UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
| Preliminary Proxy Statement | ||
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
| Definitive Proxy Statement | ||
☐ | Definitive Additional Materials | ||
☐ | Soliciting Material under §240.14a-12 |
Surrozen, Inc. |
(Name of Registrant as Specified in Its Charter) |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
Payment of Filing Fee (Check the appropriate box):
☒ | No fee required. | ||
☐ | Fee paid previously with preliminary materials | ||
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
PRELIMINARY COPY—SUBJECT TO COMPLETION
April 23, 2024
Dear Fellow Stockholders:
On behalf of the Board of Directors, I cordially invite you to attend the 2023 special2024 annual meeting of stockholders (the “Special“Annual Meeting”) of Surrozen, Inc., which will be held on December , 2023,Wednesday, June 5, 2024, beginning at 10:00 a.m., Pacific Time. The SpecialAnnual Meeting will be a completely virtual meeting, which will be conducted via live webcast.
Attached to this letter are a Notice of SpecialAnnual Meeting of Stockholders and Proxy Statement, which describe the business to be conducted at the meeting.Annual Meeting.
Your vote is important to us. Please act as soon as possible to vote your shares. It is important that your shares be represented at the meeting whether or not you plan to attend the SpecialAnnual Meeting via the Internet.internet. Please vote electronically over the Internet,internet, by telephone or by returning your signed proxy card in the envelope provided. You may also vote your shares online during the SpecialAnnual Meeting. Instructions on how to vote while participating at the meeting live via the Internetinternet are posted at www.virtualshareholdermeeting.com/SRZN2023SMSRZN2024.
On behalf of the Board of Directors and management, it is my pleasure to express our appreciation for your continued support.
| /s/ Craig Parker | ||
Craig Parker | |||
President, Chief Executive Officer and Director |
NOTICE OF SPECIALANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER , 2023JUNE 5, 2024
Notice is hereby given that the 2023 Special Meeting2024 annual meeting of Stockholdersstockholders (the “Annual Meeting”) of Surrozen, Inc., a Delaware corporation, will be held on December , 2023,Wednesday, June 5, 2024, at 10:00 a.m., Pacific Time. The SpecialAnnual Meeting will be a completely virtual meeting, which will be conducted via live webcast. You will be able to attend the SpecialAnnual Meeting online and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/SRZN2023SMSRZN2024. For instructions on how to attend and vote your shares at the SpecialAnnual Meeting, see the information in the accompanying proxy statementProxy Statement in the section titled “General Information about the SpecialAnnual Meeting and Voting – How can I attend and vote at the SpecialAnnual Meeting?”
The SpecialAnnual Meeting is being held:
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3. | to transact such other business as may properly |
These items of business are described in the proxy statementProxy Statement that follows this notice.Notice. Holders of record of our common stock as of the close of business on October 11, 2023April 10, 2024 are entitled to notice of and to vote at the SpecialAnnual Meeting, or any continuation, postponement or adjournment thereof.
Your vote is important. Voting your shares will ensure the presence of a quorum at the SpecialAnnual Meeting and will save us the expense of further solicitation. Please promptly vote your shares by completing, signing, dating and returning your proxy card or by Internetinternet or telephone voting as described on your proxy card.
By Order of the Board of Directors | |||
/s/ Charles Williams | |||
Charles Williams | |||
Chief Financial Officer, Chief Operating Officer and Corporate Secretary | |||
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South San Francisco, California
April 23, 2024
This Notice of SpecialAnnual Meeting and Proxy Statement are first being distributed or made available,
as the case may be, on or about October , 2023.April 23, 2024.
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting:
This Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 20222023 are available free of charge at www.proxyvote.com.
Surrozen, Inc. | 171 Oyster Point Blvd., Suite 400 | South San Francisco, California 94080
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 28 |
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Surrozen, Inc.
171 Oyster Point Blvd., Suite 400
South San Francisco, California 94080
PROXY STATEMENT
FOR THE SPECIALANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER , 2023JUNE 5, 2024
This proxy statementProxy Statement and our annual reportAnnual Report on Form 10-K for the year ended December 31, 20222023 (the “Annual Report”) are being furnished by and on behalf of our boardBoard of directorsDirectors (the “Board” or “Board of Directors”) in connection with our Special Meeting.2024 annual meeting of stockholders (the “Annual Meeting”). The Notice of SpecialAnnual Meeting of Stockholders and this proxy statementProxy Statement are first being distributed or made available, as the case may be, on or about October , 2023.April 23, 2024.
GENERAL INFORMATION ABOUT THE SPECIALANNUAL MEETING AND VOTING
Why did I receive a notice regarding the availability of proxy materials on the internet?
Pursuant to rules adopted by the Securities and Exchange Commission (the “SEC”), we have elected to provide access to our proxy materials over the internet. Accordingly, we have sent you a Notice of Internet Availability of Proxy Materials (the “Notice”) because the Board is soliciting your proxy to vote at the Annual Meeting, including at any adjournments or postponements of the meeting. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the internet or to request a printed copy may be found in the Notice.
We intend to first mail the Notice and make this proxy statement and the form of proxy available to stockholders on or about April 23, 2024.
When and where will the SpecialAnnual Meeting be held?
The SpecialAnnual Meeting will be held on December , 2023Wednesday, June 5, 2024 at 10:00 a.m., Pacific Time. The SpecialAnnual Meeting will be a completely virtual meeting, which will be conducted via live webcast. You will be able to attend the SpecialAnnual Meeting online and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/SRZN2023SMSRZN2024 and entering your 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials. To attend and participate in the Annual Meeting, you will need the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials. If your shares are held in “street name,” you should contact your bank or broker to obtain your 16-digit control number or otherwise vote through the bank or broker. If you lose your 16-digit control number, you may join the SpecialAnnual Meeting as a “Guest” but you will not be able to vote, ask questions or access the list of stockholders as of the close of business on October 11, 2023April 10, 2024 (the “Record Date”). We encourage you to access the meeting prior to the start time. Online check-in will begin at 9:10:45 a.m., Pacific Time, and you should allow ample time for the check-in procedures.
What isare the purposepurposes of the SpecialAnnual Meeting?
The purpose of the SpecialAnnual Meeting is to vote on the following itemitems described in this proxy statement:Proxy Statement:
Proposal No. 1: ApprovalElection of an amendment tothe three director nominees listed in this Proxy Statement.
Proposal No. 2: Ratification of the appointment of Ernst & Young as our certificate of incorporation to effect a reverse stock split of our issued and outstanding common stock.
Are there any matters to be voted on at the SpecialAnnual Meeting that are not included in this proxy statement?Proxy Statement?
At the date this proxy statementProxy Statement went to press, we did not know of any matters to be properly presented at the SpecialAnnual Meeting other than those referred to in this proxy statement.Proxy Statement. If other matters are properly presented at the meetingAnnual Meeting or any adjournment or postponement thereof for consideration, and you are a stockholder of record and have submitted a proxy card, the persons named in your proxy card will have the discretion to vote on those matters for you.
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What does it mean if I receive more than one set of proxy materials?
It means that your shares are held in more than one account at the transfer agent and/or with banks or brokers. Please vote all of your shares. To ensure that all of your shares are voted, for each set of proxy materials, please submit your proxy by phone, via the Internet,internet, or by signing, dating and returning the enclosed proxy card in the enclosed envelope.
Who is entitled to vote at the SpecialAnnual Meeting?
Holders of record of shares of our common stock as of the close of business on the Record Date will be entitled to notice of and to vote at the SpecialAnnual Meeting and any continuation, postponement or adjournment thereof.
At the close of business on the Record Date, there were 30,575,0473,198,786 shares of our common stock issued and outstanding and entitled to vote. Each share of our common stock is entitled to one vote on any matter presented to stockholders
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at the SpecialAnnual Meeting. You will need to obtain your own Internetinternet access if you choose to attend the SpecialAnnual Meeting online and/or vote over the Internet.internet.
What is the difference between being a “record holder” and holding shares in “street name”?
A record holder (also called a “registered holder”) holds shares in his or her name. Shares held in “street name” means that shares are held in the name of a bank, broker or other nominee on the holder’s behalf.
What do I do if my shares are held in “street name”?
If your shares are held in a brokerage account or by a bank or other holder of record, you are considered the “beneficial owner” of shares held in “street name.” The proxy materials have been forwarded to you by your broker, bank or other nominee who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your broker, bank or other holder of record on how to vote your shares by following their instructions for voting. Please refer to information from your bank, broker or other nominee on how to submit your voting instructions.
How many shares must be present to hold the SpecialAnnual Meeting?
A quorum must be present at the SpecialAnnual Meeting for any business to be conducted. The holders of at least one-third (1/3) in voting power of the company’sour capital stock issued and outstanding and entitled to vote, present electronically or represented by proxy constitutes a quorum. If you sign and return your paper proxy card or authorize a proxy to vote electronically or telephonically, your shares will be counted to determine whether we have a quorum even if you abstain or fail to vote as indicated in the proxy materials.
Broker non-votes will also be considered present for the purpose of determining whether there is a quorum for the SpecialAnnual Meeting.
What are “broker non-votes”?
A “broker non-vote” occurs when shares held by a broker in “street name” for a beneficial owner are not voted with respect to a proposal because (1) the broker has not received voting instructions from the stockholder who beneficially owns the shares and (2) the broker lacks the authority to vote the shares at their discretion. Proposal No. 1 is considered a non-discretionary matter, and a broker will lack the authority to vote uninstructed shares at their discretion on such proposal. Proposal No. 2 is considered a discretionary matter, and a broker will be permitted to exercise its discretion to vote uninstructed shares on this proposal.
What if a quorum is not present at the SpecialAnnual Meeting?
If a quorum is not present or represented at the scheduled time of the SpecialAnnual Meeting, (i) the chairpersonChair of the SpecialAnnual Meeting or (ii) a majority in voting power of the stockholders entitled to vote at the SpecialAnnual Meeting, who are present electronically or represented by proxy, may adjourn the SpecialAnnual Meeting until a quorum is present or represented.but no other business shall be transacted.
How do I vote my shares without attending the SpecialAnnual Meeting?
We recommend that stockholders vote by proxy even if they plan to attend the SpecialAnnual Meeting and vote electronically. If you are a stockholder of record, there are three ways to vote by proxy:
by Telephonetelephone – You can vote by telephone by calling 1-800-690-6903 and following the instructions on the proxy card;
by Internetinternet – You can vote over the Internetinternet at www.proxyvote.com by following the instructions on the proxy card; or
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by Mailmail – You can vote by mail by signing, dating and mailing the proxy card.
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Telephone and Internetinternet voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m., Eastern Time, on December , 2023.June 4, 2024.
If your shares are held in the name of a bank, broker or other holder of record, you will receive instructions on how to vote from the bank, broker or holder of record. You must follow the instructions of such bank, broker or holder of record in order for your shares to be voted.
How can I attend and vote at the SpecialAnnual Meeting?
We will be hosting the SpecialAnnual Meeting live via audio webcast. Any stockholder can attend the SpecialAnnual Meeting live online at www.virtualshareholdermeeting.com/SRZN2023SMSRZN2024. If you were a stockholder as of the Record Date, or you hold a valid proxy for the SpecialAnnual Meeting, you can vote at the SpecialAnnual Meeting. A summary of the information you need to attend the SpecialAnnual Meeting online is provided below:
Instructions on how to attend and participate via the Internet,internet, including how to demonstrate proof of stock ownership, are posted at www.virtualshareholdermeeting.com/SRZN2023SMSRZN2024.
Assistance with questions regarding how to attend and participate via the Internetinternet will be provided at www.virtualshareholdermeeting.com/SRZN2023SMSRZN2024 on the day of the SpecialAnnual Meeting.
Webcast starts at 10:00 a.m., Pacific Time.
You will need your 16-Digit Control Number to enter the SpecialAnnual Meeting.
Stockholders may submit questions while attending the Annual Meeting via the internet.
To attend and participate in the SpecialAnnual Meeting, you will need the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials. If your shares are held in “street name,” you should contact your bank or broker to obtain your 16-digit control number or otherwise vote through the bank or broker. If you lose your 16-digit control number, you may join the SpecialAnnual Meeting as a “Guest” but you will not be able to vote, ask questions or access the list of stockholders as of the Record Date.
What if during the check-in time or during the SpecialAnnual Meeting I have technical difficulties or trouble accessing the virtual meeting website?
We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting website. If you encounter any difficulties accessing the virtual meeting website during the check-in or meeting time, please call the technical support number that will be posted on the SpecialAnnual Meeting login page.
How does the Board recommend that I vote; what votes are required?vote?
The Board recommends that you vote:
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What vote is important. The Board urges you to vote your shares FOR the proposal.required for adoption or approval of each proposal and how will votes be counted?
Proposal Number | Proposal Description |
| for Approval | Voting Options | Effect of Abstentions or Withhold votes, as applicable | Effect of Broker Non-Votes |
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| Election of Directors named in this Proxy Statement | The three nominees receiving the most “FOR” votes of the shares present online or represented by proxy at the Annual Meeting will be elected. |
| No Effect | No Effect | FOR all nominees | ||||||
2 | Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2024 | “FOR” | FOR, AGAINST or ABSTAIN | Against | Not applicable |
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What if I do not specify how my shares are to be voted?
If you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote in accordance with the recommendations of the Board. The Board’s recommendations are set forth above, as well as with the description of each proposal in this proxy statement.Proxy Statement.
Who will count the votes?
Representatives of Broadridge Investor Communications Services (“Broadridge”) will tabulate the votes.
Can I revoke or change my vote after I submit my proxy?
