Napo Pharmaceuticals, Inc. entered into a non-binding letter of intent to acquire Jaguar Animal Health, Inc. (NasdaqCM:JAGX) in a reverse merger transaction on October 6, 2016. Under the terms of the transaction, the fully diluted equity of Napo will be exchanged for additional Jaguar Animal shares, equaling to 300% of the Jaguar Animal fully diluted equity. Napo and Jaguar Animal will hold the combined entity in the value ratio of 3 to 1. The transaction is subject to negotiation and execution of a definitive transaction agreement and entry into a definitive agreement is expected within 20 days. A binding agreement was signed on February 8, 2017. Under the terms of the agreement, the equity and certain debt holders and trade payable accounts of Napo immediately prior to the Closing will in the aggregate in exchange for such equity and settlement of such liabilities receive voting common stock and convertible non-voting common stock of Jaguar, that, when taken together with approximately 4 million shares of Jaguar common stock to be issued to a third party investor in exchange for $3 million of cash invested in Jaguar and loaned to Napo immediately prior to the merger, will be equal to approximately 75% stake of Jaguar on a fully diluted basis after the merger. Upon consummation of the merger, the existing stockholders of Napo will receive contingent rights to receive voting common stock of Jaguar, will entitle such stockholders to receive no more than approximately 20.5% stake of Jaguar. Any such shares, if any, will be issued on, or before, April 1, 2020, depending upon the amount of proceeds received from sales of a portion of the transaction consideration received by Napo’s largest secured creditor during this time period. Certain holders of restricted stock units of Napo will provide customary indemnification of Jaguar for Napo’s breaches of its representations and warranties, with recourse solely to cancellation of their restricted stock units of no more than approximately $4.25 million based upon a contractual valuation for each of restricted stock units of $0.935. A definitive agreement was signed on March 31, 2017. Under the terms of the agreement, (i) each issued and outstanding share of Napo common stock will be converted into a contingent right to receive up to a whole number of shares of Jaguar common stock compromising in the aggregate of no more than approximately 21.5% of the fully diluted shares of Jaguar common stock immediately following the consummation of the merger, which contingent right will vest if the subsequent resale of certain shares of Jaguar common stock ("the Tranche A Shares") issued by Jaguar to Nantucket Investments Limited ("Nantucket") in the Napo litigation debt settlement provides Nantucket with specified cash returns upon the subsequent sale of their Tranche A shares to third parties over a specified period of time, (ii) existing creditors of Napo will be issued in the aggregate approximately 43 million shares of Jaguar non-voting common stock and 2 million shares of Jaguar voting common stock in full satisfaction of all existing indebtedness then owed by Napo to such creditors and (iii) an existing Napo stockholder will be issued an aggregate of approximately 3.2 million of Jaguar common stock in return for $3 million of new funds invested into Jaguar by such investor, which will be immediately loaned to Napo to partially facilitate the extinguishment of the Nantucket debt in Napo. At closing, it is contemplated that unless consented to or waived by Jaguar, Napo will have no more than $11.3 million in secured and unsecured debt for monies borrowed, $6.2 million of trade payables and certain other debt, excluding transaction expenses and Napo's cash at closing shall be no less than $0.5 million. On completion, Jaguar’s name will be changed to Jaguar Health, Inc. In case of termination, Jaguar will issue 2 million shares of its restricted common stock to Napo. The Board of Directors and executive management of Jaguar is expected to remain unchanged following the transaction. Lisa A. Conte, founder, Chief Executive Officer and President of Jaguar, James Bochnowski, Chairman of Jaguar, Folkert W. Kamphuis, John Micek III, and Ari Azhir, Directors of Jaguar, Jiahan Qui and Zhi Yang, Board members of Jaguar will be the Directors of the combined company at closing of the transaction. Lisa A. Conte will operate as Interim Chief Executive Officer and Secretary and Karen Wright will operate as Chief Financial Officer and Treasurer. The transaction is subject approval from the respective Boards of Directors of Jaguar and Napo, approval from the shareholders of each company, approval of special committee, execution of the escrow agreement, Napo's cash at closing shall be no less than $0.5 million, consummation of due diligence, government approval, approval of creditors, Form S-4 shall have been declared effective by the SEC under the Securities Act, execution of investor rights agreement, amendment to Certificate of Incorporation, listing of new shares on the NASDAQ, third party approval, approval of Nasdaq Stock Market and other customary conditions. As of February 8, 2017, the transaction was approved by the Board of Directors of Jaguar and Napo. A special committee of Jaguar Animal Health has been formed to review the transaction. Transaction is expected to close during the second quarter of 2017. As of July 6, 2017, Jaguar has filed with the Securities and Exchange Commission a registration statement on Form S-4 that includes a definitive joint proxy statement/prospectus for Jaguar’s stockholders and the registration statement was declared effective by the SEC. As of July 27, 2017, the stockholders of both companies approved the transaction. The transaction is expected to close on July 31, 2017. Stifel Nicolaus & Company, Incorporated acted as financial advisor to Jaguar on the deal. Garth Russell of KCSA Strategic Communications acted as public relations advisor in the transaction. Donald Reinke of Reed Smith LLP acted as legal advisor to Jaguar Animal Health. William S. Ohlemeyer of Boies Schiller Flexner acted as legal advisor to Napo Pharmaceuticals. John Kane, Randi Strudler of Jones Day acted as a legal advisor of Invesco Advisers. Napo Pharmaceuticals, Inc. completed the acquisition of Jaguar Animal Health, Inc. (NasdaqCM:JAGX) in a reverse merger transaction on July 31, 2017. The surviving entity named Jaguar Health, Inc. will continue to operate under the ticker "JAGX".