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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

Mark One

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to _______

Commission File No. 333-169805

KUN PENG INTERNATIONAL LTD.

(Exact name of registrant as specified in its charter)

Nevada		EIN 32-0538640
(State or Other Jurisdiction of		(IRS Employer
Incorporation or Organization)		Identification Number)

1F, Building 3, No 1001 Huihe South Street
Banbidian Village

Gaobeidian Town, Chaoyang District
Beijing, PRC 100025

(Address of principal executive offices)

+86 -1087227012

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes ☐ No ☒

As of February 13, 2025, the registrant had 400,000,000 shares of common stock issued and outstanding.

FORM 10-Q

KUN PENG INTERNATIONAL LTD.

INDEX

		Page
PART I.	Financial Information	2

	Item 1. Condensed Consolidated Financial Statements (Unaudited)	2

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation.	38

	Item 3. Quantitative and Qualitative Disclosures About Market Risk.	46

	Item 4. Controls and Procedures.	47

PART II.	Other Information	48

	Item 6. Exhibits.	48

	Signatures	49

PART I

Item 1. Financial Statements.

KUN PENG INTERNATIONAL LTD

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In U.S. Dollars, except share data or otherwise stated)

			December 31,			September 30,
	Note		2024			2024
Assets
Current assets
Cash and cash equivalents			$	207,391			82,184
Advance and prepayments		4		48,231			178,954
Other receivables		5		180,879			251,588
Inventory		6		18,138			15,700
Amount due from related parties		10		2,466			20,092
Total current assets				457,105			548,518

Noncurrent assets
Property and equipment, net		7		275,568			292,198
Intangible assets, net		8		2,437			2,548
Security deposits				15,494			16,116
Operating lease right-of-use assets		14		194,612			284,524
Finance lease right-of-use assets		14		250,914			309,445
Investment in associate held for sale				-			15,743
Others				9,704			10,094
Total noncurrent assets				748,729			930,668

Total assets			$	1,205,834		$	1,479,186

Liabilities
Current liabilities
Short-term borrowing		15		97,544			-
Trade and other payables				3,197,103			3,208,426
Deferred revenue		9		593,992			584,116
Payroll payable				169,569			120,310
Tax payable				114,760			128,297
Amounts due to related parties		10		4,122,415			4,069,413
Operating lease obligations, current portion		14		187,659			238,979
Finance lease obligations, current portion		14		172,202			196,879
Total current liabilities				8,655,244			8,546,420

Noncurrent liabilities
Operating lease obligations, net of current portion		14		-			44,622
Finance lease obligations, net of current portion				37,170			76,862
Total noncurrent liabilities				37,170			121,484

Total liabilities			$	8,692,414		$	8,667,904

Commitment and contingencies							-

Equity
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; no shares issued and outstanding as of December 31, 2024 and September 30, 2024		11		-			-
Common stock, $0.0001 par value, 1,000,000,000 shares authorized; 400,000,000 shares issued and outstanding as of December 31, 2024 and September 30, 2024		11		40,000			40,000
Additional paid-in capital		11		420,606			349,356
Accumulated deficits				(8,420,078	)		(7,774,600	)
Accumulated other comprehensive income				482,029			200,368
Total stockholders’ equity				(7,477,443	)		(7,184,876	)
Non-controlling interests				(9,137	)		(3,842	)
Total equity				(7,486,580	)		(7,188,718	)

Total liabilities and equity			$	1,205,834		$	1,479,186

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

KUN PENG INTERNATIONAL LTD

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

(UNAUDITED)

(In U.S. Dollars, except share data or otherwise stated)

	Note		2024			2023
			Three Months Ended December 31,
	Note		2024			2023

Revenue, net		12	$	356,519		$	562,158
Cost of revenue		12		(55,683	)		(149,347	)
Gross profit				300,836			412,811

Operating expenses
General and administrative expenses				652,433			547,819
Selling expense				346,489			431,988
Total operating expenses				998,922			979,807

Loss from operations				(698,086	)		(566,996	)

Other income:
Interest income				10			357
Other income				47,069			31,833
Total other income, net				47,079			32,190

Loss before income taxes				(651,007	)		(534,806	)

Income tax expense		13		-			-

Net loss				(651,007	)		(534,806	)
Less: Net loss attributable to non-controlling interest				(5,529	)		(13,872	)
Net loss attributable to Kun Peng International Ltd				(645,478	)		(520,934	)
Foreign currency translation adjustment				281,895			(145,966	)
Comprehensive loss				(369,112	)		(680,772	)
Less: Comprehensive loss attributable to non-controlling interest				(5,295	)		(14,117	)
Comprehensive loss attributable to Kun Peng International Ltd			$	(363,817	)	$	(666,655	)

Net loss per share attributable to common stockholders
Basic and diluted			$	(0.002	)	$	(0.001	)

Weighted average shares used to compute net loss per share attributable to common stockholders				400,000,000			400,000,000

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

KUN PENG INTERNATIONAL LTD

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

(UNAUDITED)

(In U.S. Dollars, except share data or otherwise stated)

	Shares		Amount		capital		Deficits			income		equity			interest			equity
	Common stock				Additional paid-in		Accumulated			Accumulated other comprehensive		Total stockholders’			Non- controlling			Total
	Shares		Amount		capital		Deficits			income		equity			interest			equity
Balance, September 30, 2024		400,000,000	$	40,000	$	349,356	$	(7,774,600	)	$	200,368	$	(7,184,876	)	$	(3,842	)	$	(7,188,718	)
Capital contribution		-		-		71,250		-			-		71,250			-			71,250
Net loss attributable to common stockholders		-		-		-		(645,478	)		-		(645,478	)		-			(645,478	)
Net loss attributable to noncontrolling interest		-		-		-		-			-		-			(5,529	)		(5,529	)
Foreign currency translation adjustment		-		-		-		-			281,661		281,661			234			281,895
Balance, December 31, 2024		400,000,000	$	40,000	$	420,606	$	(8,420,078	)	$	482,029	$	(7,477,443	)	$	(9,137	)	$	(7,486,580	)

	Common stock				Additional paid-in		Accumulated			Accumulated other comprehensive			Total stockholders’			Non- controlling			Total
	Shares		Amount		capital		deficits			income			equity			interest			equity
Balance, September 30, 2023		400,000,000	$	40,000	$	597,801	$	(5,803,162	)	$	426,741		$	(4,738,620	)	$	(281,001	)	$	(5,019,621	)
Balance		400,000,000	$	40,000	$	597,801	$	(5,803,162	)	$	426,741		$	(4,738,620	)	$	(281,001	)	$	(5,019,621	)
Capital contribution		-		-		-		-			-			-			-			-
Net loss attributable to common stockholders		-		-		-		(520,934	)		-			(520,934	)		-			(520,934	)
Net loss attributable to noncontrolling interest		-		-		-		-			-			-			(13,872	)		(13,872	)
Foreign currency translation adjustment		-		-		-		-			(145,966	)		(145,966	)		(245	)		(146,211	)
Balance, December 31, 2023		400,000,000	$	40,000	$	597,801	$	(6,324,096	)	$	280,775		$	(5,405,520	)	$	(295,118	)	$	(5,700,638	)
Balance		400,000,000	$	40,000	$	597,801	$	(6,324,096	)	$	280,775		$	(5,405,520	)	$	(295,118	)	$	(5,700,638	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

KUN PENG INTERNATIONAL LTD

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In U.S. Dollars, except share data or otherwise stated)

	2024			2023
	Three Months Ended December 31,
	2024			2023

Cash flows from operating activities
Net loss	$	(651,007	)	$	(534,806	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		44,339			12,676
Amortization of right-of-use assets		127,435			79,962

Changes in operating assets and liabilities
Advance and prepayments		125,707			(85,784	)
Trade receivables		-			(23,118	)
Other receivables		79,040			(143,133	)
Inventory		(3,090	)		56,732
Trade payables		57,385			129,172
Other payables and accrual		20,710			129,702
Deferred revenue		32,913			(1,323,176	)
Payroll payable		54,724			18,835
Amounts due to related parties		248,808			1,508,580
Tax payable		(2,499	)		(46,090	)
Operating lease liabilities		(88,601	)		(83,160	)
Net cash provided by (used in) operating activities		45,864			(303,608	)

Cash flows from investing activities
Acquisition of property and equipment		(38,811	)		(44,008	)
Acquisition of intangible assets		(77	)		-
Disposal an associate held for sale		27,818			-
Net cash used in investing activities		(11,070	)		(44,008	)

Cash flows from financing activities
Capital contribution		71,250			-
Proceeds from bank borrowings		99,033			-
Payment of finance lease liabilities		(57,528	)		-
Net cash provided by financing activities		112,755			-

Effect of exchange rate changes on cash		(22,342	)		10,379

Net change in cash and cash equivalents		125,207			(337,237	)

Cash and cash equivalents, beginning balance		82,184			457,580

Cash and cash equivalents, ending balance	$	207,391			120,343

Supplementary cash flows information:
Cash paid for interest	$	-			-
Cash paid for income tax	$	-			-

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

KUN PENG INTERNATIONAL LTD

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

(UNAUDITED)

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Kun Peng International Limited (“the Company,” “KPIL,” “KPEA,” “we,” “us,” “our”), a Nevada corporation (formerly known as CX Network Group, Inc.), through its subsidiaries and VIE, is currently engaged in the sale of health care and health-related household products through its online platforms, King Eagle Mall and Kun Zhi Jian.

Name	Background	Ownership	Registered capital / Authorized shares	Principal activities
Kun Peng International Limited	● A U.S. company ● Incorporated on June 28, 2017		Authorized shares: ● Common stock: 1,000,000,000 with par value $0.0001 per share ● 400,000,000 shares issued and outstanding as of December 31, 2024 Preferred stock: ● 10,000,000 with par value $0.0001 per share ● no shares issued and outstanding as of December 31, 2024	Investment holding

Kun Peng International Holding Limited	● A BVI company ● Incorporated on April 20, 2021	100% owned by Kun Peng International Limited	Paid capital: 400 ordinary shares at par value of $0.01 per share	Investment holding

Kunpeng (China) Industrial Development Company Limited	● A Hong Kong company ● Incorporated on August 11, 2017 ● Deregistration from Hong Kong Inland Revenue Department and Hong Kong Company Registry, approved on February 2, 2024	100% owned by Kun Peng International Holding Limited	Paid share capital: 10,000 ordinary shares at $1,292 (HKD10,000)	Investment holding

Kun Peng (Hong Kong) Industrial Development Limited	● A Hong Kong company ● Incorporated on June 21, 2021	100% owned by Kun Peng International Holding Limited	Paid share capital: 1 ordinary share at $0.13 (HK$1)	Investment holding

Kun Peng Tian Yu Health Technology (Tianjin) Co., Ltd.	● a limited liability company incorporated in the People’s Republic of China and a wholly foreign owned enterprise (“WFOE”) since March 3, 2023 ● Incorporated on August 10, 2021	100% owned by Kun Peng (Hong Kong) Industrial Development Limited	Registered capital of RMB 5 million (US$0.7 million)	Exploring future business opportunities

King Eagle (China) Co., Ltd	● a wholly foreign owned enterprise (“WFOE”) until March 3, 2023 and a limited liability company incorporated in the People’s Republic of China ● Incorporated on March 20, 2019	Wholly owned by Kun Peng (China) Industrial Development Company Limited until March 3, 2023 Starting March 3, 2023, 49% owned by Kun Peng (Hong Kong) Industrial Development Limited and 51% owned by Kun Peng Tian Yu	Registered capital: approximately $15 million (RMB100 million)	Providing technical and management support to King Eagle VIE

King Eagle (Tianjin) Technology Co., Ltd.	● a limited liability company incorporated in the People’s Republic of China ● Incorporated on September 2, 2020 ● Became a variable interest entity (VIE) of King Eagle (China) Co., Ltd on May 15, 2021	Owned by multiple individuals: Chengyuan Li (approximately 45.5%), Xiujin Wang (approximately 10.5%), Yuanyuan Zhang (approximately 10%), Jinjing Zhang, Wanfeng Hu, Cuilian Liu, and Zhizhong Wang (each of whom owns approximately 6%), Zhandong Fan and Hui Teng (each of whom owns approximately 5%)	Registered capital of approximately $1.5 million (RMB 10 million) Paid-in capital approximately $0.2 million (RMB 1.4 million)	Operating King Eagle Mall

King Eagle (Beijing) Technology Co., Ltd	● a limited liability company incorporated in the People’s Republic of China ● Incorporated on December 1, 2022	100% owned by King Eagle (Tianjin) Technology Co., Ltd.	Registered capital of $0.7 million (RMB 5 million) Paid-in capital approximately $0.7 million (RMB 5 million)	Operates the new online platform, Kun Zhi Jian

King Eagle (Huai’an) Health Management Co., Ltd.	● a limited liability company incorporated in the People’s Republic of China ● Incorporated on September 19, 2023	95% owned by King Eagle (Tianjin) Technology Co., Ltd.	Registered capital of $0.7 million (RMB 5 million) Paid-in capital approximately $10K (RMB 70,000)	Coordinates with local health care service providers to offer health screening and monitoring

Kun Zhi Jian (Huai’an) Technology Co., Ltd.	● a limited liability company incorporated in the People’s Republic of China ● Incorporated on October 26, 2023	100% owned by King Eagle (Tianjin) Technology Co., Ltd.	Registered capital of $0.1 million (RMB 1 million)	Primarily focuses on marketing and selling physiotherapy equipment products

Kun Zhi Jian (Shandong) Health Management Co., Ltd	● a limited liability company incorporated in the People’s Republic of China ● Incorporated on January 30, 2024	100% owned by King Eagle (Tianjin) Technology Co., Ltd.	Registered capital of $0.4 million (RMB 3 million)	Commenced its operations in February 2024 and focuses on promoting and selling health screening devices

Chengdu Wenjiang Pengrun Internet Healthcare Co., Ltd.	● a limited liability company incorporated in the People’s Republic of China ● Incorporated on February 1, 2024	100% owned by King Eagle (Tianjin) Technology Co., Ltd.	Registered capital of $0.1 million (RMB 1 million)	Plans to commence operations in first half of 2025, assuming permits to provide online health care services are obtained

Kun Pin Hui (Shandong) Trading Co., Ltd	●a limited liability company incorporated in the People’s Republic of China ● Incorporated on November 23, 2023 ● Acquired on April 17, 2024	100% owned by King Eagle (Tianjin) Technology Co., Ltd.	Registered capital of $0.4 million (RMB 3 million)	Operates online platform

King Eagle (Hangzhou) Health Technology Co., Ltd	●a limited liability company incorporated in the People’s Republic of China ● Incorporated on July 18, 2024	95% owned by King Eagle (Tianjin) Technology Co., Ltd.	Registered capital of $0.1 million (RMB 1 million)	Commenced operations in August 2024

Authorized Shares and Name Change

Effective as of September 9, 2021, the Company’s Articles of Incorporation were amended to change the name of the Company from CX Network Group, Inc. to Kun Peng International Limited. (“KPIL”) and to increase the Company’s authorized capital to 210,000,000 authorized shares of Capital Stock with 200,000,000 designated as $0.0001 par value Common Stock, and 10,000,000 designated as $0.0001 par value Preferred Stock.

