6-K

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 of the Securities Exchange Act of 1934

November 21, 2018

Commission File Number: 001-38283 

__________________________________

InflaRx N.V.

__________________________________

Winzerlaer Str. 2 

07745 Jena, Germany

(+49) 3641 508180 

(Address of principal executive offices)

__________________________________

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): ☐

INCORPORATION BY REFERENCE

Exhibits 99.1 and 99.2 to this Report on Form 6-K shall be deemed to be incorporated by reference into the registration statement on Form S-8 (Registration Number 333-221656) of InflaRx N.V. and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.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 (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 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, in the City of Jena, Germany, November 21, 2018.

INFLARX N.V.
By:	/s/ Niels Riedemann
	Name:	Niels Riedemann
	Title:	Chief Executive Officer

EXHIBIT INDEX

Exhibit	Description of Exhibit
99.1	InflaRx N.V. Unaudited Condensed Consolidated Financial Statements as of and for the Three and Nine Months Ended September 30, 2018
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 November 21, 2018

EX-99.1

Exhibit 99.1 

InflaRx N.V.

Amsterdam

Condensed Consolidated Interim

Financial Statements

InflaRx N.V. and subsidiaries

Unaudited condensed consolidated statements of comprehensive loss

		For the three months ended September 30,		For the nine months ended September 30,
in € thousand	Note	2017	2018	2017	2018
Other income and expenses (net)		81	59	111	176
Research and development expenses		(2,606)	(5,451)	(8,108)	(15,955)
General and administrative expenses		(692)	(3,042)	(2,038)	(9,200)
Loss before interest and income taxes		(3,216)	(8,434)	(10,035)	(24,979)
Finance income		8	2,101	8	8,107
Finance expense		(849)	(441)	(2,504)	(2,666)
Finance result	9	(841)	1,660	(2,496)	5,441
Loss for the period		(4,057)	(6,774)	(12,530)	(19,538)
Other comprehensive loss for the period		2	42	0	26
Total comprehensive loss		(4,055)	(6,732)	(12,530)	(19,512)
Loss per common share in € (basic/diluted)		(1.7)	(0.3)	(5.3)	(0.8)
Number of common shares (in thousand) used
to calculate the loss per common share,
basic & diluted		2,363	25,662	2,363	24,804

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

InflaRx N.V. and subsidiaries

Condensed consolidated statements of financial position

in € thousand	Note	31.12.2017	30.09.2018
ASSETS
Non-current assets
Intangible assets		41	45
Laboratory and office equipment		173	602
Securities	4	0	51,628
Other financial assets	4	20	202
Total non-current assets		233	52,477
Current assets
Other assets	3	697	863
Other financial assets	4	0	799
Securities and other Investments	4	0	54,142
Cash and cash equivalents	5	123,282	56,349
Total current assets		123,979	112,153
Total assets		124,212	164,630
EQUITY AND LIABILITIES
Equity
Issued capital	6	2,858	3,112
Other reserves	8	167,864	226,279
Accumulated deficit		(51,293)	(70,830)
Total equity		119,429	158,561
Non-current liabilities
Deferred income		15	12
Provisions		2	54
Total non-current liabilities		17	66
Current liabilities
Trade payables		4,464	1,383
Other liabilities, provisions		302	4,619
Total current liabilities		4,766	6,003
Total equity and liabilities		124,212	164,630

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

InflaRx N.V. and subsidiaries

Unaudited condensed consolidated statements of changes in equity

					Other reserves
in € thousand		Note	Issued capital	Capital reserve	currency translation	share-based payments	Accumulated deficit	Own shares	Total equity
Balance as of January 1, 2017			31	0	9	1,675	(27,055)	(350)	(25,690)
Comprehensive loss
Loss for the period			0	0	0	0	(12,530)	0	(12,530)
Other comprehensive income / Exchange differences			0	0	(9)	0	0	0	(9)
Total comprehensive loss			0	0	(9)	0	(12,530)	0	(12,539)
Recognition of equity-settled share-based payments		8	0	0	0	2,081	0	0	2,081
Balance as of September 30, 2017			31	0	0	3,756	(39,585)	(350)	(36,148)
Balance as of January 1, 2018			2,858	161,639	0	6,225	(51,293)	0	119,429
Comprehensive loss
Loss for the period			0	0	0	0	(19,538)	0	(19,538)
Exchange differences			0	0	25	0	0	0	25
Total comprehensive loss			0	0	25	0	(19,538)	0	(19,512)
Recognition of equity-settled share-based payments		8	0	0	0	9,004	0	0	9,004
Issue of share capital
	Issued shares	6	255	53,188	0	0	0	0	53,443
	Transaction costs	6	0	(3,801)	0	0	0	0	(3,801)
Total issue of share capital			255	49,386	0	0	0	0	49,641
Balance as of September 30, 2018			3,113	211,025	25	15,229	(70,830)	0	158,561

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

InflaRx N.V. and subsidiaries

Unaudited condensed consolidated statement of cash flows

			For the nine months ended September 30,
in € thousand		Note	2017	2018
Cash flow from Operations
Loss for the period before taxes			(12,530)	(19,538)
Reconciliation from result before taxes to net cash flows
	Depreciation/amortization of intangible assets, laboratory and office equipment		52	104
	Share based payment expense	8	2,081	9,004
	Finance income	9	(8)	(8,107)
	Finance costs	9	2,504	2,690
	other non-cash adjustments		(23)	(689)
	Change in Provisions and Government Grants		1,659	1,605
Working capital adjustments
	Change in Trade payables and other liabilities		(696)	(319)
	Change in other assets		(1,471)	(965)
	Interest received		8	980
Cash flow from Operations			(8,426)	(15,235)
Cash flow from investing activities
	Cash outflow from the purchase of intangible assets, laboratory and office equipment		(87)	(538)
	Cash outflow for the investment in non-current other financial assets		(19)	(201)
	Proceeds from the disposal of non-current other financial assets		0	19
	Proceeds from the disposal of current other investments		0	6,161
	Purchase of securities and current other investments		0	(110,852)
Net cash flows used in investing activities			(106)	(105,411)
Financing activities
	Proceeds from issuance of stock		0	53,443
	Transaction cost from issuance of stock		0	(3,801)
	Proceeds from issuance of preferred shares		1,500	0
Net cash flows from financing activities			1,500	49,641
Effect of exchange rate changes			0	4,073
Change in cash and cash equivalents			(7,032)	(66,933)
Net change in cash and cash equivalents			(7,031)	(66,933)
	Cash and cash equivalents at beginning of period		29,117	123,282
Cash and cash equivalents at end of period			22,086	56,349

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

InflaRx N.V. and subsidiaries

Index to notes to the condensed consolidated interim financial statements

(1)	Reporting entity	2
(2)	Basis for preparation and changes to Group’s accounting policies	2
(3)	Other assets	2
(4)	Financial assets and financial liabilities	2
(5)	Cash and cash equivalents	2
(6)	Issue of share capital	2
(7)	Protective foundation	2
(8)	Share-based payments	2
(9)	Finance result	2
(10)	Related parties	2

1

InflaRx N.V. and subsidiaries

Notes to the condensed consolidated interim financial statements

(1) Reporting entity

The condensed consolidated interim financial statements of InflaRx N.V. (in the following, “InflaRx” or the “Company”) and its subsidiaries for the nine months ended September 30, 2018 were authorized for issue in accordance with a resolution of the directors on November 20, 2018.

