8-K
OXBRIDGE RE HOLDINGS Ltd (OXBR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 12, 2021
| OXBRIDGE RE HOLDINGS LIMITED | ||
|---|---|---|
| (Exact Name of Registrant as Specified in Charter) | ||
| Cayman Islands | 001-36346 | 98-1150254 |
| --- | --- | --- |
| (State or Other Jurisdiction<br><br>of Incorporation) | (Commission<br><br>File Number) | (I.R.S. Employer<br>Identification No.) |
| Suite 201,<br><br>42 Edward Street, Georgetown P.O. Box 469<br><br>Grand Cayman, Cayman Islands | KY1-9006 | |
| --- | --- | |
| (Address of Principal Executive Office) | (Zip Code) |
Registrant’s telephone number, including area code: (345) 749-7570
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class: | Trading symbol | Name of each exchange on which registered |
|---|---|---|
| Ordinary Shares (par value $0.001) | OXBR | The Nasdaq Stock Market LLC |
| Warrants to Purchase Ordinary Shares | OXBRW | The Nasdaq Stock Market LLC (The Nasdaq Capital Market) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if 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. ☐
Item 2.02 Results of Operations and Financial Condition
On November 12, 2021, Oxbridge Re Holdings Limited issued a press release announcing its financial results for the quarter and nine months ending September 30, 2021. A copy of the press release is attached hereto as Exhibit 99.1 to this Form 8-K and incorporated herein by reference.
The information in this item shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of Section 18, nor shall it be deemed incorporated by reference in any of the Company’s filings under the Securities Act of 1933, as amended or the Exchange Act, except to the extent, if any, expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
See the Exhibit Index set forth below for a list of exhibits included with this Form 8-K.
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SIGNATURE
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 hereunto duly authorized.
| OXBRIDGE RE HOLDINGS LIMITED | ||
|---|---|---|
| Date: November 12, 2021 | By: | /s/ Wrendon Timothy |
| Wrendon Timothy | ||
| Chief Financial Officer and Secretary<br><br>(Principal Accounting Officer and<br><br>Principal Financial Officer) |
A signed original of this Form 8-K has been provided to Oxbridge Re Holdings Limited and will be retained by Oxbridge Re Holdings Limited and furnished to the Securities and Exchange Commission or its staff upon request.
| 3 |
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EXHIBIT INDEX
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release, dated November 12, 2021 |
| 4 | |
| --- |
oxbr_ex991.htm EXHIBIT 99.1
Oxbridge Re Holdings Limited Reports Strong Performance for First Nine Months of 2021
GRAND CAYMAN, CAYMAN ISLANDS / ACCESSWIRE / November 12, 2021 / Oxbridge Re Holdings Limited (NASDAQ:OXBR), (the “Company”), a provider of reinsurance solutions primarily to property and casualty insurers, reported improved results for the three and nine months ended September 30, 2021.
2021 HIGHLIGHTS:
| · | Net income of $6.5 million ($1.14 per share) in third quarter |
|---|
| · | Investment in Oxbridge Acquisition Corp. (“OXAC”) formed to invest in disruptive technology markets, with a particular focus on blockchain, insurtech and artificial intelligence sectors. |
| · | Unrealized gain of $7.1 million on completion of OXAC Initial Public Offering on August 11, 2021. |
| · | Premium income rises on acceleration of premium recognition on reinsurance contract due to limit loss in third quarter |
| · | Loss incurred of $158,000 on one contract due to impact of Hurricane Ida in third quarter |
| · | Sidecar investors in Series 2021-1 participating notes earn approximately 17% return |
“During the quarter, we were pleased to have completed our investment in Oxbridge Acquisition Corp., a Special Purpose Acquisition Company (“SPAC”) formed for investing in disruptive technologies businesses. Operationally, our core reinsurance business remains. Additionally, despite a record breaking 2020 hurricane season, our sidecar investors earned approximately 17% return for the contract year end of May 31, 2021,” said Oxbridge Re Holdings President and Chief Executive Officer Jay Madhu. “Looking ahead, we remain highly optimistic about the long-term prospects for our core reinsurance business, our sidecar, and the investment in the SPAC.”
Financial Performance
For the three months ended September 30, 2021 the Company generated net income of $6.5 million or $1.14 per basic and diluted common share compared a loss of $(33,000) or $(0.01) per basic and diluted common share in the third quarter of 2020. For the nine months ended September 30, 2021, net income was approximately $7 million or$1.22 per basic and diluted common share compared with a net loss of $(232,000) or $(0.04) per basic and diluted common share in the same period last year. The significant gain in net income during the quarter is primarily due to the estimated unrealized gain of $7.1 million on the Company’s beneficial interest in OXAC that is measured at fair value.
