NEW YORK , Aug. 1, 2024 /PRNewswire/ -- SunCar Technology Group Inc. ("SunCar"; NASDAQ: SDA), an innovative leader in cloud-based B2B auto services and auto e-insurance in China, is pleased to announce the formation of a new business partnership with the Inner Mongolia branch of China Continent Property & Casualty Insurance Co., Ltd ("China Continent Insurance"). China Continent Insurance is the only subsidiary of China Reinsurance (Group) Corporation (SEHK: 1508) that specializes in non-life primary insura ...

NEW YORK, July 23, 2024 /PRNewswire/ -- SunCar Technology Group Inc. ("SunCar" or "the Company, NASDAQ: SDA), an innovative leader in cloud-based B2B auto services and auto e-insurance in China, is pleased to announce a strategic partnership (the "Partnership") with Lotus Technology ("Lotus,"NASDAQ: LOT) to enhance automotive industry services. This collaboration will leverage SunCar's auto e-insurance technology platform and its extensive automotive service network to support and optimize Lotus's market ex ...

Core Insights - SunCar Technology Group Inc. has been selected as the provider of concierge car services for China Merchants Bank Private Banking, marking a significant partnership [1][2] - This two-year service framework agreement aims to enhance the customer experience for CMB's elite private banking clients through a technology-driven integration model [1][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 globally [3] - The company operates a cloud-based platform that connects drivers with a variety of auto services and insurance options through a nationwide network of sales partners [3] - SunCar has established itself as a leader in the B2B auto services market and the auto e-insurance market for electric vehicles in China [3] Industry Context - China Merchants Bank is recognized as the largest and most comprehensive private bank in China, known for its innovative wealth products and extensive non-financial value-added services [2] - CMB has received numerous awards for its private banking services and was the first Chinese bank to open a branch in the United States in 2008 [2]

SunCar to Leverage its Extensive Car Wash Service Network in the RegionNEW YORK, July 9, 2024 /PRNewswire/ -- SunCar Technology Group Inc. ("SunCar" or "the Company, NASDAQ: SDA), an innovative leader in cloud-based B2B auto services and auto e-insurance in China, is pleased to announce the successful bid for the China Construction Bank (CCB) Yunnan Branch Long (Long means "dragon") Card Car Wash Service project. This victory marks the latest collaboration between SunCar and CCB, driving SunCar's national e ...

Robert Way Introduction and Thesis If you believe that EVs are a flawed solution to a serious problem on Earth, then read on. I have an investment idea in a really solid company that went public in 2023 through a SPAC deal. Its technology helps cure some pain points for EVs. It's called SunCar Technology Group, (NASDAQ:SDA). Their technology links car owners to aftermarket service and insurance providers via a cloud service and mobile app. It profits by solving the problem of China’s underdeveloped afte ...

NEW YORK, June 17, 2024 /PRNewswire/ -- SunCar Technology Group Inc. ("SunCar"NASDAQ: SDA), an innovative leader in cloud-based B2B auto services and auto e-insurance in China, is pleased to announce a new strategic collaboration with Ping An Property & Casualty Insurance Co., Ltd. (Shenzhen Branch) ("Ping An P&C Shenzhen"), a subsidiary of Ping An Insurance Group Co. of China Ltd ("Ping An", 2318.HK), one of the five largest insurance companies in the world and a long term enterprise client of SunCar's. Th ...

NEW YORK, May 13, 2024 /PRNewswire/ -- SunCar Technology Group Inc. (the "Company" or "SunCar") (NASDAQ: SDA), an innovative leader in cloud-based B2B auto services and auto e-insurance in China, announced an expanded partnership with Beijing Houji Insurance Brokerage Co., Ltd. ("Beijing Houji"), a part of the renowned Xiaomi Corporation ("Xiaomi Group") (1810.HK). This strategic alliance is set to transform the insurance industry, utilizing SunCar's advanced intelligent insurance service platform to provid ...

Financial Data and Key Metrics Changes - For the fiscal year ended December 31, 2023, total revenue reached $364 million, representing a 29% increase from $282 million in 2022 [12] - The Auto Service segment generated $215 million in revenue, an 8% increase from $199 million in 2022 [12] - The Auto e-Insurance segment reported revenue of $149 million, a significant 79% increase from $83 million in 2022 [12] - Net losses were $18 million for the year ended December 31, 2023, compared to $12 million in 2022 [13] - Adjusted EBITDA improved to a positive $1.6 million for the year ended December 31, 2023, up from a negative figure in the previous year [14] Business Line Data and Key Metrics Changes - The Auto Service segment focuses on technology platforms for services like car wash and maintenance, contributing $215 million in revenue [12] - The Auto e-Insurance segment, which includes e-Insurance Intermediation and Technology Service, generated $149 million, with the Intermediation business alone accounting for $118 million, a 75% increase year-over-year [12][13] - Technology Service revenue reached $31 million, marking a 98% increase from 2022 [13] Market Data and Key Metrics Changes - The company has expanded its network of Auto Service providers to over 47,000 across more than 350 cities in China [9] - The e-Insurance sales partner network increased to over 64,000, enhancing the company's market presence [9] Company Strategy and Development Direction - The company aims to establish itself as the largest technology platform for Auto Services and e-Insurance in China, leveraging its cloud-based technology [6][7] - Strategic partnerships with major electric vehicle manufacturers like Tesla, NIO, and BYD are being pursued to enhance market presence and growth opportunities [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth in 2024, driven by the synergies between Auto Services and e-Insurance [7][14] - The e-Insurance segment is expected to become a larger portion of the business due to the rapid growth in vehicle sales and electric vehicle adoption in China [21] Other Important Information - The company emphasizes the interconnected nature of its Auto Service and e-Insurance businesses, which creates synergies and enhances customer experience [10] Q&A Session Summary Question: Why and how do banks, insurance companies, and enterprise clients use SunCar Auto Service? - The cloud-based platform allows banks and insurance companies to offer various services to their clients, enhancing customer loyalty [15][16] Question: What differentiates you and why do people choose you over your competitors? - The company provides nationwide coverage and technology integrations that allow for quick delivery of e-Insurance policies, unlike competitors who operate regionally [17] Question: Which business is more profitable, services or insurance? - Currently, the Auto Service segment is more profitable, but the e-Insurance segment is rapidly growing and will focus on profitability as it expands [18] Question: Do you expect the insurance business to become the dominant portion of the company? - The e-Insurance segment is in a stage of rapid growth and is expected to become a larger portion of the business in the future [20] Question: What is your go-to-market strategy for insurance? - The strategy leverages a large network of sales partners to deliver cloud-based insurance solutions quickly to end customers [22] Question: What is driving the growth of the business? - Growth is driven by the adoption of e-Insurance technology and increased vehicle sales, particularly in the electric vehicle sector [23]

Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) - This section outlines forward-looking statements and associated risks, emphasizing that actual results may differ materially from expectations due to various known and unknown factors[6](index=6&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk) Defined Terms](index=6&type=section&id=Defined%20Terms) - Provides definitions for key terms used throughout the report, such as "Company," "Business Combination," "Class A Ordinary Shares," "PRC Operating Entities," and various financial and regulatory acronyms[11](index=11&type=chunk)[12](index=12&type=chunk) PART I](index=7&type=section&id=PART%20I) [Item 1. Identity of Directors, Senior Management and Advisers](index=7&type=section&id=Item%201.%20Identity%20of%20Directors%2C%20Senior%20Management%20and%20Advisers) This section identifies the company's current executive officers and directors, their positions, and biographical information, along with details on board diversity and the company's auditors Current Executive Officers and Directors (as of report date) | Name | Age | Position | Date of Election or Appointment | | :------------ | :-- | :--------------------------------------------- | :------------------------------ | | Zaichang Ye | 54 | Chairman, Director and Chief Executive Officer | May 17, 2023 | | Bohong Du | 53 | Director and Chief Financial Officer | May 17, 2023 | | Zhunfu Lei | 46 | Chief Technology Officer and Chief Operating Officer | May 17, 2023 | | Tianshi Yang | 34 | Chief Strategy Officer | January 25, 2024 | | Saiye Gu | 51 | Vice President | May 17, 2023 | | Yizhi Qian | 45 | Vice President | May 17, 2023 | | Haidong Zhang | 45 | Independent Director | May 17, 2023 | | Lin Bao | 50 | Independent Director | May 17, 2023 | | Yongsheng Liu | 54 | Independent Director | May 17, 2023 | - The company's Board of Directors consists of **5 members**, with **1 female** and **4 male** directors, and is in compliance with Nasdaq diversity requirements[28](index=28&type=chunk) - Enrome LLP was appointed as the independent registered public accounting firm on June 8, 2023, for fiscal years ended December 31, 2021, 2022, and 2023, replacing Marcum Asia CPAs LLP[31](index=31&type=chunk) [Item 2. Offer Statistics and Expected Timetable](index=11&type=section&id=Item%202.%20Offer%20Statistics%20and%20Expected%20Timetable) This item is marked as "Not applicable," indicating no specific offer statistics or expected timetable information is provided - This item is marked as "Not applicable," indicating no specific offer statistics or expected timetable information is provided [Item 3. Key Information](index=11&type=section&id=Item%203.%20Key%20Information) This section provides selected financial data, capitalization and indebtedness, and a comprehensive overview of risk factors affecting the company's business, operations in China, and ownership of its securities [A. Selected Financial Data](index=11&type=section&id=A.%20Selected%20Financial%20Data) Summary Consolidated Statements of Operations Data (in USD thousands) | Metric | 2021 | 2022 | 2023 | | :---------------------------------------------- | :---------- | :---------- | :---------- | | Revenues | | | | | Auto service | $187,880 | $199,294 | $214,979 | | Auto eInsurance service | $56,766 | $67,640 | $118,109 | | Technology service | $4,589 | $15,479 | $30,658 | | **Total revenues** | **$249,235**| **$282,413**| **$363,746**| | Operating profit/(loss) | $10,359 | $(12,577) | $(15,462) | | Income/(Loss) from continuing operations, net of tax | $9,592 | $(10,905) | $(17,579) | | Net loss | $(18,090) | $(11,899) | $(17,579) | Summary Consolidated Balance Sheet Data (as of December 31, in USD thousands) | Metric | 2022 | 2023 | | :----------------------------------- | :---------- | :---------- | | Total assets | $191,968 | $223,235 | | Total liabilities | $155,192 | $155,245 | | Total shareholders' (deficit) equity | $(5,284) | $16,078 | | Non-controlling interests | $42,060 | $51,912 | | Total equity | $36,776 | $67,990 | Summary Consolidated Cash Flow Data (in USD thousands) | Metric | 2021 | 2022 | 2023 | | :------------------------------------------------------------------- | :---------- | :---------- | :---------- | | Net cash used in operating activities of continuing operations | $(19,105) | $(16,092) | $(27,651) | | Net cash (used in) provided by investing activities of continuing operations | $(20,091) | $(5,402) | $(2,394) | | Net cash (used in) provided by financing activities of continuing operations | $(1,185) | $10,636 | $40,434 | [B. Capitalization and Indebtedness](index=13&type=section&id=B.%20Capitalization%20and%20Indebtedness) Capitalization as of December 31, 2023 (in USD thousands) | Metric | Amount | | :-------------------------- | :------- | | Cash and cash equivalents | 30,854 | | Short-term borrowings | 83,029 | | Amounts due to related parties | 34,439 | | Total shareholders' equity | 16,078 | | Non-controlling interests | 51,912 | | **Total capitalization** | **185,458**| [C. Reasons for the Offer and Use of Proceeds](index=13&type=section&id=C.%20Reasons%20for%20the%20Offer%20and%20Use%20of%20Proceeds) - This section is marked as "Not applicable," indicating no information on reasons for the offer or use of proceeds[41](index=41&type=chunk) [D. Risk Factors](index=13&type=section&id=D.%20Risk%20Factors) [General Risks Related to SunCar's Business](index=14&type=section&id=General%20Risks%20Related%20to%20SunCar%27s%20Business) This subsection details general business risks, including dependence on customer and service provider relationships, customer concentration, liquidity issues, operational disruptions, growth management challenges, intellectual property protection, and the impact of economic conditions and labor costs - The company's auto services and eInsurance businesses are **highly dependent** on maintaining good relationships with customers and service providers[42](index=42&type=chunk)[64](index=64&type=chunk)[68](index=68&type=chunk) - SunCar faces **customer concentration risk**, with three customers accounting for **48% of revenue** in 2023 and four customers for **50% of accounts receivables**[77](index=77&type=chunk) - The company experienced **negative net operating cash flows** in 2021, 2022, and 2023, exposing it to liquidity risks due to a mismatch between trade receivables and payables turnover days[43](index=43&type=chunk)[88](index=88&type=chunk) - New business growth strategies focusing on NEVs and SaaS monetization may negatively impact short-term financial results and profit margins due to potential increased expenses[91](index=91&type=chunk) - The company's business is subject to seasonality, with auto eInsurance revenue generally lower in Q1 and auto service revenue highest in Q2 and Q4[92](index=92&type=chunk) - Cybersecurity breaches, IT system disruptions, and failure to protect personal data could materially and adversely affect business, reputation, and financial condition[82](index=82&type=chunk)[84](index=84&type=chunk)[99](index=99&type=chunk) - Intense competition in China's fragmented auto eInsurance and integrated auto service markets, with some competitors having greater resources or brand recognition[86](index=86&type=chunk) - Failure to attract or retain an experienced management team and qualified personnel, especially key individuals like the CEO and CTO, could materially impact business operations and development[101](index=101&type=chunk) - The company is an "emerging growth company" and benefits from reduced disclosure requirements, which may make its shares less attractive to some investors[106](index=106&type=chunk)[108](index=108&type=chunk) - Defects in leased properties or non-compliance with PRC laws on leased property could lead to fines or relocation expenses[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) - Limited insurance coverage, particularly for business interruption and key-man life insurance, could expose the company to significant costs and business disruption from natural disasters, health epidemics, or litigation[123](index=123&type=chunk)[125](index=125&type=chunk) [Risks Related to SunCar's Insurance