Financial Performance - Fly-E Group, Inc. reported net revenues of $25.4 million for fiscal year 2025, a decrease of 21.0% from $32.2 million in fiscal year 2024, primarily due to a reduction in sales volume by 10,846 units [4][5] - Retail sales revenue was $21.7 million, down 17.7% from $26.4 million in fiscal year 2024, while wholesale revenue decreased by 39.3% to $3.5 million [5] - The company experienced a net loss of $5.3 million in fiscal year 2025, compared to a net income of $1.9 million in fiscal year 2024, with basic and diluted losses per share of $1.10 [8][12][11] Cost and Profitability - Cost of revenues decreased to $15.0 million, down 21.6% from $19.1 million in fiscal year 2024, attributed to favorable pricing from suppliers and reduced sales volume [6] - Gross profit was $10.5 million, a decrease of 20.3% from $13.1 million in fiscal year 2024, with a gross margin of 41.1%, slightly up from 40.7% in the previous year [9][8] Operating Expenses - Operating expenses increased by 52.5% to $15.0 million, driven by higher payroll, rent, professional fees, and product development costs [10] - Selling expenses rose to $7.4 million, while general and administrative expenses increased to $7.6 million, reflecting the company's expansion efforts and increased operational costs [15] Cash Flow and Financial Condition - As of March 31, 2025, the company had cash of $0.8 million, down from $1.4 million a year earlier, with net cash used in operating activities amounting to $10.1 million [14] - Net cash provided by financing activities was $12.5 million, compared to a slight outflow of $0.05 million in fiscal year 2024, indicating improved capital raising efforts [16] Strategic Outlook - The company aims to enhance product safety, expand geographic reach, and invest in digital platforms to improve customer experience, following a successful public offering in June 2025 [3] - Fly-E has diversified its product portfolio to over 100 models and is expanding its rental services, which are currently operational in major cities like New York, Toronto, and Los Angeles [3]

[Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This note clarifies that forward-looking statements are subject to risks, and actual results may differ materially [Forward-Looking Statements Disclaimer](index=4&type=section&id=Forward-Looking%20Statements%20Disclaimer) This disclaimer details forward-looking statements, their risks, and the company's limited obligation to update them - Forward-looking statements are identified by terms like "believes," "estimates," "anticipates," "expects," "intends," "plans," "may," "will," "potential," "projects," "predicts," "continue," or "should"[14](index=14&type=chunk) - Actual results may differ materially from expectations due to various factors, including funding, production quality and volume, vendor reliability, intellectual property protection, product performance, market adoption of EVs, regulatory changes, and tariffs[15](index=15&type=chunk)[16](index=16&type=chunk) - The company undertakes no obligation to update or revise any forward-looking statements, except as required under applicable securities laws[15](index=15&type=chunk) [Part I](index=5&type=section&id=Part%20I) This part covers the company's business, risk factors, properties, legal proceedings, and cybersecurity posture [Item 1. Business](index=5&type=section&id=Item%201.%20Business) Fly-E Group specializes in E-motorcycles, E-bikes, and E-scooters, operating retail stores and an online platform - Fly-E Group, Inc. is an EV company focused on E-motorcycles, E-bikes, E-scooters, and accessories under the 'Fly E-Bike' brand, promoting eco-friendly transportation[18](index=18&type=chunk) - The company operates 20 stores (19 U.S., 1 Canada) and an online store, with rental services in New York, Toronto, and Los Angeles, and plans to expand into South America and Europe[19](index=19&type=chunk) Net Revenues by Segment (FY2024 vs. FY2025) | Revenue Type | FY2025 (approx.) | FY2024 (approx.) | Change (approx.) | Percentage Change | | :---------------- | :--------------- | :--------------- | :--------------- | :---------------- | | Retail Sales | $21.7 million | $26.4 million | -$4.7 million | -17.8% | | Wholesale Revenue | $3.5 million | $5.8 million | -$2.3 million | -39.7% | | Rental Services | $171,867 | $0 | +$171,867 | N/A | | **Total Net Revenues** | **$25.4 million** | **$32.2 million** | **-$6.8 million** | **-21.1%** | [Overview](index=5&type=section&id=Overview) This section provides a general introduction to Fly-E Group's business, products, and market position - Fly-E Group, Inc. designs, installs, and sells smart E-motorcycles, E-bikes, E-scooters, and related accessories under the 'Fly E-Bike' brand[18](index=18&type=chunk) - The company started in 2018 in New York and is a leading provider of E-bikes for food delivery workers in New York City[19](index=19&type=chunk) - As of July 15, 2025, Fly-E Group operates 20 stores (19 U.S., 1 Canada), an online store, and offers rental services in New York, Toronto, and Los Angeles[19](index=19&type=chunk) - The product portfolio includes 27 E-motorcycle, 36 E-bike, and 38 E-scooter products, with a focus on advanced technologies and user-centric design, including features for food delivery workers[20](index=20&type=chunk)[21](index=21&type=chunk) [Recent Developments](index=5&type=section&id=Recent%20Developments) This section outlines key corporate actions and business initiatives undertaken by the company recently - In April 2024, the company effected a 1-for-110,000 stock split, increasing authorized shares[23](index=23&type=chunk) - The company consummated its IPO on June 7, 2024, selling 450,000 shares at **$20.00/share**, raising **$9.0 million gross**, with an additional **$1.4 million** from over-allotment exercise[24](index=24&type=chunk) - A **$5 million** revolving credit facility was secured with Peapack-Gladstone Bank on August 5, 2024, for operating needs and acquisitions, bearing interest at term SOFR plus 3.50% (min 5.50%)[25](index=25&type=chunk) - A rental program for UL-certified e-bikes was launched in October 2024 in New York City, Toronto, and Los Angeles, with plans to expand to Miami[27](index=27&type=chunk) - The Fly-11 PRO model was chosen for the NYC DOT's **$2 million** trade-in program for food delivery workers, participating from January to June 2025[28](index=28&type=chunk) - Authorized common stock shares were increased from 100,000,000 to 300,000,000 in March 2025[29](index=29&type=chunk) - A UL litigation regarding improper trademark use was settled in May 2025 for **$1,000,000**, with **$350,000** paid by July 15, 2025[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - A 1-for-5 reverse stock split became effective on July 3, 2025, with trading on a split-adjusted basis starting July 7, 2025[35](index=35&type=chunk) - A registered direct offering closed on June 2, 2025, raising **$6.24 million net proceeds** from selling 5,719,111 common shares and 11,438,222 warrants[38](index=38&type=chunk) - The company disposed of 15 subsidiaries between December 2024 and July 2025 for approximately **$1.3 million cash consideration** to streamline its structure[39](index=39&type=chunk) [Our History and Corporate Structure](index=8&type=section&id=Our%20History%20and%20Corporate%20Structure) This section details the company's formation, evolution, and current organizational structure - The business began in 2018 as Ctate Inc., with each retail store managed by a separate wholly-owned company[40](index=40&type=chunk) - Ctate merged into Fly E-Bike, Inc. in September 2022, with Fly E-Bike as the surviving entity[41](index=41&type=chunk) - Fly-E Group, Inc. was incorporated in November 2022 and acquired Fly E-Bike via a Share Exchange in December 2022, making Fly E-Bike a wholly-owned subsidiary[43](index=43&type=chunk) - Fly-E Group primarily conducts business through Fly E-Bike and its subsidiaries, with Fly-E Group itself having no substantive operations other than holding shares[43](index=43&type=chunk) [Our Industry](index=10&type=section&id=Our%20Industry) This section describes the growth drivers and market dynamics of the electric vehicle industry - The EV industry, including E-motorcycles, E-bikes, and E-scooters, is experiencing significant growth driven by technology advancements, demand for eco-friendly transportation, and government incentives[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) - The Asia-Pacific region is the largest market, but North America is expected to see significant growth due to government initiatives[47](index=47&type=chunk) - The rise in small package deliveries in major cities like New York City, accelerated by e-commerce and the COVID-19 pandemic, further boosts demand for E-bikes as an efficient and environmentally friendly option[49](index=49&type=chunk)[50](index=50&type=chunk) [Our Strengths](index=11&type=section&id=Our%20Strengths) This section highlights the company's competitive advantages, including early market entry and brand reputation - Early entry into the EV market in 2018 allowed the company to capitalize on e-commerce growth and increased demand during the COVID-19 pandemic[51](index=51&type=chunk) - Strong brand reputation for high-quality products and excellent customer service, particularly among food delivery workers in New York City, has built a loyal customer base[52](index=52&type=chunk) - Continuous innovation with over **67 new products** and upgrades since 2018, plus development of the 'Fly E-Bike app' and 'Fly E-Bike Care' extended warranty program[53](index=53&type=chunk) [Our Strategies](index=11&type=section&id=Our%20Strategies) This section outlines the company's plans for market leadership, brand enhancement, and sales network expansion - Enhance position as a leader in urban mobility, especially for food and package delivery workers, through brand enhancement, innovation, and sales network expansion[54](index=54&type=chunk) - Improve brand recognition by providing exceptional customer service, upgrading retail stores, opening flagship stores, increasing accessory offerings, and collaborating with lifestyle brands[55](index=55&type=chunk) - Continue innovation in product design, user experience, and performance, including developing the 'Fly E-Bike app' and launching 'Fly E-Bike Care' for extended maintenance services[56](index=56&type=chunk) - Expand sales network internationally into