Exhibit 10.3


 


EXECUTION COPY


 


REGISTRATION RIGHTS AGREEMENT


 


This REGISTRATION
RIGHTS AGREEMENT (this “Agreement”), dated as of May 26, 2016, is by and among Arch Therapeutics, Inc.,
a Nevada corporation (the “Company”), and each of the undersigned Purchasers (as defined below).


 


RECITALS


 


A.           In
connection with the Subscription Agreements (each, as may be amended from time to time, a “Subscription Agreement”
and collectively, the “Subscription Agreements”), entered into by and between each Purchaser and the Company
during the period commencing May 24, 2016 and ending May 26, 2016, the Company agreed, upon the terms and subject to the conditions
of each Subscription Agreement, to issue and sell to each Purchaser (i) shares of Common Stock (as defined in the Subscription
Agreements) (the “Common Shares”); and (ii) the Warrants, which will be exercisable to purchase Warrant Shares
(each term as defined in the Subscription Agreements) in accordance with the terms of the Warrants.


 


B.           To
induce the Purchasers to consummate the transactions contemplated by the Subscription Agreements, the Company has agreed to provide
certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the “Securities Act”), and applicable state securities laws.


 


AGREEMENT


 


NOW, THEREFORE,
in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and each of the Purchasers hereby agree as follows:


 


1.          Definitions.


 


Capitalized terms used
herein and not otherwise defined herein shall have the respective meanings set forth in the Subscription Agreements. As used in
this Agreement, the following terms shall have the following meanings:


 


(a)  “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.


 


(b)  “Closing
Date” shall have the meaning set forth in the Subscription Agreements.


 


(c)   “Effective
Date” means the date that the applicable Registration Statement has been declared effective by the SEC.


 


(d)  “Effectiveness
Deadline” means the earlier of the (A) 150th calendar day after the Closing Date and (B) fifth (5th)
Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Registration
Statement will not be reviewed or will not be subject to further review.


 


(e)  “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, or any similar
successor statute.


 


(f)  “Filing
Deadline” means the forty-fifth (45th) calendar day after the Closing Date; provided, however, that
if the Filing Deadline occurs on a day that is not a Business Day, the Filing Deadline shall be the next Business Day.


 




     


     


    

  


(g)  “Investor”
means a Purchaser or any transferee or assignee of any Registrable Securities or Warrants, as applicable, to whom a Purchaser assigns
its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section
 7 and any transferee or assignee thereof to whom a transferee or assignee of any
Registrable Securities or Warrants, as applicable, assigns its rights under this Agreement and who agrees to become bound by the
provisions of this Agreement in accordance with Section  7.


 


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


 


(i)  “Prospectus”
means (i) the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by
all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference
in such prospectus; and (ii) any “free writing prospectus” as defined in Rule 405.


 


(j)  “Purchasers”
means, collectively, each Person identified as the “Purchaser” in the separate Subscription Agreements entered into
by the Company and the applicable Purchasers in connection with the Offering (as defined in the Subscription Agreements).


 


(k)  “register,”
“registered,” and “registration” refer to a registration effected by preparing and filing
one or more Registration Statements in compliance with the Securities Act and pursuant to Rule 415 and the declaration of effectiveness
of such Registration Statement(s) by the SEC.


 


(l)  “Registrable
Securities” means (i) the Common Shares; (ii) the Warrant Shares; and (iii) any other securities issued or issuable with
respect to or in exchange for Common Shares, the Warrant Shares or the Warrants as a result of (1) any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, or (2) a Fundamental Transaction or Corporate Event (each term as defined
in the Warrants); provided, however that all of the foregoing shall cease being Registrable Securities upon any sale thereof
pursuant to an effective Registration Statement or Rule 144.


 


(m)  “Registration
Statement” means a registration statement or registration statements of the Company filed under the Securities Act covering
Registrable Securities, including (in each case) the prospectus, amendments and supplements to such registration statements, including
pre-effective and post-effective amendments, and all exhibits and other material incorporated by reference or deemed to be incorporated
by reference in such registration statements.


 


(n)  “Required
Holders” means, as of the date of measurement, the holders of at least two-thirds (2/3) of the Registrable Securities.


 


(o)  “Rule
144” means Rule 144 promulgated by the SEC under the Securities Act, as such rule may be amended from time to time, or
any other similar or successor rule or regulation of the SEC that may at any time permit the Investors to sell securities of the
Company to the public without registration.


 


(p)  “Rule
405” means Rule 405 promulgated by the SEC under the Securities Act, as such rule may be amended from time to time, or
any other similar or successor rule or regulation of the SEC.


 


(q)  “Rule
415” means Rule 415 promulgated by the SEC under the Securities Act, as such rule may be amended from time to time, or
any other similar or successor rule or regulation of the SEC providing for offering securities on a continuous or delayed basis.


 


(r)  “SEC”
means the United States Securities and Exchange Commission or any successor thereto.


 




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2.          Registration.


 


(a)  Mandatory
Registration. The Company shall prepare and, as soon as practicable, but in no event later than the Filing Deadline, file with
the SEC one Registration Statement on Form S-1 covering the resale of all of the Registrable Securities. Except if otherwise directed
by the Required Holders or if the SEC shall have any comments regarding such section, such Registration Statement shall contain,
among other things, the “Plan of Distribution” section in substantially the form attached hereto as Exhibit
A (and each Purchaser hereby acknowledges and agrees solely with respect to such Registration Statement filed pursuant
to this Section  2(a) that, as of the date hereof, the disclosure set forth
under such “Plan of Distribution” section is accurate and complete with respect to it). The Registration Statement
(and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided in accordance
with Section  3(c) to the Investors and their counsel prior to its filing or
other submission. 


