The information in this preliminary proxy statement/prospectus is not complete and may be changed. These securities may not be issued until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY PROXY STATEMENT/PROSPECTUS
SUBJECT TO COMPLETION, DATED NOVEMBER 12, 2019

Dear Stockholders of KBL Merger Corp. IV:

You are cordially invited to attend the special meeting (the “special meeting”) of stockholders of KBL Merger Corp. IV (“KBL,” “we,” “our” or “us”). At the special meeting, KBL stockholders will be asked to consider and vote on proposals to:

(1)    approve and adopt the Business Combination Agreement, dated as of July 25, 2019 (as the same may be amended, the “Business Combination Agreement”), by and among KBL, KBL Merger Sub, Inc. (“KBL Merger Sub”), CannBioRx Life Sciences Corp. (“CannBioRx”), Katexco Pharmaceuticals Corp., (“Katexco”), CannBioRex Pharmaceuticals Corp. (“CBR Pharma”), 180 Therapeutics L.P., (“180” and together with Katexco and CBR Pharma, the “CannBioRx Subsidiaries” and, together with CannBioRx, the “CannBioRx Parties”), and Lawrence Pemble, in his capacity as representative of the stockholders of the CannBioRx Parties (the “Stockholder Representative”), pursuant to which KBL Merger Sub will merge with and into CannBioRx with CannBioRx surviving the merger and continuing as a wholly-owned subsidiary of KBL, and in consideration thereof, the stockholders of CannBioRx shall receive shares of KBL’s common stock, par value $0.0001 per share (“KBL Common Stock”) and the existing exchangeable shares (collectively, the “Exchangeable Shares”) of CannBioRex Purchaseco ULC and/or Katexco Purchaseco ULC, Canadian subsidiaries of CannBioRx, shall be adjusted in accordance with the share provisions in the articles of CannBioRex Purchaseco ULC or Katexco Purchaseco ULC, as applicable, governing the Exchangeable Shares such that they are multiplied by the Exchange Ratio and become exchangeable into shares of KBL Common Stock. The Exchangeable Shares will entitle the holders to dividends and other rights that are substantially economically equivalent to those of holders of KBL Common Stock, and holders of Exchangeable Shares will have the right, through the applicable Voting and Exchange Agreement, to vote at meetings of KBL stockholders. Such acquisition and the other transactions contemplated by the Business Combination Agreement (the “business combination”) is referred to as the “Business Combination Proposal”;

(2)    approve and adopt amendments to KBL’s amended and restated certificate of incorporation (the “Charter”) to create two new classes of capital stock designated as Class C Special Voting Share and Class K Special Voting Share of KBL that will entitle the holder thereof to an aggregate number of votes, on any particular matter, proposition or question, equal to the number of Exchangeable Shares of each of CannBioRex Purchaseco ULC and Katexco Purchaseco ULC, respectively, that are outstanding from time to time (the “Special Voting Shares” and such proposal, the “Special Voting Shares Charter Proposal”);

(3)    approve and adopt an amendment to the Charter to increase the number of authorized shares of KBL Common Stock, from 35,000,000 shares to 100,000,000 shares (the “Authorized KBL Common Stock Charter Proposal”);

(4)    approve and adopt an amendment to the Charter to increase the number of authorized shares of KBL’s preferred stock, par value $0.0001 per share (the “KBL Preferred Stock”), from 1,000,000 shares to 5,000,000 shares (the “Authorized KBL Preferred Stock Charter Proposal”);

(5)    approve and adopt an amendment to the Charter to change the name of “KBL Merger Corp. IV” to “CannBioRx Life Sciences Corp.” (the “Name Change Proposal”);

(6)    approve and adopt amendments to the Charter eliminating provisions in the Charter relating to our initial business combination that will no longer be applicable to us following the closing of the business combination (the “Closing”) (the “Additional Charter Proposal” and, together with the Special Voting Shares Charter Proposal, the Authorized KBL Common Stock Charter Proposal, the Authorized KBL Preferred Stock Charter Proposal and the Name Change Proposal, the “Charter Proposals”);

(7)    approve, for purposes of complying with applicable listing rules of The Nasdaq Capital Market (“Nasdaq”): (a) the issuance of up to 14,521,710 shares of KBL Common Stock in connection with the Closing; and (b) the future issuance of up to 2,978,290 shares of KBL Common Stock to holders of Exchangeable Shares in connection with any exchange of their Exchangeable Shares of each of CannBioRex Purchaseco ULC and Katexco Purchaseco ULC (the “Nasdaq Proposal”);

(8)    approve and adopt the CannBioRx Life Sciences Corp. 2019 Omnibus Incentive Plan (the “OIP”) and material terms thereunder (the “OIP Proposal”); and

(9)    approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Charter Proposals, the Nasdaq Proposal or the OIP Proposal (the “Adjournment Proposal” and, together with the Business Combination Proposal, the Charter Proposals and the Nasdaq Proposal, the “Transaction Proposals” and, together with the OIP Proposal, the “Proposals”).

Each of the Proposals is more fully described in the accompanying proxy statement/prospectus, which each KBL stockholder is encouraged to review carefully.

We refer to (a) the business combination and (b) the redemption, if any, by KBL of shares of KBL Common Stock held by any public stockholders (as defined below) in connection with the business combination, collectively, as the “Transactions.”

KBL’s Common Stock, rights and warrants, which are exercisable for shares of KBL Common Stock under certain circumstances, are currently listed on Nasdaq under the symbols “KBLM,” “KBLMR” and “KBLMW,” respectively. Certain of our shares of KBL Common Stock and warrants currently trade as units consisting of one share of KBL Common Stock and one-half of one warrant, and are listed on Nasdaq under the symbol “KBLMU.” The units will automatically separate into the component securities upon the Closing and, as a result, will no longer trade as a separate security. Upon the Closing, we intend to change our name from “KBL Merger Corp. IV” to “CannBioRx Life Sciences Corp.,” and we have applied to continue the listing of our KBL Common Stock and warrants on Nasdaq under the symbols “CBRX” and “CBRXW,” respectively.

Pursuant to our Charter, we are providing the holders of shares of KBL Common Stock originally sold as part of the units issued in our IPO, which closed on June 7, 2017 (the “IPO” and such holders, the “public stockholders”), with the opportunity to redeem, upon the Closing, shares of KBL Common Stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the trust account (the “Trust Account”) that holds the proceeds (including interest but net of franchise and income taxes payable) from the IPO and a concurrent private placement of units to KBL IV Sponsor LLC (the “Sponsor”) and subsequent loans from the Sponsor of $0.0225 for each public share per calendar month commencing on June 7, 2019 in connection with a previous amendment to our Charter to extend the period of time to consummate a business combination. For illustrative purposes, based on the fair value of marketable securities currently held in the Trust Account as of November 6, 2019 of approximately $50.9 million, the estimated per share redemption price will be approximately $10.61. Public stockholders may elect to redeem their shares even if they vote for the Business Combination Proposal. A public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), will be restricted from seeking redemption with respect to more than an aggregate of 15% of the outstanding shares of KBL Common Stock sold in the IPO without the prior consent of KBL. Holders of KBL’s outstanding warrants sold in the IPO, which are exercisable for shares of KBL Common Stock under certain circumstances, do not have redemption rights in connection with the business combination. Our Sponsor, officers and directors have agreed to waive their redemption rights in connection with the Business Combination Proposal with respect to any shares of KBL Common Stock they may hold, and the founder shares will be excluded from the pro rata calculation used to determine the per share redemption price. Currently, our Sponsor, officers and directors own approximately 39.8% of the outstanding shares of KBL Common Stock, including all of the founder shares (which includes the founder shares to be transferred to Tyche upon Closing, as described herein). Our Sponsor, officers and directors have agreed to vote any shares of KBL Common Stock owned by them in favor of each of the Transaction Proposals.

KBL is providing this proxy statement/prospectus and accompanying proxy card to its stockholders in connection with the solicitation of proxies to be voted at the special meeting and any adjournments or postponements of the special meeting. Your vote is very important. Whether or not you plan to attend the special meeting in person, please submit your proxy card without delay.

We encourage you to read this proxy statement/prospectus carefully. In particular, you should review the matters discussed under the caption “Risk Factors” beginning on page 37 of this proxy statement/prospectus.

KBL’s board of directors recommends that KBL stockholders vote FOR each of the Proposals. When you consider the recommendation of KBL’s board of directors in favor of each of the Transaction Proposals, you should keep in mind that certain of KBL’s directors and officers have interests in the business combination that may conflict with your interests as a stockholder. See the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain Persons in the Business Combination.”

Approval of the Business Combination Proposal, the Nasdaq Proposal, the OIP Proposal and the Adjournment Proposal requires the affirmative vote (in person or by proxy) of the holders of a majority of the shares of KBL Common Stock entitled to vote and actually cast thereon at the special meeting. Approval of each of the Charter Proposals requires the affirmative vote (in person or by proxy) of the holders of a majority of the outstanding shares of KBL Common Stock entitled to vote thereon at the special meeting.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the Proposals presented at the special meeting. If you fail to return your proxy card or fail to submit your proxy by telephone or over the Internet, or fail to instruct your bank, broker or other nominee how to vote, and do not attend the special meeting in person, the effect will be that your shares of KBL Common Stock will not be counted for purposes of determining whether a quorum is present at the special meeting and, if a quorum is present, will have no effect on the Business Combination Proposal, the Nasdaq Proposal, the OIP Proposal or the Adjournment Proposal, but will have the same effect as a vote AGAINST each of the Charter Proposals. If you are a stockholder of record and you attend the special meeting and wish to vote in person, you may withdraw your proxy and vote in person.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST ELECT TO HAVE KBL REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO KBL’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

Thank you for your consideration of these matters.

Sincerely,

/s/ Marlene Krauss, M.D.

Marlene Krauss, M.D.
Chief Executive Officer
KBL Merger Corp. IV

Whether or not you plan to attend the special meeting, please submit your proxy by completing, signing, dating and mailing the enclosed proxy card in the pre-addressed postage paid envelope or by using the telephone or Internet procedures provided to you by your broker or bank. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting and vote in person, you must obtain a proxy from your broker or bank.

Neither the Securities and Exchange Commission nor any state securities commission has passed upon the adequacy or accuracy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus is dated _________, 2019 and is first being mailed to KBL stockholders on or about ___________, 2019.

KBL MERGER CORP. IV
527 Stanton Christian Road
Newark, DE 19713

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
OF KBL MERGER CORP. IV

To Be Held On __________, 2019

To the Stockholders of KBL Merger Corp. IV:

NOTICE IS HEREBY GIVEN that the special meeting (the “special meeting”) of stockholders of KBL Merger Corp. IV (“KBL,” “we,” “our” or “us”) will be held at 10:00 a.m., local time, on __________, 2019, at ________________________ for the following purposes:

(1)    The Business Combination Proposal — To consider and vote upon a proposal to approve and adopt the Business Combination Agreement, dated as of July 25, 2019 (as the same may be amended, the “Business Combination Agreement”), by and among KBL, KBL Merger Sub, Inc. (“KBL Merger Sub”), CannBioRx Life Sciences Corp. (“CannBioRx”), Katexco Pharmaceuticals Corp., (“Katexco”), CannBioRex Pharmaceuticals Corp. (“CBR Pharma”), 180 Therapeutics L.P., (“180” and together with Katexco and CBR Pharma, the “CannBioRx Subsidiaries” and, together with CannBioRx, the “CannBioRx Parties”), and Lawrence Pemble, in his capacity as representative of the stockholders of the CannBioRx Parties (the “Stockholder Representative”), pursuant to which KBL Merger Sub will merge with and into CannBioRx with CannBioRx surviving the merger and continuing as a wholly-owned subsidiary of KBL, and in consideration thereof, the stockholders of CannBioRx shall receive shares of KBL’s common stock, par value $0.0001 per share (“KBL Common Stock”) and the existing exchangeable shares (collectively, the “Exchangeable Shares”) of CannBioRex Purchaseco ULC and/or Katexco Purchaseco ULC, Canadian subsidiaries of CannBioRx, shall be adjusted in accordance with the provisions in the articles of CannBioRex Purchaseco ULC or Katexco Purchaseco ULC, as applicable, governing the Exchangeable Shares such that they are multiplied by the Exchange Ratio and become exchangeable into shares of KBL Common Stock. The Exchangeable Shares will entitle the holders to dividends and other rights that are substantially economically equivalent to those of holders of KBL Common Stock, and holders of Exchangeable Shares will have the right, through the applicable Voting and Exchange Agreement, to vote at meetings of KBL stockholders. Such acquisition and the other transactions contemplated by the Business Combination Agreement (the “business combination”) is referred to as the “Business Combination Proposal.” A copy of the Business Combination Agreement is attached to the accompanying proxy statement/prospectus as Annex A.

(2)    The Special Voting Shares Charter Proposal — To consider and act upon a proposal to approve and adopt amendments to KBL’s amended and restated certificate of incorporation (the “Charter”) to create two new classes of capital stock designated as Class C Special Voting Share and Class K Special Voting Share of KBL that will entitle the holder thereof to an aggregate number of votes, on any particular matter, proposition or question, equal to the number of Exchangeable Shares of each of CannBioRex Purchaseco ULC and Katexco Purchaseco ULC, respectively, that are outstanding from time to time (the “Special Voting Shares” and such proposal, the “Special Voting Shares Charter Proposal”). A copy of our second amended and restated certificate of incorporation (the “Second A&R Charter”) reflecting the proposed amendments pursuant to the Special Voting Shares Charter Proposal is attached to the accompanying proxy statement/prospectus as Annex B.

(3)    The Authorized KBL Common Stock Charter Proposal — To consider and act upon a proposal to approve and adopt an amendment to the Charter to increase the number of authorized shares of KBL Common Stock, from 35,000,000 shares to 100,000,000 shares (the “Authorized KBL Common Stock Charter Proposal”). A copy of the Second A&R Charter reflecting the proposed amendment pursuant to the Authorized KBL Common Stock Charter Proposal is attached to the accompanying proxy statement/prospectus as Annex B.

(4)    The Authorized KBL Preferred Stock Charter Proposal — To consider and act upon a proposal to approve and adopt an amendment to the Charter to increase the number of authorized shares of KBL’s preferred stock, par value $0.0001 per share (the “KBL Preferred Stock”), from 1,000,000 shares to

5,000,000 shares (the “Authorized KBL Preferred Stock Charter Proposal”). A copy of the Second A&R Charter reflecting the proposed amendment pursuant to the Authorized KBL Preferred Stock Charter Proposal is attached to the accompanying proxy statement/prospectus as Annex B.

(5)    The Name Change Proposal — To consider and act upon a proposal to approve and adopt an amendment to the Charter to change the name of “KBL Merger Corp. IV” to “CannBioRx Life Sciences Corp.” (the “Name Change Proposal”). A copy of the Second A&R Charter reflecting the proposed amendment pursuant to the Name Change Proposal is attached to the accompanying proxy statement/prospectus as Annex B.

(6)    The Additional Charter Proposal — To consider and act upon a proposal to approve and adopt amendments to the Charter eliminating provisions in the Charter relating to our initial business combination that will no longer be applicable to us following the closing of the business combination (the “Closing”) (the “Additional Charter Proposal” and, together with the Special Voting Shares Charter Proposal, the Authorized KBL Common Stock Charter Proposal, the Authorized KBL Preferred Stock Charter Proposal and the Name Change Proposal, the “Charter Proposals”). A copy of the Second A&R Charter reflecting the proposed amendments pursuant to the Additional Charter Proposal is attached to the accompanying proxy statement/prospectus as Annex B.

(7)    The Nasdaq Proposal — To consider and vote upon a proposal to approve, for purposes of complying with applicable listing rules of The Nasdaq Capital Market (“Nasdaq”): (a) the issuance of up to 14,521,710 shares of KBL Common Stock in connection with the Closing; and (b) the future issuance of up to 2,978,290 shares of KBL Common Stock to holders of Exchangeable Shares in connection with any exchange of their Exchangeable Shares of each of CannBioRex Purchaseco ULC and Katexco Purchaseco ULC (the “Nasdaq Proposal”).

(8)    The Omnibus Incentive Plan Proposal — To consider and vote upon a proposal to approve and adopt the CannBioRx Life Sciences Corp. 2019 Long Term Incentive Plan (the “OIP”) and material terms thereunder (the “OIP Proposal”). A copy of the OIP is attached to the accompanying proxy statement/prospectus as Annex C.

(9)    The Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Charter Proposals, the Nasdaq Proposal or the OIP Proposal (the “Adjournment Proposal” and, together with the Business Combination Proposal, the Charter Proposals and the Nasdaq Proposal, the “Transaction Proposals” and, together with the OIP Proposal, the “Proposals”).

We refer to (a) the business combination and (b) the redemption, if any, by KBL of shares of KBL Common Stock held by any public stockholders (as defined below) in connection with the business combination, collectively, as the “Transactions.”

Only holders of record of our KBL Common Stock at the close of business on __________, 2019 are entitled to notice of the special meeting and to vote at the special meeting and any adjournments or postponements thereof. A complete list of KBL’s stockholders of record entitled to vote at the special meeting will be available for ten days before the special meeting at KBL’s principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting.

Pursuant to our Charter, we are providing the holders of shares of KBL Common Stock originally sold as part of the units issued in our IPO, which closed on June 7, 2017 (the “IPO” and such holders, the “public stockholders”), with the opportunity to redeem, upon the Closing, shares of KBL Common Stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the trust account (the “Trust Account”) that holds the proceeds (including interest but net of franchise and income taxes payable) from the IPO and a concurrent private placement of units to KBL IV Sponsor LLC (our “Sponsor”) and subsequent loans from the Sponsor of $0.0225 for each public share per calendar month commencing on June 7, 2019 in connection with a previous amendment to our Charter to extend the period of time to consummate a business combination. For illustrative purposes, based on the fair value of marketable securities currently held in the Trust Account as of November 6, 2019 of approximately $50.9 million, the estimated per share redemption

price will be approximately $10.61. Public stockholders may elect to redeem their shares even if they vote for the Business Combination Proposal. A public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), will be restricted from seeking redemption with respect to more than an aggregate of 15% of the outstanding shares of KBL Common Stock sold in the IPO without the prior consent of KBL. Holders of KBL’s outstanding warrants sold in the IPO, which are exercisable for shares of KBL Common Stock under certain circumstances, do not have redemption rights in connection with the business combination. Our Sponsor, officers and directors have agreed to waive their redemption rights in connection with the Business Combination Proposal with respect to any shares of KBL Common Stock they may hold, and the founder shares will be excluded from the pro rata calculation used to determine the per share redemption price. Currently, our Sponsor, officers and directors own approximately 39.8% of the outstanding shares of KBL Common Stock, including all of the founder shares. Our Sponsor, officers and directors have agreed to vote any shares of KBL Common Stock owned by them in favor of each of the Transaction Proposals.

The Closing is conditioned on the approval of the Business Combination Proposal, the Charter Proposals and the Nasdaq Proposal at the special meeting. The Charter Proposals and the OIP Proposal are conditioned on the approval of the Business Combination Proposal and the Nasdaq Proposal. The Adjournment Proposal is not conditioned on the approval of any other Proposal set forth in the accompanying proxy statement/prospectus.

Your attention is directed to the proxy statement/prospectus accompanying this notice (including the annexes thereto) for a more complete description of the Transactions and each of our Proposals. We encourage you to read this proxy statement/prospectus carefully. If you have any questions or need assistance voting your shares, please call our proxy solicitor, Advantage Proxy, at (877) 870-8565 (toll free) or (206) 870-8565 (collect) or by email at ksmith@advantageproxy.com.

____________, 2019

By Order of the Board of Directors

/s/ Marlene Krauss, M.D.

Marlene Krauss, M.D.
Chief Executive Officer
KBL Merger Corp. IV

Important Notice Regarding the Availability of Proxy Materials for the Special Meeting of Stockholders to be held on ________________, 2019: This notice of meeting and the related proxy statement/prospectus will be available at https://www.cstproxy.com/kblmerger/2019.

