Company: KPEA
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006580
Chunk: 90

Company: Kun Peng International Ltd.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 1
Chunk 90
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 we believe that the Measures are not applicable to us in current form. The PRC government is increasingly focused on data
security, recently launching cybersecurity review against a number of mobile apps operated by several US-listed Chinese companies and
prohibiting these apps from registering new users during the review period. There are great uncertainties regarding the interpretation
and enforcement of PRC laws, rules, and regulations regarding data and privacy security. We may be required to change our data and other
business practices and be subject to regulatory investigations, penalties, increased cost of operations, or declines in issuer growth
or engagement as a result of these laws and policies.

39

Cash
Transfers Within our Organization

As
between the Company and its subsidiaries, cash will generally be transferred by means of capital contributions and/or interest-free intercompany
loans. Cash to be transferred or settled between the Company and its subsidiaries, on the one hand, and the consolidated VIE and its
subsidiaries, on the other hand, will typically be transferred through payments for fees under our contractual arrangements with the
VIE, expense reimbursements, or intercompany borrowings between the Company or one of its subsidiaries and the consolidated VIE. Any
such loans will be interest-free, unsecured and payable on demand. For more information regarding these contractual arrangements, see
Note 3 - Variable Interest Entities - “VIE” Agreements. The enforceability and treatment of the intercompany agreements within
our organization, including intercompany borrowings and the contractual arrangements with our VIE, have not been tested in court. To
the extent cash and/or assets in the business are in the PRC and/or Hong Kong or our PRC and/or Hong Kong entities, such funds and/or
assets may not be available to fund operations or for other use outside of the PRC and/or Hong Kong due to interventions in or the imposition
of restrictions and limitations imposed by the PRC government on the ability of the Company or its subsidiaries to transfer cash and/or
assets. There are no tax consequences for intercompany borrowings or the payment for intercompany services, except for the standard value
added taxes and/or income taxes for the revenues and/or profits generated from such services.

The
proceeds of any transactions within our organization, including with the VIE and its subsidiaries, are eliminated in our condensed consolidated
financial statements. For more details, please refer to the principles of consolidation set forth in the notes to our Condensed Consolidated
Financial Statements for the three