ARTELO BIOSCIENCES, INC. current report, 13 April 2020

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Business Context and Reporting Period

Company: Artelo Biosciences, Inc. (ARTL)
Filing Type: Form 8-K (Current Report)
Date of Report: April 13, 2020
Reporting Period: Event date April 13, 2020
Business Context: The Company is an emerging growth company incorporated in Nevada, with principal executive offices in La Jolla, CA. It is engaged in the biotechnology sector.

Key Financial Metrics

This filing does not contain financial statements, revenue, profit, cash flow, margin, debt, or liquidity metrics. The report focuses exclusively on a corporate action regarding capital raising.

Material Changes and Agreements

Item 1.01: Entry into a Material Definitive Agreement
On April 13, 2020, the Company entered into an Equity Distribution Agreement with Maxim Group LLC to establish an "at-the-market" (ATM) equity offering program.

  • Offering Size: Up to $3,000,000 of common stock.
  • Agent: Maxim Group LLC.
  • Commission Structure:
    • 2.0% of gross sales price for the first $2,000,000 raised.
    • 3.0% of gross sales price for the next $1,000,000 raised.
  • Termination: The agreement terminates upon the sale of all shares or upon 10 days' prior notice by either party.
  • Registration: The offering utilizes a previously effective Form S-3 (filed February 3, 2020) registering up to $100,000,000 of shares.

Guidance, Outlook, and Risks

Management Commentary: The filing indicates the Company's intent to raise capital through the ATM program but provides no specific guidance on the timing of sales or the intended use of proceeds beyond the agreement terms.

Risks and Contingencies:

  • The Company retains the right to instruct the Agent not to sell shares if sales cannot be effected at or above a designated price.
  • The Company may suspend the offering at any time.
  • Sales are subject to applicable limits under Form S-3.

Investor Verification Checklist

  • Verify the current share price and trading volume on The Nasdaq Capital Market to assess the potential dilution impact of the $3,000,000 offering.
  • Review the full text of the Equity Distribution Agreement (Exhibit 1.1) for specific termination clauses and indemnification obligations.
  • Confirm the Company's current cash position and burn rate to understand the urgency of this capital raise.
  • Check subsequent filings to determine if and when shares were actually sold under this agreement.