中概股收盘跌幅居前的个股为：幸福来跌35.57%，Dreamland跌25.74%，好定多跌18.3%，荣志集团跌 15.15%。(格隆汇) | 代码 | 名称 | 最新价 | 涨跌幅入 | 涨跌额 | 成交额 | | --- | --- | --- | --- | --- | --- | | PAVS | 幸福来 | 0.664 | -35.57% | -0.366 | 203.29万 | | TDIC | Dreamland | 0.750 | -25.74% | -0.260 | 234.86万 | | MAMK | 好定多 | 2.500 | -18.30% | -0.560 | 254.11万 | | NAAS | 能链智电 | 3.470 | -15.37% | -0.630 | 104.7万 | | SUGP | 荣志集团 | 8.010 | -15.15% | -1.430 | 51.04万 | ...

Core Viewpoint - The article highlights the emotional response of Wang Ting, a 92-year-old veteran and daughter-in-law of General Zhang Yunyi, during the commemoration of the 80th anniversary of the victory in the Chinese People's War of Resistance Against Japanese Aggression and the World Anti-Fascist War, reflecting on historical struggles and the importance of remembering history for future generations [3][4]. Group 1 - Wang Ting expressed her admiration for the grand military parade, reminiscing about her past experiences during the war [3]. - The article details Wang Ting's early life, including her family's escape from Japanese invasion and her subsequent participation in the liberation efforts [3][4]. - Wang Ting emphasizes the teachings of her father-in-law, General Zhang Yunyi, regarding the importance of education and professional knowledge for building a modern China [4]. Group 2 - The article notes that Wang Ting has been actively sharing her experiences through short videos on new media platforms, aiming to educate younger generations about the value of peace and the hardships faced in the past [4]. - The emotional impact of witnessing the military parade, including the release of 80,000 balloons and doves, is highlighted as a significant moment for Wang Ting [4]. - Wang Ting's commitment to continuous learning and sharing historical narratives is underscored, showcasing her dedication to preserving the memory of past struggles [4].

Core Viewpoint - The iron pot industry in GY County, Henan Province, has transformed from small workshops to a significant global player, producing around 70% of China's cast iron pots, with a complete industrial chain established [2][3]. Group 1: Industry Development - GY County has a rich history in iron pot production dating back to the Ming Dynasty, evolving from small-scale production to over 65 enterprises, including 46 pot manufacturers [2][3]. - The county produces over 70 million pots annually, with more than 380 models across various price ranges, showcasing a strong cluster effect in the industry [3]. - The establishment of a provincial quality inspection center for cast iron pots aims to enhance product quality and provide authoritative backing for local manufacturers [5][6]. Group 2: Challenges and Innovations - Despite production scale, GY County faces branding challenges, with local brands lacking national recognition compared to competitors like Zhangqiao [4]. - The industry struggles with low profit margins, with some manufacturers earning less than 2 yuan per pot, leading to intense price competition [4]. - Innovations are being pursued, including lighter pot designs and improved non-stick properties, to meet market demands and enhance competitiveness [6][7]. Group 3: Strategic Initiatives - The local iron pot association is promoting a dual-brand model to enhance brand recognition and profitability, with products under this model achieving four times the profit margin of traditional OEM products [7]. - A strategic partnership with Yao Mountain Laboratory aims to establish a research institute focused on overcoming automation and lightweight challenges in the industry [7][8]. - The formation of the Henan Guangkuo Tiandi Kitchenware Group seeks to consolidate resources and improve overall competitiveness in the market [8].

Core Viewpoint - Happiness Comes (PAVS) experienced a significant intraday increase of 9.55%, reaching a price of $0.78 per share, with a total market capitalization of $52.52 million [1] Financial Performance - As of March 31, 2024, the total revenue for Happiness Comes was $6.5448 million, reflecting a year-over-year decrease of 71.95% [1] - The net profit attributable to shareholders was -$10.1262 million, which represents a year-over-year increase of 85.88% [1] Company Overview - Paranovus Entertainment Technology Ltd. focuses on the AI-driven entertainment industry, specifically in developing AI-powered games and applications [1] - The company aims to provide immersive and engaging entertainment experiences through its AI-driven products and services [1]

Core Viewpoint - Happiness Comes (PAVS) experienced a stock price increase of 5.13% on August 11, closing at $0.82 per share, with a total market capitalization of $55.2163 million [1] Financial Performance - As of March 31, 2024, Happiness Comes reported total revenue of $6.5448 million, representing a year-over-year decrease of 71.95% [1] - The company recorded a net loss attributable to shareholders of $10.1262 million, which is an increase of 85.88% compared to the previous year [1] Company Overview - Paranovus Entertainment Technology Ltd. focuses on the AI-driven entertainment industry, specifically in developing AI-powered games and applications [1] - The company aims to provide immersive and engaging entertainment experiences through its AI-driven products and services [1]

Core Viewpoint - Happiness Comes (PAVS) experienced a significant intraday increase of 9.87%, reaching a price of $0.79 per share, with a total market capitalization of $53.1962 million as of 22:55 on August 8 [1] Financial Performance - As of March 31, 2024, the total revenue for Happiness Comes was $6.5448 million, representing a year-over-year decrease of 71.95% [1] - The net profit attributable to the parent company was -$10.1262 million, showing a year-over-year increase of 85.88% [1] Company Overview - Paranovus Entertainment Technology Ltd. focuses on the AI-driven entertainment industry, specifically in developing AI-powered games and applications to provide immersive and engaging entertainment experiences [1] - The company's team is dedicated to exploring new domains and delivering exceptional value through its AI-driven products and services [1]

Core Viewpoint - Happiness Comes (PAVS) experienced a 2.9% increase in stock price, reaching $0.78 per share, with a total market capitalization of $52.5 million as of August 7 [1] Financial Performance - As of March 31, 2024, Happiness Comes reported total revenue of $6.5448 million, a year-over-year decrease of 71.95% [1] - The company recorded a net loss attributable to shareholders of $10.1262 million, which represents an increase of 85.88% compared to the previous year [1] Industry Focus - Paranovus Entertainment Technology Ltd. specializes in AI-driven entertainment, focusing on the development of AI-powered games and applications [1] - The company aims to provide immersive and engaging entertainment experiences through its AI-driven products and services [1]

[Introductory Notes](index=3&type=section&id=INTRODUCTORY%20NOTES) [General Information](index=3&type=section&id=Introductory%20Notes) This section clarifies that company names in the annual report are translated or transliterated from their original Chinese legal names, indicating the company's operational ties to China - Names of certain companies in the annual report are translated or transliterated from their original Chinese legal names[14](index=14&type=chunk) [Forward-Looking Statements](index=3&type=section&id=FORWARD-LOOKING%20STATEMENTS) [Nature and Cautionary Note](index=3&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section outlines the nature of forward-looking statements within the report, emphasizing that they reflect current expectations and views of future events under the 'safe harbor' provisions - Forward-looking statements reflect current expectations and views of future events, made under '**safe harbor**' provisions[16](index=16&type=chunk) - Investors are cautioned **not to place undue reliance** on these statements due to evolving risks and uncertainties, and the company does not undertake to update them except as required by law[19](index=19&type=chunk) - Key terms identifying forward-looking statements include '**may**,' '**will**,' '**expect**,' '**anticipate**,' '**aim**,' '**estimate**,' '**intend**,' '**plan**,' '**believe**,' '**is/are likely to**,' '**potential**,' and '**continue**'[16](index=16&type=chunk) [ITEM 1. Identity of Directors, Senior Management and Advisers](index=4&type=section&id=ITEM%201.%20IDENTITY%20OF%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20ADVISERS) [Identity of Directors, Senior Management and Advisers](index=4&type=section&id=ITEM%201.%20IDENTITY%20OF%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20ADVISERS) This item is marked as 'Not applicable,' indicating that the company does not provide specific information regarding the identity of directors, senior management, and advisers in this section - This item is marked as '**Not applicable**'[20](index=20&type=chunk) [ITEM 2. Offer Statistics and Expected Timetable](index=4&type=section&id=ITEM%202.%20OFFER%20STATISTICS%20AND%20EXPECTED%20TIMETABLE) [Offer Statistics and Expected Timetable](index=4&type=section&id=ITEM%202.%20OFFER%20STATISTICS%20AND%20EXPECTED%20TIMETABLE) This item is marked as 'Not applicable,' indicating that the company does not provide specific information regarding offer statistics and expected timetable in this section - This item is marked as '**Not applicable**'[21](index=21&type=chunk) [ITEM 3. Key Information](index=4&type=section&id=ITEM%203.%20KEY%20INFORMATION) [A. [Reserved]](index=4&type=section&id=3.A.%20%5BReserved%5D) This sub-item is reserved and contains no information [B. Capitalization and Indebtedness](index=4&type=section&id=3.B.%20Capitalization%20and%20indebtedness.) This sub-item is marked as 'Not applicable,' indicating that the company does not provide specific information regarding capitalization and indebtedness in this section - This item is marked as '**Not applicable**'[22](index=22&type=chunk) [C. Reasons for the Offer and Use of Proceeds](index=4&type=section&id=3.C.%20Reasons%20for%20the%20offer%20and%20use%20of%20proceeds.) This sub-item is marked as 'Not applicable,' indicating that the company does not provide specific information regarding reasons for the offer and use of proceeds in this section - This item is marked as '**Not applicable**'[23](index=23&type=chunk) [D. Risk Factors](index=4&type=section&id=3.D.%20Risk%20factors.) This section highlights significant risks associated with investing in the company's ordinary shares, including those related to its evolving business model, dependence on TikTok, challenges in the AI industry, and operational risks in China - An investment in the company's ordinary shares involves a **high degree of risk**, requiring careful consideration of all information in the annual report[24](index=24&type=chunk) - The company is a holding company with substantial operations in China, subject to a legal and regulatory environment that differs from the United States[24](index=24&type=chunk) - New risks emerge frequently, and management cannot predict all risk factors or their full impact on business results[19](index=19&type=chunk) [Summary of Risk Factors](index=4&type=section&id=Summary%20of%20Risk%20Factors) This subsection provides a high-level overview of the significant risks, categorizing them into business-related, China-specific, and Class A Ordinary Shares-related risks - Investing in the company involves significant risks, including competition, government policies, natural disasters, key personnel dependency, user experience, AI industry risks, and limited operating history for BW[26](index=26&type=chunk)[27](index=27&type=chunk) - Risks related to doing business in China include uncertainties in PRC laws, data security oversight by CAC, CSRC approval for offerings, government intervention, difficulties for overseas regulators, and regulations on offshore special purpose companies[28](index=28&type=chunk)[33](index=33&type=chunk) - Risks related to Class A Ordinary Shares include potential delisting from Nasdaq, less shareholder protection under Cayman Islands law, unenforceability of certain judgments, and the possibility of being classified as a Passive Foreign Investment Company (PFIC)[33](index=33&type=chunk)[45](index=45&type=chunk) [Risks Related to Our Business](index=6&type=section&id=Risks%20related%20to%20Our%20Business) The company faces risks from its evolving business model, including the untested growth initiatives of its new acquisitions like BW and 2lab3, which have limited operating histories - The company has an evolving business model with untested growth initiatives, including the recent acquisition of **51% equity in BW** for TikTok e-commerce and solutions, and **2lab3** for AI entertainment[35](index=35&type=chunk)[212](index=212&type=chunk) - **2lab3** is a recently formed entity with little track record, facing significant challenges in an emerging AI entertainment industry, and expects to incur substantial expenses without guaranteed profitability[36](index=36&type=chunk) - The AI industry presents risks such as flawed algorithms, incomplete/biased data, ethical issues, uncertain commercial viability of generative AI, and intellectual property challenges with AI-generated content[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) - **BW's business** is heavily dependent on **TikTok's operations in the U.S.**, facing significant risks from potential regulatory restrictions or bans on the platform, which could materially affect its e-commerce activities[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) - **BW** operates in highly competitive and rapidly evolving social commerce and e-commerce enablement markets, competing with various players and platform operators, which could impact its market share and profitability[70](index=70&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) - The company's ability to continue as a **going concern is in doubt** due to a net loss of **$8,305,429** and cash outflow from operating activities of **$2,669,456** for FY2025, with an accumulated deficit of **$70,262,448**[44](index=44&type=chunk)[576](index=576&type=chunk) [Risks Related to Doing Business in China](index=10&type=section&id=Risks%20Related%20to%20Doing%20Business%20in%20China) The company faces substantial risks operating in China, including uncertainties in the PRC legal system, evolving data security and cybersecurity regulations, and potential requirements for CSRC approval for overseas listings - The **PRC legal system** is still developing, leading to uncertainties in the interpretation and enforcement of laws, which may make it difficult to predict outcomes of disputes[94](index=94&type=chunk)[95](index=95&type=chunk) - The company is subject to evolving cybersecurity and data protection laws (e.g., **PRC Cybersecurity Law, Data Security Law, PIPL**), with potential for significant penalties, service suspensions, or reputational harm for non-compliance[99](index=99&type=chunk)[100](index=100&type=chunk)[102](index=102&type=chunk)[104](index=104&type=chunk) - Uncertainty exists regarding the need for **CSRC approval** for overseas offerings, and future PRC government actions could significantly limit or hinder the company's ability to offer securities or affect its business operations[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) - PRC regulations on offshore special purpose companies (**SAFE Circular 37**) may subject PRC resident beneficial owners to penalties, limit capital injection into PRC subsidiaries, or restrict profit distribution[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - The company relies on dividends from PRC subsidiaries, which are subject to restrictions on distributable earnings, statutory reserves, and withholding taxes, potentially limiting its ability to fund operations or pay dividends[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) - Changes in international trade policies, particularly between the U.S. and China, including tariffs and sanctions, may adversely impact the company's business and operating results[140](index=140&type=chunk)[141](index=141&type=chunk)[143](index=143&type=chunk) [Risks Related to Our Class A Ordinary Shares](index=16&type=section&id=Risks%20Related%20to%20Our%20Class%20A%20Ordinary%20Shares) Risks related to the company's Class A Ordinary Shares include potential delisting from Nasdaq due to non-compliance with listing standards, less shareholder protection under Cayman Islands law, and potential adverse U.S. federal income tax consequences if classified as a Passive Foreign Investment Company (PFIC) - The company received a deficiency letter from **Nasdaq** on **July 11, 2025**, for failing to meet the **Minimum Bid Price Requirement ($1.00 for 30 consecutive business days)**, with a compliance period until **January 7, 2026**[146](index=146&type=chunk)[147](index=147&type=chunk) - Delisting from Nasdaq could lead to reduced liquidity, 'penny stock' classification, limited news coverage, and decreased ability to raise additional financing[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk)[154](index=154&type=chunk) - As a **Cayman Islands company**, its Memorandum and Articles of Association offer less protection to shareholders compared to U.S. corporations, potentially limiting the ability to bring claims[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk) - As a **foreign private issuer**, the company is exempt from certain U.S. proxy rules and Exchange Act reporting obligations, resulting in less detailed and frequent reporting than U.S. domestic public companies[160](index=160&type=chunk) - There is no assurance the company will not be a **Passive Foreign Investment Company (PFIC)** for U.S. federal income tax purposes, which could result in adverse tax consequences for U.S. holders of its shares[166](index=166&type=chunk) - The company's management team lacks U.S. public company experience, which could impair compliance with legal and regulatory requirements like the Sarbanes-Oxley Act[172](index=172&type=chunk)[173](index=173&type=chunk) [ITEM 4. Information on the Company](index=19&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) [A. History and Development of the Company](index=19&type=section&id=4.A.