Exhibit 99.1
INFLARX N.V.
UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS – MARCH 31, 2020
These unaudited condensed financial statements are consolidated financial statements for the group consisting of InflaRx N.V. and its wholly-owned subsidiaries InflaRx GmbH, 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.
F-1
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019
Unaudited Condensed Consolidated Financial Statements | |||
Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2020 and 2019 | 3 | ||
Unaudited Condensed Consolidated Statements of Financial Position as of March 31, 2020 and December 31, 2019 | 4 | ||
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2020 and 2019 | 5 | ||
Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2020 and 2019 | 6 | ||
Notes to the Unaudited Condensed Consolidated Financial Statements | 7 | ||
1. Net Financial Result | 7 | ||
2. Other non-financial assets | 7 | ||
3. Financial assets and financial liabilities | 8 | ||
4. Cash and cash equivalents information | 8 | ||
5. Related party transactions | 9 | ||
6. Share-based payments | 10 | ||
7. Protective foundation | 12 | ||
8. Summary of significant accounting policies | 12 | ||
(a) Reporting entity and Group’s structure | 12 | ||
(b) Basis of preparation | 12 | ||
(c) New and amended standards adopted by the Group | 13 | ||
(d) Summary of new accounting policies | 13 | ||
(e) Significant events after the reporting date | 14 |
F-2
InflaRx N.V. and subsidiaries
Unaudited Condensed Consolidated Statements of Comprehensive Loss
for the three months ended March 31, 2020 and 2019
For the three months ended March 31, | ||||||||||||
(in €) | Note | 2020 (unaudited) | 2019 (unaudited) | |||||||||
Operating Expenses | ||||||||||||
Research and development expenses | (7,298,799 | ) | (7,695,150 | ) | ||||||||
General and administrative expenses | (2,564,803 | ) | (3,301,166 | ) | ||||||||
Total Operating Expenses | (9,863,601 | ) | (10,996,316 | ) | ||||||||
Other income | 94,960 | 64,836 | ||||||||||
Other expenses | (5,720 | ) | (3,886 | ) | ||||||||
Operating Result | (9,774,362 | ) | (10,935,366 | ) | ||||||||
Finance income | 1,658,991 | 1,159,205 | ||||||||||
Finance expenses | (118,026 | ) | (61,710 | ) | ||||||||
Net Financial Result | 1 | 1,540,965 | 1,097,495 | |||||||||
Loss for the Period | (8,233,397 | ) | (9,837,871 | ) | ||||||||
Share Information | ||||||||||||
Weighted average number of shares outstanding | 26,105,255 | 25,964,379 | ||||||||||
Loss per share (basic/diluted) | (0.32 | ) | (0.38 | ) | ||||||||
Loss for the Period | (8,233,397 | ) | (9,837,871 | ) | ||||||||
Other comprehensive income that may be reclassified to profit or loss in subsequent periods: | ||||||||||||
Exchange differences on translation of foreign currency | 1,713,868 | 2,317,546 | ||||||||||
Total Comprehensive Loss | (6,519,529 | ) | (7,520,325 | ) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
[3]
InflaRx N.V. and subsidiaries
Unaudited Condensed Consolidated Statements of Financial Position
as of March 31, 2020 and December 31, 2019
(in €) | Note | 2020 (unaudited) | 2019 | |||||||||
ASSETS | ||||||||||||
Non-current assets | ||||||||||||
Property, plant and equipment | 540,606 | 576,373 | ||||||||||
Right-of-use assets | 748,785 | 836,924 | ||||||||||
Intangible assets | 430,368 | 452,400 | ||||||||||
Non-current other assets | 2 | 445,403 | 452,217 | |||||||||
Non-current financial assets | 3 | 272,718 | 272,614 | |||||||||
Total non-current assets | 2,437,880 | 2,590,528 | ||||||||||
Current assets | ||||||||||||
Current other assets | 2 | 3,319,222 | 3,500,884 | |||||||||
Current financial assets | 3 | 86,680,961 | 82,353,867 | |||||||||
Cash and cash equivalents | 4 | 21,083,608 | 33,131,280 | |||||||||
Total current assets | 111,083,791 | 118,986,031 | ||||||||||
