OXRE(US:OXBR)2023-08-14 20:04Business Operations - Oxbridge Re Holdings Limited focuses on fully collateralized reinsurance contracts primarily for property and casualty insurance companies in the Gulf Coast region, especially Florida [151]. - During the six-month period ending June 30, 2023, SurancePlus Inc. entered into subscription agreements for the sale of its Series DeltaCat Re tokens, representing fractionalized interest in reinsurance contracts [175]. - The business combination with Jet Token Inc. was completed on August 10, 2023, enabling Jet to continue its growth strategy of AI software development and fleet expansion [165]. Financial Performance - Total revenue for the three months ended June 30, 2023, was $691,000, an increase of 37.5% compared to $503,000 for the same period in 2022 [181]. - Net premiums earned for the six months ended June 30, 2023, decreased to $183,000 from $404,000 for the same period in 2022, representing a decline of 54.7% [184]. - General and administrative expenses for the six months ended June 30, 2023, increased to $1.1 million, up from $728,000 in the same period in 2022, reflecting a rise of 50.9% [188]. - The combined ratio for the six months ended June 30, 2023, increased to 601.6% from 191.1% in the same period in 2022, indicating a significant decline in underwriting performance [195]. - Net loss for the quarter ended June 30, 2023, was $85,000, compared to a net income of $77,000 for the same period in 2022 [181]. Cash and Investments - As of June 30, 2023, restricted cash and cash equivalents decreased by $2.35 million, or 86%, to $0.37 million from $2.72 million as of December 31, 2022 [195]. - Total investments increased by $81,000, or 13%, to $723,000 as of June 30, 2023, from $642,000 as of December 31, 2022 [196]. - Other investments increased by $505,000 to $11.93 million from $11.42 million at December 31, 2022, due to fair value changes [197]. - Net cash used in operating activities for the six months ended June 30, 2023, totaled $1,614,000, compared to $475,000 for the same period in 2022 [206]. - Notes payable to noteholders decreased by $46,000 to $118,000 as of June 30, 2023, from $216,000 at December 31, 2022 [198]. Reserves and Losses - As of June 30, 2023, the company had no reserves for loss and loss adjustment expenses due to no significant events occurring during the year and no reported claims on contracts in force [221]. - The reserves for losses and loss adjustment expenses are based on claims reported by ceding insurers and independent actuary assistance, representing management's best estimate of ultimate settlement costs [218]. - The company believes its loss reserves are adequate, but acknowledges the uncertainty in predicting future events, which could lead to material differences in required settlement amounts [219]. - Under GAAP, the company cannot establish loss reserves until an actual loss event occurs, limiting reserves to losses incurred up to the reporting date [220]. - The company's reserving methodology involves arriving at a specific point estimate for expected losses on a contract-by-contract basis due to the low frequency and high severity nature of claims [222]. Revenue Recognition - The company records premium revenue as earned pro-rata over the terms of reinsurance agreements, with unearned premiums recorded as a reserve [215]. - The company assesses reinsurance contracts for risk transfer, which is critical for reporting premiums written; if insufficient risk is transferred, the contract is accounted for as a deposit liability [217]. Investment Valuation - The fair value of investments is based on the last traded price, with indirect investments evaluated by independent valuation experts using observable and unobservable inputs [214]. - The determination of what constitutes "observable" data requires significant judgment by the company's investment custodians and management [214].