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Item 9A. Controls and Procedures

2025-07-15 compared with 2024-06-28 · 1938 added, 1401 removed, 676 unchanged (83% of the section changed)

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures,

as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

Disclosure controls and procedures are controls and other procedures

designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is

recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

of Disclosure Controls and Procedures

maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

Disclosure controls

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executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

March 31, 2024, we were a privately-owned company, not subject to disclosure controls and internal controls over financial reporting required

by the Exchange Act for public companies.

This annual report on Form 10-K does not include

a report of management’s assessment regarding internal control over financial reporting or an attestation report of our registered

public accounting firm due to a transition period established by rules of the SEC for newly public companies.

management, with the participation of our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our

disclosure controls and procedures as of March 31, 2025.

Based on the evaluation of our disclosure controls and procedures, our Chief

Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31,

2025 due to the material weaknesses in financial reporting as described below.

Annual Report on Internal Control over Financial Reporting

our 10-K for the year ended March 31, 2025, we identified material weaknesses in our internal control over financial reporting.

weaknesses that have been identified in internal control over financial reporting included our lack of (i) sufficient financial reporting

and accounting personnel with appropriate knowledge of generally accepted accounting principles in the United States of America (the

GAAP”) and SEC reporting requirements to properly address complex U.S.

GAAP accounting issues and to prepare and review

our consolidated financial statements and related disclosures to fulfill U.S.

GAAP and SEC financial reporting requirements, (ii) formal

internal control policies and internal independent supervision functions to establish formal risk assessment process and internal control

framework, and (iii) sufficient controls designed and implemented in IT environment and IT general control activities, which are mainly

associated with areas of logical access management, change management, computer operation, service organization management as well as

cyber security management.

To remediate the material weaknesses, we have engaged a third party consultant to perform internal review

and assist us to set up more reliable internal control processes.

The consultant commenced work in February 2025.

We have begun organizing

regular training programs for our accounting personnel, with a focus on U.S.

GAAP and SEC reporting requirements, in order to improve

the competence and awareness of our finance team.

In addition, we plan to enhance our IT infrastructure by outsourcing our IT department

to a provider to manage PC operations and system monitoring.

Furthermore, we are developing and plan to implement an enterprise resource

planning system to streamline sales, inventory, financial reporting, and order management.

We will devote resources to remediate these

material weaknesses as we grow and such resources required for implementing proper internal controls for financial reporting are available.

have performed testing to evaluate the operating effectiveness of these remediation measures.

Based on the results of our testing, we

concluded that these material weaknesses had not been fully remediated as of March 31, 2025.

Accordingly, we continue to consider these

material weaknesses to be ongoing as of that date.

of March 31, 2025, we believe that our internal controls over financial reporting were not effective in providing reasonable assurance

regarding the reliability of our financial reporting due to the material weaknesses identified above.

This annual report on Form

10-K does not include an attestation report of our registered public accounting firm.

Changes in Internal Control over Financial

Other than the additional

controls added to the revenue process, there was no change in our internal control over financial reporting that occurred during the

fourth quarter of March 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over

financial reporting.

Our disclosure controls and

procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving the desired control

Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments

and assumptions and cannot provide absolute assurance that its objectives will be met.

In addition, the design of disclosure controls

and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating

the benefits of possible controls and procedures relative to their costs.

Similarly, an evaluation of controls cannot provide absolute

assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been

Other Information

We have adopted an insider trading policy.

insider trading policy is filed as an exhibit to this annual report and is incorporated herein by

During the fourth quarter of the year ended March

31, 2024, we were a privately owned company and disclosure required by Item 9B was not applicable.

We have adopted an insider

trading policy.

Our insider trading policy is filed as an exhibit to this annual report and is

incorporated herein by reference.

Disclosure Regarding Foreign Jurisdiction

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to our directors and executive officers:

Zhou (Andy) Ou

Chairman of the Board and Chief Executive Officer

Ruifeng (Steven) Guo

Director and Chief Financial Officer

Rui (Ricky) Feng

Chief Operating Officer

Ke (Simon) Zhang

Chief Human Resource Officer

Zanfeng Zhang

Set forth below is biographical information about

each of the individuals named in the tables above:

Zhou (Andy) Ou, Chairman of the Board and

Chief Executive Officer.

Ou founded Fly E-Bike in 2018 and has since served as our Chairman of

the Board and Chief Executive Officer (“CEO”).

each of the individuals named in the table above:

Zhou Ou, Founder, Chairman of the Board

and Chief Executive Officer.

Ou founded Fly E-Bike in 2018 and has since served as our Chairman of the Board and Chief

Executive Officer (“CEO”).

Before founding Fly E-Bike, Mr.

Ou operated a motorcycle repair business

for over eight years, and previously held a managerial position at a food delivery company.

Ou operated a motorcycle repair business for over eight years,

and previously held a managerial position at a food delivery company.

We believe that Mr.

experience in the motorcycle industry and his understanding of the delivery industry, combined with his tenure at our company, qualifies

him to serve as our Chairman of the Board.

Ruifeng (Steven) Guo, Director and Chief

Financial Officer.

Guo joined our company as a tax and financial advisor in March 2020 and

has been serving as our Chief Financial Officer (“CFO”) since December 2022 and our director since September 1, 2023.

He is currently a partner at DGLG Accounting and Tax LLC, a U.S.

financial consulting firm, where he has been working since May 2020,

and he is currently a partner at DFT since December 2023.

Additionally, he is the managing partner at SJ International Development, a

New York based real estate management company, since October 2020.

Guo is also the managing partner at PJMG LLC, a

New York based consulting company, since June 2019.

Prior to that, Mr.

Guo worked as a senior business manager at Xinyuan

Real Estate Co., Ltd.

from April 2018 to April 2020.

Between 2013 and 2017, Mr.

Guo worked as an associate and senior

auditor at three auditing firms, including Friedman LLP, Marcum LLP and Janover LLC.

Guo obtained his Bachelor of Economy

from Beijing International Studies University in 2010 and his MBA in Accounting from Hofstra University in 2012.

Guo was selected

to serve as a member of our board of directors because of his senior-level experience in the financial services industry and his extensive

knowledge of our business and industry.

Rui (Ricky) Feng, Chief Operating Officer.

Ou’s prior experience in the motorcycle

industry and his understanding of the delivery industry, combined with his tenure at our company, qualifies him to serve as our Chairman

of the Board.

Shiwen Feng, Director and Chief Financial

Feng has served as our Chief Financial Officer and a director since November 2024.

Feng is an experienced

financial professional with a background in corporate finance, corporate tax management, and project oversight.

From October 2021

to October 2024, Ms.

Feng served as the manager at PJMG LLC, a consulting services company, where she was responsible for overseeing

financial planning, managing corporate structuring, and ensuring compliance with financial regulations.

Prior to that, from September 2019

to July 2021, Ms.

Feng worked at DGLG Accounting & Tax LLC, an accounting and financial consulting company, first as a

staff member assisting with corporate formations, tax compliance, and payroll management, and later as a manager, focusing on financial

reporting, monthly bookkeeping, and corporate tax filings.

She earned her Master’s degree in Accounting from the Frank G.

School of Business at Hofstra University in 2020 and her Bachelor’s degree in Accounting from Henan University in China in 2019.

Feng was selected to serve as a member of our board of directors because of her experience in the financial services industry.

Rui Feng, Chief Operating Officer.

joined us as a retail store manager in 2018 and was responsible for overseeing our supply chain, implementing effective customer strategies,

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owned and operated a restaurant for four years, which provided him with valuable experience in managing a business.

Ke (Simon) Zhang, Chief Human Resource Officer.

has also been serving as our Chief Human Resource Officer since December 2022.

Zhang previously served as our director and resigned

from this position on September 1, 2023.

He joined us as a retail store manager in 2018, where he was responsible for overseeing various

HR functions, including recruiting, employee training and development and managing our benefits system.

Ke Zhang, Chief Human Resource Officer.

