Arch Therapeutics Announces $2.85 Million Private Placement

Arch Therapeutics Announces $2.85 Million Private Placement 
WELLESLEY, MA -- (Marketwired) -- 01/31/14 --  Arch Therapeutics,
Inc. (OTCQB: ARTH) ("Arch" or the "Company"), a life sciences company
and developer of the AC5 Surgical Hemostatic Device(TM), a novel
product aimed at controlling bleeding and fluid loss in order to
provide faster and safer surgical and interventional care, is pleased
to announce today its private placement to institutional and high net
worth investors of an aggregate of 11,400,000 shares of common stock
at $0.25 per share, pursuant to the terms of a securities purchase
agreement dated January 30, 2014. The private placement is expected
to close on or about February 4, 2014, subject to customary closing
conditions. 
Upon the closing of the private placement, Arch will also issue to
the investors Series A Warrants to purchase up to an aggregate of
11,400,000 shares of common stock, which will have an exercise price
of $0.30 per share and a term of exercise equal to five years after
their issuance date; Series B Warrants to purchase up to an aggregate
of 11,400,000 shares of common stock, which will have an exercise
price of $0.35 per share and a term of exercise equal to the shorter
of 12 months after their issuance date and six months after the
effective date of a registration statement registering such shares
for resale under the Securities Act of 1933; and Series C Warrants to
purchase up to an aggregate of 11,400,000 shares of common stock,
which will have an exercise price of $0.40 per share and a term of
exercise equal to the shorter of 18 months after their issuance date
and nine months after the effective date of a registration statement
registering such shares for resale under the Securities Act of 1933.  
Arch has agreed to file one or more registration statements within 45
days after the closing of the private placement with the Securities
and Exchange Commission to register for resale under the Securities
Act of 1933 the shares of common stock to be issued at the closing
and the shares of common stock issuable upon exercise of the Series A
Warrants, Series B Warrants and Series C Warrants.  
The gross proceeds of the offering are expected to be approximately
$2.85 million, and the net proceeds, after deducting estimated
offering expenses payable by Arch, are expected to be approximately
$2.77 million. The Company did not engage a placement agent in
connection with the private placement. Arch intends to use the
offering proceeds to advance its hemostasis development program,
predominantly focusing on AC5 Surgical Hemostatic Device(TM), and for
general corporate purposes. 
The foregoing descriptions of the transaction and the transaction
documents are not complete and are subject to, and qualified in their
entirety by, reference to the transaction documents, all of which are
filed as exhibits to, and more fully described in, a Current Report
on Form 8-K being filed with the Securities and Exchange Commission
currently herewith. 
The securities to be issued and sold in the private offering are
being offered and sold to accredited investors in compliance with
Regulation D promulgated under the Securities Act of 1933. The
securities have not been registered under the Securities Act of 1933
or the securities laws of any other jurisdiction and may not be
offered or sold in the United States absent registration or an
applicable exemption from such registration requirements.  
This press release is not and shall not constitute an offer to sell
or a solicitation of an offer to buy any of the securities described,
and shall not constitute an offer, solicitation, or sale in any
jurisdiction in which such offer, solicitation, or sale is unlawful.  
About Arch Therapeutics, Inc. (OTCQB: ARTH)
 Arch Therapeutics, Inc.
is a medical device company developing a novel approach to stop
bleeding (hemostasis) and control leaking (sealant) during surgery
and trauma care. Arch is developing products based on an innovative
self-assembling peptide technology platform to make surgery and
interventional care faster and safer for patients. Arch's flagship
development stage product candidate, known as AC5 Surgical Hemostatic
Device(TM), is being designed to achieve hemostasis in minimally
invasive and open surgical procedures. Find out more at
www.archtherapeutics.com. 
Notice Regarding Forward-Looking Statements
 This news release
contains "forward-looking statements" as that term is defined in
Section 27(a) of the Securities Act of 1933 and Section 21(e) of the
Securities Exchange Act of 1934. 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 others, statements regarding the completion and timing
of the private offering, the Company's planned use of any proceeds
received from the private offering, references to novel technologies
and methods, the Company's 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, market and other general
economic conditions, the Company's and the investors' ability to
satisfy the conditions required to close the private offering, the
inherent uncertainties associated with developing new products or
technologies and operating as a development stage company, our
ability to raise the additional funding we will need to continue to
pursue our business and product development plans, our ability to
develop and commercialize products based on our technology platform,
and market conditions. These forward-looking statements are made as
of the date of this news release, and the Company assumes 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 the Company believes that any
forward-looking statements contained in this press release are based
on reasonable beliefs and assumptions, any such beliefs or
assumptions may prove to be inaccurate. Investors should consult all
of the information set forth herein and should also refer to the risk
factors and other disclosures contained in the reports and other
documents we file with the Securities and Exchange Commission,
available at www.sec.gov. 
On Behalf of the Board,
 Terrence W. Norchi, M.D.
 Arch Therapeutics,
Inc. 
Contact:
ARTH Investor Relations
Toll Free: +1-855-340-ARTH (2784) (US and Canada)
Email: investors@archtherapeutics.com 
Website: www.archtherapeutics.com