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Item 5. Market for Registrant’s Common Equity

2024-03-28 compared with 2023-03-28 · 34 added, 41 removed, 4 unchanged (95% of the section changed)

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information and Holders

JATT’s units, public Class A Ordinary Shares and public warrants were historically quoted on The New York Stock Exchange under the symbols “JATT U,” “JATT” and “JATT WS,” respectively.

The Company Class A Ordinary Shares and Warrants commenced trading on The Nasdaq Capital Market under the new trading symbols “ZURA” and “ZURAW,” respectively, on March 21, 2023.

In connection with the Closing, each JATT unit was separated into its components, which consisted of one JATT Class A Ordinary Share and one-half of one redeemable warrant, and such units no longer exist.

As of the Closing Date and following the completion of the Business Combination, there were 27,552,148 Company Class A Ordinary Shares issued and outstanding held of record by 15 holders and 6,900,000 Public Warrants outstanding held of record by four holders.

We have not paid any cash dividends on our Class A Ordinary shares shares to date and do not intend to pay cash dividends.

The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our Business Combination.

The payment of any cash dividends will be within the discretion of our Board at such time.

In addition, our Board is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future.Further, if we incur any indebtedness in the future, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

Market Information for Common Stock

Our Class A Ordinary Shares and Warrants are listed for trading on The Nasdaq Capital Market under the symbols “ZURA” and “ZURAW”, respectively.

Holders of Record

As of December 31, 2023, there were approximately 27 stockholders of record of our ordinary shares.

Dividend Policy

We currently intend to retain all available funds and any future earnings to fund the growth and development of our business.

We have never declared or paid any cash dividends on our capital stock.

We do not intend to pay cash dividends to our stockholders in the foreseeable future.

Investors should not purchase our Class A Ordinary Shares with the expectation of receiving cash dividends.

Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, general business conditions, and other factors that our board of directors may deem relevant.

Securities Authorized for Issuance Under Equity Compensation Plans

As of December 31, 2022, we had no compensation plans under which equity securities of the Company were authorized for issuance.

Zura Bio Limited 2023 Equity Incentive Plan

At the Extraordinary General Meeting held on March 16, 2023, the JATT shareholders considered and approved the Equity Incentive Plan.

The Equity Incentive Plan was previously approved, subject to shareholder approval, by JATT’s board of directors.

The Equity Incentive Plan became effective immediately upon the Closing Date.

The Equity Incentive Plan initially makes available for issuance a maximum number of 4,029,898 Company Class A Ordinary Shares.

Additionally, the number of shares reserved for issuance under the Equity Incentive Plan will automatically increase on January 1st of each year, beginning on January 1, 2024 and continuing through and including January 1, 2029, in an amount equal to the lesser of (i) five percent (5%) of the Company Class A Ordinary Shares outstanding on the final day of the immediately preceding calendar year, (ii) 8,059,796 Company Class A Ordinary Shares or (iii) such smaller number of shares as determined by the Company’s board of directors.

A summary of the terms of the Company’s Equity Incentive Plan is set forth in the Proxy Statement/Prospectus in the section titled “ Proposal 5—The Equity Incentive Plan Proposal ” beginning on page 157 of the Proxy Statement/Prospectus, which is incorporated herein by reference.

Such summary and the foregoing description are qualified in their entirety by reference to the text of the Equity Incentive Plan, a copy of which is attached hereto as Exhibit 10.11 and incorporated herein by reference.

Zura Bio Limited 2023 Employee Stock Purchase Plan

At the Extraordinary General Meeting, the JATT shareholders considered and approved the ESPP.

The ESPP was previously approved, subject to shareholder approval, by JATT’s board of directors.

The ESPP became effective immediately upon the Closing Date.

The maximum number of Company Class A Ordinary Shares that may be issued under the ESPP is 4,029,898, plus the aggregate number of Company Class A Ordinary Shares that are added under the Equity Incentive Plan on January 1st of each calendar year, beginning on January 1, 2024 and ending on and including January 1, 2029.

A summary of the terms of the Company’s ESPP is set forth in the Proxy Statement/Prospectus in the section titled “ Proposal 7—The ESPP Proposal ” beginning on page 167 of the Proxy Statement/Prospectus, which is incorporated herein by reference.

Such summary and the foregoing description are qualified in their entirety by reference to the text of the ESPP, a copy of which is attached hereto as Exhibit 10.12 and incorporated herein by reference.

The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report.

Recent Sales of Unregistered Securities;

The disclosure set forth in Item 1.

the “Business Combination” above is incorporated by reference into this Item 5.

The securities issued in connection with the PIPE Subscription Agreements and Forward Purchase Agreement have not been registered under the Securities Act, in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.

Use of Proceeds from Registered Offerings

On July 16, 2021, we consummated the IPO of 12,000,000 Units at a price of $10.00 per Unit, generating gross proceeds of $120,000,000.

On July 16, 2021, simultaneously with the closing of the IPO, we consummated the sale of 5,370,000 Private Placement Warrants to our Sponsor at a price of $1.00 per warrant, generating gross proceeds of $5,370,000.

On July 19, 2021, in connection with the underwriters’ exercise of their over-allotment option in full, the Company consummated the sale of an additional 1,800,000 Units, and the sale of an additional 540,000 Private Placement Warrants each at $1.00 per warrant, generating total gross proceeds of $18,540,000.

As a result, the Company received a total of $138,000,000 from the sale of the Units and $5,910,000 from the sale of the Private Placement Warrants, for total proceeds of $143,910,000.

