SCHEDULE 13G: 5AM Ventures and Affiliates Disclose 9.9% Stake in Surrozen, Inc. Following Private Placement

5AM Ventures VII, L.P., along with its general partner 5AM Partners VII, LLC, and managing members Andrew J. Schwab and Kush Parmar, have disclosed a 9.9% beneficial ownership stake in Surrozen, Inc. following a recent private placement.

Summary

• 5AM Ventures VII, L.P., 5AM Partners VII, LLC, Andrew J. Schwab, and Kush Parmar (collectively, the "Reporting Persons") have filed a Schedule 13G disclosing their beneficial ownership in Surrozen, Inc.
• The Reporting Persons collectively beneficially own 908,387 shares of Surrozen, Inc. common stock.
• This represents 9.9% of the Issuer's common stock, rounded down from 9.99% due to EDGAR filing system limitations.
• The ownership calculation is based on 3,281,169 shares outstanding as of March 25, 2025, plus 5,213,415 shares issued in a private placement that closed on March 26, 2025, adjusted for warrants and future share acquisitions.
• 5AM Ventures VII directly holds 310,000 shares and warrants exercisable for up to 155,000 shares.
• Ventures VII has also agreed to purchase an additional 465,000 shares and warrants for up to 232,500 shares in a second closing, contingent on a regulatory milestone by October 31, 2026.
• All warrants and future share acquisitions are subject to a "Beneficial Ownership Blocker" preventing ownership from exceeding 9.99% of outstanding common stock.
• The Reporting Persons expressly disclaim status as a "group" for Schedule 13G purposes.
• The securities were not acquired for the purpose of changing or influencing control of the issuer, nor in connection with any transaction having that purpose or effect, other than activities solely in connection with a nomination under Rule 14a-11.

Sentiment

Score: 7

Explanation: The disclosure of a significant stake by a reputable venture capital firm like 5AM Ventures, coupled with a contingent future investment, generally signals positive investor confidence in the company's prospects, particularly its SZN-8141 development program. The beneficial ownership blocker is a standard protective clause and does not detract significantly from the positive signal.

Positives

• A significant investment by 5AM Ventures, a notable venture capital firm, indicates confidence in Surrozen, Inc.'s prospects.
• The investment includes a commitment for a second closing contingent on a regulatory milestone, suggesting potential future funding tied to development progress.

Negatives

• The "Beneficial Ownership Blocker" limits the immediate exercise of warrants and acquisition of future shares to maintain ownership below 9.99%, which could cap the investor's immediate upside from warrant exercise.

Risks

• The acquisition of the "2nd Closing Securities" is contingent on Surrozen, Inc. achieving a regulatory milestone for its SZN-8141 development program on or prior to October 31, 2026. Failure to meet this milestone could prevent the additional investment.
• The Issuer's SZN-8141 development program could be terminated prior to October 31, 2026, which would trigger a right (but not obligation) for Ventures VII to purchase the 2nd Closing Securities, introducing uncertainty.
• The "Beneficial Ownership Blocker" limits the ability of 5AM Ventures to increase its stake beyond 9.99% through warrant exercise, potentially restricting its influence or further investment without additional agreements.

Future Outlook

The document indicates a future potential investment by 5AM Ventures VII, L.P. of an additional 465,000 shares and warrants for 232,500 shares, contingent upon Surrozen, Inc. achieving a regulatory milestone for its SZN-8141 development program by October 31, 2026. Ventures VII also has the right, but not the obligation, to purchase these securities earlier or if the SZN-8141 program is terminated.

Industry Context

This filing reflects a venture capital firm's strategic investment in a biotechnology company, a common occurrence in the life sciences sector where early-stage and development-stage companies often rely on private placements and venture funding to advance their pipelines. The contingent nature of the second closing, tied to a regulatory milestone, is typical for investments in drug development, linking further capital to clinical progress.

Stakeholder Impact

• Shareholders: The disclosure of a significant institutional investor taking a stake, and potentially increasing it, could be viewed positively, signaling validation of the company's strategy and potential for future growth. The private placement itself dilutes existing shareholders but brings in capital.

Next Steps

• Surrozen, Inc. needs to achieve a regulatory milestone for its SZN-8141 development program on or prior to October 31, 2026, to trigger the second closing of the Securities Purchase Agreement.
• 5AM Ventures VII, L.P. has the right, but not the obligation, to purchase the 2nd Closing Securities if the SZN-8141 development program is terminated prior to October 31, 2026, within 30 calendar days of a Termination Notice.
• 5AM Ventures VII, L.P. also has the right, but not the obligation, to purchase all (but not a portion) of the 2nd Closing Securities at any time prior to the earlier of October 31, 2026, or the date of a Termination Notice.

Key Dates

Keywords

Surrozen Inc., 5AM Ventures, Schedule 13G, Beneficial Ownership, Common Stock, Warrants, Private Placement, Biotechnology Investment, Venture Capital, SEC Filing, SZN-8141