Filed Pursuant to Rule 424(b)(3)
Registration No. 333-234811
PROSPECTUS SUPPLEMENT NO. 3 DATED APRIL
27, 2020
TO
PROSPECTUS DATED
DECEMBER 6, 2019
(AS SUPPLEMENTED)
ARCH THERAPEUTICS, INC.
PROSPECTUS
Up to 36,366,691 Shares of Common Stock
Underlying Warrants Previously Issued
This Prospectus Supplement No. 3 supplements
the prospectus of Arch Therapeutics, Inc. (the “Company”, “we”, “us”,
or “our”) dated December 6, 2019 (as supplemented to date, the “Prospectus”)
with the following attached document which we filed with the Securities and Exchange Commission on April 27, 2020:
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A.
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Our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 27, 2020.
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This Prospectus Supplement No. 3 should be read in conjunction
with the Prospectus, which is required to be delivered with this Prospectus Supplement. This
prospectus supplement updates, amends and supplements the information included in the Prospectus. If there is any inconsistency
between the information in the Prospectus and this prospectus supplement, you should rely on the information in this Prospectus
Supplement.
This Prospectus
Supplement is not complete without, and may not be delivered or utilized except in connection with, the Prospectus, including any
amendments or supplements to it.
Investing in our common stock involves a high degree of risk.
Before making any investment in our common stock, you should carefully consider the risk factors for our common stock, which are
described in the Prospectus, as amended or supplemented.
You should rely only on the information contained in the
Prospectus, as supplemented or amended by this Prospectus Supplement No. 3 and any other prospectus supplement or amendment thereto.
We have not authorized anyone to provide you with different information.
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 Supplement No.
3 is April 27, 2020
INDEX TO FILINGS
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Annex
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The Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 27, 2020
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A
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ANNEX A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 OR 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 25, 2020
ARCH THERAPEUTICS, INC.
(Exact name of registrant as specified in
its charter)
Nevada
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000-54986
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46-0524102
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(State or other jurisdiction
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(Commission
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(I.R.S. Employer
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of incorporation)
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File Number)
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Identification No.)
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235 Walnut Street, Suite 6
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Framingham, Massachusetts
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01702
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including
area code: (617) 431-2313
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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N|A
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N|A
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N|A
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
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Item 1.01
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Entry into a Material Definitive Agreement.
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PPP Loan
On April 25, 2020, the Company executed a promissory note (the
“PPP Note”) evidencing an unsecured loan in the amount of $176,300 under the Paycheck Protection Program (the
“PPP Loan”). The Paycheck Protection Program (or “PPP”) was established under the Coronavirus
Aid, Relief, and Economic Security Act (the “CARES Act”) and is administered by the U.S. Small Business Administration
(“SBA”). The Loan is being made through First Republic Bank (the “Lender”).
The PPP Loan has a two-year term and bears interest at a rate
of 1.00% per annum. Monthly principal and interest payments are deferred for six months. Beginning seven months from the date of
the PPP Note, the Company is required to make monthly payments of principal and interest to the Lender of approximately $10,000.
The PPP Loan may be prepaid at any time prior to maturity with no prepayment penalties. The PPP Note matures on April 25, 2022.
The PPP Note contains customary events of default relating to,
among other things, payment defaults, making materially false and misleading representations to the SBA or Lender, or breaching
the terms of the PPP Loan documents. The occurrence of an event of default may result in the immediate repayment of all amounts
outstanding, collection of all amounts owing from the Company, or filing suit and obtaining judgment.
Under the terms of the CARES Act, PPP loan recipients can apply
for and be granted forgiveness for all or a portion of loan granted under the PPP. Such forgiveness will be determined, subject
to limitations, based on the use of loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and
utilities. However, no assurance is provided that forgiveness for any portion of the PPP Loan will be obtained.
The foregoing description of the PPP Note does not purport to
be complete and is qualified in its entirety by reference to the copy of the PPP Note attached herewith as Exhibits 10.1
to this Current Report on Form 8-K, which is incorporated herein by reference.
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Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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Reference is made to the disclosure set forth in Item 1.01
of this Current Report on Form 8-K with respect to the PPP Loan, which disclosure is incorporated by reference into this Item
2.03.
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Item 9.01
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Financial Statements and Exhibits
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(d) The following exhibits are being filed
herewith:
Exhibit
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Description
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10.1
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PPP Note
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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ARCH THERAPEUTICS, INC.
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Dated: April 27, 2020
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By:
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/s/ Terrence W. Norchi, M.D.
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Name: Terrence W. Norchi, M.D.
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Title: President, Chief Executive Officer
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Exhibit 10.1
U.S. SMALL BUSINESS
ADMINISTRATION PAYCHECK PROTECTION PROGRAM NOTE
SBA Loan #:
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9056777100
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SBA Loan Name:
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Paycheck Protection Program Loan
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Loan Date:
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4/25/2020
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Loan Amount:
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$176,300.00
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Interest Rate:
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1.00% fixed
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Borrower:
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ARCH THERAPEUTICS, INC
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Lender:
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First Republic Bank
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This Note represents the
Loan (as defined below) made by Lender pursuant to the Paycheck Protection Program (the “PPP”). Borrower confirms
and agrees that the Loan is subject in all respects to the Coronavirus Aid, Relief, and Economic Security Act and the requirements,
rules, regulations, procedures and guidance concerning the PPP in effect as of the date of this Note and as may be promulgated
from time to time after the date of this Note by the U.S. Department of Treasury and/or SBA (collectively, the “PPP Regulations”),
including, without limitation, all PPP Regulations applicable to permitted uses of loan proceeds and loan forgiveness.
