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As
filed with the Securities and Exchange Commission on March [__], 2023
Registration
Statement No. 333-__________
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-4
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
OXBRIDGE
ACQUISITION CORP.*
(Exact
name of registrant as specified in its charter)
Cayman
Islands* |
|
6770 |
|
98-1615951 |
(State
or other jurisdiction of
incorporation or organization) |
|
(Primary
Standard Industrial
Classification Code Number) |
|
(I.R.S.
Employer
Identification Number) |
Suite
201, 42 Edward Street
Georgetown,
Grand Cayman
P.O. Box 469, KY1-9006
Cayman
Islands
(345) 749-7570
(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Jay
Madhu
Chairman
& Chief Executive Officer
Suite 201, 42 Edward Street
Georgetown,
Grand Cayman
P.O.
Box 469, KY1-9006
Cayman
Islands
(345)
749-7570
(Name,
address, including zip code, and telephone number, including area code, of agent for service)
Copies
to: |
Kate
L. Bechen
Andrew
T. Frost
Dykema Gossett PLLC
111
E. Kilbourn Ave.
Suite
1050
Milwaukee, WI 53202
(414) 488-7300 |
Stephen
M. Cohen
Loren
D. Danzis
Lauren
W. Taylor
Fox
Rothschild LLP
2000
Market Street
20th
Floor
Philadelphia,
PA 19103
(215)
299-2150 |
Approximate
date of commencement of proposed sale of the securities to the public:
As
soon as practicable after this Registration Statement becomes effective and on completion of the business combination described in the
enclosed proxy statement/prospectus.
If
the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. ☐
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
☐
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
Large
accelerated filer |
|
☐ |
|
Accelerated
filer |
|
☐ |
|
Non-accelerated
filer |
|
☒ |
|
Smaller
reporting company |
|
☒ |
|
|
|
|
|
Emerging
growth company |
|
☒ |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
If
applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange
Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐
Exchange
Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐
*
Prior to the consummation of the Business Combination described herein, the Registrant intends to effect a deregistration under Article
206 of the Cayman Islands Companies Act (As Revised) and a domestication under Section 388 of the Delaware General Corporation
Law, pursuant to which the Registrant’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware
(the “Domestication”). All securities being registered will be issued by Oxbridge (after its domestication as a corporation
incorporated in the State of Delaware), the continuing entity following the Domestication, which will be renamed “Jet.AI
Inc.” upon the effective time of the Domestication.
The
Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933, or until this Registration Statement shall become effective on such date
as the U.S. Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The
information in this preliminary proxy statement/prospectus is not complete and may be changed. The securities described herein may not
be sold until the registration statement filed with the U.S. Securities and Exchange Commission is declared effective. This preliminary
proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.
PRELIMINARY
PROXY STATEMENT/PROSPECTUS
SUBJECT
TO COMPLETION, DATED MARCH [__], 2023
PROXY
STATEMENT FOR
EXTRAORDINARY
GENERAL MEETING OF OXBRIDGE ACQUISITION CORP.
PROSPECTUS
FOR
[_____]
SHARES OF COMMON STOCK, PAR VALUE $0.0001 PER SHARE
[_____]
MERGER CONSIDERATION WARRANTS, EACH EXERCISABLE FOR ONE SHARE OF COMMON STOCK AND
[_____]
WARRANTS, EACH EXERCISABLE FOR ONE SHARE OF COMMON STOCK
(AFTER
ITS DOMESTICATION AS A
CORPORATION
INCORPORATED IN THE STATE OF DELAWARE, WHICH WILL
BE
RENAMED “JET.AI INC.” IN CONNECTION WITH THE BUSINESS
COMBINATION
DESCRIBED HEREIN)
The
board of directors of Oxbridge Acquisition Corp., a Cayman Islands exempted company (“Oxbridge” and, after the Domestication
and Business Combination as described below, “Jet.AI Inc.”), has unanimously approved (a) the domestication of Oxbridge as
a Delaware corporation (the “Domestication”) and (b) the Business Combination Agreement and Plan of Reorganization, dated
as of February 24, 2023 (the “Business Combination Agreement”), by and among Oxbridge, OXAC Merger Sub I, Inc., a Delaware
corporation and a direct wholly owned subsidiary of Oxbridge (“First Merger Sub”), Summerlin Aviation LLC (f/k/a OXAC
Merger Sub II, LLC), a Delaware limited liability company and a direct wholly owned subsidiary of Oxbridge (“Second Merger
Sub”), and Jet Token, Inc., a Delaware corporation (“Jet Token”), a copy of which is attached to this proxy statement/prospectus
as Annex A.
In
connection with the Domestication, prior to the closing of the Business Combination (as defined below): (a) each then issued and outstanding
Class A ordinary share, par value $0.0001, of Oxbridge (the “Class A Ordinary Shares”) will convert automatically,
on a one-for-one basis, into a share of common stock, par value $0.0001, of Jet.AI (the “Jet.AI Common Stock”), (b)
each then issued and outstanding Class B ordinary share, par value $0.0001, of Oxbridge (the “Class B Ordinary Shares”),
will convert automatically, on a one-for-one basis, into a share of Jet.AI Common Stock; (c) each then issued and outstanding
warrant of Oxbridge (the “Oxbridge Warrants”) will convert automatically into a warrant to purchase one share of Jet.AI
Common Stock (the “Jet.AI Warrants”), pursuant to that certain warrant agreement by and between Oxbridge and Continental
Stock Transfer & Trust Company; (d) each then issued and outstanding unit of Oxbridge (the “Oxbridge Units”) will convert
automatically into a unit of Jet.AI (the “Jet.AI Units”), each consisting of one share of Jet.AI Common Stock and
one Jet.AI Warrant; and (e) after its Domestication, Oxbridge will immediately be renamed “Jet.AI Inc.”
Promptly
following the consummation of the Domestication, pursuant to the Business Combination Agreement, (a) First Merger Sub will merge with
and into Jet Token (the “First Merger”), with Jet Token surviving the merger as a wholly owned subsidiary of Jet.AI (the
time at which the First Merger becomes effective, the “Effective Time”), and (b) as soon as practicable, but in any event
within three days following the Effective Time and as part of the same overall transaction as the First Merger, Jet Token (as the surviving
entity of the First Merger) will merge with and into Second Merger Sub (the “Second Merger” and, together with the First
Merger and all other transactions contemplated by the Business Combination Agreement, the “Business Combination”), with Second
Merger Sub surviving the merger as a wholly owned subsidiary of Jet.AI.
At
the Effective Time, (a) each outstanding share of Jet Token’s common stock, par value $0.0000001 per share (the “Jet
Token Common Stock”), including each share of Jet Token’s Series Seed Preferred Stock and Series CF Non-Voting Preferred
Stock (collectively, the “Jet Token Preferred Stock”) that will be converted into shares of Jet Token Common Stock immediately
prior to the Effective Time, will be cancelled and automatically converted into the right to receive (x) a number of shares of
Jet.AI Common Stock and (y) a warrant (each, a “Merger Consideration Warrant”) to acquire a number
of shares of Jet.AI Common Stock (the “Per Share Warrant Merger Consideration”), in each case equal to the
applicable exchange ratio (determined in accordance with the Business Combination Agreement and as further described in this proxy statement/prospectus);
(b) each option to purchase shares of Jet Token Common Stock (the “Jet Token Options”), whether or not exercisable and whether
or not vested, that is outstanding immediately prior to the Effective Time will automatically be converted into an option to purchase
a number of shares of Jet.AI Common Stock (each a “Jet.AI Option”) based on the applicable exchange ratio and at
a specified price (determined in accordance with the Business Combination Agreement and as further described in this proxy statement/prospectus);
(c) each warrant to purchase shares of Jet Token Common Stock (the “Jet Token Warrants”) issued and outstanding immediately
prior to the Effective Time shall be automatically converted into a warrant to acquire (x) a number of shares of Jet.AI Common Stock
and (y) a Merger Consideration Warrant to acquire a number of shares of Jet.AI Common Stock, in each case based on the applicable
exchange ratio and at a specified price (each determined in accordance with the Business Combination Agreement and as further described
in this proxy statement/prospectus); and (d) each restricted stock unit award of Jet Token (the “Jet Token RSU Awards”) that
is outstanding immediately prior to the Effective Time will be converted into an award (the “Jet.AI RSU Awards”) with respect
to a number of RSUs based on the applicable exchange ratio and at a specified price (determined in accordance with the Business
Combination Agreement and as further described in this proxy statement/prospectus). See the section entitled “The Business Combination”
of this proxy statement/prospectus for further information on the consideration being paid to the stockholders of Jet Token.
This
prospectus covers [_____] shares of Jet.AI Common Stock (including Class A Ordinary Shares, Class B Ordinary Shares, Jet Token
Common Stock and Jet Token Preferred Stock that will convert into shares of Jet.AI Common Stock in connection with the
Business Combination, and shares issuable upon exercise or vesting of the Jet.AI Warrants, the Merger Consideration Warrants, the Jet.AI
RSU Awards and the Jet.AI Options), [17,260,000] Jet.AI Warrants, and 7,353,000 Merger Consideration Warrants that may be issued
after such date pursuant to the terms of the Business Combination described herein. The number of shares of Jet.AI Common Stock
that this prospectus covers represents the maximum number of shares that may be issued to holders of shares of Jet Token Common Stock,
Jet Token Warrants, Jet Token RSU Awards and Jet Token Options in connection with the Business Combination (as more fully described in
this proxy statement/prospectus), together with the shares issued or issuable to the existing holders of Oxbridge Units, Class A Ordinary
Shares, Class B Ordinary Shares and Oxbridge Warrants in connection with the Domestication and Business Combination.
The
Oxbridge Units, Class A Ordinary Shares and Oxbridge Warrants are currently listed on Nasdaq under the symbols “OXACU,” “OXAC”
and “OXACW,” respectively. Oxbridge intends to apply to list the shares of Jet.AI Common Stock, the Jet.AI Warrants and the Merger Consideration Warrants on Nasdaq under the symbols “PJ,” “PJAIW” and “PJAIZ,”
respectively, upon the closing of the Business Combination.
This
proxy statement/prospectus provides shareholders of Oxbridge with detailed information about the Business Combination and other matters
to be considered at the extraordinary general meeting of Oxbridge. We encourage you to read this entire document, including the annexes
and other documents referred to herein, carefully and in their entirety. You should also carefully consider the risk factors described
in the section entitled “Risk Factors” beginning on page 39 of this proxy statement/prospectus.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED OF THE TRANSACTIONS DESCRIBED
IN THIS PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED
UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A
CRIMINAL OFFENSE.
This
proxy statement/prospectus is dated , 2023, and
is first being mailed to Oxbridge’s shareholders on or about , 2023
OXBRIDGE
ACQUISITION CORP.
Suite
201, 42 Edward Street
George
Town, Grand Cayman
KY1-9006,
Cayman Islands
Dear
Shareholders of Oxbridge:
You
are cordially invited to attend the extraordinary general meeting of Oxbridge Acquisition Corp., a Cayman Islands exempted company (“Oxbridge”
and, after the Domestication and Business Combination, as described below, “Jet.AI”), which will be held in person on [______,
2023], at [______], Eastern time, at [______________________________], or such other date, time and place to which such meeting may be
adjourned.
At
the extraordinary general meeting, Oxbridge will ask its shareholders to consider and vote upon a proposal to approve by ordinary resolution
and adopt the Business Combination Agreement and Plan of Reorganization, dated as of February 24, 2023 (the “Business Combination
Agreement” and, such proposal, the “Business Combination Proposal”), by and among Oxbridge, OXAC Merger Sub I, Inc.,
a Delaware corporation and a direct wholly owned subsidiary of Oxbridge (“First Merger Sub”), Summerlin Aviation LLC (f/k/a
OXAC Merger Sub II, LLC), a Delaware limited liability company and a direct wholly owned subsidiary of Oxbridge (“Second
Merger Sub”), and Jet Token, Inc., a Delaware corporation (“Jet Token”), a copy of which is attached to the accompanying
proxy statement/prospectus as Annex A. The Business Combination Agreement provides for, among other things, following the domestication
of Oxbridge as described below, (a) the merger of First Merger Sub with and into Jet Token (the “First Merger”), with Jet
Token surviving the merger as a wholly owned subsidiary of Jet.AI (the time at which the First Merger becomes effective, the “Effective
Time”), and (b) as soon as practicable, but in any event within three days following the Effective Time and as part of the same
overall transaction as the First Merger, the merger of Jet Token (as the surviving entity of the First Merger) with and into Second Merger
Sub (the “Second Merger” and, together with the First Merger and all other transactions contemplated by the Business Combination
Agreement, the “Business Combination”), with Second Merger Sub surviving the merger as a wholly owned subsidiary of Jet.AI.
As
a condition to the consummation of the Business Combination, the board of directors of Oxbridge has unanimously approved, and Oxbridge
will ask its shareholders to consider and vote upon a proposal to approve by special resolution under Cayman Islands law, a change of
Oxbridge’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating
as a corporation incorporated under the laws of the State of Delaware (the “Domestication”).
In
connection with the Domestication, prior to the closing of the Business Combination: (a) each then issued and outstanding Class A ordinary
share, par value $0.0001 of Oxbridge (the “Class A Ordinary Shares”) will convert automatically, on a one-for-one
basis, into a share of common stock, par value $0.0001, of Jet.AI (the “Jet.AI Common Stock”), (b) each then issued
and outstanding Class B ordinary share, par value $0.0001 of Oxbridge (the “Class B Ordinary Shares”), will convert
automatically, on a one-for-one basis, into a share of Jet.AI Common Stock; (c) each then issued and outstanding warrant of Oxbridge
(the “Oxbridge Warrants”) will convert automatically into a warrant to purchase one share of Jet.AI Common Stock (the
“Jet.AI Warrants”), pursuant to that certain warrant agreement by and between Oxbridge and Continental Stock Transfer &
Trust Company; (d) each then issued and outstanding unit of Oxbridge (the “Oxbridge Units”) will convert automatically into
a unit of Jet.AI (the “Jet.AI Units”), each consisting of one share of Jet.AI Common Stock and one Jet.AI Warrant;
and (e) after its Domestication, Oxbridge will immediately be renamed “Jet.AI Inc.” For additional information about the
Domestication, please see the section entitled “Proposal No. 2 — The Domestication Proposal” in the accompanying proxy
statement/prospectus.
At
the Effective Time, (a) each outstanding share of Jet Token’s Common Stock, par value $0.0000001 per share (the “Jet Token
Common Stock”), including each share of Jet Token’s Series Seed Preferred Stock and Series CF Non-Voting Preferred Stock
(collectively, the “Jet Token Preferred Stock”) that will be converted into shares of Jet Token Common Stock immediately
prior to the Effective Time, will be cancelled and automatically converted into the right to receive (x) a number of shares of
Jet.AI Common Stock and (y) a warrant (each, a “Merger Consideration Warrant”) to acquire a number
of shares of Jet.AI Common Stock (the “Per Share Warrant Merger Consideration”), in each case equal to the
applicable exchange ratio (determined in accordance with the Business Combination Agreement and as further described in this proxy statement/prospectus);
(b) each option to purchase shares of Jet Token Common Stock (the “Jet Token Options”), whether or not exercisable and whether
or not vested, that is outstanding immediately prior to the Effective Time will automatically be converted into an option to purchase
a number of shares of Jet.AI Common Stock (each a “Jet.AI Option”) based on the applicable exchange ratio and at
a specified price (determined in accordance with the Business Combination Agreement and as further described in this proxy statement/prospectus);
(c) each warrant to purchase shares of Jet Token Common Stock (the “Jet Token Warrants”) issued and outstanding immediately
prior to the Effective Time shall be automatically converted into a warrant to acquire (x) a number of shares of Jet.AI Common Stock
and (y) a Merger Consideration Warrant to acquire a number of shares of Jet.AI Common Stock, in each case based on the applicable
exchange ratio and at a specified price (each determined in accordance with the Business Combination Agreement and as further described
in this proxy statement/prospectus); and (d) each restricted stock unit award of Jet Token (the “Jet Token RSU Awards”) that
is outstanding immediately prior to the Effective Time will be converted into an award (the “Jet.AI RSU Awards”) with respect
to a number of RSUs based on the applicable exchange ratio and at a specified price (determined in accordance with the Business
Combination Agreement and as further described in this proxy statement/prospectus). See the section entitled “The Business Combination”
of this proxy statement/prospectus for further information on the consideration being paid to the stockholders of Jet Token.
In
addition to the Business Combination Proposal, Oxbridge’s shareholders will also be asked to consider and vote upon (a) a proposal
to approve by special resolution the change of Oxbridge’s jurisdiction of incorporation by deregistering as an exempted company
in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication
Proposal”); (b) a proposal to approve by special resolution the replacement of the Existing Organizational Documents and adoption
of the proposed certificate of incorporation (the “Proposed Certificate of Incorporation”) and the proposed new bylaws (the
“Proposed Bylaws”) of Jet.AI (the “Organizational Documents Proposal”); (c) ten separate proposals to
approve, on a non-binding advisory basis, by ordinary resolution, material differences between the Existing Organizational Documents
and the Proposed Certificate of Incorporation and the Proposed Bylaws of Jet.AI (collectively, the “Advisory Organizational Documents
Proposals”); (d) a proposal to approve by ordinary resolution and adopt the Jet.AI 2023 Omnibus Incentive Plan and material terms
thereunder, a copy of which is attached to the accompanying proxy statement/prospectus as Annex D (the “Omnibus Incentive
Plan Proposal”); (e) a proposal for the holders of Class B Ordinary Shares to elect, effective immediately after the Effective
Time, two directors to serve until the 2024 annual meeting of stockholders, two directors to serve until the 2025 annual
meeting of stockholders and three directors to serve until the 2026 annual meeting of stockholders, as applicable, or until
their respective successors are duly elected and qualified, subject to such directors’ earlier death, resignation, retirement,
disqualification or removal (the “Director Election Proposal”); and (f) a proposal to approve by ordinary resolution the
adjournment of the extraordinary general meeting to a later date or dates, if necessary or appropriate, to permit further solicitation
and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of one or more
proposals at the extraordinary general meeting (the “Adjournment Proposal” and, together with the Business Combination Proposal,
the Domestication Proposal, the Organizational Documents Proposal, the Advisory Organizational Documents Proposals, the Omnibus Incentive
Plan Proposal and the Director Election Proposal, the “Proposals”).
We
may not consummate the Business Combination unless and until the Business Combination Proposal, the Domestication Proposal, the Organizational
Documents Proposal, the Advisory Organizational Documents Proposals, the Omnibus Incentive Plan Proposal and the Director Election Proposal
(collectively, the “Condition Precedent Proposals”) are approved at the extraordinary general meeting. Each of the Condition
Precedent Proposals is cross-conditioned on the approval of each of the other Condition Precedent Proposals. The Adjournment Proposal
is not conditioned on the approval of any other proposal set forth in the accompanying proxy statement/prospectus. The approval of each
of the Business Combination Proposal, the Advisory Organizational Documents Proposals, the Omnibus Incentive Plan Proposal, and the Adjournment
Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote (in person, online or by proxy) of the
holders of a majority of the Class A Ordinary Shares and Class B Ordinary Shares entitled to vote and actually casting votes thereon
at the extraordinary general meeting, voting as a single class. Under the Existing Organizational Documents, only the holders of Class
B Ordinary Shares are entitled to vote on the election of directors and therefore the Director Election Proposal. Approval of the Domestication
Proposal and the Organizational Documents Proposal requires a special resolution under Cayman Islands law, being the affirmative vote
(in person, online or by proxy) of the holders of at least two-thirds of the Class A Ordinary Shares and Class B Ordinary Shares entitled
to vote and actually casting votes thereon at the extraordinary general meeting, voting as a single class.
Abstentions
and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary
general meeting. Accordingly, a shareholder’s failure to vote in person, online or by proxy at the extraordinary general meeting
or an abstention from voting, will have no effect on the outcome of the vote on any of the Proposals.
In
connection with the Business Combination, certain related agreements have been, or will be, entered into on or prior to the closing of
the Business Combination, including certain lock-up agreements.
Pursuant
to the Existing Organizational Documents, holders of Class A Ordinary Shares issued as part of the Oxbridge Units in the initial public
offering of Oxbridge (the “public shares” and, holders of such public shares, the “public shareholders”), other
than public shareholders that held Class B Ordinary Shares prior to such initial public offering (the “initial shareholders”),
may request that Oxbridge redeem all or a portion of such public shares for cash if the Business Combination is consummated. Holders
of Oxbridge Units must elect to separate the Oxbridge Units into the underlying Class A Ordinary Shares and Oxbridge Warrants prior to
exercising redemption rights with respect to the public shares. If public shareholders hold their Oxbridge Units in an account at a brokerage
firm or bank, such public shareholders must notify their broker or bank that they elect to separate the Oxbridge Units into the underlying
public shares and warrants, or if a holder holds Oxbridge Units registered in its own name, the holder must contact Continental Stock
Transfer & Trust Company, Oxbridge’s transfer agent, directly and instruct it to do so. The redemption rights include the requirement
that a holder must identify itself to Oxbridge in order to validly redeem its shares. Public shareholders (other than the initial
shareholders) may elect to redeem their public shares even if they vote “FOR” the Business Combination Proposal. If the
Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business
Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares
that it holds and timely delivers its shares to Continental Stock Transfer & Trust Company, Jet.AI will redeem such public shares
for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of Oxbridge’s
initial public offering relating to such public shares, calculated as of two business days prior to the consummation of the Business
Combination. For illustrative purposes, as of [_____________, 2023], this would have amounted to $10.89 per issued and outstanding
public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares
for cash and will no longer own public shares. The redemption will take place following the Domestication and, accordingly, it is shares
of Jet.AI Common Stock that will be redeemed immediately after consummation of the Business Combination. See the subsection entitled
“Extraordinary General Meeting — Redemption Rights” in the accompanying proxy statement/prospectus for a detailed description
of the procedures to be followed if you wish to redeem your public shares for cash.
Notwithstanding
the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public
shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended (“Exchange Act”)), will be restricted from redeeming its public shares with respect to more than an aggregate
of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than
15% of the public shares, then any such shares in excess of such 15% limit would not be redeemed for cash.
OAC
Sponsor Ltd., a Cayman Islands exempted company (the “Sponsor”), and Oxbridge’s officers and directors have agreed
to vote all of their Class A Ordinary Shares and Class B Ordinary Shares in favor of the Business Combination Agreement and the Business
Combination. Such shares will be excluded from the pro rata calculation used to determine the per-share redemption price applicable to
public shares that are redeemed. As of the date of the accompanying proxy statement/prospectus, the initial shareholders own approximately
[68.83%] of the issued and outstanding Class A Ordinary Shares and Class B Ordinary Shares in the aggregate.
The
Business Combination Agreement is subject to the satisfaction or waiver of certain other closing conditions as described in the accompanying
proxy statement/prospectus. There can be no assurance that the parties to the Business Combination Agreement would waive any such provision
of the Business Combination Agreement if the closing conditions are not met. In addition, our Amended and Restated Memorandum and
Articles of Association provide that in no event will Oxbridge redeem public shares in an amount that would cause Jet.AI’s
net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 after giving
effect to the transactions contemplated by the Business Combination Agreement.
Oxbridge
is providing the accompanying proxy statement/prospectus and accompanying proxy card to its shareholders in connection with the solicitation
of proxies to be voted at the extraordinary general meeting and at any adjournments of the extraordinary general meeting. Information
about the extraordinary general meeting, the Business Combination and other related business to be considered by Oxbridge’s shareholders
at the extraordinary general meeting is included in the accompanying proxy statement/prospectus. Whether or not you plan to attend
the extraordinary general meeting, all of Oxbridge’s shareholders are urged to read the accompanying proxy statement/prospectus,
including the annexes and other documents referred to therein, carefully and in their entirety. In particular, you should carefully consider
the matters discussed under “Risk Factors” beginning on page 39 of the accompanying proxy statement/prospectus.
After
careful consideration, the boards of directors of Oxbridge and Jet Token have each unanimously approved the Business Combination Agreement
and related transactions and the board of directors of Oxbridge has approved the other proposals described in this proxy statement/prospectus
and determined that it is advisable to consummate the Business Combination. The board of directors of Oxbridge recommends that its shareholders
vote “FOR” the approval of the Business Combination Agreement, “FOR” the Domestication, “FOR” the
issuance of Jet.AI Common Stock to be issued in connection with the Domestication and the Business Combination and “FOR”
the other Proposals described in the accompanying proxy statement/prospectus.
The
approval of the Business Combination Proposal, the Advisory Organizational Documents Proposals, the Omnibus Incentive Plan Proposal,
the Director Election Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative
vote (in person, online or by proxy) of the holders of a majority of the Class A Ordinary Shares and Class B Ordinary Shares entitled
to vote and actually casting votes thereon at the extraordinary general meeting, voting as a single class. Under the Existing Organizational
Documents, only the holders of Class B Ordinary Shares are entitled to vote on the election of directors and therefore the Director Election
Proposal. Approval of the Domestication Proposal and the Organizational Documents Proposal requires a special resolution under Cayman
Islands law, being the affirmative vote (in person, online or by proxy) of the holders of at least two-thirds of the Class A Ordinary
Shares and Class B Ordinary Shares entitled to vote and actually casting votes thereon at the extraordinary general meeting, voting as
a single class. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count
as votes cast at the extraordinary general meeting. Accordingly, a shareholder’s failure to vote in person, online or by proxy
at the extraordinary general meeting or an abstention from voting will have no effect on the outcome of the vote on any of the Proposals.
Your
vote is very important, regardless of the number of Class A Ordinary Shares and/or Class B Ordinary Shares you own. To ensure your
representation at the extraordinary general meeting, please complete, sign, date and return the enclosed proxy card in the postage-paid
envelope provided. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank
or other nominee, you should follow the instructions provided by your broker, bank or nominee to ensure that votes related to the shares
you beneficially own are properly counted. Please submit your proxy promptly, whether or not you expect to attend the extraordinary general
meeting.
If
you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals
presented at the extraordinary general meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other
nominee how to vote, and do not attend the extraordinary general meeting virtually or in person, the effect will be, among other things,
that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting and
will not be voted. An abstention or broker non-vote will be counted towards the quorum requirement but will not count as a vote cast
at the extraordinary general meeting. You can also attend the extraordinary general meeting and vote in person or online. Even if you
have previously voted by submitting a proxy pursuant to any of the methods noted above, you may withdraw your proxy and vote in person
or online.
More
information about Oxbridge, Jet Token and the proposed transactions is included in the accompanying proxy statement/prospectus. Oxbridge
urges you to read the accompanying proxy statement/prospectus, including the financial statements and annexes and other documents referred
to herein, carefully and in their entirety.
TO
EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS
HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO OXBRIDGE’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE
EXTRAORDINARY GENERAL MEETING. IN ORDER TO EXERCISE YOUR REDEMPTION RIGHT, YOU NEED TO IDENTIFY YOURSELF AS A BENEFICIAL HOLDER. YOU
MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY
USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED,
THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT
EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.
On
behalf of our board of directors, I thank you for your support and look forward to the successful completion of the Business Combination.
Sincerely,
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Jay
Madhu |
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Chairman,
Chief Executive Officer and President |
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The
accompanying proxy statement/prospectus is dated [ , 2023] and is first being mailed to the shareholders of Oxbridge on or about that
date.
NEITHER
THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED OF THE TRANSACTIONS
DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS OR ANY OF THE SECURITIES TO BE ISSUED IN THE BUSINESS COMBINATION OR THE OTHER TRANSACTIONS
DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS
OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES
A CRIMINAL OFFENSE.
OXBRIDGE
ACQUISITION CORP.
Suite
201, 42 Edward Street
George
Town, Grand Cayman
KY1-9006,
Cayman Islands
NOTICE
OF EXTRAORDINARY GENERAL MEETING
OF
OXBRIDGE ACQUISITION CORP.
To
Be Held On [ , 2023]
To
the Shareholders of Oxbridge Acquisition Corp.:
NOTICE
IS HEREBY GIVEN that an extraordinary general meeting (the “extraordinary general meeting”) of Oxbridge Acquisition Corp.,
a Cayman Islands exempted company (“Oxbridge,” “we,” “our,” “us” or the “Company”
and, after the Domestication and Business Combination, as described below, “Jet.AI”), will be held in person on [ , 2023],
at [ ], Eastern time, at [ ], or at such other date, time and place to which such meeting may be adjourned. At the extraordinary general
meeting, Oxbridge shareholders will be asked to consider and vote upon the following proposals:
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Proposal
No. 1 — The Business Combination Proposal — To consider and vote upon a proposal to (a) approve by ordinary resolution
and adopt the Business Combination Agreement and Plan of Reorganization, dated as of February 24, 2023 (the “Business Combination
Agreement”), by and among Oxbridge, OXAC Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of
Oxbridge (“First Merger Sub”), Summerlin Aviation LLC (f/k/a OXAC Merger Sub II, LLC), a Delaware limited
liability company and a direct wholly owned subsidiary of Oxbridge (“Second Merger Sub”), and Jet Token, Inc., a Delaware
corporation (“Jet Token”), pursuant to which (i) First Merger Sub will merge with and into Jet Token (the “First
Merger”), with Jet Token surviving the merger as a wholly owned subsidiary of Jet.AI (the time at which the First Merger becomes
effective, the “Effective Time”), and (ii) as soon as practicable, but in any event within three days following the Effective
Time and as part of the same overall transaction as the First Merger, Jet Token (as the surviving entity of the First Merger) will
merge with and into Second Merger Sub (the “Second Merger” and, together with the First Merger and all other transactions
contemplated by the Business Combination Agreement, the “Business Combination”), with Second Merger Sub surviving the
merger as a wholly owned subsidiary of Jet.AI, and (b) approve by ordinary resolution the Business Combination, including the issuance
and reservation for issuance of shares in connection therewith (such proposal, the “Business Combination Proposal”) (Proposal
No. 1). A copy of the Business Combination Agreement is attached to the accompanying proxy statement/prospectus as Annex A. |
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Proposal
No. 2 — The Domestication Proposal — To consider and vote upon a proposal to approve by special resolution, the change
of Oxbridge’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands pursuant to Article
47 of its Amended and Restated Memorandum and Articles of Association and continuing and domesticating as a corporation incorporated
under the laws of the State of Delaware (the “Domestication”) pursuant to Part XII of the Cayman Islands Companies
Act (As Revised) and Section 388 of the Delaware General Corporation Law (“DGCL”), and, immediately upon being de-registered
in the Cayman Islands, that Oxbridge be continued and domesticated as a corporation and, conditional upon, and with effect from,
the registration of Oxbridge as a corporation in the State of Delaware, the name of Oxbridge be changed from “Oxbridge Acquisition
Corp.” to “Jet.AI Inc.” (such proposal, the “Domestication Proposal”) (Proposal No. 2). |
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Proposal
No. 3 — The Organizational Documents Proposal — To consider and vote upon a proposal to approve by special resolution
the replacement of the Amended and Restated Memorandum and Articles of Association of Oxbridge Acquisition Corp. (the “Existing
Organizational Documents”) with the proposed new certificate of incorporation (the “Proposed Certificate of Incorporation”)
and the proposed new bylaws (the “Proposed Bylaws” and, together with the Proposed Certificate of Incorporation, the
“Proposed Organizational Documents”) of Jet.AI, which, if approved, would take effect at the time of the Domestication
(such proposal, the “Organizational Documents Proposal”) (Proposal No. 3). |
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Proposal
No. 4 — The Advisory Organizational Documents Proposals — To consider and vote upon ten separate proposals
to approve, on a non-binding advisory basis, certain governance provisions in the Proposed Organizational Documents, which are being
presented separately in accordance with U.S. Securities and Exchange Commission guidance to give shareholders the opportunity to
present their separate views on important corporate governance provisions (collectively, the “Advisory Organizational Documents
Proposals”) (Proposal No. 4). |
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Proposal
No. 5 — The Omnibus Incentive Plan Proposal — To consider and vote upon a proposal to approve by ordinary resolution
and adopt the Jet.AI Inc. Omnibus Incentive Plan (the “Omnibus Incentive Plan”) and material terms thereunder (the “Omnibus
Incentive Plan Proposal”) (Proposal No. 5). A copy of the Omnibus Incentive Plan is attached to the accompanying proxy statement/prospectus
as Annex D. |
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Proposal
No. 6 — The Director Election Proposal — To consider and vote upon a proposal to elect, effective immediately after
the effective time of the Second Merger, two directors to serve until the 2024 annual meeting of stockholders, two
directors to serve until the 2025 annual meeting of stockholders and three directors to serve until the 2026
annual meeting of stockholders, as applicable, or until their respective successors are duly elected and qualified, subject
to such directors’ earlier death, resignation, retirement, disqualification or removal (the “Director Election Proposal”)
(Proposal No. 6). |
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Proposal
No. 7 — The Adjournment Proposal — To consider and vote upon a proposal to approve by ordinary resolution the adjournment
of the extraordinary general meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote
of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination
Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Advisory Organizational Documents Proposals, the
Omnibus Incentive Plan Proposal, or the Director Election Proposal (the “Adjournment Proposal” and, together with the
Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Advisory Organizational Documents
Proposals, the Omnibus Incentive Plan Proposal, and the Director Election Proposal, the “Proposals”) (Proposal No. 7). |
Each
of the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Advisory Organizational
Documents Proposals, the Omnibus Incentive Plan Proposal, and the Director Election Proposal (collectively, the “Condition Precedent
Proposals”) is cross-conditioned on the approval and adoption of each of the other Condition Precedent Proposals. The Adjournment
Proposal is not conditioned on the approval of any other Proposal set forth in the accompanying proxy statement/prospectus.
Only
holders of record of Class A ordinary shares, par value $0.0001 of Oxbridge (the “Class A Ordinary Shares”) and Class
B ordinary shares, par value $0.0001 of Oxbridge (the “Class B Ordinary Shares”) at the close of business
on [ , 2023] are entitled to notice of the extraordinary
general meeting and to vote at the extraordinary general meeting and any adjournments thereof.
Oxbridge
is providing the accompanying proxy statement/prospectus and accompanying proxy card to its shareholders in connection with the solicitation
of proxies to be voted at the extraordinary general meeting and at any adjournments of the extraordinary general meeting. Information
about the extraordinary general meeting, the Business Combination and other related business to be considered by Oxbridge’s shareholders
at the extraordinary general meeting is included in the accompanying proxy statement/prospectus. Whether or not you plan to attend
the extraordinary general meeting, all of Oxbridge’s shareholders are urged to read the accompanying proxy statement/prospectus,
including the annexes and other documents referred to therein, carefully and in their entirety. In particular, you should carefully consider
the matters discussed under “Risk Factors” beginning on page 39 of the accompanying proxy statement/prospectus.
After
careful consideration, the board of directors of Oxbridge has unanimously approved the Business Combination Agreement and related transactions
and the other Proposals described in this proxy statement/prospectus, and has determined that it is advisable to consummate the Business
Combination. The board of directors of Oxbridge recommends that its shareholders vote “FOR” the approval of the Business
Combination Agreement, “FOR” the Domestication, “FOR” the issuance of Jet.AI common stock, par value $0.0001
per share (“Jet.AI Common Stock”) to be issued in connection with the Domestication and the Business Combination and
“FOR” the other Proposals described in the accompanying proxy statement/prospectus.
Pursuant
to the Existing Organizational Documents, a holder of Class A Ordinary Shares issued as part of the units sold in Oxbridge’s initial
public offering (the “public shares” and, holders of such public shares the “public shareholders”), other than
public shareholders that held Class B Ordinary Shares prior to Oxbridge’s initial public offering (the “initial shareholders”)
may request that Oxbridge redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder
of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:
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(a) |
hold
public shares, or if you hold public shares through Oxbridge units sold in the initial public offering of Oxbridge (the “Oxbridge
Units”), you elect to separate your Oxbridge Units into the underlying public shares and warrants prior to exercising your redemption
rights with respect to the public shares; |
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(b) |
submit
a written request to Continental Stock Transfer & Trust Company, Oxbridge’s transfer agent, in which you (i) request that Jet.AI
redeem all or a portion of your public shares for cash, and (ii) identify yourself as the beneficial holder of the public shares and
provide your legal name, phone number and address; and |
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(c) |
deliver
your public shares to Continental Stock Transfer & Trust Company, Oxbridge’s transfer agent, physically or electronically through
The Depository Trust Company. |
Holders
must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern time,
on [ , 2023] (two business days before the extraordinary general meeting) in order for their shares to be redeemed.
Holders
of Oxbridge Units must elect to separate the units into the underlying Class A Ordinary Shares and warrants prior to exercising redemption
rights with respect to the public shares. If public shareholders hold their Oxbridge Units in an account at a brokerage firm or bank,
such public shareholders must notify their broker or bank that they elect to separate the units into the underlying public shares and
warrants, or if a holder holds Oxbridge Units registered in its own name, the holder must contact Continental Stock Transfer & Trust
Company, Oxbridge’s transfer agent, directly and instruct it to do so. The redemption rights include the requirement that a holder
must identify itself to Oxbridge in order to validly redeem its shares. Public shareholders (other than the initial shareholders)
may elect to redeem their public shares even if they vote “FOR” the Business Combination Proposal. If the Business Combination
is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated,
and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers
its shares to Continental Stock Transfer & Trust Company, Jet.AI will redeem such public shares for a per-share price, payable in
cash, equal to the pro rata portion of the trust account established at the consummation of Oxbridge’s initial public offering
relating to such public shares, calculated as of two business days prior to the consummation of the Business Combination. For illustrative
purposes, as of [ , 2023], this would have amounted
to $10.89 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be
electing to exchange its public shares for cash and will no longer own public shares. The redemption will take place following the Domestication
and, accordingly, it is shares of Jet.AI Common Stock that will be redeemed immediately after consummation of the Business Combination.
See the subsection entitled “Extraordinary General Meeting — Redemption Rights” in the accompanying proxy statement/prospectus
for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.
The
approval of the Business Combination Proposal, the Advisory Organizational Documents Proposals, the Omnibus Incentive Plan Proposal,
the Director Election Proposal, and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative
vote (in person, online or by proxy) of the holders of a majority of the Class A Ordinary Shares and Class B Ordinary Shares entitled
to vote and actually casting votes thereon at the extraordinary general meeting, voting as a single class. Under the Existing Organizational
Documents, only the holders of Class B Ordinary Shares are entitled to vote on the election of directors and therefore the Director Election
Proposal. Approval of the Domestication Proposal and the Organizational Documents Proposal requires a special resolution under Cayman
Islands law, being the affirmative vote (in person, online or by proxy) of the holders of at least two-thirds of the Class A Ordinary
Shares and Class B Ordinary Shares entitled to vote and actually casting votes thereon at the extraordinary general meeting, voting as
a single class. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count
as votes cast at the extraordinary general meeting. Accordingly, a shareholder’s failure to vote in person, online or by proxy
at the extraordinary general meeting or an abstention from voting will have no effect on the outcome of the vote on any of the Proposals.
YOUR
VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF ORDINARY SHARES OF OXBRIDGE YOU OWN. To ensure your representation at the extraordinary
general meeting, please complete and return the enclosed proxy card or submit your proxy by following the instructions maintained in
the accompanying proxy statement/prospectus and on your proxy card. Please submit your proxy promptly, whether or not you expect to attend
the meeting. If you hold your shares in “street name,” you should instruct your broker, bank or other nominee how to vote
in accordance with the voting instruction form you received from your broker, bank or other nominee.
The
board of directors of Oxbridge has unanimously approved the Business Combination Agreement and the transactions contemplated thereby
and recommends that you vote “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR”
the Organizational Documents Proposal, “FOR” the Advisory Organizational Documents Proposals, “FOR” the Omnibus
Incentive Plan Proposal, “FOR ALL NOMINEES” in the Director Election Proposal and “FOR” the Adjournment Proposal.
Your
attention is directed to the proxy statement/prospectus accompanying this notice (including the annexes thereto) for a more complete
description of the proposed Business Combination and related transactions and each of our Proposals. We encourage you to read the accompanying
proxy statement/prospectus carefully. If you have any questions or need assistance voting your shares, please call our proxy solicitor,
[●].
,
2023 |
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By
Order of the Board of Directors |
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Jay
Madhu |
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Chairman,
Chief Executive Officer and President |
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TABLE
OF CONTENTS
ADDITIONAL
INFORMATION
You
may request copies of this proxy statement/prospectus, without charge, by written or oral request to our proxy solicitor at:
[●]
To
obtain timely delivery of requested materials, you must request the documents no later than five business days prior to the date of the
extraordinary general meeting.
You
may also obtain additional information about us from documents filed with the SEC by following the instructions in the section entitled
“Where You Can Find Additional Information.”
CERTAIN
DEFINED TERMS
Unless
the context otherwise requires, references in this proxy statement/prospectus to:
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“Adjusted
Base Stock Merger Consideration” mean the quotient equal to (a) (i) $45,000,000 less (ii) Net Indebtedness as of the Closing
Date multiplied by 0.428571; and (b) $10.00; |
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“Business
Combination” are to the First Merger, the Second Merger and all other transactions contemplated by the Business Combination
Agreement; |
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“Business
Combination Agreement” are to that certain Business Combination Agreement and Plan of Reorganization, dated as of February
24, 2023, by and among Oxbridge, First Merger Sub, Second Merger Sub and Jet Token; |
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“Cayman Islands Companies Act” are to the
Companies Act (As Revised) of the Cayman Islands, as the same may be amended from time to time; |
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“Class
A Ordinary Shares” are to our Class A ordinary shares, par value $0.0001 per share; |
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“Class
B Ordinary Shares” are to our Class B ordinary shares, par value $0.0001 per share; |
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“Closing”
are to the closing of the Business Combination; |
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“Closing
Date” are to the date on which the Closing occurs; |
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“Code”
are to the Internal Revenue Code of 1986, as amended; |
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“Conversion”
are to the conversion of each share of Jet Token Preferred Stock into a number of shares of Jet Token Voting Common Stock immediately
prior to the Effective Time at the then-effective conversion rate as calculated pursuant to the Jet Token Charter; |
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“Effective
Time” are to the date and time at which the First Merger becomes effective; |
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“Existing
Organizational Documents” are to Oxbridge’s Amended and Restated Memorandum and Articles of Association of Oxbridge
Acquisition Corp. dated July 29, 2021 and effective as of August 11, 2021; |
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“extraordinary
general meeting” are to the extraordinary general meeting of Oxbridge that is the subject of this proxy statement/prospectus
and any adjournments thereof; |
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“First
Merger” are to the merger of First Merger Sub with and into Jet Token, with Jet Token surviving the merger as a wholly owned
subsidiary of Jet.AI; |
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“First
Merger Sub” are to OXAC Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of Oxbridge; |
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“Founder
Shares” are to the outstanding Class B Ordinary Shares; |
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“Historical
Rollover Shareholders” are to the holders of shares of Jet.AI Common Stock and Jet.AI Warrants that will be issued in
exchange for all outstanding shares of Jet Token Common Stock in the Business Combination; |
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“HSR
Act” are to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; |
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“Initial
Business Combination” are to Oxbridge’s initial merger, share exchange, asset acquisition, share purchase, reorganization
or similar business combination with one or more businesses after the Initial Public Offering. If consummated, the Business Combination
will constitute Oxbridge’s Initial Business Combination; |
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“Initial
Public Offering” or “IPO” are to Oxbridge’s initial public offering of units, which closed on August 16,
2021; |
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“initial
shareholders” are to the holders of our Founder Shares, which includes our Sponsor; |
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“IRS”
are to the Internal Revenue Service; |
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“Jet.AI”
are to (a) prior to giving effect to the Domestication and the Business Combination, Oxbridge, and (b) after giving effect to the
Domestication and the Business Combination, Jet.AI; |
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“Jet.AI
Common Stock” are to the shares of common
stock, par value $0.0001 per share, of Jet.AI (after the Domestication as a corporation in the State of Delaware); |
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“Jet.AI
Options” are to the options to purchase shares of Jet.AI Common Stock into which the Jet Token Options will convert
at the Effective Time; |
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“Jet.AI
Preferred Stock” are to the shares of preferred stock, par value $0.0001 per share, of Jet.AI; |
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“Jet.AI
Units” are to the units of Jet.AI, each consisting of one share of Jet.AI Common Stock and one Jet.AI Warrant, into
which the Oxbridge Units will convert upon consummation of the Domestication; |
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“Jet.AI
Warrants” are to the warrants to purchase shares of Jet.AI Common Stock into which the Oxbridge Warrants and Jet Token
Warrants will convert upon consummation of the Domestication and at the Effective Time, respectively, and which will be issued in
exchange for certain outstanding shares of Jet Token Common Stock in the Business Combination; |
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“Jet
Token” are to Jet Token, Inc., a Delaware corporation; |
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“Jet
Token Board” are to the board of directors of Jet Token; |
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“Jet
Token Charter” are to the Amended and Restated Certificate of Incorporation, as amended, of Jet Token dated December 12, 2019,
as the same may be amended, supplemented or modified from time to time; |
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“Jet
Token Common Stock” are to the Jet Token Voting Common Stock and the Jet Token Non-Voting Common Stock; |
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“Jet
Token Non-Voting Common Stock” are to the shares of Jet Token’s non-voting common stock, par value $0.0000001
per share; |
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“Jet
Token Options” are to all outstanding options to purchase shares of Jet Token Voting Common Stock or Jet Token Non-Voting Common
Stock, as applicable, whether or not exercisable and whether or not vested, immediately prior to the Closing under the Jet Token
Option Plans; |
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“Jet
Token Option Plans” are to the Jet Token, Inc. 2021 Stock Plan, adopted on August 20, 2021, and the Jet Token, Inc. Amended
and Restated 2018 Stock Option and Grant Plan, adopted on September 22, 2019, as each such Jet Token Option Plan may have been amended,
supplemented or modified from time to time; |
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“Jet
Token Outstanding Shares” are to the total number of shares of Jet Token Common Stock outstanding immediately prior to the
Effective Time, including, without limitation or duplication, (a) the number of shares of Jet Token Voting Common Stock issuable
upon conversion of the Jet Token Preferred Stock pursuant to the Conversion; |
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“Jet
Token Preferred Stock” are to the Jet Token Series Seed Preferred Stock and the Jet Token Series CF Non-Voting Preferred Stock; |
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“Jet
Token RSU Award” are to each Restricted Stock Unit Award of Jet Token granted, and that remains outstanding; |
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“Jet
Token Series CF Non-Voting Preferred Stock” are to the shares of Jet Token’s Preferred Stock designated as Series CF
Non-Voting Preferred Stock in the Jet Token Charter; |
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“Jet
Token Series Seed Preferred Stock” are to the shares of Jet Token’s Preferred Stock designated as Series Seed Preferred
Stock in the Jet Token Charter; |
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“Jet
Token Voting Common Stock” are to the shares of Jet Token’s Common Stock, par value $0.0000001 per share; |
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“Jet
Token Warrants” are to all outstanding warrants to acquire Jet Token Common Stock, whether or not exercisable, immediately
prior to the Closing; |
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“management”
or our “management team” are to our officers and directors; |
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“Maxim” are to Maxim Group, LLC; |
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“Merger
Consideration Warrant Count” are to the quotient equal to (a) (i) $60,000,000 less (ii) Net Indebtedness as of the Closing
Date multiplied by 0.571429 and (b) the Warrant Fair Market Value; |
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“Merger
Consideration Warrants” are to the warrants to purchase shares of Jet.AI Common Stock which will be issued at the Effective
Time in exchange for certain outstanding shares of Jet Token Common Stock and Jet Token RSU Awards; |
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“Nasdaq”
are to the Nasdaq Stock Market LLC; |
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“Net
Indebtedness” mean, at any specified time, Jet Token’s Indebtedness (as defined in the Business Combination Agreement)
less Jet Token’s cash and cash equivalents, which may be a positive or negative amount; |
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“Ordinary
Shares” are to the Class A Ordinary Shares and the Class B Ordinary Shares; |
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“Oxbridge”
are to Oxbridge Acquisition Corp., a Cayman Islands exempted company; |
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“Oxbridge
Board” are to the board of directors of Oxbridge; |
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“Oxbridge
Preference Shares” are to Oxbridge’s preference shares, par value $0.0001 per share; |
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“Oxbridge
Public Securities” are to Class A Ordinary Shares and Oxbridge Warrants; |
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“Oxbridge
Units” are to our units sold in the IPO, each of which consists of one Class A Ordinary Share and one public warrant; |
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“Oxbridge
Warrants” are to (a) prior to giving effect to the Domestication and the Business Combination, the public warrants and the
private placement warrants, and (b) after giving effect to the Domestication and the Business Combination, the warrants to purchase
shares of Jet.AI Common Stock that the public warrants and private placement warrants will convert into upon consummation
of the Domestication and the Business Combination; |
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“private
placement warrants” are to the warrants issued to Sponsor and Maxim Group, LLC,
the representative to the underwriters in our IPO, in a private placement simultaneously with the closing of our IPO; |
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“public
shareholders” are to the holders of our public shares; |
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“public
shares” are to our Class A Ordinary Shares sold as part of the Oxbridge Units in the IPO (whether they were purchased in the
IPO or thereafter in the open market); |
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“public
warrants” are to the warrants sold as part of the Oxbridge Units in the IPO (whether they were purchased in the IPO or thereafter
in the open market); |
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“Requisite
Jet Token Stockholder Approval” are to the affirmative vote or consent of (a) the holders of a majority of the outstanding
shares of Jet Token Voting Common Stock and Jet Token Series Seed Preferred Stock, voting together as a single class on an as-converted
basis and (b) with respect to the Conversion, the holders of a majority of the outstanding shares of Jet Token Series Seed Preferred
Stock, voting as a single class; |
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“SEC”
are to the U.S. Securities and Exchange Commission; |
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“Second
Merger” are to the merger of Jet Token (as the surviving entity of the First Merger) with and into Second Merger Sub, with
Second Merger Sub surviving the merger as a wholly owned subsidiary of Jet.AI; |
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“Second
Merger Sub” are to Summerlin Aviation LLC (f/k/a OXAC Merger Sub II, LLC), a Delaware limited liability company
and a direct wholly owned subsidiary of Oxbridge; |
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“Sponsor”
are to OAC Sponsor Ltd., a Cayman Islands exempted company; |
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“Stock
Exchange Ratio” means the ratio (rounded to six decimal places), which is the quotient obtained by dividing (i) the Adjusted
Base Stock Merger Consideration by (ii) Jet Token Outstanding Shares; |
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“Trust
Account” are to the trust account maintained by Continental Stock Transfer & Trust Company that holds the proceeds
(including interest not previously released to Oxbridge for working capital purposes) from the IPO and a concurrent private placement
of private placement warrants to our Sponsor and Maxim; |
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“U.S.
GAAP” are to the generally accepted accounting principles in the United States; |
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“Warrant
Agreement” are to the Warrant Agreement, dated August 11, 2021, between Oxbridge and Continental Stock Transfer & Trust
Company, as warrant agent; |
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“Warrant
Exchange Ratio” means the ratio (rounded to six decimal places) equal to the quotient obtained by dividing (i) the Merger Consideration
Warrant Count by (ii) Jet Token Outstanding Shares; and |
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“Warrant
Fair Market Value” means the fair market value of a Merger Consideration Warrant as determined using the Black-Scholes method
with the following inputs: (a) risk-free rate equal to the UST 10-year rate on the second Business Day immediately before the
Closing Date as published on
https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2023
(or if unavailable, as published by Bloomberg L.P.); (b) current stock price of $10.00; (c) exercise price of $15.00; (d) dividend
yield of 0.00%; (e) term of 10 years; and (f) stock price annualized standard deviation (volatility) equal to the average of the
most recent twenty (20) trading days of daily volatility of Wheels Up Experience Inc. through the second Business Day immediately
before the Closing Date, as determined using the volatility calculator available at
https://www.fintools.com/resources/online-calculators/volatilitycalc/ (or if such calculator is unavailable, using a volatility
calculator from Bloomberg L.P.); provided, however that if Wheels Up Experience Inc. (NYSE:UP) is acquired or has a material
transaction or event materially affecting its volatility during such 20-day period, then volatility shall be determined using the
average of the most recent 20 days of daily volatility preceding such transaction or event. |
Unless
otherwise specified, the voting and economic interests of Oxbridge shareholders set forth in this proxy statement/prospectus (a) assume
(i) that no public shareholders elect to have their public shares redeemed, (ii) that there are no other issuances of equity interests
of Oxbridge or Jet Token, (iii) none of Oxbridge’s initial shareholders or the Historical Rollover Shareholders purchase Class
A Ordinary Shares in the open market and (iv) that there are no exercises of Jet Token Options or Jet Token Warrants and (b) do not take
into account Oxbridge Warrants that will remain outstanding following the Business Combination and which may be exercised at a later
date.
SUMMARY
TERM SHEET
This
Summary Term Sheet, together with the sections entitled “Questions and Answers About the Business Combination” and “Summary
of the Proxy Statement/Prospectus,” summarizes certain information included in this proxy statement/prospectus, but does not include
all of the information that is important to you. You should carefully read this entire proxy statement/prospectus, including the attached
annexes, for a more complete understanding of the matters to be considered at the extraordinary general meeting.
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Oxbridge
is a blank check company incorporated on April 12, 2021 as a Cayman Islands exempted company for the purpose of effecting a merger,
share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. For
more information about Oxbridge, see the section entitled “Information About Oxbridge.” When you consider the Oxbridge
Board’s recommendation of the Proposals, you should keep in mind that our directors and officers have interests in the Business
Combination that are different from, or in addition to, the interests of Oxbridge shareholders generally. Our directors were aware
of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending to shareholders
that they approve the Business Combination. Shareholders should take these interests into account in deciding whether to approve
the Business Combination. See the subsection entitled “The Business Combination — Interests of Certain Persons in the
Business Combination” for additional information. The Oxbridge Board was aware of and considered these interests, among other
matters, in recommending that Oxbridge shareholders vote “FOR” each of the Proposals. |
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There
are currently 1,301,952 Class A Ordinary Shares and 2,875,000 Class B Ordinary Shares issued and outstanding. In addition, there
are currently 17,260,000 Oxbridge Warrants outstanding, consisting of 11,500,000 public warrants and 5,760,000 private placement
warrants. Each whole Oxbridge Warrant entitles the holder to purchase one whole Class A Ordinary Share for $11.50 per share. The
Oxbridge Warrants will become exercisable on the later of (a) 30 days after the completion of the Business Combination (or any other
Initial Business Combination) and (b) 12 months from the closing of our IPO and will expire five years after the completion of an
Initial Business Combination or earlier upon redemption or liquidation. Once the warrants become exercisable, Oxbridge may redeem
the outstanding warrants, in whole and not in part, for cash in accordance with, and subject to the terms of, the Warrant Agreement.
The private placement warrants, however, are non-redeemable so long as they are held by the initial purchasers or their permitted
transferees. For more information about the terms of the warrants, see the subsection entitled “Description of Securities —
Public Warrants.” |
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Jet
Token, a Delaware corporation, was founded in 2018 by Michael Winston, its Executive Chairman. Jet Token, directly and indirectly
through its subsidiaries, is principally involved in (i) the sale of fractional and whole interests in aircraft, (ii) the sale of
jet cards, which enable holders to use certain of Jet Token’s and other’s aircraft at agreed-upon rates, (iii) the operation
of a proprietary booking platform (the “App”), which functions as a prospecting and quoting platform to arrange private
jet travel with third party carriers as well as via Jet Token’s leased and managed aircraft, for Part 135 (whole aircraft charter)
and Part 380 (by the seat charter), and (iv) since January 2023, joint ownership, alongside its existing operating partner, Cirrus,
of 380 Software LLC, which supplies the technology to sell individual seats on empty legs on the Cirrus fleet of aircraft. For more
information about Jet Token, see the sections entitled “Information About Jet Token” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations of Jet Token.” |
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On
February 24, 2023, we and our wholly owned subsidiaries, First Merger Sub and Second Merger Sub, entered into the Business Combination
Agreement with Jet Token. A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex
A. |
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Pursuant
to the Business Combination Agreement, and subject to the terms and conditions contained therein, First Merger Sub will merge with
and into Jet Token, with Jet Token surviving the First Merger as a wholly owned subsidiary of Jet.AI, and as soon as practicable,
but in any event within three days following the Effective Time and as part of the same overall transaction as the First Merger,
Jet Token (as the surviving entity of the First Merger) will merge with and into Second Merger Sub, with Second Merger Sub surviving
the Second Merger as a wholly owned subsidiary of Jet.AI. For more information about the Business Combination Agreement and the Business
Combination, see the section entitled “The Business Combination.” |
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At
the Closing, it is anticipated that 4,500,000 shares of Jet.AI Common Stock and 7,353,000 Merger Consideration Warrants will
be issued to the Historical Rollover Shareholders in the Business Combination in exchange for all outstanding shares of Jet Token
Common Stock (including shares of Jet Token Preferred Stock converted in the Conversion). It is also anticipated that we will reserve
for issuance up to 3,270,278 shares of Jet.AI Common Stock in respect of Jet.AI Options issued in exchange for outstanding
pre-merger Jet Token Options, and 148,130 shares of Jet.AI Common Stock and 242,044 Merger Consideration Warrants in respect
of Jet.AI RSU Awards issued in exchange for outstanding pre-merger Jet Token RSU Awards. For more information about the Business
Combination Agreement and the Business Combination, see the section entitled “The Business Combination.” |
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Unless
lawfully waived by the parties to the Business Combination Agreement, the Closing is subject to a number of conditions set forth
in the Business Combination Agreement, including, among others, receipt of the requisite Oxbridge shareholder approval of the Business
Combination Agreement, the Business Combination and certain other proposals at the extraordinary general meeting, as contemplated
by this proxy statement/prospectus. For more information about the closing conditions to the Business Combination, see the subsection
entitled “The Business Combination — Conditions to Closing of the Business Combination Agreement.” |
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The
Business Combination Agreement may be terminated at any time prior to the consummation of the Business Combination upon agreement
of the parties thereto, or for other reasons in specified circumstances. For more information about the termination rights under
the Business Combination Agreement, see the subsection entitled “The Business Combination — Termination.” |
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The
proposed Business Combination involves numerous risks. For more information about these risks, please see the section entitled “Risk
Factors.” |
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Under
our Existing Organizational Documents, in connection with the Business Combination, our public shareholders may elect to have their
shares redeemed for cash at the applicable redemption price per share calculated in accordance with our Existing Organizational Documents.
As of [_________, 2023], this would have amounted to $10.89 per share. If a holder exercises its redemption rights, then such holder
will be exchanging its public shares for cash and will no longer own shares of Jet.AI following the completion of the Business Combination
and will not participate in the future growth of Jet.AI, if any. Such a holder will be entitled to receive cash for its public shares
only if it properly demands redemption and delivers its shares (either physically or electronically) to our transfer agent at least
two business days prior to the extraordinary general meeting. For more information regarding these procedures, see the subsection
entitled “Extraordinary General Meeting — Redemption Rights.” |
We
anticipate that, upon completion of the Business Combination, the ownership of Jet.AI will be as follows:
| |
Shares of Jet.AI
Common Stock | | |
% of Total Jet.AI
Common Stock | |
Historical Rollover Shareholders | |
| 4,500,000 | | |
| 51.86 | |
Public Shareholders(1) | |
| 1,301,952 | | |
| 15.00 | |
Initial Shareholders | |
| 2,875,000 | | |
| 33.14 | |
Total | |
| 8,676,952 | | |
| 100.0 | % |
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(1) |
Includes
115,000 Class A Ordinary Shares issued to Maxim Group, LLC, the representative to the underwriters in our initial public offering,
which are not redeemable pursuant to an agreement between Maxim and the Company. |
The
number of shares and the interests set forth above (a) assume (i) that no public shareholders elect to have their public shares redeemed,
(ii) that there are no other issuances of equity interests of Oxbridge or Jet Token, (iii) none of Oxbridge’s initial shareholders
or the Historical Rollover Shareholders purchase Class A Ordinary Shares in the open market and (iv) that there are no exercises of Jet
Token Options, Jet Token Warrants or Jet Token RSU Awards and (b) do not take into account Oxbridge Warrants or Merger Consideration
Warrants that will remain outstanding following the Business Combination and which may be exercised at a later date. As a result of the
Business Combination, the economic and voting interests of our public shareholders will decrease.
If
we assume the maximum redemptions scenario described under the section entitled “Unaudited Pro Forma Condensed Combined Financial
Information — Note 1 — Basis of Presentation,” i.e., 237,734 public shares are redeemed, and the assumptions set forth
in the foregoing clauses (a)(ii)–(iv) and (b) remain true, the ownership of Jet.AI upon completion of the Business Combination
will be as follows:
| |
Shares of Jet.AI
Common Stock | | |
% of Total Jet.AI
Common Stock | |
Historical Rollover Shareholders | |
| 4,500,000 | | |
| 53.32 | |
Public Shareholders(1) | |
| 1,064,218 | | |
| 12.61 | |
Initial Shareholders | |
| 2,875,000 | | |
| 34.07 | |
Total | |
| 8,439,218 | | |
| 100.0 | % |
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(1) |
Includes
115,000 Class A Ordinary Shares issued to Maxim Group, LLC, the representative to the underwriters in our initial public offering,
which are not redeemable pursuant to an agreement between Maxim and the Company. |
The
ownership percentages with respect to Jet.AI set forth above do not take into account Oxbridge Warrants or Merger Consideration Warrants
that will remain outstanding immediately following the Business Combination, but do include the Founder Shares, which will convert into
Jet.AI Common Stock in connection with the Domestication and the Business Combination. If the facts are different than these assumptions,
the percentage ownership retained by Oxbridge’s existing shareholders in Jet.AI following the Business Combination will be different.
For example, if we assume that all outstanding 11,500,000 public warrants, 5,760,000 private placement warrants and 7,353,000
Merger Consideration Warrants were exercisable and exercised following completion of the Business Combination and further assume
that no public shareholders elect to have their public shares redeemed (and each other assumption set forth in the preceding paragraph
remains the same), then the ownership of Jet.AI would be as follows:
| |
Shares of Jet.AI
Common Stock | | |
% of Total Jet.AI
Common Stock | |
Historical Rollover Shareholders | |
| 11,853,000 | | |
| 35.60 | |
Public Shareholders(1) | |
| 12,801,952 | | |
| 38.46 | |
Initial Shareholders(2) | |
| 8,635,000 | | |
| 25.94 | |
Total | |
| 33,289,952 | | |
| 100.0 | % |
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(1) |
Includes
115,000 Class A Ordinary Shares issued to Maxim Group, LLC, the representative to the underwriters in our initial public offering,
which are not redeemable pursuant to an agreement between Maxim and the Company. |
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(2) |
Includes
862,500 shares issuable to Maxim Group, LLC, the representative to the underwriters
in our initial public offering, upon exercise of private placement warrants. |
The
Oxbridge Warrants will become exercisable on the later of (a) 30 days after the completion of the Business Combination (or any other
Initial Business Combination) and (b) 12 months from the closing of our IPO, and will expire five years after the completion of
an Initial Business Combination or earlier upon their redemption or liquidation.
The
Merger Consideration Warrants will become exercisable on the completion of the Business Combination.
Additionally,
if we (a) assume (i) that no public shareholders elect to have their public shares redeemed, (ii) that there are no other issuances of
equity interests of Oxbridge or Jet Token, (iii) none of Oxbridge’s initial shareholders or the Historical Rollover Shareholders
purchase Class A Ordinary Shares in the open market, (iv) the issuance of all 3,418,408 shares of Jet.AI Common Stock that
will be reserved in respect of Jet.AI Options issued in exchange for outstanding pre-merger Jet Token Options and in respect of Jet.AI
RSU Awards issued in exchange for outstanding pre-merger Jet Token RSU Awards, and (b) do not take into account Oxbridge Warrants or
Merger Consideration Warrants that will remain outstanding following the Business Combination and may be exercised at a later date, then
the ownership of Jet.AI would be as follows:
| |
Shares of Jet.AI
Common Stock | | |
% of Total Jet.AI
Common Stock | |
Historical Rollover Shareholders | |
| 7,918,408 | | |
| 65.47 | |
Public Shareholders(1) | |
| 1,301,952 | | |
| 10.76 | |
Initial Shareholders | |
| 2,875,000 | | |
| 23.77 | |
Total | |
| 12,095,360 | | |
| 100.0 | % |
|
(1) |
Includes
115,000 Class A Ordinary Shares issued to Maxim Group, LLC, the representative to the underwriters in our initial public offering,
which are not redeemable pursuant to an agreement between Maxim and the Company. |
Please
see the subsection and section entitled “Summary of the Proxy Statement/Prospectus — Ownership of Jet.AI After the Closing”
and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.
The
Oxbridge Board considered various factors in determining whether to approve the Business Combination Agreement and the Business Combination.
For more information about the Oxbridge Board’s decision-making process, see the subsection entitled “The Business Combination
— The Oxbridge Board’s Reasons for the Approval of the Business Combination.”
In
addition to voting on the proposal to approve and adopt the Business Combination Agreement and the Business Combination (the “Business
Combination Proposal”) at the extraordinary general meeting, Oxbridge’s shareholders will also be asked to vote on the approval
of:
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● |
the
change of Oxbridge’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing
and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication Proposal”); |
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the
proposed new certificate of incorporation (the “Proposed Certificate of Incorporation”) and the proposed new bylaws (the
“Proposed Bylaws” and, together with the Proposed Certificate of Incorporation, the “Proposed Organizational Documents”)
of Jet.AI, the post-Domestication company, which if approved, would replace Oxbridge’s memorandum and articles of association
currently registered with the Registrar of Companies of the Cayman Islands (the “Existing Organizational Documents”)
effective upon the Domestication taking effect (the “Organizational Documents Proposal”); |
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on
a non-binding advisory basis, certain governance provisions in the Proposed Organizational Documents, which are being presented separately
in accordance with the SEC guidance to give shareholders the opportunity to present their separate views on important corporate governance
provisions, as ten separate proposals (collectively, the “Advisory Organizational Documents Proposals”); |
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the
2023 Jet.AI Inc. Omnibus Incentive Plan (the “Omnibus Incentive Plan”) and material terms thereunder (the “Omnibus
Incentive Plan Proposal”); |
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the
election, effective immediately after the Effective Time, of two directors to serve until the 2024 annual meeting of stockholders,
two directors to serve until the 2025 annual meeting of stockholders and three directors to serve until the 2026
annual meeting of stockholders, as applicable, or until their respective successors are duly elected and qualified, subject
to such directors’ earlier death, resignation, retirement, disqualification or removal (the “Director Election Proposal”);
and |
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the
adjournment of the extraordinary general meeting to a later date or dates, if necessary or appropriate, to permit further solicitation
and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business
Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Advisory Organizational Documents Proposals,
the Omnibus Incentive Plan Proposal, or the Director Election Proposal (the “Adjournment Proposal” and, together with
the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Advisory Organizational
Documents Proposals, the Omnibus Incentive Plan Proposal, and the Director Election Proposal, the “Proposals”). |
For
more information, see the sections entitled “Proposal No. 1 — The Business Combination Proposal,” “Proposal No.
2 — The Domestication Proposal,” “Proposal No. 3 — The Organizational Documents Proposal,” “Proposal
No. 4 — The Advisory Organizational Documents Proposals,” “Proposal No. 5 — The Omnibus Incentive Plan Proposal,”
“Proposal No. 6 — The Director Election Proposal” and “Proposal No. 7 — The Adjournment Proposal.”
QUESTIONS
AND ANSWERS ABOUT THE BUSINESS COMBINATION
The
following questions and answers briefly address some commonly asked questions about the Proposals to be presented at the extraordinary
general meeting, including the proposed Business Combination. The following questions and answers do not include all the information
that is important to Oxbridge shareholders. We urge Oxbridge shareholders to carefully read this entire proxy statement/prospectus, including
the annexes and other documents referred to herein.
QUESTIONS
AND ANSWERS ABOUT OXBRIDGE’S EXTRAORDINARY GENERAL MEETING AND THE BUSINESS COMBINATION
Q: |
Why
am I receiving this proxy statement/prospectus? |
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A: |
Oxbridge
is sending this proxy statement/prospectus to its shareholders to help them decide how to vote their Ordinary Shares with respect
to the matters to be considered at the extraordinary general meeting. Oxbridge shareholders are being asked to consider and vote
upon, among other things, a proposal to (a) approve and adopt the Business Combination Agreement, pursuant to which First Merger
Sub will merge with and into Jet Token, with Jet Token surviving the First Merger as a wholly owned subsidiary of Jet.AI, and as
soon as practicable, but in any event within three days following the Effective Time and as part of the same overall transaction
as First Merger, Jet Token (as the surviving entity of the First Merger) will merge with and into Second Merger Sub, with Second
Merger Sub surviving the Second Merger as a wholly owned subsidiary of Jet.AI, and (b) approve the First Merger, Second Merger and
the other transactions contemplated by the Business Combination Agreement. The Business Combination cannot be completed unless Oxbridge
shareholders approve the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Advisory
Organizational Documents Proposals, the Omnibus Incentive Plan Proposal, and the Director Election Proposal (collectively, the “Condition
Precedent Proposals”) at the extraordinary general meeting. |
A
copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A. This proxy statement/prospectus
and its annexes include important information about the proposed Business Combination and the other matters to be acted upon at the extraordinary
general meeting. You should read this proxy statement/prospectus and its annexes carefully and in their entirety.
The
approval of each of the Business Combination Proposal, the Advisory Organizational Documents Proposals, the Omnibus Incentive Plan Proposal,
the Director Election Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative
vote (in person, online or by proxy) of at least a majority of the holders of the Class A Ordinary Shares and Class B Ordinary Shares
entitled to vote and actually casting votes thereon at the extraordinary general meeting, voting as a single class. Under the Existing
Organizational Documents, only the holders of Class B Ordinary Shares are entitled to vote on the election of directors and therefore
the Director Election Proposal. Each of the Domestication Proposal and the Organizational Documents Proposal requires a special resolution
under Cayman Islands law, being the affirmative vote (in person, online or by proxy) of at least a two-thirds majority of the holders
of the Class A Ordinary Shares and Class B Ordinary Shares entitled to vote and actually casting votes thereon at the extraordinary general
meeting, voting as a single class.
As
a condition to the Business Combination, Oxbridge will change its jurisdiction of incorporation by deregistering as an exempted company
in the Cayman Islands and continuing and domesticating as a corporation under the laws of the State of Delaware. As a result of and upon
the effective time of the Domestication, prior to the Effective Time: (a) each then issued and outstanding Class A Ordinary Share will
convert automatically, on a one-for-one basis, into a share of Jet.AI Common Stock; (b) each then issued and outstanding Class
B Ordinary Share will convert automatically, on a one-for-one basis, into a share of Jet.AI Common Stock; (c) each then issued
and outstanding Oxbridge Warrant will convert automatically into a Jet.AI Warrant pursuant to the Warrant Agreement; (d) each then issued
and outstanding Oxbridge Unit will convert automatically into a Jet.AI Unit, each consisting of one share of Jet.AI Common Stock
and one Jet.AI Warrant; and (e) after its Domestication, Oxbridge will immediately be renamed “Jet.AI Inc.”
Your
vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement/prospectus
and its annexes.
Q:
|
What
is being voted on at the extraordinary general meeting? |
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A:
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Oxbridge
shareholders will vote on the following proposals at the extraordinary general meeting. |
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The
Business Combination Proposal — To consider and vote upon a proposal to approve by ordinary resolution and adopt the Business
Combination Agreement and the transactions contemplated thereby, including the issuance and reservation for issuance of shares in
connection therewith (Proposal No. 1). |
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The
Domestication Proposal — To consider and vote upon a proposal to approve by special resolution, the change of Oxbridge’s
jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a
corporation incorporated under the laws of the State of Delaware (Proposal No. 2). |
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The
Organizational Documents Proposal — To consider and vote upon a proposal to approve by special resolution the Proposed
Certificate of Incorporation and the Proposed Bylaws of Jet.AI, which, if approved, would take effect at the First Effective Time
(Proposal No. 3). |
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The
Advisory Organizational Documents Proposals — To consider and vote upon ten separate proposals to approve, on a
non-binding advisory basis, certain governance provisions in the Proposed Organizational Documents, which are being presented separately
in accordance with SEC guidance to give shareholders the opportunity to present their separate views on important corporate governance
provisions (Proposal No. 4). |
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The
Omnibus Incentive Plan Proposal — To consider and vote upon a proposal to approve by ordinary resolution and adopt the
Omnibus Incentive Plan and material terms thereunder (Proposal No. 5). |
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The
Director Election Proposal — For the holders of Class B Ordinary Shares to consider and vote upon a proposal to elect,
effective immediately after the effective time of the Business Combination, two directors to serve until the 2024 annual
meeting of stockholders, two directors to serve until the 2025 annual meeting of stockholders and three directors to serve
until the 2026 annual meeting of stockholders, as applicable, or until their respective successors are duly elected
and qualified, subject to such directors’ earlier death, resignation, retirement, disqualification or removal (Proposal No.
6). |
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● |
The
Adjournment Proposal — To consider and vote upon a proposal to approve by ordinary resolution the adjournment of the extraordinary
general meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the
event that there are insufficient votes for, or otherwise in connection with, the approval of any of the other Proposals (Proposal
No. 7). |
Q:
|
Are
the Proposals conditioned on one another? |
|
|
A:
|
We
may not consummate the Business Combination unless the Condition Precedent Proposals are approved at the extraordinary general meeting.
Each of the Condition Precedent Proposals is cross-conditioned on the approval and adoption of each of the other Condition Precedent
Proposals. The Adjournment Proposal is not conditioned on the approval of any other Proposal set forth in this proxy statement/prospectus. |
Q:
|
What
will happen in the Business Combination? |
|
|
A:
|
On
February 24, 2023, Oxbridge, First Merger Sub and Second Merger Sub entered into the Business Combination Agreement with Jet Token.
Pursuant to the Business Combination Agreement, and subject to the terms and conditions contained therein, (a) First Merger Sub will
merge with and into Jet Token, with Jet Token surviving the First Merger as a wholly owned subsidiary of Jet.AI, and (b) as soon
as practicable, but in any event within three days following the Effective Time and as part of the same overall transaction as the
First Merger, Jet Token (as the surviving entity of the First Merger) will merge with and into Second Merger Sub, with Second Merger
Sub surviving the merger as a wholly owned subsidiary of Jet.AI. At the Closing, it is anticipated that 4,500,000 shares of Jet.AI
Common Stock and 7,353,000 Merger Consideration Warrants will be issued to the Historical Rollover Shareholders in the Business
Combination in exchange for all outstanding shares of Jet Token Common Stock (including shares of Jet Token Preferred Stock converted
in the Conversion). It is also anticipated that we will reserve for issuance up to 3,270,278 shares of Jet.AI Common Stock
in respect of Jet.AI Options issued in exchange for outstanding pre-merger Jet Token Options, and 148,130 shares of Jet.AI
Common Stock and 242,044 Merger Consideration Warrants in respect of Jet.AI RSU Awards issued in exchange for outstanding pre-merger
Jet Token RSU Awards. For more information about the Business Combination Agreement and the Business Combination, see the section
entitled “The Business Combination.” |
Q:
|
Why
is Oxbridge proposing the Business Combination? |
|
|
A:
|
Oxbridge
was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business
combination involving Oxbridge and one or more businesses. |
On
August 16, 2021, Oxbridge completed its IPO of 11,500,000 Oxbridge Units, including 1,500,000 Oxbridge Units that were issued pursuant
to the underwriters’ exercise of their over-allotment option in full, with each Oxbridge Unit consisting of one Class A Ordinary
Share and one warrant, where each whole warrant is exercisable to purchase one Class A Ordinary Share at a price of $11.50 per share,
generating gross proceeds to Oxbridge of $115,000,000. Since the IPO, Oxbridge’s activity has been limited to the search for a
prospective Initial Business Combination.
The
Oxbridge Board considered a wide variety of factors in connection with its evaluation of the Business Combination, including its review
of the results of the due diligence conducted by Oxbridge’s management and Oxbridge’s advisors. As a result, the Oxbridge
Board concluded that a transaction with Jet Token would present the most attractive opportunity to maximize value for Oxbridge’s
shareholders. Please see the subsection entitled “The Business Combination — The Oxbridge Board’s Reasons for the Approval
of the Business Combination.”
Q:
|
What
conditions must be satisfied to complete the Business Combination? |
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|
A:
|
There
are a number of closing conditions in the Business Combination Agreement, including the approval by our shareholders of the Condition
Precedent Proposals. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination,
see the subsection entitled “The Business Combination — Conditions to Closing of the Business Combination Agreement.” |
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|
Q:
|
How
will we be managed and governed following the Business Combination? |
|
|
A:
|
Immediately
after the Closing, the Oxbridge Board will be divided into three separate classes, designated as follows: |
|
● |
the
Class I directors will be two independent directors and their terms will expire at the 1st annual meeting of stockholders
after Closing; |
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|
● |
the
Class II directors will be Jay Madhu and Wrendon Timothy and their terms will expire at the 2nd
annual meeting of stockholders after Closing; and |
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|
● |
the
Class III directors will be Michael Winston, George Murnane and a third director whose terms will expire at the 3rd
annual meeting of stockholders after Closing. |
It
is anticipated that Michael Winston, Jet Token’s Founder and Chairman, will be designated Chairperson of the Jet.AI board of directors
(the “Jet.AI Board”) immediately after the Closing.
For
additional information, please see the section entitled “Management After the Business Combination.”
Q:
|
What
equity stake will our current shareholders and the holders of our Founder Shares hold in Jet.AI following the consummation of the
Business Combination? |
|
|
A:
|
We
anticipate that, upon completion of the Business Combination, the ownership of Jet.AI will be as follows: |
| |
Shares of Jet.AI
Common Stock | | |
% of Total Jet.AI
Common Stock | |
Historical Rollover Shareholders | |
| 4,500,000 | | |
| 51.86 | |
Public Shareholders(1) | |
| 1,301,952 | | |
| 15.00 | |
Initial Shareholders | |
| 2,875,000 | | |
| 33.14 | |
Total | |
| 8,676,952 | | |
| 100.0 | % |
|
(1) |
Includes
115,000 shares of Class A Ordinary Shares issued to Maxim Group, LLC, the representative
to the underwriters in our initial public offering, which are not redeemable pursuant to an agreement between Maxim and the
Company. |
The
number of shares and the interests set forth above (a) assume (i) that no public shareholders elect to have their public shares redeemed,
(ii) that there are no other issuances of equity interests of Oxbridge or Jet Token, (iii) none of Oxbridge’s initial shareholders
or the Historical Rollover Shareholders purchase Class A Ordinary Shares in the open market and (iv) that there are no exercises of Jet
Token Options, Jet Token Warrants or Jet Token RSU Awards and (b) do not take into account Oxbridge Warrants or Merger Consideration
Warrants that will remain outstanding following the Business Combination and which may be exercised at a later date. As a result of the
Business Combination, the economic and voting interests of our public shareholders will decrease.
If
we assume the maximum redemptions scenario described under the section entitled “Unaudited Pro Forma Condensed Combined Financial
Information — Note 1 — Basis of Presentation,” i.e., 237,734 public shares are redeemed, and the assumptions set forth
in the foregoing clauses (a)(ii)–(iv) and (b) remain true, the ownership of Jet.AI upon completion of the Business Combination
will be as follows:
| |
Shares of Jet.AI
Common Stock | | |
% of Total Jet.AI
Common Stock | |
Historical Rollover Shareholders | |
| 4,500,000 | | |
| 53.32 | |
Public Shareholders(1) | |
| 1,064,218 | | |
| 12.61 | |
Initial Shareholders | |
| 2,875,000 | | |
| 34.07 | |
Total | |
| 8,439,218 | | |
| 100.0 | % |
|
(1) |
Includes
115,000 shares of Class A Ordinary Shares issued to Maxim Group, LLC, the representative
to the underwriters in our initial public offering, which are not redeemable pursuant to an agreement between Maxim and the
Company. |
The
ownership percentages with respect to Jet.AI set forth above do not take into account Oxbridge Warrants or Merger Consideration Warrants
that will remain outstanding immediately following the Business Combination, but do include the Founder Shares, which will convert into
Jet.AI Common Stock upon an Initial Business Combination. If the facts are different than these assumptions, the percentage ownership
retained by Oxbridge’s existing shareholders in Jet.AI following the Business Combination will be different. For example, if we
assume that all outstanding 11,500,000 public warrants, 5,760,000 private placement warrants and 7,353,000 Merger Consideration
Warrants were exercisable and exercised following completion of the Business Combination and further assume that no public shareholders
elect to have their public shares redeemed (and each other assumption set forth in the preceding paragraph remains the same), then the
ownership of Jet.AI would be as follows:
| |
Shares of Jet.AI
Common Stock | | |
% of Total Jet.AI
Common Stock | |
Historical Rollover Shareholders | |
| 11,853,000 | | |
| 35.60 | |
Public Shareholders(1) | |
| 12,801,952 | | |
| 38.46 | |
Initial Shareholders(2) | |
| 8,635,000 | | |
| 25.94 | |
Total | |
| 33,289,952 | | |
| 100.0 | % |
|
(1) |
Includes
115,000 shares of Class A Ordinary Shares issued to Maxim Group, LLC, the representative
to the underwriters in our initial public offering, which are not redeemable pursuant to an agreement between Maxim and the
Company. |
|
|
|
|
(2) |
Includes
862,500 shares issuable to Maxim Group, LLC, the representative to the underwriters
in our initial public offering, upon exercise of private placement warrants. |
The
Oxbridge Warrants will become exercisable on the later of (a) 30 days after the completion of the Business Combination (or any other
Initial Business Combination) and (b) 12 months from the closing of our IPO and will expire five years after the completion of an Initial
Business Combination or earlier upon their redemption or liquidation.
The
Merger Consideration Warrants will become exercisable on the completion of the Business Combination.
Additionally,
if we (a) assume (i) that no public shareholders elect to have their public shares redeemed, (ii) that there are no other issuances of
equity interests of Oxbridge or Jet Token, (iii) none of Oxbridge’s initial shareholders or the Historical Rollover Shareholders
purchase Class A Ordinary Shares in the open market, (iv) the issuance of all 3,418,408 shares of Jet.AI Common Stock that
will be reserved in respect of Jet.AI Options issued in exchange for outstanding pre-merger Jet Token Options and in respect of Jet.AI
RSU Awards issued in exchange for outstanding pre-merger Jet Token RSU Awards, and (b) do not take into account Oxbridge Warrants or
Merger Consideration Warrants that will remain outstanding following the Business Combination and may be exercised at a later date, then
the ownership of Jet.AI would be as follows:
| |
Shares of Jet.AI
Common Stock | | |
% of Total Jet.AI
Common Stock | |
Historical Rollover Shareholders | |
| 7,918,408 | | |
| 65.47 | |
Public Shareholders(1) | |
| 1,301,952 | | |
| 10.76 | |
Initial Shareholders | |
| 2,875,000 | | |
| 23.77 | |
Total | |
| 12,095,360 | | |
| 100.0 | % |
|
(1) |
Includes
115,000 shares of Class A Ordinary Shares issued to Maxim Group, LLC, the representative
to the underwriters in our initial public offering, which are not redeemable pursuant to an agreement between Maxim and the
Company. |
Please
see the subsection and section entitled “Summary of the Proxy Statement/Prospectus — Ownership of Jet.AI After the Closing”
and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.
Q:
|
Why
is Oxbridge proposing the Domestication? |
|
|
A:
|
The
Oxbridge Board believes that there are significant advantages to Oxbridge’s shareholders that will arise as a result of a change
of Oxbridge’s domicile to the State of Delaware. Further, the Oxbridge Board believes that any direct benefit that the General
Corporation Law of the State of Delaware (the “DGCL”) provides to a corporation also indirectly benefits its shareholders,
who are the owners of the corporation. The Oxbridge Board believes that there are several reasons why a reincorporation in Delaware
is in the best interests of Oxbridge and its shareholders, including (a) the prominence, predictability and flexibility of the DGCL,
(b) Delaware’s well-established principles of corporate governance and (c) the increased ability for Delaware corporations
to attract and retain qualified directors. Each of the foregoing are discussed in greater detail in the section entitled “Proposal
No. 2 — The Domestication Proposal — Reasons for the Domestication.” |
To
effect the Domestication, Oxbridge will file a notice of deregistration with the Cayman Islands Registrar of Companies, together with
the necessary accompanying documents, and file the proposed certificate of incorporation (the “Proposed Certificate of Incorporation”)
of Jet.AI and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which Oxbridge will
be domesticated and continue as a Delaware corporation.
The
approval of the Domestication Proposal is a condition to the Closing of the Business Combination under the Business Combination Agreement.
The approval of the Domestication Proposal requires a special resolution under Cayman Islands law, being the affirmative vote (in person,
online or by proxy) of holders of a majority of at least two-thirds of the Class A Ordinary Shares and Class B Ordinary Shares entitled
to vote and actually casting votes thereon at the extraordinary general meeting, voting as a single class. Abstentions and broker non-votes,
while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting.
Q:
|
How
will the Domestication affect my Ordinary Shares, Oxbridge Warrants and Oxbridge Units? |
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|
A:
|
As
a result of and upon the effective time of the Domestication, prior to the Effective Time: (a) each then issued and outstanding Class
A Ordinary Share will convert automatically, on a one-for-one basis, into a share of Jet.AI Common Stock; (b) each then issued
and outstanding Class B Ordinary Share will convert automatically, on a one-for-one basis, into a share of Jet.AI Common Stock;
(c) each then issued and outstanding Oxbridge Warrant will convert automatically into a Jet.AI Warrant to purchase one share
of Jet.AI Common Stock pursuant to the Warrant Agreement; (d) each then issued and outstanding Oxbridge Unit will convert
automatically into a Jet.AI Unit, each consisting of one share of Jet.AI Common Stock and one Jet.AI Warrant; and (e) after
its Domestication, Oxbridge will immediately be renamed “Jet.AI Inc.” For additional information about the Domestication,
please see the section entitled “Proposal No. 2 — The Domestication Proposal” in the accompanying proxy statement/prospectus. |
Q:
|
What
are the U.S. federal income tax consequences of the Domestication? |
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A:
|
As
discussed more fully below under the caption “The Business Combination — Material U.S. Federal Income Tax Considerations
— U.S. Federal Income Taxation of U.S. Holders,” the Domestication will qualify as a “reorganization” within
the meaning of Section 368(a) of the Code (a “Reorganization”). Section 367(b) of the Code, which applies to the domestication
of a foreign corporation in certain Reorganizations and imposes U.S. federal income tax on certain U.S. persons in connection with
transactions that otherwise would generally be tax-free, may apply with respect to U.S. Holders (as defined below) on the date of
the Domestication. Consequently, for U.S. federal income tax purposes: |
|
● |
a
U.S. Holder who, on the date of the Domestication, beneficially owns (actually or constructively, including as a result of the applicable
attribution rules that would take into account such U.S. Holder’s ownership of Oxbridge Warrants) Class A Ordinary Shares with
10% or more of the total combined voting power of all classes of Oxbridge shares entitled to vote or 10% or more of the total value
of all classes of Oxbridge shares, generally will be required to include in income as a deemed dividend paid by Oxbridge the “all
earnings and profits amount” attributable to such U.S. Holder, as discussed more fully below under the caption “The Business
Combination — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation of U.S. Holders —
Effects of Section 367(b)”; |
|
● |
a
U.S. Holder who, on the date of the Domestication, beneficially owns (actually or constructively, including as a result of the applicable
attribution rules that would take into account such U.S. Holder’s ownership of Oxbridge Warrants) Class A Ordinary Shares with
a fair market value of at least $50,000 (but less than 10% of the total combined voting power of all classes of Oxbridge shares entitled
to vote and less than 10% of the total value of all classes of Oxbridge shares) will recognize gain (but not loss) with respect to
the Domestication or, in the alternative, may elect to recognize the “all earnings and profits amount” attributable to
such U.S. Holder, as discussed more fully below under the caption “The Business Combination — Material U.S. Federal Income
Tax Considerations — U.S. Federal Income Taxation of U.S. Holders — Effects of Section 367(b)”; and |
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● |
a
U.S. Holder who, on the date of the Domestication, beneficially owns (actually or constructively, including as a result of the applicable
attribution rules that would take into account such U.S. Holder’s ownership of Oxbridge Warrants) Class A Ordinary Shares with
a fair market value of less than $50,000 (as well as less than 10% of the total combined voting power of all classes of Oxbridge
shares entitled to vote and less than 10% of the total value of all classes of Oxbridge shares) generally will not be required to
recognize any gain or loss in connection with the Domestication or to include any part of the “all earnings and profits amount”
in income. |
Further,
the Domestication could be a taxable event for U.S. Holders under the “passive foreign investment company” (or “PFIC”)
provisions of the Code. Because Oxbridge is a blank-check company with no current active business, based upon the composition of its
income and assets, and upon review of its financial statements, Oxbridge believes that it may be considered a PFIC.
If
certain PFIC regulations were finalized (including retroactively after the date of the Domestication) in their currently proposed form,
such U.S. Treasury regulations may require taxable gain recognition by a U.S. Holder with respect to its exchange of Class A Ordinary
Shares and Oxbridge Warrants, as applicable, for Jet.AI Common Stock and Jet.AI Warrants in the Domestication if Oxbridge were
classified as a PFIC at any time during such U.S. Holder’s holding period for such Class A Ordinary Shares or Oxbridge Warrants,
as applicable. The tax on any such recognized gain would be imposed based on a complex set of computational rules. Such rules are discussed
more fully below under the caption “The Business Combination — Material U.S. Federal Income Tax Considerations — U.S.
Federal Income Taxation of U.S. Holders — Passive Foreign Investment Company Rules.” However, a U.S. Holder may be able to
avoid the PFIC gain and certain other tax consequences associated with PFIC status with respect to its Class A Ordinary Shares (but not
its Oxbridge Warrants) if such U.S. Holder either (i) is eligible to and makes a timely and valid QEF Election (as defined and described
below under the caption “The Business Combination — Material U.S. Federal Income Tax Considerations — U.S. Federal
Income Taxation of U.S. Holders — Passive Foreign Investment Company Rules”) in the first taxable year in which such U.S.
Holder held (or was deemed to hold) Class A Ordinary Shares and in which Oxbridge was classified as a PFIC or (ii) makes a Mark-to-Market
Election (as defined and described below under the caption “The Business Combination — Material U.S. Federal Income Tax Considerations
— U.S. Federal Income Taxation of U.S. Holders — Passive Foreign Investment Company Rules”) with respect to its Class
A Ordinary Shares. Generally, neither election is available with respect to the Oxbridge Warrants.
Oxbridge
does not expect the Domestication to result in any material U.S. federal income tax consequences to Non-U.S. Holders (as defined below).
However, Non-U.S. Holders may become subject to U.S. federal income withholding taxes on any dividends paid (or deemed paid) in respect
of such Non-U.S. Holder’s shares of Jet.AI Common Stock after the Domestication.
The
rules governing the U.S. federal income tax treatment of the Domestication are complex and will depend on a holder’s particular
circumstances. All holders of Oxbridge Public Securities are urged to consult with, and rely solely upon, their tax advisors regarding
the potential tax consequences to them of the Domestication, including the effects of Section 367(b) of the Code and the application
of the PFIC rules. For a more complete discussion of the U.S. federal income tax considerations of the Domestication, see the discussion
below under the caption “The Business Combination — Material U.S. Federal Income Tax Considerations — U.S. Federal
Income Taxation of U.S. Holders.”
Q:
|
Did
the Oxbridge Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business
Combination? |
|
|
A:
|
Yes.
The Oxbridge Board obtained a third-party fairness opinion from Stanton Park Advisors LLC in connection with its determination to
approve the Business Combination. [Summary to come.] |
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|
Q:
|
What
happens if I sell my Class A Ordinary Shares before the extraordinary general meeting? |
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A:
|
The
record date for the extraordinary general meeting is earlier than the date that the Business Combination is expected to be completed.
If you transfer your Class A Ordinary Shares after the record date, but before the extraordinary general meeting, unless the transferee
obtains from you a proxy to vote those shares, you will retain your right to vote at the extraordinary general meeting. However,
you will not be able to seek redemption of your Class A Ordinary Shares because you will no longer be able to deliver them for cancellation
upon consummation of the Business Combination in accordance with the provisions described in this proxy statement/prospectus. If
you transfer your Class A Ordinary Shares prior to the record date, you will have no right to vote those shares at the extraordinary
general meeting or seek redemption of those shares. |
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|
Q:
|
Following
the Business Combination, will Oxbridge’s securities continue to trade on a stock exchange? |
|
|
A:
|
Yes.
We anticipate that, following the Business Combination, the Jet.AI Common Stock, the Jet.AI Warrants and the Merger
Consideration Warrants will trade on Nasdaq under the new symbols “PJ,” “PJAIW” and “PJAIZ,” respectively.
Our units will automatically separate into the component securities upon consummation of the Business Combination and, as a result,
will no longer trade as a separate security following the Business Combination. |
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|
Q:
|
What
vote is required to approve the Proposals presented at the extraordinary general meeting? |
|
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A:
|
The
approval of the Business Combination Proposal, the Advisory Organizational Documents Proposals, the Omnibus Incentive Plan Proposal,
the Director Election Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative
vote (in person, online or by proxy) of the holders of a majority of the Class A Ordinary Shares and Class B Ordinary Shares entitled
to vote and actually casting votes thereon at the extraordinary general meeting, voting as a single class. Under the Existing Organizational
Documents, only the holders of Class B Ordinary Shares are entitled to vote on the election of directors and therefore the Director
Election Proposal. Approval of the Domestication Proposal and the Organizational Documents Proposal requires a special resolution
under Cayman Islands law, being the affirmative vote (in person, online or by proxy) of the holders of at least two-thirds of the
Class A Ordinary Shares and Class B Ordinary Shares entitled to vote and actually casting votes thereon at the extraordinary general
meeting, voting as a single class. Abstentions and broker non-votes, while considered present for the purposes of establishing a
quorum, will not count as votes cast at the extraordinary general meeting. Accordingly, a shareholder’s failure to vote
in person, online or by proxy at the extraordinary general meeting or an abstention from voting will have no effect on the outcome
of the vote on any of the Proposals. |
Q:
|
May
the Sponsor or Oxbridge’s directors, officers, advisors or any of their respective affiliates purchase public shares in connection
with the Business Combination? |
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|
A:
|
In
connection with the shareholder vote to approve the proposed Business Combination, our Sponsor, directors, officers, advisors or
any of their respective affiliates may privately negotiate transactions to purchase public shares from shareholders who would have
otherwise elected to have their shares redeemed in conjunction with the Business Combination for a per share pro rata portion of
the Trust Account. There is no limit on the number of public shares our Sponsor, directors, officers, advisors or any of their respective
affiliates may purchase in such transactions, subject to compliance with applicable law and the rules of Nasdaq. Any such privately
negotiated purchases may be effected at purchase prices that are in excess of the per share pro rata portion of the Trust Account.
However, our Sponsor, directors, officers, advisors and their respective affiliates have no current commitments, plans or intentions
to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the
Trust Account will be used to purchase public shares in such transactions. None of our Sponsor, directors, officers, advisors or
any of their respective affiliates will make any such purchases when they are in possession of any material non-public information
not disclosed to the seller of such public shares or during a restricted period under Regulation M under the Exchange Act. Such a
purchase could include a contractual acknowledgement that such shareholder, although still the record holder of such public shares,
is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights, and could include a contractual
provision that directs such shareholder to vote such shares in a manner directed by the purchaser. In the event that our Sponsor,
directors, officers, advisors or any of their respective affiliates purchase public shares in privately negotiated transactions from
public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to
revoke their prior elections to redeem their shares. Any such privately negotiated purchases may be effected at purchase prices that
are in excess of the per share pro rata portion of the Trust Account. For more information, see the subsection entitled “The
Business Combination — Potential Purchases of Public Shares.” |
Q:
|
How
many votes do I have at the extraordinary general meeting? |
|
|
A:
|
Our
shareholders are entitled to one vote at the extraordinary general meeting for each Class A Ordinary Share or Class B Ordinary Share
held of record as of [___________, 2023], the record date for the extraordinary general meeting. As of the close of business on the
record date, there were [1,301,952] outstanding Class A Ordinary Shares, which are held by our public shareholders, and [2,875,000]
outstanding Class B Ordinary Shares, which are held by our initial shareholders. |
|
|
Q:
|
What
constitutes a quorum at the extraordinary general meeting? |
|
|
A:
|
Holders
of a one-third of the voting power of Class A Ordinary Shares and Class B Ordinary Shares issued and outstanding and entitled
to vote at the extraordinary general meeting, present in person, online or by proxy, constitute a quorum. In the absence of a quorum,
the chairman of the meeting has the power to adjourn the extraordinary general meeting. As of the record date for the extraordinary
general meeting, [1,392,318] Class A Ordinary Shares and Class B Ordinary Shares, in the aggregate, would be required to achieve
a quorum. Abstentions will count as present for the purposes of establishing a quorum with respect to each Proposal. |
|
|
Q:
|
How
will our Sponsor, directors and officers vote? |
|
|
A:
|
Our
Sponsor, directors and officers have agreed to vote any Class A Ordinary Shares and Class B Ordinary Shares owned by them in favor
of the Business Combination and the other Proposals. Currently, they own approximately [68.83]% of our issued and outstanding Class
A Ordinary Shares and Class B Ordinary Shares, in the aggregate. Please see the subsection entitled “The Business Combination
— Related Agreements — Sponsor Letter.” |
|
|
Q:
|
What
interests do the current officers and directors have in the Business Combination? |
|
|
A:
|
When
you consider the Oxbridge Board’s recommendation of the Proposals, you should keep in mind that our directors and officers
have interests in the Business Combination that are different from, or in addition to, those of other shareholders generally. Our
directors were aware of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending
to shareholders that they approve the Business Combination. Shareholders should take these interests into account in deciding whether
to approve the Business Combination. See the subsection entitled “The Business Combination — Interests of Certain Persons
in the Business Combination” for additional information. The Oxbridge Board was aware of and considered these interests, among
other matters, in recommending that Oxbridge shareholders vote “FOR” each of the Proposals. These interests include,
among other things: |
|
● |
the fact that our Sponsor owns 2,875,000 Founder Shares, which were
initially acquired prior to Oxbridge’s IPO and for an aggregate purchase price of $25,000, and Oxbridge’s directors
and officers have a pecuniary interest in such Founder Shares through their ownership interest in the Sponsor. Such securities will
have a significantly higher value at the time of the Business Combination, which if unrestricted and freely tradable would be valued
at approximately [$ ], based on the closing price of our Class A Ordinary Shares of [$ ] per share
on [__________, 2023]. In addition, the Sponsor paid an aggregate of $4,897,500 for 4,897,500 Private Placement Warrants at a price
of $1.00 per warrant. Such Private Placement Warrants had an aggregate market value of [$________] based on the last sale price of
[$_______] per warrant on Nasdaq on [__________, 2023]. If Oxbridge does not consummate the Business Combination or another initial
business combination by August 16, 2023, and Oxbridge is therefore required to be liquidated, these shares would be worthless, as
Founder Shares are not entitled to participate in any redemption or liquidation of the Trust Account; |
|
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|
● |
the fact that Oxbridge’s officers and directors have an aggregate
of $953,552 invested in the Sponsor, which will be lost in the event that the Business Combination is not approved and concluded; |
|
● |
the
fact that given the differential in the purchase price that our Sponsor paid for the Founder Shares as compared to the price of the
Units sold in the IPO and the substantial number of shares of Jet.AI Common Stock that our Sponsor will receive upon conversion
of the Founder Shares in connection with the Business Combination, our Sponsor and its affiliates may earn a positive rate of return
on their investment even if the Jet.AI Common Stock trades below the price initially paid for the Units in the IPO and the
public shareholders experience a negative rate of return following the completion of the Business Combination; |
|
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|
● |
the fact that our Sponsor, officers and directors have
agreed not to redeem any Class A Ordinary Shares held by them in connection with a shareholder vote to approve the Business
Combination; |
|
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|
|
● |
if
the Trust Account is liquidated, including in the event we are unable to complete an Initial Business Combination within the required
time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below [$10.15]
per public share, or such lesser amount per public share as is in the Trust Account on the liquidation date, by the claims of (a)
any third party (other than our independent registered public accounting firm) for services rendered or products sold to us or (b)
a prospective target business with which we have entered into a letter of intent, confidentiality or other similar agreement or business
combination agreement, but only if such a third party or target business has not executed a waiver of all rights to seek access to
the Trust Account; |
|
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|
● |
the
anticipated continuation of Jay Madhu and Wrendon Timothy as directors after the Business Combination, and as such, after the
proposed Business Combination is consummated, Mr. Madhu and Mr. Timothy will in the future receive any cash fees, stock options or
stock awards that the Jet.AI Board determines to pay to its directors; |
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|
● |
the
fact that our Sponsor, officers and directors will be reimbursed for out-of-pocket expenses incurred in connection with activities
on our behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations; and |
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|
● |
the
fact that our Sponsor will lose their entire investment in us if an Initial Business Combination
is not completed. In addition, our Sponsor has made available to us a loan of $575,000 to
extend the deadline for completion of our Initial Business Combination from November 16, 2022 to August 16, 2023, all of which is
outstanding as of , 2023. The ability of Oxbridge to repay such loan is dependent upon the completion of our Initial Business Combination. |
As
of [__________, 2023], the Sponsor and its affiliates had an aggregate of [$__________] at risk that depends on completion of an initial
business combination, including [$___________] it invested in securities, [$_________] of unpaid loans and outstanding administrative
services fees. As of [________, 2023], there was no unreimbursed out-of-pocket expenses incurred by the sponsor or its affiliates. These
interests may have influenced Oxbridge’s directors in making their recommendation that you vote in favor of the approval of the
Business Combination.
