Company: ARTL
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001640334-25-000825
Chunk: 313

Company: ARTELO BIOSCIENCES, INC.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 4
Chunk 313
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 or commercialization efforts, or other aspects of our business plan. We also may be required to relinquish, license or otherwise dispose of rights to products or product candidates that we would otherwise seek to commercialize or develop ourselves on terms that are less favorable than might otherwise be available. In addition, our ability to achieve profitability or to respond to competitive pressures would be significantly limited.

As described in Part I, Item 2 of this Quarterly Report on Form 10-Q, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we entered into the Equity Line with an institutional investor which provides, among other things, for the sale by us to the institutional investor of up to $20.0 million in shares of our Common Stock, subject to the terms of the Equity Line. Though we have the right, but not the obligation, to sell to the institutional investor shares of our Common Stock under the Equity Line, market conditions may not be favorable for us to sell shares of our Common Stock to the institutional investor.

Under the terms of the Equity Line, we are prohibited from effecting or entering into an agreement to effect any issuance by us or our subsidiaries of shares of our Common Stock involving the issuance of any floating conversion rate or variable priced equity-like securities, not including the prohibition of the issuance and sale of shares of our Common Stock pursuant to an “at-the-market offering” by us exclusively through a registered broker-dealer acting as our agent pursuant to a written agreement between us and such registered broker-dealer.

We are 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 decrease and there is an increased risk payments may be significantly delayed.

The UK government grants R&D tax credits to companies conducting preclinical research and clinical trials in the UK, as we are currently doing. The credits are paid to loss making companies, which effectively reduces the costs, and the cash we use, for our current trials. The value of R&D tax credits has decreased for all companies due to legislative changes affecting expenditure incurred after April 1, 2023. As a result of this and because of the increase in R&D activities in the U.S. we will likely no longer meet the definition of an “R&D intensive” company in the UK and will therefore only be eligible for payable credits at the lower rate of 10%. Furthermore, increased compliance activity by the UK tax authorities over the last year has resulted in a significantly higher number of claims being selected for enquiry.