Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 28

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 3
Chunk 28
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 and Development expenses,
we included these amounts in Employee Compensation and Benefit expenses within General and Administrative expenses for the years ended
September 30, 2024 and 2023.

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 years ended September 30, 2024 and 2023 were $1,655,024 and $3,316,631,
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 years ended September 30, 2024 and 2023, we recorded marketing and promotional
service fees to our service agents in an amount of $1,655,024 and $2,362,078, 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 September 30, 2024 and 2023, $69,484 (RMB487,611)
and $428,088 (RMB3,123,333), 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. Therefore, the risk of bankruptcy at the institutions
that the Company maintains deposits has increased. In the event of bankruptcy, the Company is unlikely to reclaim its deposits in full
since it is