SunCar Technology Group Inc 20-F for FY2024

SunCar Technology Group Inc. (SDA)

20-F 2025-04-28 For: 2024-12-31

Added on April 05, 2026

About this 20-F

SunCar Technology Group Inc filed this 20-F on April 28, 2025, covering the fiscal year ended December 31, 2024 (FY2024).

Headline figures

Fiscal year ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $441.9M; up 21.5% from $363.75M a year earlier
Net loss: $64.45M; compared with a net loss of $17.58M a year earlier
Diluted EPS: -$0.72; compared with -$0.31 a year earlier

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Not applicable		Cayman Islands
(Translation of Registrant’s name into English)		(Jurisdiction of incorporation or organization)

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Emerging growth company	☒

Auditor’s name		Firm ID		Location
Enrome LLP		6907		Singapore

Cautionary Note Regarding Forward-Looking Statements	ii
Defined Terms	iv
PART I	1
Item 1. Identity of Directors, Senior Management and Advisers	1
Item 2. Offer Statistics and Expected Timetable	4
Item 3. Key Information	4
Item 4. Information on the Company	39
Item 4A. Unresolved Staff Comments	58
Item 5. Operating and Financial Review and Prospects	58
Item 6. Directors, Senior Management and Employees	73
Item 7. Major Shareholders and Related Party Transactions	77
Item 8. Financial Information	79
Item 9. The Offer and Listing	79
Item 10. Additional Information	80
Item 11. Quantitative and Qualitative Disclosures about Market Risk	86
Item 12. Description of Securities Other than Equity Securities	86
PART II	87
Item 13. Defaults, Dividends Arrearages and Delinquencies	87
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds	87
Item 15. Controls and Procedures	87
Item 16. [Reserved]	87
Item 16A. Audit Committee Financial Expert	87
Item 16B. Code of Ethics	87
Item 16C. Principal Accountant Fees and Services	88
Item 16D. Exemptions from the Listing Standards for Audit Committees	88
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers	88
Item 16F. Change inf Registrant’s Certifying Accountant	88
Item 16G. Corporate Governance	89
Item 16H. Mine Safety Disclosure	90
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	90
Item 16J. Insider Trading Policies	90
Item 16K. Cybersecurity	90
PART III	91
Item 17. Financial Statements	91
Item 18. Financial Statements	91
Item 19. Exhibits	91
SIGNATURES	92

Name	Age (1)	Position	Date of Election or Appointment
Zaichang Ye	55	Chairman, Director and Chief Executive Officer	May 17, 2023
Bohong Du	54	Director and Chief Financial Officer	May 17, 2023
Zhunfu Lei	47	Chief Technology Officer and Chief Operating Officer	May 17, 2023
Breaux Walker	59	Chief Strategy Officer	January 13, 2025
Saiye Gu	52	Vice President	May 17, 2023
Yizhi Qian	46	Vice President	May 17, 2023
Haidong Zhang (2)(3)(4)	46	Independent Director	May 17, 2023
Lin Bao (2)(3)	51	Independent Director	May 17, 2023
Yongsheng Liu (2)	55	Independent Director	May 17, 2023

(1)	As of the date of this report.

(2)	Member of the Audit Committee.

(3)	Member of the Compensation Committee.

(4)	Member of the Nominating and Corporate Governance Committee.

	For the year Ended December 31,
	2022			2023			2024
	(In USD thousands)
Revenues
Auto eInsurance service	$	67,640		$	118,109		$	170,549
Technology service		15,479			30,658			44,892
Auto service		199,294			214,979			226,456
Total revenues		282,413			363,746			441,897

Operating cost and expenses
Integrated service cost		(166,793	)		(209,553	)		(226,172	)
Promotional service expenses		(65,500	)		(112,504	)		(164,262	)
Selling expenses		(16,477	)		(20,578	)		(22,587	)
General and administrative expenses		(37,742	)		(22,462	)		(46,995	)
Research and development expenses		(8,478	)		(14,111	)		(40,244	)
Total operating costs and expenses		(294,990	)		(379,208	)		(500,260	)

Operating loss		(12,577	)		(15,462	)		(58,363	)

