Company: KPEA
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010699
Chunk: 27

Company: Kun Peng International Ltd.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 27
---
 in-house
technology team were not significant. Accordingly, instead of capitalizing the compensation costs of our in-house technology team as research
and development on our Balance Sheet or presenting it as research and development expenses, we included these amounts in employee compensation
and benefit expenses within general and administrative expenses for the quarters ended March 31, 2025 and 2024.

     17 

Selling Expenses

Selling expenses consist primarily
of marketing and promotional service fees to service agents and other costs incurred by our sales and marketing department such as staff
costs, office supplies, and other incidental expenses that are incurred directly to attract or retain customers.

Our selling expenses for the quarters
ended March 31, 2025 and 2024 were $859,397 and $752,214, respectively. We recognized marketing and promotional service expenses when
our service agents performed marketing activities, promotions, and exhibitions for our business and products. For the quarters ended March
31, 2025 and 2024, we recorded marketing and promotional service fees to our service agents in an amount of $495,001 and $494,352, respectively.

Concentration
of Risk

Credit
risk

Financial
instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents
and other receivables. As of March 31, 2025 and September 30, 2024, $177,841 (RMB1,290,539)
and $69,484 (RMB487,611), respectively, were deposited with various major financial institutions located in the PRC. While management
believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.

Historically,
deposits in Chinese banks are secure due to state policy to protect depositor interests. However, China promulgated a Bankruptcy Law in
August 2006 that came into effect on June 1, 2007, which contains a separate article expressly stating that the State Council may promulgate
implementation measures to provide for the bankruptcy of Chinese banks based on the Bankruptcy Law. Under the current Bankruptcy Law,
a Chinese bank may file bankruptcy if it deems itself to be insolvent. In addition, since China’s concession to the World Trade
Organization, foreign banks have been gradually permitted to operate in China and have intensified competition in many aspects, especially
since the opening of the Renminbi business to foreign banks in late 2006.