Cardiol closes $11.4-million (U.S.) financing

Mr. David Elsley reports CARDIOL THERAPEUTICS COMPLETES US$11.4 MILLION FINANCING AND EXTENDS CASH RUNWAY INTO Q3 2027 Cardiol Therapeutics Inc. has successfully completed the previously announced private placement offering of units for total proceeds of $11.4-million (U.S.), reflecting closing on all funds previously committed under the offering. "As recruitment in our pivotal phase III Maveric trial gains momentum, with several prominent centres across the U.S. now enrolling patients, we are pleased to have secured a direct investment of $11.4-million (U.S.) to strengthen our balance sheet and accelerate the development of our novel heart failure drug, CRD-38, based on the recently reported findings from our Archer trial," said David Elsley, president and chief executive officer of Cardiol Therapeutics. "Top-line results from our Archer trial demonstrated a significant reduction in LV [left ventricle] mass -- marking the first evidence of structural and remodelling improvement in patients with myocarditis. This landmark finding represents our second clinical validation in inflammatory heart disease and establishes a key translational link to data published earlier this year in the Journal of the American College of Cardiology, which demonstrated the beneficial effects of the active pharmaceutical ingredient (or API) in CardiolRx on cardiac structure, inflammation and fibrosis in a model of heart failure. The Archer findings support pursuing an additional orphan drug designation for CardiolRx in myocarditis and advancing the development of our next-generation CRD-38 formulation, which delivers the same API via subcutaneous administration, to target the broader heart failure market. Notably, blockbuster drugs that reduce LV mass have been shown to lower heart-failure-related death and hospitalization, underscoring the clinical potential of Cardiol's differentiated anti-inflammatory mechanism to address a large unmet need in heart failure, where five-year mortality rates still exceed 50 per cent." Under the offering, the company sold a total of 11.4 million units at a price of $1 (U.S.) per unit. Each unit consists of one Class A common share of the company and one-half of one common share purchase warrant. Each whole warrant entitles the holder to acquire one additional common share at an exercise price of $1.35 (U.S.) for a period of 24 months from the date of issuance. The warrants include an acceleration provision, allowing the company to advance their expiry to the 30th day following the issuance of a news release if the daily volume-weighted average trading price of the common shares exceeds $2 (U.S.) for five consecutive trading days. Proceeds from the offering provide cash resources that are anticipated to support operations into the third quarter of 2027. Certain insiders of the company participated in the offering. Such participation is considered to be a related party transaction within the meaning of Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The company is relying on the exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in respect of related party participation in the offering as the fair market value (as determined under MI 61-101) of the subject matter of and the fair market value of the consideration for the transaction, insofar as it involved interested parties, did not exceed 25 per cent of the company's market capitalization (as determined under MI 61-101). About Cardiol Therapeutics Inc. Cardiol Therapeutics is a clinical-stage life sciences company advancing late-stage, anti-inflammatory and anti-fibrotic therapies for heart disease. The company's lead small-molecule drug candidate, CardiolRx, modulates inflammasome pathway activation, an intracellular process known to play an important role in the development and progression of inflammation and fibrosis associated with pericarditis, myocarditis and heart failure. The Maveric program in recurrent pericarditis, an inflammatory disease of the pericardium, which is associated with symptoms including debilitating chest pain, shortness of breath and fatigue and results in physical limitations, reduced quality of life, emergency department visits and hospitalizations, comprises the completed phase II Maveric pilot study (NCT05494788) and the continuing pivotal phase III Maveric trial (NCT06708299). The U.S. Food and Drug Administration has granted orphan drug designation to CardiolRx for the treatment of pericarditis, which includes recurrent pericarditis. The Archer program (NCT05180240) comprises the completed phase II study in acute myocarditis, an important cause of acute and fulminant heart failure in young adults and a leading cause of sudden cardiac death in people less than 35 years of age. Cardiol is also developing CRD-38, a novel subcutaneously administered drug formulation intended for use in heart failure -- a leading cause of death and hospitalization in the developed world, with associated health care costs in the United States exceeding $30-billion (U.S.) annually. We seek Safe Harbor.