Q3 2023 Oxbridge Re Holdings Ltd Earnings Call

Speaker 1: is about to begin.

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Speaker 1: Good afternoon. Welcome to Oxbridge REES third quarter 2023 earnings call. My name is David and I'll be your conference operator this afternoon. At this time, all participants will be in listen only mode.

Good afternoon, welcome to <unk> third quarter 2023 earnings call. My name is David and I'll be your conference operator this afternoon.

At this time, all participants will be in a listen only mode.

Speaker 1: Joining us for today's presentation is Oxbridge Rees Chairman, President and Chief Executive Officer Jay Madhu and Chief Financial Officer and Corporate Secretary Rendon Timothy. Following their remarks, we will open up the call for your questions.

Joining us for today's presentation is Oxbridge Re's, Chairman, President and Chief Executive Officer, Jay Madhu, and Chief Financial Officer, and corporate Secretary Brendan Timothy following their remarks, we will open up the call for your questions I would like to remind everyone that this call is also being broadcast live via webcast.

Speaker 2: I would like to remind everyone that this call is also being broadcast live via webcast and available via webcast replay until November 28, 2023 on the investor information section of the Oxbridge REE website at www.oxbridgeree.com.

Cost and available via webcast replay until November 28, 2023.

Investor Information section of the Oxbridge re website at Www Dot Oxbridge re dot com.

Speaker 2: Now I'd like to turn the call over to Rendon Timothy, Chief Financial Officer of Oxbridge Re, who will provide the necessary cautions regarding the forward-looking statements that will be made by management during this call.

Now I'd like to turn the call over to <unk>, Timothy Chief Financial Officer of Oxbridge re who will provide the necessary cautions regarding the forward looking statements that will be made by management during this call.

Speaker 3: Thank you operator. During today's call there will be forward looking statements made regarding future events including expiratories with your financial performance.

Yes.

Thank you operator during today's call there will be forward looking statements made regarding future events, including Oxbridge re's future financial performance.

Speaker 3: These four looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995.

These forward looking statements are made pursuant to the private Securities Litigation Reform Act of 1995 words, such as anticipates estimates expects intends plans projects and other similar words on expression I intended to signify forward looking statements forward looking statements are not guarantees of future results.

Speaker 3: Words such as anticipates, estimates, expects, intends, plans, projects, and other similar words and expressions are intended to signify forward-looking

Speaker 3: For all looking statements are not guaranteed the future results and conditions but rather are subject to various risks and on

Patients would rather are subject to various risks and uncertainties.

Speaker 3: A detailed discussion of these 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 file on March 30, 2023 and our Form 10-K file today with the Securities and Exchange Commission.

A detailed discussion of these 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 on March 2023, and our Form 10-Q filed today.

With the Securities and Exchange Commission.

Speaker 3: The occurrence of any of these risks and uncertainties could have a material adverse effect on the company's business, financial condition, and the volatility of our earnings, which in turn can cause significant market price and trading volume fluctuations for us.

Growth of any of these risks and uncertainties could have a material adverse effect on the company's business financial condition and the <unk>.

Volatility of Olympians, which into and can cause significant market price and trading volume fluctuation fourth securities.

Any forward looking statements made on this conference call speak only as of the date of this conference call and except as required by law. The company undertakes no obligation to update any forward looking statements contained on this call or in any company presentation, even if the company's expectations or any related events conditions or circumstances change.

Speaker 3: Now I would like to turn the call over to our Chairman, President, and Chief Executive Officer, Jay Maddow.

Now I'd like to turn the call over to what Chairman, President and Chief Executive Officer, Jay Madhu G.

Speaker 3: Thank you, Rendon, and welcome everyone. Thank you for joining us today. Oxford Reholding Limited was founded 10 years ago with a mission to provide reinsurance solutions primarily to property and casualty insurers in the Gulf Coast region of the United States. We are also proud of the significant steps we have taken this year to fortify and diversify our business.

Thank you Brendon and welcome everyone. Thank you for joining US today Oxygenate holding limited was founded 10 years ago with a mission to provide reinsurance solutions, primarily to property and casualty insurers in the Gulf Coast region of the United States.

