Filed Pursuant to Rule 424(b)(5)
Registration No. 333-213878
PROSPECTUS SUPPLEMENT
(To Prospectus dated October 20, 2016)
Up
to 9,070,000 Shares of Common Stock
Warrants
to Purchase up to 6,802,500 Shares of Common Stock
We are offering an aggregate of 9,070,000 shares of common stock,
par value $0.001 per share (“
Common Stock
”), and warrants to purchase up to 6,802,500 shares of Common Stock.
Each share of Common Stock is being sold together in a unit (a “
Unit
”) with 0.75 of a Series G Warrant (“
Series
G Warrant
”) to purchase one share of our Common Stock for the combined purchase price of $0.50 per Unit. The Series
G Warrants are exercisable for five years from the date of issuance at an exercise price of $0.70 per share. The shares of Common
Stock and the Series G Warrants that comprise the Units are immediately separable and will be issued separately. This prospectus
also registers the shares of Common Stock issuable upon the exercise of the Series G Warrants being offered.
Our Common Stock is currently quoted on the QB tier of the OTC
Marketplace (“
OTCQB
”) under the symbol “
ARTH
”. On June 28, 2018, the closing price of our
Common Stock was $0.655 per share. We have no warrants, debt securities, subscription rights or units listed on any securities
exchange or market.
Investing in our securities involves certain risks. Before buying
any of our securities, you should read the discussion of material risks of investing in our Common Stock set forth in the section
entitled “RISK
FACTORS
,”
beginning
on Page S-3 of this prospectus supplement, on Page 1 of the accompanying prospectus and in the documents incorporated by reference
in this prospectus supplement.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense
.
|
|
Per Unit
|
|
|
Total
|
|
Public offering price
|
|
$
|
0.50
|
|
|
$
|
4,535,000
|
|
Proceeds to us, before expenses
(1)
|
|
$
|
0.50
|
|
|
$
|
4,535,000
|
|
|
(1)
|
The amount of the offering
proceeds to us presented in this table does not give effect to any exercise of the Series
G Warrants being issued in this offering.
|
The date of this prospectus supplement is June 29, 2018
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS SUPPLEMENT
In this prospectus supplement, Arch Therapeutics, Inc. and its consolidated
subsidiary, Arch Biosurgery, Inc., are referred to herein as “
Arch
,” “
the Company
,” “
we
,”
“
us
” and “
our
,” unless the context indicates otherwise.
This prospectus supplement and the accompanying prospectus
relate to the offering of Units comprised of a share of our Common Stock and a Series G Warrant to purchase 0.75 of a share
of our Common Stock. Before buying any of the Units offered hereby, we urge you to carefully read this prospectus supplement
and the accompanying prospectus, together with the information incorporated herein by reference as described in the section
entitled “
WHERE YOU CAN FIND MORE INFORMATION
.” These documents contain important information that you
should consider when making your investment decision. This prospectus supplement contains information about the Units offered
hereby and may add, update or change information in the accompanying prospectus.
You should rely only on the information that we have provided
or incorporated by reference in this prospectus supplement and the accompanying prospectus. Neither we nor any of our affiliates
have authorized any other person to provide you with different information. If anyone provides you with different or inconsistent
information, you should not rely on it.
We are not making offers to sell or solicitations to buy our securities
in any jurisdiction in which an offer or solicitation is not authorized or in which the person making that offer or solicitation
is not qualified to do so or to anyone to whom it is unlawful to make an offer or solicitation. You should assume that the information
in this prospectus supplement and the accompanying prospectus or any related free writing prospectus is accurate only as of the
date on the front of the document and that any information that we have incorporated by reference is accurate only as of the date
of the document incorporated by reference, regardless of the time of delivery of this prospectus supplement, the accompanying prospectus
or any related free writing prospectus, or any sale of a security.
This document is in two parts. The first part is this prospectus
supplement, which adds to and updates information contained in the accompanying prospectus. The second part, the prospectus, provides
more general information, some of which may not apply to this offering. Generally, when we refer to this prospectus, we are referring
to both parts of this document combined. To the extent there is a conflict between the information contained in this prospectus
supplement and the information contained in the accompanying prospectus, you should rely on the information in this prospectus
supplement.
This prospectus supplement and the accompanying prospectus contain
summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents
for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents
referred to herein have been or will be filed as exhibits to the registration statement of which this prospectus is a part or as
exhibits to documents incorporated by reference herein, and you may obtain copies of those documents as described below in the
section entitled “
WHERE YOU CAN FIND MORE INFORMATION
.”
Trademarks and Trade Names
This prospectus supplement contains references to our trademarks
and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus
supplement, including logos, artwork and other visual displays, may appear without the ® or ™ symbols, but such references
are not intended to indicate, in any way, that their respective owners will not assert, to the fullest extent under applicable
law, their rights thereto. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship
with, or endorsement or sponsorship of us by, any other companies.
FORWARD-LOOKING STATEMENTS
This prospectus, including the documents incorporated by reference
herein, contains forward-looking statements. In some cases, you can identify these statements by forward-looking words such as
“may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,”
“believes,” “estimates,” “predicts,” “potential” or “continue,” the
negative or plural of these words and other comparable terminology. These forward-looking statements, which are subject to risks,
uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies
and anticipated trends in our business. These statements are only predictions based on our current expectations and projections
about future events. There are important factors that could cause our actual results, level of activity, performance or achievements
to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking
statements, including those factors discussed under Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for
the fiscal year ended September 30, 2017 and any subsequent updates described in our Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, all of which are incorporated herein by reference and may be amended, supplemented or superseded from time
to time by other reports we file with the Securities and Exchange Commission (the “
SEC
”) in the future.
Although we believe the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither
we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We
are under no duty to update any of these forward-looking statements after the date of this prospectus to conform our prior statements
to actual results or revised expectations.
PROSPECTUS
SUPPLEMENT SUMMARY
This summary highlights selected information about us and this
offering. This summary is not complete and may not contain all of the information that is important to you. We encourage you to
read this prospectus supplement and the accompanying prospectus, including the information under the section entitled “
RISK
FACTORS
” and the information we incorporate by reference, in its entirety.
Our
Company
We are a biotechnology company in the development stage. We have
generated no revenues to date and are devoting substantially all of our operational efforts to the development of our core technology.
We are developing a novel approach to stop bleeding (“
hemostasis
”), control leaking (“
sealant
”)
and manage wounds during surgery, trauma and interventional care. Arch is developing products based on an innovative self-assembling
barrier technology platform with the goal of making care faster and safer for patients. We believe our technology could support
an innovative platform of potential products in the field of stasis and barrier applications. Our plan and business model is to
develop products that apply that core technology for use with bodily fluids and tissues.
Our flagship development stage product candidates, known collectively
as the
AC5 Devices™
(which we sometimes refer to as “
AC5™
”, “
AC5™ Topical
Gel
”, “
AC5 Surgical Hemostatic Device™
”, “
AC5 Surgical Hemostat™
”,
“
AC5 Topical Hemostatic Device™
”, or “
AC5 Topical Hemostat™
”), are being designed
to achieve hemostasis during surgical, wound and interventional care. They rely on our self-assembling peptide (“
SAP
”)
technology and are being designed to achieve hemostasis in skin wounds and in minimally invasive and open surgical procedures.
We intend to develop other product candidates based on our technology platform for use in a range of indications.
AC5 is being designed as a product containing synthetic biocompatible
peptides comprising L amino acids, commonly referred to as naturally occurring amino acids. When applied to a wound, AC5 intercalates
into the interstices of the connective tissue where it self-assembles into a physical, mechanical nanoscale structure that provides
a barrier to leaking substances, such as blood. AC5 may be applied directly as a liquid, which we believe will make it user-friendly
and able to conform to irregular wound geometry. Additionally, AC5 does not possess sticky or glue-like handling characteristics,
which we believe will enhance its utility in several settings, including minimally invasive surgical procedures. Further, in certain
settings, AC5 lends itself to a concept that we call Crystal Clear Surgery™; the transparency and physical properties of
AC5 may enable a surgeon to operate through it in order to maintain a clearer field of vision and prophylactically stop or lessen
bleeding as it starts.
Corporate
Information
We were incorporated under the laws of the State of Nevada on September
16, 2009 as Almah, Inc. On May 10, 2013, we entered into an Agreement and Plan of Merger (the “
Merger Agreement
”)
with Arch Biosurgery, Inc., a private Massachusetts corporation (“
ABS
”) and Arch Acquisition Corporation, our
wholly owned subsidiary formed for the purpose of the transaction, pursuant to which Arch Acquisition Corporation merged with
and into ABS and ABS thereby became our wholly owned subsidiary (the “
Merger
”). The Merger closed on June 26,
2013. In contemplation of the Merger, we changed our name from Almah, Inc. to Arch Therapeutics, Inc. Our principal executive
offices are located at 235 Walnut St., Suite 6, Framingham, Massachusetts 01702. The telephone number of our principal executive
offices is (617) 431-2313. Our website address is
http://www.archtherapeutics.com
. We have not incorporated by reference
into this prospectus the information on our website, and you should not consider it to be a part of this document.
The
Offering
Issuer
|
Arch Therapeutics, Inc.
|
|
|
Securities offered by us
|
We are offering an aggregate of 9,070,000 shares of Common Stock and Series G Warrants to
purchase up to 6,802,500 shares of Common Stock. Each share of Common Stock is being sold together in a Unit with 0.75 of
a Series G Warrant to purchase one share of our Common Stock for the combined purchase price of $0.50 per Unit.
The
shares of Common Stock and the Series G Warrants that comprise the Units are immediately separable and will be issued separately.
