Exhibit 99.1
INFLARX N.V.
UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS – SEPTEMBER 30, 2020
These unaudited condensed financial statements are consolidated financial statements for the group consisting of InflaRx N.V. and its wholly-owned subsidiaries InflaRx GmbH, Jena, Germany, and InflaRx Pharmaceutical Inc., Ann Arbor, Michigan, United States (together, the “Group”). The financial statements are presented in Euro (€).
InflaRx N.V. is a company limited by shares, incorporated and domiciled in Amsterdam, The Netherlands.
Its registered office and principal place of business is in Germany, Jena, Winzerlaer Str. 2.
F-1
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020
Unaudited Condensed Consolidated Financial Statements | ||
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2020 and 2019 | 3 | |
Unaudited Condensed Consolidated Statements of Financial Position as of September 30, 2020 and December 31, 2019 | 4 | |
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the nine months ended September 30, 2020 and 2019 | 5 | |
Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019 | 6 | |
Notes to the Unaudited Condensed Consolidated Financial Statements | 7 | |
1. | Net Financial Result | 7 |
2. | Other non-financial assets | 7 |
3. | Financial assets and financial liabilities | 8 |
4. | Cash and cash equivalents | 8 |
5. | Equity | 9 |
6. | Share-based payments | 9 |
(a) | Equity settled share-based payment arrangements | 9 |
(b) | Change in the accounting estimate of the share options expected to vest | 11 |
(c) | Share options exercised | 11 |
(d) | Share-based payment expense recognized | 11 |
7. | Protective foundation | 11 |
8. | Contractual Obligations and Commitments | 12 |
9. | Summary of significant accounting policies and other disclosures | 12 |
(a) | Reporting entity and Group’s structure | 12 |
(b) | Basis of preparation | 12 |
(c) | New and amended standards adopted by the Group | 13 |
(d) | Significant events of the quarter and changes in circumstances | 13 |
(e) | Significant events after the reporting date | 14 |
F-2
InflaRx N.V. and subsidiaries
for the three and nine months ended September 30, 2020 and 2019
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||||||
(in €, except for share data) | Note | 2020 (unaudited) | 2019 (unaudited) | 2020 (unaudited) | 2019 (unaudited) | |||||||||||||||
Operating Expenses | ||||||||||||||||||||
Research and development expenses | (5,246,536 | ) | (13,405,646 | ) | (19,901,661 | ) | (33,598,018 | ) | ||||||||||||
(1,166,070 | ) | (2,490,245 | ) | (6,057,767 | ) | (9,439,080 | ) | |||||||||||||
(6,412,606 | ) | (15,895,891 | ) | (25,959,428 | ) | (43,037,098 | ) | |||||||||||||
200,763 | 194,261 | |||||||||||||||||||
(13 | ) | (838 | ) | (9,184 | ) | (83,907 | ) | |||||||||||||
(6,409,148 | ) | (15,770,170 | ) | (25,767,849 | ) | (42,926,744 | ) | |||||||||||||
3,593,803 | 4,527,952 | |||||||||||||||||||
(1,775,183 | ) | (761,268 | ) | (2,951,147 | ) | (1,211,366 | ) | |||||||||||||
1 | (449,816 | ) | 642,656 | 3,316,586 | ||||||||||||||||
(6,858,964 | ) | (14,501,446 | ) | (25,125,193 | ) | (39,610,157 | ) | |||||||||||||
Share Information | ||||||||||||||||||||
Weighted average number of shares outstanding | 26,674,233 | 25,970,571 | ||||||||||||||||||
(0.25 | ) | (0.56 | ) | (0.94 | ) | (1.53 | ) | |||||||||||||
Loss for the Period | (6,858,964 | ) | (14,501,446 | ) | (25,125,193 | ) | (39,610,157 | ) | ||||||||||||
Exchange differences on translation of foreign currency | (3,022,687 | ) | (2,761,792 | ) | 5,683,610 | |||||||||||||||
(9,881,651 | ) | (9,513,305 | ) | (27,886,985 | ) | (33,926,548 | ) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
[3]
InflaRx N.V. and subsidiaries
Unaudited Condensed Consolidated Statements of Financial Position
as of September 30, 2020 and December 31, 2019