 


(b)  Use
of Form S-3. Promptly following the date (the “Qualification Date”) upon which the Company becomes eligible
to use a registration statement on Form S-3 to register the Registrable Securities for resale, but in no event more than forty-five
(45) days after the Qualification Date (the “Qualification Deadline”), the Company shall file a registration
statement on Form S-3 covering the Registrable Securities (or a post-effective amendment on Form S-3 to the registration statement
on Form S-1) (a “Shelf Registration Statement”) and shall use commercially reasonable efforts to cause such
Shelf Registration Statement to be declared effective as promptly as practicable thereafter.


 


(c)  Effectiveness.


 


i.            The
Company shall use commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable.
The Company shall notify the Investors by facsimile or e-mail as promptly as practicable, and in any event, within twenty-four
(24) hours, after any Registration Statement is declared effective and shall simultaneously provide the Investors with copies of
any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby. If (i) a
Registration Statement covering the Registrable Securities is not declared effective by the SEC by the Effectiveness Deadline;
or (ii) after a Registration Statement has been declared effective by the SEC, sales cannot be made pursuant to such Registration
Statement for any reason (including without limitation by reason of a stop order, or the Company’s failure to update the
Registration Statement), but excluding any Annual Update or Allowed Delay (each term as defined below), then the Company will make
pro rata payments (each payment, a “Registration Delay Payment”) to each Investor for each 30- day period or
pro rata for any portion thereof following the date by which such Registration Statement should have been effective (the “Blackout
Period”), as liquidated damages and not as a penalty, in an amount equal to (a) in the case of each Investor that is
a Purchaser, 1.5% of the aggregate Purchase Price (as defined in the Subscription Agreements) paid by such Purchaser; (b) in the
case of each Investor who is an affiliate of a Purchaser and acquired Registrable Securities from such Purchaser for no additional
consideration, 1.5% of the aggregate Purchase Price (as defined in the Subscription Agreements) paid by the Purchaser who was the
transferor or assignor (an “Assigning Purchaser”); provided, however, if (1) the Assigning Purchaser
retains any Registrable Securities, the Registration Delay Payment payable to such Assigning Purchaser shall be governed by this
proviso to clause (b) rather than clause (a), and such Registration Delay Payment shall be allocated pro rata between the Investor
and the Assigning Purchaser based on the number of Registrable Securities held by the Investor and the Assigning Purchaser at the
commencement of the applicable Blackout Period, and (2) the Registrable Securities held by the Assigning Purchaser were transferred
or assigned to more than one affiliate for no additional consideration, such Registration Delay Payment shall be allocated pro
rata among such affiliates based on the number of Registrable Securities held by the each such affiliate at the commencement of
the applicable Blackout Period; and (c) in the case of an Investor that is not a Purchaser and not otherwise covered by the preceding
clause (b), 1.5% of the aggregate purchase price paid by such Investor to acquire the Registrable Securities covered by the Registration
Statement. Such Registration Delay Payments shall constitute the Investors’ exclusive monetary remedy for such events, but
shall not affect the right of the Investors to seek injunctive relief. The Registration Delay Payments payable as liquidated damages
pursuant to this Section shall be paid monthly within three (3) Business Days of the last day of each month following the commencement
of the Blackout Period until the termination of the Blackout Period. Such Registration Delay Payments shall be made to each Investor
in cash.


 


ii.         Not
more than once each fiscal year, the Company may suspend the use of any Prospectus included in any Registration Statement contemplated
by this Section for up to sixty (60) consecutive days for the primary purpose of filing a post-effective amendment to incorporate
within such Registration Statement the Company’s audited financial statements for the preceding fiscal year (an “Annual
Update”); provided, that the Company shall (a) promptly notify each Investor in writing of the commencement
of an Annual Update; (b) promptly advise the Investors in writing to cease all sales under the Registration Statement until the
Annual Update is completed and the applicable post-effective amendment has been declared effective by the SEC; and (c) use commercially
reasonable efforts to complete an Annual Update as promptly as practicable.


 




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iii.         For
not more than thirty (30) consecutive days or for a total of not more than sixty (60) days in any twelve (12) month period, the
Company may suspend the use of any Prospectus included in any Registration Statement contemplated by this Section in the event
that the Company determines in good faith that such suspension is necessary to (i) delay the disclosure of material non-public
information concerning the Company, the disclosure of which at the time is not, in the good faith opinion of the Company, in the
best interests of the Company; or (ii) amend or supplement the affected Registration Statement or the related Prospectus so that
such Registration Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the circumstances
under which they were made, not misleading (an “Allowed Delay”); provided that the Company shall (a)
promptly notify each Investor in writing of the commencement of an Allowed Delay, but shall not (without the prior written consent
of an Investor) disclose to such Investor any material non-public information giving rise to an Allowed Delay; (b) promptly advise
the Investors in writing to cease all sales under the Registration Statement until the end of the Allowed Delay; and (c) use commercially
reasonable efforts to terminate an Allowed Delay as promptly as practicable.