Zhang has served as our Chief Human Resource Officer since December 2022.

Zhang previously served as our

director and resigned from this position on September 1, 2023.

He joined us as a retail store manager in 2018, where he was responsible

for overseeing various HR functions, including recruiting, employee training and development and managing our benefits system.

Bin Wang, Director.

served as a director on our board of directors since the closing of the IPO.

Wang has over 30 years of management experience in the

financial industry.

He currently serves as the Managing Director of Eon Capital International Ltd, a Hong Kong corporate advisory service

He has also been a member of the board of directors of Maison Solutions Inc., a Nasdaq-listed company, since 2023.

from 2018 to 2020, Mr.

has served as a director since June 2024.

Wang has over 30 years of management experience in the financial industry.

He currently serves as the Managing Director of Eon Capital International Ltd, a Hong Kong corporate advisory service company.

has also been a member of the board of directors of Maison Solutions Inc., a Nasdaq-listed company, since 2023.

Previously, from 2018

Wang was the Chairman and CEO of Alberton Acquisition Corp., a Nasdaq-listed company.

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SKYC), participating in the company’s public listing process.

to 2018, Bin has provided his corporate advisory services to dozens of corporation clients in the US and Asia.

Bin began his financial

career at Chemical Bank in 1994 when he served as a commercial banking manager for the bank’s domestic Asian market.

to 2000, he served as Vice President and Team Leader of Chase International Financial Services, to promote the bank’s business

in Asia-Pacific region.

After Chase merged with JPMorgan in 2000, Bin continued to work at JPMorgan Chase until late 2006, playing a

wide range of management roles in the development and growth of international business.

Wang graduated from Northwestern Polytechnic

University in 1980, obtained his Master of Science degree in Mechanical Engineering from Xi’an Jiaotong University in 1983, and

earned his Master of Arts degree in economics from Illinois State University in 1992.

Wang was selected to serve as a member of our

board of directors because of his extensive senior-level experience in the financial services industry and his profound knowledge of

our business and the industry as a whole.

Feng, Director.

Feng has served as a director on our board

of directors since the closing of the IPO .

Since August 2015, Mr.

Feng has held the position of executive director at Si Fang Yu Feng Investment Co., Ltd., a Chinese investment management company.

June 2009 to June 2021, he served as the chairman of the board of directors at Beijing Wan Tong Li Ti Zhi Cheng Investment Co., Ltd.,

a Chinese investment management company.

Additionally, Mr.

Feng currently holds the position of an independent director at three public

companies listed on the Shanghai Stock Exchange and Shenzhen Stock Exchange.

These companies include Bank of Xi’an Co., Ltd., Shanghai

Xinnanyang Only Education and Technology Co., Ltd., and Bona Film Group Co., Ltd.

Feng received his bachelor’s degree in political

economy from Northwest University (China) in 1982.

Feng was selected to serve as a member of our board of directors because of his

extensive senior-level management experience of public companies, his board experience and his extensive knowledge of our business and

Jacobs, Director.

Jacobs has served as a director on our

board of directors since the closing of the IPO .

Jacobs has over

40 years of experience as a corporate and securities attorney, investment banker, business and financial advisor and senior executive

of both private and public companies.

From 2007 to 2018, Mr.

Wang provided corporate advisory services to dozens of corporate clients in the US and Asia.

began his financial career at Chemical Bank in 1994 when he served as a commercial banking manager for the bank’s Asian market.

From 1996 to 2000, he served as Vice President and Team Leader of Chase International Financial Services, to promote the bank’s

business in Asia-Pacific region.

After Chase merged with JPMorgan in 2000, Mr.

Wang continued to work at JPMorgan Chase until late

2006, playing a wide range of management roles in the development and growth of international business.

Wang graduated from

Northwestern Polytechnic University in 1980, obtained his Master of Science degree in Mechanical Engineering from Xi’an Jiaotong

University in 1983, and earned his Master of Arts degree in economics from Illinois State University in 1992.

Wang was selected

to serve as a member of our board of directors because of his extensive senior-level management experience in the financial services

industry and his profound knowledge of our business and the industry as a whole.

Lun Feng, Director.

has served as a director since June 2024.

Since August 2015, Mr.

Jacobs has been serving as President at Worthy Lending, LLC.

he has been serving as Executive Vice President, Treasurer and Chief Strategy Officer of Worthy Financial, Inc.

since January 2016.

Jacobs currently serves as President of the Worthy Lending V subsidiary.

He currently also serves as Executive Vice President, Chief Operating

Officer, and a member of the board of directors of Worthy Financial, Inc.’s wholly owned subsidiaries, including Worthy Peer Capital,

Inc., Worthy Peer Capital II, Inc., Worthy Community Bonds, Inc., Worthy Community Bonds II, Inc.

and Worthy Property Bonds, Inc., and

as President of their respective wholly owned loan and investment subsidiaries, all since their respective dates of organization.

2016 to 2018 Mr.

Jacobs was the Founder and President of CorpFin Management Group where he was focused on business development, strategic

planning, and corporate development.

From September 2014 to December 2015, Mr.

Jacobs was associated with ViewTrade Securities, a FINRA

registered broker-dealer where he was focused on advisory and corporate services.

Prior to that time and for more than 30 years, Mr.

was associated with several FINRA registered broker-dealers including Ladenburg Thalman & Co.

Inc., Josephthal & Company, and

Capital Growth Securities.

Jacobs received his bachelor’s degree from Franklin and Marshall College in 1963 and his law degree

from Columbia University in 1966.

Jacobs was selected to serve as a member of our board of directors because of his extensive experience

in the investment and financial services industry.

Information about the Board of Directors

Our board of directors oversees our business and

affairs and monitors the performance of management.

In accordance with corporate governance principles, the board does not involve itself

in day-to-day operations.

The directors keep themselves informed through discussions with our chief executive officer and other key executives,

by reading the reports and other materials that we send them, and by participating in board and committee meetings.

Directors hold office

until their successors have been elected and qualified or until he or she resigns or have been removed or disqualified.

Feng has held the position of executive director at Si

Fang Yu Feng Investment Co., Ltd., a Chinese investment management company.

From June 2009 to June 2021, he served as the chairman

of the board of directors at Beijing Wan Tong Li Ti Zhi Cheng Investment Co., Ltd., a Chinese investment management company.

Additionally,

Feng currently serves as an independent director at three public companies listed on the Shanghai Stock Exchange and Shenzhen

Stock Exchange.

These companies include Bank of Xi’an Co., Ltd., Shanghai Xinnanyang Only Education and Technology Co., Ltd., and

Bona Film Group Co., Ltd.

Feng received his bachelor’s degree in political economy from Northwest University (China) in

Feng was selected to serve as a member of our board of directors because of his extensive senior-level management experience

of public companies, his board experience and his extensive knowledge of our business and industry.

Zanfeng Zhang, Director.

has served as a director since August 2024.

Zhang has over 25 years of experience in finance and investment management.

Since November 2017, he has served as Managing Director at IDG Capital, an investment and asset management company, where he oversees

post-investment management and risk control.

From August 2014 to July 2017, Mr.

Zhang co-founded and served as the Chief

Financial Officer of Beijing Jiufang Rugao Information Technology Co., Ltd., an internet startup providing community-based online-to-offline

(O2O) life services and a fresh produce B2C (business-to-consumer) platform, where he oversaw financing activities.

Prior to that, he

co-founded and served as Chief Operating Officer of Beijing Panteng Technology Co., Ltd., a smart hardware startup, from September 2013

to August 2014, where he secured early-stage funding and led its market expansion.

Earlier in his career, Mr.

Zhang held senior

financial roles at Ruijing Hengtong (Beijing) Investment Consulting Co., Ltd.

from July 2008 to August 2013, and at Peugeot

China Co., Ltd.

from June 2003 to July 2008.

