Artelo Biosciences Reports Fourth Quarter and Fiscal Year 2019 Financial Results and Provides Business Update

LA JOLLA, Calif., Nov. 25, 2019 (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 fourth quarter and fiscal year ended August 31, 2019 and provided a business update.

“We continue to advance our clinical stage and non-clinical pipeline while adding critical functions to execute on our product development and business strategies,” stated Gregory D. Gorgas, Artelo’s President and Chief Executive Officer. “We have made important progress in our readiness to initiate a Phase 1b/2a study in the United Kingdom with ART27.13, our synthetic cannabinoid for the treatment of anorexia and weight loss associated with cancer. We held a productive meeting with The Medicines and Healthcare Products Regulatory Agency earlier this month and are on track to deliver GMP drug substance early next month. Also noteworthy, our non-clinical programs ART12.11 and ART26.12 continue to garner attention and both were recently featured in prominent peer-review journals. We anticipate achieving meaningful milestones across our entire pipeline in the new year.”

Fiscal 2019 Corporate Highlights

  • We completed a public offering, raising net proceeds of approximately $7.3 million with a concurrent up listing to NASDAQ.
  • We exercised our option for the worldwide exclusive license in all fields for ART27.13, with the final and full licensing payment made in July.
  • Positive non-clinical data with our Fatty Acid Binding Protein 5 (FABP5) inhibitor program under development in collaboration with The Research Foundation of the State University of New York Stony Brook was published in The Prostate October 2019 issue. Researchers at Stony Brook reported that combinations of taxanes and our FABP5 inhibitors resulted in complete prostate cell death at lower concentrations when compared to docetaxel or cabazitaxel alone. This is the first study to demonstrate that FABP5 inhibitors can increase the cytotoxic and tumor suppressive effects in prostate cancer cells when co-administered with the standard of care.
  • Two research studies conducted by Artelo were featured in the Nature Medicine September 2019 issue. Nature Medicine recognized the importance of the Company’s research findings and highlighted the scarcity of data on cannabidiol (“CBD”) as well as the limited availability of quality clinical research identifying the dose of CBD useful to treat certain diseases and conditions. We believe our cocrystal of CBD represents meaningful solutions to many of the challenges described in the Nature Medicine article.
  • We filed a non-provisional patent application with the United States Patent and Trademark Office under prioritized examination with composition of matter claims directed to CBD. It is believed our next generation CBD cocrystal, ART12.11, will offer greater consistency of exposure, which is expected to ultimately demonstrate improved safety and efficacy in clinical studies.

Fiscal 2019 Year End Results

  • Operating expenses for the year ended August 31, 2019 were $3,209,531 compared to $2,343,491 for the same period in 2018. The Company’s operating expenses were primarily related to professional fees for ongoing regulatory requirements, research and development and general and administrative expenses.  

  • Net loss was approximately $2,142,176, or $1.00 per basic and $1.46 per diluted share for the year ended August 31, 2019 compared to a net loss of $2,343,491, or $1.84 per basic and diluted share for the year ended August 31, 2018. Net loss for the year ended August 31, 2019 included a gain of $1,037,355 related to the change in the fair value of derivative liabilities.

  • As of August 31, 2019, the Company had approximately $4,423,965 in cash, compared to $337,424 as of August 31, 2018.  

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. 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 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 statements 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, and our failure to attain these objectives on the currently expected timelines may cause our stock price to decline.

