Exhibit
10.2


  


EXECUTION
COPY


 


THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND, ACCORDINGLY, MAY NOT BE TRANSFERRED UNLESS
(I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES MAY
BE SOLD PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER
MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


 


PURSUANT TO THE TERMS
OF SECTION 1 OF THIS WARRANT, ALL OR A PORTION OF THIS WARRANT MAY HAVE BEEN EXERCISED, AND THEREFORE THE ACTUAL NUMBER OF WARRANT
SHARES REPRESENTED BY THIS WARRANT MAY BE LESS THAN THE AMOUNT SET FORTH ON THE FACE HEREOF.


 


ARCH
THERaPEUTICS, INC.


 


Series
E Warrant To Purchase Common Stock


 


Warrant No.: E-               


Number of Shares of Common Stock:                


Date of Issuance: May 26, 2016 (“Issuance
Date”)


 


Arch Therapeutics, Inc.,
a Nevada corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, [INVESTOR NAME], the registered
holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company, at the Exercise Price (as defined below) then in effect, upon surrender of this Warrant to Purchase
Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”),
at any time or times on or after the Issuance Date (the “Exercisability Date”), but not after 5:00 p.m., New
York time, on the Expiration Date (as defined below), [______________ (_____________)]
fully paid nonassessable shares of Common Stock (as defined below) (the “Warrant Shares”). Except as
otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 15. This Warrant
(this “Warrant”) is one of a series of Series E Warrants to purchase Common Stock (the “Warrants”)
issued pursuant to the Subscription Agreements (each a “Subscription Agreement”), entered into on or prior to
May 26, 2016 (the “Closing Date”), by the Company and each Purchaser party thereto.


 




     


     


    

 


1.    EXERCISE
OF WARRANT.


 


(a)  Mechanics
of Exercise. Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder on any day on or after
the Exercisability Date, in whole or in part (but not as to fractional shares), if an exemption from registration under the Securities
Act of 1933, as amended (the “Securities Act”) is available for the disposition of the Warrant and the acquisition
of the Warrant Shares by the Holder by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise
Notice”), of the Holder’s election to exercise this Warrant; and (ii) in the event that (A) a registration statement
covering the Warrant Shares that are the subject of the Exercise Notice is available and effective; and (B) the Holder is requesting
certificates without a legend regarding restrictions on transferability, delivery of a “Certificate of Subsequent
Sale”, substantially in the form attached hereto as Exhibit B (as such form may be amended and/or supplemented
by the Company and the Transfer Agent (as defined below))(the items under (i) and, as applicable, (ii) above, the “Exercise
Delivery Documents”). Within one (1) Trading Day following an exercise of this Warrant as aforesaid, the Holder shall
deliver payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as
to which this Warrant is being exercised (the “Aggregate Exercise Price”) in cash or wire transfer of immediately
available funds (a “Cash Exercise”) unless the Holder is electing a Cashless Exercise (as defined below) pursuant
to Section 1(c) of this Warrant. The Holder shall not be required to surrender this Warrant in order to effect an exercise
hereunder; provided, however, that in the event that this Warrant is exercised in full or for the remaining unexercised
portion hereof, the Holder shall deliver this Warrant to the Company for cancellation within a reasonable time after such exercise.
On or before the first Trading Day following the date on which the Company has received the Exercise Delivery Documents (the date
upon which the Company has received all of the Exercise Delivery Documents, the “Exercise Date”), the Company
shall transmit by facsimile or e-mail transmission an acknowledgment of confirmation of receipt of the Exercise Delivery Documents
to the Holder and the Company’s transfer agent for the Common Stock (the “Transfer Agent”). The Company
shall deliver any objection to the Exercise Delivery Documents on or before the second Trading Day following the date on which
the Company has received all of the Exercise Delivery Documents (the “Share Delivery Date”). Unless the Company
has previously delivered an objection to the Exercise Delivery Documents or the Holder has not delivered the applicable Aggregate
Exercise Price in the case of a Cash Exercise, in each case on or before the Share Delivery Date, the Company shall, (X) provided
that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities
Transfer Program (the “FAST Program”) and so long as the certificates therefor are not required to bear a legend
regarding restrictions on transferability, upon the request of the Holder, credit such aggregate number of shares of Common Stock
to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC
through its Deposit/Withdrawal at Custodian service; or (Y), if the Transfer Agent is not participating in the FAST Program or
if the certificates are required to bear a legend regarding restriction on transferability, issue and dispatch by overnight courier
to the address as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name
of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise.
Upon delivery of the Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes to have become the holder
of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares
are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares, as the
case may be. If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of
Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon
an exercise, then the Company shall as soon as practicable and in no event later than three (3) Trading Days after any such submission
and at its own expense, issue a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number
of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect
to which this Warrant has been and/or is exercised. The Company shall pay any and all taxes and other expenses (including overnight
delivery charges) that may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant;
provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer
involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder or an affiliate
thereof. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this
Warrant or receiving Warrant Shares upon exercise hereof.


