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

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

For the quarterly period ended September 30, 2017

☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
2023

☐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 Islands98-1150254
(Exact name of registrant as specified in its charter)
Cayman Islands98-1150254

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

Strathvale House, 2nd Floor 90 North Church

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

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☒
No ☐

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☒No ☐

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 ☒  
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 ☐No☒

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 10, 2017; 5,733,58714, 2023; 5,870,234 ordinary shares, par value $0.001 per share, were outstanding.


 

OXBRIDGE RE HOLDINGS LIMITED

INDEX

Page
PART I – FINANCIAL INFORMATIONPage
 
Item 1.Financial Statements 3
 
Item 1.		Financial Statements

Consolidated Balance Sheets September 30, 20172023 (unaudited) and December 31, 20162022

 3
 

Consolidated Statements of Income Operations Three and Nine monthsMonths Ended September 30, 20172023 and 20162022 (unaudited)

 4
 
Consolidated Statements of Comprehensive Income Three and Nine months Ended September 30, 2017 and 2016 (unaudited)  5

Consolidated Statements of Cash Flows Nine monthsMonths Ended September 30, 20172023 and 20162022 (unaudited)

 65
 
 

Consolidated Statements of Changes in Shareholders’ Equity Three and Nine monthsMonths Ended September 30, 20172023 and 20162022 (unaudited)

 87
  

Notes to the Consolidated Financial Statements (unaudited)

 98
 
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations 3227
 
Item 3.
Quantitative and Qualitative Disclosures About Market Risk 4338
 
Item 4.
Controls and Procedures 4338
PART II – OTHER INFORMATION
 
Item 1.Legal Proceedings  43
Item 1.Legal Proceedings 
Item 1A.Risk Factors   4338
 
Item 1A.Risk Factors38
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds 4438
 
Item 3.Defaults Upon Senior Securities 4439
 
Item 4.Mine Safety Disclosures 4439
 
Item 5.Other Information   44
Item 5.

Other Information		39
Item 6.Exhibits  44
Item 6.Exhibits 
Signatures   4539
Signatures40

2


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

SUBSIDIARIES

Consolidated Balance Sheets

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

 
 
At September 30, 2017
 
 
At December 31, 2016
 
 
 
(Unaudited)
 
 
 
 
Assets
 
 
 
 
 
 
Investments:
 
 
 
 
 
 
Fixed-maturity securities, available for sale, at fair value (amortized cost: $7,015 and $6,060, respectively)
 $6,997 
  6,051 
Equity securities, available for sale, at fair value (cost: $1,860 and $5,343, respectively)
  1,848 
  4,941 
       Total investments
  8,845 
  10,992 
Cash and cash equivalents
  5,748 
  12,242 
Restricted cash and cash equivalents
  18,496 
  23,440 
Accrued interest and dividend receivable
  43 
  48 
Premiums receivable
  3,887 
  4,038 
Reinsurance recoverable
  4,000 
  - 
Deferred policy acquisition costs
  57 
  88 
Prepayment and other receivables
  97 
  98 
Property and equipment, net
  42 
  54 
  Total assets
 $41,215 
  51,000 
 
    
    
Liabilities and Shareholders’ Equity
    
    
Liabilities:
    
    
Reserve for losses and loss adjustment expenses
 $24,758 
  8,702 
Loss experience refund payable
  - 
  1,470 
Unearned premiums reserve
  2,367 
  3,461 
Accounts payable and other liabilities
  171 
  204 
  Total liabilities
  27,296 
  13,837 
 
    
    
Shareholders’ equity:
    
    
Ordinary share capital, (par value $0.001, 50,000,000 shares authorized; 5,733,587 and 5,916,149 shares issued and outstanding)
  6 
  6 
Additional paid-in capital
  32,068 
  33,034 
(Accumulated Deficit) Retained earnings
  (18,125)
  4,534 
Accumulated other comprehensive loss
  (30)
  (411)
Total shareholders’ equity
  13,919 
  37,163 
Total liabilities and shareholders’ equity
 $41,215 
  51,000 

  At September 30, 2023  At December 31, 2022 
  (Unaudited)    
Assets        
Investments:        
Equity securities, at fair value (cost: $1,926) $608   642 
Cash and cash equivalents  1,801   1,207 
Restricted cash and cash equivalents  1,848   2,721 
Accrued interest and dividend receivable  13   - 
Premiums receivable  1,465   282 
Loan receivable  100   - 
Other Investments  5,039   11,423 
Due from Related Party  60   45 
Deferred policy acquisition costs  161   - 
Operating lease right-of-use assets  35   44 
Prepayment and other assets  62   114 
Prepaid Offering Costs  -   133 
Property and equipment, net  5   5 
Total assets $11,197   16,616 
         
Liabilities and Shareholders’ Equity        
Unearned Premium  1,463   - 
Other Liabilities - Delta Cat Re Token Holders  1,291   - 
Notes payable to noteholders  118   216 
Losses payable  -   1,073 
Operating lease liabilities  35   44 
Accounts payable and other liabilities  342   294 
Total liabilities  3,249   1,627 
         
Shareholders’ equity:        
Ordinary share capital, (par value $0.001, 50,000,000 shares authorized; 5,870,234 and 5,769,587 shares issued and outstanding)  6   6 
Additional paid-in capital  32,684   32,482 
Accumulated Deficit  (24,742)  (17,499)
Total shareholders’ equity  7,948   14,989 
Total liabilities and shareholders’ equity $11,197   16,616 

The accompanying Notes to Consolidated Financial Statements are an integral

part of the Consolidated Financial Statements.

3


OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

SUBSIDIARIES

Consolidated Statements of Income

Operations

(Unaudited)

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

 
 
Three Months Ended
 
 
Nine Months Ended
 
 
 
September 30,
 
 
September 30,
 
 
 
2017
 
 
2016
 
 
2017
 
 
2016
 
 
 
(Unaudited)
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
Assumed premiums
 $- 
  - 
 $18,256 
  15,065 
Premiums ceded
  (733)
  - 
  (880)
  - 
Change in loss experience refund payable
  2,730 
  (2,089)
  1,470 
  (4,465)
Change in unearned premiums reserve
  17,309 
  4,007 
  4,494 
  (3,955)
 
    
    
    
    
Net premiums earned
  19,306 
  1,918 
  23,340 
  6,645 
Net realized investment (losses) gains
  (104)
  122 
  (56)
  256 
Net investment income
  128 
  126 
  341 
  327 
 
    
    
    
    
Total revenue
  19,330 
  2,166 
  23,625 
  7,228 
 
    
    
    
    
Expenses
    
    
    
    
Losses and loss adjustment expenses
  41,400 
  (1,248)
  42,427 
  1,030 
Policy acquisition costs and underwriting expenses
  514 
  83 
  672 
  211 
General and administrative expenses
  370 
  346 
  1,094 
  1,087 
 
    
    
    
    
Total expenses
  42,284 
  (819)
  44,193 
  2,328 
 
    
    
    
    
Net (loss) income
 $(22,954)
  2,985 
 $(20,568)
  4,900 
 
    
    
    
    
 
    
    
    
    

    
    
    
    
Basic (loss) earnings per share
 $(3.97)
  0.50 
 $(3.53)
  0.81 
Diluted (loss) earnings per share
 $(3.97)
  0.50
 
  (3.53)
 0.81 
 
    
    
    
    
Dividends paid per share
 $0.12 
  0.12 
 $0.36 
  0.36 

  2023  2022  2023  2022 
  Three Months Ended September 30,  Nine Months Ended September 30, 
  2023  2022  2023  2022 
             
Revenue                
Assumed premiums  -   -   2,195   705 
Premiums ceded  -   -   -   (60)
Change in unearned premiums reserve  549   591   (1,463)  350 
                 
Net premiums earned  549   591   732   995 
SurancePlus fees income  -   -   300   - 
Net investment and other income  74   53   242   128 
Net realized investment gain  -   -   -   27 
Unrealized loss on other investments  (6,889)  (1,327)  (6,384)  (986)
Change in fair value of equity securities  (115)  (13)  (34)  (355)
                 
Total revenue  (6,381)  (696)  (5,144)  (191)
                 
Expenses                
Losses and loss adjustment expenses  -   1,073   -   1,073 
Policy acquisition costs and underwriting expenses  60   65   80   110 
General and administrative expenses  628   323   1,708   1,050 
                 
Total expenses  688   1,461   1,788   2,233 
                 
Loss before income attributable to noteholders and tokenholders  (7,069)  (2,157)  (6,932)  (2,424)
                 
Income attributable to noteholders and tokenholders  (231)  -   (311)  (43)
                 
Net loss  (7,300)  (2,157)  (7,243)  (2,467)
                 
Loss per share                
Basic and Diluted  (1.24)  (0.37)  (1.23)  (0.43)
                 
Weighted-average shares outstanding                
Basic and Diluted  5,870,234   5,781,587   5,866,083   5,771,506 

The accompanying Notes to Consolidated Financial Statements are an integral

part of the Consolidated Financial Statements.

4


OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

SUBSIDIARIES

Consolidated Statements of Comprehensive Income

Cash Flows

(Unaudited)

(expressed in thousands of U.S. Dollars)

 
 
Three Months Ended
 
 
Nine Months Ended
 
 
 
September 30,
 
 
September 30,
 
 
 
2017
 
 
2016
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (loss) income
 $(22,954)
  2,985 
 $(20,568)
  4,900 
Other comprehensive income:
    
    
    
    
Change in unrealized loss on investments:
    
    
    
    
Unrealized gain arising during the period
  185 
  304 
  325 
  1,281 
Reclassification adjustment for net realized losses (gains) included in net income
  104 
  (122)
  56 
  (256)
 
    
    
    
    
Net change in unrealized loss
  289 
  182 
  381 
  1,025 
 
    
    
    
    
Total other comprehensive income
  289 
  182 
  381 
  1,025 
 
    
    
    
    
Comprehensive (loss) income
 $(22,665)
  3,167 
 $(20,187)
  5,925 

  2023  2022 
  Nine Months Ended 
  September 30, 
  2023  2022 
Operating activities        
Net loss $(7,243)  (2,467)
Adjustments to reconcile net loss to net cash used in operating activities:        
Stock-based compensation  202   96 
Depreciation and amortization  5   3 
Net realized investment gains  -   (27)
SurancePlus fee income  (300)  - 
Change in fair value of other investments  6,384   986 
Change in fair value of equity securities  34   355 
Change in operating assets and liabilities:        
Accrued interest and dividend receivable  (13)  - 
Premiums receivable  (1,183)  (286)
Due from related party  (15)  (3)
Deferred policy acquisition costs  (161)  38 
Prepayment and other assets  52   (56)
Prepaid offering costs  133   - 
Reserve for losses and loss adjustment expenses  (1,073)  1,073 
Other Liablities Delta Cat Re Tokenholders  311   - 
Unearned premiums reserve  1,463   (350)
Accounts payable and other liabilities  48   (44)
         
Net cash used in operating activities $(1,356)  (682)
         
Investing activities        
Purchase of equity securities  -   (1,002)
Purchase of loan receivable  (100)  - 
Proceeds from sale of equity securities  -   626 
Purchase of property and equipment  (5)  - 
         
Net cash used in investing activities $(105)  (376)
         
Financing activities        
Partial redemption of notes payable to noteholders  (98)  - 
Gross proceeds from the issuance of Delta Cat Re tokens  1,280   - 
Net cash provided by financing activities $1,182   - 

The accompanying Notes to Consolidated Financial Statements are an integral

part of the Consolidated Financial Statements.

5

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

SUBSIDIARIES

Consolidated Statements of Cash Flows,

continued

(Unaudited)

(expressed in thousands of U.S. Dollars)

 
 
Nine Months Ended
 
 
 
September 30,
 
 
 
2017
 
 
2016
 
Operating activities
 
 
 
 
 
 
Net (loss) income
 $(20,568)
  4,900 
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
    
    
Stock-based compensation
  95 
  90 
Net amortization of premiums on investments in fixed-maturity securities
  63 
  - 
Depreciation and amortization
  18 
  16 
Net realized investment losses (gains)
  56 
  (256)
Change in operating assets and liabilities:
    
    
Accrued interest and dividend receivable
  5 
  (1)
Premiums receivable
  151 
  (5,331)
Reinsurance recoverable
  (4,000)
  - 
Deferred policy acquisition costs
  31 
  (72)
Prepayment and other receivables
  1 
  (4)
Reserve for losses and loss adjustment expenses
  16,056 
  972 
Loss experience refund payable
  (1,470)
  (3,095)
Unearned premiums reserve
  (1,094)
  3,955 
Accounts payable and other liabilities
  (33)
  36 
 
    
    
Net cash (used in) provided by operating activities
 $(10,689)
  1,210 
 
    
    
Investing activities
    
    
Change in restricted cash and cash equivalents
  4,944 
  4,072 
Purchase of fixed-maturity securities
  (3,987)
  (3,111)
Purchase of equity securities
  (12,751)
  (8,030)
Proceeds from sale of fixed-maturity and equity securities
  19,147 
  9,337 
Purchase of property and equipment
  (6)
  (11)
 
    
    
Net cash provided by investing activities
 $7,347 
  2,257 
 
    
    
Financing activities
    
    
Repurchases of common stock under share repurchase plan
  (1,061)
  (399)
Dividends paid
  (2,091)
  (2,174)
 
    
    
Net cash used in financing activities
 $(3,152)
  (2,573)
 
    
    
 
     (continued)     

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
 Consolidated Statements of Cash Flows, continued
(Unaudited)
(expressed in thousands of U.S. Dollars)
 
 
Nine Months Ended
 
 
 
September 30,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Net change in cash and cash equivalents
  (6,494)
  894 
Cash and cash equivalents at beginning of period
  12,242 
  8,584 
 
    
    
Cash and cash equivalents at end of period
 $5,748 
  9,478 
 
    
    
Supplemental disclosure of cash flow information
    
    
Interest paid
  - 
  - 
Income taxes paid
  - 
  - 
 
    
    
Non-cash investing activities
    
    
Net change in unrealized loss on securities available for sale
  381 
  1,025 
 
    
    

  Nine Months Ended 
  September 30, 
  2023  2022 
       
Cash and cash equivalents, and restricted cash and cash equivalents:        
Net change during the period  (279)  (1,058)
Balance at beginning of period  3,928   5,418 
         
Balance at end of period $3,649   4,360 

The accompanying Notes to Consolidated Financial Statements are an integral

part of the Consolidated Financial Statements.

