CARDIOL THERAPEUTICS INC.
CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2024
(EXPRESSED IN CANADIAN DOLLARS)
(UNAUDITED)
Cardiol Therapeutics Inc. Unaudited |
As at March 31, | As at December 31, | |||||||
2024 | 2023 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents (note 3) | $ | 28,572,975 | $ | 34,931,778 | ||||
Accounts receivable | 153,975 | 142,745 | ||||||
Other receivables | 163,131 | 137,127 | ||||||
Prepaid expenses | 1,746,946 | 941,442 | ||||||
Total current assets | 30,637,027 | 36,153,092 | ||||||
Non-current assets | ||||||||
Property and equipment (note 4) | 300,006 | 337,058 | ||||||
Intangible assets (note 5) | 189,247 | 210,358 | ||||||
Total assets | $ | 31,126,280 | $ | 36,700,508 | ||||
EQUITY AND LIABILITIES | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued liabilities (note 14) | $ | 8,853,193 | $ | 8,041,485 | ||||
Current portion of lease liability (note 6) | 16,476 | 15,808 | ||||||
Derivative liability (note 7) | 2,046,779 | 238,176 | ||||||
Total current liabilities | 10,916,448 | 8,295,469 | ||||||
Non-current liabilities | ||||||||
Lease liability (note 6) | 150,660 | 158,532 | ||||||
Total liabilities | 11,067,108 | 8,454,001 | ||||||
Equity | ||||||||
Share capital (note 8) | 151,091,556 | 148,519,136 | ||||||
Warrants (note 10) | 3,517,867 | 3,517,867 | ||||||
Contributed surplus | 17,206,183 | 18,786,306 | ||||||
Deficit | (151,756,434 | ) | (142,576,802 | ) | ||||
Total equity | 20,059,172 | 28,246,507 | ||||||
Total equity and liabilities | $ | 31,126,280 | $ | 36,700,508 |
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 events (note 9)
Approved on behalf of the Board: | ||
"David Elsley", Director | "Guillermo Torre-Amione", Director |
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Cardiol Therapeutics Inc. Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (Expressed in Canadian Dollars) Unaudited |
Three Months | Three Months | |||||||
Ended | Ended | |||||||
March 31, | March 31, | |||||||
2024 | 2023 | |||||||
Operating expenses (notes 9, 13, 14) | ||||||||
General and administration | 5,082,552 | 3,658,440 | ||||||
Research and development | 3,322,929 | 4,127,696 | ||||||
Loss before other income | (8,405,481 | ) | (7,786,136 | ) | ||||
Interest income | 377,294 | 545,927 | ||||||
Gain on foreign exchange | 628,935 | 76,792 | ||||||
Change in derivative liability (note 7) | (1,808,603 | ) | 74,081 | |||||
Other income | 28,223 | - | ||||||
Net loss and comprehensive loss for the period | $ | (9,179,632 | ) | $ | (7,089,336 | ) | ||
Basic and diluted net loss per share (note 11) | $ | (0.14 | ) | $ | (0.11 | ) | ||
Weighted average number of common shares outstanding | 67,259,344 | 64,091,647 |
The accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these consolidated financial statements.