Services](index=28&type=section&id=Risks%20Related%20to%20SunCar%27s%20Insurance%20Services) This subsection highlights risks specific to the company's insurance intermediary business, including regulatory limitations, compliance challenges, misconduct by external referral sources, and the cyclical nature of the insurance market - As an insurance intermediary, SunCar only has licenses for selling insurance and cannot create or modify insurance products, which could limit future business expansion[126](index=126&type=chunk)[127](index=127&type=chunk) - The auto eInsurance business is extensively regulated by the CBIRC, and changes in regulations (e.g., premium/commission rates) or non-compliance could result in financial losses or harm to the business[128](index=128&type=chunk)[129](index=129&type=chunk) - Misconduct by external referral sources, such as misrepresentation or fraud, is difficult to detect and deter and could harm the company's reputation or lead to regulatory sanctions[131](index=131&type=chunk)[132](index=132&type=chunk) - Decreases in insurance premiums or commission rates set by insurance companies, or increases in referral fees paid to external sources, could adversely affect profitability[137](index=137&type=chunk)[140](index=140&type=chunk) - The insurance business is cyclical, and while SunCar plans to develop new NEV insurance products, there's no guarantee of market acceptance or increased revenue, and product development can be costly and delayed[142](index=142&type=chunk)[144](index=144&type=chunk) [Risks Related to Doing Business in China](index=31&type=section&id=Risks%20Related%20to%20Doing%20Business%20in%20China) This subsection addresses the unique risks of operating in China, including economic and political uncertainties, foreign exchange controls, evolving legal and regulatory systems, data security and privacy laws, and the potential impact of the HFCAA on U.S. listings - The company's financial condition and operations are significantly affected by China's economic, political, and social conditions, as well as regulatory policies, which could reduce demand for services[145](index=145&type=chunk)[146](index=146&type=chunk)[149](index=149&type=chunk) - PRC regulations on offshore investments by PRC residents (SAFE Circular 37) may subject beneficial owners or PRC Operating Entities to penalties, limit capital injection, or restrict profit distribution[152](index=152&type=chunk)[155](index=155&type=chunk) - Substantial uncertainties exist regarding the interpretation and implementation of the PRC Foreign Investment Law, which could impact the viability of the company's corporate structure and operations[157](index=157&type=chunk)[162](index=162&type=chunk) - The Chinese government exerts substantial influence over business activities, and future interventions or new regulations (e.g., data security, anti-monopoly) could materially change operations or affect the value of securities[166](index=166&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) - The evolving PRC legal system, including uncertainties in law enforcement and sudden regulatory changes, could limit legal protections and adversely affect the company[171](index=171&type=chunk)[172](index=172&type=chunk)[175](index=175&type=chunk) - New and evolving PRC laws and regulations regarding privacy, data security, and cybersecurity (e.g., Cybersecurity Law, Data Security Law, Personal Information Protection Law) could increase compliance costs, lead to penalties, or harm reputation[177](index=177&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk) - Changes in currency conversion rates between RMB and USD can affect the value of investments, cash flows, revenue, and financial condition, with limited hedging options available[209](index=209&type=chunk)[210](index=210&type=chunk)[214](index=214&type=chunk) - The Holding Foreign Companies Accountable Act (HFCAA) and related regulations pose risks of delisting from U.S. exchanges if the PCAOB cannot inspect the company's auditor for two consecutive years, depriving investors of inspection benefits[237](index=237&type=chunk)[239](index=239&type=chunk)[241](index=241&type=chunk) - The Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (effective March 31, 2023) impose filing obligations for future offerings and can lead to sanctions for non-compliance[201](index=201&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk) - The Confidentiality and Archives Provisions (effective March 31, 2023) require strict confidentiality and archives administration for overseas listings, with uncertainties regarding specific requirements and potential penalties for non-compliance[206](index=206&type=chunk) [Risks Related to Ownership of SunCar Securities](index=55&type=section&id=Risks%20Related%20to%20Ownership%20of%20SunCar%20Securities) This subsection covers risks associated with owning SunCar's securities, including dividend policies, liquidity and market price volatility, internal control deficiencies, and potential conflicts of interest with major shareholders - The company has no current plans to pay cash dividends, meaning investors may only receive a return on investment by selling shares at a higher price[261](index=261&type=chunk)[262](index=262&type=chunk) - As a holding company, SunCar relies on dividends from PRC subsidiaries, which are subject to PRC laws, statutory reserve requirements, and foreign exchange controls, potentially limiting dividend payments[257](index=257&type=chunk)[258](index=258&type=chunk)[260](index=260&type=chunk) - Failure to implement and maintain effective internal controls over financial reporting could lead to inaccurate reporting, fraud, and negatively impact investor confidence and stock price[266](index=266&type=chunk)[267](index=267&type=chunk)[268](index=268&type=chunk) - Future sales or perceived sales of substantial amounts of securities could materially adversely affect the market price of Ordinary Shares and the ability to raise future capital, potentially diluting existing shareholdings[270](index=270&type=chunk)[271](index=271&type=chunk) - Potential conflicts of interest with the largest shareholder, who holds substantial voting rights, may not be resolved favorably for the company[272](index=272&type=chunk) [Item 4. Information on the Company](index=59&type=section&id=Item%204.%20Information%20on%20the%20Company) This section provides an overview of SunCar's history, business model, industry context, and recent developments, detailing its auto services, auto eInsurance, and technology business segments, as well as its growth strategies and technological capabilities [A. History and Development of the Company](index=59&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) - SunCar Technology Group Inc. was incorporated on August 6, 2021, for the Business Combination, which was consummated on May 17, 2023. It operates through its wholly-owned subsidiary, ASGL[273](index=273&type=chunk) - The company's principal executive office is in Shanghai, China, and it is a "foreign private issuer" subject to SEC informational filing requirements but exempt from certain U.S. domestic issuer rules[274](index=274&type=chunk)[275](index=275&type=chunk) [B. Business Overview](index=59&type=section&id=B.%20Business%20Overview) [Industry Overview of SunCar](index=59&type=section&id=INDUSTRY%20OVERVIEW%20OF%20SUNCAR) This section provides an overview of China's integrated auto service and auto eInsurance markets, including market size, growth trends, and the impact of New Energy Vehicles (NEVs) - China's B2B integrated auto service market grew from **RMB3.9 billion** in 2017 to **RMB9.1 billion** in 2021 (**CAGR 23.6%**) and is projected to reach **RMB16.4 billion** by 2026 (**CAGR 12.5%**)[282](index=282&type=chunk) - Sales volume of New Energy Vehicles (NEVs) in China increased from **0.58 million** in 2017 to **3.3 million** in 2021 (**CAGR 54.9%**) and is expected to grow to **10.6 million** by 2026 (**CAGR 26.0%**)[283](index=283&type=chunk) - The NEV auto service market grew from **RMB2.7 billion** to **RMB13.3 billion** between 2017 and 2021 and is projected to reach **RMB60.6 billion** by 2026 (**CAGR 35.4%**)[284](index=284&type=chunk) - China's auto eInsurance market declined to **RMB777.3 billion** in 2021 due to premium rate reforms but is expected to slightly increase to **RMB783.5 billion** by 2026 (**CAGR 0.2%**)[293](index=293&type=chunk) - The online auto eInsurance market in China decreased to **RMB22.4 billion** in 2021 due to stricter regulations but is expected to grow to **RMB24.2 billion** by 2026 (**CAGR 1.6%**)[295](index=295&type=chunk) - Future trends in auto eInsurance include increasing demand for diversified products, accelerating industry consolidation, and technological advancement to enhance operational efficiency[296](index=296&type=chunk)[298](index=298&type=chunk)[299](index=299&type=chunk) [Business of SunCar](index=64&type=section&id=BUSINESS%20OF%20SUNCAR) This section details SunCar's core businesses: digitalized enterprise auto services, auto eInsurance, and technology services, highlighting its cloud-based platform, extensive networks, and strategic focus on New Energy Vehicles (NEVs) - SunCar is a leading cloud-based provider of digitalized enterprise auto services and auto eInsurance in China, generating **$363.7 million** in revenue in 2023[300](index=300&type=chunk) - The company operates an extensive service network of over **47,000 third-party auto service providers** across **350+ cities** and **33 provinces**, serving over **1,400 enterprise clients**[303](index=303&type=chunk) - For auto eInsurance, SunCar facilitates sales for **85 insurance companies** (including **top 10**) through a network of over **64,000 external sales partners**, with **32 branch headquarters**[305](index=305&type=chunk) - SunCar has secured **150 registered copyrights** of computer software and is developing a SaaS model for its online management tools (CRM, order management, finance management, visual analysis systems)[306](index=306&type=chunk)[307](index=307&type=chunk) - The company's business model leverages cross-utilization and interconnections between auto service and auto eInsurance segments, creating positive feedback loops and symbiotic growth[308](index=308&type=chunk) - SunCar is actively embracing the NEV trend, working with **20 mainstream NEV and smart car panel players**, embedding auto service solutions, and providing insurance products to NEV owners[308](index=308&type=chunk)[369](index=369&type=chunk) - SunCar's value propositions include one-stop, plug-in, round-the-clock service enablement for enterprise clients; cost-effective customer acquisition and online management tools for auto service providers; extensive network and targeted sales channels for insurance companies; and convenient, customized experiences for end consumers[328](index=328&type=chunk)[330](index=330&type=chunk)[332](index=332&type=chunk) - The company's growth strategy includes benefiting from high industry growth (**online auto insurance market CAGR 1.6%**, **B2B integrated auto service market CAGR 12.5%** by 2026), expanding customer base and service partner network, continuous investment in technology (AI, big data, RPA), expanding the technology business into a SaaS model, and benefiting from the NEV trend[362](index=362&type=chunk)[363](index=363&type=chunk)[364](index=364&type=chunk) - SunCar's technology relies on a cloud-based digital platform, utilizing AI, hybrid cloud, big data, and scalable technologies for plug-in implementation, secured hybrid cloud and data (**ISO:27001:2013 certified**), innovation, automation, and managing complexity across its vast network[375](index=375&type=chunk)[376](index=376&type=chunk)[377](index=377&type=chunk) - The company developed a hybrid cloud platform in 2022, combining private and public cloud capabilities to meet financial institution-level data security and extensive connectivity needs[381](index=381&type=chunk)[382](index=382&type=chunk)[383](index=383&type=chunk) - As of December 31, 2023, SunCar held **27 registered trademarks**, **150 registered copyrights** of computer software, and **6 registered domain names**[385](index=385&type=chunk) - SunCar expanded its auto services network to over **47,000 providers** and served over **1,400 enterprise clients** in 2023, completing over **107 million service orders** in the last five years[388](index=388&type=chunk) - The auto eInsurance business expanded to over **64,000 sales partners** by December 31, 2023, and its NEV segment grew to **20 OEM/smart car panel customers**[389](index=389&type=chunk) [C. Organizational Structure](index=79&type=section&id=C.%20Organizational%20Structure) - SunCar is a holding company operating through its PRC Operating Entities, without a VIE structure. It relies on dividends from these entities, which are subject to PRC accounting standards, statutory reserves, and withholding taxes[390](index=390&type=chunk)[391](index=391&type=chunk) - The organizational chart illustrates the company's corporate structure, showing SunCar Technology Group Inc. as the parent, with ASGL and its subsidiaries, including various PRC Operating Entities, below it[393](index=393&type=chunk) [D. Property, Plants and Equipment](index=81&type=section&id=D.%20Property%2C%20Plants%20and%20Equipment) - SunCar leases its principal executive office in Shanghai, China[396](index=396&type=chunk) [Item 4A. Unresolved Staff Comments](index=81&type=section&id=Item%204A.%20Unresolved%20Staff%20Comments) This item is marked as "None / Not applicable," indicating no unresolved staff comments - This item is marked as "None / Not applicable," indicating no unresolved staff comments [Item 5. Operating and Financial Review and Prospects](index=81&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) This section provides a detailed discussion of SunCar's financial condition and results of operations, including revenue breakdown, operating costs, critical accounting estimates, liquidity, and capital resources, for the years ended December 31, 2021, 2022, and 2023 [A. Operating Results](index=81&type=section&id=A.%20Operating%20Results) [Business Overview](index=81&type=section&id=Business%20Overview) - SunCar generates revenue from three main segments: auto service, auto eInsurance service, and technology service, leveraging a cloud-based digital platform for B2B services[399](index=399&type=chunk)[400](index=400&type=chunk) [Significant Factors Impacting Financial Results](index=82&type=section&id=Significant%20Factors%20Impacting%20Financial%20Results) - Key factors impacting financial results include relationships with enterprise clients and end-customers, cooperation with service providers and external referral sources, operating efficiency, regulatory environment (CBIRC for eInsurance), and macroeconomic impacts like COVID-19, global inflation, and supply chain disruptions[402](index=402&type=chunk)[403](index=403&type=chunk)[404](index=404&type=chunk) - China's inflation rates were relatively stable (**0.9% in 2021, 2.0% in 2022, 0.2% in 2023**), limiting the general impact of inflation, but fuel price increases could affect the automobile industry[410](index=410&type=chunk) - Supply chain disruptions due to COVID-19 had limited severe impact due to quick recovery of service providers and a large network, and the online nature of eInsurance[411](index=411&type=chunk) [Critical Accounting Estimates](index=84&type=section&id=Critical%20Accounting%20Estimates) - Critical accounting estimates include revenue recognition (auto service, auto eInsurance, technology service), allowance for doubtful accounts, valuation allowances of deferred tax assets, and useful lives of software and equipment[416](index=416&type=chunk)[417](index=417&type=chunk)[419](index=419&type=chunk) - The company adopted ASU 2016-13 (Financial Instruments-Credit Losses) on January 1, 2023, resulting in a cumulative-effect adjustment to shareholders' equity