Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 413

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 1
Chunk 413
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 PRC. 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.

6

Risks
Related to our VIE Structure

    ●
    PRC
    laws and regulations prohibit or restrict foreign ownership of companies that operate Internet information and content, value added
    telecommunications, and certain other businesses in which we are engaged or could be deemed to be engaged. Consequently, our operations
    and business in the PRC are conducted through contractual arrangements (“VIE Agreements”) with King Eagle VIE. If the
    Chinese government should disallow or limit the use of the VIE, it could materially and adversely affect our business, which could
    result in your shares significantly declining in value or becoming worthless. See “Item 1A. Risk Factors - Risks Related to
    our Commercial Relationship with our VIE - PRC laws and regulations governing our business and the validity of certain of our contractual
    arrangements are uncertain. If we are found to be in violation of such PRC laws and regulations, our business may be negatively affected,
    and we may be forced to relinquish our interests in those operations” on page 51.

    ●
    Although
    we have been advised by our PRC counsel that the ownership structures of our PRC subsidiary and King Eagle VIE in China do not violate
    any applicable PRC law, regulation, or rule currently in effect and that the VIE Agreements are valid, binding, and enforceable in
    accordance with their terms and applicable PRC laws and regulations currently in effect, but that such ownership structures have
    not been tested in court, KPIL faces uncertainty with respect to future actions by the PRC government that could significantly affect
    the enforceability of the VIE Agreements, King Eagle VIE’s financial performance, and the value of a shareholder’s KPIL
    shares. See “Item 1A. Risk Factors - Risks Related to our Commercial Relationship with our VIE - We conduct substantially all
    of our operations in China through our PRC subsidiary, King Eagle (China) and our VIE, with which King Eagle (China) maintains contractual
    arrangements. There are risks associated with this structure as the PRC has not yet ruled on its legality” on page