OXBRIDGE RE HOLDINGS Ltd
For the period ended Jun 30, 2024. Filed Aug 8, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 8, 2024
OXBR$0.87+13.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0001493152-24-018419
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001493152-24-030747
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 104 previous paragraphs and 115 current paragraphs.
76 unchanged; 25 reworded; 14 added; 3 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
On July 11, 2024, SurancePlus Inc. (“SurancePlus”), an indirect wholly owned subsidiary of Oxbridge Re Holdings Limited (“Oxbridge”), completed its private placement (the “Private Placement”) of Participation Shares (the “Securities”) represented by digital tokens issued under a 3-year Participation Share Investment Contract (the “PSIC”). On July 11, 2024, SurancePlus entered into subscription agreements with accredited investors and non-U.S. persons in the Private Placement with respect to 287,705 of the Participation Shares represented by the digital tokens, EpsilonCat Re at a purchase price of $10.00 per Participation Share for aggregate gross proceeds of $2,878,048 which approximately $1,469,000 was received from third-party investors and approximately $1,409,000 from Oxbridge Re Holdings Limited. Approximately $312,000 and $299,000 of management fees were deducted from the gross proceeds from the third-party investors and Oxbridge Re Holdings Limited, respectively, The tokens were issued on the Avalanche blockchain. Ownership of EpsilonCat Re tokenized Participation Shares indirectly confers fractionalized interests in reinsurance contracts underwritten by Oxbridge Re’s reinsurance subsidiary, Oxbridge Re NS, for the 2024-2025 treaty year. The Participation Shares are not shares in SurancePlus and shall have no preemptive right or conversion rights. The Participation Shares solely confer contractual rights against SurancePlus as contained in the PSIC.
Current report
ATM Facility
Current report
On September 30, 2022, the Company entered into an Equity Distribution Agreement (the “Offering Agreement”) with Maxim Group LLC, as sales agent (the “Sales Agent”), pursuant to which the Company could offer and sell, from time to time, through the Sales Agent up to $6,300,000 of the Company’s ordinary shares, $0.001 par value (“Ordinary Shares”). The expiration date of the Offering Agreement is the earlier of (i) the issuance and sale of the Ordinary Shares having an aggregate offering price equal to $6,300,000, or (ii) the termination of the Offering Agreement by either the Sales Agent or the Company, in each such party’s sole discretion, upon the provision of thirty (30) days’ written notice. The Company will pay the Sales Agent a commission equal to 3.0% of the gross proceeds of the Ordinary Shares sold by the Sales Agent pursuant to the Offering Agreement.
Current report
Sales of the Ordinary Shares under the Offering Agreement, if any, may be made in transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended, including without limitation sales made directly on or through the Nasdaq Capital Market or any other existing trading market for the Ordinary Shares. The Sales Agent will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the Ordinary Shares from time to time, based upon instructions from the Company (including any price, time or amount limits the Company may impose). The Company is not obligated to make any sales under the Offering Agreement.
Current report
The Ordinary Shares were registered pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-262590) (the “Registration Statement”), and offerings of the Ordinary Shares will be made only by means of a prospectus supplement.
Current report
As of June 30, 2024, we have sold 29,918 shares of our common stock under the ATM program for gross proceeds of $77,000. After deducting commissions related to the ATM offering of $2,000, the net proceeds we received from the transactions were $75,000. The proceeds from the ATM sales are being used for general corporate purposes.
Current report
Net loss for the six months ended June 30, 2024 was $1.73 million or $0.29 per basic or diluted earnings per share compared to a net income of $57,000, or $0.01 per basic and diluted income per share, for the six months ended June 2023. The increase in net loss was the result of the negative change in the fair value of equity securities and investments which outweighed the revenue driven by increase in SurancePlus management fee income, during the six months ended June 30, 2024 when compared with the prior period.