Effective October 12, 2022, we increased our authorized common stock from 200,000,000 shares, par value $0.0001, to 1,000,000,000 shares, par value $0.0001, and on October 18, 2022, we effected a 10:1 forward stock split after which we have 400,000,000 shares of common stock issued and outstanding.

On November 8, 2022, the Company changed its name from CX Network Group, Inc. to Kun Peng International Ltd. and its trading symbol was changed to “KPEA.”

On November 11, 2022, the Company received an electronic notice that OTC Markets had approved its application for uplisting from OTC Pink to the OTCQB Venture Market (OTCQB). The Company’s securities commenced trading on the OTCQB at the market open on November 14, 2022. The Company’s shares trade on the OTCQB under the current ticker symbol, “KPEA.”

Kun Peng International Holding Limited

Kun Peng International Holding Limited (“KP International Holding”) was incorporated in the British Virgin Islands on April 20, 2021. On May 3, 2021, KP International Holding purchased all of the issued and outstanding equity securities of Kun Peng (China) Industrial Development Company Limited (“KP (China)”), which was incorporated in Hong Kong on August 11, 2017, at a cash consideration of approximately $0.129 (HK$1). After the ownership transfer, KP International Holding became the sole shareholder of KP (China). KP International Holding is a holding company.

Kun Peng (China) Industrial Development Company Limited

Kun Peng (China) Industrial Development Company Limited (“KP (China)”) was incorporated as a limited liability company in Hong Kong under the name of Jing Jin Ji Investment Group Co., Limited (“Jing Jin Ji”) on August 11, 2017. The share capital of KP (China) is 10,000 ordinary shares at $1,292 (HKD10,000) and was wholly owned by an individual. On November 9, 2018, Jing Jin Ji changed its name to “Kun Peng (China) Industrial Development Company Limited” and filed a Certificate of Change of Name with the Hong Kong Company Registry on the same day. Although it was incorporated in 2017, it did not commence operations until July 2020 as it focused on exploring business opportunities in its initial phase and developing our online mobile application, King Eagle Mall, through its subsidiary, King Eagle (China) Co., Ltd. It became a wholly owned subsidiary of KP International Holding on May 3, 2021.

On August 24, 2023, we filed an application with the Companies Registry of Hong Kong for deregistration and dissolution of KP (China). The application for deregistration was approved on February 2, 2024 by the Hong Kong Company Registry.

Kun Peng (Hong Kong) Industrial Development Limited

Kun Peng (Hong Kong) Industrial Development Limited (“KP (Hong Kong)”) was incorporated as a limited liability company in Hong Kong on June 21, 2021. It is a holding company and is wholly owned by Kun Peng International Holding Limited. The share capital of this entity upon formation is $0.13 (HK$1).

King Eagle (China) Co., Ltd.

King Eagle (China) Co., Ltd. (“King Eagle (China)”) was incorporated as a limited liability company in Beijing Economic Technological Development Zone in the People’s Republic of China (“the PRC”) on March 20, 2019 with a registered capital of approximately $15 million (RMB100 million). King Eagle (China) was a wholly owned subsidiary of KP (China) at the time of establishment. KP (China) transferred its approximately $2.2 million (RMB 15 million), or 15%, interest in King Eagle (China) to Guoxin Ruilian Group Co., Ltd., a limited liability company incorporated in Beijing, the PRC, on November 2, 2020.

On March 26, 2021, Guoxin Ruilian Group Co., Ltd entered into equity transfer agreements with KP (China) and Guoxin Zhengye. Both Guoxin Ruilian Group Co., Ltd and Guoxin Zhengye are wholly owned by a common shareholder, Guoxin United Holdings Group Co., Ltd. Under the agreements, Guoxin Ruilian Group Co., Ltd transferred an 8% ownership interest in King Eagle (China) to Guoxin Zhengye and its remaining 7% ownership in King Eagle (China) to KP (China) on April 20, 2021. After the transfer, KP (China) and Guoxin Zhengye became the 92% and 8% shareholders of King Eagle (China), respectively. Guoxin Zhengye transferred its 8% ownership interest in King Eagle (China) to KP (China) on August 26, 2022. As a result of the transfer, KP (China) is the sole shareholder of King Eagle (China).

On November 1, 2022, KP (China) entered into ownership transfer agreements with Kun Peng (Hong Kong) Industrial Development Limited and Kun Peng Tian Yu Health Technology Co., Ltd. The agreements provided that KP (China) would transfer 49% and 51% of its ownership in King Eagle (China) to Kun Peng (Hong Kong) Industrial Development Limited and Kun Peng Tian Yu Health Technology Co., Ltd., respectively. The ownership transfer was completed on March 3, 2023. King Eagle (China) is no longer a WFOE after the ownership transfer.

As discussed below, King Eagle (China) has entered into agreements (the “VIE Agreements”) with King Eagle (Tianjin) Technology Co., Ltd. and its shareholders through which King Eagle (China) controls and receives the economic benefits of King Eagle (Tianjin) Technology Co., Ltd.’s business operations.

King Eagle (Tianjin) Technology Co., Ltd.

King Eagle (Tianjin) Technology Co., Ltd. (“King Eagle (Tianjin)”) was incorporated as a limited liability company in Tianjin Pilot Free Trade Zone in the People’s Republic of China on September 2, 2020, with a registered capital of approximately $1.5 million (RMB 10 million). We do not own any of the equity of King Eagle (Tianjin). It is owned by multiple individuals: Chengyuan Li (approximately 45.5%), Xiujin Wang (approximately 10.5%), Yuanyuan Zhang (approximately 10%), Jinjing Zhang, Wanfeng Hu, Cuilian Liu, and Zhizhong Wang (each of whom owns approximately 6%), and Zhandong Fan and Hui Teng (each of whom owns approximately 5%). Those shareholders also indirectly owned KP International Holding prior to its acquisition by the Company through two British Virgin Islands entities: Kunpeng Tech Limited and Kunpeng TJ Limited. Additionally, Chengyuan Li is a director and Yuanyuan Zhang is Chief Financial Officer of the Company.

Some of the business engaged in by King Eagle (Tianjin) is restricted or prohibited for foreign investment under PRC regulations. Therefore, King Eagle (China) has entered into VIE Agreements with King Eagle (Tianjin) and its shareholders. We do not own any equity interests in King Eagle (Tianjin), but control and receive the economic benefits of its business operations through the VIE Agreements. The VIE Agreements enable us to provide King Eagle (Tianjin) with consulting services on an exclusive basis in exchange for all of its annual profits, if any. In addition, we are able to appoint its senior executives and approve all matters requiring approval of its shareholders. The VIE Agreements are comprised of a Consulting Service Agreement, Business Operation Agreement, Proxy Agreement, Equity Disposal Agreement, and Equity Pledge Agreement.

Under current Chinese laws and regulations, the Company believes that the VIE Agreements are not subject to any government approval. The shareholders of King Eagle (Tianjin) were required to register with SAFE when they established offshore vehicles to hold KP International; such SAFE registration was effected on May 14, 2021. These shareholders of King Eagle (Tianjin) were required to register their equity pledge arrangement as required under the Equity Pledge Agreement with King Eagle (China). 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. The Company faces uncertainty with respect to future actions by the PRC government that could significantly affect King Eagle (Tianjin)’s financial performance and the enforceability of the VIE Agreements.

Kun Peng Tian Yu Health Technology (Tianjin) Co., Ltd.

Kun Peng Tian Yu Health Technology Co., Ltd. (“KP Tian Yu”) was incorporated as a limited liability company in Tianjin Pilot Free Trade Zone in the People’s Republic of China on August 10, 2021 with a registered capital of approximately $0.7 million (RMB 5 million). It is wholly owned by KP (Hong Kong). On November 1, 2022, KP (China) entered into ownership transfer agreements with Kun Peng (Hong Kong) Industrial Development Limited and Kun Peng Tian Yu Health Technology Co., Ltd. The agreements provided that KP (China) would transfer 49% and 51% of its ownership in King Eagle (China) to Kun Peng (Hong Kong) Industrial Development Limited and Kun Peng Tian Yu Health Technology Co., Ltd., respectively. The ownership transfer was completed on March 3, 2023. (“KP Tian Yu”) became a WFOE beginning March 3, 2023.

King Eagle (Beijing) Technology Co., Ltd

King Eagle (Beijing) Technology Co., Ltd (“King Eagle (Beijing)”) was incorporated as a limited liability company in Beijing in the People’s Republic of China on December 1, 2022 with a registered capital of $0.7 million (RMB 5 million). It is wholly owned by King Eagle (Tianjin). King Eagle (Beijing) commenced its operation of the new online platform called “Kun Zhi Jian” in January 2023. This platform became one of the components in our Kun Zhi Jian Mini Program in November 2023. Since then, King Eagle (Beijing) focuses on wholesaling of health care related products and dietary supplements.

King Eagle (Huai’an) Health Management Co., Ltd.

King Eagle (Huai’an) Health Management Co., Ltd. (“King Eagle (Huai’an)”) was established on September 19, 2023 under the laws of the People’s Republic of China. with a registered capital of approximately $0.69 million (RMB 5 million). It was owned 95% by King Eagle VIE and 5% by Hunan Ant Doctor Health Service Co., Ltd. On July 19, 2024, King Eagle VIE acquired the 5% minority stake and King Eagle (Huai’an) is now 100% owned by King Eagle VIE. King Eagle (Huai’an) became fully operational in October 2023 and focuses on coordinating with local health care service providers to offer health screening and monitoring to the Company’s customers and members.

Kun Zhi Jian (Huai’an) Technology Co., Ltd.

Kun Zhi Jian (Huai’an) Technology Co., Ltd. (“Kun Zhi Jian (Huai’an)”) was established on October 26, 2023 under the laws of the People’s Republic of China. with a registered capital of approximately $0.14 million (RMB 1 million). The entity is located in Jiangsu province, PRC. It is a wholly-owned subsidiary of King Eagle VIE. Kun Zhi Jian (Huai’an) commenced its operations in November 2023 and primarily focuses on marketing and selling physiotherapy equipment products.

Kun Zhi Jian (Shandong) Health Management Co., Ltd

Kun Zhi Jian (Shandong) Health Management Co., Ltd (“Kun Zhi Jian (Shangdong)”) was established on January 30, 2024 under the laws of the People’s Republic of China. with a registered capital of approximately $0.14 million (RMB 1 million). The entity is located in Shangdong province, PRC. It is a wholly-owned subsidiary of King Eagle VIE. Kun Zhi Jian (Shangdong) commenced its operations in February 2024 and focuses on promoting and selling health screening devices.

King Eagle (Hangzhou) Health Technology Co., Ltd

King Eagle (Hangzhou) Health Technology Co., Ltd (“King Eagle (Hangzhou)”) was established on July 18, 2024 under the laws of the People’s Republic of China with a registered capital of approximately $0.1 million (RMB 1 million). The entity is located in Zhejiang province, PRC. It is a wholly-owned subsidiary of King Eagle VIE. King Eagle (Hangzhou) commenced its operations of online sales in August 2024.

On August 8, 2024, King Eagle (Hangzhou) entered into certain agreements with Yunnan Linpingkang Pharmaceutical Co., Ltd, pursuant to which it purchased 40% of Shanxi Limei Aosikang Hospital Management Co., Ltd for the aggregate amount of $27,818 (RMB 200,000). On November 13, 2024, King Eagle (Hangzhou) entered into an agreement to transfer all of its shares of Shanxi Limei Aosikang Hospital Management Co., Ltd., for the aggregate amount of $27,818 (RMB 200,000) thereby recouping its investment.

Kun Pin Hui (Shandong) Trading Co., Ltd.

Kun Pin Hui (Shandong) Trading Co., Ltd (“Kun Pin Hui (Shandong)”) was established on November 23, 2023 under the laws of the People’s Republic of China with a registered capital of approximately $0.4 million (RMB 3 million). The entity is located in Shandong province, PRC. It has been a wholly-owned subsidiary of King Eagle VIE since its acquisition by King Eagle VIE on April 7, 2024. Kun Pin Hui (Shandong) commenced operations in April 2024 and is engaged in the sale of health care related products and services.

Chengdu Wenjiang Pengrun Internet Healthcare Co., Ltd

Chengdu Wenjiang Pengrun Internet Healthcare Co., Ltd (“Chengdu Wenjiang”) was established on February 1, 2024 under the laws of the People’s Republic of China with a registered capital of approximately $0.14 million (RMB 1 million). The entity is located in Sichuan province, PRC. It is a wholly-owned subsidiary of King Eagle VIE. Chengdu Wenjiang has not commenced operations as of the date of this report and is applying to the relevant authorities for the necessary permits to sell health care and medical services. There can be no assurance that such permits will be obtained.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) applicable to quarterly financial information and the requirements of Form 10-Q and Rule 8-03 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosure required by accounting principles generally accepted in the United States of America for complete financial statements. Quarterly results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the quarterly periods have been included.

