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CORRESP
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filename1.htm

SCHLUETER
& ASSOCIATES, P.C.

5290
DTC PARKWAY, SUITE 150

GREENWOOD
VILLAGE, CO 80111

TELEPHONE:
+1-303-292-3883

FACSIMILE:
+1-303-648-5663

Email:
hfs@schlueterintl.com

May
19, 2023

U.S.
Securities and Exchange Commission

100
F Street, N.E.

Washington,
D.C. 20549

Attn:
Scott Anderegg

    Re:
    Kun
    Peng International Ltd.

    Annual
    Report on Form 10-K

    Filed
    December 29, 2022

    File
    No. 333-169805

Dear
Mr. Anderegg:

We
represent Kun Peng International Ltd. (the “Company”) as US counsel. We are submitting herewith Amendment No. 1 to the Annual
Report on Form 10-K as filed under the Securities Exchange Act of 1933, as amended, on December 29, 2022 (the “Annual Report”).

The
purpose of this letter is to respond to the comment letter dated April 26, 2023 from the Division of Corporation Finance (the “Staff”)
of the U.S. Securities and Exchange Commission (the “Commission” or “SEC”) relating to the above-referenced Annual
Report. For your convenience, the comments have been reproduced below, followed by the Company’s response.

Annual
Report on Form 10-K filed on December 29, 2022

Regulatory
Overview – Legal and Operational Risks, page 5

    1.
    Please
    revise your disclosure to explain whether the VIE structure is used to provide investors with exposure to foreign investment in China-based
    companies where Chinese law prohibits direct foreign investment in the operating companies. For each risk factor listed here, please
    provide a cross reference to the specific page that the risk factor starts on in your filing. A general reference to the page number
    of the beginning of the risk factors section is not sufficient for this purpose.

Response:

The
Company has revised the disclosure on page 5 to explain that the VIE structure is used to provide investors with exposure to foreign
investment in China-based companies where Chinese law prohibits direct foreign investment in the operating companies. The Company has
also subdivided the risks into categories to make it more clear which risks are associated with the VIE structure and has added a cross
reference in each risk factor to the specific page that the risk factor starts.

U.S.
Securities and Exchange Commission

May19,
2023

Page
2

    2.
    Please
    provide prominent disclosure about the legal and operational risks associated with being based in or having the majority of the company’s
    operations in China. Your disclosure should make clear whether these risks could result in a material change in your operations and/or
    the value of your securities or could significantly limit or completely hinder your ability to offer or continue to offer securities
    to investors and cause the value of such securities to significantly decline or be worthless. Your disclosure should address how
    recent statements and regulatory actions by China’s government, such as those related to the use of variable interest entities
    and data security or anti-monopoly concerns, have or may impact the company’s ability to conduct its business, accept foreign
    investments, or list on a U.S. or other foreign exchange. Please disclose the location of your auditor’s headquarters and whether
    and how the Holding Foreign Companies Accountable Act, as amended by the Consolidated Appropriations Act, 2023, and related regulations
    will affect your company.

Response:

The
Company has revised all disclosure throughout the Annual Report, including the summary risk factors in Item 1 and “Risk Factors”
in Item 1A, regarding the various legal and operational risks of conducting substantially all of the Company’s operations in China,
including disclosure related to regulatory actions by the Chinese government regarding the use of VIEs, data security and anti-monopoly
concerns and related to the Trial Measures. The Company has also included the location of the Company’s auditor and how the Holding
Foreign Companies Accountable Act, as amended by the Consolidated Appropriations Act, 2023, will affect the Company.

    3.
    Clearly
    disclose how you will refer to the holding company, subsidiaries, and VIEs when providing the disclosure throughout the document
    so that it is clear to shareholders which entity the disclosure is referencing and which subsidiaries or entities are conducting
    the business operations. Refrain from using terms such as “we” or “our” when describing activities or functions
    of a VIE. For example, disclose, if true, that your subsidiaries and/or the VIE conduct operations in China, that the VIE is consolidated
    for accounting purposes but is not an entity in which you own equity, and that the holding company does not conduct operations.