as of September 30, 2020 and December 31, 2019
(in €) | Note | September 30, 2020 (unaudited) | December 31, 2019 | |||||||||
ASSETS | ||||||||||||
Non-current assets | ||||||||||||
Property, plant and equipment | 576,373 | |||||||||||
Right-of-use assets | 623,452 | 836,924 | ||||||||||
Intangible assets | 452,400 | |||||||||||
Other assets | 2 | 452,217 | ||||||||||
Financial assets | 3 | 272,614 | ||||||||||
Total non-current assets | 2,590,528 | |||||||||||
Current assets | ||||||||||||
Other assets | 2 | 3,500,884 | ||||||||||
Financial assets | 3 | 82,353,867 | ||||||||||
Cash and cash equivalents | 4 | 33,131,280 | ||||||||||
Total current assets | 118,986,031 | |||||||||||
TOTAL ASSETS | 121,576,558 | |||||||||||
EQUITY AND LIABILITIES | ||||||||||||
Equity | ||||||||||||
Issued capital | 5 | 3,132,631 | ||||||||||
Share premium | 5 | 211,006,606 | ||||||||||
Other capital reserves | 6 | 25,142,213 | ||||||||||
Accumulated deficit | (159,487,199 | ) | (134,362,006 | ) | ||||||||
Other components of equity | (534,564 | ) | 2,227,228 | |||||||||
Total equity | 107,146,673 | |||||||||||
Non-current liabilities | ||||||||||||
Lease liabilities | 330,745 | |||||||||||
Other non-financial liabilities | 35,488 | 39,013 | ||||||||||
Total non-current liabilities | 369,758 | |||||||||||
Current liabilities | ||||||||||||
Trade and other payables | 3 | 12,413,662 | ||||||||||
Lease liabilities | 515,203 | |||||||||||
Employee benefits | 799,812 | 975,629 | ||||||||||
Social security, other taxes and other non-financial liabilities | 105,634 | |||||||||||
Provisions | 50,000 | |||||||||||
Total current liabilities | 14,060,128 | |||||||||||
Total Liabilities | 14,429,886 | |||||||||||
TOTAL EQUITY AND LIABILITIES | 121,576,558 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
[4]
InflaRx N.V. and subsidiaries
for the nine months ended September 30, 2020 and 2019
(in €, except for share data) | Note | Shares outstanding | Issued capital | Share premium | Other capital reserves | Accumulated deficit | Other components of equity | Total equity | ||||||||||||||||||||||||
Balance as of January 1, 2020 | 26,105,255 | (134,362,006 | ) | |||||||||||||||||||||||||||||
Loss for the period | — | — | — | — | (25,125,193 | ) | — | (25,125,193 | ) | |||||||||||||||||||||||
Exchange differences on translation of foreign currency | — | — | — | — | — | (2,761,792 | ) | (2,761,792 | ) | |||||||||||||||||||||||
Total comprehensive loss | — | — | — | — | (25,125,193 | ) | (2,761,792 | ) | (27,886,985 | ) | ||||||||||||||||||||||
Contributions | ||||||||||||||||||||||||||||||||
Issuance of common shares | 5 | 1,958,186 | 234,982 | 9,535,961 | — | — | — | 9,770,943 | ||||||||||||||||||||||||
Transaction costs | 5 | — | — | (729,841 | ) | — | — | — | (729,841 | ) | ||||||||||||||||||||||
Equity-settled share-based pay-ments | 6 | — | — | — | — | — | ||||||||||||||||||||||||||
Share options exercised | 6 | 164,974 | 19,797 | 477,149 | — | — | — | 496,946 | ||||||||||||||||||||||||
Total Contributions | — | — | ||||||||||||||||||||||||||||||
Balance as of September 30, 2020 | (159,487,199 | ) | (534,564 | ) | ||||||||||||||||||||||||||||
Balance as of January 1, 2019 | (81,107,188 | ) | 50,196 | |||||||||||||||||||||||||||||
Loss for the period | — | — | — | — | (39,610,157 | ) | — | (39,610,157 | ) | |||||||||||||||||||||||
Exchange differences on translation of foreign currency | — | — | — | — | — | |||||||||||||||||||||||||||
Total comprehensive loss | — | — | — | — | (39,610,157 | ) | (33,926,547 | ) | ||||||||||||||||||||||||
Contributions | ||||||||||||||||||||||||||||||||
Equity-settled share-based pay-ments | 6 | — | — | — | — | — | ||||||||||||||||||||||||||
Share options exercised | 6 | 140,876 | 16,905 | (15,229 | ) | — | — | — | 1,676 | |||||||||||||||||||||||
Total Contributions | (15,229 | ) | — | — | ||||||||||||||||||||||||||||