InflaRx N.V., is a Dutch public company with limited liability (naamloze vennootschap), incorporated in the Netherlands (Commercial Register of The Netherlands Chamber of Commerce Business Register under CCI number 68904312) and domiciled in Jena, Germany. The registered office is located in Jena, Germany, Winzerlaer Straße 2. The Company`s shares are publicly traded on the Nasdaq Global Select Market under the symbol IFRX.

InflaRx is a clinical-stage biopharmaceutical company focused on applying its proprietary technology to discover and develop first-in-class potent and specific inhibitors of the complement activation factor known as C5a.

These condensed consolidated interim financial statements (in the following “financial statements”) of InflaRx comprise the Company and its wholly-owned subsidiaries InflaRx GmbH and InflaRx Pharmaceutical Inc., a Delaware corporation (together, the “Group”).

(2) Basis for preparation and changes to Group’s accounting policies

a) Statement of compliance

The financial statements for the three and nine months ended September 30, 2018 have been prepared in accordance with IAS 34 Interim Financial Reporting. The financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s annual consolidated financial statements as at December 31, 2017.

This is the first set of the Group’s financial statements where IFRS 15 and IFRS 9 have been applied, as described in section e).

b) Critical judgements and accounting estimates

The preparation of the financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

In preparing these financial statements, the critical judgments made by management in applying the Group’s accounting policies and the key accounting estimates were the same as those that applied to the annual consolidated financial statements as at and for the year ended December 31, 2017.

2

c) Functional and presentation currency

These financial statements are presented in thousands of Euro, which is also the functional currency of InflaRx N.V. and InflaRx GmbH. All financial information presented in Euro has been rounded to the nearest thousand (abbreviated € thousand) or million (abbreviated € million).

d) Rounding

We have presented financial information in thousand and million euros. 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 by one thousand euros at a maximum.

e) Significant accounting policies

The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended December, 31 2017, except for the adoption of new standards effective as of January 1, 2018.

The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

The Group applies in the financial statements, for the first time, IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments, that require restatement of previous financial statements. As required by IAS 34, the nature and effect of these changes are disclosed below. Several other amendments and interpretations apply for the first time in 2018, but do not have an impact on the financial statements of the Group.

IFRS 15, Revenue from Contracts with Customers, replaces all current standards and interpretations dealing with revenue recognition and introduces a five-step model to account for revenue. As the Group is currently not generating revenues, the Group may only be affected by IFRS 15 in the future when entering into collaboration arrangements or similar transactions.

IFRS 9 contains a new classification and measurement approach for financial assets that reflects the business model in which assets are managed and their cash flow characteristics. IFRS 9 further replaces the ‘incurred loss’ model in IAS 39 with a forward-looking ‘expected credit loss’ (ECL) model. This will require considerable judgement about how changes in economic factors affect ECLs, which will be determined on a probability-weighted basis. IFRS 9 will require extensive new disclosures, in particular about hedge accounting, credit risk and ECLs.

The Group applies IFRS 9 with an initial application date of January 1, 2018. Because the Group held on the initial application date only immaterial non-current financial assets, cash and cash equivalents, no trade receivables and no derivative financial instruments or financial liabilities, the impact of IFRS 9 is determined to be nil, except for the disclosures required. Classification for other receivables and cash and cash equivalents changed from “loans and receivables” (IAS 39) to “amortized cost” (IFRS 9).

The consolidated statement of financial position as at January 1, 2018 was not restated, as the impact of IFRS 9 in the absence of material financial instruments was nil.

The following amendments, applicable to reporting periods started January 1, 2018, do not have any impact on the Group’s financial statements:

· Amendments to IFRS 2 Classification and Measurement of Share - based Payment Transactions

· IFRIC Interpretation 22 Foreign Currency Transactions and Advance Considerations

· Amendments to IAS 40 Transfers of Investment Property

· Amendments to IFRS 4, Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts

· Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards -Deletion of short-term exemptions for first-time adopters

· IFRIC 22 Foreign Currency Transactions and Advance Considerations

· Improvements to IFRS (2014-2016)

3

The following standards and amendments, applicable to reporting periods starting January 1, 2019, and later, are not expected to have any material impact on the Group’s financial statements, except as described below the table:

· IAS 19 Amendments - Plan Amendment, Curtailmentor Settlement

· IAS 28 Amendments - Long-term Interests in Associates and Joint Ventures

· IFRIC 23 Uncertainty over Income TaxTreatments

· Improvements to IFRS (2015-2017) IFRS 3, 11 IAS 12, 23

· FRS 3 Amendment Definition of a business

IFRS 16 Leases replaces existing guidance, including IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases – Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard is effective for annual periods beginning on or after January 1, 2019. Early adoption is permitted for entities that apply IFRS 15 at or before the date of initial application of IFRS 16. So far, the most significant impact identified is that the Group will recognize new assets and liabilities for its operating leases. As at December 31, 2017, the Group’s future minimum lease payments under non-cancellable operating leases amounted €0.7 million, which is the currently estimated impact on the consolidated statement of financial position of the Group.

(3) Other assets

in € thousand	31.12.2017	30.09.2018
Other assets
Prepaid expenses	504	697
Others	193	166
Other assets	697	863

(4) 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 at September 30, 2018 and December 31, 2017:

in € thousand	31.12.2017	30.09.2018
Financial assets at amortised cost:
Other Assets
Quoted debt securities	0	103,940
Other financial assets	20	1,001
Financial assets at fair value through profit or loss:
Other assets
Other investments	0	1,830
Total	20	106,771
Total current	0	54,941
Total non-current	20	51,830
Financial liabilities at amortised cost:
Trade payables	(4,464)	(1,383)
Other financial liabilities	(262)	(1,089)
Total	(4,726)	(2,472)
Total current	(4,724)	(2,418)
Total non-current	(2)	(54)

Other investments are investments in publicly traded funds that invest in various floating rate notes. These other investments are classified and measured at fair value through profit or loss (level 1). The net loss incurred since acquisition amounts to €24 thousand and is included in other finance costs. The fair value of the quoted debt securities (credit ratings range from AA- to AAA) amounts to €103,628 thousand (level 1) and the fair value of the other financial assets at amortized cost amounts to €1,001 thousand (level 1).