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Cardiol Therapeutics Inc. Condensed Interim Consolidated Statements of Cash Flows (Expressed in Canadian Dollars) Unaudited |
Three Months | Three Months | |||||||
Ended | Ended | |||||||
March 31, | March 31, | |||||||
2024 | 2023 | |||||||
Operating activities | ||||||||
Net loss and comprehensive loss for the period | $ | (9,179,632 | ) | $ | (7,089,336 | ) | ||
Adjustments for: | ||||||||
Depreciation of property and equipment | 40,512 | 37,094 | ||||||
Amortization of intangible assets | 21,111 | 21,111 | ||||||
Share-based compensation | 902,100 | 426,823 | ||||||
Change in derivative liability | 1,808,603 | (74,081 | ) | |||||
Unrealized foreign exchange gain on cash | (491,097 | ) | (2,760 | ) | ||||
Accretion on lease liability | 6,640 | 1,635 | ||||||
Shares for services | - | 16,449 | ||||||
Changes in non-cash working capital items: | ||||||||
Accounts receivable | (11,230 | ) | 12,097 | |||||
Other receivables | (26,004 | ) | 59,937 | |||||
Prepaid expenses | (805,504 | ) | (744,856 | ) | ||||
Accounts payable and accrued liabilities | 811,708 | (2,610,896 | ) | |||||
Net cash used in operating activities | (6,922,793 | ) | (9,946,783 | ) | ||||
Investing activities | ||||||||
Purchase of property and equipment | (3,460 | ) | (44,138 | ) | ||||
Net cash used in investing activities | (3,460 | ) | (44,138 | ) | ||||
Financing activities | ||||||||
Proceeds from stock options exercised | 90,197 | - | ||||||
Payment of lease liability | (13,844 | ) | (13,844 | ) | ||||
Net cash provided by (used in) financing activities | 76,353 | (13,844 | ) | |||||
Net change in cash and cash equivalents | (6,849,900 | ) | (10,004,765 | ) | ||||
Cash and cash equivalents, beginning of period | 34,931,778 | 59,469,868 | ||||||
Impact of foreign exchange on cash and cash equivalents | 491,097 | 2,760 | ||||||
Cash and cash equivalents, end of period | $ | 28,572,975 | $ | 49,467,863 |
The accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these consolidated financial statements.
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Cardiol Therapeutics Inc.
Condensed Interim Consolidated Statements of Changes in Equity
(Expressed in Canadian Dollars)
Unaudited
Share capital | Contributed | ||||||||||||||||||
Number | Amount | Warrants | surplus | Deficit | Total | ||||||||||||||
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 | |||||||
Balance, December 31, 2023 | 65,352,279 | $ | 148,519,136 | $ | 3,517,867 | $ | 18,786,306 | $ | (142,576,802 | ) | $ | 28,246,507 | |||||||
Restricted share units exercised | 1,531,429 | 1,830,736 | - | (1,830,736 | ) | - | - | ||||||||||||
Stock options exercised | 100,000 | 90,197 | - | - | - | 90,197 | |||||||||||||
Fair value of stock options exercised | - | 46,905 | - | (46,905 | ) | - | - | ||||||||||||
Share-based compensation (note 9) | - | - | - | 902,100 | - | 902,100 | |||||||||||||
Performance share units exercised | 1,300,000 | 604,582 | - | (604,582 | ) | - | - | ||||||||||||
Net loss and comprehensive loss for the period | - | - | - | - | (9,179,632 | ) | (9,179,632 | ) | |||||||||||
Balance, March 31, 2024 | 68,283,708 | $ | 151,091,556 | $ | 3,517,867 | $ | 17,206,183 | $ | (151,756,434 | ) | $ | 20,059,172 |
The accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these consolidated financial statements.
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Cardiol Therapeutics Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three Months Ended March 31, 2024
(Expressed in Canadian Dollars)
Unaudited
1. | Nature of operations |
Cardiol Therapeutics Inc. 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.
Cardiol Therapeutics Inc. and its subsidiary (the "Corporation" or "Cardiol") 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 small molecule 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" (delisted on expiry subsequent to March 31, 2024). On August 10, 2021, the Corporation's common shares commenced trading on The Nasdaq Capital Market under the symbol "CRDL".
2. | Material accounting policy information |
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 financial statements required by IFRS as issued by IASB and interpretations issued by IFRIC.
The policies applied in these unaudited condensed interim consolidated financial statements are based on IFRSs issued and outstanding as of May 14, 2024, 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, 2023.
Any subsequent changes to IFRS that are given effect in the Corporation's annual consolidated financial statements for the year ending December 31, 2024, could result in restatement of these unaudited condensed interim consolidated financial statements.
3. | Cash and cash equivalents |
Interest earned on cash and cash equivalents for the three months ended March 31, 2024 amounted to $377,294 (three months ended March 31, 2023 - $545,927).
