Company: KPEA
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010699
Chunk: 29

Company: Kun Peng International Ltd.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 29
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 adverse effect on the RMB amount the Company would receive. Conversely, if the Company decides to convert RMB into U.S.
dollars for other business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount
the Company would receive.

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Liquidity
risk

Liquidity
risk is the risk that the Company will encounter difficulty raising liquid funds to meet commitments as they fall due. See “Commitments
and Contingencies” in Note 16. In meeting its liquidity requirements, the Company continues to focus on increasing its revenue through
the sale of consumer health care products on its online platform, King Eagle Mall, and promoting its own brand of preventive health care
related products on its new online platform to reduce its costs of goods sold, streamlining its overhead costs, or obtaining financing
from its stockholders or directors.

Concentration of
customers and vendors

There was no
revenue from customers that individually represent greater than 10%
of the Company’s total revenue for the six months ended March 31, 2025 and 2024.

For the six
months ended March 31, 2025, one major vendor accounted for 69.5% of the Company’s total cost of sales.

For the six months ended March
31, 2024, one major vendor accounted for 10.7% of the Company’s total cost of sales.

Income Taxes

We account for income taxes using
the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial
reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences
are expected to reverse. The Company records a valuation allowance against deferred tax assets if, based on the weight of available evidence,
it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of
a change in tax rates is recognized in income in the period that includes the enactment date.

We apply ASC 740, Accounting
for Income Taxes, to account for uncertainty in income taxes and the evaluation of a tax position is a two-step process. The first
step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution
of any related appeals or litigation based on the technical merits of that position. The second step is