Full Press Release Details
CARDIOL THERAPEUTICS INC.
INTERIM FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED
(EXPRESSED IN CANADIAN
Cardiol Therapeutics Inc.
Condensed Interim Statements of Financial Position
(Expressed in Canadian Dollars)
| As at | As at | |||||||
| September 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents (note 3) | $ | 28,652,391 | $ | 14,025,187 | ||||
| Accounts receivable | 71,592 | 5,793 | ||||||
| Other receivables | 313,781 | 214,130 | ||||||
| Prepaid expenses (note 13) | 1,563,505 | 347,808 | ||||||
| Prepaid inventory (note 11(iv)) | 339,051 | 339,051 | ||||||
| Inventory | - | 17,968 | ||||||
| Total current assets | 30,940,320 | 14,949,937 | ||||||
| Non-current assets | ||||||||
| Property and equipment (note 4) | 390,972 | 479,554 | ||||||
| Intangible assets (note 6) | 400,357 | 463,690 | ||||||
| Total assets | $ | 31,731,649 | $ | 15,893,181 | ||||
| EQUITY AND LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities (note 13) | $ | 2,518,540 | $ | 2,466,262 | ||||
| Current portion of lease liability (note 5) | 53,069 | 51,915 | ||||||
| Total current liabilities | 2,571,609 | 2,518,177 | ||||||
| Non-current liabilities | ||||||||
| Lease liability (note 5) | 74,562 | 104,651 | ||||||
| Total liabilities | 2,646,171 | 2,622,828 | ||||||
| Equity | ||||||||
| Share capital (note 7) | 89,831,548 | 51,923,471 | ||||||
| Warrants (note 9) | 4,317,473 | 4,460,728 | ||||||
| Contributed surplus (note 8) | 12,196,858 | 8,765,773 | ||||||
| Deficit | (77,260,401 | ) | (51,879,619 | ) | ||||
| Total equity | 29,085,478 | 13,270,353 | ||||||
| Total equity and liabilities | $ | 31,731,649 | $ | 15,893,181 |
accompanying notes to the unaudited condensed interim financial statements are an integral part of these financial statements.
| Commitments (notes 6 and 11) | ||
| Subsequent events (note 16) | ||
| Approved on behalf of the Board: | ||
| " David Elsley ", Director | " Guillermo Torre-Amione ", Director |
Cardiol Therapeutics Inc.
Condensed Interim Statements of Loss and Comprehensive Loss
(Expressed in Canadian Dollars)
| Three Months | Three Months | Nine Months | Nine Months | |||||||||||||
| Ended | Ended | Ended | Ended | |||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenue | ||||||||||||||||
| Sales | $ | - | $ | - | $ | 78,760 | $ | - | ||||||||
| Operating expenses (notes 8, 12, 13) | ||||||||||||||||
| General and administration | $ | 7,571,515 | $ | 2,494,297 | $ | 18,303,301 | $ | 7,709,848 | ||||||||
| Research and development | 2,592,094 | 1,916,486 | 7,342,587 | 3,361,897 | ||||||||||||
| Loss before other income (expenses) | (10,163,609 | ) | (4,410,783 | ) | (25,567,128 | ) | (11,071,745 | ) | ||||||||
| Interest income | 35,930 | 23,359 | 78,234 | 57,051 | ||||||||||||
| Gain (loss) on foreign exchange | 124,612 | (13,819 | ) | 15,036 | 32,888 | |||||||||||
| Other income | 93,076 | - | 93,076 | 7,398 | ||||||||||||
| Net loss and comprehensive loss for the period | $ | (9,909,991 | ) | $ | (4,401,243 | ) | $ | (25,380,782 | ) | $ | (10,974,408 | ) | ||||
| Basic and diluted net loss per share (note 10) | $ | (0.23 | ) | $ | (0.13 | ) | $ | (0.65 | ) | $ | (0.38 | ) | ||||
| Weighted average number of common shares outstanding | 43,169,772 | 32,788,663 | 39,308,910 | 28,855,226 |
The accompanying notes to the unaudited
condensed interim financial statements are an integral part of these financial statements.