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Cardiol Therapeutics Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three Months Ended March 31, 2024
(Expressed in Canadian Dollars)
Unaudited
4. | Property and equipment |
Cost |
Right-of- use asset | Equipment |
Leasehold improvements |
Office equipment |
Computer equipment | Total | ||||||||||||||||||
Balance, December 31, 2022 | $ | 200,319 | $ | 171,864 | $ | 237,248 | $ | 66,864 | $ | 112,290 | $ | 788,585 | ||||||||||||
Additions | 140,919 | 47,945 | - | - | 16,367 | 205,231 | ||||||||||||||||||
Balance, December 31, 2023 | 341,238 | 219,809 | 237,248 | $ | 66,864 | $ | 128,657 | $ | 993,816 | |||||||||||||||
Additions | - | - | - | - | 3,460 | 3,460 | ||||||||||||||||||
Balance, March 31, 2024 | $ | 341,238 | $ | 219,809 | $ | 237,248 | $ | 66,864 | $ | 132,117 | $ | 997,276 |
Accumulated Depreciation |
Right-of- use asset | Equipment |
Leasehold improvements |
Office equipment |
Computer equipment | Total | ||||||||||||||||||
Balance, December 31, 2022 | $ | 143,577 | $ | 94,961 | $ | 156,712 | $ | 33,728 | $ | 63,869 | $ | 492,847 | ||||||||||||
Depreciation for the year | 53,091 | 36,761 | 50,840 | 6,627 | 16,592 | 163,911 | ||||||||||||||||||
Balance, December 31, 2023 | $ | 196,668 | $ | 131,722 | $ | 207,552 | $ | 40,355 | $ | 80,461 | $ | 656,758 | ||||||||||||
Depreciation for the period | 15,996 | 6,607 | 12,710 | 1,325 | 3,874 | 40,512 | ||||||||||||||||||
Balance, March 31, 2024 | $ | 212,664 | $ | 138,329 | $ | 220,262 | $ | 41,680 | $ | 84,335 | $ | 697,270 |
Carrying value | Right-of- use asset | Equipment |
Leasehold improvements |
Office equipment |
Computer equipment | Total | ||||||||||||||||||
Balance, December 31, 2023 | $ | 144,570 | $ | 88,087 | $ | 29,696 | $ | 26,509 | $ | 48,196 | $ | 337,058 | ||||||||||||
Balance, March 31, 2024 | $ | 128,574 | $ | 81,480 | $ | 16,986 | $ | 25,184 | $ | 47,782 | $ | 300,006 |
5. | Intangible assets |
Exclusive global | ||||
Cost | license agreement | |||
Balance, December 31, 2022, December 31, 2023, and March 31, 2024 | $ | 767,228 |
Exclusive global | ||||
Accumulated Amortization | license agreement | |||
Balance, December 31, 2022 | $ | 472,426 | ||
Amortization for the year | 84,444 | |||
Balance, December 31, 2023 | $ | 556,870 | ||
Amortization for the period | 21,111 | |||
Balance, March 31, 2024 | $ | 577,981 |
Exclusive global | ||||
Carrying Value | license agreement | |||
Balance, December 31, 2023 | $ | 210,358 | ||
Balance, March 31, 2024 | $ | 189,247 |
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Cardiol Therapeutics Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three Months Ended March 31, 2024
(Expressed in Canadian Dollars)
Unaudited
5. | Intangible assets (continued) |
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. No milestone payments have been earned or made to date. Cardiol also agreed to pay Meros the following royalties:
(a) 5% of worldwide proceeds of net sales of the licensed technologies containing cannabinoids, excluding non-royalty sub-license income in (b) below, that Cardiol receives from human and animal disease indications and derivatives as outlined in the Meros License Agreement;
(b) 7% of any non-royalty sub-license income that Cardiol receives from human and animal disease indications and derivatives for licensed technologies containing cannabinoids as outlined in the Meros License Agreement;
(c) 3.7% of worldwide proceeds of net sales that Cardiol receives from the licensed technology in relation to human and animal cardiovascular and/or cardiopulmonary disease, heart failure, and/or cardiac arrhythmia diagnosis and/or treatments using the drugs, excluding cannabinoids included in (a) above, outlined in the Meros License Agreement; and
(d) 5% of any non-royalty sub-license income that Cardiol receives in relation to any human and animal heart disease, heart failure and/or arrhythmias indications, excluding cannabinoids included in (b) above, as outlined in the Meros License Agreement.
