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Name | Symbol | Market | Type |
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Oxbridge Acquisition Corporation | NASDAQ:OXACU | NASDAQ | Trust |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
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0.00 | 0.00% | 0 | - |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
(State
or other jurisdiction of incorporation) |
(Commission File No.) |
(I.R.S.
Employer Identification No.) |
(Address of Principal Executive Offices)
(Registrant’s Telephone Number)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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 13(a) of the Exchange Act.
Item 1.01 | Entry into a Material Definitive Agreement. |
On September 11, 2023, Jet.AI Inc. (the “Company”) entered into a binding term sheet (“Bridge Agreement”) with eight investors to provide the Company $500,000 of short-term bridge financing pending its receipt of funds from its other existing financing arrangements. During the month of September, the Company had engaged in discussions with numerous third parties to secure short-term bridge funding but was not offered terms it found acceptable. Rather, certain related parties of the Company and other parties agreed to provide the Company this financing on substantially better material terms than it had received from unaffiliated third parties.
The Bridge Agreement was entered into with, and funding was provided by, Michael Winston, the Executive Chairman of the Board and Interim Chief Executive Officer, Wrendon Timothy, a member of the Board and all three Committees of the Board, William Yankus, a member of the Board and two of its Committees, and Oxbridge RE Holdings Limited, a significant shareholder of the Company for which Mr. Timothy serves as a director and officer, as well as the four other investors named in the Bridge Agreement attached hereto.
Given Mr. Winston’s dual role as a participant in the negotiations with third parties and his participation in the bridge financing itself, for avoidance of doubt, he has agreed to waive any right to receive accrued interest on the principal amount of his Note, as well as any redemption premium or any increase in the principal amount of his Note in connection with an event of default.
The Company’s Audit Committee pursuant to its Charter and the full Board, including a majority of disinterested directors, unanimously approved the Agreement, in each case finding that the Agreement was in the best interests of the Company and its stockholders.
The Bridge Agreement provides for the issuance of Notes in an aggregate principal amount of $625,000, reflecting a 20% original issue discount. The Notes bear interest at 5% per annum and mature on March 11, 2024. The Company is required to redeem the Notes with 100% of the proceeds of any equity or debt financing at a redemption premium of 110% of the principal amount of the Notes. The Company anticipates redeeming the Notes in full with proceeds expected to be received over the next several months from existing financing arrangements.
An event of default under the Notes includes failing to redeem the Notes as provided above and other typical bankruptcy events of the Company. In an event of default, the outstanding principal amount of the Notes will increase by 120%, and each investor may convert its Note into shares of common stock of the Company at the conversion price set forth in the Bridge Agreement attached hereto, with registration rights associated with those shares.
A copy of the Bridge Agreement and the Waiver are filed herewith as Exhibits 10.1 and 10.2, and the foregoing descriptions of the Bridge Agreement and the Waiver are qualified in their entirety by reference thereto.
This report 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 prospectus, regarding the proposed the Company’s future financial performance and the 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 the Company that may cause the Company’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, the Company 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 prospectus. The Company 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 the Company.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit Number | Description | |
10.1 | Bridge Agreement dated September 11, 2023 between Jet.AI Inc. and the Investors named therein. | |
10.2 | Waiver of certain rights under the Bridge Agreement by Michael Winston | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
JET.AI INC. | ||
By: | /s/ Michael Winston | |
Name: | Michael Winston | |
Title: | Executive Chairman and Interim Chief Executive Officer | |
Date: September 15, 2023 |
Exhibit 10.1
September 11, 2023
(the “Effective Date”)
This Binding Term Sheet (the “Term Sheet”) constitutes a commitment by the parties hereto to negotiate in good faith and to enter into one or more senior secured promissory notes (each a “Note”) in the amounts and upon the terms set forth herein. The terms and conditions of the Notes described below are not limited to those set forth herein. Matters that are not covered by the provisions hereof are subject to the approval and mutual agreement of the parties.
Senior Secured Promissory Note
Company | Jet.AI Inc. (Nasdaq: JTAI) |
Investors | As set forth in the signatures pages hereto. |
Securities | Senior Secured Promissory Notes |
Aggregate Principal Amount | $625,000 (20% OID); |
Aggregate Purchase Price | $500,000 funded upon the execution of this Term Sheet (“Closing”), with each Investor funding the amount set forth on the signature pages hereto by wire transfer of same day funds to the account specified in Exhibit A. |
Interest Rate | 5.0% per annum |
Maturity Date | 6 months from Closing, at which time the then outstanding Aggregate Principal Amount under the Notes shall be paid in full. |
Redemption | 100% of the proceeds from any equity or debt financing shall be used to repay the outstanding Principal Amount of the Notes, on a pro rata basis, so long as any Notes are outstanding. The Company shall pay a redemption premium equal to 110.0% (the “Redemption Premium”) of the Principal Amount being redeemed. |
Event of Default | Upon an Event of Default as further outlined in the legal Documentation, the outstanding Principal Amount of the Notes shall increase by 120% and each Investor may convert the Notes into common stock of the Company at the lower of (a) the Minimum Price to be determined by the parties and set forth in the Documentation (the “Fixed Conversion Price”) or (b) the lowest daily volume weighted average price reported by Bloomberg (“VWAP”) of the Common Stock during the ten (10) business days prior to the conversion date (collectively, the “Conversion Price”). For avoidance of doubt, an Event of Default shall include, without limitation, the failure to comply with the Redemption and Covenants provisions of this Term Sheet, which failure has not been cured in 30 days, as well as typical bankruptcy events of the Company.
