Fly-E Group, Inc.
For the period ended Mar 31, 2026. Filed Jul 23, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Jul 23, 2026
FLYE$2.35+4.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-03-31; filed 2025-07-15.
0001213900-25-064293
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-03-31; filed 2026-07-23.
0001213900-26-080973
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 108 previous paragraphs and 147 current paragraphs.
66 unchanged; 31 reworded; 48 added; 11 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (48)
Current report
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.
Current report
On January 21, 2026, the Company was notified by the U.S. Securities and Exchange Commission (the “Commission”) that it has initiated an investigation involving the Company. The Company has not been provided with substantive details regarding the investigation, and is fully cooperating with the investigation.
Current report
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.
Current report
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.
Current report
On May 22, 2026, the lead plaintiff in the Class Action filed an Amended Complaint. The Company's response to the Amended Complaint is due August 14, 2026. Given the preliminary stage of the lawsuit and the inherent uncertainties of litigation, the Company cannot determine with certainty the outcome of the Class Action at this time.
Current report
On October 28, 2025, a shareholder derivative lawsuit was filed purportedly on behalf of the Company, as nominal defendant, against certain of its current and former directors and officers in the United States Court for the Eastern District of New York, captioned Flynn v. Ou et al, No. 1:25-cv-06036 (E.D.N.Y.) (the “Flynn Action”). The complaint filed in the Flynn Action alleges claims for alleged breach of fiduciary duties and gross mismanagement, among others. On November 17, 2025, an additional putative shareholder derivative lawsuit was filed purportedly on behalf of the Company, as nominal defendant, against certain of its current and former directors and officers in the United States Court for the Eastern District of New York, captioned Shah v. Ou et al, No. 1:25-cv-06372 (E.D.N.Y.) (the “Shah Action”). The complaint filed in the Shah Action alleges claims for alleged breach of fiduciary duty, unjust enrichment, waste of corporate assets, gross mismanagement, abuse of control, among others.
Current report
The Flynn Action and Shah Action are based on the same alleged facts and circumstances as the Class Action and seek damages from the current and former directors and officers and an order directing the Company and current and former directors and officers to take actions to reform and improve corporate governance and internal procedures. On December 9, 2025, the Court consolidated the Flynn Action and Shah Action into a single consolidated action captioned In re Fly-E Group, Inc. Stockholder Derivative Litigation, No. 1:25-cv-06036 (E.D.N.Y.) (the “Consolidated Derivative Action”), and appointed co-lead counsel. The current and former director and officer defendants dispute the allegations in the complaints and intend to vigorously defend against all claims. Given the preliminary stage of the lawsuit and the inherent uncertainties of litigation, we cannot determine with certainty the outcome of the Consolidated Derivative Action at this time.
Current report
UL Litigation
Current report
On or about March 12, 2025, UL LLC (“UL”) filed a complaint against the Company, along with the Company’s certain subsidiaries and certain individuals, in the Eastern District of New York (the “Complaint”). The Complaint alleges that the Company improperly used UL’s trademark by claiming certain products were certified by UL. The Complaint seeks $2,000,000 for each instance an allegedly counterfeit UL mark was used and asserts claims for federal trademark infringement and counterfeiting, unfair competition and false designations of the origin and false and misleading representations, common law unfair competition, common law unjust enrichment, and unlawful deceptive acts and practices.
Current report
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 year ended March 31, 2026, the Company paid $1,000,000 to UL.
Current report
The Settlement Agreement fully resolves all pending litigation between UL and the Company, and each party fully releases the other party from any and all past or present claims, demands, causes of action, obligations, damages, liabilities, expenses, or compensation of whatever kind or nature, that were or could have been asserted in connection with the Company’s sales of products with a UL Mark which were not tested and certified by UL.
Current report
On March 10, 2025, the Company held a special meeting of stockholders. At the special meeting, the stockholders approved a proposal to amend the Company’s amended and restated certificate of incorporation to effect a reverse stock split of the Company’s issued and outstanding shares of common stock, par value $0.01 per share, by a ratio in the range of 1-for-2 to 1-for-15, with such ratio to be determined in the discretion of the board of directors of the Company and with such action to be effected at such time and date, if at all, as determined by the board of directors within one year after the conclusion of the special meeting.
Current report
On June 16, 2025, the board of directors approved a one-for-five (1:5) reverse stock split of the Company’s issued and outstanding shares of common stock (the “2025 First Reverse Stock Split”). On July 2, 2025, the Company filed with the Secretary of State of the State of Delaware the Second Certificate of Amendment to its Certificate of Incorporation (the “Certificate of Amendment”) to effect the 2025 First Reverse Stock Split. The 2025 First Reverse Stock Split became effective as of 5:00 p.m., Eastern Time, on July 3, 2025, and the Company’s common stock began trading on the Nasdaq Stock Market on a split-adjusted basis on July 7, 2025.
