Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 686

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 1A
Chunk 686
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more stringent restrictions on the convertibility of the RMB.

67

Fluctuations
in exchange rates could adversely affect our business and the value of our securities.

The
value of our shares will be indirectly affected by the foreign exchange rate between the U.S. dollar and RMB and between those currencies
and other currencies in which our sales may be denominated. Appreciation or depreciation in the value of the RMB relative to the U.S.
dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business
or results of operations. Fluctuations in the exchange rate will also affect the relative value of any dividend we issue that will be
exchanged into U.S. dollars, as well as earnings from, and the value of, any U.S. dollar-denominated investments we make in the future.

Since
July 2005, the RMB has no longer been pegged to the U.S. dollar. Although the People’s Bank of China regularly intervenes in the
foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly
in value against the U.S. dollar in the medium to long term. Moreover, it is possible that in the future PRC authorities may lift restrictions
on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

Very
limited hedging transactions are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered
into any hedging transactions. While we may enter into hedging transactions in the future, the availability and effectiveness of these
transactions may be limited, and we may not be able to successfully hedge our exposure at all. In addition, our foreign currency exchange
losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies.

Restrictions
under PRC law on our subsidiaries’ ability to make dividend payments and other distributions could materially and adversely affect
our ability to grow, make investments or acquisitions that could benefit our business, pay dividends to you, and otherwise fund and conduct
our business.

Substantially
all of our sales are earned by our VIE, which makes payments to King Eagle (China), one of our PRC subsidiaries, pursuant to the Consulting
Service Agreement. As a holding company, we rely on dividends and other distributions on equity paid by our subsidiaries for our cash
and financing requirements. However, to the extent that