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UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS - JUNE 30, 2021
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, 2021
Unaudited Condensed Consolidated Financial Statements
| Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2021 and 2020 | 3 | ||
| Unaudited Condensed Consolidated Statements of Financial Position as of June 30, 2021 and December 31, 2020 | 4 | ||
| Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity for the six months ended June 30, 2021 and 2020 | 5 | ||
| Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 | 6 | ||
| Notes to the Unaudited Condensed Consolidated Financial Statements | 7 | ||
| 1. | Summary of significant accounting policies and other disclosures | 7 | |
| (a) | Reporting entity and Group's structure | 7 | |
| (b) | Basis of preparation | 7 | |
| (c) | New and amended standards adopted by the Group | 7 | |
| (d) | Significant events of the quarter and changes in circumstances | 8 | |
| 2. | Net Financial Result | 10 | |
| 3. | Other assets | 11 | |
| 4. | Financial assets and financial liabilities | 11 | |
| 5. | Cash and cash equivalents | 12 | |
| 6. | Equity | 12 | |
| 7. | Share-based payments | 13 | |
| (e) | Equity settled share-based payment arrangements | 13 | |
| (f) | Share options exercised | 14 | |
| (g) | Share-based payment expense recognized | 14 | |
| 8. | Protective foundation | 14 | |
| 9. | Contractual Obligations and Commitments | 15 | |
| 10. | Subsequent Events | 15 |
InflaRx N.V. and subsidiaries
Unaudited Condensed Consolidated Statements of Operations and Comprehensive
for the three and six months ended June 30, 2021 and 2020
| For the three months ended June 30, | For the six months ended June 30, | ||||||||
| (in , except for share data) | Note | 2021 (unaudited ) | 2020 (unaudited) | 2021 (unaudited) | 2020 (unaudited) | ||||
| Operating Expenses | |||||||||
| Research and development expenses | (11,299,270) | (7,356,326) | (16,206,155) | (14,655,125) | |||||
| General and administrative expenses | (2,697,839) | (2,326,895) | (5,720,177) | (4,891,698) | |||||
| Total Operating Expenses | (13,997,109 ) | (9,683,221 ) | (21,926,332 ) | (19,546,822 ) | |||||
| Other income | 15,216 | 102,332 | 20,678 | 197,292 | |||||
| Other expenses | (279) | (3,450) | (844) | (9,170) | |||||
| Operating Result | (13,982,172 ) | (9,584,339 ) | (21,906,498 ) | (19,358,701 ) | |||||
| Finance income | 2 | 35,622 | 348,321 | 58,584 | 749,756 | ||||
| Finance expenses | 2 | (3,050) | (3,111) | (6,734) | (5,258) | ||||
| Foreign exchange result | 2 | (826,303) | (593,703) | 905,367 | 547,974 | ||||
| Other financial result | 2 | (5,000) | (200,000) | 43,000 | (200,000) | ||||
| Income Taxes | - | - | - | - | |||||
| Loss for the Period | (14,780,903 ) | (10,032,832 ) | (20,906,280 ) | (18,266,229 ) | |||||
| Share Information | |||||||||
| Weighted average number of shares outstanding | 44,186,279 | 26,172,023 | 39,024,533 | 26,138,639 | |||||
| Loss per share (basic/diluted) | (0.33) | (0.38) | (0.54) | (0.70) | |||||
| Loss for the Period | ( 14,780,903 ) | (10,032,832 ) | (20,906,280 ) | (18,266,229 ) | |||||
| Other comprehensive income (loss) that may be reclassified to profit or loss in subsequent periods: | |||||||||
| Exchange differences on translation of foreign currency | (1,427,302) | (1,452,973) | 2,077,397 | 260,895 | |||||
| Total Comprehensive Loss | (16,208,205 ) | (11,485,805 ) | (18,828,883 ) | (18,005,334 ) |
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, 2021 and December 31, 2020
| (in ) | Note | June 30, 2021 (unaudited) | December 31, 2020 | ||
| ASSETS | |||||
| Non-current assets | |||||
| Property and equipment | 334,556 | 408,263 | |||
| Right-of-use assets | 1,592,801 | 546,694 | |||
| Intangible assets | 291,969 | 350,183 | |||
| Other assets | 3 | 342,899 | 353,522 | ||
| Financial assets | 4 | 272,390 | 272,268 | ||
| Total non-current assets | 2,834,615 | 1,930,930 | |||
| Current assets | |||||
| Current other assets | 3 | 4,140,348 | 3,734,700 | ||
| Current tax assets | 852,464 | 1,419,490 | |||
| Financial assets | 4 | 54,837,260 | 55,162,033 | ||
| Cash and cash equivalents | 5 | 72,360,428 | 25,968,681 | ||
| Total current assets | 132,190,500 | 86,284,904 | |||
| TOTAL ASSETS | 135,025,116 | 88,215,834 | |||
| EQUITY AND LIABILITIES | |||||
| Equity | |||||
| Issued capital | 6 | 5,302,354 | 3,387,410 | ||
| Share premium | 6 | 280,261,994 | 220,289,876 | ||
| Other capital reserves | 28,946,783 | 26,259,004 | |||