6


OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

SUBSIDIARIES

Consolidated Statements of Changes in Shareholders’ Equity (unaudited)

Three and Nine Months Ended September 30, 20172023 and 2016

2022

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

 
 
Ordinary Share Capital
 
 
Additional
Paid-in
 
 
(Accumulated Deficit )  Retained
 
 
Accumulated
Other
Comprehensive
 
 
Total Shareholders'
 
 
 
Shares
 
 
Amount
 
 
Capital
 
 
Earnings
 
 
Loss
 
 
Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2015
  6,060,000 
  6 
  33,657 
  4,838 
  (1,474)
  37,027 
Cash dividends paid
  - 
  - 
  - 
  (2,174)
  - 
  (2,174)
Repurchase and retirement of common stock under share repurchase plan
  (78,387)
  - 
  (399)
  - 
  - 
  (399)
Net income for the period
  - 
  - 
  - 
  4,900 
  - 
  4,900 
Stock-based compensation
  - 
  - 
  90 
  - 
  - 
  90 
Total other comprehensive income
  - 
  - 
  - 
  - 
  1,025 
  1,025 
Balance at September 30, 2016
  5,981,613 
  6 
  33,348 
  7,564 
  (449)
  40,469 
 
    
    
    
    
    
    
 
    
    
    
    
    
    
Balance at December 31, 2016
  5,916,149 
  6 
  33,034 
  4,534 
  (411)
  37,163 
Cash dividends paid
  - 
  - 
  - 
  (2,091)
  - 
  (2,091)
Repurchase and retirement of common stock under share repurchase plan
  (182,562)
  - 
  (1,061)
  - 
  - 
  (1,061)
Net loss for the period
  - 
  - 
  - 
  (20,568)
  - 
  (20,568)
Stock-based compensation
  - 
  - 
  95 
  - 
  - 
  95 
Total other comprehensive income
  - 
  - 
  - 
  - 
  381 
  381 
Balance at September 30, 2017
  5,733,587 
  6 
  32,068 
  (18,125)
  (30)
  13,919 

                
  Ordinary Share Capital  Additional Paid-in  Accumulated  Total Shareholders’ 
  Shares  Amount  Capital  Deficit  Equity 
                
Balance at December 31, 2021  5,749,587   6   32,355   (15,710)  16,651 
Net loss for the period  -   -   -   (387)  (387)
Stock-based compensation  -   -   32   -   32 
Issuance of restricted stock  32,000   -   -   -   - 
Balance at March 31, 2022  5,781,587   6   32,387   (16,097)  16,296 
Net income for the period  -   -   -   77   77 
Stock-based compensation  -   -   32   -   32 
Balance at June 30, 2022  5,781,587   6   32,419   (16,020)  16,405 
Net loss for the period  -   -   -   (2,157)  (2,157)
Stock-based compensation  -   -   32   -   32 
Balance at September 30, 2022  5,781,587   6   32,451   (18,177)  14,280 
                     
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  -   -   55   -   55 
Issuance of restricted stock  4,000   -   -   -   - 
Balance at June 30, 2023  5,870,234   6   32,591   (17,442)  15,155 
Balance  5,870,234   6   32,591   (17,442)  15,155 
Net loss for the period  -   -   -   (7,300)  (7,300)
Net income (loss)  -   -   -   (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  5,870,234   6   32,684   (24,742)  7,948 

The accompanying Notes to Consolidated Financial Statements are an integral

part of the Consolidated Financial Statements.

7

8

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2017

2023

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. Oxbridge Re Holdings LimitedThe Company owns 100%100% of the equity interest in Oxbridge Reinsurance Limited, (the “Subsidiary”), 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 owns 100% of the equity interest in Oxbridge Re HoldingsNS, 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 owns 100% of the equity interest in 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”) provide the following: 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 Subsidiary (collectively,Gulf Coast region of the “Company”)United States; Oxbridge Re NS; 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 wholly-owned 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.

The Company operates as a single business segment through the Subsidiary, which provides collateralized reinsurance to cover excess of loss catastrophe risks of various affiliated and non-affiliated ceding insurers, including Claddaugh Casualty Insurance Company, Ltd. (“Claddaugh”) and Homeowners Choice Property & Casualty Insurance Company (“HCPCI”), which are related-party entities domiciled in Bermuda and Florida, 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, 20172023 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 forthe fiscal year ended December 31, 2017.2023. 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, 20162022 included in the Company’s Form 10-K, which was filed with the SEC on March 13, 201730, 2023.

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.

9
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017

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 tovaluation of investments assessment of other-than-temporary impairment (“OTTI”) and loss experience refund payableinvolve 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.

8

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2023

2.

SIGNIFICANT ACCOUNTING POLICIES

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

Restricted cash and cash equivalents: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’s investments consist ofCompany 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 lossincome (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, 2023 and December 31, 2022 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 income.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.

The Company reviews all securities for other-than-temporary impairment ("OTTI") on a quarterly basis and more frequently when economic or market conditions warrant such review. When the fair value of any investment is lower than its cost, an assessment is made to see whether the decline is temporary of other-than-temporary. If the decline is determined to be other-than-temporary the investment is written down to fair value and an impairment charge is recognized in income in the period in which the Company makes such determination. For a debt security that the Company does not intend to sell nor is it more likely than not that the Company will be required to sell before recovery of its amortized cost, only the credit loss component is recognized in income, while impairment related to all other factors is recognized in other comprehensive (loss) income. The Company considers various factors in determining whether an individual security is other-than-temporarily impaired (see Note 4).
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OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017

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 1Inputs 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 2Inputs 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 3Inputs that are unobservable.

9

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2023

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 common 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.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. The categorization of a financial instrument within the hierarchy is based upon the pricing transparency of the instrument.

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. At

Offering Expenses: During the three months ended September 30, 2017,2023 the DACCompany recognized offering costs totaling $133,000 on the consolidated statements of operations which was considered fully recoverable and no premium deficiency loss was recorded.

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OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notesrelated to Consolidated Financial Statements (unaudited)
September 30, 2017
Property and equipment: Property and equipment are recorded at cost when acquired. Property and equipment are comprised of motor vehicles, furniture and fixtures, computer equipment and leasehold improvements and are depreciated, usingan equity distribution agreement with Maxim Group LLC (“Maxim”) for the straight-line method, over their estimated useful lives, which are five years for furniture and fixtures and computer equipment and four years for motor vehicles. Leasehold improvements are amortized over the lessersale of the estimated useful lives of the assets or remaining lease term. The Company periodically reviews property and equipment that have finite lives, and that are not held for sale, for impairment by comparing the carrying value of the assets to their estimated future undiscounted cash flows. Forordinary shares. During the three and nine-month periodsperiod ended September 30, 2017, there were no impairments2023, the Company recognized in property and equipment.
Allowance for uncollectible receivables: Management evaluates credit qualitythe consolidated statements of operations $236,000 of offering expenses in relation to the offering of Delta Cat Re digital securities issuable by evaluating the exposure to individual counterparties; where warranted management also considersCompany’s new subsidiary, SurancePlus Inc. (See Note 6).

In accordance with the credit rating or financial position, operating results and/or payment historyterms of the counterparty. Management establishesequity distribution agreement with Maxim, we intend to offer and sell ordinary shares having an allowance for amounts for which collection is considered doubtful. Adjustmentsaggregate offering price of up to previous assessments are recognized as income$6.3 million from time to time, and in accordance with prospectus of SurancePlus Inc., the year in which they are determined. At September 30, 2017, no receivables were determinedCompany intends to be overdue or impairedoffer and accordingly, no allowance for uncollectible receivables has been established.

sell its Delta Cat Re digital securities having an aggregate price of up to $5 million. Reclassification of prepaid offering costs to additional paid-in capital will occur upon successful drawdown(s) under the respective offerings.

Reserves for lossesand loss adjustment expenses: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 incomeoperations in the period in which they are determined.

Loss experience refund payable: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.

10

12

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2017

2023

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Premiums assumed: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,expired; in which case the premium adjustments are fully earned when assumed.

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:Ceded: The Company reducesmay 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 incept 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, 2023 or December 2022.

SurancePlus Fee Income: SurancePlus incentive, technology, origination and management (“ITOM”) fee income represents fee income related to the completion of the DeltaCat 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.

Uncertain income tax positions: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, 2017.2023 or December 31, 2022.

11

13

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2017

Earnings per share:2023

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Loss Per Share:Basic (loss) earningsloss per share has been computed on the basis of the weighted-average number of ordinary shares outstanding during the periods presented. Diluted (loss) earningsloss 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.

Stock-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 share purchasestock options at the grant date requires significant estimation and judgment. The Company uses an option-pricing model (Black-Scholes option pricing model) to assist in the calculation of fair value for share purchasestock options. The Company's shares have not been publicly traded for a sufficient length of time to solely use the Company's performance to reasonably estimate the expected volatility. Therefore, whenWhen estimating the expected volatility, the Company takes into consideration the historical volatility of entities similar entities.to itself. The Company considers factors such as an entity'sentity’s industry, stage of life cycle, size and financial leverage when selecting similar entities. The Company usesmay use a sample peer group of companies in the reinsurance industry as well asand/or the Company’s own historical volatility in determining the expected volatility.

Additionally, the Company uses the fullguidance in the SEC’s Staff Accounting Bulletin No. 107 to determine the estimated life of the options ten years, as the estimated term of the 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 expense related to all awards is included in general and administrative expenses.

Recent

Accounting Updates:

From time to time, new accounting pronouncements:

Accounting Standards Update No. 2016-18.In November 2016, are issued by the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updated ("ASU") 2016-18, “Statements of Cash Flows - Restricted Cash (Topic 230)” (“ASU 2016-18”). ASU 2016-18 requires restricted cash and cash equivalents to be included with cash and cash equivalents inFASB or other standard-setting bodies that are adopted by the consolidated statement of cash flows and disclose the natureCompany as of the restrictionsspecified 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 cash and cash equivalents. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company currently separately discloses the restrictions on cash and cash equivalents in Note 3 of theits consolidated financial statements and expects to continue these disclosures since ASU 2016-18 does not change the requirement in Regulation S-X (Rule 5-02) to separately disclose cash and cash equivalents that have restrictions on withdrawalposition or use. The Company currently presents changes in restricted cash and cash equivalents under investing activities in the consolidated statementsresults of cash flows. Upon adoption of ASU 2016-18, the Company will amend the presentation in the consolidated statements of cash flows to include the restricted cash and cash equivalents with cash and cash equivalents in the consolidated statements of cash flows and will retrospectively reclassify all periods presented.
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OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
Accounting Standards Update No. 2016-13. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 amends the guidance on reporting credits losses and affects loans, debt securities, trade receivables, reinsurance recoverables and other financial assets that have the contractual right to receive cash. The amendments are effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for any organization for annual periods beginning after December 15, 2018 and interim periods within those annual periods. The Company is in the process of evaluating the impact of the requirements of ASU 2016-13 on the Company’s consolidated financial statements and anticipates implementing ASU 2016-13 during the first quarter of fiscal year 2020.
Accounting Standards Update No. 2016-09. In March 2016, the FASB issued ASU No. 2016-09, "Compensation-Stock Compensation (Topic 718)," which affects all entities that issue share-based awards to their employees. Among the amendments affecting share-based payment transactions are their income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for all public entities for reporting periods beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted for all entities. The Company does not expect a material impact of this guidance on the Company’s consolidated financial statements.
Accounting Standards Update No. 2016-02. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which supersedes Topic 840 and creates the new lease accounting standards for lessees and lessors, primarily related to the recognition of lease assets and liabilities by lessees for leases classified as operating leases. ASU 2016-02 is effective for all public entities for reporting periods beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted for all entities. The Company is currently evaluating the impact of this guidance on the Company’s consolidated financial statements.
Accounting Standards Update No. 2016-01. In January 2016, the FASB issued ASU 2016-01, "Financial Instruments (Subtopic 825-10)," which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. One of the changes is to require certain equity investments to be measured at fair value with changes in fair value recognized in net income. ASU 2016-01 is effective for all public entities for reporting periods beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The Company is currently evaluating the impact of this guidance on the Company’s consolidated financial statements.
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OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
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:Certain

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

12

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2023

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

 
 
At September 30,
 
 
At December 31,
 
 
 
2017
 
 
2016
 
 
 
(in thousands)
 
 
 
 
 
 
 
 
Cash on deposit
 $2,567 
 $6,868 
Cash held with custodians
  3,181 
  5,374 
Restricted cash held in trust
  18,496 
  23,440 
 
    
    
Total
 $24,244 
 $35,682 
 
    
    

SUMMARY OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS

  At  At 
  September 30, 2023  December 31, 2022 
  (in thousands) 
       
Cash on deposit $1,801  $1,207 
Restricted cash held in trust  1,848   2,721 
Total $3,649  $3,928 

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 SunTrustTruist Bank, and Bank of New York Mellon 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.

16
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017

4. INVESTMENTS

The Company holds investmentsfrom time to time invests in fixed-maturity debt securities and equity securities, that arewith its fixed-maturity debt securities classified as available-for-sale. At September 30, 20172023 and December 31, 2016,2022, the cost or amortized cost, gross unrealized gains and losses, and estimated fair value of the Company’sCompany did not hold any available-for-sale securities by security type were as follows:

 
 
Cost of
Amortized
Cost
 
 
Gross
Unrealized
Gain
 
 
Gross
Unrealized
Loss
 
 
Estimated
Fair Value ($000)
 
 
 
($ in thousands)
 
As of September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
Fixed-maturity securities
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency securities
 $7,015 
 $- 
 $(18)
 $6,997 
 
    
    
    
    
 
    
    
    
    
Total fixed-maturity securities
  7,015 
  - 
  (18)
  6,997 
 
    
    
    
    
Mutual funds
  400 
  17 
  - 
  417 
Preferred stocks
  205 
  - 
  (4)
  201 
Common stocks
  1,255 
  15 
  (40)
  1,230 
 
    
    
    
    
Total equity securities
  1,860 
  32 
  (44)
  1,848 
 
    
    
    
    
 
    
    
    
    
Total available for sale securities
 $8,875 
 $32 
 $(62)
 $8,845 
 
    
    
    
    
 
    
    
    
    
As of December 31, 2016
    
    
    
    
Fixed-maturity securities
    
    
    
    
U.S. Treasury and agency securities
 $6,060 
 $28 
 $(37)
 $6,051 
 
    
    
    
    
 
    
    
    
    
Total fixed-maturity securities
  6,060 
  28 
  (37)
  6,051 
 
    
    
    
    
Mutual funds
  400 
  2 
  (6)
  396 
Preferred stocks
  687 
  8 
  (4)
  691 
Common stocks
  4,256 
  126 
  (528)
  3,854 
 
    
    
    
    
Total equity securities
  5,343 
  136 
  (538)
  4,941 
 
    
    
    
    
 
    
    
    
    
Total available for sale securities
 $11,403 
 $164 
 $(575)
 $10,992 
At September 30, 2017 and December 31, 2016, available-for-sale securities with fair value of $3,982,000 and $3,502,000, respectively, are held in trust accounts as collateral under reinsurance contacts with the Company’s ceding insurers.
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OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
4. 
INVESTMENTS (continued)
Expected maturities will differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without penalties. The scheduled contractual maturities of fixed-maturity securities at September 30, 2017 and December 31, 2016 are as follows:

 
 Amortized
Cost 
 Estimated
Fair Value 
 
 
($ in thousands)
 
As of September 30, 2017
 
 
 
 
 
 
Available for sale
 
 
 
 
 
 
Due within one year
 $3,028 
  3,014 
Due after one year through five years
  3,987 
  3,983 
 
    
    
 
 $7,015 
 $6,997 
 
    
    
 
    
    
As of December 31, 2016
    
    
Available for sale
    
    
Due within one year
 $2,970 
 $2,998 
Due after one year through five years
  3,090 
  3,053 
 
    
    
 
 $6,060 
 $6,051 
securities.