Yes. Whether you have voted by Internet,internet, telephone or mail, if you are a stockholder of record, you may change your vote and revoke your proxy by:
sending a written statement to that effect to the attention of our Corporate Secretary at our corporate offices, provided such statement is received no later than December , 2023;June 4, 2024;
voting again by Internetinternet or telephone at a later time before the closing of those voting facilities at 11:59 p.m., Eastern Time, on December , 2023;June 4, 2024;
submitting a properly signed proxy card with a later date that is received no later than December , 2023;June 4, 2024; or
attending the SpecialAnnual Meeting, revoking your proxy and voting again.
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If you hold shares in street name, you may submit new voting instructions by contacting your bank, broker or other nominee. You may also change your vote or revoke your proxy online at the SpecialAnnual Meeting if you obtain a signed proxy from the record holder (broker, bank or other nominee) giving you the right to vote the shares.
Your most recent proxy card or telephone or Internetinternet proxy is the one that is counted. Your attendance at the SpecialAnnual Meeting by itself will not revoke your proxy unless you give written notice of revocation to the companyus before your proxy is voted or you vote online at the SpecialAnnual Meeting.
Who will pay for the cost of this proxy solicitation?
We will pay the cost of soliciting proxies. Proxies may be solicited on our behalf by directors, officers or employees (for no additional compensation) in person or by telephone, electronic transmission and facsimile transmission. Brokers and other nominees will be requested to solicit proxies or authorizations from beneficial owners and will be reimbursed for their reasonable expenses.
Why hold a virtual meeting?
We wish to continue using the latest technology to provide expanded access, improved communication and cost savings for us and our stockholders and the company while providing stockholders the same rights and opportunities to participate as they would have at an in-person meeting. Furthermore, we believe that a virtual meeting enables increased stockholder attendance and participation because stockholders can participate from any location around the world.
Will I be able to ask questions at the Annual Meeting?
4As part of the Annual Meeting, we will hold a live Q&A session, during which we intend to answer appropriate questions submitted during the meeting and that relate to the matters to be voted on. We intend to reserve up to ten minutes before the closing of the polls to address questions submitted. Only stockholders that have accessed the Annual Meeting as a stockholder (rather than a “Guest”) by following the procedures outlined above in “How can I attend and vote at the Annual Meeting?” will be able to submit questions during the Annual Meeting. Additionally, our Annual Meeting will follow “Rules of Conduct,” which will be available on our Annual Meeting webpage for stockholders that have accessed the Annual Meeting as a stockholder (rather than a “Guest”). Under these Rules of Conduct, a stockholder may ask up to two questions, and we will not address questions that are, among other things:
irrelevant to our business or to the business of the Annual Meeting;
related to the status or conduct of our clinical trials beyond that which is contained in our prior public disclosures;
related to our material non-public information;
related to personal grievances;
derogatory references to individuals or that are otherwise in bad taste;
substantially repetitious of statements already made by another stockholder;
in furtherance of the stockholder’s personal or business interests; or
out of order or not otherwise suitable for the conduct of the Annual Meeting as determined by the Chair of the Annual Meeting or the Corporate Secretary in their reasonable judgment.
Additional information regarding the Q&A session will be available in the “Rules of Conduct” available on the Annual Meeting webpage for stockholders that have accessed the Annual Meeting as a stockholder (rather than a “Guest”) by following the procedures outlined above in “How can I attend and vote at the Annual Meeting?”
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PROPOSAL NO. 1 ELECTION OF CONTENTSDIRECTORS
Board Size and Structure
Our certificate of incorporation, as currently in effect (“Certificate of Incorporation”) provides that the number of directors shall be fixed exclusively by resolutions adopted by a majority of the authorized number of directors. We currently have nine directors serving on our Board.
Our Certificate of Incorporation provides that our Board be divided into three classes, designated as Class I, Class II and Class III. Each class should consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board. Each class of directors must stand for re-election no later than the third annual meeting of stockholders subsequent to their initial appointment or election to our Board, provided that the term of each director will continue until the election and qualification of his or her successor and is subject to his or her earlier death, resignation or removal. Generally, vacancies or newly created directorships on our Board will be filled only by vote of a majority of the directors then in office and will not be filled by the stockholders, unless our Board determines by resolution that any such vacancy or newly created directorship will be filled by the stockholders. A director appointed by our Board to fill a vacancy will hold office until the next election of the class for which such director was chosen, subject to the election and qualification of his or her successor or his or her earlier death, resignation or removal.
Current Directors and Terms
Our current directors and their respective classes and terms are set forth below.
Class I Director – Current Term Ending at 2025 Annual Meeting | Class II Director – Current Term Ending at 2026 Annual Meeting | Class III Director – Current Term Ending at 2024 Annual Meeting | ||||
Anna Berkenblit, M.D. | Shao-Lee Lin, M.D., Ph.D. | Christopher Y. Chai | ||||
Tim Kutzkey, Ph.D. | Mace Rothenberg, M.D. | Mary Haak-Frendscho, Ph.D. | ||||
Eric Bjerkholt | David J. Woodhouse, Ph.D. | Craig Parker |
Nominees for Director
Mr. Chai, Dr. Haak-Frendscho, and Mr. Parker have been nominated by our Board to stand for election. As directors assigned to Class III, Mr. Chai's, Dr. Haak-Frendscho's, and Mr. Parker’s current terms of service will expire at the Annual Meeting. If elected by the stockholders at the Annual Meeting, Mr. Chai, Dr. Haak-Frendscho, and Mr. Parker will each serve for a term expiring at our annual meeting of stockholders to be held in 2027 or the election and qualification of their successors or until their earlier death, resignation or removal.
Each person nominated for election has agreed to serve if elected, and management has no reason to believe that any of the nominees will be unable to serve. If, however, prior to the Annual Meeting, our Board should learn that a nominee will be unable to serve for any reason, the proxies that otherwise would have been voted for such nominee will be voted for a substitute nominee as selected by our Board. Alternatively, the proxies, at our Board’s discretion, may be voted for no nominees as a result of the inability of a nominee to serve. Our Board has no reason to believe that any of the nominees will be unable to serve.
Information About Board Nominees and Continuing Directors
The following pages contain certain biographical information for each nominee for director and each director whose term as a director will continue after the Annual Meeting, including all positions he or she holds, his or her principal occupation and business experience for the past five years, and the names of other publicly held companies of which the director or nominee currently serves as a director or has served as a director during the past five years.
We believe that all of our directors and the nominees have or display: personal and professional integrity; satisfactory levels of education and/or business experience; broad-based business acumen; an appropriate level of understanding of our business and its industry and other industries relevant to our business; the ability and willingness to devote adequate time to the work of our Board and its committees, as applicable; skills and personality that complement those of our other directors that helps build a board that is effective, collegial and responsive to our needs; strategic thinking and a willingness to share ideas; a diversity of experiences, expertise and background; and the ability to represent the interests of all of our stockholders. The information presented below regarding the nominees and continuing
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directors also sets forth specific experience, qualifications, attributes and skills that led our Board to the conclusion that such individual should serve as a director in light of our business and structure.
Nominees for Election to Three-Year Terms Expiring at the 2027 Annual Meeting
Class III Directors | Age | Current Position at Surrozen | ||||
Christopher Y. Chai | 58 | Director | ||||
Mary Haak-Frendscho, Ph.D. | 67 | Director | ||||
Craig Parker | 62 | President, Chief Executive Officer and Director |
Christopher Y. Chai has served on our Board since April 2021 and Chair of our Board’s audit committee since August 2021. Mr. Chai has served as a venture partner at SR One Capital Management, LP since January 2021, where he works with portfolio companies on their engagement with Wall Street and their overall financing strategy and execution. Prior to joining SR One, Mr. Chai served as Chief Financial Officer of Principia Biopharma Inc. from 2013 to 2020, where he led the company from an early-stage private venture-backed company to its acquisition by Sanofi S.A. Mr. Chai previously served as Chief Financial Officer at MAP Pharmaceuticals, Inc. (acquired by Allergan, Inc.) and Vice President, Treasury and Investor Relations at CV Therapeutics, Inc. (acquired by Gilead Sciences, Inc.). Mr. Chai received his B.S. in operations research and industrial engineering from Cornell University. We believe that Mr. Chai’s extensive financial and executive experience provide him with the qualifications and skills to serve as a director of our company.
Mary Haak-Frendscho, Ph.D. has served on our Board since March 2021 and Chair of our Board’s compensation committee since August 2021. Dr. Haak-Frendscho has served as the President and Chief Executive Officer of Spotlight Therapeutics, Inc., a privately held biotechnology company, since January 2019. Prior to Spotlight, from January 2017 to January 2019, she was a venture partner with Versant Venture Management, LLC and, from January 2016 to January 2019, she served as the Chief Executive Officer of Blueline Bioscience, Versant’s vehicle for new company creation in Canada. Earlier, Dr. Haak-Frendscho established and served as the Chair of Compugen USA, Inc. from 2012 to 2016, was the Chief Executive Officer of Igenica Biotherapeutics, Inc. from 2012 to 2014, and was the Founding President and Chief Scientific Officer of Takeda San Francisco, Inc. from 2008 to 2012. She received her B.S. from the University of Michigan, M.L.A. from Washington University, M.S. from SUNY-Stony Brook, C.S.E.P. from Columbia University Graduate School of Business, and Ph.D. from the University of Wisconsin. We believe that Dr. Haak-Frendscho’s scientific training, work experience, and experience as a director of other biopharmaceutical companies provide her with the qualifications and skills to serve as a director of our company.
Craig Parker has served as our President and Chief Executive Officer since March 2018 and as a member of our Board since April 2018. From August 2014 to March 2018, Mr. Parker served as Senior Vice President of Corporate Development at Jazz Pharmaceuticals plc, a biopharmaceutical company. From 2012 to 2014, Mr. Parker served as Executive Vice President of Corporate Development and Scientific Affairs at Geron Corporation and from 2011 to 2012 as Senior Vice President of Strategy and Corporate Development at Human Genome Sciences Inc. (“HGS”) until its acquisition by GlaxoSmithKline plc. Prior to HGS, Mr. Parker worked in various positions at J.P. Morgan and other Wall Street financial institutions. Mr. Parker served on the board of directors of vTv Therapeutics Inc., a biopharmaceutical company, from July 2015 to February 2019. Mr. Parker is a member of the Scientific Advisory Board and chairs the Leadership Council of the Life Sciences Institute, University of Michigan and has been a member since 2005. Mr. Parker received a A.B. in biological sciences from the University of Chicago, an M.B.A. from the University of Michigan and attended the Georgetown University School of Medicine. We believe that Mr. Parker’s extensive scientific, business and leadership experience in both public and privately-held companies in the life sciences industry provide him with the qualifications and skills to serve on our Board and as our President and Chief Executive Officer.
Class I Directors Whose Terms Expire at the 2025 Annual Meeting of Stockholders
Class I Director | Age | Current Position at Surrozen | ||||
Tim Kutzkey, Ph.D. | 48 | Director | ||||
Anna Berkenblit, M.D. | 54 | Director | ||||
Eric Bjerkholt | 64 | Director |
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Tim Kutzkey, Ph.D. has served on our Board since April 2016, Chair of our Board since August 2021, Chair of our Board’s nominating and corporate governance committee since August 2021, and served as our interim Chief Executive Officer from inception to April 2018. Dr. Kutzkey serves as Managing Partner of The Column Group, LLC, a venture capital partnership, where he has served in various roles since 2007. Prior to The Column Group, Dr. Kutzkey served as a scientist at Kai Pharmaceuticals, Inc. Dr. Kutzkey also serves on the board of directors of Kallyope Inc., Nura Bio Inc., Neurona Therapeutics Inc., Synthekine Inc., Plexium, Inc., Cajal Neuroscience Inc. and Carmot Therapeutics Inc., all biotechnology companies. Dr. Kutzkey obtained a Ph.D. in molecular and cell biology from the University of California, Berkeley and completed his undergraduate degree in biological sciences from Stanford University. We believe that Dr. Kutzkey’s scientific training and experience as a director of other publicly traded and privately held biopharmaceutical companies provide him with the qualifications and skills to serve as a director of our company.
Anna Berkenblit, M.D. has served on our Board since August 2018, and on our Board’s compensation committee since August 2021. Dr. Berkenblit served as the Senior Vice President and Chief Medical Officer at ImunnoGen, Inc., a biotechnology company, from April 2015 to August 2023. Prior to ImmunoGen, Dr. Berkenblit served as Senior Vice President Head of Clinical Development at H3, Biomedicine Inc., a developer of targeted anti-cancer compounders, from 2013 to 2015. From 2011 to 2013, she served as Head of Clinical Research at AVEO Pharmaceuticals, Inc., a biopharmaceutical company, where she led the clinical development of oncology product candidates spanning early testing to registration trials. From January 2007 to September 2011, Dr. Berkenblit held various positions of increasing responsibility at Pfizer Inc., a biopharmaceutical company. Dr. Berkenblit is currently a member of the board of directors of Nested Therapeutics, Inc., a private biotechnology company. Dr. Berkenblit received an M.D. from Harvard Medical School and an M.M.S. degree in the Clinical Investigator Training Program of Harvard/MIT Health Sciences and Technology. We believe that Dr. Berkenblit’s extensive leadership and scientific experience, especially in the clinical development of biopharmaceuticals, provide her with the qualifications and skills to serve as a director of our company.