 


(d)  Rule
415; Cutback If at any time the SEC takes the position that the offering of some or all of the Registrable Securities in a
Registration Statement is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under the Securities
Act or requires any Investor to be named as an “underwriter”, the Company shall use its best efforts to persuade
the SEC that the offering contemplated by the Registration Statement is a valid secondary offering and not an offering “by
or on behalf of the issuer” as defined in Rule 415 and that none of the Investors is an “underwriter”.
The Investors shall have the right to participate or have their counsel participate in any meetings or discussions with the SEC
regarding the SEC’s position and to comment or have their counsel comment on any written submission made to the SEC with
respect thereto. No such written submission shall be made to the SEC to which the Investors’ counsel reasonably objects.
In the event that, despite the Company’s best efforts and compliance with the terms of this Section  2(d),
the SEC refuses to alter its position, the Company shall (i) remove from the Registration Statement such portion of the Registrable
Securities (the “Cut Back Shares”); and/or (ii) agree to such restrictions and limitations on the registration
and resale of the Registrable Securities as the SEC may require to assure the Company’s compliance with the requirements
of Rule 415 (collectively, the “SEC Restrictions”); provided, however, that the Company shall not agree
to name any Investor as an “underwriter” in such Registration Statement without the prior written consent of
such Investor. Any cut-back imposed on the Investors pursuant to this Section  2(d)
shall be allocated among the Investors on a pro rata basis and shall be applied first to any Warrant Shares, unless the SEC Restrictions
otherwise require or provide or the Required Holders otherwise agree. No liquidated damages shall accrue as to any Cut Back Shares
until such date as the Company is able to effect the registration of such Cut Back Shares in accordance with any SEC Restrictions
(such date, the “Restriction Termination Date” of such Cut Back Shares). From and after the Restriction Termination
Date applicable to any Cut Back Shares, all of the provisions of this Section  2
(including the liquidated damages provisions) shall again be applicable to such Cut Back Shares; provided, however, that
the Filing Deadline for the Registration Statement including such Cut Back Shares shall be ten (10) Business Days after such Restriction
Termination Date.


 


(e)  No
Inclusion of Other Securities. In no event shall the Company include any securities other than Registrable Securities on any
Registration Statement filed pursuant to this Agreement without the prior written consent of the Required Holders.


 


(f)  Termination
of Obligations. Notwithstanding anything to the contrary contained herein, the Company’s obligations set forth in Sections
 2,  3, and  4(a)
shall terminate upon the expiration of the Effectiveness Period (as defined below).


 


3.          Company
Obligations.


 


The Company will use
commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the terms hereof, and
pursuant thereto the Company will, as expeditiously as possible:


 




    	-4- 



     


    

  


(a)  use
commercially reasonable efforts to cause such Registration Statement to become effective and to remain continuously effective for
a period that will terminate upon the earlier of (i) the date on which all Registrable Securities covered by such Registration
Statement, as amended from time to time, have been sold; and (ii) the twelve month anniversary of the Effective Date (the “Effectiveness
Period”) and advise the Investors in writing when the Effectiveness Period has expired;


 


(b)  prepare
and file with the SEC such amendments and post-effective amendments to the Registration Statement and the Prospectus as may be
necessary to keep the Registration Statement effective for the Effectiveness Period and to comply with the provisions of the Securities
Act and the Exchange Act with respect to the distribution of all of the Registrable Securities covered thereby;


 


(c)  provide
copies to and permit counsel designated by the Investors to review each Registration Statement and all amendments and supplements
thereto no fewer than seven (7) days prior to their filing with the SEC and not file any document to which such counsel reasonably
objects;


 


(d)  furnish
to the Investors and their legal counsel (i) promptly after the same is prepared and publicly distributed, filed with the SEC,
or received by the Company (but not later than two (2) Business Days after the filing date, receipt date or sending date, as the
case may be) one (1) copy of any Registration Statement and any amendment thereto, each preliminary prospectus and Prospectus and
each amendment or supplement thereto, and each letter written by or on behalf of the Company to the SEC or the staff of the SEC,
and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other
than any portion of any thereof which contains information for which the Company has sought confidential treatment); and (ii) such
number of copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other
documents as each Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by
such Investor that are covered by the related Registration Statement;


 


(e)  use
commercially reasonable efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness and; (ii) if
such order is issued, obtain the withdrawal of any such order at the earliest possible moment;


 


(f)  prior
to any public offering of Registrable Securities, use commercially reasonable efforts to register or qualify or cooperate with
the Investors and their counsel in connection with the registration or qualification of such Registrable Securities for offer and
sale under the securities or blue sky laws of such jurisdictions requested by the Investors and do any and all other commercially
reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Registrable Securities
covered by the Registration Statement; provided, however, that the Company shall not be required in connection therewith
or as a condition thereto to (i) qualify to do business in any jurisdiction where it would not otherwise be required to qualify
but for this Section  3(f); (ii) subject itself to general taxation in any jurisdiction
where it would not otherwise be so subject but for this Section  3(f); or (iii)
file a general consent to service of process in any such jurisdiction;


 


(g)  use
commercially reasonable efforts to cause all Registrable Securities covered by a Registration Statement to be listed on each securities
exchange, interdealer quotation system or other market on which similar securities issued by the Company are then listed;


 


(h)  immediately
notify the Investors, at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening of any
event as a result of which, the Prospectus includes an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing,
and promptly prepare, file with the SEC and furnish to such holder a supplement to or an amendment of such Prospectus as may be
necessary so that such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;


 


(i)  otherwise
use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC under the Securities Act and
the Exchange Act in connection with any registration hereunder; and


 




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(j)  With
a view to making available to the Investors the benefits of Rule 144 (or its successor rule) and any other rule or regulation of
the SEC that may at any time permit the Investors to sell shares of Common Stock to the public without registration, the Company
covenants and agrees to: (i) make and keep public information available, as those terms are understood and defined in Rule 144;
(ii) file with the SEC in a timely manner all reports and other documents required of the Company under the Exchange Act; and (iii)
furnish to each Investor upon request, as long as such Investor owns any Registrable Securities, (A) a written statement by the
Company that it has complied with the reporting requirements of the Exchange Act, (B) a copy of the Company’s most recent
Annual Report on Form 10-K or Quarterly Report on Form 10-Q as so filed by the Company with the SEC if such reports are not publicly
available via EDGAR; and (C) such other information as may be reasonably requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.


