NVUS 2018 Annual Report

Financial Information about Segments

We operate in a single reportable segment in the U.S.

Reverse Merger

2Q 'HFHPEHU 7RNDL 3KDUPDFHXWLFDOV ,QF ³7RNDL´ D 'HODZDUH FRUSRUDWLRQ 2WLF DQG WKH stockholders of 2WLF 3KDUPD /WG ³ Otic ´ HDFK D ³6HOOHU´ DQG FROOHFWLYHO\ WKH ³6HOOHUV´ HQWHUHG LQWR D 6KDUH 3XUFKDVH $JUHHPHQW WKH ³6KDUH 3XUFKDVH $JUHHPHQW´ SXUVXDQW WR ZKLFK DPRQJ RWKHU WKLQJV HDFK 6HOOHU DJUHHG WR VHOO WR 7RNDL DQG 7RNDL DJUHHG to purchase from each Seller, all of WKH FRPPRQ DQG SUHIHUUHG VKDUHV RI 2WLF ³2WLF 6KDUHV´ RZQHG E\ VXFK 6HOOHU LQ exchange for the issuance of a certain number of shares of common stock of Tokai, as determined pursuant to the terms of the 6KDUH 3XUFKDVH $JUHHPHQW WKH ³5HYHUVH 0HUJHU´ 7K e parties amended and restated the Share Purchase Agreement on March 2, 2017. On May 9, 2017, Tokai, Otic, and the Sellers closed the transaction contemplated by the Share Purchase Agreement, and subsequently effected a reverse stock-split of common stock at a ratio of one-for-nine (see Reverse Stock-Split below). On a post- VSOLW EDVLV 7RNDL LVVXHG WR WKH 6HOOHUV DQ DJJUHJDWH RI VKDUHV RI 7RNDL¶V FRPPRQ VWRFN LQ H[FKDQJH IRU 840,115 Otic Shares. Following the completion of the Reverse Merger, the business being conducted by Tokai became primarily the business conducted by Otic. In connection with the Reverse Merger, the name of the surviving corporation was FKDQJHG WR ³1RYXV 7KHUDSHXWLFV ,QF ´ Emerging Growth Company :H TXDOLI\ DV DQ ³HPHUJLQJ JURZWK FRPSDQ\´ DV GHILQHG LQ WKH -XPSVWDUW 2XU %XVLQHVV 6WDUWXSV $FW RI DV amended (JOBS Act). As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. We would cease to be an emerging growth company on the date that is the earliest of: (i) the last day of the fiscal year in which we have total annual gross revenues of $1 billion or more; (ii) December 31, 2020; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC. Corporate Information Otic was founded in the State of Israel in 2008. In 2015, Otic established U.S. operations and moved its corporate headquarters to Irvine, California. In 2017, Otic consummated the Reverse Merger with Tokai Pharmaceuticals, Inc., a Delaware corporation that was incorporated on March 26, 2004 and subsequently changed its name to Novus Therapeutics, Inc. Our executive offices are located at 19900 MacArthur Boulevard, Suite 550, Irvine, California 92612. Our telephone number is (949) 238-8090 and our website is novustherapeutics.com. We do not incorporate the information on or accessible through our website into this Annual Report, and you should not consider any information on, or that can be accessed through, our website as part of this Annual Report on Form 10-K. You are advised to read this Annual Report on Form 10-K in conjunction with other reports and documents that we file from time to time with the Securities and Exchange Commission (SEC). In particular, please read our definitive proxy statement, which will be filed with the SEC in connection with our 2019 annual meeting of stockholders, our quarterly reports on Form 10-Q and any current reports on Form 8-K that we may file from time to time. You may obtain copies of these reports after the date of this annual report directly from us or from the SEC at its website at www.sec.gov. We make our periodic and current reports available on our internet website, free of charge, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. Item 1A. Risk Factors. You should carefully consider the following risk factors, as well as the other information in this Annual Report on Form 10-K, and in our other public filings. The occurrence of any of these risks could harm our business, financial condition, results of operations and/or growth prospects or cause our actual results to differ materially from those contained in forward-looking statements we have made in this report and those we may make from time to time. You should consider all of the risk factors described in our public filings when evaluating our business.

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