Response:

The
Company has revised the disclosure to include definitions as to the Company, each of its subsidiaries, the VIE and the VIE’s wholly-owned
subsidiary. The Annual Report has further been revised to indicate which entities are conducting the business operations. The Company
has also disclosed that the VIE is consolidated for accounting purposes but is not an entity in which the Company owns equity, and that
the Company is a holding company and does not conduct business operations.

    4.
    Please
    amend your disclosure here and risk factors sections to state that, to the extent cash in the business is in the PRC/Hong Kong or
    a PRC/Hong Kong entity, the funds may not be available to fund operations or for other use outside of the PRC/Hong Kong due to interventions
    in or the imposition of restrictions and limitations on the ability of you, your subsidiaries, or the consolidated VIEs by the PRC
    government to transfer cash.

Response:

The
Company has revised the Annual Report to add further disclosure that cash in its entities in the PRC/Hong Kong may not be available to
fund operations or for other use outside of the PRC/Hong Kong due to interventions in or the imposition of restrictions and limitations
on the ability of the Company’s subsidiaries or VIE by the PRC government to transfer cash.

U.S.
Securities and Exchange Commission

May
19, 2023

Page
3

    5.
    To
    the extent you have cash management policies that dictate how funds are transferred between you, your subsidiaries, the consolidated
    VIEs or investors, summarize the policies, and disclose the source of such policies (e.g., whether they are contractual in nature,
    pursuant to regulations, etc.); alternatively, state on the cover page and in the prospectus summary that you have no such cash management
    policies that dictate how funds are transferred.

Response:

The
Company has disclosed under “Item 1. Business - Implications of Being a Holding Company – Transfers of Cash to and from Our
Subsidiaries” that it does not have any cash management policies that dictate how funds are transferred.

    6.
    We
    note your disclosure in your first bullet point that the VIE agreements provides you with “effective control over and enable
    us to obtain substantially all of the economic benefits arising from these business operations.” You make similar disclosures
    in your fourth bullet point here and on page 9 under the caption “Contractual Arrangements” and in other disclosures
    in your filing. Any references to control or benefits that accrue to you because of the VIE should be limited to a clear description
    of the conditions you have satisfied for consolidation of the VIE under U.S. GAAP. Additionally, your disclosure should clarify that
    you are the primary beneficiary of the VIE for accounting purposes. Please also disclose, if true, that the VIE agreements have not
    been tested in a court of law.

Response:

The
Company has deleted the references to control and economic benefits from the first and fourth bullet points under Item 1. Business -
Regulatory Overview – Legal and Operational Risks - Risks Related to our VIE Structure. In addition, the Company has added
disclosure under “Item 1. Business – Corporate History and Structure - Contractual Arrangements” regarding the conditions
that the Company has satisfied for consolidation of the VIE under U.S. GAAP, that the Company is the primary beneficiary of the VIE for
accounting purposes and that VIE agreements have not been tested in a PRC court of law.

    7.
    We
    note your disclosure of your legal and operational risks. Please include here and provide a risk factor that specifically addresses
    the risk arising from the legal system in China, including risks and uncertainties regarding the enforcement of laws and that rules
    and regulations in China can change quickly with little advance notice; and the risk that the Chinese government may intervene or
    influence your operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in Chinabased
    issuers, which could result in a material change in your operations. Acknowledge any risks that any actions by the Chinese government
    to exert more oversight and control over foreign investment in China-based issuers could significantly limit or completely hinder
    your ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline
    or be worthless. In addition, for each category of risks identified here, please provide a cross-reference to the more detailed discussion
    of these risks in the risk factor section of your filing.

Response:

The
Company has provided further risk factor disclosure associated with conducting business in the PRC arising from the legal system in China,
including: (i) the uncertainties regarding the enforcement of laws and rules and regulations in China, which can change quickly; (ii)
that the Chinese government may intervene or influence the Company’s operations at any time; and (iii) that the Chinese government
may exert more control over foreign investment in China-based issuers, all of which could result in a material change in the Company’s
operations and cause
the value of its securities to significantly decline. Each additional risk factor has been provided with a cross-reference to the more
detailed disclosure in the Annual Report.