In addition, as part of the consideration under the Meros License Agreement, Cardiol (i) issued to Meros 1,020,000 common shares; and (ii) issued to Meros 1,020,000 special warrants convertible automatically into common shares for no additional consideration upon the first patient being enrolled in a Phase 1 clinical trial using the licensed technologies as described in the Meros License Agreement. As of March 31, 2024, and the date of these financial statements, this condition has not been met.
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Cardiol Therapeutics Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three Months Ended March 31, 2024
(Expressed in Canadian Dollars)
Unaudited
6. | Lease liability |
Carrying Value | ||||
Balance, December 31, 2022 | $ | 72,871 | ||
Additions (i) | 140,919 | |||
Repayments | (55,376 | ) | ||
Accretion | 15,926 | |||
Balance, December 31, 2023 | $ | 174,340 | ||
Repayments | (13,844 | ) | ||
Accretion | 6,640 | |||
Balance, March 31, 2024 | $ | 167,136 | ||
Current portion | 16,476 | |||
Long-term portion | $ | 150,660 |
(i) When measuring the lease liability for the property lease that was classified as an operating lease, the Corporation discounted the lease payments using its incremental borrowing rate. The original property lease expires on May 31, 2024, and the lease payments were discounted with a 9% interest rate. During the year ended December 31, 2023, the property lease was extended to October 30, 2028. The lease liability was revalued as of the extension date with lease payments discounted with a 15% interest rate.
7. | Derivative liability |
On November 5, 2021, the Corporation issued 8,175,000 warrants as part of a unit financing. Each warrant is exercisable into one common share at the price of USD$3.75 per share for a period of three years from closing. The original estimated fair value of $11,577,426 was assigned to the 8,175,000 warrants issued by using a fair value market technique incorporating the Black-Scholes option pricing model, with the following assumptions: a risk-free interest rate of 1.01%; an expected volatility factor of 81%; an expected dividend yield of 0%; and an expected life of 3 years. The only significant unobservable input is the volatility, which could cause an increase or decrease in fair value. The warrants have been classified as a derivative liability on the statement of financial position and are re-valued at each reporting date, as the warrants were issued in a currency other than the Corporation's functional currency. As at March 31, 2024, the fair value of the derivative liability was $2,046,779 (December 31, 2023 - $238,176), resulting in an increase in the value of the derivative liability for the three months ended March 31, 2024 of $1,808,603 (three months ended March 31, 2023 - decrease in fair value of $74,081).
Significant assumptions used in determining the fair value of the derivative warrant liabilities are as follows:
Three Months Ended |
Three Months Ended | |||||||
March 31, | March 31, | |||||||
2024 | 2023 | |||||||
Share price | USD$ | 1.81 | USD$ | 0.49 | ||||
Exercise price | USD$ | 3.75 | USD$ | 3.75 | ||||
Risk-free interest rate | 4.20 | % | 3.74 | % | ||||
Expected volatility | 99 | % | 97 | % | ||||
Expected life in years | 0.60 | 1.60 | ||||||
Expected dividend yield | Nil | Nil |
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Cardiol Therapeutics Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three Months Ended March 31, 2024
(Expressed in Canadian Dollars)
Unaudited
8. | Share capital |
a) Authorized share capital
The authorized share capital consists of an unlimited number of common shares. The common shares do not have a par value. All issued shares are fully paid.