In return for the Loan, Borrower promises to pay to
the order of Lender the amount of $176,300.00
Dollars, interest on the unpaid principal balance, and
all other amounts required by this Note.
“Loan” means the loan evidenced by
this Note.
“Loan Documents”
means the documents related to this Loan signed by Borrower, including the Borrower Application Form for the Paycheck Protection
Program, the Borrower Certificate executed and delivered by Borrower in connection with this Note and all other attestations, certificates,
agreements and documents delivered by Borrower to Lender in connection with the Loan.
“SBA” means
the Small Business Administration, an Agency of the United States of America.
Borrower must make all payments at the place Lender
designates. The payment terms for this Note are:
Initial Deferment Period: No payments are
due on this Loan for 6 months from the date of first disbursement of this Loan. Interest will continue to accrue during the deferment
period.
Loan Forgiveness:
Borrower may apply to Lender for forgiveness of the amount due on this Loan in an amount equal to the sum of the following costs
incurred by Borrower during the 8-week period beginning on the date of first disbursement of this Loan:
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b.
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Any payment of interest on a covered mortgage obligation (which shall not include any prepayment
of or payment of principal on a covered mortgage obligation)
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c.
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Any payment on a covered rent obligation
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d.
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Any covered utility payment
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The amount of Loan forgiveness
shall be calculated (and may be reduced) in accordance with the requirements of the PPP, including the provisions of Section 1106
of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (P.L. 116-136). Not more than 25% of the amount forgiven
can be attributable to non-payroll costs. If Borrower has received an EIDL advance, then that amount shall be subtracted from the
loan forgiveness amount.
Maturity: This Note
will mature on the date that is two years from date of first disbursement of this Loan.
Repayment
Terms:
Interest Rate: The
interest rate on this Note is one percent per year. The interest rate is fixed and will not be changed during the life of the Loan.
Installment Payments
Following Deferment Period: Borrower must pay monthly principal and interest payments on the outstanding principal balance
of the Loan amortized over the term of the Loan, unless otherwise forgiven in whole or part in accordance with the PPP Regulations,
beginning 7 months from the date of the first disbursement of this Loan until the maturity date. Payments of principal and interest
must be made on such date as designated by Lender in the months during which they are due. Any Loan balance remaining following
forgiveness pursuant to the PPP Regulations, if any, will be fully reamortized over the remaining term of the Loan.
Application of Installment
Payments: Lender will apply each installment payment first to pay interest accrued to the day Lender received the payment,
then to bring principal current, and will apply any remaining balance to reduce principal.
Payment at Maturity.
All remaining principal and accrued interest is due and payable two years from the date of first disbursement of this Loan.
Loan Prepayment: Notwithstanding
any provision in this Note to the contrary:
Borrower may prepay this
Note at any time without penalty. Borrower may prepay 20 percent or less of the unpaid principal balance at any time without
notice. If Borrower prepays more than 20 percent and the Loan has been sold on the secondary market, Borrower must:
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a.
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Give Lender written notice;
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b.
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Pay all accrued interest; and
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c.
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If the prepayment is received less than 21 days from the date Lender receives
the notice, pay an amount equal to 21 days interest from the date Lender receives the notice, less any interest accrued during
the 21 days and paid under b. of this paragraph.
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If Borrower does not prepay within 30 days from
the date Lender receives the notice, Borrower must give Lender a new notice.
Non-Recourse: Lender
and SBA shall have no recourse against any individual shareholder, member or partner of Borrower for non-payment of the Loan, except
to the extent that such shareholder, member or partner uses the Loan proceeds for an unauthorized purpose.
Borrower is in default under this Note if Borrower
does not make a payment when due under this Note, or if Borrower:
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A.
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Fails to do anything required by this Note and other
Loan Documents;
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B.
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Defaults on any other loan with Lender;
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C.
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Does not disclose, or anyone acting on its behalf
does not disclose, any material fact to Lender or SBA;
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D.
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Makes, or anyone acting on its behalf makes, (i) a
materially false or misleading representation to Lender or SBA or (ii) a false or incorrect statement or certification in any
certificate, attestation or agreement included in any Loan Documents;
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E.
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Defaults on any loan or agreement with another creditor,
if Lender believes the default may materially affect Borrower’s ability to pay this Note;
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F.
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Fails to pay any taxes when due;
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G.
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Becomes the subject of a proceeding under any bankruptcy
or insolvency law;
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H.
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Has a receiver or liquidator appointed for any part
of their business or property;
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I.
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Makes an assignment for the benefit of creditors;
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J.
