Cardiol Therapeutics Inc.

Artificial Intelligence

Artificial intelligence (“AI”) and advanced data-driven tools are increasingly used in the pharmaceutical industry and healthcare to support functions such as data analysis, forecasting, supply chain optimization, regulatory processes and commercial operations. While these technologies offer efficiency, they also carry risks, including reliance on flawed or biased data or algorithms, which may lead to incorrect decisions, operational disruptions, compliance issues and reputational harm. AI systems can be difficult to validate and audit especially in regulated environments which may raise compliance risks.

In addition, regulatory frameworks globally are rapidly evolving and differ across various jurisdictions. New legislation or regulatory guidance may increase costs, limit the utility of AI systems, or expose the Corporation to certain liabilities. The Corporation’s third-party suppliers may also use AI systems, and any failure, misuse or breach of these systems could compromise sensitive data, disrupt operations or enable sophisticated cyber-attacks and fraud. If any of these risks from AI systems were to materialize, they could significantly impact the Corporation’s business, financial condition, operations and cash flows.