ARTELO BIOSCIENCES, INC.

PROPOSAL 2

TO APPROVE THE AMENDMENT OF OUR ARTICLES OF INCORPORATION, AS AMENDED, TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF PREFERRED STOCK FROM 69,444 TO 10,000,000 AND TO PERMIT THE ISSUANCE OF 10,000,000 SHARES OF PREFERRED STOCK WITH RIGHTS AND PREFERENCES TO BE DETERMINED BY THE BOARD FROM TIME TO TIME

General

Our Board has unanimously adopted a resolution approving an amendment to the Articles in order to increase the number of authorized shares of Preferred Stock from 69,444 to 10,000,000 and to authorize the issuance of 10,000,000 shares of Preferred Stock with rights and preferences to be determined by the Board from time to time (the “Blank Check Preferred Amendment”). The Approval of the Blank Check Preferred Amendment will grant the Board the authority, without further action by the stockholders, to carry out the amendment to the Articles after the date stockholder approval for the Blank Check Preferred Amendment. The Board believes that by granting the Board the authority to designate the rights and preferences of series of Preferred Stock would give us greater flexibility and allow us to issue such shares in most cases without the expense of delay of seeking stockholder approval. We are at all times investigating additional sources of financing which our Board believes will be in our best interests and in the best interests of our stockholders. The proposed Blank Check Preferred Amendment would increase the number of the currently authorized number of shares of Preferred Stock in our Articles from 69,444 to 10,000,000.

Our Articles currently have 69,444 shares of Preferred Stock authorized of which none are issued and outstanding. Our Board has determined that it is advisable to amend the Articles to increase the number of authorized shares of preferred stock from 69,444 to 10,000,000 and to allow the Board the right to determine the rights and preferences of the Preferred Stock in its discretion to provide flexibility with its capital raising efforts. The form of the proposed amendment to our Articles is attached to this Proxy Statement as Annex B. If approved by our stockholders, we intend to file the Blank Check Preferred Amendment, in substantially the form attached hereto as Annex B, with the Secretary of State of Nevada as soon as practicable following the Special Meeting, and such amendment will be effective upon filing. If this proposal is not approved by our stockholders, our Articles will continue as currently in effect.

Purpose of the Blank Check Preferred

We are requesting our stockholders to approve and adopt an amendment to Articles in order to authorize the issuance of 10,000,000 shares of Preferred Stock, with rights and preferences to be determined by the Board from time to time. The Board believes that the adoption the Blank Check Preferred Amendment will provide maximum financial and strategic flexibility with respect to future financing transactions. The Board believes that having blank check preferred stock will be attractive for investors and could be used as a means of raising capital, where the terms of those securities being negotiated and tailored to meet the needs of both investors and the company. If the Blank Check Preferred Amendment is approved, the Board could issue up to a total of 10,000,000 shares of preferred stock in one or more series. The Board would be able to establish the number of shares to be included in each such series and issue the additional shares of authorized Preferred Stock with such designations, preferences and relative, participating, optional, conversion or other special rights (if any) of such series and the qualifications, limitations or restrictions (if any) thereof, as the Board may in the future establish by resolution(s). No vote of the holders of our Common Stock or Preferred Stock would be required for the creation or issuance of a series of Preferred Stock, unless otherwise expressly required by the Articles, the Preferred Stock designation creating any series of Preferred Stock, or to the extent required by the Nevada Revised Statutes or Nasdaq (“Required Approval”). The Board could authorize the issuance of Preferred Stock with voting or conversion rights that could dilute the voting power or rights of the holders of Common Stock. In addition, the issuance of Preferred Stock could, among other things, have the effect of delaying, deferring or preventing a change in control of the company and might harm the market price of our Common Stock.

Rights of Blank Check Preferred Stock

The proposed Blank Check Preferred Amendment will not have any effect on the par value per share of our Preferred Stock. However, the creation of a series of Preferred Stock and issuance of such shares of Preferred Stock will affect holders of our Common Stock. We currently only have one class of stock, Common Stock issued and outstanding. All of the holders of Common Stock have the same rights. As discussed above, if the Blank Check Preferred Amendment is approved by the stockholders, the Board will have the power and discretion to specify the rights, preferences and restrictions of series of Preferred Stock, subject to any Required Approval. Such rights associated with the Preferred Stock will not be identical to the rights associated with our Common Stock. If our Board issues shares of Preferred Stock, existing stockholders of Common Stock will not have any preferential rights to purchase any newly authorized shares of Preferred Stock solely by virtue of their ownership of shares of our Common Stock. In addition, the rights of holders of preferred shares may be superior to the rights of holders of our Common Stock. Holders of Preferred Stock will be entitled to receive, when, as, and if declared by our Board, the dividends, whether cash or in-kind or in shares of additional securities of the company, at the rates and on the dates established by such series of Preferred Stock. Dividend rates may be fixed or variable or both. Different series of Preferred Stock may be entitled to dividends at different dividend rates or based upon different methods of determination. The Board could authorize the issuance of Preferred Stock with voting or conversion rights that are superior to the rights of holders of Common Stock and issuance of such Preferred Stock could dilute the voting power or rights of the holders of Common Stock. The particular terms of any series of Preferred Stock may among others terms include the following which is not an exhaustive list:

