Full Press Release Details
INTERIM CONSOLIDATED
AND SIX MONTHS ENDED
(EXPRESSED IN CANADIAN
Cardiol Therapeutics Inc.
Condensed Interim Consolidated Statements
of Financial Position
(Expressed in Canadian Dollars)
| As at June 30, 2022 | As at December 31, 2021 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents (note 3) | $ | 70,453,893 | $ | 83,899,070 | ||||
| Accounts receivable | 125,380 | 65,739 | ||||||
| Other receivables | 278,243 | 341,388 | ||||||
| Prepaid expenses (note 14) | 2,422,470 | 2,495,141 | ||||||
| Prepaid inventory (note 12(iv)) | 339,051 | 339,051 | ||||||
| Total current assets | 73,619,037 | 87,140,389 | ||||||
| Non-current assets | ||||||||
| Property and equipment (note 4) | 308,907 | 356,493 | ||||||
| Intangible assets (note 5) | 337,024 | 379,246 | ||||||
| Total assets | $ | 74,264,968 | $ | 87,876,128 | ||||
| EQUITY AND LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities (note 14) | $ | 7,649,866 | $ | 4,859,352 | ||||
| Current portion of lease liability (note 6) | 48,210 | 44,708 | ||||||
| Derivative liability (note 7) | 3,667,005 | 6,661,122 | ||||||
| Total current liabilities | 11,365,081 | 11,565,182 | ||||||
| Non-current liabilities | ||||||||
| Lease liability (note 6) | 48,194 | 72,871 | ||||||
| Total liabilities | 11,413,275 | 11,638,053 | ||||||
| Equity | ||||||||
| Share capital (note 8) | 143,136,097 | 142,918,829 | ||||||
| Warrants (note 10) | 5,532,555 | 4,176,780 | ||||||
| Contributed surplus (note 9) | 13,144,486 | 12,660,329 | ||||||
| Deficit | (98,961,445 | ) | (83,517,863 | ) | ||||
| Total equity | 62,851,693 | 76,238,075 | ||||||
| Total equity and liabilities | $ | 74,264,968 | $ | 87,876,128 |
The accompanying notes to
the unaudited condensed interim consolidated financial statements are an integral part of these consolidated financial statements.
Commitments (notes 5 and 12)
Subsequent event (note 16)
Approved on behalf of
Cardiol Therapeutics
Condensed Interim Consolidated
Statements of Loss and Comprehensive Loss
(Expressed in Canadian
| Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | |||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenue | ||||||||||||||||
| Sales | $ | - | $ | 78,760 | $ | - | $ | 78,760 | ||||||||
| Operating expenses (notes 9, 13, 14) | ||||||||||||||||
| General and administration | $ | 4,825,039 | $ | 4,430,388 | $ | 10,765,990 | $ | 10,731,786 | ||||||||
| Research and development | 4,407,182 | 2,071,681 | 8,254,709 | 4,750,493 | ||||||||||||
| Loss before other income (expenses) | (9,232,221 | ) | (6,423,309 | ) | (19,020,699 | ) | (15,403,519 | ) | ||||||||
| Interest income | 191,336 | 25,480 | 263,647 | 42,304 | ||||||||||||
| Gain (loss) on foreign exchange | 1,689,797 | (163,114 | ) | 319,353 | (109,576 | ) | ||||||||||
| Change in derivative liability (note 7) | 861,600 | - | 2,994,117 | - | ||||||||||||
| Net loss and comprehensive loss for the period | $ | (6,489,488 | ) | $ | (6,560,943 | ) | $ | (15,443,582 | ) | $ | (15,470,791 | ) | ||||
| Basic and diluted net loss per share (note 11) | $ | (0.10 | ) | $ | (0.16 | ) | $ | (0.25 | ) | $ | (0.41 | ) | ||||
| Weighted average number of common shares outstanding | 61,932,362 | 40,057,578 | 61,928,811 | 37,346,482 |
notes to the unaudited condensed interim consolidated financial statements are an integral part of these consolidated financial statements.
Cardiol Therapeutics Inc.
Condensed Interim Consolidated Statements
(Expressed in Canadian Dollars)
| Six Months | Six Months | |||||||
| Ended | Ended | |||||||
| June 30, | June 30, | |||||||
| 2022 | 2021 | |||||||
| Operating activities | ||||||||
| Net loss and comprehensive loss for the period | $ | (15,443,582 | ) | $ | (15,470,791 | ) | ||
| Adjustments for: | ||||||||
| Depreciation of property and equipment | 65,177 | 67,019 | ||||||
| Amortization of intangible assets | 42,222 | 42,222 | ||||||
| Share-based compensation | 484,157 | 2,967,945 | ||||||
| Change in derivative liability | (2,994,117 | ) | - | |||||
| Accretion on lease liability | 5,071 | 6,850 | ||||||
| Shares for services | 217,268 | 1,092,257 | ||||||
| Research and development expenses to be settled through warrant exercise | 1,355,775 | - | ||||||
| Changes in non-cash working capital items: | ||||||||
| Accounts receivable | (59,641 | ) | (107,731 | ) | ||||
| Other receivables | 63,145 | (356,530 | ) | |||||
| Prepaid expenses | 72,671 | (1,825,400 | ) | |||||
| Inventory | - | 17,968 | ||||||
| Accounts payable and accrued liabilities | 2,790,514 | 408,541 | ||||||
| Net cash used in operating activities | (13,401,340 | ) | (13,157,650 | ) | ||||
| Investing activities | ||||||||
| Purchase of property and equipment | (17,591 | ) | - | |||||
| Net cash used in investing activities | (17,591 | ) | - | |||||
| 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 | - | 2,708,249 | ||||||
| Proceeds from warrants exercised | - | 8,536,288 | ||||||
| Payment of lease liability | (26,246 | ) | (25,958 | ) | ||||
| Net cash provided by (used in) financing activities | (26,246 | ) | 31,851,701 | |||||
| Net change in cash and cash equivalents | (13,445,177 | ) | 18,694,051 | |||||
| Cash and cash equivalents, beginning of period | 83,899,070 | 14,025,187 | ||||||
| Cash and cash equivalents, end of period | $ | 70,453,893 | $ | 32,719,238 |
notes to the unaudited condensed interim consolidated financial statements are an integral part of these consolidated financial statements.