growth markets like South America and Europe, and domestically through a second online store for gas bikes[57](index=57&type=chunk) - Diversify service offerings by leveraging retail stores as logistics hubs for small package delivery, seeking partners, assembling a delivery team, and developing a delivery app[58](index=58&type=chunk) [Our Products](index=11&type=section&id=Our%20Products) This section details the diverse portfolio of E-motorcycles, E-bikes, E-scooters, and accessories offered - The company offers a diverse product portfolio including **27 E-motorcycle products** (E-moped, E-motorcycle, E-tricycle), **36 E-bike products** (City E-bike, foldable E-bike, standard E-bike), and **38 E-scooter products**[20](index=20&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk)[71](index=71&type=chunk)[81](index=81&type=chunk) - E-mopeds offer ranges of **20-70 miles**, top speeds of **20-38 mph**, and payloads of **185-400 lbs**, with features like remote key fobs, alarm systems, and easy operation[63](index=63&type=chunk)[64](index=64&type=chunk) - E-motorcycles are designed for urban commuting, with ranges of **25-80 miles**, top speeds of **30-59 mph**, and advanced safety features like anti-lock brakes[67](index=67&type=chunk) - E-tricycles (Fly-Tricycle) are three-wheel vehicles with three seats, a range of **43-62 miles**, a top speed of **30 mph**, and a payload capacity of **1,239 lbs**[70](index=70&type=chunk) - Foldable E-bikes (e.g., Dolphin E-Bike, Air-2) offer **20-25 miles range**, **23 mph top speed**, and **250 lbs payload**, ideal for space-conscious urban dwellers[75](index=75&type=chunk) - E-scooters provide **15-45 miles range**, **15-40 mph top speed**, and **250-330 lbs weight capacity**, equipped with hydraulic disc brakes and electronic braking systems[83](index=83&type=chunk) - The company also sells Fly E-Bike branded accessories (riding gear, storage, smartphone holders, apparel) and performance upgrades (wheels, shock absorbers, carbon fiber panels), along with traditional bikes[84](index=84&type=chunk)[85](index=85&type=chunk) [Fly E-Bike App](index=16&type=section&id=Fly%20E-Bike%20App) This section describes the ongoing development of a mobile application for EV management and intelligent riding - The company is developing the 'Fly E-Bike app' as a mobile management service for EVs, aiming to provide a comprehensive intelligent riding experience[89](index=89&type=chunk) - Expected functions include GPS, navigation, battery and tire pressure management, online shopping, and anti-theft features[89](index=89&type=chunk) - A testing version of the app has been launched but is not yet available to customers[89](index=89&type=chunk) [After Sales Services](index=16&type=section&id=After%20Sales%20Services) This section covers the repair, maintenance, warranty, and planned extended care programs for EVs - EVs are primarily serviced through retail stores, offering repair, maintenance (exterior, mechanical, motor, electrification, battery, tire pressure, cleaning), and bodywork services[90](index=90&type=chunk) - Value-added services include GPS add-on/installation and theft reporting[90](index=90&type=chunk) - A three-month limited manufacturer's warranty covers factory defects and minor cosmetic damages for E-bikes, E-motorcycles, and E-scooters[91](index=91&type=chunk) - A separate three-month battery warranty covers manufacturer defects, with free replacement if faulty[92](index=92&type=chunk) - The 'Fly E-Bike Care' program is planned for future launch, offering insurance-like coverage and continuous maintenance beyond standard warranties, including accidental damages[93](index=93&type=chunk) [Manufacturing and Assembly](index=17&type=section&id=Manufacturing%20and%20Assembly) This section details the sourcing of components, assembly process, and production volumes for EVs - Substantially all vehicle components are sourced from China (over **50%** in FY2025 and FY2024) and the United States (over **40%** in FY2025 and FY2024)[94](index=94&type=chunk) - A centralized vendor management system streamlines purchasing, enhances negotiating power, and manages supply chain risks by ensuring each critical component has at least three vendors[95](index=95&type=chunk)[97](index=97&type=chunk) - Key vendors in FY2025 were Xiamen Innolabs Technology Co., Ltd. (XFT) at **42%** and Depcl Corp. at **32%** of accessories and components[96](index=96&type=chunk) - Vehicles are assembled in a leased facility in Maspeth, New York[98](index=98&type=chunk) Vehicle Production (FY2024 vs. FY2025) | Product Category | FY2025 | FY2024 | | :--------------- | :----- | :----- | | E-motorcycles | 4,595 | 8,390 | | E-bikes | 5,974 | 7,638 | | E-scooters | 1,557 | 3,171 | [Quality Control](index=17&type=section&id=Quality%20Control) This section describes the stringent quality assurance processes for components and finished electric vehicles - Stringent quality control systems are implemented, with XFT (a principal vendor) monitoring factories for China-sourced parts[99](index=99&type=chunk) - Quality control procedures include factory checks (size, capacity, certifications, equipment, QA processes), proofing with 'golden samples,' and first article inspections during mass production[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) - XFT conducts random inspections after mass production, and similar procedures are followed by U.S. principal vendors and the internal quality control team for U.S.-sourced parts[102](index=102&type=chunk)[103](index=103&type=chunk) - The company has not experienced any significant product recalls, refunds, or quality control outbreaks since operations began[104](index=104&type=chunk) [Sales and Marketing](index=18&type=section&id=Sales%20and%20Marketing) This section outlines the omnichannel retail model and brand promotion strategies for electric vehicles - An omnichannel retail model includes 20 retail stores, 85 distributors in the U.S., and an online store (flyebike.com), with the upcoming Fly E-Bike app also serving as a marketing venue[105](index=105&type=chunk) - Marketing focuses on promoting the brand as a lifestyle brand for high-quality smart EVs through digital (social media: Facebook, Instagram, TikTok, Xiaohongshu, WeChat) and experiential activities[106](index=106&type=chunk)[107](index=107&type=chunk) - Offline marketing includes in-store promotions, targeted advertising (local newspapers, magazines, flyers), and leveraging visibility among food delivery workers in New York City[108](index=108&type=chunk) [Our Distribution Channels](index=18&type=section&id=Our%20Distribution%20Channels) This section details the company's retail stores, distributors, and online platforms for product sales - Retail distribution network includes 20 stores (9 in New York, 4 in New Jersey, 2 in Florida, 1 each in Maryland, Massachusetts, California, Washington D.C., and 1 in Canada)[110](index=110&type=chunk) - Distributors, mostly in the U.S., purchase products wholesale and handle logistics, warehousing, and distribution, with most making upfront payments[111](index=111&type=chunk) - International expansion includes one distributor in the Dominican Republic[112](index=112&type=chunk) - Online distribution is via flyebike.com, with plans for a second online store for gas bikes[113](index=113&type=chunk) - An online-to-offline model allows customers to order online and pick up products at retail stores, integrating networks for a cohesive experience[114](index=114&type=chunk) [Our Customers](index=19&type=section&id=Our%20Customers) This section describes the customer base, primarily food delivery workers, and acquisition strategies - Customers are acquired through referrals, distributors, and marketing activities, with significant growth opportunities expected due to strong brand image and evolving product portfolio[115](index=115&type=chunk) - The majority of customers (**72%** in FY2025, **70%** in FY2024) are food delivery workers in New York City[115](index=115&type=chunk) - No single customer accounted for more than **10%** of revenues in FY2025 or FY2024[115](index=115&type=chunk) [Environmental Matters](index=19&type=section&id=Environmental%20Matters) This section addresses the company's compliance with environmental laws and safety programs - The company is subject to federal, state, and local Environmental Laws regarding pollutant discharge, handling of materials, waste disposal, and remediation[116](index=116&type=chunk) - An environmental and safety program is maintained, including obtaining permits, disposing of waste, tracking hazardous waste, managing air emissions, and auditing compliance[117](index=117&type=chunk) [Intellectual Property](index=19&type=section&id=Intellectual%20Property) This section outlines the company's trademarks and plans for further intellectual property protection - The company holds one trademark in the U.S. (logo), four in China ('FLY E-BIKE', 'FLY EBIKE', 'FLYEBIKE', logo), two in the Dominican Republic ('FLY E-BIKE', logo), and one in Panama ('FLY E-BIKE')[118](index=118&type=chunk) - All current trademarks are effective from 2022 to 2033[118](index=118&type=chunk) - No other patents, copyrights, or intellectual property registrations are held in the U.S., but the company plans to seek further registrations and protects trade secrets via common law[119](index=119&type=chunk) [Competition](index=19&type=section&id=Competition) This section discusses the highly competitive EV market and factors influencing the company's success - The EV market is highly competitive, with numerous companies selling E-bikes, E-motorcycles, and E-scooters globally, based on factors like innovation, performance, price, and brand recognition[120](index=120&type=chunk) - Competitors include companies with greater financial and marketing resources such as Trek Bicycle Corporation, Specialized Bicycle Components, Inc., and Rad Power Bikes Inc[121](index=121&type=chunk) - Success depends on capitalizing on competitive strengths and building brand recognition in this nascent market[120](index=120&type=chunk)[121](index=121&type=chunk) [Regulation](index=20&type=section&id=Regulation) This section details the complex federal, state, and local regulations impacting the company's operations - The company is subject to a wide array of complex and evolving federal, state, and local laws and regulations covering labor, product liability, consumer protection, taxation, privacy, and environmental matters[122](index=122&type=chunk)[123](index=123&type=chunk) - Environmental regulations include those for hazardous substances, solid wastes (RCRA), and battery recycling, with potential for strict liability under CERCLA[124](index=124&type=chunk)[125](index=125&type=chunk) - Products are regulated by the CPSC (Consumer Product Safety Commission) and NHTSA (National Highway Traffic Safety Administration) for safety defects, and EPA/CARB for emissions[126](index=126&type=chunk)[128](index=128&type=chunk) - New York City regulations, effective September 2023, require powered mobility devices and batteries to be UL-certified, with additional laws in 2024-2025 addressing safety, operating manuals, and potential registration[129](index=129&type=chunk) - Data privacy laws (e.g., CAN-SPAM, TCPA, HIPAA, FTC Act) apply due to handling of personally identifiable information[130](index=130&type=chunk) [Employees](index=21&type=section&id=Employees) This section provides information on the company's workforce, including full-time and part-time staff - As of July 15, 2025, the company had **64 employees**, comprising **35 full-time** and **29 part-time** staff[132](index=132&type=chunk) - Employees are not unionized or covered by collective bargaining agreements, and the company reports a good working relationship with no significant labor disputes[132](index=132&type=chunk) [Item 1A. Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks to Fly-E Group's business, operations, industry, and securities - The company may not meet production and delivery plans, harming business prospects[134](index=134&type=chunk)[136](index=136&type=chunk) - Heavy reliance on a limited number of principal vendors in China for vehicle components poses supply chain risks and potential cost increases[134](index=134&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) - International trade tensions, particularly between the U.S. and China, and rising tariffs could adversely impact supply chain, costs, and product margins[134](index=134&type=chunk)[140](index=140&type=chunk)[143](index=143&type=chunk) - Substantial doubt exists about the company's ability to continue as a going concern due to net losses and significant cash outflows[134](index=134&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) - Material weaknesses in internal control over financial reporting have been identified, potentially affecting financial reporting accuracy and stock price[134](index=134&type=chunk)[167](index=167&type=chunk) - The electric two-wheel vehicle market is highly competitive and in its infancy, with many competitors having greater resources[134](index=134&type=chunk)[170](index=170&type=chunk) - Product liability claims, especially concerning lithium-ion battery safety, could lead to significant financial harm, recalls, and reputational damage[134](index=134&type=chunk)[171](index=171&type=chunk) - The price of common stock may be volatile and fluctuate substantially due to limited trading volume, commercialization success, competitive developments, and other factors[135](index=135&type=chunk)[188](index=188&type=chunk) - Directors and executive officers hold approximately **18.7%** of outstanding common stock, limiting other shareholders' influence and potentially delaying corporate control changes[135](index=135&type=chunk)[186](index=186&type=chunk)[202](index=202&type=chunk) - The company may fail to comply with Nasdaq's continued listing standards, including the minimum bid price requirement, potentially leading to delisting[135](index=135&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk) [Item 1B. Unresolved Staff Comments](index=39&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This item is not applicable, indicating no unresolved comments from the SEC staff [Item 1C. Cybersecurity](index=39&type=section&id=Item%201C.%20Cybersecurity) Fly-E Group monitors cybersecurity risks, implements risk management, and uses third-party providers for data security - The company monitors cybersecurity risks through annual reviews at senior management levels and with the Audit Committee[216](index=216&type=chunk) - Processes are in place for assessing, identifying, and managing cybersecurity risks, with plans to create a technology officer role for information security oversight[217](index=217&type=chunk) - Primary strategy for mitigating cyber risks involves storing sensitive data with trusted, SOC-compliant third-party providers[218](index=218&type=chunk) - Plans include engaging a third-party service provider for network monitoring, prevention, detection, and response to security incidents, and maintaining backup data for recovery[219](index=219&type=chunk) [Item 2. Properties](index=39&type=section&id=Item%202.%20Properties) This section details the company's owned corporate offices and leased warehouse and retail store properties - Corporate and executive offices are owned in Flushing, NY, and are encumbered by debt[220](index=220&type=chunk) - A **52,264 sq ft** warehouse in Maspeth, NY, is leased for vehicle assembly, with the lease expiring on April 30, 2029, at an annual rent of approximately **$1.2 million**[220](index=220&type=chunk) - All retail stores are leased, with aggregate rent payments of **$2.9 million** for FY2025 and **$2.4 million** for FY2024[221](index=221&type=chunk) - Current facilities are believed to be sufficient for the near term, but additional space may be required for expanding operations[221](index=221&type=chunk) [Item 3. Legal Proceedings](index=39&type=section&id=Item%203.%20Legal%20Proceedings) This section describes the company's legal proceedings and claims, none expected to have a material adverse effect - The company is subject to civil litigation regarding its consumer products and intellectual property rights[222](index=222&type=chunk) - Management does not believe any current legal proceedings, investigations, or claims are likely to have a material adverse effect on the business, financial condition, or results of operations[222](index=222&type=chunk) [Item 4. Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable, as the company is not involved in mining operations [Part II](index=41&type=section&id=Part%20II) This part covers market information for common equity, management's discussion and analysis, and controls and procedures [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=41&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section details the Nasdaq listing of common stock, stockholder information, and the company's dividend policy - Common stock commenced trading on the Nasdaq Capital Market on June 6, 2024, under the symbol "FLYE"[226](index=226&type=chunk) - As of July 15, 2025, there were **26 stockholders of record**[227](index=227&type=chunk) - The company has never declared or paid cash dividends and does not expect to in the foreseeable future, prioritizing retention of earnings for business growth[229](index=229&type=chunk) [Item 6. [Reserved]](index=41&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes financial performance, highlighting decreased revenues, a net loss, and going concern doubts - Net revenues decreased by **21.0%** to **$25.4 million** for the year ended March 31, 2025, from **$32.2 million** in the prior year[22](index=22&type=chunk)[261](index=261&type=chunk) - The decrease in revenue was primarily due to a **10,846-unit drop** in total units sold (from 69,611 to 58,765) and reduced customer inclination to purchase E-Bikes following lithium-battery accidents[239](index=239&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk) - The company reported a net loss of **$5.3 million** for FY2025, a significant change from a net income of **$1.9 million** for FY2024[260](index=260&type=chunk)[269](index=269&type=chunk) - Total operating expenses increased by **52.5%** to **$15.0 million** in FY2025, driven by higher payroll, rent, professional fees, and settlement payments[265](index=265&type=chunk) - As of March 31, 2025, the company had cash of **$0.8 million** and a net cash outflow from operating activities of **$10.1 million**, raising substantial doubt about its ability to continue as a going concern[271](index=271&type=chunk)[275](index=275&type=chunk) [Overview_MD&A](index=41&type=section&id=Overview_MD%26A) This section provides a general overview of Fly-E Group's business, products, and operational highlights - Fly-E Group is an EV company designing, installing, and selling E-motorcycles, E-bikes, E-scooters, and accessories under the 'Fly E-Bike' brand[231](index=231&type=chunk) - The company operates 20 stores (19 U.S., 1 Canada), offers rental services, and has an online store, with plans for international expansion and a second online store for gas bikes[232](index=232&type=chunk) - A diversified product portfolio includes **27 E-motorcycle**, **36 E-bike**, and **38 E-scooter products**, with continuous refreshment to align with market trends[233](index=233&type=chunk) - Development of the 'Fly E-Bike app' is underway for EV management, and an ERP system was completed in May 2025, with a GO FLY APP for rental services launched in September 2024[234](index=234&type=chunk) - Components are sourced from China and the U.S., assembled in Maspeth, NY, with **4,595 E-motorcycles**, **5,974 E-bikes**, and **1,557 E-scooters** produced in FY2025[235](index=235&type=chunk) [Key Factors that Affect Operating Results](index=42&type=section&id=Key%20Factors%20that%20Affect%20Operating%20Results) This section discusses internal and external factors influencing the company's financial performance - Operating results are influenced by U.S. EV industry factors like economic growth, disposable income, urbanization, consumer spending, competition, and government policies[236](index=236&type=chunk) - Growth depends on attracting new customers through retail strategy, effective marketing, and successful production ramp-up and quality control[237](index=237&type=chunk)[238](index=238&type=chunk) - Net revenues decreased by **21.0%** in FY2025 due to a drop in units sold (**10,846 fewer units**) and reduced E-Bike sales following lithium-battery accidents, leading customers to opt for oil-powered vehicles[239](index=239&type=chunk) - Average sales price per EV increased by **$29** (from **$960** to **$989**) in FY2025, driven by product upgrades and enhanced sales channels[239](index=239&type=chunk) - Payroll expenses increased to **$4.7 