UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 1-36346

OXBRIDGE RE HOLDINGS LIMITED

(Exact name of registrant as specified in its charter)

Cayman Islands

98-1150254

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

Suite 201
42 Edward Street, Georgetown
P.O. Box 469

Grand Cayman, Cayman Islands

KY1-9006

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (345) 749-7570

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “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 13(a) of the Exchange Act. ______

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of November 13, 2024; 6,226,259 ordinary shares, par value $0.001 per share, were outstanding.

OXBRIDGE RE HOLDINGS LIMITED

INDEX

		Page

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets September 30, 2024 (unaudited) and December 31, 2023	3

	Consolidated Statements of Operations Three and Nine Months Ended September 30, 2024 and 2023 (unaudited)	4

	Consolidated Statements of Cash Flows Nine Months Ended September 30, 2024 and 2023 (unaudited)	5

	Consolidated Statements of Changes in Shareholders’ Equity Three and Nine Months Ended September 30, 2024 and 2023 (unaudited)	7

	Notes to the Consolidated Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35

Item 4.	Controls and Procedures	35

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	36

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 3.	Defaults Upon Senior Securities	36

Item 4.	Mine Safety Disclosures	36

Item 5.	Other Information	36

Item 6.	Exhibits	36

	Signatures	37

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Consolidated Balance Sheets

(expressed in thousands of U.S. Dollars, except per share and share amounts)

	At September 30, 2024			At December 31, 2023
	(Unaudited)
Assets
Investments:
Equity securities, at fair value (cost: $1,563 and $1,926)	$	185		$	680
Cash and cash equivalents		1,409			495
Restricted cash and cash equivalents		3,412			3,250
Premiums receivable		1,365			977
Other investments		541			2,478
Loan receivable		-			100
Due from related party		63			63
Deferred policy acquisition costs		175			101
Operating lease right-of-use assets		100			9
Prepayment and other assets		72			96
Property and equipment, net		1			4
Total assets	$	7,323		$	8,253

Liabilities and Shareholders’ Equity

Notes payable to noteholders	$	118		$	118
Notes payable to Epsilon / DeltaCat Re Tokenholders		1,485			1,523
Unearned premium reserve		1,586			915
Operating lease liabilities		100			9
Accounts payable and other liabilities		383			356
Total liabilities		3,672			2,921

Shareholders’ equity:
Ordinary share capital, (par value $0.001, 50,000,000 shares authorized; 6,150,556 and 5,870,234 shares issued and outstanding)	$	6		$	6
Additional paid-in capital		33,325			32,740
Accumulated deficit		(29,680	)		(27,414	)
Total shareholders’ equity		3,651			5,332
Total liabilities and shareholders’ equity	$	7,323		$	8,253

The accompanying Notes to Consolidated Financial Statements are an integral

part of the Consolidated Financial Statements.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)

(expressed in thousands of U.S. Dollars, except per share amounts)


	Three Months Ended September, 30						Nine Months Ended September 30,
	2024			2023			2024			2023


Revenue
Assumed premiums	$	-		$	-		$	2,379		$	2,195
Change in unearned premiums reserve		595			549			(671	)		(1,463	)

Net premiums earned		595			549			1,708			732
SurancePlus management fee income		-			-			312			300
Net investment and other income		62			74			188			242
Interest and gain on redemption of loan receivable		-			-			41			-
Unrealized loss on other investments		(424	)		(6,889	)		(1,937	)		(6,384	)
Change in fair value of equity securities		(28	)		(115	)		(188	)		(34	)

Total revenue		205			(6,381	)		124			(5,144	)

Expenses
Losses and loss adjustment expenses		-			-			-			-
Policy acquisition costs and underwriting expenses		66			60			188			80
General and administrative expenses		432			628			1,486			1,708

Total expenses		498			688			1,674			1,788

Loss before income attributable to noteholders and tokenholders		(293	)		(7,069	)		(1,550	)		(6,932	)

Income attributable to noteholders and tokenholders		(247	)		(231	)		(716	)		(311	)

Net loss	$	(540	)	$	(7,300	)	$	(2,266	)	$	(7,243	)

Loss per share
Basic and Diluted	$	(0.09	)	$	(1.24	)	$	(0.37	)	$	(1.23	)

Weighted-average shares outstanding
Basic and Diluted		6,121,020			5,870,234			6,045,542			5,866,083

The accompanying Notes to Consolidated Financial Statements are an integral

part of the Consolidated Financial Statements.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

(expressed in thousands of U.S. Dollars)


	Nine Months Ended
	September 30,
	2024			2023
Operating activities
Net loss	$	(2,266	)	$	(7,243	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		178			202
Depreciation and amortization		3			5
SurancePlus management fee income		(312	)		(300	)
Change in fair value of other investments		1,937			6,384
Change in fair value of equity securities		188			34
Interest and gain on redemption of loan receivable		(41	)		-
Change in operating assets and liabilities:
Accrued interest and dividend receivable		-			(13	)
Premiums receivable		(388	)		(1,183	)
Due from related party		-			(15	)
Deferred policy acquisition costs		(74	)		(161	)
Prepayment and other assets		24			52
Prepaid offering costs		-			133
Losses payable		-			(1,073	)
Other liabilities Cat Re Tokenholders		(1,195	)		311
Unearned premiums reserve		671			1,463
Accounts payable and other liabilities		27			48

