Business context and reporting period
The supplied filing is Oxbridge Acquisition Corp.’s unaudited Form 10-Q for the quarter ended June 30, 2021—not a Jet.AI Inc. filing. Oxbridge was a newly formed Cayman Islands SPAC seeking a business combination; it had not begun operations by June 30. The financial statements cover April 12, 2021 (inception) through June 30, 2021, so there is no comparable prior-year period.
Financial results and condition
- Revenue and profit: No revenue. Net loss was $3,377, consisting of formation and general and administrative expenses. Basic and diluted loss per share was reported as $0.00.
- Assets and liquidity at June 30: Total assets were $199,043, including $800 of prepaid expenses and $198,243 of deferred offering costs. Cash was zero; working capital deficit was $176,620.
- Debt and equity: A $177,420 non-interest-bearing sponsor promissory note was outstanding at quarter-end. Shareholders’ equity was $21,623. The note was repaid in full on August 19, 2021.
- Cash flow: Net cash used in operating activities was $202,420, offset by $202,420 of financing cash flows, including sponsor-note proceeds and $25,000 from founder-share issuance.
- Margins and other metrics: Operating margins are not meaningful because the company had no operations or revenue. No long-term debt or off-balance-sheet arrangements were reported at June 30.
Material changes and subsequent events
After quarter-end, Oxbridge completed its IPO on August 16, 2021: 11.5 million units at $10 each, generating $115 million gross proceeds. It also sold 5.76 million private placement warrants for $5.76 million. The filing reports $116.725 million deposited in the trust account. Following the IPO, it had approximately $1.5 million in its operating account and approximately $639,000 of working capital. The underwriters exercised the over-allotment option in full, so 375,000 founder shares were no longer subject to forfeiture.
Outlook, risks, and unusual items
- Management said available working capital and borrowing capacity should cover needs through the earlier of a business combination or one year from the filing. Funds were expected to support the target search, due diligence, and transaction costs.
- The SPAC had 15 months from the IPO closing to complete a business combination, with an extension option of up to six months. If it fails, public shares are to be redeemed from the trust account, subject to stated terms and applicable law.
- Management noted that COVID-19 could adversely affect the company or its target search, but the impact was not determinable. No financial-statement adjustment was made for this uncertainty.
- Warrants issued after quarter-end are expected to be accounted for as derivative liabilities and remeasured at fair value, with changes recognized in earnings. Warrants may expire worthless if no business combination is completed.
- The filing states disclosure controls were effective as of June 30, with no material change in internal control reported. No legal proceedings were reported.
Important facts for investors to verify
- Confirm the issuer: this document identifies Oxbridge Acquisition Corp., not Jet.AI Inc.
- Reconcile the filing’s conflicting incorporation dates: the notes state April 12, 2021, while the MD&A overview says July 31, 2020.
- Review post-IPO trust-account funding, offering costs, deferred underwriting commissions, and the terms and accounting treatment of the warrants.
- Assess the SPAC’s ability to identify and complete a business combination before the deadline, as well as redemption and liquidation terms.
- Note that the company marked “No” for having filed all required reports during the preceding 12 months; investors should verify the reporting-history context.