million** in FY2025 from **$2.9 million** in FY2024, but are expected to decrease in the next fiscal year due to retail store closures and dispositions[242](index=242&type=chunk) - The centralized vendor management system aims for cost savings, improved risk management, and increased negotiating power, but changes in vendor costs can significantly affect financial results[244](index=244&type=chunk) - Increased competition and U.S. government tariffs on imported EV components pose risks of price pressure, reduced margins, and supply chain disruptions[245](index=245&type=chunk) - Regulatory landscape, including product safety, battery safety, and environmental laws, creates additional costs but also opportunities like EV purchase incentives and trade-in programs (e.g., NYC DOT's **$2 million** program)[246](index=246&type=chunk) [How to Assess Our Performance](index=44&type=section&id=How%20to%20Assess%20Our%20Performance) This section explains the key financial metrics and non-GAAP measures used to evaluate company performance - Management assesses performance using net sales, gross profit, gross margin, selling, general and administrative expenses, and EBITDA[247](index=247&type=chunk) - Revenue is generated from retail and wholesale sales of EVs, accessories, spare parts, and repair/rental services, recognized net of discounts and returns[248](index=248&type=chunk)[249](index=249&type=chunk)[250](index=250&type=chunk) - Cost of sales includes product costs, warehouse rent, payroll, depreciation, inventory reserves, warranty, and logistics[251](index=251&type=chunk) - Selling, general, and administrative (SG&A) expenses include retail operational costs, salaries, marketing, advertising, and corporate overhead, expected to increase with business expansion and public company operations[253](index=253&type=chunk)[254](index=254&type=chunk)[255](index=255&type=chunk) - EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is used as a non-GAAP financial measure to evaluate operating performance and facilitate year-to-year comparisons[257](index=257&type=chunk)[258](index=258&type=chunk) [Results of Operations for the Years Ended March 31, 2025 and 2024](index=46&type=section&id=Results%20of%20Operations%20for%20the%20Years%20Ended%20March%2031%2C%202025%20and%202024) This section provides a detailed comparison of the company's financial results for fiscal years 2025 and 2024 Consolidated Results of Operations (FY2024 vs. FY2025) | Metric | FY2025 ($) | FY2024 ($) | Change ($) | % Change | | :-------------------------- | :----------- | :----------- | :----------- | :--------- | | Revenues, Net | 25,427,163 | 32,205,666 | (6,778,503) | (21.0)% | | Cost of Revenues | 14,976,266 | 19,099,120 | (4,122,854) | (21.6)% | | Gross Profit | 10,450,897 | 13,106,546 | (2,655,649) | (20.3)% | | Total Operating Expenses | 15,010,863 | 9,845,989 | 5,164,874 | 52.5% | | (Loss) Income from Operations | (4,559,966) | 3,260,557 | (7,820,523) | (239.9)% | | Net (Loss) Income | (5,291,159) | 1,895,222 | (7,186,381) | (379.2)% | | EBITDA | (3,853,007) | 3,504,561 | (7,357,568) | (209.9)% | Revenue Breakdown (FY2024 vs. FY2025) | Revenue Type | FY2025 ($) | FY2024 ($) | Change ($) | % Change | | :---------------- | :----------- | :----------- | :----------- | :--------- | | Sales-Retail | 21,725,817 | 26,389,720 | (4,663,903) | (17.7)% | | Sales-Wholesale | 3,529,479 | 5,815,946 | (2,286,467) | (39.3)% | | Sales-Rental services | 171,867 | — | 171,867 | 100.0% | | **Total Net Revenues** | **25,427,163** | **32,205,666** | **(6,778,503)** | **(21.0)%** | - Cost of revenues decreased by **21.6%** to **$15.0 million** in FY2025, primarily due to more favorable battery pricing (unit cost decreased **11%** from **$112** to **$99**) and reduced sales volume[263](index=263&type=chunk) - Gross margin remained stable at **41.1%** in FY2025 compared to **40.7%** in FY2024[264](index=264&type=chunk) - Selling expenses increased by **25.2%** to **$7.4 million** in FY2025, driven by higher payroll (**$3.3M** vs **$1.6M**), rent (**$2.9M** vs **$2.4M**), and advertising (**$0.3M** vs **$64K**), partially offset by a decrease in commission expenses[266](index=266&type=chunk) - General and administrative expenses surged by **93.5%** to **$7.6 million** in FY2025, mainly due to increased professional fees (**$2.0M** vs **$1.0M**), payroll (**$1.5M** vs **$1.1M**), insurance (**$1.1M** vs **$0.2M**), software development fees (**$0.5M** vs **$0.3M**), and **$1.0 million** in UL litigation settlement payments[267](index=267&type=chunk) - Income tax provision decreased to **$0.3 million** in FY2025 from **$1.2 million** in FY2024, reflecting the pre-tax loss[268](index=268&type=chunk) - EBITDA shifted from a positive **$3.5 million** (**10.9% of revenue**) in FY2024 to a negative **$3.9 million** (**-15.2% of revenue**) in FY2025[270](index=270&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's cash, working capital, and financing activities, noting going concern doubts Key Liquidity Metrics (as of March 31) | Metric | 2025 ($) | 2024 ($) | | :----------------- | :----------- | :----------- | | Cash | 0.8 million | 1.4 million | | Working Capital | 1.3 million | 0.3 million | | Net (Loss) Income | (5.3 million) | 1.9 million | | Net Cash (Used in) Provided by Operating Activities | (10.1 million) | 4.3 million | | Current Contractual Obligation | 8.9 million | N/A | - The company's ability to continue as a going concern is in substantial doubt due to net losses and significant cash outflows from operations[275](index=275&type=chunk) - Financing efforts include **$9.2 million net proceeds** from IPO (June 2024) and **$6.1 million net proceeds** from a secondary public offering (June 2025)[273](index=273&type=chunk)[275](index=275&type=chunk) - A 1-for-5 reverse stock split was implemented on July 3, 2025, reducing outstanding common stock shares from 24,587,500 to 4,917,500 as of March 31, 2025[274](index=274&type=chunk)[275](index=275&type=chunk) - Accounts receivable turnover increased from **69 days** (FY2024) to **71 days** (FY2025) due to longer payment terms for dealers[276](index=276&type=chunk) - Accounts payable turnover increased from **25 days** (FY2024) to **33 days** (FY2025) due to longer payment cycles[277](index=277&type=chunk) - Prepayments and other receivables significantly increased by **$3.1 million** to **$3.7 million** in FY2025, mainly for additional inventory for the new E-bike rental services[278](index=278&type=chunk) - Inventories increased to **$6.4 million** in FY2025 from **$5.4 million** in FY2024, primarily for the new rental business, increasing inventory turnover days from **89** to **143**[279](index=279&type=chunk) Cash Flow Summary (FY2024 vs. FY2025) | Cash Flow Activity | FY2025 ($) | FY2024 ($) | | :----------------------------- | :------------ | :------------ | | Operating Activities | (10,059,466) | 4,308,920 | | Investing Activities | (2,901,272) | (3,200,843) | | Financing Activities | 12,486,104 | (49,628) | | Net changes in cash | (474,634) | 1,058,449 | Contractual Obligations (as of March 31, 2025) | Obligation Type | Total ($) | Less than 1 year ($) | 1 – 2 years ($) | 3 – 5 years ($) | Thereafter ($) | | :-------------------------- | :----------- | :------------------- | :-------------- | :-------------- | :------------- | | Operating Lease Obligations | 11,724,690 | 2,617,762 | 5,290,390 | 2,842,381 | 974,157 | | Loan Payable | 7,356,936 | 5,291,893 | 160,004 | 20,515 | 1,884,524 | | UL Litigation | 1,000,000 | 1,000,000 | — | — | — | | **Total** | **20,081,626** | **8,909,655** | **5,450,394** | **2,862,896** | **2,858,681** | [Quantitative and Qualitative Disclosures about Market Risk](index=51&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section discusses the company's exposure to foreign exchange and interest rate market risks - The company does not currently have significant direct foreign exchange risk as most revenues and expenses are in U.S. dollars, and no derivative financial instruments are used for hedging[290](index=290&type=chunk) - Interest rate risk primarily relates to fixed-rate short-term and long-term bank borrowings; no material risks from market interest rate changes are anticipated, but future renewals could expose the company to such risks[291](index=291&type=chunk) [Critical Accounting Estimates](index=51&type=section&id=Critical%20Accounting%20Estimates) This section highlights key accounting estimates requiring significant judgment, such as inventory obsolescence - Critical accounting estimates involve assumptions about highly uncertain matters that could materially impact financial statements, with significant judgment required[292](index=292&type=chunk)[293](index=293&type=chunk) - A key estimate is the allowance for inventory obsolescence, based on inventory aging, historical/forecasted demand, and market conditions[294](index=294&type=chunk) Inventory Allowance Balance (as of March 31) | Metric | 2025 ($) | 2024 ($) | | :----------------- | :---------- | :---------- | | Inventory Allowance | 1,107,569 | 514,021 | [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable, as market risk disclosures are included in Item 7 [Item 8. Financial Statements and Supplementary Data](index=52&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item incorporates the consolidated financial statements and related notes by reference from page F-1 - The financial statements and supplementary data are included starting on page F-1 of this annual report[296](index=296&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures](index=52&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) This item is not applicable, indicating no changes or disagreements with accountants on financial disclosures [Item 9A. Controls and Procedures](index=52&type=section&id=Item%209A.