EX-99.1 2 tm2420157d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 

 

 

CARDIOL THERAPEUTICS INC.

CONDENSED INTERIM CONSOLIDATED

FINANCIAL STATEMENTS

THREE AND SIX MONTHS ENDED

JUNE 30, 2024

(EXPRESSED IN CANADIAN DOLLARS)

(UNAUDITED)

 

 

 

 

 

 

Cardiol Therapeutics Inc. 

Condensed Interim Consolidated Statements of Financial Position

(Expressed in Canadian Dollars)

Unaudited  

 

 

  

As at
June 30,
2024

   As at
December 31,
2023		 
ASSETS          
           
Current assets          
Cash and cash equivalents (note 3)  $24,021,237   $34,931,778 
Accounts receivable   93,651    142,745 
Other receivables   148,773    137,127 
Prepaid expenses   1,617,854    941,442 
Total current assets   25,881,515    36,153,092 
           
Non-current assets          
Property and equipment (note 4)   263,009    337,058 
Intangible assets (note 5)   168,136    210,358 
Total assets  $26,312,660   $36,700,508 
           

EQUITY AND LIABILITIES

          
           
Current liabilities          
Accounts payable and accrued liabilities (note 14)  $9,431,457   $8,041,485 
Current portion of lease liability (note 6)   21,719    15,808 
Derivative liability (note 7)   1,355,732    238,176 
Total current liabilities   10,808,908    8,295,469 
           
Non-current liabilities          
Lease liability (note 6)   142,554    158,532 
Total liabilities   10,951,462    8,454,001 
           
Equity          

Share capital (note 8)

   152,349,535    148,519,136 
Warrants (note 10)   -    3,517,867 
Contributed surplus   21,358,970    18,786,306 
Deficit   (158,347,307)   (142,576,802)
Total equity   15,361,198    28,246,507 
Total equity and liabilities  $26,312,660   $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

 

- 1 -

 

 

 

Cardiol Therapeutics Inc.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss

(Expressed in Canadian Dollars)

Unaudited

 

 

   Three Months Ended   Three Months Ended   Six Months Ended   Six Months Ended 
   June 30,   June 30,   June 30,   June 30, 
   2024   2023   2024   2023 
Operating expenses (notes 9, 13, 14)                
General and administration   5,031,702    2,835,264    10,114,254    6,493,704 
Research and development   2,709,644    3,479,385    6,032,573    7,607,081 
Loss before other income   (7,741,346)   (6,314,649)   (16,146,827)   (14,100,785)
Interest income   307,409    528,697    684,703    1,074,624 
Gain (loss) on foreign exchange   152,017    (828,909)   780,952    (752,117)
Change in derivative liability (note 7)   691,047    (856,893)   (1,117,556)   (782,812)
Other income   -    -    28,223    - 
Net loss and comprehensive loss for the period  $(6,590,873)  $(7,471,754)  $(15,770,505)  $(14,561,090)
                     

Basic and diluted net loss per share (note 11)

  $(0.10)  $(0.12)  $(0.23)  $(0.23)
Weighted average number of common shares outstanding   68,751,105    64,105,448    68,005,224    64,098,586 

 

The accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these consolidated financial statements.

 

- 2 -

 

 

 

Cardiol Therapeutics Inc.

Condensed Interim Consolidated Statements of Cash Flows

(Expressed in Canadian Dollars)

Unaudited  

 

 

   Six Months   Six Months 
   Ended   Ended 
   June 30,   June 30, 
   2024   2023 
Operating activities          
Net loss and comprehensive loss for the period  $(15,770,505)  $(14,561,090)
Adjustments for:          
Depreciation of property and equipment   81,309    74,479 
Amortization of intangible assets   42,222    42,222 
Share-based compensation   2,707,686    1,093,223 
Change in derivative liability   1,117,556    782,812 
Unrealized foreign exchange gain on cash   (640,778)   (849,290)
Accretion on lease liability   13,006    3,011 
Shares for services   -    16,449 
Changes in non-cash working capital items:          
Accounts receivable   49,094    21,579 
Other receivables   (11,646)   153,549 
Prepaid expenses   (676,412)   87,864 
Accounts payable and accrued liabilities   1,389,972    (2,165,963)
Net cash used in operating activities   (11,698,496)   (15,301,155)
           
Investing activities          
Purchase of property and equipment   (7,260)   (48,029)
Net cash used in investing activities   (7,260)   (48,029)
           
Financing activities          
Proceeds from stock options exercised   177,510    - 
Payment of lease liability   (23,073)   (27,688)
Net cash provided by (used in) financing activities   154,437    (27,688)
Net change in cash and cash equivalents   (11,551,319)   (15,376,872)
Cash and cash equivalents, beginning of period   34,931,778    59,469,868 
Impact of foreign exchange on cash and cash equivalents   640,778    849,290 
Cash and cash equivalents, end of period  $24,021,237   $44,942,286 

 

The accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these consolidated financial statements.