 




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(b)  Exercise
Price. For purposes of this Warrant, “Exercise Price” means $0.4380, subject to adjustment as provided herein.


 


(c)  Cashless
Exercise. Notwithstanding anything contained herein to the contrary, if a registration statement covering the Warrant Shares
that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”), or an exemption from registration,
is not available for the resale of such Unavailable Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant
in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise
in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of
shares of Common Stock determined according to the following formula (a “Cashless Exercise”):


 





	Net Number =	(A x B) - (A x C)
	 	             B  




 


For purposes of the
foregoing formula:


 


A= the
total number of shares with respect to which this Warrant is then being exercised.


 


B= the
arithmetic average of the Closing Sale Prices of the shares of Common Stock for the five (5) consecutive Trading Days ending on
the date immediately preceding the date of the Exercise Notice.


 


C= the
Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.


 


(d)  Rule
144. For purposes of Rule 144(d) promulgated under the Securities Act, as in effect on the date hereof, assuming the Holder
is not an affiliate of the Company, it is intended that the Warrant Shares issued in a Cashless Exercise shall be deemed to have
been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this
Warrant was originally issued pursuant to the Subscription Agreement.


 




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(e)  Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed.


 


(f)  [Reserved]1[Holder’s
Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 1 or otherwise, to the extent that after giving effect to such
issuance after exercise as set forth on the applicable Exercise Notice, the Holder (together with the Holder’s Affiliates,
and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution
Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes
of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution
Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining,
nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties; and (ii)
exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation,
any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence,
for purposes of this Section 1(f), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange
Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith.
To the extent that the limitation contained in this Section 1(f) applies, the determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of
which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of an Exercise
Notice shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities
owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable,
in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the
accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this
Section 1(f), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding
shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Securities
and Exchange Commission (the “Commission”), as the case may be, (B) a more recent public announcement by the
Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common
Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and
in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares
of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including
this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares
of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares
of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise
of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions
of this Section 1(f), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number
of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise
of this Warrant held by the Holder and the provisions of this Section 1(f) shall continue to apply. Any increase in the
Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company.
The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this Section 1(f) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the
intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.]2


 


 






1
Remove brackets and highlighting and delete the remaining text if the Holder has indicated in its Subscription Agreement that it
does not want the Ownership Limitation provisions to apply.


 


2
Remove brackets and highlighting and delete the “[Reserved]” text if the Holder has indicated in its
Subscription Agreement that it wants the Ownership Limitation provisions to apply.




