Oxbridge Re Holdings Limited (OXBR) Q3 2026 Earnings Report, Transcript and Summary

Good afternoon. Welcome to Oxbridge third quarter 2026 earnings call. My name is [Jasmina], and I will 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 Chairman, President, and Chief Executive Officer, Jay Madhu, and Chief Financial Officer and Corporate Secretary, Wrendon Timothy. Following their remarks, we will open the call up for questions. I would like to remind everyone that this call will be available via telephone replay until November 23, 2026. Details for the telephone replay are included in the press release issued today. Now, I would like to turn the call over to Wrendon Timothy, Chief Financial Officer of Oxbridge, who will be providing the necessary cautions 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 Oxbridge future financial performance. These forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as anticipate, 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 risks and uncertainties that can 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 30th, 2026, with the Securities and Exchange Commission. The occurrence of any of these risks and uncertainties can 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 our Chairman, President, and Chief Executive Officer, Jay Madhu. Jay?

Thank you, Wrendon, and welcome everyone. Thank you for joining us today. I'll start with a brief update on SurancePlus and AI GridWorks. Then I'll turn it over to Wrendon for the financial results. After that, I'll come back to talk about how we're developing AI GridWorks and where it fits in Oxbridge's strategy. SurancePlus is our real-world asset, or RWA, tokenization platform. We're in our fourth consecutive treaty year of tokenizing reinsurance offerings. As we previously announced, we've completed five offerings for the 2026-2027 treaty year, with approximately $7.1 million in aggregated gross proceeds. Two were tied to reinsurance originated by Oxbridge. The other three, associated with HCI Group and Fortex Re, were our first offerings tied to third-party reinsurance. That matters because it shows how we can use the platform to structure and issue securities tied to reinsurance originated outside Oxbridge. On October 21, HCI said it expected Hurricane Isaias to affect only Series B among its three offerings, and that Series B remained profitable at the time of that update. Actual returns depend on underwriting results. At AI GridWorks, our initial work has focused on building the development team, evaluating sites, and working with the utilities to understand how much power could be available and when. We've also been speaking with relevant local authorities to understand the zoning and infrastructure requirements for the sites we're evaluating. With that brief overview, Wrendon, over to you for the financial results.