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 risks regarding the volatility of our stock price and 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

Consolidated Balance Sheets

  August 31,     August 31,  
  2019     2018  
Current Assets          
Cash and cash equivalents $ 4,423,965     $ 337,424  
Prepaid expenses   8,336       35,384  
Deposits   1,500       1,500  
Other receivable   8,787       22,127  
Total Current Assets   4,442,588       396,435  
Equipment, net of accumulated depreciation of $792 and $282, respectively   721       563  
Intangible asset   2,039,417       -  
TOTAL ASSETS   6,482,726       396,998  
Current Liabilities              
Accounts payable and accrued liabilities $ 348,863     $ 529,272  
Due to related party   3,732       2,700  
Derivative liability   29,501       -  
Stock payable   639,417       -  
Total Current Liabilities   1,021,513       531,972  
Preferred Stock, par value $0.001, 6,250,000 shares authorized, 0 and 0 shares issued and outstanding as of August 31, 2019 and 2018, respectively   -       -  
Common Stock, par value $0.001, 18,750,000 shares authorized, 3,353,616 and 1,750,268 shares issued and outstanding as of August 31, 2019 and 2018, respectively   3,354       1,750  
Additional paid-in capital   10,278,421       2,514,136  
Accumulated deficit   (4,810,756 )     (2,638,580 )
Accumulated other comprehensive loss   (9,806 )     (12,280 )
Total Stockholders' Equity (Deficit)   5,461,213       (134,974 )

Consolidated Statements of Operations

  Year ended  
  August 31,  
  2019     2018  
General and administrative $ 952,334     $ 508,278  
Professional fees   1,164,695       585,069  
Research and development   1,091,992       1,249,854  
Depreciation   510       290  
Total Operating Expenses   3,209,531       2,343,491  
Loss from Operations   (3,209,531 )     (2,343,491 )
OTHER INCOME (EXPENSE)              
Other income   31,256       -  
Change in fair value of derivative liabilities   1,006,099       -  
Total other income   1,037,355       -  
Provision for income taxes   -       -  

NET LOSS $ (2,172,176 )   $ (2,343,491 )
Foreign currency translation adjustments   2,474       (12,937 )
Total Other Comprehensive Income Loss   2,474       (12,937 )
TOTAL COMPREHENSIVE LOSS $ (2,169,702 )   $ (2,356,428 )
Basic Loss per Common Share $ (1.00 )   $ (1.84 )
Diluted Loss per Common Share $ (1.46 )   $ (1.84 )
Basic Weighted Average Common Shares Outstanding   2,172,465       1,277,527  
Diluted Weighted Average Common Shares Outstanding   2,172,465       1,277,527  

Consolidated Statements of Cash Flows 

  Year ended  
  August 31,  
  2019     2018  
Net loss $ (2,172,176 )   $ (2,343,491 )
Adjustments to reconcile net loss to net cash used in operating activities:              
Stock based compensation   425,110       290,004  
Depreciation   510       282  
Change in fair value of derivative   (1,006,099 )     -  
Stock payable   100,000       -  
Changes in operating assets and liabilities:              
Prepaid expenses   27,048       (35,384 )
Other receivable   13,340       (22,127 )
Accounts payable and accrued liabilities   (180,409 )     500,696  
Net cash used in operating activities   (2,792,676 )     (1,610,020 )
Purchase of equipment   (688 )     (845 )
Purchase of license   (1,500,000 )     -  
Net cash used in investing activities   (1,500,688 )     (845 )
Issuance of common shares for cash   8,376,379       1,386,613  
Advance from related party   18,276       19,894  
Repayment to related party   (17,228 )     (18,056 )
Net cash provided by financing activities   8,377,427       1,388,451  
Effects on changes in foreign exchange rate   2,478       (12,373 )
Net decrease in cash and cash equivalents   4,086,541       (235,351 )
Cash and cash equivalents - beginning of period   337,424       572,775  
Cash and cash equivalents - end of period $ 4,423,965     $ 337,424  
Supplemental Cash Flow              
Cash paid for interest $ -     $ -  
Cash paid for income taxes $ -     $ -  
Non-cash financing and investing activities:              
Reclass of warrant derivative liability from equity $ 1,035,600     $ -  
Stock payable for acquisition of license $ 539,417          
Share issuance for price protection $ 13     $ -  

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Source: Artelo Biosciences