Arch Therapeutics Inc (ARTH)

[TomP1]

New cash raised

$3.0 Million in Net Proceeds Expected

FRAMINGHAM, MA -- (Marketwired) -- 07/01/15 -- Arch Therapeutics, Inc. (OTCQB: ARTH) ("Arch" or the "Company"), developer of the AC5 Surgical Hemostatic Device™ ("AC5™"), is pleased to announce that it raised $3,066,000 in equity financing in a private placement to 19 accredited investors (the "Investors") on June 30, 2015 (the "Initial Closing"), and anticipates raising up to an additional $100,000 before concluding the private placement (the "2015 Private Placement Financing"). At the Initial Closing, the Company sold and the Investors purchased 13,936,367 Units at a purchase price of $0.22 per Unit. Each Unit consisted of a share of the Company's common stock, par value $0.001 per share ("Common Stock"), and a Series D Warrant to purchase a share of Common Stock at an exercise price of $0.25 per share at any time prior to the fifth anniversary of the issuance date of the Series D Warrant. Upon raising the final $100,000 in expected financing, a total of 14,390,913 Units will have been issued in connection with the 2015 Private Placement Financing, and the number of outstanding shares of Common Stock will increase from 78,081,487 to 92,472,400.

The 2015 Private Placement Financing is expected to provide at least $3.0 million of net proceeds to the Company, after expenses. Arch intends to use the proceeds from the 2015 Private Placement Financing to advance its hemostasis development program, predominantly by focusing on clinical trial expenses and further development of AC5™, and for general corporate purposes.

Dr. Terrence Norchi, President and CEO of Arch Therapeutics, Inc., said, "This is a pivotal year for Arch. We look forward to advancing our products in development, including starting and completing the first human trial with AC5. The proceeds from this transaction are an important contributor to our march toward product commercialization. We are grateful to our current and new investors for their support.