Eric Bjerkholt has served on our Board and on our Board’s audit committee since April 2023. Mr. Bjerkholt has served as the Chief Financial Officer of Mirum Pharmaceuticals, Inc., a publicly traded company, since September 2023. He most recently served as the Chief Financial Officer of Chinook Therapeutics, Inc. from November 2020 to September 2023. Prior to Chinook Therapeutics, Inc., he served as the Chief Financial Officer of Aimmune Therapeutics, Inc., from 2017 to 2020, overseeing the financial reporting, budgeting, internal controls, investor relations, business development, facilities and information technology functions and led the acquisition of Aimmune Therapeutics by Nestle Health Science US Holdings, Inc. for $2.6 billion. Prior to Aimmune Therapeutics, he spent 13 years at Sunesis Pharmaceuticals, Inc. from 2004 until 2017, where in addition to his role as Chief Financial Officer, Mr. Bjerkholt served in various capacities, including Executive Vice President of Corporate Development and Finance, Corporate Secretary and Chief Compliance Officer. Previously, Mr. Bjerkholt held senior executive finance roles at IntraBiotics Pharmaceuticals, Inc., LifeSpring Nutrition, Inc. and Age Wave, LLC and spent seven years in healthcare investment banking at J.P. Morgan & Company, Inc. He is currently a member of the board of directors and Chair of the audit committee of CalciMedica, Inc., a publicly traded biotechnology company, and a member of the board of directors of Cerus Corporation, a publicly traded biotechnology company. Mr. Bjerkholt holds an M.B.A. from Harvard Business School and a Cand.Oecon from the University of Oslo in Norway. We believe that Mr. Bjerkholt’s extensive business leadership experience across a broad range of roles provide him with the qualifications and skills to serve as a director of our company.
Class II Directors Whose Terms Expire at the 2026 Annual Meeting of Stockholders
Class II Directors | Age | Current Position at Surrozen | ||||
Shao-Lee Lin, M.D., Ph.D. | 57 | Director | ||||
Mace Rothenberg, M.D. | 67 | Director | ||||
David J. Woodhouse, Ph.D. | 54 | Chair of the Board |
Shao-Lee Lin, M.D., Ph.D. has served on our Board since January 2021. Dr. Lin co-founded and serves as the Chief Executive Officer of ACELYRIN, Inc. From January 2018 to January 2020, she served as Executive Vice President, Research and Development and Chief Scientific Officer at Horizon Pharma plc, a biopharmaceutical company. From April 2015 to December 2017, she served as a corporate officer and Vice President, Therapeutic Areas, Development Excellence and International Development at Abbvie Inc., a biopharmaceutical company. Prior to Abbvie, Dr. Lin served as Vice President, Inflammation and Respiratory Development at Gilead Sciences, Inc. from August 2012 to February 2015 and served in various roles of increasing responsibility at Amgen Inc. from April 2004 to August 2012. Dr. Lin served on the board of directors of Principia Biopharma Inc., a biopharmaceutical company, from April 2019 until it was acquired in September 2020. Dr. Lin has also been faculty as a Clinical Scholar at The Rockefeller University and adjunct faculty at the medical schools of Cornell University, The University of California, Los Angeles, Stanford University and Northwestern University. Dr. Lin received her B.S. in chemical engineering and biochemistry from Rice University and holds an M.D. and Ph.D. from The Johns Hopkins University School of Medicine. We believe that Dr. Lin’s scientific training, work experience, and
8
experience as a director of other publicly traded biopharmaceutical companies provide her with the qualifications and skills to serve as a director of our company.
Mace Rothenberg, M.D. has served on our Board since April 2021. Dr. Rothenberg served as Chief Medical Officer of Pfizer Inc., a biopharmaceutical company from January 2019 to January 2021, where he led Pfizer’s Worldwide Medical & Safety organization that is responsible for ensuring that patients, physicians, and regulatory agencies are provided with information on the safe and appropriate use of Pfizer medications. From January 2019 to March 2021, Dr. Rothenberg also served as a member of Pfizer’s Portfolio Strategy and Investment Committee, Worldwide Research, Development, and Medical Leadership Team, and Blueprint Leaders Forum. Prior to becoming Pfizer’s Chief Medical Officer, Dr. Rothenberg led Pfizer’s oncology clinical drug development efforts. During his ten years in this role, Dr. Rothenberg’s organization obtained FDA approval for eleven cancer medicines. He received his B.A. from the University of Pennsylvania and his M.D. from the New York University School of Medicine. Dr. Rothenberg received his post-graduate training in Internal Medicine at Vanderbilt University and in Medical Oncology at the National Cancer Institute. In addition, Dr. Rothenberg currently serves as a member of the board of directors for Tango Therapeutics and Aulos Bioscience, both biopharmaceutical companies. We believe that Dr. Rothenberg’s scientific training, work experience, and experience as a director of other biopharmaceutical companies provide him with the qualifications and skills to serve as a director of our company.
David J. Woodhouse, Ph.D. has served on our Board since September 2020 and has served as Chair of our Board since April 2023. Dr. Woodhouse has served as the Chief Executive Officer and director of NGM Biopharmaceuticals, Inc. (“NGM”) since September 2018. Dr. Woodhouse also served as Chief Financial Officer from March 2015 until September 2018 and acting Chief Financial Officer from September 2018 until June 2020 at NGM. From 2002 to 2015, he was an investment banker at Goldman Sachs & Co. LLC, most recently as a managing director in the healthcare investment banking group and co-head of biotechnology investment banking. Earlier in his career, Dr. Woodhouse worked at Dynavax Technologies Corporation and also as a research assistant at Amgen, Inc. Dr. Woodhouse received a B.A. in pharmacology from the University of California, Santa Barbara, an M.B.A. from the Tuck School of Business at Dartmouth and a Ph.D. in molecular pharmacology from Stanford University School of Medicine. We believe that Dr. Woodhouse’s extensive financial and executive experience provide him with the qualifications and skills to serve as a director of our company.
Board Recommendation
The Board unanimously recommends a vote FOR the election of each of Mr. Chai, Dr. Haak-Frendscho, and Mr. Parker as Class III directors to hold office until the 2027 Annual Meeting of Stockholders or until their successors are duly elected and qualified, or until their earlier death, resignation or removal.
9
PROPOSAL No. 1APPROVALNO. 2 RATIFICATION OF AN AMENDMENT TO THE CERTIFICATE APPOINTMENT
OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT OF OUR ISSUED AND OUTSTANDING COMMON STOCKINDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
DescriptionAppointment of Independent Registered Public Accounting Firm
Our audit committee appoints our independent registered public accounting firm. In this regard, our audit committee evaluates the qualifications, performance and independence of our independent registered public accounting firm and determines whether to re-engage our current firm. As part of its evaluation, our audit committee considers, among other factors, the quality and efficiency of the Proposed Reverse Stock Splitservices provided by the firm, including the performance, technical expertise, industry knowledge and experience of the lead audit partner and the audit team assigned to our account; the overall strength and reputation of the firm; the firm’s global capabilities relative to our business; and the firm’s knowledge of our operations. Ernst & Young LLP has served as our independent registered public accounting firm since 2020. Neither the accounting firm nor any of its members has any direct or indirect financial interest in or any connection with us in any capacity other than as our auditors and providing audit and permissible non-audit related services. Upon consideration of these and other factors, our audit committee has appointed Ernst & Young LLP to serve as our independent registered public accounting firm for the year ending December 31, 2024.
Although ratification is not required by our amended and restated bylaws or otherwise, our Board is submitting the selection of Ernst & Young LLP to our stockholders for ratification because we value our stockholders’ views on our independent registered public accounting firm and it is a good corporate governance practice. If our stockholders do not ratify the selection, it will be considered as notice to our Board and audit committee to consider the selection of a different firm. Even if the selection is ratified, our audit committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in our best interests and the best interests of our stockholders.
We expect one or more representatives of Ernst & Young LLP to participate in the Annual Meeting and they will have an opportunity to make a statement if they so desire and be available to respond to appropriate questions from stockholders.
Audit, Audit-Related, Tax and All Other Fees
The following table sets forth the aggregate fees billed by Ernst & Young LLP, our independent registered public accounting firm, for professional services rendered with respect to the years ended December 31, 2023 and 2022 (in thousands).
|
| Year Ended December 31, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Audit Fees(1) |
| $ | 961 |
|
| $ | 960 |
|
Audit-Related Fees |
|
| — |
|
|
| — |
|
Tax Fees |
|
| — |
|
|
| — |
|
All Other Fees |
|
| — |
|
|
| — |
|
Total Fees |
| $ | 961 |
|
| $ | 960 |
|
___________________
All services performed and related fees billed by Ernst & Young LLP during 2023 and 2022 were pre-approved by our audit committee pursuant to the pre-approval policies and procedures discussed below.
Audit Committee Pre-Approval Policies and Procedures
Our audit committee must review and pre-approve all audit and non-audit services provided by Ernst & Young LLP, our independent registered public accounting firm, and has adopted a Pre-Approval Policy. In conducting reviews of audit and non-audit services, our audit committee will determine whether the provision of such services would impair the auditor’s independence. The term of any pre-approval is 12 months from the date of pre-approval, unless our audit committee specifically provides for a different period. Any proposed services exceeding pre-approved fee ranges or limits must be specifically pre-approved by our audit committee.
Requests or applications to provide services that require pre-approval by our audit committee must be accompanied by a statement of the independent auditors as to whether, in the auditor’s view, the request or application is consistent with the SEC’s and the Public
10
Company Accounting Oversight Board’s (“PCAOB”) rules on auditor independence. Each pre-approval request or application must also be accompanied by documentation regarding the specific services to be provided.
Board Recommendation
Our Board has approved, and is recommending that our stockholders approve,unanimously recommends a proposed amendment to our certificate of incorporation, to effect a reverse splitvote FOR the ratification of the issued and outstanding sharesappointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2024.
11
AUDIT COMMITTEE REPORT
The audit committee operates pursuant to a charter which is reviewed annually by the audit committee. Additionally, a brief description of the common stock at a ratioprimary responsibilities of between 1-for-10the audit committee is included in this Proxy Statement under the heading “Corporate Governance - Audit Committee”. Under the audit committee charter, management is responsible for the preparation, presentation and 1-for-30,integrity of the company’s financial statements, the appropriateness of accounting principles and financial reporting policies and for establishing and maintaining our internal control over financial reporting. The independent registered public accounting firm is responsible for auditing our financial statements and expressing an opinion as to their conformity with such ratioaccounting principles generally accepted in the United States.
In the performance of its oversight function, the audit committee reviewed and discussed with management and Ernst & Young LLP, as the company’s independent registered public accounting firm, the company’s audited financial statements for 2023. The audit committee also discussed with the company’s independent registered public accounting firm the matters required to be determined atdiscussed by the sole discretion of our Board (the “Reverse Stock Split”). The form of proposed amendment to our certificate of incorporation to effect the Reverse Stock Split is attached as Appendix A to this proxy statement. The textapplicable requirements of the proposed amendment is subject to revision to include such changes as may bePCAOB and the SEC. In addition, the audit committee received and reviewed the written disclosures and the letters from the company’s independent registered public accounting firm required by the Secretary of Stateapplicable requirements of the State of DelawarePCAOB, regarding such independent registered public accounting firm’s communications with the audit committee concerning independence, and as ourdiscussed with the company’s independent registered public accounting firm their independence from the company.
Based upon the review and discussions described in the preceding paragraph, the audit committee recommended to the Board deems necessary or advisable to effectthat the proposed amendment of the certificate of incorporation. If a certificate of amendment iscompany’s audited financial statements be included in its Annual Report filed with the Secretary of State of the State of Delaware, the certificate of amendment to the certificate of incorporation will effect the Reverse Stock Split by reducing the outstanding number of shares of the common stockSEC.
Submitted by the ratioAudit Committee
Christopher Y. Chai (Chair)
David J. Woodhouse, Ph.D.
Eric Bjerkholt
This report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be determinedincorporated by the Board, but will not increase the par valuereference in any of the common stock, and will not change the number of authorized shares of the common stock. If the Board does not implement an approved Reverse Stock Split prior to the one-year anniversary of this meeting, the Board will seek stockholder approval before implementing any Reverse Stock Split after that time.
By approving Proposal No. 1 and the Reverse Stock Split, stockholders will approve the amendment to our certificate of incorporation pursuant to which any whole number of outstanding shares, between and including ten and thirty, would be combined into one share of common stock and authorize our Board to file one certificate of amendment, as determined by our Board in the manner described herein. If approved, our Board may also elect not to effect any Reverse Stock Split and consequently not file any certificate of amendment to the certificate of incorporation.
Nasdaq Listing Compliance
Our common stock is listed on the Nasdaq Capital Marketfilings under the symbol “SRZN.” To maintain a listing on the Nasdaq Capital Market, we must satisfy various listing maintenance standards established by The Nasdaq Stock Market, LLC,Securities Act of 1933, as amended (“Securities Act”), or Nasdaq. If we are unable to meet the Nasdaq requirements, our common stock will be subject to delisting.
Among other things, we are required to comply with the continued listing requirements of the Nasdaq Capital Market, including that the common stock maintain an average minimum closing price of $1.00 per share on the Nasdaq Capital Market (the “Nasdaq Minimum Bid Requirement”). We do not currently satisfy this Nasdaq Minimum Bid Requirement. Assuming our stockholders approve this proposal, our Board will determine whether to effect a Reverse Stock Split in the range of between 1-for-10 and 1-for-30, inclusive, at the ratio determined by our Board to be most likely sufficient to allow us to meet and maintain the Nasdaq Minimum Bid Requirement.
Reasons for the Reverse Stock Split
On January 4, 2023, Nasdaq notified us that on January 3, 2023, the average closing price of our common stock had closed below the required $1.00 per share for the prior 30 consecutive trading days, and, accordingly, that we did not comply with the applicable Nasdaq Minimum Bid Requirement. We were provided 180 calendar days by Nasdaq to regain compliance with this requirement and needed to provide written notice of our intention to cure the deficiency, including by a reverse stock split if necessary.
On July 5, 2023, Nasdaq notified us of our eligibility to receive an additional 180 calendar day period to regain compliance with the Nasdaq Minimum Bid Requirement based on written notice of our intention to cure this deficiency by effecting a reverse stock split prior to January 2, 2024.