Zhang holds a Master’s degree in Business Management from Paris

1 Panthéon-Sorbonne University and a Bachelor’s degree in Accounting from East China Jiaotong University.

was selected to serve on the Board due to his extensive expertise in finance and investment management.

Information about the Board of

Our board of directors oversees

our business and affairs and monitors the performance of management.

In accordance with corporate governance principles, the board does

not involve itself in day-to-day operations.

The directors keep themselves informed through discussions with our CEO and other key

executives, by reading the reports and other materials that we send them, and by participating in board and committee meetings.

hold office until their successors have been elected and qualified or until he or she resigns or have been removed or disqualified.

Our board of directors are

divided into three classes of directors, with the classes as nearly equal in number as possible, and with the directors serving three-year

The term of office of the Class I director, consisting of Lun Feng, will expire at our 2025 annual meeting of stockholders.

term of office of the Class II directors, consisting of Zanfeng Zhang and Bin Wang, will expire at our 2026 annual meeting of stockholders.

The term of office of the Class III directors, consisting of Zhou Ou and Shiwen Feng, will expire at our 2027 annual meeting of stockholders.

As a result, approximately one-third of our board of directors will be elected each year.

The classification of directors will have the

effect of making it more difficult for stockholders to change the composition of our board of directors.

Our amended and restated

bylaws also provide that, subject to any rights of holders of preferred stock to elect additional directors under specified circumstances,

the number of directors will be fixed exclusively pursuant to a resolution adopted by our board of directors.

Committees of the Board of Directors

We established an Audit Committee, a Compensation

Committee and a Nominating and Corporate Governance Committee.

We have adopted a charter for each of the three committees.

Each committee’s

members and functions are described below.

The rules of the Nasdaq Stock Market, or the Nasdaq Rules, require a majority of a listed company’s

board of directors to be composed of independent directors within one year of listing.

In addition, the Nasdaq Rules require that, subject

to specified exceptions, each member of a listed company’s audit, compensation and nominating and governance committees be independent.

Under the Nasdaq Rules, a director will only qualify as an independent director if, in the opinion of the board of directors, that person

does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a

The Nasdaq Rules also require that audit committee members satisfy independence criteria set forth in Rule 10A-3 under

the Exchange Act.

In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed

company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee,

accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries

or otherwise be an affiliated person of the listed company or any of its subsidiaries.

In considering the independence of compensation

committee members, the Nasdaq Rules require that the board of directors if a listed company must consider additional factors relevant

to the duties of a compensation committee member, including the source of any compensation the company pays to the director and any affiliations

with the company.

We have established an Audit

Committee, a Compensation Committee and a Nominating and Corporate Governance Committee.

We have adopted a charter for each of the three

Each committee’s members and functions are described below.

Audit Committee.

Audit Committee consists of three independent directors.

The members of the Audit Committee are Bin Wang, Lun Feng and Alan Jacobs, with

Wang serving as the committee chair.

Our Audit Committee

consists of three independent directors.

The members of the Audit Committee are Bin Wang, Lun Feng and Zanfeng Zhang, with Mr.

serving as the committee chair.

The Audit Committee consists exclusively of directors who are financially literate.

is considered an “audit committee financial expert” as defined by the SEC’s rules and regulations.

considered an “audit committee financial expert” as defined by the SEC’s rules and regulations.

The Audit Committee responsibilities

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Compensation Committee.

Compensation Committee consists of three independent directors.

The members of the Compensation Committee are Lun Feng, Bin Wang and Alan

Jacobs, with Mr.

Our Compensation

Committee consists of three independent directors.

The members of the Compensation Committee are Lun Feng, Bin Wang and Zanfeng Zhang,

Feng serving as the committee chair.

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The members of the Nominating and Governance Committee are

Alan Jacobs, Bin Wang and Lun Feng, with Mr.

Jacobs serving as the committee chair.

The Nominating and Governance Committee’s responsibilities

Zanfeng Zhang, Bin Wang and Lun Feng, with Mr.

Zhang serving as the committee chair.

The Nominating and Governance Committee’s

responsibilities include:

● recommending persons for election as directors by the stockholders;

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based upon developments, trends, and best practices.

The Nominating and Governance Committee will consider

stockholder recommendations for candidates for the board of directors.

The Nominating and Governance

Committee will consider stockholder recommendations for candidates for the board of directors.

Involvement in Certain Legal Proceedings

None of our directors and executive officers have

been involved in any of the following events during the past ten years:

any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities;

being found by a court of competent jurisdiction in a civil action, the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

being subject of, or a party to, any federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity;

being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Code of Business Conduct

We have adopted a

written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer,

None of our directors and

executive officers have been involved in any of the following events during the past ten years:

any bankruptcy petition filed by or against such person or any business

of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to

any conviction in a criminal proceeding or being subject to a pending

criminal proceeding (excluding traffic violations and other minor offenses);

being subject to any order, judgment, or decree, not subsequently reversed,

suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting

his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking

or securities activities;

being found by a court of competent jurisdiction in a civil action,

the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment

has not been reversed, suspended, or vacated;

being subject of, or a party to, any federal or state judicial or administrative

order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any federal

or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies,

or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity;

being subject of or party to any sanction or order, not subsequently

reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association,

entity or organization that has disciplinary authority over its members or persons associated with a member.

Code of Business Conduct and Ethics

We have adopted a written

code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer,

principal financial officer, principal accounting officer or controller, or persons performing similar functions.

A copy of the code is

made available in the Corporate Governance section of our website, which is located at flyebike.com.

Our stockholders are also

able to review these documents by accessing our public filings at the SEC’s website at www.sec.gov .

we make any substantive amendments to, or grant any waivers from, the code of business conduct and ethics for any officer or director,

we will disclose the nature of such amendment or waiver on our website or in a current report on Form 8-K filed with the SEC.

A copy of the code

is made available in the Corporate Governance section of our website, which is located at flyebike.com.

Our stockholders are also able

to review these documents by accessing our public filings at the SEC’s website at www.sec.gov .

If we make any substantive

amendments to, or grant any waivers from, the code of business conduct and ethics for any officer or director, we will disclose the nature

of such amendment or waiver on our website or in a current report on Form 8-K filed with the SEC.

Trading Policies

On May 3, 2024, we adopted

insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our securities by directors, officers

and employees, which are reasonably designed to promote compliance with insider trading laws, rules and regulations, and applicable Nasdaq

listing standards (the “Insider Trading Policy”).

May 3, 2024, we adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our securities

by directors, officers and employees, which are reasonably designed to promote compliance with insider trading laws, rules and regulations,

and applicable Nasdaq listing standards (the “Insider Trading Policy”).

Clawback Policy

Our board of directors has adopted

a clawback policy that covers our executive officers, who are defined as our chief executive officer, president, chief financial officer,

principal accounting officer (or the controller, if no such accounting officer exists), any vice-president in charge of a significant

principal business unit, division, or function (such as sales, administration, or finance), and any other officer or person who performs

a policy-making function.

This clawback policy pertains to incentive-based

compensation, which includes any compensation that is granted, earned, or vested wholly or in part based on the achievement of a financial

reporting measure.

It mandates the recovery of such compensation from an executive officer in cases where we must prepare an accounting

restatement due to material noncompliance with U.S.

financial reporting requirements under the securities laws.

This includes any necessary

restatement to correct an error in previously issued financial statements that is material to those statements, or that would result in

a material misstatement if the error were corrected in the current period or left uncorrected.

The Compensation Committee will make

determinations regarding “materiality” for the purposes of this policy.

The incentive-based compensation eligible for

recovery under this policy includes compensation received during the three completed fiscal years immediately preceding the date we are

required to prepare an accounting restatement, as outlined above.

This applies provided that the individual served as an executive officer

at any time during the performance period relevant to the incentive-based compensation.

Section 16 Compliance

Section 16(a) of the Exchange Act requires the

Company’s officers, directors and persons who beneficially own more than ten percent of its common stock to file reports of ownership

and changes in ownership with the SEC.