 




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(g)  Insufficient
Authorized Shares. The Company shall at all times keep reserved for issuance under this Warrant a number of shares of Common
Stock as shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock hereunder (without regard
to any limitation otherwise contained herein with respect to the number of shares of Common Stock that may be acquirable upon exercise
of this Warrant). If, notwithstanding the foregoing, and not in limitation thereof, at any time while any Series E Warrant remains
outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation
to reserve for issuance upon exercise of the Series E Warrants at least a number of shares of Common Stock equal to the number
of shares of Common Stock as shall from time to time be necessary to effect the exercise of all of the Series E Warrants then outstanding
(the “Required Reserve Amount”) (an “Authorized Share Failure”), then the Company shall immediately
take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the
Company to reserve the Required Reserve Amount for all the Series E Warrants then outstanding. Without limiting the generality
of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event
later than seventy-five (75) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting or obtain
the written consent of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In
connection with such meeting or written consent, the Company shall provide each stockholder with a proxy or information statement
and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock
and to cause its board of directors to recommend to the stockholders that they approve such proposal.


 




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2.    ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted from
time to time as follows:


 


(a)  Voluntary
Adjustment By Company. The Company may at any time during the term of this Warrant reduce the then current Exercise Price to
any amount and for any period of time deemed appropriate by the Board of Directors of the Company.


 


(b)  Adjustment
upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Closing Date subdivides (by any
stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise) one or more classes of its outstanding
shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will
be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or
after the Closing Date combines (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise)
one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately
prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased.
Any adjustment under this Section 2(b) shall become effective at the close of business on the date the subdivision or combination
becomes effective.


 


(c)  Other
Events. If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided
for by such provisions (including, without limitation, the granting of stock appreciation rights or phantom stock rights), then
the Company’s Board of Directors will make an appropriate adjustment in the Exercise Price and the number of Warrant Shares
so as to protect the rights of the Holder; provided that no such adjustment pursuant to this Section 2(c) will increase
the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2.


 


3.    RIGHTS
UPON DISTRIBUTION OF ASSETS.


 


(a)  If the
Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common Stock (and not to the Holders)
evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase
any security other than the Common Stock (including, without limitation, any distribution of cash, stock or other securities, property
or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction),
then in each such case the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the
record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator
shall be the Weighted Average Price determined as of the record date mentioned above, and of which the numerator shall be such
Weighted Average Price on such record date less the then per share fair market value at such record date of the portion of such
assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock as determined by the
Board of Directors in good faith. In either case the adjustments shall be described in a statement provided to the Holder of the
portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock.
Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date
mentioned above.


 




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4.    PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.


 


(a)  Purchase
Rights. In addition to any adjustments pursuant to Section 2
above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which
the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of
this Warrant immediately prior to the record date fixed for determination of stockholders entitled to receive such grant, issuance
or sale of such Purchase Rights, or, if no such record date is established, the date as of which the record holders of shares of
Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.


 


(b)  Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes
in writing (unless the Company is the Successor Entity) all of the obligations of the Company under this Warrant and the other
Transaction Documents in accordance with the provisions of this Section 4(b), including agreements to deliver to each holder
of the Warrants in exchange for such Warrants a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant, including, without limitation, an adjusted exercise price equal to the value for
the shares of Common Stock reflected by the terms of such Fundamental Transaction, and exercisable for a corresponding number of
shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant prior
to such Fundamental Transaction. The Successor Entity shall succeed to, and be substituted for (so that from and after the date
of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the
Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company
under this Warrant with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of
the Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise
of this Warrant at any time after the consummation of the Fundamental Transaction, in lieu of the shares of Common Stock (or other
securities, cash, assets or other property) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such
shares of common stock or common shares (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder
would have been entitled to receive upon the happening of such Fundamental Transaction had this Warrant been converted immediately
prior to such Fundamental Transaction, as adjusted in accordance with the provisions of this Warrant. In addition to and not in
substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders
of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common
Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter
have the right to receive upon an exercise of this Warrant at any time after the consummation of the Corporate Event but prior
to the Expiration Date, in lieu of shares of Common Stock (or other securities, cash, assets or other property) purchasable upon
the exercise of this Warrant prior to such Corporate Event, such shares of stock, securities, cash, assets or any other property
whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon
the happening of such Corporate Event had this Warrant been exercised immediately prior to such Corporate Event. The provisions
of this Section 4(b) shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and shall
be applied without regard to any limitations on the exercise of this Warrant.