5
To regain compliance, the closing bid price of the common stock must be at least $1.00 per share for a minimum of ten consecutive business days prior to January 2, 2024. If it appears to Nasdaq staff that we are not able to cure the deficiency, or if we do not meet the other listing standards, Nasdaq could provide notice that our common stock will be subject to delisting.
Our Board has considered the potential harm to us of a delisting of the common stock and has determined that, if the common stock continues to trade below $1.00 per share, the consummation of the Reverse Stock Split is the best way to maintain liquidity by achieving compliance with the Nasdaq Minimum Bid Requirement. Our Board also believes that the current low per share market price of the common stock has a negative effect on the marketability of our existing shares. Our Board believes there are several reasons for this effect. First, certain institutional investors have internal policies preventing the purchase of low-priced stocks. Second, a variety of policies and practices of broker-dealers discourage individual brokers within those firms from dealing in low-priced stocks. Third, because the brokers’ commissions on low-priced stocks generally represent a higher percentage of the stock price than commissions on higher priced stocks, the current share price of the common stock can result in individual stockholders paying transaction costs (commissions, markups or markdowns) that are a higher percentage of their total share value than would be the case if the share price of the common stock were substantially higher. This factor is also believed to limit the willingness of some institutions to purchase the common stock. Our Board anticipates that a Reverse Stock Split will result in a higher bid price for our common stock, which may help to alleviate some of these problems.
If this Proposal No. 1 is approved by the holders of the common stock and our Board decides to implement the Reverse Stock Split, our Board will determine the ratio of the Reverse Stock Split, in the range of between 1-for-10 and 1-for-30, inclusive, as determined in the judgment of our Board to be most likely sufficient to allow us to achieve and maintain compliance with the minimum $1.00 per share requirement for listing on the Nasdaq Capital Market for the longest period of time while retaining a sufficient number of outstanding, tradeable shares to facilitate an adequate market.
We believe that maintaining listing on the Nasdaq Capital Market will provide us with a market for the common stock that is more accessible than if the common stock were traded on the OTC Bulletin Board or in the “pink sheets” maintained by the OTC Markets Group, Inc. Such alternative markets are generally considered to be less efficient than, and not as broad as, the Nasdaq Capital Market. Among other factors, trading on the Nasdaq Capital Market increases liquidity and may potentially minimize the spread between the “bid” and “asked” prices quoted by Market Makers (as defined in Nasdaq Rule 5005). Further, a Nasdaq Capital Market listing may enhance our access to capital, increase our flexibility in responding to anticipated capital requirements and facilitate the use of our common stock in any strategic or financing transactions that we may undertake. We believe that prospective investors will view an investment in us more favorably if our shares qualify for listing on the Nasdaq Capital Market as compared with the OTC markets.
Effects of the Reverse Stock Split
The Reverse Stock Split will be effected simultaneously for all issued and outstanding shares of common stock and the Reverse Stock Split ratio will be the same for all issued and outstanding shares of common stock. The Reverse Stock Split will affect all of our stockholders uniformly and will not affect any stockholder’s percentage ownership interests in Surrozen, except that stockholders who would have otherwise received fractional shares will receive cash in lieu of such fractional shares. After the Reverse Stock Split, each share of the common stock will have the same voting rights and rights to dividends and distributions and will be identical in all other respects to the common stock now authorized and common stock issued pursuant to the Reverse Stock Split will remain fully paid and non-assessable. The Reverse Stock Split is not intended as, and will not have the effect of, a “going private transaction” covered by Rule 13e-3 under the Securities Exchange Act of 1934, as amended. We will continue to be subjectamended (“Exchange Act”), whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended.
The following table sets forth the number of shares of the common stock that would be outstanding immediately after the Reverse Stock Split at various exchange ratios, based on the 30,575,047 shares of common stock outstanding as of October 11, 2023. The table does not account for fractional shares that will be paid in cash.extent specifically incorporated by reference therein.
612
|
| After Reverse Stock Split |
| |||||
Ratio of |
| Approximate Shares of |
|
| Authorized |
| ||
None |
|
| 30,575,047 |
|
|
| 500,000,000 |
|
1:10 |
|
| 3,057,504 |
|
|
| 500,000,000 |
|
1:11 |
|
| 2,779,549 |
|
|
| 500,000,000 |
|
1:12 |
|
| 2,547,920 |
|
|
| 500,000,000 |
|
1:13 |
|
| 2,351,926 |
|
|
| 500,000,000 |
|
1:14 |
|
| 2,183,931 |
|
|
| 500,000,000 |
|
1:15 |
|
| 2,038,336 |
|
|
| 500,000,000 |
|
1:16 |
|
| 1,910,940 |
|
|
| 500,000,000 |
|
1:17 |
|
| 1,798,532 |
|
|
| 500,000,000 |
|
1:18 |
|
| 1,698,613 |
|
|
| 500,000,000 |
|
1:19 |
|
| 1,609,213 |
|
|
| 500,000,000 |
|
1:20 |
|
| 1,528,752 |
|
|
| 500,000,000 |
|
1:21 |
|
| 1,455,954 |
|
|
| 500,000,000 |
|
1:22 |
|
| 1,389,774 |
|
|
| 500,000,000 |
|
1:23 |
|
| 1,329,349 |
|
|
| 500,000,000 |
|
1:24 |
|
| 1,273,960 |
|
|
| 500,000,000 |
|
1:25 |
|
| 1,223,001 |
|
|
| 500,000,000 |
|
1:26 |
|
| 1,175,963 |
|
|
| 500,000,000 |
|
1:27 |
|
| 1,132,409 |
|
|
| 500,000,000 |
|
1:28 |
|
| 1,091,965 |
|
|
| 500,000,000 |
|
1:29 |
|
| 1,054,311 |
|
|
| 500,000,000 |
|
1:30 |
|
| 1,019,168 |
|
|
| 500,000,000 |
|
EXECUTIVE OFFICERS
If a stockholder owns 10,000 sharesThe table below identifies and sets forth certain biographical and other information regarding our executive officers. There are no family relationships among any of common stock prior to the Reverse Stock Split, after the Reverse Stock Split that same stockholder would own:
our executive officers or directors.
|
| Age | Position | |||
|
| President, Chief Executive Officer and Director | ||||
|
| Chief Financial Officer, Chief Operating Officer and Corporate Secretary | ||||
|
| Executive Vice President of Research |
Craig Parker. Biographical information for Mr. Parker is included above with the director biographies under the section titled “Proposal No. 1 Election of Directors”.
Charles Williams has served as our Chief Financial Officer since November 2020, our Corporate Secretary since February 2023, and our Chief Operating Officer since February 2024. From 2013 to November 2020, he served as Head of Corporate Development at Jazz Pharmaceuticals plc. From 2008 to 2013, he served as Director of Corporate and Business Development at MAP Pharmaceuticals, Inc., which was acquired by Allergan, Inc. Prior to MAP, Mr. Williams held various roles related to business development, finance and strategic planning at CV Therapeutics, Inc., which was acquired by Gilead Sciences, Inc. Mr. Williams received a B.A. in economics from Cornell University.
Yang Li, Ph.D. has served as our Executive Vice President of Research since July 2023. He served as our Senior Vice President, Biology from January 2021 to June 2023, and Vice President, Biology from October 2017 to December 2020. He has over 25 years of experience in the biopharmaceutical industry with successes in advancing drug molecules from concept to clinic. Prior to Surrozen, Dr. Li was Scientific Director at Amgen Inc., where his teams helped advance multiple programs into the clinic in various disease indications. Dr. Li holds a Ph.D. degree in cell biology from Stanford University and dual B.S. degrees in chemistry and molecular and cell biology from Pennsylvania State University.
13
CORPORATE GOVERNANCE
Corporate Governance Guidelines
Our Board has adopted Corporate Governance Guidelines. A copy of these Corporate Governance Guidelines can be found in the “Governance” section of the “Investors & Media” page of our website located at www.surrozen.com.
Among the topics addressed in our Corporate Governance Guidelines are:
• | Board size, independence and qualifications | • | Stock ownership | ||||||
|
| • | Board access to senior management | ||||||
|
| • | Board access to independent advisors | ||||||
|
| • | Board self-evaluations | ||||||
|
| • | Board meetings | ||||||
|
| • | Meeting attendance by directors and non-directors | ||||||
|
| • | Meeting materials | ||||||
|
| • | Board committees, responsibilities and independence | ||||||
|
| • | Succession planning | ||||||
|
| • | Risk management |
Board Leadership Structure
Our Corporate Governance Guidelines provide our Board with flexibility to combine or separate the positions of Chair of the Board and Chief Executive Officer in accordance with its determination that having one or the other structure would be in our best interests and the best interests of our stockholders.
The positions of our Chair of the Board and our Chief Executive Officer are currently served by two separate persons. Dr. Woodhouse serves as Chair of the Board, and Mr. Parker serves as our Chief Executive Officer.
Our Board believes that our current leadership structure of Chief Executive Officer and Chair of the Board being held by two separate individuals is in our best interests and the best interests of our stockholders and strikes the appropriate balance between the Chief Executive Officer’s responsibility for the strategic direction, day-to day-leadership and performance of our company and the Chair of the Board’s responsibility to guide our overall strategic direction and provide oversight of our corporate governance and guidance to our Chief Executive Officer and to set the agenda for and preside over Board meetings. We recognize that different leadership structures may be appropriate for companies in different situations and believe that no one structure is suitable for all companies. Accordingly, our Board will continue to periodically review our leadership structure and make such changes in the future as it deems appropriate and in our best interests and the best interests of our stockholders.
Director Independence
Under our Corporate Governance Guidelines and the applicable Nasdaq listing standards, a director is not independent unless our Board affirmatively determines that he or she does not have a relationship with us that could compromise his or her ability to exercise independent judgement in carrying out his or her responsibilities as a director. In addition, the director must not be precluded from qualifying as independent under the per se bars set forth in the applicable Nasdaq listing standards.
Our Board has undertaken a review of its composition, the composition of its committees and the independence of our directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our Board has determined that no director, except for Craig Parker, has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of our directors, except for Mr. Parker, has qualified as “independent” as that term is defined under the applicable Nasdaq listing standards.
14
In making this determination, our Board considered the relationships that each non-employee director has with us and all other facts and circumstances our Board deemed relevant in determining their independence, including the director’s beneficial ownership of our common stock and the relationships of our non-employee directors with certain of our significant stockholders.
Board Committees
Our Board has three standing committees: an audit committee, a compensation committee, and a nominating and corporate governance committee, each of which has the composition and the responsibilities described below. In addition, from time to time, special committees may be established under the direction of our Board when necessary to address specific issues. Each of our audit committee, compensation committee, and nominating and corporate governance committee operates under a written charter.
Director | Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee | ||||||
|
| X | — | ||||||
|
| — | X | ||||||
|
| Chair | — | ||||||
|
| — | Chair | ||||||
|
| X | — | ||||||
|
| — | — | ||||||
|
| — | X | ||||||
|
| — | — | ||||||
|
| ||||||||
| — |
| — |
Audit Committee
7Our audit committee consists of the following members: Christopher Y. Chai, David J. Woodhouse, Ph.D. and Eric Bjerkholt. Our Board has determined that each member of our audit committee satisfies the independence requirements under the applicable Nasdaq listing standards and Rule 10A-3(b)(1) of the Exchange Act. The Chair of our audit committee is Christopher Y. Chai. Our Board has determined that each of Christopher Y. Chai, Eric Bjerkholt and David J. Woodhouse are each an “audit committee financial expert” within the meaning of SEC regulations. All members of our audit committee meet the requirements for financial literacy under the applicable Nasdaq listing standards. In arriving at these determinations, our Board has examined each audit committee member’s scope of experience and the nature of their employment.
Our audit committee is responsible for, among other things:
15
Compensation Committee
Our compensation committee consists of the following members: Mary Haak-Frendscho, Ph.D., Anna Berkenblit, M.D. and Shao-Lee Lin, M.D., Ph.D. The Chair of our compensation committee is Mary Haak-Frendscho, Ph.D. Our Board has determined that each member of our compensation committee satisfies the independence requirements under the applicable Nasdaq listing standards and is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act.
The primary purpose of our compensation committee is to discharge the responsibilities of our Board in overseeing our compensation policies, plans and programs and to review and determine the compensation to be paid to our executive officers, directors and other senior management, as appropriate.
Specific responsibilities of our compensation committee include:
Our compensation committee generally considers the Chief Executive Officer’s recommendations when making decisions regarding the compensation of non-employee directors and executive officers (other than the Chief Executive Officer). In addition, our compensation committee has created a subcommittee, the Equity Award Committee, and has appointed Craig Parker as the sole member of the subcommittee. The Equity Award Committee is responsible for reviewing and approving equity awards, subject to certain grant size and position level limitations. The Equity Award Committee may only grant awards to new hires and those who hold a position below the level of vice president. No individual grantee may receive awards from the Equity Award Committee covering more than 1,666 shares of our common stock per calendar year.
Pursuant to our compensation committee’s charter, our compensation committee has the authority to retain or obtain the advice of compensation consultants, legal counsel and other advisors to assist in carrying out its responsibilities. Before selecting any such consultant, counsel or advisor, our compensation committee reviews and considers the independence of such consultant, counsel or advisor in accordance with applicable Nasdaq listing standards. We must provide appropriate funding for the payment of reasonable compensation to any consultant, counsel or advisor retained by our compensation committee.
Compensation Consultants
Our compensation committee has the authority under its charter to retain outside consultants or advisors, as it deems necessary or advisable. In accordance with this authority, our compensation committee has engaged the services of AON as an outside compensation consultant.
As requested by our compensation committee, in 2023, AON’s services to our compensation committee included, assisting us in developing our peer group composition, analyzing benchmarking data with respect to our executives’ overall individual compensation and providing information regarding current trends and developments in executive compensation, equity-based awards, severance agreements and employee stock purchase programs based on our peer group.