Proceeds received, and the gross realized gains and losses from salessale of available-for-saleequity securities, for the periods ended September 30, 2023 and 2022, are as follows:

SCHEDULE OF GROSS REALIZED GAINS AND LOSSES FROM SALE OF EQUITY SECURITIES

  Gross  Gross  Gross 
  proceeds  Realized  Realized 
  from sales  Gains  Losses 
  ($ in thousands) 
          
Three Months Ended September 30, 2023            
Equity securities $-  $         -  $            - 
             
Nine Months Ended September 30, 2023            
Equity securities $-  $-  $- 
             
Three Months Ended September 30, 2022            
Equity securities $-  $-  $- 
             
Nine Months Ended September 30, 2022            
Equity securities $626  $27  $- 

Other Investments

In connection with Oxbridge Acquisition Corp. (“OXAC”) initial public offering (“IPO”) in August 2021, the Company’s affiliate OAC Sponsor Ltd. (“Sponsor”) purchased an aggregate 4,897,500 private placement warrants from OXAC (“Private Placement Warrants”) at a price of $1.00 per warrant. Each Private Placement Warrant was exercisable for one of OXAC’s Class A ordinary share at a price of $ 11.50 per share, and as such met the definition of a derivative as outlined within ASC 815, Derivatives and Hedging. The Sponsor also purchased an aggregate of 2,875,000 of OXAC’s Class B ordinary shares (the “Class B shares”) par value $0.0001 per share for $25,000. The Class B shares and Private Placement Warrants were issued to and held by Sponsor. The Class B shares of OXAC held by Sponsor automatically convert into shares of OXAC’s Class A ordinary shares on a one-for- one basis at the time of OXAC’s initial business combination and were subject to certain transfer restrictions.

13

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2023

4. INVESTMENTS (continued)

On August 11, 2021, the Company acquired an aggregate of 1,500,000 ordinary shares and 3,094,999 preferred shares of Sponsor for an aggregate purchase price of $2,000,000. In connection with the organization of Sponsor, the Company placed approximately 34.7% of the risk capital and owns approximately 49.6% and 63.1% of the ordinary shares and preferred shares, respectively, of the Sponsor (the “Sponsor Equity Interest”). The preferred shares of Sponsor are nonvoting shares and generally entitle the holders thereof to receive the net proceeds, if any, received by Sponsor from the sale, exchange, or disposition of the Private Placement Warrants or the shares issuable upon the exercise thereof, and the ordinary shares of Sponsor (which are voting shares in Sponsor) are equivalent to the value of the Class B Shares of OXAC held by Sponsor.

The registration statement for OXAC’s IPO was declared effective on August 11, 2021 and on August 16, 2021, OXAC consummated the IPO with the sale of 11,500,000 units (the “Units”) at $10.00 per Unit, generating gross proceeds of $115,000,000. The Units trade on the NASDAQ Capital Market under the ticker symbol “OXACU”. After the securities comprising the units began separate trading on October 1, 2021, the Class A ordinary shares and public warrants were listed on NASDAQ under the symbols “OXAC” and “OXACW,” respectively.

On November 9, 2022, the OXAC held an extraordinary general meeting (the “EGM”) of shareholders. At the EGM, the OXAC’s shareholders were presented the proposals to extend the date by which OXAC must consummate a business combination from November 16, 2022 to August 16, 2023 (or such earlier date as determined by OXAC’s Board) by amending OXAC’s Amended and Restated Memorandum and Articles of Association (the “Extension Amendment Proposal”). The Extension Amendment Proposal to amend OXAC’s Amended and Restated Memorandum and Articles of Association (“Charter Amendment”) was approved.

In connection with the Extension Amendment Proposal, the Sponsor agreed to contribute to OXAC a loan of $575,000 (the “Extension Loan” or “Promissory Note”), to be deposited into OXAC Trust Account to extend the Termination Date from November 16, 2022 to August 16, 2023. On November 14, 2022, the Company subscribed for additional ordinary shares in the Sponsor for an amount of $285,000, representing the Company’s pro-rata portion of the Extension Loan. As such, the Company’s Sponsor Equity Interest remained at approximately 49.6% and 63.1% of the ordinary shares and preferred shares, respectively, of the Sponsor.

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 (“Jet.AI”). The business combination was closed on August 10, 2023, and on August 11, 2023, OXAC common stock and warrants began trading on the Nasdaq under the new ticker symbols JTAI and JTAIW.

The Company’s beneficial interests in Jet.AI’s ordinary shares, public warrants and extension loan 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 JetAI’s ordinary shares and public warrants is dependent on the observable trading prices of JetAI’s Class A shares and public warrants. The fair value of of the Company’s beneficial interest in the Extension Loan is estimated to be the pro-rata original principal amount of the Extension Loan due to the short-term nature.

The Sponsor holds 2,875,000 ordinary shares, 575 Series A-1 preferred shares with par value of $1,000 each, along with the 4,897,500 warrants. One of the Company’s executive officers is an independent member of Jet.AI’s board.

14

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2023

4. INVESTMENTS (continued)

As a result of the re-measurement of our investment in Jet.AI we recognized for the three and nine months ended September 30, 2017 and 2016 were as follows:

 
 Gross proceeds from sales 
 Gross
Realized
Gains 
 Gross
Realized
Losses 
 
 
($ in thousands)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
Fixed-maturity securities
 $3,000
 $30 
 $- 
 
    
    
    
Equity securities
 $6,470
 $380 
 $  (514) 
 
    
    
    
 
    
    
    
Nine Months Ended September 30, 2017
    
    
    
Fixed-maturity securities
 $3,000 
 $30
 $-
 
    
    
    
Equity securities
 $16,147
 $1,112
 $(1,198) 
 
    
    
    
 
    
    
    
Three Months Ended September 30, 2016
    
    
    
Fixed-maturity securities
 $- 
 $- 
 $- 
 
    
    
��   
Equity securities
 $4,099 
 $368 
 $(246)
 
    
    
    
 
    
    
    
Nine Months Ended September 30, 2016
    
    
    
Fixed-maturity securities
 $119 
 $8 
 $- 
 
    
    
    
Equity securities
 $9,218 
 $867 
 $(619)
18
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
4. 
INVESTMENTS (continued)
The Company regularly reviews its individual investment securities for OTTI. The Company considers various factors in determining whether each individual security is other-than-temporarily impaired, including:
●
the financial condition and near-term prospects of the issuer, including any specific events that may affect its operations or income;
●
the length of time and the extent to which the market value of the security has been below its cost or amortized cost;
●
general market conditions and industry or sector specific factors;
●
nonpayment by the issuer of its contractually obligated interest and principal payments; and
●
the Company’s intent and ability to hold the investment for a period of time sufficient to allow for the recovery of costs.
Securities with gross unrealized loss positions at September 30, 2017 and December 31, 2016, aggregated by investment category and length of time the individual securities have been in a continuous loss position, are as follows:

 
Less Than Twelve
 
 
Twelve Months or
 
   
 
 
   Months 
 
 
Greater
 
 
   Total 
 
 
 
Gross
 
 
Estimated
 
 
Gross
 
 
Estimated
 
 
Gross
 
 
Estimated
 
 
 
Unrealized
 
 
Fair
 
 
Unrealized
 
 
Fair
 
 
Unrealized
 
 
Fair
 

 
Loss
 
 
Value
 
 
Loss
 
 
Value
 
 
Loss
 
 
Value
 
As of September 30, 2017
 
($ in thousands)
 
 
($ in thousands)
 
 
($ in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency securities
  5 
  3,982 
  13 
  3,015 
  18 
  6,997 
 
    
    
    
    
    
    
Total fixed-maturity securities
  5 
  3,982 
  13 
  3,015 
  18 
  6,997 
 
    
    
    
    
    
    
Equity securities
    
    
    
    
    
    
Preferred stocks
  4 
  201 
  - 
  - 
  4 
  201 
All other common stocks
  6 
  396 
  34 
  417 
  40 
  813 
 
    
    
    
    
    
    
Total equity securities
  10 
  597 
  34 
  417 
  44 
  1,014 
 
    
    
    
    
    
    
Total available for sale securities
 $15 
 $4,579 
 $47 
 $3,432 
 $62 
 $8,011 
At September 30, 2017, there were 9 securities in2023, an unrealized loss positionon other investments of which 3$6,889,000 and $6,384,000, respectively within our consolidated statements of these positions had been in an unrealized loss position for 12 months or greater.
19
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)
operations.

Other investments as of September 30, 2017

4. 
INVESTMENTS (continued)

 
Less Than Twelve
 
 
Twelve Months or
 
   
 
 
  Months 
 
 
Greater
 
 
  Total 
 
 
 
Gross
 
 
Estimated
 
 
Gross
 
 
Estimated
 
 
Gross
 
 
Estimated
 
 
 
Unrealized
 
 
Fair
 
 
Unrealized
 
 
Fair
 
 
Unrealized
 
 
Fair
 

 
Loss
 
 
Value
 
 
Loss
 
 
Value
 
 
Loss
 
 
Value
 
As of December 31, 2016
 
($ in thousands)
 
 
($ in thousands)
 
 
($ in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturity securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and agency securities
  37 
  3,053 
  - 
  - 
  37 
  3,053 
 
    
    
    
    
    
    
Total fixed-maturity securities
  37 
  3,053 
  - 
  - 
  37 
  3,053 
 
    
    
    
    
    
    
Equity securities
    
    
    
    
    
    
Mutual funds
  6 
  193 
  - 
  - 
  6 
  193 
Preferred stocks
  4 
  396 
  - 
  - 
  4 
  396 
All other common stocks
  84 
  1,142 
  444 
  1,088 
  528 
  2,230 
 
    
    
    
    
    
    
Total equity securities
  94 
  1,731 
  444 
  1,088 
  538 
  2,819 
 
    
    
    
    
    
    
Total available for sale securities
 $131 
 $4,784 
 $444 
 $1,088 
 $575 
 $5,872 
At December 31, 2016, there were 17 securities in an unrealized loss position of which 5 of these positions had been in an unrealized loss position for 12 months or greater.
The Company believes there were no fundamental issues such as credit losses or other factors with respect to its fixed-maturity securities. It is expected that the securities would not be settled at a price less than the par value2023 consist of the investmentsand because the Company has the ability and intent to hold these securities and it is probable that the Company will not be required to sell these securities until a market price recovery or maturity, the Company does not consider any of its fixed-maturity securities to be other-than-temporarily impaired at September 30, 2017 and December 31, 2016.
In determining whether equity securities are other than temporarily impaired, the Company considers its intent and ability to hold a security for a period of time sufficient to allow for the recovery of cost, along with factors including the length of time each security had been in an unrealized loss position, the extent of the decline and the near-term prospect for recovery. Based on management’s evaluation, the Company does not consider any of its equity securities to be other-than-temporarily impaired at September 30, 2017 and December 31, 2016.
20
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
4. 
INVESTMENTS (continued)
following (in thousands):

SCHEDULE OF OTHER INVESTMENT

  

September 30, 2023

 
    
Jet.AI Series A-1 Preferred Shares $285 
Jet.AI Common Stock & Public Warrants  4,754 
Total $5,039 

  Nine Months ended September 30, 2023 
    
Beginning of period $11,423 
Unrealized loss on investment in affiliate  (6,384)
End of period $5,039 

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, 20172023 and December 31, 2016:2022:

15

 
 
Fair Value Measurements Using
 
 
 
 
 
 
(Level 1)
 
 
(Level 2)
 
 
(Level 3)
 
 
Total
 
As of September 30, 2017
 
($ in thousands)
 
Financial Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 $5,748 
 $- 
 $- 
 $5,748 
 
    
    
    
    
Restricted cash and cash equivalents
 $18,496 
 $- 
 $- 
 $18,496 
 
   ��
    
    
    
Fixed-maturity securities:
    
    
    
    
U.S. Treasury and agency securities
  6,997 
  - 
  - 
  6,997 
 
    
    
    
    
 
    
    
    
    
Total fixed-maturity securities
  6,997 
  - 
  - 
  6,997 
 
    
    
    
    
Mutual funds
  417 
  - 
  - 
  417 
Preferred stocks
  201 
  - 
  - 
  201 
All other common stocks
  1,230 
  - 
  - 
  1,230 
 
    
    
    
    
Total equity securities
  1,848 
  - 
  - 
  1,848 
 
    
    
    
    
Total available for sale securities
  8,845 
  - 
  - 
  8,845 
 
    
    
    
    
Total
 $33,089 
 $- 
 $- 
 $33,089 
21

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 20172023

4. INVESTMENTS (continued)

SCHEDULE OF FAIR VALUE OF ASSETS MEASURED ON RECURRING BASIS

  (Level 1)  (Level 2)  (Level 3)  Total 
  Fair Value Measurements Using    
  (Level 1)  (Level 2)  (Level 3)  Total 
As of September 30, 2023 ($ in thousands) 
Financial Assets:                
Cash and cash equivalents $1,801  $      -  $-  $1,801 
                 
Restricted cash and cash equivalents $1,848  $-  $-  $1,848 
                 
Other investments $-  $-  $5,039  $5,039 
                 
Equity securities $608  $-  $-  $608 
                 
Total $4,257  $-  $5,039  $9,296 

  (Level 1)  (Level 2)  (Level 3)  Total 
  Fair Value Measurements Using    
  (Level 1)  (Level 2)  (Level 3)  Total 
As of December 31, 2022 ($ in thousands) 
Financial Assets:                
Cash and cash equivalents $1,207  $       -  $-  $1,207 
                 
Restricted cash and cash equivalents $2,721  $-  $-  $2,721 
                 
Other investments $-  $-  $11,423  $11,423 
                 
Equity securities $642  $-  $-  $642 
                 
Total $4,570  $-  $11,423  $15,993 

Assets Measured at Estimated Fair Value on a Recurring Basis (continued)

There were no transfers between Levels 1, 2 or 3 during the nine months ended September 30, 2023 and 2022.

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:

SCHEDULE OF RECONCILIATION OF CHANGES IN FAIR VALUE

  Other 
  Investments 
  (in thousands) 
Fair value of Level 3 other investment at January 1, 2023 $11,423 
Change in valuation inputs or other assumptions  (6,384)
Fair value of Level 3 other investment at September 30, 2023 $    5,039 

16

4. 
INVESTMENTS (continued)
 
 
Fair Value Measurements Using
 
 
 
 
 
 
(Level 1)
 
 
(Level 2)
 
 
(Level 3)
 
 
Total
 
As of December 31, 2016
 
($ in thousands)
 
Financial Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 $12,242 
 $- 
 $- 
 $12,242 
 
    
    
    
    
Restricted cash and cash equivalents
 $23,440 
 $- 
 $- 
 $23,440 
 
    
    
    
    
Fixed-maturity securities:
    
    
    
    
U.S. Treasury and agency securities
  6,051 
  - 
  - 
  6,051 
 
    
    
    
    
 
    
    
    
    
Total fixed-maturity securities
  6,051 
  - 
  - 
  6,051 
 
    
    
    
    
 
    
    
    
    
Mutual funds
  396 
  - 
  - 
  396 
Preferred stocks
  691 
  - 
  - 
  691 
All other common stocks
  3,854 
  - 
  - 
  3,854 
 
    
    
    
    
Total equity securities
  4,941 
  - 
  - 
  4,941 
 
    
    
    
    
Total available for sale securities
  10,992 
  - 
  - 
  10,992 
 
    
    
    
    
Total
 $46,674 
 $- 
 $- 
 $46,674 

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2023

5. TAXATION

Under current Cayman Islands law, no corporate entity, including the Company and the Subsidiary,subsidiaries, is obligated to pay taxes in the Cayman Islands on either income or capital gains. The Company and the SubsidiaryOxbridge 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 the SubsidiaryOxbridge 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 subsidiarysubsidiaries 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 100% of the voting shares, 100% 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.

