Exhibit 99.1
InflaRx N.V.
Unaudited Condensed Consolidated
Financial Statements – June 30, 2024
These unaudited condensed financial statements are consolidated financial statements for the group consisting of InflaRx N.V. and its wholly-owned subsidiaries InflaRx GmbH, Jena, Germany, and InflaRx Pharmaceuticals Inc., Ann Arbor, Michigan, United States (together, the “Group”). The financial statements are presented in euros (€).
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
for the three and six months ended June 30, 2024
F-2
InflaRx N.V. and subsidiaries
Unaudited condensed consolidated statements of operations and comprehensive loss
for the three and six months ended June 30, 2024 and 2023
| For the three months ended June 30, | For the six months ended June 30 | |||||||||||||||||||
| Note | 2024 (unaudited) | 2023 (unaudited) | 2024 (unaudited) | 2023 (unaudited) | ||||||||||||||||
| (in €, except for share data) | ||||||||||||||||||||
| Revenues | 2 | 6,357 | — | 42,394 | — | |||||||||||||||
| Cost of sales | 3 | (348,153 | ) | — | (568,674 | ) | — | |||||||||||||
| Gross profit | (341,796 | ) | — | (526,280 | ) | — | ||||||||||||||
| Sales and marketing expenses | 4 | (1,828,628 | ) | (276,051 | ) | (3,288,167 | ) | (276,051 | ) | |||||||||||
| Research and development expenses | 5 | (10,016,870 | ) | (10,919,595 | ) | (17,318,680 | ) | (25,651,503 | ) | |||||||||||
| General and administrative expenses | (3,226,098 | ) | (3,540,805 | ) | (6,805,249 | ) | (7,149,359 | ) | ||||||||||||
| Other income | 6 | 16,730 | 4,882,908 | 53,023 | 12,629,096 | |||||||||||||||
| Other expenses | — | (2,624 | ) | — | (3,190 | ) | ||||||||||||||
| Operating result | (15,396,663 | ) | (9,856,168 | ) | (27,885,353 | ) | (20,451,007 | ) | ||||||||||||
| Finance income | 7 | 848,243 | 1,087,011 | 1,754,148 | 1,543,047 | |||||||||||||||
| Finance expenses | 7 | (8,732 | ) | (5,052 | ) | (10,844 | ) | (10,580 | ) | |||||||||||
| Foreign exchange result | 7 | 711,411 | 767,646 | 2,535,787 | (369,664 | ) | ||||||||||||||
| Other financial result | 7 | — | (195,567 | ) | 103,285 | 2,241 | ||||||||||||||
| Income taxes | — | — | — | — | ||||||||||||||||
| Income (loss) for the period | (13,845,741 | ) | (8,202,130 | ) | (23,502,977 | ) | (19,285,963 | ) | ||||||||||||
| Other comprehensive income (loss) that may be reclassified to profit or loss in subsequent periods: | ||||||||||||||||||||
| Exchange differences on translation of foreign currency | 28,374 | (330 | ) | 2,836 | (17,116 | ) | ||||||||||||||
| Total comprehensive income (loss) | (13,817,367 | ) | (8,202,460 | ) | (23,500,141 | ) | (19,303,079 | ) | ||||||||||||
| Share information (based on income (loss) for the period) | ||||||||||||||||||||
| Weighted average number of shares outstanding | 58,883,272 | 56,985,734 | 58,883,272 | 50,912,459 | ||||||||||||||||
| Income (loss) per share (basic/diluted) | (0.24 | ) | (0.14 | ) | (0.40 | ) | (0.38 | ) | ||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-3
InflaRx N.V. and subsidiaries
Unaudited condensed consolidated statements of financial position as of June 30, 2024 and December 31, 2023
| Note | June 30, 2024 (unaudited) | December 31, 2023 | ||||||||||
| (in €) | ||||||||||||
| ASSETS | ||||||||||||
| Non-current assets | ||||||||||||
| Property and equipment | 272,446 | 289,577 | ||||||||||
| Right-of-use assets | 950,070 | 1,071,666 | ||||||||||
| Intangible assets | 44,876 | 68,818 | ||||||||||
| Other assets | 9 | 230,750 | 257,267 | |||||||||
| Financial assets | 11 | 237,755 | 9,052,741 | |||||||||
| Total non-current assets | 1,735,897 | 10,740,069 | ||||||||||
