UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______to _______

Commission file number 001-42122

FLY-E GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware		92-0981080
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

136-40 39th Avenue Flushing, New York		11354
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (929) 410-2770

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.01 par value per share		FLYE		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes ☐ No ☒

As of December 18, 2025, there were 1,632,386 shares of the registrant’s common stock, par value $0.01 per share, issued and outstanding.

INDEX

		Page Number

	Cautionary Statement Regarding Forward Looking Statements	ii
PART I	FINANCIAL INFORMATION	1
Item 1.	Unaudited Condensed Consolidated Financial Statements	1
	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2025 and March 31, 2025	1
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended September 30, 2025 and 2024	2
	Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity for the Three and Six Months Ended September 30, 2025 and 2024	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2025 and 2024	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	54
Item 4.	Controls and Procedures	54

PART II	OTHER INFORMATION	55
Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	56
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57
Item 3.	Defaults Upon Senior Securities	57
Item 4.	Mine Safety Disclosures	57
Item 5.	Other Information	57
Item 6.	Exhibits	57
	Signatures	58

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the “Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act, as amended (the “Securities Act”), Section 21E of the Exchange Act, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be preceded by, or contain, words such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “predict,” “potential,” “might,” “could,” “would,” “should” or other words indicating future results, though not all forward-looking statements necessarily contain these identifying words. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, without limitation, statements about our future business operations and results, our strategy and competition. These statements represent our current expectations or beliefs concerning various future events and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations, including, but not limited to:

●

our ability to obtain additional funding to market our vehicles and develop new products;

●

our ability to produce our vehicles with sufficient volume and quality to satisfy customers;

●

the inability of our principal vendors to deliver the necessary components for our vehicles at prices and volumes acceptable to us;

●

our principal vendors failing to perform quality control on our products;

●

the inability to obtain sufficient intellectual property protection for our brand and technologies;

●

our vehicles failing to perform as expected;

●

our facing product warranty claims or product recalls;

●

our facing adverse determinations in significant product liability claims;

●

customers not adopting electric vehicles;

●

the development of alternative technology that adversely affects our business;

●

increased government regulation of our industry;

	●	the risk of losing cash balances exceeding insurance limits held at banks;

	●	our ability to grow the rental services;

	●	our ability to continue as a going concern;

	●	our ability to maintain compliance with the continued listing standards of the Nasdaq Capital Market (“Nasdaq”);

	●	the changes or developments with respect to domestic and international customs, tariffs, and trade policies, corresponding or retaliatory actions by other countries and related uncertainties;

	●	tariffs and currency exchange rates; and

	●	the other risks and uncertainties discussed under the section titled “Risk Factors” beginning on page 56 of this Report and our other filings with the Securities and Exchange Commission (the “SEC”).

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We undertake no obligation to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed or incorporated by reference in this Report may not occur.

You should read this Report with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in this Report by these cautionary statements.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

FLY-E GROUP, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Expressed in U.S. dollars, except for the number of shares)

	September 30, 2025			March 31, 2025
ASSETS
Current Assets
Cash	$	2,538,076		$	840,102
Accounts receivable, net		1,474,637			466,187
Accounts receivable, net – a related party		32,030			37,465
Inventories, net		6,548,287			6,397,274
Prepayments and other receivables		5,923,496			3,676,986
Prepayments and other receivables – related parties		236,826			120,000
Assets held for sale		—			2,462,502
Total Current Assets		16,753,352			14,000,516
Property and equipment, net		6,826,815			7,287,213
Security deposits		518,908			728,450
Deferred tax assets, net		152,212			94,983
Operating lease right-of-use assets		6,891,886			10,933,068
Intangible assets, net		486,581			525,865
Long-term prepayment for software development – a related party		—			136,580
Total Assets	$	31,629,754		$	33,706,675