Current report
Net premiums earned for the quarter ended June 30, 2024 increased to $564,000 from $183,000 for the quarter ended June 30, 2023. This increase is attributed to the prior period recognizing only one month of premiums due to the acceleration of premiums on contracts in force during the quarter ended June 30, 2023. In contrast, the current year accounted for a full quarter of premiums.
Current report
Net premiums earned for the six months ended June 30, 2024, increased to $1.1 million from $183,000 for the same period in 2023. This increase is primarily due to the prior year recognizing only one month of premiums because of premium acceleration on the reinsurance contracts in force. In contrast, the six months ended June 30, 2024, recognized a full six months of premiums.
Current report
Policy acquisition costs and underwriting expenses for the six months ended June 30, 2024 increased to $122,000 from $20,000 for the six-months ended June 30, 2023.
Current report
The increases are primarily due to the prior periods recognizing only one month of policy acquisition costs because of premium and acquisition costs acceleration on the reinsurance contracts in force. In contrast, the quarter and six months ended June 30, 2024, recognized a full three and six months of policy acquisition costs, respectively.
Current report
General and administrative expenses for the six months ended June 30, 2024 decreased to $1.05 million, from $1.1 million, for the quarter ended June 30, 2023. The decrease is due to expense fluctuations along with the decrease in offering costs associated with SurancePlus being recognized during the six-month period ending June 30, 2024 when compared to the prior period.
Current report
Other liabilities – Cat Re Tokenholders. As of June 30, 2024, amounts due to Cat Re tokenholders decreased by $284,000 from $1.52 million at December 31, 2023. The decrease is due to returns made to investors who invested in Delta Cat Re tokens outweighing the proceeds from third-party investors purchasing the Epsilon Cat Re participation shares represented by digital tokens (net of management fees), plus one month underwriting-relating income that is attributable to third-party tokenholders.
Current report
***Unearned Premium Reserve.***As of June 30, 2024, our unearned premium reserve increased by $1.3 million to $2,181,000 from $915,000 at December 31, 2023. The increase is due to reinsurance contracts placed for the 2024 2025 treaty year.
Removed paragraphs (3)
Previous report
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Previous report
Net premiums earned for the quarter ended March 31, 2024 increased to $549,000 from $0 for the quarter ended March 31, 2023. The increase is due to the contracts that were in force in the quarter ended March 31, 2024 , as opposed to the prior period in which premiums were accelerated prior to the quarter ending March 31, 2023 as a result of losses incurred from Hurricane Ian.
Previous report
Loan receivable. As of March 31, 2024, our loan receivable reduced from $100,000 to $0 as the loan note was paid off in full.
Reworded paragraphs (25)
Previous wording
The following is a discussion and analysis of our results of operations for the three-month periods ended March 31, 2024 and 2023 and our financial condition as of March 31, 2024 and December 31, 2023. The following discussion should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and in our Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 26, 2024. References to “we,” “us,” “our,” “our company,” or “the Company” refer to Oxbridge Re Holdings Limited and its wholly-owned subsidiaries, Oxbridge Reinsurance Limited and Oxbridge Re NS, unless the context dictates otherwise.
Current wording
The following is a discussion and analysis of our results of operations for the three and six-month periods ended June 30, 2024 and 2023 and our financial condition as of June 30, 2024 and December 31, 2023. The following discussion should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and in our Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 26, 2024. References to “we,” “us,” “our,” “our company,” or “the Company” refer to Oxbridge Re Holdings Limited and its wholly-owned subsidiaries, Oxbridge Reinsurance Limited and Oxbridge Re NS, unless the context dictates otherwise.
