2.	Risks and Uncertainties

The Company operates in a highly regulated and competitive environment. The development, manufacturing and marketing of pharmaceutical products require approval from, and are subject to ongoing oversight by, the Food and Drug Administration (“FDA”) in the United States, the Therapeutic Goods Administration in Australia, the European Medicines Agency in the European Union, and comparable agencies in other countries. Obtaining approval for a new pharmaceutical product is never certain,

may

take many years, and is normally expected to involve substantial expenditures.

We have incurred losses of

$36.6

million since our inception in

2011.

For the

three

months ended

March 31, 2019,

we incurred a net loss of

$1.6

million, which includes the amortization of discount on debt of

$1.0

million. We also incurred negative cash flows from operating activities of

$0.8

million for this period. During this same period, we raised

$0.8

million from the sale of convertible promissory notes and warrants to purchase common stock, as discussed in Note

titled “Liquidity and Business Plan”. As we continue to pursue development activities and seek commercialization of our initial product candidate, SBP-

101,

we expect to incur substantial losses, which are likely to generate negative net cash flows from operating activities,. As of

March 31, 2019,

we had cash of

$1.4

million, working capital deficit of

$1.7

million (current assets less current liabilities excluding unamortized debt discount of

$1.1

million), and stockholders’ deficit of

$0.6

million. The Company’s principal sources of cash have historically included the issuance of convertible debt and equity securities.

The accompanying condensed consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The condensed

consolidated financial statements do

not

include any adjustments relating to the recoverability or classification of assets or the amounts of liabilities that might result from the outcome of these uncertainties. Our current independent registered public accounting firm included a paragraph emphasizing this going concern uncertainty in their audit report regarding our

2018

financial statements dated

March 22, 2019.

Our ability to continue as a going concern, realize the carrying value of our assets and discharge our liabilities in the ordinary course of business is dependent upon a number of factors, including our ability to obtain additional financing, the success of our development efforts, our ability to obtain marketing approval for our SBP-

101

product candidate in the United States, Australia, the European Union or other markets and ultimately our ability to market and sell our SBP-

101

product candidate. These factors, among others, raise substantial doubt about our ability to continue operations as a going concern. See Note

titled “Liquidity and Business Plan.”