Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 431

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 1
Chunk 431
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 and members of the board of directors)
and that have the right to unilaterally remove those decision-makers are deemed to have the power to direct the activities of a VIE.
To assess whether we have the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially
be significant to the VIE, we consider all of our economic interests that are deemed to be variable interests in the VIE. This assessment
requires us to apply judgment in determining whether these interests, in the aggregate, are considered potentially significant to the
VIE.

There
are uncertainties associated with the VIE structure as the PRC has not yet ruled on its legality nor has the validity of VIE arrangements
been tested in a court of law. Some of these uncertainties are as follows:

    (i)
    Our
    contractual arrangements may not be as effective in providing us with operational control, and shareholders of the VIE may fail to
    perform their obligations under the contractual arrangements.

    (ii)
    We
    may incur substantial costs to enforce the terms of the arrangements with the VIE.

    (iii)
    The
    legality and enforceability of the contractual arrangements by and between King Eagle (China) and the VIE have not been tested in
    a court of law in China.

    (iv)
    The
    equity holders, directors and executive officers of the VIE, as well as our employees who execute other strategic initiatives, may
    have potential conflicts of interest with the Company.

    (v)
    There
    are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules
    regarding the status of the Company with respect to the contractual arrangements with the VIE.

    (vi)
    It
    is uncertain whether any new PRC laws or regulations relating to VIE structures will be adopted or, if adopted, what they would provide.

    (vii)
    If
    we or our VIE is found to be in violation of any existing or future PRC laws or regulations, or fails to obtain or maintain any of
    the required licenses, permits, registrations, or approvals, the relevant PRC regulatory authorities would have broad discretion
    to take action in dealing with such violations or failures.

    (viii)
    If
    the PRC government finds that the agreements that establish the VIE structure for operating our business do not comply with PRC laws
    and regulations, or