Document and Entity Information
Document and Entity Information - shares | 12 Months Ended | |
Dec. 31, 2018 | Mar. 20, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | InflaRx N.V. | |
Entity Central Index Key | 0001708688 | |
Document Type | 20-F/A | |
Document Period End Date | Dec. 31, 2018 | |
Amendment Flag | true | |
Amendment Description | This Amendment No. 1 on Form 20-F/A (the “Amendment”) amends the Annual Report on Form 20-F for the year ended December 31, 2018 of InflaRx N.V. (the “Company,” “we,” “our” or “us”), as originally filed with the U.S. Securities and Exchange Commission on March 28, 2019 (the “Original Annual Report”). We are filing this Amendment solely to (i) change the date of the Report of Independent Registered Accounting Firm (the “Accountants’ Report”) on page F-2 hereof to March 26, 2018 (from March 28, 2019); (ii) revise the penultimate sentence of Item 1 in Note 4(g) to our audited annual consolidated financial statements, appearing on page F-20, to read as follows: “The financial statements were authorized for issue by management on March 26, 2019.”; and (iii) in the Consolidated Statements of Cash Flows on page F-6, amend (x) the line item for “other non-cash adjustments” to read “421” instead of “(83)” and (y) the line item for “Interest received” to read “1,679” instead of “504.” This Amendment does not reflect events occurring after the filing of the Original Annual Report and does not modify, update or restate the disclosure therein in any way other than to reflect the amendments described above. No other changes have been made in the Original Annual Report. The filing of this Amendment should not be understood to mean that any statements contained herein are true or complete as of any date subsequent to the date of filing of the Original Annual Report. The exhibits to this Amendment include updated certificates in Exhibits 12.1, 12.2, 13.1 and 13.2, in each case to reflect the date of this Amendment. | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | Yes | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 25,964,379 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2018 |
Consolidated statements of comp
Consolidated statements of comprehensive loss € in Thousands | 12 Months Ended | |||||
Dec. 31, 2018EUR (€)shares | Dec. 31, 2018$ / shares | Dec. 31, 2017EUR (€)shares | Dec. 31, 2017$ / shares | Dec. 31, 2016EUR (€)shares | Dec. 31, 2016$ / shares | |
Profit or loss [abstract] | ||||||
Research and development expenses | € (25,028) | € (14,415) | € (5,278) | |||
General and administrative expenses | (12,787) | (5,138) | (1,844) | |||
Loss before interest and income taxes | (37,815) | (19,553) | (7,122) | |||
Other income | 304 | 116 | 238 | |||
Other expenses | (5) | (8) | (7) | |||
Operating Result | (37,516) | (19,445) | (6,891) | |||
Finance income | 10,433 | 130 | 1 | |||
Finance costs | (2,731) | (4,923) | (2,049) | |||
Net financial Result | 7,702 | (4,793) | (2,048) | |||
Loss for the period | € (29,815) | € (24,238) | € (8,939) | |||
Share information | ||||||
Weighted average number of shares outstanding | shares | 25,095 | 9,411 | 2,363 | |||
Loss per share in euro, basic | $ / shares | $ (1.19) | $ (2.60) | $ (3.80) | |||
Loss per share in euro, diluted | $ / shares | $ (1.19) | $ (2.60) | $ (3.80) | |||
Loss for the period | € (29,815) | € (24,238) | € (8,939) | |||
Other comprehensive income that may be reclassified to profit or loss in subsequent periods: | ||||||
Exchange differences on translation of foreign operations | 51 | 0 | 1 | |||
Total comprehensive loss | € (29,764) | € (24,238) | € (8,939) |
Consolidated statements of fina
Consolidated statements of financial position - EUR (€) € in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Non-current assets | ||
Property, plant and equipment | € 625 | € 173 |
Intangible assets | 223 | 41 |
Financial assets | 207 | 20 |
Total non-current assets | 1,055 | 234 |
Current assets | ||
Current other assets | 1,589 | 696 |
Current financial assets | 101,184 | 0 |
Cash and cash equivalents | 55,386 | 123,282 |
Total current assets | 158,159 | 123,979 |
Total assets | 159,214 | 124,213 |
Equity | ||
Issued capital | 3,116 | 2,858 |
Share premium | 211,022 | 161,639 |
Other capital reserves | 18,310 | 6,225 |
Accumulated deficit | (81,107) | (51,293) |
Other components of equity | 50 | 0 |
Total equity | 151,391 | 119,429 |
Non-current liabilities | ||
Provisions | 57 | 2 |
Government grants | 11 | 15 |
Total non-current liabilities | 68 | 17 |
Current liabilities | ||
Employee Benefits | 788 | 295 |
Social securities and current other tax liabilities | 310 | 2 |
Trade and other payables | 6,657 | 4,469 |
Total current liabilities | 7,756 | 4,766 |
Total Liabilities | 7,824 | 4,783 |
Total equity and liabilities | € 159,214 | € 124,213 |
Consolidated statements of chan
Consolidated statements of changes in equity - EUR (€) € in Thousands | Issued Capital | Share Premium | Other Capital Reserves | Accumulated deficit | Other Components of Equity | Total |
Beginning balance at Dec. 31, 2015 | € 31 | € 0 | € 457 | € (18,116) | € 9 | € (17,619) |
Loss for the period | (8,939) | (8,939) | ||||
Total comprehensive loss | (8,939) | (8,939) | ||||
Equity-settled share-based payment | 868 | 868 | ||||
Total Contributions | 868 | 868 | ||||
Total transactions with owners of the Company | 868 | 868 | ||||
Transaction costs | 0 | |||||
Ending balance at Dec. 31, 2016 | 31 | 0 | 1,325 | (27,055) | 9 | (25,690) |
Loss for the period | (24,238) | (24,238) | ||||
Exchange differences on translation of foreign operations | 2 | |||||
Total comprehensive loss | (24,238) | (24,238) | ||||
Equity-settled share-based payment | 4,550 | 4,550 | ||||
Total Contributions | 848 | 80,940 | 4,550 | 86,338 | ||
Total transactions with owners of the Company | 2,826 | 161,638 | 4,900 | (9) | 169,355 | |
Issue of share capital | 848 | 90,055 | 90,904 | |||
Transaction costs | 0 | (9,115) | (9,115) | |||
Total issue of share capital | 848 | 80,941 | 81,789 | |||
Liquidation of a subsidiary | (9) | |||||
Reorganization | 1,979 | 80,698 | 83,026 | |||
Total changes in ownership interests | 1,978 | 80,698 | 350 | (9) | 83,017 | |
Ending balance at Dec. 31, 2017 | 2,857 | 161,639 | 6,225 | (51,293) | 0 | 119,429 |
Loss for the period | (29,815) | (29,815) | ||||
Exchange differences on translation of foreign operations | 51 | 51 | ||||
Total comprehensive loss | (29,815) | 51 | (29,764) | |||
Equity-settled share-based payment | 12,085 | 12,085 | ||||
Share options exercised | 36 | 416 | 452 | |||
Total Contributions | 258 | 49,384 | 12,085 | 61,727 | ||
Total transactions with owners of the Company | 258 | 49,384 | 12,085 | 61,727 | ||
Issue of share capital | 222 | 52,769 | (53,443) | |||
Transaction costs | (3,801) | (3,801) | ||||
Ending balance at Dec. 31, 2018 | € 3,116 | € 211,022 | € 18,310 | € (81,107) | € 50 | € 151,391 |
Consolidated statements of cash
Consolidated statements of cash flows - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flow from Operations | |||
Loss before income taxes | € (29,815) | € (24,238) | € (8,939) |
Reconciliation from result before taxes to net cash flows | |||
Depreciation/amortization of intangible assets, laboratory and office equipment | 174 | 71 | 33 |
Net financial result | (7,702) | 4,793 | 2,048 |
Share based payment expense | 12,085 | 4,550 | 868 |
Effects of exchange rate changes on financial assets | (2,387) | (61) | 0 |
Other non-cash adjustments | 421 | 24 | (2) |
Working capital adjustments | |||
Current other assets | (894) | (523) | (74) |
Current financial assets | (316) | 154 | (22) |
Provisions | 55 | 0 | 0 |
Government grants | (4) | (4) | (4) |
Employee benefits | 493 | 129 | 113 |
Social securities and current other tax liabilities | 310 | (30) | 18 |
Change in Trade payables and other liabilities | 2,188 | 2,917 | 1,181 |
Interest received | 1,679 | 66 | 0 |
Interest paid | 0 | 0 | (212) |
Net cash used in operating activities | (23,712) | (12,152) | (4,992) |
Cash flow from investing activities | |||
Cash outflow from the purchase of intangible assets, laboratory and office equipment | (806) | (149) | (53) |
Cash outflow for the investment in non-current financial assets | (210) | (19) | 0 |
Proceeds from the disposal of non-current other financial assets | 22 | 0 | 0 |
Proceeds from the disposal of current financial assets | 7,990 | 0 | 0 |
Purchase of current & non-current financial assets | (106,445) | 0 | 0 |
Net cash flows used in investing activities | (99,451) | (167) | (53) |
Cash flow from financing activities | |||
Proceeds from issuance of share capital | 53,443 | 90,904 | 0 |
Transaction cost from issuance of stock | (3,801) | (9,115) | 0 |
Proceeds from issuance of preferred shares | 0 | 27,012 | 30,860 |
Net cash flows from/(used in) financing activities | 49,642 | 108,801 | 30,860 |
Effect of exchange rate changes | 5,626 | (2,317) | 1 |
Change in cash and cash equivalents | (67,896) | 94,165 | 25,815 |
Cash and cash equivalents at beginning of period | 123,282 | 29,117 | 3,302 |
Cash and cash equivalents at end of period | € 55,386 | € 123,282 | € 29,117 |
Information on how numbers were
Information on how numbers were calculated | 12 Months Ended |
Dec. 31, 2018 | |
Information On How Numbers Were Calculated | |