Q:
|
What
happens if I vote against the Business Combination Proposal? |
|
|
A:
|
Under
the Existing Organizational Documents, if the Business Combination Proposal is not approved and we do not otherwise consummate an
alternative Initial Business Combination by August 16, 2023 (the “Combination Period”), we will be required to dissolve
and liquidate the Trust Account by returning the then-remaining funds in such account to our public shareholders. |
Q:
|
Do
I have redemption rights? |
|
|
A:
|
Pursuant
to the Existing Organizational Documents, a public shareholder may request that Oxbridge redeem all or a portion of its public shares
for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public
shares to be redeemed only if you: |
|
● |
hold
public shares or, if you hold public shares through Oxbridge Units, you elect to separate your Oxbridge Units into the underlying
public shares and public warrants prior to exercising your redemption rights with respect to the public shares; |
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|
● |
submit
a written request to Continental Stock Transfer & Trust Company, Oxbridge’s transfer agent, in which you (i) request that
Jet.AI redeem all or a portion of your public shares for cash, and (ii) identify yourself as the beneficial holder of the public
shares and provide your legal name, phone number and address; and |
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● |
deliver
your public shares to Continental Stock Transfer & Trust Company, Oxbridge’s transfer agent, physically or electronically
through The Depository Trust Company (“DTC”). |
Holders
must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern time,
on [ , 2023] (two business days before the extraordinary general meeting) in order for their shares to be redeemed.
Holders
of Oxbridge Units must elect to separate the Oxbridge Units into the underlying Class A Ordinary Shares and public warrants prior to
exercising redemption rights with respect to the public shares. If public shareholders hold their Oxbridge Units in an account at a brokerage
firm or bank, such public shareholders must notify their broker or bank that they elect to separate the units into the underlying public
shares and public warrants, or if a holder holds Oxbridge Units registered in its own name, the holder must contact Continental Stock
Transfer & Trust Company, Oxbridge’s transfer agent, directly and instruct it to do so. The redemption rights include the requirement
that a holder must identify itself to Oxbridge in order to validly redeem its shares. Public shareholders (other than the initial
shareholders) may elect to redeem their public shares even if they vote “FOR” the Business Combination Proposal. If the
Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business
Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares
that it holds and timely delivers its shares to Continental Stock Transfer & Trust Company, Jet.AI will redeem such public shares
for a per-share price, payable in cash, equal to the pro rata portion of the Trust Account relating to such public shares, calculated
as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of [ ,
2023], this would have amounted to [$_____] per issued and outstanding public share. If a public shareholder exercises its redemption
rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption
will take place following the Domestication and, accordingly, it is shares of Jet.AI Common Stock that will be redeemed immediately
after consummation of the Business Combination. See the subsection entitled “Extraordinary General Meeting — Redemption Rights”
for the procedures to be followed if you wish to redeem your shares for cash.
Q:
|
Will
how I vote affect my ability to exercise redemption rights? |
|
|
A:
|
No.
You may exercise your redemption rights whether you vote your Class A Ordinary Shares for or against or abstain from voting on the
Business Combination Proposal or any other Proposal described in this proxy statement/prospectus. As a result, the Business Combination
can be approved by shareholders who will redeem their shares and no longer remain shareholders. |
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Q:
|
How
do I exercise my redemption rights? |
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A:
|
In
order to exercise your redemption rights, you must (a) if you hold your Class A Ordinary Shares through Oxbridge Units, elect to
separate your Oxbridge Units into the underlying public shares and public warrants prior to exercising your redemption rights with
respect to the public shares and (b) prior to 5:00 p.m., Eastern time, on [ , 2023] (two business days before the extraordinary general
meeting), tender your shares physically or electronically and submit a request in writing that we redeem your public shares for cash
to Continental Stock Transfer & Trust Company, our transfer agent, at the following address: |
Continental
Stock Transfer & Trust Company
1
State Street, 30th Floor
New
York, New York 10004-1561
Attention:
Mark Zimkind
Email:
mzimkind@continentalstock.com
Notwithstanding
the foregoing, a public shareholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert
or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with
respect to his, her or its shares or, if part of such a group, the group’s shares, in excess of the 15% threshold. Accordingly,
all public shares in excess of the 15% threshold beneficially owned by a public shareholder or group will not be redeemed for cash. In
order to determine whether a shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange
Act) with any other shareholder, Oxbridge will require each public shareholder seeking to exercise redemption rights to certify to Oxbridge
whether such shareholder is acting in concert or as a group with any other shareholder. Shareholders seeking to exercise their redemption
rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the transfer agent
and time to effect delivery. It is our understanding that shareholders should generally allot at least two weeks to obtain physical certificates
from the transfer agent. However, we do not have any control over this process and it may take longer than two weeks. Shareholders who
hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or
delivered electronically.
Holders
of outstanding Oxbridge Units must separate the underlying public shares and public warrants prior to exercising redemption rights with
respect to the public shares. If you hold Oxbridge Units registered in your own name, you must deliver the certificate for such units
or deliver such units electronically to Continental Stock Transfer & Trust Company with written instructions to separate such units
into public shares and public warrants. This must be completed far enough in advance to permit the mailing of the public share certificates
or electronic delivery of the public shares back to you so that you may then exercise your redemption rights with respect to the public
shares following the separation of such public shares from the units.
If
a broker, dealer, commercial bank, trust company or other nominee holds your Oxbridge Units, you must instruct such nominee to separate
your Oxbridge Units. Your nominee must send written instructions by facsimile to Continental Stock Transfer & Trust Company. Such
written instructions must include the number of Oxbridge Units to be split and the nominee holding such Oxbridge Units. Your nominee
must also initiate electronically, using DTC’s DWAC (deposit withdrawal at custodian) system, a withdrawal of the relevant Oxbridge
Units and a deposit of the corresponding number of public shares and public warrants. This must be completed far enough in advance to
permit your nominee to exercise your redemption rights with respect to the public shares following the separation of such public shares
from the Oxbridge Units. While this is typically done electronically on the same business day, you should allow at least one full business
day to accomplish the separation. If you fail to cause your public shares to be separated in a timely manner, you will likely not be
able to exercise your redemption rights.
Any
demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter,
with our consent, until the vote is taken with respect to the Business Combination. If you delivered your shares for redemption to the
transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that the transfer agent
return the shares (physically or electronically). You may make such request by contacting our transfer agent at the email address or
address listed under the question “Who can help answer my questions?” below.
Q:
|
What
are the U.S. federal income tax consequences of exercising my redemption rights? |
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A:
|
The
receipt of cash by a U.S. Holder of Jet.AI Common Stock in redemption of such stock will be a taxable event for U.S. federal
income tax purposes. Please see the discussion below under the caption “The Business Combination — Material U.S. Federal
Income Tax Considerations — U.S. Federal Income Taxation of U.S. Holders — Redemption of Jet.AI Common Stock”
for additional information. U.S. Holders of Jet.AI Common Stock considering the exercise of their redemption rights should
consult with, and rely solely upon, their own tax advisors with respect to the U.S. federal income tax consequences of exercising
such redemption rights. |
Additionally,
because the Domestication will occur immediately prior to the redemption of U.S. Holders that exercise redemption rights with respect
to their Jet.AI Common Stock, U.S. Holders exercising their redemption rights with respect to their Jet.AI Common Stock
will be subject to the potential tax consequences of the Domestication, including the effects of Section 367(b) of the Code and the application
of the PFIC rules to the Domestication. The tax considerations with respect to the Domestication are discussed more fully below under
the caption “The Business Combination — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation
of U.S. Holders.”
All
holders of Oxbridge Public Securities considering exercising their redemption rights with respect to their Jet.AI Common Stock
are urged to consult with, and rely solely upon, their tax advisors with respect to the potential tax consequences to them of the Domestication
and the exercise of their redemption rights.
Q:
|
If
I am a warrant holder, can I exercise redemption rights with respect to my warrants? |
|
|
A:
|
No.
The holders of Oxbridge Warrants have no redemption rights with respect to such warrants. |
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Q:
|
Do
I have appraisal rights if I object to the proposed Business Combination? |
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A:
|
No.
There are no appraisal rights available to holders of Class A Ordinary Shares, Class B Ordinary Shares or Oxbridge Warrants in connection
with the Business Combination or Domestication under Cayman Islands law or the DGCL. |
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|
Q:
|
What
happens to the funds deposited in the Trust Account after consummation of the Business Combination? |
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A:
|
If
the Business Combination Proposal is approved, we intend to use a portion of the funds held in the Trust Account to pay (a) any transaction
costs associated with the Business Combination Agreement and Business Combination, (b) taxes and deferred underwriting discounts
and commissions from the IPO and (c) for any redemptions of public shares. The remaining balance in the Trust Account will be used
for general corporate purposes of Jet.AI. See the section entitled “The Business Combination” for additional information. |
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Q:
|
What
are the material U.S. federal income tax consequences to Holders (as defined below) of Jet.AI Common Stock and Jet.AI Warrants
as a result of the Business Combination? |
|
|
A:
|
Holders
of Jet.AI Common Stock and Jet.AI Warrants will retain their shares of Jet.AI Common Stock and Jet.AI Warrants in the
Business Combination, will not receive any consideration in connection with the Business Combination and will not receive any additional
shares of Jet.AI Common Stock or additional Jet.AI Warrants in the Business Combination. As a result, there will be no material
U.S. federal income tax consequences to Holders of Jet.AI Common Stock and Jet.AI Warrants as a result of the Business Combination,
regardless of whether the Business Combination qualifies as a Reorganization. See “The Business Combination — Material
U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation of U.S. Holders — The Business Combination”
and “The Business Combination — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation
of Non-U.S. Holders — The Business Combination.” |
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|
Q:
|
What
happens if the Business Combination is not consummated or is terminated? |
|
|
A:
|
There
are certain circumstances under which the Business Combination Agreement may be terminated. See the subsection entitled “The
Business Combination — Termination” for additional information regarding the parties’ specific termination rights.
In accordance with the Existing Organizational Documents, if an Initial Business Combination is not consummated within the Combination
Period, we will (a) cease all operations except for the purpose of winding up, (b) as promptly as reasonably possible but not more
than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released
to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number
of then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders
(including the right to receive further liquidating distributions, if any), and (c) as promptly as reasonably possible following
such redemption, subject to the approval of our remaining shareholders and the Oxbridge Board, liquidate and dissolve, subject in
each case of (b) and (c) above to our obligations under Cayman Islands law to provide for claims of creditors and in all cases subject
to the other requirements of applicable law. |
We
expect that the amount of any distribution our public shareholders will be entitled to receive upon our dissolution will be approximately
the same as the amount they would have received if they had redeemed their shares in connection with the Business Combination, subject
in each case to our obligations under the Cayman Islands law to provide for claims of creditors and other requirements of applicable
law. Holders of our Founder Shares have waived any right to any liquidating distributions with respect to those shares.
In
the event of liquidation, there will be no distribution with respect to the outstanding Oxbridge Warrants. Accordingly, the Oxbridge
Warrants will expire worthless.
Q:
|
When
is the Business Combination expected to be consummated? |
|
|
A:
|
It
is currently anticipated that the Business Combination will be consummated promptly following the extraordinary general meeting to
be held on [ , 2023], provided that all the requisite shareholder approvals are obtained and other conditions to the consummation
of the Business Combination have been satisfied or waived. For a description of the conditions for the completion of the Business
Combination, see the subsection entitled “The Business Combination — Conditions to Closing of the Business Combination
Agreement.” |
Q:
|
What
do I need to do now? |
|
|
A:
|
You
are urged to read carefully and consider the information included in this proxy statement/prospectus, including the section entitled
“Risk Factors” and the annexes attached to this proxy statement/prospectus, and to consider how the Business Combination
will affect you as a shareholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy
statement/prospectus and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee,
on the voting instruction form provided by the broker, bank or nominee. |
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|
Q:
|
How
do I vote? |
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|
A:
|
If
you were a holder of record of Class A Ordinary Shares or Class B Ordinary Shares on [ , 2023], the record date for the extraordinary
general meeting, you may vote with respect to the Proposals in person or online at the virtual extraordinary general meeting or by
completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares
in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the
instructions provided by your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly
counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you
wish to attend the extraordinary general meeting and vote in person or online, obtain a proxy from your broker, bank or nominee. |
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|
Q:
|
What
will happen if I abstain from voting or fail to vote at the extraordinary general meeting? |
|
|
A:
|
At
the extraordinary general meeting, we will count a properly executed proxy marked “ABSTAIN” with respect to a particular
proposal as present for purposes of determining whether a quorum is present. For purposes of approval, failure to vote or an abstention
will have no effect on the Proposals. |
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|
Q:
|
What
will happen if I sign and submit my proxy card without indicating how I wish to vote? |
|
|
A:
|
Signed
and dated proxies received by us without an indication of how the shareholder intends to vote on a proposal will be voted “FOR”
each Proposal being submitted to a vote of the shareholders at the extraordinary general meeting. |
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|
Q:
|
If
I am not going to attend the extraordinary general meeting in person or online, should I submit my proxy card instead? |
|
|
A:
|
Yes.
Whether you plan to attend the extraordinary general meeting or not, please read this proxy statement/prospectus carefully, and vote
your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. |
|
|
Q:
|
If
my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me? |
|
|
A:
|
No.
Under the rules of various national and regional securities exchanges, your broker, bank or nominee cannot vote your shares with
respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures
provided to you by your broker, bank or nominee. We believe the Proposals presented to our shareholders will be considered non-discretionary
and therefore your broker, bank or nominee cannot vote your shares without your instruction. Your bank, broker or other nominee can
vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance
with directions you provide. |
|
|
Q:
|
May
I change my vote after I have submitted my executed proxy card? |
|
|
A:
|
Yes.
You may change your vote by sending a later-dated, signed proxy card to us at the address listed below so that it is received by
us prior to the extraordinary general meeting or by attending the extraordinary general meeting and voting in person or online. You
also may revoke your proxy by sending a notice of revocation to us, which must be received prior to the extraordinary general meeting. |
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|
Q:
|
What
should I do if I receive more than one set of voting materials? |
|
|
A:
|
You
may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy
cards or voting instruction forms. For example, if you hold your shares in more than one brokerage account, you will receive a separate
voting instruction form for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered
in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting
instruction form that you receive in order to cast your vote with respect to all of your shares. |
Q:
|
Who
can help answer my questions? |
|
|
A:
|
If
you have questions about the Proposals or if you need additional copies of the proxy statement/prospectus or the enclosed proxy card
you should contact our proxy solicitor at: |
[●]
To
obtain timely delivery, our shareholders must request the materials no later than five business days prior to the extraordinary general
meeting.
You
may also obtain additional information about us from documents filed with the SEC by following the instructions in the section entitled
“Where You Can Find Additional Information.”
If
you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your shares (either
physically or electronically) to our transfer agent at least two business days prior to the extraordinary general meeting in accordance
with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding
the certification of your position or delivery of your shares, please contact:
Continental
Stock Transfer & Trust Company
1
State Street, 30th Floor
New
York, New York 10004-1561
Attention:
Mark Zimkind
Email:
mzimkind@continentalstock.com
Q:
|
Who
will solicit and pay the cost of soliciting proxies? |
|
|
A:
|
The
Oxbridge Board is soliciting your proxy to vote your Class A Ordinary Shares and Class B Ordinary Shares on all matters scheduled
to come before the extraordinary general meeting. We will pay the cost of soliciting proxies for the extraordinary general meeting.
We have engaged [●] to assist in the solicitation of proxies for the extraordinary general meeting. We have agreed to
pay [●] a fee of [$_________], plus disbursements. We will reimburse [●] for reasonable out-of-pocket expenses
and will indemnify [●] and its affiliates against certain claims, liabilities, losses, damages and expenses. We will
also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of Class A Ordinary Shares
and Class B Ordinary Shares for their expenses in forwarding soliciting materials to beneficial owners of Class A Ordinary Shares
and Class B Ordinary Shares and in obtaining voting instructions from those owners. Our directors and officers may also solicit proxies
by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies. |
SUMMARY
OF THE PROXY STATEMENT/PROSPECTUS
This
summary highlights selected information from this proxy statement/prospectus and does not include all of the information that is important
to you. To better understand the Domestication, the Business Combination and the Proposals to be considered at the extraordinary general
meeting, you should read this entire proxy statement/prospectus carefully, including the annexes. See also the section entitled “Where
You Can Find Additional Information.”
Parties
to the Business Combination
Oxbridge
Oxbridge
is a Cayman Islands exempted company formed on April 12, 2021 for the purpose of effecting a merger, amalgamation, share exchange, asset
acquisition, share purchase, reorganization or similar business combination involving Oxbridge and one or more businesses. Upon the Closing,
we intend to change our name from “Oxbridge Acquisition Corp.” to “Jet.AI Inc.”
Our
Class A Ordinary Shares, public warrants and Oxbridge Units, consisting of one Class A Ordinary Share and one warrant, are traded on
Nasdaq under the ticker symbols “OXAC,” “OXACW” and “OXACU,” respectively. We have applied to
list the Jet.AI Common Stock, the Jet.AI Warrants and the Merger Consideration Warrants on Nasdaq under the
symbols “PJ,” “PJAIW” and “PJAIZ,” respectively, upon the Closing. The Jet.AI Units will
automatically separate into the component securities upon consummation of the Business Combination and, as a result, will no longer
trade as a separate security.
The
mailing address of Oxbridge’s principal executive office is Suite 201, 42 Edward Street, George Town, Grand Cayman, Cayman Islands,
KY1-9006, and our telephone number is (345) 749-7570.
Jet
Token
Jet
Token, a Delaware corporation, was founded in 2018 by Michael Winston, its Executive Chairman. Jet Token, directly and indirectly through
its subsidiaries, is principally involved in (i) the sale of fractional and whole interests in aircraft, (ii) the sale of jet cards,
which enable holders to use certain of Jet Token’s and other’s aircraft at agreed-upon rates, (iii) the operation of a proprietary
booking platform (the “App”), which functions as a prospecting and quoting platform to arrange private jet travel with third
party carriers as well as via Jet Token’s leased and managed aircraft, for Part 135 (whole aircraft charter) and Part 380 (by the
seat charter), and (iv) since January 2023, joint ownership, alongside its existing operating partner, Cirrus, of 380 Software LLC, which
supplies the technology to sell individual seats on empty legs on the Cirrus fleet of aircraft.
For
more information about Jet Token, see the sections entitled “Management’s Discussion and Analysis of Financial Condition
and Results of Operations of Jet Token” and “Information About Jet Token” and the financial statements of Jet Token
included herein.
The
Domestication
As
a condition to the consummation of the Business Combination, the Oxbridge Board has unanimously approved a change of Oxbridge’s
jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation
incorporated under the laws of the State of Delaware (the “Domestication”).
As
a result of and upon the effective time of the Domestication, prior to the Effective Time: (a) each then issued and outstanding Class
A Ordinary Share will convert automatically, on a one-for-one basis, into a share of Jet.AI Common Stock; (b) each then issued
and outstanding Class B Ordinary Share will convert automatically, on a one-for-one basis, into a share of Jet.AI Common Stock;
(c) each then issued and outstanding Oxbridge Warrant will convert automatically into a Jet.AI Warrant to purchase one share of Jet.AI
Common Stock pursuant to the Warrant Agreement; (d) each then issued and outstanding Oxbridge Unit will convert automatically into
a Jet.AI Unit, each consisting of one share of Jet.AI Common Stock and one Jet.AI Warrant; and (e) after its Domestication, Oxbridge
will immediately be renamed “Jet.AI Inc.” For additional information about the Domestication, please see the section entitled
“Proposal No. 2 — The Domestication Proposal” in the accompanying proxy statement/prospectus.
The
Business Combination
On
February 24, 2023, we entered into the Business Combination Agreement with First Merger Sub, Second Merger Sub and Jet Token. Pursuant
to the Business Combination Agreement, and subject to the terms and conditions contained therein, First Merger Sub will merge with and
into Jet Token, with Jet Token surviving the First Merger as a wholly owned subsidiary of Jet.AI, and as soon as practicable, but in
any event within three days following the Effective Time, Jet Token (as the surviving entity of the First Merger) will merge with and
into Second Merger Sub, with Second Merger Sub surviving the Second Merger as a wholly owned subsidiary of Jet.AI.
Immediately
prior to the Effective Time and subject to receipt of the requisite approval of Jet Token’s Stockholders, Jet Token will cause
each share of Jet Token Preferred Stock that is issued and outstanding immediately prior to the Effective Time to be automatically converted
into shares of Jet Token Voting Common Stock at the then-effective conversion rate in accordance with the terms of the Jet Token Charter.
Following the Conversion, there will be no outstanding shares of Jet Token Preferred Stock and each holder of Jet Token Preferred Stock
will thereafter cease to have any rights with respect to such securities.
At
the Effective Time, by virtue of the Business Combination and without any action on the part of Oxbridge, First Merger Sub, Second Merger
Sub, Jet Token or the holders of any of Jet Token’s securities:
|
● |
each
outstanding share of Jet Token Common Stock, including each share of Jet Token Preferred Stock that will be converted into shares
of Jet Token Common Stock immediately prior to the Effective Time, will be cancelled and automatically converted into the right to
receive (x) the number of shares of Jet.AI Common Stock equal to the Stock Exchange Ratio, and (y) the number of Merger Consideration
Warrants equal to the Warrant Exchange Ratio; |
|
● |
each
Jet Token Option, whether or not exercisable and whether or not vested, that is outstanding immediately prior to the Effective Time
will automatically be converted into an option to purchase a number of Jet.AI Options based on the Option Exchange Ratio; |
|
|
|
|
● |
each
Jet Token Warrant issued and outstanding immediately prior to the Effective Time shall be automatically converted into a warrant
to acquire (x) a number of shares of Jet.AI Common Stock equal to the Stock Exchange Ratio and (y) a number of Merger Consideration
Warrants equal to the Warrant Exchange Ratio; |
|
|
|
|
● |
each
Jet Token RSU Award that is outstanding immediately prior to the Effective Time will be converted into a Jet.AI RSU Award with respect
to a number of RSUs based on the applicable exchange ratio. |
For
more information about the Business Combination Agreement and the Business Combination and other transactions contemplated thereby, see
the section entitled “The Business Combination.”
Conditions
to the Closing
The
obligations of Jet Token, Oxbridge, First Merger Sub and Second Merger Sub to consummate the Business Combination are subject to the
satisfaction or waiver (where permissible) at or prior to the Effective Time of the following conditions:
|
● |
the
written consent of the requisite stockholders of Jet Token (the “Written Consent Parties”) in favor of the approval and
adoption of the Business Combination Agreement, the Business Combination, the Conversion and all other transactions contemplated
by the Business Combination Agreement (the “Written Consent”) having been delivered to Oxbridge; |
|
|
|
|
● |
the
Condition Precedent Proposals having each been approved and adopted by the requisite affirmative vote of Oxbridge shareholders at
the extraordinary general meeting in accordance with this proxy statement/prospectus, the DGCL, Cayman Islands law, Oxbridge’s
Existing Organizational Documents and the rules and regulations of Nasdaq; |
|
|
|
|
● |
no
governmental authority having enacted, issued, promulgated, enforced or entered any law, rule, regulation, judgment, decree, executive
order or award which is then in effect and has the effect of making the transactions contemplated by the Business Combination Agreement
illegal or otherwise prohibiting the consummation of the Business Combination and such transactions; |
|
|
|
|
● |
all
required filings under the HSR Act having been completed and any applicable waiting period (and any extension thereof) applicable
to the consummation of the Business Combination under the HSR Act having expired or been terminated; |
|
|
|
|
● |
the
Registration Statement on Form S-4 (the “Registration Statement”) of which this proxy statement/prospectus forms a part
having been declared effective and no stop order suspending the effectiveness of the Registration Statement being in effect, and
no proceedings for purposes of suspending the effectiveness of the Registration Statement having been initiated or threatened by
the SEC; |
|
|
|
|
● |
the
shares of Jet.AI Common Stock to be issued pursuant to the Business Combination Agreement and in connection with the Domestication
having been listed on Nasdaq, or another national securities exchange mutually agreed to by the parties, as of the Closing Date; |
|
|
|
|
● |
Oxbridge
having at least $5,000,001 of net tangible assets after giving effect to the redemption of public shares by Oxbridge’s public
shareholders, in accordance with the Existing Organizational Documents; and |
|
|
|
|
● |
the
period for exercising appraisal rights pursuant to Section 262 of the DGCL having lapsed and the holders of not more than one percent
(1%) of the issued and outstanding shares of Jet Token Common Stock (including shares of Jet Token Common Stock issuable upon conversion
of Jet Token Preferred Stock) shall have demanded properly in writing appraisal or dissenters’ rights for such Jet Token Common
Stock in accordance with Section 262 of the DGCL. |
The
obligations of Oxbridge, First Merger Sub and Second Merger Sub to consummate the Business Combination are subject to the satisfaction
or waiver (where permissible) at or prior to the Effective Time of the following additional conditions:
|
● |
the
accuracy of the representations and warranties of Jet Token as determined in accordance with the Business Combination Agreement; |
|
● |
Jet
Token having performed or complied in all material respects with all agreements and covenants required by the Business Combination
Agreement to be performed or complied with by it on or prior to the Effective Time; |
|
|
|
|
● |
Jet
Token having delivered to Oxbridge a customary officer’s certificate, dated as of the Closing, certifying as to the satisfaction
of certain conditions specified in the Business Combination Agreement; |
|
|
|
|
● |
no
Jet Token Material Adverse Effect (as defined below) having occurred between the date of the Business Combination Agreement and the
Effective Time; and |
|
|
|
|
● |
other
than those persons identified in the Business Combination Agreement as continuing directors, all members of the Jet Token Board and
the boards of directors of its subsidiaries shall have executed written resignations effective as of the Effective Time. |
The
obligations of Jet Token to consummate the Business Combination are subject to the satisfaction or waiver (where permissible) at or prior
to Effective Time of the following additional conditions:
|
● |
the
accuracy of the representations and warranties of Oxbridge, First Merger Sub and Second Merger Sub as determined in accordance with
the Business Combination Agreement; |
|
|
|
|
● |
each
of Oxbridge, First Merger Sub and Second Merger Sub having performed or complied in all material respects with all agreements and
covenants required by the Business Combination Agreement to be performed or complied with by them on or prior to the Effective Time; |
|
|
|
|
● |
Oxbridge
having delivered to Jet Token a certificate, dated the date of the Closing, signed by the President of Oxbridge, certifying as to
the satisfaction of certain conditions specified in the Business Combination Agreement; |
|
|
|
|
● |
no
Oxbridge Material Adverse Effect (as defined below) having occurred between the date of the Business Combination Agreement and the
Effective Time; |
|
|
|
|
● |
other
than those persons identified in the Business Combination Agreement as continuing directors, all members of the Oxbridge Board shall
have executed written resignations effective as of the Effective Time; |
|
|
|
|
● |
as
of the Closing, after distribution of the funds in the Trust Account and deducting all amounts to be paid pursuant to the exercise
of redemption rights of public shareholders and expenses paid or required to be paid in connection with the Business Combination
(including underwriting commissions), taking into account any liabilities that have accrued prior to the Closing but for which payment
will be due, or deferred until, after the Closing, Jet.AI having cash on hand equal to or in excess of $5,000,000;
and |
|
|
|
|
● |
the
Domestication having been completed. |
Regulatory
Matters
Neither
Oxbridge nor Jet Token is aware of any material regulatory approvals or actions that are required for completion of the Business Combination.
It is presently contemplated that if any additional regulatory approvals or actions are required, those approvals or actions will be
sought. There can be no assurance, however, that any such approvals or actions will be obtained.
Related
Agreements
Lock-Up
Agreements
All
of the Founder Shares are subject to a lock-up and would be released only if specified conditions were met. In particular, subject to
certain limited exceptions, all Founder Shares would be subject to a lock-up during the period commencing from the Closing and
ending on the earliest of (A) one (1) year after the date of the Closing and (B) subsequent to the Business Combination, (x) if the closing
price of the common stock equals or exceeds $12.00 per unit (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination or
(y) the date after the Closing on which Jet.AI completes a liquidation, merger, stock exchange, or other similar transaction with an
unaffiliated third party that results in all of Jet.AI’s stockholders having the right to exchange their shares of common stock
for cash, securities, or other property.
Additionally,
the Per Share Stock Merger Consideration and the Merger Consider Warrants issued to Michael Winston and George Murnane in connection
with the Business Combination would be subject to the same lock-up restrictions as the Founder Shares.
Interests
of Certain Persons in the Business Combination
Interests
of Sponsor and Oxbridge Directors and Officers
In
considering the recommendation of the Oxbridge Board to vote in favor of the Business Combination, shareholders should be aware that,
aside from their interests as shareholders, our Sponsor and certain of our directors and officers have interests in the Business Combination
that are different from, or in addition to, those of other shareholders generally. Our directors were aware of and considered these interests,
among other matters, in evaluating the Business Combination, and in recommending to shareholders that they approve the Business Combination.
Shareholders should take these interests into account in deciding whether to approve the Business Combination. These interests include,
among other things:
| ● | the
fact that our Sponsor owns 2,875,000 Founder Shares, which were initially acquired prior
to Oxbridge’s IPO and for an aggregate purchase price of $25,000, and Oxbridge’s
directors and officers have a pecuniary interest in such Founder Shares through their ownership
interest in the Sponsor. Such securities will have a significantly higher value at the time
of the Business Combination, which if unrestricted and freely tradable would be valued at
approximately [$ ], based on the closing price of our Class A Ordinary Shares of [$ ] per
share on [__________, 2023]. In addition, the Sponsor paid an aggregate of $4,897,500 for
4,897,500 Private Placement Warrants at a price of $1.00 per warrant. Such Private Placement
Warrants had an aggregate market value of [$________] based on the last sale price of [$_______]
per warrant on Nasdaq on [__________, 2023]. If Oxbridge does not consummate the Business
Combination or another initial business combination by August 16, 2023, and Oxbridge is therefore
required to be liquidated, these shares would be worthless, as Founder Shares are not entitled
to participate in any redemption or liquidation of the Trust Account; |
| | |
| ● | the
fact that Oxbridge’s officers and directors have an aggregate of $953,552 invested
in the Sponsor, which will be lost in the event that the Business Combination is not approved
and concluded; |
| | |
| ● | the
fact that given the differential in the purchase price that our Sponsor paid for the Founder Shares as compared to the price of the
Units sold in the IPO and the substantial number of shares of Jet.AI Common Stock that our Sponsor will receive upon conversion of
the Founder Shares in connection with the Business Combination, our Sponsor and its affiliates may earn a positive rate of return on
their investment even if the Jet.AI Common Stock trades below the price initially paid for the Units in the IPO and the public
shareholders experience a negative rate of return following the completion of the Business Combination; |
| | |
| ● | the
fact that our Sponsor, officers and directors have agreed not to redeem any Class A Ordinary
Shares held by them in connection with a shareholder vote to approve the Business Combination; |
| | |
| ● | if
the Trust Account is liquidated, including in the event we are unable to complete an Initial
Business Combination within the required time period, our Sponsor has agreed to indemnify
us to ensure that the proceeds in the Trust Account are not reduced below [$10.15] per public
share, or such lesser amount per public share as is in the Trust Account on the liquidation
date, by the claims of (a) any third party (other than our independent registered public
accounting firm) for services rendered or products sold to us or (b) a prospective target
business with which we have entered into a letter of intent, confidentiality or other similar
agreement or business combination agreement, but only if such a third party or target business
has not executed a waiver of all rights to seek access to the Trust Account; |
| | |
| ● | the
anticipated continuation of Jay Madhu and Wrendon Timothy as directors after the Business
Combination, and as such, after the proposed Business Combination is consummated, Mr. Madhu
and Mr. Timothy will in the future receive any cash fees, stock options or stock awards that
the Jet.AI Board determines to pay to its directors; |
| | |
| ● | the
fact that our Sponsor, officers and directors will be reimbursed for out-of-pocket expenses
incurred in connection with activities on our behalf, such as identifying potential target
businesses and performing due diligence on suitable business combinations; and |
| | |
| ● | the
fact that our Sponsor will lose their entire investment in us if an Initial Business Combination
is not completed. In addition, our Sponsor has made available to us a loan of $575,000 to
extend the deadline for completion of our Initial Business Combination from November 16,
2022 to August 16, 2023, all of which is outstanding as of [ ], 2023. The ability of Oxbridge
to repay such loan is dependent upon the completion of our Initial Business Combination. |
As of [__________, 2023], the
Sponsor and its affiliates had an aggregate of [$__________] at risk that depends on completion of an initial business combination, including
[$___________] it invested in securities, [$_________] of unpaid loans and outstanding administrative services fees. As of [________,
2023], there was no unreimbursed out-of-pocket expenses incurred by the sponsor or its affiliates. These interests may have influenced
Oxbridge’s directors in making their recommendation that you vote in favor of the approval of the Business Combination.
Reasons
for the Approval of the Business Combination
After
careful consideration, the Oxbridge Board recommends that our shareholders vote “FOR” the approval of the Business Combination
Proposal.
For
a more complete description of our reasons for the approval of the Business Combination and the recommendation of the Oxbridge Board,
see the subsections entitled “The Business Combination — The Oxbridge Board’s Reasons for the Approval of the Business
Combination.”
Redemption
Rights
Pursuant
to the Existing Organizational Documents, a public shareholder may request that Oxbridge redeem all or a portion of its public shares
for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public
shares to be redeemed only if you:
|
● |
hold
public shares or, if you hold public shares through Oxbridge Units, you elect to separate your Oxbridge Units into the underlying
public shares and public warrants prior to exercising your redemption rights with respect to the public shares; |
|
|
|
|
● |
submit
a written request to Continental Stock Transfer & Trust Company, Oxbridge’s transfer agent, in which you (i) request that
Jet.AI redeem all or a portion of your public shares for cash, and (ii) identify yourself as the beneficial holder of the public
shares and provide your legal name, phone number and address; and |
|
|
|
|
● |
deliver
your public shares to Continental Stock Transfer & Trust Company, Oxbridge’s transfer agent, physically or electronically
through The Depository Trust Company (“DTC”). |
Holders
must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern time,
on [ , 2023] (two business days before the extraordinary general meeting) in order for their shares to be redeemed.
Holders
of Oxbridge Units must elect to separate the Oxbridge Units into the underlying Class A Ordinary Shares and public warrants prior to
exercising redemption rights with respect to the public shares. If public shareholders hold their Oxbridge Units in an account at a brokerage
firm or bank, such public shareholders must notify their broker or bank that they elect to separate the units into the underlying public
shares and public warrants, or if a holder holds Oxbridge Units registered in its own name, the holder must contact Continental Stock
Transfer & Trust Company, Oxbridge’s transfer agent, directly and instruct it to do so. The redemption rights include the requirement
that a holder must identify itself to Oxbridge in order to validly redeem its shares. Public shareholders (other than the initial
shareholders) may elect to redeem their public shares even if they vote “FOR” the Business Combination Proposal. If the
Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business
Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares
that it holds and timely delivers its shares to Continental Stock Transfer & Trust Company, Jet.AI will redeem such public shares
for a per-share price, payable in cash, equal to the pro rata portion of the Trust Account relating to such public shares, calculated
as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of [ ,
2023], this would have amounted to $10.89 per issued and outstanding public share. If a public shareholder exercises its redemption
rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption
will take place following the Domestication and, accordingly, it is shares of Jet.AI Common Stock that will be redeemed immediately
after consummation of the Business Combination. See the subsection entitled “Extraordinary General Meeting — Redemption Rights”
for the procedures to be followed if you wish to redeem your shares for cash.
Ownership
of Jet.AI After the Closing
We
anticipate that, upon completion of the Business Combination, the ownership of Jet.AI will be as follows:
| |
Shares of
Jet.AI
Common
Stock | | |
% of Total
Jet.AI
Common
Stock | |
Historical Rollover Shareholders | |
| 4,500,000 | | |
| 51.86 | |
Public Shareholders(1) | |
| 1,301,952 | | |
| 15.00 | |
Initial Shareholders | |
| 2,875,000 | | |
| 33.14 | |
Total | |
| 8,676,952 | | |
| 100.0 | % |
|
(1) |
Includes
115,000 shares of Class A Ordinary Shares issued to Maxim Group, LLC, the representative
to the underwriters in our initial public offering, which are not redeemable pursuant to an agreement between Maxim and the
Company. |
The
number of shares and the interests set forth above (a) assume (i) that no public shareholders elect to have their public shares redeemed,
(ii) that there are no other issuances of equity interests of Oxbridge or Jet Token, (iii) none of Oxbridge’s initial shareholders
or the Historical Rollover Shareholders purchase Class A Ordinary Shares in the open market and (iv) that there are no exercises of Jet
Token Options, Jet Token Warrants or Jet Token RSU Awards and (b) do not take into account Oxbridge Warrants or Merger Consideration
Warrants that will remain outstanding following the Business Combination and which may be exercised at a later date. As a result of the
Business Combination, the economic and voting interests of our public shareholders will decrease.
If
we assume the maximum redemptions scenario described under the section entitled “Unaudited Pro Forma Condensed Combined Financial
Information — Note 1 — Basis of Presentation,” i.e., 237,734 public shares are redeemed, and the assumptions set forth
in the foregoing clauses (a)(ii)–(iv) and (b) remain true, the ownership of Jet.AI upon completion of the Business Combination
will be as follows:
| |
Shares of
Jet.AI
Common
Stock | | |
% of Total
Jet.AI
Common
Stock | |
Historical Rollover Shareholders | |
| 4,500,000 | | |
| 53.32 | |
Public Shareholders(1) | |
| 1,064,218 | | |
| 12.61 | |
Initial Shareholders | |
| 2,875,000 | | |
| 34.07 | |
Total | |
| 8,439,218 | | |
| 100.0 | % |
|
(1) |
Includes
115,000 shares of Class A Ordinary Shares issued to Maxim Group, LLC, the representative
to the underwriters in our initial public offering, which are not redeemable pursuant to an agreement between Maxim and the
Company. |
The
ownership percentages with respect to Jet.AI set forth above do not take into account Oxbridge Warrants or Merger Consideration Warrants
that will remain outstanding immediately following the Business Combination, but do include the Founder Shares, which will convert into
Jet.AI Common Stock upon an Initial Business Combination. If the facts are different than these assumptions, the percentage ownership
retained by Oxbridge’s existing shareholders in Jet.AI following the Business Combination will be different. For example, if we
assume that all outstanding 11,500,000 public warrants, 5,760,000 private placement warrants and 7,353,000 Merger Consideration
Warrants were exercisable and exercised following completion of the Business Combination and further assume that no public shareholders
elect to have their public shares redeemed (and each other assumption set forth in the preceding paragraph remains the same), then the
ownership of Jet.AI would be as follows:
| |
Shares of
Jet.AI
Common
Stock | | |
% of Total
Jet.AI
Common
Stock | |
Historical Rollover Shareholders | |
| 11,853,000 | | |
| 35.60 | |
Public Shareholders(1) | |
| 12,801,952 | | |
| 38.46 | |
Initial Shareholders(2) | |
| 8,635,000 | | |
| 25.94 | |
Total | |
| 33,289,952 | | |
| 100.0 | % |
|
(1) |
Includes
115,000 shares of Class A Ordinary Shares issued to Maxim Group, LLC, the representative
to the underwriters in our initial public offering, which are not redeemable pursuant to an agreement between Maxim and the
Company. |
|
|
|
|
(2) |
Includes
862,500 shares issuable to Maxim Group, LLC, the representative to the underwriters
in our initial public offering, upon exercise of private placement warrants. |
The
Oxbridge Warrants will become exercisable on the later of (a) 30 days after the completion of the Business Combination (or any other
Initial Business Combination) and (b) 12 months from the closing of our IPO and will expire five years after the completion of an Initial
Business Combination or earlier upon their redemption or liquidation.
The
Merger Consideration Warrants will become exercisable on the completion of the Business Combination.
Additionally,
if we (a) assume (i) that no public shareholders elect to have their public shares redeemed, (ii) that there are no other issuances of
equity interests of Oxbridge or Jet Token, (iii) none of Oxbridge’s initial shareholders or the Historical Rollover Shareholders
purchase Class A Ordinary Shares in the open market, (iv) the issuance of all 3,418,408 shares of Jet.AI Common Stock that
will be reserved in respect of Jet.AI Options issued in exchange for outstanding pre-merger Jet Token Options and in respect of Jet.AI
RSU Awards issued in exchange for outstanding pre-merger Jet Token RSU Awards, and (b) do not take into account Oxbridge Warrants or
Merger Consideration Warrants that will remain outstanding following the Business Combination and may be exercised at a later date, then
the ownership of Jet.AI would be as follows:
| |
Shares of Jet.AI
Common Stock | | |
% of Total Jet.AI
Common Stock | |
Historical Rollover Shareholders | |
| 7,918,408 | | |
| 65.47 | |
Public Shareholders(1) | |
| 1,301,952 | | |
| 10.76 | |
Initial Shareholders | |
| 2,875,000 | | |
| 23.77 | |
Total | |
| 12,095,360 | | |
| 100.0 | % |
|
(1) |
Includes
115,000 shares of Class A Ordinary Shares issued to Maxim Group, LLC, the representative
to the underwriters in our initial public offering, which are not redeemable pursuant to an agreement between Maxim and the
Company. |
Please
see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for further information.
Board
of Directors of Jet.AI Following the Business Combination
Assuming
the Director Election Proposal is approved at the extraordinary general meeting, we expect the Jet.AI Board to be comprised of Michael
Winston, George Murnane, Jay Madhu, Wrendon Timothy and three other directors.
Expected
Accounting Treatment
The
Business Combination will be accounted for as a reverse recapitalization under U.S. GAAP. Under this method of accounting, Oxbridge will
be treated as the “acquired” company for financial reporting purposes. See the subsection entitled “The Business Combination
— Expected Accounting Treatment.”
Appraisal
Rights
Appraisal
Rights of Oxbridge Shareholders
There
are no appraisal rights available to holders of Class A Ordinary Shares, Class B Ordinary Shares or Oxbridge Warrants in connection with
the Business Combination or Domestication under Cayman Islands law or the DGCL.
Other
Oxbridge Proposals
In
addition to the proposal to approve by ordinary resolution and adopt the Business Combination Agreement and the Business Combination,
our shareholders will be asked to vote upon (a) a proposal to approve by special resolution the change of Oxbridge’s jurisdiction
of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated
under the laws of the State of Delaware; (b) a proposal to approve by special resolution and adopt the Proposed Organizational Documents;
(c) ten separate proposals to approve, on a non-binding advisory basis, by ordinary resolution material differences between the
Existing Organizational Documents and the Proposed Certificate of Incorporation and the Proposed Bylaws of Jet.AI; (d) a proposal to
approve by ordinary resolution and adopt the Omnibus Incentive Plan; (e) a proposal for the holders of the Class B Ordinary Shares to
elect, effective immediately after the effective time of the Second Merger, two directors to serve until the 2023 annual meeting of stockholders,
two directors to serve until the 2024 annual meeting of stockholders and three directors to serve until the 2025 annual meeting of stockholders,
and until their respective successors are duly elected and qualified, subject to such directors’ earlier death, resignation, retirement,
disqualification or removal; and (f) a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting
to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are
insufficient votes for, or otherwise in connection with, the approval of one or more Proposals at the extraordinary general meeting.
For more information, see the sections entitled “Proposal No. 1 — The Business Combination Proposal,” “Proposal
No. 2 — The Domestication Proposal,” “Proposal No. 3 — The Organizational Documents Proposal,” “Proposal
No. 4 — The Advisory Organizational Documents Proposals,” “Proposal No. 5 — The Omnibus Incentive Plan Proposal,”
Proposal No. 6 — The Director Election Proposal” and “Proposal No. 7 — The Adjournment Proposal” for more
information.
Date,
Time and Place of Extraordinary General Meeting
[The
extraordinary general meeting will be held in person on ,
2023, at , Eastern time, at Suite
201, 42 Edward Street, George Town, Grand Cayman, Cayman Islands, KY1-9006, or such other date, time and place to which such meeting
may be adjourned, to consider and vote upon the Proposals.]
Voting
Power; Record Date
You
will be entitled to vote or direct votes to be cast at the virtual extraordinary general meeting if you owned Class A Ordinary Shares
or Class B Ordinary Shares at the close of business on [ , 2023], which is the record date for the extraordinary general meeting. You
are entitled to one vote for each Class A Ordinary Shares or Class B Ordinary Share that you owned as of the close of business on the
record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker,
bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. As of the close of business
on the record date, there were [1,301,952] outstanding Class A Ordinary Shares, which are held by our public shareholders, and [2,875,000]
outstanding Class B Ordinary Shares, which are held by our initial shareholders.
Proxy
Solicitation
Proxies
may be solicited by mail. We have engaged [●] to assist in the solicitation of proxies. If a shareholder grants a proxy,
it may still vote its shares online if it revokes its proxy before the extraordinary general meeting. A shareholder may also change its
vote by submitting a later-dated proxy as described in the subsection entitled “Extraordinary General Meeting — Revoking
Your Proxy.”
Quorum
and Required Vote for Proposals for the Extraordinary General Meeting
A
quorum of our shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if holders
of one-third of our Class A Ordinary Shares and Class B Ordinary Shares entitled to vote thereat attend in person, online or by
proxy at the extraordinary general meeting. Abstentions will count as present for the purposes of establishing a quorum.
The
approval of the Business Combination Proposal, the Advisory Organizational Documents Proposals, the Omnibus Incentive Plan Proposal,
the Director Election Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative
vote (in person, online or by proxy) of the holders of a majority of the Class A Ordinary Shares and Class B Ordinary Shares entitled
to vote and actually casting votes thereon at the extraordinary general meeting, voting as a single class. Under the Existing Organizational
Documents, only the holders of Class B Ordinary Shares are entitled to vote on the election of directors and therefore the Director Election
Proposal. Approval of the Domestication Proposal and the Organizational Documents Proposal requires a special resolution under Cayman
Islands law, being the affirmative vote (in person, online or by proxy) of the holders of at least two-thirds of the Class A Ordinary
Shares and Class B Ordinary Shares entitled to vote and actually casting votes thereon at the extraordinary general meeting, voting as
a single class. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count
as votes cast at the extraordinary general meeting. Accordingly, a shareholder’s failure to vote in person, online or by proxy
at the extraordinary general meeting or an abstention from voting will have no effect on the outcome of the vote on any of the Proposals.
The
Closing is conditioned on the approval of the Condition Precedent Proposals at the extraordinary general meeting. Each of the Condition
Precedent Proposals is cross-conditioned on each of the other Condition Precedent Proposals. The Adjournment Proposal is not conditioned
on the approval of any other proposal set forth in this proxy statement/prospectus.
Recommendation
to Oxbridge Shareholders
The
Oxbridge Board believes that each of the Business Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal,
the Advisory Organizational Documents Proposals, the Omnibus Incentive Plan Proposal, the Director Election Proposal and the Adjournment
Proposal is in the best interests of Oxbridge and our shareholders and recommends that our shareholders vote “FOR” each Proposal
(or in the case of the Director Election Proposal, “FOR ALL NOMINEES”) being submitted to a vote of the shareholders at the
extraordinary general meeting. For more information, see the sections entitled “Proposal No. 1 — The Business Combination
Proposal,” “Proposal No. 2 — The Domestication Proposal,” “Proposal No. 3 — The Organizational Documents
Proposal,” “Proposal No. 4 — The Advisory Organizational Documents Proposals,” “Proposal No. 5 —The
Omnibus Incentive Plan Proposal,” “Proposal No. 6 — The Director Election Proposal” and “Proposal No. 7
— The Adjournment Proposal.”
When
you consider the recommendation of the Oxbridge Board in favor of approval of these Proposals, you should keep in mind that, aside from
their interests as shareholders, our Sponsor and certain of our directors and officers have interests in the Business Combination that
are different from, or in addition to, your interests as a shareholder. Please see the subsection entitled “The Business Combination
— Interests of Certain Persons in the Business Combination.”
Summary
Risk Factors
In
evaluating the Proposals set forth in this proxy statement/prospectus, you should carefully read this proxy statement/prospectus, including
the annexes, and especially consider the factors discussed in the section entitled “Risk Factors.” Some of the risks related
to Jet Token’s business and industry and the Business Combination are summarized below.
Risks
Related to Projections and Forward-Looking Statements Included in this Proxy Statement/Prospectus
|
● |
The
projections provided to the Oxbridge Board and contained in this proxy statement/prospectus are forward-looking statements that rely
upon estimates and assumptions that are subject to uncertainty. |
|
|
|
|
● |
The
forward-looking statements contained in this proxy statement/prospectus rely upon estimates and assumptions that are subject to uncertainty. |
Risks
Related to Jet Token’s Operating Environment
|
● |
Demand
for Jet Token’s product and services may decline due to factors beyond its control. |
|
|
|
|
● |
Jet
Token faces a high level of competition with numerous market participants with greater financial resources and operating experience. |
|
|
|
|
● |
Aviation
businesses are often affected by factors beyond their control including: air traffic congestion at airports; airport slot restrictions;
air traffic control inefficiencies; natural disasters; adverse weather conditions, such as hurricanes or blizzards; increased and
changing security measures; changing regulatory and governmental requirements; new or changing travel-related taxes; or the outbreak
of disease; any of which could have a material adverse effect on Jet Token’s business, results of operations and financial
condition. |
|
|
|
|
● |
Jet
Token’s business is primarily focused on certain targeted geographic regions, making it vulnerable to risks associated with
having geographically concentrated operations. |
|
|
|
|
● |
The
operation of aircraft is subject to various risks, and failure to maintain an acceptable safety record may have an adverse impact
on Jet Token’s ability to obtain and retain customers. |
|
|
|
|
● |
The
supply of pilots to the airline industry is limited and may negatively affect Jet Token’s operations and financial condition.
Increases in labor costs may adversely affect Jet Token’s business, results of operations and financial condition. |
|
|
|
|
● |
Pilot
attrition may negatively affect Jet Token’s operations and financial condition. |
|
|
|
|
● |
Jet
Token is exposed to operational disruptions due to maintenance. |
|
|
|
|
● |
Significant
increases in fuel costs could have a material adverse effect on Jet Token’s business, financial condition and results of operations. |
|
|
|
|
● |
If
efforts to continue to build a strong brand identity and improve member satisfaction and loyalty are not successful, Jet Token may
not be able to attract or retain members, and its operating results may be adversely affected. |
Risks
Related to Jet Token’s Business
|
● |
Jet
Token is an early stage company with a limited operating history. |
|
|
|
|
● |
Jet
Token may not be able to successfully implement its growth strategies. |
|
|
|
|
● |
Jet
Token’s operating results are expected to be difficult to predict based on a number of factors that also will affect its long-term
performance. |
|
|
|
|
● |
If
Jet Token cannot internally or externally finance its aircraft or generate sufficient funds to make payments to external financing
sources, Jet Token may not succeed. |
|
|
|
|
● |
Jet
Token may not have enough capital as needed and may be required to raise more capital and the terms of subsequent financings may
adversely impact your investment. |
|
|
|
|
● |
The
prices of blockchain currencies that Jet Token accepts as payment are extremely volatile. Fluctuations in the price of blockchain
currencies and digital assets generally could materially and adversely affect Jet Token’s business. |
|
|
|
|
● |
If
Jet Token is not able to structure its Jet Token in accordance with applicable law, including federal securities laws, Jet Token
may not be able to proceed with one element of its business as planned. |
|
|
|
|
● |
Changes
in the regulatory environment governing digital assets could make it difficult or impracticable to create and sell Jet Token which
may have a material impact on Jet Token’s revenues. |
|
|
|
|
● |
Jet
Token’s business and reputation rely on, and will continue to rely on, third parties. |
|
● |
Jet
Token relies on third-party Internet, mobile, and other products and services to deliver its mobile and web applications and flight
management system offerings to customers, and any disruption of, or interference with, Jet Token’s use of those services could
adversely affect its business, financial condition, results of operations, and customers. |
|
|
|
|
● |
Jet
Token relies on third parties maintaining open marketplaces to distribute its mobile and web applications. |
|
|
|
|
● |
Jet
Token may be unable to adequately protect its intellectual property interests or may be found infringing on intellectual property
interests of others. |
Risks
Relating to Ownership of Jet.AI Common Stock and Jet.AI Warrants after the Closing of the Business Combination
|
● |
Jet
Token has never paid cash dividends on its capital stock, and Jet.AI does not anticipate paying dividends in the foreseeable future. |
|
|
|
|
● |
The
stock price following the Closing of the Business Combination may be volatile, and you may not be able to sell shares at or above
the price at the Closing. |
|
|
|
|
● |
There
is no guarantee that the Jet.AI Warrants will ever be in the money, and they may expire worthless. |
|
|
|
|
● |
Anti-takeover
provisions contained in the Proposed Organizational Documents and applicable laws could impair a takeover attempt. |
|
|
|
|
● |
Jet.AI
is subject to risks related to taxation in the United States. |
Risks
Related to Oxbridge and the Business Combination
|
● |
Following
the consummation of the Business Combination, Jet.AI’s sole material asset will be its direct and indirect interests in its
subsidiaries and, accordingly, Jet.AI will be dependent upon distributions from its subsidiaries to pay taxes and cover its corporate
and other overhead expenses and pay dividends, if any, on the Jet.AI Common Stock. |
|
|
|
|
● |
Subsequent
to the consummation of the Business Combination, Jet.AI may be required to take write-downs or write-offs, restructuring and impairment
or other charges that could have a significant negative effect on its financial condition, results of operations and stock price,
which could cause you to lose some or all of your investment. |
|
|
|
|
● |
Our
Sponsor, directors and officers have agreed to vote in favor of the Business Combination, regardless of how our public shareholders
vote. |
|
|
|
|
● |
Our
Sponsor and certain of our directors and officers have interests in the Business Combination that are different from, or in addition
to, those of other shareholders generally. |
|
|
|
|
● |
Our
officers and directors may have conflicts of interest in determining whether to present business opportunities to us or another entity
with which they are, or may become, affiliated. |
|
|
|
|
● |
Our
Sponsor holds a significant number of Class B Ordinary Shares and warrants. Our Sponsor will lose its entire investment in us if
we do not complete the Business Combination or any other Initial Business Combination. |
|
|
|
|
● |
We
cannot assure you that our diligence review has identified all material risks associated with the Business Combination, and you may
be less protected as an investor from any material issues with respect to Jet Token’s business, including any material omissions
or misstatements contained in the Registration Statement or this proxy statement/prospectus than an investor in an initial public
offering. |
Risks
Related to Consummation of the Domestication
|
● |
Upon
consummation of the Business Combination, the rights of the holders of Jet.AI Common Stock arising under the DGCL as well
as the Proposed Organizational Documents will differ from and may be less favorable to the rights of holders of Class A Ordinary
Shares arising under Cayman Islands law as well as the Existing Organizational Documents. |
|
|
|
|
● |
The
Proposed Organizational Documents will provide, subject to limited exceptions, that the Court of Chancery of the State of Delaware
will be the sole and exclusive forum for certain stockholder litigation matters, which could limit stockholders’ ability to
obtain a more favorable judicial forum for disputes with Jet.AI or its directors, officers, employees or stockholders. |
Risks
Related to the Redemption
|
● |
There
is no guarantee that a shareholder’s decision whether to redeem its shares for a pro rata portion of the Trust Account will
put the shareholder in a better future economic position. |
|
|
|
|
● |
If
our shareholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled
to redeem their Class A Ordinary Shares for a pro rata portion of the funds held in the Trust Account. |
|
|
|
|
● |
Shareholders
who wish to redeem their shares for a pro rata portion of the Trust Account must comply with specific requirements for redemption
that may make it more difficult for them to exercise their redemption rights prior to the deadline. |
|
|
|
|
● |
If
a public shareholder fails to receive notice of Oxbridge’s offer to redeem its public shares in connection with the Business
Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed. |
|
|
|
|
● |
If
Oxbridge is unable to consummate the Business Combination or any other Initial Business Combination within the Combination Period,
the public shareholders may be forced to wait beyond such date before redemption from the Trust Account. |
|
|
|
|
● |
The
U.S. federal income tax treatment of the redemption of Jet.AI Common Stock as a sale of such Jet.AI Common Stock depends
on a shareholder’s specific facts. |
SELECTED
HISTORICAL FINANCIAL DATA OF Jet Token
The
following selected historical financial information and other data for Jet Token set forth below should be read in conjunction with “Management’s
Discussion and Analysis of Financial Condition and Results of Operations of Jet Token” and Jet Token’s historical unaudited
and audited consolidated financial statements and the related notes thereto contained elsewhere in this proxy statement/prospectus.
The
selected historical consolidated financial information and other data presented below for the years ended December 31, 2022 and December
31, 2021 have been derived from Jet Token’s audited consolidated financial statements included elsewhere in this proxy statement/prospectus.
Statements
of Operations Data
| |
2022 | | |
2021 | |
| |
| | |
| |
Revenues | |
$ | 21,862,728 | | |
$ | 1,112,195 | |
Cost of revenues | |
| 19,803,739 | | |
| 1,383,100 | |
Gross profit (loss) | |
| 2,058,989 | | |
| (270,905 | ) |
| |
| | | |
| | |
Operating Expenses: | |
| | | |
| | |
General and administrative (including stock-based compensation of $6,492,653 and $12,690,091,
respectively) | |
| 9,230,789 | | |
| 14,879,597 | |
Sales and marketing | |
| 426,728 | | |
| 704,724 | |
Research and development | |
| 137,278 | | |
| 117,391 | |
Total operating expenses | |
| 9,794,795 | | |
| 15,701,712 | |
| |
| | | |
| | |
Operating loss | |
| (7,735,806 | ) | |
| (15,972,617 | ) |
| |
| | | |
| | |
Other income: | |
| | | |
| | |
Other income | |
| (3 | ) | |
| (207,368 | ) |
Total other income | |
| (3 | ) | |
| (207,368 | ) |
| |
| | | |
| | |
Loss before provision for income taxes | |
| (7,735,803 | ) | |
| (15,765,249 | ) |
| |
| | | |
| | |
Provision for income taxes | |
| 2,400 | | |
| - | |
| |
| | | |
| | |
Net Loss | |
$ | (7,738,203 | ) | |
$ | (15,765,249 | ) |
| |
| | | |
| | |
Weighted average shares outstanding - basic and diluted | |
| 122,747,555 | | |
| 118,503,131 | |
Net loss per share - basic and diluted | |
$ | (0.06 | ) | |
$ | (0.13 | ) |
Balance
Sheets Data
| |
2022 | | |
2021 | |
| |
| | |
| |
Assets | |
| | | |
| | |
Current assets: | |
| | | |
| | |
Cash and cash equivalents | |
$ | 1,527,391 | | |
$ | 643,494 | |
Other current assets | |
| 357,861 | | |
| 79,548 | |
Total current assets | |
| 1,885,252 | | |
| 723,042 | |
| |
| | | |
| | |
Property and equipment, net | |
| 5,814 | | |
| 7,495 | |
Intangible assets, net | |
| 155,009 | | |
| 287,711 | |
Right-of-use asset | |
| 2,081,568 | | |
| - | |
Other assets | |
| 762,976 | | |
| 1,122,789 | |
Total assets | |
$ | 4,890,619 | | |
$ | 2,141,037 | |
| |
| | | |
| | |
Liabilities and Stockholders’ Equity | |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accounts payable | |
$ | 242,933 | | |
$ | 296,201 | |
Accrued liabilities | |
| 951,689 | | |
| 116,113 | |
Deferred revenue | |
| 933,361 | | |
| 436,331 | |
Related party advances | |
| - | | |
| 200,196 | |
Lease liability, current portion | |
| 494,979 | | |
| - | |
Line of credit | |
| - | | |
| 194,727 | |
Total current liabilities | |
| 2,622,962 | | |
| 1,243,568 | |
| |
| | | |
| | |
Lease liability, net of current portion | |
| 1,531,364 | | |
| - | |
Total liabilities | |
| 4,154,326 | | |
| 1,243,568 | |
| |
| | | |
| | |
Commitments and contingencies (Note 5) | |
| - | | |
| - | |
| |
| | | |
| | |
Stockholders’ Equity | |
| | | |
| | |
Series Seed Preferred stock, 10,000,000 shares authorized, $0.0000001 par value, 683,333 and 983,333
issued and outstanding, respectively | |
| 20,500 | | |
| 29,500 | |
Series CF Non-voting Preferred stock, 25,000,000 shares authorized, 18,826,385 issued and outstanding | |
| 704,396 | | |
| 704,396 | |
Preferred Stock, 15,000,000 shares authorized, $0.0000001 par value, 0 issued and outstanding | |
| - | | |
| - | |
Common stock, 300,000,000 shares authorized, par value $0.0000001, 78,353,333 and 78,353,333 issued and outstanding, respectively | |
| 8 | | |
| 8 | |
Non-voting Common Stock, 200,000,000 shares authorized, par value $0.0000001, 46,089,886 and 42,169,330 issued and outstanding, respectively | |
| 4 | | |
| 4 | |
Subscription receivable | |
| (15,544 | ) | |
| (96,600 | ) |
Additional paid-in capital | |
| 26,682,909 | | |
| 19,177,938 | |
Accumulated deficit | |
| (26,655,980 | ) | |
| (18,917,777 | ) |
Total stockholders’ equity | |
| 736,293 | | |
| 897,469 | |
Total liabilities and stockholders’ equity | |
$ | 4,890,619 | | |
$ | 2,141,037 | |
Statements
of Cash Flows Data
| |
2022 | | |
2021 | |
| |
| | |
| |
CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | | |
| | |
Net loss | |
$ | (7,738,203 | ) | |
$ | (15,765,249 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Amortization and depreciation | |
| 134,383 | | |
| 133,608 | |
Amortization of lease financing costs | |
| - | | |
| 1,175 | |
Gain on loan forgiveness | |
| - | | |
| (207,360 | ) |
Stock-based compensation | |
| 6,492,653 | | |
| 12,690,373 | |
Non-cash operating lease costs | |
| 494,468 | | |
| - | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Accounts receivable | |
| - | | |
| 400 | |
Other current assets | |
| (278,313 | ) | |
| (28,980 | ) |
Accounts payable | |
| (53,268 | ) | |
| 15,643 | |
Accrued liabilities | |
| 835,576 | | |
| 111,480 | |
Deferred revenue | |
| 497,030 | | |
| 436,331 | |
Lease liability | |
| (480,368 | ) | |
| - | |
Net cash used in operating activities | |
| (96,042 | ) | |
| (2,612,579 | ) |
| |
| | | |
| | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |
| | | |
| | |
Purchase of property and equipment | |
| - | | |
| (8,407 | ) |
Purchase of intangible assets | |
| - | | |
| (97,978 | ) |
Return of aircraft deposit | |
| 1,093,600 | | |
| - | |
Deposits and other assets | |
| (803,112 | ) | |
| (439,750 | ) |
Net cash provided by (used in) investing activities | |
| 290,488 | | |
| (546,135 | ) |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
Proceeds - related party advances | |
| 42,000 | | |
| 200,196 | |
Repayments - related party advances | |
| (242,196 | ) | |
| - | |
Proceeds - notes payable | |
| - | | |
| 86,360 | |
Payments on line of credit | |
| (194,727 | ) | |
| (257,308 | ) |
Offering costs | |
| (1,691,386 | ) | |
| (1,221,552 | ) |
Payment of lease financing costs | |
| - | | |
| (70,500 | ) |
Preferred share redemption | |
| (225,000 | ) | |
| - | |
Proceeds from sale of Non-Voting Common Stock | |
| 3,000,760 | | |
| 2,843,790 | |
Net cash provided by financing activities | |
| 689,451 | | |
| 1,580,986 | |
| |
| | | |
| | |
Increase (decrease) in cash and cash equivalents | |
| 883,897 | | |
| (1,577,728 | ) |
Cash and cash equivalents, beginning of year | |
| 643,494 | | |
| 2,221,222 | |
Cash and cash equivalents, end of year | |
$ | 1,527,391 | | |
$ | 643,494 | |
| |
| | | |
| | |
Supplemental disclosures of cash flow information: | |
| | | |
| | |
Cash paid for interest | |
$ | - | | |
$ | - | |
Cash paid for income taxes | |
$ | 2,400 | | |
$ | - | |
| |
| | | |
| | |
Non cash investing and financing activities: | |
| | | |
| | |
Subscription receivable from sale of Non-Voting Common Stock | |
$ | 15,544 | | |
$ | 96,600 | |
Line of credit issued for offering expenses paid on behalf of the Company | |
$ | - | | |
$ | 452,035 | |
Application of equipment deposit to aircraft maintenance reserve account | |
$ | - | | |
$ | 250,000 | |
Operating lease, Right-of-use assets and liabilities | |
$ | 2,506,711 | | |
$ | - | |
SELECTED
HISTORICAL FINANCIAL DATA OF Oxbridge
The
selected historical statements of operations data of Oxbridge for the year ended December 31, 2022, and for period from April 12, 2021
(inception) through December 31, 2021, and the historical balance sheet data as of December 31, 2022 and 2021 are derived from Oxbridge’s
audited financial statements included elsewhere in this proxy statement/prospectus.
Oxbridge’s
historical results presented below are not necessarily indicative of the results for any future period. The information below is only
a summary and should be read in conjunction with the sections entitled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations of Oxbridge” and “Information about Oxbridge” and the historical financial statements,
and the notes related thereto, which are included elsewhere in this proxy statement/prospectus.
Statements
of Operations Data
(in
thousands, except share and per share data)
Statements of Operations Data: | |
Year Ended December 31,
2022 | | |
Year Ended December 31,
2021 | |
Revenue | |
$ | - | | |
$ | - | |
Loss from operations | |
| (487 | ) | |
| (86 | ) |
Interest Income on Marketable Securities | |
| 960 | | |
| - | |
Change in fair value of warrant liabilities | |
| 6,699 | | |
| (3,457 | ) |
Net income (loss) | |
| 7,176 | | |
| (3,542 | ) |
Basic and diluted net earnings (loss) per ordinary share | |
| 0.546 | | |
| (0.244 | ) |
Statements
of Balance Sheet Data:
(in
thousands, except share and per share data)
Balance Sheet Data: | |
As of December 31, 2022 | | |
As of December 31,
2021 | |
Total current assets | |
$ | 215 | | |
$ | 614 | |
Trust account | |
| 12,835 | | |
| 116,725 | |
Total assets | |
| 13,050 | | |
| 117,339 | |
Total liabilities | |
| 5,072 | | |
| 11,112 | |
Value of ordinary shares subject to redemption | |
| 12,835 | | |
| 116,725 | |
Shareholders’ deficit | |
| (4,857 | ) | |
| (10,498 | ) |
Ordinary Shares Subject to Possible Redemption | |
| 1,186,952 | | |
| 11,500,000 | |
SELECTED
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The
following selected unaudited pro forma condensed combined financial data (the “selected pro forma information”) gives effect
to the Business Combination described in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”
The Business Combination will be accounted for as a reverse recapitalization under U.S. GAAP. Under this method of accounting, Oxbridge
is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the financial
statements of Jet.AI will represent a continuation of the financial statements of Jet Token with the Business Combination being treated
as the equivalent of Jet Token issuing stock for the net assets of Oxbridge, accompanied by a recapitalization. The net assets of Oxbridge
will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination
will be presented as those of Jet Token in future reports of Jet.AI.
The
selected unaudited pro forma condensed combined balance sheet data as of December 31, 2022 gives pro forma effect to the Business Combination
as if it had occurred on December 31, 2022. The selected unaudited pro forma condensed combined statement of operations data for the
year ended December 31, 2022 gives pro forma effect to the Business Combination as if it had occurred on January 1, 2022.
The
selected pro forma information has been derived from, and should be read in conjunction with, the unaudited pro forma condensed combined
financial information of Jet.AI and the accompanying notes, in the section entitled “Unaudited Pro Forma Condensed Combined Financial
Information,” both appearing elsewhere in this proxy statement/prospectus. The unaudited pro forma condensed combined financial
information is derived from, and should be read in conjunction with, the historical financial statements of Oxbridge and Jet Token and
related notes included elsewhere in this proxy statement/prospectus. The selected pro forma information has been presented for informational
purposes only and is not necessarily indicative of what Jet.AI’s financial position or results of operations actually would have
been had the Business Combination and the other transactions contemplated by the Business Combination Agreement been completed as of
the dates indicated. In addition, the selected pro forma information does not purport to project the future financial position or operating
results of Jet.AI.
The
following table presents selected pro forma information after giving effect to the Business Combination, presented under two scenarios:
|
● |
Assuming
No Redemptions Scenario — this scenario assumes that none of the public shareholders exercise their right to have their Class
A Ordinary Shares redeemed for cash; and |
|
|
|
|
● |
Assuming
Maximum Redemptions Scenario — this scenario assumes that 237,734 Class A Ordinary Shares are redeemed for an aggregate payment
of $2,588,920, which is the maximum number of shares that could be redeemed in connection with the Business Combination at an assumed
redemption price of $10.89 per share based on the Trust Account balance as of [_____, 2023] with Oxbridge still having: (a) as
of the Closing, after distribution of the funds in the Trust Account and deducting all amounts to be paid pursuant to the exercise
of redemption rights of public shareholders and expenses paid or required to be paid in connection with the Business Combination
(including underwriting commissions), taking into account any liabilities that have accrued prior to the Closing but for which payment
will be due, or deferred until, after the Closing, cash on hand equal to or in excess of $5,000,000 and (b) at least $5,000,001
of net tangible assets, after deducting all amounts to be paid pursuant to the exercise of redemption rights, as required to
consummate the Business Combination. |
The
following table summarizes the pro forma Jet.AI Common Stock issued and outstanding immediately after the Business Combination:
| |
No Redemptions Scenario | | |
Maximum Redemptions Scenario | |
| |
Shares | | |
% | | |
Shares | | |
% | |
Historical Rollover Shareholders | |
| 4,500,000 | | |
| 51.86 | | |
| 4,500,000 | | |
| 53.32 | |
Public Shareholders(1) | |
| 1,301,952 | | |
| 15.00 | | |
| 1,064,218 | | |
| 12.61 | |
Initial Shareholders | |
| 2,875,000 | | |
| 33.14 | | |
| 2,875,000 | | |
| 34.07 | |
Total | |
| 8,676,952 | | |
| 100.00 | | |
| 8,439,218 | | |
| 100.00 | |
|
(1) |
Includes
115,000 shares of Class A Ordinary Shares issued to Maxim Group, LLC, the representative to the underwriters in our initial
public offering, which are not redeemable pursuant to an agreement between Maxim and the Company. |
The
two alternative levels of additional redemptions assumed in the unaudited pro forma condensed combined balance sheet and statement of
operations are based on the assumption that there are no adjustments for the outstanding public warrants as such securities are not exercisable
until 30 days after the Closing and no adjustments for the Merger Consideration Warrants.
If
the actual facts are different than these assumptions, then the amounts and shares outstanding in the unaudited pro forma condensed combined
financial information will be different and those changes could be material.
| |
| | |
Pro Forma | |
| |
Pro Forma | | |
Combined | |
| |
Combined | | |
(Assuming | |
| |
(Assuming No | | |
Maximum | |
| |
Redemptions | | |
Redemptions | |
| |
Scenario) | | |
Scenario) | |
| |
| |
Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data | |
(in thousands, except share and per share data) | |
For the year ended December 31, 2022 | |
| | |
| |
Revenue | |
$ | 21,863 | | |
$ | 21,863 | |
Net loss | |
$ | (1,522 | ) | |
$ | (1,522 | ) |
Net loss per share – Jet.AI Common Stock – basic and diluted | |
$ | (0.09 | ) | |
$ | (0.09 | ) |
Weighted-average Jet.AI Common Stock outstanding – basic and diluted | |
| 17,633,764 | | |
| 17,396,030 | |
| |
| | | |
| | |
Selected Unaudited Pro Forma Condensed Combined Balance Sheet Data as of December 31, 2022 | |
| | | |
| | |
Total assets | |
$ | 12,651 | | |
$ | 10,062 | |
Total liabilities | |
$ | 4,627 | | |
$ | 4,627 | |
Total shareholders’ equity | |
$ | 8,024 | | |
$ | 5,435 | |
RISK
FACTORS
The
following risk factors will apply to our business and operations following the completion of the Business Combination. These risk factors
are not exhaustive and investors are encouraged to perform their own investigation with respect to the business, financial condition
and prospects of Jet Token and our business, financial condition and prospects following the completion of the Business Combination.
You should carefully consider the following risk factors in addition to the other information included in this proxy statement/prospectus,
including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” We may face additional
risks and uncertainties that are not presently known to us, or that we currently deem immaterial, which may also impair our business
or financial condition. The following discussion should be read in conjunction with the “Management’s Discussion and Analysis
of Financial Condition and Results of Operations of Jet Token,” the financial statements of Jet Token and the notes to the financial
statements of Jet Token included herein.
Risks
Related to Projections and Forward-Looking Statements Included in this Proxy Statement/Prospectus
The
projections provided to the Oxbridge Board and contained in this proxy statement/prospectus are forward-looking statements that rely
upon estimates and assumptions that are subject to uncertainty.
The
projections of revenue, projected contribution, EBITDA and capital expenditures provided to the Oxbridge Board by Jet Token are “forward-looking
statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by the use of words such as “anticipate”, “believe”, “expect”,
“estimate”, “plan”, “outlook”, and “project” and other similar expressions that predict
or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include timing
of the proposed merger; the business plans, objectives, expectations and intentions of the parties once the transaction is complete,
and Jet Token’s and Oxbridge’s estimated and future results of operations, business strategies, competitive position, industry
environment and potential growth opportunities, relating to the acquired business. Those forward-looking statements reflect the analysis
of existing information at the time of such investor presentations and are subject to various risks and uncertainties. As a result, caution
must be exercised in relying on forward-looking statements. Due to known and unknown risks, our actual results may differ materially
from our expectations or projections. The following factors, among others, could cause actual results to differ materially from those
described in the investor presentations: the occurrence of any event, change or other circumstances that could give rise to the termination
of the Business Combination Agreement and the proposed transaction contemplated thereby; the inability to complete the transactions contemplated
by the Business Combination Agreement due to the failure to obtain approval of the stockholders of Oxbridge or Jet Token or other conditions
to closing in the Business Combination Agreement; the outcome of any legal proceedings that have been, or will be, instituted against
Oxbridge or other parties to the Business Combination Agreement following announcement of the Business Combination Agreement and transactions
contemplated therein; the ability of Oxbridge to meet Nasdaq listing standards following the merger and in connection with the consummation
thereof; the failure to achieve the assumptions underlying certain of the financial projections risks that the proposed transaction disrupts
current plans and operations and the potential difficulties in employee retention as a result of the announcement of the Business Combination
Agreement and consummation of the transaction described therein; costs related to the proposed merger and the impact of the substantial
indebtedness to be incurred to finance the consummation of the merger; changes in applicable laws or regulations; the ability of the
combined company to meet its financial and strategic goals, due to, among other things, competition, the ability of the combined company
to grow and manage growth profitability, maintain relationships with customers and retain its key employees; the possibility that the
combined company may be adversely affected by other economic, business, and/or competitive factors; and other risks and uncertainties
described herein, as well as those risks and uncertainties discussed from time to time in other reports and other public filings with
the SEC by Oxbridge.
The
forward-looking statements contained in this proxy statement/prospectus rely upon estimates and assumptions that are subject to uncertainty.
This
proxy statement/prospectus contains a number of forward-looking statements regarding our future operating results, our ability to enter
into partnerships or contractual relationships with third parties, the level of indebtedness we will have at the Closing, and of future
economic conditions. These forward-looking statements, while in some cases presented with numerical specificity, are based upon a number
of estimates and assumptions, which though considered reasonable by Jet Token at the time presented, are inherently subject to significant
business, economic, regulatory and competitive uncertainties and contingencies, many of which are beyond the control of Jet Token, and
upon assumptions with respect to future business strategies and decisions which are subject to change and may be out of the control of
the current management of Jet Token. While Jet Token believes that the forward-looking statements are based upon reasonable assumptions
and estimates, actual results will vary and such variations may be material. Forward-looking statements are necessarily speculative in
nature, and it is usually the case that one or more of the assumptions underlying the forecasts will not materialize. The uncertainty
of the forward-looking statements is particularly heightened by the fact that Jet Token has limited operations, track record or historical
financial statements or data on which to base the projections underlying the forward-looking statements. PROSPECTIVE INVESTORS ARE CAUTIONED
NOT TO PLACE UNDUE RELIANCE ON THE forward-looking statements AND SHOULD READ THEM IN
CONNECTION WITH THE OTHER MATERIALS CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS.
Risks
Related to Jet Token’s Operating Environment
Demand
for Jet Token’s product and services may decline due to factors beyond its control.
Demand
for private jet charters may be negatively impacted by factors affecting air travel generally, such as adverse weather conditions, an
outbreak of a contagious disease and other natural events, terrorism and increased security screening requirements.
In
particular, the recurrence of a pandemic, whether COVID-19 or otherwise, may result in a decline in air travel. Additionally, the reimposition
of travel restrictions and other measures intended to contain the spread of any such virus may contribute to a decline in demand for
air travel. If travel remains in a general decline for a significant period of time, Jet Token may be unable to compete with more established
operators and may not be able to achieve profitability in the medium term or at all.
More
broadly, business jet travel is highly correlated to the performance of the economy, and an economic downturn, such as the current economic
environment, which has been adversely affected by high rates of inflation, increasing interest rates, and low consumer sentiment, is
likely to have a direct impact on the use of business jets. Jet Token’s customers may consider private air travel through its products
and services to be a luxury item, especially when compared to commercial air travel. As a result, any economic downturn which has an
adverse effect on Jet Token’s customers’ spending habits could cause them to travel less frequently and, to the extent they
travel, to travel using commercial air carriers or other means considered to be more economical than Jet Token’s products and services.
For example, beginning in 2008 and in connection with weakened macroeconomic conditions, the corporate and executive jet aviation industry,
and companies that utilize corporate jets, experienced intensified political and media scrutiny. It is likely that the current economic
downturn will impact demand for private jet travel for some time.
Any
of these factors that cause the demand for private jet travel may result in delays that could reduce the attractiveness of private air
charter travel versus other means of transportation, particularly for shorter distance travel, which represents our target market. Delays
also frustrate passengers, affecting Jet Token’s reputation and potentially reducing fleet utilization and charter bookings as
a result of flight cancellations and increase costs. Jet Token may experience decreased demand, as well as a loss of reputation, in the
event of an accident involving one of its aircraft or an aircraft booked through our platform or any actual or alleged misuse of its
platform or aircraft by customers in violation of law. Demand for Jet Token’s product and services may also decline due to actions
that increase the cost of private air charter travel versus other forms of transportation, particularly efforts aimed at addressing climate
change such as carbon tax initiatives or other actions. Any of the foregoing circumstances or events which reduced the demand for private
jet charters could negatively impact Jet Token’s ability to establish its business and achieve profitability.
Jet
Token faces a high level of competition with numerous market participants with greater financial resources and operating experience.
The
private air travel industry is extraordinarily competitive. Factors that affect competition in this industry include price, reliability,
safety, regulations, professional reputation, aircraft availability, equipment and quality, consistency and ease of service, willingness
and ability to serve specific airports or regions, and investment requirements. Jet Token plans to compete against private jet charter
and fractional jet companies as well as business jet charter companies. Both the private jet charter companies and the business jet charter
companies have numerous competitive advantages that enable them to attract customers. Jet Token’s access to a smaller aircraft
fleet and regional focus puts it at a competitive disadvantage, particularly with respect to its appeal to business travelers who want
to travel overseas.
The
fractional private jet companies and many of the business jet charter companies have access to larger fleets of aircraft and have greater
financial resources, which would permit them to more effectively service customers. Due to Jet Token’s relatively small size, it
is more susceptible to their competitive activities, which could prevent Jet Token from attaining the level of sales required to sustain
profitable operations.
Recently
consolidation in the industry, such as VistaJet’s acquisitions of XOJET and JetSmarter and Wheels Up’s acquisition of Delta
Private Jets as well as Gama Aviation, a business jet services company, and increased consolidation in the future could further intensify
the competitive environment Jet Token faces.
There
can be no assurance that Jet Token’s competitors will not be successful in capturing a share of our present or potential customer
base. The materialization of any of these risks could adversely affect Jet Token’s business, financial condition and results of
operations.
Aviation
businesses are often affected by factors beyond their control including: air traffic congestion at airports; airport slot restrictions;
air traffic control inefficiencies; natural disasters; adverse weather conditions, such as hurricanes or blizzards; increased and changing
security measures; changing regulatory and governmental requirements; new or changing travel-related taxes; or the outbreak of disease;
any of which could have a material adverse effect on Jet Token’s business, results of operations and financial condition.
Like
other aviation companies, Jet Token’s business is affected by factors beyond its control, including air traffic congestion at airports,
airport slot restrictions, air traffic control inefficiencies, natural disasters, adverse weather conditions, increased and changing
security measures, changing regulatory and governmental requirements, new or changing travel-related taxes, or the outbreak of disease.
Factors that cause flight delays frustrate passengers and increase operating costs and decrease revenues, which in turn could adversely
affect profitability. In the United States, the federal government singularly controls all U.S. airspace, and aviation operators are
completely dependent on the FAA to operate that airspace in a safe, efficient and affordable manner. The air traffic control system,
which is operated by the FAA, faces challenges in managing the growing demand for U.S. air travel. U.S. air-traffic controllers often
rely on outdated technologies that routinely overwhelm the system and compel aviation operators to fly inefficient, indirect routes resulting
in delays and increased operational cost. In addition, there are currently proposals before Congress that could potentially lead to the
privatization of the United States’ air traffic control system, which could adversely affect Jet Token’s business.
Adverse
weather conditions and natural disasters, such as hurricanes, winter snowstorms or earthquakes, can cause flight cancellations or significant
delays. Cancellations or delays due to adverse weather conditions or natural disasters, air traffic control problems or inefficiencies,
breaches in security or other factors may affect Jet Token to a greater degree than its competitors who may be able to recover more quickly
from these events, and therefore could have a material adverse effect on Jet Token’s business, results of operations and financial
condition to a greater degree than other air carriers. Any general reduction in passenger traffic could have a material adverse effect
on Jet Token’s business, results of operations and financial condition.
Jet
Token’s business is primarily focused on certain targeted geographic regions, making it vulnerable to risks associated with having
geographically concentrated operations.
Jet
Token’s customer base is primarily concentrated in certain geographic regions of the United States. As a result, Jet Token’s
business, financial condition and results of operations are susceptible to regional economic downturns and other regional factors, including
state regulations and budget constraints and severe weather conditions, catastrophic events or other disruptions. As Jet Token seeks
to expand in its existing markets, opportunities for growth within these regions will become more limited and the geographic concentration
of Jet Token’s business may increase.
The
operation of aircraft is subject to various risks, and failure to maintain an acceptable safety record may have an adverse impact on
Jet Token’s ability to obtain and retain customers.
The
operation of aircraft is subject to various risks, including catastrophic disasters, crashes, mechanical failures and collisions, which
may result in loss of life, personal injury and/or damage to property and equipment. Jet Token may experience accidents in the future.
These risks could endanger the safety of its customers, personnel, third parties, equipment, cargo and other property (both Jet Token’s
and that of third parties), as well as the environment. If any of these events were to occur, Jet Token could experience loss of revenue,
termination of customer contracts, higher insurance rates, litigation, regulatory investigations and enforcement actions (including potential
grounding of Jet Token’s fleet and suspension or revocation of its operating authorities) and damage to its reputation and customer
relationships. In addition, to the extent an accident occurs with an aircraft Jet Token operates or charters, Jet Token could be held
liable for resulting damages, which may involve claims from injured passengers and survivors of deceased passengers. There can be no
assurance that the amount of Jet Token’s insurance coverage available in the event of such losses would be adequate to cover such
losses, or that Jet Token would not be forced to bear substantial losses from such events, regardless of its insurance cover.
Moreover,
any aircraft accident or incident, even if fully insured, and whether involving Jet Token or other private aircraft operators, could
create a public perception that Jet Token is less safe or reliable than other private aircraft operators, which could cause customers
to lose confidence and switch to other private aircraft operators or other means of transportation. In addition, any aircraft accident
or incident, whether involving Jet Token or other private aircraft operators, could also affect the public’s view of industry safety,
which may reduce the amount of trust by customers.
Jet
Token incurs considerable costs to maintain the quality of (i) its safety program, (ii) its training programs and (iii) its fleet of
aircraft. Jet Token cannot guarantee that these costs will not increase. Likewise, Jet Token cannot guarantee that its efforts will provide
an adequate level of safety or an acceptable safety record. If Jet Token is unable to maintain an acceptable safety record, Jet Token
may not be able to retain existing customers or attract new customers, which could have a material adverse effect on its business, financial
condition and results of operations.
The
supply of pilots to the airline industry is limited and may negatively affect Jet Token’s operations and financial condition. Increases
in labor costs may adversely affect Jet Token’s business, results of operations and financial condition.
Jet
Token’s pilots are subject to stringent pilot qualification and crew member flight training standards (“FAA Qualification
Standards”), which among other things require minimum flight time for pilots and mandate strict rules to minimize pilot fatigue.
The existence of such requirements effectively limits the supply of qualified pilot candidates and increases pilot salaries and related
labor costs. A shortage of pilots would require Jet Token to further increase its labor costs, which would result in a material reduction
in its earnings. Such requirements also impact pilot scheduling, work hours and the number of pilots required to be employed for Jet
Token’s operations.
In
addition, Jet Token’s operations and financial condition may be negatively impacted if it is unable to train pilots in a timely
manner. Due to an industry-wide shortage of qualified pilots, driven by the flight hours requirements under the FAA Qualification Standards
and attrition resulting from the hiring needs of other industry participants, pilot training timelines have significantly increased and
stressed the availability of flight simulators, instructors and related training equipment. As a result, the training of Jet Token’s
pilots may not be accomplished in a cost-efficient manner or in a manner timely enough to support Jet Token’s operational needs.
Pilot
attrition may negatively affect Jet Token’s operations and financial condition.
In
recent years, Jet Token has observed significant volatility in pilot attrition as a result of pilot wage and bonus increases at other
industry participants and the growth of cargo, low-cost and ultra-low-cost airlines. If attrition rates are higher than the availability
of replacement pilots, Jet Token’s operations and financial results could be materially and adversely affected.
Jet
Token is exposed to operational disruptions due to maintenance.
Jet
Token’s fleet requires regular maintenance work, which may cause operational disruption. Jet Token’s inability to perform
timely maintenance and repairs can result in its aircraft being underutilized which could have an adverse impact on its business, financial
condition and results of operations. On occasion, airframe manufacturers and/or regulatory authorities require mandatory or recommended
modifications to be made across a particular fleet which may mean having to ground a particular type of aircraft. This may cause operational
disruption to and impose significant costs on Jet Token. Moreover, as Jet Token’s aircraft base increases, maintenance costs could
potentially increase.
Significant
increases in fuel costs could have a material adverse effect on Jet Token’s business, financial condition and results of operations.
Fuel
is essential to the operation of Jet Token’s aircraft and to Jet Token’s ability to carry out its transport services. Fuel
costs are a key component of Jet Token’s operating expenses. A significant increase in fuel costs may negatively impact Jet Token’s
revenue, margins, operating expenses and results of operations. While Jet Token may be able to pass increases in fuel costs on to its
customers, increased fuel surcharges may affect Jet Token’s revenue and retention if a prolonged period of high fuel costs occurs.
To the extent there is a significant increase in fuel costs that affects the amount Jet Token’s customers choose to fly, it may
have a material adverse effect on Jet Token’s business, financial condition and results of operations.
If
efforts to continue to build a strong brand identity and improve member satisfaction and loyalty are not successful, Jet Token may not
be able to attract or retain members, and its operating results may be adversely affected.
Jet
Token must continue to build and maintain strong brand identity for its products and services, which have expanded over time. Jet Token
believes that strong brand identity will continue to be important in attracting members. If Jet Token’s efforts to promote and
maintain its brand are not successful, Jet Token’s operating results and our ability to attract members and other customers may
be adversely affected. From time to time, Jet Token’s members and other customers may express dissatisfaction with its products
and service offerings, in part due to factors that could be outside of Jet Token’s control, such as the timing and availability
of aircraft and service interruptions driven by prevailing political, regulatory, or natural conditions. To the extent dissatisfaction
with Jet Token’s products and services is widespread or not adequately addressed, Jet Token’s brand may be adversely impacted
and its ability to attract and retain members may be adversely affected. With respect to Jet Token’s planned expansion into additional
markets, Jet Token will also need to establish its brand and to the extent it is not successful, Jet Token’s business in new markets
would be adversely impacted.
Any
failure to offer high-quality customer support may harm Jet Token’s relationships with its customers and could adversely affect
Jet Token’s reputation, brand, business, financial condition and results of operations.
Through
Jet Token’s marketing, advertising, and communications with its customers, Jet Token sets the tone for its brand as aspirational
but also within reach. Jet Token’s strives to create high levels of customer satisfaction through the experience provided by its
team and representatives. The ease and reliability of its offerings, including its ability to provide high-quality customer support,
helps Jet Token attract and retain customers. Jet Token’s ability to provide effective and timely support is largely dependent
on its ability to attract and retain skilled employees who can support Jet Token’s customers and are sufficiently knowledgeable
about Jet Token’s product and services. As Jet Token continues to grow its business and improve its platform, it will face
challenges related to providing quality support at an increased scale. Any failure to provide efficient customer support, or a market
perception that Jet Token does not maintain high-quality support, could adversely affect Jet Token’s reputation, brand, business,
financial condition and results of operations.
The
demand for Jet Token’s services is subject to seasonal fluctuations.
Demand
for Jet Token’s services will fluctuate over the course of the year and is higher in the summer season and during holiday periods.
During periods of higher demand, Jet Token’s ability to provide agreed upon levels of service to its customers may deteriorate,
which could have a negative impact on Jet Token’s reputation and its ability to succeed.
Jet
Token’s ability to sell its product or service may be adversely affected by changes in government regulation.
Jet
Token’s business is subject to significant regulation by the FAA, the TSA (Transportation Security Administration) as well as “know
your customer” obligations and other laws and regulations. The laws and regulations concerning the selling of Jet Token’s
product or services may change and if they do then the selling of Jet Token’s product or service may no longer be possible or profitable.
Jet
Token has not launched a version of its App that would integrate client Jet Token balances held in wallets on the Network and there is
a risk that Jet Token may not be able to do so or, if it does, that it will be able to establish and grow its client base.
Jet
Token has not yet launched a version of its App that will integrate client Jet Token balances held in wallets on the Network. Jet Token
cannot assure you that it will be able to do so. If and when it does, there are no guarantees that Jet Token will attract a sufficient
client base who use Jet Token’s booking services to charter flights. If Jet Token fails to develop and launch these more enhanced
versions of its App or fails to attract a sufficient client base, Jet Token may determine to discontinue its business and you could lose
all of your investment.
Jet
Token’s failure to attract and retain highly qualified personnel in the future could harm its business.
Jet
Token believes that its future success will depend in large part on its ability to retain or attract highly qualified management, technical
and other personnel. Jet Token may not be successful in retaining key personnel or in attracting other highly qualified personnel. If
Jet Token is unable to retain or attract significant numbers of qualified management and other personnel, Jet Token may not be able to
grow and expand its business.
Risks
Related to Jet Token’s Business
Jet
Token is an early stage company with a limited operating history.
Jet
Token was formed on June 4, 2018. Accordingly, Jet Token has a limited history upon which an investor can evaluate its performance and
future prospects. Jet Token has a short history and a limited number of aircraft and related customers. Jet Token’s current and
proposed operations are subject to all business risks associated with newer enterprises. These include likely fluctuations in operating
results as Jet Token reacts to developments in its markets, difficulty in managing its growth and the entry of competitors into the market.
Jet Token has incurred net losses to date and anticipates continuing net losses for the foreseeable future. Jet Token cannot assure you
that it will be profitable in the foreseeable future or generate sufficient profits to pay dividends. If Jet Token does achieve profitability,
Jet Token cannot be certain that it will be able to sustain or increase such profitability. Jet Token has not consistently generated
positive cash flow from operations, and it cannot be certain that it will be able to generate positive cash flow from operations in the
future. To achieve and sustain profitability, Jet Token must accomplish numerous objectives, including broadening and stabilizing its
sources of revenue and increasing the number of paying members to its service. Accomplishing these objectives may require significant
capital investments. Jet Token cannot be assured that it will be able to achieve these objectives.
Jet
Token may not be able to successfully implement its growth strategies.
Jet
Token’s growth strategies include, among other things, expanding its addressable market by opening up private aviation to non-members
through our marketplace, expanding into new domestic markets and developing adjacent businesses. Jet Token faces numerous challenges
in implementing its growth strategies, including its ability to execute on market, business, product/service and geographic expansions.
Jet Token’s strategies for growth are dependent on, among other things, its ability to expand existing products and service offerings
and launch new products and service offerings. Although Jet Token devotes significant financial and other resources to the expansion
of its products and service offerings, its efforts may not be commercially successful or achieve the desired results. Jet Token’s
financial results and its ability to maintain or improve its competitive position will depend on its ability to effectively gauge the
direction of its key marketplaces and successfully identify, develop, market and sell new or improved products and services in these
changing marketplaces. Jet Token’s inability to successfully implement its growth strategies could have a material adverse effect
on its business, financial condition and results of operations and any assumptions underlying estimates of expected cost savings or expected
revenues may be inaccurate.
Jet
Token’s operating results are expected to be difficult to predict based on a number of factors that also will affect its long-term
performance.
Jet
Token expects its operating results to fluctuate significantly in the future based on a variety of factors, many of which are outside
its control and difficult to predict. As a result, period-to-period comparisons of Jet Token’s operating results may not be a good
indicator of its future or long-term performance. The following factors may affect Jet Token from period-to-period and may affect its
long-term performance:
| ● | Jet
Token may fail to successfully execute its business, marketing and other strategies; |
| | |
| ● |
Jet Token’s ability to grow complementary products and service offerings may be limited,
which could negatively impact its growth rate and financial performance; |
| | |
| ● | Jet
Token may be unable to attract new customers and/or retain existing customers; |
| | |
| ● | Jet
Token may require additional capital to finance strategic investments and operations, pursue
business objectives and respond to business opportunities, challenges or unforeseen circumstances,
and Jet Token cannot be sure that additional financing will be available; |
| | |
| ● |
Jet Token’s historical growth rates may not be reflective of its future growth; |
| | |
| ● |
Jet Token’s business and operating results may be significantly impacted by general
economic conditions, the health of the U.S. aviation industry and risks associated with its
aviation assets; |
| | |
| ● | litigation
or investigations involving Jet Token could result in material settlements, fines or penalties
and may adversely affect Jet Token’s business, financial condition and results of operations; |
| | |
| ● | existing
or new adverse regulations or interpretations thereof applicable to Jet Token’s industry
may restrict its ability to expand or to operate its business as intended and may expose
Jet Token to fines and other penalties; |
| | |
| ● | the
occurrence of geopolitical events such as war, terrorism, civil unrest, political instability,
environmental or climatic factors, natural disaster, pandemic or epidemic outbreak, public
health crisis and general economic conditions may have an adverse effect on Jet Token’s
business; |
| | |
| ● | some
of Jet Token’s potential losses may not be covered by insurance, and Jet Token may
be unable to obtain or maintain adequate insurance coverage; and |
| | |
| ● | Jet
Token is potentially subject to taxation-related risks in multiple jurisdictions, and changes
in tax laws could have a material adverse effect on its business, cash flow, results of operations
or financial condition. |
If
Jet Token cannot internally or externally finance its aircraft or generate sufficient funds to make payments to external financing sources,
Jet Token may not succeed.