These reporting persons are also required to furnish the Company with copies of all Section 16(a)

forms they file.

Based solely on our review of such forms furnished to us, we believe that all reports applicable to our executive officers,

directors and greater than ten percent beneficial owners were filed in a timely manner in accordance with Section 16(a) of the Exchange

directors has adopted a clawback policy that covers our executive officers, who are defined as our chief executive officer, president,

chief financial officer, principal accounting officer (or the controller, if no such accounting officer exists), any vice-president in

charge of a significant principal business unit, division, or function (such as sales, administration, or finance), and any other officer

or person who performs a policy-making function.

This clawback

policy pertains to incentive-based compensation, which includes any compensation that is granted, earned, or vested wholly or in part

based on the achievement of a financial reporting measure.

It mandates the recovery of such compensation from an executive officer in

cases where we must prepare an accounting restatement due to material noncompliance with U.S.

financial reporting requirements under

the securities laws.

This includes any necessary restatement to correct an error in previously issued financial statements that is material

to those statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected.

The Compensation

Committee will make determinations regarding “materiality” for the purposes of this policy.

The incentive-based compensation

eligible for recovery under this policy includes compensation received during the three completed fiscal years immediately preceding

the date we are required to prepare an accounting restatement, as outlined above.

This applies provided that the individual served as

an executive officer at any time during the performance period relevant to the incentive-based compensation.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange

Act requires the Company’s officers, directors and persons who beneficially own more than ten percent of its common stock to file

reports of ownership and changes in ownership with the SEC.

These reporting persons are also required to furnish the Company with copies

of all Section 16(a) forms they file.

Based solely on our review of such forms furnished to us, we believe that the applicable reporting

requirements of Section 16(a) have been satisfied.

Executive Compensation

The following table shows the compensation awarded

to or earned during the years ended March 31, 2024 and 2023 by our chief executive officer.

Other than as listed below, we did not have

any officers that received more than $100,000 in compensation during the years ended March 31, 2024 and 2023.

Summary Compensation Table

following table shows the compensation awarded to or earned during the years ended March 31, 2025 and 2024 by our chief executive

Other than as listed below, we did not have any officers that received more than $100,000 in compensation during the years

ended March 31, 2025 and 2024.

The person listed in the following table is referred to herein as the “named executive officer.”

Name and principal position

Option Awards

Chief Executive Officer

Outstanding Equity Awards at Fiscal Year End

Employment Agreements

Disclosure to Summary Compensation Table

Zhou Ou, Chief Executive Officer

Ou has entered into an employment agreement

with one of our subsidiaries, FLYEBIKE Inc, dated April 1, 2023.

The employment agreement provides that Mr.

Zhou Ou will serve as the

Chief Executive Officer of the Company and will receive a monthly base salary of $8,333.

He will also be entitled to reimbursement for

authorized and reasonable expenses.

Ou has entered

into an employment agreement with one of our subsidiaries, FLYEBIKE Inc, dated April 1, 2023.

Under the agreement, Mr.

Ou serves as the Chief Executive Officer of the Company and receives a monthly base salary of $8,333.

He is also entitled to reimbursement

for authorized and reasonable business expenses.

The agreement allows for at-will termination by either party.

Ou’s employment is terminated

due to death or disability, he or his estate will receive salary and benefits through the termination date.

The Company may terminate

the agreement for cause, releasing it from all further obligations except for accrued salary and benefits through the termination date.

employment is terminated due to death or disability, he or his estate will receive salary and benefits through the termination date.

The Company may terminate the agreement for cause, releasing it from all further obligations except for accrued salary and benefits through

the termination date.

“Cause” includes failure or neglect by Mr.

Ou to perform duties, disobedience to orders, misconduct such as misappropriation

of funds, personal profit from Company transactions, misrepresentation, legal violations, acts involving moral turpitude or unethical

conduct, disloyalty including aiding a competitor, failure to devote full-time efforts to the Company, not working exclusively for the

Company, non-cooperation in investigations, breaches of the employment agreement or the Company rules, and any other act of misconduct

Ou to perform duties, disobedience to orders, misconduct

such as misappropriation of funds, personal profit from Company transactions, misrepresentation, legal violations, acts involving moral

turpitude or unethical conduct, disloyalty including aiding a competitor, failure to devote full-time efforts to the Company, not working

exclusively for the Company, non-cooperation in investigations, breaches of the employment agreement or the Company rules, and any other

act of misconduct or omission.

The agreement includes covenants for non-disclosure, non-solicitation, and non-competition.

For two years post-termination,

Ou agrees not to solicit the Company’s customers or engage in competing business activities within New York State.

Ruifeng (Steven) Guo, Chief Financial Officer

Guo has entered into an employment agreement

with one of our subsidiaries, FLYEBIKE Inc, dated April 1, 2023.

The employment agreement provides that Mr.

Ruifeng Guo will serve as

the Chief Financial Officer of the Company and will receive a monthly base salary of $5,000.

He will also be entitled to reimbursement

For two years

post-termination, Mr.

Ou agrees not to solicit the Company’s customers or engage in competing business activities within New York

In order to support our

operations and allocate more resources towards our development, Mr.

Ou received compensation at the level of a store manager for

the years ended March 31, 2025 and 2024.

Shiwen Feng, Chief Financial Officer

entered into an employment agreement with the Company, dated November 7, 2024.

Under the agreement, Ms.

Feng serves as the

Chief Financial Officer of the Company and receives a monthly base salary of $ $6,667.

She will also be entitled to reimbursement

for authorized and reasonable expenses.

The agreement allows for at-will termination by either party.

Guo’s employment is

terminated due to death or disability, he or his estate will receive salary and benefits through the termination date.

The Company may

terminate the agreement for cause, releasing it from all further obligations except for accrued salary and benefits through the termination

“Cause” includes failure or neglect by Mr.

Guo to perform duties, disobedience to orders, misconduct such as misappropriation

of funds, personal profit from Company transactions, misrepresentation, legal violations, acts involving moral turpitude or unethical

conduct, disloyalty including aiding a competitor, failure to devote full-time efforts to the Company, not working exclusively for the

Company, non-cooperation in investigations, breaches of the employment agreement or the Company rules, and any other act of misconduct

The agreement includes covenants for non-disclosure, non-solicitation, and non-competition.

For two years post-termination,

Guo agrees not to solicit the Company’s customers or engage in competing business activities within New York State.

The agreement allows for at-will termination by either party, provided, however, a minimum

of two weeks’ advance written notice is required in the event of resignation by Ms.

Feng’s employment

is terminated due to death or disability, she or her estate will receive salary and benefits through the termination date.

Company may terminate the agreement for cause, releasing it from all further obligations except for accrued salary and benefits

through the termination date.

“Cause” includes failure or neglect by Ms.

Feng to perform duties, disobedience to orders,

misconduct such as misappropriation of funds, personal profit from Company transactions, misrepresentation, legal violations, acts

involving moral turpitude or unethical conduct, disloyalty including aiding a competitor, failure to devote full-time efforts to the

Company, not working exclusively for the Company, non-cooperation in investigations, breaches of the employment agreement or the

Company rules, and any other act of misconduct or omission.

The agreement includes covenants for non-disclosure, non-solicitation,

and non-competition.

For two years post-termination, Ms.

Feng agrees not to solicit the Company’s customers or engage in

competing business activities within New York State.

Feng will not receive any additional compensation as a director in

addition to her compensation as the Chief Financial Officer of the Company.

Outstanding Option Awards

As of March 31, 2025,

there were no option or stock awards outstanding.

Employee Benefit Plans

2024 Omnibus Incentive Plan

We have adopted the 2024 Plan at the closing of

the IPO (the “Effective Date”).

The number of shares of our common stock available for issuance under the 2024 Plan is 2,500,000

(the “Share Limit”).

We have not issued any grants or awards under the 2024 Plan.

The following is a summary of the material

terms of the 2024 Plan.

On May 3, 2024, our

Board approved the Fly-E Group Inc.

