ARTL

New in FY2025

• Effective for accounting periods starting on or after April 1, 2024, expenditures on certain staffing costs in connection with activities which take place outside the UK as part of our clinical trials, will not qualify for R&D tax credits unless restrictive conditions are met. · If we fail to comply with our obligations under our patent licenses with third parties, we could lose license rights that are vital to our business. · Changes in regulatory requirements or other unforeseen circumstances may impact the timing of the initiation or completion of our clinical trials. · We face many of the risks and difficulties frequently encountered by relatively new companies with respect to our operations. · The Company has no mature product candidates and may not be successful in licensing any. · Even if the Company is successful in licensing lead product candidates, resource limitations may limit our ability to successfully develop them.
• As of December 31, 2025, we had approximately $0.6 million in cash and cash equivalents and restricted cash, and working capital of negative $3.3 million, and we have incurred and expect to continue to incur significant costs in pursuit of our drug candidates.
• For the year ended December 31, 2025, we recorded a net loss of approximately $12.9 million and used cash in operations of approximately $8.5 million.
• Our financial statements for the year ended December 31, 2025 have been prepared assuming that we will continue to operate as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
• We expect to continue to fund our operations primarily through additional raises of capital.
• The Company believes if it is unable to obtain additional financing, existing cash resources will not be sufficient to enable it to fund the anticipated level of operations through one year from the date the accompanying financial statements are issued.
• As described in Part II, Item 7 of this Annual Report on Form 10-K, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ,” in January 2026 the Company entered into the Equity Line with an institutional investor which provides, among other things, for the sale by us to the institutional investor of up to $25.0 million in shares of our Common Stock, which at the Company’s sole discretion can be increased by an additional $25.0 million once the initial $25.0 million is exhausted, subject to the terms of the Equity Line.
• Under the terms of the Equity Line, the Company is prohibited from effecting or entering into an agreement to effect any issuance by us or our subsidiaries of shares of our Common Stock involving the issuance of any variable rate securities (as defined therein) during certain standstill periods (as defined therein), not including the prohibition of the issuance and sale of shares of our Common Stock pursuant to an “at-the-market offering” by us exclusively through a registered broker-dealer acting as our agent pursuant to a written agreement between us and such registered broker-dealer.
• The credits are paid in cash to loss-generating companies, which effectively reduces the costs, and the cash the Company uses, for our current trials.
• The value of R&D tax credits has decreased for all companies due to legislative changes affecting expenditure incurred after April 1, 2023.
• As a result of this and because of the increase in R&D activities in the U.S. the company will likely no longer meet the definition of a “R&D intensive” company in the UK and will therefore only be eligible for payable credits at the lower rate of 10%.
• The Company may experience delays in providing sufficient product for future testing of our candidates due to prior and any future supply chain limitations caused by pandemics.
• Due to prior and any future supply chain disruptions caused by pandemics, our contract manufacturing organizations may experience an inability to manufacture and produce sufficient quantities of our drug candidates as the Company progresses through our regulatory testing and/or approval.
• The Company currently has no marketing and sales organization and has no experience in marketing products.
• The Company has entered into agreements with third parties to handle the manufacturing supply chain for our product candidates ART27.13 and ART26.12.
• If these manufacturers are unable or unwilling to provide us with sufficient quantities of our product candidates to meet its demands or fails to meet its standards of quality or other specification or to achieve drug cGMP compliance, the Company may not be able to locate any alternative suppliers or enter into commercially reasonable agreements with substitute suppliers in a timely manner or at all.
