ARTELO BIOSCIENCES, INC.

ARTELO BIOSCIENCES, INC. Material Event: Reverse Stock Split Analysis

ARTELO BIOSCIENCES, INC. recently completed a one-for-three (1-for-3) reverse stock split of its common stock, a move that significantly reshapes its share structure. This action, which became effective on March 10, 2026, was formally announced in a Form 8-K filing with the SEC on March 17, 2026, under Item 5.03.

Event Description

A reverse stock split consolidates existing shares, transforming a larger number of lower-priced shares into a smaller number of higher-priced ones. In ARTELO's case, for every three shares of common stock owned before the effective date, shareholders now hold one share. While the share count decreases, the price per share theoretically adjusts upward proportionally. For example, if a share traded at $1.00 pre-split, it would theoretically trade at $3.00 post-split, ensuring an investor's total market value remains unchanged immediately after the split.

ARTELO implemented this reverse stock split through an amendment to its Certificate of Incorporation, a move approved by its Board of Directors.

This reverse split specifically led to:

• A reduction in total outstanding common shares from approximately 2.1 million to roughly 708,323.
• A proportional reduction in the number of authorized shares.
• The par value of each share remained unchanged at $0.001.
• Adjustments to all outstanding stock options, warrants, and convertible securities, including their exercise prices and the number of shares issuable upon exercise or conversion, to reflect the 1-for-3 ratio.
• The Company's common stock continues to trade on NASDAQ under the symbol 'ARTL', though a new CUSIP number may be assigned for the post-split shares.

Event Date/Timeline

The reverse stock split became effective at 5:00 p.m. Eastern Time on March 10, 2026. ARTELO formally disclosed this material event in a Form 8-K filing with the U.S. Securities and Exchange Commission on March 17, 2026.

Impact Assessment

This action primarily impacts:

• Shareholders: The reverse split proportionally reduced the number of common shares each shareholder held, while the theoretical per-share price increased. The aggregate market value of their holdings remained unchanged immediately after the split.
• Holders of Equity Awards/Convertible Securities: ARTELO proportionally adjusted all outstanding stock options, warrants, and convertible securities to reflect the 1-for-3 ratio. This means the number of shares issuable upon exercise or conversion decreased, and the exercise or conversion price increased.
• The Company's Capital Structure: The reverse split reduced the total number of outstanding and authorized common shares.
• Market Perception and Listing Compliance: The increased per-share price aims to help ARTELO meet the minimum bid price requirements of its listing exchange (NASDAQ) and potentially improve market perception.

Financial Impact

This structural change has several financial implications:

• Per-Share Metrics: Financial metrics reported on a per-share basis, such as Earnings Per Share (EPS), Book Value Per Share, and Net Tangible Book Value Per Share, will proportionally adjust upward to reflect the reduced number of outstanding shares.
• Market Capitalization: The company's overall market capitalization (total value of outstanding shares) remains unchanged immediately after the split. This is because the reduction in share count is offset by the theoretical increase in share price.
• Financial Reporting: ARTELO BIOSCIENCES is republishing its audited financial statements for the fiscal years ended December 31, 2024, and 2025, to accurately reflect the new share structure. Investors should consult these updated reports for precise post-split financial data.
• Par Value: The par value of each share remained unchanged at $0.001.

Key Takeaways for Investors

Although the 8-K filing does not explicitly state a specific reason for this reverse stock split, companies typically undertake such actions for strategic purposes, primarily to:

• Meet Stock Exchange Listing Requirements: Companies listed on major exchanges like NASDAQ, where ARTELO trades, often face minimum bid price requirements (e.g., $1.00 per share). A reverse split can boost the share price to regain compliance and avoid delisting, a crucial step for liquidity and investor access.
• Improve Market Perception: A higher share price can make a stock appear more "substantial" and attractive to a broader range of investors, including institutional funds that may have policies against investing in "penny stocks" or stocks below a certain price threshold.

However, investors should also consider:

• Underlying Business Performance: The split is a financial maneuver and does not inherently improve the company's operational performance, drug development progress, or financial health. The success of ARTELO's drug pipeline remains the primary driver of long-term value.
• Future Volatility: Reverse splits can sometimes lead to continued stock price volatility or further declines if the underlying business challenges are not effectively addressed.
• Dilution Potential: While outstanding options and warrants are adjusted, the potential for future equity raises or conversions could still impact per-share value.
• Investor Sentiment: Some investors view reverse splits negatively, associating them with struggling companies.

Following this financial restructuring, ARTELO BIOSCIENCES must demonstrate tangible progress in its core business of developing new medicines. Investors should closely monitor:

• Clinical Trial Progress: Updates on their drug candidates' clinical development, including trial results, regulatory milestones, and potential partnerships.
• Financial Health: Future earnings reports and financial statements for signs of improved revenue, reduced burn rate, or successful capital raises.
• Strategic Initiatives: Any announcements regarding new strategic directions, pipeline expansion, or efforts to achieve organic stock price appreciation.

The reverse stock split provides ARTELO with a fresh share structure, but the company's ability to create lasting shareholder value ultimately depends on its success in advancing its therapeutic programs and achieving sustainable growth.