Business Context and Reporting Period
This Form 8-K, dated June 16, 2022, reports that JATT Acquisition Corp (JATT), a Cayman Islands exempted company and SPAC, entered into a Business Combination Agreement with Zura Bio Limited (Zura), a biopharmaceutical company incorporated in England and Wales. The transaction involves a series of mergers where JATT will change its name to "Zura Bio Limited" and list on the NYSE. The filing details the terms of the merger, financing arrangements, and related agreements executed on June 16, 2022.
Key Financial Metrics and Transaction Terms
The filing outlines the capital structure and financing commitments for the proposed business combination:
- PIPE Investment: $20 million committed by one accredited investor for 2,000,000 shares at $10.00 per share.
- Forward Purchase Agreement (FPA): $30 million committed by two accredited investors for 3,000,000 shares at $10.00 per share.
- Redemption Backstop: An additional $15 million FPA investment is contingent upon public share redemptions exceeding 90%.
- Share Issuance to Zura: Approximately 16,500,000 JATT Class A Shares will be issued to Zura shareholders.
- Minimum Cash Requirement: JATT must hold at least $65,000,000 in cash and cash equivalents (excluding Trust Account funds) immediately prior to Closing.
- Net Tangible Assets: JATT must have at least $5,000,001 of net tangible assets upon Closing.
The filing does not provide historical revenue, profit, or cash flow data for Zura or JATT, as this is a transaction announcement rather than a periodic financial report.
Material Changes and Transaction Structure
The primary material change is the entry into the definitive merger agreement. Key structural elements include:
- Merger Sequence: JATT Merger Sub will merge with Zura Bio Holdings Ltd (Holdco), followed by Holdco merging into JATT Merger Sub 2.
- Share Conversion: JATT Class B Ordinary Shares will convert to Class A on a one-for-one basis. JATT Units will separate into one Class A Share and one-half warrant.
- Warrant Forfeiture: The Sponsor agreed to forfeit up to 4,137,000 private placement warrants based on redemption levels, which will be transferred to FPA and PIPE investors.
- Equity Incentive Plan: A new Long-Term Incentive Plan (LTIP) will be adopted with a reserve of up to 10.00% of the fully diluted share count post-closing.
Guidance, Outlook, Risks, and Conditions
Conditions to Closing: The transaction is subject to shareholder approvals from both JATT and Zura, effectiveness of the Form S-4 registration statement, NYSE listing approval, and satisfaction of the minimum cash requirement.
Lock-Up Provisions: Shares held by the Sponsor, affiliates, and Zura shareholders are subject to a tiered lock-up: one-third restricted for 6 months, one-third for 12 months, and one-third for 24 months. Restrictions may be lifted early if the share price exceeds $12.00 for 20 trading days within a 30-day period.
Risks and Uncertainties: The filing includes extensive forward-looking statements and risk factors, including the potential failure to obtain regulatory approvals, inability to meet the cash requirement due to redemptions, disruption of operations, and the impact of the COVID-19 pandemic. The transaction must close by November 15, 2022, or it may be terminated.
Investor Verification Checklist
- Verify the final redemption rate of JATT public shares to determine if the $15 million backstop FPA investment is triggered.
- Confirm the effectiveness of the Form S-4 registration statement and the outcome of the shareholder votes for both JATT and Zura.
- Review the definitive proxy statement for updated financial projections and non-IFRS measures for Zura.
- Monitor the status of the $65 million minimum cash requirement condition immediately prior to the Closing Date.
- Check for any updates regarding the November 15, 2022, termination deadline.