 




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(c)  Applicability
to Successive Transactions. The provisions of this Section shall apply similarly and equally to successive Fundamental Transactions
and Corporate Events and shall be applied without regard to any limitations on the exercise of this Warrant.


 


5.    NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation, Bylaws or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will
at all times in good faith comply with all the provisions of this Warrant and take all actions consistent with effectuating the
purposes of this Warrant. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value
of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect; (ii) shall
take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant; and (iii) shall, so long as this Warrant is outstanding,
take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the
purpose of effecting the exercise of this Warrant, 100% of the number of shares of Common Stock issuable upon exercise of this
Warrant then outstanding (without regard to any limitations on exercise).


 


6.    WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s
capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital
of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in
such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote,
give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to
the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant.
In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company.


 




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7.    REISSUANCE
OF WARRANTS.


 


(a)  Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall (i) comply with the provisions set forth in Section 14;
and (ii) surrender this Warrant to the Company and deliver the completed and executed Assignment Form, in the form attached hereto
as Exhibit C, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance
with Section 7(d))), registered as the Holder may request, representing the right to purchase the number of Warrant Shares
being transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred,
a new Warrant (in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares
not being transferred.


 


(b)  Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase
the Warrant Shares then underlying this Warrant.


 


(c)  Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase
the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such
portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no
Warrants for fractional shares of Common Stock shall be given.


 


(d)  Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant; (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant); (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date;
and (iv) shall have the same rights and conditions as this Warrant.


 


8.    NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with the provisions of the Subscription Agreement.


 




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9.    AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may not be amended or waived except upon the
execution and delivery of a written agreement executed by both the Company and the Holder; provided, however, that for the
avoidance of doubt, the Company may amend and/or supplement the form of Certificate of Subsequent Sale without the need to obtain
the consent of the Holder, and provided further, in the event that this Warrant is amended in accordance with this Section
9, the Company shall promptly offer all other holders of the Series E Warrants then outstanding the opportunity to make the
same amendment to their respective Series E Warrants.


 


10.   GOVERNING
LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. This Warrant shall be governed by, and construed in accordance with, the
internal laws of the State of New York, without reference to the choice of law provisions thereof. The Company and, by accepting
this Warrant, the Holder, each irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located
in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action,
proceeding or judgment relating to or arising out of this Warrant and the transactions contemplated hereby. Service of process
in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods
as are specified for the giving of notices under this Warrant. The Company and, by accepting this Warrant, the Holder, each irrevocably
consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court.
The Company and, by accepting this Warrant, the Holder, each irrevocably waives any objection to the laying of venue of any such
suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum. EACH OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE HOLDER HEREBY
WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.


 


11.   CONSTRUCTION;
HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant.


 


12.   DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two (2) Business Days
of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company
are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three (3) Business
Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two
(2) Business Days submit via facsimile (i) the disputed determination of the Exercise Price to an independent, reputable investment
bank selected by the Company and approved by the Holder, which approval shall not be unreasonably withheld, conditioned or delayed;
or (ii) the disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company
shall cause the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify
the Company and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed determinations
or calculations. The prevailing party in any dispute resolved pursuant to this Section 12 shall be entitled to the full
amount of all reasonable expenses, including all costs and fees paid or incurred in good faith, in relation to the resolution of
such dispute. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding
upon all parties absent demonstrable error.


 




    	 	-10-	 



     


    

 


13.   REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition
to all other remedies available under this Warrant, at law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the Company
to comply with the terms of this Warrant.


 


14.   TRANSFER.
This Warrant may not be offered for sale, sold, transferred or assigned unless and until (i) the Holder shall have delivered to
the Company (if requested by the Company) an opinion of counsel to the Holder, in a form reasonably acceptable to the Company,
to the effect that such Warrant to be sold, transferred or assigned may be transferred or assigned pursuant to an exemption from
registration under the Securities Act; or (ii) the Holder provides the Company with reasonable assurance (which may include customary
representation letters) that such Warrant can be sold, assigned or transferred pursuant to Rule 144 promulgated under the Securities
Act.


