As of March 31, 2022 and December 31, 2021, accrued expenses - related parties were $37,640 and $18,370, respectively. See Note 10 - Related Parties for details.

NOTE 5 – ACCRUED ISSUABLE EQUITY

Pursuant

The Company entered into five separate agreements with consultants who are members of the Scientific Advisory Board (“SAB”) and will provide for services and duties which will be requested by the Company’s Chief Scientific Officer from time to time. The agreements, which have a term of two years, provide for the Initial Public Offering,issuance of 2,400 share of common stock to each consultant annually, with each grant vesting monthly over twenty-four months. As of March 31, 2022, these shares have yet to be issued. The shares were recorded as a liability on the balance sheet at a market price of $4.05 per share for an aggregate value of $48,600; upon assessment of fair value of $2.59 per share at March 31, 2022, the Company sold 11,500,000 Units atrecorded a purchase pricechange in fair market value of $10.00 per Unit, inclusive of 1,500,000 Units sold to the underwriters on June 23, 2017 upon the underwriters’ election to fully exercise their over-allotment option, generating gross proceeds of $115,000,000. Each Unit consists of one share$17,520. A summary of the Company’s common stock, one right to receive one-tenth of one shareaccrued issuable equity activity during the three months ended March 31, 2022 is presented below:

NOTE 6 - DERIVATIVE LIABILITIES

The following table sets forth a summary of the Company’s common stockchanges in the fair value of Level 3 derivative liabilities (except the Public SPAC warrants as defined below, which are Level 1 derivative liabilities) that are measured at fair value on a recurring basis:

The fair value of the derivative liabilities as of March 31, 2022 and December 31, 2021 were estimated using the Black Scholes option pricing model, with the following assumptions used:

SPAC Warrants

Public SPAC Warrants

Participants in KBL’s initial public offering received an aggregate of 11,500,000 warrants (“Right”Public SPAC Warrants”), and one redeemable warrant. Each Public SPAC Warrant entitles the holder to purchase one-half of one share of the Company’s common stock (“Warrant”). Each Warrant will entitle the holder to purchase one Common stock at an exercise price of $5.75 per half share ($11.50 per whole share), until November 6, 2025, subject to adjustment. No fractional shares will be issued upon exercise of the warrants.Public SPAC Warrants. Management has determined that the Public SPAC Warrants contain a tender offer provision which could result in the Public SPAC Warrants settling for the tender offer consideration (including potentially cash) in a transaction that didn’t result in a change-in-control. This feature results in the Public SPAC Warrants being precluded from equity classification. Accordingly, the Public SPAC Warrants are classified as liabilities measured at fair value, with changes in fair value each period reported in earnings. The Public SPAC Warrants will become exercisablewere revalued on March 31, 2022 at $6,196,200, which resulted in a $1,852,650 decrease in the later of (i) 30 days after the completionfair value of the initial Business Combination and (ii) 12derivative liabilities during the three months from the closing of the Initial Public Offering, and will expire five years after the completion of the initial Business Combination or earlier upon redemption or liquidation.ended March 31, 2022.

The Company may redeem the

Private SPAC Warrants in whole and not in part, at a price of $0.01 per Warrant upon 30 days’ notice (“30-day redemption period”), only in the event that the last sale price of the 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 prior to the date on which notice of redemption is given, provided there is an effective registration statement with respect to the shares of common stock underlying such Warrants and a current prospectus relating to those shares of common stock is available throughout the 30-day redemption period. If the Company calls the Warrants for redemption as described above, the Company’s management will have the option to require all holders that wish to exercise Warrants to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,” the management will consider, among other factors, the Company’s cash position, the number of Warrants that are outstanding and the dilutive effect on the Company’s stockholders of issuing the maximum number of shares of common stock issuable upon the exercise of the Warrants.

Participants in KBL’s initial private placement in connection with its initial public offering received an aggregate of 502,500 warrants (“Private SPAC Warrants”). Each Private SPAC Warrant entitles the holder of a Right will receive one-tenth (1/10)to purchase one-half of one share of the Company’s common stock upon consummationat an exercise price of a Business Combination.$5.75 per half share ($11.50 per whole share) until November 6, 2025, subject to adjustment. No fractional shares will be issued upon exchangeexercise of the Rights. No additional consideration will be required to be paid byPrivate SPAC Warrants. Management has determined that the Private SPAC Warrants contain a holder of Rights in order to receive its additional shares upon consummation of a Business Combination as the consideration related thereto has been includedtender offer provision which could result in the Unit purchase price paidPrivate SPAC Warrants settling for by investorsthe tender offer consideration (including potentially cash) in a transaction that didn’t result in a change-in-control. This feature (amongst others) results in the Initial Public Offering. IfPrivate SPAC Warrants being precluded from equity classification. Accordingly, the Private SPAC Warrants are classified as liabilities measured at fair value, with changes in fair value each period reported in earnings. The Private SPAC Warrants were revalued on March 31, 2022 at $216,075, which resulted in a $251,250 decrease in the fair value of the derivative liabilities during the three months ended March 31, 2022.

