Arch Therapeutics Announces $6.9 Million Private Placement

Rhea-AI Summary

Arch Therapeutics, Inc. (OTCQB: ARTH) announced a private placement to raise approximately $6.9 million by issuing 43,125,002 shares of common stock and warrants for 32,343,751 shares. Each unit will be sold at $0.16 per share, with warrants having an exercise price of $0.17. The offering is expected to close on or about February 17, 2021. Proceeds will be used for general corporate purposes, including capital expenditures. H.C. Wainwright & Co. is the exclusive placement agent for this transaction.

Positive

• Successful raising of approximately $6.9 million through private placement.
• Issuance of warrants to purchase up to 32,343,751 shares which may enhance liquidity.

Negative

• Issuing a substantial number of shares could lead to potential shareholder dilution.
• Reliance on private placement funding may indicate financial instability or limited access to traditional financing.

FRAMINGHAM, Mass., Feb. 12, 2021 (GLOBE NEWSWIRE) -- Arch Therapeutics, Inc. (OTCQB: ARTH) (“Arch” or the “Company”), developer of novel self-assembling wound care and biosurgical devices, today announced that it has entered into securities purchase agreements with certain institutional and accredited investors to raise approximately $6.9 million through the issuance of an aggregate 43,125,002 shares of its common stock and warrants to purchase up to an aggregate of 32,343,751 shares of common stock, at a combined purchase price of $0.16 per share of common stock and associated warrant in a private placement. The closing of the private placement is expected to occur on or about February 17, 2021, subject to the satisfaction of customary closing conditions.

H.C. Wainwright & Co. is acting as exclusive placement agent for the offering.

The warrants have an exercise price of $0.17 per share, are exercisable immediately and have a term of 5.5 years.

The Company currently intends to use the net proceeds from the offering for general corporate purposes, including working capital and capital expenditures.

The securities described above were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Act”) and Regulation D promulgated thereunder and in a transaction not involving a public offering and have not been registered under the Act or applicable state securities laws. Accordingly, the securities may not be reoffered or resold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state.

About Arch Therapeutics, Inc.
Arch Therapeutics, Inc. is a biotechnology company 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. Arch's products authorized for commercial marketing are AC5^® Advanced Wound System and AC5^® Topical Hemostat.¹ Arch's development stage product candidates include AC5-G™, AC5-V^® and AC5^® Surgical Hemostat, among others.^2,3

^{___________
1} AC5 Advanced Wound System and AC5 Topical Hemostat have received regulatory authorization for commercial marketing as medical devices in the USA and EU, respectively.
² AC5-G, AC5-V, and AC5 Surgical Hemostat are currently investigational devices limited by law to investigational use.
³ AC5, AC5-G, AC5-V and associated logos are trademarks and/or registered trademarks of Arch Therapeutics, Inc. and/or its subsidiaries.

Notice Regarding Forward-Looking Statements
This news release contains “forward-looking statements” as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this press release that are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, the proposed offering, including as to the completion of the private placement described above, the satisfaction of customary closing conditions related to the private placement and the intended use of net proceeds from the private placement, references to novel technologies and methods, our business and product development plans and projections, or market information. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with developing new products or technologies and operating as a development stage company, our ability to retain important members of our management team and attract other qualified personnel, our ability to raise the additional funding we will need to continue to pursue our business and product development plans, our ability to obtain required regulatory approvals, our ability to produce commercial quantities of our products within projected timeframes, our ability to develop and commercialize products based on our technology platform, and market conditions, and our ability to establish additional commercialization partnerships and build a critical mass of field sales representatives. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in the reports and other documents we file with the SEC, available at www.sec.gov.

Contact:
ARTH Investor Relations
Toll Free: +1-855-340-ARTH (2784) (US and Canada)
Email: investors@archtherapeutics.com
Website: www.archtherapeutics.com

or

Richard Davis
Chief Financial Officer
Arch Therapeutics, Inc.
Phone: 617-431-2308
Email: rdavis@archtherapeutics.com
Website: www.archtherapeutics.com

FAQ

What is the purpose of Arch Therapeutics' recent private placement?

The purpose of the private placement is to raise funds for general corporate purposes, including working capital and capital expenditures.

How much money is Arch Therapeutics raising through the securities purchase agreements?

Arch Therapeutics is raising approximately $6.9 million through the issuance of common stock and warrants.

What is the exercise price of the warrants issued by Arch Therapeutics?

The exercise price of the warrants is $0.17 per share.

When is the expected closing date for Arch Therapeutics' private placement?

The expected closing date for the private placement is on or about February 17, 2021.

Who is acting as the placement agent for Arch Therapeutics' offering?

H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.