Annual General Meeting Transcript - SPRB 2026-05-21

Operator

Thank you for standing by and welcome to the Spruce Biosciences, Inc. annual meeting. I will now turn the meeting over to Mike Gray, Executive Chairman of the Board of Sprouse Biosciences, Inc. Please go ahead.

Michael Grey, Chairman

Good morning and welcome to the 2026th Annual Meeting of Stockholders of Spruce Biosciences, Inc. My name is Mike Gray and I serve as Executive Chair of the Board of Directors. I will be chairing today's meeting. It is now 10 a.m. Pacific time on Thursday, May 21, 26. I hereby call this meeting to order. On behalf of the Board of Directors and the entire SPRES team, thank you for joining us today. Before we begin the full business of the meeting, I'd like to introduce the members of our Board of Directors and our Executive Officers who are joining today. From our Board, Harvey Schwartzberg, our Chief Executive Officer and our Director, Camilla Simpson, First of all, Bernardo Cole, Daniel Spiegelman, Kelly Walbert, Kirk Ways, who also serves as our interim chief medical officer. From our executive team, in addition to Harvey Swarovski, we are joined by Samir Gahid, our president and CFO, and Dale Hook's chief commercial officer. I'd also like to acknowledge representatives of BDO USA PC, our independent registered public accounting firm, who are available to respond to appropriate questions today. Serving as Corporate Secretary and Inspector of the Election for today's meeting is Samir Gharad, who will receive and tabulate the votes cast. I'll now turn the meeting over briefly to Samir to address procedural matters, including notice of the meeting and the presence of a quorum.

Samir Gharib, CFO

Thank you, Mike. The record date for this meeting was the Poets of Business on March 24, 2026. As of the record date, there were 1,372,278 shares of common stock outstanding and entitled to vote at this meeting. Each share is entitled to one vote on each matter to be acted upon. Notice of this meeting and the proxy materials, including the proxy statement and the company's 2025 annual report, were distributed and made available to SOC World Reserve Record beginning on or about April 9, 2026, in accordance with the rules of the Securities and Exchange Commission and the company's bylaws. An affidavit of mailing has been filed with the records of this meeting. Under the company's bylaws, the holders of a majority of the outstanding shares entitled to vote, or 686,140 shares, must be present virtually or by proxy to constitute a quorum. I confirm that the number of shares present, virtually or by proxy, exceeds that threshold. Accordingly, a quorum is present and the meeting may proceed to business.

Michael Grey, Chairman

Thank you. The Secretary's report confirms that this meeting has been duly called and noticed and the quorum is present. The meeting is therefore properly constituted to transact business. Before we proceed with the proposals, let me briefly review the rules of conduct for today's virtual meeting. First, this meeting is being conducted virtually through a live webcast. Stockhols may submit questions and vote during the meeting through the virtual meeting website. Second, polls for each proposal will be opened together at the start of the voting portion and will remain open until I declare the post closed at the end of the voting portion. If you have already voted by proxy and do not wish to change your vote, you do not need to take any further action. Third, the Q&A portion of the meeting will follow the formal business. Questions may be submitted at any time to the virtual meeting platform. We will address as many appropriate questions as time permits in accordance with the rules of conduct posted on the meeting website. Fourth, this meeting is not a forum for general economic, political, or personal commentary. Questions should be limited to matters relevant to the operation of the company and to the business of the meeting. I retain the discretion to defer or decline questions if not appropriate.

Michael Grey, Chairman

With those rules in mind, we will now proceed to formal business of the meeting.