Balance as of September 30, 2019 | (120,717,345 | ) |
[5]
InflaRx N.V. and subsidiaries
for the nine months ended September 30, 2020 and 2019
(in €) | Note | For the nine months ended September 30, 2020 (unaudited) | For the nine months ended September 30, 2019 (unaudited) | |||||||||
Operating activities | ||||||||||||
Loss for the period | (25,125,193 | ) | (39,610,157 | ) | ||||||||
Adjustments for: | ||||||||||||
Depreciation & amortization of property, plant, equipment, right-of-use assets and intangible assets | ||||||||||||
Net financial result | 1 | (642,656 | ) | (3,316,586 | ) | |||||||
Share-based payment expense | 6 | |||||||||||
Net foreign exchange differences | (869,402 | ) | (345,347 | ) | ||||||||
Other non-cash adjustments | — | 59,958 | ||||||||||
Changes in: | ||||||||||||
Other assets | (226,811 | ) | (1,233,165 | ) | ||||||||
Employee benefits | (191,042 | ) | (14,316 | ) | ||||||||
Social security and other current non-financial liabilities | 13,896 | (205,175 | ) | |||||||||
Trade and other payables | (2,415,210 | ) | ||||||||||
Interest received | ||||||||||||
Interest paid | (15,546 | ) | (19,822 | ) | ||||||||
Net cash used in operating activities | (26,802,196 | ) | (26,995,930 | ) | ||||||||
Investing activities | ||||||||||||
Purchase of intangible assets, laboratory and office equipment | (83,855 | ) | (622,265 | ) | ||||||||
Purchase of non-current other financial assets | — | (75,543 | ) | |||||||||
Purchase of current financial assets | (68,169,518 | ) | (42,688,210 | ) | ||||||||
Proceeds from the maturity of financial assets | ||||||||||||
Net cash from/ (used in) investing activities | (2,846,193 | ) | ||||||||||
Financing activities | ||||||||||||
Proceeds from issuance of common shares | 5 | 9,770,944 | — | |||||||||
Transaction costs from issuance of common shares | 5 | (729,841 | ) | — | ||||||||
Proceeds from exercise of share options | 6 | 496,946 | 1,676 | |||||||||
Repayment of lease liabilities | (275,323 | ) | (209,176 | ) | ||||||||
Net cash from/ (used in) financing activities | (207,500 | ) | ||||||||||
Net increase/(decrease) in cash and cash equivalents | (30,049,623 | ) | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | ||||||||||||
Cash and cash equivalents at beginning of period | ||||||||||||
Cash and cash equivalents at end of period | 4 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
[6]
InflaRx N.V. and subsidiaries
1. | Net Financial Result |
The net financial result is comprised of the following items for the three and nine months ended September 30:
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
(in €) | 2020 (unaudited) | 2019 (unaudited) | 2020 (unaudited) | 2019 (unaudited) | ||||||||||||
Finance income | ||||||||||||||||
Foreign exchange income | 2,748,961 | 2,222,175 | ||||||||||||||
844,842 | 2,305,777 | |||||||||||||||
3,593,803 | 4,527,952 | |||||||||||||||
Foreign exchange expense | (1,891,188 | ) | (756,758 | ) | (2,861,894 | ) | (1,191,544 | ) | ||||||||
116,005 | (4,509 | ) | (89,253 | ) | (19,822 | ) | ||||||||||
(1,775,183 | ) | (761,267 | ) | (2,951,147 | ) | (1,211,366 | ) | |||||||||
(449,816 | ) | 642,656 | 3,316,586 |
Interest income results from marketable securities and short-term deposits in U.S. Dollars held by the Company and its subsidiary InflaRx GmbH.
Foreign exchange income and expense is mainly derived from the translation of the U.S. Dollar cash, cash equivalents and securities held by InflaRx GmbH.
Other finance expenses for the three months ended September 30, 2020 includes a €0.1 million gain from a reduction in the allowance for expected credit loss on marketable securities (2019: €nil). Cumulative net expense from expected credit loss on marketable securities included in other finance expenses amounted to €0.1 million for the nine months ended September 30, 2020 (2019: €nil).
