Company: KPEA
Filing Date: 2025-01-14
Form Type: 10-K
Source: 0001493152-25-002124
Chunk: 458

Company: Kun Peng International Ltd.
Filing Date: 2025-01-14
Form: 10-K
Item: Item 1
Chunk 458
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 Investment (Negative
List) (2020 Edition) (the”2020 Negative List”) was jointly promulgated on June 23, 2020 and took effect on July 23, 2020.
The Encouraging Catalogue and the 2020 Negative List categorize industries into three categories - “encouraged,” “restricted,”
and “prohibited.” All industries that are not listed under one of “encouraged,” “restricted,” or
“prohibited” categories are deemed to be “permitted.” The Encouraging Catalogue and the 2020 Negative List are
subject to review and update by the Chinese government from time to time. Our business is classified under the category of “encouraged.”

Regulation
Regarding Foreign Exchange Registration of Offshore Investment by PRC

The
Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip
Investment Through Special Purpose Vehicles, or Circular 37, issued by SAFE and effective on July 4, 2014 regulates foreign exchange
matters in relation to the use of special purpose vehicles, or SPVs, by PRC residents or entities to seek offshore investment and financing
and conduct round trip investment in China.

Circular
37 and other SAFE rules require PRC residents, including both legal and natural persons, to register with local banks before making a
capital contribution to any company outside of China (an “offshore SPV”) with onshore or offshore assets and equity interests
legally owned by PRC residents. In addition, any PRC individual resident who is a stockholder of an offshore SPV is required to update
his or her registration with the local banks with respect to that offshore SPV in connection with a change of basic information of the
offshore SPV such as its company name, business term, the shareholding by the individual PRC resident, merger, division, and with respect
to the individual PRC resident in case of any increase or decrease of capital in the offshore SPV, transfer of shares, or swap of shares
by the individual PRC resident. Failure to comply with the required SAFE registration and updating requirements described above may result
in restrictions being imposed on the foreign exchange activities of the PRC subsidiaries of such offshore SPV, including increasing the
registered capital or payment of dividends and other distributions to, and receiving capital injections from, the offshore SPV. Failure
to comply with Circular 37 may also subject the relevant P