Full Press Release Details
CARDIOL THERAPEUTICS INC.
CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2023
(EXPRESSED IN CANADIAN DOLLARS)
Cardiol Therapeutics Inc.
Condensed Interim Consolidated Statements
of Financial Position
(Expressed in Canadian Dollars)
| As at March 31, 2023 | As at December 31, 2022 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents (note 3) | $ | 49,467,863 | $ | 59,469,868 | ||||
| Accounts receivable | 197,826 | 209,923 | ||||||
| Other receivables | 210,337 | 270,274 | ||||||
| Prepaid expenses (note 14) | 2,232,769 | 1,487,913 | ||||||
| Total current assets | 52,108,795 | 61,437,978 | ||||||
| Non-current assets | ||||||||
| Property and equipment (note 4) | 302,782 | 295,738 | ||||||
| Intangible assets (note 5) | 273,691 | 294,802 | ||||||
| Total assets | $ | 52,685,268 | $ | 62,028,518 | ||||
| EQUITY AND LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities (note 14) | $ | 6,723,262 | $ | 9,334,158 | ||||
| Current portion of lease liability (note 6) | 51,573 | 50,447 | ||||||
| Derivative liability (note 7) | 345,820 | 419,901 | ||||||
| Total current liabilities | 7,120,655 | 9,804,506 | ||||||
| Non-current liabilities | ||||||||
| Lease liability (note 6) | 9,089 | 22,424 | ||||||
| Total liabilities | 7,129,744 | 9,826,930 | ||||||
| Equity | ||||||||
| Share capital (note 8) | 147,632,348 | 147,545,399 | ||||||
| Warrants (note 10) | 3,517,867 | 3,517,867 | ||||||
| Contributed surplus | 15,943,155 | 15,586,832 | ||||||
| Deficit | (121,537,846 | ) | (114,448,510 | ) | ||||
| Total equity | 45,555,524 | 52,201,588 | ||||||
| Total equity and liabilities | $ | 52,685,268 | $ | 62,028,518 |
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 Inc.
Condensed Interim Consolidated
Statements of Loss and Comprehensive Loss
(Expressed in Canadian Dollars)
| Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | |||||||
| Operating expenses (notes 9, 13, 14) | ||||||||
| General and administration | $ | 3,658,440 | $ | 5,940,952 | ||||
| Research and development | 4,127,696 | 3,847,527 | ||||||
| Loss before other income | (7,786,136 | ) | (9,788,479 | ) | ||||
| Interest income | 545,927 | 72,311 | ||||||
| Gain (loss) on foreign exchange | 76,792 | (1,370,444 | ) | |||||
| Change in derivative liability (note 7) | 74,081 | 2,132,517 | ||||||
| Net loss and comprehensive loss for the period | $ | (7,089,336 | ) | $ | (8,954,095 | ) | ||
| Basic and diluted net loss per share (note 11) | $ | (0.11 | ) | $ | (0.14 | ) | ||
| Weighted average number of common shares outstanding | 64,091,647 | 61,925,221 |
The accompanying 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 of Cash Flows
(Expressed in Canadian Dollars)
| Three Months | Three Months | |||||||
| Ended | Ended | |||||||
| March 31, | March 31, | |||||||
| 2023 | 2022 | |||||||
| Operating activities | ||||||||
| Net loss and comprehensive loss for the period | $ | (7,089,336 | ) | $ | (8,954,095 | ) | ||
| Adjustments for: | ||||||||
| Depreciation of property and equipment | 37,094 | 32,509 | ||||||
| Amortization of intangible assets | 21,111 | 21,111 | ||||||
| Share-based compensation | 426,823 | 1,066,394 | ||||||
| Change in derivative liability | (74,081 | ) | (2,132,517 | ) | ||||
| Unrealized foreign exchange gain on cash | (2,760 | ) | (1,387,976 | ) | ||||
| Accretion on lease liability | 1,635 | 2,638 | ||||||
| Shares for services | 16,449 | 133,535 | ||||||
| Research and development expenses settled through warrant exercise | - | 730,107 | ||||||
| Changes in non-cash working capital items: | ||||||||
| Accounts receivable | 12,097 | (22,423 | ) | |||||
| Other receivables | 59,937 | (56,451 | ) | |||||
| Prepaid expenses | (744,856 | ) | (570,692 | ) | ||||
| Accounts payable and accrued liabilities | (2,610,896 | ) | 723,115 | |||||
| Net cash used in operating activities | (9,946,783 | ) | (10,414,745 | ) | ||||
| Investing activities | ||||||||
| Purchase of property and equipment | (44,138 | ) | (15,463 | ) | ||||
| Net cash used in investing activities | (44,138 | ) | (15,463 | ) | ||||
| Financing activities | ||||||||
| Payment of lease liability | (13,844 | ) | (12,979 | ) | ||||
| Net cash used in financing activities | (13,844 | ) | (12,979 | ) | ||||
| Net change in cash and cash equivalents | (10,004,765 | ) | (10,443,187 | ) | ||||
| Cash and cash equivalents, beginning of period | 59,469,868 | 83,899,070 | ||||||
| Impact of foreign exchange on cash and cash equivalents | 2,760 | 1,387,976 | ||||||
| Cash and cash equivalents, end of period | $ | 49,467,863 | $ | 74,843,859 |
The accompanying 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 of Changes
(Expressed in Canadian
| Share capital | Contributed | |||||||||||||||||||||||
| Number | Amount | Warrants | surplus | Deficit | Total | |||||||||||||||||||
| 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 (note 9) | - | - | - | 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 | ||||||||||||
| Balance, December 31, 2022 | 64,042,536 | $ | 147,545,399 | $ | 3,517,867 | $ | 15,586,832 | $ | (114,448,510 | ) | $ | 52,201,588 | ||||||||||||
| Restricted share units exercised | 50,000 | 70,500 | - | (70,500 | ) | - | - | |||||||||||||||||
| Shares for services | 5,000 | 16,449 | - | - | - | 16,449 | ||||||||||||||||||
| Share-based compensation (note 9) | - | - | - | 426,823 | - | 426,823 | ||||||||||||||||||
| Net loss and comprehensive loss for the period | - | - | - | - | (7,089,336 | ) | (7,089,336 | ) | ||||||||||||||||
| Balance, March 31, 2023 | 64,097,536 | $ | 147,632,348 | $ | 3,517,867 | $ | 15,943,155 | $ | (121,537,846 | ) | $ | 45,555,524 |
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
Three Months Ended March
(Expressed in Canadian
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 disease. The Corporation's lead drug candidate, CardiolRx (cannabidiol) oral solution, is pharmaceutically manufactured
and in clinical development for use in the treatment of heart disease.