Information on how numbers were calculated | (a) Material profit or loss items 1. Research and development expenses Research and development increased compared to the prior year due to the Company’s expanded activities in the area of clinical studies and manufacturing. The items below drive research and development expenses. 2016 2017 2018 (in thousands of €) Research and development expenses Third-party services 3,757 8,856 15,909 manufacturing —* 5,559 4,829 clinical, pre-clinical —* 3,297 11,080 Personnel expenses 1,293 4,681 8,037 stock-based compensation expense 302 3,071 5,256 Legal and consulting fees 95 643 421 Other expenses 132 235 661 Total 5,278 14,415 25,028 * Detailed cost accounting was introduced in 2017. 2. General and administrative expenses General and administrative expenses include the items below. Compared to the prior year the increase is mainly caused by higher personnel expenses, as well as expansion of the Company’s business activities and the expense of operating as a public company in the United States. 2016 2017 2018 (in thousands of €) General and administrative expenses Personnel expenses 1,134 2,948 9,147 stock-based compensation expense 566 1,479 6,828 Legal and consulting fees 394 1,478 2,020 Other expenses 316 712 1,619 Total 1,844 5,138 12,787 3. Employee benefits The following table shows the items of employee benefits: 2016 2017 2018 (in thousands of €) Employee benefits Wages and salaries 1,467 2,897 4,501 Social Security contributions* 126 182 350 Stock-based compensation expense 868 4,550 12,085 Other — — 248 Total 2,462 7,629 17,184 * Employer's share of social security contributions The number of employees rose from 20.0 FTE (full time equivalents) at the end of 2017 to 36.8 FTE at the end of 2018 (numbers as of balance sheet date, not an average number). 4. Net Financial Result The net financial result is comprised of the following items: 2016 2017 2018 (in thousands of €) Finance income Foreign exchange income — — 8,250 Interest income — 130 2,183 Other 1 — - Total 1 130 10,433 Finance costs Foreign exchange expense 3 2,358 2,624 Other 2,046 2,565 107 Total 2,049 4,923 2,731 Net financial result (2,048) (4,793) 7,702 Foreign exchange income and expense is mainly derived from the translation of the Company’s U.S. dollar cash, cash equivalents and marketable securities. These funds are translated at the exchange rates prevailing on the reporting date. Any resulting translation differences are recognized in profit and loss. These gains (€ 8,250 thousand in 2018, € nil for 2017 and 2016) and losses (€ 2,624 thousand in 2018, respectively € 2,358 thousand for 2017 and €3 thousand for 2016) are caused by the exchange rates on the reporting dates, and may not ultimately be realized. Any such gains or losses ultimately will be realized when U.S. dollar funds are used for R&D expenses or other activities. On the reporting date, assets and liabilities are translated at the closing rate. Any foreign exchange rate differences derived from these translations are recognized in the consolidated statement of profit or loss as part of finance income. Other finance cost in 2017 and 2016 was mainly driven by interest expense for preferred shares (€2,229 thousand, €1,836 thousand respectively). (b) Income tax expense InflaRx N.V. and its German subsidiary InflaRx GmbH are subject to corporate taxes, a solidarity surcharge and trade taxes. In prior years as well as in 2017 and 2018 the Group did not incur any income tax. Taxes paid were reimbursed after annual tax declaration. In Germany, the Group has the following tax carry forwards: December 31, 2017 December 31, 2018 (in thousands of €) InflaRx N.V. 7,923 33,571 InflaRx GmbH 34,787 34,787 Since January 1, 2018 InflaRx GmbH has distributed its losses to the parent Company InflaRx N.V. under a profit and loss transfer agreement. German tax loss carried forwards are available indefinitely for offsetting against future taxable profits. Tax losses of InflaRx GmbH are frozen from 2018 onwards due to the tax Group with InflaRx N.V. Future losses of InflaRx GmbH will be transferred to InflaRx N.V. Losses at the level of InflaRx N.V. can be offset in future years considering rules extinguishing tax losses and minimum taxation rules. The Group recognizes deferred tax assets arising from tax loss carried forwards only to the extent that the Group has sufficient taxable temporary differences or there is convincing evidence that sufficient taxable profit will be available against which the unused tax losses can be utilized. As of December 31, 2018 and 2017, management’s judgment is that such convincing evidence is currently not sufficiently available and a deferred tax asset is therefore not recognized. The table below shows a reconciliation between current income taxes recognized in profit or loss and the product of loss before tax multiplied by the Company's applicable tax rate. The applicable tax rate is composed of 15% corporate income tax and 0.8% solidarity surcharge plus 13.4% trade tax (trade tax is the sum of the Company`s two German locations, 8.2 percentage points must be paid in Jena and 5.2 percentage points in Planegg respectively; the split between Jena and Planegg is based on salary costs, therefore the tax rate decreased as the Company hired new personnel in Planegg): 2016 2017 2018 (in thousands of €) InflaRx Loss before taxes (8,939) (24,238) (29,815) Tax rate 30.5% 31.2% 29.2% Tax benefits at tax rate 2,729 7,560 8,715 Tax losses for which no deferred tax asset was recognized (2,729) (7,560) (8,715) Income taxes — — — (c) Other non-financial assets December 31, 2017 December 31, 2018 (in thousands of €) Current other assets Prepaid expense 504 1,047 Other 192 542 Total 696 1,589 Prepaid expense mainly consists of accrued insurance expense for D&O and insurance expenses together with the placement of shares in May 2018. (d) 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 December 31, 2018 and December 31, 2017: December 31, 2017 December 31, 2018 (in thousands of €) Financial assets at amortized cost Non-current financial assets 20 207 Current financial assets 0 101,184 Financial liabilities at amortized cost Trade and other payables (4,469) (6,657) The fair value of current and non-current financial assets (primarily quoted debt securities with, credit ratings ranging from AA- to AAA) amounted to €100,723 thousand (level 1). 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 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 acquisition of these debt securities, their credit ratings have remained stable. (e) Equity 1. Issue of share capital On May 8, 2018, a public offering of common shares was completed pursuant to which the Company 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. 2. Shares Outstanding As of December 31, 2018, following the public offering in May 2018 and the exercise of stock options in the third and fourth quarters, the issued capital of the Company is divided into 25,964,379 common shares. Refer to ‘Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2018, 2017 and 2016’. (f) Cash and cash equivalents information December 31, 2017 December 31, 2018 (in thousands of €) Short-term deposits Deposits held in U.S. dollars 81,229 32,919 Deposits held in euro 38,876 — Total 120,105 32,919 Cash at banks Money held in euro 2,842 21,720 Money held in U.S. dollars 335 748 Total 3,177 22,468 Total cash and cash equivalents 123,282 55,386 |
Risk
Risk | 12 Months Ended |
Dec. 31, 2018 | |
Risk | |
Risk | (a) Critical estimates and judgements The preparation of the consolidated 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 involve the determination of the grant date fair value of share-based payment awards see section ‘4. Other information — (d) Share-based payments’ as well as the measurement of R&D expenses that have to be accrued at period end for outstanding invoices (e.g. for pass-through costs charged by the Company’s CROs). (b) Financial risk management 1. Financial risk management objectives and policies The Group’s risk management is predominantly controlled by central treasury activities under policies approved by the Board of Directors. Those treasury activities identify, evaluate and hedge financial risks in close co-operation with the Group’s operating needs. The board provides policies for overall risk management, covering specific areas, such as foreign exchange risk and credit risk. The Company does not intend to use derivative financial instruments because the Group’s future risk exposures cannot be reliably forecasted (volume of business activity, liquidity needs, foreign exchange exposure). Hedge accounting is not applied as most of the business activity is intended to be executed in U.S. dollars and paid with the U.S. dollars funds raised in public offerings. The foreign exchange exposure from costs incurred in currencies other than euro is deemed immaterial and not worth hedging. The Group’s principal financial assets comprise quoted debt securities with credit ratings range from AA- to AAA. Besides these financial assets, the Group has significant cash and cash equivalents. The Group’s principal financial liabilities comprise trade payables. The main purpose of these financial assets, cash/cash equivalents and liabilities is to finance the Group’s development activities. The Group is exposed to market risk, credit risk and liquidity risk. The Board of Directors reviews and adopts policies for managing each of these risks, which are summarized below. The Group’s senior management oversees the management of these risks. Exposure Measurement Risk Management Market risk Future development costs; Recognized financial assets and liabilities not denominated in euro Forecasted cash flows Sensitivity analysis Achievement of a natural hedge in the future Credit risk Cash and cash equivalents, debt investments Credit rating Diversification of bank deposits, Investment guidelines for debt investments Liquidity R&D and G&A cost and trade payables Rolling cash flow forecast Availability of funds through financing rounds or public offerings 2. Market risk Market risk is the risk that changes in market prices (e.g. due to foreign exchange rates) will affect the Group’s income, expenses or the value of its holdings of financial instruments. The objective of market risk management is to identify, manage and control market risk exposures within acceptable parameters. The Group is exposed to transactional foreign currency risk to the extent that there is a mismatch between the currencies in which costs and purchases are denominated and the respective functional currencies of Group companies. The functional currencies of Group companies are primarily the euro and U.S. dollars. The currencies in which these transactions and financial assets are primarily denominated are euro and U.S. dollars. Currently the Group does not hedge U.S. dollars but intends to achieve a natural hedge by contracting suppliers in U.S. dollars in the future. In 2018 the Group recognized significant foreign exchange gains and losses as the natural hedge is not yet achieved and the functional currency for the major part of entities is euro. The Group is primarily exposed to changes in U.S. dollars/euro exchange rates. The sensitivity of profit or loss to changes in the exchange rates arises mainly from U.S. dollar denominated financial instruments. In 2018, if the euro had weakened/strengthened by 10% against U.S. dollars with all other variables held constant, the Group`s loss would have been €14.3 million higher/€17.4 million lower, mainly as a result of foreign exchange on translation of U.S. dollars-denominated assets. December 31, 2018 Non-current financial assets 207 Current financial assets 101,184 Cash and cash equivalents 55,386 Total assets exposed to the risk 156,777 Conversion rate EUR/USD at reporting date 1/1.1450 Sensitivity analysis: Conversion rate Profit/(loss) in P&L carrying amount Euro weakens by 1% against U.S. dollars 1.1565 (1,552) 155,225 Euro strengths by 1% against U.S. dollars 1.1336 1,584 158,361 Euro weakens by 5% against U.S. dollars 1.2023 (7,466) 149,311 Euro strengths by 5% against U.S. dollars 1.0878 8,251 165,028 Euro weakens by 10% against U.S. dollars 1.2595 (14,252) 142,525 Euro strengths by 10% against U.S. dollars 1.0305 17,420 174,197 3. Credit risk The maximum exposure to counterparty credit risk is €156.8 million in 2018 (2017: €123.3 million). This amount equals the carrying amount of cash and cash equivalents (2018: €55.4 million; 2017: €123.3 million) plus. financial assets (2018: €101.4 million; 2017: €0 million). The cash and cash equivalents are held with banks, what are rated BBB to A based on Standard & Poor’s and Moody’s. The issuer of the money-market funds and other securities are graded in the top investment category (AA- to AAA) by credit rating agencies as S&P Global. 