17

22

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 20172023

6. VARIABLE INTEREST ENTITIES (continued)

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.

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 nine-month period ended September 30, 2023 resulting in a balance due of $118,000 at September 30, 2023. None of the participating notes were redeemed during the nine-month period ending September 30, 2022.

The income from Oxbridge Re NS operations that are attributable to the participating notes noteholders for the nine-month periods ended September 30, 2023 and 2022 was $0 and $43,000, respectively, and are included within accounts payable and other liabilities as at September 30, 2023 and 2022, respectively.

SurancePlus Inc.

SurancePlus Inc., a wholly-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 proceeds from the offer and sale of the Securities will be used by SurancePlus to purchase one or more participating notes of Oxbridge Re NS, and the proceeds from the sale of participating notes will be 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. Assuming no casualty losses to properties reinsured by Oxbridge Re’s reinsurance subsidiaries, DeltaCat Re token investors are expected to receive an annual return on the original purchase price of 42%.

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 Juner 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 ITOM 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 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.

18

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2023

6. VARIABLE INTEREST ENTITIES (continued)

SurancePlus Inc. (cont’d)

On June 28, 2023, Oxbridge issued a press release announcing the completion of the Private Placement

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, 2023 and the balance sheet data as of September 30, 2023.

SCHEDULE OF FINANCIAL STATEMENTS

 For Three Months Ended  For Nine Months Ended 
Statement of Operations Data: September 30, 2023  September 30, 2023 
  (Unaudited)  (Unaudited) 
       
Surance Plus fee income  -   574 
Underwriting related income  489   651 
Total revenue  489   1,225 
Expenses  (10)  (236)
Income attributable to tokenholders  (443)  (592)
Net income  36   397 

Balance Sheet Data:At September 30, 2023
(Unaudited)
(In thousands)
Total assets3,099
Amounts due to Delta Cat Re Tokenholders*1,573
Due to Parent10
Total shareholder’s equity1,516

*includes underwriting profit of $282,000 due to Parent.

19
6.

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2023

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 three and nine-month periods ending September 30, 20172023 and 2016:

 
 
Three Months Ended
 
 
Nine Months Ended
 
 
 
September 30,
 
 
September 30,
 
 
 
2017
 
 
2016
 
 
2017
 
 
2016
 
 
 
($ in thousands)
 
 
($ in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross balance, beginning of period
 $3,043 
  2,250 
 $8,702 
  - 
Incurred, net of reinsurance, related to:
    
    
    
    
     Current period
  38,401 
  (1,248)
  38,401 
  1,030 
     Prior period
  2,999 
  - 
  4,026 
  - 
           Total incurred, net of reinsurance
  41,400 
  (1,248)
  42,427 
  1,030 
Paid, net of reinsurance, related to:
    
    
    
    
     Current period
  (21,500)
  (30)
  (21,500)
  (58)
     Prior period
  (2,185)
  - 
  (8,871)
  - 
           Total paid, net of reinsurance
  (23,685)
  (30)
  (30,371)
  (58)
Net balance, end of period
  20,758 
  972 
  20,758 
  972 
Add: reinsurance recoverable
  4,000 
  - 
  4,000 
  - 
Gross balance, end of period
 $24,758 
  972 
 $24,758 
  972 
The2022:

SCHEDULE OF LOSS ADJUSTMENT EXPENSE

  At  At 
  September 30, 2023  September 30, 2022 
  (in thousands) 
       
Balance, beginning of period $1,073  $- 
Incurred related to:        
Current period  -   1,073 
Prior period  -   - 
Total incurred  -   1,073 
Paid related to:        
Current period  

-

  - 
Prior period  (1,073)  - 
Total paid  (1,073)  - 
Balance, end of period $- $1,073 

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 uses the assistance of an independent actuarytypically suffers limit losses in the determinationevent of IBNR and expected future development of existing case reserves.

Duringa Category 3 or above hurricane making landfall in a populated area where the three and nine monthsCompany has catastrophe risk exposure. For the nine-month periods ended September 30, 2017,2023 and 2023, the Company experienced significant limithas recorded its reserves for losses and LAE based on all its policies due to the individual and aggregate impact of Hurricanes Harvey, Irma and Maria. During the same period,contractual maximum loss the Company experienced unfavorable loss development of $2,999 and $4,026, respectively, which pertain to claims incan suffer under the 2016 loss year, primarily Hurricane Matthew.
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 contractcontract-by-contract basis and updated as new information becomes known. Any resulting adjustments are reflected in incomeoperations 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 three and nine-month period ended September 30, 2023

20

23

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2017

7.  EARNINGS2023

8. LOSS PER SHARE

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

 
 
Three Months Ended
 
 
Nine Months Ended
 
 
 
 September 30,
 
 
 September 30,
 
 
 
2017
 
 
2016
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
 
 
 
 
 
     Net (loss) earnings
 $(22,954)
  2,985 
 $(20,568)
  4,900 
 
    
    
    
    
Denominator:
    
    
    
    
    Weighted average shares - basic
  5,777,119 
  6,026,172 
  5,833,621 
  6,048,163 
    Effect of dilutive securities - Stock options
  - 
  - 
  - 
  - 
    Shares issuable upon conversion of warrants
  - 
  - 
  - 
  - 
    Weighted average shares - diluted
  5,777,119 
  6,026,172 
  5,833,621 
  6,048,163 
Basic (loss) earnings per share
 $(3.97)
  0.50 
 $(3.53)
  0.81 
Diluted (loss) earnings per share
 $(3.97)
  0.50 
 $(3.53)
  0.81 
 
    
    
    
    

SCHEDULE OF COMPUTATION OF BASIC AND DILUTED LOSS EARNING PER SHARE

  2023  2022  2023  2022 
  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  2023  2022  2023  2022 
             
Numerator:                
Net loss $(7,300)  (2,157) $(7,243)  (2,467)
                 
Denominator:                
Weighted average shares - basic  5,870,234   5,781,587   5,866,083   5,771,506 
Effect of dilutive securities - Stock options  -   -   -   - 
Shares issuable upon conversion of warrants  -   -   -   - 
Weighted average shares - diluted  5,870,234   5,781,587   5,866,083   5,771,506 
Loss per share - basic $(1.24)  (0.37) $(1.23)  (0.43)
Loss per share - diluted $(1.24)  (0.37) $(1.23)  (0.43)

For the three and nine-month periodsthree-month period ended September 30, 20172023 and 2016,the nine-month period ended September 30, 2022, options to purchase 250,000 and 215,000846,250 ordinary shares respectively, were anti-dilutive as the sum of the proceeds, including unrecognized compensation expense, exceeded the average market price of the Company’s ordinary share during the periods presented.

For the three and nine-month periods ended September 30, 2017 and 2016, 8,230,700 warrants to purchase an aggregate of 8,230,700 ordinary shares were not dilutive becauseanti-dilutive due to the exercise pricenet loss during these periods.

For the nine -month period ended September 30, 2023 and the three-month period ended September 30, 2022, options to purchase 896,250 ordinary shares and 8,230,700 warrants to purchase an aggregate of $7.50 exceeded8,230,700 ordinary shares were anti-dilutive due to the average market price of the Company’s ordinary sharenet loss during the periods presented.

these periods.

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

24
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)
loss.

9. WARRANTS

There were 8,230,700 warrants outstanding at September 30, 2017

8.  SHAREHOLDERS’ EQUITY
On February 28, 2014, the Company’s Registration Statement on Form S-1, as amended, relating to the initial public offering of the Company’s units was declared effective by the SEC. The Registration Statement covered the offer2023 and sale by the Company of 4,884,650 units, each consisting of one ordinary share and one warrant (“Unit”), which were sold to the public on March 26, 2014 at a price of $6.00 per Unit. The ordinary shares and warrants comprising the Units began separate trading on May 9, 2014. The ordinary shares and warrants are traded on the Nasdaq Capital Market under the symbols “OXBR” and “OXBRW,” respectively.December 31, 2022. One warrant may be exercised to acquire one ordinary share at an exercise price equal to $7.50$7.50 per share on or before March 26, 2019. At any time after September 26, 2014 and before the expiration of the warrants, the2024. 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$9.38 for at least ten trading days within any period of twenty consecutive trading days, including the last trading day of the period.
The initial public offering resulted in aggregate gross proceeds to the Company of approximately $29.3 million (of which approximately $5 million related to the fair value proceeds on the warrants issued) and net proceeds of approximately $26.9 million after deducting underwriting commissions and offering expenses.
There were 8,230,700 warrants outstanding at September 30, 2017 and 2016. No warrants were exercised during the three and nine-month periods ended September 30, 20172023 and 2016.
On January 24, 2017, our Board of Directors declared a quarterly cash dividend of $0.12 per share payable on March 30, 2017 to shareholders of record on March 17, 2017.
On May 12, 2017, our Board of Directors declared a quarterly cash dividend of $0.12 per share payable on September 30, 2017 to shareholders of record on June 23, 2017.
On August 12, 2017, our Board of Directors declared a quarterly cash dividend of $0.12 per share payable on September 30, 2017 to shareholders of record on September 23, 2017.
In May 2016, the Company’s Board of Directors authorized a plan to repurchase up to $2,000,000 of the Company’s common shares, inclusive of commissions and fees. During the three and nine months ended September 30, 2017, the Company repurchased and retired a total of 72,747 and 182,562 shares, respectively, at a weighted-average price per share of $5.33 and $5.77, respectively, under this authorized repurchase plan. The total cost of shares repurchased, inclusive of fees and commissions, during the three and nine months ended September 30, 2017 were $390,000, or $5.37 per share, and $1,061,000, or $5.81 per share, respectively.
The stock repurchase program has been discontinued effective September 30, 2017. Through September 28, 2017, the Company had repurchased an aggregate of 326,413 shares for an aggregate cost of $1,803,568 under the Share Repurchase Program.
2022.

10. DIVIDENDS

As of September 30, 2017,2023, none of the Company’s retained earnings were restricted from payment of dividends to the Company’scompany’s shareholders. However, since most of the Company’s capital and retained earnings may be invested in the Subsidiary,its subsidiaries, a dividend from the Subsidiarysubsidiaries would likely be required in order to fund a dividend to the Company’s shareholders and would require notification to the Cayman Islands Monetary Authority (“CIMA”).

25
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
8.  SHAREHOLDERS’ EQUITY(continued)

Under Cayman Islands law, the use of additional paid-in capital is restricted, and the Company will not be allowed to pay dividends out of additional paid-in capital if such payments result in breaches of the prescribed and minimum capital requirement. See also Note 10.

21

9.              

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2023

11. SHARE-BASED COMPENSATION

The Company currently has outstanding stock-based awards granted under the 2014 Omnibus Incentive Plan (the “Plan”“2014 Plan”) and the 2021 Omnibus Incentive Plan (the “2021 Plan”) (hereinafter collectively referred to as “the Plans”).Under each of the Plan,Plans, the Company has discretion to grant equity and cash incentive awards to eligible individuals, including the issuance of up to 1,000,000 of the Company’s ordinary shares. During the nine-month period ended September 30, 2023, the Company granted 100,647 restricted stock to directors ,officers and employees under the 2021 Plan. At September 30, 2017,2023, there were 690,000895,353 shares and 11,750 shares available for grant under the Plan.

2021 Plan and the 2014 Plan, respectively.

Stock options

The Company accounts for share-based compensation under the fair value recognition provisions of ASC Topic 718 – “Compensation – Stock Compensation.”

Stock options granted and outstanding under the Plan vests quarterly over four years and are exercisable over the contractual term of ten years.

years.

A summary of the stock option activity for the three and nine-month periods ended September 30, 20172023 and 20162022 is as follows:

 Options
 
 Number of Options
 
 
 Weighted-Average Exercise Price
 
Weighted-Average Remaining Contractual Term
 
 Aggregate Intrinsic Value ($000)
 
Outstanding at January 1, 2017
  215,000 
 
 
 
 
 
 
 
Granted
  35,000 
 
 
 
 
 
 
 
Outstanding at March 31, 2017
  250,000 
 $6.01 
 8.2 years
 $137,500 
Outstanding at June 30, 2017
  250,000 
 $6.01 
 7.9 years
 $- 
Outstanding at September 30, 2017
  250,000 
 $6.01 
 7.7 years
 $- 
Exercisable at September 30, 2017
  145,625 
 $6.01 
 7.7 years
 $- 
 
    
    
 
    
 
    
    
 
    
Outstanding at January 1, 2016
  180,000 
    
 
    
Granted
  35,000 
    
 
    
Outstanding at March 31, 2016
  215,000 
 $6 
 8.9 years
 $- 
Outstanding at June 30, 2016
  215,000 
 $6 
 8.7 years
 $- 
Outstanding at September 30, 2016
  215,000 
 $6 
 8.4 years
 $- 
Exercisable at September 30, 2016
  85,312 
 $6 
 8.4 years
 $- 
26
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)
September 30, 2017
9.              
SHARE-BASED COMPENSATION (continued)

SCHEDULE OF STOCK OPTION ACTIVITY

     Weighted-      
  Weighted-  Average      
  Number  Average  Remaining Aggregate 
  of  Exercise  Contractual Intrinsic 
  Options  Price  Term Value 
            
Outstanding at January 1, 2023  871,250  $4.67  5.6 years $- 
Forfeited  (25,000) $6.00       
Outstanding at March 31, 2023  846,250  $4.63  5.5 years $- 
Exercisable at March 31, 2023  736,875  $4.43  5.2 years $           - 
Outstanding at June 30, 2023  846,250  $4.63  5.3 years $- 
Exercisable at June 30, 2023  752,500  $4.46  5.0 years $- 
Outstanding at September 30, 2023  846,250  $4.63  5.0 years $- 
Exercisable at September 30, 2023  768,125  $4.49  4.76 years $- 
               
Outstanding at January 1, 2022  896,250  $4.71  6.9 years $- 
Outstanding at March 31, 2022  896,250  $4.71  6.6 years    
Exercisable at March 31, 2022  601,250  $4.44  5.7 years $- 
Outstanding at June 30, 2022  896,250  $4.71  6.4 years $- 
Exercisable at June 30, 2022  641,250  $4.42  5.6 years $- 
Outstanding at September 30, 2022  896,250  $4.71  6.14 years $- 
Exercisable at September 30, 2022  681,250  $4.41  5.5 years $- 

Compensation expense recognized for the three-month periods ended September 30, 20172023 and 20162022 totaled $10,000$5,000 and $8,000, respectively,$15,000 and for the nine-month periods ended September 30, 20172023 and 20162022 totaled $30,000$15,000 and $24,000,$44,000, respectively. Compensation expense is included in general and administrative expenses. At September 30, 20172023 and 2016,2022, there was approximately $63,000$25,000 and $75,000,$71,000, respectively, of total unrecognized compensation expense related to non-vested stock options granted under the Plan.Plans. The Company expects to recognize the remaining compensation expense over a weighted-average period of twenty (20)fifteen (15) months.

