Full Press Release Details
UNDERWRITING AGREEMENT
Upper Middle Road East
Attention: David Elsley, President & Chief Executive
Canaccord Genuity Corp. (the "Underwriter"),
as sole underwriter and bookrunner, understands that Cardiol Therapeutics Inc. (the "Corporation") proposes to issue
and sell, and the Underwriter hereby offers to purchase, on a "bought deal" private placement basis, or find Substituted Purchasers
(as defined below) to purchase on their behalf, 11,423,078 units (the "Offered Units") of the Corporation at a price
of $1.30 per Offered Unit for aggregate gross proceeds of $14,850,001.40 pursuant to Part 5A NI 45-106 (as defined below) and Coordinated
Blanket Order 45-935 - Exemptions from Certain Conditions of the Listed Issuer Financing Exemption of the Canadian Securities Administrators
(collectively, the "Listed Issuer Financing Exemption") or other available prospectus exemptions under NI 45-106 (the
"Offering"). The number of Offered Units includes 1,038,462 Offered Units to be issued and sold by the Corporation
pursuant to the exercise by the Underwriter of the option granted to the Underwriter under the terms of the Engagement Letter.
Each Offered Unit consists of one Common
Share (as defined herein) (a "Unit Share") and one-half (½) Common Share purchase warrant of the Corporation
(a "Warrant"). The Warrants will be governed by a warrant indenture between the Corporation and the Warrant Agent (as
defined herein) dated the Closing Date pursuant to which the Warrants will be issued and providing for the definitive terms of the Warrants
(the "Warrant Indenture"). Each Warrant shall entitle the holder thereof to acquire one additional Common Share (a
"Warrant Share") at a price of $1.75 until the Expiry Time (as defined herein).
The Underwriter shall have the right to
solicit orders and obtain substituted purchasers (the "Substituted Purchasers") in place of the Underwriter in which
case (a) the Corporation will sell such Offered Units (or part thereof) to such Substituted Purchasers; and (b) the obligation
of the Underwriter to purchase the Offered Units from the Corporation shall be reduced by the number of Offered Units purchased by the
Substituted Purchasers. It is understood that the Underwriter agrees to purchase or cause to be purchased the Offered Units, and that
this commitment is not subject to the Underwriter being able to arrange Substituted Purchasers. Any reference in this Agreement hereafter
to "Purchasers" shall be taken to be a reference to the Substituted Purchasers, if any, and the Underwriter, as the initial
committed Purchaser.
Offered Units will be distributed to the Underwriter or to the Substituted Purchasers on a private placement basis. To the extent
that Substituted Purchasers purchase the Offered Units, the Underwriter shall not be obligated to purchase the Offered Units so
purchased by such Substituted Purchaser. For greater certainty, to the extent that the Underwriter arranges for Substituted
Purchasers to purchase the Offered Units, and such Offered Units are so purchased, the Underwriter will be acting as the
Corporation's exclusive agent to offer the Offered Units and to the extent that Substituted Purchasers acquire any of the
Offered Units, the Underwriter shall not be deemed to have acquired (at any time) or have any obligation to acquire any of such
Offered Units, but in respect of which, the Commission (as defined below) shall be payable.
In consideration of the services to be
rendered by the Underwriter hereunder in connection with the Offering, the Underwriter will receive the Underwriter's Commission
(as defined herein) as set out in Section 9 of this Agreement. The obligation of the Corporation to pay the Underwriter's Commission
shall arise at the Closing Time and the Underwriter's Commission shall be fully earned by the Underwriter upon the completion of
The Underwriter shall be entitled to appoint
other registered dealers acceptable to the Corporation ("Selling Firms"), acting reasonably, as agents to assist in
the Offering and the Underwriter shall determine the remuneration payable to such Selling Firms, such remuneration to be the sole responsibility
In this Agreement, in addition to the terms defined above,
the following terms shall have the following meanings:
"Agreement" means this agreement, including
all schedules hereto, as amended or supplemented from time to time;
"Anti-Corruption Laws" has the meaning ascribed
to such term in Section 4(a)(lx);
"Business Day" means a day other than a
Saturday, Sunday or any other day on which the principal chartered banks located in Toronto, Ontario are not open for business;
"Canadian Securities Laws" means the Securities
Laws of each of the provinces and territories of Canada;
"CDS" means CDS Clearing and Depository
"CIPO" has the meaning ascribed thereto in Section 4(a)(xl);
"Closing" means the completion of the purchase
and sale of the Offered Units, as contemplated by this Agreement;
"Closing Date" means January 23, 2026,
or such other date as may be agreed upon by the Corporation and the Underwriter;
"Closing Time" means 8:00 a.m. (Toronto
time) on the Closing Date, or such other time as may be agreed upon by the Corporation and the Underwriter;
"Common Shares" means the common shares
in the capital of the Corporation;
"Corporation" has the meaning ascribed to such term above;
"Dalton" has the meaning
ascribed thereto in Section 4(a)(lvii);
"Debt Instrument" means
any note, loan, bond, debenture, indenture, promissory note or other instrument evidencing indebtedness (demand or otherwise) for borrowed
money to which the Corporation is a party or otherwise bound;
"Designated Jurisdictions"
means, collectively, each of the provinces and territories of Canada, other than Quebec, and such other jurisdictions as the Corporation
and the Underwriter may agree;
"Directed Selling Efforts"
means "directed selling efforts" as defined in Rule 902(c) of Regulation S under the U.S. Securities Act;
"Distribution Compliance Period"
means the 40-day period that begins on the later of (i) the date the Offered Units are first offered to persons other than Distributors
in reliance on Regulation S or (ii) the Closing Date; provided that, all offers and sales by a Distributor of an unsold allotment
or subscription shall be deemed to be made during the Distribution Compliance Period;
any underwriter, dealer, or other person who participates, pursuant to a contractual arrangement, in the distribution of the Offered Units
offered or sold in reliance on Regulation S under the U.S. Securities Act;
"DPSP" means a deferred
profit sharing plan as defined for purposes of the Tax Act;
"EMA" has the meaning ascribed thereto in Section 4(a)(xliv);
"Employee Plans" has
the meaning ascribed to such term in Section 4(a)(lv);
"Engagement Letter" means the engagement
letter between the Underwriter and the Corporation dated January 16, 2025;
"Environmental Laws" has the meaning ascribed
thereto in Section 4(a)(liii);
"Expiry Time" means 5:00 p.m. (Toronto time) on January 23, 2028;
has the meaning ascribed to such term in Section 4(a)(lx);
"FDA" has the meaning ascribed to such term
in Section 4(a)(xxxii);
"FHSA" means a first home savings account
as defined for purposes of the Tax Act;
"Financial Statements"
means (i) the unaudited consolidated condensed interim financial statements for the three and nine month period ended September 30,
2025, and (ii) the audited consolidated financial statements of the Corporation for the years ended December 31, 2024 and 2023,
together with the notes thereto and the report of the Corporation's auditors thereon;
Authority" means any governmental authority and includes, without limitation, any national or federal government,
province, state, municipality or other political subdivision of any of the foregoing, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government and any corporation or other entity owned or
controlled (through stock or capital ownership or otherwise) by any of the foregoing;