Interim Consolidated Statements of Changes in Equity
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 | 956,666 | 2,708,249 | - | - | - | 2,708,249 | ||||||||||||||||||
| Fair value of options exercised | - | 1,262,680 | - | (1,262,680 | ) | - | - | |||||||||||||||||
| Warrants exercised | 2,672,987 | 8,391,527 | 144,761 | - | - | 8,536,288 | ||||||||||||||||||
| Fair value of warrants exercised | - | 3,078,096 | (3,078,096 | ) | - | - | - | |||||||||||||||||
| Shares for services | 344,650 | 1,092,257 | - | - | - | 1,092,257 | ||||||||||||||||||
| Share-based compensation | - | - | - | 2,967,945 | - | 2,967,945 | ||||||||||||||||||
| Net loss and comprehensive loss for the period | - | - | - | - | (15,470,791 | ) | (15,470,791 | ) | ||||||||||||||||
| Balance, June 30, 2021 | 42,946,594 | $ | 85,526,589 | $ | 5,090,206 | $ | 10,471,038 | $ | (67,350,410 | ) | $ | 33,737,423 | ||||||||||||
| Balance, December 31, 2021 | 61,922,999 | $ | 142,918,829 | $ | 4,176,780 | $ | 12,660,329 | $ | (83,517,863 | ) | $ | 76,238,075 | ||||||||||||
| Shares for services | 17,000 | 217,268 | - | - | - | 217,268 | ||||||||||||||||||
| Share-based compensation | - | - | - | 484,157 | - | 484,157 | ||||||||||||||||||
| Fair value of warrants earned | - | - | 1,355,775 | - | - | 1,355,775 | ||||||||||||||||||
| Net loss and comprehensive loss for the period | - | - | - | - | (15,443,582 | ) | (15,443,582 | ) | ||||||||||||||||
| Balance, June 30, 2022 | 61,939,999 | $ | 143,136,097 | $ | 5,532,555 | $ | 13,144,486 | $ | (98,961,445 | ) | $ | 62,851,693 |
The 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 Six Months Ended June 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 therapy for the treatment
of cardiovascular disease ("CVD"). The Corporation's lead product, CardiolRx, is a pharmaceutically produced oral cannabidiol
formulation that is being clinically developed for use in cardiovascular medicine. CardiolRx is currently being evaluated in a Phase
II/III multi-national, randomized, double-blind, placebo-controlled study (the "LANCER" trial). LANCER is designed
to evaluate the efficacy and safety of CardiolRx as a cardioprotective therapy to reduce major cardiovascular and respiratory events
in patients hospitalized with COVID-19 who have a prior history of, or risk factors for, CVD, and to investigate the influence CardiolRx
has on symptomatic status and key biomarkers associated with heart disease.
The Corporation has also
received an Investigational New Drug Application ("IND") authorization from the 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 less than 35 years of age.
The Corporation has also
received an IND authorization by 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.
In addition, the Corporation
is developing a subcutaneous formulation of CardiolRx for the treatment of inflammation and fibrosis in the heart 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 billion.
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 August 10, 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 Six Months Ended June 30, 2022
(Expressed in Canadian Dollars)
Significant accounting policies (continued)
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 | - | - | - | - | 17,591 | 17,591 | ||||||||||||||||||
| Balance, June 30, 2022 | $ | 200,319 | $ | 130,770 | $ | 237,248 | $ | 65,716 | $ | 97,414 | $ | 731,467 |
| 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 | 20,034 | 8,334 | 25,420 | 4,006 | 7,383 | 65,177 | ||||||||||||||||||
| Balance, June 30, 2022 | $ | 123,543 | $ | 83,545 | $ | 131,292 | $ | 29,665 | $ | 54,515 | $ | 422,560 |
| 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, June 30, 2022 | $ | 76,776 | $ | 47,225 | $ | 105,956 | $ | 36,051 | $ | 42,899 | $ | 308,907 |
Cardiol Therapeutics Inc.
Notes to Condensed Interim Consolidated Financial
Three and Six Months Ended June 30, 2022
(Expressed in Canadian Dollars)
| Cost | Exclusive global license agreement | |||
| Balance, December 31, 2020, December 31, 2021, and June 30, 2022 | $ | 767,228 |