Company: KPEA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-023821
Chunk: 86

Company: Kun Peng International Ltd.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 2
Chunk 86
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 physiotherapy cabin, a customer service center, and an online shopping mall (Kun Zhi Jian). We coordinate
with local health service providers and leverage their health care expertise and technology to provide health screening and consulting
services to our customers and members at the Kun Zhi Jian customer service center. Based on their health conditions, we provide nutritional
consulting services and offer suggestions for our preventive health care products. As of June 30, 2025, our new online platform had approximately
3,494 members.

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 to our Condensed Consolidated Financial Statements - “Variable Interest Entities (“VIE”) Arrangements.”
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 nine months ended June 30, 2025 included in this report