Net cash used in operating activities	$	(1,248	)	$	(1,356	)

Investing activities
Purchase of property and equipment		-			(5	)
Proceeds (funding) of loan receivable		141			(100	)
Proceeds from sale of equity securities		307			-
Net cash provided by/ (used in) investing activities	$	448		$	(105	)

Financing activities
Proceeds from issuance of ordinary shares		407
Partial redemption of notes payable to noteholders		-			(98	)
Net proceeds from the issuance of Epsilon/ Delta Cat Re tokens		1,469			1,280
Net cash provided by financing activities	$	1,876		$	1,182

(continued)

The accompanying Notes to Consolidated Financial Statements are an integral

part of the Consolidated Financial Statements.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Consolidated Statements of Cash Flows, continued

(Unaudited)

(expressed in thousands of U.S. Dollars)


	Nine Months Ended
	September 30,
	2024		2023

Cash and cash equivalents, and restricted cash and cash equivalents:
Net change during the period		1,076		(279	)
Balance at beginning of period		3,745		3,928

Balance at end of period	$	4,821		3,649

Non-cash investing activities
Right-of-use lease asset obtained in exchange for operating lease liabilities	$	124		-

The accompanying Notes to Consolidated Financial Statements are an integral

part of the Consolidated Financial Statements.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Consolidated Statements of Changes in Shareholders’ Equity (unaudited)

Three Months and Nine Months Ended September 30, 2024 and 2023

(expressed in thousands of U.S. Dollars, except share amounts)


	Ordinary Share Capital				Additional Paid-in		Accumulated			Total Shareholders’
	Shares		Amount		Capital		Deficit			Equity

Balance at December 31, 2022		5,769,587		6		32,482		(17,499	)		14,989
Net income for the period		-		-		-		142			142
Stock-based compensation		-		-		54		-			54
Issuance of restricted stock		96,647		-		-		-			-
Balance at March 31, 2023		5,866,234		6		32,536		(17,357	)		15,185
Net loss for the period		-		-		-		(85	)		(85	)
Stock-based compensation		4,000		-		55		-			55
Balance at June 30, 2023		5,870,234		6		32,591		(17,442	)		15,155
Net loss for the period		-		-		-		(7,300	)		(7,300	)
Stock-based compensation		-		-		93		-			93
Balance at September 30, 2023		5,870,234		6		32,684		(24,742	)		7,948

Balance at December 31, 2023		5,870,234		6		32,740		(27,414	)		5,332
Net loss for the period		-		-		-		(905	)		(905	)
Stock-based compensation		-		-		72		-			72
Issuance of restricted stock		136,427		-		-		-			-
Balance at March 31, 2024		6,006,661		6		32,812		(28,319	)		4,499
Net loss for the period		-		-		-		(821	)		(821	)
Stock-based compensation		-		-		34		-			34
Issuance of ordinary shares		29,918		-		75		-			75
Balance at June 30, 2024		6,036,579		6		32,921		(29,140	)		3,787
Balance		6,036,579		6		32,921		(29,140	)		3,787
Net loss for the period		-		-		-		(540	)		(540	)
Net income (loss) for the period		-		-		-		(540	)		(540	)
Stock-based compensation		-		-		72		-			72
Issuance of ordinary shares		113,977		-		332		-			332
Balance at September 30, 2024		6,150,556		6		33,325		(29,680	)		3,651
Balance		6,150,556		6		33,325		(29,680	)		3,651

The accompanying Notes to Consolidated Financial Statements are an integral

part of the Consolidated Financial Statements.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2024

1. ORGANIZATION AND BASIS OF PRESENTATION

(a)

Organization

Oxbridge Re Holdings Limited (the “Company”) was incorporated as an exempted company on April 4, 2013 under the laws of the Cayman Islands. The Company directly owns 100% of the equity interest in Oxbridge Reinsurance Limited, an exempted entity incorporated on April 23, 2013 under the laws of the Cayman Islands and for which a Class “C” Insurer’s license was granted on April 29, 2013 under the provisions of the Cayman Islands Insurance Law. The Company also indirectly owns 80% of the equity interest in Oxbridge Re NS, an entity incorporated as an exempted company on December 22, 2017 under the laws of the Cayman Islands to function as a reinsurance sidecar facility and to increase the underwriting capacity of Oxbridge Reinsurance Limited. The Company also indirectly owns 80% of the equity interest in SurancePlus Inc. (“SurancePlus”), an entity incorporated as a business company on December 19, 2022 under the laws of the British Virgin Islands to issue digital securities. The Company and its subsidiaries (collectively “Oxbridge Re”) businesses are as follows: SurancePlus is a Web3-focused subsidiary that currently leverages blockchain technology to democratize access to high-return reinsurance contracts via digital securities; Oxbridge Reinsurance Limited is a licensed reinsurance subsidiary that provides reinsurance business solutions primarily to property and casualty insurers in the Gulf Coast region of the United States; and Oxbridge Re NS is a licensed reinsurance SPV/side car that provides third-party investors with access to reinsurance contracts with returns uncorrelated to the financial markets. The Company operates as a single business segment through its subsidiaries. The Company’s headquarters and principal executive offices are located at Suite 201, 42 Edward Street, George Town, Grand Cayman, Cayman Islands, and have their registered offices at P.O. Box 309, Ugland House, Grand Cayman, Cayman Islands.