TOTAL ASSETS | 113,521,671 | 121,576,558 | ||||||||||
EQUITY AND LIABILITIES | ||||||||||||
Equity | ||||||||||||
Issued capital | 3,132,631 | 3,132,631 | ||||||||||
Share premium | 211,006,606 | 211,006,606 | ||||||||||
Other capital reserves | 26,043,246 | 25,142,213 | ||||||||||
Accumulated deficit | (142,514,552 | ) | (134,362,006 | ) | ||||||||
Other components of equity | 3,860,246 | 2,227,228 | ||||||||||
Total equity | 101,528,177 | 107,146,673 | ||||||||||
Non-current liabilities | ||||||||||||
Lease liabilities | 245,478 | 330,745 | ||||||||||
Other non-financial liabilities | 39,148 | 39,013 | ||||||||||
Total non-current liabilities | 284,625 | 369,758 | ||||||||||
Current liabilities | ||||||||||||
Trade and other payables | 3 | 10,490,938 | 12,413,662 | |||||||||
Lease liabilities | 513,374 | 515,203 | ||||||||||
Employee benefits | 571,960 | 975,629 | ||||||||||
Social securities, other taxes and other non-financial liabilities | 108,221 | 105,634 | ||||||||||
Provisions | 24,374 | 50,000 | ||||||||||
Total current liabilities | 11,708,869 | 14,060,128 | ||||||||||
Total Liabilities | 11,993,494 | 14,429,886 | ||||||||||
TOTAL EQUITY AND LIABILITIES | 113,521,671 | 121,576,558 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
[4]
InflaRx N.V. and subsidiaries
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity
for the three months ended March 31, 2020 and 2019
(in €, except for share data) | Note | Shares outstanding | Issued capital | Share premium | Other capital reserves | Accumulated deficit | Other components of equity | Total equity | ||||||||||||||||||||||||
Balance as of January 1, 2020 | 26,105,255 | 3,132,631 | 211,006,606 | 25,142,213 | (134,362,006 | ) | 2,227,228 | 107,146,673 | ||||||||||||||||||||||||
Loss for the period | — | — | — | — | (8,233,397 | ) | — | (8,233,397 | ) | |||||||||||||||||||||||
Exchange differences on translation of foreign currency | — | — | — | — | — | 1,713,868 | 1,713,868 | |||||||||||||||||||||||||
Total comprehensive loss | — | — | — | — | (8,233,397 | ) | 1,713,868 | (6,519,529 | ) | |||||||||||||||||||||||
Transactions with owners of the Company | ||||||||||||||||||||||||||||||||
Contributions | ||||||||||||||||||||||||||||||||
Equity-settled share-based payment | 6 | — | — | — | 901,033 | — | — | 901,033 | ||||||||||||||||||||||||
Total Contributions | — | — | — | 901,033 | — | — | 901,033 | |||||||||||||||||||||||||
Total transactions with owners of the Company | — | — | — | 901,033 | — | — | 901,033 | |||||||||||||||||||||||||
Balance as of March 31, 2020* | 26,105,255 | 3,132,631 | 211,006,606 | 26,043,246 | (142,595,403 | ) | 3,941,097 | 101,528,177 | ||||||||||||||||||||||||
Balance as of January 1, 2019 | 25,964,379 | 3,115,725 | 211,021,835 | 18,310,003 | (81,107,188 | ) | 50,196 | 151,390,571 | ||||||||||||||||||||||||
Loss for the period | — | — | — | — | (9,837,871 | ) | — | (9,837,871 | ) | |||||||||||||||||||||||
Exchange differences on translation of foreign currency | — | — | — | — | — | 2,317,546 | 2,317,546 | |||||||||||||||||||||||||
Total comprehensive loss | — | — | — | — | (9,837,871 | ) | 2,317,546 | (7,520,325 | ) | |||||||||||||||||||||||
Transactions with owners of the Company | ||||||||||||||||||||||||||||||||
Contributions | ||||||||||||||||||||||||||||||||
Equity-settled share-based payment | 6 | — | — | — | 2,097,780 | — | — | 2,097,780 | ||||||||||||||||||||||||
Total Contributions | — | — | — | 2,097,780 | — | — | 2,097,780 | |||||||||||||||||||||||||
Total transactions with owners of the Company | — | — | — | 2,097,780 | — | — | 2,097,780 | |||||||||||||||||||||||||
Balance as of March 31, 2019* | 25,964,379 | 3,115,725 | 211,021,835 | 20,407,783 | (90,945,059 | ) | 2,367,742 | 145,968,026 |
* unaudited
The accompanying notes are an integral part of these condensed consolidated financial statements.
