SPRUCE BIOSCIENCES, INC.

We face risks and uncertainties associated with our business, many of which are beyond our control. Some of the material risks associated with our business include the following:

•

We have a limited operating history, have incurred significant net losses since our inception, and anticipate that we will continue to incur significant net losses for the foreseeable future, and such net losses are expected to increase as we continue our clinical development of, and seek regulatory approvals for, our product candidates, tralesinidase alfa, tildacerfont, SPR202, SPR204 and any future product candidates.

•

We will need substantial additional financing to develop our product candidates and implement our operating plan. If we fail to obtain additional financing, we may be forced to delay, reduce or eliminate our product development programs or commercialization efforts.

•

We do not currently have sufficient working capital to fund our planned operations for the next twelve months and substantial doubt exists as to our ability to continue as a going concern.

•

If we are unable to advance our product candidates in clinical development, obtain regulatory approval, and ultimately commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed.

•

Our clinical trials may fail to adequately demonstrate the safety and efficacy of our product candidates, which could prevent or delay regulatory approval and commercialization.

•

We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.

•

Preclinical and clinical drug development involves a lengthy and expensive process with uncertain outcomes, and results of earlier studies and trials may not be predictive of future trial results. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of tralesinidase alfa, tildacerfont and our other current and future product candidates.

•

If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

•

Any delays in the commencement or completion, or termination or suspension, of our clinical trials could result in increased costs to us, delay or limit our ability to generate revenue, and adversely affect our commercial prospects.

•

Tralesinidase alfa and tildacerfont are, and our other current and future product candidates will be, subject to extensive regulation and compliance obligations, which are costly and time-consuming, and such regulation may cause unanticipated delays or prevent the receipt of the required approvals to commercialize tralesinidase alfa, tildacerfont and our other current and future product candidates.

•

Interim, topline, and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

•

If the market opportunities for tralesinidase alfa, tildacerfont and our other current and future product candidates are smaller than we believe they are, our future revenue may be adversely affected and our business may suffer.

•

We currently have no marketing and sales organization and have yet to commercialize a product. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell tralesinidase alfa, tildacerfont and our other current and future product candidates, we may not be able to generate product revenues.

•

Unfavorable U.S. and global economic and geopolitical conditions could adversely affect our business, financial condition or results of operations.

•

We are highly dependent on our key personnel, and if we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

•

Coverage and reimbursement may be limited or unavailable in certain market segments for tralesinidase alfa, tildacerfont and our other current and future product candidates, which could make it difficult for us to sell tralesinidase alfa, tildacerfont and our other current and future product candidates profitably.

•

If we fail to develop and commercialize additional product candidates, we may be unable to grow our business.

•

We depend on intellectual property licensed from others, the termination of which could result in the loss of significant rights, which would harm our business.

•

We rely on third parties to conduct our clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize tralesinidase alfa, tildacerfont, and our other product candidates.

•

We rely completely on third parties to manufacture our preclinical and clinical drug supplies and we intend to rely on third parties to produce commercial supplies of tralesinidase alfa, tildacerfont and any future product candidates, if approved, and these third parties may fail to obtain and maintain regulatory approval for their facilities, fail to provide us with sufficient quantities of drug product or fail to do so at acceptable quality levels or prices.

•

If we are unable to obtain and maintain sufficient intellectual property protection for TA-ERT, SPR202, tildacerfont, any future product candidates, and other proprietary technologies we develop, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize TA-ERT, SPR202, and tildacerfont, if approved, any future product candidates, and other proprietary technologies if approved, may be adversely affected.

•

If we fail to meet all applicable requirements of the Nasdaq Capital Market (“Nasdaq”) and Nasdaq determines to delist our common stock, the delisting could adversely affect the market liquidity of our common stock and the market price of our common stock could decrease.

PART I

Item 1. Bus