Thank you, Jay. I'd like to remind everyone that our typical contract period is from June 1 to May 31st of the following year. With respect to net loss, net loss for the quarter ended September 30th, 2026, was $421,000, or $0.05 per basic and diluted loss per share, compared to a net loss of $187,000, or $0.02 per basic and diluted loss per share for the quarter ended September 30th, 2025. The increase in net loss is primarily due to a decline in net premiums earned for the period ended September 30th, 2026, the result of less capital being put to work, which was partially offset by a higher net investment and other income and lower general and administrative expenses. Net loss for the nine months ended September 30th, 2026, was $223,000, or $0.03 per basic and diluted loss per share, compared to a net loss of $2.19 million, or $0.30 per basic and diluted loss per share for the nine months ended September 30th, 2025. The 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 September 30th, 2026. SurancePlus management fee income, along with reduced professional fees and overall compensation, contributed toward the decrease in net loss for the nine-month period ended September 30th, 2026. Net premium earned for the quarter ended September 30th, 2026, decreased to $86,000 from $555,000 for the quarter ended September 30th, 2025. The decrease is due to a lower amount of capital deployed into reinsurance contracts during the quarter when compared to prior period as a result of the company's pivot. Net premiums earned for the nine months ended September 30th, 2026, decreased to $1.01 million from $1.73 million for the nine months ended September 30th, 2025. The decrease is due to a lower amount of capital deployed into reinsurance contracts during the nine-month period when compared to the prior period. Our net investment and other income for the three and nine months ended September 30th, 2026, increased to $175,000 from $79,000 and $312,000 from $251,000 respectively when compared with prior year comparable periods. Along with net premiums and management fee income, our total revenue for the three and nine months ended September 30th, 2026, amounted to $261,000 and $1.8 million compared to $645,000 and $2 million in the prior year comparable periods respectively. With regards to total expenses for the quarter ended September 30th, 2026, total expenses, including policy acquisition costs and general and admin expenses, decreased to $647,000 from $815,000 for the quarter ended September 30th, 2025. The decrease is primarily due to reduced professional fees and overall compensation for the three months ended September 30th, 2026. For the nine-month period ended September 30th, 2026, total expenses, which includes policy acquisition costs and general admin expenses, decreased to $1.87 million from $4.99 million for the nine months ended September 30th, 2025. The decrease is primarily due to no underwriting losses incurred and recognized for the nine months ended September 30th, 2026. Reduced professional fees and reduced overall compensation also contributed towards the decrease for the nine-month period ended September 30th, 2026. As we have discussed before on our 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 the underwriting profitability of our reinsurance business. The loss ratio remained consistent at 0% for the three-month period ended September 30th, 2026, when compared with the prior year comparative period. The loss ratio decreased to 0% from 132.4% for the nine-month period ended September 30th, 2026, when compared with prior comparative period. This was due to no losses being recognized for the nine-month period ended September 30th, 2026, whereas a full limit loss was recognized for one of our reinsurance contracts during the nine-month period ended September 30th, 2025. Our acquisition cost ratio, which measures operational efficiency, compares policy acquisition costs and net premiums earned. The acquisition cost ratio decreased marginally to 10.5% from 11% for the quarter ended September 30th, 2026, when compared to the prior comparable period. The decrease in acquisition cost ratio is due to reduced net premiums earned during the period ended September 30th, 2026, when compared to prior comparable period. The acquisition cost ratio increased marginally to 11.3% from 11% for the nine-month period ended September 30, 2026, when compared to prior comparable period. The increase in acquisition cost ratio is due to a reduced net premiums earned and marginal premium adjustments recognized during the period ended September 30th, 2026, when compared to the prior comparable period. Our expense ratio, which measures operating performance, compares policy acquisition costs and general and admin expenses with net premiums earned. For the quarter ended September 30th, 2026, the expense ratio increased to 752.3% from 146.8% for the quarter ended September 30th, 2025. The increase is primarily due to reduced net premiums earned during the quarter when compared with the prior year period. For the nine-month ended September 30th, 2026, the expense ratio increased to 185.8% from 156.2% for the nine-month period ended September 30th, 2025. The increase is again primarily due to reduced net premiums earned during the nine-month period ended September 30, 2026, when compared with the prior year comparable period. Our combined ratio, which is used to measure underwriting performance, is the sum of the loss ratio and expense ratio. For the quarter ended September 30th, 2026, the combined ratio increased to 752.3% from 146.8% for the quarter ended September 30th, 2025. The increase is primarily due to reduced net premiums earned during the quarter when compared with the prior period. For the nine-month ended September 30th, 2026, the combined ratio decreased to 185.8% from 288.6% for the nine-month period ended September 30th, 2025. The decrease is primarily due to reduced net premiums earned during the nine-month period ended September 30th, 2025, when compared with the prior period. Now turning to the balance sheet. As of September 30th, 2026, our combined cash and restricted cash and cash equivalents increased by $12.5 million to $19.5 million from $6.9 million as of December 31st, 2025. The increase is the net result of the investment in new tokenized securities, the release of collateral from the 2025-2026 successful reinsurance treaty contracts, and premium deposits made during the nine months ended September 30, 2026. Now I'd like to turn the call back over to Jay, who will wrap up before we take any of your questions. Jay?

Thank you, Wrendon. Let's turn back to AI GridWorks and where we fit in the data center business. Our focus is on land, the utility power, and the facility. We develop the infrastructure and customers and operating partners to use, to install, and run their computing equipment. We're primarily focused on projects in the 10 MW-100 MW range. Since launching in August, we've assembled a team with 44 years of combined experience across data center operations, utilities, power infrastructure, engineering, and site development. That experience matters when you're taking a site from initial evaluation through utility coordination, permitting, and construction planning. Oxbridge's capital markets and corporate finance teams help us assess project economics and decide when to commit capital. The first decisions are about site control, how much power can be delivered and when, and which approvals the projects need. Working through these questions early gives us choices. On some projects, it may make sense to sell a powered site or bring in a partner. On others, we may develop a powered shell, retain ownership, and lease some or all of the space. We can also operate facility power and cooling systems and fit out additional data halls as customer demands warrants. We've also presented at industry and investor conferences and met with institutional investors, capital providers, and prospective partners for both businesses. Now to talk about project financing and tokenization. This is where two businesses can complement each other. AI GridWorks develops the infrastructure. Through SurancePlus, we have the experience structuring and issuing securities using RWA tokenization. For selected projects, that experience could give us another financing option alongside traditional sources. We'll evaluate those options project by project when the timing and economics warrant it. Depending on the project, that would mean project-level debt, a fractional ownership interest in the entity that owns a facility, or an investment tied to the facility's cash flow. The results associated with the investment could be represented on-chain. That could give eligible investors a way to participate with a smaller commitment. For context, the HCI reinsurance offering had an announced minimum of $5,000. One idea we could explore is giving eligible residents of the county hosting a data center priority access to portions of the project's offerings. We could use our RWA tokenization platform to administer that allocation and verify residency during investor onboarding. The terms and eligibility would depend on the project and applicable security laws. With that, let's open the call for questions. Operator, please go ahead.

