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INFLARX N.V. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - SEPTEMBER 30, 2022 These unaudited condensed financial statements are consolidated financial statements for the group consisting of InflaRx N.V. and it

Key Takeaway: UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - SEPTEMBER 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 Ph

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UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS - SEPTEMBER 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 NINE MONTHS ENDED SEPTEMBER 30, 2022
Unaudited Condensed Consolidated Financial Statements
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2022 and 2021 3
Unaudited Condensed Consolidated Statements of Financial Position as of September 30, 2022 and December 31, 2021 4
Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity for the nine months ended September 30, 2022 and 2021 5
Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 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) Significant events of the quarter and changes in circumstances 8
2. Other income 9
3. Net financial result 10
4. Other assets 11
5. Financial assets and financial liabilities 11
6. Cash and cash equivalents 12
7. Equity 12
8. Share-based payments 12
(d) Equity settled share-based payment arrangements 12
(e) Share-based payment expense recognized 14
9. Protective foundation 14
InflaRx N.V. and subsidiaries
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss
for the three and nine months ended September 30, 2022 and 2021
For the three months ended September 30, For the nine months ended September 30,
in , except for share data) Note 2022 unaudited 2021 (unaudited) 2022 (unaudited) 2021 (unaudited)
Operating Expenses
Research and development expenses (7,537,350 ) (9,359,850 ) (29,190,231 ) (25,566,005 )
General and administrative expenses (3,087,285 ) (3,395,606 ) (11,821,694 ) (9,115,783 )
Total Operating Expenses (10,624,636 ) (12,755,456 ) (41,011,925 ) (34,681,788 )
Other income 2 2,030,406 22,850 16,473,540 43,529
Other expenses - - (844 ) (844 )
Operating Result (8,594,230 ) (12,732,606 ) (24,539,229 ) (34,639,103 )
Finance income 3 199,758 27,380 310,121 85,964
Finance expenses 3 (6,845 ) (9,527 ) (39,376 ) (16,261 )
Foreign exchange result 3 882,370 715,799 3,173,883 1,621,165
Other financial result 3 (402,724 ) (56,000 ) (363,724 ) (13,000 )
Income Taxes - - - -
Loss for the Period (7,921,671 ) (12,054,955 ) (21,458,325 ) (32,961,235 )
Share Information
Weighted average number of shares outstanding 44,203,763 44,186,279 44,203,763 40,740,353
Loss per share (basic/diluted) (0.18 ) (0.27 ) (0.49 ) (0.81 )
Other comprehensive income (loss) that may be reclassified to profit or loss in subsequent periods:
Exchange differences on translation of foreign currency 4,317,134 2,536,278 10,035,949 4,613,675
Total Comprehensive Loss (3,604,538 ) (9,518,677 ) (11,422,376 ) (28,347,560 )
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, 2022 and December 31, 2021
(in ) Note September 30, 2022 (unaudited) December 31, 2021
ASSETS
Non-current assets
Property and equipment 218,148 274,373
Right-of-use assets 1,414,504 1,408,078
Intangible assets 162,963 235,216
Other assets 4 350,570 336,566
Financial assets 5 237,702 27,206,990
Total non-current assets 2,383,887 29,461,224
Current assets
Current other assets 4 7,574,507 10,983,458
Current tax assets 1,589,924 1,282,177
Financial assets from government grants 5 5,954,754 -
Other financial assets 5 75,636,548 57,162,266
Cash and cash equivalents 6 17,978,003 26,249,995
Total current assets 108,733,737 95,677,896
TOTAL ASSETS 111,117,624 125,139,120
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 36,172,229 30,591,209
Accumulated deficit (235,434,004 ) (213,975,679 )
Other components of equity 13,086,220 3,050,270
Total equity 99,439,640 105,280,996
Non-current liabilities
Lease liabilities 5 1,080,005 1,066,354
Other liabilities 39,879 35,019
Total non-current liabilities 1,119,884 1,101,373
Current liabilities
Trade and other payables 5 7,438,427 8,574,244
Liabilities from government grants 5 1,450,585 8,300,000
Lease liabilities 5 374,533 366,171
Employee benefits 1,151,288 1,378,130
Other liabilities 143,266 138,206
Total current liabilities 10,558,100 18,756,751
Total Liabilities 11,677,984 19,858,124
TOTAL EQUITY AND LIABILITIES 111,117,624 125,139,120
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 nine months ended September 30, 2022 and 2021
(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, 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 - - - - (21,458,325 ) - (21,458,325 )
Exchange differences on translation of foreign currency - - - - - 10,035,949 10,035,949
Total comprehensive loss - - - - (21,458,325 ) 10,035,949 (11,422,376 )
Equity-settled share-based payments 8 - - - 5,581,021 - - 5,581,021
Balance as of September 30, 2022* 44,203,763 5,304,452 280,310,744 36,172,229 (235,434,004 ) 13,086,220 99,439,640
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 - - - - (32,961,235 ) - (32,961,235 )
Exchange differences on translation of foreign currency - - - - - 4,613,675 4,613,675
Total comprehensive loss - - - - (32,961,235 ) 4,613,675 (28,347,560 )
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 - - - 3,823,592 - - 3,823,592
Share options exercised 8 347,842 41,741 921,994 - - - 963,735
Balance as of September 30, 2021* 44,186,279 5,302,354 280,261,994 30,082,596 (201,306,855 ) 886,884 115,226,973
