Exhibit 10.20


 


SECURITIES TRANSFER AGREEMENT


 


This Securities Transfer
Agreement (this “Agreement”) is made as of the 28th day of February, 2014, by and among Arch Therapeutics,
Inc. (the “Company”) (solely with respect to Section 2), Punit Dhillon (“Recipient”) and 0903746 B.C. Ltd.
(“Transferor”).


 


RECITALS


 


A.           WHEREAS,
Transferor is the holder of record of (i) Seven Hundred Thousand (700,000) shares (the “Shares”) of the common stock,
$0.001 par value per share (the “Common Stock”), of the Company, (ii) a Series A Warrant numbered W-2014-A-06 to acquire
up to Seven Hundred Thousand (700,000) shares of Common Stock (the “Series A Warrant”); (iii) a Series B Warrant numbered
W-2014-B-06 to acquire up to Seven Hundred Thousand (700,000) shares of Common Stock (the “Series B Warrant”), and
(iii) a Series C Warrant numbered W-2014-C-06 to acquire up to Seven Hundred Thousand (700,000) shares of Common Stock (the “Series
C Warrant”, and together with the Shares, the Series A Warrant and the Series B Warrant, the “Transferred Securities”);


 


B.           WHEREAS,
Transferor desires to transfer, in exchange for an aggregate of US$175,000 (the “Purchase Price”) all of the Transferred
Securities to Recipient, subject and pursuant to the terms of this Agreement; and


 


C.           WHEREAS,
pursuant to the terms of that certain Securities Purchase Agreement, dated as of January 30, 2014 (the “Securities Purchase
Agreement”), by and among the Company, Transferor and certain other parties thereto, and that certain Registration Rights
Agreement, dated as of February 4, 2014 (the “Registration Rights Agreement”), by and among the Company, Transferor
and certain other parties thereto, the Transferred Securities and the holder thereof are afforded certain rights and are subject
to certain obligations and restrictions as set forth therein.


 


NOW, THEREFORE, for
good and valuable consideration, the receipt of which is hereby acknowledged, Recipient and Transferor agree as follows:


 


AGREEMENT


 


1.           Securities
Transfer.


 


(a)          The
Transfer of the Transferred Securities. At the Closing (as defined Section 1(b) below and subject to and upon the terms
and conditions of this Agreement), Transferor shall transfer to Recipient the Transferred Securities, and Recipient agrees to hold
the Transferred Securities in accordance with the terms and conditions of this Agreement.


 


(b)          Closing;
Closing Date. The transfer of the Transferred Securities shall occur at a “Closing” which shall be deemed to be
held simultaneously with Recipient’s delivery to Transferor of the Purchase Price, by way of wire transfer or other delivery
mechanism mutually agreed upon by the Transferor and Recipient (the “Closing Date”). As soon as practicable after the
Closing, Transferor shall deliver to the Company, or shall cause to be delivered to the Company, the share certificate or certificates
representing the Shares and the originally signed version of each of the Series A Warrant, the Series B Warrant and the Series
C Warrant, and, thereafter, the Company shall deliver to Recipient a share certificate representing the Shares and a replacement
of the Series A Warrant, Series B Warrant and Series C Warrant, in each case registered in Recipient’s name.


 




    	 



    	 



    

 


 


2.           Joinder
to the Securities Purchase Agreement and the Registration Rights Agreement. By executing this Agreement, Recipient is made
party to and agrees that, as of the Closing, it and the Transferred Securities are bound by, afforded all of the rights and privileges
granted under, and subject to the continuing obligations and duties imposed by each of the Securities Purchase Agreement and the
Registration Rights Agreement.


 


3.           Legends.
All certificates representing (a) any of the Shares, (b) the replacement Series A Warrant, Series B Warrant and Series
C Warrant, and (c) any of the shares of Common Stock issuable upon exercise of any of the replacement Series A Warrant, Series
B Warrant and Series C Warrant shall, except as provided in the Securities Purchase Agreement, have endorsed thereon substantially
the following legends:


 


(a)          “NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE
OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF
COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.”


 


(b)          Any
legend required under applicable state securities laws.


 


4.           Representations
and Warranties of Transferor.


 


(a)          Ownership
and Title. Transferor owns and holds good and valid title to the Transferred Securities,
free and clear of any liens, claims, encumbrances, security interests or contractual restrictions other than those set forth in
the Securities Purchase Agreement and Registration Rights Agreement.


 


(b)          Authorization.
Transferor has the full and unrestricted right, power, capacity and authority (i) to execute and deliver this Agreement, (ii)
to transfer good and valid title to the Transferred Securities free and clear of any liens, claims, encumbrances, security interests
or contractual restrictions other than those set forth in the Securities Purchase Agreement and Registration Rights Agreement,
and (iii) to deliver the Transferred Securities to Recipient.


