Fly-E Group, Inc.

Current report

Our financial condition has been adversely affected by recent developments, and we face risks related to our credit facility, pending litigation, and ability to continue as a going concern.

Current report

As of June 30, 2026, we had cash of approximately $60,281 and working capital of approximately $8.1 million. We incurred a net loss of approximately $3.9 million for the three months ended June 30, 2026.

Current report

We are seeking to resolve a payment default under our $5 million credit facility with Peapack-Gladstone Bank that arose in August 2025. We entered into forbearance agreements with the lender in November 2025 and May 2026, with the most recent forbearance period having expired on June 30, 2026. As of the date of this Report, we are in ongoing negotiations with the lender regarding a renewal or further extension; however, there can be no assurance that such negotiations will be successful. The credit facility is secured by substantially all of our assets, and the lender has reserved its rights to pursue remedies, including acceleration and foreclosure, which could have a material adverse effect on our business, financial condition, and results of operations.

Current report

We are subject to a federal securities class action, consolidated shareholder derivative litigation, and an SEC investigation. The defense of these matters will require management attention and resources, and an adverse outcome in any of these matters could have a material adverse effect on our business, financial condition, results of operations, and reputation.

Current report

We have restructured our retail operations, reducing from 36 stores to 4 stores since mid-2024. Our net revenues decreased by 48.4% for the three months ended June 30, 2026 compared to the prior year period, and our retail revenue decreased by 84.3%. Our reduced scale may affect our ability to negotiate favorable terms with suppliers, attract and retain customers, and compete effectively.

Current report

We have identified material weaknesses in our internal control over financial reporting, including insufficient accounting personnel with GAAP and SEC reporting knowledge, lack of formal internal control policies, and insufficient IT general controls. Until remediated, there is a possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis, which could result in restatements, loss of investor confidence, or regulatory scrutiny.

Current report

We have received a deficiency notice from Nasdaq relating to our failure to timely file periodic reports, and our failure to maintain compliance with Nasdaq listing requirements could result in delisting of our common stock.

Current report

On September 1, 2026, we received a letter from Nasdaq notifying us that we were not in compliance with Nasdaq Listing Rule 5250(c)(1), which requires timely filing of periodic reports with the SEC, due to our failure to timely file this Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. We filed the Form 10-Q on September 1, 2026, which we believe cured the deficiency. Although we believe we have regained compliance, there can be no assurance that we will maintain compliance with all applicable Nasdaq continued listing requirements in the future. If we fail to meet any of the continued listing requirements, Nasdaq could initiate delisting procedures, which could result in our common stock being delisted from the Nasdaq Capital Market. Delisting could adversely affect the liquidity and market price of our common stock, our ability to raise capital, and investor confidence in our Company.

Current report

On August 5, 2024, the Company obtained a $5,000,000 line of credit from Peapack-Gladstone Bank (the “Lender”). The Company defaulted on its repayment obligations under this credit facility beginning in August 2025. On November 7, 2025, the Company entered into a forbearance and modification agreement with the Lender extending the repayment deadline to March 31, 2026, at an interest rate of 12.875%. Subsequent to the execution of the forbearance agreement, the Company received written notices from the Lender asserting defaults and reserving the Lender’s rights to pursue remedies under the applicable loan documents. On May 28, 2026, the Company entered into a second forbearance and modification agreement with the Lender extending the repayment deadline to June 30, 2026, at an interest rate of 12.875%, subject to payment of $123,877 in interest and a $4,000 forbearance fee. As of September 1, 2026, the date of this Report, the June 30, 2026 repayment deadline has passed and the Company is in ongoing negotiations with the Lender regarding a renewal or further extension of the credit facility. The outstanding principal balance under the credit facility was approximately $3,910,018 as of June 30, 2026. The credit facility is secured by substantially all of the Company’s assets. See Note 9 to the Consolidated Financial Statements included in this Report for additional information.

Previous report

An adverse determination in any significant product liability claim against us could materially adversely affect our business, results of operations or financial condition.

Previous report

The development, production, marketing, sale and usage of our vehicles will expose us to significant risks associated with product liability claims. As a provider of consumer products, we are, from time to time, subject to civil litigation regarding those products, including in publicly-available court filings. Our business is vulnerable to product liability claims, and we may face inherent risk of exposure to claims in the event our vehicles do not perform or are claimed to not have performed as expected. If our products are defective, malfunction or are used incorrectly by our customers, it may result in bodily injury, property damage or other injury, including death, which could give rise to product liability claims against us. For example, our certain EVs use lithium-ion batteries, which, if not appropriately managed and controlled, can rapidly release energy by venting smoke and flames that can ignite nearby materials. Any potential issues with the lithium-ion batteries used in our EVs could have a material adverse effect on our business, financial condition, and results of operations, including a significant negative impact on our revenue. Furthermore, there is some risk of electrocution if individuals who attempt to repair battery packs do not follow applicable maintenance and repair protocols. Any such damage or injury would likely lead to product liability claims against us and potentially a safety recall. Any losses that we may suffer from any liability claims and the effect that any product liability litigation may have upon the brand image, reputation and marketability of our products could have a material adverse impact on our business, results of operations or financial condition. No assurance can be given that material product liability claims will not be made in the future against us, or that claims will not arise in the future in excess or outside of our insurance coverage and contractual indemnities with suppliers and manufacturers. We may not be able to obtain adequate product liability insurance for our existing or new products or the cost of doing so may be prohibitive. Adverse determinations of material product liability claims made against us could also harm our reputation and cause us to lose customers and could have a material adverse effect on our business, prospects, financial condition and operating results.

Previous report

We are subject to a pending securities class action lawsuit, and we may become subject to additional legal proceedings that could adversely affect our business, financial condition, and results of operations.

Previous 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, Zhou Ou, and former chief financial officer, Shiwen Feng (the “Class Action”). 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”).

Previous report

Securities Class Action and the Flynn Action may result in substantial costs and divert our management’s attention and resources, which could harm our business. Any adverse determination in the Lawsuit or similar litigation could require us to pay significant monetary damages and could harm our reputation. We cannot predict the outcome of the legal proceedings or estimate the range of potential loss, if any, that could result from an adverse judgment. We may also become subject to additional litigation or legal proceedings in the future, including stockholder derivative suits or additional securities class actions. Such litigation could be time-consuming and expensive to defend, and could result in the diversion of time and attention by our management and in substantial damages, settlement costs, or judgments against us. Our insurance may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation. The occurrence of any of these events could have a material adverse effect on our business, financial condition, results of operations, and the trading price of our common stock.

Previous report

None.