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	550,249		$	1,272,305
Short-term loan payables		5,532,230			5,191,058
Current portion of long-term loan payables		222,479			100,835
Accrued expenses and other payables		484,236			1,366,968
Accrued expenses and other payables – related parties		225			—
Operating lease liabilities – current		1,819,911			2,617,762
Liabilities held for sale		—			2,152,447
Total Current Liabilities		8,609,330			12,701,375
Long-term loan payables		2,004,123			2,065,040
Operating lease liabilities – non-current		5,718,256			9,106,928
Total Liabilities		16,331,709			23,873,343

Commitment and Contingencies

Stockholders’ Equity
Preferred stock, $0.01 par value, 10,000,000 shares authorized and nil outstanding as of September 30, 2025 and March 31, 2025*		—			—
Common stock, $0.01 par value, 300,000,000 shares authorized and 1,632,351 shares outstanding as of September 30, 2025 and 300,000,000 shares authorized and 245,875 shares outstanding as of March 31, 2025*		16,324			2,459
Additional paid-in capital		27,826,643			10,987,440
Shares subscription receivable		(7,816,556	)		(219,998	)
Accumulated deficit		(4,680,283	)		(895,510	)
Accumulated other comprehensive loss		(48,083	)		(41,059	)
Total FLY-E Group, Inc. Stockholders’ Equity		15,298,045			9,833,332
Total Liabilities and Stockholders’ Equity	$	31,629,754		$	33,706,675

*	Shares and per share data are presented on a retroactive basis to reflect the 1-for-5 reverse stock split completed on July 3, 2025 and the 1-for-20 reverse stock split completed on November 4, 2025.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

FLY-E GROUP, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE LOSS

(Expressed in U.S. dollars, except for the number of shares)

	For the Three Months Ended September 30,						For the Six Months Ended September 30,
	2025			2024			2025			2024
Revenues	$	3,908,862		$	6,824,406		$	9,237,060		$	14,697,832
Cost of Revenues		2,932,341			3,919,952			5,999,164			8,693,744
Gross Profit		976,521			2,904,454			3,237,896			6,004,088

Operating Expenses
Selling Expenses		1,027,726			2,041,435			2,348,943			3,653,930
General and Administrative Expenses		997,218			2,094,078			3,442,151			3,626,716
Total Operating Expenses		2,024,944			4,135,513			5,791,094			7,280,646
Loss from Operations		(1,048,423	)		(1,231,059	)		(2,553,198	)		(1,276,558	)

Other Expenses, net		(148,153	)		(53,929	)		(156,051	)		(47,411	)
Interest Expenses, net		(539,537	)		(23,795	)		(1,085,771	)		(91,877	)
Loss Before Income Taxes		(1,736,113	)		(1,308,783	)		(3,795,020	)		(1,415,846	)
Income Tax (Expense) Benefit		(40,012	)		165,935			10,247			93,490
Net Loss	$	(1,776,125	)	$	(1,142,848	)	$	(3,784,773	)	$	(1,322,356	)

Other Comprehensive (Loss) Income
Foreign currency translation adjustment		(29,378	)		4,298			(7,024	)		2,974
Total Comprehensive Loss	$	(1,805,503	)	$	(1,138,550	)	$	(3,791,797	)	$	(1,319,382	)

Losses per Share*	$	(2.18	)	$	(4.65	)	$	(6.58	)	$	(5.60	)
Weighted Average Number of Common Stock
– Basic and Diluted*		813,922			245,875			575,463			236,226

*	Shares and per share data are presented on a retroactive basis to reflect the 1-for-110,000 stock split completed on April 2, 2024, the 1-for-5 reverse stock split completed on July 3, 2025 and the 1-for-20 reverse stock split completed on November 4, 2025.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

FLY-E GROUP, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDERS’ EQUITY

(Expressed in U.S. dollars, except for the number of shares)

	Preferred Stock				Common Stock				Additional Paid-in			Shares Subscription			Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares*		Amount		Shares*		Amount		Capital			Receivables			Loss			Deficit			Equity

