Compliance Program

Comprehensive Compliance Program Description

I. Introduction

Silvergate Pharmaceuticals, Inc. (Silvergate) is committed to conducting its business in compliance with all applicable laws, rules, and regulations and to the highest standards of ethical conduct. To this end, we have established and will maintain a Comprehensive Compliance Program (“Compliance Program”) in accordance with the OIG Compliance Program Guidance for Pharmaceutical Manufacturers (the “OIG Guidance”), published by the Office of Inspector General, U.S. Department of Health and Human Services. Our Compliance Program is a key component of our commitment to adhering to the highest standards of corporate responsibility and fostering a culture of compliance that places a premium on doing business with integrity.

The purpose of our Compliance Program is to (1) prevent, detect, and remediate violations of laws, rules, regulations, as well as Silvergate policies and procedures and (2) promote a culture of the highest ethics within the organization. It is Silvergate’s expectation that employees will comply with our Code of Business Conduct and the policies and procedures established in support of such Code. As the OIG Guidance recognizes, however, the implementation of a Compliance Program cannot guarantee the elimination of improper employee conduct.

Silvergate has described below the fundamental elements of our Compliance Program. As recognized in the OIG Guidance, we have tailored our Compliance Program to fit the unique environment of our company. Moreover, our Compliance Program is dynamic and we regularly review and enhance our Compliance Program to meet our evolving compliance needs.

You may obtain a copy of the Compliance Program description by calling 1-855-245-2099.

II. Overview of Compliance Program

Leadership and Structure

Compliance Officer. Silvergate has appointed a Compliance Officer who is charged with developing, implementing, and monitoring the Compliance Program. We will ensure that the Compliance Officer has the ability to exercise independent judgment and effectuate change within the organization as needed. The Compliance Officer reports to the President and Chief Executive Officer of Silvergate and has direct access to the Silvergate Board of Directors.

Compliance Committee. Silvergate has established a Compliance Committee made up of Silvergate senior management. The role of the Compliance Committee is to advise and assist the Compliance Officer in the development, implementation, and ongoing oversight of the Compliance Program. The Compliance Committee meets on a regular basis to identify and manage areas of risk and areas of critical focus for the Compliance Program.

Written Standards

Silvergate has established policies and procedures, including our Code of Business Conduct, which articulates our fundamental principles and values and provides a framework for ethical conduct within our organization. The Code of Business Conduct establishes our expectation that management, employees, and agents of Silvergate act in accordance with all applicable laws, rules, regulations, and Silvergate policies and procedures, as well as the highest standards of ethics.

Silvergate has established an annual spending limit for certain promotional activities directed toward healthcare professionals who prescribe or may influence prescribing in California. At the present time our annual spending limit is $1,000.00. Examples of items that fall within this spending limit are occasional modest meals in connection with informational presentations and educational items. This annual spending limit does not include payments to healthcare professionals for bona fide consulting or other services.

It is Silvergate’s policy to not provide any item of value to any healthcare professional with the intent of influencing that healthcare professional’s prescribing habits.

Education and Training

A critical element of our Compliance Program is the education and training of our employees on their legal and ethical obligations under applicable laws, rules, regulations, and company policies and procedures. Silvergate regularly communicates our policies and procedures to ensure a thorough understanding of the company’s expectations and regularly reviews and updates these training programs.

Internal Lines of Communication

Silvergate actively fosters dialogue between management and employees. Our goal is for all employees to know to whom to turn when seeking answers to questions or reporting possible violations of company policies or procedures, and understand that they can make such reports without fear of retaliation. To that end, we have adopted an open-door policy, as well as confidentiality and non-retaliation policies. We have a confidential, toll-free compliance hotline to which employees and persons outside of Silvergate may anonymously report any concerns or suspected violations of applicable laws, rules, regulations, or Silvergate policies or procedures.

Auditing and Monitoring

Silvergate’s Compliance Program includes monitoring and auditing to evaluate adherence to Silvergate’s policies and procedures. We note that, in accordance with the OIG Guidance, the nature, extent, and frequency of our compliance monitoring and auditing may vary according to new regulatory requirements, changes in business practices, and other considerations.

Responding to Potential Violations

When Silvergate becomes aware of potential violations of applicable laws, rules, regulations, or company policies and procedures, the company will promptly investigate such matters and make a determination as to whether the facts substantiate the existence of a violation. Silvergate will document the conduct of such investigations.

Disciplinary and Corrective Action

While each substantiated violation will be considered on a case-by-case basis, where appropriate we will utilize disciplinary action consistent with company policy to address violative conduct and to deter future violations. We will also work to determine the root cause of the violation and assess whether the violation is due to gaps in company policies or procedures and take appropriate corrective action designed to prevent future violations.

III. Declaration Clause for California, as of December 2016

Silvergate Pharmaceuticals, Inc. hereby declares that, to the best of our knowledge, information, and belief, and based upon our good-faith understanding of the statutory requirements, we have, as of December 2016, established a Comprehensive Compliance Program that is in material compliance with the requirements of California Health and Safety Code §§ 119400-119402. While Silvergate’s Comprehensive Compliance Program cannot completely eliminate the possibility that an individual employee will engage in improper conduct, our program is reasonably designed to prevent and detect violations of applicable laws, rules, and regulations, as well as our own internal policies and procedures.