SPRUCE BIOSCIENCES, INC.

Previous wording

We are a biopharmaceutical company focused on developing and commercializing novel therapies for neurological disorders with significant unmet medical need. We have a diverse portfolio of product candidates aimed at addressing diseases with high unmet medical need and clear biology for treatment, for which there are either no approved therapies treating the underlying disease or suboptimal treatment options. We were founded in April 2016 and are led by a management team experienced in the development and commercialization of groundbreaking therapeutics.

Current wording

We are a biopharmaceutical company focused on developing and commercializing novel therapies for neurological disorders with significant unmet medical need. We have a diverse portfolio of product candidates aimed at addressing diseases with high unmet medical need and clear biology for treatment, for which there are either no approved therapies treating the underlying disease or suboptimal treatment options. We were incorporated in April 2016 and are led by a management team experienced in the development and commercialization of groundbreaking therapeutics.

Previous wording

Since inception, we have incurred significant losses and negative cash flows from operations. During the three months ended March 31, 2026 and 2025, we incurred net losses of $12.3 million and $14.0 million, respectively, and used $8.7 million and $12.7 million of cash in operations, respectively. As of March 31, 2026, we had an accumulated deficit of $301.5 million, and we do not expect positive cash flows from operations for the foreseeable future. We expect to continue to incur significant and increasing losses for the foreseeable future, and our net losses may fluctuate significantly from period to period, depending on the timing of expenditures on our planned research and development activities.

Current wording

Since inception, we have incurred significant losses and negative cash flows from operations. During the six months ended June 30, 2026 and 2025, we incurred net losses of $28.5 million and $16.1 million, respectively, and used $30.9 million and $21.6 million of cash in operations, respectively. As of June 30, 2026, we had an accumulated deficit of $317.7 million, and we do not expect positive cash flows from operations for the foreseeable future. We expect to continue to incur significant and increasing losses for the foreseeable future, and our net losses may fluctuate significantly from period to period, depending on the timing of expenditures on our planned research and development activities.

Previous wording

Since inception through the date of this filing, we have raised aggregate gross proceeds of $427.1 million, including $103.5 million from our initial public offering in October 2020, $116.0 million from the sale of our redeemable convertible preferred stock, $103.6 million from private placement financings, $69.0 million from the April 2026 underwritten public offering, $20.0 million from the issuance of debt, and $15.0 million upfront payment from Kaken Pharmaceutical Co., Ltd. received in April 2023. As of March 31, 2026, we had cash and cash equivalents of $54.1 million.

Current wording

Since inception through the date of this filing, we have raised aggregate gross proceeds of $432.6 million, including $103.5 million from our initial public offering in October 2020, $116.0 million from the sale of our redeemable convertible preferred stock, $109.1 million from private placement financings (including the August 2026 private placement), $69.0 million from the April 2026 underwritten public offering, $20.0 million from the issuance of debt, and $15.0 million upfront payment from Kaken Pharmaceutical Co., Ltd. received in April 2023. As of June 30, 2026, we had cash and cash equivalents of $96.3 million.

Previous wording

We believe that based on our current operating plan, our cash and cash equivalents of $54.1 million as of March 31, 2026 and the net proceeds from our April 2026 underwritten public offering of common stock and pre-funded warrants will be sufficient to fund our planned operations and debt obligations for at least 12 months following the issuance date of these financial statements included elsewhere in this Quarterly Report.

Current wording

We believe that based on our current operating plan, our cash and cash equivalents of $96.3 million as of June 30, 2026 and the proceeds from the August 2026 private placement will be sufficient to fund our planned operations and debt obligations for at least 12 months following the issuance date of these financial statements included elsewhere in this Quarterly Report.