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, 2022 and 2021
(in ) Note For the nine months ended September 30, 2022 (unaudited) For the nine months ended September 30, 2021 (unaudited)
Operating activities
Loss for the period (21,458,325 ) (32,961,235 )
Adjustments for:
Depreciation & amortization of property and equipment, right-of-use assets and intangible assets 448,323 502,605
Net finance income (3,080,904 ) (1,677,868 )
Share-based payment expense 7 5,581,021 3,823,592
Net foreign exchange differences 189,088 (3,185 )
Changes in:
Financial assets from government grants 5 (5,954,754 ) -
Other assets 3,087,177 (1,159,960 )
Employee benefits (221,982 ) (438,436 )
Other liabilities 5,061 12,130
Liabilities from government grants 5 (6,849,415 ) -
Trade and other payables (1,135,817 ) 3,259,223
Interest received 903,647 443,531
Interest paid (38,978 ) (15,072 )
Net cash used in operating activities Investing activities (28,525,857 ) (28,214,674 )
Purchase of intangible assets, property and equipment (17,908 ) (21,691 )
Purchase of current financial assets (47,031,216 ) (40,512,715 )
Proceeds from the maturity of financial assets 64,600,049 48,250,724
Net cash from investing activities 17,550,925 7,716,318
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 (273,092 ) (271,608 )
Net cash from (used in) financing activities (273,092 ) 61,615,454
Net decrease/increase in cash and cash equivalents (11,248,024 ) 41,117,098
Effect of exchange rate changes on cash and cash equivalents 2,976,033 2,881,645
Cash and cash equivalents at beginning of period 26,249,995 25,968,681
Cash and cash equivalents at end of period 5 17,978,003 69,967,424
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. (the "Company" or "InflaRx") 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 are 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, develop and manufacture 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.
These interim condensed consolidated financial statements for the three- and nine-month reporting periods ended September 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 the Company's
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 November 8, 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:
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:
Noncurrent and Classification of Liabilities as Current or Non-current
Accounting Estimates
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.
The COVID-19 pandemic continues to impact the Company's 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. However, during the first nine months of 2022, governments have lifted certain COVID-19 pandemic-related restrictions, which has continued to decrease the impact of the COVID-19 pandemic on the
Company's operations. In addition, during the first nine 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. Further, the Company's
service providers have continued to operate at regular levels and the Company has continued to recruit new patients and locate new clinical trial sites. Business travel, however, has been significantly reduced and widely replaced by other means of
communication (e.g., through video-conferencing).
Development programs
On July 7, 2022 the Company announced that the U.S. Food and Drug Administration (FDA) granted a Fast Track designation to the development of its first-in-class anti-C5a monoclonal antibody vilobelimab for the
treatment of ulcerative pyoderma gangrenosum (PG). The Company had submitted a request for Fast Track designation to the FDA on the positive outcome data in PG from its Phase IIa open-label dose-escalation study. The Company had previously
announced that vilobelimab was granted Orphan Drug designation for the treatment of PG by both the FDA in the U.S. and the European Medicines Agency (EMA) in Europe and that the Company had held a productive End-of-Phase II meeting with the
Division of Dermatology with the FDA related to its Phase III development plans in PG.
On September 8, 2022, the Company announced that the previously reported results from its Phase III trial of vilobelimab to treat critically ill, invasively mechanically ventilated COVID-19 patients have been published
in the peer-reviewed journal, The Lancet Respiratory Medicine. The article includes a description of the results from the Phase III, multicenter, randomized, double-blind, placebo-controlled (PANAMO) study,
as well as an in-depth statistical analysis confirming the robustness of the observed clinical survival benefit in the study.
On September 29, 2022, the Company announced that it submitted a request for Emergency Use Authorization (EUA) to the FDA for vilobelimab for the treatment of critically ill COVID-19 patients following encouraging
interactions with the FDA at a previously held Type B meeting. Additionally, it announced that the FDA has granted the Company Fast Track designation for vilobelimab for the treatment of critically ill, intubated, mechanically ventilated COVID-19
In August 2022, the Company announced the departure of Dr. Korinna Pilz, its Chief Clinical Development Officer who left the Company for personal reasons. The Company subsequently signed a separation agreement with Dr.
Pilz, in which they mutually agreed that Dr. Pilz would continue providing her services until October 28, 2022. After October 28, 2022, Dr. Pilz may continue to advise the Company on specific matters on an as-needed basis.