Current report
After the 2025 First Reverse Stock Split, every five (5) shares of the Company’s issued and outstanding common stock have been automatically converted into one share of common stock, without any change in the par value per share. In addition, (i) a proportionate adjustment has been made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding warrants to purchase shares of common stock, and (ii) the number of shares reserved for issuance pursuant to the Company’s stock incentive plan has been reduced proportionately. Any fraction of a share of common stock created as a result of the 2025 First Reverse Stock Split was rounded up to the nearest whole share. The Company’s common stock continues to trade on the Nasdaq Capital Market under the symbol “FLYE.”
Current report
On September 15, 2025, the Company planned to hold a special meeting of stockholders, but adjourned to October 13, 2025 in order to achieve a quorum (the “Special Meeting”). At the special meeting, the stockholder approved a proposal to amend the Company’s amended and restated certificate of incorporation to effect a reverse stock split of the Company’s issued and outstanding shares of common stock, par value $0.01 per share, , by a ratio in the range of 1-for-2 to 1-for-20, with such ratio to be determined in the discretion of the board of directors of the Company and with such action to be effected at such time and date, if at all, as determined by the board of directors within one year after the conclusion of the special meeting.
Current report
On October 13, 2025, the board of directors approved a one-for-twenty (1:20) reverse stock split of the Company’s issued and outstanding shares of common stock (the “2025 Second Reverse Stock Split”). On October 23, 2025, the Company filed with the Secretary of State of the State of Delaware the Second Certificate of Amendment to its Certificate of Incorporation (the “Certificate of Amendment”) to effect the 2025 Second Reverse Stock Split. The 2025 Second Reverse Stock Split became effective on November 4, 2025, and the Company’s common stock began trading on the Nasdaq Stock Market on a split-adjusted basis on November 4, 2025.
Current report
After the 2025 Second Reverse Stock Split, every twenty (20) shares of the Company’s issued and outstanding common stock have been automatically converted into one share of common stock, without any change in the par value per share. In addition, (i) a proportionate adjustment has been made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding warrants to purchase shares of common stock, and (ii) the number of shares reserved for issuance pursuant to the Company’s stock incentive plan has been reduced proportionately. Any fraction of a share of common stock created as a result of the 2025 Second Reverse Stock Split was rounded up to the nearest whole share. The Company’s common stock continues to trade on the Nasdaq Capital Market under the symbol “FLYE.”
Current report
Unless otherwise noted, the share and per share information in this report reflects the two 2025 Reverse Stock Split.
Current report
Registered Direct Offering and Private Placement Offering
Current report
On June 2, 2025, we closed our registered direct offering of an aggregate of (i) 285,956 shares of our common stock, par value $0.01 and (ii) 571,912 warrants (the “Warrants”) to purchase 571,912 shares of common stock at a combined purchase price per share and accompanying Warrants of $24.28, resulting in net proceeds to us of $6.24 million after deducting placement agent fees and offering expenses. All of the shares (including shares underlying the Warrants) were registered under the Securities Act pursuant to a registration statement on Form S-1, as amended (File No. 333-286678), which was declared effective by the Securities and Exchange Commission on May 15, 2025. American Trust Investment Services, Inc. (“ATIS”) acted as the exclusive placement agent for the offering. We paid ATIS aggregate commissions of $219,430 and incurred offering expenses of $178,625.
Current report
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 year ended March 31, 2026, 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.
Current report
Disposal of Certain Subsidiaries
Current report
During the year ended March 31, 2026, 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. As part of this plan, as of March 31, 2026, the Company had sold an aggregate of 28 subsidiaries to third-party individuals in multiple transactions, for total cash consideration of approximately $2.9 million, of which approximately $0.1 million had been received. Between April 2025 and March 2026, the Company further sold 100% of its equity interests in 24 subsidiaries to third-party buyers for total cash consideration of approximately $2.3 million, with no contingent payments or adjustments. As of July 23, 2026, the Company had not received any remaining consideration under these transactions. (See Note - 15 — DISPOSAL OF SUBSIDIARIES in the accompanying consolidated financial statements for details).
Current report
Our retail sales revenue decreased by $14.8 million, or 68.1%, from $21.7 million for the year ended March 31, 2025 to $6.9 million for the year ended March 31, 2026. Our wholesale revenue increased by $8.0 million, or 227.5%, from $3.5 million for the year ended March 31, 2025 to $11.6 million for the year ended March 31, 2026. The decrease in retail sales revenue was primarily attributable to softened consumer demand for E-bicycles and E-scooters, partly driven by safety concerns stemming from lithium-ion battery-related incidents in New York during the period, which prompted some customers to reconsider their purchases and explore alternative transportation options. In addition, the decline was partly due to the closure and disposal of certain retail stores during the year ended March 31, 2026. The increase in wholesale revenue was mainly driven by continued purchases from entities that were disposed of during the same period, as these stores continued to source products from us following the disposals.