This prospectus also registers the shares of Common Stock issuable upon the exercise of the
Series G Warrants being offered.
|
|
|
Common Stock outstanding immediately prior to this offering
(1)
|
154,052,013
shares
|
|
|
Common Stock outstanding immediately after this offering
(2)
|
163,122,013 shares
|
|
|
Warrants we are offering
|
As part of the Units to be sold in this offering, we are offering Series G Warrants to purchase
up to 6,802,500 shares of Common Stock that will be exercisable for five years from the date of issuance at an exercise price
of $0.70 per share, subject to adjustment. This prospectus supplement also relates to the offering of the shares of Common
Stock issuable upon exercise of the Series G Warrants. There is presently no public market for the Series G Warrants we are
offering by means of this prospectus supplement. It is not anticipated that a public market for the Series G Warrants will
develop in the future.
|
|
|
Use of proceeds
|
We estimate that the net proceeds from this offering (exclusive
of any proceeds resulting from the exercise of the Series G Warrants) will be approximately $4,455,000 after deducting
estimated offering expenses of $80,000 payable by us.
We intend to use the net proceeds from this offering primarily
for working capital and general corporate purposes, and have not allocated specific amounts of any such expected net proceeds
from this offering for any specific purposes. See the section of this prospectus supplement entitled “
USE OF
PROCEEDS
.”
|
|
|
Risk Factors
|
Investing in our Common Stock and Series G Warrants involves a high degree of risk, and
the purchasers of our Common Stock and Series G Warrants may lose all or part of their investment. Before deciding to invest
in our securities, please carefully read the section of this prospectus supplement entitled “
RISK FACTORS
,”
including the risks incorporated therein from our Annual Report on Form 10-K for the fiscal year ended September 30, 2017
and our other periodic reports filed with the SEC and incorporated by reference herein and the Risk Factors in the accompanying
prospectus.
|
|
|
OTCQB symbol
|
“ARTH”
|
|
(1)
|
This number is
based on 154,052,013 shares outstanding as of June 28, 2018, which includes 23,335,048
shares of Common Stock held by our affiliates. Excludes (i) 18,838,192 shares of Common
Stock that are reserved for future issuance under our 2013 Stock Incentive Plan (the
“2013 Plan”), of which 14,375,882 shares are subject to outstanding option
awards granted under the 2013 Plan at exercise prices ranging from $0.17 to $0.72 per
share and with a weighted average exercise price of $0.40 per share; (ii) 145,985 shares
of Common Stock issuable upon the exercise of outstanding warrants issued in connection
with the MLSC Loan Agreement, with an exercise price of $0.274 per share (the “MLSC
Warrant”); (iii) 8,974,389 shares of Common Stock issuable upon the exercise of
the Company’s outstanding Series D Warrants with an exercise price of $0.25 per
share; (iv) 4,214,582 shares of Common Stock issuable upon the exercise of the Company’s
outstanding Series E Warrants with an exercise price of $0.438 per share; and (v) 5,991,664
shares of Common Stock issuable upon the exercise of the Company’s outstanding
Series F Warrants with an exercise price of $0.75 per share.
|
|
(2)
|
This number is
based on 154,052,013 shares outstanding as of June 28, 2018, which includes 23,335,048
shares of Common Stock held by our affiliates. Excludes (i) 18,838,192 shares of Common
Stock that are reserved for future issuance under our 2013 Stock Incentive Plan (the
“2013 Plan”), of which 14,375,882 shares are subject to outstanding option
awards granted under the 2013 Plan at exercise prices ranging from $0.17 to $0.72 per
share and with a weighted average exercise price of $0.40 per share; (ii) 145,985 shares
of Common Stock issuable upon the exercise of outstanding warrants issued in connection
with the MLSC Loan Agreement, with an exercise price of $0.274 per share (the “MLSC
Warrant”); (iii) 8,974,389 shares of Common Stock issuable upon the exercise of
the Company’s outstanding Series D Warrants with an exercise price of $0.25 per
share; (iv) 4,214,582 shares of Common Stock issuable upon the exercise of the Company’s
outstanding Series E Warrants with an exercise price of $0.438 per share; and (v) 5,991,664
shares of Common Stock issuable upon the exercise of the Company’s outstanding
Series F Warrants with an exercise price of $0.75 per share; and (vi) 6,802,500 shares
of Common Stock issuable upon the exercise of the Series G Warrants sold in this offering
with an exercise price of $0.70 per share.
|
RISK FACTORS
An investment in our securities involves a high degree of risk.
Prior to making a decision about investing in our securities, you should carefully consider the risks, uncertainties and assumptions
discussed under Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended September 30,
2017 and any subsequent updates described in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of which are
incorporated herein by reference and may be amended, supplemented or superseded from time to time by other reports we file with
the SEC in the future, together with information in this prospectus and any other information incorporated by reference into this
prospectus, including the risk factors set forth below. See the section of this prospectus supplement entitled “
WHERE
YOU CAN FIND MORE INFORMATION
.” Additional risks and uncertainties not presently known to us, or that we currently see
as immaterial, may also harm our business. If any of these risks occur, our business, financial condition and operating results
could be harmed, the trading price of our common stock could decline and you could lose part or all of your investment.
This prospectus supplement also contains forward-looking statements
that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including the risks faced by us described below and elsewhere in this prospectus. See
the section of this prospectus supplement entitled “
FORWARD-LOOKING STATEMENTS
” for information relating to
these forward-looking statements.
Risks
Related to this Offering
Management will have broad discretion as to the use of the
proceeds from this offering, and we may not use the proceeds effectively.
We intend to use the net proceeds from this offering primarily for
working capital and general corporate purposes, and have not allocated specific amounts of any such expected net proceeds from
this offering for any specific purposes. Accordingly, our management will have broad discretion in the application of the net proceeds
from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our
Common Stock. You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will
not have the opportunity, as part of your investment decision, to assess whether the net proceeds are being used appropriately.
It is possible that the net proceeds will be invested in a way that does not yield a favorable, or any, return for us. Our failure
to apply these funds effectively could have a material adverse effect on our business and cause the price of our Common Stock to
decline.
You will experience immediate and substantial dilution in
the net tangible book value of the Common Stock you purchase in this offering
.
Since the public offering price of the securities offered pursuant
to this prospectus supplement and the accompanying prospectus is higher than the net tangible book value per share of our Common
Stock, you will incur substantial dilution in the net tangible book value of the Common Stock you purchase in this offering. After
giving effect to the sale of 9,070,000 shares of Common Stock together with Series G Warrants to purchase 6,802,500 shares of
Common Stock, and after deducting offering expenses of $80,000 payable by us, if you purchase securities in this offering, you
will incur immediate and substantial dilution of approximately $0.46 per share in the net tangible book value of the Common Stock
you acquire based on our net tangible book value as of March 31, 2018, on a pro-forma basis as described in the section entitled
“
DILUTION
” on Page S-5.
In the event that any of the Series G Warrants sold in this offering
are exercised, you will experience additional dilution to the extent that the exercise price of those Series G Warrants is higher
than the net tangible book value of our Common Stock at the time of exercise.
A substantial number of shares of our Common Stock may be
sold in this offering, which could cause the price of our Common Stock to decline.
In addition to the shares of Common Stock to be sold in this offering,
the investors in this offering will receive Series G Warrants to purchase 75% of the number of shares such investors purchased
in this offering. This sale and any future sales of a substantial number of shares of our Common Stock in the public market, or
the perception that such sales may occur, could adversely affect the price of our Common Stock on the OTCQB marketplace. We cannot
predict the effect, if any, that market sales of those shares of Common Stock or the availability of those shares of Common Stock
for sale will have on the market price of our Common Stock.
The investors in this offering may be diluted by exercises
of outstanding options and warrants.
As of June 28, 2018, we had outstanding options to purchase an
aggregate of 14,375,882 shares of our Common Stock at exercise prices ranging from $0.17 to $0.72 per share and with a weighted
average exercise price of $0.40 per share, and 145,985 shares of Common Stock issuable upon the exercise of the MLSC Warrant with
an exercise price of $0.274 per share, 8,974,389 shares of Common Stock issuable upon the exercise of the Company’s outstanding
Series D Warrants with an exercise price of $0.25 per share, 4,214,582 shares of Common Stock issuable upon the exercise of the
Company’s outstanding Series E Warrants with an exercise price of $0.438 per share, 5,991,664 shares of Common Stock issuable
upon the exercise of the Company’s outstanding Series F Warrants with an exercise price of $0.75 per share. We will be issuing
to the purchasers in this offering up to an additional 6,802,500 Series G Warrants with an exercise price exercise price of $0.70
per share. The exercise of such outstanding options and warrants will result in dilution of the value of our shares.
There is no public market for the Series G Warrants being
offered, and we do not anticipate such a market ever developing in the future.
There is no established public trading market for the Series G
Warrants being offered by us in this offering and we do not intend to have the Series G Warrants listed on a national securities
exchange or any other recognized trading system in the future. Without an active market, the liquidity of the Series G Warrants
will be limited.
The Series G Warrants being offered may not have value.
The Series G Warrants being offered by us in this offering have
an exercise price of $0.70 per share and expire five years from the date of issuance. In the event that the market price of our
Common Stock does not exceed the exercise price of the Series G Warrants during the period when the Series G Warrants are exercisable,
the Series G Warrants may not have any value.
Holders of our Series G Warrants will have no rights as shareholders
until they acquire shares of our Common Stock, if ever.
If you acquire Series G Warrants to purchase shares of our Common
Stock in this offering, you will have no rights with respect to our Common Stock until you acquire shares of such Common Stock
upon exercise of your Series G Warrants. Upon exercise of your Series G Warrants, you will be entitled to exercise the rights of
a common shareholder only as to matters for which the record date occurs after the exercise date.
The price of our Common Stock has been and could remain volatile,
and the market price of our Common Stock may decrease.