 


(c)          Original
Purchase Intent of Transferor. Transferor represents and warrants that he originally acquired the Transferred Securities for
investment purposes for its own account only and not with a view to or for sale in connection with any distribution of all or any
part of the Transferred Securities.


 


5.           Representations
and Warranties of Recipient. In accepting the Transferred Securities, Recipient (a) makes to the Company and Transferor the
representations and warranties set forth in Section 2 of the Securities Purchase Agreement as if it were a Buyer thereunder, and
(b) represents and warrants to the Company that the information set forth in Exhibit B to the Registration Rights Agreement (as
amended pursuant to this Agreement) is, as of the date hereof, accurate and complete with respect to him; provided that
the reference to Transferor in the table and related footnotes under the heading “Selling Securityholders” therein
shall be deleted in their entirety and replaced with the following information about Recipient:


 


 




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	Name of Selling Securityholder	 	Number of
 Shares of
 Outstanding
 Common Stock
 Beneficially
 Owned Prior to
 this Offering	 	 	Maximum
 Number of 
 Shares of
 Common Stock to
 be Sold Pursuant
 to this Prospectus	 	 	Number of
 Shares of
 Common Stock
 Owned After
 Offering	 	 	Percentage of
 Shares of
 Common
 Stock
 Beneficially
 Owned After
 Offering	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Punit Dhillon	 	 	3,550,000	 	 	 	2,800,000	 	 	 	750,000	 	 	 	*	 



 


6.           Miscellaneous.


 


(a)          Further
Assurances. The parties agree to execute such further instruments and to take such further action as may reasonably be necessary
to carry out the intent of this Agreement.


 


(b)          Entire
Agreement. This Agreement, the Securities Purchase Agreement and the Registration Rights Agreement, including any exhibits
hereto and thereto, is the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior oral
and written understandings of the parties.


 


(c)          Notices.
Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery
or upon deposit in the United States Post Office, by registered or certified mail with postage and fees prepaid, addressed to Transferor
or Recipient at their respective addresses shown on the Company’s records and to the Company at the address of its principal
corporate offices (attention: President) or at such other address as such party may designate by ten (10) days’ advance written
notice to the other party hereto. If either Transferor or Recipient have failed to designate an address on the signature page of
this Agreement, Transferor’s or Recipient’s address for purposes of this Section 6(c) may be their last known
address or, if none, General Delivery, Postmaster, of the last known city and state of their residence.


 


(d)          Assignment
of Rights; Binding Upon Successors. The Company may assign its rights and delegate its duties under this Agreement. This Agreement
shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer herein set
forth, be binding upon the parties, their heirs, executors, administrators, successors and assigns.


 


(e)          Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard
for its conflict of law principles.


 


(f)          Severability.
In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable
or void, this Agreement shall continue in full force and effect without said provision.


 


(g)          Amendments
and Waivers. Neither this instrument nor any provision thereof may be waived, modified, discharged or terminated except by
an instrument in writing signed by Recipient, Transferor and the Company.


 




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(h)          Counterparts.
This Agreement may be executed in counterparts, each of which shall be enforceable against the party actually executing such counterpart,
and which together shall constitute one instrument.


 


Signature page follows


 


 




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IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the day and year first written above.


 


	RECIPIENT	 	TRANSFEROR
	 	 	0903746 B.C. LTD 
	 	 	 
	/s/ Punit Dhillon	 	/s/ Maheep Dhillon
	Punit Dhillon	 	Maheep Dhillon
	 	 	 	Managing Member
	 	 	 	 	 
	Address:	11220 Corte Belleza	 	Address:	1885 E. 36th Ave.
	 	San Diego, CA 92130	 	 	Vancouver, B.C. V5P 1C7
	 	 	 	 	 


 


	Solely with respect to Section 2 hereof:	 	 
	 	 	 
	ARCH THERAPEUTICS, INC.,	 	 
	a Nevada corporation	 	 
	 	 	 
	/s/ Terrence W. Norchi	 	 
	Terrence W. Norchi, President and CEO	 	 
	 	 	 	 	 
	Address:	20 William Street, Suite 270	 	 	 
	 	Wellesley, Massachusetts 02481	 	 	 


 




    	 



    	 



    

 


ASSIGNMENT SEPARATE FROM CERTIFICATE


 


FOR VALUE RECEIVED,
0903746 B.C. Ltd. hereby transfers unto Punit Dhillon, Seven Hundred Thousand (700,000) shares of Common Stock of Arch Therapeutics,
Inc., a Nevada corporation (the “Company”), represented by Certificate No. 257, standing in its name on the books
of the Company, and does hereby irrevocably constitute and appoint the Company”s transfer agent, Empire Stock Transfer Inc.,
to transfer said stock in the books of the Company with full power of substitution.


 


Date: February 28, 2014






	 	0903746 B.C. Ltd.
	 	 
	 	/s/ Maheep Dhillon
	 	Maheep Dhillon
	 	Managing Member