TABLE OF CONTENTS

CERTAIN DEFINED TERMS

Unless the context otherwise requires, references in this proxy statement/prospectus to:

•        “Board” is to the board of directors of KBL;

•        “business combination” are to the transactions contemplated by the Business Combination Agreement;

•        “Business Combination Agreement” are to the Business Combination Agreement, dated as of July 25, 2019 (as the same may be amended), by and among KBL, KBL Merger Sub, Inc. (“KBL Merger Sub”), the CannBioRx Parties and Lawrence Pemble, in his capacity as representative of the stockholders of the CannBioRx Parties (the “Stockholder Representative”), pursuant to which KBL Merger Sub will merge with and into CannBioRx with CannBioRx surviving the merger and continuing as a wholly-owned subsidiary of KBL, and in consideration thereof, the stockholders of CannBioRx shall, at the option of the holder, receive either shares of KBL Common Stock or their existing Exchangeable Shares will become exchangeable into shares of KBL Common Stock;

•        “Canadian Tax Act” means the Income Tax Act (Canada), as amended;

•        “CannBioRx Parties” are to CannBioRx Life Sciences Corp. (“CannBioRx”) and the CannBioRx Subsidiaries;

•        “CannBioRx Subsidiaries” are to Katexco Pharmaceuticals Corp., (“Katexco”), CannBioRex Pharmaceuticals Corp., (“CBR Pharma”) and 180 Therapeutics L.P. (“180”);

•        “Charter” is to KBL’s amended and restated certificate of incorporation;

•        “Closing” are to the consummation of the business combination;

•        “KBL Common Stock” are to our common stock, par value $0.0001 per share;

•        “Effective Time” is to the time as of which the merger becomes effective;

•        “Exchange Act” are to the Securities Exchange Act of 1934, as amended;

•        “Exchangeable Shares” are to the exchangeable shares issued concurrently with the closing of the Reorganization by: (i) Katexco Purchaseco ULC to certain Canadian former shareholders of Katexco; and (ii) CannBioRex Purchaseco ULC to certain Canadian former shareholders of CBR Pharma, which are exchangeable for common stock of CannBioRx prior to the Effective Time and become exchangeable into shares of KBL Common Stock following the Effective Time;

•        “founder shares” are to shares of our shares of KBL Common Stock initially purchased by the Sponsor in a private placement prior to our IPO;

•        “initial stockholders” are to holders of our founder shares prior to the IPO, including the Sponsor and our independent directors;

•        “IPO” are to our initial public offering of units, which closed on June 7, 2017;

•        “KBL,” “we,” “our” or “us” are to KBL Merger Corp. IV;

•        “management” or our “management team” are to our officers and directors;

•        “KBL Preferred Stock” are to our preferred stock, par value $0.0001 per share;

•        “private placement shares” are to the shares of KBL Common Stock underlying the private placement units;

•        “private placement units” are to the units issued to the Sponsor in a private placement simultaneously with the closing of our IPO;

•        “private placement warrants” are to the warrants underlying the private placement units;

•        “public shares” are to shares of our KBL Common Stock sold as part of the units in the IPO (whether they were purchased in the IPO or thereafter in the open market);

•        “public stockholders” are to the holders of our public shares;

•        “public warrants” are to the redeemable warrants sold as part of the units in the IPO;

•        “Reorganization” is to the corporate restructuring pursuant to which 180 became a direct wholly-owned subsidiary of CannBioRx, and Katexco and CBR Pharma became indirect wholly-owned subsidiaries of CannBioRx;

•        “right” is to a right to receive one-tenth (1/10) of one share of KBL Common Stock upon the consummation of an initial business combination;

•        “Sponsor” are to KBL IV Sponsor LLC; Dr. Marlene Krauss, our Chief Executive Officer, is the sole managing member of KBL IV Sponsor LLC;

•        “Support Agreements” are to the support agreements pertaining to the Exchangeable Shares entered into concurrently with the closing of the Reorganization between (i) CannBioRx, Katexco Callco ULC and Katexco Purchaseco ULC, and (ii) CannBioRx, CannBioRex Callco ULC and CannBioRex Purchaseco ULC;

•        “Transactions” are to (a) the business combination and (b) the redemption, if any, by KBL of shares of KBL Common Stock held by any public stockholders in connection with the business combination;

•        “Trust Account” is to the trust account established by KBL for the benefit of its public stockholders, which monies are invested in “government securities” (as such term is defined in the Investment Company Act), and held in trust by Continental Stock Transfer & Trust Company;

•        “Trustee” means the trustee appointed under the Voting and Exchange Agreements;

•        “Tyche” is to Tyche Capital LLC;

•        “units” are to our units sold in the IPO, each of which consists of one share of KBL Common Stock, one right and one public warrant to purchase one-half of one share of KBL Common Stock;

•        “voting common stock” are to our KBL Common Stock prior to the consummation of the Transactions, and to our KBL Common Stock and Special Voting Shares following the consummation of the Transactions;

•        “Voting and Exchange Agreements” are to the voting and exchange agreements pertaining to the Exchangeable Shares entered into concurrently with the closing of the Reorganization between: (i) CannBioRx, Katexco Purchaseco ULC and Odyssey Trust Company; and (ii) CannBioRx, CannBioRex Purchaseco ULC and Odyssey Trust Company; and

•        “warrants” are to our warrants that will be outstanding upon the Closing, including the public warrants and private placement warrants.

Unless otherwise specified, the voting and economic interests of KBL stockholders set forth in this proxy statement/prospectus assume that (i) no public stockholders elect to have their public shares redeemed; (ii) the Sponsor transfers to Tyche 1,406,250 founder shares upon Closing; (iii) none of the holders of our founder shares or CannBioRx purchases shares of KBL Common Stock in the open market; (v) there are no other issuances of equity interests of KBL; and (vi) the warrants remain outstanding immediately following the Closing.

SUMMARY TERM SHEET

This Summary Term Sheet, together with the sections entitled “Questions and Answers About the Proposals for KBL Stockholders” and “Summary of the proxy statement/prospectus,” summarizes certain information contained in this proxy statement/prospectus, but does not contain all of the information that is important to you. You should read carefully this entire proxy statement/prospectus, including the attached annexes, for a more complete understanding of the matters to be considered at the special meeting of KBL stockholders.

•        We are a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (an “initial business combination”).

•        There are currently 8,168,215 shares of KBL Common Stock issued and outstanding, consisting of (i) 4,915,715 public shares and (ii) 3,252,500 founder shares. In addition, there are currently 12,002,500 warrants outstanding, consisting of (i) 11,500,000 public warrants and (ii) 502,500 private placement warrants. Each whole warrant entitles the holder to purchase one-half of one share of KBL Common Stock for $5.75 per share. The warrants will become exercisable 30 days after the completion of an initial business combination. Additionally, the warrants will expire five years after the completion of an initial business combination or earlier upon redemption or liquidation. Once the warrants become exercisable, KBL may redeem the outstanding warrants in whole and not in part, at a price of $0.01 per warrant, if the last sale price of our KBL Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading day period ending on the third trading day before KBL sends the notice of redemption to the warrant holders. The private placement warrants, however, are non-redeemable so long as they are held by the Sponsor or their permitted transferees. For more information about KBL, see the sections entitled “Business of CannBioRx” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of CannBioRx.”

•        CannBioRx is a pharmaceutical company focused on the development of therapeutics for unmet medical needs in chronic pain, inflammation, inflammatory diseases and fibrosis by employing innovative research, and, where appropriate, combination therapy. CannBioRx has three product development platforms: fibrosis and anti-TNF (tumour necrosis factor); cannabinoids; and α7nAChR (alpha 7 nicotinic acetylcholine receptor). CannBioRx also has several future product candidates in development, including one product candidate in a Phase 2b/3 clinical trial for Dupuytren’s disease, a condition that affects the development of fibrous connective tissue between the tendons of the finger. CannBioRx operates through three wholly-owned subsidiaries: 180 Therapeutics L.P., a Delaware limited partnership; Katexco Pharmaceuticals Corp., a company incorporated in British Columbia, Canada; and CannBioRex Pharmaceuticals Corp., a company incorporated in British Columbia, Canada. For more information about CannBioRx, see the sections entitled “Business of CannBioRx” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of CannBioRx.”

•        On July 25, 2019, we entered into that certain Business Combination Agreement, by and among KBL, KBL Merger Sub, the CannBioRx Parties and the Stockholder Representative, pursuant to which KBL Merger Sub will merge with and into CannBioRx with CannBioRx surviving the merger and continuing as a wholly-owned subsidiary of KBL, and in consideration thereof, the stockholders of CannBioRx shall receive shares of KBL Common Stock and the existing Exchangeable Shares shall be adjusted in accordance with the provisions in the articles of CannBioRex Purchaseco ULC or Katexco Purchaseco ULC, as applicable, governing the Exchangeable Shares such that they are multiplied by the Exchange Ratio and become exchangeable into shares of KBL Common Stock. The Exchangeable Shares will entitle the holders to dividends and other rights that are substantially economically equivalent to those of holders of KBL Common Stock, and holders of Exchangeable Shares will have the right, through the applicable Voting and Exchange Agreement, to vote at meetings of KBL stockholders.

Merger Consideration and Exchange Ratio

At the Effective Time, (a) each outstanding share of common stock of CannBioRx outstanding immediately prior to the Effective Time (excluding any shares of common stock of CannBioRx held as treasury stock and any dissenting shares) will be converted solely into the right to receive a specified number of shares of KBL Common Stock, (b) each outstanding share of preferred stock of CannBioRx outstanding immediately prior to the Effective

Time will be converted solely into the right to receive a number of shares of KBL Preferred Stock on a one-for-one basis, and (c) the Exchangeable Shares outstanding immediately prior to the Effective Time will be adjusted in accordance with the provisions governing the Exchangeable Shares such that they will be multiplied by the Exchange Ratio and become exchangeable into KBL Common Stock.

In connection with the business combination, KBL will enter into a trust agreement supplemental to each Voting and Exchange Agreement and KBL will enter into an agreement supplemental to each Support Agreement, each as described herein.

The Exchange Ratio is equal to the quotient obtained by dividing the number of CannBioRx Merger Shares (defined below) by the CannBioRx Outstanding Shares (defined below), where:

•        CannBioRx Outstanding Shares is the total number of shares of CannBioRx common stock outstanding immediately prior to the Effective Time expressed on a fully-diluted and as-converted to CannBioRx common stock basis and assuming, without limitation or duplication, (i) the conversion or exchange of all convertible or exchangeable, as the case may be, securities to CannBioRx common stock (including, for the avoidance of doubt, the exchange of the Exchangeable Shares for CannBioRx common stock prior to the Effective Time), (ii) the issuance of shares of CannBioRx common stock in respect of all other options, warrants or rights to receive such shares that will be outstanding immediately after the Effective Time and (iii) the issuance of shares of CannBioRx common stock to Yissum Research Development Company of the Hebrew University of Jerusalem, Ltd.

•        CannBioRx Merger Shares means the quotient determined by dividing (i) the CannBioRx Valuation (as defined below) by (ii) $10.00.

•        CannBioRx Valuation means $175.0 million minus any liabilities outstanding at the Closing in excess of $5.0 million in the aggregate.

The Business Combination Agreement does not provide for an adjustment to the total number of shares of KBL Common Stock that CannBioRx stockholders will be entitled to receive for changes in the market price of KBL Common Stock. Accordingly, the market value of the shares of KBL Common Stock issued pursuant to the business combination will depend on the market value of the shares of KBL Common Stock at the time of the Closing, and could vary significantly from the market value on the date of this proxy statement/prospectus.

See the section entitled “Proposal No. 1 — The Business Combination Proposal — The Business Combination Agreement — Merger Consideration and Exchange Ratio.” A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A. For more information about the Business Combination Agreement and the business combination, see the section entitled “Proposal No. 1 — The Business Combination Proposal.”

Based on the number of shares of KBL Common Stock, shares of CannBioRx common stock and Exchangeable Shares outstanding as of the date of this proxy statement/prospectus, approximately 17,500,000 shares of KBL Common Stock representing approximately 67.7% of the combined company’s voting interests (assuming that all outstanding shares remain outstanding at the Closing and no shares are redeemed in connection with the business combination), will be either issued to CannBioRx stockholders or set aside and reserved for issuance to holders of Exchangeable Shares in connection with the business combination. See the section entitled “Proposal No. 1 — The Business Combination Proposal — The Business Combination Agreement — Merger Consideration and Exchange Ratio.” Those 17,500,000 shares have an aggregate market value, calculated based on the closing price of KBL Common Stock on July 25, 2019, the date prior to the public announcement of the entry into of the Business Combination Agreement, of $183.1 million. The aggregate market value of the consideration to be received by the CannBioRx stockholders upon Closing is subject to fluctuation based on the trading price of KBL Common Stock.

The Exchangeable Shares will entitle their holders to dividends and other rights that are substantially economically equivalent to those of holders of shares of KBL Common Stock and holders of Exchangeable Shares will also have the right, through the applicable Voting and Exchange Agreement, to vote at meetings of KBL stockholders. Each Exchangeable Share will be multiplied by the Exchange Ratio and will become exchangeable for one share of KBL Common Stock at any time after Closing at the option of the holders and will be redeemable or purchasable at the option of CannBioRex Purchaseco ULC or Katexco Purchaseco ULC, as applicable, or their

parent after ten years or upon the earlier occurrence of certain specified events. See the section entitled “Proposal No. 1 — The Business Combination Proposal — The Business Combination Agreement — General Description of the Business Combination Agreement.”

•        The Special Voting Shares will be authorized for issuance and issued to the Trustee pursuant to the Business Combination Agreement. Each Special Voting Share will be a share of KBL Preferred Stock designated as either Class C Special Voting Share or Class K Special Voting Share and will have a par value of $0.0001 per share. Except as otherwise required by law, each Special Voting Share will be entitled to a number of votes equal to the number of Exchangeable Shares from time to time outstanding in CannBioRex Purchaseco ULC or Katexco Purchaseco ULC, as applicable, and not owned by KBL or its subsidiaries. These votes may be exercised for the election of directors and on all other matters submitted to the vote of KBL stockholders. The holders of KBL Common Stock and the holders of the Special Voting Shares will vote together as a single class on all matters, except to the extent voting as a separate class is required by applicable law or the Charter. The holders of the Special Voting Shares will not be entitled to receive dividends from KBL and, in the event of any liquidation, dissolution or winding-up of KBL, will receive an amount equal to the par value thereof. At such time as there are no Exchangeable Shares outstanding not owned by KBL or its subsidiaries, the Special Voting Shares will be cancelled.

For more information about the Special Voting Shares, see the section entitled “Proposal No. 2 — The Special Voting Shares Charter Proposal — Description of Special Voting Shares.”

•        In connection with the execution of the Business Combination Agreement, KBL entered into the following agreements:

•        Support Agreement.    In order to induce KBL to enter into the Business Combination Agreement, certain executive officers, directors and stockholders of CannBioRx are party to voting agreements with KBL pursuant to which, among other things, each of these stockholders agreed, solely in his, her or its capacity as a stockholder of CannBioRx, to vote all of his, her or its shares of CannBioRx capital stock in favor of (i) the approval and adoption of the Business Combination Agreement, (ii) the approval of any transaction proposed under the Business Combination Agreement, and (iii) any other proposal included in the written consent presented to the stockholders of CannBioRx in connection with, or related to, the Closing for which the CannBioRx board of directors has recommended that the stockholders of CannBioRx vote in favor, and to vote against any competing proposal. These stockholders of CannBioRx have also granted KBL a limited, irrevocable proxy to vote their respective shares of CannBioRx capital stock in accordance with the voting agreements. The stockholders of CannBioRx may vote their shares of capital stock on all other matters not referred to in such proxy. For more information about the Support Agreement, see the section entitled Proposal No. 1 — The Business Combination Proposal — Related Agreements.”

•        Lock-up Agreements.    As a condition to the Closing, certain stockholders of CannBioRx holding no less than 75% of the shares of capital stock of CannBioRx prior to the consummation of the business combination are expected to enter into lock-up agreements, pursuant to which such parties have agreed not to, except in limited circumstances, sell or transfer, or engage in swap or similar transactions with respect to, shares of CannBioRx, including, as applicable, shares of KBL Common Stock received in the business combination and issuable upon exercise of certain options, in each case until the earlier of (i) one year after the Closing, or (ii) on such earlier date as provided in clauses (x) or (y) below if, subsequent to the Closing, (x) the last sale price of the KBL Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-day trading period commencing at least 150 days after the Closing or (y) the date following the business combination on which KBL completes a liquidation, merger, stock exchange or other similar transaction that results in all of the KBL stockholders having the right to exchange their shares of KBL Common Stock for cash, securities or other property.

•        Guarantee and Commitment Agreement.    In order to induce KBL to enter into the Business Combination Agreement, Tyche has entered into a Guarantee and Commitment Agreement with KBL pursuant to which, among other things, Tyche agreed to purchase, and KBL agreed to sell to Tyche, certain shares of common stock of KBL such that at the Closing, KBL will have at

least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act). Pursuant to the Guarantee and Commitment Agreement, subject to certain conditions (i) KBL agreed to use its reasonable efforts to raise at least $10,000,000 through the sale of shares of KBL Common Stock; and (ii) Tyche guaranteed to KBL the receipt by KBL at Closing of sufficient funds to have at least $5,000,001 in net tangible assets (after including or giving effect to funds raised via the sale of common stock of KBL and without including or giving effect to any of the funds held in the Trust Account) in order to satisfy the net tangible assets closing condition under the Business Combination Agreement.

•        Other Agreements.    For more information about other agreements to be entered into by KBL and its affiliates at the Closing, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Related Agreements.”

•        In connection with the entry into Business Combination Agreement, the Sponsor deposited in escrow with a third party escrow agent 1,406,250 of its founder shares that it acquired prior to the IPO (the “Escrowed Shares”). The Escrowed Shares will be transferred to Tyche upon the earlier of (i) the Closing or (ii) a liquidation; provided, that if KBL consummates its initial business combination with a third party other than CannBioRx or its affiliates, upon the consummation of such business combination, in addition to paying certain loans, the Sponsor will transfer to Tyche a number of Escrowed Shares equal in value to three times the amount of the loans, with each Escrowed Share valued at the price paid to each public stockholder that redeems its shares in connection with such initial business combination.

•        Unless waived by the parties to the Business Combination Agreement, the Closing is subject to a number of conditions set forth in the Business Combination Agreement, including, among others, receipt of required regulatory approvals, receipt of the requisite KBL stockholder approval of the Business Combination Agreement and the business combination as contemplated by this proxy statement/prospectus, the effectiveness of this registration statement of which this proxy statement/prospectus forms a part, and that KBL will have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act). For more information about the closing conditions to the business combination, see the section entitled “Proposal No. 1 — The Business Combination Proposal — The Business Combination Agreement — Conditions to Closing of the Business Combination.”

•        The Business Combination Agreement may be terminated at any time prior to the Closing upon agreement of the parties thereto, or by KBL or CannBioRx, acting alone, in specified circumstances. For more information about the termination rights under the Business Combination Agreement, see the section entitled “Proposal No. 1 — The Business Combination Proposal — The Business Combination Agreement — Termination.”

•        The proposed Transactions involve numerous risks. For more information about these risks, please read “Risk Factors.”

•        Under the Charter, in connection with the business combination, holders of our public shares may elect to have their public shares redeemed for cash at the applicable redemption price per share calculated in accordance with our Charter. As of November 6, 2019, this would have amounted to approximately $10.61 per share (based on the fair value of marketable securities held in the Trust Account as of November 6, 2019 of approximately $50.9 million plus $0.0225 per public share if the business combination is completed by December 9, 2019). If a holder exercises its redemption rights, then such holder will be exchanging its public shares for cash and will only hold shares of KBL Common Stock of the combined entity issued pursuant to the conversion of the public rights. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its public shares (either physically or electronically) to our transfer agent at least two business days prior to the special meeting. See the section entitled “Special Meeting of KBL Stockholders — Redemption Rights.”

•        At the time of the Closing, holders of the founder shares are expected to own 1,846,250 shares of KBL Common Stock. As discussed above, in connection with the Closing, the Sponsor will transfer to Tyche 1,406,250 founder shares.

•        It is anticipated that, upon the completion of the Transactions, the public stockholders will own approximately 4,915,715 shares of KBL Common Stock, representing an ownership interest of approximately 19% voting power in the combined company, the Sponsor will retain 1,846,250 founder shares, representing an ownership interest of approximately 7.1% voting power in the combined company (assuming the transfer of 1,406,250 founder shares to Tyche upon the Closing) and the CannBioRx stockholders and holders of Exchangeable Shares will own approximately 17,500,000 shares of KBL Common Stock and/or Exchangeable Shares, representing approximately 67.7% voting power of the combined company. These relative percentages reflect the automatic conversion of 1,652,500 Rights into approximately 165,250 shares of KBL Common Stock at the Closing. The ownership percentage with respect to the combined company following the Transactions does not take into account (i) the redemption of any shares by KBL’s public stockholders, (ii) any purchases of shares of KBL Common Stock in the open market by holders of the founder shares, and (iii) the exercise of the warrants outstanding following the business combination. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by KBL’s existing stockholders in the combined company will be different.

         Please see the section entitled “Summary of the proxy statement/prospectus — Impact of the Business Combination on KBL’s Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

•        Our Board considered various factors in determining whether to approve the Business Combination Agreement and the business combination. For more information about our decision-making process, see the section entitled “Proposal No. 1 — The Business Combination Proposal — KBL’s Board of Directors’ Reasons for the Approval of the Business Combination.”