As
is customary in the aviation industry, Jet Token is reliant on external financing for the acquisition of its aircraft and are likely
to need additional financing in the future in order to grow its fleet. [Jet Token has acquired one HondaJet under a leasing arrangement
described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”] If Jet
Token is unable to generate sufficient revenue or other funding to make payments on this lease arrangement, the lessor may take back
the aircraft, which would have a material adverse effect on Jet Token’s business and reputation. Furthermore, if Jet Token
does not have access to external financing for future aircraft, for whatever reason, including reasons relating to Jet Token’s
business or prospects or the broader economy, Jet Token may not be in a position to grow and/or survive.
Jet
Token may not have enough capital as needed and may be required to raise more capital and the terms of subsequent financings may adversely
impact your investment.
Jet
Token anticipates needing access to credit in order to support its working capital requirements as it grows. Interest rates are rising,
and it is a difficult environment for obtaining credit on favorable terms. If Jet Token cannot obtain credit when needed, Jet Token may
issue debt or equity securities to raise funds, modify its growth plans, or take some other action. Interest on debt securities could
increase costs and negatively impact operating results and convertible debt securities could result in diluting your interest in Jet
Token. If Jet Token is unable to find additional capital on favorable terms, then it is possible that it will choose to cease its sales
activity. In that case, the only asset remaining to generate a return on your investment could be Jet Token’s intellectual property.
Even if Jet Token is not forced to cease its sales activity, the unavailability of capital could result in Jet Token performing below
expectations, which could adversely impact the value of your investment.
The
prices of blockchain currencies that Jet Token accepts as payment are extremely volatile. Fluctuations in the price of blockchain currencies
and digital assets generally could materially and adversely affect Jet Token’s business.
Jet
Token accepts blockchain currencies, like Bitcoin, as payment and the market value of these blockchain currencies is highly volatile.
Though Jet Token promptly exchanges blockchain currencies for fiat currencies to limit direct exposure to this volatility, Jet Token
believes its services have a modest competitive advantage due to its acceptance of blockchain currencies as payment vis-a-vis its competitors.
To the extent that this high level of volatility decreases the general use of blockchain currencies, Jet Token may lose this advantage
and its results may suffer. Furthermore, a decrease in the price of a single blockchain asset may cause volatility in the entire blockchain
asset industry and may affect other blockchain assets.
If
Jet Token is not able to structure its Jet Token in accordance with applicable law, including federal securities laws, Jet Token may
not be able to proceed with one element of its business as planned.
A
meaningful, but not essential, element of Jet Token’s strategy has been to issue and sell Jet Tokens redeemable for time on its
HondaJet Elites as well as for private jet travel with third party carriers, which Jet Token expected would provide it with significant
competitive advantages such as significantly reduced financial transaction costs and increased efficiencies in the delivery of air charter
services. Jet Token planned to structure its Jet Token to be in compliance with applicable law, including the federal securities laws.
This would have required Jet Token, among other things, to have structured its Jet Tokens so that they were not treated as securities
for purposes of federal securities laws. If Jet Token is not able to structure its Jet Tokens as intended, it may not be able to operate
this element of its business as planned. Specifically, Jet Token would lose the competitive advantages tokenization provides which may
impair Jet Token’s ability to reach the maximum level of profitability possible. In addition, to the extent that investors view
Jet Token’s ability to create and sell its Jet Tokens as contributing to the value of the company as a whole, Jet Token’s
failure to structure Jet Tokens in compliance with applicable laws may cause the value of investments in the company to decline.
Changes
in the regulatory environment governing digital assets could make it difficult or impracticable to create and sell Jet Token which may
have a material impact on Jet Token’s revenues.
The
regulatory environment governing digital assets is relatively new and changing rapidly. In addition to the federal securities laws discussed
above, digital assets may also be subject to commodities laws, trade sanctions, and banking laws, among others. Changes to the regulatory
environment affecting Jet Token’s business could materially impair its ability to create and sell Jet Tokens. If Jet Token is unable
to create and sell its Jet Tokens, its platform may lose what potential clients view as a competitive advantage and cause Jet Token’s
revenues to decline.
Jet
Token’s business and reputation rely on, and will continue to rely on, third parties.
Jet
Token has relied on a third-party app developer to develop the initial versions of its App and Jet Token may continue to rely on third
parties for future development of portions of any new or revised App. Jet Token also expects to rely heavily on Cirrus to maintain and
operate Jet Token’s leased aircraft for charter services and Jet Token will rely on third party operators when its clients book
flights through its platform with those operators. The failure of these third parties to perform these roles properly may result in damage
to Jet Token’s reputation, loss of clients, potential litigation and other costs. Jet Token may also experience delays, defects,
errors, or other problems with their work that could have an adverse effect on Jet Token’s results and its ability to achieve profitability.
Jet
Token relies on third-party Internet, mobile, and other products and services to deliver its mobile and web applications and flight management
system offerings to customers, and any disruption of, or interference with, Jet Token’s use of those services could adversely affect
its business, financial condition, results of operations, and customers.
Jet
Token’s platform’s continuing and uninterrupted performance is critical to its success. That platform is dependent on the
performance and reliability of Internet, mobile, and other infrastructure services that are not under Jet Token’s control. While
Jet Token has engaged reputable vendors to provide these products or services, Jet Token does not have control over the operations of
the facilities or systems used by its third-party providers. These facilities and systems may be vulnerable to damage or interruption
from natural disasters, cybersecurity attacks, human error, terrorist attacks, power outages, pandemics, and similar events or acts of
misconduct. In addition, any changes in one of Jet Token’s third-party service provider’s service levels may adversely affect
Jet Token’s ability to meet the requirements of its customers. While Jet Token believes it has implemented reasonable backup and
disaster recovery plans, Jet Token has experienced, and expects that in the future it will experience, interruptions, delays and outages
in service and availability from time to time due to a variety of factors, including infrastructure changes, human or software errors,
website hosting disruptions, capacity constraints, or external factors beyond Jet Token’s control. Sustained or repeated system
failures would reduce the attractiveness of Jet Token’s offerings and could disrupt Jet Token’s customers’ businesses.
It may become increasingly difficult to maintain and improve our performance, especially during peak usage times, as Jet Token expands
its products and service offerings. Any negative publicity or user dissatisfaction arising from these disruptions could harm Jet Token’s
reputation and brand, may adversely affect the usage of Jet Token’s offerings, and could harm Jet Token’s business, financial
condition and results of operation.
Jet
Token relies on third parties maintaining open marketplaces to distribute its mobile and web applications.
The
success of Jet Token’s App relies in part on third parties maintaining open marketplaces, including the Apple App Store and Google
Play, which make our App available for download. Jet Token cannot be assured that the marketplaces through which it distributes its App
will maintain their current structures or that such marketplaces will not charge Jet Token fees to list its App for download.
Jet
Token may be unable to adequately protect its intellectual property interests or may be found infringing on intellectual property interests
of others.
Jet
Token’s intellectual property includes its [trademarks, domain names, website, mobile and web applications, software (including
our proprietary algorithms and data analytics engines), copyrights, trade secrets, and inventions (whether or not patentable)]. Jet Token
believes that its intellectual property plays an important role in protecting its brand and the competitiveness of its business. If Jet
Token does not adequately protect its intellectual property, its brand and reputation may be adversely affected and its ability to compete
effectively may be impaired.
Jet
Token protects its intellectual property through a combination of trademarks, domain names and other measures. Jet Token has registered
its trademarks and domain names that it currently uses in the United States. Jet Token’s efforts may not be sufficient or effective.
Further, Jet Token may be unable to prevent competitors from acquiring trademarks or domain names that are similar to or diminish the
value of its intellectual property. In addition, it may be possible for other parties to copy or reverse engineer Jet Token’s applications
or other technology offerings. Moreover, Jet Token’s proprietary algorithms, data analytics engines, or other software or trade
secrets may be compromised by third parties or Jet Token’s employees, which could cause Jet Token to lose any competitive advantage
it may have from them.
In
addition, Jet Token’s business is subject to the risk of third parties infringing its intellectual property. Jet Token may not
always be successful in securing protection for, or identifying or stopping infringements of, its intellectual property and it may need
to resort to litigation in the future to enforce its rights in this regard. Any such litigation could result in significant costs and
a diversion of resources. Further, such enforcement efforts may result in a ruling that Jet Token’s intellectual property rights
are unenforceable.
Moreover,
companies in the aviation and technology industries are frequently subject to litigation based on allegations of intellectual property
infringement, misappropriation, or other violations. As Jet Token expands and raises its profile, the likelihood of intellectual property
claims being asserted against it grows. Further, Jet Token may acquire or introduce new technology offerings, which may increase Jet
Token’s exposure to patent and other intellectual property claims. Any intellectual property claims asserted against Jet Token,
whether or not having any merit, could be time-consuming and expensive to settle or litigate. If Jet Token is unsuccessful in defending
such a claim, it may be required to pay substantial damages or could be subject to an injunction or agree to a settlement that may prevent
it from using its intellectual property or making its offerings available to customers. Some intellectual property claims may require
Jet Token to seek a license to continue its operations, and those licenses may not be available on commercially reasonable terms or may
significantly increase Jet Token’s operating expenses. If Jet Token is unable to procure a license, it may be required to develop
non-infringing technological alternatives, which could require significant time and expense. Any of these events could adversely affect
Jet Token’s business, financial condition, or operations.
A
delay or failure to identify and devise, invest in and implement certain important technology, business, and other initiatives could
have a material impact on Jet Token’s business, financial condition and results of operations.
In
order to operate its business, achieve its goals, and remain competitive, Jet Token continuously seeks to identify and devise, invest
in, implement and pursue technology, business and other important initiatives, such as those relating to aircraft fleet structuring,
business processes, information technology, initiatives seeking to ensure high quality service experience, and others.
Jet
Token’s business and the aircraft Jet Token operates are characterized by changing technology, introductions and enhancements of
models of aircraft and services and shifting customer demands, including technology preferences. Jet Token’s future growth and
financial performance will depend in part upon its ability to develop, market and integrate new services and to accommodate the latest
technological advances and customer preferences. In addition, the introduction of new technologies or services that compete with Jet
Token’s product and services could result in its revenues decreasing over time. If Jet Token is unable to upgrade its operations
or fleet with the latest technological advances in a timely manner, or at all, its business, financial condition and results of operations
could suffer.
Jet
Token is dependent on its information systems which may be vulnerable to cyber-attacks or other events.
Jet
Token’s operations are dependent on its information systems and the information collected, processed, stored, and handled by these
systems. Jet Token relies heavily on its computer systems to manage its client account balances, booking, pricing, processing and other
processes. Jet Token receives, retains and transmits certain confidential information, including personally identifiable information
that its clients provide. In addition, for these operations, Jet Token depends in part on the secure transmission of confidential information
over public networks to charter operators. Jet Token’s information systems are subject to damage or interruption from power outages,
facility damage, computer and telecommunications failures, computer viruses, security breaches, including credit card or personally identifiable
information breaches, coordinated cyber-attacks, vandalism, catastrophic events and human error. If Jet Token’s platform is hacked,
these funds could be at risk of being stolen which would damage Jet Token’s reputation and likely its business. Any significant
disruption or cyber-attacks on Jet Token’s information systems, particularly those involving confidential information being accessed,
obtained, damaged, or used by unauthorized or improper persons, could harm Jet Token’s reputation and expose it to regulatory or
legal actions and adversely affect its business and its financial results.
Because
Jet Token’s software could be used to collect and store personal information, privacy concerns in the territories in which Jet
Token operates could result in additional costs and liabilities to Jet Token or inhibit sales of its software.
The
regulatory framework for privacy issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. Many
government bodies and agencies have adopted or are considering adopting laws and regulations regarding the collection, use, storage and
disclosure of personal information and breach notification procedures. Jet Token is also required to comply with laws, rules and regulations
relating to data security. Interpretation of these laws, rules and regulations and their application to Jet Token’s software and
services in applicable jurisdictions is ongoing and cannot be fully determined at this time.
In
the United States, these include rules and regulations promulgated under the authority of the Federal Trade Commission, the Electronic
Communications Privacy Act, the Computer Fraud and Abuse Act, the California Consumer Privacy Act of 2018 (the “CCPA”) and
other state and federal laws relating to privacy and data security. By way of example, the CCPA requires covered businesses to provide
new disclosures to California residents, provide them new ways to opt-out of certain disclosures of personal information, and allows
for a new cause of action for data breaches. It includes a framework that includes potential statutory damages and private rights of
action. There is some uncertainty as to how the CCPA, and similar privacy laws emerging in other states, could impact Jet Token’s
business as it depends on how such laws will be interpreted. As Jet Token expands its operations, compliance with privacy laws may increase
its operating costs.
Jet
Token may not have enough funds to sustain the business until it becomes profitable.
Jet
Token may not accurately anticipate how quickly it may use its funds and whether these funds are sufficient to bring the business to
profitability.
Risks
Relating to Ownership of Jet.AI Common Stock and Jet.AI Warrants after the Closing of the Business Combination
Jet
Token has never paid cash dividends on its capital stock, and Jet.AI does not anticipate paying dividends in the foreseeable future.
Jet
Token has never paid cash dividends on its capital stock and currently intends to retain any future earnings to fund the growth of its
business. Any determination to pay dividends in the future will be at the discretion of the Jet.AI Board and will depend on Jet.AI’s
financial condition, operating results, capital requirements, general business conditions and other factors that the Jet.AI Board may
deem relevant. As a result, capital appreciation, if any, of Jet.AI’s Common Stock will be the sole source of gain for
the foreseeable future.
The
stock price following the Closing of the Business Combination may be volatile, and you may not be able to sell shares at or above the
price at the Closing.
After
the Closing of the Business Combination, the trading price of the Jet.AI Common Stock and Jet.AI Warrants may be volatile and
could be subject to wide fluctuations in response to various factors, some of which are beyond Jet.AI’s control. These factors
include:
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or anticipated fluctuations in operating results; |
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failure
to meet or exceed financial estimates and projections of the investment community or that Jet.AI provides to the public; |
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issuance
of new or updated research or reports by securities analysts or changed recommendations for the industry in general; |
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announcements
of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; |
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operating
and share price performance of other companies in the industry or related markets; |
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the
timing and magnitude of investments in the growth of the business; |
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actual
or anticipated changes in laws and regulations; |
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additions
or departures of key management or other personnel; |
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increased
labor costs; |
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disputes
or other developments related to intellectual property or other proprietary rights, including litigation; |
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the
ability to market new and enhanced solutions on a timely basis; |
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sales
of substantial amounts of the Jet.AI Common Stock by Jet.AI’s directors, executive officers or significant stockholders
or the perception that such sales could occur; |
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changes
in capital structure, including future issuances of securities or the incurrence of debt; and |
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general
economic, political and market conditions. |
In
addition, the stock market in general, and the stock prices of technology companies and aviation companies in particular, have experienced
extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies.
Broad market and industry factors may seriously affect the market price of Jet.AI Common Stock, regardless of actual operating
performance. In addition, in the past, following periods of volatility in the overall market and the market price of a particular company’s
securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted, could
result in substantial costs and a diversion of management’s attention and resources.
There
is no guarantee that the Jet.AI Warrants will ever be in the money, and they may expire worthless.
The
exercise price of the Jet.AI Warrants is $11.50 per share of Jet.AI Common Stock, subject to certain restrictions set forth in
the Warrant Agreement. There is no guarantee that the Jet.AI Warrants will ever be in the money prior to their expiration, and as such,
the Jet.AI Warrants may expire worthless. Additionally, we use the Black-Scholes option pricing model to determine the fair value of
the Jet.AI Warrants. As a result, the valuation of this derivative instrument is subjective, and the Black-Scholes option pricing model
requires the input of highly subjective assumptions, including the expected stock price volatility. Changes in these assumptions can
materially affect the fair value estimate.
Anti-takeover
provisions contained in the Proposed Organizational Documents and applicable laws could impair a takeover attempt.
Upon
the Closing of the Business Combination, the Proposed Organizational Documents will afford certain rights and powers to the Jet.AI Board
that could contribute to the delay or prevention of an acquisition that it deems undesirable. Any of the foregoing provisions and terms
that have the effect of delaying or deterring a change in control could limit the opportunity for stockholders to receive a premium for
their shares of Jet.AI Common Stock, and could also affect the price that some investors are willing to pay for the Jet.AI
Common Stock. See also “Description of the Securities.”
Jet.AI
is subject to risks related to taxation in the United States.
Significant
judgments based on interpretations of existing tax laws or regulations are required in determining Jet.AI’s provision for income
taxes. Jet.AI’s effective income tax rate could be adversely affected by various factors, including, but not limited to, changes
in the mix of earnings in tax jurisdictions with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities,
changes in existing tax policies, laws, regulations or rates, changes in the level of non-deductible expenses (including share-based
compensation), changes in the location of Jet.AI’s operations, changes in Jet.AI’s future levels of research and development
spending, mergers and acquisitions or the results of examinations by various tax authorities. Although Jet.AI believes its tax estimates
are reasonable, if the IRS or any other taxing authority disagrees with the positions taken on its tax returns, Jet.AI could have additional
tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes
could have a material impact on our results of operations and financial position.
Changes
to applicable tax laws and regulations or exposure to additional income tax liabilities could affect Jet.AI’s business and future
profitability.
Following
the Domestication, Jet.AI will be a U.S. corporation and thus subject to U.S. corporate income tax on its worldwide income. Further,
since Jet.AI’s operations and customers are located throughout the United States, Jet.AI will be subject to various U.S. state
and local taxes. U.S. federal, state, local and non-U.S. tax laws, policies, statutes, rules, regulations or ordinances could be interpreted,
changed, modified or applied adversely to Jet.AI and may have an adverse effect on its business and future profitability.
For
example, several tax proposals have been set forth that would, if enacted, make significant changes to U.S. tax laws. Such proposals
include an increase in the U.S. income tax rate applicable to corporations (such as Jet.AI) from 21% to 28%. Congress may consider, and
could include, some or all of these proposals in connection with tax reform that may be undertaken. It is unclear whether these or similar
changes will be enacted and, if enacted, how soon any such changes could take effect. The passage of any legislation as a result of these
proposals and other similar changes in U.S. federal income tax laws could adversely affect Jet.AI’s business and future profitability.
As
a result of plans to expand Jet.AI’s business operations, including to jurisdictions in which tax laws may not be favorable, its
obligations may change or fluctuate, become significantly more complex or become subject to greater risk of examination by taxing authorities,
any of which could adversely affect Jet.AI’s after-tax profitability and financial results.
In
the event that Jet.AI’s business expands domestically or internationally, its effective tax rates may fluctuate widely in the future.
Future effective tax rates could be affected by operating losses in jurisdictions where no tax benefit can be recorded under U.S. GAAP,
changes in deferred tax assets and liabilities, or changes in tax laws. Factors that could materially affect Jet.AI’s future effective
tax rates include, but are not limited to: (a) changes in tax laws or the regulatory environment, (b) changes in accounting and tax standards
or practices, (c) changes in the composition of operating income by tax jurisdiction and (d) pre-tax operating results of Jet.AI’s
business.
Additionally,
after the Business Combination, Jet.AI may be subject to significant income, withholding, and other tax obligations in the United States
and may become subject to taxation in numerous additional U.S. state and local and non-U.S. jurisdictions with respect to income, operations
and subsidiaries related to those jurisdictions. Jet.AI’s after-tax profitability and financial results could be subject to volatility
or be affected by numerous factors, including (a) the availability of tax deductions, credits, exemptions, refunds and other benefits
to reduce tax liabilities, (b) changes in the valuation of deferred tax assets and liabilities, if any, (c) the expected timing and amount
of the release of any tax valuation allowances, (d) the tax treatment of stock-based compensation, (e) changes in the relative amount
of earnings subject to tax in the various jurisdictions, (f) the potential business expansion into, or otherwise becoming subject to
tax in, additional jurisdictions, (g) changes to existing intercompany structure (and any costs related thereto) and business operations,
(h) the extent of intercompany transactions and the extent to which taxing authorities in relevant jurisdictions respect those intercompany
transactions, and (i) the ability to structure business operations in an efficient and competitive manner. Outcomes from audits or examinations
by taxing authorities could have an adverse effect on Jet.AI’s after-tax profitability and financial condition. Additionally, the
IRS and several foreign tax authorities have increasingly focused attention on intercompany transfer pricing with respect to sales of
products and services and the use of intangibles. Tax authorities could disagree with Jet.AI’s intercompany charges, cross-jurisdictional
transfer pricing or other matters and assess additional taxes. If Jet.AI does not prevail in any such disagreements, Jet.AI’s profitability
may be affected.
Jet.AI’s
after-tax profitability and financial results may also be adversely affected by changes in relevant tax laws and tax rates, treaties,
regulations, administrative practices and principles, judicial decisions and interpretations thereof, in each case, possibly with retroactive
effect.
Jet.AI’s
ability to utilize its net operating loss and tax credit carryforwards to offset future taxable income may be subject to certain limitations.
In
general, under Section 382 of the Code, a corporation that undergoes an “ownership change” is subject to limitations on its
ability to use its pre-change net operating loss carryforwards (“NOLs”) to offset future taxable income. The limitations
apply if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50 percentage point
change (by value) in its equity ownership by certain stockholders over a three year period. If Jet Token has experienced an ownership
change at any time since its incorporation, Jet.AI may be subject to limitations on its ability to utilize its existing NOLs and other
tax attributes to offset taxable income or tax liability. In addition, the Business Combination and future changes in Jet.AI’s
stock ownership, which may be outside of Jet.AI’s control, may trigger an ownership change. Similar provisions of state tax law
may also apply to limit Jet.AI’s use of accumulated state tax attributes. As a result, even if Jet.AI earns net taxable income
in the future, its ability to use its pre-change NOL carryforwards and other tax attributes to offset such taxable income or tax liability
may be subject to limitations, which could potentially result in increased future income tax liability to Jet.AI.
Risks
Related to Oxbridge and the Business Combination
Unless
the context otherwise requires, any reference in this section of this proxy statement/prospectus to “we,” “us”
or “our” refers to Oxbridge prior to the Business Combination and to Jet.AI and its subsidiaries following the Business Combination.
Following
the consummation of the Business Combination, Jet.AI’s sole material asset will be its direct and indirect interests in its subsidiaries
and, accordingly, Jet.AI will be dependent upon distributions from its subsidiaries to pay taxes and cover its corporate and other overhead
expenses and pay dividends, if any, on the Jet.AI Common Stock.
Jet.AI
is a holding company and, subsequent to the completion of the Business Combination, will have no material assets other than its direct
and indirect equity interests in its subsidiaries. Jet.AI will have no independent means of generating revenue. To the extent Jet.AI’s
subsidiaries have available cash, Jet.AI will cause its subsidiaries to make distributions of cash to pay taxes, cover Jet.AI’s
corporate and other overhead expenses and pay dividends, if any, on the Jet.AI Common Stock. To the extent that Jet.AI needs funds
and its subsidiaries fail to generate sufficient cash flow to distribute funds to Jet.AI or are restricted from making such distributions
or payments under applicable law or regulation or under the terms of their financing arrangements, or are otherwise unable to provide
such funds, Jet.AI’s liquidity and financial condition could be materially adversely affected.
Subsequent
to the consummation of the Business Combination, Jet.AI may be required to take write-downs or write-offs, restructuring and impairment
or other charges that could have a significant negative effect on its financial condition, results of operations and stock price, which
could cause you to lose some or all of your investment.
Although
we have conducted due diligence on Jet Token, we cannot assure you that this diligence revealed all material issues that may be present
in Jet Token, that it would be possible to uncover all material issues through a customary amount of due diligence or that factors outside
of our control will not later arise. As a result, following the consummation of the Business Combination, Jet.AI may be forced to write-down
or write-off assets, restructure its operations or incur impairment or other charges that could result in losses. Even if our due diligence
successfully identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent
with our preliminary risk analysis. Even though these charges may be non-cash items and may not have an immediate impact on Jet.AI’s
liquidity, the fact that Jet.AI reports charges of this nature could contribute to negative market perceptions about Jet.AI following
the completion of the Business Combination or its securities. In addition, charges of this nature may cause Jet.AI to be unable to obtain
future financing on favorable terms or at all.
Our
Sponsor, directors and officers have agreed to vote in favor of the Business Combination, regardless of how our public shareholders vote.
Unlike
many other blank check companies in which the founders agree to vote their founder shares in accordance with the majority of the votes
cast by public shareholders in connection with an initial business combination, our Sponsor, directors and officers have agreed to vote
any Class A Ordinary Shares and Class B Ordinary Shares owned by them in favor of the Business Combination. As of the date hereof, our
Sponsor owns shares equal to approximately 68.83% of our issued and outstanding Class A Ordinary Shares and Class B Ordinary Shares in
the aggregate, all of which are subject to an agreement to vote in favor of the Business Combination. As a result, if only the minimum
amount of shares needed to establish a quorum are present and all such shares are actually voted on the Business Combination Proposal,
none of the outstanding Class A Ordinary Shares would need to be voted in favor of the Business Combination in order for the Business
Combination to be approved. Accordingly, the necessary shareholder approval will be received for the Business
Combination if our Sponsor, directors and officers agreed to vote any Class A Ordinary Shares and Class B Ordinary
Shares owned by them.
Our
Sponsor and certain of our directors and officers have interests in the Business Combination that are different from, or in addition
to, those of other shareholders generally.
When
considering the Oxbridge Board’s recommendation that our shareholders vote in favor of the approval of the Business Combination
Proposal, our shareholders should be aware that our Sponsor and certain of our directors and officers have interests in the Business
Combination that are different from, or in addition to, those of other shareholders generally. These interests include:
| ● | the
fact that our Sponsor owns 2,875,000 Founder Shares, which were initially acquired prior
to Oxbridge’s IPO and for an aggregate purchase price of $25,000, and Oxbridge’s
directors and officers have a pecuniary interest in such Founder Shares through their ownership
interest in the Sponsor. Such securities will have a significantly higher value at the time
of the Business Combination, which if unrestricted and freely tradable would be valued at
approximately [$ ], based on the closing price of our Class A Ordinary Shares of [$ ] per
share on [__________, 2023]. In addition, the Sponsor paid an aggregate of $4,897,500 for
4,897,500 Private Placement Warrants at a price of $1.00 per warrant. Such Private Placement
Warrants had an aggregate market value of [$________] based on the last sale price of [$_______]
per warrant on Nasdaq on [__________, 2023]. If Oxbridge does not consummate the Business
Combination or another initial business combination by August 16, 2023, and Oxbridge is therefore
required to be liquidated, these shares would be worthless, as Founder Shares are not entitled
to participate in any redemption or liquidation of the Trust Account; |
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| ● | the
fact that Oxbridge’s officers and directors have an aggregate of $953,552 invested
in the Sponsor, which will be lost in the event that the Business Combination is not approved
and concluded; |
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| ● | the
fact that given the differential in the purchase price that our Sponsor paid for the Founder
Shares as compared to the price of the Units sold in the IPO and the substantial number of
shares of Jet.AI Common Stock that our Sponsor will receive upon conversion of the
Founder Shares in connection with the Business Combination, our Sponsor and its affiliates
may earn a positive rate of return on their investment even if the Jet.AI Common Stock trades below the price initially paid for the Units in the IPO and the public shareholders
experience a negative rate of return following the completion of the Business Combination; |
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| ● | the
fact that our Sponsor, officers and directors have agreed not to redeem any Class A Ordinary
Shares held by them in connection with a shareholder vote to approve the Business Combination; |
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| ● | if
the Trust Account is liquidated, including in the event we are unable to complete an Initial
Business Combination within the required time period, our Sponsor has agreed to indemnify
us to ensure that the proceeds in the Trust Account are not reduced below [$10.15] per public
share, or such lesser amount per public share as is in the Trust Account on the liquidation
date, by the claims of (a) any third party (other than our independent registered public
accounting firm) for services rendered or products sold to us or (b) a prospective target
business with which we have entered into a letter of intent, confidentiality or other similar
agreement or business combination agreement, but only if such a third party or target business
has not executed a waiver of all rights to seek access to the Trust Account; |
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| ● | the
anticipated continuation of Jay Madhu and Wrendon Timothy as directors after the Business
Combination, and as such, after the proposed Business Combination is consummated, Mr. Madhu
and Mr. Timothy will in the future receive any cash fees, stock options or stock awards that
the Jet.AI Board determines to pay to its directors; |
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| ● | the
fact that our Sponsor, officers and directors will be reimbursed for out-of-pocket expenses
incurred in connection with activities on our behalf, such as identifying potential target
businesses and performing due diligence on suitable business combinations; and |
| ● | the
fact that our Sponsor will lose their entire investment in us if an Initial Business Combination
is not completed. In addition, our Sponsor has made available to us a loan of $575,000 to
extend the deadline for completion of our Initial Business Combination from November 16,
2022 to August 16, 2023, all of which is outstanding as of , 2023. The ability of Oxbridge
to repay such loan is dependent upon the completion of our Initial Business Combination. |
As
of [__________, 2023], the Sponsor and its affiliates had an aggregate of [$__________] at risk that depends on completion of an initial
business combination, including [$___________] it invested in securities, [$_________] of unpaid loans and outstanding administrative
services fees. As of [________, 2023], there was no unreimbursed out-of-pocket expenses incurred by the sponsor or its affiliates. These
interests may have influenced Oxbridge’s directors in making their recommendation that you vote in favor of the approval of the
Business Combination.
For
additional information, see “The Business Combination — Interests of Certain Persons in the Business Combination —
Interests of Sponsor and Oxbridge Directors and Officers.”
Our
officers and directors may have conflicts of interest in determining whether to present business opportunities to us or another entity
with which they are, or may become, affiliated.
Until
we consummate an Initial Business Combination, we intend to engage in the business of identifying and combining with one or more businesses.
Our Sponsor, officers and directors are, or may in the future become, affiliated with entities (such as operating companies or investment
vehicles) that are engaged in a similar business.
Our
officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other
entities to which they owe certain fiduciary or contractual duties. Our Existing Organizational Documents provide that we renounce our
interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person
solely in his or her capacity as our director or officer and such opportunity is one we are legally and contractually permitted to undertake
and would otherwise be reasonable for us to pursue.
In
the absence of the “corporate opportunity” waiver in our Existing Organizational Documents, certain candidates may not be
able to serve as an officer or director for us. We believe we substantially benefit from having representatives who bring significant,
relevant and valuable experience to our management, and, as a result, the inclusion of the “corporate opportunity” waiver
in our Existing Organizational Documents provides us with greater flexibility to attract and retain the officers and directors that we
feel are the best candidates.
However,
the personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting
a target business and completing a business combination. The different timelines of competing business combinations could cause our directors
and officers to prioritize a different business combination over finding a suitable acquisition target for our business combination.
Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result
in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate
and in our shareholders’ best interest, which could negatively impact the timing for a business combination.
Our
Sponsor holds a significant number of Class B Ordinary Shares and warrants. Our Sponsor will lose its entire investment in us if we do
not complete the Business Combination or any other Initial Business Combination.
Our
Sponsor, which is governed and controlled by two of our directors, holds all of our 2,875,000 Founder Shares, representing [68.83%] of
the total outstanding shares upon completion of our IPO. The Founder Shares will be worthless if we do not complete the Business Combination
or any other Initial Business Combination within the Combination Period. In addition, our Sponsor holds an aggregate of [4,897,500] private
placement warrants that will also be worthless if we do not complete an Initial Business Combination within the Combination Period.
The
Founder Shares are identical to the Class A Ordinary Shares included in the Oxbridge Units, except that (a) the Founder Shares and the
Class A Ordinary Shares into which the Founder Shares convert upon an Initial Business Combination are subject to certain transfer restrictions,
(b) our Sponsor, officers and directors have entered into that certain Letter Agreement, dated as of August 11, 2021 (the “Letter
Agreement”), with us, pursuant to which they have agreed (i) to waive their redemption rights with respect to their Founder Shares
and any public shares they own in connection with the completion of an Initial Business Combination and (ii) to waive their rights to
liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an Initial Business Combination
within the Combination Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any
public shares they hold if we fail to complete an Initial Business Combination within the Combination Period) and (c) the Founder Shares
are automatically convertible into shares of our Class A Ordinary Shares at the time of an Initial Business Combination.
The
personal and financial interests of our Sponsor, officers and directors may have influenced their motivation in identifying and selecting
the Business Combination, completing the Business Combination and influencing the operation of Jet.AI following the Business Combination.
We
cannot assure you that our diligence review has identified all material risks associated with the Business Combination, and you may be
less protected as an investor from any material issues with respect to Jet Token’s business, including any material omissions or
misstatements contained in the Registration Statement or this proxy statement/prospectus than an investor in an initial public offering.
Before
entering into the Business Combination Agreement, we performed a due diligence review of Jet Token and its business and operations; however,
we cannot assure you that our due diligence review identified all material issues, and certain unexpected risks may arise and previously
known risks may materialize in a manner not consistent with our preliminary risk analysis. Additionally, the scope of due diligence we
have conducted in conjunction with the Business Combination may be different than would typically be conducted in the event Jet Token
pursued an underwritten initial public offering. In a typical initial public offering, the underwriters of the offering conduct due diligence
on the company to be taken public, and following the offering, the underwriters are subject to liability to private investors for any
material misstatements or omissions in the registration statement. While potential investors in an initial public offering typically
have a private right of action against the underwriters of the offering for any such material misstatements or omissions, there are no
underwriters of the Jet.AI Common Stock that will be issued pursuant to the Registration Statement and thus no corresponding right
of action is available to investors in the Business Combination, for any material misstatements or omissions in the Registration Statement
or this proxy statement/prospectus. Therefore, as an investor in the Business Combination, you may be exposed to future losses, impairment
charges, write-downs, write-offs or other charges that could have a significant negative effect on Jet Token’s financial condition,
results of operations and the share price of its securities, which could cause you to lose some or all of your investment without certain
recourse against any underwriter that may be available in an underwritten public offering.
We
and Jet Token will incur significant transaction expenses and transition costs in connection with the Business Combination.
We
and Jet Token have both incurred and expect to incur significant, non-recurring costs in connection with consummating the Business Combination
and operating as a public company following the consummation of the Business Combination. All expenses incurred in connection with the
Business Combination Agreement and the Business Combination, including all legal, accounting, consulting, investment banking and other
fees, expenses and costs, will be for the account of the party incurring such fees, expenses and costs or will be paid by Jet.AI following
the Closing. Our transaction expenses as a result of the Business Combination are currently estimated at approximately $_____ million,
including approximately $4.025 million in deferred underwriting discounts and commissions to the underwriters of our IPO. Oxbridge expects
to incur fees and expenses of $_____ in the aggregate, $_____ of which are contingent on the completion of the Business Combination,
and Jet Token expects to incur fees and expenses of $_____ in the aggregate as a result of the Business Combination, including $_____
million of expenses that are contingent on completion of the Business Combination.
We
may be subject to business uncertainties while the Business Combination is pending.
Uncertainty
about the effect of the Business Combination on employees and third parties may have an adverse effect on Jet Token and, consequently,
on Oxbridge. These uncertainties may impair Jet Token’s ability to attract, retain and motivate key personnel and could cause third
parties that deal with Jet Token to defer entering into contracts or making other decisions or seek to change existing business relationships.
If key employees depart because of issues relating to such uncertainty or a desire not to remain with the business, Jet.AI’s business
following the Business Combination could be negatively impacted. In addition, the Business Combination Agreement restricts Jet Token
from making certain expenditures and taking other specified actions without the consent of Oxbridge until the Business Combination occurs.
These restrictions may prevent Jet Token from pursuing attractive business opportunities that may arise prior to the Closing. For additional
information please see the subsection entitled “The Business Combination — Conduct of Business Pending the Business Combination.”
The
unaudited pro forma condensed combined financial information included in this proxy statement/prospectus may not be indicative of what
the actual financial position or results of operations of Jet.AI would have been for the periods presented.
The
unaudited pro forma condensed combined financial information for Jet.AI following the Business Combination in this proxy statement/prospectus
is presented for illustrative purposes only and is not necessarily indicative of what Jet.AI’s actual financial position or results
of operations would have been for the periods presented had the Business Combination been completed on the dates indicated. See the section
entitled “Unaudited Pro Forma Condensed Combined Financial Information” for more information.
The
consummation of the Business Combination is subject to a number of conditions and if those conditions are not satisfied or waived, the
Business Combination Agreement may be terminated in accordance with its terms and the Business Combination may not be completed.
The
Business Combination Agreement is subject to a number of conditions which must be fulfilled in order to complete the Business Combination.
Those conditions include: (a) approval by Oxbridge’s shareholders and Jet Token’s stockholders, (b) Oxbridge having at least
$5,000,001 of net tangible assets as of the effective time of the consummation of the Business Combination, (c) the expiration or termination
of the waiting period under the HSR Act, if applicable, (d) the listing of the shares of Jet.AI Common Stock to be issued in connection
with the Closing on Nasdaq (or another national securities exchange mutually agreed by the parties to the Business Combination Agreement)
and the effectiveness of this Registration Statement and (e) Oxbridge having, as of the Closing, after distribution of the funds in
the Trust Account and deducting all amounts to be paid pursuant to the exercise of redemption rights of public shareholders and expenses
paid or required to be paid in connection with the Business Combination (including underwriting commissions), taking into account any
liabilities that have accrued prior to the Closing but for which payment will be due, or deferred until, after the Closing, cash on hand
equal to or in excess of $5,000,000. For additional information, please see the subsection entitled “The Business Combination
— Conditions to Closing of the Business Combination Agreement.” In addition, the parties can mutually decide to terminate
the Business Combination Agreement at any time, before or after shareholder approval, or Oxbridge or Jet Token may elect to terminate
the Business Combination Agreement in certain other circumstances. For additional information please see the subsection entitled “The
Business Combination — Termination.”
We
may waive one or more of the conditions to the Business Combination.
We
may agree to waive, in whole or in part, one or more of the conditions to our obligations to complete the Business Combination, to the
extent permitted by our Existing Organizational Documents and applicable laws. For example, it is a condition to our obligation to close
the Business Combination that certain of Jet Token’s representations and warranties be true and correct in all material respects
as of the date of the Business Combination Agreement and the Effective Time. However, if the Oxbridge Board determines that it is in
the best interests of Oxbridge to proceed with the Business Combination notwithstanding the fact that a condition is not met, then the
Oxbridge Board may elect to waive that condition and close the Business Combination. For additional information please see the subsection
entitled “The Business Combination — Oxbridge, First Merger Sub and Second Merger Sub Conditions.”
The
exercise of discretion by Oxbridge’s directors and officers in agreeing to changes to the terms of or waivers of closing conditions
in the Business Combination Agreement may result in a conflict of interest when determining whether such changes to the terms of the
Business Combination Agreement or waivers of conditions are appropriate and in the best interests of Oxbridge’s shareholders.
In
the period leading up to the consummation of the Business Combination, other events may occur that, pursuant to the Business Combination
Agreement, would require Oxbridge to agree to amend the Business Combination Agreement, to consent to certain actions or to waive rights
that it is entitled to under the Business Combination Agreement. Such events could arise because of changes in the course of the business
of Jet Token, a request by Jet Token and its management to undertake actions that would otherwise be prohibited by the terms of the Business
Combination Agreement or the occurrence of other events that would have a material adverse effect on the business of Jet Token and could
entitle Oxbridge to terminate the Business Combination Agreement. In any such circumstance, it would be in the discretion of Oxbridge,
acting through the Oxbridge Board, to grant its consent or waive its rights. The existence of the financial and personal interests of
the Oxbridge directors described elsewhere in this proxy statement/prospectus may result in a conflict of interest on the part of one
or more of the Oxbridge directors between what he or she may believe is best for Oxbridge and Oxbridge’s shareholders and what
he or she may believe is best for himself or herself or his or her affiliates in determining whether or not to take the requested action.
As of the date of this proxy statement/prospectus, Oxbridge does not believe there will be any changes or waivers that Oxbridge’s
directors and officers would be likely to make after Oxbridge shareholder approval of the Business Combination has been obtained. While
certain changes could be made without further shareholder approval, if there is a change to the terms of the Business Combination that
would have a material impact on the shareholders, Oxbridge will be required to circulate a new or amended proxy statement/prospectus
or supplement thereto and resolicit the vote of Oxbridge’s shareholders with respect to the Business Combination Proposal.
If
we are unable to complete the Business Combination or any other Initial Business Combination within the Combination Period, our public
shareholders may receive an estimated $11.07 per share on the liquidation of our Trust Account (or less than $11.07 per
share in certain circumstances where a third party brings a claim against us that our Sponsor is unable to indemnify us against), and
the Oxbridge Warrants will expire worthless.
If
we are unable to complete the Business Combination or any other Initial Business Combination within the Combination Period, our public
shareholders may receive an estimated $11.07 per share on the liquidation of our Trust Account (or less than $11.07 per
share in certain circumstances where a third party brings a claim against us that our Sponsor is unable to indemnify us against (as described
below)), and the Oxbridge warrants will expire worthless.
If
third parties bring claims against us, the proceeds held in our Trust Account could be reduced and the per share redemption amount received
by our public shareholders may be less than $11.07 per share.
Our
placing of funds in the Trust Account may not protect those funds from third-party claims against us. Although we will seek to have all
vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities
with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held
in the Trust Account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute
such agreements, they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent
inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver,
in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. Although
no third parties have refused to execute an agreement waiving such claims to the monies held in the Trust Account to date, if any third
party refuses to execute such an agreement in the future, our management will perform an analysis of the alternatives available to it
and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s
engagement would be significantly more beneficial to us than any alternative.
Examples
of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant
whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would
agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition,
there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of,
any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. Upon redemption
of our public shares, either if we are unable to complete an Initial Business Combination within the prescribed timeframe, or upon the
exercise of a redemption right in connection with an Initial Business Combination, we will be required to provide for payment of claims
of creditors that were not waived that may be brought against us within the ten years following redemption. Accordingly, the per-share
redemption amount received by public shareholders could be less than the $11.07 per public share initially held in the Trust Account,
due to claims of such creditors. Our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party
(other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target
business with which we have entered into a letter of intent, confidentiality or other similar agreement, reduce the amount of funds in
the Trust Account to below the lesser of (a) $11.07 per public share and (b) the actual amount per public share held in the Trust
Account, if less than $11.07 per share due to reductions in the value of the trust assets as of the date of the liquidation of
the Trust Account, in each case including interest earned on the funds held in the Trust Account and not previously released to us to
pay our taxes, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business
who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will
it apply to any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities, including
liabilities under the Securities Act. However, we have not asked our Sponsor to reserve for such indemnification obligations, nor have
we independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our Sponsor’s
only assets are securities of our company. Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations.
As a result, if any such claims were successfully made against the Trust Account, the funds available for the Business Combination and
redemptions could be reduced to less than $11.07 per public share. In such event, we may not be able to complete the Business
Combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our
officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective
target businesses.
Our
directors may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in
the Trust Account available for distribution to our public shareholders.
In
the event that the proceeds in the Trust Account are reduced below the lesser of (a) $11.07 per public share and (b) the actual
amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $11.07
per share due to reductions in the value of the trust assets, in each case including interest earned on the funds held in the Trust Account
and not previously released to us to pay our taxes, and our Sponsor asserts that it is unable to satisfy its obligations or that it has
no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action
against our Sponsor to enforce its indemnification obligations.
While
we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary
duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations,
the amount of funds in the Trust Account available for distribution to our public shareholders may be reduced below $11.07 per
share.
We
may not have sufficient funds to satisfy indemnification claims of our directors and officers.
We
have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have
agreed, and any persons who may become officers or directors prior to an Initial Business Combination will agree, to waive any right,
title, interest or claim of any kind in or to any monies in the Trust Account and to not seek recourse against the Trust Account for
any reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by us only if (a) we have sufficient funds
outside of the Trust Account or (b) we consummate an Initial Business Combination. Our obligation to indemnify our officers and directors
may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions
also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an
action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely
affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification
provisions.
If,
after we distribute the proceeds in the Trust Account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of the Oxbridge
Board may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of the Oxbridge Board and
us to claims of punitive damages.
If,
after we distribute the proceeds in the Trust Account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor
and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy
court could seek to recover some or all amounts received by our shareholders. In addition, the Oxbridge Board may be viewed as having
breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages,
by paying public shareholders from the Trust Account prior to addressing the claims of creditors.
If,
before distributing the proceeds in the Trust Account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our
shareholders and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be
reduced.
If,
before distributing the proceeds in the Trust Account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy
law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders.
To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by our shareholders
in connection with our liquidation may be reduced.
Even
if we consummate the Business Combination, there is no guarantee that the public warrants will be in the money at the time they become
exercisable, and they may expire worthless.
The
exercise price for our warrants is $11.50 per Class A Ordinary Share. There is no guarantee that the public warrants will be in
the money following the time they become exercisable and prior to their expiration, and as such, they may expire worthless.
We
may amend the terms of the public warrants in a manner that may be adverse to holders of public warrants with the approval by the holders
of at least 50% of the then-outstanding public warrants. As a result, the exercise price of the public warrants could be increased, the
exercise period could be shortened and the number of our Class A Ordinary Shares purchasable upon exercise of a public warrant could
be decreased, all without a holder’s approval.
The
public warrants were issued in registered form under a Warrant Agreement between Continental Stock Transfer & Trust Company, as warrant
agent, and us. The Warrant Agreement provides that the terms of the public warrants may be amended without the consent of any holder
to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then-outstanding
public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we
may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then-outstanding public
warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 50% of
the then-outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the
exercise price of the public warrants, convert the public warrants into cash or stock (at a ratio different than initially provided),
shorten the exercise period or decrease the number of shares of Jet.AI Common Stock purchasable upon exercise of a public warrant.
We
may redeem unexpired warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making their warrants
worthless.
We
have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of
$0.01 per warrant, provided that the last reported sales price of our Class A Ordinary Shares equals or exceeds $18 per
share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within
a 30-trading day period ending on the third trading day prior to the date on which we give proper notice of such redemption and provided
certain other conditions are met. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are
unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding
warrants could force you (a) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for
you to do so, (b) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (c) to
accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially
less than the market value of your warrants. None of the private placement warrants will be redeemable by us for cash so long as they
are held by the initial purchasers or their permitted transferees.
In
addition, we may redeem your warrants after they become exercisable for a number of Class A Ordinary Shares determined based on the redemption
date and the fair market value of our Class A Ordinary Shares. Any such redemption may have similar consequences to a cash redemption
described above. In addition, such redemption may occur at a time when the warrants are “out-of-the-money,” in which case
you would lose any potential embedded value from a subsequent increase in the value of the Class A Ordinary Shares had your warrants
remained outstanding.
We
may issue a substantial number of additional Ordinary Shares or Oxbridge Preference Shares to complete the Business Combination or under
an employee incentive plan after completion of the Business Combination. Any such issuances would dilute the interest of our shareholders
and likely present other risks.
We
may issue additional Ordinary Shares or Oxbridge Preference Shares to complete the Business Combination or under an employee incentive
plan after completion of the Business Combination. The issuance of additional Ordinary Shares or Oxbridge Preference Shares:
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significantly dilute the equity interests of our investors; |
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subordinate the rights of holders of Ordinary Shares if Oxbridge Preference Shares are issued with rights senior to those afforded
our Ordinary Shares; |
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could
cause a change in control if a substantial number of Ordinary Shares are issued, which may affect, among other things, our ability
to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and
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adversely affect prevailing market prices for Oxbridge Units, Class A Ordinary Shares and/or the public warrants. |
If
Jet.AI is not able to comply with the applicable continued listing requirements or standards of Nasdaq, Nasdaq could delist our Jet.AI
Common Stock.
Oxbridge
has applied to list the shares of Jet.AI Common Stock, the Jet.AI Warrants and the Merger Consideration
Warrants on Nasdaq under the symbols “PJ,” “PJAIW” and “PJAIZ,” respectively, upon the closing of the
Business Combination. If, after the Business Combination, Nasdaq delists the Jet.AI Securities from trading on its exchange for failure
to meet the listing standards such as for failure to hold an annual shareholders meeting, we and our stockholders could face significant
material adverse consequences including:
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limited
availability of market quotations for our securities; |
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reduced
liquidity for Jet.AI’s securities; |
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a
determination that the Jet.AI Common Stock is a “penny stock” which will require brokers trading in the Jet.AI
Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading
market for Jet.AI’s securities; |
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limited amount of news and analyst coverage; and |
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decreased ability to issue additional securities or obtain additional financing in the future. |
Sales
of a substantial number of Class A Ordinary Shares in the public market could occur at any time and a significant portion of Jet.AI’s
total outstanding shares will be restricted from immediate resale following the consummation of the Business Combination, but may be
sold into the market in the near future. This could cause the market price of our Class A Ordinary Shares or, after the consummation
of the Business Combination, the Jet.AI Common Stock to drop significantly, even if our business is doing well.
Sales
of a substantial number of Class A Ordinary Shares in the public market could occur at any time. These sales, or the perception in the
market that the holders of a large number of shares intend to sell shares, could reduce the market price of our Class A Ordinary Shares.
After the Business Combination (and assuming no redemptions by our public shareholders of public shares), our Sponsor will hold approximately
33.13% of the Jet.AI Common Stock (or 34.07% of the Jet.AI Common Stock, assuming maximum redemptions by our public shareholders).
Pursuant to the terms of the Letter Agreement entered into at the time of the IPO, and reaffirmed in the Sponsor Letter, the Founder
Shares (which will be converted into shares of Jet.AI Common Stock in connection with the Domestication), as well as shares of
Jet.AI Common Stock held by Jet Token’s co-founders, may not be transferred until the earlier to occur of (a) one year after
the Closing or (b) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all
of our shareholders having the right to exchange their Ordinary Shares for cash, securities or other property.
If
the Business Combination’s benefits do not meet the expectations of investors, shareholders or financial analysts, the market price
of our securities may decline.
If
the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of our securities
prior to the Closing may decline. The market values of our securities at the time of the Business Combination may vary significantly
from their prices on the date the Business Combination Agreement was executed, the date of this proxy statement/prospectus or the date
on which our shareholders vote on the Business Combination.
In
addition, following the Business Combination, fluctuations in the price of Jet.AI securities could contribute to the loss of all or part
of your investment. Accordingly, the valuation ascribed to our Class A Ordinary Shares in the Business Combination may not be indicative
of the price that will prevail in the trading market following the Business Combination. If an active market for our securities develops
and continues, the trading price of Jet.AI securities following the Business Combination could be volatile and subject to wide fluctuations
in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect
on your investment in our securities and our securities may trade at prices significantly below the price you paid for them. In such
circumstances, the trading price of our securities may not recover and may experience a further decline.
Factors
affecting the trading price of Jet.AI securities following the Business Combination may include:
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or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar
to Jet.AI; |
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changes
in the market’s expectations about Jet.AI’s operating results; |
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success
of competitors; |
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Jet.AI’s
operating results failing to meet the expectation of securities analysts or investors in a particular period; |
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changes
in financial estimates and recommendations by securities analysts concerning Jet.AI or the market in general; |
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operating
and stock price performance of other companies that investors deem comparable to Jet.AI; |
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Jet.AI’s
ability to market new and enhanced products and technologies on a timely basis; |
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changes
in laws and regulations affecting Jet.AI’s business; |
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Jet.AI’s
ability to meet compliance requirements; |
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commencement
of, or involvement in, litigation involving Jet.AI; |
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changes
in Jet.AI’s capital structure, such as future issuances of securities or the incurrence of additional debt; |
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the
volume of Jet.AI Common Stock available for public sale; |
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any
major change in the Jet.AI Board or management; |
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sales
of substantial amounts of Jet.AI Common Stock by Jet.AI’s directors, executive officers or significant shareholders
or the perception that such sales could occur; and |
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general
economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of
war or terrorism. |
Broad
market and industry factors may materially harm the market price of our securities either before or after the consummation of the Business
Combination irrespective of our operating performance. The stock market in general and Nasdaq have experienced price and volume fluctuations
that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices
and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for retail
stocks or the stocks of other companies which investors perceive to be similar to Jet.AI following the Business Combination could depress
our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of
Jet.AI’s securities also could adversely affect its ability to issue additional securities and its ability to obtain additional
financing in the future.
Following
the Business Combination, if securities or industry analysts do not publish or cease publishing research or reports about Jet.AI, its
business or its market, or if they change their recommendations regarding the Jet.AI Common Stock adversely, the price and trading
volume of the Jet.AI Common Stock could decline.
The
trading market for the Jet.AI Common Stock will be influenced by the research and reports that industry or securities analysts
may publish about Jet.AI, its business, its market or its competitors. If any of the analysts who may cover Jet.AI following the Business
Combination change their recommendation regarding the Jet.AI Common Stock adversely, or provide more favorable relative recommendations
about its competitors, the price of the Jet.AI Common Stock would likely decline. If any analyst who may cover Jet.AI following
the Business Combination were to cease their coverage or fail to regularly publish reports on Jet.AI, we could lose visibility in the
financial markets, which could cause the stock price or trading volume of Jet.AI securities to decline.
Our
Sponsor, directors, officers, advisors or any of their respective affiliates may elect to purchase public shares from public shareholders,
which may influence the vote on the Business Combination Proposal and reduce the public “float” of our Class A Ordinary Shares.
Our
Sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares in privately negotiated transactions
or in the open market either prior to or following the completion of the Business Combination, although they are under no obligation
to do so. There is no limit on the number of public shares our Sponsor, directors, officers, advisors or any of their respective affiliates
may purchase in such transactions, subject to compliance with applicable law and the rules of Nasdaq. Any such privately negotiated purchases
may be effected at purchase prices that are in excess of the per share pro rata portion of the Trust Account. None of the funds in the
Trust Account will be used to purchase public shares in such transactions. None of our Sponsor, directors, officers, advisors or any
of their respective affiliates will make any such purchases when they are in possession of any material non-public information not disclosed
to the seller of such public shares or during a restricted period under Regulation M under the Exchange Act. Such a purchase could include
a contractual acknowledgement that such shareholder, although still the record holder of such public shares, is no longer the beneficial
owner thereof and therefore agrees not to exercise its redemption rights, and could include a contractual provision that directs such
shareholder to vote such shares in a manner directed by the purchaser.
In
the event that our Sponsor, directors, officers, advisors or any of their respective affiliates purchase public shares in privately negotiated
transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be
required to revoke their prior elections to redeem their shares.
The
purpose of any such purchases of public shares could be to vote such shares in favor of the Business Combination and thereby increase
the likelihood of obtaining shareholder approval of the Business Combination or to satisfy a closing condition in the Business Combination
Agreement, where it appears that such requirement would otherwise not be met. Any such purchases of our public shares may result in the
completion of the Business Combination that may not otherwise have been possible. Any such purchases will be reported pursuant to Section
13 and Section 16 of the Exchange Act to the extent the purchasers are subject to such reporting requirements.
In
addition, if such purchases are made, the public “float” of our Class A Ordinary Shares may be reduced and the number of
beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading
of our securities on Nasdaq or any other national securities exchange. See the subsection entitled “The Business Combination —
Potential Purchases of Public Shares” for a description of how our Sponsor, directors, officers, advisors or any of their respective
affiliates will select which shareholders or warrant holders to purchase securities from in any private transaction.
Changes
in laws or regulations, or a failure to comply with any laws or regulations, may adversely affect our business, investments and results
of operations.
We
are subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply with
certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time
consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those
changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply
with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our
ability to negotiate and complete the Business Combination, and our results of operations.
The
JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements
applicable to other public companies that are not emerging growth companies.
We
qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act.
As such, we take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not
emerging growth companies, including (a) the exemption from the auditor attestation requirements with respect to internal control over
financial reporting under Section 404 of the Sarbanes-Oxley Act, (b) the exemptions from say-on-pay, say-on-frequency and say-on-golden
parachute voting requirements and (c) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy
statements. As a result, our shareholders may not have access to certain information they deem important. We will remain an emerging
growth company until the earliest of (a) the last day of the fiscal year (i) following August 16, 2026, the fifth anniversary of our
IPO, (ii) in which we have total annual gross revenue of at least $1.07 billion (as adjusted for inflation pursuant to SEC rules from
time to time) or (iii) in which we are deemed to be a large accelerated filer, which means the market value of our Class A Ordinary Shares
or, after the consummation of the Business Combination, the shares of Jet.AI Common Stock that are held by non-affiliates exceeds
$700 million as of the last business day of our prior second fiscal quarter, and (b) the date on which we have issued more than $1.0
billion in non-convertible debt during the prior three year period.
In
addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the exemption from complying with
new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company.
An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply
to private companies. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the
requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. We have elected not to opt
out of such extended transition period, which means that when a standard is issued or revised and it has different application dates
for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies
adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither
an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible
because of the potential differences in accounting standards used.
We
cannot predict if investors will find our Class A Ordinary Shares or the Jet.AI Common Stock less attractive because we will rely
on these exemptions. If some investors find our Class A Ordinary Shares or the Jet.AI Common Stock less attractive as a result,
there may be a less active trading market for our Class A Ordinary Shares or the Jet.AI Common Stock and our share price may be
more volatile.
The
Oxbridge Warrants and Founder Shares may have an adverse effect on the market price of our Class A Ordinary Shares and make it more difficult
to effectuate our Business Combination.
We
issued warrants to purchase 11,500,000 Class A Ordinary Shares as part of the Oxbridge Units. We also issued 5,760,000 private placement
warrants, each exercisable to purchase one Class A Ordinary Share at $11.50 per share.
Our
initial shareholders currently own an aggregate of 2,875,000 Founder Shares. The Founder Shares are convertible into Class A Ordinary
Shares on a one-for-one basis, subject to adjustment for share splits, share dividends, reorganizations, recapitalizations and the like
and subject to further adjustment as set forth herein. In addition, if our Sponsor makes any working capital loans, it may convert those
loans into up to an additional 1,500,000 private placement warrants, at the price of $1.00 per warrant. Any issuance of
a substantial number of additional Class A Ordinary Shares upon exercise of these warrants and conversion rights will increase the number
of issued and outstanding Class A Ordinary Shares and reduce the value of the Class A Ordinary Shares issued to complete the Business
Combination. Therefore, the Oxbridge Warrants and Founder Shares may make it more difficult to effectuate the Business Combination or
increase the cost of acquiring Jet Token.
We
do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete
the Business Combination even if a substantial majority of our shareholders do not agree.
The
Existing Organizational Documents do not provide a specified maximum redemption threshold, except that in no event will we redeem public
shares in an amount that would cause our net tangible assets to be less than $5,000,001 (such that we are not subject to the SEC’s
“penny stock” rules). As a result, we may be able to complete the Business Combination even though a substantial majority
of our public shareholders do not agree with the transaction and have redeemed their shares or have entered into privately negotiated
agreements to sell their shares to our Sponsor, officers, directors, advisors or any of their respective affiliates. In the event the
aggregate cash consideration we would be required to pay for all of the Class A Ordinary Shares that are validly submitted for redemption
plus any amount required to satisfy cash conditions pursuant to the terms of the proposed Business Combination exceed the aggregate amount
of cash available to us, we may not complete the Business Combination or redeem any shares, all of the Class A Ordinary Shares
submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate Initial Business Combination.
Our
shareholders will have reduced ownership and voting interests after the Business Combination and will exercise less influence over management.
Upon
the issuance of the shares of Jet.AI Common Stock to the Historical Rollover Shareholders, current holders of Ordinary Shares
will be diluted. Following the consummation of the Business Combination, without taking into account the Merger Consideration Warrants
or Oxbridge Warrants that will remain outstanding following the Business Combination and may be exercised at a later date, current holders
of Ordinary Shares would own [15%] of the outstanding Jet.AI Common Stock.
The
market price of shares of Jet.AI Common Stock after the Business Combination may be affected by factors different from those currently
affecting the price of the Class A Ordinary Shares.
Upon
completion of the Business Combination, our shareholders and Jet Token stockholders will become holders of Jet.AI Common Stock.
Prior to the Business Combination, Oxbridge has limited operations. Upon completion of the Business Combination, Oxbridge’s results
of operations will depend upon the performance of the Jet Token business, which is affected by factors that are different from those
currently affecting the results of operations of Oxbridge.
Risks
Related to Consummation of the Domestication
Unless
the context otherwise requires, any reference in this section of this proxy statement/prospectus to “we,” “us”
or “our” refers to Oxbridge prior to the Business Combination and to Jet.AI and its subsidiaries following the Business Combination.
Upon
consummation of the Business Combination, the rights of the holders of Jet.AI Common Stock arising under the DGCL as well as the
Proposed Organizational Documents will differ from and may be less favorable to the rights of holders of Class A Ordinary Shares arising
under Cayman Islands law as well as the Existing Organizational Documents.
Upon
consummation of the Business Combination, the rights of holders of Jet.AI Common Stock will arise under the Proposed Organizational
Documents as well as the DGCL. The Proposed Organizational Documents and the DGCL contain provisions that differ in some respects from
those in the Existing Organizational Documents and under Cayman Islands law and, therefore, some rights of holders of Jet.AI Common
Stock could differ from the rights that holders of Class A Ordinary Shares currently possess. For instance, while class actions are
generally not available to shareholders under Cayman Islands law, such actions are generally available under the DGCL. This change could
increase the likelihood that Jet.AI becomes involved in costly litigation, which could have a material adverse effect on Jet.AI.
In
addition, there are differences between the Proposed Organizational Documents and the Existing Organizational Documents. For a more detailed
description of the rights of holders of Jet.AI Common Stock and how they may differ from the rights of holders of Class A Ordinary
Shares, please see the section entitled “Comparison of Corporate Governance and Shareholder Rights.” The forms of the Proposed
Certificate of Incorporation and the Proposed Bylaws of Jet.AI are attached as Annex B and Annex C, respectively, to this
proxy statement/prospectus, and we urge you to read them.
The
Proposed Organizational Documents will provide, subject to limited exceptions, that the Court of Chancery of the State of Delaware will
be the sole and exclusive forum for certain stockholder litigation matters, which could limit stockholders’ ability to obtain a
more favorable judicial forum for disputes with Jet.AI or its directors, officers, employees or stockholders.
The
Proposed Organizational Documents will require, to the fullest extent permitted by law, that derivative actions brought in name of Jet.AI,
actions against directors, officers and employees for breach of fiduciary duty and other similar actions must be brought in the Court
of Chancery in the State of Delaware or, if that court lacks subject matter jurisdiction, any state court situated in the State of Delaware
or, if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware. The Proposed
Organizational Documents will also provide that (a) such exclusive forum provision shall not apply to claims or causes of action brought
to enforce a duty or liability created by the Securities Act or the Exchange Act, or any other claim for which the federal courts have
exclusive jurisdiction, and (b) unless Jet.AI consents in writing to the selection of an alternative forum, to the fullest extent permitted
by law, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a
cause of action under the Securities Act.
Section
27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the
Exchange Act or the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for federal and
state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
Accordingly, both state and federal courts have jurisdiction to entertain such claims under the Securities Act. As noted above, the Proposed
Organizational Documents will provide that the federal district courts of the United States will be the exclusive forum for the resolution
of any complaint asserting a cause of action under the Securities Act. Due to the concurrent jurisdiction for federal and state courts
created by Section 22 of the Securities Act over all suits brought to enforce any duty or liability created by the Securities Act or
the rules and regulations thereunder, there is uncertainty as to whether a court would enforce such exclusive forum provision. Additionally,
investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
In
March 2020, the Delaware Supreme Court issued a decision in Salzburg et al. v. Sciabacucchi, which found that an exclusive forum
provision providing for claims under the Securities Act to be brought in federal court is facially valid under Delaware law. It is unclear
whether this decision will be appealed, or what the final outcome of this case will be. Jet.AI intends to enforce this provision, but
it does not know whether courts in other jurisdictions will agree with this decision or enforce it.
Any
person or entity purchasing or otherwise acquiring any interest in shares of Jet.AI capital stock shall be deemed to have notice of and
consented to the forum provisions in the Proposed Organizational Documents. The choice of forum provisions may limit a stockholder’s
ability to bring a claim in a judicial forum that it finds favorable for disputes with Jet.AI or any of its directors, officers, other
employees or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice
of forum provisions contained in the Proposed Certificate of Incorporation to be inapplicable or unenforceable in an action, Jet.AI may
incur additional costs associated with resolving such action in other jurisdictions, which could harm its business, operating results
and financial condition.
U.S.
Holders may recognize income for U.S. federal income tax purposes as a result of the Domestication.
U.S.
Holders (as defined below) may recognize gain or a deemed dividend for U.S. federal income tax purposes as a result of the Domestication.
Because the Domestication will occur immediately prior to the redemption of U.S. Holders that exercise redemption rights with respect
to their Jet.AI Common Stock, U.S. Holders exercising redemption rights will be subject to the potential tax consequences of the
Domestication.
As
discussed more fully below under the subsection entitled “The Business Combination — Material U.S. Federal Income Tax Considerations
— U.S. Federal Income Taxation of U.S. Holders,” the Domestication will qualify as a Reorganization. Section 367(b) of the
Code, which applies to the domestication of a foreign corporation in a Reorganization, may apply with respect to U.S. Holders on the
date of the Domestication and could require certain of such U.S. Holders to recognize gain (but not loss) with respect to the Domestication
unless a certain election is made to include the “all earnings and profits amount” attributable to such U.S. Holder, as discussed
more fully below under the subsection entitled “The Business Combination — Material U.S. Federal Income Tax Considerations
— U.S. Federal Income Taxation of U.S. Holders — Effects of Section 367(b).”
Additionally,
if Oxbridge were to be treated as a PFIC for U.S. federal income tax purposes, certain U.S. holders may be subject to adverse tax consequences
as a result of the Domestication. If finalized (including retroactively after the date of the Domestication) in their currently proposed
form, proposed U.S. Treasury regulations may require gain recognition by a U.S. Holder with respect to its exchange of Class A Ordinary
Shares and Oxbridge Warrants, as applicable, for Jet.AI Common Stock and Jet.AI Warrants in the Domestication. See the subsection
entitled “The Business Combination — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation
of U.S. Holders — Passive Foreign Investment Company Rules.” A U.S. Holder may be able to avoid the PFIC gain and certain
other tax consequences associated with PFIC status with respect to its Class A Ordinary Shares (but not its Oxbridge Warrants) if such
U.S. Holder either (i) is eligible to and makes a timely and valid QEF Election (as defined and described below under “The Business
Combination — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation of U.S. Holders — Passive
Foreign Investment Company Rules”) in the first taxable year in which such U.S. Holder held (or was deemed to hold) Class A Ordinary
Shares and in which Oxbridge was classified as a PFIC or (ii) makes a Mark-to-Market Election with respect to its Class A Ordinary Shares.
Generally, neither election is available with respect to the Oxbridge Warrants.
The
rules governing the U.S. federal income tax treatment of the Domestication are complex and will depend on a holder’s particular
circumstances. All holders of Oxbridge Public Securities are urged to consult with, and rely solely upon, their tax advisors regarding
the potential tax consequences to them of the Domestication, including the effects of Section 367(b) of the Code and the application
of the PFIC rules. For a more complete discussion of the U.S. federal income tax considerations of the Domestication, see the subsection
entitled “The Business Combination — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation
of U.S. Holders.” Upon consummation of the Business Combination, the rights of holders of Jet.AI Common Stock arising under
the DGCL as well as Proposed Organizational Documents will differ from and may be less favorable to the rights of holders of Class A
Ordinary Shares arising under Cayman Islands law as well as the Existing Organizational Documents.
Risks
Related to the Redemption
There
is no guarantee that a shareholder’s decision whether to redeem its shares for a pro rata portion of the Trust Account will put
the shareholder in a better future economic position.
We
can give no assurance as to the price at which a shareholder may be able to sell its public shares (including the shares of Jet.AI
Common Stock into which the public shares will convert upon the effectiveness of the Domestication) in the future following the completion
of the Business Combination or any alternative Initial Business Combination. Certain events following the consummation of the Business
Combination may cause an increase in the price of Jet.AI Common Stock and may result in a lower value realized now than a shareholder
might realize in the future had the shareholder redeemed their shares. Similarly, if a shareholder does not redeem their shares, the
shareholder will bear the risk of ownership of the Jet.AI Common Stock after the consummation of the Business Combination, and
there can be no assurance that a shareholder can sell its shares in the future for a greater amount than the redemption price set forth
in this proxy statement/prospectus. A shareholder should consult, and rely solely upon, the shareholder’s own tax and/or financial
advisor for assistance on how this may affect his, her or its individual situation.
If
our shareholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled
to redeem their Class A Ordinary Shares for a pro rata portion of the funds held in the Trust Account.
In
order to exercise their redemption rights, holders of public shares are required to submit a request in writing and deliver their shares
(either physically or electronically) to our transfer agent at least two business days prior to the extraordinary general meeting. Shareholders
electing to redeem their shares will receive their pro rata portion of the Trust Account, including interest not previously released
to us to pay our taxes, calculated as of two business days prior to the anticipated consummation of the Business Combination. If a shareholder
fails to comply with the redemption requirements specified in this proxy statement/prospectus in a timely manner, they may not be entitled
to redeem their Class A Ordinary Shares for a pro rata portion of the funds held in the Trust Account. See the subsection entitled “Extraordinary
General Meeting — Redemption Rights” for additional information on how to exercise your redemption rights.
Shareholders
who wish to redeem their shares for a pro rata portion of the Trust Account must comply with specific requirements for redemption that
may make it more difficult for them to exercise their redemption rights prior to the deadline.
Public
shareholders who wish to redeem their shares for a pro rata portion of the Trust Account must, among other things, as more fully described
in the subsection entitled “Extraordinary General Meeting — Redemption Rights,” tender their certificates to our transfer
agent or deliver their shares to the transfer agent electronically through DTC prior to 5:00 p.m., Eastern time, on , 2023 (two business
days before the extraordinary general meeting). In order to obtain a physical stock certificate, a shareholder’s broker and/or
clearing broker, DTC and our transfer agent will need to act to facilitate this request. It is our understanding that shareholders should
generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because we do not have any control
over this process or over the brokers, it may take significantly longer than two weeks to obtain a physical certificate. If it takes
longer than anticipated to obtain a physical certificate, shareholders who wish to redeem their shares may be unable to obtain physical
certificates by the deadline for exercising their redemption rights and thus will be unable to redeem their shares.
In
addition, holders of outstanding Oxbridge Units must separate the underlying public shares and public warrants prior to exercising redemption
rights with respect to the public shares. If you hold Oxbridge Units registered in your own name, you must deliver the certificate for
such units or deliver such units electronically to Continental Stock Transfer & Trust Company with written instructions to separate
such units into public shares and public warrants. This must be completed far enough in advance to permit the mailing of the public share
certificates or electronic delivery of the public shares back to you so that you may then exercise your redemption rights with respect
to the public shares following the separation of such public shares from the Oxbridge Units.
If
a broker, dealer, commercial bank, trust company or other nominee holds your Oxbridge Units, you must instruct such nominee to separate
your Oxbridge Units. Your nominee must send written instructions by facsimile to Continental Stock Transfer & Trust Company. Such
written instructions must include the number of Oxbridge Units to be split and the nominee holding such units. Your nominee must also
initiate electronically, using DTC’s DWAC (deposit withdrawal at custodian) system, a withdrawal of the relevant Oxbridge Units
and a deposit of the corresponding number of public shares and public warrants. This must be completed far enough in advance to permit
your nominee to exercise your redemption rights with respect to the public shares following the separation of such public shares from
the Oxbridge Units. While this is typically done electronically on the same business day, you should allow at least one full business
day to accomplish the separation. If you fail to cause your public shares to be separated in a timely manner, you will likely not be
able to exercise your redemption rights.
If
a public shareholder fails to receive notice of Oxbridge’s offer to redeem its public shares in connection with the Business Combination,
or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
Oxbridge
will comply with the proxy rules when conducting redemptions in connection with the Business Combination. Despite Oxbridge’s compliance
with these rules, if a public shareholder fails to receive Oxbridge’s proxy materials, such shareholder may not become aware of
the opportunity to redeem its public shares. In addition, the proxy materials that Oxbridge will furnish to holders of its public shares
in connection with the Business Combination will describe the various procedures that must be complied with in order to validly redeem
public shares. In the event that a shareholder fails to comply with these or any other procedures, its public shares may not be redeemed.
If
Oxbridge is unable to consummate the Business Combination or any other Initial Business Combination by August 16, 2023, the public
shareholders may be forced to wait beyond such date before redemption from the Trust Account.
Pursuant
to Section 49.7 of its Amended and Restated Memorandum and Articles of Association, if
Oxbridge is unable to consummate the Business Combination or any other Initial Business Combination by August 16, 2023, Oxbridge
will (a) cease all operations except for the purpose of winding up, (b) as promptly as reasonably possible but not more than ten business
days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes (less
up to $100,000 of interest to pay dissolution expenses), divided by the number of then-outstanding public shares, which redemption will
completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions,
if any), subject to applicable law, and (c) as promptly as reasonably possible following such redemption, subject to the approval of
Oxbridge’s remaining shareholders and the Oxbridge Board, liquidate and dissolve, subject in each case of (b) and (c) above to
our obligations under the applicable provisions of the Companies Act (As Revised) of the Cayman Islands, to provide for
claims of creditors and in all cases subject to the other requirements of applicable law.
The
U.S. federal income tax treatment of the redemption of Jet.AI Common Stock as a sale of such Jet.AI Common Stock depends
on a shareholder’s specific facts.
The
U.S. federal income tax treatment of a redemption of Jet.AI Common Stock will depend on whether the redemption qualifies as a
sale of such Jet.AI Common Stock under Section 302 of the Code, which will depend largely on the total number of shares of Jet.AI
Common Stock treated as held by the shareholder electing to redeem its Jet.AI Common Stock (including any stock constructively
owned by the holder including as a result of owning private placement warrants or public warrants and any of our stock that a holder
would directly or indirectly acquire pursuant to the Business Combination) relative to all of our shares of Jet.AI Common Stock
outstanding before and after the redemption. If such redemption is not treated as a sale of Jet.AI Common Stock for U.S. federal
income tax purposes, the redemption will instead be treated as a corporate distribution. For more information about the U.S. federal
income tax treatment of the redemption of Jet.AI Common Stock, see the subsection entitled “The Business Combination —
Material U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation of U.S. Holders — Redemption of Jet.AI
Common Stock” or “The Business Combination — Material U.S. Federal Income Tax Considerations — U.S. Federal
Income Taxation of Non-U.S. Holders — Redemption of Jet.AI Common Stock,” as applicable.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
proxy statement/prospectus includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E
of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events.
All statements, other than statements of present or historical fact included in this proxy statement/prospectus, regarding the proposed
Business Combination, Oxbridge’s ability to consummate the Business Combination, the benefits of the transaction, the post-combination
company’s future financial performance following the Business Combination and the post-combination company’s strategy, expansion
plans, future operations, future operating results, estimated revenues, losses, projected costs, prospects, plans and objectives of management
are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,”
“should,” “could,” “would,” “expect,” “plan,” “anticipate,” “intend,”
“believe,” “estimate,” “continue,” “project,” “strive,” “might,”
“possible,” “potential,” “predict” or the negative of such terms or other similar expressions, but
the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements are subject to known
and unknown risks, uncertainties and assumptions about us or Jet.AI that may cause our or Jet.AI’s actual results, levels of activity,
performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed
or implied by such forward-looking statements. Except as otherwise required by applicable law, Oxbridge disclaims any duty to update
any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances
after the date of this proxy statement/prospectus. Oxbridge cautions you that these forward-looking statements are subject to numerous
risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Oxbridge.
In
addition, Oxbridge cautions you that the forward-looking statements regarding Oxbridge and the post-combination company, which are included
in this proxy statement/prospectus, are subject to the following factors:
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the ability
to complete the Business Combination or, if Oxbridge does not consummate such Business Combination, any other initial business combination; |
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satisfaction or waiver
(if applicable) of the conditions to the mergers; |
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the occurrence of any event,
change or other circumstances that could delay the Business Combination or give rise to the termination of the Business Combination
Agreement; |
|
|
|
|
● |
the projected financial
information, anticipated growth rate and market opportunity of Jet.AI; |
|
|
|
|
● |
the
ability to obtain or maintain the listing of Jet.AI Common Stock and Jet.AI Warrants on Nasdaq following the Business Combination; |
|
|
|
|
● |
our public securities’
potential liquidity and trading; |
|
|
|
|
● |
our ability to raise financing
in the future; |
|
|
|
|
● |
Jet.AI’s success
in retaining or recruiting, or changes in, its officers, key employees or directors following the Business Combination; |
|
|
|
|
● |
the impact of the regulatory
environment and complexities with compliance related to such environment, including compliance with restrictions imposed by federal
law on ownership of U.S. airlines; |
|
|
|
|
● |
factors relating to the
business, operations and financial performance of Oxbridge, Jet Token or Jet.AI (or any subsidiaries of each entity), including: |
|
○ |
the ability
to anticipate the impact of the COVID-19 pandemic and its effect on business and financial conditions; |
|
● |
the outcome
of any legal proceedings that have been or may be instituted against Oxbridge following announcement of the Business Combination; |
|
|
|
|
● |
the risk that the proposed
Business Combination disrupts current plans and operations of Jet Token or Oxbridge as a result of the announcement and consummation
of the Business Combination; |
|
● |
Jet.AI’s
ability to realize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition
and the ability of Jet.AI to grow and manage growth profitably following the Business Combination; |
|
|
|
|
● |
costs related to the Business
Combination; |
|
|
|
|
● |
the possibility of third-party
claims against the Trust Account; |
|
|
|
|
● |
changes in applicable laws
or regulations; |
|
|
|
|
● |
the risk that Jet.AI may
fail to effectively build scalable and robust processes to manage the growth of its business; |
|
|
|
|
● |
the risk that demand for
Jet.AI’s products and services may decline; |
|
|
|
|
● |
high levels of competition
faced by Jet.AI with numerous market participants having greater financial resources and operating experience than Jet.AI; |
|
|
|
|
● |
the possibility that Jet.AI’s
business may be adversely affected by changes in government regulations; |
|
|
|
|
● |
the possibility that Jet.AI
may not be able to grow its client base; |
|
|
|
|
● |
the failure to attract
and retain highly qualified personnel; |
|
|
|
|
● |
the inability to finance
aircraft or generate sufficient funds; |
|
|
|
|
● |
the possibility that Jet.AI
may not have enough capital and may be required to raise additional capital; |
|
|
|
|
● |
data security breaches,
cyber-attacks or other network outages; |
|
|
|
|
● |
the volatility of the prices
of blockchain currencies; |
|
|
|
|
● |
our reliance on third parties; |
|
|
|
|
● |
our inability to adequately
protect our intellectual property interests or infringement on intellectual property interests of others; |
|
|
|
|
● |
the possibility that Oxbridge
or Jet.AI may be adversely affected by other economic, business or competitive factors; and |
|
|
|
|
● |
other factors detailed
in the section entitled “Risk Factors.” |
Should
one or more of the risks or uncertainties described in this proxy statement/prospectus and in any document incorporated by reference
in this proxy statement/prospectus materialize, or should underlying assumptions prove incorrect, actual results and plans could differ
materially from those expressed in any forward-looking statements. Additional information concerning these and other factors that may
impact the operations and projections discussed herein can be found in the section entitled “Risk Factors” and in Oxbridge’s
periodic filings with the SEC, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and any subsequently
filed quarterly reports on Form 10-Q. Oxbridge’s SEC filings are available publicly on the SEC’s website at http://www.sec.gov.
Before
any Oxbridge shareholder grants its proxy or instructs how its vote should be cast or votes on the proposals to be put to the extraordinary
general meeting, such shareholder should be aware that the occurrence of the events described in the section entitled “Risk Factors”
and elsewhere in this proxy statement/prospectus may adversely affect us.
UNAUDITED
PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The
following unaudited pro forma condensed combined balance sheet as of December 31, 2022 and the unaudited pro forma condensed combined
statements of operations for the year ended December 31, 2022 present the combination of the historical financial information of Oxbridge
and Jet Token after giving effect to the Business Combination, and related adjustments described in the accompanying notes. The following
unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X.
The
unaudited pro forma condensed combined balance sheet as of December 31, 2022 combines the historical audited condensed balance sheet
of Oxbridge as of December 31, 2022 and the historical audited condensed consolidated balance sheet of Jet Token as of December 31,
2022 on a pro forma basis as if the Business Combination had been consummated on December 31, 2022. The unaudited pro forma condensed
combined statement of operations for the year ended December 31, 2022 combines the historical audited condensed statement of operations
of Oxbridge for the year ended December 31, 2022 and the historical audited condensed consolidated statement of operations of Jet Token
for the year ended December 31, 2022 on a pro forma basis as if the Business Combination had been consummated on January 1, 2022.
The
historical financial information of Oxbridge was derived from the audited financial statements of Oxbridge as of and for the year ended
December 31, 2022, included elsewhere in this proxy statement/prospectus. The historical financial information of Jet Token was derived
from the audited financial statements of Jet Token as of and for the year ended December 31, 2022, included elsewhere in this proxy statement/prospectus.
This information should be read together with Oxbridge’s and Jet Token’s audited financial statements and related notes,
the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Oxbridge,”
and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Jet Token” and other
financial information included elsewhere in this proxy statement/prospectus.
Introduction
Oxbridge
is a blank check company incorporated on April 12, 2021 as a Cayman Islands exempted company for the purpose of effecting a merger, amalgamation,
share exchange, asset acquisition, share purchase, reorganization or other similar transaction with one or more businesses or entities.
On August 16, 2021, Oxbridge completed its IPO of 11,500,000 Oxbridge Units, including 1,500,000 Oxbridge Units that were issued pursuant
to the underwriters’ exercise of their over-allotment option in full, with each Oxbridge Unit consisting of one Class A Ordinary
Share and one warrant, where each whole warrant is exercisable to purchase one Class A Ordinary Share at a price of $11.50 per share,
generating gross proceeds to Oxbridge of $115,000,000.
Simultaneously
with the closing of its IPO, Oxbridge consummated the private placement of 5,760,000 Private Placement Warrants to the Sponsor and Maxim
Group, LLC, the representative to the underwriters in our initial public offering, at an average purchase price of $1.00
per Private Placement Warrant, generating gross proceeds to Oxbridge of $5,760,000. The Private Placement Warrants are identical to the
Public Warrants sold as part of the Units in the IPO, except that the Sponsor and Maxim have agreed not to transfer, assign or sell any
of the Private Placement Warrants (except to certain permitted transferees) until 30 days after the completion of the Company’s
initial Business Combination. The Private Placement Warrants are also not redeemable by the Company so long as they are held by the Sponsor
and Maxim or their respective permitted transferees.
Oxbridge
also issued an aggregate of 2,875,000 Class B ordinary shares to the Sponsor for an aggregate purchase price of $25,000, or approximately
$0.009 per share.
Upon
the closing of the IPO and the sale of the Private Placement Warrants, an aggregate of $116,725,000 was placed in the
Trust Account with Continental Stock Transfer & Trust Company acting as trustee and was available to be invested in United States
“government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment
Company Act”), having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated
under the Investment Company Act which invest only in direct U.S. government treasury obligations, as determined by Oxbridge, until the
earlier of: (a) the completion of an Initial Business Combination and (b) the distribution of the Trust Account.
Oxbridge
has until August 16, 2023 to complete an Initial Business Combination, which would include the Business Combination.
Jet
Token, a Delaware corporation, was founded in 2018 by Michael Winston, its Executive Chairman. Jet Token, directly and indirectly through
its subsidiaries, is principally involved in (i) the sale of fractional and whole interests in aircraft, (ii) the sale of jet cards,
which enable holders to use certain of Jet Token’s and other’s aircraft at agreed-upon rates, (iii) the operation of a proprietary
booking platform (the “App”), which functions as a prospecting and quoting platform to arrange private jet travel with third
party carriers as well as via Jet Token’s leased and managed aircraft, for Part 135 (whole aircraft charter) and Part 380 (by the
seat charter), and (iv) since January 2023, joint ownership, alongside its existing operating partner, Cirrus, of 380 Software LLC, which
supplies the technology to sell individual seats on empty legs on the Cirrus fleet of aircraft.
On
February 24, 2023, Oxbridge and its wholly owned subsidiaries, First Merger Sub and Second Merger Sub, entered into the Business Combination
Agreement with Jet Token. Pursuant to the Business Combination Agreement, and subject to the terms and conditions contained therein,
First Merger Sub will merge with and into Jet Token, with Jet Token surviving the First Merger as a wholly owned subsidiary of Jet.AI,
and as soon as practicable, but in any event within three days following the Effective Time and as part of the same overall transaction
as the First Merger, Jet Token (as the surviving entity of the First Merger) will merge with and into Second Merger Sub, with Second
Merger Sub surviving the Second Merger as a wholly owned subsidiary of Jet.AI. In connection with the Business Combination, current security
holders of Oxbridge and Jet Token will become security holders of Jet.AI. Following the Business Combination, the Jet.AI Common Stock,
the Jet.AI Warrants and the Merger Consideration Warrants are expected to trade on Nasdaq under the new symbols “PJ,” “PJAIW” and “PJAIZ,” respectively, and Jet.AI will continue as a publicly-listed entity. Prior to the closing of the Business
Combination, Oxbridge will domesticate as a Delaware corporation.
Description
of the Business Combination
As
noted above, the unaudited pro forma condensed combined financial information contained herein assumes that Oxbridge’s shareholders
approve the proposed Business Combination. Oxbridge cannot predict how many of its public shareholders will exercise their right to have
their Class A Ordinary Shares redeemed for cash. As a result, the unaudited pro forma condensed combined financial information is presented
under two different redemption scenarios, which produce different allocations of total Jet.AI equity interests between holders of Ordinary
Shares. As described in greater detail below, the first scenario, or “no redemptions scenario,” assumes that none of the
public shareholders will exercise their right to have their Class A Ordinary Shares redeemed for cash, and the second scenario, or “maximum
redemptions scenario,” assumes that holders of the maximum number of Class A Ordinary Shares that can be redeemed for cash will
exercise their right to have their Class A Ordinary Shares redeemed for cash, with Oxbridge still having: (1) as of the Closing, after
distribution of the funds in the Trust Account and deducting all amounts to be paid pursuant to the exercise of redemption rights of
public shareholders and expenses paid or required to be paid in connection with the Business Combination (including underwriting commissions),
taking into account any liabilities that have accrued prior to the Closing but for which payment will be due, or deferred until, after
the Closing, cash on hand equal to or in excess of $5,000,000, and (2) at least $5,000,001 of net tangible assets, after deducting
all amounts to be paid pursuant to the exercise of redemption rights, as required to consummate the Business Combination. The residual
cash of Oxbridge remaining after any redemption of public shares will be retained by Jet.AI. The expected cash balance of Jet.AI under
the no redemptions scenario and maximum redemptions scenario is [$7,588,920] and [$5,000,001], respectively. The actual results will
likely be within the parameters described by the two scenarios, however, there can be no assurance regarding which scenario will be closest
to the actual results. Under both scenarios, Jet Token is considered to be the accounting acquirer, as further discussed in “Note
1 — Basis of Presentation” of this unaudited pro forma condensed combined financial information.
In
connection with the Domestication and prior to the Effective Time, the total issued and outstanding 1,301,952 Class A Ordinary Shares
and 2,875,000 Class B Ordinary Shares as of [__________, 2023] will convert automatically, on a one-for-one basis, into shares of Jet.AI
Common Stock. Each issued and outstanding public warrant and private placement warrant will convert automatically into a Jet.AI Warrant
pursuant to the Warrant Agreement, entitling the holder to purchase one share of Jet.AI Common Stock at an exercise price of $11.50.
Each
outstanding share of Jet Token Common Stock, including each share of Jet Token Preferred Stock that will be converted into shares of
Jet Token Common Stock immediately prior to the Effective Time, will be cancelled and automatically converted into the right to receive
(x) the number of shares of Jet.AI Common Stock equal to the Stock Exchange Ratio, and (y) the number of Merger Consideration
Warrants equal to the Warrant Exchange Ratio. Each Jet Token Option, whether or not exercisable and whether or not vested, that is outstanding
immediately prior to the Effective Time will automatically be converted into an option to purchase a number of Jet.AI Options based on
the Option Exchange Ratio. Each Jet Token Warrant issued and outstanding immediately prior to the Effective Time shall be automatically
converted into a warrant to acquire (x) a number of shares of Jet.AI Common Stock equal to the Stock Exchange Ratio and (y) a
number of Merger Consideration Warrants equal to the Warrant Exchange Ratio. Each Jet Token RSU Award that is outstanding immediately
prior to the Effective Time will be converted into a Jet.AI RSU Award with respect to a number of RSUs based on the applicable exchange
ratio. Upon the consummation of the Business Combination, Oxbridge will immediately be renamed “Jet.AI Inc.”
Upon
the consummation of the Business Combination, it is anticipated that 4,500,000 shares of Jet.AI Common Stock and 7,353,000 Merger
Consideration Warrants will be issued to the Historical Rollover Shareholders in exchange for all outstanding shares of Jet Token Common
Stock (including shares of Jet Token Preferred Stock converted in the Conversion). It is also anticipated that we will reserve for issuance
up to 3,270,278 shares of Jet.AI Common Stock in respect of Jet.AI Options issued in exchange for outstanding pre-merger
Jet Token Options, and 148,130 shares of Jet.AI Common Stock and 242,044 Merger Consideration Warrants in respect of Jet.AI RSU
Awards issued in exchange for outstanding pre-merger Jet Token RSU Awards.
In
addition, in connection with the Business Combination, Jet.AI is proposing to implement the Omnibus Incentive Plan, which will be effective
upon closing of the Business Combination, subject to approval by Oxbridge shareholders, in place of the existing Jet Token Option Plans.
The purpose of the Omnibus Incentive Plan is to provide eligible employees, directors, consultants and the founders the opportunity to
receive stock-based incentive awards in order to encourage them to contribute materially to Jet.AI’s growth and to align the economic
interests of such persons with those of its stockholders. The financial impact of the Omnibus Incentive Plan has not been included in
the unaudited pro forma condensed combined financial statement as it cannot be reliably estimated at this stage. See “Proposal
No. 5 — The Omnibus Incentive Plan Proposal” contained elsewhere in this proxy statement/prospectus for further information.
For
more information about the Business Combination Agreement and the Business Combination, see the section entitled “The Business
Combination.”
The
following table summarizes the pro forma shares of Jet.AI Common Stock outstanding under the no redemptions scenario and the maximum
redemptions scenario, excluding the potential dilutive effect of exercise of Oxbridge Warrants and Merger Consideration Warrants:
| |
No Redemptions Scenario | | |
Maximum Redemptions Scenario | |
| |
Shares | | |
% | | |
Shares | | |
% | |
Historical Rollover Shareholders | |
| 4,500,000 | | |
| 51.86 | | |
| 4,500,000 | | |
| 53.32 | |
Public Shareholders(1) | |
| 1,301,952 | | |
| 15.00 | | |
| 1,064,218 | | |
| 12.61 | |
Initial Shareholders | |
| 2,875,000 | | |
| 33.13 | | |
| 2,875,000 | | |
| 34.07 | |
Total | |
| 8,676,952 | | |
| 100.00 | | |
| 8,439,218 | | |
| 100.00 | |
|
(1) |
Includes
115,000 shares of Class A Ordinary Shares issued to Maxim Group, LLC, the representative to the underwriters in our initial
public offering, which are not redeemable pursuant to an agreement between Maxim and the Company. |
The
following unaudited pro forma condensed combined balance sheet as of December 31, 2022 under both the no redemptions scenario and maximum
redemptions scenario and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2022, are
based on the historical financial statements of Oxbridge (as restated) and Jet Token. The unaudited pro forma adjustments are based on
information currently available, and assumptions and estimates underlying the unaudited pro forma adjustments are described in the accompanying
notes. Actual results may differ materially from the assumptions used to present the accompanying unaudited pro forma condensed combined
financial information.
UNAUDITED
PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF DECEMBER 31, 2022
(in
thousands, except share and per share amounts)
| |
| | |
| | |
No Redemption Scenario | | |
Maximum Redemption Scenario | |
| |
Jet Token, Inc. (Historical) | | |
Oxbridge Acquisition Corp. (Historical) | | |
Transaction Accounting Adjustments | | |
| |
Pro Forma Combined | | |
Transaction Accounting Adjustments | | |
| |
Pro Forma Combined | |
| |
| | |
| | |
| | |
| |
| | |
| | |
| |
| |
Assets | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Current assets: | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Cash and cash equivalents | |
$ | 1,527 | | |
$ | 212 | | |
$ | 12,835 | | |
A | |
$ | 9,824 | | |
$ | 12,835 | | |
A | |
$ | 6,695 | |
| |
| | | |
| | | |
| (4,600 | ) | |
B | |
| | | |
| (4,600 | ) | |
B | |
| | |
| |
| | | |
| | | |
| (690 | ) | |
C | |
| | | |
| (690 | ) | |
C | |
| | |
| |
| | | |
| | | |
| | | |
| |
| | | |
| (2,589 | ) | |
H | |
| | |
Other current assets | |
| 358 | | |
| 3 | | |
| - | | |
| |
| 361 | | |
| - | | |
| |
| 361 | |
Total current assets | |
| 1,885 | | |
| 215 | | |
| 7,545 | | |
| |
| 9,645 | | |
| 4,956 | | |
| |
| 7,056 | |
| |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Property and equipment, net | |
| 6 | | |
| - | | |
| - | | |
| |
| 6 | | |
| - | | |
| |
| 6 | |
Intangible assets, net | |
| 155 | | |
| - | | |
| - | | |
| |
| 155 | | |
| - | | |
| |
| 155 | |
Right-of-use asset | |
| 2,082 | | |
| - | | |
| - | | |
| |
| 2,082 | | |
| - | | |
| |
| 2,082 | |
Other assets | |
| 763 | | |
| - | | |
| - | | |
| |
| 763 | | |
| - | | |
| |
| 763 | |
Cash held in trust account | |
| - | | |
| 12,835 | | |
| (12,835 | ) | |
| |
| - | | |
| (12,835 | ) | |
| |
| - | |
Total assets | |
$ | 4,891 | | |
$ | 13,050 | | |
$ | (5,290 | ) | |
| |
$ | 12,651 | | |
$ | (7,879 | ) | |
| |
$ | 10,062 | |
| |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Liabilities and Stockholders’ Equity | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Current liabilities: | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Accounts payable | |
$ | 244 | | |
$ | - | | |
$ | - | | |
| |
$ | 244 | | |
$ | - | | |
| |
$ | 244 | |
Accrued liabilities | |
| 952 | | |
| 98 | | |
| - | | |
| |
| 1,050 | | |
| - | | |
| |
| 1,050 | |
Deferred revenue | |
| 933 | | |
| - | | |
| - | | |
| |
| 933 | | |
| - | | |
| |
| 933 | |
Lease liability, current portion | |
| 495 | | |
| - | | |
| - | | |
| |
| 495 | | |
| - | | |
| |
| 495 | |
Promissory note payable | |
| - | | |
| 575 | | |
| (575 | ) | |
B | |
| - | | |
| (575 | ) | |
B | |
| - | |
Due to affiliates | |
| - | | |
| 4 | | |
| - | | |
| |
| 4 | | |
| - | | |
| |
| 4 | |
Total current liabilities | |
| 2,624 | | |
| 677 | | |
| (575 | ) | |
| |
| 2,726 | | |
| (575 | ) | |
| |
| 2,726 | |
| |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Lease liability, net of current portion | |
| 1,531 | | |
| | | |
| | | |
| |
| 1,531 | | |
| | | |
| |
| 1,531 | |
Deferred underwriting commissions | |
| - | | |
| 4,025 | | |
| (4,025 | ) | |
B | |
| - | | |
| (4,025 | ) | |
B | |
| - | |
Derivative liabilities | |
| - | | |
| 370 | | |
| - | | |
| |
| 370 | | |
| - | | |
| |
| 370 | |
Total liabilities | |
| 4,155 | | |
| 5,072 | | |
| (4,600 | ) | |
| |
| 4,627 | | |
| (4,600 | ) | |
| |
| 4,627 | |
| |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Commitments and contingencies | |
| - | | |
| - | | |
| - | | |
| |
| - | | |
| - | | |
| |
| - | |
Class A ordinary shares; 1,186,952 shares subject to possible redemption (at redemption value) | |
| | | |
| 12,835 | | |
| (12,835 | ) | |
D | |
| - | | |
| (12,835 | ) | |
D | |
| - | |
| |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Stockholders’ Equity | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Series Seed Preferred stock | |
| 21 | | |
| - | | |
| (21 | ) | |
E | |
| - | | |
| (21 | ) | |
E | |
| - | |
Series CF Non-voting Preferred stock | |
| 704 | | |
| - | | |
| (704 | ) | |
E | |
| - | | |
| (704 | ) | |
E | |
| - | |
Preferred stock/ preference shares | |
| - | | |
| - | | |
| - | | |
| |
| - | | |
| - | | |
| |
| - | |
Common stock/ ordinary shares | |
| - | | |
| | | |
| - | | |
| |
| - | | |
| - | | |
| |
| - | |
Non-voting Common stock | |
| - | | |
| | | |
| - | | |
| |
| - | | |
| - | | |
| |
| - | |
Subscription receivable | |
| (16 | ) | |
| - | | |
| - | | |
| |
| (16 | ) | |
| - | | |
| |
| (16 | ) |
Additional paid-in capital | |
| 26,683 | | |
| - | | |
| 12,835 | | |
D | |
| 34,696 | | |
| 12,835 | | |
D | |
| 32,107 | |
| |
| | | |
| | | |
| 725 | | |
E | |
| | | |
| 725 | | |
E | |
| | |
| |
| | | |
| | | |
| 60,000 | | |
F | |
| | | |
| 60,000 | | |
F | |
| | |
| |
| | | |
| | | |
| (60,000 | ) | |
F | |
| | | |
| (60,000 | ) | |
F | |
| | |
| |
| | | |
| | | |
| (690 | ) | |
C | |
| | | |
| (690 | ) | |
C | |
| | |
| |
| | | |
| | | |
| | | |
| |
| | | |
| (2,589 | ) | |
H | |
| | |
| |
| | | |
| | | |
| (4,857 | ) | |
G | |
| | | |
| (4,857 | ) | |
G | |
| | |
Accumulated deficit | |
| (26,656 | ) | |
| (4,857 | ) | |
| 4,857 | | |
G | |
| (26,656 | ) | |
| 4,857 | | |
G | |
| (26,656 | ) |
Total stockholders’ equity | |
| 736 | | |
| (4,857 | ) | |
| 12,145 | | |
| |
| 8,024 | | |
| 9,556 | | |
| |
| 5,435 | |
Total liabilities and stockholders’ equity | |
$ | 4,891 | | |
$ | 13,050 | | |
$ | (5,290 | ) | |
| |
$ | 12,651 | | |
$ | (7,879 | ) | |
| |
$ | 10,062 | |
UNAUDITED
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2022
(in
thousands, except share and per share amounts)
| |
| | |
| | |
No Redemption Scenario | | |
Maximum Redemption Scenario | |
| |
Jet Token, Inc. (Historical) | | |
Oxbridge Acquisition Corp. (Historical) | | |
Transaction Accounting Adjustments | | |
| |
Pro Forma Combined | | |
Transaction Accounting Adjustments | | |
| |
Pro Forma Combined | |
| |
| | |
| | |
| | |
| |
| | |
| | |
| |
| |
Revenues | |
$ | 21,863 | | |
$ | - | | |
$ | - | | |
| |
$ | 21,863 | | |
$ | - | | |
| |
$ | 21,863 | |
Cost of revenues | |
| 19,804 | | |
| - | | |
| - | | |
| |
| 19,804 | | |
| - | | |
| |
| 19,804 | |
| |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Gross profit | |
| 2,059 | | |
| - | | |
| - | | |
| |
| 2,059 | | |
| - | | |
| |
| 2,059 | |
| |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Operating Expenses: | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
General and administrative | |
| 9,231 | | |
| 487 | | |
| - | | |
| |
| 9,718 | | |
| - | | |
| |
| 9,718 | |
Sales and marketing | |
| 427 | | |
| - | | |
| - | | |
| |
| 427 | | |
| - | | |
| |
| 427 | |
Research and development | |
| 137 | | |
| - | | |
| - | | |
| |
| 137 | | |
| - | | |
| |
| 137 | |
Total operating expenses | |
| 9,795 | | |
| 487 | | |
| - | | |
| |
| 10,282 | | |
| - | | |
| |
| 10,282 | |
| |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Operating loss | |
| (7,736 | ) | |
| (487 | ) | |
| - | | |
| |
| (8,223 | ) | |
| - | | |
| |
| (8,223 | ) |
| |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Other income: | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Other interest income | |
| - | | |
| (4) | | |
| - | | |
| |
| (4) | | |
| - | | |
| |
| (4) | |
Interest earned on marketable securities held in trust | |
| - | | |
| (960 | ) | |
| 960 | | |
AA | |
| - | | |
| 960 | | |
AA | |
| - | |
Change in fair value of warrant liabilities | |
| - | | |
| (6,699 | ) | |
| - | | |
| |
| (6,699 | ) | |
| - | | |
| |
| (6,699 | ) |
Total other income | |
| - | | |
| (7,663 | ) | |
| 960 | | |
| |
| (6,703 | ) | |
| 960 | | |
| |
| (6,703 | ) |
| |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Loss before provision for income taxes | |
| (7,736 | ) | |
| 7,176 | | |
| (960 | ) | |
| |
| (1,520 | ) | |
| (960 | ) | |
| |
| (1,520 | ) |
| |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Provision for income taxes | |
| 2 | | |
| - | | |
| - | | |
| |
| 2 | | |
| - | | |
| |
| 2 | |
| |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Net (loss) income | |
$ | (7,738 | ) | |
$ | 7,176 | | |
$ | (960 | ) | |
| |
$ | (1,522 | ) | |
$ | (960 | ) | |
| |
$ | (1,522 | ) |
| |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| |
| | |
Weighted average shares outstanding – basic and diluted | |
| 122,747,555 | | |
| 13,133,764 | | |
| | | |
| |
| 17,633,764 | | |
| | | |
| |
| 17,396,030 | |
Net (loss) income per share - basic and diluted | |
$ | (0.06 | ) | |
$ | 0.55 | | |
| | | |
| |
$ | (0.09 | ) | |
| | | |
| |
$ | (0.09 | ) |
NOTES
TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Basis
of Presentation
The
Business Combination has been accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance
with GAAP. Under this method of accounting, Oxbridge Acquisition Corp, Inc. (“Oxbridge”) has been treated as the “accounting
acquiree” and Jet Token, Inc. (“Jet Token”) as the “accounting acquirer” for financial reporting
purposes. Accordingly, for accounting purposes, the Business Combination has been treated as the equivalent of Jet Token issuing shares
for the net assets of Oxbridge, Inc., followed by a recapitalization. The net assets of Jet Token will be stated at historical cost.
