OXRE(OXBR) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION This section provides a comprehensive overview of the company's financial performance, condition, and cash flows for the reporting period Item 1. Financial Statements The company's financial statements for the period ended June 30, 2025, reflect a significant increase in net loss to $2.01 million for the first six months, primarily driven by a $2.29 million loss from Hurricane Milton, while total assets and shareholders' equity grew, supported by $3.1 million raised from share issuances Consolidated Balance Sheets As of June 30, 2025, total assets increased to $9.17 million from $7.47 million at December 31, 2024, primarily due to higher cash and premiums receivable, while total liabilities rose to $2.69 million from $1.62 million, driven by an increase in unearned premiums and a new reserve for losses, consequently, total shareholders' equity grew to $5.28 million from $4.11 million, bolstered by recent capital raises Consolidated Balance Sheet Highlights (in thousands of U.S. Dollars) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $9,172 | $7,465 | | Cash and cash equivalents | $3,870 | $2,135 | | Restricted cash and cash equivalents | $2,783 | $3,758 | | Total Liabilities | $2,685 | $1,623 | | Reserve for losses and loss adjustment expenses | $175 | $0 | | Unearned premiums reserve | $2,037 | $991 | | Total Shareholders' Equity | $5,281 | $4,110 | Consolidated Statements of Operations For the three months ended June 30, 2025, the company reported a net loss of $1.87 million, compared to a loss of $0.82 million in the same period of 2024, primarily due to $2.29 million in losses and loss adjustment expenses, which were absent in the prior-year quarter, resulting in a six-month net loss of $2.01 million, compared to a $1.73 million loss in the first half of 2024 Consolidated Statements of Operations Summary (in thousands of U.S. Dollars, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net premiums earned | $582 | $564 | $1,176 | $1,113 | | Total revenue | $664 | $44 | $1,356 | $(81) | | Losses and loss adjustment expenses | $2,293 | $0 | $2,293 | $0 | | Net loss attributable to ordinary shareholders | $(1,873) | $(821) | $(2,012) | $(1,726) | | Basic and Diluted Loss per share | $(0.25) | $(0.14) | $(0.28) | $(0.29) | Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash used in operating activities increased significantly to $1.90 million from $0.31 million in the prior-year period, while investing activities provided $63,000, and a substantial inflow of $2.60 million from financing activities, mainly from the issuance of ordinary shares, resulted in a net increase in total cash and restricted cash of $760,000 Six Months Ended June 30 Cash Flow Summary (in thousands of U.S. Dollars) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,899) | $(311) | | Net cash provided by investing activities | $63 | $448 | | Net cash provided by financing activities | $2,596 | $103 | | Net change in cash | $760 | $240 | Notes to the Consolidated Financial Statements The notes detail the company's structure, accounting policies, and key financial events, including a $2.29 million loss from Hurricane Milton, resulting in a net reserve of $175,000 after payments, continued Web3 strategy through SurancePlus, and equity bolstered by a $2.7 million registered direct offering and ATM sales, with a new $5 million ATM facility established subsequent to the quarter's end - The company operates as a single segment focused on Web3 and Property and Casualty Reinsurance, primarily providing solutions to insurers in the U.S. Gulf Coast region and leveraging blockchain technology for tokenized reinsurance securities through its SurancePlus subsidiary[19][21] - A full limit loss of $2.29 million was recognized due to adverse loss development from Hurricane Milton. After advance payments of $2.12 million, the remaining reserve for this event was $175,000 as of June 30, 2025. The net impact on the company's equity, after accounting for tokenholders' share, is $1.18 million[91] - The company raised approximately $2.7 million in net proceeds from a registered direct offering in February 2025 and an additional $435,393 from its ATM program during the first six months of 2025[100][108] - Subsequent to the quarter end, on July 9, 2025, the company established a new Equity Distribution Agreement (ATM facility) to sell up to $5 million of ordinary shares[144] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the increased net loss for the second quarter and first half of 2025 to a full limit loss of $2.3 million on a reinsurance contract affected by Hurricane Milton, driving the loss ratio to 394% for the quarter, while general and administrative expenses also rose significantly due to increased costs associated with investor relations, the Web3 subsidiary's tokenization efforts, and legal expenditures, despite the loss, the company's financial condition strengthened due to successful capital raising activities, including a registered direct offering and ATM sales, which increased cash reserves and shareholder equity - The company's business focus includes both traditional, fully collateralized property catastrophe reinsurance and a developing Web3-focused business offering tokenized reinsurance securities through its subsidiary, SurancePlus[147][148][149] - SurancePlus completed a private placement of ZetaCat Re and EtaCat Re tokens on July 31, 2025, raising gross proceeds of $3.61 million to be invested in reinsurance contracts for the 2025-2026 treaty year[160] Key Performance Ratios | Ratio | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Loss ratio | 394.0% | 0.0% | 194.8% | 0.0% | | Expense ratio | 227.0% | 111.3% | 160.7% | 105.7% | | Combined ratio | 621.0% | 111.3% | 355.5% | 105.7% | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company is not required to provide information for this item as it qualifies as a smaller reporting company - As a smaller reporting company, Oxbridge Re Holdings Limited is exempt from providing quantitative and qualitative disclosures about market risk[227] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of June 30, 2025, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[229] - No changes occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[231] PART II – OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and required exhibits Item 1. Legal Proceedings The company is not currently involved in any litigation or arbitration - As of the filing date, the company is not involved in any litigation or arbitration[232] Item 1A. Risk Factors There have been no material changes to the company's risk factors during the six months ended June 30, 2025 - No material changes to risk factors were reported for the six-month period ending June 30, 2025[233] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the first six months of 2025, the company sold 97,715 ordinary shares through its "at the market" (ATM) program, generating net proceeds of $435,393, and a new ATM sales agreement for up to $5 million was established on July 9, 2025 ATM Program Sales Summary (H1 2025) | Metric | Value | | :--- | :--- | | Shares Sold | 97,715 | | Gross Proceeds | $448,858 | | Average Price per Share | $4.59 | | Net Proceeds | $435,393 | - On July 9, 2025, the company replaced its prior ATM sales agreement with a new one, allowing for the sale of up to $5 million of ordinary shares[234] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, which include the CEO and CFO certifications as required by the Sarbanes-Oxley Act and the financial statements formatted in XBRL - The exhibits filed include CEO/CFO certifications under Section 302 of the Sarbanes-Oxley Act, a written statement pursuant to 18 U.S.C. §1350, and financial data in XBRL format[241]