2024 Omnibus Incentive Plan, subject to stockholder approval.

On February 10, 2025, our

Board approved Amendment No.

1 of the plan (“Amendment No.

1”) to increase the number of shares available for grant under

the plan and add a provision providing for an automatic increase to the plan’s share reserve every year, commencing on April 1,

2026, and continuing on the first day of each of the Company’s fiscal years through the tenth anniversary of the plan’s effective

date (the 2024 Omnibus Incentive Plan, as amended by Amendment No.

1, the “2024 Plan”).

On March 10, 2025, the

Company’s stockholders approved and adopted the 2024 Plan.

The following is a summary of the material terms

of the 2024 Plan.

Plan Administration

The 2024 Plan is administered by our Compensation

Our board of directors retains the authority under the 2024 Plan to exercise any or all of the powers and authorities related

to the administration and implementation of the 2024 Plan.

The 2024 Plan will be administered

by our Compensation Committee.

Our board of directors will retain the authority under the 2024 Plan to exercise any or all of the powers

and authorities related to the administration and implementation of the 2024 Plan.

Award Eligibility

Awards under the 2024 Plan may be made to our

or any of our affiliates’ employees, officers and directors, as well as to consultants and advisors currently providing services

to us or any of our affiliates at the time of such award.

Awards under the 2024 Plan

may be made to our or any of our affiliates’ employees, officers and directors, as well as to consultants and advisors currently

providing services to us or any of our affiliates at the time of such award.

As of the date of this annual report, the Company engages

approximately 55 employees, four (4) officers, five (5) directors, and five (5) consultants and advisers.

Shares Subject to the 2024 Plan

Subject to adjustment in

accordance with the terms of the 2024 Plan, the number of shares of our common stock available for issuance under the 2024 Plan is the

sum of (A) 740,000, plus (B) an increase commencing on April 1, 2026, and continuing annually on each anniversary thereof until

the tenth anniversary of the plan effective date, equal to the lesser of (i) 8% of the total number of all classes of the Company’s

common stock outstanding on the last day of the immediately preceding fiscal year and (ii) such smaller number of shares as determined

by the Board or the Committee (the “Share Limit”).

Reversion of Shares

If any shares covered by an award are not purchased

or are forfeited or expire, or if any award otherwise terminates without delivery of any shares subject to the award or is settled in

cash in lieu of shares, then the number of shares counted against the Share Limit with respect to such award will, to the extent of any

such forfeiture, termination, expiration or settlement, again be available for issuance under the 2024 Plan.

The 2024 Plan provides for the grant of awards

of stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units, deferred stock units, unrestricted

stock, dividend equivalent rights, and other equity-based awards.

If any shares covered by

an award are not purchased or are forfeited or expire, or if any award otherwise terminates without delivery of any shares subject to

the award or is settled in cash in lieu of shares, then the number of shares counted against the Share Limit with respect to such award

will, to the extent of any such forfeiture, termination, expiration or settlement, again be available for issuance under the 2024 Plan.

The 2024 Plan provides for

the grant of awards of stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units, deferred

stock units, unrestricted stock, dividend equivalent rights, and other equity-based awards.

Stock Options

Stock options granted under the 2024 Plan may

be nonqualified stock options or incentive stock options within the meaning of Section 422 of the Code.

Each option will become vested

and exercisable at such times and under such conditions as our Compensation Committee may approve consistent with the terms of the 2024

No option may be exercisable more than ten years after the option grant date.

Our Compensation Committee may include in the option

agreement provisions specifying the period during which an option may be exercised following termination of the grantee’s service.

The exercise price per share of our common stock

for each option granted under the 2024 Plan may not be less than 100%, or 110% in the case of an incentive stock option granted to a stockholder

who owns more than ten percent of our voting stock, of the fair market value of a share of our common stock on the option grant date,

except in the case of an option granted upon assumption of, or in substitution for, outstanding awards previously granted under a compensatory

plan by a business entity acquired or to be acquired by us or an affiliate of ours or with which we or an affiliate has combined or will

Payment of the exercise price for shares purchased pursuant to the exercise of an option may be made in such forms as are approved

by our Compensation Committee.

These forms may include, in our Compensation Committee’s discretion, cash, cash equivalents, shares

of our common stock and net issuance.

Restricted Stock, Restricted Stock Units, and Deferred

Restricted stock is an award of our common stock

on which vesting restrictions are imposed that subject such shares of our common stock to a substantial risk of forfeiture, as defined

in Section 83 of the Code.

A restricted stock unit is an award that represents a conditional right to receive shares of our common stock

in the future and that may be made subject to the same types of restrictions and risk of forfeiture as restricted stock.

A deferred stock

unit is a restricted stock unit that may be settled at some point in the future at a time or times consistent with the requirements of

Section 409A of the Code.

Stock options granted under

the 2024 Plan may be nonqualified stock options or incentive stock options within the meaning of Section 422 of the Internal Revenue

Code of 1986, as amended (the “Code”).

Each option will become vested and exercisable at such times and under such conditions

as our Compensation Committee may approve consistent with the terms of the 2024 Plan.

No option may be exercisable more than ten years

after the option grant date.

Our Compensation Committee may include in the option agreement provisions specifying the period during which

an option may be exercised following termination of the grantee’s service.

The exercise price per share

of our common stock for each option granted under the 2024 Plan may not be less than 100%, or 110% in the case of an incentive stock

option granted to a stockholder who owns more than ten percent of our voting stock, of the fair market value of a share of our common

stock on the option grant date, except in the case of an option granted upon assumption of, or in substitution for, outstanding awards

previously granted under a compensatory plan by a business entity acquired or to be acquired by us or an affiliate of ours or with which

we or an affiliate has combined or will combine.

Payment of the exercise price for shares purchased pursuant to the exercise of an option

may be made in such forms as are approved by our Compensation Committee.

These forms may include, in our Compensation Committee’s

discretion, cash, cash equivalents, shares of our common stock and net issuance.

Restricted Stock, Restricted Stock

Units, and Deferred Stock Units

Restricted stock is an award

of our common stock on which vesting restrictions are imposed that subject such shares of our common stock to a substantial risk of forfeiture,

as defined in Section 83 of the Code.

A restricted stock unit is an award that represents a conditional right to receive shares

of our common stock in the future and that may be made subject to the same types of restrictions and risk of forfeiture as restricted

A deferred stock unit is a restricted stock unit that may be settled at some point in the future at a time or times consistent

with the requirements of Section 409A of the Code.

Stock Appreciation Rights

A SAR is a right to receive upon exercise, in

the form of common stock, cash or a combination of common stock and cash, the excess of the fair market value of one share of common stock

on the exercise date over the grant price of the SAR.

SARs may be granted in conjunction with all or a part of any option or other award

granted under the 2024 Plan, or without regard to any option or other award.

Upon exercise of a SAR, the holder will be entitled to receive,

in the specified form of consideration, the excess of the fair market value of one share of our common stock on the exercise date over

the exercise price of the SAR, as determined by our Compensation Committee.

The exercise price of a SAR may not be less than the fair

market value of a share of our common stock on the grant date.

A SAR is a right to receive

upon exercise, in the form of common stock, cash or a combination of common stock and cash, the excess of the fair market value of one

share of common stock on the exercise date over the grant price of the SAR.

SARs may be granted in conjunction with all or a part

of any option or other award granted under the 2024 Plan, or without regard to any option or other award.

Upon exercise of a SAR, the

holder will be entitled to receive, in the specified form of consideration, the excess of the fair market value of one share of our common

stock on the exercise date over the exercise price of the SAR, as determined by our Compensation Committee.

The exercise price of a SAR

may not be less than the fair market value of a share of our common stock on the grant date.

Dividend Equivalent Rights

Dividend equivalent rights entitle the grantee

to receive cash, shares of our common stock, or a combination of both equal to the amount of that the grantee would have received had

the grantee held a specified number of shares of our common stock during the period.