The Company’s ordinary shares and warrants are listed on The NASDAQ Capital Market under the symbols “OXBR” and “OXBRW,” respectively.

(b)

Basis of Presentation and Consolidation

The accompanying unaudited, consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, and the Securities and Exchange Commission (“SEC”) rules for interim financial reporting. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. However, in the opinion of management, the accompanying interim consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the Company’s consolidated financial position as of September 30, 2024 and the consolidated results of operations and cash flows for the periods presented. The consolidated results of operations for interim periods are not necessarily indicative of the results of operations to be expected for any subsequent interim period or for the fiscal year ended December 31, 2024. The accompanying unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023 included in the Company’s Form 10-K, which was filed with the SEC on March 26, 2024.

Uses of Estimates: In preparing the interim unaudited consolidated financial statements, management was required to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the financial reporting date and throughout the periods being reported upon. Certain of the estimates result from judgments that can be subjective and complex and consequently actual results may differ from these estimates, which would be reflected in future periods.

Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of the reserve for losses and loss adjustment expenses (if any), which may include amounts estimated for claims incurred but not yet reported. The Company uses various assumptions and actuarial data it believes to be reasonable under the circumstances to make these estimates. In addition, accounting policies specific to valuation of investments involve significant judgments and estimates material to the Company’s consolidated financial statements. Although considerable variability is likely to be inherent in these estimates, management believes that the amounts provided are reasonable. These estimates are continually reviewed and adjusted if necessary. Such adjustments are reflected in current operations.

The Company consolidates in these consolidated financial statements the results of operations and financial position of all voting interest entities (“VOE”) in which the Company has a controlling financial interest and all variable interest entities (“VIE”) in which the Company is considered to be the primary beneficiary. The consolidation assessment, including the determination as to whether an entity qualifies as a VIE or VOE, depends on the facts and circumstances surrounding each entity.

All significant intercompany balances and transactions have been eliminated.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2024

2. SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

SurancePlus Inc’s incentive, technology, origination and management (“ITOM”) fee income represents fee income related to the completion of the EpsilonCat tokenized reinsurance securities as well as placement of the underlying insurance policies. The Company recognizes the associated revenue at the time of the placement of the underlying insurance policies as the performance obligation is satisfied at that time.

Cash and cash equivalents: Cash and cash equivalents are comprised of cash and short- term investments with original maturities of three months or less.

Restricted cash and cash equivalents: Restricted cash and cash equivalents represent funds held in accordance with the Company’s trust agreements with ceding insurers and trustees, which requires the Company to maintain collateral with a market value greater than or equal to the limit of liability, less unpaid premium.

Investments: The Company from time to time invests in fixed-maturity debt securities and equity securities, and for which its fixed-maturity debt securities are classified as available-for-sale. The Company’s available for sale debt investments are carried at fair value with changes in fair value included as a separate component of accumulated other comprehensive income (loss) in shareholders’ equity. For the Company’s investment in equity securities, and for the Company’s investment in Jet.AI classified as “other investments”, the changes in fair value are recorded within the consolidated statements of operations. At September 30, 2024 and December 31, 2023 the Company did not own any fixed maturity debt securities.

Unrealized gains or losses are determined by comparing the fair market value of the securities with their cost or amortized cost. Realized gains and losses on investments are recorded on the trade date and are included in the consolidated statements of operations. The cost of securities sold is based on the specified identification method. Investment income is recognized as earned and discounts or premiums arising from the purchase of debt securities are recognized in investment income using the interest method over the remaining term of the security.

Fair value measurement: GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under GAAP are as follows:

Level 1	Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;

Level 2	Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and

Level 3	Inputs that are unobservable.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2024

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair value measurement (cont’d)

Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. For fixed maturity debt securities, inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, broker quotes for similar securities and other factors. The fair value of investments in stocks and exchange-traded funds is based on the last traded price. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Company’s investment custodians and management. The investment custodians consider observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant markets.

Deferred policy acquisition costs (“DAC”): Policy acquisition costs consist of brokerage fees, federal excise taxes and other costs related directly to the successful acquisition of new or renewal insurance contracts and are deferred and amortized over the terms of the reinsurance agreements to which they relate. The Company evaluates the recoverability of DAC by determining if the sum of future earned premiums and anticipated investment income is greater than the expected future claims and expenses. If a loss is probable on the unexpired portion of policies in force, a premium deficiency loss is recognized.

Offering Expenses:. During the three and nine-month period ended September 30, 2024, the Company recognized in the consolidated statements of operations $27,000 and $167,000, respectively, of offering expenses in relation to the offering of Epsilon Cat Re digital securities issuable by the Company’s subsidiary, SurancePlus Inc. (See Note 6).

In accordance with the terms of the equity distribution agreement with Maxim, we intend to offer and sell ordinary shares having an aggregate offering price of up to $6.3 million from time to time. (See Note 9).