•        In addition to voting on the Business Combination Proposal at the special meeting, KBL’s stockholders will also be asked to vote on:

•        the Special Voting Shares Charter Proposal;

•        the Authorized KBL Common Stock Charter Proposal;

•        the Authorized KBL Preferred Stock Charter Proposal;

•        the Name Change Proposal;

•        the Additional Charter Proposal;

•        the Nasdaq Proposal;

•        the OIP Proposal; and

•        the Adjournment Proposal.

For more information, see the sections entitled “Proposal No. 2 — The Special Voting Shares Charter Proposal,” “Proposal No. 3 — The Authorized KBL Common Stock Charter Proposal,” “Proposal No. 4 — The Authorized KBL Preferred Stock Charter Proposal,” “Proposal No. 5 — The Name Change Proposal,” “Proposal No. 6 — The Additional Charter Proposal,” “Proposal No. 7 — The Nasdaq Proposal,” “Proposal No. 8 — The Omnibus Incentive Plan Proposal” and “Proposal No. 9 — The Adjournment Proposal.”

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS
FOR KBL STOCKHOLDERS

The following questions and answers briefly address some commonly asked questions about the Proposals to be presented at the special meeting, including the proposed business combination. The following questions and answers do not include all the information that is important to KBL stockholders. We urge KBL stockholders to read carefully this entire proxy statement/prospectus, including the annexes and other documents referred to herein.

Q:     Why am I receiving this proxy statement/prospectus?

A:     Our stockholders are being asked to consider and vote upon, among other things, a proposal to (a) approve and adopt the Business Combination Agreement, pursuant to which KBL Merger Sub will merge with and into CannBioRx with CannBioRx surviving the merger and continuing as our wholly-owned subsidiary, and in consideration thereof, the stockholders of CannBioRx shall receive shares of KBL Common Stock and the existing Exchangeable Shares shall be adjusted in accordance with the provisions governing the Exchangeable Shares such that they are multiplied by the Exchange Ratio and become exchangeable into shares of KBL Common Stock. The Exchangeable Shares will entitle the holders to dividends and other rights that are substantially economically equivalent to those of holders of KBL Common Stock, and holders of Exchangeable Shares will have the right, through the applicable Voting and Exchange Agreement, to vote at meetings of our stockholders. Such acquisition and the other transactions contemplated by the Business Combination Agreement (the “business combination”) is referred to as the “Business Combination Proposal.”

         A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A. This proxy statement/prospectus and its annexes contain important information about the proposed business combination and the other matters to be acted upon at the special meeting. You should read this proxy statement/prospectus and its annexes carefully and in their entirety.

         Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement/prospectus and its annexes.

Q:     What is being voted on at the special meeting?

A:     Below are the Proposals on which our stockholders will vote at the special meeting.

(1)    The Business Combination Proposal — To consider and vote upon a proposal to approve and adopt the Business Combination Agreement pursuant to which KBL Merger Sub will merge with and into CannBioRx with CannBioRx surviving the merger and continuing as a wholly-owned subsidiary of KBL, and in consideration thereof, the stockholders of CannBioRx shall receive shares of KBL Common Stock and the existing Exchangeable Shares shall be adjusted in accordance with the provisions governing the Exchangeable Shares such that they are multiplied by the Exchange Ratio and become exchangeable into shares of KBL Common Stock. The Exchangeable Shares will entitle the holders to dividends and other rights that are substantially economically equivalent to those of holders of KBL Common Stock, and holders of Exchangeable Shares will have the right, through the applicable Voting and Exchange Agreement, to vote at meetings of KBL stockholders. A copy of the Business Combination Agreement is attached to the accompanying proxy statement/prospectus as Annex A.

(2)    The Special Voting Shares Charter Proposal — To consider and act upon a proposal to approve and adopt amendments to the Charter to create the Special Voting Shares. A copy of our Second A&R Charter reflecting the proposed amendments pursuant to the Special Voting Shares Charter Proposal is attached to the accompanying proxy statement/prospectus as Annex B.

(3)     The Authorized KBL Common Stock Charter Proposal — To consider and act upon a proposal to approve and adopt the Authorized KBL Common Stock Charter Proposal to increase the number of authorized shares of KBL Common Stock, from 35,000,000 shares to 100,000,000 shares. A copy of the Second A&R Charter reflecting the proposed amendment pursuant to the Authorized KBL Common Stock Charter Proposal is attached to the accompanying proxy statement/prospectus as Annex B.

(4)    The Authorized KBL Preferred Stock Charter Proposal — To consider and act upon a proposal to approve and adopt the Authorized KBL Preferred Stock Charter Proposal to increase the number of authorized shares of KBL Preferred Stock from 1,000,000 shares to 5,000,000 shares. A copy of the Second A&R Charter reflecting the proposed amendment pursuant to the Authorized KBL Preferred Stock Charter Proposal is attached to the accompanying proxy statement/prospectus as Annex B

(5)    The Name Change Proposal — To consider and act upon a proposal to approve and adopt the Name Change Proposal to change the name of “KBL Merger Corp. IV” to “CannBioRx Life Sciences Corp.” A copy of the Second A&R Charter reflecting the proposed amendment pursuant to the Name Change Proposal is attached to the accompanying proxy statement/prospectus as Annex B.

(6)    The Additional Charter Proposal — To consider and act upon a proposal to approve and adopt the Additional Charter Proposal to eliminate provisions in the Charter relating to our initial business combination that will no longer be applicable to us following the Closing. A copy of the Second A&R Charter reflecting the proposed amendments pursuant to the Additional Charter Proposal is attached to the accompanying proxy statement/prospectus as Annex B.

(7)    The Nasdaq Proposal — To consider and vote upon a proposal to approve the Nasdaq Proposal for purposes of complying with applicable listing rules of Nasdaq: (a) the issuance of up to 14,521,710 shares of KBL Common Stock in connection with the Closing; and (b) the future issuance of up to 2,978,290 shares of KBL Common Stock to holders of Exchangeable Shares in connection with any exchange of their Exchangeable Shares of each of CannBioRex Purchaseco ULC and Katexco Purchaseco ULC.

(8)    The Omnibus Incentive Plan Proposal — To consider and vote upon a proposal to approve and adopt the OIP Proposal. A copy of the OIP is attached to the accompanying proxy statement/prospectus as Annex C.

(9)    The Adjournment Proposal — To consider and vote upon a proposal to approve the Adjournment Proposal to adjourn the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Proposals.

Q:     Are the Proposals conditioned on one another?

A:     The Closing is conditioned on the approval of the Business Combination Proposal, the Charter Proposals and the Nasdaq Proposal at the special meeting. The Charter Proposals, the Nasdaq Proposal and the OIP Proposal are conditioned on the approval of the Business Combination Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

Q:     Why is KBL providing stockholders with the opportunity to vote on the business combination?

A:     Under our Charter, we must provide all public stockholders with the opportunity to redeem their public shares upon the consummation of an initial business combination (as defined below) either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, we have elected to provide our stockholders with the opportunity to have their public shares redeemed in connection with a stockholder vote rather than a tender offer. Therefore, we are seeking to obtain the approval of our stockholders of the Business Combination Proposal in order to allow our public stockholders to effectuate redemptions of their public shares in connection with the Closing. The approval of our stockholders of the Business Combination Proposal is also a condition to closing in the Business Combination Agreement.

Q:     What will happen in the business combination?

A:     On July 25, 2019, we, KBL Merger Sub, the CannBioRx Parties and the Stockholder Representative entered into the Business Combination Agreement.

         Upon completion of the business combination, each share of CannBioRx common stock will be exchanged for a number of shares of KBL Common Stock equal to the Exchange Ratio and the existing Exchangeable Shares will be adjusted in accordance with the provisions governing the Exchangeable Shares such that they are multiplied by the Exchange Ratio and become exchangeable into shares of KBL Common Stock upon exchange. Each Exchangeable Share will be multiplied by the Exchange Ratio and will become exchangeable for one share of KBL Common Stock at any time after Closing at the option of the holders and will be redeemable or purchasable at the option of CannBioRex Purchaseco ULC and Katexco Purchaseco ULC or their parent after ten years or upon the earlier occurrence of certain specified events. See the section entitled “Proposal No. 1 — The Business Combination Proposal — The Business Combination Agreement — General Description of the Business Combination Agreement.”

         Based on the number of shares of KBL Common Stock, shares of CannBioRx common stock and Exchangeable Shares outstanding as of the date of this proxy statement/prospectus, approximately 17,500,000 shares of KBL Common Stock, representing approximately 67.7% of the combined company’s voting interests (assuming that all outstanding shares remain outstanding at the Closing and no shares are redeemed in connection with the business combination), will be either issued to CannBioRx stockholders or set aside and reserved for issuance to holders of Exchangeable Shares in connection with the business combination. See the section entitled “Proposal No. 1 — The Business Combination Proposal — The Business Combination Agreement — Merger Consideration and Exchange Ratio.” Those 17,500,000 shares have an aggregate market value, calculated based on the closing price of KBL Common Stock on July 25, 2019, the date prior to the public announcement of the entry into of the Business Combination Agreement, of $183.1 million. The aggregate market value of the consideration to be received by the CannBioRx stockholders upon Closing is subject to fluctuation based on the trading price of KBL Common Stock.

         A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A. For more information about the Business Combination Agreement and the business combination, see the section entitled “Proposal No. 1 — The Business Combination Proposal.”

Q:    What conditions must be satisfied to complete the business combination?

A:     There are a number of closing conditions in the Business Combination Agreement, including the approval by our stockholders of the Business Combination Proposal, the Charter Proposals and the Nasdaq Proposal. For a summary of the conditions that must be satisfied or waived prior to Closing, see the section entitled “Proposal No. 1 — The Business Combination Proposal — The Business Combination Agreement — Conditions to Closing of the Business Combination.”

Q:     How will KBL and CannBioRx be managed and governed following the business combination?

A:     We are, and after the Closing will continue to be, managed by our Board. In connection with the Closing, we intend to expand the size of our Board from five directors to eleven directors. Three of our current directors, Dr. Marlene Krauss, Mr. George Hornig and Mr. Sherrill Neff (who is independent), will continue as directors of our Board following the Closing. The current directors of CannBioRx, Prof. Marc Feldmann, Dr. Lawrence Steinman and Dr. Jonathan Rothbard, along with Dr. James N. Woody (who is independent), pending approval of his current employer Latterell Venture Partners, will be appointed as directors of our Board effective as of, and contingent upon, the Closing. We expect to appoint an additional four independent directors prior to the Closing, effective as of, and contingent upon, the Closing. Please see “Officers and Directors of KBL Following Closing of the Business Combination” for the names, ages and positions of each of the individuals who will serve as directors and officers of KBL following the Closing.

         Following the Closing, we will manage and govern CannBioRx’s business. Upon the Closing, we expect that Mr. Joseph Williamson will resign as our Chief Operating Officer, and that our management team will include Prof. Marc Feldmann and Dr. Lawrence Steinman, as Co-Executive Chairmen of our Board, Dr. Krauss as our Chief Executive Officer, Mr. Hornig as our Chief Operating Officer and Acting Chief Financial Officer, and Dr. Jonathan Rothbard as our Chief Scientific Officer.

Q:     What equity stake will current KBL stockholders , the holders of our founder shares and CannBioRx hold in KBL following the consummation of the Transactions?

A:     It is anticipated that, upon the completion of the Transactions, the public stockholders will own approximately 4,915,715 shares of KBL Common Stock, representing an ownership interest of approximately 19% voting power in the combined company, the Sponsor will retain 1,846,250 founder shares, representing an ownership interest of approximately 7.1% voting power in the combined company (assuming the transfer of 1,406,250 founder shares to Tyche upon the Closing) and the CannBioRx stockholders and holders of Exchangeable Shares will own approximately 17,500,000 shares of KBL Common Stock and/or Exchangeable Shares, representing approximately 67.7% voting power of the combined company. These relative percentages reflect the automatic conversion of 1,652,500 Rights into approximately 165,250 shares of KBL Common Stock at the Closing. The ownership percentage with respect to the combined company following the Transactions does not take into account (i) the redemption of any shares by KBL’s public stockholders, (ii) any purchases of shares of KBL Common Stock in the open market by holders of the founder shares, and (iii) the exercise of the warrants outstanding following the business combination. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by KBL’s existing stockholders in the combined company will be different.

         Please see the section entitled “Summary of the proxy statement/prospectus — Impact of the Business Combination on KBL’s Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

Q:     Why is KBL proposing the amendments to the Charter set forth in the Charter Proposals?

A:     The proposed amendments to the Charter that we are asking our stockholders to approve in connection with the business combination provide for, among other things, the creation of the Special Voting Shares that will be issued to the Trustee at the Closing pursuant to the Business Combination Agreement, as well as the elimination of certain provisions relating to an initial merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (an “initial business combination”) that will no longer be applicable to us following the Closing. In addition, we are asking our stockholders to approve an amendment to increase the number of authorized shares of KBL Common Stock from 35,000,000 to 100,000,000, an amendment to increase the number of authorized shares of KBL Preferred Stock from 1,000,000 to 5,000,000 and an amendment to change the name of “KBL Merger Corp. IV” to “CannBioRx Life Sciences Corp.” upon the Closing. Stockholder approval of the Charter Proposals are required under our Charter. See the sections entitled “Proposal No. 2 — The Special Voting Shares Charter Proposal,” “Proposal No. 3 — The Authorized KBL Common Stock Charter Proposal,” “Proposal No. 4 — The Authorized KBL Preferred Stock Charter Proposal,” “Proposal No. 5 — The Name Change Proposal” and “Proposal No. 6 — The Additional Charter Proposal” for additional information.

Q:     Why is KBL proposing the Nasdaq Proposal?

A:     We are proposing the Nasdaq Proposal in order to comply with Nasdaq listing rules, which require stockholder approval of certain transactions that result in the issuance of 20% or more of a company’s outstanding voting power or shares of common stock outstanding before the issuance of stock or securities. In connection with the Transactions, we intend to issue (subject to customary terms and conditions, including the Closing): (a) the issuance of up to 14,521,710 shares of KBL Common Stock in connection with the Closing; and (b) the future issuance of up to 2,978,290 shares of KBL Common Stock to holders of Exchangeable Shares in connection with any exchange of their Exchangeable Shares of each of CannBioRex Purchaseco ULC and Katexco Purchaseco ULC. Because we will issue 20% or more of our outstanding voting power and outstanding common stock in connection with the Transactions, we are required to obtain stockholder approval of such issuances pursuant to Nasdaq listing rules. Stockholder approval of the Nasdaq Proposal is also a condition to Closing pursuant to the Business Combination Agreement. See the section entitled “Proposal No. 7 — The Nasdaq Proposal” for additional information.

Q:     What happens if I sell my shares of KBL Common Stock before the special meeting?

A:     The record date for the special meeting is earlier than the date that the business combination is expected to be completed. If you transfer your shares of KBL Common Stock after the record date, but before the special meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the special meeting. However, you will not be able to seek redemption of your shares of KBL Common Stock because you will no longer be able to deliver them for cancellation upon the Closing in accordance with the provisions described herein. If you transfer your shares of KBL Common Stock prior to the record date, you will have no right to vote those shares at the special meeting or redeem those shares for a pro rata portion of the proceeds held in the Trust Account.

Q:     What vote is required to approve the Proposals presented at the special meeting?

A:     Approval of the Business Combination Proposal, the Nasdaq Proposal, the OIP Proposal and the Adjournment Proposal requires the affirmative vote (in person or by proxy) of the holders of a majority of the shares of KBL Common Stock entitled to vote and actually cast thereon at the special meeting. Approval of each of the Charter Proposals requires the affirmative vote (in person or by proxy) of the holders of a majority of the outstanding shares of KBL Common Stock entitled to vote thereon at the special meeting.

Q:     May the Sponsor, directors, officers, advisors or their affiliates purchase shares in connection with the business combination?

A:     In connection with the stockholder vote to approve the proposed business combination, the Sponsor, directors, officers, or advisors or their respective affiliates may privately negotiate transactions to purchase shares from stockholders who would have otherwise elected to have their shares redeemed in conjunction with a proxy solicitation pursuant to the proxy rules for a per share pro rata portion of the Trust Account. None of the Sponsor, directors, officers or advisors or their respective affiliates will make any such purchases when they are in possession of any material non-public information not disclosed to the seller or during a restricted period under Regulation M under the Exchange Act. Such a purchase would include a contractual acknowledgement that such stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and, therefore, agrees not to exercise its redemption rights, and could include a contractual provision that directs such stockholder to vote such shares in a manner directed by the purchaser. In the event that the Sponsor, directors, officers or advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. Any such privately negotiated purchases may be effected at purchase prices that are below or in excess of the per share pro rata portion of the Trust Account.

Q:     How many votes do I have at the special meeting?

A:     Our stockholders are entitled to one vote at the special meeting for each share of KBL Common Stock held of record as of _________, 2019, the record date for the special meeting. As of the close of business on the record date, there were _________ outstanding shares of KBL Common Stock.

Q:     What constitutes a quorum at the special meeting?

A:     Holders of a majority in voting power of KBL Common Stock issued and outstanding and entitled to vote at the special meeting, present in person or represented by proxy, constitute a quorum. In the absence of a quorum, the chairman of the special meeting has the power to adjourn the special meeting. As of the record date for the special meeting, _________ shares of KBL Common Stock would be required to achieve a quorum.

Q:     How will KBL’s Sponsor, directors and officers vote?

A:     In connection with our IPO, we entered into an agreement with the Sponsor and each of our directors and officers, pursuant to which each agreed to vote any shares of KBL Common Stock owned by them in favor of each of the Transaction Proposals. Currently, the Sponsor, directors and officers own approximately 39.8% of our combined issued and outstanding shares of KBL Common Stock, including all of the founder shares.

Q:     What interests do the current officers and directors have in the business combination?

A:     In considering the recommendation of our Board to vote in favor of the business combination, stockholders should be aware that, aside from their interests as stockholders, the Sponsor and our directors and officers have interests in the business combination that are different from, or in addition to, those of other stockholders generally. Our directors were aware of and considered these interests, among other matters, in evaluating the business combination, and in recommending to stockholders that they approve the business combination. Stockholders should take these interests into account in deciding whether to approve the business combination. These interests include, among other things:

•        the fact that the Sponsor holds private placement units, which include private placement warrants that would expire and be worthless if a business combination is not consummated;

•        the fact that our Sponsor, officers and directors have agreed not to redeem any of the founder shares or shares of KBL Common Stock held by them in connection with a stockholder vote to approve the business combination;

•        unless we consummate an initial business combination, our officers, directors and the Sponsor will not receive reimbursement for any out-of-pocket expenses incurred by them to the extent that such expenses exceed the amount of available proceeds not deposited in the Trust Account;

•        the fact that the Sponsor paid an aggregate of $25,000 for its founder shares and such securities will have a significantly higher value at the time of the business combination, which if unrestricted and freely tradable would be valued at approximately $________, based on the closing price of our KBL Common Stock on ______________, 2019, assuming the Sponsor transfers to Tyche 1,406,250 founder shares in connection with the Closing;

•        if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.10 per public share, or such lesser amount per public share as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

•        the continuation of certain of our existing directors and officers as directors of the combined company, including Marlene Krauss, M.D., George Hornig and Sherrill Neff;

•        the appointment upon the Closing pursuant to their employment agreements of (1) Marlene Krauss, M.D. as our Chief Executive Officer for a three year term with automatic one year renewals at an annual salary of $500,000 per year with an annual 10% increase, plus equity awards, a potential 50% annual bonus and other benefits, and (2) George Hornig as our Chief Operating Officer and Acting Chief Financial Officer for a three year term with automatic one year renewals at an annual salary of $250,000 with an annual 10% increase, plus equity awards, a potential 50% annual bonus and other benefits; for more information, see “Executive Compensation — Compensation of Executive Officers and Directors after the Business Combination;”

•        the fact that all of our officers and directors hold an interest in the Sponsor;

•        the fact that our Sponsor, officers and directors will lose their entire investment in us if an initial business combination is not completed; and

•        the fact that the Sponsor has loaned us $412,301 as of September 30, 2019 for working capital and may need to loan us additional funds through the Closing, which, in the event that the initial business combination does not close, cannot be paid from the proceeds or the interest on such proceeds in the Trust Account.

Q:     What happens if I vote against the Business Combination Proposal?

A:     Under our Charter, if the Business Combination Proposal is not approved and we do not otherwise consummate an alternative business combination by December 9, 2019, we will be required to dissolve and liquidate the Trust Account by returning the then-remaining funds in such account to our public stockholders.

Q:     Do I have redemption rights?