 

- 3 -

 

 

 

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  80,000    112,800    -    (112,800)   -    - 
Shares for services  5,000    16,449    -    -    -    16,449 
Share-based compensation (note 9)  -    -    -    1,093,223    -    1,093,223 
Net loss and comprehensive loss for the period  -    -    -    -    (14,561,090)   (14,561,090)
Balance, June 30, 2023  64,127,536   $147,674,648   $3,517,867   $16,567,255   $(129,009,600)  $38,750,170 
                              
Balance, December 31, 2023  65,352,279   $148,519,136   $3,517,867   $18,786,306   $(142,576,802)  $28,246,507 
Fair value of expired warrants  -    -    (3,517,867)   3,517,867    -    - 
Restricted share units exercised  1,596,034    1,919,588    -    (1,919,588)   -    - 
Stock options exercised  175,000    177,510    -    -    -    177,510 
Fair value of stock options exercised  -    99,263    -    (99,263)   -    - 
Share-based compensation (note 9)  -    -    -    2,707,686    -    2,707,686 
Performance share units exercised  2,200,000    1,634,038    -    (1,634,038)   -    - 
Net loss and comprehensive loss for the period  -    -    -    -    (15,770,505)   (15,770,505)
Balance, June 30, 2024  69,323,313   $152,349,535   $-   $21,358,970   $(158,347,307)  $15,361,198 

 

The accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these consolidated financial statements.

 

- 4 -

 

 

 

Cardiol Therapeutics Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 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 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". 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 August 12, 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 and six months ended June 30, 2024 amounted to $307,409 and $684,703 (three and six months ended June 30, 2023 - $528,697 and $1,074,624).

 

- 5 -

 

 

 

Cardiol Therapeutics Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 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   -    -    -    -    7,260    7,260 
Balance, June 30, 2024  $341,238   $219,809   $237,248   $66,864   $135,917   $1,001,076 

 

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   31,992    13,213    25,420    2,651    8,033    81,309 
Balance, June 30, 2024  $228,660   $144,935   $232,972   $43,006   $88,494   $738,067 

 

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, June 30, 2024  $112,578   $74,874   $4,276   $23,858   $47,423   $263,009 

 

5.Intangible assets

 

Cost  Exclusive global
 license agreement 		 
Balance, December 31, 2022, December 31, 2023, and June 30, 2024  $767,228 

 

Accumulated Amortization  Exclusive global
 license agreement 		 
Balance, December 31, 2022  $472,426 
Amortization for the year   84,444 
Balance, December 31, 2023  $556,870 
Amortization for the period   42,222 
Balance, June 30, 2024  $599,092 

 

Carrying Value  Exclusive global
 license agreement 		 
Balance, December 31, 2023  $210,358 
Balance, June 30, 2024  $168,136 

 

- 6 -

 

 

 

Cardiol Therapeutics Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 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 June 30, 2024, and the date of these financial statements, this condition has not been met.

 

- 7 -

 

 

 

Cardiol Therapeutics Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 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   (23,073)
Accretion   13,006 
Balance, June 30, 2024  $164,273 
Current portion   21,719 
Long-term portion  $142,554 

 

(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 June 30, 2024, the fair value of the derivative liability was $1,355,732 (December 31, 2023 - $238,176), resulting in an (increase)/decrease in the value of the derivative liability for the three and six months ended June 30, 2024 of $691,047 and $(1,117,556) (three and six months ended June 30, 2023 - $(856,893) and $(782,812)).