PIPE Warrants

On February 23, 2021, the Company enters into a definitive agreement for a Business Combination in which the Company will not be the surviving entity, each holder of a right will be requiredissued five-year warrants (the “PIPE Warrants”) to affirmatively convert its rights in order to receive the 1/10 sharepurchase 2,564,000 shares of common stock underlying each right (without paying any additional consideration).at an exercise price of $5.00 per share in connection with a private placement offering. The PIPE Warrants did not meet the requirements for equity classification due to the existence of a tender offer provision that could potentially result in cash settlement of the PIPE Warrants that didn’t meet the limited exception in the case of a change-in-control. Accordingly, the PIPE Warrants are liability-classified and the Company recorded the $7,294,836 fair value of the PIPE Warrants, which was determined using the Black-Scholes option pricing model, as derivative liabilities. The PIPE Warrants were revalued on March 31, 2022 at $3,471,500, which resulted in a $3,044,800 decrease in the fair value of the derivative liabilities during the three months ended March 31, 2022.

There will be no redemption rights or liquidating distributionsOther Warrants

AGP Warrant

In connection with respect to the Warrants and Rights, which will expire worthless iftransactions contemplated by the Company’s Business Combination Agreement (as amended, the “Business Combination Agreement”), dated as of July 25, 2019 (the “Business Combination”), on November 6, 2020, the Company failsbecame obligated to complete its Business Combination withinassume five-year warrants for the Combination Period.

Private Placement

Concurrently with the closingpurchase of the Initial Public Offering, the Sponsor and the underwriters purchased an aggregate of 450,000 Private Units at $10.00 per Private Unit, generating gross proceeds of $4,500,000 in a Private Placement. In addition, on June 23, 2017, the Company consummated the sale of an additional 52,500 Placement Units at a price of $10.00 per Unit, which were purchased by the Sponsor and underwriters, generating gross proceeds of $525,000. Of these, 377,500 Private Units were purchased by the Sponsor and 125,000 Private Units were purchased by the underwriters. The proceeds from the Private Units were added to the net proceeds from the Initial Public Offering held in the Trust Account. The Private Units (including their component securities) will not be transferable, assignable or salable until 30 days after the completion of the initial Business Combination and the warrants included in the Private Units (the “Private Placement Warrants”) will be non-redeemable so long as they are held by the Sponsor, the underwriters or their permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor, the underwriters or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the warrants included in the Units sold in the Initial Public Offering. In addition, for as long as the Private Placement Warrants are held by the underwriters or its designees or affiliates, they may not be exercised after five years from the effective date of the registration statement related to the Initial Public Offering. Otherwise, the Private Placement Warrants have terms and provisions that are identical to those of the warrants being sold as part of the Units in the Initial Public Offering and have no net cash settlement provisions.

If the Company does not complete a Business Combination within the Combination Period, the proceeds of the Private Placement will be part of the liquidating distribution to the public stockholders and the Private Units and their component securities issued to the Sponsor will expire worthless.

KBL MERGER CORP. IV

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(Unaudited)

4. RELATED PARTY TRANSACTIONS

Founder Shares

In September 2016, the Company issued 2,875,00063,658 shares of the Company’s common stock at an exercise price of $5.28 per share (the “AGP Warrant Liability”) that had originally been issued by KBL to an investment banking firm in connection with a prior private placement.

On March 12, 2021, the Sponsor (the “Founder Shares”Company issued a warrant to Alliance Global Partners (“AGP” and the “AGP Warrant”) in exchange for a capital contribution of $25,000. The 2,875,000 Founder Shares includedto purchase up to an aggregate of up to 375,000 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment option was not exercised in full or in part. As a result of the underwriters’ election to exercise their over-allotment option in full on June 23, 2017, 375,000 Founder Shares were no longer subject to forfeiture.

In conjunction with their investment in the Private Units, the underwriters or their designees also purchased membership interests in the Sponsor, through which the underwriters or their designees collectively have a pecuniary interest in 230,000 Founder Shares, pursuant to a separate private placement that closed simultaneously with the closing of the Initial Public Offering and the Private Placement. The Sponsor beneficially owns the Founder Shares allocated to the underwriters or their designees and retains sole voting and dispositive power over such securities until the closing of a Business Combination, at which time the Sponsor will distribute the Founder Shares to the underwriters or their designees for no additional consideration. Upon receipt of the Founder Shares, the underwriters or their designees will no longer retain their ownership interests in the Sponsor.

The initial stockholder has agreed not to transfer, assign or sell any of the Founder Shares (except to certain permitted transferees) until the earlier to occur of (i) one year after the completion of a Business Combination, and (ii) the date following the completion of a Business Combination on which the Company completes a liquidation, merger, share exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their63,658 shares of the Company’s common stock for cash, securities or other property the (“Lock-Up Period”). Notwithstanding the foregoing, if the last saleat a purchase price of the Company’s common stock equals or exceeds $12.00$5.28 per share, (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after its initial Business Combination, then the lock-up will terminate.

