Systemback not working on Lubuntu live USB

I have installed SystemBack (SB) on Lubuntu 14.02.3LTS [lubuntu-14.04.3-LTS-desktop-i386.iso] via Ubuntu Builder (UB) [v2.5.2 ] using the following commands.

sudo apt-get install libqt5gui5 libqt5widgets5 -y
sudo add-apt-repository ppa:nemh/systemback -y
sudo apt-get update
sudo apt-get install systemback -y

I subsequently created a “live USB” from the ISO created by UB using Startup Disk Creator (SDC) [vusb-creator-gtk 0.2.56.3ubuntu0.1] which uses Fat32 and syslinux boot loader.

I want to be able make distribution “tweaks” and create an associated updated ISO using SB and then create a new bootable live USB via SDC.

The live usb boots without complication using the following boot parameters (note: I booted using the toram option):

kernel /casper/vmlinuz
append noprompt cdrom-detect/try-usb=true file=/cdrom/preseed/lubuntu.seed boot=casper nopersistent toram initrd=/casper/initrd.lz nosplash --

When starting SB the only available options are:

'System repair' and '>' (next)

Under the 'System repair' option 'Grub 2 repair' is highlighted and the available partitions for repair are each of my HD partitions (/dev/sda1 etc) but not the USB device partitions (/dev/sdb1 etc).

I feel as though I am missing something in the big picture.
Does SB not like the FAT32 format ?
Does SB not like that I am attempting to create an ISO from a squashfs version of the OS ?
Will I need to create a virtual machine of my lubuntu distribution and then utilize SB to create the desired “tweaked” ISO ?

Your help getting this sorted out will be greatly appreciated. Thanks in advance.