Company: KPEA
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006580
Chunk: 97

Company: Kun Peng International Ltd.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 1
Chunk 97
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43

Net
loss

As
a result of the factors discussed above, for the three months ended December 31, 2024 and 2023, our net loss amounted to $651,007 and
$534,806, respectively.

Foreign
currency translation adjustment

The
functional currency of our operations in the PRC is Chinese Yuan or Renminbi (“RMB”), while the functional currency of our
operation in Hong Kong is Hong Kong Dollars (“HKD”). The financial statements are translated to U.S. dollars using the period
end rates of exchange for assets and liabilities; equity is translated at historical exchange rates; and average rates of exchange (for
the period) are used for revenues and expenses and cash flows. Transaction gains and/or losses that arise from exchange rate fluctuations
on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. As
a result of foreign currency translation, which is a noncash adjustment, we reported a foreign currency translation gain of $281,895
and loss of $145,966 for the three months ended December 31, 2024 and 2023, respectively. This non-cash loss had the effect of increasing
our reported comprehensive loss.

Comprehensive
loss

We
recognized a comprehensive loss of $369,112 for the three months ended December 31, 2024 compared to a comprehensive loss of $680,772
for the same period in 2023.

Liquidity
and capital resources

As
of December 31, 2024 and September 30, 2024, we had a cash and cash equivalents balance of $207,391 and $82,184, respectively.

For
the three months ended December 31, 2024, net cash provided by operating activities totaled $40,503. Operating cash outflow was mainly
attributable to our net loss of $651,007 and a decrease in operating lease liabilities of $88,601, partially offset by an increase in
amounts due to related parties of $248,808 and other payable from third parties of $79,040.

Net
cash used in investing activities totaled $11,070 and was related to the purchase of property, plant and equipment of $38,811 and
the purchase of an intangible asset of $77, offset by the disposal of an associated company of $27,818 during the three months ended December
31, 2024.

Net
cash provided by