Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 687

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 1A
Chunk 687
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 cash is in our Hong Kong or PRC subsidiaries, there is a possibility that the
funds may not be available to fund our operations or for other uses outside of the PRC or Hong Kong due to interventions or the imposition
of restrictions and limitations by the PRC or the Hong Kong government on the ability to transfer cash. In addition, if any of
our subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict its ability to pay dividends
to us. As of the date of this Annual Report, our subsidiaries have not experienced any difficulties or limitations on their ability to
transfer cash between each other; nor do they maintain cash management policies or procedures dictating the amount of such funding or
how funds are transferred. None of our subsidiaries has paid any dividends, other distributions or transferred assets to the Company
as of the date of this Annual Report. In the future, cash proceeds raised from overseas financing activities may be transferred by us
to our subsidiaries via capital contribution or shareholder loans, as the case may be. As of the date of this Annual Report, we have
not made any transfers, paid any dividends, or made any distributions to U.S. investors.

Moreover,
PRC legal restrictions permit payments of dividends by our PRC subsidiaries only out of their accumulated after-tax profits, if any,
determined in accordance with PRC accounting standards and regulations. Our PRC subsidiaries are also required under PRC laws and regulations
to allocate at least 10% of their annual after-tax profits determined in accordance with PRC generally accepted accounting principles
to a statutory general reserve fund until the amount in said fund reaches 50% of their registered capital. Allocations to these statutory
reserve funds can only be used for specific purposes and are not transferable to us in the form of loans, advances, or cash dividends.
Any limitations on the ability of our PRC subsidiaries to transfer funds to their parent companies in Hong Kong could materially and
adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, and otherwise
fund and conduct our business.

The
PRC government may issue further restrictive measures in the future.

We
cannot assure you that the PRC’s government will not issue further restrictive measures in the future. The PRC government’s
restrictive regulations and measures could increase our operating costs in adapting to these regulations and measures, limit our access
to capital resources or even restrict our business operations, which could further adversely