Company: KPEA
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010699
Chunk: 105

Company: Kun Peng International Ltd.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 2
Chunk 105
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 over
financial reporting established in the 2013 updated Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on that evaluation, management
concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate
application of U.S. GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of
our internal controls over financial reporting that adversely affected our internal controls and that are considered to be material weaknesses
as described above. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting,
such that there is a reasonable possibility that a material misstatement of the company’s annual or quarterly financial statements
will not be prevented or detected on a timely basis.

Notwithstanding the existence
of these material weaknesses in our internal control over financial reporting, our management believes that the financial statements included
in its reports fairly present in all material respects the Company’s financial condition, results of operations, and cash flows
for the periods presented. We continue to evaluate the effectiveness of our internal controls and procedures on an on-going basis. We
are currently hiring additional personnel in financial reporting and accounting, and we are providing training to newly hired personnel.
In addition, once our cash position improves, we plan to hire an experienced controller and work to build an internal accounting team
with sufficient in-house expertise in U.S. GAAP reporting. However, due to the limited cash flow we are currently having, we cannot assure
you when we will be able to implement those remediation methods.

Because we are a smaller reporting
company, this report does not include an attestation report of our independent registered public accounting firm regarding internal control
over financial reporting.

(b) Changes in internal controls over financial
reporting

There were no changes in our internal
control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934,
as amended) during the fiscal quarter ended March 31, 2025 covered by this report that has materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting other than the facts disclosed above.

 49 

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are currently not involved
in any litigation that