 


15.   CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:


 


(a)  “Affiliate”
means, with respect to a Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with such first Person. For purposes of this definition, “control” and, with
correlative meanings, the terms “controlled by” and “under common control with” means (a) the possession,
directly or indirectly, of the power to direct the management or policies of a business entity, whether through the ownership of
voting securities, by contract relating to voting rights or corporate governance, or otherwise; or (b) the ownership, directly
or indirectly, of more than fifty percent (50%) of the voting securities or other ownership interest of a business entity (or,
with respect to a limited partnership or other similar entity, its general partner or controlling entity).


 


(b)  “Bloomberg”
means Bloomberg Financial Markets.


 


(c)  “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.


 




    	 	-11-	 



     


    

 


(d)  “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York
time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such
security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
on the OTC Pink marketplace operated by OTC Markets Group Inc. If the Closing Bid Price or the Closing Sale Price cannot be calculated
for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case
may be, of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. All
such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction
during the applicable calculation period.


 


(e)  “Common
Stock” means (i) the Company’s shares of Common Stock, par value $0.001 per share; and (ii) any share capital
into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.


 


(f)  “Common
Stock Equivalents” means any securities of the Company or its subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.


 


(g)  “Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for shares of Common Stock.


 


(h)  “Eligible
Market” means the Principal Market, The New York Stock Exchange, Inc., The NYSE MKT, The NASDAQ Capital Market, The NASDAQ
Global Market or The NASDAQ Global Select Market.


 


(i)  “Expiration
Date” means May 26, 2021 or, if such date falls on a day other than a Trading Day or on which trading does not take place
on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal
securities exchange or securities market on which the Common Stock is then traded (a “Holiday”), the next date
that is not a Holiday.


 




    	 	-12-	 



     


    

 


(j)  “Fundamental
Transaction” means that the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate
or merge with or into (whether or not the Company is the surviving corporation) another Person (but excluding a migratory merger
effected solely for the purpose of changing the jurisdiction of incorporation of the Company); or (ii) sell, assign, transfer,
convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person; or (iii)
allow another Person to make a purchase, tender or exchange offer that is accepted by the holders of more than 50% of the outstanding
shares of Common Stock (not including any shares of Common Stock held by the Person or Persons making or party to, or associated
or affiliated with the Persons making or party to, such purchase, tender or exchange offer); or (iv) consummate a stock purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock
(not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated
with the other Persons making or party to, such stock purchase agreement or other business combination); (v) reorganize, recapitalize
or reclassify its Common Stock; or (vi) any “person” or “group” (as these terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding
Common Stock.


 


(k)  “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.


 


(l)  “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.


 


(m)  “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.


 


(n)  “Principal
Market” means any market maintained by OTC Markets Group Inc. on which the Common Stock is traded on the Closing Date.


 


(o)  “Registration
Rights Agreement” means that certain Registration Rights Agreement dated as of the Issuance Date by and among the Company
and each party executing a Subscription Agreement.


 


(p)  “Required
Holders” means, as of any date, the holders of at least a majority of the Warrants outstanding as of such date.


 


(q)  “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving
any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction
shall have been entered into.


 




    	 	-13-	 



     


    

 


(r)  “Trading
Day” means any day on which the Common Stock are traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock are then traded; provided that “Trading Day” shall not include any day on which the Common Stock
are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock are suspended from trading
during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing
time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).


 


(s)  “Transaction
Documents” means, collectively, this Warrant, the Subscription Agreement, and the Registration Rights Agreement.


 


(t)  “Weighted
Average Price” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly
announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on
the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time
as the Principal Market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such
other time as the Principal Market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar
volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid
price and the lowest closing ask price of any of the market makers for such security as reported on the OTC Pink marketplace operated
by OTC Markets Group Inc. If the Weighted Average Price cannot be calculated for a security on a particular date on any of the
foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 12 with the term “Weighted Average Price” being substituted
for the term “Exercise Price.” All such determinations shall be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable calculation period.