Impact on Holders of Common Stock

While the ability of the Board to issue shares of blank check preferred stock cannot be precisely determined unless and until the Board designates the rights, privileges, and preferences to attach to some or all of the authorized shares of blank check preferred stock, it is likely that any series of Preferred Stock so designated will have one or more material features that are superior to our shares of Common Stock. There are not currently any agreements of the company pursuant to which the Board would authorize and issue Preferred Stock and there are not currently any plans, discussions or negotiations to do so.

Effects of Blank Check Preferred Amendment

Due to the volatility of our Common Stock, the Board has discussed various measures that we can take, including a shareholder rights plan and the use of blank check preferred, to deal with potential threats of hostile takeovers. However, the proposal for the Blank Check Preferred Amendment was not done with the purpose or intention of using such shares for anti-takeover purposes, such as to oppose a hostile takeover attempt or to delay or prevent a change in control of the company that our Board does not support, however we could use the blank preferred shares for such purpose. Although the proposal to authorize the blank check preferred stock has not been prompted by the threat of any hostile takeover attempt (nor is the Board currently aware of any such attempts directed at the company), nevertheless, stockholders should be aware that the Blank Check Preferred Amendment could facilitate future efforts by us to deter or prevent changes in control of the company, including transactions in which stockholders of the company might otherwise receive a premium for their shares over then current market prices. However, the Board has a fiduciary duty to act in the best interests of our stockholders at all times.

Although the Blank Check Preferred Amendment is not motivated by anti-takeover concerns and is not considered by our Board to be an anti-takeover measure, the availability of additional authorized shares of Preferred Stock could enable the Board to issue shares defensively in response to a takeover attempt or to make an attempt to gain control of the company more difficult or time-consuming. For example, shares of Preferred Stock could be issued to purchasers who might side with management in opposing a takeover bid that the Board determines is not in the best interests of our stockholders, thus diluting the ownership and voting rights of the person seeking to obtain control of the company. Such shares of Preferred Stock could also be granted super-voting rights that could further inhibit the ability of a person seeking to obtain control of the company. In certain circumstances, the issuance of Preferred Stock without further action by the stockholders may have the effect of delaying or preventing a change in control of the company, may discourage bids for our Common Stock at a premium over the prevailing market price and may adversely affect the market price of our Common Stock. As a result, the issuance of Preferred Stock could render more difficult and less likely a hostile takeover of the company by a third-party, or a tender offer or proxy contest, assumption of control by a holder of a large block of our stock, and the possible removal of our incumbent management. We are not aware of any proposed attempt to take over the company or of any present attempt to acquire a large block of our Common Stock. We do not have any present intention to issue Preferred Stock or to use the issuance of Preferred Stock as an anti-takeover mechanism.

Risks of Not Approving This Proposal

If the stockholders do not approve this proposal, we will continue to have 69,444 authorized shares of Preferred Stock. The Board will not be able to establish the number of shares to be included in each such series and issue the additional shares of authorized Preferred Stock with such designations, preferences and relative, participating, optional, conversion or other special rights (if any) of such series and the qualifications, limitations or restrictions (if any) thereof, without stockholder approval. This could adversely impact our ability to raise necessary funds to meet Nasdaq’s Stockholders’ Equity Requirement, or to operate and continue business and to pursue opportunities in which shares of our Preferred Stock could be issued that our Board may determine would otherwise be in the best interest of the company and our stockholders, including financing and strategic transaction opportunities, as described above under the header, “Purpose of the Blank Check Preferred Amendment.”

No Dissenters’ or Appraisal Rights

Under the Nevada Revised Statutes, our stockholders are not entitled to dissenters’ or appraisal rights with respect to the proposed Blank Check Preferred Amendment and the change to our Articles and we will not independently provide our stockholders with any such rights.

Required Vote

The Blank Check Preferred Amendment requires the affirmative “FOR” vote of at least a majority of the outstanding shares of Common Stock. You may vote “FOR,” “AGAINST” or “ABSTAIN” from voting on this proposal. Abstentions and broker non-votes will have the same effect as an “AGAINST” vote on the outcome of this proposal.

Our Board unanimously recommends a vote “FOR**” approval of an amendment to our Articles to increase the Preferred Stock from 69,444 to 10,000,000 and to** permit the issuance of 10,000,000 shares of Preferred Stock with rights and preferences to be determined by the board from time to time,as further described above.