Oxbridge Re Holdings Limited 2026 Q2 Earnings Call

Thank you, operator. During today's call, there will be forward-looking statements made regarding future events, including Oxbridge's future financial performance. 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 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 these risks and uncertainties that could cause actual results and events to differ materially from forward-looking statements is included in the section entitled Risk Factors contained in our Form 10-K filed on March 30, 2026, with the Securities and Exchange Commission.

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 our securities. Any forward-looking statements made on this conference call speaks only as of the date of this conference call. 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. Now, I'd like to turn the call over to Chairman, President, and Chief Executive Officer, Jay Madhu.

Jay? Thank you, Wrendon, and welcome everyone.

Thank you for joining us today. Let me start by saying we are proud of the strong performance of our business and progress we are making on our long-term strategy. During the second quarter and subsequent period, we continued to build on the growth of our tokenized reinsurance business, expanded the platform to include third-party opportunities, and established a new AI infrastructure business focused on developing, owning, and operating AI data centers and related infrastructure. Through SurancePlus, we have continued to build our track record on tokenized reinsurance. For the 2025-2026 treaty year, our EtaCat Re and ZetaCat Re offerings targeted annual returns of 20% and 42% respectively. We are pleased to report that these offerings exceeded their original targets, delivering annualized returns of 29.3% and 43.4% respectively.

For the 2026 and 2027 treaty year, we successfully closed five tokenized reinsurance offerings on the Solana blockchain, raising $7.1 million in aggregated gross proceeds. These included our T20 and T42-2027 offering with a current targeted annual return of 26% and 32% respectively, assuming no underwriting losses. The five offerings also included three third-party offerings associated with HCI Group, a leading Florida-based property and casualty insurance company, and Fortex Re. HCI Re 2026 Series A targets an annual return of 242%, HCI Re 2026 Series B targets 122%, and HCI Re 2026 Series C targets 17%. In each case, assuming no underwriting losses. This represents an important expansion of the SurancePlus platform beyond reinsurance originating through our own operations and demonstrates its ability to structure and tokenize reinsurance opportunities originated by third parties.

In parallel, we launched AI GridWorks, a newly formed Oxbridge subsidiary focused on developing, owning, and operating AI data centers and related infrastructure. Since launching the initiative, we have moved quickly to assemble an experienced infrastructure team and advance a development pipeline. We believe SurancePlus and AI GridWorks provide Oxbridge with two distinct but complementary growth platforms, creating multiple avenues for long-term growth and shareholder value creation. I will now turn the call over to Rendon 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. Net income for the quarter ended June 30, 2026, was $176,000, or $0.02 basic and diluted income per share, compared to a net loss of $1.87 million, or $0.25 basic and diluted loss per share for the quarter ended June 30, 2025. The increase in net income/decrease in net loss is primarily due to a decrease in loss and loss adjustment expenses, as there were no underwriting losses recorded for the period ended June 30, 2026. SurancePlus management fee income, along with reduced professional fees and overall compensation, contributed towards the net income results for the quarter.

Net income for the six months ended June 30, 2026, was $198,000, or $0.02 basic and diluted income per share, compared to a net loss of $2.01 million, or $0.28 per basic and diluted loss per share for the six months ended June 30, 2025. The decrease in net loss is due primarily to a decrease in loss and loss adjustment expenses as there were no underwriting losses recorded for the period ending June 30, 2026. Again, SurancePlus management fee income, along with reduced professional fees and reduced overall compensation, contributed towards the improved result for the six months ended June 30, 2026. Net premiums earned for the quarter ending June 30, 2026 decreased to $368,000 from $582,000 for the quarter ending June 30, 2025.

The decrease is due to a lower weighted average rate on reinsurance contracts in force during the quarter, as well as the low amount of capital deployed into reinsurance contracts during the quarter when compared to the prior period. Net premiums earned for the six months ending June 30th, 2026 decreased to $924,000 from $1.1 million for the six months ending June 30th, 2025. The decrease, again, is due to lower weighted average rate on reinsurance contracts in force during the six-month period, as well as the lower amount of capital deployed into reinsurance contracts during the six-month period when compared with the prior period. Earned investment income and other income for the three and six months ending June 30th, 2026 decreased to $71,000 from $93,000 and $139,000 from $173,000 respectively when compared with the prior comparable periods.

Along with net premiums and management fee income, our total revenue for three and six months ending June 30th, 2026 amounted to $940,000 and $1.5 million compared to $664,000 and $1.3 million in the prior year comparable periods respectively. For the quarter ending June 30th, 2026, total expenses, including policy acquisition costs and general admin expenses, decreased to $647,000 from $3.6 million for the quarter ending June 30th, 2025. The decrease is primarily due to no underwriting losses recognized for the quarter ending June 30th, 2026. Reduced professional fees and reduced overall compensation also contributed to the decrease for the quarter. For the six months ending June 30th, 2026, total expenses increased to $1.2 million from $4.2 million for the six months ending June 30th, 2025.

The decrease again is primarily due to no underwriting losses incurred and recognized for the period, and reduced professional fees and reduced overall compensation also contributed towards the decrease. As we have discussed before on investor calls, we use various measures to analyze the growth and profitability of our business operations. For reinsurance business, we measure underwriting profitability by examining our loss ratio, acquisition ratio, expense ratio, and combined ratio. The loss ratio is the ratio of loss and loss adjustment expenses incurred to premiums earned and measures underwriting profitability of our reinsurance business. The loss ratio decreased to 0% from 394% for the quarter ending June 30th, 2026 when compared with the comparable period. The decrease was due to no underwriting losses being recorded for the quarter, whereas a full limit loss was recognized for one of the reinsurance contracts during the three-month period ending June 30th, 2025.

The loss ratio also decreased to 0% from 194.8% for the six-month period ending June 30th, 2026 when compared with the prior comparative period. The decrease was due to no losses being recorded during the six-month period ending June 30th, 2026, again, whereas a full limit loss was recognized for one of our reinsurance contracts during the similar six-month period, June 30th, 2025. Our acquisition cost ratio, which measures operational efficiency, compares policy acquisition costs and net premiums earned. The acquisition cost ratio increased marginally to 12% from 11% for the quarter ending June 30th, 2026 when compared to the prior comparable period. The increase in acquisition cost ratio is due to reduced net premiums earned and marginal premium adjustments recognized during the quarter ending June 30th, 2026 when compared to the prior year comparable period.

The acquisition cost increased marginally 11.4% from 11% for the six-month period ending June 30th, 2026 when compared with the prior comparable period. The increase in acquisition cost was due to reduced net premiums earned and marginal premium adjustments recognized during the six-month period ending June 30th, 2026 when compared with the prior year comparable period. Our expense ratio, which measures operating performance, compares policy acquisition costs and general admin expenses with net premiums earned. For the quarter ending June 30th, 2026, the expense ratio decreased to 175.8% from 227% for the quarter ending June 30th, 2025. For the six months ending June 30th, 2026, the expense ratio decreased to 133.1% from 160.7% for the six-month period ending June 30th, 2025. The decrease in both periods are primarily due to reduced professional fees and reduced overall compensation during the quarter when compared with the prior year comparable periods.