4

The Group’s debt instruments at amortized cost comprised solely of quoted securities that are graded in the top investment category (AA- to AAA) by credit rating agencies as S&P Global and, therefore, are considered to be 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 clearly immaterial. Furthermore, since acquisition of these debt securities, their credit ratings have remain stable.

(5) Cash and cash equivalents

in € thousand	31.12.2017	30.09.2018
Deposits held at banks	3,177	4,825
Money market funds	38,876	43,927
USD term deposits (1-30 days)	81,229	7,598
Cash and cash equivalents	123,282	56,349

(6) Issue of share capital

On May 8, 2018, a public offering of common shares was completed pursuant to which we sold an aggregate of 1,850,000 common shares with a nominal value of €0.12 per share, resulting in gross proceeds from the sale of common shares of €53.0 million. Directly attributable transaction costs of €3.8 million were incurred and paid in connection with the sale of these common shares and deducted from capital reserves. Certain of our selling shareholders sold an aggregate of 1,600,000 common shares. All of these common shares were sold at a price to the public of $34.00 per share.

In August and September, 2018 stock options were executed, 274,584 common shares were issued accordingly in the third quarter of 2018.

	30.09.2018
Common shares
As of January 1rst, 2018	23,812,100
May 8, 2018, public offering	1,850,000
Share options exercised	274,584
Total shares outstanding	25,936,684

(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 shall be issued.

At our general meeting of shareholders on May 17, 2018, shareholders approved the right of an independent foundation under Dutch law, or protective foundation, to acquire up to 100% of our 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 our 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 our 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 are of the opinion that the call option does not represent a significant fair value based on a level 3 valuation, due to the fact that the preference shares are restricted in use and can be cancelled by us as stated above.

5

As of September 30, 2018, the Company expensed €68 thousand of ongoing costs to reimburse expenses incurred by the protective foundation.

(8) Share-based payments

2016 Option Plan

Under the Stock Option Plan 2016 Terms and Conditions, or the 2016 Plan, InflaRx GmbH granted rights to subscribe for InflaRx GmbH’s common shares to directors, senior management and key employees. Prior to the initial public offering, the outstanding awards under the 2016 Plan covered an aggregate of 1,239,252 common shares and the exercise price for each outstanding award was €7.81 per share (in each case after giving effect to the corporate reorganization). Any additional awards available under the 2016 Plan lapsed upon the closing of the Series D financing in October 2017.

2016 Other share-based awards

In 2016, InflaRx also established a share-based payment plan for its non-executive board members (the “Board Plan”) and granted 484 shares of common stock. Grants under the Board Plan are not subject to service or performance conditions.

2017 long-term incentive plan

In conjunction with the closing of our initial public offering, we established a new omnibus plan (‘the 2017 Plan’ or ‘LTI’) with the purpose of advancing the interests of our shareholders by enhancing our ability to attract, retain and motivate individuals who are expected to make important contributions to us. The 2017 Plan governs issuances of equity incentive awards from and after the closing of our initial public offering. The initial maximum number of common shares available for issuance under equity incentive awards granted pursuant to the 2017 Plan equals 2,341,097 common shares. 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 Plan.

The fair value of options granted in 2018 under the 2017 Plan program was determined using the Black-Scholes valuation model. As 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. Other significant inputs into the model are as follows (weighted average):

2018	Q1	Q2	Q3
Fair value per share in USD	22.75	37.85	32.4	/	33.06
Exercise price in USD	22.75	37.85	32.4	/	33.06
Volatility expected	73%	73%	73%
Expected life (midpoint based)	4.9	4.6	4.9
Dividend yield expected	-	-	-
Risk-free rate (interpolated, US sovereign strips curve)	2.58%	2.71%	2.83%	/	2.99%
Fair Value per option (in USD)	13.79	22.37	19.80	/	20.17
FX rate (EUR/USD) as of grant date	0.82	0.86	0.86	/	0.85
Fair Value per option (in EUR)	11.24	19.23	16.96	/	17.15

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.

6

The number of share options under the 2017 Plan was as follows:

Granted in 2017	1,869,192
Granted in HY1 2018	48,002
Granted in Q3 2018	72,450
Forfeited in Q3	-26,256
Outstanding at September 30, 2018	1,963,388
Thereof vested	0

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:

(i) the more options granted within a tranche, the higher expense of a tranche, and

(ii) the shorter the vesting period of a tranche, the higher expense of a tranche.

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 Plan were €0.6 million in 2017 and are anticipated to be €11.9 million for 2018, €4.9 million for 2019 and €1.5 million for 2020.

In the three and nine month periods ending September 30, 2018, and 2017, compensation expenses of €3.1 million and €9.0 million (resulting solely from the LTI) and €0.6 million and €2.1 million (resulting solely from 2016 Option plan and other share-based awards) were recognized, respectively.

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

(9) Finance result

	For the three months ended September 30,		For the nine months ended September 30,
in € thousand	2017	2018	2017	2018
Finance income
Unrealized FX-gains	0	1,347	0	6,651
Interest and other finance income	8	754	8	1,456
	8	2,101	8	8,107
Finance costs
Interest on preferred shares	(758)	0	(2,229)	0
Cost of issuing preferred shares	(87)	0	(260)	0
Unrealized FX-losses	0	(416)	0	(2,578)
Other finance costs	(5)	(25)	(15)	(88)
	(849)	(441)	(2,504)	(2,666)
Finance result	(841)	1,660	(2,496)	5,441

InflaRx GmbH issued voting preferred shares for cash to investors in several financing rounds to fund its development activities. All of the preferred shares of InflaRx GmbH were exchanged for common shares of InflaRx N.V. in the corporate reorganization in 2017. InflaRx did not elect to recognize the preferred shares at fair value through profit or loss. In the three and nine months ended September 30, 2017, interest expense of €0.8 million and €2.2 million was recognized for all outstanding preferred shares.

7

(10) Related parties

The Group’s executive management comprises the following persons:

· Professor Niels C. Riedemann, Chief Executive Officer

· Professor Renfeng Guo, Chief Scientific Officer

· Arnd Christ, Chief Financial Officer

· Othmar Zenker, Chief Medical Officer

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

Executive Directors

· Professor Niels C. Riedemann (CEO)

· Professor Renfeng Guo (CSO)

Non-executive Directors

· Nicolas Fulpius, (Chairman, Chairman of the Audit Committee)

· Jens Holstein, since September 21, 2018 (Member of the Audit Committee)

· Katrin Uschmann (Member of the Audit Committee until February 6, 2018)

· Lina Ma

· Anthony Gibney, since February 6, 2018 (Member of the Audit Committee)

· Mark Kübler (Member of the Audit Committee until September 21, 2018)

The compensation of the Group’s executive management comprises of the following for the three and nine months periods ending September 30:

	For the three months ended September 30,
	Executive Management		non-executive Board of Directors
in € thousand	30.09.2017	30.09.2018	30.09.2017	30.09.2018
Short-term employee benefits	308	589	15	59
Share-based payments	0	2,475	0	273
Total	308	3,064	15	332

	For the nine months ended September 30,
	Executive Management		non-executive Board of Directors
in € thousand	30.09.2017	30.09.2018	30.09.2017	30.09.2018
Short-term employee benefits	924	1,755	45	172
Share-based payments	1,486	7,424	0	787
Total	2,410	9,178	45	959

Remuneration of InflaRx executive management comprises fixed and variable components and share-based payment awards. In addition, the executive management receives supplementary benefits such as fringe benefits and allowances.

