1. Business Sun BioPharma, Inc. and its wholly-owned subsidiary Sun BioPharma Australia Pty Ltd. (collectively we, us, our, and the Company) exist for the primary purpose of advancing the commercial development of a proprietary polyamine analogue for pancreatic cancer and for a second indication in chronic pancreatitis. We have exclusively licensed the worldwide rights to this compound, which has been designated as SBP- 101, from the University of Florida Research Foundation, Inc. (UFRF). SBR was incorporated under the laws of the State of Delaware on September 21, 2011. Sun BioPharma Australia Pty Ltd was established on May 24, 2013, and incorporated under the laws of Australian Securities and Investments Commission. On September 4, 2015, Sun BioPharma Research, Inc. (SBR), our predecessor company, executed an Agreement and Plan of Merger with Cimarron Medical, Inc., (Cimarron), a Utah corporation, and SB Acquisition Corporation, a wholly owned subsidiary of Cimarron (the Merger). The merger of SB Acquisition Corporation with and into SBR resulted in all of the issued and outstanding common stock of SBR being converted into the right to receive an aggregate of 28,442,484 shares of Cimarrons common stock, representing four shares of Cimarron common stock for every one share of SBR common stock cancelled in the Merger. As a result of this transaction, former SBR stockholders owned approximately 98.8% of the outstanding capital stock of Cimarron. Concurrent with the completion of the Merger, Cimarrons name was changed to Sun BioPharma, Inc. See Note 8 for additional information regarding the Merger. On May 17, 2016, our stockholders approved the changing the domicile of Sun BioPharma, Inc., formerly known as Cimarron, from the State of Utah to the State of Delaware through a merger with SBR (the Reincorporation). Upon the reincorporation, each outstanding certificate representing shares of the Utah corporations common stock was deemed, without any action by the holders thereof, to represent t