All executive compensation services provided by AON during 2023 were conducted under the direction or authority of our compensation committee, and all work performed by AON was pre-approved by our compensation committee. Neither AON nor any of its affiliates
16
maintains any other direct or indirect business relationships with us or any of our subsidiaries. Our compensation committee evaluated whether any work provided by AON raised any conflict of interest for services performed during 2023 and determined that it did not.
Additionally, during 2023, AON did not provide any services to us other than services related to (i) executive and director compensation and (ii) broad-based plans that do not discriminate in scope, terms, or operation, in favor of our executive officers or directors, and that are available generally to all salaried employees.
Nominating and Corporate Governance Committee
Our nominating and corporate governance committee consists of the following members: Tim Kutzkey, Ph.D., Christopher Y. Chai and Mace Rothenberg, M.D. The Chair of our nominating and corporate governance committee is Tim Kutzkey, Ph.D. Our Board has determined that each member of our nominating and corporate governance committee satisfies the independence requirements under the applicable Nasdaq listing standards.
Specific responsibilities of our nominating and corporate governance committee include:
Board and Board Committee Meetings and Attendance
In 2023, our Board met eight times, our audit committee met four times, our compensation committee met five times, and our nominating and corporate governance committee met once. In 2023, each incumbent director attended at least 75% of the aggregate of (i) all meetings of our Board and (ii) all meetings of the committees on which the director served, during the period in which he or she served as a director or committee member.
Executive Sessions
Executive sessions, which are meetings of the non-management members of our Board, are regularly scheduled throughout the year. In addition, at least twice a year, the independent directors meet in a private session that excludes management and any non-independent directors. At each of these meetings, the non-management and independent directors in attendance, as applicable, determine which member will preside at such session.
Director Attendance at Annual Meeting of Stockholders
We do not have a formal policy regarding the attendance of our Board members at our annual meetings of stockholders, but we expect all directors to make every effort to attend any meeting of stockholders. Six of our current directors who served at the time of our 2023 annual meeting of stockholders attended that meeting.
Director Nominations Process
Our nominating and corporate governance committee is responsible for recommending candidates to serve on our Board and its committees. In considering whether to recommend any particular candidate to serve on our Board or its committees or for inclusion in our Board’s slate of recommended director nominees for election at the annual meeting of stockholders, our nominating and corporate governance committee considers the criteria set forth in our Corporate Governance Guidelines. Specifically, our nominating and corporate governance committee may take into account many factors, including: personal and professional integrity, ethics and values; experience in corporate management, such as serving as an officer or former officer of a publicly held company; strong finance experience; relevant social policy concerns; experience relevant to our industry; experience as a board member or executive officer of another publicly held company; relevant academic expertise or other proficiency in an area of our operations; diversity of expertise and experience in substantive matters pertaining to our business relative to other Board members; diversity of background and perspective, including, but not limited to, with respect to age, gender, race, place of residence and specialized experience; practical and mature business judgment, including, but not limited to, the ability to make independent analytical inquiries; and any other relevant qualifications, attributes or skills. In determining whether to recommend a director for re-election, our nominating and corporate
17
governance committee may also consider potential conflicts of interest with the candidates, other personal and professional pursuits, the director’s past attendance at meetings and participation in and contributions to the activities of our Board.
We consider diversity, such as gender, race, ethnicity and membership of underrepresented communities, among those meaningful factors in identifying and considering director nominees, but do not have a formal diversity policy. Our Board evaluates each individual in the context of our Board as a whole, with the objective of assembling a group that has the necessary tools to perform its oversight function effectively in light of our business and structure.
In identifying prospective director candidates, our nominating and corporate governance committee may seek referrals from other members of our Board, management, stockholders and other sources, including third party recommendations. Our nominating and corporate governance committee uses the same criteria for evaluating candidates regardless of the source of the referral or recommendation. When considering director candidates, our nominating and corporate governance committee seeks individuals with backgrounds and qualities that, when combined with those of our incumbent directors, provide a blend of skills and experience to further enhance our Board’s effectiveness. In connection with its annual recommendation of a slate of nominees, our nominating and corporate governance committee also may assess the contributions of those directors recommended for re-election in the context of our Board evaluation process and other perceived needs of our Board.
In determining to nominate each director nominee at this Annual Meeting, our nominating and corporate governance committee and Board evaluated each nominee in accordance with our standard review process for director candidates in connection with a director’s initial appointment and his or her nomination for election or re-election, as applicable, at the Annual Meeting.
When considering whether the directors and nominees have the experience, qualifications, attributes and skills, taken as a whole, to enable our Board to satisfy its oversight responsibilities effectively in light of our business and structure, our Board focused primarily on the information discussed in each of our Board member’s biographical information set forth above. We believe that our directors provide an appropriate mix of experience and skills relevant to the size and nature of our business. This process resulted in our Board’s nomination of the incumbent directors named in this Proxy Statement and proposed for election by you at the Annual Meeting.
Our nominating and corporate governance committee will consider director candidates recommended by stockholders, and such candidates will be considered and evaluated under the same criteria described above. Any recommendation submitted to us should be in writing and should include any supporting material the stockholder considers appropriate in support of that recommendation, but must include information that would be required under the rules of the SEC to be included in a proxy statement soliciting proxies for the election of such candidate and a written consent of the candidate to serve as one of our directors if elected and must otherwise comply with the requirements under our Bylaws for stockholders to recommend director nominees. Stockholders wishing to propose a candidate for consideration may do so by submitting the above information to the attention of our Corporate Secretary, Surrozen, Inc., 171 Oyster Point Blvd., Suite 400, South San Francisco, California 94080. All recommendations for director nominations received by our Corporate Secretary that satisfy our bylaw requirements relating to such director nominations will be presented to our nominating and corporate governance committee for its consideration. Stockholders also must satisfy the notification, timeliness, consent and information requirements set forth in our Bylaws. These timing requirements are also described under the caption “Stockholder Proposals and Director Nominations”.
We18
Board Diversity
Our Board believes that a diverse board is better able to effectively oversee our management and strategy, and position us to deliver long-term value for our stockholders. Our Board considers diversity, including gender and ethnic diversity, as adding to the overall mix of perspectives of our Board as a whole. With the assistance of our nominating and corporate governance committee, our Board regularly reviews trends in board composition, including trends relating to director diversity.
The table below reports self-identified gender and demographic statistics for our Board, as constituted as of the Record Date, in the format adopted by Nasdaq.
| Board Diversity Matrix as of April 10, 2024
| |||||||||
| Total Number of Directors |
|
| 9 | ||||||
|
|
| Female |
|
| Male |
| Non-Binary | Did Not Disclose Gender | |
| Part I: Gender Identity |
|
|
|
|
|
|
| |
|
| Directors |
|
| 3 |
|
| 6 |
| |
|
| Part II: Demographic Background |
|
|
|
|
|
|
| |
|
| African American or Black |
|
| 0 |
|
| 0 |
| 0 | 0 |
| Alaskan Native or American Indian |
|
| 0 |
|
| 0 |
| 0 | 0 |
| Asian |
|
| 1 |
|
| 1 |
| 0 | 0 |
| Hispanic or Latinx |
|
| 0 |
|
| 0 |
| 0 | 0 |
| Native Hawaiian or Pacific Islander |
|
| 0 |
|
| 0 |
| 0 | 0 |
| White |
|
| 2 |
|
| 5 |
| 0 | 0 |
| Two or More Races or Ethnicities |
|
| 0 |
|
| 0 |
| 0 | 0 |
| LGBTQ+ |
|
| 2 | ||||||
| Did Not Disclose Demographic Background |
|
| 0 |
Board Role in Risk Oversight
Our Board has overall responsibility for risk oversight, including, as part of regular Board and committee meetings, general oversight of executives’ management of risks relevant to us. A fundamental part of risk oversight is not only understanding the material risks a company faces and the steps management is taking to manage those risks, but also understanding what level of risk is appropriate for us. The involvement of our Board in reviewing our business strategy is an integral aspect of our Board’s assessment of management’s tolerance for risk and its determination of what constitutes an appropriate level of risk for us. While our full Board has overall responsibility for risk oversight, it is supported in this function by our audit committee, compensation committee and nominating and corporate governance committee. Each of the committees regularly reports to our Board.
Our audit committee assists our Board in fulfilling its risk oversight responsibilities by periodically reviewing our accounting, reporting and financial practices, including the integrity of our financial statements, the surveillance of administrative and financial controls, our compliance with legal and regulatory requirements and our enterprise risk management program (including, without limitation, cybersecurity and data protection). Through its regular meetings with management, including the finance, legal, internal audit, tax, compliance, and information technology functions, our audit committee reviews and discusses significant areas of our business and
19
summarizes for our Board areas of risk and the appropriate mitigating factors. Our compensation committee assists our Board by overseeing and evaluating risks related to our compensation structure and compensation programs, including the formulation, administration and regulatory compliance with respect to compensation matters, and coordinating, along with our Board’s Chair, succession planning discussions. Our nominating and corporate governance committee assists our Board by overseeing and evaluating programs and risks associated with Board organization, membership and structure, and corporate governance. In addition, our Board receives periodic detailed operating performance reviews from management.
Committee Charters and Corporate Governance Guidelines
Our Corporate Governance Guidelines, charters of our audit committee, compensation committee and nominating and corporate governance committee and other corporate governance information are currently authorized to issue up to 500,000,000 shares of common stockavailable under the certificateCorporate Governance section of incorporation.the Investors page of our website located at www.surrozen.com.
Code of Business Conduct and Ethics
We have adopted a code of business conduct and ethics (the “Code of Conduct”) that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer or controller, or persons performing similar functions. Our Code of Conduct is available under the Corporate Governance section of the Investors page of our website at www.surrozen.com. In addition, we intend to post on our website all disclosures that are required by law or the applicable Nasdaq listing standards concerning any amendments to, or waivers of, any provisions of our Code of Conduct.
Anti-Hedging Policy
Our Board has adopted an Insider Trading Policy, which applies to all of our directors, officers and employees. The Reversepolicy prohibits our directors, officers and employees from engaging in short sales, transactions in put or call options, hedging transactions, margin accounts, pledges, or other inherently speculative transactions with respect to our stock at any time. All such transactions involving our equity securities, whether such securities were granted as compensation or are otherwise held, directly or indirectly, are prohibited.
Communications with our Board
Any stockholder or any other interested party who desires to communicate with our Board, our non-management directors or any specified individual director, may do so by directing such correspondence to the attention of our Corporate Secretary, Surrozen, Inc., 171 Oyster Point Blvd., Suite 400, South San Francisco, California 94080. Our Corporate Secretary will forward the communication to the appropriate director or directors as appropriate.
Limitations of Liability and Indemnification Matters
Our Certificate of Incorporation limits the liability of our current and former directors for monetary damages to the fullest extent permitted by Delaware law. Delaware law provides that directors of a corporation will not be personally liable for monetary damages for any breach of fiduciary duties as directors, except liability for:
Such limitation of liability does not apply to liabilities arising under federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission.
Our Certificate of Incorporation authorizes us to indemnify our directors, officers, employees and other agents to the fullest extent permitted by Delaware law. Our Bylaws provide that we are required to indemnify our directors and officers to the fullest extent permitted by Delaware law and may indemnify our other employees and agents. Our Bylaws also provide that, on satisfaction of certain conditions, we will advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of Delaware law. We have entered and expect to continue to enter into agreements to indemnify our directors and executive officers. With certain exceptions, these agreements provide for indemnification for related expenses including attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in connection with any action, proceeding or investigation. We believe that our Certificate
20
of Incorporation and Bylaws provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain customary directors’ and officers’ liability insurance.
The limitation of liability and indemnification provisions in our Certificate of Incorporation and Bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted for directors, executive officers or persons controlling us, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
21
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table shows for 2023 and 2022, compensation awarded to, earned by, or paid to our principal executive officer and two other most highly compensated executive officers serving as such at December 31, 2023. We have also included compensation information for Wen-Chen Yeh, M.D., Ph.D., who ceasedserving as our Chief Scientific Officer in July 2023 but would have been a named executive officer had he continued serving in such capacity as of the end of 2023. Dr. Yeh currently serves on our Scientific Advisor Board.
Name and Principal Position |
| Year |
| Salary |
|
| Option |
|
| Non-Equity |
|
| All Other |
|
| Total |
| |||||
Craig Parker |
| 2023 |
|
| 580,320 |
|
|
| 339,930 |
|
|
| 245,000 |
|
|
| — |
|
|
| 1,165,250 |
|
President and Chief |
| 2022 |
|
| 558,000 |
|
|
| 1,142,150 |
|
|
| 195,300 |
|
|
| — |
|
|
| 1,895,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Charles Williams |
| 2023 |
|
| 444,465 |
|
|
| 64,497 |
|
|
| 163,563 |
|
|
| 3,000 |
|
|
| 675,526 |
|
Chief Financial Officer, Chief Operating Officer and Corporate Secretary |
| 2022 |
|
| 423,300 |
|
|
| 340,726 |
|
|
| 139,689 |
|
|
| 500 |
|
|
| 904,215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Yang Li, Ph.D. |
| 2023 |
|
| 389,263 |
|
|
| 41,270 |
|
|
| 143,200 |
|
|
| 3,000 |
|
|
| 576,732 |
|
Executive Vice President, Research |
| 2022 |
|
| 360,500 |
|
|
| 191,557 |
|
|
| 110,403 |
|
|
| 500 |
|
|
| 662,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Wen-Chen Yeh, M.D., Ph.D. |
| 2023 |
|
| 262,395 |
|
|
| 64,490 |
|
|
| — |
|
|
| 389,409 |
|
|
| 716,294 |
|
Former Chief Scientific Officer |
| 2022 |
|
| 428,400 |
|
|
| 292,937 |
|
|
| 145,656 |
|
|
| 500 |
|
|
| 867,493 |
|
___________
Narrative Disclosure to Summary Compensation Table
Employment Arrangements
We have entered into employment agreements or offer letters with each of our named executive officers setting forth the terms and conditions of such executive’s employment with us. The employment agreements or offer letters generally will provide for at-will employment and set forth the executive officer’s initial base salary. Each of our named executive officers has executed our standard confidential information and invention assignment agreement.