8

EX-99.2

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, as of and for the nine-month periods ended September 30, 2017 and 2018 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 2017, and the notes thereto, which appear in our Annual Report on Form 20-F for the year ended December 31, 2017 (the “Annual Report”) filed with the U.S. Securities and Exchange Commission (the “SEC”).

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 “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 technology to discover and develop first-in-class, potent, and specific inhibitors of the complement activation factor known as C5a. C5a is a powerful inflammatory mediator involved in the progression of a wide variety of autoimmune and other inflammatory diseases. Our lead product candidate, IFX-1, 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. We are developing IFX-1 for the treatment of HS, a chronic debilitating systemic inflammatory skin disease, for which we have commenced a Phase IIb clinical trial in the first quarter of 2018. Beyond HS, we intend to develop IFX-1 and other proprietary antibodies or molecules to address a wide array of complement-mediated diseases with significant unmet needs, including AAV, a rare, life-threatening autoimmune disease.

Since our inception in December 2007, we have devoted substantially all of our resources to establishing our company, raising capital, developing our proprietary anti-C5a technology, identifying and testing potential product candidates and conducting clinical trials of our lead product candidate, IFX-1. To date, we have not generated any product revenue and have financed our operations primarily through our public offerings, the private placement of our securities and other income from various grants.

As of September 30, 2018, we had raised an aggregate of approximately €206 million, mainly from our initial public offering the subsequent follow on (together approximately €131 million), and from private placements of our securities (approximately €74 million). As of September 30, 2018, we had cash and cash equivalents of €56.3 million and other securities of €105.8 million.

As of September 30, 2018, we had an accumulated deficit of €70.8 million. We have incurred significant net operating losses in every year since our inception and expect to continue to incur increasing net operating losses for the foreseeable future. Our net losses may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will increase significantly if, and as we:

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· continue to develop and conduct clinical trials with respect to our lead product candidate, IFX-1, including in connection with the conduct of our ongoing Phase IIb clinical trial of IFX-1 for HS and our Phase II clinical trials of IFX-1 AAV and other indications planned;

· initiate and continue research, preclinical and clinical development efforts for any future product candidates, including IFX-2;

· seek to identify additional product candidates;

· seek regulatory and marketing approvals for our product candidates that successfully complete clinical trials, if any;

· establish sales, marketing, distribution, and other commercial infrastructure in the future to commercialize various products for which we may obtain marketing approval, if any;

· require the manufacture of larger quantities of product candidates for clinical development and, potentially, commercialization;

· collaborate with strategic partners to optimize the manufacturing process for IFX-1 and IFX-2;

· maintain, expand, and protect our intellectual property portfolio;

· hire and retain additional personnel, such as clinical, quality control and scientific personnel; and

· add operational, financial and management information systems and personnel, including continuing to add personnel to support our product development and help us comply with our obligations as a public company.

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 will take a number of years and is 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 IFX-1 or any additional product candidates.

Our financial statements in 2017 were materially affected by the corporate reorganization conducted in connection with our initial public offering (see Note 1 to our consolidated financial statements as of and for the year ended December 31, 2017).

Research and Development Expenses

We will use our existing liquidity primarily to fund research and development expenses. Research and development expenses have consisted principally but not exclusively of:

· expenses incurred under agreements with contract research organizations (CROs), contract manufacturing organizations (CMOs), consultants, and independent contractors that conduct research and development, preclinical, and clinical activities on our behalf

· employee-related expenses, including salaries, benefits, and stock-based compensation expenses based upon employees’ role within the organization

· professional fees for lawyers related to the protection and maintenance of our intellectual property

Our research and development expenses are highly dependent on the development phases of our research projects, and therefore fluctuates significantly from period to period. We expect that our total research and development expenses in 2018 will be significantly higher compared to our expenses in 2016 and 2017. Our research and development expense are mainly attributable to the following key programs:

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IFX-1 in Hidradenitis Suppurativa (“HS”).

HS is a chronic, inflammatory, recurrent and debilitating skin disease. The prevalence of moderate to severe HS patients (“Hurley stage 2 and 3”) is estimated to be up to 200,000 patients in the US and over 200,000 patients in Europe. HS patients have significant complement activation with elevated C5a levels.

· In the second quarter of 2017, we completed a single center, open label Phase IIa study investigating the safety and tolerability of IFX-1 in 12 patients with severe HS (Hurley stage 3). At the end of the observation period, 83% showed a clinical response based on the clinical endpoint: Hidradenitis Suppurativa Clinical Response (HiSCR) score which has been validated and used as primary endpoint for a drug approval in the US and the EU before.

· Following the positive outcome of this study, in the first quarter of 2018 we started a multi-national, multi-center, double-blind, placebo-controlled Phase IIb study to evaluate the dose response of IFX-1 to different dose regimens on the HiSCR. The study is expected to enroll 175 patients with moderate to severe HS (Hurley stage 2 and 3). We expect topline results in 1H 2019.

IFX-1 in Anca Associate Vasculitis (“AAV”)

AAV is a rare, life-threatening autoimmune disease which is characterized by necrotizing vasculitis. The life-threatening flare phases in this disease affect organs leading to potentially fatal organ dysfunction and failure. The prevalence of AAV patients is estimated to be around 40,000 patients in the US and around 75,000 patients in Europe. AAV patients have significant complement activation with elevated C5a levels.

· We started a placebo-controlled multi-center Phase II study in the US to evaluate the safety and efficacy of IFX-1 on top of standard of care in patients with AAV.

· Another, larger placebo-controlled multi-center Phase II study aiming to investigate the replacement of high-dose glucocorticoid treatments with IFX-1 in Europe is under preparation.

We anticipate that our research and development expenses will increase substantially in connection with the commencement of these and any additional clinical trials. We are now incurring increased expenses related to the manufacturing of clinical trial material while also starting to move manufacturing to commercial scale production with an optimized production process.

Other development programs related to IFX-1.

