Paranovus Entertainment Technology .(PAVS) - 2022 Q4 - Annual Report

Financial Performance - For the fiscal year ended March 31, 2022, the company generated revenue of $89,488,658, an increase of$18,003,955 compared to $71,484,703 in the previous fiscal year[329]. - The net loss for the fiscal year ended March 31, 2022, was$54,020,081, a decrease of $54,712,037 from a net income of$691,956 in the fiscal year ended March 31, 2021[329]. - The company generated $89,488,658 in revenues for the fiscal year ended March 31, 2022, representing an increase of$18,003,955 or 25.19% compared to $71,484,703 for the fiscal year ended March 31, 2021[358]. - Revenue from healthcare products dropped significantly to$30,323,831 in fiscal year 2022, primarily due to the adverse impact of the COVID-19 pandemic[358]. - Revenue from the online store increased to $28,014,109 in fiscal year 2022, up from$13,473,626 in fiscal year 2021, driven by the development of the online business model[359]. - Information service revenue reached $10,538,943 in fiscal year 2022, representing an increase of$1,293,924 or 14% compared to $9,245,019 in fiscal year 2021[360]. - Automobile sales revenue surged to$20,611,775 in fiscal year 2022, an increase of $17,235,419 or 510.47$3,376,356 in fiscal year 2021[361]. - The operating loss for the fiscal year ended March 31, 2022 was $57,885,796, a significant decline from operating income of$1,525,716 in the prior year, marking an increase in loss of $44,778,859[369]. - Net loss for the fiscal year ended March 31, 2022 was$54,020,081, a decrease of $53,328,125 compared to net income of$691,956 for the fiscal year ended March 31, 2021[374]. Revenue Recognition and Accounting - The company recognizes revenue from healthcare products, automobiles, and online store sales upon the transfer of control to customers[336][339][340]. - The company operates under U.S. GAAP, with critical accounting policies affecting the reported amounts of assets and liabilities[321]. - The company has established a provision for doubtful accounts based on individual account analysis and historical collection trends[332]. Cost and Expenses - Total cost of revenues was $85,777,192 for the fiscal year ended March 31, 2022, representing an increase of$32,468,090 or 60.91% compared to $53,309,102 for the fiscal year ended March 31, 2021[363]. - The gross margin ratio for the company was 4.2$40,476,616 for the fiscal year ended March 31, 2022, reflecting a 306.44% increase compared to $9,958,886 for the fiscal year ended March 31, 2021[365]. - General and administrative expenses rose to$9,126,812 for the fiscal year ended March 31, 2022, an increase of 81.4% from $5,030,899 in the prior year[366]. - Research and development expenses slightly increased to$1,684,089 for the fiscal year ended March 31, 2022, representing a 1.45% rise compared to $1,660,100 for the fiscal year ended March 31, 2021[367]. - Goodwill impairment amounted to$10,309,745 for the fiscal year ended March 31, 2022, compared to nil in the previous year, largely due to the impact of the COVID-19 pandemic[368]. Cash Flow and Investments - Net cash used in operating activities was $(28,134,783) for the fiscal year ended March 31, 2022, compared to$2,904,466 provided in the previous year[394]. - As of March 31, 2022, the company had cash and cash equivalents of $19.73 million, a decrease from$36.56 million in 2021 and $33.65 million in 2020[395]. - Net cash used in investing activities was$8.5 million for the year ended March 31, 2022, mainly due to a new business acquisition of approximately $6.1 million[399]. - Net cash provided by financing activities was approximately$18.8 million for the year ended March 31, 2022, primarily from capital contributions of net proceeds of $18.9 million from the issuance of new ordinary shares[401]. - Capital expenditures amounted to$2.41 million for the year ended March 31, 2022, compared to $3.83 million in 2021 and$1.16 million in 2020[402]. Business Operations and Strategy - The company has over 100 distributors and 10 experience stores across 20 provinces in China for its nutraceutical and dietary supplements[325]. - The online store "Happy Buy" was launched in September 2020, focusing on e-commerce services for small and medium-sized enterprises, with steady growth attributed to the live streaming e-commerce trend[325]. - The automobile sales platform "Happy Auto," upgraded to "Taochejun," focuses on small cities in China and new energy vehicle sales[328]. - The company categorizes its products into four groups: Healthcare products, e-commerce products, automobile sales, and Internet information advertising services[325]. - The company has made significant investments in quality control and self-manufacturing to ensure high-quality products[323]. - The company plans to continue investing in the online store and automobile business to drive future growth[359][361]. - The company closed 7 experience stores during the year ended March 31, 2022, due to poor performance to avoid further losses[358]. Internal Control and Risk Management - The company plans to address internal control weaknesses by recruiting qualified professionals and investing in technology infrastructure[579]. - The company has not entered into any hedging transactions to reduce exposure to foreign exchange risk, despite being exposed to fluctuations in the exchange rate between the U.S. dollar and RMB[574]. - The company experienced a significant decrease in current assets, from approximately $95.1 million in 2021 to$56.6 million in 2022[395].