of **US$0.5 million**[422](index=422&type=chunk) - Bad debt expenses were nil in 2021, **US$26.0 million** in 2022, and credit losses were reversed by **US$4.1 million** in 2023 due to ASC 326 adoption[423](index=423&type=chunk) - Valuation allowance for deferred tax assets was **US$0.2 million** in 2021, **US$5.4 million** in 2022, and **US$4.5 million** in 2023[426](index=426&type=chunk) [Key Components of Results of Operations](index=86&type=section&id=Key%20Components%20of%20Results%20of%20Operations) Revenue Breakdown (in USD thousands, except for percentages) | Category | 2021 ($) | 2021 (%) | 2022 ($) | 2022 (%) | 2023 ($) | 2023 (%) | | :---------------------- | :------- | :------- | :------- | :------- | :------- | :------- | | Auto service | 187,880 | 75% | 199,294 | 71% | 214,979 | 60% | | Auto eInsurance service | 56,766 | 23% | 67,640 | 24% | 118,109 | 32% | | Technology service | 4,589 | 2% | 15,479 | 5% | 30,658 | 8% | | **Total** | **249,235**| **100%** | **282,413**| **100%** | **363,746**| **100%** | Operating Costs and Expenses Breakdown (in USD thousands, except for percentages) | Category | 2021 ($) | 2021 (%) | 2022 ($) | 2022 (%) | 2023 ($) | 2023 (%) | | :-------------------------------- | :------- | :------- | :------- | :------- | :------- | :------- | | Integrated service cost | 156,852 | 63% | 166,793 | 59% | 209,553 | 58% | | Promotional service expenses | 55,222 | 22% | 65,500 | 23% | 112,504 | 31% | | Selling expenses | 12,731 | 5% | 16,477 | 6% | 20,578 | 6% | | General and administrative expenses | 10,420 | 4% | 37,742 | 13% | 22,462 | 6% | | Research and development expenses | 3,651 | 1% | 8,478 | 3% | 14,111 | 4% | | **Total** | **238,876**| **95%** | **294,990**| **104%** | **379,208**| **105%** | [Results of Operations](index=88&type=section&id=Results%20of%20Operations) [Year ended December 31, 2023 compared with year ended December 31, 2022](index=88&type=section&id=Year%20ended%20December%2031%2C%202023%20compared%20with%20year%20ended%20December%2031%2C%202022) Consolidated Results of Operations (2022 vs 2023, in USD thousands) | Metric | 2022 | 2023 | Change Amount | Change % | | :---------------------------------------------- | :---------- | :---------- | :------------ | :------- | | **Total revenues** | **$282,413**| **$363,746**| **$81,333** | **29%** | | Auto service revenue | $199,294 | $214,979 | $15,685 | 8% | | Auto eInsurance service revenue | $67,640 | $118,109 | $50,469 | 75% | | Technology service revenue | $15,479 | $30,658 | $15,179 | 98% | | **Total operating costs and expenses** | **$(294,990)**| **$(379,208)**| **$(84,218)** | **29%** | | Integrated service cost | $(166,793)$ | $(209,553)$ | $(42,760)$ | 26% | | Promotional service expenses | $(65,500)$ | $(112,504)$ | $(47,004)$ | 72% | | Selling expenses | $(16,477)$ | $(20,578)$ | $(4,101)$ | 25% | | General and administrative expenses | $(37,742)$ | $(22,462)$ | $15,280$ | -40% | | Research and development expenses | $(8,478)$ | $(14,111)$ | $(5,633)$ | 66% | | Operating loss | $(12,577)$ | $(15,462)$ | $(2,885)$ | 23% | | Loss from continuing operations, net | $(10,905)$ | $(17,579)$ | $(6,674)$ | 61% | | Net loss | $(11,899)$ | $(17,579)$ | $(5,680)$ | 48% | - Auto eInsurance service revenue **increased by 75%** due to a **108% increase** in insurance policies sold, offsetting a **12% decrease** in average commission rates[442](index=442&type=chunk) - General and administrative expenses **decreased by 40%** primarily due to a **$30.1 million decrease** in bad debt expense, partially offset by increased professional service and share-based compensation expenses[444](index=444&type=chunk) - Research and development expenses **increased by 66%** due to more research expenditures on software for auto eInsurance and technology services[445](index=445&type=chunk) [Year ended December 31, 2022 compared with year ended December 31, 2021](index=90&type=section&id=Year%20ended%20December%2031%2C%202022%20compared%20with%20year%20ended%20December%2031%2C%202021) Consolidated Results of Operations (2021 vs 2022, in USD thousands) | Metric | 2021 | 2022 | Change Amount | Change % | | :---------------------------------------------- | :---------- | :---------- | :------------ | :------- | | **Total revenues** | **$249,235**| **$282,413**| **$33,178** | **13%** | | Auto service revenue | $187,880 | $199,294 | $11,414 | 6% | | Auto eInsurance service revenue | $56,766 | $67,640 | $10,874 | 19% | | Technology service revenue | $4,589 | $15,479 | $10,890 | 237% | | **Total operating costs and expenses** | **$(238,876)**| **$(294,990)**| **$(56,114)** | **23%** | | Integrated service cost | $(156,852)$ | $(166,793)$ | $(9,941)$ | 6% | | Promotional service expenses | $(55,222)$ | $(65,500)$ | $(10,278)$ | 19% | | Selling expenses | $(12,731)$ | $(16,477)$ | $(3,746)$ | 29% | | General and administrative expenses | $(10,420)$ | $(37,742)$ | $(27,322)$ | 262% | | Research and development expenses | $(3,651)$ | $(8,478)$ | $(4,827)$ | 132% | | Operating profit (loss) | $10,359 | $(12,577)$ | $(22,936)$ | -221% | | Income (Loss) from continuing operations, net | $9,592 | $(10,905)$ | $(20,497)$ | -214% | | Net loss | $(18,090)$ | $(11,899)$ | $6,191$ | -34% | - Technology service revenue **increased by 237%** due to continuous expansion in new business and improved IT infrastructure[452](index=452&type=chunk) - General and administrative expenses **increased by 262%** primarily due to a **$26.0 million** bad debt provision in 2022, influenced by COVID-19's impact on customer cash flow[454](index=454&type=chunk) - Net loss from discontinued operations **decreased by 96%** from **$27.68 million** in 2021 to **$0.99 million** in 2022, following the disposal of the financial leasing business on March 1, 2022[455](index=455&type=chunk) [Non-GAAP Financial Measures](index=92&type=section&id=Non-GAAP%20Financial%20Measures) - Adjusted EBITDA is presented as a non-GAAP measure to evaluate operational performance, excluding non-recurring items like depreciation, amortization, share-based compensation, and transaction fees related to the Business Combination[457](index=457&type=chunk)[458](index=458&type=chunk) Reconciliation of Operating Profit (Loss) to Adjusted EBITDA (in USD thousands) | Metric | 2021 | 2022 | 2023 | | :-------------------------- | :---------- | :---------- | :---------- | | Operating profit (loss) | $10,359 | $(12,577) | $(15,462) | | Depreciation and amortization | $4,055 | $5,078 | $4,114 | | Share-based compensation | $1,668 | $1,599 | $11,295 | | Transaction fees | $130 | $357 | $1,702 | | **Adjusted EBITDA** | **$16,212** | **$(5,543)**| **$1,649** | [Taxation](index=92&type=section&id=Taxation) - PRC subsidiaries are generally subject to a **25% enterprise income tax rate**, with preferential rates for small-scale and low-profit enterprises (**2.5% or 5%** on certain income tiers) and high-tech enterprises (**15%**)[462](index=462&type=chunk)[463](index=463&type=chunk)[464](index=464&type=chunk) - Dividends from wholly foreign-owned subsidiaries in China to Hong Kong holding companies are subject to a **10% withholding tax**, potentially reduced to **5%** under double taxation arrangements[465](index=465&type=chunk) [Liquidity and Capital Resources](index=94&type=section&id=Liquidity%20and%20Capital%20Resources) Summary Consolidated Cash Flow Data (in USD thousands) | Metric | 2021 | 2022 | 2023 | | :------------------------------------------------------------------- | :---------- | :---------- | :---------- | | Net cash used in operating activities of continuing operations | $(19,105) | $(16,092) | $(27,651) | | Net cash (used in) provided by investing activities of continuing operations | $(20,091) | $(5,402) | $(2,394) | | Net cash (used in) provided by financing activities of continuing operations | $(1,185) | $10,636 | $40,434 | - As of December 31, 2023, the company had **US$30.9 million** in cash and **US$2.7 million** in restricted cash, primarily denominated in Renminbi and