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ARTELO BIOSCIENCES, INC.

ARTL
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Business Summary

Artelo Biosciences, Inc. is a clinical-stage biopharmaceutical company focused on developing therapeutics that target lipid-signaling modulation pathways, including the endocannabinoid system (ECS) . The company's core business model revolves around the research, development, and eventual commercialization of ethical pharmaceutical products that modulate lipid signaling. Revenue generation is currently limited, with the company not having generated any revenue from product sales to date and not expecting to in the near future . The primary customer segments, once products are approved, would be patients via prescription or physician orders . The company plans to retain rights to internally develop and commercialize products but may seek collaborations with biopharmaceutical partners to maximize stockholder value .

The company's product candidate pipeline includes ART27.13, a synthetic dual cannabinoid (CB) agonist targeting CB1 and CB2 peripheral receptors, which is being developed as a potential treatment for cancer-related anorexia . This program is currently in a Phase 1b/2a trial, titled the Cancer Appetite Recovery Study (CAReS) . Interim analysis from the Phase 2a CAReS trial showed patients receiving ART27.13 demonstrated a mean weight gain of over 6% compared to a 5% loss in the placebo group, with a safety profile similar to Phase 1b despite higher doses . There is currently no FDA-approved treatment for cancer anorexia cachexia syndrome . The estimated global market size for cancer anorexia cachexia syndrome is over $3 billion .

Another key product candidate is ART26.12, a small molecule from the company's library of fatty acid binding protein (FABP) inhibitors, specifically targeting FABP5 . ART26.12 is being developed to treat chemotherapy-induced peripheral neuropathy (CIPN) and has completed enrollment for a Phase 1 clinical trial in healthy subjects . Favorable results from this first-in-human study were announced in June 2025, showing mild, transient, and self-resolving adverse events, no drug-related adverse events in the blinded dataset, and dose-dependent, linear absorption across the evaluated range . ART26.12 also has potential broad applications as a cancer therapeutic, for dermatologic conditions like psoriasis, for pain and inflammation, and in anxiety-related disorders such as post-traumatic stress disorder (PTSD) . The estimated global market sizes for its potential indications are over $2 billion for CIPN, approximately $13 billion for prostate cancer, approximately $33 billion for breast cancer, $31 billion for psoriasis, and approximately $13 billion for PTSD .

The third product candidate, ART12.11, is a wholly-owned, proprietary cocrystal composition of cannabidiol (CBD) and tetramethylpyrazine (TMP) . ART12.11 has shown improved pharmacokinetics and efficacy compared to other forms of CBD in nonclinical studies, with enhanced pharmaceutical properties including physicochemical, pharmacokinetic, and pharmacodynamic advantages . The U.S. composition of matter patent for ART12.11 is enforceable until December 10, 2038, and has been granted or validated in 21 additional countries . The company plans to develop ART12.11 for multiple potential indications where CBD has shown activity, such as anxiety disorders including PTSD, depression, epilepsy, and insomnia . The estimated global market sizes for anxiety disorders and PTSD are both over $13 billion .

For the fiscal year ended December 31, 2025, the company reported total operating expenses of $11.404 million , an increase from $10.108 million in 2024 . This resulted in a loss from operations of $11.404 million . After accounting for other income (expense) of $(1.475) million , the net loss for the period was $12.879 million , compared to a net loss of $9.826 million in 2024 . Basic and diluted loss per common share was $(12.52) for 2025, compared to $(18.30) for 2024. Cash used in operating activities was $8.520 million in 2025, an increase from $8.350 million in 2024. As of December 31, 2025, cash and cash equivalents were $0.6 million , and the company had a negative working capital of $3.349 million . Total liabilities were $4.073 million , and total stockholders' deficit was $(1.272) million .

