Company: SPRB
Filing Date: 2025-06-06
Form Type: DEFA14A
Source: 0000950170-25-083045
Chunk: 8

Company: SPRUCE BIOSCIENCES, INC.
Filing Date: 2025-06-06
Form: DEFA14A
Chunk 8
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 May 27, 2025. On May 29, 2025, the Company appeared before the Hearing Panel and presented arguments in support of its appeal. The Company is awaiting Nasdaq’s determination as to whether the suspension will be lifted.

As a result of the suspension in trading, on April 29, 2025 the Company’s common stock began trading publicly on the over-the-counter market under its existing symbol “SPRB”. The over-the-counter market is generally considered to have less trading volume and to be a less efficient market than the Nasdaq, making it more difficult for us to raise additional capital through the public or private sale of equity securities and for investors to dispose of or obtain accurate quotations as to the market value of our common stock. Many investors may be unable to buy or sell our common stock due to difficulty in accessing the over-the-counter market, policies preventing them from trading in securities not listed on a national exchange, or other reasons. Moreover, our common stock may come within the definition of “penny stock” under the Exchange Act, which imposes additional sales practice requirements on broker-dealers who sell securities to persons other than established customers and accredited investors. These requirements may reduce trading activity in the secondary market for our common stock and may impact the ability or willingness of broker-dealers to sell our securities which could limit the ability of stockholders to sell their securities in the public market and limit our ability to attract and retain qualified employees or raise additional capital in the future.

The Reverse Stock Split is a key component in our plan to regain and sustain compliance with the Nasdaq listing requirements. Accordingly, the Board recommended that our stockholders approve the Reverse Stock Split Proposal to effect the Reverse Stock Split and directed that this proposal be submitted to our stockholders for approval at the Annual Meeting, including for the reasons discussed below.

Appeal to a Broader Range of Investors to Generate Greater Investor Interest in and Potential Financing for the Company

An increase in our stock price may make our common stock more attractive to investors. Brokerage firms may be reluctant to recommend lower-priced securities to their clients. Many institutional investors and investment funds have policies prohibiting them from holding lower-priced stocks or stocks not traded on a national securities exchange in their portfolios, which reduces the number of potential purchasers of our common stock. Investors may also be dissuaded from purchasing lower-priced stocks because the brokerage commissions, as a percentage of the total transaction, tend to be higher for such stocks. Moreover, the analysts at many brokerage firms do not monitor the trading activity or otherwise