Interim Statements of Cash Flows
in Canadian Dollars)
| Nine Months | Nine Months | |||||||
| Ended | Ended | |||||||
| September 30, | September 30, | |||||||
| 2021 | 2020 | |||||||
| Operating activities | ||||||||
| Net loss and other comprehensive loss for the period | $ | (25,380,782 | ) | $ | (10,974,408 | ) | ||
| Adjustments for: | ||||||||
| Depreciation of property and equipment | 101,498 | 107,816 | ||||||
| Amortization of intangible assets | 63,333 | 63,333 | ||||||
| Share-based compensation | 3,909,056 | 2,439,158 | ||||||
| Accretion on lease liability | 10,002 | 12,485 | ||||||
| Shares for services | 3,048,365 | 20,742 | ||||||
| Research and development expenses to be settled through warrant exercise | 16,063 | 63,764 | ||||||
| Changes in non-cash working capital items: | ||||||||
| Accounts receivable | (65,799 | ) | 4,074 | |||||
| Other receivables | (99,651 | ) | 641,301 | |||||
| Prepaid expenses | (1,215,697 | ) | (325,118 | ) | ||||
| Inventory | 17,968 | 173,599 | ||||||
| Accounts payable and accrued liabilities | 52,278 | 1,176,720 | ||||||
| Net cash used in operating activities | (19,543,366 | ) | (6,596,534 | ) | ||||
| Investing activities | ||||||||
| Purchase of property and equipment | (12,916 | ) | (27,104 | ) | ||||
| Net cash used in investing activities | (12,916 | ) | (27,104 | ) | ||||
| Financing activities | ||||||||
| Issuance of units | 22,003,200 | 17,250,000 | ||||||
| Share issuance costs | (1,378,225 | ) | (1,088,190 | ) | ||||
| Issuance of warrants, net of issuance costs | 8,147 | - | ||||||
| Proceeds from stock options exercised | 2,837,083 | - | ||||||
| Proceeds from warrants exercised | 10,752,218 | 89,700 | ||||||
| Payment of lease liability | (38,937 | ) | (37,495 | ) | ||||
| Net cash provided by financing activities | 34,183,486 | 16,214,015 | ||||||
| Net change in cash and cash equivalents | 14,627,204 | 9,590,377 | ||||||
| Cash and cash equivalents, beginning of period | 14,025,187 | 6,956,203 | ||||||
| Cash and cash equivalents, end of period | $ | 28,652,391 | $ | 16,546,580 |
accompanying notes to the unaudited condensed interim financial statements are an integral part of these financial statements.
Interim Statements of Changes in Equity
in Canadian Dollars)
| Share capital | Contributed | |||||||||||||||||||||||
| Number | Amount | Warrants | surplus | Deficit | Total | |||||||||||||||||||
| Balance, December 31, 2019 | 25,877,686 | $ | 39,413,506 | $ | 1,731,250 | $ | 4,765,965 | $ | (31,238,684 | ) | $ | 14,672,037 | ||||||||||||
| Issuance of units | 6,900,000 | 13,446,249 | 3,803,751 | - | - | 17,250,000 | ||||||||||||||||||
| Share issuance costs | - | (1,243,485 | ) | 155,295 | - | - | (1,088,190 | ) | ||||||||||||||||
| Fair value of warrants expired | - | - | (35,144 | ) | 35,144 | - | - | |||||||||||||||||
| Share-based compensation | - | - | - | 2,439,158 | - | 2,439,158 | ||||||||||||||||||
| Warrants exercised | 27,600 | 89,700 | - | - | - | 89,700 | ||||||||||||||||||
| Fair value of warrants exercised | - | 30,430 | (30,430 | ) | - | - | - | |||||||||||||||||
| Shares for services | 6,914 | 20,742 | - | - | - | 20,742 | ||||||||||||||||||
| Fair value of warrants earned | - | - | 63,764 | - | - | 63,764 | ||||||||||||||||||
| Net loss and comprehensive loss for the period | - | - | - | - | (10,974,408 | ) | (10,974,408 | ) | ||||||||||||||||
| Balance, September 30, 2020 | 32,812,200 | $ | 51,757,142 | $ | 5,688,486 | $ | 7,240,267 | $ | (42,213,092 | ) | $ | 22,472,803 | ||||||||||||
| 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 |
accompanying notes to the unaudited condensed interim financial statements are an integral part of these financial statements.