Year-over-year, operating expenses increased by $1.296 million , primarily due to increased professional fees related to financing activities and higher stock-based compensation, partially offset by a decrease in research and development activities . General and administrative expenses rose to $5.981 million in 2025 from $4.115 million in 2024, an increase of $1.866 million . Research and development expenses decreased to $5.423 million in 2025 from $5.993 million in 2024, a decrease of $0.570 million . The net loss widened by $3.053 million from 2024 to 2025. Cash used in investing activities shifted from a provision of $7.769 million in 2024 to a use of $0.062 million in 2025, primarily due to the purchase and subsequent sale of Solana cryptocurrency in 2025, contrasting with dispositions of trading marketable securities in 2024 . Cash provided by financing activities significantly increased to $6.867 million in 2025 from $0.112 million in 2024, driven by net proceeds from common share issuance of $6.151 million , convertible notes of $0.419 million , and warrant exercises of $0.132 million .

Significant operational developments during the period include the announcement of favorable interim results from the Phase 2a CAReS trial for ART27.13 on September 3, 2025, showing compelling increases in mean body weight of 6.38% in the treatment group compared to a -5.42% loss in the placebo group after 12 weeks of treatment in titrated patients . The company also announced favorable results from its first-in-human study evaluating ART26.12 in June 2025, demonstrating safety, tolerability, and dose-dependent, linear absorption in healthy volunteers . In terms of financing, the company engaged in several equity and debt offerings, including a private placement in June 2025 raising $1.079 million net proceeds , an At-The-Market Offering Agreement in July 2025 under which $0.442 million net proceeds were generated , and two underwritten offerings in September 2025 yielding net proceeds of $2.690 million and $1.760 million respectively. The company also issued unsecured convertible notes with gross proceeds of $0.900 million in May 2025 , which were subsequently converted into new convertible notes and warrants in October 2025 .

Business Outlook

The company explicitly states that it has not generated any revenue to date and does not expect to generate any revenue from product sales or other sources for at least the next several years, if at all . It anticipates incurring significant operating losses for the foreseeable future until the development and approval of one of its product candidates is complete . The company expects to continue funding its operations primarily through additional capital raises .

A major growth area for the company is the continued development of ART27.13 for cancer-related anorexia, which is currently in a Phase 1b/2a trial . Interim analysis from the Phase 2a CAReS trial has shown promising results, with patients receiving ART27.13 demonstrating a mean weight gain of over 6% compared to a 5% loss in the placebo group . The company has received regulatory approval in the UK, Ireland, and Norway to increase the daily dose up to 1,300 micrograms and to enroll 40 evaluable patients into the Phase 2a stage with a 3:1 randomization of ART27.13 to placebo . The estimated global market size for cancer anorexia cachexia syndrome is over $3 billion , representing a significant market opportunity if ART27.13 achieves regulatory approval.

Another significant growth vector is ART26.12, a FABP5 inhibitor, with an initial indication targeting chemotherapy-induced peripheral neuropathy (CIPN) . The company completed enrollment for a Phase 1 clinical trial in healthy subjects in April 2025 and announced favorable first-in-human study results in June 2025, confirming safety, tolerability, and dose-dependent, linear absorption . Beyond CIPN, ART26.12 has potential applications as a cancer therapeutic, for dermatologic conditions like psoriasis, for pain and inflammation, and in anxiety-related disorders such as PTSD . The estimated global market for CIPN is over $2 billion, for prostate cancer approximately $13 billion, for breast cancer approximately $33 billion, for psoriasis $31 billion, and for PTSD approximately $13 billion . The company has also been awarded a research grant in Canada to expand its research into FABP5 inhibition for anxiety disorders .

The company's third product candidate, ART12.11, a synthetic CBD cocrystal, is targeted for development in anxiety disorders and rare/orphan diseases . Preclinical studies have shown ART12.11 to have better pharmacokinetics and improved efficacy compared to other forms of CBD, with a U.S. composition of matter patent enforceable until December 10, 2038 . The estimated global market sizes for anxiety disorders and PTSD are both over $13 billion .

Operationally, the company expects its expenses and capital requirements to increase substantially as it continues research and development activities, maintains and expands its intellectual property portfolio, implements operational, financial, and management information systems, and attracts and retains additional personnel . The company is currently receiving R&D tax credits from the UK, but the value of these credits is expected to decrease due to legislative changes and an increase in R&D activities in the U.S., potentially reducing payable credits to a lower rate of 10% . Furthermore, increased compliance activity by UK tax authorities may delay R&D credit payments by 6-12 months .

