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~~March 31, ~~2024~~2025

☐ 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,~~Banbidian ~~Chaoyang District Beijing, PRC 100025~~Village

Gaobeidian Town, Chaoyang District

Beijing, PRC CN 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~~May 1315, 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.	3837
	Item 3. Quantitative and Qualitative Disclosures About Market Risk.	4648
	Item 4. Controls and Procedures.	4749
PART II.	Other Information	4850
	Item 6. Exhibits.	4851
	Signatures	4952

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,
			March 31,				September 30,
	Note		2025		~~2024~~		2024		~~2024~~
Assets
Current assets
Cash and cash equivalents			$	27,379	$	~~207,391~~	$	82,184		~~82,184~~
Advance and prepayments	4	4		32,740		~~48,231~~		178,954		~~178,954~~
Other receivables	5	5		171,337		~~180,879~~		251,588		~~251,588~~
Inventory	6	6		14,071		~~18,138~~		15,700		~~15,700~~
Amount due from related parties	10	10		82,682		~~2,466~~		20,092		~~20,092~~
Total current assets						457,105				548,518
Other receivables	10			82,682				20,092
Noncurrent assets
Total current assets				328,209				548,518
Property and equipment, net		7				275,568				292,198
Noncurrent assets
Intangible assets, net		8				2,437				2,548
Property and equipment, net	7			193,708				292,198
Security deposits						15,494				16,116
Intangible assets, net	8			2,397				2,548
Operating lease right-of-use assets		14				194,612				284,524
Security deposits				15,585				16,116
Finance lease right-of-use assets		14				250,914				309,445
Operating lease right-of-use assets	14			15,063				284,524
Investment in associate held for sale						-				15,743
Finance lease right-of-use assets	14			205,803				309,445
Others						9,704				10,094
Investment in associate held for sale				33,754				15,743
Total noncurrent assets						748,729				930,668
Others				9,761				10,094
Total assets					$	1,205,834			$	1,479,186
Total noncurrent assets				476,071				930,668
Liabilities
Total assets			$	804,280			$	1,479,186
Current liabilities
Liabilities
Short-term borrowing		15				97,544				-
Current liabilities
Trade and other payables						3,197,103				3,208,426
Short-term borrowing	15			98,116				-
Deferred revenue		9				593,992				584,116
Trade and other payables				3,560,393				3,208,426
Payroll payable						169,569				120,310
Deferred revenue	9			493,589				584,116
Tax payable						114,760				128,297
Payroll payable				104,995				120,310
Amounts due to related parties		10				4,122,415				4,069,413
Tax payable				116,076				128,297
Operating lease obligations, current portion		14				187,659				238,979
Amounts due to related parties	10			4,117,163				4,069,413
Finance lease obligations, current portion		14				172,202				196,879
Operating lease obligations, current portion	14			4,400				238,979
Total current liabilities						8,655,244				8,546,420
Finance lease obligations, current portion	14			163,013				196,879
Noncurrent liabilities
Total current liabilities				8,657,745				8,546,420
Operating lease obligations, net of current portion		14				-				44,622
Noncurrent liabilities
Finance lease obligations, net of current portion						37,170				76,862
Operating lease obligations, net of current portion	14			-				44,622
Total noncurrent liabilities						37,170				121,484
Finance lease obligations, net of current portion				-				76,862
Total liabilities					$	8,692,414			$	8,667,904
Total noncurrent liabilities				-				121,484
Commitment and contingencies										-
Total liabilities			$	8,657,745			$	8,667,904
Equity
Commitment and contingencies								-
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				-				-
Equity
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
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; no shares issued and outstanding as of March 31, 2025 and September 30, 2024	11			-				-
Additional paid-in capital		11				420,606				349,356
Common stock, $0.0001 par value, 1,000,000,000 shares authorized; 400,000,000 shares issued and outstanding as of March 31, 2025 and September 30, 2024	11			40,000				40,000
Accumulated deficits						(8,420,078	)			(7,774,600	)
Additional paid-in capital	11			278,834				349,356
Accumulated other comprehensive income						482,029				200,368
Accumulated deficits				(8,612,955	)			(7,774,600	)
Total stockholders’ equity						(7,477,443	)			(7,184,876	)
Accumulated other comprehensive income				440,656				200,368
