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Cardiol Therapeutics Closes $10.5 Million Private Placement

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Toronto, Ontario, May 24, 2018 – Cardiol Therapeutics Inc. (“Cardiol” or the “Company”), a nanotherapeutics company focused on advancing the treatment of heart failure by developing proprietary formulations designed to deliver cannabinoids and other drugs to inflamed tissue in the heart, is pleased to announce the successful closing of a brokered private placement (the “Private Placement”) of approximately $10.5 million principal amount of unsecured convertible debentures of the Company. AltaCorp Capital Inc. acted as exclusive financial advisor to the Company and sole agent on the Private Placement.

“This placement represents a significant achievement for Cardiol Therapeutics, as it provides the Company with the financial resources to advance the development of important anti-inflammatory and anti-fibrotic therapies for heart failure and accelerate the commercial development of pharmaceutically-produced cannabidiol formulations for the growing medicinal cannabinoids market,” said David Elsley, President & CEO of Cardiol.

Heart failure is a chronic condition that affects more than 26 million people globally. Over six million adults in Canada and the United States suffer from heart failure, and it remains a leading cause of death and hospitalization with associated healthcare costs exceeding $30 billion annually. People with heart failure experience shortness of breath, fatigue, rapid heart rate, edema, reduced exercise capacity, and a marked reduction in quality of life. Approximately half of all heart failure patients have heart failure with preserved ejection fraction (HFpEF), for which there have been no new therapies developed in over 20 years.

Inflammation and fibrosis are key contributing factors in the development and progression of HFpEF that are not being adequately addressed by available treatments. Cardiol is utilizing nanotechnology to improve the treatment options available to this large heart failure population by developing proprietary nanoformulations designed to optimize and maintain blood levels of anti-inflammatory and anti-fibrotic drugs and target their action to sites of inflammation and fibrosis in the failing heart.

In collaboration with the Company’s exclusive manufacturing partner Dalton Pharma Services, Cardiol is also developing unique manufacturing expertise in the production of pharmaceutically-produced cannabinoids. With the de-scheduling of cannabinoids from the Canadian Controlled Drug Substance Act expected to occur during the second half of 2018, Cardiol believes there is a significant opportunity to utilize this manufacturing expertise to produce pharmaceutical cannabinoids for commercial introduction to the growing market for medicinal cannabinoids.

The net proceeds of the Private Placement will be used to advance the Company’s nanotherapeutics pipeline into clinical development, to pursue the development of pharmaceutically-produced cannabinoid formulations for commercialization, and for general corporate purposes.

About Cardiol Therapeutics

Cardiol Therapeutics, www.cardiolrx.com, is a nanotherapeutics company focused on the research and commercial development of proprietary drug formulations for the treatment of heart failure. The Company is collaborating with researchers and opinion leaders at international centers of excellence to leverage multidisciplinary expertise in drug delivery, drug formulation, nanotherapeutics, cardiac physiology, and heart failure. These research collaborations provide Cardiol with the optimal platform on which to pursue the commercial development of important anti-inflammatory and anti-fibrotic therapies for heart failure. Heart failure is a chronic condition affecting over six million adults in Canada and the United States and it remains a leading cause of death and hospitalization, with associated healthcare costs exceeding $30 billion annually. Approximately half of all heart failure patients have heart failure with preserved ejection fraction (HFpEF), for which there have been no new therapies developed in over 20 years. Cardiol is developing CTX01, a proprietary nanoformulation of pharmaceutical cannabidiol for the treatment of HFpEF. Cannabidiol has been shown to attenuate cardiac dysfunction in experimental models of diabetic cardiomyopathy and to decrease oxidative stress, fibrosis, and inflammation in other models relevant to HFpEF. CTX01 is designed to optimize and maintain blood levels of cannabidiol and target the drug to areas of inflammation in the heart. Cardiol is also developing CTX02, a proprietary nanoformulation of methotrexate, and CTX03, a proprietary nanoformulation of encapsulated Cyclosporine A (CsA), both for the treatment of heart failure. Additionally, in collaboration with the Company’s exclusive manufacturing partner Dalton Pharma Services, Cardiol is developing unique manufacturing expertise in the production of pharmaceutically-produced cannabinoids. With the de-scheduling of cannabinoids from the Canadian Controlled Drug Substance Act expected to occur during the second half of 2018, Cardiol believes there is a significant opportunity to utilize this manufacturing expertise to produce pharmaceutical cannabinoids for commercial introduction to the growing market for medicinal cannabinoids.

Contacts

David Elsley

President & CEO

Trevor Burns

Investor Relations

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