Reserves for losses and loss adjustment expenses: The Company determines its reserves for losses and loss adjustment expenses, if any, on the basis of the claims reported by the Company’s ceding insurers and for losses incurred but not reported (“IBNR”), management uses the assistance of an independent actuary. The reserves for losses and loss adjustment expenses represent management’s best estimate of the ultimate settlement costs of all losses and loss adjustment expenses. Management believes that the amounts are adequate; however, the inherent impossibility of predicting future events with precision, results in uncertainty as to the amount which will ultimately be required for the settlement of losses and loss expenses, and the differences could be material. Adjustments are reflected in the consolidated statements of operations in the period in which they are determined.

Loss experience refund payable: Certain contracts may include retrospective provisions that adjust premiums or result in profit commissions in the event losses are minimal or zero. In accordance with GAAP, the Company will recognize a liability in the period in which the absence of loss experience obligates the Company to pay cash or other consideration under the contracts. On the contrary, the Company will derecognize such liability in the period in which a loss experience arises. Such adjustments to the liability, which accrue throughout the contract terms, will reduce the liability should a catastrophic loss event covered by the Company occur.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2024

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Premiums assumed: The Company records premiums assumed, net of loss experience refunds, as earned pro-rata over the terms of the reinsurance agreements, or period of risk, where applicable, and the unearned portion at the consolidated balance sheet date is recorded as unearned premiums reserve. A reserve is made for estimated premium deficiencies to the extent that estimated losses and loss adjustment expenses exceed related unearned premiums. Investment income is not considered in determining whether or not a deficiency exists.

Subsequent adjustments of premiums assumed, based on reports of actual premium by the ceding companies, or revisions in estimates of ultimate premium, are recorded in the period in which they are determined. Such adjustments are generally determined after the associated risk periods have expired; in which case the premium adjustments are fully earned when assumed.

Certain contracts allow for reinstatement premiums in the event of a full limit loss prior to the expiration of the contract. A reinstatement premium is not due until there is a full limit loss event and therefore, in accordance with GAAP, the Company records a reinstatement premium as written only in the event that the reinsured incurs a full limit loss on the contract and the contract allows for a reinstatement of coverage upon payment of an additional premium. For catastrophe contracts which contractually require the payment of a reinstatement premium equal to or greater than the original premium upon the occurrence of a full limit loss, the reinstatement premiums are earned over the original contract period. Reinstatement premiums that are contractually calculated on a pro-rata basis of the original premiums are earned over the remaining coverage period.

Unearned Premiums Ceded: The Company may reduce the risk of future losses on business assumed by reinsuring certain risks and exposures with other reinsurers (retrocessionaires). The Company remains liable to the extent that any retrocessionaire fails to meet its obligations and to the extent that the Company does not hold sufficient security for their unpaid obligations.

Ceded premiums are written during the period in which the risk is incepted and are expensed over the contract period in proportion to the period of protection. Unearned premiums ceded consist of the unexpired portion of the reinsurance obtained. There were no unearned premiums ceded at September 30, 2024 or December 31,2023.

Uncertain Income Tax Positions: The authoritative GAAP guidance on accounting for, and disclosure of, uncertainty in income tax positions requires the Company to determine whether an income tax position of the Company is more likely than not to be sustained upon examination by the relevant tax authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. For income tax positions meeting the more likely than not threshold, the tax amount recognized in the consolidated financial statements, if any, is reduced by the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant taxing authority. The application of this authoritative guidance has had no effect on the Company’s consolidated financial statements because the Company had no uncertain tax positions at September 30, 2024.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2024

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Loss Per Share: Basic loss per share has been computed on the basis of the weighted-average number of ordinary shares outstanding during the periods presented. Diluted loss per share is computed based on the weighted-average number of ordinary shares outstanding and reflects the assumed exercise or conversion of diluted securities, such as stock options and warrants, computed using the treasury stock method.

Share-Based Compensation: The Company accounts for stock-based compensation under the fair value recognition provisions of GAAP which requires the measurement and recognition of compensation for all stock-based awards made to employees and directors, including stock options and restricted stock issuances based on estimated fair values. The Company measures compensation for restricted stock based on the price of the Company’s ordinary shares at the grant date. Determining the fair value of stock options at the grant date requires significant estimation and judgment. From time to time, the Company uses an option-pricing model (Black-Scholes option pricing model) to assist in the calculation of fair value for stock options. When estimating the expected volatility, the Company takes into consideration the historical volatility of entities similar to itself. The Company considers factors such as an entity’s industry, stage of life cycle, size and financial leverage when selecting similar entities. The Company may use a sample peer group of companies in the reinsurance industry and/or the Company’s own historical volatility in determining the expected volatility.

Additionally, the Company uses the guidance in the SEC’s Staff Accounting Bulletin No. 107 to determine the estimated life of options issued and has assumed no forfeitures during the life of the options.

The Company uses the straight-line attribution method for all grants that include only a service condition. Compensation expenses related to all awards is included in general and administrative expenses.

Accounting Updates:

From time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the effect of recently issued standards that are not yet effective will not have a material effect on its consolidated financial position or results of operations upon adoption.