b) Common shares issued
Number of | ||||||
common shares | Amount | |||||
Balance, December 31, 2022 | 64,042,536 | $ | 147,545,399 | |||
Shares for services (i) | 5,000 | 16,449 | ||||
Restricted share units exercised (note 9) | 50,000 | 70,500 | ||||
Balance, March 31, 2023 | 64,097,536 | $ | 147,632,348 | |||
Balance, December 31, 2023 | 65,352,279 | $ | 148,519,136 | |||
Restricted share units exercised (note 9) | 1,531,429 | 1,830,736 | ||||
Stock options exercised (note 9) | 100,000 | 90,197 | ||||
Fair value of stock options exercised (note 9) | - | 46,905 | ||||
Performance share units exercised (note 9) | 1,300,000 | 604,582 | ||||
Balance, March 31, 2024 | 68,283,708 | $ | 151,091,556 |
(i) During the three months ended March 31, 2023, the Corporation issued 5,000 common shares with a fair value of $3,550. The fair value of the shares was determined to be equal to the value of the services rendered. Included in shares for services is $12,899 related to vesting of previously issued shares.
c) 2022 At-The-Market ("ATM") Program
In June 2022, the Corporation announced it entered into an equity distribution agreement with Canaccord Genuity LLC and Cantor Fitzgerald & Co. (the "Sales Agents") acting as co-agents in connection with the 2022 at-the-market offering program (the "2022 ATM Program"). Under the terms of the 2022 ATM Program, the Corporation could, from time to time, sell common shares having an aggregate value of USD$50,000,000 through the Sales Agents on the Nasdaq Capital Market. As at March 31, 2024, the 2022 ATM Program has expired with no shares having been issued under it.
9. | Share-based payments |
The Corporation has adopted an Omnibus Equity Incentive Plan in accordance with the policies of the TSX, which permits the grant or issuance of options, Restricted Share Units ("RSUs"), Performance Share Units ("PSUs") and Deferred Share Units ("DSUs"), as well as other share-based payment arrangements. The maximum number of shares that may be issued upon the exercise or settlement of awards granted under the plan may not exceed 15% of the Corporation's issued and outstanding shares from time to time. The Board of Directors determines the price per common share and the number of common shares which may be allotted to directors, officers, employees, and consultants, and all other terms and conditions of the option, subject to the rules of the TSX.
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Cardiol Therapeutics Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three Months Ended March 31, 2024
(Expressed in Canadian Dollars)
Unaudited
9. | Share-based payments (continued) |
During the three months ended March 31, 2024, the total expenses related to share-based compensation amounted to $902,100 (three months ended March 31, 2023 - $426,823). All outstanding awards are settleable with common shares and not cash.
(a) Stock Options
Number of | Weighted average | |||||
stock options | exercise price ($) | |||||
Balance, December 31, 2022 | 1,968,476 | $ | 3.52 | |||
Expired | (775,976 | ) | 4.65 | |||
Balance, March 31, 2023 | 1,192,500 | $ | 2.79 | |||
Balance, December 31, 2023 | 1,732,500 | $ | 2.44 | |||
Issued | 455,000 | 2.56 | ||||
Expired | (110,000 | ) | 1.36 | |||
Exercised (i) | (100,000 | ) | 1.92 | |||
Balance, March 31, 2024 | 1,977,500 | $ | 2.61 |
(i) The weighted average share price on date of exercise was $2.22.