 


4.          Due
Diligence Review; Information.


 


(a)  The
Company shall make available, during normal business hours, for inspection and review by the Investors, advisors to and representatives
of the Investors (who may or may not be affiliated with the Investors and who are reasonably acceptable to the Company), all financial
and other records, all SEC Documents (as defined in the Subscription Agreements) and other filings with the SEC, and all other
corporate documents and properties of the Company as may be reasonably necessary for the purpose of such review, and cause the
Company’s officers, directors and employees, within a reasonable time period, to supply all such information reasonably requested
by the Investors or any such representative, advisor or underwriter in connection with such Registration Statement (including,
without limitation, in response to all questions and other inquiries reasonably made or submitted by any of them), prior to and
from time to time after the filing and effectiveness of the Registration Statement for the sole purpose of enabling the Investors
and such representatives, advisors and underwriters and their respective accountants and attorneys to conduct initial and ongoing
due diligence with respect to the Company and the accuracy of such Registration Statement.


 


(b)  The
Company shall not disclose material nonpublic information to the Investors, or to advisors to or representatives of the Investors,
unless prior to disclosure of such information the Company identifies such information as being material nonpublic information
and provides the Investors, such advisors and representatives with the opportunity to accept or refuse to accept such material
nonpublic information for review and any Investor wishing to obtain such information enters into an appropriate confidentiality
agreement with the Company with respect thereto.


 


5.          Obligations
of the Investors.


 


(a)  At
least five (5) Business Days prior to the first anticipated filing date of each Registration Statement or any prospectus supplement
or pre-effective or post-effective amendment thereto, the Company shall notify each Investor in writing of the information the
Company requires from each such Investor with respect to such Registration Statement. It shall be a condition precedent to the
obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of
a particular Investor that such Investor shall furnish to the Company such information regarding itself, the Registrable Securities
held by it and beneficial ownership information related thereto, and the intended method of disposition of the Registrable Securities
held by it, as shall be reasonably required to effect and maintain the effectiveness of the registration of such Registrable Securities
and shall execute such documents in connection with such registration as the Company may reasonably request. Without limiting the
generality of the foregoing, the Investor acknowledges and agrees that such information shall include at least (i) the Investor’s
confirmation of the accuracy of, or revision to maintain the accuracy of, the disclosure under the heading “Plan of Distribution”
in the applicable Registration Statement (or any prospectus supplement or pre-effective or post-effective amendment thereto); and
(ii) the detail regarding such Investor as set forth under the heading “Selling Securityholders” in the applicable
Registration Statement (or any prospectus supplement or pre-effective or post-effective amendment thereto).


 


(b)  Each
Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of each Registration Statement or any prospectus supplement
or pre-effective or post-effective amendment thereto hereunder, unless such Investor has notified the Company in writing of such
Investor’s election to exclude all of such Investor’s Registrable Securities from such Registration Statement.


 




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(c)  Each
Investor agrees that, upon receipt of any notice from the Company of either (i) the commencement of an Allowed Delay pursuant to
Section  2(c)ii; or (ii) the happening of an event pursuant to Section 
3(h) hereof, such Investor will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities, until the Investor is advised by the Company that
such dispositions may again be made.


 


(d)  Each
Investor covenants and agrees that it will (i) comply with the prospectus delivery requirements of the Securities Act as applicable
to it in connection with sales of Registrable Securities pursuant to a Registration Statement; (ii) sell the Registrable Securities
under a Registration Statement only in accordance with the plan of distribution contained therein; and (iii) execute a Certificate
of Subsequent Sale, substantially in the form attached hereto as Exhibit C, and deliver such certificate to the parties
set forth therein whenever such Investor requests the issuance of stock certificates evidencing shares of Common Stock without
a legend regarding restrictions on transferability under the Securities Act.


 


6.          Indemnification.


 


(a)  Indemnification
by the Company. The Company will indemnify and hold harmless each Investor and its officers, directors, members, employees
and agents, successors and assigns, and each other person, if any, who controls such Investor within the meaning of the Securities
Act, against any losses, claims, damages or liabilities, joint or several, to which they may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement or omission or alleged omission of any material fact contained in any
Registration Statement, any preliminary Prospectus or final Prospectus, or any amendment or supplement thereof; (ii) any blue sky
application or other document executed by the Company specifically for that purpose or based upon written information furnished
by the Company filed in any state or other jurisdiction in order to qualify any or all of the Registrable Securities under the
securities laws thereof (any such application, document or information herein called a “Blue Sky Application”);
(iii) the omission or alleged omission to state in a Blue Sky Application a material fact required to be stated therein or necessary
to make the statements therein not misleading; (iv) any violation by the Company or its agents of any rule or regulation promulgated
under the Securities Act applicable to the Company or its agents and relating to action or inaction required of the Company in
connection with such registration; or (v) any failure to register or qualify the Registrable Securities included in any such Registration
Statement in any state where the Company or its agents has affirmatively undertaken or agreed in writing that the Company will
undertake such registration or qualification on an Investor’s behalf and will reimburse such Investor, and each such officer,
director or member and each such controlling person for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by
such Investor or any such controlling person in writing specifically for use in such Registration Statement or Prospectus.