2. | Other non-financial assets |
As of September 30, 2020 (unaudited) | As of December 31, 2019 | |||||||
Non-current other assets | ||||||||
Prepaid expense | 452,217 | |||||||
Total | 452,217 | |||||||
Current other assets | ||||||||
Prepayments on research & development projects | 698,891 | |||||||
Current tax assets | 1,172,907 | 1,134,968 | ||||||
Prepaid expense | 1,467,936 | |||||||
Other | 199,088 | |||||||
Total | 3,500,884 |
Prepaid expense mainly consists of prepaid insurance expense. Total prepaid expense as of September 30, 2020 decreased as compared to December 31, 2019, primarily due to amortization of prepayments of Directors and Officers insurance which is prepaid annually in the fourth quarter of the year.
[7]
Prepayments on research & development projects consists of prepayments on clinical and production contracts. Mainly due to our COVID-19 trial and the related CRO contract, prepayments have increased as of September 30, 2020 compared to December 31, 2019.
Current tax assets as of September 30, 2020 include tax reclaims because of dividend tax withheld. Such tax is withheld by our banks from securities interest payments, and the Company is reimbursed after filing a tax return.
3. | Financial assets and financial liabilities |
Set out below is an overview of financial assets and liabilities, other than cash and cash equivalents, held by the Group as of September 30, 2020 and December 31, 2019:
(in €) | As of September 30, 2020 (unaudited) | As of December 31, 2019 | ||||||
Financial assets at amortized cost | ||||||||
Non-current financial assets | ||||||||
Current financial assets | ||||||||
Financial liabilities at amortized cost | ||||||||
Trade and other payables | ||||||||
Interest bearing loans and borrowings | ||||||||
Non-current lease liabilities | 123,053 | 330,745 | ||||||
Current lease liabilities | 511,652 | 513,834 |
As of September 30, the fair value of current and non-current financial assets (primarily quoted debt securities) amounted to €50,849 thousand (Level 1). The Group’s debt instruments at amortized cost consist solely of quoted securities that are graded in the top investment category (AAA) by credit rating agencies such as S&P Global and, therefore, are considered low credit risk investments.
4. | Cash and cash equivalents |
(in €) | As of September 30, 2020 (unaudited) | As of December 31, 2019 | ||||||
Short-term deposits | ||||||||
Deposits held in U.S. Dollars | ||||||||
Deposits held in Euro | 8,880,000 | — | ||||||
Total | ||||||||
Cash at banks | ||||||||
Cash held in Euro | ||||||||
Cash held in U.S. Dollars | ||||||||
Total | ||||||||
Total cash and cash equivalents |
[8]
5. | Equity |
On July 7, 2020, the Company filed with the United States Securities and Exchange Commission (SEC) a Form F-3 with respect to the offer and sale of securities of the Company (Registration Statement). The Company also filed with the SEC a prospectus supplement (Prospectus Supplement) relating to an at-the-market program providing for the sales over time of up to $50,000,000 of its common shares pursuant a Sales Agreement with SVB Leerink LLC.
As of September 30, 2020, the Company had issued 1,958,186 common shares resulting in €9.0 million in net proceeds to the Company. Following these issuances, the remaining value authorized for sale under the at-the-market program is $38.8 million.
6. | Share-based payments |
During its historical financing rounds prior to 2016 InflaRx GmbH established equity-settled share-based payment programs. Those InflaRx GmbH options were converted into options for common shares of InflaRx N.V. in November 2017:
Number of share options | 2020 | 2019 | ||||||
Outstanding as of January 1, | 148,433 | 289,309 | ||||||
Exercised during the nine months ended September 30 | — | (140,876 | ) | |||||
Outstanding as of September 30, | 148,433 | 148,433 | ||||||
thereof vested | 148,433 | 148,433 |
Under the terms and conditions of the share option plan 2016 InflaRx GmbH granted rights to subscribe for InflaRx GmbH’s common shares to directors, senior management, and key employees. Those InflaRx GmbH options were converted into options for common shares of InflaRx N.V. in November 2017:
Number of share options | 2020 | 2019 | ||||||
Outstanding as of January 1, | 1,181,484 | 1,181,484 | ||||||
Exercised during the nine months ended September 30 | (86,632 | ) | — | |||||
Outstanding as of September 30, | 1,094,852 | 1,181,484 | ||||||
thereof vested | 1,094,852 | 1,181,484 |
In conjunction with the closing of its initial public offering, InflaRx N.V. established a new incentive plan (the “2017 Long-Term Incentive Plan”). The initial maximum number of common shares available for issuance under equity incentive awards granted pursuant to the 2017 Long-Term Incentive Plan equals 2,341,097 common shares.
