Fly-E Group, Inc.

Previous wording

Fly E-Bike was established in 2018 with its first store opened in New York. Our business has grown rapidly since then and we are now one of the leading providers of E-bikes for food delivery workers in New York City. As of December 16, 2025, we have 13 stores, including 12 retail stores in the U.S and one retail store in Canada. The Company offers rental services from selected locations in New York, Toronto, and Los Angeles. We also operate one online store at flyebike.com, focusing on selling E-motorcycles, E-bikes and E-scooters, serving customers in the United States. In addition, we plan to open a second online store focusing on selling gas bikes in the future. We plan to extend our business into South America and Europe in the future.

Current wording

Fly E-Bike was established in 2018 with its first store opened in New York. Our business has grown rapidly until mid 2024. As of April 20, 2026, we have 6 retail stores in the U.S. The Company offers rental services from selected locations in New York, and Los Angeles. We also operate one online store at flyebike.com, focusing on selling E-motorcycles, E-bikes and E-scooters, serving customers in the United States.

Previous wording

We also operate a rental program to meet the increasing market demand for safe, UL-certified e-bikes in compliance with New York State regulations. The rental service, now available in New York City, and Los Angeles via the Go Fly rental service mobile app and select Fly E-Bike stores, provides users with a flexible and affordable e-bike rental option. As part of our growth strategy, we plan to expand the rental service to Miami in the near term.

Current wording

We also operate a rental program to meet the increasing market demand for safe, UL-certified e-bikes in compliance with New York State regulations. The rental service, now available in New York City, and Los Angeles via the Go Fly rental service mobile app and select Fly E-Bike stores, provides users with a flexible and affordable e-bike rental option.

Previous wording

We are currently in the process of developing a Fly E-Bike app, which is a management service mobile software for our EVs, enabling customers to purchase bikes, locate company stores, schedule bike repairs, and more. We aim to design an app that will bring users a comprehensive intelligent experience to create a safer and more satisfying riding life. The development of the app is still in its preliminary stage. We have launched a testing version of the app, which is currently unavailable to our customers. In December 2023, the Company engaged DF Technology US Inc (“DFT”) for certain technology services including the development of an enterprise resource planning system (“ERP system”), and in July 2024, the Company engaged DFT to develop a mobile phone application for its renal services, the GO FLY APP. The GO FLY APP is fully completed and delivered on September 9, 2024. The ERP system is fully completed and delivered on May 20, 2025.

Current wording

We are currently in the process of developing a Fly E-Bike app, which is a management service mobile software for our EVs, enabling customers to purchase bikes, locate company stores, schedule bike repairs, and more. We aim to design an app that will bring users a comprehensive intelligent experience to create a safer and more satisfying riding life. The development of the app is still in its preliminary stage. We have launched a testing version of the app, which is currently unavailable to our customers. In December 2023, the Company engaged DF Technology US Inc (“DFT”) for certain technology services including the development of an enterprise resource planning system (“ERP system”), and in July 2024, the Company engaged DFT to develop a mobile phone application for its renal services, the GO FLY APP. The GO FLY APP is fully completed and delivered on September 9, 2024. The ERP system is fully completed and delivered on May 20, 2025. During the three months ended December 31, 2025, we engaged Phecda Technology (HK) Limited to enhance the ERP functions and develop app for Flyebike, Riding, Lease and Rental. These developments of the app are still in development stage.

Previous wording

We source a significant portion of our vehicle components from China and the United States, and then assemble them into our vehicles in a facility located in Maspeth, New York. For the three months ended September 30, 2025, we produced 1,146 E-motorcycles, 3,270 E-bikes and 756 E-scooters at the same facility. For the six months ended September 30, 2025, we produced 3,114 E-motorcycles, 4,783 E-bikes and 1,280 E-scooters at the same facility.

Current wording

We source a significant portion of our vehicle components from China and the United States, and then assemble them into our vehicles in a facility located in Maspeth and New York. For the three months ended December 31, 2025, we produced 459 E-motorcycles, 306 E-bikes and 124 E-scooters at the same facility. For the nine months ended December 31, 2025, we produced 3,573 E-motorcycles, 5,089 E-bikes and 1,404 E-scooters at the same facility.

Previous wording

On September 8, 2025, a federal securities class action was filed in the United States District Court, Eastern District of New York, by plaintiff Dino Kurt, individually and on behalf of all others similarly situated, against defendants, the Company, chief executive officer (the “CEO”) Zhou Ou, and former chief financial officer (the “CFO”) Shiwen Feng. The complaint alleges violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 during the class period spanning from July 15, 2025, to August 14, 2025. The plaintiff claims that defendants provided materially false and misleading positive statements about revenue growth, brand reputation, and business expansion, while concealing or minimizing material adverse facts concerning the safety of the Company’s lithium battery and inadequate forecasting processes, which were already taking a material toll on E-vehicle (the “EV”) sales revenue. The plaintiff alleged when the Company filed a form NT 10-Q on August 14, 2025, which disclosed a 32% decrease in net revenues primarily driven by a decline in total units sold, attributed by the Company to “recent lithium-battery accidents involving E-Bikes and E-Scooters”; the price of Company’s common stock declined dramatically by about 87% in a single day, resulting in economic loss for the plaintiff and the class.

Current wording

On September 8, 2025, a federal securities class action was filed in the United States District Court, Eastern District of New York, by plaintiff Dino Kurt, individually and on behalf of all others similarly situated, against defendants, the Company, chief executive officer (the “CEO”) Zhou Ou, and former chief financial officer (the “CFO”) Shiwen Feng (the “Class Action”). The complaint alleges violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 during the class period spanning from July 15, 2025, to August 14, 2025. The plaintiff claims that defendants provided materially false and misleading positive statements about revenue growth, brand reputation, and business expansion, while concealing or minimizing material adverse facts concerning the safety of the Company’s lithium battery and inadequate forecasting processes, which were already taking a material toll on E-vehicle (the “EV”) sales revenue. The plaintiff alleged when the Company filed a form NT 10-Q on August 14, 2025, which disclosed a 32% decrease in net revenues primarily driven by a decline in total units sold, attributed by the Company to “recent lithium-battery accidents involving E-Bikes and E-Scooters”; the price of Company’s common stock declined dramatically by about 87% in a single day, resulting in economic loss for the plaintiff and the class.

Previous wording

The relief sought includes determining that the action may be maintained as a class action, requiring defendants to pay damages sustained by the plaintiff and the class, and awarding pre-judgment and post-judgment interest, along with reasonable attorneys’ fees, expert fees, and other costs, with the monetary damages sought being certified to be in excess of $150,000.00.

Current wording

The relief sought includes determining that the action may be maintained as a class action, requiring defendants to pay damages sustained by the plaintiff and the class, and awarding pre-judgment and post-judgment interest, along with reasonable attorneys’ fees, expert fees, and other costs, with the monetary damages sought being certified to be in excess of $150,000.

Previous wording

On May 21, 2025, Company, along with its certain subsidiaries and certain individuals, and UL entered into a settlement and release agreement (the “Settlement Agreement”) on mutually acceptable settlement terms. Pursuant to the Settlement Agreement, the Company and the other defendants agreed to pay UL an aggregate amount of $1,000,000 before November 30, 2025, and entered into a Consent Judgment and Permanent Injunction pursuant to which the Company and the other defendants agreed not to offer for sale, sell, or distribute products with UL Marks that were not tested and certified by UL. During the six months ended September 30, 2025, the Company paid $800,000 to UL. From October 1, 2025 to the date of this report, the Company paid $200,000 to UL.

Current wording

On May 21, 2025, Company, along with its certain subsidiaries and certain individuals, and UL entered into a settlement and release agreement (the “Settlement Agreement”) on mutually acceptable settlement terms. Pursuant to the Settlement Agreement, the Company and the other defendants agreed to pay UL an aggregate amount of $1,000,000 before November 30, 2025, and entered into a Consent Judgment and Permanent Injunction pursuant to which the Company and the other defendants agreed not to offer for sale, sell, or distribute products with UL Marks that were not tested and certified by UL. During the nine months ended December 31, 2025, the Company paid $1,000,000 to UL.

Previous wording

On September 18, 2025, the Company entered into a securities purchase agreement with third-party individuals offering of (i) 687,500 shares of the common stock at the price of $16.0 per share for a total consideration of $11,000,000. During the Six months ended September 30, 2025, the Company received proceeds of $3,400,000 from the investors. The remaining net proceeds of $7,596,558 were held in escrow as of September 30, 2025, and were all received in October and November 2025. The disclosure that the closing of this transaction occurred on September 30, 2025, in the Form 8-K filed with the SEC was incorrect and is hereby corrected.

Current wording

On September 18, 2025, the Company entered into a securities purchase agreement with third-party individuals offering of (i) 687,500 shares of the common stock at the price of $16.0 per share for a total consideration of $11,000,000. During the nine months ended December 31, 2025, the Company received net proceeds of $10,996,558 from the investors. The disclosure that the closing of this transaction occurred on September 30, 2025, in the Form 8-K filed with the SEC was incorrect and is hereby corrected.

Previous wording

During the six months ended September 30, 2025, the Company disposed several subsidiaries as part of a disposal plan aimed at simplifying its legal and operational structure and improving administrative efficiency. The divestitures were not intended to be a strategic withdrawal from any specific geographic region or industry, but rather a measure to streamline the Company’s corporate structure and reduce complexity in financial reporting. Between April and September 2025, the Company sold 17 subsidiaries to third-party individuals in multiple transactions, for an aggregated cash consideration of approximately $0.9 million. See “Note 14— Disposal of Subsidiaries” in the accompanying consolidated financial statements for details.

Current wording

During the nine months ended December 31, 2025, the Company disposed several subsidiaries as part of a disposal plan aimed at simplifying its legal and operational structure and improving administrative efficiency. The divestitures were not intended to be a strategic withdrawal from any specific geographic region or industry, but rather a measure to streamline the Company’s corporate structure and reduce complexity in financial reporting. Between April and December 2025, the Company sold 19 subsidiaries to third-party individuals in multiple transactions, for an aggregated cash consideration of approximately $0.9 million. On January 1, 2026, the Company entered into share transfer agreements for the sale of 100% of its equity interests in subsidiaries – FLYFLS INC, FLYNJ2 INC., FLYE BIKE NJ3, INC, FLYNJ4 INC. and FLYTORONTO CORP. – to third-party buyers for a total cash consideration of $69,420, $68,627, $511,353, $146,473 and $628,151, respectively, with no contingent payments or adjustments. As of April 20, 2026, the Company did not receive any consideration from the third-party individuals. (See Note - 14 — DISPOSAL OF SUBSIDIARIES in the accompanying unaudited condensed consolidated financial statements for details).

Previous wording

Our growth will depend on our ability to achieve sales targets, including our ability to attract new customers, which in turn depends in part on our ability to execute our retail strategy and produce effective marketing initiatives to expand our brand perception with prospective customers. As of December 16, 2025, we currently operate 13 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. We offer rental services from selected locations. We also operate one online store, focusing on selling E-motorcycles, E-bikes, and E-scooters and selling our product in the United States. It is critical for us to successfully manage production ramp-up and quality control to deliver to customers in adequate volume and quality.

Current wording

Our growth will depend on our ability to achieve sales targets, including our ability to attract new customers, which in turn depends in part on our ability to execute our retail strategy and produce effective marketing initiatives to expand our brand perception with prospective customers. As of April 20, 2026, we currently operate 6 retail stores in the U.S.. During the three months ended December 31, 2025, 2 retail stores in the U.S were sold for streamlining the Company’s corporate structure and reducing complexity in financial reporting and operating costs. We offer rental services from selected locations. We also operate one online store, focusing on selling E-motorcycles, E-bikes, and E-scooters and selling our product in the United States. It is critical for us to successfully manage production ramp-up and quality control to deliver to customers in adequate volume and quality.

Previous wording

For the six months ended September 30, 2025, our net revenues decreased by 37.2% to $9.2 million, compared to $14.7 million for the same period in 2024, which was primarily driven by a decrease in total units sold and reductions in selling prices to reduce aged inventory for the six months ended September 30, 2025.

Current wording

For the three months ended December 31, 2025, our net revenues decreased by 53.3% to $2.6 million, compared to $5.7 million for the same period in 2024, which was primarily driven by a decrease in total units sold and reductions in selling prices to reduce aged inventory for the three months ended December 31, 2025.

Previous wording

Our payroll expenses were $0.6 million for the three months ended September 30, 2025, compared to $0.9 million for the three months ended September 30, 2024. Our payroll expenses were $1.2 million for the six months ended September 30, 2025, compared to $1.5 million for the six months ended September 30, 2024. As 17 stores were sold and 1 store was closed during the six months ended September 30, 2025, and the Company is planning to sell more stores in the subsequent quarter we expect a decrease in payroll expenses in the next quarter due to reduced demand for store sales staff. Each of our retail stores has a minimum of two employees, and additional office employees will be hired to support retail stores in customer service and marketing. In addition, to maintain excellent customer service in our retail stores, each store will have at least one trained repair professional. Effective management of payroll expenses remains crucial to our ability to grow revenue and enhance our financial results, especially as we navigate a reduced workforce.

Current wording

Our payroll expenses were $0.4 million for the three months ended December 31, 2025, compared to $1.3 million for the three months ended December 31, 2024. Our payroll expenses were $1.9 million for the nine months ended December 31, 2025, compared to $3.6 million for the nine months ended December 31, 2024. As 8 stores were sold and 1 store was closed during the three months ended June 30, 2025, 9 stores were sold and 1 store was closed during the three months ended September 30, 2025 and 2 stores were sold during the three months ended December 31, 2025, respectively, and the Company is planning to sell more stores in the subsequent quarter we expect a decrease in payroll expenses in the next quarter due to reduced demand for store sales staff. Each of our retail stores has a minimum of two employees, and additional office employees will be hired to support retail stores in customer service and marketing. In addition, to maintain excellent customer service in our retail stores, each store will have at least one trained repair professional. Effective management of payroll expenses remains crucial to our ability to grow revenue and enhance our financial results, especially as we navigate a reduced workforce.

Previous wording

During the three months ended September 30, 2025, we worked with two principal vendors, Depcl Corp. and Xiamen Innolabs Technology Co., Ltd, each of which respectively supplied approximately 72.0% and 6.6% of the accessories and components used in all our products for the three months ended September 30, 2025. During the six months ended September 30, 2025, we worked with two principal vendors, Depcl Corp. and Xiamen Innolabs Technology Co., Ltd, each of which respectively supplied approximately 68% and 7.6% of the accessories and components used in all our products for the six months ended September 30, 2025.

Current wording

During the three months ended December 31, 2025, we worked with two principal vendors, Depcl Corp. and Xiamen Innolabs Technology Co., Ltd, each of which respectively supplied approximately 76.2% and 5.1% of the accessories and components used in all our products. During the nine months ended December 31, 2025, we worked with two principal vendors, Depcl Corp. and Xiamen Innolabs Technology Co., Ltd, each of which respectively supplied approximately 70.2% and 6.9% of the accessories and components used in all our products.

Previous wording

We operate in an industry that is subject to extensive environmental, safety and other laws and regulations, which include products safety and testing, as well as battery safety and disposal. These requirements create additional costs and possible production delay in connection with the testing and manufacturing of our products. We also benefit from environmental regulations in our target markets which include economic incentives to purchasers of EVs and tax credits for EV manufacturers. The Governor of New York State signed a legislative package in July 2024 aimed at raising awareness about the safe use of e-bikes and lithium-ion battery products, prohibiting the sale of non-compliant batteries, requiring safety protocols and training for first responders, mandating operating manuals for e-bike retailers, and improving accident reporting and registration processes for e-bikes and mopeds. Additionally, in January 2025, the New York City Department of Transportation launched a $2 million trade-in program, allowing eligible food delivery workers to replace their unsafe e-bikes, e-mobility devices, and batteries with certified, high-quality versions. Our Fly-11 PRO was chosen for the official model of DOT and participates in this program. From January 2025 to September 2025, we participated in this program and completed the delivery of Fly-11 Pro models to our retail partner participating in the program. While we expect relevant regulations to provide a tailwind to our growth, it is possible for other regulations to result in margin pressures.

Current wording

We operate in an industry that is subject to extensive environmental, safety and other laws and regulations, which include products safety and testing, as well as battery safety and disposal. These requirements create additional costs and possible production delay in connection with the testing and manufacturing of our products. We also benefit from environmental regulations in our target markets which include economic incentives to purchasers of EVs and tax credits for EV manufacturers. The Governor of New York State signed a legislative package in July 2024 aimed at raising awareness about the safe use of e-bikes and lithium-ion battery products, prohibiting the sale of non-compliant batteries, requiring safety protocols and training for first responders, mandating operating manuals for e-bike retailers, and improving accident reporting and registration processes for e-bikes and mopeds.

Previous wording

Our retail sales revenue decreased by $3.9 million, or 65.8%, from $5.9 million for the three months ended September 30, 2024 to $2.0 million for the three months ended September 30, 2025. Our wholesale revenue increased by $0.8 million, or 91.3%, from $0.9 million for the three months ended September 30, 2024 to $1.7 million for the three months ended September 30, 2025. The decrease in retail sales revenue is mainly due to recent lithium-battery accidents involving E-Bikes and E-Scooters. With an increasing number of lithium-battery explosion incidents in New York, customers are less inclined to purchase E-Bikes. Consequently, sales have declined as customers opt for oil-powered vehicles over electric vehicles. The decrease in retail sales also attributed in part to the closures and disposition of our retail stores during the three months ended September 30, 2025. The increase in wholesales revenue was driven primarily by revenue contribution from the dispositioned entities during the three months ended September 30, 2025. Although certain retail stores were sold, these stores continued to purchase products from the Company, which contributes an increase of wholesale revenue.

Current wording

Our retail sales revenue decreased by $4.3 million, or 86.8%, from $4.9 million for the three months ended December 31, 2024 to $0.6 million for the three months ended December 31, 2025. Our wholesale revenue increased by $1.1 million, or 153.4%, from $0.7 million for the three months ended December 31, 2024 to $1.8 million for the three months ended December 31, 2025. The decrease in retail sales revenue is mainly due to recent lithium-battery accidents involving E-Bikes and E-Scooters. With an increasing number of lithium-battery explosion incidents in New York, customers are less inclined to purchase E-Bikes. Consequently, sales have declined as customers opt for oil-powered vehicles over electric vehicles. The decrease in retail sales also attributed in part to the closures and disposition of our retail stores during the three months ended December 31, 2025. The increase in wholesales revenue was driven primarily by revenue contribution from the dispositioned entities during the three months ended December 31, 2025. Although certain retail stores were sold, these stores continued to purchase products from the Company, which contributes an increase of wholesale revenue.

Previous wording

Cost of revenues decreased by 25.2%, from $3.9 million for the three months ended September 30, 2024, to $2.9 million for the three months ended September 30, 2025. The decrease in cost of revenues was primarily attributable to a reduction in sales volume, as discussed above.

Current wording

Cost of revenues decreased by 48.6%, from $3.1 million for the three months ended December 31, 2024, to $1.6 million for the three months ended December 31, 2025. The decrease in cost of revenues was primarily attributable to a reduction in sales volume, as discussed above.

Previous wording

Gross profit for the three months ended September 30, 2025 and 2024 was $1.0 million and $2.9 million, respectively. Gross margin was 25.0% and 42.6% for the three months ended September 30, 2025 and 2024, respectively. The decrease in gross margin was mainly due to a combined effect of decrease in average unit price of EVs, which dropped by 61% for the three months ended September 30, 2025 and the increased revenues from rental business with higher margin than our other businesses. The rental business was launched in the fourth quarter of 2024. Gross margin of rental business was 79.8% and nil for the three months ended September 30, 2025 and 2024, respectively.

Current wording

Gross profit for the three months ended December 31, 2025 and 2024 was $1.1 million and $2.6 million, respectively. Gross margin was 39.6% and 45.1% for the three months ended December 31, 2025 and 2024, respectively. The decrease in gross margin was mainly due to a combined effect of decrease in quantity of EV sold, which dropped by 87% as a result of decrease in number of retail stores during the nine months ended December 31, 2025 and the increased revenues from rental business with higher margin than our other businesses. The rental business was launched in October 2024. Gross margin of rental business was 79.8% and $100.0% for the three months ended December 31, 2025 and 2024, respectively.

Previous wording

Total operating expenses were $2.0 million for the three months ended September 30, 2025, a decrease of $2.1 million, or 51.0%, compared to $4.1 million for the three months ended September 30, 2024. The increase in operating expenses was attributable to the increase in our depreciation expense, professional fees, product and software development expenses, as more fully discussed below.

Current wording

Total operating expenses were $2.6 million for the three months ended December 31, 2025, a decrease of $0.9 million, or 25.6%, compared to $3.5 million for the three months ended December 31, 2024. The decrease in operating expenses was attributable to the combined effect of decrease in out payroll and rent expenses and increase in our depreciation expense, professional fees, and impairment loss on property and equipment, as more fully discussed below.

Previous wording

Selling expenses primarily consist of payroll expenses, rent, and advertising expenses of retail stores. Total payroll expenses were $0.6 million for the three months ended September 30, 2025, compared to $0.9 million for the three months ended September 30, 2024. Rent was $0.3 million for the three months ended September 30, 2025, compared to $0.8 million for the three months ended September 30, 2024. Advertising expenses were $15,457 for the three months ended September 30, 2025, compared to $129,542 for the three months ended September 30, 2024 . The decrease in these expenses was primarily due to the closures and dispositions of retail stores during this quarter.

Current wording

Selling expenses primarily consist of payroll expenses, rent, and advertising expenses of retail stores. Total payroll expenses were $0.1 million for the three months ended December 31, 2025, compared to $0.9 million for the three months ended December 31, 2024. Rent was $0.3 million for the three months ended December 31, 2025, compared to $0.7 million for the three months ended December 31, 2024. Advertising expenses were $3,234 for the three months ended December 31, 2025, compared to $32,681 for the three months ended December 31, 2024. The decrease in these expenses was primarily due to the closures and dispositions of retail stores during this quarter.

Previous wording

General and administrative expenses decreased during the three months ended September 30, 2025 compared to the same period of previous year. Professional fees decreased to $0.5 million for the three months ended September 30, 2025, compared to $0.9 million for the three months ended September 30, 2024, primarily attributable to the decrease in audit fee, consulting fee, legal fee and IR expenses associated with our public offering and ongoing reporting obligations. Payroll expenses decreased to $0.1 million for the three months ended September 30, 2025 from $0.4 million for the three months ended September 30, 2024 primarily due to decrease in headcount of office assistants. Depreciation expense increased to $0.06 million for the three months ended September 30, 2025, compared to $0.04 million for the same period in prior year due to the increasing cost basis of fixed assets.

Current wording

General and administrative expenses increased during the three months ended December 31, 2025 compared to the same period of previous year. Professional fees increased to $0.8 million for the three months ended December 31, 2025, compared to $0.4 million for the three months ended December 31, 2024, primarily attributable to the increase in legal fee associated with our litigations and ongoing reporting obligations. Payroll expenses decreased to $0.2 million for the three months ended December 31, 2025 from $0.4 million for the three months ended December 31, 2024 primarily due to decrease in headcount of office assistants. Depreciation expense decreased to $30,526 for the three months ended December 31, 2025, compared to $54,152 for the same period in prior year due to the closures and dispositions of retail stores. Impairment loss on property and equipment increase to $0.6 million for the three months ended December 31, 2025, compared to nil for the three months ended December 31, 2024,

Previous wording

Interest expenses, net were $0.54 million for the three months ended September 30, 2025, an increase of $0.52 million from interest expenses, net of $0.02 million for the three months ended September 30, 2024. This increase was primarily because of an increase in loans payable with higher average annual interest rate to finance the business operation of the Company for the three months ended September 30, 2025.

Current wording

Interest expenses, net were $0.5 million for the three months ended December 31, 2025, an increase of $0.3 million from interest expenses, net of $0.2 million for the three months ended December 31, 2024. This increase was primarily because of an increase in loans payable with higher average annual interest rate to finance the business operation of the Company for the three months ended December 31, 2025.

Previous wording

Income taxes expense was $40,012 for the three months ended September 30, 2025, a change from income tax benefit of $165,935 for the three months ended September 30, 2024. Although the Company incurred pre-tax losses in both periods, the change was primarily because of differences in the recognition of deferred tax assets and related valuation allowance.

Current wording

Income taxes benefits was $149,830 for the three months ended December 31, 2025, decreased from income tax benefit of $428,164 for the three months ended December 31, 2024. Although the Company incurred pre-tax losses in both periods, the change was primarily because of differences in the recognition of deferred tax assets and related valuation allowance.

Previous wording

Net loss was $1.8 million for the three months ended September 30, 2025, an increase of $0.6 million, or 55.4%, from net loss of $1.1 million for the three months ended September 30, 2024, which was mainly attributable to the reasons discussed above.

Current wording

Net loss was $1.9 million for the three months ended December 31, 2025, an increase of $1.2 million, or 181.0%, from net loss of $0.7 million for the three months ended December 31, 2024, which was mainly attributable to the reasons discussed above.

Previous wording

Before interest expenses, income tax, depreciation, and amortization, for the three months ended September 30, 2025, our net loss was approximately $1.0 million, a decrease of approximately $0.2 million, compared to net loss of $1.2 million for the three months ended September 30, 2024, which was mainly attributable to the decrease in revenue, selling expenses and general and administrative expenses described above. The ratio of EBITDA to revenue was negative 24.7% and negative 17.5% for the three months ended September 30, 2025 and 2024, respectively.

Current wording

Before interest expenses, income tax, depreciation, and amortization, for the three months ended December 31, 2025, our net loss was approximately $1.4 million, an increase of approximately $0.6 million, compared to net loss of $0.8 million for the three months ended December 31, 2024, which was mainly attributable to the decrease in revenue and selling expenses and increase in general and administrative expenses described above. The ratio of EBITDA to revenue was negative 53.6% and negative 14.3% for the three months ended December 31, 2025 and 2024, respectively.

Previous wording

Our net revenues were $9.2 million for the six months ended September 30, 2025, a decrease of 37.2%, from $14.7 million for the six months ended September 30, 2024. The decrease in our net revenues was driven by a decrease in total units sold, which decreased by 2,924 units, from 31,936 units for the six months ended September 30, 2024 to 29,012 units for the six months ended September 30, 2025, and as a result of lowering the selling prices to reduce aged inventory. From the six months ended September 30, 2024 to the six months ended September 30, 2025, while the number of units sold of certain other types of products increased, the quantities of motorcycles and batteries sold, which normally contribute significantly to revenues, decreased by 641 units and 5,332 units, respectively, thereby resulting in an overall decrease in the total number of units sold.

Current wording

Our net revenues were $11.9 million for the nine months ended December 31, 2025, a decrease of 41.7%, from $20.4 million for the nine months ended December 31, 2024. The decrease in our net revenues was driven by a decrease in total units sold, which decreased by 15,447 units, from 41,925 units for the nine months ended December 31, 2024 to 26,478 units for the nine months ended December 31, 2025, and as a result of lowering the selling prices to reduce aged inventory. From the nine months ended December 31, 2024 to the nine months ended December 31, 2025, while the number of units sold of certain other types of products increased, the quantities of motorcycles and batteries sold, which normally contribute significantly to revenues, decreased by 641 units and 5,332 units, respectively, thereby resulting in an overall decrease in the total number of units sold.

Previous wording

Our retail sales revenue decreased by $7.0 million, or 54.7%, from $12.8 million for the six months ended September 30, 2024 to $5.8 million for the six months ended September 30, 2025. Our wholesale revenue increased by $1.2 million, or 65.5%, from $1.9 million for the six months ended September 30, 2024 to $3.2 million for the six months ended September 30, 2025. The decrease in retail sales revenue is mainly due to decrease in number of retail stores during the six months ended September 30, 2025. The increase in wholesales revenue was driven primarily by contributions from the disposed entities during the six months ended September 30, 2025. Although certain retail stores were sold, these stores continued to purchase products from the Company, which contributed to the increase of wholesale revenue.

Current wording

Our retail sales revenue decreased by $11.3 million, or 63.6%, from $17.7 million for the nine months ended December 31, 2024 to $6.4 million for the nine months ended December 31, 2025. Our wholesale revenue increased by $2.3 million, or 89.5%, from $2.6 million for the nine months ended December 31, 2024 to $5.0 million for the nine months ended December 31, 2025. The decrease in retail sales revenue is mainly due to decrease in number of retail stores during the nine months ended December 31, 2025. The increase in wholesales revenue was driven primarily by contributions from the disposed entities during the nine months ended December 31, 2025. Although certain retail stores were sold, these stores continued to purchase products from the Company, which contributed to the increase of wholesale revenue.

Previous wording

Cost of revenues decreased by 31.0 %, from $8.7 million for the six months ended September 30, 2024, to $6.0 million for the six months ended September 30, 2025. The decrease in cost of revenues was primarily attributable to a reduction in battery sales volume, as discussed previously. These factors collectively contributed to the overall decrease in cost of revenues.

Current wording

Cost of revenues decreased by 35.7%, from $11.8 million for the nine months ended December 31, 2024, to $7.6 million for the nine months ended December 31, 2025. The decrease in cost of revenues was primarily attributable to a reduction in motorcycles and batteries sales volume, as discussed previously. These factors collectively contributed to the overall decrease in cost of revenues.

Previous wording

The following table shows our gross profit and gross margin for the six months ended September 30, 2025 and 2024:

Current wording

The following table shows our gross profit and gross margin for the nine months ended December 31, 2025 and 2024:

Previous wording

Gross profit for the six months ended September 30, 2025 and 2024 was $3.2 million and $6.0 million, respectively. Gross margin was 35.1% and 40.9% for the six months ended September 30, 2025 and 2024, respectively. The decrease in gross margin was driven primarily by the decrease of the average sale price of our EVs for the six months ended September 30, 2025 when compared with the six months ended September 30, 2024, and increased revenues from rental business with higher margin than our other businesses.

Current wording

Gross profit for the nine months ended December 31, 2025 and 2024 was $4.3 million and $8.6 million, respectively. Gross margin was 36.1% and 42.0% for the nine months ended December 31, 2025 and 2024, respectively. The decrease in gross margin was driven primarily by the decrease of the average sale price of our EVs for the nine months ended December 31, 2025 when compared with the nine months ended December 31, 2024, and increased revenues from rental business with higher margin than our other businesses.

Previous wording

The following table sets forth the components of our total operating expenses for the six months ended September 30, 2025 and 2024:

Current wording

The following table sets forth the components of our total operating expenses for the nine months ended December 31, 2025 and 2024:

Previous wording

Total operating expenses were $5.8 million for the six months ended September 30, 2025, a decrease of $1.5 million, or 20.5%, compared to $7.3 million for the six months ended September 30, 2024. The decrease in operating expenses was attributable to the decrease in our payroll expenses, rent expenses, meals and entertainment expenses, professional fees, and development expenses as we downsized our business as discussed below.

Current wording

Total operating expenses were $8.4 million for the nine months ended December 31, 2025, a decrease of $2.4 million, or 22.1%, compared to $10.8 million for the nine months ended December 31, 2024. The decrease in operating expenses was attributable to the decrease in our payroll expenses, rent expenses, meals and entertainment expenses, professional fees, and insurance expenses as we downsized our business as discussed below.

Previous wording

Selling expenses primarily consist of payroll expenses, rent, utilities expenses, and advertising expenses of retail stores. Total payroll expenses were $1.2 million for the six months ended September 30, 2025, compared to $1.5 million for the six months ended September 30, 2024. Rent expenses were $0.7 million for the six months ended September 30, 2025, compared to $1.5 million for the six months ended September 30, 2024. Utilities expenses were $81,468 for the six months ended September 30, 2025, compared to $119,252 for the six months ended September 30, 2024. Advertising expenses were $32,870 for the six months ended September 30, 2025, compared to $0.2 million for the six months ended September 30, 2024 . The decrease in these expenses was primarily due to the closures and dispositions of retail stores in the six months ended September 30, 2025.

Current wording

Selling expenses primarily consist of payroll expenses, rent, utilities expenses, and advertising expenses of retail stores. Total payroll expenses were $1.4 million for the nine months ended December 31, 2025, compared to $2.5 million for the nine months ended December 31, 2024. Rent expenses were $1.1 million for the nine months ended December 31, 2025, compared to $2.2 million for the nine months ended December 31, 2024. Utilities expenses were $0.1 million for the nine months ended December 31, 2025, compared to $0.2 million for the nine months ended December 31, 2024. Advertising expenses were $36,104 for the nine months ended December 31, 2025, compared to $0.2 million for the nine months ended December 31, 2024 The decrease in these expenses was primarily due to the closures and dispositions of retail stores in the nine months ended December 31, 2025.

Previous wording

General and administrative expenses decreased during the six months ended September 30, 2025 compared to the previous year. Professional fees increased to $2.0 million for the six months ended September 30, 2024, compared to $1.3 million for the six months ended September 30, 2024, primarily attributable to the increase in audit fee, consulting fee, legal fee and IR expenses associated with our initial public offering and ongoing reporting obligations. Payroll expenses decreased to $0.4 million for the six months ended September 30, 2025 from $0.8 million for the six months ended September 30, 2024 primarily due to employees terminated in operation and accounting departments. Insurance expenses decreased to $0.3 million for the six months ended September 30, 2025, compared to $0.5 million for the same period of prior year as a result of less insurance policies purchased for closed stores during the six months ended September 30, 2025. Software development fee decreased to $0.27 million for the six months ended September 30, 2025, compared to $0.31 million for the same period in prior year as a result of less maintenance services required for Fly E-Bike app as a result of the closures and dispositions of retail stores during the six months ended September 30, 2025.

Current wording

General and administrative expenses increased during the nine months ended December 31, 2025 compared to the previous year. Professional fees increased to $2.7 million for the nine months ended December 31, 2025, compared to $1.7 million for the nine months ended December 31, 2024, primarily attributable to the increase in audit fee, consulting fee, legal fee and IR expenses associated with litigations and ongoing reporting obligations. Payroll expenses decreased to $0.6 million for the nine months ended December 31, 2025 from $1.2 million for the nine months ended December 31, 2024 primarily due to employees terminated in operation and accounting departments. Insurance expenses decreased to $0.3 million for the nine months ended December 31, 2025, compared to $0.8 million for the same period of prior year as a result of less insurance policies purchased for closed stores during the nine months ended December 31, 2025. Impairment loss on property and equipment increase to $0.6 million for the nine months ended December 31, 2025, compared to nil for the nine months ended December 31, 2024.

Previous wording

Income tax benefit was $10,247 for the six months ended September 30, 2025, a decrease of $83,243 from income tax benefit of $93,490 for the six months ended September 30, 2024. This decrease was primarily because of differences in the recognition of deferred tax assets and related valuation allowance for the six months ended September 30, 2025.

Current wording

Income tax benefit was $160,077 for the nine months ended December 31, 2025, a decrease of $361,577 from income tax benefit of $521,654 for the nine months ended December 31, 2024. This decrease was primarily because of differences in the recognition of deferred tax assets and related valuation allowance for the nine months ended December 31, 2025.

Previous wording

Net loss was $3.8 million for the six months ended September 30, 2025, an increase of $2.5 million, or 186.2%, from net loss of $1.3 million for the six months ended September 30, 2024, which was mainly attributable to the reasons discussed above.

Current wording

Net loss was $5.7 million for the nine months ended December 31, 2025, an increase of $3.7 million, or 184.4%, from net loss of $2.0 million for the nine months ended December 31, 2024, which was mainly attributable to the reasons discussed above.

Previous wording

The following table sets forth the components of our EBITDA for the six months ended September 30, 2025 and 2024:

Current wording

The following table sets forth the components of our EBITDA for the nine months ended December 31, 2025 and 2024:

Previous wording

Before interest expenses, income tax, depreciation, and amortization, for the six months ended September 30, 2025, our net loss was $2.2 million, an increase of $1.1 million, compared to net loss of $1.1 million for the six months ended September 30, 2024, which was mainly attributable to the decrease in revenue, decrease in selling and general and administrative expense described above. The ratio of EBITDA to revenue was negative 24.2% and 7.7% for the six months ended September 30, 2025 and 2024, respectively.

Current wording

Before interest expenses, income tax, depreciation, and amortization, for the nine months ended December 31, 2025, our net loss was $3.7 million, an increase of $1.8 million, compared to net loss of $1.9 million for the nine months ended December 31, 2024, which was mainly attributable to the decrease in revenue, decrease in selling and increase in general and administrative expense described above. The ratio of EBITDA to revenue was negative 30.8% and 9.5% for the nine months ended December 31, 2025 and 2024, respectively.

Previous wording

As of September 30, 2025, we had cash of $2.5 million. We had working capital of $8.1 million and $1.3 million as of September 30, 2025 and March 31, 2025, respectively. We had net loss of $3.7 million and $1.3 million for the six months ended September 30, 2025 and 2024, respectively. During the six months ended September 30, 2025, net cash used in operating activities of the Company was approximately $7.7 million. As of September 30, 2025, the Company had a current portion of contractual obligation of approximately $7.8 million, including short-term loan payables of approximately $5.5 million, current portion of long-term loan payables of approximately $0.2 million, accrued UL penalty of $0.2 million and current portion of operating lease liabilities of approximately $1.8 million.

Current wording

As of December 31, 2025, we had cash of $0.3 million. We had working capital of $13.4 million and $1.3 million as of December 31, 2025 and March 31, 2025, respectively. We had net loss of $5.7 million and $2.0 million for the nine months ended December 31, 2025 and 2024, respectively. During the nine months ended December 31, 2025, net cash used in operating activities of the Company was approximately $14.0 million. As of December 31, 2025, the Company had a current portion of contractual obligation of approximately $5.5 million, including short-term loan payables of approximately $3.9 million, current portion of long-term loan payables of approximately $0.1 million, and current portion of operating lease liabilities of approximately $1.5 million.

Previous wording

On September 18, 2025, the Company entered into a securities purchase agreement with third-party individuals offering of (i) 687,500 shares of the common stock at the price of $16.0 per share for a total consideration of $11,000,000. During the Six months ended September 30, 2025, the Company received proceeds of $3,400,000 from the investors. The remaining net proceeds of $7,596,558 were all collected in October and November 2025.

Current wording

On September 18, 2025, the Company entered into a securities purchase agreement with third-party individuals offering of (i) 687,500 shares of the common stock at the price of $16.0 per share for a total consideration of $11,000,000. During the nine months ended December 31, 2025, the Company received net proceeds of $10,996,558 from the investors.

Previous wording

As of September 30, 2025, the Company had working capital of approximately $8.1 million and cash of approximately $2.5 million. The main cash outflow for the six months ended September 30, 2025 was from net loss of $3.8 million, a decrease in accounts payable of $0.7 million, an increase in accounts receivable of $1.0 million, an increase in inventory of $1.1 million, and an increase in prepayments and other receivables of $1.4 million. As of September 30, 2025, the Company had a current portion of contractual obligation of approximately $7.8 million, including short-term loan payables of approximately $5.5 million, current portion of long-term loan payables of approximately $0.2 million, accrued UL penalty of $0.2 million and current portion of operating lease liabilities of approximately $1.8 million. The Company became default of repayment for loan with Peapack-Gladstone Bank since August 31, 2025. For the six months ended September 30, 2025, the Company paid $373,683 on interest of the line of credit without further penalty. From October 1 to December 16, 2025, the Company paid $1,000,000, $172,693 and $117,921 on principal, interest and forbearance fee of the loan, respectively. Up to the date of this report, the Company entered into forbearance and modification agreement with the bank on November 7, 2025 for extension of repayment deadline with interest rate of 12.875% to March 31, 2026. These factors raise substantial doubt as to the Company’s ability to continue as a going concern. For the next 12 months from the issuance date of this report, 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. The issuance and sale of additional equity would result in further dilution to our stockholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. In the event that financing sources are not available, or that we are unsuccessful in increasing our gross profit margin and reducing operating losses, we may be unable to implement our current plans for expansion, repay debt obligations or respond to competitive pressures, any of which would have a material adverse effect on our business, financial condition and results of operations and may materially adversely affect our ability to continue as a going concern. The unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded assets or the amounts and classification of liabilities or any other adjustments that might be necessary should we be unable to continue as a going concern.

Current wording

As of December 31, 2025, the Company had working capital of approximately $13.4 million and cash of approximately $0.3 million. The main cash outflow for the nine months ended December 31, 2025 was from net loss of $5.7 million, a decrease in accounts payable of $0.9 million, an increase in accounts receivable of $1.2 million, an increase in inventory of $1.0 million, and an increase in prepayments and other receivables of $6.4 million. The Company became default of repayment for loan with Peapack-Gladstone Bank since August 31, 2025. For the nine months ended December 31, 2025, the Company paid $582,307 on interest of the line of credit without further penalty. During the three months ended December 31, 2025, the Company paid $1,000,000, $172,693 and $117,921 on principal, interest and forbearance fee of the loan, respectively. The Company entered into forbearance and modification agreement with the bank on November 7, 2025 for extension of repayment deadline with interest rate of 12.875% to March 31, 2026. Subsequent to the execution of the forbearance agreement, the Company has received written notices from Peapack Private Bank asserting defaults and reserving the lender’s rights to pursue remedies under the applicable loan documents. These factors raise substantial doubt as to the Company’s ability to continue as a going concern. For the next 12 months from the issuance date of this report, 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. The issuance and sale of additional equity would result in further dilution to our stockholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. In the event that financing sources are not available, or that we are unsuccessful in increasing our gross profit margin and reducing operating losses, we may be unable to implement our current plans for expansion, repay debt obligations or respond to competitive pressures, any of which would have a material adverse effect on our business, financial condition and results of operations and may materially adversely affect our ability to continue as a going concern. The unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded assets or the amounts and classification of liabilities or any other adjustments that might be necessary should we be unable to continue as a going concern.