Other income/(expenses)
Financial expenses, net		(3,659	)		(4,435	)		(4,529	)
Investment income		441			518			784
Change of fair value of warrant liabilities		-			(629	)		(286	)
Other income, net		5,121			5,001			794
Total other income/(expenses), net		1,903			455			(3,237	)

Loss before income tax expense		(10,674	)		(15,007	)		(61,600	)
Income tax expense		(231	)		(2,572	)		(2,853	)
Loss from continuing operations, net of tax		(10,905	)		(17,579	)		(64,453	)

Discontinued operations:
Net loss from the operations of the discontinued operations, net of tax		(994	)		-			-
Net loss		(11,899	)		(17,579	)		(64,453	)

	As of December 31,
	2023		2024
	(In USD thousands)
Total assets	$	223,235	$	246,728
Total liabilities	$	155,245	$	180,494
Total shareholders’ equity	$	16,078	$	11,892
Non-controlling interests	$	51,912	$	54,342
Total equity	$	67,990	$	66,234

	For the years ended December 31,
	2022			2023			2024
	(In USD thousands)
Net cash (used in) provided by operating activities of continuing operations	$	(16,092	)	$	(27,651	)	$	11,841
Net cash used in investing activities of continuing operations	$	(5,402	)	$	(2,394	)	$	(12,147	)
Net cash provided by (used in) financing activities of continuing operations	$	10,636		$	40,434		$	(2,951	)

As of December 31, 2024
Cash and cash equivalents	$	26,865
Short-term loan		83,597
Amounts due to related parties		28,999
Total shareholders’ equity		11,892
Non-controlling interests		54,342
Total capitalization	$	178,830

	●	Our auto services business and auto eInsurance business largely depend on our relationships with our customers. See Risk Factor - Our auto services business and auto eInsurance business largely depend on our relationships with our customers. If we cannot maintain good relationships or provide satisfactory services to them, we may lose some of our business.

	●	We rely on our auto service providers and external referral sources to operate our business, therefore our relationships with our service providers are crucial to our business. See Risk Factor - We rely on our auto service providers and external referral sources to operate our business, therefore our relationships with our service providers are crucial to our business. Failure to establish and maintain stable relationships with them and other supply chain disruptions may adversely affect our results of operations and business prospects.

	●	We are subject to customer concentration risk. See Risk Factor - We are subject to customer concentration risk. Our growth and revenue could be materially and adversely affected if we lose any significant customer, or if any significant customer fails to cooperate with us at anticipated levels.
	●	We are subject to credit risks from our customers.

	●	Our negative net operating cash flows in the past may expose us to certain liquidity risks and could constrain our operational flexibility. See Risk Factor under such title.

	●	Any significant disruption in services on our apps, websites or computer systems, including events beyond our control, could materially and adversely affect our business, financial condition and results of operation. See Risk Factor under such title.

	●	If we are unable to manage our growth or execute our strategies effectively, our business and prospects may be materially and adversely affected. See Risk Factor under such title.

	●	We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our ordinary shares less attractive to investors. See Risk Factor under such title.

	●	We may not be able to use certain of our leased properties due to defects related to these properties. See Risk Factor - We may not be able to use certain of our leased properties due to defects related to these properties. And failure to comply with PRC laws and regulations on leased property may expose us to potential fines and negatively affect our ability to use the properties we lease.

	●	If we fail to protect our intellectual property rights and proprietary information, we may lose our competitive edge and our brand, reputation and operations may be materially and adversely affected. See Risk Factor under such title.

	●	We participate in the business as an insurance intermediary, therefore, we only obtained necessary licenses for the sale of insurance, but these insurances do not allow us to create/modify insurance products either. See Risk Factor under such title.

	●	Our business is subject to regulation and administration by the China Banking and Insurance Regulatory Commission and other government authorities, and failure to comply with any applicable regulations and rules by us could result in financial losses or harm to our business. See Risk Factor under such title.

	●	Misconduct of the external referral sources we engaged to promote our auto eInsurance services is difficult to detect and deter and could harm our reputation or lead to regulatory sanctions or litigation costs. See Risk Factor under such title.

	●	Examinations and investigations by the PRC regulatory authorities may result in fines and/or other penalties that may have a material adverse effect on our reputation, business, results of operations and financial condition. See Risk Factor under such title.