We're also proud of the significant steps we have taken this year to fortify and diversify our business.

Speaker 4: Our core business remains our licensed reinsurance subsidiary, Oxbridge Reinsurance Limited, and our licensed reinsurance sidecar, Oxbridge Re-NS, who write fully collateralized policies to cover poverty losses from specific catastrophes. And because we write fully collateralized contracts,

Our core business remains our licensed reinsurance subsidiary Oxbridge reinsurance limited and our licensed reinsurance sidecar Oxbridge re N S, who rightfully collateralized policies to cover property losses from specific catastrophes.

Because we are rightfully collateralized contracts.

Speaker 4: We believe we can compete effectively with large carriers. We specialize in underwriting low-frequency, high-severity risks, where we believe sufficient data exists to effectively analyze the risk-return profile.

We believe we can compete effectively with large carriers, we specialize in underwriting low frequency high severity risks, where we believe sufficient data exists to effectively analyze.

The risks, which aren't profile of reinsurance contracts.

Speaker 4: Our objective is to achieve long-term growth in book value per share by running business on a selective and opportunistic basis that will generate attractive underwriting profits relative to risk.

Our objective is to achieve long term growth and book value per share by writing business on a selective and opportunistic basis that will generate attractive underwriting profits relative to risk.

Speaker 4: Building on the Stable Reinsurance Foundation, we began to diversify our business in 2021 as a lead sponsor of Oxford Acquisition Corp., a special-purpose acquisition company, or SPAC, focusing on investing in disruptive technology.

Building on the stable reinsurance foundation, we began to diversify our business in 2021 as the lead sponsor of Oxford acquisition Corp. A special purpose acquisition company or spec focusing on investing in disruptive technologies and.

Speaker 4: In August this year, Oxbridge Acquisition successfully completed its business combination with JetToken, Inc. JetToken develops software and offers fractional aircraft ownership, JetCard, aircraft brokerage, and chartered to its fleet of private aircraft and those of operating partners.

In August this year, Oxford acquisition successfully completed its business combination with jet token ink jet token developed software and offers fractional aircraft ownership jet card aircraft brokerage and charter so its fleet a private aircraft and those of operating partners.

Speaker 4: It operates in two segments, software and aviation. The software segment features the B2B Charter GPT app and the B2B Jet.ai operator platform. The Charter GPT app uses natural language processing and machine learning to improve the private jet booking experience.

It operates in two segments software in aviation. The software segment features of the B to B charter GPT App and the beat to be Jack Dot AI operator platform.

GPT App uses natural language processing and machine learning to improve the private jet booking experience.

Speaker 4: The JIT AI Operator Platform operates a suite of standalone software products to enable FAA Part 135 Charter Providers to add revenue, maximize efficiency, and reduce environmental impact.

AI operator platform operates a suite of Standalone software products to enable the FAA part 135 charter providers the AD revenue maximize efficiency and reduced environmental impact. The aviation segment features jet aircraft Fractionization jet cards, Onthe charter management and buyers brokerage.

Speaker 4: The aviation segment features jet aircraft fractionalization, jet cards, on-fleet charter, management, and buyer's brokerage.

Speaker 4: With the completion of the business combination in August , the company renamed to JetAI Inc. and its common shares and warrants began trading on the Nasdaq Stock Exchange.

With the completion of the business combination on August the company renamed the Jet AI, Inc, and its common shares and warrants began trading on the NASDAQ stock exchange.

Speaker 4: Our interest in JetAI is recognized at fair value in other investments on our balance sheet.

Our interest in jet AI is recognized at fair value and other investments on our balance sheet.

Speaker 4: We also diversified our business in 2023 with the creation of our new Web3 subsidiary, AssurancePlus, Inc., a provider of tokenized real-world assets, or RWAs. Initially in the form of tokenized real-world assets, we were able to create a new Web3 subsidiary, AssurancePlus, Inc.,

We also diversified our business in 2023 with the creation of our new Web three subsidiary Sharon's plus Inc. A provider of token is real world assets or our <unk>.