Operations prior to the Business Combination will be those of Jet Token.
The
unaudited pro forma condensed combined balance sheet as of December 31, 2022 assumes that the Business Combination occurred on December
31, 2022. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2022 give pro forma effect
to the Business Combination as if it had been completed on January 1, 2022. These periods are presented on the basis of Jet Token as
the accounting acquirer.
The
pro forma adjustments reflecting the consummation of the Business Combination and related transactions are based on certain currently
available information and certain assumptions and methodologies that the Company believes are reasonable under the circumstances. The
unaudited condensed pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes
available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments, and it is
possible the difference may be material. The Company believes that its assumptions and methodologies provide a reasonable basis for presenting
all of the significant effects of the Business Combination and related transactions based on information available to management at the
time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma
condensed combined financial information.
The
unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies,
tax savings, or cost savings that may be associated with the Business Combination. The unaudited pro forma condensed combined financial
information is not necessarily indicative of what the actual results of operations and financial position would have been had the Business
Combination and related transactions taken place on the dates indicated, nor are they indicative of the future consolidated results of
operations or financial position of the Company. They should be read in conjunction with the historical financial statements and notes
thereto of Jet Token, Inc. and Oxbridge included in the Form 8-K, and other financial information included elsewhere.
Note
2. Accounting Policies
Upon
consummation of the Business Combination, management is performing a comprehensive review of the two entities’ accounting policies.
As a result of the review, management may identify differences between the accounting policies of the two entities which, when conformed,
could have a material impact on the financial statements of the Company. Based on its initial analysis, management did not identify any
differences that would have a material impact on the unaudited pro forma condensed combined financial information. As a result, the unaudited
pro forma condensed combined financial information does not assume any differences in accounting policies.
Note
3. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information
The
unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Business Combination and
has been prepared for informational purposes only.
The
following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation
S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.”
Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the
transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects
that have occurred or are reasonably expected to occur (“Management’s Adjustments”). The Company has elected not to
present Management’s Adjustments and will only be presenting Transaction Accounting Adjustments in the following unaudited pro
forma condensed combined financial information.
The
pro forma combined provision for income taxes does not necessarily reflect the amounts that would have resulted had the post-combination
company filed consolidated income tax returns during the periods presented. The pro forma basic and diluted loss per share amounts presented
in the unaudited pro forma condensed combined statements of operations are based upon the number of the Company’s shares outstanding,
assuming the Business Combination and related transactions occurred as of the beginning of the period presented.
Adjustments
to Unaudited Pro Forma Condensed Combined Balance Sheet
The
adjustments included in the unaudited pro forma condensed combined balance sheet as of December 31, 2022 are as follows:
|
A. |
Reflects the
reclassification of marketable securities held in the Trust Account to cash and cash equivalents. |
|
|
|
|
B. |
Reflects the repayment
of the promissory note and payment of deferred underwriting commissions both of which become payable upon the completion of a business
combination. |
|
|
|
|
C. |
Represents acquisition-related
transaction costs totaling $690,000 (all of which is expected to be classified as equity issuance costs). The transaction costs are
$690,000 for Oxbridge. The total amount of transaction costs may vary if additional agreements are entered into prior to the Closing. |
|
|
|
|
D. |
Represents
the conversion of Oxbridge’s Ordinary Shares to shares of common stock of the Domesticated Acquiror, par value $0.0001 per
share, pursuant the Business Combination Agreement. |
|
|
|
|
E. |
Represents
the conversion of Jet Token’s Series Seed Preferred Stock and Series CF Non-Voting Preferred Stock to shares of Jet Token common
stock, par value $0.0000001 per share, pursuant the Business Combination Agreement. |
|
|
|
|
F. |
Represents recapitalization
of Jet Token’s outstanding equity and the issuance of common stock and warrants to Jet Token shareholders as consideration
for the reverse recapitalization. Warrants were valued at an estimated $60,000,000 using the Black-Scholes model and are considered
equity issuance costs associated with the Business Combination, and thus are contained within additional paid-in capital. |
|
|
|
|
G. |
Reflects the reclassification
of Oxbridge’s historical accumulated deficit. |
|
|
|
|
H. |
Reflects the redemption
of 237,734 public shares for aggregate redemption payments of $2.6 million allocated to common stock and additional paid-in capital
using par value $0.0001 per share and at a redemption price of $10.89 per share. |
Adjustments
to Unaudited Pro Forma Condensed Combined Statements of Operations
The
pro forma adjustments included in the unaudited pro forma condensed combined statement of operations for year ended December 31, 2022
are as follows:
|
AA. |
Reflects elimination of investment income on the Trust Account. |
Note
4. Net Loss per Share
Net
loss per share was calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection
with the Business Combination, assuming the shares were outstanding since January 1, 2022. As the Business Combination and related transactions
are being reflected as if they had occurred at the beginning of the periods presented, the calculation of weighted average shares outstanding
for basic and diluted net income (loss) per share assumes that the shares issuable in the Business Combination have been outstanding
for the entirety of all periods presented.
The
unaudited pro forma condensed combined financial information has been prepared based on the following information:
| |
For the Year Ended | |
| |
December 31, 2022 | |
| |
| |
Pro forma net loss | |
$ | (1,522 | ) |
Weighted average shares outstanding of common stock | |
| 17,633,764 | |
Net loss per share - basic and diluted | |
$ | (0.09 | ) |
| |
| | |
Excluded
securities: (1) | |
| | |
Assumed options | |
| 3,082,233 | |
Merger Consideration Warrants issued to Jet Token Shareholders | |
| 7,275,000 | |
Assumed warrants | |
| 345,465 | |
Public Warrants | |
| 11,500,000 | |
Private Warrants | |
| 5,760,000 | |
Restricted Stock Unit Awards | |
| 128,742 | |
(1)
The potentially dilutive outstanding securities were excluded from the computation of pro forma net loss per share, basic and
diluted, because their effect would have been anti-dilutive, issuance or vesting of such shares is contingent upon the satisfaction
of certain conditions which were not satisfied by the end of the periods presented.
COMPARATIVE
SHARE INFORMATION
The
following table sets forth summary historical comparative share information for Oxbridge and Jet Token, respectively, and unaudited pro
forma condensed combined per share information of Surviving Entity after giving effect to the Business Combination, presented under two
scenarios:
|
● |
Assuming No
Redemptions Scenario — this scenario assumes that none of the public shareholders exercise their right to have their Class
A Ordinary Shares redeemed for cash; and |
|
● |
Assuming
Maximum Redemptions Scenario — this scenario assumes that 237,734 Class A Ordinary Shares are redeemed for an aggregate payment
of $2,588,920, which is the maximum number of shares that could be redeemed in connection with the Business Combination at an assumed
redemption price of $10.89 per share based on the Trust Account balance as of [_____, 2023] with Oxbridge still having: (a) as
of the Closing, after distribution of the funds in the Trust Account and deducting all amounts to be paid pursuant to the exercise
of redemption rights of public shareholders and expenses paid or required to be paid in connection with the Business Combination
(including underwriting commissions), taking into account any liabilities that have accrued prior to the Closing but for which payment
will be due, or deferred until, after the Closing, cash on hand equal to or in excess of $5,000,000 and (b) at least $5,000,001
of net tangible assets, after deducting all amounts to be paid pursuant to the exercise of redemption rights, as required to
consummate the Business Combination. |
The
pro forma book value information reflects the Business Combination as if it had occurred on December 31, 2022. The weighted average shares
outstanding and net loss per share information reflect the Business Combination as if it had occurred on January 1, 2022.
This
information is only a summary and should be read in conjunction with the historical financial statements of Oxbridge (as restated) and
Jet Token and related notes included elsewhere in this proxy statement/prospectus. The unaudited pro forma combined per share information
of Oxbridge and Jet Token is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial
information and related notes included in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”
The
unaudited pro forma combined income (loss) per share information below does not purport to represent the income (loss) per share which
would have occurred had the companies been combined during the periods presented, nor earnings per share for any future date of period.
The unaudited pro forma combined book value per share information below does not purport to represent what the value of Oxbridge and
Jet Token would have been had the companies been combined during the periods presented.
| |
| | |
| | |
Combined Pro Forma | |
| |
| | |
| | |
| | |
Assuming | |
| |
Jet Token | | |
Oxbridge | | |
Assuming No | | |
Maximum | |
(In thousands, except share and per share data) | |
(Historical)(2) | | |
(Historical) | | |
Redemption | | |
Redemption | |
As of and for the Year ended December 31, 2022 | |
| | | |
| | | |
| | | |
| | |
Book value per share(1) | |
$ | 0.01 | | |
$ | (1.16 | ) | |
$ | 0.92 | | |
$ | 0.64 | |
Weighted average shares outstanding – basic | |
| 122,747,555 | | |
| 13,133,764 | | |
| 17,633,764 | | |
| 17,396,030 | |
Weighted average shares outstanding – diluted | |
| 122,747,555 | | |
| 13,133,764 | | |
| 17,633,764 | | |
| 17,396,030 | |
Basic net (loss) income
per share(2)(3) | |
$ | (0.06 | ) | |
$ | 0.55 | | |
$ | (0.09 | ) | |
$ | (0.09 | ) |
Diluted net (loss) income
per share(2)(3) | |
$ | (0.06 | ) | |
$ | 0.55 | | |
$ | (0.09 | ) | |
$ | (0.09 | ) |
|
(1) |
Book
value per share = Total permanent equity divided by the total number of Jet Token common shares or total Oxbridge Class A and Class
B Ordinary Shares outstanding classified in permanent equity, as applicable. |
|
(2) |
Excludes
the impact of vested and unvested Jet Token Options and Warrants that will be converted into options and warrants to purchase 3,427,697
shares of Jet.AI Common Stock as part of the Business Combination. The shares underlying these Jet Token Options will not
represent legally issued and outstanding shares of Jet.AI Common Stock until such options (as converted after the Business
Combination) are exercised. As such, these underlying shares were excluded from the calculation of pro forma net loss per share. |
|
(3) |
For
purposes of applying the treasury stock method to calculate pro forma diluted net loss per share, it was assumed that all 17,260,000
outstanding warrants sold in the initial public offering and all 7,353,000 warrants distributed to Jet Token shareholders are exchanged
for Jet.AI Common Stock. However, since this results in anti-dilution, the effect of such exchange was not included in the
calculation of pro forma diluted net loss per share. |
MARKET
PRICE AND DIVIDEND INFORMATION
Oxbridge
Oxbridge
Units, Class A Ordinary Shares, and Oxbridge Warrants are currently traded on Nasdaq under the symbols “OXACU,” “OXAC”
and “OXACW,” respectively.
The
closing price of the Oxbridge Units, Class A Ordinary Shares and public warrants on [_____, 2023], the last trading day before announcement
of the execution of the Business Combination Agreement, was $10.65, $10.43 and $0.0354, respectively. As of [_____, 2023],
the record date for the extraordinary general meeting, the most recent closing price for Oxbridge Units, Class A Ordinary Shares and
Oxbridge Warrants was [$____], [$____] and [$____], respectively.
Holders
of the Oxbridge Units, Class A Ordinary Shares and Oxbridge Warrants should obtain current market quotations for their securities. The
market price of Oxbridge’s securities could vary at any time before the Business Combination.
Holders
As
of [_____, 2023], there were [one] holder of record of Oxbridge Units, [two] holders of record of Class A Ordinary Shares,
[one] holder of record of Class B Ordinary Shares and [three] holders of record of warrants. The number of holders
of record does not include a substantially greater number of “street name” holders or beneficial holders whose Oxbridge Units,
public shares and public warrants are held of record by banks, brokers and other financial institutions. For additional information,
see the section entitled “Beneficial Ownership of Securities.”
Dividends
Oxbridge
has not paid any cash dividends on the Ordinary Shares to date and does not intend to pay cash dividends prior to the consummation of
the Business Combination. The payment of cash dividends in the future will be dependent upon Jet.AI’s revenues and earnings, if
any, capital requirements and general financial condition subsequent to consummation of the Business Combination. The payment of any
cash dividends subsequent to the Business Combination will be within the discretion of the Jet.AI Board. It is the present intention
of the Oxbridge Board to retain all earnings, if any, for use in its business operations and, accordingly, the Oxbridge Board does not
anticipate declaring any dividends in the foreseeable future. Further, if Oxbridge incurs any indebtedness, Oxbridge’s ability
to declare dividends may be limited by restrictive covenants Oxbridge may agree to in connection therewith.
Jet
Token
Historical
market price information for Jet Token is not provided because there is no public market for Jet Token’s securities. For more information
regarding Jet Token’s liquidity and capital resources, see the section entitled “Management’s Discussion and Analysis
of Financial Condition and Results of Operations of Jet Token – Liquidity and Capital Resources.”
EXTRAORDINARY
GENERAL MEETING
General
We
are furnishing this proxy statement/prospectus to our shareholders as part of the solicitation of proxies by the Oxbridge Board for use
at the extraordinary general meeting to be held on [ , 2023], and at any adjournment thereof. This proxy statement/prospectus is first
being furnished to our shareholders on or about [ , 2023]. This proxy statement/prospectus provides you with information you need to
know to be able to vote or instruct your vote to be cast at the extraordinary general meeting.
All
shareholders as of the record date, or their duly appointed proxies, may attend the extraordinary general meeting. For the purpose of
satisfying requirements of Cayman Islands law, the extraordinary general meeting will be conducted at a physical location.
Our
virtual extraordinary general meeting format uses technology designed to increase shareholder access, save Oxbridge and our shareholders
time and money and provide our shareholders rights and opportunities to participate in the virtual extraordinary general meeting similar
to those they would have at the in-person extraordinary general meeting, at no cost. In addition to online attendance, we provide shareholders
with an opportunity to hear all portions of the official extraordinary general meeting as conducted by the Oxbridge Board, submit written
questions and comments during the extraordinary general meeting and vote online during the open poll portion of the extraordinary general
meeting. We welcome your suggestions on how we can make our virtual extraordinary general meeting more effective and efficient.
Shareholders
will have multiple opportunities to submit questions to Oxbridge for the extraordinary general meeting. Shareholders who wish to submit
a question in advance may do so by pre-registering online and then selecting the chat box link. Shareholders also may submit questions
live during the meeting. Questions pertinent to extraordinary general meeting matters may be recognized and answered during the extraordinary
general meeting in our discretion, subject to time constraints. We reserve the right to edit or reject questions that are inappropriate
for extraordinary general meeting matters. In addition, we will offer live technical support for all shareholders attending the extraordinary
general meeting virtually.
To
attend online and participate in the extraordinary general meeting, shareholders of record will need to visit [______________] and enter
the control number provided on your proxy card, regardless of whether you pre-registered.
Date,
Time and Place
The
extraordinary general meeting will be held in person on [___________, 2023], at [___], Eastern time, at [Suite 201, 42 Edward Street,
George Town, Grand Cayman, Cayman Islands, KY1-9006] or such other date, time and place to which such meeting may be adjourned, to
consider and vote upon the Proposals.
Voting
Power; Record Date
You
will be entitled to vote or direct votes to be cast at the extraordinary general meeting if you owned Ordinary Shares, i.e., Class A
Ordinary Shares or Class B Ordinary Shares, at the close of business on [___________, 2023], which is the record date for the extraordinary
general meeting. You are entitled to one vote for each Ordinary Share that you owned as of the close of business on the record date.
If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other
nominee to ensure that votes related to the shares you beneficially own are properly counted. As of the close of business on the record
date, there were [1,301,952] outstanding Class A Ordinary Shares, which are held by our public shareholders, and [2,875,000]
outstanding Class B Ordinary Shares, which are held by our initial shareholders.
Vote
of our Sponsor and the Directors and Officers of Oxbridge
Our
Sponsor, directors and officers have agreed to vote any Class A Ordinary Shares and Class B Ordinary Shares owned by them in favor of
the Business Combination and the other Proposals. Currently, they own approximately [68.83]% of our issued and outstanding Class A Ordinary
Shares and Class B Ordinary Shares, in the aggregate, all of which are subject to an agreement to vote in favor of the Business Combination.
As a result, if only the minimum amount of shares needed to establish a quorum are present and all such shares are actually voted on
the Business Combination Proposal, none of the outstanding Class A Ordinary Shares would need to be voted in favor of the Business
Combination in order for the Business Combination to be approved.
Our
Sponsor, directors and officers have waived any redemption rights, including with respect to Class A Ordinary Shares purchased in our
IPO or in the aftermarket, in connection with the Business Combination. The Founder Shares held by our Sponsor and our independent directors
have no redemption rights upon our liquidation and will be worthless if we do not effect an Initial Business Combination within the Combination
Period. However, our Sponsor, directors and officers are entitled to redemption rights upon our liquidation with respect to any Class
A Ordinary Shares they may own.
Quorum
and Required Vote for Proposals for the Extraordinary General Meeting
A
quorum of our shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if holders
of one-third of the Class A Ordinary Shares and Class B Ordinary Shares entitled to vote thereat attend in person, online or by
proxy at the extraordinary general meeting. Abstentions will count as present for the purposes of establishing a quorum.
The
approval of each of the Business Combination Proposal, the Advisory Organizational Documents Proposals, the Omnibus Incentive Plan Proposal,
the Director Election Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative
vote (in person, online or by proxy) of the holders of a majority of the Class A Ordinary Shares and Class B Ordinary Shares entitled
to vote and actually casting votes thereon at the extraordinary general meeting, voting as a single class. Under the Existing Organizational
Documents, only the holders of Class B Ordinary Shares are entitled to vote on the election of directors and therefore the Director Election
Proposal. Approval of the Domestication Proposal and the Organizational Documents Proposal requires a special resolution under Cayman
Islands law, being the affirmative vote (in person, online or by proxy) of the holders of at least two-thirds of the Class A Ordinary
Shares and Class B Ordinary Shares entitled to vote and actually casting votes thereon at the extraordinary general meeting, voting as
a single class. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count
as votes cast at the extraordinary general meeting. Accordingly, a shareholder’s failure to vote in person, online or by proxy
at the extraordinary general meeting or an abstention from voting will have no effect on the outcome of the vote on any of the Proposals.
The
Closing is conditioned on the approval of the Condition Precedent Proposals at the extraordinary general meeting. Each of the Condition
Precedent Proposals is cross-conditioned on each of the other Condition Precedent Proposals. The Adjournment Proposal is not conditioned
on the approval of any other proposal set forth in this proxy statement/prospectus.
Recommendation
to Oxbridge Shareholders
After
careful consideration, the Oxbridge Board recommends that our shareholders vote “FOR” each Proposal (or in the case of the
Director Election Proposal, “FOR ALL NOMINEES”) being submitted to a vote of the shareholders at the extraordinary general
meeting.
For
a more complete description of our reasons for the approval of the Business Combination and the recommendation of the Oxbridge Board,
see the subsection entitled “The Business Combination — The Oxbridge Board’s Reasons for the Approval of the Business
Combination.”
Voting
Your Shares
Each
Class A Ordinary Share and each Class B Ordinary Share that you own in your name entitles you to one vote on each of the Proposals for
the extraordinary general meeting. Your one or more proxy cards show the number of Class A Ordinary Shares and Class B Ordinary Shares
that you own. There are several ways to vote your Class A Ordinary Shares and Class B Ordinary Shares:
|
● |
You can vote
your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold
your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided
to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the extraordinary general meeting.
If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct
on the proxy card. If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted
“FOR” each of the Proposals presented at the extraordinary general meeting. If you fail to return your proxy card or
fail to instruct your bank, broker or other nominee how to vote, and do not virtually attend the extraordinary general meeting, the
effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present
at the extraordinary general meeting and will not be voted. An abstention or broker non-vote will be counted towards the quorum requirement
but will not count as a vote cast at the extraordinary general meeting. |
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You can attend the extraordinary
general meeting and vote in person or online even if you have previously voted by submitting a proxy pursuant to any of the methods
noted above. However, if your Class A Ordinary Shares or Class B Ordinary Shares are held in the name of your broker, bank or other
nominee, you must get a proxy from the broker, bank or other nominee. That is the only way we can be sure that the broker, bank or
nominee has not already voted your Class A Ordinary Shares or Class B Ordinary Shares. |
Revoking
Your Proxy
If
you give a proxy, you may revoke it at any time before the extraordinary general meeting or at such meeting by doing any one of the following:
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you may send
another proxy card with a later date; |
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you may notify our secretary,
in writing, before the extraordinary general meeting that you have revoked your proxy; or |
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you may attend the extraordinary
general meeting, revoke your proxy and vote in person or online, as indicated above. |
No
Additional Matters May Be Presented at the Extraordinary General Meeting
The
extraordinary general meeting has been called to consider only the approval of the Business Combination Proposal, the Domestication Proposal,
the Organizational Documents Proposal, the Advisory Organizational Documents Proposals, the Omnibus Incentive Plan Proposal, the Director
Election Proposal and the Adjournment Proposal. Under the Existing Organizational Documents, other than procedural matters incident to
the conduct of the extraordinary general meeting, no other matters may be considered at the extraordinary general meeting if they are
not included in this proxy statement/prospectus, which serves as the notice of the extraordinary general meeting.
Who
Can Answer Your Questions About Voting Your Shares
If
you have any questions about how to vote or direct a vote in respect of your Class A Ordinary Shares or Class B Ordinary Shares, you
may call [●], our proxy solicitor, at [●].
Redemption
Rights
Pursuant
to the Existing Organizational Documents, a public shareholder may request that Oxbridge redeem all or a portion of its public shares
for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public
shares to be redeemed only if you:
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hold public
shares or, if you hold public shares through Oxbridge Units, you elect to separate your Oxbridge Units into the underlying public
shares and public warrants prior to exercising your redemption rights with respect to the public shares; |
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submit a written request
to Continental Stock Transfer & Trust Company, Oxbridge’s transfer agent, in which you (i) request that Jet.AI redeem all
or a portion of your public shares for cash, and (ii) identify yourself as the beneficial holder of the public shares and provide
your legal name, phone number and address; and |
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deliver your public shares
to Continental Stock Transfer & Trust Company, Oxbridge’s transfer agent, physically or electronically through DTC. |
Holders
must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern time,
on [__________, 2023] (two business days before the extraordinary general meeting) in order for their shares to be redeemed.
Holders
of Oxbridge Units must elect to separate the Oxbridge Units into the underlying Class A Ordinary Shares and public warrants prior to
exercising redemption rights with respect to the public shares. If public shareholders hold their Oxbridge Units in an account at a brokerage
firm or bank, such public shareholders must notify their broker or bank that they elect to separate the Oxbridge Units into the underlying
public shares and public warrants. Your nominee must send written instructions by facsimile to Continental Stock Transfer & Trust
Company. Such written instructions must include the number of Oxbridge Units to be split and the nominee holding such units. Your nominee
must also initiate electronically, using DTC’s DWAC (deposit withdrawal at custodian) system, a withdrawal of the relevant units
and a deposit of the corresponding number of public shares and public warrants. This must be completed far enough in advance to permit
your nominee to exercise your redemption rights with respect to the public shares following the separation of such public shares from
the Oxbridge Units. While this is typically done electronically on the same business day, you should allow at least one full business
day to accomplish the separation. If you fail to cause your public shares to be separated in a timely manner, you will likely not be
able to exercise your redemption rights. If a holder holds Oxbridge Units registered in its own name, the holder must contact Continental
Stock Transfer & Trust Company, Oxbridge’s transfer agent, directly and instruct it to separate the Oxbridge Units into the
underlying Class A Ordinary Shares and public warrants.
The
redemption rights include the requirement that a holder must identify itself to Oxbridge in order to validly redeem its shares. Public
shareholders (other than the initial shareholders) may elect to redeem their public shares even if they vote “FOR” the Business
Combination Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder,
broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or
a portion of the public shares that it holds and timely delivers its shares to Continental Stock Transfer & Trust Company, Jet.AI
will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the Trust Account relating to
such public shares, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes,
as of [__________, 2023], this would have amounted to $10.89 per issued and outstanding public share. Each redemption of Class A Ordinary
Shares by our public shareholders will decrease the amount in our Trust Account. Our Amended and Restated Memorandum and Articles
of Association provide that in no event will we redeem public shares in an amount that would cause our net tangible assets to be
less than $5,000,001. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public
shares for cash and will no longer own public shares. The redemption will take place following the Domestication and, accordingly, it
is shares of Jet.AI Common Stock that will be redeemed immediately after consummation of the Business Combination.
Prior
to exercising redemption rights, shareholders should verify the market price of our Class A Ordinary Shares as they may receive higher
proceeds from the sale of their Class A Ordinary Shares in the public market than from exercising their redemption rights if the market
price per share is higher than the redemption price. We cannot assure you that you will be able to sell your Class A Ordinary Shares
in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient
liquidity in the Class A Ordinary Shares when you wish to sell your shares.
If
you exercise your redemption rights, your Class A Ordinary Shares will cease to be outstanding immediately prior to the Business Combination
and will only represent the right to receive a pro rata share of the aggregate amount on deposit in the Trust Account. You will no longer
own those shares and will have no right to participate in, or have any interest in, our future growth following the Business Combination,
if any. You will be entitled to receive cash for these shares only if you properly and timely demand redemption.
If
the Business Combination is not approved and we do not consummate an Initial Business Combination within the Combination Period, we will
be required to dissolve and liquidate our Trust Account by returning the then-remaining funds in such account to the public shareholders
and the public warrants will expire worthless.
Appraisal
Rights
There
are no appraisal rights available to holders of Class A Ordinary Shares, Class B Ordinary Shares or Oxbridge Warrants in connection with
the Business Combination or Domestication under Cayman Islands law or the DGCL.
Proxy
Solicitation Costs
We
are soliciting proxies on behalf of the Oxbridge Board. This solicitation is being made by mail but also may be made by telephone or
in person. Oxbridge and its directors, officers and employees may also solicit proxies in person. We will file with the SEC all scripts
and other electronic communications as proxy soliciting materials. Oxbridge will bear the cost of the solicitation.
We
have engaged [●] to assist in the proxy solicitation process. We will pay that firm a fee of [$__________], plus disbursements.
We will also reimburse [●] for reasonable out-of-pocket expenses and will indemnify [●] and its affiliates
against certain claims, liabilities, losses, damages and expenses. We may also reimburse brokerage firms, banks and other agents for
the cost of forwarding proxy materials to beneficial owners.
THE
BUSINESS COMBINATION
This
section of the proxy statement/prospectus describes the material provisions of the Business Combination Agreement and the transactions
contemplated thereby, but does not purport to describe all of the terms of the Business Combination Agreement. The following summary
is qualified in its entirety by reference to the complete text of the Business Combination Agreement, a copy of which is attached as
Annex A hereto. You are urged to read the Business Combination Agreement in its entirety because it is the primary legal document that
governs the Business Combination.
The
Business Combination Agreement contains representations, warranties and covenants that the respective parties made to each other as of
the date of the Business Combination Agreement or other specific dates. The assertions embodied in those representations, warranties
and covenants were made and will be made for purposes of the contract among the respective parties and are subject to important qualifications
and limitations agreed to by the parties in connection with negotiating the Business Combination Agreement. The representations, warranties
and covenants in the Business Combination Agreement are also modified in important part by the underlying disclosure schedules, which
we refer to as the “Schedules,” which are not filed publicly and which are subject to a contractual standard of materiality
different from that generally applicable to shareholders and were used for the purpose of allocating risk among the parties rather than
establishing matters as facts. Accordingly, you should not rely on the representations and warranties in the Business Combination Agreement
as characterizations of the actual state of facts about the respective parties. Moreover, information concerning the subject matter of
the representations and warranties may change after the date of the Business Combination Agreement, which subsequent information may
or may not be fully reflected in our public disclosures.
Capitalized
terms used but not defined herein shall have the meanings ascribed to such terms in the Business Combination Agreement.
General:
Structure of the Business Combination
On
February 24, 2023, Oxbridge, First Merger Sub, Second Merger Sub and Jet Token entered into the Business Combination Agreement, pursuant
to which First Merger Sub will merge with and into Jet Token, with Jet Token surviving the First Merger as a wholly owned subsidiary
of Jet.AI, and as soon as practicable, but in any event within three days following the Effective Time and as part of the same overall
transaction as the First Merger, Jet Token (as the surviving entity of the First Merger) will merge with and into Second Merger Sub,
with Second Merger Sub surviving the Second Merger as a wholly owned subsidiary of Jet.AI. The terms of the Business Combination Agreement,
which contain customary representations and warranties, covenants, closing conditions, termination provisions and other terms relating
to the Business Combination, are summarized below.
The
First Merger and Second Merger will be consummated by the filing of certificates of merger with the Secretary of State of the State of
Delaware and will be effective immediately upon such filings or upon such later time as may be agreed by the parties and specified in
such certificates of merger. The parties will hold the Closing immediately prior to such filing of the certificate of merger with respect
to the First Merger on the Closing Date, which date will occur as promptly as practicable, but in no event later than three business
days, following the satisfaction or waiver of the conditions set forth in the Business Combination Agreement (other than those conditions
that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at such time),
or on such other date, time or place as Oxbridge and Jet Token may mutually agree.
The
aggregate Per Share Merger Consideration will equal $105 million, consisting of (i) aggregate Per Share Stock Merger Consideration equal
to $45 million less Jet Token’s Net Indebtedness as of the Closing Date multiplied by 0.428571, as determined using a $10.00 per
share value, and (ii) aggregate Per Share Warrant Merger Consideration equal to $60 million less Jet Token’s Net Indebtedness as
of the Closing Date multiplied by 0.571429, as determined using the Black-Scholes method with the following inputs: (a) risk-free rate
equal to the UST 10-year rate on the second Business Day immediately before the Closing Date as published on https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2023
(or if unavailable, as published by Bloomberg L.P.); (b) current stock price of $10.00; (c) exercise price of $15.00; (d) dividend yield
of 0.00%; (e) term of 10 years; and (f) stock price annualized standard deviation (volatility) equal to the average of the most recent
twenty (20) trading days of daily volatility of Wheels Up Experience Inc. through the second Business Day immediately before the Closing
Date, as determined using the volatility calculator available at https://www.fintools.com/resources/online-calculators/volatilitycalc/
(or if such calculator is unavailable, using a volatility calculator from Bloomberg L.P.); provided, however that if Wheels Up Experience
Inc. (NYSE:UP) is acquired or has a material transaction or event materially affecting its volatility during such 20-day period, then
volatility shall be determined using the average of the most recent 20 days of daily volatility preceding such transaction or event.
The
Business Combination Agreement does not include an adjustment mechanism for the Per Share Stock Merger Consideration or Merger Consideration
Warrants that Jet Token’s stockholders will be entitled to receive based on changes in the trading market price of Oxbridge’s
Ordinary Shares, or other securities, prior to the completion of the Domestication and Business Combination or Jet.AI’s Common
Stock, or other securities, after the completion of the Domestication and Business Combination. Accordingly, the market value of each
share of the Per Share Stock Merger Consideration and each Merger Consideration Warrant issued pursuant to the Business Combination Agreement
could vary significantly from the market price of Oxbridge’s Ordinary Shares, warrants and other securities on the date of this
proxy statement/prospectus, the Closing Date of the Business Combination or the date Jet.AI’s common stock, warrants and other
securities begin trading on the Nasdaq.
Conversion
of Securities
Immediately
prior to the Effective Time and subject to receipt of the requisite approval of Jet Token’s Stockholders, Jet Token will cause
each share of Jet Token Preferred Stock that is issued and outstanding immediately prior to the Effective Time to be automatically converted
into shares of Jet Token Voting Common Stock at the then-effective conversion rate in accordance with the terms of the Jet Token Charter.
Following the Conversion, there will be no outstanding shares of Jet Token Preferred Stock and each holder of Jet Token Preferred Stock
will thereafter cease to have any rights with respect to such securities.
At
the Effective Time, by virtue of the Business Combination and without any action on the part of Oxbridge, First Merger Sub, Second Merger
Sub, Jet Token or the holders of any of Jet Token’s securities:
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each
outstanding share of Jet Token Common Stock, including each share of Jet Token Preferred Stock that will be converted into shares
of Jet Token Common Stock immediately prior to the Effective Time, will be cancelled and automatically converted into the right to
receive (x) the number of shares of Jet.AI Common Stock equal to the Stock Exchange Ratio (the “Per Share Stock Merger
Consideration”), and (y) the number of Merger Consideration Warrants equal to the Warrant Exchange Ratio (the “Per Share
Warrant Merger Consideration” and together with the Per Share Stock Merger Consideration, the “Per Share Merger Consideration”).
Each Merger Consideration Warrant is exercisable during the ten (10) year period following the Effective Time at an exercise price
of $15.00 per share, and subject to the terms and conditions of a Merger Consideration Warrant Agreement in a form mutually agreed-to
by Jet Token and Oxbridge; |
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each Jet Token Option,
whether or not exercisable and whether or not vested, that is outstanding immediately prior to the Effective Time will automatically
be converted into an option to purchase a number of Jet.AI Options based on the Option Exchange Ratio; |
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each
Jet Token Warrant issued and outstanding immediately prior to the Effective Time shall be automatically converted into a warrant
to acquire (x) a number of shares of Jet.AI Common Stock equal to the Stock Exchange Ratio and (y) a number of Merger Consideration
Warrants equal to the Warrant Exchange Ratio; |
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each Jet Token RSU Award
that is outstanding immediately prior to the Effective Time will be converted into a Jet.AI RSU Award with respect to a number of
RSUs based on the applicable exchange ratio; |
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all shares of Jet Token
Common Stock and Jet Token Preferred Stock held in the treasury of Jet Token will be cancelled without any conversion thereof and
no payment or distribution will be made with respect thereto; and |
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each share of First Merger
Sub Common Stock issued and outstanding immediately prior to the Effective Time will be converted into and exchanged for one validly
issued, fully paid and nonassessable share of common stock, par value $0.001 per share, of the surviving entity of the First Merger. |
Representations,
Warranties and Covenants
The
Business Combination Agreement contains customary representations, warranties and covenants of Oxbridge, Merger Sub and Jet Token relating
to, among other things, their ability to enter into the Business Combination Agreement and their respective outstanding capitalization.
These representations and warranties are subject to materiality, knowledge and other similar qualifications in many respects and will
not survive the Closing. These representations and warranties have been made solely for the benefit of the other parties to the Business
Combination Agreement and should not be relied on by you as characterizations of the actual state of facts about the respective parties.
The
Business Combination Agreement contains representations and warranties made by Jet Token to Oxbridge, First Merger Sub and Second Merger
Sub relating to a number of matters, including the following:
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organization
and qualification to do business; |
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subsidiaries; |
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certificate of incorporation
and bylaws; |
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capitalization; |
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authority to enter
into the Business Combination Agreement; |
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absence of conflicts with
organizational documents, applicable laws or certain other agreements and required filings and consents; |
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permits and compliance; |
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financial statements; |
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absence of certain changes
or events since December 31, 2022; |
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absence of litigation; |
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employee benefit plans; |
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labor and employment matters; |
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real property and title
to assets; |
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intellectual property; |
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taxes; |
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environmental matters; |
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material contracts; |
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customers,
vendors and suppliers; |
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insurance; |
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approval of the board and
stockholders; |
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certain business practices; |
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interested party transactions
and side letter agreements; |
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inapplicability of the
Exchange Act; |
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brokers; and |
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exclusivity of the representations
and warranties made by Jet Token. |
The
Business Combination Agreement contains representations and warranties made by Oxbridge, First Merger Sub and Second Merger Sub to Jet
Token relating to a number of matters, including the following:
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corporate organization; |
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organizational documents; |
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capitalization; |
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authority to enter into
the Business Combination Agreement; |
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absence of conflicts with
organizational documents, applicable laws or certain other agreements and required filings and consents; |
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compliance; |
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proper filing of documents
with the SEC, financial statements and compliance with the Sarbanes-Oxley Act; |
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business activities and
absence of certain changes or events since August 11, 2021; |
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absence of litigation; |
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approval of the board and
the shareholders; |
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no prior operations of
First Merger Sub and Second Merger Sub; |
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brokers; |
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the Trust Account; |
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employees; |
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taxes; |
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the listing of Class A
Ordinary Shares, Oxbridge Warrants and Oxbridge Units; |
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insurance; |
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intellectual property; |
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agreements, contracts and
commitments; |
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title to property; |
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inapplicability of the
Investment Company Act of 1940, as amended (the “Investment Company Act”); and |
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investigation and reliance. |
No
Survival
The
representations, warranties, covenants, obligations any other agreements of Jet Token, Oxbridge, First Merger Sub and Second Merger Sub
contained in the Business Combination Agreement or any certificate or instrument delivered pursuant to the Business Combination Agreement
will terminate at the Effective Time, and only the covenants and agreements that by their terms survive the Effective Time and certain
miscellaneous provisions of the Business Combination Agreement will survive the Effective Time.
Closing
The
Closing will occur as promptly as practicable, but in no event later than three business days following the satisfaction or waiver of
all of the conditions to Closing (other than those conditions that by their nature are to be satisfied at the Closing, but are subject
to the satisfaction or waiver of those conditions at such time).
Conduct
of Business Pending the Business Combination
Pursuant
to the Business Combination Agreement, Jet Token agreed that, between the date of the Business Combination Agreement and the Effective
Time or the earlier termination of the Business Combination Agreement, except as (a) expressly contemplated by the Business Combination
Agreement or any ancillary agreement thereto, (b) set forth in Jet Token’s Schedules, and (c) required by applicable law, unless
Oxbridge shall otherwise consent in writing (which consent may not be unreasonably withheld, conditioned or delayed), it will:
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conduct its
business, and cause its subsidiaries to conduct their respective businesses, in the ordinary course of business and in a manner consistent
with past practice; and |
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in all material respects,
use its reasonable best efforts to preserve substantially intact the business organization of Jet Token and its subsidiaries, to
keep available the services of the current officers, key employees and consultants of Jet Token and its subsidiaries and to preserve
the current relationships of Jet Token and its subsidiaries with customers, suppliers and other persons with which Jet Token or any
of its subsidiaries has significant business relations. |
In
addition to the general covenants above, Jet Token agreed that prior to the Effective Time, except as (a) expressly contemplated by the
Business Combination Agreement or any ancillary agreement, (b) set forth in Jet Token’s Schedules or (c) as required by applicable
law, it will not, and will cause its subsidiaries not to, without the prior written consent of Oxbridge (which consent may not be unreasonably
withheld, conditioned or delayed):
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amend or otherwise
change its certificate of incorporation or bylaws or equivalent organizational documents; |
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issue, sell,
pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (a) any shares
of any class of capital stock of Jet Token or any subsidiary of Jet Token, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including any phantom interest),
of Jet Token or any subsidiary of Jet Token; or (b) any material assets of Jet Token or any subsidiary of Jet Token; |
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declare, set aside, make
or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock,
except for dividends or distributions made by one of Jet Token’s subsidiaries to Jet Token or one of its other subsidiaries; |
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reclassify, combine, split,
subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock, other than redemptions of
equity securities from former employees upon the terms set forth in the underlying agreements governing such equity securities; |
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(a) acquire (including
by merger, consolidation, or acquisition of stock or substantially all of the assets or any other business combination) any corporation,
partnership, other business organization or any division thereof; or (b) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person, or make any loans
or advances, or intentionally grant any security interest in any of its assets, except for (i) advances, loans or other incurrence
of indebtedness of any kind under any credit facilities or other debt instrument (including under any applicable credit line) of
Jet Token or its subsidiaries not to exceed $500,000 and (ii) any such indebtedness among Jet Token and its subsidiaries or among
Jet Token’s subsidiaries; |
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other than in the ordinary
course of business (a) grant any material increase in the compensation, incentives or benefits payable or to become payable to any
current or former director or executive officer, (b) enter into any new, or materially amend any existing, employment, retention,
bonus, change in control, severance or termination agreement with any current or former director or executive officer, or (c) accelerate
or commit to accelerate the funding, payment, or vesting of any compensation or benefits to any current or former director or executive
officer; |
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adopt, materially amend
and/or terminate any material employee benefit plan except as may be required by applicable law, is necessary in order to consummate
the Business Combination or health and welfare plan renewals in the ordinary course of business; |
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materially amend Jet Token’s
accounting policies or procedures other than reasonable and usual amendments in the ordinary course of business or as required by
U.S. GAAP; |
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(a) amend any material
tax return; (b) change any material method of tax accounting; (c) make, change or rescind any material election related to taxes;
or (d) settle or compromise any material U.S. federal, state, local or non-U.S. tax audit, assessment, tax claim or other controversy
relating to taxes; |
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(a) materially amend, or
modify or consent to the termination (excluding any expiration in accordance with its terms) of any material contract or amend, waive,
modify or consent to the termination (excluding any expiration in accordance with its terms) of Jet Token’s or any of its subsidiary’s
material rights thereunder, in each case in a manner that is adverse to Jet Token or any subsidiary, taken as a whole, except in
the ordinary course of business or (b) enter into any contract or agreement that would have been a material contract had it been
entered into prior to the date of the Business Combination Agreement, other than (x) in the ordinary course of business consistent
with past practice or (y) solely among Jet Token and its subsidiaries or among its subsidiaries; |
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fail to maintain
the existence of, or use reasonable efforts to protect Jet Token-owned intellectual property; |
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other than in the ordinary
course of business, enter into any contract, agreement or arrangement that obligates Jet Token or any of its subsidiaries to develop
any intellectual property related to the business of Jet Token or the products that would be owned by the counterparty to such contract,
agreement or arrangement; |
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intentionally permit any
material item of Jet Token-owned intellectual property to lapse or to be abandoned, invalidated, dedicated to the public, or disclaimed,
or otherwise become unenforceable or fail to perform or make any applicable filings, recordings or other similar actions or filings,
or fail to pay all required fees and taxes required or advisable to maintain and protect its interest in each and every material
item of Jet Token-owned intellectual property; |
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waive, release, assign,
settle or compromise any litigation, suit, claim, charge, grievance, action, proceeding, audit or investigation, other than waivers,
releases, assignments, settlements or compromises that are solely monetary in nature and do not exceed $100,000 individually or $500,000
in the aggregate; |
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enter into any material
new line of business outside of the business conducted by Jet Token or its subsidiaries as of the date of the Business Combination
Agreement; |
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voluntarily fail to maintain,
cancel or materially change coverage under any insurance policy in form and amount equivalent in all material respects to the insurance
coverage currently maintained with respect to Jet Token and any of its subsidiaries and their assets and properties; |
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fail to keep current and
in full force and effect, or to comply in all material respects with the requirements of, any permit Jet Token held as of the date
of the Business Combination Agreement that is material to the conduct of the business of Jet Token and its subsidiaries taken as
a whole; or |
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enter into any formal or
informal agreement or otherwise make a binding commitment to do any of the foregoing. |
Pursuant
to the Business Combination Agreement, Oxbridge agreed that, except as expressly contemplated by the Business Combination Agreement or
any ancillary agreement and except as required by applicable law or in connection with the Domestication, between the date of the Business
Combination Agreement and the Effective Time or the earlier termination of the Business Combination Agreement, unless Jet Token otherwise
consents in writing (which consent may not be unreasonably withheld, conditioned or delayed), Oxbridge will, and will cause First Merger
Sub and Second Merger Sub to, conduct their respective businesses in the ordinary course of business and in a manner consistent with
past practice. In addition, Oxbridge, First Merger Sub and Second Merger Sub have agreed that between the date of the Business Combination
Agreement and the Effective Time or the earlier termination of the Business Combination Agreement, subject to specified exceptions, they
will not, without the prior written consent of Jet Token (which may not be unreasonably withheld, conditioned or delayed):
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amend or otherwise
change the Existing Organizational Documents, the organizational documents of First Merger Sub or the organizational documents of
Second Merger Sub or form any subsidiary of Oxbridge other than First Merger Sub and Second Merger Sub; |
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declare, set aside, make
or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock,
other than redemptions from the Trust Account that are required pursuant to the Existing Organizational Documents; |
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reclassify, combine, split,
subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Ordinary Shares or Oxbridge Warrants except
for redemptions from the Trust Account and conversions of the Class B Ordinary Shares that are required pursuant to the Existing
Organizational Documents; |
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issue, sell,
pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any shares
of any class of capital stock or other securities of Oxbridge, First Merger Sub or Second Merger Sub, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without
limitation, any phantom interest), of Oxbridge, First Merger Sub or Second Merger Sub, except in connection with the conversion of
the Class B Ordinary Shares pursuant to the Existing Organizational Documents; |
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(a) acquire (including,
without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation,
partnership, other business organization or otherwise acquire any securities or material assets from any third party; or (b) enter
into any strategic joint ventures, partnerships or alliances with any other person or make any loan or advance or investment in any
third party or initiate the start-up of any new business, non-wholly owned subsidiary or joint venture; |
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incur any indebtedness
for borrowed money or guarantee any such indebtedness of another person or persons, issue or sell any debt securities or options,
warrants, calls or other rights to acquire any debt securities of Oxbridge, as applicable, enter into any “keep well”
or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any
of the foregoing, in each case, except a working capital loan from the Sponsor or an affiliate thereof or certain of Oxbridge’s
officers and directors to finance Oxbridge’s transaction costs in connection with the transactions contemplated by the Business
Combination Agreement; |
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make any change in any
method of financial accounting or financial accounting principles, policies, procedures or practices, except as required by a concurrent
amendment in U.S. GAAP or applicable law made subsequent to the date of the Business Combination Agreement, as agreed to by its independent
accountants; |
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amend any material tax
return; |
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change any material method
of tax accounting; |
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make, change or rescind
any material election related to taxes; |
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settle or compromise any
material U.S. federal, state, local or non-U.S. tax audit, assessment, tax claim or other controversy relating to taxes; |
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liquidate, dissolve, reorganize
or otherwise wind up the business and operations of Oxbridge, First Merger Sub or Second Merger Sub; |
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enter into, amend, or terminate
(other than terminations in accordance with their terms) any contract with any director, officer or affiliate of Oxbridge, First
Merger Sub or Second Merger Sub, or waive any material right in connection therewith (other than working capital loans made by Sponsor
in accordance with the Business Combination Agreement); |
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hire any employee or adopt
or enter into any employee benefit plan; |
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amend the Trust Agreement
or any other agreement related to the Trust Account; or |
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enter into any formal or
informal agreement or otherwise make a binding commitment to do any of the foregoing. |
Additional
Agreements
Registration
Statement; Proxy Statement
As
promptly as practicable after the execution of the Business Combination Agreement, Oxbridge agreed to prepare and file with the SEC this
Registration Statement in connection with providing Oxbridge’s shareholders with the opportunity to exercise their redemption rights
and the registration under the Securities Act of the shares of Jet.AI Common Stock to be issued or issuable (i) in the Domestication
and (ii) to the stockholders of Jet Token pursuant to the Business Combination Agreement, including the shares of Jet.AI Common Stock
issuable upon exercise of the Jet.AI Warrants in accordance with their terms, which Registration Statement includes a proxy statement
in preliminary form relating to the extraordinary general meeting (including any adjournment thereof) to be held to consider the Proposals.
Consent
Solicitation; Written Consent
As
promptly as practicable following the date upon which this Registration Statement becomes effective, Jet Token agreed to solicit the
Requisite Jet Token Stockholder Approval via written consent in accordance with Section 228 of the DGCL. In connection therewith, the
Jet Token Board will set a record date for determining the stockholders of Jet Token entitled to provide such written consent and Jet
Token will prepare an information statement (the “Information Statement”), which Information Statement shall include a description
of the appraisal rights of the shareholders of Jet Token available under Section 262 of the DGCL, along with such other information as
is required thereunder and pursuant to applicable law.
Notwithstanding
(a) the making of any inquiry or proposal with respect to an Alternative Transaction (as defined below) or (b) anything to the contrary
contained in the Business Combination Agreement, unless the Business Combination Agreement has been earlier validly terminated, (i) in
no event will Jet Token or any of Jet Token’s subsidiaries execute or enter into any agreement in principle, confidentiality agreement,
letter of intent, memorandum of understanding, term sheet, acquisition agreement, merger agreement, option agreement, joint venture agreement,
partnership agreement or other written arrangement relating to any Alternative Transaction or terminate the Business Combination Agreement
in connection therewith and (ii) Jet Token will otherwise remain subject to the terms of the Business Combination Agreement, including
Jet Token’s obligation to use reasonable best efforts to cause each Key Jet Token Stakeholder to duly execute and deliver the Written
Consent and to otherwise solicit the Requisite Jet Token Stockholder Approval.
Oxbridge’s
Extraordinary General Meeting
Oxbridge
agreed to call and hold the extraordinary general meeting as promptly as practicable after the date on which this Registration Statement
becomes effective for the purpose of voting solely upon the Proposals, and to use its reasonable best efforts to hold the extraordinary
general meeting as soon as practicable after the date on which this Registration Statement becomes effective (after, in each case, taking
into account a reasonable period of time as Oxbridge deems necessary to solicit proxies); provided, that Oxbridge may (or, upon the receipt
of a request to do so from Jet Token, will) postpone or adjourn the extraordinary general meeting on one or more occasions for up to
30 days in the aggregate upon the good faith determination by the Oxbridge Board that such adjournment is necessary to solicit additional
proxies to obtain approval of the Proposals or otherwise take actions consistent with Oxbridge’s obligations. Oxbridge has agreed
to use its reasonable best efforts to obtain the approval of the Proposals at the extraordinary general meeting, including by soliciting
from its shareholders proxies as promptly as possible in favor of the Proposals, and to take all other action necessary or advisable
to secure the required vote or consent of its shareholders. Oxbridge agreed, through the Oxbridge Board, to recommend to its shareholders
that they approve the Proposals and to include the recommendation of the Oxbridge Board in this proxy statement/prospectus.
Notwithstanding
(a) the making of any inquiry or proposal with respect to an Alternative Transaction or (b) anything to the contrary contained in the
Business Combination Agreement, unless the Business Combination Agreement has been earlier validly terminated, (i) in no event will Oxbridge,
First Merger Sub or Second Merger Sub execute or enter into any agreement in principle, confidentiality agreement, letter of intent,
memorandum of understanding, term sheet, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership
agreement or other written arrangement relating to any Alternative Transaction or terminate the Business Combination Agreement in connection
therewith and (ii) Oxbridge, First Merger Sub and Second Merger Sub will otherwise remain subject to the terms of the Business Combination
Agreement, including Oxbridge’s obligation to use reasonable best efforts to obtain the approval of the Proposals at the extraordinary
general meeting.
Exclusivity
From
the date of the Business Combination Agreement and ending on the earlier of (a) the Closing and (b) the valid termination of the Business
Combination Agreement, none of Jet Token, Oxbridge, First Merger Sub or Second Merger Sub will, and Jet Token, Oxbridge, First Merger
Sub and Second Merger Sub will cause their respective subsidiaries and its and their respective representatives not to, directly or indirectly,
(i) enter into, solicit, initiate, knowingly facilitate, or continue any discussions or negotiations with, or participate in any negotiations
with, or provide any information to, or otherwise cooperate in any way with, any person or other entity or “group” within
the meaning of Section 13(d) of the Exchange Act, concerning any merger, consolidation, or acquisition of stock or assets or any other
business combination involving Oxbridge or Jet Token, as the case may be, and any other corporation, partnership or other business organization
other than Jet Token and its subsidiaries or Oxbridge, as the case may be (an “Alternative Transaction”), (ii) in the case
of Jet Token, amend or grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities
of Jet Token or any of its subsidiaries, (iii) approve, endorse or recommend, or propose publicly to approve, endorse or recommend, any
Alternative Transaction, (iv) approve, endorse, recommend, execute or enter into any agreement in principle, confidentiality agreement,
letter of intent, memorandum of understanding, term sheet, acquisition agreement, merger agreement, option agreement, joint venture agreement,
partnership agreement or other written arrangement relating to any Alternative Transaction or any proposal or offer that could reasonably
be expected to lead to Alternative Transaction, (v) commence, continue or renew any due diligence investigation regarding any Alternative
Transaction or (vi) resolve or agree to do any of the foregoing or otherwise authorize or permit any of their respective representatives
to take any such action. Each of Jet Token, on the one hand, and Oxbridge, First Merger Sub and Second Merger Sub, on the other hand,
agreed to, and to direct their respective affiliates and representatives acting on their behalf to, immediately cease any and all existing
discussions or negotiations with any person conducted prior to the execution of the Business Combination Agreement with respect to any
Alternative Transaction. Any violation of the foregoing restrictions by Oxbridge, First Merger Sub, Second Merger Sub or their respective
affiliates or representatives will be deemed to be a breach under the Business Combination Agreement.
From
the date of the Business Combination Agreement and ending on the earlier of (a) the Closing and (b) the valid termination of the Business
Combination Agreement, each of Jet Token and Oxbridge agreed to notify the other party promptly after receipt of any (i) inquiry or proposal
with respect to an Alternative Transaction, (ii) inquiry that would reasonably be expected to lead to an Alternative Transaction or (iii)
request for non-public information relating to the party or any of its subsidiaries, or for access to the business, properties, assets,
personnel, books or records of Jet Token or any of its subsidiaries by any third party, in each case that is related to an inquiry or
proposal with respect to an Alternative Transaction.
If
either party receives any inquiry or proposal as described above, then that party has agreed to promptly notify such inquirer in writing
that the party receiving the inquiry is subject to an exclusivity agreement with respect to the Alternative Transaction that prohibits
them from considering such inquiry or proposal.
Stock
Exchange Listing
Oxbridge
will use its reasonable best efforts to cause the Jet.AI Common Stock to be issued in connection with the Business Combination
(including the shares of Jet.AI Common Stock to be issued in connection with the Domestication), the Merger Consideration Warrants
and the Jet.AI Warrants to be approved for listing on Nasdaq at the Closing. Until the Closing, Oxbridge will use its reasonable best
efforts to keep the Oxbridge Units, Class A Ordinary Shares and Oxbridge Warrants listed for trading on Nasdaq.
Payment
of Transaction Costs
All
expenses incurred in connection with the Business Combination Agreement and the Business Combination will be paid by the party incurring
such expenses, whether or not the Business Combination is consummated; provided that if Closing does occur, Oxbridge will pay or cause
to be paid as soon as reasonably practicable upon consummation of the First Merger and release of proceeds from the Trust Account any
expenses of First Merger Sub and Second Merger Sub incurred in connection with the Business Combination Agreement and the Business Combination.
Other
Covenants and Agreements
The
Business Combination Agreement contains other covenants and agreements, including covenants related to:
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Jet Token and
Oxbridge providing access to books and records and furnishing relevant information to the other party, subject to certain limitations
and confidentiality provisions; |
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director and officer indemnification; |
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prompt notification of
certain matters; |
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Jet Token, Oxbridge, First
Merger Sub and Second Merger Sub using reasonable best efforts to consummate the Business Combination; |
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public announcements relating
to the Business Combination; |
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the intended tax treatment
of the Business Combination; |
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cooperation regarding any
filings required under the HSR Act; |
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Oxbridge making disbursements
from the Trust Account; |
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Oxbridge taking all necessary
action so that immediately after the Effective Time the Oxbridge Board will be comprised of the individuals set forth in the Director
Election Proposal; |
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Oxbridge keeping current
and timely filing all reports required to be filed or furnished with the SEC and otherwise complying in all material respects with
its reporting obligations under applicable securities law; |
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Jet Token using reasonable
best efforts to terminate or amend certain agreements with its stockholders; |
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Jet Token using reasonable
best efforts to deliver the Jet Token Audited Financial Statements; |
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Oxbridge’s adoption
of new bylaws in connection with the Domestication; and |
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Oxbridge’s adoption
of the Omnibus Incentive Plan. |
Conditions
to Closing of the Business Combination Agreement
Mutual
Conditions
The
obligations of Jet Token, Oxbridge, First Merger Sub and Second Merger Sub to consummate the Business Combination are subject to the
satisfaction or waiver (where permissible) at or prior to the Effective Time of the following conditions, among others:
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the Written
Consent having been delivered to Oxbridge; |
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the Condition Precedent
Proposals having each been approved and adopted by the requisite affirmative vote of Oxbridge shareholders at the extraordinary general
meeting in accordance with this proxy statement/prospectus, the DGCL, Cayman Islands law, Oxbridge’s Existing Organizational
Documents and the rules and regulations of Nasdaq; |
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no governmental authority
having enacted, issued, promulgated, enforced or entered any law, rule, regulation, judgment, decree, executive order or award which
is then in effect and has the effect of making the transactions contemplated by the Business Combination Agreement illegal or otherwise
prohibiting the consummation of the Business Combination and such transactions; |
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all required filings under
the HSR Act having been completed and any applicable waiting period (and any extension thereof) applicable to the consummation of
the Business Combination under the HSR Act having expired or been terminated; |
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the Registration Statement
having been declared effective and no stop order suspending the effectiveness of the Registration Statement being in effect, and
no proceedings for purposes of suspending the effectiveness of the Registration Statement having been initiated or threatened by
the SEC; |
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the
shares of Jet.AI Common Stock to be issued pursuant to the Business Combination Agreement and in connection with the Domestication
having been listed on Nasdaq, or another national securities exchange mutually agreed to by the parties, as of the Closing Date; |
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Oxbridge having at least
$5,000,001 of net tangible assets after giving effect to the redemption of public shares by Oxbridge’s public shareholders,
in accordance with Oxbridge’s organizational documents; and |
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The period for exercising
appraisal rights pursuant to Section 262 of the DGCL having lapsed and the holders of not more than one percent (1%) of the issued
and outstanding shares of Jet Token Common Stock (including shares of Jet Token Common Stock issuable upon conversion of Jet Token
Preferred Stock) shall have demanded properly in writing appraisal or dissenters’ rights for such Jet Token Common Stock in
accordance with Section 262 of the DGCL. |
Oxbridge,
First Merger Sub and Second Merger Sub Conditions
The
obligations of Oxbridge, First Merger Sub and Second Merger Sub to consummate the Business Combination are subject to the satisfaction
or waiver (where permissible) at or prior to the Effective Time of the following additional conditions:
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the accuracy
of the representations and warranties of Jet Token as determined in accordance with the Business Combination Agreement; |
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Jet Token having
performed or complied in all material respects with all agreements and covenants required by the Business Combination Agreement to
be performed or complied with by it on or prior to the Effective Time; |
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Jet Token having delivered
to Oxbridge a customary officer’s certificate, dated as of the Closing, certifying as to the satisfaction of certain conditions
specified in the Business Combination Agreement; |
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no Jet Token Material Adverse
Effect having occurred between the date of the Business Combination Agreement and the Effective Time; and |
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other than those persons
identified in the Business Combination Agreement as continuing directors, all members of the Jet Token Board and the boards of directors
of its subsidiaries shall have executed written resignations effective as of the Effective Time. |
Some
of the conditions to Oxbridge’s obligations are qualified by the concept of a “Jet Token Material Adverse Effect.”
Under the terms of the Business Combination Agreement, a “Jet Token Material Adverse Effect” means any event, circumstance,
change or effect (collectively “Effect”) that, individually or in the aggregate with all other Effects, (a) is or would be
reasonably expected to materially adverse to the business, condition (financial or otherwise), assets, liabilities or operations of Jet
Token and its subsidiaries taken as a whole or (b) would prevent, materially delay or materially impede the performance by Jet Token
of its obligations under the Business Combination Agreement or the consummation of the Business Combination; provided, however, that
none of the following will be deemed to constitute, alone or in combination, or be taken into account in the determination of whether,
there has been or will be a Jet Token Material Adverse Effect: (i) any change or proposed change in or change in the interpretation of
any law or U.S. GAAP; (ii) events or conditions generally affecting the industries or geographic areas in which Jet Token and its subsidiaries
operate; (iii) any downturn in general economic conditions, including changes in the credit, debt, securities, financial or capital markets
(including changes in interest or exchange rates, prices of any security or market index or commodity or any disruption of such markets);
(iv) any geopolitical or social conditions, outbreak of hostilities, acts of war, sabotage, cyberterrorism, terrorism, military actions,
earthquakes, volcanic activity, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions,
epidemics, pandemics (including the COVID-19 virus or any mutation thereof, and including the impact of such pandemics on the health
of any officer, employee or consultant of Jet Token or its subsidiaries), social unrest (including protests, demonstrations, riots, arson,
conflagration, looting, boycotts) and other force majeure events (including any escalation or general worsening thereof); (v) any actions
taken or not taken by Jet Token or its subsidiaries as required by the Business Combination Agreement or any ancillary agreement, (vi)
any Effect attributable to the announcement or execution, pendency, negotiation or consummation of the Business Combination (including
the impact thereof on relationships with customers, suppliers, employees or governmental authorities) (provided that this clause (vi)
will not apply to any representations or warranty to the extent the purpose of such representation or warranty is to address the consequences
resulting from the Business Combination Agreement or the consummation of the transactions contemplated thereby), (vii) any failure to
meet any internal or external projections, forecasts, guidance, estimates, milestones, budgets or financial or operating predictions
of revenue, earnings, cash flow or cash position, provided that this clause (vii) will not prevent a determination that any Effect underlying
such failure has resulted in a Jet Token Material Adverse Effect, or (viii) any actions taken, or failures to take action, or such other
changes or events, in each case, which Oxbridge has requested or to which it has consented or which actions are contemplated by the Business
Combination Agreement, except in the cases of clauses (i) through (iv), to the extent that Jet Token and its subsidiaries, taken as a
whole, are materially disproportionately affected thereby as compared with other participants in the industries in which Jet Token and
its subsidiaries operate.
Jet
Token Conditions
The
obligations of Jet Token to consummate the Business Combination are subject to the satisfaction or waiver (where permissible) at or prior
to Effective Time of the following additional conditions:
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the accuracy
of the representations and warranties of Oxbridge, First Merger Sub and Second Merger Sub as determined in accordance with the Business
Combination Agreement; |
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each of Oxbridge, First
Merger Sub and Second Merger Sub having performed or complied in all material respects with all agreements and covenants required
by the Business Combination Agreement to be performed or complied with by them on or prior to the Effective Time; |
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Oxbridge having delivered
to Jet Token a certificate, dated the date of the Closing, signed by the President of Oxbridge, certifying as to the satisfaction
of certain conditions specified in the Business Combination Agreement; |
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no Oxbridge Material Adverse
Effect having occurred between the date of the Business Combination Agreement and the Effective Time; |
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other than those persons
identified in the Business Combination Agreement as continuing directors, all members of the Oxbridge Board shall have executed written
resignations effective as of the Effective Time; |
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as
of the Closing, after distribution of the funds in the Trust Account and deducting all amounts to be paid pursuant to the exercise
of redemption rights of public shareholders and expenses paid or required to be paid in connection with the Business Combination
(including underwriting commissions), taking into account any liabilities that have accrued prior to the Closing but for which payment
will be due, or deferred until, after the Closing, Jet.AI having cash on hand equal to or in excess of $5,000,000; and |
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the Domestication having
been completed. |
Some
of the conditions to Jet Token’s obligations are qualified by the concept of a “Oxbridge Material Adverse Effect.”
Under the terms of the Business Combination Agreement, a “Oxbridge Material Adverse Effect” means any Effect that, individually
or in the aggregate with all other Effects, (a) is or is reasonably expected to be materially adverse to the business, condition (financial
or otherwise), assets, liabilities or operations of Oxbridge, or (b) would prevent, materially delay or materially impede the performance
by Oxbridge, First Merger Sub or Second Merger Sub of their respective obligations under the Business Combination Agreement or the consummation
of the Business Combination; provided, however, that none of the following will be deemed to constitute, alone or in combination, or
be taken into account in the determination of whether, there has been or will be a Oxbridge Material Adverse Effect: (i) any change or
proposed change in or change in the interpretation of any law or U.S. GAAP; (ii) events or conditions generally affecting the industries
or geographic areas in which Oxbridge operates; (iii) any downturn in general economic conditions, including changes in the credit, debt,
securities, financial or capital markets (including changes in interest or exchange rates, prices of any security or market index or
commodity or any disruption of such markets); (iv) any geopolitical or social conditions, outbreak of hostilities, acts of war, sabotage,
cyberterrorism, terrorism, military actions, earthquakes, volcanic activity, hurricanes, tsunamis, tornadoes, floods, mudslides, wild
fires or other natural disasters, weather conditions, epidemics, pandemics (including the COVID-19 virus or any mutation thereof, and
including the impact of such pandemics on the health of any officer, employee or consultant of Oxbridge), social unrest (including protests,
demonstrations, riots, arson, conflagration, looting, boycotts) and other force majeure events (including any escalation or general worsening
thereof); (v) any actions taken or not taken by Oxbridge as required by the Business Combination Agreement or any ancillary agreement,
(vi) any Effect attributable to the announcement or execution, pendency, negotiation or consummation of the Business Combination (provided
that this clause (vi) will not apply to any representation or warranty to the extent the purpose of such representation or warrant is
to address the consequences resulting from the Business Combination Agreement or the Business Combination), or (vii) any actions taken,
or failures to take action, or such other changed or events, in each case, which Jet Token has requested or to which it has consented
or which actions are contemplated by the Business Combination Agreement, except in the cases of clauses (i) through (iv), to the extent
that Oxbridge is materially disproportionately affected thereby as compared with other participants in the industry in which Oxbridge
operates.
Termination
The
Business Combination Agreement may be terminated and the Business Combination may be abandoned at any time prior to the Effective Time,
notwithstanding any requisite approval and adoption of the Business Combination Agreement and the transactions contemplated thereby by
the shareholders of Jet Token or Oxbridge, as follows:
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by mutual written
consent of Oxbridge and Jet Token; |
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by either Oxbridge or Jet
Token if the Effective Time shall not have occurred prior to July 1, 2023 (as such date may be extended pursuant to the terms of
the Business Combination Agreement, the “Outside Date”); provided, however, that the Business Combination Agreement may
not be terminated by or on behalf of any party that either directly or indirectly through its affiliates is in breach or violation
of any representation, warranty, covenant, agreement or obligation contained therein and such breach or violation is the principal
cause of the failure of a condition to the Business Combination on or prior to the Outside Date; |
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by either Oxbridge or Jet
Token if any governmental authority in the United States shall have enacted, issued, promulgated, enforced or entered any injunction,
order, decree or ruling (whether temporary, preliminary or permanent) which has become final and nonappealable and has the effect
of making consummation of the Business Combination illegal or otherwise preventing or prohibiting consummation of the Business Combination; |
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by either Oxbridge or Jet
Token if any of the Condition Precedent Proposals fails to receive the requisite vote for approval at the extraordinary general meeting
(subject to any adjournment or recess of such meeting; |
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by Oxbridge, in the event
of a Written Consent Failure; |
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by Oxbridge upon a breach
of any representation, warranty, covenant or agreement on the part of Jet Token set forth in the Business Combination Agreement,
or if any representation or warranty of Jet Token shall have become untrue, in either case such that certain conditions set forth
in the Business Combination Agreement would not be satisfied (a “Terminating Jet Token Breach”); provided, that Oxbridge
has not waived such Terminating Jet Token Breach and Oxbridge, First Merger Sub and Second Merger Sub are not then in material breach
of their representations, warranties, covenants or agreements in the Business Combination Agreement; provided, further, that, if
such Terminating Jet Token Breach is curable by Jet Token, Oxbridge may not terminate the Business Combination Agreement for so long
as Jet Token continues to exercise its reasonable efforts to cure such breach, unless such breach is not cured within 30 days after
notice of such breach is provided by Oxbridge to Jet Token; or |
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by Jet Token upon a breach
of any representation, warranty, covenant or agreement on the part of Oxbridge, First Merger Sub or Second Merger Sub set forth in
the Business Combination Agreement, or if any representation or warranty of Oxbridge, First Merger Sub or Second Merger Sub shall
have become untrue, in either case such that certain conditions set forth in the Business Combination Agreement would not be satisfied
(a “Terminating Oxbridge Breach”); provided, that Jet Token has not waived such Terminating Oxbridge Breach and Jet Token
is not then in material breach of its representations, warranties, covenants or agreements in the Business Combination Agreement;
provided, further, that, if such Terminating Oxbridge Breach is curable by Oxbridge, First Merger Sub and Second Merger Sub, Jet
Token may not terminate the Business Combination Agreement for so long as Oxbridge, First Merger Sub and Second Merger Sub continue
to exercise their reasonable efforts to cure such breach, unless such breach is not cured within 30 days after notice of such breach
is provided by Jet Token to Oxbridge. |
Effect
of Termination
If
the Business Combination Agreement is terminated, the agreement will become void, and there will be no liability under the Business Combination
Agreement on the part of any party thereto, except as set forth in the Business Combination Agreement or in the case of termination subsequent
to a willful breach of the Business Combination Agreement by a party thereto.
Related
Agreements
This
section describes the material provisions of certain additional agreements entered into or to be entered into pursuant to the Business
Combination Agreement, which we refer to as the “Related Agreements,” but does not purport to describe all of the terms thereof.
The Related Agreements have been or will be filed with the SEC at a future date. Shareholders and other interested parties are urged
to read such Related Agreements in their entirety.
Lock-Up
Agreements
All
of the Founder Shares are subject to a lock-up and would be released only if specified conditions were met. In particular, subject to
certain limited exceptions, all Founder Shares would be subject to a lock-up during the period commencing from the Closing and
ending on the earliest of (A) one (1) year after the date of the Closing and (B) subsequent to the Business Combination, (x) if the closing
price of the common stock equals or exceeds $12.00 per unit (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination or
(y) the date after the Closing on which Jet.AI completes a liquidation, merger, stock exchange, or other similar transaction with an
unaffiliated third party that results in all of Jet.AI’s stockholders having the right to exchange their shares of common stock
for cash, securities, or other property.
Additionally,
the Per Share Stock Merger Consideration and the Merger Consider Warrants issued to Michael Winston and George Murnane in connection
with the Business Combination would be subject to the same lock-up restrictions as the Founder Shares.
Background
of the Business Combination
The
following is a discussion of the proposed Business Combination and the Business Combination Agreement. This is a summary only and may
not contain all of the information that is important to you. This summary is subject to, and qualified in its entirety by reference to,
the Business Combination Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A. Oxbridge shareholders
are urged to read this entire proxy statement/prospectus carefully, including the Business Combination Agreement, for a more complete
understanding of the Business Combination.
Oxbridge
is a Cayman Islands exempted company structured as a blank check company which was incorporated on April 12, 2021 for the purpose of
effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one
or more businesses. The proposed Business Combination with is the result of an active search for a potential transaction utilizing the
network and investment experience of Oxbridge’s management team, board of directors and strategic advisors. The terms of the Business
Combination Agreement and the other ancillary agreements are the result of arm’s-length negotiations between Jet Token and Oxbridge
and their respective representatives and advisors. The following is a discussion of the background of these negotiations, the Business
Combination Agreement (and certain related agreements) and the Business Combination. The following chronology summarizes the key meetings
and events that led to the signing of the Business Combination Agreement, but it does not purport to catalogue every conversation and
correspondence by and among representatives of Oxbridge, Jet Token and their respective advisors.
On
August 16, 2021 Oxbridge consummated its IPO of 11,500,000 units. Each unit consisted of one Class A ordinary share and one warrant to
purchase one Class A ordinary share. The units were sold at an offering price of $10.00 per unit, generating gross proceeds of $115,000,000.
Simultaneously with the closing of the IPO, Oxbridge consummated the sale of 5,760,000 private placement warrants at a price of $1.00
per private placement warrant in a private placement to OAC Sponsor Ltd. (“Sponsor”) and Maxim Group, LLC (“Maxim”),
generating gross proceeds of $5,760,000. Following the closing of the IPO on August 16, 2021, an amount of $116,725,000 ($10.15 per unit)
from the net proceeds of the sale of the units in the IPO and the sale of the private placement warrants was placed in the Trust Account.
Prior
to the pricing of the IPO, neither Oxbridge, nor any authorized person on its behalf, initiated any substantive discussions, formal or
otherwise, with respect to a business combination involving Jet Token. After the closing of the IPO, Oxbridge’s officers and directors
commenced an active search for prospective businesses or assets to acquire in an initial business combination. Representatives of Oxbridge
were contacted by, and representatives of Oxbridge contacted, numerous individuals, financial advisors and other entities who offered
to present ideas for business combination opportunities. Oxbridge’s officers and directors and their affiliates also brought to
Oxbridge’s attention target business candidates.
In
evaluating potential businesses or assets to acquire in an initial business combination, Oxbridge and its representatives surveyed the
landscape of potential acquisition opportunities based on their knowledge of, and familiarity, with the M&A marketplace. Initially,
Oxbridge and its affiliates focused on acquisition targets that were within the financial services industry and related sectors, including
the FinTech sector, with an enterprise value of at least $95 million. Oxbridge further looked for transactions that it believed, if entered
into, would be well received by the public markets. In particular, Oxbridge sought to identify companies that (a) have a sustainable
business model with the ability to successfully navigate the ebbs and flows of an economic downturn, and changes in the industry landscape
and regulatory environment; (b) have demonstrated differentiated competitive advantages with high barriers to entry against new competitors;
and (c) are at an inflection point and would benefit from a catalyst such as incremental capital. Oxbridge also sought to identify companies
that it believed would benefit from being a publicly-held entity, particularly with respect to access to capital for both organic growth
and use in acquisitions.
After
the IPO, Oxbridge’s directors and officers:
|
● |
Met
weekly to review referrals of potential acquisition targets and eliminated targets with obvious obstacles precluding a business combination
resulting in a list of 91 potential acquisition targets in a variety of industries, including financial services, financial technology,
blockchain, artificial intelligence, electric vehicles, health care, medical device, asset management, real estate services, insurance,
aviation, cybersecurity, space technology, electronic gaming, energy, banking, and manufacturing. |
|
● |
Communicated
an interest to discuss a business acquisition with all 91 potential acquisition targets, all of whom were willing to enter into preliminary
discussions in the period from August 17, 2021 through December 22, 2022. |
|
● |
Entered
into non-disclosure agreements with approximately 50 potential target companies (other than Jet Token) after preliminary discussions
and review of publicly available information. |
|
● |
Of
those 50 potential targets, Oxbridge engaged in more detailed due diligence and discussions directly with the senior executives and/or
stockholders of 10 such potential acquisition targets (the “Other Potential Targets”). |
|
● |
Submitted
indications of interest or intent to 11 acquisition candidates, six of which (including Jet Token) were not introduced by Maxim and
were not clients of Maxim. |
|
● |
Discussed
various targets at Oxbridge’s regularly scheduled board meetings. |
Of
the approximately 91 potential targets with which Oxbridge engaged in preliminary discussions, approximately 60 were eliminated prior
to conducting due diligence. Several of these targets withdrew from further consideration and Oxbridge eliminated other potential targets
due to the potential target companies’ financial profile, growth and profitability metrics, aggressive valuation of the company,
industry trends, and/or lack of public company readiness. Oxbridge submitted indications of interest or letters of intent to 11 potential
targets after Oxbridge’s due diligence indicated that the potential targets could complete a business combination transaction that
Oxbridge believed would be attractive to investors.
The
ten (10) Other Potential Target businesses comprised: (i) a medical device company in the drug delivery and pain management business
(“Company A”), (ii) a regulated payments solution company in the United Kingdom (“Company B”), (iii) a company
in the cross border payment technology business (“Company C”), (iv) a company in the decentralized banking business (“Company
D”), (v) a company in the solar technology and manufacturing business (“Company E”), (vi) a company in the bitcoin
mining business (“Company F”), (vii) a company in the real estate services business (“Company G”), (viii) a company
in the real estate platform technology business (“Company H”), (ix) an OTC company in the hemp manufacturing industry with
unique technology and intellectual property (“Company I”), (x) and a conglomerate in the banking, digitization of gold and
payments technology sectors (“Company J”). As part of its acquisition strategy, Oxbridge generally did not pursue potential
business combinations as part of widely competitive or wide auction processes, but instead focused on bilateral discussions with the
key decision makers of each of the Other Potential Targets regarding a potential business combination. Both Oxbridge management and the
Oxbridge Board reviewed a majority of the Other Potential Targets and analyzed the benefits of proceeding with a transaction with each
of the Other Potential Targets reviewed.
Oxbridge
engaged in discussions with each of the 10 Other Potential Targets. Oxbridge decided not to proceed following initial due diligence with
Company A, Company B, Company C, Company D, Company F, Company G, Company H, Company I and Company J and engaged in further detailed
discussions with Company E. Oxbridge entered into a non-binding LOI with Company E, dated August 10, 2022, and continued more detailed
discussions and preliminary due diligence with Company E. Oxbridge and Company E chose not to proceed and the LOI was mutually terminated.
On
September 28, 2022, a representative of Oxbridge reached out to George Murnane, Chief Executive Officer of Jet Token, to arrange
a meeting between Jet Token’s management and Oxbridge’s management. On October 3, 2022, Jay Madhu, Chief Executive Officer
and Director of Oxbridge, and Wrendon Timothy, Chief Financial Officer and Director of Oxbridge, met virtually with Mike Winston, Founder
and Chairman of Jet Token and George Murnane, Chief Executive Officer of Jet Token, and shared interest in the opportunity of
a business combination at a high level. Additionally, subsequent to the virtual meeting, a mutual non-disclosure agreement was signed
to further due diligence review and extensive conversations with respect to Jet Token.
This
was followed up by a virtual meeting with Mike Winston and George Murnane on October 4, 2022 where more details of Jet Token and
Oxbridge were shared with Oxbridge’s officers, board of directors and advisors. Mike Winston presented Jet Token investor’s
deck in detail and addressed questions from Oxbridge’s officers, board and advisors, noting that there was a good deal of mutual
interest and expertise in the potential business combination.
On
October 7, 2022, Oxbridge management and advisors met virtually with Jet Token’s management team and John Church, Chief Technology
Officer to make specific inquiries about Jet Token artificial intelligence and other technology to gain a better understanding of how
it works and to observe the technology in action. Given the continued level of mutual interest, Oxbridge team subsequently requested
access to Jet Token’s virtual data room which was in the process of being updated. On October 19, 2022, the Oxbridge team was granted
full access to the virtual data room. Additionally, Jet Token and Oxbridge began to discuss key terms of a potential transaction.
On
October 24, 2022, a list of updated documents in the Jet Token virtual data room was presented to Oxbridge. The virtual data room was
populated with, among other things, documents relating to Jet Token’s organizational structure, governing documents, financial
models and projections, Jet Token’s historical financial statements and material contracts. The Oxbridge team continued to conduct
diligence on Jet Token’s business including its financial outlook, product roadmap, intellectual property, Reg A+ offering data,
employee information, lease agreements, fleet agreements, artificial intelligence technology and growth plans.
From
October 24, 2022 to December 14, 2022, multiple conversations via phone and email were held by Jet Token and Oxbridge, regarding the
terms of a non-binding letter of intent (“LOI”). Multiple conversations were also held with Oxbridge’s financial advisor
Maxim. During this period as well, term sheets were prepared by Oxbridge management, which were shared, discussed and negotiated (in
principle) with Jet Token’s management. Included in the term sheets were structuring strategy, sources & uses of funds, pro
forma cap tables, estimated fees and value impacts of earn-outs assuming different post-close stock price trading.
On
December 13, 2022, an internal evaluation was made by the Oxbridge team identifying Jet Token as its lead (but not only) target candidate
for a business combination. While Jet Token was not the only target being evaluated, the management of Oxbridge believed that a transaction
with Jet Token would be a more compelling opportunity than other targets being evaluated since Jet Token was already a public reporting
company with audited financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (“PCAOB”) and had a management team with public company and capital markets experience. Oxbridge believed
that Jet Token’s filings with the SEC would provide a greater level of transparency to its shareholders and potential investors
as compared to other potential private company targets. These considerations, coupled with Jet Token’s technology and plans for
growth, and recent capital raise of approximately $7 million at a company valuation of $124 million, made Jet Token an attractive target.
Oxbridge
separately discussed the terms of the LOI, including the proposed purchase price, with Maxim, and agreed to the proposed purchase price.
The proposed purchase contemplated stock consideration of $45 million, as well as warrants with a Black-Scholes estimated valuation of
$60 million with a $15 strike price and 10-year duration, giving a total estimated consideration of $105 million at closing with the
practical impact of the warrants working similarly to an earnout.
On
December 14, 2022, Oxbridge presented Jet Token management with a first draft of the LOI. From December 14, 2022 through December 26,
2022, there were various calls, meetings, discussions and negotiations related to the key terms of the LOI. On December 27, 2022, management
of Oxbridge presented to Oxbridge’s board an analysis of Jet Token relative to two Other Potential Targets (Company G and Company
I).
On
December 27, 2022, the Oxbridge board approved Oxbridge signing the LOI with Jet Token dated December 23, 2022. On December 23, 2022,
the LOI was signed by both Mike Winston of Jet Token and Wrendon Timothy of Oxbridge.
On
December 30, 2022, the parties held an update call with representatives of Oxbridge management, Jet Token management and Maxim, to plan
for next steps and weekly “all-hands” calls. Follow up calls were held with Jet Token on January 4, 2023 and January 5, 2023
to discuss and share information about legal counsel, financial advisor and fairness opinion providers being engaged.
On
January 5, 2023, a call was made with Stanton Park Capital, LLC (“Stanton”), along with three (3) other providers, the purpose
of which was discussing a possible fairness opinion and getting clarity on the process and timing. Stanton was selected amongst a number
of providers due to current availability and experience with providing fairness opinions for a number of special-purpose acquisition
companies. Oxbridge and Stanton executed an engagement letter on January 9, 2023, which fully scoped their work, procedures and contractual
conditions (among other things). Stanton’s analyses were expected to be performed using acceptable valuation methodologies.
Stanton’s
services included an analysis of Jet Token on a going concern basis (consolidated with its subsidiaries, if any) and, fairness to Oxbridge,
from a financial point of view, of the purchase price and consideration to be paid for Jet Token. Such analysis was expected to be performed
in a phased approach. In the first phase (“Phase 1”), Stanton would perform such research and analysis as necessary to determine
on a preliminary basis whether or not the Purchase Price to be paid by Oxbridge for Jet Token is fair to Oxbridge from a financial point
of view. Stanton would present draft exhibits to the Oxbridge management and/or board regarding their preliminary analysis, respond to
questions and consider any input that may be given by the Oxbridge management, Board and/or its advisors. In the second phase (“Phase
2”), Stanton would then complete their analysis and issue a draft written opinion as to whether or not the Purchase Price expected
to be paid by Oxbridge for Jet Token is, in Stanton’ opinion, fair to Oxbridge from a financial point of view as of the date of
such draft opinion. For Phase 3 (“Phase 3”), if requested by the Oxbridge board, Stanton would finalize their work (taking
into consideration any input from the Oxbridge board and/or its advisors) and issue their final opinion and review the proxy language
related to Stanton, their engagement, and their opinion.
On
January 10, 2023, an all-hands kickoff meeting was held with Maxim, the management of Jet Token and Oxbridge, Jet Token’s legal
counsel Fox Rothschild LLP (“Fox”) and Oxbridge’s legal counsel Dykema Gossett PLLC (“Dykema”), to start
initial planning for preparation for negotiating and drafting the Business Combination Agreement and planning legal due diligence. Additionally,
full data room access was provided to Dykema to begin legal due diligence.
On
January 10, 2023, Oxbridge provided Stanton with the fully executed LOI, Black Scholes calculations utilized in the LOI, and full access
to Jet Token data room in connection with providing a fairness opinion. The draft Business Combination Agreement would be provided at
a later date when such has been completed. On January 11, 2023, Stanton met virtually with Oxbridge’s management and discussed,
among other things, transaction overview, business operations, product and service lines, financial results, projections, economic conditions
and industry trends, market competitors, customer composition and various other topics related to Jet Token’s business operations.
Stanton also discussed and reviewed in detail public filings of Jet Token, including specific information relating to Jet Token’s
Regulation A offering that to date has raised approximately $7 million at a company valuation of $124 million, and noting that such offering
will be terminated on January 17, 2023.
On
January 12, 2023, an all hands call with Jet Token, Oxbridge, Dykema, Fox and Maxim took place, followed by several update calls on January
12, January 17, January 19, January 24 and January 26, 2023. On January 26, 2023, Dykema provided a supplemental legal due diligence
request list to Fox. The virtual data room was periodically updated with additional documentation through the diligence process.
On
January 27, 2023, Fox circulated a first draft of the Business Combination Agreement to Oxbridge and Dykema.
On
January 30, 2023, Jay Madhu, Wrendon Timothy and Bill Yankus (Director) from Oxbridge, along with a representative from Maxim, performed
a due diligence site visit of Jet Token’s head office at 10845 Griffith Peak Dr., Suite 200, Las Vegas, NV 89135 and met with Jet
Token’s full management team, including Mike Winston, Chairman, George Murnane, Chief Executive Officer, John Church, Chief
Technology Officer, Patrick McNulty, Chief Operating Officer and Kienan Franklin, Vice President of Sales. During the site visit, the
Oxbridge team continued discussing Jet Token financial information and projections, current and future assets/fleet deals, update and
walkthrough of its novel artificial intelligence technology, as well as exploring its unique market opportunity. The Oxbridge team also
physically inspected Jet Token’s fleet and tested the operations of one of Jet Token’s Honda Jets through a short flight
from Phoenix to Las Vegas.
During
the site visit, the Oxbridge team also met with Greg Woods, President of Cirrus Aviation Services (“Cirrus”), the largest
private jet charter company based in Las Vegas. Jet Token currently has a Fleet Charter Agreement with Cirrus that allows Jet Token to
book over 30 private jets for its customers. The Oxbridge team also physically inspected a large number of Cirrus’ fleet that Jet
Token has access to, which included the following types of private jets: Learjet 45XR, Citation CJ3, Hawker 900XP, Citation XLS+, Learjet
60, Challenger 300, Challenger 604, Challenger 850, Falcon 900EX, Gulfstream V and Gulfstream G550.
On
January 31, 2023, Fox and Dykema conferred for the purpose of identifying and discussing key open issues in relation to the draft Business
Combination Agreement and the proposed transaction, including without limitation with respect to ancillary agreements, any adjustments
to merger consideration, treatment of assumed awards, treatment of Merger Consideration Warrants, tax-free reorganization structuring,
board composition and structure, conduct of Jet Token during the period between signing and closing of the Business Combination Agreement,
the domestication of Oxbridge in Delaware, and Nasdaq process considerations.
Additional
Business Combination Agreement negotiations, discussions and calls took place between Oxbridge, Jet Token, Dykema and Fox on February
2, February 7, February 9, February 14, February 16, February 21 and February 23, 2023.
On
February 15, 2023, the Oxbridge board held a meeting to continue discussing and updating the board on the Jet Token proposed Business
Combination progress, discussing of the draft Business Combination Agreement, and review of preliminary analysis provided by Stanton
on the fairness of the merger consideration.
On
February 21, 2023, the Oxbridge board held another meeting to continue discussing and updating the board on the Jet Token proposed Business
Combination, discussing of the updated draft Business Combination Agreement, and review of updated analysis provided by Stanton on the
fairness of the merger consideration. Stanton’s report to the Oxbridge board provided their analysis that a potential merger between
Oxbridge and Jet Token was fair from a financial point of view. The advice presented by Stanton as to fairness could only be used by
the Oxbridge board to assist them in determining whether or not to proceed with the transaction and whether or not to recommend the transaction
for approval of the stockholders of Oxbridge.
On
February 24, 2023, negotiations continued between Oxbridge and Jet Token. On the same date, the Oxbridge board met virtually to discuss
the Business Combination. At the meeting, Stanton’s report was presented and noted that the consideration contemplated in the Business
Combination Agreement was fair from a financial point of view. The full business Combination Agreement, along with summary of the terms
were discussed. After considering the proposed terms of the Business Combination Agreement and asking questions to Oxbridge’s management,
the Oxbridge board unanimously approved the Business Combination Agreement and gave management the authority to proceed to finalize terms
and to sign and approve.
The
following key terms were expected to be included in the Business Combination Agreement when finalized:
|
◌ |
$45
million equity value representing 4.5 million ordinary shares |
|
◌ |
Warrants
with Black-Scholes value of $60 million with strike price of $15 and 10-year duration, which will structured as tradeable. |
|
● |
$5
million of minimum net cash at close. |
|
● |
Customary
lock-up agreements and registration rights to be executed. |
|
● |
Customary
Representations and Warranties. |
On
February 24, 2023, the Business Combination Agreement was executed by both parties.
On
February 27, 2023, Oxbridge and Jet Token issued a press release announcing the execution of the Business Combination Agreement.
On
February 28, 2023, Oxbridge filed a Current Report on Form 8-K with the SEC disclosing the material provisions of the Business Combination
Agreement.
The
parties have continued and expect to continue regular discussions regarding the execution and timing of the Business Combination and
to take actions and exercise their respective rights under the Business Combination Agreement to facilitate the completion of
the Business Combination.
The
Oxbridge Board’s Reasons for the Approval of the Business Combination
The
Oxbridge Board considered a wide variety of factors in connection with its evaluation of the Business Combination. In light of the complexity
of those factors, the Oxbridge Board, as a whole, did not consider it practicable to, nor did it attempt to, quantify or otherwise assign
relative weights to the specific factors it took into account in reaching its decision. The Oxbridge Board viewed its decision as being
based on all of the information available and the factors presented to and considered by it. In addition, individual members of the Oxbridge
Board may have given different weight to different factors. This explanation of the reasons for the Oxbridge Board’s approval of
the Business Combination, and all other information presented in this section, is forward-looking in nature and, therefore, should be
read in light of the factors discussed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.”
Before
reaching its decision, the Oxbridge Board reviewed the results of the due diligence conducted by Oxbridge’s management and Oxbridge’s
advisors and consultants, which included:
|
● |
meetings
and calls with Jet Token’s management regarding its business model, operations and forecasts; |
|
|
|
|
● |
a
legal due diligence review conducted by Dykema Gossett PLLC which included, among other things, a review of material contracts, intellectual
property matters and other legal matters and documents posted to a virtual data room, conference calls with Jet Token and its attorneys
and certain public record searches regarding Jet Token; |
|
|
|
|
● |
review
of analysis prepared by, and discussions with, Oxbridge’s advisors and consultants; |
|
|
|
|
● |
consultation
with legal and financial advisors, industry experts and regulatory agencies; |
|
|
|
|
● |
financial
and valuation analysis of Jet Token and the Business Combination; and |
|
|
|
|
● |
review
of the financial statements of Jet Token. |
In
approving the Business Combination, the Oxbridge Board obtained a fairness opinion from Stanton Park Advisors LLC.
[Summary to come.]
In
addition to considering the factors described above, the Oxbridge Board also considered that the officers and directors of Oxbridge have
interests in the Business Combination as individuals that are in addition to, and that may be different from, the interests of Oxbridge’s
shareholders. Oxbridge’s independent directors reviewed and considered these interests during the negotiation of the Business Combination
and in evaluating and unanimously approving, as members of the Oxbridge Board, the Business Combination Agreement and the Business Combination.
For more information, see the subsection entitled “— Interests of Certain Persons in the Business Combination.”
The
Oxbridge Board concluded that the potential benefits that it expects Oxbridge and its shareholders to achieve as a result of the Business
Combination outweigh the potentially negative factors associated with the Business Combination. Accordingly, the Oxbridge Board, based
on its consideration of the specific factors listed above, unanimously (a) determined that the Business Combination and the other transactions
contemplated by the Business Combination Agreement are in the best interests of Oxbridge’s shareholders, (b) approved, adopted
and declared advisable the Business Combination Agreement and the transactions contemplated thereby and (c) recommended that the shareholders
of Oxbridge approve each of the Proposals.
The
above discussion of the material factors considered by the Oxbridge Board is not intended to be exhaustive but does set forth the principal
factors considered by the Oxbridge Board.
Unaudited
Prospective Financial Information for Jet Token
Jet
Token does not, as a matter of general practice, develop or publicly disclose long-term forecasts of its future financial performance.
However, Jet Token established targets relating to its consolidated results of operations and its business in connection with the proposed
Business Combination, including internally prepared forecasts for each of the fiscal years ending December 31, 2023 through 2027, and
supplied them to its board of directors and to Oxbridge. In connection with the proposed Business Combination, Oxbridge management used
the financial projections set forth below as part of its comprehensive analysis and presented key elements of the forecasts to the Oxbridge
Board as part of the Oxbridge Board’s review and subsequent approval of the Business Combination.
Jet
Token prepared these financial projections solely for internal use and not with a view toward public disclosure or toward complying with
U.S. GAAP, the published guidelines of the SEC regarding projections or the guidelines established by the American Institute of Certified
Public Accountants for preparation and presentation of prospective financial information. The inclusion of financial projections in this
proxy statement/prospectus should not be regarded as an indication that Oxbridge, Jet Token, their respective directors, officers, advisors
or other representatives considered, or now considers, such financial projections necessarily to be predictive of actual future results
or to support or fail to support your decision whether to vote for or against the Business Combination Proposal. No person has made or
makes any representation or warranty to any Oxbridge shareholder regarding the information included in these financial projections. The
financial forecasts are not fact and are not necessarily indicative of future results, and readers of this proxy statement/prospectus
are cautioned not to place undue reliance on this information. The projections should not be viewed as public guidance and you are cautioned
not to place undue reliance on the projections in making a decision regarding the Business Combination, as the projections may be materially
different than actual results. Jet Token will not refer back to the financial projections in its future periodic reports filed under
the Exchange Act.
Furthermore,
the financial projections do not take into account any circumstances or events occurring after the date they were prepared. None of Jet
Token’s independent registered public accounting firm, Oxbridge’s independent registered public accounting firm nor any other
independent accountants, have compiled, examined or performed any procedures with respect to the financial projections, nor have they
expressed any opinion or any other form of assurance on such information or its achievability, and they assume no responsibility for,
and disclaim any association with, the financial projections. Nonetheless, a summary of the projections is provided in this proxy statement/prospectus
only because the projections were made available to Oxbridge and the Oxbridge Board in connection with their review of the proposed Business
Combination.