Planned capital allocation includes continued substantial investment in research and development activities . The company intends to obtain additional capital through public or private equity offerings, debt financings, credit or loan facilities, or a combination of these sources . A subsequent event in January 2026 involved entering into an Equity Purchase Agreement with Square Gate Capital Master Fund, LLC – Series 5, providing the company with the right, but not the obligation, to sell up to $25 million in common stock, with an option to increase by an additional $25 million . In consideration, the company issued 106,026 shares of Common Stock and 186,372 pre-funded warrants with an aggregate value of $500,000 . The company does not plan to declare or pay any dividends to stockholders in the near future, intending to reinvest earnings, if any, into business operations .

Structural headwinds and execution risks management explicitly flagged include the need to raise additional financing, with no assurance of availability on acceptable terms . The company's financial condition raises substantial doubt about its ability to continue as a going concern, with cash and cash equivalents of $0.6 million and negative working capital of $3.3 million as of December 31, 2025 . Delays in clinical trials, potential adverse side effects of product candidates, and the inherent uncertainty of clinical drug development are also significant risks . The company's reliance on third parties for preclinical research, clinical trials, and manufacturing supply chains poses risks if these parties do not perform satisfactorily or meet deadlines . Geopolitical tensions, including conflicts in Eastern Europe and the Middle East, and trade policies, particularly with China, may disrupt investment, supply chains, and the economy generally, adversely affecting clinical trials and potential partnerships . Regulatory changes, such as the Inflation Reduction Act of 2022 (IRA), are expected to have far-reaching, long-term, and adverse effects on the pharmaceutical and biotech industry, potentially discouraging investment in small-molecule drug innovation and impacting patent litigation and market entry opportunities . The recent U.S. Supreme Court decision overturning the Chevron doctrine may also invite more lawsuits against the FDA, leading to uncertainties and potential delays in regulatory approvals .

Risk Factors

The company faces material risks including its ability to raise additional financing, as evidenced by its cash and cash equivalents of $0.6 million and negative working capital of $3.3 million as of December 31, 2025, which raises substantial doubt about its ability to continue as a going concern . Operational risks include potential delays or termination of clinical trials due to unforeseen safety issues, lack of efficacy, or failure to meet regulatory requirements . The company is highly dependent on third parties for preclinical research, clinical trials, and manufacturing, and their unsatisfactory performance could significantly impact product development timelines . Geopolitical tensions and trade policies, particularly with China, could disrupt supply chains and investment . Regulatory changes, such as the Inflation Reduction Act of 2022, are expected to have adverse effects on the pharmaceutical industry, potentially discouraging investment in small-molecule drug development and impacting market entry opportunities . The recent overturning of the Chevron doctrine by the U.S. Supreme Court may lead to increased litigation against the FDA, creating regulatory uncertainty and potential delays in drug approvals . Furthermore, the value of UK R&D tax credits is expected to decrease, and payments may be delayed by 6-12 months due to increased compliance activity .