 


(b)  Indemnification
by the Investors. Each Investor agrees, severally but not jointly, to indemnify and hold harmless, to the fullest extent permitted
by law, the Company, its directors, officers, employees, stockholders and each person who controls the Company (within the meaning
of the Securities Act) against any losses, claims, damages, liabilities and expense (including reasonable attorney fees) resulting
from any untrue statement of a material fact or any omission of a material fact required to be stated in the Registration Statement
or Prospectus or preliminary Prospectus or amendment or supplement thereto or necessary to make the statements therein not misleading,
to the extent, but only to the extent that such untrue statement or omission is contained in any information furnished in writing
by such Investor to the Company specifically for inclusion in such Registration Statement or Prospectus or amendment or supplement
thereto. In no event shall the liability of an Investor be greater in amount than the dollar amount of the proceeds (net of all
expenses paid by such Investor in connection with any claim relating to this Section  6
and the amount of any damages such Investor has otherwise been required to pay by reason of such untrue statement or omission)
received by such Investor upon the sale of the Registrable Securities included in the Registration Statement giving rise to such
indemnification obligation.


 




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(c)  Conduct
of Indemnification Proceedings. Any person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying
party of any claim with respect to which it seeks indemnification; and (ii) permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the indemnified party; provided that any Person entitled to indemnification
hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses
of such counsel shall be at the expense of such Person unless (a) the indemnifying party has agreed to pay such fees or expenses;
or (b) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory
to such Person; or (c) in the reasonable judgment of any such Person, based upon written advice of its counsel, a conflict of interest
exists between such Person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying
party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such claim on behalf of such Person); and provided, further, that
the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations
hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the
defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding
in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified
parties. No indemnifying party will, except with the consent of the indemnified party, consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified
party of a release from all liability in respect of such claim or litigation.


 


(d)  Contribution.
If for any reason the indemnification provided for in the Sections  6(a) and
6(b) is unavailable to an indemnified party or insufficient to hold it harmless, other than as expressly specified therein, then
the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying
party, as well as any other relevant equitable considerations. No Person guilty of fraudulent misrepresentation within the meaning
of Section 11(f) of the Securities Act shall be entitled to contribution from any Person not guilty of such fraudulent misrepresentation.
In no event shall the contribution obligation of a holder of Registrable Securities be greater in amount than the dollar amount
of the proceeds (net of all expenses paid by such holder in connection with any claim relating to this Section  6
and the amount of any damages such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.


 


7.          Assignment
of Registration Rights.


 


All or any portion
of the rights under this Agreement shall be assignable by each Investor to any transferee or assignee (as the case may be) of all
or any portion of such Investor’s Registrable Securities or Warrants if: (i) such Investor agrees in writing with such transferee
or assignee (as the case may be) to assign all or any portion of such rights, and a copy of such agreement is furnished to the
Company within a reasonable time after such transfer or assignment (as the case may be); (ii) the Company is, within a reasonable
time after such transfer or assignment (as the case may be), furnished with written notice of (a) the name and address of such
transferee or assignee (as the case may be), and (b) the securities with respect to which such registration rights are being transferred
or assigned (as the case may be); (iii) immediately following such transfer or assignment (as the case may be) the further disposition
of such securities by such transferee or assignee (as the case may be) is restricted under the Securities Act or applicable state
securities laws if so required; (iv) at or before the time the Company receives the written notice contemplated by clause (ii)
of this sentence such transferee or assignee (as the case may be) agrees in writing with the Company to be bound by all of the
provisions contained herein by executing a Joinder Agreement, substantially in the form attached hereto as Exhibit B;
(v) such transfer or assignment (as the case may be) shall have been made in accordance with the applicable requirements of the
Subscription Agreement and the Warrants (as the case may be); and (vi) such transfer or assignment (as the case may be) shall have
been conducted in accordance with all applicable federal and state securities laws. Notwithstanding anything to the contrary set
forth herein, the rights of the Investors hereunder, may only be assigned by each Investor to transferees or assignees that after
such assignment hold or have the right to acquire at least 300,000 shares of Common Stock that constitute Registrable Securities
(subject to appropriate adjustment for stock splits, stock dividends, combinations and other recapitalizations).


 




    	-8- 



     


    

  


8.          Miscellaneous.


 


(a)  Amendments
and Waivers. This Agreement may be amended only by a writing signed by the Company and the Required Holders. The Company may
take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall
have obtained the written consent to such amendment, action or omission to act, of the Required Holders. Notwithstanding the preceding,
each party hereto (i) acknowledges that, in accordance with Section 2 of the Subscription Agreements, the Company is permitted
to conduct additional Closings in connection with the Offering (each a “Subsequent Closing”); and (ii) agrees
that any Purchaser participating in a Subsequent Closing may (and for the avoidance of doubt, without the need to obtain the consent
of any party hereto) be added as a party to this Agreement by delivering a duly executed signature page to the Company in connection
with such Subsequent Closing.