We are currently preparing additional clinical development programs in other chronic inflammatory and autoimmune diseases as well as within the oncology space. The costs are mainly related to preparatory work carried out by in-house personnel as well as expert external advisors to establish initial target product profiles and draft clinical development plans. In addition, pre-clinical studies are carried out to support clinical development where appropriate and reasonably achievable. Additional smaller expenses are related to intellectual property protection measures. The costs in these development areas will significantly increase if and when we are starting initial clinical Phase II development studies which are planned to commence in due course.

IFX-2.

We are continuing preclinical development work of IFX-2. The expenses here mainly consist of salaries of in-house personnel, costs for preclinical testing and further planned toxicology studies conducted by CROs and costs for the production of preclinical material and the establishment of the initial manufacturing process that conforms to GMP standards.

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 for production of preclinical compounds, and costs paid to CROs.

In 2016 and 2017, we incurred research and development expenses of €5.3 million and €14.4 million, respectively. For the nine months ended September 30, 2017 and 2018, we incurred research and development expenses of €8.1 million and €16.0 million, respectively. The principal driver of the increase in our research and development expenses was the clinical development and manufacturing of IFX-1. 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. Research and development expenses are expected to increase significantly as we advance the clinical development of IFX-1 and IFX-2, and further advance the research and development of our preclinical product candidates.

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We expense research and development costs as incurred. We recognize costs for 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. We expect research and development costs to increase significantly for the foreseeable future as our current development programs progress and new programs are added.

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—Financial operations overview” in the Annual Report.

Results of Operations

The numbers below were derived from our consolidated financial statements included elsewhere herein. The discussion below should be read along with these consolidated financial statements, and it is qualified in its entirety by reference to them.

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Comparison of the Three Months Ended September 30, 2017 and 2018

	Three Months Ended September 30,
	2017	2018	Change
	(in thousands of €)
Other income and expenses (net)	81	59	(23)
Research and development expenses	(2,606)	(5,451)	(2,845)
General and administrative expenses	(692)	(3,042)	(2,350)
Loss before interest and income taxes	(3,216)	(8,434)	(5,218)
Finance income	8	2,101	2,093
Finance costs	(849)	(441)	408
Loss before tax	(4,057)	(6,774)	(2,717)
Income tax expense	—	—
Loss for the period	(4,057)	(6,774)	(2,717)
Foreign currency translation differences	2	42	40
Total comprehensive loss attributable to owners of the Company	(4,055)	(6,732)	(2,677)

Research and Development Expenses

	Three Months Ended September 30,
	2017	2018	Change
	(in thousands of €)
Third party expenses	1,703	3,091	1,388
thereof manufacturing	1,369	1,385	15
thereof clinic, pre-clinical	334	1,707	1,373
Personnel expenses	737	2,023	1,286
Legal and consulting fees	169	109	(60)
Other expenses	(4)	227	231
Total Research and development expenses	2,607	5,451	2,844

Research and development expenses increased by €2.8 million to €5.5 million for the three months ended September 30, 2018, from €2.6 million for the three months ended September 30, 2017. This increase is primarily attributable to a €1.4 million increase in CRO expenses mainly related to our ongoing clinical Phase II trials in HS and AAV, as well as a €1.3 million increase in employee-related costs mainly caused by higher expenses associated with non-cash stock-based compensation, principally from equity award grants under our LTI Plan 2017, amounting to an increase of €0.9 million.

General and Administrative Expenses

	Three Months Ended September 30,
	2017	2018	Change
	(in thousands of €)
Personnel expenses	473	2,301	1,829
Legal, consulting and audit fees	63	346	282
Other expenses	156	395	239
Total General and administrative expense	692	3,042	2,350

General and administrative expenses increased by €2.4 million to €3.0 million for the three months ended September 30, 2018, from €0.7 million for the three months ended September 30, 2017. This increase is primarily attributable to a €1.8 million increase in employee-related costs associated with non-cash stock-based compensation, principally from equity award grants under our LTI Plan 2017, amounting to an increase of €1.6 million. The increase of €0.3 million for legal, consulting and audit fees is mainly attributable to costs of being a publicly listed company, as well as tax services.

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Finance result

	Three Months Ended September 30,
	2017	2018	Change
	(in thousands of €)
Finance income
Unrealized FX-gains	0	1,347	1,347
Interest and other finance income	8	754	746
Total Finance income	8	2,101	2,093
Finance costs
Interest on preferred shares	(758)	0	758
Cost of issuing preferred shares	(87)	0	87
Unrealized FX-losses	0	(416)	(416)
Other finance costs	(5)	(25)	(20)
Total Finance costs	(849)	(441)	408
Finance result	(841)	1,660	2,501

Finance result increased by €2.5 million to €1.7 million finance income for the three months ended September 30, 2018, from €0.8 million finance costs for the three months ended September 30, 2017. This increase is mainly attributable to unrealized foreign exchange gains of our USD term deposits. Interest and other finance income is attributable to interest on our USD term deposits. For the three months ended September 30, 2017, interest expense in connection with preferred shares amounted to €0.8 million. Preferred shares were converted into common shares in connection with the initial public offering in the fourth quarter of 2017.

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Comparison of the Nine months Ended September 30, 2017 and 2018

	Nine Months Ended September 30,
	2017	2018	Change
	(in thousands of €)
Other income and expenses (net)	111	176	64
Research and development expenses	(8,108)	(15,955)	(7,847)
General and administrative expenses	(2,038)	(9,200)	(7,162)
Loss before interest and income taxes	(10,035)	(24,979)	(14,944)
Finance income	8	8,107	8,099
Finance costs	(2,504)	(2,666)	(163)
Loss before tax	(12,530)	(19,538)	(7,008)
Income tax expense	—	—
Loss for the period	(12,530)	(19,538)	(7,008)
Foreign currency translation differences	0	26	26
Total comprehensive loss attributable to owners of the Company	(12,530)	(19,512)	(6,982)

Research and Development Expenses

	Nine Months Ended September 30,
	2017	2018	Change
	(in thousands of €)
Third party expenses	5,178	9,244	4,066
thereof manufacturing	3,674	3,758	84
thereof clinic, pre-clinical	1,504	5,486	3,983
Personnel expenses	2,379	5,959	3,580
Legal and consulting fees	452	303	(149)
Other expenses	100	449	349
Total Research and development expenses	8,108	15,955	7,847

Research and development expenses increased by €7.8 million to €16.0 million for the nine months ended September 30, 2018, from €8.1 million for the nine months ended September 30, 2017. This increase is primarily attributable to a €4.1 million increase in CRO expenses mainly related to our ongoing clinical Phase II trials in HS and AAV, as well as a €3.6 million increase in employee-related costs mainly caused by higher expenses associated with non-cash stock-based compensation, principally from equity award grants under our LTI Plan 2017, respectively, amounting to an increase of €2.5 million.

