Company: SDAWW
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036086
Chunk: 19

Company: SunCar Technology Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 19
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 be sold exclusively through SunCar; and (4) increasingly monetize the management tech (SaaS) we provide for small business
partners. Although we do not expect our profit margin to decrease as a result of our latest business growth strategy, given that the strategy
does not require a significant increase in capital expenditures, we may not succeed in achieving one or more of the goals under our growth
strategy and it may cost us more expenses to achieve them than we anticipate. If we incur substantial expenses for implementing the plan
without being able to achieve the anticipated business growth and expansion, our operating and financial results and our business prospects
may be materially and adversely affected.

Our business is subject to seasonality.

In our auto eInsurance business,
our revenue (i. e., commissions from insurance companies) is subject to quarterly fluctuations as a result of, among other factors, the
seasonality of our business, the timing of policy renewals of individual policy owners and the net effect of new and lost business. During
any given year, our revenue derived from distribution of insurance products is generally lower during the first quarter. The factors that
cause such quarterly variations are not within our control. Specifically, change of end-consumer demand, timing of renewals, cancellations
of insurance policies would cause seasonal fluctuations in our results of operations. On the other hand, revenue derived from our auto
service business in any given year also exhibits seasonality generally, and is generally highest in the second quarter and the fourth
quarter, mainly resulting from the expiry of reward points in our enterprise customers’ reward programs or customer loyalty programs
and the promotional activities launched by our major customers in June and December of each year. In addition, changes in certain of our
expenses do not necessarily correspond with such fluctuations. For example, we spend on marketing activities, staff recruitment and training,
and product development throughout the year, and we pay rent for our facilities based on the terms of the lease agreements. We may also
incur significant costs for our information technology systems and enhancements and upgrades of our apps from time to time in support
of our business developments. We expect to continue to experience seasonal fluctuations in our revenue and results of operations. These
fluctuations could result in volatility in our results of operations. As a result, you may not be able to rely on quarterly comparisons
of our operating results as an indication of our future performance.

Any significant disruption in services on
our apps, websites or computer systems, including events beyond our control, could materially and