Current report
Gross profit for the years ended March 31, 2026 and 2025 was $4.7 million and $10.5 million, respectively. Gross margin was 24.4% and 41.1% for the years ended March 31, 2026 and 2025 respectively. The decrease in gross margin was primarily attributable to lower average selling prices of our EVs implemented to clear aged inventory and an increase in procurement costs driven by upstream price movements, as well as a shift in sales channel mix following the disposal of certain retail stores, which resulted in a higher proportion of wholesale sales and a lower proportion of retail sales — the latter of which typically generates higher margins. These negative factors were partially offset by increased rental services revenue with higher margins than our other businesses, though its contribution remained relatively small. As a result, gross margin decreased by 16.7 percentage points from 41.1% to 24.4% for the year ended March 31, 2026.
Current report
Total operating expenses were $11.1 million for the year ended March 31, 2026, a decrease of $3.9 million, or 26.1%, compared to $15.0 million for the years ended March 31, 2025. The decrease in operating expenses was attributable to the combined effect of (i) reductions in payroll expenses, rent expenses, meals and entertainment expenses, and insurance expenses as a result of the reduction in retail stores and the downsizing of our business operations, partially offset by (ii) increases in warehouse maintenance costs, impairment loss on equipment, and inventory clearance losses, as discussed below.
Current report
General and administrative expenses increased during the year ended March 31, 2026 compared to the prior year, primarily due to increases in inventory clearance losses, impairment loss on property and equipment, and repair and maintenance expenses, partially offset by decreases in payroll expenses, meals, entertainment and travel expenses, and insurance expenses. Inventory clearance losses increased to $1.9 million for the year ended March 31, 2026 from nil for the year ended March 31, 2025, primarily attributable to losses incurred from inventory clearance and count processes in connection with the closures and dispositions of retail stores; impairment loss on property and equipment increased to $0.6 million for the year ended March 31, 2026 from nil for the year ended March 31, 2025, primarily due to impairment charges recorded for assets that were idle or no longer expected to generate economic benefits. Payroll expenses decreased to $0.5 million for the year ended March 31, 2026 from $1.5 million for the year ended March 31, 2025, primarily due to headcount reductions in operations and accounting departments; meals, entertainment and travel expenses decreased to $0.3 million for the year ended March 31, 2026 from $0.5 million for the year ended March 31, 2025, primarily as a result of reduced business entertainment and travel activities following the workforce reduction; and insurance expenses decreased to $0.3 million for the year ended March 31, 2026 from $1.1 million for the year ended March 31, 2025, primarily due to lower general insurance coverage purchased for closed and disposed retail stores.
Current report
Other (Expenses)/ Income, net
Current report
Other expenses, net were $0.7 million for the year ended March 31, 2026, compared to other income, net of $10,588 for the year ended March 31, 2025. The change was primarily attributable to the net impact of losses and gains arising from the closure and disposition of retail stores during the year, with losses from store closures and asset disposals partially offset by gains on certain dispositions, resulting in a net expense.
Current report
Interest expenses, net
Current report
Interest expenses, net were $1.8 million for the year ended March 31, 2026, an increase of $1.4 million from $0.4 million for the year ended March 31, 2025. This increase was primarily attributable to interest expenses incurred on new borrowings from financial institutions to fund our business operations, as well as extension fees paid for certain loan renewals and the higher average annual interest rates following such renewals.
Current report
Net Loss
Current report
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 year ended March 31, 2026, the Company received net proceeds of $10,996,558 from the investors.
Current report
Net cash used in investing activities was $2.5 million for the year ended March 31, 2026, which was due to prepayment for software development of $1.8 million, advance to a related party of $0.2 million, and cash released from disposal of entities of $0.4 million.
Current report
Estimated Allowance for Inventory Obsolescence Reserve
Current report
Estimated Allowance for Expected Credit Losses
Current report
Our estimated allowance for expected credit losses is based on our assessment of collectability of accounts receivable. Adjustments are recorded to estimate expected credit losses over the contractual life of receivables under the current expected credit loss model, which is dependent upon factors such as aging schedule of receivables, migration rate of receivables, assessment of receivables due from specific identifiable counterparties that are considered at risk or uncollectible, current market conditions, as well as reasonable and supportable forecasts of future economic conditions. As of March 31, 2026 and 2025, we recorded allowance for expected credit losses of $217,479 and $116,746, respectively.
Current report
Not applicable to smaller reporting companies.
Current report
Item 4. Controls and Procedures.
Current report
Evaluation of Disclosure Controls and Procedures
Showing the first 40 of 48 passages. Open the source sections for the rest.
Removed paragraphs (11)
Previous report
See “Item 1. Business — Recent Developments.”
Previous report
Our retail sales revenue decreased by $4.7 million, or 17.7%, from $26.4 million for the year ended March 31, 2024 to $21.7 million for the year ended March 31, 2025. Our wholesale revenue decreased by $2.3 million, or 39.3%, from $5.8 million for the year ended March 31, 2024 to $3.5 million for the year ended March 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 year ended March 31, 2025. The decrease in wholesales revenue was driven primarily by the closure of stores by the top two customers who closed their stores in December 2023 due to lack of profitability.
