Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 143

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 6
Chunk 143
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 terminate the lease that
the Company is not reasonably certain to exercise upon the lease inception. Accordingly, operating lease right-of-use assets and liabilities
do not include leases with a lease term of 12 months or less.

92

Research
and Development Expenses

Research
and development (R&D) expenses are all costs associated with the original development and design of the product as well as any intellectual
property (IP) generated during the development phase, including patents and copyrights. Research and development expenses are included
in the overall operating expenses and reflected as a separate line item on the consolidated statement of operations.

We
purchase the consumer preventive health food and health related household products sold on our platforms from our suppliers; we did not
develop, design, or manufacture those products. Moreover, although we have built our online platform and mobile commerce in-house, the
compensation costs for our in-house technology team were not significant. Accordingly, instead of capitalizing the compensation costs
of our in-house technology team as Research and Development on our Balance Sheet or presenting it as Research and Development expenses,
we included these amounts in Employee Compensation and Benefit expenses within General and Administrative expenses for the years ended
September 30, 2024 and 2023.

Selling
Expenses

Selling
expenses consist primarily of marketing and promotional service fees to service agents and other costs incurred by our sales and marketing
department such as staff costs, office supplies, and other incidental expenses that are incurred directly to attract or retain customers.

Our
selling expenses for the years ended September 30, 2024 and 2023 were $1,655,024 and $3,316,631,
respectively. We recognized marketing and promotional service expenses when our service agents performed marketing activities, promotions,
and exhibitions for our business and products. For the years ended September 30, 2024 and 2023, we recorded marketing and promotional
service fees to our service agents in an amount of $1,655,024 and $2,362,078, respectively.

Concentration
of Risk

Credit
risk

Financial
instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents
and other receivables. As September 30, 2024 and 2023, $69,484 (RMB487,611)
and $428,088 (RMB3,123,333), respectively, were deposited with various major financial institutions located in the PRC. While management
believes that