Thank you, sir. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the queue. You may press star two if you would 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 star keys. One moment, please, while we poll for questions. Our first question is from Allen Klee with Maxim Group, LLC. Please proceed with your question.

Good afternoon. In the data center area, could you talk a little about the type of opportunities that you think are out there that fit for you and potential interest and any current impacts of the recent elections? Thank you.

Yeah. Hi, Allen. Thank you for that question. I'll talk about the state of affairs, political state of affairs. Our projects are smaller projects. We're talking about nano data centers, 10 MW-100 MW. That could potentially lead to larger, obviously. Since the elections, we have reached out to various government officials in the states and the counties that we are considering doing something, and we have been assured that the thoughts are still data center-centric. Obviously, we will have to prove and make sure we have the various different approvals that would be needed. By and large, they are for it. In terms of what we are looking at and what sets us apart, so to speak, nano data centers, power first, we're looking at distribution. Primarily, we're looking at centers where we can get 2027 power and a scale-up and a ramp-up in very short order. Counties that want us is where we are looking to move forward with. Power first, make sure we have all the various different approvals, et cetera, and we can get those in short order. That's what we're looking for, and that's what we are spending all our time making sure we're in those areas. It looks good.

Thank you. Then kind of, in terms of potentially financing some of the project with your tokenization, does that I guess I'm trying to think about, like, is there an issue of, like, these projects are very capital-intensive and kind of need You have to get the money up front. Does that create an issue of being able to think you can get enough and certainty with high-net-worth individuals? Or was it just like, that would be one piece of the financing?

Yes. Tokenization is a piece of the financing, absolutely. We would utilize everything that is afforded to us. We would look for our traditional capital structures that we can take advantage of. But the tokenization, I think, would be extremely interesting. Especially given the fact that we can geocode. So hypothetically, in a particular county, we can reserve an allocation to residents of that county. All the other different ways of tokenizing and all the different ways of raising capital would be there. Now, to your point, yes, these data centers are highly capital-intensive, but in the starting phases, when you're talking about land, you're talking about making sure you have the various different items that needed to be going forward, that's a small dollar amount. We have some capital, and as we go forward, we have the ability to raise a little bit of capital. We're doing this sequentially, and at every different stage, we would do what's needed to be done, but we would be acutely aware of dilution. Dilution is something that's very important to us, important to our shareholders. Tokenizing these data centers would give us an opportunity, or tokenizing the investment gives us an opportunity to raise capital from all over the world, but it's not the end-all be-all.

Okay. Thank you.

Thank you, Al.

Our next question is from Kent Engelke with Capitol Securities. Please proceed with your question.

Hey, Jay. Hey, Wrendon. One of my questions was already answered about the political climate and the like. I am happy to hear that you are going to counties, and the counties and their localities are still very interested in you all and the like. What is the timing on this stuff? Can you give us any insight on the timing of all this?

Yeah, hi, Kent. Thank you for that question. We have been targeting areas where there isn't critical mass in data centers. Thus, there haven't been any major moratoriums that have come forward in terms with data centers. Having said that definitely adds and is good for us. I'm sorry, what was the other part?

The other part is the timing. I'm very much relieved that you're not getting any sort of political pushback. I know the locality I'm in, we're having a lot of political pushback, and I'm very happy to hear that you're having no political pushback and you're being welcomed. What is the timing of when possible construction and the like may actually commence and the like?

Yes. Timing is critical. We are targeting 2027 power, and with being able to ramp up significantly in short order. Timing, very short timing. The political aspect is helping us in terms of the direction and where we're going, but timing, we're acutely aware, it's a race. We're targeting 2027.

I was thinking some of these localities is the tax base would be quite lucrative, and just your ideas of letting the residents participate via the RWAs and the like, I think that's a very good idea. Good job.

Yes, thank you. This really blends well, and it brings forward one of our businesses, which are very complementary to the addition of the AI data center space. As we've always said, we're looking to grow the opportunity, grow the business, and in this way, we're able to grow it hand in hand and tandem.

Mm-hmm. Okay, great. Thank you.

Thank you.

Once again, if you would like to ask a question, please press star one on your telephone keypad. At this time, this concludes our question-and-answer session. I'd like to turn the call back over to Mr. Madhu for closing remarks.

Thank you for your questions and for taking the time to join us today. We appreciate your continued interest in Oxbridge and look forward to keeping you updated. Operator, I'll turn it back to you.

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 company's website. Thank you for joining us today for our presentation. You may now disconnect.