Oxbridge Re Holdings Limited

First Quarter 2025 Earnings Conference Call. My name is Robert and I'll be your conference operator this afternoon. At this time, all participants will be in a listen-only mode. Joining us for today's presentation is Oxbridge Reese, Chairman, President, and Chief Executive Officer, Jay Madhu, and Chief Financial Officer and Corporate Secretary, Rendon Timothy. On the remarks, we will open up the call for your questions. I would like to remind everyone that this call will be available via telephone replay until May 26, 2025. Details for telephone replay are included in the press release issued today. Now I'd like to turn the call over to your host, Brendan Timothy, Chief Financial Officer of Oxbridge Marie, who will provide the necessary questions regarding the forward-looking statements that will be made by management during this call.

Thank you, operator. During today's call, there will be forward-looking statements made regarding future events, including Upstreet Re's future financial performance. These forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995. Rules such as Anticipates, Estimates, Expects, Intends, Plans, Projects, and other similar rules and expressions are intended to signify forward-looking statements. Forelooking statements are not guaranteed of future results and conditions, but rather are subject to various risks and uncertainties. A detailed discussion of the risks and uncertainties that can cause actual results and events to differ materially from such forelooking statements is included in the section inside the Risk Factors contained in our Form 10 case filed on March 26, 2025 with the Securities and Exchange Commission. The occurrence of any of these risks financial difficulties could have a material adverse effect on the company's business, financial condition, and the volatility of our earnings, which influence and cause significant market price and trading volume fluctuations for our 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 condition cause the compliance to change. Now I would like to turn the call over to our Chairman, President, and Chief Executive Officer, Jay Madan. Jay?

Thank you, Brendan, and welcome, everyone. Thank you for joining us today. Let me start by saying we are proud of the significant steps we have taken to fortify and diversify our business. While we are solidly entrenched in the RWA Web3 space, where the issue took to insurance securities in an RWA or real-world asset, Our core business remains reinsurance, where we write fully collateralized policies to cover property losses from specific catastrophes. And because we write fully collateralized artifacts, 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 of reinsurance companies. is to achieve long-term growth and book value per share by running business on a selective and opportunistic basis that will generate attractive underlying profits relative to risk. Building on the stable resource foundation, we began to diversify our business in 2022. We expanded our business portfolio by establishing Shorts Plus Inc., a new subsidiary-focused RWA web-free technology. Shorts requires ShowExpress specializes in democratizing tokenized real-world assets, or RWAs, offering tokenized reinsurance securities as alternative investment opportunities. These securities leverage blockchain technology to ensure complete transparency and compliance with SEC guidelines, representing a significant advancement in the digital security market. Consequently, this initiative aims to broaden investor participation, extending opportunities beyond what traditionally would has been a select group of ultra-high net worth individuals. Crucially, the establishment of Assurance Plus was achieved without incurring new debt, reflecting our efficient approach to diversification. We are enthusiastic about the prospects of these new investments and remain committed to keeping our stakeholders informed of their progress in the upcoming quarters. Looking ahead, We intend to position Oxbridge as a prominent player in the real-world or RWA Web3 sector. In summary, we maintain a strong sense of optimism regarding the long-term outlook of our core reinsurance business, alongside a successful integration of Shorts Plus as we embrace the RWA market more competitively. I'll now turn things over to Brendan to take us through our financial results.