| Current assets | ||||||||||||
| Inventories | 8 | 9,644,241 | 11,367,807 | |||||||||
| Other assets | 9 | 4,865,751 | 4,036,650 | |||||||||
| Trade receivables | 11 | 23,727 | — | |||||||||
| Tax receivables | 10 | 1,775,404 | 3,791,564 | |||||||||
| Financial assets | 11 | 55,838,699 | 77,504,518 | |||||||||
| Cash and cash equivalents | 13 | 19,152,121 | 12,767,943 | |||||||||
| Total current assets | 91,299,943 | 109,468,483 | ||||||||||
| TOTAL ASSETS | 93,035,840 | 120,208,552 | ||||||||||
| EQUITY AND LIABILITIES | ||||||||||||
| Equity | ||||||||||||
| Issued capital | 14 | 7,065,993 | 7,065,993 | |||||||||
| Share premium | 14 | 334,211,338 | 334,211,338 | |||||||||
| Other capital reserves | 43,123,867 | 40,050,053 | ||||||||||
| Accumulated deficit | (309,630,796 | ) | (286,127,819 | ) | ||||||||
| Other components of equity | 7,385,002 | 7,382,166 | ||||||||||
| Total equity | 82,155,403 | 102,581,730 | ||||||||||
| Non-current liabilities | ||||||||||||
| Lease liabilities | 601,195 | 745,716 | ||||||||||
| Other liabilities | 12 | 36,877 | 36,877 | |||||||||
| Total non-current liabilities | 638,072 | 782,593 | ||||||||||
| Current liabilities | ||||||||||||
| Trade and other payables | 11 | 8,544,902 | 11,974,362 | |||||||||
| Lease liabilities | 397,475 | 374,329 | ||||||||||
| Employee benefits | 1,125,663 | 1,609,766 | ||||||||||
| Other liabilities | 12 | 174,325 | 2,885,772 | |||||||||
| Total current liabilities | 10,242,365 | 16,844,229 | ||||||||||
| Total Liabilities | 10,880,437 | 17,626,822 | ||||||||||
| TOTAL EQUITY AND LIABILITIES | 93,035,840 | 120,208,552 | ||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-4
InflaRx N.V. and subsidiaries
Unaudited condensed consolidated statements of changes in shareholders’ equity for the six months ended June 30, 2024 and 2023
| (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, 2024 | 58,883,272 | 7,065,993 | 334,211,338 | 40,050,053 | (286,127,819 | ) | 7,382,166 | 102,581,730 | ||||||||||||||||||||||||
| Loss for the period | — | — | — | — | (23,502,977 | ) | — | (23,502,977 | ) | |||||||||||||||||||||||
| Exchange differences on translation of foreign currency | — | — | — | — | — | 2,836 | 2,836 | |||||||||||||||||||||||||
| Total comprehensive loss | — | — | — | — | (23,502,977 | ) | 2,836 | (23,500,141 | ) | |||||||||||||||||||||||
| Equity-settled share-based payments | 15 | — | — | — | 3,073,814 | — | — | 3,073,814 | ||||||||||||||||||||||||
| Balance as of June 30, 2024* | 58,883,272 | 7,065,993 | 334,211,338 | 43,123,867 | (309,630,796 | ) | 7,385,002 | 82,155,403 | ||||||||||||||||||||||||
| Balance as of January 1, 2023 | 44,703,763 | 5,364,452 | 282,552,633 | 36,635,564 | (243,460,290 | ) | 7,257,081 | 88,349,440 | ||||||||||||||||||||||||
| Loss for the period | — | — | — | — | (19,285,963 | ) | — | (19,285,963 | ) | |||||||||||||||||||||||
| Exchange differences on translation of foreign currency | — | — | — | — | — | (17,116 | ) | (17,116 | ) | |||||||||||||||||||||||
| Total comprehensive loss | — | — | — | — | (19,285,963 | ) | (17,116 | ) | (19,303,079 | ) | ||||||||||||||||||||||
| Issuance of common shares | 14,059,252 | 1,687,110 | 54,796,819 | — | — | — | 56,483,929 | |||||||||||||||||||||||||
| Transaction costs | — | — | (3,360,626 | ) | — | — | — | (3,360,626 | ) | |||||||||||||||||||||||
| Equity-settled share-based payments | 15 | — | — | — | 2,239,397 | — | — | 2,239,397 | ||||||||||||||||||||||||
| Share options exercised | 120,257 | 14,431 | 222,512 | — | — | — | 236,943 | |||||||||||||||||||||||||