If the daily VWAP of the common stock is below $1.00 for 10 consecutive trading days, the Conversion Price shall be 95% of the lowest daily VWAP ten (10) days before conversion date. |
Ownership Limitation | No Investor shall be able to convert the Note into an amount that would result in such Investor (or its affiliates) beneficially owning more than 4.99% of the outstanding shares of the Company unless such investor beneficially owned greater than 4.99% of the outstanding shares of the Company on the Effective Date. |
Covenants | The Company agrees so long as any amounts are outstanding under the Notes, the Company will not enter any variable rate financings with another party unless such financing will be used to redeem the Notes under the terms hereof. |
Documentation | Promissory Notes. Securities Purchase Agreement. |
Registration | Upon an Event of Default, the Company shall include on any Registration Statement the shares underlying the Event of Default conversion. |
Legal Doc Prep Fee | To be paid by the Company. |
Binding Agreement: The parties hereto acknowledge the binding nature of this Term Sheet and agree to be bound by the obligations set forth herein from the Effective Date. The parties hereto agree to negotiate in good faith, using all reasonable best efforts, to finalize and enter into the Documentation as promptly as practicable, unless the Company has repaid the Notes in full in accordance with the Redemption provisions set forth above prior thereto (a “Full Pay-off”). Upon a Full Pay-off, this Term Sheet and any obligations arising hereunder shall terminate and the parties shall each be released of their obligations set forth herein.
IN WITNESS, WHEREOF, Company has caused this Term Sheet to be signed in its name by its duly authorized officer this 11th day of September 2023 (the “Effective Date”).
Jet.AI Inc. | ||
10845 Griffith Peak Dr. Suite 200 | ||
Las Vegas, NV 89135 | ||
By: | /s/ Mike Winston | |
Michael D. Winston | ||
Executive Chairman and | ||
Interim Chief Executive Officer |
Accepted and Agreed: | ||
Investor: Michael Winston | ||
By: | /s/ Mike Winston | |
Investor Funding Amount: $50,000 | ||
Investor Principal Amount: $62,500 | ||
Investor: Wrendon Timothy | ||
By: | /s/ Wrendon Timothy | |
Name: | Wrendon Timothy | |
Title: | self | |
Investor Funding Amount: $50,000 | ||
Investor Principal Amount: $62,500 | ||
Investor: Bill Yankus | ||
By: | /s/ Bill Yankus | |
Name: | William Yankus | |
Title: | Principal | |
Investor Funding Amount: $25,000 | ||
Investor Principal Amount: $31,250 | ||
Investor: Oxbridge Re Holdings Limited | ||
By: | /s/ Wrendon Timothy | |
Name: | Wrendon Timothy | |
Title: | Chief Financial Officer | |
Investor Funding Amount: $100,000 Investor Principal Amount: $125,000 |
||
Investor: Jay Madhu | ||
By: | /s/ Jay Madhu | |
Name: | Jay Madhu | |
Title: | Sanjay Madhu | |
Investor Funding Amount: $75,000 | ||
Investor Principal Amount: $93,750 | ||
Investor: Allan Martin | ||
By: | /s/ Allan Martin | |
Name: | Allan Martin | |
Title: | Director | |
Investor Funding Amount: $50,000 | ||
Investor Principal Amount: $62,500 | ||
Investor: Thomas Schreiber | ||
By: | /s/ Thomas Schreiber | |
Name: | Thomas Schreiber | |
Title: | ||
Investor Funding Amount: $50,000 | ||
Investor Principal Amount: $62,500 | ||
Investor: Arvind Reddy | ||
By: | /s/ Arvind Reddy | |
Name: | Arvind Reddy | |
Title: | Manager | |
Investor Funding Amount: $100,000 | ||
Investor Principal Amount: $125,000 |
Exhibit 10.2
Jet.AI Inc.
10845 Griffith Peak Dr.
Suite 200
Las Vegas, Nevada 89135
The other Investors party to the Term Sheet (as defined below)
September 13, 2023
Re: Waiver
Gentlemen:
In connection with the binding Term Sheet, dated September 11, 2023 (the “Term Sheet”), among Jet.AI Inc. (the “Company”), myself and the other Investors set forth in the signature page thereto, I hereby waive any right to received accrued interest on the principal amount of the Note to be issued to me pursuant to the Term Sheet, as well as any Redemption Premium (as defined in the Term Sheet) related to such Note or any increase in the principal amount thereof in connection with an Event of Default (as defined in the Term Sheet).
Sincerely, | ||
/s/ Michael Winston | ||
Michael Winston |
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