Non-controlling interests						(9,137	)			(3,842	)
Total stockholders’ equity				(7,853,465	)			(7,184,876	)
Total equity						(7,486,580	)			(7,188,718	)
Non-controlling interests				-				(3,842	)
Total liabilities and equity					$	1,205,834			$	1,479,186
Total equity				(7,853,465	)			(7,188,718	)
Total liabilities and equity			$	804,280			$	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 March 31,								Six Months Ended March 31,
					Three Months Ended December 31,
	Note		2025				2024				2025			2024
	Note				2024				2023
Revenue, net			$	609,285			$	364,508			$	965,804		$	926,666
Revenue, net		12			$	356,519			$	562,158
Cost of revenue				(98,605	)			(99,456	)			(154,288	)		(248,383	)
Cost of revenue		12				(55,683	)			(149,347	)
Gross profit				510,680				265,052				811,516			678,283
Gross profit						300,836				412,811
Operating expenses
Operating expenses
General and administrative expenses				312,614				528,457				965,047			1,076,276
General and administrative expenses						652,433				547,819
Selling expense				512,908				320,226				859,397			752,214
Selling expense						346,489				431,988
Total operating expenses				825,522				848,683				1,824,444			1,828,490
Total operating expenses						998,922				979,807
Loss from operations				(314,842	)			(583,631	)			(1,012,928	)		(1,150,207	)
Loss from operations						(698,086	)			(566,996	)
Other income (expenses):
Other income:
Interest income				12				22				22			379
Interest income						10				357
Other (expenses) income				(4,182	)			(462	)			42,887			31,371
Other income						47,069				31,833
Share of profit from investment in associate				(21,444	)			-				(21,444	)		-
Total other income, net						47,079				32,190
Gain from investment				147,579				-				147,579			-
Loss before income taxes						(651,007	)			(534,806	)
Total other income (expenses), net				121,965				(440	)			169,044			31,750
Income tax expense		13				-				-
Loss before income taxes				(192,877	)			(584,071	)			(843,884	)		(1,118,457	)
Net loss						(651,007	)			(534,806	)
Income tax expense	11			-				13,364				-			13,364
Less: Net loss attributable to non-controlling interest						(5,529	)			(13,872	)
Net loss				(192,877	)			(597,435	)			(843,884	)		(1,131,821	)
Net loss attributable to Kun Peng International Ltd						(645,478	)			(520,934	)
Less: Net loss attributable to non-controlling interest				-				(20,434	)			(5,529	)		(34,306	)
Foreign currency translation adjustment						281,895				(145,966	)
Net loss attributable to Kun Peng International Ltd				(192,877	)			(577,001	)			(838,355	)		(1,097,515	)
Comprehensive loss						(369,112	)			(680,772	)
Foreign currency translation adjustment				(41,427	)			97,909				240,468			(48,057	)
Less: Comprehensive loss attributable to non-controlling interest						(5,295	)			(14,117	)
Comprehensive loss				(234,304	)			(499,526	)			(603,416	)		(1,179,878	)
Comprehensive loss attributable to Kun Peng International Ltd					$	(363,817	)		$	(666,655	)
Less: Comprehensive loss attributable to non-controlling interest				(54	)			(20,434	)			(5,349	)		(34,306	)
Net loss per share attributable to common stockholders
Comprehensive loss attributable to Kun Peng International Ltd			$	(234,250	)		$	(479,092	)		$	(598,067	)	$	(1,145,572	)
Basic and diluted					$	(0.002	)		$	(0.001	)
Net loss per share attributable to common stockholders
Weighted average shares used to compute net loss per share attributable to common stockholders						400,000,000				400,000,000
Basic and diluted			$	(0.000	)		$	(0.001	)		$	(0.002	)	$	(0.003	)
Weighted average shares used to compute net loss per share attributable to common stockholders				400,000,000				400,000,000				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(70,~~250~~522	)		-			-		71(70,~~250~~522	)		-			71(70,~~250~~522	)
Net loss attributable to common stockholders		-		-		-			(~~645~~838,~~478~~355	)		-		(~~645~~838,~~478~~355	)		-			(~~645~~838,~~478~~355	)
Disposal of a subsidiary		-		-		-			-			-		-			9,191			9,191
Net loss attributable to noncontrolling interest		-		-		-			-			-		-			(5,529	)		(5,529	)
Foreign currency translation adjustment		-		-		-			-			~~281~~240,~~661~~288		~~281~~240,~~661~~288			~~234~~180			~~281~~240,~~895~~468
Balance, December 31, 2024		400,000,000	$	40,000	$	420,606		$	(8,420,078	)	$	482,029	$	(7,477,443	)	$	(9,137	)	$	(7,486,580	)
Balance, March 31, 2025		400,000,000	$	40,000	$	278,834		$	(8,612,955	)	$	440,656	$	(7,853,465	)	$	-		$	(7,853,465	)

