Company: KPEA
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010699
Chunk: 78

Company: Kun Peng International Ltd.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 78
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,821 for the six months ended March 31, 2025 and 2024, respectively.

Foreign currency translation adjustment

The functional
currency of our operations in the PRC is Chinese Yuan or Renminbi (“RMB”), while the functional currency of our
operation in Hong Kong is Hong Kong Dollars (“HKD”). The financial statements are translated to U.S. dollars using the
period end rates of exchange for assets and liabilities; equity is translated at historical exchange rates; and average rates of
exchange (for the period) are used for revenues and expenses and cash flows. Transaction gains and/or losses that arise from
exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results
of operations as incurred. As a result of foreign currency translation, which is a noncash adjustment, we reported a foreign
currency translation gain of $240,468 and loss of $48,057 for the six months ended March 31, 2025 and 2024, respectively. This
non-cash gain had the effect of increasing our reported comprehensive gain.

Comprehensive loss

The Company recognized comprehensive
losses in the amounts of $603,416 and $1,179,878 for the six months ended March 31, 2025 and 2024, respectively.

Liquidity and capital resources

As of March 31, 2025 and September
30, 2024, we had  cash and cash equivalents balances of $27,379 and $82,184, respectively.

For the six months ended March 31, 2025, net cash used in operating activities
totaled $3,710. Operating cash outflow was mainly attributable to our net loss of $843,884 and a decrease in amounts due to related parties
of $2,458,960, partially offset by an increase in trade payables of $1,828,116 and other payable from third parties of $1,234,126.

Net cash used in investing activities totaled $38,590 and was related
to the purchase of property, plant, and equipment during the six months ended March 31, 2025.

Net cash used in financing activities totaled $8,734 and was related to
the payment of finance lease liabilities of $107,201, offset by proceeds from bank borrowings of $98,467 during the six months ended March
31, 2025.

The effect of exchange rate change on cash totaled $3,771. The