Material Agreement, Financial Obligation, Private Placement (Form 8-K)

Item 1.01 Entry Into a Material Definitive Agreement.

On October 28, 2025, Artelo Biosciences, Inc. (the "Company") entered into a Subscription Agreement (the "Subscription Agreement") pursuant to which it issued and sold to certain investors (the "Investors"), and the Investors purchased (by converting all or a portion of the unconverted "Voluntary Conversion" portion of unpaid principal balance and accrued interest due to such Investors upon the maturity of the convertible promissory notes issued to the Investors on May 1, 2025): (i) convertible notes (the "Notes") to the Investors in an aggregate principal amount of $690,154.69; and (ii) warrants (the "Warrants") to purchase an aggregate of 438,182 shares of the Company's common stock, par value $0.001 per share ("Common Stock"), at an exercise price of $3.40 per share (collectively, the "Offering"). The sale and issuance of the Notes and Warrants closed effective as of October 28, 2025 (the "Closing Date"). For more information regarding the convertible promissory notes issued to the Investors on May 1, 2025, see Item 1.01 of the Form 8-K filed by the Company on May 1, 2025.

The Notes will accrue interest at a rate of 12% per annum, which will adjust to 20% upon an Event of Default (as defined in the Notes). All unpaid principal, together with any then unpaid and accrued interest and other amounts payable thereunder, shall be due and payable six months after the closing of the Notes Offering (the "Maturity Date").

At any time prior to the Maturity Date, all or any portion of the outstanding principal amount of the Notes, together with the accrued and unpaid interest, shall be convertible, in whole or in part, into shares of Common Stock, at a conversion price of $3.40 (the "Conversion Shares").

Each Warrant shall be immediately exercisable after issuance for five (5) years. Each Warrant will be exercisable by payment of the exercise price in cash or on a cashless basis if at the time of exercise there is no effective resale registration statement and will contain customary anti-dilution provisions (in the case of stock splits, dividends, recapitalizations, mergers and similar transactions).

A holder of a Note or Warrant may not convert or exercise any such Note or Warrant to the extent that such conversion or exercise would result in the number of shares of Common Stock beneficially owned by such holder and its affiliates exceeding 4.9% of the total number of shares of Common Stock outstanding immediately after giving effect to the conversion or exercise, which percentage may be increased or decreased at the holder's election not to exceed 19.9%.

Pursuant to the Subscription Agreement, the Company agreed (i) to file a registration statement (the "Registration Statement") with the United States Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act") on or before the 20^th calendar day following the Closing Date (subject to certain exceptions) for purposes of registering the resale of the Converted Shares, if any, and the shares of Common Stock issuable pursuant to the Warrants (collectively, the "Registrable Shares"), (ii) to use its reasonable best efforts to have such registration statement declared effective within the time period set forth in the Subscription Agreement, and (iii) to keep the Registration Statement effective until the Registrable Shares covered by such Registration Statement may be sold without volume or manner-of-sale restrictions pursuant to Rule 144, subject to certain conditions.

The Subscription Agreement contain customary representations, warranties and agreements by the Company, indemnification obligations of the Company and the Investors, including for liabilities under the Securities Act, and other obligations of the parties. The representations, warranties and covenants contained in the Subscription Agreement were made only for purposes of the Subscription Agreement and are made as of specific dates; are solely for the benefit of the parties (except as specifically set forth therein); may be subject to qualifications and limitations agreed upon by the parties in connection with negotiating the terms of the Subscription Agreement, instead of establishing matters as facts; and may be subject to standards of materiality and knowledge applicable to the contracting parties that differ from those applicable to the investors generally. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of the Company.

As detailed in the table below, certain directors and officers of the Company entered into the Subscription Agreement in connection with the Offering and purchased Notes and Warrants in the Offering:

The participation of these Investors in the Offering was disclosed to, and approved by, the board and separately by the disinterested members of the board.

The foregoing descriptions of the Subscription Agreement, the Notes and the Warrants are not complete and are qualified in their entirety by reference to the full text of the Subscription Agreement, the Notes and the Warrants, copies of which are filed as Exhibit 10.1, 10.2, and 10.3, respectively to this Current Report on Form 8-K and are incorporated by reference herein.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information provided in Item 1.01 with respect to the issuances of the of the Notes, the Warrants and the Registrable Shares, pursuant to the Subscription Agreement is incorporated herein by reference.

Item 3.02. Unregistered Sales of Equity Securities.

The information provided in Item 1.01 with respect to the issuances of the of the Notes, the Warrants and the Registrable Shares, pursuant to the Subscription Agreement is incorporated herein by reference. The issuance of all such securities by the Company will not be registered under the Securities Act and are issued in reliance on the exemption from registration provided by Section 3(a)(9) and/or Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder, or under any state securities laws, but the resale of such Registrable Shares will be registered under the Registration Statement.