Previous wording
On March 18, 2024, Oxbridge Re Holdings Limited (the “Company”) and its indirect wholly owned subsidiary SurancePlus Inc. (“SurancePlus”), a British Virgin Islands Business Company, announced the commencement of an offering by SurancePlus of Participation Shares (the “Securities”) represented by digital tokens to be issued under a 3-year Participation Share Investment Contract (the “PSIC”). The Participation Shares are not shares in SurancePlus and shall have no preemptive right or conversion rights. The Participation Shares solely confer contractual rights against SurancePlus as contained in the PSIC. At the offering’s commencement, up to one million (1,000,000) Participation Shares will be issued, represented by digital tokens labelled “EpsilonCat Re”. The quantity of Participation Shares to be issued in subsequent years of 2025, and 2026, shall be disclosed prior to their issuances. At the start of the offering, the Participation Shares will be offered at an initial price of $10.00 per Participation Share.
Current wording
On March 18, 2024, Oxbridge Re Holdings Limited (the “Company”) and its indirect wholly owned subsidiary SurancePlus Inc. (“SurancePlus”), a British Virgin Islands Business Company, announced the commencement of an offering by SurancePlus of Participation Shares (the “Securities”) represented by digital tokens to be issued under a 3-year Participation Share Investment Contract (the “PSIC”). The Participation Shares are not shares in SurancePlus and shall have no preemptive right or conversion rights. The Participation Shares solely confer contractual rights against SurancePlus as contained in the PSIC. At the offering’s commencement, up to one million (1,000,000) Participation Shares were issued, represented by digital tokens labelled “EpsilonCat Re”. The quantity of Participation Shares to be issued in subsequent years of 2025, and 2026, shall be disclosed prior to their issuances. At the start of the offering, the Participation Shares were offered at an initial price of $10.00 per Participation Share.
Previous wording
The net proceeds from the offer and sale of the Participation Shares will be used by SurancePlus to purchase one or more participating notes of Oxbridge Re NS, an affiliated Cayman Islands licensed reinsurance entity, and the proceeds from the sale of such participating notes will be invested in collateralized reinsurance contracts to be underwritten by Oxbridge Re NS. The holders of the Participation Shares will generally be entitled to proceeds from the payment of the participating notes in the amount of a preferred return equal to the initial Participation Share price, plus 20%, and then 80% of any proceeds in excess of the amount necessary to pay the preferred return.
Current wording
The net proceeds from the offer and sale of the Participation Shares were used by SurancePlus to purchase one or more participating notes of Oxbridge Re NS, an affiliated Cayman Islands licensed reinsurance entity, and the proceeds from the sale of such participating notes were invested in collateralized reinsurance contracts to be underwritten by Oxbridge Re NS. The holders of the Participation Shares are generally be entitled to proceeds from the payment of the participating notes in the amount of a preferred return equal to the initial Participation Share price, plus 20%, and then 80% of any proceeds in excess of the amount necessary to pay the preferred return.
Previous wording
The Company’s wholly-owned licensed reinsurance subsidiary, Oxbridge Reinsurance Limited (“Oxbridge Reinsurance”), is the lead investor in Oxbridge Acquisition’s sponsor and holds the equivalent of 1,426,180 of Jet.AI Inc’s common stock (NASDAQ: JTAI) and 3,094,999 of Jet.AI Inc.’s warrants (NASDAQ:JTAIW).
Current wording
The Company’s wholly-owned licensed reinsurance subsidiary, Oxbridge Reinsurance Limited (“Oxbridge Reinsurance”), is the lead investor in Oxbridge Acquisition’s sponsor and at June 30, 2024, held the equivalent of 1,423,827 of Jet.AI Inc’s common stock (NASDAQ: JTAI) and 3,094,999 of Jet.AI Inc’s warrants (NASDAQ: JTAIW). On July 29, 2024, the Company’s 3,094,999 warrants were converted into 945,211 of Jet.AI’s common stock in accordance with Jet.AI’s Tender Offer Statement (as amended) as filed with the Securities and Exchange Commission on July 23, 2024.
Previous wording
The Bridge Agreement provides for the issuance of Notes in an aggregate principal amount of $625,000, reflecting a 20% original issue discount. The Notes bear interest at 5% per annum and matured on March 11, 2024. Jet.AI is required to redeem the Notes with 100% of the proceeds of any equity or debt financing at a redemption premium of 110% of the principal amount of the Notes. Jet.AI anticipates redeeming the Notes in full with proceeds expected to be received over the next several months from existing financing arrangements.