| Balance as of June 30, 2023* | 58,883,272 | 7,065,993 | 334,211,338 | 38,874,961 | (262,746,253 | ) | 7,239,965 | 124,646,004 | ||||||||||||||||||||||||
| * | unaudited |
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-5
InflaRx N.V. and subsidiaries
Unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2024 and 2023
| For the six months ended June 30, | ||||||||||||
| Note | 2024 (unaudited) | 2023 (unaudited) | ||||||||||
| (in €) | ||||||||||||
| Operating activities | ||||||||||||
| Loss for the period | (23,502,977 | ) | (19,285,963 | ) | ||||||||
| Adjustments for: | ||||||||||||
| Depreciation & amortization of property and equipment, right-of-use assets and intangible assets | 262,932 | 293,328 | ||||||||||
| Net finance income | 7 | (4,382,376 | ) | (1,165,044 | ) | |||||||
| Share-based payment expense | 15 | 3,073,813 | 2,239,397 | |||||||||
| Net foreign exchange differences | 7 | (101,055 | ) | (23,953 | ) | |||||||
| Changes in: | ||||||||||||
| Financial assets from government grants | — | (4,460,274 | ) | |||||||||
| Inventories | 10 | 1,723,566 | (578,705 | ) | ||||||||
| Trade receivables | 11 | (23,727 | ) | — | ||||||||
| Other assets | 9 | 1,213,575 | 6,295,975 | |||||||||
| Employee benefits | (484,102 | ) | (411,774 | ) | ||||||||
| Other liabilities | 12 | (2,711,447 | ) | 60,443 | ||||||||
| Liabilities from government grants received | 11 | — | (5,407,634 | ) | ||||||||
| Trade and other payables | 11 | (3,429,460 | ) | 213,270 | ||||||||
| Interest received | 7 | 1,369,670 | 556,068 | |||||||||
| Interest paid | 7 | (11,048 | ) | (10,777 | ) | |||||||
| Net cash used in operating activities | (27,002,634 | ) | (21,685,642 | ) | ||||||||
| Investing activities | ||||||||||||
| Purchase of intangible assets, property and equipment | (28,310 | ) | (24,673 | ) | ||||||||
| Purchase of current financial assets | (23,254,210 | ) | (83,071,163 | ) | ||||||||
| Proceeds from the maturity of financial assets | 56,221,278 | 55,202,491 | ||||||||||
| Net cash from / (used in) investing activities | 32,938,758 | (27,893,346 | ) | |||||||||
| Financing activities | ||||||||||||
| Proceeds from issuance of common shares | — | 56,483,929 | ||||||||||
| Transaction costs from issuance of common shares | — | (3,360,626 | ) | |||||||||
| Proceeds from exercise of share options | 15 | — | 236,943 | |||||||||
| Repayment of lease liabilities | (193,053 | ) | (184,791 | ) | ||||||||
| Net cash from / (used in) financing activities | (193,053 | ) | 53,175,455 | |||||||||
| Net increase in cash and cash equivalents | 5,743,071 | 3,596,467 | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 641,107 | (345,862 | ) | |||||||||
| Cash and cash equivalents at beginning of period | 12,767,943 | 16,265,355 | ||||||||||
| Cash and cash equivalents at end of period | 13 | 19,152,121 | 19,515,959 | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-6
InflaRx N.V. and subsidiaries
Notes to the unaudited condensed consolidated financial statements
| 1. | Summary of significant accounting policies and other disclosures |
| a) | Reporting entity and the Group’s structure |
InflaRx N.V. (the “Company” or “InflaRx”) is a Dutch public company with limited liability (naamloze vennootschap) with its corporate seat in Amsterdam, the Netherlands, and is registered in the Commercial Register of the Netherlands Chamber of Commerce Business Register under CCI number 68904312. The Company’s registered office is at Winzerlaer Straße 2 in 07745 Jena, Germany. Since November 10, 2017, InflaRx N.V.’s ordinary shares have been listed on the Nasdaq Global Select Market under the symbol IFRX.
