| Summary of Significant Accounting Policies | Note
2— Summary of Significant Accounting Policies Basis
of Presentation The
accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form
10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements
prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial
reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position,
results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include
all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating
results and cash flows for the periods presented The
accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Form S-1 which contains
the initial audited financial statements and notes thereto for the period from April 12, 2021 (inception) to April 16, 2021 as filed
with the SEC on July 19, 2021 and the Form 8-K as filed with the SEC on August 23, 2021. The interim results for the period from
April 12, 2021 (inception) to June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December
31, 2021 or for any future interim periods. 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. OXBRIDGE
ACQUISITION CORP. NOTES
TO CONDENSED FINANCIAL STATEMENTS JUNE
30, 2021 (Unaudited) 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. 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. 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 June 30, 2021, the Company did not have any cash equivalents. 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 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 CONDENSED FINANCIAL STATEMENTS JUNE
30, 2021 (Unaudited) 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) will be recognized
as derivative liabilities in accordance with ASC 815. Accordingly, the Company will recognize the warrant instruments as liabilities
at fair value and adjust the instruments to fair value at each reporting period. The liabilities will be subject to re-measurement at
each balance sheet date until exercised. The fair value of the Public Warrants and the Private Placement Warrants are estimated using
Black-Scholes option pricing model and are considered Level 3. Class
A Ordinary Shares Subject to Possible Redemption As
of June 30, 2021, there were no Class A ordinary shares issued or outstanding. The Company will account 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 will be 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)
will be classified as temporary equity. At all other times, ordinary shares will be 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, ordinary shares subject to possible redemption will presented at redemption value
as temporary equity, outside of the shareholders’ equity section of the Company’s condensed balance sheets. Net Loss Per Ordinary Share Net loss per share is computed
by dividing net loss by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject
to forfeiture. At June 30, 2021, 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. As a result, diluted loss per share is the same as basic
loss per share for the period presented. 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. OXBRIDGE
ACQUISITION CORP. NOTES
TO CONDENSED FINANCIAL STATEMENTS JUNE
30, 2021 (Unaudited) 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 June 30, 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 In
August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06,
Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s
Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates
the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies
the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard
also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s
own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for
all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis,
with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would
have on its financial position, results of operations or cash flows. Management
does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material
effect on the Company’s financial statements. |