These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended September 30, 2024 included in the Form 10-K filed with the SEC on January 14, 2025.

The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. This basis of accounting involves the application of accrual accounting and, consequently, revenues and gains are recognized when earned and expenses and losses are recognized when incurred. The condensed consolidated financial statements are expressed in U.S. dollars.

Principles of Consolidation

The condensed consolidated financial statements include the financial statements of the Company, its subsidiaries and its variable interest entity (“VIE”). All significant intercompany transactions and balances within the Company have been eliminated upon consolidation.

Use of Estimates and Assumptions

The preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that impact the presented amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the presented amounts of revenues and expenses during the period. Actual results may differ from those estimates. Significant estimates during the quarters ended December 31, 2024 and 2023 include the collectability of receivables, the useful lives of long-lived assets and intangibles, assumptions used in assessing impairment of long-lived assets, valuation of accruals for expenses, and tax due.

Going Concern

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America which contemplate continuation of the Company as a going concern. The going-concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed on the financial statements. The Company’s ability to continue as a going concern depends on the liquidation of its current assets and business developments. In assessing the Company’s liquidity, the Company monitors and analyzes its cash and cash equivalents and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses, and capital expenditure obligations. For the quarter ended December 31, 2024, the Company incurred cash inflows from operating activities of $45,864, the Company incurred a net loss of $651,007, and the Company had negative working capital of $8,198,139. For the fiscal year ended September 30, 2024, the Company incurred cash inflows from operating activities of $17,880, the Company incurred a net loss of $1,991,747, and the Company had negative working capital of $7,997,902. These conditions raise substantial doubt about the ability of the Company to continue as a going concern.

The Company continues to monitor its operations to help improve its financial liquidity. Options under consideration in the review process include, but are not limited to, increase of sales through the Company’s online business, reduction of operating costs, fund advance from the Company’s stockholders and directors, or financing through the issuance of shares. The Company has been focusing on increasing its revenue through its online platform and trimming its operating costs. For example, it explored additional revenue streams and reduced its service agent service fee. Additionally, the Company obtained capital funding of approximately $1.5 million from a director to meet its working capital requirements. In order to continue as a going concern for the next 12 months, through Kun Zhi Jian Mini Program, the Company continues to explore additional revenue streams, leverage the health care expertise and technology with local health care service providers, promote and sell preventive health care dietary supplements and products, and offer health care equipment services at the Kun Zhi Jian Customer Service Center. However, the Company cannot provide any assurance that it will be able to increase revenue, that it will be able to successfully implement its business plan, or that financing will be available to it on commercially acceptable terms, if at all. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. The directors intend to continue to support the group by providing adequate financial assistance to enable the group to continue its business operations for the foreseeable future.

Earnings (loss) Per Share

Basic income (loss) per share is computed by dividing net income (loss) attributable to the holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year. Diluted income (loss) per share is calculated by dividing net income (loss) attributable to the holders of ordinary shares as adjusted for the effect of dilutive ordinary share equivalents, if any, by the weighted average number of ordinary shares and dilutive ordinary share equivalents outstanding during the period. However, ordinary share equivalents are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive, such as in a period in which a net loss is recorded.

Foreign Currency Translation

The reporting currency of the Company is the U.S. Dollar. Our entity in the British Virgin Islands uses U.S. dollar. Our entities in the PRC and Hong Kong use the local currencies, Renminbi (RMB) and the Hong Kong Dollar (HKD), as their functional currencies as determined based on the criteria of ASC 830, “Foreign Currency Translation.”

Assets and liabilities are translated at the unified exchange rate as quoted by www.xe.com at the end of the period. Income and expense accounts are translated at the average translation rates and equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Translation adjustments included in accumulated other comprehensive gain amounted to $482,029 and $200,368 for the quarter ended December 31, 2024 and the fiscal year ended September 30, 2024, respectively.

The following table shows the foreign exchange rates set forth in the H.10 statistical release of the Federal Reserve Board used for translation:

SCHEDULE OF FOREIGN EXCHANGE RATES

	Hong Kong Dollar (HKD)		Chinese Renminbi (RMB)
As of December 31, 2024 (Closing Rate)
United States dollar ($1)		7.7677		7.2993

For the three months ended December 31, 2024 (Average Rate)
United States dollar ($1)		7.7744		7.1896

Hong Kong Dollar

(HKD)

Chinese Renminbi

(RMB)

As of September 30, 2024 (Closing Rate)

United States dollar ($1)

7.7693

7.0176

	Hong Kong Dollar (HKD)		Chinese Renminbi (RMB)

For the three month period ended December 31, 2023 (Average Rate)
United States dollar ($1)		7.8140		7.2247

Cash and Cash Equivalents

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and a certain amount of cash kept in electronic wallets, “e-wallets.”

We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. We maintain accounts with various financial institutions in the PRC, and also e-wallets. As of December 31, 2024 and 2023, cash balances held in PRC banks are uninsured. Monies that are held in e-wallets are deemed equivalent to cash, are highly liquid, and are relatively unsafe compared to cash in banks. We have not experienced any losses in bank accounts or e-wallets and believe that we are not exposed to significant risks with respect to our cash in bank accounts and that we are exposed to low risk with respect to our cash kept in e-wallets.

Inventory

Inventory consists of finished goods, which include wines, gel and essence for beauty, ointment for health, prepaid cards and detection kits.. Inventory is measured at the lower of cost or net realizable value on a first-in, first-out basis. When evidence exists that the net realizable value of inventory is lower than its cost, provisions shall be made to write inventory down and a loss shall be recognized in earnings in the period in which it occurs. That loss may be required, for example, due to damage, physical deterioration, obsolescence, changes in price levels, or other reasons. As of December 31, 2024, there was no inventory located at third-party warehouses.

Financial Instruments

The carrying amounts reported in the balance sheet for cash, other receivables, accrued liabilities, and other payables approximate fair value because of the immediate or short-term maturities of these financial instruments.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and impairment losses. Gains and losses on dispositions of property and equipment are included in operating income (loss). Major additions, renewals, and improvements are capitalized, while maintenance and repairs are recognized as expense as incurred.

Depreciation is provided over the estimated useful life of each class of depreciable assets and is computed using the straight-line method over the useful lives of the assets as follows:

Classification		Estimated useful life
Leasehold improvements		5 years
Office equipment		3 years
Computer equipment		3 years
Computer software		5 years

Intangible Assets

Intangible assets represent the licensing cost for trademark registration. For intangible assets with indefinite lives, the Company evaluates intangible assets for impairment at least annually and more often whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. Intangible assets with definite lives are amortized over their estimated useful lives, and are reviewed annually for impairment. The Company has not recorded impairment of intangible assets as of December 31, 2024 and 2023.

Impairment of Long-lived Assets

Long-lived assets, including buildings and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. We assess the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated discounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When we identify an impairment, we reduce the carrying amount of the asset to the estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of December 31, 2024 and 2023, management determined that there was no impairment.

Fair Value Measurements

The Company applies the provisions of ASC Subtopic 820-10, “Fair Value Measurements,” for fair value measurements of financial assets and financial liabilities and for fair value measurements of non-financial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

	●	Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

	●	Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

	●	Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

The Company’s financial assets and liabilities include cash, receivables, accounts payable, and accrued expenses.

Related Party Transactions

The Company follows the ASC 850-10, “Related Party Disclosures” for the identification of related parties and disclosure of related party transactions.

Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825-10-15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The condensed consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented; and c) such other information deemed necessary to an understanding of the nature of the related party transactions.

Comprehensive Income (Loss)

Other comprehensive income (loss) refers to revenues, expenses, gains and losses that under generally accepted accounting principles are included in comprehensive income but are excluded from net income (loss) as these amounts are recorded directly as an adjustment to stockholders’ equity. Our other comprehensive loss for the quarters ended December 31, 2024 and 2023 was comprised of foreign currency translation adjustments.

Revenue Recognition

Revenue is comprised of sales of goods and represents the amount of consideration the Company is entitled to upon the transfer of goods. Pursuant to FASB ASU No. 2016-08, Revenue from Contracts with Customers (TOPIC 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), the Company recorded revenue on a gross basis, net of surcharges and value added tax (“VAT”) of gross sales. The Company recorded revenue on a gross basis because the Company is the primary obligor of the sales arrangements has latitude in establishing prices, has discretion in suppliers’ selection and assumes credit risks on receivables on gross sales from customers.

The Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) using the full retrospective transition method. The Company’s adoption of ASU 2014-09 did not have a material impact on the amount and timing of revenue recognized in its condensed consolidated financial statements.

The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

● identify the contract with a customer;

● identify the performance obligations in the contract;

● determine the transaction price;

● allocate the transaction price to performance obligations in the contract; and

● recognize revenue as the performance obligation is satisfied.

Consistent with the criteria of ASC 606 “Revenue from Contracts with Customers,” we recognize revenue when performance obligations are satisfied by transferring control of a promised good or service to a customer. For performance obligations that are satisfied at a point in time, we also consider the following indicators to assess whether control of a promised good or service is transferred to the customer: (i) right to payment, (ii) legal title, (iii) physical possession, (iv) significant risks and rewards of ownership, and (v) acceptance of the good or service. For performance obligations satisfied over time, we recognize revenue over time by measuring the progress toward complete satisfaction of a performance obligation.

Deferred Revenue

Deferred revenue results from transactions where the Company has received the payments from the customers but revenue recognition criteria under the five-step model of ASC Topic 606 have yet to be met. Once all revenue recognition criteria have been satisfied, the revenues will be recognized upon the transfer of risk and rewards to the customers in the consolidated statement of operations. We anticipated the majority of the revenue will be recognized in the fiscal year 2025. Management agreed that the amount received is non-refundable; however, this term is not bound by any agreement. Thus, the customers may have the rights to challenge and demand the advances to be refunded under relevant Commercial Laws or regulations.

Lease

Under ASC Topic 842, the Company determines if an arrangement is a lease at inception. Lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate based on the information available at the lease commencement date. The Company generally uses the base, non-cancelable lease term in calculating the right-of-use assets and lease liabilities.

The Company may recognize the lease payments in the condensed consolidated statements of operation on a straight-line basis over the lease terms and variable lease payments in the periods in which the obligations for those payments are incurred, if any. The lease payments under the lease arrangements are fixed.

The Company elected the package of practical expedients which allow the Company to carryforward its historical lease classification, its assessment on whether a contract is or contains a lease, and its initial direct costs for any lease that exists prior to adoption of the new standard.

The Company also elected to apply the short-term lease exception for lease arrangements with a lease term of 12 months or less at commencement. Lease terms used to compute the present value of lease payments do not include any option to extend, renew, or terminate the lease that the Company is not reasonably certain to exercise upon the lease inception. Accordingly, operating lease right-of-use assets and liabilities do not include leases with a lease term of 12 months or less.

Research and Development Expenses

Research and development (R&D) expenses are all costs associated with the original development and design of the product as well as any intellectual property (IP) generated during the development phase, including patents and copyrights. Research and development expenses are included in the overall operating expenses and reflected as a separate line item on the consolidated statement of operations.

We purchase the consumer preventive health food and health related household products sold on our platforms from our suppliers and we did not develop, design or manufacture those products. Moreover, although we have built our online platform and mobile commerce in-house, the compensation costs for our in-house technology team were not significant. Accordingly, instead of capitalizing the compensation costs of our in-house technology team as Research and Development on the Balance Sheet or presenting it as Research and Development expenses, we included these amounts in Employee Compensation and Benefit expenses within General and Administrative expenses for the quarters ended December 31, 2024 and 2023.

Selling Expenses

Selling expenses consist primarily of marketing and promotional service fees to service agents and other costs incurred by our sales and marketing department such as staff costs, office supplies, and other incidental expenses that are incurred directly to attract or retain customers.

Our selling expenses for the quarters ended December 31, 2024 and 2023 were $346,489 and $431,988, respectively. We recognized marketing and promotional service expenses when our service agents performed marketing activities, promotions, and exhibitions for our business and products. For the quarters ended December 31, 2024 and 2023, we recorded marketing and promotional service fees to our service agents in an amount of $ 161,184 and $308,607, respectively.

Concentration of Risk

Credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and other receivables. As of December 31, 2024 and September 30, 2024, $306,922 (RMB 2,240,316) and $69,484 (RMB487,611), respectively, were deposited with various major financial institutions located in the PRC. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.

Historically, deposits in Chinese banks are secure due to state policy to protect depositor interests. However, China promulgated a Bankruptcy Law in August 2006 that came into effect on June 1, 2007, which contains a separate article expressly stating that the State Council may promulgate implementation measures to provide for the bankruptcy of Chinese banks based on the Bankruptcy Law. Under the current Bankruptcy Law, a Chinese bank may file bankruptcy if it deems itself to be insolvent. In addition, since China’s concession to the World Trade Organization, foreign banks have been gradually permitted to operate in China and have intensified competition in many aspects, especially since the opening of the Renminbi business to foreign banks in late 2006. Therefore, the risk of bankruptcy at the institutions that the Company maintains deposits has increased. In the event of bankruptcy, the Company is unlikely to reclaim its deposits in full since it is unlikely to be classified as a secured creditor under PRC laws.

Risks of variable interest entity structure

In the opinion of management, (i) the corporate structure of the Company is in compliance with existing PRC laws and regulations; (ii) the VIE Arrangements are valid and binding, and do not result in any violation of PRC laws or regulations currently in effect; and (iii) the business operations of the foreign-invested enterprise and the VIE are in compliance with existing PRC laws and regulations in all material respects.

However, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations. Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to the foregoing opinion of its management. If the current corporate structure of the Company or the VIE Arrangements is found to be in violation of any existing or future PRC laws and regulations, the Company may be required to restructure its corporate structure and operations in the PRC to comply with changing and new PRC laws and regulations. In the opinion of management, the likelihood of loss in respect of the Company’s current corporate structure or the VIE Arrangements is remote based on current facts and circumstances.