Management Priorities

Management's overall tone emphasizes the company's focus as a clinical-stage biopharmaceutical entity dedicated to developing therapeutics targeting lipid-signaling modulation pathways, including the endocannabinoid system. They highlight the progress of their product candidates, ART27.13 in Phase 1b/2a for cancer-related anorexia, with interim results showing a mean weight gain of over 6% in treated patients, and ART26.12, a FABP5 inhibitor, which has completed a Phase 1 study with favorable safety and pharmacokinetic results . A key strategic priority is to continue funding operations primarily through additional capital raises, as the company has not generated any revenue to date and does not expect to in the near future . Management also stresses the importance of maintaining and expanding its intellectual property portfolio, as demonstrated by the ART12.11 synthetic CBD cocrystal with a U.S. patent enforceable until December 10, 2038 . Another strategic priority is to leverage existing preclinical and clinical research from in-licensed programs to accelerate development and commercialization timelines across the portfolio .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Corporate Overview
  2. [2] Item 7, MD&A — Revenue
  3. [3] Item 1, Business — Corporate Overview
  4. [4] Item 1, Business — Corporate Overview
  5. [5] Item 1, Business — Corporate Overview
  6. [6] Item 1, Business — Corporate Overview
  7. [7] Item 1, Business — Corporate Overview
  8. [8] Item 1, Business — Corporate Overview
  9. [9] Item 1, Business — Product Candidate Pipeline
  10. [10] Item 1, Business — Corporate Overview
  11. [11] Item 1, Business — Corporate Overview
  12. [12] Item 1, Business — Corporate Overview
  13. [13] Item 1, Business — Corporate Overview
  14. [14] Item 1, Business — Product Candidate Pipeline
  15. [15] Item 1, Business — Corporate Overview
  16. [16] Item 1, Business — Corporate Overview
  17. [17] Item 1, Business — Corporate Overview
  18. [18] Item 1, Business — Corporate Overview
  19. [19] Item 1, Business — Product Candidate Pipeline
  20. [20] Item 7, MD&A — Results of Operations
  21. [21] Item 7, MD&A — Results of Operations
  22. [22] Item 7, MD&A — Results of Operations
  23. [23] Item 7, MD&A — Results of Operations
  24. [24] Item 7, MD&A — Results of Operations
  25. [25] Item 7, MD&A — Results of Operations
  26. [26] Item 8, Consolidated Statements of Operations and Comprehensive Loss
  27. [27] Item 8, Consolidated Statements of Operations and Comprehensive Loss
  28. [28] Item 7, MD&A — Historical Cash Flows
  29. [29] Item 7, MD&A — Historical Cash Flows
  30. [30] Item 7, MD&A — Liquidity and Capital Resources
  31. [31] Item 7, MD&A — Working Capital
  32. [32] Item 8, Consolidated Balance Sheets
  33. [33] Item 8, Consolidated Balance Sheets
  34. [34] Item 7, MD&A — Results of Operations
  35. [35] Item 7, MD&A — Results of Operations
  36. [36] Item 8, Consolidated Statements of Operations and Comprehensive Loss
  37. [37] Item 8, Consolidated Statements of Operations and Comprehensive Loss
  38. [38] Item 7, MD&A — Results of Operations
  39. [39] Item 8, Consolidated Statements of Operations and Comprehensive Loss
  40. [40] Item 8, Consolidated Statements of Operations and Comprehensive Loss
  41. [41] Item 7, MD&A — Results of Operations
  42. [42] Item 7, MD&A — Results of Operations
  43. [43] Item 7, MD&A — Historical Cash Flows
  44. [44] Item 7, MD&A — Historical Cash Flows
  45. [45] Item 7, MD&A — Cash Flows from Investing Activities
  46. [46] Item 7, MD&A — Historical Cash Flows
  47. [47] Item 7, MD&A — Historical Cash Flows
  48. [48] Item 7, MD&A — Cash Flows from Financing Activities
  49. [49] Item 7, MD&A — Cash Flows from Financing Activities
  50. [50] Item 7, MD&A — Cash Flows from Financing Activities
  51. [51] Item 1, Business — Corporate Overview
  52. [52] Item 1, Business — Corporate Overview
  53. [53] Item 7, MD&A — Sources of Liquidity
  54. [54] Item 7, MD&A — Sources of Liquidity
  55. [55] Item 7, MD&A — Sources of Liquidity
  56. [56] Item 7, MD&A — Sources of Liquidity
  57. [57] Item 7, MD&A — Sources of Liquidity
  58. [58] Item 7, MD&A — Sources of Liquidity
  59. [59] Item 7, MD&A — Revenue
  60. [60] Item 1A, Risk Factors — Our financial condition raises substantial doubt as to our ability to continue as a going concern.
  61. [61] Item 1A, Risk Factors — Our financial condition raises substantial doubt as to our ability to continue as a going concern.
  62. [62] Item 1, Business — Corporate Overview
  63. [63] Item 1, Business — Corporate Overview
  64. [64] Item 1, Business — Corporate Overview
  65. [65] Item 1, Business — Product Candidate Pipeline
  66. [66] Item 1, Business — Corporate Overview
  67. [67] Item 1, Business — Corporate Overview
  68. [68] Item 1, Business — Corporate Overview
  69. [69] Item 1, Business — Product Candidate Pipeline
  70. [70] Item 1, Business — Corporate Overview