| Accumulated deficit | (189,251,900) | (168,345,620) | |||
| Other components of equity | (1,649,393) | (3,726,791) | |||
| Total equity | 123,609,838 | 77,863,880 | |||
| Non-current liabilities | |||||
| Lease liabilities | 4 | 1,244,785 | 220,525 | ||
| Other liabilities | 33,990 | 33,323 | |||
| Total non-current liabilities | 1,278,775 | 253,847 | |||
| Current liabilities | |||||
| Trade and other payables | 4 | 8,930,859 | 8,258,133 | ||
| Lease liabilities | 4 | 360,221 | 338,516 | ||
| Employee benefits | 720,441 | 1,368,731 | |||
| Other liabilities | 124,982 | 117,727 | |||
| Provisions | - | 15,000 | |||
| Total current liabilities | 10,136,503 | 10,098,107 | |||
| Total Liabilities | 11,415,278 | 10,351,954 | |||
| TOTAL EQUITY AND LIABILITIES | 135,025,116 | 88,215,834 |
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'
for the six months ended June 30, 2021 and 2020
| (in , except for share data) | Note | Shares outstanding | Issued capital | Share premium | Other capital reserves | Accumulated deficit | Other compo- nents of equity | Total equity | |||||||
| 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 | 6 | 15,610,022 | 1,873,203 | 63,269,346 | - | - | - | 65,142,549 | |||||||
| Transaction costs | 6 | - | - | (4,219,222) | - | - | - | (4,219,222) | |||||||
| Equity-settled share-based payments | 7 | - | - | - | 2,687,779 | - | - | 2,687,779 | |||||||
| Share options exercised | 7 | 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 | ||||||||
| Balance as of January 1, 2020 | 26,105,255 | 3,132,631 | 211,006,606 | 25,142,213 | (134,362,006 ) | 2,227,228 | 107,146,673 | ||||||||
| Loss for the period | - | - | - | - | (18,266,229) | - | (18,266,229) | ||||||||
| Exchange differences on translation of foreign currency | - | - | - | - | - | 260,895 | 260,895 | ||||||||
| Total comprehensive loss | - | - | - | - | (18,266,229) | 260,895 | (18,005,334) | ||||||||
| Equity-settled share-based payments | 7 | - | - | - | 1,484,972 | - | - | 1,484,972 | |||||||
| Share options exercised | 7 | 164,974 | 19,797 | 477,149 | - | - | - | 496,946 | |||||||
| Balance as of June 30, 2020* | 26,270,229 | 3,152,427 | 211,483,756 | 26,627,185 | (152,628,234) | 2,488,124 | 91,123,258 |
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, 2021 and 2020
| (in ) | Note | For the six months ended June 30, 2021 (unaudited) | For the six months ended June 30, 2020 (unaudited) | ||
| Operating activities | |||||
| Loss for the period | (20,906,280) | (18,266,229) | |||
| Adjustments for: | |||||
| Depreciation & amortization of property and equipment, right-of-use assets and intangible assets | 337,581 | 353,976 | |||
| Net finance income | 2 | (1,000,217) | (1,092,472) | ||
| Share-based payment expense | 7 | 2,687,779 | 1,484,972 | ||
| Net foreign exchange differences | 71,050 | (789,528) | |||
| Other non-cash adjustments | - | ||||
| Changes in: | |||||
| Other assets | 172,001 | 560,449 | |||
| Employee benefits | (662,388) | (122,411) | |||
| Other liabilities | 7,020 | 341,012 | |||
| Trade and other payables | 672,727 | (1,783,200) | |||
| Interest received | 371,665 | 1,096,651 | |||
| Interest paid | (5,491) | (5,455) | |||
| Net cash used in operating activities | (18,254,553 ) | (18,222,235 ) | |||
| Investing activities | |||||
| Purchase of intangible assets, property and equipment | (18,734) | (35,107) | |||
| Purchase of current financial assets | (27,535,842) | (59,196,096) | |||
| Proceeds from the maturity of financial assets | 29,497,122 | 79,504,059 | |||
| Net cash from investing activities | 1,942,546 | 20,272,857 | |||
| 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 | 496,946 | ||
| Repayment of lease liabilities | (183,128) | (183,970) | |||
| Net cash from financing activities | 61,703,934 | 312,976 | |||
| Net increase in cash and cash equivalents | 45,391,927 | 2,363,597 | |||
| Effect of exchange rate changes on cash and cash equivalents | 999,820 | 903,700 | |||
| Cash and cash equivalents at beginning of period | 25,968,681 | 33,131,280 | |||
| Cash and cash equivalents at end of period | 5 | 72,360,428 | 36,398,578 |
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
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 Stra e 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
InflaRx is a clinical-stage biopharmaceutical Group focused on applying its proprietary anti-C5a technology to discover and develop first-in-class, potent and specific inhibitors of the complement activation factor
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.
