OXBRIDGE RE HOLDINGS LIMITED — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; balance-sheet comparisons are to December 31, 2023. Financial statement amounts below are in U.S. dollars, thousands, unless stated otherwise. Unaudited.
Business context
Oxbridge is a Cayman Islands specialty property-and-casualty reinsurer focused primarily on fully collateralized catastrophe reinsurance in the U.S. Gulf Coast, especially Florida. Its subsidiaries also operate a reinsurance sidecar and SurancePlus, which develops tokenized reinsurance offerings. The company reports one operating segment.
Financial performance
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Net premiums earned | $549 | $0 |
| Net investment and other income | $62 | $89 |
| Unrealized gain (loss) on other investments | $(688) | $381 |
| Change in fair value of equity securities | $(89) | $76 |
| Total revenue | $(125) | $546 |
| Total expenses | $548 | $404 |
| Net income (loss) | $(905) | $142 |
| Basic and diluted EPS | $(0.15) | $0.02 |
| Operating cash flow | $119 | $(140) |
The quarter’s investment remeasurement, principally a $688,000 unrealized loss on Jet.AI, drove the swing to a net loss despite earned premiums and no reported catastrophe losses. The company reported a 0% loss ratio, 10.9% acquisition-cost ratio, 99.8% expense ratio and 99.8% combined ratio. Total revenue was negative, so conventional revenue-based margin comparisons are not informative.
Financial position and liquidity
- At March 31, total assets were $7.263 million, down from $8.253 million; shareholders’ equity was $4.499 million, down from $5.332 million.
- Cash and cash equivalents were $532,000; restricted cash was $3.780 million. Combined cash and restricted cash was $4.312 million, versus $3.745 million at year-end. Restricted cash is held in trust to support reinsurance obligations and is not equivalent to unrestricted operating cash.
- Notes payable were $2.036 million: $118,000 to noteholders and $1.918 million to DeltaCat Re tokenholders. Total liabilities were $2.764 million. Operating lease liabilities were $148,000.
- The $100,000 Jet.AI loan receivable was repaid at maturity on March 11, 2024; Oxbridge received $141,000, reported as investing cash proceeds and interest/gain.
- Management said operating cash flows, cash, investment income and underwriting activity should meet liquidity needs for the foreseeable future, while noting potential future equity offerings. No quantified earnings or revenue guidance was provided.
Material changes, outlook and risks
- Earned premiums rose from zero in Q1 2023 because reinsurance contracts were in force in the current quarter. Management attributed the prior-year zero to premiums having been accelerated before that quarter following Hurricane Ian losses. No losses were incurred in either comparison quarter; the reported loss reserve was zero at March 31.
- General and administrative expense increased to $488,000 from $404,000, primarily due to professional and legal expenses. The Jet.AI investment decline reduced other investments to $1.790 million from $2.478 million; equity securities declined to $284,000 from $680,000, in part following sales.
- SurancePlus commenced an EpsilonCat Re digital-token offering in March 2024, with an initial price of $10 per participation share and an offering of up to one million shares at launch. Proceeds are intended to fund participating notes and collateralized reinsurance. Holders have contractual rights under the investment contract, not equity ownership in SurancePlus; the securities are unregistered and offered under exemptions.
- Management cautioned that results can fluctuate with investment valuations, opportunistic underwriting, and hurricane season (June–November). The company has limited diversification in underwriting exposure, and catastrophic events could materially affect results. Jet.AI fair-value changes can create significant earnings and equity volatility.
- Other risks include uncertainty in loss estimates and claims reporting, counterparty and broker credit risk, and potential U.S. tax exposure if authorities determine the company is engaged in a U.S. trade or business. Subsidiaries must maintain at least $500,000 in regulatory net worth; each exceeded that minimum at quarter-end.
- The filing reported no material changes to risk factors, no current litigation or arbitration, no off-balance-sheet arrangements, and no material change in internal control over financial reporting. Management stated disclosure controls were effective.
Key facts for investors to verify
- How Jet.AI’s market value and future remeasurements may affect reported earnings and equity.
- The amount and terms of EpsilonCat Re proceeds actually raised, and the associated obligations and reinsurance exposure.
- Availability of unrestricted liquidity, given that most reported cash is restricted collateral.
- Catastrophe exposure, treaty concentration, claims development and the adequacy of zero loss reserves as risks emerge.
- The filing’s restricted-cash change appears inconsistent: balance-sheet figures rise from $3.250 million to $3.780 million, while MD&A states an increase of $604,000. Confirm the correct change against the underlying filing data.