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General and Administrative Expenses

	Nine Months Ended September 30,
	2017	2018	Change
	(in thousands of €)
Personnel expenses	1,370	6,568	5,198
Legal, consulting and audit fees	285	1,507	1,223
Other expenses	383	1,124	741
Total General and administrative expense	2,038	9,200	7,162

General and administrative expenses increased by €7.2million to €9.2 million for the nine months ended September 30, 2018, from €2.0 million for the nine months ended September 30, 2017. This increase is primarily attributable to a €5.2 million increase in employee-related costs associated with non-cash stock-based compensation, principally from equity award grants under our LTI Plan 2017, respectively amounting to an increase of €4.4 million. The increase of €1.2 million for legal, consulting and audit fees is mainly attributable to costs of being a publicly listed company, as well as tax services.

Finance result

	Nine Months Ended September 30,
	2017	2018	Change
	(in thousands of €)
Finance income
Unrealized FX-gains	0	6,651	6,651
Interest and other finance income	8	1,456	1,448
Total Finance income	8	8,107	8,099
Finance costs
Interest on preferred shares	(2,229)	0	2,229
Cost of issuing preferred shares	(260)	0	260
Unrealized FX-losses	0	(2,578)	(2,578)
Other finance costs	(15)	(88)	(73)
Total Finance costs	(2,504)	(2,666)	(163)
Finance result	(2,496)	5,441	7,937

Finance result increased by €7.9 million to €5.4 million finance income for the nine months ended September 30, 2018, from €2.5 million finance costs for the nine months ended September 30, 2017. This increase is mainly attributable to unrealized foreign exchange gains of our USD term deposits. Interest and other finance income is attributable to interest on our US$ term deposits. For the nine months ended September 30, 2017, interest expenses in connection with preferred shares amounted to €2.2 million. Preferred shares were converted into common shares in connection with the initial public offering in the fourth quarter of 2017.

Liquidity and Capital Resources

Since inception, we have incurred significant operating losses. For the nine months ended September 30, 2018, we incurred a net loss of €19.5 million. To date, we have financed our operations primarily through the sale of our securities. As of September 30, 2018, we had cash and cash equivalents of €56.3 million as well as other securities of €105.8 million.

Our cash and cash equivalents primarily consist of bank deposit accounts, fixed USD term deposits and money market investment funds. Other securities mainly consist of quoted debt securities with a duration of max. 1-2 years (investment grade).

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Cash Flows

The table below summarizes our consolidated statement of cash flows for the nine months ended September 30, 2017 and 2018:

	Nine Months Ended September 30,
	2017	2018
	(in thousands of €)
Cash used in operating activities	(8,426)	(15,235)
Net cash used in investing activities	(106)	(105,411)
Net cash from financing activities	1,500	49,641
Cash and cash equivalents at the beginning of the period	29,117	123,282
Exchange gains on cash and cash equivalents	0	4,073
Cash and cash equivalents at the end of the period	22,084	56,349

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 €6.8 million to €15.2 million in the nine months ended September 30, 2018, from €8.4 million in the nine months ended September 30, 2017, mainly due to the increase of cash expenses, such as third-party expenses for manufacturing and clinical trials for our lead program IFX-1 and our own personnel expenses.

Net Cash Used in Investing Activities

Net cash used for investing activities increased by €105.3 million to €105.4 million in the nine months ended September 30, 2018, from €0.1 million in the nine months ended September 30, 2017, mainly due to investments in publicly traded funds that invests in various fixed rate notes (€110.9 million) as well as investments in office and laboratory equipment of our new subsidiary in InflaRx Pharmaceutical Inc.

Net Cash Provided by Financing Activities

Net cash generated from financing activities increased by €48.1 million to €49.6 million in the nine months ended September 30, 2018 mainly due to our follow on registered public offering in May 2018, compared to €1.5 million in the three months ended September 30, 2017, when cash contributions from the sale of the Series C preferred shares were received.

Funding Requirements

We expect our expenses to increase in connection with our ongoing activities, particularly as we conduct Phase II clinical trials of IFX-1 in patients with HS and AAV, initiate two additional trials with IFX-1 in other indications, continue preclinical development of IFX-2, initiate new research and preclinical development efforts and seek marketing approval for any product candidates that we successfully develop and receive approval for. If the planned Phase IIb trial of HS is successful, we plan to commence a Phase III program of IFX-1 in HS and currently anticipate that the cost of such program could be in the range of €50 to €60 million. 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.

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We completed our initial public offering of common shares and listing of such common shares on the NASDAQ Global Select Market in the fourth quarter of 2017. We raised an aggregate of $93 million in net proceeds from our initial public offering. We raised an aggregate of $59.1 million in net proceeds from our public offering in May 2018. As such, we believe that our existing liquidity will enable us to fund our operating expenses and capital expenditure requirements for at least the next 24 months.

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, 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, ownership interest 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 valuable 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 “Risk Factors” in the Annual Report.

Off-Balance Sheet Arrangements

As of September 30, 2018, and during the periods presented, we did not have any off-balance sheet arrangements other as described under “Item 5. Operating and Financial Review and Prospects—Off-balance sheet arrangements” in the Annual Report.

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 “Item 5. Operating and Financial Review and Prospects—Contractual obligations and commitments” in the Annual Report.

Quantitative and Qualitative Disclosures about Market Risk

During the nine months ended September 30, 2018, there were no significant changes to our quantitative and qualitative disclosures about market risk from those reported in “Item 5. Operating and Financial Review and Prospects–Quantitative and qualitative disclosures about market risk” in the Annual Report. 

Critical Judgments and Accounting Estimates

There have been no material changes to the significant accounting policies and estimates described in “Item 5. Operating and Financial Review and Prospects—Critical judgments and accounting estimates” in the Annual Report.

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. This exemption will apply for a period of five years following the completion of our initial public offering or until we no longer meet the requirements of being an “emerging growth company,” whichever is earlier. We would cease to be an emerging growth company if we have more than $1.0 billion in annual revenue, have more than $700 million in market value of our common shares held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year period.