%20History%20and%20development%20of%20the%20company.) Paranovus Entertainment Technology Ltd. (formerly Happiness Biotech Group Limited) was incorporated in the Cayman Islands in 2018, undergoing significant strategic shifts by divesting historical businesses and pivoting towards AI and entertainment through acquisitions - Company incorporated in **Cayman Islands** on **February 9, 2018**, initially as 'Happiness Biotech Group Limited,' later changed to 'Paranovus Entertainment Technology Ltd.' in **March 2023**[180](index=180&type=chunk)[188](index=188&type=chunk) - Historically operated in nutraceuticals, e-commerce, internet information/advertising, and automobile sales in China, but has divested or suspended these businesses by **July 2024**[182](index=182&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk)[191](index=191&type=chunk)[200](index=200&type=chunk) - Acquired **100% of 2lab3** (AI-powered applications) in **March 2023** and **51% of Bomie Wookoo Inc.** (TikTok e-commerce) in **March 2025**, signaling a strategic shift to AI and marketing-commerce[189](index=189&type=chunk)[205](index=205&type=chunk) - Engaged in software development for an interactive game '**10,000 Lives**' (formerly 'Hollywood Sunshine') with Blueline, expected to launch in **Q4 2025**[192](index=192&type=chunk)[232](index=232&type=chunk) - Raised approximately **$27,000,000 gross proceeds** from a Class A Ordinary Shares offering in **August 2024**, with **$22,400,000** used for the BW acquisition[201](index=201&type=chunk)[479](index=479&type=chunk) [B. Business Overview](index=22&type=section&id=4.B.%20Business%20overview.) Paranovus Entertainment Technology Ltd. is a Cayman Islands holding company that has transitioned its operations from historical Chinese businesses to focus on AI and entertainment in the U.S. through 2lab3 and BW - The company is a holding company with no material operations of its own, currently operating through its wholly-owned subsidiary **2Lab3** and **51% owned subsidiary BW** in the U.S[211](index=211&type=chunk) - Historical operations in China (nutraceuticals, e-commerce, internet information/advertising, automobile sales) have been divested or suspended by **July 2024**, eliminating PRC business operations[211](index=211&type=chunk)[200](index=200&type=chunk) - The company's strategy is to expand into the marketing-commerce field and AI entertainment, capitalizing on TikTok-driven e-commerce and AI-powered solutions[212](index=212&type=chunk)[230](index=230&type=chunk) - The company faces significant legal and operational risks related to doing business in China, including evolving PRC laws and regulations on data security, anti-monopoly, and overseas offerings, though it has divested its PRC operations[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) [Overview of Our Company](index=22&type=section&id=Overview%20of%20our%20Company) Paranovus is a Cayman Islands holding company that has strategically shifted its focus from divested Chinese businesses to U.S.-based AI and entertainment, operating through 2lab3 and BW - Paranovus is a **Cayman Islands holding company** with current operations through **2Lab3** (wholly owned) and **BW** (**51% owned**) in the U.S[211](index=211&type=chunk) - Historically, the company engaged in nutraceuticals, e-commerce, internet information/advertising, and automobile sales in the PRC, all of which have been divested or suspended[211](index=211&type=chunk) - The acquisition of **2lab3** in **March 2023** expanded the company into AI and entertainment, and the acquisition of **BW** in **March 2025** further expanded into TikTok-driven e-commerce and solutions[212](index=212&type=chunk) - As of the report date, the company has **no business or operations in the PRC**, having faced various legal and operational risks related to the Chinese regulatory environment[213](index=213&type=chunk) [Cash Flows through Our Organization](index=24&type=section&id=Cash%20Flows%20through%20Our%20Organization) Cash transfers within the organization primarily involve the Company providing loans, capital contributions, and operating cash to its subsidiaries, and subsidiaries repaying these to the Company Cash Transfers Between Company and Subsidiaries (FY2023-FY2025) | The Company transfers cash to its subsidiaries by way of | FY2025 | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | cash dividends | $ - | $ - | $ - | | providing loans | $ - | $ - | $ - | | making capital contributions | $ - | $ - | $ 660,000 | | providing operating cash | $ - | $ - | $ 500,136 | | **Total** | **$ -** | **$ -** | **$ 1,160,136** | | The Company's subsidiaries transfer cash to the Company by way of | FY2025 | FY2024 | FY2023 | | repayment of loans | $ - | $ - | $ - | | repayment of operating cash | $ - | $ - | $ - | | **Total** | **$ -** | **$ -** | **$ -** | - A special cash dividend of **$0.015 per share** (**$375,000 total**) was paid on **August 17, 2020**; no other dividends have been made to shareholders[226](index=226&type=chunk) - PRC subsidiaries' ability to distribute dividends is restricted by PRC accounting standards, requiring **10% of after-tax profits** to fund a statutory reserve until it reaches **50% of registered capital**, and a **10% withholding tax** on dividends to foreign enterprise investors[227](index=227&type=chunk) [Products and Services](index=24&type=section&id=Products%20and%20Services) The company's current products and services are focused on e-commerce and AI entertainment, with BW providing TikTok-related solutions and 2Lab3 developing AI-powered applications like '10,000 Lives' - **BW** generates revenue through product sales on its own TikTok Shops, collaborative sales with KOLs, and B2B sales, also providing e-commerce enablement solutions like livestreaming operations and ad placement[228](index=228&type=chunk)[229](index=229&type=chunk) - The AI entertainment business aims to provide AI-driven games and applications; **2Lab3** discontinued '**SimTwin**' development due to performance issues[230](index=230&type=chunk)[231](index=231&type=chunk) - The interactive game '**10,000 Lives**,' integrating AI-generated content and celebrity partnerships, is being developed by Blueline for a mobile-only release expected in **Q4 2025**[232](index=232&type=chunk) - Legacy businesses in automobile sales, e-commerce, internet information/advertising, and nutraceuticals have been divested or suspended due to losses and strategic shifts[233](index=233&type=chunk)[234](index=234&type=chunk)[235](index=235&type=chunk)[239](index=239&type=chunk) [Vendors](index=25&type=section&id=Vendors) The company defines major vendors as those accounting for over 10% of overall purchases in any given period, and it had no such major vendors for its advertising services during the last three fiscal years - Major vendors are defined as those whose sales to the company accounted for more than **10% of overall purchases** in any given period[240](index=240&type=chunk) - The company had **no major vendors** for its advertising services during the last three fiscal years[240](index=240&type=chunk) [Sales and Marketing](index=25&type=section&id=Sales%20and%20Marketing) The company's sales and marketing strategies are tailored to its distinct business segments, leveraging social commerce platforms for e-commerce and a multifaceted digital approach for AI entertainment - **BW's e-commerce** sales and marketing strategy focuses on leveraging short-form video, livestreaming, and influencer (KOL) engagement on social commerce platforms like TikTok[241](index=241&type=chunk) - The AI entertainment business utilizes a multifaceted digital marketing approach, including social media, Search Engine Marketing (SEM), content marketing, and email marketing[242](index=242&type=chunk) - Sales efforts for AI entertainment will focus on direct sales via website and mobile app, supported by promotions and loyalty rewards, with success measured by sales growth, customer acquisition cost, and conversion rates[243](index=243&type=chunk) - Geographically, the company aims for a strong presence in **North America** for e-commerce and AI entertainment, with plans to expand AI entertainment into the **Asia-Pacific region** and emerging markets[246](index=246&type=chunk)[248](index=248&type=chunk) [Intellectual Property](index=26&type=section&id=Intellectual%20Property) The company's intellectual property includes the copyright for the game '10,000 Lives' and its domain name 'https://pavs.ai' - The company owns the copyright for the game '**10,000 Lives**' (formerly 'Hollywood Sunshine') as per a development agreement[249](index=249&type=chunk) - The