A:     If you are a holder of public shares, you may elect to have your public shares redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (a) the aggregate amount on deposit in the Trust Account as of two business days prior to the Closing, including interest not previously released to us to pay our franchise and income taxes, by (b) the total number of shares of KBL Common Stock included as part of the units sold in the IPO; provided that we will not redeem any public shares to the extent that such redemption would result in us having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of less than $5,000,001. A public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption with respect to more than an aggregate of 15% of the outstanding shares of KBL Common Stock sold in the IPO without our prior consent (the “15% threshold”). Unlike some other blank check companies, other than the net tangible asset requirement and the 15% threshold described above, we have no specified maximum redemption threshold and there is no other limit on the amount of public shares that you can redeem. Holders of public warrants do not have redemption rights in connection with the business combination. Our Sponsor, directors and officers have agreed to waive their redemption rights with respect to any shares of our capital stock they may hold in connection with the Business Combination Proposal, and the founder shares will be excluded from the pro rata calculation used to determine the per share redemption price. For illustrative purposes, based on the fair value of marketable securities held in the Trust Account as of November 6, 2019 of approximately $50.9 million, the estimated per share redemption price would have been approximately $10.61. Additionally, shares properly tendered for redemption will only be redeemed if the business combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the Trust Account (including interest but net of franchise and income taxes payable) in connection with the liquidation of the Trust Account or if we subsequently complete a different business combination on or prior to December 9, 2019.

Q:     Will how I vote affect my ability to exercise redemption rights?

A:     No. You may exercise your redemption rights whether you vote your shares of KBL Common Stock for or against or abstain from voting on the Business Combination Proposal or any other Proposal described in this proxy statement/prospectus. As a result, the business combination can be approved by stockholders who will redeem their shares and no longer remain stockholders.

Q:     How do I exercise my redemption rights?

A:     In order to exercise your redemption rights, you must (i) if you hold your shares of KBL Common Stock through units, elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares, (ii) check the box on the enclosed proxy card marked “Stockholder Certification,” and (iii) prior to 5:00 p.m., Eastern Time, on ________, 2019 (two business days before the special meeting), tender your public shares physically or electronically and submit a request in writing that we redeem your public shares for cash to Continental Stock Transfer & Trust Company, our transfer agent, at the following address:

Continental Stock Transfer & Trust Company
One State Street Plaza, 30th Floor
New York, New York 10004
Attn: Mark Zimkind
E-mail: mzimkind@continentalstock.com

Please check the box on the enclosed proxy card marked “Stockholder Certification” if you are not acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) with any other stockholder with respect to shares of KBL Common Stock. Notwithstanding the foregoing, a public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to his, her or its shares or, if part of such a group, the group’s shares, in excess of the 15% threshold. Accordingly, all public shares in excess of

the 15% threshold beneficially owned by a public stockholder or group will not be redeemed for cash. Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the transfer agent and time to effect delivery. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, we do not have any control over this process and it may take longer than two weeks. Stockholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.

Holders of our outstanding units must separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If you hold units registered in your own name, you must deliver the certificate for such units to Continental Stock Transfer & Trust Company with written instructions to separate such units into public shares and public warrants. This must be completed far enough in advance to permit the mailing of the public share certificates back to you so that you may then exercise your redemption rights upon the separation of the public shares from the units.

If a broker, dealer, commercial bank, trust company or other nominee holds your units, you must instruct such nominee to separate your units. Your nominee must send written instructions by facsimile to Continental Stock Transfer & Trust Company. Such written instructions must include the number of units to be split and the nominee holding such units. Your nominee must also initiate electronically, using the Depository Trust Company’s (the “DTC”) DWAC (deposit withdrawal at custodian) system, a withdrawal of the relevant units and a deposit of an equal number of public shares and public warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights upon the separation of the public shares from the units. While this is typically done electronically on the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your public shares to be separated in a timely manner, you will likely not be able to exercise your redemption rights.

Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the vote is taken with respect to the business combination. If you delivered your public shares for redemption to the transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that the transfer agent return the public shares (physically or electronically). You may make such request by contacting our transfer agent at the phone number or address listed under the question “Who can help answer my questions?” below.

Q:     What are the U.S. federal income tax consequences of exercising my redemption rights?

A:     Our stockholders who exercise their redemption rights to receive cash in exchange for their shares of KBL Common Stock generally will be required to treat the transaction as a sale of such shares and recognize gain or loss upon the redemption in an amount equal to the difference, if any, between the amount of cash received and the tax basis of the shares of KBL Common Stock redeemed. Such gain or loss should be treated as capital gain or loss if such shares were held as a capital asset on the date of the redemption. The redemption, however, may be treated as a distribution to a redeeming stockholder for U.S. federal income tax purposes if the redemption does not effect a sufficient reduction (as determined under applicable federal income tax law) in the redeeming stockholder’s percentage ownership in us, whether such ownership is direct or through the application of certain attribution and constructive ownership rules (including any KBL Common Stock constructively owned by one of our stockholders as a result of owning warrants or as a result of the Business Combination). Any amounts treated as such a distribution will constitute a dividend for U.S. federal income tax purposes to the extent paid from our current and accumulated earnings and profits as determined under U.S. federal income tax principles. Any amounts treated as a distribution and that are in excess of our current and accumulated earnings and profits will reduce the redeeming stockholder’s basis in his or her redeemed shares of KBL Common Stock, and any remaining amount will be treated as gain realized on the sale or other disposition of KBL Common Stock. These tax consequences are described in more detail in the section titled “Proposal No. 1 — The Business Combination Proposal — Material U.S. Federal Income Tax Considerations of the Redemption.” We urge you to consult your tax advisor regarding the tax consequences of exercising your redemption rights.

Q:     If I am a warrant holder, can I exercise redemption rights with respect to my warrants?

A:     No. The holders of our warrants have no redemption rights with respect to our warrants.

Q:     Do I have appraisal rights if I object to the proposed business combination?

A:     No. There are no appraisal rights available to holders of KBL Common Stock in connection with the business combination.

Q:     What happens to the funds deposited in the Trust Account after the Closing?

A:     If the Business Combination Proposal is approved, we intend to use a portion of the funds held in the Trust Account to pay (i) a portion of our aggregate costs, fees and expenses in connection with the consummation of the Transactions, (ii) tax obligations and deferred underwriting commissions from the IPO, (iii) any loans owed by us to our Sponsor or affiliates for any of our transaction expenses or other administrative expenses, and (iv) for any redemptions of public shares. The remaining balance in the Trust Account will be used for general corporate purposes including, but not limited to, working capital for operations of the combined company. See the section entitled “Proposal No. 1 — The Business Combination Proposal” for additional information.

Q:     What happens if the business combination is not consummated or is terminated?

A:     There are certain circumstances under which the Business Combination Agreement may be terminated. See the section entitled “Proposal No. 1 — The Business Combination Proposal — The Business Combination Agreement — Termination” for additional information regarding the parties’ specific termination rights. In accordance with our Charter, if an initial business combination is not consummated by December 9, 2019, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter subject to lawfully available funds therefor, redeem 100% of the public shares in consideration of a per share price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest not previously released to us to pay our franchise and income taxes (less up to $50,000 of such net interest to pay dissolution expenses), by (B) the total number of then outstanding public shares, which redemption will completely extinguish rights of the public stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under the General Corporation Law of the State of Delaware (the “DGCL”) to provide for claims of creditors and other requirements of applicable law.

We expect that the amount of any distribution our public stockholders will be entitled to receive upon its dissolution will be approximately the same as the amount they would have received if they had redeemed their shares in connection with the business combination, subject in each case to our obligations under the DGCL to provide for claims of creditors and other requirements of applicable law. Holders of our founder shares have waived any right to any liquidating distributions with respect to those shares.

In the event of liquidation, there will be no distribution with respect to our outstanding warrants. Accordingly, the warrants will expire worthless.

Q:     When is the business combination expected to be consummated?

A:     It is currently anticipated that the business combination will be consummated promptly following the special meeting to be held on ___________, 2019; provided that all the requisite stockholder approvals are obtained and other conditions to the Closing have been satisfied or waived. For a description of the conditions for the Closing, see the section entitled “Proposal No. 1 — The Business Combination Proposal — The Business Combination Agreement — Conditions to Closing of the Business Combination.”

Q:     What do I need to do now?

A:     You are urged to read carefully and consider the information contained in this proxy statement/prospectus, including “Risk Factors” and the annexes, and to consider how the business combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

Q:     How do I vote?

A:     If you were a holder of record of KBL Common Stock on _______, 2019, the record date for the special meeting, you may vote with respect to the Proposals in person at the special meeting or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the special meeting and vote in person, obtain a proxy from your broker, bank or nominee.

Q:     What will happen if I abstain from voting or fail to vote at the special meeting?

A:     At the special meeting, we will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, failure to vote or an abstention will have no effect on the Business Combination Proposal, the Nasdaq Proposal, the OIP Proposal or the Adjournment Proposal, but will have the same effect as a vote AGAINST each of the Charter Proposals.

Q:     What will happen if I sign and submit my proxy card without indicating how I wish to vote?

A:     Signed and dated proxies received by us without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the stockholders.

Q:     If I am not going to attend the special meeting in person, should I submit my proxy card instead?

A:     Yes. Whether you plan to attend the special meeting or not, please read the enclosed proxy statement/prospectus carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

Q:     If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

A:     No. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe the Proposals presented to the stockholders will be considered non-discretionary and, therefore, your broker, bank, or nominee cannot vote your shares without your instruction. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

Q:     May I change my vote after I have submitted my executed proxy card?

A:     Yes. You may change your vote by sending a later-dated, signed proxy card to our secretary at the address listed below so that it is received by our secretary prior to the special meeting or attend the special meeting in person and vote. You also may revoke your proxy by sending a notice of revocation to our secretary, which must be received prior to the special meeting.

Q:     What should I do if I receive more than one set of voting materials?

A:     You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

Q:     Who can help answer my questions?

A:     If you have questions about the Proposals or if you need additional copies of the proxy statement/prospectus or the enclosed proxy card you should contact us at:

KBL Merger Corp. IV
527 Stanton Christiana Rd.
Newark, Delaware 19713
Attention: Investor Relations
Telephone: (302) 502-2727

You may also contact our proxy solicitor at:

Advantage Proxy, Inc.
P.O. Box 13581
Des Moines, WA 98198
Attn: Karen Smith
Toll Free: (877) 870-8565
Collect: (206) 870-8565

To obtain timely delivery, our stockholders must request the materials no later than five business days prior to the special meeting.

You may also obtain additional information about us from documents filed with the United States Securities and Exchange Commission (the “SEC”) by following the instructions in the section entitled “Where You Can Find More Information.”

If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to our transfer agent at least two business days prior to the special meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding the certification of your position or delivery of your stock, please contact:

Continental Stock Transfer & Trust Company
One State Street Plaza, 30th Floor
New York, New York 10004
Attn: Mark Zimkind
E-mail: mzimkind@continentalstock.com

Q:     Who will solicit and pay the cost of soliciting proxies?

A:     We will pay the cost of soliciting proxies for the special meeting. We have engaged Advantage Proxy, Inc. (“Advantage Proxy”), to assist in the solicitation of proxies for the special meeting. We have agreed to pay Advantage Proxy a fee of $7,500, plus reimbursements for expenses. We will reimburse Advantage Proxy for reasonable out-of-pocket expenses and will indemnify Advantage Proxy and its affiliates against certain claims, liabilities, losses, damages and expenses. We will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of KBL Common Stock for their expenses in forwarding soliciting materials to beneficial owners of KBL Common Stock and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

RISK FACTORS

The following risk factors apply to the business and operations of CannBioRx and will also apply to its business and operations following the closing of the business combination. These risk factors are not exhaustive and investors are encouraged to perform their own investigation with respect to the business, financial condition and prospects of CannBioRx and its business, financial condition and prospects following the closing of the business combination. You should carefully consider the following risk factors in addition to the other information included in this proxy statement/prospectus, including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” CannBioRx may face additional risks and uncertainties that are not presently known to it, or that it currently deems immaterial, which may also impair its business or financial condition. The following discussion should be read in conjunction with CannBioRx’s financial statements and notes to the financial statements included herein. References in these risk factors refer to CannBioRx Life Sciences Corp. and its consolidated subsidiaries.

Risks Related to the Business of CannBioRx

CannBioRx is dependent on the success of its future product candidates, some of which may not receive regulatory approval or be successfully commercialized.

CannBioRx’s success will depend on its ability to successfully develop and commercialize its future product candidates through its development programs, including its product candidate for the treatment of Dupuytren’s disease and any other product candidates developed through CannBioRx’s fibrosis & anti-TNF, CBD derivatives, and α7nAChR development platforms. CannBioRx may never be able to develop products which receive regulatory approval in the U.S. or elsewhere. There can be no assurance that the Food and Drug Administration (“FDA”), European Medicines Agency (“EMA”) or any other regulatory authority will approve these product candidates.

CannBioRx’s ability to successfully commercialize its future product candidates will depend on, among other things, its ability to:

•        successfully complete pre-clinical and other non-clinical studies and clinical trials; and

•        receive regulatory approvals from the FDA and similar foreign regulatory authorities.

Delays in the regulatory process could have a material adverse effect on CannBioRx’s business, results of operations and financial condition.

CannBioRx’s independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about its ability to continue as a “going concern.”

During the period from January 28, 2019 (Inception) to June 30, 2019, CannBioRx did not generate any revenues and had a net loss of $1,050,000. CannBioRx did not use any cash in its operations during that period. As of June 30, 2019, CannBioRx had notes payable totaling $1,050,000, a working capital deficit of $1,050,000, and a stockholder’s deficit of $1,050,000. On August 21, 2019, CannBioRx borrowed an additional $250,000 from the CannBioRx Parties and loaned that amount to KBL. CannBioRx’s primary source of operating funds since its inception has been debt and convertible debt financing and it is currently funding its operations on a month-to-month basis. Management’s plans consist of continuing efforts to pursue the business combination. However, there is no assurance that CannBioRx will complete the business combination or attain profitable operations. If CannBioRx is unable to complete the business combination and/or attain profitable operations, it would have a material adverse effect on CannBioRx’s financial condition and activities, and ultimately CannBioRx could be forced to discontinue its operations and liquidate. The financial statements contained elsewhere in this proxy statement/prospectus do not include any adjustments that might result from CannBioRx’s inability to consummate the business combination or its inability to continue as a going concern.

CannBioRx has recently grown its business and will need to increase the size and complexity of its organization in the future, and CannBioRx may experience difficulties in managing its growth and executing its growth strategy.

CannBioRx’s management, personnel and systems currently in place may not be adequate to support its business plan and future growth. CannBioRx will need to increase its number of full-time equivalent employees in order to conduct Phase 1, 2 and 3 clinical trials of its future products and to establish a commercial organization and commercial infrastructure. As a result of these future activities, the complexity of its business operations is

expected to substantially increase. CannBioRx will need to develop and expand its scientific, manufacturing, sales and marketing, managerial, compliance, operational, financial and other resources to support its planned research, development, manufacturing and commercialization activities.

CannBioRx’s need to effectively manage its operations, growth and various projects requires that it:

•        continue to improve its operational, financial, management and regulatory compliance controls and reporting systems and procedures;

•        attract and retain sufficient numbers of talented employees;

•        manage its commercialization activities effectively and in a cost-effective manner (currently trial and development for its clinical trials is very cost effective);

•        manage its clinical trials effectively; this is mitigated by using a clinical trials team known to CannBioRx that have previously demonstrated a robust and highly efficient delivery of service;

•        manage its internal manufacturing operations effectively and in a cost effective manner;

•        manage its development efforts effectively while carrying out its contractual obligations to contractors and other third parties; and

•        continue to improve its facilities.

CannBioRx has utilized and continues to utilize the services of part-time outside consultants and contractors to perform a number of tasks for CannBioRx, including tasks related to compliance programs, clinical trial management, regulatory affairs, formulation development and other drug development functions. CannBioRx’s growth strategy may entail expanding its use of consultants and contractors to implement these and other tasks going forward. If CannBioRx is not able to effectively expand its organization by hiring new employees and expanding its use of consultants and contractors, CannBioRx may be unable to successfully implement the tasks necessary to effectively execute on its planned research, development, manufacturing and commercialization activities and, accordingly, may not achieve its research, development and commercialization goals.

CannBioRx has significant and increasing liquidity needs and may require additional funding.

Research and development, management and administrative expenses and cash used for operations will continue to be significant and may increase substantially in the future in connection with new research and development initiatives, continued product commercialization efforts and the launch of CannBioRx’s future product candidates. CannBioRx may need to raise additional capital to fund its operations, continue to conduct clinical trials to support potential regulatory approval of marketing applications, and to fund commercialization of its future product candidates.

The amount and timing of CannBioRx’s future funding requirements will depend on many factors, including, but not limited to:

•        the timing of FDA approval, if any, and approvals in international markets of its future product candidates, if at all;

•        the timing and amount of revenue from sales of its products, or revenue from grants or other sources;

•        the rate of progress and cost of its clinical trials and other product development programs;

•        costs of establishing or outsourcing sales, marketing and distribution capabilities;

•        costs and timing of completion of expanded in-house manufacturing facilities as well as any outsourced growing and commercial manufacturing supply arrangements for its future product candidates;

•        costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights associated with its future product candidates;

•        the effect of competing technological and market developments;

•        personnel, facilities and equipment requirements; and

•        the terms and timing of any additional collaborative, licensing, co-promotion or other arrangements that CannBioRx may establish.

While CannBioRx expects to fund its future capital requirements from a number of sources, such as cash flow from operations and the proceeds from further public and/or private offerings by KBL, including a private placement of shares of KBL Common Stock and/or backstop arrangements with potential investors, CannBioRx cannot assure you that any of these funding sources will be available to it on favorable terms, or at all. Further, even if CannBioRx can raise funds from all of the above sources, the amounts raised may not be sufficient to meet its future capital requirements.

Operating results may vary significantly in future periods.

CannBioRx’s quarterly revenues, expenses and operating results have fluctuated in the past and are likely to fluctuate significantly in the future. CannBioRx’s financial results are unpredictable and may fluctuate, for among other reasons, due to:

•        commercial sales of its future product candidates;

•        its achievement of product development objectives and milestones;

•        clinical trial enrollment and expenses;

•        research and development expenses; and

•        the timing and nature of contract manufacturing and contract research payments.

A high portion of CannBioRx’s costs are predetermined on an annual basis, due in part to its significant research and development costs. Thus, small declines in revenue could disproportionately affect financial results in a quarter.

CannBioRx depends on its current key personnel and its ability to attract and retain employees.

CannBioRx’s future growth and success depends on its ability to recruit, retain, manage and motivate its employees. CannBioRx is highly dependent on its current management and scientific personnel, including its Co-Chairmen, Sir Marc Feldman, Ph.D., and Lawrence Steinman, M.D., its Chief Scientific Officer, Jonathan Rothbard, Ph.D., and its scientists Raphael Mechoulam and Jagdeep Nanchahal. The inability to hire or retain experienced management personnel could adversely affect its ability to execute its business plan and harm its operating results. Due to the specialized scientific and managerial nature of its business, CannBioRx relies heavily on its ability to attract and retain qualified scientific, technical and managerial personnel. The competition for qualified personnel in the pharmaceutical field is intense and CannBioRx may be unable to continue to attract and retain qualified personnel necessary for the development of its business or to recruit suitable replacement personnel.

Problems in CannBioRx’s manufacturing process for their new chemical entities, failure to comply with manufacturing regulations or unexpected increases in its manufacturing costs could harm its business, results of operations and financial condition.

CannBioRx is responsible for the manufacture and supply of its future product candidates in the CBD derivatives and α7nAChR programs for commercial use and for use in clinical trials. The manufacturing of its future product candidates necessitates compliance with Good Manufacturing Practice regulations (“GMPs”) and other regulatory requirements in jurisdictions internationally. CannBioRx’s ability to successfully manufacture its future product candidates will involve manufacture of finished products and labeling and packaging, which includes product information, tamper proof evidence and anti-counterfeit features, under tightly controlled processes and procedures. In addition, CannBioRx will have to ensure chemical consistency among its batches, including clinical trial batches and, if approved, marketing batches. Demonstrating such consistency may require typical manufacturing controls as well as clinical data. CannBioRx will also have to ensure that its batches conform to complex release specifications. If CannBioRx is unable to manufacture its future product candidates in accordance with regulatory specifications, including GMPs or if there are disruptions in its manufacturing process due to

damage, loss or otherwise, or failure to pass regulatory inspections of its manufacturing facilities, CannBioRx may not be able to meet demand or supply sufficient product for use in clinical trials, and this may also harm its ability to commercialize its future product candidates on a timely or cost-competitive basis, if at all.