[5]
InflaRx N.V. and subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
for the nine months ended March 31, 2020 and 2019
Note | 2020 (unaudited) | 2019 (unaudited) | ||||||||||
(in €) | ||||||||||||
Operating activities | ||||||||||||
Loss for the period | (8,233,397 | ) | (9,837,871 | ) | ||||||||
Adjustments for: | ||||||||||||
Depreciation & Amortization of property, plant, equipment, right-of-use assets and intangible assets | 182,356 | 116,519 | ||||||||||
Net financial result | 1 | (1,540,965 | ) | (1,097,495 | ) | |||||||
Share-based payment expense | 6 | 901,033 | 2,097,780 | |||||||||
Other non-cash adjustments | (129,122 | ) | 81,346 | |||||||||
Changes in: | ||||||||||||
Other assets | 188,476 | (581,651 | ) | |||||||||
Employee benefits | (428,526 | ) | (333,864 | ) | ||||||||
Social securities and other current non-financial liabilities | 1,953 | 457,497 | ||||||||||
Trade and other payables | (1,922,724 | ) | 364,158 | |||||||||
Interest received | 462,342 | 241,817 | ||||||||||
Interest paid | (2,246 | ) | (6,682 | ) | ||||||||
Net cash from operating activities | (10,520,819 | ) | (8,498,447 | ) | ||||||||
Investing activities | ||||||||||||
Purchase of intangible assets, laboratory and office equipment | (27,686 | ) | (254,316 | ) | ||||||||
Purchase of current financial assets | (23,412,469 | ) | (10,599 | ) | ||||||||
Disposal of current financial assets | — | 3,088 | ||||||||||
Securities matured | 20,724,386 | — | ||||||||||
Net cash used in investing activities | (2,715,769 | ) | (261,827 | ) | ||||||||
Financing activities | ||||||||||||
Repayment of leasing liabilities | (88,339 | ) | (54,781 | ) | ||||||||
Net cash from financing activities | (88,339 | ) | (54,781 | ) | ||||||||
Net (decrease)/increase in cash and cash equivalents | (13,324,927 | ) | (8,815,054 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | 1,277,255 | 592,005 | ||||||||||
Cash and cash equivalents at beginning of period | 33,131,280 | 55,386,240 | ||||||||||
Cash and cash equivalents at end of period | 4 | 21,083,608 | 47,163,191 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
[6]
InflaRx N.V. and subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
1. Net Financial Result
The net financial result is comprised of the following items for the three months ended March 31:
For the three months ended March 31, | ||||||||
(in €) | 2020 (unaudited) | 2019 (unaudited) | ||||||
Finance income | ||||||||
Interest income | 401,435 | 802,734 | ||||||
Foreign exchange income | 1,257,557 | 356,471 | ||||||
Total | 1,658,991 | 1,159,205 | ||||||
Finance costs | ||||||||
Foreign exchange expense | (115,879 | ) | (54,022 | ) | ||||
Other | (2,147 | ) | (7,688 | ) | ||||
Total | (118,026 | ) | (61,710 | ) | ||||
Net financial result | 1,540,965 | 1,097,495 |
Interest income results from marketable securities and short-term deposits in U.S. Dollar held by the Company and its subsidiary InflaRx GmbH.