Segment Information: Under GAAP, operating segments are based on the internal information that management uses for allocating resources and assessing performance as the source of the Company’s reportable segments. The Company manages its business on the basis of one operating segment, Property and Casualty Reinsurance, in accordance with the qualitative and quantitative criteria established under GAAP.

Reclassifications: Any reclassifications of prior period amounts have been made to conform to the current period presentation.

3. CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS

	At September 30,		At December 31,
	2024		2023
	(in thousands)

Cash on deposit	$	1,406	$	495
Restricted cash held in trust		3,412		3,250
Total	$	4,818	$	3,745

Cash and cash equivalents are held by large and reputable counterparties in the United States of America and in the Cayman Islands. Restricted cash held in trust is custodied with Truist Bank and is held in accordance with the Company’s trust agreements with the ceding insurers and trustees, which require that the Company provide collateral having a market value greater than or equal to the limit of liability, less unpaid premium.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2024

4. INVESTMENTS

The Company from time to time invests in fixed-maturity debt securities and equity securities, with its fixed-maturity debt securities classified as available-for-sale. At September 30, 2024 and December 31, 2023, the Company did not hold any available-for-sale securities.

There were no sales of equity securities for three months ended September 30, 2024, nor the three- and nine-month periods ended September 30, 2023. Proceeds received, and the gross realized gains and losses from sale of equity securities, for the nine-month period ended September 30, 2024 are as follows:

	Equity securities, Gross proceeds from sales		Equity securities, Gross Realized Gains		Equity securities, Gross Realized Losses
	Gross proceeds from sales		Gross Realized Gains		Gross Realized Losses
	($ in thousands)
Nine Months Ended September 30, 2024
Equity securities	$	307	$	-	$	-

Other Investments

On August 7, 2023, OXAC held an extraordinary general meeting at which the business combination with Jet Token, Inc. was approved by OXAC shareholders. In conjunction with the business combination, OXAC was redomesticated as a Delaware entity, and changed its name to Jet.AI Inc. The business combination was closed on August 10, 2023, and on August 11, 2023, OXAC common stock and warrants began trading on the Nasdaq Global Market under the new ticker symbols JTAI and JTAIW.

The Company’s beneficial interests in Jet. AI’s common stock, public warrants and Series A-1 Preferred Shares are recorded at fair value and are classified in “Other Investments” on the consolidated balance sheets. The fair value calculation of the Company’s beneficial interest in Jet.AI’s common stock and public warrants is dependent on the observable trading prices of JetAI’s common stock and public warrants. The fair value calculation of the Company’s beneficial interest in the Series A-1 Preferred Share is estimated to be the pro-rata original principal amount of the Preferred Share due to the short-term nature.

The Sponsor holds 575 Series A-1 preferred shares with purchase price of $1,000 each, and previously held 2,875,000 ordinary shares along with 4,897,500 warrants. One of the Company’s executive officers is an independent member of Jet.AI’s board. The Company’s wholly-owned licensed reinsurance subsidiary, Oxbridge Reinsurance Limited (“Oxbridge Reinsurance”), was the lead investor in the Sponsor and at June 30, 2024, held the equivalent of 1,423,827 of Jet.AI Inc’s common stock (NASDAQ: JTAI) and 3,094,999 of Jet.AI Inc’s warrants (NASDAQ: JTAIW). On July 29, 2024, the Company’s 3,094,999 warrants were converted into 945,211 of Jet.AI’s common stock in accordance with Jet.AI’s Tender Offer Statement (as amended) as filed with the Securities and Exchange Commission on July 23, 2024. In August 2024, upon the anniversary of Jet.AI’s business combination, the ordinary shares held by the Sponsor became unrestricted and was distributed pro-rata to the Sponsor’s investors. At September 30, 2024, the Company held 2,369,037 of Jet.AI common stock.

As a result of the re-measurement of our investment in Jet.AI, we recognized for the nine months ended September 30, 2024, an unrealized loss of $1,937,000 within our consolidated statements of operations.

Other investments as of September 30, 2024 and December 31, 2023 consist of the following (in thousands):

SCHEDULE OF OTHER INVESTMENTS

	September 30, 2024			December 31, 2023

Jet.AI. Series A-1 Preferred Shares	$	285		$	285
Jet.AI common stock (2022: Class B Ordinary Shares)		256			2,193
Total	$	541		$	2,478

Beginning of year	$	2,478		$	11,423
Unrealized loss on investment in affiliate		(1,937	)		(8,945	)
End of year	$	541		$	2,478

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2024

4. INVESTMENTS (continued)

Assets Measured at Estimated Fair Value on a Recurring Basis

The following table presents information about the Company’s financial assets measured at estimated fair value on a recurring basis that is reflected in the consolidated balance sheets at carrying value. The table indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as of September 30, 2024 and December 31, 2023:


	Fair Value Measurements Using
	(Level 1)		(Level 2)		(Level 3)		Total
As of September 30, 2024	($ in thousands)
Financial Assets:
Cash and cash equivalents	$	1,406	$	-	$	-	$	1,406

Restricted cash and cash equivalents	$	3,412	$	-	$	-	$	3,412

Other investments	$	256	$	-	$	285	$	541

Equity securities	$	185	$	-	$	-	$	185

Total	$	5,259	$	-	$	285	$	5,544


	Fair Value Measurements Using
	(Level 1)		(Level 2)		(Level 3)		Total
As of December 31, 2023	($ in thousands)
Financial Assets:
Cash and cash equivalents	$	495	$	-	$	-	$	495

Restricted cash and cash equivalents	$	3,250	$	-	$	-	$	3,250

Other investments	$	2,193	$	-	$	285	$	2,478

Equity securities	$	680	$	-	$	-	$	680

Total	$	6,618	$	-	$	285	$	6,903

There were no transfers between Levels 1, 2 or 3 during the nine months ended September 30, 2024 and 2023.