Foreign currency exchange risk

The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions and the foreign exchange policy adopted by the PRC government. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. There remains significant international pressure on the PRC government to adopt a more flexible currency policy, which could result in greater fluctuation of the RMB against the U.S. dollar. The Company is a holding company and it relies on dividends paid by the Company’s operating subsidiaries in China for its cash needs. Any significant revaluation of the RMB may materially and adversely affect its liquidity and cash flows. To the extent that the Company needs to convert U.S. dollars into RMB for its operations, appreciation of the RMB against the U.S. dollar would have an adverse effect on the RMB amount the Company would receive. Conversely, if the Company decides to convert RMB into U.S. dollars for other business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount the Company would receive.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty raising liquid funds to meet commitments as they fall due. See “Commitments and Contingencies” in Note 15. In meeting its liquidity requirements, the Company continues to focus on increasing its revenue through the sale of consumer health care products on its online platform, King Eagle Mall, and promoting its own brand of preventive health care related products on its new online platform to reduce its costs of goods sold, streamlining its overhead costs, or obtaining financing from its stockholders or directors.

Concentration of customers and vendors

There was no revenue from customers that individually represent greater than 10% of the total revenue for the quarters ended December 31, 2024, and 2023.

For the quarter ended December 31, 2024, two major vendors accounted for 47.09% and 21.65% of the Company’s total cost of sales.

For the quarter ended December 31, 2023, three major vendors accounted for 33.3%, 12.6% and 11.6% of the Company’s total cost of sales.

Income Taxes

We account for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date.

We apply ASC 740, Accounting for Income Taxes, to account for uncertainty in income taxes and the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met.

Commitments and Contingencies

The Company follows the ASC 450-20, “Contingencies” to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s condensed consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

Recent Accounting Pronouncements

In March 2024, the FASB issued ASU 2024-01, Compensation – Stock Compensation. This ASU clarifies how to determine whether profits interest and similar awards should be accounted for as share-based payment arrangements. The ASU is effective in reporting periods beginning after December 15, 2024, including interim periods within the fiscal year, on a prospective or retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact that adoption of this accounting standard will have on its condensed consolidated financial statements and disclosures.

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures. This ASU requires annual and interim disclosure of significant segment expenses that are provided to the CODM as well as interim disclosures for all reportable segment’s profit or loss and assets. This guidance also requires disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources. This guidance is expected to improve financial reporting by providing additional information about a public company’s significant segment expenses and more timely and detailed segment information reporting throughout the fiscal period. The ASU is effective for the Company’s fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact that adoption of this accounting standard will have on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. This ASU requires greater disaggregation of information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. This ASU applies to all entities subject to income taxes and is intended to help investors better understand an entity’s exposure to potential changes in jurisdictional tax legislation and assess income tax information that affects cash flow forecasts and capital allocation decisions. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. This ASU should be applied on a prospective basis although retrospective application is permitted. The Company is currently evaluating the impact that adoption of this accounting standard will have on its consolidated financial statements and disclosures.

Other than those disclosed above, management does not believe that any recently issued or recently issued but not yet adopted accounting pronouncements will have a material impact on the Company’s financial position, results of operations, or cash flows.

NOTE 3 - VARIABLE INTEREST ENTITIES “VIE” ARRANGEMENTS

On May 15, 2021, King Eagle (China) entered into a series of contractual arrangements with King Eagle (Tianjin) and its shareholders. As a result of the contractual arrangements, the Company classified King Eagle (Tianjin) as a Variable Interest Entity “VIE.”

King Eagle (Tianjin) Technology Co., Ltd. (“King Eagle (Tianjin)”) was incorporated as a limited liability company in Tianjin Pilot Free Trade Zone in the People’s Republic of China on September 2, 2020, with a registered capital of approximately $1.5 million (RMB 10 million). It is owned by multiple individuals: Chengyuan Li (approximately 45.5%), Xiujin Wang (approximately 10.5%), Yuanyuan Zhang (approximately 10%), Jinjing Zhang, Wanfeng Hu, Cuilian Liu, and Zhizhong Wang (each of whom owns approximately 6%), Zhandong Fan, and Hui Teng (each of whom owns approximately 5%). Those shareholders also indirectly owned KP International Holding prior to its acquisition by the Company through two British Virgin Islands entities: Kunpeng Tech Limited and Kunpeng TJ Limited. Additionally, Chengyuan Li is a director and Yuanyuan Zhang is Chief Financial Officer of the Company.

The VIE Agreements are as follows:

	(1)	Consulting Service Agreement
	(2)	Business Operation Agreement
	(3)	Proxy Agreement
	(4)	Equity Disposal Agreement
	(5)	Equity Pledge Agreement

Consulting Service Agreement

Pursuant to the terms of a certain Exclusive Consulting Service Agreement dated May 15, 2021, between King Eagle (China) and King Eagle (Tianjin) (the “Consulting Service Agreement”), King Eagle (China) is the exclusive consulting service provider to King Eagle (Tianjin) to provide business-related software research and development services; design, installation, and testing services; network equipment support, upgrade, maintenance, monitor, and problem-solving services; employees technical training services; technology development and sublicensing services; public relations services; market investigation, research, and consultation services; short to medium term marketing plan-making services; compliance consultation services; marketing events and membership related activities organizing services; intellectual property permits; equipment and rental services; and business-related management consulting services. Pursuant to the Consulting Service Agreement, the service fee is the remaining amount after King Eagle (Tianjin)’s profit before tax in the corresponding year deducts King Eagle (Tianjin)’s losses, if any, in the previous year, the necessary costs, expenses, taxes, and fees incurred in the corresponding year, and the withdraws of the statutory provident fund. King Eagle (Tianjin)agreed not to transfer its rights and obligations under the Consulting Service Agreement to any third party without prior written consent from King Eagle (China). In addition, King Eagle (China) may transfer its rights and obligations under the Consulting Service Agreement to King Eagle (China)’s affiliates without King Eagle (Tianjin)’s consent, but King Eagle (China) shall notify King Eagle (Tianjin) of such transfer. This Agreement is valid for a term of 10 years subject to any extension requested by King Eagle (China) unless terminated by King Eagle (China) unilaterally prior to the expiration.

Business Operation Agreement

Pursuant to the terms of certain Business Operation Agreement dated on May 15, 2021, among King Eagle (China), King Eagle (Tianjin)and the shareholders of King Eagle (Tianjin) (the “Business Operation Agreement”), King Eagle (Tianjin) has agreed to subject the operations and management of its business to the control of King Eagle (China). According to the Business Operation Agreement, King Eagle (Tianjin) is not allowed to conduct any transactions that has substantial impact upon its operations, assets, rights, obligations and personnel without the King Eagle (China)’s written approval. The shareholders of King Eagle (Tianjin) and King Eagle (Tianjin) will take King Eagle (China) ‘s advice on appointment or dismissal of directors, employment of King Eagle (Tianjin)’s employees, regular operation, and financial management of King Eagle (Tianjin). The shareholders of King Eagle (Tianjin) have agreed to transfer any dividends, distributions or any other profits that they receive as the shareholders of King Eagle (Tianjin) to King Eagle (China) without consideration. The Business Operation Agreement is valid for a term of 10 years or longer upon the request of King Eagle (China) prior to the expiration thereof. The Business Operation Agreement might be terminated earlier by King Eagle (China) with a 30-day written notice.

Proxy Agreement

Pursuant to the terms of the Proxy Agreement dated on May 15, 2021, among King Eagle (China), and the shareholders of King Eagle (Tianjin) (the “Proxy Agreement”), the shareholders of King Eagle (Tianjin) have entrusted their voting rights as King Eagle (Tianjin)’s shareholders to King Eagle (China) for the longest duration permitted by PRC law. The Proxy Agreement can be terminated by mutual consent of the King Eagle (Tianjin) shareholders and King Eagle (China) or upon a 30-day notice by King Eagle (China).

Equity Disposal Agreement

Pursuant to the terms of the Equity Disposal Agreement dated on May 15, 2021, among King Eagle (China), King Eagle (Tianjin), and the shareholders of King Eagle (Tianjin) (the “Equity Disposal Agreement”), the shareholders of King Eagle (Tianjin) granted King Eagle (China) or its designees an irrevocable and exclusive purchase option (the “Option”) to purchase King Eagle (Tianjin)’s all or partial equity interests and/or assets at the lowest purchase price permitted by PRC laws and regulations. The option is exercisable at any time at King Eagle (China)’s discretion in full or in part, to the extent permitted by PRC law. The shareholders of King Eagle (Tianjin) agreed to give King Eagle (Tianjin) the total amount of the exercise price as a gift, or in other methods upon King Eagle (China)’s written consent to transfer the exercise price to King Eagle (Tianjin). The Equity Disposal Agreement is valid for a term of 10 years or longer upon the request of King Eagle (China).

Equity Pledge Agreement

Pursuant to the terms of certain Equity Pledge Agreement dated on May 15, 2021, among King Eagle (China) and the shareholders of King Eagle (Tianjin) (the “Pledge Agreement”), the shareholders of King Eagle (Tianjin) pledged all of their equity interests in King Eagle (Tianjin) to King Eagle (China), including the proceeds thereof, to guarantee King Eagle (Tianjin)’s performance of its obligations under the Business Operation Agreement, the Consulting Service Agreement and the Equity Disposal Agreement (each, an “Agreement,” collectively, the “Agreements”). If King Eagle (Tianjin) or its shareholders breach their respective contractual obligations under any Agreement, or cause to occur one of the events regarded as an event of default under any Agreement, King Eagle (China), as pledgee, will be entitled to certain rights, including the right to dispose of the pledged equity interest in King Eagle (Tianjin). During the term of the Pledge Agreement, the pledged equity interests cannot be transferred without King Eagle (China)’s prior written consent. The Pledge Agreement is valid until all the obligations due under the Agreements have been fulfilled.

A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as voting rights and the right to receive the expected residual returns of the entity or the obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. King Eagle (China) is deemed to have a controlling financial interest and be the primary beneficiary of King Eagle (Tianjin) because it has both of the following characteristics:

	(1)	The power to direct the activities of King Eagle (Tianjin) that most significantly impact such entity’s economic performance, and

	(2)	The obligation to absorb losses of, or the right to receive benefits from, King Eagle (Tianjin) that could potentially be significant to such entity.

As of the date of this Quarterly Report, King Eagle (Tianjin) has established six subsidiaries: King Eagle (Beijing) Technology Co., Ltd, King Eagle (Huai’an) Health Management Co., Ltd., Kun Zhi Jian (Huai’an) Technology Co., Ltd., Kun Zhi Jian (Shandong) Health Management Co., Ltd., Chengdu Wenjiang Pengrun Internet Healthcare Co., Ltd and King Eagle (Hangzhou) Health Technology Co., Ltd., on December 1, 2022, September 19, 2023, October 26, 2023, January 31, 2024, February 1, 2024 and July 18, 2024, respectively, in the PRC. King Eagle (Tianjin) is the controlling shareholder under the company laws of the PRC. 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.

Pursuant to the VIE Agreements, the shareholders of King Eagle (Tianjin) have agreed to transfer any dividends, distributions, or other profits that they receive to King Eagle (China). King Eagle (Tianjin) pays service fees equal to all of its net profit after tax to King Eagle (China). The VIE Agreements are designed so that King Eagle (Tianjin) operates for the benefit of King Eagle (China) and ultimately the Company.

Moreover, King Eagle (Tianjin) has agreed to subject the operations and management of its business to the full control of King Eagle (China) and King Eagle (Tianjin) will take King Eagle (China)’s advice on the appointment or dismissal of directors and employment, regular operation, and financial management. Accordingly, the Company consolidates the accounts of King Eagle (Tianjin) and its subsidiaries for the periods presented herein, in accordance with Accounting Standards Codification, or ASC, 810-10, “Consolidation.”

VIE Financial Information

Set forth below is the consolidated balance sheet information as of December 31, 2024 and September 30, 2024, and the consolidated statements of operations and cash flows for the three month periods ended December 31, 2024 and 2023, showing financial information for the parent company, Kun Peng International Limited, the non-VIE subsidiaries (as defined below), and the VIE (as defined below), eliminating entries, and consolidated information (in dollars). In the tables below, the column headings correspond to the following entities:

“Parent entity” refers to Kun Peng International Limited;

“Non-VIE and Non-WFOE subsidiaries” refers to the following entities:

	●	Kun Peng International Holding Limited (“KP International Holding”)
	●	Kun Peng (Hong Kong) Industrial Development Limited (“KP (Hong Kong)”)
	●	Kun Peng Tian Yu Health Technology Co., Ltd. (“KP Tian Yu”) until March 3, 2023
	●	King Eagle (China) Co., Ltd. (“King Eagle (China)”) commencing March 3, 2023

“WFOE” refers to King Eagle (China) until March 3, 2023 and KP Tian Yu commencing March 3, 2023;

“VIE” refers to King Eagle (Tianjin) Technology Co., Ltd. (“King Eagle (Tianjin)”), King Eagle (Beijing) Technology Co., Ltd (“King Eagle (Beijing)”), King Eagle (Huai’an) Health Management Co., Ltd. (“King Eagle (Huai’an)”), Kun Zhi Jian (Huai’an) Technology Co., Ltd. (“Kun Zhi Jian (Huai’an)”), Kun Zhi Jian (Shandong) Health Management Co., Ltd (“Kun Zhi Jian (Shangdong)”), Chengdu Wenjiang Pengrun Internet Healthcare Co., Ltd (“Chengdu Wenjiang”), Kun Pin Hui (Shandong) Trading Co., Ltd (“Kun Pin Hui (Shandong)”), and King Eagle (Hangzhou) Health Technology Co., Ltd (“King Eagle (Hangzhou)”).