InflaRx is a biopharmaceutical company focused on applying its proprietary anti-C5a and C5aR technologies to discover, develop and commercialize first-in-class, potent and specific inhibitors of the complement activation factor known as C5a and its receptor C5aR. On April 4, 2023, the U.S. Food and Drug Administration issued an Emergency Use Authorization (the “EUA”) for GOHIBIC (vilobelimab), for the treatment of COVID-19 in critically ill, invasively mechanically ventilated hospitalized adults. These consolidated financial statements of InflaRx comprise the Company and the Group.
| b) | Basis of preparation |
These interim condensed consolidated financial statements for the six-month reporting period ended June 30, 2024, and 2023 have been prepared in accordance with IAS 34 Interim Financial Reporting. These condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements. Accordingly, this report is to be read in conjunction with the financial statements in the Company’s annual report for the year ended December 31, 2023 on Form 20-F.
The interim condensed consolidated financial statements were authorized for issue by the board of directors of the Company (the “Board of Directors”) on August 7, 2024.
The financial statements are presented in euros (€). The euro is the functional currency of InflaRx N.V. and InflaRx GmbH. The functional currency of InflaRx Pharmaceuticals Inc. is the U.S. dollar.
All financial information presented in euros have 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, 2023, except for the adoption of new standards effective as of January 1, 2024, as set out below. The Group has not adopted any other standard, interpretation or amendment that has been issued but is not yet effective early.
The following amendments were adopted effective January 1, 2024, and do not have a material impact on the consolidated financial statements of the Group:
| ● | Amendments to IFRS 16 Leases: Leases on Sale and Leaseback |
| ● | Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants |
| ● | Amendments to IAS 7, Statement of Cash Flows and IFRS 7, -Supplier Finance Arrangements |
The following standards issued will be adopted in a future period, and the potential impact, if any, they will have on the Group’s consolidated financial statements is being assessed:
| ● | Amendments to IAS 21 Effects of Changes in Foreign Exchange Rates: Lack of exchangeability |
| ● | IFRS 18 Presentation and Disclosure in Financial Statements |
F-7
| 2. | Revenues |
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2024 (unaudited) | 2023 (unaudited) | 2024 (unaudited) | 2023 (unaudited) | |||||||||||||
| (in €) | ||||||||||||||||
| Revenues | 6,357 | — | 42,394 | — | ||||||||||||
| Total | 6,357 | — | 42,394 | — | ||||||||||||
For the three months ended June 30, 2024, the Company realized revenues from the product sales of GOHIBIC (vilobelimab) in the amount of €6 thousand. For the six months ended June 30, 2024, the Company realized revenues from GOHIBIC (vilobelimab) product sales in the amount of €42 thousand.