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Has any adverse change in financial condition or business
operation that Lender believes may materially affect Borrower’s ability to pay this Note;
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K.
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Reorganizes, merges, consolidates, or otherwise changes
ownership or business structure without Lender’s prior written consent; or
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L.
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Becomes the subject of a civil or criminal action
that Lender believes may materially affect Borrower’s ability to pay this Note.
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5.
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LENDER’S RIGHTS IF THERE IS A DEFAULT
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Without notice or demand and without giving up any of
its rights, Lender may:
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A.
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Require immediate payment of all amounts owing under
this Note;
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B.
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Collect all amounts owing from Borrower; or
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C.
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File suit and obtain judgment.
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6.
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LENDER’S GENERAL POWERS
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Without notice and without Borrower’s
consent, Lender may:
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A.
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Incur expenses to collect amounts due under this Note, enforce the terms
of this Note or any other Loan Document. Among other things, the expenses may include payments for property taxes, prior liens,
insurance, appraisals, environmental remediation costs, and reasonable attorney’s fees and costs. If Lender incurs such expenses,
it may demand immediate repayment from Borrower or add the expenses to the principal balance; and
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B.
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Release anyone obligated to pay this Note.
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7.
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WHEN FEDERAL LAW APPLIES; GOVERNING LAW AND VENUE
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When SBA is the holder, this
Note will be interpreted and enforced under federal law, including SBA regulations. As to this Note, Borrower may not claim or
assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law.
When the SBA is not the holder,
this Note will be interpreted and enforced under the laws of the State of California. All judicial proceedings arising in or under
or related to the Loan, this Note or any of the other Loan Documents may be brought in any state or federal court located in a
state where Lender has an office (each, a “Lender’s State”). By execution and delivery of this Note, Borrower
generally and unconditionally:
(a) consents to nonexclusive
personal jurisdiction in each Lender’s State; (b) waives any objection as to jurisdiction or venue in each Lender’s
State; (c) agrees not to assert any defense based on lack of jurisdiction or venue in the aforesaid courts; and (d) irrevocably
agrees to be bound by any judgment rendered thereby in connection with the Loan, this Loan or the other Loan Documents.
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8.
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SUCCESSORS AND ASSIGNS
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Under this Note, Borrower includes
its successors, and Lender includes its successors and assigns.
Lender may at any time assign
to one or more assignees all or a portion of its rights and obligations under this Note.
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9.
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OTHER AGREEMENTS AND GENERAL PROVISIONS
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A.
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Borrower understands and agrees, and waives and releases Lender, as follows:
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a.
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Forgiveness of the Loan is only available for principal
that is used for the limited purposes that qualify for forgiveness under the PPP Regulations, and that to obtain forgiveness,
Borrower must request it and must provide documentation in accordance with the PPP Regulations, and certify that the amounts Borrower
is requesting to be forgiven qualify under the PPP Regulations. Borrower also understands that Borrower shall remain responsible
under the Loan for any amounts not forgiven, and that interest payable under the Loan will not be forgiven but that the SBA may
pay the Loan interest on forgiven amounts.
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b.
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Forgiveness is not automatic and Borrower must request
it. Borrower is not relying on Lender for its understanding of the requirements for forgiveness such as eligible expenditures, necessary records/documentation,
or possible reductions due to changes in number of employees or compensation. Rather Borrower will consult the PPP Regulations
and SBA’s program materials.
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B.
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All individuals and entities signing this Note are
jointly and severally liable.
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C.
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Borrower waives all suretyship defenses.
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D.
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Borrower must sign all documents necessary at any
time to comply with the Loan Documents.
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E.
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Lender may exercise any of its rights separately or
together, as many times and in any order it chooses. Lender may delay or forgo enforcing any of its rights without giving up any
of them.
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F.
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Borrower may not use an oral statement of Lender or
SBA to contradict or alter the written terms of this Note.
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G.
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If any part of this Note is unenforceable, all other
parts remain in effect.
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H.
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To the extent allowed by law, Borrower waives all
demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor. Borrower also
waives any defenses based upon any claim that Lender did not obtain any guarantee.
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The Loan and this Note are
subject in all respects to the PPP Regulations, including any PPP Regulations promulgated after the date of this Note. If after
the date of this Note, any further PPP Regulations are promulgated or if the PPP Regulations mandate a form of or the terms of
the note, loan authorization or other loan documents for PPP loans, Borrower agrees to execute any further instruments and documents
and to take such further actions as Lender requests, including exchanging this Note for new note, executing an amendment to this
Note, or executing any other loan documents that Lender requests. In the event of any exchange of or amendment to this Note, the
disbursement date applicable to the Loan (and all related time periods under the PPP Regulations and the maturity date applicable
to this Loan) shall be the same as set forth in this Note.
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11.
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BORROWER’S NAME AND SIGNATURE
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By signing below, each individual or entity executing
this Note as “Borrower” becomes obligated under this Note as Borrower.
BORROWER:
ARCH THERAPEUTICS, INC
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By:
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/s/ Richard E Davis
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RICHARD E DAVIS
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CHIEF FINANCIAL OFFICER
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4/25/2020
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Date
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