22

No options were granted during the three-month periods ended

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2017 and 2016. During the nine-month periods ended September 30, 2017 and 2016, 35,000 options in each period, were granted with fair value estimated on the date of grant using the following assumptions and the Black-Scholes option pricing model:

 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Expected dividend yield
  8%
  9.6%
Expected volatility
  35%
  35%
Risk-free interest rate
  2.48%
  2.03%
Expected life (in years)
  10 
  10 
Per share grant date fair value of options issued
 $0.73 
 $0.34 
2023

11. SHARE-BASED COMPENSATION (cont’d)

Restricted Stock Awards

The Company has granted and may grant restricted stock awards to eligible individuals in connection with their service to the Company. The terms of the Company’s outstanding restricted stock grants may include service, performance and market-based conditions. The fair value of the awards with market-based conditions is determined using a Monte Carlo simulation method, which calculates many potential outcomes for an award and then establishes fair value based on the most likely outcome. The determination of fair value with respect to the awards with only performance or service-based conditions is based on the value of the Company’s stock on the grant date.

27
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)

During the nine-month periods ended September 30, 2017

9.              
SHARE-BASED COMPENSATION (continued)
2023 and 2022, the Company granted 100,647 and 32,000 shares of restricted stock, respectfully to directors and employees under the 2021 Plan. Information with respect to the activity of unvested restricted stock awards during the three and nine-month periodsperiod ended September 30, 2017 and 20162023 is as follows:
 
 
Weighted- Number of Restricted
Stock
Awards
 
 
Weighted-
Average
Grant Date
Fair Value
 
 
 
 
 
 
 
 
Nonvested at January 1, 2017
  30,000 
 $5.86 
Vested
  (3,750)
    
Nonvested at March 31, 2017
  26,250 
 $5.86 
 
    
    
Vested
  (3,750)
    
Nonvested at June 30, 2017
  22,500 
 $5.86 
 
    
    
Vested
  (3,750)
    
Nonvested at September 30, 2017
  18,750 
 $5.86 
 
    
    
Nonvested at January 1, 2016
  45,000 
 $5.86 
Vested
  (3,750)
    
Nonvested at March 31, 2016
  41,250 
 $5.86 
 
    
    
Vested
  (3,750)
    
Nonvested at June 30, 2016
  37,500 
 $5.86 
 
    
    
Vested
  (3,750)
    
Nonvested at September 30, 2016
  33,750 
 $5.86 
follows (share amounts not in thousands):

SCHEDULE OF ACTIVITY OF UNVESTED RESTRICTED STOCK AWARDS

  Weighted-    
  Number of  Weighted- 
  Restricted  Average 
  Stock  Grant Date 
  Awards  Fair Value 
       
Nonvested at January 1, 2023  23,000  $2.37 
Granted  100,647  $2.37 
Vested  (32,750) $2.37 
Nonvested at June 30, 2023  90,897  $2.37 
Vested  (32,324) $2.37 
Nonvested at September 30, 2023  58,573  $2.37 

Compensation expense recognized for the three-month periodsthree and nine-months ended September 30, 20172023 totaled $88,000 and 2016 totaled $22,000, and for the nine-month periods ended September 30, 2017 and 2016 totaled $65,000,$187,000 respectively and is included in general and administrative expenses. Compensation expense for the three and nine- month periods ended September 30, 2022 totaled $17,000 and $52,000, respectively. At September 30, 2017 and 2016,2023, there was approximately $110,000 and $198,000, respectively, of total$181,000 unrecognized compensation expense related to non-vested restricted stock granted under the Plan. ThePlan, which the Company expects to recognize the remaining compensation expense over a weighted-average period of fifteen (15)ten (10) months.

10.  

12. NET WORTH FOR REGULATORY PURPOSES

The Subsidiary isCompany's reinsurance subsidiaries are subject to a minimum and prescribed capital requirement as established by CIMA. Under the terms of its license, the Subsidiary istheir respective licenses, Oxbridge Reinsurance Limited and Oxbridge Re NS are required to maintain a minimum and prescribed capital requirement of $500 in accordance with the Subsidiary’srelevant subsidiary’s approved business plan filed with CIMA. CIMA.

At September 30, 2017, the Subsidiary’s2023, Oxbridge Reinsurance Limited’s net worth of $1.8$1.06 million exceeded the minimum and prescribed capital requirement. For the three and nine-month periods ended September 30, 2017,2023, the Subsidiary’s net loss was approximately $22.9$7.65 million and $20.9$8.16 million, respectively.

28
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
Notes to Consolidated Financial Statements (unaudited)

At September 30, 2017

2023, Oxbridge Re NS’ net worth of $186,000 exceeded the minimum and prescribed capital requirement. For the three and nine-month periods ended September 30, 2023, the Subsidiary’s net income was approximately $30,000 and $31,000, respectively.

The Subsidiary isCompany’s reinsurance subsidiaries are not required to prepare separate statutory financial statements for filing with CIMA, and there were no material differences between the Subsidiary’sreinsurance subsidiaries’ GAAP capital, surplus and net income,loss , and its statutory capital, surplus and net incomeloss as of September 30, 20172023 or for the period then ended.

23

11. 

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2023

13. FAIR VALUE AND CERTAIN RISKS AND UNCERTAINTIES

Fair values

With the exception of balances in respect of insurance contracts (which are specifically excluded from fair value disclosures under GAAP) and investment securities as disclosed in Note 4 of these consolidated financial statements, the carrying amounts of all other financial instruments, which consist of cash and cash equivalents, restricted cash and cash equivalents, accrued interest and dividends receivable, premiums receivable and other receivablesassets, notes payable and accounts payable and accruals,other liabilities, approximate their fair values due to their short-term nature.

Concentration of underwriting risk

A substantial portion of the Company’s current reinsurance business ultimately relates to the risks of two entities domiciled in Florida in the United States, onea limited number of which is under common directorship;entities; accordingly, the Company’s underwriting risks are not significantly diversified.

Concentrations of Credit risk

and Counterparty Risk

The Company is exposedmarkets retrocessional and reinsurance policies worldwide through its brokers. Credit risk exists to credit risk in relationthe extent that any of these brokers may be unable to counterparties that may default onfulfill their contractual obligations to the Company. For example, the Company is required to pay amounts owed on claims under policies to brokers, and these brokers, in the Company. In some jurisdictions, if a broker fails to make such a payment, the Company might remain liable to the ceding company for the deficiency. In addition, in certain jurisdictions, when the ceding company pays premiums for these policies to brokers, these premiums are considered to have been paid and the ceding insurer is no longer liable to the Company for those amounts, whether or not the premiums have actually been received.

The amount of counterparty credit risk predominantly relatesCompany remains liable for losses it incurs to premiums receivable,the extent that any third-party reinsurer is unable or unwilling to make timely payments under reinsurance recoverable and assets held with counterparties. agreements. The Company would also be liable in the event that its ceding companies were unable to collect amounts due from underlying third-party reinsurers.

The Company mitigates its concentrations of credit and counterparty credit risk by using reputable and several counterparties which decreases the likelihood of any significant concentration of credit risk with any one counterparty. In addition, the Company is exposed to credit risk on fixed-maturity debt instruments to the extent that the debtors may default on their debt obligations.

Market risk

Market risk exists to the extent that the values of the Company’s monetary assets fluctuate as a result of changes in market prices. Changes in market prices can arise from factors specific to individual securities or their respective issuers, or factors affecting all securities traded in a particular market. Relevant factors for the Company are both volatility and liquidity of specific securities and markets in which the Company holds investments. The Company has established investment guidelines that seek to mitigate significant exposure to market risk.

24

29

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY

SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2017

12. COMMITMENTS AND CONTINGENCIES
2023

14. LEASES

Operating lease right-of-use assets and operating lease liabilities are disclosed as line in the consolidated balance sheet. We determine if a contract contains a lease at inception and recognize operating lease right-of-use assets and operating lease liabilities based on the present value of the future minimum lease payments at the commencement date. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Lease agreements that have lease and non-lease components, are accounted for as a single lease component. Lease expense is recognized on a straight-line basis over the lease term.

The Company has antwo operating lease obligations namely for the Company’s office spacefacilities located at Strathvale House,2nd Floor, 90 North ChurchSuite 201, 42 Edward Street Grand Cayman, Cayman Islands and residential space at Turnberry Villas in Grand Cayman, Cayman Islands. The office lease has a remaining lease term of approximately five (5) months and includes an option to extend the lease. Under the terms of the lease, the Company also has the right to terminate the lease after thirty-six (36) months upon giving appropriate notice in writing to the Lessor. The residential lease has a remaining lease term of approximately three (3) months.

The components of lease expense and other lease information as of and during the nine-month periods ended September 30, 2023 and 2022 are as follows:

SCHEDULE OF OPERATING LEASE COST

  For the Nine-Month
Period Ended		  For the Nine-Month
Period Ended		 
(in thousands) September 30, 2023  September 30, 2022 
Operating Lease Cost (1) $    76  $    72 
         
Cash paid for amounts included in the measurement of lease liabilities        
Operating cash flows from operating leases $76  $72 

(1)Includes short-term leases

SCHEDULE OF OPERATING LEASE OBLIGATIONS

(in thousands) At
September 30, 2023		  At
December 31, 2022		 
Operating lease right-of-use assets $35  $44 
         
Operating lease liabilities $35   $44 
        
Weighted-average remaining lease term - operating leases  0.37 years   1.17 years
         
Weighted-average discount rate - operating leases  7.62%  6.50%

Future minimum lease payments under non-cancellable leases as of September 30, 2023 and December 31, 2022, reconciled to our discounted operating lease liability presented on the consolidated balance sheet are as follows:

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS

(in thousands) At
September 30, 2023		  At
December 31, 2022		 
Remainder of 2023  26   40 
2024  9   6 
Thereafter  -   - 
Total future minimum lease payments $35  $46 
         
Less imputed interest  -   (2)
Total operating lease liability $35   44 

25

OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

September 30, 2023

15. RELATED PARTY TRANSACTIONS

Administrative Services Agreement

Commencing on the effective date of the SPAC’s IPO, the Sponsor agreed to pay the Company a total of up to $10,000 per month, for office space, utilities, secretarial and administrative support to the Sponsor and the SPAC. Upon completion of the SPAC’s initial Business Combination on August 10th, the Sponsor ceased paying these monthly fees. For the nine-month period ended September 30, 2023, the Company recorded $80,000 income from the Sponsor under the Administrative Services Agreement, which is thirty-eight monthsincluded in “net investment and commencedother income” in the consolidated statements of operations.

Participating Notes

During the year ending December 31, 2021, Mr. Jay Madhu, a director and officer of the Company and its subsidiaries, invested a principal amount of $68,000 in Series 2020-1 participating notes. During the nine-month period ended September 30, 2023, Mr. Madhu received a payment of $76,000 representing partial redemption of principal and return on April 17, 2015. Rent expense under this leaseinvestment.

DeltaCat Re Tokens

During the nine-month period ended September 30, 2023, Mr. Jay Madhu, a director and officer of the Company and its subsidiaries, entered into subscription agreement to purchase a total of 6,200 Series DeltaCat Re tokens at a purchase price of $10.00 per token for aggregate gross proceeds of $62,000. Ownership of DeltaCat Re tokenized reinsurance securities indirectly confers fractionalized interests in reinsurance contracts underwritten by Oxbridge Re NS for the three2023-2024 treaty year.

TypTap Insurance Company (“TypTap”) Contract

During the three-month and nine-month periods ended September 30, 2017 was $14,700 and $44,100, respectively, and lease commitments at September 30, 2017 were $47,000.

The2023 the Company also has an operating lease for residential space at Britannia Villas #616, Grand Cayman, Cayman Islands that runs through October 31, 2017. Rent expense under this lease for the three and nine-month periods ended September 30, 2017 was $12,900 and $38,700 respectively, and lease commitments at September 30, 2017 were $4,300.
13. RELATED PARTY TRANSACTIONS
The Company has entered into a reinsurance agreementsagreement with CladdaughTypTap, an insurance subsidiary of HCI Group, Inc., which is a related entity through common directorship. At September 30, 2017 and December 31, 2016,2023, included within loss experience refund payablepremium receivable, deferred acquisition costs and unearned premiums reserve on the consolidated balance sheets are amounts equal to $733,000, $80,000 and $732,000 respectively, relating to the following related-party amounts:
 
 
At September 30, 2017
 
 
At December 31, 2016
 
 
 
(in thousands)
 
 
 
 
 
 
 
 
Loss experience refund payable
 $- 
 $1,470 
Unearned premiums reserve
 $2,367 
 $1,417 
reinsurance agreement with TypTap. During the threethree-month and nine-month periods ended September 30, 2017 and 2016,2023, included within assumed premiums, change in loss experience refund payableunearned premium reserve and change in unearned premiums reservepolicy acquisition costs and underwriting expenses on the consolidated statements of income are amounts equal to $NIL, ($274,000) and $30,000 for the following related-party amounts:
 
 
Three Months Ended
 
 
Nine Months Ended
 
 
 
September 30,
 
 
September 30,
 
 
 
2017
 
 
2016
 
 
2017
 
 
2016
 
 
 
(in thousands)
 
 
 
 
 
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
Assumed premiums
  - 
  - 
  3,400 
  3,400 
Change in loss experience refund payable
  2,730 
  (630)
  1,470 
  (1,890)
Change in unearned premiums reserve
  4,150 
  850 
  2,450 
  (875)
30
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARY
three- month period and $1,099,000, ($366,000) and $40,000, for the nine- month period, respectively.

Bridge Loan with Affiliate

On September 11, 2023, the Company, along with seven (7) other investors, entered into a binding term sheet (“Bridge Agreement”) with Jet.AI to provide Jet.AI with an aggregate sum of $500,000 of short-term bridge financing pending its receipt of funds from its other existing financing arrangements. During the month of September 2023, and prior to the Bridge Agreement, Jet.AI had engaged in discussions with numerous third parties to secure short-term bridge funding but was not offered terms it found acceptable.

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. Jet.AI is required to Consolidated Financial Statements (unaudited)

September 30, 2017
14.  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. Jet.AI 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 Jet.AI. In an event of default, the outstanding principal amount of the Notes will increase by 120%, and the company may convert its Note into shares of common stock of Jet.AI at the conversion price set forth in the Bridge Agreement with registration rights associated with those shares.

The Company invested the sum of $100,000 in the Notes and is recorded as “Loan Receivable” on the consolidated balance sheet.

16. SUBSEQUENT EVENTS

We evaluate all subsequent events and transactions for potential recognition or disclosure in our consolidated financial statements.

There were no other events subsequent to September 30, 2023, for which disclosure was required.

26

On November 12, 2017, the Company’s board of directors decided to suspend the Company’s regular $0.12 quarterly cash dividend, with the suspension to commence with the dividend that would have otherwise been payable for the third quarter of 2017.  The board of directors intends to reconsider in the future the payment of a quarterly cash dividend, but the timing of such reconsideration has not been determined, and there is no intention to resume dividend payments in the foreseeable future, if at all.   Any decision to resume dividend payments will be dependent upon a variety of factors, including the state of the Company’s business as well as general market conditions at the time of reconsideration, and there is no assurance that dividend payments will recommence. Additionally, and in recognition of its dividend suspension, the Company has also decided to suspend the payment of non-employee director fees, effective October 1, 2017, which had been $30,000 per director per annum.


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

SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q, including in this Management’s Discussion and Analysis, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements generally are identified by the words “believe,” “project,” “predict,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the section entitled “Risk Factors” contained in our Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 13, 2017.30, 2023. We undertake no obligation to publicly update or revise any forward -looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned not to place undue reliance on the forward -looking statements which speak only to the dates on which they were made.