Foreign exchange income and expense is mainly derived from the translation of the U.S. Dollar cash, cash equivalents and securities held by InflaRx GmbH.
2. Other non-financial assets
(in €) | As of March 31, 2020 (unaudited) | As of December 31, 2019 | ||||||
Non-current other assets | ||||||||
Prepaid expense | 445,403 | 452,217 | ||||||
Total | 445,403 | 452,217 | ||||||
Current other assets | ||||||||
Current tax assets | 1,051,858 | 1,134,968 | ||||||
Prepayments on research & development projects | 959,727 | 698,891 | ||||||
Prepaid expense | 1,018,143 | 1,467,936 | ||||||
Other | 289,493 | 199,088 | ||||||
Total | 3,319,222 | 3,500,884 |
Prepaid expense mainly consists of accrued insurance expense. Total prepaid expense mainly has decreased compared to December 31, 2019, because Directors and Officers insurance is an annual insurance payment in the fourth quarter of the year.
Current tax assets in 2020 include tax reclaims because of capital yields tax withheld. Such tax is withheld by our banks from securities interest payments, and the Company is reimbursed after filing the tax return. The decrease is due to lower interest rates compared to the first quarter of 2019.
[7]
3. Financial assets and financial liabilities
Set out below is an overview of financial assets and liabilities, other than cash and short-term deposits, held by the Group as of March 31, 2020 and December 31, 2019:
(in €) | As of March 31, 2020 (unaudited) | As of December 31, 2019 | ||||||
Financial assets at amortized cost | ||||||||
Non-current financial assets | 272,718 | 272,614 | ||||||
Current financial assets | 86,680,961 | 82,353,867 | ||||||
Financial liabilities at amortized cost | ||||||||
Trade and other payables | 10,490,938 | 12,413,662 | ||||||
Interest bearing loans and borrowings | ||||||||
Non-current lease liabilities | 245,478 | 330,745 | ||||||
Current lease liabilities | 512,099 | 513,834 |
The fair value of current and non-current financial assets (primarily quoted debt securities) amounted to €86,661 thousand (level 1). The Group’s debt instruments at amortized cost consist solely of quoted securities that are graded in the top investment category (AAA) by credit rating agencies such as S&P Global and, therefore, are considered low credit risk investments. Based on statistical historical probabilities of default, adjusted for forward-looking factors specific to the debtors and the economic environment, the Group believes that the expected credit losses for these debt instruments are immaterial. Furthermore, since the acquisition of these debt securities, their credit ratings have remained stable.