 

Significant assumptions used in determining the fair value of the derivative warrant liabilities are as follows:

 

   Six Months
Ended		   Six Months
Ended		 
  

June 30,

2024

   June 30,
2023		 
Share price  USD$ 2.02   USD$ 0.89 
Exercise price  USD$ 3.75   USD$ 3.75 
Risk-free interest rate   4.63%   4.54%
Expected volatility   99%   101%
Expected life in years   0.35    1.35 
Expected dividend yield   Nil    Nil 

 

- 8 -

 

 

Cardiol Therapeutics Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 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)   80,000    112,800 
Balance, June 30, 2023   64,127,536   $147,674,648 
           
Balance, December 31, 2023   65,352,279   $148,519,136 
Restricted share units exercised (note 9)   1,596,034    1,919,588 
Stock options exercised (note 9)   175,000    177,510 
Fair value of stock options exercised (note 9)   -    99,263 
Performance share units exercised (note 9)   2,200,000    1,634,038 
Balance, June 30, 2024   69,323,313   $152,349,535 

 

(i) During the six months ended June 30, 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.

 

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.

 

During the three and six months ended June 30, 2024, the total expenses related to share-based compensation amounted to $1,805,586 and $2,707,686 (three and six months ended June 30, 2023 - $666,400 and $1,093,223). All outstanding awards are settleable with common shares and not cash.

 

- 9 -

 

 

Cardiol Therapeutics Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 2024

(Expressed in Canadian Dollars)

Unaudited

 

9.Share-based payments (continued)

 

(a) Stock Options

 

   Number of   Weighted average 
   stock options   exercise price ($) 
Balance, December 31, 2022   1,968,476   $3.52 
Issued   500,000    1.20 
Expired   (780,976)   4.65 
Balance, June 30, 2023   1,687,500   $2.32 
           
Balance, December 31, 2023   1,732,500   $2.44 
Issued   455,000    2.56 
Expired   (185,000)   1.84 
Exercised (i)   (175,000)   1.01 
Balance, June 30, 2024   1,827,500   $2.68 

 

(i) The weighted average share price on date of exercise was $2.62.

 

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:

 

    Six Months
Ended
June 30,
2024		     Six Months
Ended
June 30,
2023		  
Fair value of stock options at grant date   $ 1.79     $ 0.65  
Share price   $ 2.83     $ 1.00  
Exercise price   $ 2.56     $ 1.20  
Risk-free interest rate     3.83 %     3.74 %
Expected volatility     93 %     89 %
Expected life in years     3.13       4.40  
Expected dividend yield     Nil       Nil  

 

- 10 -

 

 

Cardiol Therapeutics Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 2024

(Expressed in Canadian Dollars)

Unaudited

 

9.Share-based payments (continued)

 

The following table reflects the actual stock options issued and outstanding as of June 30, 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    0.65    20,000    20,000 
August 19, 2025   2.12    1.14    100,000    100,000 
August 30, 2025   5.00    1.17    80,000    80,000 
April 1, 2026   5.77    1.75    60,000    60,000 
September 10, 2026   1.37    2.20    25,000    - 
November 29, 2026   2.46    2.42    250,000    - 
December 8, 2026   3.59    2.44    325,000    216,667 
January 11, 2027   2.18    2.53    220,000    146,667 
March 1, 2027   2.56    2.67    350,000    87,500 
March 14, 2027   2.07    2.70    60,000    40,000 
May 12, 2027   1.46    2.87    70,000    46,667 
September 12, 2027   1.61    3.20    207,500    69,168 
October 23, 2028   1.20    4.32    30,000    - 
January 29, 2029   2.56    4.59    30,000    - 
    2.68    2.50    1,827,500    866,669 

 

(b) Performance Share Units

 

   Number of
PSUs		 
Balance, December 31, 2022 and June 30, 2023   600,000 
      
Balance, December 31, 2023   2,000,000 
Issued (i)   300,000 
Redeemed (ii)   (2,200,000)
Balance, June 30, 2024   100,000 

 

(i) Grants of PSUs require completion of certain performance criteria specific to each grant. As the fair value of the services for all PSUs issued cannot be reliably measured, the fair value was determined on the basis of the equity issued. The fair value of PSUs granted was determined based on the Corporation's share price, adjusted by the estimated likelihood of the performance conditions being met.

 

(ii) The weighted average share price on date of exercise was $2.04.

 

- 11 -

 

 

Cardiol Therapeutics Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 2024

(Expressed in Canadian Dollars)

Unaudited

 

9.Share-based payments (continued)

 

(b) Performance Share Units (continued)

 

The following table reflects the actual PSUs issued and outstanding as of June 30, 2024:

 

Expiry date  Weighted average
remaining
contractual
life (years)		   Number of
PSUs
outstanding		   Number of
PSUs
vested
(exercisable)		 
December 31, 2024   0.50    100,000    - 

 

(i) Subsequent to June 30, 2024, 700,000 PSUs were issued.