Current wording
The Bridge Agreement provides for the issuance of Notes in an aggregate principal amount of $625,000, reflecting a 20% original issue discount. The Notes bear interest at 5% per annum and mature on March 11, 2024. Jet.AI is required to redeem the Notes with 100% of the proceeds of any equity or debt financing at a redemption premium of 110% of the principal amount of the Notes. Jet.AI anticipates redeeming the Notes in full with proceeds expected to be received over the next several months from existing financing arrangements.
Previous wording
During the year ending December 31, 2023, the Company’s subsidiary, SurancePlus Inc., entered into subscriptions agreements for the sale of its Series DeltaCat Re tokens, representing fractionalized interest in reinsurance contracts underwritten by Oxbridge Re NS. The tokens were issued on the Avalanche blockchain.
Current wording
During the six-month period ended June 30, 2024, the Company’s subsidiary, SurancePlus Inc., entered into subscriptions agreements for the sale of its participation Shares represented by the digital, representing fractionalized interest in reinsurance contracts underwritten by Oxbridge Re NS. The tokens were issued on the Avalanche blockchain.
Previous wording
SurancePlus receives an incentive and management fee to cover costs associated with origination, structuring and the blockchain technology related to the tokens. These fees are included in SurancePlus management fee line item in the consolidated statement of operations.
Current wording
SurancePlus receives an incentive and management fee to cover costs associated with origination, structuring and the blockchain technology related to the tokens. These fees are included in SurancePlus management fee line item in the consolidated statements of operations.
Previous wording
The following is our consolidated statement of operations and performance ratios for the three-month periods ended March 31, 2024 and 2023 (dollars in thousands, except per share amounts):
Current wording
The following is our consolidated statement of operations and performance ratios for the three and six-month periods ended June 30, 2024 and 2023 (dollars in thousands, except per share amounts):
Previous wording
General. Net loss for the quarter ended March 31, 2024 was $905,000, or ($0.15) basic and diluted earnings per share compared to a net earnings of $142,000, or $0.02 basic and diluted earnings per share, for the quarter ended March 31, 2023. The decrease is primarily due to the negative change in the fair value of equity securities and investments during the quarter ended March 31, 2024 when compared with the prior period.
Current wording
General. Net loss for the quarter ended June 30, 2024 was $821,000, or ($0.14) basic and diluted earnings per share compared to a net loss of $85,000, or ($0.01) basic and diluted loss per share, for the quarter ended June 30, 2023. The increase in net loss is primarily due to the negative change in the fair value of equity securities and investments during the quarter ended June 30, 2024 when compared with the prior period.
Previous wording
Losses Incurred. There were no losses incurred during the three-month periods ending March 31, 2024 and 2023.
Current wording
Losses Incurred. There were no losses incurred during the six-month periods ending June 30, 2024 and 2023.
Previous wording
Policy Acquisition Costs. Acquisition costs represent the amortization of the brokerage fees and federal excise taxes incurred on reinsurance contracts placed. Policy acquisition costs for the quarter ended March 31, 2024 increased to $60,000 from $0 for the quarter ended March 31, 2023. The increase is due to the contracts in force in the quarter ended March 31, 2024, as opposed to the prior period in which premiums and policy acquisition costs were accelerated prior to the quarter ending March 31, 2023 as a result of losses incurred from Hurricane Ian.
Current wording
Policy Acquisition Costs and Underwriting Expenses. Acquisition costs represent the amortization of the brokerage fees and federal excise taxes incurred on reinsurance contracts placed. Policy acquisition costs and underwriting expenses for the quarter ended June 30, 2024 increased to $62,000 from $20,000 for the quarter ended June 30, 2023.