Revenues reported are sales to end customers (hospitals). Sales to distributors do not constitute revenue for the Company under IFRS 15. All revenues are attributed to sales made in the United States.
| 3. | Cost of sales |
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2024 (unaudited) | 2023 (unaudited) | 2024 (unaudited) | 2023 (unaudited) | |||||||||||||
| (in €) | ||||||||||||||||
| Cost of sales | 348,153 | — | 568,674 | — | ||||||||||||
| Total | 348,153 | — | 568,674 | — | ||||||||||||
The cost of sales during the three and six months ended June 30, 2024 primarily consisted of write-downs of short-lived inventories.
| 4. | Sales and marketing expenses |
Sales and marketing expenses incurred for the three months ended June 30, 2024 increased by €1.6 million compared to the three months ended June 30, 2023. For the six months ended June 30, 2024 these expenses increased by €3.0 million compared to the six months ended June 30, 2023. This increase is primarily due to minimal sales and marketing activities incurred during the three and six months ended June 30, 2023 due to the GOHIBIC EUA approval in 2023. Sales and marketing expenses were incurred for all of the three and six months ended June 30, 2024.
| 5. | Research and development expenses |
Research and development expenses incurred for the three months ended June 30, 2024 decreased by €0.9 million compared to the three months ended June 30, 2023. For the six months ended June 30, 2024 these expenses decreased by €8.3 million compared to the six months ended June 30, 2023. The decrease for the three and six month ended June 30, 2024 is primarily due to higher third-party expenses incurred during the first half of 2023 in connection with the company’s efforts to develop the commercial manufacturing process, and to obtain an EUA, for GOHIBIC (vilobelimab). The decrease of third-party expenses is offset by an increase of personnel expenses by €1.2 million. This increase is attributed to higher stock-based compensation expenses.
F-8
| 6. | Other income |
| For the three months ended June 30, | For the six months ended June 30 | |||||||||||||||
| 2024 (unaudited) | 2023 (unaudited) | 2024 (unaudited) | 2023 (unaudited) | |||||||||||||
| (in €) | ||||||||||||||||
| Other income | ||||||||||||||||
| Income from government grants | — | 4,874,934 | — | 12,609,789 | ||||||||||||
| Other | 16,730 | 7,974 | 53,023 | 19,307 | ||||||||||||
| Total | 16,730 | 4,882,908 | 53,023 | 12,629,096 | ||||||||||||
Other income for the three months ended June 30, 2024 amounted to €17 thousand (2023: €4.9 million) and for the six months ended June 30, 2024 amounted to €53 thousand (2023: €12.6 million). There was no income from government grants in 2024 due to the end of the grant period on June 30, 2023.
| 7. | Net financial result |
| For the three months ended June 30, | For the six months ended June 30 | |||||||||||||||
| 2024 (unaudited) | 2023 (unaudited) | 2024 (unaudited) | 2023 (unaudited) | |||||||||||||
| (in €) | ||||||||||||||||
| Interest income | 848,243 | 1,087,011 | 1,754,148 | 1,543,047 | ||||||||||||
| Interest expenses | (2,056 | ) | (363 | ) | 25 | (782 | ) | |||||||||
| Interest on lease liabilities | (6,676 | ) | (4,689 | ) | (10,869 | ) | (9,798 | ) | ||||||||
| Finance Result | 839,511 | 1,081,959 | 1,743,304 | 1,532,467 | ||||||||||||
| Foreign exchange income | 1,754,243 | 2,090,994 | 3,803,826 | 2,381,519 | ||||||||||||
| Foreign exchange expense | (1,042,832 | ) | (1,323,348 | ) | (1,268,039 | ) | (2,751,183 | ) | ||||||||
| Foreign exchange result | 711,411 | 767,646 | 2,535,787 | (369,664 | ) | |||||||||||
| Other financial result | — | (195,567 | ) | 103,285 | 2,241 | |||||||||||
| Net financial result | 1,550,922 | 1,654,038 | 4,382,376 | 1,165,044 | ||||||||||||
Net financial result decreased by €0.1 million to a gain of €1.6 million for the three months ended June 30, 2024 from €1.7 million for the three months ended June 30, 2023. This decrease is mainly attributable to a decrease of interest income on marketable securities by €0.2 million and an increase of other financial result by €0.2 million due to no adjustment for expected credit losses recorded during the second quarter.
