Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 488

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 1
Chunk 488
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 VIE and consequently significantly affect the
financial performance of the VIE and our Company as a whole.

(xi)
The PRC regulatory authorities could disallow the VIE structure, which would likely result in a material change in our operations and
cause the value of our securities, including those we have or may in the future register for sale, to significantly decline or become
worthless.

If
the PRC government determines that our agreements with King Eagle (Tianjin) VIE or our VIE structure do not comply with PRC regulations,
or if these regulations change or are interpreted differently in the future, our securities may decline in value or become worthless
if the determinations, changes, or interpretations result in our inability to assert contractual control over the assets of King Eagle
VIE, as King Eagle VIE and its subsidiary conduct all or substantially all of our operations.

53

Our
arrangements with our VIE and its shareholders may be subject to scrutiny by the PRC tax authorities. Any adjustment of related party
transaction pricing could lead to additional taxes, and therefore could have an adverse effect on our income and expenses.

The
tax regime in China is rapidly evolving and there is significant uncertainty for taxpayers in China as PRC tax laws may be interpreted
in significantly different ways. The PRC tax authorities may assert that we or our subsidiaries or VIE, or its equity holders, owe and/or
are required to pay additional taxes on previous or future revenue or income. In particular, under applicable PRC laws, rules, and regulations,
arrangements and transactions among related parties, such as the contractual arrangements with our VIE, may be subject to audit or challenge
by the PRC tax authorities. We could face material and adverse tax consequences if the PRC tax authorities determine that our agreements
with our VIE and its shareholders were not entered into based on arm’s length negotiations. As a result, they may adjust our income
and expenses for PRC tax purposes in the form of a transfer pricing adjustment. Such an adjustment may require that we pay additional
PRC taxes plus applicable penalties and interest, if any.

Our
current corporate structure and business operations may be substantially affected by the newly enacted Foreign Investment Law.

On
March 15, 2019, the National People’s Congress promulgated the Foreign Investment Law, which took effect on January 1, 2020. Since
it is relatively new, substantial uncertainties exist in relation to its interpretation and implementation. The Foreign Investment Law