%20Controls%20and%20Procedures) Disclosure controls and procedures were ineffective due to material weaknesses in internal control over financial reporting, with ongoing remediation - Disclosure controls and procedures were evaluated as not effective as of March 31, 2025, due to material weaknesses in internal control over financial reporting[299](index=299&type=chunk)[302](index=302&type=chunk) - Identified material weaknesses include: (i) insufficient financial reporting and accounting personnel with U.S. GAAP and SEC reporting knowledge, (ii) lack of formal internal control policies and risk assessment framework, and (iii) insufficient controls in IT environment and general control activities (logical access, change management, computer operation, service organization, cyber security)[167](index=167&type=chunk)[300](index=300&type=chunk) - Remediation efforts include hiring qualified accounting staff, providing U.S. GAAP/SEC training, outsourcing IT, and developing an ERP system, but these were not fully remediated as of March 31, 2025[169](index=169&type=chunk)[301](index=301&type=chunk) - No material changes in internal control over financial reporting occurred during the fourth quarter of FY2025, other than additional controls in the revenue process[304](index=304&type=chunk) [Item 9B. Other Information](index=53&type=section&id=Item%209B.%20Other%20Information) The company adopted an insider trading policy to regulate securities transactions by directors, officers, and employees - The company adopted an insider trading policy on May 3, 2024, to regulate securities transactions by directors, officers, and employees[306](index=306&type=chunk)[324](index=324&type=chunk) - The policy is designed to promote compliance with insider trading laws, rules, regulations, and applicable Nasdaq listing standards[324](index=324&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevent Inspections.](index=53&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdiction%20that%20Prevent%20Inspections.) This item is not applicable, indicating no foreign jurisdictions prevent inspections of the company's operations [Part III](index=54&type=section&id=Part%20III) This part covers directors, executive officers, corporate governance, executive compensation, and security ownership [Item 10. Directors, Executive Officers and Corporate Governance](index=54&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section details executive officers, directors, board structure, committee functions, and corporate governance policies Executive Officers and Directors | Name | Age | Position | | :---------- | :-- | :------------------------------------- | | Zhou Ou | 36 | Chairman of the Board and CEO | | Shiwen Feng | 29 | Director and CFO | | Rui Feng | 40 | Chief Operating Officer | | Ke Zhang | 38 | Chief Human Resource Officer | | Bin Wang | 67 | Director | | Lun Feng | 65 | Director | | Zanfeng Zhang | 51 | Director | - The board of directors is classified into three classes with staggered three-year terms, with approximately one-third elected each year[317](index=317&type=chunk) - Three independent committees are established: Audit Committee (Chair: Bin Wang, includes Lun Feng, Zanfeng Zhang), Compensation Committee (Chair: Lun Feng, includes Bin Wang, Zanfeng Zhang), and Nominating and Governance Committee (Chair: Zanfeng Zhang, includes Bin Wang, Lun Feng)[318](index=318&type=chunk)[319](index=319&type=chunk)[320](index=320&type=chunk)[321](index=321&type=chunk) - The company has adopted a written Code of Business Conduct and Ethics, an Insider Trading Policy (adopted May 3, 2024), and a clawback policy for incentive-based compensation[323](index=323&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk) - The clawback policy mandates recovery of incentive-based compensation from executive officers if an accounting restatement is required due to material noncompliance with U.S. financial reporting requirements[326](index=326&type=chunk) [Item 11. Executive Compensation](index=58&type=section&id=Item%2011.%20Executive%20Compensation) This section details executive officer compensation and the 2024 Omnibus Incentive Plan for equity-based awards Summary Executive Compensation (FY2024 vs. FY2025) | Name and Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | All Other Compensation ($) | Total ($) | | :---------------- | :--- | :--------- | :-------- | :--------------- | :---------------- | :------------------------- | :-------- | | Zhou Ou, CEO | 2025 | 100,000 | — | — | — | — | 100,000 | | | 2024 | 100,000 | — | — | — | — | 100,000 | - CEO Zhou Ou's employment agreement (April 1, 2023) provides a monthly base salary of **$8,333** and includes non-disclosure, non-solicitation, and non-competition covenants for two years post-termination[331](index=331&type=chunk) - CFO Shiwen Feng's employment agreement (November 7, 2024) provides a monthly base salary of **$6,667** and includes similar non-disclosure, non-solicitation, and non-competition covenants[333](index=333&type=chunk) - The Fly-E Group Inc. 2024 Omnibus Incentive Plan was approved by stockholders on March 10, 2025, reserving **740,000 shares** for awards, with an automatic annual increase provision[335](index=335&type=chunk)[339](index=339&type=chunk) - Awards under the 2024 Plan can be granted to employees, officers, directors, consultants, and advisors, and include stock options, SARs, restricted stock, and other equity-based awards[338](index=338&type=chunk)[341](index=341&type=chunk) - As of March 31, 2025, there were no option or stock awards outstanding[334](index=334&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters](index=63&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owner%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details beneficial ownership of common stock by management and the shares reserved under the incentive plan Beneficial Ownership of Common Stock (as of July 15, 2025) | Name | Shares Beneficially Owned | Percentage Owned | | :-------------------------- | :------------------------ | :--------------- | | Zhou Ou | 1,540,000 | 8.5% | | Rui Feng | 352,000 | 1.9% | | Ke Zhang | 1,474,000 | 8.1% | | Directors and Officers as a group (seven persons) | 3,366,000 | 18.7% | - The 2024 Omnibus Incentive Plan has **740,000 shares** of common stock reserved for future issuance[359](index=359&type=chunk) - No grants or awards have been issued under the 2024 Plan as of July 15, 2025[359](index=359&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=64&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section discloses related party transactions, including financial support, services, product sales, and director independence - CEO Zhou Ou provided financial support to the company, advancing **$3,274,924** and receiving **$1,207,404** in repayments from April 2023 to March 2025. A payable balance of **$2,263,630** was transferred to capital contribution[361](index=361&type=chunk) - COO Rui Feng and CHRO Ke Zhang advanced **$8,711** and **$52,802**, respectively, to subsidiaries for business operations, which were fully repaid by March 31, 2025[362](index=362&type=chunk)[363](index=363&type=chunk) - DGLG Accounting and Tax LLC (associated with former CFO Mr. Guo) provided consulting services (**$225,000** in FY2025, **$100,000** in FY2024) and tax services (**$61,050** in FY2025, **$123,000** in FY2024)[364](index=364&type=chunk) - PJMG LLC (associated with former CFO Mr. Guo) provided consulting services, with **$372,047** paid in FY2025, and **$120,000** prepaid as of March 31, 2025[365](index=365&type=chunk) - Fly E Bike SRL (controlled by CEO Mr. Ou) purchased **$42,010** in EV products in FY2025 and **$326,914** in FY2024. The company also advanced **$143,455** to Fly E Bike SRL in FY2025, which was repaid by July 15, 2025[366](index=366&type=chunk) - DF Technology US Inc (associated with former CFO Mr. Guo) was engaged for ERP system development (**$2,500,000** accumulative payments by March 31, 2025) and GO FLY APP development (**$500,000** contract price)[367](index=367&type=chunk) - Directors Bin Wang, Lun Feng, and Zanfeng Zhang are considered independent under Nasdaq listing rules[368](index=368&type=chunk) - A written Audit Committee Charter outlines procedures for identifying, reviewing, approving, and disclosing related party transactions exceeding **$120,000** or **1% of total assets**[370](index=370&type=chunk)[371](index=371&type=chunk) [Item 14. Principal Accounting Fees and Services](index=66&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) This section details audit and other fees paid to the independent accounting firm, all pre-approved by the Audit Committee Principal Accounting Fees (FY2024 vs. FY2025) | Fee Type | FY2025 ($) | FY2024 ($) | | :------------ | :--------- | :--------- | | Audit fees | 608,727 | 552,065 | | Tax Fees | — | — | | All Other Fees | — | — | | **Total All Fees** | **608,727** | **552,065** | - Audit fees cover professional services for annual financial statement audits, quarterly reviews, and registration statement reviews[374](index=374&type=chunk) - All audit and permissible non-audit services performed by the independent accountants are pre-approved by the Audit Committee[375](index=375&type=chunk) [Part IV](index=67&type=section&id=Part%20IV) This part lists exhibits, financial statement schedules, and the Form 10-K summary [Item 15. Exhibits, Financial Statement Schedules](index=67&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the 10-K report - Financial statements, including the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Statements of Operations, Changes in Stockholders' Equity, and Cash Flows, are filed as part of this report, starting on page F-2[377](index=377&type=chunk) - All financial statement schedules are omitted because they are not applicable, immaterial, or the information is presented in the financial statements and notes[378](index=378&type=chunk) - A list of exhibits is provided, with some incorporated by reference from previous SEC filings[379](index=379&type=chunk) [Item 16. Form 10-K Summary](index=67&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable, as a separate Form 10-K summary is not provided [Signatures](index=70&type=section&id=Signatures) This section contains the official signatures of the company's executive officers and directors [Signatures_Details](index=70&type=section&id=Signatures_Details) This section lists the specific individuals, including CEO, CFO, and directors, who signed the annual report - The annual report is signed by Zhou Ou (Chief Executive Officer and Director), Shiwen Feng (Chief Financial Officer and Director), Bin Wang (Director), Lun Feng (Director), and Zanfeng Zhang (Director)[386](index=386&type=chunk) - All signatures are dated July 15, 2025[386](index=386&type=chunk) [INDEX TO CONSOLIDATED FINANCIAL STATEMENTS](index=71&type=section&id=INDEX%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides a comprehensive index to the consolidated financial statements and related notes [Financial Statements