Company: ARTL
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001640334-25-001429
Chunk: 414

Company: ARTELO BIOSCIENCES, INC.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 414
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H) with proof-of-stake (PoS), enabling high throughput and low transaction costs. SOL is primarily used to pay transaction fees (as the network's “gas” token) and as a means of staking to support the network’s consensus and security, with validators and delegators earning rewards for their participation.

The Solana blockchain supports a wide range of decentralized applications (dApps), including decentralized finance (DeFi) protocols, non-fungible token (NFT) marketplaces, and other Web3 projects. As of the date of this filing, Solana has a robust and growing ecosystem, with significant developer activity and adoption across multiple sectors.

From a tokenomics perspective, Solana was launched with an initial supply of 500 million SOL, with new tokens created through inflationary rewards distributed to validators and delegators. The inflation rate is designed to decrease over time, providing a long-term supply schedule that supports both network security and economic sustainability.

The Board determined that acquiring SOL as a treasury asset is supported by several factors: (i) exposure to SOL offers potential long-term appreciation and may help preserve the purchasing power of our excess liquidity; (ii) SOL is highly liquid relative to many other digital assets, with deep spot markets on multiple U.S.-regulated trading venues; (iii) the Solana ecosystem continues to expand, particularly in DeFi, NFT infrastructure, and other Web3 use cases, which may drive further demand and utility for SOL. The Board also considered the technical maturity of the Solana network, its institutional-grade custody solutions, and the optionality for future yield generation through staking, subject to further Board approval.

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Governance and Controls

At present, our digital asset activity is limited to converting USD into SOL within our accounts at BitGo and CUBE,  U.S.-regulated, qualified digital-asset custodians. We have not yet adopted formal internal controls or protocols governing the movement or custody of SOL beyond the standard procedures provided by BitGo and CUBE. No SOL has been transferred out of BitGo or CUBE custody to date, and we do not self-custody any digital assets. We are in the process of developing and implementing additional internal controls and protocols to govern the movement, authorization, and custody of SOL, which we expect to present to the Board for review and approval.

A written transaction record is maintained for every SOL purchase or custodial movement and is reconciled daily to custodial statements. Digital-asset treasury disclosures (including this description