Business Context and Reporting Period
This Form 8-K is filed by JATT Acquisition Corp (JATT), a Cayman Islands exempted company and special purpose acquisition company (SPAC), on December 12, 2022, reporting events occurring on December 8, 2022. JATT is in the process of a proposed business combination with Zura Bio Limited (Zura). The filing details a strategic partnership and equity transaction between JATT and Eli Lilly and Company (Lilly) related to Zura's intellectual property.
Key Financial Metrics and Transaction Details
The filing does not provide standard financial metrics such as revenue, profit, cash flow, or debt levels for JATT or Zura, as this is a current report regarding specific corporate events rather than a periodic financial statement.
- Equity Issuance: JATT agreed to issue and grant 550,000 Class A ordinary shares to Lilly in a private placement.
- Consideration: The shares are issued as partial consideration for Lilly entering into a License, Development, and Commercialization Agreement with Z33 Bio Inc. (an entity controlled by Zura).
- Direct Financial Benefit to JATT: The filing explicitly states that, other than the benefit of the License Agreement with Z33, JATT will not receive any consideration from Lilly for the issuance of the shares.
- Transaction Timing: The closing of the equity grant will occur contemporaneously with the closing of the Business Combination Agreement between JATT and Zura.
Material Changes and Agreements
The primary material change reported is the execution of three key agreements on December 8, 2022:
- License Agreement: Z33 Bio Inc. entered into an agreement with Lilly granting Lilly a license to develop, manufacture, and commercialize a compound relating to IL-33.
- Equity Grant Agreement: JATT and Lilly agreed to the issuance of 550,000 shares to Lilly. These shares are subject to registration rights and a lock-up agreement.
- Lock-Up Agreement: Lilly's shares are restricted for a period of 6, 12, and 24 months post-closing (in thirds), with an early release provision if JATT's share price exceeds $12.00 per share for 20 trading days within a 30-day period.
Guidance, Outlook, and Risks
The filing contains extensive forward-looking statements regarding the proposed business combination between JATT and Zura. Management cautions that actual results may differ materially from expectations due to various risks.
- Outlook: The transaction is contingent upon the satisfaction of closing conditions, including shareholder approval of JATT and regulatory approvals.
- Risks: Key risks include the inability to complete the business combination, failure to meet the minimum cash requirement after redemptions, delays in regulatory approvals, and the potential for the combined company to fail to achieve anticipated benefits.
- Unusual Items: The issuance of shares to Lilly without direct cash consideration to JATT is a notable structural element of the deal, serving as a strategic partnership incentive.
Investor Verification Checklist
- Verify the status of the Business Combination Agreement between JATT and Zura and whether closing conditions have been met.
- Confirm the terms of the License Agreement between Z33 Bio Inc. and Eli Lilly, specifically regarding the IL-33 compound.
- Review the definitive proxy statement/prospectus (Form S-4) for details on the 550,000 shares issued to Lilly and the associated lock-up provisions.
- Assess the impact of the equity grant on JATT's capitalization and potential dilution to existing shareholders upon closing.
- Monitor regulatory approvals required for both the business combination and the strategic partnership with Lilly.