Balance at March 31, 2025		—	$	—		245,875	$	2,459	$	10,987,440		$	(219,998	)	$	(41,059	)	$	(895,510	)	$	9,833,332
Net loss		—		—		—		—		—			—			—			(2,008,648	)		(2,008,648	)
Issuance of common stock upon registered direct offering, net		—		—		285,956		2,860		5,853,650			—			—			—			5,856,510
Foreign currency translation adjustment		—		—		—		—		—			—			22,354			—			22,354
Balance at June 30, 2025		—	$	—		531,831	$	5,319	$	16,841,090		$	(219,998	)	$	(18,705	)	$	(2,904,158	)	$	13,703,548

Balance at June 30, 2025		—	$	—		531,831	$	5,319	$	16,841,090		$	(219,998	)	$	(18,705	)	$	(2,904,158	)	$	13,703,548
Net loss		—		—		—		—		—			—			—			(1,776,125	)		(1,776,125	)
Issuance of common stock upon private placement offering, net		—		—		687,500		6,875		10,989,683			(7,596,558	)		—			—			3,400,000
Exercise of warrants		—		—		410,982		4,110		(4,110	)		—			—			—			—
Round up of shares for reverse stock split		—		—		2,038		20		(20	)		—			—			—			—
Foreign currency translation adjustment		—		—		—		—		—			—			(29,378	)		—			(29,378	)
Balance at September 30, 2025		—	$	—		1,632,351	$	16,324	$	27,826,643		$	(7,816,556	)	$	(48,083	)	$	(4,680,283	)	$	15,298,045

*	Shares and per share data are presented on a retroactive basis to reflect the 1-for-5 reverse stock split completed on July 3, 2025 and the 1-for-20 reverse stock split completed on November 4, 2025.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

	Preferred Stock				Common Stock				Additional Paid-in		Shares Subscription			Accumulated Other Comprehensive			Retained			Total Stockholders’
	Shares*		Amount		Shares*		Amount		Capital		Receivables			Loss			Earnings			Equity

Balance at March 31, 2024		—	$	—		220,000	$	2,200	$	2,617,800	$	(219,998	)	$	(13,829	)	$	4,395,649		$	6,781,822
Net loss		—		—		—		—		—		—			—			(179,508	)		(179,508	)
Issuance of common stock upon initial public offering, net		—		—		25,875		259		8,369,640		—			—			—			8,369,899
Foreign currency translation adjustment		—		—		—		—		—		—			(1,324	)		—			(1,324	)
Balance at June 30, 2024		—	$	—		245,875	$	2,459	$	10,987,440	$	(219,998	)	$	(15,153	)	$	4,216,141		$	14,970,889

Balance at June 30, 2024		—	$	—		245,875	$	2,459	$	10,987,440	$	(219,998	)	$	(15,153	)	$	4,216,141		$	14,970,889
Net loss		—		—		—		—		—		—			—			(1,142,848	)		(1,142,848	)
Foreign currency translation adjustment		—		—		—		—		—		—			4,298			—			4,298
Balance at September 30, 2024		—	$	—		245,875	$	2,459	$	10,987,440	$	(219,998	)	$	(10,855	)	$	3,073,293		$	13,832,339

*	Shares and per share data are presented on a retroactive basis to reflect the 1-for-110,000 stock split completed on April 2, 2024, the 1-for-5 reverse stock split completed on July 3, 2025 and the 1-for-20 reverse stock split completed on November 4, 2025.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

FLY-E GROUP, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. dollars, except for the number of shares)

	For the Six Months Ended September 30,
	2025			2024
Cash flows from operating activities
Net loss	$	(3,784,773	)	$	(1,322,356	)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on disposal of property and equipment		68,188			—
Gain on disposal of subsidiaries		(64,452	)		—
Depreciation expense		417,258			180,910
Amortization expense		54,761			8,846
Deferred income taxes benefits		(42,251	)		(462,740	)
Amortization of operating lease right-of-use assets		2,699,632			1,676,991
Inventories impairment loss		569,758			330,823
Changes in operating assets and liabilities:
Accounts receivable		(1,031,989	)		(154,034	)
Accounts receivable – a related party		5,435			235,029
Inventories		(1,107,359	)		(3,562,871	)
Prepayments and other receivables		(1,371,452	)		(1,864,681	)
Prepayments for operation services to a related party		45,000			(180,000	)
Security deposits		41,550			(55,598	)
Accounts payable		(722,056	)		(815,667	)
Accrued expenses and other payables		(793,623	)		(380,183	)
Accrued expenses and other payables - related parties		225			—
Operating lease liabilities		(2,676,403	)		(1,516,198	)
Taxes payable		(14,978	)		(1,530,416	)
Net cash used in operating activities		(7,707,529	)		(9,412,145	)

Cash flows from investing activities
Purchases of properties and equipment		(44,661	)		(1,575,936	)
Purchase of software from a related party		—			(500,000	)
Payments of property rights		(15,477	)		—
Prepayment for purchasing software from a related party		—			(801,980	)
Cash released from disposal of entities		(230,076	)		—
Repayment from a related party		—			510,381
Advance to a related party		(161,826	)		(477,933	)
Net cash used in investing activities		(452,040	)		(2,845,468	)

Cash flows from financing activities
Proceeds from borrowings		1,917,100			3,737,500
Repayments of borrowings		(1,370,591	)		(391,308	)
Repayments on other payables - related parties		—			(92,229	)
Payments of offering cost		(516,490	)		(282,403	)
Net proceeds from issuance of common stock		9,773,000			9,154,500
Net cash provided by financing activities		9,803,019			12,126,060
Net changes in cash including cash classified within current assets held for sale		1,643,450			(131,553	)
Effect of exchange rate changes on cash		(7,024	)		2,974
Less: net increase in cash classified within current assets held for sale		61,548			—
Cash at beginning of the period		840,102			1,403,514
Cash at the end of the period	$	2,538,076		$	1,274,935

Supplemental disclosure of cash flow information
Cash paid for interest expense	$	1,085,771		$	91,877
Cash paid for income taxes	$	42,640		$	1,940,595

Supplemental disclosure of non-cash investing and financing activities
Subscription receivables from share placement	$	7,596,558		$	—
Purchase of vehicle funded by loan	$	—		$	219,668
Purchase of office funded by loan	$	—		$	1,800,000
Purchase of software by using previous prepayments	$	136,580		$	1,975,000
Properties used for rental services	$	49,811		$	—
Deferred IPO cost recognized as additional paid-in capital	$	—		$	502,198
Uncollected proceeds from disposal of subsidiaries	$	860,754		$	—
Termination of operating lease right-of-use assets and operating lease liabilities	$	3,187,864		$	(280,087	)
Right-of-use assets obtained in exchange for operating lease liabilities	$	—		$	1,394,682

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

FLY-E GROUP, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

1 — DESCRIPTION OF BUSINESS, ORGANIZATION AND BASIS OF PRESENTATION

Organization and principal activities

Fly-E Group, Inc. (the “Company” or “Fly-E Group”) was incorporated under the laws of the State of Delaware on November 1, 2022. The Company has no substantive operations other than holding all of the issued and outstanding shares of Fly E-Bike Inc. (“Fly E-Bike”) and Fly EV, Inc. (“Fly EV”). Fly E-Bike and Fly EV were incorporated under the laws of the State of Delaware on August 22, 2022 and November 1, 2022, respectively. Fly EV has no substantive operations. The Company, through its wholly owned subsidiaries, is principally engaged in designing, installing and selling smart electric bikes (“E-bikes”), electric motorcycles (“E-motorcycles”), electric scooters (“E-scooters”), and related accessories under the brand name of “Fly E-Bike.” The Company’s principal operations and geographic markets are mainly in the United States of America (the “U.S.”). During the six months ended September 30, 2025, the Company closed one store in U.S. During the year ended March 31, 2025, the Company closed four stores in the U.S. As of December 16, 2025, the Company currently operates a total of 13 retail stores, including 12 retail stores in the U.S and one retail store in Canada. During the three months ended September 30, 2025, 9 retail stores in the U.S were sold for streamlining the Company’s corporate structure and reducing complexity in financial reporting and operating costs. These 9 retail stores were operated through certain subsidiaries of the Company that were disposed of pursuant to share transfer agreements dated July 1, 2025, August 1, 2025, and September 1, 2025, respectively, as discussed in Note 14 to the Unaudited Condensed Consolidated Financial Statements in this Report. The Company offers rental services from selected locations. The Company also operates one online store, focusing on selling E-motorcycles, E-bikes, and E-scooters. The Company plans to open another online store focusing on selling gas bikes in the future.

The Company’s business was initially operated under CTATE INC. (“Ctate”), a corporation formed under the laws of the State of New York in 2018. Before merging with Fly E-Bike, Ctate owned 27 companies, each of which operated a Fly E-Bike store. On September 12, 2022, Ctate and Fly E-Bike, which was a wholly-owned subsidiary of Ctate, entered into an Agreement and Plan of Merger, pursuant to which Ctate merged into and with Fly E-Bike, with Fly E-Bike being the surviving corporation (the “Merger”). As a result of the Merger, the original shareholders of Ctate became the stockholders of Fly E-Bike and subsequently effectively controlled the combined entity.

On December 21, 2022, Fly-E Group and Fly E-Bike entered into a Share Exchange Agreement, pursuant to which Fly-E Group acquired all of the issued and outstanding shares of Fly E-Bike by issuing its shares to the stockholders of Fly E-Bike on a one-for-one basis (the “Share Exchange”). As a result of the Share Exchange, Fly E-Bike became a wholly owned subsidiary of Fly-E Group.

As a result of the Merger and the Share Exchange, Fly E-Bike and its subsidiaries are under common control of Fly-E Group, resulting in the consolidation of Fly E-Bike and its subsidiaries, which was accounted as a reorganization of entities under common control at carrying value. The unaudited condensed consolidated financial statements are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the unaudited condensed consolidated financial statements of Fly-E Group.

On June 7, 2024, the Company issued 22,500 shares of common stock, at a price of $400.00 per share in its initial public offering (“IPO”). The gross proceeds of the offering were $9.0 million, prior to deducting the underwriting discounts, commissions and offering expenses payable by the Company. In addition, the Company granted the underwriters a 30-day option to purchase an additional 3,375 shares of common stock at the initial public offering price, less underwriting discounts and commissions, to cover over-allotments. On June 25, 2024, the Company issued an additional 3,375 shares of common stock to the underwriters of its IPO for gross proceeds of $1.4 million upon full exercise of the underwriters’ over-allotment option. Net proceeds received by the Company from its initial public offering, including the exercise of the over-allotment option, were approximately $9.2 million. The Company also issued to The Benchmark Company, LLC (“Benchmark”), the representative of the underwriters warrants to purchase 1,294 shares.

On June 4, 2025, the Company issued 285,956 shares of common stock, at a price of $24.28 per share in its second public offering. The gross proceeds of the offering were $6.9 million, prior to deducting the placement agent’s fees and offering expenses payable by the Company. Each share of common stock was sold together with two warrants, with each warrant to purchase one share of common stock. Each warrant is exercisable immediately with an exercise price equal to 120% of the offering price ($29.13 per share) and expires on the fifth anniversary of the issuance date, subject to certain adjustments.

On September 18, 2025, the Company entered into a securities purchase agreement with third-party individuals offering of 687,500

SEC Form 10-Q filed by Fly-E Group Inc.