Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 430

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 1
Chunk 430
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 not anticipate any changes to PRC laws in the near future
that may impact our ability to carry out our business in China, no assurances can be made in this regard. See “Risk Factors-Risks
Related to Doing Business in China-Changes in China’s economic, political, or social conditions or government policies could have
a material adverse effect on our business and operations” and “Risk Factors-Risks Related to Doing Business in China-Uncertainties
with respect to the PRC legal system could limit the legal protections available to you and us.” Moreover, the binding rights over
the VIE’s subsidiaries in the contractual arrangements between King Eagle (China) and King Eagle (Tianjin) are implicit and indirect
and the company laws and regulations in the PRC governing the business operations of the VIE’s subsidiaries are uncertain. For
a detailed description of the risks associated with our corporate structure and the contractual arrangements that support our corporate
structure, see “Risk Factors-Risks Related to Our Commercial Relationship with our VIE.”

The
Company is the primary beneficiary of a variable interest entity (“VIE’), King Eagle (Tianjin) Technology Co., Ltd. Under
U.S. GAAP, the Company is required to consolidate the assets and liabilities of the VIE on its consolidated financial statements. When
we obtain a variable interest in another entity, we assess at the inception of the relationship and upon occurrence of certain significant
events whether the entity is a VIE and, if so, whether we are the primary beneficiary of the VIE based on our power to direct the activities
of the VIE that most significantly impact the VIE’s economic performance and our obligation to absorb losses or the right to receive
benefits from the VIE that could potentially be significant to the VIE.

16

To
determine whether a variable interest that we hold could potentially be significant to the VIE, we consider both qualitative and quantitative
factors regarding the nature, size and form of our involvement with the VIE. To assess whether we have the power to direct the activities
of a VIE that most significantly impact the VIE’s economic performance, we consider all the facts and circumstances, including
our role in establishing the VIE and our ongoing rights and responsibilities. This assessment includes identifying the activities that
most significantly impact the VIE’s economic performance and identifying which party, if any, has power over those activities.
In general, the parties that make the most significant decisions affecting the VIE (management