INFLARX N.V. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - SEPTEMBER 30, 2019 These unaudited condensed financial statements are consolidated financial statements for the group consisting of InflaRx N.V. and it

UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS - SEPTEMBER 30, 2019

These unaudited condensed financial statements are consolidated financial statements for the group consisting of InflaRx N.V. and its wholly-owned subsidiaries InflaRx GmbH, 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 NINE MONTHS ENDED SEPTEMBER 30, 2019

InflaRx N.V. and subsidiaries

Unaudited Condensed Consolidated Statements of Comprehensive Loss

for the three and nine months ended September 30, 2019 and 2018,

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 September 30, 2019 and December 31, 2018

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 nine months ended September 30, 2019 and 2018

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 nine months ended September 30, 2019 and 2018

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

1. Net Financial Result

The net financial result is comprised of the following items for the three and nine months ended September 30:

On the reporting date, assets and liabilities are translated at the closing rate. Any foreign exchange rate di erences derived from these translations are recognized in the consolidated statement of profit or loss as

part of finance income.

Interest income results from marketable securities held by the Company and short-term deposits in U.S. Dollar held by the Company and its subsidiary InflaRx GmbH.

Foreign exchange income and expense is mainly derived from the translation of the U.S. Dollar cash, cash equivalents and securities held by InflaRx GmbH. These funds are translated at the exchange rates prevailing on

the reporting date. Any resulting translation di erences are recognized in pro t or loss. U.S. Dollar denominated funds of the Company do not materially impact foreign exchange results, as the Company changed its functional currency from Euro to

U.S. Dollar on January 1, 2019.

2. Other non-financial assets

Prepaid expense mainly consists of accrued insurance expense in connection with the placement of shares in May 2018 and for Directors and Officers insurance. The long-term portion was disclosed under non-current

assets for the first time. Total prepaid expense has decreased compared to December 31, 2018, as these are predominantly annual insurance payments in the fourth quarter of the year. Current tax assets in 2019 include tax reclaims because of capital

yields tax withheld. Such tax is withheld by our banks from securities interest payments, the Company gets reimbursed after filing the tax return. The increase is due to the securities purchased in the third quarter of 2018.

3. Financial assets and financial liabilities

Set out below is an overview of financial assets and liabilities, other than cash and short-term deposits, held by the Group as of September 30, 2019 and December 31, 2018:

The fair value of current and non-current financial assets (primarily quoted debt securities) amounted to 109,487 thousand (level 1). The Group's debt instruments at amortized cost consist solely of quoted securities

that are graded in the top investment category (AA- to AAA) by credit rating agencies such as S&P Global and, therefore, are considered low credit risk investments. Based on statistical historical probabilities of default, adjusted for

forward-looking factors specific to the debtors and the economic environment, the Group believes that the expected credit losses for these debt instruments are immaterial. Furthermore, since the acquisition of these debt securities, their credit

ratings have remained stable.

4. Cash and cash equivalents information

5. Related party transactions

The Group's executive management comprises the following persons:

The Group's board of directors comprises the following persons:

Non-executive Directors

The compensation of the Group's executive management comprises the following for the three and nine months ended September 30:

Remuneration of InflaRx's executive management consists of fixed and variable components and share-based payment awards. In addition, the executive management receives supplementary benefits and allowances.

We entered into indemnification agreements with our directors and senior management. The indemnification agreements and our articles of association require us to indemnify our directors and certain officers and

employees as designated by our board of directors to the fullest extent permitted by law.

6. Share-based payments

In conjunction with the closing of its initial public offering, InflaRx N.V. established a new incentive plan (the "2017 Long-Term Incentive Plan"). The initial maximum number of common shares available for issuance

under equity incentive awards granted pursuant to the 2017 Long Term Incentive Plan equals 2,341,097 common shares. The number of share options under the plan was as follows:

On January 1, 2021 and on January 1 of each calendar year thereafter, an additional number of shares equal to 3% of the total outstanding common shares on December 31 of the immediately preceding year (or any lower

number of shares as determined by the board of directors) will become available for issuance under equity incentive awards granted pursuant to the 2017 Long-Term Incentive Plan.

