Fly-E Group, Inc.

Current report

Significant changes or developments with respect to domestic and international customs, tariffs, and trade policies, corresponding or retaliatory actions by other countries and related uncertainties could adversely affect our financial results and profitability.

Current report

On February 1, 2025, President Trump issued an executive order imposing a 10% ad valorem tariff on all imports from China, effective February 4, 2025. This tariff applies in addition to any existing duties, fees, or charges and is expected to remain in effect indefinitely, with the potential for further increases if China retaliates. As a company that imports raw materials and parts from China, we are subject to these increased costs, which could have a material adverse impact on our financial condition, results of operations, and profitability. The additional tariffs may increase our cost of goods sold, reduce our gross margins, and require us to pass higher costs on to customers, potentially affecting demand for our products. Additionally, supply chain disruptions and delays resulting from the new tariff policies could impact our ability to procure necessary materials in a timely manner. We will seek to mitigate these risks through alternative sourcing strategies, price adjustments, or operational efficiencies; however, there is no guarantee that such measures will fully offset the financial impact of the tariffs. Furthermore, given the evolving nature of U.S. trade policy, there is uncertainty regarding the duration and scope of these tariffs, as well as the potential for retaliatory measures by China that could further impact our supply chain and market conditions.

Current report

None.

Previous report

Our eligibility for listing on Nasdaq depends on our ability to comply with Nasdaq’s continued listing requirements.

Previous report

On October 2, 2024, we received written notice from Nasdaq indicating that the bid price for our common stock for the last 31 consecutive business days, had closed below the minimum $1.00 per share and, as a result, we are not in compliance with the $1.00 minimum bid price requirement for the continued listing on Nasdaq, as set forth in Nasdaq Listing Rule 5550(a)(2).

Previous report

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have a period of 180 calendar days, or until March 31, 2025, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of our common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days during this 180 day period.

Previous report

If we are not in compliance by March 31, 2025, we may qualify for a second 180 calendar day compliance period. To qualify, we will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq, with the exception of the bid price requirement, and will need to provide written notice of our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. If it appears to Nasdaq that we will not be able to cure the deficiency, or we are otherwise not eligible, then Nasdaq will notify us of its determination to delist our common stock, at which point we would have an option to appeal the delisting determination to a Nasdaq hearings panel.

Previous report

We are considering available options to regain compliance Nasdaq’s continued listing requirements. However, there can be no assurance that we will be able to regain such compliance.

Previous report

If Nasdaq delists our common stock from trading on its exchange, we and our stockholders could face significant material adverse consequences including:

Previous report

We believe there is substantial doubt about our ability to continue as a going concern as of the date of this Report. The going concern may be included in our future reports and could materially limit our ability to raise additional funds through the issuance of new debt or equity securities or otherwise.

Previous report

As of September 30, 2024, we had working capital of approximately $2.3 million and cash of approximately $1.3 million. During the three and six months ended September 30, 2024, we had net loss of approximately $1.1 million and $1.3 million, respectively. During the six months ended September 30, 2024, net cash used in operating activities of the Company was approximately $9.4 million. As of September 30, 2024, we had a current portion of contractual obligation of approximately $9.6 million. We plan to alleviate the going concern risk through (i) equity financing to support the Company’s working capital; (ii) other available sources of financing (including debt) from banks and other financial institutions; and (iii) financial support from the Company’s related parties. There is no assurance that we will be successful in implementing the foregoing plans or that additional financing will be available to us on commercially reasonable terms, or at all. Our inability to secure needed financing when required could require material changes to our business plans and could have a material adverse effect on our ability to continue as a going concern and results of operations.

Previous report

We did not undertake any unregistered sales of our equity securities during the quarter ended September 30, 2024.

Previous report

During the quarter ended September 30, 2024, we did not repurchase any shares of our common stock.

Previous report

On June 7, 2024, we closed our IPO of 2,250,000 shares of our common stock at the price of $4.00 per share, resulting in net proceeds to us of $7.9 million after deducting underwriting discounts and commissions and offering expenses. On June 25, 2024, we sold an additional 337,500 shares of common stock to the underwriters of our IPO for gross proceeds of $1.4 million upon full exercise of the underwriters’ over-allotment option. All of the shares issued and sold in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1, as amended (File No. 333-276830), which was declared effective by the Securities and Exchange Commission on May 14, 2024. The Benchmark Company, LLC acted as representative of the underwriters. We paid the underwriters in aggregate approximately $0.7 million in underwriting commissions and incurred offering expenses of approximately $0.5 million. No payments for such expenses were made to our directors or officers or their associates, holders of 10% or more of any class of our equity securities, or to our affiliates. No proceeds were used for the year ended March 31, 2024. Given the decline in sales and a weaker market demand, we launched E-bike rental business and reallocated proceeds originally intended for retail store expansion toward strategically building our inventory reserve. As of November 14, 2024, we used approximately $4.3 million, $2.5 million, and $2.5 million for purchase of inventory and production costs, software development, and working capital, respectively. As of the date of this Report, we have used all the proceeds from the IPO.