Company: SUND
Filing Date: 2025-06-30
Form Type: 10-K
Source: 0001641172-25-017143
Chunk: 18

Company: Sundance Strategies, Inc.
Filing Date: 2025-06-30
Form: 10-K
Item: Item 1
Chunk 18
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 also result in liquidity issues for the Holders
and corresponding liquidity issues for us. As mentioned above, changes in life expectancies could cause decreases in policy values, which
could result in loan to value violations and violations of large exposure limits.

Holders
may be required to obtain MRI coverage as a condition of our business model, which, if unavailable, could potentially increase our risk
of failure.

The
MRI is a relatively new product and there are no guarantees that the MRI provider will be able to meet the Holders’ coverage needs.
In addition, it is our understanding that there is only one MRI provider. The MRI provider has refused to provide future coverage to
the Holders. Without the MRI coverage, the Holders have limited options when the senior loans mature. The Holders’ Lender has demanded
repayment of all outstanding amounts under the senior loans.

13

The
lapse of life insurance policies will result in the entire loss of our interest in the death benefits from those particular policies.

The
Holders are required to make premium payments on the life insurance policies in order to keep such policies in force. These payments
generally will be made from amounts available to the Holders pursuant to the senior loans, death benefits, and MRI payments, if available.

Actual
results 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