Net premiums earned for the three months ended September 30, 2021 increased to $370,000 from $247,000 in the prior year. For the first nine months of 2021 net premiums earned increased to $755,000 from $646,000 in the prior year. The increases are due to the triggering of a limit loss on one of the Company’s reinsurance contracts due to the impact of Hurricane Ida on its book of business, thus accelerating premium recognition under such contract.
Total expenses, including policy acquisition costs and general and administrative expenses were $479,000 in the third quarter of 2021 compared to $266,000 in the third quarter of 2020. For the first nine months of 2021 total expenses were $1.1 million compared to $838,000 last year. The increases are due primarily to losses incurred during the period ended September 30, 2021 as a result of Hurricane Ida, when compared to the prior year.
At September 30, 2021, cash and cash equivalents, and restricted cash and cash equivalents, totaled $5.6 million compared with $7.5 million at December 31, 2020. Restricted cash and cash equivalents decreased at September 30, 2021 due to the net result of the withdrawal of collateral on expiry of contract, and the deposit of collateral for new treaty period during the nine months ended September 30, 2021.
Solid Financial Ratios
Loss Ratio. The loss ratio, which measures underwriting profitability, is the ratio of losses and loss adjustment expenses incurred to net premiums earned. For the three and nine months ended September 30, 2021 and 2020 the loss ratio increased to 42.7% and 20.9%, respectively, compared to 0.0% in the comparable prior year periods. The increases were due to the limit losses suffered on one of the Company’s reinsurance contracts as a result of Hurricane Ida, partially offset by a higher denominator in net premiums earned, compared with the previous periods.
Acquisition Cost Ratio. The acquisition cost ratio, which measures operational efficiency, compares policy acquisition costs with net premiums earned. The acquisition cost ratio changed marginally to 11.1% and 10.9% for the three and nine months ended September 30, 2021, from 11.0% and 11.0% last year. The marginal changes are not considered material.
Expense Ratio. The expense ratio, which measures operating performance, compares policy acquisition costs and general and administrative expenses with net premiums earned. The expense ratio decreased to 86.8% and 122.9% for the three and nine months ended September 30, 2021 from 107.7% and 129.7% for the same periods last year. The decrease is due to a higher denominator in net premiums earned due to premium acceleration, partially offset by increased policy acquisition costs and general and administrative expenses in the current year.
Combined ratio. The combined ratio, which is used to measure underwriting performance, is the sum of the loss ratio and the expense ratio. The combined ratio increased to 129.5% and 143.8% for the three and nine months ended September 30, 2021 from 107.7% and 129.7% in the comparable prior year periods. The increase is primarily due to the increase in loss ratio during the nine-month period ending September 30, 2021 as a result of limit loss suffered under one of the Company’s reinsurance contracts, when compared with the prior year.
Conference Call
Management will host a conference call later today to discuss these financial results, followed by a question and answer session. President and Chief Executive Officer Jay Madhu and Chief Financial Officer Wrendon Timothy will host the call starting at 4:30 p.m. Eastern time. The live presentation can be accessed by dialing the number below or by clicking the webcast link available on the Investor Information section of the company’s website at www.oxbridgere.com.
Date: November 12, 2021 Time: 4.30 p.m. Eastern time Toll-free number: 888-506-0062 International number: 973-528-0011 Participant Access Code: 795710
Please call the conference telephone number 10 minutes before the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Precision IR at 919-481-4000 or operations@issuerdirect.com.
A replay of the call will be available by telephone after 4:30 p.m. Eastern time on the same day of the call and via the Investor Information section of Oxbridge’s website at www.oxbridgere.com until September 16, 2021.
Toll-free replay number: 877-481-4010 International replay number: 919-882-2331 Conference ID: 43631
About Oxbridge Re Holdings Limited
Oxbridge Re (www.oxbridgere.com) is a Cayman Islands exempted company that was organized in April 2013 to provide reinsurance business solutions primarily to property and casualty insurers in the Gulf Coast region of the United States. Through Oxbridge Re’s licensed reinsurance subsidiaries, Oxbridge Reinsurance Limited and Oxbridge RE NS, it writes fully collateralized policies to cover property losses from specified catastrophes. Oxbridge Re specializes in underwriting medium frequency, high severity risks, where it believes sufficient data exists to analyze effectively the risk/return profile of reinsurance contracts and it makes investments that can contribute to the growth of capital and surplus in its licensed reinsurance subsidiaries over time. The company’s ordinary shares and warrants trade on the NASDAQ Capital Market under the symbols “OXBR“ and “OXBRW,” respectively.
Forward-Looking Statements
This press release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “estimate,” “expect,” “intend,” “plan,” “project” and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. 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 30, 2021 and the Form 10-Q filed with the SEC on November 12, 2021. The occurrence of any of these risks and uncertainties could have a material adverse effect on the Company’s business, financial condition and results of operations. Any forward-looking statements made in this press release speak only as of the date of this press release and, except as required by law, the Company undertakes no obligation to update any forward-looking statement contained in this press release, even if the Company’s expectations or any related events, conditions or circumstances change.