U.S.
Securities and Exchange Commission

May
19, 2023

Page
4

Contractual
Arrangements, page 9

    8.
    Disclose
    the uncertainties regarding the status of the rights of the Nevada holding company with respect to its contractual arrangements with
    the VIE, its founders and owners, and the challenges the company may face enforcing these contractual agreements due to legal uncertainties
    and jurisdictional limits. We note that you have included a diagram illustrating our corporate structure. Please revise your diagram
    to include a dotted line to designate your relationship with your VIE rather than a solid line.

Response:

The
Company has added disclosure regarding the status of the Company as a primary beneficiary of the VIE, King Eagle (Tianjin) Technology
Co. Ltd., and that, under U.S. GAAP, it is required to consolidate the assets and liabilities of its VIE on the Company’s consolidated
financial statements. The disclosure further reflects the uncertainties and risks associated with the contractual agreements with the
VIE. In addition, the corporate structure diagram has been revised to include a dotted line to reflect the Company’s relationship
with its VIE.

Our
Business, page 11

    9.
    Provide
    a clear description of how cash is transferred through your organization. Disclose your intentions to distribute earnings or settle
    amounts owed under the VIE agreements. Quantify any cash flows and transfers of other assets by type that have occurred between the
    holding company, its subsidiaries, and the consolidated VIEs, and direction of transfer. Quantify any dividends or distributions
    that a subsidiary or consolidated VIE have made to the holding company and which entity made such transfer, and their tax consequences.
    Similarly quantify dividends or distributions made to U.S. investors, the source, and their tax consequences. Your disclosure should
    make clear if no transfers, dividends, or distributions have been made to date. Describe any restrictions on foreign exchange and
    your ability to transfer cash between entities, across borders, and to U.S. investors. Describe any restrictions and limitations
    on your ability to distribute earnings from the company, including your subsidiaries and/or the consolidated VIEs, to the parent
    company and U.S. investors as well as the ability to settle amounts owed under the VIE agreements. Provide cross-references to the
    condensed consolidating schedule and the consolidated financial.

Response:

The
Company has added further disclosure regarding how cash is transferred throughout its organization, including a statement that to date
no transfers have occurred between the Company, its subsidiaries and the VIE and no dividends or distributions have been made to the
Company or to any U.S. investors. The disclosure also includes any restrictions and limitations on the Company’s ability to distribute
earnings, including cross references to the condensed consolidating schedule and consolidated financials.

    10.
    We
    note that the consolidated VIEs constitute a material part of your consolidated financial statements. Please provide in tabular form
    a condensed consolidating schedule that disaggregates the operations and depicts the financial position, cash flows, and results
    of operations as of the same dates and for the same periods for which audited consolidated financial statements are required. The
    schedule should present major line items, such as revenue and cost of goods/services, and subtotals and is aggregated intercompany
    amounts, such as separate line items for intercompany receivables and investment in subsidiary. The schedule should also disaggregate
    the parent company, the VIEs and its consolidated subsidiaries, the WFOEs that are the primary beneficiary of the VIEs, and an aggregation
    of other entities that are consolidated. The objective of this disclosure is to allow an investor to evaluate the nature of assets
    held by, and
the operations of, entities apart from the VIE, as well as the nature and amounts associated with intercompany transactions. Any intercompany
amounts should be presented on a gross basis and when necessary, additional disclosure about such amounts should be included in order
to make the information presented not misleading. Provide disclosure regarding the potential impact climate change may have on your operations.

U.S.
Securities and Exchange Commission

May
19, 2023

Page
5

Response:

The
Company has prepared a condensed consolidating schedule that disaggregates the operations of the Company, its non-VIE subsidiaries and
the VIE and depicts the financial position, cash flows and results of operations of each entity for the same periods for which audited
consolidated financial statements are required.

Regulations,
page 19

    11.
    Disclose
    each permission or approval that you, your subsidiaries, or the VIEs are required to obtain from Chinese authorities to operate your
    business. State whether you, your subsidiaries, or VIEs are covered by permissions requirements from the China Securities Regulatory
    Commission (CSRC), Cyberspace Administration of China (CAC) or any other governmental agency that is required to approve the VIE’s
    operations, and state affirmatively whether you have received all requisite permissions or approvals and whether any permissions
    or approvals have been denied. Please also describe the consequences to you and your investors if you, your subsidiaries, or the
    VIEs: (i) do not receive or maintain such permissions or approvals, (ii) inadvertently conclude that such permissions or appr