held in China[467](index=467&type=chunk) - Net cash used in operating activities of continuing operations increased to **US$27.7 million** in 2023, primarily due to an increase in prepaid expenses and other current assets (**US$55.9 million**) for preferential service prices, partially offset by a decrease in accounts receivable (**US$30.8 million**)[470](index=470&type=chunk) - Net cash provided by financing activities of continuing operations significantly increased to **US$40.4 million** in 2023, driven by **US$104.5 million** from short-term bank borrowings, **US$21.7 million** from private placement, and **US$18.5 million** from ordinary share issuance, offset by repayments[475](index=475&type=chunk) - Capital expenditures were **US$10.3 million** in 2021, **US$5.6 million** in 2022, and **US$6.6 million** in 2023, primarily for software, equipment, and private cloud system installation[477](index=477&type=chunk) [Off-Balance Sheet Commitments and Arrangements](index=96&type=section&id=Off-Balance%20Sheet%20Commitments%20and%20Arrangements) - The company has no financial guarantees, derivative contracts, retained interests in transferred assets, or variable interests in unconsolidated entities[479](index=479&type=chunk) [Tabular Disclosure of Contractual Obligations](index=96&type=section&id=Tabular%20Disclosure%20of%20Contractual%20Obligations) Contractual Obligations as of December 31, 2023 (in USD thousands) | Category | Within one year | 1-3 years | Total | | :---------------------- | :-------------- | :-------- | :------- | | Operating lease payment | $788 | $512 | $1,300 | | Capital payment | $16,902 | $0 | $16,902 | | Short-term borrowings | $83,029 | $0 | $83,029 | - Total capital commitments contracted but not yet reflected in financial statements amounted to **US$16.9 million** as of December 31, 2023, primarily for a private cloud system[482](index=482&type=chunk) [Related Party Transaction](index=96&type=section&id=Related%20Party%20Transaction) - On March 1, 2022, SunCar disposed of Shengda Group, an affiliate of its Chairman Mr. Ye Zaichang, for a nominal consideration due to its net liability position[483](index=483&type=chunk) - SunCar owed Jiachen (an affiliate of Mr. Ye) **RMB281.8 million** (**US$40.9 million**) for the transfer of SUNCAR Online, with the repayment date extended to December 31, 2025, at a **1% annual interest rate**[483](index=483&type=chunk) [B. Liquidity and Capital Resources](index=96&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) - This section refers to "Item 5.A. Operating Results-Liquidity and Capital Resources" for details[484](index=484&type=chunk) [C. Research and Development, Patents and Licenses, etc.](index=96&type=section&id=C.%20Research%20and%20Development%2C%20Patents%20and%20Licenses%2C%20etc.) Research and Development Expenses (in USD millions) | Year | R&D Expenses | | :--- | :----------- | | 2021 | $3.7 | | 2022 | $8.5 | | 2023 | $14.1 | - R&D expenses increased significantly, reflecting continuous investment in technology and innovation to enhance customer experience and support business partners[485](index=485&type=chunk) [D. Trend Information](index=97&type=section&id=D.%20Trend%20Information) - No material adverse trends, uncertainties, demands, commitments, or events were identified as of December 31, 2023, that would significantly impact net revenues, income, profitability, liquidity, or capital resources[486](index=486&type=chunk) [E. Critical Accounting Estimates](index=97&type=section&id=E.%20Critical%20Accounting%20Estimates) - This section refers to "Item 5.A. Operating Results-Critical Accounting Estimates" for details[487](index=487&type=chunk) [Item 6. Directors, Senior Management and Employees](index=97&type=section&id=Item%206.%20Directors%2C%20Senior%20Management%20and%20Employees) This section details the compensation, board practices, and employee structure of SunCar, including information on its board committees and foreign private issuer status [A. Directors and Executive Officers](index=97&type=section&id=A.%20Directors%20and%20Executive%20Officers) - This section refers to "Item 1. Identity of Directors, Senior Management and Advisers—A. Directors and Senior Management" for details[487](index=487&type=chunk) [B. Compensation](index=97&type=section&id=B.%20Compensation) - For 2023, the aggregate cash and benefits paid to directors and executive officers was approximately **US$0.24 million**. No pension or retirement benefits are accrued for them[488](index=488&type=chunk) [C. Board Practices](index=97&type=section&id=C.%20Board%20Practices) - SunCar's Board of Directors has **five directors**, including **three independent directors** (Lin Bao, Yongsheng Liu, Haidong Zhang), and is chaired by Lin Bao[489](index=489&type=chunk)[497](index=497&type=chunk) - Directors owe fiduciary duties to SunCar under Cayman Islands law, including loyalty, good faith, and skill/care, and can vote on interested transactions if disclosed[492](index=492&type=chunk)[494](index=494&type=chunk) - As a foreign private issuer, SunCar is exempt from certain Exchange Act rules (e.g., proxy statements, Section 16 reporting) and can follow Cayman Islands corporate governance practices in lieu of most Nasdaq rules[495](index=495&type=chunk) - The company has established an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee, each with independent directors and specific charters[497](index=497&type=chunk)[498](index=498&type=chunk)[499](index=499&type=chunk) [D. Employees](index=101&type=section&id=D.%20Employees) Employee Breakdown as of December 31, 2023 | Category | Employees | Percentage | | :------------------- | :-------- | :--------- | | Management | 107 | 19.71% | | Sales & Administration | 267 | 49.17% | | Research and Development | 169 | 31.12% | | **Total** | **543** | **100.00%**| Employee Breakdown as of December 31, 2022 | Category | Employees | Percentage | | :------------------- | :-------- | :--------- | | Management | 110 | 20.8% | | Sales & Administration | 279 | 52.9% | | Research and Development | 139 | 26.3% | | **Total** | **528** | **100.00%**| - The total number of employees increased from **528 in 2022 to 543 in 2023**, with a notable increase in Research and Development personnel[502](index=502&type=chunk)[503](index=503&type=chunk) [E. Share Ownership](index=101&type=section&id=E.%20Share%20Ownership) - This section refers to "Item 7-Major Shareholders and Related Party Transactions" for details[504](index=504&type=chunk) [F. Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation](index=101&type=section&id=F.%20Disclosure%20of%20a%20Registrant%27s%20Action%20to%20Recover%20Erroneously%20Awarded%20Compensation) - This item is marked as "Not Applicable" [Item 7. Major Shareholders and Related Party Transactions](index=101&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) This section provides information on the beneficial ownership of the company's ordinary shares by major shareholders, directors, and executive management, and details related party transactions [A. Major Shareholders](index=101&type=section&id=A.%20Major%20Shareholders) Beneficial Ownership of Ordinary Shares as of December 31, 2023 | Name of Beneficial Owner | Class A Shares Number | Class A Shares % | Class B Shares Number | Class B Shares % | Voting Power (%) | | :----------------------- | :-------------------- | :--------------- | :-------------------- | :--------------- | :--------------- | | Zaichang Ye | — | — | 47,000,902 | 52.4% | 87.7% | | All Executive Officers and Directors as a group | — | — | 47,000,902 | 52.4% | 87.7% | | Automobile Services Group Limited | — | — | 41,708,943 | 46.5% | 77.8% | | KMBP Holdings Limited | 20,832,142 | 23.2% | — | — | 3.9% | | SSDL Holdings Limited | — | — | 7,919,622 | 8.8% | 14.8% | - Zaichang Ye, the Chairman and CEO, directly and indirectly (through Automobile Services Group Limited and SSDL Holdings Limited) holds **87.7% of the total voting power**[508](index=508&type=chunk)[509](index=509&type=chunk)[510](index=510&type=chunk) [B. Related Party Transactions](index=103&type=section&id=B.