Item 3.02 Unregistered Sales of Equity Securities.
On February 13, 2020, Novus Therapeutics, Inc. (the "Company") entered into an
exchange agreement (the "Exchange Agreement") with Biotechnology Value Fund,
L.P., Biotechnology Value Fund II, L.P. and Biotechnology Value Trading Fund OS,
L.P. (the "Exchanging Stockholders"), pursuant to which the Exchanging
Stockholders exchanged (the "Exchange") 3,796,000 shares of the Company's common
stock, par value $0.001 per share (the "Common Stock"), for 3,796 shares of
newly designated Series X Convertible Preferred Stock (the "Series X Preferred
Stock"). The Company agreed to reimburse the Exchanging Stockholders for their
expenses in connection with the Exchange up to a total of $25,000.
On February 13, 2020, in connection with the Exchange, the Company filed a
Certificate of Designation (the "CoD") setting forth the preferences, rights and
limitations of the Series X Preferred Stock with the Secretary of State of the
State of Delaware. Each share of Series X Preferred Stock will be convertible
into 1,000 shares of Common Stock at the option of the holder at any time;
subject to certain limitations, including, that the holder will be prohibited
from converting Series X Preferred Stock into Common Stock if, as a result of
such conversion, the holder, together with its affiliates, would beneficially
own a number of shares of Common Stock above a conversion blocker, which is
initially set at 9.99% of the total Common Stock then issued and outstanding
immediately following the conversion of such shares of Series X Preferred Stock.
In the event of the Company's liquidation, dissolution or winding up, holders of
Series X Preferred Stock will participate pari passu with any distribution of
proceeds to holders of Common Stock. Holders of Series X Preferred Stock are
entitled to receive dividends on shares of Series X Preferred Stock equal (on an
as-if-converted-to-CommonStock basis) to and in the same form as dividends
actually paid on the Common Stock or other junior securities of the Company.
Shares of Series X Preferred Stock will generally have no voting rights, except
as required by law and except that the consent of a majority of the holders of
the outstanding Series X Preferred Stock will be required to amend the terms of
the Series X Preferred Stock.
The Series X Preferred Stock was issued without registration under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance on the
exemption from registration contained in Section 3(a)(9) of the Securities Act.
The Exchange will be completed on or about February 19, 2020. Following the
Exchange, the Company will have 16,069,562 shares of Common Stock outstanding
and 3,796 shares of Series X Preferred Stock outstanding, which are convertible
into 3,796,000 shares of Common Stock.
The foregoing description of the Exchange Agreement is not complete and is
qualified in its entirety by references to the full text of the Exchange
Agreement, which is filed as an exhibit to this Report and is incorporated by
reference herein. A summary of the rights, preferences and privileges of the
Series X Preferred Stock described above does not purport to be complete and is
qualified in its entirety by reference to the CoD, which is filed as an exhibit
to this Report and is incorporated by reference herein.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
The information contained above in Item 3.02 of this Report regarding the Series
X Preferred Stock is incorporated by reference into this Item 5.03.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
3.1 Certificate of Designations of Series X Convertible Preferred Stock
10.1 Exchange Agreement, dated February 13, 2020, by and among Novus
Therapeutics, Inc. and the Stockholders named therein
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NOVUS THERAPEUTICS, INC. 
