Company: ARTL
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001640334-25-001429
Chunk: 218

Company: ARTELO BIOSCIENCES, INC.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 2
Chunk 218
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 addition, in June 2023, the SEC announced enforcement actions against Coinbase and Binance, two providers of large trading venues for digital assets, which similarly was followed by a decrease in the market price of digital assets. These were followed in November 2023, by an SEC enforcement action against Payward Inc. and Payward Ventures Inc., together known as Kraken, another large trading venue for digital assets. While the complaint against Coinbase was dismissed in February 2025, the complaint against Payward Inc. and Payward Ventures Inc. was dismissed with prejudice in March 2025, and the complaint against Binance was dismissed on May 29, 2025, the SEC or other regulatory agencies may initiate similar actions in the future. For example, in April 2025, the State of Oregon brought a civil enforcement action against Coinbase for allegedly selling unregistered securities. As the price of our listed securities may be affected by the value of our SOL holdings, the failure of a major participant in the digital currency ecosystem could have a material adverse effect on the market price of our listed securities.

The concentration of our SOL holdings could enhance the risks inherent in our SOL treasury strategy.

The concentration of our SOL holdings limits the risk mitigation that we could achieve if we were to purchase a more diversified portfolio of treasury assets, and the absence of diversification enhances the risks inherent in our SOL treasury strategy. Any future significant declines in the price of SOL would have a more pronounced impact on our financial condition than if we used our cash to purchase a more diverse portfolio of assets.

The emergence or growth of other blockchains and associated digital assets, including those with significant private or public sector backing, could have a negative impact on the price of SOL and adversely affect our business.

As a result of our SOL treasury strategy, our assets are concentrated in our SOL holdings. Accordingly, the emergence or growth of digital assets other than SOL may have a material adverse effect on our financial condition. There are numerous alternative digital assets and many entities, including consortiums and financial institutions, that are researching and investing resources into private or permissioned blockchains that do not use SOL’s hybrid proof-of-history and proof-of-stake consensus mechanism, or that use different technical innovations intended to build upon or improve existing consensus mechanisms. For example, in late 2022, the Ethereum network transitioned to a “proof-of-stake” mechanism for validating transactions that requires significantly less computing power than proof-of-work mining. The Ethereum network has completed another major upgrade since then and may undertake additional upgrades