Previous report
Gross Margin
Previous report
Gross profit for the years ended March 31, 2025 and 2024 was $10.5 million and $13.1 million, respectively. Gross margin was 41.1% and 40.7% for the year ended March 31, 2025 and 2024, respectively. The gross margin remained at the same level for the two periods.
Previous report
Total operating expenses were $15.0 million for the year ended March 31, 2025, an increase of $5.2 million, or 52.5%, compared to $9.8 million for the year ended March 31, 2024. The increase in operating expenses was attributable to the increase in our payroll expenses, rent, professional fees, product and software development expenses and settlement payments, as more fully discussed below.
Previous report
General and administrative expenses increased during the year ended March 31, 2025 compared to the previous year. Professional fees increased to $2.0 million for the year ended March 31, 2025, compared to $1.0 million for the year ended March 31, 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 increased to $1.5 million for the year ended March 31, 2025 from $1.1 million for the year ended March 31, 2024 primarily due to additional employees hired in operation and accounting departments. Insurance expenses increased to $1.1 million for the year ended March 31, 2025, compared to $0.2 million for the same period of prior year as a result of increased general insurance of the stores and the purchase of directors and officers liability insurance after initial public offering in the year ended March 31, 2025. Software development fee increased to $0.5 million for the year ended March 31, 2025, compared to $0.3 million for the same period in prior year due to the increasing development fee of Fly E-Bike app and the increasing maintenance fee of Go Fly App. There were settlement payments of $1.0 million for the year ended March 31, 2025, in connection with the UL Litigation.
Previous report
Net Income (Loss)
Previous report
On July 3, 2025, the Company implemented a 1-for-5 reverse stock split of its issued and outstanding shares of common stock. The reverse stock split reduced the number of shares of common stock issued and outstanding from 24,587,500 to 4,917,500 as of March 31, 2025. The par value per share remained unchanged at $0.01.
Previous report
Net cash used in investing activities was $3.2 million for the year ended March 31, 2024, which was due to purchase of software from a related party of $1.3 million, the purchase of equipment of $1.3 million, advance to related parties of $0.3 million, a prepayment for purchase of property of $0.5 million and the purchase of property rights of $0.03 million, offset by repayment from related parties of $0.1 million.
Previous report
Net cash used in financing activities was $0.05 million for the year ended March 31, 2024, which consisted of deferred IPO cost of $0.2 million, repayments of loan payables of $0.6 million, repayments to former related parties on other payables of $0.3 million and payments of former related party loan of $0.2 million, offset by borrowings from loan payable of $1.1 million and capital contributions from stockholders of $0.1 million.
Previous report
Estimated Allowance for Inventories
Reworded paragraphs (31)
Previous wording
We are an EV company that is principally engaged in designing, installing and selling E-motorcycles, E-bikes, E-scooters and related accessories under the brand “Fly E-Bike.” At Fly E-Bike, our commitment is to encourage people to incorporate eco-friendly transportation into their active lifestyles, ultimately contributing towards building a more environmentally friendly future.
Current wording
We are an EV company that is principally engaged in designing, installing, selling and renting E-motorcycles, E-bikes, E-scooters and related accessories under the brand “Fly E-Bike.” At Fly E-Bike, our commitment is to encourage people to incorporate eco-friendly transportation into their active lifestyles, ultimately contributing towards building a more environmentally friendly future.
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 July 15, 2025, we have 20 stores, including 19 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 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 July 23, 2026, we have 4 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 have a diversified product portfolio that is designed to satisfy the various demands of our customers and address different urban travel scenarios. Additionally, we aim to refresh our product offerings continuously to align with evolving market trends. As of July 15, 2025, we offered 27 E-motorcycle products, 36 E-bike products and 38 E-scooter products.
Current wording
We have a diversified product portfolio that is designed to satisfy the various demands of our customers and address different urban travel scenarios. Additionally, we aim to refresh our product offerings continuously to align with evolving market trends. As of July 23, 2026, we offered 27 E-motorcycle products, 37 E-bike products and 38 E-scooter products.
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, for the development of the 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 total contract price for the GO FLY APP is $500,000, and the GO FLY APP was delivered and launched in the rental business on September 5, 2024. The total contract price for the ERP system is $2,500,000. The ERP system is fully completed and delivered on May 20, 2025. During the fiscal year of 2025, the Company started to use part of the ERP system which was valued at $2,310,000 and treated that part as computer hardware and software and started for depreciation. As of March 31, 2025, the Company paid $136,580 to DFT as prepayment for software development.
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. For the year ended March 31, 2026, 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 year ended March 31, 2025, we produced 4,595 E-motorcycles, 5,974 E-bikes and 1,557 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 year ended March 31, 2026, we assembled 2,714 E-motorcycles, 6,722 E-bikes and 1,830 E-scooters at the same facility.
