Company: ARTL
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001640334-25-001429
Chunk: 126

Company: ARTELO BIOSCIENCES, INC.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part II, Item 1A
Chunk 126
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 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 in the future. If improved mechanisms for validating transactions on blockchains are perceived as superior to proof-of-stake or hybrid models like Solana's, those digital assets could gain market share relative to SOL.

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Our SOL holdings will be less liquid than our cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.

Historically, the cryptocurrency market has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic