Company: PAVS
Filing Date: 2025-08-04
Form Type: 20-F
Source: 0001929980-25-000590
Chunk: 186

Company: Paranovus Entertainment Technology Ltd.
Filing Date: 2025-08-04
Form: 20-F
Item: Item 18
Chunk 186
---
,000,000Class A Ordinary shares issued to the two Purchasers. The gross proceeds to the Company from this transaction were approximately $4million.

On March 14, 2022, the Company entered into a certain equity transfer agreement with 2Lab3 LLC for the purchase of 100% of the equity interest of 2Lab3 LLC at a consideration of approximately $6million. The total consideration paid for the Equity Interests is1,375,000Class A ordinary shares of the Company. The Company issued an aggregate of1,375,000Class A ordinary shares of the Company to certain transaction on March 28, 2023. The total compensation cost was $7,081,250.

On July 17, 2024, the Company entered into a certain securities purchase agreement (the “ SPA”) with certain investors (the “ Purchasers”), pursuant to which the Company agreed to sell up to60,000,000Class A ordinary shares, par value $0.01each (the “ Class A Ordinary Shares”), at a per share purchase price of $0.45(the “ Offering”). The gross proceeds to the Company from this Offering are approximately $27,000,000, before deducting any fees or expenses. The transaction was closed on August 1, 2024.

Non-controlling Interest

Non-controlling interests represent the interest of non-controlling shareholders in Paranovus Entertainment Technology Limited based on their proportionate interests in the equity of that company adjusted for their proportionate share, which is39% to49% of the particular subsidiaries, of income or losses from operations. SeeNote 1for details of the Company and its operating subsidiaries ownership.

Statutory reserve

The Company is required to make appropriations to certain reserve funds, comprising the statutory reserve and the discretionary reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“ PRC GAAP”). Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to50% of the entity’s registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors.

  F-28               
  Table of Contents  

Warrants

In October 2019, the Company granted to the underwriters warrants to purchase up to a total of 184,000 ordinary shares (equal to 8% of the aggregate number of ordinary shares sold in the offering