Company: PAVS
Filing Date: 2025-08-04
Form Type: 20-F
Source: 0001929980-25-000590
Chunk: 9

Company: Paranovus Entertainment Technology Ltd.
Filing Date: 2025-08-04
Form: 20-F
Item: Item 3
Chunk 9
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 Increased cybersecurity threats and attacks, including computer viruses, hacking and ransomware attacks, are constantly evolving and pose a risk to our systems and networks. Security breaches, improper use of our systems and unauthorized access to our data and information by employees and others may pose a risk that sensitive data may be exposed to unauthorized persons or to the public. We also have access to sensitive or personal data or information that is subject to privacy laws and regulations. Our systems and processes may be unable to prevent material security breaches, and such breaches could adversely affect our business, results of operations, financial position and reputation.

BW’s business is heavily dependent on TikTok’s operation in the U. S.

By securing a majority interest in BW, we expand into marketing-commerce field and capitalize on the growing interests demand for TikTok-driven e-commerce and related solutions. BW operates through its two wholly owned subsidiaries, engaging in e-commerce business on TikTok as well as providing e-commerce solutions to customers. This business currently relies heavily on TikTok as its primary sales and marketing platform, and any disruptions, regulatory restrictions, or changes to the platform’s operations could have a material adverse effect on the business, financial condition, and results of operations.

Furthermore, these newer advertising and e-commerce channels often evolve rapidly and can be subject to disruptions beyond our control. For example, lawmakers in the United States, Europe, and Canada have intensified efforts to restrict or regulate access to TikTok due to national security concerns. On April 24, 2024, President Biden signed a bill requiring ByteDance to divest TikTok by January 19, 2025, or face a potential ban in the United States. Although ByteDance did not sell TikTok by the deadline, on January 20, 2025, President Trump issued an executive action delaying the enforcement of the TikTok ban for 75 days. Additionally, several U. S. states, governmental agencies, and institutions have raised similar concerns, leading to localized restrictions and prohibitions on TikTok’s usage.

As laws and regulations governing digital platforms continue to evolve, any restrictions or outright bans on TikTok could significantly impact BW’s ability to conduct business, as BW relies on the platform for product sales, advertising, and customer engagement. Furthermore, failure by BW, its employees, or third-party partners to comply with emerging regulations could expose it to regulatory investigations, legal liabilities, fines, or other penalties. Any sudden loss of access to TikTok or limitations on its functionality could require BW to rapidly shift to alternative sales channels, which