Initially in the form of token as reinsurance securities.

Speaker 4: These are alternative investment opportunities leveraging key qualities of watching technology to create a well-designed digital security under the SEC guidelines possessing complete transparency and compliance.

These are alternative investment opportunities leveraging key qualities of blockchain technology to create a well designed digital security under the SEC guidelines possessing complete transparency and compliance this new trust not entity.

Speaker 4: This new thrust in our entry into the digital securities markets which puts real world assets on chain and opens an entirely new avenue of democratizing reinsurance and potentially other opportunities in the future. We believe we have issued the first tokenized reinsurance security backed by a publicly traded company. Importantly, Assurance Plus was created with no debt and no equity dilution for our shareholders.

In our entry into the digital securities markets, which puts real world assets Unchain and opens an entirely new Avenue democratizing reinsurance and potentially other opportunities in the future.

We believe we have issued the first token is reinsurance security backed by a publicly traded company.

Importantly, <unk> plus was created with no debt and no equity dilution for our shareholders.

I'm very proud to have achieved this diversification so efficiently.

Speaker 4: We are very excited about both of these investments and look forward to keeping you appraised of their progress in the coming quarters.

We are very excited about both of these investments and look forward to keeping you appraised of the progress in the coming quarters.

Speaker 4: Looking ahead, it is our intention to rebrand Oxbridge as an emerging and successful player in the tokenized real-world assets or RWA's Red Tree business.

Looking ahead. It is our intention to rebrand oxbridge as an emerging a successful player in the token is real world assets or our WH Smith III business I will have more to say on this later in short we remain highly optimistic about the long term prospects of our core reinsurance. That's that's the successful diversification into our two.

Speaker 4: I will have more to say on this later. In short, we remain highly optimistic about the long-term prospects of our core reinsurance business, the successful diversification into our two new investments, Jeff AI and Insurance Plus, as we transform more fully into the RWA tokenization market.

New investments, Jeff AI insurance, plus as we transform as we transform more fully into the <unk> market I'll now turn things over to Randy to take us through our financial results Brendan.

Speaker 4: I'll now turn things over to Rendon to take us through our financial results. Rendon?

Speaker 3: Thank you, Jay. I would like to remind you that our typical contract period is from June 1 to May 31 of the following year.

Thank you Jay I would like to remind you that our typical contract period is from June one to meet the need for some of the fallen here with respect to net premiums earned net premiums for the quarter ended September 32023, we'll fight for denying <unk> slightly lower than last year's third quarter for the first nine months of 2020 through net premiums than with <unk>.

Speaker 3: With respect to net premiums earned, net premiums earned for the quarter ended September 30th, 2023 were $549,000, slightly lower than last year's quarter.

Speaker 3: For the first nine months of 2023, net premiums earned was $732,000 compared to $995,000 last year. The decreases are due to the acceleration of premium recognition on 2040 insurance contracts last year due to a limited loss that was suffered.

182000, compared to 995000 last year. The decreases are due to the acceleration of premium recognition on tool for reinsurance contracts last year due to limit losses suffered with.

Speaker 3: With respect to investment income or net investment income and other income rose in the quarter and the first nine months of 2023 due to higher rates on money market funds.

With respect to investment income on net investment income and other income rule within the quarter with nine months of 2020 due to higher rates on money market funds.

Speaker 3: You can also see that we generated incentive technology origination and management fee income of $300,000 in 2023 from our shown slides.

You can also see that we generated incentive technology origination on the management fee income of 300002 thousand 23 promotions plus subsidiary.

Speaker 3: In the third quarter of 2023, we recorded an unrealized loss of 6.4 million on our investments, the result of over-re-measurement of our investment in jets.ai. We also recognize the 34,000 negative change and fair value of our equity securities as of September 30th, 2023, much improved from the 355,000 negative change in the price.

In the third quarter of 2023 recorded unrealized losses could put $4 million of investments. The result of all of our re measurement of our investment in jet.

Yes.

