Full Press Release Details
INTERIM CONSOLIDATED
AND NINE MONTHS ENDED
IN CANADIAN DOLLARS)
Interim Consolidated Statements of Financial Position
in Canadian Dollars)
| As at September 30, 2022 | As at December 31, 2021 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents (note 3) | $ | 65,532,440 | $ | 83,899,070 | ||||
| Accounts receivable | 154,118 | 65,739 | ||||||
| Other receivables | 297,957 | 341,388 | ||||||
| Prepaid expenses (note 14) | 1,434,419 | 2,495,141 | ||||||
| Prepaid inventory (note 12(iv)) | 339,051 | 339,051 | ||||||
| Total current assets | 67,757,985 | 87,140,389 | ||||||
| Non-current assets | ||||||||
| Property and equipment (note 4) | 284,831 | 356,493 | ||||||
| Intangible assets (note 5) | 315,913 | 379,246 | ||||||
| Total assets | $ | 68,358,729 | $ | 87,876,128 | ||||
| EQUITY AND LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities (note 14) | $ | 7,653,273 | $ | 4,859,352 | ||||
| Current portion of lease liability (note 6) | 49,316 | 44,708 | ||||||
| Derivative liability (note 7) | 1,943,563 | 6,661,122 | ||||||
| Total current liabilities | 9,646,152 | 11,565,182 | ||||||
| Non-current liabilities | ||||||||
| Lease liability (note 6) | 35,455 | 72,871 | ||||||
| Total liabilities | 9,681,607 | 11,638,053 | ||||||
| Equity | ||||||||
| Share capital (note 8) | 146,927,190 | 142,918,829 | ||||||
| Warrants (note 10) | 3,517,867 | 4,176,780 | ||||||
| Contributed surplus (note 9) | 15,165,557 | 12,660,329 | ||||||
| Deficit | (106,933,492 | ) | (83,517,863 | ) | ||||
| Total equity | 58,677,122 | 76,238,075 | ||||||
| Total equity and liabilities | $ | 68,358,729 | $ | 87,876,128 |
accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these consolidated
financial statements.
on behalf of the Board:
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
(Expressed in Canadian Dollars)
| Three Months Ended September 30, 2022 | Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | |||||||||||||
| Revenue | ||||||||||||||||
| Sales | $ | - | $ | - | $ | - | $ | 78,760 | ||||||||
| Operating expenses (notes 9, 13, 14) | ||||||||||||||||
| General and administration | $ | 8,130,743 | $ | 7,571,515 | $ | 18,896,733 | $ | 18,303,301 | ||||||||
| Research and development | 5,089,423 | 2,592,094 | 13,344,132 | 7,342,587 | ||||||||||||
| Loss before other income (expenses) | (13,220,166 | ) | (10,163,609 | ) | (32,240,865 | ) | (25,567,128 | ) | ||||||||
| Interest income | 389,338 | 35,930 | 652,985 | 78,234 | ||||||||||||
| Gain on foreign exchange | 2,970,896 | 124,612 | 3,290,249 | 15,036 | ||||||||||||
| Change in derivative liability (note 7) | 1,723,442 | - | 4,717,559 | - | ||||||||||||
| Other income | 164,443 | 93,076 | 164,443 | 93,076 | ||||||||||||
| Net loss and comprehensive loss for the period | $ | (7,972,047 | ) | $ | (9,909,991 | ) | $ | (23,415,629 | ) | $ | (25,380,782 | ) | ||||
| Basic and diluted net loss per share (note 11) | $ | (0.13 | ) | $ | (0.23 | ) | $ | (0.38 | ) | $ | (0.65 | ) | ||||
| Weighted average number of common shares outstanding | 62,336,296 | 43,169,772 | 62,066,132 | 39,308,910 |
accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these consolidated
financial statements.