4. Cash and cash equivalents information
(in €) | As of March 31, 2020 (unaudited) | As of December 31, 2019 | ||||||
Short-term deposits | ||||||||
Deposits held in U.S. Dollars | 19,535,311 | 27,803,153 | ||||||
Total | 19,535,311 | 27,803,153 | ||||||
Cash at banks | ||||||||
Cash held in Euro | 1,069,355 | 1,211,478 | ||||||
Cash held in U.S. Dollars | 478,942 | 4,116,649 | ||||||
Total | 1,548,297 | 5,328,127 | ||||||
Total cash and cash equivalents | 21,083,608 | 33,131,280 |
[8]
5. Related party transactions
The Group’s executive management comprises the following persons:
• | Professor Niels C. Riedemann, Chief Executive Officer (CEO) |
• | Professor Renfeng Guo, Chief Scientific Officer (CSO) |
• | Arnd Christ, Chief Financial Officer (CFO) |
• | Jason Marks, Chief Legal Officer, General Counsel (CLO) |
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 of the board of directors and Chairman of the Audit Committee |
• | Jens Holstein, Member of the Audit Committee |
• | Richard Brudnick, Member of the Audit Committee |
• | Katrin Uschmann |
• | Lina Ma |
• | Mark Kübler |
The compensation of the Group’s executive management comprises the following for the three months ended March 31:
For the three months ended March 31, | ||||||||
(in €) | 2020 (unaudited) | 2019 (unaudited) | ||||||
Executive Management | ||||||||
Short-term employee benefits | 638,288 | 771,820 | ||||||
Share-based payments | 657,172 | 1,607,456 | ||||||
Total | 1,295,460 | 2,379,276 | ||||||
Non-executive Board of Directors | ||||||||
Short-term employee benefits | 63,864 | 70,432 | ||||||
Share-based payments | 108,453 | 227,552 | ||||||
Total | 172,317 | 297,984 | ||||||
Total Compensation | 1,467,777 | 2,677,260 |
Remuneration of InflaRx’s executive management consists of fixed and variable components and share-based payment awards. In addition, the executive management receives supplementary benefits and allowances.
[9]
We entered into indemnification agreements with our directors and senior management. The indemnification agreements and our articles of association require us to indemnify our directors and certain officers and employees as designated by our board of directors to the fullest extent permitted by law.
6. Share-based payments
1. | Equity settled share-based payment arrangements |
In conjunction with the closing of its initial public offering, InflaRx N.V. established a new incentive plan (the “2017 Long-Term Incentive Plan”). The initial maximum number of common shares available for issuance under equity incentive awards granted pursuant to the 2017 Long Term Incentive Plan equals 2,341,097 common shares. The number of share options under the plan was as follows:
Share options granted | Number | Per option | FX rate as of grant date | Per option | Share price at grant date / Exercise price | Expected volatility | Expected life (midpoint based) | Risk-free rate (interpolated, U.S. sovereign strips curve) | ||||||||||||||||||||||||
2019 | ||||||||||||||||||||||||||||||||
January 1 | — | $ | 14.45 | 0.88 | € | 12.69 | $ | 26.02 | 0.65 | 4.8 | 3.00 | % | ||||||||||||||||||||
February 4 | 18,450 | $ | 18.17 | 0.87 | € | 15.87 | $ | 32.63 | 0.65 | 4.9 | 2.60 | % | ||||||||||||||||||||
18,450 |
Expected dividends are nil for all share options listed above.
None of the options were granted to the executive management or board of directors.
Number of stock options | 2020 | 2019 | ||||||
Outstanding as of January 1, | 2,181,105 | 2,051,009 | ||||||
Granted during the three months ended March 31 | — | 18,450 | ||||||
Forfeited during the three months ended March 31 | — | — | ||||||
Outstanding as of March 31, | 2,181,105 | 2,069,459 | ||||||
thereof vested | 1,483,623 | 728,722 | ||||||
thereof exercised | — | — |
On January 1, 2021 and on January 1 of each calendar year thereafter, an additional number of shares equal to 3% of the total outstanding common shares on December 31 of the immediately preceding year (or any lower number of shares as determined by the board of directors) will become available for issuance under equity incentive awards granted pursuant to the 2017 Long-Term Incentive Plan.
2. | Stock options exercised |
In 2020 no stock options were exercised.
In 2019, 140,876 shares were issued following the exercise of stock options, resulting in proceeds to the Company in the amount of €1.7 thousand. All stock options exercised were granted under the 2012 Stock Option Plan.
3. | Measurement of fair values of stock options granted |
The fair value of options granted under the 2017 long-term incentive plan 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.