After deducting the underwriting discounts and commissions (excluding the Deferred Discount, which amount will be payable upon the consummation of our Business Combination, if consummated) and the estimated offering expenses, the total net proceeds from our IPO and the sale of the Private Placement Warrants were approximately $141,123,000 of which $139,380,000 (or $10.10 per share sold in the IPO) was placed in the Trust Account in the United States maintained by the Trustee.

We incurred approximately $6,797,000 for costs and expenses related to the IPO, consisting of $2,760,000 in underwriting fees, $4,010,000 of deferred underwriting fees and approximately $27,000 of other IPO related costs, net of reimbursement from the underwriters.

There has been no material change in the planned use of proceeds from our IPO as described in our final IPO prospectus dated July 13, 2021 which was filed with the SEC.

As of December 31, 2022, the Company had $141,474,352 held in the Trust Account, which primarily consisted of investments in mutual funds that invest in U.S.

government securities, cash, or a combination thereof, and the Company had $14,000 in its operating bank account and a working capital deficit of approximately $1.8 million.

After the payment of approximately $139,682,935 to the redeeming public shareholders from the Trust Account in connection with the Business Combination, at March 20, 2023 the Company had $1,896,154 of cash remaining in the Trust Account.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

SELECTED FINANCIAL DATA

As a smaller reporting company, we are not required to make disclosures under this Item.

April 2023 Private Placement

On April 26, 2023, the Company entered into its second PIPE subscription agreement (the “April 2023 Private Placement”) with certain accredited investors (the “Subscribers”), whereby the Company issued 15,041,530 Class A Ordinary Shares, par value $0.0001 per share and pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 3,782,000 Class A Ordinary Shares.

Each Class A Ordinary Share was sold at a price of $4.25 per Class A Ordinary Share and each Pre-Funded Warrant was sold at a price of $4.249 per Pre-Funded Warrant for an aggregate purchase price of $80.0 million.

Concurrently with the April 2023 Private Placement, the Company agreed to, within six months of April 24, 2023, exercise its call option on 50% of the Z33 Series Seed Preferred Shares previously issued to Stone Peach.

The Company agreed to settle its call option by issuing 2,000,000 Class A Ordinary Shares.

The amended settlement terms represented an extinguishment and reissuance of the Z33 Series Seed Preferred Shares.

The $10.9 million difference between the estimated fair value of the new instrument issued and the carrying value of the Z33 Series Seed Preferred Shares was recorded as a deemed dividend to the redeemable noncontrolling interest.

The Company and Stone Peach are renegotiating the terms of the exercise of the call option.

2023 Lilly License

On April 26, 2023, the Company’s newly-formed subsidiary ZB17 LLC (“ZB17”) entered into a license agreement (the “2023 Lilly License” and, together with the 2022 Lilly License, the “Lilly Licenses”) with Lilly, for an exclusive license to develop, manufacture and commercialize a certain bispecific antibody relating to IL-17 and BAFF (“ZB-106”) in exchange for an upfront payment consisting of $5.8 million as well as 1,000,000 Class A Ordinary Shares issued at a fair value of $7.84 per Class A Ordinary Share.

In addition, ZB17 will make a payment of $5.0 million upon the receipt of certain know-how, data, information and materials that Lilly is required to provide under the license agreement.

As a finder’s fee for arranging the acquisition of the 2023 Lilly License, ZB17 granted to Stone Peach the right, but not the obligation, to purchase 4.99% of the fully diluted equity of ZB17 for $1.0 million (the “Stone Peach Call Right”).

The Stone Peach Call Right is not exercisable until after the last patient is dosed in any single next clinical trial with ZB-106 and expires one year from the date of first indication approval for ZB-106 by the FDA or the EMA.

As additional consideration, Stone Peach will receive annual payments first of $0.6 million, and increasing by 10% annually, so long as the Company maintains its license for ZB-106 and beginning on May 1, 2023.

As a finder’s fee for arranging the acquisition of the 2023 Lilly License, the Company agreed to make a one-time milestone payment of $5.0 million to BAFFX17, Ltd (“BAFFX17”) upon the occurrence of either:

(i) a change of control transaction, (ii) the closing of an issuance of equity or equity-linked securities by the Company of at least $100.0 million (iii) the consummation of a sale of assets resulting in net proceeds in excess of $100.0 million, or (iv) the Company’s fully diluted shares outstanding exceed 52,500,000 shares (on a split adjusted basis).

In addition to the consideration transferred during the year ended December 31, 2023, the Company is obligated to make 4 development milestone payments to Lilly up to an aggregate of $155.0 million, and sales milestone payments up to an aggregate of $440 million based on respective thresholds of net sales of products developed from ZB-106.

The Company is also obligated to pay Lilly over a multi-year period (twelve years, or upon the later expiration of regulatory exclusivity of ZB-106 in a country) an annual earned royalty at a marginal royalty rate in the mid-single digits to low-double digits, with increasing rates depending on net sales in the respective calendar year, based on a percentage of sales within varying thresholds for a certain period of years.

The Company is obligated to pay BAFFX17 a fee equal to 3% of any milestone or royalty payments due to Lilly pursuant to the terms of either the 2022 Lilly License and the 2023 Lilly License with Lilly.

Upon receiving written approval from the FDA, EMA, or similar regulatory authority of the Investigational New Drug (“IND”) and the commencement of a clinical trial in the applicable jurisdiction for ZB-106, Stone Peach will also receive a one-time payment of $4.5 million.

Stone Peach will also receive a one-time milestone payment of $25 million upon either (i) certain equity-related transactions, or (ii) the receipt of regulatory approval from the applicable regulatory authority for any new indication in the applicable jurisdiction.

Furthermore, Stone Peach was granted a royalty of 2% of the aggregate net sales of any products developed from the Compound.

Purchases of Equity Securities by the Issuer and Affiliated Persons

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity