Artelo Biosciences(ARTL) - 2025 Q1 - Quarterly Report

Drug Development - Artelo Biosciences is developing a dual cannabinoid agonist, ART27.13, for cancer-related anorexia, with Phase 1b enrollment completed in Q1 2023 and Phase 2a initiation in April 2023[91]. - The company received FDA clearance for ART26.12 in July 2024, with Phase 1 clinical trials for chemotherapy-induced peripheral neuropathy (CIPN) completed in April 2025[87][93]. - ART12.11, a proprietary cocrystal of CBD and TMP, is expected to have improved stability and bioavailability compared to non-cocrystal CBD compositions, with multiple potential indications being explored[94][95]. - Approximately 60% of advanced stage cancer patients are affected by cancer-related anorexia, highlighting the market need for ART27.13[90]. - ART26.12 has shown promising preclinical evidence in multiple pain models, prioritizing CIPN as the initial indication due to the lack of approved treatments[93]. - The company plans to develop ART12.11 for indications including PTSD, depression, epilepsy, and insomnia[95]. - The company has established a comprehensive approach to drug development, leveraging lipid signaling modulation pathways[86]. Intellectual Property - Artelo has secured two U.S. patents and multiple foreign patents for its CBD cocrystal composition, aiming for long-lasting market exclusivity[95]. Financial Performance - The company has not generated any revenue to date and may not do so in the near future[105]. - Total operating expenses for Q1 2025 were $2.4 million, a decrease of $0.2 million from $2.6 million in Q1 2024[108]. - The net loss for Q1 2025 was $2.4 million, compared to a net loss of $2.5 million in Q1 2024, reflecting a decrease of $0.1 million[108]. - Current assets decreased to $1.4 million as of March 31, 2025, from $2.6 million as of December 31, 2024[120]. - Current liabilities increased to $2.8 million as of March 31, 2025, from $1.8 million as of December 31, 2024[120]. - Cash used in operating activities for Q1 2025 was $1.6 million, down from $2.9 million in Q1 2024[122]. - The total working capital as of March 31, 2025, was negative $1.4 million, a decrease of $2.2 million from positive $0.8 million in 2024[119]. Capital and Funding - The company has issued a total of 425,344 shares under the Equity Line, generating aggregate proceeds of $679,000[111]. - The company filed a $75.0 million shelf registration statement effective for three years to provide flexibility for capital access[112]. - The company plans to pursue additional funding through equity or debt offerings to support ongoing operations[115]. Accounting and Reporting - Financial statements prepared in accordance with GAAP, requiring management estimates and assumptions[127]. - Actual results may differ from estimates due to inherent unpredictability and uncertainties[128]. - No new accounting standards adopted during the three months ended March 31, 2025[129]. - As a smaller reporting company, not required to provide detailed market risk disclosures[130]. - No off-balance sheet arrangements that materially affect financial condition or results of operations[126]. Management and Strategy - Artelo's management team has experience in developing and commercializing first-in-class therapeutics, with plans to retain rights for internal development[96]. - The company is actively pursuing collaborations in the biopharmaceutical industry to maximize shareholder value[96].