company's intellectual property also includes its domain name '**https://pavs.ai**'[250](index=250&type=chunk) [Research and Development](index=26&type=section&id=Research%20and%20Development) Historically, the company's R&D focused on nutraceuticals, involving a detailed process from feasibility studies to CFDA approval, with current efforts focused on AI-related technologies - Historically, R&D efforts focused on upgrading and inventing new nutraceutical and dietary supplement products, involving lab tests, pilot production, safety assessments, and **CFDA registration**[251](index=251&type=chunk)[254](index=254&type=chunk) - As of the annual report date, the core R&D team consists of **three employees**, with future efforts directed towards developing AI-related technologies for services[42](index=42&type=chunk) [Insurance](index=26&type=section&id=Insurance) The company provides workers' compensation and medical insurance to its full-time employees in the U.S., adhering to federal and state requirements, and believes it is compliant with regulations - The company provides workers' compensation and medical insurance coverage for its full-time employees in the U.S., as required by applicable laws[251](index=251&type=chunk) - The company believes it complies with all applicable regulations and has made adequate provision for such coverage in its financial statements[251](index=251&type=chunk) [Seasonality](index=26&type=section&id=Seasonality) The company states that there is no seasonality impact on its e-commerce solutions or AI entertainment businesses - There is **no seasonality impact** to the business of E-Commerce solutions or the AI entertainment business[252](index=252&type=chunk) [Employees](index=26&type=section&id=Employees) The company has 25 full-time employees based in the U.S., all under employment contracts in accordance with U.S. laws, with historically good employee relations and no unionization - The company has **25 full-time employees** based in the U.S., with employment contracts in accordance with relevant U.S. laws[253](index=253&type=chunk) - Employees are not represented by a labor organization or covered by a collective bargaining agreement, and no work stoppages have been experienced[253](index=253&type=chunk) [Competitive Advantage](index=27&type=section&id=Competitive%20Advantage) For its e-commerce and e-commerce enablement solutions, the company's competitive advantages include platform-focused operational experience on TikTok, a robust network of influencers, and end-to-end support services for merchants - **BW's competitive advantages** include platform-focused operational experience on TikTok shops, enabling tailored content creation and store management[255](index=255&type=chunk) - The company maintains a robust influencer and content network through WooKoo, partnering with professionals to boost exposure and engagement for brands[256](index=256&type=chunk) - **BW** provides end-to-end e-commerce enablement solutions, leveraging its platform expertise to help merchants establish and grow TikTok Shops[257](index=257&type=chunk) [Regulations](index=27&type=section&id=Regulations) The company's operations are subject to a complex and evolving regulatory landscape in both the U.S. and China, covering advertising, consumer protection, intellectual property, and various tax and labor laws - **BW** is subject to U.S. laws and regulations concerning advertising, consumer protection (e.g., **FTC Act, Endorsement Guides, COPPA, ROSCA, UDAP, INFORM Consumers Act**), intellectual property (**Copyright Act, DMCA, Lanham Act**), and product-specific regulations[258](index=258&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk)[263](index=263&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk) - The company is subject to state and local sales and use tax laws, requiring compliance with reporting, registration, and remittance, even when marketplace facilitators assist in collection[268](index=268&type=chunk) - PRC foreign exchange regulations (e.g., **Foreign Currency Administration Regulations, Circular 37, Circular 19, Circular 16, Circular 28**) govern RMB convertibility, offshore investments by PRC residents, and capital settlement for foreign-invested enterprises[269](index=269&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk)[276](index=276&type=chunk) - PRC M&A Rules and regulations on overseas listings (e.g., **Trial Administrative Measures**) impose requirements for **CSRC approval** and filing procedures for domestic companies seeking overseas listings, with significant uncertainties in interpretation[281](index=281&type=chunk)[282](index=282&type=chunk) - PRC tax regulations (**EIT Law, VAT, Business Tax, Stamp Duty, Urban Maintenance Tax**) and labor laws (**Labor Contract Law, Social Insurance Law**) impose various obligations and potential liabilities on companies operating in China[296](index=296&type=chunk)[299](index=299&type=chunk)[300](index=300&type=chunk)[304](index=304&type=chunk)[306](index=306&type=chunk)[307](index=307&type=chunk)[308](index=308&type=chunk)[309](index=309&type=chunk)[323](index=323&type=chunk)[324](index=324&type=chunk) [C. Organizational Structure](index=33&type=section&id=4.C.%20Organizational%20structure) This section refers to 'Item 4.A. History and Development of the Company' for details on the company's organizational structure, indicating that the information is consolidated there - Information on the organizational structure is provided under '**Item 4.A. History and Development of the Company**'[328](index=328&type=chunk) [D. Property, Plants and Equipment](index=33&type=section&id=4.D.%20Property%2C%20Plants%20and%20Equipment) This section refers to 'Item 4.B. Business Overview' for information regarding the company's property, plants, and equipment, indicating that the details are integrated into the business overview - Information regarding property, plants and equipment is described under '**Item 4.B. Business Overview**'[328](index=328&type=chunk) [ITEM 4A. Unresolved Staff Comments](index=33&type=section&id=ITEM%204A.%20UNRESOLVED%20STAFF%20COMMENTS) [Unresolved Staff Comments](index=33&type=section&id=ITEM%204A.%20UNRESOLVED%20STAFF%20COMMENTS) This item is marked as 'Not required,' indicating that there are no unresolved staff comments to report - This item is marked as '**Not required**'[329](index=329&type=chunk) [ITEM 5. Operating and Financial Review and Prospects](index=33&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) [Overview](index=34&type=section&id=Overview) The company, a Cayman Islands holding entity, has shifted its operations to the U.S. through 2Lab3 (AI applications) and BW (TikTok e-commerce), having divested its historical Chinese businesses - The company is a **Cayman Islands holding company**, now operating through **2Lab3** and **Bomie Wookoo Inc.** in the U.S., after divesting historical PRC businesses[332](index=332&type=chunk)[333](index=333&type=chunk)[334](index=334&type=chunk) Key Financial Performance (FY2025 vs. FY2024) | Metric | FY2025 | FY2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenue | $71,542 | $0 | +$71,542 (100%) | | Net Loss | $(8,305,429) | $(9,927,324) | +$1,621,895 (16.34% decrease in loss) | - Net loss from continuing operations was **$7,002,647** and from discontinued operations was **$1,302,782** for FY2025[335](index=335&type=chunk) [Critical Accounting Policies](index=34&type=section&id=Critical%20Accounting%20Policies) This section outlines the critical accounting policies, including the use of estimates, valuation of accounts receivable, business combination accounting, and impairment testing for long-lived assets - Management makes significant estimates and assumptions in financial statements, including valuation of accounts receivable, useful lives of assets, goodwill impairment, and income taxes[337](index=337&type=chunk) - Business combinations are recorded using the **acquisition method**, measuring acquired assets and liabilities at fair value, with goodwill recognized as the excess of consideration over identifiable net assets[339](index=339&type=chunk) - Goodwill is tested for impairment annually (as of **March 31**) or when circumstances change, involving qualitative and quantitative assessments of reporting unit fair values[342](index=342&type=chunk)[343](index=343&type=chunk) - Long-lived assets (excluding goodwill) are reviewed for impairment when events indicate carrying value may not be recoverable; **$1,108,333** in intangible asset impairment was recorded in FY2025[345](index=345&type=chunk)[368](index=368&type=chunk) - Discontinued operations are reported separately if the disposal represents a strategic shift with a major effect on operations and financial results[346](index=346&type=chunk) [Revenue Recognition](index=35&type=section&id=Revenue%20Recognition) The company recognizes revenue based on the transfer of promised goods or services to customers, reflecting the expected consideration, with all FY2025 revenue from internet information and advertising services - Revenue is recognized when control of promised goods or services is transferred to customers, in an amount reflecting the expected consideration, net of VAT[348](index=348&type=chunk) - The company applies a **five-step model** for revenue recognition: identify contract, identify performance obligations, determine transaction price, allocate price, and recognize revenue upon satisfaction of performance obligation[353](index=353&type=chunk) - Historically, revenue streams included healthcare products, automobiles, online store sales, and internet information and advertising services, with control transfer typically at delivery or service completion[347](index=347&type=chunk)[349](index=349&type=chunk)[350](index=350&type=chunk)[351](index=351&type=chunk)[352](index=352&type=chunk) Revenue by Product Line (FY2023-FY2025) | Product Line | FY2025 | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | Internet information and advertising service | $71,542 | $ - | $ - | | **Total Revenue** | **$71,542** | **$ -** | **$ -** | - All revenues from contracts with customers represent products transferred at a point in time and are generated in PRC, recognized on a gross basis[355](index=355&type=chunk) [A. Operating Results](index=36&type=section&id=5.A.