Company: SDAWW
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036086
Chunk: 68

Company: SunCar Technology Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 68
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 the requirements of Section 404, SunCar may identify other
weaknesses and deficiencies in SunCar’s internal control over financial reporting. If SunCar fails to maintain the adequacy of its
internal control over financial reporting, as these standards are modified, supplemented, or amended from time to time, SunCar may not
be able to conclude on an ongoing basis that it has effective internal control over financial reporting in accordance with Section 404.
Generally speaking, if SunCar fails to achieve and maintain an effective internal control environment, it could result in material misstatements
in SunCar’s financial statements and could also impair SunCar’s ability to comply with applicable financial reporting requirements
and related regulatory filings on a timely basis. As a result, SunCar’s businesses, financial condition, results of operations and
prospects, as well as the trading price of the ordinary shares, may be materially and adversely affected. Additionally, ineffective internal
control over financial reporting could expose SunCar to increased risk of fraud or misuse of corporate assets and subject SunCar to potential
delisting from the stock exchange on which SunCar lists, regulatory investigations and civil or criminal sanctions. SunCar may also be
required to restate its financial statements from prior periods. SunCar will incur increased costs as a result of being a public company.

Upon completion of the Business
Combination, SunCar has become a public company and expect to incur significant legal, accounting, and other expenses. For example, as
a result of being a public company, SunCar has adopted policies regarding internal controls and disclosure controls and procedures. Operating
as a public company will make it more difficult and more expensive for it to obtain director and officer liability insurance, and SunCar
may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage,
or SunCar may not be able to obtain appropriate director and officer liability insurance at all. In addition, SunCar will incur additional
costs associated with its public company reporting requirements. It may also be more difficult for SunCar to attract and retain qualified
persons to serve on its Board of Directors, board committees or as executive officers due to the lack of director and officer insurance
coverage that mitigates the risk and loss of the personal assets of directors and officers. SunCar’s inability to obtain appropriate
director and officer insurance policies could cause a substantial business disruption, adverse reputational impact and regulatory scrutiny
and, as a result, could have a material adverse effect on SunCar’s