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. The net income earned for the quarter ended March 31, 2025 increased to $595,000 from $549,000 for the quarter ended March 31, 2024. The increase is due to the rates, high rates and contracts that were enforced in the quarter ended March 31, 2025 when compared to the contracts enforced in the prior period. Our investment income and other income increased to $79,000 from $62,000 from prior first quarter. We also recognize that $35,000 will again on the field of other investments in JetEI. All these factors taken together result in a total revenues of $62,000 for the three months ending March to the first 2025 compared to negative $125,000 in the prior first quarter. For the three months ending March to the first 2025, total expenses, including policy acquisition costs, The increase is primarily due to the value of stock-based competition incurred during the three-month period ended March 31, 2025, as a result of higher share price on Grant State. For the three-month end in March to before 2025, the company generated net loss of $159,000 or $0.02 per BASIC, and diluted loss of shares on PHA in net loss of $9,000 or $5,000 or $0.15 per BASIC, and diluted earnings loss of shares for the quarter end in March to before 2024. The decrease in net loss is primarily due to the positive change in the save value of equity securities, the sale of investments on JSEI during the quarter end in March to before 2025 when compared with the prior period. As we have discussed before in our investor calls, we use various measures to analyze the growth and profitability for our business operations. For our insurance business, we measure underwriting profitability by examining our loss ratio, our acquisition ratio, our expense ratio, and combined ratio. Our loss ratio, which measures underwriting profitability, is a ratio of loss and loss adjustment expenses, including the premiums earned. The loss ratio remains consistent at 0% for the quarter ending March 31, 2025. compared with the quarter ended March 31st, 2024. Our acquisition cost ratio which measures operational efficiency compared to policy acquisition cost net premiums earned. The acquisition cost ratio remains consistent at 10.9 cents for the quarter ended March 31st, 2025 compared with the prior quarter. Our expense ratio which measures operating performance compared to policy acquisition cost and general and admin expenses with premiums earned. The expense ratio decreased marginally from 99.8 cents Our combined ratio, which is used to measure underwriting performance, is the sum of the loss ratio and the expense ratio. The combined ratio also decreases marginally from 99.8% for the three-month period and then marches to the year 2024. 95.8% for the premium period ending March 31st, 2025. The decrease is due to higher net premium earned during the premium period ending March 31st, 2025, when some pay end with the prior period. Moving to the balance sheet, our investment portfolio increased marginally to $116,000 at March 31st, 2025, from $116,000 at the prior year end, primarily due to the increase in fair value of equity securities during the quarter ending March 31st, 2025. Cash-in-cash equivalents increased by 3.7 million of 62.8% to 9.6 million from 5.9 million as of December 36, 2024. The increases primarily due to premium deposits made during the three-month-ended March 34, 2025, as well as the completion of a registered direct offering that generated 2.7 million net-off expenses. I'll now turn the call back over to Joe to wrap up his call with you.

Thank you, Brendan. As highlighted earlier in today's discussion, we have implemented decisive measures over the last two years to strengthen and diversify our operations. In December of 2022, we launched ShoresQuest with the objective of tokenizing securities representing fractionalized interest in reinsurance contracts underwritten by our reinsurance subsidiaries. Notably, investors in Delta Capri achieved returns exceeding 49%, surpassing the initial 42% projections, despite the challenges posed by Hurricane Analia, which made landfall as a Category 3 storm in 2023. We believe these are the first tokenized reinsurance securities backed by a publicly traded company, an accomplishment that underscores our ability to lead through innovation. Insurance Plus was established leveraging blockchain technology to create sophisticated digital securities. Our security tokens are designed to offer broader investor participation, securely and transparently recorded on the blockchain. Using Reg-D and Reg-X frameworks, investors can seamlessly complete AML, KIC, and document signing requirements, accessing this historically exclusive asset class within minutes. By lowering the financial barriers that have traditionally restricted access to reinsurance, we are making this active class accessible to a wider range of investors. As part of our commitment to growth and investor leadership, we have actively participated in key global tokenization of blockchain events. This includes Consensus 2024 in Austin, Texas, Token 2049 in Singapore, and Token 2049 in Dubai. We have engaged with industry leaders, innovators, and investors. Our presence at these forums allowed us to showcase Shorts Plus, strengthen business relationships, and explore collaborative opportunities with prominent blockchain platforms. In addition to our core operations, Oxford Re has initiated a strategic review process, forming a special committee on the board to explore a full range of strategic alternatives for the company and its Web3 division, Shorts Plus Holdings Ltd. These alternatives may include sales, spin-out, merger, diversifier, recapitalization, or continuing to operate as a publicly traded entity. In Q1 2025, our board of directors approved the inclusion of Bitcoin, Ethereum, and potentially other cryptocurrencies as part of our corporate treasury reserve strategy. This decision aligns with our commitment to innovation, diversification, and long-term value creation, recognized by the growing global adoption of blockchain-based assets. We recently announced a Memorandum of Understanding, or MOU, with Plume, a leading blockchain platform supporting $4.5 billion in assets and more than 18 million unique wallet addresses. This relationship has the potential to significantly expand distribution channels for our tokenized resource offerings, enhancing our presence within the RWA ecosystem. While we continue to explore additional strategic relationships, Building on a pruned MOU, we remain focused on identifying and forming additional strategic partnerships to accelerate our growth in RWA organization and Web3 infrastructure. These alliances will enhance distribution capabilities and strengthen and better access for innovative digital securities. As of now, we do not anticipate any material impact on Paragent ME. Regarding Milton, we continue to monitor the developments and await finalized data. Our disciplined approach to risk management positions us to navigate market dynamics with confidence. Looking ahead, we are pleased to highlight our 2025 and 2025-2026 tokenized resource offerings, which include two distinct options. A balanced-yield tokenized security targeting a 20% annual return, designed for investors seeking stable, attractive yields with moderate risk, and a high-yield tokenized security targeting 42% annual returns. offering a higher risk-reward profile. This two-tiered structure expands our product suite, catering to a broader range of investor preferences and furthering our mission to make institutional-grade reinsurance accessible through blockchain-powered real-world assets. Recent industry reports, including those from Standard Charter and Sunflush, forecast specific growth in the tokenized asset market, potentially reaching $30 trillion by 2034. As a pioneer in this evolving landscape, we are well-positioned to capitalize on this growth, leveraging our expertise and first-move advantage. Our achievements today reflect a clear vision and disciplined approach to execution. With a strong balance sheet, innovative products, and expanding strategic relationships, we are well-positioned to drive sustainable growth and create long-term value for our shareholders. With that, we are ready to open the call for questions. Operator, please provide the appropriate instructions.

Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. In confirmation tone, we indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the store keys.

One moment, please, while we poll for questions. Our first question comes from Kent Engelke with Capital Securities Management.

Please proceed with your question.

Hey, Brendan. Hey, Jay. How is the marketing going on for the tokenized securities? And secondly, you said it's got a $30 trillion market. How much do you think that you all could capture of that market? And obviously the market is in its infancy. Is there any correlation back to the catastrophic bond market where they started trying to create an ETF? Is there any correlation back to the cap market there?

Hey, Ben. Thanks for the question. Marketing efforts are going fine. What we've been targeting, though, is two sides of things, right? Number one is the marketing, but also we've been coupling this with outreach. We currently find ourselves in somewhat of a no-man's world, so to speak. So while we are a traditional finance SEC company, We are also going into the RWA space or the Web3 or RWA tokenization aspect of it. We find ourselves in the middle of both worlds. So moving more towards the RWA space, attending the various different conferences, striking relationships with the various different players in the space, we are finding that we're getting more adoption and more more acceptance in that space because that's the space we are pivoting towards. It's, it's like turning a, it's like turning a paddle ship, not a speedboat. And I think we're doing that quite well. So we've been focusing a lot in both directions because as we grow into assurance plus 2.0, I think it's critical that we get more adoption in that side of the world, right? That piece of it. So I think we're doing well with that. Uh, As far as the $30 trillion business opportunity over here, the size of the company we are currently, even if we got a small and very minuscule piece of that, that's a game changer for us, for the insurance plus. So we continue effortlessly to move forward, and I believe we're making some good progress.

Great. As a reminder, if you'd like to ask a question, please press guard 1 on your telephone keypad. One moment, please, while we poll for questions. Our next question comes from Alan Clee with Maxim Group. Please proceed with your question.

Yes, hi. I'm sorry, I just found one. Not Starlin, so figure that out. Okay. Congrats on a solid quarter. Just following up on the last question on the marketing for the tokenization, could you tell us what we should kind of look for in terms of information we could be hearing in the next, you know, next three to six months?

Yeah. Hi, Alan.

Thanks for the question. I think we're making some good progress. Time will tell. We're not there at the end of it, but I believe we should be in good shape in terms of this next token launch. So, as you're well aware, we have two sets of tokens. One is our balance yield and one is our high-yield token. The high-yield, we traditionally offer that, and then there's a much larger audience out there that is probably looking for a more sustainable balance field. I'm not sure you can imagine our balance field token up, the 20% token. So, while it's not, while it's not completed, while we're not at the end of the situation, I think we're, time will tell, but so far, so good.

That's great. And then, talk a little about just the reinsurance market. If, uh, how you're feeling about the premiums and underwriting and the potential returns. Just how you're thinking about the overall health of the market that you're pursuing.