%20Operating%20Results) The company's operating results for FY2025 show a net loss of $8.31 million, an improvement from FY2024's $9.93 million loss, primarily driven by a decrease in net loss from discontinued operations Consolidated Statements of Operations Overview (FY2023-FY2025) | Metric | FY2025 | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | Revenues | $71,542 | $0 | $0 | | Cost of revenues | $(62,526) | $0 | $0 | | Gross profit | $9,016 | $0 | $0 | | Total operating expenses | $(6,792,577) | $(4,269,943) | $(4,002,589) | | Operating loss | $(6,783,561) | $(4,269,943) | $(4,002,589) | | Net loss from continuing operations | $(7,002,647) | $(4,289,195) | $(4,279,876) | | Net loss from discontinued operations | $(1,302,782) | $(5,638,129) | $(67,907,240) | | **Net loss** | **$(8,305,429)** | **$(9,927,324)** | **$(72,187,116)** | [Year Ended March 31, 2025 Compared to Year Ended March 31, 2024](index=37&type=section&id=Year%20Ended%20March%2031%2C%202025%20Compared%20to%20Year%20Ended%20March%2031%2C%202024) In FY2025, revenues increased to $71,542 from zero in FY2024, primarily from internet information and advertising services, while operating loss widened due to significant goodwill and intangible asset impairments - Revenues increased by **$71,542 (100%)** to **$71,542** in FY2025, primarily from internet information and advertising services[361](index=361&type=chunk) - Cost of revenues was **$62,526** in FY2025, resulting in a gross margin of **12.60%**[364](index=364&type=chunk) - Goodwill impairment increased by **86.75%** to **$3,376,186** in FY2025, and intangible asset impairment of **$1,108,333** was recognized, both primarily due to **2lab3's** projected performance failure[367](index=367&type=chunk)[368](index=368&type=chunk) - Operating loss increased by **58.87%** to **$6,783,561** in FY2025, mainly due to the impairments[369](index=369&type=chunk) - Interest expense increased by **568.56%** to **$261,854**, mainly due to an unsecured loan payable to a related party[371](index=371&type=chunk) - Net loss from discontinued operations decreased significantly by **$4,335,347**, from **$5,638,129** in FY2024 to **$1,302,782** in FY2025, due to the smaller proportion of divested automobile sales business[374](index=374&type=chunk) - Overall net loss decreased by **16.34%** to **$8,305,429** in FY2025[376](index=376&type=chunk) [Year Ended March 31, 2024 Compared to Year Ended March 31, 2023](index=38&type=section&id=Year%20Ended%20March%2031%2C%202024%20Compared%20to%20Year%20Ended%20March%2031%2C%202023) In FY2024, selling and marketing expenses decreased significantly, and general and administrative expenses decreased, but a new goodwill impairment for 2lab3 led to a slight increase in operating loss, while overall net loss dramatically decreased due to a gain on disposal of discontinued operations - Selling and marketing expenses decreased by **99.99%** to **$94** in FY2024, mainly due to reduced advertising costs and network flow fees[377](index=377&type=chunk) - General and administrative expenses decreased by **20.36%** to **$2,462,001** in FY2024, attributed to decreased headcount and service fees from business strategy optimization[378](index=378&type=chunk) - Goodwill impairment of **$1,807,848** was recognized in FY2024 for **2lab3** due to failure to reach projected performance[379](index=379&type=chunk) - Operating loss increased by **$267,354** in FY2024, primarily due to the goodwill impairment[380](index=380&type=chunk) - Net loss from discontinued operations decreased by **$62,269,111** to **$5,638,129** in FY2024, largely due to a **$7,547,428 gain on disposal** of discontinued operations (healthcare products, e-commerce, internet information and advertising businesses)[384](index=384&type=chunk) - Overall net loss decreased by **86.25%** to **$9,927,324** in FY2024, primarily due to the termination and disposal of discontinued operations[386](index=386&type=chunk) [B. Liquidity and Capital Resources](index=38&type=section&id=5.B.%20Liquidity%20and%20Capital%20Resources) The company's cash and cash equivalents decreased to $261,355 by March 31, 2025, with operating activities using $2.67 million, investing activities using $27.05 million, and financing activities providing $29.01 million Cash Flow Summary (FY2023-FY2025) | Cash Flow Activity | FY2025 | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | $(2,669,456) | $(13,105,978) | $(20,705,496) | | Net cash (used in) provided by investing activities | $(27,046,341) | $11,698,379 | $89,322 | | Net cash provided by financing activities | $29,006,249 | $0 | $3,145,524 | | Effect of exchange rate changes on cash and cash equivalents | $26,661 | $(1,003,646) | $1,092,526 | | Net decrease in cash and cash equivalents | $(682,887) | $(2,411,245) | $(16,378,124) | - Cash and cash equivalents were **$261,355** as of **March 31, 2025**, down from **$341,779** in FY2024; current assets were **$7.19 million** and current liabilities were **$6.40 million** in FY2025[388](index=388&type=chunk) - Net cash used in operating activities decreased significantly in FY2025 to **$2.67 million**, primarily due to business strategy adjustments in loss-making subsidiaries[389](index=389&type=chunk)[390](index=390&type=chunk) - Net cash used in investing activities was **$27.05 million** in FY2025, mainly for the purchase of **51% equity interest in Bomie Wookoo Inc.**[391](index=391&type=chunk) - Net cash provided by financing activities was **$29.01 million** in FY2025, primarily from a **$27.00 million offering of Class A Ordinary Shares** and an increase in amounts due to related parties (**$1.85 million**)[392](index=392&type=chunk) [Related Party Transactions](index=39&type=section&id=Related%20Party%20Transactions) Since April 1, 2024, the company has entered into several promissory note purchase agreements with Ms. Minzhu Xu, the Chairperson of the Board, totaling $1,700,000, which were used for general working capital and approved by the audit committee - The company signed three **8% promissory note purchase agreements** with **Ms. Minzhu Xu** (Chairperson of the Board) totaling **$1,700,000** (**$750,000** on **May 20, 2024**; **$500,000** on **September 30, 2024**; **$450,000** on **January 13, 2025**)[395](index=395&type=chunk)[396](index=396&type=chunk)[397](index=397&type=chunk) - Proceeds from these notes were used for general working capital purposes[398](index=398&type=chunk) - These related party transactions were unanimously approved by the audit committee of the Board of Directors, consisting solely of independent directors[400](index=400&type=chunk)[475](index=475&type=chunk)[477](index=477&type=chunk) [Holding Company Structure](index=39&type=section&id=Holding%20Company%20Structure) The company operates as a holding company with no material operations of its own, now primarily operating through its U.S. subsidiaries, 2Lab3 and 51% owned Bomie Wookoo Inc - The company is a **holding company** with no material operations of its own[401](index=401&type=chunk) - Operations are currently conducted through wholly-owned **2Lab3** and **51% owned Bomie Wookoo Inc.** in the United States[402](index=402&type=chunk) - Historically, the company relied on dividends from its PRC subsidiaries to fund its operations[401](index=401&type=chunk) [D. Trend Information](index=40&type=section&id=5.D.%20Trend%20Information) The company is not aware of any trends, uncertainties, demands, commitments, or events that are reasonably likely to have a material effect on its net revenues, income from continuing operations, profitability, liquidity, or capital resources, beyond what is already disclosed in the annual report - No new material trends, uncertainties, demands, commitments, or events are identified that are likely to materially affect net revenues, income, profitability, liquidity, or capital resources, beyond what is already disclosed[403](index=403&type=chunk) [E. Critical Accounting Estimates](index=40&type=section&id=5.E.