Fly-E Group, Inc.

Except as set forth below, there have been no material changes to our Risk Factors as disclosed in our Annual Report on Form 10-K for the year ended March 31, 2026 as filed with the SEC on July 23, 2026.

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.

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.

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.

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.

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.

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.

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.

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.