Company: SDAWW
Filing Date: 2025-02-04
Form Type: 6-K
Source: 0001213900-25-010076
Chunk: 5

Company: SunCar Technology Group Inc.
Filing Date: 2025-02-04
Form: 6-K
Chunk 5
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 balance sheet date thereafter. Changes in the estimated fair
value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the Private Warrants
was estimated using a Black-Scholes model.

| (e). | Fair value measurement |

Accounting guidance defines fair value as the
price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded
at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that
market participants would use when pricing the asset or liability.

Accounting guidance establishes a fair value hierarchy
that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant
to the fair value measurement. The three levels of inputs are:

| ● | Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. |

| ● | Level 2—Include other inputs that are directly or indirectly observable in the marketplace. |

| ● | Level 3—Unobservable inputs which are supported by little or no market activity. |

Accounting guidance also describes three main
approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The
market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets
or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement
is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that
would currently be required to replace an asset.

F-8

| (e) | Fair value measurement - Continued |

Financial assets and liabilities of the Group
primarily consist of cash, accounts receivable, other receivables included in prepayments and other current assets, short-term borrowings,
accounts payable, other payables included in accrued expenses and other current liabilities, and warrant liabilities. As of December 31,
2023 and September 30, 2024, the carrying amounts of other financial instruments approximated to their fair values due to the short-term
maturity of these