Company: OXBRW
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001641172-25-000736
Chunk: 418

Company: OXBRIDGE RE HOLDINGS Ltd
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1A
Chunk 418
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the “Investment Company Act”), regulates certain companies
that invest in or trade securities. We run the risk of inadvertently being deemed to be an investment company that is required to register
under the Investment Company because a significant portion of our assets may be deemed to consist of, or may be deemed to have consisted
of, investment securities, including potentially Oxbridge Reinsurance Limited’s interest in Oxbridge Acquisition Corp. However,
we rely on an exemption under the Investment Company Act for an entity organized and regulated as a foreign insurance company which is
engaged primarily and predominantly in the reinsurance of risks on insurance agreements. The law in this area is subjective and there
is a lack of guidance as to the meaning of ‘‘primarily and predominantly’’ under the relevant exemption to the
Investment Company Act. For example, there is no standard for the amount of premiums that need to be written relative to the level of
an entity’s capital in order to qualify for the exemption. If this exception were deemed inapplicable, we would have to seek to
register under the Investment Company Act as an investment company, which, under the Investment Company Act, would require an order from
the SEC. Our inability to obtain such an order could have a significant adverse impact on our business, as we might have to cease certain
operations or risk substantial penalties for violating the Investment Company Act.

Registered
investment companies are subject to extensive, restrictive and potentially adverse regulation relating to, among other things, capital
structure, leverage, management, dividends and transactions with affiliates. Registered investment companies are not permitted to operate
their business in the manner in which we operate (and intend to operate) our business. Specifically, if we were required to register
under the Investment Company Act, provisions of the Investment Company Act would limit (and in some cases even prohibit) our ability
to raise additional debt and equity securities or issue options or warrants (which could impact our ability to compensate key employees),
limit our ability to use financial leverage, limit our ability to incur indebtedness, and require changes to the composition of our Board
of Directors. Provisions of the Investment Company Act would also prohibit (subject to certain exceptions) transactions with affiliates.

Accordingly,
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.

If
at any time it were established that we had been operating as an investment company in violation of the registration requirements of