Company: KPEA
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006580
Chunk: 60

Company: Kun Peng International Ltd.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 1
Chunk 60
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as voting rights and the right to receive the expected residual returns of the entity or the obligation to absorb the expected losses
of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary
and must consolidate the VIE. King Eagle (China) is deemed to have a controlling financial interest and be the primary beneficiary of
King Eagle (Tianjin) because it has both of the following characteristics:

    (1)
    The power to
    direct the activities of King Eagle (Tianjin) that most significantly impact such entity’s economic performance, and

    (2)
    The obligation to absorb
    losses of, or the right to receive benefits from, King Eagle (Tianjin) that could potentially be significant to such entity.

As
of the date of this Quarterly Report, King Eagle (Tianjin) has established six subsidiaries: King Eagle (Beijing) Technology Co., Ltd,
King Eagle (Huai’an) Health Management Co., Ltd., Kun Zhi Jian (Huai’an) Technology Co., Ltd., Kun Zhi Jian (Shandong)
Health Management Co., Ltd., Chengdu Wenjiang Pengrun Internet Healthcare Co., Ltd and King Eagle (Hangzhou) Health Technology Co., Ltd.,
on December 1, 2022, September 19, 2023, October 26, 2023, January 31, 2024, February 1, 2024 and July 18, 2024, respectively, in the
PRC. King Eagle (Tianjin) is the controlling shareholder under the company laws of the PRC. The binding rights over the VIE’s subsidiaries
in the contractual arrangements between King Eagle (China) and King Eagle (Tianjin) are implicit and indirect and the company laws and
regulations in the PRC governing the business operations of the VIE’s subsidiaries are uncertain.

Pursuant
to the VIE Agreements, the shareholders of King Eagle (Tianjin) have agreed to transfer any dividends, distributions, or other profits
that they receive to King Eagle (China). King Eagle (Tianjin) pays service fees equal to all of its net profit after tax to King Eagle
(China). The VIE Agreements are designed so that King Eagle (Tianjin) operates for the benefit of King Eagle (China) and ultimately the
Company.

Moreover,
King Eagle (Tianjin) has