Number of share options | 2020 | 2019 | ||||||
Outstanding as of January 1, | 2,181,105 | 2,051,009 | ||||||
Granted during the nine months ended September 30 | 96,188 | 54,450 | ||||||
Exercised during the nine months ended September 30 | (78,342 | ) | — | |||||
Forfeited during the nine months ended September 30 | (181,287 | ) | (58,335 | ) | ||||
Outstanding as of September 30, | 2,017,664 | 2,047,124 | ||||||
thereof vested | 1,696,066 | 1,173,922 |
[9]
The number of share options granted during the nine months ended September 30, 2020 under the plan was as follows:
Share options granted | Number | Fair value per option | FX rate as of grant date | Fair value per option | Share price at grant date / Exercise price | Expected volatility | Expected life (midpoint based) | Risk-free rate (interpolated, U.S. sovereign strips curve) | ||||||||||||||||||||||||
2020 | ||||||||||||||||||||||||||||||||
September 18 | 71,186 | $ | 4.16 | 0.85 | € | 3.52 | $ | 4.83 | 1.35 | 4.77 | 0.36 | % | ||||||||||||||||||||
September 18 | 25,002 | $ | 4.21 | 0.85 | € | 3.56 | $ | 4.83 | 1.35 | 5.02 | 0.39 | % | ||||||||||||||||||||
96,188 |
Of the 96,188 options granted in the nine months ended September 30, 2020, 50,000 were granted to members of the executive management or Board of Directors. At the meeting on September 18, 2020, the Board also passed a resolution to grant 150,000 options to a member of the executive management upon start of the employment, therefore, these options are deemed granted, as it is defined by IFRS 2, on October 1, 2020 and will be reflected in the financial statements for the year ended December 31, 2020.
The number of share options granted during the nine months ended September 30, 2019 under the plan was as follows:
Share options granted | Number | Fair value per option | FX rate as of grant date | Fair value per option | Share price at grant date / Exercise price | Expected volatility | Expected life (midpoint based) | Risk-free rate (interpolated, U.S. sovereign strips curve) | ||||||||||||||||||||||||
2019 | ||||||||||||||||||||||||||||||||
January 1 | — | $ | 14.45 | 0.88 | € | 12.69 | $ | 26.02 | * | 0.65 | 4.8 | 3.00 | % | |||||||||||||||||||
February 4 | 18,450 | $ | 18.17 | 0.87 | € | 15.87 | $ | 32.63 | * | 0.65 | 4.9 | 2.60 | % | |||||||||||||||||||
May 14 | 36,000 | $ | 22.54 | 0.89 | € | 20.08 | $ | 41.39 | * | 0.65 | 4.7 | 2.30 | % | |||||||||||||||||||
Repricing, July 3 | — | $ | 0.46-$1.08 | 0.89 | € | 0.40-€0.96 | $ | 3.35 | 1.35 | 2.3-4.6 | 2.30 | % | ||||||||||||||||||||
54,450 |
* On July 3, 2019, the board approved an amendment of the 2016 Option Plan and the 2017 Long-Term Incentive Plan. Following the amendment, the strike price of all vested and unvested options, other than those held by persons who were not employees or directors at the time of the amendment, was reduced to $3.35 per share.
None of the options granted in the nine months ended September 30, 2019 were granted to members of the executive management or Board of Directors.
Expected dividends are nil for all share options listed above.
