Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 414

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 1
Chunk 414
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 52.

    ●
    Although
    the PRC’s Ministry of Commerce and its National Development and Reform Commission have announced new edicts regarding the use
    of VIEs for new overseas offerings, they have indicated that such new requirements will not affect the foreign ownership of companies
    already listed overseas. Nonetheless, there can be no assurance that such new rules and regulations will not be applied retroactively
    which may have a substantial negative impact on KPIL’s business and consequently on the value of KPIL’s securities. 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.

    ●
    On
    March 15, 2019, the National People’s Congress promulgated the Foreign Investment Law, which took effect on January 1, 2020.
    Since it is relatively new, substantial uncertainties exist in relation to its interpretation and implementation including future
    laws, administrative regulations, or provisions of the State Council to provide for contractual arrangements as a form of foreign
    investment. Therefore, it is uncertain whether our contractual arrangements would be deemed to be in violation of the market access
    requirements for foreign investment in the PRC, and if they are deemed to be in violation, how our contractual arrangements should
    be dealt with. See “Item 1A. Risks Factors - Risks Related to our Commercial Relationship with our VIE - Our current corporate structure and business
    operations may be substantially affected by the newly enacted Foreign Investment Law” on page 54.

    ●
    Neither
the Company nor its shareholders have a direct equity ownership interest in King Eagle VIE. The Company’s relationship to the VIE
is defined by the VIE Agreements. Therefore, should the Chinese government disallow or limit the use of the VIE, it 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 - We conduct substantially all of our operations in China through our PRC subsidiary, King Eagle (China), and our VIE, with
which King Eagle (