Related Party Advances

As of September 30, 2017, the Company’s Sponsor advanced an aggregate of $82,599subject to be used for working capital purposes. The advances are non-interest bearing, unsecured and due on demand. As of September 30, 2017, the Company has repaid $61,558 of such advances. Advances amounting to $21,041 were outstanding as of September 30, 2017 and includedadjustment, in due to related party in the accompanying condensed balance sheet.

Note Payable – Related Party

The Sponsor loaned the Company $192,000 in the form of a promissory note to be used for the payment of costs related to the Initial Public Offering. The loan was non-interest bearing, unsecured and due on the earlier of June 30, 2017 or the closingfull satisfaction of the Initial Public Offering.AGP Warrant Liability. The Company repaid this loan from the proceedsexercise of the Initial Public Offering not placed in the Trust Account on June 8, 2017.

Administrative Service Fee

The Company has agreed, commencing on the effective dateAGP Warrant is limited at any given time to prevent AGP from exceeding beneficial ownership of 4.99% of the Initial Public Offering through the earlierthen total number of the Company’s consummation of a Business Combinationissued and its liquidation, to pay the Sponsor a monthly fee of $10,000 for office space, utilities and secretarial and administrative support. For the three and nine months ended September 30, 2017, the Company incurred $30,000 and $40,000, respectively, of administrative service fees, of which $28,000 is payable and included in due to related party in the accompanying condensed balance sheet at September 30, 2017.

KBL MERGER CORP. IV

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(Unaudited)

Related Party Loans

In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,000,000 of such Working Capital Loans may be convertible into units of the post Business Combination entity at a price of $10.00 per unit. The units would be identical to the Private Units. There were no Working Capital Loans outstanding as of September 30, 2017.

5. COMMITMENTS AND CONTINGENCIES

Registration Rights

The holders of the Founder Shares and Private Units and warrants that maybe issued upon conversion of Working Capital Loans (and any shares of the Company’s common stock issuable upon such exercise. The warrant is exercisable at any time between May 2, 2021 and May 2, 2025. The AGP Warrant did not meet the exerciserequirements for equity classification due to the existence of a tender offer provision that could potentially result in cash settlement of the Private Units and warrantsAGP Warrant that maydid not meet the limited exception in the case of a change-in-control. Accordingly, the AGP Warrant will continue to be issued upon conversion of Working Capital Loans) are entitled to registration rights pursuant toliability-classified. The AGP Warrant was revalued on March 31, 2022 at $86,447, which resulted in a registration rights agreement signed on$57,884 decrease in the effective datefair value of the Initial Public Offering. The holders of these securities are entitled to make up toderivative liabilities during the three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable Lock-Up Period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.months ended March 31, 2022.

Underwriting Agreement

Alpha Warrant

The Company granted the underwriters a 45-day option to purchase up to 1,500,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. On June 23, 2017, the underwriters elected to exercise their over-allotment option to purchase 1,500,000 Units at a purchase price of $10.00 per Unit.

In connection with that certain Mutual Release and Settlement Agreement dated July 31, 2021 (agreed to on July 29, 2021) between the closing of the Initial Public OfferingCompany and Alpha Capital Anstal (“Alpha” and the over-allotment option,“Alpha Settlement Agreement”), the underwriters were paidCompany issued a cash underwriting discountthree-year warrant for the purchase of $2,875,000. In addition, the underwriters deferred their fee of up to $4,025,000 until the completion of the initial Business Combination (the “Deferred Fee”). The Deferred Fee will be paid in cash upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement.

Concurrently with the closing of the Initial Public Offering, the underwriters purchased an aggregate of 125,000 Private Units at $10.00 per Private Unit.

In conjunction with their investment in the Private Units, the underwriters or their designees also purchased membership interests in the Sponsor, through which the underwriters or their designees collectively have a pecuniary interest in 230,000 Founder Shares, pursuant to a separate private placement that closed simultaneously with the closing of the Initial Public Offering and the Private Placement.

6. STOCKHOLDERS’ EQUITY

Preferred Shares — The Company is authorized to issue 1,000,000 preferred shares with a par value of $0.0001 per share. At September 30, 2017 and December 31, 2016, there are no preferred shares issued or outstanding.

Common Stock — The Company is authorized to issue 35,000,00025,000 shares of the Company’s common stock with a par valueat an exercise price of $0.0001$7.07 per share. Holdersshare (the “Alpha Warrant Liability” and the “Alpha Warrant”). The exercise of shares of the Company’sAlpha Warrant is limited at any given time to prevent Alpha from exceeding a beneficial ownership of 4.99% of the then total number of issued and outstanding shares of the Company’s common stock upon such exercise. The warrant is exercisable until August 2, 2024. The Alpha Warrant did not meet the requirements for equity classification due to the existence of a tender offer provision that could potentially result in cash settlement of the Alpha Warrant that did not meet the limited exception in the case of a change-in-control. Accordingly, the Alpha Warrant is liability-classified and the Company recorded the $95,677 fair value of the Alpha Warrant, which was determined using the Black-Scholes option pricing model, as a derivative liability. The Alpha Warrant was revalued on March 31, 2022 at $20,031, which resulted in a $23,530 decrease in the fair value of the derivative liabilities during the three months ended March 31, 2022. The following assumptions were used to value the Alpha Warrant at issuance:

Warrant Activity

A summary of the warrant activity (including the August 2021 PIPE Warrants, which are equity-classified) during the three months ended March 31, 2022 is presented below:

A summary of outstanding and exercisable warrants as of March 31, 2022 is presented below:

NOTE 7 - LOANS PAYABLE

Loans Payable

The following table summarizes the activity of loans payable during the three months ended March 31, 2022:

During the three months ended March 31, 2022, the Company paid an aggregate of $481,321, $3,131 and $30,967 in partial satisfaction of the First Assurance Funding loan, the Bounce Back Loan Scheme and the Paycheck Protection Program loan, respectively.