	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~~1,~~934~~097,515	)		-			(~~520~~1,~~934~~097,515	)		-			(~~520~~1,~~934~~097,515	)
Net loss attributable to noncontrolling interest		-		-		-		-			-			-			(1334,~~872~~306	)		(1334,~~872~~306	)
Foreign currency translation adjustment		-		-		-		-			(~~145~~48,~~966~~057	)		(~~145~~48,~~966~~057	)		~~(245~~64	)		(~~146~~47,~~211~~993	)
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, March 31,2024		400,000,000	$	40,000	$	597,801	$	(6,900,677	)	$	378,684		$	(5,844,192	)	$	315,243		$	(6,199,435	)
Balance		400,000,000	$	40,000	$	597,801	$	(6,~~324~~900,~~096~~677	)	$	~~280~~378,~~775~~684		$	(5,~~405~~844,~~520~~192	)	$	~~(295~~315,~~118~~243	)	$	(56,~~700~~199,~~638~~435	)

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
	Six Months Ended March 31,
	Three Months Ended December 31,
	2025			2024
	2024			2023
Cash flows from operating activities
Net loss	$	(~~651~~843,~~007~~884	)	$	(~~534~~1,~~806~~131,821	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		4488,~~339~~625			1233,~~676~~989
Amortization of right-of-use assets		~~127~~235,~~435~~413			79164,~~962~~365
Share of profit from investment in associate		21,444			-
Gain on investment of a subsidiary		(147,579	)		-
Changes in operating assets and liabilities
Advance and prepayments		~~125~~140,~~707~~820			(85102,~~784~~855	)
Trade receivables		-			(2312,~~118~~516	)
Other receivables		7983,~~040~~790			(~~143~~236,~~133~~019	)
Inventory		(31,~~090~~116	)		5667,~~732~~134
Trade payables		571,~~385~~828,116			~~129~~195,~~172~~018
Other payables and accrual		201,~~710~~234,126			~~129~~454,~~702~~872
Deferred revenue		32(67,~~913~~624	)		(1,~~323~~235,~~176~~253	)
Payroll payable		5416,~~724~~003			1833,~~835~~623
Amounts due to related parties		~~248~~(2,~~808~~458,960	)		1,~~508~~535,~~580~~989
Tax payable		(~~2,499~~158	)		(4659,~~090~~276	)
Operating lease liabilities		(88,601	)		(83,160	)
Lease liabilities		(134,958	)		(97,258	)
Net cash provided by (used in) operating activities		45,864			(303,608	)
Net cash used in operating activities		(3,710	)		(390,008	)
Cash flows from investing activities
Acquisition of property and equipment		(38,~~811~~590	)		(4458,~~008~~596	)
Acquisition of intangible assets		(77	)		-
Net cash used in investing activities		(38,590	)		(58,596	)
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		98,467			-
Proceeds from bank borrowings		99,033			-
Payment of finance lease liabilities		(107,201	)		-
Payment of finance lease liabilities		(57,528	)		-
Net cash used in financing activities		(8,734	)		-
Net cash provided by financing activities		112,755			-
Effect of exchange rate changes on cash		(3,771	)		12,564
Effect of exchange rate changes on cash		(22,342	)		10,379
Net change in cash and cash equivalents		(54,805	)		(436,040	)
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~~27,~~391~~379		$	~~120~~21,~~343~~540
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~~ MARCH 31, ~~2023~~2025

(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	9540% 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~~common ~~Stock~~stock, and 10,000,000 designated as $0.0001 par value ~~Preferred~~preferred ~~Stock~~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 8, 2022, the Company’s 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.

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).

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~~March 31, ~~2024~~2025 and ~~2023~~2024 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~~March 31, ~~2024~~2025, the Company incurred cash ~~inflows~~outflows from operating activities of $453,~~864~~710, the Company incurred a net loss of $~~651~~843,~~007~~884, and the Company had negative working capital of $8,~~198~~329,~~139~~536. 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 and bank loans. The Company has been focusing on increasing ~~its~~ 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~~440,~~029~~656 and $200,368 for the quarter ended ~~December~~March 31, ~~2024~~ 2025 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:

	Hong Kong Dollar (HKD)		Chinese Renminbi (RMB)
As of December 31, 2024 (Closing Rate)
As of March 31, 2025 (Closing Rate)
United States dollar ($1)		7.~~7677~~7799		7.~~2993~~2567
For the three months ended December 31, 2024 (Average Rate)
For the six months ended March 31, 2025 (Average Rate)
United States dollar ($1)		7.~~7744~~7771		7.~~1896~~2308

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)
For the six months ended March 31, 2024 (Average Rate)
United States dollar ($1)		7.~~8140~~8172		7.~~2247~~2064

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~~March 31, ~~2024~~2025 and ~~2023~~2024, 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~~March 31, ~~2024~~2025, 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~~March 31, ~~2024~~2025 and ~~2023~~2024.