Cardiol Therapeutics Inc.
Notes to Condensed Interim
Financial Statements
Three and Nine Months
Ended September 30, 2021
(Expressed in Canadian
Cardiol Therapeutics Inc. (the
"Company") was incorporated under the laws of the Province of Ontario on January 19, 2017. The Company's registered and legal
office is located at 2265 Upper Middle Rd. E., Suite 602, Oakville, Ontario, L6H 0G5, Canada.
is a clinical-stage life sciences company focused on the research and clinical development of anti- inflammatory therapies for the treatment
of cardiovascular disease ("CVD"). In September 2020, the Corporation received clearance from the U.S. Food and Drug Administration
(the "FDA") for its Investigational New Drug ("IND") application to commence a Phase II/III, double-blind, placebo-controlled
clinical trial investigating the efficacy and safety of its lead product, CardiolRx , in hospitalized COVID-19 patients with a prior
history of, or risk factors for, CVD. CardiolRx is an oral cannabidiol formulation that is pharmaceutically manufactured under cGMP.
Corporation received clearance from the FDA for its IND application for a Phase II international trial of CardiolRx in acute
myocarditis, a condition caused by inflammation in heart tissue, which remains a leading cause of sudden cardiac death in people
less than 35 years of age. Cardiol is also developing a subcutaneous formulation of CardiolRx for the treatment of inflammation in
the heart that is associated with the development and progression of heart failure.
On December 20, 2018, the Company
completed its initial public offering (the "IPO") on the Toronto Stock Exchange (the "TSX"). As a result, the Company'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 May 30, 2019, the Company also began trading on the OTCQX Best Market ("OTCQX") under
the symbol "CRTPF". On August 10, 2021, the Company's common shares commenced trading on the Nasdaq Capital Market ("Nasdaq")
under the symbol "CRDL". Concurrent with the listing on the Nasdaq, the common shares ceased to be quoted on the OTCQX.
Statement of compliance
The Company 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 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 financial statements required by IFRS as issued by IASB and interpretations
The policies applied in these
unaudited condensed interim financial statements are based on IFRSs issued and outstanding as of November 11, 2021, the date the Board
of Directors approved the statements. The same accounting policies and methods of computation are followed in these unaudited condensed
interim financial statements as compared with the most recent annual financial statements as at and for the year ended December 31, 2020.
Any subsequent changes to IFRS that are given effect in the Company's annual financial statements for the year ending December 31,
2021, could result in restatement of these unaudited condensed interim financial statements.
Cardiol Therapeutics Inc.
