Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 656

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 1A
Chunk 656
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 be engaged. Consequently, we conduct certain of our operations
and businesses in the PRC through our VIE. Our VIE Agreements give us effective control over King Eagle VIE and enable us to obtain substantially
all of the economic benefits arising from it as well as consolidate its financial results in our results of operations. Although the
structure we have adopted is commonly adopted by comparable companies in China, the PRC government may not agree that these arrangements
comply with PRC licensing, registration, or other regulatory requirements, with existing policies, or with requirements or policies that
may be adopted in the future.

51

KPIL,
KP International Holding, and KP (China) are considered foreign investors or foreign invested enterprises under PRC law. As a result,
KPIL, KP International Holding, and KP (China) are subject to certain limitations under PRC law on foreign ownership of Chinese companies.
These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcement may involve
substantial uncertainty. The effectiveness of newly enacted laws, regulations, or amendments may be delayed, resulting in detrimental
reliance by foreign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.

We
have been advised by our PRC counsel that the ownership structures of our PRC subsidiary and our VIE in China do not violate any applicable
PRC law, regulation, or rule currently in effect; and that the contractual arrangements between King Eagle (China), King Eagle VIE, and
its equity holders governed by PRC law are valid, binding, and enforceable in accordance with their terms and applicable PRC laws and
regulations currently in effect. However, our PRC counsel has also advised us that there are substantial uncertainties regarding the
interpretation and application of current PRC laws, rules, and regulations. 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. Accordingly, the PRC regulatory
authorities and PRC courts may in the future take a view that is contrary to the opinion of our PRC legal counsel.

The
PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and
other licenses, and requiring actions necessary for compliance. In