4. Liquidity risk Prudent liquidity risk management involves maintaining sufficient cash and marketable securities and the availability of funding to meet obligations when due. At the end of the reporting period the Group held the following deposits that are expected to readily generate cash inflows for managing liquidity risk. December 31, 2017 December 31, 2018 (in thousands of €) Cash and cash equivalents Short-term deposits 120,105 32,919 Cash at banks 3,177 22,468 Total 123,282 55,386 Marketable Securities Securities and other Investments (current) — 100,868 Total — 100,868 Other financial assets Other (non-current portion) 20 207 Other (current) — 316 Total 20 523 Total funds available 123,302 156,777 The Group continually monitors its risk of a shortage of funds using short and mid-term liquidity planning. This takes into account of the expected cash flows from all activities. The management team performs regular reviews of the budget. In November 2017 and May 2018, InflaRx raised significant funding that it estimates will enable the Group to fund operating expenses and capital expenditure requirements for at least the 12 months from December 31, 2018. The Group expects to require additional funding to continue to advance the development of product candidates. In the event regulatory approval is received and the Company implements a strategy to commercialize the products itself the Group would require additional capital. (c) Capital management The Group’s policy for capital management is to ensure that it maintains its liquidity in order to finance its operating activities, future business development and meet its liabilities when due. The Group manages its capital structure primarily through equity. The Group does not have any financial debt, besides trade and other payables. Under the 2017 long-term incentive plan the board and key employees may participate in the Group’s share price development through long-term remuneration consisting of a stock option plan set up in 2017, please refer to ‘4. Other information - (d) Share-based payments’. No changes were made in the objectives, policies or processes for managing capital during the year. |
Unrecognized items
Unrecognized items | 12 Months Ended |
Dec. 31, 2018 | |
Unrecognized Items | |
Unrecognized items | (a) Operating lease obligations The Group leases various properties, laboratory and office equipment and cars. Rental contracts are typically made for fixed periods of one to three years but may have renewal options. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes. December 31, 2017 December 31, 2018 (in thousands of €) Commitments for minimum lease payments in relation to non-cancellable operating leases: Within one year 244 283 After one year but not more than five years 473 292 More than five years — — Total 717 575 Rental expense relating to operating leases Minimum lease payments 162 213 Contingent rentals — — Sub-lease income — — Total 162 213 Operating lease obligations consist of payments pursuant to non-cancellable operating lease agreements mainly relating to the Company`s leases of office space. The lease term of the Company`s premises expires in the next three years: Jena, Germany in December 2019, Planegg, Germany in July 31, 2021 respectively June 30, 2022 and Ann Arbor, United States in April 14, 2021. (b) Other Commitments December 31, 2017 December 31, 2018 (in thousands of €) Commitments for minimum payments in relation to non-cancellable operating contracts or services: Within one year 4,437 19,624 After one year but not more than five years 88 9,684 More than five years 7 — Total 4,532 29,307 The Group enters into contracts in the normal course of business with Contract Research Organizations (‘CROs’) and clinical sites for the conduct of clinical trials, professional consultants for expert advice and other vendors for clinical supply manufacturing or other services. Most of these contracts are not included in the table above as they provide for termination on notice, and therefore are cancelable contracts and do not include any minimum purchase commitments. During 2018, the Group did not enter into contracts to purchase property, plant and equipment or patents and trademarks (respectively nil in 2017). |
Other information
Other information | 12 Months Ended |
Dec. 31, 2018 | |
Other Information | |
Other information | (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 subsidiaries InflaRx GmbH, and, since January 5th, 2018, InflaRx Pharmaceutical Inc., Ann Arbor, Michigan/USA (together, the ‘Group’). (b) Material subsidiaries The Group’s principal subsidiaries at December 31, 2018 are set out below. Unless otherwise stated, they have share capital consisting solely of common shares that are held directly by the Group, and the proportion of ownership interests held equals the voting rights held by the Group. The country of incorporation or registration is also their principal place of business. Name Place of business/ country of incorporation Functional currency Ownership interest held by the Group 2017 2018 Principal activities InflaRx GmbH Germany EUR 100% 100% Principal operating subsidiary, biopharmaceutical company InflaRx Pharmaceutical Inc. U.S. USD — 100% Subsidiary for basic research 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. InflaRx Pharmaceutical Inc., a Delaware corporation, was founded on January 5, 2018 by InflaRx N.V. (c) 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), since January 1, 2019 · Othmar Zenker, Chief Medical Officer (CMO) 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 · Anthony Gibney, since February 6, 2018 Member of the Audit Committee · Katrin Uschmann, Member of the Audit Committee until February 6, 2018 · Lina Ma · Mark Kübler, Member of the Audit Committee until September 21, 2018 · Richard Brudnick, Non-Voting Observer Director since February 14, 2019 , subject to the approval at the Annual General Meeting of Shareholders in May 2019. The compensation of the Group’s executive management comprises the following for the twelve months ending December 31: 2016 2017 2018 (in thousands of €) Executive Management Short-term employee benefits 604 1,987 2,524 Share-based payments 660 3,187 9,801 Total 1,264 5,174 12,325 Non-executive Board of Directors Short-term employee benefits — 81 238 Share-based payments 208 43 1,086 Total 208 124 1,324 Total Compensation 1,472 5,298 13,649 Remuneration of InflaRx’s executive management comprises fixed and variable components and share-based payment awards. In addition, the executive management receive supplementary benefits and allowances. 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 to the fullest extent permitted by law. See “Item 6. Directors, Senior Management and Employees—B. Compensation—Insurance and indemnification” for a description of these indemnification agreements. (d) Share-based payments 1. Equity settled share-based payment arrangements In the course of its historical financing rounds InflaRx GmbH established equity-settled share-based payment programs. Under these programs, the Company granted to its managing directors and senior executives options to acquire common shares. In total options covering 6,088 shares were granted. All of the options have vested. Those InflaRx GmbH options were converted into options covering 511,392 common shares of InflaRx N.V. at the initial public offering in November 2017. The exercise prices for each outstanding award is 0.01 € per share or less. Under the terms and conditions of the stock option plan 2016 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 in November 2017). Any additional awards available under the 2016 plan lapsed upon the closing of the Series D financing in October 2017. In 2016, InflaRx also established a share-based payment plan for its non-executive board members and granted options covering 484 shares. Grants under this plan were not subject to service or performance conditions. In conjunction with the closing of its initial public offering, InflaRx N.V. established a new plan (‘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: 2018 Number of stock options: Outstanding at January 1, 2018 1,869,192 Granted in 2018 208,073 Forfeited in 2018 (26,256) Outstanding at December 31, 2018 2,051,009 thereof vested 626,933 thereof exercised - In the fourth quarter, of 2018 75,000 stock options were awarded subject to a specified condition, which was satisfied in the first quarter of 2019, therefore, the expense for these stock options will occur in 2019. 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 2018 302,279 shares were issued following the exercise of stock options, resulting in proceeds to the Company of €452.0 thousand. All stock options exercised were granted under the stock option plan 2016 and before. 