Consolidated Balance Sheet

As of December 31, 2024

SCHEDULE OF VIE OF BALANCE SHEET

	Parent Only			Non-VIE and Non-WFOE Subsidiaries Consolidated			WFOE			VIE and VIE’s Subsidiaries Consolidated			Elimination Entries and Reclassification Entries			Consolidated
Cash and cash equivalent	$	-		$	732		$	61		$	206,598		$	-		$	207,391
Intercompany receivables-current		-			553,064			-			2,415,803			(2,968,867	)		-
Total current assets		-			578,613			61			2,847,298			(2,968,867	)		457,105
Intercompany receivables-noncurrent		-			4			-			-			(4	)		-
Total non-current assets		34,160			89,016			-			659,717			(34,164	)		748,729
Total assets		34,160			667,629			61			3,507,015			(3,003,031	)		1,205,834
Intercompany payables		1,129,508			1,806,395			931			92,490			(3,029,324	)		-
Total current liabilities		1,129,508			2,014,217			993			8,539,850			(3,029,324	)		8,655,244
Total non-current liabilities		-			-			-			37,170			-			37,170
Total liabilities		1,129,508			2,014,217			993			8,577,020			(3,029,324	)		8,692,414
Total shareholders’ equity		(1,095,348	)		(1,346,588	)		(932	)		(5,060,868	)		26,293			(7,477,443	)
Non-controlling interests		-			-			-			(9,137	)		-			(9,137	)
Total equity		(1,095,348	)		(1,346,588	)		(932	)		(5,070,005	)		26,293			(7,486,580	)
Total liabilities and equity	$	34,160		$	667,629		$	61		$	3,507,015		$	(3,003,031	)	$	1,205,834

As of September 30, 2024

	Parent Only			Non-VIE and Non-WFOE Subsidiaries Consolidated			WFOE			VIE and VIE’s Subsidiaries Consolidated			Elimination Entries and Reclassification Entries			Consolidated
Cash and cash equivalent	$	-		$	981		$	71		$	81,132		$	-		$	82,184
Intercompany receivables-current		-			531,169			-			2,316,724			(2,847,893	)		-
Total current assets		-			564,532			71			2,831,808			(2,847,893	)		548,518
Intercompany receivables-noncurrent		-			4			-			-			(4	)		-
Total non-current assets		34,160			145,641			-			785,031			(34,164	)		930,668
Total assets		34,160			710,173			71			3,616,839			(2,882,057	)		1,479,186
Intercompany payables		970,159			1,846,491			969			51,757			(2,869,376	)		-
Total current liabilities		994,159			2,071,841			1,033			8,344,402			(2,865,015	)		8,546,420
Total non-current liabilities		-			-			-			121,484			-			121,484
Total liabilities		994,159			2,071,841			1,033			8,465,886			(2,865,015	)		8,667,904
Total shareholders’ equity		(959,999	)		(1,239,530	)		(962	)		(4,967,444	)		(16,941	)		(7,184,876	)
Non-controlling interests		-			(122,138	)		-			118,397			(101	)		(3,842	)
Total equity		(959,999	)		(1,361,668	)		(962	)		(4,849,047	)		(17,042	)		(7,188,718	)
Total liabilities and equity	$	34,160		$	710,173		$	71		$	3,616,839		$	(2,882,057	)	$	1,479,186

Condensed Consolidated Statements of Operations Data

SCHEDULE OF VIE DATA OF OPERATION

	Parent Only			Non-VIE and Non-WFOE Subsidiaries Consolidated			WFOE			VIE and VIE’s Subsidiaries Consolidated			Eliminating Adjustments			Consolidated Totals
	Three Months Ended December 31, 2024
	Parent Only			Non-VIE and Non-WFOE Subsidiaries Consolidated			WFOE			VIE and VIE’s Subsidiaries Consolidated			Eliminating Adjustments			Consolidated Totals

Revenue	$	-		$	-		$	-		$	356,519		$	-		$	356,519
Intercompany revenue		-			137,778			-						(137,778	)		-
Cost of revenue and related tax		-			225			-			55,458			-			55,683
Gross profit		-			137,553			-			301,061			(137,778	)		300,836
Total operating expenses		135,349			175,744			7			687,822			-			998,922
Intercompany operating expenses		-			-			-			137,778			(137,778	)		-
Loss from operations		(135,349	)		(38,191	)		(7	)		(524,539	)		-			(698,086	)
Other (expense) income					(362	)					45,407			2,034			47,079
Loss before income taxes		(135,349	)		(38,553	)		(7	)		(479,132	)		2,034			(651,007	)
Income tax expense		-			-			-			-			-			-
Net (loss) income	$	(135,349	)	$	(38,553	)	$	(7	)	$	(479,132	)	$	2,034		$	(651,007	)

Condensed Consolidated Statements of Operations Data

	Parent Only			Non-VIE and Non-WFOE Subsidiaries Consolidated		WFOE			VIE and VIE’s Subsidiaries Consolidated			Eliminating Adjustments			Consolidated Totals
	Three Months Ended December 31, 2023
	Parent Only			Non-VIE and Non-WFOE Subsidiaries Consolidated		WFOE			VIE and VIE’s Subsidiaries Consolidated			Eliminating Adjustments			Consolidated Totals

Revenue	$	-		$	-	$	-		$	562,158		$	-		$	562,158
Intercompany revenue		-			235,043		-			-			(235,043	)		-
Cost of revenue and related tax		-			466		-			148,881			-			149,347
Gross profit		-			234,577		-			413,277			-			412,811
Total operating expenses		61,724			210,413		7			707,663			-			979,807
Intercompany operating expenses		-			-		-			235,043			(235,043	)		-
(Loss) income from operations		(61,724	)		24,164		(7	)		(529,429	)		-			(566,996	)
Other income (expense)		-			32		(7	)		32,165			-			32,190
(Loss) income before income taxes		(61,724	)		24,196		(14	)		(497,264	)		-			(534,806	)
Income tax expense		-			-		-			-			-			-
Net (loss) income	$	(61,724	)	$	24,196	$	(14	)	$	(497,264	)	$	-		$	(534,806	)

Condensed Consolidated Schedules of Cash Flows

SCHEDULE OF VIE DATA OF CASH FLOWS

	Parent Only			Non-VIE and Non-WFOE Subsidiaries Consolidated			WFOE			VIE and VIE’s Subsidiary Consolidated			Eliminating Adjustments			Consolidated
	Three Months Ended December 31, 2024
	Parent Only			Non-VIE and Non-WFOE Subsidiaries Consolidated			WFOE			VIE and VIE’s Subsidiary Consolidated			Eliminating Adjustments			Consolidated

Net loss	$	(135,349	)	$	(38,553	)	$	(7	)	$	(479,132	)	$	2,034		$	(651,007	)
Intercompany receivables		-			(43,042	)		-			(340,911	)		383,953			-
Intercompany payables		159,349			34,202			-			192,559			(386,110	)		-
Net cash provided by (used in) operating activities		-			1,308			(7	)		44,686			(123	)		45,864

Net cash (used in) provided by investing activities		-			-			-			(53,507	)		42,437			(11,070	)

Net cash provided by (used in) financing activities		-			-			-			153,487			(40,732	)		112,755

Effect of exchange rate fluctuation on cash	$	-		$	(1,557	)	$	(3	)	$	(19,199	)	$	(1,583	)	$	(22,342	)

	Parent Only			Non-VIE and Non-WFOE Subsidiaries Consolidated			WFOE			VIE and VIE’s Subsidiary Consolidated			Eliminating Adjustments			Consolidated
	Three Months Ended December 31, 2023
	Parent Only			Non-VIE and Non-WFOE Subsidiaries Consolidated			WFOE			VIE and VIE’s Subsidiary Consolidated			Eliminating Adjustments			Consolidated

Net (loss) income	$	(61,724	)	$	24,196		$	(14	)	$	(497,264	)	$	-		$	(534,806	)
Intercompany receivables		-			(6,228	)		-			(239,717	)		245,945			-
Intercompany payables		100,424			13,852			69			132,278			(246,623	)		-
Net cash (used in) provided by operating activities		-			(2,368	)		55			(300,617	)		(678	)		(303,608	)
														-
Net cash used in investing activities		-			-			-			(44,008	)		-			(44,008	)

Effect of exchange rate fluctuation on cash	$	-		$	2,359		$	9		$	7,333		$	678		$	10,379

The Company consolidated its VIE as of December 31, 2024 and September 30, 2024. The carrying amounts and classification of the VIE’s assets and liabilities included in the consolidated balance sheets are as follows:

	December 31, 2024			September 30, 2024
Assets
Current assets
Cash and cash equivalents	$	206,598		$	81,132
Trade receivable – intercompany		2,415,803			2,316,724
Advance and prepayments		23,899			147,091
Other receivables – third parties		180,394			251,069
Inventory		18,138			15,700
Amount due from a related party		2,466			20,092
Total current assets		2,847,298			2,831,808

Noncurrent assets
Property and equipment, net		260,858			265,141
Intangible assets, net		76			-
Investment in associate held for sale		-			15,743
Operating lease right-of-use assets		147,869			504,147
Finance lease right-of-use assets		250,914			-
Total noncurrent assets		659,717			785,031
Total assets	$	3,507,015		$	3,616,839

Liabilities
Current liabilities
Short-term borrowing		97,544			-
Trade payables	$	1,953,544		$	1,952,026
Other payables and accrual		1,204,182			1,194,683
Deferred revenue		593,992			584,116
Intercompany payables		92,490			51,757
Payroll payable		128,369			93,391
Tax payable		110,679			119,291
Amounts due to related parties		4,040,215			3,998,164
Operating lease obligations-current portion		146,633			154,095
Finance lease obligations-current portion		172,202			196,879
Total current liabilities		8,539,850			8,344,402

Noncurrent liabilities
Operating lease obligations-noncurrent portion		-			44,622
Finance lease obligations-noncurrent portion		37,170			76,862
Total noncurrent liabilities		37,170			121,484

Total liabilities		8,577,020			8,465,886

Commitment and contingencies					-

Equity
Additional paid-in capital		762,956			389,356
Accumulated deficits		(5,939,805	)		(5,466,201	)
Accumulated other comprehensive income		115,981			109,401
Total stockholders’ equity		(5,060,868	)		(4,967,444	)
Non-controlling interests		(9,137	)		118,397

Total equity		(5,070,005	)		(4,849,047	)

Total liabilities and equity	$	3,507,015		$	3,616,839

The operating results of the VIE were as follows:

	2024			2023
	Three Months Ended December 31,
	2024			2023

Revenue, net	$	356,519		$	562,158
Cost of revenue		(55,458	)		(148,881	)
Gross profit		301,061			413,277

Operating expenses
General and administrative expenses		363,552			293,229
Selling expense		462,048			649,477
Total operating expenses		825,600			942,706

Loss from operations		(524,539	)		(529,429	)

Other income:
Interest income		10			354
Other income		45,397			31,811
Total other income, net		45,407			32,165

Loss before income taxes		(479,132	)		(497,264	)

Income tax expense		-			-

Net loss		(479,132	)		(497,264	)
Less: Net loss attributable to non-controlling interest		(5,529	)		(13,872	)
Net loss attributable to Kun Peng International Ltd	$	(473,603	)	$	(483,392	)

The cash flows of the VIE were as follows:

	2024			2023
	Three Months Ended December 31,
	2024			2023

Cash flows from operating activities
Net loss	$	(479,133	)	$	(497,264	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization		32,774			420
Amortization of right-of-use assets		87,218			21,253

Changes in operating assets and liabilities
Advance and prepayments		119,310			(70,627	)
Trade receivable - third parties		-			(23,118	)
Trade receivable - intercompany		(123,715	)		(65,947	)
Other receivables - third parties		44,664			(123,313	)
Other receivable-related parties		34,362			-
Other receivables - intercompany		(217,196	)		(173,770	)
Inventory		(3,090	)		56,732
Trade payable - third parties		54,231			129,172
Trade payable - intercompany		168,588			72,175
Other payables and accrual - third parties		44,701			176,655
Other payables and accrual - intercompany		23,971			60,103
Deferred revenue		32,913			(1,323,176	)
Payroll payable		39,171			21,502
Amounts due to related parties		234,899			1,508,580
Tax payable		(2,108	)		(45,660	)
Lease liabilities		(46,874	)		(24,334	)
Net cash provided by (used in) operating activities		44,686			(300,617	)

Cash flows from investing activities
Purchase of equipment		(38,811	)		(44,008	)
Acquisition of intangible assets		(77	)		-
Disposal of an associate held for sale		27,818			-
Investment in subsidiary		(42,437	)		-
Net cash used in investing activities		(53,507	)		(44,008	)

Cash flows from financing activities
Capital contribution		111,982			-
Proceeds from bank borrowings		99,033			-
Payment of finance lease liabilities		(57,528	)		-
Net cash provided by financing activities		153,487			-

Effect of exchange rate changes on cash		(19,199	)		7,333

Net change in cash and cash equivalents		125,467			(337,292	)

Cash and cash equivalents, beginning balance		81,132			447,117

Cash and cash equivalents, ending balance	$	206,599		$	109,825

NOTE 4 - ADVANCE AND PREPAYMENTS

Prepayments consisted of the following:

SCHEDULE OF PREPAYMENTS

	December 31,		September 30,
	2024		2024

Prepaid rent and building management and utilities	$	7,402	$	13,200
Prepaid supplies⁽¹⁾		15,931		49,495
Prepaid income tax		5,024		5,226
Prepaid professional services₍₂₎		14,362		104,742
Prepaid others		5,512		6,291
Total prepayments	$	48,231	$	178,954

⁽¹⁾

As of December 31, 2024 and September 30, 2024, the Company had prepaid supplies of $15,931 and $49,495, respectively. The prepayment will be recognized in cost of goods sold in its consolidated statement of operations and comprehensive loss when the corresponding deferred revenue is recognized.

⁽²⁾

As of September 30, 2024, the ending balance of prepaid professional services represented $104,742 for the legal service fee for our PRC entities. The legal service fee will be amortized to general and administrative expenses using the straight-line method, over the service periods of October and November 2024.

As of December 31, 2024, the ending balance of prepaid professional services included $9,133, $3,996, and $1,233 for the legal service fee, advertising fee and bookkeeping fee for our PRC entities. The legal service fees will be amortized to general and administrative expenses using the straight-line period over the service periods of January and February 2025. The advertising fee and bookkeeping fee will be recognized in the Company’s consolidated statement of operations and comprehensive loss when the related services are performed.

