8-K: Oxbridge Re Holdings Launches Digital Token Offering via SurancePlus Subsidiary

Oxbridge Re Holdings' subsidiary, SurancePlus, initiates an offering of Participation Shares represented by digital tokens to accredited investors.

Summary

• Oxbridge Re Holdings Limited, through its subsidiary SurancePlus Inc., has announced the commencement of an offering of Participation Shares represented by digital tokens.
• The offering is structured as a 3-year Participation Share Investment Contract (PSIC).
• Up to 1,000,000 Participation Shares will be issued initially, represented by ZetaCat Re and EtaCat Re tokens, offering high yield and balanced yield options, respectively.
• The initial price is $10.00 per Participation Share, with discounts of 5% and 10% for investments exceeding $50,000 and $100,000, respectively.
• Proceeds will be used by SurancePlus to purchase participating notes of Oxbridge Re NS, which will then be invested in collateralized reinsurance contracts.
• Holders of Participation Shares are entitled to a preferred return equal to the initial share price plus 20%, and 80% of any excess proceeds.
• The securities are offered to accredited investors in the United States under SEC Rule 506(c) and to non-U.S. persons in accordance with Regulation S under the Securities Act.
• The offering is subject to risks and uncertainties, and there is no assurance that it will be completed.

Sentiment

Score: 6

Explanation: The announcement is neutral to slightly positive. It represents a new funding avenue for the company, but also carries inherent risks associated with digital tokens and reinsurance underwriting. The lack of registration under the Securities Act adds a layer of complexity.

Positives

• The offering provides investors with exposure to collateralized reinsurance contracts.
• The structure includes a preferred return for Participation Share holders, mitigating some risk.
• The use of digital tokens may attract a new investor base.

Negatives

• The Participation Shares are not shares in SurancePlus or Oxbridge Re Holdings and have no preemptive or conversion rights.
• The securities have not been registered under the Securities Act of 1933 and are subject to resale restrictions.
• There is no guarantee that the offering will be completed.

Risks

• The offering is subject to the risk factors outlined in Oxbridge Re Holdings' Form 10-K filed on March 30, 2023.
• The value of the digital tokens could be volatile.
• The success of the offering depends on attracting sufficient investor interest.
• The reinsurance contracts underlying the participating notes are subject to underwriting risk.

Future Outlook

The quantity of Participation Shares to be issued in subsequent years of 2026 and 2027 will be disclosed prior to their issuances.

Industry Context

The offering reflects a trend of utilizing digital tokens and alternative investment structures within the reinsurance industry to attract capital and diversify risk.

Comparison to Industry Standards

• Other reinsurance companies, such as RenaissanceRe and Everest Re, typically raise capital through traditional debt and equity offerings.
• The use of digital tokens is a relatively novel approach in the reinsurance sector, with few direct comparables.
• The success of this offering will depend on its ability to attract investors who are comfortable with the risks and complexities of digital assets and reinsurance.

Related Party Transactions

• The net proceeds from the offering will be used by SurancePlus to purchase participating notes of Oxbridge Re NS, an affiliated Cayman Islands licensed reinsurance entity.

Stakeholder Impact

• Shareholders may benefit from the company's ability to raise capital through this offering.
• The offering could provide investors with a new investment opportunity in the reinsurance sector.
• The success of the offering could impact the company's ability to underwrite reinsurance contracts.

Next Steps

• SurancePlus will continue to offer and sell Participation Shares to accredited investors.
• The company will disclose the quantity of Participation Shares to be issued in 2026 and 2027 prior to their issuance.

Key Dates