Core Insights - SunCar Technology Group Inc. is a leader in auto e-insurance and cloud-based B2B auto services in China, participating in the National Automotive Circulation Industry New Year Forum to showcase its technological solutions for enhancing dealer performance [1][4] - The conference gathered over 400 industry stakeholders to discuss market trends and strategies, including the implementation of the 2025 auto trade-in policy [2] - Vice President Gu Saiye highlighted how SunCar's "SunCarInsurance" platform improves dealer competitiveness and customer lifecycle management, leading to increased retention and profitability [3] Company Overview - Founded in 2007, SunCar operates cloud-based platforms connecting drivers with various auto services and insurance options, establishing itself as a leader in the B2B auto services and auto e-insurance markets in China [6] - The company's intelligent cloud platform allows enterprise clients to manage customer databases effectively, providing drivers access to numerous services from independent providers [6] Industry Context - The forum served as a platform for dialogue and collaboration, outlining strategic directions for the automotive circulation industry in 2025, with SunCar committed to leveraging its technological capabilities to address emerging opportunities [5]

Core Insights - SunCar Technology Group Inc. has secured a RMB 14 million (US$1.93 million) contract with China Construction Bank to operate a car wash program in Hunan province, which will last for two years until December 2026 [1][2] - The contract allows SunCar to provide exclusive car wash services to CCB Hunan's Long Card members, building on its previous successful implementations in Fujian and Yunnan provinces [2][3] - This contract marks a significant step in SunCar's evolution from a traditional benefits provider to an "automotive ecosystem operator," integrating banking services, digital payments, and physical car care locations [3] Company Overview - Founded in 2007, SunCar is a leader in the B2B auto services market and the auto e-insurance market for electric vehicles in China, the largest passenger vehicle market globally [4] - The company operates cloud-based platforms that connect drivers with a variety of auto services and insurance options through a nationwide network of sales partners [4] - SunCar's intelligent cloud platform enables enterprise clients to manage customer databases and offerings effectively, providing drivers access to numerous services from independent providers in a single application [4]

Core Insights - SunCar Technology Group Inc. has secured new contracts with China Pacific Insurance Company's Zhejiang and Jiangsu branches, positioning itself as the primary car wash and detailing service provider for CPIC's customers in these regions [1][2] - The expansion increases SunCar's total CPIC provincial partnerships to ten, with a target to double its coverage to 20 provinces by the end of 2025 [2] - The company aims to leverage its technology platform alongside CPIC's extensive customer base to build a comprehensive auto service network in China [2][3] Company Overview - Founded in 2007, SunCar is a leader in the B2B auto services market and the auto e-insurance market for electric vehicles in China, the largest passenger vehicle market globally [3] - The company operates cloud-based platforms that connect drivers with a variety of auto services and insurance options through a nationwide network of sales partners [3] - SunCar's intelligent cloud platform allows enterprise clients to manage their customer databases and offerings effectively, providing drivers access to numerous services from thousands of independent providers [3]

Core Insights - SunCar Technology Group Inc. has significantly expanded its strategic partnership with a leading electric vehicle manufacturer, showcasing its growing influence in China's automotive services sector [1][2] - The partnership, initiated in early 2024, has led to a remarkable increase in automotive insurance brokerage services, with premium volume rising from $400,000 in January 2024 to approximately $40 million by year-end, indicating a hundredfold increase across 48 cities in China [2] - SunCar's AI-powered infrastructure has optimized service delivery, now serving over 2 million electric vehicle owners, setting new standards for efficiency and customer service in the automotive sector [4] Company Developments - The partnership with the EV manufacturer will extend SunCar's geographical footprint and deepen technology integration, incorporating specialized automotive services into the EV manufacturer's owner platform [3] - The company is committed to pioneering innovative solutions that meet the evolving needs of vehicle owners, reinforcing its position in China's rapidly growing electric vehicle market [5] - Founded in 2007, SunCar has established itself as a leader in the B2B auto services market and the auto e-insurance market for electric vehicles in China [5]

