Company: ARTL
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001640334-25-001429
Chunk: 356

Company: ARTELO BIOSCIENCES, INC.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 4
Chunk 356
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 of our newly raised capital may be allocated to Solana investments rather than to our legacy business operations.  Allocating substantial resources to Solana investments may divert financial and management attention away from our core biopharmaceutical business, potentially resulting in underinvestment in our research and development programs, clinical trials, regulatory activities, and commercialization efforts. This could impair our ability to advance our product candidates, achieve regulatory approvals, or realize the anticipated benefits of our existing pipeline. In addition, the performance of our Solana investments is subject to significant volatility and uncertainty, and there can be no assurance that these investments will generate positive returns or preserve capital. If our Solana investments experience significant losses or fail to perform as expected, our overall financial condition and liquidity could be adversely affected, which may further limit our ability to fund our legacy operations.

Moreover, the strategic shift in capital allocation may create operational and strategic risks, including the potential for misalignment between our management team’s expertise and the requirements of managing digital asset investments, as well as possible negative perceptions among our stakeholders, including investors, partners, and regulators, regarding our commitment to our core biopharmaceutical business. Any neglect or underinvestment in our legacy operations could have a material adverse effect on our business, financial condition, results of operations, and prospects.

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Our SOL treasury strategy subjects us to enhanced regulatory oversight.

There has been increasing focus on the extent to which digital assets can be used to launder the proceeds of illegal activities, fund criminal or terrorist activities, or circumvent sanctions on regimes, including those sanctions imposed in response to the ongoing conflict between Russia and Ukraine. While we have implemented and maintain policies and procedures reasonably designed to promote compliance with applicable anti-money laundering and sanctions laws and regulations and take care to only acquire our SOL through entities subject to anti-money laundering regulation and related compliance rules in the United States. Gregory D. Gorgas, our Chief Executive Officer, currently serves as our chief compliance officer, and the Company may elect to identify others to serve in the capacity to ensure appropriate oversight and compliance for our digital asset treasury initiative. If we are found to have purchased any of our SOL from bad actors that have used SOL to launder money or persons subject to sanctions, we may be subject to regulatory proceedings and any further transactions or dealings in SOL by us may be restricted or prohibited.

We may incur indebtedness or enter into other financial instruments in the future that may be collateralized by our SOL holdings. We may also consider pursuing strategies to create income streams or otherwise generate funds