Company: SUND
Filing Date: 2025-06-30
Form Type: 10-K
Source: 0001641172-25-017143
Chunk: 104

Company: Sundance Strategies, Inc.
Filing Date: 2025-06-30
Form: 10-K
Item: Item 1A
Chunk 104
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 concentrations of pre-existing medical conditions of insureds in our guidelines for purchasing life settlement products.

Concentrations
of pre-existing medical conditions in insureds could affect the valuation of the portfolios that such policies underlie. We do not track
concentrations of pre-existing medical conditions in purchases of life settlement products. Thus, the valuation of such interests and
our estimates of cash flows therefrom could be inaccurate.

If
life settlement products are determined to be “securities,” Holders may be required to register as an investment company
under the Investment Company Act, which would substantially increase SEC reporting costs and oversight of a Holder’s business operations.

On
July 22, 2010, the SEC released a Staff Report by the Life Settlements Task Force that recommended the SEC consider recommending to Congress
that it amend the definition of “security” under the federal securities laws to include life settlement policies as securities.
One U.S. Congressman has sought to introduce a bill to make such amendment. While that attempt did not result in any action, there can
be no assurance that such a bill will not be passed at some future date. If federal securities laws are indeed amended to include such
policies within the definition of “security,” or if courts with relevant jurisdiction interpret existing securities laws
to that effect, our ability to operate our business under our current business model may be constrained by additional regulatory requirements
under the Securities Act, the Exchange Act and the Investment Company Act.

14

Such
requirements could, among other things, limit our or Holder’s ability to change investment policies without stockholder approval,
prohibit our acquisition of assets from an affiliate without SEC approval, limit leveraging of our assets to one-third of our total asset
value, require accounting for all derivatives as a leverage of assets to the extent that they create an obligation on our part to pay
out assets to a counterparty ahead of our stockholders and generally require 40% of our directors to be independent directors. In addition,
intermediaries used to purchase life settlement products may be required to register as broker-dealers or registered investment advisers
and would otherwise be subject to oversight by the SEC and the Financial Industry Regulatory Authority, which require adherence to numerous
rules and regulations. Such regulations could substantially increase our compliance and reporting costs, which would negatively affect
profitability.

There
is poor liquidity in the secondary market for life insurance and life settlements.

The
secondary market for life insurance policies and life settlements is relatively illiquid, and it is often difficult to