These
financial projections reflect numerous estimates and assumptions with respect to industry performance, general business, economic, regulatory,
market and financial conditions and other future events, as well as matters specific to Jet Token’s business, all of which are
difficult to predict and many of which are beyond Jet Token’s control. As a result, there can be no assurance that the projected
results will be realized or that actual results will be as projected. Since the projections cover multiple years, such information by
its nature becomes less predictive with each successive year. These financial projections are subjective in many respects and thus are
susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. As such, these financial
projections constitute forward-looking information and are subject to risks and uncertainties, including the various risks set forth
in the section entitled “Risk Factors” in this proxy statement/prospectus.
EXCEPT
TO THE EXTENT REQUIRED BY APPLICABLE FEDERAL SECURITIES LAWS, BY INCLUDING IN THIS PROXY STATEMENT/PROSPECTUS A SUMMARY OF JET TOKEN’S
INTERNAL FINANCIAL PROJECTIONS, OXBRIDGE UNDERTAKES NO OBLIGATIONS AND EXPRESSLY DISCLAIMS ANY RESPONSIBILITY TO UPDATE OR REVISE, OR
PUBLICLY DISCLOSE ANY UPDATE OR REVISION TO, THESE FINANCIAL PROJECTIONS TO REFLECT CIRCUMSTANCES OR EVENTS, INCLUDING UNANTICIPATED
EVENTS, THAT MAY HAVE OCCURRED OR THAT MAY OCCUR AFTER THE PREPARATION OF THESE FINANCIAL PROJECTIONS AND THEIR PRESENTATION TO THE OXBRIDGE
BOARD, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE FINANCIAL PROJECTIONS ARE SHOWN TO BE IN ERROR OR CHANGE.
The
unaudited prospective financial information included in this proxy statement/prospectus has been prepared by, and is the responsibility
of, Jet Token. Neither BF Borgers CPA PC, Jet Token’s independent registered public accounting firm, nor Hacker Johnson & Smith
P.A., Oxbridge’s independent registered public accounting firm, has audited, reviewed, examined, compiled or applied agreed-upon
procedures with respect to the accompanying unaudited prospective financial information and, accordingly, neither BF Borgers CPA PC nor
Hacker Johnson & Smith P.A. express an opinion or any other form of assurance with respect thereto. The BF Borgers CPA PC report
included in this proxy statement/prospectus relates to Jet Token’s previously issued financial statements. It does not extend to
the unaudited prospective financial information and should not be read to do so.
Key
Financial Metrics:
The
projections set out below reflect the updated and final version of the financial projection model reviewed by Oxbridge on February 20,
2023 and assume the consummation of the Business Combination. As described above, Jet Token’s ability to achieve these projections
will depend upon a number of factors outside of its control. These factors include significant business, economic and competitive uncertainties
and contingencies. Jet Token developed these projections based upon assumptions with respect to future business decisions and conditions
that are subject to change, including Jet Token’s execution of its strategies and product development, as well as growth in the
markets in which it currently operates and proposes to operate. As a result, Jet Token’s actual results may materially vary from
the projections set out below. See also “Cautionary Note Regarding Forward-Looking Statements” and the risk factors set out
in “Risk Factors.”
The
key elements of the projections provided by Oxbridge management to the Oxbridge Board are as follows:
|
|
Year
Ended December 31, |
|
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2025 |
|
|
2026 |
|
|
2027 |
|
($
in millions) |
|
(Actual) |
|
|
(Forecast) |
|
|
(Forecast) |
|
|
(Forecast) |
|
|
(Forecast) |
|
|
(Forecast) |
|
Total
Revenue |
|
$ |
21.9 |
|
|
$ |
33.9 |
|
|
$ |
42.5 |
|
|
$ |
53.0 |
|
|
$ |
66.8 |
|
|
$ |
86.5 |
|
YoY Growth
% |
|
|
1865.7 |
% |
|
|
54.9 |
% |
|
|
25.4 |
% |
|
|
24.8 |
% |
|
|
26.1 |
% |
|
|
29.4 |
% |
Total Cost
of Revenue |
|
$ |
19.8 |
|
|
$ |
27.1 |
|
|
$ |
35.4 |
|
|
$ |
43.8 |
|
|
$ |
53.9 |
|
|
$ |
67.1 |
|
% of Revenue |
|
$ |
2.1 |
|
|
$ |
6.7 |
|
|
$ |
7.0 |
|
|
$ |
9.2 |
|
|
$ |
12.9 |
|
|
$ |
19.4 |
|
% Gross
Margin |
|
|
9.4 |
% |
|
|
19.8 |
% |
|
|
16.6 |
% |
|
|
17.4 |
% |
|
|
19.3 |
% |
|
|
22.4 |
% |
Total G&A
+ R&D(1) |
|
$ |
3.3 |
|
|
$ |
2.7 |
|
|
$ |
3.4 |
|
|
$ |
4.2 |
|
|
$ |
5.3 |
|
|
$ |
6.9 |
|
% of Revenue |
|
|
15.1 |
% |
|
|
8.0 |
% |
|
|
8.0 |
% |
|
|
8.0 |
% |
|
|
8.0 |
% |
|
|
8.0 |
% |
EBITDA |
|
$ |
(1.1 |
) |
|
$ |
4.0 |
|
|
$ |
3.6 |
|
|
$ |
5.0 |
|
|
$ |
7.5 |
|
|
$ |
12.5 |
|
%
EBITDA Margins |
|
|
NA |
|
|
|
11.8 |
% |
|
|
8.6 |
% |
|
|
9.4 |
% |
|
|
11.3 |
% |
|
|
14.4 |
% |
Capital
Expenditures |
|
$ |
(0.8 |
) |
|
$ |
(0.3 |
) |
|
$ |
(0.4 |
) |
|
$ |
(0.5 |
) |
|
$ |
(0.7 |
) |
|
$ |
(0.9 |
) |
Free Cash
Flow (2) |
|
$ |
(0.1 |
) |
|
$ |
3.0 |
|
|
$ |
2.5 |
|
|
$ |
3.3 |
|
|
$ |
5.1 |
|
|
$ |
8.6 |
|
(1)
Excludes stock-based compensation of $6,492,653 in 2022.
(2)
Management forecasts a modest decline in margin in 2024 followed by a rebound beginning in 2025. The forecasted margin decline is expected
to be attributed to the expiration of certain favorable contracts related to the operation of our aircraft. The margin rebound forecast
to begin in 2025 is expected to stem from continued expansion in higher margin revenues otherwise unrelated to the operation of company
owned aircraft.
(3)
Free Cash Flow is defined as net cash provided by (used in) operating activities less capital expenditures and additions to intangibles.
Projected
revenue is based on Jet Token’s (i) the sale of fractional and whole interests in aircraft, (ii) the sale of jet cards, which enable
holders to use certain of Jet Token’s and other’s aircraft at agreed-upon rates, (iii) the operation of a proprietary booking
platform, which functions as a prospecting and quoting platform to arrange private jet travel with third party carriers as well as via
Jet Token’s leased and managed aircraft, for Part 135 (whole aircraft charter) and Part 380 (by the seat charter). The Company
expects to enhance its revenue-generating capabilities with the integration of Artificial Intelligence into its app-based booking platform,
and other aviation software projects more fully described in the sections entitled “Information About Jet Token” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations of Jet Token.” Demand for the Company’s services
is driven primarily by rising per capita disposable income and increased awareness of the value proposition clients see in the flexibility
and convenience private flights offer. Projected gross profit is driven by aircraft utilization, operating and capital costs, as well
as development and marketing costs. Jet Token’s asset strategy is to fully “fractionalize” its operating aircraft prior
to delivery resulting in limited capital expenditures.
Jet
Token prepared these projections based on a variety of sources, including inputs and market data from third-party data providers, work
with external consultants and management’s experience in the aviation and technology sectors. These projections are based on a
number of assumptions, including the following assumptions that Jet Token’s management believes to be material:
With
respect to Total Revenue:
|
● |
A
return to a normalized, pre-COVID (i.e., 2019) level of growth in domestic private jet hours flown |
|
● |
No
growth in fleet size, reflecting the non-binding nature of the proposed Bombardier fleet LOI |
|
● |
Mid
to high teens CAGR in Jet Card revenue over the five-year period |
|
● |
An
increase in app-based charter booking from a low single digit percent of sales to low to mid-teens |
|
● |
An
increase in revenue from app-based charter booking from a low single digit percent of sales to mid-teens |
Projected
Contribution and EBITDA are driven by the cost to deliver, as well as the cost of providing other services and new business initiatives
included in cost of revenue. The projections related to Contribution are primarily based on historical trends and factor in improvements
related to supply optimization, maintenance and operating scale over time. Projected EBITDA is additionally driven by expectations of
other costs and expenses, including growth rates for technology and development, sales and marketing, and general and administrative
expenses. The projected growth rates for costs and expenses are based on the ratio of historical expense to revenue and reflect improvements
in the ratios as Jet Token continues to scale.
As
noted above, management forecasts a modest decline in margin in 2024 followed by a rebound beginning in 2025. The forecasted margin decline
is expected to be attributed to the expiration of certain favorable contracts related to the operation of our aircraft. The margin rebound
forecast to begin in 2025 is expected to stem from continued expansion in higher margin revenues otherwise unrelated to the operation
of company owned aircraft.
Projected
capital expenditures primarily includes aircraft maintenance-related investments as well continued investment in software development.
While
Jet Token’s management believes the abovementioned assumptions to be reasonable for preparation of its projected financial information,
they are dependent upon future events, and actual conditions may differ from those assumed. In addition, Jet Token used and relied upon
certain information provided by others. While Jet Token believes the use of such information and assumptions to be reasonable for preparation
of its projected financial information, it offers no assurances with respect thereto and some assumptions may vary significantly due
to unanticipated events and circumstances.
Satisfaction
of 80% Test
It
is a requirement under the Existing Organizational Documents that the business or assets acquired in an Initial Business Combination
have a fair market value equal to at least 80% of the balance of the funds in the Trust Account (net of amounts disbursed to management
for working capital purposes and excluding the deferred underwriting discounts and commissions) at the time of the execution of a definitive
agreement for an Initial Business Combination. In connection with its evaluation and approval of the Business Combination, the Oxbridge
Board determined that the fair market value of Jet Token exceeded [$_________] based on, among other things, comparable company EBITDA
multiples and revenue multiples.
Interests
of Certain Persons in the Business Combination
Interests
of Sponsor and Oxbridge Directors and Officers
In
considering the recommendation of the Oxbridge Board to vote in favor of the Business Combination, shareholders should be aware that,
aside from their interests as shareholders, our Sponsor and certain of our directors and officers have interests in the Business Combination
that are different from, or in addition to, those of other shareholders generally. Our directors were aware of and considered these interests,
among other matters, in evaluating the Business Combination, and in recommending to shareholders that they approve the Business Combination.
Shareholders should take these interests into account in deciding whether to approve the Business Combination. These interests include,
among other things:
| ● | the
fact that our Sponsor owns 2,875,000 Founder Shares, which were initially acquired prior
to Oxbridge’s IPO and for an aggregate purchase price of $25,000, and Oxbridge’s
directors and officers have a pecuniary interest in such Founder Shares through their ownership
interest in the Sponsor. Such securities will have a significantly higher value at the time
of the Business Combination, which if unrestricted and freely tradable would be valued at
approximately [$ ], based on the closing price of our Class A Ordinary Shares of [$ ] per
share on [__________, 2023]. In addition, the Sponsor paid an aggregate of $4,897,500 for
4,897,500 Private Placement Warrants at a price of $1.00 per warrant. Such Private Placement
Warrants had an aggregate market value of [$________] based on the last sale price of [$_______]
per warrant on Nasdaq on [__________, 2023]. If Oxbridge does not consummate the Business
Combination or another initial business combination by August 16, 2023, and Oxbridge is therefore
required to be liquidated, these shares would be worthless, as Founder Shares are not entitled
to participate in any redemption or liquidation of the Trust Account; |
| | |
| ● | the
fact that Oxbridge’s officers and directors have an aggregate of $953,552 invested
in the Sponsor, which will be lost in the event that the Business Combination is not approved
and concluded; |
| | |
| ● | the
fact that given the differential in the purchase price that our Sponsor paid for the Founder Shares as compared to the price of the
Units sold in the IPO and the substantial number of shares of Jet.AI Common Stock that our Sponsor will receive upon conversion of
the Founder Shares in connection with the Business Combination, our Sponsor and its affiliates may earn a positive rate of return on
their investment even if the Jet.AI Common Stock trades below the price initially paid for the Units in the IPO and the public
shareholders experience a negative rate of return following the completion of the Business Combination; |
| | |
| ● | the
fact that our Sponsor, officers and directors have agreed not to redeem any Class A Ordinary
Shares held by them in connection with a shareholder vote to approve the Business Combination; |
| | |
| ● | if
the Trust Account is liquidated, including in the event we are unable to complete an Initial
Business Combination within the required time period, our Sponsor has agreed to indemnify
us to ensure that the proceeds in the Trust Account are not reduced below [$10.15] per public
share, or such lesser amount per public share as is in the Trust Account on the liquidation
date, by the claims of (a) any third party (other than our independent registered public
accounting firm) for services rendered or products sold to us or (b) a prospective target
business with which we have entered into a letter of intent, confidentiality or other similar
agreement or business combination agreement, but only if such a third party or target business
has not executed a waiver of all rights to seek access to the Trust Account; |
| | |
| ● | the
anticipated continuation of Jay Madhu and Wrendon Timothy as directors after the Business
Combination, and as such, after the proposed Business Combination is consummated, Mr. Madhu
and Mr. Timothy will in the future receive any cash fees, stock options or stock awards that
the Jet.AI Board determines to pay to its directors; |
| | |
|
● |
the fact that our Sponsor, officers and directors
will be reimbursed for out-of-pocket expenses incurred in connection with activities on our behalf, such as identifying potential target
businesses and performing due diligence on suitable business combinations; and |
| ● | the
fact that our Sponsor will lose their entire investment in us if an Initial Business Combination
is not completed. In addition, our Sponsor has made available to us a loan of $575,000 to
extend the deadline for completion of our Initial Business Combination from November 16,
2022 to August 16, 2023, all of which is outstanding as of , 2023. The ability of Oxbridge
to repay such loan is dependent upon the completion of our Initial Business Combination. |
As
of [__________, 2023], the Sponsor and its affiliates had an aggregate of [$__________] at risk that depends on completion of an initial
business combination, including [$___________] it invested in securities, [$_________] of unpaid loans and outstanding administrative
services fees. As of [________, 2023], there was no unreimbursed out-of-pocket expenses incurred by the sponsor or its affiliates. These
interests may have influenced Oxbridge’s directors in making their recommendation that you vote in favor of the approval of the
Business Combination.
Potential
Purchases of Public Shares
In
connection with the shareholder vote to approve the Business Combination, our Sponsor, directors, officers, advisors or any of their
respective affiliates may privately negotiate transactions to purchase public shares from shareholders who would have otherwise elected
to have their shares redeemed in conjunction with the Business Combination for a per share pro rata portion of the Trust Account. There
is no limit on the number of public shares our Sponsor, directors, officers, advisors or any of their respective affiliates may purchase
in such transactions, subject to compliance with applicable law and the rules of Nasdaq. Any such privately negotiated purchases may
be effected at purchase prices that are in excess of the per share pro rata portion of the Trust Account. However, our Sponsor, directors,
officers, advisors and their respective affiliates have no current commitments, plans or intentions to engage in such transactions and
have not formulated any terms or conditions for any such transactions. None of the funds in the Trust Account will be used to purchase
public shares in such transactions. None of our Sponsor, directors, officers, advisors or any of their respective affiliates will make
any such purchases when they are in possession of any material non-public information not disclosed to the seller of such public shares
or during a restricted period under Regulation M under the Exchange Act. Such a purchase could include a contractual acknowledgement
that such shareholder, although still the record holder of such public shares, is no longer the beneficial owner thereof and therefore
agrees not to exercise its redemption rights, and could include a contractual provision that directs such shareholder to vote such shares
in a manner directed by the purchaser.
In
the event that our Sponsor, directors, officers, advisors or any of their respective affiliates purchase public shares in privately negotiated
transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be
required to revoke their prior elections to redeem their shares.
The
purpose of any such purchases of public shares could be to (a) vote such shares in favor of the Business Combination and thereby increase
the likelihood of obtaining shareholder approval of the Business Combination or (b) to satisfy a closing condition in the Business Combination
Agreement, where it appears that such requirement would otherwise not be met. Any such purchases of our public shares may result in the
completion of the Business Combination that may not otherwise have been possible. Any such purchases will be reported pursuant to Section
13 and Section 16 of the Exchange Act to the extent the purchasers are subject to such reporting requirements.
In
addition, if such purchases are made, the public “float” of our Class A Ordinary Shares may be reduced and the number of
beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading
of our securities on a national securities exchange.
Our
Sponsor, officers, directors, advisors or any of their respective affiliates anticipate that they may identify the shareholders with
whom our Sponsor, officers, directors, advisors or any of their respective affiliates may pursue privately negotiated purchases by either
the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders following our mailing of proxy
materials in connection with the Business Combination. To the extent that our Sponsor, officers, directors, advisors or any of their
respective affiliates enter into a privately negotiated purchase, they would identify and contact only potential selling shareholders
who have expressed their election to redeem their shares for a pro rata portion of the Trust Account or vote against the Business Combination,
whether or not such shareholder has already submitted a proxy with respect to the Business Combination but only if such shares have not
already been voted at the extraordinary general meeting related to the Business Combination. Our Sponsor, officers, directors, advisors
or any of their respective affiliates will select which shareholders to purchase shares from based on the negotiated price and number
of shares and any other factors that they may deem relevant, and will only purchase public shares if such purchases comply with Regulation
M under the Exchange Act and the other federal securities laws.
Any
purchases by our Sponsor, officers, directors, advisors or any of their respective affiliates who are affiliated purchasers under Rule
10b-18 under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which
is a safe harbor from liability for manipulation under Section 9(a)(2) of and Rule 10b-5 under the Exchange Act. Rule 10b-18 has certain
technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our Sponsor, officers,
directors, advisors and any of their respective affiliates will not make purchases of Class A Ordinary Shares if the purchases would
violate Section 9(a)(2) of or Rule 10b-5 under the Exchange Act.
Total
Company Shares to Be Issued in the Business Combination
We
anticipate that, upon completion of the Business Combination, the ownership of Jet.AI will be as follows:
| |
Shares
of Jet.AI
Common
Stock | | |
% of Total Jet.AI
Common Stock | |
Historical Rollover
Shareholders | |
| 4,500,000 | | |
| 51.86 | |
Public Shareholders(1) | |
| 1,301,952 | | |
| 15.00 | |
Initial Shareholders | |
| 2,875,000 | | |
| 33.14 | |
Total | |
| 8,676,952 | | |
| 100.0 | % |
|
(1) |
Includes
115,000 shares of Class A Ordinary Shares issued to Maxim Group, LLC, the representative
to the underwriters in our initial public offering, which are not redeemable pursuant to an agreement between Maxim and the
Company. |
The
number of shares and the interests set forth above (a) assume (i) that no public shareholders elect to have their public shares redeemed,
(ii) that there are no other issuances of equity interests of Oxbridge or Jet Token, (iii) none of Oxbridge’s initial shareholders
or the Historical Rollover Shareholders purchase Class A Ordinary Shares in the open market and (iv) that there are no exercises of Jet
Token Options, Jet Token Warrants or Jet Token RSU Awards and (b) do not take into account Oxbridge Warrants or Merger Consideration
Warrants that will remain outstanding following the Business Combination and which may be exercised at a later date. As a result of the
Business Combination, the economic and voting interests of our public shareholders will decrease.
If
we assume the maximum redemptions scenario described under the section entitled “Unaudited Pro Forma Condensed Combined Financial
Information — Note 1 — Basis of Presentation,” i.e., 237,734 public shares are redeemed, and the assumptions set forth
in the foregoing clauses (a)(ii)–(iv) and (b) remain true, the ownership of Jet.AI upon completion of the Business Combination
will be as follows:
| |
Shares of Jet.AI
Common Stock | | |
% of Total Jet.AI
Common Stock | |
Historical Rollover
Shareholders | |
| 4,500,000 | | |
| 53.32 | |
Public Shareholders(1) | |
| 1,064,218 | | |
| 12.61 | |
Initial Shareholders | |
| 2,875,000 | | |
| 34.07 | |
Total | |
| 8,439,218 | | |
| 100.0 | % |
|
(1) |
Includes
115,000 shares of Class A Ordinary Shares issued to Maxim Group, LLC, the representative
to the underwriters in our initial public offering, which are not redeemable pursuant to an agreement between Maxim and the
Company. |
The
ownership percentages with respect to Jet.AI set forth above do not take into account Oxbridge Warrants or Merger Consideration Warrants
that will remain outstanding immediately following the Business Combination, but do include the Founder Shares, which will convert into
Jet.AI Common Stock upon an Initial Business Combination. If the facts are different than these assumptions, the percentage ownership
retained by Oxbridge’s existing shareholders in Jet.AI following the Business Combination will be different. For example, if we
assume that all outstanding 11,500,000 public warrants, 5,760,000 private placement warrants and 7,353,000 Merger Consideration
Warrants were exercisable and exercised following completion of the Business Combination and further assume that no public shareholders
elect to have their public shares redeemed (and each other assumption set forth in the preceding paragraph remains the same), then the
ownership of Jet.AI would be as follows:
| |
Shares of Jet.AI
Common Stock | | |
% of Total Jet.AI
Common Stock | |
Historical Rollover
Shareholders | |
| 11,853,000 | | |
| 35.60 | |
Public Shareholders(1) | |
| 12,801,952 | | |
| 38.46 | |
Initial Shareholders(2) | |
| 8,635,000 | | |
| 25.94 | |
Total | |
| 33,289,952 | | |
| 100.0 | % |
|
(1) |
Includes
115,000 shares of Class A Ordinary Shares issued to Maxim Group, LLC, the representative
to the underwriters in our initial public offering, which are not redeemable pursuant to an agreement between Maxim and the
Company. |
|
|
|
|
(2) |
Includes
862,500 shares issuable to Maxim Group, LLC, the representative to the underwriters
in our initial public offering, upon exercise of private placement warrants. |
The
Oxbridge Warrants will become exercisable on the later of (a) 30 days after the completion of the Business Combination (or any other
Initial Business Combination) and (b) 12 months from the closing of our IPO and will expire five years after the completion of an Initial
Business Combination or earlier upon their redemption or liquidation.
The
Merger Consideration Warrants will become exercisable on the completion of the Business Combination.
Additionally,
if we (a) assume (i) that no public shareholders elect to have their public shares redeemed, (ii) that there are no other issuances of
equity interests of Oxbridge or Jet Token, (iii) none of Oxbridge’s initial shareholders or the Historical Rollover Shareholders
purchase Class A Ordinary Shares in the open market, (iv) the issuance of all 3,418,408 shares of Jet.AI Common Stock that
will be reserved in respect of Jet.AI Options issued in exchange for outstanding pre-merger Jet Token Options and in respect of Jet.AI
RSU Awards issued in exchange for outstanding pre-merger Jet Token RSU Awards, and (b) do not take into account Oxbridge Warrants or
Merger Consideration Warrants that will remain outstanding following the Business Combination and may be exercised at a later date, then
the ownership of Jet.AI would be as follows:
| |
Shares of Jet.AI
Common Stock | | |
%
of Total Jet.AI
Common
Stock | |
Historical Rollover
Shareholders | |
| 7,918,408 | | |
| 65.47 | |
Public Shareholders(1) | |
| 1,301,952 | | |
| 10.76 | |
Initial Shareholders | |
| 2,875,000 | | |
| 23.77 | |
Total | |
| 12,095,360 | | |
| 100.0 | % |
|
(1) |
Includes
115,000 shares of Class A Ordinary Shares issued to Maxim Group, LLC, the representative
to the underwriters in our initial public offering, which are not redeemable pursuant to an agreement between Maxim and the
Company. |
Please
see the subsection and section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for further information.
Board
of Directors of Jet.AI Following the Business Combination
Effective
immediately after the consummation of the Business Combination, the business and affairs of the post-combination company will be managed
by or under the direction of the Jet.AI Board. The following table sets forth certain information, including ages as of [March ____,
2023], regarding the persons who are expected to serve as executive officers and directors of Jet.AI upon the consummation of the Business
Combination and assuming the election of the nominees at the extraordinary general meeting as set forth in the section entitled “Proposal
No. 6 — The Director Election Proposal.”
Name |
|
Age |
|
Position |
Michael
Winston |
|
46 |
|
Director |
George
Murnane |
|
65 |
|
Director |
Jay
Madhu |
|
56 |
|
Director |
Wrendon
Timothy |
|
43 |
|
Director |
Redemption
Rights
Under
our Existing Organizational Documents, holders of public shares may elect to have their shares redeemed for cash at the applicable redemption
price per share calculated in accordance with our Existing Organizational Documents. As of [_________, 2023], this would have amounted
to $10.89 per share. If a holder exercises its redemption rights, then such holder will be exchanging its shares of our Class A Ordinary
Shares for cash and will no longer own shares of Oxbridge. Such a holder will be entitled to receive cash for its public shares only
if it properly demands redemption and delivers its shares (either physically or electronically) to our transfer agent in accordance with
the procedures described herein. Notwithstanding the foregoing, a public shareholder, together with any of his, her or its affiliates
or any other person with whom it is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act),
will be restricted from seeking redemption rights with respect to his, her or its shares or, if part of such a group, the group’s
shares, in excess of the 15% threshold. Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public
shareholder or group will not be redeemed for cash. In order to determine whether a shareholder is acting in concert or as a “group”
(as defined in Section 13(d)(3) of the Exchange Act) with any other shareholder, Oxbridge will require each public shareholder seeking
to exercise redemption rights to certify to Oxbridge whether such shareholder is acting in concert or as a group with any other shareholder.
Each redemption of Class A Ordinary Shares by our public shareholders will decrease the amount in our Trust Account. In no event will
we redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001. See the subsection entitled
“Extraordinary General Meeting — Redemption Rights” for the procedures to be followed if you wish to redeem your shares
for cash.
Appraisal
Rights
Appraisal
Rights of Oxbridge Shareholders
There
are no appraisal rights available to holders of Class A Ordinary Shares, Class B Ordinary Shares or Oxbridge Warrants in connection with
the Business Combination or Domestication under Cayman Islands law or the DGCL.
Expected
Accounting Treatment
The
Business Combination will be accounted for as a reverse recapitalization under U.S. GAAP. Under this method of accounting, Oxbridge will
be treated as the “acquired” company for financial reporting purposes. This determination is primarily based on Jet Token
stockholders comprising a relative majority of the voting power of Jet.AI and having the ability to nominate four of the members of the
Jet.AI Board, Jet Token’s operations prior to the acquisition comprising the only ongoing operations of Jet.AI and Jet Token’s
senior management comprising a majority of the senior management of Jet.AI. Accordingly, for accounting purposes, the financial statements
of the post-combination company will represent a continuation of the financial statements of Jet Token with the Business Combination
treated as the equivalent of Jet Token issuing stock for the net assets of Oxbridge, accompanied by a recapitalization. The net assets
of Oxbridge will be stated at historical costs, with no goodwill or other intangible assets recorded. Operations prior to the Business
Combination will be presented as those of Jet Token in future reports of Jet.AI.
Material
U.S. Federal Income Tax Considerations
The
following is a discussion of the material U.S. federal income tax considerations for Holders (as defined below) of Class A Ordinary Shares
and Oxbridge Warrants (collectively, “Oxbridge Public Securities”) immediately prior to the Business Combination with respect
to (i) the Domestication, (ii) electing to have their Jet.AI Common Stock redeemed for cash if the Business Combination is completed,
(iii) the Business Combination and (iv) the ownership and disposition of Jet.AI Common Stock and Jet.AI Warrants (collectively,
“Jet.AI Securities”) following the Business Combination. Unless the context otherwise requires, any reference in this section
of this proxy statement/prospectus to “we,” “us” or “our” refers to Oxbridge prior to the Business
Combination and to Jet.AI and its subsidiaries following the Business Combination. For purposes of this discussion, a “Holder”
is a beneficial owner of Oxbridge Public Securities immediately prior to the Business Combination or, as a result of owning such Oxbridge
Public Securities, of Jet.AI Securities immediately following the Business Combination. Although not entirely clear, we intend to treat
a Holder of a Oxbridge Unit or Jet.AI Unit (each consisting of one Class A Ordinary Share and a Oxbridge Warrant or one share of Jet.AI
Common Stock and a Jet.AI Warrant, as applicable) as the owner of the underlying Oxbridge Public Securities or Jet.AI Securities,
as applicable, for U.S. federal income tax purposes. Assuming such treatment is appropriate, the discussion below with respect to Holders
of Class A Ordinary Shares, Oxbridge Warrants, shares of Jet.AI Common Stock and Jet.AI Warrants should also apply to Holders
of Oxbridge Units and Jet.AI Units, as applicable (as the deemed owners of the underlying Oxbridge Public Securities and Jet.AI Securities
that constitute the Oxbridge Units and Jet.AI Units, as applicable).
This
discussion applies only to Oxbridge Public Securities and Jet.AI Securities, as the case may be, that are held as “capital assets”
within the meaning of Section 1221 of the Code for U.S. federal income tax purposes (generally, property held for investment). This discussion
is based on the provisions of the Code, U.S. Treasury regulations, administrative rules, and judicial decisions, all as in effect on
the date hereof, and all of which are subject to change or differing interpretations, possibly with retroactive effect. Any such change
or differing interpretation could significantly alter the tax considerations described herein. Oxbridge has not sought any rulings from
the IRS with respect to the statements made and the positions or conclusions described in this summary. Such statements, positions and
conclusions are not free from doubt, and there can be no assurance that your tax advisor, the IRS or a court will agree with such statements,
positions and conclusions.
The
following discussion does not purport to be a complete analysis of all potential tax effects resulting from the completion of the Business
Combination and does not address the tax treatment of any other transactions occurring in connection with the Business Combination, including,
but not limited to, the issuance of Class A Ordinary Shares in the Private Placements. In addition, this summary does not address the
Medicare tax on certain investment income, U.S. federal estate or gift tax laws, any U.S. state, local, or non-U.S. tax laws, any tax
treaties or other tax law other than U.S. federal income tax law. Furthermore, this discussion does not address all U.S. federal income
tax considerations that may be relevant to particular Holders in light of their personal circumstances or that may be relevant to certain
categories of investors that may be subject to special rules, such as:
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banks,
insurance companies, or other financial institutions; |
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tax-exempt
or governmental organizations; |
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“qualified
foreign pension funds” as defined in Section 897(l)(2) of the Code (or any entities all of the interests of which are held
by a qualified foreign pension fund); |
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dealers
in securities or foreign currencies; |
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U.S.
Holders (as defined below) whose functional currency is not the U.S. dollar; |
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traders
in securities that use the mark-to-market method of accounting for U.S. federal income tax purposes; |
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“controlled
foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid
U.S. federal income tax; |
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entities
or arrangements treated as partnerships or other pass-through entities for U.S. federal income tax purposes or holders of interests
therein; |
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persons
deemed to sell Oxbridge Public Securities or Jet.AI Securities under the constructive sale provisions of the Code; |
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persons
that acquired Oxbridge Public Securities or Jet.AI Securities through the exercise of employee stock options or otherwise as compensation
or through a tax-qualified retirement plan; |
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except
as specifically provided below, persons that actually or constructively own five percent or more (by vote or value) of any class
of Ordinary Shares or Jet.AI Common Stock; |
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persons
that hold Oxbridge Public Securities or Jet.AI Securities as part of a straddle, appreciated financial position, synthetic security,
hedge, conversion transaction, or other integrated investment or risk reduction transaction; |
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certain
former citizens or long-term residents of the United States; |
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holders
of Founder Shares and private placement warrants; and |
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the
initial shareholders, our Sponsor, and Oxbridge’s or Jet.AI’s officers or directors. |
INVESTORS
ARE ENCOURAGED TO CONSULT WITH, AND RELY SOLELY UPON, THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX
LAWS (INCLUDING ANY POTENTIAL FUTURE CHANGES THERETO) TO THEIR PARTICULAR SITUATIONS, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER ANY
OTHER TAX LAWS, INCLUDING BUT NOT LIMITED TO, THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY U.S. STATE, LOCAL, NON-U.S.
OR OTHER TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.
U.S.
Holder and Non-U.S. Holder Defined
For
purposes of this discussion, a “U.S. Holder” is a Holder that, for U.S. federal income tax purposes, is:
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an
individual who is a citizen or resident of the United States, including an individual who is present in the United States for 183
days or more during a taxable year; |
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a
corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the
laws of the United States, any state thereof, or the District of Columbia; |
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an
estate the income of which is subject to U.S. federal income tax regardless of its source; or |
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a
trust (i) the administration of which is subject to the primary supervision of a U.S. court and which has one or more “United
States persons” (within the meaning of Section 7701(a)(30) of the Code) who have the authority to control all substantial decisions
of the trust or (ii) that has made a valid election under applicable U.S. Treasury regulations to be treated as a United States person. |
A
“Non-U.S. Holder” is a Holder that is, for U.S. federal income tax purposes, an individual, corporation, estate or trust
and that is not a U.S. Holder.
If
a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds Oxbridge Units,
Jet.AI Units, Oxbridge Public Securities or Jet.AI Securities, the tax treatment of a partner in such partnership generally might depend
upon the status of the partner, upon the activities of the partnership and upon certain determinations made at the partner level. Accordingly,
we urge partners in partnerships (including entities or arrangements treated as partnerships for U.S. federal income tax purposes) holding
Oxbridge Public Securities or Jet.AI Securities to consult with, and rely solely upon, their tax advisors regarding the U.S. federal
income tax consequences to them relating to the matters discussed below.
U.S.
Federal Income Taxation of U.S. Holders
This
section applies to you if you are a “U.S. Holder.”
The
Domestication
The
discussion under this heading “— U.S. Federal Income Taxation of U.S. Holders — The Domestication” constitutes
the opinion of Dykema Gossett PLLC, U.S. tax counsel to Oxbridge, insofar as it discusses the material U.S. federal income tax considerations
applicable to U.S. Holders of Class A Ordinary Shares and Oxbridge Warrants as a result of the Domestication, based on, and subject to,
customary assumptions, qualifications and limitations, and the assumptions, qualifications and limitations herein and in the opinion
included as Exhibit 8.1 hereto, as well as representations of Oxbridge. The U.S. federal income tax consequences of the Domestication
will depend primarily upon whether the Domestication qualifies as a “reorganization” within the meaning of Section 368(a)
of the Code.
Pursuant
to the Domestication, Oxbridge will change its jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands
and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (and in connection with the Domestication
will change its name to “Jet.AI”). The Domestication will qualify as a Reorganization described in Section 368(a)(1)(F) of
the Code.
Because
the Domestication qualifies as a Reorganization, for U.S. federal income tax purposes:
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Oxbridge
will be deemed to have (i) transferred all of its assets and liabilities to Jet.AI in exchange for all of the outstanding common
stock and warrants of Jet.AI, and immediately thereafter (ii) distributed the common stock and warrants of Jet.AI to the shareholders
and warrant holders of Oxbridge in liquidation of Oxbridge, and the taxable year of Oxbridge will end on the date of the Domestication; |
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subject
to certain rules discussed under “— U.S. Federal Income Taxation of U.S. Holders — Effects of Section 367(b)”
and “— U.S. Federal Income Taxation of U.S. Holders — Passive Foreign Investment Company Rules” below, a
U.S. Holder that exchanges its Class A Ordinary Shares for Jet.AI Common Stock and/or Oxbridge Warrants for Jet.AI Warrants
in the Domestication will not recognize any gain or loss on such exchange; |
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subject
to certain rules discussed under “— U.S. Federal Income Taxation of U.S. Holders — Effects of Section 367(b)”
and “— U.S. Federal Income Taxation of U.S. Holders — Passive Foreign Investment Company Rules” below, the
tax basis of a share of Jet.AI Common Stock or a Jet.AI Warrant, as applicable, received by a U.S. Holder in the Domestication
will be equal to the U.S. Holder’s adjusted tax basis in the Class A Ordinary Share or Oxbridge Warrant surrendered in exchange
therefor; and |
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the
holding period for a share of Jet.AI Common Stock or a Jet.AI Warrant, as applicable, received by a U.S. Holder will include
such U.S. Holder’s holding period for the Class A Ordinary Share or Oxbridge Warrant surrendered in exchange therefor. |
Because
the Domestication will occur immediately prior to the redemption of Jet.AI Common Stock described in the subsection of this proxy
statement/prospectus entitled “Information about Oxbridge — Redemption Rights for Holders of Public Shares,” U.S. Holders
exercising their redemption rights with respect to their Jet.AI Common Stock will be subject to the potential tax consequences
of the Domestication. All U.S. Holders considering exercising their redemption rights with respect to their Jet.AI Common Stock
are urged to consult with, and rely solely upon, their tax advisors with respect to the potential tax consequences to them of the Domestication
and exercise of redemption rights.
THE
RULES GOVERNING THE U.S. FEDERAL INCOME TAX TREATMENT OF THE DOMESTICATION ARE COMPLEX. U.S. HOLDERS OF OXBRIDGE PUBLIC SECURITIES ARE
URGED TO CONSULT WITH, AND RELY SOLELY UPON, THEIR TAX ADVISORS REGARDING THE POTENTIAL TAX CONSEQUENCES TO THEM OF THE DOMESTICATION,
INCLUDING IF IT WERE TO FAIL TO QUALIFY AS A REORGANIZATION.
Effects
of Section 367(b)
Section
367(b) of the Code applies to certain transactions involving foreign corporations that would otherwise not require shareholders to recognize
gain or loss, including the domestication of a foreign corporation in certain Reorganizations. When it applies, Section 367(b) requires
certain U.S. persons to recognize income in connection with transactions that otherwise would generally be tax-free. These rules may
apply with respect to U.S. Holders on the date of the Domestication, and because the Domestication will occur immediately prior to the
redemption of U.S. Holders that exercise redemption rights with respect to their Jet.AI Common Stock, U.S. Holders exercising
such redemption rights will be subject to the potential tax consequences of such rules as a result of the Domestication.
A.
U.S. Holders that Own at Least 10 Percent (by Vote or Value) of Oxbridge
A
U.S. Holder who on the date of the Domestication beneficially owns (actually or constructively, including as a result of the applicable
attribution rules that would take into account such U.S. Holder’s ownership of Oxbridge Warrants) 10% or more of the total combined
voting power of all classes of our shares entitled to vote or 10% or more of the total value of all classes of our shares (a “10%
U.S. Shareholder”) must include in income as a dividend the “all earnings and profits amount” as defined in U.S. Treasury
regulations. Complex attribution rules apply in determining whether a U.S. Holder is a 10% U.S. Shareholder and all U.S. Holders are
urged to consult with, and rely solely upon, their tax advisors with respect to these attribution rules.
A
10% U.S. Shareholder’s “all earnings and profits amount” with respect to its Class A Ordinary Shares is the net positive
earnings and profits of Oxbridge attributable to such public shares (as determined under U.S. Treasury regulations). U.S. Treasury regulations
provide that the “all earnings and profits amount” attributable to a shareholder’s block of shares is the ratably allocated
portion of the foreign corporation’s earnings and profits generated during the period the shareholder held the block of shares.
Oxbridge
does not expect to have significant cumulative earnings and profits through the date of the Domestication. If Oxbridge’s cumulative
net earnings and profits through the date of the Domestication is less than or equal to zero, then a U.S. Holder will not be required
to include in gross income an “all earnings and profits amount” with respect to its public shares. If Oxbridge’s cumulative
net earnings and profits are greater than zero through the date of the Domestication, a U.S. Holder would be required to include its
“all earnings and profits amount” in income as a deemed dividend. A U.S. Holder that is a corporation may, under certain
circumstances, effectively be exempt from taxation on a portion or all of the deemed dividend. U.S. Holders, including corporate shareholders
and shareholders who have made a QEF Election (as defined below), should consult with, and rely solely upon, their own tax advisors as
to the applicability of such rules in their particular circumstances.
B.
U.S. Holders that Own Less than 10 Percent (by Vote and Value) of Oxbridge
A
U.S. Holder who, on the date of the Domestication, beneficially owns (actually or constructively, including as a result of the applicable
attribution rules that would take into account such U.S. Holder’s ownership of Oxbridge Warrants) Class A Ordinary Shares with
a fair market value of at least $50,000 (but less than 10% of the total combined voting power of all classes of Oxbridge shares entitled
to vote and less than 10% of the total value of all classes of Oxbridge shares) will recognize gain (but not loss) with respect to the
Domestication or, in the alternative, may elect to recognize the “all earnings and profits amount” attributable to such U.S.
Holder, as described below.
Unless
a U.S. Holder makes the “all earnings and profits amount” election described herein, such U.S. Holder generally must recognize
gain (but not loss) with respect to its Jet.AI Common Stock received in the Domestication in an amount equal to the excess of
the fair market value of such Jet.AI Common Stock over the U.S. Holder’s adjusted tax basis in the Class A Ordinary Shares
surrendered in exchange therefor. Subject to the PFIC rules discussed below, such gain would be capital gain, and would be long-term
capital gain if the U.S. Holder held the Class A Ordinary Shares for longer than one year (subject to the suspension of the applicable
holding period for the reasons described in “— U.S. Federal Income Taxation of U.S. Holders — Gain or Loss on Sale
or Other Taxable Exchange or Disposition of Jet.AI Common Stock and Jet.AI Warrants” below).
In
lieu of recognizing any gain as described in the preceding paragraph, a U.S. Holder may elect to include in income the “all earnings
and profits amount” attributable to its Class A Ordinary Shares. There are, however, strict conditions for making this election.
The election must comply with applicable U.S. Treasury regulations and generally must include, among other things, (a) a statement that
the Domestication is a Section 367(b) exchange (within the meaning of the applicable U.S. Treasury regulations), (b) a complete description
of the Domestication, (c) a description of any stock, securities or other consideration transferred or received in the Domestication,
(d) a statement describing the amounts required to be taken into account for U.S. federal income tax purposes, (e) a statement that the
U.S. Holder is making the election that includes (i) a copy of the information that the U.S. Holder received from Jet.AI establishing
and substantiating the U.S. Holder’s “all earnings and profits amount” with respect to the U.S. Holder’s Class
A Ordinary Shares and (ii) a representation that the U.S. Holder has notified Jet.AI that the U.S. Holder is making the election and
(f) certain other information required to be furnished with the U.S. Holder’s U.S. federal income tax return or otherwise furnished
pursuant to the Code or the U.S. Treasury regulations.
The
election must be attached by the electing U.S. Holder to such U.S. Holder’s timely filed U.S. federal income tax return for the
year of the Domestication, and the U.S. Holder must send notice that it is making the election to Jet.AI no later than the date such
tax return is filed. Upon written request, Oxbridge will endeavor to provide to a U.S. Holder such information as the IRS may require,
including a PFIC annual information statement, in order to enable the U.S. Holder to make and maintain a QEF Election. There is no assurance,
however, that Oxbridge will timely provide such required information.
EACH
U.S. HOLDER IS URGED TO CONSULT WITH, AND RELY SOLELY UPON, ITS TAX ADVISOR REGARDING THE CONSEQUENCES TO IT OF MAKING THE ELECTION DESCRIBED
HEREIN AND THE APPROPRIATE FILING REQUIREMENTS WITH RESPECT TO SUCH ELECTION.
C.
U.S. Holders that Own Class A Ordinary Shares with a Fair Market Value of Less than $50,000
A
U.S. Holder who, on the date of the Domestication, beneficially owns (actually or constructively, including as a result of the applicable
attribution rules that would take into account such U.S. Holder’s ownership of Oxbridge Warrants) Class A Ordinary Shares with
a fair market value of less than $50,000 (as well as less than 10% of the total combined voting power of all classes of Oxbridge shares
entitled to vote and less than 10% of the total value of all classes of Oxbridge shares) generally will not be required to recognize
any gain or loss under Section 367(b) of the Code in connection with the Domestication or to include any part of the “all earnings
and profits amount” in income.
ALL
U.S. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE EFFECT OF SECTION 367(b) OF THE CODE TO THEIR PARTICULAR CIRCUMSTANCES.
Passive
Foreign Investment Company Rules
In
addition to the discussion under “— U.S. Federal Income Taxation of U.S. Holders — Effects of Section 367(b),”
the Domestication could be a taxable event for U.S. Holders under the PFIC provisions of the Code.
A.
PFIC Status of Oxbridge
In
general, a foreign (i.e., non-U.S.) corporation will be treated as a PFIC with respect to a U.S. Holder in any taxable year in
which, after applying certain look-through rules, either: (i) at least 75% of its gross income for such taxable year consists of passive
income (e.g., dividends, interest, rents (other than rents derived from the active conduct of a trade or business), and gains
from the disposition of passive assets); or (ii) the average percentage (ordinarily averaged quarterly over the year) by value of its
assets during such taxable year that produce or are held for the production of passive income is at least 50%.
Because
Oxbridge is a blank-check company with no current active business, based upon the composition of its income and assets, and upon review
of its financial statements, Oxbridge believes that it may be considered a PFIC for the 2022 taxable year and may be considered a PFIC
for its current taxable year (which is expected to end on the date of the Domestication).
B.
Effects of PFIC Rules on the Domestication
Section
1291(f) of the Code requires that, to the extent provided in U.S. Treasury regulations, a U.S. Holder that disposes of stock of a PFIC
recognizes gain notwithstanding any other provision of the Code. No final U.S. Treasury regulations are currently in effect under Section
1291(f) of the Code. However, proposed U.S. Treasury regulations under Section 1291(f) of the Code have been promulgated with a retroactive
effective date once they become final. If finalized (including retroactively after the date of the Domestication) in their currently
proposed form, such U.S. Treasury regulations may require taxable gain recognition by a U.S. Holder with respect to its exchange of Class
A Ordinary Shares and Oxbridge Warrants, as applicable, for Jet.AI Common Stock and Jet.AI Warrants in the Domestication if Oxbridge
were classified as a PFIC at any time during such U.S. Holder’s holding period for such Class A Ordinary Shares or Oxbridge Warrants,
as applicable. The tax on any such recognized gain would be imposed based on a complex set of computational rules. However, as discussed
in more detail below, a U.S. Holder may be able to avoid the PFIC gain and other tax consequences described below with respect to its
Class A Ordinary Shares (but not its Oxbridge Warrants) if such U.S. Holder either (i) is eligible to and makes a timely and valid QEF
Election (as defined and described below) in the first taxable year in which such U.S. Holder held (or was deemed to hold) Class A Ordinary
Shares and in which Oxbridge was classified as a PFIC or (ii) makes a Mark-to-Market Election with respect to its Class A Ordinary Shares.
Generally, neither election is available with respect to the Oxbridge Warrants.
Under
these rules:
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the
U.S. Holder’s gain would be allocated ratably over the U.S. Holder’s aggregate holding period for such U.S. Holder’s
Class A Ordinary Shares or Oxbridge Warrants; |
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the
amount of gain allocated to the U.S. Holder’s taxable year in which the U.S. Holder realized the gain, or to the portion of
the U.S. Holder’s holding period prior to the first day of Oxbridge’s taxable year in which Oxbridge was a PFIC, would
be taxed as ordinary income; and |
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the
amount of gain allocated to each of the other taxable years (or portions thereof) of the U.S. Holder would be subject to tax at the
highest rate of tax in effect for the U.S. Holder for that year, and an interest charge for the deemed deferral benefit would be
imposed with respect to the resulting tax attributable to each such other taxable year (or portion thereof). |
The
proposed U.S. Treasury regulations provide coordinating rules with Section 367(b) of the Code, whereby, if the gain recognition rule
of the proposed U.S. Treasury regulations under Section 1291(f) of the Code applies to a disposition of PFIC stock that results from
a transfer with respect to which Section 367(b) of the Code requires the shareholder to recognize gain or include an amount in income
as discussed under “— Effects of Section 367(b),” the gain realized on the transfer is taxable under the PFIC rules
discussed above, and the excess, if any, of the amount to be included in income under Section 367(b) of the Code over the gain realized
under Section 1291 of the Code is taxable as provided under Section 367(b) of the Code.
It
is not possible to predict whether, in what form and with what effective date the proposed U.S. Treasury regulations under Section 1291(f)
of the Code will become final. Therefore, U.S. Holders of Class A Ordinary Shares that have not made a timely QEF Election or a Mark-to-Market
Election and U.S. Holders of Oxbridge Warrants may, pursuant to the proposed U.S. Treasury regulations, be subject to taxation on the
Domestication to the extent their Class A Ordinary Shares or Oxbridge Warrants have a fair market value in excess of their tax basis.
C.
QEF Election with Respect to Class A Ordinary Shares
The
impact of the PFIC rules on a U.S. Holder with respect to its Class A Ordinary Shares (but not its Oxbridge Warrants, for which a QEF
Election is not available) will depend on whether such U.S. Holder is eligible to and makes a timely and valid election to treat Oxbridge
as a “qualified electing fund” under Section 1295 of the Code (which we refer to as a “QEF Election”) for the
first taxable year in which such U.S. Holder held (or was deemed to hold) Class A Ordinary Shares and Oxbridge is classified as a PFIC.
Generally, a QEF Election should be made on or before the due date for filing such U.S. Holder’s U.S. federal income tax return
for such taxable year. A QEF Election is made by an individual U.S. Holder (and, once made, can be revoked only with the consent of the
IRS) and generally requires such U.S. Holder to include annually in gross income its pro rata share of the ordinary earnings (as ordinary
income) and net capital gains (as long-term capital gain), if any, of Oxbridge, regardless of whether Oxbridge makes distributions to
such U.S. Holder. However, in order to comply with the QEF Election requirements, a U.S. Holder must receive a PFIC annual information
statement from Oxbridge. Upon written request, Oxbridge will endeavor to provide to a U.S. Holder such information as the IRS may require,
including a PFIC annual information statement, in order to enable the U.S. Holder to make and maintain a QEF Election. There is no assurance,
however, that Oxbridge will timely provide such required information.
D.
Mark-to-Market Election with Respect to Class A Ordinary Shares
The
impact of the PFIC rules on a U.S. Holder with respect to its Class A Ordinary Shares (but not its Oxbridge Warrants, for which a Mark-to-Market
Election, is not available) may also depend on whether such U.S. Holder is eligible to and makes a timely and valid “Mark-to-Market
Election” under Section 1296 of the Code with respect to its Class A Ordinary Shares. No assurance can be given that the Class
A Ordinary Shares are considered to be “marketable stock” (which generally would include stock that is regularly traded on
a national securities exchange that is registered with the Securities and Exchange Commission, including Nasdaq (on which the Class A
Ordinary Shares have been listed)) for purposes of the Mark-to-Market Election. If such an election is available and has been made by
a U.S. Holder, such U.S. Holder generally will not be subject to the PFIC rules described above. However, if the Mark-to-Market Election
is made by a U.S. Holder after the first taxable year of the U.S. Holder in which the U.S. Holder holds (or is deemed to hold) Class
A Ordinary Shares and in which Oxbridge was classified as a PFIC, then the PFIC rules will continue to apply to certain dispositions
of, distributions on and other amounts taxable with respect to Class A Ordinary Shares.
THE
PFIC RULES (INCLUDING THE RULES WITH RESPECT TO THE QEF ELECTION AND THE MARK-TO-MARKET ELECTION) ARE VERY COMPLEX AND AFFECTED BY VARIOUS
FACTORS IN ADDITION TO THOSE DESCRIBED ABOVE. THEIR APPLICATION IS UNCERTAIN. U.S. HOLDERS ARE STRONGLY URGED TO CONSULT WITH, AND RELY
SOLELY UPON, THEIR TAX ADVISORS TO DETERMINE THE APPLICATION OF THE PFIC RULES TO THEM IN THEIR PARTICULAR CIRCUMSTANCES AND ANY RESULTING
TAX CONSEQUENCES.
THE
RULES GOVERNING THE U.S. FEDERAL INCOME TAX TREATMENT OF THE DOMESTICATION ARE COMPLEX. U.S. HOLDERS OF OXBRIDGE PUBLIC SECURITIES ARE
URGED TO CONSULT WITH, AND RELY SOLELY UPON, THEIR TAX ADVISORS REGARDING THE POTENTIAL TAX CONSEQUENCES TO THEM OF THE DOMESTICATION.
Redemption
of Jet.AI Common Stock
In
the event that a U.S. Holder’s Jet.AI Common Stock is redeemed pursuant to the redemption provisions described in the subsection
of this proxy statement/prospectus entitled “Information about Oxbridge — Redemption Rights for Holders of Public Shares,”
the treatment of the redemption for U.S. federal income tax purposes will depend on whether it qualifies as a sale of the Jet.AI Common
Stock under Section 302 of the Code. If the redemption qualifies as a sale of Jet.AI Common Stock, the U.S. Holder will be
treated as described under “— U.S. Federal Income Taxation of U.S. Holders — Gain or Loss on Sale or Other Taxable
Exchange or Disposition of Jet.AI Common Stock and Jet.AI Warrants” below. If the redemption does not qualify as a sale
of Jet.AI Common Stock, the U.S. Holder will be treated as receiving a distribution from Jet.AI with the tax consequences described
below under “— U.S. Federal Income Taxation of U.S. Holders — Distributions Treated as Dividends.”
Whether
a redemption qualifies for sale treatment will depend largely on the total number of shares of Jet.AI stock treated as held by the U.S.
Holder (including any stock constructively owned by the U.S. Holder as a result of owning Jet.AI Warrants or otherwise) relative to all
of the shares of Jet.AI stock outstanding both before and after the redemption. The redemption of Jet.AI Common Stock generally
will be treated as a sale of Jet.AI Common Stock (rather than as a distribution from Jet.AI) if the redemption satisfies one of
the following tests (the “redemption sale tests”): (i) it is “substantially disproportionate” with respect to
the U.S. Holder, (ii) it results in a “complete termination” of the U.S. Holder’s interest in Jet.AI or (iii) it is
“not essentially equivalent to a dividend” with respect to the U.S. Holder. In determining whether any of the redemption
sale tests is satisfied, a U.S. Holder must take into account not only stock actually owned by the U.S. Holder, but also shares of our
stock that are “constructively” owned by it. A U.S. Holder may constructively own (i) stock owned by certain related individuals
or entities in which the U.S. Holder has an interest or that have an interest in such U.S. Holder and (ii) any stock the U.S. Holder
has a right to acquire by exercise of an option, which would generally include the Jet.AI Common Stock which could be acquired
pursuant to the exercise of the Jet.AI Warrants.
In
order to meet the “substantially disproportionate” test, the percentage of Jet.AI’s outstanding voting stock actually
and constructively owned by the U.S. Holder immediately following the redemption of our Jet.AI Common Stock must, among other
requirements, be less than 80% of the percentage of Jet.AI’s outstanding voting stock actually and constructively owned by the
U.S. Holder immediately before the redemption. Prior to the Business Combination, the Jet.AI Common Stock may not be treated as
voting stock for this purpose and, consequently, this substantially disproportionate test may not be applicable. There will be a “complete
termination” of a U.S. Holder’s interest if either (i) all of the shares of our stock both actually and constructively owned
by the U.S. Holder are redeemed or (ii) all of the shares of our stock actually owned by the U.S. Holder are redeemed, the U.S. Holder
is eligible to waive and effectively waives in accordance with specific rules the constructive attribution of stock owned by certain
family members, and the U.S. Holder does not constructively own any other shares of our stock (including as a result of owning Jet.AI
Warrants). The redemption of Jet.AI Common Stock will not be “essentially equivalent to a dividend” if a U.S. Holder’s
redemption results in a “meaningful reduction” of the U.S. Holder’s proportionate interest in Jet.AI. Whether the redemption
will result in a meaningful reduction in a U.S. Holder’s proportionate interest in Jet.AI will depend on the particular facts and
circumstances, but the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority
stockholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.”
If
none of the redemption sale tests is satisfied, the redemption will be treated as a distribution from Jet.AI and the tax considerations
will be as described under “— U.S. Federal Income Taxation of U.S. Holders — Distributions Treated as Dividends”
below. After the application of those rules, any remaining tax basis of the U.S. Holder in the redeemed Jet.AI Common Stock will
be added to the U.S. Holder’s adjusted tax basis in its remaining stock or, if it has none, to the U.S. Holder’s adjusted
tax basis in its Jet.AI Warrants or possibly in other shares of our stock constructively owned by it.
U.S.
Holders who actually or constructively own five percent (or if our Jet.AI Common Stock is not then publicly traded, one percent)
or more of our stock (by vote or value) may be subject to special reporting requirements with respect to a redemption of our Jet.AI
Common Stock. A U.S. Holder should consult with, and rely solely upon, its own tax advisor with respect to its reporting requirements.
The
rules governing the U.S. federal income tax treatment of redemptions are complex and the determination of whether a redemption will be
treated as a sale of Jet.AI Common Stock or as a distribution with respect to such stock is made on a holder-by-holder basis.
Additionally, because the Domestication will occur immediately prior to the redemption of U.S. Holders that exercise redemption rights
with respect to their Jet.AI Common Stock, U.S. Holders exercising such redemption rights will be subject to the potential tax
consequences of the Domestication. All U.S. Holders considering exercising redemption rights with respect to their Jet.AI Common Stock
are urged to consult with, and rely solely upon, their tax advisors with respect to the potential tax consequences to them of the
Domestication and exercise of redemption rights.
The
Business Combination
The
discussion under this heading “— U.S. Federal Income Taxation of U.S. Holders — The Business Combination” constitutes
the opinion of Dykema Gossett PLLC, U.S. tax counsel to Jet.AI, insofar as it discusses the material U.S. federal income tax considerations
applicable to U.S. Holders of Jet.AI Common Stock and Jet.AI Warrants as a result of the Business Combination, based on, and subject
to, customary assumptions, qualifications and limitations, and the assumptions, qualifications and limitations herein and in the opinion
included as Exhibit 8.1 hereto, as well as representations of Jet.AI.
U.S.
Holders of Jet.AI Common Stock and Jet.AI Warrants will retain their shares of Jet.AI Common Stock and Jet.AI Warrants
in the Business Combination, will not receive any consideration in connection with the Business Combination and will not receive any
additional shares of Jet.AI Common Stock or additional Jet.AI Warrants in the Business Combination. As a result, there will be
no material U.S. federal income tax consequences to U.S. Holders of Jet.AI Common Stock and Jet.AI Warrants as a result of the
Business Combination, regardless of whether the Business Combination qualifies as a Reorganization. Furthermore, although the Business
Combination is intended to qualify as a Reorganization, and Jet Token and Jet.AI intend to report the Business Combination consistent
with such qualification, such treatment is not a condition to Jet Token’s or Jet.AI’s obligation to complete the Business
Combination.
U.S.
HOLDERS OF JET.AI COMMON STOCK AND JET.AI WARRANTS SHOULD CONSULT WITH, AND RELY SOLELY UPON, THEIR TAX ADVISORS WITH RESPECT
TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS, AS WELL AS ANY TAX CONSEQUENCES OF THE BUSINESS
COMBINATION UNDER THE LAWS OF ANY STATE, LOCAL, NON-U.S. OR OTHER TAXING JURISDICTION.
Tax
Characterization of Distributions with Respect to Jet.AI Common Stock
If
Jet.AI pays distributions of cash or other property to U.S. Holders of shares of Jet.AI Common Stock, such distributions generally
will constitute dividends for U.S. federal income tax purposes to the extent paid from Jet.AI’s current or accumulated earnings
and profits, as determined under U.S. federal income tax principles. Distributions in excess of current and accumulated earnings and
profits will be treated as a non-taxable return of capital to the extent of the U.S. Holder’s adjusted tax basis in its Jet.AI
Common Stock, that will be applied against and reduce (but not below zero) the U.S. Holder’s adjusted tax basis in its Jet.AI
Common Stock. Any remaining portion of the distribution will be treated as gain from the sale or exchange of Jet.AI Common Stock
and will be treated as described under “— U.S. Federal Income Taxation of U.S. Holders — Gain or Loss on
Sale or Other Taxable Exchange or Disposition of Jet.AI Common Stock and Jet.AI Warrants” below.
Possible
Constructive Distributions with Respect to Jet.AI Warrants
The
terms of the Jet.AI Warrants provide for an adjustment to the number of shares of Jet.AI Common Stock for which Jet.AI Warrants
may be exercised or to the exercise price of the Jet.AI Warrants in certain events. An adjustment which has the effect of preventing
dilution generally is not taxable. U.S. Holders of the Jet.AI Warrants would, however, be treated as receiving a constructive distribution
from Jet.AI if, for example, the adjustment increases the warrant holders’ proportionate interest in Jet.AI’s assets or earnings
and profits (e.g., through an increase in the number of shares of Jet.AI Common Stock that would be obtained upon exercise or
through a decrease in the exercise price of the Jet.AI Warrant) as a result of a distribution of cash or other property to the holders
of shares of Jet.AI Common Stock. Any such constructive distribution would be treated in the same manner as if U.S. Holders of
Jet.AI Warrants received a cash distribution from Jet.AI generally equal to the fair market value of the increased interest and would
be taxed in a manner similar to distributions to U.S. Holders of Jet.AI Common Stock described herein. See “— U.S.
Federal Income Taxation of U.S. Holders — Tax Characterization of Distributions with Respect to Jet.AI Common Stock”
above. For certain information reporting purposes, Jet.AI is required to determine the date and amount of any such constructive distributions.
Proposed U.S. Treasury regulations, which Jet.AI may rely on prior to the issuance of final regulations, specify how the date and amount
of any such constructive distributions are determined.
Distributions
Treated as Dividends
Any
portion of a distribution that is treated as a dividend paid by Jet.AI to a U.S. Holder that is treated as a corporation for U.S. federal
income tax purposes generally will qualify for the 50% dividends received deduction if the requisite holding period is satisfied. The
portion of any dividend that is nontaxable to a corporate U.S. Holder under the dividends received deduction will result in a reduction
of the U.S. Holder’s basis in its shares if the dividend is classified as an “extraordinary dividend” which reduction
would increase the amount of gain or decrease the amount of loss recognized by the U.S. Holder in connection with a disposition of its
shares. With certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest
deduction limitations), and provided certain holding period requirements are met, any portion of a distribution that is treated as a
dividend paid by Jet.AI to a non-corporate U.S. Holder generally will constitute a “qualified dividend” that will be subject
to U.S. federal income tax at the lower applicable long-term capital gains rate. It is unclear whether the redemption rights with respect
to the Jet.AI Common Stock described in this proxy statement/prospectus may be deemed to be a limitation of a stockholder’s
risk of loss and prevent a U.S. Holder from satisfying the applicable holding period requirements, and if the Domestication did not qualify
as a Reorganization, the holding period of each U.S. Holder’s shares would begin the day after the Domestication. If the applicable
holding period requirements are not satisfied, a corporate U.S. Holder may not be able to qualify for the dividends received deduction
and would have taxable income equal to the entire dividend amount, and a non-corporate U.S. Holder may be subject to tax on the dividend
at regular ordinary income tax rates instead of the preferential income tax rate that applies to qualified dividend income. U.S. Holders
should consult with, and rely solely upon, their tax advisors regarding the availability of the dividends received deduction or the lower
preferential income tax rate for qualified dividend income, as the case may be.
Gain
or Loss on Sale or Other Taxable Exchange or Disposition of Jet.AI Common Stock and Jet.AI Warrants
Upon
a sale or other taxable disposition of Jet.AI Common Stock or Jet.AI Warrants (which in general would include a redemption of
Jet.AI Common Stock or Jet.AI Warrants that is treated as a sale of such securities as described below), a U.S. Holder generally
will recognize capital gain or loss in an amount equal to the difference between the amount realized and the U.S. Holder’s adjusted
tax basis with respect to its Jet.AI Common Stock or Jet.AI Warrants. Generally, the amount of capital gain or loss recognized
by a U.S. Holder will be an amount equal to the difference between (i) the sum of the amount of cash and the fair market value of any
property received in such disposition (or, if the Jet.AI Common Stock or Jet.AI Warrants are held as part of Jet.AI Units at the
time of the disposition, the portion of the amount realized on such disposition that is allocated to the Jet.AI Common Stock or
Jet.AI Warrants included in the Jet.AI Units) and (ii) the U.S. Holder’s adjusted tax basis in the relevant Jet.AI Common Stock
or Jet.AI Warrants. A U.S. Holder’s adjusted tax basis in its Jet.AI Common Stock or Jet.AI Warrants generally will
equal the U.S. Holder’s acquisition cost of the Class A Ordinary Shares or Oxbridge Warrants exchanged therefore (see the tax basis
discussion above under the caption “— U.S. Federal Income Taxation of U.S. Holders — The Domestication”)
or, as discussed below, the U.S. Holder’s initial basis for the Jet.AI Common Stock received upon exercise of Jet.AI Warrants,
less, in the case of Jet.AI Common Stock, any prior distributions paid to such U.S. Holder that were treated as a return of capital
for U.S. federal income tax purposes (as discussed above).
Any
such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period for the Jet.AI
Common Stock or Jet.AI Warrants, as applicable, so disposed of exceeds one year. It is unclear, however, whether the redemption rights
with respect to the Jet.AI Common Stock described in this proxy statement/prospectus may be deemed to be a limitation of a stockholder’s
risk of loss and suspend the running of the applicable holding period of such stock for this purpose. If the running of the holding period
for the Jet.AI Common Stock is suspended, non-corporate U.S. Holders may not be able to satisfy the one-year holding period requirement
for long-term capital gain treatment with respect to Jet.AI Common Stock. If the one-year holding period requirement is not satisfied,
any gain on a sale or other taxable disposition of the Jet.AI Common Stock or Jet.AI Warrants, as applicable, would be subject
to short-term capital gain treatment and would be taxed at regular ordinary income tax rates. Long-term capital gains recognized by non-corporate
U.S. Holders will be eligible to be taxed at reduced rates. The deductibility of capital losses is subject to limitations.
Cash
Exercise of a Jet.AI Warrant
Except
as discussed below with respect to the cashless exercise of a Jet.AI Warrant, a U.S. Holder generally will not recognize gain or loss
on the acquisition of Jet.AI Common Stock upon the exercise of a Jet.AI Warrant for cash. The U.S. Holder’s tax basis in
its Jet.AI Common Stock received upon exercise of a Jet.AI Warrant generally will be an amount equal to the sum of the U.S. Holder’s
initial investment in the Oxbridge Warrant (see the tax basis discussion above under the caption “— U.S. Federal Income
Taxation of U.S. Holders — The Domestication”) and the exercise price of such Jet.AI Warrant. It is unclear whether a U.S.
Holder’s holding period for the Jet.AI Common Stock received upon exercise of the Jet.AI Warrant will commence on the date
of exercise of the Jet.AI Warrant or the immediately following date. In either case, the holding period will not include the period during
which the U.S. Holder held the Jet.AI Warrant.
Cashless
Exercise of a Jet.AI Warrant
The
tax characterization of a cashless exercise of a Jet.AI Warrant are not clear under current tax law. Due to the absence of authority
on the U.S. federal income tax treatment of a cashless exercise, there can be no assurance which, if any, of the alternative tax characterizations
and resultant tax consequences would be adopted by the IRS or upheld by a court of law. Accordingly, U.S. Holders should consult with,
and rely solely upon, their tax advisors regarding the tax consequences of a cashless exercise.
A
cashless exercise could potentially be characterized as any of the following for U.S. federal income tax purposes: (i) not a realization
event and thus tax-deferred, (ii) a realization event that qualifies as a tax-deferred “recapitalization,” or (iii) a taxable
realization event. While not free from doubt, Jet.AI intends to treat any cashless exercise of a Jet.AI Warrant occurring after its giving
notice of an intention to redeem the Jet.AI Warrant for cash as permitted under the terms of the Warrant Agreement as if Jet.AI redeemed
such Jet.AI Warrant for shares in a cashless redemption qualifying as a recapitalization for U.S. federal income tax purposes. However,
there is some uncertainty regarding Jet.AI’s intended tax treatment, and it is possible that a cashless exercise could be characterized
differently. Accordingly, the tax consequences of all three characterizations are generally described below. U.S. Holders should consult
with and rely solely upon their tax advisors regarding the tax consequences of a cashless exercise.
If
a cashless exercise were characterized as either not a realization event or as a realization event that qualifies as a recapitalization,
a U.S. Holder should not recognize any gain or loss on the exchange of Jet.AI Warrants for shares of Jet.AI Common Stock. A U.S.
Holder’s basis in the shares of Jet.AI Common Stock received would generally equal the U.S. Holder’s aggregate basis
in the exchanged Jet.AI Warrants. If the cashless exercise were not a realization event, it is unclear whether a U.S. Holder’s
holding period in the Jet.AI Common Stock would be treated as commencing on the date of exchange of the Jet.AI Warrants or on
the immediately following date, but the holding period would not include the period during which the U.S. Holder held the Jet.AI Warrants.
On the other hand, if the cashless exercise were characterized as a realization event that qualifies as a recapitalization, the holding
period of the Jet.AI Common Stock would include the holding period of the warrants exercised therefor.
If
the cashless exercise were treated as a realization event that does not qualify as a recapitalization, however, the cashless exercise
could be treated in whole or in part as a taxable exchange in which gain or loss would be recognized by the U.S. Holder. For example,
a portion of the Jet.AI Warrants to be exercised on a cashless basis could be deemed to have been surrendered in payment of the exercise
price of the remaining portion of such warrants, which would be deemed to be exercised. In such a case, a U.S. Holder would effectively
be deemed to have sold a number of Jet.AI Warrants having an aggregate value equal to the exercise price of the remaining Jet.AI Warrants
deemed exercised. The U.S. Holder would recognize capital gain or loss in an amount generally equal to the difference between the value
of the portion of the warrants deemed sold and its adjusted tax basis in such warrants (generally in the manner described above under
“— U.S. Federal Income Taxation of U.S. Holders — Gain or Loss on Sale or Other Taxable Exchange or Disposition of
Jet.AI Common Stock and Jet.AI Warrants”), and the U.S. Holder’s tax basis in the Jet.AI Common Stock received
would generally equal the sum of the U.S. Holder’s tax basis in the remaining Jet.AI Warrants deemed exercised and the exercise
price of such warrants. It is unclear whether a U.S. Holder’s holding period for the Jet.AI Common Stock would commence
on the date of exercise of the Jet.AI Warrants or on the date following the date of exercise of the Jet.AI Warrants, but the holding
period would not include the period during which the U.S. Holder held the Jet.AI Warrants.
Redemption
or Repurchase of Warrants for Cash
If
Jet.AI redeems the Jet.AI Warrants for cash as permitted under the terms of the Warrant Agreement or if Jet.AI repurchases Jet.AI Warrants
in an open market transaction, such redemption or repurchase generally will be treated as a taxable disposition to the U.S. Holder, taxed
as described under “— U.S. Federal Income Taxation of U.S. Holders — Gain or Loss on Sale or Other Taxable Exchange
or Disposition of Jet.AI Common Stock and Jet.AI Warrants” above.
Expiration
of a Jet.AI Warrant
If
a Jet.AI Warrant is allowed to expire unexercised, a U.S. Holder generally will recognize a capital loss equal to such holder’s
tax basis in the Jet.AI Warrant (see the tax basis discussion above under the caption “— U.S. Federal Income Taxation
of U.S. Holders — The Domestication”). The deductibility of capital losses is subject to certain limitations.
Information
Reporting and Backup Withholding
Information
reporting requirements generally will apply to dividends paid to a U.S. Holder and to the proceeds from the sale or other disposition
of Jet.AI Units, Jet.AI Common Stock and Jet.AI Warrants, unless the U.S. Holder is an exempt recipient and certifies to such
exempt status. Backup withholding may apply to such payments if the U.S. Holder fails to provide a taxpayer identification number or
a certification of exempt status or has been notified by the IRS that it is subject to backup withholding (and such notification has
not been withdrawn).
Backup
withholding is not an additional tax. Rather, the U.S. federal income tax liability (if any) of persons subject to backup withholding
will be reduced by the amount of tax withheld. If backup withholding results in an overpayment of taxes, a refund generally may be obtained,
provided that the required information is timely furnished to the IRS.
U.S.
Federal Income Taxation of Non-U.S. Holders
This
section applies to you if you are a “Non-U.S. Holder.”
The
Domestication
Oxbridge
does not expect the Domestication to result in any material U.S. federal income tax consequences to Non-U.S. Holders of Class A Ordinary
Shares and Oxbridge Warrants.
NON-U.S.
HOLDERS SHOULD CONSULT WITH, AND RELY SOLELY UPON, THEIR TAX ADVISORS TO DETERMINE THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF
THE DOMESTICATION.
Redemption
of Jet.AI Common Stock
The
characterization for U.S. federal income tax purposes of the redemption of a Non-U.S. Holder’s Jet.AI Common Stock pursuant
to the redemption provisions described in the subsection of this proxy statement/prospectus entitled “Information about Oxbridge
— Redemption Rights for Holders of Public Shares,” generally will correspond to the U.S. federal income tax characterization
of such a redemption of a U.S. Holder’s Jet.AI Common Stock, as described under “— U.S. Federal Income Taxation
of U.S. Holders — Redemption of Jet.AI Common Stock” above, and the consequences of the redemption to the Non-U.S.
Holder will correspond to that described below in “— U.S. Federal Income Taxation of U.S. Holders — Distributions
Treated as Dividends” and “— U.S. Federal Income Taxation of U.S. Holders — Gain or Loss on Sale or Other
Taxable Exchange or Disposition of Jet.AI Common Stock and Jet.AI Warrants,” as applicable. It is possible that because
the applicable withholding agent may not be able to determine the proper characterization of a redemption of a Non-U.S. Holder’s
Jet.AI Common Stock, the withholding agent might treat the redemption as a distribution subject to withholding tax.
The
Business Combination
The
discussion under this heading “— U.S. Federal Income Taxation of Non-U.S. Holders — The Business Combination”
constitutes the opinion of Dykema Gossett PLLC, U.S. tax counsel to Jet.AI, insofar as it discusses the material U.S. federal income
tax considerations applicable to Non-U.S. Holders of Jet.AI Common Stock and Jet.AI Warrants as a result of the Business Combination,
based on, and subject to, customary assumptions, qualifications and limitations, and the assumptions, qualifications and limitations
herein and in the opinion included as Exhibit 8.1 hereto, as well as representations of Jet.AI.
The
material U.S. federal income tax consequences to Non-U.S. Holders of Jet.AI Common Stock and Jet.AI Warrants as a result of the
Business Combination, regardless of whether the Business Combination qualifies as a Reorganization, will be the same as those described
in “— U.S. Federal Income Taxation of U.S. Holders — The Business Combination” above.
NON-U.S.
HOLDERS OF JET.AI COMMON STOCK AND JET.AI WARRANTS SHOULD CONSULT WITH, AND RELY SOLELY UPON, THEIR TAX ADVISORS WITH RESPECT
TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS, AS WELL AS ANY TAX CONSEQUENCES OF THE BUSINESS
COMBINATION UNDER THE LAWS OF ANY STATE, LOCAL, NON-U.S. OR OTHER TAXING JURISDICTION.
Tax
Characterization of Distributions with Respect to Jet.AI Common Stock
The
determination of the extent to which a distribution will be treated as a dividend, return of capital or gain from the sale of stock is
generally the same for Non-U.S. Holders as that described in “— U.S. Federal Income Taxation of U.S. Holders — Tax
Characterization of Distributions with Respect to Jet.AI Common Stock.” To the extent a distribution constitutes gain from
the sale of Jet.AI Common Stock, see “— U.S. Federal Income Taxation of Non-U.S. Holders — Gain or Loss on Sale
or Other Taxable Exchange or Disposition of Jet.AI Common Stock and Warrants” below, and to the extent such distribution
constitutes a dividend, see “— U.S. Federal Income Taxation of Non-U.S. Holders — Distributions Treated as Dividends.”
Possible
Constructive Distributions with Respect to Jet.AI Warrants
The
determination for Non-U.S. Holders of whether a constructive distribution from us has occurred as a result of an adjustment to the number
of shares of Jet.AI Common Stock for which Jet.AI Warrants may be exercised or to the exercise price of the Jet.AI Warrants in
certain events is generally the same as the determination for U.S. Holders as described in “— U.S. Federal Income Taxation
of U.S. Holders — Possible Constructive Distributions with Respect to Jet.AI Warrants.” To the extent such adjustment is
treated as a constructive distribution, see “— U.S. Federal Income Taxation of Non-U.S. Holders — Tax Characterization
of Distributions with Respect to Jet.AI Common Stock” for the consequences of such characterization.
Distributions
Treated as Dividends
Subject
to the withholding requirements under FATCA (as defined below) and other than with respect to effectively connected dividends, each of
which is discussed below, any distribution treated as a dividend paid to a Non-U.S. Holder on its Jet.AI Common Stock generally
will be subject to U.S. withholding tax at the rate of 30% of the gross amount of the distribution (unless an applicable income tax treaty
provides for a lower rate). To receive the benefit of a reduced treaty rate, a Non-U.S. Holder must provide the applicable withholding
agent with an IRS Form W-8BEN or IRS Form W-8BEN-E (or other applicable or successor form) certifying qualification for the reduced rate.
In the case of any constructive dividend, it is possible that this tax would be withheld from any amount owed to a Non-U.S. Holder by
the applicable withholding agent, including cash distributions on other property or sale proceeds from warrants or other property subsequently
paid or credited to such Holder.
Any
portion of a distribution that is treated as a dividend paid to a Non-U.S. Holder that is effectively connected with a trade or business
conducted by the Non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is treated as attributable
to a permanent establishment maintained by the Non-U.S. Holder in the United States) generally will be taxed on a net income basis at
the rates and in the manner generally applicable to United States persons. Such effectively connected dividends will not be subject to
U.S. withholding tax if the Non-U.S. Holder satisfies certain certification requirements by providing the applicable withholding agent
with a properly executed IRS Form W-8ECI certifying eligibility for exemption. If the Non-U.S. Holder is a corporation for U.S. federal
income tax purposes, it may also be subject to a branch profits tax (at a 30% rate or such lower rate as specified by an applicable income
tax treaty) on its effectively connected earnings and profits (as adjusted for certain items), which will include effectively connected
dividends.
Gain
or Loss on Sale or Other Taxable Exchange or Disposition of Jet.AI Common Stock and Jet.AI Warrants
Subject
to the discussion below under “— U.S. Federal Income Taxation of Non-U.S. Holders — Information Reporting and
Backup Withholding,” a Non-U.S. Holder generally will not be subject to U.S. federal income or withholding tax on any gain realized
upon the sale or other disposition of Jet.AI Common Stock or Jet.AI Warrants (including an expiration or redemption of Jet.AI
Warrants) unless:
|
● |
the
Non-U.S. Holder is an individual who is present in the United States for a period or periods aggregating 183 days or more during
the calendar year in which the sale or disposition occurs and certain other conditions are met; |
|
|
|
|
● |
such
gain is effectively connected with a trade or business conducted by the Non-U.S. Holder in the United States (and, if required by
an applicable income tax treaty, is treated as attributable to a permanent establishment maintained by the Non-U.S. Holder in the
United States); or |
|
|
|
|
● |
Jet.AI
Common Stock and Jet.AI Warrants constitute
United States real property interests by reason of Jet.AI’s status as a “United States real property holding corporation”
(a “USRPHC”) for U.S. federal income tax purposes and, as a result, such gain is treated as effectively connected with
a trade or business conducted by the Non-U.S. Holder in the United States. |
A
Non-U.S. Holder described in the first bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower
rate as specified by an applicable income tax treaty) on the amount of such gain, which generally may be offset by U.S. source capital
losses.
A
Non-U.S. Holder whose gain is described in the second bullet point above or, subject to the exceptions described in the next paragraph,
the third bullet point above, generally will be taxed on a net income basis at the rates and in the manner generally applicable to United
States persons unless an applicable income tax treaty provides otherwise. If the Non-U.S. Holder is a corporation for U.S. federal income
tax purposes whose gain is described in the second bullet point above, such gain would also be included in its effectively connected
earnings and profits (as adjusted for certain items), which may be subject to a branch profits tax (at a 30% rate or such lower rate
as provided under an applicable income tax treaty).
Generally,
a corporation is a USRPHC if the fair market value of its United States real property interests equals or exceeds 50% of the sum of the
fair market value of its worldwide real property interests and its other assets used or held for use in a trade or business, as determined
for U.S. federal income tax purposes. Jet.AI does not believe that it will be a USRPHC for U.S. federal income tax purposes, and Jet.AI
does not expect to become a USRPHC for the foreseeable future. However, in the event that Jet.AI were to become a USRPHC, as long as
the Jet.AI Common Stock continues to be “regularly traded on an established securities market” (within the meaning
of the U.S. Treasury regulations, referred to herein as “regularly traded”), a Non-U.S. Holder that actually or constructively
owns, or owned at all times during the shorter of the five-year period ending on the date of the disposition or the Non-U.S. Holder’s
holding period for the applicable security, (i) 5% or less of the Jet.AI Common Stock and (ii) 5% or less of the Jet.AI Warrants,
provided the warrants are considered to be regularly traded, as applicable, will not be treated as disposing of a United States real
property interest and will not be taxable on gain realized on the disposition thereof as a result of Jet.AI’s status as a USRPHC.
It is unclear how a Non-U.S. Holder’s ownership of Jet.AI Warrants will affect the determination of whether such Non-U.S. Holder
owns more than 5% of the Jet.AI Common Stock. In addition, special rules may apply in the case of a disposition of Jet.AI Warrants
if the Jet.AI Common Stock is considered to be regularly traded, but such other securities are not considered to be regularly
traded. Jet.AI can provide no assurance as to its future status as a USRPHC or as to whether the Jet.AI Common Stock or Jet.AI
Warrants will be treated as regularly traded. If Jet.AI were to become a USRPHC and its Jet.AI Common Stock were not considered
to be regularly traded on an established securities market, a Non-U.S. Holder (regardless of the percentage of Jet.AI Securities owned)
would be treated as disposing of a United States real property interest and would be subject to U.S. federal income tax on a taxable
disposition of Jet.AI Common Stock, Jet.AI Units and Jet.AI Warrants (as described in the preceding paragraph), and a 15% withholding
tax would apply to the gross proceeds from any such disposition.
Non-U.S.
Holders are encouraged to consult with, and rely solely upon, their tax advisors regarding the tax consequences related to ownership
in a USRPHC.
Exercise
or Redemption of a Jet.AI Warrant
The
U.S. federal income tax characterization of a Non-U.S. Holder’s exercise of a Jet.AI Warrant generally will correspond to the U.S.
federal income tax characterization of the exercise of a Jet.AI Warrant by a U.S. Holder, as described under “— U.S. Federal
Income Taxation of U.S. Holders — Cash Exercise of a Jet.AI Warrant” or “— U.S. Federal Income Taxation of U.S.
Holders — Cashless Exercise of a Jet.AI Warrant” above, as the case may be. To the extent a cashless exercise is characterized
as a taxable exchange, the consequences would be similar to those described above in “— U.S. Federal Income Taxation of Non-U.S.
Holders — Gain or Loss on Sale or Other Taxable Exchange or Disposition of Jet.AI Common Stock and Jet.AI Warrants.”
The U.S. federal income tax treatment for a Non-U.S. Holder of a redemption of Jet.AI Warrants for cash as permitted under the terms
of the Warrant Agreement (or if Jet.AI purchases Jet.AI Warrants in an open market transaction) generally will correspond to that described
above in “— U.S. Federal Income Taxation of Non-U.S. Holders — Gain or Loss on Sale or Other Taxable Exchange or Disposition
of Jet.AI Common Stock and Jet.AI Warrants.”
Expiration
of a Jet.AI Warrant
The
U.S. federal income tax treatment of the expiration of a Jet.AI Warrant held by a Non-U.S. Holder generally will correspond to the U.S.
federal income tax treatment of the expiration of a Jet.AI Warrant held by a U.S. Holder, as described under “— U.S. Federal
Income Taxation of U.S. Holders — Expiration of a Jet.AI Warrant” above.
Information
Reporting and Backup Withholding
Any
dividends paid to a Non-U.S. Holder must be reported annually to the IRS and to the Non-U.S. Holder. Copies of these information returns
may be made available to the tax authorities in the country in which the Non-U.S. Holder resides or is established. Payments of dividends
to a Non-U.S. Holder generally will not be subject to backup withholding if the Non-U.S. Holder establishes an exemption by properly
certifying its non-U.S. status on an IRS Form W-8BEN or IRS Form W-8BEN-E (or other applicable or successor form).
Payments
of the proceeds from a sale or other disposition by a Non-U.S. Holder of Jet.AI Units, Jet.AI Common Stock and Jet.AI Warrants
effected by or through a U.S. office of a broker generally will be subject to information reporting and backup withholding (at the applicable
rate) unless the Non-U.S. Holder establishes an exemption by properly certifying its non-U.S. status on an IRS Form W-8BEN or IRS Form
W-8BEN-E (or other applicable or successor form) and certain other conditions are met. Information reporting and backup withholding generally
will not apply to any payment of the proceeds from a sale or other disposition of Jet.AI Units, Jet.AI Common Stock and Jet.AI
Warrants effected outside the United States by a non-U.S. office of a broker. However, unless such broker has documentary evidence in
its records that the Non-U.S. Holder is not a United States person and certain other conditions are met, or the Non-U.S. Holder otherwise
establishes an exemption, information reporting will apply to a payment of the proceeds of the disposition of Jet.AI Units, Jet.AI
Common Stock or Jet.AI Warrants effected outside the United States by such a broker if it has certain relationships within the United
States.
Backup
withholding is not an additional tax. Rather, the U.S. federal income tax liability (if any) of persons subject to backup withholding
will be reduced by the amount of tax withheld. If backup withholding results in an overpayment of taxes, a refund generally may be obtained,
provided that the required information is timely furnished to the IRS.
NON-U.S.
HOLDERS SHOULD CONSULT WITH, AND RELY SOLELY UPON, THEIR TAX ADVISORS TO DETERMINE THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF
THEIR OWNERSHIP OF JET.AI SECURITIES FOLLOWING THE BUSINESS COMBINATION.
Additional
Withholding Requirements under FATCA
Sections
1471 through 1474 of the Code, and the U.S. Treasury regulations and administrative guidance issued thereunder (“FATCA”),
impose a 30% withholding tax on any dividends (including constructive dividends) on Jet.AI Common Stock and, subject to the proposed
U.S. Treasury regulations discussed below, on proceeds from sales or other dispositions of our securities, if paid to a “foreign
financial institution” or a “non-financial foreign entity” (each as defined in the Code) (including, in some cases,
when such foreign financial institution or non-financial foreign entity is acting as an intermediary), unless (i) in the case of a foreign
financial institution, such institution enters into an agreement with the U.S. government to withhold on certain payments, and to collect
and provide to the U.S. tax authorities substantial information regarding U.S. account holders of such institution (which includes certain
equity and debt holders of such institution, as well as certain account holders that are non-U.S. entities with U.S. owners), (ii) in
the case of a non-financial foreign entity, such entity certifies that it does not have any “substantial United States owners”
(as defined in the Code) or provides the applicable withholding agent with a certification identifying the direct and indirect substantial
United States owners of the entity (in either case, generally on an IRS Form W-8BEN-E), or (iii) the foreign financial institution or
non-financial foreign entity otherwise qualifies for an exemption from these rules and provides appropriate documentation (such as an
IRS Form W-8BEN-E). Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United
States governing these rules may be subject to different rules. Under certain circumstances, a Holder might be eligible for refunds or
credits of such taxes. While gross proceeds from a sale or other disposition of our securities paid after January 1, 2019 would have
originally been subject to withholding under FATCA, proposed U.S. Treasury regulations provide that such payments of gross proceeds do
not constitute withholdable payments. Taxpayers may generally rely on these proposed U.S. Treasury regulations until they are revoked
or final U.S. Treasury regulations are issued. Holders are encouraged to consult with, and rely solely upon, their own tax advisors regarding
the effects of FATCA on their ownership of Jet.AI Units, Jet.AI Common Stock or Jet.AI Warrants.
THE
FOREGOING DISCUSSION IS NOT A COMPREHENSIVE DISCUSSION OF ALL OF THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO HOLDERS OF OXBRIDGE PUBLIC
SECURITIES OR JET.AI SECURITIES. SUCH HOLDERS SHOULD CONSULT WITH, AND RELY SOLELY UPON, THEIR TAX ADVISORS TO DETERMINE THE SPECIFIC
TAX CONSEQUENCES TO THEM OF THE BUSINESS COMBINATION (INCLUDING THE DOMESTICATION AND ANY EXERCISE OF THEIR REDEMPTION RIGHTS) AND, TO
THE EXTENT APPLICABLE, OF OWNING JET.AI SECURITIES FOLLOWING THE COMPLETION OF THE BUSINESS COMBINATION, INCLUDING THE APPLICABILITY
AND EFFECT OF ANY OTHER TAX LAWS, INCLUDING BUT NOT LIMITED TO, U.S. FEDERAL ESTATE AND GIFT TAX LAWS AND ANY STATE, LOCAL, OR NON-U.S.
TAX LAWS AND TAX TREATIES (AND ANY POTENTIAL FUTURE CHANGES THERETO).
Regulatory
Matters
Neither
Oxbridge nor Jet Token is aware of any material regulatory approvals or actions that are required for completion of the Business Combination.
It is presently contemplated that if any regulatory approvals or actions are required, those approvals or actions will be sought. There
can be no assurance, however, that any such approvals or actions will be obtained.
PROPOSAL
NO. 1 — THE BUSINESS COMBINATION PROPOSAL
Overview
We
are asking our shareholders to approve and adopt the Business Combination Agreement and the Business Combination. Our shareholders should
carefully read this proxy statement/prospectus in its entirety for more detailed information concerning the Business Combination Agreement,
a copy of which is attached as Annex A to this proxy statement/prospectus. Please see the section above entitled “The Business
Combination” for additional information and a summary of certain terms of the Business Combination Agreement. You are urged to
carefully read the Business Combination Agreement in its entirety before voting on this proposal.
Because
we are holding a shareholder vote on the Business Combination Proposal, we may consummate the Business Combination only if it is approved
by the affirmative vote (in person, online or by proxy) of a majority of the holders of the Class A Ordinary Shares and Class B Ordinary
Shares entitled to vote and actually casting votes thereon at the extraordinary general meeting, voting as a single class.
Effect
of Proposal on Current Shareholders
If
the Business Combination Proposal is approved, (a) 4,500,000 shares of Jet.AI Common Stock will be issued to the Historical Rollover
Shareholders in connection with the Business Combination, (b) 7,353,000 Merger Consideration Warrants will be issued to the Historical
Rollover Shareholders in connection with the Business Combination, representing $60 million in fair market value as determined using
the Black-Scholes method with the inputs described in the Business Combination Agreement, (c) up to 3,270,278 shares of Jet.AI
Common Stock will be reserved for issuance in respect of Jet.AI Options issued in exchange for outstanding Jet Token Options, and
(d) up to 148,130 shares of Jet.AI Common Stock and 242,044 Merger Consideration Warrants will be reserved for issuance in respect
of Jet.AI RSU Awards issued in exchange for outstanding Jet Token RSU Awards.
The
issuance of shares of Jet.AI Common Stock and Merger Consideration Warrants described above would result in significant dilution
to our shareholders, and in our shareholders having a smaller percentage interest in the voting power, liquidation value and aggregate
book value of Oxbridge.
Resolution
The
full text of the resolution to be passed is as follows:
“RESOLVED,
as an ordinary resolution, that Oxbridge’s entry into the Business Combination Agreement, dated as of February 24, 2023, by and
among Oxbridge, First Merger Sub, Second Merger Sub and Jet Token (in the form attached to this proxy statement/prospectus as Annex
A), pursuant to which, among other things, (a) First Merger Sub will merge with and into Jet Token, with Jet Token surviving the
merger as a wholly owned subsidiary of Jet.AI, and (b) as soon as practicable, but in any event within three days following the Effective
Time, Jet Token (as the surviving entity of the First Merger) will merge with and into Second Merger Sub, with Second Merger Sub surviving
the merger as a wholly owned subsidiary of Jet.AI, and all other transactions contemplated by the Business Combination Agreement, including
the issuance and reservation for issuance of shares in connection therewith, be confirmed, ratified and approved in all respects.”
Vote
Required for Approval
The
approval of the Business Combination Proposal (and consequently, the Business Combination Agreement and the Business Combination) requires
an ordinary resolution under Cayman Islands law, being the affirmative vote (in person, online or by proxy) of a majority of the Class
A Ordinary Shares and Class B Ordinary Shares entitled to vote and actually casting votes thereon at the extraordinary general meeting,
voting as a single class. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will
not count as votes cast at the extraordinary general meeting. Accordingly, failure to vote in person, online or by proxy at the extraordinary
general meeting or an abstention from voting will have no effect on the outcome of the vote on the Business Combination Proposal.
The
Business Combination Proposal is conditioned on the approval of each of the other Condition Precedent Proposals. Therefore, if each of
the other Condition Precedent Proposals is not approved, the Business Combination Proposal will have no effect, even if approved by holders
of the Ordinary Shares.
Our
Sponsor, directors and officers have agreed to vote any Class A Ordinary Shares and Class B Ordinary Shares owned by them in favor of
the Business Combination Proposal.
Recommendation
of the Oxbridge Board
THE
OXBRIDGE BOARD RECOMMENDS THAT OXBRIDGE SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE BUSINESS COMBINATION PROPOSAL.
PROPOSAL
NO. 2 — THE DOMESTICATION PROPOSAL
Overview
As
discussed in this proxy statement/prospectus, Oxbridge is asking its shareholders to approve the Domestication Proposal. Under the Business
Combination Agreement, the approval of the Domestication Proposal is also a condition to the consummation of the Business Combination.
As
a condition to closing the Business Combination, the Oxbridge Board has unanimously approved, and Oxbridge’s shareholders are being
asked to consider and vote upon the Domestication Proposal to approve by special resolution a change of Oxbridge’s jurisdiction
of incorporation by deregistering as a Cayman Islands exempted company and continuing and domesticating as a corporation incorporated
under the laws of the State of Delaware. To effect the Domestication, Oxbridge will file an application to deregister with the Cayman
Islands Registrar of Companies, together with the necessary accompanying documents, and file the Proposed Certificate of Incorporation
and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which Oxbridge will be domesticated
and continue as a Delaware corporation.
As
a result of and upon the effective time of the Domestication, prior to the Effective Time: (a) each then issued and outstanding Class
A Ordinary Share and each then issued and outstanding Class B Ordinary Share of Oxbridge will convert automatically, on a one-for-one
basis, into a share of Jet.AI Common Stock; (b) each then issued and outstanding Oxbridge Warrant will convert automatically into a Jet.AI
Warrant pursuant to the Warrant Agreement; (c) each then issued and outstanding Oxbridge Unit will convert automatically into a Jet.AI
Unit, each consisting of one share of Jet.AI Common Stock and one Jet.AI Warrant; (d) each authorized share of Oxbridge Preferred Stock
shall continue to exist as preferred stock of Jet.AI in accordance with the Domestication Certificate of Incorporation; and (e) after
its Domestication, Oxbridge will immediately be renamed “Jet.AI Inc.”
The
Domestication Proposal, if approved, will approve a change of Oxbridge’s jurisdiction of incorporation from the Cayman Islands
to the State of Delaware. Accordingly, while Oxbridge is currently incorporated as an exempted company under the Cayman Islands Companies
Act (As Revised), upon the Domestication, Jet.AI will be governed by the DGCL. We encourage shareholders to carefully consult the information
set out below under the section entitled “Comparison of Corporate Governance and Shareholder Rights.” Additionally, we note
that if the Domestication Proposal is approved, then Oxbridge will also ask its shareholders to approve the Organizational Documents
Proposal (discussed below), which, if approved, will replace the Existing Organizational Documents with the Proposed Organizational Documents.
The Proposed Organizational Documents differ in certain material respects from the Existing Organizational Documents and we encourage
shareholders to carefully consult the information set out below under the sections entitled “Proposal No. 3 — The Organizational
Documents Proposal” and “Proposal No. 4 — The Advisory Organizational Documents Proposals” and the Existing Organizational
Documents of Oxbridge and the Proposed Organizational Documents.
Reasons
for the Domestication
The
Oxbridge Board believes that there are significant advantages to us that will arise as a result of a change of our domicile to Delaware.
Further, the Oxbridge Board believes that any direct benefit that the DGCL provides to a corporation also indirectly benefits its shareholders,
who are the owners of the corporation. The Oxbridge Board believes that there are several reasons why a reincorporation in Delaware is
in the best interests of Oxbridge and its shareholders. As explained in more detail below, these reasons can be summarized as follows:
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Prominence,
Predictability and Flexibility of Delaware Law. For many years Delaware has followed a policy of encouraging incorporation in
its state and, in furtherance of that policy, has been a leader in adopting, construing and implementing comprehensive, flexible
corporate laws responsive to the legal and business needs of corporations organized under its laws. Many corporations have chosen
Delaware initially as a state of incorporation or have subsequently changed corporate domicile to Delaware. Because of Delaware’s
prominence as the state of incorporation for many major corporations, both the legislature and courts in Delaware have demonstrated
the ability and a willingness to act quickly and effectively to meet changing business needs. The DGCL is frequently revised and
updated to accommodate changing legal and business needs and is more comprehensive, widely used and interpreted than other state
corporate laws. This favorable corporate and regulatory environment is attractive to businesses such as ours. |
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Well-Established
Principles of Corporate Governance. There is substantial judicial precedent in the Delaware courts as to the legal principles
applicable to measures that may be taken by a corporation and to the conduct of a company’s board of directors, such as under
the business judgment rule and other standards. Because the judicial system is based largely on legal precedents, the abundance of
Delaware case law provides clarity and predictability to many areas of corporate law. We believe such clarity would be advantageous
to Jet.AI, its management and the Jet.AI Board to make corporate decisions and take corporate actions with greater assurance as to
the validity and consequences of those decisions and actions. Further, investors and securities professionals are generally more
familiar with Delaware corporations, and the laws governing such corporations, increasing their level of comfort with Delaware corporations
relative to other jurisdictions. The Delaware courts have developed considerable expertise in dealing with corporate issues, and
a substantial body of case law has developed construing Delaware law and establishing public policies with respect to corporate legal
affairs. Moreover, Delaware’s vast body of law on the fiduciary duties of directors will provide appropriate protection for
Jet.AI’s stockholders from possible abuses by directors and officers. |
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Increased
Ability to Attract and Retain Qualified Directors. Reincorporation from the Cayman Islands to Delaware is attractive to directors,
officers and shareholders alike. Jet.AI’s incorporation in Delaware may make Jet.AI more attractive to future candidates for
the Jet.AI Board, because many such candidates are already familiar with Delaware corporate law from their past business experience.
