Fly-E Group, Inc. 10-Q

Item 5. Other Information . Loan and Security Agreement On August 5, 2024 (the “Effective Date”), the Company, Fly E-Bike, Inc., and Fly EV, Inc. (collectively, the “Borrower”) entered into a loan and security agreement (the “Loan Agreement”) with Peapack-Gladstone Bank (the “Lender”). Pursuant to the Loan Agreement, the Lender made available to the Borrower a $5 million revolving credit facility (the “Revolving Credit”), which the Borrower will use periodically for operating needs and to help facilitate acquisitions. The Loan Agreement has a one-year term. The principal balance of the loan under the Revolving Credit bears interest at a per annum rate equal to the term SOFR plus a spread of 3.50%, with a floor of 5.50%. The Borrower will make interest-only payments quarterly, starting on November 1, 2024. The entire amount of outstanding principal and interest is due on the Revolving Credit Maturity Date, which is August 31, 2025. 44 As security for the payment of the loan, the Borrower granted the Lender a continuing lien on and security interest in all assets of the Borrower, including accounts, chattel paper, documents, instruments, inventory, general intangibles, equipment, fixtures, deposit accounts, goods, letter-of-credit rights, supporting obligations, investment property, commercial tort claims, property in the Lender's possession, additions, and proceeds. The Borrower paid a non-refundable revolving credit closing fee of $20,000 at closing, agreed to pay an unused line fee of 0.25% quarterly, and a late charge of 5% on any payments not made within five days of the due date. Upon an event of default, the Lender may terminate the Revolving Credit, declare the Borrower’s obligations immediately due and payable, and exercise rights under the UCC and other applicable laws, including taking possession of the collateral and selling it. The foregoing description of the Loan Agreement is a summary only and is qualified in all respects by reference to the full text of the Loan Agreement, which is attached as Exhibit 10.1 hereto and incorporated by reference herein. Contract Agreement for App Development On July 5, 2024, DF Technology US Inc ("Developer") and the Company entered into a contract for the development of the GO FLY app, a rental services application for the Company. Mr. Guo, the Company’s CFO and director, owns over 50% of the equity interest in Developer. Under the terms of the agreement, the Developer will design, develop, and deliver the app for a total fee not exceeding $500,000, with an initial payment of $300,000 and the remaining $200,000 to be paid in installments upon the completion of specified milestones. The development commenced on July 5, 2024, with final delivery anticipated by September 5, 2024, subject to any mutually agreed-upon adjustments. Upon receipt of full payment, the Developer will transfer intellectual property rights associated with the development of the app to the Company. Developer has provided a warranty for a period of 36 months from the date of final acceptance. The foregoing description of the contract is a summary only and is qualified in all respects by reference to the full text of the contract agreement, which is attached as Exhibit 10.2 hereto and incorporated by reference herein. Letter Agreement for Consulting Services On April 1, 2023, PJMG LLC ("Consultant") and the Company entered into a contract for consulting services, which includes strategic guidance and support in compliance, financial management, investor relations, and market expansion initiatives. The contract specifies an initial monthly fee of $45,000 after the completion of the Company’s IPO, with a subsequent fee of $15,000 per month, subject to mutually agreed adjustments based on the scope and circumstances of the services provided. Mr. Guo, the Company’s CFO and director, owns more than 50% of the equity interest in Consultant. Either party may terminate this agreement with 30 days' notice to the other party. The foregoing description of the letter agreement is a summary only and is qualified in all respects by reference to the full text of the letter agreement, which is attached as Exhibit 10.3 hereto and incorporated by reference herein. Item 6. Exhibits 3.1* Amended and Restated Articles of Incorporation 10.1*^ Loan and Security Agreement dated as of August 5, 2024, by and among the registrant, Fly-E-Bike Inc., Fly EV, Inc. and Peapack-Gladstone Bank 10.2*^ Contract Agreement dated as of July 5, 2024, by and between the registrant and DF Technology US Inc 10.3* Letter Agreement dated as of April 1, 2023, by and between the registrant and PJMG LLC 31.1* Section 302 Certification of Principal Executive Officer 31.2* Section 302 Certification of Principal Financial Officer 32.1** Section 906 Certification of Principal Executive Officer 32.2** Section 906 Certification of Principal Financial Officer 101.INS Inline XBRL Instance Document. 101.SCH Inline XBRL Taxonomy Extension Schema Document. 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). * Filed herewith ** Furnished herewith ^ The exhibits and schedules to this Exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby agrees to furnish a copy of any omitted schedules to the SEC upon request. 45 SIGNATURES In accordance with the requirements of Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FLY-E GROUP, INC. By: /s/ Zhou Ou Zhou Ou Chief Executive Officer and Director (Principal Executive Officer) August 16, 2024 By: /s/ Ruifeng Guo Ruifeng Guo Chief Financial Officer and Director (Principal Financial and Accounting Officer) August 16, 2024 46