Previous wording

advance TA-ERT through a planned confirmatory study in patients with MPS IIIB and expanded access programs;

Current wording

advance TA-ERT through our planned TrAnsform confirmatory study in patients with MPS IIIB and expanded access programs, both of which are expected to initiate in the fourth quarter of 2026 and are expected to enroll approximately 14 and 10 participants, respectively;

Previous wording

Additionally, on April 22, 2026, we closed our previously announced underwritten public offering of 1,150,000 shares of our common stock at a public offering price of $50.00 per share and pre-funded warrants to purchase up to 50,000 shares of our common stock at a public offering price of $49.99 per pre-funded warrant (which equals the public offering price per share of common stock, less the $0.01 per share exercise price of each pre-funded warrant). In addition, we granted the underwriters a 30-day option to purchase up to 180,000 additional shares of common stock at the public offering price, less underwriting discounts and commissions, which was exercised in full. The gross proceeds to us from the offering, before deducting underwriting discounts and commissions and estimated offering expenses payable by us, were approximately $69.0 million.

Current wording

Additionally, on April 22, 2026, we closed our previously announced underwritten public offering of 1,150,000 shares of our common stock at a public offering price of $50.00 per share and pre-funded warrants to purchase up to 50,000 shares of our common stock at a public offering price of $49.99 per pre-funded warrant (which equals the public offering price per share of common stock, less the $0.01 per share exercise price of each pre-funded warrant). In addition, we granted the underwriters a 30-day option to purchase up to 180,000 additional shares of common stock at the public offering price, less underwriting discounts and commissions, which was exercised in full. The net proceeds to us from the offering, after deducting underwriting discounts and commissions and offering expenses payable by us, were $64.4 million.

Previous wording

Agreement, the “Avenue Loan Agreement”), with Avenue Capital Management II, L.P., as administrative agent and collateral agent (the “Agent”) and Avenue Venture Opportunities Fund II, L.P., as lender (the “Lender”, together with the Agent, “Avenue”).

Current wording

On January 7, 2026 (the “Avenue Closing Date”), we entered into a Loan and Security Agreement (the “Avenue Loan and Security Agreement”) and a Supplement to the Loan and Security Agreement (together with the Avenue Loan and Security Agreement, the “Avenue Loan Agreement”), with Avenue Capital Management II, L.P., as administrative agent and collateral agent (the “Agent”) and Avenue Venture Opportunities Fund II, L.P., as lender (the “Lender”, together with the Agent, “Avenue”).

Previous wording

Comparisons of the Three Months Ended March 31, 2026 and 2025

Current wording

Comparisons of the Three and Six Months Ended June 30, 2026 and 2025

Previous wording

Research and development expenses decreased by $3.3 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease in clinical development expenses of $3.9 million was primarily related to lower acquisition related costs of $5.7 million, the discontinuation of the tildacerfont CAH development program of $1.9 million, offset by increased expenses for TA-ERT of $3.7 million. The increase in manufacturing expenses of $1.1 million was primarily related to TA-ERT.

Current wording

Research and development expenses increased by $9.3 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase in clinical development expenses of $0.8 million was primarily related to increased expenses for TA-ERT of $9.6 million, offset by lower one-time product acquisition related costs of $5.7 million and the discontinuation of the tildacerfont CAH development program of $3.0 million. The increase in manufacturing expenses of $8.5 million was primarily related to TA-ERT.

Previous wording

General and administrative expenses increased by $0.8 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to an increase in professional fees of $0.5 million and an increase in personnel related costs of $0.2 million.

Current wording

General and administrative expenses increased by $1.2 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 primarily due to an increase in personnel related costs of $0.9 million and an increase in professional fees of $0.2 million.

Previous wording

Interest expense increased by $0.6 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 due to an increase in our debt and its related interest rate and an increase in amortization of debt discount and issuance costs.

Current wording

Interest expense increased by $1.1 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 and increased by $1.7 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to an increase in our debt and its related interest rate and an increase in the related amortization of debt discount and issuance costs.

Previous wording

Interest and other income, net increased by $0.2 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to higher yield earned on money market fund balances.

Current wording

Interest and other income, net increased by $0.6 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 and increased by $0.7 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to higher money market fund balances.