For the three months ended September 30, For the nine months ended September 30,
(in ) 2022 (unaudited) 2021 (unaudited) 2022 (unaudited) 2021 (unaudited)
Other income from government grants 2,019,684 - 16,435,051 -
Further other incomes 10,722 22,850 38,489 43,529
Total 2,030,406 22,850 16,473,540 43,529
Other income for the nine months ended September 30, 2022 was 16.5 million, which is primarily attributable to income recognized from grant payments received from the German federal government for the development of
vilobelimab in severe COVID-19 patients, including expenses related to clinical development and manufacturing process development,
A portion of the other income was attributable to the recognition of 7.1 million, which was initially deferred in Q4 2021 as a liability, because prior to Q2 2022, the Company did not have reasonable assurance as to
whether all grant conditions were fulfilled. In addition, the reimbursable portion of costs incurred under the government grant during the nine months ended September 30, 2022, in the amount of 9.3 million, were also recognized as other income.
The net financial result is comprised of the following items for the three and nine months ended September 30:
For the three months ended September 30, For the nine months ended September 30,
(in ) 2022 (unaudited) 2021 (unaudited) 2022 (unaudited) 2021 (unaudited)
Financial income
Interest income 199,758 27,380 310,121 85,964
Financial expenses
Interest expenses (878 ) (4,305 ) (22,980 ) (7,190 )
Interest on lease liabilities (5,967 ) (5,222 ) (16,396 ) (9,071 )
Total 192,913 17,853 270,745 69,703
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 September 30, For the nine months ended September 30,
(in ) 2022 (unaudited) 2021 (unaudited) 2022 (unaudited) 2021 (unaudited)
Foreign exchange result
Foreign exchange income 1,634,121 910,411 5,691,750 5,002,650
Foreign exchange expense (751,751 ) (194,612 ) (2,517,867 ) (3,381,485 )
Total 882,370 715,799 3,173,883 1,621,165
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 September 30, For the nine months ended September 30,
(in ) 2022 (unaudited) 2021 (unaudited) 2022 (unaudited) 2021 (unaudited)
Other financial result (402,724 ) (56,000 ) (363,724 ) (13,000 )
Other financial result is due to the expected credit loss allowance, which is deducted from the Company's current and non-current financial assets. The change is attributed to the current volatility in the capital
markets resulting in an increase to the credit default swap spread. This input impacts the valuation of the Company's securities.
Net financial result increased by 1.4 million to 3.1 million for the nine months ended September 30, 2022, from 1.7 million for the nine months ended September 30, 2021. This increase is mainly attributable to the
strengthening of the USD to EUR during 2022.
(in ) As of September 30, 2022 (unaudited) As of December 31, 2021
Non-current other assets
Prepaid expense 350,570 336,566
Total 350,570 336,566
Current other assets
Prepayments on research & development projects 6,793,444 10,649,174
Current tax assets 1,589,924 1,282,177
Prepaid expense 781,062 334,284
Total 9,164,431 12,265,635
Prepaid expense mainly consisted of prepaid insurance expense.
As of September 30, 2022, prepayments on research & development (R&D) projects amounted to 6.8 million compared to 10.6 million as of December 31, 2021, and consisted of prepayments on clinical and R&D
material production contracts.
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, 2022 and December 31, 2021:
(in ) As of September 30, 2022 (unaudited) As of December 31, 2021
Financial assets at amortized cost
Non-current financial assets 237,702 27,206,990
Financial assets from government grants 5,954,754 -
Other current financial assets 75,636,548 57,162,266
Financial liabilities at amortized cost
Liabilities from government grants 1,450,585 8,300,000
Trade and other payables 7,438,427 8,574,244
Interest bearing loans and borrowings
Non-current lease liabilities 1,080,005 1,066,354
Current lease liabilities 374,533 366,171
As of September 30, 2022, financial assets from government grants amount to 6.0 million. These 6.0 million are claims for eligible costs incurred as of Q3 2022, which the Company expects to request for payment in
future periods (also see Note 2).
As of September 30, 2022, the fair value of current and non-current financial assets (primarily quoted debt securities) amounted to 80.7 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. The Company's right to retain these funds is contingent on meeting all grant conditions.
(in ) As of September 30, 2022 (unaudited) As of December 31, 2021
Short-term deposits
Deposits held in U.S Dollars 3,744 12,584,892
Total 3,744 12,584,892
Cash at banks
Cash held in U.S. Dollars 15,169,816 7,612,467
Cash held in Euro 2,804,443 6,052,636
Total 17,974,259 13,665,103
Total cash and cash equivalents 17,978,003 26,249,995
On July 8, 2020, the Company filed a Form F-3 (Registration Statement) with the U.S. Securities and Exchange Commission (SEC) with respect to the offer and sale of securities of the Company. The Company also filed a
Last updated: Nov 9, 2022