%20Critical%20Accounting%20Estimates) Management's critical accounting estimates involve significant judgment and assumptions that impact reported financial figures, with the current economic environment increasing the inherent uncertainty in these estimates - Management's critical accounting estimates include valuation of accounts receivable, useful lives of property/equipment and intangible assets, recoverability of long-lived assets, inventory reserve, goodwill impairment, income taxes, contingent liabilities, and purchase price allocation[404](index=404&type=chunk) - These estimates are based on information as of the financial statements date, and the current economic environment increases the uncertainty, meaning actual results could differ[404](index=404&type=chunk) [ITEM 6. Directors, Senior Management and Employees](index=40&type=section&id=ITEM%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) [A. Directors and Senior Management](index=40&type=section&id=6.A.%20Directors%20and%20Senior%20Management) The company's leadership team includes Xiaoyue Zhang (CEO), Ling Guo (CFO), Minzhu Xu (Chairperson), and independent directors David Sean Lu, Alex Lightman, and George Yijian Xu, all with diverse professional backgrounds Directors and Executive Officers as of August 4, 2025 | Name | Age | Position | | :--- | :--- | :--- | | Xiaoyue Zhang | 37 | Chief Executive Officer, Director | | Ling Guo | 46 | Chief Financial Officer | | Minzhu Xu | 44 | Chairperson of the Board | | David Sean Lu | 33 | Director | | Alex Lightman | 65 | Director | | Yijian Xu | 61 | Director | - **Xiaoyue Zhang (CEO)** has extensive management experience, including founding Zeo Creation LLC and project management at PX Global Advisors[406](index=406&type=chunk) - **Ling Guo (CFO)** has experience in business consulting and management, previously serving as CEO of Shanghai Welive Business Management Consulting Ltd[407](index=407&type=chunk) - **Minzhu Xu (Chairperson)** has extensive experience in advertising, marketing, and public relations, and is a retail investor[408](index=408&type=chunk) - **David Sean Lu, Alex Lightman, and George Yijian Xu** serve as directors, with backgrounds in strategy, entrepreneurship, and certified public accounting, respectively[409](index=409&type=chunk)[410](index=410&type=chunk)[412](index=412&type=chunk) [Board Diversity](index=41&type=section&id=Board%20Diversity) The company's Board of Directors consists of 5 members, with 2 identified as female and 3 as male, and as a foreign private issuer, it does not prohibit disclosure under home country law Board Diversity Matrix | Metric | Value | | :--- | :--- | | Country of Principal Executive Offices | China | | Foreign Private Issuer | Yes | | Disclosure Prohibited under Home Country Law | No | | Total Number of Directors | 5 | | Female Directors | 2 | | Male Directors | 3 | | Non-Binary Directors | 0 | | Did Not Disclose Gender | 0 | | Underrepresented Individual in Home Country Jurisdiction | 0 | | LGBTQ+ | 0 | | Did Not Disclose Demographic Background | 0 | [Employment Agreements with Senior Management](index=41&type=section&id=Employment%20Agreements%20with%20Senior%20Management) The company has employment agreements with its CEO, Xiaoyue Zhang, and CFO, Ling Guo, effective April 29, 2024, with annual base salaries and Class A ordinary share compensation, and both agreements are for one-year terms, automatically renewable - CEO **Xiaoyue Zhang's** employment agreement (effective **April 29, 2024**) includes an annual base salary of **$150,000 cash** and **$150,000 worth of Class A ordinary shares**[414](index=414&type=chunk) - CFO **Ling Guo's** compensation was adjusted on **May 1, 2025**, to an annual base salary of **$150,000 cash** and **$50,000 worth of Class A ordinary shares**[419](index=419&type=chunk) - Both agreements are for one-year terms, automatically renewable, and include provisions for termination with or without cause, specifying severance benefits[415](index=415&type=chunk)[418](index=418&type=chunk) [B. Compensation](index=42&type=section&id=6.B.%20Compensation) This section details the compensation earned by executive officers and directors for the fiscal year ended March 31, 2025, and notes the issuance of 1,478,103 Class A Ordinary Shares to employees, directors, and consultants since April 1, 2021 Executive Officer and Director Compensation (FY2025) | Name and Principal Position | Salary ($) | Bonus ($) | Stock Awards ($) | Option Award ($) | Other Compensation ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Xiaoyue Zhang (CEO and Director) | 150,000 | - | - | - | - | 150,000 | | Ling Guo (CFO) | 27,000 | - | - | - | - | 27,000 | | Minzhu Xu (Chairperson) | - | - | - | - | - | - | | David Sean Lu (Director) | 25,000 | - | - | - | - | 25,000 | | Alex Lightman (Director) | 12,500 | - | - | - | - | 12,500 | | Yijian Xu (Director) | 50,000 | - | - | - | - | 50,000 | - A total of **1,478,103 Class A Ordinary Shares** have been issued to employees, directors, and consultants from **April 1, 2021**, through the report date[424](index=424&type=chunk) - None of the named executives participate in qualified or nonqualified defined benefit plans or nonqualified deferred compensation plans[425](index=425&type=chunk)[426](index=426&type=chunk) [C. Board Practices](index=42&type=section&id=6.C.%20Board%20Practices) The company has established an Audit Committee, a Compensation Committee, and a Nominating and Governance Committee, all composed of independent directors, with George Yijian Xu as the audit committee financial expert - The Board of Directors has established an **Audit Committee, a Compensation Committee, and a Nominating and Governance Committee**[427](index=427&type=chunk) - All members of these committees (**David Sean Lu, Alex Lightman, George Yijian Xu**) are independent directors, with **George Yijian Xu** serving as the **audit committee financial expert**[428](index=428&type=chunk)[430](index=430&type=chunk)[431](index=431&type=chunk)[432](index=432&type=chunk) - As a **foreign private issuer**, the company follows home country corporate governance practices, which may differ from Nasdaq standards, such as not requiring shareholder approval for certain security issuances[437](index=437&type=chunk)[561](index=561&type=chunk) - The company adopted a code of conduct and ethics and an insider trading policy on **October 24, 2019**[434](index=434&type=chunk)[436](index=436&type=chunk) [D. Employees](index=43&type=section&id=6.D.%20Employees) As of March 31, 2025, the company had 28 full-time employees based in the U.S. and China, with a functional distribution across management, sales and marketing, finance and administration, and warehouse roles - As of **March 31, 2025**, the company had **28 full-time employees** based in the U.S. and China[438](index=438&type=chunk) Functional Distribution of Full-Time Employees (March 31, 2025) | Function | Number | | :--- | :--- | | Management | 7 | | Sales and marketing | 13 | | Finance and administration | 2 | | Warehouse | 6 | | **Total** | **28** | - None of the employees are represented by a union, and the relationship with employees has historically been good[439](index=439&type=chunk) [E. Share Ownership](index=43&type=section&id=6.E.%20Share%20Ownership) This section details the beneficial ownership of the company's ordinary shares as of the report date, including directors, executive officers, and 5% shareholders, with Minzhu Xu holding 15.25% of total voting power via Class B ordinary shares Beneficial Ownership of Ordinary Shares (as of Report Date) | Holder | Class A Ordinary Shares (Number) | Class A Ordinary Shares (%) | Class B Ordinary Shares (Number) | Class B Ordinary Shares (%) | % of Total Voting Power | | :--- | :--- | :--- | :--- | :--- | :--- | | Xiaoyue Zhang | — | — | — | — | — | | Ling Guo | — | — | — | — | — | | Minzhu Xu (via Happy Group Inc.) | — | — | 602,255 | 98.37% | 15.25% | | David Sean Lu | — | — | — | — | — | | Alex Lightman | — | — | — | — | — | | George Yijian Xu | — | — | — | — | — | | All Directors and Executive Officers | — | — | 602,255 | 98.37% | 15.25% | | Joyful Bright Management Limited | 6,100,000 | 9.14% | | | 7.72% | | Vanity Glow Management Limited | 5,600,000 | 8.39% | | | 7.09% | | Fortune Universe Company Limited | 5,300,000 | 7.94% | | | 6.71% | | Minotaur HK Limited | 4,700,000 | 7.04% | | | 5.95% | | Beta Vortex Limited | 4,600,000 | 6.89% | | | 5.83% | | Yosmite Unanimous Investment Limited | 4,500,000 | 6.74% | | | 5.70% | | Tender Grass International Limited | 4,400,000 | 6.59% | | | 5.57% | | Blackbull Mvm Limited | 4,300,000 | 6.44% | | | 5.45% | - Beneficial ownership is determined by SEC rules, including voting or investment power; Class A ordinary shares have **one vote**, and Class B ordinary shares have **twenty votes**[441](index=441&type=chunk)[445](index=445&type=chunk) - Percentage of beneficial ownership is based on **66,724,675 Class A Ordinary Shares** and **612,255 Class B Ordinary Shares** outstanding as of the report date[442](index=442&type=chunk) [F. Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation](index=44&type=section&id=6.F.%20Disclosure%20of%20a%20Registrant%27s%20Action%20to%20Recover%20Erroneously%20Awarded%20Compensation) This item is marked as 'Not applicable,' indicating that the company has no actions to disclose regarding the recovery of erroneously awarded compensation - This item is marked as '**Not applicable**'[447](index=447&type=chunk) [ITEM 7. Major Shareholders and Related Party Transactions](index=44&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) [A. Major Shareholders](index=44&type=section&id=7.A.%20Major%20Shareholders) This section refers to 'Item 6.E. Share Ownership' for information regarding major shareholders, indicating that the details are provided there - Information regarding major shareholders is provided under '**Item 6.E. Share Ownership**'[448](index=448&type=chunk) [B. Related Party Transactions](index=44&type=section&id=7.B.%20Related%20Party%20Transactions) Since April 1, 2024, the company has entered into three promissory note purchase agreements with Ms. Minzhu Xu, the Chairperson of the Board, totaling $1,700,000, which were used for general working capital and approved by the audit committee - The company signed three **8% promissory note purchase agreements** with **Ms. Minzhu Xu** (Chairperson of the Board) totaling **$1,700,000** (**$750,000** on **May 20, 2024**; **$500,000** on **September 30, 2024**; **$450,000** on **January 13, 2025**)[449](index=449&type=chunk)[450](index=450&type=chunk) - The proceeds from these note offerings were used for the general working capital purposes of the company[450](index=450&type=chunk) - These transactions were unanimously approved by the audit committee of the Board of the Company, consisting only of independent directors[475](index=475&type=chunk)[477](index=477&type=chunk) - As of the date of this annual report, there were **no outstanding balances owed to related parties**[451](index=451&type=chunk) [C. Interests of Experts and Counsel](index=44&type=section&id=7.C.%20Interests%20of%20Experts%20and%20Counsel) This item is marked as 'Not applicable,' indicating that there are no interests of experts and counsel to disclose in this section - This item is marked as '**Not applicable**'[452](index=452&type=chunk) [ITEM 8. Financial Information](index=44&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) [A. Consolidated Statements and Other Financial Information](index=44&type=section&id=8.A.%20Consolidated%20Statements%20and%20Other%20Financial%20Information) This section confirms the inclusion of consolidated financial statements in the report, starting on page F-1, and outlines the company's dividend policy, which currently has no plans for future dividends - Consolidated financial statements are appended at the end of this report on 20-F, beginning on **page F-1**[453](index=453&type=chunk) - A special cash dividend of **$0.015 per ordinary share** (**$375,000 total**) was declared on **July 31, 2020**, and fully paid on **August 17, 2020**[456](index=456&type=chunk) - The company has **no plan to declare or pay any dividends** in the near future, intending to retain available funds and future earnings for business operations and expansion[456](index=456&type=chunk) - Dividend distribution is at the discretion of the board of directors, subject to Cayman Islands law and articles of association, and depends on future operations, earnings, and capital requirements[457](index=457&type=chunk) [B. Significant Changes](index=45&type=section&id=8.B.%20Significant%20Changes) This item is marked as 'Not applicable,' indicating that there are no significant changes to report in this section - This item is marked as '**Not applicable**'[459](index=459&type=chunk) [ITEM 9. The Offer and Listing](index=45&type=section&id=ITEM%209.%20THE%20OFFER%20AND%20LISTING) [A. Offer and Listing Details](index=45&type=section&id=9.A.%20Offer%20and%20Listing%20Details) The company's Class A ordinary shares are currently trading on the NASDAQ Capital Market under the ticker symbol 'PAVS' - Class A ordinary shares are trading under the ticker symbol '**PAVS**' on the **NASDAQ Capital Market**[460](index=460&type=chunk) [B. Plan of Distribution](index=45&type=section&id=9.B.%20Plan%20of%20Distribution) This item is marked as 'Not applicable,' indicating that there is no plan of distribution to disclose in this section - This item is marked as '**Not applicable**'[461](index=461&type=chunk) [C. Markets](index=45&type=section&id=9.C.%20Markets) The company's Class A ordinary shares are currently listed and trading on the NASDAQ Capital Market - Class A ordinary shares are currently trading under the ticker symbol '**PAVS**' on the **NASDAQ Capital Market**[462](index=462&type=chunk) [D. Selling Shareholders](index=45&type=section&id=9.D.%20Selling%20Shareholders) This item is marked as 'Not applicable,' indicating that there are no selling shareholders to disclose in this section - This item is marked as '**Not applicable**'[462](index=462&type=chunk) [E. Dilution](index=45&type=section&id=9.E.%20Dilution) This item is marked as 'Not applicable,' indicating that there is no dilution information to disclose in this section - This item is marked as '**Not applicable**'[463](index=463&type=chunk) [F. Expenses of the Issue](index=45&type=section&id=9.F.%20Expenses%20of%20the%20Issue) This item is marked as 'Not applicable,' indicating that there are no expenses of the issue to disclose in this section - This item is marked as '**Not applicable**'[464](index=464&type=chunk) [ITEM 10. Additional Information](index=45&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) [A. Share Capital](index=45&type=section&id=10.A.%20Share%20Capital) This item is marked as 'Not applicable,' indicating that there is no specific share capital information to disclose in this section - This item is marked as '**Not applicable**'[465](index=465&type=chunk) [B. Memorandum and Articles of Association](index=45&type=section&id=10.B.%20Memorandum%20and%20Articles%20of%20Association) This section incorporates by reference the company's Amended and Restated Memorandum and Articles of Association, along with descriptions of its Class A Ordinary Shares and differences in corporate laws, as filed in previous SEC documents - The Amended and Restated Memorandum and Articles of Association, description of Class A Ordinary Shares, and differences in corporate laws are incorporated by reference from previous SEC filings[466](index=466&type=chunk) [C. Material Contracts](index=45&type=section&id=10.C.%20Material%20Contracts) This section details several material contracts, including the disposition of Fujian Happiness for $11.3 million, a software development agreement for the '10,000 Lives' game, multiple promissory note purchase agreements, a $27 million Class A Ordinary Shares offering, and the $22.44 million acquisition of 51% equity in BW - Disposition SPA: Sold **Fujian Happiness** for **RMB 78 million (approx. $11.3 million)** to Fujian Hengda Beverage Co., Ltd. on **August 7, 2023**[468](index=468&type=chunk) - Software Development Agreement: Entered with **Blueline Studios Inc.** on **November 12, 2023**, for the '**10,000 Lives**' interactive game, with development fees of **$1,500,000** for PC Release and **$400,000** for iOS Release, plus **9% of net revenue**[469](index=469&type=chunk) - Promissory Note Purchase Agreements (Non-U.S. Investor): Issued three **8% promissory notes**, each for **$750,000**, on **November 14, 2023, January 18, 2024, and March 12, 2024**, to fund software development and general corporate activities[470](index=470&type=chunk)[471](index=471&type=chunk)[472](index=472&type=chunk) - Promissory Note Purchase Agreements (**Ms. Minzhu Xu**): Issued three **8% promissory notes** totaling **$1,700,000** (**$750,000** on **May 20, 2024**; **$500,000** on **September 30, 2024**; **$450,000** on **January 13, 2025**) for general working capital, approved by the audit committee[474](index=474&type=chunk)[476](index=476&type=chunk) - Securities Purchase Agreement (Non-U.S. Persons): Sold **60,000,000 Class A Ordinary Shares** for **$0.45 per share**, generating **$27,000,000 gross proceeds** on **August 7, 2024**; **$22,400,000** was used for the BW acquisition[478](index=478&type=chunk)[479](index=479&type=chunk) - Acquisition of **BW**: Acquired **51% equity interest** in **Bomie Wookoo Inc.** for **$22,440,000** in cash on **March 25, 2025**, approved by shareholders, to expand into marketing-commerce and TikTok e-commerce solutions[482](index=482&type=chunk)[483](index=483&type=chunk) [D. Exchange Controls](index=47&type=section&id=10.D.