OTC: KPEA
Kun Peng International Ltd.CIK 0001502557 · Educational Services
The Company is not a Chinese operating company but rather a Nevada holding company with no operations of its own. It conducts its operations through its PRC subsidiary, King Eagle (China), which conducts its operations through contractual agreements with a variable interest entity (“VIE”), King… About this business →
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About Kun Peng International Ltd.
Source: Item 1 (Business) from the 10-K filed December 31, 2025. Description as filed by the company with the SEC.
ITEM
1. BUSINESS
Regulatory
Overview - Legal and Operational Risks
The
Company is not a Chinese operating company but rather a Nevada holding company with no operations of its own. It conducts its
operations through its PRC subsidiary, King Eagle (China), which conducts its operations through contractual agreements with a
variable interest entity (“VIE”), King Eagle (Tianjin), and its subsidiaries (i) King Eagle (Beijing), incorporated on
December 1, 2022; (ii) King Eagle (Huai’an), incorporated on September 19, 2023 (deregistered on August 28, 2025); (iii) Kun
Zhi Jian (Huai’an), incorporated on October 26, 2023 (deregistered on August 28, 2025); (iv) Kun Zhi Jian (Shandong),
incorporated on January 30, 2024; (v) Chengdu Wenjiang, incorporated on February 1, 2024; (vi) Kun Pin Hui (Shandong), incorporated
on April 7, 2024; (vii) King Eagle (Hangzhou), incorporated on July 18, 2024 (55% was disposed during the year and as at September
30, 2025 it is 40% owned by King Eagle VIE); and (viii) Kun Yu (Hainan), incorporated on August 20, 2025. Please
see “- Corporate History and Structure - Contractual Arrangements” below.
The
VIE structure involves unique risks to shareholders and investors. It is used to provide investors with contractual exposure to foreign
investment in China-based companies where Chinese law prohibits or restricts direct foreign investment in the operating companies. Due
to PRC legal restrictions on foreign ownership in certain businesses, we do not have any equity ownership of the VIE or its subsidiaries;
instead, we receive the economic benefits of the VIE’s business operations through certain contractual arrangements.
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As
a result of such series of contractual arrangements, King Eagle (China) is the primary beneficiary of the VIE for accounting purposes
and the VIE is a PRC consolidated entity under U.S. GAAP. The Company consolidates the financial results of the VIE and its subsidiaries
in its consolidated financial statements in accordance with U.S. GAAP. Neither the Company nor its investors own any equity interest
in, have direct foreign investment in, or control through any such ownership of or investment in the VIE. As a result, investors in the
Company’s common stock are not purchasing an equity interest in the VIE or in its subsidiaries, but instead are purchasing an equity
interest in KPIL, the Nevada holding company. These contractual arrangements have not been tested in a court of law in the PRC. Moreover,
the binding rights over the VIE’s subsidiaries in the contractual arrangements between King Eagle (China) and King Eagle (Tianjin)
are implicit and indirect and the company laws and regulations in the PRC governing the business operations of the VIE’s subsidiaries
are uncertain.
Risks
Related to our VIE Structure
●
PRC
laws and regulations prohibit or restrict foreign ownership of companies that operate Internet information and content, value added
telecommunications, and certain other businesses in which we are engaged or could be deemed to be engaged. Consequently, our operations
and business in the PRC are conducted through contractual arrangements (“VIE Agreements”) with King Eagle VIE. If the
Chinese government should disallow or limit the use of the VIE, it could materially and adversely affect our business, which could
result in your shares significantly declining in value or becoming worthless. See “