Loans Payable – Related Parties

The below table summarizes the activities of loans payable – related parties during the three months ended March 31, 2022:

Interest Expense on Loans Payable

For the three months ended March 31, 2022, the Company recognized interest expense and interest income — related parties associated with loans of $7,415 and $4,562, respectively. During the three months ended March 31, 2021, the Company recognized interest expense and interest expense — related parties associated with loans of $8,257 and $10,103, respectively.

As of March 31, 2022, the Company had accrued interest and accrued interest — related parties associated with loans of $27,086 and $12,818, respectively. As of December 31, 2021, the Company had accrued interest and accrued interest — related parties associated with loans of $24,212 and $812, respectively. See Note 10 — Related Parties for additional details.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Litigation and Other Loss Contingencies

The Company records liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company has no liabilities recorded for loss contingencies as of December 31, 2021. See Legal Matters – Action Against Former Executive of KBL below for information related to a March 31, 2022 accrual.

Legal Matters

Action Against Former Executive of KBL

On September 1, 2021, the Company initiated legal action in the Chancery Court of Delaware against Dr. Marlene Krauss (“Dr. Krauss”) and two of her affiliated companies, KBL IV Sponsor, LLC and KBL Healthcare Management, Inc. (collectively, the “KBL Affiliates”) for, among other things, engaging in monetary transfers of the Company’s assets, non-disclosure of financial liabilities in the Company’s Consolidated Financial Statements, issuing shares of stock without authorization; and allowing stockholder redemptions to take place. The Company’s complaint alleges causes of action against Dr. Krauss and/or the KBL Affiliates for breach of fiduciary duties, ultra vires acts, unjust enrichment, negligence and declaratory relief, and seeks compensatory damages in excess of $11,286,570, together with interest, attorneys’ fees and costs. There can be no assurance that the Company will be successful in its legal actions. As of December 31, 2021, the Company recorded a legal accrual of $250,000 to cover the legal expenses of the former executives of KBL.

On October 5, 2021, Dr. Krauss and the KBL Affiliates filed an Answer, Counterclaims and Third-Party Complaint (the “Krauss Counterclaims”) against the Company and twelve individuals who are, or were, directors and/or officers of the Company, i.e., Marc Feldmann, Lawrence Steinman, James N. Woody, Teresa DeLuca, Frank Knuettel II, Pamela Marrone, Lawrence Gold, Donald A. McGovern, Jr., Russell T. Ray, Richard W. Barker, Shoshana Shendelman and Ozan Pamir (collectively, the “Third-Party Defendants”).  On October 27, 2021, the Company and Ozan Pamir filed an Answer to the Krauss Counterclaims, and all of the other Third-Party Defendants filed a Motion to Dismiss as to the Third-Party Complaint.

On January 28, 2022, in lieu of filing an opposition to the Motion to Dismiss, Dr. Krauss and the KBL Affiliates filed a Motion for leave to file amended counterclaims and third-party complaint, and to dismiss six of the current and former directors previously named, i.e., to dismiss Teresa DeLuca, Frank Knuettel II, Pamela Marrone, Russell T. Ray, Richard W. Barker and Shoshana Shendelman.  The Motion was granted by stipulation and, on February 24, 2022, Dr. Krauss filed an amended Answer, Counterclaims and Third-Party Complaint (the “Amended Counterclaims”).  In essence, the Amended Counterclaims allege (a) that the Company and the remaining Third-Party Defendants breached fiduciary duties to Dr. Krauss by making alleged misstatements against Dr. Krauss in SEC filings and failing to register her shares in the Company so that they could be traded, and (b) the Company breached contracts between the Company and Dr. Krauss for registration of such shares, and also failed to pay to Dr. Krauss the amounts alleged to be owing under a promissory note in the principal amount of $371,178, plus an additional $300,000 under Dr. Krauss’s resignation agreement.  The Amended Counterclaims seek unspecified amounts of monetary damages, declaratory relief, equitable and injunctive relief, and attorney’s fees and costs.

On March 16, 2022, Donald A. McGovern, Jr. and Lawrence Gold filed a Motion to Dismiss the Amended Counterclaims against them, and the Company and the remaining Third-Party Defendants filed an Answer to the Amended Counterclaims denying the same.  The Company and the Third-Party Defendants intend to continue to vigorously defend against all of the Amended Counterclaims, however, there can be no assurance that they will be successful in the legal defense of such Amended Counterclaims. In April 2022, Donald A. McGovern, Jr. and Lawrence Gold were removed from the lawsuit as parties. Discovery has not yet commenced in the case.