GENERAL

The following is a discussion and analysis of our results of operations for the three and nine-month periods ended September 30, 20172023 and 20162022 and our financial condition as of September 30, 20172023 and December 31, 2016.2022. The following discussion should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and in our Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 13, 2017.30, 2023. References to “we,” “us,” “our,” “our company,” or “the Company” refer to Oxbridge Re Holdings Limited and its wholly-owned subsidiary,subsidiaries, Oxbridge Reinsurance Limited and Oxbridge Re NS, unless the context dictates otherwise.

Overview

and Trends

We are primarily a Cayman Islands specialtyprovider of tokenized Real World Assets (“RWA”) as Tokenized Reinsurance Securities and reinsurance business solutions to property and casualty reinsurer that provides reinsurance solutionsinsurers in the Gulf Coast region. Our Tokenized Reinsurance Securities are provided through our RWA Web3 focused subsidiary, SurancePlus Inc., and our reinsurance business solutions are provided through our reinsurance subsidiaries, Oxbridge Reinsurance Limited and Oxbridge Re NS. Oxbridge Re NS functions as a reinsurance sidecar which increases the underwriting capacity of Oxbridge Reinsurance Limited. Oxbridge Re NS issues participating notes to third party investors, the proceeds of which are utilized to collateralize Oxbridge Reinsurance Limited’s reinsurance obligations. We focus on underwriting fully-collateralizedfully collateralized reinsurance contracts primarily for property and casualty insurance companies in the Gulf Coast region of the United States, with an emphasis on Florida. We specialize in underwriting medium frequency, high severity risks, where we believe sufficient data exists to analyze effectively the risk/return profile of reinsurance contracts.

We underwrite reinsurance contracts on a selective and opportunistic basis as opportunities arise based on our goal of achieving favorable long-term returns on equity for our shareholders. Our goal is to achieve long-term growth in book value per share by writing business that generates attractive underwriting profits relative to the risk we bear. Unlike other insurance and reinsurance companies, we do not intend to pursue an aggressive investment strategy and instead will focus our business on underwriting profits rather than investment profits. However,Additionally, we intend to complement our underwriting profits with investment profits on an opportunistic basis. Our primaryunderwriting business focus is on fully collateralized reinsurance contracts for property catastrophes, primarily in the Gulf Coast region of the United States, with an emphasis on Florida.States. Within that market and risk category, we attempt to select the most economically attractive opportunities across a variety of property and casualty insurers. As we attempt to grow our capital base, grows, however, we expect that we will consider further growth opportunities in other geographic areas and risk categories.

27


Our level of profitability is primarily determined by how adequately our premiums assumed and investment income cover our costs and expenses, which consist primarily of acquisition costs and other underwriting expenses, claim payments and general and administrative expenses. One factor leading to variation in our operational results is the timing and magnitude of any follow-on offerings we undertake (if any), as we would beare able to deploy new capital to collateralize new reinsurance treaties and consequently, earn additional premium revenue. In addition, our results of operations may be seasonal in that hurricanes and other tropical storms typically occur during the period from JuneSeptember 1 through November 30. Further, our results of operations may be subject to significant variations due to factors affecting the property and casualty insurance industry in general, which include competition, legislation, regulation, general economic conditions, judicial trends, and fluctuations in interest rates and other changes in the investment environment.

Because we employ an opportunistic underwriting and investment philosophy, period-to-period comparisons of our underwriting results may not be meaningful. In addition, our historical investment results may not necessarily be indicative of future performance. Due to the nature of our reinsurance and investment strategies, our operating results will likely fluctuate from period to period.

Compared to most of our competitors, we are small and have low overhead expenses. We believe that our expense efficiency, agility and existing relationships support our competitive position and allows us to profitably participate in lines of business that fit within our strategy. Over time we expect our expense advantage to erode as the industry acts to reduce frictional costs.

Recent Developments

Oxbridge Acquisition Corp.

On November 12, 2017, the Company’s board of directors decided to suspend the Company’s regular $0.12 quarterly cash dividend, with the suspension to commence with the dividend that would have otherwise been payable for the third quarter of 2017.  The board of directors intends to reconsiderAugust 16, 2021, Oxbridge Acquisition Corp. (“Oxbridge Acquisition” or “the SPAC”), a Cayman Islands special purpose acquisition company in the future the payment of a quarterly cash dividend, but the timing of such reconsideration has not been determined, and there is no intention to resume dividend payments in the foreseeable future, if at all.   Any decision to resume dividend payments will be dependent upon a variety of factors, including the state of the Company’s business as well as general market conditions at the time of reconsideration, and there is no assurance that dividend payments will recommence. Additionally, and in recognition of its dividend suspension,which the Company has also decidedan indirect investment through its wholly-owned licensed reinsurance subsidiary Oxbridge Reinsurance Limited (“OXRE”), announced the closing of an initial public offering of units (“Units”). In the initial public offering, Oxbridge Acquisition sold an aggregate of 11,500,000 Units at a price of $10.00 per unit, resulting in total gross proceeds of $115,000,000. Each Unit consisted of one Class A ordinary share and one redeemable warrant, with each warrant entitling the holder thereof to suspendpurchase one Class A ordinary share of Oxbridge Acquisition at a price of $11.50 per share.

The initial public offering of Oxbridge Acquisition was sponsored by OAC Sponsor Ltd. (“Sponsor”). In connection with Oxbridge Acquisition’s initial public offering, Sponsor purchased from Oxbridge Acquisition, simultaneous with the paymentclosing of non-employee director fees, effective October 1, 2017,the initial public offering, an aggregate of 4,897,500 warrants at a price of $1.00 per warrant ($4,897,500 in the aggregate) in a private placement (the “Private Placement Warrants”). Each Private Placement Warrant was exercisable to purchase one Class A ordinary share of Oxbridge Acquisition at $11.50 per share. In addition, Sponsor held 2,875,000 shares of the Class B ordinary shares of Oxbridge Acquisition, representing 20% of the outstanding shares of Oxbridge Acquisition (the “Class B Shares”).

In connection with the organization of Sponsor, OXRE placed approximately 34.7% of the risk capital and owns approximately 49.6% and 63.1% of the ordinary shares and preferred shares, respectively, of the Sponsor (the “Sponsor Equity Interest”). The preferred shares of Sponsor were nonvoting shares and generally entitle the holders thereof to receive the net proceeds, if any, received by Sponsor from the sale, exchange, or disposition of the Private Placement Warrants or the shares issuable upon the exercise thereof, and the ordinary shares of Sponsor (which are voting shares in Sponsor) will generally be equivalent to the value of the Class B Shares of Oxbridge Acquisition held by Sponsor.

28

On August 11, 2021, OXRE entered into a Share Purchase Agreement with Sponsor (the “Share Purchase Agreement”) under which OXRE purchased the Sponsor Equity Interest for an aggregate purchase price of $2,000,000 (the “Share Purchase Agreement”). Under the Share Purchase Agreement, OXRE acquired an aggregate of 1,500,000 ordinary shares and 3,094,999 preferred shares of Sponsor.

On November 14, 2022, OXRE entered into a Second Share Purchase Agreement with Sponsor (the “Second Share Purchase Agreement”) under which OXRE acquired an additional 285,000 ordinary shares of Sponsor for an aggregate purchase price of $285,000.

In addition to the foregoing, the Initial Share Purchase Agreement and the Second Share Purchase Agreement contains customary representations, warranties, and covenants.

On November 9, 2022, Oxbridge Acquisition held an extraordinary general meeting (the “EGM”) of shareholders. At the EGM, Oxbridge Acquisition’s shareholders were presented the proposals to extend the date by which Oxbridge Acquisition must consummate a business combination from November 16, 2022 to August 16, 2023 (or such earlier date as determined by Oxbridge Acquisition’s Board) by amending Oxbridge Acquisition’s Amended and Restated Memorandum and Articles of Association (the “Extension Amendment Proposal”). The Extension Amendment Proposal to amend Oxbridge Acquisition’s Amended and Restated Memorandum and Articles of Association (“Charter Amendment”) was approved.

In connection with the Extension Amendment Proposal, the Sponsor agreed to contribute to Oxbridge Acquisition a loan of $575,000 (the “Extension Loan”), to be deposited into Oxbridge Acquisition’s Trust Account to extend the Termination Date from November 16, 2022 to August 16, 2023. On November 14, 2022, the Company subscribed for additional ordinary shares in the Sponsor for an amount of $285,000, representing the Company’s pro-rata portion of the Extension Loan. As such, the Company’s Sponsor Equity Interest remained at approximately 49.6% and 63.1% of the ordinary shares and preferred shares, respectively, of the Sponsor.

On February 28, 2023, the Company announced in a press release that Oxbridge Acquisition filed a Current Report on Form 8-K with the Securities and Exchange Commission in connection with Oxbridge Acquisition’s business combination with Jet Token Inc. (“Jet”), a Delaware based company. Upon the closing of the transaction, the combined company will be named Jet.AI Inc. Jet offers fractional aircraft ownership, jet card, aircraft brokerage and charter service through its fleet of private aircraft and those of Jet’s Argus Platinum operating partner. Jet’s charter app enables travelers to look, book and fly. The funding and capital markets access from this transaction is expected to enable Jet to continue its growth strategy of AI software development and fleet expansion. The business combination was completed on August 10, 2023.

The Company’s wholly-owned licensed reinsurance subsidiary, Oxbridge Reinsurance Limited (“Oxbridge Reinsurance”), was the lead investor in Oxbridge Acquisition’s sponsor and held the equivalent of 1,426,180 ordinary shares and 3,094,999 public warrants.

Bridge Loan with Affiliate

On September 11, 2023, the Company, along with seven (7) other investors, entered into a binding term sheet (“Bridge Agreement”) with Jet.AI to provide Jet.AI with an aggregate sum of $500,000 of short-term bridge financing pending its receipt of funds from its other existing financing arrangements. During the month of September 2023, and prior to the Bridge Agreement, Jet.AI had been $30,000engaged in discussions with numerous third parties to secure short-term bridge funding but was not offered terms it found acceptable.

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 director per annum.
annum and mature on March 11, 2024. Jet.AI 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. Jet.AI 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 Jet.AI. In an event of default, the outstanding principal amount of the Notes will increase by 120%, and the company may convert its Note into shares of common stock of Jet.AI at the conversion price set forth in the Bridge Agreement with registration rights associated with those shares.

The Company invested the sum of $100,000 in the Notes and is recorded as “Loan Receivable” on the consolidated balance sheet.

29


PRINCIPAL REVENUE AND EXPENSE ITEMS

Revenues

We derive our most significant revenues from twothree principal sources:

●premiums assumed from reinsurance on property and casualty business; and
●income from investments.

●premiums assumed from reinsurance on property and casualty business;
●income from investments and unrealized gain (loss) on other investments;
●

income under our Administrative Services Agreement

●income from SurancePlus ITOM fees.

Premiums Assumed

Premiums assumed include all premiums received by a reinsurance company during a specified accounting period, even if the policy provides coverage beyond the end of the period. Premiums are earned over the term of the related policies. At the end of each accounting period, the portion of the premiums that are not yet earned are included in the unearned premiums reserve and are realized as revenue in subsequent periods over the remaining term of the policy. Our policies typically have a term of twelve months. Thus, for example, for a policy that is written on July 1, 2017,2023, typically one-half of the premiums will be earned in 20162023 and the other half will be earned during 2017.2024. However, in the event of limit losses on our policies, as we have experienced during the quarter ended September 30, 2017, premium recognition has beenwill be accelerated to match losses incurred in the period, aswhen there is no possibility of any future treaty-year losses under the contracts.

Premiums from reinsurance on property and casualty business assumed are directly related to the number, type and pricing of contracts we write.

Premiums assumed are recorded net of change in loss experience refund, which consists of changes in amounts due to the cedants under two of our reinsurance contracts. These contracts contain retrospective provisions that adjust premiums in the event losses are minimal or zero. We recognize a liability pro-rata over the period in which the absence of loss experience obligates us to refund premiums under the contracts, and we will derecognize such liability in the period in which a loss experience arises. The change in loss experience refund is negatively correlated to loss and loss adjustment expenses described below.


Investment Income

Income from our investments is primarily comprised of net realized and unrealized gains (losses) interest income dividends and net realized gainsdividends on investment securities. Such income is primarily from the Company’s investments, which includes other investments in Oxbridge Acquisition Corp. and investments held in trust accounts that collateralize the reinsurance policies that we write. The investment parameters for trust accounts are generally be established by the cedant for the relevant policy.

Administrative Services Agreement

Commencing on the effective date of the SPAC’s IPO, the Sponsor agreed to pay the Company a total of up to $10,000 per month for office space, utilities, secretarial and administrative support to the Sponsor and the SPAC. Upon completion of the SPAC’s initial Business Combination on August 10th, the Sponsor ceased paying these monthly fees. For the nine months ended September 30, 2023, the Company recognized $80,000 in connection with this agreement. In addition, for the nine-month periods ended September 30, 2023 and 2022, the Company recorded other income of $80,000 and $90,000, from the Sponsor under the Administrative Services Agreement, which is included in “net investment and other income” in the consolidated statements of operations.

30

Incentive, Technology, Origination and Management Fee Income

During the nine-month period ending September 30, 2023, the Company’s subsidiary, SurancePlus Inc., entered into subscriptions agreements for the sale of its Series DeltaCat Re tokens, representing fractionalized interest in reinsurance contracts underwritten by Oxbridge Re NS. The tokens were issued on the Avalanche blockchain.

SurancePlus receives an incentive, technology, origination and management (ITOM) fee to cover costs associated with origination, structuring and the blockchain technology related to the tokens. These fees are included in SurancePlus fee income line item in the consolidated statement of operations.

Expenses

Our expenses consist primarily of the following:

●

●losses and loss adjustment expenses;
●policy acquisition costs and underwriting expenses; and
●general and administrative expenses.

Loss and loss adjustment expenses;

●policy acquisition costs and underwriting expenses; and
●general and administrative expenses.
Loss Adjustment Expenses

Loss and loss adjustment expenses are a function of the amount and type of reinsurance contracts we write and of the loss experience of the underlying coverage. As described below, loss and loss adjustment expenses are based on the claims reported by our Company’s ceding insurers, and may include an actuarial analysis of the estimated losses, including losses incurred during the period and changes in estimates from prior periods. Depending on the nature of the contract, loss and loss adjustment expenses may be paid over a period of years.

Policy Acquisition Costs and Underwriting Expenses

Policy acquisition costs and underwriting expenses consist primarily of brokerage fees, ceding commissions, premium taxes and other direct expenses that relate to our writing of reinsurance contracts. We amortize deferred acquisition costs over the related contract term.

General and Administrative Expenses

General and administrative expenses consist of salaries and benefits and related costs, including costs associated with our professional fees, rent and other general operating expenses consistent with operating as a public company.