%20Related%20Party%20Transactions) - On March 1, 2022, SunCar disposed of Shengda Group, an affiliate of Mr. Ye Zaichang, for a nominal consideration due to its net liability position[511](index=511&type=chunk) - SunCar owed Jiachen (an affiliate of Mr. Ye) **RMB281.8 million** (**US$40.9 million**) for the transfer of SUNCAR Online, with the repayment date extended to December 31, 2025, at a **1% annual interest rate**[513](index=513&type=chunk) [C. Interests of Experts and Counsel](index=103&type=section&id=C.%20Interests%20of%20Experts%20and%20Counsel) - This item is marked as "None / Not applicable" [Item 8. Financial Information](index=103&type=section&id=Item%208.%20Financial%20Information) This section refers to Item 18 for consolidated financial statements and other financial information, and states there have been no significant changes [A. Consolidated Statements and Other Financial Information](index=103&type=section&id=A.%20Consolidated%20Statements%20and%20Other%20Financial%20Information) - This section refers to "Item 18-Financial Statements" for consolidated financial statements and other financial information[514](index=514&type=chunk) [B. Significant Changes](index=103&type=section&id=B.%20Significant%20Changes) - No significant changes were reported [Item 9. The Offer and Listing](index=103&type=section&id=Item%209.%20The%20Offer%20and%20Listing) This section provides details on the listing of the company's Class A Ordinary Shares and Warrants on the Nasdaq Capital Market [A. Offer and Listing Details](index=103&type=section&id=A.%20Offer%20and%20Listing%20Details) - Class A Ordinary Shares and Warrants are listed on Nasdaq Capital Market under symbols "SDA" and "SDAWW" respectively[515](index=515&type=chunk) [B. Plan of Distribution](index=104&type=section&id=B.%20Plan%20of%20Distribution) - This item is marked as "Not applicable" [C. Markets](index=104&type=section&id=C.%20Markets) - Class A Ordinary Shares and Warrants are listed on Nasdaq Capital Market under symbols "SDA" and "SDAWW" respectively[516](index=516&type=chunk) [D. Selling Shareholders](index=104&type=section&id=D.%20Selling%20Shareholders) - This item is marked as "Not applicable" [E. Dilution](index=104&type=section&id=E.%20Dilution) - This item is marked as "Not applicable" [F. Expenses of the Issue](index=104&type=section&id=F.%20Expenses%20of%20the%20Issue) - This item is marked as "Not applicable" [Item 10. Additional Information](index=104&type=section&id=Item%2010.%20Additional%20Information) This section provides additional details on the company's share capital, memorandum and articles of association, material contracts, exchange controls, and taxation policies [A. Share Capital](index=104&type=section&id=A.%20Share%20Capital) - As of December 31, 2023, there were **40,076,493 Class A Ordinary Shares** and **49,628,565 Class B Ordinary Shares** outstanding[517](index=517&type=chunk) - There were **5,365,194 public warrants** and **350,000 private placement warrants** outstanding, each exercisable for one-half of one Class A Ordinary Share at **$11.50 per full share**[517](index=517&type=chunk) [B. Memorandum and Articles of Association](index=104&type=section&id=B.%20Memorandum%20and%20Articles%20of%20Association) - The authorized share capital is **$50,000**, divided into **400,000,000 Class A Ordinary Shares** and **100,000,000 Class B Ordinary Shares**, both with **$0.0001 par value**[519](index=519&type=chunk) - Class A shares have **one vote**, and Class B shares have **ten votes per share**, voting together as one class[521](index=521&type=chunk) - Class B shares are convertible into Class A shares at the holder's option, and automatically convert upon transfer to non-affiliates; Class A shares are not convertible to Class B[524](index=524&type=chunk) - Dividends can be declared from profits or reserves, or share premium, provided the company can pay its debts. Holders of both classes receive the same dividend amount[520](index=520&type=chunk) - The company is an exempted company under Cayman Islands law, with limited liability for shareholders[533](index=533&type=chunk)[534](index=534&type=chunk) [C. Material Contracts](index=108&type=section&id=C.%20Material%20Contracts) - Material contracts related to the Business Combination are described in the Form F-4, specifically the Merger Agreement[535](index=535&type=chunk) [D. Exchange Controls](index=109&type=section&id=D.%20Exchange%20Controls) - There are no foreign exchange controls or regulations under current Cayman Islands laws[536](index=536&type=chunk) [E. Taxation](index=109&type=section&id=E.%20Taxation) - If classified as a PRC "resident enterprise," SunCar could be subject to a **25% enterprise income tax** on worldwide income and a **10% withholding tax** on dividends paid to non-PRC resident enterprise shareholders[537](index=537&type=chunk)[538](index=538&type=chunk)[540](index=540&type=chunk) - Indirect transfers of equity interests in PRC resident enterprises by non-PRC holding companies may be re-characterized as direct transfers and subject to PRC enterprise income tax if lacking reasonable commercial purpose[541](index=541&type=chunk) [F. Dividends and Paying Agents](index=111&type=section&id=F.%20Dividends%20and%20Paying%20Agents) - The company has never declared or paid cash dividends and currently plans to retain future earnings for operations and expansion[543](index=543&type=chunk) [G. Statement by Experts](index=111&type=section&id=G.%20Statement%20by%20Experts) - This item is marked as "Not applicable" [H. Documents on Display](index=111&type=section&id=H.%20Documents%20on%20Display) - As a foreign private issuer, SunCar files annual reports on Form 20-F and unaudited financial information on Form 6-K with the SEC, available on the SEC website[544](index=544&type=chunk) [I. Subsidiary Information](index=111&type=section&id=I.%20Subsidiary%20Information) - This item is marked as "Not applicable" [Item 11. Quantitative and Qualitative Disclosures about Market Risk](index=111&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section outlines the company's exposure to various market risks, including interest rate risk, credit risk, liquidity risk, and foreign exchange risk - The company is exposed to interest rate risk on short-term bank loans, which are subject to rate changes upon renewal[546](index=546&type=chunk) - Credit risk is managed through credit approvals, limits, and monitoring, with collective identification based on industry, geography, and customer type[547](index=547&type=chunk) - Liquidity risk is controlled via financial position analysis and monitoring, with reliance on financial institutions and related parties for short-term funding if needed[548](index=548&type=chunk) - Significant foreign exchange risk exists due to RMB-denominated revenues and costs, and U.S. dollar reporting, with no current hedging transactions[549](index=549&type=chunk) [Item 12. Description of Securities Other than Equity Securities](index=112&type=section&id=Item%2012.%20Description%20of%20Securities%20Other%20than%20Equity%20Securities) This item is marked as "Not applicable," indicating no description of securities other than equity securities - This item is marked as "Not applicable," indicating no description of securities other than equity securities PART II](index=113&type=section&id=PART%20II) [Item 13. Defaults, Dividends Arrearages and Delinquencies](index=113&type=section&id=Item%2013.%20Defaults%2C%20Dividends%20Arrearages%20and%20Delinquencies) This item is marked as "None," indicating no defaults, dividend arrearages, or delinquencies - This item is marked as "None," indicating no defaults, dividend arrearages, or delinquencies [Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds](index=113&type=section&id=Item%2014.