Michael Grey, Chairman

The first item of business is the election of three Class III directors, each to serve until the company's 29th annual meeting of stockholders and until his or her successor has been duly elected and qualified or until his or her earlier death, resignation, or removal. The board has nominated the following three individuals for election as class three directors. Myself, Camilla Simpson, and Javier Schwarzenberg. Biographical information for each nominee is set forth in the proxy statement. Directors will be elected by a plurality of the votes cast. That is, the three nominees receiving the greatest number of four votes will be elected. Stockholders may vote for each nominee or withhold their vote with respect to any nominee. Withhold votes and broker non-votes will have no effect on the outcome of this proposal. The board recommends a vote for each of the main nominees. I now declare proposal one properly before the meeting. The second item of business is the ratification of the selection by the audit committee of the board of directors of BDO USAPC as the company's independent registered public accounting firm for the year for the fiscal year ending December 31, 2026. Approval of this proposal requires the affirmative vote of the majority of the shares present virtually or by proxy at the meeting and entitle the vote on the subject matter. Abstentions will have the same effect as a vote against. this proposal is considered a routine matter so we do not expect broken on votes for this proposal. The board recommends a vote for Proposal 2. I now declare Proposal 2 properly before the meeting. The third item of business is an advisory vote to approve the compensation of the company's named executive officers as disclosed in the proxy statement, commonly referred to as the say on pay vote. Approval of this proposal requires the affirmative vote of a majority of the shares present virtually or by proxy at the meeting and entitled to vote on the subject matter. Abstentions will have the same effect as the vote against. Broker non-votes will have no effect on the outcome. Because this vote is advisory, advisory, it will not be binding on the company or the board. However, the board and the compensation committee value the views of our stockholders and will consider the outcome of the vote when making future decisions regarding executive compensation. The board recommends a vote for proposal three. I now declare proposal three properly before the meeting. The fourth and final of the business is an advisory vote on the preferred frequency of future stockholder advisory votes on the compensation of the company's named executive officers. Stockholders may indicate whether they prefer that the advisory vote on executive compensation occurs every one year, two years, or three years, or may abstain from voting. Abstentions will have the same effect as a vote against each of the proposed frequencies. Broker non-votes will have no effect on the outcome. If none of the three options receives the affirmative vote of a majority of the shares present and entitled to vote, the company will consider the option receiving the highest number of four votes to be the frequency preferred by our stockholders. Because this vote is advisory, it will not be binding on the company or the board. However, the board values the views of our stockholders and will take the outcome into account in determining the frequency of future say on pay votes. The board recommends a vote for of one year at the preferred frequency and now declare proposal four properly before the meeting.

Michael Grey, Chairman

All four proposals are now properly before the meeting.

Michael Grey, Chairman

The polls are now open for voting on proposals one, two, three, and four. If you have already voted by proxy and do not wish to change your vote, you do not need to take any further action, your vote has been received. If you are attending the meeting through the virtual meeting platform and have not yet voted, or if you wish to change your previously surveyed vote, please cast your vote now by following the instructions on the meeting website. You'll need the 16 digit control number from your notice of internet availability, proxy card or voting instruction form.

Michael Grey, Chairman

If there's anyone present who has not yet voted and would like to do so, please cast your vote now. Hearing no further requests to vote, the polls are now closed.

Michael Grey, Chairman

The Inspector of Election has tabulated the preliminary voting results.

Michael Grey, Chairman

Samir, please go ahead.

Samir Gharib, CFO

Thank you, Mike. Based on the preliminary report of the Inspector of Election, with respect to Proposal 1, each of the three nominees, Mike Gray, Camille Simpson, and Adyash Horsberg, have received a plurality of the votes cast. With respect to Proposal 2, the ratification of BDO USA PC as the company's independent registered public accounting firm has been approved. With respect to Proposal 3, the advisory vote on executive compensation has been approved on an advisory basis. With respect to Proposal 4, one year received the highest number of votes as the preferred frequency for future advisory votes on executive compensation. Final voting results certified by me will be filed with the Securities and Exchange Commission on a current report on Form 8K within four business days of this meeting.

Michael Grey, Chairman

Thank you, Samir. This concludes the formal business of the meeting.

Michael Grey, Chairman

We will now turn to the question and answer portion of today's meeting. We have a lot of approximately 10 minutes for questions from stockholders. Questions should relate to matters of interest to stockholders generally and to the operation of the company. Consistent with the rules of conduct posted on the meeting website, we may group questions or similar topics, or we may decline to address questions that are not appropriate for this forum.

Michael Grey, Chairman

Do we have any questions at this time?

Speaker 2

Thank you, Mike. We have two questions.

Samir Gharib, CFO

The first question is as follows. Given access to the Avenue Loan and the availability of the at-the-market issuing of smaller batches of shares, What cash flow considerations led to the bulk of issuance of 1.3 million shares versus these two routes? I would be happy to address that question. Now, prior to our recent financing, our cash runway extended through the end of this year. And while importantly, that allowed the company to finance its operations through its anticipated BLA submission of TAERT, which remains on track for the fourth quarter of this year, it did not allow us to finance the company to and through the anticipated PDUFA date for the submission and the program. And so given the scale of capital needed, we deemed that a follow-on offering be the most appropriate mechanism to achieve that additional financing, importantly through and to and through the PDUFA date. Now from a use of proceeds standpoint, these additional proceeds will allow us to finance pre-launch and launch activities. It'll allow us to fund the confirmatory study for TAERT, as well as the planned expanded access program that will be conducted in the United States. It'll finance PPQ manufacturing and other BLA enabling activities. It'll fund working capital, which effectively for the company is personnel expenses for the company. And lastly, a milestone payment that is owed to the upstream license for BioMarin.

Speaker 2

Thank you for that question. Our second question reads as follows.

Samir Gharib, CFO

Can management provide an update on the PPQ manufacturing effort, including whether production is domestic or international, the manufacturing partner's experience with biologic and enzyme replacement therapies, the current PPQ status and timeline, and the capital budget amount to complete the PPQ-backed manufacturing for the BLA submission? I will direct that question to our our CEO, Javier Schwarzberg. Javier, please go ahead. Please go ahead.

Javier Szwarcberg, CEO

Sure, happy to do that, Samir. Thank you for the question. So, we're in the process of making the first PPQ batch. We've already completed and executed two of the DS batches that will go into the PPQ. We will put four DS batches into the first, second, and third PPQ batches, DP batches, which will be submitted to the FDA. In the following sequence, the first PPQ badge prior-with the BLA and prior to the submission of the BLA will be included in the BLA documents. The second PPQ DP badge will be submitted to the BLA around the time of the mid-cycle And the third PPQ badge will be a post-approval submission, will be submitted as a PMR. We already discussed the timing of this submission in line with the FDA on this at a Type B meeting that we conducted in January of 2026, but seek to confirm this with the FDA at an upcoming Pre-VLA meeting. Samir, I'll pass on to you the financials of the cost of a PPQ batch, if you're ready to address that.

Samir Gharib, CFO

Thank you, Javier. Yes, along the lines of the response to my first question, the proceeds from the recent RERAs will allow us to fully fund the anticipated costs of the three PPQ batches that Javier has alluded to that would be part of the BLA submission and then the post-approval requirement. Thank you for that.

Javier Szwarcberg, CEO

One other piece that there was one other piece to that question which is where is a drug product substance in the context of PPQ being made? We're manufacturing them in South Korea. The vendor you were utilizing is very versed has done a ton of submissions and has participated in number of BLAs. Their expertise is actually on biologics, including peptides and monoclonal antibodies.

Speaker 2

Thank you, Javier.

Samir Gharib, CFO

Our last question of the day, which I'll also direct to Javier, reads as follows. Can you advise on the progress of Phase III enrollment?

Javier Szwarcberg, CEO

Sure.

Javier Szwarcberg, CEO

So the 301 trial, which is the confirmatory trial that we expect to initiate while the product is under review by the FDA has not initiated enrollment just yet we've completed the study protocol SAP and feasibility assessment which all three we've submitted to the FDA in final format we've have alignment from the FDA that it's all right to initiate the trial while the product is under review and initiate is defined as enrolling the first patient have to study underway so

Michael Grey, Chairman

we expect to do that in the latter part of a year while the drug was when the drug is under review by the FDA thank you Javier well this concludes our Q&A session for for today's meeting Mike at this point we don't have any further questions at this time thank you Samir before we close on behalf of the board of directors and the management team, I'd like to thank our stockholders for your continued support of Spruce Biosciences and to thank our employees for their commitment and hard work throughout the past year. There being no further business to come before the meeting, this 2026 annual meeting of stockholders of Spruce Biosciences is hereby adjourned. A replay of this meeting will be made available on our investor relations website at investors.sprucebuyer.com and will remain accessible for at least 90 days. Thank you, and have a good day.

Operator

And this concludes today's meeting. You may now disconnect.