The market price of our Common Stock has historically experienced
and may continue to experience significant volatility. From March 31, 2017 through March 31, 2018, the closing price of our Common
Stock has fluctuated from a high of $0.86 per share in the month ended August 31, 2017 to a low of $0.28 in the month ended February
28, 2018. The volatile nature of our Common Stock per share price may cause investment losses for our stockholders. In addition,
the market price of stock in small capitalization biotechnology companies is often driven by investor sentiment, expectation and
perception, all of which may be independent of fundamental valuation metrics or traditional financial performance metrics, thereby
exacerbating volatility. In addition, our Common Stock is quoted on the QB tier of the OTC Marketplace, which may increase price
quotation volatility and could limit liquidity, all of which may adversely affect the market price of our shares.
Our Common Stock is classified as “penny stock”
and trading of our shares may be restricted by the SEC’s penny stock regulations.
Rules 15g-1 through 15g-9 promulgated under the Securities Exchange
Act of 1934 (the “
Exchange Act
”) impose sales practice and disclosure requirements on certain brokers-dealers
who engage in transactions involving a “penny stock.” The SEC has adopted regulations which generally define “penny
stock” to be any equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00
per share, subject to certain exceptions. Our Common Stock is covered by the penny stock rules, which impose additional sales practice
requirements on broker-dealers who sell to persons other than established customers and “accredited investors.” The
penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver
a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations
for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements
showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that,
prior to a transaction in a penny stock that is not otherwise exempt, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for stock that
is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade
our securities. We believe that the penny stock rules may discourage investor interest in and limit the marketability of our Common
Stock.
Our Common Stock is not listed on a national securities exchange
and, as a result, compliance with applicable state securities laws may be required for subsequent offers, transfers and sales of
the shares of Common Stock and Series G Warrants offered hereby.
The shares of our Common Stock and the Series G Warrants offered
hereby are being offered only in a limited number of states in which we have either registered and/or qualified the Common Stock
and Series G Warrants for sale or pursuant to one or more exemptions from such registration and qualification requirements. We
have not registered or qualified the shares of Common Stock and the Series G Warrants offered hereby for subsequent offer, transfer
or sale in any state. Because our Common Stock is not listed on a national securities exchange, subsequent transfers of the shares
of our Common Stock and Series G Warrants offered hereby by U.S. holders may not be exempt from state securities laws. In such
event, it will be the responsibility of the holder of shares or Series G Warrants to register or qualify the shares or the Series
G Warrants for any subsequent offer, transfer or sale in the United States or to determine that any such offer, transfer or sale
is exempt under applicable state securities laws.
USE OF PROCEEDS
We intend to use the net proceeds from this offering primarily for
working capital and general corporate purposes, and have not allocated specific amounts of any such expected net proceeds from
this offering for any specific purposes. As a result, our management will have broad discretion to allocate the net proceeds from
this offering.
DILUTION
The net tangible book value of our Common Stock on March 31, 2018
was approximately $2.0 million or approximately $0.013 per share, based on 154,052,013 shares of our Common Stock outstanding as
of March 31, 2018. We calculate net tangible book value per share by subtracting our total liabilities and prepaid expenses from
our total tangible assets and dividing the difference by the number of outstanding shares of our Common Stock. Dilution in net
tangible book value per share to the new investors represents the difference between the amount per share paid by purchasers of
shares of our Common Stock in this offering and the net tangible book value per share of our Common Stock immediately afterwards.
The investors participating in this offering will incur immediate
and significant dilution. After giving effect to the issuance and sale of shares of our Common Stock and Series G Warrants in
this offering at a public offering price of $0.50 per Unit comprised of one share of our Common Stock and a Series G Warrant to
purchase 0.75 of a share of Common Stock, after deducting the estimated offering expenses of $80,000 payable by us, our as adjusted
net tangible book value as of March 31, 2018 would have been approximately $6.5 million, or approximately $0.040 per share of
our Common Stock.
This represents an immediate increase in net tangible book value
of approximately $0.027 per share to existing stockholders and immediate dilution in net tangible book value of $0.46 per share
to the new investors purchasing our Common Stock in this offering at the public offering price.
The following table illustrates this per share dilution:
Public offering price per Unit
|
|
$
|
0.50
|
|
Net tangible book value per share as of March 31, 2018
|
|
$
|
0.013
|
|
Increase in net tangible book value per share attributable to this offering
|
|
$
|
0.027
|
Pro forma net tangible book value per share as of March 31, 2018, after giving effect to this
Offering and the Offering Expenses
|
|
$
|
0.040
|
|
Dilution per share to the new investors in this offering
|
|
$
|
0.46
|
|
The table above excludes the following:
|
·
|
18,838,192 shares are subject to outstanding option
awards granted under the 2013 Plan at exercise prices ranging from $0.17 to $0.72 per share and with a weighted average exercise
price of $0.40 per share;
|
|
·
|
145,985 shares of Common Stock issuable upon the exercise
of the MLSC Warrant with an exercise price of $0.274 per share;
|
|
·
|
8,974,389 shares of Common Stock issuable upon the
exercise of the Company’s outstanding Series D Warrants with an exercise price of $0.25 per share;
|
|
·
|
4,214,582 shares of Common Stock issuable upon the
exercise of the Company’s outstanding Series E Warrants with an exercise price of $0.438 per share;
|
|
·
|
5,991,664 shares of Common Stock issuable upon the
exercise of the Company’s outstanding Series F Warrants with an exercise price of $0.75 per share; and
|
|
·
|
6,802,500
shares of Common Stock issuable upon the exercise of the Series G Warrants sold in this
offering with an exercise price of $0.70 per share.
|
DESCRIPTION OF OF THE SECURITIES WE
ARE OFFERING
General
Effective May 24, 2013, we amended our Articles of Incorporation
to increase our authorized Common Stock from 75,000,000 shares to 300,000,000 shares. Other than our Common Stock, we have no other
class or series of authorized capital stock.
As of June 28, 2018, we had 154,052,013 shares of Common Stock issued
and outstanding.
The additional shares of our authorized stock available for issuance
may be issued at times and under circumstances so as to have a dilutive effect on earnings per share and on the equity ownership
of the holders of our Common Stock. The ability of our Board of Directors (the “
Board
”) to issue additional
shares of stock could enhance the Board’s ability to negotiate on behalf of the stockholders in a takeover situation but
could also be used by the Board to make a change-in-control more difficult, thereby denying stockholders the potential to sell
their shares at a premium and entrenching current management. The following description is a summary of the material provisions
of our capital stock. You should refer to our Articles of Incorporation, as amended, and amended and restated bylaws, both of which
are on file with the SEC as exhibits to previous SEC filings, for additional information. The summary below is qualified by provisions
of applicable law.
Common
Stock
The holders of our Common Stock, par value $0.001 per share, are
entitled to one vote per share on all matters submitted to a vote of our stockholders, including the election of directors. Our
Articles of Incorporation do not provide for cumulative voting in the election of directors, and our amended and restated bylaws
provide that directors are elected by a plurality vote of the votes cast and entitled to vote on the election of directors at any
meeting for the election of directors at which a quorum is present. Matters other than the election of directors to be voted on
by stockholders are generally approved if, at a duly convened stockholder meeting, the number of votes cast in favor of the action
exceeds the number of votes cast in opposition to the action, unless a different vote for the action is required by applicable
law, our Articles of Incorporation or our amended and restated bylaws. Applicable Nevada law requires any amendment to our Articles
of Incorporation to be approved by stockholders holding shares entitling them to exercise at least a majority of the voting power
of the Company. The holders of our Common Stock will be entitled to cash dividends as may be declared, if any, by the Board from
funds available. Upon liquidation, dissolution or winding up of our Company, the holders of our Common Stock (the “
Common
Stockholders
”) will be entitled to receive pro rata all assets available for distribution to the holders. All rights
of our Common Stockholders described in this paragraph could be subject to any preferential voting, liquidation or other rights
of any series of preferred stock that we may authorize and issue in the future. Our Common Stock is presently traded on the QB
tier of the OTC Marketplace under the trading symbol “
ARTH
”.
Description
of Series G Warrants
Form
. The Series G Warrants will be issued as individual
warrant agreements to the investors. The material terms and provisions of the Series G Warrants offered hereby are summarized below.
The following description is subject to, and qualified in its entirety by, the form of Series G Warrant, which was or will be filed
with the SEC as an exhibit to a Current Report on Form 8-K in connection with this offering. You should review a copy of the form
of Series G Warrant for a complete description of the terms and conditions applicable to the Series G Warrants.
Exercisability.
The Series G Warrants are exercisable beginning
on the date of issuance, and at any time up to five (5) years from the date of issuance. The Series G Warrants will be exercisable,
at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice followed by, within three
trading days following the date of exercise, payment in full for the number of shares of our Common Stock purchased upon such exercise
(except in the case of a cashless exercise as discussed below). No fractional shares of Common Stock will be issued in connection
with the exercise of a Series G Warrant. In lieu of fractional shares, we will, at our option, either (i) pay the holder an amount
in cash equal to the fractional amount multiplied by the market value of a share of Common Stock; or (ii) round up to the next
whole share. The Series G Warrants provide that they shall not be exercisable in the event and to the extent that the exercise
thereof would result in the holder of the Series G Warrant, together with its affiliates and any other persons whose beneficial
ownership of Common Stock would be aggregated with the holder’s, would be deemed to beneficially own more than 4.99% of the
Common Stock immediately after giving effect to the exercise of the Series G Warrant;
provided, however
, the holder, upon
notice to us, may increase or decrease the ownership limitation,
provided that
any increase is limited to a maximum of 9.99%
of the Company’s Common Stock, and any increase in the ownership limitation will not become effective until the 61
st
day after delivery of such notice.
Cashless Exercise.