Notes to Condensed Interim
Financial Statements
Three and Nine Months
Ended September 30, 2021
(Expressed in Canadian
Cash and cash equivalents include
a cashable Guaranteed Investment Certificate totaling $61,506 earning interest of 0.1% per annum and maturing on December 4, 2021 (December
31, 2020 - cashable Guaranteed Investment Certificate totaling $61,506 earning interest of 0.1% per annum and maturing on December 4,
2021). 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, 2019 | $ | 200,319 | $ | 116,578 | $ | 234,772 | $ | 52,917 | $ | 55,772 | $ | 660,358 | ||||||||||||
| Additions | - | 6,480 | 2,476 | 12,799 | 18,847 | 40,602 | ||||||||||||||||||
| Balance, December 31, 2020 | 200,319 | 123,058 | 237,248 | $ | 65,716 | $ | 74,619 | $ | 700,960 | |||||||||||||||
| Additions | - | 7,712 | - | - | 5,204 | 12,916 | ||||||||||||||||||
| Balance, September 30, 2021 | $ | 200,319 | $ | 130,770 | $ | 237,248 | $ | 65,716 | $ | 79,823 | $ | 713,876 |
| Right-of- | Leasehold | Office | Computer | |||||||||||||||||||||
| Accumulated Depreciation | use asset | Equipment | improvements | equipment | equipment | Total | ||||||||||||||||||
| Balance, December 31, 2019 | $ | 23,373 | $ | 23,996 | $ | 4,192 | $ | 3,816 | $ | 20,934 | $ | 76,311 | ||||||||||||
| Depreciation for the year | 40,068 | 29,056 | 50,840 | 11,828 | 13,303 | 145,095 | ||||||||||||||||||
| Balance, December 31, 2020 | $ | 63,441 | $ | 53,052 | $ | 55,032 | $ | 15,644 | $ | 34,237 | $ | 221,406 | ||||||||||||
| Depreciation for the period | 30,051 | 16,330 | 38,130 | 7,511 | 9,476 | 101,498 | ||||||||||||||||||
| Balance, September 30, 2021 | $ | 93,492 | $ | 69,382 | $ | 93,162 | $ | 23,155 | $ | 43,713 | $ | 322,904 |
| Right-of- | Leasehold | Office | Computer | |||||||||||||||||||||
| Carrying value | use asset | Equipment | improvements | equipment | equipment | Total | ||||||||||||||||||
| Balance, December 31, 2020 | $ | 136,878 | $ | 70,006 | $ | 182,216 | $ | 50,072 | $ | 40,382 | $ | 479,554 | ||||||||||||
| Balance, September 30, 2021 | $ | 106,827 | $ | 61,388 | $ | 144,086 | $ | 42,561 | $ | 36,110 | $ | 390,972 |
Cardiol Therapeutics Inc.
Notes to Condensed Interim
Financial Statements
Three and Nine Months
Ended September 30, 2021
(Expressed in Canadian
| Carrying | ||||
| Value | ||||
| Balance, December 31, 2019 | $ | 190,752 | ||
| Repayments | (50,472 | ) | ||
| Accretion | 16,286 | |||
| Balance, December 31, 2020 | $ | 156,566 | ||
| Repayments | (38,937 | ) | ||
| Accretion | 10,002 | |||
| Balance, September 30, 2021 | $ | 127,631 | ||
| Current portion | 53,069 | |||
| Long-term portion | $ | 74,562 |
measuring the lease liability for the property lease that was classified as an operating lease, the Company discounted the lease payments
using its incremental borrowing rate. The property lease expires on May 31, 2024 and the lease payments were discounted with a 9% interest
| Exclusive global | ||||
| Cost | license agreement | |||
| Balance, December 31, 2019, December 31, 2020, and September 30, 2021 | $ | 767,228 |
| Exclusive global | ||||
| Accumulated Amortization | license agreement | |||
| Balance, December 31, 2019 | $ | 219,094 | ||
| Amortization for the year | 84,444 | |||
| Balance, December 31, 2020 | $ | 303,538 | ||
| Amortization for the period | 63,333 | |||
| Balance, September 30, 2021 | $ | 366,871 |
| Exclusive global | ||||
| Carrying Value | license agreement | |||
| Balance, December 31, 2020 | $ | 463,690 | ||
| Balance, September 30, 2021 | $ | 400,357 |
Exclusive global agreement ("Meros License Agreement")
In 2017, the Company 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.
Cardiol Therapeutics Inc.
Notes to Condensed Interim
Financial Statements
Three and Nine Months
Ended September 30, 2021
(Expressed in Canadian
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