Core Insights - SunCar Technology Group Inc. has fully integrated DeepSeek artificial intelligence technology into its cloud-based service platform and car insurance SaaS solutions, marking a significant advancement in its AI-driven strategy [1][3] - The integration enhances traditional automotive services by providing intelligent analytics and personalized solutions, particularly in the car insurance sector, improving risk profiling and insurance recommendations [2][7] Company Overview - Founded in 2007, SunCar is a leader in the B2B auto services and auto e-insurance market in China, the largest passenger vehicle market globally [5] - The company operates cloud-based platforms that connect drivers with a variety of auto services and insurance options through a nationwide network of sales partners [5] Technological Advancements - The implementation of DeepSeek's AI capabilities allows for enhanced insurance recommendation precision through advanced risk profiling and customer need analysis [7] - It improves scheduling efficiency of automotive services with real-time monitoring and maintenance alerts, and enables sophisticated user behavior analysis for personalized service delivery [7] Future Plans - SunCar plans to expand its AI initiatives, focusing on the electric vehicle market, which is the fastest-growing segment for auto sales in China [4] - The company aims to facilitate the transition from traditional to electric vehicles and generate AI-driven incremental revenue through targeted promotions and customized solutions [4]

Core Viewpoint - SunCar Technology Group Inc. has announced a share repurchase program to buy back up to $30 million of its Class A ordinary shares, reflecting the company's confidence in its long-term growth prospects [1][2][3] Group 1: Share Repurchase Program - The share repurchase program is expected to take place over the next 12 months and will be funded through a combination of cash on hand and cash generated from operations [2] - The management believes that this stock repurchase program demonstrates confidence in the business outlook and aims to deliver the best value to shareholders [3] - The company may repurchase shares on the open market or through privately negotiated transactions, depending on various factors including regulatory restrictions and market conditions [3] Group 2: Company Overview - SunCar, founded in 2007, is a leader in cloud-based B2B auto services and auto e-insurance in China, the largest passenger vehicle market in the world [4] - The company operates cloud-based platforms that connect drivers with a wide range of auto services and insurance options through a nationwide network of sales partners [4] - SunCar's intelligent cloud platform allows enterprise clients to manage their customer database and offerings effectively, providing drivers access to numerous services from independent providers [4]

Core Viewpoint - SunCar Technology Group Inc. has announced a public offering of 7,142,858 Class A ordinary shares, aiming for gross proceeds of approximately $50 million before underwriting discounts and commissions [1] Group 1: Offering Details - The offering includes a 30-day option for underwriters to purchase an additional 1,071,429 Class A ordinary shares [1] - The expected closing date for the offering is around February 7, 2025, pending customary closing conditions [1] Group 2: Use of Proceeds - SunCar plans to utilize the net proceeds from the offering for working capital and general corporate purposes [2] Group 3: Company Overview - Founded in 2007, SunCar is a leader in cloud-based B2B auto services and auto e-insurance in China, the largest passenger vehicle market globally [5] - The company operates platforms that connect drivers with various auto services and insurance options through a nationwide network of sales partners [5] - SunCar's intelligent cloud platform allows enterprise clients to manage customer databases and offerings effectively, providing drivers access to numerous services from independent providers [5]

```markdown [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2024, SunCar's total assets increased to $252.1 million, with liabilities rising to $176.9 million Condensed Consolidated Balance Sheet Highlights (in U.S. Dollar thousands) | Balance Sheet Item | December 31, 2023 | September 30, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $175,197 | $196,472 | | **Total Assets** | **$223,235** | **$252,055** | | **Total Current Liabilities** | $124,392 | $152,494 | | **Total Liabilities** | **$155,245** | **$176,850** | | **Total Equity** | **$67,990** | **$75,205** | | Cash | $30,854 | $20,239 | | Accounts receivable, net | $56,043 | $77,131 | | Accounts payable | $26,641 | $54,995 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the