Paranovus (PAVS) funds up to US$1M secured convertible note in Knox Golf Academy
Rhea-AI Filing Summary
Paranovus Entertainment Technology Ltd. entered into a financing arrangement by purchasing a secured convertible promissory note from Knox Golf Academy, Inc. with an aggregate principal amount of up to US$1,000,000. The note is funded in two tranches of US$500,000 each, with the second tranche at Paranovus’s sole discretion.
The outstanding principal bears interest at 10% per annum and has a term of twelve months from the first disbursement. Paranovus may elect to convert the note into Knox common stock using a formula tied to qualifying golf course renovation costs, up to a maximum of $10.0 million in such costs. The note is secured by substantially all Knox assets and all Knox equity interests, is guaranteed by Knox’s controlling shareholder who owns about 80% of Knox, and gives Paranovus the right to appoint one director to Knox’s board.
Positive
- None.
Negative
- None.
Key Figures
Note principal: US$1,000,000
Tranche size: US$500,000
Interest rate: 10% per annum
+3 more
6 metrics
Note principal
US$1,000,000
Aggregate principal amount of secured convertible note
Tranche size
US$500,000
Each of two funding tranches under the note
Interest rate
10% per annum
Interest on outstanding principal amount
Note term
12 months
From date of first disbursement
Renovation cost cap
$10.0 million
Maximum qualifying renovation costs used in conversion formula
Guarantor ownership
Approximately 80%
Equity interest in Knox held by guaranteeing shareholder
Key Terms
secured convertible promissory note, Principal Amount, events of default, covenants, +1 more
5 terms
secured convertible promissory note financial
"purchased a secured convertible promissory note (the “Note”) from Knox Golf Academy, Inc."
Principal Amount financial
"in the aggregate principal amount of up to US$1,000,000 (the “Principal Amount”)"
The principal amount is the original sum of money that is borrowed, lent, or invested before any interest, fees, or returns are added. It matters to investors because interest charges, scheduled repayments, and total return are calculated from that base amount — think of it as the price tag on which future costs or gains are built. Knowing the principal helps you compare deals and predict cash flows and risk.
events of default financial
"The Note also contains customary representations, warranties, covenants and events of default."
Events of default are specific breaches or failures listed in a loan, bond, or credit agreement that give lenders the right to act, such as demanding immediate repayment, raising interest rates, or taking secured assets. They matter to investors because triggering one is like setting off a financial alarm: it raises the chance of foreclosure, restructuring, or bankruptcy and can sharply reduce the value of a company’s stock or bonds and increase borrowing costs.
covenants financial
"The Note also contains customary representations, warranties, covenants and events of default."
Covenants are rules written into loan or bond contracts that require a company to do or avoid certain things—like keeping debt below a set level or not selling key assets. They matter to investors because they protect lenders and influence a company’s flexibility: tight covenants can limit growth plans but lower default risk, while loose covenants give freedom but increase credit risk, similar to how household rules affect a family’s budget choices.
guaranteed financial
"the obligations under the Note are guaranteed by the Knox’s controlling shareholder"
A guarantee is a formal promise that a payment or obligation will be met even if the original party cannot fulfill it, often provided by a third party, insurer, or legal contract. For investors it signals lower risk—similar to a co-signer on a loan—because the guarantor should cover missed payments or performance, but the protection only matters as much as the guarantor’s financial strength and the legal enforceability of the promise.
FAQ
What material contract did Paranovus (PAVS) enter into in May 2026?
Paranovus entered into a secured convertible promissory note with Knox Golf Academy, Inc. for up to US$1,000,000. The arrangement combines interest-bearing debt with an option to convert into Knox common stock under a defined formula.
What are the key financial terms of Paranovus (PAVS) note with Knox Golf Academy?
The note has an aggregate principal of up to US$1,000,000, funded in two US$500,000 tranches, at 10% annual interest. It matures twelve months after the first disbursement and may be converted into Knox common stock under a renovation cost-based formula.
How is Paranovus’s secured convertible note with Knox Golf Academy structured for funding?
Funding occurs in two tranches of US$500,000 each. The first tranche was funded when the note was issued, while the second tranche is at Paranovus’s sole discretion, subject to conditions specified in the note’s terms and documentation.
What collateral and guarantees support Paranovus (PAVS) investment in Knox Golf Academy?
The note is secured by substantially all Knox assets and a pledge of all its outstanding equity interests. Additionally, Knox’s controlling shareholder, who owns about 80% of its equity, guarantees Knox’s obligations under the note.
How does Paranovus (PAVS) convert its note into Knox Golf Academy equity?
Paranovus may elect to convert the note into Knox common stock using a formula based on the ratio of the principal amount to qualifying golf course renovation costs, capped at $10.0 million of such renovation costs incurred by Knox.
Does Paranovus (PAVS) receive any governance rights from the Knox Golf Academy note?
Yes. Under the secured convertible promissory note, Paranovus gains the right to appoint one director to Knox Golf Academy’s board of directors, providing direct board-level representation alongside its secured, convertible creditor position.
AI-generated analysis. How Rhea-AI works. Not financial advice.