Our compensation committee has also adopted severance terms whereby executive officers shall receive certain benefits if their employment is terminated without cause or in connection with a change-in-control of the company. If terminated not-for-cause, the named executive officers will receive nine months base salary (12 months for Mr. Parker) and nine months of continued benefits (12 months for Mr. Parker) but no acceleration of equity vesting requirements. If terminated in connection with a change-in-control of the company, i.e., at any time within the 12-month period beginning three months prior to the change-in-control, the named executive officers will receive 12 months base salary (18 months for Mr. Parker), 100% of their target bonus (1.5 times the target bonus for Mr. Parker), 12 months continuation of benefits (18 months for Mr. Parker) and acceleration of all existing equity vesting requirements.
22
Separation Agreement
In July 2023, we entered into a separation agreement with Dr. Yeh pursuant to which Dr. Yeh will receive the following separation payments and benefits: (i) nine months of salary continuation payments, less all applicable taxes and withholdings; and (ii) payment, on Dr. Yeh’s behalf, of the premiums for group health and/or dental insurance coverage under COBRA until April 30, 2024, or the date on which Dr. Yeh becomes eligible to receive group health insurance coverage through another employer, or is otherwise ineligible for COBRA, in each case as reported in the column titled "All Other Compensation" and described in more detail in footnote 3 in the "Summary Compensation" Table. Dr. Yeh’s equity awards will continue to vest according to their terms; provided Dr. Yeh continues to serve on our Scientific Advisory Board.
Non-Equity Incentive Plan Compensation
In addition to base salaries, our named executive officers are eligible to receive annual performance-based cash bonuses under our Annual Cash Bonus Plan (the “Bonus Plan”). Our compensation committee established the Bonus Plan to incentivize our employees and reward them upon the achievement of corporate performance goals. With respect to the performance-based cash bonuses of the named executive officers for 2023 and 2022, the Bonus Plan targets the amount of the bonus at 50% of base salary for our Chief Executive Officer and 40% for our other executive officers.
Actual amounts paid under the Annual Cash Bonus Plan generally depend on the extent to which (i) we achieve our corporate performance goals, and (ii) the employee achieves his or her individual goals that were established at the beginning of the year. After the end of each year, our Board determines the level or percentage at which we have achieved our corporate goals for the past year and sets the corporate performance goals for the next year. Corporate performance goals include stretch goals that reflect our desired progress and outcomes relating to the development of our product candidates and adherence to established budgets.
When determining the actual payout amount of our Chief Executive Officer's performance-based cash bonus for 2023 and 2022, our compensation committee weighted 100% of its decision on the extent to which we achieved our corporate performance goals. When determining the actual payout amount of the performance-based cash bonus for our other executives, our compensation committee weighted 50% of its decision on our attainment of corporate performance goals and 50% on the attainment of individual performance goals.
For 2023, our Board determined that we had achieved 84% of our corporate performance goals, so Mr. Parker received 84% of his targeted bonus. Mr. Williams received 92% of his targeted bonus amount, based on the 84% achievement of our 2023 corporate performance goals and 100% achievement of his personal goals. Dr. Li received 89.5% of his targeted bonus amount, based on the 84% achievement of our 2023 corporate performance goals and 95% achievement of his personal goals.
For 2022, our Board determined that we had achieved 70% of our corporate performance goals, so Mr. Parker received 70% of his targeted bonus. Mr. Williams, Dr. Li and Dr. Yeh received 82.5%, 85% and 85% of their targeted bonus amounts, respectively, based on the 70% achievement of our 2022 corporate performance goals and 95%, 100% and 100% achievement of their personal goals, respectively.
All performance-based cash bonuses are generally paid within a few months after the year to which they relate, upon final determination by our compensation committee. The performance-based cash bonuses paid to our named executive officers for 2023 and 2022, as determined by our compensation committee based on the guidelines above, are set forth above in the “Summary Compensation Table” in the column titled “Non-Equity Incentive Plan Compensation”.
23
Outstanding Equity Awards as of December 31, 2023
The following table presents the outstanding equity incentive plan awards held by each named executive officer as of December 31, 2023.
|
|
|
|
|
| Option Awards(1) | |||||||||||||
Name |
| Grant Date |
| Vesting |
| Number of |
|
|
| Number of |
|
| Option |
|
| Option | |||
Craig Parker |
| 04/11/2018 |
| 03/19/2018 |
|
| 21,077 |
| (2) |
|
| — |
|
|
| 10.35 |
|
| 04/10/2028 |
|
| 02/07/2019 |
| 01/01/2019 |
|
| 2,341 |
| (3) |
|
| — |
|
|
| 18.90 |
|
| 02/06/2029 |
|
| 03/01/2022 |
| 01/01/2022 |
|
| 11,818 |
| (3) |
|
| 12,848 |
|
|
| 46.65 |
|
| 03/01/2032 |
|
| 10/10/2022 |
| 01/01/2021 |
|
| 17,074 |
| (3) |
|
| 6,344 |
|
|
| 32.40 |
|
| 02/22/2031 |
|
| 10/10/2022 |
| 08/12/2021 |
|
| 7,129 |
| (2) |
|
| 5,092 |
|
|
| 32.40 |
|
| 08/12/2031 |
|
| 03/01/2023 |
| 01/01/2023 |
|
| 6,187 |
| (3) |
|
| 20,813 |
|
|
| 16.95 |
|
| 03/01/2033 |
Charles Williams |
| 03/01/2022 |
| 01/01/2022 |
|
| 3,993 |
| (3) |
|
| 4,340 |
|
|
| 46.65 |
|
| 03/01/2032 |
|
| 10/10/2022 |
| 11/30/2020 |
|
| 9,025 |
| (2) |
|
| 2,684 |
|
|
| 32.40 |
|
| 12/13/2030 |
|
| 10/10/2022 |
| 08/12/2021 |
|
| 566 |
| (2) |
|
| 405 |
|
|
| 32.40 |
|
| 08/12/2031 |
|
| 02/01/2023 |
| 01/01/2023 |
|
| 1,909 |
| (3) |
|
| 6,424 |
|
|
| 10.51 |
|
| 02/01/2033 |
Yang Li, Ph.D. |
| 03/01/2022 |
| 01/01/2022 |
|
| 3,194 |
| (3) |
|
| 3,472 |
|
|
| 46.65 |
|
| 03/01/2032 |
|
| 10/03/2022 |
| 09/12/2022 |
|
| 10 |
| (3) |
|
| 23 |
|
|
| 30.45 |
|
| 10/03/2032 |
|
| 10/10/2022 |
| 01/01/2021 |
|
| 1,109 |
| (3) |
|
| 412 |
|
|
| 32.40 |
|
| 02/22/2031 |
|
| 02/01/2023 |
| 01/01/2023 |
|
| 1,222 |
| (3) |
|
| 4,110 |
|
|
| 10.51 |
|
| 02/01/2033 |
Wen-Chen Yeh, M.D., Ph.D. |
| 02/07/2019 |
| 01/01/2019 |
|
| 585 |
| (3) |
|
| — |
|
|
| 18.90 |
|
| 12/31/2028 |
|
| 02/13/2020 |
| 01/01/2020 |
|
| 2,293 |
| (3) |
|
| 48 |
|
|
| 44.55 |
|
| 02/12/2030 |
|
| 03/01/2022 |
| 01/01/2022 |
|
| 3,992 |
| (3) |
|
| 4,341 |
|
|
| 46.65 |
|
| 03/01/2032 |
|
| 07/01/2022 |
| 06/21/2022 |
|
| 12 |
| (3) |
|
| 20 |
|
|
| 47.25 |
|
| 07/01/2032 |
|
| 10/10/2022 |
| 01/01/2021 |
|
| 1,705 |
| (3) |
|
| 635 |
|
|
| 32.40 |
|
| 02/22/2031 |
|
| 02/01/2023 |
| 01/01/2023 |
|
| 1,909 |
| (3) |
|
| 6,423 |
|
|
| 10.51 |
|
| 02/01/2033 |
___________
Other Compensation and Benefits
Our named executive officers are eligible to participate in our employee benefit plans, including our 401(k) plan, medical, dental, vision, life, disability and accidental death and dismemberment insurance plans, in each case on the same basis as generally all of our other full-time exempt employees.
Our named executive officers did not participate in, or earn any benefits under, any nonqualified deferred compensation plan sponsored by us during 2023 and 2022. Our Board may elect to provide our officers and other employees with nonqualified deferred compensation benefits in the future if it determines that doing so is in our best interests.
Stock Split,Plans
Prior to August 2021, grants of equity awards were provided to our named executive officers under our 2015 Plan. In August 2021, we adopted our 2021 Plan, which replaces and supersedes the number2015 Plan, except with respect to awards previously granted. The 2021 Plan authorizes us to grant equity and cash incentive awards to officers, directors, employees, and other eligible service providers. A description of shares our stock plans can be found in Note 12 “Stock-Based Compensation Plans”of common stock that arethe consolidated financial statements in our Annual Report.
24
Option Repricing
In October 2022, our compensation committee authorized and unissued will increase relative toapproved the number of issued and outstanding shares. We may use the additional authorized and unissued shares of common stock resulting from the Reverse Stock Split to issue additional shares of common stock from time to time in equity financings, under our equity compensation plans or in connection with other matters. The Board currently has no plans, arrangements or understandings regarding the issuance of such additional authorized and unissued shares of common stock.
As of the Record Date, there were no issued or outstanding shares of our preferred stock and no outstanding options or warrants to purchase shares of our preferred stock. The Reverse Stock Split will not impact the number of authorized or outstanding shares of our preferred stock.
Accounting Matters
The Reverse Stock Split will not affect the par value of the common stock. As a result, upon the effectiveness of the Reverse Stock Split, the stated capital on our balance sheet attributable to the common stock will be reduced proportionately based on the exchange ratio selected by our Board for the Reverse Stock Split, and the additional paid-in capital account will be credited with the amount by which the stated capital is reduced. The per share net income or loss and net book value of the common stock will be increased because there will be fewer shares of common stock outstanding. In addition, proportionate adjustments will be made to the per share exercise price and the number of shares issuable upon the exercise or settlementrepricing of all outstanding stock options restricted stock unitswith an exercise price of $75.00 per share and warrantsabove held by current employees, including our named executive officers. The exercise price was lowered to purchase or acquire, as applicable, shares of common stock, and the number of shares reserved for issuance pursuant to our existing equity incentive, stock option and employee stock purchase plans will be reduced proportionately based on the exchange ratio selected by the Board for the Reverse Stock Split.
No Fractional Shares
No fractional shares of common stock will be issued as a result of the Reverse Stock Split. Instead, stockholders who otherwise would be entitled to receive fractional shares will be entitled to receive cash in an amount equal to the product obtained by multiplying (i)$32.40 per share, the closing sales price of theour common stock as reported on the Nasdaq Capital Market on the date of such approval. The vesting terms and expiration dates of the new stock options remain unchanged from the original stock options. The incremental fair value under ASC 718 for our named executive officers was $348,356 for Mr. Parker, $72,552 for Mr. Williams, $23,633 for Dr. Chen, and $15,362 for Dr. Li, respectively.
Rule 10b5-1 Sales Plans
Our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell shares of common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or executive officer when entering into the plan, without further direction from them. The director or executive officer may amend a Rule 10b5-1 plan in some circumstances and may terminate a plan at any time. Our directors and executive officers also may buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material nonpublic information, subject to compliance with the terms of our Insider Trading Policy.
Incentive Compensation Recoupment Policy
We have adopted a Dodd-Frank Wall Street Reform and Consumer Protection Act-compliant compensation recoupment policy in accordance with SEC and Nasdaq requirements. Pursuant to this policy, in the event we are required to prepare an accounting restatement, we will recover any compensation received after the effective date by any current or former executive officer that is based wholly or in part upon the attainment of a financial reporting measure.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table summarizes certain information, as of December 31, 2023, relating to our equity compensation plans, which were approved by our stockholders. See Note 12 “Stock-Based Compensation Plans” of the certificateconsolidated financial statements in our Annual Report for a summary of amendmentour equity compensation plans.
Equity Compensation Plan Information |
|
| |||||||||||
Plan Category |
| Number of securities to be issued upon exercise of outstanding options, warrants and rights |
|
| Weighted-average exercise price of outstanding options, warrants and rights |
|
| Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
|
| |||
Equity compensation plans approved by security holders |
|
| 400,552 |
| (1) | $ | 27.70 |
|
|
| 234,271 |
| (2) |
Equity compensation plans not approved by security holders |
|
| — |
|
|
| — |
|
|
| — |
|
|
Total |
|
| 400,552 |
|
| $ | 27.70 |
|
|
| 234,271 |
|
|
___________
Certain Risks Associated with the Reverse Stock Split
Before voting on this Proposal No. 1, stockholders should consider the following risks associated with effecting a Reverse Stock Split:
8
25
DIRECTOR COMPENSATION
We previously provided cash and equity-based compensation to certain of our non-employee directors. In addition, all non-employee directors are entitled to reimbursement of direct expenses incurred in connection with attending meetings of our Board or committees thereof. Our Board has approved a policy providing for annual non-employee director compensation.