Listing](index=71&type=section&id=Financial%20Statements%20Listing) This section lists all components of the consolidated financial statements, including the auditor's report and notes - The index lists the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive (Loss) Income, Consolidated Statements of Changes in Stockholders' Equity, Consolidated Statements of Cash Flows, and Notes to Consolidated Financial Statements[388](index=388&type=chunk) [Report of Independent Registered Public Accounting Firm](index=72&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) This section presents the independent auditor's report on the consolidated financial statements [Auditor's Opinion and Going Concern](index=72&type=section&id=Auditor%27s%20Opinion%20and%20Going%20Concern) The auditor issued an unqualified opinion but noted substantial doubt about the company's ability to continue as a going concern - Marcum Asia CPAs LLP provided an unqualified opinion, stating the financial statements for FY2025 and FY2024 present fairly the financial position and results of operations[392](index=392&type=chunk) - An explanatory paragraph notes substantial doubt about the company's ability to continue as a going concern due to significant losses and cash outflows from operating and investing activities[393](index=393&type=chunk) - The financial statements do not include adjustments that might result from the outcome of the going concern uncertainty[393](index=393&type=chunk) - The auditor did not perform an audit of internal control over financial reporting and thus expresses no opinion on its effectiveness[395](index=395&type=chunk) [CONSOLIDATED FINANCIAL STATEMENTS](index=73&type=section&id=CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section contains the complete set of consolidated financial statements for the company [Consolidated Balance Sheets](index=73&type=section&id=Consolidated%20Balance%20Sheets) This statement presents the company's financial position, including assets, liabilities, and equity, as of March 31, 2025 and 2024 Consolidated Balance Sheet Summary (as of March 31) | Metric | 2025 ($) | 2024 ($) | | :-------------------------- | :----------- | :----------- | | **ASSETS** | | | | Total Current Assets | 14,000,516 | 8,136,208 | | Property and equipment, net | 7,287,213 | 1,755,022 | | Operating lease right-of-use assets | 10,933,068 | 16,000,742 | | Total Assets | **33,706,675** | **28,976,334** | | **LIABILITIES** | | | | Total Current Liabilities | 12,701,375 | 7,794,816 | | Long-term loan payables | 2,065,040 | 412,817 | | Operating lease liabilities – non-current | 9,106,928 | 13,986,879 | | Total Liabilities | **23,873,343** | **22,194,512** | | **STOCKHOLDERS' EQUITY** | | | | Common stock | 49,175 | 44,000 | | Additional paid-in capital | 10,940,724 | 2,576,000 | | (Accumulated deficit) Retained Earnings | (895,510) | 4,395,649 | | Total Stockholders' Equity | **9,833,332** | **6,781,822** | - Cash decreased from **$1.4 million** in 2024 to **$0.8 million** in 2025[399](index=399&type=chunk) - Inventories, net, increased to **$6.4 million** in 2025 from **$5.4 million** in 2024[399](index=399&type=chunk) - Short-term loan payables increased significantly from nil in 2024 to **$5.2 million** in 2025[399](index=399&type=chunk) [Consolidated Statements of Operations and Comprehensive (Loss) Income](index=75&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20%28Loss%29%20Income) This statement details the company's revenues, expenses, and net income or loss for fiscal years 2025 and 2024 Consolidated Statements of Operations Summary (FY2024 vs. FY2025) | Metric | FY2025 ($) | FY2024 ($) | | :-------------------------- | :----------- | :----------- | | Revenues | 25,427,163 | 32,205,666 | | Cost of Revenues | 14,976,266 | 19,099,120 | | Gross Profit | 10,450,897 | 13,106,546 | | Selling Expenses | 7,403,374 | 5,914,786 | | General and Administrative Expenses | 7,607,489 | 3,931,203 | | Total Operating Expenses | 15,010,863 | 9,845,989 | | Income (Loss) from Operations | (4,559,966) | 3,260,557 | | Net Income (Loss) | (5,291,159) | 1,895,222 | | Earnings (Losses) per Share | (1.10) | 0.43 | - Net revenues decreased by **21.0%** from **$32.2 million** in FY2024 to **$25.4 million** in FY2025[401](index=401&type=chunk) - Total operating expenses increased by **52.5%** from **$9.8 million** in FY2024 to **$15.0 million** in FY2025[401](index=401&type=chunk) - The company reported a net loss of **$5.3 million** in FY2025, a significant decline from a net income of **$1.9 million** in FY2024[401](index=401&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=76&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) This statement outlines changes in stockholders' equity, including capital contributions and net loss, for fiscal years 2025 and 2024 Consolidated Statements of Changes in Stockholders' Equity Summary (as of March 31) | Metric | 2025 ($) | 2024 ($) | | :-------------------------- | :----------- | :----------- | | Common Stock | 49,175 | 44,000 | | Additional Paid-in Capital | 10,940,724 | 2,576,000 | | Shares Subscription Receivables | (219,998) | (219,998) | | (Accumulated Deficit) Retained Earnings | (895,510) | 4,395,649 | | Accumulated Other Comprehensive Loss | (41,059) | (13,829) | | **Total Stockholders' Equity** | **9,833,332** | **6,781,822** | - Net loss of **$5.3 million** in FY2025 reduced retained earnings, which was **$4.4 million** in FY2024[405](index=405&type=chunk) - Issuance of common stock upon IPO contributed **$8.4 million** to additional paid-in capital in FY2025[405](index=405&type=chunk) - All share and per share data are retroactively adjusted to reflect the 1-for-110,000 stock split in April 2024 and the 1-for-5 reverse stock split in July 2025[405](index=405&type=chunk) [Consolidated Statements of Cash Flows](index=77&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement presents cash flows from operating, investing, and financing activities for fiscal years 2025 and 2024 Consolidated Statements of Cash Flows Summary (FY2024 vs. FY2025) | Cash Flow Activity | FY2025 ($) | FY2024 ($) | | :----------------------------- | :------------ | :------------ | | Net Cash (Used in) Provided by Operating Activities | (10,059,466) | 4,308,920 | | Net Cash Used in Investing Activities | (2,901,272) | (3,200,843) | | Net Cash Provided by (Used in) Financing Activities | 12,486,104 | (49,628) | | Net changes in cash | (474,634) | 1,058,449 | | Cash at the end of the year | 840,102 | 1,403,514 | - Net cash used in operating activities was **$10.1 million** in FY2025, a reversal from **$4.3 million** provided in FY2024, mainly due to net loss, increased inventories, and prepayments[282](index=282&type=chunk)[409](index=409&type=chunk) - Net cash used in investing activities was **$2.9 million** in FY2025, primarily for purchases of properties, equipment, and software[284](index=284&type=chunk)[409](index=409&type=chunk) - Net cash provided by financing activities was **$12.5 million** in FY2025, driven by **$9.2 million net proceeds** from the IPO and **$7.4 million** in loan proceeds, partially offset by loan repayments[286](index=286&type=chunk)[409](index=409&type=chunk) - Cash paid for interest expense increased from **$152,050** in FY2024 to **$405,615** in FY2025[409](index=409&type=chunk) [Notes to Consolidated Financial Statements](index=79&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and supplementary information for the consolidated financial statements [1 — DESCRIPTION OF BUSINESS, ORGANIZATION AND BASIS OF PRESENTATION](index=79&type=section&id=1%20%E2%80%94%20DESCRIPTION%20OF%20BUSINESS%2C%20ORGANIZATION%20AND%20BASIS%20OF%20PRESENTATION) This note describes Fly-E Group's business, corporate history, recent capital events, and the going concern uncertainty - Fly-E Group, Inc. was incorporated on November 1, 2022, as a holding company for its EV business, primarily through Fly E-Bike Inc. and its subsidiaries[413](index=413&type=chunk) - The company's business originated in 2018 as CTATE INC., which merged into Fly E-Bike in September 2022, followed by Fly-E Group acquiring Fly E-Bike in December 2022 through a Share Exchange[414](index=414&type=chunk)[415](index=415&type=chunk) - The company completed its IPO on June 7, 2024, raising approximately **$9.2 million in net proceeds**, and a secondary public offering on June 4, 2025, raising **$6.1 million in net proceeds**[417](index=417&type=chunk)[418](index=418&type=chunk)[426](index=426&type=chunk)[427](index=427&type=chunk) - A 1-for-5 reverse stock split was implemented on July 3, 2025, retroactively adjusting all share and per share information[419](index=419&type=chunk)[420](index=420&type=chunk)[427](index=427&type=chunk) - As of March 31, 2025, the company had **$0.8 million cash**, **$1.3 million working capital**, a **$5.3 million net loss**, and **$10.1 million net cash used in operating activities**, leading to substantial doubt about its ability to continue as a going concern[427](index=427&type=chunk) - Management plans to alleviate going concern risk through equity financing, other debt financing, and financial support from related parties[427](index=427&type=chunk) [2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=83&type=section&id=2%20%E2%80%94%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details the company's significant accounting policies, including revenue recognition, inventory, property, and lease accounting - Consolidated financial statements are prepared in accordance with U.S. GAAP and SEC regulations, including subsidiaries where the company exercises control[428](index=428&type=chunk)[429](index=429&type=chunk) - The company operates as a single reportable segment, with financial information reviewed on a consolidated basis[430](index=430&type=chunk) - Significant accounting estimates include allowance for inventories, which is based on factors like aging, demand, and market conditions[431](index=431&type=chunk)[438](index=438&type=chunk) - Accounts receivable are recorded at invoiced amounts less an allowance for credit loss, estimated using the CECL model[435](index=435&type=chunk)[436](index=436&type=chunk) - Inventories are stated at the lower of cost or net realizable value using the first-in-first-out (FIFO) method[438](index=438&type=chunk) - Property and equipment are stated at cost less accumulated depreciation, calculated using the straight-line method over estimated useful lives (e.g., machinery 5 years, buildings 30 years)[440](index=440&type=chunk) - Intangible assets (internal use software, property rights) are amortized on a straight-line basis over their useful lives (e.g., software 5 years)[442](index=442&type=chunk)[443](index=443&type=chunk) - Revenue from product sales is recognized under ASC 606 when control transfers to the customer, while rental services revenue is recognized over the rental period under ASC 842[448](index=448&type=chunk)[451](index=451&type=chunk)[454](index=454&type=chunk)[456](index=456&type=chunk) - The company recognizes right-of-use (ROU) assets and lease liabilities for all leases (except short-term/low-value) at commencement, depreciating ROU assets straight-line[465](index=465&type=chunk)[466](index=466&type=chunk)[467](index=467&type=chunk) - No single customer accounted for more than **10%** of total net revenues in FY2025 or FY2024, but top two suppliers represented **42%** and **32%** of purchases in FY2025[470](index=470&type=chunk)[471](index=471&type=chunk) - The company adopted ASU 2023-07 (Segment Reporting) for FY2025 retrospectively, with no material impact on reportable segments[483](index=483&type=chunk) [3 — INVENTORIES, NET](index=91&type=section&id=3%20%E2%80%94%20INVENTORIES%2C%20NET) This note details the composition and valuation of inventories, net, including reserves for obsolescence Inventories, Net (as of March 31) | Category | 2025 ($) | 2024 ($) | | :---------------- | :---------- | :---------- | | Batteries | 2,084,890 | 1,009,228 | | Electric Vehicles | 3,070,224 | 2,634,643 | | Tires | 4

Core Viewpoint - Fly-E Group, Inc. will implement a reverse stock split on a one-for-five basis to increase the market price per share and maintain its Nasdaq listing [1][4]. Group 1: Reverse Stock Split Details - The reverse stock split has been approved by the Company's stockholders and Board of Directors [2]. - Each five pre-split shares will automatically combine into one post-split share, with no change in par value [3]. - The number of issued and outstanding shares will decrease from 53,183,053 to approximately 10,636,611 [4]. Group 2: Purpose and Impact - The reverse stock split aims to increase the market price per share to attract institutional and other investors [4]. - Adjustments will be made to the exercise price and the number of shares issuable upon the exercise of outstanding warrants [3].

Group 1 - American Trust Investment Services, Inc. (ATIS) is acting as the exclusive placement agent for Fly-E Group Inc. in its follow-on public offering [1][5] - The offering includes 28,595,553 shares of common stock and 57,191,106 warrants, with a public offering price of $0.2428 per share, aiming for gross proceeds of approximately $6.94 million [2] - Fly-E Group Inc. specializes in electric vehicles, focusing on smart electric motorcycles, e-bikes, scooters, and related accessories, and operates over 30 retail stores in the U.S. [3] Group 2 - The net proceeds from the offering will be allocated for inventory purchases, vehicle production, and general corporate purposes [4] - ATIS emphasizes its commitment to supporting high-growth companies like Fly-E, aiming to enhance their market leadership in sustainable mobility [5] - ATIS is recognized for providing tailored capital markets solutions and has a strong track record in guiding businesses through complex financial transactions [6]

Core Viewpoint - Fly-E Group, Inc. has successfully closed a public offering of 28,595,553 shares of common stock and 57,191,106 warrants, raising approximately $6.94 million in gross proceeds, which will be used for inventory purchases, production costs, and working capital [1][2]. Group 1: Offering Details - The public offering price was set at $0.2428 per share, with each share sold together with two warrants, each exercisable at an exercise price of $0.2913 [1][2]. - The offering closed on June 4, 2025, and the warrants are exercisable immediately, expiring on the fifth anniversary of the issuance date [1][2]. Group 2: Use of Proceeds - The net proceeds from the offering will be allocated towards purchasing inventory, covering production costs of vehicles, and supporting working capital needs [2]. Group 3: Company Overview - Fly-E Group, Inc. specializes in designing, installing, selling, and renting smart electric motorcycles, electric bikes, and electric scooters under the brand "Fly E-Bike," promoting eco-friendly transportation [5].

Core Viewpoint - Fly-E Group, Inc. has announced a public offering of 28,595,553 shares of common stock and 57,191,106 warrants at a price of $0.2428 per share, aiming to raise approximately $6.94 million for inventory and production costs [1][2]. Group 1: Offering Details - The public offering includes common stock sold with two warrants per share, with each warrant exercisable at an exercise price of $0.2913 [1]. - The offering is expected to close on or about June 3, 2025, pending customary closing conditions [2]. - The gross proceeds from the offering are anticipated to be around $6.94 million before deducting fees and expenses [2]. Group 2: Company Overview - Fly-E Group, Inc. specializes in designing, installing, selling, and renting smart electric motorcycles, electric bikes, and electric scooters under the brand "Fly E-Bike" [6]. - The company's mission is to promote eco-friendly transportation and contribute to a more sustainable future [6]. Group 3: Regulatory Information - The securities are being offered under a registration statement on Form S-1, which was declared effective by the SEC on May 15, 2025 [4]. - A final prospectus will be filed with the SEC and will be available on their website [4].

Group 1 - Fly-E Group, Inc. is participating in the D. Boral Capital Inaugural Global Conference on May 14, 2025, in New York City to engage with investors [1][2] - The conference will feature approximately seventy-five presenting companies and hundreds of institutional investors, providing a platform for interaction in a high-energy environment [3] - Fly-E Group focuses on eco-friendly transportation solutions, offering smart electric motorcycles, electric bikes, and electric scooters under the brand "Fly E-Bike" [4]

Financial Performance - Net revenues for Q3 FY2025 were $5.7 million, a decrease of 23.6% from $7.4 million in Q3 FY2024, primarily due to a reduction in sales volume by 3,511 units[4]. - For the nine months ended December 31, 2024, net revenues were $20.4 million, a decrease of 15.2% from $24.0 million for the same period last year[14]. - Retail sales revenue for the nine months ended December 31, 2024, was $17.7 million, down 7.9% from $19.2 million in the same period last year[15]. - For the three months ended December 31, 2024, revenues were $5,678,010, a decrease of 23.6% compared to $7,428,212 for the same period in 2023[39]. Profitability - The company reported a net loss of $0.7 million, or $0.03 per share, in Q3 FY2025, compared to a net income of $20,889, or $0.001 per share, in Q3 FY2024[11][12]. - The company experienced a net loss of $2.0 million for the nine months ended December 31, 2024, compared to a net income of $1.2 million for the same period last year[20]. - The company reported a net loss of $684,487 for the three months ended December 31, 2024, compared to a net income of $20,889 for the same period in 2023[39]. - For the nine months ended December 31, 2024, the company reported a net loss of $2,006,843 compared to a net income of $1,207,888 in the same period of 2023, representing a decline of 266.1%[43]. Expenses - Total operating expenses increased by 26.0% to $3.5 million in Q3 FY2025, compared to $2.8 million in Q3 FY2024, driven by higher payroll, rent, and advertising expenses[9]. - The company’s operating expenses for the three months ended December 31, 2024, were $3,501,349, up from $2,778,824 in the same period in 2023, marking an increase of 26.0%[39]. - The cost of revenues for the nine months ended December 31, 2024, was $11.8 million, a decrease of 19.0% from $14.6 million for the same period last year[16]. - The company experienced a significant increase in depreciation expense, which rose to $310,910 for the nine months ended December 31, 2024, up 52.6% from $203,788 in 2023[45]. - The company reported a substantial increase in interest expenses, which reached $247,550 for the nine months ended December 31, 2024, a rise of 201.3% from $82,150 in 2023[45]. Cash Flow and Assets - Cash and cash equivalents decreased slightly to $1,367,248 as of December 31, 2024, from $1,403,514 as of March 31, 2024[36]. - Cash at the end of the period was $1,367,248, a decrease from $1,173,228 at the end of the same period in 2023[43]. - Cash flows from operating activities showed a net cash used of $(9,413,989) for the nine months ended December 31, 2024, compared to a net cash provided of $1,743,987 in 2023[43]. - Net cash provided by financing activities was $12,233,936 for the nine months ended December 31, 2024, a significant increase from $30,550 in 2023[43]. - The company reported a net cash used in investing activities of $(2,836,671) for the nine months ended December 31, 2024, compared to $(963,304) in 2023[43]. Balance Sheet - Total current assets increased to $12,844,667 as of December 31, 2024, from $8,136,208 as of March 31, 2024, representing a growth of 58.5%[36]. - Total liabilities rose to $24,114,347 as of December 31, 2024, compared to $22,194,512 as of March 31, 2024, indicating an increase of 8.7%[36]. Strategic Initiatives - The company plans to expand its product portfolio and enhance brand influence through international trade shows and strategic partnerships[3]. - In January 2025, the NYC Department of Transportation launched a $2 million trade-in program, with the Fly-11 PRO selected as the official model[26]. Other Financial Metrics - EBITDA is used as a key performance measure, providing insight into the company's operating performance by excluding interest, taxes, depreciation, and amortization[29]. - EBITDA for the nine months ended December 31, 2024, was $(1,939,206), a decrease of $4,165,029 or 187.1% compared to $2,225,823 in 2023[45]. - The company recognized a deferred IPO cost of $502,198 as additional paid-in capital during the reporting period[44]. - The company expects to continue facing challenges in the upcoming quarters, with actual results potentially differing from forward-looking statements due to various risks and uncertainties[32].