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~~March 31, ~~2024~~2025 and ~~2023~~2024, 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~~March 31, ~~2024~~2025 and ~~2023~~2024 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 our 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 March 31, 2025 and 2024.

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~~March 31, ~~2024~~2025 and ~~2023~~2024 were $~~346~~859,~~489~~397 and $~~431~~752,~~988~~214, 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~~ March 31, ~~2024~~2025 and ~~2023~~2024, we recorded marketing and promotional service fees to our service agents in an amount of $ ~~161~~495,~~184~~001 and $~~308~~494,~~607~~352, 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~~March 31, ~~2024~~2025 and September 30, 2024, $~~306~~177,~~922~~841 (~~RMB 2~~RMB1,~~240~~290,~~316~~539) 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 1516. In meeting its liquidity requirements, the Company continues to focus on increasing its revenue ~~through~~ 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~~ 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 Company’s total revenue for the ~~quarters~~six months ended ~~December~~March 31, ~~2024,~~ 2025 and ~~2023~~2024.

For the ~~quarter~~six months ended ~~December~~March 31, ~~2024~~2025, ~~two~~one major ~~vendors~~vendor accounted for 4769.095% ~~and 21.65%~~ of the Company’s total cost of sales.

For the ~~quarter~~six months ended ~~December~~ March 31, ~~2023~~2024, ~~three~~one major ~~vendors~~vendor accounted for 3310.37%, ~~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~~five 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., and 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, and 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~~March 31, ~~2024~~2025 and September 30, 2024, and the consolidated statements of operations and cash flows for the ~~three~~six ~~month~~months ~~periods~~ ended ~~December~~March 31, ~~2024~~2025 and ~~2023~~2024, 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~~ 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”), and 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~~March 31, ~~2024~~2025

	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~~494		$	61		$	~~206~~26,~~598~~824		$	-		$	~~207~~27,~~391~~379
Intercompany receivables-current		-			~~553~~544,~~064~~296			-			2,~~415~~483,~~803~~574			(23,~~968~~027,~~867~~870	)		-
Total current assets		-			~~578~~555,~~613~~220			61			2,~~847~~800,~~298~~798			(23,~~968~~027,~~867~~870	)		~~457~~328,~~105~~209
Intercompany receivables-noncurrent		-			4			-			-			(4	)		-
Total non-current assets		34,160			89,016			-			659,717			(34,164	)		748,729
Total noncurrent assets		34,160			37,922			-			438,153			(34,164	)		476,071
Total assets		34,160			~~667~~593,~~629~~142			61			3,~~507~~238,~~015~~951			(3,~~003~~062,~~031~~034	)		1804,~~205,834~~280
Intercompany payables		1,~~129~~160,~~508~~985			1,~~806~~839,~~395~~843			~~931~~937			9281,~~490~~734			(3,~~029~~083,~~324~~499	)		-
Total current liabilities		1,~~129~~160,~~508~~985			21,~~014~~980,~~217~~395			~~993~~999			8,~~539~~598,~~850~~865			(3,~~029~~083,~~324~~499	)		8,~~655~~657,~~244~~745
Total non-current liabilities		-			-			-			37,170			-			37,170
Total noncurrent liabilities		-			-			-			-			-			-
Total liabilities		1,~~129~~160,~~508~~985			21,~~014~~980,~~217~~395			~~993~~999			8,~~577~~598,~~020~~865			(3,~~029~~083,~~324~~499	)		8,~~692~~657,~~414~~745
Total shareholders’ equity		(1,~~095~~126,~~348~~825	)		(1,~~346~~387,~~588~~253	)		(~~932~~938	)		(5,~~060~~359,~~868~~914	)		2621,~~293~~465			(7,~~477~~853,~~443~~465	)
Non-controlling interests		-			-			-			~~(9,137~~-	)		-			~~(9,137~~-	)
Total equity		(1,~~095~~126,~~348~~825	)		(1,~~346~~387,~~588~~253	)		(~~932~~938	)		(5,~~070~~359,~~005~~914	)		2621,~~293~~465			(7,~~486~~853,~~580~~465	)
Total liabilities and equity	$	34,160		$	~~667~~593,~~629~~142		$	61		$	3,~~507~~238,~~015~~951		$	(3,~~003~~062,~~031~~034	)	$	1804,~~205,834~~280

