UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 40-F
(Check One)
¨ REGISTRATION STATEMENT PURSUANT
TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
OR
x ANNUAL REPORT PURSUANT TO SECTION 13(a)
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| For the fiscal year ended: December 31, 2021 |
Commission File Number: 001-40712 |
Cardiol Therapeutics
Inc.
(Exact name of Registrant as specified in its charter)
Not Applicable
(Translation of Registrant’s name into English (if applicable))
Ontario
(Province or other jurisdiction of incorporation or organization)
2836
(Primary Standard Industrial Classification Code Number (if applicable))
Not Applicable
(I.R.S. Employer Identification Number (if applicable))
2265 Upper Middle Road East, Suite 602
Oakville, Ontario
L6H 0G5
(289) 910-0850
(Address and telephone number of Registrant’s principal executive offices)
CT Corporation System
1015 15th Street N.W., Suite 1000
Washington, D.C., 20005
(202) 572-3111
(Name, address (including zip code) and telephone number (including area code) of agent for service in the United States)
Securities registered or to be registered pursuant
to Section 12(b) of the Act:
| Title of each class |
Ticker Symbol(s) |
Name of each exchange
on which registered |
| Class A Common Shares |
CRDL |
The NASDAQ Stock Market LLC |
Securities registered or to be registered pursuant
to Section 12(g) of the Act:
None
(Title of Class)
Securities for which there is a reporting obligation
pursuant to Section 15(d) of the Act:
None
(Title of Class)
For annual reports, indicate by check mark the
information filed with this Form:
x Annual information form x Audited annual financial statements
Indicate the number of outstanding shares of each
of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 61,922,999
Indicate by check mark whether the Registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past
90 days.
YES x NO ¨
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
YES x NO ¨
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.
Emerging growth company x
If an emerging growth company that prepares its
financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ¨
EXPLANATORY NOTE
Cardiol Therapeutics Inc. (the “Registrant”)
is a Canadian corporation eligible to file its Annual Report pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), on Form 40-F. The Registrant is a “foreign private issuer” as defined in Rule 3b-4
under the Exchange Act. Equity securities of the Registrant are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of
the Exchange Act pursuant to Rule 3a12-3 thereunder.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
Certain statements in this Annual Report on Form
40-F are forward-looking statements within the meaning of Section 21E of the Exchange Act and Section 27A of the Securities Act of 1933,
as amended (the “Securities Act”). Additionally, the safe harbor provided in Section 21E of the Exchange Act and Section
27A of the Securities Act applies to any forward-looking information provided pursuant to “Off-Balance Sheet Arrangements”
and “Disclosure of Contractual Obligations” in this Annual Report on Form 40-F. Please see “Forward-Looking Information”
beginning on page 1 of the Management Discussion and Analysis for the fiscal year ended December 31, 2021 of the Registrant, attached
as Exhibit 99.3 to this Annual Report on Form 40-F, and “Forward-Looking Information” beginning on page 6 of the Annual Information
Form for the fiscal year ended December 31, 2021 of the Registrant, attached as Exhibit 99.1 to this Annual Report on Form 40-F.
DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING
PRACTICES
The Registrant is permitted, under a multijurisdictional
disclosure system adopted by the United States, to prepare this Annual Report on Form 40-F in accordance with Canadian disclosure requirements,
which are different from those of the United States.
The Registrant prepares its financial
statements, which are filed with this Annual Report on Form 40-F, in accordance with International Financial Reporting Standards, as issued
by the International Accounting Standards Board (“IFRS”). Such financial statements may not be comparable to financial
statements prepared in accordance with United States generally accepted accounting principles.
Unless otherwise indicated, all dollar amounts
in this Annual Report on Form 40-F are in Canadian dollars. The exchange rate of Canadian dollars into United States dollars, on December
31, 2021, based upon the Bank of Canada published daily average exchange rate, was U.S.$1.00 = CDN$1.2678.
Purchasing, holding, or disposing of securities
of the Registrant may have tax consequences under the laws of the United States and Canada that are not described in this Annual Report
on Form 40-F.
PRINCIPAL DOCUMENTS
Annual Information Form
The Registrant’s Annual Information Form
for the fiscal year ended December 31, 2021 is filed as Exhibit 99.1 and incorporated by reference in this Annual Report on Form 40-F.
Audited Annual Financial Statements
The audited financial statements
of the Registrant for the fiscal year ended December 31, 2021, including the Independent Auditor’s Report with respect thereto,
are filed as Exhibit 99.2 and incorporated by reference in this Annual Report on Form 40-F.