 


(b)  Notices.
All notices and other communications provided for or permitted hereunder shall be made as set forth in Section 14 of the
Subscription Agreements.


 


(c)  Assignments
and Transfers by the Company. This Agreement may not be assigned by the Company (whether by operation of law or otherwise)
without the prior written consent of the Required Holders; provided, however, that in the event that the Company is a party
to a merger, consolidation, share exchange or similar business combination transaction in which the Common Stock is converted into
the equity securities of another Person, from and after the effective time of such transaction, (i) such Person shall, by virtue
of such transaction, be deemed to have assumed the obligations of the Company hereunder; (ii) the term “Company”
shall be deemed to refer to such Person; and (iii) the term “Registrable Securities” shall be deemed to include
the securities received by the Investors in connection with such transaction unless such securities are otherwise freely tradable
by the Investors after giving effect to such transaction.


 


(d)  Benefits
of the Agreement. The terms and conditions of this Agreement are for the sole benefit of the Parties and their successors and
permitted assigns and, except for any Person entitled to indemnification or contribution pursuant to Section  6,
they shall not be construed as conferring any rights on any other Persons. This Agreement may be amended or terminated, and any
provision of this Agreement may be waived, without the consent of any Person who is not a party to this Agreement.


 


(e)  Counterparts.
This Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one agreement. Delivery of an executed counterpart of a signature
page of this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed original
counterpart of this Agreement.


 


(f)  Titles
and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.


 


(g)  Severability.
Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted
as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereby waive any provision of law which renders any provisions hereof prohibited or unenforceable
in any respect.


 


(h)  Further
Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other actions
as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements
herein contained.


 


(i)  Entire
Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein.
This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.


 




    	-9- 



     


    

  


(j)  Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of New York without regard to the choice of law principles thereof. Each of the parties hereto 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 Agreement 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 Agreement. Each of the parties hereto 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. Each party hereto 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 PARTIES HERETO WAIVES ANY RIGHT TO REQUEST
A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS
TO THIS WAIVER.


 


[signature pages
follow]


 




    	-10- 



     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	 	COMPANY:
	 	 	 
	 	ARCH THERAPEUTICS, INC.
	 	 	 
	 	By:	/s/ Terrence W. Norchi, MD	 
	 	 	Name: Terrence W. Norchi, MD
	 	 	Title: President, Chief Executive Officer


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	 	PURCHASER:
	 	 	 
	 	Anson Investments Master Fund LP
	 	 	 
	 	By:	/s/ Amin Nathoo	 
	 	 	Name: Amin Nathoo
	 	 	Title: Advising Rep, M5V Advisors Inc.


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	
        

        
	PURCHASER:
	 	 	 
	 	P. Timothy Connolly
	 	 	 
	 	By:	/s/ P. Timothy Connolly	 
	 	 	Name: P. Timothy Connolly


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	 	PURCHASER:
	 	 	 
	 	CVI Investments, Inc.
	 	 	 
	 	By:	Heights Capital Management its Authorized Agent
	 	 	 
	 	By:	/s/ Martin Kobinger	 
	 	 	Name: Martin Kobinger
	 	 	Title: Investment Manager


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	 	PURCHASER:
	 	 	 
	 	Drake Partners Equity LLC
	 	 	 
	 	By:	/s/ David J. Pierce	 
	 	 	Name: David J. Pierce
	 	 	Title: Member


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	 	PURCHASER:
	 	 	 
	 	Empery Asset Master, Ltd.
	 	 	 
	 	By:	Empery Asset Management, LP, its Authorized Agent
	 	 	 
	 	By:	/s/ Brett Director	 
	 	 	Name: Brett Director
	 	 	Title: General Counsel


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	 	PURCHASER:
	 	 	 
	 	Empery Tax Efficient, LP
	 	 	 
	 	By:	Empery Asset Management, LP, its Authorized Agent
	 	 	 
	 	By:	/s/ Brett Director	 
	 	 	Name: Brett Director
	 	 	Title: General Counsel


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	 	PURCHASER:
	 	 	 
	 	Empery Tax Efficient II, LP
	 	 	 
	 	By:	Empery Asset Management, LP, its Authorized Agent
	 	 	 
	 	By:	/s/ Brett Director	 
	 	 	Name: Brett Director
	 	 	Title: General Counsel


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	 	PURCHASER:
	 	 	 
	 	Jonathan Galli
	 	 	 
	 	By:	/s/ Jonathan Galli	 
	 	 	Name: Jonathan Galli


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	 	PURCHASER:
	 	 	 
	 	VIKAS GULATI and MIRELA GULATI
	 	 	 
	 	By:	/s/ Vikas Gulati and Mirela Gulati	 
	 	 	Name: Vikas Gulati and Mirela Gulati


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	 	PURCHASER:
	 	 	 
	 	Hudson Bay Master Fund Ltd.
	 	 	 