Net financial result increased by €3.2 million to €4.4 million for the six months ended June 30, 2024. This increase was mainly attributable to higher interest income which increased by €0.2 million, and additionally by the increase in foreign exchange result of €2.9 million.
F-9
| 8. | Inventory |
| As of June 30, 2024 (unaudited) | As of December 31, 2023 | |||||||
| (in €) | ||||||||
| Raw material and supplies | 138,414 | 423,560 | ||||||
| Unfinished goods | 9,459,267 | 10,614,159 | ||||||
| Finished goods | 46,559 | 330,087 | ||||||
| Total | 9,644,241 | 11,367,807 | ||||||
For the three and six months ended June 30, 2024, the Group recorded write downs of finished goods of €0.1 million and €0.3 million, For the three and six months ended June 30, 2024, the Group recorded write downs of raw materials and supplies of €0.3 million and €0.3 million. These write-downs were due to the expected expiry of the shelf life. Additionally, in the six months ended June 30, 2024, unfinished inventory decreased as €1.2 million was recorded to R&D expense for use in clinical studies.
| 9. | Other assets |
| As of June 30, 2024 (unaudited) | As of December 31, 2023 | |||||||
| (in €) | ||||||||
| Non-current other assets | ||||||||
| Prepaid expenses | 230,750 | 257,267 | ||||||
| Total | 230,750 | 257,267 | ||||||
| Current other assets | ||||||||
| Prepayments on research & development projects | 3,450,064 | 3,670,167 | ||||||
| Prepaid expenses | 1,113,552 | 272,999 | ||||||
| Others | 302,135 | 93,482 | ||||||
| Total | 4,865,751 | 4,036,648 | ||||||
| Total other assets | 5,096,501 | 4,293,915 | ||||||
As of June 30, 2024, prepayments on research and development projects amounted to €3.5 million compared to €3.7 million as of December 31, 2023, and consist of prepayments on clinical contracts, especially for INF904.
Prepaid expenses mainly consist of prepaid D&O insurance expense for the year 2024, which will be recognized into general and administrative expenses pro rata over the year.
The category “others” primarily relate to prepayments on commercial production.
F-10
| 10. | Tax receivable |
As of June 30, 2024, tax receivable amounted to €1.8 million compared to €3.8 million as of December 31, 2023. The decrease is mainly attributable to VAT refunds for Q2 2023 and Q3 2023 received during the six months ended June 30, 2024.
| 11. | Financial assets and financial liabilities |
Set out below is an overview of financial assets and liabilities, other than cash and cash equivalents, held by the Group as of June 30, 2024 and December 31, 2023:
| As of June 30, 2024 (unaudited) | As of December 31, 2023 | |||||||
| (in €) | ||||||||
| Financial assets at amortized cost | ||||||||
| Trade receivables | 23,727 | — | ||||||
| Non-current financial assets | 237,755 | 9,052,741 | ||||||
| Thereof marketable securities | — | 8,815,120 | ||||||
| Current financial assets | 55,838,699 | 77,504,518 | ||||||
| Thereof marketable securities | 55,398,920 | 76.912,342 | ||||||
| Financial liabilities at amortized cost | ||||||||
| Trade and other payables | 8,544,902 | 14,716,441 | ||||||
As of June 30, 2024, the fair value of current and non-current financial assets (primarily quoted debt securities) amounted to €55.7 million (Level 1). The Group’s debt instruments at amortized cost consist solely of quoted securities that are graded highly by credit rating agencies such as S&P Global and, therefore, are considered low credit risk investments.