• The Company has received guidance from the DEA that if a product does not contain any quantity of synthetically produced THC (or any other controlled substance), it is not controlled under the CSA.
• The Company is partially dependent on initial and continued market acceptance and proliferation of cannabinoid-derived therapeutic treatments, and specifically ART12.11, our CBD cocrystal.
• The Company is highly dependent on our Chief Executive Officer, President, and Secretary, Gregory D.
• In order to maintain our listing on The Nasdaq Capital Market tier of The Nasdaq Stock Market LLC (“Nasdaq”), the Company is required to comply with the Nasdaq requirements, which includes maintaining minimum stockholders’ equity.
• On May 22, 2025, we received a notice from the Nasdaq staff notifying us that, because our stockholders’ equity was below $2.5 million as reported on our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, we no longer meet the minimum stockholders’ equity requirement for continued listing on Nasdaq under Nasdaq Listing Rule 5550(b)(1).
• Pursuant to the notice and the Listing Rules of Nasdaq, we submitted a plan to regain compliance with the minimum stockholders’ equity requirement within 45 calendar days of receiving the letter from the Staff.
• This plan was updated and resubmitted to Nasdaq on August 29, 2025.
• The Nasdaq staff determined that the Company has not completed the capital raising that was discussed in the materials submitted to Nasdaq on July 7, 2025, and August 29, 2025, which the Company expected would enable it to demonstrate compliance with the Listing Rule.
• As a result, on November 19, 2025, the Company received a delist determination letter from Nasdaq advising the Company that the Nasdaq staff had determined that the Company had not satisfied the conditions set forth in the May 22 letter to regain compliance.
• Additionally, because the Company’s annual shareholder meeting on December 31, 2025, was adjourned due to a lack of a quorum, Nasdaq issued an additional deficiency notice related to the requirement for holding annual meetings.
• The Company appealed Nasdaq’s determination to a hearing panel on January 15, 2026, to stay any further delisting actions.
• On February 2, 2026, the hearing panel issued an extension to March 30, 2026, for the Company to resolve the minimum shareholders’ equity deficiency.
• The Company held its annual meeting on January 30, 2026, and cured the annual meeting deficiency.
• Following the hearing panel’s extension, the Company’s Common Stock will continue to trade on Nasdaq under the symbol “ARTL.” Although we intend to use all reasonable efforts to achieve compliance with all Nasdaq listing standards, there can be no assurance that we will be able to regain compliance with the listing standards or that we will otherwise be in compliance with other applicable Nasdaq listing criteria.
• Furthermore, Nasdaq may delist our Common stock for public interest concerns, even if we are able to regain compliance for continued listing on Nasdaq under the listing requirements.
• If the Company is unable to maintain compliance with Nasdaq’s continued listing requirements, delisting from The Nasdaq Capital Market or any Nasdaq market could make trading our Common Stock more difficult for investors, potentially leading to declines in our share price and liquidity.
• Certain of the outstanding shares of Common Stock may be “restricted securities” within the meaning of Rule 144.
• The Company incurs significant costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance initiatives.
• In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and Nasdaq to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.
• Our corporate governance documents include provisions: · classifying our Board into three classes of directors with staggered terms; · authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our Common Stock; · limiting the liability of, and providing indemnification to, our directors, including provisions that require the company to advance payment for defending pending or threatened claims; · limiting the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting; · requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our Board; · controlling the procedures for the conduct and scheduling of board and stockholder meetings; · limiting the determination of the number of directors on our board and the filling of vacancies or newly created seats on the board to our Board then in office; and · providing that directors may be removed by stockholders at any time.