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 noncurrent 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 noncurrent 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
	Six Months Ended March 31, 2025
	Parent Only			Non-VIE and Non-WFOE Subsidiaries Consolidated			WFOE			VIE and VIE’s Subsidiaries Consolidated			Eliminating Adjustments			Consolidated Totals
Revenue	$	-		$	-		$	-		$	~~356~~965,~~519~~804		$	-		$	~~356~~965,~~519~~804
Intercompany revenue		-			~~137~~266,~~778~~156			-			-			(~~137~~266,~~778~~156	)		-
Cost of revenue and related tax		-			~~225~~444			-			55153,~~458~~844			-			55154,~~683~~288
Gross profit		-			~~137~~265,~~553~~712			-			~~301~~811,~~061~~960			(~~137~~266,~~778~~156	)		~~300~~811,~~836~~516
Total operating expenses		~~135~~166,~~349~~826			~~175~~336,~~744~~800			7			~~687~~1,~~822~~320,811			-			~~998~~1,~~922~~824,444
Intercompany operating expenses		-			-			-			~~137~~266,~~778~~156			(~~137~~266,~~778~~156	)		-
Loss from operations		(~~135~~166,~~349~~826	)		(3871,~~191~~088	)		(7	)		(~~524~~775,~~539~~007	)		-			(~~698~~1,~~086~~012,928	)
Other (expense) income					(362	)					45,407			2,034			47,079
Other (income) expense		-			(316	)		-			167,326			2,034			169,044
Loss before income taxes		(~~135~~166,~~349~~826	)		(3871,~~553~~404	)		(7	)		(~~479~~607,~~132~~681	)		2,034			(~~651~~843,~~007~~884	)
Income tax expense		-			-			-			-			-			-
Net (loss) income	$	(135,349	)	$	(38,553	)	$	(7	)	$	(479,132	)	$	2,034		$	(651,007	)
Net loss	$	(166,826	)	$	(71,404	)	$	(7	)	$	(607,681	)	$	2,034		$	(843,884	)

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

Revenue	$	-		$	-		$	-		$	926,666		$	-		$	926,666
Intercompany revenue		-			392,731			-			-			(392,731	)		-
Cost of revenue and related tax		-			749			-			247,634			-			248,383
Gross profit		-			391,982			-			679,032			(392,731	)		678,283
Total operating expenses		115,013			400,202			7			1,313,268			-			1,828,490
Intercompany operating expenses		-			-			-			392,731			(392,731	)		-
Loss from operations		(115,013	)		(8,220	)		(7	)		(1,026,967	)		-			(1,150,207	)
Other income		-			33			-			31,717			-			31,750
Loss before income taxes		(115,013	)		(8,187	)		(7	)		(995,250	)		-			(1,118,457	)
Income tax expense		-			-			-			13,364			-			13,364
Net loss	$	(115,013	)	$	(8,187	)	$	(7	)	$	(1,008,614	)	$	-		$	(1,131,821	)

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
	Six Months Ended March 31, 2025
	Parent Only			Non-VIE and Non-WFOE Subsidiaries Consolidated			WFOE			VIE and VIE’s Subsidiary Consolidated			Eliminating Adjustments			Consolidated
Net loss	$	(~~135~~166,~~349~~826	)	$	(3871,~~553~~404	)	$	(7	)	$	(~~479~~607,~~132~~681	)	$	2,034		$	(~~651~~843,~~007~~884	)
Intercompany receivables		-			(4330,~~042~~738	)		-			(~~340~~24,~~911~~839	)		~~383~~55,~~953~~577			-
Intercompany payables		~~159~~190,~~349~~826			3457,~~202~~138			-			~~192~~(188,~~559~~996	)		(~~386~~58,~~110~~968	)		-
Net cash provided by (used in) operating activities		-			12,~~308~~148			(7	)		44(4,~~686~~494	)		(~~123~~1,357	)		45(3,~~864~~710	)
Net cash (used in) provided by investing activities		-			-			-			(53,507	)		42,437			(11,070	)
Net cash used in investing activities		-			-			-			(38,590	)		-			(38,590	)
Net cash provided by (used in) financing activities		-			-			-			153,487			(40,732	)		112,755
Net cash used in financing activities		-			-			-			(8,734	)		-			(8,734	)
Effect of exchange rate fluctuation on cash	$	-		$	(12,~~557~~635	)	$	(3	)	$	(192,~~199~~490	)	$	(1,~~583~~357	)	$	(223,~~342~~771	)

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

Net loss	$	(115,013	)	$	(8,187	)	$	(7	)	$	(1,008,614	)	$	-		$	(1,131,821	)
Intercompany receivables		-			(84,647	)		-			(520,556	)		605,203			-
Intercompany payables		173,013			14,220			69			419,562			(606,864	)		-
Net cash (used in) provided by operating activities		-			(5,918	)		62			(382,491	)		(1,661	)		(390,008	)

Net cash used in investing activities		-			-			-			(58,596	)		-			(58,596	)

Effect of exchange rate fluctuation on cash	$	-		$	(3,121	)	$	1		$	14,024		$	1,661		$	12,564

	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 March 31, 2025 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:

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
	March 31, 2025			September 30, 2024
Assets
Current assets
Cash and cash equivalents	$	~~206~~26,~~598~~824		$	81,132
Trade receivable – intercompany		2,~~415~~483,~~803~~574			2,316,724
Advance and prepayments		2322,~~899~~810			147,091
Other receivables – third parties		~~180~~170,~~394~~837			251,069
Inventory		1814,~~138~~071			15,700
Amount due from a related party		282,~~466~~682			20,092
Total current assets		2,847,298			2,831,808
Other receivables		82,682			20,092
Total current assets		2,800,798			2,831,808
Noncurrent assets
Property and equipment, net		~~260~~190,~~858~~260			265,141
Intangible assets, net		76			-
Investment in associate held for sale		33,754			15,743
Investment in associate held for sale		-			15,743
Operating lease right-of-use assets		8,336			504,147
Operating lease right-of-use assets		147,869			504,147
Finance lease right-of-use assets		205,803			-
Finance lease right-of-use assets		250,914			-
Total noncurrent assets		438,153			785,031
Total noncurrent assets		659,717			785,031
Total assets	$	3,238,951		$	3,616,839
Total assets	$	3,507,015		$	3,616,839
Liabilities
Current liabilities
Short-term borrowing		9798,~~544~~116			-
Trade payables	$	12,~~953~~075,~~544~~013		$	1,952,026
Other payables and accrual		1,~~204~~443,~~182~~855			1,194,683
Deferred revenue		~~593~~493,~~992~~589			584,116
Intercompany payables		9281,~~490~~734			51,757
Payroll payable		~~128~~77,~~369~~849			93,391
Tax payable		~~110~~113,~~679~~035			119,291
Amounts due to related parties		4,~~040~~048,~~215~~261			3,998,164
Operating lease obligations-current portion		~~146~~4,~~633~~400			154,095
Finance lease obligations-current portion		~~172~~163,~~202~~013			196,879
Total current liabilities		8,~~539~~598,~~850~~865			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~~598,~~020~~865			8,465,886
Commitment and contingencies					-
Equity
Additional paid-in capital		~~762~~621,~~956~~184			389,356
Accumulated deficits		(56,~~939~~068,~~805~~359	)		(5,466,201	)
Accumulated other comprehensive income		~~115~~87,~~981~~261			109,401
Total stockholders’ equity		(5,~~060~~359,~~868~~914	)		(4,967,444	)
Non-controlling interests		~~(9,137~~	)		118,397
Total equity		(5,~~070~~359,~~005~~914	)		(4,849,047	)
Total liabilities and equity	$	3,~~507~~238,~~015~~951		$	3,616,839

The operating results of the VIE were as follows:

