Company: SUND
Filing Date: 2025-06-30
Form Type: 10-K
Source: 0001641172-25-017143
Chunk: 3

Company: Sundance Strategies, Inc.
Filing Date: 2025-06-30
Form: 10-K
Item: Item 1
Chunk 3
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 facing companies engaged in the life
settlements industry. If a Holder is not able to adequately predict future cash flows and does not continually have enough cash to make
a policy portfolio’s premium payments, the policies in the portfolio may lapse and we may lose our right to receive the proceeds
from the settlement of the policies at maturity. Prediction of future cash flow requires the use of financial models, which rely on various
assumptions. These assumptions include the amount and timing of projected net cash receipts, expected maturity events, counterparty performance
risk, changes to applicable regulation of the investment, shortage of funds needed to maintain the asset until maturity, changes in discount
rates, life expectancy estimates and their relation to premiums, interest, and other costs incurred, among other items. These uncertainties
and contingencies are difficult to predict and are subject to future events that may impact our estimates and interest income. As a result,
actual results could differ significantly from those estimates. If projections of life expectancies are wrong, Holders may be obligated
to service the related insurance policies for longer than expected, thereby increasing their costs and reducing the net insurance benefit
available.

Financing
a portion of the purchase price. Financing a portion of the purchase price of a policy portfolio allows the Holder to leverage
its investment and create a larger and diversified policy portfolio. When making an investment in a portfolio of life insurance policies,
a Holder utilizes actuarial tables to determine when the policies in the portfolio can be expected to come to maturity. However, the
Holder assumes the risk that the policies in the portfolio will come to maturity later than was predicted by the actuarial tables used
at the time of purchase. The life expectancies provided by the actuarial tables are based on actual death rates in large populations
of individuals with similar demographic characteristics. Thus, the more policies underlying a policy portfolio, the more reliable the
use of actuarial tables becomes. In other words, the larger the policy portfolio, the more closely the underlying insureds would be expected
to, on average, follow actuarial predictions and the lower the risk associated with future cash flows will be. Because of the general
uncertainty of maturity of life insurance policies, financing for their purchase and servicing has historically been difficult to secure.
The lender (the “Holders’ Lender”) has provided funding to the Holders to finance the purchase of the insurance policies.
We believe there are few lenders within this market.

5

Mortality
Re-Insurance (MRI