Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 515

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 1
Chunk 515
---
 any dividend we issue that will be
exchanged into U.S. dollars, as well as earnings from, and the value of, any U.S. dollar-denominated investments we make in the future.

Since
July 2005, the RMB has no longer been pegged to the U.S. dollar. Although the People’s Bank of China regularly intervenes in the
foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly
in value against the U.S. dollar in the medium to long term. Moreover, it is possible that in the future PRC authorities may lift restrictions
on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

Very
limited hedging transactions are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered
into any hedging transactions. While we may enter into hedging transactions in the future, the availability and effectiveness of these
transactions may be limited, and we may not be able to successfully hedge our exposure at all. In addition, our foreign currency exchange
losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies.

Restrictions
under PRC law on our subsidiaries’ ability to make dividend payments and other distributions could materially and adversely affect
our ability to grow, make investments or acquisitions that could benefit our business, pay dividends to you, and otherwise fund and conduct
our business.

Substantially
all of our sales are earned by our VIE, which makes payments to King Eagle (China), one of our PRC subsidiaries, pursuant to the Consulting
Service Agreement. As a holding company, we rely on dividends and other distributions on equity paid by our subsidiaries for our cash
and financing requirements. However, to the extent that cash is in our Hong Kong or PRC subsidiaries, there is a possibility that the
funds may not be available to fund our operations or for other uses outside of the PRC or Hong Kong due to interventions or the imposition
of restrictions and limitations by the PRC or the Hong Kong government on the ability to transfer cash. In addition, if any of
our subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict its ability to pay dividends
to us. As of the date of this Annual Report, our subsidiaries have not experienced any difficulties or limitations on their ability to
transfer cash between each other; nor do they