Action Against the Company by Dr. Krauss

On August 19, 2021, Dr. Krauss initiated legal action in the Chancery Court of Delaware against the Company.  The original Complaint sought expedited relief and made the following two claims: (1) it alleged that the Company is obligated to advance expenses including, attorney’s fees, to Dr. Krauss for the costs of defending against the SEC and certain Subpoenas served by the SEC on Dr. Krauss; and (2) it alleged that the Company is also required to reimburse Dr. Krauss for the costs of bringing this lawsuit against the Company.  On or about September 3, 2021, Dr. Krauss filed an Amended and Supplemental Complaint (the “Amended Complaint”) in this action, which added the further claims that Dr. Krauss is also allegedly entitled to one voteadvancement by the Company of her expenses, including attorney’s fees, for the costs of defending against the Third-Party Complaint in the Tyche action referenced below, and the costs of defending against the Company’s own Complaint against Dr. Krauss as described above.  On or about September 23, 2021, the Company filed its Answer to the Amended Complaint in which the Company denied each share. At September 30, 2017of Dr. Krauss’ claims and December 31, 2016, there were 4,208,034 and 2,875,000 shares of common stock issued and outstanding, respectively (excluding 10,669,466 and 0 shares of common stock subject to possible redemption, respectively).

further raised numerous affirmative defenses with respect thereto.

KBL MERGER CORP. IV

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

(Unaudited)On November 15, 2021, Dr. Krauss filed a Motion for Summary Adjudication as to certain of the issues in the case, which was opposed by the Company.  A hearing on such Motion was held on December 7, 2021, and, on March 7, 2022, the Court issued a decision in the matter denying the Motion for Summary Adjudication in part and granting it in part.  The Court then issued an Order implementing such a decision on March 29, 2022. The parties are now engaging in proceedings set forth in that implementing Order. The Court granted Dr. Krauss’s request for advancement of certain legal fees and the Company was required to pay a portion of those fees while it objects to the remaining portion of the fees. These legal fees have been accrued on the Company’s balance sheet as of March 31, 2022 (see Note 11 – Subsequent Events for more details). Notwithstanding any requirement by the Court for the Company to advance attorneys’ fees to Dr. Krauss, no adjudication has yet been made as to whether Dr. Krauss will ultimately be entitled to permanently retain such advancements. The Company is seeking payment for a substantial portion of such amounts from its director and officers’ insurance policy, of which no assurance can be provided that the directors and officers insurance policy will cover such amounts.

7. TRUST ACCOUNT AND FAIR VALUE MEASUREMENTS Action Against Tyche Capital LLC

The Trust Account can be investedCompany commenced and filed an action against defendant Tyche Capital LLC (“Tyche”) in U.S. government securities, within the meaningSupreme Court of New York, in the County of New York, on April 15, 2021.  In its Complaint, the Company alleged claims against Tyche arising out of Tyche’s breach of its written contractual obligations to the Company as set forth in a “Guarantee And Commitment Agreement” dated July 25, 2019, and a “Term Sheet For KBL Business Combination With CannBioRex” dated April 10, 2019 (collectively, the “Subject Guarantee”).  The Company alleges in its Complaint that, notwithstanding demand having been made on Tyche to perform its obligations under the Subject Guarantee, Tyche has failed and refused to do so, and is currently in debt to the Company for such failure in the amount of $6,776,686, together with interest accruing thereon at the rate set forth in the Investment Company Act, having a maturity of 180 daysSubject Guarantee.

On or less or in any open-ended investment company that holds itself out as a money market fund selectedabout May 17, 2021, Tyche responded to the Company’s Complaint by filing an Answer and Counterclaims against the Company meetingalleging that it was the conditions of Rule 2a-7 ofCompany, rather than Tyche, that had breached the Investment Company Act.

The Company’s amended and restated certificate of incorporation provide that, other than the withdrawal of interest to pay income taxes and up to $50,000 of interest to pay dissolution expenses if any, none of the funds held in the Trust Account will be released until the earlier of: (i) the completion of the Business Combination; (ii) the redemption of Public Shares properly tendered in connection withSubject Guarantee.  Tyche also filed a stockholder vote to amend the Company’s amended and restated certificate of incorporation to modify the substance or timingThird-Party Complaint against six third-party defendants, including three members of the Company’s obligationmanagement, Sir Marc Feldmann, Dr. James Woody, and Ozan Pamir (collectively, the “Individual Company Defendants”), claiming that they allegedly breached fiduciary duties to redeem 100%Tyche with regards to the Subject Guarantee.  In that regard, on June 25, 2021, each of the Public Shares ifIndividual Company Defendants filed a Motion to Dismiss Tyche’s Third-Party Complaint against them.

On November 23, 2021, the Court granted the Company’s request to issue an Order of attachment against all of Tyche’s shares of the Company’s stock that had been held in escrow.  In so doing, the Court found that the Company does not completehad demonstrated a likelihood of success on the Business Combination within the Combination Period or (iii) the redemption of 100%merits of the Public Shares ifcase based on the facts alleged in the Company’s Complaint.

