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Artelo Biosciences Reports First Quarter Fiscal Year 2020 Financial Results and Provides Business Update

/EIN News/ -- LA JOLLA, Calif., Jan. 14, 2020 (GLOBE NEWSWIRE) -- Artelo Biosciences, Inc. (NASDAQ: ARTL), a clinical stage biopharmaceutical company focused on the development of therapeutics that modulate the endocannabinoid system, today reported financial and operating results for the first quarter of its fiscal year ended November 30, 2019.

The Company continues to advance its clinical and pre-clinical pipeline which consists of three therapeutic candidates for cancer-related anorexia, cancer, and PTSD.  During the quarter, the Company held a positive meeting with the U.K. Medicines and Healthcare Products Regulatory Agency on the initiation of a Phase 1b/2a study with ART27.13, successfully manufactured drug substance at scale, and increased its public profile.  In particular, a pre-clinical study published in October 2019 demonstrated that the Company’s Fatty Acid Binding Protein 5 (FABP5) inhibitor can increase the cytotoxic and tumor suppressive effects in prostate cancer cells when coadministered with taxanes. “Artelo Biosciences is well positioned to reach a number of meaningful milestones in 2020, including the initiation of a clinical study with ART27.13 by mid-year,” stated Gregory D. Gorgas, Chief Executive Officer. “Given these and other developments, we plan to pursue strategic discussions with potential partners about each of our programs.”

First Quarter FY2020 Corporate Highlights

  • Successfully manufactured drug substance material and selected a contract research organization for our upcoming Phase 1b/2a study of ART27.13 for the treatment of anorexia and weight loss associated with cancer. 
  • Concluded a productive meeting with The U.K. Medicines and Healthcare Products Regulatory Agency to discuss our upcoming Phase 1b/2a study of ART27.13.
  • Published positive pre-clinical data on ART26.12, our FABP5 inhibitor program, under development in collaboration with The Research Foundation of the State University of New York Stony Brook, in The Prostate October 2019 issue. Study identified combinations of taxanes and FABP5 inhibitors which resulted in complete prostate cell death at lower concentrations when compared to docetaxel or cabazitaxel alone.
  • Artelo conducted research studies featured in the Nature Medicine September 2019 issue. Nature Medicine recognized the importance the Company’s research findings and highlighted the scarcity of data on CBD as well the limited availability of quality clinical research identifying the dose of CBD useful to treat certain diseases and conditions.
  • Presented the Company at multiple, well-attended investment conferences in New York and London.

Financial Highlights

  • Operating expenses for the three months ended November 30, 2019 were $1,336,448 compared to $556,903 for the same period in 2018. The Company’s operating expenses were primarily related to ongoing regulatory filing requirements, research and development contracts and general and administrative expenses.
  • Net loss was approximately $1,306,361, or $0.39 per basic and $0.40 per diluted share for the quarter ended November 30, 2019 compared to a net loss of $556,903, or $0.32 per basic and diluted share for the quarter ended November 30, 2018. Net loss for the first quarter ended November 30, 2019 included a gain of $29,501 related to the change in the fair value of derivative liabilities. As of November 30, 2019, derivative liabilities amount to $0.
  • As of November 30, 2019, the Company had approximately $3,374,683 in cash, compared to $4,423,965 as of August 31, 2019. 

About Artelo Biosciences
Artelo Biosciences, Inc. is a San Diego-based biopharmaceutical company dedicated to the development and commercialization of proprietary therapeutics targeting the endocannabinoid system and related pathways. Artelo is rapidly advancing a portfolio of broadly applicable product candidates designed to address significant unmet needs in multiple diseases and conditions, including anorexia, cancer, pain, and inflammation. Led by proven biopharmaceutical executives collaborating with highly respected researchers and technology experts, the company applies leading edge scientific, regulatory, and commercial discipline to develop high-impact therapies. More information is available at www.artelobio.com and Twitter: @ArteloBio.

Forward Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and Private Securities Litigation Reform Act, as amended, including those relating to the Company’s product development, clinical and regulatory timelines, market opportunity, competitive position, possible or assumed future results of operations, business strategies, potential growth opportunities and other statement that are predictive in nature. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which we operate and management’s current beliefs and assumptions.

These statements may be identified by the use of forward-looking expressions, including, but not limited to, “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “potential,” “predict,” “project,” “should,” “would” and similar expressions and the negatives of those terms. These statements relate to future events or our financial performance and involve known and unknown risks, uncertainties, and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include those set forth in the Company’s filings with the Securities and Exchange Commission, including our ability to raise additional capital in the future. Prospective investors are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by applicable securities laws.

Investor Relations Contact:
Crescendo Communications, LLC
Tel: 212-671-1020
Email: ARTL@crescendo-ir.com

ARTELO BIOSCIENCES, INC.
 
Consolidated Balance Sheets
 
(Unaudited)
 
   November 30,    August 31,
  2019    2019 
           
ASSETS          
Current Assets          
Cash and cash equivalents  $   3,374,683      $   4,423,965  
Prepaid expenses     86,133         8,336  
Deposits     1,500         1,500  
Other receivable     45,587         8,787  
Total Current Assets     3,507,903         4,442,588  
Equipment, net of accumulated depreciation of $886 and $792, respectively     598         721  
Intangible asset     2,039,417         2,039,417  
TOTAL ASSETS     5,547,918         6,482,726  
           
LIABILITIES AND STOCKHOLDERS' DEFICIT          
Current Liabilities          
Accounts payable and accrued liabilities  $   574,530      $   348,863  
Due to related parties     10,024         3,732  
Derivative liability     -          29,501  
Stock payable     -          639,417  
  Total Current Liabilities     584,554         1,021,513  
           
STOCKHOLDERS' EQUITY          
Preferred Stock, par value $0.001, 6,250,000 shares authorized,          
0 and 0 shares issued and outstanding, respectively     -          -   
Common Stock, par value $0.001, 18,750,000 shares authorized,          
3,426,276 and 3,353,616 shares issued and outstanding, respectively     3,426         3,354  
Additional paid-in capital     11,070,517         10,278,421  
Accumulated deficit     (6,117,117 )       (4,810,756 )
Accumulated other comprehensive loss     6,538         (9,806 )
Total Stockholders' Equity     4,963,364         5,461,213  
           
TOTAL LIABILITIES AND STOCKHOLDERS' EQUIITY  $   5,547,918      $   6,482,726  


ARTELO BIOSCIENCES, INC.
 