31

RESULTS OF OPERATIONS

The following table summarizesis our resultsconsolidated statement of operations and performance ratios for the three and nine-month periods ended September 30, 20172023 and 20162022 (dollars in thousands, except per share amounts):


 
 
Three Months Ended
 
 
Nine Months Ended
 
 
 
September 30,
 
 
September 30,
 
 
 
2017
 
 
2016
 
 
2017
 
 
2016
 
 
 
(Unaudited)
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
Assumed premiums
 $- 
  - 
 $18,256 
  15,065 
Premiums ceded
  (733)
  - 
  (880)
  - 
Change in loss experience refund payable
  2,730 
  (2,089)
  1,470 
  (4,465)
Change in unearned premiums reserve
  17,309 
  4,007 
  4,494 
  (3,955)
 
    
    
    
    
Net premiums earned
  19,306 
  1,918 
  23,340 
  6,645 
Net realized investment(losses) gains
  (104)
  122 
  (56)
  256 
Net investment income
  128 
  126 
  341 
  327 
 
    
    
    
    
Total revenue
  19,330 
  2,166 
  23,625 
  7,228 
 
    
    
    
    
Expenses
    
    
    
    
Losses and loss adjustment expenses
  41,400 
  (1,248)
  42,427 
  1,030 
Policy acquisition costs and underwriting expenses
  514 
  83 
  672 
  211 
General and administrative expenses
  370 
  346 
  1,094 
  1,087 
 
    
    
    
    
Total expenses
  42,284 
  (819)
  44,193 
  2,328 
 
    
    
    
    
Net (loss) income
 $(22,954)
  2,985 
 $(20,568)
  4,900 
 
    
    
    
    
 
    
    
    
    

    
    
    
    
Basic (loss) earnings per share
 $(3.97)
  0.50 
 $(3.53)
  0.81
 
Diluted (loss) earnings per share
  (3.97)
  0.50
 
  (3.53)
  0.81
 
 
    
    
    
    
Dividends paid per share
 $0.12 
  0.12 
 $0.36 
  0.36 
 
    
    
    
    
 
    
    
    
    
Performance ratios to net premiums earned:
    
    
    
    
Loss ratio
  214.4%
  -65.1%
  181.8%
  15.5%
Acquisition cost ratio
  2.7%
  4.3%
  2.9%
  3.2%
Expense ratio
  4.6%
  22.4%
  7.6%
  19.5%
Combined ratio
  219.0%
  -42.7%
  189.3%
  35.0%

  Three Months Ended September, 30  Nine Months Ended September 30, 
  2023  2022  2023  2022 
             
Revenue                
Assumed premiums $-   -   2,195   705 
Premiums ceded  -   -   -   (60)
Change in unearned premiums reserve  549   591   (1,463)  350 
                 
Net premiums earned  549   591   732   995 
SurancePlus fee income  -   -   300   - 
Net investment and other income  74   53   242   128 
Net realized investment gain  -   -   -   27 
Unrealized loss on other investments  (6,889)  (1,327)  (6,384)  (986)
Change in fair value of equity securities  (115)  (13)  (34)  (355)
                 
Total revenue  (6,381)  (696)  (5,144)  (191)
                 
Expenses                
Losses and loss adjustment expenses  -   1,073   -   1,073 
Policy acquisition costs and underwriting expenses  60   65   80   110 
General and administrative expenses  628   323   1,708   1,050 
                 
Total expenses  688   1,461   1,788   2,233 
                 
Loss before income attributable to noteholders and tokenholders  (7,069)  (2,157)  (6,932)  (2,424)
Income attributable to noteholders and tokenholders  (231)  -   (311)  (43)
                 
Net loss $(7,300)  (2,157)  (7,243)  (2,467)
                 
Loss per share                
Basic and Diluted $(1.24)  (0.37)  (1.23)  (0.43)
                
Weighted-average shares outstanding                
Basic and Diluted  5,870,234   5,781,587   5,866,083   5,771,506 
                 
Performance ratios to net premiums earned:                
                 
Loss ratio  0.0%  181.6%  0.0%  107.8%
Acquisition cost ratio  10.9%  11.0%  10.9%  11.1%
Expense ratio  125.3%  65.7%  244.3%  116.6%
Combined ratio  125.3%  247.2%  244.34%  224.4%

General. Net loss for the quarter ended September 30, 20172023 was $23$7.3 million, or $3.97 per($1.24) basic and diluted earnings per share compared to a net incomeloss of $3$2.16 million, or $0.50 per($0.37) basic and diluted earnings per share, for the quarter ended September 30, 2016.2022. The significant decreaseincrease in net loss is wholly due to the triggeringunrealized loss on other investments during the third quarter of 2017 of limit losses on all our reinsurance contracts, due to the individual and collective impact of Hurricane Harvey, Hurricane Irma and Hurricane Maria on our book of business, compared with no catastrophic losses during the same quarter of the prior fiscal year.

ended September 30, 2023.

Net loss for the nine months ended September 30, 20172023 was $20.6$7.24 million or $3.53($1.23) per basic andor diluted loss per share compared to a net incomeloss of $4.9$2.47 million, or $0.81($0.43) per basic and diluted loss per share, for the nine months ended September 30, 2016.2022. The significant decrease is wholly due toincrease in net loss was the triggeringresult of unrealized loss on other investments and equity securities, more than offsetting the underwriting income and SurancePlus fee income during the third quarter of 2017 of limit losses on all our reinsurance contracts, due to the individual and collective impact of Hurricane Harvey, Hurricane Irma and Hurricane Maria on our book of business,nine months ended September 30, 2023 when compared with nominal losses during the previous nine-monthprior period.

Premium Income.Net premiums earned typically reflects the pro rata inclusion into income of premiums assumed (net of loss experience refund) over the life of the reinsurance contracts. However, given the limit losses experienced on all our reinsurance contracts during the third quarter of 2017, premiums recognition have not been deferred through the remaining lives of those contracts and have been accelerated into the third quarter, as there is no possibility of any future treaty-year losses under such contracts.


Net premiums earned for the quarter ended September 30, 2017 increased $17.4 million,2023 decreased to $19.3 million,$549,000 from $1.9 million$591,000 for the quarter ended September 30, 2016. The increase is wholly due to the acceleration of premium recognition due to full limit losses being incurred on all of our reinsurance contracts during the quarter ended September 30, 2017.2022.

32

Net premiums earned for the nine months ended September 30, 2017 increased $16.7 million,2023 decreased to $23.3 million,$732,000 from $6.6 million$995,000 for the nine months ended September 30, 2016.2022. The increasedecrease is wholly due to the acceleration of premium recognition on one of the Company’s reinsurance contract due to fulla limit losses being incurred on all of our reinsurance contractsloss suffered during the nine months ended September 30, 2017.

prior year.

Losses Incurred.Losses incurred for the quarter ended September 30, 2017 increased $42.6 million,2023 decreased to $41.4 million,$nil to from ($1.2 million),$1,073,000 for the quarter ended September 30, 2016.2022. The increasedecrease during the quarter ending September 30, 2017 is wholly due to the triggering of a limit lossesloss on alltwo of ourthe Company’s reinsurance contracts, due to the individual and collective impact of Hurricane Harvey, Hurricane Irma and Hurricane MariaIan on our book of business as well as adverse development on prior year claims, compared with no catastrophic losses during the same quarter of the prior fiscal year.

Losses incurred for the nine months endedin September 30, 2017 increased $41.4 million, to $42.4 million, from $1.0 million, for the nine months ended September 30, 2016. The increase during the nine months ended September 30, 2017 is wholly due to the triggering of limit losses on all of our reinsurance contracts, due to the individual and collective impact of Hurricane Harvey, Hurricane Irma and Hurricane Maria on our book of business, as well as adverse development on prior year claims, , compared with nominal loss and loss adjustment expenses during the nine-month period of the prior fiscal year.
2022.

Policy Acquisition Costs and Underwriting Expenses. Acquisition costs represent the amortization of the brokerage fees and federal excise taxes incurred on reinsurance contracts placed. Policy acquisition costs and underwriting expenses for the quarter ended September 30, 2017 increased $431 thousand,2023 decreased to $514 thousand$60,000 from $83 thousand$65,000 for the quarter ended September 30, 2016. The increase is due wholly due to the acceleration of premium recognition as mentioned above, and the resulting acceleration of policy acquisition costs.

2022.

Policy acquisition costs and underwriting expenses for the nine months ended September 30, 2017 increased $461 thousand,2023 decreased to $672 thousand$80,000 from $211 thousand$110,000 for the nine months ended September 30, 2016.2022. The increasedecrease is due wholly due to the acceleration of premium recognition due to limit loss suffered in prior period as mentioneddisclosed above, and the resultingcorresponding acceleration of policydeferred acquisition costs.

costs in the prior year.

General and Administrative Expenses.General and administrative expenses for the quarter ended September 30, 20172023 increased $24$305 thousand to $370 thousand,$628,000, from $346 thousand$323,000 for the quarter ended September 30, 2016.2022. The increase is not considered material and represents fluctuationdue to inflationary expense fluctuations during the quarter along with all the offering costs associated with the Maxim equity distribution agreement being recognized in general and administrative expenses between the quarters represented.

quarter.

General and administrative expenses for the nine months ended September 30, 2017 decreased $7 thousand,2023 increased to $1,094 thousand,$1,708,000, from $1,087 thousand$1,050,000 for the quarter ended September 30, 2022. The increase is due to expense fluctuations along with all the offering costs associated with Maxim equity distribution agreement being recognized during the nine-month period endedending September 30, 2016. The increase is not considered material and representsfluctuation in general and administrative expenses between the period represented.


2023.

MEASUREMENT OF RESULTS

We use various measures to analyze the growth and profitability of business operations. For our reinsurance business, we measure growth in terms of premiums assumed and we measure underwriting profitability by examining our loss, underwriting expense and combined ratios. We analyze and measure profitability in terms of net income and return on average equity.

Premiums Assumed.We use gross premiums assumed to measure our sales of reinsurance products. Gross premiums assumed also correlates to our ability to generate net premiums earned. See also the analysis above relating to the growth in net premiums earned.

Loss Ratio.The loss ratio is the ratio of losses and loss adjustment expenses incurred to premiums earned and measures the underwriting profitability of our reinsurance business. The loss ratio increaseddecreased from (65.1%)181.6% for the quarter end September 30, 2022 to 0% for the quarter ended September 30, 2016 to 214.4% for the quarter ended September 30, 2017.2023. The increase is primarily due to the multiple limit losses suffereddecrease during the quarter ended September 30, 2017, partially offset by2023, is wholly due to the limit losses suffered on one of our reinsurance contracts as a higher denominatorresult of Hurricane Ian in net premiums earned, compared with the previous quarter.

September 2022.

The loss ratio increaseddecreased from 15.5%107.8% for the nine monthsnine-month period ended September 30, 20162022 to 181.8%0% for the nine monthsnine-month period ended September 30, 2017.2023. The increasedecrease during the quarter ended September 30, 2023, is primarilywholly due to the multiple limit losses suffered during the nine months endedon one of our reinsurance contracts as a result of Hurricane Ian in September 30, 2017, partially offset by a higher denominator in net premiums earned, compared with the previous period.

2022.

Acquisition Cost Ratio.The acquisition cost ratio is the ratio of policy acquisition costs and other underwriting expenses to net premiums earned. The acquisition cost ratio measures our operational efficiency in producing, underwriting and administering our reinsurance business.

The acquisition cost ratio decreased from 4.3%marginally to 10.9% for the quarter ended September 30, 2016 to 2.7% for the quarter ended September 30, 2017. The decrease is due wholly to the acceleration of acquisition costs recognition mentioned earlier, more than offset by a larger denominator in net premiums earned, when compared with the three-month period ended September 30, 2016.

The acquisition cost ratio decreased from 3.2% for the nine months ended September 30, 2016 to 2.9% for the nine months ended September 30, 2017. The decrease is due wholly to the acceleration of acquisition costs recognition mentioned earlier, more than offset by a larger denominator in net premiums earned, when compared with the nine-month period ended September 30, 2016.2023.

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Expense Ratio.The expense ratio is the ratio of policy acquisition costs, other underwriting expenses and othergeneral and administrative expenses to net premiums earned. We use the expense ratio to measure our operating performance. The expense ratio decreasedincreased from 22.4% for the three-month period ended September 30, 2016 to 4.6% for the three-month period ended September 30, 2017. The decrease is due wholly to a significant increase in net premiums earned partially offset by increased policy acquisition costs as recorded during the three-month period ended September 30, 2017, when compared with the three-month period ended September 30, 2016.


The expense ratio decreased from 19.5%116.6% for the nine-month period ended September 30, 20162022 to 7.6%244.3% for the nine-month period ended September 30, 2017.2023. The decreaseincrease is due wholly to a significant increase in net premiums earned partially offset by increased policy acquisition costs as recordedhigher general administrative expenses incurred during the nine-month period ended September 30, 2017,2023, when compared with the nine-monthprior period ended September 30, 2016.

Combined Ratio.We use the combined ratio to measure our underwriting performance. The combined ratio is the sum of the loss ratio and the expense ratio. If the combined ratio is at or above 100%, we are not underwriting profitably and may not be profitable. The combined ratio increased from (42.7%) for the three-month period ended September 30, 2016 to 219% for the three-month period ended September 30, 2017. The increase in the combined ratio is due to a significantly higher loss ratio during the three-month period ended September 30, 2017 as mentioned above, when compared with the previous quarter.

The combined ratio increased from 35%224% for the nine-month period ended September 30, 20162022 to 189.3%244.3% for the nine-month period ended September 30, 2017.2023. The increase in the combined ratio is due to a significantly higher loss ratiogeneral administrative expenses incurred during the nine-month period ended September 30, 2017 as mentioned above,2023, when compared with the previous period.
prior period

FINANCIAL CONDITION – SEPTEMBER–SEPTEMBER 30, 20172023 COMPARED TO DECEMBER 31, 2016

2022

Restricted Cash and Cash Equivalents.As of September 30, 2017,2023, our restricted cash and cash equivalents decreased by $11.4$0.87 million, or 32%, to $24.2$1.85 million, from $35.7$2.72 million as of December 31, 2016.2022. The decrease is the net result of premium receipts andfunds being released from the underlying trusts for treaty year ending May 31, 2023 more than offsetting new collateral deposits more than offset by collateral returned on the expiration of reinsurance contracts, coupled with withdrawals by the cedants for settlement of losses under the reinsurance contracts during the nine-month period ended September 30, 2017.

treaty year ending May 31, 2024.

Investments.As of September 30, 2017,2023, our available-for-sale securitiestotal investments decreased by $2.1 million,$34 thousand or 20%,5% to $8.8 million,$608 thousand, from $11 million$642 thousand as of December 31, 2016.2022. The decrease is primarily a result of net salesthe decrease in value of fixed-maturity andthe equity securities during the nine-month period ended September 30, 2017.

Premiums Receivable2023.

Other investments.As of September 30, 2017,2023, our premiums receivableother investments decreased $6.38 million to $5.04 million from $11.42 million at December 31, 2022. The increase is due to fair value changes of our investment in Jet.AI in which the Company has an equity investment measured at fair value.

Notes Payable to Noteholders. As of September 30, 2023, our notes payable decreased by approximately $150 thousand, or 4%,$98,000 to $3.9 million,$118,000 from $4 million as of$216,000 at December 31, 2016.2022, The decrease is due to a return made to noteholders on the premiums assumed under new reinsurance contracts effective June 1, 2017, more than offset by the receipt of premium installments during the nine-month period ended September 30, 2017.

Loss Experience Refund Payable.As of September 30, 2017, our loss experience refund payable decreased by $1.5 million, or 100%, to $0, from $1.5 million at December 31, 2016. The decrease is wholly due to the derecognition of the liability as a result of the limit losses incurred under two of reinsurance contracts, which obligates us to refund premiums in the event there were no significant losses during the nine-month period ended September 30, 2017. Given the limit losses, no refund premiums are due, and as such, the loss experience refund payable liability was derecognized.