Company Contact: Oxbridge Re Holdings Limited Jay Madhu, CEO 345-749-7570 jmadhu@oxbridgere.com
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES Consolidated Balance Sheets (expressed in thousands of U.S. Dollars, except per share and share amounts)
| At<br> <br>December 31, 2020 |
|---|
| | | | | | |
| Assets | | | | | |
| Equity securities, at fair value (cost : 1,522 and 965) | 778 | | | 787 | |
| Cash and cash equivalents | 3,748 | | | 5,562 | |
| Restricted cash and cash equivalents | 1,816 | | | 1,914 | |
| Accrued interest and dividend receivable | - | | | 1 | |
| Premiums receivable | 697 | | | 464 | |
| Other investments | 9,146 | | | - | |
| Due from related party | 20 | | | - | |
| Deferred policy acquisition costs | 62 | | | 45 | |
| Operating lease right-of-use assets | 157 | | | 222 | |
| Prepayment and other assets | 72 | | | 75 | |
| Property and equipment, net | 6 | | | 13 | |
| Total assets | 16,502 | | | 9,083 | | | Liabilities and Shareholders’ Equity | | | | | |
| Liabilities: | | | | | |
| Losses payable | 158 | | | - | |
| Notes payable to noteholders | 216 | | | 216 | |
| Unearned premiums reserve | 560 | | | 411 | |
| Operating lease liabilities | 158 | | | 222 | |
| Accounts payable and other liabilities | 340 | | | 209 | |
| Total liabilities | 1,432 | | | 1,058 | | | Shareholders’ equity: | | | | | |
| Ordinary share capital, (par value 0.001, 50,000,000 shares authorized; 5,733,587 shares issued and outstanding) | 6 | | | 6 | |
| Additional paid-in capital | 32,337 | | | 32,294 | |
| Accumulated Deficit | (17,273 | ) | | (24,275 | ) |
| Total shareholders’ equity | 15,070 | | | 8,025 | |
| Total liabilities and shareholders’ equity | 16,502 | | | 9,083 | |
All values are in US Dollars.
OXBRIDGE RE HOLDINGS LIMITED AND SUBSIDIARIES Consolidated Statements of Operations (Unaudited) (expressed in thousands of U.S. Dollars, except per share amounts)
| Three Months Ended | Nine Months Ended |
|---|
| | September 30, | | | | | | September 30, | | | | | |
| 2021 | 2020 | 2021 | 2020 |
|---|
| Assumed premiums | $ | - | | | - | | | 904 | | | 864 | |
| Change in unearned premiums reserve | | 370 | | | 247 | | | (149 | ) | | (218 | ) | | Net premiums earned | | 370 | | | 247 | | | 755 | | | 646 | |
| Net investment and other income | | 25 | | | 32 | | | 64 | | | 90 | |
| Net realized investment (loss) gains | | - | | | (2 | ) | | 755 | | | 325 | |
| Unrealized gain on other investments | | 7,146 | | | - | | | 7,146 | | | - | |
| Change in fair value of equity securities | | (512 | ) | | (18 | ) | | (566 | ) | | (343 | ) | | Total revenue | | 7,029 | | | 259 | | | 8,154 | | | 718 | | | Expenses | | | | | | | | | | | | |
| Losses and loss adjustment expenses | | 158 | | | - | | | 158 | | | - | |
| Policy acquisition costs and underwriting expenses | | 41 | | | 27 | | | 83 | | | 71 | |
| General and administrative expenses | | 280 | | | 239 | | | 845 | | | 767 | | | Total expenses | | 479 | | | 266 | | | 1,086 | | | 838 | | | Income (Loss) before income attributable to noteholders | | 6,550 | | | (7 | ) | | 7,068 | | | (120 | ) | | Income attributable to noteholders | | (24 | ) | | (26 | ) | | (66 | ) | | (112 | ) | | Net income (loss) | $ | 6,526 | | | (33 | ) | | 7,002 | | | (232 | ) | | Earnings (Loss) per share | | | | | | | | | | | | |
| Basic and Diluted | $ | 1.14 | (0.01 | ) | 1.22 | (0.04 | ) |
|---|
| Basic and Diluted | 5,733,587 | 5,733,587 | 5,733,587 | 5,733,587 |
|---|
| Loss ratio | | 42.7 | % | | 0.0 | % | | 20.9 | % | | 0.0 | % |
| Acquisition cost ratio | | 11.1 | % | | 10.9 | % | | 11.0 | % | | 11.0 | % |
| Expense ratio | | 86.8 | % | | 107.7 | % | | 122.9 | % | | 129.7 | % |
| Combined ratio | | 129.5 | % | | 107.7 | % | | 143.8 | % | | 129.7 | % |
SOURCE: Oxbridge Re Holdings Limited