The following table sets forth information regarding the compensation earned by or paid to our non-employee directors during 2023. Craig Parker, our President and Chief Executive Officer, is also a member of our Board, but did not receive any additional compensation for service as a consequencedirector. The compensation earned by or paid to Mr. Parker as a named executive officer for 2023 is set forth above under the heading titled “Executive Compensation—Summary Compensation Table”.
Name |
| Fees Earned |
|
| Option |
|
| Total |
| |||
Anna Berkenblit, M.D. |
|
| 40,000 |
|
|
| 8,051 |
|
|
| 48,051 |
|
Eric Bjerkholt |
|
| 31,875 |
|
|
| 25,060 |
| (3) |
| 56,935 |
|
Christopher Y. Chai |
|
| 54,000 |
|
|
| 8,051 |
|
|
| 62,051 |
|
Mary Haak-Frendscho, Ph.D. |
|
| 45,000 |
|
|
| 8,051 |
|
|
| 53,051 |
|
Tim Kutzkey, Ph.D. |
|
| 52,375 |
|
|
| 8,051 |
|
|
| 60,426 |
|
Shao-Lee Lin, M.D., Ph.D. |
|
| 40,000 |
|
|
| 8,051 |
|
|
| 48,051 |
|
Mace Rothenberg, M.D. |
|
| 39,000 |
|
|
| 8,051 |
|
|
| 47,051 |
|
David J. Woodhouse, Ph.D. |
|
| 65,000 |
|
|
| 8,051 |
|
|
| 73,051 |
|
___________
Potential Anti-Takeover Effect of the Reverse Stock Split
Upon effectiveness of the Reverse Stock Split, the number of authorized shares of common stock that are not issued or outstanding$8.40 per share which will increase relative to the number of shares of common stock that are issued and outstanding prior to the Reverse Stock Split. While this increase could, under certain circumstances, have an anti-takeover effect (for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition of the Board or contemplating a tender offer or other transaction for the combination of Surrozen with another company), Proposal 1 is not being proposed in response to any effort of which we are aware to accumulate shares of the common stock or to obtain control of Surrozen.
Effective Date
If our stockholders approve the Reverse Stock Split, the Reverse Stock Split would become effective at such time as it is deemed by our Board to be in the best interests of Surrozen and our stockholders and we file the amendment to our certificate of incorporation. Even if the Reverse Stock Split is approved by our stockholders, our Board has discretion not to carry out or to delay in carrying out the Reverse Stock Split. If the Board does not implement an approved Reverse Stock Split prior tofully vest on the one-year anniversary of this meeting, the grant date.
Exchange of Stock Certificates
Some stockholders hold their shares of common stock in certificate form or a combination of certificate and book-entry form. Our transfer agent will act as the “exchange agent” for purposes of implementing the exchange of stock certificates. Stockholders holding pre-split shares that are certificated will be asked to surrender to the exchange agent certificates representing pre-split shares in exchange for certificates representing post-split shares in accordance with the procedures to be set forth in a letter of transmittal to be sent by the exchange agent. No new certificates will be issued to a stockholder until such stockholder has surrendered the stockholder’s outstanding certificate(s) together with the properly completed and executed letter of transmittal to the exchange agent.
STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
Certain Material U.S. Federal Income Tax Consequences of the Reverse Stock Split
The following is a summary of certain material federal income tax consequences of the Reverse Stock Split that generally are expected to be applicable to U.S. Holders (as defined below) of the common stock, but does not purport to be a complete discussion of all of the potential tax considerations relating thereto. This summary is based on the
9
Name | No. of Awards | |||
Anna Berkenblit, M.D. | 2,666 | |||
Eric Bjerkholt | 3,999 | |||
Christopher Y. Chai | 2,666 | |||
Mary Haak-Frendscho, Ph.D. | 2,666 | |||
Tim Kutzkey, Ph.D. | 2,666 | |||
Shao-Lee Lin, M.D., Ph.D. | 2,666 | |||
Mace Rothenberg, M.D. | 2,666 | |||
David J. Woodhouse, Ph.D. | 2,666 |
Non-Employee Director Compensation Policy
Our Board has adopted a policy for non-employee director compensation under which each non-employee director is eligible to receive the following amounts for their service on our Board:
provisions
26
Director fees under the program are payable in arrears in four equal quarterly installments following the end of each calendar quarter in which the service was performed. The amount of each payment will be prorated for any portion of a quarter that a director is not serving on our Board.
Stock Split differingoptions granted to our non-employee directors under the program are granted under the 2021 Plan, have an exercise price equal to the fair market value of our common stock on the date of grant, and expire not later than ten years after the date of grant.
The stock options granted upon a director’s initial election or appointment vest in 36 substantially fromequal monthly installments following the consequences summarized below. We have not sought and will not seek an opiniondate of counsel orgrant. The stock options granted annually to directors vest in a ruling fromsingle installment on the Internal Revenue Service regarding the U.S. federal income tax consequencesfirst anniversary of the Reverse Stock Split, and there can be no assurance thatdate of grant. All vesting is subject to the Internal Revenuedirector’s Continuous Service or the courts will accept the positions expressed below. This summary assumes that the common stock will be, both before and after the Reverse Stock Split, held as a “capital asset,” as(as defined in the Code (i.e., generally, property held for investment). Further, it does not discuss the tax consequences of the Reverse Stock Split under state, local, foreign laws or under gift, excise or other non-income tax laws, or the application of the alternative minimum tax rules, the Medicare contribution tax2021 Plan) on net investment income or the special tax accounting rules under Section 451(b) of the Code. This summary does not address the tax consequences of transactions effectuated prior or subsequent to, or concurrently with, the Reverse Stock Split (whether or not any such transactions are consummated in connection with the Reverse Stock Split), or the tax consequences to holders of options, warrants or similar rights to acquire common stock.each applicable vesting date. In addition, this summary does not addressall unvested stock options vest in full for each director who remains in continuous service with us until immediately prior to the tax consequences applicable toclosing of a holder’s particular circumstances or to holders that are subject to special tax rules, including without limitation banks, financial institutions, insurance companies, regulated investment companies, mutual funds, real estate investment trusts, personal holding companies, foreign entities, nonresident alien individuals, broker-dealers, traders, tax-exempt entities, persons who hold common stock as a position in a hedging transaction, “straddle,” “conversion transaction” or other integrated or risk reduction transaction, persons whose common stock constitute qualified small business stock within the meaningChange of Section 1202 of the Code, holders who hold their common stock through individual retirement or other tax-deferred accounts, holders of common stock who are not U.S. HoldersControl (as defined below), holders of common stock who have a functional currency for U.S. federal income tax purposes other than the U.S. dollar, holders who acquired their common stock in a transaction subject to the gain rollover provisions of Section 1045 of the Code, holders who acquired their common stock pursuant to the exercise of employee stock options or otherwise as compensation, or holders of common stock who are partnerships, limited liability companies that are not treated as corporations for U.S. federal income tax purposes, S corporations, or other pass-through entities or investors in such pass-through entities.
For purposes of this discussion, a U.S. Holder means a beneficial owner of common stock that is: (i) an individual who is a citizen or resident of the United States; (ii) a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in the United States or under the laws of the United States or any subdivision thereof, or the District of Columbia; (iii) an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or (iv) a trust (other than a grantor trust) if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (B) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
THIS SUMMARY OF CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. EACH STOCKHOLDER IS URGED TO CONSULT WITH SUCH STOCKHOLDER’S OWN TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT.
Tax Consequences of the Reverse Stock Split
The Reverse Stock Split should constitute a “recapitalization” for U.S. federal income tax purposes. A U.S. Holder that receives solely a reduced number of shares of common stock generally will not recognize gain or loss in the Reverse Stock Split. A U.S. Holder’s aggregate tax basis in the reduced number of shares of common stock should equal the U.S. Holder’s aggregate tax basis in its pre-Reverse Stock Split shares of common stock, and such U.S. Holder’s holding period in the reduced number of shares of common stock should include the holding period in its pre-Reverse Stock Split shares of common stock exchanged. Treasury Regulations provide detailed rules for allocating the tax basis and holding period of the shares of common stock surrendered to the shares of common stock received in a recapitalization pursuant to the Reverse Stock Split. U.S. Holders should consult their tax advisors as to application of the foregoing rules where shares of common stock were acquired at different times or at different prices.
102021 Plan).
27
No gain or loss will be recognized by Surrozen as a result of the proposed Reverse Stock Split.
Cash in Lieu of Fractional Shares
A U.S. Holder that receives cash in lieu of fractional share interests as a result of the Reverse Stock Split will be treated as having received the fractional shares pursuant to the Reverse Stock Split and then as having exchanged the fractional shares for cash in a redemption by Surrozen, and generally should recognize gain or loss equal to the difference, if any, between the amount of cash received in lieu of a fractional share and its adjusted basis allocable to the fractional share interests. Such gain or loss will be long-term capital gain or loss if the pre-Reverse Stock Split shares were held for more than one year. Long-term capital gains of individuals are generally subject to tax at reduced rates. There are limitations on the deductibility of capital losses under the Code. A U.S. Holder’s aggregate tax basis in the reduced number of shares of common stock, if any, should equal the U.S. Holder’s aggregate tax basis in its pre-Reverse Stock Split shares of common stock decreased by the basis allocated to the fractional share for which such U.S. Holder is entitled to receive cash, and the holding period of the reduced number of shares of common stock received, if any, should include the holding period of the pre-Reverse Stock Split shares of common stock exchanged.
Information Reporting and Backup Withholding
A holder of common stock may be subject to information reporting and backup withholding on cash paid in lieu of fractional shares in connection with the Reverse Stock Split. To avoid backup withholding, each holder of common stock that does not otherwise establish an exemption should provide its taxpayer identification number and comply with the applicable certification procedures. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules generally will be allowed as a refund or credit against a U.S. Holder’s U.S. federal income tax liability, provided the required information is timely and properly furnished to the Internal Revenue Service. Holders of common stock should consult their tax advisors regarding their qualification for an exemption from backup withholding and the procedures for obtaining such an exemption, as well as the procedures for obtaining a credit or refund if backup withholding is imposed.
THE PRECEDING DISCUSSION IS INTENDED ONLY AS A SUMMARYSECURITY OWNERSHIP OF CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT TO U.S. HOLDERS. IT IS NOT A COMPLETE ANALYSIS OR DISCUSSION OF ALL POTENTIAL TAX EFFECTS THAT MAY BE IMPORTANT TO A PARTICULAR HOLDER. ALL HOLDERS OF OUR COMMON STOCK SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT TO THEM, INCLUDING RECORD RETENTIONBENEFICIAL OWNERS AND TAX-REPORTING REQUIREMENTS, AND THE APPLICABILITY AND EFFECT OF ANY U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX LAWS.
No Dissenters’ Rights
Under applicable Delaware law, our stockholders are not entitled to dissenters’ or appraisal rights with respect to our proposed amendment to the certificate of incorporation to effect the Reverse Stock Split. We will not independently provide our stockholders with any such right.
Vote Required
The affirmative vote of the majority of votes cast is required to adopt and approve the amendment to our certificate of incorporation to effect the Reverse Stock Split. The holders of common stock have the right to cast one vote per share of common stock on this proposal. There will not be any broker non-votes for this proposal.
The Board of Directors RecommendsA Vote in Favor of Proposal No. 1.
11
Security Ownership of Certain Beneficial Owners and ManagementMANAGEMENT
The following table sets forth information relating toregarding the beneficial ownership of our common stock as of October 11, 2023 by:
Except as noted by footnote, and subject to community property laws where applicable, based on the information provided to us, we believe that the persons and entities named in the table below have sole voting and investment power with respect to all shares shown as beneficially owned by them. The beneficial ownership percentages set forth in the table below are based on 30,575,0473,198,786 shares of common stock outstanding as of October 11, 2023. April 10, 2024.
|
| Beneficial Ownership |
| |||||
Name of Beneficial Owner(1) |
| Shares(2) |
|
| Percentage |
| ||
Directors and Named Executive Officers: |
|
|
|
|
|
| ||
Craig Parker(3) |
|
| 85,190 |
|
|
| 2.60 | % |
Charles Williams (4) |
|
| 27,836 |
|
| * |
| |
Wen-Chen Yeh, M.D., Ph.D. (5) |
|
| 29,374 |
|
| * |
| |
Yang Li, Ph.D.(6) |
|
| 18,115 |
|
| * |
| |
Anna Berkenblit, M.D. (7) |
|
| 5,007 |
|
| * |
| |
Tim Kutzkey, Ph.D. (8) |
|
| 1,227,938 |
|
|
| 33.95 |
|
Shao-Lee Lin, M.D., Ph.D. (7) |
|
| 5,007 |
|
| * |
| |
David Woodhouse, Ph.D. (7) |
|
| 5,007 |
|
| * |
| |
Mary Haak-Frendscho, Ph.D. (7) |
|
| 5,007 |
|
| * |
| |
Mace Rothenberg, M.D. (7) |
|
| 5,007 |
|
| * |
| |
Christopher Y. Chai (7) |
|
| 5,007 |
|
| * |
| |
Eric Bjerkholt(9) |
|
| 2,370 |
|
| * |
| |
All directors and current executive officers as a group (11 persons) (10) |
|
| 1,391,491 |
|
|
| 43.50 |
|
Five Percent Holders: |
|
|
|
|
|
| ||
Entities affiliated with the Column Group (11) |
|
| 1,225,272 |
|
|
| 33.90 |
|
RA Capital Healthcare Fund, L.P.(12) |
|
| 323,663 |
|
|
| 9.99 |
|
Entities affiliated with Nantahala Capital Management, LLC(13) |
|
| 308,772 |
|
|
| 9.06 |
|
CVI Investments, Inc.(14) |
|
| 202,363 |
|
|
| 6.07 |
|
StemPoint Capital Master Fund LP(15) |
|
| 199,158 |
|
|
| 5.97 |
|
Stonepine Capital, L.P.(16) |
|
| 199,158 |
|
|
| 5.97 |
|
Armistice Capital, LLC(17) |
|
| 190,000 |
|
|
| 5.94 |
|
The Goldman Sachs Group, Inc.(18) |
|
| 172,666 |
|
|
| 5.40 |
|
_______________________ | |
* | less than 1% beneficial ownership |
28
29
30
CERTAIN TRANSACTIONS WITH RELATED PERSONS
Other than compensation arrangements for our directors and executive officers, which are described elsewhere in this Proxy Statement, described below are transactions since January 1, 2022, and each currently proposed transaction in which:
Private Placement
In April 2024 we entered into a securities purchase agreement with certain institutional investors and management and issued and sold in a private placement: (i) 1,091,981 shares of common stock, (ii) pre-funded warrants to purchase up to 40,000 shares of common stock, and (iii) warrants to purchase up to 11,136,106 shares of common stock, for aggregate upfront gross proceeds of approximately $17.6 million, before deducting placement agent fees and other expenses. Please see Note 16 “Subsequent Event” to our consolidated financial statements in our Annual Report for further discussion of the private placement.