The annual general meeting on July 16, 2020, approved an amendment to the 2017 Long-Term Incentive Plan (LTIP) with effect from January 1, 2021:
• | increasing the maximum annual number of common shares in the Company’s capital available for issuance under the LTIP, starting on January 1, 2021, to 4% (from 3%) of the Company’s outstanding common shares (determined as of December 31 of the immediately preceding year); and |
• | removing certain restrictions from the LTIP, which will allow the committee administering the LTIP and the Board to (i) lower the exercise price per share of any options and/or share appreciation rights issued under the LTIP or take any other action treated as a ‘repricing’ of an award and (ii) cancel any option and/or share appreciation rights in exchange for cash or another award granted under the LTIP, in either case, without prior approval of the Company’s shareholders. |
[10]
Due to terminations in the third quarter of 2020, effective July 1, 2020, we have revised our assumptions about the number of equity instruments that will vest in future quarters. As a result of this change in estimate, we recognized a benefit of €53.1 thousand in research and development expenses and a benefit of €63.4 thousand in general and administrative expenses in the three months ended September 30, 2020, and we will record €52.7 thousand less expense in research and development expenses and €36.8 thousand less expense in general and administrative expenses from share-based payments in the remaining vesting periods until June 30, 2022.
In the nine months ended September 30, 2020, 164,974 shares were issued upon the exercise of share options, resulting in proceeds to the Company in the amount of €497 thousand. Of the share options exercised, 86,632 were granted under the 2016 Share Option Plan and 78,342 were granted under the 2017 Long-Term Incentive Plan.
In the nine months ending September 30, 2019, 140,876 shares were issued following the exercise of stock options, resulting in proceeds to the Company in the amount of €1.7 thousand. All stock options exercised were granted under the 2012 Stock Option Plan.
For the three and nine months ended September 30, 2020, the Company has recognized €(588) thousand and €897 thousand, respectively, (2019: €1,001 thousand, €5,689 thousand) of share-based payment expense/(benefit) in the statements of operations and comprehensive loss. The gain recognized in the three months ended September 30, 2020 includes an adjustment for forfeited share options.
None of the share-based payments awards were dilutive in determining earnings per share due to the Group’s loss position.
7. | Protective foundation |
According to the articles of association of the Company, up to 55,000,000 common shares and up to 55,000,000 preferred shares with a nominal value of €0.12 per share are authorized to be issued. All shares are registered shares. No share certificates shall be issued.
In order to deter acquisition bids, the Company`s general meeting of shareholders approved the right of an in-dependent foundation under Dutch law, or protective foundation, to exercise a call option pursuant to the call option agreement, upon which preferred shares will be issued by the Company to the protective foundation of up to 100% of the Company’s issued capital held by others than the protective foundation, minus one share. The protective foundation is expected to enter into a finance arrangement with a bank or, subject to applicable restrictions under Dutch law, the protective foundation may request us to provide, or cause the Company’s subsidiaries to 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, since the preference shares are restricted in use and can be can-celled by us as stated above.
In the three and nine months ended September 30, 2020, the Company expensed €15 thousand and €45 thousand, respectively, (2019: €18 thousand, €68 thousand) of ongoing costs to reimburse expenses incurred by the protective foundation.
[11]
8. | Contractual Obligations and Commitments |
September 30, 2020 | December 31, 2019 | |||||||
(in €) | ||||||||
Commitments for minimum payments in relation to non-cancellable operating contracts or services: | ||||||||
Within one year | 24,729,914 | 10,602,651 | ||||||
After one year but not more than five years | 17,882,940 | 13,844,857 | ||||||
More than five years | — | — | ||||||
Total | 42,612,854 | 24,447,508 |
Anticipated future expenses were converted with the exchange rate as of September 30, 2020 (1 Euro = 1.1708 USD), respectively December 31, 2019 (1 Euro = 1.1234 USD).
The increase of our contractual commitments within one year compared to December 31, 2019, is mainly caused by the initiation of the Phase III part in Q3-2020 of our adaptive randomized Phase II/III trial in patients with severe COVID-19 induced pneumonia.
The Group enters contracts in the normal course of business with 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.
9. | Summary of significant accounting policies and other disclosures |
InflaRx N.V. is a Dutch public company with limited liability (naamloze vennootschap) with its corporate seat in Amsterdam, The Netherlands, and is registered in the Commercial Register of The Netherlands Chamber of Commerce Business Register under CCI number 68904312. The Company’s registered office is at Winzerlaer Straße 2 in 07745 Jena, Germany. Since November 10, 2017, InflaRx N.V.’s common shares have been listed on The NASDAQ Global Select Market under the symbol IFRX.
