SPRUCE BIOSCIENCES, INC. 10-K Cybersecurity GRC - 2024-03-18

Page last updated on April 11, 2024

SPRUCE BIOSCIENCES, INC. reported their cybersecurity risk management and governance process in a yearly 10-K filed on 2024-03-18 16:05:38 EDT.

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10-K filed on 2024-03-18

SPRUCE BIOSCIENCES, INC. filed an 10-K at 2024-03-18 16:05:38 EDT
Accession Number: 0000950170-24-032819

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Item 1C. Cybersecurity.

Item 1C. Cybersecurity. Risk Management and Strategy We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, communications systems, hardware and software, and our critical data, including intellectual property, confidential information that is proprietary, strategic or competitive in nature, and personal health information (including clinical trial data) ( Information Systems and Data ). Our information technology function, which is led by Samir Gharib, our President, Chief Financial Officer, and Chief Compliance Officer, helps identify, assess and manage the Company s cybersecurity threats and risks. Our information technology function works to identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and the Company s risk profile using various methods including, employing both automated and manual tools and controls conducting threat and vulnerability assessments utilizing third-party services to monitor our information technology infrastructure and performing internal audits. Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: risk assessments, incident detection and response policies, network security controls for certain systems (including as applicable data segregation, data encryption, access controls, physical security, and systems threat monitoring), disaster recovery and business continuity plans, vendor risk management program, and dedicated cybersecurity staff and employee training. Our assessment and management of material risks from cybersecurity threats are integrated into the Company s overall risk management processes. For example, cybersecurity risk is addressed as a component of the Company s enterprise risk management program and the information technology function works with management to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business. Additionally, Mr. Gharib and the audit committee of the board of directors evaluate material risks from cybersecurity threats against our overall business objectives and reports to the board of directors, which evaluates our overall enterprise risk. We use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example cybersecurity software providers and managed cybersecurity service providers. We use third-party service providers to perform a variety of functions throughout our business, such as application providers, hosting companies, contract research organizations, contract manufacturing organizations, and supply chain providers. We have a vendor management program to manage cybersecurity risks associated with our use of service providers. The program includes, as applicable, risk assessment for certain vendors, security questionnaires, review of certain vendors security programs and security assessments, and imposition of cybersecurity-related contractual obligations for some vendors. Depending on the nature of the services provided, the sensitivity of the Information Systems and Data at issue, and the identity of the provider, our vendor management process may involve different levels of assessment designed to help identify cybersecurity risks associated with a provider and we may impose contractual obligations related to cybersecurity on the provider. For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, see our risk factors under Part 1. Item 1A. Risk Factors in this Annual Report on Form 10-K, including the sections titled Risk Factors If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions litigation fines and penalties disruptions of our business operations reputational harm loss of revenue or profits and other adverse consequences and Risk Factors We are subject to stringent and evolving obligations related to data privacy and security. These obligations include U.S. and foreign laws, regulations, and rules contractual obligations industry standards and policies. Our actual or perceived failure to comply with such obligations could lead to regulatory 98 Table of Contents investigations and actions (which could include civil or criminal penalties) private litigation, (including class-action claims) and mass arbitration demands disruptions to our business operations adverse publicity and other adverse consequences that could negatively affect our operating results and business. Governance Our board of directors addresses the Company s cybersecurity risk management as part of its general oversight function. The audit committee of the board of directors is responsible for overseeing Company s cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats. Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including Mr. Gharib, who oversees enterprise risk management and information security for the Company. Mr. Gharib is responsible for hiring information security personnel, integrating cybersecurity risk considerations into the Company s overall risk management strategy, and communicating key priorities to relevant personnel. Mr. Gharib is also responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports. Our incident response and vulnerability management processes and policies are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including Mr. Gharib and the Chief Executive Officer. Mr. Gharib works with the Company s incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified. In addition, the Company s incident response and vulnerability management processes and policies include reporting to the audit committee of the board of directors for certain cybersecurity incidents. The audit committee receives periodic reports from Mr. Gharib concerning the Company s significant cybersecurity threats and risk and the processes the Company has implemented to address them. The audit committee also receives various reports, summaries or presentations related to cybersecurity threats, risk and mitigation.

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