We also recognize the 34000 negative change in CFO here for equity Securities as of September 30 of 2023, much improved from the 355000 negative change in the prior year.

Speaker 3: All of these factors taken together resulted in consolidated total revenue of negative 5.1 million for the nine months ended September 30, 2023, compared to negative $119,000 in the prior year.

These factors taken together resulted in consolidated total revenue of negative $5 1 million for the nine months ended September <unk> 2023, compared to negative 119 hotels in the prior year.

Speaker 3: Total expenses included loss and loss adjustment expenses, policy acquisition costs, and general admin expenses were down in the third quarter and the first nine months of 2023, compared to last year due to the triggering of a limit loss on two of the company's reinsurance contracts in September 2022, related to the impact of Hurricane Ida.

Total expenses included in loss and loss adjustment expenses policy acquisition costs, and general and admin expenses were down in the third quarter and the first nine month of 2023 compared to last year due to the treated enough a limit loss on two of the Companys reinsurance contract in September 2022 related to the impact of hurricane in the core.

Speaker 3: The current year has seen low policy acquisition costs and underwriting expenses offset by increased general and admin expenses due to inflationary expense substitutions as well as the recognition of previously deferred offerings.

Do you have seen a little policy acquisition costs and underwriting expenses.

Led by increased general and admin expenses due to inflationary expense fluctuations as well as.

The recognition of previously deferred offering costs.

Speaker 3: Primarily due to the unrealized loss resulting from our remeasurement of our investment in JetEI in the third quarter, we generated a net loss of $7.3 million or $1.24 per share compared to a net loss of $2.2 million or $0.37 per share in last year's third quarter. For the nine months ended 30th September 2023, the net loss was $7.2 million or $1.23 per share compared to a net loss of $2.5 million or $0.43 per share loss.

Primarily due to the unrealized loss, resulting from a remeasurement of our investment in <unk>.

We generated a net loss of $7 3 million or $1 24 per share compared to a net loss of $2 2 million or 37% share.

Last year's third quarter for the nine months ended Sept.

Timber 2023, net loss was <unk> 2 million or $1 23, a share compared to a net loss of $2 5 billion 43 cents a share last year.

Speaker 3: As we have discussed before in investor calls, we use various measures to analyze the growth and profitability of our business operations.

As we've discussed before millen for Kohl's, we use various measures to analyze the growth and profitability of our business operations.

Speaker 3: For our reinsurance business, we measure underwriting profitability by examining our loss ratio, acquisition ratio, expense ratio, and combined ratio. Our loss ratio, which measures underwriting profitability, is the ratio of loss on loss adjustment expenses incurred and net pre-earns earned. The loss ratio decreased to 0% for the nine months ended September 6, 2023, from 107.8% in the prior year, wholly due to the limited losses suffered on two of our reinsurance contracts as a result of Hurricane Ian in September last year.

For our reinsurance business, we measure underwriting profitability by examining our loss ratio acquisition ratio expense ratio combined ratio.

Loss ratio, which measures underwriting profitability is the ratio of lots and lots of adjustment expenses incurred to net and the loss ratio decreased 2% for the nine months ended September <unk> 2023 from one to seven 8% in the prior yet wholly due to the limit losses suffered on two of our reinsurance contracts.

The Hurricane E on in September last year.

Speaker 3: Our acquisition ratio, which measures operational efficiency, compares policy acquisition costs to net premiums earned. The acquisition ratio decreased marginally from 11.1% for the nine-month period ended September 30, 2022, to 10.9% for the nine-month period ended September 30, 2021.

Our acquisition ratio, which measures operational efficiency compares policy acquisition costs the net promoter.

The acquisition ratio decreased marginally from 11, 1% for the nine month period ended September 30 of 2022.

9% for the nine month period ended September.

Could be a 2023.

Speaker 3: Our expense ratio, which measures operating performance compares policy acquisition costs and general admin expenses with net premiums earned. The expense ratio increased to 44.4% for the nine months ended September 22, 2023 from.

Our expense ratio, which measures.

Operating performance compares policy acquisition costs, and general and admin expenses with net premiums earned.