Previous wording
General and Administrative Expenses. General and administrative expenses for the quarter ended March 31, 2024 increased to $488,000, from $404,000 for the quarter ended March 31, 2023. The increase is due to professional and legal expenses incurred during the three-month period ending March 31, 2024.
Current wording
General and Administrative Expenses. General and administrative expenses for the quarter ended June 30, 2024 decreased to $ 566,000, from $677,000 for the quarter ended June 30, 2023. The decrease is due to the decrease in offering costs associated with SurancePlus being recognized during the three-month period ending June 30, 2024 when compared with the same period last year.
Previous wording
The acquisition cost ratio increased to 10.9% for the three-month period ended March 31, 2024, from 0% for the three-month period ended March 31, 2023. The increase is primarily to premiums being earned during the period ending March 31, 2024, when compared with the prior period.
Current wording
The acquisition cost ratio increased marginally to 11.0% for the six-month period ended June 30, 2024, from 10.9% for the six-month period ended June 30, 2023. The increase is primarily to premiums being earned during the period ending June 30, 2024, when compared with the prior period.
Previous wording
***Expense Ratio.***The expense ratio is the ratio of policy acquisition costs, other underwriting expenses and general and administrative expenses to net premiums earned. We use the expense ratio to measure our operating performance. The expense ratio increased from 0.0% for the three-month period ended March 31, 2023 to 99.8% for the three-month period ended March 31, 2024. The increase is due to higher general administrative expenses incurred during the three-month period ended March 31, 2024, when compared with the prior period.
Current wording
***Expense Ratio.***The expense ratio is the ratio of policy acquisition costs, other underwriting expenses and general and administrative expenses to net premiums earned. We use the expense ratio to measure our operating performance. The expense ratio decreased from 601.6% for the six-month period ended June 30, 2023 to 105.7% for the six-month period ended June 30, 2024. The improvement is due to the higher levels of premium earned during the six-month period ended June 30, 2024, when compared with the prior period.
Previous wording
***Combined Ratio.***We use the combined ratio to measure our underwriting performance. The combined ratio is the sum of the loss ratio and the expense ratio. The combined ratio increased from 0% for the three-month period ended March 31, 2023 to 99.8% for the three-month period ended March 31, 2024. The increase is due to higher general administrative expenses incurred during the three-month period ended March 31, 2024, when compared with the prior period
Current wording
***Combined Ratio.***We use the combined ratio to measure our underwriting performance. The combined ratio is the sum of the loss ratio and the expense ratio. The combined ratio decreased from 601.6% for the six-month period ended June 30, 2023 to 105.7% for the six-month period ended June 30, 2024. The improvement is due to the higher levels of premium earned during the six-month period ended June 30, 2024, when compared with the prior period.
Previous wording
**Restricted Cash and Cash Equivalents.**As of March 31, 2024, our restricted cash and cash equivalents increased by $604,000, or 15.7%, to $4.3 million, from $3.7 million as of December 31, 2023. The increase is the result of premium deposits made during the three months ended March 31, 2024.
Current wording
**Cash and Cash Equivalents and Restricted Cash and Cash Equivalents.**As of June 30, 2024, our restricted cash and cash equivalents increased by $240,000, or 6.40%, to $3.99 million, from $3.75 million as of December 31, 2023. The increase is the result of premium deposits made during the six months ended June 30, 2024.
Previous wording
**Investments.**As of March 31, 2024, our total investments decreased by $396,000 or 58% to $284,000, from $680,000 as of December 31, 2023. The decrease is primarily a result of the sale of two equity securities and the decrease in value of the equity securities during the three-month period ended March 31, 2024.
Current wording
**Investments.**As of June 30, 2024, our total investments decreased by $467,000 or 69% to $213,000, from $680,000 as of December 31, 2023. The decrease is primarily a result of the sale of two of the equity securities and the decrease in value of the equity securities during the six-month period ended June 30, 2024.