These amounts are expected to be recoverable within twelve (12) months.

NOTE 5 - OTHER RECEIVABLES

Other receivables included the following:

SCHEDULE OF OTHER RECEIVABLES

	December 31,		September 30,
	2024		2024

Deposits	$	127,091	$	136,119
Advance to employees		542		42,894
Advance to third-party company		35,470		34,912
Others		17,776		37,663
Total other receivables, net	$	180,879	$	251,588

Advance to employees represents funds provided to our officers and employees for business expenses, such as travel, parking, gasoline, membership, and meals, that are anticipated to be incurred by our officers and employees on behalf of the Company. Advances to employees are required to be repaid in cash within a year.

Advance to third-party company represents funds provided to a third-party company for rental fee and deposit.

NOTE 6 - INVENTORY

Inventory consisted of the following:

SCHEDULE OF INVENTORY

	December 31,		September 30,
	2024		2024

Finished goods	$	18,138	$	15,700
Total	$	18,138	$	15,700

NOTE 7 - PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following:

SCHEDULE OF PROPERTY AND EQUIPMENT

	December 31,			September 30,
	2024			2024

Leasehold improvements	$	198,711		$	199,563
Furniture and fixtures		6,961			4,755
Computer equipment		308,136			291,386
Office equipment		6,591			5,822
Subtotal		520,399			501,526
Property and equipment, gross		520,399			501,526
Less: accumulated depreciation		(244,831	)		(209,328	)
Total property and equipment, net	$	275,568		$	292,198

Depreciation expense was $44,246 and $12,586 for the three months ended December 31, 2024 and 2023, respectively.

NOTE 8 - INTANGIBLE ASSETS

SCHEDULE OF INTANGIBLE ASSET

	December 31,			September 30,
	2024			2024

Trademarks	$	3,629		$	3,692
Subtotal		3,629			3,692
Less: accumulated amortization		(1,192	)		(1,144	)
Total intangible assets, net	$	2,437		$	2,548

Intangible assets consist of the Company’s trademarks of King Eagle Mall with a useful life of ten years. Approximately $1,045, $1,343, $548, $35, $46, $83 and $79 will expire in July 2031, April 2031, April 2032, September 2032, October 2032, March 2033 and August 2034, respectively.

Amortization expense was $93 and $90 for the three months ended December 31, 2024 and 2023, respectively.

NOTE 9 - DEFERRED REVENUE

SCHEDULE OF DEFERRED REVENUE

	December 31,		September 30,
	2024		2024

Advance payments from customers	$	593,992	$	584,116
Total deferred revenue	$	593,992	$	584,116

Deferred revenue results from transactions where the Company has received the payments from the customers but revenue recognition criteria under the five-step model have yet to be met. As of December 31, 2024 and September 30, 2024, the Company had total deferred revenue of $593,992 and $584,116, respectively. Once the five-step model criteria have been satisfied, revenues will be recognized upon the transfer of risk and rewards to the customers. Management has agreed that the amount received is non-refundable. However, this term is not bound by any written agreement. Thus, the customers may have the right to challenge and demand that the advances be refunded under relevant commercial laws and regulations.

NOTE 10 - RELATED PARTY TRANSACTIONS

Acquisition of Kun Pin Hui (Shandong) Trading Co. Ltd.

On April 3, 2024, King Eagle (Tianjin) entered into a Share Transfer Agreement (the “Share Purchase Agreement”) with Zhandong Fan and Yuanyuan Zhang for the acquisition of all the subscribed shares of Kun Pin Hui (Shandong) Trading Co. Ltd.

Pursuant to the Share Purchase Agreement, King Eagle (Tianjin) agreed to acquire all of the subscribed capital of Kun Pin Hui (Shandong), amounting to $0.4 million (RMB 3 million), for an aggregate consideration of $0.28 (RMB 2). Zhandong Fan (the holder of 95% of the shares of Kun Pin Hui (Shandong)) and Yuanyuan Zhang (the holder of 5% of the shares of Kun Pin Hui (Shandong)), both of whom are shareholders of King Eagle (Tianjin), transferred their shares for consideration of $0.14 (RMB 1)

The acquisition closed on April 7, 2024. As of December 31, 2024, King Eagle (Tianjin) had paid $3,698 (RMB27,000) of the registered capital.

Amounts due from related parties

Amounts due from related parties mainly represent monies advanced to officers or employees for daily operating expenses that are anticipated to be incurred by our officers and employees on behalf of the Company. The advances are required to be repaid in cash within a year.

Amounts due from related parties consisted of the following:

Name of related party	Relationship	Nature of transactions	December 31, 2024		September 30, 2024
Ms. Jinjing Zhang	One of the shareholders of King Eagle (Tianjin)	Advanced to officers or employees for operating expenses	$	-	$	7,125
Ms. Xiujin Wang	One of the shareholders of King Eagle (Tianjin)	Advanced to officers or employees for operating expenses		-		7,125
Beijing Paiyue Technology Co., LTD	95% held by Ms. Chengyuan Li, a shareholder of King Eagle (Tianjin)	Input VAT, offset once invoice was issued		822		5,842
Tianjin Qianying Technology Co., Ltd.	100% held by Ms. Jinjing Zhang, one of the shareholders of King Eagle (Tianjin)	Input VAT, offset once invoice was issued		1,644		-
Total			$	2,466	$	20,092

Amounts due to related parties

Amounts due to related parties are payables arising from transactions between the Company and related parties, such as payments of agency service charges to a related company, payments of operating expenses by such related parties on behalf of our entities in the PRC, and funding to meet working capital requirements. The payables owed to the related parties are interest free, unsecured, and repayable on demand.

Amounts due to related parties consisted of the following:

Name of related party	Relationship	Nature of transactions	December 31, 2024		September 30, 2024
Ms. Chengyuan Li	One of the shareholders of King Eagle (Tianjin)	Operational support to King Eagle (Tianjin) to meet its working capital requirements	$	2,582,576	$	2,686,246
Ms. Xiujin Wang	One of the shareholders of King Eagle (Tianjin)	Operational support to King Eagle (Tianjin) to meet its working capital requirements		246,599		260,773
Mr. Richun Zhang	Chief Executive Officer and Director	Operational support to King Eagle (Tianjin) to meet its working capital requirements		337,293		234,981
Ms. Yuanyuan Zhang	One of the shareholders of King Eagle (Tianjin)	Operational support to King Eagle (Tianjin) to meet its working capital requirements		123,941		121,094
Ms. Jinjing Zhang	One of the shareholders of King Eagle (Tianjin)	Operational support to King Eagle (Tianjin) to meet its working capital requirements		2,329		3,847

Mr. Zhandong Fan	One of the shareholders of King Eagle (Tianjin)	Operational support to King Eagle (Tianjin) to meet its working capital requirements		3,699		3,847
Mr. Cairong Ji	Legal representative of King Eagle (Hangzhou)	Operational support to King Eagle (Tianjin) to meet its working capital requirements		18,029		2,391
Tianjin Qianying Technology Co., Ltd.	100% held by Ms. Jinjing Zhang, one of the shareholders of King Eagle (Tianjin)	Payments of agency service charges		803,332		753,455
Beijing Paiyue Technology Co., LTD	100% held by Mr. Zhizhong Wang, one of the shareholders of King Eagle (Tianjin)	Payments of agency service charges		4,617		2,779
Total			$	4,122,415	$	4,069,413

NOTE 11 - EQUITY

Effective as of September 9, 2021, the Company’s Articles of Incorporation were amended to increase the Company’s authorized capital to 210,000,000 authorized shares of capital stock with 200,000,000 designated as $0.0001 par value common stock and 10,000,000 designated as $0.0001 par value preferred stock.

Effective on October 12, 2022, a Certificate of Amendment was filed with the Nevada Secretary of State to increase the authorized number of shares of the Company’s $0.0001 par value common stock from 200,000,000 shares to 1,000,000,000 shares of common stock.

The Company’s board of directors approved and declared a 10:1 forward split of its common stock on September 6, 2022. As a result of the stock split, holders of pre-split shares of common stock received post-split shares of common stock at a ratio of ten (10) shares of post-split common stock for every one (1) share of pre-split common stock. The stock split had a record date of September 16, 2022 and an effective date of October 18, 2022. No fractional shares were issuable as a result of the forward stock split. After the forward stock split, the Company has 400,000,000 shares of common stock outstanding. The par value of the common stock remained unchanged at 0.0001 per share after the stock split.

Preferred stock

The Company’s authorized shares of preferred stock are 10,000,000 shares, with a par value of $0.0001. The preferred stock may be issued in series and with such voting powers, designations, preferences, limitations, restrictions, and relative rights as the board of directors shall determine in its sole discretion. No shares of preferred stock were issued and outstanding as of December 31, 2024 and September 30, 2024.

Common stock

The Company’s authorized shares of common stock were 1,000,000,000 and 1,000,000,000 shares with a par value of $0.0001, as of December 31, 2024 and September 30, 2024, respectively. The issued and outstanding shares of common stock were 400,000,000 as of December 31, 2024 and September 30, 2024, respectively.

Restricted net assets

Our ability to pay dividends is primarily dependent on us receiving distributions of funds from our VIE. Relevant PRC statutory laws and regulations permit payments of dividends by our VIE and its subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations and after they have met the PRC requirements for appropriation to statutory reserves. Share capital of our PRC subsidiaries and VIE included in the Company’s consolidated net assets are also non-distributable for dividend purposes. The results of operations reflected in the accompanying consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of KP Tian Yu, the foreign-invested enterprise, King Eagle (China), King Eagle (Tianjin), the VIE, and its subsidiaries. The Company is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, the Company may allocate a portion of its after-tax profits based on PRC accounting standards to an enterprise expansion fund and a staff bonus and welfare fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.

As a result of the foregoing restrictions, King Eagle (China), King Eagle (Tianjin), and KP Tian Yu are restricted in their ability to transfer their net assets to the Company. Foreign exchange and other regulations in the PRC may further restrict these entities from transferring funds to the Company in the form of dividends, loans, and advances. As of December 31, 2024, King Eagle (China), King Eagle (Tianjin), and KP Tian Yu incurred negative assets in the amount of $1,313,763 , $2,417,624 and $932, respectively. As of September 30, 2024, King Eagle (China), King Eagle (Tianjin) and KP Tian Yu incurred negative assets in the amount of $1,327,000, $2,539,081 and $962, respectively. Accordingly, the Company did not accrue statutory reserve funds as of December 31, 2024 and September 30, 2024.

NOTE 12- REVENUE

Revenue:

The following tables present disaggregated revenues for the three months ended December 31, 2024 and 2023:

	2024		2023
	Three Months Ended December 31,
	2024		2023

Retail product sales	$	78,457	$	506,333
Wholesale product sales		-		1,805
Commissions		-		11,046
Equipment services		278,062		8,668
Training		-		34,306
Total	$	356,519	$	562,158

	2024		2023
	Three Months Ended December 31,
	2024		2023

Performance obligations satisfied at a point in time	$	78,457	$	553,490
Performance obligations satisfied over time		278,062		8,668
Total	$	356,519	$	562,158
Revenue	$	356,519	$	562,158

Cost of revenue:

We disaggregated our cost of revenue for the three months ended December 31, 2024 and 2023 as follows:

	2024		2023
	Three Months Ended December 31,
	2024		2023

Retail	$	12,087	$	123,135
Wholesale		-		919
Equipment service fees		43,596		4,987
Training fees		-		20,306
Total	$	55,683	$	149,347
Cost of revenue	$	55,683	$	149,347

NOTE 13- INCOME TAXES

The Company accounts for income taxes pursuant to the accounting standards that require the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carryforwards. Additionally, the accounting standards require the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. The Company and its subsidiaries file separate income tax returns.

United States

Kun Peng International Limited is incorporated in the State of Nevada and is subject to United States federal income tax. No provision for income taxes in the U.S. has been made as the Company has no U.S. taxable income for the three months ended December 31, 2024 and 2023.

British Virgin Islands

KP International Holding is a holding company organized as an International Business Company under the laws of the British Virgin Islands (“BVI”), and its principal operating subsidiaries are organized under the laws of Hong Kong and the laws of the PRC. KP International and its subsidiaries are not subject to income taxes in the BVI.

Hong Kong

The two-tier profits tax rates system was introduced under the Inland Revenue (Amendment)(No.3) Ordinance 2018 (“the Ordinance”) of Hong Kong and became effective for the assessment year 2018/2019. Under the two-tier profits tax rates regime, the profits tax rate for the first $0.26 million (HKD 2 million) of assessable profits of a corporation will be subject to a lowered tax rate of 8.25%, while the remaining assessable profits will be subject to the legacy tax rate of 16.5%.

KP (Hong Kong) did not earn any income that was derived in Hong Kong for the three months ended December 31, 2024 and 2023, and, therefore, KP (Hong Kong) were not subject to Hong Kong profits tax for the periods reported.

Since the two-tier profit tax rates regime is tentative, we applied the original profits tax rate, 16.5%, for the calculation of deferred taxes for our subsidiaries in Hong Kong.

PRC

The PRC’s statutory income tax rate is 25%. The Company’s subsidiaries and VIE registered in the PRC are subject to the income tax rate of 25%, unless otherwise specified.

Income tax expense was comprised of the following:

	2024		2023
	Three Months Ended December 31,
	2024		2023
Current
Federal	$	-	$	-
State		-		-
Foreign		-		-
Total current		-		-

Deferred
Federal		-		-
State		-		-
Foreign		-		-
Total deferred		-		-

Total income tax expense	$	-	$	-

A reconciliation between the Company’s actual provision for income taxes and the provision at the statutory rate is as follow:

	2024			2023
	Three Months Ended December 31,
	2024			2023
Loss before income tax expense	$	(651,007	)	$	(534,806	)
Computed tax expense (benefit) with statutory tax rate		21.0	%		21.0	%
Impact of different tax rates in other jurisdictions		3.2	%		3.5	%
Tax effect of non-deductible expenses		(0.1	)%		(2.2	)%
Change in valuation allowance		(24.1	)%		(22.3	)
Effective tax rate		0.0	%		0.0	%

Uncertain tax positions

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by the respective jurisdictions, where applicable. The statute of limitations for the tax returns varies by jurisdiction.