Cautionary Statement Regarding Forward Looking Statements

Forward-looking statements appear in a number of places in this discussion and analysis and include, but are not limited to, statements regarding our intent, belief or current expectations. Many of the forward-looking statements contained in this discussion and analysis can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to of various factors, including, but not limited to, those identified under the section entitled “Risk factors” in the Annual Report. These risks and uncertainties include factors relating to:

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· our operation as a development stage company with limited operating history and a history of operating losses; as of September 30, 2018, our accumulated deficit was €70.8 million;

· the timing of any submission of filings for regulatory approval of IFX-1 or any other product candidate, and the timing of and our ability to obtain and maintain regulatory approval of IFX-1 for any indication;

· the chance our clinical trials may be delayed or not be successful and clinical results may not reflect results seen in previously conducted preclinical studies and clinical trials;

· our reliance on sponsors of, and clinical investigators in, trials of our product candidates, contract manufacturers and contract research organizations over which we have limited control;

· our lack of adequate funding to complete development of IFX-1 and our other product candidates and the risk we may be unable to access additional capital on reasonable terms or at all to complete development and begin commercialization of our product candidates;

· our dependence on the success of IFX-1, which is still in clinical development and may eventually prove to be unsuccessful;

· uncertainty surrounding whether the clinical development steps up to commercialization will gain regulatory approval;

· our ability to leverage our proprietary anti-C5a technology to discover and develop therapies to treat complement-mediated autoimmune and inflammatory diseases;

· the chance that we may become exposed to costly and damaging liability claims resulting from the testing of our product candidates in the clinic or, if approved, in the commercial stage;

· if our product candidates obtain regulatory approval, our being subject to expensive ongoing obligations and continued regulatory overview;

· our ability to comply with enacted and future legislation in seeking marketing approval and commercialization;

· our expectations regarding the size of the patient populations for, market opportunity for and clinical utility of IFX-1 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 for our planned future clinical trials;

· our competitive position and the development of and projections relating to our competitors in the development of C5a inhibitors or our industry;

· our future growth and ability to compete, which depends on our retaining key personnel and recruiting additional qualified personnel; and

· other risk factors discussed under “Risk factors” in the Annual Report.

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Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events except as required by law.

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EX-99.3

Exhibit 99.3

 

InflaRx N.V. Reports Third Quarter 2018 Financial & Operating Results

· Completion of patient recruitment in phase IIb trial in Hidradenitis Suppurativa

· First patient dosed in phase II trial with IFX-1 in ANCA- associated vasculitis

· Board of Directors appointment Jens Holstein, Chief Financial Officer of MorphoSys AG

Jena, Germany, 21 November 2018 – InflaRx N.V. (Nasdaq:IFRX), a biopharmaceutical company developing innovative therapeutics to treat devastating inflammatory diseases by targeting the complement system, a key component of the innate immune system, reported financial and operating results for the third quarter and nine months ended September 30, 2018.

“In recent months, we have continued to make significant progress in advancing our business, most notably completing recruitment for our phase IIb trial in Hidradenitis Suppurativa, as well as finalizing preparations for our second indication, ANCA-associated vasculitis, with our lead product candidate, IFX-1,” said Arnd Christ, Chief Financial Officer. “It is with the significant support of our shareholders that we continue to be well positioned to move these trials forward, and we look forward to continuing to leverage our team’s extensive expertise in the complement field to grow our pipeline into other clinical areas where we feel our unique anti-C5a technology may provide patient benefit.”

Corporate Highlights – Q3 2018 and After the Reporting Period

· Completion of patient recruitment in phase IIb trial in Hidradenitis Suppurativa (HS). Recently, patient enrollment has been completed in the phase IIb trial to determine the safety and efficacy of lead candidate IFX-1 in patients suffering from moderate or severe HS. HS is a painful and debilitating chronic inflammatory skin disease with limited treatment options. The randomized, double-blind, placebo-controlled, multicenter study is being conducted at 38 sites

 

in both North America and Europe. Topline results from the trial are expected in the first half of 2019.

· Initiation of phase II program with IFX-1 in ANCA-associated vasculitis (AAV). The first patient was dosed in a phase II trial to determine the safety and efficacy of IFX-1, a first-in-class anti-human complement factor C5a antibody, in patients with AAV. The main objective of the study is to evaluate the safety of IFX-1, as this will be the first time the drug is being administered to patients with ANCA-associated vasculitis. AAV is a rare and life-threatening autoimmune disease in which activation of the complement system, and specifically the generation of larger amounts of C5a, is believed to play a key role in the neutrophil-driven vessel inflammation that defines the disease.

· Board of Directors appointment. Jens Holstein, Chief Financial Officer of MorphoSys AG, a dual-listed (Frankfurt and Nasdaq) drug development company, was appointed to the Board of Directors in September 2018. Mr. Holstein brings in-depth industry experience through numerous financial leadership positions he has held in both biotech and healthcare.

· R&D Day held in New York. The Company held its first R&D Day for the investment community on HS and scientific and clinical experience with IFX-1. A webcast remains available on the InflaRx website.

Financial Highlights – First Nine Months and Q3 2018

The figures for the third quarter (Q3, three months ended September 30) and first nine months of 2018 and 2017 are unaudited.

Cash and cash equivalents plus securities and other investments. As of September 30, 2018, the Company had cash and cash equivalents and securities and other investments of €162.1 million, compared to € 123.3 million as of December 31, 2017. The total increase was mainly due to the completion of InflaRx’s follow-on offering in May 2018 and higher financing income in Q3 2018 from foreign exchange gains on USD term deposits. Cash and cash equivalents primarily consist of bank deposit accounts, fixed USD term deposits and money market investment funds. Securities and other investments mainly consist of quoted investment grade debt securities with a duration of 1 – 2 years maximum.

 

Research and development expenses increased to €5.5 million for Q3 2018, compared to €2.6 million for Q3 2017. This increase was primarily attributable to a €1.4  million increase in CRO (contract research organization) expenses mainly related to the Company’s ongoing clinical phase II trials in HS and AAV, as well as a €1.3 million increase in employee-related costs mainly due to higher expenses associated with non-cash stock-based compensation (€0.9 million), principally from equity award grants under the Company’s LTI (long-term incentive) Plan 2017.

General and administrative expenses increased to €3.0 million for Q3 2018, compared to €0.7 million for Q3 2017. This increase was primarily attributable to a €1.8 million increase in employee-related costs associated with non-cash stock-based compensation (€1.6 million), principally from equity award grants under the Company’s LTI Plan 2017. The increase of €0.3 million for legal, consulting and audit fees was mainly attributable to the costs of being a publicly listed company, as well as tax services.

Finance result increased to €1.7 million finance income for Q3 2018, compared to €0.8 million finance costs for Q3 2017. This increase is mainly attributable to unrealized foreign exchange gains on USD term deposits. Interest and other finance income was attributable to interest on USD term deposits. For Q3 2017, interest expense in connection with preferred shares amounted to €0.8 million. Preferred shares were converted into common shares in connection with the Company’s initial public offering in the fourth quarter of 2017.

Net loss for the third quarter of 2018 was €6.7 million or €0.3 per common share (basic and diluted), compared to €4.1 million or €1.7 per common share (basic and diluted) for the third quarter of 2017.

Additional information regarding these results is included in the notes to the consolidated financial statements as of September 30, 2018 and can be found on the InflaRx website.

