Company: KPEA
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006580
Chunk: 53

Company: Kun Peng International Ltd.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 1
Chunk 53
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 any existing or
future PRC laws and regulations, the Company may be required to restructure its corporate structure and operations in the PRC to comply
with changing and new PRC laws and regulations. In the opinion of management, the likelihood of loss in respect of the Company’s
current corporate structure or the VIE Arrangements is remote based on current facts and circumstances.

    18

Foreign
currency exchange risk

The
value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political
and economic conditions and the foreign exchange policy adopted by the PRC government. It is difficult to predict how market forces or
PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. There remains significant
international pressure on the PRC government to adopt a more flexible currency policy, which could result in greater fluctuation of the
RMB against the U.S. dollar. The Company is a holding company and it relies on dividends paid by the Company’s operating subsidiaries
in China for its cash needs. Any significant revaluation of the RMB may materially and adversely affect its liquidity and cash flows.
To the extent that the Company needs to convert U.S. dollars into RMB for its operations, appreciation of the RMB against the U.S. dollar
would have an adverse effect on the RMB amount the Company would receive. Conversely, if the Company decides to convert RMB into U.S.
dollars for other business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar
amount the Company would receive.

Liquidity
risk

Liquidity
risk is the risk that the Company will encounter difficulty raising liquid funds to meet commitments as they fall due. See “Commitments
and Contingencies” in Note 15. In meeting its liquidity requirements, the Company continues to focus on increasing its revenue
through the sale of consumer health care products on its online platform, King Eagle Mall, and promoting its own brand of preventive
health care related products on its new online platform to reduce its costs of goods sold, streamlining its overhead costs, or obtaining
financing from its stockholders or directors.

Concentration
of customers and vendors

There
was no revenue from customers that individually represent greater than 10% of the total revenue for the quarters ended December 31, 2024,