I'll talk about the health of the market first. I think from what we're seeing and what we're hearing, premiums seem to be in various different directions. And we're still working through finalizing contracts and so on. We won't know that until probably the end of the month. But all directions are, you know, solid contracts, solid opportunities, solid premiums. In terms of underwriting, what we've also seen now, Majority of the business that we write is in the state of Florida, and the various different things that Florida has implemented towards their underwriting situations and the AOV, which is the assignment of benefits, et cetera, is playing out well in situations as it comes to claims. So in years gone by, with either of these hurricanes that I've gone through, it would have been a vastly different situation Currently, with all the different changes that have come about and the OIR has put through and the state of Florida has put through, it's moving well for the various different insurance as well as reinsurance companies. So, again, we don't have anything. We don't have pure clarity as to where this goes. But so far, we have not been affected. So I take solace with that. It doesn't mean we don't get an email tomorrow or today after this call, right? But so far so good. But at the end of the day, the marketing or the market that we're after is the how you're token. You don't get a 42% return without taking risk. So this is something that every now and then will get affected, but traditionally, Since 1952, 82% of the time, you don't have a Category 3 hurricane. And sometimes, actually in the last couple of years, we did have a Category 3 hurricane, but it didn't make landfall. So Category 3 in Florida, it needs to make landfall and it needs to hit a populated area. So looking at these various different things, the majority of the time nothing happens. But sometimes when it does happen, it could go wrong. 42% return token. So while we have that, it's a risk that is known and it's a risk that is acceptable. The balance shield token, what we're being told, had the balance shield, had we had a balance shield token last year, that would be a non-event at the moment. So how things go are to be determined. But we are confident in where we are in the turn of the business, in turning this battleship, moving from the trad fire, the traditional finance business, to the RWA or Red Free Opportunity business, where we are taking additional capital, almost like the hedge fund model, and putting it to work and getting capital as we go forward, attempt to get capital from anywhere in the world where we can do proper AML and KYC, put that money to work, It's a great thing for our business. Now, two things will come from that. One, we, the company, will have access to additional capital and put more money to work and grow the business opportunity together. But the flip side of things will be as additional capital comes into the RWA space, into the tokenization space, and more capital comes into the reinsurance space through tokenization, a few different things will happen. A, the companies that are doing that will do well, but also the homeowner or the policyholders will achieve a slightly better rate as they go forward because there's more capital coming into the ecosystem of reinsurance.

It's a win-win on both sides.

Makes sense. Yeah, and I've looked at, I'm sure you know well too, some some of the companies that I've reported that do insurance in leverage to Florida for their first quarter, good numbers and good outlook. So that's encouraging. In terms of the partnership you talked about, could you, that sounds like that could be a good distribution channel. Could you talk a little bit more about how this actually works?

Yes. So the MOU that we signed with Plume, that could be a very good distribution channel because they have a highly evolved ecosystem. So while we have Plume, we were in token 2049 in Dubai, and we were on a panel invited by Midnight. Midnight is a new chain that's coming out. It's born from the Cardano chain. We were invited by the folks from Midnight, and the folks from BitGo were also on that same panel. So we are making some strides to where before we were standing from afar looking in the inside. Now we're making some strides with some of the larger players in the ecosystem where they are recognizing that there is a marked difference between crypto as opposed to tokenized securities. So Moving forward, I think we are in great shape in terms of the various different folks that we are working with. That's Shorts Plus 2.0. We're evolving. We're moving more into that section. But while we are moving more in that direction, we are working within the framework of what the SEC allows us to do, the do's and don'ts. We're very careful to make sure that we color within the light.

That's great. Okay. Thank you very much. Thank you. As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad. One moment, please, while we follow for questions. At this time, this concludes our question master session. I'd now like to turn the call back over to Mr. Mahou for closing remarks.

Thank you for joining us on the call today. Before we conclude, I would like to extend my gratitude to our employees, business partners, and investors for their unwavering support. I particularly want to acknowledge our dedicated Auschwitz team whose extensive experience and expertise has been instrumental in navigating and advancing our business amidst these challenging circumstances. We anticipate providing you with further updates on our progress during our next call. And should you have any additional questions, please do not hesitate to reach out to us anytime. Once again, thank you for your time and attention today and for your ongoing interest in Oxbridge. Operator?

Before we conclude today's call, I'd like to remind everyone that a recording of today's call will be available for replay via a link available in the investor section of the company's website. Thank you for joining us today for our presentation. You may now disconnect.