Company: SDAWW
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036086
Chunk: 18

Company: SunCar Technology Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 18
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. The disruption of business cooperation with major banks and insurance companies we work with may
cause us to lose our competitive advantages in certain areas. If we are unable to compete effectively against and stay ahead of our competitors,
we may lose customers and our financial results may be negatively affected.

Our negative net operating cash flows in
the past may expose us to certain liquidity risks and could constrain our operational flexibility.

We had negative net operating
cash flows in years 2024, 2023 and 2022. Our cash flows have been affected by a general mis-match of cash inflow and outlay on the operational
level resulting from our significantly longer trade receivables turnover days compared to our trade payables turnover days, as our customers
are mostly banks and insurance companies and their respective payment process is generally significantly longer than our payment process
to our external referral sources and auto service providers.

We cannot assure you that
we will not experience net current liabilities or negative net operating cash flows in the future. Our future liquidity, ability to make
necessary capital expenditures, the payment of trade and other payables, as and when they become due, will primarily depend on our ability
to maintain adequate cash inflows from our operating activities and adequate external financing. Our ability to generate adequate cash
inflows from operating activities may be affected by our future operating performance, prevailing economic conditions, our financial,
business and other factors, many of which are beyond our control. Also, we may not be able to renew or refinance our existing bank borrowings
or secure additional external financing on a timely basis or on acceptable terms, or at all. The occurrence of any of the foregoing may
cause us not to have sufficient cash flow to fund our operating costs and constrain our operational flexibility and, in that event, our
business, financial condition and results of operations could be adversely affected.

Our latest business growth strategy may
negatively impact our financial results and profit margins in the short run.

To better fit into the development
of current vehicle industry pioneer in the electric vehicles (“ EVs”) market and transform to the sustainable growth strategy,
we plan to focus on several marketing points to further increase the revenue of SunCar. Our growth strategy includes the following: (1)
expanding customers base with market trends; (2) under the electrification of the vehicles, and population of EVs, SunCar is working to
provide digitalized, online services; (3) coordinating with multiple insurance companies, and design new insurance plans for EV drivers
which will