%20Material%20Modifications%20to%20the%20Rights%20of%20Security%20Holders%20and%20Use%20of%20Proceeds) This item is marked as "None," indicating no material modifications to security holder rights or use of proceeds - This item is marked as "None," indicating no material modifications to security holder rights or use of proceeds [Item 15. Controls and Procedures](index=113&type=section&id=Item%2015.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures as of December 31, 2023, and notes no material changes in internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of December 31, 2023[552](index=552&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal year ended December 31, 2023[553](index=553&type=chunk) [Item 16. [Reserved]](index=113&type=section&id=Item%2016.%20%5BReserved%5D) This item is marked as "[Reserved]," indicating no content - This item is marked as "[Reserved]," indicating no content [Item 16A. Audit Committee Financial Expert](index=113&type=section&id=Item%2016A.%20Audit%20Committee%20Financial%20Expert) This section identifies Lin Bao as the Audit Committee financial expert - Lin Bao, an independent director and chairwoman of the Audit Committee, has been determined to be an Audit Committee financial expert[554](index=554&type=chunk) [Item 16B. Code of Ethics](index=113&type=section&id=Item%2016B.%20Code%20of%20Ethics) This section states that the board of directors has adopted a code of ethics applicable to all directors, officers, and employees - The board of directors has adopted a code of ethics applicable to all directors, officers, and employees, available on the company's website[555](index=555&type=chunk) [Item 16C. Principal Accountant Fees and Services](index=114&type=section&id=Item%2016C.%20Principal%20Accountant%20Fees%20and%20Services) This section details the aggregate fees paid to the company's previous and current auditors for audit services Principal Accountant Fees (in USD) | Fee Type | 2023 | 2022 | | :--------- | :-------- | :-------- | | Audit fees | $575,000 | $700,000 | - Audit fees for 2023 were **$575,000**, a decrease from **$700,000** in 2022[558](index=558&type=chunk) [Item 16D. Exemptions from the Listing Standards for Audit Committees](index=114&type=section&id=Item%2016D.%20Exemptions%20from%20the%20Listing%20Standards%20for%20Audit%20Committees) This item is marked as "Not applicable," indicating no exemptions from listing standards for audit committees - This item is marked as "Not applicable," indicating no exemptions from listing standards for audit committees [Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers](index=114&type=section&id=Item%2016E.%20Purchases%20of%20Equity%20Securities%20by%20the%20Issuer%20and%20Affiliated%20Purchasers) This item is marked as "Not applicable," indicating no purchases of equity securities by the issuer or affiliated purchasers - This item is marked as "Not applicable," indicating no purchases of equity securities by the issuer or affiliated purchasers [Item 16F. Change in Registrant's Certifying Accountant](index=114&type=section&id=Item%2016F.%20Change%20in%20Registrant%27s%20Certifying%20Accountant) This section refers to a Form 6-K filing for details on the change of auditors - Details regarding the change of the company's certifying accountant are described in a Form 6-K filed on June 8, 2023[559](index=559&type=chunk) [Item 16G. Corporate Governance](index=115&type=section&id=Item%2016G.%20Corporate%20Governance) This section outlines SunCar's corporate governance practices, noting its election as a Foreign Private Issuer to follow home country (Cayman Islands) rules in lieu of certain Nasdaq listing requirements - As a Foreign Private Issuer, SunCar follows Cayman Islands home country practice for corporate governance, exempting it from certain Nasdaq rules (e.g., majority independent board, specific committee compositions, annual shareholder meetings, proxy solicitations, quorum requirements, related party transaction oversight, and shareholder approval for certain issuances)[562](index=562&type=chunk)[563](index=563&type=chunk)[564](index=564&type=chunk) [Item 16H. Mine Safety Disclosure](index=117&type=section&id=Item%2016H.%20Mine%20Safety%20Disclosure) This item is marked as "Not applicable," indicating no mine safety disclosure - This item is marked as "Not applicable," indicating no mine safety disclosure [Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=117&type=section&id=Item%2016I.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is marked as "Not applicable," indicating no disclosure regarding foreign jurisdictions that prevent inspections - This item is marked as "Not applicable," indicating no disclosure regarding foreign jurisdictions that prevent inspections [Item 16J. Insider Trading Policies](index=117&type=section&id=Item%2016J.%20Insider%20Trading%20Policies) This item is marked as "Not applicable," indicating no insider trading policies disclosure - This item is marked as "Not applicable," indicating no insider trading policies disclosure [Item 16K. Cybersecurity](index=117&type=section&id=Item%2016K.%20Cybersecurity) This section details SunCar's cybersecurity risk management, strategy, and governance, including its threat defense system, monitoring, and board oversight - SunCar has implemented cybersecurity risk assessment procedures and a threat defense system covering network, host, and application security, with continuous monitoring and testing[571](index=571&type=chunk)[572](index=572&type=chunk) - The Board of Directors oversees cybersecurity risk management, reviews disclosures, and assesses material risks annually, with prompt internal assessment and external expert consultation for incidents[574](index=574&type=chunk) - As of the report date, no material cybersecurity incidents or threats have affected or are reasonably likely to materially affect the company's business or financial condition[573](index=573&type=chunk) PART III](index=118&type=section&id=PART%20III) [Item 17. Financial Statements](index=118&type=section&id=Item%2017.%20Financial%20Statements) This item refers to Item 18 for financial statements - This item refers to Item 18 for financial statements[576](index=576&type=chunk) [Item 18. Financial Statements](index=118&type=section&id=Item%2018.%20Financial%20Statements) This section incorporates by reference the company's audited consolidated financial statements for 2021, 2022, and 2023, and unaudited pro forma condensed combined financial information - Audited consolidated financial statements for years ended December 31, 2021 and 2022, and unaudited pro forma condensed combined financial information are incorporated by reference from a Form 20-FR filed on June 30, 2023[576](index=576&type=chunk) - Audited consolidated financial statements for the year ended December 31, 2023, are filed as Exhibit 99.3[577](index=577&type=chunk) [Item 19. Exhibits](index=118&type=section&id=Item%2019.%20Exhibits) This section lists all exhibits filed as part of the Form 20-F report, including corporate documents, agreements, and financial statements - The report includes various exhibits such as the Second Amended and Restated Memorandum and Articles of Association, Specimen Ordinary Share Certificate, Merger Agreement, Warrant Agreement, Registration Rights Agreement, Employment Agreements, and financial statements[577](index=577&type=chunk) SIGNATURES](index=120&type=section&id=SIGNATURES) - The report is certified by Bohong Du, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) on April 29, 2024[581](index=581&type=chunk)

Adjusted EBITDA increased by $7.2 million to $1.6 million in 2023Conference Call and Webcast on April 30th at 5 PM ET NEW YORK, April 29, 2024 /PRNewswire/ -- SunCar Technology Group Inc. (the "Company" or "SunCar") (NASDAQ: SDA), an innovative leader in cloud-based B2B auto services and auto e-insurance in China, today provided a business update and reported financial results for the year ended December 31, 2023. Fiscal Year 2023 Financial Results For the fiscal year ended December 31, 2023, total revenue ...