Management Discussion and Analysis
The Registrant’s Management Discussion
and Analysis for the fiscal year ended December 31, 2021 is filed as Exhibit 99.3 and incorporated by reference in this Annual Report on Form 40-F.
CONTROLS AND PROCEDURES
Certifications
The required certifications are included in
Exhibits 99.4, 99.5, 99.6
and 99.7 of this Annual Report on Form 40-F.
Disclosure Controls and Procedures
At the end of the period covered by this report,
an evaluation of the effectiveness of the design and operation of the Registrant’s “disclosure controls and procedures”
(as such term is defined in Rules 13a-15(e) under the Exchange Act) was carried out by the Registrant’s principal executive officer
(the “CEO”) and principal financial officer (the “CFO”). Based upon that evaluation, the Registrant’s
CEO and CFO have concluded that, as of the end of the period covered by this report, the design and operation of the Registrant’s
disclosure controls and procedures are effective to ensure that (i) information required to be disclosed in reports that the Registrant
files or submits to regulatory authorities is recorded, processed, summarized and reported within the time periods specified by regulation,
and (ii) is accumulated and communicated to management, including the Registrant’s CEO and CFO, to allow timely decisions regarding
required disclosure.
It should be noted that while the Registrant’s
CEO and CFO believe that the Registrant’s disclosure controls and procedures provide a reasonable level of assurance that they are
effective, they do not expect that the Registrant’s disclosure controls and procedures will prevent all errors and fraud. A control
system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control
system are met.
Management Report on Internal Control Over
Financial Reporting & Auditor Attestation
This annual report does not include a report of
management’s assessment regarding internal control over financial reporting or an attestation report of the Registrant’s registered
public accounting firm due to a transition period established by rules of the Commission for newly public companies.
Changes in Internal Control over Financial
Reporting
During the year ended December 31, 2021, there
were no changes in the Registrant’s internal control over financial reporting that have materially affected, or are reasonably likely
to materially affect, the Registrant’s internal control over financial reporting.
NOTICES PURSUANT TO REGULATION BTR
There were no notices required by Rule 104 of
Regulation BTR that the Registrant sent during the year ended December 31, 2021 concerning any equity security subject to a blackout period
under Rule 101 of Regulation BTR.
AUDIT COMMITTEE AND AUDIT COMMITTEE FINANCIAL
EXPERT
Audit Committee
The Board of Directors has a separately-designated
standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act for the purpose of overseeing the accounting
and financial reporting processes of the Registrant and audits of the Registrant’s annual financial statements. As of the date of
this Annual Report on Form 40-F, the members of the Audit Committee are Mr. Michael J. Willner (Chair), Dr. Guillermo Torre-Amione and
Mr. Colin Stott.
The Board of Directors of the Registrant has determined
that Mr. Willner and Mr. Stott are “independent,” as such term is defined under the rules of The NASDAQ Stock Market LLC (“NASDAQ”)
pertaining to audit committees. Dr. Guillermo Torre-Amione is not considered “independent,” as such term is defined under
the rules of NASDAQ pertaining to audit committees. The Registrant is relying upon the phase-in provisions of Rule 5615(b) for the Audit
Committee composition requirement as at the date of this Form 40-F. The Registrant has determined that all members of the Audit Committee
are financially literate, meaning that they must be able to read and understand fundamental financial statements.
Audit Committee Financial Expert
The Board of Directors of the Registrant has determined
that the Chair of the Audit Committee, Mr. Michael Willner, is financially sophisticated, as described in NASDAQ Rule 5605(c)(2)(A), but
is not an “audit committee financial expert,” as defined in General Instruction B(8)(b) of Form 40-F. The Registrant believes
that this is appropriate for the current stage of development of the Registrant, but is evaluating additional candidates for the Board,
some of whom may be considered an “audit committee financial expert.”
CODE OF ETHICS
The Registrant has adopted a written code of ethics
for its directors, officers and employees entitled “Code of Conduct and Ethics” (the “Code”) that complies
with Section 406 of the Sarbanes-Oxley Act of 2002 and with NASDAQ Listing Rule 5610. The Code includes, among other things, written standards
for the Registrant’s CEO, CFO and principal accounting officer or controller, or persons performing similar functions, which are
required by the Commission for a code of ethics applicable to such officers. A copy of the Code is posted on the Registrant’s website
at www.cardiolrx.com under “Investors/Corporate Governance/Governance Documents.”