3. Measurement of fair values of stock options granted The fair value of options granted in 2018 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. Other significant inputs into the model are as follows (weighted average): Q1-2018 Q2-2018 Q3-2018 Q3-2018 Q4-2018 Parameters Fair value at grant date Per option (USD) 13.79 22.37 19.80 20.17 13.39 FX rate as of grant date 0.82 0.86 0.86 0.85 0.88 Per option (EUR) 11.24 19.23 16.96 17.15 11.75 Share price at grant date (USD) 22.75 37.85 32.40 33.06 26.02 Exercise price (USD) 22.75 37.85 32.40 33.06 26.02 Expected volatility 0.73 0.73 0.73 0.73 0.65 Expected life (midpoint based) 4.9 4.6 4.9 4.9 4 Expected dividends — — — — — Risk-free rate (interpolated, U.S. sovereign strips curve) 2.6% 2.7% 2.8% 3.0% 2.9% 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. 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: · the more options granted within a tranche, the higher expense of a tranche, and · 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 long-term incentive plan were € nil in 2016, €0.6 million in 2017, €12.1 million for 2018 and are anticipated to be €4.9 million for 2019 and €1.5 million for 2020. In the twelve month periods ending December 31, 2018, 2017 and 2016, compensation expense was recognized from the following plans: · in 2018, €12.1 million resulting solely from the 2017 long-term incentive plan, · in 2017, €0.6 million from the 2017 long-term incentive plan and another €4.0 million resulting from 2016 option plan and the plans before, · In 2016, €0.9 million from 2016 option plan and the plans before. None of the share-based payments awards were dilutive in determining earnings per share due to the Group’s loss position. (e) Loss per share Loss per common share is calculated by dividing the loss of the period by the weighted average number of common shares outstanding during the period. The weighted number of common shares outstanding for the financial year 2016 is 2,362,500, for 2017 is 9,410,524 common shares and for the financial year 2018 25,095,027 common shares. (f) 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. The Company`s general meeting of shareholders approved the right of an independent foundation under Dutch law, or protective foundation, to acquire up to 100% of the Company`s 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 the Company`s subsidiaries to provide, sufficient funding to the protective foundation to enable it to satisfy its payment obligation under the call option agreement. These preferred shares will have both a liquidation and dividend preference over the Company`s common shares and will accrue cash dividends at a pre-determined rate. The protective foundation would be expected to re-quire us to cancel its preferred shares once the perceived threat to the Company and its stake-holders has been removed or sufficiently mitigated or neutralized. We are of the opinion that the call option does not represent a significant fair value based on a level 3 valuation, due to the fact that the preference shares are restricted in use and can be cancelled by us as stated above. As of December 31, 2018, the Company expensed €83 thousand of ongoing costs to reimburse expenses incurred by the protective foundation. (g) Summary of significant accounting policies This section describes significant accounting policies adopted in the preparation of these consolidated financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the Group consisting of InflaRx N.V. and its subsidiaries. 1. Basis of preparation The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretations Committee (IFRS IC) applicable to companies reporting under IFRS. The financial statements comply with IFRS as issued by the International Accounting Standards Board (IASB). The financial statements have been prepared on a historical cost basis except for share-based payments which are measured at fair value. These financial statements are consolidated financial statements for the Group consisting of InflaRx N.V. and its subsidiaries. The financial statements are presented in euro (€). Euro is also the functional currency of InflaRx N.V. All financial information presented in Euro has been rounded to the nearest thousand. 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. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is obtained by the Group. They are deconsolidated from the date control ceases. The acquisition method of accounting is used to account for business combinations by the Group. Intercompany transactions, balances and unrealized gains on transactions between Group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the accounting policies adopted by the Group. The financial statements were authorized for issue by management on March 26, 2019. All press releases, financial reports and other information are available on the Investor on the Company`s website: www.inflarx.com 2. New and amended standards adopted by the Group The Group has applied the following standards and amendments for the first time for their annual reporting period commencing January 1, 2018: · IFRS 9 Financial Instruments · IFRS 15 Revenue from Contracts with Customers · Amendments to IFRS 2 - Classification and Measurement of Share-based Payments · Annual Improvements 2014-2016 cycle · Transfers to Investment Property – Amendments to IAS 40 · Interpretation 22 Foreign Currency Transactions and Advance Consideration 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, which require restatement of previous financial statements. 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 requires new disclosures, in particular about credit risk and expected credit losses. 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 impact of IFRS 9 in the absence of material financial instruments was nil. A restatement of the consolidated statement of financial position as at January 1, 2018 was not necessary. Most of the other amendments listed above did not have any impact on the amounts recognized in prior periods and are not expected to significantly affect the current or future periods. 3. New standards and interpretations not yet adopted Certain new accounting standards and interpretations have been published that are not mandatory for December 31, 2018 reporting periods and have not been early adopted by the Group. The Group’s assessment of the impact of these new standards and interpretations is set out below. · IFRIC 23 Uncertainty over Tax Treatments. · Prepayment Features with Negative Compensation (Amendments to IFRS 9). · Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28). · Plan Amendment, Curtailment or Settlement (Amendments to IAS 19). · Annual Improvements to IFRS Standards 2015–2017 Cycle – various standards. · Amendments to References to Conceptual Framework in IFRS Standards. · IFRS 17 Insurance Contracts. · IFRS 16 Leases. IFRS 16 was issued in January 2016. It will result in almost all leases being recognized on the balance sheet by lessees, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognized. The only exceptions are short-term and low-value leases. The Group has analyzed all of the Group’s leasing arrangements over the last year in light of the new lease accounting rules in IFRS 16. As at the reporting date, the Group has non-cancellable operating lease commitments of €575 thousand (see ‘3. Unrecognized items - (a) Operating lease obligations’). Of these commitments, approximately €10 thousand relate to short-term leases and €6 thousand to low value leases which will both be recognized on a straight-line basis as expense in profit or loss. For the remaining lease commitments, the Group expects to recognize right-of-use assets of approximately €791 thousand on January 1, 2019, lease liabilities of €791 thousand (after adjustments for prepayments and accrued lease payments recognized as at December 31, 2018). Overall net assets will stay approximately the same, and net current assets will be €240 thousand lower due to the presentation of a portion of the liability as a current liability. The Group expects that net loss will decrease by approximately €5 thousand for 2019 as a result of adopting IFRS 16. Operating cash flows will increase and financing cash flows decrease by approximately €240 thousand as repayment of the principal portion of the lease liabilities will be classified as cash flows from financing activities. 4. Current and non-current distinction The Group presents current and non-current assets and current and non-current liabilities as separate classifications in its balance sheet. Current assets include assets that are sold, consumed or realized as part of the normal operating cycle. The operating cycle of an entity is the time between the acquisition of assets for processing and their realization in the form of cash or cash equivalents. The Groups operating cycle is assumed to be 12 months. Some current liabilities, such as trade payables and some accruals for employee and other operating costs, are part of the working capital used in the entity’s normal operating cycle. Such operating items are classified as current liabilities even if they are due to be settled more than 12 months after the reporting period. 5. Foreign currency transactions Transactions in a foreign currency are initially translated into the respective functional currency using the spot rate prevailing on the dates of the transaction. Monetary items which are not denominated in the functional currency are subsequently translated using the rate applicable at the end of the period. The resulting currency gains and losses are recognized directly in profit or loss. On consolidation, the assets and liabilities of foreign operations are translated into euros at the rate of exchange prevailing at the reporting date and their statements of profit or loss are translated with monthly average exchange rates during the reporting period. The exchange differences arising on translation for consolidation are recognized in other comprehensive income (OCI). On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is reclassified to profit or loss. 6. Research and development Research and development expenses comprise third party services, wages and salaries, cost of materials, intellectual property related expenses, depreciation and amortization of relevant equipment and intangibles as well as overhead. Research and development expenses mainly consist of cost for clinical trials and manufacturing of our clinical drug product, additionally cost are incurred by pre-clinical activities as well as basic research activities. Development expenses must be capitalized if the criteria of IAS 38 are met. In the periods presented, no development expenses were capitalized because management does not believe all the recognition criteria of IAS 38 had been met. This assessment is due to the general uncertainties in drug development and the unpredictability of regulatory requirements. As research expenditure and development expenditure does not meet the recognition criteria they are treated as an expense when incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period. 