JATT (NYSE:JATT) announced in an 8-K this morning that it will now issue 2,500,000 new shares to its FPA investors following the close of its business combination with Zura Bio.

FPA investors Athanor Master Fund and affiliates already agreed to expand their FPA purchases last month to 3,000,000 shares at $10 per share and provide a binding redemption backstop of $15 million covering any redemptions in excess of 90%.

With these backstop purchases, Athanor is to receive 1.087 shares for each Class A share that it bought that would have otherwise been redeemed above the threshold. As further compensation, JATT will now issue Athanor 2,500,000 new shares at close.

Should the backstop not be triggered, Athanor will receive its 5,500,00 shares in the combined company effectively at $5.45 per share.  In the event the backstop is fully utilized, Athanor will be receiving a total of 7,130,500 shares at effectively $6.31 per share.

Overall, this new committed funding ensures that JATT, together with an existing $20 million PIPE, will meet the $65 million minimum cash condition of its business combination with Zura Bio. JATT shareholders are set to vote to complete the combination at a special meeting on March 16.

But, because only 2,500,000 of the 7,500,000 shares issued across the FPA and PIPE are to be done so below $10 per share (and $9.20 is the threshold), these moves are unlikely to trigger JATT’s Crescent Term. Under the terms of its prospectus, the exercise price of its warrants are only to be adjusted if newly issued securities below $9.20 represent more than 60%.

The parties initially announced their $215 million business combination in June 2022. London-based Zura Bio is a clinical-stage firm developing novel medicines for immune disorders with an initial focus on alopecia.