{"url_path":"/sec/sund/10-k/2026/item-1","section_key":"item-1","section_title":"Item 1 Business**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-29","source_url":"https://www.sec.gov/Archives/edgar/data/1171838/0001493152-26-031046-index.html","accession_number":"0001493152-26-031046","cik":"0001171838","ticker":"SUND","issuer_name":"Sundance Strategies, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1171838/0001493152-26-031046-index.html","primary_entity_key":"0001171838","primary_entity_name":"Sundance Strategies, Inc."},"word_count":2653,"has_tables":true,"body_markdown":"**Item\n1. Business**\n\n \n\n**Organizational\nBackground**\n\n \n\nJava\nExpress, Inc., was organized under the laws of the State of Nevada on December 14, 2001, for the purpose of selling coffee and other\nrelated items to the general public from retail coffee shop locations. These endeavors ceased in 2006, and it had no material business\noperations from 2006 until March of 2013. On March 29, 2013, the Company, its newly formed and wholly-owned subsidiary, Anew Acquisition\nCorp., a Utah corporation (“Merger Sub”), and ANEW LIFE, INC., a Utah corporation (“ANEW LIFE”), executed and\ndelivered an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which Merger Sub merged with and into ANEW\nLIFE, ANEW LIFE was the surviving company under the merger and became a wholly-owned subsidiary of the Company on the closing of the\nmerger (the “Merger”). On April 17, 2013, the Company filed a Certificate of Amendment with the Secretary of State of the\nState of Nevada to change its name from “Java Express, Inc.” to “Sundance Strategies, Inc.” Sundance Strategies,\nInc. is referred to as “the Company”, “us”, or “we”.\n\n \n\n**Our\nBusiness**\n\n \n\nOur\nhistorical business model has focused on purchasing or acquiring life insurance policies and residual interests in or financial products\ntied to life insurance policies, including notes, drafts, acceptances, open accounts receivable, and other obligations representing part\nor all of the sales price of insurance, life settlements, and related insurance contracts being traded in the secondary marketplace,\noften referred to as the “life settlements market.”\n\n \n\nWe\ncurrently do not hold life settlement or life insurance policies but, instead, previously held a contractual right to receive the net\ninsurance benefits, or “NIBs”, from a portfolio of life insurance policies held by a third party (“the Owners”\nor “the Holders”). These NIBs represented an indirect, residual ownership interest in a portfolio of individual life insurance\npolicies, and they allowed us to receive a portion of the settlement proceeds from such policies, after expenses related to the acquisition,\nfinancing, insuring and servicing of the policies underlying our NIBs have been paid.\n\n \n\nNIBs\nare generally sold by an entity that holds the underlying life settlement or life insurance policies, either directly or indirectly through\na subsidiary, such an entity is referred to herein as a “Holder.” A Holder, directly or through a wholly owned subsidiary,\npurchases life insurance policies from the insured or on the secondary market and aggregates them into a portfolio of policies. At the\ntime of purchase, the Holder also (i) contracts with a service provider to manage the servicing of the policies until maturity, (ii)\nconsiders purchasing mortality re-insurance (“MRI”) coverage under which payments will be made to the Holder in the event\nthe insurance policies do not mature according to actuarial life expectancies, and (iii) arranges financing to cover the initial purchase\nof the insurance policies, the servicing of the life insurance policies until maturity and the payment of the MRI premiums. The financing\nobtained by the Holder for a portfolio of life settlement or life insurance policies is secured by the insurance policies for which the\nfinancing was obtained. After a Holder purchases policies, aggregates them into a portfolio and arranges for their servicing, MRI coverage\nand financing, then the Holder contracts to sell NIBs related to the policies, which gives the holder of the NIBs the right to receive\nthe proceeds from the settlement of the insurance policies after all of the expenses related to such policies have been paid. When an\ninsurance policy underlying our NIBs comes to maturity, the insurance proceeds are first used to pay expenses associated with such policy.\nOnce all of the expenses have been paid, the Holder will retain a small percentage of the proceeds and then will pay us for the remaining\ninsurance proceeds.\n\n \n\n4\n\n \n\n \n\nDuring\nthe latter part of the fiscal year ended March 31, 2021, we began developing an additional business offering, providing professional\nservices to specialty structured finance groups, bond issuers and life settlement aggregators. We have assembled an experienced team\nfrom the life settlement marketplace, as well as from other areas such as financial services and public financial markets. As a professional\nservices provider, we apply industry best practices to advise on the selection of specific portfolios of life insurance policies that\nare tailored to meet the needs of its clients. Our clients may include bond issuers, bond investors, or other structured finance product\nissuers. We develop strategies and methodologies which include the acquisition of life insurance portfolios, then use common structured\nfinance techniques and proprietary analytics to structure bonds for issuances, including principal protected bonds. Our goal is to deliver\nlong-term value and profitability to shareholders by growing our professional services business and asset base, resulting in the ability\nto pay dividends to its shareholders.