Ratio increased to 44, 4% for the nine months ended September <unk> 2023 from 116%.

Speaker 3: In the prior period, the changes due to higher G&A cost this year caused by inflationary elements and record.

In the prior period.

Due to higher G&A costs. This year caused by inflationary elements under recognition of previously deferred offering costs or combined ratio, which is used to measure underwriting performance is the sum of the loss ratio the expense ratio.

Speaker 3: Our combined ratio, which is used to measure underwriting performance, is the sum of the loss ratio and the expense ratio. The combined ratio increased marginally to 244.4% for the first nine months of 2023 compared to 224.4% last year, due again to higher G&A costs in 2023 caused by inflationary elements and the recognition of previously defaulted offerings.

Languish increased marginally to $2 44, 4% for the first nine months of 2023 compared to 24, 4% last year due again to the higher G&A costs in 2023 caused by inflationary elements and the recognition of previously deferred offering costs now turning to the balance sheet. Our investment portfolio was bought at a particularly a thousand September the tier.

Speaker 3: Now turning to the balance sheet, our investment portfolio was valued at $608,000 at September 30, 2023, compared to $642,000 at the prior year-end, decreased due to unrealized loss on experience.

2023, compared to 642000 in the prior year and decreased due to unrealized loss on <unk> of.

Speaker 3: Are the investments decreased due to the negative change in the fair value of our investment in Jet AI measured at fair value?

This year the inverse.

<unk> decreased due to the negative change in the fair value of our investment in <unk> measured at fair value.

Speaker 3: Cash-in-cash equivalents and restricted cash-in-cash equivalents decreased to $3.6 million at September 30, 2023 from $3.9 million in December .

Cash and cash equivalents unrestricted cash and cash equivalents decreased to $3 6 million at September 32023 from $3 9 billion at December 31st 2020.

Speaker 3: I will now turn the call back over to Jay to wrap up before we take your call.

I will now turn the call back over to Jay to wrap up before we take your questions.

Speaker 4: Thank you, Rendon. As I mentioned on the outset of our today's call, we have taken decisive and significant steps this year to strengthen and diversify our business. In December 2022, we incorporated our wholly-owned subsidiary, Insurance Plus. Insurance Plus will issue tokenized securities that indirectly represent fractionalized interest in reinsurance contracts underwritten by our reinsurance subsidiary.

Thank you Brandon as I mentioned on the outside of our today's call. We have taken decisive and significant steps this year to strengthen and diversify our business in December 2022, we incorporated a wholly owned subsidiary Sharon's plus sharp classical tokens will issue Taco night securities that indirectly represent a fraction is.

Dressed in reinsurance contracts underwritten by our reinsurance subsidiary during.

Speaker 4: During the second quarter of this year, we completed the first offering of these tokens with 2.4 million private placement. Assuming there are no catastrophe losses incurred by Oxbridge, our Delta Catri token investors are expected to receive a significant return of up to 42% on their investment in this treaty year. Again, we believe these are the first tokenized reinsurance securities backed by a publicly traded company.

During the second quarter of this year, we completed our first offering up these tokens with $2 4 million private placement, assuming there are no catastrophe losses incurred by Oxbridge, our desktop category token investors are expected to receive a significant return of up to 42% on their investment and this treaty year.

Again, we believe these are the first these are fresh cocainize reinsurance subsidiary securities backed by a publicly traded company.

Speaker 4: Assurance Plus will democratize access to reinsurance as an alternative investment opportunity that leverages the key qualities of blockchain technology to create a well-designed digital security. Our token will enable more investors to participate and have their interests permanently and transparently recorded on a blockchain. These opportunities were typically unavailable to investors in the past due to high barriers to entry.

Assurance parcel that democratize access to reinsurance as an alternative investment opportunity that leverages. The key qualities of blockchain technology to create a well divorced dwell design digital security token.

Token will enable more investors to participate and have their interests permanently and transparency and recorded on a blockchain. These opportunities will typically we're typically unavailable to investors in the past due to high barriers to entry.