Dividend equivalent rights may be granted independently

or in connection with the grant of any equity-based award, except that no dividend equivalent right may be granted in connection

with, or related to an option or SAR.

Dividend equivalent rights

entitle the grantee to receive cash, shares of our common stock, or a combination of both equal to the amount of that the grantee would

have received had the grantee held a specified number of shares of our common stock during the period.

Dividend equivalent rights may

be granted independently or in connection with the grant of any equity-based award, except that no dividend equivalent right may

be granted in connection with, or related to an option or SAR.

Other Equity-Based Awards

Our Compensation Committee may grant other types

of equity-based or equity-related awards in such amounts and subject to such terms and conditions as our Compensation Committee

may determine, including unrestricted stock and dividend equivalent rights which are described in more detail in the 2024 Plan.

Our Compensation Committee

may grant other types of equity-based or equity-related awards in such amounts and subject to such terms and conditions as

our Compensation Committee may determine, including unrestricted stock and dividend equivalent rights which are described in more detail

in the 2024 Plan.

Changes to Capital Structure

In the event of a merger, reorganization, recapitalization,

reclassification, stock split, reverse stock split, spin-off combination of shares, exchange of shares, stock dividend or other distribution

payable in capital stock, or other increase or decrease in such shares effected without the receipt of consideration by us, then the number

and kind of shares for which grants of options and other awards may be made under the 2024 Plan may be adjusted proportionately and accordingly

by our Compensation Committee.

In the event of a merger,

reorganization, recapitalization, reclassification, stock split, reverse stock split, spin-off combination of shares, exchange of

shares, stock dividend or other distribution payable in capital stock, or other increase or decrease in such shares effected without

the receipt of consideration by us, then the number and kind of shares for which grants of options and other awards may be made under

the 2024 Plan may be adjusted proportionately and accordingly by our Compensation Committee.

Change of Control

Except as otherwise provided in the applicable

award agreement, upon the occurrence of a change of control of our Company in which outstanding awards are not being assumed or continued,

all outstanding shares of restricted stock, restricted stock units, deferred stock units, dividend equivalent rights and performance-based awards

will be deemed to have vested and any underlying shares of our common stock will be deemed delivered immediately before the change of

Except as otherwise provided

in the applicable award agreement, upon the occurrence of a change of control of our Company in which outstanding awards are not being

assumed or continued, all outstanding shares of restricted stock, restricted stock units, deferred stock units, dividend equivalent rights

and performance-based awards will be deemed to have vested and any underlying shares of our common stock will be deemed delivered

immediately before the change of control;

and either or both of the following actions shall be taken:

(i) at our Compensation Committee’s discretion, all options

and SARs will become exercisable fifteen days before the change of control (with any exercise of an option or SAR during such fifteen

day period to be contingent upon the consummation of the change of control) and terminate upon the change of control to the extent not

and/or (ii) at our Compensation Committee’s discretion, all options, SARs, shares of restricted stock, restricted stock

units, deferred stock units, dividend equivalent rights and/or performance-based awards will be canceled and cashed out in connection

with the change of control.

Other equity-based awards will be governed by the terms of the applicable award agreement.

If we experience a change of control in which

outstanding awards that are not exercised prior to the change of control will be assumed or continued by the surviving entity, then, except

as otherwise provided in the applicable award agreement, in another agreement with the grantee, or as otherwise set forth in writing,

upon the occurrence of the change of control, the 2024 Plan and the awards granted under the 2024 Plan will continue in the manner and

under the terms so provided in the event of the change of control to the extent that provision is made in writing in connection with such

change of control for the assumption or continuation of such awards, or for the substitution for such awards with new awards, with appropriate

adjustments as to the number of shares (disregarding any consideration that is not common stock) and exercise prices of options and SARs.

(i) at our Compensation Committee’s

discretion, all options and SARs will become exercisable fifteen days before the change of control (with any exercise of an option

or SAR during such fifteen day period to be contingent upon the consummation of the change of control) and terminate upon the change

of control to the extent not exercised;

and/or (ii) at our Compensation Committee’s discretion, all options, SARs, shares

of restricted stock, restricted stock units, deferred stock units, dividend equivalent rights and/or performance-based awards will

be canceled and cashed out in connection with the change of control.

Other equity-based awards will be governed by the terms of

the applicable award agreement.

If we experience a change of

control in which outstanding awards that are not exercised prior to the change of control will be assumed or continued by the surviving

entity, then, except as otherwise provided in the applicable award agreement, in another agreement with the grantee, or as otherwise set

forth in writing, upon the occurrence of the change of control, the 2024 Plan and the awards granted under the 2024 Plan will continue

in the manner and under the terms so provided in the event of the change of control to the extent that provision is made in writing in

connection with such change of control for the assumption or continuation of such awards, or for the substitution for such awards with

new awards, with appropriate adjustments as to the number of shares (disregarding any consideration that is not common stock) and exercise

prices of options and SARs.

Plan Amendment and Termination

The Compensation Committee may adopt, amend and

rescind rules relating to the administration of the 2024 Plan, and our board of directors may amend, suspend, or terminate the 2024 Plan

provided, that, no such amendment or termination will be made that materially and adversely impairs the rights of any participant

with respect to any award granted under the 2024 Plan without the participant’s consent, other than amendments that are necessary

to permit the granting of awards in compliance with applicable laws.

The 2024 Plan will automatically terminate the day before the tenth

(10 th ) anniversary of the Effective Date, unless earlier terminated by our board of directors or in accordance with the terms

of the 2024 Plan.

The Compensation Committee

may adopt, amend and rescind rules relating to the administration of the 2024 Plan, and our board of directors may amend, suspend, or

terminate the 2024 Plan at any time;

provided, that, no such amendment or termination will be made that materially and adversely impairs

the rights of any participant with respect to any award granted under the 2024 Plan without the participant’s consent, other than

amendments that are necessary to permit the granting of awards in compliance with applicable laws.

The 2024 Plan will automatically terminate

the day before the tenth (10 th ) anniversary of the Plan Effective Date, unless earlier terminated by our board of directors

or in accordance with the terms of the 2024 Plan.

New Plan Benefits

All awards to be made under

the 2024 Plan are discretionary, subject to the terms of the 2024 Plan.

The benefits and amounts that will be received or allocated under

the 2024 Plan are generally not determinable at this time.

Director Compensation

1 unchanged sentence

to the compensation paid to our directors in the year ended March 31, 2025:

Alan Jacobs (1)

Ruifeng (Steven) Guo (3)

(1) The appointment of our independent directors took effect upon

the effectiveness of the registration statement as of May 14, 2024 and therefore they did not receive any compensation for the year ended

March 31, 2024.

Ou does not receive any additional compensation as a director

in addition to his compensation disclosed in the Summary Compensation Table.

Guo receives $5,000 per month for serving as Chief Financial Officer

of the Company.

Guo does not receive any additional compensation as a director in addition to his compensation disclosed in the Summary

Compensation Table.

Zanfeng Zhang

Shiwen Feng (3)

Ou does not receive any additional compensation as a director in addition to his compensation disclosed in the Summary Compensation Table.

Feng receives $6,667 per month for serving as Chief Financial Officer of the Company.

Feng does not receive any additional compensation as a director.

Director Agreements

Each of the Company’s independent directors,

Bin Wang, Lun Feng and Alan Jacobs, has entered into an Independent Director Agreement (each, an “Independent Director Agreement”).

Under the Independent Director Agreement between us and each of our independent directors, each independent director is entitled to an

annual cash fee of $50,000.

We will also reimburse each independent director

for pre-approved reasonable business-related expenses incurred in good faith in connection with the performance of the director’s

duties for us.

As also required under each Independent Director Agreement, we have separately entered into a standard indemnification

agreement with each of our directors, the term of which began on the date of the director’s appointment.

Each of the Company’s

independent directors, Bin Wang, Lun Feng and Zanfeng Zhang, has entered into an Independent Director Agreement (each, an “Independent

Director Agreement”).

