**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**Washington, D.C. 20549

**FORM 40-F**

(Check One)

 ̈ REGISTRATION STATEMENT PURSUANTTO 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 TherapeuticsInc.**(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 System1015 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 pursuantto Section 12(b) of the Act:

 

| Title of each class       | Ticker Symbol(s) | Name of each exchangeon which registered |
|---------------------------|------------------|------------------------------------------|
| **Class A Common Shares** | **CRDL**         | **The NASDAQ Stock Market LLC**          |

 

Securities registered or to be registered pursuantto Section 12(g) of the Act:

 

**None**(Title of Class)

 

Securities for which there is a reporting obligationpursuant to Section 15(d) of the Act:

 

**None**(Title of Class)

 

For annual reports, indicate by check mark theinformation filed with this Form:

 

x Annual information form x Audited annual financial statements

 

Indicate the number of outstanding shares of eachof 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 suchshorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past90 days.

 

YES x NO  ̈

 

Indicate by check mark whether the registranthas submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405of 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 registrantis 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 itsfinancial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transitionperiod 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 registranthas filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financialreporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared orissued 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-4under the Exchange Act. Equity securities of the Registrant are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 ofthe Exchange Act pursuant to Rule 3a12-3 thereunder.

 

**CAUTIONARY STATEMENT REGARDING FORWARD-LOOKINGSTATEMENTS**

 

Certain statements in this Annual Report on Form40-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 Section27A 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, attachedas Exhibit 99.3 to this Annual Report on Form 40-F, and “Forward-Looking Information” beginning on page 6 of the Annual InformationForm 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 REPORTINGPRACTICES**

 

The Registrant is permitted, under a multijurisdictionaldisclosure 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 financialstatements, which are filed with this Annual Report on Form 40-F, in accordance with International Financial Reporting Standards, as issuedby the International Accounting Standards Board (“**IFRS**”). Such financial statements may not be comparable to financialstatements prepared in accordance with United States generally accepted accounting principles.

 

Unless otherwise indicated, all dollar amountsin this Annual Report on Form 40-F are in Canadian dollars. The exchange rate of Canadian dollars into United States dollars, on December31, 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 securitiesof the Registrant may have tax consequences under the laws of the United States and Canada that are not described in this Annual Reporton Form 40-F.

 

 

 

 

**PRINCIPAL DOCUMENTS**

 

***Annual Information Form***

 

The Registrant’s Annual Information Formfor 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 statementsof 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 Discussionand 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 inExhibits 99.4, 99.5, 99.6and 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’sCEO and CFO have concluded that, as of the end of the period covered by this report, the design and operation of the Registrant’sdisclosure controls and procedures are effective to ensure that (i) information required to be disclosed in reports that the Registrantfiles 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 regardingrequired disclosure.

 

It should be noted that while the Registrant’sCEO and CFO believe that the Registrant’s disclosure controls and procedures provide a reasonable level of assurance that they areeffective, they do not expect that the Registrant’s disclosure controls and procedures will prevent all errors and fraud. A controlsystem, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the controlsystem are met.

 

***Management Report on Internal Control OverFinancial Reporting & Auditor Attestation***

 

This annual report does not include a report ofmanagement’s assessment regarding internal control over financial reporting or an attestation report of the Registrant’s registeredpublic accounting firm due to a transition period established by rules of the Commission for newly public companies.

 

***Changes in Internal Control over FinancialReporting***

 

During the year ended December 31, 2021, therewere no changes in the Registrant’s internal control over financial reporting that have materially affected, or are reasonably likelyto materially affect, the Registrant’s internal control over financial reporting.

 

 

 

 

**NOTICES PURSUANT TO REGULATION BTR**

 

There were no notices required by Rule 104 ofRegulation BTR that the Registrant sent during the year ended December 31, 2021 concerning any equity security subject to a blackout periodunder Rule 101 of Regulation BTR.

 

**AUDIT COMMITTEE AND AUDIT COMMITTEE FINANCIALEXPERT**

 

***Audit Committee***

 

The Board of Directors has a separately-designatedstanding Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act for the purpose of overseeing the accountingand financial reporting processes of the Registrant and audits of the Registrant’s annual financial statements. As of the date ofthis Annual Report on Form 40-F, the members of the Audit Committee are Mr. Michael J. Willner (Chair), Dr. Guillermo Torre-Amione andMr. Colin Stott.

