SCHEDULE 13G: Venrock Funds Disclose 9.9% Passive Stake in Surrozen, Inc. Following Private Placement

Venrock Healthcare Capital Partners and affiliated entities have disclosed a 9.9% beneficial ownership stake in Surrozen, Inc. through a Schedule 13G filing, stemming from a recent private placement.

Summary

• The filing identifies Venrock Healthcare Capital Partners III, L.P., VHCP Co-Investment Holdings III, LLC, Venrock Healthcare Capital Partners EG, L.P., VHCP Management III, LLC, VHCP Management EG, LLC, Nimish Shah, and Bong Koh as the Reporting Persons.
• These Reporting Persons collectively beneficially own 872,546 shares of Surrozen, Inc. common stock.
• This aggregate ownership represents 9.9% of Surrozen, Inc.'s common stock outstanding, which was rounded down from 9.99% due to EDGAR filing system limitations.
• The beneficial ownership includes a combination of common stock, pre-funded warrants, and Series E warrants.
• The warrants contain 'Beneficial Ownership Blockers' that prevent their exercise if it would result in the Reporting Persons owning more than 9.99% of the common stock outstanding.
• The calculation of the percentage of class is based on 3,281,169 shares of common stock outstanding as of March 25, 2025, plus 5,213,415 shares issued in a private placement that closed on March 26, 2025.

Sentiment

Score: 7

Explanation: The filing indicates a significant, passive institutional investment from a reputable firm, which is generally a positive signal for the company. The investment structure with warrants also suggests potential future capital, albeit with current exercise limitations. It's a factual disclosure of a substantial stake, not inherently negative, and points to investor confidence.

Positives

• The disclosure of a significant 9.9% stake by Venrock, a reputable healthcare capital firm, signals institutional confidence in Surrozen, Inc.'s prospects.
• The investment includes warrants, which, if exercised in the future, could provide additional capital to Surrozen, Inc., subject to the beneficial ownership limitations.

Negatives

• The 'Beneficial Ownership Blockers' on the warrants limit the immediate exercise of these securities, capping Venrock's direct influence or potential for immediate further capital contribution from warrant exercise at 9.99%.

Risks

• The 'Beneficial Ownership Blockers' could restrict Venrock's ability to increase its stake beyond 9.99% without triggering additional regulatory filings (e.g., Schedule 13D) or requiring a waiver of these provisions.

Future Outlook

This document is a regulatory disclosure of a past event (change in beneficial ownership) and does not contain forward-looking statements or guidance from Surrozen, Inc. or the Reporting Persons regarding future company performance or strategic direction, beyond the ongoing obligation to comply with SEC filing requirements.

Management Comments

• "The undersigned acknowledges that the foregoing attorney-in-fact, in serving in such capacity at the request of undersigned, is not assuming, nor is Venrock assuming, any of the undersigneds responsibilities to comply with the Exchange Act, including without limitation Sections 13 and 16 of the Exchange Act." (From Power of Attorney)
• "By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect, other than activities solely in connection with a nomination under ?? 240.14a-11." (From Schedule 13G certification)

Industry Context

This filing indicates a significant investment by Venrock Healthcare Capital Partners, a specialized healthcare venture capital firm, into Surrozen, Inc., a biotechnology company. Such substantial institutional investments are common in the capital-intensive biotech sector, where funding is crucial for research and development. The backing from a reputable firm like Venrock can be perceived as a positive signal, validating Surrozen's potential within the competitive healthcare industry.

Comparison to Industry Standards

• A 9.9% passive stake is a substantial minority position for an institutional investor in a publicly traded company, consistent with significant investments observed in the biotechnology and life sciences sectors.
• The inclusion of warrants with beneficial ownership blockers is a common strategy for investors to gain exposure and potential upside while adhering to regulatory thresholds (e.g., staying below 10% ownership to avoid Section 16 insider reporting requirements).
• Venrock Healthcare Capital Partners' investment aligns with its established strategy of investing in innovative life sciences companies, reinforcing its role as a key player in healthcare venture capital.

Stakeholder Impact

• Shareholders: The entry of a significant institutional investor like Venrock could enhance investor confidence and potentially improve market liquidity. However, the private placement that led to this ownership diluted existing shareholders.
• Company (Surrozen, Inc.): Benefits from the capital raised through the private placement, which supports its operations and strategic initiatives, and gains the backing of a prominent healthcare investor.

Next Steps

• The Reporting Persons are obligated to continue complying with SEC filing requirements under the Securities Exchange Act of 1934, including Sections 13 and 16, as long as their beneficial ownership necessitates such disclosures.
• The Powers of Attorney granted by Bong Koh and Nimish Shah will remain in full force and effect until the earliest of: no longer being required to file, revocation by the undersigned, or the attorney-in-fact no longer being employed by VR Management, LLC.

Key Dates

Keywords

Surrozen Inc., Venrock Healthcare Capital Partners, Schedule 13G, Beneficial Ownership, Common Stock, Warrants, Private Placement, Institutional Investment, Biotechnology, Healthcare