As of June 30, 2024, current and non-current financial assets decreased by €30.5 million to €56.1 million compared to €86.6 million as of December 31, 2023. The decrease is mainly due to the maturity of financial assets, and their subsequent reinvestment into interest bearing bank deposits, which are accounted for as part of cash and cash equivalents.
As of June 30, 2024, trade and other payables decreased by €6.2 million to €8.5 million compared to €14.7 million as of December 31, 2023. At December 31, 2023 the Company temporarily had higher trade payables from CDMO’s, that arose in connection with the manufacturing of commercial products.
Trade receivables arose from GOHIBIC (vilobelimab) product deliveries to end customers (hospitals) through a subsidiary of Cencora, which acts as the U.S. distributor for the Company.
| 12. | Other liabilities |
| As of June 30, 2024 (unaudited) | As of December 31, 2023 | |||||||
| (in €) | ||||||||
| Liabilities to commercial partner | — | 2,784,231 | ||||||
| Miscellaneous other liabilities | 174,325 | 101,542 | ||||||
| Total | 174,325 | 2,885,773 | ||||||
As of June 30, 2024, a subsidiary of Cencora which acts as the U.S. distributor for the Company, returned products to the Company and the Company repaid funds previously paid by Cencora, thereby extinguishing liabilities to commercial partners.
In accordance with IFRS 15, InflaRx recognizes revenue when control of product is transferred to the end customers (hospitals). Therefore, InflaRx recognizes a liability in liabilities to commercial partner, when the product is in the distributer’s warehouse until the product is sold to an end customer. For each unit sold to the end customers, this liability is reduced with a corresponding amount recognized in revenue.
F-11
| 13. | Cash and cash equivalents |
| As of June 30, 2024 (unaudited) | As of December 31, 2023 | |||||||
| (in €) | ||||||||
| Short-term deposits | ||||||||
| Deposits held in U.S. dollars | 13,226,925 | 4,120,951 | ||||||
| Deposits held in euros | 3,020,000 | 1,020,000 | ||||||
| Total | 16,246,925 | 5,140,951 | ||||||
| Cash at banks | ||||||||
| Cash held in U.S. dollars | 1,899,257 | 5,041,802 | ||||||
| Cash held in euros | 1,005,938 | 2,585,190 | ||||||
| Total | 2,905,195 | 7,626,991 | ||||||
| Total cash and cash equivalents | 19,152,121 | 12,767,942 | ||||||
As of June 30, 2024, cash and cash equivalents increased by €6.4 million to €19.2 million compared to €12.8 million as of December 31, 2023. The increase is mainly due to the maturity of financial assets, and their subsequent reinvestment into interest bearing bank deposits, which are classified as cash and cash equivalents.
| 14. | Equity |
On June 30, 2023, the Company filed a form F-3 with the United States Securities and Exchange Commission (the “SEC”) with respect to the offer and sale of up to $250.0 million of securities of the Company (the “Shelf Registration Statement”).
On June 28, 2024, the Company entered into a Sales Agreement with Leerink Partners LLC, or Leerink, to sell ordinary shares of the Company from time to time through an at-the-market, or ATM, equity offering program of up to $75.0 million under which Leerink will act as sales agent. As of the date of this report, the Company had not issued any ordinary shares under such at-the-market program.