\n\n \n\nDuring\nthe latter part of the year ended March 31, 2021, we began working closely with bond placement agents and aggregators to establish various\naspects of a proprietary, investment grade bond offering. In this arrangement, we participate as the sole originator in the role of structuring\nand advising on the structure of the proprietary bond instrument. Included in the role of structuring financial assets, we use proprietary\nanalytics to establish the makeup of the rated instrument, including but not limited to life settlement assets (life insurance policies)\nand managed cash, and implement a process of selective assembly of the underlying assets and cash management that will meet the policy\nrequirements and analytics. We provide current and ongoing resources for all analytics, as well as advisement support for the investment\nand non-investment grade ratings for the managed asset pool and the managed cash accounts. In our advisory role, we are reimbursed for\nall expenses associated with the structuring and preparation of any bond offering, will receive an advisory payment upon the closing\nof any bond offering, and then will hold residual rights on the balance of assets once the bond is retired.\n\n \n\n**Life\nSettlements Market**\n\n \n\nThere\nare a number of reasons a policy owner may choose to sell his or her life insurance policy. The policy owner may no longer need or want\nhis or her policy, he or she may wish to purchase a different kind of insurance policy, premium payments may no longer be affordable\nor the policy owner may need cash to fund healthcare or other expenses. In particular, policy holders 65 years of age and older and their\nfamilies are faced with a variety of challenges as they seek to address their post-retirement financial needs and selling one’s\nlife insurance policy may provide a unique and valuable financial solution to such challenges. From the early 2000s through 2008, the\nmarket for newly originated life settlements grew from virtually no activity to a peak of an estimated $12 billion of face value of U.S.\nlife settlement policies settled annually in 2007 and 2008. Economic factors slowed the growth in 2009, when an estimated $8 billion\nof face value of U.S. life insurance was settled and growth has continued to decline since that time. Participants in the secondary life\nsettlement market have included major insurance companies which have purchased available pools of policies for their own investment,\nportfolio aggregators, private equity funds, and independent third-party investors.\n\n \n\n**Predictability\nof Future Cash Flows**. Predictability of future cash flows is one of the biggest challenges facing companies engaged in the life\nsettlements industry. If a Holder is not able to adequately predict future cash flows and does not continually have enough cash to make\na policy portfolio’s premium payments, the policies in the portfolio may lapse and we may lose our right to receive the proceeds\nfrom the settlement of the policies at maturity. Prediction of future cash flow requires the use of financial models, which rely on various\nassumptions. These assumptions include the amount and timing of projected net cash receipts, expected maturity events, counterparty performance\nrisk, changes to applicable regulation of the investment, shortage of funds needed to maintain the asset until maturity, changes in discount\nrates, life expectancy estimates and their relation to premiums, interest, and other costs incurred, among other items. These uncertainties\nand contingencies are difficult to predict and are subject to future events that may impact our estimates and interest income. As a result,\nactual results could differ significantly from those estimates. If projections of life expectancies are wrong, Holders may be obligated\nto service the related insurance policies for longer than expected, thereby increasing their costs and reducing the net insurance benefit\navailable.\n\n \n\n**Financing\na portion of the purchase price**. Financing a portion of the purchase price of a policy portfolio allows the Holder to leverage\nits investment and create a larger and diversified policy portfolio. When making an investment in a portfolio of life insurance policies,\na Holder utilizes actuarial tables to determine when the policies in the portfolio can be expected to come to maturity. However, the\nHolder assumes the risk that the policies in the portfolio will come to maturity later than was predicted by the actuarial tables used\nat the time of purchase. The life expectancies provided by the actuarial tables are based on actual death rates in large populations\nof individuals with similar demographic characteristics. Thus, the more policies underlying a policy portfolio, the more reliable the\nuse of actuarial tables becomes. In other words, the larger the policy portfolio, the more closely the underlying insureds would be expected\nto, on average, follow actuarial predictions and the lower the risk associated with future cash flows will be. Because of the general\nuncertainty of maturity of life insurance policies, financing for their purchase and servicing has historically been difficult to secure.\nThe lender (the “Holders’ Lender”) has provided funding to the Holders to finance the purchase of the insurance policies.\nWe believe there are few lenders within this market.