These interim condensed consolidated financial statements for the three and six-month reporting periods ended June 30, 2021 and 2020 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, 2020 on Form 20-F.
The interim condensed consolidated financial statements were authorized for issue by the board of directors on August 4, 2021.
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, 2020, except for the adoption of new
standards effective as of January 1, 2021 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 below listed amendments and interpretations were adopted effective January 1, 2021, but did not have a material impact on the consolidated financial statements of the Group:
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:
vilobelimab in pyoderma gangraenosum (PG)
In April 2021, the Company announced the completion of enrollment in its Phase IIa proof-of-concept clinical study with vilobelimab in PG. This open-label trial enrolled 18 patients with moderate to severe PG at sites
in the U.S., Canada and Europe. Patients in three different ascending dose groups are being treated with vilobelimab for 27 weeks with a two-month follow-up period. The main objectives of the study are the evaluation of the safety and efficacy of
vilobelimab in patients with PG. Top-line data from this study are expected to be available in the first half of 2022.
Vilobelimab for Hidradenitis Suppurativa (HS)
In 2021, the Company submitted a Special Protocol Assessment (SPA) to the U.S. FDA for the Phase III HS program, and in May the Company received an official response. The FDA agreed to the dosing regimen in the
protocol but did not agree with the assessment of the primary endpoint using the International Hidradenitis Suppurativa Severity Score (IHS4). At the FDA's suggestion, in July the Company has requested a Type A meeting to discuss the primary
endpoint measure in more detail.
Once the Company receives final feedback from the FDA on the proposed Phase III primary endpoint, the Company will determine the best path forward for the global development program in HS.
vilobelimab in ANCA-associated vasculitis (AAV)
In May 2021, the Company announced results from its US Phase IIa clinical study in AAV patients (IXPLORE). The results of the IXPLORE trial show vilobelimab is safe and well tolerated when added to standard of care therapy for AAV. These results
support the continued study of vilobelimab for the treatment of AAV.
vilobelimab in cutaneous squamous cell carcinoma (cSCC)
In June 2021, the Company announced the dosing of the first patient in the multicenter Phase II clinical trial with vilobelimab in cSCC. So far, a total of three patients have been enrolled in the monotherapy arm. A
safety assessment after at least five weeks of treatment will determine continuation of enrollment in the monotherapy and opening of the combination arm. The Phase II clinical trial is expected to enroll approximately 70 patients at sites in
Europe, the U.S. and elsewhere. The study will investigate two independent arms: vilobelimab alone and vilobelimab in combination with pembrolizumab. The main objectives of the trial are to assess the safety and antitumor activity of vilobelimab
monotherapy and to determine the maximum tolerated or recommended dose, safety and antitumor activity in the combination arm.
The COVID-19 pandemic, which began in December 2019 has spread worldwide and continues to cause many governments to maintain measures to slow the spread of the outbreak through quarantines, travel restrictions, closure
of borders and requiring maintenance of physical distance between individuals.
During the first six months of 2021, the Company`s employees have continued to be able to work from their home offices and partially return to the Company's offices. Our service providers also continued at regular
operational levels and the recruitment of patients and new clinical trial sites likewise continued in the first six month of 2021 through the date of issuance of these interim financial statements.
The Phase III part of the global Phase II/III trial evaluating vilobelimab in mechanically ventilated patients with COVID-19 was initiated in mid-September 2020, and recruitment has reached 299 patients, with 49 sites
initiated across several countries in the U.S., Europe, Latin America and other regions. An interim analysis by an independent data monitoring committee took place in July 2020 analyzed the data of the first 180 patients evaluable for the 28-day
mortality endpoint that completed the study and led to the recommendation to continue the study as planned.