(ii) Subsequent to June 30, 2024, 450,000 PSUs were redeemed.

 

(c) Restricted Share Units

 

   Number of
RSUs		 
Balance, December 31, 2022   2,312,963 
Issued (i)   1,125,000 
Redeemed (ii)   (80,000)
Balance, June 30, 2023   3,357,963 
      
Balance, December 31, 2023   3,544,887 
Redeemed (iii)   (1,596,034)
Balance, June 30, 2024   1,948,853 

 

(i) The fair value of RSUs granted was determined based on the Corporation's share price.

(ii) The weighted average share price on date of exercise was $0.80.

(iii) The weighted average share price on date of exercise was $1.57.

 

The following table reflects the actual RSUs issued and outstanding as of June 30, 2024:

 

   Weighted average
remaining		   Number of   Number of
RSUs		 
Expiry date  contractual
life (years)		   RSUs
outstanding		   vested
(exercisable)		 
July 31, 2025   1.08    1,914,639    1,452,727 
October 31, 2025   1.34    34,214    34,214 
    1.09    1,948,853    1,486,941 

 

(i) Subsequent to June 30, 2024, 3,626,000 RSUs were issued.

(ii) Subsequent to June 30, 2024, 108,407 RSUs were redeemed.

 

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Cardiol Therapeutics Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 2024

(Expressed in Canadian Dollars)

Unaudited

 

10.Warrants

 

   Number of
warrants		   Amount 
Balance, December 31, 2022 and June 30, 2023   11,628,178   $3,517,867 
           
Balance, December 31, 2023   11,628,178   $3,517,867 
Expired   (3,453,178)   (3,517,867)
Balance, June 30, 2024   8,175,000   $- 

 

The following table reflects the actual warrants issued and outstanding as of June 30, 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):

 

   Exercise   Remaining
contractual		   Warrants 
Expiry date  price ($)   life (years)   exercisable 
November 5, 2024(1)   5.13    0.35    8,175,000 

 

(1) Warrants carry an exercise price of USD$3.75. This amount was translated to CAD for presentation purposes at the June 30, 2024 rate of 1.37. These warrants are classified as a derivative liability on the statement of financial position (see note 7).

 

11.Loss per share

 

For the three and six months ended June 30, 2024, basic and diluted loss per share has been calculated based on the loss attributable to common shareholders of $6,590,873 and $15,770,505, respectively (three and six months ended June 30, 2023 - $7,471,754 and $14,561,090, respectively) and the weighted average number of common shares outstanding of 68,751,105 and 68,005,224, respectively (three and six months ended June 30, 2023 - 64,105,448 and 64,098,586, respectively). 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  $18,459   $17,282   $35,741 
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 
   $230,733   $216,025   $446,758 

 

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Cardiol Therapeutics Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 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  $438,479  

 

(iii) Pursuant to the terms of agreements with various other contract research organizations, the Corporation is committed for the following contract research services:

 

2024  $303,888 
2025   1,176,824 
2026   12,708 
Total  $1,493,420 

 

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		   Three Months
Ended		   Six Months
Ended		   Six Months
Ended		 
   June 30,   June 30,   June 30,   June 30, 
   2024   2023   2024   2023 
Research and development expenses                    

Non-cash share-based compensation

  $26,229   $98,487   $79,573   $195,892 
                     
General and administration expenses                    

Depreciation of property and equipment

  $40,797   $37,385   $81,309   $74,479 
Amortization of intangible assets  $21,111   $21,111   $42,222   $42,222 
Non-cash share-based compensation  $1,779,357   $567,913  $2,628,113   $897,331 

 

14. Related party transactions

 

(a) The Corporation entered into the following transactions with related parties:

 

(i) Included in research and development expense is $109,129 and $737,809 for the three and six months ended June 30, 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.

 

- 14 -

 

 

Cardiol Therapeutics Inc.

Notes to Condensed Interim Consolidated Financial Statements

Three and Six Months Ended June 30, 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

  

Three Months
Ended

  

Six Months

Ended

  

Six Months
Ended

 
   June 30,   June 30,   June 30,   June 30, 
   2024   2023   2024   2023 
Salaries and benefits  $540,335   $534,446   $1,804,739   $1,704,476 
Share-based payments   154,291    262,128    275,731    531,010 
   $694,626   $796,574   $2,080,470   $2,235,486 

 

As at June 30, 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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