CannBioRx may fail to develop and expand its manufacturing capability in time to meet market demand for its future product candidates, and the FDA or foreign regulatory authorities may refuse to accept its facilities or those of its contract manufactures as being suitable for the production of its products and product candidates. Any problems in its manufacturing process could have a material adverse effect on its business, results of operations and financial condition.

CannBioRx expects to face intense competition, often from companies with greater resources and experience than CannBioRx.

The pharmaceutical industry is highly competitive and subject to rapid change. The industry continues to expand and evolve as an increasing number of competitors and potential competitors enter the market. Many of these competitors and potential competitors have substantially greater financial, technological, managerial and research and development resources and experience than CannBioRx. Some of these competitors and potential competitors have more experience than CannBioRx in the development of pharmaceutical products, including validation procedures and regulatory matters. In addition, its future product candidates, if successfully developed, will compete with product offerings from large and well-established companies that have greater marketing and sales experience and capabilities than CannBioRx or its collaboration partners have. In particular, Insys Therapeutics, Inc. is developing CBD in Infantile Spasms (“IS”), and potentially other indications. Zogenix, Inc. has reported positive data in two Phase 3 trials of low dose fenfluramine in Dravet syndrome and has commenced a Phase 3 trial with this product in Lennox Gastaut Syndrome. Biocodex recently received regulatory approval from the FDA for the drug Stiripentol (Diacomit) for the treatment of Dravet syndrome. Other companies with greater resources than CannBioRx may announce similar plans in the future. In addition, there are non-FDA approved CBD preparations being made available from companies in the medical marijuana industry, which might attempt to compete with its future product candidates. If CannBioRx is unable to compete successfully, its commercial opportunities will be reduced and its business, results of operations and financial conditions may be materially harmed.

CannBioRx’s future product candidates, if approved, may be unable to achieve the expected market acceptance and, consequently, limit its ability to generate revenue from new products.

Even when product development is successful and regulatory approval has been obtained, CannBioRx’s ability to generate sufficient revenue depends on the acceptance of its products by physicians and patients. CannBioRx cannot assure you that any of its future product candidates will achieve the expected level of market acceptance and revenue if and when they obtain the requisite regulatory approvals. The market acceptance of any product depends on a number of factors, including the indication statement, warnings required by regulatory authorities in the product label and new competing products. Market acceptance can also be influenced by continued demonstration of efficacy and safety in commercial use, physicians’ willingness to prescribe the product, reimbursement from third-party payors such as government health care programs and private third-party payors, the price of the product, the nature of any post-approval risk management activities mandated by regulatory authorities, competition, and marketing and distribution support. Further, CannBioRx’s U.S. distribution depends on the adequate performance of a reimbursement support hub and contracted specialty pharmacies in a closed-distribution network. An ineffective or inefficient U.S. distribution model at launch may lead to inability to fulfill demand, and consequently a loss of revenue. The success and acceptance of a product in one country may be negatively affected by its activities in another. If CannBioRx fails to adapt its approach to clinical trials in the U.S. market to meet the needs of EMA or other European regulatory authorities, or to generate the health economics and outcomes research data needed to support pricing and reimbursement negotiations or decisions in Europe, CannBioRx may have difficulties obtaining marketing authorization for its products from EMA/European Commission and may have difficulties obtaining pricing and reimbursement approval for its products at a national level. Any factors preventing or limiting the market acceptance of its products could have a material adverse effect on its business, results of operations and financial condition.

Because the results of preclinical studies and earlier clinical trials are not necessarily predictive of future results, CannBioRx may not have favourable results in its planned and future clinical trials.

Any positive results from CannBioRx’s preclinical testing, Phase 1 and Phase 2 clinical trials of its product candidate for Dupuytren’s disease or any other product candidate may not necessarily be predictive of the results from planned or future clinical trials for such product candidates. Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in clinical trials after achieving positive results in preclinical and early clinical development, and CannBioRx cannot be certain that it will not face similar setbacks. These setbacks have been caused by, among other things, preclinical findings while clinical trials were underway or safety or efficacy observations in clinical trials, including adverse events. Moreover, CannBioRx’s interpretation of clinical data or its conclusions based on the preclinical in vitro and in vivo models may prove inaccurate, as preclinical and clinical data can be susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA approval or a marketing authorization granted by the European Commission. If CannBioRx fails to produce positive results in its planned clinical trial for its product candidate for the treatment of Dupuytren’s disease, or its future clinical trials, the development timeline and regulatory approval and commercialization prospects for such product candidates, and, correspondingly, its business and financial prospects, would be materially adversely affected.

CannBioRx has limited marketing experience, and it may not be able to successfully commercialize any of its future product candidates, even if they are approved in the future.

CannBioRx’s ability to generate revenues ultimately will depend on its ability to sell its approved products and secure adequate third-party reimbursement. CannBioRx currently has no experience in marketing and selling its products.

The commercial success of CannBioRx’s future products depends on a number of factors beyond its control, including the willingness of physicians to prescribe its future products to patients, payors’ willingness and ability to pay for its future products, the level of pricing achieved, patients’ response to its future products, and the ability of its future marketing partners to generate sales. There can be no guarantee that CannBioRx will be able to establish or maintain the personnel, systems, arrangements and capabilities necessary to successfully commercialize its future products or any product candidate approved by the FDA or other regulatory authority in the future. If CannBioRx fails to establish or maintain successful marketing, sales and reimbursement capabilities or fails to enter into successful marketing arrangements with third parties, its product revenues may suffer.

If the price for any of CannBioRx’s future approved products decreases or if governmental and other third-party payors do not provide coverage and adequate reimbursement levels, its revenue and prospects for profitability will suffer.

Patients who are prescribed medicine for the treatment of their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their prescription drugs. Reimbursement systems in international markets vary significantly by country and by region, and reimbursement approvals generally must be obtained on a country-by-country basis. Coverage and adequate reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payors is critical to new product acceptance. Coverage decisions may depend upon clinical and economic standards that disfavor new drug products when more established or lower cost therapeutic alternatives are already available or subsequently become available. Even if CannBioRx obtains coverage for its future product candidates, the resulting reimbursement payment rates may require co-payments that patients find unacceptably high. Patients may not use CannBioRx’s future product candidates if coverage is not provided or reimbursement is inadequate to cover a significant portion of a patient’s cost.

In addition, the market for CannBioRx’s future product candidates in the U.S. will depend significantly on access to third-party payors’ drug formularies, or lists of medications for which third-party payors provide coverage and reimbursement. The industry competition to be included in such formularies often leads to downward pricing pressures on pharmaceutical companies. Also, third-party payors may refuse to include a particular branded drug in their formularies or otherwise restrict patient access to a branded drug when a less costly generic equivalent or other alternative is available.

Third-party payors, whether foreign or domestic, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs. The current environment is putting pressure on companies to price products below what they may feel is appropriate. CannBioRx’s future revenues and overall success could be negatively impacted if it sells future product candidates at less than an optimized price. In addition, in the U.S., no uniform policy of coverage and reimbursement for drug products exists among third-party payors. Therefore, coverage and reimbursement for its future product candidates may differ significantly from payor to payor. As a result, the coverage determination process is often a time-consuming and costly process that will require CannBioRx to provide scientific and clinical support for the use of its future product candidates to each payor separately, with no assurance that coverage will be obtained. If CannBioRx is unable to obtain coverage of, and adequate payment levels for, its future product candidates, physicians may limit how much or under what circumstances they will prescribe or administer them and patients may decline to purchase them. This in turn could affect CannBioRx’s ability to successfully commercialize its future product candidates, and thereby adversely impact its profitability, results of operations, financial condition, and future success.

In addition, where CannBioRx has chosen to collaborate with a third party on product candidate development and commercialization, its partner may elect to reduce the price of its products to increase the likelihood of obtaining reimbursement approvals. In many countries, products cannot be commercially launched until reimbursement is approved and the negotiation process in some countries can exceed 12 months. In addition, pricing and reimbursement decisions in certain countries can be affected by decisions made in other countries, which can lead to mandatory price reductions and/or additional reimbursement restrictions across a number of other countries, which may adversely affect CannBioRx’s sales and profitability. In the event that countries impose prices that are not sufficient to allow CannBioRx or its partners to generate a profit, its partners may refuse to launch the product in such countries or withdraw the product from the market, which would adversely affect sales and profitability.

Business interruptions could delay CannBioRx in the process of developing its future product candidates and could disrupt its product sales.

Loss of CannBioRx’s manufacturing facilities, stored inventory or laboratory facilities through fire, theft or other causes, could have an adverse effect on its ability to meet demand for its future product candidates or to continue product development activities and to conduct its business. Failure to supply its partners with commercial products may lead to adverse consequences, including the right of partners to take over responsibility for product supply. Even if CannBioRx obtains insurance coverage to compensate it for such business interruptions, such coverage may prove insufficient to fully compensate CannBioRx for the damage to its business resulting from any significant property or casualty loss to its inventory.

If product liability lawsuits are successfully brought against CannBioRx, CannBioRx will incur substantial liabilities and may be required to limit the commercialization of its future product candidates.

Although CannBioRx has never had any product liability claims or lawsuits brought against it, CannBioRx faces potential product liability exposure related to the testing of its future product candidates in human clinical trials, and CannBioRx will face exposure to claims in jurisdictions where it markets and distributes its products in the future. CannBioRx may face exposure to claims by an even greater number of persons when CannBioRx begins marketing and distributing its products commercially in the U.S. and elsewhere. In the future, an individual may bring a liability claim against CannBioRx alleging that one of its future product candidates caused an injury. While CannBioRx continues to take what it believes are appropriate precautions, CannBioRx may be unable to avoid significant liability if any product liability lawsuit is brought against it. Large judgments have been awarded in class action or individual lawsuits based on drugs that had unanticipated side effects. Although CannBioRx has purchased insurance to cover product liability lawsuits, if CannBioRx cannot successfully defend itself against product liability claims, or if such insurance coverage is inadequate, CannBioRx will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

•        decreased demand for its future product candidates if such product candidates are approved;

•        injury to its reputation;

•        withdrawal of clinical trial participants;

•        costs of related litigation;

•        costs of product recall and subsequent product reformulation and development;

•        substantial monetary awards to patients and others;

•        increased cost of liability insurance;

•        loss of revenue; and

•        the inability to successfully commercialize its products.

CannBioRx’s employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and legal requirements.

CannBioRx is exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional failures to comply with FDA, SEC or Office of Inspector General regulations, or regulations of any other applicable regulatory authority, failure to provide accurate information to the FDA or the SEC, comply with applicable manufacturing standards, other federal, state or foreign laws and regulations, report information or data accurately or disclose unauthorized activities. Employee misconduct could also involve the improper use of information, including information obtained in the course of clinical trials, or illegal appropriation of drug product, which could result in government investigations and serious harm to its reputation. CannBioRx has not yet adopted a Code of Business Conduct and Ethics, but will do so in the future. However, employee misconduct is not always possible to identify and deter. The precautions CannBioRx takes to detect and prevent these prohibited activities may not be effective in controlling unknown or unmanaged risks or losses or in protecting CannBioRx from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against CannBioRx, and CannBioRx is not successful in defending itself or asserting its rights, those actions could have a significant impact on its business, including the imposition of significant fines or other sanctions.

CannBioRx is subject to the U.S. Foreign Corrupt Practices Act and other anti-corruption laws, as well as export control laws, customs laws, sanctions laws and other laws governing CannBioRx’s operations. If CannBioRx fails to comply with these laws, it could be subject to civil or criminal penalties, other remedial measures, and legal expenses, which could adversely affect its business, results of operations and financial condition.

CannBioRx’s operations are subject to anti-corruption laws, including the U.S. Foreign Corrupt Practices Act (“FCPA”), and other anti-corruption laws that apply in countries where CannBioRx does business. The FCPA and these other laws generally prohibit CannBioRx and its employees and intermediaries from bribing, being bribed or making other prohibited payments to government officials or other persons to obtain or retain business or gain some other business advantage. CannBioRx and its commercial partners operate in a number of jurisdictions that pose a high risk of potential FCPA violations, and CannBioRx participates in collaborations and relationships with third parties whose actions could potentially subject it to liability under the FCPA or local anti-corruption laws. In addition, CannBioRx cannot predict the nature, scope or effect of future regulatory requirements to which its international operations might be subject or the manner in which existing laws might be administered or interpreted.

CannBioRx is also subject to other laws and regulations governing its international operations, including regulations administered by the governments of the U.S., Canada, Israel, the United Kingdom and authorities in the European Union, including applicable export control regulations, economic sanctions on countries and persons, customs requirements and currency exchange regulations, collectively referred to as the Trade Control Laws.

However, there is no assurance that CannBioRx will be completely effective in ensuring its compliance with all applicable anti-corruption laws, including the FCPA or other legal requirements, including Trade Control Laws. If CannBioRx is not in compliance with the FCPA and other anti-corruption laws or Trade Control Laws, CannBioRx may be subject to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses, which could have an adverse impact on its business, financial condition, results of operations and liquidity. Likewise, any investigation of any potential violations of the FCPA, other anti-corruption laws by the U.S. or other authorities could also have an adverse impact on its reputation, its business, financial condition and results of operations.

CannBioRx’s proprietary information, or that of CannBioRx’s customers, suppliers and business partners, may be lost or CannBioRx may suffer security breaches.

In the ordinary course of CannBioRx’s business, it expects to collect and store sensitive data, including valuable and commercially sensitive intellectual property, clinical trial data, its proprietary business information and that of its future customers, suppliers and business partners, and personally identifiable information of its customers, clinical trial subjects and employees, patients, in its data centers and on its networks. The secure processing, maintenance and transmission of this information is critical to CannBioRx’s operations. Despite CannBioRx’s security measures, its information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise its networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disrupt CannBioRx’s operations, damage its reputation, and cause a loss of confidence in its products and its ability to conduct clinical trials, which could adversely affect its business and reputation and lead to delays in gaining regulatory approvals for its future product candidates. Although CannBioRx maintains business interruption insurance coverage, its insurance might not cover all losses from any future breaches of its systems.

Failure of CannBioRx’s information technology systems, including cybersecurity attacks or other data security incidents, could significantly disrupt the operation of its business.

CannBioRx’s business increasingly depends on the use of information technologies, which means that certain key areas such as research and development, production and sales are to a large extent dependent on its information systems or those of third party providers. CannBioRx’s ability to execute its business plan and to comply with regulators’ requirements with respect to data control and data integrity, depends, in part, on the continued and uninterrupted performance of its information technology systems, or IT systems and the IT systems supplied by third-party service providers. As information systems and the use of software and related applications by CannBioRx, its business partners, suppliers, and customers become more cloud-based, there has been an increase in global cybersecurity vulnerabilities and threats, including more sophisticated and targeted cyber-related attacks that pose a risk to the security of its information systems and networks and the confidentiality, availability and integrity of data and information. In addition, CannBioRx’s IT systems are vulnerable to damage from a variety of sources, including telecommunications or network failures, malicious human acts and natural disasters. Moreover, despite network security and backup measures, some of its servers are potentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptive problems. Despite the precautionary measures CannBioRx and its third-party service providers have taken to prevent unanticipated problems that could affect its IT systems, a successful cybersecurity attack or other data security incident could result in the misappropriation and/or loss of confidential or personal information, create system interruptions, or deploy malicious software that attacks its systems. It is also possible that a cybersecurity attack might not be noticed for some period of time. In addition, sustained or repeated system failures or problems arising during the upgrade of any of CannBioRx’s IT systems that interrupt its ability to generate and maintain data, and in particular to operate its proprietary technology platform, could adversely affect its ability to operate its business. The occurrence of a cybersecurity attack or incident could result in business interruptions from the disruption of CannBioRx’s IT systems, or negative publicity resulting in reputational damage with its shareholders and other stakeholders and/or increased costs to prevent, respond to or mitigate cybersecurity events. In addition, the unauthorized dissemination of sensitive personal information or proprietary or confidential information could expose CannBioRx or other third-parties to regulatory fines or penalties, litigation and potential liability, or otherwise harm its business.

Security breaches, loss of data and other disruptions could compromise sensitive information related to CannBioRx’s business, prevent it from accessing critical information or expose it to liability, which could adversely affect CannBioRx’s business and its reputation.

In the ordinary course of CannBioRx’s business, it expects to collect and store sensitive data, including legally protected patient health information, credit card information, personally identifiable information about its employees, intellectual property, and proprietary business information. CannBioRx expects to manage and maintain its applications and data utilizing on-site systems. These applications and data encompass a wide variety of business critical information including research and development information, commercial information and business and financial information.

The secure processing, storage, maintenance and transmission of this critical information is vital to CannBioRx’s operations and business strategy, and CannBioRx devotes significant resources to protecting such information. Although CannBioRx takes measures to protect sensitive information from unauthorized access or disclosure, its information technology and infrastructure may be vulnerable to attacks by hackers, or viruses, breaches or interruptions due to employee error, malfeasance or other disruptions, or lapses in compliance with privacy and security mandates. Any such virus, breach or interruption could compromise CannBioRx’s networks and the information stored there could be accessed by unauthorized parties, publicly disclosed, lost or stolen. CannBioRx has measures in place that are designed to prevent, and if necessary, to detect and respond to such security incidents and breaches of privacy and security mandates. However, in the future, any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, such as HIPAA and European Union General Data Protection Regulation (“GDPR”), government enforcement actions and regulatory penalties. Unauthorized access, loss or dissemination could also disrupt CannBioRx’s operations, including its ability to process samples, provide test results, share and monitor safety data, bill payors or patients, provide customer support services, conduct research and development activities, process and prepare company financial information, manage various general and administrative aspects of its business and may damage its reputation, any of which could adversely affect its business, financial condition and results of operations.

In May 2016, the European Union formally adopted the GDPR, which applies to all European Union member states and became effective on May 25, 2018 and replaced the European Union Data Protection Directive. The regulation introduces stringent new data protection requirements in the European Union and substantial fines for breaches of the data protection rules. It may increase CannBioRx’s responsibility and liability in relation to personal data that it processes and CannBioRx may be required to put in place additional mechanisms ensuring compliance with the new European Union data protection rules. The GDPR is a complex law and the regulatory guidance is still evolving, including with respect to how the GDPR should be applied in the context of clinical trials or other transactions from which CannBioRx may gain access to personal data. These changes in the law will increase its costs of compliance and result in greater legal risks.

CannBioRx may acquire other companies which could divert CannBioRx’s management’s attention, result in additional dilution to its shareholders and otherwise disrupt its operations and harm its operating results.

CannBioRx may in the future seek to acquire businesses, products or technologies that CannBioRx believes could complement or expand its product offerings, enhance its technical capabilities or otherwise offer growth opportunities. The pursuit of potential acquisitions may divert the attention of management and cause CannBioRx to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated. If CannBioRx acquires additional businesses, it may not be able to integrate the acquired personnel, operations and technologies successfully, effectively manage the combined business following the acquisition or realize anticipated cost savings or synergies. CannBioRx also may not achieve the anticipated benefits from the acquired business due to a number of factors, including:

•        incurrence of acquisition-related costs;

•        diversion of management’s attention from other business concerns;

•        unanticipated costs or liabilities associated with the acquisition;

•        harm to its existing business relationships with collaboration partners as a result of the acquisition;

•        harm to its brand and reputation;

•        the potential loss of key employees;

•        use of resources that are needed in other parts of its business; and

•        use of substantial portions of its available cash to consummate the acquisition.

In the future, if CannBioRx’s acquisitions do not yield expected returns, CannBioRx may be required to take charges to its operating results arising from the impairment assessment process. Acquisitions may also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect its operating results. In addition, if an acquired business fails to meet its expectations, its business, results of operations and financial condition may be adversely affected.

Risks Related to Development and Regulatory Approval of CannBioRx’s Future Product Candidates

Clinical trials are expensive, time-consuming, uncertain and susceptible to change, delay or termination. The results of clinical trials are open to differing interpretations.

CannBioRx has three separate programs for producing anti-inflammatory agents: (1) investigating new clinical opportunities for anti-TNF, (2) identifying orally available, small molecules that are agonists of a7 nicotinic acetylcholine receptor, and (3) identifying patentable analogs of CBD that initially will be used as pain medications. However, these programs, including the related clinical trials, are expensive, time consuming and difficult to design and implement.