7. Employee benefits (i) Short-term employee benefits Liabilities for wages and salaries and cash bonuses are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet. A liability is recognized, if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably. (ii) Share-based payment transactions The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non- market performance conditions at the vesting date. For share-based payment awards with immediate vesting, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. 9. Government grants The Group received government grants in 2018 and prior years on certain investments in non-current assets and the Group still receives grant funds on specified research and development activities. Income from government grants is recognized under ‘other income’ in the consolidated statement of comprehensive loss. Income from the government grants is recognized at fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached terms and conditions. In prior years grants were collected together with investments in non-current assets, the income was deferred on a straight-line basis over the useful lives of the respective assets. Contributions supporting certain costs of research and development are recognized as income when respective reimbursable costs also are incurred. 10. Lease arrangements The Group leases various properties, laboratory and office equipment and cars. Rental contracts are typically made for fixed periods of one to five years but may have renewal options. The lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Group is classified as a finance lease. Typically the Group’s contracts are falling under the criteria of operate leases. An operating lease is a lease other than a finance lease. Operating lease payments are recognized as an operating expense in the statement of profit or loss on a straight-line basis over the lease term. Finance leases are capitalized at the commencement of the lease at the inception date fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in the statement of profit or loss. A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term. 11. Interest income Interest income is derived from interest-bearing financial assets, including cash equivalents. Interest income from financial assets at fair value through profit and loss is included in the net fair value gains/(losses) on these assets. Interest income on cash and cash equivalents, financial assets at amortized cost calculated using the effective interest method is recognized in the statement of profit or loss as part of finance income. 12. Intangible assets Intangible assets mainly comprise purchased IT software. Intangible assets are initially measured at acquisition cost, including any directly attributable costs of preparing the asset for its intended use less accumulated amortization. Amortization begins when an asset is available for use and amortization is calculated using the straight-line method to allocate cost over the estimated useful lives. Software is amortized over three years. The useful lives of intangible assets are reviewed at each reporting date. The effect of any adjustment to useful lives is recognized prospectively as a change of accounting estimate. The Group only owns intangible assets with a definite useful life. 13. Laboratory and office equipment Laboratory and office equipment are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. All repairs and maintenance are charged to profit or loss during the financial period in which they are incurred, because they do not constitute a separate asset. Depreciation on leasehold improvements and equipment is calculated using the straight-line method to allocate their cost over their estimated useful lives, as follows: · Laboratory equipment: three to 13 years · Office equipment: one to five years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized within ‘other income and expenses (net)’ in the consolidated statement of other comprehensive loss. 14. Financial assets and liabilities (financial instruments) A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. The Group’s financial liabilities comprise trade and other payables. The Group initially recognizes non- derivative financial liabilities on the date that they are originated and measures them at amortized cost using the effective interest rate method. The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire. 15. Income taxes Income taxes comprise current and deferred taxes. Current and deferred taxes are recognized in profit or loss except to the extent that they relate to items recognized directly in equity or in other comprehensive loss. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for temporary differences associated with assets and liabilities if the transaction which led to their initial recognition is a transaction that is not a business combination and that affects neither accounting nor tax profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are presented net if there is a legally enforceable right to offset. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent that it has become probable that future taxable profits will be available against which they can be used. Due to its stage of development, the Company does not report deferred tax assets on its consolidated statement of financial position. 16. Fair Value Measurement A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: · Level 1, quoted prices in active markets for identical assets or liabilities. · Level 2, inputs other than quoted prices included within Level 1 that are observable for the instrument, either directly (as prices) or indirectly (derived from prices). · Level 3, inputs for instruments that are not based on observable market data (unobservable inputs). If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. Further information about the assumptions made in measuring fair values of share-based payments is included in “1. Equity settled share-based payment arrangements”. The carrying amount of all financial instruments approximates their fair value. |
Other information (Policies)
Other information (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies And Valuation Methods Policies Abstract | |
Basis of preparation | The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretations Committee (IFRS IC) applicable to companies reporting under IFRS. The financial statements comply with IFRS as issued by the International Accounting Standards Board (IASB). The financial statements have been prepared on a historical cost basis except for share-based payments which are measured at fair value. These financial statements are consolidated financial statements for the Group consisting of InflaRx N.V. and its subsidiaries. The financial statements are presented in euro (€). Euro is also the functional currency of InflaRx N.V. All financial information presented in Euro has been rounded to the nearest thousand. 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. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is obtained by the Group. They are deconsolidated from the date control ceases. The acquisition method of accounting is used to account for business combinations by the Group. Intercompany transactions, balances and unrealized gains on transactions between Group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the accounting policies adopted by the Group. The financial statements were authorized for issue by the board of directors on March [•], 2019. All press releases, financial reports and other information are available on the Investor on the Company`s website: www.inflarx.com |
New and amended standards adopted by the Group | The Group has applied the following standards and amendments for the first time for their annual reporting period commencing January 1, 2018: · IFRS 9 Financial Instruments · IFRS 15 Revenue from Contracts with Customers · Amendments to IFRS 2 - Classification and Measurement of Share-based Payments · Annual Improvements 2014-2016 cycle · Transfers to Investment Property – Amendments to IAS 40 · Interpretation 22 Foreign Currency Transactions and Advance Consideration 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, which require restatement of previous financial statements. 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 - - 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 impact of IFRS 9 in the absence of material financial instruments was nil. A restatement of the consolidated statement of financial position as at January 1, 2018 was not necessary. Most of the other amendments listed above did not have any impact on the amounts recognized in prior periods and are not expected to significantly affect the current or future periods. |
New standards and interpretations not yet adopted | Certain new accounting standards and interpretations have been published that are not mandatory for December 31, 2018 reporting periods and have not been early adopted by the Group. The Group’s assessment of the impact of these new standards and interpretations is set out below. · IFRIC 23 Uncertainty over Tax Treatments. · Prepayment Features with Negative Compensation (Amendments to IFRS 9). · Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28). · Plan Amendment, Curtailment or Settlement (Amendments to IAS 19). · Annual Improvements to IFRS Standards 2015–2017 Cycle – various standards. · Amendments to References to Conceptual Framework in IFRS Standards. · IFRS 17 Insurance Contracts. · IFRS 16 Leases. IFRS 16 was issued in January 2016. It will result in almost all leases being recognized on the balance sheet by lessees, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognized. The only exceptions are short-term and low-value leases. The Group has analyzed all of the Group’s leasing arrangements over the last year in light of the new lease accounting rules in IFRS 16. As at the reporting date, the Group has non-cancellable operating lease commitments of €575 thousand (see ‘3. Unrecognized items - (a) Operating lease obligations’). Of these commitments, approximately €10 thousand relate to short-term leases and €6 thousand to low value leases which will both be recognized on a straight-line basis as expense in profit or loss. For the remaining lease commitments, the Group expects to recognize right-of-use assets of approximately €791 thousand on January 1, 2019, lease liabilities of €791 thousand (after adjustments for prepayments and accrued lease payments recognized as at December 31, 2018). Overall net assets will stay approximately the same, and net current assets will be €240 thousand lower due to the presentation of a portion of the liability as a current liability. The Group expects that net loss will decrease by approximately €5 thousand for 2019 as a result of adopting IFRS 16. Operating cash flows will increase and financing cash flows decrease by approximately €240 thousand as repayment of the principal portion of the lease liabilities will be classified as cash flows from financing activities. |