Unearned Premiums Reserve.As of September 30, 2017, our unearned premiums reserve decreased by $1 million, or 32%, to $2.4 million, from $3.4 million at December 31, 2016. The decrease is due primarily to the successful placement of reinsuranceunderlying contracts for theprevious treaty year effective June 1, 2017 more than offset by the acceleration of recognition of premiums due to the full limit losses on all of our contracts.
periods.

LIQUIDITY AND CAPITAL RESOURCES

General

We are organized as a holding company and provide administrative and management services to our subsidiaries, as well as to Oxbridge Acquisition Corp., a special purpose acquisition company, up to the time of its business combination with substantially no operations at the holding company level.Jet.AI Inc. in August 2023. Our operations are conducted through our sole reinsurance subsidiary,subsidiaries, Oxbridge Reinsurance Limited and Oxbridge Re NS and our web3 focused subsidiary SurancePlus Inc., which underwrites risks associated with our property and casualty reinsurance programs. We have minimal continuing cash needs at the holding company level, with such expensesneeds principally being related to the payment of administrative expenses and shareholder dividends. There are restrictions on Oxbridge Reinsurance Limited’s and Oxbridge Re NS’ ability to pay dividends which are described in more detail below.

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Sources and Uses of Funds

Our sources of funds primarily consist of premium receipts (net of brokerage fees and federal excise taxes, where applicable) and investment income, including interest, dividends and realized gains. We use cash to pay losses and loss adjustment expenses, other underwriting expenses, dividends, and general and administrative expenses. Substantially all of our surplus funds, net of funds required for cash liquidity purposes, are invested in accordance with our business plan and investment guidelines. Our investment portfolio, except for our investments in JetAI, is primarily comprised of cash and highly liquid securities, which can be liquidated, if necessary, to meet current liabilities. We believe that we have sufficient flexibility to liquidate any long-term securities that we own in a rising market to generate liquidity.

As of September 30, 2017,2023, we believe we had sufficient cash flows from operations to meet our liquidity requirements. We expect that our operational needs for liquidity will be met by cash, investment income and funds generated from underwriting activities. We have no plans to issue debt, and we expect to fund our operations for the foreseeable future from operating cash flows, as well as from potential future equity offerings. However, we cannot provide assurances that in the future we will not incur indebtedness to implement our business strategy, pay claims or make acquisitions.

Although Oxbridge Re Holdings Limited is not subject to any significant legal prohibitions on the payment of dividends, its subsidiaries Oxbridge Reinsurance Limited isand Oxbridge Re NS are subject to Cayman Islands regulatory constraints that affect its ability to pay dividends to us and include a minimum net worth requirement. Currently, the minimum net worth requirement for Oxbridge Reinsurance Limitedeach subsidiary is $500. As of September 30, 2017, Oxbridge Reinsurance Limited2023, each subsidiary exceeded the minimum required. By law, Oxbridge Reinsurance Limitedeach subsidiary is restricted from paying a dividend if such a dividend would cause its net worth to drop to less than the required minimum.

Our reinsurance operations exposed us to claims arising out of unpredictable catastrophic events during the third quarter of 2017. The incidence and severity of catastrophes are inherently unpredictable but the loss experience of property catastrophe reinsurers has been generally characterized as low frequency and high severity. Claims from catastrophic events have reduced our earnings and caused substantial volatility in our results of operations, and adversely affected our financial condition. The corresponding reduction in our surplus level will impact our ability to write new reinsurance policies at future renewal periods.

Cash Flows

Our cash flows from operating, investing and financing activities for the nine-month periods ended September 30, 20172023 and 20162022 are summarized below.

Cash Flows for the Nine months ended September 30, 20172023 (in thousands)

Net cash used in operating activities for the nine months ended September 30, 20172023 totaled $10,689,$1,356, which consisted primarily of cash received from net written premiums less cash disbursed for operating expenses and net loss payments. Net cash provided by investing activities of $7,347 was primarily due to the net sales of available-for-sale securities and the addition of collateral upon renewal or underwriting of new reinsurance contracts. Net cash used in financing activities totaled $3,152 representing net cash dividend payments and cash used to repurchase ordinary shares under the Company’s share repurchase plan.

Cash Flows for the Nine months ended September 30, 2016 (in thousands)
Net cash provided by operating activities for the nine months ended September 30, 2016 totaled $1,210, which consisted primarily of cash received from net written premiums less cash disbursed for operating expenses. Net cash used in investing activities totaled $105 which due mainly to investment in note receivable from Jet.AI. Net cash provided by financing activities was $1,182 which consisted primarily of net proceeds from Delta Cat Re Tokens offset by the payment made to noteholders.

Cash Flows for the Nine months ended September 30, 2022 (in thousands)

Net cash used in operating activities for the nine months ended September 30, 2022 totaled $682, which consisted primarily of cash received net written premiums less cash disbursed for operating expenses. Net cash used in investing activities of $2,257$376 was primarily due to the release of collateral renewal or underwriting of new reinsurance contracts, offset by the net purchases of available for saleequity securities. NetThere was no cash used in or provided by financing activities totaled $2,573 representing net cash dividend payments and cash used to repurchase ordinary shares under the Company’s share repurchase plan.

Share Repurchase Program
On May 12, 2016, the Board of Directors of Oxbridge Re Holdings Limited (the “Company”) authorized a share repurchase program (the “Share Repurchase Program”), pursuant to which the Company may, from time to time, purchase shares of its common stock for an aggregate repurchase price not to exceed $2 million. The plan expires on December 31, 2017. Share repurchases may be executed through various means, including, without limitation, open market transactions, privately negotiated transactions or tender offers. The repurchases will be funded from cash on hand or other capital markets sources. The stock repurchase program has been discontinued effective September 30, 2017.
The Company has adopted a Rule 10b5-1 share repurchase plan under the Securities Exchange Act of 1934 (the “Plan”) in connection with the Share Repurchase Program. The Plan allows the Company to repurchase its shares at times when it otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods. Because repurchases under the Plan are subject to certain pricing parameters, there is no guarantee as to the exact number of shares that will be repurchased under the Plan or that there will be any repurchases pursuant to the Plan. Subject to applicable regulations. On September 28, 2017, the Company cancelled the Plan. Through September 28, 2017, the Company had repurchased an aggregate of 326,413 shares for an aggregate cost of $1,803,568 under the Share Repurchase Program.

activities.

OFF-BALANCE SHEET ARRANGEMENTS

As of September 30, 2017,2023, we had no off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

35

EXPOSURE TO CATASTROPHES

Exposure to Catastrophes

As with other reinsurers, our operating results and financial condition could be adversely affected by volatile and unpredictable natural and man-made disasters, such as hurricanes, windstorms, earthquakes, floods, fires, riots and explosions. Although we attempt to limit our exposure to levels we believe are acceptable, it is possible that an actual catastrophic event or multiple catastrophic events could have a material adverse effect on our financial condition, results of operations and cash flows. As described under “CRITICAL ACCOUNTING POLICIES—Reserves for Losses and Loss Adjustment Expenses” below, under GAAP,accounting principles generally accepted in the United States of America (‘‘GAAP’’), we are not permitted to establish loss reserves with respect to losses that may be incurred under reinsurance contracts until the occurrence of an event which may give rise to a claim. As a result, only loss reserves applicable to losses incurred up to the reporting date may be established, with no provision for a contingency reserve to account for expected future losses.

CRITICAL ACCOUNTING POLICIES

We are required to make estimates and assumptions in certain circumstances that affect amounts reported in our consolidated financial statements and related footnotes. We evaluate these estimates and assumptions on an on-going basis based on historical developments, market conditions, industry trends and other information that we believe to be reasonable under the circumstances. These accounting policies pertain to fair value measurements, particular with respect to our beneficial interest in Oxbridge Acquisition Corp., premium revenues and risk transfer, reserve for loss and loss adjustment expenses, and the reporting of deferred acquisition costs.

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.

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 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. The fair value of our indirect investment in Oxbridge Acquisition Corp. is based on the fair value calculation made by an independent valuation expert utilizing observable and unobservable inputs. 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 and management 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. The categorization of a financial instrument within the hierarchy is based upon the pricing transparency of the instrument, as well as the marketability of the instrument and the risk of forfeiture of such instrument.

36

Premium Revenue and Risk Transfer. We record premiums revenue as earned pro-rata over the terms of the reinsurance agreements or period of risk, where applicable, and the unearned portion at the 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.

We account for reinsurance contracts in accordance with ASC 944, ‘‘Financial Services – Insurance.” Assessing whether or not a reinsurance contract meets the conditions for risk transfer requires judgment. The determination of risk transfer is critical to reporting premiums written. If we determine that a reinsurance contract does not transfer sufficient risk, we must account for the contract as a deposit liability.

Loss experience refund payable. Certain contracts include retrospective provisions that adjust premiums or result in profit commissions in the event losses are minimal or zero. Under such contracts, the Company expects to recognize aggregate liabilities payable to the ceding insurers assuming no losses occur during the contract period. 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 contract. 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 term, will reduce the liability should a catastrophic loss event covered by the Company occur.

Reserves for Losses and Loss Adjustment Expenses. We determine our reserves for losses and loss adjustment expenses on the basis of the claims reported by our ceding insurers and for losses incurred but not reported,IBNR, we utilizeuse 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.

We believe 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 income in the period in which they are determined.

Under GAAP, we are not permitted to establish loss reserves until the occurrence of an actual loss event. As a result, only loss reserves applicable to losses incurred up to the reporting date may be recorded, with no allowance for the provision of a contingency reserve to account for expected future losses. Losses arising from future events, which could be substantial, are estimated and recognized at the time the loss is incurred.

As ofat September 30, 2017, our best estimate for2023 we had no reserves for loss and loss adjustment expenses was $24.8 million, with IBNR representing approximately 8% of such reserves.

due to no significant events occurring during the year and no reported claims on contract in force. See Note 7 to the consolidated financial statements.

Our reserving methodology does not lend itself well to a statistical calculation of a range of estimates surrounding the best point estimate of our reserve for loss and loss adjustment expense. Due to the low frequency and high severity nature of claims within much of our business, our reserving methodology principally involves arriving at a specific point estimate for the ultimate expected loss on a contract by contractcontract-by-contract basis, and our aggregate loss reserves are the sum of the individual loss reserves established.

Deferred Acquisition Costs.We defer certain expenses that are directly related to and vary with producing reinsurance business, including brokerage fees on gross premiums assumed, premium taxes and certain other costs related to the acquisition of reinsurance contracts. These costs are capitalized and the resulting asset, deferred acquisition costs, is amortized and charged to expense in future periods as premiums assumed are earned. The method followed in computing deferred acquisition costs limits the amount of such deferral to its estimated realizable value. The ultimate recoverability of deferred acquisition costs is dependent on the continued profitability of our reinsurance underwriting. If our underwriting ceases to be profitable, we may have to write off a portion of our deferred acquisition costs, resulting in a further charge to income in the period in which the underwriting losses are recognized.

37

Stock-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 share purchase options at the grant date requires significant estimation and judgment. The Company uses an option-pricing model (Black-Scholes option pricing model) to assist in the calculation of fair value for share purchase options. The Company's shares have not been publicly traded for a sufficient length of time to solely use the Company's performance to reasonably estimate the expected volatility. Therefore, when estimating the expected volatility, the Company takes into consideration the historical volatility of similar entities. The Company considers factors such as an entity's industry, stage of life cycle, size and financial leverage when selecting similar entities. The Company uses a sample peer group of companies in the reinsurance industry as well as the Company’s own historical volatility in determining the expected volatility. Additionally, the Company uses the full life of the options, ten years, as the estimated term of the options, 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 expense related to all awards is included in general and administrative expenses.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk
Because we are

As a smaller reporting company as defined by Rule 229.10(f)(1) of the Exchange Act, we are not required to provide the information under this information.

item.

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer), we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 20172023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings

We are not currently involved in any litigation or arbitration. We anticipate that, similar to the rest of the insurance and reinsurance industry, we will be subject to litigation and arbitration in the ordinary course of business.

Item 1A.

Risk Factors

There have been no material changes to theour risk factors previously disclosedduring the nine months ended September 30, 2023. However, we draw attention to the below risk factors relating to our investment in Jet.AI Inc. that can have a material impact on our earnings and shareholders’ equity in the section entitled “Risk Factors”near term.

Our use of fair value accounting of our significant investment in Jet.AI Inc. could result in income statement volatility, which in turn, could cause significant market price and trading volume fluctuations for our Form 10-K,securities.

Our significant beneficial interests in Jet.AI Inc.’s common stock and public warrants are recorded at fair value with changes in fair value being recorded in the consolidated statement of operations during the period of change. Additionally, the fair value of the investment must be remeasured quarterly. Because of this, and due to significance of our investment in Jet.AI relative to our total assets, our earnings may experience greater volatility in the future as a decline in the fair value of our investment in Jet.AI Inc. could significantly reduce both our earnings and shareholders’ equity, which was filed with the Securitiesin turn, could cause significant market price and Exchange Commission on March 13, 2017.


trading volume fluctuations for our securities.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

(a)Sales of Unregistered Securities

None.

(b)Repurchases of Equity Securities

None.

(c)Use of Proceeds

None.

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(a)
Sales of Unregistered Securities
None.
(b)
Repurchases of Equity Securities
The table below summarizes the number of common shares repurchased during the three months ended September 30, 2017 under a share repurchase plan:    
For the Month Ended
 
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a)
 
 
Average Price Paid Per Share
 
 
Maximum Dollar Value of Shares That May Yet Be Purchased Under The Plans or Programs (b)
 
 
 
 
 
 
 
 
 
 
 
31-Jul-17
  12,974 
 $5.88 
 $510,439 
31-Aug-17
  18,282 
 $5.72 
 $405,948 
30-Sep-17
  41,491 
 $5.05 
 $196,432 
 
    
    
    
 
  72,747 
 $5.37 
    
(a)
The share repurchase plan approved by our Board of Directors on May 12, 2016 commenced in June 2016. The Plan was cancelled on September 28, 2017.
(b)
Represents the balances inclusive of commissions and fees at the end of each month.
(c)
Use of Proceeds
None.

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5.

Other Information

None.

Item 6.

Exhibits

The following exhibits are filed herewith:

Exhibit

No.

 Document
 
31.1
Certifications of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934.
 
31.2
Certifications of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934.
 
32
Written Statement of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350.
 
101
The following materials from Oxbridge Re Holdings Limited’s Quarterly Report on Form 10-Q for the quarter ended September 30, 20172023 are filed herewith, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income,Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Changes in Shareholders’ Equity and (vi) the Notes to Consolidated Financial Statements.

39


SIGNATURES

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 thereunto duly authorized.

 
OXBRIDGE RE HOLDINGS LIMITED
  
Date: November 14, 20172023
By: /s/
/s/ JAY MADHU

Jay Madhu

Chief Executive Officer and
President (Principal Executive Officer)

  
Date: November 14, 2017
By: /s/ WRENDON TIMOTHY                                                                        
Chief Executive Officer and President
 
(Principal Executive Officer)
Date: November 14, 2023By:/s/ WRENDON TIMOTHY

Wrendon Timothy

Chief Financial Officer and
Secretary (Principal
(Principal Financial Officer and Principal Accounting Officer)

PrincipalAccounting Officer)
40
45