On February 18, 2022, Tyche filed an Amended Answer, Counterclaims and Third-Party Complaint.  On March 22, 2022, the Company and each of the Individual Company Defendants filed a Motion to Dismiss all of Tyche’s claims.  A hearing on such Motion to Dismiss is unablescheduled by the Court for August 17, 2022. The Company and the Individual Company Defendants intend to complete a Business Combination withincontinue to vigorously defend against all of Tyche’s claims, however, there can be no assurance that they will be successful in the Combination Period.legal defense of such claims. Written discovery proceedings have commenced among the parties.

Action Against Ronald Bauer & Samantha Bauer

The Company followsand two of its wholly-owned subsidiaries, Katexco Pharmaceuticals Corp. and CannBioRex Pharmaceuticals Corp. (collectively, the guidance“Company Plaintiffs”), initiated legal action against Ronald Bauer and Samantha Bauer, as well as two of their companies, Theseus Capital Ltd. and Astatine Capital Ltd. (collectively, the “Bauer Defendants”), in ASC 820the Supreme Court of British Columbia on February 25, 2022. The Company Plaintiffs are seeking damages against the Bauer Defendants for its financial assetsmisappropriated funds and liabilities that are re-measuredstock shares, unauthorized stock sales, and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair valueimproper travel expenses, in the combined sum of at least annually. $4,395,000 CAD [$3,460,584 USD] plus the additional sum of $2,721,036 USD. Service of process has been effected on each of the Bauer Defendants, and the Bauer Defendants filed an answer on May 6, 2022. There can be no assurance that the Company Plaintiffs will be successful in this legal action.

NOTE 9 – STOCKHOLDERS’ EQUITY

TheCommon Stock

Common Stock Issued for Services

During the three months ended March 31, 2022, the Company issued an aggregate of 51,319 immediately vested shares of the Company’s common stock as compensation to consultants, directors, and officers, with an aggregate issuance date fair value of $149,718, which was charged immediately to the Company’s financial assets and liabilities reflects management’s estimatecondensed consolidated statement of amounts thatoperations for the Company would have received in connection with the salethree months ended March 31, 2022.

Stock Options

A summary of the assets or paidoption activity during the three months ended March 31, 2022 is presented below:

As indicated in connection with the transfer oftable above, no options were issued for the liabilities in an orderly transaction between market participants atthree months ended March 31, 2022. For options issued during the measurement date. In connection with measuringthree months ended March 31, 2021, the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:Black Scholes valuation method were as follows:

A summary of outstanding and exercisable stock options as of March 31, 2022 is presented below:

The following table presents information aboutCompany recognized stock-based compensation expense of $596,467 for the Company’s assetsthree months ended March 31, 2022, related to the amortization of stock options. Expense of $514,696 is included within general and administrative expenses and expense of $81,771 is included within research and development expenses on the condensed consolidated statements of operations. The full amount of stock-based compensation recognized for the period ended March 31, 2022 is considered to be related party expense. Stock-based compensation expense for the three months ended March 31, 2021 was $1,092,399; these expenses were included within general and administrative expenses on the condensed consolidated statement of operations for that are measured at fair valueperiod. The full amount of stock-based compensation recognized for the period ended March 31, 2021 was considered to be related party expense. As of March 31, 2022, there was $5,705,889 of unrecognized stock-based compensation expense that will be recognized over the weighted average remaining vesting period of 2.81 years.

NOTE 10 - RELATED PARTIES

Accrued Expenses - Related Parties

Accrued expenses - related parties was $37,640 as of March 31, 2022 and consists of $12,818 of interest accrued on loans due to a recurring basis at September 30, 2017certain investor in the Company and $24,820 of accrued consulting fees for services provided by certain directors of the Company. Accrued expenses - related parties of $18,370 as of December 31, 2021, consists of interest accrued on loans and convertible notes due to certain officers and directors of the Company.

Loans Payable - Related Parties

Loans payable - related parties consists of $86,034 and $81,277 as of March 31, 2022 and December 31, 2016,2021, respectively. See Note 7 - Loans Payable for more information.

Research and indicatesDevelopment Expenses - Related Parties

Research and Development Expenses – Related Parties were $47,718 and $267,053 during the fair value hierarchythree months ended March 31, 2022 and 2021, respectively, and are related to consulting and professional fees paid to current or former officers, directors or greater than 5% stockholders, or affiliates thereof.

General and Administrative Expenses - Related Parties

General and Administrative Expenses – Related Parties during the three months ended March 31, 2022 and 2021 were $5,261 and $39,120, respectively. These expenses relate to professional fees paid to current or former officers, directors or greater than 5% stockholders, or affiliates thereof.

Interest Expense - Related Parties

During the three months ended March 31, 2022, the Company recorded $4,562 of interest income - related parties related to loans from greater than 5% stockholders or affiliates of the valuation inputsCompany.

During the three months ended March 31, 2021, the Company utilizedrecorded $13,949 of interest expense - related parties, of which $11,526 related to determine such fair value:

8. SUBSEQUENT EVENTS 

The Company evaluates subsequent eventsinterest on certain convertible notes held by officers and transactions that occur after the balance sheet date up to the date that the financial statements were issued. Based upon this review,directors of the Company did not identify any subsequent events that would have required adjustmentand $2,423 related to interest expense on loans from officers, directors greater than 5% stockholders, or disclosure inaffiliates thereof, of the financial statements.Company.