Current and non-current distinction | The Group presents current and non-current assets and current and non-current liabilities as separate classifications in its balance sheet. Current assets include assets that are sold, consumed or realized as part of the normal operating cycle. The operating cycle of an entity is the time between the acquisition of assets for processing and their realization in the form of cash or cash equivalents. The Groups operating cycle is assumed to be 12 months. Some current liabilities, such as trade payables and some accruals for employee and other operating costs, are part of the working capital used in the entity’s normal operating cycle. Such operating items are classified as current liabilities even if they are due to be settled more than 12 months after the reporting period. |
Foreign currency translation | Transactions in a foreign currency are initially translated into the respective functional currency using the spot rate prevailing on the dates of the transaction. Monetary items which are not denominated in the functional currency are subsequently translated using the rate applicable at the end of the period. The resulting currency gains and losses are recognized directly in profit or loss. On consolidation, the assets and liabilities of foreign operations are translated into euros at the rate of exchange prevailing at the reporting date and their statements of profit or loss are translated with monthly average exchange rates during the reporting period. The exchange differences arising on translation for consolidation are recognized in other comprehensive income (OCI). On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is reclassified to profit or loss. |
Research and development | Research and development expenses comprise third party services, wages and salaries, cost of materials, intellectual property related expenses, depreciation and amortization of relevant equipment and intangibles as well as overhead. Research and development expenses mainly consist of cost for clinical trials and manufacturing of our clinical drug product, additionally cost are incurred by pre-clinical activities as well as basic research activities. Development expenses must be capitalized if the criteria of IAS 38 are met. In the periods presented, no development expenses were capitalized because management does not believe all the recognition criteria of IAS 38 had been met. This assessment is due to the general uncertainties in drug development and the unpredictability of regulatory requirements. As research expenditure and development expenditure does not meet the recognition criteria they are treated as an expense when incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period. |
Employee benefits | (i) Short-term employee benefits Liabilities for wages and salaries and cash bonuses are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet. A liability is recognized, if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably. (ii) Share-based payment transactions The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non- market performance conditions at the vesting date. For share-based payment awards with immediate vesting, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. |
Government grants | The Group received government grants in 2018 and prior years on certain investments in non-current assets and the Group still receives grant funds on specified research and development activities. Income from government grants is recognized under ‘other income’ in the consolidated statement of comprehensive loss. Income from the government grants is recognized at fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached terms and conditions. In prior years grants were collected together with investments in non-current assets, the income was deferred on a straight-line basis over the useful lives of the respective assets. Contributions supporting certain costs of research and development are recognized as income when respective reimbursable costs also are incurred. |
Lease agreements | The Group leases various properties, laboratory and office equipment and cars. Rental contracts are typically made for fixed periods of one to five years but may have renewal options. The lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Group is classified as a finance lease. Typically the Group’s contracts are falling under the criteria of operate leases. An operating lease is a lease other than a finance lease. Operating lease payments are recognized as an operating expense in the statement of profit or loss on a straight-line basis over the lease term. Finance leases are capitalized at the commencement of the lease at the inception date fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in the statement of profit or loss. A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term. |
Interest income | Interest income is derived from interest-bearing financial assets, including cash equivalents. Interest income from financial assets at fair value through profit and loss is included in the net fair value gains/(losses) on these assets. Interest income on cash and cash equivalents, financial assets at amortized cost calculated using the effective interest method is recognized in the statement of profit or loss as part of finance income. |
Intangible assets | Intangible assets mainly comprise purchased IT software. Intangible assets are initially measured at acquisition cost, including any directly attributable costs of preparing the asset for its intended use less accumulated amortization. Amortization begins when an asset is available for use and amortization is calculated using the straight-line method to allocate cost over the estimated useful lives. Software is amortized over three years. The useful lives of intangible assets are reviewed at each reporting date. The effect of any adjustment to useful lives is recognized prospectively as a change of accounting estimate. The Group only owns intangible assets with a definite useful life. |
Laboratory and office equipment | Laboratory and office equipment are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. All repairs and maintenance are charged to profit or loss during the financial period in which they are incurred, because they do not constitute a separate asset. Depreciation on leasehold improvements and equipment is calculated using the straight-line method to allocate their cost over their estimated useful lives, as follows: · Laboratory equipment: three to 13 years · Office equipment: one to five years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized within ‘other income and expenses (net)’ in the consolidated statement of other comprehensive loss. |
Financial assets and liabilities (financial instruments) | A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. The Group’s financial liabilities comprise trade and other payables. The Group initially recognizes non- derivative financial liabilities on the date that they are originated and measures them at amortized cost using the effective interest rate method. The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire. |
Income taxes | Income taxes comprise current and deferred taxes. Current and deferred taxes are recognized in profit or loss except to the extent that they relate to items recognized directly in equity or in other comprehensive loss. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for temporary differences associated with assets and liabilities if the transaction which led to their initial recognition is a transaction that is not a business combination and that affects neither accounting nor tax profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are presented net if there is a legally enforceable right to offset. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent that it has become probable that future taxable profits will be available against which they can be used. Due to its stage of development, the Company does not report deferred tax assets on its consolidated statement of financial position. |
Fair value measurement | A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: · Level 1, quoted prices in active markets for identical assets or liabilities. · Level 2, inputs other than quoted prices included within Level 1 that are observable for the instrument, either directly (as prices) or indirectly (derived from prices). · Level 3, inputs for instruments that are not based on observable market data (unobservable inputs). If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. Further information about the assumptions made in measuring fair values of share-based payments is included in “1. Equity settled share-based payment arrangements”. The carrying amount of all financial instruments approximates their fair value. |
Information on how numbers we_2
Information on how numbers were calculated (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Information On How Numbers Were Calculated Tables Abstract | |
Research and development expenses | 2016 2017 2018 (in thousands of €) Research and development expenses Third-party services 3,757 8,856 15,909 manufacturing —* 5,559 4,829 clinical, pre-clinical —* 3,297 11,080 Personnel expenses 1,293 4,681 8,037 stock-based compensation expense 302 3,071 5,256 Legal and consulting fees 95 643 421 Other expenses 132 235 661 Total 5,278 14,415 25,028 |
