Full Press Release Details
CARDIOL THERAPEUTICS
CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2022
(EXPRESSED IN CANADIAN DOLLARS)
Cardiol Therapeutics
Condensed Interim Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)
| As at March 31, 2022 | As at December 31, 2021 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents (note 3) | $ | 74,843,859 | $ | 83,899,070 | ||||
| Accounts receivable | 88,162 | 65,739 | ||||||
| Other receivables | 397,839 | 341,388 | ||||||
| Prepaid expenses (note 14) | 3,065,833 | 2,495,141 | ||||||
| Prepaid inventory (note 12(iv)) | 339,051 | 339,051 | ||||||
| Total current assets | 78,734,744 | 87,140,389 | ||||||
| Non-current assets | ||||||||
| Property and equipment (note 4) | 339,447 | 356,493 | ||||||
| Intangible assets (note 5) | 358,135 | 379,246 | ||||||
| Total assets | $ | 79,432,326 | $ | 87,876,128 | ||||
| EQUITY AND LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities (note 14) | $ | 5,582,467 | $ | 4,859,352 | ||||
| Current portion of lease liability (note 6) | 46,576 | 44,708 | ||||||
| Derivative liability (note 7) | 4,528,605 | 6,661,122 | ||||||
| Total current liabilities | 10,157,648 | 11,565,182 | ||||||
| Non-current liabilities | ||||||||
| Lease liability (note 6) | 60,662 | 72,871 | ||||||
| Total liabilities | 10,218,310 | 11,638,053 | ||||||
| Equity | ||||||||
| Share capital (note 8) | 143,052,364 | 142,918,829 | ||||||
| Warrants (note 10) | 4,906,887 | 4,176,780 | ||||||
| Contributed surplus (note 9) | 13,726,723 | 12,660,329 | ||||||
| Deficit | (92,471,958 | ) | (83,517,863 | ) | ||||
| Total equity | 69,214,016 | 76,238,075 | ||||||
| Total equity and liabilities | $ | 79,432,326 | $ | 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)
Approved on behalf of the Board:
Cardiol Therapeutics
Condensed Interim Consolidated Statements of Loss and Comprehensive
(Expressed in Canadian Dollars)
| Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | |||||||
| Operating expenses (notes 9, 13, 14) | ||||||||
| General and administration | $ | 5,940,952 | $ | 6,301,398 | ||||
| Research and development | 3,847,527 | 2,678,812 | ||||||
| Loss before other income (expenses) | (9,788,479 | ) | (8,980,210 | ) | ||||
| Interest income | 72,311 | 16,824 | ||||||
| Gain (loss) on foreign exchange | (1,370,444 | ) | 53,538 | |||||
| Change in derivative liability (note 7) | 2,132,517 | - | ||||||
| Net loss and comprehensive loss for the period | $ | (8,954,095 | ) | $ | (8,909,848 | ) | ||
| Basic and diluted net loss per share (note 11) | $ | (0.14 | ) | $ | (0.26 | ) | ||
| Weighted average number of common shares outstanding | 61,925,221 | 34,605,264 |
The accompanying notes to the unaudited condensed interim consolidated
financial statements are an integral part of these consolidated financial statements.
Cardiol Therapeutics
Condensed Interim Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)
| Three Months | Three Months | |||||||
| Ended | Ended | |||||||
| March 31, | March 31, | |||||||
| 2022 | 2021 | |||||||
| Operating activities | ||||||||
| Net loss and comprehensive loss for the period | $ | (8,954,095 | ) | $ | (8,909,848 | ) | ||
| Adjustments for: | ||||||||
| Depreciation of property and equipment | 32,509 | 33,509 | ||||||
| Amortization of intangible assets | 21,111 | 21,111 | ||||||
| Share-based compensation | 1,066,394 | 2,141,292 | ||||||
| Change in derivative liability | (2,132,517 | ) | - | |||||
| Accretion on lease liability | 2,638 | 3,513 | ||||||
| Shares for services | 133,535 | 660,875 | ||||||
| Research and development expenses to be settled through warrant exercise | 730,107 | - | ||||||
| Changes in non-cash working capital items: | ||||||||
| Accounts receivable | (22,423 | ) | (38,865 | ) | ||||
| Other receivables | (56,451 | ) | (57,528 | ) | ||||
| Prepaid expenses | (570,692 | ) | (1,184,209 | ) | ||||
| Accounts payable and accrued liabilities | 723,115 | 245,861 | ||||||
| Net cash used in operating activities | (9,026,769 | ) | (7,084,289 | ) | ||||
| Investing activities | ||||||||
| Purchase of property and equipment | (15,463 | ) | - | |||||
| Net cash used in investing activities | (15,463 | ) | - | |||||
| Financing activities | ||||||||
| Proceeds from stock options exercised | - | 2,604,649 | ||||||
| Proceeds from warrants exercised | - | 8,471,288 | ||||||
| Payment of lease liability | (12,979 | ) | (12,979 | ) | ||||
| Net cash provided by (used in) financing activities | (12,979 | ) | 11,062,958 | |||||
| Net change in cash and cash equivalents | (9,055,211 | ) | 3,978,669 | |||||
| Cash and cash equivalents, beginning of period | 83,899,070 | 14,025,187 | ||||||
| Cash and cash equivalents, end of period | $ | 74,843,859 | $ | 18,003,856 |
The accompanying notes to the unaudited condensed interim consolidated
financial statements are an integral part of these consolidated financial statements.