| 15. | Share-based payments |
| a) | Equity settled share-based payment arrangements |
InflaRx GmbH granted options under the 2012 Stock Option Plan. Those InflaRx GmbH options were converted into options for ordinary shares of InflaRx N.V. at the time of its IPO in November 2017:
| Number of share options | 2024 | 2023 | ||||||
| Outstanding as of January 1, | 148,433 | 148,433 | ||||||
| Exercised during the six months ended June 30 | — | — | ||||||
| Outstanding as of June 30, | 148,433 | 148,433 | ||||||
| thereof vested / exercisable | 148,433 | 148,433 | ||||||
Under the terms and conditions of the share option plan 2016, InflaRx GmbH granted rights to subscribe for InflaRx GmbH’s ordinary shares to directors, senior management, and key employees. Those InflaRx GmbH options were converted into options for ordinary shares of InflaRx N.V. at the time of its IPO in November 2017:
| Number of share options | 2024 | 2023 | ||||||
| Outstanding as of January 1, | 888,632 | 888,632 | ||||||
| Exercised during the six months ended June 30 | — | — | ||||||
| Outstanding as of June 30, | 888,632 | 888,632 | ||||||
| thereof vested / exercisable | 888,632 | 888,632 | ||||||
F-12
InflaRx also granted share options under the 2017 LTIP subsequently to its IPO in November 2017. The total number of share options granted during the six months ended June 30, 2024 under the 2017 LTIP was as follows:
| Number of share options | 2024 | 2023 | ||||||
| Outstanding as of January 1, | 6,584,946 | 4,985,523 | ||||||
| Granted during the six months ended June 30, | 2,275,000 | 1,567,250 | ||||||
| Exercised during the six months ended June 30, | - | (105,327 | ) | |||||
| Forfeited during the six months ended June 30, | (7,000 | ) | — | |||||
| Outstanding as of June 30, | 8,852,946 | 6,447,446 | ||||||
| thereof vested / exercisable | 6,588,696 | 4,788,759 | ||||||
The number of share options granted during the six months ended June 30, 2024 under the 2017 LTIP was as follows:
| Share options granted 2024 | Number | Fair value per option | FX rate as of grant date | Fair value per option | Share price at grant date / Exercise price | Expected volatility | Expected life (midpoint based) | Risk-free rate (interpolated, U.S. sovereign strips curve) | ||||||||||||||||||||||||
| January 05 | 2,245,000 | $ | 1.65 | 0.916 | € | 1.51 | $ | 1.79 | 1.47 | 5.30-5.50 | 4.023%-4.025 | % | ||||||||||||||||||||
| February 21 | 30,000 | $ | 1.40 | 0.925 | € | 1.30 | $ | 1.51 | 1.47 | 5.50 | 4.308 | % | ||||||||||||||||||||
| 2,275,000 | ||||||||||||||||||||||||||||||||
Of the 2,275,000 options granted in the six months ended June 30, 2024 (ended June 30, 2023: 1,567,250), 1,615,000 options (June 30, 2023: 1,246,000) were granted to members of the executive management or Board of Directors.
Expected dividends are nil for all share options listed above.
| b) | Share-based payment expense recognized |
For the six months ended June 30, 2024, the Company has recognized €3.1 million (2023: €2.2 million) of share-based payment expense in the statements of operations and comprehensive loss.
None of the share-based payment awards were dilutive in determining earnings per share due to the Group’s loss position.
| c) | Share options exercised |
During the six months ended June 30, 2024, no shares (2023: 105,327) were issued upon the exercise of share options, resulting in proceeds to the Company in the amount of €0 (ended June 30, 2023: €98). All share options exercised in 2023 were granted under the 2017 LTIP.
| 16. | Protective foundation |
According to the articles of association of the Company, up to 147,200,000 ordinary shares and up to 147,200,000 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 independent 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 the Company to provide, or cause the Company’s subsidiaries to provide, sufficient funding to the protective foundation to enable it to satisfy its payment obligation under the call option agreement.
These preferred shares will have both a liquidation and dividend preference over the Company’s ordinary shares and will accrue cash dividends at a pre-determined rate. The protective foundation would be expected to require the Company to cancel its preferred shares once the perceived threat to the Company and its stakeholders has been removed or sufficiently mitigated or neutralized. The Company believes that the call option does not represent a significant fair value based on a level 3 valuation since the preferred shares are restricted in use and can be cancelled by the Company.
During the six months ended June 30, 2024, the Company expensed €25 thousand (2023: €45 thousand) of ongoing costs to reimburse expenses incurred by the protective foundation.
F-13