Previous wording

Change in fair value of warrant and conversion option liabilities decreased by $0.2 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. In the prior period, the change in fair value was for pre-funded warrants issued to HBM Alpha Therapeutics, Inc. In the current period, the change in fair value relates to warrants and the conversion option under the Avenue Loan Agreement.

Current wording

Change in fair value of warrant and conversion option liabilities increased by $0.2 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 and decreased by $0.1 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. In the prior period, the change in fair value was for pre-funded warrants issued to HBM Alpha Therapeutics, Inc. In the current period, the change in fair value relates to warrants and the conversion option under the Avenue Loan Agreement.

Previous wording

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from operations. We anticipate that we will continue to incur net losses for the foreseeable future. As of March 31, 2026 and December 31, 2025, we had an accumulated deficit of $301.5 million and $289.2 million, respectively. As of March 31, 2026 and December 31, 2025, we had cash and cash equivalents of $54.1 million and $48.9 million, respectively.

Current wording

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from operations. We anticipate that we will continue to incur net losses for the foreseeable future. As of June 30, 2026 and December 31, 2025, we had an accumulated deficit of $317.7 million and $289.2 million, respectively. As of June 30, 2026 and December 31, 2025, we had cash and cash equivalents of $96.3 million and $48.9 million, respectively.

Previous wording

Since inception through the date of this filing, we have raised aggregate gross proceeds of $427.1 million, including $103.5 million from our initial public offering in October 2020, $116.0 million from the sale of our redeemable convertible preferred stock, $103.6 million from private placement financings, $69.0 million from the April 2026 underwritten public offering, $20.0 million from the issuance of debt, and $15.0 million upfront payment from Kaken Pharmaceutical Co., Ltd. received in April 2023. As of March 31,

Current wording

Since inception through the date of this filing, we have raised aggregate gross proceeds of $432.6 million, including $103.5 million from our initial public offering in October 2020, $116.0 million from the sale of our redeemable convertible preferred stock, $109.1 million from private placement financings (including the August 2026 private placement), $69.0 million from the April 2026 underwritten public offering, $20.0 million from the issuance of debt, and $15.0 million upfront payment from Kaken Pharmaceutical Co., Ltd. received in April 2023. As of June 30, 2026, we had cash and cash equivalents of $96.3 million.

Previous wording

2026, we had cash and cash equivalents of $54.1 million. We believe that based on our current operating plan, our cash and cash equivalents of $54.1 million as of March 31, 2026 and the net proceeds from our April 2026 underwritten public offering of common stock and pre-funded warrants will be sufficient to fund our planned operations and debt obligations for at least 12 months following the issuance date of these financial statements included elsewhere in this Quarterly Report.

Current wording

On August 7, 2026, we entered into a Stock Purchase Agreement with the National MPS Society and the Cure Sanfilippo Foundation, pursuant to which we agreed to sell and issue 121,203 shares of our common stock in a private placement transaction. The purchase price per share was $45.38 per share. The total gross proceeds were $5.5 million. The proceeds will be used to partially fund our early access program, which is expected to initiate in the fourth quarter of 2026. We believe that based on our current operating plan, our cash and cash equivalents of $96.3 million as of June 30, 2026 and proceeds from the August 2026 private placement will be sufficient to fund our planned operations and debt obligations for at least 12 months following the issuance date of these financial statements included elsewhere in this Quarterly Report.

Previous wording

In November 2025, the SEC declared effective the Shelf Registration covering the sale of up to $300.0 million of our securities. Also, in March 2026, we entered into the Sales Agreement with Jefferies, pursuant to which we may elect to issue and sell, from time to time, shares of common stock having an aggregate offering price of up to $75.0 million under the Shelf Registration through Jefferies acting as the sales agent and/or principal (the “ATM Offering”). We have also filed a prospectus supplement with the SEC in connection with the ATM Offering under the Shelf Registration. Upon delivery of an issuance notice and subject to the terms and conditions of the Sales Agreement, Jefferies may sell the shares at market prices by any method deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act, including sales made directly on or through The Nasdaq Global Select Market (“Nasdaq”), the existing trading market for our common stock. As of March 31, 2026, we have not issued any shares of common stock pursuant to the Sales Agreement. We have agreed to pay Jefferies commissions for its services of acting as agent of 3.0% of the gross proceeds from the sale of the shares pursuant to the Sales Agreement. We have also agreed to provide Jefferies with customary indemnification and contribution rights.

