Notice to Series B Warrant Holders, Dated April 5, 2013

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April 5, 2013

Dear Series B Warrant holder:

The outstanding Series B Warrants (the “Warrants”) of Ohr Pharmaceutical Inc. (formerly known as BBM Holdings Inc., “we” or the “Company”) will expire in accordance with their terms on April 30, 2013 (the “Warrant Expiration Date”).  The Warrants were issued pursuant to the Warrant Agreement (as amended, the “Warrant Agreement”), dated October 31, 2006, between the Company and Transfer Online, Inc., as Warrant Agent (the “Warrant Agent”).  In accordance with the Warrant Agreement, the Warrant Expiration Date of the Warrants may be accelerated at the option of the Company following a period of 5 consecutive trading days where the market price per share (as defined in the Warrant Agreement) of the Company’s Common Stock exceeds $1.50.

In order to encourage exercise of the Warrants to raise additional capital to execute on our business and clinical trial initiatives and increase our shareholder equity (one of the requirements necessary for our proposed uplisting to Nasdaq), the Company hereby offers (the “Incentive Offer”) to provide to those Warrant holders that exercise at least 33% of their Warrants the revised terms for their remaining Warrants set forth below, including for such remaining Warrants a $2.25 per share exercise price, cashless exercise, acceleration of the New Warrant Expiration Date at the discretion of the Company when the market price per share is $4.50 or above, and an extension of the Warrant Expiration Date until September 30, 2014.

The Company has elected to accelerate the Warrant Expiration Date to April 18, 2013, and has sent out notice of such acceleration via the Warrant Agent in accordance with the Warrant Agreement to all holders of Warrants.

Warrants can be exercised by delivery of (i) the Warrants, with Form of Subscription attached hereto completed and signed, and (ii) payment in full by check or wire of the aggregate exercise price to the Company at 489 5th Avenue, 28th Floor, New York NY 10017, prior to their expiration on April 18, 2013. The current exercise price for Class B Warrants is $1.1911787. The exercise price is a substantial discount to the last closing price of $1.58 preceding the date of this notice. The Warrants not exercised by the close of business on April 18, 2013, shall expire unless extended by the Company in accordance with the Incentive Offer described below.

As an inducement to holders to exercise their Warrants, the Company hereby agrees to the following Incentive Offer: any Warrant holder that is an accredited investor and exercises at least 33% of such holder’s aggregate beneficial ownership (as defined under the rules of the Securities and Exchange Commission (the “SEC”)) of Warrants shall receive an extension of such holder’s remaining Warrants (post-exercise) on the following terms:

·	The exercise price will be raised to $2.25 per share.

·	The Warrant Expiration Date will be extended to September 30, 2014 (the “New Warrant Expiration Date”).

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The Company, at its sole discretion, may accelerate the New Warrant Expiration Date when the Market Price per share of the Company’s Common Stock is $4.50 or above. “Market Price per share” shall mean the average closing prices of the Company’s Common Stock for 5 consecutive trading days ending no later than the 5th day prior to the giving of notice of acceleration of the New Warrant Expiration Date.

·	In addition to the option to exercise for cash consideration, these Warrants, as extended, can be exercised via a net exercise/cashless exercise provision.

As an example for illustration purposes only, if you beneficially own 10,000 Warrants, and you exercise 6,000 Warrants, you must deliver 6,000 of your Warrants to the Company with the attached Form of Subscription filled out and signed and with payment of $7,147.13 ($1.1911787 times 6,000 and rounded up to the nearest penny), and the Company will deliver to you 6,000 shares of Company Common Stock (with a restrictive legend as described in the Warrant).  Your remaining 4,000 Warrants will be extended on the terms set forth in the Incentive Offer above.

If you do not exercise at least 33% of your beneficially owned Warrants, all unexercised Warrants will expire on April 18, 2013.

You do not have to accept the Incentive Offer, and you continue to have the right to exercise all of your Series B Warrants until April 18, 2013.

Please contact me ***@***, tel ###-###-####) if you have any questions concerning expiration of the Warrants and this Incentive Offer.

Very truly yours,

Sam Backenroth

Chief Financial Officer

Ohr Pharmaceutical Inc

489 5th Avenue, 28th Floor

New York, NY 10017

FORM OF SUBSCRIPTION

 

(To be signed only upon exercise of Warrant)

 

 

To: OHR PHARMACEUTICAL, INC. (“OHR”):

 

The undersigned, the Holder of the within Warrant, hereby irrevocably elects to exercise (in accordance with the terms of the Warrant as modified by OHR’s Incentive Offer, dated April 4, 2013, the purchase right represented by such Warrant for, and to purchase thereunder,

 

_______ shares of Common Stock of OHR PHARMACEUTICAL, INC., and herewith makes payment therefor of $_____________________, 

 

and requests that the certificates for such shares be issued in the name of, and delivered to, ___________________, whose address is _______________________ And whose social security number or tax identification number is __________________.

 

The undersigned represents that the undersigned is (a) an accredited investor (as defined in the rules of the Securities and Exchange Commission) and (b) acquiring such securities for its own account for investment and not with a view to or for sale in connection with any distribution thereof (except for any resale pursuant to, and in accordance with a valid registration statement effective under the Securities Act of 1933).

 

Dated: April __, 2013

 

 

		(Signature must conform in all respects to name of Holder as specified on the face of the Warrant)