The following table provides a reconciliation of changes in fair value of the beginning and ending balances for the other investments classified as Level 3:

	Other
	Investments
	(in thousands)
Fair value of Level 3 other investment at January 1, 2024	$	285
Investment in affiliate		-
Change in valuation inputs or other assumptions		-
Fair value of Level 3 other investment at September 30, 2024	$	285

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2024

5. TAXATION

Under current Cayman Islands law, no corporate entity, including the Company and the subsidiaries, is obligated to pay taxes in the Cayman Islands on either income or capital gains. The Company and Oxbridge Reinsurance Limited have an undertaking from the Governor-in-Cabinet of the Cayman Islands, pursuant to the provisions of the Tax Concessions Law, as amended, that, in the event that the Cayman Islands enacts any legislation that imposes tax on profits, income, gains or appreciations, or any tax in the nature of estate duty or inheritance tax, such tax will not be applicable to the Company and Oxbridge Reinsurance Limited or their operations, or to the ordinary shares or related obligations, until April 23, 2033 and May 17, 2033, respectively.

The Company and its subsidiaries intend to conduct substantially all of their operations in the Cayman Islands in a manner such that they will not be engaged in a trade or business in the U.S. However, because there is no definitive authority regarding activities that constitute being engaged in a trade or business in the U.S. for federal income tax purposes, the Company cannot assure that the U.S. Internal Revenue Service will not contend, perhaps successfully, that the Company or its subsidiary is engaged in a trade or business in the U.S. A foreign corporation deemed to be so engaged would be subject to U.S. federal income tax, as well as branch profits tax, on its income that is treated as effectively connected with the conduct of that trade or business unless the corporation is entitled to relief under an applicable tax treaty.

6. VARIABLE INTEREST ENTITIES

Oxbridge Re NS. On December 22, 2017, the Company established Oxbridge Re NS, a Cayman domiciled and licensed special purpose insurer, formed to provide additional collateralized capacity to support Oxbridge Reinsurance Limited’s reinsurance business. In respect of the debt issued by Oxbridge Re NS to investors, Oxbridge Re NS has entered into a retrocession agreement with Oxbridge Reinsurance Limited effective September 1, 2020. Under this agreement, Oxbridge Re NS receives a quota share of Oxbridge Reinsurance Limited’s catastrophe business. Oxbridge Re NS is a non-rated insurer and the risks have been fully collateralized by way of funds held in trust for the benefit of Oxbridge Reinsurance Limited. Oxbridge Re NS is able to provide investors with access to natural catastrophe risk backed by the distribution, underwriting, analysis and research expertise of Oxbridge Re.

The Company has determined that Oxbridge Re NS meets the definition of a VIE as it does not have sufficient equity capital to finance its activities. The Company concluded that it is the primary beneficiary and has consolidated the subsidiary upon its formation, as it owns 80% of the voting shares, 80% of the issued share capital and has a significant financial interest and the power to control the activities of Oxbridge Re NS that most significantly impacts its economic performance. The Company has no other obligation to provide financial support to Oxbridge Re NS. Neither the creditors nor beneficial interest holders of Oxbridge Re NS have recourse to the Company’s general credit.

Upon issuance of a series of participating notes by Oxbridge Re NS, all of the proceeds from the issuance are deposited into collateral accounts, to fund any potential obligation under the reinsurance agreements entered into with Oxbridge Reinsurance Limited underlying such series of notes. The outstanding principal amount of each series of notes generally is expected to be returned to holders of such notes upon the expiration of the risk period underlying such notes, unless an event occurs which causes a loss under the applicable series of notes, in which case the amount returned is expected to be reduced by such noteholder’s pro rata share of such loss, as specified in the applicable governing documents of such notes. In addition, holders of such notes are generally entitled to interest payments, payable annually, as determined by the applicable governing documents of each series of notes.

In addition, holders of such notes are generally entitled to interest payments, payable annually, as determined by the applicable governing documents of each series of notes.

The Company receives an origination and structuring fee in connection with the formation, operation and management of Oxbridge Re NS.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2024

6. VARIABLE INTEREST ENTITIES (continued)

Notes Payable to Series 2020-1 noteholders

Oxbridge Re NS entered into a retrocession agreement with Oxbridge Reinsurance Ltd on June 1, 2020 and issued $216,000 of participating notes which provides quota share support for Oxbridge Re’s global property catastrophe excess of loss reinsurance business. The participating notes have been assigned Series 2020-1 and matured on June 1, 2023. Participating notes totaling $98,000 were redeemed during the year ended December 31, 2023 resulting in a balance due of $118,000 at September 30, 2024 and December 31, 2023.