Condensed Interim Consolidated Statements of Cash Flows
in Canadian Dollars)
| Nine Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | |||||||
| Operating activities | ||||||||
| Net loss and comprehensive loss for the period | $ | (23,415,629 | ) | $ | (25,380,782 | ) | ||
| Adjustments for: | ||||||||
| Depreciation of property and equipment | 98,541 | 101,498 | ||||||
| Amortization of intangible assets | 63,333 | 63,333 | ||||||
| Share-based compensation | 4,065,228 | 3,909,056 | ||||||
| Change in derivative liability | (4,717,559 | ) | - | |||||
| Accretion on lease liability | 7,282 | 10,002 | ||||||
| Shares for services | 433,673 | 3,048,365 | ||||||
| Research and development expenses to be settled through warrant exercise | 1,355,775 | 16,063 | ||||||
| Changes in non-cash working capital items: | ||||||||
| Accounts receivable | (88,379 | ) | (65,799 | ) | ||||
| Other receivables | 43,431 | (99,651 | ) | |||||
| Prepaid expenses | 1,060,722 | (1,215,697 | ) | |||||
| Inventory | - | 17,968 | ||||||
| Accounts payable and accrued liabilities | 2,793,921 | 52,278 | ||||||
| Net cash used in operating activities | (18,299,661 | ) | (19,543,366 | ) | ||||
| Investing activities | ||||||||
| Purchase of property and equipment | (26,879 | ) | (12,916 | ) | ||||
| Net cash used in investing activities | (26,879 | ) | (12,916 | ) | ||||
| Financing activities | ||||||||
| Issuance of units | - | 22,003,200 | ||||||
| Share issuance costs | - | (1,378,225 | ) | |||||
| Issuance of warrants, net of issuance costs | - | 8,147 | ||||||
| Proceeds from stock options exercised | - | 2,837,083 | ||||||
| Proceeds from warrants exercised | - | 10,752,218 | ||||||
| Payment of lease liability | (40,090 | ) | (38,937 | ) | ||||
| Net cash provided by (used in) financing activities | (40,090 | ) | 34,183,486 | |||||
| Net change in cash and cash equivalents | (18,366,630 | ) | 14,627,204 | |||||
| Cash and cash equivalents, beginning of period | 83,899,070 | 14,025,187 | ||||||
| Cash and cash equivalents, end of period | $ | 65,532,440 | $ | 28,652,391 |
accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these consolidated
financial statements.
Condensed Interim Consolidated Statements of Changes in Equity
(Expressed in Canadian Dollars)
| Share capital | Contributed | |||||||||||||||||||||||
| Number | Amount | Warrants | surplus | Deficit | Total | |||||||||||||||||||
| Balance, December 31, 2020 | 32,860,291 | $ | 51,923,471 | $ | 4,460,728 | $ | 8,765,773 | $ | (51,879,619 | ) | $ | 13,270,353 | ||||||||||||
| Issuance of units | 6,112,000 | 18,211,000 | 3,792,200 | - | - | 22,003,200 | ||||||||||||||||||
| Issuance of warrants, net of issuance costs | - | - | 8,147 | - | - | 8,147 | ||||||||||||||||||
| Share issuance costs | - | (1,140,691 | ) | (237,534 | ) | - | - | (1,378,225 | ) | |||||||||||||||
| Options exercised | 998,333 | 2,837,083 | - | - | - | 2,837,083 | ||||||||||||||||||
| Fair value of options exercised | - | 1,357,160 | - | (1,357,160 | ) | - | - | |||||||||||||||||
| Warrants exercised | 3,353,123 | 10,607,242 | 144,976 | - | - | 10,752,218 | ||||||||||||||||||
| Fair value of warrants exercised | - | 3,867,107 | (3,867,107 | ) | - | - | - | |||||||||||||||||
| Shares for services | 683,592 | 2,169,176 | - | 879,189 | - | 3,048,365 | ||||||||||||||||||
| Share-based compensation | - | - | - | 3,909,056 | - | 3,909,056 | ||||||||||||||||||
| Fair value of warrants earned | - | - | 16,063 | - | - | 16,063 | ||||||||||||||||||
| Net loss and comprehensive loss for the period | - | - | - | - | (25,380,782 | ) | (25,380,782 | ) | ||||||||||||||||
| Balance, September 30, 2021 | 44,007,339 | $ | 89,831,548 | $ | 4,317,473 | $ | 12,196,858 | $ | (77,260,401 | ) | $ | 29,085,478 | ||||||||||||
| Balance, December 31, 2021 | 61,922,999 | $ | 142,918,829 | $ | 4,176,780 | $ | 12,660,329 | $ | (83,517,863 | ) | $ | 76,238,075 | ||||||||||||
| Warrants exercised | 503,672 | 2,014,688 | (2,014,688 | ) | - | - | - | |||||||||||||||||
| Shares for services | 136,107 | 433,673 | - | - | - | 433,673 | ||||||||||||||||||
| Share-based compensation | - | - | - | 4,065,228 | - | 4,065,228 | ||||||||||||||||||
| Fair value of warrants earned | - | - | 1,355,775 | - | - | 1,355,775 | ||||||||||||||||||
| Performance share units exercised | 1,000,000 | 1,560,000 | - | (1,560,000 | ) | - | - | |||||||||||||||||
| Net loss and comprehensive loss for the period | - | - | - | - | (23,415,629 | ) | (23,415,629 | ) | ||||||||||||||||
| Balance, September 30, 2022 | 63,562,778 | $ | 146,927,190 | $ | 3,517,867 | $ | 15,165,557 | $ | (106,933,492 | ) | $ | 58,677,122 |
accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these consolidated
financial statements.