Expected volatility has been based on the historical volatility of InflaRx’ share price. Considering a significant price drop on June 5, 2019, we calculated averages including and excluding said trading day which results in an average volatility of 124%. For grants after June 2019 we have selected a volatility of 135% that accounts for expectations of the management.
[10]
The range of outcomes for the expected life of the instruments has been based on expectations on option holder behavior in the scenarios considered.
The dividend yield has no impact due to the anti-dilution clause as defined in the 2017 Long-Term Incentive Plan.
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:
• | the more options are granted within a tranche, the higher the expense of a tranche is, and |
• | the shorter the vesting period of a tranche is, the higher the expense of a tranche is. |
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.
The following table shows the recognized compensation expenses per stock option plan and the repricing of stock options, consummated on July 3, 2019. Anticipated expenses for the twelve-month period ending December 31, 2022, 2021 and 2020 were converted with the exchange rate as of March 31, 2020, 1 Euro = 1.0956 USD:
2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||
(in million €) | ||||||||||||||||||||||||
2016 Plan | — | — | — | — | — | 4.0 | ||||||||||||||||||
2017 Long-Term Incentive plan | — | 0.3 | 2.1 | 5.2 | 12.1 | 0.6 | ||||||||||||||||||
Repricing consummated on July 3, 2019 | — | — | 0.3 | 1.6 | — | — | ||||||||||||||||||
2016 Plan | — | — | — | 0.5 | — | — | ||||||||||||||||||
2017 Long-Term Incentive plan | — | — | 0.3 | 1.1 | — | — | ||||||||||||||||||
Total compensation expense | — | 0.3 | 2.4 | 6.8 | 12.1 | 4.6 |
For the three months ended March 31, 2020, the Company has recognized €793 thousand of share-based payment expense in the statement of profit or loss (March 2019: €2,098 thousand).
None of the share-based payments awards were dilutive in determining earnings per share due to the Group’s loss position.
[11]
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.
In order to deter acquisition bids, the Company`s general meeting of shareholders approved the right of an in-dependent foundation under Dutch law, or protective foundation, to exercise a call option pursuant to the call option agreement, upon which preferred shares will be issued by the Company to the protective foundation of up to 100% of the Company’s issued capital held by others than the protective foundation, minus one share. The protective foundation is expected to enter into a finance arrangement with a bank or, subject to applicable restrictions under Dutch law, the protective foundation may request us to provide, or cause the Company`s subsidiaries to pro-vide, sufficient funding to the protective foundation to enable it to satisfy its payment obligation under the call option agreement.
These preferred shares will have both a liquidation and dividend preference over the Company`s common shares and will accrue cash dividends at a pre-determined rate. The protective foundation would be expected to re-quire us to cancel its preferred shares once the perceived threat to the Company and its stake-holders has been removed or sufficiently mitigated or neutralized. We are of the opinion that the call option does not represent a significant fair value based on a level 3 valuation, since the preference shares are restricted in use and can be can-celled by us as stated above.
In the quarter ended March 31, 2020, the Company expensed €17 thousand of ongoing costs to reimburse expenses incurred by the protective foundation.
8. Summary of significant accounting policies
(a) | Reporting entity and Group’s structure |
InflaRx N.V. is a Dutch public company with limited liability (naamloze vennootschap) with its corporate seat in Amsterdam, The Netherlands, and is registered in the Commercial Register of The Netherlands Chamber of Commerce Business Register under CCI number 68904312. The Company’s registered office is at Winzerlaer Straße 2 in 07745 Jena, Germany. Since November 10, 2017, InflaRx N.V.’s common shares have been listed on The NASDAQ Global Select Market under the symbol IFRX.
InflaRx is a clinical-stage biopharmaceutical Group focused on applying its proprietary anti-C5a technology to discover and develop first-in-class, potent and specific inhibitors of the complement activation factor known as C5a.
These consolidated financial statements of InflaRx comprise the Company and its wholly-owned subsidiaries InflaRx GmbH and InflaRx Pharmaceutical Inc., Ann Arbor, Michigan, United States.