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 July 15, 2025, we have 20 stores, including 19 retail stores in the U.S and one retail store in Canada. 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 July 23, 2026, we currently operate 4 retail stores in the U.S. During the year ended March 31, 2026, 23 retail stores in the U.S. and 1 retail store in Canada were sold to streamline the Company’s corporate structure and reduce 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 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 year ended March 31, 2025, our net revenues decreased by 21.0% to $25.4 million, compared to $32.2 million for the same period in 2024, which was primarily driven by a decrease in total units sold, which dropped by 10,846 units, from 69,611 units for the year ended March 31, 2024, to 58,765 units for the year ended March 31, 2025. The decrease in volume 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 volume also attributed in part to the closures and disposition of our retail stores during the year ended March 31, 2025. The average sales price per EV increased by $29, from $960 in the year ended March 31, 2024 to $989 in the year ended March 31, 2025. These improvements were driven by product upgrades and enhanced sales channels in the market.
Current wording
For the year ended March 31, 2026, our net revenues decreased by 25.0% to $19.1 million, compared to $25.4 million for the same period in 2025, which was primarily driven by a decrease in total units sold and reductions in selling prices to reduce aged inventory for the year ended March 31, 2026.
Previous wording
We currently have a streamlined product portfolio consisting of three categories, with multiple models and specifications for each category. Our ability to increase the sales price and volume will depend on our ability to continually enhance our brand to attract customers, as well as our ability to successfully operate our retail stores and expand our sales network both domestically and globally. However, our product sales price is influenced by various factors such as market demand and competitors’ pricing, and although we continue working on product improvements and retail expansion, there can be no guarantee of sustained sales price increase or improved sales volume. If our prices remain stable, increasing sales volume would become important for continued revenue growth, and failure to do so would significantly impact our ability to grow revenue or improve our financial results.
Current wording
We currently have a streamlined product portfolio consisting of three categories, with multiple models and specifications for each category. Our ability to increase the sales price and volume will depend on our ability to continually enhance our brand to attract customers, as well as our ability to successfully operate our retail stores and expand our sales network globally. However, our product sales price is influenced by various factors such as market demand and competitors’ pricing, and although we continue working on product improvements and retail expansion, there can be no guarantee of sustained sales price increase or improved sales volume. If our prices remain stable, increasing sales volume would become important for continued revenue growth, and failure to do so would significantly impact our ability to grow revenue or improve our financial results.
Previous wording
Our payroll expenses were $4.7 million for the year ended March 31, 2025, compared to $2.9 million for the year ended March 31, 2024. As four stores were closed and four others were sold during the year ended March 31, 2025, and an additional six stores were sold subsequently, we expect a decrease in payroll expenses in the next fiscal year 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 $2.5 million for the year ended March 31, 2026, compared to $4.7 million for the year ended March 31, 2025. During the year ended March 31, 2026, the Company closed 8 stores and sold 24 stores, and 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 year ended March 31, 2025, we worked with two principal vendors, Xiamen Innolabs Technology Co., Ltd and Depcl Corp., each of which respectively supplied approximately 41.9% and 32.3% of the accessories and components used in all our products for the year ended March 31, 2025.
Current wording
During the year ended March 31, 2026, we worked with two principal vendors, Depcl Corp. and Xiamen Innolabs Technology Co., Ltd, each of which respectively supplied approximately 70.3% and 19.2% 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 June 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
We expect that our selling and marketing expenses will continue to increase in the foreseeable future, as we plan to further expand our sales network and retail channels, and engage in more selling and marketing activities to enhance our brand and attract more purchases from new and existing customers.
Current wording
We expect that our selling and marketing expenses will decrease in the foreseeable future, as more retail stores are expected to be sold with reduced selling and marketing activities.
Previous wording
General and administrative expenses primarily consist of costs for corporate functions, including payroll and related expenses, facilities and equipment expenses, such as depreciation and amortization expense and rent, and professional fees. We expect that our general and administrative will increase in the foreseeable future, as we hire additional personnel and incur additional expenses related to the anticipated growth of our business and our operation as a public company after the completion of our initial public offering.
Current wording
General and administrative expenses primarily consist of costs for corporate functions, including payroll and related expenses, facilities and equipment expenses, such as depreciation and amortization expense and rent, and professional fees. We expect that our general and administrative will decrease in the foreseeable future, as more retail stores are expected to be sold with reduced general and administrative activities.
Previous wording
Our net revenues were $25.4 million for the year ended March 31, 2025, a decrease of 21.0%, from $32.2 million for the year ended March 31, 2024. The decrease in our net revenues was primarily driven by a decrease in sales volume by 10,846 units, from 69,611 units for the year ended March 31, 2024, to 58,765 units for the year ended March 31, 2025.
Current wording
For the year ended March 31, 2026, our net revenues decreased by 25.0% to $19.1 million, compared to $25.4 million for the same period in 2025. The decrease in our net revenues was primarily driven by a decrease in sales volume of 16,664 units, from 58,765 units for the year ended March 31, 2025, to 42,101 units for the year ended March 31, 2026, and a decrease in selling prices in order to reduce aged inventory.
Previous wording
Cost of revenues decreased by 21.6%, from $19.1 million for the year ended March 31, 2024, to $15.0 million for the year ended March 31, 2025. The decrease in cost of revenues was primarily attributable to more favorable pricing obtained from our suppliers, particularly for batteries, as well as a reduction in sales volume, as discussed previously. These factors collectively contributed to the overall decrease in cost of revenues. The unit cost for battery decreased by 11%, from $112 in the year ended March 31, 2024, to $99 in the year ended March 31, 2025.
Current wording
Cost of revenues decreased by 3.8%, from $15.0 million for the year ended March 31, 2025, to $14.4 million for the year ended March 31, 2026. The decrease was primarily attributable to the reduction in sales volume resulting from the decrease in the number of retail stores during the year, as discussed above.
Previous wording
The following table shows our gross profit and gross margin for the years ended March 31, 2025 and 2024:
Current wording
Gross Margin The following table shows our gross profit and gross margin for the year ended March 31, 2025 and 2026:
Previous wording
Selling expenses primarily consist of payroll expenses, rent, and advertising expenses of retail stores. Total payroll expenses were $3.3 million for the year ended March 31, 2025, compared to $1.6 million for the year ended March 31, 2024. Rent was $2.9 million for the year ended March 31, 2025, compared to $2.4 million for the year ended March 31, 2024. Advertising expenses were $0.3 million for the year ended March 31, 2025, compared to $64,423 for the year ended March 31, 2024. The increase in payroll expenses was primarily due to the increased number of new employees hired for business operations in the first three quarters of the year ended March 31, 2025, despite a reduction in headcounts in the last quarter resulting from closures and dispositions of retail stores. The increase in rental expense was primarily due to the expansion of retail stores to support the Company’s business growth and operational needs. The rise in advertising expense was mainly driven by intensified marketing campaigns and promotional activities aimed at enhancing brand visibility. Total commission expenses were $9,980 for the year ended March 31, 2025, compared to $1.1 million for the year ended March 31, 2024. The decrease in the commission expenses was primarily due to the Company’s discontinuation of marketing referral expenses for promotions as of January 1, 2024.
Current wording
Selling expenses primarily consist of payroll expenses, rent, utilities, and advertising expenses of retail stores. For the year ended March 31, 2026, selling expenses decreased significantly compared to the prior year, primarily due to the closures and dispositions of retail stores during the year, which reduced the scale of our operations and resulted in lower associated expenses. Payroll expenses were $1.7 million for the year ended March 31, 2026, compared to $3.3 million for the year ended March 31, 2025. Rent expenses were $1.1 million for the year ended March 31, 2026, compared to $2.9 million for the year ended March 31, 2025. Utilities expenses were $0.1 million for the year ended March 31, 2026, compared to $0.2 million for the year ended March 31, 2025. Advertising expenses were $36,604 for the year ended March 31, 2026, compared to $0.3 million for the year ended March 31, 2025.
Previous wording
Income taxes provision was $0.3 million for the year ended March 31, 2025, a change from $1.2 million income tax provision for the year ended March 31, 2024. This change was due to our pre-tax loss for the year ended March 31, 2025.
Current wording
Income tax provision was $0.33 million for the year ended March 31, 2026, a change from $0.34 million income tax provision for the year ended March 31, 2025. This change was primarily due to our pre-tax loss for the year ended March 31, 2026.
Previous wording
Net loss was $5.3 million for the year ended March 31, 2025, a change of $7.2 million, or 379.2%, from net income of $1.9 million for the year ended March 31, 2024, which was mainly attributable to the reasons discussed above.
Current wording
Net loss was $9.3 million for the year ended March 31, 2026, an increase of $4.0 million, or 75.0%, from net loss of $5.3 million for the year ended March 31, 2025, which was mainly attributable to the reasons discussed above.
Previous wording
Before interest expenses, income tax, depreciation, and amortization, for the year ended March 31, 2025, our net loss was $3.9 million, a change of $7.4 million, compared to net income of $3.5 million for the year ended March 31, 2024, which was mainly attributable to the decrease in revenue, increase in selling expenses and general and administrative expenses described above. The ratio of EBITDA to revenue was negative 15.2% and 10.9% for the year ended March 31, 2025 and 2024, respectively.
Current wording
Before interest expenses, income tax, depreciation, and amortization, for the year ended March 31, 2026, our net loss was approximately $6.3 million, an increase of approximately $2.4 million, compared to net loss of $3.9 million for the year ended March 31, 2025, 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 33.0% and negative 15.2% for the years ended March 31, 2026 and 2025, respectively.
Previous wording
As of March 31, 2025, we had cash of $0.8 million. We had working capital of $1.3 million and $0.3 million as of March 31, 2025 and 2024, respectively. We had net loss of $5.3 million and net income of $1.9 million for the year ended March 31, 2025 and 2024, respectively. During the year ended March 31, 2025, net cash used in operating activities of the Company was approximately $10.1 million. As of March 31, 2025, the Company had a current portion of contractual obligation of approximately $8.9 million.