NOTE 11 - SUBSEQUENT EVENTS

Amendments to Employee Agreements

As disclosed in the Company’s previous filings, on April 27, 2022, the Company entered into amendments with six of its officers, executives and a consultant to revise the compensation agreements currently in place with such individuals. The agreements for three officers were amended to increase their base salaries by 3% and then, effective March 1, 2022, the base salaries of two of the officers were reduced by 20% each and the other salary was reduced by 25%; such reduced amounts (the “Accrued Amounts”) will be accrued until such time as the Company has sufficient cash on hand to pay the Accrued Amounts, which the Company expects will not be until it has raised a minimum of $15,000,000 (the “Funding Determination Date”). On the Funding Determination Date, their salaries will increase to the full new base salary and the Accrued Amounts will be paid by the Company, provided that in addition, at the discretion of the Board of Directors, the base salaries on the Funding Determination Date of each executive may be further increased by 2%.

Pursuant to the amendments for two executives’ agreements, effective March 1, 2022, each of their salaries were reduced by $225,000 (100%) and $56,250 (25%), respectively, and such reduced amounts will be accrued and paid on the Funding Determination Date.

In addition, pursuant to the consultant’s agreement, upon acceptance of the data for the Phase 2b clinical trial for Dupuytren’s Contracture for publication, which has occurred, his monthly fee increased to £23,000, provided that £4,000 of such increase will be accrued and £19,000 of such fees will be payable monthly per the payroll practices of the Company in cash effective March 1, 2022 and until the earlier of (a) November 1, 2022 or (b) the Funding Determination Date, at which time all Accrued Amounts will be due.

Legal Matter – Action against the Company by Dr. Krauss

On April 29, 2022, pursuant to the legal matter described in Note 8 – “Legal Matters – Action Against the Company by Dr. Krauss”, the Company paid $975,121 for advancement of legal fees incurred by Dr. Krauss, pursuant to a court order. The payment was made to an escrow account and the Company has objected to the amounts and nature of the expenses. Furthermore, the Company has filed a reimbursement claim for the amount advanced net of its deductible of $250,000 with its director and officers’ insurance policy carrier, of which no assurance can be provided that the directors and officers’ insurance policy will cover such amounts.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSManagement’s Discussion and Analysis of Financial Condition and Results of Operations

References in this report (the “Quarterly CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Report”) to “we,, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “us” orset forth below, contains forward-looking statements, within the “Company” refer to KBL Merger Corp. IV. References to our “management” or our “management team” refer to our officersfederal securities laws, including the Private Securities Litigation Reform Act of 1995, regarding future events and directors, and references to the “sponsor” refer to KBL IV Sponsor LLC. The following discussion and analysisfuture results of the Company’s financial conditionCompany that are based on current expectations, estimates, forecasts, and results of operations should be readprojections about the industry in conjunction withwhich the financial statementsCompany operates and the notes thereto containedbeliefs and assumptions of the management of the Company. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words, and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed elsewhere in this Quarterly Report. Certain information containedReport, including under “Risk Factors”, and in other reports the discussionCompany files with the Securities and analysis set forth below includesExchange Commission (“SEC”), including the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 31, 2022 (under the heading “Risk Factors” and in other parts of that report), and include, but are not limited to, statements about:

All forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking statements” withinspeak only at the meaning of Section 27Adate of the Securities Actfiling of this Report. The reader should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and Section 21E ofexpectations reflected in or suggested by the Exchange Actforward-looking statements we make in this Report are reasonable, we provide no assurance that are not historical facts, and involve risks and uncertaintiesthese plans, intentions or expectations will be achieved. We disclose important factors that could cause our actual results to differ materially from those expectedour expectations under “Risk Factors” and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regardingand elsewhere in this Report and our Annual Report on Form 10-K for the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Suchyear ended December 31, 2021. These cautionary statements qualify all forward-looking statements relateattributable to future eventsus or future performance, but reflect management’s current beliefs, basedpersons acting on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for the Initial Public Offering filed with the SEC. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov.our behalf. Except as expressly required by applicable securities law, the Company disclaims any intention orwe assume no obligation to update or revise anythese forward-looking statements whetherfor any reason, even if new information becomes available in the future.

General Information

The following discussion is based upon our unaudited Condensed Consolidated Financial Statements included elsewhere in this Report, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Report, and in other reports we file with the SEC, and in our most recent Annual Report on Form 10-K. All references to years relate to the calendar year ended December 31^st of the particular year.

This information should be read in conjunction with the interim unaudited condensed consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the audited financial statements and notes thereto and “Part II. Other Information – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”, contained in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 31, 2022 (the “Annual Report”).

Certain capitalized terms used below and otherwise defined below, have the meanings given to such terms in the footnotes to our unaudited condensed consolidated financial statements included above under “Part I – Financial Information” – “Item 1. Financial Statements”.