If, at any time during the term of the
Series G Warrants, the issuance of shares of our Common Stock upon exercise of the Series G Warrants is not covered by an effective
registration statement, the holder is permitted to effect a cashless exercise of the Series G Warrants (in whole or in part) by
having the holder deliver to us a duly executed exercise notice, canceling a portion of the Series G Warrant in payment of the
purchase price payable in respect of the number of shares of our Common Stock purchased upon such exercise.
Exercise Price.
Each Series G Warrant represents the right
to purchase a share of Common Stock at an exercise price equal to $0.70 per share, subject to adjustment as described below. The
exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock
combinations, reclassifications or similar events affecting our Common Stock.
Transferability.
Subject to applicable laws, the Series G
Warrants may be offered for sale, sold, transferred or assigned without our consent.
Exchange Listing.
There is no public trading market for the
Series G Warrants, and we do not expect a market to develop. In addition, we do not intend to apply for listing of the Series G
Warrants on any securities exchange or other trading system.
Rights as a Stockholder.
Except as otherwise provided in
the Series G Warrants or by virtue of such holder’s ownership of shares of our Common Stock, the holder of a Series G Warrant
does not have the rights or privileges of a holder of our Common Stock, including any voting rights, until the holder exercises
the Series G Warrant.
Optional Payment upon a Fundamental Transaction
. If the Company
undergoes a change of control or is involved in a similar transaction, the holder may cause the Company or any successor entity
to purchase its Series G Warrant for an amount of cash equal to $0.18 for each share of Common Stock underlying the Series G Warrant.
Transfer
Agent and Registrar
The transfer agent for our common stock is Empire Stock Transfer.
Our transfer agent’s address is 1859 Whitney Mesa Drive, Henderson, Nevada 89014.
PLAN OF DISTRIBUTION
We have arranged for the sale of the Units we are offering pursuant
to this prospectus supplement to one or more institutional investors, “accredited investors” (as that term is defined
in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “
Securities Act
”)) and/or existing
securityholders, through a securities purchase agreement with the investors. All of the Units will be sold at the same price and,
we expect, at a single closing.
We established the price for the Units following negotiations with
prospective investors and with reference to the prevailing market price of our Common Stock, recent trends in such price and other
factors. It is possible that not all of the Units we are offering pursuant to this prospectus supplement will be sold at the closing,
in which case our net proceeds would be reduced. We expect that the sale of the Units will be completed on or shortly following
the date indicated on the cover page of this prospectus supplement.
LEGAL MATTERS
Unless otherwise indicated in the applicable prospectus
supplement, the validity of the securities offered hereby will be passed upon for us by McDonald Carano LLP, Reno, Nevada and
Lowenstein Sandler LLP.
EXPERTS
The consolidated financial statements of Arch Therapeutics, Inc.
and ad its consolidated subsidiary, Arch Biosurgery, Inc. as of September 30, 2017 and 2016, and for each of the years then ended,
have been audited by Moody, Famiglietti & Andronico, LLP, an independent registered public accounting firm as stated in their
report dated November 15, 2017 which is incorporated herein by reference. Such consolidated financial statements have been incorporated
herein by reference in reliance on the report of such firm, given upon their authority as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read or obtain a copy of these reports at the SEC’s public reference room at
100 F Street, N.E., Washington, D.C. 20549, on official business days during the hours of 10:00 am to 3:00 pm. You may obtain
information on the operation of the public reference room and its copy charges by calling the SEC at 1-800-SEC-0330. The SEC maintains
a website, at
http://www.sec.gov
, that contains registration statements, reports, proxy information statements and other
information regarding registrants that file electronically with the SEC, including us. Our website address is
http://www.archtherapeutics.com
.
We have not incorporated by reference into this prospectus the information on our website, and you should not consider it to be
a part of this document.
The SEC allows us to “incorporate by reference” information
that we file with it into this prospectus, which means that we can disclose important information to you by referring you to those
documents. The information incorporated by reference is an important part of this prospectus. The information incorporated by reference
is considered to be a part of this prospectus, and information that we file later with the SEC will automatically update and supersede
information contained in this prospectus and any accompanying prospectus supplement.
We incorporate by reference the documents listed below that we have
previously filed with the SEC, each of which has Exchange Act File No. 000-54986 unless otherwise noted:
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our Annual Report on Form 10-K for the fiscal year
ended September 30, 2017, filed with the SEC on November 15, 2017;
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our Quarterly Reports on Form 10-Q for the quarters
ended December 31, 2017 and March 31, 2018, filed with the SEC on February 2, 2018 and April 26, 2018, respectively;
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our Current Reports on Form 8-K, filed with the SEC
on December 18, 2017, February 5, 2018, March 12, 2018, May 8, 2018, June 15, 2018, and June 26, 2018 respectively, in each case
pursuant to the Exchange Act; and
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the description of our common stock as set forth under
the caption “Description of Securities” in our Registration Statement on Form S-1/A (File No. 333-178883), as amended
and filed with the SEC on February 24, 2012, including any amendments thereto or reports filed for the purposes of updating this
description (including our Current Report on Form 8-K filed with the SEC on June 26, 2013 (File No. 333-178883)).
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All reports and other documents that we file with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus but before the termination of the offering
of the securities hereunder will also be considered to be incorporated by reference into this prospectus from the date of the filing
of these reports and documents, and will supersede the information herein;
provided, however
, that all reports, exhibits
and other information that we “furnish” to the SEC will not be considered incorporated by reference into this prospectus.
Any statement contained in a document incorporated by reference in this prospectus or any prospectus supplement shall be deemed
to be modified or superseded to the extent that a statement contained herein, therein or in any other subsequently filed document
that also is incorporated by reference herein or therein modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus or any prospectus supplement.
We will provide you without charge, upon your oral or written request,
with a copy of any or all reports, proxy statements and other documents we file with the SEC, as well as any or all of the documents
incorporated by reference in this prospectus or the registration statement (other than exhibits to such documents unless such exhibits
are specifically incorporated by reference into such documents). Requests for such copies should be directed to:
Arch Therapeutics, Inc.
235 Walnut St., Suite 6
Framingham, MA 01702
(617) 431-2313
PROSPECTUS
$50,000,000
Common
Stock
Warrants
Debt
Securities
Subscription
Rights
Units
We may offer and sell an indeterminate number of shares of our common
stock, warrants, debt securities and subscription rights from time to time under this prospectus. We may offer these securities
separately or as units, which may include combinations of the securities. We will describe in a prospectus supplement the securities
we are offering and selling, as well as the specific terms of the securities.
We may offer these securities in amounts, at prices and on terms
determined at the time of offering. We may sell the securities directly to you, through agents we select, or through underwriters
and dealers we select. If we use agents, underwriters or dealers to sell the securities, we will name them and describe their compensation
in a prospectus supplement.
Our common stock is currently quoted on the QB tier of the OTC Marketplace
(“
OTCQB
”) under the symbol “
ARTH
”. On October 14, 2016, the closing price of our common stock
was $0.62 per share. We have no warrants, debt securities, subscription rights or units listed on any securities exchange or market.
Investing in our securities involves certain risks. See “RISK
FACTORS” beginning on Page 1 of this prospectus and in the applicable prospectus supplement for certain risks you should
consider. You should read the entire prospectus carefully before you make your investment decision.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The date of this prospectus is October 20, 2016
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed
with the Securities and Exchange Commission (the “
SEC
”) utilizing a “shelf” registration process.
Under this shelf process, we may sell any combination of the securities described in this prospectus in one or more offerings.
This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide
a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may
also add, update or change information contained in this prospectus. You should read both this prospectus and any prospectus supplement
together with additional information described under the heading “
WHERE YOU CAN FIND MORE INFORMATION
.”
We have not authorized anyone to provide any information other than
that contained or incorporated by reference in this prospectus or to which we have referred you. We take no responsibility for,
and can provide no assurance as to the reliability of, any other information that others may give you. We are not making an offer
of these securities in any state where the offer is not permitted. You should not assume that the information contained in or incorporated
by reference in this prospectus or any prospectus supplement is accurate as of any date other than their respective dates.
FORWARD-LOOKING STATEMENTS
This prospectus, including the documents incorporated by reference
herein, contains forward-looking statements. In some cases, you can identify these statements by forward-looking words such as
“may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,”
“believes,” “estimates,” “predicts,” “potential” or “continue,” the
negative or plural of these words and other comparable terminology. These forward-looking statements, which are subject to risks,
uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies
and anticipated trends in our business. These statements are only predictions based on our current expectations and projections
about future events. There are important factors that could cause our actual results, level of activity, performance or achievements
to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking
statements, including those factors discussed under the caption entitled “Risk Factors” in our Annual Report on Form
10-K for the year ended September 30, 2015.
Although we believe the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither
we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We
are under no duty to update any of these forward-looking statements after the date of this prospectus to conform our prior statements
to actual results or revised expectations.
PROSPECTUS SUMMARY
Our
Company
We are a biotechnology company in the development stage with limited
operations to date. We aim to develop products that make surgery and interventional care faster and safer by using a novel approach
that stops bleeding (referenced as “
hemostatic
” or “
hemostasis
”), controls leaking (referenced
as “
sealant
” or “
sealing
”), and provides other advantages during surgery and trauma care.
Our core technology is based on a self-assembling peptide that creates a physical, mechanical barrier, which could be applied to
seal organs or wounds that are leaking blood and other fluids. We believe our technology could support an innovative platform of
potential products in the field of stasis and barrier applications. Our lead product candidate, the AC5 Surgical Hemostatic Device™
(which we sometimes refer to as “
AC5™
”), is designed to achieve hemostasis in minimally invasive and open
surgical procedures, and we hope to develop other hemostatic or sealant product candidates in the future based on our self-assembling
peptide technology platform. Our plan and business model is to develop products that apply that core technology to use with human
bodily fluids and connective tissues.
AC5 is designed to be a biocompatible synthetic peptide comprising
naturally occurring amino acids. When applied to a wound, AC5 intercalates into the interstices of the connective tissue where
it self-assembles into a physical, mechanical structure that provides a barrier to leaking substances, such as blood. AC5 is designed
for direct application as a liquid, which we believe will make it user-friendly and able to conform to irregular wound geometry.
Additionally, AC5 is not sticky or glue-like, which we believe will enhance its utility in the setting of minimally invasive and
laparoscopic surgeries. Further, in certain settings, AC5 lends itself to a concept that we call Crystal Clear Surgery™ because
the transparency and physical properties of AC5 enable a surgeon to operate through it in order to maintain a clearer field of
vision and prophylactically stop or lessen bleeding as it starts.
Corporate
Information
We were incorporated under the laws of the State of Nevada on September
16, 2009 as Almah, Inc. On May 10, 2013, we entered into an Agreement and Plan of Merger (the “
Merger Agreement
”)
with Arch Biosurgery, Inc., a private Massachusetts corporation (“
ABS
”) and Arch Acquisition Corporation, our
wholly owned subsidiary formed for the purpose of the transaction, pursuant to which Arch Acquisition Corporation merged with
and into ABS and ABS thereby became our wholly owned subsidiary (the “
Merger
”). The Merger closed on June 26,
2013. In contemplation of the Merger, we changed our name from Almah, Inc. to Arch Therapeutics, Inc. Our principal executive
offices are located at 235 Walnut St., Suite 6, Framingham, Massachusetts 01702. The telephone number of our principal executive
offices is (617) 431-2313. Our website address is
http://www.archtherapeutics.com
. We have not incorporated by reference
into this prospectus the information on our website, and you should not consider it to be a part of this document.
RISK FACTORS
You should carefully consider all of the information in this prospectus
and, in particular, you should evaluate the specific risk factors incorporated by reference herein and included or incorporated
by reference in any applicable prospectus supplement.
USE OF PROCEEDS
Unless otherwise indicated in a prospectus supplement, the net proceeds
from the sale of the securities will be used for working capital and general corporate purposes, which may include acquisitions,
retirement of debt and other business opportunities. While we do not have agreements or commitments for any specific acquisitions
or investments at this time, we may be required to use a portion of any such net proceeds to satisfy our indebtedness to Massachusetts
Life Sciences Center (“
MLSC
”). Pursuant to the Life Sciences Accelerator Funding Agreement that we entered into
MLSC on September 30, 2013 and amended on September 28, 2016 (as amended, the “
MLSC Loan Agreement
”), we are
required to
amortize the principal and accrued interest under the MLSC Loan Agreement by making 13
monthly payments of approximately $106,022 each to MLSC commencing on October 3, 2016. In addition, the remaining principal and
accrued interest under the MLSC Loan Agreement will become immediately due and payable on the earlier of
(i) the completion
of a sale of substantially all of our assets, a change-of-control transaction or one or more financing transactions in which we
receive net proceeds of $5,000,000 at any time after October 3, 2016; and (ii) the occurrence of an event of default by us under
the MLSC Loan Agreement.
When particular securities are offered, the prospectus supplement
relating to that offering will set forth our intended use of the net proceeds received from the sale of those securities we sell.
Pending the application of the net proceeds for these purposes, we expect to invest the proceeds in short-term, interest-bearing
instruments or other investment-grade securities.
DESCRIPTION OF CAPITAL STOCK
General
Effective May 24, 2013, we amended our Articles of Incorporation
to increase our authorized Common Stock from 75,000,000 shares to 300,000,000 shares. Other than our Common Stock, we have no other
class or series of authorized capital stock.
As of October 14, 2016, we had 136,457,075 shares of common stock
issued and outstanding.
The additional shares of our authorized stock available for issuance
may be issued at times and under circumstances so as to have a dilutive effect on earnings per share and on the equity ownership
of the holders of our common stock. The ability of our Board of Directors (the “
Board
”) to issue additional
shares of stock could enhance the Board’s ability to negotiate on behalf of the stockholders in a takeover situation but
could also be used by the Board to make a change-in-control more difficult, thereby denying stockholders the potential to sell
their shares at a premium and entrenching current management. The following description is a summary of the material provisions
of our capital stock. You should refer to our articles of incorporation, as amended, and bylaws, both of which are on file with
the SEC as exhibits to previous SEC filings, for additional information. The summary below is qualified by provisions of applicable
law.
C
ommon
Stock
The holders of our common stock, par value $0.001 per share, are
entitled to one vote per share on all matters submitted to a vote of our stockholders, including the election of directors. Our
articles of incorporation do not provide for cumulative voting in the election of directors, and our amended and restated bylaws
provide that directors are elected by a plurality vote of the votes cast and entitled to vote on the election of directors at any
meeting for the election of directors at which a quorum is present. Matters other than the election of directors to be voted on
by stockholders are generally approved if, at a duly convened stockholder meeting, the number of votes cast in favor of the action
exceeds the number of votes cast in opposition to the action, unless a different vote for the action is required by applicable
law, our articles of incorporation or our amended and restated bylaws. Applicable Nevada law requires any amendment to our articles
of incorporation to be approved by stockholders holding shares entitling them to exercise at least a majority of the voting power
of the Company. The holders of our common stock will be entitled to cash dividends as may be declared, if any, by the Board from
funds available. Upon liquidation, dissolution or winding up of our Company, the holders of our common stock (the “
common
stockholders
”) will be entitled to receive pro rata all assets available for distribution to the holders. All rights
of our common stockholders described in this paragraph could be subject to any preferential voting, liquidation or other rights
of any series of preferred stock that we may authorize and issue in the future. Our common stock is presently traded on the QB
tier of the OTC Marketplace under the trading symbol “
ARTH
”.
Anti-Takeover
Provisions of Nevada State Law
Some features of the Nevada Revised Statutes (“
NRS
”),
which are further described below, may have the effect of deterring third parties from making takeover bids for control of us or
may be used to hinder or delay a takeover bid. This would decrease the chance that our common stockholders would realize a premium
over market price for their shares of common stock as a result of a takeover bid.
Acquisition of Controlling Interest
The NRS contain provisions governing acquisition of a controlling
interest of a Nevada corporation. These provisions provide generally that any person or entity that acquires a certain percentage
of the outstanding voting shares of a Nevada corporation may be denied voting rights with respect to the acquired shares, unless
certain criteria are satisfied. Our amended and restated bylaws provide that these provisions will not apply to us or to any existing
or future common stockholder or common stockholders.
Combination with Interested Stockholder
The NRS contain provisions governing combinations of a Nevada corporation
that has 200 or more stockholders of record with an “interested stockholder.” These provisions only apply to a Nevada
corporation that, at the time the potential acquirer became an interested stockholder, has a class or series of voting shares listed
on a national securities exchange, or has a class or series of voting shares traded in an “organized market” and satisfies
certain specified public float and stockholder levels. As we do not now meet those requirements, we do not believe that these provisions
are currently applicable to us. However, to the extent they become applicable to us in the future, they may have the effect of
delaying or making it more difficult to affect a change in control of the Company in the future
.
A corporation affected by these provisions may not engage in a combination
within two years after the interested stockholder acquires his, her or its shares unless the combination or purchase is approved
by the board of directors before the interested stockholder acquired such shares. Generally, if approval is not obtained, then
after the expiration of the two-year period, the business combination may be consummated with the approval of the board of directors
before the person became an interested stockholder or a majority of the voting power held by disinterested stockholders, or if
the consideration to be received per share by disinterested stockholders is at least equal to the highest of:
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the highest price per share paid by the interested
stockholder within the three years immediately preceding the date of the announcement of the combination or within three years
immediately before, or in, the transaction in which he, she or it became an interested stockholder, whichever is higher;
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the market value per share on the date of announcement
of the combination or the date the person became an interested stockholder, whichever is higher; or
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if higher for the holders of preferred stock, the highest
liquidation value of the preferred stock, if any.
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Generally, these provisions define an interested stockholder as
a person who is the beneficial owner, directly or indirectly of 10% or more of the voting power of the outstanding voting shares
of a corporation, and define combination to include any merger or consolidation with an interested stockholder, or any sale, lease,
exchange, mortgage, pledge, transfer or other disposition, in one transaction or a series of transactions with an interested stockholder
of assets of the corporation:
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having an aggregate market value equal to 5% or more
of the aggregate market value of the assets of the corporation;
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having an aggregate market value equal to 5% or more
of the aggregate market value of all outstanding shares of the corporation; or
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representing 10% or more of the earning power or net
income of the corporation.
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Warrants
Issued and Outstanding
As of October 14, 2016, we had issued and outstanding:
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Series A Warrants to purchase 1,125,000 shares of common
stock issuable thereunder at an exercise price of $0.20 per share;
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Series D Warrants to purchase 10,951,663 shares of
common stock issuable thereunder at an exercise price of $0.25 per share;
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Series E Warrants to purchase 6,333,323 shares of common
stock issuable thereunder at an exercise price of $0.4380 per share; and
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A warrant issued to the Massachusetts Life Sciences
Center (“
MLSC
”) in connection with the our loan agreement with MLSC to purchase up to 145,985 shares of common
stock issuable thereunder at an exercise price of $0.274 per share.
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Transfer
Agent and Registrar
The transfer agent for our common stock is Empire Stock Transfer.
Our transfer agent’s address is 1859 Whitney Mesa Drive, Henderson, Nevada 89014.
DESCRIPTION OF WARRANTS
We may issue warrants to purchase our debt or equity securities
or securities of third parties or other rights, including rights to receive payment in cash or securities based on the value, rate
or price of one or more specified commodities, currencies, securities or indices, or any combination of the foregoing. Warrants
may be issued independently or together with any other securities and may be attached to, or separate from, such securities. Each
series of warrants will be issued under a separate warrant agreement to be entered into between us and a bank, trust company or
other financial institution, as warrant agent, or we may issue warrants directly to investors. A description of the terms and material
provisions of any warrants we may issue will be set forth in the applicable prospectus supplement.
The applicable prospectus supplement will describe the following
terms of any warrants in respect of which this prospectus is being delivered:
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the title of such warrants;
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the aggregate number of such warrants;
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the price or prices at which such warrants will be
issued;
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the currency or currencies in which the price of such
warrants will be payable;
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the securities or other rights, including rights to
receive payment in cash or securities based on the value, rate or price of one or more specified commodities, currencies, securities
or indices, or any combination of the foregoing, purchasable upon exercise of such warrants;
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the price at which and the currency or currencies in
which the securities or other rights purchasable upon exercise of such warrants may be purchased;
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the date on which the right to exercise such warrants
shall commence and the date on which such right shall expire;
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if applicable, the minimum or maximum amount of such
warrants which may be exercised at any one time;
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provision for changes to or adjustments in the exercise
price of such warrants, if any;
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if applicable, the designation and terms of the securities
with which such warrants are issued and the number of such warrants issued with each such security;
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if applicable, the date on and after which such warrants
and the related securities will be separately transferable;
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information with respect to book-entry procedures,
if any;
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if applicable, a discussion of any material United
States Federal income tax considerations; and
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any other terms of such warrants, including terms,
procedures and limitations relating to the exchange and exercise of such warrants.
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DESCRIPTION OF DEBT SECURITIES
This prospectus describes certain general terms and provisions of
debt securities that we may offer. The debt securities may be issued pursuant to, in the case of senior debt securities, a senior
indenture, and in the case of subordinated debt securities, a subordinated indenture, in each case in the forms filed as exhibits
to this registration statement, which we refer to as the “
indentures
.” The indentures will be entered into between
us and a trustee to be named prior to the issuance of any debt securities, which we refer to as the “
trustee
.”
The indentures will not limit the amount of debt securities that can be issued thereunder and will provide that the debt securities
may be issued from time to time in one or more series pursuant to the terms of one or more securities resolutions or supplemental
indentures creating such series.
We have summarized below the material provisions of the indentures
and the debt securities or indicated which material provisions will be described in the related prospectus supplement for any offering
of debt securities. These descriptions are only summaries, and you should refer to the relevant indenture for the particular offering
of debt securities itself which will describe completely the terms and definitions of the offered debt securities and contain additional
information about the debt securities.
All references in this section, “
DESCRIPTION OF DEBT SECURITIES
,”
to “
Arch
,” the “
Company
”, “
we
”, “
us
”, “
our
”,
the “
registrant
” or similar words are solely to Arch Therapeutics, Inc., and not to its subsidiaries.
Terms
When we offer to sell a particular series of debt securities, we
will describe the specific terms of the securities in a prospectus supplement. The prospectus supplement will set forth the following
terms, as applicable, of the debt securities offered thereby:
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the designation, aggregate principal amount, currency
or composite currency and denominations;
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the price at which such debt securities will be issued
and, if an index formula or other method is used, the method for determining amounts of principal or interest;
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the maturity date and other dates, if any, on which
principal will be payable;
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whether or not the debt securities will be secured
or unsecured, and the terms of any secured debt;
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whether the debt securities rank as senior debt, senior
subordinated debt, subordinated debt or any combination thereof, and the terms of any subordination;
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the interest rate (which may be fixed or variable),
if any;
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the date or dates from which interest will accrue and
on which interest will be payable, and the record dates for the payment of interest;
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the manner of paying principal and interest;
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the place or places where principal and interest will
be payable;
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the terms of any mandatory or optional redemption by
us or any third party including any sinking fund;
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the terms of any conversion or exchange;
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the terms of any redemption at the option of holders
or put by the holders;
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any tax indemnity provisions;
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if the debt securities provide that payments of principal
or interest may be made in a currency other than that in which debt securities are denominated, the manner for determining such
payments;
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the portion of principal payable upon acceleration
of a Discounted Debt Security (as defined below);
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whether and upon what terms debt securities may be
defeased;
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any events of default or covenants in addition to or
in lieu of those set forth in the indentures;
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provisions for electronic issuance of debt securities
or for debt securities in uncertificated form; and
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any additional provisions or other special terms not
inconsistent with the provisions of the indentures, including any terms that may be required or advisable under United States
or other applicable laws or regulations, or advisable in connection with the marketing of the debt securities.
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Debt securities of any series may be issued as registered debt securities
or uncertificated debt securities, in such denominations as specified in the terms of the series.
Securities may be issued under the indentures as Discounted Debt
Securities to be offered and sold at a substantial discount from the principal amount thereof. Special United States federal income
tax and other considerations applicable thereto will be described in the prospectus supplement relating to such Discounted Debt
Securities. “
Discounted Debt Security
” means a security where the amount of principal due upon acceleration
is less than the stated principal amount.
We are not obligated to issue all debt securities of one series
at the same time and, unless otherwise provided in the prospectus supplement, we may reopen a series, without the consent of the
holders of the debt securities of that series, for the issuance of additional debt securities of that series. Additional debt securities
of a particular series will have the same terms and conditions as outstanding debt securities of such series, except for the date
of original issuance and the offering price, and will be consolidated with, and form a single series with, such outstanding debt
securities.
Ranking
The senior debt securities will rank equally with all of our other
senior and unsubordinated debt. Our secured debt, if any, will be effectively senior to the senior debt securities to the extent
of the value of the assets securing such debt. The subordinated debt securities will be subordinate and junior in right of payment
to all of our present and future senior indebtedness to the extent and in the manner described in the prospectus supplement and
as set forth in the board resolution, officer’s certificate or supplemental indenture relating to such offering.
We have only a stockholder’s claim on the assets of our subsidiaries.
This stockholder’s claim is junior to the claims that creditors of our subsidiaries have against our subsidiaries. Holders
of our debt securities will be our creditors and not creditors of any of our subsidiaries. As a result, all the existing and future
liabilities of our subsidiaries, including any claims of their creditors, will effectively be senior to the debt securities with
respect to the assets of our subsidiaries. In addition, to the extent that we issue any secured debt, the debt securities will
be effectively subordinated to such secured debt to the extent of the value of the assets securing such secured debt.
The debt securities will be obligations exclusively of Arch Therapeutics,
Inc. To the extent that our ability to service our debt, including the debt securities, may be dependent upon the earnings of our
subsidiaries, our ability to do so will be dependent on the ability of our subsidiaries to distribute those earnings to us as dividends,
loans or other payments.
Certain
Covenants
Any covenants that may apply to a particular series of debt securities
will be described in the prospectus supplement relating thereto.
Successor
Obligor
The indentures provide that, unless otherwise specified in the securities
resolution or supplemental indenture establishing a series of debt securities, we shall not consolidate with or merge into, or
transfer all or substantially all of our assets to, any person in any transaction in which we are not the survivor, unless:
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the person is organized under the laws of the United
States or a jurisdiction within the United States;
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the person assumes by supplemental indenture all of
our obligations under the relevant indenture, the debt securities and any coupons;
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immediately after the transaction no Default (as defined
below) exists; and
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we deliver to the trustee an officers’ certificate
and opinion of counsel stating that the transaction complies with the foregoing requirements.
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In such event, the successor will be substituted for us, and thereafter
all of our obligations under the relevant indenture, the debt securities and any coupons will terminate.
Exchange
of Debt Securities
Registered debt securities may be exchanged for an equal aggregate
principal amount of registered debt securities of the same series and date of maturity in such authorized denominations as may
be requested upon surrender of the registered debt securities at an agency of the Company maintained for such purpose and upon
fulfillment of all other requirements of such agent.
Default
and Remedies
Unless the securities resolution or supplemental indenture establishing
the series otherwise provides (in which event the prospectus supplement will so state), an “
Event of Default
”
with respect to a series of debt securities will occur if:
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we default in any payment of interest on any debt securities
of such series when the same becomes due and payable and the default continues for a period of 30 days;
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(2)
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we default in the payment of the principal and premium,
if any, of any debt securities of such series when the same becomes due and payable at maturity or upon redemption, acceleration
or otherwise and such default shall continue for five or more days;
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(3)
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we default in the performance of any of our other agreements
applicable to the series and the default continues for 30 days after the notice specified below;
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(4)
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a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law (as defined below) that:
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(A)
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is for relief against us in an involuntary case,
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(B)
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appoints a Custodian (as defined below) for us or for
all or substantially all of our property, or
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(C)
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orders the liquidation of us, and the order or decree
remains unstayed and in effect for 90 days;
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(5)
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we pursuant to or within the meaning of any Bankruptcy
Law:
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(A)
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commence a voluntary case,
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(B)
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consent to the entry of an order for relief against
us in an involuntary case,
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(C)
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consent to the appointment of a Custodian for us or
for all or substantially all of our property, or
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(D)
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make a general assignment for the benefit of our creditors;
or
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(6)
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there occurs any other Event of Default provided for
in such series.
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The term “
Bankruptcy Law
” means Title 11 of the
United States Code or any similar Federal or State law for the relief of debtors. The term “
Custodian
” means
any receiver, trustee, assignee, liquidator or a similar official under any Bankruptcy Law.
“
Default
” means any event which is, or after
notice or passage of time would be, an Event of Default. A Default under subparagraph (3) above is not an Event of Default until
the trustee or the holders of at least 25% in principal amount of the series notify us of the Default and we do not cure the Default
within the time specified after receipt of the notice.
The trustee may require indemnity satisfactory to it before it enforces
the indentures or the debt securities of the series. Subject to certain limitations, holders of a majority in principal amount
of the debt securities of the series may direct the trustee in its exercise of any trust or power with respect to such series.
Except in the case of Default in payment on a series, the trustee may withhold from securityholders of such series notice of any
continuing Default if the trustee determines that withholding notice is in the interest of such Securityholders. We are required
to furnish the trustee annually a brief certificate as to our compliance with all conditions and covenants under the indentures.
The indentures do not have cross-default provisions. Thus, a default
by us on any other debt, including any other series of debt securities, would not constitute an Event of Default.
Amendments
and Waivers
The indentures and the debt securities or any coupons of the series
may be amended, and any Default may be waived as follows:
Unless the securities resolution or supplemental indenture otherwise
provides (in which event the applicable prospectus supplement will so state), the debt securities and the indentures may be amended
with the consent of the holders of a majority in principal amount of the debt securities of all series affected voting as one class.
Unless the securities resolution or supplemental indenture otherwise provides (in which event the applicable prospectus supplement
will so state), a Default other than a Default in payment on a particular series may be waived with the consent of the holders
of a majority in principal amount of the debt securities of the series. However, without the consent of each securityholder affected,
no amendment or waiver may:
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change the fixed maturity of or the time for payment
of interest on any debt security;
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reduce the principal, premium or interest payable with
respect to any debt security;
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change the place of payment of a debt security or the
currency in which the principal or interest on a debt security is payable;
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change the provisions for calculating any redemption
or repurchase price with respect to any debt security;
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reduce the amount of debt securities whose holders must
consent to an amendment or waiver;
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make any change that materially adversely affects the
right to convert any debt security;
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waive any Default in payment of principal of or interest
on a debt security; or
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adversely affect any holder’s rights with respect
to redemption or repurchase of a debt security.
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Without the consent of any securityholder, the indentures or the
debt securities may be amended to:
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provide for assumption of our obligations to securityholders
in the event of a merger or consolidation requiring such assumption;
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to cure any ambiguity, omission, defect or inconsistency;
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to conform the terms of the debt securities to the description
thereof in the prospectus and prospectus supplement offering such debt securities;
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to create a series and establish its terms;
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to provide for assumption of our obligations to securityholders
in the event of a merger or consolidation requiring such assumption;
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to make any change that does not adversely affect the
rights of any securityholder;
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to add to our covenants; or
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to make any other change to the indentures so long as
no debt securities are outstanding.
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Conversion
Rights
Any securities resolution or supplemental indenture establishing
a series of debt securities may provide that the debt securities of such series will be convertible at the option of the holders
thereof into or for our common stock or other equity or debt instruments. The securities resolution or supplemental indenture may
establish, among other things, (1) the number or amount of shares of common stock or other equity or debt instruments for which
$1,000 aggregate principal amount of the debt securities of the series is convertible, as may be adjusted pursuant to the terms
of the relevant indenture and the securities resolution; and (2) provisions for adjustments to the conversion rate and limitations
upon exercise of the conversion right. The indentures provide that we will not be required to make an adjustment in the conversion
rate unless the adjustment would require a cumulative change of at least 1% in the conversion rate. However, we will carry forward
any adjustments that are less than 1% of the conversion rate and take them into account in any subsequent adjustment of the conversion
rate.
Legal
Defeasance and Covenant Defeasance
Debt securities of a series may be defeased in accordance with their
terms and, unless the securities resolution or supplemental indenture establishing the terms of the series otherwise provides,
as set forth below. We at any time may terminate as to a series all of our obligations (except for certain obligations, including
obligations with respect to the defeasance trust and obligations to register the transfer or exchange of a debt security, to replace
destroyed, lost or stolen debt securities and coupons and to maintain paying agencies in respect of the debt securities) with respect
to the debt securities of the series and any related coupons and the relevant indenture, which we refer to as legal defeasance.
We at any time may terminate as to a series our obligations with respect to any restrictive covenants which may be applicable to
a particular series, which we refer to as covenant defeasance.
We may exercise our legal defeasance option notwithstanding our
prior exercise of our covenant defeasance option. If we exercise our legal defeasance option, a series may not be accelerated because
of an Event of Default. If we exercise our covenant defeasance option, a series may not be accelerated by reference to any covenant
which may be applicable to a series.
To exercise either defeasance option as to a series, we must (1)
irrevocably deposit in trust with the trustee (or another trustee) money or U.S. Government Obligations (as defined below), deliver
a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal
and interest when due on the deposited U.S. Government Obligations, without reinvestment, plus any deposited money without investment
will provide cash at such times and in such amounts as will be sufficient to pay the principal and interest when due on all debt
securities of such series to maturity or redemption, as the case may be; and (2) comply with certain other conditions. In particular,
we must obtain an opinion of tax counsel that the defeasance will not result in recognition of any gain or loss to holders for
federal income tax purposes.
“
U.S. Government Obligations
” means direct obligations
of the United States or any agency or instrumentality of the United States, the payment of which is unconditionally guaranteed
by the United States, which, in either case, have the full faith and credit of the United States pledged for payment and which
are not callable at the issuer’s option, or certificates representing an ownership interest in such obligations.
Regarding
the Trustee
Unless otherwise indicated in a prospectus supplement, the trustee
will also act as depository of funds, transfer agent, paying agent and conversion agent, as applicable, with respect to the debt
securities. We may remove the trustee as the trustee under a given indenture with or without cause if we so notify the trustee
three months in advance and if no Default occurs during the three-month period. The indenture trustee may also provide additional
unrelated services to us as a depository of funds, registrar, trustee and similar services.
Governing
Law
The indentures and the debt securities will be governed by New York
law, except to the extent that the Trust Indenture Act of 1939 is applicable.
DESCRIPTION OF SUBSCRIPTION RIGHTS
We may issue subscription rights to purchase our common stock or
debt securities. These subscription rights may be offered independently or together with any other security offered hereby and
may or may not be transferable by the stockholder receiving the subscription rights in such offering. In connection with any offering
of subscription rights, we may enter into a standby arrangement with one or more underwriters or other purchasers pursuant to which
the underwriters or other purchasers may be required to purchase any securities remaining unsubscribed for after such offering.
The prospectus supplement relating to any subscription rights we
offer, if any, will, to the extent applicable, include specific terms relating to the offering, including some or all of the following:
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the price, if any, for the subscription rights;
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the exercise price payable for our common stock or debt
securities upon the exercise of the subscription rights;
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the number of subscription rights to be issued to each
stockholder;
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the number and terms of our common stock or debt securities
which may be purchased per each subscription right;
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the extent to which the subscription rights are transferable;
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any other terms of the subscription rights, including
the terms, procedures and limitations relating to the exchange and exercise of the subscription rights;
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the date on which the right to exercise the subscription
rights shall commence, and the date on which the subscription rights shall expire;
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the extent to which the subscription rights may include
an over-subscription privilege with respect to unsubscribed securities or an over-allotment privilege to the extent the securities
are fully subscribed; and
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if applicable, the material terms of any standby underwriting
or purchase arrangement which may be entered into by Arch in connection with the offering of subscription rights.
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DESCRIPTION OF UNITS
We may issue units comprised of one or more of the other classes
of securities described in this prospectus in any combination. Each unit will be issued so that the holder of the unit is also
the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of
each included security. The units may be issued under unit agreements to be entered into between us and a unit agent, as detailed
in the prospectus supplement relating to the units being offered. The prospectus supplement will describe:
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the designation and terms of the units and of the securities
comprising the units, including whether and under what circumstances those securities may be held or transferred separately;
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any provisions for the issuance, payment, settlement,
transfer or exchange of the units or of the securities comprising the units;
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the terms of the unit agreement governing the units;
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United States federal income tax considerations relevant
to the units; and
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whether the units will be issued in fully registered
global form.
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FORMS OF SECURITIES
Each debt security and, to the extent applicable, warrant, subscription
right and unit, will be represented either by a certificate issued in definitive form to a particular investor or by one or more
global securities representing the entire issuance of securities. Certificated securities in definitive form and global securities
will be issued in registered form. Definitive securities name you or your nominee as the owner of the security, and in order to
transfer or exchange these securities or to receive payments other than interest or other interim payments, you or your nominee
must physically deliver the securities to the trustee, registrar, paying agent or other agent, as applicable. Global securities
name a depositary or its nominee as the owner of the debt securities or warrants represented by these global securities. The depositary
maintains a computerized system that will reflect each investor’s beneficial ownership of the securities through an account
maintained by the investor with its broker/dealer, bank, trust company or other representative, as we explain more fully below.
Global
Securities
Registered Global Securities
. We may issue the registered
debt securities and, to the extent applicable, warrants, subscription rights and units in the form of one or more fully registered
global securities that will be deposited with a depositary or its nominee identified in the applicable prospectus supplement and
registered in the name of that depositary or nominee. In those cases, one or more registered global securities will be issued in
a denomination or aggregate denominations equal to the portion of the aggregate principal or face amount of the securities to be
represented by registered global securities. Unless and until it is exchanged in whole for securities in definitive registered
form, a registered global security may not be transferred except as a whole by and among the depositary for the registered global
security, the nominees of the depositary or any successors of the depositary or those nominees.
If not described below, any specific terms of the depositary arrangement
with respect to any securities to be represented by a registered global security will be described in the prospectus supplement
relating to those securities. We anticipate that the following provisions will apply to all depositary arrangements.
Ownership of beneficial interests in a registered global security
will be limited to persons, called participants, that have accounts with the depositary or persons that may hold interests through
participants. Upon the issuance of a registered global security, the depositary will credit, on its book-entry registration and
transfer system, the participants’ accounts with the respective principal or face amounts of the securities beneficially
owned by the participants. Any dealers, underwriters or agents participating in the distribution of the securities will designate
the accounts to be credited. Ownership of beneficial interests in a registered global security will be shown on, and the transfer
of ownership interests will be effected only through, records maintained by the depositary, with respect to interests of participants,
and on the records of participants, with respect to interests of persons holding through participants. The laws of some states
may require that some purchasers of securities take physical delivery of these securities in definitive form. These laws may impair
your ability to own, transfer or pledge beneficial interests in registered global securities.
So long as the depositary, or its nominee, is the registered owner
of a registered global security, that depositary or its nominee, as the case may be, will be considered the sole owner or holder
of the securities represented by the registered global security for all purposes under the applicable indenture or warrant agreement.
Except as described below, owners of beneficial interests in a registered global security will not be entitled to have the securities
represented by the registered global security registered in their names, will not receive or be entitled to receive physical delivery
of the securities in definitive form and will not be considered the owners or holders of the securities under the applicable indenture
or warrant agreement. Accordingly, each person owning a beneficial interest in a registered global security must rely on the procedures
of the depositary for that registered global security and, if that person is not a participant, on the procedures of the participant
through which the person owns its interest, to exercise any rights of a holder under the applicable indenture or warrant agreement.
We understand that under existing industry practices, if we request any action of holders or if an owner of a beneficial interest
in a registered global security desires to give or take any action that a holder is entitled to give or take under the applicable
indenture or warrant agreement, the depositary for the registered global security would authorize the participants holding the
relevant beneficial interests to give or take that action, and the participants would authorize beneficial owners owning through
them to give or take that action or would otherwise act upon the instructions of beneficial owners holding through them.
Principal, premium, if any, and interest payments on debt securities
and any payments to holders with respect to warrants represented by a registered global security registered in the name of a depositary
or its nominee will be made to the depositary or its nominee, as the case may be, as the registered owner of the registered global
security. None of Arch, the trustees, the warrant agents or any other agent of Arch, agent of the trustees or agent of the warrant
agents will have any responsibility or liability for any aspect of the records relating to payments made on account of beneficial
ownership interests in the registered global security or for maintaining, supervising or reviewing any records relating to those
beneficial ownership interests.
We expect that the depositary for any of the securities represented
by a registered global security, upon receipt of any payment of principal, premium, interest or other distribution of underlying
securities or other property to holders on that registered global security, will immediately credit participants’ accounts
in amounts proportionate to their respective beneficial interests in that registered global security as shown on the records of
the depositary. We also expect that payments by participants to owners of beneficial interests in a registered global security
held through participants will be governed by standing customer instructions and customary practices, as is now the case with the
securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility
of those participants.
If the depositary for any of these securities represented by a registered
global security is at any time unwilling or unable to continue as depositary or ceases to be a clearing agency registered under
the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), and a successor depositary registered
as a clearing agency under the Exchange Act is not appointed by us within 90 days, we will issue securities in definitive form
in exchange for the registered global security that had been held by the depositary. Any securities issued in definitive form in
exchange for a registered global security will be registered in the name or names that the depositary gives to the relevant trustee
or warrant agent or other relevant agent of ours or theirs. It is expected that the depositary’s instructions will be based
upon directions received by the depositary from participants with respect to ownership of beneficial interests in the registered
global security that had been held by the depositary.
PLAN OF DISTRIBUTION
We may sell the securities being offered hereby in the following
manner or any manner specified in a prospectus supplement:
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directly to purchasers;
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through underwriters; and
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The prospectus supplement will set forth the terms of the offering
of such securities, including:
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the name or names of any underwriters, dealers or agents
and the amounts of securities underwritten or purchased by each of them;
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the initial public offering price of the securities and
the proceeds to us and any discounts, commissions or concessions allowed or reallowed or paid to dealers; and
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any securities exchanges on which the securities may
be listed.
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We may directly solicit offers to purchase securities, or agents
may be designated to solicit such offers. We will, in the prospectus supplement relating to such offering, name any agent that
could be viewed as an underwriter under the Securities Act, and describe any commissions that we must pay. Any such agent will
be acting on a best efforts basis for the period of its appointment or, if indicated in the applicable prospectus supplement, on
a firm commitment basis. Agents, dealers and underwriters may be customers of, engage in transactions with, or perform services
for us in the ordinary course of business.
If any underwriters or agents are utilized in the sale of the securities
in respect of which this prospectus is delivered, we will enter into an underwriting agreement or other agreement with them at
the time of sale to them, and we will set forth in the prospectus supplement relating to such offering the names of the underwriters
or agents and the terms of the related agreement with them.
If a dealer is utilized in the sale of the securities in respect
of which the prospectus is delivered, we will sell such securities to the dealer, as principal. The dealer may then resell such
securities to the public at varying prices to be determined by such dealer at the time of resale.
Remarketing firms, agents, underwriters and dealers may be entitled
under agreements which they may enter into with us to indemnification by us against certain civil liabilities, including liabilities
under the Securities Act, and may be customers of, engage in transactions with or perform services for us in the ordinary course
of business.
In order to facilitate the offering of the securities, any underwriters
may engage in transactions that stabilize, maintain or otherwise affect the price of the securities or any other securities the
prices of which may be used to determine payments on such securities. Specifically, any underwriters may overallot in connection
with the offering, creating a short position for their own accounts. In addition, to cover overallotments or to stabilize the price
of the securities or of any such other securities, the underwriters may bid for, and purchase, the securities or any such other
securities in the open market. Any of these activities may stabilize or maintain the market price of the securities above independent
market levels. Any such underwriters are not required to engage in these activities and may end any of these activities at any
time.
Any underwriter, agent or dealer utilized in the initial offering
of any securities issued hereunder will not confirm sales to accounts over which it exercises discretionary authority without the
prior specific written approval of its customer.
LEGAL MATTERS
Unless otherwise indicated in the applicable prospectus supplement,
the validity of the securities offered hereby will be passed upon for us by McDonald Carano Wilson LLP, Reno, Nevada. If the validity
of the securities offered hereby in connection with offerings made pursuant to this prospectus are passed upon by counsel for the
underwriters, dealers or agents, if any, such counsel will be named in the prospectus supplement relating to such offering.
EXPERTS
Moody, Famiglietti & Andronico, LLP, an independent registered
public accounting firm, has audited our consolidated financial statements for the years ended September 30, 2015 and 2014, as stated
in its report appearing herein, and such audited consolidated financial statements have been so included in reliance upon the report
of such firm given upon its authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read or obtain a copy of these reports at the SEC’s public reference room at
100 F Street, N.E., Washington, D.C. 20549, on official business days during the hours of 10:00 am to 3:00 pm. You may obtain
information on the operation of the public reference room and its copy charges by calling the SEC at 1-800-SEC-0330. The SEC maintains
a website, at http://www.sec.gov, that contains registration statements, reports, proxy information statements and other information
regarding registrants that file electronically with the SEC, including us. Our website address is
http://www.archtherapeutics.com
.
We have not incorporated by reference into this prospectus the information on our website, and you should not consider it to be
a part of this document.
The SEC allows us to “incorporate by reference” information
that we file with it into this prospectus, which means that we can disclose important information to you by referring you to those
documents. The information incorporated by reference is an important part of this prospectus. The information incorporated by reference
is considered to be a part of this prospectus, and information that we file later with the SEC will automatically update and supersede
information contained in this prospectus and any accompanying prospectus supplement.
We incorporate by reference the documents listed below that we have
previously filed with the SEC, each of which has Exchange Act File No. 000-54986 unless otherwise noted:
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our Annual Report on Form 10-K for the fiscal year ended
September 30, 2015, filed with the SEC on December 11, 2015;
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our Quarterly Reports on Form 10-Q for the quarters ended
December 31, 2015, March 30, 2016, and June 30, 2016, which were filed with the SEC on February 12, 2016, April 28, 2016 and July
28, 2016, respectively;
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our Current Reports on Form 8-K filed with the SEC on
December 01, 2015, December 03, 2015, December 16, 2015, March 07, 2016, March 09, 2016, March 14, 2016, March 22, 2016, April
05, 2016, April 11, 2016, April 25, 2016, May 06, 2016, May 10, 2016, May 16, 2016, June 02, 2016, June 06, 2016, August 15, 2016
and September 29, 2016; and
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the description of our common stock as set forth under
the caption “Description of Securities” in our Registration Statement on Form S-1/A (File No. 333-178883), as amended
and filed with the SEC on February 24, 2012, including any amendments thereto or reports filed for the purposes of updating this
description (including our Current Report on Form 8-K filed with the SEC on June 26, 2013 (File No. 333-178883)).
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All reports and other documents that we file with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus but before the termination of the offering
of the securities hereunder will also be considered to be incorporated by reference into this prospectus from the date of the filing
of these reports and documents, and will supersede the information herein;
provided, however
, that all reports, exhibits
and other information that we “furnish” to the SEC will not be considered incorporated by reference into this prospectus.
Any statement contained in a document incorporated by reference in this prospectus or any prospectus supplement shall be deemed
to be modified or superseded to the extent that a statement contained herein, therein or in any other subsequently filed document
that also is incorporated by reference herein or therein modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus or any prospectus supplement.
We will provide you without charge, upon your oral or written request,
with a copy of any or all reports, proxy statements and other documents we file with the SEC, as well as any or all of the documents
incorporated by reference in this prospectus or the registration statement (other than exhibits to such documents unless such exhibits
are specifically incorporated by reference into such documents). Requests for such copies should be directed to:
Arch Therapeutics, Inc.
235 Walnut St., Suite 6
Framingham, MA 01702
(617) 431-2313
Up
to 9,070,000 Shares of Common Stock
Warrants
to Purchase up to 6,802,500 Shares of Common Stock
PROSPECTUS SUPPLEMENT
The date of this prospectus
supplement is June 29, 2018
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