Filing summary
Entity and period: The supplied filing is Oxbridge Acquisition Corp.’s unaudited Form 10-Q for the quarter ended September 30, 2021—not a Jet.AI Inc. filing. Oxbridge was a newly formed SPAC incorporated to pursue a business combination. It reported no operating activity or revenue through the period; its reported activity related to formation and its August 2021 IPO.
Financial results and position
- Revenue and profit: No operating revenue. Net income was $60,246 for the three months ended September 30, 2021, and $56,869 from inception through September 30. The quarterly result included $92,546 of warrant-liability fair-value income, offset by $32,497 of formation and administrative expenses; inception-to-date expenses were $35,874. Basic and diluted earnings per share were $0.004.
- Cash flow: Inception-to-date operating cash flow was positive $20,847, investing cash flow was negative $116.725 million (funds placed in trust), and financing cash flow was positive $117.361 million. Ending cash outside the trust was $656,562.
- Liquidity and assets: Total assets were $117.382 million, including $116.725 million held in trust. Management reported approximately $600,000 of working capital and believed available working capital and borrowing capacity would cover needs through the earlier of a business combination or one year from filing.
- Liabilities and equity: Total liabilities were $7.602 million, including $4.025 million of deferred underwriting commissions and $3.520 million of derivative warrant liabilities. Shareholders’ equity was $5.000 million; 10,323,161 Class A shares, valued at $104.780 million, were classified as temporary equity because of possible redemption.
- Capitalization: The IPO and full over-allotment raised $115 million gross from 11.5 million units at $10 each. The company also raised $5.760 million from private-placement warrants. It placed $116.725 million in trust. No working-capital loans were outstanding.
- Margins and debt: Operating margins are not meaningful because the company had no revenue. The filing reports no long-term debt obligations.
Changes and outlook
- This is a newly formed company with no comparable prior-year operating period presented; the filing gives inception-to-date results alongside the quarter.
- Management expected increased public-company compliance and due-diligence costs. It intended to use funds outside trust for expenses and the search for a business-combination target. No target or transaction guidance is provided.
- The company had 15 months after the August 16, 2021 IPO to complete a business combination, with a possible extension to 21 months. If it failed to complete a transaction within the applicable period, it would cease operations and redeem public shares, subject to the filing’s terms.
- COVID-19 could adversely affect the company’s financial position or target search, but management said the effect could not be determined. Warrant liabilities are Level 3 estimates and are remeasured each reporting period, so fair-value changes can affect reported earnings without corresponding operating cash flow.
- Public shareholders may redeem shares in connection with a business combination. Warrants may expire worthless if no transaction is completed. The sponsor may provide working-capital loans but is not obligated to do so.
- Management reported effective disclosure controls as of September 30, 2021, with no material changes in internal control during the quarter. No legal proceedings were reported.
Investor facts to verify
- Confirm the filing belongs to Oxbridge Acquisition Corp., not Jet.AI Inc., before relying on it for Jet.AI analysis.
- Verify the business-combination deadline: the filing states 15 months from the August 16, 2021 IPO, but its MD&A also gives November 16, 2023 as the deadline. Those dates appear inconsistent; the filing text does not clearly reconcile them.
- Review the terms and accounting valuation of the 17.260 million public and private warrants, including potential dilution and future fair-value effects.
- Assess the amount of public-share redemptions, trust proceeds available at any transaction, and the company’s ability to fund expenses outside the trust.
- Review the sponsor’s indemnity and deferred underwriting commission terms, as well as the risks of failing to complete a business combination.