Company: KPEA
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010699
Chunk: 65

Company: Kun Peng International Ltd.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 65
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 thermal therapy cabin
to wholesalers. Currently, we promote and sell physiotherapy equipment products and our own brand, as well as other popular brands, of
preventive health care related products. In November 2023 we also launched the Kun Zhi Jian Mini Program, which is composed of three main
areas: physiotherapy cabin, a customer service center, and an online shopping mall (Kun Zhi Jian). We coordinate with local health service
providers and leverage their health care expertise and technology to provide health screening and consulting services to our customers
and members at the Kun Zhi Jian customer service center. Based on their health conditions, we provide nutritional consulting services
and offer suggestions for our preventive health care products. As of March 31, 2025, our new online platform had approximately 2,869 members.

Cash Transfers Within our Organization

As between the Company and its
subsidiaries, cash will generally be transferred by means of capital contributions and/or interest-free intercompany loans. Cash to be
transferred or settled between the Company and its subsidiaries, on the one hand, and the consolidated VIE and its subsidiaries, on the
other hand, will typically be transferred through payments for fees under our contractual arrangements with the VIE, expense reimbursements,
or intercompany borrowings between the Company or one of its subsidiaries and the consolidated VIE. Any such loans will be interest-free,
unsecured and payable on demand. For more information regarding these contractual arrangements, see Note 3 to our Condensed Consolidated
Financial Statements – “Variable Interest Entities - “VIE” Agreements.” The enforceability and treatment
of the intercompany agreements within our organization, including intercompany borrowings and the contractual arrangements with our VIE,
have not been tested in court. To the extent cash and/or assets in the business are in the PRC and/or Hong Kong or our PRC and/or Hong
Kong entities, such funds and/or assets may not be available to fund operations or for other use outside of the PRC and/or Hong Kong due
to interventions in or the imposition of restrictions and limitations imposed by the PRC government on the ability of the Company or its
subsidiaries to transfer cash and/or assets. There are no tax consequences for intercompany borrowings or the payment for intercompany
services, except for the standard value added taxes and/or income taxes for the revenues and/or profits generated from such services.

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The proceeds of any transactions
within our organization