Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 416

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 1
Chunk 416
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    a significant material impact on our financial performance and the value of our securities. See “Item 1A. Risk Factors - Risks
    Related to Doing Business in China - Our business is subject to complex and evolving laws and regulations regarding privacy and data
    protection” on page 63.

    ●
    The
    Company relies on dividends and other distributions on equity paid by our subsidiaries to fund our cash and financing requirements,
    and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on our financial
    position. King Eagle (China) and it’s VIE’s ability to distribute dividends is based upon their distributable earnings.
    Current PRC regulations permit our PRC subsidiaries to pay dividends to their shareholders only out of their accumulated profits,
    if any, determined in accordance with PRC accounting standards and regulations. In addition, our PRC subsidiaries are required to
    set aside at least 10% of their after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of
    their registered capital. This reserve is not distributable as cash dividends. To the extent that cash derived from our VIE’s
    businesses is in the PRC or Hong Kong, or in a PRC or Hong Kong entity, the funds may not be available to fund operations or for
    other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations by the PRC government
    on the ability of our PRC or Hong Kong subsidiaries, or of our VIE, to transfer cash. The inability of our Hong Kong or PRC subsidiaries
    to pay dividends, for whatever reason, could have a material adverse effect on our financial position and, in turn, on the value
    of our common stock. See “Item 1A. Risk Factors - Risks Related to our Business in China - Restrictions under PRC law on our
    subsidiaries’ ability to make dividend payments and other distributions could materially and adversely affect our ability to
    grow, make investments or acquisitions that could benefit our business, pay dividends to you, and otherwise fund and conduct our
    business” on page 68.

8

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    To address persistent capital outflows and the RMB’s depreciation against the U.S. dollar in the fourth quarter
of 2016, the People’s Bank of China and the State Administration of Foreign Exchange, or SAFE, implemented a