To date, we have not experienced difficulty in retaining directors or officers, but directors of public companies are exposed to
significant potential liability. Thus, candidates’ familiarity and comfort with Delaware laws — especially those relating
to director indemnification — draw such qualified candidates to Delaware corporations. The Jet.AI Board therefore believes
that providing the benefits afforded directors by Delaware law will enable Jet.AI to compete more effectively with other public companies
in the recruitment of talented and experienced directors and officers. |
The
frequency of claims and litigation pursued against directors and officers has greatly expanded the risks facing directors and officers
of corporations in carrying out their respective duties. The amount of time and money required to respond to such claims and to defend
such litigation can be substantial. While both Cayman Islands and Delaware law permit a corporation to include a provision in its governing
documents to reduce or eliminate the monetary liability of directors for breaches of fiduciary duty in certain circumstances, the Oxbridge
Board believes that, in general, Delaware law is more developed and provides more guidance than Cayman Islands law on matters regarding
a company’s ability to limit director liability. As a result, the Oxbridge Board believes that the corporate environment afforded
by Delaware will enable Jet.AI to compete more effectively with other public companies in attracting and retaining new directors.
Expected
Accounting Treatment After Domestication
There
will be no accounting effect nor change in carrying amount of the consolidated assets and liabilities of Oxbridge/Jet.AI as a result
of the Domestication. The business, capitalization, assets and liabilities and financial statements of Jet.AI immediately following the
Domestication will be the same as those of Oxbridge immediately prior to the Domestication.
Resolution
The
full text of the resolution to be passed is as follows:
“RESOLVED,
as a special resolution, that Oxbridge be de-registered in the Cayman Islands pursuant to Article 47 of its Amended and Restated Memorandum
and Articles of Association and registered by way of continuation as a corporation under the laws of the state of Delaware
(the “Domestication”) pursuant to Part XII of the Cayman Islands Companies Act (As Revised) and Section 388 of the
DGCL and, immediately upon being de-registered in the Cayman Islands, that Oxbridge be continued and domesticated as a corporation and,
conditional upon, and with effect from, the registration of Oxbridge as a corporation in the State of Delaware, the name of Oxbridge
be changed from “Oxbridge Acquisition Corp.” to “Jet.AI Inc.” and the registered office of the post-domestication
company be changed to Corporation Service Company, 251 Little Falls Dr, Wilmington, DE 19808.”
Vote
Required for Approval
The
approval of the Domestication Proposal requires a special resolution under Cayman Islands law, being the affirmative vote (in person,
online or by proxy) of at least two-thirds of the Class A Ordinary Shares and Class B Ordinary Shares entitled to vote and actually casting
votes thereon at the extraordinary general meeting, voting as a single class. Abstentions and broker non-votes, while considered present
for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting. Accordingly, failure to
vote in person, online or by proxy at the extraordinary general meeting or an abstention from voting will have no effect on the outcome
of the vote on the Domestication Proposal.
The
Domestication Proposal is conditioned on the approval of each of the other Condition Precedent Proposals. Therefore, if each of the other
Condition Precedent Proposals is not approved, the Domestication Proposal will have no effect, even if approved by holders of the Ordinary
Shares.
Recommendation
of the Oxbridge Board
THE
OXBRIDGE BOARD UNANIMOUSLY RECOMMENDS THAT OXBRIDGE SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE DOMESTICATION PROPOSAL.
PROPOSAL
NO. 3 — THE ORGANIZATIONAL DOCUMENTS PROPOSAL
Overview
Assuming
the Business Combination Proposal and the Domestication Proposal are approved, Oxbridge will replace its Existing Organizational Documents
with the Proposed Certificate of Incorporation and Proposed Bylaws of Jet.AI, in each case under the DGCL.
Oxbridge’s
shareholders are asked to consider and vote upon, to approve by special resolution and to adopt, the Proposed Organizational Documents
in connection with the replacement of the Existing Organizational Documents, with such principal changes as are described in the Advisory
Organizational Documents Proposals. All shareholders are encouraged to read the Proposed Organizational Documents in their entirety,
which are attached to this proxy statement/prospectus as Annex B and Annex C, for a more complete description of their
terms.
Reasons
for the Organizational Documents Proposal
Each
of the Proposed Certificate of Incorporation and the Proposed Bylaws was negotiated as part of the Business Combination. The Oxbridge
Board’s specific reasons for each of the Advisory Organizational Documents Proposals are set forth in the section entitled “Proposal
No. 4 — The Advisory Organizational Documents Proposals.”
Resolution
The
full text of the resolution to be passed is as follows:
“RESOLVED,
as a special resolution, that the Existing Organizational Documents currently in effect be amended and restated by the deletion in their
entirety and the substitution in their place of the Proposed Certificate of Incorporation and the Proposed Bylaws, and that the name
of the Company be changed to “Jet.AI,” effective upon the effectiveness of the Domestication.”
Vote
Required for Approval
If
the Business Combination Proposal and the Domestication Proposal are not approved, the Organizational Documents Proposal will not be
presented at the extraordinary general meeting. The approval of the Organizational Documents Proposal requires a special resolution under
the Cayman Islands law, being the affirmative vote (in person, online or by proxy) of at least two-thirds of the Class A Ordinary Shares
and Class B Ordinary Shares entitled to vote and actually casting votes thereon at the extraordinary general meeting, voting as a single
class. Abstentions and broker non-votes, while considered present for purposes of establishing quorum, will not count as a vote cast
at the extraordinary general meeting. Accordingly, failure to vote in person, online or by proxy at the extraordinary general meeting
or an abstention from voting will have no effect on the outcome of the vote on the Organizational Documents Proposal.
The
Organizational Documents Proposal is conditioned on the approval of each of the other Condition Precedent Proposals. Therefore, if each
of the other Condition Precedent Proposals is not approved, the Organizational Documents Proposal will have no effect, even if approved
by holders of the Ordinary Shares.
Recommendation
of the Oxbridge Board
THE
OXBRIDGE BOARD UNANIMOUSLY RECOMMENDS THAT OXBRIDGE SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE ORGANIZATIONAL DOCUMENTS
PROPOSAL.
PROPOSAL
NO. 4 — THE ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSALS
If
the Domestication Proposal and Organizational Documents Proposal are approved and the Business Combination is to be consummated, Oxbridge
will replace the Existing Organizational Documents, under the Cayman Islands Companies Act (As Revised), with the Proposed Organizational
Documents, under the DGCL.
As
required by SEC guidance, to give shareholders the opportunity to present their separate views on important corporate governance provisions,
Oxbridge is asking its shareholders to consider and vote upon and to approve on a non-binding advisory basis by ordinary resolution ten
separate proposals in connection with the replacement of the Existing Organizational Documents with the Proposed Organizational Documents.
The Advisory Organizational Documents Proposals are conditioned upon the Business Combination Proposal, the Domestication Proposal, the
Organizational Documents Proposal and each of the other Condition Precedent Proposals. However, the shareholder vote regarding each of
the Advisory Organizational Documents Proposals is an advisory vote, and is not binding on Oxbridge or the Oxbridge Board (separate and
apart from the approval of the Organizational Documents Proposal). Accordingly, regardless of the outcome of the non-binding advisory
vote on the Advisory Organizational Documents Proposals, Oxbridge intends that the Proposed Organizational Documents will take effect
upon the closing of the Business Combination (assuming approval of the Organizational Documents Proposal).
The
following table sets forth a summary of the principal changes proposed to be made between the Existing Organizational Documents and the
Proposed Organizational Documents. This summary is qualified by reference to the complete text of the Proposed Organizational Documents,
copies of which are attached to this proxy statement/prospectus as Annex B and Annex C. All shareholders are encouraged
to read each of the Proposed Organizational Documents in its entirety for a more complete description of its terms. Additionally, as
the Existing Organizational Documents are governed by Cayman Islands law and the Proposed Organizational Documents will be governed by
the DGCL, Oxbridge encourages its shareholders to carefully consult the information set out under the section entitled “Comparison
of Corporate Governance and Shareholder Rights.”
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Existing
Organizational Documents |
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Proposed
Organizational Documents |
Authorized
Shares
(Proposal
4A) |
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Under
the Existing Organizational Documents, Oxbridge’s share capital is US$44,400 divided into 444,000,000 Oxbridge shares, consisting
of 400,000,000 Class A Ordinary Shares, 40,000,000 Class B Ordinary Shares and 4,000,000 Oxbridge Preference Shares.
See
paragraph 5 of the Existing Organizational Documents. |
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The
Proposed Organizational Documents increases the total number of authorized shares of all
classes of capital stock to 59,000,000 shares, consisting of: 55,000,000 shares
of Jet.AI Common Stock and 4,000,000 shares of Jet.AI Preferred Stock.
See
Article IV of the Proposed Certificate of Incorporation. |
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Classified
Board
(Proposal
4B) |
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The
Existing Organizational Documents provide that the Oxbridge board of directors shall be comprised of one class.
See
Article 27 of the Existing Organizational Documents. |
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The
Proposed Certificate of Incorporation and the Proposed Bylaws provide that, subject
to the rights of any holders of any series of Jet.AI Preferred Stock, the Jet.AI board of
directors be divided into three classes with only one class of directors being elected in
each year and each class serving a three-year term
See
Article V of the Proposed Certificate of Incorporation and Section 2.2 of the Proposed Bylaws. |
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Quorum
(Proposal
4C)
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Existing
Organizational Documents provide that the quorum for the transaction of the business of the
directors may be fixed by the directors, and unless so fixed shall be a majority of the directors
then in office.
See
Article 31.1 of the Existing Organizational Documents.
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The
Proposed Bylaws provide that, at all meetings of the Jet.AI Board, two-thirds of the directors
then in office shall constitute a quorum for the transaction of business.
See
Section 2.6 of the Proposed Bylaws.
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Director
Removal
(Proposal
4D) |
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The
Existing Organizational Documents provide that any director may be removed from office by an ordinary resolution of the holders of
the Class B Ordinary Shares.
See
Articles 29.1 and 29.3 of the Existing Organizational Documents. |
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The
Proposed Certificate of Incorporation provides that, subject to the special rights of any Jet.AI Preferred Stock, directors on the
Jet.AI Board may only be removed for cause and by the affirmative vote of the holders of at least two-thirds of the voting power
of the then-outstanding shares entitled to vote in the election of directors, voting together as a single class.
See
Article V of the Proposed Certificate of Incorporation. |
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Adoption
of Supermajority Vote Requirement to Amend the Proposed Organizational Documents
(Proposal
4E) |
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The
Existing Organizational Documents provide that amendments may be made by a special resolution under Cayman Islands law, being the
affirmative vote of two-thirds of the Ordinary Shares represented in person or by proxy and entitled to vote thereon and who vote
at a general meeting.
See
Article 18.3 of the Existing Organizational Documents. |
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The
Proposed Certificate of Incorporation and the Proposed Bylaws require the affirmative
vote of at least two-thirds of the voting power of the then-outstanding shares of capital
stock of Jet.AI entitled to vote thereon, voting together as a single class, to adopt, amend
or repeal the Proposed Bylaws. The Proposed Certificate of Incorporation additionally
requires the affirmative vote of at least two-thirds of the voting power of the then-outstanding
shares of capital stock of Jet.AI entitled to vote thereon, voting together as a single class,
to amend or repeal or adopt any provision inconsistent with Sections 1.2 and 3.1 of Article
IV, or Article V, Article VII, Article VIII, Article IX, Article X, or Section 1 of Article
XI of the Proposed Certificate of Incorporation (provided that if two-thirds of the Jet.AI
Board approved such adoption, amendment or repeal of the Proposed Certificate of Incorporation,
then only the affirmative vote of the majority of the holders of the outstanding shares
will be required). The Jet.AI Board will also have the power to adopt, amend or repeal the
Proposed Bylaws by the approval of a majority of the total number of authorized directors.
See
Article X of the Proposed Bylaws.
See
Article VII and Article XI of the Proposed Certificate of Incorporation. |
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Existing
Organizational Documents |
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Proposed
Organizational Documents |
Exclusive
Forum Provision
(Proposal
4F) |
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The
Existing Organizational Documents do not contain a provision adopting an exclusive forum for certain shareholder litigation. |
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Under
the Proposed Certificate of Incorporation, unless Jet.AI consents in writing to the selection of an alternative forum, the Court
of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction,
any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the
federal district court for the District of Delaware) will be the sole and exclusive forum for the following types of actions or proceedings
under Delaware statutory or common law: (a) any derivative action or proceeding brought on behalf of Jet.AI; (b) any action or proceeding
asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee of Jet.AI or any
stockholder to Jet.AI or Jet.AI’s stockholders; (c) any action or proceeding asserting a claim against Jet.AI or any current
or former director, officer or other employee of Jet.AI or any stockholder in such stockholder’s capacity as such arising out
of or pursuant to any provision of the DGCL, the Proposed Certificate of Incorporation or the Proposed Bylaws of Jet.AI (as each
may be amended from time to time); (d) any action or proceeding to interpret, apply, enforce or determine the validity of the Proposed
Certificate of Incorporation or the Proposed Bylaws of Jet.AI (including any right, obligation or remedy thereunder); (e) any action
or proceeding as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware; and (f) any action asserting
a claim against Jet.AI or any director, officer or other employee of Jet.AI or any stockholder, governed by the internal affairs
doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over
the indispensable parties named as defendants. This provision will not apply to suits brought to enforce a duty or liability created
by the Securities Act or the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
Unless
Jet.AI consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district
courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action
arising under the Securities Act.
See
Article IX of the Proposed Certificate of Incorporation. |
Action
by Written Consent of Stockholders
(Proposal
4G) |
|
The
Existing Organizational Documents provide that a resolution in writing signed by all of the shareholders entitled to vote at general
meetings shall be as valid and effective as if the same had been passed at a duly convened and held general meeting.
See
Article 22.3 of the Existing Organizational Documents. |
|
The
Proposed Certificate of Incorporation provides that, subject to the rights of any Jet.AI Preferred Stock then outstanding, any action
required or permitted to be taken by Jet.AI’s stockholders must be effected at a duly called annual or special meeting of such
stockholders and may not be effected by written consent of the stockholders.
See
Article 8.1 of the Proposed Certificate of Incorporation. |
|
|
|
|
|
Corporate
Name
(Proposal
4H) |
|
The
Existing Organizational Documents provide the name of the company is “Oxbridge Acquisition Corp.”
See
paragraph 1 of the Existing Organizational Documents. |
|
The
Proposed Organizational Documents provide that the name of the company will be “Jet.AI Inc.”
See
Article I of the Proposed Certificate of Incorporation. |
|
|
|
|
|
Perpetual
Existence
(Proposal
4I) |
|
The
Existing Organizational Documents provide that if we do not consummate an Initial Business Combination within the Combination Period,
Oxbridge will cease all operations except for the purposes of winding up and will redeem the public shares and liquidate the Trust
Account.
See
Article 49.7 of the Existing Organizational Documents. |
|
The
Proposed Organizational Documents do not contain any provisions relating to Jet.AI’s ongoing existence; the default under the
DGCL will make Jet.AI’s existence perpetual. |
|
|
|
|
|
Provisions
Related to Status as a Blank Check Company
(Proposal
4J) |
|
The
Existing Organizational Documents set forth various provisions related to our status as a blank check company prior to the consummation
of an Initial Business Combination.
See
Article 49.12 of the Existing Organizational Documents. |
|
The
Proposed Organizational Documents do not include such provisions related to our status as a blank check company, which will no longer
apply upon consummation of the Business Combination, as we will cease to be a blank check company at such time. |
Overview
Advisory
Organizational Documents Proposal 4A — Authorized Shares
Oxbridge’s
shareholders are being asked to approve the change in the authorized share capital of Oxbridge upon the Domestication from (i) 400,000,000
Class A Ordinary Shares, 40,000,000 Class B Ordinary Shares and 4,000,000 Oxbridge Preference Shares, par value $0.0001, to (ii) 55,000,000
shares of Jet.AI Common Stock, par value $0.0001, and 4,000,000 shares of Jet.AI Preferred Stock, par value $0.0001.
This
summary is qualified by reference to the complete text of the Proposed Organizational Documents, copies of which are attached to this
proxy statement/prospectus as Annex B and Annex C. All shareholders are encouraged to read the Proposed Organizational
Documents in their entirety for a more complete description of their terms.
As
of the date of this proxy statement/prospectus, there are 4,176,952 Ordinary Shares issued and outstanding, which includes an aggregate
of 2,875,000 Class B Ordinary Shares held by our Sponsor. In addition, as of the date of this proxy statement/prospectus, there is outstanding
an aggregate of 17,260,000 warrants to acquire Ordinary Shares, comprised of 5,760,00 private placement warrants held by our Sponsor
and 11,500,000 public warrants.
As
a result of and upon the effective time of the Domestication, prior to the Effective Time: (a) each then issued and outstanding Class
A Ordinary Share and each then issued and outstanding Class B Ordinary Share will convert automatically, on a one-for-one basis, into
a share of Jet.AI Common Stock; (b) each then issued and outstanding Oxbridge Warrant will convert automatically into a Jet.AI
Warrant; and (c) each then issued and outstanding Oxbridge Unit will convert automatically into a Jet.AI Unit.
In
accordance with the terms and subject to the conditions of the Business Combination Agreement, at the closing of the Business Combination,
each outstanding share of Jet Token Voting Common Stock, including each share of Jet Token Preferred Stock that will be converted into
shares of Jet Token Voting Common Stock immediately prior to the Effective Time, and each share of Jet Token Non-Voting Common Stock,
but excluding shares of Jet Token Restricted Stock, will be cancelled and automatically converted into the right to receive the number
of shares of Jet.AI Common Stock, equal to the applicable exchange ratio (determined in accordance with the Business Combination
Agreement); (b) each warrant to purchase shares of Jet Token Common Stock issued and outstanding immediately prior to the Effective Time
shall be automatically converted into a warrant to acquire a number of shares of Jet.AI Common Stock based on the applicable exchange
ratio and at a specified price (each determined in accordance with the Business Combination Agreement); (c) each award of Jet Token Restricted
Stock that is outstanding immediately prior to the Effective Time will be converted into Jet.AI Restricted Stock with respect to a number
of restricted shares of Jet.AI Common Stock based on the applicable exchange ratio (determined in accordance with the Business
Combination Agreement); and (d) each option to purchase shares of Jet Token Common Stock, whether or not exercisable and whether or not
vested, that is outstanding immediately prior to the Effective Time will automatically be converted into a Jet.AI Option to purchase
a number of shares of Jet.AI Common Stock, as applicable, based on the applicable exchange ratio (determined in accordance with
the Business Combination Agreement).
In
order to ensure that Jet.AI has sufficient authorized capital for future issuances, the Oxbridge Board has approved, subject to shareholder
approval, that the Proposed Organizational Documents of Jet.AI increase the total number of authorized shares of all classes of capital
stock to 59,000,000 shares, consisting of 55,000,000 shares of Jet.AI Common Stock and 4,000,000 shares of Jet.AI Preferred
Stock.
This
summary is qualified by reference to the complete text of the Proposed Organizational Documents, copies of which are attached to this
proxy statement/prospectus as Annex B and Annex C. All shareholders are encouraged to read the Proposed Organizational
Documents in their entirety for a more complete description of their terms.
Advisory
Organizational Documents Proposal 4B —Classified Board
Oxbridge’s
shareholders are being asked to approve and adopt an amendment to the Existing Organizational Documents providing that, subject to the
rights of any Jet.AI Preferred Stock, the Jet.AI Board of Directors shall be divided into three classes with only one class of directors
being elected in each year and each class serving a three-year term.
Assuming
each of the other Condition Precedent Proposals is approved, our shareholders are also being asked to approve Advisory Organizational
Documents Proposal 4B, which is, in the judgment of our board of directors, necessary to adequately address the needs of Jet.AI after
the Business Combination.
If
Advisory Organizational Documents Proposal 4B is approved, Jet.AI’s board of directors would reclassify. The term of office of
the Class I directors will expire at the first annual meeting of stockholders following the initial classification of the board of directors
and Class I directors will be elected for a full term of three years. At the second annual meeting of stockholders following such initial
classification, the term of office of the Class II directors will expire and Class II directors will be elected for a full term of three
years. At the third annual meeting of stockholders following such initial classification, the term of office of the Class III directors
will expire and Class III directors will be elected for a full term of three years. At each succeeding annual meeting of stockholders,
directors will be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual meeting.
Subject to any limitations imposed by applicable law and subject to the special rights of the holders of any series of preferred stock
to elect directors, any vacancy occurring in Jet.AI’s board for any reason, and any newly created directorship resulting from any
increase in the authorized number of directors, will, unless (i) Jet.AI’s board of directors determines by resolution that any
such vacancies or newly created directorships shall be filled by the stockholders or (ii) as otherwise provided by law, be filled only
by the affirmative vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director, and
not by the stockholders.
This
summary is qualified by reference to the complete text of the Proposed Organizational Documents, copies of which are attached to this
proxy statement/prospectus as Annex B and Annex C. All shareholders are encouraged to read the Proposed Organizational
Documents in their entirety for a more complete description of their terms.
Advisory
Organizational Documents Proposal 4C — Quorum
Oxbridge’s
shareholders are being asked to approve and adopt an amendment to the Existing Organizational Documents providing that, at all meetings
of the Jet.AI Board, two-thirds of the directors then in office shall constitute a quorum for the transaction of business.
This
summary is qualified by reference to the complete text of the Proposed Organizational Documents, copies of which are attached to this
proxy statement/prospectus as Annex B and Annex C. All shareholders are encouraged to read the Proposed Organizational
Documents in their entirety for a more complete description of their terms.
Advisory
Organizational Documents Proposal 4D — Director Removal
Oxbridge’s
shareholders are being asked to approve and adopt an amendment to the Existing Organizational Documents providing that, subject to the
rights of any Jet.AI Preferred Stock, directors on the Jet.AI Board may only be removed for cause and by the affirmative vote of the
holders of at least two-thirds of the voting power of then-outstanding shares entitled to vote in the election of directors, voting together
as a single class.
This
summary is qualified by reference to the complete text of the Proposed Organizational Documents, copies of which are attached to this
proxy statement/prospectus as Annex B and Annex C. All shareholders are encouraged to read the Proposed Organizational
Documents in their entirety for a more complete description of their terms.
Advisory
Organizational Documents Proposal 4E — Adoption of Supermajority Vote Requirement to Amend the Proposed Organizational Documents
Oxbridge’s
shareholders are being asked to approve and adopt an amendment to the Existing Organizational Documents requiring the affirmative vote
of at least two-thirds of the voting power of the outstanding shares to (a) adopt, amend or repeal the Proposed Bylaws, and to (b) amend
or repeal or adopt any provision inconsistent with Sections 1.2 and 3.1 of Article IV, or Article V, Article VII, Article VIII, Article
IX, Article X, or Section 1 of Article XI of the Proposed Certificate of Incorporation (provided that if two-thirds of the Jet.AI Board
approved such adoption, amendment or repeal of the Proposed Organizational Documents, then only the affirmative vote of the majority
of the holders of the outstanding shares will be required).
This
summary is qualified by reference to the complete text of the Proposed Organizational Documents, copies of which are attached to this
proxy statement/prospectus as Annex B and Annex C. All shareholders are encouraged to read the Proposed Organizational
Documents in their entirety for a more complete description of their terms.
Advisory
Organizational Documents Proposal 4F — Exclusive Forum Provision
Oxbridge’s
shareholders are being asked to approve and adopt an amendment to the Existing Organizational Documents to authorize adopting the Court
of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction,
any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal
district court for the District of Delaware) as the sole and exclusive forum for the following types of actions or proceedings under
Delaware statutory or common law: (a) any derivative action or proceeding brought on behalf of Jet.AI; (b) any action or proceeding asserting
a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee of Jet.AI or any stockholder
to Jet.AI or Jet.AI’s stockholders; (c) any action or proceeding asserting a claim against Jet.AI or any current or former director,
officer or other employee of Jet.AI or any stockholder in such stockholder’s capacity as such arising out of or pursuant to any
provision of the DGCL or the Proposed Organizational Documents (as each may be amended from time to time); (d) any action or proceeding
to interpret, apply, enforce or determine the validity of the Proposed Organizational Documents (including any right, obligation or remedy
thereunder); (e) any action or proceeding as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware;
and (f) any action asserting a claim against Jet.AI or any director, officer or other employee of Jet.AI or any stockholder, governed
by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal
jurisdiction over the indispensable parties named as defendants. Such exclusive forum provision will not apply to suits brought to enforce
a duty or liability created by the Securities Act or the Exchange Act, or any other claim for which the federal courts have exclusive
jurisdiction.
Unless
Jet.AI consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts
of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising
under the Securities Act.
This
summary is qualified by reference to the complete text of the Proposed Organizational Documents, copies of which are attached to this
proxy statement/prospectus as Annex B and Annex C. All shareholders are encouraged to read the Proposed Organizational
Documents in their entirety for a more complete description of their terms.
Advisory
Organizational Documents Proposal 4G — Action by Written Consent of Stockholders
Oxbridge’s
shareholders are being asked to approve and adopt an amendment to the Existing Organizational Documents providing that, subject to the
rights of any Jet.AI Preferred Stock then outstanding, any action required or permitted to be taken by Jet.AI’s stockholders must
be effected at a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders.
This
summary is qualified by reference to the complete text of the Proposed Organizational Documents, copies of which are attached to this
proxy statement/prospectus as Annex B and Annex C. All shareholders are encouraged to read the Proposed Organizational
Documents in their entirety for a more complete description of their terms.
Advisory
Organizational Documents Proposal 4H — Corporate Name
Oxbridge’s
shareholders are being asked to approve and adopt an amendment to the Existing Organizational Documents changing the name of the company
to “Jet.AI Inc.”
This
summary is qualified by reference to the complete text of the Proposed Organizational Documents, copies of which are attached to this
proxy statement/prospectus as Annex B and Annex C. All shareholders are encouraged to read the Proposed Organizational
Documents in their entirety for a more complete description of their terms.
Advisory
Organizational Documents Proposal 4I — Perpetual Existence
Oxbridge’s
shareholders are being asked to approve and adopt an amendment to the Existing Organizational Documents making Jet.AI’s corporate
existence perpetual.
This
summary is qualified by reference to the complete text of the Proposed Organizational Documents, copies of which are attached to this
proxy statement/prospectus as Annex B and Annex C. All shareholders are encouraged to read the Proposed Organizational
Documents in their entirety for a more complete description of their terms.
Advisory
Organizational Documents Proposal 4J — Provisions Related to Status as a Blank Check Company
Oxbridge’s
shareholders are being asked to approve and adopt an amendment to the Existing Organizational Documents removing provisions related to
Oxbridge’s status as a blank check company, which will no longer apply upon consummation of the Business Combination, as we will
cease to be a blank check company at such time.
This
summary is qualified by reference to the complete text of the Proposed Organizational Documents, copies of which are attached to this
proxy statement/prospectus as Annex B and Annex C. All shareholders are encouraged to read the Proposed Organizational
Documents in their entirety for a more complete description of their terms.
Reasons
for Amendments
Advisory
Organizational Documents Proposal 4A — Authorized Shares
The
principal purpose of the Advisory Organizational Documents Proposal 4A is to provide for an authorized capital structure of Jet.AI that
will enable it to continue as an operating company governed by DGCL. The Oxbridge Board believes that it is important for Jet.AI to have
available for issuance a number of authorized shares of Jet.AI Common Stock and Jet.AI Preferred Stock sufficient to support its
growth and to provide flexibility for future corporate needs.
Advisory
Organizational Documents Proposal 4B — Classified Board
Our
board of directors believes that a classified board of directors in the best interest of Jet.AI because it is designed to assure the
continuity and stability of Jet.AI’s leadership and policies by ensuring that at any given time a majority of the directors will
have prior experience with Jet.AI and, therefore, will be familiar with our business and operations. Our board of directors also believes
that this classification will assist Jet.AI in protecting the interests of our stockholders in the event of an unsolicited offer for
Jet.AI by encouraging any potential acquirer to negotiate directly with Jet.AI’s board of directors.
This
proposal may increase the amount of time required for a takeover bidder to obtain control of Jet.AI without the cooperation of Jet.AI’s
board of directors, even if the takeover bidder were to acquire a majority of the voting power of Jet.AI’s outstanding voting stock.
Without the ability to obtain immediate control of Jet.AI’s board of directors, a takeover bidder will not be able to take action
to remove other impediments to its acquisition of Jet.AI. Thus, this amendment could discourage certain takeover attempts, perhaps including
some takeovers that stockholders may feel would be in their best interests. Further, this amendment will make it more difficult for stockholders
to change the majority composition of Jet.AI’s board of directors, even if the stockholders believe such a change would be desirable.
Because of the additional time required to change the control of Jet.AI’s board of directors, this amendment could be viewed as
tending to perpetuate present management.
Although
this proposal could make it more difficult for a hostile bidder to acquire control over Jet.AI, our board of directors believes that
by forcing potential bidders to negotiate with Jet.AI’s board of directors for a change of control transaction, Jet.AI’s
board of directors will be better able to maximize stockholder value in any change of control transaction.
Our
board of directors is not aware of any present or threatened third-party plans to gain control of Jet.AI and this proposal is not being
recommended in response to any such plan or threat. Rather, our board of directors is recommending this proposal as part of its review
of Jet.AI’s key governance mechanisms in connection with the Business Combination and to assist in assuring fair and equitable
treatment for all of Jet.AI’s stockholders in hostile takeover situations.
Advisory
Organizational Documents Proposal 4C — Quorum
Our
board of directors believes that requiring the presence of two-thirds of the directors then in office at all Jet.AI Board meetings is
in the best interest of Jet.AI because it is designed to assure director participation and stability of Jet.AI’s leadership.
This
amendment could discourage certain takeover attempts, perhaps including some takeovers that stockholders may feel would be in their best
interests. Although this proposal could make it more difficult for a hostile bidder to acquire control over Jet.AI, our board of directors
believes that by forcing potential bidders to negotiate with Jet.AI’s board of directors for a change of control transaction, Jet.AI’s
board of directors will be better able to maximize stockholder value in any change of control transaction.
Advisory
Organizational Documents Proposal 4D — Director Removal
The
Existing Organizational Documents provide that before an Initial Business Combination, holders of Class B Ordinary Shares may remove
any director, and that after an Initial Business Combination, shareholders may by an ordinary resolution remove any director. Under the
DGCL, unless a company’s certificate of incorporation provides otherwise, a director may be removed only for cause if a company
has a classified board. The Proposed Organizational Documents provide that directors may only be removed for cause and by the affirmative
vote of the holders of at least two-thirds of the voting power of then-outstanding shares entitled to vote in the election of
directors, voting together as a single class. The Oxbridge Board believes that such a standard will (a) increase board continuity and
the likelihood that experienced board members with familiarity of Jet.AI’s business operations would serve on the Jet.AI Board
at any given time and (b) make it more difficult for a potential acquiror or other person, group or entity to gain control of the Jet.AI
Board.
Advisory
Organizational Documents Proposal 4E — Adoption of Supermajority Vote Requirement to Amend the Proposed Organizational Documents
The
Existing Organizational Documents provide that amendments may be made by a special resolution under Cayman Islands law, being the affirmative
vote of holders of a majority of at least two-thirds of the Ordinary Shares represented in person or by proxy and entitled to vote and
actually casting votes thereon at a general meeting. The Proposed Organizational Documents require the affirmative vote of at least two-thirds
of the voting power of the outstanding shares to (a) adopt, amend or repeal the Proposed Bylaws, and to (b) amend or repeal or adopt
any provision inconsistent with Sections 1.2 and 3.1 of Article IV, or Article V, Article VII, Article VIII, Article IX, Article X, or
Section 1 of Article XI of the Proposed Certificate of Incorporation. This is intended to protect the Proposed Bylaws and certain key
provisions of the Proposed Certificate of Incorporation from arbitrary amendment and to prevent a simple majority of stockholders from
taking actions that may be harmful to other stockholders or making changes to provisions that are intended to protect all stockholders.
Advisory
Organizational Documents Proposal 4F — Exclusive Forum Provision
Adopting
Delaware as the exclusive forum for certain stockholder litigation is intended to assist Jet.AI in avoiding multiple lawsuits in multiple
jurisdictions regarding the same matter. The ability to require such claims to be brought in a single forum will help to assure consistent
consideration of the issues, the application of a relatively known body of case law and level of expertise and should promote efficiency
and cost-savings in the resolutions of such claims. The Oxbridge Board believes that the Delaware courts are best suited to address disputes
involving such matters given that after the Domestication, Jet.AI will be incorporated in Delaware. Delaware law generally applies to
such matters and the Delaware courts have a reputation for expertise in corporate law matters. Delaware offers a specialized Court of
Chancery to address corporate law matters, with streamlined procedures and processes, which help provide relatively quick decisions.
This accelerated schedule can minimize the time, cost and uncertainty of litigation for all parties. The Court of Chancery has developed
considerable expertise with respect to corporate law issues, as well as a substantial and influential body of case law construing Delaware’s
corporate law and long-standing precedent regarding corporate governance. This will provide Jet.AI and its stockholders with more predictability
regarding the outcome of intra-corporate disputes. In the event the Court of Chancery does not have jurisdiction, the other state courts
located in Delaware would be the most appropriate forums because these courts have more expertise on matters of Delaware law compared
to other jurisdictions; provided, that these exclusive forum provisions will not apply to suits brought to enforce any cause of action
arising under the Securities Act, any liability or duty created by the Exchange Act, or to any claim for which the federal courts have
exclusive jurisdiction.
In
addition, this amendment would promote judicial fairness and avoid conflicting results, as well as make Jet.AI’s defense of applicable
claims less disruptive and more economically feasible, principally by avoiding duplicative discovery.
Advisory
Organizational Documents Proposal 4G — Action by Written Consent of Stockholders
Under
the Proposed Organizational Documents, Jet.AI’s stockholders will have the ability to propose items of business (subject to the
restrictions set forth therein) at duly convened stockholder meetings. Eliminating the right of stockholders to act by written consent
limits the circumstances under which stockholders can act on their own initiative to remove directors, or alter or amend the Proposed
Organizational Documents outside of a duly called special or annual meeting of the stockholders of Jet.AI. Further, the Oxbridge Board
believes continuing to limit stockholders’ ability to act by written consent will reduce the time and effort the Jet.AI Board and
Jet.AI’s management would need to devote to stockholder proposals, which time and effort could distract Jet.AI’s directors
and management from other important company business.
In
addition, the elimination of the stockholders’ ability to act by written consent may have certain anti-takeover effects by forcing
a potential acquirer to take control of the Jet.AI Board only at a duly called special or annual meeting. However, this proposal is not
in response to any effort of which Oxbridge is aware to obtain control of Jet.AI, and Oxbridge and its management do not presently intend
to propose other anti-takeover measures in future proxy solicitations. Further, the Oxbridge Board does not believe that the effects
of the elimination of stockholder action by written consent will create a significant impediment to a tender offer or other effort to
take control of Jet.AI. Inclusion of these provisions in the Proposed Organizational Documents might also increase the likelihood that
a potential acquirer would negotiate the terms of any proposed transaction with the Jet.AI Board and thereby help protect stockholders
from the use of abusive and coercive takeover tactics.
Advisory
Organizational Documents Proposal 4H — Corporate Name
The
Oxbridge Board believes that changing Oxbridge’s corporate name from “Oxbridge Acquisition Corp.” to “Jet.AI
Inc.” is desirable to reflect the Business Combination with Jet Token and to clearly identify Jet.AI as the publicly traded entity.
Advisory
Organizational Documents Proposal 4I — Perpetual Existence
The
Oxbridge Board believes that making Jet.AI’s corporate existence perpetual is desirable since perpetual existence is the usual
period of existence for corporations and it believes that it is the most appropriate period for Jet.AI following the Business Combination.
Advisory
Organizational Documents Proposal 4J — Provisions Related to Status as a Blank Check Company
The
Oxbridge Board believes that the elimination of certain provisions related to Oxbridge’s status as a blank check company is desirable
because these provisions will serve no purpose following the Business Combination. For example, certain provisions in the Existing Organizational
Documents require that proceeds from the IPO be held in the Trust Account until a business combination or liquidation of Oxbridge has
occurred. These provisions cease to apply once the Business Combination is consummated and are therefore not included in the Proposed
Organizational Documents.
Vote
Required for Approval
The
approval of each of the Advisory Organizational Documents Proposals, each of which is a non-binding advisory vote, requires an ordinary
resolution under Cayman Islands law, being the affirmative vote (in person, online or by proxy) of a majority of the Class A Ordinary
Shares and Class B Ordinary Shares entitled to vote and actually casting votes thereon at the extraordinary general meeting, voting as
a single class. Abstentions and broker non-votes, while considered present for purposes of establishing quorum, will not count as a vote
cast at the extraordinary general meeting. Accordingly, failure to vote in person, online or by proxy at the extraordinary general meeting
or an abstention from voting will have no effect on the outcome of the vote on the Advisory Organizational Documents Proposals.
The
Advisory Organizational Documents Proposals are conditioned on the approval of each of the other Condition Precedent Proposals. Therefore,
if each of the other Condition Precedent Proposals is not approved, the Advisory Organizational Documents Proposals will have no effect,
even if approved by holders of the Ordinary Shares.
As
discussed above, the Advisory Organizational Documents Proposals are advisory votes and therefore are not binding on Oxbridge or the
Oxbridge Board. Accordingly, regardless of the outcome of the non-binding advisory vote on the Advisory Organizational Documents Proposals,
Oxbridge intends that the Proposed Organizational Documents will take effect upon the Closing (assuming approval of the Organizational
Documents Proposal).
Recommendation
of the Oxbridge Board
THE
OXBRIDGE BOARD RECOMMENDS THAT OXBRIDGE SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSALS.
PROPOSAL
NO. 5 — THE OMNIBUS INCENTIVE PLAN PROPOSAL
Overview
In
this Proposal No. 5, we are asking our shareholders to approve the 2023 Jet.AI Inc. Omnibus Incentive Plan, which we refer to herein
as the Omnibus Incentive Plan. A total of [394,328] shares of Jet.AI Common Stock will initially be reserved for issuance under
the Omnibus Incentive Plan. The Oxbridge Board approved the Omnibus Incentive Plan on [_____], 2023, subject to stockholder approval
at the extraordinary general meeting. If shareholders approve this proposal, the Omnibus Incentive Plan will become effective on the
consummation of the Business Combination. If the Omnibus Incentive Plan is not approved by the shareholders, it will not become effective
and no awards will be granted thereunder.
If
the Omnibus Incentive Plan becomes effective, then no additional stock awards will be granted under the Jet Token Option Plans as in
effect immediately prior to the consummation of the Business Combination, although all outstanding stock awards granted under the Jet
Token Option Plans as in effect immediately prior to the consummation of the Business Combination will continue to be subject to the
terms and conditions as set forth in the agreements evidencing such stock awards and the terms of the applicable plan.
The
purpose of the Omnibus Incentive Plan is to advance the interests of Jet.AI and its stockholders by enabling Jet.AI and its subsidiaries
to attract and retain qualified individuals to perform services, to provide incentive compensation for such individuals in a form that
is linked to the growth and profitability of Jet.AI and increases in stockholder value, and to provide opportunities for equity participation
that align the interests of recipients with those of its stockholders.
The
Omnibus Incentive Plan will permit the board of directors of Jet.AI, or a committee or subcommittee thereof, to grant to eligible employees,
non-employee directors and consultants of Jet.AI and its subsidiaries non-statutory and incentive stock options, restricted stock awards,
restricted stock units (RSUs), stock appreciation rights (SARs), performance awards, non-employee director awards, and other stock-based
awards.
Subject
to adjustment, the maximum number of shares of Common Stock to be authorized for issuance under the Omnibus Incentive Plan is [394,328]
shares, with an annual increase on the first day of each calendar year beginning on January 1, 2024 and ending on January 1, 2033 equal
to: (A) such amount of shares of Common Stock such that the total number of shares available for issuance under the Omnibus Incentive
Plan, plus the total number of shares reserved for issuance under outstanding Jet Token Options and Jet Token RSU Awards assumed in connection
with the Business Combination, is equal to ten percent (10%) of the total number of shares then issued and outstanding as of the last
day of the prior fiscal year; and (B) such smaller number of shares of Common Stock as may be determined by the Board.
Our
Board of Directors is recommending that our stockholders approve the material terms of the Omnibus Incentive Plan as described below.
The summary is qualified in its entirety by reference to the specific language of the Omnibus Incentive Plan, a copy of which is attached
as Annex D.
Summary
of Sound Governance Features of the Omnibus Incentive Plan
The
board of directors believes that the Omnibus Incentive Plan contains several features that are consistent with protecting the interests
of our stockholders and sound corporate governance practices, including the following:
|
✔ |
Will
not be excessively dilutive to stockholders |
|
✔ |
No
re-pricing of “underwater” stock options or SARs without stockholder approval |
|
|
|
|
|
|
|
✔ |
No
tax gross-ups |
|
✔ |
No
reload options or SARs |
|
|
|
|
|
|
|
✔ |
Clawback
provisions |
|
✔ |
No
discounted options or SARs |
|
|
|
|
|
|
|
✔ |
Limits
on director compensation |
|
|
|
Summary
of the Omnibus Incentive Plan
The
following is a summary of the principal features of the Omnibus Incentive Plan. The summary is qualified in its entirety by reference
to the full text of the Omnibus Incentive Plan, which is set forth in Annex D.
Purpose
The
purpose of the Omnibus Incentive Plan is to advance the interests of Jet.AI and its stockholders by enabling Jet.AI and its subsidiaries
to attract and retain qualified individuals to perform services, to provide incentive compensation for such individuals in a form that
is linked to the growth and profitability of Jet.AI and increases in stockholder value, and to provide opportunities for equity participation
that align the interests of recipients with those of its stockholders.
Administration
The
board of directors of Jet.AI will administer the Omnibus Incentive Plan. The board has the authority under the Omnibus Incentive Plan
to delegate plan administration to a committee of the board or a subcommittee thereof, which is comprised of not less than two Non-Employee
Directors who are independent. The board of directors of Jet.AI or the committee of the board to which administration of the Omnibus
Incentive Plan has been delegated is referred to as the Committee. Subject to certain limitations, the Committee will have broad authority
under the terms of the Omnibus Incentive Plan to take certain actions under the plan.
To
the extent permitted by applicable law, the Committee may delegate to one or more of its members or to one or more officers of Jet.AI
such administrative duties or powers, as it may deem advisable. The Committee may authorize one or more directors or officers of Jet.AI
to designate employees, other than officers, non-employee directors, or 10% stockholders of Jet.AI, to receive awards under the Omnibus
Incentive Plan and determine the size of any such awards, subject to certain limitations.
No
Re-pricing
The
Committee may not, without prior approval of the stockholders of Jet.AI, effect any re-pricing of any previously granted “underwater”
option or SAR by: (i) amending or modifying the terms of the option or SAR to lower the exercise price or grant price; (ii) canceling
the underwater option or SAR in exchange for (A) cash; (B) replacement options or SARs having a lower exercise price or grant price;
or (C) other awards; or (iii) repurchasing the underwater options or SARs and granting new awards under the Omnibus Incentive Plan. An
option or SAR will be deemed to be “underwater” at any time when the fair market value of common stock of Jet.AI is less
than the exercise price of the option or the grant price of the SAR.
Stock
Subject to the Omnibus Incentive Plan
Subject
to adjustment (as described below), the maximum number of shares of Jet.AI Common Stock authorized for issuance under the Omnibus
Incentive Plan is [394,328] shares. This limit is also the limit on the number of incentive stock options that may be granted under the
Omnibus Incentive Plan.
Shares
that are issued under the Omnibus Incentive Plan or that are subject to outstanding awards will be applied to reduce the maximum number
of shares remaining available for issuance under the Omnibus Incentive Plan only to the extent they are used; provided, however, that
the full number of shares subject to a stock-settled SAR or other stock-based award will be counted against the shares authorized for
issuance under the Omnibus Incentive Plan, regardless of the number of shares actually issued upon settlement of such SAR or other stock-based
award. Any shares withheld to satisfy tax withholding obligations on awards issued under the Omnibus Incentive Plan, any shares withheld
to pay the exercise price or grant price of awards under the Omnibus Incentive Plan and any shares not issued or delivered as a result
of the “net exercise” of an outstanding option or settlement of a SAR in shares will not be counted against the shares authorized
for issuance under the Omnibus Incentive Plan and will be available again for grant under the Omnibus Incentive Plan. Shares subject
to awards settled in cash will again be available for issuance pursuant to awards granted under the Omnibus Incentive Plan. Any shares
related to awards granted under the Omnibus Incentive Plan that terminate by expiration, forfeiture, cancellation or otherwise without
the issuance of the shares will be available again for grant under the Omnibus Incentive Plan. Any shares repurchased by Jet.AI on the
open market using the proceeds from the exercise of an award will not increase the number of shares available for future grant of awards.
To the extent permitted by applicable law, shares issued in assumption of, or in substitution for, any outstanding awards of any entity
acquired in any form of combination by Jet.AI or a subsidiary or otherwise will not be counted against shares available for issuance
pursuant to the Omnibus Incentive Plan. The shares available for issuance under the Omnibus Incentive Plan may be authorized and unissued
shares or treasury shares.
Adjustments
In
the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split,
combination of shares, rights offering, divestiture or extraordinary dividend (including a spin off) or other similar change in the corporate
structure or shares of common stock of Jet.AI, the Committee will make the appropriate adjustment or substitution. These adjustments
or substitutions may be to the number and kind of securities and property that may be available for issuance under the Omnibus Incentive
Plan. In order to prevent dilution or enlargement of the rights of participants, the Committee may also adjust the number, kind, and
exercise price or grant price of securities or other property subject to outstanding awards.
Eligible
Participants
Awards
may be granted to employees, non-employee directors and consultants of Jet.AI or any of its subsidiaries. A “consultant”
for purposes of the Omnibus Incentive Plan is one who renders services to Jet.AI or its subsidiaries that are not in connection with
the offer and sale of its securities in a capital raising transaction and do not directly or indirectly promote or maintain a market
for its securities.
Types
of Awards
The
Omnibus Incentive Plan will permit Jet.AI to grant non-statutory and incentive stock options, restricted stock awards, restricted stock
units, performance awards, non-employee director awards and other stock based awards. Awards may be granted either alone or in addition
to or in tandem with any other type of award.
Stock
Options. Stock options entitle the holder to purchase a specified number of shares of common stock of Jet.AI at a specified price,
which is called the exercise price, subject to the terms and conditions of the stock option grant. The Omnibus Incentive Plan permits
the grant of both non-statutory and incentive stock options. Incentive stock options may be granted solely to eligible employees of Jet.AI
or its subsidiaries. Each stock option granted under the Omnibus Incentive Plan must be evidenced by an award agreement that specifies
the exercise price, the term, the number of shares underlying the stock option, the vesting and any other conditions. The exercise price
of each stock option granted under the Omnibus Incentive Plan must be at least 100% of the fair market value of a share of common stock
of Jet.AI as of the date the award is granted to a participant. Fair market value under the plan means, unless otherwise determined by
the Committee, the closing sale price of common stock of Jet.AI, as reported on the Nasdaq Stock Market, on the grant date. The Committee
will fix the terms and conditions of each stock option, subject to certain restrictions, such as a ten-year maximum term.
Restricted
Stock Awards and Restricted Stock Units. Restricted stock awards and/or restricted stock units, or RSUs, may be granted under the
Omnibus Incentive Plan. A restricted stock award is an award of common stock of Jet.AI that is subject to restrictions on transfer and
risk of forfeiture upon certain events, typically including termination of service. RSUs are similar to restricted stock awards except
that no shares are actually awarded to the participant on the grant date. The Committee will determine, and set forth in an award agreement,
the period of restriction, the number of shares of restricted stock awards or the number of RSUs granted, and other such conditions or
restrictions.
Performance
Awards. Performance awards, in the form of cash, shares of common stock of Jet.AI, other awards or a combination of both, may be
granted under the Omnibus Incentive Plan in such amounts and upon such terms as the Committee may determine. The Committee shall determine,
and set forth in an award agreement, the amount of cash and/or number of shares or other awards, the performance goals, the performance
periods and other terms and conditions. The extent to which the participant achieves his or her performance goals during the applicable
performance period will determine the amount of cash and/or number of shares or other awards earned by the participant.
Non-Employee
Director Awards. The Committee at any time and from time-to-time may approve resolutions providing for the automatic grant to non-employee
directors of non-statutory stock options. The Committee may also at any time and from time-to-time grant on a discretionary basis to
non-employee directors non-statutory stock options. In either case, any such awards may be granted singly, in combination, or in tandem,
and may be granted pursuant to such terms, conditions and limitations as the Committee may establish in its sole discretion consistent
with the provisions of the Omnibus Incentive Plan. The Committee may permit non-employee directors to elect to receive all or any portion
of their annual retainers, meeting fees or other fees in restricted stock, RSUs, or other stock-based awards in lieu of cash. Under the
Omnibus Incentive Plan the sum of any cash compensation, or other compensation, and the value (determined as of the grant date in accordance
with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of awards granted to
a non-employee director as compensation for services as a non-employee director during any fiscal year of the Company may not exceed
$1,000,000.
Other
Stock-Based Awards. Consistent with the terms of the plan, other stock-based awards may be granted to participants in such amounts
and upon such terms as the Committee may determine.
Dividend
Equivalents. With the exception of stock options and unvested performance awards, awards under the Omnibus Incentive Plan may, in
the Committee’s discretion, earn dividend equivalents with respect to the cash or stock dividends or other distributions that would
have been paid on the shares of common stock of Jet.AI covered by such award had such shares been issued and outstanding on the dividend
payment date. However, no dividends or dividend equivalents may be paid on unvested awards. Such dividend equivalents will be converted
to cash or additional shares of common stock of Jet.AI by such formula and at such time and subject to such limitations as determined
by the Committee.
Termination
of Employment or Other Service
The
Omnibus Incentive Plan provides for certain default rules in the event of a termination of a participant’s employment or other
service. These default rules may be modified in an award agreement or an individual agreement between Jet.AI and a participant. If a
participant’s employment or other service with Jet.AI is terminated for cause, then all outstanding awards held by such participant
will be terminated and forfeited. In the event a participant’s employment or other service with Jet.AI is terminated by reason
of death, disability or retirement, then:
| ● | All
outstanding stock options (excluding non-employee director options in the case of retirement)
and SARs held by the participant will, to the extent exercisable, remain exercisable for
a period of one year after such termination, but not later than the date the stock options
or SARs expire; |
| ● | All
outstanding stock options and SARs that are not exercisable and all outstanding restricted
stock will be terminated and forfeited; and |
| ● | All
outstanding unvested RSUs, performance awards and other stock-based awards held by the participant
will terminate and be forfeited. However, with respect to any awards that vest based on the
achievement of performance goals, if a participant’s employment or other service with
Jet.AI or any subsidiary is terminated prior to the end of the performance period of such
award, but after the conclusion of a portion of the performance period (but in no event less
than one year), the Committee may, in its sole discretion, cause shares to be delivered or
payment made with respect to the participant’s award, but only if otherwise earned
for the entire performance period and only with respect to the portion of the applicable
performance period completed at the date of such event, with proration based on the number
of months or years that the participant was employed or performed services during the performance
period. |
In
the event a participant’s employment or other service with Jet.AI is terminated by reason other than for cause, death, disability
or retirement, then:
| ● | All
outstanding stock options (including non-employee director options) and SARs held by the
participant that then are exercisable will remain exercisable for three months after the
date of such termination, but will not be exercisable later than the date the stock options
or SARs expire; |
| ● | All
outstanding restricted stock will be terminated and forfeited; and |
| ● | All
outstanding unvested RSUs, performance awards and other stock-based awards will be terminated
and forfeited. However, with respect to any awards that vest based on the achievement of
performance goals, if a participant’s employment or other service with Jet.AI or any
subsidiary is terminated prior to the end of the performance period of such award, but after
the conclusion of a portion of the performance period (but in no event less than one year),
the Committee may, in its sole discretion, cause shares to be delivered or payment made with
respect to the participant’s award, but only if otherwise earned for the entire performance
period and only with respect to the portion of the applicable performance period completed
at the date of such event, with proration based on the number of months or years that the
participant was employed or performed services during the performance period. |
Modification
of Rights upon Termination
Upon
a participant’s termination of employment or other service with Jet.AI or any subsidiary, the Committee may, in its sole discretion
(which may be exercised at any time on or after the grant date, including following such termination) cause stock options or SARs (or
any part thereof) held by such participant as of the effective date of such termination to terminate, become or continue to become exercisable
or remain exercisable following such termination of employment or service, and restricted stock, RSUs, performance awards, non-employee
director awards and other stock-based awards held by such participant as of the effective date of such termination to terminate, vest
or become free of restrictions and conditions to payment, as the case may be, following such termination of employment or service, in
each case in the manner determined by the Committee; provided, however, that no stock option or SAR may remain exercisable beyond its
expiration date any such action by the Committee adversely affecting any outstanding award will not be effective without the consent
of the affected participant, except to the extent the Committee is authorized by the Omnibus Incentive Plan to take such action.
Forfeiture
and Recoupment
If
a participant is determined by the Committee to have taken any action while providing services to Jet.AI or within one year after termination
of such services, that would constitute “cause” or an “adverse action,” as such terms are defined in the Omnibus
Incentive Plan, all rights of the participant under the Omnibus Incentive Plan and any agreements evidencing an award then held by the
participant will terminate and be forfeited. The Committee has the authority to rescind the exercise, vesting, issuance or payment in
respect of any awards of the participant that were exercised, vested, issued or paid, and require the participant to pay to Jet.AI, within
10 days of receipt of notice, any amount received or the amount gained as a result of any such rescinded exercise, vesting, issuance
or payment. Jet.AI may defer the exercise of any stock option or SAR for up to six months after receipt of notice of exercise in order
for the Board to determine whether “cause” or “adverse action” exists. Jet.AI is entitled to withhold and deduct
future wages or make other arrangements to collect any amount due.
In
addition, if Jet.AI is required to prepare an accounting restatement due to material noncompliance, as a result of misconduct, with any
financial reporting requirement under the securities laws, then any participant who is one of the individuals subject to automatic forfeiture
under Section 304 of the Sarbanes-Oxley Act of 2002 will reimburse Jet.AI for the amount of any award received by such individual under
the Omnibus Incentive Plan during the 12 month period following the first public issuance or filing with the SEC, as the case may be,
of the financial document embodying such financial reporting requirement. Jet.AI also may seek to recover any award made as required
by the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act or any other clawback, forfeiture or recoupment provision
required by applicable law or under the requirements of any stock exchange or market upon which common stock of Jet.AI is then listed
or traded or any policy adopted by Jet.AI.
Effect
of Change in Control
Generally,
a change in control will mean:
| ● | The acquisition,
other than from Jet.AI, by any individual, entity or group of beneficial ownership of 50% or more of the then outstanding shares of common
stock of Jet.AI; |
| ● | The consummation
of a reorganization, merger or consolidation of Jet.AI with respect to which all or substantially all of the individuals or entities
who were the beneficial owners of common stock of Jet.AI immediately prior to the transaction do not, following the transaction, beneficially
own more than 50% of the outstanding shares of common stock and voting securities of the corporation resulting from the transaction;
or |
| ● | A complete liquidation
or dissolution of Jet.AI or the sale or other disposition of all or substantially all of the assets of Jet.AI. |
Subject
to the terms of the applicable award agreement or an individual agreement between Jet.AI and a participant, upon a change in control,
the Committee may, in its discretion, determine whether some or all outstanding options and SARs shall become exercisable in full or
in part, whether the restriction period and performance period applicable to some or all outstanding restricted stock awards and RSUs
shall lapse in full or in part and whether the performance measures applicable to some or all outstanding awards shall be deemed to be
satisfied. The Committee may further require that shares of stock of the corporation resulting from such a change in control, or a parent
corporation thereof, be substituted for some or all of the shares of common stock of Jet.AI subject to an outstanding award and that
any outstanding awards, in whole or in part, be surrendered to Jet.AI by the holder, to be immediately cancelled by Jet.AI, in exchange
for a cash payment, shares of capital stock of the corporation resulting from or succeeding Jet.AI or a combination of both cash and
such shares of stock.
Term,
Termination and Amendment
Unless
sooner terminated by the Board, the Omnibus Incentive Plan will terminate at midnight on the day before the ten year anniversary of its
effective date. No award will be granted after termination of the Omnibus Incentive Plan, but awards outstanding upon termination of
the Omnibus Incentive Plan will remain outstanding in accordance with their applicable terms and conditions and the terms and conditions
of the Omnibus Incentive Plan.
Subject
to certain exceptions, the Board has the authority to suspend or terminate the Omnibus Incentive Plan or terminate any outstanding award
agreement and the Board has the authority to amend the Omnibus Incentive Plan or amend or modify the terms of any outstanding award at
any time and from time to time. No amendments to the Omnibus Incentive Plan will be effective without approval of Jet.AI’s stockholders
if: (a) stockholder approval of the amendment is then required pursuant to Section 422 of the Code, the rules of the primary stock exchange
on which common stock of Jet.AI is then traded, applicable U.S. state and federal laws or regulations and the applicable laws of any
foreign country or jurisdiction where awards are, or will be, granted under the Omnibus Incentive Plan; or (b) such amendment would:
(i) materially increase benefits accruing to participants; (ii) modify the re-pricing provisions of the Omnibus Incentive Plan; (iii)
increase the aggregate number of shares of common stock of Jet.AI issued or issuable under the Omnibus Incentive Plan; (iv) increase
any limitation set forth in the Omnibus Incentive Plan on the number of shares of common stock of Jet.AI which may be issued or the aggregate
value of awards which may be made, in respect of any type of award to any single participant during any specified period; (v) modify
the eligibility requirements for participants in the Omnibus Incentive Plan; or (vi) reduce the minimum exercise price or grant price
as set forth in the Omnibus Incentive Plan. No termination, suspension or amendment of the Omnibus Incentive Plan or an award agreement
shall adversely affect any award previously granted under the Omnibus Incentive Plan without the written consent of the participant holding
such award.
Federal
Income Tax Information
The
following is a general summary, as of the date of this prospectus/proxy statement, of the federal income tax consequences to participants
and Jet.AI of transactions under the Omnibus Incentive Plan. This summary is intended for the information of stockholders considering
how to vote at the Special Meeting and not as tax guidance to participants in the Omnibus Incentive Plan, as the consequences may vary
with the types of grants made, the identity of the participant and the method of payment or settlement. The summary does not address
the effects of other federal taxes or taxes imposed under state, local or foreign tax laws. Participants are encouraged to seek the advice
of a qualified tax advisor regarding the tax consequences of participation in the Omnibus Incentive Plan.
Tax
Consequences of Awards
Incentive
Stock Options. With respect to incentive stock options, generally, the participant is not taxed, and Jet.AI is not entitled to a
deduction, on either the grant or the exercise of an incentive stock option so long as the requirements of Section 422 of the Code continue
to be met. If the participant meets the employment requirements and does not dispose of the shares of common stock of Jet.AI acquired
upon exercise of an incentive stock option until at least one year after date of the exercise of the stock option and at least two years
after the date the stock option was granted, gain or loss realized on sale of the shares will be treated as long-term capital gain or
loss. If the shares of common stock of Jet.AI are disposed of before those periods expire, which is called a disqualifying disposition,
the participant will be required to recognize ordinary income in an amount equal to the lesser of (i) the excess, if any, of the fair
market value of common stock of Jet.AI on the date of exercise over the exercise price, or (ii) if the disposition is a taxable sale
or exchange, the amount of gain realized. Upon a disqualifying disposition, Jet.AI will generally be entitled, in the same tax year,
to a deduction equal to the amount of ordinary income recognized by the participant, assuming that a deduction is allowed under Section
162(m) of the Code.
Non-Statutory
Stock Options. The grant of a stock option that does not qualify for treatment as an incentive stock option, which is generally referred
to as a non-statutory stock option, is generally not a taxable event for the participant. Upon exercise of the stock option, the participant
will generally be required to recognize ordinary income in an amount equal to the excess of the fair market value of common stock of
Jet.AI acquired upon exercise (determined as of the date of exercise) over the exercise price of the stock option, and Jet.AI will be
entitled to a deduction in an equal amount in the same tax year, assuming that a deduction is allowed under Section 162(m) of the Code.
At the time of a subsequent sale or disposition of shares obtained upon exercise of a non-statutory stock option, any gain or loss will
be a capital gain or loss, which will be either a long-term or short-term capital gain or loss, depending on how long the shares have
been held.
SARs.
The grant of an SAR will not cause the participant to recognize ordinary income or entitle Jet.AI to a deduction for federal income
tax purposes. Upon the exercise of an SAR, the participant will recognize ordinary income in the amount of the cash or the value of shares
payable to the participant (before reduction for any withholding taxes), and Jet.AI will receive a corresponding deduction in an amount
equal to the ordinary income recognized by the participant, assuming that a deduction is allowed under Section 162(m) of the Code.
Restricted
Stock, RSUs, and Other Stock-Based Awards. The federal income tax consequences with respect to restricted stock, RSUs, performance
shares and performance stock units, and other stock unit and stock-based awards depend on the facts and circumstances of each award,
including, in particular, the nature of any restrictions imposed with respect to the awards. In general, if an award of stock granted
to the participant is subject to a “substantial risk of forfeiture” (e.g., the award is conditioned upon the future performance
of substantial services by the participant) and is nontransferable, a taxable event occurs when the risk of forfeiture ceases or the
awards become transferable, whichever first occurs. At such time, the participant will recognize ordinary income to the extent of the
excess of the fair market value of the stock on such date over the participant’s cost for such stock (if any), and the same amount
is deductible by Jet.AI, assuming that a deduction is allowed under Section 162(m) of the Code. Under certain circumstances, the participant,
by making an election under Section 83(b) of the Code, can accelerate federal income tax recognition with respect to an award of stock
that is subject to a substantial risk of forfeiture and transferability restrictions, in which event the ordinary income amount and Jet.AI’s
deduction, assuming that a deduction is allowed under Section 162(m) of the Code, will be measured and timed as of the grant date of
the award. If the stock award granted to the participant is not subject to a substantial risk of forfeiture or transferability restrictions,
the participant will recognize ordinary income with respect to the award to the extent of the excess of the fair market value of the
stock at the time of grant over the participant’s cost, if any, and the same amount is deductible by us, assuming that a deduction
is allowed under Section 162(m) of the Code. If a stock unit award or other stock-based award is granted but no stock is actually issued
to the participant at the time the award is granted, the participant will recognize ordinary income at the time the participant receives
the stock free of any substantial risk of forfeiture (or receives cash in lieu of such stock) and the amount of such income will be equal
to the fair market value of the stock at such time over the participant’s cost, if any, and the same amount is then deductible
by Jet.AI, assuming that a deduction is allowed under Section 162(m) of the Code.
Withholding
Obligations
Jet.AI
is entitled to withhold and deduct from future wages of the participant, to make other arrangements for the collection of, or to require
the participant to pay to Jet.AI, an amount necessary for it to satisfy the participant’s federal, state or local tax withholding
obligations with respect to awards granted under the Omnibus Incentive Plan. Withholding for taxes may be calculated based on the maximum
applicable tax rate for the participant’s jurisdiction or such other rate that will not trigger a negative accounting impact on
Jet.AI. The Committee may permit a participant to satisfy a tax withholding obligation by withholding shares of common stock of Jet.AI
underlying an award, tendering previously acquired shares, delivery of a broker exercise notice or a combination of these methods.
Code
Section 409A
A
participant may be subject to a 20% penalty tax, in addition to ordinary income tax, at the time a grant becomes vested, plus an interest
penalty tax, if the grant constitutes deferred compensation under Section 409A of the Code and the requirements of Section 409A of the
Code are not satisfied.
Code
Section 162(m)
Pursuant
to Section 162(m) of the Code, the annual compensation paid to an individual who is a “covered employee” is not deductible
by Jet.AI to the extent it exceeds $1 million. The Tax Cut and Jobs Act, signed into law on December 22, 2017, amended Section 162(m),
effective for tax years beginning after December 31, 2017, (i) to expand the definition of a “covered employee” to include
any person who was the Chief Executive Officer or the Chief Financial Officer at any time during the year and the three most highly compensated
officers (other than the Chief Executive Officer or the Chief Financial Officer) who were employed at any time during the year whether
or not the compensation is reported in the Summary Compensation Table included in the proxy statement for Jet.AI’s Annual Meeting;
(ii) to treat any individual who is considered a covered employee at any time during a tax year beginning after December 31, 2106 as
remaining a covered employee permanently; and (iii) to eliminate the performance-based compensation exception to the $1 million deduction
limit.
Excise
Tax on Parachute Payments
Unless
otherwise provided in a separate agreement between a participant and Jet.AI, if, with respect to a participant, the acceleration of the
vesting of an award or the payment of cash in exchange for all or part of an award, together with any other payments that such participant
has the right to receive from Jet.AI, would constitute a “parachute payment” then the payments to such participant will be
reduced to the largest amount as will result in no portion of such payments being subject to the excise tax imposed by Section 4999 of
the Code. Such reduction, however, will only be made if the aggregate amount of the payments after such reduction exceeds the difference
between the amount of such payments absent such reduction minus the aggregate amount of the excise tax imposed under Section 4999 of
the Code attributable to any such excess parachute payments. If such provisions are applicable and if an employee will be subject to
a 20% excise tax on any “excess parachute payment” pursuant to Section 4999 of the Code, Jet.AI will be denied a deduction
with respect to such excess parachute payment pursuant to Section 280G of the Code.
New
Plan Benefits
It
is not presently possible to determine the benefits or amounts that will be received by or allocated to participants under the Omnibus
Incentive Plan or would have been received by or allocated to participants for the last completed fiscal year if the Omnibus Incentive
Plan had then been in effect because awards under the Omnibus Incentive Plan will be made at the discretion of the Committee.
Registration
with the SEC
If
the Omnibus Incentive Plan is approved by Oxbridge’s shareholders, Jet.AI intends to file a registration statement on Form S-8
registering the shares reserved for issuance under the Omnibus Incentive Plan as soon as reasonably practicable after Jet.AI becomes
eligible to use such form.
Vote
Required for Approval
The
approval of the Omnibus Incentive Plan Proposal requires the affirmative vote (in person, online or by proxy) of the holders of a majority
of the Class A Ordinary Shares and Class B Ordinary Shares entitled to vote and actually casting votes thereon at the extraordinary general
meeting, voting as a single class. Abstentions and broker non-votes, while considered present for purposes of establishing quorum, will
not count as a vote cast at the extraordinary general meeting. Accordingly, failure to vote in person, online or by proxy at the extraordinary
general meeting or an abstention from voting will have no effect on the outcome of the vote on the Omnibus Incentive Plan Proposal.
The
Omnibus Incentive Plan Proposal is conditioned on the approval of each of the other Condition Precedent Proposals. Therefore, if each
of the other Condition Precedent Proposals is not approved, the Omnibus Incentive Plan Proposal will have no effect, even if approved
by holders of the Ordinary Shares.
Recommendation
of the Oxbridge Board
THE
OXBRIDGE BOARD RECOMMENDS THAT OXBRIDGE SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE OMNIBUS INCENTIVE PLAN PROPOSAL.
PROPOSAL
NO. 6 — THE DIRECTOR ELECTION PROPOSAL
Overview
The
Oxbridge Board currently consists of five members. The term of office of our directors, consisting of Wrendon Timothy,
Jay Madhu, Jason Butcher, Allan Martin, and William Yankus, will expire at our first annual general meeting.
In
addition, the Existing Organizational Documents provide that each director shall serve until his or her successor is elected and
qualified or until his or her earlier death, resignation, disqualification or removal. Pursuant to the Business Combination
Agreement, all of Oxbridge’s current directors, other than Wrendon Timothy and Jay Madhu, will resign as of the
Effective Time and will not serve as members of the Jet.AI Board after the Effective Time.
Pursuant
to the Business Combination Agreement and the Proposed Certificate of Incorporation, effective immediately after the Effective Time,
we will expand the size of the Jet.AI Board from four directors to seven directors, and the Jet.AI Board will consist of Michael Winston,
George Murnane, Jay Madhu, Wrendon Timothy and three additional directors, at least two of whom will be independent. It is currently
contemplated that two independent directors will be nominated to serve as Class I directors, Jay Madhu and Wrendon Timothy will be nominated to serve as Class II directors and Michael Winston, George Murnane and a third director will
be nominated to serve as Class III directors.
In
addition, the Proposed Organizational Documents provide that each director shall serve until his or her successor is elected and qualified
or until his or her earlier death, resignation, disqualification or removal.
Information
regarding each nominee is set forth in the section entitled “Management After the Business Combination.”
Resolution
The
full text of the resolution to be passed is as follows:
“RESOLVED,
as an ordinary resolution, that the persons named below be elected to serve on the Jet.AI Board, effective upon the consummation of the
Business Combination.”
Name
of Director |
|
Class
of Director |
Michael
Winston |
|
Class
III |
George
Murnane |
|
Class
III |
Jay
Madhu |
|
Class
II |
Wrendon
Timothy |
|
Class
II |
Vote
Required for Approval
The
approval of the Director Election Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote (in person,
online or by proxy) of a majority of the Class B Ordinary Shares entitled to vote and actually casting votes thereon at the extraordinary
general meeting. Under the terms of the Existing Organizational Documents, only the holders of Class B Ordinary Shares are entitled to
vote on the election of directors to the Oxbridge Board. Abstentions and broker non-votes, while considered present for the purposes
of establishing a quorum, will not count as votes cast at the extraordinary general meeting. Accordingly, failure to vote in person,
online or by proxy at the extraordinary general meeting or an abstention from voting will have no effect on the outcome of the vote on
the Director Election Proposal.
The
Director Election Proposal is conditioned on the approval of each of the other Condition Precedent Proposals. Therefore, if each of the
other Condition Precedent Proposals is not approved, the Director Election Proposal will have no effect, even if approved by holders
of the Class B Ordinary Shares.
Recommendation
of the Oxbridge Board
THE
OXBRIDGE BOARD RECOMMENDS THAT OXBRIDGE SHAREHOLDERS VOTE “FOR ALL NOMINEES” FOR ELECTION TO THE OXBRIDGE BOARD.
PROPOSAL
NO. 7 — THE ADJOURNMENT PROPOSAL
Overview
The
Adjournment Proposal, if adopted, will allow the Oxbridge Board to adjourn the extraordinary general meeting to a later date or dates,
if necessary or appropriate, to permit further solicitation and vote of proxies. The Adjournment Proposal will only be presented to our
shareholders in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination
Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Advisory Organizational Documents Proposals, the Omnibus
Incentive Plan Proposal, or the Director Election Proposal. If our shareholders approve the Adjournment Proposal, we may adjourn the
extraordinary general meeting and any adjourned session of the extraordinary general meeting and use the additional time to solicit additional
proxies, including the solicitation of proxies from our shareholders who have voted previously.
Consequences
if the Adjournment Proposal is Not Approved
If
the Adjournment Proposal is not approved by Oxbridge shareholders, the Oxbridge Board may not be able to adjourn the extraordinary general
meeting to a later date in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business
Combination Proposal, the Domestication Proposal, the Organizational Documents Proposal, the Advisory Organizational Documents Proposals,
the Omnibus Incentive Plan Proposal, or the Director Election Proposal.
Resolution
The
full text of the resolution to be passed is as follows:
“RESOLVED,
as an ordinary resolution, that the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit
further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more Proposals at
the extraordinary general meeting.”
Vote
Required for Approval
The
Adjournment Proposal is not conditioned on the approval of any other Proposal at the extraordinary general meeting.
The
approval of the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote (in person,
online or by proxy) of a majority of the Class A Ordinary Shares and Class B Ordinary Shares entitled to vote and actually casting votes
thereon at the extraordinary general meeting, voting as a single class. Abstentions and broker non-votes, while considered present for
the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting. Accordingly, failure to vote
in person, online or by proxy at the extraordinary general meeting or an abstention from voting will have no effect on the outcome of
the vote on the Adjournment Proposal.
Recommendation
of the Oxbridge Board
THE
OXBRIDGE BOARD RECOMMENDS THAT OXBRIDGE SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE ADJOURNMENT PROPOSAL.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND
RESULTS OF OPERATIONS OF JET TOKEN
The
following discussion and analysis provides information which Jet Token’s management believes is relevant to an assessment and understanding
of its consolidated results of operations and financial condition. You should read the following discussion and analysis of Jet Token’s
financial condition and results of operations together with the section entitled “Summary of the Proxy Statement/Prospectus —
Selected Historical Financial Data of Jet Token” and Jet Token’s audited consolidated financial statements and the related
notes thereto included elsewhere in this proxy statement/prospectus. This discussion and analysis should also be read together with the
unaudited pro forma condensed combined financial information as of and for the year ended December 31, 2022 and the accompanying notes
thereto included elsewhere in this proxy statement/prospectus. See the section entitled “Unaudited Pro Forma Condensed Combined
Financial Information.”
Certain
of the information contained in this discussion and analysis or set forth elsewhere in this proxy statement/prospectus, including information
with respect to plans and strategy for Jet Token’s business, includes forward-looking statements that involve risks and uncertainties.
As a result of many factors, including those factors set forth in the section entitled “Risk Factors,” Jet Token’s
actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following
discussion and analysis. Factors that could cause or contribute to such differences include, but are not limited to, capital expenditures,
economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere
in this proxy statement/prospectus. We assume no obligation to update any of these forward-looking statements. Please also see the section
entitled “Cautionary Note Regarding Forward-Looking Statements.”
Percentage
amounts included in this proxy statement/prospectus have not in all cases been calculated on the basis of such rounded figures, but on
the basis of such amounts prior to rounding. For this reason, percentage amounts in this proxy statement/prospectus may vary from those
obtained by performing the same calculations using the figures in the audited consolidated financial statements included elsewhere in
this proxy statement/prospectus. Certain other amounts that appear in this proxy statement/prospectus may not sum due to rounding.
Overview
Jet
Token, a Delaware corporation, was founded in 2018 by Michael Winston, its Executive Chairman. Jet Token, directly and indirectly through
its subsidiaries, is principally involved in (i) the sale of fractional and whole interests in aircraft, (ii) the sale of jet cards,
which enable holders to use certain of Jet Token’s and other’s aircraft at agreed-upon rates, (iii) the operation of a proprietary
booking platform (the “App”), which functions as a prospecting and quoting platform to arrange private jet travel with third
party carriers as well as via Jet Token’s leased and managed aircraft, for Part 135 (whole aircraft charter) and Part 380 (by the
seat charter), and (iv) since January 2023, joint ownership, alongside its existing operating partner, Cirrus, of 380 Software LLC, which
supplies the technology to sell individual seats on empty legs on the Cirrus fleet of aircraft.
Results
of Operations
Year
Ended December 31, 2022 and December 31, 2021
| |
2022 | | |
2021 | |
| |
| | |
| |
Revenues | |
$ | 21,862,728 | | |
$ | 1,112,195 | |
| |
| | | |
| | |
Cost of revenues | |
| 19,803,739 | | |
| 1,383,100 | |
| |
| | | |
| | |
Gross profit (loss) | |
| 2,058,989 | | |
| (270,905 | ) |
| |
| | | |
| | |
Operating Expenses: | |
| | | |
| | |
General and administrative (including stock-based compensation of $6,492,653 and $12,690,091, respectively) | |
| 9,230,789 | | |
| 14,879,597 | |
Sales and marketing | |
| 426,728 | | |
| 704,724 | |
Research and development | |
| 137,278 | | |
| 117,391 | |
Total operating expenses | |
| 9,794,795 | | |
| 15,701,712 | |
| |
| | | |
| | |
Operating loss | |
| (7,735,806 | ) | |
| (15,972,617 | ) |
| |
| | | |
| | |
Other (income) expense: | |
| | | |
| | |
Other income | |
| (3 | ) | |
| (207,368 | ) |
Total other (income) expense | |
| (3 | ) | |
| (207,368 | ) |
| |
| | | |
| | |
Loss before provision for income taxes | |
| (7,735,803 | ) | |
| (15,765,249 | ) |
| |
| | | |
| | |
Provision for income taxes | |
| 2,400 | | |
| - | |
| |
| | | |
| | |
Net Loss | |
$ | (7,738,203 | ) | |
$ | (15,765,249 | ) |
| |
| | | |
| | |
Weighted average shares outstanding - basic and diluted | |
| 122,747,555 | | |
| 118,503,131 | |
Net loss per share - basic and diluted | |
$ | (0.06 | ) | |
$ | (0.13 | ) |
Jet
Token generates revenue from three primary sources: (i) the sale of fractional and whole interests in aircraft, (ii) the sale of jet
cards, which enable holders to use certain of Jet Token’s and other’s aircraft at agreed-upon rates, (iii) the operation
of an App - a proprietary booking platform - which functions as a prospecting and quoting platform to arrange private jet travel with
third party carriers as well as via Jet Token’s leased and managed aircraft, for Part 135 (whole aircraft charter) and Part 180
(by the seat charter).
Under
Jet Token’s fractional ownership program, a customer can purchase an ownership share in a jet which guarantees the customer access
to the jet for a preset number of hours per year. The fractional ownership program consists of an initial buy-in or upfront fee and a
fixed hourly rate for flight hours. Jet Token’s jet card program provides the customer with a preset number of hours of private
jet access at a fixed hourly rate over the agreement term (generally a year), typically paid 100% upfront. Jet Token also receives commission-based
revenue for sales of jet card on behalf of Cirrus and engages in whole aircraft brokerage. Jet Token recognizes revenue from sales of
its jet cards and fractional ownership interests and from commissions on charters upon transfer of control of its promised services,
which generally occurs upon the flight hours being used or, in the case of unused hours under the fractional jet and jet card programs,
at the end of the contract term. Jet Token recognizes revenue from the sales of Cirrus jet cards upon payment by the program member.
Jet
Token began recording revenue in September 2020 reflecting services and brokerage fees related to charter bookings through its App.
In July 2021, Jet Token leased a HondaJet under a short- term lease arrangement, terminated in February 2022, and acquired its first
HondaJet Elite in November 2021, incurring operating expenses related to the lease of its aircraft and payments to Cirrus for the
management of Jet Token’s aircraft. In 2021, Jet Token booked $645,996 in revenue related to its charter bookings. Jet Token
also sold 125 prepaid flight hours in 2021 under its jet card program, recording $618,750 of revenue for hours flown and $436,331 of
deferred revenue related to prepaid flight hours for which the related travel had not yet occurred. Jet Token recorded higher costs
of revenues than revenues in 2021 primarily as a result of carrying approximately seven months of costs for pilots trained for Jet
Token’s aircraft prior to leasing an aircraft in July and initial sales of pre-paid flight hours.
In
2022, Jet Token sold 449 prepaid flight hours, representing approximately $2.3 million of unearned revenue, and flew 359 prepaid
flight hours representing $1.9 million of recognized revenue and $0.4 million of additional charges. Prepaid flight hours
are booked as revenue as the flight hours are used or forfeited, as discussed above.
Jet
Token recorded a net loss of approximately 15.8 million in 2021, primarily reflecting an increase in stock-based compensation resulting
from the vesting of options, non-cash expenses, from approximately $683,000 in 2020 to approximately 12.7 million in 2021, as well as
the ramp up of costs and expenses prior to Jet Token’s lease of an aircraft in July 2021. Jet Token’s other operating expenses
increased in 2021 primarily as a result of an increase of approximately $767,000 in general and administrative expenses relating to increased
wages related to two new hires focused primarily on sales and marketing, commissions payable on jet card sales and higher professional
services. In addition, sales and marketing expenses, which relate primarily to promoting Jet Token and its programs, increased by approximately
$260,000 in 2021. Jet Token also incurred research and development expenses in 2021 for the development of the App.
Jet
Token recorded a net loss of approximately $7.7 million in 2022, a reduction in loss of roughly $8.1 million, primarily reflecting a
decrease in stock-based compensation resulting from the vesting of options, non-cash expenses, from approximately $12.7 million in 2021
to approximately $6.5 million in 2022, as well as improvement in Gross Profit in 2022 to $2.1 million from $(0.3) million in 2021. Jet
Token’s other operating expenses increased in 2022 primarily as a result of an increase of approximately $548,000 in general and
administrative expenses relating to increased commissions payable on fractional and jet card sales. In addition, sales and marketing
expenses, which relate primarily to promoting Jet Token and its programs, decreased by approximately $278,000 in 2022 while the company
paused and then reaccelerated spending upon aircraft delivery and the related increase in marketable jet card inventory.
Liquidity
and Capital Resources.
As
of December 31, 2022, Jet Token’s cash and equivalents were approximately $1.5 million, including approximately $500,000 of restricted
cash under its aircraft leasing arrangements described below. This compares to approximately $643,000 as of December 31, 2021, with the
increase reflecting primarily the increase of approximately $1.0 million in net cash from Jet Token’s operating activities. It
also reflects Jet Token having received a higher level of net offering proceeds from its 2021 Regulation A offering of non-voting common
stock, which launched in June 2021 and terminated in January 2023.
The
private jet industry in 2021 and 2022 experienced a protracted period of strong demand such that Jet Token’s largest competitors
suspended sales entirely for periods of time, and offered wait-list participation in their jet card and fractional ownership programs.
In 2023, our largest competitors have returned to market though generally with higher prices and more restrictive program rules.
To
date, Jet Token has funded its operations through a combination of operations, the issuance of equity securities and, to a lesser extent,
loans and advances from its Executive Chairman. In February 2020, Jet Token commenced an offering under Regulation A for a maximum offering
amount of $10 million, which terminated on December 31, 2020. Jet Token issued 32,942,282 shares of non-voting common stock in this offering
representing approximately $9.9 million in gross proceeds. From June 2021 to January of 2023, Jet Token commenced another offering under
Regulation A and issued 8,739,322 shares representing approximately $6.6 million in gross proceeds.
In
November 2021 and April 2022, Jet Token entered into five-year leasing arrangements for the financing of its HondaJet Elite aircraft.
At any time during the term, Jet Token has the option to purchase either aircraft from the lessor at the aircraft’s fair market
value at that time. The leasing arrangements also require Jet Token to hold a liquidity reserve of $500,000 in a separate bank account
pledged as security to the lessor, which Jet Token records as restricted cash on its balance sheet, as well as a maintenance reserve
of approximately $690,000 for each leased aircraft, which is held by the lessor in the event the lessor determines that the relevant
aircraft is not being maintained in accordance with the lease requirements or to prevent deterioration of the aircraft. Events of default
under the leasing arrangements include, among other things, failure to make the monthly payments (with a 10-day cure period), default
on other indebtedness, breaches of covenants related to insurance and maintenance requirements, change of control or merger, insolvency
and a material adverse change in Jet Token’s business, operations or financial condition. Please see Note 5 to Jet Token’s
financial statements for the fiscal year ended December 31, 2022 included herein for a further description of these leasing arrangements.
In
March 2023, Jet Token sold a 5/5 fractional interest in one of its HondaJet Elite aircraft, which netted Jet Token approximately $600,000
of proceeds over the leased cost. The sale additionally resulted in the rebate of approximately $690,000 of maintenance reserve and the
release of $500,000 of liquidity reserve pledges as security to the lessor. The aircraft remains in normal day-to-day use under Jet Token’s
operational control in Las Vegas (via Cirrus) where it continues to be available to program members, jet card members and charter customers,
respectively.
In
June 2022, Jet Token received an unsolicited offer for the outright purchase of one of its HondaJet Elite aircraft, which netted Jet
Token approximately $1.2 million of proceeds over the leased cost. After internal financial and legal review, Jet Token determined that
the sale of the aircraft would offer a net benefit to its stakeholders. Jet Token considered a number of factors in making this decision,
including but not limited to: (1) the availability of replacement aircraft, (2) pilot availability, (3) the time to register the aircraft
for commercial use, and (4) the risk adjusted lifetime return on capital associated with operating the aircraft relative to the purchase
price offered.
In
May 2020, Jet Token received a loan in the amount of $121,000 pursuant to the Paycheck Protection Program (“PPP”) under the
Coronavirus Aid, Relief, and Economic Security (“CARES”) Act which has been forgiven in its entirety. In February 2021, Jet
Token received a second loan in the amount of $86,360 pursuant to the PPP program under the revised CARES Act, which has also been forgiven
in its entirety. In July 2021, Jet Token entered into a loan agreement with StartEngine Primary, LLC, which allows for advances up to
an aggregate amount of $500,000 to pay for advertising and promotion services in connection with Jet Token’s equity offering. The
advances are non-interest bearing and are repaid from the proceeds of Jet Token’s offering. As of December 31, 2021, Jet Token
had a balance of $194,727 due on this loan which has subsequently been repaid in full. See Note 4 to Jet Token’s audited financial
statements for the fiscal year ended December 31, 2022 included herein for a description of these loans.
In
2020, Jet Token’s Founder and Executive Chairman, Mike Winston, advanced approximately $80,000 in the form of a non-interest-bearing
loan, which was repaid in full during 2020. In 2021, he advanced approximately $200,000 in the form of a non-interest-bearing loan, all
of which was repaid in full during 2022.
Plan
of Operation
Aviation
Jet
Token contemplates acquiring addition aircraft to grow its business and it currently anticipates financing the acquisition of such aircraft
through the sale of fractional and whole interests, debt/lease financing and advanced sales of flight time.
In
the fourth quarter of 2022, we launched the Onboard Program to allow aircraft owners to contribute their aircraft to Jet Token’s
charter and jet card inventory. The Onboard Program requires one month FAA conformity of aircraft onto the Cirrus Aviation Part 135 certificate,
a one week pilot recertification course for charter operation and execution of a limited management agreement.
Software
Jet
Token plans to reorganize and to recharacterize its software development efforts under the banner of a new suite of SaaS products
termed “Jet.AI Fleet Management” as follows:
| 1. | CharterGPT
powered by Jet.AI: We plan to build a natural language interface charter app to replace the
existing Jet Token app found in the iOS/Android stores, respectively. For more information
on the proposed features and benefits please see the section of this proxy statement/prospectus
entitled “Strategy – Artificial Intelligence.” The CharterGPT app
would be expected to be made available to the public in advance of or simultaneous with the
closing of the proposed Business Combination. |
| 2. | Flight
Club API powered by Jet.AI: The Flight Club API enables FAA Part 135 operators to function
simultaneously under FAA Part 380 which permits sale of private jet service by the seat instead
of by whole aircraft. The Flight Club software integrates front end ticketing and payment
collection with the flight management systems of an FAA Part 135 operator. It automates the
process of filing forms for each flight with DOT and conforms with DOT escrow requirements
around ticketing and movement of customer funds. |
| 3. | Reroute
powered
by Jet.AI: The technology enables FAA Part 135 operators to earn additional revenue on
certain unoccupied flights. It suggests to an operator if it may reroute aircraft waiting
to return to base into new charter bookings to destinations within specific distances. The
system incorporates aircraft performance, weather and proprietary data to arrive at a
profit estimate for each prospective flight. The MVP has been successfully tested and
our partner Cirrus Aviation has agreed to beta test Reroute on its fleet ahead
of launch. Launch is tentatively scheduled for the third quarter of 2023. |
| 4. | DynoFlight
API powered by Jet.AI: The DynoFlight API enables aircraft operators to purchase carbon offset
credits in small quantities at competitive rates. Carbon credits are typically sold in large
blocks, so small quantities of carbon credits, even if available, are generally priced at
a premium for small and medium sized businesses. In addition, the DynoFlight API offers an
advantage to large organizations that wish to manage working capital more efficiency (i.e.
pay as they fly instead of buying in bulk). |
| | |
| 5. | Card
Management and Invoicing powered by Jet.AI: This system is our internally developed membership
panel, invoicing and billing system offered as a white label service to the combined market
of over 5,000 FAA Part 135 and Part 91k operators. The Card Management and Invoicing offering,
when combined with the four products described above present an attractive solution, in our
view, for Part 135 and 91k operators who seek to improve the customer experience, drive utilization
and manage their carbon footprint, respectively. |
Trend
Information
Jet
Token’s business and operations are sensitive to general business and economic conditions in the U.S. and worldwide along with
local, state, federal and foreign governmental policy decisions. A host of factors beyond Jet Token’s control could cause fluctuations
in these conditions. Adverse conditions may include but are not limited to: changes in the airline industry, blockchain asset regulations
by authorities, fuel and operating costs, changes to corporate governance best practices for executive flying, general demand for private
jet travel, market acceptance of our business model and COVID-19 issues more fully described below. These adverse conditions could affect
Jet Token’s financial condition and the results of operations.
Actions
taken around the world since January 2020, when the World Health Organization declared the COVID-19 coronavirus outbreak a “Public
Health Emergency of International Concern” to help mitigate the spread of the COVID-19 coronavirus, include restrictions on travel,
and quarantines in certain areas, and forced closures for certain types of public places and businesses. The COVID-19 coronavirus and
actions taken to mitigate it have had an adverse impact on the economies and financial markets of many countries, including the geographical
area in which Jet Token operates. While it is unknown whether these conditions will recur and what the complete financial effect will
be to Jet Token, it is known that the travel industry in which Jet Token operates has been severely impacted.
While
Covid-19 negatively impacted aviation as a whole, Jet Token believes the light business jet sector has been less affected as people who
previously had not used business jets are utilizing light jets like Jet Token’s HondaJet Elites for safety reasons and people who
previously had used larger, more expensive, business jets but have felt the effects of the current business environment, are downsizing
to smaller jets for economic reasons. Private jet domestic hours flown, a key measure for our sub-segment of air travel, grew 0.3% in
2019, (21)% in 2020, 46% in 2021 and 3.5% in 2022. During the pandemic, private jet domestic hours flown bottomed out in the month of
April 2020, down 74% as compared to April of 2019. Domestic private jet hours flown then rebounded 106% month over month in May, though
May numbers were still down 47% compared with results in (pre-pandemic) May of 2019. By April and May of 2021, private jet domestic hours
flown were up 307% and 110% year over year, respectively, versus the bottom in 2020 and up 6% and 11% versus pre-pandemic April and May
of 2019. When compared to the pre-pandemic year of 2019, private jet domestic hours flown in 2022 were 19% higher overall, the apparent
cause of the growth has been the tendency of travelers to persist flying privately even after the pandemic.
INFORMATION
ABOUT Jet Token
Overview
Our
business strategy combines concepts from fractional jet membership programs with innovations in artificial intelligence, also referred
to herein is “AI.” Our purposeful enhancement of price discovery and reduced entry price have the potential to produce fairer
and more inclusive results for aircraft owners and travelers alike.
We
formed our company on June 4, 2018. We developed and, in September 2019, launched our booking platform represented by our iOS app JetToken
(the “App”), which functions as a prospecting and quoting platform to arrange private jet travel with third party carriers
as well as on our own aircraft. In July 2021, we leased a HondaJet aircraft under a short-term lease arrangement, which terminated in
February 2022, to accelerate our aircraft operations and sales of jet card memberships. We have acquired four HondaJet Elite aircraft
under our 2020 Purchase Agreement with Honda Aircraft Company, discussed under “– Our Aircraft” below, all four of
which have been sold as discussed below, with three of the four aircraft having been delivered in 2022. Great Western Air, LLC (DBA Cirrus
Aviation Services, LLC) (“Cirrus”) is managing, operating, and maintaining our aircraft and has a growing team of pilots
that have been specially trained on the HondaJet at the Flight Safety facility on the Honda Aircraft Company campus in Greensboro, NC.
Cirrus has additionally developed a safety co-pilot training program in coordination with the FAA and a local flight training academy
for licensed pilots already skilled with the Garmin 1000 avionics suite.
We
offer the following programs for our HondaJet Elite aircraft:
| ● | Fractional
ownership program: This program provides potential owners the ability to purchase a share
in a jet at a fraction of the cost of acquiring an entire aircraft. Each 1/5 share guarantees
75 occupied hours of usage per year with 24 hours of notice. The fractional ownership program
consists of an initial up-front fee, a monthly fee, and a fixed hourly rate on the jet. |
| ● | Jet
card program: A membership in our jet card program generally includes 10, 25 or 50 occupied
hours of usage per year with 24 hours of notice. Members generally pay 100% upfront and then
fly for a fixed hourly rate over the next twelve months. Those who require guaranteed availability
may pay a membership fee for an additional charge. Jet card program members may interchange
as a set ratio per aircraft onto any one of twenty jets operated by our partner, Cirrus. |
In
addition to servicing members, fractional owners and third-party charter clients, our HondaJets are available to address unexpected cancellations
or delays on brokered charters. Unlike most of our brokerage competitors, as well as many business jet management companies which require
owner approval before their aircraft can be used for third party charter, we believe maintaining a fleet of readily available aircraft
to back fill third party charter services provides more reliability and is an attractive selling point for potential clients.
In
2022, we entered into agreements with Cirrus under which we will sell jet cards for Cirrus’s aircraft, for a commission for sales
and client management services, and we make Cirrus’s aircraft available to our customers for charter bookings at preferred rates
and with certain service guarantees. As a result, our jet card members and charter customers have access to twenty of Cirrus’s
aircraft in the light, mid, super-mid, heavy, and ultra-long-range categories, comprising the following aircraft: CJ3+, CJ4, Lear 45XR,
Citation XLS+, Lear 60, Hawker 900XP, Challenger 300, Challenger 604, Falcon 900EX, Challenger 850, Gulfstream V and Gulfstream G550.
Our
booking platform displays a variety of options across private aircraft types in addition to the pricing of our own aircraft, with a range
of prices drawn from a list of thousands of aircraft for hire. We offer users the ability to request a jet and to simultaneously task
us with seeking a lower-cost otherwise superior alternative. Our App is directly connected via API to Avinode, the major centralized
database in private aviation. Through Avinode we can electronically and automatically correspond with operators of private jets who have
posted their aircraft for hire. We currently accept both cash and blockchain currency, which our payment processor promptly converts
to fiat currency prior to confirming a booking.
Strategy
Business
Aviation
Having
successfully executed the HondaJet four aircraft fleet deal and further having sold through all four aircraft, we plan to gradually expand
our fleet with super-mid-size aircraft and the help of our operating partner, Cirrus. Cirrus manages a fleet of 30 jets in Las Vegas,
where we are headquartered. We have executed a non-binding letter of intent to acquire five new Challenger 3500 aircraft from Bombardier,
consisting of three prospective firm orders and two options. Subject to (1) the successful completion of the proposed Business Combination,
(2) our securing of debt financing to fund the initial fleet purchase down payment and (3) the development of a management, interchange
and support plan with our partner Cirrus, we would then plan to execute a formal fleet purchase agreement to secure the first Challenger
3500 delivery in the fourth quarter of 2024. With fleet purchase agreement in force, but the first delivery a year or more away, we would
then plan to pre-sell one quarter, one half or full interest in these aircraft. Upon delivery the jets would in turn be managed by Cirrus
and listed on their Part 135 certificate. Customers would be expected to make a down payment and progress payments, consistent with fractional
industry norms, and we would expect to allocate those funds to restricted cash unless otherwise paid toward (1) the initial down payment
borrowings or (2) our related progress payment obligations to Bombardier.
If
we include its predecessors the Challenger 300 and Challenger 350, Bombardier has sold over 1,000 serial numbers in the Challenger 3500
line, which in our view remains one of the most popular and reliable super-mid-size jets in the world. The aircraft requires no major
scheduled maintenance overhaul in its first two years of service, a testament to the depth of historical experience the manufacturer
has developed with this model of aircraft since the Challenger 300 was introduced in 1999. The spacious 8-9 seat stand-up cabin, 43,000
foot flight ceiling and Mach 0.83 capability, make it a leading choice for travelers. After twenty-four years in service the Challenger
300/350/3500 airframe has attracted a sizable community of typed pilots and Bombardier has constructed 41 worldwide service centers (11
in the US) to support utilization.
Because
all major manufacturers of super-mid or large cabin aircraft such as Gulfstream, Falcon, Bombardier, Embraer, and Textron each have one
to three year waiting lists for super-mid-size jets, many of our fractional competitors can only pre-sell, and remain otherwise unable
to offer the related service. Our strategy is to allow customers, in advance of delivery, to fly on Cirrus’s managed Challenger
300/350, 604/605 and 850 model Bombardier aircraft. In return the customer would pay a monthly management fee (MMF) and an occupied hourly
fee (OHF) at rates substantially similar to those for their Challenger 3500. We believe this “buy and fly” approach may resonate
with market participants who may appreciate the convenience of a fractional program without the extraordinarily long wait.
Conventional
wisdom in private aviation has been that a light jet FAA Part 135 operation presents financial challenges because the lower hourly rate
of a light jet leaves little margin to pay a second pilot and remain profitable. Thanks to our partnership with Cirrus, we have addressed
this concern by having a typed pilot in command with at least 1,500 hours in jets, 1,000 of which must have been in the HondaJet specifically,
fly alongside a co-pilot who has been through an FAA approved ground school developed by Cirrus and Chennault Flying Service. This “safety
co-pilot” is permitted to operate the aircraft in the unlikely event the pilot in command is incapacitated or otherwise unable
to act. The HondaJet, which has been designated by the FAA for single pilot operation, integrates the Garmin 3000 flight system and by
law does not require a second pilot to fly. This safety co-pilot program brings trained pilots who are already schooled in either the
Garmin 1000 or Garmin 3000 flight system, gives them additional training on the HondaJet and Garmin 300 system, and then allows them
to develop their skills alongside a mentor. Importantly, the presence of this safety co-pilot is regarded by our insurer as sufficient
to maintain our present level of premium. The safety pilot does not require a full wage because of their status as a trainee and the
professional value they gain from accruing jet flight hours. This lower cost of labor helps the company overcome the traditional costs
of paying a second pilot and helps bring a stream of prospective pilot in command candidates. Some safety pilots are newer to aviation
while others have had many years of flight training and thousands of hours of flight time on civilian (or military) jet or turboprop
aircraft. We believe that the comparatively low cost of entry of the HondaJet and the proven capabilities of the Challenger 3500 are
attractive to new and seasoned traveler alike, particularly given our ability to offer interchange between the two aircraft and onto
any one of twenty of the thirty aircraft managed by Cirrus. In addition, while some customers have shorter mission profiles and lower
passenger loads better suited to the HondaJet others have longer mission profiles with higher passenger loads – and so the HondaJet
and the Challenger 3500 (plus Cirrus’s fleet) again make an excellent combination in our view. We have taken a gradual approach
to fleet expansion given the capital-intensive nature of aviation and our view that customers should bear the risk (and related tax reward)
of owning and maintaining airplanes.