The following table sets forth the aggregate number of shares and warrants purchased by the listed entities and persons in the private placement:
Name of Purchaser |
| Shares of |
|
| Price Per Share(4) |
|
| Series A Warrants |
|
| Series B Warrants |
|
| Series C Warrants |
|
| Series D Warrants |
|
| ||||||
Entities affiliated with |
|
| 193,548 |
|
| $ | 15.50 |
|
|
| 193,548 |
| (5) |
| 210,526 |
| (6) |
| 749,998 |
| (7) |
| 749,998 |
| (7) |
Craig Parker(2) |
|
| 1,474 |
|
| $ | 16.96 |
|
|
| 1,474 |
| (8) |
| 1,603 |
| (9) |
| 5,712 |
| (7) |
| 5,712 |
| (7) |
Charles Williams(3) |
|
| 1,474 |
|
| $ | 16.96 |
|
|
| 1,474 |
| (8) |
| 1,603 |
| (9) |
| 5,712 |
| (7) |
| 5,712 |
| (7) |
____________________
(1) Entities affiliated with The Column Group own 5% or more of our capital stock. Tim Kutzkey, Ph.D. is a Managing Partner at The Column Group and a member of our Board.
(2) Craig Parker is our President and Chief Executive Officer and a member of our Board.
(3) Charles Williams is our Chief Financial Officer, Chief Operating Officer and Corporate Secretary.
(4) Includes $1.25 per share for the accompanying warrants to purchase shares of common stock.
(5) The exercise price of this warrant is $15.50 per share.
(6) The exercise price of this warrant is $14.25 per share.
(7) The exercise price of this warrant is $16.00 per share.
(8) The exercise price of this warrant is $16.96 per share.
(9) The exercise price of this warrant is $15.71 per share.
Indemnification Agreements
Our Certificate of Incorporation contains provisions limiting the liability of directors, and our Certificate of Incorporation provides that we indemnify each of our directors and officers to the fullest extent permitted under Delaware law. Our Certificate of Incorporation also provides our Board with discretion to indemnify our employees and other agents when determined appropriate by our Board.
In addition, we have entered into indemnification agreements with each of our directors and executive officers, which requires us to indemnify them. For more information regarding these agreements, see the section titled “Executive Compensation—Limitations of Liability and Indemnification Matters”.
UCSF License Agreement
In March 2022, we entered into a non-exclusive commercial license agreement with The Regents of the University of California (“UCSF”), a holder of more than 5% of our capital stock, to make and use licensed products identified from the phage display llama VHH single domain antibody library. Under the commercial license agreement, we paid UCSF a nominal license issue fee. We agreed to pay a nominal annual license maintenance fee, low five-digit payment per licensed product upon achievement of a regulatory
31
milestone, nominal annual minimum royalties, and earned royalties equal to a sub-single digit percentage of our and our sublicensees’ net sales of licensed products.
For a more detailed description of this agreement, see the section titled “Business—UCSF License and Option Agreements” in our Annual Report.
Securities Repurchase
In December 2022, we entered into a securities purchase agreement with entities affiliated with Consonance Capital Management LP (collectively, the “Consonance Entities”). Pursuant to the agreement, we repurchased an aggregate of 358,833 shares of our common stock and warrants to purchase an aggregate 87,366 shares of our common stock from the Consonance Entities for an aggregate purchase price of approximately $2.7 million. The shares of common stock were returned to authorized and unissued status and the warrants were cancelled. Following the repurchase, the Consonance Entities no longer hold any shares of our common stock or warrants to purchase our common stock.
Policies and Procedures for Related Person Transactions
Our Board has adopted a related person transaction policy setting forth the policies and procedures for the identification, review, and approval or ratification of related person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we and a related person were or will be participants and the amount involved exceeds $120,000, including purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness and guarantees of indebtedness. In reviewing and approving any such transactions, our audit committee will consider all relevant facts and circumstances as appropriate, such as the purpose of the transaction, the availability of other sources of comparable products or services, whether the transaction is on terms comparable to those that could be obtained in an arm’s length transaction, management’s recommendation with respect to the proposed related person transaction, and the extent of the related person’s interest in the transaction.
32
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
Stockholders who intend to have a proposal considered for inclusion in our proxy materials for presentation at our annual meeting of stockholders to be held in 2025 (the “2025 Annual Meeting”) pursuant to Rule 14a-8 under the Exchange Act must submit the proposal to our Corporate Secretary at our offices at 171 Oyster Point Blvd., Suite 400, South San Francisco, California 94080.94080, in writing not later than December 24, 2024.
Name and Address of Beneficial Owners (1) |
| Shares |
|
| Percentage |
| ||
Directors and Executive Officers: |
|
|
|
|
|
| ||
Craig Parker (3) |
|
| 1,015,255 |
|
|
| 3.2 | % |
Charles Williams (4) |
|
| 263,064 |
|
| * |
| |
Anna Berkenblit (5) |
|
| 55,129 |
|
| * |
| |
Tim Kutzkey (6) |
|
| 9,434,795 |
|
|
| 30.7 | % |
Shao-Lee Lin (5) |
|
| 55,129 |
|
| * |
| |
David Woodhouse (5) |
|
| 55,129 |
|
| * |
| |
Mary Haak-Frendscho (5) |
|
| 55,129 |
|
| * |
| |
Mace Rothenberg (5) |
|
| 55,129 |
|
| * |
| |
Christopher Y. Chai (5) |
|
| 55,129 |
|
| * |
| |
Eric Bjerkholt(7) |
|
| 8,888 |
|
| * |
| |
All directors and executive officers as a group (11 persons) (8) |
|
| 11,267,882 |
|
|
| 35.0 | % |
|
|
|
|
|
|
| ||
Five Percent Holders: |
|
|
|
|
|
| ||
Entities affiliated with The Column Group (6) |
|
| 9,414,795 |
|
|
| 30.6 | % |
The Regents of the University of California (9) |
|
| 2,081,453 |
|
|
| 6.8 | % |
SymBiosis II, LLC (10) |
|
| 1,964,082 |
|
|
| 6.4 | % |
BML Investment Partners, L.P.(11) |
|
| 1,669,037 |
|
|
| 5.5 | % |
Stockholders intending to present a proposal at our 2025 Annual Meeting, but not to include the proposal in our proxy statement, or to nominate a person for election as a director, must comply with the requirements set forth in our Bylaws. Our Bylaws require, among other things, that our Corporate Secretary receive written notice from the stockholder of record of their intent to present such proposal or nomination not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the first anniversary of the preceding year’s annual meeting of stockholders. Therefore, we must receive notice of such a proposal or nomination for the 2025 Annual Meeting no earlier than the close of business on February 5, 2025 and no later than the close of business on March 7, 2025. The notice must contain the information required by our Bylaws. In the event that the date of the 2025 Annual Meeting is more than 30 days before or more than 30 days after June 5, 2025, then our Secretary must receive such written notice not earlier than the close of business on the 120th day prior to the 2025 Annual Meeting and not later than the close of business of the 90th day prior to the 2025 Annual Meeting or, if later, the 10th day following the day on which public disclosure of the date of such meeting is first made by us. SEC rules permit management to vote proxies in its discretion in certain cases if the stockholder does not comply with this deadline and, in certain other cases notwithstanding the stockholder’s compliance with this deadline.
We reserve the right to reject, rule out of order or take other appropriate action with respect to any proposal that does not comply with these or other applicable requirements.
* lessIn connection with our solicitation of proxies for our 2025 annual meeting of stockholders, we intend to file a proxy statement with the SEC. Stockholders may obtain our proxy statement (and any amendments and supplements thereto) and other documents as and when filed with the SEC without charge from the SEC’s website at: www.sec.gov.
In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than 1% beneficial ownership
12
TABLE OF CONTENTSour nominees must provide notice that sets forth the information required by Rule 14a-19 of the Exchange Act no later than April 6, 2025.
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HOUSEHOLDING
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OTHER MATTERS
The Board knows of no other mattersSEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and notices with respect to two or more stockholders sharing the same address by delivering a single proxy statement or a single notice addressed to those stockholders. This process, which is commonly referred to as “householding,” provides cost savings for companies and helps the environment by conserving natural resources. Some brokers household proxy materials, delivering a single proxy statement or notice to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be presented for considerationhouseholding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, or if your household is receiving multiple copies of these documents and you wish to request that future deliveries be limited to a single copy, please notify your broker. You can also request prompt delivery of a copy of this Proxy Statement and our Annual Report by contacting the Special Meeting. If any other matters are properly brought before the meeting, it is the intention of the persons namedBroadridge Financial Solutions, Inc. at (866) 540-7095 or in the accompanying proxy to vote on such matters in accordance with their best judgement.writing at Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717.
20222023 ANNUAL REPORT
Our Annual Report on Form 10-K for the year ended December 31, 2022 has been filed with the SEC. It is available free of charge at the SEC’s website at www.sec.gov.www.sec.gov. Stockholders can also access our Annual Report on Form 10-K at www.proxyvote.com. Upon written request by a stockholder, we will mail without charge a copy of our Annual Report, on Form 10-K, including the financial statements and financial statement schedules, but excluding exhibits. Exhibits to theour Annual Report on Form 10-K are available upon payment of a reasonable fee, which is limited to our expenses in furnishing the requested exhibit. All requests should be directed to our Corporate Secretary, Surrozen, Inc., 171 Oyster Point Blvd., Suite 400, South San Francisco, California 94080.
Your vote is important. Please promptly vote your shares by completing, signing, dating and returning your proxy card or by Internetinternet or telephone voting as described on your proxy card.
By Order of the Board of Directors | |||
/s/ Charles Williams | |||
Charles Williams | |||
Chief Financial Officer, Chief Operating Officer and Corporate Secretary | |||
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South San Francisco, California
April 23, 2024
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VOTE BY INTERNET
Before The Meeting – Go to www.proxyvote.com
Use the Internetinternet to transmit your voting instructions
and for electronic delivery of information. Vote by 11:59 P.M. Eastern Time
on December , 2023.June 4, 2024.
Have your proxy card in hand when you access the website
and follow the instructions to obtain your records
and to create an electronic voting instruction form.
During The Meeting – Go to www.virtualshareholdermeeting.com/SRZN2023SMSRZN2024
You may attend the meeting via the Internetinternet and vote during the meeting.
Have the information that is printed in the box marked by the arrow available
and follow the instructions.
VOTE BY PHONE – 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions.
Vote by 11:59 P.M. Eastern Time on December , 2023.June 4, 2024.
Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we
have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way,
Edgewood, NY 11717.
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APPENDIXA35
CERTIFICATE OF AMENDMENTTO THE CERTIFICATE OF INCORPORATION OFSURROZEN, INC.(1)
Surrozen, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “Company”), hereby certifies that:
FIRST: The name of this Company is Surrozen, Inc.
SECOND: The original name of the Company was “Surrozen, Inc.”, and the date of filing the original Certificate of Incorporation of the Company with the Secretary of State of the State of Delaware is August 10, 2021.
THIRD: The Board of Directors of the Company, acting in accordance with the provisions of Sections 141 and 242 of the General Corporation Law of the State of Delaware, adopted resolutions amending Article III, Section A of the Certificate of Incorporation, to read in its entirety:
“A. This Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which this Company is authorized to issue is 510,000,000 shares. 500,000,000 shares shall be Common Stock, each having a par value of $0.0001. 10,000,000 shares shall be Preferred Stock, each having a par value of $0.0001.
Effective at 5:00 p.m. Eastern time, on the date of the filing of this Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware (the “Effective Time”), each [ten, eleven, twelve, thirteen, fourteen, fifteen, sixteen, seventeen, eighteen, nineteen, twenty, twenty-one, twenty-two, twenty-three, twenty-four, twenty-five, twenty-six, twenty-seven, twenty-eight, twenty-nine or thirty] shares of this Company’s Common Stock, par value $0.0001 per share, issued and outstanding shall be combined into one (1) share of Common Stock, par value $0.0001 per share, of this company. No fractional shares shall be issued and, in lieu thereof, any holder of less than one (1) share of Common Stock shall, upon surrender after the Effective Time of a certificate, which formerly represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time, be entitled to receive cash for such holder’s fractional share based upon the closing sales price of this Company’s Common Stock as reported on the Nasdaq Capital Market on the date this Certificate of Amendment to the Certificate of Incorporation of this Company is filed with the Secretary of State of the State of Delaware.”
FOURTH: This Certificate of Amendment to the Certificate of Incorporation was submitted to the stockholders of the Company and was duly adopted and approved in accordance with the provisions of Section 242 of the General Corporate Law of the State of Delaware.
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IN WITNESS WHEREOF, the Company has caused this Certificate of Amendment to be signed by its President and Chief Executive Officer this day of , 2023.
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