The statute of limitations for the U.S. Internal Revenue Service to assess the income tax returns of a taxpayer expires three years from the due date of the income tax return or the date on which it was filed, whichever is later.

In accordance with the Hong Kong profits tax regulations, a tax assessment by the IRD may be initiated within six years after the relevant year of assessment, but that period is extendable to 10 years in the case of potential willful underpayment or evasion.

In accordance with the PRC Tax Administration Law on the Levying and Collection of Taxes, the PRC tax authorities generally have up to five years to assess underpaid tax plus penalties and interest for PRC entities’ tax filings. In the case of tax evasion, which is not clearly defined in the law, there is no limitation on the tax years open for investigation. Accordingly, the PRC entities remain subject to examination by the tax authorities based on the above.

As of December 31, 2024 and September 30, 2024, the Company did not accrue any liability, interest, or penalties related to uncertain tax positions in the provision for income taxes in its consolidated financial statements. The Company does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months.

NOTE 14 - RIGHT-OF-USE ASSETS AND LEASE

The Company has operating leases for its office facilities, automobiles and employee accommodation and finance lease for equipment for revenue service. The Company classified the equipment for revenue service as finance lease as the lessor will transfer the ownership of equipment for revenue service to the Company by the end of the lease term.

Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognized lease expense on a straight-line basis over the lease term for operating lease. Meanwhile, the Company recognized the finance leases ROU assets and interest on an amortized cost basis.

The following table provides a summary of leases as of December 31, 2024 and September 30, 2024:

Assets/liabilities	Classification	December 31, 2024		September 30, 2024
Assets
Operating lease right-of-use assets	Operating lease assets	$	194,612	$	284,524
Finance lease right-of-use assets	Finance lease assets		250,914		309,445
Total lease assets		$	445,526	$	593,969

Liabilities
Current
Operating lease liability - current	Current operating lease liabilities	$	187,659	$	238,979
Finance lease liability - current	Current finance lease liabilities		172,202		196,879
			359,861		435,858
Long-term
Operating lease liability – net of current portion	Long-term finance lease liabilities	$	-	$	44,622
Finance lease liability – net of current portion	Long-term operating lease liabilities		37,170		76,862
			37,170		121,484
Total lease liabilities		$	397,031	$	557,342

The operating lease expense for the three months ended December 31, 2024 and 2023 was as follows:

SUMMARY OF OPERATING LEASE EXPENSE

Lease cost	Classification	2024		2023
		Three Months Ended December 31,
Lease cost	Classification	2024		2023
Operating lease cost
Lease expenses – short-term	General and administrative	$	9,299	$	-
Lease expenses	General and administrative		82,297		77,156
Finance lease cost
Amortization of leased asset	Cost of sales		47,300		-
Interest on lease liabilities	Other expense - other		2,902		-
Total lease cost		$	141,798	$	77,156

Maturities of operating lease and finance lease liabilities as of December 31, 2024 were as follows:

Maturity of Lease Liabilities	Operating lease			Finance lease
2025	$	190,703		$	177,947
2026		-			37,422
Thereafter		-			-
Total lease payments		190,703			215,369
Less: Interest		(3,044	)		(5,997	)
Present value of lease payments	$	187,659		$	209,372

Maturities of operating lease and finance lease liabilities as of September 30, 2024, were as follows:

Maturity of Lease Liabilities	Operating lease			Finance lease
2025	$	244,243		$	205,103
2026		44,887			77,848
Thereafter		-			-
Total lease payments		289,130			282,951
Less: Interest		(5,529	)		(9,210	)
Present value of lease payments	$	283,601		$	273,741

Supplemental information related to operating leases and finance leases was as follows:

	2024			2023
	Three Months Ended December 31,
	2024			2023
Cash paid for amounts included in the measurement of lease liabilities	$	146,129		$	83,160
Weighted average remaining operating lease term		1.11 year			1.3 years
Weighted average remaining finance lease term		1.31 year			-
Weighted average discount rate for operating lease		4.64	%		4.30	%
Weighted average discount rate for finance lease		4.75	%		-

Amortization expense was $127,435 and $79,962 for the three months ended December 31, 2024 and 2023, respectively.

NOTE 15 - SHORT-TERM BORROWING

SCHEDULE OF SHORT-TERM BORROWING

Loan period

Interest
rate

December 31, 2024

September 30, 2024

China Construction Bank Co., LTD. Beijing Mentougou Branch

December 19, 2024

to December 19, 2025

3.86

97,544

Short-term borrowing

97,544

The loans were guaranteed by a shareholder.

NOTE 16 - COMMITMENTS AND CONTINGENCIES

Purchase and service commitments

We entered into multiple purchase and service commitments. As of December 31, 2024 and September 30, 2024, we had purchase and service commitments in an amount of $56,101 and $4,987, respectively.

NOTE 17 - SUBSEQUENT EVENT

In January 2025, King Eagle (Tianjin) entered into an agreement to transfer 55% of the outstanding shares of King Eagle (Hangzhou). The transaction, which was completed on January 17, 2025, resulted in King Eagle (Hangzhou) becoming an associate instead of a subsidiary of King Eagle (Tianjin).

As of December 31, 2024, the Company evaluated and concluded that there are no subsequent events that would require recognition or disclosure in the financial statements, other than as disclosed above.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview of the Business

Due to global health issues and the COVID-19 pandemic, people have increased their health and nutrition consciousness. We believe preventive care is the most effective investment in health.

To promote awareness of preventive care among the people in the PRC, we developed and launched our mobile platform, King Eagle Mall, in July 2020, an online platform, Kun Zhi Jian, in October 2022, and Kun Zhi Jian Mini Program in November 2023.

King Eagle Mall

King Eagle Mall is a mobile social e-commerce platform launched in July 2020 that promotes preventive health care products and services. It adopts the S2B2C business model and integrates many major health care products and services. King Eagle Mall is designed to enable health-related products to be sold by us and by third parties. King Eagle Mall’s products are divided into two sectors: self-operated products and selected products which promote preventive health care. Our team screens and examines products that are and will be offered both by us and by affiliated merchants. Our major products include health care products such as dietary supplements, nutritional health foods, beauty cosmeceuticals, and other categories of health foods (for instance, milk powder, dried fruits) for supporting the cardiovascular system and bone joint health. We also offer collagen peptides, probiotics, and health foods for improving blood circulation and vein health, as well as household products that can promote and improve a healthier lifestyle for our members. We receive customer orders and may arrange fulfillment through our merchants who are responsible for delivery or we may fill customer orders through our outsourced networks. As of February 10, 2025, December 31, 2024 and September 30, 2024, King Eagle Mall had approximately 5,669 members.

We also operate customer service centers with which our members can communicate directly for any assistance related to product purchases, suggestions for health care products and services, and delivery logistics.

Kun Zhi Jian and Kun Zhi Jian Mini Program

In October 2022, we introduced and implemented a new online platform, Kun Zhi Jian. In its initial phase of operation, we focused on selling a thermal therapy cabin to wholesalers. Currently, we promote and sell physiotherapy equipment products and our own brand, as well as other popular brands, of preventive health care related products. In November 2023 we also launched the Kun Zhi Jian Mini Program, which is composed of three main areas: 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 February 10, 2025 and December 31, 2024, our new online platform had approximately 2,422 and 2,394 members, respectively.

COVID-19

Businesses and markets in mainland China have reopened and mainland China relaxed its policies and controls relating to COVID-19 in early December 2022. In addition, in July 2023, the PRC government fully opened its border to foreigners without requirements of quarantine or application for a health code upon arrival in the PRC. Although respiratory illness, especially among children, surged in China and some parts of the world in November 2023, this is a treatable disease and is containable according to the medical experts in China.

The Company continues to focus its business on its online platform, King Eagle Mall, and to promote its own brand of consumer health care and health related household products on its new online platform, Kun Zhi Jian, which was introduced and implemented in October 2022 to mitigate the adverse impacts of COVID-19. In November 2023, the Company also launched Kun Zhi Jian Mini Program to expand its customer services and preventive health care products.

Recent Regulatory Developments in China

Under current Chinese laws and regulations, the Company believes that the VIE Agreements are not subject to any government approval. The shareholders of King Eagle (Tianjin) were required to register with SAFE when they established offshore vehicles to hold KP International. Such SAFE registration was effected on May 14, 2021. These shareholders of King Eagle (Tianjin) were also required to register their equity pledge arrangement by the Equity Pledge Agreement with King Eagle (China). However, the Company faces uncertainty with respect to future actions by the PRC government that could significantly affect King Eagle (Tianjin)’s financial performance and the enforceability of the VIE Agreements.

On July 6, 2021, the PRC government issued the Opinions on Strictly Cracking Down on Illegal Securities Activities, calling for: (i) tightening oversight of data security, cross-border data flow and administration of classified information, as well as amendments to relevant regulations to specify responsibilities of overseas listed Chinese companies with respect to data security and information security; (ii) enhanced oversight of overseas listed companies as well as overseas equity fundraising and listing by Chinese companies; and (iii) extraterritorial application of China’s securities laws. As the Opinions on Strictly Cracking Down on Illegal Securities Activities were recently issued, there is great uncertainty with respect to the interpretation and implementation thereof. We will closely monitor further developments.

In addition, on July 10, 2021, the Cyberspace Administration of China (the “CAC”) issued the Measures for Cybersecurity Review, or the Measures, which proposed to authorize the relevant government authorities to conduct cybersecurity review on a range of activities that affect or may affect national security, including listings in foreign countries by companies that possess the personal data of more than one million users. On January 4, 2022, the CAC issued the New Measures for Cybersecurity Review (the “New Measures”), which amended the Measures for Cybersecurity Review (Draft Revisions) released on July 10, 2021. As our VIE has less than one million customers, 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.

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 months ended December 31, 2024 included in this report.

Financial Operations Overview

Results of operations for the three months ended December 31, 2024 and 2023

	Three Months Ended December 31,
	2024						2023
	Amount			% of revenue			Amount			% of revenue

Revenues	$	356,519			100.0	%		562,158			100.0	%
Cost of revenues		55,683			15.6			149,347			26.6
Gross profit		300,836			84.4			412,811			73.4
Operating expenses:
General and administrative expenses		652,433			183.0			547,819			97.4
Selling expense		346,489			97.2			431,988			76.8
Total operating expenses		998,922			280.2			979,807			174.2
Loss from operations		(698,086	)		(195.8	)		(566,996	)		(100.8	)
Other income		47,079			13.2			32,190			5.7
Loss before income taxes		(651,007	)		(182.6	)		(534,806	)		(95.1	)
Income tax expense		-			-			-			-
Net loss	$	(651,007	)		(182.6	)%		(534,806	)		(95.1	)%

Revenues

For the three months ended December 31, 2024 and 2023, revenues amounted to $356,519 and $562,158, respectively.

The following tables present disaggregated revenues for the three months ended December 31, 2024 and 2023:

	Three Months Ended December 31,
	2024		2023

Retail product sale	$	78,457	$	506,333
Wholesale product sale		-		1,805
Commission		-		11,046
Equipment service		278,062		8,668
Training		-		34,306
Total	$	356,519	$	562,158

	Three Months Ended December 31,
	2024		2023

Performance obligations satisfied at a point in time	$	78,457	$	553,490
Performance obligations satisfied over time		278,062		8,668
Total	$	356,519	$	562,158

We recognized our revenue on a gross basis, net of sub-charges and value-added tax (“VAT”) of gross sales.

Our retail revenue primarily included the sale of consumer health care and health-related household products to our customers via our mobile application, King Eagle Mall, which was launched in July 2020. Our wholesale revenue was derived from our new online platform, Kun Zhi Jian, which was launched in October 2022. This new online platform focuses on promoting and selling our own brand of preventive health care related products, such as the thermal therapy cabin, to our wholesalers.

We have developed more revenue streams since December 2023: (i) commission revenue, generating through the Mini Program by selling health care instruments on behalf of third parties on a commission basis; (ii) equipment service revenue, generating through providing cards for medical consultation service online and selling prepaid cards to our customers for the use of card-operated health screening equipment located at the Kun Zhi Jian Customer Service Center; (iii) training revenue, generating through offering training program provided by a local health care service team; and (iv) technical service revenue, generating through promoting vendors’ products or businesses on online platform.

We recognized commission revenue upon the completion of delivery of the sales order to the end customer. We recognized the equipment service revenue upon the completion of medical consultation service and consuming the prepaid cards. We recognized training revenue upon completion of training sessions by our customers. We recognized technical service revenue upon the completion of promoting vendors’ products or businesses on our platform.

Compared to the three months ended December 31, 2023, we generated $356,519 or 36.6% lower revenue for the same period in 2024 due to the substantially sharp decrease in Retail. For the three months ended December 31, 2024, we focused our business on equipment services. The market for health care equipment has potential growth in the future as more and more people looking for professional health care assistance after COVID-19.

Cost of revenue

Our cost of revenue for the three months ended December 31, 2024 was $55,683 or 62.72% decrease over our cost of revenue for the three month period ended December 31, 2023 of $149,347. This primarily included the purchase of consumer health care and health related household products from our suppliers and payments of maintaining health screening equipment and training fees to our third-party trainers. During the quarter ended December 31, 2024, we made our retail product sales through our King Eagle Mall and Kun Zhi Jian Mini Program. We also offered equipment service through the Kun Zhi Jian Mini Program. We pay an equipment service fee that includes a prepaid card activation fee and a technical support fee. Our costs of training revenue consist of training fees, accommodations, and transportation of the third-party trainers.

We incurred a higher cost of revenue related to our equipment service revenue for the three months ended December 31, 2024 compared to the same period in 2023 because we generated significantly equipment service revenue from selling prepaid cards during the three months ended December 31, 2024 as discussed above.