	2024			2023
	Three Months Ended March 31,						Six Months Ended March 31,
	Three Months Ended December 31,
	2025			2024			2025			2024
	2024			2023
Revenue, net	$	609,285		$	364,508		$	965,804		$	926,666
Revenue, net	$	356,519		$	562,158
Cost of revenue		(98,386	)		(98,753	)		(153,844	)		(247,634	)
Cost of revenue		(55,458	)		(148,881	)
Gross profit		510,899			265,755			811,960			679,032
Gross profit		301,061			413,277
Operating expenses
Operating expenses
General and administrative expenses		138,989			300,465			502,541			593,694
General and administrative expenses		363,552			293,229
Selling expense		622,378			462,829			1,084,426			1,112,305
Selling expense		462,048			649,477
Total operating expenses		761,367			763,294			1,586,967			1,705,999
Total operating expenses		825,600			942,706
Loss from operations		(250,468	)		(497,539	)		(775,007	)		(1,026,967	)
Loss from operations		(524,539	)		(529,429	)
Other income (expenses):
Other income:
Interest income		11			21			21			375
Interest income		10			354
Other (expenses) income		(4,227	)		(469	)		41,170			31,342
Other income		45,397			31,811
Share of profit from investment in associate		(21,444	)		-			(21,444	)		-
Total other income, net		45,407			32,165
Gain from investment		147,579			-			147,579			-
Loss before income taxes		(479,132	)		(497,264	)
Total other income (expenses), net		121,919			(448	)		167,326			31,717
Income tax expense		-			-
Loss before income taxes		(128,549	)		(497,987	)		(607,681	)		(995,250	)
Net loss		(479,132	)		(497,264	)
Income tax expense		-			13,364			-			13,364
Less: Net loss attributable to non-controlling interest		(5,529	)		(13,872	)
Net loss		(128,549	)		(511,351	)		(607,681	)		(1,008,614	)
Net loss attributable to Kun Peng International Ltd	$	(473,603	)	$	(483,392	)
Less: Net income (loss) attributable to non-controlling interest		-			13,825			(5,529	)		(47	)
Net loss attributable to Kun Peng International Ltd	$	(128,549	)	$	(525,176	)	$	(602,152	)	$	(1,008,567	)

The cash flows of the VIE were as follows:

	2024			2023
	Three Months Ended December 31,
	Six Months Ended March 31,
	2024			2023
	2025			2024
Cash flows from operating activities
Net loss	$	(~~479~~607,~~133~~681	)	$	(~~497~~1,~~264~~008,614	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization		3264,~~774~~607			~~420~~1,726
Amortization of right-of-use assets		87154,~~218~~991			2147,~~253~~306
Share of profit from investment in associate		21,444			-
Gain on investment of a subsidiary		(147,579	)		-
Changes in operating assets and liabilities
Advance and prepayments		119,~~310~~862			(70111,~~627~~617	)
Trade receivable - third parties		-			(23,118	)
Trade receivable- third parties		-			(12,516	)
Trade receivable - intercompany		(123,715	)		(65,947	)
Trade receivable- intercompany		(36,129	)		(32,742	)
Other receivables - third parties		44,664			(123,313	)
Other receivables- third parties		43,444			(201,683	)
Other receivable-related parties		34,362			-
Other receivables- intercompany		11,290			(487,814	)
Other receivables - intercompany		(217,196	)		(173,770	)
Inventory		1,116			67,134
Inventory		(3,090	)		56,732
Amount due from a related party		40,344			(13,876	)
Trade payable - third parties		54,231			129,172
Trade payable- third parties		1,823,463			195,018
Trade payable - intercompany		168,588			72,175
Trade payable- intercompany		78,996			117,390
Other payables and accrual - third parties		44,701			176,655
Other payables and accrual- third parties		1,257,711			521,313
Other payables and accrual - intercompany		23,971			60,103
Other payables and accrual- intercompany		(267,992	)		302,172
Deferred revenue		32(67,~~913~~624	)		(1,~~323~~235,~~176~~253	)
Payroll payable		3914,~~171~~885			2127,~~502~~498
Amounts due to related parties		~~234~~(2,~~899~~458,960	)		1,~~508~~535,~~580~~989
Tax payable		(21,~~108~~298	)		(4555,~~660~~642	)
Lease liabilities		(4651,~~874~~980	)		(2438,~~334~~283	)
Net cash provided by (used in) operating activities		44,686			(300,617	)
Net cash used in operating activities		(4,494	)		(382,490	)
Cash flows from investing activities
Purchase of equipment		(38,811	)		(44,008	)
Purchase of property, plant and equipment		(38,590	)		(58,596	)
Acquisition of intangible assets		(77	)		-
Net cash used in investing activities		(38,590	)		(58,596	)
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		98,467			-
Proceeds from bank borrowings		99,033			-
Payment of finance lease liabilities		(107,201	)		-
Payment of finance lease liabilities		(57,528	)		-
Net cash used in financing activities		(8,734	)		-
Net cash provided by financing activities		153,487			-
Effect of exchange rate changes on cash		(2,490	)		14,023
Effect of exchange rate changes on cash		(19,199	)		7,333
Net change in cash and cash equivalents		(54,308	)		(427,063	)
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~~26,~~599~~824		$	~~109~~20,~~825~~054

NOTE 4 - ADVANCE AND PREPAYMENTS

Prepayments consisted of the following:

	December 31,		September 30,
	March 31,		September 30,
	2024		2024
	2025		2024
Prepaid rent and building management and utilities	$	73,~~402~~041	$	13,200
Prepaid supplies(1)		15,~~931~~268		49,495
Prepaid income tax		5,~~024~~054		5,226
Prepaid professional services(2)		143,~~362~~690		104,742
Prepaid others		5,~~512~~687		6,291
Total prepayments	$	4832,~~231~~740	$	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.

⁽¹⁾

As of March 31, 2025 and September 30, 2024, the Company had prepaid supplies of $15,268 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 legal service fees for our PRC entities. The legal service fees will be amortized to general and administrative expenses using the straight-line method, over the service periods of October and November 2024.

As of March 31, 2025, the ending balance of prepaid professional services included $1,690, $574, and $1,240 for legal service fees, advertising fees and bookkeeping fees for our PRC entities. The legal service fees will be amortized to general and administrative expenses using the straight-line method over the service periods of April 2025. The advertising fees and bookkeeping fees 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:

	December 31,		September 30,
	March 31,		September 30,
	2024		2024
	2025		2024
Deposits	$	~~127~~125,~~091~~223	$	136,119
Advance to employees		~~542~~140		42,894
Advance to third-party company		3529,~~470~~014		34,912
Others		1716,~~776~~960		37,663
Total other receivables, net	$	~~180~~171,~~879~~337	$	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:

	December 31,		September 30,
	March 31,		September 30,
	2024		2024
	2025		2024
Finished goods	$	1814,~~138~~071	$	15,700
Total	$	1814,~~138~~071	$	15,700

NOTE 7 - PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following:

	December 31,			September 30,
	March 31,			September 30,
	2024			2024
	2025			2024
Leasehold improvements	$	~~198~~172,~~711~~317		$	199,563
Furniture and fixtures		61,~~961~~211			4,755
Computer equipment		~~308~~306,~~136~~048			291,386
Office equipment		61,~~591~~451			5,822
Subtotal		~~520~~481,~~399~~027			501,526
Property and equipment, gross		~~520~~481,~~399~~027			501,526
Less: accumulated depreciation		(~~244~~287,~~831~~319	)		(209,328	)
Total property and equipment, net	$	~~275~~193,~~568~~708		$	292,198

Depreciation expense was $44,~~246~~ 184 and $1221,~~586~~223 for the three months ended ~~December~~and $88,430 and $33,809 for the six months ended March 31, ~~2024~~2025 and ~~2023~~2024, respectively.

NOTE 8 - INTANGIBLE ASSETS

	December 31,			September 30,
	March 31,			September 30,
	2024			2024
	2025			2024
Trademarks	$	3,~~629~~695		$	3,692
Subtotal		3,~~629~~695			3,692
Less: accumulated amortization		(1,~~192~~298	)		(1,144	)
Total intangible assets, net	$	2,~~437~~397		$	2,548

Intangible assets consist of the Company’s trademarks of King Eagle Mall with a useful life of ten years. Approximately $1,~~045~~051, $1,~~343~~351, $~~548~~551, $35, $46499, $83 and $79125 will expire in July 2031, April 2031, April 2032, September 2032, October 2032, March 2033 and August 2034, respectively.

Amortization expense was $93 102 and $90 for the three months ended ~~December~~and $195 and $180 for the six months ended March 31, ~~2024~~2025 and ~~2023~~2024, respectively.

NOTE 9 - DEFERRED REVENUE

	December 31,		September 30,
	March 31,		September 30,
	2024		2024
	2025		2024
Advance payments from customers	$	~~593~~493,~~992~~589	$	584,116
Total deferred revenue	$	~~593~~493,~~992~~589	$	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~~March 31, ~~2024~~2025 and September 30, 2024, the Company had total deferred revenue of $~~593~~493,~~992~~ 589 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.~~30

The acquisition closed on April 7, 2024. As of March 31, 2025, 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~~March 31, ~~2024~~2025

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

King Eagle (Hangzhou) Health Technology Co., Ltd

40% held by King Eagle (Tianjin)

Advanced for operating expenses

82,682

Total

282,~~466~~682

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~~March 31, ~~2024~~2025

September 30, 2024

Ms. Chengyuan Li

One of the shareholders of King Eagle (Tianjin)

Filing Compare · Kun Peng International Ltd.