Regulatory agencies may analyze or interpret the results of clinical trials differently than CannBioRx. Even if the results of CannBioRx’s clinical trials are favorable, the clinical trials for a number of its future product candidates are expected to continue for several years and may take significantly longer to complete. In addition, the FDA or other regulatory authorities, including state, local and foreign authorities, or an Institutional Review Board (“IRB”), with respect to a trial at CannBioRx’s institution, may suspend, delay or terminate its clinical trials at any time, require CannBioRx to conduct additional clinical trials, require a particular clinical trial to continue for a longer duration than originally planned, require a change to its development plans such that it conducts clinical trials for a product candidate in a different order, e.g., in a step-wise fashion rather than running two trials of the same product candidate in parallel, or could suspend or terminate the registrations and quota allotments CannBioRx requires in order to procure and handle controlled substances, for various reasons, including:

•        lack of effectiveness of any product candidate during clinical trials;

•        discovery of serious or unexpected toxicities or side effects experienced by trial participants or other safety issues, such as drug interactions, including those which cause confounding changes to the levels of other concomitant medications;

•        slower than expected rates of subject recruitment and enrollment rates in clinical trials;

•        difficulty in retaining subjects who have initiated a clinical trial but may withdraw at any time due to adverse side effects from the therapy, insufficient efficacy, fatigue with the clinical trial process or for any other reason;

•        delays or inability in manufacturing or obtaining sufficient quantities of materials for use in clinical trials due to regulatory and manufacturing constraints;

•        inadequacy of or changes in its manufacturing process or product formulation;

•        delays in obtaining regulatory authorization to commence a trial, including “clinical holds” or delays requiring suspension or termination of a trial by a regulatory agency, such as the FDA, before or after a trial is commenced;

•        Drug Enforcement Administration (“DEA”) related recordkeeping, reporting security or other violations at a clinical site, leading the DEA or state authorities to suspend or revoke the site’s controlled substance license and causing a delay or termination of planned or ongoing trials;

•        changes in applicable regulatory policies and regulation, including changes to requirements imposed on the extent, nature or timing of studies;

•        delays or failure in reaching agreement on acceptable terms in clinical trial contracts or protocols with prospective clinical trial sites;

•        uncertainty regarding proper dosing;

•        delay or failure to supply product for use in clinical trials which conforms to regulatory specification;

•        unfavorable results from ongoing pre-clinical studies and clinical trials;

•        failure of its contract research organizations (“CROs”), or other third-party contractors to comply with all contractual requirements or to perform their services in a timely or acceptable manner;

•        failure by CannBioRx, its employees, its CROs or their employees to comply with all applicable FDA or other regulatory requirements relating to the conduct of clinical trials;

•        scheduling conflicts with participating clinicians and clinical institutions;

•        failure to design appropriate clinical trial protocols;

•        regulatory concerns with CBD derivative products generally and the potential for abuse, despite only working with non-plant based non-psychoactive products;

•        insufficient data to support regulatory approval;

•        inability or unwillingness of medical investigators to follow its clinical protocols; or

•        difficulty in maintaining contact with patients during or after treatment, which may result in incomplete data.

Any of the foregoing could have a material adverse effect on CannBioRx’s business, financial condition and results of operations.

Any failure by CannBioRx to comply with existing regulations could harm its reputation and operating results.

CannBioRx is subject to extensive regulation by U.S. federal and state and foreign governments in each of the U.S., European and Canadian markets, in which CannBioRx plans to sell its products, or in markets where CannBioRx has product candidates progressing through the approval process.

CannBioRx must adhere to all regulatory requirements including FDA’s Good Laboratory Practice (“GLP”), Good Clinical Practice (“GCP”), and GMP requirements, pharmacovigilance requirements, advertising and promotion restrictions, reporting and recordkeeping requirements, and their European equivalents. If CannBioRx or its suppliers fail to comply with applicable regulations, including FDA pre-or post-approval requirements, then the FDA or other foreign regulatory authorities could sanction CannBioRx. Even if a drug is approved by the FDA or other competent authorities, regulatory authorities may impose significant restrictions on a product’s indicated uses or marketing or impose ongoing requirements for potentially costly post-marketing trials. Any of CannBioRx’s product candidates which may be approved in the U.S. will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, distribution, import, export, advertising, promotion, sampling, recordkeeping and submission of safety and other post-market information, including both federal and state requirements. In addition, manufacturers and manufacturers’ facilities are required to comply with extensive FDA requirements, including ensuring that quality control and manufacturing procedures conform to GMP. As such, CannBioRx and its contract manufacturers (in the event contract manufacturers are appointed in the future) are subject to continual review and periodic inspections to assess compliance with GMP. Accordingly, CannBioRx and others with whom it works will have to spend time, money and effort in all areas of regulatory compliance, including manufacturing, production, quality control and quality assurance. CannBioRx will also be required to report certain adverse reactions and production problems, if any, to the FDA, and to comply with requirements concerning advertising and promotion for its products. Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved label. Similar restrictions and requirements exist in the European Union and other markets where CannBioRx operates.

If a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, or disagrees with the promotion, marketing or labeling of the product, it may impose restrictions on that product or on CannBioRx, including requiring withdrawal of the product from the market. If CannBioRx fails to comply with applicable regulatory requirements, a regulatory agency or enforcement authority may:

•        issue warning letters;

•        impose civil or criminal penalties;

•        suspend regulatory approval;

•        suspend any of its ongoing clinical trials;

•        refuse to approve pending applications or supplements to approved applications submitted by it;

•        impose restrictions on its operations, including by requiring it to enter in to a Corporate Integrity Agreement or closing its contract manufacturers’ facilities, if any; or

•        seize or detain products or require a product recall.

In addition, it is possible that CannBioRx’s future products will be regulated by the DEA, under the Controlled Substances Act or under similar laws elsewhere. DEA scheduling is a separate process that can delay when a drug may become available to patients beyond an NDA approval date, and the timing and outcome of such DEA process is uncertain. See also “Risks Related to Controlled Substances.”

In addition, any government investigation of alleged violations of law could require CannBioRx to spend significant time and resources in response, and could generate negative publicity. Any failure to comply with ongoing regulatory requirements may significantly and adversely affect CannBioRx’s ability to commercialize and generate revenue from its future product candidates. If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of its business and its operating results may be adversely affected.

Any action against CannBioRx for violation of these laws, even if CannBioRx successfully defends against it, could cause CannBioRx to incur significant legal expenses, divert its management’s attention from the operation of its business and damage its reputation. CannBioRx expects to spend significant resources on compliance efforts and such expenses are unpredictable. Changing laws, regulations and standards might also create uncertainty, higher expenses and increase insurance costs. As a result, CannBioRx intends to invest all reasonably necessary resources to comply with evolving standards, and this investment might result in increased management and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.

CannBioRx is subject to federal, state and foreign healthcare laws and regulations and implementation of or changes to such healthcare laws and regulations could adversely affect CannBioRx’s business and results of operations.

In both the U.S. and certain foreign jurisdictions, there have been a number of legislative and regulatory proposals to change the healthcare system in ways that could impact CannBioRx’s ability to sell its future product candidates. If CannBioRx is found to be in violation of any of these laws or any other federal, state or foreign regulations, CannBioRx may be subject to administrative, civil and/or criminal penalties, damages, fines, individual imprisonment, exclusion from federal health care programs and the restructuring of its operations. Any of these could have a material adverse effect on CannBioRx’s business and financial results. Since many of these laws have not been fully interpreted by the courts, there is an increased risk that CannBioRx may be found in violation of one or more of their provisions. Any action against CannBioRx for violation of these laws, even if CannBioRx ultimately is successful in its defense, will cause it to incur significant legal expenses and divert its management’s attention away from the operation of its business. In addition, in many foreign countries, particularly the countries of the European Union, the pricing of prescription drugs is subject to government control.

In some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricing vary widely from country to country.

For example, some European Union jurisdictions operate positive and negative list systems under which products may only be marketed once a reimbursement price has been agreed. To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare the cost-effectiveness of a particular product candidate to currently available therapies. Other member states allow companies to fix their own prices for medicines but monitor and control company profits. Such differences in national pricing regimes may create price differentials between European Union member states. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of CannBioRx’s products. Historically, products launched in the European Union do not follow price structures of the U.S. In the European Union, the downward pressure on healthcare costs in general, particularly prescription medicines, has become intense. As a result, barriers to entry of new products are becoming

increasingly high and patients are unlikely to use a drug product that is not reimbursed by their government. CannBioRx may face competition from lower-priced products in foreign countries that have placed price controls on pharmaceutical products. In addition, the importation of foreign products may compete with any future product that CannBioRx may market, which could negatively impact its profitability.

Specifically in the U.S., CannBioRx expects that the 2010 Affordable Care Act (“ACA”), as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that CannBioRx may receive for any approved product. There have been judicial challenges to certain aspects of the ACA and numerous legislative attempts to repeal and/or replace the ACA in whole or in part, and CannBioRx expects there will be additional challenges and amendments to the ACA in the future. At this time, the full effect that the ACA will have on its business in the future remains unclear. An expansion in the government’s role in the U.S. healthcare industry may cause general downward pressure on the prices of prescription drug products, lower reimbursements or any other product for which CannBioRx obtains regulatory approval, reduce product utilization and adversely affect its business and results of operations. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent CannBioRx from being able to generate revenue, attain profitability, or commercialize any of its future product candidates for which CannBioRx may receive regulatory approval.

Information obtained from expanded access studies may not reliably predict the efficacy of CannBioRx’s future product candidates in company-sponsored clinical trials and may lead to adverse events that could limit approval.

The expanded access studies CannBioRx is currently supporting are uncontrolled, carried out by individual investigators and not typically conducted in strict compliance with GCPs, all of which can lead to a treatment effect which may differ from that in placebo-controlled trials. These studies provide only anecdotal evidence of efficacy for regulatory review. These studies contain no control or comparator group for reference and this patient data is not designed to be aggregated or reported as study results. Moreover, data from such small numbers of patients may be highly variable. Information obtained from these studies, including the statistical principles that CannBioRx and the independent investigators have chosen to apply to the data, may not reliably predict data collected via systematic evaluation of the efficacy in company-sponsored clinical trials or evaluated via other statistical principles that may be applied in those trials. Reliance on such information to design CannBioRx’s clinical trials may lead to Phase 1, 2 and 3 trials that are not adequately designed to demonstrate efficacy and could delay or prevent its ability to seek approval of its future product candidates.

Expanded access programs provide supportive safety information for regulatory review. Physicians conducting these studies may use CannBioRx’s future product candidates in a manner inconsistent with the protocol, including in children with conditions beyond those being studied in trials which CannBioRx sponsors. Any adverse events or reactions experienced by subjects in the expanded access program may be attributed to CannBioRx’s future product candidates and may limit its ability to obtain regulatory approval with labeling that CannBioRx considers desirable, or at all.

There is a high rate of failure for drug candidates proceeding through clinical trials.

Generally, there is a high rate of failure for drug candidates proceeding through clinical trials. CannBioRx may suffer significant setbacks in its clinical trials similar to the experience of a number of other companies in the pharmaceutical and biotechnology industries, even after receiving promising results in earlier trials. Further, even if CannBioRx views the results of a clinical trial to be positive, the FDA or other regulatory authorities may disagree with its interpretation of the data. In the event that CannBioRx obtains negative results from clinical trials for product candidates or other problems related to potential chemistry, manufacturing and control issues or other hurdles occur and its future product candidates are not approved, CannBioRx may not be able to generate sufficient revenue or obtain financing to continue its operations, its ability to execute on its current business plan may be materially impaired, and its reputation in the industry and in the investment community might be significantly damaged. In addition, CannBioRx’s inability to properly design, commence and complete clinical trials may negatively impact the timing and results of its clinical trials and ability to seek approvals for its drug candidates.

If CannBioRx is found in violation of federal or state “fraud and abuse” laws or similar laws in other jurisdictions, it may be required to pay a penalty and/or be suspended from participation in federal or state health care programs, which may adversely affect its business, financial condition and results of operations.

In the U.S., CannBioRx is subject to various federal and state health care “fraud and abuse” laws, including anti-kickback laws, false claims laws and other laws intended to reduce fraud and abuse in federal and state health care programs, which could affect CannBioRx particularly upon successful commercialization of its products in the U.S. The Medicare and Medicaid Patient Protection Act of 1987, or federal Anti-Kickback Statute, makes it illegal for any person, including a prescription drug manufacturer (or a party acting on its behalf), to knowingly and willfully solicit, receive, offer or pay any remuneration that is intended to induce the referral of business, including the purchase, order or prescription of a particular drug for which payment may be made under a federal health care program, such as Medicare or Medicaid. Under federal law, some arrangements, known as safe harbors, are deemed not to violate the federal Anti-Kickback Statute. Although CannBioRx seeks to structure its business arrangements in compliance with all applicable requirements, it is often difficult to determine precisely how the law will be applied in specific circumstances. Accordingly, it is possible that CannBioRx’s practices may be challenged under the federal Anti-Kickback Statute and Federal False Claims Act. Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including fines and/or exclusion or suspension from federal and state health care programs such as Medicare and Medicaid and debarment from contracting with the U.S. government. In addition, private individuals have the ability to bring actions on behalf of the government under the federal False Claims Act as well as under the false claims laws of several states.

While CannBioRx believes CannBioRx has structured its business arrangements to comply with these laws, it is possible that the government could allege violations of, or convict CannBioRx of violating, these laws. If CannBioRx is found in violation of one of these laws, CannBioRx could be required to pay a penalty and could be suspended or excluded from participation in federal or state health care programs, and its business, results of operations and financial condition may be adversely affected.

The Members States of the European Union and other countries also have anti-kickback laws and can impose penalties in case of infringement. In some jurisdictions, regulatory and anti-kickback provisions can also be enforced by competitors.

Serious adverse events or other safety risks could require CannBioRx’s to abandon development and preclude, delay or limit approval of its future product candidates, limit the scope of any approved label or market acceptance, or cause the recall or loss of marketing approval of products that are already marketed.

If any of CannBioRx’s future product candidates prior to or after any approval for commercial sale, cause serious or unexpected side effects, or are associated with other safety risks such as misuse, abuse or diversion, a number of potentially significant negative consequences could result, including:

•        regulatory authorities may interrupt, delay or halt clinical trials;

•        regulatory authorities may deny regulatory approval of its future product candidates;

•        regulatory authorities may require certain labeling statements, such as warnings or contraindications or limitations on the indications for use, and/or impose restrictions on distribution in the form of a Risk Evaluation and Mitigation Strategy (“REMS”) in connection with approval or post-approval;

•        regulatory authorities may withdraw their approval, require more onerous labeling statements, impose a more restrictive REMS, or require it to recall any product that is approved;

•        it may be required to change the way the product is administered or conduct additional clinical trials;

•        its relationships with its collaboration partners may suffer;

•        it could be sued and held liable for harm caused to patients; or

•        its reputation may suffer. The reputational risk is heightened with respect to those of its future product candidates that are being developed for pediatric indications.

CannBioRx may voluntarily suspend or terminate its clinical trials if at any time CannBioRx believes that the products present an unacceptable risk to participants, or if preliminary data demonstrates that its future product candidates are unlikely to receive regulatory approval or unlikely to be successfully commercialized. Following receipt of approval for commercial sale of a product, CannBioRx may voluntarily withdraw or recall that product from the market if at any time CannBioRx believes that its use, or a person’s exposure to it, may cause adverse health consequences or death. To date, CannBioRx has not withdrawn, recalled or taken any other action, voluntary or mandatory, to remove an approved product from the market. In addition, regulatory agencies, IRBs or data safety monitoring boards may at any time recommend the temporary or permanent discontinuation of its clinical trials or request that CannBioRx ceases using investigators in the clinical trials if they believe that the clinical trials are not being conducted in accordance with applicable regulatory requirements, or that they present an unacceptable safety risk to participants. Although CannBioRx has never been asked by a regulatory agency, IRB or data safety monitoring board to temporarily or permanently discontinue a clinical trial, if CannBioRx elects or is forced to suspend or terminate a clinical trial of any of its future product candidates, the commercial prospects for that product will be harmed and its ability to generate product revenue from that product may be delayed or eliminated. Furthermore, any of these events may result in labeling statements such as warnings or contraindications. In addition, such events or labeling could prevent CannBioRx or its partners from achieving or maintaining market acceptance of the affected product and could substantially increase the costs of commercializing its future product candidates and impair its ability to generate revenue from the commercialization of these products either by CannBioRx or by its collaboration partners.

The development of a REMS for CannBioRx’s future product candidates could cause delays in the approval process and would add additional layers of regulatory requirements that could impact its ability to commercialize its future product candidates in the U.S. and reduce their market potential.

Even if the FDA approves CannBioRx’s NDA for any of its future product candidates without requiring a REMS as a condition of approval of the NDA, the FDA may, post-approval, require a REMS for any of its future product candidates if it becomes aware of new safety information that makes a REMS necessary to ensure that the benefits of the drug outweigh the potential risks. REMS elements can include medication guides, communication plans for health care professionals, and elements to assure safe use (“ETASU”). ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use of patient registries. Moreover, product approval may require substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy. CannBioRx may be required to adopt a REMS for its future product candidates to ensure that the benefits outweigh the risks of abuse, misuse, diversion and other potential safety concerns. There can be no assurance that the FDA will approve a manageable REMS for its future product candidates, which could create material and significant limits on its ability to successfully commercialize its future product candidates in the U.S. Delays in the REMS approval process could result in delays in the NDA approval process. In addition, as part of the REMS, the FDA could require significant restrictions, such as restrictions on the prescription, distribution and patient use of the product, which could significantly impact CannBioRx’s ability to effectively commercialize its future product candidates, and dramatically reduce their market potential, thereby adversely impacting its business, financial condition and results of operations. Even if initial REMS are not highly restrictive, if, after launch, its future product candidates were to be subject to significant abuse/non-medical use or diversion from illicit channels, this could lead to negative regulatory consequences, including a more restrictive REMS.

Risks Related to CannBioRx’s Reliance Upon Third Parties

CannBioRx’s existing collaboration arrangements and any that CannBioRx may enter into in the future may not be successful, which could adversely affect its ability to develop and commercialize its future product candidates.

CannBioRx is a party to, and may seek additional, collaboration arrangements with pharmaceutical or biotechnology companies for the development or commercialization of its future product candidates. CannBioRx may, with respect to its future product candidates, enter into new arrangements on a selective basis depending on the merits of retaining commercialization rights for ourselves as compared to entering into selective collaboration arrangements with leading pharmaceutical or biotechnology companies for each product candidate, both in the U.S. and internationally. To the extent that CannBioRx decides to enter into collaboration agreements, CannBioRx will face significant competition in seeking appropriate collaborators and the terms of any collaboration or other arrangements that CannBioRx may establish may not be favorable to it.

Any existing or future collaboration that CannBioRx enters into may not be successful. The success of CannBioRx’s collaboration arrangements will depend heavily on the efforts and activities of its collaborators. Collaborators generally have significant discretion in determining the efforts and resources that they will apply to these collaborations. Disagreements between parties to a collaboration arrangement regarding development, intellectual property, regulatory or commercialization matters, can lead to delays in the development process or commercialization of the applicable product candidate and, in some cases, termination of the collaboration arrangement. These disagreements can be difficult to resolve if neither of the parties has final decision-making authority. Any such termination or expiration could harm CannBioRx’s business reputation and may adversely affect it financially.

CannBioRx expects to depend on a limited number of suppliers for materials and components in order to manufacture CannBioRx’s future product candidates. The loss of these suppliers, or their failure to supply CannBioRx on a timely basis, could cause delays in its current and future capacity and adversely affect its business.

CannBioRx expects to depend on a limited number of suppliers for the materials and components required to manufacture its future product candidates. As a result, CannBioRx may not be able to obtain sufficient quantities of critical materials and components in the future. A delay or interruption by CannBioRx’s suppliers may also harm its business, results of operations and financial condition. In addition, the lead time needed to establish a relationship with a new supplier can be lengthy, and CannBioRx may experience delays in meeting demand in the event CannBioRx must switch to a new supplier. The time and effort to qualify for and, in some cases, obtain regulatory approval for a new supplier could result in additional costs, diversion of resources or reduced manufacturing yields, any of which would negatively impact CannBioRx’s operating results. CannBioRx’s dependence on single-source suppliers exposes it to numerous risks, including the following: its suppliers may cease or reduce production or deliveries, they may be subject to government investigations and regulatory actions that limit or prevent production capabilities for an extended period of time, raise prices or renegotiate terms; its suppliers may become insolvent or cease trading; CannBioRx may be unable to locate a suitable replacement supplier on acceptable terms or on a timely basis, or at all; and delays caused by supply issues may harm its reputation, frustrate its customers and cause them to turn to its competitors for future needs.

Risks Related to CannBioRx’s Intellectual Property

CannBioRx may not be able to adequately protect its future product candidates or its proprietary technology in the marketplace.

CannBioRx’s success will depend, in part, on its ability to obtain patents, protect its trade secrets and operate without infringing on the proprietary rights of others. CannBioRx relies upon a combination of patents, trade secret protection (i.e., know-how), and confidentiality agreements to protect the intellectual property of CannBioRx’s future product candidates. The strengths of patents in the pharmaceutical field involve complex legal and scientific questions, and can be uncertain. Where appropriate, CannBioRx seeks patent protection for certain aspects of its products and technology. Filing, prosecuting and defending patents globally can be prohibitively expensive.