	 	By:	/s/ George Antonopoulos	 
	 	 	Name: George Antonopoulos
	 	 	Title: Authorized Signatory


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	
        
	PURCHASER:
	 	 	 
	 	Intracoastal Capital, LLC
	 	 	 
	 	By:	/s/ Keith A. Goodman	 
	 	 	Name: Keith A. Goodman
	 	 	Title: Authorized Signatory


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	 	PURCHASER:
	 	 	 
	 	Keyes Sulat Revocable Trust
	 	 	 
	 	By:	/s/ James R. Sulat	 
	 	 	Name: James R. Sulat
	 	 	Title: Trustee


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	 	PURCHASER:
	 	 	 
	 	Lorraine A. Malanga
	 	 	 
	 	By:	/s/ Lorraine A. Malanga	 
	 	 	Name: Lorraine A. Malanga


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	 	PURCHASER:
	 	 	 
	 	James M. McKeone
	 	 	 
	 	By:	/s/ James M. McKeone	 
	 	 	Name: James M. McKeone


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	 	PURCHASER:
	 	 	 
	 	IRA FBO ANA B PARKER
	 	 	 
	 	By:	/s/ Ana B. Parker	 
	 	 	Name: Ana B. Parker


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	 	PURCHASER:
	 	 	 
	 	Dr. Stephanie Plent
	 	 	 
	 	By:	/s/ Stephanie Plent	 
	 	 	Name: Stephanie Plent


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	 	PURCHASER:
	 	 	 
	 	POPHAM MANAGEMENT, LLC
	 	 	 
	 	By:	/s/ Jerry K. Popham	 
	 	 	Name: Jerry K. Popham
	 	 	Title: Manager


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


IN WITNESS WHEREOF,
Purchaser and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed
as of the date first written above.


 


	 	PURCHASER:
	 	 	 
	 	Karen Carlin
	 	 	 
	 	By:	/s/ Karen Carlin	 
	 	 	Name: Karen Carlin


 


[Signature
Page to Registration Rights Agreement]


 




     


     


    

  


EXHIBIT A


 


PLAN OF DISTRIBUTION


 


We are registering
(i) the shares of common stock issued; and (ii) the shares of common stock issuable upon exercise of the Series E Warrants, in
each case, issued to the selling securityholders in the 2016 Private Placement Financing to permit the resale of these shares of
common stock by the selling securityholders from time to time after the date of this prospectus. We will not receive any of the
proceeds from the sale by the selling securityholders of the shares of common stock. We will bear all fees and expenses incident
to our obligation to register the shares of common stock.


 


The selling securityholders
may sell all or a portion of the shares of common stock held by them and offered hereby from time to time directly or through one
or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers,
the selling securityholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares
of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at
varying prices determined at the time of sale or at negotiated prices. These sales may be effected in transactions, which may involve
crosses or block transactions, pursuant to one or more of the following methods:


 


		·	on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;



		·	in the over-the-counter market;



		·	in transactions otherwise than on these exchanges or systems or in the over-the-counter market;



		·	through the writing or settlement of options, whether such options are listed on an options exchange or otherwise;



		·	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;



		·	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;



		·	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;



		·	an exchange distribution in accordance with the rules of the applicable exchange;



		·	privately negotiated transactions;



		·	short sales effected after the date the registration statement of which this prospectus is a part is declared effective by
the SEC;



		·	broker-dealers may agree with a selling securityholder to sell a specified number of such shares at a stipulated price per
share;



		·	a combination of any such methods of sale; and



		·	any other method permitted pursuant to applicable law.



 


The selling securityholders
may also sell shares of common stock under Rule 144 promulgated under the Securities Act, if available, rather than under this
prospectus. In addition, the selling securityholders may transfer the shares of common stock by other means not described in this
prospectus. If the selling securityholders effect such transactions by selling shares of common stock to or through underwriters,
broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions
or commissions from the selling securityholders or commissions from purchasers of the shares of common stock for whom they may
act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters,
broker-dealers or agents may be in excess of those customary in the types of transactions involved but, except as set forth in
a supplement to this prospectus to the extent required, in the case of an agency transaction will not be in excess of a customary
brokerage commission in compliance with FINRA Rule 5110).


 


In connection with
sales of the shares of common stock or otherwise, the selling securityholders may enter into hedging transactions with broker-dealers,
which may in turn engage in short sales of the shares of common stock in the course of hedging in positions they assume. The selling
securityholders may also sell shares of common stock short and deliver shares of common stock covered by this prospectus to close
out short positions and to return borrowed shares in connection with such short sales. The selling securityholders may also loan
or pledge shares of common stock to broker-dealers that in turn may sell such shares.


 




    	A-1



     


    

  


The selling securityholders
may pledge or grant a security interest in some or all of the Series E Warrants or shares of common stock owned by them and, if
they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of
common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable
provision of the Securities Act amending, if necessary, the list of selling securityholders to include the pledgee, transferee
or other successors in interest as selling securityholders under this prospectus. The selling securityholders also may transfer
and donate the shares of common stock in other circumstances as permitted by the securities purchase agreement, the registration
rights agreement, the Series E Warrants and all applicable law, in which case the transferees, donees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this prospectus.


 


To the extent required
by the Securities Act and the rules and regulations thereunder, the selling securityholders and any broker-dealer participating
in the distribution of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities
Act. In such event, any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be
underwriting commissions or discounts under the Securities Act. Selling securityholders who are deemed to be “underwriters”
under the Securities Act (if any) will be subject to the prospectus delivery requirements of the Securities Act and may be subject
to certain statutory liabilities of, including but not limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5
under the Exchange Act.


 


Each selling securityholder
has informed us that it is not a registered broker-dealer and does not have any written or oral agreement or understanding, directly
or indirectly, with any person to engage in a distribution of the common stock. Upon us being notified in writing by a selling
securityholder that any material arrangement has been entered into with a broker-dealer for the distribution of common stock, a
prospectus supplement, if required, will be distributed, which will set forth the aggregate amount of shares of common stock being
distributed and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions
and other terms constituting compensation from the selling securityholders and any discounts, commissions or concessions allowed
or re-allowed or paid to broker-dealers.