On December 20, 2018, the Corporation
completed its initial public offering 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
These unaudited condensed interim
consolidated financial statements have been prepared in accordance with 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.
These unaudited condensed interim
consolidated financial statements have been prepared on a historical cost basis. In addition, these unaudited condensed interim consolidated
have been prepared using the accrual basis of accounting except for cash flow information.
The policies applied in these
unaudited condensed interim consolidated financial statements are based on IFRSs issued and outstanding as of May 12, 2023, 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, 2022.
Any subsequent changes to IFRS
that are given effect in the Corporation's annual consolidated financial statements for the year ending December 31, 2023, could
result in restatement of these unaudited condensed interim consolidated financial statements.
Cardiol Therapeutics Inc.
Notes to Condensed Interim
Consolidated Financial Statements
Three Months Ended March
(Expressed in Canadian
Interest earned on cash and cash
equivalents for the three months ended March 31, 2023 amounted to $545,927 (three months ended March 31, 2022 - $72,311). As at December
31, 2022, Cash and cash equivalents included a cashable Guaranteed Investment Certificate totaling $61,875 earning interest of 0.5% per
annum and maturing on December 4, 2023. The Guaranteed Investment Certificate was redeemed prior to maturity without penalty during the
three months ended March 31, 2023.
| Cost | Right-of- use asset | Equipment | Leasehold improvements | Office equipment | Computer equipment | Total | ||||||||||||||||||
| Balance, December 31, 2021 | $ | 200,319 | $ | 130,770 | $ | 237,248 | $ | 65,716 | $ | 79,823 | $ | 713,876 | ||||||||||||
| Additions | - | 41,094 | - | 1,148 | 32,467 | 74,709 | ||||||||||||||||||
| Balance, December 31, 2022 | 200,319 | 171,864 | 237,248 | $ | 66,864 | $ | 112,290 | $ | 788,585 | |||||||||||||||
| Additions | - | 44,138 | - | - | - | 44,138 | ||||||||||||||||||
| Balance, March 31, 2023 | $ | 200,319 | $ | 216,002 | $ | 237,248 | $ | 66,864 | $ | 112,290 | $ | 832,723 |
| Accumulated Depreciation | Right-of- use asset | Equipment | Leasehold improvements | Office equipment | Computer equipment | Total | ||||||||||||||||||
| Balance, December 31, 2021 | $ | 103,509 | $ | 75,211 | $ | 105,872 | $ | 25,659 | $ | 47,132 | $ | 357,383 | ||||||||||||
| Depreciation for the year | 40,068 | 19,750 | 50,840 | 8,069 | 16,737 | 135,464 | ||||||||||||||||||
| Balance, December 31, 2022 | $ | 143,577 | $ | 94,961 | $ | 156,712 | $ | 33,728 | $ | 63,869 | $ | 492,847 | ||||||||||||
| Depreciation for the period | 10,017 | 9,078 | 12,710 | 1,657 | 3,632 | 37,094 | ||||||||||||||||||
| Balance, March 31, 2023 | $ | 153,594 | $ | 104,039 | $ | 169,422 | $ | 35,385 | $ | 67,501 | $ | 529,941 |
| Carrying value | Right-of- use asset | Equipment | Leasehold improvements | Office equipment | Computer equipment | Total | ||||||||||||||||||
| Balance, December 31, 2022 | $ | 56,742 | $ | 76,903 | $ | 80,536 | $ | 33,136 | $ | 48,421 | $ | 295,738 | ||||||||||||
| Balance, March 31, 2023 | $ | 46,725 | $ | 111,963 | $ | 67,826 | $ | 31,479 | $ | 44,789 | $ | 302,782 |
Cardiol Therapeutics Inc.
Notes to Condensed Interim
Consolidated Financial Statements
Three Months Ended March
(Expressed in Canadian
| Cost | Exclusive global license agreement | |||
| Balance, December 31, 2021, December 31, 2022, and March 31, 2023 | $ | 767,228 | ||
| Accumulated Amortization | Exclusive global license agreement | |||
| Balance, December 31, 2021 | $ | 387,982 | ||
| Amortization for the year | 84,444 | |||
| Balance, December 31, 2022 | $ | 472,426 | ||
| Amortization for the period | 21,111 | |||
| Balance, March 31, 2023 | $ | 493,537 | ||
| Carrying Value | Exclusive global license agreement | |||
| Balance, December 31, 2022 | $ | 294,802 | ||
| Balance, March 31, 2023 | $ | 273,691 |
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 one of the licensed technologies; (iii) $1,000,000 upon receiving regulatory approval from the FDA for any therapeutic and/or
prophylactic treatment incorporating the licensed technologies. Cardiol also agreed to pay Meros the following royalties:
5% of worldwide proceeds of net sales of the licensed technologies containing cannabinoids, excluding non-royalty sub-license income