	●	Because the commission revenue we earn on the sale of insurance products is based on premium and commission rates set by insurance companies, any decrease in these premiums or commission rates, or increase in the referral fees we pay to our external referral sources, may have an adverse effect on our results of operation. See Risk Factor under such title.

	●	The insurance business is historically cyclical in nature, and there may be periods with excess underwriting capacity and unfavorable premium rates, which may negatively affect SunCar’s overall revenues. See Risk Factor - The insurance business is historically cyclical in nature, and there may be periods with excess underwriting capacity and unfavorable premium rates, which may negatively affect SunCar’s overall revenues. SunCar also plans to further develop new insurance products narrowly tailored to the new trend in the car industry, but there is no guarantee that such innovation will receive positive feedback from the market or bring more revenues to SunCar.

	●	PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC Operating Entities to liability or penalties. See Risk Factor - PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC Operating Entities to liability or penalties, limit our ability to inject capital into our PRC Operating Entities or limit the ability of our PRC Operating Entities to increase their registered capital or distribute profits.

	●	Substantial uncertainties exist with respect to the interpretation and implementation of the PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations. See Risk Factor under such title.

	●	The Chinese government exerts substantial influence over the manner in which SunCar must conduct our business activities. See Risk Factor - The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required to obtain permission or approval from Chinese authorities to list on U.S exchanges, however, if we were required to obtain permission or approval in the future and were denied permission or approval from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange and the value of our ordinary shares may significantly decline or be worthless, which would materially affect the interest of the investors.

	●	Our business is conducted in RMB and the price of our ordinary shares is quoted in United States dollars, changes in currency conversion rates may affect the value of your investments. See Risk Factor - Because our business is conducted in RMB and the price of our ordinary shares is quoted in United States dollars, changes in currency conversion rates may affect the value of your investments. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenue and financial condition. Changes in the conversion rate between the United States dollar and the RMB will affect the amount of proceeds we will have available for our business.

	●	We may become subject to a variety of laws and regulations in the PRC regarding privacy, data security, cybersecurity, and data protection. SunCar may be liable for improper use or appropriation of personal information. See Risk Factor under such title.

	●	If SunCar is classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and ordinary shareholders. See Risk Factor under such title.

	●	The permission or approval of the China Securities Regulatory Commission may be required in future offerings or financings, and, if required, we cannot predict whether we will be able to obtain such permission or approval. See Risk Factor under such title.

	●	PRC regulation of loans to and direct investment in PRC entities by offshore holding companies may delay us from using the proceeds of future offerings. In addition, the PRC government imposes controls on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of currency out of China, to the extent cash in the business is in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds may not be available to fund operations or for other use outside of the PRC/Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of SunCar or SunCar’s subsidiaries, by the PRC government to transfer cash. In terms of the cash transfer among SunCar and its subsidiaries, subject to the amounts of cash transfer and the nature of the use of funds, requisite internal approval shall be obtained prior to each cash transfer. Specifically, all transactions require the approvals of the financial controllers of the entities involved. As for an internal cash transfer exceeds RMB10,000,000 (approximately $1.5 million), the general manager is also required to conduct review and approval. See Risk Factor - PRC regulation of loans to and direct investment in PRC entities by offshore holding companies may delay us from using the proceeds of future offerings to make loans or additional capital contributions to our PRC Operating Entities, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

	●	Recently, the PRC government initiated a series of regulatory actions and released guidelines to regulate business operations in China with little advance notice, including those related to data security or anti-monopoly concerns, which may have an impact on our ability to conduct certain business in China, accept foreign investments, or list on a U.S. or other foreign exchange. See Risk Factor - We face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies and Risk Factor - The M&A Rules and certain other PRC regulations may make it more difficult for us to pursue growth through acquisitions.

	●	The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. Therefore, investors in the securities and our business face potential uncertainty from the PRC government’s policy. The Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or the value of our securities. Any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or to be worthless. See Risk Factor - The permission or approval of the China Securities Regulatory Commission may be required in connection with this Transaction, and, if required, we cannot predict whether we will be able to obtain such permission or approval.