Changes to the Board and Management
Ms. Katrin Uschmann did not stand for re-election as member of the Board at the Annual General Meeting on May 19, 2021
On May 19, 2021, Mr. Anthony Gibney was elected as Member of the Board and to the Audit Committee.
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 ) | 2021 (unaudited) | 2020 (unaudited) | 2021 (unaudited) | 2020 (unaudited) | |||
| Financial income | |||||||
| Interest income | 35,622 | 348,321 | 58,584 | 749,756 | |||
| Financial expenses | |||||||
| Interest expenses | (305) | (1,063) | (2,885) | (1,063) | |||
| Interest on lease liabilities | (2,745) | (2,048) | (3,849) | (4,195) | |||
| Total | 32,572 | 345,210 | 51,850 | 744,498 |
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 ) | 2021 (unaudited) | 2020 (unaudited) | 2021 (unaudited) | 2020 (unaudited) | |||
| Foreign exchange result | |||||||
| Foreign exchange income | 1,635,201 | 261,123 | 4,092,239 | 1,518,680 | |||
| Foreign exchange expense | (2,461,504) | (854,826) | (3,186,872) | (970,706) | |||
| Total | (826,303) | (593,703) | 905,367 | 547,974 |
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 ) | 2021 (unaudited) | 2020 (unaudited) | 2021 (unaudited) | 2020 (unaudited) | |||
| Other financial result | (5,000) | (200,000) | 43,000 | (200,000) |
Other financial result includes an allowance for expected credit loss on marketable securities.
| (in ) | As of June 30, 2021 (unaudited) | As of December 31, 2020 | |
| Non-current other assets | |||
| Prepaid expense | 342,899 | 353,522 | |
| Total | 342,899 | 353,522 | |
| Current other assets | |||
| Prepayments on research & development projects | 3,117,593 | 2,340,643 | |
| Current tax assets | 852,464 | 1,419,490 | |
| Prepaid expense | 1,022,755 | 1,295,682 | |
| Other | - | 98,374 | |
| Total | 4,992,812 | 5,154,190 |
Prepaid expense mainly consists of prepaid insurance expense.
Prepayments on research & development projects consists of prepayments on clinical and production contracts. Mainly due to higher expense for the phase III part of our COVID-19 trial and the payments made under the
related CRO contract, prepayments have increased as of June 30, 2021 compared to December 31, 2020.
Current tax assets as of June 30, 2021 mainly include VAT of 0.2 million and tax reclaims because of dividend tax withheld of 0.6 million. Such tax is withheld by our banks from securities interest payments, and the
Company and its subsidiaries is reimbursed after filing a tax return.
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, 2021 and December 31, 2020:
| (in ) | As of June 30, 2021 (unaudited) | As of December 31, 2020 | |
| Financial assets at amortized cost | |||
| Non-current financial assets | 272,390 | 272,268 | |
| Current financial assets | 54,837,260 | 55,162,033 | |
| Financial liabilities at amortized cost | |||
| Trade and other payables | 8,930,859 | 8,258,133 | |
| Interest bearing loans and borrowings | |||
| Non-current lease liabilities | 1,244,785 | 220,525 | |
| Current lease liabilities | 360,221 | 338,516 |
As of June 30, 2021, the fair value of current and non-current financial assets (primarily quoted debt securities) amounted to 55,057 thousand (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.
In May 2021, the Company entered into an agreement to amend its original lease of office space in Martinsried, Germany, by extending the contractual lease term for an additional five years. This resulted in an 1,046
thousand increase to the lease obligation and associated right-of-use asset.
| (in ) | As of June 30, 2021 (unaudited) | As of December 31, 2020 | |
| Short-term deposits | |||
| Deposits held in U.S. Dollars | 61,456,114 | 22,616,767 | |
| Deposits held in Euro | - | 1,800,000 | |
| Total | 61,456,114 | 24,416,767 | |
| Cash at banks | |||
| Cash held in U.S. Dollars | 3,947,500 | 362,788 | |
| Cash held in Euro | 6,956,814 | 1,189,126 | |
| Total | 10,904,314 | 1,551,914 | |
| Total cash and cash equivalents | 72,360,428 | 25,968,681 |
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 with the SEC a prospectus supplement (Prospectus Supplement) relating to an at-the-market program providing for the sale of up to $50,000,000 of its common shares over time pursuant a Sales Agreement with SVB Leerink
During the three months ended March 31, 2021, the Company issued 610,022 common shares under its at-the-market program resulting in 2.8 million in net proceeds. No common shares were issued under this program in the
second quarter of 2021. Following these and previous issuances under this program, the remaining value authorized for sale under the Sales Agreement amounts to $35.2 million.