Under the Independent Director Agreement between us and each of our independent directors, Mr.

is entitled to an annual cash fee of $30,000, Mr.

Feng each is entitled to an annual cash fee of $50,000.

We will also reimburse each

independent director for pre-approved reasonable business-related expenses incurred in good faith in connection with the performance of

the director’s duties for us.

As also required under each Independent Director Agreement, we have separately entered into a standard

indemnification agreement with each of our directors, the term of which began on the date of the director’s appointment.

Security Ownership of Certain Beneficial

Owner and Management and Related Stockholder Matters

The following table sets forth information with respect to the beneficial

ownership of our common stock as of June 27, 2024 by:

The following table sets forth

information with respect to the beneficial ownership of our common stock as of July 15, 2025 by:

each person known to us to beneficially own 5% or more of our common stock;

2 unchanged sentences

all officers and directors as a group.

All information with respect to beneficial ownership has been furnished

by the respective 5% or more stockholders, directors or executive officers, as the case may be.

Each person is deemed to own beneficially

shares of common stock that are issuable upon exercise of options, warrants or upon conversion of convertible securities if they are exercisable

or convertible within 60 days of June 27, 2024.

Except as otherwise indicated each person has the sole power to vote and dispose of all

shares of common stock listed opposite his or her name.

Unless otherwise noted, the mailing address of each listed beneficial owner is

c/o Fly-E Group, Inc., 136-40 39 th Avenue, Flushing, NY 11354.

All information with respect

to beneficial ownership has been furnished by the respective 5% or more stockholders, directors or executive officers, as the case may

Each person is deemed to own beneficially shares of common stock that are issuable upon exercise of options, warrants or upon conversion

of convertible securities if they are exercisable or convertible within 60 days of July 15, 2025.

Except as otherwise indicated each person

has the sole power to vote and dispose of all shares of common stock listed opposite his or her name.

Unless otherwise noted, the mailing

address of each listed beneficial owner is c/o Fly-E Group, Inc., 136-40 39 th Avenue, Flushing, NY 11354.

Name and address of beneficial owner

Executive Officers and Directors

Zanfeng Zhang

Directors and Officers as a group (seven persons)

1 unchanged sentence

Compensation Plans

We have adopted the 2024 Plan in order to

grant equity-based and other incentive awards to our officers, employees, directors, consultants and advisers.

We have adopted the 2024 Plan

in order to grant equity-based and other incentive awards to our officers, employees, directors, consultants and advisers.

There are 740,000

shares of common stock reserved for future issuance under the 2024 Plan.

We have not issued any grants or awards under the

We have not issued any grants or awards under the 2024 Plan.

Certain Relationships and Related

Transactions, and Director Independence

Except as set forth below, during our last two

fiscal years, we have not entered into any material transactions or series of transactions that would be considered material in which

any director or executive officer or beneficial owner of 5% or more of any class of our capital stock, or any immediate family member

of any of the preceding persons, had a direct or indirect material interest:

From April 1, 2022 to March 31, 2024, our Chairman and CEO, Mr.

provided financial support to the Company by advancing funds and making various payments on behalf of the Company totaling $3,187,807.

In addition to the compensation

arrangements in the section titled “Executive Compensation,” except as set forth below, during our last two fiscal years,

we have not entered into any material transactions or series of transactions that would be considered material in which any director or

executive officer or beneficial owner of 5% or more of any class of our capital stock, or any immediate family member of any of the preceding

persons, had a direct or indirect material interest:

From April 1, 2023 to

March 31, 2025, our Chairman and CEO, Mr.

Ou, provided financial support to the Company by advancing funds and making various payments

on behalf of the Company totaling $3,274,924.

These amounts payable to Mr.

Ou are unsecured, bear no interest and do not have a maturity date.

From April 1, 2022 to March 31, 2024,

the Company repaid a total of $3,171,996 to Mr.

Ou, including repayment of amounts owed to Mr.

As of March 31, 2024, the Company transferred

$2,263,630 of the payable balance along with a cash contribution of $136,370 from Mr.

Ou are unsecured, bear no interest and do not have a maturity

From April 1, 2023 to March 31, 2025, the Company repaid a total of $1,207,404 to Mr.

Ou, including repayment of amounts

Ou prior to April 1, 2022.

From April 1, 2023 to March 31, 2025, the Company transferred $2,263,630 of the

payable balance along with a cash contribution of $136,370 from Mr.

Ou as capital contribution.

As of March 31, 2024

and 2023, the remaining balance of these payables was $92,229 and $332,481, respectively.

The Company paid a total of $290,252 to Mr.

Zhou Ou during the year ended March 31, 2024.

From April 1, 2022 to March 31, 2024, Mr.

Feng, our Chief Operating Officer, advanced a total of $711 to the subsidiaries of the Company to support their business operations.

amounts payable to Mr.

As of March 31, 2025 and 2024, the

remaining balance of these payables was nil and $92,229, respectively.

From August 9, 2024 to September 17, 2024, the Company

advanced $477,771 to Mr.

Ou, Chairman and CEO of the Company, for personal use.

This advance is unsecured, bears no interest and

does not have a maturity date.

As of March 31, 2025, the advance was paid back in full.

From April 1, 2023 to

March 31, 2025, Mr.

Rui Feng, our Chief Operating Officer, advanced a total of $8,711 to the subsidiaries of the Company to support

their business operations.

These amounts payable to Mr.

Feng are unsecured, bear no interest and do not have a maturity date.

From April 1, 2022 to March 31, 2024, the

Company repaid $64,937 to Mr.

As of March 31, 2024, the Company has paid off all amounts owed to Mr.

From April 1, 2022 to March 31, 2024, Mr.

our Chief Human Resource Officer, advanced an aggregate of $58,252 to the subsidiaries of the Company to support their business operations.

April 1, 2023 to March 31, 2025, the Company repaid $8,711 to Mr.

As of March 31, 2025, the Company has paid off all amounts

From April 1, 2023 to

March 31, 2025, Mr.

Ke Zhang, our Chief Human Resource Officer, advanced an aggregate of $52,802 to the subsidiaries of the Company

to support their business operations.

These amounts payable to Mr.

Zhang are unsecured, bear no interest and do not have a maturity date.

From April 1, 2022 to March 31, 2024,

the Company repaid $243,122 to Mr.

As of March 31, 2024, the Company has paid off all amount owed to Mr.

On March 6, 2021, the Company and DGLG Accounting and Tax LLC (“DGLG”)

entered into an engagement letter, wherein the Company engaged DGLG as a consultant to assist the Company in its IPO planning, financing

and tax services.

Zhang are unsecured, bear no interest and do not have a maturity

From April 1, 2023 to March 31, 2025, the Company repaid $52,802 to Mr.

As of March 31, 2025, the Company has paid

off all amounts owed to Mr.

On March 6, 2021, the

Company and DGLG Accounting and Tax LLC (“DGLG”) entered into an engagement letter, wherein the Company engaged DGLG as a

consultant to assist the Company in its IPO planning, financing and tax services.

Guo is a partner at DGLG.

In December 2022, the Company hired Mr.

Guo as its CFO.

Under the terms of the engagement

agreement with DGLG, the Company has agreed to compensate DGLG for consulting services based on an hourly fee arrangement.

For the years

ended March 31, 2024 and 2023, DGLG’s consulting fees were $100,000 and $25,000, respectively.

For the years ended March 31, 2024

and 2023, the Company paid DGLG a total of $123,000 and $13,050, respectively, for tax services.

On February 1, 2023, PJMG LLC (“PJMG”),

a company in which Mr.

Guo, our CFO, holds over 50% of the equity interests, provided a loan of $150,000 to the Company (the “PJMG

The PJMG Loan was unsecured, bore no interest and was set to mature on May 31, 2024.

Furthermore, the Company has agreed

to retain the services of PJMG as a consultant following the completion of its IPO.

To secure these services, the Company prepaid a total

of $210,000 to PJMG during the year ended March 31, 2024, of which $150,000 was applied to offset the PJMG Loan.

