Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 657

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 1A
Chunk 657
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 particular, licenses and permits issued or granted to us by relevant
governmental bodies may be revoked at a later time by higher regulatory bodies. We cannot predict the effect of the interpretation of
existing or new PRC laws or regulations on our business. We cannot assure you that our current ownership and operating structure would
not be found in violation of any current or future PRC laws or regulations. As a result, we may be subject to sanctions, including fines,
and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China may be
protracted and result in substantial costs and diversion of resources and management attention. If the imposition of any of these government
actions causes us to lose our right to direct the activities of our VIE or to otherwise separate from them and if we are not able to
restructure our ownership structure and operations in a satisfactory manner, we would no longer be able to consolidate the financial
results of our VIE in our consolidated financial statements. Any of these or similar actions could significantly disrupt our business
operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect
our business, financial condition, and results of operations.

We
conduct substantially all of our operations in China through our PRC subsidiary, King Eagle (China) and our VIE, with which King Eagle
(China) maintains contractual arrangements. There are risks associated with this structure as the PRC has not yet ruled on its legality.

We
are not a Chinese operating company but rather a Nevada holding company with substantially all of our operations in the PRC conducted
by our PRC subsidiary, King Eagle (China), through contractual agreements with King Eagle (Tianjin), our VIE. Investors have not purchased
an equity interest in the VIE but have purchased equity interests in a holding company incorporated in the State of Nevada, and will
never directly hold equity interests in any of our subsidiaries or in our VIE in China.

A
series of contractual agreements, including the Consulting Service Agreement, the Business Operation Agreement, the Proxy Agreement,
the Equity Disposal Agreement, and the Equity Pledge Agreement, have been entered into with our VIE. We have been advised by our PRC
counsel that the ownership structure of our VIE in China does not violate any applicable and explicit PRC laws and regulations currently
in effect, and each of the contractual agreements governed by PRC law is valid, binding, and enforceable in accordance with