Oxbridge RE Holdings (OXBR) risk factors, FY2024 10-K

Risks Relating to Our Business

1. 01Our results of operations will fluctuate from period to period and may not be indicative of our long-term prospects
2. 02Our tokenization business operations are at an early stage of development and have a limited operating history, and our strategy of developing a Web3-focused RWA tokenization business may not be successful
3. 03Developing a Web3.0-focused business around the tokenization of RWAs involves significant risks
4. 04Failure to become rated by A.M. Best, or receipt of a negative rating, could significantly and negatively affect our ability to grow
5. 05Established competitors with greater resources may make it difficult for us to effectively market our products or offer our products at a profit
6. 06If actual renewals of our existing contracts do not meet expectations, our premiums assumed in future years and our future results of operations could be materially adversely affected
7. 07Reputation is an important factor in the reinsurance industry, and our lack of an established reputation may make it difficult for us to attract or retain business
8. 08If our losses and loss adjustment expenses greatly exceed our loss reserves, our financial condition may be significantly and negatively affected
9. 09The property and casualty reinsurance market may be affected by cyclical trends and over-supply
10. 10Our property and property catastrophe reinsurance operations will make us vulnerable to losses from catastrophes and may cause our results of operations to vary significantly from period to period
11. 11We could face unanticipated losses from war, terrorism, and political unrest, and these or other unanticipated losses could have a material adverse effect on our financial condition and results of operations
12. 12We depend on our clients’ evaluations of the risks associated with their insurance underwriting, which may subject us to reinsurance losses
13. 13Changing climate conditions may adversely affect our financial condition, profitability or cash flows
14. 14Operational risks and losses can result from, among other things, fraud, errors, failure to document transactions properly or to obtain proper internal authorization, failure to comply with regulatory requirements, information technology failures or external events
15. 15The effect of emerging claim and coverage issues on our business is uncertain
16. 16We are required to maintain sufficient collateral accounts, which could significantly and negatively affect our ability to implement our business strategy
17. 17The inability to obtain business provided from brokers could adversely affect our business strategy and results of operations
18. 18The involvement of reinsurance brokers may subject us to their credit risk
19. 19Our use of fair value accounting of our significant investment in Jet.AI Inc. could result in income statement volatility, which in turn, could cause significant market price and trading volume fluctuations for our securities
20. 20U.S. and global economic downturns could harm our business, our liquidity and financial condition and the price of our securities
21. 21Our ability to implement our business strategy could be delayed or adversely affected by Cayman Islands employment restrictions
22. 22Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer
23. 23If we lose or are unable to retain our senior management and other key personnel and are unable to attract qualified personnel, our ability to implement our business strategy could be delayed or hindered, which, in turn, could significantly and negatively affect our business
24. 24There are differences under Cayman Islands corporate law and Delaware corporate law with respect to interested party transactions which may benefit certain of our shareholders at the expense of other shareholders

Risks Relating to Insurance and Other Regulations

1. 25Any suspension or revocation of our reinsurance licenses would materially impact our ability to do business and implement our business strategy
2. 26Our reinsurance subsidiaries are subject to minimum capital and surplus requirements, and our failure to meet these requirements could subject us to regulatory action
3. 27As a holding company, we will depend on the ability of our subsidiaries to pay dividends
4. 28We are subject to the risk of possibly becoming an investment company under U.S. federal securities law
5. 29Accordingly, if we were required to register as an investment company, we would not be permitted to have many of the relationships that we have or expect that we may have with affiliated companies
6. 30Insurance regulations to which we are, or may become, subject, and potential changes thereto, could have a significant and negative effect on our business
7. 31We will likely be exposed to credit risk due to the possibility that counterparties may default on their obligations to us

Risks Relating to our Securities

1. 32Provisions of our Third Amended and Restated Memorandum and Articles of Association (“Articles”) could adversely affect the value of our securities
2. 33Provisions of the Companies Law of the Cayman Islands could prevent a merger or takeover of our company
3. 34Holders of our securities may have difficulty obtaining or enforcing a judgment against us, and they may face difficulties in protecting their interests because we are incorporated under Cayman Islands law
4. 35Provisions of our Articles may reallocate the voting power of our ordinary shares
5. 36We do not currently have an effective registration statement registering the issuance of the shares underlying our publicly traded warrants, and therefore you may not be able to exercise the warrants in a cash exercise

Risks Relating to Taxation

1. 37We may become subject to taxation in the Cayman Islands which would negatively affect our results
2. 38We may be subject to United States federal income taxation
3. 39United States tax-exempt organizations who own ordinary shares may recognize unrelated business taxable income
4. 40Changes in United States tax laws may be retroactive and could subject us, and/or United States persons who own ordinary shares to United States income taxation on our undistributed earnings
5. 41We do not intend to resume paying cash dividends in the foreseeable future
6. 42Outages, computer viruses and similar events could disrupt our operations
7. 43Increased Information Technology (“IT”) security threats and more sophisticated computer crime could pose a risk to our systems, networks, and services