The income from Oxbridge Re NS operations that are attributable to the participating notes noteholders for the nine-months ended September 30, 2024 and 2023 was $0.

SurancePlus Inc.

SurancePlus Inc., a indirect 80% owned subsidiary of Oxbridge Re Holdings Limited, was incorporated as a British Virgin Islands Business Company on December 19, 2022 for the purposes of tokenizing reinsurance contracts underwritten by its affiliated licensed reinsurer, Oxbridge Re NS.

On March 27, 2023, the Company and SurancePlus Inc. (“SurancePlus”), issued a press release announcing the commencement of an offering by SurancePlus of DeltaCat tokenized reinsurance securities (the “Tokens”), which represent Series DeltaCat Preferred Shares of SurancePlus (“Preferred Shares”, and together with the Tokens, the “Securities”). Each digital security or token, which will have a purchase price of $10.00 per Token, will represent one Preferred Share of SurancePlus.

The net proceeds from the offer and sale of the Securities were used by SurancePlus to purchase one or more participating notes of Oxbridge Re NS, and the proceeds from the sale of participating notes were invested in collateralized reinsurance contracts to be underwritten by Oxbridge Re NS. The holders of the digital Securities will generally be entitled to proceeds from the payment of participating notes in the amount of a preferred return of 20% plus an additional 80% of any proceeds in excess of the amount necessary to pay the preferred return.

On June 27, 2023, SurancePlus Inc. completed its private placement (the “Private Placement”) of Series DeltaCat Re Preferred Shares represented by DeltaCat Re Tokens (the “Securities”). On June 27, 2023, SurancePlus entered into subscription agreements with accredited investors and non-U.S. persons in the Private Placement with respect to 229,766 of the Securities at a purchase price of $10.00 per token for aggregate gross proceeds of $2,297,660. SurancePlus also previously entered into subscription agreements for and sold 15,010 of the Securities between April 5, 2023 and May 18, 2023 for gross proceeds of $150,100, also at a purchase price of $10.00 per token. The aggregate amount raised in the Private Placement was $2,447,760 for the issuance of 244,776 Securities of which approximately $1,280,000 was received from third-party investors and approximately $1,167,000 from Oxbridge Re Holdings Limited. Approximately $300,000 and $273,000 of management fees were deducted from the gross proceeds from the third-party investors and the Company, respectively. The tokens were issued on the Avalanche blockchain. Ownership of DeltaCat Re tokenized reinsurance securities indirectly confers fractionalized interests in reinsurance contracts underwritten by Oxbridge Re’s reinsurance subsidiary, Oxbridge Re NS, for the 2023-2024 treaty year.

On March 18, 2024, the Company and its indirect subsidiary SurancePlus Inc. (“SurancePlus”), announced the commencement of an offering by SurancePlus of Participation Shares (the “Securities”) represented by digital tokens to be issued under a 3-year Participation Share Investment Contract (the “PSIC”). The Participation Shares are not shares in SurancePlus and shall have no preemptive right or conversion rights. The Participation Shares solely confer contractual rights against SurancePlus as contained in the PSIC. At the offering’s commencement, up to one million (1,000,000) Participation Shares will be issued, represented by digital tokens labelled “EpsilonCat Re”. The quantity of Participation Shares to be issued in subsequent years of 2025, and 2026, shall be disclosed prior to their issuances. At the start of the offering, the Participation Shares will be offered at an initial price of $10.00 per Participation Share.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2024

6. VARIABLE INTEREST ENTITIES (continued)

On July 11, 2024, SurancePlus completed its private placement (the “Private Placement”) of Participation Shares (the “Securities”) represented by digital tokens issued under a 3-year Participation Share Investment Contract (the “PSIC”). On July 11, 2024, SurancePlus entered into subscription agreements with accredited investors and non-U.S. persons in the Private Placement with respect to 287,705 of the Participation Shares represented by the digital tokens, EpsilonCat Re at a purchase price of $10.00 per Participation Share for aggregate gross proceeds of $2,878,048 of which approximately $1,469,000 was received from third-party investors and approximately $1,409,000 from Oxbridge Re Holdings Limited. Approximately $312,000 and $299,000 of management fees were deducted from the gross proceeds from the third-party investors and Oxbridge Re Holdings Limited, respectively, The tokens were issued on the Avalanche blockchain. Ownership of EpsilonCat Re tokenized Participation Shares indirectly confers fractionalized interests in reinsurance contracts underwritten by Oxbridge Re’s reinsurance subsidiary, Oxbridge Re NS, for the 2024-2025 treaty year. The Participation Shares are not shares in SurancePlus have no preemptive right or conversion rights. The Participation Shares solely confer contractual rights against SurancePlus as contained in the PSIC.

The Securities have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state or other securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state or other securities laws. The Securities were sold in a transaction exempt from registration under the Securities Act and were sold only to persons reasonably believed to be accredited investors in the United States under SEC Rule 506(c) under the Securities Act and outside the United States only to non-U.S. persons in accordance with Regulation S under the Securities Act.