Please see the section entitled “Glossary” beginning on page ii of our Annual Report for a list of abbreviations and definitions commonly used in the pharmaceutical and biotechnology industry which are used throughout this Report.

Our logo and some of our trademarks and tradenames are used in this Report. This Report also includes trademarks, tradenames and service marks that are the property of others. Solely for convenience, trademarks, tradenames and service marks referred to in this Report may appear without the ®, ™ and SM symbols. References to our trademarks, tradenames and service marks are not intended to indicate in any way that we will not assert to the fullest extent under applicable law our rights or the rights of the applicable licensors if any, nor that respective owners to other intellectual property rights will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend the use or display of other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

The market data and certain other statistical information used throughout this Report are based on independent industry publications, reports by market research firms or other independent sources that we believe to be reliable sources. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. We are responsible for all of the disclosures contained in this Report, and we believe these industry publications and third-party research, surveys and studies are reliable. While we are not aware of any misstatements regarding any third-party information presented in this Report, their estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties, and are subject to change based on various factors, including those discussed under, and incorporated by reference in, the section entitled “Item 1A. Risk Factors” of this Report. These and other factors could cause our future performance to differ materially from our assumptions and estimates. Some market and other data included herein, as well as the data of competitors as they relate to the Company, is also based on our good faith estimates.

See also “Cautionary Statement Regarding Forward-Looking Statements”, above, which includes information on forward-looking statements used herein and other matters which are applicable to this Report, including, but not limited to this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Unless the context requires otherwise, references to the “Company,” “we,” “us,” “our,” “180 Life”, “180LS” and “180 Life Sciences Corp.” refer specifically to 180 Life Sciences Corp. and its consolidated subsidiaries. References to “KBL” refer to the Company prior to the November 6, 2020 Business Combination.

In addition, unless the context otherwise requires and for the purposes of this Report only:

“CAD” refers to Canadian dollars;

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

“£” or “GBP” refers to British pounds sterling;

“SEC” or the “Commission” refers to the United States Securities and Exchange Commission; and

“Securities Act” refers to the Securities Act of 1933, as amended.

Going Concern and Management Liquidity Plans

As of March 31, 2022, we had an accumulated deficit of $67,118,573 and net income for the three months ended March 31, 2022 of $1,563,713. As of March 31, 2022, we had a working capital deficit of $6,120,408. The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a resultgoing concern. As we are not generating revenues, we need to raise a significant amount of new information, future eventscapital in order to pay our debts and cover our operating costs. While the Company raised money in August 2021, there is no assurance that we will be able to raise additional needed capital or otherwise.that such capital will be available under favorable terms.

Overview

We are subject to all the substantial risks inherent in the development of a blank check company incorporatednew business enterprise within an extremely competitive industry. Due to the absence of a long-standing operating history and the emerging nature of the markets in which we compete, we anticipate operating losses until we can successfully implement our business strategy, which includes all associated revenue streams. We may never achieve profitable operations or generate significant revenues.

We currently have a minimum monthly cash requirement spend of approximately $800,000. We believe that in the aggregate, we will require significant additional capital funding to support and expand the research and development and marketing of our products, fund future clinical trials, repay debt obligations, provide capital expenditures for additional equipment and development costs, payment obligations, office space and systems for managing the business, and cover other operating costs until our planned revenue streams from products are fully-implemented and begin to offset our operating costs, if ever.

Since our inception, we have funded our operations with the proceeds from equity and debt financings. We have experienced liquidity issues due to, among other reasons, our limited ability to raise adequate capital on September 7, 2016 in Delawareacceptable terms. We have historically relied upon the issuance of equity and formedpromissory notes that are convertible into shares of our common stock to fund our operations and have devoted significant efforts to reduce that exposure. We anticipate that we will need to issue equity to fund our operations and repay our outstanding debt for the purposeforeseeable future. If we are unable to achieve operational profitability or we are not successful in securing other forms of effectingfinancing, we will have to evaluate alternative actions to reduce our operating expenses and conserve cash.

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We intendgoing concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the consolidated financial statements do not include any adjustments relating to effectuatethe recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The consolidated financial statements included in this prospectus also include a going concern footnote.

Additionally, wherever possible, our Business Combination using cash fromBoard of Directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the proceedsnon-cash consideration will consist of restricted shares of our Initial Public Offeringcommon stock, preferred stock or warrants to purchase shares of our common stock. Our Board of Directors has authority, without action or vote of the shareholders, but subject to NASDAQ rules and regulations (which generally require shareholder approval for any transactions which would result in the Private Placement, our securities, debt or a combination of cash, securities and debt.

The issuance of additionalmore than 20% of our then outstanding shares of common stock or voting rights representing over 20% of our then outstanding shares of stock), to issue all or part of the authorized but unissued shares of common stock, preferred stock:stock or warrants to purchase such shares of common stock. In addition, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market in the future. These actions will result in dilution of the ownership interests of existing shareholders, may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management’s ability to maintain control of us, because the shares may be issued to parties or entities committed to supporting existing management.

Organization of MD&A

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. MD&A is organized as follows:

Similarly, if we issue debt securities, it could result in: