SCHEDULE 13D/A: RiverVest Group Reduces Stake in Spruce Biosciences Below 5% Threshold

A group of RiverVest Venture funds and associated individuals have filed an amended Schedule 13D, indicating they collectively ceased to beneficially own more than 5% of Spruce Biosciences, Inc.'s common stock as of January 7, 2025.

Summary

• RiverVest Venture Fund III, L.P., RiverVest Venture Fund III (Ohio), L.P., RiverVest Venture Partners III (Ohio), LLC, RiverVest Venture Partners III, L.P., RiverVest Venture Partners III, LLC, RiverVest Venture Fund IV, L.P., RiverVest Venture Partners IV, L.P., RiverVest Venture Partners IV, LLC, John P. McKearn, Ph.D., Jay Schmelter, Thomas C. Melzer, and Niall O'Donnell, Ph.D. (collectively, the "Reporting Persons") have reported a change in their beneficial ownership of Spruce Biosciences, Inc. (the "Issuer").
• As of January 7, 2025, the Reporting Persons collectively ceased to beneficially own more than five percent of the Issuer's outstanding Common Stock.
• The aggregate beneficial ownership for the group, as represented by the highest reported individual/entity percentage (John P. McKearn, Ph.D. and Jay Schmelter), is 1,759,521 shares, which constitutes 4.2% of the Issuer's Common Stock.
• This aggregate includes 1,168,521 shares of Common Stock and 591,000 additional shares issuable upon the exercise of currently exercisable warrants held by the RiverVest funds.
• The warrants are exercisable at a price of $3.96 per share.
• The percentage ownership is based on 41,302,599 shares of Common Stock outstanding as of November 8, 2024, as reported in the Issuer's Form 10-Q filed with the SEC on November 12, 2024.

Sentiment

Score: 3

Explanation: The sentiment is moderately negative as a significant institutional investor group has reduced its stake below the 5% reporting threshold, which can be interpreted as a loss of confidence or a strategic divestment.

Negatives

• A significant venture capital group, RiverVest, has reduced its beneficial ownership in Spruce Biosciences, Inc. below the 5% reporting threshold, which could be interpreted by the market as a decrease in conviction or a strategic divestment.
• The reduction in stake by a major investor may signal potential concerns about the company's future prospects or valuation.

Risks

• The reduction in beneficial ownership by a key institutional investor group could lead to negative market sentiment and potential downward pressure on the stock price.
• It may indicate a lack of confidence from a previously significant shareholder, potentially influencing other investors' decisions.

Future Outlook

NA

Industry Context

This filing is a standard disclosure of a change in significant beneficial ownership, common in the biotech or pharmaceutical sector where venture capital firms often invest early and may reduce stakes as companies mature or strategic objectives shift. It does not provide broader industry trends but reflects an investor's decision regarding a specific company.

Stakeholder Impact

• Shareholders: May interpret the reduction in a significant investor's stake as a negative signal, potentially leading to decreased investor confidence and selling pressure on the stock.
• Company Management: May need to address market concerns regarding the investor's reduced position and articulate their strategy to maintain investor confidence.

Key Dates

Recommendation

Keywords

Spruce Biosciences, SEC filing, Schedule 13D, beneficial ownership, RiverVest Venture, common stock, warrants, institutional investor, ownership change