\n\n \n\n5\n\n \n\n** **\n\n**Mortality\nRe-Insurance (MRI) Coverage**. Because of the uncertainty of maturity of insurance policies the Holders had, on occasion, previously\ncontracted with an insurance provider for MRI coverage. MRI coverage typically provides guaranteed cash flow based on the expected death\nbenefits of the pool of policies being insured calculated at the issuance of the coverage, thereby providing credit enhancement to any\nbank providing financing to a Holder. The term of the MRI policies is usually 15 years. Any claims paid by the MRI to the Holder must\nbe paid back to the MRI provider out of death benefit proceeds from the pool of policies being insured when such death benefit proceeds\nare eventually received. This enables the Holder to receive a smoother cash flow from a pool of policies over time and avoid “lumpiness”\nin the cash flows that would otherwise be more pronounced in the absence of the MRI coverage. Any claim payment balances would accrue\ninterest, typically at a spread of 250 basis points over LIBOR, to the extent they remain outstanding. The MRI coverage is obtained by\npaying an MRI premium, typically equal to 2% of the cumulative death benefit of the covered life insurance policies, at the outset of\nthe coverage and, depending on the specific terms of the MRI policy, possibly an additional premium amount at a predetermined time during\nthe effective coverage period (the “Commitment Fee”), which is typically 1% of the cumulative death benefits of the covered\npolicies. The insurer under the MRI policy typically must approve the sale of any life insurance policies covered by the MRI policy if\nsuch sale does not result in the full repayment of any outstanding recovery amounts. It is our understanding that there is only one MRI\nProvider. While the MRI coverage is relatively expensive, we believe that insurance policies that MRI covers have less volatility, are\nmore liquid and should achieve higher values for purposes of financing and secondary market sales.\n\n \n\nFinancing\na policy portfolio’s premium payments gives a Holder additional cash needed to satisfy the premium obligations of its portfolio.\nIn addition, obtaining an MRI increases the probability that the Holder will receive future cash flows in the event that the underlying\ninsureds live longer than expected. This combination provides the Holder with sufficient liquidity to stabilize its cash position.\n\n \n\n**Life\nSettlement Purchasing Guidelines as an Advisor**\n\n \n\nOur\nobjective is to advise and assist entities as they acquire life insurance policies and portfolios that will produce returns in excess\nof all purchase, financing, servicing and insuring costs incurred by the Holder. The guidelines we generally follow regarding the purchase\nof policies and portfolios include:\n\n \n\n \n●\nthe\ninsured is 75 years old or older;\n\n \n●\nall\nNIBs relate to U.S. Universal Life Insurance policies;\n\n \n●\nall\nunderlying insurance policies have qualified for financing that will cover at least four years of premiums;\n\n \n●\neach\npolicy must first be reviewed by the legal due diligence team of the lender providing financing for the acquisition and servicing\nof the life insurance policies, second by the MRI company’s due diligence team and then finally approved by our due diligence\nprocesses;\n\n \n●\nall\npolicies must qualify for MRI; and\n\n \n●\nthe\nprojected proceeds payable on each life insurance policy upon the death of the underlying insured are projected to exceed the costs\nto service the life insurance policies, amounts due to creditors secured by such life insurance policy, such as the Holders’\nLender or the MRI provider, other costs and fees incurred by the Holder and the percentage of the remaining insurance benefit retained\nby the Holder\n\n \n\n**Competition**\n\n \n\nWe\nencounter significant competition in the life settlements industry generally from numerous companies, including hedge funds, investment\nbanks, secured lenders, specialty life insurance finance companies and life insurance companies themselves who purchase life settlements.\nMany of these competitors have greater financial and other resources than we do and may have a significantly lower cost of funds because\nthey have greater access to insured deposits or the capital markets. Moreover, some of these competitors have significant cash reserves\nand can better fund shortfalls in collections that might have a more pronounced impact on companies such as ours. They also have greater\nmarket share. For example, Berkshire Hathaway purchased a portfolio of $300 million (face value) in life insurance policies in 2013.\nAccording to The Deal Pipeline, total life settlement transactions grew to $2.57 billion (face value) in 2013. In 2014 transaction volumes\nwere reported higher by market participants in all major segments of the industry and Conning & Co. forecast an average annual gross\nmarket potential for life settlements of $180 billion from 2014-2023, with an average volume of approximately $3 billion per year in\nlife settlement transactions.\n\n \n\nA\nreport from the AAP Life Settlement Market Update indicated that internal rates of return for life settlement transactions conducted\nin 2013 were in the high teens, an attractive return at a time when fixed income and other hedge positions were delivering minimal rates\nof return. If certain better-financed companies make a significant effort to compete against our business or the secondary market in\ngeneral, prices paid for existing portfolios of life insurance policies may rise and our ability to purchase satisfactory assets may\ndecline. In addition, recent shrinking of the market for life settlements has resulted in fewer available pools of insurance policies.\nAs a result, price competition for the remaining pools has increased. Our limited resources prohibit us from competing for larger pools.\nThese factors could adversely affect our profitability by reducing our return on investment or increasing our risk.\n\n \n\n6\n\n \n\n** **\n\n**Employees**\n\n \n\nOn\nMarch 31, 2026, we had one full-time employee: Randall F. Pearson, our President.\n\n \n\n**Available\nInformation**\n\n \n\nOur\nwebsite address is www.sundancestrategies.com. We make available free of charge on the Financials portion of our website, our annual\nreports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished\npursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file\nsuch material with, or furnish it to, the Securities and Exchange Commission."}