Current wording
As of March 31, 2026, we had cash of $0.3 million. We had working capital of $10.0 million and $1.3 million as of March 31, 2026 and 2025, respectively. We had net loss of $9.3 million and $5.3 million for the years ended March 31, 2026 and 2025, respectively. During the year ended March 31, 2026, net cash used in operating activities of the Company was approximately $13.8 million. As of March 31, 2026, 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 June 7, 2024, we sold 450,000 shares of common stock, at a price of $20.00 per share in our IPO. The gross proceeds of the IPO were $9.0 million, prior to deducting the underwriting discounts, commissions and offering expenses payable by us. Net proceeds received by us from IPO were approximately $7.9 million. On June 25, 2024, we sold an additional 67,500 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 and received net proceeds of $1.2 million. On June 4, 2025, Company issued 5,719,111 shares of common stock, at a price of $1.2140 per share in its secondary public offering for gross proceeds of the offering were $6.9 million, prior to deducting the placement agent’s fees and offering expenses payable by the Company.
Current wording
On June 4, 2025, the Company issued 285,956 shares of common stock, at a price of $24.28 per share in its follow-on public offering for gross proceeds of $6.9 million, prior to deducting the placement agent’s fees and offering expenses payable by the Company.
Previous wording
As of March 31, 2025, the Company had working capital of approximately $1.3 million and cash of approximately $0.8 million. The main cash outflow for the year ended March 31, 2025 was from net loss of $5.3 million, a decrease in tax payable of $1.5 million, an increase in inventories of $2.5 million, a decrease in operating lease liabilities of $4.9 million, purchase of software from a related party of $0.9 million, purchase of equipment of $1.6 million and an increase in prepayments and other receivables of $2.5 million. As of March 31, 2025, the Company had a current portion of contractual obligation of approximately $8.9 million. 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 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 March 31, 2026, the Company had working capital of approximately $10.0 million and cash of approximately $0.3 million. The main cash outflow for the year ended March 31, 2026 was from net loss of $9.3 million, a decrease in accounts payable of $0.8 million, an increase in accounts receivable of $6.8 million, a decrease in inventory of $1.9 million, and a decrease in prepayments and other receivables of $0.9 million. The Company became default of repayment for loan with Peapack-Gladstone Bank since August 31, 2025. During the year ended March 31, 2026, the Company paid $1,000,000, $669,725 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. The Company entered into a forbearance and modification agreement with the bank on May 28, 2026, extending the repayment deadline to June 30, 2026, at an interest rate of 12.875%, and the agreement requires the Company to pay $123,877 in interest and a $4,000 forbearance fee in respect of the loan. As of July 23, 2026, the Company is in ongoing negotiations with the bank for a renewal. 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 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…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Our accounts receivable represent primarily accounts receivable from distributors that purchased our EVs and other products. As of March 31, 2025 and 2024, our accounts receivable, net of allowance for credit losses, was $0.5 million and $0.5 million, respectively. Our accounts receivable turnover period increased from 69 days in the year ended March 31, 2024 to 71 days in the year ended March 31, 2025, which was mainly attributable to the longer payment terms to dealers.
Current wording
Our accounts receivable represent primarily accounts receivable from distributors that purchased our EVs and other products. As of March 31, 2026 and 2025, our accounts receivable, net of allowance for credit losses, was $7.0 million and $0.5 million, respectively. Our accounts receivable turnover period increased from 71 days in the year ended March 31, 2025 to 72 days in the year ended March 31, 2026 which was mainly attributable to the relaxation of credit policies to customers.
Previous wording
Our accounts payable represent primarily accounts payable to suppliers from whom we purchased accessories and components for our products. As of March 31, 2025 and 2024, our accounts payable were $1.3 million and $1.2 million, respectively. Our accounts payable turnover period increased to 33 days for the year ended March 31, 2025 from 25 days for the year ended March 31, 2024, which was primarily the result of longer payment cycles.
Current wording
Our accounts payable represent primarily accounts payable to suppliers from whom we purchased accessories and components for our products. As of March 31, 2026 and 2025, our accounts payable were $0.4 million and $1.3 million, respectively. Our accounts payable turnover period decreased to 29 days for the year ended March 31, 2026 from 33 days for the year ended March 31, 2025, which was primarily due to the Company’s accelerated payments to certain suppliers. The company pay invoices more promptly to ensure continued favorable terms and reliable service.
Previous wording
Our prepayments and other receivables primarily represent prepayments to vendors and other service providers. These prepayments and receivables increased by $3.1 million, from $0.6 million as of March 31, 2024, to $3.7 million as of March 31, 2025. This significant increase is mainly due to the launch of Company’s E-bike rental services, which required additional inventory. As a result, during the year ended March 31, 2025, the Company made substantial prepayments to vendors to secure inventory for the new services.