Speaker 4: Following this exciting investment opportunity, in mid-August 2023, we utilized our special purpose acquisition company, Oxford's Acquisition Corp, to complete a business transaction with Jet Token, Inc., a company offering fractional aircraft ownership, jet card, aircraft brokerage, and charter services to its fleet and private aircraft.

Following this exciting investment opportunity in mid August 2023, we utilize a special purpose acquisition company, Oxford acquisition Corp to compete to complete this restaurants action with jet token Inc.

Company offering fractional aircraft ownership jet card aircraft brokerage and charter services towards fleet and private aircraft.

Our wholly owned subsidiary Oxbridge reinsurance limited was a lead investor in the spec sponsor.

In conjunction with the completion of the business combination with Jack token in August the company was renamed Jet AI, Inc.

Unlisted its common shares and warrants on the NASDAQ.

These exciting new investment opportunities further diversify our business and risk profile positioning us to capitalize on growth in emerging technologies.

We are very excited about the future value of these investments and the potential they bring to our shareholders.

As I mentioned at the outset, we will be positioning our company to exponentially grow our showroom slash subsidiary as a pure R. W. A token ization web III focused company by leveraging the significant steps we have taken this year.

This will be done alongside the maintenance of our core and complementary reinsurance business solutions to insurers in Florida, and the Gulf Gulf Coast States.

According to Boston consulting group that token is RW end market is expected to grow significantly over the next decade with estimates as high as 16 trillion by 2030.

This comes as traditional financial institutions, including Fiat, including Fiat currencies equities government bonds and real estate continued to adopt blockchain technology. For example bank of America recently stated that the polka Ization would would transform existing financial infrastructure increase efficiencies reduce costs and optimize supply chain.

As an early entrant into this growing market. We are very excited about the potential a rebranding or new business lines will bring to our shareholders.

With that we're ready to open the call for questions.

Operator, please provide the appropriate instructions.

Thank you Sir at this time, if you'd like to ask a question. Please press the star and one Keith on your telephone keypad keep in mind, you may remove yourself from the question queue at any time by pressing star and two.

And our first question will come from Kent, Engelke with Capitol Securities Management.

Sir you May proceed.

Thank you a J Ryan.

How are you all going to be marketing the the token ice on securities are Debbie ways.

Yeah, Hi, Ken so that will be marketed through various different folks we hope to we hope to get.

Some of the folks through FINRA regulated agencies, but they will also be there will also be a huge thrust of marketing it ourselves internally.

High net worth individuals so sort of like a Reg D. In the U S under Reg S outside of the U S.

How what sort of growth rate do you anticipate in the foreseeable future you can't extrapolate that as of yet.

Yeah, what what we've done over the last few years is we had our S. P. V that we were taking capital from individuals and putting those putting that capital to work and we've shown a track record of doing back.

Over the last few years has worked out quite well. This year. We took that same thought process rolled it out into a much more scalable platform for assurance plus giving us access to the world over if you would so while.

While there is there's always why there's always worry about how this is this will grow we expect this will grow quite well, especially with folks. This year are getting we've changed that we've changed the nature of the topside of the contracts that we take so we take contracts that are higher up in the tower et cetera, but nonetheless, this year investors are going to get 42%.

We're almost at the end up Hurricane season. This is looking good.

We expect that to grow.

Kelly.

Fairly sizeable amount next year amount rather.

Okay I appreciate it thank you.

Thanks Scott.

Yeah.

Okay.

And there are no further questions on the line at this time I'll turn the program to our speakers.

Thank you for joining us on today's call before we wrap up I want to thank our employees business partners and investors for their continued support I, especially want to express our gratitude to our Oxbridge team, who continue to leverage their significant experience to manage and build our business. During these challenging times, we look forward.

Updating you on our next call. If you have any question further questions. Please contact us anytime. Thank you again for your time and attention today and your interest in Oxbridge operator.

Before we conclude today's call I would like to remind everyone that a recording of today's call will be available for replay via a link available in the investors section of the Companys website.

Thank you for joining us today for our presentation you may now disconnect.

Okay.

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