Surrozen (SRZN) Announces $192.5M Private Placement

Surrozen, Inc. (“Surrozen” or the “Company”) (Nasdaq: SRZN, SRZNW), a company pioneering targeted therapeutics that selectively activate the Wnt Pathway for tissue repair and regeneration, today announced that it has entered into securities purchase agreements with certain institutional and accredited investors to purchase shares of common stock, pre-funded warrants and accompanying warrants to purchase shares of common stock. If the warrants to purchase common stock are exercised in full, the private placement would provide approximately $192.5 million in gross proceeds and result in the issuance of approximately 12.2 million shares of common stock. The private placement was priced “at-the-market” under the rules and regulations of The Nasdaq Stock Market LLC. The private placement is expected to close on or about April 4, 2024, subject to customary closing conditions.

At the closing, the Company will issue to the investors 1,089,033 shares of common stock and pre-funded warrants to purchase 40,000 shares of common stock, at a purchase price of $15.50 and $15.4999, respectively, for aggregate gross proceeds of approximately $17.5 million, before deducting placement agent fees and other expenses payable by the Company. Each pre-funded warrant has an exercise price of $0.0001 per share, is exercisable immediately and will not expire until exercised in full. The purchase price per share and per pre-funded warrant includes $1.25, in accordance with the rules and regulations of The Nasdaq Stock Market LLC, for the following accompanying common stock warrants:

• Series A common stock warrants to purchase up to 1,129,033 shares of common stock with an exercise price of $15.50 per share, for aggregate gross proceeds of up to approximately $17.5 million, exercisable immediately upon issuance for 5 years.

• Series B common stock warrants to purchase up to 1,228,071 shares of common stock with an exercise price of $14.25 per share, for aggregate gross proceeds of up to approximately $17.5 million, exercisable immediately upon issuance until the fifth trading day following the Company’s announcement that (i) it has completed the enrollment of at least 15 patients with a 30-day mortality rate less than 30% in the Company’s SZN-043 Phase 1b clinical trial for the treatment of severe alcohol-associated hepatitis, with no recommended changes by the Safety Review Committee to the study design, including changes related to dose or schedule, and (ii) Safety Review Committee approval for the Company to advance to a higher dose cohort.

• Series C common stock warrants to purchase up to 4,375,000 shares of common stock with an exercise purchase price of $16.00 per share, for aggregate gross proceeds of up to approximately $70 million, exercisable for 30 days following the Company’s announcement of final data from the SZN-043 phase 1b clinical trial for the treatment of severe alcohol-associated hepatitis.

• Series D common stock warrants to purchase up to 4,375,000 shares of common stock with an exercise price of $16.00 per share, for aggregate gross proceeds of up to approximately $70 million, exercisable for 30 days following the Company’s announcement of the enrollment of at least 50 patients in the SZN-043 Phase 2/3 clinical trial for the treatment of severe alcohol-associated hepatitis.

The private placement includes participation from new and existing investors, including RA Capital Management, The Column Group, Nantahala Capital, Stonepine Capital Management, and StemPoint Capital, in addition to other life sciences investors.

In addition, members of management will purchase an additional 2,948 shares of common stock at $16.96 per share, together with the accompanying warrants.

Cooley LLP is advising Surrozen with respect to the private placement.

Guggenheim Securities, LLC is acting as sole placement agent for the private placement and is being advised by Mintz, Levin, Cohn, Ferris, Glovsky, and Popeo, P.C.

The Company intends to use the net proceeds from the private placement to fund the SZN-043 clinical development program, including the expansion of the SZN-043 Phase 1b clinical trial for the treatment of severe alcohol-associated hepatitis to 30 patients, and for other general corporate purposes. The net proceeds from the closing of the private placement (before the exercise of any warrants), combined with current cash, cash equivalents and marketable securities, is expected to fund the Company’s operating and capital expenditures through the first half of 2025.

The securities being sold in the private placement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state, and may not be offered or sold in the United States, except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act. Surrozen has agreed to file a registration statement with the Securities and Exchange Commission registering the resale of the shares of common stock and shares of common stock issuable upon the exercise of the warrants issued in the private placement within 15 days of the closing.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor will there be any sales of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such jurisdiction.

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