ARTELO BIOSCIENCES, INC. 8-K

What Happened

• Artelo Biosciences, Inc. (ARTL) filed an 8-K reporting that on March 20, 2026 it entered a Securities Purchase Agreement with Labrys Fund II, L.P. and issued a 10% promissory note with an aggregate principal amount of $315,000 (includes a $15,000 original issue discount; net proceeds $300,000). The Note matures 12 months from the March 20, 2026 issue date. The company may prepay in full before day 181 after issuance and agreed to pay $7,500 of Labrys’s due diligence/legal fees. Proceeds are intended for business development and general working capital.
• The 8-K also furnished a March 25, 2026 press release announcing a strategic expansion opportunity for ART27.13 in muscle preservation for patients undergoing GLP‑1 receptor agonist therapy.

Key Details

• Principal/value: 10% promissory note, aggregate principal $315,000; purchase price $300,000 (OID $15,000).
• Maturity and prepayment: 12‑month maturity from March 20, 2026; prepayment allowed in full prior to 181 days after issue.
• Conversion: Labrys may convert outstanding principal and interest into common stock on or after the earlier of (a) 180 days after issue or (b) registration of conversion shares; conversion price = 75% of the average of the two lowest closing bid prices during the 10 trading days prior to conversion.
• Ownership cap: Labrys cannot convert to exceed beneficial ownership of 4.99% (modifiable up to 9.99% with written notice). Default remedy: on an Event of Default the Company must pay a "Default Amount" equal to 150% of outstanding principal and interest plus collection costs and legal fees.

Why It Matters

• This is a small short‑term financing (net $300K) to fund business development and working capital; it provides immediate liquidity but is not large relative to typical clinical-stage financing needs.
• The conversion feature at a 25% discount to recent trading prices (subject to the 10‑day lookback) creates potential dilution if Labrys converts; the stated ownership cap limits immediate large dilution but can be adjusted up to 9.99% with notice.
• The default remedy (1.5× payoff plus fees) is punitive and could materially increase repayment obligations if covenants are breached. Investors should note the financing terms and monitor future filings for any conversions, registratio ns of conversion shares, or additional financings.