Cardiol Therapeutics Inc.
Notes to Condensed Interim Consolidated Financial
Three and Nine Months Ended September 30, 2022
(Expressed in Canadian Dollars)
Cardiol Therapeutics Inc.
(the "Corporation") was incorporated under the laws of the Province of Ontario on January 19, 2017. The Corporation's
registered and legal office is located at 2265 Upper Middle Rd. E., Suite 602, Oakville, Ontario, L6H 0G5, Canada.
The Corporation is a clinical-stage
life sciences company focused on the research and clinical development of anti-inflammatory and anti-fibrotic therapies for the
treatment of heart diseases. The Corporation's lead product, CardiolRx , is a pharmaceutically manufactured oral cannabidiol
formulation that is being clinically developed for use in heart diseases. It is recognized that cannabidiol inhibits activation
of the inflammasome pathway, an intracellular process known to play an important role in the inflammation and fibrosis associated
with myocarditis, pericarditis, and heart failure.
Corporation has received Investigational New Drug Application ("IND") authorization from the United States Food and Drug
Administration ("FDA") to conduct a Phase II multi-national, randomized, double-blind, placebo-controlled trial designed
to evaluate the efficacy and safety of CardiolRx in acute myocarditis (the "ARCHER" trial). This disease remains
an important cause of acute and fulminant heart failure and is a leading cause of sudden cardiac death in people under 35 years
The Corporation has also
received an IND authorization from the FDA to conduct a Phase II open-label pilot study designed to evaluate the tolerance and
safety of CardiolRx in patients with recurrent pericarditis. This disease is associated with symptoms including debilitating chest
pain, shortness of breath, and fatigue, and results in physical limitations, reduced quality of life, emergency department visits,
and hospitalizations.
In addition, the Corporation
is developing a novel subcutaneously administered cannabidiol drug formulation targeting the inflammation and fibrosis that is
associated with the development and progression of heart failure. Heart failure affects 26 million people in the developed world
and remains a leading cause of death and hospitalization, with associated annual healthcare costs in the U.S. alone exceeding $30
On December 20, 2018, the
Corporation completed its initial public offering (the "IPO") on the Toronto Stock Exchange (the "TSX"). As
a result, the Corporation's common shares commenced trading on that date on the TSX under the symbol "CRDL", and on May
12, 2021, warrants commenced trading under the symbol "CRDL.WT.A". On August 10, 2021, the Corporation's common shares
commenced trading on the Nasdaq Capital Market ("Nasdaq") under the symbol "CRDL".
Statement of compliance
The Corporation applies
International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB")
and interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC"). These unaudited
condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34,
Interim Financial Reporting. Accordingly, they do not include all of the information required for full annual consolidated financial
statements required by IFRS as issued by IASB and interpretations by IFRIC.
The policies applied in
these unaudited condensed interim consolidated financial statements are based on IFRSs issued and outstanding as of November 9,
2022, the date the Board of Directors approved the statements. The same accounting policies and methods of computation are followed
in these unaudited condensed interim consolidated financial statements as compared with the most recent annual consolidated financial
statements as at and for the year ended December 31, 2021, other than as noted below.
Cardiol Therapeutics Inc.
Notes to Condensed Interim Consolidated Financial
Three and Nine Months Ended September 30, 2022
(Expressed in Canadian Dollars)
Significant accounting policies (continued)
Statement of compliance (continued)
Any subsequent changes to
IFRS that are given effect in the Corporation's annual consolidated financial statements for the year ending December 31,
2022, could result in restatement of these unaudited condensed interim consolidated financial statements.