At the grant date, the fair value of stock options issued was estimated using the Black-Scholes option pricing model based on the following weighted average assumptions:
Three Months | ||||
Ended | ||||
March 31, | ||||
2024 | ||||
Fair value of stock options at grant date | $ | 1.89 | ||
Share price | $ | 2.83 | ||
Exercise price | $ | 2.56 | ||
Risk-free interest rate | 3.83 | % | ||
Expected volatility | 93 | % | ||
Expected life in years | 3.13 | |||
Expected dividend yield | Nil |
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Cardiol Therapeutics Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three Months Ended March 31, 2024
(Expressed in Canadian Dollars)
Unaudited
9. | Share-based payments (continued) |
The following table reflects the actual stock options issued and outstanding as of March 31, 2024:
Expiry date |
Exercise price ($) |
Weighted average remaining contractual life (years) |
Number of options outstanding |
Number of options vested (exercisable) | |||||
February 23, 2025 | 3.54 | 0.90 | 20,000 | 20,000 | |||||
April 10, 2025 | 0.75 | 1.03 | 25,000 | - | |||||
August 19, 2025 | 2.12 | 1.39 | 100,000 | 100,000 | |||||
August 30, 2025 | 5.00 | 1.42 | 80,000 | 80,000 | |||||
April 1, 2026 | 5.77 | 2.00 | 60,000 | 60,000 | |||||
September 10, 2026 | 1.32 | 2.45 | 75,000 | 25,000 | |||||
November 29, 2026 | 2.38 | 2.67 | 250,000 | - | |||||
December 8, 2026 | 3.59 | 2.69 | 325,000 | 216,667 | |||||
January 11, 2027 | 2.18 | 2.78 | 220,000 | 146,667 | |||||
March 1, 2027(i) | 2.56 | 2.92 | 425,000 | - | |||||
March 14, 2027 | 2.07 | 2.95 | 60,000 | 40,000 | |||||
May 12, 2027 | 1.46 | 3.12 | 70,000 | 23,334 | |||||
September 12, 2027 | 1.61 | 3.45 | 207,500 | 69,168 | |||||
October 23, 2028 | 1.20 | 4.57 | 30,000 | - | |||||
January 29, 2029 | 2.56 | 4.84 | 30,000 | - | |||||
2.61 | 2.72 | 1,977,500 | 780,836 |
(i) Subsequent to March 31, 2024, 75,000 unexercised options expired.
(b) Performance Share Units
The Corporation has 700,000 outstanding PSUs as at March 31, 2024 (March 31, 2023 - 600,000, December 31, 2023 - 2,000,000). Grants of PSUs require completion of certain performance criteria specific to each grant. These PSUs have an expiry date of December 31, 2024. As at March 31, 2024, nil PSUs were vested (exercisable).
During the three months ended March 31, 2024, 1,300,000 PSUs vested and were exercised by certain consultants of the Corporation for a total value of $604,582 (March 31, 2023 - nil PSUs vested and were redeemed for a total value of $nil). During the three months ended March 31, 2024, the weighted average share price on date of exercise was $1.54. Subsequent to March 31, 2024, 600,000 PSUs vested and were exercised.
(c) Restricted Share Units
The total outstanding RSUs at March 31, 2024 is 2,013,458 (March 31, 2023 - 2,262,963, December 31, 2023 - 3,544,887). Of the outstanding RSUs, 1,551,546 have fully vested as of March 31, 2024.
During the three months ended March 31, 2024, the Corporation granted nil RSUs. During the three months ended March 31, 2024, 1,531,429 RSUs were redeemed (March 31, 2023 - nil) and nil unvested RSUs expired. During the three months ended March 31, 2024, the weighted average share price on date of exercise was $1.53. Subsequent to March 31, 2024, 64,605 RSUs were redeemed.
- 11 -
Cardiol Therapeutics Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three Months Ended March 31, 2024
(Expressed in Canadian Dollars)
Unaudited
10. | Warrants |
Number of | |||||||||
warrants | Amount | ||||||||
Balance, December 31, 2022 and March 31, 2023 | 11,628,178 | $ | 3,517,867 | ||||||
Balance, December 31, 2023 and March 31, 2024 | 11,628,178 | $ | 3,517,867 |
The following table reflects the actual warrants issued and outstanding as of March 31, 2024, excluding 1,020,000 special warrants convertible automatically into common shares for no additional consideration in accordance with the original escrow release terms as described in the Meros License Agreement (see note 5):
Expiry date |
Exercise price ($) |
Remaining |
Warrants exercisable | ||||||
May 12, 2024(2) | 4.60 | 0.12 | 3,453,178 | ||||||
November 5, 2024(1) | 5.08 | 0.60 | 8,175,000 | ||||||
4.94 | 0.46 | 11,628,178 |
(1) Warrants carry an exercise price of USD$3.75. This amount was translated to CAD for presentation purposes at the March 31, 2024 rate of 1.35. These warrants are classified as a derivative liability on the statement of financial position (see note 7).