CannBioRx’s policy is to look to patent technologies with commercial potential in jurisdictions with significant commercial opportunities. However, patent protection may not be available for some of the products or technology CannBioRx is developing. If CannBioRx must spend significant time and money protecting, defending or enforcing its patents, designing around patents held by others or licensing, potentially for large fees, patents or other proprietary rights held by others, its business, results of operations and financial condition may be harmed. CannBioRx may not develop additional proprietary products that are patentable. As of the date hereof, CannBioRx has an extensive portfolio of patents, including many granted patents and patents pending approval.

The patent positions of pharmaceutical products are complex and uncertain. The scope and extent of patent protection for CannBioRx’s future product candidates are particularly uncertain. CannBioRx’s future product candidates will be based on medicinal chemistry instead of cannabis plants. While CannBioRx has sought patent protection, where appropriate, directed to, among other things, composition-of-matter for its specific formulations, their methods of use, and methods of manufacture, CannBioRx does not have and will not be able to obtain composition of matter protection on these previously known CBD derivatives per se. CannBioRx anticipates that the products it develops in the future will be based upon synthetic compounds CannBioRx may discover. Although

CannBioRx has sought, and will continue to seek, patent protection in the U.S., Europe and other countries for its proprietary technologies, future product candidates, their methods of use, and methods of manufacture, any or all of them may not be subject to effective patent protection. If any of CannBioRx’s products is approved and marketed for an indication for which CannBioRx does not have an issued patent, its ability to use its patents to prevent a competitor from commercializing a non-branded version of its commercial products for that non-patented indication could be significantly impaired or even eliminated.

Publication of information related to CannBioRx’s future product candidates by CannBioRx or others may prevent it from obtaining or enforcing patents relating to these products and product candidates. Furthermore, others may independently develop similar products, may duplicate its products, or may design around its patent rights. In addition, any of its issued patents may be opposed and/or declared invalid or unenforceable. If CannBioRx fails to adequately protect its intellectual property, CannBioRx may face competition from companies who attempt to create a generic product to compete with its future product candidates. CannBioRx may also face competition from companies who develop a substantially similar product to its future product candidates that is not covered by any of its patents.

Many companies have encountered significant problems in protecting, defending and enforcing intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property rights, particularly those relating to pharmaceuticals, which could make it difficult for CannBioRx to stop the infringement of its patents or marketing of competing products in violation of its proprietary rights generally. Proceedings to enforce its patent rights in foreign jurisdictions could result in substantial cost and divert its efforts and attention from other aspects of its business.

If third parties claim that intellectual property used by CannBioRx infringes upon their intellectual property, its operating profits could be adversely affected.

There is a substantial amount of litigation, both within and outside the U.S., involving patent and other intellectual property rights in the pharmaceutical industry. CannBioRx may, from time to time, be notified of claims that CannBioRx is infringing upon patents, trademarks, copyrights or other intellectual property rights owned by third parties, and CannBioRx cannot provide assurances that other companies will not, in the future, pursue such infringement claims against it, its commercial partners or any third-party proprietary technologies CannBioRx has licensed. If CannBioRx was found to infringe upon a patent or other intellectual property right, or if CannBioRx failed to obtain or renew a license under a patent or other intellectual property right from a third party, or if a third party that CannBioRx was licensing technologies from was found to infringe upon a patent or other intellectual property rights of another third party, CannBioRx may be required to pay damages, including damages of up to three times the damages found or assessed, if the infringement is found to be willful, suspend the manufacture of certain products or reengineer or rebrand CannBioRx’s products, if feasible, or CannBioRx may be unable to enter certain new product markets. Any such claims could also be expensive and time consuming to defend and divert management’s attention and resources. CannBioRx’s competitive position could suffer as a result. In addition, if CannBioRx has declined or failed to enter into a valid non-disclosure or assignment agreement for any reason, CannBioRx may not own the invention or its intellectual property, and its products may not be adequately protected. Thus, CannBioRx cannot guarantee that any of its future product candidates, or its commercialization thereof, does not and will not infringe any third party’s intellectual property.

If CannBioRx is not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of its technology and products could be significantly diminished.

CannBioRx relies on trade secrets to protect its proprietary technologies, especially where it does not believe patent protection is appropriate or obtainable. However, trade secrets are difficult to protect. CannBioRx relies in part on confidentiality agreements with its current and former employees, consultants, outside scientific collaborators, sponsored researchers, contract manufacturers, vendors and other advisors to protect its trade secrets and other proprietary information. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, CannBioRx cannot guarantee that it has executed these agreements with each party that may have or have had access to its trade secrets. Any party with whom it or they have executed such an agreement may breach that agreement and disclose CannBioRx’s proprietary information, including its trade secrets, and CannBioRx may not be able to obtain adequate remedies for such breaches.

Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. If any of CannBioRx’s trade secrets were to be lawfully obtained or independently developed by a competitor, CannBioRx would have no right to prevent them, or those to whom they disclose such trade secrets, from using that technology or information to compete with CannBioRx. If any of CannBioRx’s trade secrets were to be disclosed to or independently developed by a competitor or other third-party, CannBioRx’s competitive position would be harmed.

Risks Related to Controlled Substances

Controlled substance legislation differs between countries, and legislation in certain countries may restrict or limit CannBioRx’s ability to sell its future product candidates.

Most countries are parties to the Single Convention on Narcotic Drugs 1961 and the Convention on Psychotropic Substances 1971, which governs international trade and domestic control of narcotic substances, including cannabis extracts. Countries may interpret and implement their treaty obligations in a way that creates a legal obstacle to CannBioRx obtaining marketing approval for its future products in those countries. These countries may not be willing or able to amend or otherwise modify their laws and regulations to permit its future products to be marketed, or achieving such amendments to the laws and regulations may take a prolonged period of time. In that case, CannBioRx would be unable to market its future product candidates in those countries in the near future or perhaps at all.

The product candidates that CannBioRx is developing may be subject to U.S. controlled substance laws and regulations and failure to comply with these laws and regulations, or the cost of compliance with these laws and regulations, may adversely affect the results of its business operations, both during clinical development and post approval, and its financial condition.

The product candidates that CannBioRx is developing may contain controlled substances as defined in The United States Federal Controlled Substances Act of 1970 and the Controlled Substances Import and Export Act, as amended (“CSA”). Controlled substances that are pharmaceutical products are subject to a high degree of regulation under the CSA, which establishes, among other things, certain registration, manufacturing quotas, security, recordkeeping, reporting, import, export and other requirements administered by the DEA. The DEA classifies controlled substances into five schedules: Schedule I, II, III, IV or V substances. Schedule I substances by definition have a high potential for abuse, no currently “accepted medical use” in the U.S., lack accepted safety for use under medical supervision, and may not be prescribed, marketed or sold in the U.S. Pharmaceutical products approved for use in the U.S. which contain a controlled substance are listed as Schedule II, III, IV or V, with Schedule II substances considered to present the highest potential for abuse or dependence and Schedule V substances the lowest relative risk of abuse among such substances.

While cannabis is a Schedule I controlled substance, products approved for medical use in the U.S. that contain cannabis or cannabis extracts should be placed in Schedules II-V, since approval by the FDA satisfies the “accepted medical use” requirement. If and when any of CannBioRx’s future product candidates receive FDA approval, the DEA will make a scheduling determination. If the FDA, the DEA or any foreign regulatory authority determines that its future product candidates may have potential for abuse, it may require it to generate more clinical or other data than CannBioRx currently anticipates to establish whether or to what extent the substance has an abuse potential, which could increase the cost and/or delay the launch of that product.

Facilities conducting research, manufacturing, distributing, importing or exporting, or dispensing controlled substances must be registered (licensed) to perform these activities and have the security, control, recordkeeping, reporting and inventory mechanisms required by the DEA to prevent drug loss and diversion. All these facilities must renew their registrations annually, except dispensing facilities, which must renew every three years. The DEA conducts periodic inspections of certain registered establishments that handle controlled substances. Obtaining the necessary registrations may result in delay of the importation, manufacturing or distribution of CannBioRx’s future products. Furthermore, failure to maintain compliance with the CSA, particularly non-compliance resulting in loss or diversion, can result in regulatory action that could have a material adverse effect on CannBioRx’s

business, financial condition and results of operations. The DEA may seek civil penalties, refuse to renew necessary registrations, or initiate proceedings to restrict, suspend or revoke those registrations. In certain circumstances, violations could lead to criminal proceedings.

Individual states have also established controlled substance laws and regulations. Although state-controlled substances laws often mirror federal law, because the states are separate jurisdictions, they may separately schedule CannBioRx’s future product candidates as well. State scheduling may delay commercial sale of any product for which CannBioRx obtains federal regulatory approval and adverse scheduling could have a material adverse effect on the commercial attractiveness of such product. CannBioRx or its partners must also obtain separate state registrations, permits or licenses in order to be able to obtain, handle, and distribute controlled substances for clinical trials or commercial sale, and failure to meet applicable regulatory requirements could lead to enforcement and sanctions by the states in addition to those from the DEA or otherwise arising under federal law.

Because CannBioRx’s products may be controlled substances in the U.S., to conduct clinical trials in the U.S., each of its research sites must submit a research protocol to the DEA and obtain and maintain a DEA researcher registration that will allow those sites to handle and dispense CannBioRx’s products and to obtain product from its importer. If the DEA delays or denies the grant of a research registration to one or more research sites, the clinical trial could be significantly delayed, and CannBioRx could lose clinical trial sites. The importer for the clinical trials must also obtain an importer registration and an import permit for each import.

The legislation on cannabis in the European Union differs among the Member States, as this area is not yet fully harmonized. In Germany, for example, cannabis is regulated as a controlled substance (Betäubungsmittel) and its handling requires specific authorization.

The legalization and use of medical and recreational cannabis in the U.S. and elsewhere may impact CannBioRx’s business.

There is a substantial amount of change occurring in the U.S. regarding the use of medical and recreational cannabis products. While cannabis products not approved by the FDA are Schedule I substances as defined under federal law, and their possession and use is not permitted according to federal law (except for research purposes, under DEA registration), at least 30 jurisdictions and the District of Columbia have enacted state laws to enable possession and use of cannabis for medical purposes, and at least ten jurisdictions for recreational purposes. The U.S. Farm Bill, which was passed in 2018, descheduled certain material derived from hemp plants with extremely low tetrahydrocannabinol (“THC”) content. Although CannBioRx’s business is quite distinct from that of online and dispensary cannabis companies, future legislation authorizing the sale, distribution, use, and insurance reimbursement of non-FDA approved cannabis products could affect its business.

Risks Related to KBL and the Business Combination

KBL has no operating history and is subject to a mandatory liquidation and subsequent dissolution requirement. If KBL is unable to consummate a business combination, including the Business Combination, its public stockholders may be forced to wait before receiving distributions from the Trust Account.

KBL is a development stage blank check company, and as it has no operating history and is subject to a mandatory liquidation and subsequent dissolution requirement. KBL has until December 9, 2019 to complete a business combination although it is currently seeking an extension until April 9, 2020. KBL has no obligation to return funds to investors prior to such date unless (i) it consummates a business combination prior thereto or (ii) it seeks to amend its Charter prior to consummation of a business combination, and only then in cases where investors have sought to convert or sell their shares to KBL. Only after the expiration of this full time period will public security holders be entitled to distributions from the Trust Account if KBL is unable to complete a business combination. Accordingly, investors’ funds may be unavailable to them until after such date and to liquidate their investment, public security holders may be forced to sell their public shares, rights or warrants, potentially at a loss. In addition if KBL fails to complete an initial business combination by December 9, 2019 (or the extended termination date), there will be no redemption rights or liquidating distributions with respect to the rights and warrants, which will expire worthless, unless KBL amends its Charter to extend its life and certain other agreements it has entered into.

KBL’s independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about its ability to continue as a “going concern.”

As of June 30, 2019, the Trust Account was comprised of $492,572 in cash and $49,535,742 in U.S. Treasury Bills. Further, KBL has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans, including the business combination. KBL cannot assure you that its plans to raise capital or to consummate an initial business combination, including the business combination, will be successful. These factors, among others, raise substantial doubt about its ability to continue as a going concern. The financial statements contained elsewhere in this proxy statement/prospectus do not include any adjustments that might result from its inability to consummate the business combination or its inability to continue as a going concern.

Following the consummation of the business combination, KBL’s only significant asset will be ownership of 100% of CannBioRx.

Following the consummation of the business combination, KBL will have no direct operations and no significant assets other than the ownership of 100% of CannBioRx. KBL will depend on CannBioRx for distributions, loans and other payments to generate the funds necessary to meet KBL’s financial obligations, including KBL’s expenses as a publicly traded company, and to pay any dividends with respect to its KBL Common Stock. Earnings from, or other available assets of, CannBioRx, may not be sufficient to pay dividends or make distributions or loans to enable KBL to pay any dividends on its KBL Common Stock or satisfy its other financial obligations.

Subsequent to the consummation of the business combination, KBL may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations and stock price, which could cause you to lose some or all of your investment.

Although KBL has conducted due diligence on CannBioRx, KBL cannot assure you that this diligence revealed all material issues that may be present in CannBioRx’s business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of KBL’s and CannBioRx’s control will not later arise. As a result, KBL may be forced to later write-down or write-off assets, restructure its operations, or incur impairment or other charges that could result in losses. Even if KBL’s due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with KBL’s preliminary risk analysis. Even though these charges may be non-cash items and may not have an immediate impact on KBL’s liquidity, the fact that KBL reports charges of this nature could contribute to negative market perceptions about the combined company’s or KBL’s securities. In addition, charges of this nature may cause KBL to be unable to obtain future financing on favorable terms or at all.

The Sponsor has agreed to vote in favor of such initial business combination, regardless of how KBL’s public stockholders vote.

Unlike some other blank check companies in which the initial stockholders agree to vote their founders shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, holders of the founder shares and placement shares have agreed (i) to vote any such shares in favor of any proposed business combination, including the business combination, (ii) not to redeem any such shares in connection with a stockholder vote to approve a proposed initial business combination, and (iii) not to sell any such shares to KBL in a tender offer in connection with any proposed business combination. The Sponsor, directors and officers have agreed to vote their shares in favor of the Business Combination Proposal. As a result, we would need only 831,608, or approximately 10.2%, of the 8,168,215 public shares, to be voted in favor of the Business Combination Proposal in order to have the business combination approved. Accordingly, it is more likely that the necessary stockholder approval will be received than would be the case if the Sponsor agreed to vote its founder shares and placement shares in accordance with the majority of the votes cast by KBL’s public stockholders.

The unaudited pro forma condensed combined financial information included in this proxy statement/prospectus may not be indicative of what KBL’s actual financial position or results of operations would have been.

The unaudited pro forma condensed combined financial information in this proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of what KBL’s actual financial position or

results of operations would have been had the business combination been completed on the dates indicated. See the section titled “Unaudited Pro Forma Condensed Combined Financial Information” for more information.

If third parties bring claims against KBL, the proceeds held in trust could be reduced and the per-share redemption price received by stockholders may be less than $10.10.

KBL’s placing of funds in trust may not protect those funds from third party claims against KBL. Although KBL will seek to have all vendors and service providers KBL engages and prospective target businesses KBL negotiates with execute agreements with KBL waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of KBL’s public stockholders, they may not execute such agreements. Furthermore, even if such entities execute such agreements with KBL, they may seek recourse against the Trust Account. A court may not uphold the validity of such agreements. Accordingly, the proceeds held in trust could be subject to claims which could take priority over those of KBL’s public stockholders. If KBL is unable to complete a business combination and distribute the proceeds held in trust to KBL’s public stockholders, the Sponsor has agreed (subject to certain exceptions described elsewhere in this proxy statement/prospectus) that it will be liable to ensure that the proceeds in the Trust Account are not reduced below $10.10 per share by the claims of target businesses or claims of vendors or other entities that are owed money by KBL for services rendered or contracted for or products sold to KBL’s. However, it may not be able to meet such obligation. Therefore, the per-share distribution from the Trust Account may be less than $10.10, plus interest, due to such claims.

Additionally, if KBL is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against KBL’s which is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in KBL’s bankruptcy estate and subject to the claims of third parties with priority over the claims of KBL’s stockholders. To the extent any bankruptcy claims deplete the Trust Account, KBL may not be able to return to KBL’s public stockholders at least $10.10. The Sponsor may not have sufficient funds to satisfy its indemnity obligations, as its only assets are securities of KBL. KBL has not asked the Sponsor to reserve for such indemnification obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for KBL’s initial business combination, including the Business Combination, and redemptions could be reduced to less than $10.10 per public share.

KBL’s stockholders may be held liable for claims by third parties against KBL to the extent of distributions received by them.

KBL’s Charter provides that it will continue in existence only until December 9, 2019. If KBL has not completed a business combination by such date, KBL will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including any interest earned on the funds held in the Trust Account net of interest that may be used by KBL to pay its franchise and income taxes payable and up to $50,000 for dissolution expenses, divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of KBL’s remaining stockholders and the Board, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to KBL’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

If KBL is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against KBL which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by KBL’s stockholders. Furthermore, because KBL intends to distribute the proceeds held in the public shares to KBL’s public stockholders promptly after expiration of the time KBL has to complete an initial business combination, this may be viewed or interpreted as giving preference to KBL’s public stockholders over any potential creditors with respect to access to or distributions from KBL’s assets. Furthermore, the Board may be viewed as having breached their fiduciary duties to KBL’s creditors and/or may have acted in bad faith, and thereby exposing itself and KBL to claims of punitive damages, by paying public stockholders from the Trust Account prior to addressing the claims of creditors. KBL cannot assure you that claims will not be brought against it for these reasons.

If KBL does not file and maintain a current and effective prospectus relating to the KBL Common Stock issuable upon exercise of the warrants, holders will only be able to exercise such warrants on a “cashless basis.”

If KBL does not file and maintain a current and effective prospectus relating to the KBL Common Stock issuable upon exercise of the warrants at the time that holders wish to exercise such warrants, they will only be able to exercise them on a “cashless basis” provided that an exemption from registration is available. As a result, the number of shares of KBL Common Stock that holders will receive upon exercise of the warrants will be fewer than it would have been had such holder exercised his warrant for cash. Further, if an exemption from registration is not available, holders would not be able to exercise on a cashless basis and would only be able to exercise their warrants for cash if a current and effective prospectus relating to the KBL Common Stock issuable upon exercise of the warrants is available. Under the terms of the warrant agreement (as defined below), KBL has agreed to use its best efforts to meet these conditions and to file and maintain a current and effective prospectus relating to the KBL Common Stock issuable upon exercise of the warrants until the expiration of the warrants. However, KBL cannot assure you that it will be able to do so. If KBL is unable to do so, the potential “upside” of the holder’s investment in KBL may be reduced or the warrants may expire worthless.

Even if KBL consummates the business combination, there is no guarantee that the warrants will ever be in the money, and they may expire worthless and the terms of warrants may be amended.

The exercise price for the warrants is $11.50 per share of KBL Common Stock. There is no guarantee that the public warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless.

In addition, KBL’s warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and KBL (the “warrant agreement”). The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding warrants to make any other change. Accordingly, KBL may amend the terms of the warrants in a manner adverse to a holder if holders of at least 65% of the then outstanding warrants approve of such amendment. Although KBL’s ability to amend the terms of the warrants with the consent of at least 65% of the then outstanding warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares and their respective affiliates and associates have of KBL Common Stock purchasable upon exercise of a warrant.

KBL may amend the terms of the rights in a manner that may be adverse to holders with the approval by the holders of at least 65% of the then outstanding rights.

The rights are issued in registered form under a right agreement between Continental Stock Transfer & Trust Company, as rights agent, and KBL. The right agreement provides that the terms of the rights may be amended without the consent of any holder to cure any ambiguity or correct any defective provision. The right agreement requires the approval by the holders of at least 65% of the then outstanding rights in order to make any change that adversely affects the interests of the registered holders.

KBL has no obligation to net cash settle the rights or warrants.

In no event will KBL have any obligation to net cash settle the rights or warrants. Furthermore, there are no contractual penalties for failure to deliver securities to the holders of the rights or warrants upon consummation of an initial business combination, including the Business Combination, or exercise of the warrants. Accordingly, the rights and warrants may expire worthless.

KBL’s ability to successfully effect the business combination and to be successful thereafter will be totally dependent upon the efforts of its key personnel, including CannBioRx’s key personnel, some of whom are expected to join KBL following the business combination. While KBL intends to closely scrutinize any individuals it engages after the business combination, it cannot assure you that its assessment of these individuals will prove to be correct.