Cardiol Therapeutics
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 | ||||||||||||
| Options exercised | 916,666 | 2,604,649 | - | - | - | 2,604,649 | ||||||||||||||||||
| Fair value of options exercised | - | 1,182,353 | - | (1,182,353 | ) | - | - | |||||||||||||||||
| Warrants exercised | 2,652,987 | 8,326,527 | 144,761 | - | - | 8,471,288 | ||||||||||||||||||
| Fair value of warrants exercised | - | 3,056,045 | (3,056,045 | ) | - | - | - | |||||||||||||||||
| Shares for services | 160,650 | 660,875 | - | - | - | 660,875 | ||||||||||||||||||
| Share-based compensation | - | - | - | 2,141,292 | - | 2,141,292 | ||||||||||||||||||
| Net loss and comprehensive loss for the period | - | - | - | - | (8,909,848 | ) | (8,909,848 | ) | ||||||||||||||||
| Balance, March 31, 2021 | 36,590,594 | $ | 67,753,920 | $ | 1,549,444 | $ | 9,724,712 | $ | (60,789,467 | ) | $ | 18,238,609 | ||||||||||||
| 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 | 2,500 | 133,535 | - | - | - | 133,535 | ||||||||||||||||||
| Share-based compensation | - | - | - | 1,066,394 | - | 1,066,394 | ||||||||||||||||||
| Fair value of warrants earned | - | - | 730,107 | - | - | 730,107 | ||||||||||||||||||
| Net loss and comprehensive loss for the period | - | - | - | - | (8,954,095 | ) | (8,954,095 | ) | ||||||||||||||||
| Balance, March 31, 2022 | 61,925,499 | $ | 143,052,364 | $ | 4,906,887 | $ | 13,726,723 | $ | (92,471,958 | ) | $ | 69,214,016 |
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 Statements
Months Ended March 31, 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- fibrotic and anti-inflammatory 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 key biomarkers associated
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. 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.
In addition, the Corporation is developing a subcutaneous
formulation of CardiolRx for the treatment of fibrosis and inflammation 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 May 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. 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
Cardiol Therapeutics Inc.
Notes to Condensed Interim Consolidated Financial Statements
Months Ended March 31, 2022
(Expressed in Canadian Dollars)
Basis of consolidation
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 | - | - | - | - | 15,463 | 15,463 | |||||||||||||||||
| Balance, March 31, 2022 | $ | 200,319 | $ | 130,770 | $ | 237,248 | $ | 65,716 | $ | 95,286 | $ | 729,339 | |||||||||||
| 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 | 10,017 | 4,167 | 12,710 | 2,003 | 3,612 | 32,509 | |||||||||||||||||
| Balance, March 31, 2022 | $ | 113,526 | $ | 79,378 | $ | 118,582 | $ | 27,662 | $ | 50,744 | $ | 389,892 | |||||||||||
| 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, March 31, 2022 | $ | 86,793 | $ | 51,392 | $ | 118,666 | $ | 38,054 | $ | 44,542 | $ | 339,447 |
Cardiol Therapeutics Inc.
Notes to Condensed Interim Consolidated Financial Statements
Months Ended March 31, 2022
(Expressed in Canadian Dollars)
| Cost | Exclusive global license agreement | |||
| Balance, December 31, 2020, December 31, 2021, and March 31, 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 | 21,111 | |||
| Balance, March 31, 2022 | $ | 409,093 | ||
| Carrying Value | Exclusive global license agreement | |||
| Balance, December 31, 2021 | $ | 379,246 | ||
| Balance, March 31, 2022 | $ | 358,135 |
Exclusive global agreement ("Meros License Agreement")
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 focused on the advancement of nanotechnologies
developed at the University of Alberta.
Under the Meros License Agreement, Cardiol agreed
to certain milestones and milestone payments, including the following: (i) payment of $100,000 upon enrolling the first patient in
a Phase IIB clinical trial designed to investigate the safety and indications of efficacy of one of the licensed technologies; (ii) payment
of $500,000 upon enrolling the first patient in a Pivotal Phase III clinical trial designed to investigate the safety and efficacy of