Current wording
Our prepayments and other receivables primarily represent prepayments to vendors and other service providers. These prepayments and receivables increased by $3.3 million, from $3.7 million as of March 31, 2025, to $7.0 million as of March 31, 2026. This significant increase is mainly due to receivables arising from the disposal of certain subsidiaries.
Previous wording
Our inventories primarily include our EVs, their accessories and spare parts. As of March 31, 2025 and 2024, our inventories, net of allowance, were $6.4 million and $5.4 million, respectively. The increase in inventories was primarily due to our preparation for the new rental business. Our inventory turnover days increased to 143 days in the year ended March 31, 2025, from 89 days in the year ended March 31, 2024, which was primarily due to strategic inventory buildup, allowing us to start new services.
Current wording
Our inventories primarily include our EVs, their accessories and spare parts. As of March 31, 2026 and 2025, our inventories, net of allowance, were $2.3 million and $6.4 million, respectively. The decrease in inventories was primarily due to those inventories held by stores classified as assets held for sale. Our inventory turnover days decreased to 111 days in the year ended March 31, 2026, from 143 days in the year ended March 31, 2025, which was primarily due to optimized inventory management and enhanced operational efficiency.
Previous wording
As of March 31, 2025 and 2024, the total outstanding amount of loan principal was $7.4 million and $1.6 million, respectively. For the year ended March 31, 2025 and 2024, the interest expenses on our outstanding loans amounted to $405,615 and $152,050, respectively. See Note 8 to the Consolidated Financial Statements included within this annual report for further information on details of our outstanding loans.
Current wording
As of March 31, 2026 and 2025, the total outstanding amount of loan principal was $6.0 million and $7.4 million, respectively. For the years ended March 31, 2026 and 2025, the interest expenses on our loans amounted to $1.8 million and $0.4 million, respectively. See Note 9 to the Consolidated Financial Statements included within this report for further information on details of our outstanding loans.
Previous wording
Net cash provided by operating activities for the year ended March 31, 2024 was $4.3 million, which was mainly comprised of net income of $1.9 million, amortization of right-of-use assets of $2.3 million and inventories reserve of $0.5 million, an increase in account payable of $2.5 million, an increase in tax payable of $0.6 million, and an increase of accrued expenses and other payables of $0.3 million, offset by an increase in inventories of $2.0 million, and a decrease in operating lease liabilities of $1.9 million.
Current wording
Net cash used in operating activities for the year ended March 31, 2026 was $13.8 million, which was due to net loss of $9.3 million, amortization of right-of-use assets of $1.9 million, impairment loss on property, and equipment of 0.6 million, depreciation expense of 0.7 million, amortization expense of 0.1 million, inventory reserve of 0.5 million, a decrease in inventories of $1.9 million, a decrease in prepayments and other receivables of $0.6 million, a decrease in accounts payable of $0.8 million, a decrease in accrued expenses and other payables of $0.5 million, and a decrease in operating lease liabilities of $1.7 million, partially offset by gain on disposal of subsidiaries of $1.6 million, an increase in accounts receivable of $6.8 million, and an increase in taxes payable of $0.1 million.
Previous wording
Our exposure to interest rate risk primarily relates to the interest expenses on our short-term and long-term bank borrowings. Our short-term and long-term bank borrowings bear interests at fixed rates. We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in market interest rates. However, our future interest expenses may exceed expectations due to changes in market interest rates. If we were to renew these short-term and long-term bank borrowings, we might be subject to interest rate risk.
Current wording
Our exposure to interest rate risk primarily relates to the interest expenses on our short-term and long-term loan payables. Our short-term and long-term loan payables bear interest at fixed rates. We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in market interest rates. However, our future interest expenses may exceed expectations due to changes in market interest rates. If we were to renew these short-term and long-term loan payables, we might be subject to interest rate risk.
Previous wording
Our estimated allowance for the inventory obsolescence reserves is based on our assessment of realization of inventory. Adjustments are recorded to write down the cost of inventories to the estimated net realizable value due to slow-moving merchandise and obsolescence, which is dependent upon factors such as inventory aging, historical and forecasted consumer demand, and market conditions that impact pricing. As of March 31, 2025 and 2024, we recorded inventory allowance balance of $1,107,569 and $514,021, respectively.
Current wording
Our estimated allowance for the inventory obsolescence reserves is based on our assessment of realization of inventory. Adjustments are recorded to write down the cost of inventories to the estimated net realizable value due to slow-moving merchandise and obsolescence, which is dependent upon factors such as inventory aging, historical and forecasted consumer demand, and market conditions that impact pricing. As of March 31, 2026 and 2025, we recorded inventory reserves balance of $859,193 and $1,107,569, respectively.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Net cash provided by financing activities was $15.7 million for the year ended March 31, 2026, which consisted of net proceeds from our follow-on public offering and private placement offering of $17.4 million, and loan proceeds of $2.0 million, partially offset by repayments of loans of $3.1 million and payment of public offering costs of $0.5 million.
Current report — wording carried from elsewhere
Item 3. Quantitative and Qualitative Disclosures About Market Risk.