Surrozen, Inc./DE

Previous wording

Since our inception in 2015, we have devoted substantially all of our efforts and financial resources to organizing and staffing our company, business planning, raising capital, developing and optimizing our Wnt therapeutics platform, identifying potential product candidates, undertaking research and development activities, engaging in strategic transactions, establishing and enhancing our intellectual property portfolio, and providing general and administrative support for these operations. We have incurred operating losses since inception. During the three and six months ended June 30, 2025, we had net income of $39.7 million and $12.8 million, respectively, including noncash gains of $47.6 million and $104.6 million, respectively, on changes in fair value of tranche liability and warrant liabilities during the period. During the three and six months ended June 30, 2024, we incurred net losses of $25.3 million and $34.1 million, respectively. As of June 30, 2025, we had an accumulated deficit of $272.5 million, and cash and cash equivalents of $90.4 million.

Current wording

Since our inception in 2015, we have devoted substantially all of our efforts and financial resources to organizing and staffing our company, business planning, raising capital, developing and optimizing our Wnt therapeutics platform, identifying potential product candidates, undertaking research and development activities, engaging in strategic transactions, establishing and enhancing our intellectual property portfolio, and providing general and administrative support for these operations. We have incurred operating losses since inception. During the three and nine months ended September 30, 2025, we had net loss of $71.6 million and $58.9 million, respectively. During the three and nine months ended September 30, 2024, we incurred net losses of $1.4 million and $35.5 million, respectively. As of September 30, 2025, we had an accumulated deficit of $344.1 million, and cash and cash equivalents of $81.3 million.

Previous wording

During the six months ended June 30, 2025, there were no material changes to our critical accounting policies or in the methodology used for estimates from those described under Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

During the nine months ended September 30, 2025, there were no material changes to our critical accounting policies or in the methodology used for estimates from those described under Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

The increase of $1.0 million in research service revenue – related party for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, is attributable to the research service performed in 2025 under our Research Collaboration Agreement with TCGFB, Inc.

Current wording

The increase of $1.0 million in research service revenue – related party for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, is attributable to the research service performed in 2025 under our Research Collaboration Agreement with TCGFB, Inc. In October 2025, we received a notice from TCGFB that TCGFB has elected to terminate the Research Collaboration Agreement. The termination will be effective as of November 13, 2025.

Previous wording

The increase of $0.7 million, or 13%, in research and development expenses for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, is primarily due to a $1.4 million increase in manufacturing costs, lab expenses and consulting fees for our ophthalmology programs, offset by a $0.6 million decrease in clinical expenses as a result of the discontinuation of clinical development of SZN-043.

Current wording

The increase of $2.6 million, or 50%, in research and development expenses for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, is primarily due to a $2.7 million increase in manufacturing costs, lab expenses and consulting fees for our ophthalmology programs and a $0.6 million increase in employee-related expenses, offset by a $0.8 million decrease in clinical expenses as a result of the discontinuation of clinical development of SZN-043.

Previous wording

The increase of $0.2 million, or 7%, in general and administrative expenses for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, is primarily due to an increase in professional service fees.

Current wording

The increase of $0.5 million, or 15%, in general and administrative expenses for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, is primarily due to an increase in professional service fees.

Previous wording

The increase of $0.5 million, or 109%, in interest income for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, is primarily due to an increase in cash and cash equivalents as a result of a private placement closed in March 2025, or the 2025 PIPE.

Current wording

The increase of $0.5 million, or 111%, in interest income for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, is primarily due to an increase in cash and cash equivalents.

Previous wording

The gain on change in fair value of tranche liability for the three months ended June 30, 2025 was attributable to the noncash change in fair value of tranche liability during the period.

Current wording

The loss on change in fair value of tranche liability for the three months ended September 30, 2025 was attributable to the noncash change in fair value of tranche liability during the period.

Previous wording

The increase of $12.5 million in other income, net for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, is primarily attributable to a $11.0 million noncash change in fair value of warrant liabilities and $1.5 million related to the transaction costs of the 2024 PIPE.

Current wording

The increase of $17.8 million in other expense, net for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, is primarily attributable to the noncash change in fair value of warrant liabilities.

Previous wording

The increase of $2.0 million in research service revenue – related party for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, is attributable to the research service performed in 2025 under our Research Collaboration Agreement with TCGFB, Inc.

