Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 524

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 1
Chunk 524
---
 local regulator.

Risks
Related to the Market for Our Securities

Our
common stock is quoted on the OTC market, which may have an unfavorable impact on our stock price and liquidity.

Our
common stock is quoted on the OTC market. The OTC market is a significantly more limited market than the New York Stock Exchange or NASDAQ.
The quotation of our shares on the OTC market may result in a less liquid market available for existing and potential stockholders to
trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our
ability to raise capital in the future. We plan to list our common stock as soon as practicable. However, we cannot assure you that we
will be able to meet the initial listing standards of any stock exchange, or that we will be able to maintain any such listing.

72

We
are subject to penny stock regulations and restrictions, and you may have difficulty selling shares of our common stock.

The
SEC has adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market price
less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. Our common stock is a “penny
stock” and is subject to Rule 15g-9 under the Exchange Act, or the Penny Stock Rule. This rule imposes additional sales practice
requirements on broker-dealers that sell such securities to persons other than established customers and “accredited investors”
(generally, individuals with a net worth in excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together with their
spouses). For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and
have received the purchaser’s written consent to the transaction prior to sale. As a result, this rule may affect the ability of
broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market,
thus possibly making it more difficult for us to raise additional capital.

For
any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in penny stock, of a disclosure
schedule prepared by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions payable
to both the broker-dealer and the registered representative and