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 consolidated financial statements of InflaRx N.V. comprise the Group.
(b) | Basis of preparation |
These interim condensed consolidated financial statements for the three-month reporting period ended March 31, 2020 have been prepared in accordance with IAS 34 Interim Financial Reporting. The interim report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended December 31, 2019 in the 20-F.
The condensed consolidated financial statements were authorized for issue by the board of directors on May 20, 2020.
[12]
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, 2019, except for the adoption of new standards effective as of January 1, 2020 as set out below.
(c) | New and amended standards adopted by the Group |
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2019, except for the adoption of new standards effective as of 1 January 2020. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
The below listed amendments and interpretations apply for the first time in 2020, but do not have an impact on the interim condensed consolidated financial statements of the Group:
• | Conceptual Framework Amendments, References to the Conceptual Framework in IFRS Standards (IFRS 2 Share-Based Payment, IFRS 3 Business Combinations, IAS 8 Accounting Policies, IAS 34 Interim Financial Reporting, IAS 37 Provisions, Contingent Liabilities and Contingent Assets, IFRIC 12 Service Concession Arrangements, IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments,, IFRIC 22 Foreign Currency Transactions and Advance Consideration, SIC 32 Intangible Assets — Web Site Costs,), effective as of January 1, 2020 |
• | IFRS 7 Financial Instruments Disclosures, effective January 1, 2020, IAS 38 Intangible Assets, as of January 1, 2020 |
• | IAS 39 Financial Instruments: Recognition and Measurement, as of January 1, 2020 |
• | IFRS 9 Financial Instruments, Interest Rate Benchmark Reform, effective January 1, 2020 |
• | IAS 1 Presentation of Financial Statements, Definition of Material / References to Conceptual Framework in IFRS Standards, as of January 1, 2020 |
(d) | Summary of new accounting policies |
No new accounting policies were adopted within the Group.
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(e) | Significant events after the reporting date |
Clinical Study AAV
As of October 2018, 19 patients have been recruited in the randomized, triple blind, placebo-controlled US Phase II IXPLORE study with IFX-1 in patients with AAV. The main objective of the study is to evaluate the efficacy and safety of two dose regimens of IFX-1 in patients with moderate to severe AAV, when dosed on top of standard of care, which includes treatment with high dose glucocorticoids. The trial originally planned to enroll approximately 36 patients at centers in the US. Based on a blinded interim analysis and assessment of the potential impact of the COVID-19 pandemic, the Company has decided to stop the study and read out the existing results earlier than initially planned as part of a strategy to align and streamline the US and EU AAV development pro-gram.
In May 2019, the Company initiated a randomized, double-blind, placebo-controlled European Phase II IXCHANGE study with IFX-1 in patients with AAV. The main objective of the study is to evaluate the efficacy and safety of IFX-1 in patients with moderate to severe AAV. The primary endpoint of the study is a 50% reduction in Birmingham Vasculitis Activity Score (BVAS) at week 16. The study was originally planned to enroll approximately 80 patients at about 60 sites in up to 12 European countries and Russia. The study is being conducted in two parts. In Part 1, patients are being randomized to receive either IFX-1 plus a reduced dose of glucocorticoids, or placebo plus a standard dose of glucocorticoids. Patients in both arms receive the standard of care dosing of immunosuppressive therapy (rituximab or cyclophosphamide). In Part 2 of the study, patients will be randomized to receive either IFX-1 plus placebo glucocorticoids or placebo plus a standard dose of glucocorticoids (both on top of standard of care immunosuppressive therapy with rituximab or cyclophosphamide). The first part of the study has been fully enrolled. After analyzing the impact of COVID-19 on the study, a blinded interim analysis of Part 1 has been completed. Based on the analysis, the Company intends to continue with Part 2 of the study but decrease the number of enrolled patients.
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