With
respect to our jet card program, we sell time on our HondaJets and are permitted to sell time on 20 of the 30 Cirrus managed aircraft
without so-called owner approval. The jets can be booked for charter and fly without the operator having to seek specific permission
from the owner – thereby creating a type of synthetic fleet capability on the part of the management company. A jet card represents
a pre-paid block of time that permits a customer to travel by simply booking, typically 24hrs in advance of the flight. The card may
entitle the holder to guaranteed availability, and we make this guarantee available on our HondaJets and certain other Cirrus aircraft
in the mid-size category, in return for an additional fee. Cards range in price from $58,000 for ten hours on the HondaJet, to $1 million
for 50 hours on the Gulfstream G550, and a card holder may use their funds to fly on any aircraft in the fleet subject to an interchange
table found in their card contract.
Our
fractional program consists of an initial down payment, progress payments and a delivery payment. Once the aircraft is delivered and
enters into service, we charge a monthly management fee (the “MMF”) and an occupied hourly fee (the “OHF”). The
MMF is intended to cover the fixed costs of maintaining flight readiness including but not limited to pilot’s wage, insurance,
management, hangarage, unplanned maintenance, crew expense, training, subscriptions, and WiFi. The OHF is intended to cover the variable
costs of flying the aircraft, including but not limited to fuel, the engine maintenance program, and the aircraft maintenance/parts program.
We pass through to customers excess fuel cost based on a standard formula, and pass through non-standard catering, certain landing, ramp
parking and de-icing fees.
Blockchain
Pivot
We
have constructively engaged off and on the past three years with the FinHub division of the SEC in a series of document submissions and
presentations. The purpose of the interactions have been to seek clarification on whether our proposed, and evolving, blockchain network
proposal conforms with U.S. securities laws. For avoidance of doubt, conversations with the FinHub division of the SEC or any other area
of the SEC should not be construed as an endorsement of our proposed blockchain network and related technology. Although these conversations
remain open, because management cannot reliably estimate their outcome, we will not build and will not invest in any proposed blockchain
network in the US in the absence of a “no action” letter from the SEC. It is therefore incumbent upon us to explore in parallel
other opportunities to deploy incremental capital at the nexus of business aviation and high technology (i.e. Artificial Intelligence).
Aviation
Software
Flight
Club API powered by Jet.AI
The
Flight Club API enables FAA Part 135 operators to function simultaneously under FAA Part 380 which permits sale of private jet service
by the seat instead of by whole aircraft. The Flight Club software integrates front end ticketing and payment collection with the flight
management systems of an FAA Part 135 operator. It automates the process of filing forms for each flight with DOT and conforms with DOT
escrow requirements around ticketing and movement of customer funds.
The
first use case of the Flight Club is operational as of 1Q23 through the mechanism of 380 Software LLC. 380 Software LLC is a 50% owned
subsidiary founded in co-operation with our operating partner Cirrus Aviation. Cirrus Aviation owns the other 50% of 380 Software LLC,
and their fleet serves as a first use case. The Company retains all rights to the technology powering 380 Software LLC and has granted
380 Software LLC a perpetual non-transferrable license.
The
initial implementation of the Flight Club is to permit the 30 owners of Cirrus Aviation managed aircraft to fly on one another’s
planes when those planes are otherwise flying empty but at the expense of a charter customer who is typically obliged to pay not only
the cost of an outbound leg but also the cost of a return to base. The charter customer is typically obliged to pay the cost of the return
because the sale of the empty return is an inherently low probability event based on historical industry experience.
In
general, the lower the charter price the higher the probability of damage to the cabin interior. Certain fine hotel and resorts
experience the same phenomenon with respect to room damage and so as a rule will stay vacant in place of allowing their lowest room
night below a certain absolute price level. The loss of operation of a primary cabin amenity such as passenger seat or lavatory can
take an aircraft out of charter operation for weeks or months at a time depending on part availability from the OEM. Such loss of
operation creates both direct cost and opportunity cost. Aircraft seats in particular require special FAA certification for fire
resistance and their critical role in the unique aerodynamic weight and balance of each aircraft type. The Company therefore advises
stringent passenger vetting and holding a credit authorization before flight as surety for the ultimate aircraft owner accountable
for any repair.
Reroute
powered by Jet.AI
Reroute
software recycles aircraft waiting to return to
base into new charter bookings to destinations within specific distances. It supports fleet revenue optimization for FAA Part 135
operators. The MVP has been successfully tested and our partner Cirrus has agreed to beta test the product on its fleet ahead of
launch. Launch is tentatively scheduled for the third quarter of 2023.
DynoFlight
API powered by Jet.AI
The
DynoFlight API enables aircraft operators to purchase carbon offset credits in small quantities at competitive rates. Cabon credits are
typically sold in large blocks, so small quantities of carbon of credits, even if available, are generally priced at a premium for small
and medium sized businesses. In addition, the DynoFlight API offers an advantage to large organizations that wish to manage working capital
more efficiency (i.e. pay as they fly instead of buying in bulk). Launch is tentatively scheduled for the third quarter of
2023.
Artificial
Intelligence
CharterGPT:
By incorporating the following AI-powered features, we believe our App for private aviation can offer a unique and personalized experience
to customers:
Aircraft
Recommendation Engine: Our AI-enabled App for private aviation can help customers select the most suitable private jet for their
travel needs, even if they are not familiar with the differences between jets. The App can also provide customers with greater transparency
and understanding of the characteristics of the aircraft, making it easier for them to make an informed decision. The recommendation
engine analyzes the list of available jets based on the travelers request, and considers factors such as budget, preferred aircraft size,
age of aircraft, distance of the trip compared with non-stop/range capability, number of passengers, ages and weights of passengers and
their respective bags compared with cargo capacity, take-off weight limitations based on airport altitude (i.e. high and hot issues),
landing limitations (i.e. steep approach or special pilot training requirements), safety audit (Argus/Wyvern), cabin amenities such as
a fully enclosed lavatory, WiFi availability, years since last interior refurbishment, years since last engine overhaul, and both operator
and aircraft specific accident history.
Customer
service: The AI-enabled App can provide intelligent customer service by using natural language processing and machine learning algorithms
to understand and respond to customer inquiries and provide personalized support. Untrained call center staff and brittle chat bots characterize
much of the customer service experience today in the US. With the advent of AI, we believe that even for high ticket items, consumers
will come to expect a natural language interface trained on terabytes of data that relate specifically to their purchase.
Charter
brokerage is labor intensive, and most customers are highly price sensitive. We believe these two factors explain why no charter broker
has acquired more than 3-5% of the one million brokered flights that land each year in North America. The back end of the App provides
three features that may address the labor intensity (and hence scalability) of our charter brokerage business. First, each charter operator
has its own form of legal contract for carriage and that contract must be reconciled with the terms found in the charter brokers’
agreement with the passenger. Our AI performs this reconciliation automatically, improving the speed to close with the client and reducing
labor costs. Second, many charter operators do not initially respond to electronic requests delivered through the Avinode charter database
that powers our app. Our generative chat AI and related voice engine perform outbound voice calls to prompt aircraft operators to respond
to quotes we have requested via the web interface to their Avinode account. Third, our AI integrates with Schedero (an Avinode based
scheduling application) to generate a trip sheet for a given charter and then further integrates with Stripe to invoice and confirm payment
via credit card, wire, or ACH.
Predictive
Destination Optimization: The App makes use of machine learning algorithms to analyze air traffic patterns, weather conditions, fuel
prices, landing fees, and traveler preferences to then recommend which private airport to select when a traveler’s destination
city is serviced by multiple airstrips. For example, Los Angeles is serviced by Los Angeles International Airport (LAX), Van Nuys Airport
(KVNY), Burbank Bob Hope Airport (KBUR), John Wayne Airport (KSNA).
Predictive
Departure Date: The App analyzes historical pricing data and forward-looking event data related to a given itinerary to predict the
best date to book a flight to obtain the lowest price for their desired charter itinerary. Although approximately thirty-five blackout
days a year are widely understood to absorb most domestic private aviation capacity, a variety of lesser appreciated grey-out days centered
around key sporting events or entirely new happenings can affect both regional and national pricing.
Predictive
Departure Time: The App uses machine learning algorithms to recommend the optimal departure time based on both live weather conditions,
air traffic, and other factors, to help customers more reliably arrive at their destination on time.
Predictive
Ground Transportation: The App can make intelligent recommendations and analyze customer preferences to recommend ancillary services
such as ground transportation, hotel bookings, and dining options. For example, some airports run out of rental cars at certain times
each year because of an annual conference or other recurring special event. Some of our competitors have taken steps to remedy the shortage
at some airports by positioning in their own vehicles for customer use.
Sales
and Marketing
Our
marketing and advertising efforts are focused on high-net-worth individuals. We have observed that many first-time private flyers came
to market beginning in 2020 in an effort to avoid commercial travel and thereby curtail their prospective exposure to COVID-19. We intend
to continue to expand our marketing and advertising through the following channels: online marketing, television advertising and event
marketing. Paid social media and search engine advertising drive our online marketing. In the past we have launched 15 and 30 second
advertising spots that are targeted at high-net-worth individuals and corporate executives through several channels, including CNBC,
Fox Business, and The Golf Channel, as well as online through Facebook and Linked-In. We intend to expand social media and event marketing
in particular, provided those meet our internal return targets, and to cut those that do not. With respect to event marketing we intend
to have a presence at sporting events, business jet industry gatherings and company hosted aircraft static displays.
Market
Opportunity
Over
the past 30 years, the market for private jet travel has transformed significantly. First the model of full aircraft ownership transformed
into fractional ownership with companies such as NetJets and FlexJet. This was followed by operators offering jet cards and on-demand
service through their fleet of aircraft. The latest iteration of private jet travel provides even more flexibility by providing an on-demand
service to travelers while leveraging the flight availability of one or more third party carriers. The result of this transformation
is a highly segmented industry with numerous market participants offering varying levels of ownership.
According
to National Business Aviation Association, the business jet industry contributes $150 billion dollars per year to the US economy. In
2021, there were 14,488 business jets in the US fleet that generated 4.4 million flight hours per year, and roughly 2,800 of the 14,488
total business jets in the United States were available to charter. Numerous charter brokers and centralized databases each attempt to
improve the allocation of that capacity in return for a fee.
Business
jet charter operators (those operating under a Part 135 license from the Federal Aviation Administration) logged over a million landings
in the US during 2021 according to ARGUS International, Inc., a leading providers of aviation services, including statistical data and
ratings. The average flight lasts 1.5 hours with 2-3 passengers, and we estimate the average cost to operate a US business jet at $5,500
per hour. Most charters include the cost of the empty return leg so a 1.5-hour trip typically translates to 3 hours of billed time, or
approximately $16,500. As a result, one million landings per year at $8,250 per landing ($16,500 round trip) equals $8.25 billion of
revenues in charter landings alone. That’s approximately 2,740 charter landings per day at any one of 5,000 private airports or
500 commercial airports.
Furthermore,
for the business jets that do not fly charter, we believe many private plane owners do not seek FAA certification and special insurance
to permit third parties to pay to fly on their planes partly because there is no practical way to source and process vetted, willing,
passengers. These owners are permitted under FAA rules to offset only their cost by allowing others to use their aircraft. There is currently
no electronic marketplace geared toward aircraft owners seeking systematic recruitment of unrelated “at cost” passengers
with an eye toward defraying the expense of jet ownership and operation.
We
believe that by combining the private jet on-demand model with commercial airline flight availability and prospectively the underutilized
flight hours of private jet operators, our company will be positioned to provide optimum flexibility and cost efficiency for our clients.
Our
Aircraft
We
have previously entered into a Purchase Agreement with Honda Aircraft Company for a multi-aircraft deal for four HondaJet HA-420 aircraft
(the “HondaJet Elites”). Per the agreement, we have acquired all four jets. We have financed the purchase of the first two
aircraft through a lease arrangement for each as discussed under “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” below. In June 2022, we received an unsolicited offer for the purchase of a HondaJet Elite and, after
internal financial and legal review, determined that the sale of the aircraft would offer a net benefit to our stakeholders. The remaining
two aircraft were financed through the sale of fractional interests in each of these aircraft.
HondaJet
Elite aircraft are ideally suited for trips under 3 hours carrying 2-4 passengers plus two pilots. We believe the HondaJet Elite aircraft
is one of the most spacious and cost-efficient light jets on the market with ample baggage and interior room (including an enclosed lavatory).
The wing mounted engines allow for a tranquil, spacious interior. Engines on the wings mean less weight on the tail and more room in
the cabin.
We
currently base the fleet in Las Vegas, NV, a top ten private jet destination and may relocate the fleet based on seasonal travel patterns
and the travel patterns of our membership. We also enable customers to offset the carbon footprint of their travel through a relationship
with Terrapass, a leading provider of third party verified carbon offset programs.
We
estimate that thirty calendar days per year (due to holidays, major sporting events, etc.) it is difficult, if not impossible, to fly
private without the guaranteed access provided by a jet membership program such as ours. The ability to safely offer guaranteed capacity,
on demand, is one of the most important features one can deliver in private aviation. Also, our aircraft give us the ability to attract
online visitors with dynamically priced offers.
We
have also entered into an Executive Aircraft Management and Charter Services Agreement with Cirrus pursuant to which Cirrus has agreed
to provide for the management, operation, and maintenance of our aircraft. Cirrus Aviation Services has a growing team of pilots that
have been trained on our aircraft at the Flight Safety facility on the Honda Aircraft Company campus in Greensboro, NC.
Cirrus
is the largest private jet charter company based in Las Vegas. The Cirrus team has been managing and operating aircraft – commercially
and privately – for more than 40 years. In addition, Cirrus is:
| ● | FAA
Eligible On-Demand Approved |
| ● | ARG/US
Platinum Rated |
| ● | Wyvern
Recommended |
Cirrus
maintains, services and operates our HondaJet aircraft on our behalf and in compliance with all applicable FAA regulations and certification
requirements. Cirrus has the capability to provide substitute aircraft at competitive rates in periods of excess demand for our HondaJet
Elite aircraft.
Competition
The
private air travel industry is extraordinarily competitive. We will compete against private jet charter and fractional jet companies.
Established private jet brokerage and fractional companies include but are not limited to, NetJets, FlexJet, VistaGlobal (including JetSmarter
powered by XO), SentientJet, WheelsUp, JetSuite, Flight Options, Nicholas Air, Jet Alliance, Executive Air Share, Plane Sense, One Sky
Jets, StarJets, Jet Aviation, JetIt, Volato and Luxury Aircraft Solutions. All compete for passengers with a variety of pricing plans,
aircraft types, blackout periods, booking terms, flyer programs and other products and services, including seating, food, entertainment
and other on-board amenities.
Both
the private jet charter companies and the legacy airlines and low-cost carriers have numerous competitive advantages that enable them
to attract both business and leisure travelers. Our competitors may have corporate travel contracts that direct large numbers of employees
to fly with a preferred carrier. The enormous route networks operated by our competitors, combined with their marketing and partnership
relationships with regional airlines and international alliance partner carriers, allow them to generate increased passenger traffic
from domestic and international cities. Our access to smaller aircraft fleet networks and lack of connecting traffic and marketing alliances
puts us at a competitive disadvantage, particularly with respect to our appeal to higher-fare business travelers.
The
fractional private jet companies and the legacy airlines and low-cost carriers each operate larger fleets of aircraft and have greater
financial resources, which would permit them to add service in response to our entry into new markets. Due to our relatively small size,
we are more susceptible to a fare wars or other competitive activities, which could prevent us from attaining the level of traffic or
maintaining the level of sales required to sustain profitable operations.
In
2018 and 2019, respectively, VistaJet acquired XOJET and JetSmarter, combining its heavy jet subscription-based service targeting multinational
corporations and ultra-high net worth individuals with XOJET’s super-midsize jet on demand service and JetSmarter’s digital
booking platform for business aviation. In addition, during 2020, Wheels Up acquired Delta Private Jets as well as Gama Aviation, a business
jet services company and in 2021 Vista Jet acquired a number of smaller players as well as Apollo Jets. Increased consolidation in our
industry could further intensify the competitive environment we face.
Intellectual
Property
We
registered a trademark on our brand name, Jet Token, and our logo, with the United States Patent and Trademark Office. We have also purchased
our domain name, jettoken.com and operate our website under that domain. We have an application pending with the United States Patent
and Trademark Office for Jet.AI. We are the sole owner of the copyrights in and to the software code underlying our App.
Employees
In
light of our early stage of development, we have 6 full-time employees, our Executive Chairman, our Chief Executive Officer and President,
our Chief Operating Officer, our Chief Technology Officer, our Vice President of Sales and a marketing staff person.
Regulation
Regulations
Applicable to the Ownership and Operation of Our Aircraft
Once
we have leased our aircraft, Cirrus, which will maintain and manage our aircraft, is subject to a high degree of regulation that affects
our business, including regulations governing aviation activity, safety standards and environmental standards.
U.S.
Department of Transportation (“DOT”)
The
DOT primarily regulates economic issues affecting air transportation such as the air carrier’s financial and management fitness,
insurance, consumer protection and competitive practices. The DOT has the authority to investigate and bring proceedings to enforce its
regulations and may assess civil penalties, revoke operating authority, and seek criminal sanctions. Our operating as an air charter
carrier is regulated and certificated by the DOT. The DOT authorizes the carrier to engage in on-demand air transportation within the
United States, its territories, and possessions. The DOT can suspend or revoke that authority for cause, essentially stopping all operations.
Federal
Aviation Administration (“FAA”)
The
FAA primarily regulates flight operations, in particular matters affecting air safety, such as airworthiness requirements for aircraft
and pilot, mechanic, dispatcher and flight attendant certification. The FAA regulates:
| ● | aircraft
and associated equipment (and all aircraft are subject to ongoing airworthiness standards), |
| ● | maintenance
and repair facility certification |
| ● | certification
and regulation of pilots and cabin crew, and |
| ● | management
of airspace. |
In
order to engage in air transportation for hire, each air carrier is required to obtain an FAA operating certificate authorizing the airline
to operate using specified equipment in specified types of air service. In the case of our leased aircraft, it is a Part 135 license.
The FAA has the authority to modify, suspend temporarily or revoke permanently the authority to provide air transportation for failure
to comply with FAA regulations. The FAA can assess civil penalties for such failures or institute proceedings for the imposition and
collection of monetary fines for the violation of certain FAA regulations. The FAA can revoke authority to provide air transportation
on an emergency basis, without notice and hearing, where significant safety issues are involved. The FAA monitors compliance with maintenance,
flight operations and safety regulations, maintains onsite representatives and performs inspections of a carrier’s aircraft, employees
and records.
The
FAA also has the authority to issue maintenance/airworthiness directives and other mandatory orders relating to aircraft and engines,
fire retardant and smoke detection devices, collision and windshear avoidance systems, navigational equipment, noise abatement and the
mandatory removal and replacement of aircraft parts that have failed or may fail in the future. FAA enforcement authority over aircraft
includes the power to ground aircraft or limit their usage.
Transportation
Security Administration
The
TSA is responsible for oversight of passenger and baggage screening, cargo security measures, airport security, assessment and distribution
of intelligence and security research and development. Air carriers are subject to TSA mandates and oversight in connection with screening
passenger identities and screening baggage. TSA regulations governing passenger identification, which we will apply at the time of Jet
Token purchase as well as at the time of travel, requires all passengers to provide identification using a valid verifying identity document.
In addition, all passengers must provide their full name, date of birth, and gender, which is screened against the travel ban watch list
in effect at the time of initial screening and at the time of travel.
All
air carriers are also subject to certain provisions of the Communications Act of 1934 because of their extensive use of radio and other
communication facilities and are required to obtain an aeronautical radio license from the Federal Communications Commission, or the
FCC.
Property
We
lease space for our corporate headquarters in Las Vegas, Nevada and a satellite office in San Francisco, consisting of office space and
the use of shared conference facilities.
Share Purchase Agreement
Jet Token executed a Share
Purchase Agreement, dated as of August 4, 2022 (the “Share Purchase Agreement”), with GEM Yield LLC SCS and GEM Yield Bahamas
Limited (together with GEM Yield LLC SCS, “GEM”). Upon the Jet Token Common Stock being publicly listed on a U.S. securities
exchange, such as the NYSE or NASDAQ, Jet Token will have the right to periodically issue and sell to GEM, and GEM has agreed to purchase,
up to $40,000,000 aggregate value of shares of Jet Token Common Stock during the 36-month period following the date of listing.
In consideration for these
services, Jet Token has agreed to pay GEM a commitment fee equal to $800,000 payable in cash or freely tradable shares of Jet Token Common
Stock, payable on or prior to the first anniversary of the date of listing. On the date of listing, Jet Token will also issue GEM a warrant
(the “GEM Warrant”) granting it the right to purchase up to 6% of the outstanding common stock of Jet Token on a fully diluted
basis as of the date of listing. The GEM Warrant will have a term of three years.
Jet Token has also entered into a Registration Rights Agreement with
GEM, obligating Jet Token to file a registration statement with respect to resales of the shares of Jet Token Common Stock issued to
GEM under the Share Purchase Agreement and upon exercise of the GEM Warrant.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF OXBRIDGE
References
to the “Company,” “our,” “us” or “we” refer to Oxbridge Acquisition Corp. The following
discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial
statements and the notes related thereto which are included in “Item 8. Financial Statements and Supplementary Data” of this
Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including
those set forth under “Special Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere
in this Annual Report on Form 10-K.
Overview
We
are a Cayman Islands exempted company incorporated on April 12, 2021, for the purpose of entering into a merger, share exchange, asset
acquisition, share purchase, recapitalization, reorganization or other similar business combination with one or more target businesses.
Our
sponsor is OAC Sponsor Ltd., a Cayman Islands exempted company (the “Sponsor”). The registration statement for our IPO was
declared effective on August 11, 2021. On August 16, 2021, we consummated our IPO of 10,000,000 units (each, an “Oxbridge Unit”
and collectively, the “Oxbridge Units” and, with respect to the Class A Ordinary Shares included in the Units, the “public
shares”), at $10.00 per Unit, generating gross proceeds of $100,000,000 and incurring offering costs of approximately $6,624,000,
inclusive of $3,500,000 in deferred underwriting commissions. The underwriters exercised the over-allotment option in full and on August
16, 2021, purchased an additional 1,500,000 units (the “Over-Allotment Units”), generating additional gross proceeds of $15,000,000
(the “Over-Allotment”), and incurring additional offering costs of $825,000, inclusive of $525,000 of deferred underwriting
commissions.
Substantially
concurrently with the closing of our IPO, we completed the private sale (the “private placement”) of 5,760,000 warrants to
the Sponsor and Maxim Group, LLC (“Maxim”), the underwriter in our IPO, at a price of $1.00 per private placement
warrant, generating gross proceeds of $5,760,000.
Upon
the closing of our IPO and the private placement, $116,725,000 (approximately $10.15 per Oxbridge Unit) from the net proceeds of the
sale of the Oxbridge Units in the IPO, including a portion of the proceeds from the private placement, was deposited in a trust account,
located in the United States with Continental Stock Transfer & Trust Company acting as trustee, which may only be invested in permitted
United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended,
having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment
Company Act that invest only in direct U.S. government treasury obligations.
Our
management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of the private placement
warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a business combination.
On
November 9, 2022, Oxbridge held an extraordinary general meeting of shareholders. At the extraordinary general meeting, Oxbridge’s
shareholders were presented the proposals to extend the date by which Oxbridge must consummate a business combination (the “Termination
Date”) from November 16, 2022 to August 16, 2023 (or such earlier date as determined by the Oxbridge board of directors) by amending
Oxbridge’s Amended and Restated Memorandum and Articles of Association (the “Extension Amendment Proposal”). The Extension
Amendment Proposal to amend Oxbridge’s Amended and Restated Memorandum and Articles of Association (“Charter Amendment”)
was approved. Oxbridge filed the Charter Amendment with the Cayman Islands Registrar of Companies on November 11, 2022.
In
connection with the vote to approve the Extension Amendment Proposal, the holders of 10,313,048 Class A ordinary shares properly exercised
their right to redeem their shares for cash at a redemption price of approximately $10.22 per share, for an aggregate redemption amount
of $105,424,960 in connection with the Extension Amendment Proposal.
The
Sponsor agreed to contribute to us a loan of $575,000 (the “Extension Loan”), to be deposited into the trust account to extend
the Termination Date from November 16, 2022 to August 16, 2023. On November 14, 2022, Oxbridge issued a promissory note (the “Extension
Note”) in the aggregate principal amount of $575,000 to the Sponsor, in connection with the Extension Loan. The Extension Loan
was deposited into the trust account on November 15, 2022.
The
Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of an Initial Business
Combination, or (b) the date of the liquidation of Oxbridge.
We
have until August 16, 2023 to complete the initial Business Combination (the “Combination Period”). However, if we are unable
to complete the initial Business Combination within the Combination Period, we will (i) cease all operations except for the purpose of
winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held
in the Trust Account and not previously released to us to pay the our taxes (less up to $100,000 of interest to pay dissolution expenses),
divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights
as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly
as reasonably possible following such redemption, subject to the approval of our remaining shareholders and board of directors, liquidate
and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements
of other applicable law.
Liquidity
and Capital Resources
As
of December 31, 2022 we had cash of approximately $212,000 and a working capital of approximately $110,000 to satisfy our liquidity needs.
In
order to fund working capital deficiencies or finance transaction costs in connection with an intended Initial Business Combination,
our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may
be required. If we complete our Initial Business Combination, we would repay such loaned amounts. In the event that our Initial Business
Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but
no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such working capital loans may be convertible
into private placement-equivalent warrants at a price of $1.00 per warrant (which, for example, would result in the holders being issued
1,500,000 warrants if $1,500,000 of notes were so converted), at the option of the lender. Such warrants would be identical to the private
placement warrants, including as to exercise price, exercisability and exercise period. The terms of such working capital loans by our
Sponsor or its affiliates, or our officers and directors, if any, have not been determined and no written agreements exist with respect
to such loans. Prior to the completion of our Initial Business Combination, we do not expect to seek loans from parties other than our
Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against
any and all rights to seek access to funds in our Trust Account. As of December 31, 2022, there were no amounts outstanding under any
working capital loans.
Based
on the foregoing, management believes that we may have sufficient working capital and borrowing capacity to meet its needs through the
earlier of the consummation of an Initial Business Combination or six months from this filing. Over this time period, we will be using
these funds to pay existing accounts payable, performing due diligence on selected target, paying for travel expenditures, and structuring,
negotiating and consummating the proposed Business Combination.
Risks
and Uncertainties
In
February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action,
various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. The impact
of this action and related sanctions on the world economy are not determinable as of the date of the audited financial statements and
the specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of
the date of the audited financial statements.
Results
of Operations
As
of December 31, 2022, we had not commenced any operations. All activity for the year ended December 31, 2022 and the period from April
12, 2021 (inception) through December 31, 2021 relates to our formation and the IPO, and subsequent to the IPO, identifying a target
company for an Initial Business Combination. We have neither engaged in any operations nor generated any revenues to date. We will not
generate any operating revenues until after the completion of our Initial Business Combination, at the earliest. We will generate non-operating
income in the form of interest income and unrealized gains from the proceeds derived from the IPO. We expect to incur increased expenses
as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence
expenses.
Net
Income for the year ended December 31, 2022 was $7.18 million, or $0.546 basic and diluted earnings per share, which consisted of an
approximately $487,000 in general and administrative expenses, $964,000 in interest income and approximately $6.7 million gain on warrant
liability revaluation.
For
the period from April 12, 2021 (inception) through to December 31, 2021, we had a net loss of approximately $3.54 million, which consisted
of an approximately $86,000 in general and administrative expenses and approximately $3.46 million loss on warrant liability revaluation.
Contractual
Obligations
Other
than the below, we do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations
or long-term liabilities.
Administrative
Services Agreement
Commencing
on the date that our securities are first listed, we agreed to pay the Sponsor $10,000 per month for office space, secretarial and administrative
services provided to members of our founding team. Upon completion of the Initial Business Combination or our liquidation, we will cease
paying such monthly fees. For the year ended December 31, 2022, we have recognized and paid $100,000 (2021: $50,000) under the Administrative
Services Agreement, which is included within Formation and Administrative Expenses on the Statement of Operations.
Registration
Rights
The
holders of the Founder Shares, private placement warrants, Class A Ordinary Shares underlying the private placement warrants and warrants
that may be issued upon conversion of Working Capital Loans (and any Class A Ordinary Shares issuable upon the exercise of the private
placement warrants and warrants that may be issued upon conversion of working capital loans) will be entitled to registration rights
pursuant to a registration and shareholder rights agreement. The holders of these securities are entitled to make up to three demands,
excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration
rights with respect to registration statements filed subsequent to our completion of the Initial Business Combination. We will bear the
expenses incurred in connection with the filing of any such registration statements.
Underwriting
Agreement
On
August 16, 2021, we paid an underwriting discount of 2% of the per Oxbridge Unit offering price, or approximately $2,300,000 million
in the aggregate at the closing of the IPO, and the underwriters are entitled to a deferred underwriting discount of 3.5% of the gross
proceeds of the IPO, or $4,025,000 in the aggregate. The deferred fee will be payable to the underwriters from the amounts held in the
Trust Account solely in the event that we complete an Initial Business Combination, subject to the terms of the underwriting agreement.
Critical
Accounting Policies
Derivative
financial instruments
We
do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial
instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify
as embedded derivatives, pursuant to ASC 480 and ASC 815, “Derivatives and Hedging” (“ASC 815”). The classification
of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, will be re-assessed at
the end of each reporting period. Derivative warrant liabilities will be classified as non-current liabilities as their liquidation is
not reasonably expected to require the use of current assets or require the creation of current liabilities.
The
17,260,000 warrants issued on August 16, 2021 in connection with the IPO and the private placement (including the 11,500,000 warrants
included in the Oxbridge Units and the 5,760,000 private placement warrants) are recognized as derivative liabilities in accordance with
ASC 815. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized
in our statement of operations. The fair value of the public warrants issued in connection with the IPO were initially measured at fair
value using a Black-Scholes option pricing model simulation model and subsequently, the fair value of public warrants issued in connection
with the IPO have been measured based on the listed market price of such warrants as of December 31, 2021. The fair value of the private
placement warrants has been estimated initially and subsequently, as of December 31, 2021, using a Black-Scholes option pricing model.
The determination of the fair value of the warrant liabilities may be subject to change as more current information becomes available
and accordingly the actual results could differ significantly.
Class
A Ordinary Shares Subject to Possible Redemption
As
of December 31, 2022, there were 1,301,952 Class A ordinary shares issued or outstanding. We account for our Class A ordinary shares
subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing
Liabilities from Equity.” Ordinary shares subject to mandatory redemption are classified as a liability instrument and is measured
at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that is either within
the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified
as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. Our ordinary shares feature certain
redemption rights that are considered to be outside of our control and be subject to occurrence of uncertain future events. Accordingly,
at December 31, 2022, 1,186,952 Class A ordinary shares subject to possible redemption are presented at redemption value as temporary
equity, outside of the shareholders’ equity section of our condensed balance sheets.
Earnings
(Loss) Per Ordinary Share
Oxbridge
complies with accounting and disclosure requirements of FASB ASC 260, “Earnings Per Share”. Earnings (Loss) per ordinary
share is computed by dividing earnings (loss) by the weighted average number of ordinary shares outstanding during the period.
Oxbridge
has two classes of ordinary shares, Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between
the two classes of shares. This presentation contemplates a business combination as the most likely outcome, in which case, both classes
of shares share pro rata in the income/loss of Oxbridge. Accretion associated with the redeemable Class A ordinary shares is excluded
from earnings per share as the redemption value approximates fair value.
At
December 31, 2022, we did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into
Ordinary Shares and then share in our earnings. As a result, diluted earnings per share is the same as basic earnings per share for the
period presented.
At
December 31, 2021, due to net loss, Oxbridge did not have any dilutive securities and other contracts that could, potentially, be exercised
or converted into ordinary shares and then share in the loss of Oxbridge. As a result, diluted loss per share is the same as basic loss
per share for the period ended December 31, 2021.
Balance
Sheet Arrangements
As
of December 31, 2022, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
Inflation
We
do not believe that inflation had a material impact on our business, revenues or operating results during the period presented.
INFORMATION
ABOUT Oxbridge
Overview
We
are a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses. We have neither engaged in any operations nor generated any operating revenue
to date. Based on our business activities, the Company is a “shell company” as defined under the Exchange Act because we
have no operations and nominal assets consisting almost entirely of cash.
Our
executive offices are located at Suite 201, 42 Edward Street, George Town, Grand Cayman, Cayman Islands and our telephone number is +1
(345) 749-7570. Our corporate website address is www.oxbridgeaq.com. Our website and the information contained on, or that can be accessed
through, the website is not deemed to be incorporated by reference in, and is not considered part of, this annual report. You should
not rely on any such information in making your decision whether to invest in our securities.
Company
History
On
April 12, 2021, our Sponsor purchased an aggregate of 2,875,000 Class B Ordinary Shares (our
“Founder Shares”) for an aggregate purchase price of $25,000, or approximately
$0.009 per share. Our Class B Ordinary Shares will automatically convert into Class A Ordinary
Shares, on a one-for-one basis, upon the completion of a business combination. The number
of Founder Shares issued was based on the expectation that the Founder Shares would represent
20% of the outstanding Class A Ordinary Shares and our Class B Ordinary Shares (collectively,
our “Ordinary Shares”) upon completion of our IPO.
On
August 16, 2021, we consummated our IPO of 10,000,000 Units at $10.00 per Oxbridge Unit, generating gross proceeds of $100,000,000 and
incurring offering costs of approximately $6,624,000, inclusive of approximately $3,500,000 in deferred underwriting commissions. The
underwriter was granted a 45-day option from the date of the final prospectus relating to the initial public offering to purchase up
to 1,500,000 additional Oxbridge Units to cover over-allotments, if any, at $10.00 per Oxbridge Unit. On August 16, 2021, the underwriters
exercised the over-allotment option in full and, purchased an additional 1,500,000 Over-Allotment Units, generating additional gross
proceeds of $15,000,000, and incurring additional offering costs of $825,000, inclusive of approximately $525,000 of deferred underwriting
commissions. Each warrant entitles the holder thereof to purchase one share of Class A Ordinary Shares at a price of $11.50 per share,
subject to certain adjustments.
Simultaneously
with the closing of the IPO, we consummated the sale of 5,760,000 warrants to the Sponsor and Maxim Group, LLC (“Maxim”),
the underwriter in our IPO (the “private placement warrants”), at a price of $1.00 per private placement warrant, generating
gross proceeds of $5,760,000. An aggregate of $116,725,000 from the proceeds of the IPO and the private placement warrants was placed
in a trust account (the “Trust Account”) such that the trust account held $116,725,000 at the time of closing of the IPO.
Each private placement warrant is exercisable to purchase one Class A ordinary share at $11.50 per share, subject to certain adjustments.
On
September 30, 2021, we announced that, commencing October 1, 2021, holders of the 11,500,000 units sold in the IPO may elect to separately
trade the shares of Class A Ordinary Shares and the warrants included in the units. Those units not separated continued to trade on The
Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “OXACU” and the Class A Ordinary Shares and warrants that
were separated trade under the symbols “OXAC” and “OXACW,” respectively.
On
November 9, 2022, Oxbridge held an extraordinary general meeting of shareholders. At the
extraordinary general meeting, Oxbridge’s shareholders were presented the proposals
to extend the date by which Oxbridge must consummate an initial business combination (the
“Termination Date”) from November 16, 2022 to August 16, 2023 (or such earlier
date as determined by the board of directors) by amending Oxbridge’s Amended and Restated
Memorandum and Articles of Association (the “Extension Amendment Proposal”).
The Extension Amendment Proposal to amend Oxbridge’s Amended and Restated Memorandum
and Articles of Association (“Charter Amendment”) was approved. Oxbridge filed
the Charter Amendment with the Cayman Islands Registrar of Companies on November 11, 2022.
In
connection with the vote to approve the Extension Amendment Proposal, the holders of 10,313,048 Class A ordinary shares properly exercised
their right to redeem their shares for cash at a redemption price of approximately $10.22 per share, for an aggregate redemption amount
of $105,424,960 in connection with the Extension Amendment Proposal.
The
Sponsor has agreed to contribute to us a loan of $575,000 (the “Extension Loan”), to be deposited into the trust account
to extend the Termination Date from November 16, 2022 to August 16, 2023. On November 14, 2022, Oxbridge issued a promissory note (the
“Extension Note”) in the aggregate principal amount of $575,000 to the Sponsor, in connection with the Extension Loan. The
Extension Loan was deposited into the Trust Account on November 15, 2022.
The
Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of an Initial Business
Combination, or (b) the date of the liquidation of Oxbridge.
Our
units, Class A Ordinary Shares and warrants are registered under the Exchange Act and we have reporting obligations, including the requirement
that we file annual, quarterly and current reports with the SEC. The SEC’s website (http://www.sec.gov) contains such reports,
proxy and information statements and other information regarding issuers that file electronically with the SEC. In accordance with the
requirements of the Exchange Act, our annual reports contain financial statements audited and reported on by our independent registered
public accounting firm.
Initial
Business Combination
Nasdaq
rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value
of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable) at the time of our signing
a definitive agreement in connection with our initial business combination. We refer to this as the 80% of net assets test. If our Board
of Directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion
from an independent investment banking firm or another independent firm that commonly renders valuation opinions for the type of company
we are seeking to acquire or an independent accounting firm. We do not intend to purchase multiple businesses in unrelated industries
in conjunction with our initial business combination. Additionally, pursuant to Nasdaq rules, any initial business combination must be
approved by a majority of our independent directors. Our Amended and Restated Memorandum and Articles of Association provide that
any initial business combination must be approved by at least 75% of our Board of Directors.
We
anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders own shares
will own or acquire 100% of the issued and outstanding equity interests or assets of the target business or businesses. We may, however,
structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or
assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons,
but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding
voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required
to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more
of the voting securities of the target, our shareholders prior to our initial business combination may collectively own a minority interest
in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example,
we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the issued and outstanding
capital stock, shares or other equity securities of a target business or issue a substantial number of new shares to third-parties in
connection with financing our initial business combination. In this case, we would acquire a 100% controlling interest in the target.
However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business
combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less
than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company,
the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% fair market value
test. If our initial business combination involves more than one target business, the 80% fair market value test will be based on the
aggregate value of all of the target businesses.
Facilities
We
maintain our principal executive offices at Suite 201, 42 Edward Street, George Town, Grand Cayman, Cayman Islands. We pay our Sponsor
$10,000 per month for office space, administrative and support services pursuant to the terms of an administrative services agreement
between us and our Sponsor. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly
fees. We consider our current office space adequate for our current operations.
Employees
We
currently have two executive officers. These individuals are not obligated to devote any specific number of hours to our matters, but
they intend to devote as much of their time as they deem necessary to our affairs until we has completed our initial business combination.
The amount of time that any such person will devote in any time period to our company will vary based on whether a target business has
been selected for our initial business combination and the current stage of the business combination process. We do not intend to have
any full-time employees prior to the consummation of an initial business combination.
Competition
We
expect to encounter intense competition from other entities having a business objective similar to ours, including private investors
(which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing
for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have extensive experience
in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries.
Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial
resources will be relatively limited when contrasted with those of many of these competitors. Additionally, the number of blank check
companies looking for business combination targets has increased compared to recent years and many of these blank check companies are
sponsored by entities or persons that have significant experience with completing business combinations. While we believe there are numerous
target businesses we could potentially acquire with the net proceeds from our initial public offering and private placement warrants,
if we have not completed our initial business combination within the required time period, our public shareholders may receive only approximately
$11.07 per share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
Emerging
Growth Company
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities
Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and may take advantage of
certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies
including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from
the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments
not previously approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable.
We
have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different
application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time
private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company
which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period
difficult or impossible because of the potential differences in accounting standards used.
We
will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary
of the completion of our initial public offering, or December 31, 2026, (b) in which we have total annual gross revenue of at least $1.07
billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Ordinary Shares that is held
by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which
we have issued more than $1.00 billion in non-convertible debt during the prior three-year period.
EXECUTIVE
COMPENSATION
Oxbridge
None
of our executive officers or directors have received any cash compensation for services rendered to us. We pay monthly recurring expenses
of $10,000 to our Sponsor for office space, administrative and support services. Upon completion of the initial business combination
or our liquidation, we will cease paying these monthly fees. Accordingly, in the event the consummation of the initial business combination
takes until August 16, 2023, the Sponsor will be paid a total of $240,000 ($10,000 per month) for office space, administrative and
support services and will be entitled to be reimbursed for any out-of-pocket expenses.
Our
Sponsor, directors and officers or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection
with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations.
Our audit committee will review on a quarterly basis all payments that were made by us to our Sponsor, directors, officers or our or
any of their respective affiliates.
After
the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting,
management or other fees from the post-combination business. All of these fees will be fully disclosed to stockholders, to the extent
then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed
business combination.
It
is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain with us after
the initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions
with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the
ability of our management to remain with us after the consummation of our initial business combination will be a determining factor in
our decision to proceed with any potential business combination. We are not party to any agreements with our officers and directors that
provide for benefits upon termination of employment.
Jet
Token
Upon
the consummation of the Business Combination, Jet Token will be considered a smaller reporting company and an “emerging growth
company” within the meaning of the JOBS Act and has opted to comply with the executive compensation disclosure rules applicable
to such companies. These rules provide for reduced compensation disclosure for the principal executive officer and the two most highly
compensated executive officers other than the principal executive officer (the “named executive officers”). This section
provides an overview of Jet Token’s executive compensation programs, including a narrative description of the material factors
necessary to understand the information disclosed in the summary compensation table below.
Jet
Token’s named executive officers for fiscal year 2022 are:
| ● | Michael
Winston, Founder and Executive Chairman, Treasurer; |
| | |
| ● | George
Murnane, Chief Executive Officer and President; and |
| | |
| ● | Patrick
McNulty, Chief Operating Officer. |
Jet
Token believes its compensation programs should promote the success of the company and align executive incentives with the long-term
interests of its stockholders. Jet Token’s current compensation programs reflect its startup origins and consist primarily of salary,
bonus and equity awards. As Jet Token’s needs evolve, it intends to continue to evaluate its philosophy and compensation programs
as circumstances require.
Summary
Compensation Table
The
following table provides information concerning compensation awarded to, earned by, and paid to each of Jet Token’s named executive
officers for services rendered to Jet Token in all capacities during 2022:
Name and Principal Position | |
Salary ($) | | |
Bonus / Commission ($) | | |
Option Awards ($) | | |
All Other Compensation ($)(1) | | |
Total ($) | |
Michael D. Winston | |
$ | 234,791 | | |
$ | 25,000 | | |
$ | - | | |
$ | 49,547 | | |
$ | 309,338 | |
Founder and Executive Chairman; Treasurer | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
George Murnane | |
$ | 250,000 | | |
$ | 100,000 | | |
$ | 2,472,657 | | |
$ | 49,966 | | |
$ | 2,872,623 | |
Chief Executive Officer and President | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Patrick McNulty | |
$ | 173,068 | | |
$ | 111,840 | | |
$ | 1,191,163 | | |
$ | 36,730 | | |
$ | 1,512,801 | |
Chief Operating Officer | |
| | | |
| | | |
| | | |
| | | |
| | |
(1)
Other compensation consists primarily of the cost of medical, dental, vision and disability
insurance costs.
Narrative
Disclosure to Summary Compensation Table
For
2022, the compensation program for Jet Token’s named executive officers consisted of base salary, bonus and equity awards.
Employment
Agreements
We
do not have any formal compensation arrangements with our Founder and Executive Chairman. Rather, Mr. Winston, as our sole board member,
determines the compensation to be paid to him from time to time in consultation with our Chief Executive Officer and President. We believe
that this provides us with greater flexibility in managing our cash flow needs as we grow our business. Mr. Murnane entered into an employment
agreement with Jet Token on July 24, 2019. In addition, Mr. McNulty’s compensation arrangements are based on his formal Offer Letter
dated June 1, 2021.
Base
Salary
In
2022, each of Jet Token’s named executive officers received an annual base salary to compensate them for services rendered to Jet
Token. On March 10, 2022, the base salary of Mr. McNulty increased from $165,000 to $175,000. On April 1, 2022, the base salary of Mr.
Winston increased from $200,000 to $250,000. The actual base salary received by each named executive officer is set forth above in the
Summary Compensation Table in the column titled “Salary.”
Cash
Bonus
Each
named executive officer’s employment arrangement provides that the named executive officer will be eligible to earn a discretionary
annual bonus subject to achievement of certain goals (including revenue and profitability targets) as determined by the Jet Token Board.
In 2022, Mr. Winston, Mr. Murnane and Mr. McNulty were eligible to earn annual cash bonuses based on their performance, as determined
by the Jet Token Board, in its discretion.
The
actual annual cash bonuses awarded to each of Jet Token’s named executive officers
for 2022 performance are set forth above in the Summary Compensation Table in the column
titled “Bonus.”
2022
Equity Awards
In
2022, Mr. Murnane and Mr. McNulty each received Jet Token Options to purchase shares of Jet Token Common Stock under the Jet Token Option
Plan as follows: (a) Mr. Murnane received Jet Token Options to purchase 1,000,000 shares of Jet Token Common Stock; and (c) Mr. McNulty
received Jet Token Options to purchase (i) 1,000,000, (ii) 128,000, (iii) 250,000 and (iv) 500,000 shares of Jet Token Class B Common
Stock.
Jet
Token Option Plans
General.
On June 4, 2018, the Jet Token’s Board of Directors adopted the Jet Token, Inc. 2018 Stock Option and Grant Plan (the “2018
Plan”). The 2018 Plan provides for the grant of equity awards to employees, and consultants, to purchase shares of Jet Token’s
common stock. As of December 31, 2020, up to 25,000,000 shares of its common stock could be issued pursuant to awards granted under the
2018 Plan. During the year ended December 31, 2021, the 2018 Plan was amended three times to increase the total number of shares reserved
for issuance thereunder. As of December 31, 2022 and 2021, the total number of shares reserved for issuance under the 2018 Plan was 75,000,000
shares, consisting of (i) 25,000,000 shares of common stock and (ii) 50,000,000 shares of non-voting common stock. The 2018 Plan is administered
by Jet Token’s Board of Directors.
In
August 2021, Jet Token’s Board of Directors adopted the Jet Token Inc. 2021 Stock Plan (the “2021 Plan”). The 2021
plan provides for the grant of equity awards to employees, outside directors, and consultants, including the direct award or sale of
shares, stock options, and restricted stock units to purchase shares. As of December 31, 2021, up to 5,000,000 shares of non-voting common
stock may be issued pursuant to awards granted under the 2021 Plan. During the year ended December 31, 2022, the 2021 Plan was amended
to increase the number of shares of non-voting common stock authorized under the 2021 Plan to 15,000,000. In the event that shares of
non-voting common stock subject to outstanding options or other securities under the Jet Token’s 2018 Stock Open and Grant Plan
expire or become exercisable in accordance with their terms, such shares shall be automatically transferred to the 2021 Plan and added
to the number of shares then available for issuance under the 2021 Plan.
Plan
Administration. The Jet Token Board has administered the Jet Token Option Plan. It is expected that the compensation committee of
the Jet.AI Board will administer the Jet Token Option Plan following the Closing Date.
Types
of Awards. The Jet Token Option Plan provides for the grant of incentive Jet Token Options, non-statutory Jet Token Options, Jet
Token Restricted Stock, restricted stock units and stock appreciation rights.
Stock
Options. The Jet Token Board has the discretion to grant incentive or non-statutory Jet Token Options under the Jet Token Option
Plan, provided that incentive Jet Token Options may only be granted to employees. The exercise price per share applicable to such Jet
Token Options must generally be equal to at least the fair market value per share of Jet Token Common Stock on the date of grant. Subject
to the provisions of the Jet Token Option Plan, the Jet Token Board has the discretion to determine the remaining terms of the Jet Token
Options (e.g., vesting). After the termination of a participant’s service, the participant may only exercise his or her Jet Token
Option, to the extent vested, for a specified period of time stated in his or her option agreement. Generally, if termination is due
to death or disability, the Jet Token Option will remain exercisable for 18 months and 12 months following the termination of service,
respectively. In all other cases except for a termination for cause, the Jet Token Option will generally remain exercisable for three
months following the termination of service. In the event of a termination for cause, the Jet Token Option will immediately terminate.
However, in no event may a Jet Token Option be exercised later than the expiration of its maximum term.
Restricted
Stock. The Jet Token Board has the discretion to grant Jet Token Restricted Stock under
the Jet Token Option Plan. Jet Token Restricted Stock are generally shares of Jet Token Common
Stock that are issued or sold to a participant pursuant to the Jet Token Option Plan and
subject to repurchase by Jet Token under certain circumstances and that are fully vested
at grant or that will vest in accordance with terms and conditions established by the Jet
Token Board, in its sole discretion. The Jet Token Board has the discretion to determine
the number of shares that the participant may receive or purchase, the price to be paid (if
any), and the time by which the participant must accept the shares/offer.
Restricted
Stock Units. The Jet Token Board has the discretion to grant restricted stock units under the Jet Token Option Plan. Each restricted
stock unit is a bookkeeping entry representing an amount equal to the fair market value of one share of Jet Token Common Stock. The Jet
Token Board, in its discretion, determines whether restricted stock units should be granted, the total units granted and/or the vesting
terms applicable to such units. Participants holding restricted stock units will hold no voting rights by virtue of such restricted stock
units. The Jet Token Board may, in its sole discretion, award dividend equivalents in connection with the grant of restricted stock units.
Restricted stock units may be settled in cash, shares of Jet Token Common Stock, as applicable, or any combination thereof or in any
other form of consideration, as determined by the Jet Token Board, in its sole discretion.
Stock
Appreciation Rights. The Jet Token Board has the discretion to grant stock appreciation rights under the Jet Token Option Plan and
to determine the terms and conditions of each stock appreciation right, except that the exercise price for each stock appreciation right
cannot be less than 100% of the fair market value of the underlying shares of Jet Token Common Stock on the date of grant. Upon exercise
of a stock appreciation right, a participant will receive payment from Jet Token in an amount determined by multiplying the difference
between the fair market value of a share on the date of exercise over the exercise price by the number of shares with respect to which
the stock appreciation right is exercised. Stock appreciation rights may be paid in cash, shares of Jet Token Common Stock, or any combination
thereof, or in any other form of consideration, as determined by the Jet Token Board in its discretion. Stock appreciation rights are
exercisable at the times and on the terms established by the Jet Token Board, in its discretion.
Non-transferability
of Awards. Unless the Jet Token Board provides otherwise, awards granted under the Jet Token Option Plan are generally not transferable.
Certain
Adjustments. In the event of certain corporate events or changes in Jet Token’s capitalization, to prevent diminution or enlargement
of the benefits or potential benefits available under the Jet Token Option Plan, the Jet Token Board will make adjustments to one or
more of the number, kind and class of securities that may be delivered under the Jet Token Option Plan and/or the number, kind, class
and price of securities covered by each outstanding award.
Dissolution
or liquidation. In the event of Jet Token’s dissolution or liquidation, each outstanding award will terminate immediately prior
to the consummation of such action, unless otherwise determined by the Jet Token Board.
Change
in Control. The Jet Token Option Plan provides that in the event of a change in control, unless otherwise provided in the applicable
award agreement or as determined by the Jet Token Board at the time of grant, outstanding awards will be assumed, canceled if not exercised/settled
or cashed out in lieu of exercise as determined by the Jet Token Board.
Amendment
or Termination. The Jet Token Board may amend or terminate the Jet Token Option Plan at any time, provided such action does not impair
the rights or obligations of any participant without his or her consent. In addition, stockholder approval must be obtained to the extent
necessary and desirable to comply with applicable laws.
Benefits
and Perquisites
Jet
Token provides benefits to its named executive officers on the same basis as provided to all of its employees, including health, dental
and vision insurance; health savings account; life insurance; and a tax-qualified Section 401(k) plan for which Jet Token matches 100%
of contributions up to 6% of the employee’s salary. In addition, Jet Token provides Mr. Murnane subsidies in the form of monthly
reimbursements for costs related to inter-state commuting for automotive ($300), wireless communication ($200), health club ($170) and
out-of-pocket medical ($50).
Outstanding
Equity Awards at Fiscal Year-End Table
The
following table provides information regarding each outstanding Jet Token Option award or unvested stock award held by Messrs. Winston,
Murnane and McNulty as of December 31, 2022.
| |
Option Awards | | |
Stock Awards | |
| |
| | |
| | |
| | |
| | |
| | |
| |
Name | |
Number of Securities Underlying Unexercised Jet Token Options (#) Exercisable | | |
Number of Securities Underlying Unexercised Jet Token Options (#) Unexercisable | | |
Jet Token Option Exercise Price ($) | | |
Jet Token Option Expiration Date | | |
Number of Securities that Have Not Vested
(#) | | |
Market Value of Securities that Have Not Vested
($) | |
Michael Winston | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
George Murnane | |
| 5,400,000 | | |
| - | | |
$ | 0.06 | | |
| 9/23/2029 | | |
| | | |
| | |
| |
| 5,400,000 | | |
| 1,500,000 | | |
$ | 0.30 | | |
| 12/31/2030 | | |
| | | |
| | |
| |
| 12,000,000 | | |
| 5,666,667 | | |
$ | 0.75 | | |
| 7/30/2031 | | |
| | | |
| | |
| |
| 1,000,000 | | |
| 694,445 | | |
$ | 0.75 | | |
| 3/16/2032 | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| - | | |
| - | |
Patrick McNulty | |
| 400,000 | | |
| 188,889 | | |
$ | 0.75 | | |
| 7/1/2031 | | |
| | | |
| | |
| |
| 500,000 | | |
| - | | |
$ | 0.75 | | |
| 7/1/2031 | | |
| | | |
| | |
| |
| 100,000 | | |
| - | | |
$ | 0.75 | | |
| 8/2/2031 | | |
| | | |
| | |
| |
| 1,000,000 | | |
| 583,334 | | |
$ | 0.75 | | |
| 10/31/2031 | | |
| | | |
| | |
| |
| 1,000,000 | | |
| 638,889 | | |
$ | 0.75 | | |
| 1/5/2032 | | |
| | | |
| | |
| |
| 128,000 | | |
| - | | |
$ | 0.75 | | |
| 3/1/2032 | | |
| | | |
| | |
| |
| 250,000 | | |
| - | | |
$ | 0.75 | | |
| 8/31/2032 | | |
| | | |
| | |
| |
| 500,000 | | |
| - | | |
$ | 0.75 | | |
| 9/30/2032 | | |
| | | |
| | |
Additional
Narrative Disclosure
Retirement
Benefits
Jet
Token currently maintains a retirement plan intended to provide benefits under section 401(k) of the Code where employees, including
the named executive officers, are allowed to contribute portions of their base compensation to a tax-qualified retirement account. Jet
Token matches 100% of contributions of up to 6% of the employee’s salary. The contributions made on behalf of the named executive
officers for fiscal year 2022 are disclosed above in the notes to the Summary Compensation Table.
Potential
Payments on Termination or Change in Control
Mr.
Murnane is entitled to a special cash bonus of $1.5 million paid at the effective date of a Change of Control transaction provided he
is still employed by Jet Token at the time of the closing. For purposes of hie employment agreement, “Change of Control”
means (i) the closing of a merger, consolidation, liquidation or reorganization of Jet Token into or with another company or other legal
person, after which merger, consolidation, liquidation or reorganization the capital stock of Jet Token outstanding prior to consummation
of the transaction is not converted into or exchanged for or does not represent more than 50% of the aggregate voting power of the surviving
or resulting entity; (ii) the direct or indirect acquisition by any person of more than 50% of the voting capital stock of Jet Token,
in a single or series of related transactions; (iii) the sale, exchange, or transfer of all or substantially all of Jet Token’s
assets (other than a sale, exchange, or transfer to one or more entities where the stockholders of Jet Token immediately before such
sale, exchange or transfer retain, directly or indirectly, at least a majority of the beneficial interest in the voting stock of the
entities to which the assets were transferred). The transaction contemplated herein will not constitute a Change of Control under Mr.
Murnane’s employment agreement.
Post-Closing
Executive Compensation Arrangements
This
section describes the plans and arrangements Jet.AI Inc. intends to maintain following the consummation of the Business Combination for
the benefit of its employees, including the named executive officers.
Omnibus
Incentive Plan. In connection with the Business Combination, the Oxbridge Board will adopt the Omnibus Incentive Plan, subject to
shareholder approval, in order to facilitate the grant of equity awards to attract, retain and incentivize employees (including the named
executive officers), independent contractors and directors of Jet.AI Inc. and its affiliates, which is essential to Jet.AI Inc.’s
long term success. The Omnibus Incentive Plan is a continuation of the Jet Token Option Plans, which will be assumed from Jet Token and
amended, restated and re-named into the form of the Omnibus Incentive Plan effective as of the consummation of the Business Combination.
For additional information about the Omnibus Incentive Plan, please see “Proposal No. 5 — The Omnibus Incentive Plan Proposal.”
Director
Compensation
Historically,
Mr. Winston has been Jet Token’s sole director. Mr. Winston did not receive any additional compensation for his service as a director
for 2022.
Non-Employee
Director Compensation Arrangements
In
connection with the Business Combination, the Jet.AI Board will adopt a new non-employee director compensation policy effective upon
the closing of the Business Combination. The new policy is designed to attract and retain high quality non-employee directors by providing
competitive compensation and aligning their interests with the interests of Jet.AI stockholders through equity awards.
MANAGEMENT
AFTER THE BUSINESS COMBINATION
Executive
Officers and Directors After the Business Combination
Effective
immediately after the consummation of the Business Combination, the business and affairs of the post-combination company will be managed
by or under the direction of the Jet.AI Board. The following table sets forth certain information, including ages as of [_____, 2023],
regarding the persons who are expected to serve as executive officers and directors of Jet.AI upon the consummation of the Business Combination
and assuming the election of the nominees at the extraordinary general meeting as set forth in the section entitled “Proposal No.
6 — The Director Election Proposal.”
Name |
|
Age |
|
Position |
Michael
D. Winston, CFA(b) |
|
46 |
|
Executive
Chairman, Director |
George
Murnane(b) |
|
65 |
|
Chief
Executive Officer, Director |
Jay
Madhu(a) |
|
[55] |
|
Director |
Wrendon
Timothy(a) |
|
[43] |
|
Director |
Patrick
McNulty(b) |
|
39 |
|
Chief
Operating Officer |
| (a) | Oxbridge
designee. |
| (b) | Jet
Token designee. |
Information
about Anticipated Executive Officers and Directors upon the Consummation of the Business Combination
Executive
Officers
Michael
D. Winston, CFA founded Jet Token in 2018 and has served as its Executive Chairman since Jet Token’s founding. Mr. Winston
began his career in 1999 with Credit Suisse First Boston Corporation and later worked as a portfolio manager at Millennium Partners LP.
In 2012, Mr. Winston formed the Sutton View group of companies, an alternative asset management platform where he advised one of the
largest academic endowments in the world. Mr. Winston received an MBA in Finance and Real Estate from Columbia Business School in 2005,
and a BA in Economics from Cornell University in 1999. While at Cornell he studied for a year at the London School of Economics and at
age 18 won a $1 million prize from IBM for his first startup company. Mr. Winston is a CFA Charterholder, and a member of the Economic
Club of New York. We believe Mr. Winston is qualified to serve as a director because of his operational and historical expertise gained
from serving as Jet Token’s Founder and Executive Chairman.
George
Murnane has served as Jet Token’s Chief Executive Officer since September 2019. Mr. Murnane has over 20 years of senior executive
experience, including 14 years as a Chief Operating Officer and/or Chief Financial Officer in the air transportation and aircraft industry,
including as Chief Executive Officer for ImperialJet S.a.l from 2013 to 2019, Chief Operating Officer and Acting Chief Financial Officer
of VistaJet Holdings, S.A. in 2008, Chief Financial Officer of Mesa Air Group from 2002 to 2007, Chief Operating Officer and Chief Financial
Officer of North-South Airways from 2000 to 2002, Executive Vice President, Chief Operating Officer and Chief Financial Officer of International
Airline Support Group from 1996 to 2002 and Executive Vice President and Chief Operating Officer of Atlas Air, Inc. from 1995 to 1996.
From 2009 until he joined Jet Token, Mr. Murnane was a managing partner of Barlow Partners, a consulting services firm providing operational
and financial management, merger and acquisition, financing and restructuring expertise to industrial and financial companies. Mr. Murnane
received an MBA from The Wharton School of the University of Pennsylvania and a BA in Economics from the University of Pennsylvania in
1980. We believe Mr. Murnane is qualified to serve as a director because of his expertise gained from serving as Jet Token’s Chief
Executive Officer and his extensive financial experience.
Patrick
McNulty has served as Jet Token’s Chief Operating Officer since June 2021. Prior to joining Jet Token, Mr. McNulty served as
a manager of Sales Operations and Business Development with Honda Aircraft Company. While with Honda Aircraft, Mr. McNulty led the development
of a robust sales engineering team and was instrumental in product development and market analysis for the manufacturer. Prior to Honda
Aircraft Company, Mr. McNulty worked in the aircraft engine division of Rolls-Royce North America and at light jet manufacturer Eclipse
Aviation. Mr. McNulty is a graduate of the Embry-Riddle Aeronautical University (BS Aerospace Engineering, MBA Aviation).
Non-Employee
Directors
Jay
Madhu has been Oxbridge’s Chairman of the Board, Chief Executive Officer and President since April 2021. Mr. Madhu is a founder
of Oxbridge Re Holdings Limited (NASDAQ: OXBR), a Cayman Islands based NASDAQ-listed reinsurance holding company. He has served as the
President, Chief Executive Officer and director since its inception in April 2013 and serves as Chairman of the Board of Directors since
March 2018. Mr. Madhu also serves as a director of Oxbridge Reinsurance Limited and Oxbridge Re NS, the wholly owned licensed reinsurance
subsidiaries of Oxbridge Re. Mr. Madhu also serves as a director of our company’s sponsor, OAC Sponsor Ltd. Mr. Madhu is a founder
and director of HCI Group, Inc. (NYSE: HCI), an NYSE-listed publicly traded company (“HCI”) since May 2007. Mr. Madhu serves
on the board of HCI, which oversaw and monitored the formation and growth of TypTap Insurance Company (“TypTap”) and its
holding company, TypTap Insurance Group, Inc. TypTap is HCI’s rapidly growing InsurTech homeowners and flood insurance subsidiary
formed in January 2016, now with over a $100 million in annualized revenue. Mr. Madhu also served on the board of Exzeo Software Private
Limited (“Exzeo”), an Indian software development company and subsidiary of HCI from August 2012 to December 2018. TypTap’s
operations are powered substantially by technologies developed by Exzeo. Mr. Madhu also serves as a director on a number of other HCI’s
subsidiaries, and also served as President of Green Leaf Capital, HCI’s real estate division from June 2011 to June 2013. Mr. Madhu
also served as HCI Vice President of Investor Relations and President of Marketing during the years 2008 through 2013. Mr. Madhu has
also served as a director on the board of directors of First Home Bancorp, Inc. (OTCQX: FHBI), an OTC-listed publicly held bank holding
company in Seminole, Florida from August 2013 to April 2014. Mr. Madhu also served as a director on the board of directors of Wheeler
Real Estate Investment Trust, Inc. (NASDAQ: WHLR), a NASDAQ listed publicly held real estate investment trust from November 2012 to June
2014.
Mr.
Madhu is an approved director with Cayman Islands Monetary Authority, Bermuda Monetary Authority, Florida Office of Insurance Regulation,
Arkansas Insurance Department, California Department of Insurance, Maryland Insurance Administration, New Jersey Department of Banking
and Finance, North Carolina Department of Insurance, Ohio Department of Insurance, Pennsylvania Insurance Department and South Carolina
Department of Insurance. Mr. Madhu attended Northwest Missouri State University where he studied marketing and management. We believe
that Mr. Madhu is qualified to serve as a director because of his considerable business and capital markets experience.
Wrendon
Timothy has been Oxbridge’s Chief Financial Officer, Treasurer, Secretary and director since April 2021. He has served
as a director, chief financial officer and corporate secretary of Oxbridge Re Holdings Limited (NASDAQ: OXBR), a Cayman Islands based
NASDAQ-listed reinsurance holding company. He has served in the positions of chief financial officer and corporate secretary since August
2013 and as a director since November 2021. In his role, he has provided financial and accounting consulting services with a focus on
technical and SEC reporting, compliance, internal auditing, corporate governance, mergers & acquisitions analysis, risk management,
and CFO and controller services. Mr. Timothy also serves as an executive and director of Oxbridge Reinsurance Limited and Oxbridge Re
NS, the wholly-owned licensed reinsurance subsidiaries of Oxbridge Re Holdings Limited. Mr. Timothy also serves as a director
of Oxbridge’s Sponsor, OAC Sponsor Ltd.
Mr.
Timothy started his financial career at PricewaterhouseCoopers (Trinidad) in 2004 as an Associate in their assurance division, performing
external and internal audit work, and tax-related services. Throughout his career progression and transitions through KPMG Trinidad and
PricewaterhouseCoopers (Cayman Islands), Mr. Timothy has successfully delivered services across both the public and private sectors,
spanning insurance and reinsurance, banking, hedge funds, trusts, investment management, manufacturing, beverage, construction, glass,
healthcare, retail, construction, marketing, restaurant, software, sports, and tourism industries. Mr. Timothy management roles allowed
him to be heavily involved in the planning, budgeting, and leadership of engagement teams, serving as a liaison for senior client management,
and advising on technical accounting matters. Mr. Timothy is a Fellow of the Association of Chartered Certified Accountants (ACCA), a
Fellow Chartered Corporate Secretary and also holds a Postgraduate Diploma in Business Administration and a Master of Business
Administration, with Distinction (with a Specialism in Finance (with Distinction), from Heriot Watt University in Edinburg, Scotland.
Mr. Timothy holds directorship and leadership roles with a number of privately-held companies, and also serves on various not-for-profit
organizations, including his governance role as Chairman of Audit & Risk Committee of The Utility Regulation & Competition Office
of the Cayman Islands, and Chairman of the Cayman Islands Conference of SDA. Mr. Timothy is an active Fellow Member of the ACCA,
an active member of the Cayman Islands Institute of Professional Accountants (CIIPA), and an active Fellow Member of the Chartered
Governance Institute (formerly the Institute of Chartered Secretaries and Administrators).
We
believe that Mr. Timothy is qualified to serve as a director because of his extensive capital markets experience and significant expertise
across a wide array of corporate matters.
Family
Relationships
There
are no familial relationships among the Jet.AI directors and executive officers.
Board
Composition
If
the Proposed Organizational Documents are approved, upon the consummation of the Business Combination, the Jet.AI Board will be comprised
of seven directors and will be divided into three classes with staggered three-year terms. At each annual meeting of stockholders, the
successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third
annual meeting following election. Jet.AI’s directors will be divided among the three classes as follows:
|
● |
the
Class I directors will be two independent directors and their terms will expire at the 1st annual meeting of stockholders
after Closing; |
|
|
|
|
● |
the
Class II directors will be Jay Madhu and Wrendon Timothy and their terms will expire at the 2nd
annual meeting of stockholders after Closing; and |
|
|
|
|
● |
the
Class III directors will be Michael Winston, George Murnane and a third director whose terms will expire at the 3rd
annual meeting of stockholders after Closing. |
Directors
in a particular class will be elected for three-year terms at the annual meeting of stockholders in the year in which their terms expire.
As a result, only one class of directors will be elected at each annual meeting of Jet.AI stockholders, with the other classes continuing
for the remainder of their respective three-year terms. Each director’s term continues until the election and qualification of
his or her successor, or the earlier of his or her death, resignation or removal. This classification of the Jet.AI Board may have the
effect of delaying or preventing changes in Jet.AI’s control or management.
The
Proposed Organizational Documents that will be in effect upon the completion of the Business Combination provide that only the Jet.AI
Board can fill vacant directorships, including newly-created seats. Any additional directorships resulting from an increase in the authorized
number of directors would be distributed pro rata among the three classes so that, as nearly as possible, each class would consist of
one-third of the authorized number of directors. The Proposed Organizational Documents will also provide that Jet.AI’s directors
may only be removed for cause and by the affirmative vote of the holders of at least two-thirds of the voting power of the then-outstanding
shares entitled to vote in the election of directors, voting together as a single class.
Director
Independence
Upon
the consummation of the Business Combination, the Jet.AI Board is expected to determine that each of the directors serving on the Jet.AI
Board, other than Michael Winston, George Murnane and a third director will qualify as an independent director, as defined under the
listing rules of Nasdaq, and the Jet.AI Board will consist of a majority of “independent directors,” as defined under the
applicable rules of the SEC and Nasdaq relating to director independence requirements. In addition, Jet.AI will be subject to certain
rules of the SEC and Nasdaq relating to the membership, qualifications and operations of the audit committee, as discussed below.
Board
Leadership Structure
It
is not expected that the Jet.AI Board will have a policy requiring the positions of the Chairperson of the board of directors and Chief
Executive Officer to be separate or held by the same individual. The intended members of the Jet.AI Board believe that this determination
should be based on circumstances existing from time to time, based on criteria that are in Jet.AI’s best interests and the best
interests of its stockholders, including the composition, skills and experience of the board and its members, specific challenges faced
by Jet.AI or the industry in which it operates and governance efficiency. The proposed Jet.AI Board intends to adopt Corporate Governance
Guidelines, effective as of the consummation of the Business Combination, which will provide for the appointment of a lead independent
director at any time when the Chairperson is not independent.
Board
Committees
Effective
as of the consummation of the Business Combination, it is expected that the Jet.AI Board
will establish an audit committee, a compensation committee and a nominating and corporate
governance committee, each of which will have the composition and responsibilities described
below. The Jet.AI Board and its committees will set schedules for meeting throughout the
year and can also hold special meetings and act by written consent from time to time, as
appropriate. The Jet.AI Board will delegate various responsibilities and authority to its
committees and the committees will regularly report on their activities and actions to the
full board of directors. Members will serve on these committees until their resignation or
until otherwise determined by the Jet.AI Board. The Jet.AI Board may establish other committees
to facilitate the management of Jet.AI’s business as it deems necessary or appropriate
from time to time.
Each
committee of the Jet.AI Board will operate under a written charter approved by the Jet.AI Board. Following the consummation of the Business
Combination, copies of each charter will be posted on the Investor Relations section of Jet.AI’s website at www.jettoken.com.
The inclusion of the post-combination company’s website address or the reference to Jet.AI’s website in this proxy statement/prospectus
does not include or incorporate by reference the information on Jet Token’s website into this proxy statement/prospectus.
Audit
Committee
Following
the consummation of the Business Combination, Jet.AI’s audit committee will be comprised of Wrendon Timothy and [_______________],
with Mr. Timothy serving as audit committee chairperson. It is anticipated that the Jet.AI Board will determine that Mr. Timothy and
[____________] will each meet the requirements for independence and financial literacy under the current Nasdaq listing standards and
SEC rules and regulations, including Rule 10A-3. In addition, the Jet.AI Board expects to determine that [__________] is an “audit
committee financial expert” within the meaning of Item 407(d) of Regulation S-K promulgated under the Securities Act. This designation
does not impose any duties, obligations or liabilities that are greater than are generally imposed on members of the audit committee
and the Jet.AI Board. The audit committee will be responsible for, among other things:
|
● |
selecting
a qualified firm to serve as the independent registered public accounting firm to audit Jet.AI’s financial statements; |
|
|
|
|
● |
helping
to ensure the independence and overseeing the performance of the independent registered public accounting firm; |
|
|
|
|
● |
reviewing
and discussing the results of the audit with the independent registered public accounting firm and reviewing, with management and
that firm, Jet.AI’s interim and year-end operating results; |
|
|
|
|
● |
reviewing
Jet.AI’s financial statements and critical accounting policies and estimates; |
|
|
|
|
● |
reviewing
the adequacy and effectiveness of Jet.AI’s internal controls; |
|
|
|
|
● |
developing
procedures for employees to submit concerns anonymously about questionable accounting, internal accounting controls or audit matters; |
|
|
|
|
● |
overseeing
Jet.AI’s policies on risk assessment and risk management; |
|
|
|
|
● |
overseeing
compliance with Jet.AI’s code of business conduct and ethics; |
|
|
|
|
● |
reviewing
related party transactions; and |
|
|
|
|
● |
approving
or, as permitted, pre-approving all audit and all permissible non-audit services (other than de minimis non-audit services) to be
performed by the independent registered public accounting firm. |
The
audit committee will operate under a written charter, to be effective on the date of the consummation of the Business Combination, which
satisfies the applicable rules of the SEC and the listing standards of Nasdaq, and which will be available on Jet.AI’s website
upon the consummation of the Business Combination. All audit services to be provided to Jet.AI and all permissible non-audit services,
other than de minimis non-audit services, to be provided to Jet.AI by Jet.AI’s independent registered public accounting firm will
be approved in advance by the audit committee.
Compensation
Committee
Following
the consummation of the Business Combination, Jet.AI’s compensation committee will be comprised of [_______________], and [_______________]
will be the chairperson of the compensation committee. The proposed Jet.AI Board expects to determine that each member of the compensation
committee meets the requirements for independence under the current Nasdaq listing standards and SEC rules and regulations. Each member
of the committee will be a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act. Following the consummation
of the Business Combination, the compensation committee will be responsible for, among other things:
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reviewing,
approving and determining, or making recommendations to the Jet.AI Board regarding, the compensation of Jet.AI’s executive
officers, including the Chief Executive Officer; |
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● |
making
recommendations regarding non-employee director compensation to the full Jet.AI Board; |
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● |
administering
Jet.AI’s equity compensation plans and agreements with Jet.AI executive officers; |
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reviewing,
approving and administering incentive compensation and equity compensation plans; and |
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reviewing
and approving Jet.AI’s overall compensation philosophy. |
The
compensation committee will operate under a written charter, to be effective on the date of the consummation of the Business Combination,
which satisfies the applicable rules of the SEC and Nasdaq listing standards, and will be available on Jet.AI’s website upon the
consummation of the Business Combination.
Nominating
and Corporate Governance Committee
Following
the consummation of the Business Combination, the nominating and corporate governance committee will be comprised of [_______________],
and [_______________] will be the chairperson of the nominating and corporate governance committee. The proposed Jet.AI Board expects
to determine that each member of the nominating and corporate governance committee meets the requirements for independence under the
current Nasdaq listing standards and SEC rules and regulations. Following the consummation of the Business Combination, the nominating
and corporate governance committee will be responsible for, among other things:
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identifying,
evaluating and selecting, or making recommendations to the Jet.AI Board regarding nominees for election to the Jet.AI Board and its
committees; |
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considering
and making recommendations to the Jet.AI Board regarding the composition of the Jet.AI Board and its committees; |
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● |
developing
and making recommendations to the Jet.AI Board regarding corporate governance guidelines and matters; |
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● |
overseeing
Jet.AI’s corporate governance practices; |
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● |
overseeing
the evaluation and the performance of the Jet.AI Board and individual directors; and |
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contributing
to succession planning. |
The
nominating and corporate governance committee will operate under a written charter, to be effective on the date of the consummation of
the Business Combination, which satisfies the applicable rules of the SEC and Nasdaq listing standards and will be available on Jet.AI’s
website upon the consummation of the Business Combination.
Code
of Business Conduct and Ethics
The
Jet.AI Board expects to adopt a Code of Business Conduct and Ethics that will apply to all of Jet.AI’s directors, officers and
employees, including Jet.AI’s principal executive officer, principal financial officer, principal accounting officer or controller
or persons performing similar functions. Upon the consummation of the Business Combination, the Code of Business Conduct and Ethics will
be available on the Corporate Governance section of Jet.AI’s website. In addition, Jet.AI intends to post on the Corporate Governance
section of Jet.AI’s website all disclosures that are required by law or the listing standards of Nasdaq concerning any amendments
to, or waivers from, any provision of the Code of Business Conduct and Ethics.
Compensation
Committee Interlocks and Insider Participation
None
of the intended members of the Jet.AI compensation committee is or has been at any time one of Jet.AI’s officers or employees.
None of Jet.AI’s expected executive officers currently serves, or in the past fiscal year has served, as a member of the board
of directors or compensation committee (or other board of directors committee performing equivalent functions or, in the absence of any
such committee, the entire board of directors) of any entity that has or has had one or more executive officers serving as a member of
the Jet.AI Board or compensation committee.
Limitation
on Liability and Indemnification of Directors and Officers
The
Proposed Certificate of Incorporation, which will be effective upon consummation of the Business Combination, limits Jet.AI’s directors’
liability to the fullest extent permitted under the DGCL. The DGCL provides that directors of a corporation will not be personally liable
for monetary damages for breach of their fiduciary duties as directors, except for liability:
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for
any transaction from which the director derives an improper personal benefit; |
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for
any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
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● |
for
any unlawful payment of dividends or redemption of shares; or |
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for
any breach of a director’s duty of loyalty to the corporation or its stockholders. |
If
the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability
of Jet.AI’s directors will be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.
Delaware
law and the Proposed Bylaws, which will be effective upon the consummation of the Business Combination, provide that Jet.AI will, in
certain situations, indemnify Jet.AI’s directors and officers and may indemnify other employees and other agents, to the fullest
extent permitted by law. Any indemnified person is also entitled, subject to certain limitations, to advancement, direct payment or reimbursement
of reasonable expenses (including attorneys’ fees and disbursements) in advance of the final disposition of the proceeding.
In
addition, Jet.AI will enter into separate indemnification agreements with Jet.AI’s directors and officers. These agreements, among
other things, will require Jet.AI to indemnify its directors and officers for certain expenses, including attorneys’ fees, judgments,
fines and settlement amounts incurred by a director or officer in any action or proceeding arising out of their services as one of Jet.AI’s
directors or officers or any other company or enterprise to which the person provides services at Jet.AI’s request.
Jet.AI
plans to maintain a directors’ and officers’ insurance policy pursuant to which Jet.AI’s directors and officers are
insured against liability for actions taken in their capacities as directors and officers. We believe these provisions in the Proposed
Certificate of Incorporation and Proposed Bylaws, which will be effective upon the consummation of the Business Combination, and these
indemnification agreements are necessary to attract and retain qualified persons as directors and officers.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or control persons, in the
opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
COMPARISON
OF CORPORATE GOVERNANCE AND SHAREHOLDER RIGHTS
Oxbridge
is a Cayman Islands exempted company. The Cayman Islands Companies Act (As Revised) and the Existing Organizational Documents govern
the rights of Oxbridge’s shareholders. The Cayman Islands Companies Act (As Revised) differs in some material respects from laws
generally applicable to United States corporations and their stockholders. In addition, the Existing Organizational Documents will differ
in certain material respects from the Proposed Organizational Documents. As a result, when you become a stockholder of Jet.AI, your rights
will differ in some regards as compared to when you were a shareholder of Oxbridge.
Below
is a summary chart outlining important similarities and differences in the corporate governance and rights associated with owning shares
of Oxbridge, as a Cayman Islands exempted company, and Jet.AI, as a corporation incorporated under the laws of the State of Delaware.
This
summary is qualified in its entirety by reference to the complete text of the Existing Organizational Documents, the Proposed Certificate
of Incorporation, a copy of which is attached to this proxy statement/prospectus as Annex B, and the Proposed Bylaws, a copy of
which is attached to this proxy statement/prospectus as Annex C. You should review each of the Proposed Organizational Documents,
as well as the DGCL and the Cayman Islands Companies Act (As Revised), for more information as to how these laws apply to Jet.AI and
Oxbridge, respectively.
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Delaware |
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Cayman
Islands |
Stockholder/Shareholder
Approval of Business Combinations |
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Mergers
generally require approval of a majority of all outstanding shares.
Mergers
in which less than 20% of the acquirer’s stock is issued generally do not require acquirer stockholder approval.
Mergers
in which one corporation owns 90% or more of a second corporation may be completed without the vote of the second corporation’s
board of directors or stockholders. |
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Mergers
require a special resolution, and any other authorization as may be specified in the relevant
articles of association. Parties holding certain security interests in the constituent companies
must also consent.
All
mergers (other than parent/subsidiary mergers) require shareholder approval — there is no exception for smaller mergers.
Where
a bidder has acquired 90% or more of the shares in a Cayman Islands company, it can compel the acquisition of the shares of the remaining
shareholders and thereby become the sole shareholder.
A
Cayman Islands company may also be acquired through a “scheme of arrangement” sanctioned by a Cayman Islands court and
approved by 50%+1 in number and 75% in value of shareholders in attendance and voting at a shareholders’ meeting. |
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Stockholder/Shareholder
Votes for Routine Matters |
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Generally,
approval of routine corporate matters that are put to a stockholder vote require the affirmative vote of the majority of shares present
in person or represented by proxy at the meeting and entitled to vote on the subject matter. |
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Under
the Cayman Islands Companies Act (As Revised) and the Existing Organizational Documents, routine corporate matters may be approved
by an ordinary resolution (being the affirmative vote (in person, online or by proxy) of a majority of the holders of the Class A
Ordinary Shares and Class B Ordinary Shares entitled to vote entitled to vote and actually casting votes thereon at the extraordinary
general meeting, voting as a single class). |
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Delaware |
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Cayman
Islands |
Appraisal
Rights |
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Generally,
a stockholder of a publicly traded corporation does not have appraisal rights in connection with a merger. |
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Minority
shareholders that dissent from a Cayman Islands statutory merger are entitled to be paid the fair market value of their shares, which
if necessary may ultimately be determined by the court. |
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Inspection
of Books and Records |
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Any
stockholder may inspect the corporation’s books and records for a proper purpose during the usual hours for business. |
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Shareholders
generally do not have any rights to inspect or obtain copies of the register of shareholders or other corporate records of a company. |
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Stockholder/Shareholder
Lawsuits |
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A
stockholder may bring a derivative suit subject to procedural requirements (including adopting Delaware as the exclusive forum as
per Advisory Organizational Documents Proposal 4F). |
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In
the Cayman Islands, the decision to institute proceedings on behalf of a company is generally taken by the company’s board
of directors. A shareholder may be entitled to bring a derivative action on behalf of the company, but only in certain limited circumstances. |
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Fiduciary
Duties of Directors |
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Directors
must exercise a duty of care and duty of loyalty and good faith to the company and its stockholders. |
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A
director owes fiduciary duties to a company, including to exercise loyalty, honesty and good
faith to the company as a whole.
In
addition to fiduciary duties, directors of Oxbridge owe a duty of care, diligence and skill.
Such
duties are owed to the company but may be owed direct to creditors or shareholders in certain limited circumstances. |
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Indemnification
of Directors and Officers |
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A
corporation is generally permitted to indemnify its directors and officers acting in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the corporation. |
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A
Cayman Islands company generally may indemnify its directors or officers except with regard to fraud or willful default. |
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Limited
Liability of Directors |
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Permits
limiting or eliminating the monetary liability of a director to a corporation or its stockholders, except with regard to breaches
of duty of loyalty, intentional misconduct, unlawful repurchases or dividends, or improper personal benefit. |
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Liability
of directors may be unlimited, except with regard to their own fraud or willful default. |
DESCRIPTION
OF SECURITIES
If
the Business Combination is consummated, Jet.AI will replace its Existing Organizational Documents with the Proposed Certificate of Incorporation
and Proposed Bylaws in the form attached to this proxy statement/prospectus as Annex B and Annex C, which, in the judgment
of the Oxbridge Board, is necessary to adequately address the needs of the post-combination company.
The
following summary is qualified by reference to the complete text of the Proposed Certificate of Incorporation and Proposed Bylaws, copies
of which are attached to this proxy statement/prospectus as Annex B and Annex C. We urge you to read the Proposed Certificate
of Incorporation and Proposed Bylaws in their entirety for a complete description of the rights and preferences of the post-combination
company’s securities following the Business Combination.
For
more information on the Organizational Documents Proposal and Advisory Organizational Documents Proposals, see the sections entitled
“Proposal No. 3 — The Organizational Documents Proposal” and “Proposal No. 4 — The Advisory Organizational
Documents Proposals.”
Capital
Stock
Authorized
Capitalization
The
Proposed Certificate of Incorporation will authorize the issuance of [59,000,000] shares of capital stock, consisting of two classes:
55,000,000 shares of Jet.AI Common Stock and 4,000,000 shares of Jet.AI Preferred Stock. We expect to have approximately [8.67]
million shares of Jet.AI Common Stock outstanding immediately after the consummation of the Business Combination, assuming none
of the outstanding public shares are redeemed in connection with the Business Combination, and approximately [8.44] million shares of
Jet.AI Common Stock outstanding immediately after the consummation of the Business Combination, assuming maximum redemptions by
our public shareholders in connection with the Business Combination.
Jet.AI
Common Stock
Voting
Rights
The
Proposed Certificate of Incorporation provides that, except as otherwise expressly provided by the Proposed Certificate of Incorporation
or as provided by law, the holders of Jet.AI Common Stock shall at all times vote together as a single class on all matters; provided
however, that, except as otherwise required by law, holders of shares of Jet.AI Common Stock shall not be entitled to vote on
any amendment to the Proposed Certificate of Incorporation that relates solely to the terms of one or more outstanding series of Jet.AI
Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one
or more other such series, to vote thereon pursuant to the Certificate of Incorporation. Except as otherwise expressly provided in the
Proposed Certificate of Incorporation or by applicable law, each holder of Jet.AI Common Stock shall have the right to one vote
per share of Jet.AI Common Stock held of record by such holder.
Dividend
Rights
Subject
to preferences that may apply to any shares of Jet.AI Preferred Stock outstanding at the time, shares of Jet.AI Common Stock will
be treated equally, identically and ratably, on a per share basis, with respect to any dividends or distributions as may be declared
and paid from time to time by the Jet.AI Board out of any assets of Jet.AI legally available therefor.
Rights
Upon Liquidation, Dissolution and Winding Up
Subject
to any preferential or other rights of any holders of Jet.AI Preferred Stock then outstanding, upon the liquidation, dissolution or winding
up of Jet.AI, whether voluntary or involuntary, holders of Jet.AI Common Stock will be entitled to receive ratably all assets
of Jet.AI available for distribution to its stockholders.
Other
Rights
The
holders of Jet.AI Common Stock will not have preemptive, subscription, redemption or conversion rights. There will be no redemption
or sinking fund provisions applicable to the Jet.AI Common Stock. The rights, preferences and privileges of holders of shares
of Jet.AI Common Stock will be subject to those of the holders of any shares of Jet.AI Preferred Stock that Jet.AI may issue in
the future.
Jet.AI
Preferred Stock
The
Proposed Certificate of Incorporation provides that shares of Jet.AI Preferred Stock may be issued from time to time in one or more series.
The Jet.AI Board will be authorized to fix the designation, vesting, powers (including voting powers), preferences and relative, participating,
optional or other rights (and the qualifications, limitations or restrictions thereof) of the shares of each such series and to increase
(but not above the total number of authorized shares of the class) or decrease (but not below the number of shares of such series then
outstanding) the number of shares of any such series.
The
number of authorized shares of Jet.AI Preferred Stock may also be increased or decreased (but not below the number of shares thereof
then outstanding) by the affirmative vote of the holders of a majority of the voting power of all the then-outstanding shares of capital
stock of Jet.AI entitled to vote thereon, without a separate vote of the holders of the Jet.AI Preferred Stock or any series thereof,
unless a vote of any such holders is required pursuant to the terms of any certificate of designation designating a series of Jet.AI
Preferred Stock.
The
Jet.AI Board will be able to, subject to limitations prescribed by Delaware law, without stockholder approval, issue Jet.AI Preferred
Stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the Jet.AI Common
Stock and could have anti-takeover effects. The ability of the Jet.AI Board to issue Jet.AI Preferred Stock without stockholder approval,
while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the
effect of delaying, deferring or preventing a change of control of Jet.AI or the removal of Jet.AI’s management and may adversely
affect the market price of Jet.AI Common Stock and the voting and other rights of the holders of Jet.AI. Jet.AI will have no Jet.AI
Preferred Stock outstanding at the date the Proposed Certificate of Incorporation becomes effective. Although the Oxbridge Board does
not currently intend to issue any shares of Jet.AI Preferred Stock, we cannot assure you that the Jet.AI Board will not do so in the
future.
Warrants
Public
Warrants
Public
warrants may only be exercised for a whole number of shares. No fractional public warrants will be issued upon separation of the Oxbridge
Units and only whole public warrants will trade. The public warrants will become exercisable on the later of (a) 30 days after the completion
of the Business Combination (or any other Initial Business Combination) and (b) 12 months from the closing of our IPO; provided in each
case that we have an effective registration statement under the Securities Act covering the Jet.AI Common Stock issuable upon
exercise of the public warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt
from registration under the securities, or blue sky, laws of the state of residence of the holder (or we permit holders to exercise their
warrants on a cashless basis under certain circumstances). We have agreed that as soon as practicable, but in no event later than 20
business days after the closing of the Business Combination, we will use commercially reasonable efforts to file with the SEC and have
an effective registration statement covering the Jet.AI Common Stock issuable upon exercise of the warrants and to maintain a
current prospectus relating to the Jet.AI Common Stock until the warrants expire or are redeemed, as specified in the Warrant
Agreement. If a registration statement covering the Jet.AI Common Stock issuable upon exercise of the warrants is not effective
60 business days after the closing of the Business Combination, warrant holders may, until such time as there is an effective registration
statement and during any period when we have failed to maintain an effective registration statement, exercise warrants on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the shares
of Jet.AI Common Stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they
satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require
holders of public warrants who exercise their warrants to do so on a “cashless basis” and, in the event we so elect, we will
not be required to file or maintain in effect a registration statement, and in the event we do not so elect, we will use commercially
reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The
warrants have an exercise price of $11.50 per share, subject to adjustments, and will expire five years after the completion of the Business
Combination or any other Initial Business Combination or earlier upon redemption or liquidation. In addition, if we issue additional
Jet.AI Common Stock or equity-linked securities for capital raising purposes in connection with the closing of the Business Combination
at an issue price or effective issue price of less than $__ per share of Jet.AI Common Stock (with such issue price or effective
issue price to be determined in good faith by the Oxbridge Board and, in the case of any such issuance to the Sponsor or its affiliates,
without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly
Issued Price”), the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the Newly Issued
Price.
Once
the warrants become exercisable, we may redeem the outstanding warrants for cash (except as described herein with respect to the private
placement warrants):
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in
whole and not in part; |
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● |
at
a price of $0.01 per warrant; |
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● |
upon
a minimum of 30 days’ prior written notice of redemption; and |
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● |
if,
and only if, the last sale price of the Jet.AI Common Stock equals or exceeds $__ per share (as adjusted for share sub-divisions,
share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on
the third trading day prior to the date on which we send the notice of redemption to the warrant holders. |
We
will not redeem the warrants for cash unless a registration statement under the Securities Act covering the Jet.AI Common Stock
issuable upon exercise of the warrants is effective and a current prospectus relating to the Jet.AI Common Stock is available
throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt
from registration under the Securities Act.
Commencing
90 days after the warrants become exercisable, we may redeem the outstanding warrants for Jet.AI Common Stock:
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● |
in
whole and not in part; |
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● |
at
a price equal to a number of shares of Jet.AI Common Stock to be determined by reference to an agreed table based on the redemption
date and the “fair market value” of the Jet.AI Common Stock; |
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● |
upon
a minimum of 30 days’ prior written notice of redemption; and |
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if,
and only if, the last sale price of the Jet.AI Common Stock equals or exceeds $__ per share (as adjusted per share sub-divisions,
share dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which we send the notice
of redemption to the warrant holders. |
The
“fair market value” of the Jet.AI Common Stock means the average reported last sale price of the Jet.AI Common
Stock for the ten trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the
holders of warrants.
In
no event will we be required to net cash settle any warrant. If we are unable to complete the Business Combination or any other Initial
Business Combination within the Combination Period and we liquidate the funds held in the Trust Account, holders of warrants will not
receive any of such funds with respect to their warrants, nor will they receive any distribution from our assets held outside of the
Trust Account with respect to such warrants. Accordingly, the warrants may expire worthless.
Private
Placement Warrants
The
private placement warrants are identical to the public warrants underlying the Oxbridge Units sold in the IPO, except that the private
placement warrants and the Jet.AI Common Stock issuable upon exercise of the private placement warrants will not be transferrable,
assignable or salable until 30 days after the completion of the Business Combination or any other Initial Business Combination, subject
to certain limited exceptions. Additionally, the private placement warrants will be non-redeemable so long as they are held by the initial
purchasers or their permitted transferees. If the private placement warrants are held by someone other than the initial purchasers or
their permitted transferees, the private placement warrants will be redeemable by Oxbridge and exercisable by such holders on the same
basis as the public warrants.
Our
Transfer Agent and Warrant Agent
The
transfer agent for our Ordinary Shares (and, after the consummation of the Business Combination, the Jet.AI Common Stock) and
the warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer
& Trust Company in its roles as transfer agent and warrant agent, its agents and each of its stockholders, directors, officers and
employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for
any liability due to any gross negligence, willful misconduct or bad faith of the indemnified person or entity.
Certain
Anti-Takeover Provisions of Delaware Law and our Proposed Organizational Documents
We
will not opt out of Section 203 of the DGCL under the Proposed Organizational Documents. Under Section 203 of the DGCL, Jet.AI will be
prohibited from engaging in any business combination with any stockholder for a period of three years following the time that such stockholder
(the “interested stockholder”) came to own at least 15% of the outstanding voting stock of Jet.AI (the “acquisition”),
except if:
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the
Jet.AI Board approved the acquisition prior to its consummation; |
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● |
the
interested stockholder owned at least 85% of the outstanding voting stock upon consummation of the acquisition; or |
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the
business combination is approved by the Jet.AI Board, and by a 2/3 majority vote of the other stockholders in a meeting. |
Generally,
a “business combination” includes any merger, consolidation, asset or stock sale or certain other transactions resulting
in a financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is a person
who, together with that person’s affiliates and associates, owns, or within the previous three years owned, 15% or more of our
voting stock.
Under
certain circumstances, declining to opt out of Section 203 of the DGCL will make it more difficult for a person who would be an “interested
stockholder” to effect various business combinations with Jet.AI for a three-year period. This may encourage companies interested
in acquiring Jet.AI to negotiate in advance with the Jet.AI Board because the stockholder approval requirement would be avoided if the
Jet.AI Board approves the acquisition which results in the stockholder becoming an interested stockholder.
This
may also have the effect of preventing changes in the Jet.AI Board and may make it more difficult to accomplish transactions which stockholders
may otherwise deem to be in their best interests.
Written
Consent by Stockholders
Under
the Proposed Organizational Documents, subject to the rights of any series of Jet.AI Preferred Stock then outstanding, any action required
or permitted to be taken by the stockholders of Jet.AI must be effected at a duly called annual or special meeting of stockholders of
Jet.AI and may not be effected by any consent in writing by such stockholders.
Special
Meeting of Stockholders
Under
the Proposed Organizational Documents, special meetings of stockholders of Jet.AI may be called only by the chairperson of the Jet.AI
Board, the chief executive officer or president of Jet.AI, or the Jet.AI Board acting pursuant to a resolution adopted by a majority
of the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships, and may
not be called by any other person or persons. Only such business shall be considered at a special meeting of stockholders as shall have
been stated in the notice for such meeting.
Advance
Notice Requirements for Stockholder Proposals and Director Nominations
Under
the Proposed Bylaws, advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders
before any meeting of the stockholders of Jet.AI shall be given in the manner and to the extent provided in Jet.AI’s bylaws.
Listing
of Securities
We
have applied to list the Jet.AI Common Stock, the Jet.AI Warrants and the Merger Consideration Warrants on Nasdaq
under the symbols “PJ,” “PJAIW” and “PJAIZ,” respectively, upon the Closing. The Oxbridge Units will automatically
separate into the component securities upon consummation of the Business Combination and, as a result, will no longer trade as a separate
security.
SECURITIES
ACT RESTRICTIONS ON RESALE OF Jet.AI Common Stock
Rule
144
Pursuant
to Rule 144, a person who has beneficially owned restricted shares of Jet.AI Common Stock or Jet.AI Warrants for at least six
months would be entitled to sell their securities provided that (a) such person is not deemed to have been one of our affiliates at the
time of, or at any time during the three months preceding, a sale and (b) we are subject to the Exchange Act periodic reporting requirements
for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the
12 months (or such shorter period as we were required to file reports) preceding the sale. Persons who have beneficially owned restricted
shares of Jet.AI Common Stock or Jet.AI Warrants for at least six months but who are affiliates at the time of, or at any time
during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell
within any three month period only a number of securities that does not exceed the greater of:
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● |
1%
of the total number of shares of such Jet.AI securities then-outstanding; or |
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the
average weekly reported trading volume of such Jet.AI securities during the four calendar weeks preceding the filing of a notice
on Form 144 with respect to the sale. |
Sales
by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current
public information about us.
Restrictions
on the Use of Rule 144 by Shell Companies or Former Shell Companies
Rule
144 is not available for the resale of securities initially issued by shell companies or issuers that have been at any time previously
a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:
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the
issuer of the securities that was formerly a shell company has ceased to be a shell company; |
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● |
the
issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
|
|
|
|
● |
the
issuer of the securities has filed all Exchange Act reports and materials required to be filed, as applicable, during the preceding
12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on
Form 8-K; and |
|
|
|
|
● |
at
least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status
as an entity that is not a shell company. |
As
a result, our initial shareholders will not be able to sell their Jet.AI Common Stock pursuant to Rule 144 without registration
until one year after we have completed the Business Combination or any other Initial Business Combination, although these shares may
be sold sooner to the extent they have been registered on a registration statement that has been declared effective by the SEC.