 

The Board of Directors of the Registrant has determinedthat 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 underthe rules of NASDAQ pertaining to audit committees. The Registrant is relying upon the phase-in provisions of Rule 5615(b) for the AuditCommittee composition requirement as at the date of this Form 40-F. The Registrant has determined that all members of the Audit Committeeare 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 determinedthat the Chair of the Audit Committee, Mr. Michael Willner, is financially sophisticated, as described in NASDAQ Rule 5605(c)(2)(A), butis not an “audit committee financial expert,” as defined in General Instruction B(8)(b) of Form 40-F. The Registrant believesthat 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 ethicsfor its directors, officers and employees entitled “Code of Conduct and Ethics” (the “**Code**”) that complieswith Section 406 of the Sarbanes-Oxley Act of 2002 and with NASDAQ Listing Rule 5610. The Code includes, among other things, written standardsfor the Registrant’s CEO, CFO and principal accounting officer or controller, or persons performing similar functions, which arerequired by the Commission for a code of ethics applicable to such officers. A copy of the Code is posted on the Registrant’s websiteat www.cardiolrx.com under “Investors/Corporate Governance/Governance Documents.”

 

 

No substantive amendments to the Code were adoptedduring the year ended December 31, 2021. No “waiver” or “implicit waiver,” as such terms are defined in Note 6to 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’sindependent audit firm for the fiscal years ended December 31, 2020 and December 31, 2021. Aggregate fees billed to the Registrant forprofessional services rendered by BDO Canada LLP and its affiliates during the fiscal years ended December 31, 2020 and December 31, 2021are 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 theCorporation’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 billedfor assurance and related services by the Corporation’s external auditor that are reasonably related to the performance of the auditor review of the Corporation’s financial statements.

 

 ***Tax Fees***

 

Tax Fees are the aggregate fees billed by Cardiol’sexternal auditor for tax compliance, tax advice and tax planning services. 

 

***All Other Fees***

 

All Other Fees are the aggregate fees billed byCardiol’s external auditor for products and services not included in the other categories of fees described above such as work associatedwith the filing of prospectuses by the Corporation.

 

 ***Pre-Approval Policies and Procedures***

 

All audit and non-audit services performed bythe 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 nothave 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, revenuesor 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 “ContractualObligations” 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) permitsa foreign private issuer to follow its home country practices in lieu of certain requirements in the NASDAQ Listing Rules. A foreign privateissuer that follows home country practices in lieu of certain corporate governance provisions of the NASDAQ Listing Rules must discloseeach NASDAQ corporate governance requirement that it does not follow and include a brief statement of the home country practice the issuerfollows 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 domesticcompanies pursuant to the applicable NASDAQ Listing Rules is disclosed on the Registrant’s website at www.cardiolrx.com under “Investors/CorporateGovernance/Governance Documents/Nasdaq Statement of Governance Differences.”

 

 

 

 

**UNDERTAKING**

 

The Registrant undertakes to make available, inperson or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requestedto do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relationto 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 forService of Process and Undertaking on Form F-X with the Commission on July 8, 2021 with respect to the class of securities in relationto which the obligation to file this Annual Report on Form 40-F arises.

 

Any change to the name or address of the Registrant’sagent for service of process shall be communicated promptly to the Commission by an amendment to the Form F-X referencing the file numberof the Registrant.

 

 

 

 

**EXHIBIT INDEX**

 

| **Exhibit No.** | **Title of Exhibit**                                                                                                                                                |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 99.1            | Annual Information Form of the Registrant for the year ended December 31, 2021                                                                                      |
|            |                                                                                                                                                                |
| 99.2            | Audited Financial Statements of the Registrant for the year ended December 31, 2021, together with the Auditors’ Report thereon                               |
|            |                                                                                                                                                                |
| 99.3            | Management Discussion and Analysis of the Registrant for the year ended December 31, 2021                                                                           |
|            |                                                                                                                                                                |
| 99.4            | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the United States Securities Exchange Act of 1934                      |
|            |                                                                                                                                                                |
| 99.5            | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the United States Securities Exchange Act of 1934                      |
|            |                                                                                                                                                                |
| 99.6            | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the United States Sarbanes Oxley Act of 2002 |
|            |                                                                                                                                                                |
| 99.7            | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the United States Sarbanes Oxley Act of 2002 |
|            |                                                                                                                                                                |
| 99.8            | Consent of Independent Registered Public Accounting Firm – BDO Canada LLP                                                                                     |
|            |                                                                                                                                                                |
| 101*            | Interactive Data File (formatted as Inline XBRL)                                                                                                                    |
|            |                                                                                                                                                                |
| 104*            | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)                                                                            |

 

* 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 signedon its behalf by the undersigned, thereunto duly authorized.

 

|                 | **Cardiol Therapeutics Inc.** |
|----------------------|-------------------------------|
|                 |                          |   |
|                 | By:                           | /s/ *Chris Waddick* |
|                 |                          | Name: Chris Waddick |
|                 |                          | Title: Chief Financial Officer |
|                 |                          |   |
| Date: March 23, 2022 |                          |   |