Under the terms of the sales agreement, Lafferty is entitled to a commission of 2.0% of the gross sales price per share sold, and is deemed an underwriter within the meaning of the Securities Act in connection with those sales, with its compensation treated as underwriting commissions or discounts. Lafferty is not required to sell any specific number or dollar amount of shares and acts on a best-efforts basis. The prospectus supplement notes that, as of the pricing date, the last reported sale price of Artelo common stock on Nasdaq was $15.67 per share (July 17, 2025 close), which was used as an assumed offering price solely for illustrative purposes in the filing's dilution and share-count disclosures; the filing does not state that any shares were actually sold at that price.
The prospectus supplement's illustrative dilution table shows that, as of March 31, 2025, Artelo's historical net tangible book value was approximately $(1.4) million, or $(2.44) per share, based on 567,582 shares then outstanding. Assuming the full $6.5 million were sold at $15.67 per share (yielding approximately $6.2 million in estimated net proceeds after commissions and offering expenses), the filing illustrates a pro forma as-adjusted net tangible book value of $4.87 per share, an increase of $7.31 per share for existing stockholders, and dilution of $10.80 per share to new investors at that assumed price. These figures are explicitly labeled illustrative, and the filing states actual results would vary with the real offering price and timing of sales.
On use of proceeds, Artelo stated it intends to use net proceeds from the ATM program to advance its product candidates through preclinical and clinical development, including manufacturing, research and technical development, clinical studies, and capital expenditures, as well as for working capital and general corporate purposes. The company also disclosed it may use proceeds for investments in complementary products or technologies, though it had no present commitments or agreements for any such investments as of the filing date. No debt repayment or acquisition-specific use of proceeds was disclosed.
R.F. Lafferty & Co., Inc. serves as the sole sales agent to the issuer under the ATM program. Fennemore Craig, P.C. of Reno, Nevada, serves as legal counsel to Artelo and passed on the validity of the shares offered. Ellenoff Grossman & Schole LLP of New York, New York, is disclosed in the prospectus supplement as counsel to Lafferty in connection with the offering.
Subsequent SEC filings show modest actual utilization of this ATM program. According to Artelo's Form 10-Q for the quarter ended September 30, 2025, and its Form 10-K for the year ended December 31, 2025, a total of 50,858 shares of common stock were sold under the Sales Agreement during the third quarter of 2025, generating net proceeds of $442,000, all of which occurred during that single quarter (the 10-K's full-year figure for 2025 matches the Q3 figure, indicating no further sales under this particular agreement in the fourth quarter). This represents roughly 6.8% of the $6.5 million maximum authorized under the program.
No prospectus supplement, pricing 8-K, or other filing specifies the actual per-share prices at which the 50,858 shares were sold, the gross (as opposed to net) proceeds from those sales, or the specific dates within the third quarter when the sales occurred. There is no free-writing prospectus or formal underwriting agreement associated with this ATM program, consistent with its structure as an agency-basis at-the-market offering rather than a firm-commitment underwritten deal. Artelo separately entered into an underwritten offering with R.F. Lafferty as sole book-running manager in September 2025, but that was a distinct transaction executed under a separate underwriting agreement and is not part of this $6.5 million ATM program. The ATM program itself has not been reported as formally terminated or fully utilized in any filing reviewed.