BENEFICIAL
OWNERSHIP OF SECURITIES
The
following table sets forth information known to Oxbridge regarding (a) the actual beneficial ownership of our Ordinary Shares as of the
record date (prior to the Domestication and Business Combination) and (b) the expected beneficial ownership of our voting common stock
immediately following consummation of the Domestication and Business Combination, assuming that no public shares of Oxbridge are redeemed,
and alternatively the maximum redemptions scenario, which assumes that 237,734 Class A Ordinary Shares are redeemed as further described
in the subsection entitled “Unaudited Pro Forma Condensed Combined Financial Information — Note 1 — Basis of Presentation,”
resulting in an aggregate payment of $2,588,920 million out of the Trust Account, in each case, by:
|
● |
each
person who is, or is expected to be, the beneficial owner of more than 5% of the outstanding shares of Jet.AI Common Stock; |
|
|
|
|
● |
each
of our named executive officers and directors; |
|
|
|
|
● |
each
person who will become a named executive officer or director of Jet.AI post-Business Combination; and |
|
|
|
|
● |
all
current executive officers and directors of Oxbridge, as a group pre-Business Combination and all executive officers and directors
of Jet.AI post-Business Combination. |
Beneficial
ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security
if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently
exercisable or exercisable within 60 days.
The
beneficial ownership of our Ordinary Shares prior to the Domestication and Business Combination is based on 4,176,952 Class A Ordinary
Shares and Class B Ordinary Shares issued and outstanding in the aggregate as of March [___], 2023.
The
expected beneficial ownership of shares of our voting common stock immediately following consummation of the Domestication and Business
Combination, assuming none of our public shares are redeemed, (a) assumes (i) that none of Oxbridge’s initial shareholders or the
Historical Rollover Shareholders purchase Class A Ordinary Shares in the open market, (ii) that there are no other issuances of equity
interests of Oxbridge or Jet Token and (iii) that there are no exercises of Jet Token Options or Jet Token Warrants and (b) does not
take into account Jet.AI Warrants or Merger Consideration Warrants that will remain outstanding following the Business Combination and
may be exercised at a later date.
The
expected beneficial ownership of shares of our voting common stock immediately following consummation of the Domestication and Business
Combination, assuming the maximum redemptions scenario where 237,734 public shares have been redeemed, (a) assumes (i) that none of Oxbridge’s
initial shareholders or the Historical Rollover Shareholders purchase Class A Ordinary Shares in the open market, (ii) that there are
no other issuances of equity interests of Oxbridge or Jet Token and (iii) that there are no exercises of Jet Token Options or Jet Token
Warrants and (b) does not take into account Jet.AI Warrants that will remain outstanding following the Business Combination and may be
exercised at a later date.
Unless
otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all shares
of voting common stock beneficially owned by them.
Shares
of Jet.AI Common Stock that may be acquired by an individual or group within 60 days of [_____, 2023], pursuant to the exercise
of options or warrants, are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group,
but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table.
| |
Pre-Business Combination | | |
Post-Business Combination | |
| |
Common Stock | | |
Assuming No Further Redemption | | |
Assuming 100% Redemption | |
Name and Address of Beneficial Owner | |
Share Beneficially Owned | | |
% of Outstanding Shares of Common Stock | | |
Number of Shares | | |
% | | |
Number of Shares | | |
% | |
Directors and Executive Officers of Oxbridge(1): | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Jay Madhu | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Wrendon Timothy | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Jason Butcher | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Allan Martin | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
William Yankus | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
All Directors and Executive Officers of Oxbridge Pre-Business
Combination as a Group (Five Individuals) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Five Percent Holders of Oxbridge: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
OAC Sponsor Ltd.(2) | |
| 2,875,000 | | |
| 68.8 | | |
| 2,875,000 | | |
| 33.1 | | |
| 2,875,000 | | |
| 34.1 | |
Directors and Executive Officers of Post-Business Combination Company : | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Michael D. Winston, CFA(3) | |
| — | | |
| — | | |
| 2,547,547 | | |
| 29.4 | | |
| 2,547,547 | | |
| 30.2 | |
George Murnane(3) | |
| — | | |
| — | | |
| 521,977 | | |
| 5.7 | | |
| 521,977 | | |
| 5.8 | |
Jay Madhu(1) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Wrendon Timothy(1) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Patrick McNulty(3) | |
| — | | |
| — | | |
| 80,022 | | |
| * | | |
| 80,022 | | |
| * | |
All Directors and Executive Officers of Post-Business Combination Company as a group ([8] individuals) | |
| — | | |
| * | | |
| 3,149,546 | | |
| 36.3 | | |
| 3,149,546 | | |
| 37.3 | |
Five Percent Holders of Post-Business Combination Company After Consummation of the Business Combination: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
OAC Sponsor Ltd. | |
| 2,875,000 | | |
| 68.8 | | |
| 2,875,000 | | |
| 33.1 | | |
| 2,875,000 | | |
| 34.1 | |
Michael D. Winston | |
| — | | |
| * | | |
| 2,547,547 | | |
| 29.4 | | |
| 2,547,547 | | |
| 30.2 | |
*
Less than 1%.
(1) |
Unless
otherwise noted, the business address of each of the entities or individuals is c/o Oxbridge Acquisition Corp. Suite 201, 42 Edward
Street, George Town, Grand Cayman, Cayman Islands. |
|
|
(2) |
OAC
Sponsor Ltd. is the record holder of the shares reported herein. Each of our directors and officers have direct or indirect membership
interests in OAC Sponsor Ltd. OAC Sponsor Ltd. is governed and controlled by a board of directors of 3 members, Jay Madhu, Wrendon
Timothy, and Jason Butcher. Each director has one vote, and the approval of a majority is required to approve an action. Under the
so-called “rule of three,” if voting and dispositive decisions regarding an entity’s securities are made by a majority
comprised of two or more individuals of a three-member (or greater) board, and a voting and dispositive decision requires the approval
of a majority of those individuals, none of the individuals is deemed a beneficial owner of the entity’s securities. This is
the situation with regard to OAC Sponsor Ltd. Based on the foregoing, no director exercises voting or dispositive control over any
of the securities held by OAC Sponsor Ltd. Accordingly, none of them will be deemed to have or share beneficial ownership of such
shares and, for the avoidance of doubt, each expressly disclaims any such beneficial interest to the extent of any pecuniary interest
he may have therein, directly or indirectly. Each of our officers, directors and advisors is, directly or indirectly, a member of
our sponsor. |
|
|
(3) |
Unless
otherwise indicated, the address of each of the entities or individuals is c/o Jet Token, 10845 Griffith Peak Drive, Suite 200, Las
Vegas, NV 89135. |
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Oxbridge
Related Party Transactions
Founder
Shares
On
April 12, 2021, the Sponsor paid $25,000, or approximately $0.009 per share, to cover certain
expenses on behalf of Oxbridge in exchange for issuance of 2,875,000 Class B Ordinary Shares,
par value $0.0001 (the “Founder Shares”). The Founder Shares will automatically
convert into shares of Class A Ordinary Shares at the time of Oxbridge’s initial Business
Combination and are subject to certain transfer restrictions.
The
Initial Shareholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the
earlier to occur of: (i) one year after the completion of the initial Business Combination or (ii) the date following the completion
of the initial Business Combination on which Oxbridge completes a liquidation, merger, share exchange or other similar transaction that
results in all of the shareholders having the right to exchange their Ordinary Shares for cash, securities or other property. Notwithstanding
the foregoing, if the closing price of the Class A Ordinary Shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions,
share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing
at least 120 days after the initial Business Combination, the Founder Shares will be released from the lockup.
Private
Placement Warrants
Simultaneously
with the closing of the IPO, Oxbridge consummated the Private Placement of 5,760,000 Private Placement Warrants to the Sponsor and Maxim
at an average purchase price of $1.00 per Private Placement Warrant, generating gross proceeds to Oxbridge of $5,760,000. The Private
Placement Warrants are identical to the Public Warrants sold as part of the Units in the IPO, except that the Sponsor and Maxim have
agreed not to transfer, assign or sell any of the Private Placement Warrants (except to certain permitted transferees) until 30 days
after the completion of Oxbridge’s initial Business Combination. The Private Placement Warrants are also not redeemable by Oxbridge
so long as they are held by the Sponsor and Maxim or their respective permitted transferees.
Certain
proceeds from the Private Placement Warrants were added to the proceeds from the IPO to be held in the Trust Account. If Oxbridge does
not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private
Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted
transferees.
Related
Party Loans
On
April 19, 2021, the Sponsor agreed to loan Oxbridge an aggregate of up to $300,000 to cover for expenses related to the IPO pursuant
to a promissory note (the “Note”). This loan was non-interest bearing and was payable upon the earlier of December 31, 2021
or the completion of the IPO. The loan amounted to $195,175 and was repaid upon the closing of the IPO out of offering proceeds not held
in the Trust Account.
Extension
Amendment Proposal and Promissory Note
On
November 9, 2022, Oxbridge held an extraordinary general meeting of shareholders. At the extraordinary general meeting, Oxbridge’s
shareholders were presented the proposals to extend the date by which Oxbridge must consummate a business combination (the “Termination
Date”) from November 16, 2022 to August 16, 2023 (or such earlier date as determined by the board of directors) by amending Oxbridge’s
Amended and Restated Memorandum and Articles of Association (the “Extension Amendment Proposal”). The Extension Amendment
Proposal to amend Oxbridge’s Amended and Restated Memorandum and Articles of Association (“Charter Amendment”) was
approved. Oxbridge filed the Charter Amendment with the Cayman Islands Registrar of Companies on November 11, 2022.
In
connection with the vote to approve the Extension Amendment Proposal, the holders of 10,313,048 Class A ordinary shares properly exercised
their right to redeem their shares for cash at a redemption price of approximately $10.22 per share, for an aggregate redemption amount
of $105,424,960 in connection with the Extension Amendment Proposal.
The
Sponsor agreed to contribute to us a loan of $575,000 (the “Extension Loan”), to be deposited into the trust account to extend
the Termination Date from November 16, 2022 to August 16, 2023. On November 14, 2022, Oxbridge issued a promissory note (the “Extension
Note”) in the aggregate principal amount of $575,000 to the Sponsor, in connection with the Extension Loan. The Extension Loan
was deposited into the Trust Account on November 15, 2022.
The
Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of an Initial Business
Combination, or (b) the date of the liquidation of Oxbridge.
Working
Capital Loans
In
addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor,
other Initial Shareholder, or certain of Oxbridge’s officers and directors may, but are not obligated to, loan Oxbridge funds as
may be required (“Working Capital Loans”). If Oxbridge completes a Business Combination, Oxbridge would repay the Working
Capital Loans. In the event that a Business Combination does not close, Oxbridge may use a portion of proceeds held outside the Trust
Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.
Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with
respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest,
or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into private placement warrants
at a price of $1.00 per warrant. As of December 31, 2022 and 2021, Oxbridge did not have any outstanding borrowings under the Working
Capital Loans.
Administrative
Services Agreement
Commencing
on the effective date of the Company’s IPO, Oxbridge agreed to pay its Sponsor a total of up to $10,000 per month for office space,
utilities, secretarial and administrative support. Upon completion of the initial Business Combination or Oxbridge’s liquidation,
Oxbridge will cease paying these monthly fees. For the year ended December 31, 2022, and for the period ending December 31, 2021, Oxbridge
paid $100,000 and $50,000, respectively, to the Sponsor under the Administrative Services Agreement.
Jet
Token’s Related Party Transactions
From
time to time, related parties make payments on Jet Token’s behalf or advance cash to Jet Token for operating costs which require
repayment. Such transactions are considered short-term advances and non-interest bearing. During the years ended December 31, 2022 and
2021, Michael Winston, Jet Token’s Founder and Executive Chairman, advanced a total of $42,000 and $200,196, respectively, to Jet
Token in the form of a non-interest-bearing loan. As of December 31, 2022 such advances had been fully repaid.
LEGAL
MATTERS
Dykema
Gossett PLLC has passed upon the validity of the securities of Jet.AI offered by this proxy statement/prospectus and certain other legal
matters related to this proxy statement/prospectus.
EXPERTS
The
consolidated financial statements of Jet Token as of December 31, 2022 and 2021 included in this proxy statement/prospectus have been
audited by BF Borgers CPA PC, an independent registered public accounting firm, as set forth in their report, thereon, appearing elsewhere
in this proxy statement/prospectus, and are included in reliance upon such report given on the authority of such firm as experts in auditing
and accounting.
The
consolidated financial statements of Oxbridge as of December 31, 2022 and 2021 included in this proxy statement/prospectus have been
audited by Hacker Johnson & Smith P.A., an independent registered public accounting firm, as set forth in their report thereon appearing
elsewhere herein, which includes an explanatory paragraph as to the Company’s ability to continue as a going concern, and are included
in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
HOUSEHOLDING
INFORMATION
Unless
Oxbridge has received contrary instructions, Oxbridge may send a single copy of this proxy statement/prospectus to any household at which
two or more shareholders reside if we believe the shareholders are members of the same family. This process, known as “householding,”
reduces the volume of duplicate information received at any one household and helps to reduce our expenses. However, if shareholders
prefer to receive multiple sets of Oxbridge’s disclosure documents at the same address this year, the shareholders should follow
the instructions described below. Similarly, if an address is shared with another shareholder and together both of the shareholders would
like to receive only a single set of Oxbridge’s disclosure documents, the shareholders should follow these instructions:
|
● |
If
the shares are registered in the name of the shareholder, the shareholder should contact Oxbridge at its offices at Suite 201, 42
Edward Street, George Town, Grand Cayman, Cayman Islands, KY1-9006, directed to the attention of its Secretary, or its telephone
number at (345) 749-7570 to inform Oxbridge of his or her request; or |
|
|
|
|
● |
If
a bank, broker or other nominee holds the shares, the shareholder should contact the bank, broker or other nominee directly. |
TRANSFER
AGENT AND REGISTRAR
The
transfer agent for our securities is Continental Stock Transfer & Trust Company.
SHAREHOLDER
PROPOSALS AND NOMINATIONS
The
Proposed Bylaws, which will be effective upon the consummation of the Business Combination, provide notice procedures for stockholders
to propose business (other than director nominations) to be considered by stockholders at a meeting. To be timely, a stockholder’s
notice must be received by the Secretary at the principal executive offices of Jet.AI not later than the close of business on the 90th
day nor earlier than the close of business 120th day prior to the first anniversary of the preceding year’s annual
meeting; provided, however, that in the event that no annual meeting was held during the preceding year or the date of the annual meeting
is advanced more than 30 days prior to or delayed by more than 60 days after such anniversary of the preceding year’s annual meeting,
notice by the stockholder to be timely must be so received no earlier than the close of business on the 120th day prior to
such annual meeting and no later than the close of business on the later of the 90th day prior to such annual meeting or the
tenth day following the day on which public announcement of the date such meeting is first made. The Chairperson of the Jet.AI Board
may refuse to acknowledge the introduction of any stockholder proposal not made in compliance with the foregoing procedures.
Further,
the Proposed Bylaws, which will be effective upon the consummation of the Business Combination, provide notice procedures for stockholders
to nominate a person as a director to be considered by stockholders at a meeting. To be timely, a stockholder’s notice must be
received by the Secretary at the principal executive offices of Jet.AI in the case of an annual meeting, not later than the close of
business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary
of the preceding year’s annual meeting; provided, however, that in the event that no annual meeting was held during the preceding
year or the date of the annual meeting is advanced more than 30 days prior to or delayed by more than 60 days after the anniversary of
the preceding year’s annual meeting, notice by the stockholder to be timely must be so received no earlier than the close of business
on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th
day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting was first
made. The Chairperson of the Jet.AI Board may refuse to acknowledge the introduction of any stockholder nomination not made in compliance
with the foregoing procedures.
Under
Rule 14a-8 of the Exchange Act, a stockholder proposal to be included in the proxy statement and proxy card for the 2023 annual general
meeting pursuant to Rule 14a-8 must be received at our principal office a reasonable time before Jet.AI begins to print and send out
its proxy materials for such 2023 annual meeting (and Jet.AI will publicly disclose such date when it is known).
In
addition, if applicable, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director
nominees other than Jet.AI’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange
Act within the time periods described above.
SHAREHOLDER
COMMUNICATIONS
Shareholders
and interested parties may communicate with the Oxbridge Board, any committee chairperson or the non-management directors as a group
by writing to the Oxbridge Board or committee chairperson in care of Oxbridge Acquisition Corp., Suite 201, 42 Edward Street, George
Town, Grand Cayman, Cayman Islands, KY1-9006. Following the Business Combination, such communications should be sent in care of Jet.AI,
10845 Griffith Peak Drive, Suite 200, Las Vegas, NV 89135. Each communication will be forwarded, depending on the subject matter, to
the board of directors, the appropriate committee chairperson or all non-management directors.
ENFORCEABILITY
OF CIVIL LIABILITY
Oxbridge
is a Cayman Islands exempted company. If Oxbridge does not change its jurisdiction of incorporation from the Cayman Islands to Delaware
by effecting the Domestication, you may have difficulty serving legal process within the United States upon Oxbridge. You may also have
difficulty enforcing, both in and outside the United States, judgments you may obtain in U.S. courts against Oxbridge in any action,
including actions based upon the civil liability provisions of U.S. federal or state securities laws. Furthermore, there is doubt that
the courts of the Cayman Islands would enter judgments in original actions brought in those courts predicated on U.S. federal or state
securities laws. However, Oxbridge may be served with process in the United States with respect to actions against Oxbridge arising out
of or in connection with violation of U.S. federal securities laws relating to offers and sales of Oxbridge’s securities by serving
Oxbridge’s U.S. agent irrevocably appointed for that purpose.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
Oxbridge
files reports, proxy statements and other information with the SEC as required by the Exchange Act. You can read Oxbridge’s SEC
filings, including this proxy statement/prospectus, over the Internet at the SEC’s website at http://www.sec.gov.
If
you would like additional copies of this proxy statement/prospectus or if you have questions about the Business Combination or the Proposals
to be presented at the extraordinary general meeting, you should contact Oxbridge’s proxy solicitation agent at the following address
and telephone number:
[●]
If
you are an Oxbridge shareholder and would like to request documents, please do so by , 2023, in order to receive them before the extraordinary
general meeting. If you request any documents from Oxbridge, Oxbridge will mail them to you by first class mail, or another equally
prompt means.
All
information included in this proxy statement/prospectus relating to Oxbridge has been supplied by Oxbridge, and all such information
relating to Jet Token has been supplied by Jet Token. Information provided by either Oxbridge or Jet Token does not constitute any representation,
estimate or projection of any other party.
Neither
Oxbridge nor Jet Token has authorized anyone to give any information or make any representation about the Business Combination or their
companies that is different from, or in addition to, that included in this proxy statement/prospectus or in any of the materials that
have been incorporated in this proxy statement/prospectus. Therefore, if anyone does give you information of this sort, you should not
rely on it. If you are in a jurisdiction where offers to exchange or sell, or solicitations of offers to exchange or purchase, the securities
offered by this proxy statement/prospectus or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful
to direct these types of activities, then the offer presented in this proxy statement/prospectus does not extend to you. The information
included in this proxy statement/prospectus speaks only as of the date of this proxy statement/prospectus unless the information specifically
indicates that another date applies.
INDEX
TO FINANCIAL STATEMENTS
|
Page |
Financial
Statements of Oxbridge Acquisition Corp.
|
|
Report of Independent Registered Public Accounting Firm |
F-2 |
Balance Sheets as of December 31, 2022 and 2021 (as restated) |
F-3 |
Statement of Operations for the year ended December 31, 2022 and for the Period from April 12, 2021 (inception) through December 31, 2021 (as restated) |
F-4 |
Statement of Changes in Shareholders Deficit for the year ended December 31, 2022 and for the Period from April 12, 2021 (inception) through December 31, 2021 (as restated) |
F-5 |
Statement of Cash Flows for the year ended December 31, 2022 and for the Period from April 12, 2021 (inception) through December 31, 2021 (as restated) |
F-6 |
Notes to the Consolidated Financial Statements |
F-7 |
|
|
Consolidated
Financial Statements of Jet Token, Inc.
|
|
Report of Independent Registered Public Accounting Firm |
F-22 |
Consolidated Balance Sheets as of December 31, 2022 and 2021 |
F-23 |
Consolidated Statements of Operations for the years ended December 31, 2022 and 2021 |
F-24 |
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2022 and 2021 |
F-25 |
Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021 |
F-26 |
Notes to the Consolidated Financial Statements |
F-27 |
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Shareholders and Board of Directors of
Oxbridge
Acquisition Corp.
Opinion
on the Financial Statements
We
have audited the accompanying balance sheets of Oxbridge Acquisition Corp. (the “Company”) as of December 31, 2022
and 2021 (as restated), the related statements of operations, changes in shareholders’ deficit and cash flows for the year
ended December 31, 2022 and for the period from April 12, 2021 (inception) through December 31, 2021 (as restated), and the related notes
(collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all
material respects, the financial position of the Company as of December 31, 2022 and 2021 (as restated), and the results of its operations
and its cash for the year ended December 31, 2022 and the period from April 12, 2021 (inception) through December 31, 2021 (as restated),
in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2 to the financial statements, if the Company is unable to complete
a business combination by August 16, 2023, then the Company will cease all operations except for the purpose of liquidating. The
liquidity condition and the date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s
ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis
for Opinion
These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our
audits included performing procedures to assess the risks of material misstatement
of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating
the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provides a reasonable basis for our opinion.
/s/
HACKER JOHNSON & SMITH PA
Hacker
Johnson & Smith PA
We
have served as the Company’s auditor since 2021.
Tampa,
Florida
February
22, 2023
PCAOB ID #400
OXBRIDGE
ACQUISITION CORP.
Balance
Sheets
The
accompanying notes are an integral part of financial statements.
OXBRIDGE
ACQUISITION CORP.
Statements
of Operations
The
accompanying notes are an integral part of financial statements.
OXBRIDGE
ACQUISITION CORP.
STATEMENTS
OF CHANGES IN SHAREHOLDERS’ DEFICIT
YEAR ENDED DECEMBER 31, 2022 AND THE PERIOD FROM APRIL 12, 2021 (INCEPTION) THROUGH DECEMBER 31, 2021 (as restated)
The
accompanying notes are an integral part of financial statements.
OXBRIDGE
ACQUISITION CORP.
Statements
of Cash Flows
| |
| | |
Period from | |
| |
| | |
April 12, 2021 | |
| |
Year ended
December 31, 2022 | | |
(inception) through
December 31, 2021
| |
| |
| | |
(as restated) | |
| |
| | |
| |
Cash flows from Operating Activities: | |
| | | |
| | |
Net income (loss) | |
$ | 7,175,980 | | |
$ | (3,541,872 | ) |
Adjustments to reconcile net income to cash used in operating activities | |
| | | |
| | |
Change in fair value of warrant liabilities | |
| (6,699,398 | ) | |
| 3,456,800 | |
Income earned on marketable securities held in Trust Account | |
| (959,589 | ) | |
| - | |
Amortization and depreciation | |
| | | |
| | |
Amortization of lease financing costs | |
| | | |
| | |
Gain on loan forgiveness | |
| | | |
| | |
Stock-based compensation | |
| | | |
| | |
Non-cash operating lease costs | |
| | | |
| | |
| |
| | | |
| | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Accrued interest receivable | |
| - | | |
| (81 | ) |
Prepaid expenses and other receivables | |
| (3,512 | ) | |
| - | |
Due to affiliates | |
| 3,861 | | |
| 45,833 | |
Accrued expenses | |
| 79,981 | | |
| 18,000 | |
Accounts receivable | |
| | | |
| | |
Other current assets | |
| | | |
| | |
Accounts payable | |
| | | |
| | |
Accrued liabilities | |
| | | |
| | |
Deferred revenue | |
| | | |
| | |
Lease liability | |
| | | |
| | |
Net cash used in operating activities | |
$ | (402,677 | ) | |
$ | (21,320 | ) |
| |
| | | |
| | |
Cash flows from Investing Activities: | |
| | | |
| | |
Proceeds from liquidation of marketable securities held in Trust Account | |
| 105,424,960 | | |
| - | |
Investment in Trust Account | |
| (575,000 | ) | |
| (116,725,000 | ) |
Purchase of property and equipment | |
| | | |
| | |
Purchase of intangible assets | |
| | | |
| | |
Return of aircraft deposit | |
| | | |
| | |
Deposits and other assets | |
| | | |
| | |
Net cash provided by (used in) investing activities | |
$ | 104,849,960 | | |
$ | (116,725,000 | ) |
| |
| | | |
| | |
Cash flows from Financing Activities: | |
| | | |
| | |
Redemption of 10,313,048 Class A Ordinary Shares | |
| (105,424,960 | ) | |
| - | |
Proceeds - related party advances | |
| | | |
| | |
Repayments - related party advances | |
| | | |
| | |
Proceeds from issuance of promissory note | |
| 575,000 | | |
| - | |
Proceeds from issuance of Class B ordinary shares | |
| - | | |
| 25,000 | |
Proceeds from issuance of private placement warrants | |
| - | | |
| 5,760,000 | |
Proceeds from issuance of units (net of offering costs) | |
| - | | |
| 111,575,715 | |
Payments on line of credit | |
| | | |
| | |
Offering costs | |
| | | |
| | |
Payment of lease financing costs | |
| | | |
| | |
Preferred share redemption | |
| | | |
| | |
Proceeds from sale of Non-Voting Common Stock | |
| | | |
| | |
Net cash (used in) provided by financing activities | |
$ | (104,849,960 | ) | |
$ | 117,360,715 | |
| |
| | | |
| | |
Net Change in Cash | |
| (402,677 | ) | |
| 614,395 | |
Cash – Beginning of period | |
| 614,395 | | |
| - | |
Cash – Ending of period | |
$ | 211,718 | | |
$ | 614,395 | |
| |
| | | |
| | |
Supplemental disclosure of non-cashflow information | |
| | | |
| | |
Cash paid for interest | |
| | | |
| | |
Cash paid for income taxes | |
| | | |
| | |
Non cash investing and financing activities: | |
| | | |
| | |
Deferred underwriting commissions in connection with the initial public offering | |
$ | - | | |
$ | 4,025,000 | |
Derivative
warrant liabilities issued in connection with the initial public offering
| |
$ | - | | |
$ | 3,612,500 | |
Accretion for Class A ordinary shares to redemption amount | |
$ | 1,534,589 | | |
$ | 15,497,662 | |
Subscription receivable from sale of Non-Voting Common Stock | |
| | | |
| | |
Line of credit issued for offering expenses paid on behalf
of the Company | |
| | | |
| | |
Application of equipment deposit to aircraft maintenance reserve account | |
| | | |
| | |
Operating lease, Right-of-use assets and liabilities | |
| | | |
| | |
The
accompanying notes are an integral part of financial statements.
OXBRIDGE
ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note
1—Description of Organization and Business Operations
Oxbridge
Acquisition Corp. (the “Company”) was incorporated as a Cayman Islands exempted company on April 12, 2021. The Company was
incorporated for the purpose of effecting a merger, capital stock or share exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses (the “Business Combination”). The Company is an emerging growth
company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
As
of December 31, 2022, the Company had not commenced any operations. All activity for the period from April 12, 2021 (inception) through
December 31, 2022 relates to the Company’s formation and the initial public offering (the “Initial Public Offering”
or “IPO”) described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination.
The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest.
The Company may generate non-operating income in the form of interest income on marketable securities from the proceeds derived from
the Initial Public Offering (as defined below). The Company has selected December 31 as its fiscal year end.
The
Company’s sponsor is OAC Sponsor Ltd., a Cayman Islands exempted company (the “Sponsor”). The registration statement
for the Company’s Initial Public Offering was declared effective on August 11, 2021. On August 16, 2021, the Company consummated
its IPO of 10,000,000 units (each, a “Unit” and collectively, the “Units” and, with respect to the Class A ordinary
shares included in the Units, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $100,000,000 and incurring
offering costs of approximately $6,624,000, inclusive of $3,500,000 in deferred underwriting commissions. The underwriter exercised the
over-allotment option in full and on August 16, 2021, purchased an additional 1,500,000 units (the “Over-Allotment Units”),
generating additional gross proceeds of $15,000,000 (the “Over-Allotment”), and incurring additional offering costs of $825,000,
inclusive of $525,000 of deferred underwriting commissions (Note 5).
Simultaneously
with the closing of the IPO, the Company consummated the sale of 5,760,000
warrants to the Sponsor and Maxim Group,
LLC (“Maxim”), the underwriter in our Initial Public Offering (the “Private Placement Warrants”), at a price
of $1.00
per Private Placement Warrant, generating gross
proceeds of $5,760,000,
which is discussed in Note 4. Each Private Placement Warrant is exercisable to purchase one Class A ordinary share at $11.50
per share.
Upon
the closing of the Initial Public Offering, the Over-Allotment and the Private Placement, $116,725,000 ($10.15 per Unit) of the net proceeds
of the Initial Public Offering and certain proceeds of the Private Placement was placed in a trust account (“Trust Account”),
located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and may be invested only in U.S.
government securities within the meaning of Section 2(a)(16) of the Investment Company Act with a maturity of 185 days or less or in
money market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company
Act, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully.
The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net
assets held in the Trust Account (as defined below) (excluding the amount of deferred underwriting commissions and taxes payable on the
interest earned on the Trust Account) at the time of the signing of the agreement to enter into the initial Business Combination. However,
the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding
voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”).
OXBRIDGE
ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note
1—Description of Organization and Business Operations (continued)
The
Company will provide the holders (the “Public Shareholders”) of its Public Shares, with the opportunity to redeem all or
a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting
called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek
shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The
Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account
(anticipated to be approximately $11.07
per Public Share). The per-share amount to be distributed to Public Shareholders who redeem their Public Shares will not be reduced
by the deferred underwriting commissions the Company will pay to the underwriter. These Public Shares have been classified as
temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards
Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities
from Equity.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at
least $5,000,001
and the approval of an ordinary resolution, being the affirmative vote of a majority of the ordinary shares represented in person or
by proxy and entitled to vote thereon and who vote at a general meeting in favor of the business combination. If a shareholder vote
is not required by law and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company
will, pursuant to its Amended and Restated Memorandum and Articles of Association, as amended (the “Amended and Restated Memorandum
and Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange
Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however,
shareholder approval of the transactions is required by law, or the Company decides to obtain shareholder approval for business or
legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not
pursuant to the tender offer rules. Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective of
whether they vote for or against the proposed transaction. If the Company seeks shareholder approval in connection with a Business
Combination, the Initial Shareholder (as defined below) have agreed to vote their Founder Shares (as defined below in Note 4) and
any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In addition, the Initial
Shareholder have agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with
the completion of a Business Combination.
Notwithstanding
the foregoing, the Amended and Restated Memorandum and Articles of Association provides that a Public Shareholder, together with any
affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined
under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), will be restricted from redeeming
its shares with respect to more than an aggregate of 15% or more of the Class A ordinary shares sold in the Initial Public Offering,
without the prior consent of the Company.
The
Company’s Sponsor (the “Initial Shareholder”) officers and directors have agreed not to propose an amendment to Amended
and Restated Memorandum and Articles of Association (A) that would modify the substance or timing of the Company’s obligation to
allow redemption in connection with our initial business combination or to redeem 100% of its Public Shares if the Company does not complete
a Business Combination by August 16, 2023, as described in more detail in the prospectus for the IPO) (the “Combination Period”)
or (B) with respect to any other provision relating to shareholders’ rights or pre-initial Business Combination activity, unless
the Company provides the Public Shareholders with the opportunity to redeem their Class A ordinary shares in conjunction with any such
amendment.
OXBRIDGE
ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note
1—Description of Organization and Business Operations (continued)
If
the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except
for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public
Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
(which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then
issued and outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders (including
the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of the remaining shareholders and the board of directors, liquidate and dissolve, subject in each case to the
Company’s obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements
of applicable law.
The
Initial Shareholder, officers and directors have agreed to waive their liquidation rights with respect to the Founder Shares if the Company
fails to complete a Business Combination within the Combination Period. However, if the Initial Shareholder or members of the Company’s
management team acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from
the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period.
Maxim has agreed to waive their rights to its deferred underwriting commission held in the Trust Account in the event the Company does
not complete a Business Combination within in the Combination Period and, in such event, such amounts will be included with the other
funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution,
it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets)
will be approximately $11.07 per share initially held in the Trust Account. In order to protect the amounts held in the Trust Account,
the Sponsor has agreed to be liable to the Company if and to the extent any claims by a vendor (other than the Company’s independent
registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which
the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account. This liability will
not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or
to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriter of the Initial Public
Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”).
Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible
to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have
to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except for the Company’s
independent registered public accounting firm), prospective target businesses or other entities with which the Company does business,
execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Liquidity
and Capital Resources
As
of December 31, 2022 the Company had cash of approximately $212,000
and a working capital of approximately $110,000
to satisfy the Company’s liquidity needs. In addition, in order to finance transaction costs in connection with a Business
Combination, the Company’s Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors
may, but are not obligated to, provide the Company Working Capital Loans (see Note 4). As of December 31, 2022 and 2021, there were no
amounts outstanding under any Working Capital Loans.
OXBRIDGE
ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note
2—Summary of Significant Accounting Policies
Basis
of Presentation
The
accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States
of America (“GAAP”) for financial information and in accordance with the instructions to Form 10-K and Article 8 of Regulation
S-X of the SEC.
Going Concern
In connection with the Company’s assessment
of going concern considerations in accordance GAAP, management has determined that if the Company is unable to raise additional funds
to alleviate liquidity needs as well as complete a Business Combination by August 16, 2023, then the Company will cease all operations
except for the purpose of liquidating. The liquidity condition and date for mandatory liquidation and subsequent dissolution raise substantial
doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets
or liabilities should the Company be required to liquidate after August 16, 2023.
Management’s plans to address this need for
capital through potential loans from certain of our affiliates. However, our affiliates are not obligated to make loans to us in the future,
and we may not be able to raise additional financing from unaffiliated parties necessary to fund our expenses.
Emerging
Growth Company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations
regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding
advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further,
Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from
being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had
a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are
required to comply with the new or revised financial accounting standards.
The
JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out
of such extended transition period, which means that when a standard is issued or revised and it has different application dates for
public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies
adopt the new or revised standard.
This
may make comparison of the Company’s financial statement with another public company that is neither an emerging growth company
nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential
differences in accounting standards used.
OXBRIDGE
ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note
2—Summary of Significant Accounting Policies (continued)
Use
of Estimates
The
preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement
and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgement.
It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at
the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one
or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
A material estimate that is particularly susceptible to significant change in the near-term relates to the fair value of the
derivative warrant liabilities. Although considerable variability is likely to be inherent in this estimate, management believes
that the amounts provided are reasonable. This estimate is continually reviewed and adjusted if necessary. Such adjustment is
reflected in current operations.
Cash
and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
As of December 31, 2022, the Company had approximately $212,000 of cash and cash equivalents.
Marketable
Securities Held in Trust Account
At
December 31, 2022, substantially all of the assets held in the Trust Account were held in money market funds which are invested primarily
in U.S. Treasury securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading
securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting
from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust
Account in the accompanying statements of operations. The estimated fair values of investments held in Trust Account are determined
using available market information.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
which, at times, may exceed the Federal Depository Insurance Company coverage of $250,000. The Company has not experienced losses on
these accounts and management believes the Company is not exposed to significant risks on such accounts.
Financial
Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair
Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet due to their short-term
nature.
Fair
Value Measurements
Fair
value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction
between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
|
● |
Level 1, defined as observable
inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
|
● |
Level 2, defined as inputs
other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments
in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
|
● |
Level 3, defined as unobservable
inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations
derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable |
OXBRIDGE
ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note
2—Summary of Significant Accounting Policies (continued)
In
some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In
those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input
that is significant to the fair value measurement.
Derivative
financial instruments
The
Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates
all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain
features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815, “Derivatives and Hedging” (“ASC 815”).
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, will
be re-assessed at the end of each reporting period. Derivative warrant liabilities will be classified as non-current liabilities as their
liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
The
17,260,000 warrants issued on August 16, 2021 in connection with the IPO and the Private Placement (including the 11,500,000 warrants
included in the Units and the 5,760,000 Private Placement Warrants) are recognized as derivative liabilities in accordance with ASC 815.
The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized
in the Company’s statement of operations. The fair value of the Public Warrants issued in connection with the Public Offering were
initially measured at fair value using a Black-Scholes option pricing model and subsequently, the fair value of Public Warrants
issued in connection with the Initial Public Offering have been measured based on the listed market price of such warrants beginning
from December 31, 2021, and through to December 31, 2022. The fair value of the Private Warrants has been estimated initially and subsequently,
as of December 31, 2022, using a version of the Black-Scholes option pricing model. The determination of the fair value of the warrant liabilities
may be subject to change as more current information becomes available and accordingly the actual results could differ significantly.
Class
A Ordinary Shares Subject to Possible Redemption
As
of December 31, 2022, there were 1,301,952 Class A ordinary shares issued or outstanding. The Company accounts for its Class A ordinary
shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic
480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption are classified as a liability
instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption
rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within
the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’
equity. The Company’s ordinary shares features certain redemption rights that are considered to be outside of the Company’s
control and be subject to occurrence of uncertain future events. Accordingly, at December 31, 2022, 1,186,952 Class A ordinary shares
subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section
of the Company’s balance sheets.
Earnings
(Loss) Per Ordinary Share
The
Company complies with accounting and disclosure requirements of FASB ASC 260, “Earnings Per Share”. Earnings (Loss) per
ordinary share is computed by dividing earnings (loss) by the weighted average number of ordinary shares outstanding during the
period.
The Company has two classes
of ordinary shares, Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes
of shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of shares share
pro rata in the income/loss of the Company. Accretion associated with the redeemable Class A ordinary shares is excluded from
earnings per share as the redemption value approximates fair value.
At
December 31, 2022, the Company did not have any dilutive securities and other contracts that could, potentially, be
exercised or converted into ordinary shares and then share in the earnings of the Company due to the exercise price exceeding the
average market price of the Company’s ordinary share during the year ended December 31, 2022. As a result, diluted earnings
per share is the same as basic earnings per share for the year ended December 31, 2022.
At
December 31, 2021, due to net loss the Company did not have any dilutive securities and other contracts that could, potentially, be
exercised or converted into ordinary shares and then share in the loss of the Company. As a result, diluted loss per share is the
same as basic loss per share for the period ended December 31, 2021.
The
following table reflects the calculation of basic and diluted net earnings (loss) per share (in dollars, except per share
amounts):
Schedule of Basic and Diluted Net Loss Per
Share
| |
| | | |
| | | |
| | | |
| | |
| |
For
the Year Ended December
31, 2022 | | |
For
the Period from April
12, 2021 (Inception) Through December
31, 2021
(as restated)
| |
| |
Class
A | | |
Class
B | | |
Class
A | | |
Class
B | |
Basic
and diluted earnings (loss) per ordinary share | |
| | | |
| | | |
| | | |
| | |
Numerator: | |
| | | |
| | | |
| | | |
| | |
Allocation
of net earnings (loss) | |
$ | 5,605,148 | | |
$ | 1,570,832 | | |
$ | (2,839,120 | ) | |
$ | (702,753 | ) |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Basic
and diluted weighted average shares outstanding | |
| 10,258,764 | | |
| 2,875,000 | | |
| 11,615,000 | | |
| 2,875,000 | |
Basic
and diluted net earnings (loss) per ordinary share | |
$ | 0.546 | | |
$ | 0.546 | | |
$ | (0.244 | ) | |
$ | (0.244 | ) |
OXBRIDGE
ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note
2—Summary of Significant Accounting Policies (continued)
Income
Taxes
The
Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred
tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial
statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period
that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected
to be realized.
ASC
Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax
positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than
not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the
Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as
income tax expense. As of December 31, 2022 and 2021, there were no unrecognized tax benefits and no amounts accrued for interest and
penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material
deviation from its position. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially
change over the next twelve months.
The
Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently
not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s
tax provision was zero for the period presented.
Recent
Accounting Pronouncements
Management
does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect
on the Company’s financial statements.
Reclassifications
Any
reclassifications of prior year amounts have been made to conform to the current period presentation.
OXBRIDGE
ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note
3—Initial Public Offering
On
August 16, 2021, the Company consummated its IPO of 10,000,000 Units at $10.00 per Unit, generating gross proceeds of $100,000,000 and
incurring offering costs of approximately $6,624,000, inclusive of approximately $3,500,000 in deferred underwriting commissions. The
underwriter was granted a 45-day option from the date of the final prospectus relating to the Initial Public Offering to purchase up
to 1,500,000 additional Units to cover over-allotments, if any, at $10.00 per Unit. On August 16, 2021, Maxim exercised the over-allotment
option in full and, purchased an additional 1,500,000 Over-Allotment Units, generating additional gross proceeds of $15,000,000, and
incurring additional offering costs of $825,000, inclusive of approximately $525,000 of deferred underwriting commissions.
Each
Unit consists of one Class A ordinary share, and one redeemable warrant (each, a “Public Warrant”). Each Public Warrant entitles
the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 6).
Note
4—Related Party Transactions
Founder
Shares
On
April 12, 2021, the Sponsor paid $, or approximately $ per share, to cover certain expenses on behalf of the Company in exchange
for issuance of Class B ordinary shares, par value $ (the “Founder Shares”). The Founder Shares will automatically
convert into shares of Class A ordinary shares at the time of the Company’s initial Business Combination and are subject to certain
transfer restrictions, as described in Note 6.
The
Initial Shareholder have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the
earlier to occur of: (i) one year after the completion of the initial Business Combination or (ii) the date following the completion
of the initial Business Combination on which the Company completes a liquidation, merger, share exchange or other similar transaction
that results in all of the shareholders having the right to exchange their ordinary shares for cash, securities or other property. Notwithstanding
the foregoing, if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions,
share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing
at least 120 days after the initial Business Combination, the Founder Shares will be released from the lockup.
Private
Placement Warrants
Simultaneously
with the closing of the IPO, the Company consummated the Private Placement of an 5,760,000 Private Placement Warrants to the Sponsor
and Maxim at an average purchase price of $1.00 per Private Placement Warrant, generating gross proceeds to the Company of $5,760,000.
The Private Placement Warrants are identical to the Public Warrants sold as part of the Units in the IPO, except that the Sponsor and
Maxim have agreed not to transfer, assign or sell any of the Private Placement Warrants (except to certain permitted transferees) until
30 days after the completion of the Company’s initial Business Combination. The Private Placement Warrants are also not redeemable
by the Company so long as they are held by the Sponsor and Maxim or their respective permitted transferees.
Certain
proceeds from the Private Placement Warrants were added to the proceeds from the IPO to be held in the Trust Account. If the Company
does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private
Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted
transferees.
OXBRIDGE
ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note
4—Related Party Transactions (continued)
Related
Party Loans
On
April 19, 2021, the Sponsor agreed to loan the Company an aggregate of up to $ to cover for expenses related to the IPO pursuant
to a promissory note (the “Note”). This loan was non-interest bearing and was payable upon the earlier of September 30, 2021
or the completion of the IPO. The loan amounted to $ and was repaid upon the closing of the IPO out of offering proceeds not held
in the Trust Account.
Working
Capital Loans
In
addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor,
other Initial Shareholder, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds
as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the
Working Capital Loans. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside
the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital
Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements
exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without
interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into private placement
warrants at a price of $1.00 per warrant. As of December 31, 2022, the Company did not have any outstanding borrowings under the Working
Capital Loans.
Administrative
Services Agreement
Commencing
on the effective date of the Company’s IPO, the Company agreed to pay its Sponsor a total of up to $10,000 per month, for office
space, utilities, secretarial and administrative support. Upon completion of the initial Business Combination or the Company’s
liquidation, the Company will cease paying these monthly fees. For the year ended December 31, 2022, and for the period ending December
31, 2021, the Company recorded expenses of $100,000 and $50,000, respectively, to the Sponsor under the Administrative Services Agreement.
Extension
Amendment Proposal and Promissory Note
On
November 9, 2022, the Company held an extraordinary general meeting (the “EGM”) of shareholders. At the EGM, the
Company’s shareholders were presented the proposals to extend the date by which the Company must consummate a business
combination (the “Termination Date”) from November 16, 2022 to August 16, 2023 (or such earlier date as determined by
the Board of Directors) by amending the Company’s Amended and Restated Memorandum and Articles of Association (the “Extension
Amendment Proposal”). The Extension Amendment Proposal to amend the Company’s Amended and Restated Memorandum and
Articles of Association (“Charter Amendment”) was approved. The Company filed the Charter Amendment with the Cayman
Islands Registrar of Companies on November 11, 2022.
In
connection with the vote to approve the Extension Amendment Proposal, the holders of 10,313,048 Class A ordinary shares properly exercised
their right to redeem their shares for cash at a redemption price of approximately $10.22 per share, for an aggregate redemption amount
of $105,424,960 in connection with the Extension Amendment Proposal.
The
sponsor has agreed to contribute to us a loan of $575,000 (the “Extension Loan”), to be deposited into the trust account
to extend the Termination Date from November 16, 2022 to August 16, 2023. On November 14, 2022, the Company issued a promissory note
(the “Extension Note”) in the aggregate principal amount of $575,000 to the sponsor, in connection with the Extension Loan.
The Extension Loan will be deposited into the trust account on or around November 15, 2022.
The
Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of an initial
business combination, or (b) the date of the liquidation of the Company.
Note
5—Commitments and Contingencies
Registration
Rights
The
holders of Founder Shares, Private Placement Warrants, and securities that may be issued upon conversion of Working Capital Loans, if
any, are entitled to registration rights pursuant to a registration and shareholder rights agreement. The holders of these securities
are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, these
holders will have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the
completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such
registration statements.
OXBRIDGE
ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note
5—Commitments and Contingencies (continued)
Underwriting
Agreement
The
Company granted the underwriters a 45-day option from the final prospectus relating to the IPO to purchase up to 1,500,000 additional
Units to cover over-allotments, if any, at the IPO price less the underwriting discounts and commissions. On August 16, 2021, the underwriters
fully exercised their over-allotment option.
The
underwriters were entitled to an underwriting discount of $0.20 per Unit, or $2.0 million in the aggregate (or $2.3 million in the aggregate
if the underwriters’ over-allotment option is exercised in full), payable upon the closing of the IPO. In addition, $0.35 per unit,
or approximately $3.5 million in the aggregate (or approximately $4.03 million in the aggregate if the underwriters’ over-allotment
option was exercised in full) was payable to the underwriters for deferred underwriting commissions. The deferred fee will become payable
to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination,
subject to the terms of the underwriting agreement.
Risks
and Uncertainties
In
February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action,
various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. The impact
of this action and related sanctions on the world economy are not determinable as of the date of this Annual Report on Form 10-K and the specific impact
on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of this Annual
Report on Form 10-K.
Note
6 – Derivative Warrant Liabilities
As
of December 31, 2022, the Company had 11,500,000 Public Warrants and 5,760,000 Private Placement Warrants, outstanding.
The
Public Warrants will become exercisable on the later of (a) 30 days after the consummation of a Business Combination or (b) 12 months
from the closing of the IPO. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon
redemption or liquidation.
The
Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation
to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A
ordinary shares issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject
to the Company satisfying its obligations with respect to registration. No Public Warrant will be exercisable for cash or on a cashless
basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their Public Warrants, unless the issuance
of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption
from registration is available.
The
Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business Combination,
it will use its best efforts to file with the SEC a registration statement registering the issuance, under the Securities Act, of the
Class A ordinary shares issuable upon exercise of the Public Warrants. The Company will use its best efforts to file with the SEC a registration
statement covering the shares of Class A ordinary shares issuable upon exercise of the warrants, to cause such registration statement
to become effective and to maintain a current prospectus relating to those shares of Class A ordinary shares until the warrants expire
or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of Class A ordinary shares issuable
upon exercise of the warrants is not effective by the 60th business day after the closing of a Business Combination, warrant
holders may, until such time as there is an effective registration statement and during any period when the Company will have failed
to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9)
of the Securities Act or another exemption
OXBRIDGE
ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note
6 – Derivative Warrant Liabilities (continued)
Redemption
of Warrants for Cash When the Price per Class A Ordinary Share Equals or Exceeds $18.00
Once
the Public Warrants become exercisable, the Company may call the Public Warrants for redemption
|
● |
in
whole and not in part; |
|
|
|
|
● |
at
a price of $0.01 per Public Warrant; |
|
|
|
|
● |
upon
not less than 30 days’ prior written notice of redemption to each warrant holder and |
|
|
|
|
● |
if,
and only if, the reported last sale price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share
sub-divisions, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day
period ending three business days before the Company sends the notice of redemption to the warrant holders (the “Reference
Value”). |
If
and when the Public Warrants become redeemable by the Company, the Company may not exercise its redemption right if the issuance of shares
of ordinary shares upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws
or the Company is unable to effect such registration or qualification.
The
exercise price and number of shares of Class A ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances
including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. Additionally, in no event will
the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the
Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds
with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account
with the respect to such warrants. Accordingly, the warrants may expire worthless.
If
the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the
Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of common
shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend,
extraordinary dividend or recapitalization, reorganization, merger or consolidation.
In
addition, if (x) the Company issues additional shares of Class A ordinary shares or equity-linked securities for capital raising purposes
in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per
Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of
directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held
by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross
proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of
the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions),
and (z) the volume weighted average trading price of the Company’s ordinary shares during the 20 trading day period starting on
the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”)
is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher
of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger price described above will be adjusted (to
the nearest cent) to be equal to 180% of the greater of the Market Value and the Newly Issued Price.
OXBRIDGE
ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note
6 – Derivative Warrant Liabilities (continued)
The
Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the IPO, except that the Private Placement
Warrants and the ordinary shares issuable upon exercise of the Private Placement Warrants, so long as they are held by the Initial Shareholders
or their permitted transferees, (i) will not be redeemable by the Company, (ii) may not (including the Class A ordinary shares issuable
upon exercise of these warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days
after the completion of the initial Business Combination, (iii) may be exercised by the holders on a cashless basis and (iv) will be
entitled to registration rights. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees,
the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.
The
Company has accounted for the 17,260,000 warrants issued in connection with the IPO (including 11,500,000 Public Warrants and 5,760,000
Private Placement Warrants) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants
do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, the Company has
classified each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With
each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s
statement of operations. For the year ended December 31, 2022 and the period from April 12, 2021 (inception) to December 31, 2021, the
Company recognized a gain (loss) on revaluation of approximately $6.7 million and ($3.5 million), respectively.
The
warrant agreement contains an Alternative Issuance provision that if less than 70% of the consideration receivable by the holders of
the Class A common stock in the Business Combination is payable in the form of common equity in the successor entity, and if the holders
of the warrants properly exercise the warrants within thirty days following the public disclosure of the consummation of Business Combination
by the Company, the warrant price shall be reduced by an amount equal to the difference (but in no event less than zero) of (i) the warrant
price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined below) minus (B) the Black-Scholes Warrant
Value (as defined below). The “Black-Scholes Warrant Value” means the value of a Warrant immediately prior to the consummation
of the Business Combination based on the Black-Scholes Warrant Model for a Capped American Call on Bloomberg Financial Markets. “Per
Share Consideration” means (i) if the consideration paid to holders of the common stock consists exclusively of cash, the amount
of such cash per common stock, and (ii) in all other cases, the volume weighted average price of the common stock as reported during
the ten-trading day period ending on the trading day prior to the effective date of the Business Combination.
The
Company believes that the adjustments to the exercise price of the warrants is based on a variable that is not an input to the fair value
of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 – 40, and thus the warrants are not eligible
for an exception from derivative accounting. The accounting treatment of derivative financial instruments requires that the Company record
a derivative liability upon the closing of the IPO. Accordingly, the Company classifies each warrant as a liability at its fair value
and the warrants will be allocated a portion of the proceeds from the issuance of the Units equal to its fair value determined using
Black-Scholes option pricing model. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement,
the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.
The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the
period, the warrants will be reclassified as of the date of the event that causes the reclassification.
OXBRIDGE
ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note
7 - Fair Value Measurements
The
following table presents information about the Company’s financial liabilities that are measured at fair value on a recurring basis
as of the initial issuance date, December 31, 2022 and 2021, by level within the fair value hierarchy:
Schedule
of Fair Value Liabilities Measured on Recurring Basis
| |
Fair Value Measurements Using | | |
| |
At December 31, 2022 | |
(Level 1) | | |
(Level 2) | | |
(Level 3) | | |
Total | |
Description | |
| | | |
| | | |
| | | |
| | |
Liabilities: | |
| | | |
| | | |
| | | |
| | |
Warrant liabilities - public warrants | |
$ | 368,000 | | |
$ | - | | |
$ | - | | |
$ | 368,000 | |
Warrant liabilities - private warrants | |
| - | | |
| - | | |
| 1,902 | | |
| 1,902 | |
Total | |
$ | 368,000 | | |
$ | - | | |
$ | 1,902 | | |
$ | 369,902 | |
| |
Fair Value Measurements Using | | |
| |
At December 31, 2021 | |
(Level 1) | | |
(Level 2) | | |
(Level 3) | | |
Total | |
Description | |
| | | |
| | | |
| | | |
| | |
Liabilities: | |
| | | |
| | | |
| | | |
| | |
Warrant liabilities - public warrants | |
$ | 4,655,200 | | |
$ | - | | |
$ | - | | |
$ | 4,655,200 | |
Warrant liabilities - private warrants | |
| - | | |
| - | | |
| 2,414,100 | | |
| 2,414,100 | |
Total | |
$ | 4,655,200 | | |
$ | - | | |
$ | 2,414,100 | | |
$ | 7,069,300 | |
The
Public Warrants issued in connection with the Public Offering and the Private Placement Warrants were initially and subsequently measured
at fair value using a Black-Scholes option pricing model. The subsequent measurement of the Public Warrants as of December 31,
2022, and December 31, 2021, are classified as Level 1 due to the use of an observable market quote in an active market.
The
Company utilizes a Black-Scholes model to value the Private Placement Warrants at each reporting period, with changes in fair
value recognized in the statement of earnings. The estimated fair value of the Private Placement Warrant liability is determined using
Level 3 inputs. Inherent in the Black-Scholes option pricing model are assumptions related to expected stock-price volatility,
expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its warrants based on historical volatility
of its stock price. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for
a maturity similar to the expected remaining life of the warrants. The Company used the modified extension date deadline of August 16,
2023, to determine the estimated life of the warrants. The dividend rate is based on the historical rate, which the Company anticipates
remaining at zero.
There
were no transfers between Levels 1, 2 or 3 during the year ended December 31, 2022. There were no transfers between Levels 1, 2 or 3
during the period from April 12, 2021 (inception) through December 31, 2021, other than the transfer of public warrants liabilities from
Level 3 to Level 1.
The
following table provides quantitative information regarding Level 3 fair value measurements inputs for private placement warrants at
their measurement dates:
Schedule
of Fair Value Measurements
| |
At December 31, 2022 | | |
At December 31, 2021 | |
| |
| | |
| |
Share price | |
$ | 10.45 | | |
$ | 9.90 | |
Exercise price | |
$ | 11.5 | | |
$ | 11.5 | |
Expected dividend yield | |
| 0 | % | |
| 0 | % |
Expected volatility | |
| 2.97 | % | |
| 24.00 | % |
Risk-free interest rate | |
| 4.85 | % | |
| 0.54 | % |
Expected life (in years) | |
| 0.67 | | |
| 0.98 | |
OXBRIDGE
ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note
7 - Fair Value Measurements (continued)
The
following table provides a reconciliation of changes in fair value of the beginning and ending balances for the liabilities classified
as Level 3:
Schedule
of Fair Value Warrant Liabilities
| |
Private
Placement
Warrants | | |
Public
Warrants | | |
Warrant
Liabilities | |
| |
| | |
| | |
| |
Fair value of Level 3 warrants at January 1, 2022 | |
$ | 2,414,100 | | |
$ | - | | |
$ | 2,414,100 | |
Change in valuation inputs or other assumptions | |
| (2,412,198 | ) | |
| - | | |
| (2,412,198 | ) |
Fair value of Level 3 warrants at December 31, 2022 | |
$ | 1,902 | | |
$ | - | | |
$ | 1,902 | |
The
following table presents the changes in the fair value of warrant liabilities:
Schedule
of Fair Value Warrant Liabilities
| |
Private
Placement
Warrants | | |
Public
Warrants | | |
Total
Warrant
Liabilities | |
| |
| | |
| | |
| |
Fair value as of January 1, 2022 | |
$ | 2,414,100 | | |
$ | 4,655,200 | | |
$ | 7,069,300 | |
Change in valuation inputs or other assumptions | |
| (2,412,198 | ) | |
| (4,287,200 | ) | |
| (6,699,398 | ) |
Fair value as of December 31, 2022 | |
$ | 1,902 | | |
$ | 368,000 | | |
$ | 369,902 | |
Note
8—Shareholders’ Deficit
Preference
Shares—The Company is authorized to issue 4,000,000
preference shares with a par value of $0.0001
per share, with such designations, voting and other rights and preferences as may be determined from time to time by the
Company’s board of directors. As of December 31, 2022 and 2021, there were no
preference shares issued or outstanding.
Class
A Ordinary Shares—The Company is authorized to issue 400,000,000
Class A ordinary shares with a par value of $0.0001
per share. Holders of the Company’s Class A ordinary shares are entitled to one vote for each share. As of December 31, 2022
and 2021, there were 1,301,952
and 11,615,000, respectively, Class A ordinary shares outstanding, of which 1,186,952
and 11,500,000, respectively, has been classified as temporary equity due to its redeemable nature.
Class
B Ordinary Shares—The Company is authorized to issue 40,000,000 Class B ordinary shares with a par value of $0.0001 per
share. Holders are entitled to one vote for each Class B ordinary share. At December 31, 2022, there were 2,875,000 Class B ordinary
shares issued and outstanding. Holders of the Class A ordinary shares and holders of the Class B ordinary shares will vote together as
a single class on all matters submitted to a vote of the Company’s shareholders, except as required by applicable law or stock
exchange rule; provided that only holders of the Class B ordinary shares have the right to vote on the appointment of the Company’s
directors prior to the initial Business Combination.
OXBRIDGE
ACQUISITION CORP.
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2022
Note
8—Shareholders’ Deficit (continued)
The
Class B ordinary shares will automatically convert into Class A ordinary shares at the time of the initial Business Combination on a
one-for-one basis (as adjusted). In the case that additional Class A ordinary shares or equity-linked securities are issued or deemed
issued in connection with the initial Business Combination, the number of Class A ordinary shares issuable upon conversion of all Founder
Shares will equal, in the aggregate, 20% of the total number of Class A ordinary shares outstanding after such conversion (after giving
effect to any redemptions of Class A ordinary shares by Public Shareholders), including the total number of Class A ordinary shares issued,
or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company
in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked
securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the initial Business
Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans;
provided that such conversion of Founder Shares will never occur on a less than one-for-one basis.
Note
9—Subsequent Events
The
Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements
were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure
in the financial statements.
Report
of Independent Registered Public Accounting Firm
To
the shareholders and the board of directors of Jet Token, Inc.
Opinion
on the Financial Statements
We
have audited the accompanying balance sheets of Jet Token, Inc. (the “Company”) as of December 31, 2022 and 2021, the related
statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively
referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the
years then ended, in conformity with accounting principles generally accepted in the United States.
Basis
for Opinion
These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s
financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our
audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or
fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides
a reasonable basis for our opinion.
/s/
BF Borgers CPA
BF
Borgers CPA PC (PCAOB ID 5041)
We
have served as the Company’s auditor since 2019 Lakewood, CO
February
23, 2023
JET
TOKEN, INC.
CONSOLIDATED
BALANCE SHEETS
FOR
THE YEARS ENDED DECEMBER 31, 2022 AND 2021
See accompanying notes to the consolidated financial statements
JET
TOKEN, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR
THE YEARS ENDED DECEMBER 31, 2022 AND 2021
See
accompanying accountants’ review report and notes to financial statements
JET
TOKEN, INC.
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR
THE YEARS ENDED DECEMBER 31, 2022 AND 2021
See accompanying notes to the consolidated financial statements
JET
TOKEN, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
FOR
THE YEARS ENDED DECEMBER 31, 2022 AND 2021
See accompanying notes to the consolidated financial statements
JET
TOKEN, INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE
1 – ORGANIZATION AND NATURE OF OPERATIONS
Description of Organization and Business Operations
Jet
Token Inc. was formed on June 4, 2018 (“Inception”) in the State of Delaware. The consolidated financial statements of Jet
Token Inc. (the “Company” or “Jet Token”) are prepared in accordance with accounting principles generally accepted
in the United States of America (“U.S. GAAP”). The Company is headquartered in Las Vegas, Nevada.
In
September 2020, the Company formed a wholly-owned subsidiary Galilee LLC, a Delaware limited liability company. In November 2020, the
Company formed a wholly-owned subsidiary Jet Token Management Inc., a Delaware corporation, and later changed its name to Jet Token Software
Inc. In November 2020, the Company formed another wholly-owned subsidiary, Jet Token Management Inc. a California corporation. In June
2021, the Company formed a wholly-owned subsidiary Galilee 1 SPV LLC, a Delaware limited liability company. In March and June 2022, the
Company formed two wholly owned subsidiaries, Galilee II SPV LLC and Galilee III SPV LLC, respectively. Both are Delaware limited liability
companies. These were both sold during the year as part of the Company’s fractional ownership program. To date, all subsidiaries
have had no operations.
The
Company intends to combine concepts from fractional jet and jet card programs with lessons learned from building blockchain currencies.
The Company believes the tokenization of flight hours under (as the enterprise matures) fractional jet and jet card programs offers the
possibility of reduced transaction costs and, through the evolution of a marketplace, higher industry fleet utilization. The Company’s
purposeful enhancement of price discovery and reduced entry price have the potential to produce fairer and more inclusive results for
aircraft owners and travelers alike.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Summary of Significant Accounting Policies
Going
Concern and Management Plans
The
Company has limited operating history and has incurred losses from operations since Inception. These matters raise concern about the
Company’s ability to continue as a going concern.
The
Company began ramping up its revenue-generating activities during the second half of the year ended December 31, 2021 and continuing
into 2022. During the next twelve months, the Company intends to fund its operations with capital from its operations, prior and its
most recent Regulation A campaign and prospectively, additional equity offerings. The Company also has the ability to reduce cash burn
to preserve capital. There are no assurances, however, that management will be able to raise capital on terms acceptable to the Company.
If the Company is unable to obtain sufficient amounts of additional capital, the Company may be required to reduce the near-term scope
of its planned development and operations, which could delay implementation of the Company’s business Plan and harm its business,
financial condition and operating results. The balance sheets do not include any adjustments that might result from these uncertainties.
Basis
of Presentation
The
accounting and reporting policies of the Company conform with generally accepted accounting principles in the United States (“GAAP”).
Principles
of Consolidation
The
accompanying consolidated financial statements include the accounts of Jet Token Inc. and its wholly owned subsidiaries, Jet Token Software
Inc., Jet Token Management Inc., Galilee LLC, Galilee 1 SPV LLC, Galilee II SPV LLC and Galilee III SPV LLC. All intercompany accounts
and transactions have been eliminated in consolidation.
Use
of Estimates
The
preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions
that affect the reported amounts of assets and liabilities, and the reported amount of revenues and expenses during the reporting period.
Actual results could materially differ from these estimates. It is reasonably possible that changes in estimates will occur in the near
term.
Fair
Value of Financial Instruments
Fair
value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal
or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date.
Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable
inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs
are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from
sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that
market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:
Level
1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level
2 - Include other inputs that are directly or indirectly observable in the marketplace.
Level
3 - Unobservable inputs which are supported by little or no market activity.
The
fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value. The Company does not have any financial instruments as of December 31, 2022 and 2021.
Risks
and Uncertainties
The
Company has a limited operating history and has only recently begun generating revenue from intended operations. The Company’s
business and operations are sensitive to general business and economic conditions in the U.S. and worldwide along with local, state,
and federal governmental policy decisions. A host of factors beyond the Company’s control could cause fluctuations in these conditions.
Adverse conditions may include but are not limited to: changes in the airline industry, blockchain asset regulations by authorities,
fuel and operating costs, changes to corporate governance best practices for executive flying, general demand for private jet travel,
market acceptance of the Company’s business model and COVID-19 issues more fully described below. These adverse conditions could
affect the Company’s financial condition and the results of its operations.
On
January 30, 2020, the World Health Organization declared the COVID-19 coronavirus outbreak a “Public Health Emergency of International
Concern” and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the
coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places
and businesses. The COVID-19 coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact
on the economies and financial markets of many countries, including the geographical area in which the Company operates. While it is
unknown how long these conditions will last and what the complete financial effect will be to the Company, it is known that the travel
industry in which we operate has been severely impacted. The Company is monitoring the situation and exploring opportunities in regard
to travel behavior for when travel restrictions ease.
Cash
and Cash Equivalents
For
purpose of the consolidated statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents.
Offering
Costs
The
Company complies with the requirements of Financial Accounting Standards Board (“FASB”), Accounting Standards Codification
(“ASC”) 340 with regards to offering costs. Prior to the completion of an offering, offering costs will be capitalized as
deferred offering costs on the consolidated balance sheet. The deferred offering costs will be charged to stockholders’ equity
upon the completion of an offering or to expense if the offering is not completed.
Property
and Equipment
Property
and equipment are recorded at cost, less accumulated depreciation. Expenditures for major additions and improvements are capitalized
and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise
disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results
of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line
method for financial statement purposes. As of December 31, 2022, property and equipment consisted entirely of equipment which is being
depreciated over a three-year period.
Internal
Use Software
The
Company incurs software development costs to develop software programs to be used solely to meet its internal needs and cloud-based applications
used to deliver its services. In accordance with ASC 350-40, Internal-Use Software, the Company capitalizes development costs related
to these software applications once a preliminary project stage is complete, funding has been committed, and it is probable that the
project will be completed, and the software will be used to perform the function intended. As of December 31, 2022 and 2021, the Company
has capitalized approximately $398,000 and $398,000, respectively, of internal software related costs, which is included in intangible
assets in the accompanying consolidated balance sheets. The software officially launched on December 31, 2020. Amortization expense for
the years ended December 31, 2022 and 2021 was $132,702 and $132,696, respectively. Accumulated amortization as of December 31, 2022
was $265,398.
Impairment
of Long-Lived Assets
The
Company follows ASC 360, Accounting for Impairment or Disposal of Long-Lived Assets. ASC 360 requires that if events or changes in circumstances
indicate that the carrying value of long-lived assets or asset groups may be impaired, an evaluation of recoverability would be performed
by comparing the estimated future undiscounted cash flows associated with the asset to the asset’s carrying value to determine
if a write-down to market value would be required. Long-lived assets or asset groups that meet the criteria in ASC 360 as being held
for sale are reflected at the lower of their carrying amount or fair market value, less costs to sell.
Revenue
Recognition
In
applying the guidance of ASC 606, the Company 1) identifies the contract with the customer, 2) identifies the performance obligations
in the contract, 3) determines the transaction price, 4) determines if an allocation of that transaction price is required given the
performance obligations under the contract, and 5) recognizes revenue when or as the companies satisfies a performance obligation. The
Company generates/intends to generate revenue from three primary sources: a fractional ownership program, jet card programs, and ad hoc
charter through the Jet Token App.
Under
the fractional ownership program, a customer can purchase an ownership share in a jet which guarantees the customer access to the jet
for a preset number of hours per year and provides all the benefits of plane ownership at a fraction of the cost. The jet card program
provides the customer with a preset number of hours of guaranteed private jet access over the agreement term (generally a year) without
the larger hourly or capital commitment of purchasing an ownership share. The fractional ownership program consists of an initial buy-in
or upfront fee and a fixed hourly rate for flight hours. Alternatively, the jet card program consists of a fixed hourly rate for flight
hours typically paid 100% upfront. The Company also generates revenues from individual ad hoc charter bookings processed through our
App, whereby the Company will source, negotiate, and arrange travel on a charter basis for a customer based on pre-selected options and
pricing provided by the Company to the customer through the App. Revenue is recognized upon transfer of control of our promised services,
which generally occurs upon the flight hours being used. Any unused hours for the fractional jet and jet card programs are forfeited
at the end of the contract term and are thus immediately recognized as revenue at that time. Revenues from the sale of fractional or
whole interests in an aircraft is recognized at the time title to the aircraft is transferred to the purchasers, which generally occurs
upon delivery or ownership transfer.
The
Company defers revenue in all instances when the earnings process is not yet complete. As of December 31, 2022, the Company deferred
$933,361 related to prepaid flight hours under the jet card program for which the related travel had not yet occurred.
The
following is a breakout of revenue components by subcategory for the years ended December 31, 2022 and 2021.
Schedule
Of Breakout Of Revenue
| |
2022 | | |
2021 | |
| |
| | |
| |
Jet card and charter programs | |
$ | 4,662,728 | | |
$ | 1,112,195 | |
Fractional/Whole Aircraft Sales | |
| 17,200,000 | | |
| - | |
Revenues | |
$ | 21,862,728 | | |
$ | 1,112,195 | |
Research
and Development
The
Company incurs research and development costs during the process of researching and developing its technologies and future offerings.
The Company’s research and development costs consist primarily of payments for third party software development that is not capitalizable.
The Company expenses these costs as incurred until the resulting product has been completed, tested, and made ready for commercial use.
Stock-Based
Compensation
The
Company accounts for stock awards under ASC 718, Compensation – Stock Compensation. Under ASC 718, share-based compensation cost
is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the employee’s
requisite vesting period or over the nonemployee’s period of providing goods or services. The fair value of each stock option or
warrant award is estimated on the date of grant using the Black-Scholes option valuation model.
Income
Taxes
The
Company applies ASC 740 Income Taxes (“ASC 740”). Deferred income taxes are recognized for the tax consequences in future
years of differences between the tax bases of assets and liabilities and their financial statement reported amounts at each period end,
based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision
for income taxes represents the tax expense for the period, if any and the change during the period in deferred tax assets and liabilities.
ASC
740 also provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. A tax benefit from
an uncertain position is recognized only if it is “more likely than not” that the position is sustainable upon examination
by the relevant taxing authority based on its technical merit.
On
March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The Cares
Act includes provisions relating to refundable payroll tax credits, deferment of the employer portion of certain payroll taxes, net operating
loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical
corrections to tax depreciation methods for qualified improvement property. The CARES Act retroactively suspends the 80% income limitation
on use of NOL carryovers for taxable years beginning before January 1, 2021, and allows 100% of any such taxable income to be offset
by the amount of such NOL carryforward. This 80% income limitation is reinstated (with slight modifications) for tax years beginning
after December 31, 2021.
As
of December 31, 2022 and 2021, the Company had deferred tax assets of approximately $1,465,000 and $1,213,000, respectively, primarily
from net operating losses of approximately $6,980,000 and $5,778,000. The Company maintains a full valuation allowance on the deferred
tax assets as of December 31, 2022 and 2021. The valuation allowance increased by $260,000 and $694,000 during the years ended December
31, 2022 and 2021, respectively. Deferred tax assets after 2018 have no expiration.
The
Company is subject to tax in the United States (“U.S.”) and files tax returns in the U.S. Federal jurisdiction and Nevada
state jurisdiction. The Company is subject to U.S. Federal, state, and local income tax examinations by tax authorities for all periods
since Inception. The Company currently is not under examination by any tax authority.
Loss
per Common Share
The
Company presents basic loss per share (“EPS”) and diluted EPS on the face of the consolidated statements of operations. Basic
loss per share is computed as net loss divided by the weighted average number of common shares outstanding for the period. For periods
in which we incur a net loss, the effects of potentially dilutive securities would be antidilutive and would be excluded from diluted
EPS calculations. For the years ended December 31, 2022 and 2021, there were 70,373,357 and 61,195,357 options, 1,666,667 and 1,666,667
warrants, and 19,509,718 and 19,809,718 convertible preferred shares, respectively, excluded.
Concentration
of Credit Risk
The
Company maintains its cash with several major financial institutions located in the United States of America which it believes to be
creditworthy. Balances are insured by the Federal Deposit Insurance Corporation up to $250,000. At times, the Company may maintain balances
in excess of the federally insured limits.
New
Accounting Standards
In
February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.
2016-02, Leases (Topic 842), specifying the accounting for leases, which supersedes the leases requirements in Topic 840, Leases. The
objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial
statements about the amount, timing, and uncertainty of cash flows arising from a lease. Lessees are permitted to make an accounting
policy election to not recognize the asset and liability for leases with a term of twelve months or less. Lessors’ accounting is
largely unchanged from the previous accounting standard. In addition, Topic 842 expands the disclosure requirements of lease arrangements.
Lessees and lessors will use a modified retrospective transition approach, which includes several practical expedients. This guidance
is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021, with early adoption
permitted. The Company adopted the provisions of the new standard starting January 1, 2022 using the modified retrospective approach.
As a result, the comparative financial information prior to the date of adoption has not been updated and continue to be reported under
the accounting standards in effect for those periods. The adoption of ASC 842 resulted in the recognition of operating lease ROU assets
and lease liabilities for operating leases of $2,506,711 as of January 1, 2022 (the present value of the remaining lease payments), and
those accounts will be amortized over the remaining lease term of 59 months.
The
FASB issues ASUs to amend the authoritative literature in ASC. There have been several ASUs to date, including those above, that amend
the original text of ASC. Management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical
corrections, (iii) are not applicable to us or (iv) are not expected to have a significant impact our consolidated financial statements.
NOTE
3 – OTHER ASSETS
Other
Assets
Other
assets consisted of the following:
Schedule Of Other Assets
| |
2022 | | |
2021 | |
Aircraft Deposit | |
$ | - | | |
$ | 350,000 | |
Deposits | |
| 73,226 | | |
| 13,714 | |
Lease Maintenance Reserve | |
| 689,750 | | |
| 689,750 | |
Lease Financing Costs | |
| - | | |
| 69,325 | |
Total Other Assets | |
$ | 762,976 | | |
$ | 1,122,789 | |
During
2020, the Company entered and executed an Aircraft purchase agreement with certain terms and conditions under which it made two payments
in the amounts of $450,000 and $150,000 as purchase deposits for Aircrafts. The terms of the agreement specify that $250,000 of this
amount shall be considered nonrefundable. During the year ended December 31, 2021, $250,000 of this amount was applied to the lease maintenance
reserve required under the aircraft lease discussed in Note 5.
The
Company also entered and executed an Aircraft management and charter service agreement. The Company made an operating deposit of $50,000
into a segregated operating account as part of the service agreement. The Company is to maintain a $50,000 operating deposit for the
length of the agreement.
NOTE
4 – NOTE PAYABLE
Note Payable
In
May 2020, the Company received a loan in the amount of $121,000 pursuant to the Paycheck Protection Program (“PPP”) under
the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. Subject to the terms of the Note, the PPP Loan bore interest
at a fixed rate of one percent (1%) per annum, with the first six months of interest and principal payments deferred, had an initial
term of two years, and was unsecured and guaranteed by the Small Business Administration. The Company may apply to the Lender for forgiveness
of the PPP Loan, with the amount which may be forgiven equal to the sum of payroll costs, covered rent, and covered utility payments
incurred by the Company during the 24-week period beginning on April 13, 2020, calculated in accordance with the terms of the CARES Act.
The Note provided for customary events of default including, among other things, cross-defaults on any other loan with the Lender. The
PPP Loan may be accelerated upon the occurrence of an event of default. The PPP loan proceeds were used for payroll, covered rent and
other covered payments. The PPP Loan was formally forgiven effective January 2021.
On
February 2021, the Company received a loan in the amount of $86,360 pursuant to the Paycheck Protection Program (“PPP”) under
the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. Subject to the terms of the Note, the PPP Loan bore interest
at a fixed rate of one percent (1%) per annum, with the first six months of interest and principal payments deferred, had an initial
term of two years, and was unsecured and guaranteed by the Small Business Administration. The Company may apply to the Lender for forgiveness
of the PPP Loan, with the amount which may be forgiven equal to the sum of payroll costs, covered rent, and covered utility payments
incurred by the Company during the 24-week period beginning on February 18, 2021, calculated in accordance with the terms of the CARES
Act. The Note provided for customary events of default including, among other things, cross-defaults on any other loan with the Lender.
The PPP Loan may be accelerated upon the occurrence of an event of default. The PPP loan proceeds were used for payroll, covered rent
and other covered payments. The PPP Loan was formally forgiven effective July 2021.
In
July 2021, the Company entered into a loan agreement with StartEngine Primary, LLC, a service provider of the Company. The agreement
allows for advances up to an aggregate amount of $500,000 to pay for advertising and promotion services in connection with the Company’s
equity offerings. The advances are non-interest bearing and shall be repaid on the date of the closing of the Company’s equity
offering from the proceeds of the offering. During the year ended December 31, 2021, approximately $452,000 had been drawn on the loan,
with a balance of $194,727 due as of December 31, 2021. During the year ended December 31, 2022, the Company repaid this remaining balance
in full.
NOTE
5 – COMMITMENTS AND CONTINGENCIES
Commitments and Contingencies
Operating
Lease
In
November 2021, the Company entered into a leasing arrangement with a third party for an aircraft to be used in the Company’s operations.
The lease term is for 60 months, expiring November 2026, and requires monthly lease payments. At any time during the lease term, the
Company has the option to purchase the aircraft from the lessor at the aircraft’s fair market value at that time.
The
lease agreement also requires the Company to hold a liquidity reserve of $500,000 in a separate bank account as well as a maintenance
reserve of approximately $690,000 for the duration of the lease term. The liquidity reserve is held in a bank account owned by the Company.
As such, this is classified as restricted cash in the accompanying balance sheet. The maintenance reserve are funds held by the lessor
to be used for reasonable maintenance expenses in excess of those covered by the airframe and engine maintenance programs maintained
by the Company. These maintenance programs are designed to fully cover the Company’s aircraft’s maintenance costs, both scheduled
and unscheduled, and therefore the Company does not expect these funds will be drawn upon. If funds from the maintenance reserve are
expended by the lessor, the Company is required to replenish the maintenance reserve account up to the required reserve amount. Any funds
remaining at the end of the Lease term will be returned to the Company. In connection with this leasing arrangement, the Company agreed
to pay an arrangement fee of $70,500 to a separate third party. Upon adopting ASC 842 effective January 1, 2022 as discussed in Note
2, the Company elected to adopt the package of practical expedients, which include the option to not reassess whether initial direct
costs meet the new definition under ASC 842 at the initial application date. As such, the unamortized balance of the arrangement fee
has been included within the right-of-use asset in the accompanying balance sheet and is being amortized to lease expense over the remaining
term of the lease.
On
April 4, 2022, the Company entered into an additional leasing arrangement with a third party for an aircraft to be used in the Company’s
operations, substantially identical to the terms of the November 2021 agreement. The lease term was for 60 months, expiring April 4,
2027, and required monthly lease payments. At any time during the lease term, the Company had the option to purchase the aircraft from
the lessor at the aircraft’s fair market value at that time. The lease agreement also required the Company to maintain its existing
liquidity reserve of $500,000 in a separate bank account as well as an additional maintenance reserve of approximately $690,000 for the
duration of the lease term. The liquidity reserve is required to be held in a bank account owned by the Company. Any funds remaining
at the end of the Lease term would be returned to the Company. In May 2022, the Company exercised the option to purchase the aircraft
from the lessor and in June 2022 sold the aircraft.
Total
lease expense for the years ended December 31, 2022 and 2021 was $863,824 and $90,165, respectively, which is included within cost of
revenues in the accompanying statement of operations.
As
of December 31, 2022, future minimum required lease payments due under the non-cancellable operating lease are as follows:
Schedule
Of Future Minimum Lease Payments
| |
| | |
2023 | |
$ | 549,000 | |
2024 | |
| 549,000 | |
2025 | |
| 549,000 | |
2026 | |
| 503,250 | |
Total future minimum lease payments | |
$ | 2,150,250 | |
Less imputed interest | |
| (123,907 | ) |
Maturities of lease liabilities | |
$ | 2,026,343 | |
Share
Purchase Agreement
The
Company executed a Share Purchase Agreement, dated as of August 4, 2022, with GEM Yield LLC SCS and GEM Yield Bahamas Limited (together
with GEM Yield LLC SCS, “GEM”). Upon the Company’s common stock being publicly listed on a U.S. securities exchange,
such as the NYSE or NASDAQ, the Company will have the right to periodically issue and sell to GEM, and GEM has agreed to purchase, up
to $40,000,000 aggregate value of shares of the Company’s common stock during the 36-month period following the date of listing.
In
consideration for these services, the Company has agreed to pay GEM a commitment fee equal to $800,000 payable in cash or freely tradable
shares of the Company’s common stock, payable on or prior to the first anniversary of the date of listing. On the date of listing,
the Company will also issue to GEM warrants granting it the right to purchase up to 6% of the outstanding common stock of the Company
on a fully diluted basis as of the date of listing. The warrant will have a term of three years.
The
Company has also entered into a Registration Rights Agreement with GEM, obligating the Company to file a Registration Statement with
respect to resales of the shares of common stock issued to GEM under the Share Purchase Agreement and upon exercise of the warrant.
NOTE
6 – STOCKHOLDERS’ EQUITY
Shareholders’
Deficit
Preferred
Stock
The
Company has authorized the issuance of 50,000,000 shares of its preferred stock with par value of $0.0000001. Of the authorized number
of preferred shares, 10,000,000 shares have been designated as Series Seed Preferred Stock, 25,000,000 have been designated Series CF
Non-Voting Preferred Stock (“Series CF”), and 15,000,000 are undesignated. Each share of preferred stock can be converted
to one share of common stock.
In
October 2021, the Company redeemed 300,000 shares of its outstanding Series Seed Preferred Stock for a total purchase price of approximately
$225,000.
Common
Stock
The
Company has authorized the issuance of 500,000,000 shares of its common stock, of which 300,000,000 are designated as common stock and
200,000,000 are non-voting common stock, all par value of $0.0000001. Shares of non-voting common stock will convert automatically into
fully paid and nonassessable shares of the Company’s voting common stock upon the closing of the sale of shares of voting common
stock to the public in a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, or upon the merger of the Company with and into another entity. The conversion rate is currently one share of
voting common stock per share of non-voting common stock.
In
February 2020, the Company undertook a Regulation A, Tier 2 offering for which it is selling up to 33,333,333 non-voting common stock
at $0.30 per share for a maximum of $10,000,000. During the year ended December 31, 2020, the Company issued 31,402,755 shares of non-voting
common stock under the Regulation A, Tier 2 campaign for aggregate gross proceeds of $9,420,827, with $522,966 of these proceeds pending
release from escrow. During the year ended December 31, 2021, the Company closed on 1,494,462 shares of non-voting common stock for gross
proceeds of $448,339, which had been committed to and held in a third-party escrow prior to December 31, 2020. The Company also collected
the remining $522,966 of the proceeds that had been subject to hold-back in escrow. During the year ended December 31, 2022, the Company
also collected on the sale of an additional 61,894 shares of non-voting common stock for gross proceeds of $18,598 under this offering.
In
June 2021, the Company undertook another Regulation A, Tier 2 offering for which it is selling up to 29,173,333 non-voting common stock
at $0.75 per share for a maximum of $21,880,000. During the year ended December 31, 2021, the Company issued 2,625,446 shares of non-voting
common stock under the Regulation A, Tier 2 campaign for aggregate gross proceeds of $1,969,085, with $96,600 of these proceeds pending
release from escrow at December 31, 2021. During the year ended December 31, 2022, the Company collected on the escrow funds and issued
an additional 3,858,662 shares of non-voting common stock under the Regulation A, Tier 2 campaign for aggregate gross proceeds of $2,901,106,
with $15,544 of these proceeds pending release from escrow at December 31, 2022. This offering closed on January 18, 2023.
During
the year ended December 31, 2021, the Company entered into an agreement with its Executive Chairman to exchange 6,646,667 shares of common
stock for 6,646,667 shares of non-voting common stock for no consideration.
Warrants
In
connection with the Regulation A, Tier 2 offerings noted above, the Company engaged StartEngine Primary, LLC (“StartEngine”)
to act as its placement agent. For such, StartEngine will receive 7% commissions on proceeds from the offering, and the Company will
issue warrants to StartEngine up to a percentage specified within the agreements of the non-voting common stock sold through StartEngine
at exercise price consistent with the selling price of the shares in the offering.
In
December 2020, the Company issued the 1,666,667 warrants owed to StartEngine in connection with this arrangement for the offering that
began in February 2020. The warrants have an exercise price of $0.30 and a term of three years. The warrants allow for adjustments to
the exercise price and number of shares based on future stock dividends, stock splits, and subsequent non-exempt equity sales. The Company
accounts for these warrants in accordance with ASU 2017-11, which changes the classification analysis of certain equity-linked financial
instruments (or embedded features) with down round features. Accordingly, the value of these warrants is contained within equity, both
increasing and decreasing additional paid-in capital for a net zero effect. The Company valued the warrants earned during the year ended
December 31, 2020 at approximately $184,000, using the Black-Scholes model, with similar inputs to those disclosed in the stock option
section below, with the exception that the expected life was three years.
Stock
Options
On
June 4, 2018, the Company’s Board of Directors adopted the Jet Token, Inc. 2018 Stock Option and Grant Plan (the “2018 Plan”).
The 2018 Plan provides for the grant of equity awards to employees, and consultants, to purchase shares of the Company’s common
stock. As of December 31, 2020, up to 25,000,000 shares of its common stock could be issued pursuant to awards granted under the 2018
Plan. During the year ended December 31, 2021, the 2018 Plan was amended three times to increase the total number of shares reserved
for issuance thereunder. As of December 31, 2022 and 2021, the total number of shares reserved for issuance under the 2018 Plan was 75,000,000
shares, consisting of (i) 25,000,000 shares of common stock and (ii) 50,000,000 shares of non-voting common stock. The 2018 Plan is administered
by the Company’s Board of Directors.
In
August 2021, the Company’s Board of Directors adopted the Jet Token Inc. 2021 Stock Plan (the “2021 Plan”). The 2021
plan provides for the grant of equity awards to employees, outside directors, and consultants, including the direct award or sale of
shares, stock options, and restricted stock units to purchase shares. As of December 31, 2021, up to 5,000,000 shares of non-voting common
stock may be issued pursuant to awards granted under the 2021 Plan. During the year ended December 31, 2022, the 2021 Plan was amended
to increase the number of shares of non-voting common stock authorized under the 2021 Plan to 15,000,000. In the event that shares of
non-voting common stock subject to outstanding options or other securities under the Company’s 2018 Stock Open and Grant Plan expire
or become exercisable in accordance with their terms, such shares shall be automatically transferred to the 2021 Plan and added to the
number of shares then available for issuance under the 2021 Plan. The 2021 Plan is administered by the Company’s Board of Directors,
and expires ten years after adoption, unless terminated by the Board.
During
the year ended December 31, 2021, the Company granted a total of 36,945,357 stock options to purchase common stock to various advisors
and consultants. The options have a ten-year life. 1,000,000 of the options are exercisable at $0.30 and the remaining are exercisable
at $0.75. 17,495,357 of the options were immediately vested on the grant date, 1,450,000 of the options will vest upon the achievement
of certain sales targets or other requirements, while the remaining options vest in monthly tranches over a three-year period. The options
had a grant date fair value of approximately $20,048,000, which will be recognized over the vesting period.
During
the year ended December 31, 2022, the Company granted an additional 1,000,000 stock options to purchase common stock to the Company’s
Chief Executive Officer. The options have a ten-year life and are exercisable at $0.75. The options vest in monthly tranches through
March 31, 2025. The options had a grant date fair value of approximately $522,000, which will be recognized over the vesting period.
During
the year ended December 31, 2022, the Company granted a total of 8,178,000 stock options to purchase common stock to various employees,
advisors and consultants. The options have a ten-year life and are exercisable at $0.75. 1,678,000 of the options were immediately vested
on the grant date, while the remaining options vest in monthly tranches over a three-year period. The options had a grant date fair value
of approximately $4,439,000, which will be recognized over the vesting period.
A
summary of our stock option activity for the years ended December 31, 2022 and 2021, is as follows:
Schedule
Of Option Activity
| |
Number of Shares | | |
Weighted
Average
Exercise Price | | |
Weighted
average Remaining
Contractual Term | |
Outstanding at December 31, 2020 | |
| 24,300,000 | | |
$ | 0.25 | | |
| - | |
Granted | |
| 36,945,357 | | |
| 0.74 | | |
| - | |
Exercised | |
| - | | |
| - | | |
| - | |
Expired/Cancelled | |
| (50,000 | ) | |
| - | | |
| - | |
Outstanding at December 31, 2021 | |
| 61,195,357 | | |
$ | 0.54 | | |
| 9.2 | |
Granted | |
| 9,178,000 | | |
| 0.75 | | |
| - | |
Exercised | |
| - | | |
| - | | |
| - | |
Expired/Cancelled | |
| - | | |
| - | | |
| - | |
Outstanding at December 31, 2022 | |
| 70,373,357 | | |
$ | 0.57 | | |
| 8.3 | |
| |
| | | |
| | | |
| | |
Exercisable at December 31, 2021 | |
| 36,521,147 | | |
$ | 0.50 | | |
| 9.1 | |
Exercisable at December 31, 2022 | |
| 52,584,463 | | |
$ | 0.53 | | |
| 8.2 | |
The
Company estimates the fair value of stock options that contain service and/or performance conditions using the Black-Scholes option pricing
model. The range of input assumptions used by the Company were as follows:
Schedule
Of Estimate The Fair Value Of Stock Options
| |
2022 | | |
2021 | |
Expected life (years) | |
| 6
to 10 | | |
| 5
to 10 | |
Risk-free interest rate | |
| 1.43%
- 4.10 | % | |
| 0.01%
- 1.43 | % |
Expected volatility | |
| 80 | % | |
| 80 | % |
Annual dividend yield | |
| 0 | % | |
| 0 | % |
The
Company recognizes stock option forfeitures as they occur as there is insufficient historical data to accurately determine future forfeitures
rates.
The
risk-free interest rate assumption for options granted is based upon observed interest rates on the United States government securities
appropriate for the expected term of the Company’s stock options.
The
expected term of stock options is calculated using the simplified method which takes into consideration the contractual life and vesting
terms of the options.
The
Company determined the expected volatility assumption for options granted using the historical volatility of comparable public company’s
common stock. The Company will continue to monitor peer companies and other relevant factors used to measure expected volatility for
future stock option grants, until such time that the Company’s common stock has enough market history to use historical volatility.
The
dividend yield assumption for options granted is based on the Company’s history and expectation of dividend payouts. The Company
has never declared or paid any cash dividends on its common stock, and the Company does not anticipate paying any cash dividends in the
foreseeable future.
During
the years ended December 31, 2022 and 2021, stock-based compensation expense of $6,492,653 and $12,690,373, respectively, was recognized
for the vesting of these options. As of December 31, 2022, there was approximately $8,115,000 in unrecognized stock-based compensation,
which will be recognized through September 2025.
Restricted
Stock Units
In
August 2021, the Company granted Restricted Stock Units (RSUs) to a contractor. The grant allows the contractor to earn up to 4,813,333
shares of non-voting common stock and contains both service-based vesting requirements and liquidity event requirements. Service-based
requirements are such that the contractor needs to continue to provide service through August 2022. In addition to the service-based
requirements, in order for the RSUs to vest, the Company will need to undertake an IPO or a sale as defined by the grant notice. The
RSUs expire in seven years. As of December 31, 2022, the Company has determined that it is not yet probable that these RSUs will vest,
and accordingly, have not yet recorded expense related to these RSUs.
NOTE
7 – RELATED PARTY TRANSACTIONS
Related
Party Transactions
From
time to time, related parties make payments on the Company’s behalf or advance cash to the Company for operating costs which require
repayment. Such transactions are considered short-term advances and non-interest bearing. During the years ended December 31, 2022 and
2021, the Company’s Founder and Executive Chairman advanced a total of $42,000 and $200,196, respectively, to the Company in the
form of a non-interest-bearing loan, and repaid $242,196 and $0 of these advances, respectively. As of December 31, 2022 and 2021, the
Company owed $0 and $200,196 , respectively, to the Company’s Founder and Executive Chairman related to such advances.
NOTE
8 – SUBSEQUENT EVENTS
Subsequent
Events
Subsequent
to December 31, 2022, the Company issued an additional approximately 2 million shares of non-voting common stock at a price of $0.75
per share under the Regulation A, Tier 2 offering discussed in Note 5 for gross proceeds of approximately $1.5 million.
Subsequent
to December 31, 2022, the Company granted a total of 2,000,000 stock options to purchase non-voting common stock to various employees
and consultants. The options are exercisable at $0.75 per share, have 10 year lives, and vest in monthly tranches over a three-year period.
Subsequent
to December 31, 2022, the Company formed a 50/50 joint venture subsidiary with Great Western Air LLC dba Cirrus Aviation Services, 380
Software LLC, a Nevada limited liability company. To date, there have been no operations or financial activity.
The
Company has evaluated subsequent events that occurred after December 31, 2022 through February 23, 2023, the date of these consolidated
financial statements were available to be issued, and noted no additional events requiring recognition for disclosure.
Annex
A
Annex
B
Annex
C
Annex
D
PART
II
INFORMATION
NOT REQUIRED IN THE PROSPECTUS
Item
20. Indemnification of Directors and Officers
Cayman
Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification
of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public
policy, such as to provide indemnification against willful default, willful neglect, civil fraud or the consequences of committing a
crime. The Existing Organizational Documents provide for indemnification of our officers and directors against any liability, action,
proceeding, claim, demand, costs, damages or expenses, including legal expenses, whatsoever which they or any of them may incur as a
result of any act or failure to act in carrying out their functions other than such liability (if any) that they may incur by reason
of their own actual fraud, willful neglect or willful default.
We
have entered into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification
provided for in the Existing Organizational Documents. [We have purchased a policy of directors’ and officers’ liability
insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances
and insures us against our obligations to indemnify our officers and directors.]
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us
pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.
Item
21. Exhibits and Financial Statements Schedules
(a)
Exhibits: [To be updated]
Exhibit
Number |
|
Description |
2.1* |
|
Business
Combination Agreement and Plan of Reorganization, dated as of February 24, 2023, by and among Oxbridge, First Merger Sub,
Second Merger Sub and Jet Token (attached as Annex A to the proxy statement/prospectus that forms a part of this registration statement). |
3.1 |
|
Amended
and Restated Memorandum and Articles of Association of Oxbridge Acquisition Corp. (incorporated by reference to Exhibit 3.1
of Oxbridge Acquisition Corp.’s Current Report on Form 8-K filed with the SEC on August 17, 2021). |
3.2* |
|
Form
of Certificate of Incorporation of Jet.AI (attached as Annex B to the proxy statement/prospectus that forms a part of this registration
statement) |
3.3* |
|
Form
of Bylaws of Jet.AI (attached as Annex C to the proxy statement/prospectus that forms a part of this registration statement). |
4.1 |
|
Specimen
Unit Certificate (incorporated by reference to Exhibit 4.1 of Oxbridge Acquisition Corp.’s Registration Statement on Form S-1
filed with the SEC on July 30, 2021). |
4.2 |
|
Specimen
Ordinary Share Certificate (incorporated by reference to Exhibit 4.2 of Oxbridge Acquisition Corp.’s Registration Statement
on Form S-1 filed with the SEC on July 30, 2021). |
4.3 |
|
Specimen
Warrant Certificate (incorporated by reference to Exhibit 4.3 of Oxbridge Acquisition Corp.’s Registration Statement on Form
S-1 filed with the SEC on July 30, 2021). |
5.1* |
|
Opinion
of Dykema Gossett PLLC |
8.1* |
|
Opinion
of Dykema Gossett PLLC regarding certain U.S. federal income tax matters |
10.1* |
|
2023 Jet.AI Inc. Omnibus Incentive Plan (attached as
Annex D to the proxy statement/prospectus that forms a part of this registration statement). |
21.1* |
|
List
of Subsidiaries of Oxbridge Acquisition Corp. |
23.1* |
|
Consent
of Hacker Johnson & Smith PA, independent registered public accounting firm for Oxbridge Acquisition Corp. |
23.2* |
|
Consent
of BF Borgers CPA PC, independent registered public accounting firm for Jet Token, Inc. |
23.3* |
|
Consent
of Dykema Gossett PLLC (included in Exhibit 5.1) |
23.4* |
|
Consent
of Dykema Gossett PLLC (included in Exhibit 8.1) |
24.1 |
|
Power
of Attorney (reference is made to the signature page to the Registration Statement) |
107 |
|
Filing Fee Table |
*
|
To
be filed by amendment. |
† |
Management
Contracts. |
UNDERTAKINGS
The
undersigned Registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i)
To include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii)
To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation
of Registration Fee” table in the effective registration statement; and
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2)
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b)
as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses
filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used
after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is
part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such
document immediately prior to such date of first use.
(5)
That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution
of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant
to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule
424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by
the undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6)
That, prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this Registration
Statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the Registrant undertakes that
such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.
(7)
That every prospectus: (i) that is filed pursuant to the immediately preceding paragraph, or (ii) that purports to meet the requirements
of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed
as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes
of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(8)
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred
or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(9)
The undersigned Registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus
pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding to the request.
(10)
The undersigned Registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction,
and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became
effective.
SIGNATURES
Pursuant
to the requirements of the Securities Act, the Registrant has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Georgetown, Cayman Islands, on March 24, 2023.
|
Oxbridge Acquisition Corp. |
|
|
|
|
By: |
/s/ Jay
Madhu |
|
Name: |
Jay
Madhu |
|
Title: |
Chief
Executive Officer |
POWER
OF ATTORNEY
KNOW
ALL MEN BY THESE PRESENTS, that each of the undersigned constitutes and appoints each of Jay Madhu and Wrendon Timothy his or her true
and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in his or her name, place
and stead, in any and all capacities, to sign this Registration Statement on Form S-4 (including all pre-effective and post-effective),
and to file the same, with all exhibits thereto, and other documents in connection therewith, with the U.S. Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying
and confirming that any such attorney-in-fact and agent, or his or her substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant
to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities indicated
on March 24, 2023.
Signature |
|
Title |
|
|
|
/s/ Jay
Madhu |
|
Chairman,
Chief Executive Officer and President |
Jay
Madhu |
|
(Principal
Executive Officer) |
|
|
|
/s/ Wrendon
Timothy |
|
Chief
Financial Officer, Director, Secretary and Treasurer |
Wrendon
Timothy |
|
(Principal
Financial and Accounting Officer) |
|
|
|
/s/ Jason
Butcher |
|
Director |
Jason
Butcher |
|
|
|
|
|
/s/ Allan
Martin |
|
Director |
Allan
Martin |
|
|
|
|
|
/s/ William
Yankus |
|
Director |
William
Yankus
|
|
|
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