Business Context and Reporting Period
This Form 8-K was filed by Oxbridge Re Holdings Ltd on August 11, 2021. The filing reports on a material definitive agreement entered into by the Company's wholly-owned subsidiary, Oxbridge Reinsurance Limited ("OXRE"), regarding an investment in a special purpose acquisition company ("SPAC") named Oxbridge Acquisition Corp.
Key Financial Metrics and Transaction Details
- Transaction Type: Share Purchase Agreement to acquire equity interest in OAC Sponsor Ltd.
- Purchase Price: $2,000,000 aggregate purchase price paid by OXRE.
- Assets Acquired: 1,500,000 ordinary shares and 3,094,999 preferred shares of the Sponsor.
- Related SPAC IPO: Oxbridge Acquisition Corp. closed an IPO on August 16, 2021, selling 11,500,000 Units at $10.00 per unit for gross proceeds of $115,000,000.
- Private Placement: The Sponsor purchased 4,897,500 Private Placement Warrants at $1.00 per warrant ($4,897,500 total).
- Ownership Structure: Prior to the purchase, OXRE held approximately 34.7% of the Sponsor's risk capital. The Company's executive officers and Oxbridge Acquisition's directors collectively own approximately 29% of the Sponsor's ordinary shares.
Material Changes
The filing discloses a strategic expansion into the SPAC market. OXRE acquired a controlling equity interest in the Sponsor of Oxbridge Acquisition Corp. for $2,000,000. This transaction consolidates the Company's indirect investment in the SPAC, aligning the ownership of the Sponsor's preferred shares (linked to warrant proceeds) and ordinary shares (linked to Class B shares of the SPAC) under OXRE's direct control.
Outlook, Risks, and Contingencies
Management Commentary: The Company's executive officers will serve as the management team for Oxbridge Acquisition Corp. The preferred shares acquired generally entitle holders to net proceeds from the sale or exercise of Private Placement Warrants, while ordinary shares are equivalent in value to the Class B shares held by the Sponsor.
Risks and Contingencies: The filing notes that the description of the Share Purchase Agreement is summary in nature and qualified by the full text, which will be filed in the subsequent Form 10-Q. The value of the investment is contingent upon the future performance of Oxbridge Acquisition Corp. and the realization of proceeds from warrant exercises or dispositions.
Investor Verification Checklist
- Verify the full text of the Share Purchase Agreement in the upcoming Form 10-Q for the quarter ended September 30, 2021.
- Confirm the closing details and final capitalization of Oxbridge Acquisition Corp. following the August 16, 2021 IPO.
- Monitor the status of the 4,897,500 Private Placement Warrants and potential exercise activity.
- Review the Company's consolidated financial statements for the impact of the $2,000,000 cash outflow and subsequent valuation of the Sponsor equity interest.