Company: SDAWW
Filing Date: 2025-10-27
Form Type: 6-K
Source: 0001213900-25-102611
Chunk: 5

Company: SunCar Technology Group Inc.
Filing Date: 2025-10-27
Form: 6-K
Chunk 5
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net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each 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.            |

F-8 SUNCAR TECHNOLOGY GROUP INC NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In U.S. Dollar thousands, except share and per share data)

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.