No substantive amendments to the Code were adopted
during the year ended December 31, 2021. No “waiver” or “implicit waiver,” as such terms are defined in Note 6
to General Instruction B(9) of Form 40-F, was granted relating to any provision of the Code during the year ended December 31, 2021.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
BDO Canada LLP served as the Registrant’s
independent audit firm for the fiscal years ended December 31, 2020 and December 31, 2021. Aggregate fees billed to the Registrant for
professional services rendered by BDO Canada LLP and its affiliates during the fiscal years ended December 31, 2020 and December 31, 2021
are detailed below (stated in Canadian dollars):
| | |
Fiscal Year Ended December 31, 2021 | | |
Fiscal Year Ended December 31, 2020 | |
| Audit Fees | |
$ | 105,000 | | |
$ | 90,000 | |
| Audit-Related Fees | |
$ | 58,300 | | |
$ | 40,000 | |
| Tax Fees | |
$ | 0 | | |
$ | nil | |
| All Other Fees | |
$ | 84,800 | | |
$ | 20,000 | |
| Total Fees | |
$ | 248,100 | | |
$ | 150,000 | |
The nature of each category of fees is as follows:
Audit Fees
Audit Fees are the aggregate fees billed by the
Corporation’s external auditor for services provided for the audit of Cardiol’s annual financial statements.
Audit-Related Fees
Audit-Related Fees are the aggregate fees billed
for assurance and related services by the Corporation’s external auditor that are reasonably related to the performance of the audit
or review of the Corporation’s financial statements.
Tax Fees
Tax Fees are the aggregate fees billed by Cardiol’s
external auditor for tax compliance, tax advice and tax planning services.
All Other Fees
All Other Fees are the aggregate fees billed by
Cardiol’s external auditor for products and services not included in the other categories of fees described above such as work associated
with the filing of prospectuses by the Corporation.
Pre-Approval Policies and Procedures
All audit and non-audit services performed by
the Registrant’s auditor must be pre-approved by the Audit Committee of the Registrant. For the fiscal year ended December 31, 2021,
all audit and non-audit services performed by the Registrant’s auditor were pre-approved by the Audit Committee of the Registrant,
pursuant to Rule 2-01(c)(7)(i) of Regulation S-X.
OFF-BALANCE SHEET ARRANGEMENTS
As of December 31, 2021, the Registrant does not
have any “off-balance sheet arrangements” (as that term is defined in paragraph 11(ii) of General Instruction B to Form 40-F)
that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues
or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
DISCLOSURE OF CONTRACTUAL OBLIGATIONS
For information on contractual obligations, see “Contractual
Obligations” in the Registrant’s Management Discussion & Analysis for the fiscal year ended December 31, 2021.
MINE SAFETY DISCLOSURE
Not applicable.
CORPORATE GOVERNANCE
The Registrant is a “foreign private issuer”
as defined in Rule 3b-4 under the Exchange Act and its common shares are listed on NASDAQ. NASDAQ Marketplace Rule 5615(a)(3) permits
a foreign private issuer to follow its home country practices in lieu of certain requirements in the NASDAQ Listing Rules. A foreign private
issuer that follows home country practices in lieu of certain corporate governance provisions of the NASDAQ Listing Rules must disclose
each NASDAQ corporate governance requirement that it does not follow and include a brief statement of the home country practice the issuer
follows in lieu of the NASDAQ corporate governance requirement(s), either on its website or in its annual filings with the Commission.
A description of the significant ways in which the Registrant’s corporate governance practices differ from those followed by domestic
companies pursuant to the applicable NASDAQ Listing Rules is disclosed on the Registrant’s website at www.cardiolrx.com under “Investors/Corporate
Governance/Governance Documents/Nasdaq Statement of Governance Differences.”
UNDERTAKING
The Registrant undertakes to make available, in
person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested
to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation
to which the obligation to file an Annual Report on Form 40-F arises; or transactions in said securities.
CONSENT TO SERVICE OF PROCESS
The Registrant filed an Appointment of Agent for
Service of Process and Undertaking on Form F-X with the Commission on July 8, 2021 with respect to the class of securities in relation
to which the obligation to file this Annual Report on Form 40-F arises.
Any change to the name or address of the Registrant’s
agent for service of process shall be communicated promptly to the Commission by an amendment to the Form F-X referencing the file number
of the Registrant.
EXHIBIT INDEX
* To be filed by amendment.
SIGNATURES
Pursuant to the requirements of the Exchange Act,
the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this Annual Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
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Cardiol Therapeutics Inc. |
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By: |
/s/ Chris Waddick |
| |
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Name: Chris Waddick |
| |
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Title: Chief Financial Officer |
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| Date: March 23, 2022 |
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