	●	Our auditor is headquartered in Singapore, Singapore, and is subject to inspection by the PCAOB on a regular basis. See Risk Factor - Holding Foreign Companies Accountable Act, or the HFCAA, and the related regulations are evolving quickly. Further implementations and interpretations of our amendments to the HFCAA or the related regulations, or a PCAOB’s determination of its lack of sufficient access to inspect our auditor, might pose regulatory risks to and impose restrictions on us because of our operations in mainland China that PCAOB may not be able to inspect or investigate completely such audit documentation and, as such, you may be deprived of the benefits of such inspection and our ordinary share could be delisted from the stock exchange pursuant to the HFCAA.

	●	Because there are no current plans to pay cash dividends on the Class A Ordinary Share for the foreseeable future, you may not receive any return on investment unless you sell your Class A Ordinary Share for a price greater than that which you paid for it. See Risk Factor under such title.

	●	If SunCar fails to implement and maintain an effective system of internal controls to remediate its material weaknesses over financial reporting, SunCar may be unable to accurately report its results of operations, meets its reporting obligations or prevent fraud, and investor confidence and the market price of SunCar’s ordinary shares may be materially and adversely affected. See Risk Factor under such title.

	●	Future sales or perceived sales of substantial amounts of our securities in the public market could have a material adverse effect on the prevailing market price of our Ordinary Shares and our ability to raise capital in the future, and may result in dilution of your shareholdings. See Risk Factor under such title.

	●	We may have conflicts of interest with our largest shareholder and may not be able to resolve such conflicts on favorable terms for us. See Risk Factor under such title.

	●	making misrepresentation when marketing or selling insurance to customers;

	●	hindering insurance applicants from making full and accurate mandatory disclosures or inducing applicants to make misrepresentations;

	●	hiding or falsifying material information in relation to insurance contracts;

	●	fabricating or altering insurance contracts without authorization from relevant parties, selling false policies, or providing false documents on behalf of the applicants;

	●	falsifying auto eInsurance business or fraudulently returning insurance policies to obtain commissions;

	●	colluding with applicants, insureds, or beneficiaries to obtain insurance benefits;

	●	engaging in false or falsified claims; or

	●	otherwise not complying with laws and regulations or our control policies, procedures, and undertakings.

	●	an economic downturn in China or any regional market in China;

	●	inaccurate assessment of the economic conditions of the markets in which we operate;

	●	economic policies and initiatives undertaken by the PRC government;

	●	changes to prevailing market interest rates;

	●	decrease in automobile use in China; and

	●	a higher rate of bankruptcy.

	●	actual or anticipated fluctuations in our revenue and results of operations;

	●	loss of significant customers or material defaults by our customers;

	●	major changes in our key personnel or senior management;

	●	announcements of competitive developments, acquisitions or strategic alliances in our industry;

	●	changes in earnings estimates or recommendations by financial analysts;

	●	involvement in litigation or regulatory investigations;

	●	general market conditions or other developments affecting us or our industry;

	●	fluctuations in stock market price and volume and other events or factors beyond our control;

	●	the release of lockup or other transfer restrictions on our outstanding Ordinary Shares, or sales or perceived sales of additional Ordinary Shares by us or other shareholders; and

	●	our inability to obtain or maintain regulatory approval for our business operations.

	●	One-stop, plug-in, round-the-clock service enablement. Our service solutions contain diverse service selections, provided 24/7 across China, empowering our customers with round-the-clock, on-demand service capability to satisfy their end customers. The plug-in customized service solutions are fully digitally operated and managed, via system-to-system integration between our customers and us.

	●	Simple, convenient and cost-efficient service process. The management believes we have built and enabled an extensive network of quality auto service providers and set up stringent service standards to ensure consistent service quality. Our digital platform allows our enterprise customers to purchase comprehensive integrated auto services in one stop using a simple plug-in connection, thereby avoiding the costs of selecting, engaging and supervising numerous scattered and independent service providers on their own.

	●	Quality auto services to end customers of our customers to increase their loyalty and satisfaction with our enterprise customers. We select quality auto service providers and monitor them with regular trainings and supervision. The Management believes the quality services provided by our auto service providers enhances the loyalty and satisfaction of the end consumers of our enterprise customers.

	●	Cost-effective customer acquisition. Once connected, our digital platform directs end consumers of our enterprise customers (i.e. members of their loyalty and reward programs) to visit the stores of our auto service providers. This provides our auto service providers with an additional flow of customers significant in volume and consistency, all without incurring additional marketing expenses.

	●	Online management tools for efficient operation. We provide our auto service providers online management tools to streamline their workflow and improve business efficiency. Although we have plans to monetize some of these online systems, we also expect the basic functions and modules to remain free to use to ensure wide adoption of our digital platforms.

	●	Referral fees for our auto eInsurance business. Auto service providers on our platform can also act as referral service providers for our auto eInsurance business. They refer their end consumers (of the auto services) who are also potential insurance purchasers to us and receive referral fees and other rewards when these referrals lead to successful insurance policy sales.

	●	Extensive network to promote insurance policies with cost efficiency. We leverage our proprietary technology platforms and our extensive networks of service providers to promote the sales of auto eInsurance products of our insurance company clients. This is facilitated by our online platform, which connects our over 64,000 external sales partners to insurance products underwritten by our 35 insurance company group clients (including the top 10 insurance company groups with combined over 90% market share), using our convenient online insurance interface. Thus, we allow our insurance company clients to leverage our extensive networks to promote their products with efficiency and scale.

	●	Targeted sales channels. Our sales partners consist of auto service providers and online car marketplaces with direct exposure to and focused user traffic of car owners. They bring customers to the product offerings of our insurance company clients, and the management believes such customers to be accurate target customers of our insurance company clients.

	●	Efficiency by full digital experience. Our online interface enables our insurance company clients to complete the whole insurance underwriting process fully digitally. With simple prompts from the insurance buyer, our system can realize automatic vehicle recognition, automatic quotation, online underwriting, online payment and insurance policy generation, saving time and cost for our insurance company clients compared to traditional offline policy selling.

	●	Referral fees. Our external insurance sales partners, which includes a large number of our auto service providers, earn referral fees for successful referral of insurance purchasers to purchase insurance products through our auto eInsurance platform.

	●	Simple and convenient referral process. Our insurance interface integrates diverse products from 35 insurance company groups (including the top 10 insurance company groups with combined over 90% market share), which we believe provides market-wide selection for the insurance buyers. With simple guidance, our insurance sales partners can help the insurance buyers finish the purchasing process within a few minutes on their smartphones.

	●	Enhanced consumer loyalty and satisfaction. For our channel partners such as Guazi.com, Souche.com, Chexiang.com, Cangoonline.com and Qufenqi.com, we recommend and customize insurance products and provide assistance in claim and damage assessment to their consumers.

	●	Convenient one-stop “supermarket-style” auto insurance shopping experience. End consumers could obtain accurate real-time information of various auto eInsurance products and shop for insurance products conveniently while visiting car wash and beauty stores, maintenance facilities or dealership stores.

	●	Auto services for free or at discounted prices. Our auto services platform enables end consumers to receive various quality services for free or at discounted prices as members of the reward programs or customer loyalty programs of our enterprise customers. We provide end consumers the opportunity to redeem the reward points they accumulate easily in their daily life for quality auto services.

	●	Convenient and customized service experiences. The management believes the scale of our network of auto service providers as well as our efficient digitalized platform allow end consumers to conveniently choose auto services that best suit their particular needs at the times and locations most convenient to them.

	●	Complementary insurance claims assistance and related services. We, in collaboration with our insurance company clients and external insurance sales partners, provide comprehensive services to end consumers including claims assistance and damage assessment assistance.

	●	Automobile beauty services. Our automobile beauty services include car wash, waxing, refinishing, cleaning, polishing and paint repairing services.

	●	Maintenance services. Our maintenance services include oil change, oil filter change, tire maintenance, and other minor tune-up services.

	●	Safety checkup services. Our safety checkup services include routine checkups of the engine, brake, panel, tires, meters, battery and other functioning parts of the automobile.

	●	Designated driving. We primarily work with designated driver service providers to allocate the driver in designated location, offering driving service for car owners.

	●	Destination pickup services. We collaborate with nationwide service providers to provide our destination pickup services. We offer a full range of destination pickup services primarily in major cities, and airport and train station pickups in other cities.