Current wording

In November 2025, the SEC declared effective the Shelf Registration covering the sale of up to $300.0 million of our securities. Also, in March 2026, we entered into the Sales Agreement with Jefferies, pursuant to which we may elect to issue and sell, from time to time, shares of common stock having an aggregate offering price of up to $75.0 million under the Shelf Registration through Jefferies acting as the sales agent and/or principal (the “ATM Offering”). We have also filed a prospectus supplement with the SEC in connection with the ATM Offering under the Shelf Registration. Upon delivery of an issuance notice and subject to the terms and conditions of the Sales Agreement, Jefferies may sell the shares at market prices by any method deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act, including sales made directly on or through The Nasdaq Capital Market, the existing trading market for our common stock. As of June 30, 2026, we have not issued any shares of common stock pursuant to the Sales Agreement. We have agreed to pay Jefferies commissions for its services of acting as agent of 3.0% of the gross proceeds from the sale of the shares pursuant to the Sales Agreement. We have also agreed to provide Jefferies with customary indemnification and contribution rights.

Previous wording

As of March 31, 2026, future payments of principal and interest on the Avenue Loans, which matures in July 2029, were $20.4 million. For a description of the terms of the Avenue Loans, see the section titled “Material Agreements — Loan Agreement with Avenue” above.

Current wording

As of June 30, 2026, future payments of principal and interest on the Avenue Loans, which matures in July 2029, were $19.9 million. For a description of the terms of the Avenue Loans, see the section titled “Material Agreements — Loan Agreement with Avenue” above.

Previous wording

As of March 31, 2026, the total undiscounted lease payments for our non-cancelable operating lease for office space, which terminates in February 2028 unless renewed, was $0.7 million.

Current wording

As of June 30, 2026, the total undiscounted lease payments for our non-cancelable operating lease for office space, which terminates in February 2028 unless renewed, was $0.6 million.

Previous wording

Net cash used in operating activities decreased by $4.0 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to lower payments driven by decreased clinical development activities and receipt of $2.6 million related to the Allievex Purchase Agreement due to the completed Allievex bankruptcy proceedings.

Current wording

Net cash used in operating activities increased by $9.3 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to increased clinical development activities for TA-ERT offset by the receipt of $2.6 million related to the Allievex Purchase Agreement due to the completed Allievex bankruptcy proceedings.

Previous wording

For the three months ended March 31, 2026, net cash used in investing activities was related to purchase of property and equipment.

Current wording

For the six months ended June 30, 2026, net cash used in investing activities was related to purchase of property and equipment.

Previous wording

For the three months ended March 31, 2026, net cash provided by financing activities was $13.9 million, consisting primarily of net proceeds from the Avenue Loans of $14.0 million.

Current wording

For the six months ended June 30, 2026, net cash provided by financing activities was $78.4 million, consisting primarily of net proceeds from the issuance of common stock and warrants of $64.4 million and net proceeds from the Avenue Loans of $14.0 million.

Previous wording

For the three months ended March 31, 2025, net cash used in financing activities was $0.4 million, consisting primarily of principal payments on debt of $0.4 million.

Current wording

For the six months ended June 30, 2025, net cash used in financing activities was $0.8 million, consisting of principal payments on debt of $0.8 million.

Previous wording

Our critical accounting estimates are described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in the Annual Report. During the three months ended March 31, 2026, there were no changes to our critical accounting estimates from those discussed in the Annual Report.

Current wording

Our critical accounting estimates are described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in the Annual Report. During the six months ended June 30, 2026, there were no changes to our critical accounting estimates from those discussed in the Annual Report.