Consistent with Long-Term Strategic Plan to Increase Capital Market Visibility and Enhance Access to Growth Capital
FRAMINGHAM, Mass., Sept. 16, 2022 (GLOBE NEWSWIRE) -- Arch Therapeutics, Inc. (OTCQB: ARTH) (“Arch” or the “Company”), a marketer and developer of novel self-assembling wound care and biosurgical products, today provided an update regarding its intent to list its common stock on a national exchange (the “Uplisting”) by the end of 2022 or early 2023. Management believes the Uplisting will provide several key strategic benefits that will serve the best interests of all shareholders at a time when the Company is poised for growth. The move to a national exchange should improve capital market access for existing and prospective new investors, as well as enhance the Company’s ability and plan to raise the necessary capital to drive growth. Although no assurance can be given, the Uplisting must be completed on or before February 15, 2023, to ensure compliance with the terms of the recently issued Senior Secured Convertible Notes (the “Notes”). The listing requirements necessary to consummate the Uplisting include the following:
Concurrent Equity Financing to Strengthen the Balance Sheet. The Company must have sufficient cash to support operations for at least one year and meet the minimum stockholders’ equity requirement as a condition to consummate the Uplisting. The Company intends to raise the required capital concurrent with the Uplisting, which will significantly improve the strength of the Company’s balance sheet and support the Company’s continued efforts to commercialize its first FDA-approved product, AC5® Advanced Wound System (“AC5”).
Reverse Stock Split & Authorized Share Increase. Stockholders are being asked to approve a reverse stock split of the Company’s issued and outstanding common stock, as well as an increase in the authorized capital, at the Company’s annual meeting to be held on September 29, 2022. The reverse split is being proposed to address the minimum bid price requirement necessary for listing on a national exchange, in addition to the other requirements necessary to consummate the Uplisting.
Reduction of Outstanding Debt; Debt-Free Balance Sheet by the end of 2023. The Company anticipates that the recently issued Notes will either be re-paid or converted into common equity in connection with the Uplisting, after which the only remaining debt will be the previously issued Series 1 and Series 2 Convertible Notes (the “Series 1 Notes” and “Series 2 Notes”). The Company intends to force convert the remaining Series 1 Notes and Series 2 Notes into common stock, per their existing terms, in June 2023 and November 2023, respectively, leaving the Company debt-free with an all-equity balance sheet.
“This is an exciting and critically important time at the Company. I believe Arch is ideally positioned to accelerate revenue opportunities on multiple fronts as we continue to pursue near-term reimbursement options for AC5 as a synthetic skin substitute. The Uplisting is a key element of the overall growth strategy that we believe will favorably impact our capital markets visibility and liquidity, thereby benefitting all stockholders,” stated Michael Abrams, Chief Financial Officer of Arch Therapeutics.
About Arch Therapeutics, Inc. Arch Therapeutics, Inc. is a biotechnology company with a novel approach to stop bleeding (hemostasis), control leaking (sealant) and manage wounds during surgery, trauma, and interventional care. Arch is developing wound care and biosurgical products based on an innovative self-assembling peptide technology platform with the goal of improving healing outcomes for patients. Arch has received regulatory clearance to market AC5® Advanced Wound System in the United States and AC5® Topical Hemostat in Europe. Arch's development stage product pipeline includes AC5-GTM for endoscopic resection of gastrointestinal tumors, AC5-V® for hemostasis during vascular surgery and AC5 Surgical Hemostat for general surgical hemostasis, among others.1,2
Notice Regarding Forward-Looking Statements This news release contains “forward-looking statements” as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this press release that are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations, or intentions regarding the future. Such forward-looking statements include, among other things, references to novel technologies and methods, our ability to recruit additional field sales representatives and their effectiveness, our business and product development plans and projections, or market information. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with developing new products or technologies and operating as a development stage company, our ability to retain important members of our management team and attract other qualified personnel, our ability to raise the additional funding we will need to continue to pursue our business and product development plans, our ability to obtain required regulatory approvals, our ability to produce commercial quantities of our products within projected timeframes, our ability to obtain the inclusion of our AC5® Advanced Wound System on targeted federal supply schedules, our ability to develop and commercialize products based on our technology platform, and market conditions, and our ability to establish additional commercialization partnerships and build a critical mass of field sales representatives. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations, and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations, or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in the reports and other documents we file with the SEC, available at www.sec.gov.
Michael Abrams Chief Financial Officer Arch Therapeutics, Inc. Phone: 617.431.2333 Email: mabrams@archtherapeutics.com
1 AC5-G, AC5-V, and AC5 Surgical Hemostat are currently investigational devices limited by law to investigational use. 2 AC5, AC5-G, AC5-V and associated logos are trademarks and/or registered trademarks of Arch Therapeutics, Inc. and/or its subsidiaries.
