INFLARX N.V. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - SEPTEMBER 30, 2020 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, 2020

These unaudited condensed financial statements are consolidated financial statements for the group consisting of InflaRx N.V. and its wholly-owned subsidiaries InflaRx GmbH, Jena, Germany, and

InflaRx Pharmaceutical Inc., Ann Arbor, Michigan, United States (together, the "Group"). The financial statements are presented in Euro ( ).

InflaRx N.V. is a company limited by shares, incorporated and domiciled in Amsterdam, The Netherlands.

Its registered office and principal place of business is in Germany, Jena, Winzerlaer Str. 2.

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020

InflaRx N.V. and subsidiaries

Unaudited Condensed Consolidated Statements of Operations and Comprehensive

for the three and nine months ended September 30, 2020 and 2019

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, 2020 and December 31, 2019

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 nine months ended September 30, 2020 and 2019

InflaRx N.V. and subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

for the nine months ended September 30, 2020 and 2019

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

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

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

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

Other finance expenses for the three months ended September 30, 2020 includes a 0.1 million gain from a reduction in the allowance for expected credit loss on marketable securities (2019: nil). Cumulative net expense

from expected credit loss on marketable securities included in other finance expenses amounted to 0.1 million for the nine months ended September 30, 2020 (2019: nil).

Prepaid expense mainly consists of prepaid insurance expense. Total prepaid expense as of September 30, 2020 decreased as compared to December 31, 2019, primarily due to amortization of prepayments of Directors and

Officers insurance which is prepaid annually in the fourth quarter of the year.

Prepayments on research & development projects consists of prepayments on clinical and production contracts. Mainly due to our COVID-19 trial and the related CRO contract, prepayments have increased as of September

30, 2020 compared to December 31, 2019.

Current tax assets as of September 30, 2020 include tax reclaims because of dividend tax withheld. Such tax is withheld by our banks from securities interest payments, and the Company is reimbursed after filing a tax

Set out below is an overview of financial assets and liabilities, other than cash and cash equivalents, held by the Group as of September 30, 2020 and December 31, 2019:

As of September 30, the fair value of current and non-current financial assets (primarily quoted debt securities) amounted to 50,849 thousand (Level 1). The Group's debt instruments at amortized cost consist solely of

quoted securities that are graded in the top investment category (AAA) by credit rating agencies such as S&P Global and, therefore, are considered low credit risk investments.

On July 7, 2020, the Company filed with the United States Securities and Exchange Commission (SEC) a Form F-3 with respect to the offer and sale of securities of the Company (Registration Statement). The Company also

filed with the SEC a prospectus supplement (Prospectus Supplement) relating to an at-the-market program providing for the sales over time of up to $50,000,000 of its common shares pursuant a Sales Agreement with SVB Leerink LLC.

As of September 30, 2020, the Company had issued 1,958,186 common shares resulting in 9.0 million in net proceeds to the Company. Following these issuances, the remaining value authorized for sale under the

at-the-market program is $38.8 million.

During its historical financing rounds prior to 2016 InflaRx GmbH established equity-settled share-based payment programs. Those InflaRx GmbH options were converted into options for common shares of InflaRx N.V. in

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:

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 granted during the nine months ended September 30, 2020 under the plan was as follows:

Of the 96,188 options granted in the nine months ended September 30, 2020, 50,000 were granted to members of the executive management or Board of Directors. At the meeting on September 18, 2020, the Board also passed

a resolution to grant 150,000 options to a member of the executive management upon start of the employment, therefore, these options are deemed granted, as it is defined by IFRS 2, on October 1, 2020 and will be reflected in the financial

statements for the year ended December 31, 2020.

Expected dividends are nil for all share options listed above.

The number of share options granted during the nine months ended September 30, 2019 under the plan was as follows:

* On July 3, 2019, the board approved an amendment of the 2016 Option Plan and the 2017 Long-Term Incentive Plan. Following the amendment, the strike price of all vested and unvested options, other than those held by persons who were not

employees or directors at the time of the amendment, was reduced to $3.35 per share.

None of the options granted in the nine months ended September 30, 2019 were granted to members of the executive management or Board of Directors.

Expected dividends are nil for all share options listed above.

The annual general meeting on July 16, 2020, approved an amendment to the 2017 Long-Term Incentive Plan (LTIP) with effect from January 1, 2021:

Due to terminations in the third quarter of 2020, effective July 1, 2020, we have revised our assumptions about the number of equity instruments that will vest in future quarters. As a result of this change in

estimate, we recognized a benefit of 53.1 thousand in research and development expenses and a benefit of 63.4 thousand in general and administrative expenses in the three months ended September 30, 2020, and we will record 52.7 thousand less

expense in research and development expenses and 36.8 thousand less expense in general and administrative expenses from share-based payments in the remaining vesting periods until June 30, 2022.

In the nine months ended September 30, 2020, 164,974 shares were issued upon the exercise of share options, resulting in proceeds to the Company in the amount of 497 thousand. Of the share options exercised, 86,632

were granted under the 2016 Share Option Plan and 78,342 were granted under the 2017 Long-Term Incentive Plan.

In the nine months ending September 30, 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 Plan.

For the three and nine months ended September 30, 2020, the Company has recognized (588) thousand and 897 thousand, respectively, (2019: 1,001 thousand, 5,689 thousand) of share-based payment expense/(benefit) in

the statements of operations and comprehensive loss. The gain recognized in the three months ended September 30, 2020 includes an adjustment for forfeited share options.

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

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

registered shares. No share certificates shall be issued.

In order to deter acquisition bids, the Company`s general meeting of shareholders approved the right of an in-dependent foundation under Dutch law, or protective foundation, to exercise a call option pursuant to the

call option agreement, upon which preferred shares will be issued by the Company to the protective foundation of up to 100% of the Company's issued capital held by others than the protective foundation, minus one share. The protective foundation is

expected to enter into a finance arrangement with a bank or, subject to applicable restrictions under Dutch law, the protective foundation may request us to provide, or cause the Company's subsidiaries to provide, sufficient funding to the

protective foundation to enable it to satisfy its payment obligation under the call option agreement.

These preferred shares will have both a liquidation and dividend preference over the Company`s common shares and will accrue cash dividends at a pre-determined rate. The protective foundation would be expected to

re-quire us to cancel its preferred shares once the perceived threat to the Company and its stake-holders has been removed or sufficiently mitigated or neutralized. We are of the opinion that the call option does not represent a significant fair

value based on a Level 3 valuation, since the preference shares are restricted in use and can be can-celled by us as stated above.

In the three and nine months ended September 30, 2020, the Company expensed 15 thousand and 45 thousand, respectively, (2019: 18 thousand, 68 thousand) of ongoing costs to reimburse expenses incurred by the

protective foundation.

Anticipated future expenses were converted with the exchange rate as of September 30, 2020 (1 Euro = 1.1708 USD), respectively December 31, 2019 (1 Euro = 1.1234 USD).

The increase of our contractual commitments within one year compared to December 31, 2019, is mainly caused by the initiation of the Phase III part in Q3-2020 of our adaptive randomized Phase II/III trial in patients

with severe COVID-19 induced pneumonia.

The Group enters contracts in the normal course of business with CROs and clinical sites for the conduct of clinical trials, professional consultants for expert advice and other vendors for clinical supply

manufacturing or other services.

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