Current wording

The increase of $2.9 million in research service revenue – related party for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, is attributable to the research service performed in 2025 under our Research Collaboration Agreement with TCGFB, Inc. In October 2025, we received a notice from TCGFB that TCGFB has elected to terminate the Research Collaboration Agreement. The termination will be effective as of November 13, 2025.

Previous wording

The increase of $2.0 million, or 19%, in research and development expenses for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, is primarily due to a $1.6 million increase in manufacturing costs and consulting fees for our ophthalmology programs, offset by a $0.3 million decrease in clinical expenses as a result of the discontinuation of clinical development of SZN-043.

Current wording

The increase of $4.6 million, or 29%, in research and development expenses for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, is primarily due to a $5.9 million increase in manufacturing costs and consulting fees for our ophthalmology programs and a $0.5 million increase in employee-related expenses, offset by a $1.8 million decrease in clinical expenses as a result of the discontinuation of clinical development of SZN-043.

Previous wording

The increase of $0.3 million, or 4%, in general and administrative expenses for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, is primarily due to an increase in professional service fees.

Current wording

The increase of $0.9 million, or 8%, in general and administrative expenses for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, is primarily due to an increase in professional service fees.

Previous wording

The increase of $0.4 million, or 51%, in interest income for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, is primarily due to an increase in cash and cash equivalents as a result of the closing of the 2025 PIPE.

Current wording

The increase of $1.9 million, or 71%, in interest income for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, is primarily due to an increase in cash and cash equivalents.

Previous wording

Loss on issuance of common stock, pre-funded warrants and warrants in the 2024 PIPE for the six months ended June 30, 2024 is a result of the fair value of warrants issued being greater than the proceeds received in the 2024 PIPE.

Current wording

Loss on issuance of common stock, pre-funded warrants and warrants in the 2024 PIPE for the nine months ended September 30, 2024 is a result of the fair value of warrants issued being greater than the proceeds received in the 2024 PIPE.

Previous wording

Loss on amendment and cancellation of warrants for the six months ended June 30, 2025 was due to the noncash change in the fair value of warrant liabilities resulting from the amendment of Series A and Series B common stock warrants and cancellation of Series C and Series D common stock warrants in connection with the 2025 PIPE.

Current wording

Loss on amendment and cancellation of warrants for the nine months ended September 30, 2025 was due to the noncash change in the fair value of warrant liabilities resulting from the amendment of Series A and Series B common stock warrants and cancellation of Series C and Series D common stock warrants in connection with the 2025 PIPE.

Previous wording

Loss on execution of the 2025 PIPE for the six months ended June 30, 2025 reflects the loss recognized upon the execution of the 2025 PIPE as the fair value of tranche liability recognized was greater than the committed proceeds from the first tranche.

Current wording

Loss on execution of the 2025 PIPE for the nine months ended September 30, 2025 reflects the loss recognized upon the execution of the 2025 PIPE as the fair value of tranche liability recognized was greater than the committed proceeds from the first tranche.

Previous wording

The gain on change in fair value of tranche liability for the six months ended June 30, 2025 was attributable to the noncash change in fair value of tranche liability during the period.

Current wording

The gain on change in fair value of tranche liability for the nine months ended September 30, 2025 was attributable to the noncash change in fair value of tranche liability during the period.

Previous wording

The gain on settlement of tranche liability for the six months ended June 30, 2025 was related to the issuance of common stock, pre-funded warrants and Series E common stock warrants in the first closing of the 2025 PIPE. The difference in the fair value of the tranche liability immediately prior to the settlement and the fair value of the issued units in excess of proceeds resulted in a gain of $1.1 million upon settlement.

Current wording

The gain on settlement of tranche liability for the nine months ended September 30, 2025 was related to the issuance of common stock, pre-funded warrants and Series E common stock warrants in the first closing of the 2025 PIPE. The difference in the fair value of the tranche liability immediately prior to the settlement and the fair value of the issued units in excess of proceeds resulted in a gain of $1.1 million upon settlement.

Previous wording

The increase of $50.6 million in other income, net for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, is primarily attributable to a $51.7 million noncash change in fair value of warrant liabilities, offset by a $1.2 million increase in the financing transaction costs. Due to the discontinuation of clinical development of SZN-043 in the first quarter of 2025, the fair value of the Series C and Series D common stock warrant liabilities became zero as these warrants would not be exercisable.

Current wording

The increase of $32.8 million in other income, net for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, is primarily attributable to a $33.9 million noncash change in fair value of warrant liabilities, offset by a $1.3 million increase in the financing transaction costs. Due to the discontinuation of clinical development of SZN-043 in the first quarter of 2025, the fair value of the Series C and Series D common stock warrant liabilities became zero as these warrants would not be exercisable.

