Company: SDAWW
Filing Date: 2025-02-04
Form Type: 6-K
Source: 0001213900-25-010076
Chunk: 8

Company: SunCar Technology Group Inc.
Filing Date: 2025-02-04
Form: 6-K
Chunk 8
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 Balances

Timing of revenue recognition may differ from
the timing of invoicing to customers. Accounts receivable represent revenue recognized for the amounts invoiced and/or prior to invoicing
when the Group has satisfied its performance obligation and has an unconditional right to the payment. Contract assets represent the Group’s
right to consideration in exchange for goods or services that the Group has transferred to a customer. The Group has no contract assets
as of December 31, 2023 and September 30, 2024.

The contract liabilities consist of deferred revenue,
which represents the billings or cash received for services in advance of revenue recognition and is recognized as revenue when the performance
obligation is satisfied. The Group’s deferred revenue amounted to $ and $ as of December 31, 2023 and September 30, 2024,
respectively. As of December 31, 2023 and September 30, 2024, the Group recognized $ and $ that was included in deferred revenue
balance at January 1, 2023 and 2024, respectively.

| (g). | Share-based compensation |

The Group grants restricted share units (“RSUs”)
of the Company and its subsidiary, SunCar Online, to eligible employees and management. The Group accounts for share-based awards issued
to employees in accordance with ASC Topic 718 Compensation – Stock Compensation. The Group recognizes compensation cost for an equity
classified award using the straight-line method over the applicable vesting period based on the fair value of restricted shares granted
on the date of the grant. Awards of subsidiary equity is recognized in “non-controlling interest” in the consolidated entity.

The consideration for the business combination
closed on May 17, 2023 included totally earnout shares (“Earnout Shares”) granted to the management upon the achievement
of revenue targets in 2022, 2023 and 2024. Earnout Shares in 2022 was accounted for as part of the consideration of the business combination.
The Group recognizes Earnout Shares in 2023 and 2024 for an equity classified award using the graded vesting method over the applicable
vesting period based on the fair value of the Earnout Shares on the grant date.

F-10

| (h). | Foreign currency transactions and translations |

The Group’s principal country of operations
is the PRC. The financial position and results of its operations are determined using RMB, the local currency, as the functional currency.
The Group’s financial statements are reported