	●	Non-accident roadside assistance and breakdown services. We offer non-accident roadside assistance and breakdown services, such as tire changing and battery jumping, typically through our auto service providers connected through our digital platform, which allows us to offer expedient roadside services at a low cost. We also collaborate with professional roadside assistance companies such as towing companies.

	●	Car inspection services. We offer car inspection services by assisting the end consumers of our enterprise customers in conducting annual inspection processes at the offices of the department of motor vehicles on behalf of the end consumers, including picking up and delivery of automobiles for inspection.

	●	Plug-in and flexible implementation: Our digital system empowers our enterprise customers with capability to implement the service solutions rapidly and cost-efficiently, with an average implementation period of less than two weeks. Our customers can choose the service category to customize a service solution while our operation and technical teams work seamlessly to perform the implementation and testing. Our digitalized service solution could be embedded into our customer’s existing systems through Application Programming Interface (API), HTML 5, Applet or their own applications without disrupting their previous work processes, meanwhile providing full functionality to serve end customers. Our plug-in auto services are now implemented in over 1,400 of our customers’ diverse online applications.

	●	Secured Hybrid Cloud and Data: We developed our hybrid cloud to support our multi-tenant digital platform which process massive transactions every day. Since many of our customers are banking, insurance or other data sensitive institutions, we maintain a financial institution’s level cyber security throughout our systems to monitor and manage data traffic on a real-time basis. We also implement multiple layers of security measures to insulate our database from unauthorized access, along with sophisticated security protocols for communication among applications. We have obtained ISO:27001:2013 information security management system certification from China Cybersecurity Review Technology and Certification Center (CCRC) and S3A3 of Cybersecurity Protection Level by Shanghai Institution of Integrated Application of Network Technology.

	●	Innovation: We continue investing in R&D for innovative solutions for our customers and partners. Our auto eInsurance solution helps end customers finish the insurance purchase process within a few minutes. Our multi-tenant platform has derived over 40 sub-systems which continually release new features for clients, partners and our internal staff. We also work closely with EV OEMs and smart panel companies to deploy new features and services into their mobile applications or car panels to meet trends and customer expectations in the auto industry.

	●	Automation. We maintain a highly automated management process. For our auto eInsurance business, we imbedded modules with functions including real-time insurance premium quotes inquiry and underwriting decisions that connects to and automatically interacts with our insurance company clients. Our auto service orders are also processed by our AI task scheduling system based on service category, location and time requirements, and distributed to the best available service providers. Our automation initiatives save time and costs, and boost the efficiency of our business and our customers’ and end customers’ satisfaction.

	●	Managing complexity. We believe our multi-tenants digital platform plays a critical role in managing the growing complexity of our business while meeting customer expectations. We are working with over 1,400 enterprise customers, over 48,000 auto service providers, 35 insurance company groups and over 64,000 insurance sales partners. Our platform and its 40 derived sub-systems support over 1,400 service solutions embedded in client applications. Our platform digitalizes and manages complex processes and interactions across all parties in the automotive ecosystem with their diverse business workflows.

	●	Cyber resilience. We have adopted various IT safety measures to enhance our information security, including firewalls, data encryption and intrusion detection. We utilize multiple data centers in different cities and maintain data redundancy through a real-time multi-layer data backup system to ensure the reliability of our systems. We have implemented a disaster recovery program which enables us to react appropriately in an emergency and instantly back up our data to an additional data center if needed. Our board of directors review our cyber security measures and cyber resilience on a half annual basis. As our suppliers and service providers rely on our digital platforms, they present minimal increase in cybersecurity risks. We work closely with our enterprise customers to ensure the cyber resilience of integrating our digital platforms with their customary platforms and apps.

	●	our selection of critical accounting policies;

	●	the judgments and other uncertainties affecting the application of such policies;

	●	the sensitivity of reported results to changes in conditions and assumptions.

Category		Estimated useful lives
Vehicles		3-5 years
Office equipment and furniture		3-5 years
Electronic equipment		3 years
Building		20 years
Computer software		5, 10 years
Leasehold improvements		Over the shorter of the lease term or the estimated useful lives of the assets

	For the Years Ended December 31,						Change
	2023			2024			Amount			%
Revenues
Auto eInsurance service	$	118,109		$	170,549		$	52,440			44	%
Technology service		30,658			44,892			14,234			46	%
Auto service		214,979			226,456			11,477			5	%
Total revenues		363,746			441,897			78,151			21	%

Operating costs and expenses
Integrated service cost		(209,553	)		(226,172	)		(16,619	)		8	%
Promotional service expenses		(112,504	)		(164,262	)		(51,758	)		46	%
Selling expenses		(20,578	)		(22,587	)		(2,009	)		10	%
General and administrative expenses		(22,462	)		(46,995	)		(24,533	)		109	%
Research and development expenses		(14,111	)		(40,244	)		(26,133	)		185	%
Total operating costs and expenses		(379,208	)		(500,260	)		(121,052	)		32	%

Operating loss		(15,462	)		(58,363	)		(42,901	)		277	%

Other income/(expenses)
Financial expenses, net		(4,435	)		(4,529	)		(94	)		2	%
Investment income		518			784			266			51	%
Change of fair value of warrant liabilities		(629	)		(286	)		343			-55	%
Other income, net		5,001			794			(4,207	)		-84	%
Total other income, net		455			(3,237	)		(3,692	)		-811	%

Loss before income tax expense		(15,007	)		(61,600	)		(46,593	)		310	%
Income tax expense		(2,572	)		(2,853	)		(281	)		11	%
Loss from continuing operations, net		(17,579	)		(64,453	)		(46,874	)		267	%
Net loss		(17,579	)		(64,453	)		(46,874	)		267	%
Other comprehensive loss
Foreign currency translation difference		(1,137	)		(1,524	)		(387	)		34	%
Total comprehensive loss	$	(18,716	)	$	(65,977	)	$	(47,261	)		253	%

	Payment Due by Period
	Within one year		1-3 years		Total
Operating lease payment	$	554	$	21	$	575
Lease payment of property management fee and short-term lease	$	80	$	1	$	81
Capital payment	$	4,837	$	-	$	4,837
Short-term borrowings	$	83,597	$	-	$	83,597

	●	establishing clear hiring policies for employees or former employees of the independent auditors;

	●	reviewing and recommending to SunCar’s Board of Directors for approval, the appointment, re-appointment or removal of the independent auditor, after considering its annual performance evaluation of the independent auditor;

	●	approving the remuneration and terms of engagement of the independent auditor and pre-approving all auditing and non-auditing services permitted to be performed by SunCar’s independent auditors at least annually;

	●	obtaining a written report from SunCar’s independent auditor describing matters relating to its independence and quality control procedures;

	●	reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response;

	●	discussing with SunCar’s independent auditor, among other things, the audits of the financial statements, including whether any material information should be disclosed, issues regarding accounting and auditing principles and practices;

	●	reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act;

	●	reviewing and recommending the financial statements for inclusion within SunCar’s quarterly earnings releases and to its Board of Directors for inclusion in its annual reports;

	●	discussing the annual audited financial statements with management and the independent registered public accounting firm;

	●	reviewing policies with respect to risk assessment and risk management;

	●	reviewing the adequacy and effectiveness of SunCar’s accounting and internal control policies and procedures and any special steps taken to monitor and control major financial risk exposures;

	●	periodically reviewing and reassessing the adequacy of the committee charter;

	●	approving annual audit plans, and undertaking an annual performance evaluation of the internal audit function;

	●	establishing and overseeing procedures for the handling of complaints and whistleblowing;

	●	meeting separately and periodically with management, the internal auditors and the independent registered public accounting firm;

	●	monitoring compliance with SunCar’s code of business conduct and ethics, including reviewing the adequacy and effectiveness of its procedures to ensure proper compliance;

	●	reporting periodically to SunCar’s Board of Directors; and

	●	such other matters that are specifically delegated to SunCar’s Audit Committee by SunCar’s Board of Directors from time to time.

	●	reviewing and evaluating SunCar’s executive compensation and benefits policies generally;

	●	reviewing and recommending any incentive compensation or equity plans, programs or other similar arrangements;

	●	periodically reviewing and reassessing the adequacy of the committee charter;

	●	selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management;

	●	reporting periodically to SunCar’s Board of Directors; and

	●	such other matters that are specifically delegated to the Compensation Committee by SunCar’s Board of Directors from time to time.