Previous wording

As of June 30, 2025, we had cash and cash equivalents of $90.4 million and accumulated deficit of $272.5 million. We believe, based on our current operating plan, that our existing cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months from the filing date of this Quarterly Report. The Food and Drug Administration clearance of SZN-8141’s IND application would trigger funding of the $98.6 million private placement tranche (2025 PIPE), which is expected to fund operations through efficacy, safety and tolerability studies for SZN-8141 and SZN-8143. We expect that in the long-term we will need to raise additional capital through public or private equity offerings, debt financings or other capital sources, including government grants, potential collaborations with other companies or other strategic transactions until we are able to generate revenue on our own. Our ability to continue as a going concern in the long-term is dependent upon our ability to successfully secure sources of financing and ultimately achieve profitable operations. There can be no assurance that sufficient funds will be available to us at all or on attractive terms when needed from these sources. If we are unable to obtain additional funding from these or other sources when needed, we may be necessary to significantly reduce expenses through reductions in staff and delaying, scaling back operations, or stopping certain research and development programs.

Current wording

As of September 30, 2025, we had cash and cash equivalents of $81.3 million and accumulated deficit of $344.1 million. We believe, based on our current operating plan, that our existing cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months from the filing date of this Quarterly Report. The Food and Drug Administration clearance of SZN-8141’s IND application would trigger funding of the $98.6 million private placement tranche (2025 PIPE), which is expected to fund operations through efficacy, safety and tolerability studies for SZN-8141 and SZN-8143. We expect that in the long-term we will need to raise additional capital through public or private equity offerings, debt financings or other capital sources, including government grants, potential collaborations with other companies or other strategic transactions until we are able to generate revenue on our own. Our ability to continue as a going concern in the long-term is dependent upon our ability to successfully secure sources of financing and ultimately achieve profitable operations. There can be no assurance that sufficient funds will be available to us at all or on attractive terms when needed from these sources. If we are unable to obtain additional funding from these or other sources when needed, we may be necessary to significantly reduce expenses through reductions in staff and delaying, scaling back operations, or stopping certain research and development programs.

Previous wording

Cash used in operating activities of $15.4 million for the six months ended June 30, 2025 was primarily due to the use of funds in our operations, and the resulting a net income of $12.8 million, offset by a net change of $0.8 million in our net operating assets and liabilities and $27.4 million in noncash charges. Cash used in operating activities of $14.4 million for the six months ended June 30, 2024 was primarily due to the use of funds in our operations, the resulting net loss of $34.1 million and a net change of $0.9 million in our net operating assets and liabilities, offset by $20.6 million in noncash charges.

Current wording

Cash used in operating activities of $24.4 million for the nine months ended September 30, 2025 was primarily due to the use of funds in our operations, and the resulting net loss of $58.9 million and a net change of $1.2 million in our net operating assets and liabilities, offset by $35.7 million in noncash charges. Cash used in operating activities of $21.1 million for the nine months ended September 30, 2024 was primarily due to the use of funds in our operations, the resulting net loss of $35.5 million and a net change of $11.0 million in our net operating assets and liabilities, offset by $25.4 million in non-cash charges.

Previous wording

Cash used in investing activities for the six months ended June 30, 2025 and 2024 was related to the purchases of lab equipment.

Current wording

Cash used in investing activities for the nine months ended September 30, 2025 and 2024 was related to the purchases of lab equipment.

Previous wording

Cash provided by financing activities of $71.3 million for the six months ended June 30, 2025 was primarily the proceeds from the issuance and sale of common stock, pre-funded warrants and warrants in the 2025 PIPE. Cash provided by financing activities of $16.1 million for the six months ended June 30, 2024 was primarily related to the issuance and sale of common stock, pre-funded warrants and warrants to investors and certain members of management in the 2024 PIPE.

Current wording

Cash provided by financing activities of $71.3 million for the nine months ended September 30, 2025 was primarily the proceeds from the issuance and sale of common stock, pre-funded warrants and warrants in the 2025 PIPE. Cash provided by financing activities of $16.1 million for the nine months ended September 30, 2024 was primarily related to the issuance and sale of common stock, pre-funded warrants and warrants to investors and certain members of management in a private placement.

Previous wording

(i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board; and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation.

Current wording

In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an EGC, we intend to rely on such exemptions, we are not required to, among other things: (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board; and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation.