Company: KPEA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-023821
Chunk: 34

Company: Kun Peng International Ltd.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 1
Chunk 34
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 their equity interests in King Eagle (Tianjin)
to King Eagle (China), including the proceeds thereof, to guarantee King Eagle (Tianjin)’s performance of its obligations under
the Business Operation Agreement, the Consulting Service Agreement and the Equity Disposal Agreement (each, an “Agreement,”
collectively, the “Agreements”). If King Eagle (Tianjin) or its shareholders breach their respective contractual obligations
under any Agreement, or cause to occur one of the events regarded as an event of default under any Agreement, King Eagle (China), as
pledgee, will be entitled to certain rights, including the right to dispose of the pledged equity interest in King Eagle (Tianjin). During
the term of the Pledge Agreement, the pledged equity interests cannot be transferred without King Eagle (China)’s prior written
consent. The Pledge Agreement is valid until all the obligations due under the Agreements have been fulfilled. The Pledge Agreement was terminated on June 10, 2025 as a result of a change in ownership of King Eagle (Tianjin)
and an identical Pledge Agreement was entered into on the same date.

A
VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without
additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such
as voting rights and the right to receive the expected residual returns of the entity or the obligation to absorb the expected losses
of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary
and must consolidate the VIE. King Eagle (China) is deemed to have a controlling financial interest and be the primary beneficiary of
King Eagle (Tianjin) because it has both of the following characteristics:

    (1)
    The
    power to direct the activities of King Eagle (Tianjin) that most significantly impact such entity’s economic performance, and

    (2)
    The
    obligation to absorb losses of, or the right to receive benefits from, King Eagle (Tianjin) that could potentially be significant
    to such entity.

As
of the date of this Quarterly Report, King Eagle (Tianjin) has six subsidiaries: King Eagle (Beijing) Technology Co., Ltd, King
Eagle (Huai’an) Health Management Co., Ltd., Kun Zhi Jian (Huai’an