Basis of consolidation
unaudited condensed interim consolidated financial statements consolidate the accounts of the Corporation and its wholly owned
subsidiary, Cardiol Therapeutics USA Inc. ("Cardiol USA"), incorporated under the laws of Delaware. Control exists when
the Corporation has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain
benefits from its activities. The subsidiary is fully consolidated from the date on which control is obtained by the Corporation
and is de-consolidated from the date control ceases. Intercompany transactions and balances are eliminated.
Cash and cash equivalents
include a cashable Guaranteed Investment Certificate totaling $61,568 earning interest of 0.5% per annum and maturing on December
4, 2022 (December 31, 2021 - cashable Guaranteed Investment Certificate totaling $61,568 earning interest of 0.5% per annum and
maturing on December 4, 2022). The Guaranteed Investment Certificate may be redeemed prior to maturity without penalty.
| Cost | Right-of- use asset | Equipment | Leasehold improvements | Office equipment | Computer equipment | Total | ||||||||||||||||||
| Balance, December 31, 2020 | $ | 200,319 | $ | 123,058 | $ | 237,248 | $ | 65,716 | $ | 74,619 | $ | 700,960 | ||||||||||||
| Additions | - | 7,712 | - | - | 5,204 | 12,916 | ||||||||||||||||||
| Balance, December 31, 2021 | 200,319 | 130,770 | 237,248 | $ | 65,716 | $ | 79,823 | $ | 713,876 | |||||||||||||||
| Additions | - | - | - | - | 26,879 | 26,879 | ||||||||||||||||||
| Balance, September 30, 2022 | $ | 200,319 | $ | 130,770 | $ | 237,248 | $ | 65,716 | $ | 106,702 | $ | 740,755 |
| Accumulated Depreciation | Right-of- use asset | Equipment | Leasehold improvements | Office equipment | Computer equipment | Total | ||||||||||||||||||
| Balance, December 31, 2020 | $ | 63,441 | $ | 53,052 | $ | 55,032 | $ | 15,644 | $ | 34,237 | $ | 221,406 | ||||||||||||
| Depreciation for the year | 40,068 | 22,159 | 50,840 | 10,015 | 12,895 | 135,977 | ||||||||||||||||||
| Balance, December 31, 2021 | $ | 103,509 | $ | 75,211 | $ | 105,872 | $ | 25,659 | $ | 47,132 | $ | 357,383 | ||||||||||||
| Depreciation for the period | 30,051 | 12,501 | 38,130 | 6,009 | 11,850 | 98,541 | ||||||||||||||||||
| Balance, September 30, 2022 | $ | 133,560 | $ | 87,712 | $ | 144,002 | $ | 31,668 | $ | 58,982 | $ | 455,924 |
| Carrying value | Right-of- use asset | Equipment | Leasehold improvements | Office equipment | Computer equipment | Total | ||||||||||||||||||
| Balance, December 31, 2021 | $ | 96,810 | $ | 55,559 | $ | 131,376 | $ | 40,057 | $ | 32,691 | $ | 356,493 | ||||||||||||
| Balance, September 30, 2022 | $ | 66,759 | $ | 43,058 | $ | 93,246 | $ | 34,048 | $ | 47,720 | $ | 284,831 |
Cardiol Therapeutics Inc.
Notes to Condensed Interim Consolidated Financial
Three and Nine Months Ended September 30, 2022
(Expressed in Canadian Dollars)
| Cost | Exclusive global license agreement | ||||
| Balance, December 31, 2020, December 31, 2021, and September 30, 2022 | $ | 767,228 |
| Accumulated Amortization | Exclusive global license agreement | |||
| Balance, December 31, 2020 | $ | 303,538 | ||
| Amortization for the year | 84,444 | |||
| Balance, December 31, 2021 | $ | 387,982 | ||
| Amortization for the period | 63,333 | |||
| Balance, September 30, 2022 | $ | 451,315 |
| Carrying Value | Exclusive global license agreement | ||||
| Balance, December 31, 2021 | $ | 379,246 | |||
| Balance, September 30, 2022 | $ | 315,913 |
Exclusive global agreement ("Meros License
In 2017, the Corporation
was granted by Meros Polymers Inc. ("Meros") the sole, exclusive, irrevocable license to patented nanotechnologies
for use with any drugs to diagnose, or treat, cardiovascular disease, cardiopulmonary disease, and cardiac arrhythmias. Meros is