Gone since FY2024

• With effect for accounting periods starting on or after April 1, 2024, expenditure on certain staffing costs in connection with activities which take place outside the UK as part of our clinical trials, will not qualify for R&D tax credits unless restrictive conditions are met. · If we fail to comply with our obligations under our patent licenses with third parties, we could lose license rights that are vital to our business. · Changes in regulatory requirements or other unforeseen circumstances may impact the timing of the initiation or completion of our clinical trials. · We face many of the risks and difficulties frequently encountered by relatively new companies with respect to our operations. · The Company has no mature product candidates and may not be successful in licensing any. · Even if the Company is successful in licensing lead product candidates, resource limitations may limit our ability to successfully develop them.
• As of December 31, 2024, we had approximately $2.3 million in cash and cash equivalents and restricted cash, and working capital of $785 thousand, and we have incurred and expect to continue to incur significant costs in pursuit of our drug candidates.
• For the year ended December 31, 2024, we recorded a net loss of approximately $9.8 million and used cash in operations of approximately $8.4 million.
• Our financial statements for the year ended December 31, 2024 have been prepared assuming that we will continue to operate as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
• We expect to continue to fund our operations primarily through utilization of our current financial resources and additional raises of capital.
• While it is very difficult to estimate the Company’s future liquidity requirements, the Company believes if it is unable to obtain additional financing, existing cash resources will not be sufficient to enable it to fund the anticipated level of operations through one year from the date the accompanying financial statements are issued.
• As described in Part II, Item 7 of this Annual Report on Form 10-K, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the Company entered into the Equity Line with an institutional investor which provides, among other things, for the sale by us to the institutional investor of up to $20.0 million in shares of our Common Stock, subject to the terms of the Equity Line.
• Under the terms of the Equity Line, the Company is prohibited from effecting or entering into an agreement to effect any issuance by us or our subsidiaries of shares of our Common Stock involving the issuance of any floating conversion rate or variable priced equity-like securities, not including the prohibition of the issuance and sale of shares of our Common Stock pursuant to an “at-the-market offering” by us exclusively through a registered broker-dealer acting as our agent pursuant to a written agreement between us and such registered broker-dealer.
• The credits are paid in cash to loss making companies, which effectively reduces the costs, and the cash the Company uses, for our current trials.
• The value of R&D tax credits has decreased for all companies due to legislative changes affecting expenditure incurred after 1 st April 2023.
• As a result of this and because of the increase in R&D activities in the USA the company will likely no longer meet the definition of a “R&D intensive” company in the UK and will therefore only be eligible for payable credits at the lower rate of 10%.
• The Company has no mature product candidates and may not be successful in licensing any.
• One of the key elements of our business strategy is to license technologies or compounds from companies and/or research institutions.
• The Company may not be able to identify technologies or compounds that are commercially viable, or that are available for licensure under acceptable terms.
• If the Company is able to identify suitable technologies or compounds, the Company may be unable to successfully negotiate a license or maintain the licensing and collaboration arrangements necessary to develop and commercialize any product candidates.
• The Company may be unable to compete for licenses to available technologies and compounds with companies that are more established than us and have greater financial resources than us.
• Even if the Company is successful in licensing programs, the Company may not be able to satisfy development requirements should the Company be unable to raise additional funding.
• Any failure to establish or maintain licensing or collaboration arrangements on favorable terms could adversely affect our ability to develop and commercialize product candidates, which can adversely affect our business prospects and financial condition.
• Even if the Company is successful in licensing lead product candidates, resource limitations may limit our ability to successfully develop them.
• Pharmaceutical development requires substantial capital, skilled personnel and infrastructure to successfully develop products for the market.
• The success of our business is highly dependent on our ability to successfully develop, obtain regulatory approval for and commercialize products.
• The Company does not currently have the financial resources to fund the full development of any lead product candidate to commercialization and there is no assurance that the Company can raise enough capital to fund full product development.
• If the Company is unable to raise additional capital, the Company will not be able to pursue the development of any products and may have to relinquish rights to any products the Company may have licensed.
• The Company may experience delays in providing sufficient product for future testing of our candidates due to prior and any future supply chain limitations caused by COVID-19 or other pandemics.
• Due to prior and any future supply chain disruptions caused by COVID-19 or other pandemics, our contract manufacturing organizations may experience an inability to manufacture and produce sufficient quantities of our drug candidates as the Company progresses through our regulatory testing and/or approval.
• The Company currently has no marketing and sales organization and have no experience in marketing products.
• The Company has entered into an agreement with a third party to handle the manufacturing supply chain for our product candidate ART27.13.
• If this manufacturer is unable or unwilling to provide us with sufficient quantities of our product candidate to meet its demands or fails to meet its standards of quality or other specification or to achieve drug cGMP compliance, the Company may not be able to locate any alternative suppliers or enter into commercially reasonable agreements with substitute suppliers in a timely manner or at all.
• The Company is substantially dependent on initial and continued market acceptance and proliferation of cannabinoid-derived therapeutic treatments, and specifically ART12.11, our CBD cocrystal.
• The Company is highly dependent on our Chief Executive Officer, Chief Financial Officer, President, Treasurer and Secretary, Gregory D.
• In order to maintain our listing on Nasdaq, the Company is required to comply with the Nasdaq requirements, which includes maintaining a minimum bid price and a minimum public float.
• For example, the Company is required to maintain a minimum bid price of $1.00 per share, and the Company traded below that threshold regularly during and prior to our fiscal year ended August 31, 2021.
• On September 13, 2021, the Company received a notice from Nasdaq stating that the Company was not in compliance with Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Price Rule”) because our Common Stock failed to maintain a minimum closing bid price of $1.00 for 30 consecutive business days.
• This notice had no immediate effect on the Nasdaq listing or trading of our Common Stock.
• In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was afforded an initial period of 180 calendar days, or until March 14, 2022, to regain compliance with the Minimum Bid Price Rule.
• The Company was then afforded a second grace period of an additional 180 calendar days, or until September 12, 2022, to regain compliance with the Minimum Bid Price Rule.
• On August 24, 2022, the Company received a formal notification via letter from Nasdaq confirming that the Company had regained compliance with the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2), which requires that our Common Stock maintain a minimum bid price of at least $1.00 per share, and that the matter is now closed.
• If the Company is unable to maintain compliance with Nasdaq’s continued listing requirements in the future, delisting from the Nasdaq Capital Market or any Nasdaq market could make trading our Common Stock more difficult for investors, potentially leading to declines in our share price and liquidity.
• Certain of the possible adjustments to the warrants may result in a deemed distribution from us to a beneficial owner of a warrant that will be taxable, even though the beneficial owner does not receive a corresponding distribution of cash.
• The exercise terms of the warrants may be adjusted in certain circumstances.

and 6 more.