Core Viewpoint - Fly-E Group, Inc. reported a significant decline in net revenues and net income for the third quarter and nine months of fiscal year 2025, primarily due to decreased sales volume and consumer sentiment affected by recent battery accidents [2][3][12]. Financial Results Summary Third Quarter Financial Results - Net revenues were $5.7 million, a decrease of 23.6% from $7.4 million in the same period last year [3][7]. - Retail sales revenue was $4.9 million, down 21.9% from $6.3 million year-over-year [4]. - Wholesale revenue was $0.7 million, compared to $1.1 million in the same period last year [4]. - Rental services revenue was $48,961, with no revenue generated in the same quarter last year [4]. - Cost of revenues was $3.1 million, a decrease of 30.0% from $4.5 million year-over-year [5]. - Gross profit was $2.6 million, down 13.9% from $3.0 million in the same period last year, with a gross margin of 45.1%, up from 39.0% [6][7]. - Total operating expenses were $3.5 million, an increase of 26.0% from $2.8 million year-over-year [8]. - Net loss was $0.7 million, or $0.03 per share, compared to net income of $20,889, or $0.001 per share, in the same period last year [9][10]. Nine Months Ended December 31, 2024 Financial Results - Net revenues were $20.4 million, a decrease of 15.2% from $24.0 million in the same period last year [12]. - Retail sales revenue was $17.7 million, down 7.9% from $19.2 million year-over-year [13]. - Wholesale revenue was $2.6 million, a decrease of 45.5% from $4.8 million in the same period last year [13]. - Cost of revenues was $11.8 million, a decrease of 19.0% from $14.6 million year-over-year [16]. - Gross profit was $8.6 million, down 9.4% from $9.5 million in the same period last year, with a gross margin of 42.0%, up from 39.3% [17]. - Total operating expenses were $10.8 million, an increase of 45.5% from $7.4 million year-over-year [18]. - Net loss was $2.0 million, compared to net income of $1.2 million in the same period last year [19]. - Basic and diluted losses per share were $0.08, compared to earnings per share of $0.05 for the same period last year [21]. Business Update - Fly-E's Fly-11 PRO was selected as the official model for the New York City Department of Transportation's $2 million Trade-In Program, aimed at promoting safer e-mobility solutions [2][25]. - The company is focusing on innovation and diversification to drive long-term growth, including expanding its product portfolio and enhancing digital marketing efforts [2]. Financial Condition - As of December 31, 2024, the company had cash of $1.4 million, with net cash used in operating activities amounting to $9.4 million for the nine months ended December 31, 2024 [23]. - Net cash provided by financing activities was $12.2 million for the nine months ended December 31, 2024, compared to $30,550 for the same period last year [24]. EBITDA Analysis - EBITDA was negative $0.8 million for the third quarter of fiscal year 2025, compared to positive EBITDA of $0.2 million in the same period last year [11][39]. - For the nine months ended December 31, 2024, EBITDA was negative $1.9 million, compared to positive EBITDA of $2.2 million for the same period last year [22][39].

Revenue Performance - For the three months ended December 31, 2024, net revenues decreased by 23.6% to $5.7 million, down from $7.4 million for the same period in 2023, primarily due to a drop in total units sold from 13,500 to 9,989 units [181]. - For the nine months ended December 31, 2024, net revenues decreased by 15.2% to $20.4 million, compared to $24.0 million for the same period in 2023, driven by a decrease in total units sold from 49,503 to 41,925 units [182]. - Total net revenues decreased by 23.6% to $5.7 million for the three months ended December 31, 2024, down from $7.4 million in the same period of 2023 [204]. - Retail sales revenue fell by 21.9% to $4.9 million, while wholesale revenue decreased by 37.1% to $0.7 million, primarily due to reduced consumer interest in E-Bikes following lithium-battery incidents [205]. - Net revenues for the nine months ended December 31, 2024, were $20.4 million, a decrease of 15.2% from $24.0 million in the same period of 2023, driven by a reduction of 7,578 units sold [219]. Production and Product Development - The company produced 728 E-motorcycles, 930 E-bikes, and 200 E-scooters for the three months ended December 31, 2024, and 3,842 E-motorcycles, 5,713 E-bikes, and 1,480 E-scooters for the nine months ended December 31, 2024 [172]. - The company launched a rental program in October 2024, providing e-bike rental services in New York City and Los Angeles, with plans to expand to Miami and Toronto [176]. - The company plans to open a second online store focusing on selling gas bikes in the future, expanding its product offerings [169]. Financial Performance - Gross profit for the three months ended December 31, 2024, was $2.6 million, a decrease of 13.9% from $3.0 million in 2023, with a gross margin increase to 45.1% from 39.0% [209]. - Total operating expenses rose by 26.0% to $3.5 million, driven by increased general and administrative expenses, which surged by 84.7% to $1.6 million [210]. - Net loss for the three months ended December 31, 2024, was $684,487, a significant decline of 3376.8% from a net income of $20,889 in the same period of 2023 [215]. - EBITDA for the three months ended December 31, 2024, was $(804,993), a decrease of 624.8% compared to $153,394 in 2023, with an EBITDA margin of -14.2% [217]. - Net loss for the nine months ended December 31, 2024, was $2.0 million, a decline of $3.2 million or 266.1% from net income of $1.2 million in 2023 [228]. - EBITDA for the nine months ended December 31, 2024, was $(1.9) million, a decrease of $4.2 million compared to $2.2 million in 2023, with an EBITDA margin of negative 9.5% [230]. Expenses and Cost Management - Selling expenses remained relatively stable, increasing slightly by 0.4% to $1.9 million, while advertising expenses surged to $32,681 from $6,629 due to increased marketing efforts [212]. - General and administrative expenses included a rise in professional fees to $0.4 million and insurance expenses to $0.3 million, reflecting the costs associated with being a public company [213]. - Total operating expenses increased by 45.5% to $10.9 million, driven by higher payroll, rent, and professional fees associated with business expansion [224]. - Selling expenses rose by 20.7% to $5.6 million, while general and administrative expenses surged by 86.9% to $5.2 million, reflecting increased operational costs [223]. - Cost of revenues decreased by 30.0% to $3.1 million, primarily due to a reduction in units sold, which fell by 3,511 units to 9,989 units [208]. - Cost of revenues decreased by 19.0%, from $14.6 million in 2023 to $11.8 million in 2024, attributed to favorable pricing from suppliers and reduced battery sales volume [221]. Cash Flow and Working Capital - As of December 31, 2024, the company had cash of $1.4 million and working capital of $3.0 million, with net cash used in operating activities amounting to approximately $9.4 million [231]. - Net cash used in operating activities for the nine months ended December 31, 2024, was $9.4 million, attributed to a net loss of $2.0 million and an increase in inventories of $4.0 million [240]. - The company reported net cash provided by financing activities of $12.2 million for the nine months ended December 31, 2024, including net proceeds from the IPO and loan proceeds [244]. - Total outstanding loan principal increased to $7.1 million as of December 31, 2024, with interest expenses for the nine months amounting to $247,550 [238]. Inventory and Accounts Management - Inventories increased significantly to $10.0 million as of December 31, 2024, up from $5.4 million, primarily due to preparations for a new rental business [237]. - The company's accounts payable increased to $1.3 million as of December 31, 2024, with a turnover period rising from 25 days to 31 days [235]. - As of December 31, 2024, the company's accounts receivable was $0.3 million, with a turnover period reduced from 69 days to 62 days [234]. - The inventory allowance for obsolescence was recorded at $936,030 as of December 31, 2024, up from $514,021 [252]. Tax and Compliance - The company operates in multiple tax jurisdictions, including New York, New Jersey, Texas, Florida, California, Washington, D.C., and Canada, which impacts its income tax expenses [253]. - Deferred tax assets and liabilities are measured using enacted tax rates applicable for differences expected to reverse, reflecting a proactive tax strategy [254]. - The company did not record any valuation allowance for deferred tax assets as of December 31, 2024, and March 31, 2024, suggesting confidence in the realization of these assets [255]. - The company follows a two-step process for uncertain tax positions, ensuring that only positions with a greater than 50% likelihood of being sustained are recognized [256]. - The company has not reported any significant unrecognized uncertain tax positions as of December 31, 2024, indicating a stable tax position [257]. - The company’s income tax expense includes penalties and interest related to underpayment, which are classified as income tax expense in the period incurred [257].