General and administrative expenses | 2016 2017 2018 (in thousands of €) General and administrative expenses Personnel expenses 1,134 2,948 9,147 stock-based compensation expense 566 1,479 6,828 Legal and consulting fees 394 1,478 2,020 Other expenses 316 712 1,619 Total 1,844 5,138 12,787 |
Employee benefits | 2016 2017 2018 (in thousands of €) Employee benefits Wages and salaries 1,467 2,897 4,501 Social Security contributions* 126 182 350 Stock-based compensation expense 868 4,550 12,085 Other — — 248 Total 2,462 7,629 17,184 |
Net financial result | 2016 2017 2018 (in thousands of €) Finance income Foreign exchange income — — 8,250 Interest income — 130 2,183 Other 1 — - Total 1 130 10,433 Finance costs Foreign exchange expense 3 2,358 2,624 Other 2,046 2,565 107 Total 2,049 4,923 2,731 Net financial result (2,048) (4,793) 7,702 |
Tax loss carryforwards | December 31, 2017 December 31, 2018 (in thousands of €) InflaRx N.V. 7,923 33,571 InflaRx GmbH 34,787 34,787 |
Income taxes | December 31, 2017 December 31, 2018 (in thousands of €) InflaRx N.V. 7,923 33,571 InflaRx GmbH 34,787 34,787 2016 2017 2018 (in thousands of €) InflaRx Loss before taxes (8,939) (24,238) (29,815) Tax rate 30.5% 31.2% 29.2% Tax benefits at tax rate 2,729 7,560 8,715 Tax losses for which no deferred tax asset was recognized (2,729) (7,560) (8,715) Income taxes — — — |
Other assets | December 31, 2017 December 31, 2018 (in thousands of €) Current other assets Prepaid expense 504 1,047 Other 192 542 Total 696 1,589 |
Financial assets and financial liabilities | December 31, 2017 December 31, 2018 (in thousands of €) Financial assets at amortized cost Non-current financial assets 20 207 Current financial assets 0 101,184 Financial liabilities at amortized cost Trade and other payables (4,469) (6,657) |
Cash and cash equivalents | December 31, 2017 December 31, 2018 (in thousands of €) Short-term deposits Deposits held in U.S. dollars 81,229 32,919 Deposits held in euro 38,876 — Total 120,105 32,919 Cash at banks Money held in euro 2,842 21,720 Money held in U.S. dollars 335 748 Total 3,177 22,468 Total cash and cash equivalents 123,282 55,386 |
Risk (Tables)
Risk (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Risk Tables Abstract | |
Financial risk management | Exposure Measurement Risk Management Market risk Future development costs; Recognized financial assets and liabilities not denominated in euro Forecasted cash flows Sensitivity analysis Achievement of a natural hedge in the future Credit risk Cash and cash equivalents, debt investments Credit rating Diversification of bank deposits, Investment guidelines for debt investments Liquidity R&D and G&A cost and trade payables Rolling cash flow forecast Availability of funds through financing rounds or public offerings |
Assets exposed to risk | December 31, 2018 Non-current financial assets 207 Current financial assets 101,184 Cash and cash equivalents 55,386 Total assets exposed to the risk 156,777 Conversion rate EUR/USD at reporting date 1/1.1450 |
Sensitivity analysis | Conversion rate Profit/(loss) in P&L carrying amount Euro weakens by 1% against U.S. dollars 1.1565 (1,552) 155,225 Euro strengths by 1% against U.S. dollars 1.1336 1,584 158,361 Euro weakens by 5% against U.S. dollars 1.2023 (7,466) 149,311 Euro strengths by 5% against U.S. dollars 1.0878 8,251 165,028 Euro weakens by 10% against U.S. dollars 1.2595 (14,252) 142,525 Euro strengths by 10% against U.S. dollars 1.0305 17,420 174,197 |
Liquidity risk | December 31, 2017 December 31, 2018 (in thousands of €) Cash and cash equivalents Short-term deposits 120,105 32,919 Cash at banks 3,177 22,468 Total 123,282 55,386 Marketable Securities Securities and other Investments (current) — 100,868 Total — 100,868 Other financial assets Other (non-current portion) 20 207 Other (current) — 316 Total 20 523 Total funds available 123,302 156,777 |
Unrecognized items (Tables)
Unrecognized items (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Unrecognized Items Tables Abstract | |
Operating lease obligations | December 31, 2017 December 31, 2018 (in thousands of €) Commitments for minimum lease payments in relation to non-cancellable operating leases: Within one year 244 283 After one year but not more than five years 473 292 More than five years — — Total 717 575 Rental expense relating to operating leases Minimum lease payments 162 213 Contingent rentals — — Sub-lease income — — Total 162 213 |
Other commitments | December 31, 2017 December 31, 2018 (in thousands of €) Commitments for minimum payments in relation to non-cancellable operating contracts or services: Within one year 4,437 19,624 After one year but not more than five years 88 9,684 More than five years 7 — Total 4,532 29,307 |
Other information (Tables)
Other information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Information Tables Abstract | |
Subsidiaries | Name Place of business/ country of incorporation Functional currency Ownership interest held by the Group 2017 2018 Principal activities InflaRx GmbH Germany EUR 100% 100% Principal operating subsidiary, biopharmaceutical company InflaRx Pharmaceutical Inc. U.S. USD — 100% Subsidiary for basic research |
Compensation of executive management | 2016 2017 2018 (in thousands of €) Executive Management Short-term employee benefits 604 1,987 2,524 Share-based payments 660 3,187 9,801 Total 1,264 5,174 12,325 Non-executive Board of Directors Short-term employee benefits — 81 238 Share-based payments 208 43 1,086 Total 208 124 1,324 Total Compensation 1,472 5,298 13,649 |
Share-based payments | 2018 Number of stock options: Outstanding at January 1, 2018 1,869,192 Granted in 2018 208,073 Forfeited in 2018 (26,256) Outstanding at December 31, 2018 2,051,009 thereof vested 626,933 thereof exercised - |
Fair value of stock options granted | Q1-2018 Q2-2018 Q3-2018 Q3-2018 Q4-2018 Parameters Fair value at grant date Per option (USD) 13.79 22.37 19.80 20.17 13.39 FX rate as of grant date 0.82 0.86 0.86 0.85 0.88 Per option (EUR) 11.24 19.23 16.96 17.15 11.75 Share price at grant date (USD) 22.75 37.85 32.40 33.06 26.02 Exercise price (USD) 22.75 37.85 32.40 33.06 26.02 Expected volatility 0.73 0.73 0.73 0.73 0.65 Expected life (midpoint based) 4.9 4.6 4.9 4.9 4 Expected dividends — — — — — Risk-free rate (interpolated, U.S. sovereign strips curve) 2.6% 2.7% 2.8% 3.0% 2.9% |
Information on how numbers we_3
Information on how numbers were calculated (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
Research and development expenses | € 25,028 | € 14,415 | € 5,278 |
Third-party services | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
Research and development expenses | 15,909 | 8,856 | 3,757 |
Manufacturing | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
Research and development expenses | 4,829 | 5,559 | |
Clinical | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
Research and development expenses | 11,080 | 3,297 | |
Personnel expenses | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
Research and development expenses | 8,037 | 4,681 | 1,293 |
Stock-based Compensation | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
Research and development expenses | 5,256 | 3,071 | 302 |
Legal and consulting fees | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
Research and development expenses | 421 | 643 | 95 |
Others | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
Research and development expenses | € 661 | € 235 | € 132 |
Information on how numbers we_4
Information on how numbers were calculated (Details 1) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
General and administrative expenses | € 12,787 | € 5,138 | € 1,844 |
Personnel expenses | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
General and administrative expenses | 9,147 | 2,948 | 1,134 |
Stock-based Compensation | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
General and administrative expenses | 6,828 | 1,479 | 566 |
Legal and consulting fees | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
General and administrative expenses | 2,020 | 1,478 | 394 |
Others | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
General and administrative expenses | € 1,619 | € 712 | € 316 |
Information on how numbers we_5
Information on how numbers were calculated (Details 2) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
Employee benefits | € 17,184 | € 7,629 | € 2,462 |
Wages and salaries | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
Employee benefits | 4,501 | 2,897 | 1,467 |
Social security | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
Employee benefits | 350 | 182 | 126 |
Stock-based Compensation | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
Employee benefits | 12,085 | 4,550 | 868 |
Others | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
Employee benefits | € 248 | € 0 | € 0 |
Information on how numbers we_6
Information on how numbers were calculated (Details 3) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
Finance income | € 10,433 | € 130 | € 1 |
Finance costs | 2,731 | 4,923 | 2,049 |
Net financial result | 7,702 | (4,793) | (2,048) |
Foreign exchange | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
Finance income | 8,250 | 0 | 0 |
Finance costs | 2,624 | 2,358 | 3 |
Interest income | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
Finance income | 2,183 | 130 | 0 |
Other income | |||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | |||
Finance income | 0 | 0 | 1 |
Finance costs | € 107 | € 2,565 | € 2,046 |
Information on how numbers we_7
Information on how numbers were calculated (Details 4) - EUR (€) € in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
InflaRx N.V. | ||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | ||
Tax carry forwards | € 33,571 | € 7,923 |
InflaRx GmbH | ||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | ||
Tax carry forwards | € 34,787 | € 34,787 |
Information on how numbers we_8
Information on how numbers were calculated (Details 5) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Information On How Numbers Were Calculated Details 5Abstract | |||
Loss before taxes | € (29,815) | € (24,238) | € (8,939) |
Tax benefts at tax rate | 8,715 | 7,560 | 2,729 |
Tax losses for which no deferred income tax asset was recognized | (8,715) | (7,560) | (2,729) |
Income taxes | € 0 | € 0 | € 0 |
Information on how numbers we_9