Consolidated Statements of Operations
 
(Unaudited)
 
  Three months ended
  November 30,
  2019    2018 
           
OPERATING EXPENSES          
           
General and administrative  $   403,159      $   205,501  
Professional fees     266,227         167,293  
Research and development     666,938         184,039  
Depreciation     124         70  
  Total Operating Expenses     1,336,448         556,903  
           
  Loss from Operations     (1,336,448 )       (556,903 )
           
OTHER INCOME (EXPENSE)          
Other income     586         -   
Change in fair value of derivative liabilities     29,501         -   
  Total other income     30,087         -   
           
NET LOSS     (1,306,361 )    $   (556,903 )
           
OTHER COMPREHENSIVE INCOME (LOSS)          
Foreign currency translation adjustments     16,344         4,888  
  Total Other Comprehensive Income (Loss)     16,344         4,888  
           
TOTAL COMPREHENSIVE LOSS  $   (1,290,017 )    $   (552,015 )
           
Basic Loss per Common Share  $   (0.39 )    $   (0.32 )
Diluted Loss per Common Share  $   (0.40 )    $   (0.32 )
           
Basic Weighted Average Common Shares Outstanding     3,361,601         1,754,494  
Diluted Weighted Average Common Shares Outstanding     3,379,000         1,754,494  


ARTELO BIOSCIENCES, INC.
 
Consolidated Statements of Stockholders’ Equity (Deficit)
 
(Unaudited)
 
        Additional       Accumulated Other    
    Common stock   paid-in   Accumulated   Comprehensive    
    Shares   Amount   capital   Deficit   Income (loss)   Total
                         
Balance, August 31, 2019     3,353,616  $   3,354  $   10,278,421    $   (4,810,756 )  $   (9,806 )  $   5,461,213  
                         
Common stock issuance costs     -      -      (15,151 )     -        -        (15,151 )
Common shares issued for services - officers     -      -      13,000       -        -        13,000  
Common shares issued for acquisition of license     61,297     61     539,356       -        -        539,417  
Common shares issued for settlement of debt     11,363     11     99,989       -        -        100,000  
Refund for fractional stock     -      -      (117 )     -        -        (117 )
Stock option expense     -      -      155,019       -        -        155,019  
Net loss for the period         -          (1,306,361 )     -        (1,306,361 )
Foreign currency translation adjustments         -          -        16,344       16,344  
Balance, November 30, 2019     3,426,276     3,426     11,070,517       (6,117,117 )     6,538       4,963,364  


        Additional       Accumulated Other    
    Common stock   paid-in   Accumulated   Comprehensive    
    Shares   Amount   capital   Deficit   Income (loss)   Total
                         
Balance, August 31, 2018   1,750,268 $ 1,750 $ 2,514,136 $ (2,638,580 ) $ (12,280 ) $ (134,974 )
                         
Common shares issued for cash   29,300   29   170,745   -     -     170,774  
Common shares issued for services - officers       -   13,000   -     -     13,000  
Stock option granted for services       -   28,051   -     -     28,051  
Net loss for the period       -       (556,903 )   -     (556,903 )
Foreign currency translation adjustments       -       -     4,888     4,888  
Balance, November 30, 2018   1,779,568   1,779   2,725,932   (3,195,483 )   (7,392 )   (475,164 )


ARTELO BIOSCIENCES, INC.
 
Consolidated Statements of Cash Flows
 
(Unaudited)
 
   Three months ended
   November 30,
  2019     2018  
           
CASH FLOWS FROM OPERATING ACTIVITIES          
Net loss $   (1,306,361 )   $   (556,903 )
Adjustments to reconcile net loss to net cash used in operating activities:          
Stock based compensation     168,019         41,051  
Depreciation     124         70  
Change in fair value of derivative liabilities     (29,501 )       -   
Changes in operating assets and liabilities:          
  Prepaid expenses     (77,797 )       (9,462 )
  Other receivable     (36,800 )       18,665  
  Accounts payable and accrued liabilities     230,667         105,427  
Net cash used in operating activities     (1,051,649 )       (401,152 )
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Issuance of common shares for cash     -          170,774  
Common stock issuance costs     (15,151 )       -   
Refund for fractional stock     (117 )       -   
Advance from related parties     4,334         3,686  
Repayments to related parties     (3,040 )       (558 )
Net cash provided by financing activities     (13,974 )       173,902  
           
Effects on changes in foreign exchange rate     16,341         4,900  
           
Net decrease in cash and cash equivalents     (1,049,282 )       (222,350 )
Cash and cash equivalents - beginning of period     4,423,965         337,424  
Cash and cash equivalents - end of period $   3,374,683     $   115,074  
           
Supplemental Cash Flow          
  Cash paid for interest $   -      $   -   
  Cash paid for income taxes $   -      $   -   
           
Non-cash financing and investing activities:          
Common shares issued for acquisition of license offset against stock payable $   539,417        
Common shares issued for settlement of stock payable $   100,000     $   -   

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