(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, 2022		5,304,452		280,310,744			30,591,209		(213,975,679	)		3,050,271			105,280,996
Loss for the period		—		—			—		(13,536,654	)		—			(13,536,654	)
Exchange differences on translation of foreign currency		—		—			—		—			5,718,815			5,718,815
Total comprehensive loss		—		—			—		(13,536,654	)		5,718,815			(7,817,839	)
Equity-settled share-based payment		—		—			4,668,481		—			—			4,668,481
Balance as of June 30, 2022		5,304,452		280,310,744			35,259,689		(227,512,333	)		8,769,086			102,131,638

Balance as of January 1, 2021		3,387,410		220,289,876			26,259,004		(168,345,620	)		(3,726,790	)		77,863,880
Loss for the period		—		—			—		(20,906,280	)		—			(20,906,280	)
Exchange differences on translation of foreign currency		—		—			—		—			2,077,397			2,077,397
Total comprehensive loss		—		—			—		(20,906,280	)		2,077,397			(18,828,883	)
Issuance of common shares and warrants		1,873,203		63,269,346			—		—			—			65,142,549
Transaction costs		—		(4,219,222	)		—		—			—			(4,219,222	)
Equity-settled share-based payment		—		—			2,687,779		—			—			2,687,779
Share options exercised		41,741		921,994			—		—			—			963,735
Balance as of June 30, 2021		5,302,354		280,261,994			28,946,783		(189,251,900	)		1,649,393			123,609,838

InflaRx N.V. and subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021

in €	For the six months ended June 30, 2022 (unaudited)			For the six months ended June 30, 2021 (unaudited)

Operating activities
Loss for the period		(13,536,654	)		(20,906,280	)
Adjustments for:
Depreciation & amortization of property and equipment, right-of-use assets and intangible assets		300,870			337,581
Net financial result		(2,408,345	)		(1,000,217	)
Share-based payment expense		4,668,481			2,687,779
Net foreign exchange differences		130,347			71,050
Changes in:
Financial assets from government grants		(8,260,503	)		—
Other assets		611,843			172,001
Employee benefits		(640,112	)		(662,388	)
Other liabilities		(7,867	)		7,020
Liabilities from government grants		(6,154,865	)		—
Trade and other payables		(661,741	)		672,727
Interest received		631,504			371,665
Interest paid		(32,039	)		(5,491	)
Net cash used in operating activities		(25,359,081	)		(18,254,553	)
Investing activities
Purchase of intangible assets, property and equipment		(9,728	)		(18,734	)
Purchase of current financial assets		(47,031,216	)		(27,535,842	)
Proceeds from the maturity of financial assets		59,595,044			29,497,122
Net cash from investing activities		12,554,101			1,942,546
Financing activities
Proceeds from issuance of common shares		—			65,142,549
Transaction costs from issuance of common shares		—			(4,219,222	)
Proceeds from exercise of share options		—			963,735
Repayment of lease liabilities		(182,014	)		(183,128	)
Net cash from (used in) financing activities		(182,014	)		61,703,934
Net decrease/increase in cash and cash equivalents		(12,986,995	)		45,391,927
Effect of exchange rate changes on cash and cash equivalents		2,153,152			999,820
Cash and cash equivalents at beginning of period		26,249,995			25,968,681
Cash and cash equivalents at end of period		15,416,152			72,360,428

About InflaRx N.V.:

InflaRx (Nasdaq: IFRX) is a clinical-stage biopharmaceutical company focused on applying its proprietary technology to discover and develop first-in-class or best-in-class, potent and specific inhibitors of C5a and C5aR. Complement C5a and its receptor C5aR are powerful inflammatory mediators 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.de.

The COVID-19 related work is partly funded by the German federal government through grant number 16LW0113 (VILO-COVID). All responsibility for the content of this work lies with InflaRx.

Contacts:

InflaRx N.V.

e-mail: IR@inflarx.de

MC Services AG

Katja Arnold, Laurie Doyle, Andreas Jungfer

e-mail: inflarx@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 InflaRx’s intentions, beliefs, projections, outlook, analyses and current expectations concerning, among other things, the Company’s ongoing and planned pre-clinical development and clinical trials, including the development of vilobelimab to treat pyoderma gangrenosum (PG) and critical COVID-19; the Company’s submission of an application to the FDA in the third quarter of 2022 for emergency use authorization for vilobelimab to treat critically ill COVID-19 patients; the impact of the COVID-19 pandemic on the Company; the timing and its ability to commence and conduct clinical trials; potential results from current or potential future collaborations; its ability to make regulatory filings, obtain positive guidance from regulators, and obtain and maintain regulatory approvals for its product candidates; its intellectual property position; its ability to develop commercial functions; expectations regarding clinical trial data; decisions regarding the strategic direction of the Company; its results of operations, cash needs, financial condition, liquidity, prospects, future transactions, growth and strategies; the industry in which the Company operates; the trends that may affect the industry or the Company; its status as foreign private issuer; and the risks, uncertainties and other factors described under the heading “Risk Factors” in InflaRx’s periodic filings with the SEC. 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 the Company’s 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 InflaRx assumes no obligation to update these forward-looking statements, even if new information becomes available in the future, except as required by law.

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