Information on how numbers were calculated (Details 6) - EUR (€) € in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | ||
Other assets | € 1,589 | € 696 |
Prepaid expenses | ||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | ||
Other assets | 1,047 | 504 |
Others | ||
SummaryOfInformationOnHowNumbersWereCalculatedLineItems [Line Items] | ||
Other assets | € 542 | € 192 |
Information on how numbers w_10
Information on how numbers were calculated (Details 7) - EUR (€) € in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Information On How Numbers Were Calculated Details 7Abstract | ||
Non-current financial assets | € 207 | € 20 |
Current financial assets | 101,184 | 0 |
Trade and other payables | € (6,657) | € (4,469) |
Information on how numbers w_11
Information on how numbers were calculated (Details 8) - EUR (€) € in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Information On How Numbers Were Calculated Details 8Abstract | ||||
Deposits held in U.S. dollars) | € 32,919 | € 81,229 | ||
Deposits held in euro | 0 | 38,876 | ||
Short-term deposits | 32,919 | 120,105 | ||
Money held in euro | 21,720 | 2,842 | ||
Money held in U.S. dollars | 748 | 335 | ||
Deposits held at banks | 22,468 | 3,177 | ||
Cash and cash equivalents | € 55,386 | € 123,282 | € 29,117 | € 3,302 |
Risk (Details)
Risk (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Market risk | |
SummaryOfRiskLineItems [Line Items] | |
Exposure | Future development costs; Recognized financial assets and liabilities not denominated in euro |
Measurement | Forecasted cash flows Sensitivity analysis |
Risk Management | Achievement of a natural hedge in the future |
Credit risk | |
SummaryOfRiskLineItems [Line Items] | |
Exposure | Cash and cash equivalents, debt investments |
Measurement | Credit rating |
Risk Management | Diversification of bank deposits, Investment guidelines for debt investments |
Liquidity | |
SummaryOfRiskLineItems [Line Items] | |
Exposure | R&D and G&A cost and trade payables |
Measurement | Rolling cash flow forecast |
Risk Management | Availability of funds through financing rounds or public offerings |
Risk (Details 1)
Risk (Details 1) - EUR (€) € in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Risk Details 1Abstract | ||||
Non-current financial assets | € 207 | € 20 | ||
Current financial assets | 101,184 | 0 | ||
Cash and cash equivalents | 55,386 | € 123,282 | € 29,117 | € 3,302 |
Total assets exposed to the risk | € 156,777 |
Risk (Details 2)
Risk (Details 2) € in Thousands | 12 Months Ended |
Dec. 31, 2018EUR (€)€ / $ | |
(1%) | |
SummaryOfRiskLineItems [Line Items] | |
Conversion rate | € / $ | 1.1565 |
Profit/(loss) in P&L | € (1,552) |
Carrying amount | € 155,225 |
1% | |
SummaryOfRiskLineItems [Line Items] | |
Conversion rate | € / $ | 1.1336 |
Profit/(loss) in P&L | € 1,584 |
Carrying amount | € 158,361 |
(5%) | |
SummaryOfRiskLineItems [Line Items] | |
Conversion rate | € / $ | 1.2023 |
Profit/(loss) in P&L | € (7,466) |
Carrying amount | € 149,311 |
5% | |
SummaryOfRiskLineItems [Line Items] | |
Conversion rate | € / $ | 1.0878 |
Profit/(loss) in P&L | € 8,251 |
Carrying amount | € 165,028 |
(10%) | |
SummaryOfRiskLineItems [Line Items] | |
Conversion rate | € / $ | 1.2595 |
Profit/(loss) in P&L | € (14,252) |
Carrying amount | € 142,525 |
10% | |
SummaryOfRiskLineItems [Line Items] | |
Conversion rate | € / $ | 1.0305 |
Profit/(loss) in P&L | € 17,420 |
Carrying amount | € 174,197 |
Risk (Details 3)
Risk (Details 3) - EUR (€) € in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Risk Details 3Abstract | ||||
Short-term deposits | € 32,919 | € 120,105 | ||
Cash at banks | 22,468 | 3,177 | ||
Cash and cash equivalents | 55,386 | 123,282 | € 29,117 | € 3,302 |
Securities and other Investments (current) | 100,868 | 0 | ||
Marketable Securities | 100,868 | 0 | ||
Other (non-current portion) | 207 | 20 | ||
Other (current) | 316 | 0 | ||
Other financial assets | 523 | 20 | ||
Total funds available | € 156,777 | € 123,302 |
Risk (Details Narrative)
Risk (Details Narrative) - EUR (€) € in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Risk Details Narrative Abstract | ||||
Maximum exposure to counterparty credit risk | € 156,800 | € 123,300 | ||
Carrying amount of cash and cash equivalents | 55,386 | 123,282 | € 29,117 | € 3,302 |
Financial assets | € 101,400 | € 0 |
Unrecognized items (Details)
Unrecognized items (Details) - EUR (€) € in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
SummaryOfUnrecognizedItemsLineItems [Line Items] | ||
Commitments for minimum lease payments in relation to non-cancellable operating leases: | € 575 | € 717 |
Commitments for minimum payments in relation to non-cancellable operating contracts or services | 29,307 | 4,532 |
Within one year | ||
SummaryOfUnrecognizedItemsLineItems [Line Items] | ||
Commitments for minimum lease payments in relation to non-cancellable operating leases: | 283 | 244 |
Commitments for minimum payments in relation to non-cancellable operating contracts or services | 19,624 | 4,437 |
After one year but not more than five years | ||
SummaryOfUnrecognizedItemsLineItems [Line Items] | ||
Commitments for minimum lease payments in relation to non-cancellable operating leases: | 292 | 473 |
Commitments for minimum payments in relation to non-cancellable operating contracts or services | 9,684 | 88 |
More than five years | ||
SummaryOfUnrecognizedItemsLineItems [Line Items] | ||
Commitments for minimum lease payments in relation to non-cancellable operating leases: | 0 | 0 |
Commitments for minimum payments in relation to non-cancellable operating contracts or services | € 0 | € 7 |
Unrecognized items (Details 1)
Unrecognized items (Details 1) - EUR (€) € in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
SummaryOfUnrecognizedItemsLineItems [Line Items] | ||
Rental expense relating to operating leases | € 213 | € 162 |
Minimum lease payments | ||
SummaryOfUnrecognizedItemsLineItems [Line Items] | ||
Rental expense relating to operating leases | 213 | 162 |
Contingent rentals | ||
SummaryOfUnrecognizedItemsLineItems [Line Items] | ||
Rental expense relating to operating leases | 0 | 0 |
Sublease Income | ||
SummaryOfUnrecognizedItemsLineItems [Line Items] | ||
Rental expense relating to operating leases | € 0 | € 0 |
Other information (Details)
Other information (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
InflaRx N.V. | ||
SummaryOfOtherInformationLineItems [Line Items] | ||
Place of business/ country of incorporation | Germany | |
Functional currency | EUR | |
Ownership interest held by the Group | 100.00% | 100.00% |
Principal activities | Principal operating subsidiary, biopharmaceutical company | |
InflaRx Pharmaceutical Inc. | ||
SummaryOfOtherInformationLineItems [Line Items] | ||
Place of business/ country of incorporation | U.S. | |
Functional currency | USD | |
Ownership interest held by the Group | 100.00% | |
Principal activities | Subsidiary for basic research |
Other information (Details 1)
Other information (Details 1) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SummaryOfOtherInformationLineItems [Line Items] | |||
Compensation of key management personnel | € 13,649 | € 5,298 | € 1,472 |
Executive Management | |||
SummaryOfOtherInformationLineItems [Line Items] | |||
Short-term employee benefits | 2,524 | 1,987 | 604 |
Share-based payments | 9,801 | 3,187 | 660 |
Compensation of key management personnel | 12,325 | 5,174 | 1,264 |
Non-executive Board of Directors | |||
SummaryOfOtherInformationLineItems [Line Items] | |||
Short-term employee benefits | 238 | 81 | 0 |
Share-based payments | 1,086 | 43 | 208 |
Compensation of key management personnel | € 1,324 | € 124 | € 208 |
Other information (Details 2)
Other information (Details 2) | 12 Months Ended |
Dec. 31, 2018shares | |
Sharebased Payments Details 1Abstract | |
Outstanding, beginning | 1,869,192 |
Granted | 208,073 |
Forfeited | (26,256) |
Outstanding, ending | 2,051,009 |
Vested | 626,933 |
Other information (Details 3)
Other information (Details 3) | 12 Months Ended |
Dec. 31, 2018€ / shares$ / shares | |
Q1 | |
SummaryOfOtherInformationLineItems [Line Items] | |
Fair value at grant date Per option (USD) | 13.79 |
Fair value at grant date FX rate as of grant date | 0.82% |
Fair value at grant date Per option (EUR) | € / shares | 11.24 |
Share price at grant date (USD) | $ 22.75 |
Exercise price (USD) | 22.75 |
Expected volatility | 0.73% |
Expected life (midpoint based) | 4.9 |
Expected dividends | |
Risk-free rate (interpolated, U.S. sovereign strips curve) | 2.60% |
Q2 | |
SummaryOfOtherInformationLineItems [Line Items] | |
Fair value at grant date Per option (USD) | 22.37 |
Fair value at grant date FX rate as of grant date | 0.86% |
Fair value at grant date Per option (EUR) | € / shares | 19.23 |
Share price at grant date (USD) | $ 37.85 |
Exercise price (USD) | 37.85 |
Expected volatility | 0.73% |
Expected life (midpoint based) | 4.6 |
Expected dividends | |
Risk-free rate (interpolated, U.S. sovereign strips curve) | 2.70% |
Q3 | |
SummaryOfOtherInformationLineItems [Line Items] | |
Fair value at grant date Per option (USD) | 19.8 |
Fair value at grant date FX rate as of grant date | 0.86% |
Fair value at grant date Per option (EUR) | € / shares | 16.96 |
Share price at grant date (USD) | $ 32.4 |
Exercise price (USD) | 32.4 |
Expected volatility | 0.73% |
Expected life (midpoint based) | 4.9 |
Expected dividends | |
Risk-free rate (interpolated, U.S. sovereign strips curve) | 2.80% |
Q3 | |
SummaryOfOtherInformationLineItems [Line Items] | |
Fair value at grant date Per option (USD) | 20.17 |
Fair value at grant date FX rate as of grant date | 0.85% |
Fair value at grant date Per option (EUR) | € / shares | 17.15 |
Share price at grant date (USD) | $ 33.06 |
Exercise price (USD) | 33.06 |
Expected volatility | 0.73% |
Expected life (midpoint based) | 4.9 |
Expected dividends | |
Risk-free rate (interpolated, U.S. sovereign strips curve) | 3.00% |
Q4 | |
SummaryOfOtherInformationLineItems [Line Items] | |
Fair value at grant date Per option (USD) | 13.39 |
Fair value at grant date FX rate as of grant date | 0.88% |
Fair value at grant date Per option (EUR) | € / shares | 11.75 |
Share price at grant date (USD) | $ 26.02 |
Exercise price (USD) | 26.02 |
Expected volatility | 0.65% |
Expected life (midpoint based) | 4 |
Expected dividends | |
Risk-free rate (interpolated, U.S. sovereign strips curve) | 2.90% |