The selected unconsolidated historical financial information and other data presented below is derived from SurancePlus’ standalone unaudited financial statements for the three and nine months ended September 30, 2024 and the balance sheet data as of September 30, 2024.

SCHEDULE OF FINANCIAL STATEMENTS

Statement of Operations Data:	For Three Months Ended			For Nine Months Ended
	September 30, 2024			September 30, 2024
	(Unaudited)			(Unaudited)

Management fee income	$	-		$	612
Underwriting related income		529			1,520
Net investment and other income		9			14
Total revenue	$	539		$	2,146
Expenses	$	(26	)	$	(167	)
Income attributable to tokenholders	$	(483	)	$	(1,384	)
Net income	$	30		$	595

Balance Sheet Data:	At September 30, 2024
	(Unaudited)
	(In thousands)
Total assets	$	4,257
Amounts due to Epsilon / Delta Cat Re Tokenholders		1,801
Total shareholder’s equity		2,456

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2024

7. RESERVE FOR LOSSES AND LOSS ADJUSTMENT EXPENSES

The following table summarizes the Company’s loss and loss adjustment expenses (“LAE”) and the reserve for loss and LAE reserve movements for the nine-month periods ending September 30, 2024 and 2023:

SCHEDULE OF LOSS ADJUSTMENT EXPENSE

		At September 30,		At September 30,
		2024		2023
		(in thousands)

Balance, beginning of period	$	-	$	1,073
Incurred related to:
Current period		-		-
Prior period		-		-
Total incurred		-		1,073
Paid related to:
Current period		-		-
Prior period		-		(1,073	)
Total paid		-		(1,073	)
Balance, end of period	$	-	$	-

When losses occur, the reserves for losses and LAE are typically comprised of case reserves (which are based on claims that have been reported) and IBNR reserves (which are based on losses that are believed to have occurred but for which claims have not yet been reported and include a provision for expected future development on existing case reserves). The Company typically suffers limit losses in the event of a Category 3 or above hurricane making landfall in a populated area where the Company has catastrophe risk exposure. For the nine-month periods ended September 30, 2024 and 2023, the Company has recorded it’s reserves for losses and LAE based on the contractual maximum loss the Company can suffer under the affected contracts.

The uncertainties inherent in the reserving process and potential delays by cedants and brokers in the reporting of loss information, together with the potential for unforeseen adverse developments, may result in the reserve for losses and LAE ultimately being significantly greater or less than the reserve provided at the end of any given reporting period. The degree of uncertainty is further increased when a significant loss event takes place near the end of a reporting period. Reserve for losses and LAE estimates are reviewed periodically on a contract-by-contract basis and updated as new information becomes known. Any resulting adjustments are reflected in income in the period in which they become known.

The Company’s reserving process is highly dependent on the timing of loss information received from its cedants and related brokers.

There were no losses incurred during the nine-month periods ended September 30, 2024 and 2023.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2024

8. LOSS PER SHARE

A summary of the numerator and denominator of the basic and diluted loss per share is presented below (dollars in thousands except per share amounts):

	2024			2023			2024			2023
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023

Numerator:
Net loss	$	(540	)		(7,300	)	$	(2,266	)		(7,243	)

Denominator:
Weighted average shares - basic		6,121,020			5,870,234			6,045,542			5,866,083
Weighted average shares - diluted		6,121,020			5,870,234			6,045,542			5,866,083
Loss per share - basic	$	(0.09	)		(1.24	)	$	(0.37	)		(1.23	)
Loss per share - diluted	$	(0.09	)		(1.24	)	$	(0.37	)		(1.23	)

For the three-month periods ended September 30, 2024 and September 2023 and for the nine-month periods ended September 30, 2024 and September 2023, options to purchase 846,250 ordinary shares and 8,230,700 warrants to purchase an aggregate of 8,230,700 ordinary shares were anti-dilutive due to the net loss during these periods.

GAAP requires the Company to use the two-class method in computing basic loss per share since holders of the Company’s restricted stock have the right to share in dividends, if declared, equally with common shareholders. These participating securities effect the computation of both basic and diluted loss per share.

9. EQUITY

ORDINARY SHARES

There were 6,150,556 and 5,870,234 ordinary shares outstanding at September 30, 2024 and December 31, 2023, respectively.

For the three months ended September 30, 2024, we have sold 113,977 ordinary shares under the ATM program for gross proceeds of $342,525 at an average price of $3.00 per share. After deducting commissions related to the ATM offering of $10,275, the net proceeds we received from the transactions were $332,250.

During the nine months ended September 30, 2024, we sold 143,895 ordinary shares under the ATM program for gross proceeds of $419,663 at an average price of $2.92 per share. After deducting commissions related to the ATM offering of $12,590, the net proceeds we received from the transactions were $407,073. The proceeds from the ATM sales are being used for working capital and other general corporate purposes.

WARRANTS

There were 8,230,700 warrants outstanding at September 30, 2024 and December 31, 2023. One warrant may be exercised to acquire one ordinary share at an exercise price equal to $7.50 per share on or before March 26, 2029. The Company at its option may cancel the warrants in whole or in part, provided that the closing price per ordinary share has exceeded $9.38 for at least ten trading

SEC Form 10-Q filed by Oxbridge Re Holdings Limited