Previous wording
Other investments. As of March, 31, 2024, our other investments decreased $688,000 to $1.79 million from $2.48 million at December 31, 2023. The decrease is due to fair value changes of our investment in Jet.AI in which the Company has an equity investment measured at fair value.
Current wording
Other investments. As of June, 30, 2024, our other investments decreased $1.5 million to $965,000 from $2.48 million at December 31, 2023. The decrease is due to fair value changes of our investment in Jet.AI in which the Company has an equity investment measured at fair value.
Previous wording
Notes Payable to Noteholders. As of March 31, 2024, our notes payable remained at $118,000 as there were no redemptions during the period.
Current wording
Notes Payable to Noteholders. As of June 30, 2024, our notes payable remained stable at $118,000.
Previous wording
Our cash flows from operating, investing, and financing activities for the three-month periods ended March 31, 2024 and 2023 are summarized below.
Current wording
Our cash flows from operating, investing, and financing activities for the six-month periods ended June 30, 2024 and 2023 are summarized below.
Previous wording
Cash Flows for the Three months ended March 31, 2024 (in thousands)
Current wording
Cash Flows for the Six months ended June 30, 2024 (in thousands*)*
Previous wording
Net cash provided by operating activities for the three months ended March 31, 2024 totaled $119, which consisted primarily of cash received net written premiums less cash disbursed for operating expenses. Net provided by investing activities of $448 which was due to the repayment of the note receivable by Jet.AI and the proceeds from the sale of two of our equity securities. Net cash used provided financing activities was $0.
Current wording
Net cash used in operating activities for the six months ended June 30, 2024 totaled $1,752, which consisted primarily of cash received net written premiums less cash disbursed for operating expenses. Net cash provided by investing activities of $448 which was due to the repayment of the note receivable by Jet.AI and the proceeds from the sale of two of our equity securities. Net cash provided by financing activities was $1,544 which consisted primarily of net proceeds from Epsilon Cat Re participation shares represented by digital tokens offset by the payments made to DeltaCat Re tokenholders.
Previous wording
Cash Flows for the Three months ended March 31, 2023 (in thousands)
Current wording
Cash Flows for the Six months ended June 30, 2023 (in thousands)
Previous wording
Net cash used in operating activities for the three months ended March 31, 2023 totaled $140, which consisted primarily of cash received net written premiums less cash disbursed for operating expenses. Net cash used in investing activities of $5 was primarily due to the purchase of property and equipment. Net cash used in financing activities was $163 which was due to the partial redemption on Oxbridge Re NS participating notes as well as prepaid offering costs.
Current wording
Net cash used in operating activities for the six-months ended June 30, 2023 totaled $1,614, which consisted primarily of cash received net written premiums less cash disbursed for operating expenses. Net cash used in investing activities of $5 Net cash provided by financing activities was $1,180 which consisted primarily of net proceeds from Delta Cat Re Tokens offset by the payment made to noteholders.
Previous wording
Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. For fixed maturity securities, inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, broker quotes for similar securities and other factors. The fair value of investments in stocks and exchange-traded funds is based on the last traded price. The fair value of our indirect investment in Oxbridge Acquisition Corp. is based on the fair value calculation made by an independent valuation expert utilizing observable and unobservable inputs. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Company’s investment custodians and management. The investment custodians and management consider observable data to be market data, which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant markets. The categorization of a financial instrument within the hierarchy is based upon the pricing transparency of the instrument, as well as the marketability of the instrument and the risk of forfeiture of such instrument.
Current wording
Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. For fixed maturity securities, inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, broker quotes for similar securities and other factors. The fair value of investments in stocks and exchange-traded funds is based on the last traded price. The fair value of our indirect investment in Jet.AI is based on the last traded price in an actively traded market. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Company’s investment custodians and management. The investment custodians and management consider observable data to be market data, which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant markets. The categorization of a financial instrument within the hierarchy is based upon the pricing transparency of the instrument, as well as the marketability of the instrument and the risk of forfeiture of such instrument.