We disaggregated our cost of revenue for the three months ended December 31, 2024 and 2023 as follows:

	Three Months Ended December 31,
	2024		2023

Retail	$	12,087	$	123,135
Wholesale		-		919
Equipment service fee		43,596		4,987
Training fee		-		20,306
Total	$	55,683	$	149,347

Gross profit

	Three Months Ended December 31,
	2024				2023

Retail product sales	$	66,370	84.6	%		383,198	75.7	%
Wholesale product sales		-	-			886	49.1
Commissions		-	-			11,046	100.0
Equipment service		234,466	84.3			3,681	42.5
Training		-	-			14,000	40.8
Total	$	300,836	84.4	%		412,811	73.4	%

For the three months ended December 31, 2024 and 2023, our overall gross profit and margin was $300,836 or 84.4%, and $412,811 or 73.4%, respectively. Our gross profit or margin for the equipment service for the three months ended December 31, 2024 was significantly higher than that for the same period in 2023. When our new online platform, Kun Zhi Jian, was launched in October 2022, we refocused on selling dietary supplements, prepaid health screening cards, and physiotherapy equipment to our retail customers which have higher profit margins.

The gross margins for our commission, equipment service, and training for the three months ended December 31, 2024 were nil, 84.3%, and nil, respectively. As we introduced these four additional revenue streams in or after November 2023, the gross margins for these revenue streams were 100.0%, 42.5%, and 40.8%, respectively, for the same period in 2023.

Operating expenses

Our operating expenses consist of general and administrative expenses and selling expense. For the three months ended December 31, 2024 and 2023, our total operating expenses were $998,922 and $979,807, respectively. The slight increase in operating expenses for the three months ended December 31, 2024 compared to the three months ended December 31, 2023 was primarily due to an increase of $104,614 in general and administrative expenses offset by a decrease of $85,499 in selling expenses.

General and administrative expenses

General and administrative expenses for the three months ended December 31, 2024 and 2023 were $652,433 and $547,819, respectively. Our general and administrative expenses for the three months ended December 31, 2024 and 2023 were comprised of the following:

	Three Months Ended December 31,
	2024		2023
Employee compensation and benefits	$	213,023	$	163,578
Office rent and building management		98,607		91,436
Office supplies and meeting		4,072		13,773
Professional services fee		279,395		149,895
Travel, transportation, and gasoline		10,184		46,591
Meals and entertainment		11,930		53,855
Depreciation and amortization		22,850		11,958
Others		12,372		16,733
Total	$	652,433	$	547,819

The increase in general and administrative expenses during the three month period ended December 31, 2024 by $104,614 was triggered by increases in employee compensation and benefits of $49,445 and professional service fees of $129,500, and offset by decreases in meals and entertainment of $41,925 and in travel, transportation, and gasoline of $36,407. The increase in employee compensation and benefits was due to more subsidiaries operating during the three months ended December 31, 2024. The increase in professional service fees resulted from more outsourcing, which also resulted in decreased in-house expenditures for travel, transportation, and gasoline and for meals and entertainment.

Selling expense

Selling expenses for the three months ended December 31, 2024 and 2023 were $346,489 and $431,988, respectively. Our selling expenses for the three months ended December 31, 2024 and 2023 were comprised of the following:

	Three Months Ended December 31,
	2024		2023
Service agents	$	161,184		308,607
Employee compensation and benefit		74,949		67,472
Rental for equipment		54,950		-
Office supplies and meeting		23,125		35,958
Travel, transportation and gasoline		5,543		15,265
Meals and entertainment		1,505		3,290
Depreciation and amortization		17,255		299
Advertising		7,978		1,097
Total	$	346,489		431,988

The decrease in selling expenses for the three months ended December 31, 2024 was primarily driven by a decrease in service agent fees of $147,423, offset by an increase in equipment rental of $54,950. To further streamline our selling costs, we no longer engaged external customer support services; however, we rented several pieces of health care equipment for promotional activities during the three months ended December 31, 2024.

Other income

Other income primarily included bank interest income, government grants, investment income from cooperative enterprise, and foreign exchange gain or loss. Our other income for the three months ended December 31, 2024 and 2023 was $47,079 and $32,190, respectively. During the three months ended December 31, 2023, we recognized government grants from the City of Tianjin of $31,817. We recognized a $36,525 gain on write-offs of long-term payables and a $14,486 gain on the disposal of an associated company for the three month period ended December 31, 2024.

Income tax expense

For both the three month periods ended December 31, 2024 and 2023, the income tax expense of the Company was nil. Due to the net loss before income tax, the Company recognized a full valuation recognition against its deferred tax assets, which mainly included net operating loss carryforwards, as management believes it is more likely than not that the Company will not realize its net operating loss carryforwards in the near future or before they expire.

Net loss

As a result of the factors discussed above, for the three months ended December 31, 2024 and 2023, our net loss amounted to $651,007 and $534,806, respectively.

Foreign currency translation adjustment

The functional currency of our operations in the PRC is Chinese Yuan or Renminbi (“RMB”), while the functional currency of our operation in Hong Kong is Hong Kong Dollars (“HKD”). The financial statements are translated to U.S. dollars using the period end rates of exchange for assets and liabilities; equity is translated at historical exchange rates; and average rates of exchange (for the period) are used for revenues and expenses and cash flows. Transaction gains and/or losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. As a result of foreign currency translation, which is a noncash adjustment, we reported a foreign currency translation gain of $281,895 and loss of $145,966 for the three months ended December 31, 2024 and 2023, respectively. This non-cash loss had the effect of increasing our reported comprehensive loss.

Comprehensive loss

We recognized a comprehensive loss of $369,112 for the three months ended December 31, 2024 compared to a comprehensive loss of $680,772 for the same period in 2023.

Liquidity and capital resources

As of December 31, 2024 and September 30, 2024, we had a cash and cash equivalents balance of $207,391 and $82,184, respectively.

For the three months ended December 31, 2024, net cash provided by operating activities totaled $40,503. Operating cash outflow was mainly attributable to our net loss of $651,007 and a decrease in operating lease liabilities of $88,601, partially offset by an increase in amounts due to related parties of $248,808 and other payable from third parties of $79,040.

Net cash used in investing activities totaled $11,070 and was related to the purchase of property, plant and equipment of $38,811 and the purchase of an intangible asset of $77, offset by the disposal of an associated company of $27,818 during the three months ended December 31, 2024.

Net cash provided by financing activities totaled $ 112,755 and was related to a capital contribution of $71,250 and proceeds from bank borrowings of $99,033, offset by the payment of finance lease liabilities of $57,528 during the three months ended December 31, 2024.

The effect of exchange rate change on cash totaled $16,981. The resulting change in cash for the period was an increase of $125,207.

For the three months ended December 31, 2023, net cash used in operating activities totaled $303,608. Operating cash outflow was mainly attributable to our net loss of $534,806 and a decline in customer advances of $1,323,176, offset by a decrease in inventory of $56,732 and the receipt of an advance from a related party of $1,508,580.

There was no financial activity during the three months ended December 31, 2023.

The effect of exchange rate change on cash totaled $10,379. The resulting change in cash for the period was a decrease of $337,237.

The following table sets forth a summary of changes in our working capital as of December 31, 2024 and September 30, 2024:

	December 31,			September 30,
	2024			2024

Current Assets	$	457,105		$	548,518
Current Liabilities		8,655,244			8,546,420
	$	(8,198,139	)	$	(7,997,902	)

We require cash of approximately $7.3 million within the next twelve months, primarily related to third-party vendor payables and related-party payables. As of December 31, 2024 and September 30, 2024, we had received customer advances in the amount of approximately $0.6 million and $0.6 million, respectively. We anticipate that the majority of the revenue will be recognized in fiscal year 2025. Management has agreed that the amount received is non-refundable. However, this term is not bound by any agreement. Therefore, the customers may have the right to challenge and demand the advances be refunded under relevant commercial laws or regulations. Additionally, we had an approximately $0.05 million and $0.3 million commitment related to purchase and service agreements as of December 31, 2024 and September 30, 2024, respectively.

In an effort to support and maintain our financial position and operations, to fulfill our contractual commitments, and to meet the demands from our customers for refund of their advance payments, the Company focused on increasing its revenue through its online platform. In November 2023, we launched Kun Zhi Jian Mini Program and explored four additional revenue streams. Simultaneously, our directors and stakeholders continue to support our operation financially. We believe that such measures will improve our liquidity in the next twelve months. If we are not able to increase revenue or obtain any financing, we may be unable to continue as a going concern.

Going Concern Consideration

The financial statements included in this Quarterly Report have been prepared in conformity with accounting principles generally accepted in the United States of America which contemplate continuation of the Company as a going concern. The going-concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed on the financial statements. The Company’s ability to continue as a going concern depends on the liquidation of its current assets. For the three months ended December 31, 2024, the Company experienced cash inflows from operating activities of $45,864, incurred a net loss of $651,007, and had negative working capital of $8,198,139. These conditions raise substantial doubt about the ability of the Company to continue as a going concern.

The Company continues to monitor its operations to help refine its financial liquidity. Options under consideration in the review process include, but are not limited to, increase of sales through the Company’s online business, reduction of overhead costs, fund advance from the Company’s stockholders and directors, or financing through the issuance of shares. The Company has been focusing on increasing its revenue through its online platform and trimming its overhead costs. For example, it reduced lease payments and decreased office supplies expense. Additionally, the Company obtained capital funding of approximately $0.6 million from its shareholders to meet its working capital requirements. In order to continue as a going concern for the next 12 months, the Company is focusing on promoting and selling its own brand of preventive health care products to wholesalers through Kun Zhi Jian, an online platform launched in October 2022, streamlining its overhead costs, or obtaining financing or capital funding from its stockholders or directors. In November 2023, the Company launched Kun Zhi Jian Mini Program. The Company leveraged the health care expertise and technology with local health care service providers, offered health screening and monitoring at the Kun Zhi Jian customer service center, and promoted health care supplements and products to its customers and members. However, the Company cannot provide any assurance that it will be able to increase revenue, or that it will be able to successfully implement its business plan, or that financing will be available to it on commercially acceptable terms, if at all. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. The directors will continue to support the group by providing adequate financial assistance to enable the group to continue its business operations for the foreseeable future.

Contractual Obligations and Other Commitments

We had the following contractual obligations and commercial commitments as of December 31, 2024:

	Payments Due by Period
	Less Than 1 Year		1 to 3 Years		3 to 5 Years		More Than 5 Years		Total
Contractual Obligations:
Operating lease obligations	$	187,659	$	-	$	-	$	-	$	187,659
Finance lease obligations		172,202		37,170		-		-		172,202
Short-term borrowing		97,544		-		-		-		97,544
Purchase and service agreements		56,101		-		-		-		56,101

Total contractual obligations	$	513,506	$	37,170	$	-	$	-	$	550,676

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements, including arrangements that would affect our liquidity, capital resources, market risk support, credit risk support, or other benefits.

Future Financings

We will continue to rely on loans from our directors and major shareholders and on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of equity securities or arrange for debt or other financing to fund our operations and other activities, or if we are able, there is no guarantee that existing shareholders will not be substantially diluted.

Critical Accounting Policies

We regularly evaluate the accounting policies and estimates that we use to make budgetary and financial statement assumptions. A complete summary of these policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

See Note 2 to the financial statements included herewith and Note 2 to the financial statements in the Company’s Form 10-K for the fiscal year ended September 30, 2024 previously filed with the SEC.

Recent Accounting Pronouncements

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to respond to this item.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures.

We maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15I under the Securities Exchange Act of 1934, as amended. In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Based on their evaluation as of the end of the quarter ended December 31, 2024, our chief executive officer and our chief financial officer and principal accounting manager, concluded that our disclosure controls and procedures were not effective such that the information relating to our Company, required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms; and (ii) is accumulated and communicated to our management, including our chief executive officer, to allow timely decisions regarding required disclosure as a result of the material weaknesses in our internal control over financial reporting due to the existence of the following material weaknesses:

●	A lack of sufficient and adequately trained internal accounting and finance personnel with appropriate understanding of U.S. GAAP and SEC reporting requirements;

●	A lack of segregation of duties within significant accounts;

●	A lack of a functioning audit committee and a majority of outside directors on the Company’s board of directors.

Management’s Report on Internal Control over Financial Reporting

As of December 31, 2024, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in the 2013 updated Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on that evaluation, management concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of U.S. GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that are considered to be material weaknesses as described above. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or quarterly financial statements will not be prevented or detected on a timely basis.

Notwithstanding the existence of these material weaknesses in our internal control over financial reporting, our management believes that the financial statements included in its reports fairly present in all material respects the Company’s financial condition, results of operations, and cash flows for the periods presented. We continue to evaluate the effectiveness of our internal controls and procedures on an on-going basis. We are currently hiring additional personnel in financial reporting and accounting, and we are providing training to newly hired personnel. In addition, once our cash position improves, we plan to hire an experienced controller and work to build an internal accounting team with sufficient in-house expertise in U.S. GAAP reporting. However, due to the limited cash flow we are currently having, we cannot assure you when we will be able to implement those remediation methods.

Because we are a smaller reporting company, this report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.

(b) Changes in internal controls over financial reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) during the fiscal quarter ended December 31, 2023 covered by this report that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting other than the facts disclosed above.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry, or investigation before or by any court, public board, government agency, self-regulatory organization, or body pending or, to the knowledge of the executive officers of our Company, threatened against or affecting our Company or our common stock, in which an adverse decision could have a material adverse effect.

ITEM 1A. RISK FACTORS

As a smaller reporting company, we are not required to respond to this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

Exhibit Number		Description

31.1		Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act
31.2		Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act
32.1		Certification of Chief Executive Officer Under Section 1350 as Adopted Pursuant Section 906 of the Sarbanes-Oxley Act
32.2		Certification of Chief Financial Officer Under Section 1350 as Adopted Pursuant Section 906 of the Sarbanes-Oxley Act
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	KUN PENG INTERNATIONAL LTD

Date: February 14, 2025	By:	/s/ Zhuang Richun
		Zhuang Richun, President

Date: February 14, 2025	By:	/s/ Zhang Yuanyuan
		Zhang Yuanyuan , Chief Financial Officer

Kun Peng International Ltd. 10-Q