%20Exchange%20Controls) This section details exchange control regulations in the Cayman Islands and the PRC, noting no applicable controls in the Cayman Islands, while PRC regulations govern RMB convertibility and offshore investments with potential penalties for non-compliance - The **Cayman Islands** currently levies **no exchange control regulations** applicable to the company or its shareholders[485](index=485&type=chunk) - In the PRC, Renminbi is convertible for current account items but requires approval or registration for capital account items under the **Foreign Exchange Regulations**[486](index=486&type=chunk) - **SAFE Circular 37** requires PRC residents to register offshore investments in special purpose vehicles (SPVs) and update registrations for material changes, with potential penalties for non-compliance[487](index=487&type=chunk)[488](index=488&type=chunk) - **Circulars 19 and 16** allow foreign-invested enterprises discretionary foreign exchange settlement but prohibit using converted Renminbi for expenditures beyond business scope, securities investment (unless permitted), or providing loans to non-affiliated entities[490](index=490&type=chunk)[491](index=491&type=chunk)[492](index=492&type=chunk) - The value of RMB against the U.S. dollar fluctuates based on China's political and economic conditions, and significant revaluation could affect the company's financial condition in U.S. dollar terms[270](index=270&type=chunk) [E. Taxation](index=48&type=section&id=10.E.%20Taxation) This section summarizes the material tax consequences in the Cayman Islands, PRC, and U.S. for investments in the company's ordinary shares, covering income, capital gains, withholding taxes, and potential PFIC classification [Cayman Islands Taxation](index=48&type=section&id=Cayman%20Islands%20Taxation) The Cayman Islands currently imposes no taxes on individuals or corporations based on profits, income, gains, or appreciation, nor any inheritance tax or estate duty, and has no exchange control regulations - The **Cayman Islands** levies **no taxes** on profits, income, gains, appreciation, inheritance, or estate duty for individuals or corporations[495](index=495&type=chunk) - There are **no exchange control regulations or currency restrictions** in the Cayman Islands[495](index=495&type=chunk) [People's Republic of China Taxation](index=48&type=section&id=People%27s%20Republic%20of%20China%20Taxation) Under the EIT Law, PRC resident enterprises are subject to a 25% enterprise income tax on worldwide income, with potential withholding taxes on dividends and gains for non-PRC shareholders, and complex rules for 'de facto management bodies' and indirect equity transfers - PRC resident enterprises are generally subject to a uniform **25% enterprise income tax rate** on their worldwide income under the **EIT Law**[496](index=496&type=chunk) - If the company is classified as a PRC resident enterprise, it could face a **25% enterprise income tax**, and non-PRC enterprise shareholders could be subject to a **10% withholding tax** on dividends and gains[496](index=496&type=chunk) - **SAT Circular 82 and Bulletin 45** provide criteria for determining if an offshore-incorporated enterprise has its '**de facto management body**' in China, which could lead to PRC resident enterprise classification[496](index=496&type=chunk)[297](index=297&type=chunk) - **SAT Circular 698** (and Public Notice 24) requires reporting of indirect equity transfers of PRC resident enterprises by non-resident enterprises, with potential for **10% withholding tax** if deemed to lack reasonable commercial purpose[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk)[303](index=303&type=chunk) - Dividends payable by a PRC foreign-invested enterprise to a non-resident enterprise are subject to a **10% withholding tax**, potentially reduced to **5%** under tax treaties (e.g., with Hong Kong) if specific conditions are met[499](index=499&type=chunk) [United States Federal Income Taxation](index=49&type=section&id=United%20States%20Federal%20Income%20Taxation) U.S. Holders are generally taxed on dividends as ordinary income and recognize capital gains/losses on share dispositions, with significant implications if the company is classified as a Passive Foreign Investment Company (PFIC) - U.S. Holders generally include gross distributions as dividend income, taxed at lower capital gains rates for non-corporate holders if shares are readily tradable on an established U.S. securities market (like Nasdaq) and the company is not a **PFIC**[506](index=506&type=chunk)[507](index=507&type=chunk) - U.S. Holders recognize taxable capital gain or loss on the sale or disposition of shares, with reduced rates for long-term capital gains for non-corporate holders[509](index=509&type=chunk) - A foreign corporation is a **PFIC** if **75% of its gross income is passive** or **50% of its assets produce passive income**; the company does not expect to be a PFIC for the current or foreseeable future, but no assurance can be given[510](index=510&type=chunk)[511](index=511&type=chunk) - If classified as a **PFIC**, U.S. Holders face special tax and interest charge rules unless a timely **Qualified Electing Fund (QEF)** election or **mark-to-market election** is made[512](index=512&type=chunk)[513](index=513&type=chunk)[523](index=523&type=chunk) - Non-U.S. Holders are generally not subject to U.S. federal income tax on dividends or gains unless effectively connected with a U.S. trade or business[529](index=529&type=chunk)[530](index=530&type=chunk) [G. Statement by Experts](index=52&type=section&id=10.G.%20Statement%20by%20Experts) This item is marked as 'Not applicable,' indicating that there are no statements by experts to disclose in this section - This item is marked as '**Not applicable**'[536](index=536&type=chunk) [H. Documents on Display](index=52&type=section&id=10.H.%20Documents%20on%20Display) The company is subject to SEC informational requirements and files reports, registration statements, and other information with the SEC, which can be inspected on the SEC's website (www.sec.gov) - The company files reports, registration statements, and other information with the SEC, available on **www.sec.gov**[537](index=537&type=chunk) - Additional information is available on the company's website (**https://pavs.ai**), but this content is not part of the annual report[537](index=537&type=chunk) [I. Subsidiary Information](index=52&type=section&id=10.I.%20Subsidiary%20Information) This item is marked as 'Not applicable,' indicating that there is no specific subsidiary information to disclose in this section - This item is marked as '**Not applicable**'[538](index=538&type=chunk) [ITEM 11. Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) [Interest Rate Risk](index=52&type=section&id=Interest%20Rate%20Risk) The company's operations are not directly sensitive to interest rate fluctuations, as most outstanding debt instruments carry loan prime rates plus basis points, and management has not entered into hedging transactions - The company's operations are generally **not directly sensitive to fluctuations in interest rates**[539](index=539&type=chunk) - Most outstanding debt instruments carry loan prime rates plus basis points of interest, and there is no long-term debt outstanding[539](index=539&type=chunk) - Management monitors prime rates and cash requirements but has **not

Core Viewpoint - Happiness Comes (PAVS) experienced a 6.49% increase in stock price, reaching $0.958 per share, with a total market capitalization of $64.54 million as of August 5 [1] Financial Performance - As of March 31, 2024, the total revenue for Happiness Comes was $6.5448 million, representing a year-over-year decrease of 71.95% [1] - The net profit attributable to shareholders was -$10.1262 million, showing a year-over-year increase of 85.88% [1] Company Overview - Paranovus Entertainment Technology Ltd. focuses on the AI-driven entertainment industry, specifically in developing AI-powered games and applications [1] - The company aims to provide immersive and engaging entertainment experiences through its AI-driven products and services [1]

Core Viewpoint - Happiness Comes (PAVS) experienced a significant intraday increase of 28.21%, reaching a price of $1.00 per share, with a total market capitalization of $67.34 million [1] Financial Performance - As of March 31, 2024, Happiness Comes reported total revenue of $6.54 million, reflecting a year-over-year decrease of 71.95% [1] - The company recorded a net loss attributable to shareholders of $10.13 million, which represents a year-over-year increase of 85.88% [1] Company Overview - Paranovus Entertainment Technology Ltd. focuses on the AI-driven entertainment industry, specifically in developing AI-powered games and applications [1] - The company aims to provide immersive and engaging entertainment experiences through its AI-driven products and services [1]