(2) Subsequent to March 31, 2024, 3,453,178 warrants expired unexercised.
11. | Loss per share |
For the three months ended March 31, 2024, basic and diluted loss per share has been calculated based on the loss attributable to common shareholders of $9,179,632 (three months ended March 31, 2023 - $7,089,336) and the weighted average number of common shares outstanding of 67,259,344 (three months ended March 31, 2023 - 64,091,647). Diluted loss per share did not include the effect of stock options, PSUs, RSUs, and warrants as they are anti-dilutive.
12. | Commitments |
(i) The Corporation has leased premises with third parties. The minimum committed lease payments, which include the lease liability payments shown as base rent, are approximately as follows:
Base rent | Variable rent | Total | |||||||||||
2024 | $ | 27,688 | $ | 25,923 | $ | 53,611 | |||||||
2025 | 55,376 | 51,846 | 107,222 | ||||||||||
2026 | 55,376 | 51,846 | 107,222 | ||||||||||
2027 | 55,376 | 51,846 | 107,222 | ||||||||||
2028 | 46,146 | 43,205 | 89,351 | ||||||||||
$ | 239,962 | $ | 224,666 | $ | 464,628 |
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Cardiol Therapeutics Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three Months Ended March 31, 2024
(Expressed in Canadian Dollars)
Unaudited
12. | Commitments (continued) |
(ii) The Corporation has signed various agreements with consultants to provide services. Under the agreements, the Corporation has the following remaining commitments.
2024 | $ | 465,179 |
(iii) Pursuant to the terms of agreements with various other contract research organizations, the Corporation is committed for the following contract research services:
2024 | $ | 458,176 | ||
2025 | 1,109,206 | |||
2026 | 12,708 | |||
Total | $ | 1,580,090 |
13. | Other expenses |
The following details highlight certain components of the research and development and general and administration expenses classified by nature. Remaining research and development and operating expenses include personnel costs and expenses paid to third parties:
Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | |||||
Research and development expenses | ||||||
Non-cash share-based compensation | 53,344 | 97,405 | ||||
General and administration expenses | ||||||
Depreciation of property and equipment | 40,512 | 37,094 | ||||
Amortization of intangible assets | 21,111 | 21,111 | ||||
Non-cash share-based compensation | 848,756 | 329,418 |
14. | Related party transactions |
(a) The Corporation entered into the following transactions with related parties:
(i) Included in research and development expense is $628,680 for the three months ended March 31, 2023 paid to a company previously related to a director. As at December 31, 2023, $416,792 was owed to this company and this amount was included in accounts payable and accrued liabilities.
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Cardiol Therapeutics Inc.
Notes to Condensed Interim Consolidated Financial Statements
Three Months Ended March 31, 2024
(Expressed in Canadian Dollars)
Unaudited
14. | Related party transactions (continued) |
(b) Key management personnel are those persons having authority and responsibility for planning, directing, and controlling the activities of the Corporation directly or indirectly, including any directors (executive and non-executive) of the Corporation. Remuneration of directors and key management personnel of the Corporation, except as noted in (a) above, was as follows:
Three Months
Ended 2024 | Three Months
Ended 2023 | |||||||
Salaries and benefits | $ | 1,264,404 | $ | 1,170,030 | ||||
Share-based payments | 121,440 | 268,882 | ||||||
$ | 1,385,844 | $ | 1,438,912 |
As at March 31, 2024, $nil (December 31, 2023 - $nil) was owed to key management personnel and this amount was included in accounts payable and accrued liabilities.
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Cardiol Therapeutics Inc. published this content on 14 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 May 2024 21:28:38 UTC.