 

InflaRx N.V. and subsidiaries

Unaudited condensed consolidated statements of comprehensive loss

for the three months ended September 30, 2018

		For the three months ended September 30,				For the nine months ended September 30,
in € thousand	Note	2017		2018		2017		2018
Other income and expenses (net)		81		59		111		176
Research and development expenses		(2,606	)	(5,451	)	(8,108	)	(15,955	)
General and administrative expenses		(692	)	(3,042	)	(2,038	)	(9,200	)
Loss before interest and income taxes		(3,216	)	(8,434	)	(10,035	)	(24,979	)
Finance income		8		2,101		8		8,107
Finance expense		(849	)	(441	)	(2,504	)	(2,666	)
Finance result	9	(841	)	1,660		(2,496	)	5,441
Loss for the period		(4,057	)	(6,774	)	(12,530	)	(19,538	)
Other comprehensive loss for the period		2		42		0		26
Total comprehensive loss		(4,055	)	(6,732	)	(12,530	)	(19,512	)
Loss per common share in € (basic/diluted)		(1.7	)	(0.3	)	(5.3	)	(0.8	)
Number of common shares (in thousand) used to calculate the loss per common share, basic & diluted		2,363		25,662		2,363		24,804

 

InflaRx N.V. and subsidiaries

Unaudited condensed consolidated statements of financial position

as of September 30, 2018

in € thousand	Note	December 31, 2017		September 30, 2018
ASSETS
Non-current assets
Intangible assets		41		45
Laboratory and office equipment		173		602
Securities	4	0		51,628
Other financial assets	4	20		202
Total non-current assets		233		52,477
Current assets
Other assets	3	697		863
Other financial assets	4	0		799
Securities and other investments	4	0		54,142
Cash and cash equivalents	5	123,282		56,349
Total current assets		123,979		112,153
Total assets		124,212		164,630
EQUITY AND LIABILITIES
Equity
Issued capital	6	2,858		3,112
Other reserves	8	167,864		226,279
Accumulated deficit		(51,293	)	(70,830	)
Total equity		119,429		158,561
Non-current liabilities
Deferred income		15		12
Provisions		2		54
Total non-current liabilities		17		66
Current liabilities
Trade payables		4,464		1,383
Other liabilities, provisions		302		4,619
Total current liabilities		4,766		6,003
Total equity and liabilities		124,212		164,630

 

InflaRx N.V. and subsidiaries

Unaudited condensed consolidated statements of changes in equity for the nine months ended September 30, 2018

					Other reserves
in € thousand	Note	Issued capital	Capital reserve		currency translation		share-based payments	Accumulated deficit		Own shares		Total equity
Balance as of January 1, 2017		31	0		9		1,675	(27,055	)	(350	)	(25,690	)
Comprehensive loss
Loss for the period		0	0		0		0	(12,530	)	0		(12,530	)
Other comprehensive income / Exchange differences		0	0		(9	)	0	0		0		(9	)
Total comprehensive loss		0	0		(9	)	0	(12,530	)	0		(12,539	)
Recognition of equity-settled share-based payments	8	0	0		0		2,081	0		0		2,081
Balance as of September 30, 2017		31	0		0		3,756	(39,585	)	(350	)	(36,148	)
Balance as of January 1, 2018		2,858	161,639		0		6,225	(51,293	)	0		119,429
Comprehensive loss
Loss for the period		0	0		0		0	(19,538	)	0		(19,538	)
Exchange differences		0	0		25		0	0		0		25
Total comprehensive loss		0	0		25		0	(19,538	)	0		(19,512	)
Recognition of equity-settled share-based payments	8	0	0		0		9,004	0		0		9,004
Issue of share capital
Issued shares	6	255	53,188		0		0	0		0		53,443
Transaction costs	6	0	(3,801	)	0		0	0		0		(3,801	)
Total issue of share capital		255	49,386		0		0	0		0		49,641
Balance as of September 30, 2018		3,113	211,025		25		15,229	(70,830	)	0		158,561

 

InflaRx N.V. and subsidiaries

Unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2018

			For the nine months ended September 30,
in € thousand	Note		2017			2018
Cash flow from Operations
Loss for the period before taxes				(12,530	)		(19,538	)
Reconciliation from result before taxes to net cash flows
Depreciation/amortization of intangible assets, laboratory and office equipment				52			104
Share based payment expense		8		2,081			9,004
Finance Income		9		(8	)		(8,107	)
Finance costs		9		2,504			2,690
Other non-cash adjustments				(23	)		(689	)
Change in Provisions and Government Grants				1,659			1,605
Working capital adjustments
Change in trade payables and other liabilities				(696	)		(319	)
Change in other assets				(1,471	)		(965	)
Interest received				8			980
Cash flow from Operations				(8,426	)		(15,235	)
Cash flow from investing activities
Cash outflow from the purchase of intangible assets, laboratory and office equipment				(87	)		(538	)
Cash outflow for the investment in non-current other financial assets				(19	)		(201	)
Proceeds from the disposal of non-current other financial assets				0			19
Proceeds from the disposal of current other investments				0			6,161
Purchase of securities and current other investmens				0			(110,852	)
Net cash flows used in investing activities				(106	)		(105,411	)
Financing activities
Proceeds from issuance of stock				0			53,443
Transaction cost from issuance of stock				0			(3,801	)
Proceeds from issuance of preferred shares				1,500			0
Net cash flows from financing activities				1,500			49,641
Effect of exchange rate changes				0			4,073
Change in cash and cash equivalents				(7,032	)		(66,933	)
Net change in cash and cash equivalents				(7,031	)		(66,933	)
Cash and cash equivalents at beginning of period				29,117			123,282
Cash and cash equivalents at end of period				22,086			56,349

 

About InflaRx N.V.:

InflaRx (Nasdaq:IFRX) is a clinical-stage biopharmaceutical company focused on applying its proprietary anti-C5a technology to discover and develop first-in-class, potent and specific inhibitors of C5a. Complement C5a is a powerful inflammatory mediator 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, Michigan.

Contacts:

Investor Relations

InflaRx N.V. 

Jordan Silverstein

Head of Corporate Development and Strategy 

Jordan.silverstein[at]inflarx.de

+1 917-837-1709

Media Relations 

MC Services AG

Katja Arnold, Laurie Doyle, Andreas Jungfer 

inflarx[at]mc-services.eu

+49 89-210 2280

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,” “estimate,” “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 our intentions, beliefs, projections, outlook, analyses and current expectations concerning, among other things, our ongoing and planned preclinical development and clinical trials, the timing of and our ability to make regulatory filings and obtain and maintain regulatory approvals for our product candidates, our intellectual property position, our ability to develop commercial functions, expectations regarding clinical trial data, our results of operations, cash needs, financial condition, liquidity, prospects, future transactions, growth and strategies, the industry in which we operate, the trends that may affect the industry or us and the risks uncertainties and other factors described under the heading “Risk Factors” in InflaRx’s periodic filings with the Securities and Exchange Commission. 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 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. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements, and we assume no obligation to update these forward-looking statements, even if new information becomes available in the future, except as required by law.