  71. [71] Item 1, Business — Corporate Overview
  72. [72] Item 1, Business — Corporate Overview
  73. [73] Item 1, Business — Product Candidate Pipeline
  74. [74] Item 7, MD&A — Funding Requirements
  75. [75] Item 1A, Risk Factors — The Company is currently receiving Research and Development ("R&D") tax credits from the UK in connection with its activities in the UK. The value of these will likely decrease and there is an increased risk payments may be significantly delayed.
  76. [76] Item 1A, Risk Factors — The Company is currently receiving Research and Development ("R&D") tax credits from the UK in connection with its activities in the UK. The value of these will likely decrease and there is an increased risk payments may be significantly delayed.
  77. [77] Item 7, MD&A — Funding Requirements
  78. [78] Item 7, MD&A — Funding Requirements
  79. [79] Item 12, Subsequent Events
  80. [80] Item 12, Subsequent Events
  81. [81] Item 5, Dividend Policy
  82. [82] Item 1A, Risk Factors — The Company will need to raise additional financing to support our business objectives. The Company cannot be sure the Company will be able to obtain additional financing on terms favorable to us when needed, or at all. If the Company is unable to obtain additional financing to meet our needs, our operations may be adversely affected or terminated.
  83. [83] Item 1A, Risk Factors — Our financial condition raises substantial doubt as to our ability to continue as a going concern.
  84. [84] Item 1A, Risk Factors — Clinical drug development involves a lengthy and expensive process with an uncertain outcome, results of earlier studies and clinical trials may not be predictive of future clinical trial results, and our clinical trials may fail to adequately demonstrate substantial evidence of safety and efficacy of our product candidates.
  85. [85] Item 1A, Risk Factors — The Company will need to rely on third parties to conduct our preclinical research and clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such research or trials.
  86. [86] Item 1A, Risk Factors — Geopolitical tensions, including the war in Ukraine and the Israel-Hamas war or other regional conflicts may disrupt investment in our business, supply chains carrying required materials and the movement of people globally. Such disruptions may adversely affect our clinical trials, scope of potential partners and our business generally.
  87. [87] Item 1A, Risk Factors — Changes in legislation or regulation in the health care systems in the United States and foreign jurisdictions may affect us.
  88. [88] Item 1A, Risk Factors — Changes in regulatory requirements or other unforeseen circumstances may impact the timing of the initiation or completion of our clinical trials.
  89. [89] Item 1A, Risk Factors — Our financial condition raises substantial doubt as to our ability to continue as a going concern.
  90. [90] Item 1A, Risk Factors — Our financial condition raises substantial doubt as to our ability to continue as a going concern.
  91. [91] Item 1A, Risk Factors — Our financial condition raises substantial doubt as to our ability to continue as a going concern.
  92. [92] Item 1A, Risk Factors — Clinical drug development involves a lengthy and expensive process with an uncertain outcome, results of earlier studies and clinical trials may not be predictive of future clinical trial results, and our clinical trials may fail to adequately demonstrate substantial evidence of safety and efficacy of our product candidates.
  93. [93] Item 1A, Risk Factors — The Company will need to rely on third parties to conduct our preclinical research and clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such research or trials.
  94. [94] Item 1A, Risk Factors — Geopolitical tensions, including the war in Ukraine and the Israel-Hamas war or other regional conflicts may disrupt investment in our business, supply chains carrying required materials and the movement of people globally. Such disruptions may adversely affect our clinical trials, scope of potential partners and our business generally.
  95. [95] Item 1A, Risk Factors — Changes in legislation or regulation in the health care systems in the United States and foreign jurisdictions may affect us.
  96. [96] Item 1A, Risk Factors — Changes in regulatory requirements or other unforeseen circumstances may impact the timing of the initiation or completion of our clinical trials.
  97. [97] Item 1A, Risk Factors — The Company is currently receiving Research and Development ("R&D") tax credits from the UK in connection with its activities in the UK. The value of these will likely decrease and there is an increased risk payments may be significantly delayed.
  98. [98] Item 1, Business — Corporate Overview
  99. [99] Item 1, Business — Corporate Overview
  100. [100] Item 7, MD&A — Revenue
  101. [101] Item 1, Business — Corporate Overview
  102. [102] Item 1, Business — Scientific Approach

Analysis on 5/22/2026