 


Under the securities
laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers.
In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified for
sale in such state or an exemption from registration or qualification is available and is complied with.


 


Each selling securityholder
may sell all, some or none of the shares of common stock registered pursuant to the registration statement of which this prospectus
forms a part. If sold under the registration statement of which this prospectus forms a part, the shares of common stock registered
hereunder will be freely tradable in the hands of persons other than our affiliates that acquire such shares.


 


The selling securityholders
and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules
and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may
limit the timing of purchases and sales of any of the shares of common stock by the selling securityholders and any other participating
person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the shares
of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect
the marketability of the shares of common stock and the ability of any person or entity to engage in market-making activities with
respect to the shares of common stock.


 


We have agreed to keep
this prospectus effective until the earlier of (i) the date on which all of the securities registered under the registration statement
of which this prospectus is a part have been sold; and (ii) the twelve month anniversary of the date the registration statement
of which this prospectus is a part is declared effective by the SEC. We have also agreed to pay all expenses of the registration
of the shares of common stock pursuant to the registration rights agreement, estimated to be $[______]
in total, including, without limitation, SEC filing fees and expenses of compliance with state securities or “blue sky”
laws; provided, however, a selling securityholder will pay all underwriting discounts and selling commissions, if any.


 




    	A-2



     


    

  


We have further agreed
to indemnify or provide contribution to the selling securityholders with respect to certain liabilities, including some liabilities
under the Securities Act, in accordance with the registration rights agreements. Each selling securityholder, severally and not
jointly, has agreed to indemnify or provide contribution to us with respect to certain civil liabilities, including liabilities
under the Securities Act, that may arise from any written information furnished to us by the selling securityholder specifically
for use in this prospectus, in accordance with the related registration rights agreements.


 




    	A-3



     


    

  


EXHIBIT B


 


FORM OF JOINDER AGREEMENT


 


This JOINDER (“Joinder”)
to the Registration Rights Agreement by and among Arch Therapeutics, Inc., a Nevada corporation (“Arch”) and
the undersigned Purchasers thereto dated as of May 26, 2016 (the “Registration Rights Agreement”) is made and
entered into as of [______________], 201___
by and between Arch and [Insert name of Assignee], a [Insert
entity type and jurisdiction of formation] (“Investor”). Arch and Investor are sometimes referred to
herein individually as a “Party” and collectively as the “Parties.”


 


WITNESSETH


 


WHEREAS, [Insert
name of Assignor] (“Assignor”), a party to the Registration Rights Agreement, has [contributed][assigned]
its Registrable Securities to Investor pursuant to that certain [insert name of transfer
agreement], dated as of [______________], 201___,
by and among Assignor and Investor; and


 


WHEREAS, Section 7 of the Registration
Rights Agreement permits Assignor to assign its rights under the Registration Rights Agreement to Investor; provided, that,
among other things, Investor executes a joinder agreement pursuant to which it agrees to be bound by all of the provisions contained
in the Registration Rights Agreement.


 


NOW, THEREFORE, in consideration of
the foregoing, the mutual promises contained herein, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties to this Joinder, intending legally to be bound, hereby agree as follows:


 


1.          Definitions.
Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Registration
Rights Agreement


 


2.          Agreement
to be Bound. Investor agrees and acknowledges that upon the execution of this Joinder, Investor shall become bound by and a
party to the Registration Rights Agreement, and shall be fully bound by and subject to, all of the applicable benefits, rights,
restrictions and obligations of the Registration Rights Agreement as though an original party thereto.


 


3.          Effectiveness.
This Joinder shall take effect and shall become part of the Registration Rights Agreement immediately upon the execution hereof.


 


4.          Incorporation
of Registration Rights Agreement Provisions. The provisions contained in Section 8(j) of the Registration Rights Agreement
pertaining to, among other things, governing law, jurisdiction, and waiver of jury trial, are incorporated herein by reference
to the same extent as if reproduced herein in their entirety, and shall govern any dispute arising under or in connection with
this Joinder.


 


5.          Entire
Agreement; Third Party Beneficiaries. This Joinder contains the entire agreement between the Parties with respect to the transactions
contemplated hereby and supersedes all prior agreements, understandings, promises and representations, whether written or oral,
between the Parties with respect to the subject matter hereof and thereof. The covenants and agreements set forth in this Joinder
are for the sole benefit of the Parties and their successors and permitted assigns, and they shall not be construed as conferring
any rights on any other Persons.


 


6.          Headings.
The headings in this Joinder are for the purpose of reference only and shall not limit or otherwise affect the meaning hereof.


 


7.          Counterparts.
This Joinder may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one agreement. Delivery of an executed counterpart of a signature
page of this Joinder by facsimile or other electronic transmission shall be effective as delivery of a manually executed original
counterpart of this Joinder.


 




    	B-1



     


    

  


IN WITNESS WHEREOF,
the parties hereto have caused this Joinder to be executed as of the day and year first above written.


 


	 	ARCH THERAPEUTICS, INC.
	 	 	 
	 	By:	 	 
	 	 	Name:
	 	 	Title:


 


	 	[investor]
	 	 	 
	 	By:	 	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	 	Address:	 
	 	 	 	 
	 	 	 	 
	 	 	Fax Number:	 
	 	 	Email Address:	 




 




    	B-2



     


    

  


EXHIBIT C


 


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:


 




    	C-1