Company: KPEA
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006580
Chunk: 43

Company: Kun Peng International Ltd.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 1
Chunk 43
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 14, 2025.

The
condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United
States of America. This basis of accounting involves the application of accrual accounting and, consequently, revenues and gains are
recognized when earned and expenses and losses are recognized when incurred. The condensed consolidated financial statements are expressed
in U.S. dollars.

Principles
of Consolidation

The
condensed consolidated financial statements include the financial statements of the Company, its subsidiaries and its variable interest
entity (“VIE”). All significant intercompany transactions and balances within the Company have been eliminated upon consolidation.

    12

Use
of Estimates and Assumptions

The
preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles requires management
to make estimates and assumptions that impact the presented amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the presented amounts of revenues and expenses during the period. Actual results
may differ from those estimates. Significant estimates during the quarters ended December 31, 2024 and 2023 include the collectability
of receivables, the useful lives of long-lived assets and intangibles, assumptions used in assessing impairment of long-lived assets,
valuation of accruals for expenses, and tax due.

Going
Concern

The
accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted
in the United States of America which contemplate continuation of the Company as a going concern. The going-concern basis assumes that
assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed on the financial statements.
The Company’s ability to continue as a going concern depends on the liquidation of its current assets and business developments.
In assessing the Company’s liquidity, the Company monitors and analyzes its cash and cash equivalents and its operating and capital
expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses, and capital
expenditure obligations. For the quarter ended December 31, 2024, the Company incurred cash inflows from operating activities of $45,864,
the Company incurred a net loss of $651,007, and the Company had negative working capital of $8,198,139. For the fiscal year ended September
30, 2024, the Company incurred cash inflows from operating activities of $17,880, the Company incurred a net loss of $1,991