On July 3, 2019, the board approved an amendment of the 2016 Stock Option Plan and the 2017 Long-Term Incentive Plan. Following the amendment, the strike price of all vested and unvested options, other than those held

by persons who were not employees or directors at the time of the amendment, was reduced to $3.35 per share.

The repricing decision on July 3, 2019 affected the 2016 Plan and the 2017 Long-Term Incentive Plan. Since the repricing, no new grants have been made. The valuation of past grants with the new strike price of $3.35

resulted in incremental fair values of the outstanding options, i.e. additional compensation expense had to be recognized. We refer to the table below regarding the measurement of fair values of stock options granted.

In 2019, 140,876 shares were issued following the exercise of stock options, resulting in proceeds to the Company in the amount of 1.7 thousand. All stock options exercised were granted under the 2012 Stock Option

In 2018, 302,279 shares were issued following the exercise of stock options, resulting in proceeds to the Company in the amount of 452.0 thousand. All stock options exercised were granted under the 2016 Stock Option

The fair value of options granted in the nine months ended September 30, 2019 under the 2017 Long-Term Incentive Plan was determined using the Black-Scholes valuation model. Since the Company's common shares are listed

on the Nasdaq Global Select Market, the closing price of the common shares at grant date was used. The modification, resulting from the repricing as described above, increased the fair value of the equity instruments granted under the 2017

Long-Term Incentive Plan and the 2016 Plan. In accordance with IFRS 2.B43, the incremental fair value is recognized over the remaining vesting period, whereas the balance of the grant-date fair value is recognized immediately for fully vested

options, or over the remaining original vesting period. The incremental fair value is the difference between the fair value of the modified share-based payment and that of the original share-based payment, both measured at the date of the

modification - i.e. July 3, 2019.

Other significant inputs into the model are as follows (weighted average):

Expected volatility has been based on an evaluation of the historical and implied volatility of a peer group of companies. The range of outcomes for the expected life of the instruments has been based on expectations

on option holder behavior in the scenarios considered.

The dividend yield has no impact due to the anti-dilution clause as defined in the LTI.

Expenses are determined based on the number of stock options granted within a tranche and the vesting period of a tranche. This implies two effects:

For example, 33.33% of all stock options granted are allocated to the first tranche which vests over 1 year after the grant date, whereas 8.33% of all stock options granted are allocated to the ninth tranche which

vests over three years. Therefore, the expenses recognized from the granted share options under the 2017 Long-Term Incentive plan were 0 in 2016, 0.6 million in 2017, 12.1 million for 2018 and are anticipated to be 6.2 million for 2019, 2.4

million for 2020, 0.2 million for 2021 and 0 million for 2022 (anticipated expenses were converted with the exchange rate as of September 30, 2019, 1 Euro = 1.0889 USD).

In the three-month period ended September 30, 2019 and 2018, compensation expense was recognized from the Long-Term Incentive Plan: in 2019, 1.0 million, in 2018, 3.1 million. As a result of the repricing of stock

options, consummated on July 3, 2019, an incremental fair value of 1.0 million of compensation expense was recognized from the 2017 Long-Term Incentive Plan and the 2016 Plan in the three-month period ended September 30, 2019.

In the nine-month period ended September 30, 2019 and 2018, compensation expense was recognized from the Long-Term Incentive Plan: in 2019, 4.9 million, in 2018, 9.0 million. As a result of the repricing of stock

options, consummated on July 3, 2019, an incremental fair value of 1.0 million of compensation expense was recognized from the 2017 Long-Term Incentive Plan and the 2016 Plan in the nine-month period ended September 30, 2019.

None of the share-based payments awards were dilutive in determining earnings per share due to the Group's loss position.

7. Protective foundation

According to the articles of association of the Company, up to 55,000,000 common shares and up to 55,000,000 preferred shares with a nominal value of 0.12 per share are authorized to be issued. All shares are

registered shares. No share certificates have been issued.

The Companys general meeting of shareholders approved the right of an independent foundation under Dutch law, or protective foundation, to acquire up to 100% of the Companys issued share capital held by others than

the protective foundation, minus one share, pursuant to a call option agreement entered into between us and such foundation, in order to deter acquisition bids. 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