KBL’s ability to successfully effect the business combination is dependent upon the efforts of KBL’s key personnel, including key personnel of CannBioRx. Although KBL expects some of such key personnel to remain with CannBioRx following the business combination, it is possible that KBL will lose some key personnel, the loss of which could negatively impact the operations and profitability of the combined company. While KBL intends to closely scrutinize

any individuals it engages after the business combination, it cannot assure you that its assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a public company which could cause KBL to have to expend time and resources helping them become familiar with such requirements. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect its operations.

KBL’s Sponsor, directors and officers have interests in the business combination which may be different from or in addition to (and which may conflict with) the interests of its stockholders.

KBL’s Sponsor, officers and directors and their respective affiliates and associates have interests in and arising from the business combination that are different from or in addition to (and which may conflict with) the interests of KBL’s public stockholders, which may result in a conflict of interest. These interests include:

•        the fact that the Sponsor holds private placement units, which include private placement warrants that would expire worthless if a business combination is not consummated;

•        the fact that our Sponsor, officers and directors have agreed not to redeem any of the founder shares or shares of KBL Common Stock held by them in connection with a stockholder vote to approve the business combination;

•        unless KBL consummates an initial business combination, KBL’s officers, directors and the Sponsor will not receive reimbursement for any out-of-pocket expenses incurred by them to the extent that such expenses exceed the amount of available proceeds not deposited in the Trust Account;

•        the fact that the Sponsor paid an aggregate of $25,000 for its founder shares and such securities will have a significantly higher value at the time of the business combination, which if unrestricted and freely tradable would be valued at approximately $________, based on the closing price of our KBL Common Stock on ______________, 2019, assuming the Sponsor transfer to Tyche 1,406,250 founder shares in connection with the Closing;

•        if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.10 per share originally sold as part of the units issued in the IPO (the “public shares”), or such lesser amount per public share as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

•        the continuation of certain of our existing directors and officers as directors of KBL, including Marlene Krauss, M.D., George Hornig and Sherrill Neff;

•        the appointment upon the Closing pursuant to their employment agreements of (1) Marlene Krauss, M.D. as our Chief Executive Officer for a three year term with automatic one year renewals at an annual salary of $500,000 per year with an annual 10% increase, plus equity awards, a potential 50% annual bonus and other benefits, and (2) George Hornig as our Chief Operating Officer and Acting Chief Financial Officer for a three year term with automatic one year renewals at an annual salary of $250,000 with an annual 10% increase, plus equity awards, a potential 50% annual bonus and other benefits; for more information, see “Executive Compensation —Compensation of Executive Officers and Directors after the Business Combination;”

•        the fact that all of our officers and directors hold an interest in the Sponsor;

•        the fact that our Sponsor, officers and directors will lose their entire investment in us if an initial business combination is not completed; and

•        the fact that the Sponsor has loaned us $412,301 as of September 30, 2019 for working capital and may need to loan us additional funds through the closing, which, in the event that the initial business combination does not close, cannot be paid from the proceeds or the interest on such proceeds in the Trust Account.

A market for KBL’s securities may not continue, which would adversely affect the liquidity and price of its securities.

Following the business combination, the price of KBL’s securities may fluctuate significantly due to the market’s reaction to the business combination and general market and economic conditions. An active trading market for KBL’s securities following the business combination may never develop or, if developed, it may not be sustained. In addition, the price of KBL’s securities after the business combination can vary due to general economic conditions and forecasts, KBL’s general business condition and the release of KBL’s financial reports. Additionally, if KBL’s securities are not listed on, or become delisted from, the Nasdaq Capital Market for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of KBL’s securities may be more limited than if KBL were quoted or listed on Nasdaq or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

There can be no assurance that our KBL Common Stock that will be issued in connection with the business combination will be approved for listing on Nasdaq following the Closing, or that we will be able to comply with the continued listing standards of Nasdaq.

Our KBL Common Stock, public units and public warrants are currently listed on Nasdaq. Our continued eligibility for listing, and the approval of the KBL Common Stock to be issued in connection with the Transactions for listing, may depend on, among other things, the number of our shares that are redeemed. If, after the business combination, Nasdaq delists our KBL Common Stock from trading on its exchange for failure to meet the listing standards, we and our stockholders could face significant material adverse consequences including:

•        a limited availability of market quotations for our securities;

•        reduced liquidity for our securities;

•        a determination that our KBL Common Stock is a “penny stock,” which will require brokers trading in our KBL Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

•        a limited amount of news and analyst coverage; and

•        a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our KBL Common Stock, units and public warrants are listed on Nasdaq, they are covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities.

If the business combination’s benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of KBL’s securities may decline.

If the benefits of the business combination do not meet the expectations of investors or securities analysts, the market price of KBL’s securities prior to the closing may decline. The market values of KBL’s securities at the time of the business combination may vary significantly from their prices on the date the Business Combination Agreement was executed, the date of this proxy statement/prospectus, or the date on which KBL’s stockholders vote on the Proposals.

In addition, following the business combination, fluctuations in the price of KBL’s securities could contribute to the loss of all or part of your investment. Prior to the business combination, there has not been a public market for CannBioRx’s stock and trading in the shares of KBL Common Stock has not been active. Accordingly, the valuation ascribed to CannBioRx and KBL Common Stock in the business combination may not be indicative of the price

that will prevail in the trading market following the business combination. If an active market for KBL’s securities develops and continues, the trading price of KBL’s securities following the business combination could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond KBL’s control. Any of the factors listed below could have a material adverse effect on your investment in KBL’s securities and KBL’s securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of KBL’s securities may not recover and may experience a further decline.

Factors affecting the trading price of the combined company’s securities following the business combination may include:

•        actual or anticipated fluctuations in the combined company’s quarterly financial results or the quarterly financial results of companies perceived to be similar to the combined company’s;

•        changes in the market’s expectations about the combined company’s operating results;

•        success of competitors;

•        the combined company’s operating results failing to meet the expectation of securities analysts or investors in a particular period;

•        changes in financial estimates and recommendations by securities analysts concerning the combined company or the market in general;

•        operating and stock price performance of other companies that investors deem comparable to the combined company;

•        the combined company’s ability to market new and enhanced services and products on a timely basis;

•        changes in laws and regulations affecting the combined company’s business;

•        commencement of, or involvement in, litigation involving the combined company;

•        changes in the combined company’s capital structure, such as future issuances of securities or the incurrence of additional debt;

•        the volume of shares of the combined company’s securities available for public sale;

•        any major change in the board or management;

•        sales of substantial amounts of KBL Common Stock by KBL’s directors, executive officers or significant stockholders or the perception that such sales could occur; and

•        general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of the combined company’s securities irrespective of its operating performance. The stock market in general and the Nasdaq have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of the combined company’s securities, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to the combined company could depress the combined company’s stock price regardless of the combined company’s business, prospects, financial conditions or results of operations. A decline in the market price of the combined company’s securities also could adversely affect the combined company’s ability to issue additional securities and the combined company’s ability to obtain additional financing in the future.

The recently passed comprehensive tax reform bill could adversely affect our financial condition and results of operations.

On December 22, 2017, President Trump signed into law a comprehensive tax reform bill (the “Tax Act”), that significantly reforms the Internal Revenue Code of 1986, as amended (the “Code”). The Tax Act, among other things, contains significant changes to corporate taxation, including a permanent reduction of the corporate income

tax rate, a partial limitation on the deductibility of business interest expense, limitation of the deduction for certain net operating losses to 80% of current year taxable income, an indefinite net operating loss carryforward, immediate deductions for certain new investments instead of deductions for depreciation expense over time and modification or repeal of many business deductions and credits. The presentation of our financial condition and results of operations have been recorded in accordance with GAAP, which requires the financial statement impact of the Tax Act to be recorded in the period in which the Tax Act was enacted. The financial statement impact of the Tax Act is based on our current interpretation of the provisions contained in the Tax Act and the Treasury Regulations and administrative guidance relating thereto. In the future, the Treasury Department and the Internal Revenue Service (the “IRS”) are expected to release additional Treasury Regulations and administrative guidance relating to the Tax Act. Any significant variance of our current interpretation of this law from any future Treasury Regulations or administrative guidance could result in a change to the presentation of our financial condition and results of operations and could negatively affect our business.

Notwithstanding the reduction of the corporate income tax rate, the overall impact of the Tax Act and any future tax reform is uncertain and our business and financial condition could be adversely affected. The impact of the Tax Act and any future tax reform on holders of KBL Common Stock is likewise uncertain and could be adverse.

The JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.

We qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (iii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statement/prospectus. As a result, our stockholders may not have access to certain information they deem important. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year (a) following July 7, 2022, the fifth anniversary of our IPO, (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our KBL Common Stock that is held by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can, therefore, delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.

We cannot predict if investors will find our KBL Common Stock less attractive because we will rely on these exemptions. If some investors find our KBL Common Stock less attractive as a result, there may be a less active trading market for our KBL Common Stock and our stock price may be more volatile.

Our stockholders will experience immediate dilution as a consequence of the issuance of KBL Common Stock in the business combination.

Upon Closing, up to 17,500,000 shares of KBL Common Stock may become issuable. As a result, following the Transactions, our public stockholders will hold 4,915,715 shares of KBL Common Stock, or approximately

19.0% of our voting common stock and a 19.0% economic interest in us (assuming (i) no public stockholders elect to have their public shares redeemed; (ii) the Sponsor transfers to Tyche 1,406,250 founder shares upon Closing; (iii) none of the holders of our founder shares or CannBioRx purchases shares of KBL Common Stock in the open market; (iv) there are no other issuances of equity interests of KBL; and (v) the warrants remain outstanding immediately following the Closing). As a result, our stockholders will experience immediate dilution as a result of the Transactions.

Unlike some other blank check companies, KBL does not have a specified maximum redemption threshold. The absence of such a redemption threshold will make it easier for us to consummate the business combination even if a substantial number of our stockholders elect to redeem their shares.

Unlike some other blank check companies, KBL has no specified maximum redemption threshold, except that we will not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001. Some other blank check companies’ structure disallows the consummation of a business combination if the holders of the blank check company’s public shares elect to redeem or convert more than a specified percentage of the shares sold in such company’s initial public offering. Because we have no such maximum redemption threshold, we may be able to consummate the business combination even though a substantial number of our public stockholders elect to redeem their shares.

Our Second A&R Charter will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

The Second A&R Charter, like the existing Charter, will provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (“Court of Chancery”) will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or other employees to us or our stockholders, (iii) any action asserting a claim against us or any of our directors, officers, or employees of ours arising pursuant to any provision of the DGCL, the Second A&R Charter, or our bylaws, or (iv) any action asserting a claim against us or any of our directors, officers, or other employees that is governed by the internal affairs doctrine, in each case except for such claims as to which (a) the Court of Chancery determines that it does not have personal jurisdiction over an indispensable party, (b) exclusive jurisdiction is vested in a court or forum other than the Court of Chancery, or (c) the Court of Chancery does not have subject matter jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of, and consented to, the provisions of our Second A&R Charter described in the preceding sentence. This exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and such persons. Alternatively, if a court were to find these provisions of our Second A&R Charter inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition, or results of operations.

Our Second A&R Charter will provide that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Accordingly, our Second A&R Charter will provide that the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act, the Securities Act, or any other claim for which the federal courts have exclusive jurisdiction.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect KBL’s business, investments and results of operations.

KBL is subject to laws, regulations and rules enacted by national, regional and local governments. In particular, KBL is required to comply with certain SEC, Nasdaq and other legal or regulatory requirements, including the Nasdaq upon the transfer of its listing. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly. Those laws, regulations and rules and their

interpretation and application may also change from time to time and those changes could have a material adverse effect on KBL’s business, investments and results of operations. In addition, a failure to comply with applicable laws, regulations and rules, as interpreted and applied, could have a material adverse effect on KBL’s business and results of operations.

Risks Related to Income Tax from the Business Combination

The Business Combination could fail to qualify as a reorganization under Section 368 of the Code such that U.S. federal income taxes may be imposed on U.S. Holders in connection with the Business Combination.

Although the parties intend to take the position that the Business Combination will qualify as a reorganization under Section 368(a) of the Code for U.S. federal income tax purposes, no ruling has been or will be sought from the IRS as to the U.S. federal income tax consequences of the Business Combination, and no opinion from counsel has or will be sought that the Business Combination qualifies as a reorganization for U.S. federal income tax purposes (which, if obtained, would not be binding upon the IRS or any court). Accordingly, there can be no assurances that the IRS will not disagree with or challenge any of the conclusions described herein.

If the IRS were successfully to challenge the qualification of the Business Combination as a reorganization within the meaning of Section 368(a) of the Code, U.S. Holders of CannBioRx common stock would generally be required to recognize gain or loss equal to the difference between the adjusted tax basis in the CannBioRx common stock surrendered in the Business Combination, and an amount equal to the fair market value, as of the consummation of the Business Combination, of any KBL Common Stock received or to be received in the Business Combination, plus any cash received in the Business Combination in lieu of fractional shares. Any gain so recognized would be long-term capital gain if the U.S. Holder had held the CannBioRx common stock for more than one year as of the consummation of the Business Combination, and any loss so recognized may be subject to limitations. Generally, in such event, the tax basis in the KBL Common Stock received in the Business Combination would equal the fair market value of such KBL Common Stock as of the consummation of the Business Combination, and the holding period for the KBL Common Stock would begin on the day after the date of the Business Combination.

Tax matters are very complicated, and the tax consequences of the Business Combination to a particular shareholder will depend on such shareholder’s circumstances. Accordingly, you should consult your tax advisor for a full understanding of the tax consequences of the Business Combination to you, including the applicability and effect of federal, state, local and non-U.S. income and other tax laws. For more information, please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Material United States Federal Income Tax Considerations” of this proxy statement/prospectus, which shareholders are urged to read.

KBL and its subsidiaries could become subject to Section 280E of the Code after the Business Combination.

Section 280E of the Code disallows a tax deduction for U.S. federal income tax purposes for any amount paid or incurred in carrying on any trade or business that consists of trafficking in controlled substances prohibited by U.S. federal or state law, forcing such businesses to pay higher effective U.S. federal tax rates than similar companies in other industries. As cannabis remains illegal under U.S. federal law, it is possible that business activities of KBL and its subsidiaries after the Business Combination are deemed to be trafficking in controlled substances and, as a result, KBL and its subsidiaries would not be able to make certain tax deductions, which would impact the calculation of U.S. taxable income. The effective U.S. federal income tax rate on a business deemed to be trafficking in controlled substances depends on how large its ratio of nondeductible expenses is to its total revenues. Although KBL and its subsidiaries do not cultivate, dispense or sell cannabis, there is no assurance that the IRS may not take a different position, which, if sustained, could materially and adversely affect the future profitability of KBL and its subsidiaries.

Holders of shares of CannBioRx capital stock (“CannBioRx Shares”) or Exchangeable Shares may have to pay income taxes as a result of the exchange of CannBioRx Shares or Exchangeable Shares, as the case may be, for KBL Common Stock.

When holders of CannBioRx Shares or Exchangeable Shares, as the case may be, dispose of such shares in exchange for shares of KBL Common Stock, they may be required to pay tax on any gain they realize under the laws

of Canada and the United States. Tax consequences under the laws of Canada and the United States vary depending on, among other things:

•        where the holder of CannBioRx Shares or Exchangeable Shares is a resident for tax purposes;

•        whether the holder of Exchangeable Shares exchanges such shares by way of redemption, retraction or has their shares purchased by CannBioRex Purchaseco ULC or Katexco Purchaseco ULC, as applicable, pursuant to their call rights; and

•        how long the shareholder has held the Exchangeable Shares.

We strongly urge holders of CannBioRx Shares and Exchangeable Shares to consult with their tax advisors with respect to the tax consequences of the exchange of CannBioRx Shares for shares of KBL Common Stock, the adjustment to the Exchangeable Shares and the future conversion of Exchangeable Shares into KBL Common Stock. See the sections entitled “Material Canadian Federal Income Tax Considerations of the Business Combination” and “Material U.S. Federal Income Tax Consequences of the Business Combination.”

Canadian residents who exchange their Exchangeable Shares for KBL Common Stock may be liable to pay Canadian income tax on the exchange.

On a redemption or retraction of an Exchangeable Share by CannBioRex Purchaseco ULC or Katexco Purchaseco ULC, as applicable (sometimes referred to as a “Purchaseco”), in circumstances where CannBioRex Callco ULC or Katexco Callco ULC, as applicable (sometimes referred to as a “Callco”) does not exercise its call rights, the holder of the Exchangeable Share will generally be deemed to have received a dividend for Canadian tax purposes equal to the amount by which the redemption proceeds exceed the paid-up capital of the Exchangeable Share for the purposes of the Canadian Tax Act. The holder will also generally be considered to have disposed of the Exchangeable Share for proceeds of disposition equal to the redemption proceeds (generally being an amount equal to the fair market value of the KBL Common Stock received) less any deemed dividend and may realize a capital gain (or capital loss) for Canadian tax purposes if such proceeds of disposition exceed (or are less than) the sum of the adjusted cost base of the Exchangeable Share to the holder and any reasonable costs of disposition.

If Callco exercises its call rights, a holder of Exchangeable Shares who receives shares of KBL Common Stock for such shares will generally be considered to have realized a capital gain (or capital loss) for Canadian tax purposes equal to the amount by which the proceeds of disposition exceed (or are less than) the sum of the adjusted cost base of the Exchangeable Shares to the holder and any reasonable costs of disposition.

For a general summary of the material Canadian federal income tax consequences of a redemption, retraction or sale of Exchangeable Shares, see the section entitled “Material Canadian Federal Income Tax Considerations of the Business Combination.”

Risks Related to the Redemption

There is no guarantee that a stockholder’s decision whether to redeem its shares for a pro rata portion of the Trust Account will put the stockholder in a better future economic position.

We can give no assurance as to the price at which a stockholder may be able to sell its public shares in the future following the Closing or any alternative business combination. Certain events following the consummation of any initial business combination, including the business combination, may cause an increase in our share price, and may result in a lower value realized now than a stockholder of KBL might realize in the future had the stockholder redeemed its shares. Similarly, if a stockholder does not redeem its shares, the stockholder will bear the risk of ownership of the public shares after the consummation of any initial business combination, including the business combination, and there can be no assurance that a stockholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement/prospectus. A stockholder should consult its own tax and/or financial advisor for assistance on how this may affect its individual situation.

If our stockholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their shares of KBL Common Stock for a pro rata portion of the funds held in the Trust Account.

In order to exercise their redemption rights, holders of public shares are required to submit a request in writing and deliver their stock (either physically or electronically) to our transfer agent at least two business days prior to the special meeting. Stockholders electing to redeem their shares will receive their pro rata portion of the Trust Account less franchise and income taxes payable, calculated as of two business days prior to the anticipated the Closing. See the section entitled “Special Meeting of KBL Stockholders — Redemption Rights” for additional information on how to exercise your redemption rights.

Stockholders of KBL who wish to redeem their shares for a pro rata portion of the Trust Account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline.

Public stockholders who wish to redeem their shares for a pro rata portion of the Trust Account must, among other things, as fully described in the section entitled “Special Meeting of KBL Stockholders — Redemption Rights,” tender their certificates to our transfer agent or deliver their shares to the transfer agent electronically through the DTC prior to 5:00 p.m., Eastern Time, on _________, 2019. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC and our transfer agent will need to act to facilitate this request. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because we do not have any control over this process or over the brokers, it may take significantly longer than two weeks to obtain a physical stock certificate. If it takes longer than anticipated to obtain a physical certificate, stockholders who wish to redeem their shares may be unable to obtain physical certificates by the deadline for exercising their redemption rights and thus will be unable to redeem their shares.

In addition, holders of outstanding units of KBL must separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If you hold units registered in your own name, you must deliver the certificate for such units to Continental Stock Transfer & Trust Company with written instructions to separate such units into public shares and public warrants. This must be completed far enough in advance to permit the mailing of the public share certificates back to you so that you may then exercise your redemption rights upon the separation of the public shares from the units.

If a broker, dealer, commercial bank, trust company or other nominee holds your units, you must instruct such nominee to separate your units. Your nominee must send written instructions by facsimile to Continental Stock Transfer & Trust Company. Such written instructions must include the number of units to be split and the nominee holding such units. Your nominee must also initiate electronically, using DTC’s DWAC (deposit withdrawal at custodian) system, a withdrawal of the relevant units and a deposit of an equal number of public shares and public warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights upon the separation of the public shares from the units. While this is typically done electronically on the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your public shares to be separated in a timely manner, you will likely not be able to exercise your redemption rights.

CANNBIORX LIFE SCIENCES CORP.
BUSINESS COMBINATION
Unaudited Pro Forma Condensed Combined Balance Sheet
June 30, 2019