nine months ended September 30, 2024, revenues grew to $312.7 million, but operating loss widened to $58.4 million Statement of Operations Summary (in U.S. Dollar thousands, except per share data) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | | **Total Revenues** | **$250,463** | **$312,709** | | Auto service | $147,527 | $159,555 | | Auto eInsurance service | $78,842 | $119,108 | | Technology service | $24,094 | $34,046 | | **Total operating costs and expenses** | **($254,015)** | **($371,075)** | | General and administrative expenses | ($13,084) | ($44,079) | | Research and development expenses | ($5,464) | ($33,625) | | **Operating loss** | **($3,552)** | **($58,366)** | | **Net loss attributable to shareholders** | **($9,393)** | **($64,747)** | | **Basic and diluted loss per share** | **($0.11)** | **($0.68)** | [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) For the nine months ended September 30, 2024, total equity increased to $75.2 million, driven by share-based compensation - Share-based compensation of **$61.8 million** for the company and **$1.7 million** for non-controlling interests was a major contributor to the increase in additional paid-in capital and total equity during the first nine months of 2024[11](index=11&type=chunk) - The company's accumulated deficit increased from **$126.7 million** at the end of 2023 to **$191.5 million** as of September 30, 2024, reflecting the significant net loss incurred during the period[11](index=11&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2024, operating activities generated $1.2 million in cash, a significant improvement Cash Flow Summary (in U.S. Dollar thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | | Net cash (used in)/provided by operating activities | ($31,093) | $1,182 | | Net cash used in investing activities | ($2,181) | ($9,792) | | Net cash provided by/(used in) financing activities | $34,069 | ($2,325) | | **Net change in cash and restricted cash** | **$54** | **($10,606)** | | **Cash and restricted cash, end of the period** | **$23,971** | **$22,989** | - A major non-cash adjustment in operating activities for the nine months ended September 30, 2024, was a **$62.0 million** share-based compensation expense, which was the primary reason for positive operating cash flow despite a large net loss[16](index=16&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Organization and Principal Activities](index=9&type=section&id=Note%201.%20Organization%20and%20Principal%20Activities) SunCar Technology Group Inc. provides auto, eInsurance, and technology services in the PRC - The Group's main business lines are auto service, auto eInsurance service, and technology service, all conducted within the People's Republic of China (PRC)[21](index=21&type=chunk) - The company completed a business combination on May 17, 2023, which was accounted for as a reverse recapitalization, with SunCar as the accounting acquirer[22](index=22&type=chunk)[23](index=23&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=10&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) Financial statements are prepared under U.S. GAAP, with key policies for revenue recognition and credit losses - Auto service revenue is recognized at a point in time when the service is provided or the service coupon expires[40](index=40&type=chunk) - Auto eInsurance service revenue (commissions) is recognized when the insurance policy becomes effective and the premium is collected by the insurance company[42](index=42&type=chunk) - Technology services revenue is recognized over time during the service period based on a fixed monthly price[43](index=43&type=chunk) [Note 3. Segment Information](index=15&type=section&id=Note%203.%20Segment%20Information) The company operates Auto Service and Auto eInsurance segments, generating $159.6 million and $119.1 million in revenue respectively Segment Performance for Nine Months Ended Sep 30, 2024 (in U.S. Dollar thousands) | Segment | Revenues from external customers | Segment income (loss) before tax | | :--- | :--- | :--- | | Auto service | $159,555 | $8,660 | | Auto eInsurance service | $119,108 | ($3,474) | | Others | $34,046 | ($65,828) | | **Consolidated** | **$312,709** | **($60,642)** | Total Assets by Segment (in U.S. Dollar thousands) | Segment | December 31, 2023 | September 30, 2024 | | :--- | :--- | :--- | | Auto service | $136,387 | $165,521 | | Auto eInsurance service | $66,274 | $61,376 | | Others | $20,574 | $25,158 | | **Total segment assets** | **$223,235** | **$252,055** | [Note 10. Warrants](index=19&type=section&id=Note%2010.