InflaRx is a clinical-stage biopharmaceutical Group focused on applying its proprietary anti-C5a technology to discover and develop first-in-class, potent and specific inhibitors of the complement activation factor known as C5a.
These consolidated financial statements of InflaRx comprise the Company and its wholly-owned subsidiaries InflaRx GmbH, Jena, Germany and InflaRx Pharmaceutical Inc., Ann Arbor, Michigan, United States (together referred to as “the Group”).
InflaRx GmbH is a clinical-stage biopharmaceutical company founded in 2008. In 2017, InflaRx N.V. became the sole shareholder of InflaRx GmbH through the contribution of the subsidiary’s shares to InflaRx N.V. by its existing shareholders in exchange of new shares issued by InflaRx N.V.
These interim condensed consolidated financial statements for the three- and nine-month reporting periods ended September 30, 2020 and 2019 have been prepared in accordance with IAS 34 Interim Financial Reporting. These condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements. Accordingly, this report is to be read in conjunction with the financial statements in our annual report for the year ended December 31, 2019 on Form 20-F.
The interim condensed consolidated financial statements were authorized for issue by the board of directors on October 28, 2020.
The financial statements are presented in Euro (€). Euro is the functional currency of InflaRx GmbH. The functional currency of InflaRx N.V. and InflaRx Pharmaceutical Inc. is U.S. Dollars. All financial information presented in Euro has been rounded. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that precede them or may deviate from other tables.
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The accounting policies adopted are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended December 31, 2019, except for the adoption of new standards effective as of January 1, 2020 as set out below, and except for the change in the accounting estimate of the share options expected to vest as described above. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
For better clarity, the Group presented right-of-use assets separately from property, plant and equipment in the unaudited condensed consolidated statements of financial position as of September 30, 2020 and reclassified comparatives as of December 31, 2019 accordingly. The Group also renamed some line items in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss, Financial Position and Cash Flows to better reflect their substance.
The below listed amendments and interpretations apply for the first time in 2020, but do not have an impact on the condensed consolidated financial statements of the Group:
• | Conceptual Framework Amendments, References to the Conceptual Framework in IFRS Standards (IFRS 2 Share-Based Payment, IFRS 3 Business Combinations, IAS 1 Presentation of Financial Statements, IAS 8 Accounting Policies, IAS 34 Interim Financial Reporting, IAS 37 Provisions, Contingent Liabilities and Contingent Assets, IFRIC 12 Service Concession Arrangements, IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments IFRIC 22 Foreign Currency Transactions and Advance Consideration, SIC 32 Intangible Assets — Web Site Costs,), effective as of January 1, 2020 |
• | IFRS 3 Business Combinations, Definition of a business, effective January 1, 2020 |
• | IAS 39 Financial Instruments: Recognition and Measurement, IFRS 7 Financial Instruments Disclosures, IFRS 9 Financial Instruments, Interest Rate Benchmark Reform, effective January 1, 2020, |
• | IAS 1 Presentation of Financial Statements, IAS 8 Accounting Policies, Definition of Material, as of January 1, 2020 |
COVID-19 Pandemic
The COVID-19 pandemic, which began in December 2019 has spread worldwide and continues to cause many governments to maintain measures to slow the spread of the outbreak through quarantines, travel restrictions, closure of borders and requiring maintenance of physical distance between individuals.
Since the second quarter of 2020 the Company`s employees have been able to work from their home offices or return to the Company’s offices. Our service providers also resumed full operations in the second quarter of 2020, and the recruitment of patients and new clinical trial sites likewise continued in the third quarter.
On June 17, 2020, the Company announced interim results from the first 30 patients treated in the adaptive randomized Phase II/III trial in patients with severe COVID-19 induced pneumonia. On September 14, 2020, we announced the initiation of the Phase III part of the study with the first clinical site open for enrollment in the Netherlands.
Changes to the Board and Management
On July 16, 2020, Jens Holstein resigned as member of the Board and Audit Committee.
On July 29, 2020, Mark Kübler was elected to the Audit Committee.
Effective July 31, 2020, Jason Marks resigned as Chief Legal Officer and General Counsel.
On September 17, 2020, Jordan Zwick was promoted to Senior Vice President, Chief Strategy Officer.
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Changes to the Management
On October 1, 2020, Dr. Thomas Taapken joined InflaRx as Chief Financial Officer.
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