Company: SUND
Filing Date: 2025-06-30
Form Type: 10-K
Source: 0001641172-25-017143
Chunk: 103

Company: Sundance Strategies, Inc.
Filing Date: 2025-06-30
Form: 10-K
Item: Item 1A
Chunk 103
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 from life settlement products may not match expected results, which could reduce returns and also adversely affect the ability
to service and grow a portfolio for actuarial stability.

Our
business model relies on achieving actual results similar to those projected by using actuarial estimates. We believe that the larger
the portfolio of policies, the more reliable actuarial estimates will be and, likewise, the greater the likelihood that expected results
will be achieved.

In
a study published in 2012, A.M. Best concluded that at least 300 lives are necessary to narrow the band of cash flow volatility and achieve
actuarial stability, while Standard & Poor’s has indicated that actuarial stability is unlikely to be achieved with a pool
of less than 1,000 lives. While there is a risk with a portfolio of any size that actual yield may be less than expected, we believe
that the risk we face is presently more significant given the relatively low number of insureds underlying our potential NIBs as compared
to rating agency recommendations. Even if our portfolio reaches a size that is actuarially stable according to the rating agencies, we
still may experience differences between the actuarial models we use and actual mortalities. Differences between our expectations and
actuarial models, and actual mortality results, could have a materially adverse effect on our operating results and cash flow. In such
a case, we would face liquidity problems, including difficulties acquiring new NIBs and other life settlement products. Continued or
material failures to meet our expected results could decrease the attractiveness of our securities in the eyes of potential investors,
thereby making it even more difficult to obtain capital needed to acquire additional NIBs and obtain desired diversification and expansion
of the underlying insureds.

The
limited number of sellers of life settlement products in the secondary market may limit the ability to negotiate favorable prices in
the acquisition of such life settlement interests.

Because
we are not currently licensed to purchase life insurance policies directly from the insureds, we rely on re-sellers like Del Mar, PCH
and HFII for such products.

Unless
other sources become available, the ability to purchase the life settlement products desired may be limited. In addition, the limited
number of sellers could limit the ability to negotiate favorable prices to purchase life settlement products, which could reduce profitability.
Furthermore, recent declines in the secondary market for life settlements have limited the availability of pools of life insurance policies,
resulting in increased price competition.

We
do not track