%20Warrants) As of September 30, 2024, the company had 12.4 million warrants outstanding, with varying classifications - The company has several types of warrants outstanding: GEM Warrants, Public Warrants, Private Warrants, Common Warrants, and PA Warrants[73](index=73&type=chunk)[77](index=77&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk) - Private Warrants are treated as liabilities and remeasured to fair value each period, while Public and other warrants are classified as equity[83](index=83&type=chunk) Warrants Outstanding as of September 30, 2024 | Metric | Value | | :--- | :--- | | Warrants outstanding | 12,431,674 | | Weighted Average Exercise Price | $10.72 | | Warrants exercisable | 12,431,674 | [Note 11. Share-based Compensation](index=21&type=section&id=Note%2011.%20Share-based%20Compensation) The company recognized significant share-based compensation expenses in 2024, primarily from the 2024 Equity Incentive Plan - On March 28, 2024, the company approved the 2024 Equity Incentive Plan, authorizing **8,800,000** Class A ordinary shares[96](index=96&type=chunk) - All **8.8 million** shares under the 2024 plan were issued and fully vested upon grant, leading to a share-based compensation expense of **$62,040 thousand** for the nine months ended September 30, 2024[97](index=97&type=chunk) - The company also recognized **$1,121 thousand** in compensation expense in the first nine months of 2024 related to a subsidiary's (Shengda Automobile) 2020 Share Incentive Plan[101](index=101&type=chunk) [Note 12. Taxation](index=23&type=section&id=Note%2012.%20Taxation) PRC subsidiaries are subject to EIT rates of 25% or 15%, and the company has $66.9 million in net operating loss carryforwards - The statutory enterprise income tax (EIT) rate in the PRC is **25%**, but certain subsidiaries qualify as High and New Technology Enterprises (HNTEs) and are entitled to a reduced rate of **15%**[106](index=106&type=chunk) Deferred Tax Assets and Valuation Allowance (in U.S. Dollar thousands) | Item | December 31, 2023 | September 30, 2024 | | :--- | :--- | :--- | | Total deferred tax assets | $23,818 | $25,686 | | Valuation allowance | ($11,820) | ($12,796) | | **Deferred tax assets, net** | **$11,998** | **$12,890** | - As of September 30, 2024, the Group had net operating loss carryforwards of approximately **$66.9 million**, which will begin to expire in 2025[109](index=109&type=chunk)[110](index=110&type=chunk) [Note 14. Related Party Transactions](index=25&type=section&id=Note%2014.%20Related%20Party%20Transactions) The company has $30.2 million due to Shengda Group, a related party, with partial non-cash repayment - A significant payable exists to Shengda Group, an entity controlled by CEO Mr. Ye Zaichang, related to the 2021 transfer of SunCar Online[112](index=112&type=chunk)[113](index=113&type=chunk) - During the nine months ended September 30, 2024, the Group repaid **$6.2 million** of the debt to Shengda Group by transferring shares of SunCar Online, resulting in a non-cash gain of **$4.5 million** recorded in additional-paid-in capital[114](index=114&type=chunk)[116](index=116&type=chunk) Amount Due to a Related Party (in U.S. Dollar thousands) | Item | December 31, 2023 | September 30, 2024 | | :--- | :--- | :--- | | Current | $4,751 | $6,569 | | Non-current | $29,688 | $23,675 | | **Total** | **$34,439** | **$30,244** | [Note 15. Concentration Risk](index=26&type=section&id=Note%2015.%20Concentration%20Risk) The company faces significant customer concentration, with top customers accounting for 50% of revenue and 40% of receivables - For the nine months ended September 30, 2024, the top three customers accounted for a combined **50%** of the Group's total revenue[120](index=120&type=chunk) - As of September 30, 2024, the top three customers accounted for a combined **40%** of the Group's total accounts receivable[120](index=120&type=chunk) [Operating and Financial Review and Prospects](index=28&type=section&id=Operating%20and%20Financial%20Review%20and%20Prospects) [A. Operating Results](index=28&type=section&id=A.%20Operating%20Results) Revenue grew from auto service and eInsurance, but operating loss widened due to significant share-based compensation [Business Overview](index=28&type=section&id=Business%20Overview) - SunCar is a cloud-based provider of digitalized enterprise auto services and auto eInsurance in China[128](index=128&type=chunk) - The company's business is divided into three segments: - **Auto Service:** Offers customized service solutions (e.g., car wash, maintenance) to enterprise clients like banks and insurance companies for their customer loyalty programs - **Auto eInsurance:** Facilitates the sale of auto insurance products from major insurers through a network of over 64,000 external sales partners - **Technology Service:** Provides software and consulting (e.g., CRM, order management) to enterprise clients, with plans to develop a SaaS model[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) [Results of Operations Comparison](index=33&type=section&id=Results%20of%20Operations%20Comparison) Revenue by Segment (in U.S. Dollar thousands) | Segment | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Change % | | :--- | :--- | :--- | :--- | | Auto service | $147,527 | $159,555 | 8% | | Auto eInsurance service | $78,842 | $119,108 | 51% | | Technology service | $24,094 | $34,046 | 41% | | **Total revenues** | **$250,463** | **$312,709** | **25%** | - The **51%** increase in Auto eInsurance revenue was driven by a rising number of policies sold, particularly for Electric Vehicles (EVs), where the company ranks first in China for premium facilitation[167](index=167&type=chunk) - General and administrative expenses increased **237%** YoY, primarily due to a **$31.0 million** share-based compensation expense from the 2024 Equity Incentive Plan[164](index=164&type=chunk)[173](index=173&type=chunk) - Research and development expenses surged **515%** YoY, also primarily due to the **$31.0 million** share-based compensation expense[164](index=164&type=chunk)[174](index=174&type=chunk) [Non-GAAP Financial Measures](index=35&type=section&id=Non-GAAP%20Financial%20Measures) Reconciliation of Net Loss to Adjusted EBITDA (in U.S. Dollar thousands) | Line Item | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | | **Net loss** | **($4,673)** | **($61,573)** | | Depreciation and amortization | $3,828 | $3,320 | | Financial expenses, net | $3,650 | $3,463 | | Share-based compensation | $1,147 | $63,161 | | Other adjustments | ($1,848) | ($10) | | **Adjusted EBITDA** | **$3,144** | **$8,194** | | **Adjusted EBITDA Margin** | **1.3%** | **2.6%** | - Despite a significant increase in GAAP net loss, **Adjusted EBITDA** grew **161%** YoY to **$8.2 million** for the nine months ended September 30, 2024[175](index=175&type=chunk)[180](index=180&type=chunk) [B. Liquidity and Capital Resources](index=37&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) As of September 30, 2024, the company held $20.2 million in cash, with operating activities generating $1.2 million Cash Flow Summary (in U.S. Dollar thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | | Net cash (used in)/provided by operating activities | ($31,093) | $1,182 | | Net cash used in investing activities | ($2,181) | ($9,792) | | Net cash provided by/(used in) financing activities | $34,069 | ($2,325) | | **Net change in cash and restricted cash** | **$54** | **($10,606)** | - Capital expenditures for the nine months ended September 30, 2024, were **$9.9 million**, primarily for software, equipment, and cloud systems[199](index=199&type=chunk) Contractual Obligations as of September 30, 2024 (in U.S. Dollar thousands) | Obligation | Within one year | 1-3 years | Total | | :--- | :--- | :--- | :--- | | Lease commitment | $85 | - | $85 | | Capital commitment | $8,480 | - | $8,480 | | Short-term borrowings | $83,362 | - | $83,362 | [C. Research and Development, Patents and Licenses, etc.](index=39&type=section&id=C.%20Research%20and%20Development%2C%20Patents%20and%20Licenses%2C%20etc.) R&D expenses surged to $33.6 million for the nine months ended September 30, 2024, driven by share-based compensation - R&D expenses were **$5.5 million** and **$33.6 million** for the nine months ended September 30, 2023 and 2024, respectively[209](index=209&type=chunk) ```

Company Overview - SunCar Technology Group Inc. is a leader in cloud-based B2B auto services and auto e-insurance in China, the largest passenger vehicle market globally [6] - Founded in 2007, SunCar connects drivers with a variety of auto services and insurance options through a nationwide network of sales partners [6] - The company has established itself as a leader in the B2B auto services market and the auto e-insurance market for electric vehicles in China [6] Offering Details - SunCar announced a follow-on public offering of up to $50 million of Class A Ordinary Shares, with an additional option for underwriters to purchase up to $7.5 million more [1][2] - The net proceeds from this offering will be utilized for working capital and general corporate purposes [1] - The offering is subject to market conditions, and there is no assurance regarding its completion or the actual size and terms [2] Regulatory Information - The securities are being offered under an effective shelf registration statement filed with the SEC on June 3, 2024, and declared effective on June 14, 2024 [3] - A preliminary prospectus supplement and accompanying prospectus will be filed with the SEC to describe the terms of the proposed offering [3]

NEW YORK, Jan. 21, 2025 /PRNewswire/ -- SunCar Technology Group Inc. ("SunCar" or the "Company") (Nasdaq: SDA), a leading innovator in cloud-based B2B auto services and auto e-insurance in China, today announced the appointment of Mr. Breaux Walker as the Company's Chief Strategy Officer (CSO), effective January 13, 2025. Mr. Walker brings over 25 years of extensive experience in business development, corporate finance, and cross-border transactions, particularly within the technology and fintech sectors. H ...