Company: KPEA
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006580
Chunk: 102

Company: Kun Peng International Ltd.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 1
Chunk 102
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. Based on their
evaluation as of the end of the quarter ended December 31, 2024, our chief executive officer and our chief financial officer and principal
accounting manager, concluded that our disclosure controls and procedures were not effective such that the information relating to our
Company, required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized, and reported
within the time periods specified in SEC rules and forms; and (ii) is accumulated and communicated to our management, including our chief
executive officer, to allow timely decisions regarding required disclosure as a result of the material weaknesses in our internal control
over financial reporting due to the existence of the following material weaknesses:

    ●
    A
    lack of sufficient and adequately trained internal accounting and finance personnel with appropriate understanding of U.S. GAAP and
    SEC reporting requirements;

    ●
    A
    lack of segregation of duties within significant accounts;

    ●
    A
    lack of a functioning audit committee and a majority of outside directors on the Company’s board of directors.

Management’s
Report on Internal Control over Financial Reporting

As
of December 31, 2024, management assessed the effectiveness of our internal control over financial reporting based on the criteria for
effective internal control over financial reporting established in the 2013 updated Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments.
Based on that evaluation, management concluded that, during the period covered by this report, such internal controls and procedures
were not effective to detect the inappropriate application of U.S. GAAP rules as more fully described below. This was due to deficiencies
that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls
and that are considered to be material weaknesses as described above. A material weakness is a deficiency, or a combination of deficiencies,
in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s
annual or quarterly financial statements will not be prevented or detected on a timely basis.

Notwithstanding
the existence of these material weaknesses in our internal control over financial reporting, our management believes that the financial
statements included in its reports fairly present in all material respects the Company’s financial condition, results of operations,
and cash flows for the periods presented. We continue to evaluate the effectiveness of our internal controls and procedures on an