 


[Signature Page Follows]


 




    	 	-14-	 



     


    

 


IN WITNESS WHEREOF,
the Company has caused this Series E Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.


 


	 	ARCH THERAPEUTICS, INC.
	 	 
	 	By:	 	 
	 	Name:
	 	Title: 


 




     


     


    

 


EXHIBIT A


 


EXERCISE NOTICE


 


TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS


SERIES E WARRANT TO PURCHASE COMMON STOCK


 


ARCH
THERAPEUTICS, INC.


 


The undersigned holder
hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”) of
Arch Therapeutics, Inc., a Nevada corporation (the “Company”), evidenced by the attached Series E Warrant to
Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant.


 


1.  Form
of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:


 


	 	____________	 	a “Cash Exercise” with respect to _________________ Warrant Shares; and/or
	 	 	 	 
	 	____________	 	a “Cashless Exercise” with respect to _______________ Warrant Shares.


 


2.  Payment
of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares
to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company
in accordance with the terms of the Warrant.


 


3.  Delivery
of Warrant Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant
and, after delivery of such Warrant Shares, _____________ Warrant Shares remain subject to the Warrant.


 


	Date: _____________________ __, ______	 
	 	 
	Name of Registered Holder	 
	 	 	 
	By:	 	 
	 	Name:	 
	 	Title:	 


 




    		A-1	 



     


    

 


EXHIBIT B


 


CERTIFICATE OF SUBSEQUENT SALE


 


Empire Stock Transfer


1859 Whitney Mesa Dr


Henderson, NV 89014


Via e-mail: info@empirestock.com


 


Lowenstein Sandler LLP


1251 Avenue of the Americas


New York, New York 10020


Via e-mail: jhogoboom@lowenstein.com


 


		Re:	Arch Therapeutics, Inc. – Removal of Legends on Shares of Common Stock

Resale Registration Statement on Form S-1 (File No. 333-_ _ _ _ _ _ _)



 


		1.	In connection with the Registration Statement on Form S-1
(File No. -_ _ _ _ _ _ _)(the “Registration Statement”), the undersigned hereby requests that Empire
Stock Transfer:



 


		 ̈	remove the restrictive legend from ________ shares of common stock, par value $0.001 per share, of
Arch Therapeutics, Inc. (“Common Stock”), evidenced by certificate number(s) _____, on the basis that such shares
of Common Stock have been registered for resale under the Registration Statement.



 


OR


 


		 ̈	in connection with the exercise of the undersigned’s Series E Warrant(s) to Purchase Common
Stock, issue __________ shares of Common Stock without a restrictive legend on the basis that such shares of Common Stock have
been registered for resale under the Registration Statement.



 


		2.	In connection with the foregoing request, the undersigned
hereby represents and warrants to Empire Stock Transfer and Lowenstein Sandler LLP that such shares of Common Stock were sold
in accordance with either the plan of distribution contained in the Registration Statement or Rule 144 promulgated under the Securities
Act of 1933 (“Securities Act”).



 


	 	 	 
	 	(Name of Selling Stockholder)	 
	 	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 


 




    		B-1	 



     


    

 


EXHIBIT C


 


ASSIGNMENT FORM


ARCH THERAPEUTICS, INC.


 


(To assign the foregoing
Series E Warrant, execute this form and supply required information. Do not use this form to purchase shares.)


 


FOR VALUE RECEIVED,
and subject to the Holder’s compliance with the restrictions set forth in Section 14 of the foregoing Series E Warrant
to Purchase Common Stock (the “Warrant”), the Warrant and all rights evidenced thereby are hereby assigned to


 


	Name:	 
	 	(Please Print)
	Address:	 
	 	(Please Print)
	Dated: _______________ __, ______	 
	 	 
	Holder’s Signature:                                       	 
	 	 
	Holder’s Address:                                         	 


 


NOTE: The signature to this Assignment
Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatever.
Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority
to assign the foregoing Warrant.


 




    		C-1