Fly E Bike SRL, a company formed under the laws of the Dominican Republic

and in which Mr.

In December 2022,

the Company hired Mr.

Guo as its former CFO.

Under the terms of the engagement agreement with DGLG, the Company has agreed to

compensate DGLG for consulting services based on an hourly fee arrangement.

For the years ended March 31, 2025 and 2024, DGLG’s

consulting fees were $225,000 and $100,000, respectively.

For the years ended March 31, 2025 and 2024, the Company paid DGLG

a total of $61,050 and $123,000, respectively, for tax services.

As of March 31, 2025, the Company did not owe any amount to DGLG.

On April 1, 2023, the

Company agreed to retain the services of PJMG LLC (“PJMG”), a company in which Mr.

Guo, the Company’s former CFO

who resigned on November 6, 2024, holds over 50% of the equity interests as a consultant following the completion of its IPO.

was engaged to provide compliance consulting services related to accounting, finance, and management, as well as to oversee market planning

and development, follow-on fundraising, and investor relationship management from June 2024 to May 2025.

The service fee is

$45,000 for the first month and from the second month the fees are $15,000 per month.

To secure these services, the Company prepaid a

total of $120,000 to PJMG as of March 31, 2025.

During the year ended March 31, 2025, the Company paid PJMG a total of $372,047 for consulting

$312,047 was expensed as consulting expenses during the year ended March 31, 2025.

Fly E Bike SRL, a company formed

under the laws of the Dominican Republic and in which Mr.

Ou holds over 50% of the equity interests, is a distributor for the Company.

During the years ended March 31, 2024

and 2023, Fly E Bike SRL purchased certain EV products from the Company in the amount of $326,914 and $136,565, respectively.

31, 2024 and 2023, the Company had accounts receivable from Fly E Bike SRL in the amounts of $326,914 and $136,565, respectively.

during the year ended March 31, 2024, the Company advanced a total of $291,756 to Fly E Bike SRL.

Such advance is unsecured, bears no

interest and does not have a maturity date.

As of March 31, 2024, Fly E Bike SRL has repaid $111,500 to the Company.

In December 2023, the Company engaged DF Technology US Inc (“DFT”)

for certain technology services.

Guo, our CFO, owns over 50% of the equity interest in DFT.

For the year ended March 31, 2024, the

Company paid a total of $1,554,000 to DFT, of which $275,000 was recognized as construction in progress and the remaining of $1,279,000

was prepayment for software development as of March 31, 2024.

During the years ended March 31, 2025 and 2024, Fly E Bike SRL purchased certain EV products from the Company in the amount

of $42,010 and $326,914, respectively.

As of March 31, 2025 and 2024, the Company had accounts receivable from Fly E Bike SRL in

the amounts of $37,465 and $326,914, respectively.

In addition, during the year ended March 31, 2025, the Company advanced a total

of $143,455 to Fly E Bike SRL.

Such advance is unsecured, bears no interest and does not have a maturity date.

As of July 15, 2025,

the advance was paid back in full.

In December 2023, the

Company engaged DF Technology US Inc (“DFT”) for certain technology services.

Guo, the Company’s former CFO,

owns over 50% of the equity interest in DFT.

As of March 31, 2025 and March 31, 2024, the accumulative payments to DFT for development

of the ERP system were $2,500,000 and $1,554,000, respectively.

During the fiscal year of 2025, the Company started to use part of the

ERP system which was valued at $2,310,000 and treated that part as computer hardware and software and started for depreciation.

March 31, 2025 and 2024, construction in progress was nil and $275,000, respectively, and primarily relating to the cost incurred to develop

the software by DFT.

As of March 31, 2025 and March 31, 2024, the Company had a prepayment of nil and $1,279,000, respectively,

In July 2024, the Company engaged DFT, a former related party, to develop a new APP, GO FLY APP, for the rental business.

total contract price for the GO FLY APP is $500,000, and the GO FLY APP was delivered on September 5, 2024.

Director Independence

We believe that each of our directors,

Wang, Feng, and Jacobs, is an independent director using the Nasdaq definition of independence.

We believe that

each of our directors, Messrs.

Wang, Feng, and Zhang, is an independent director under the Nasdaq listing rules.

Related Party Transaction Policy

Our Company has adopted a written Related

Party Transaction Policy, or the Policy, for the purpose of describing the procedures used to identify, review, approve and disclose,

if necessary, any transaction in which (i) the Company is a participant and (ii) a related person has or will have a direct or indirect

material interest.

Once a related party transaction in which the

aggregate amount involved will or may be expected to exceed the lesser of $120,000 or 1% of the Company’s total assets at year-end

for the last two completed fiscal years if the Company qualifies as a smaller reporting company in any calendar year has been identified,

the Audit Committee or the full board must review the transaction for approval or ratification.

In determining whether to approve or ratify

a related party transaction, the Audit Committee or the full board shall consider all relevant facts and circumstances, including the

following factors:

Our Company has adopted a

written Audit Committee Charter, which contains the procedures used to identify, review, approve and disclose, if necessary, any transaction

in which (i) the Company is a participant and (ii) a related person has or will have a direct or indirect material interest.

Once a related party transaction

in which the aggregate amount involved will or may be expected to exceed the lesser of $120,000 or 1% of the Company’s total assets

at year-end for the last two completed fiscal years if the Company qualifies as a smaller reporting company in any calendar year has been

identified, the Audit Committee or the full board must review the transaction for approval or ratification.

In determining whether to

approve or ratify a related party transaction, the Audit Committee or the full board shall consider all relevant facts and circumstances,

including the following factors:

(i) the materiality and character of the related person’s direct or indirect interest;

(ii) the commercial

reasonableness of the terms;

commercial reasonableness of the terms;

(iii) any Company contractual obligations;

(iv) the benefit or perceived benefit, or lack thereof, to the

(iv) the benefit or perceived benefit, or lack thereof,

to the Company;

(v) the opportunity cost of alternate transactions;

and (vi) the actual or apparent conflict of interest of the related person.

Any director who has a direct or indirect material

interest in the proposed related person transaction may be present during initial presentation of the related person transaction to the

Audit Committee or the board, but should not participate in the Audit Committee or the board action regarding whether to approve or ratify

the transaction.

If, however, a proposed transaction arises in which all directors are deemed to have a direct or indirect material interest

in the transaction, the interested directors may participate in the consideration and approval of the proposed transaction, and the Company

may enter into any such related person transaction that is approved in accordance with the provisions of the Delaware General Corporation

Principal Accounting

Fees and Services

The following table sets forth the fees billed

by Marcum Asia CPAs LLP (“Marcum Asia”) and Friedman LLP (“Friedman”) ,

our registered independent public accounting firms, for 2024 and 2023 for the categories of services indicated.

and (vi) the actual or apparent conflict of interest of the related

Any director who has a direct

or indirect material interest in the proposed related person transaction may be present during initial presentation of the related person

transaction to the Audit Committee or the board, but should not participate in the Audit Committee or the board action regarding whether

to approve or ratify the transaction.

If, however, a proposed transaction arises in which all directors are deemed to have a direct or

indirect material interest in the transaction, the interested directors may participate in the consideration and approval of the proposed

transaction, and the Company may enter into any such related person transaction that is approved in accordance with the provisions of

the Delaware General Corporation Law.

Principal Accounting Fees and Services

The following table sets forth

the fees billed by Marcum Asia CPAs LLP (“Marcum Asia”), our registered independent public accounting firm, for 2025 and 2024

for the categories of services indicated.

Year Ended March 31,

Audit fees (1)

All Other Fees

Total All Fees

Audit fees consist of fees related to professional

services rendered in connection with the audit of our annual financial statements, review of our quarterly financial statements and review

of our registration statement on Form S-1 relating to our initial public offering.

Our policy is to pre-approve all audit and permissible

non-audit services performed by the independent accountants.

These services may include audit services, audit-related services, tax services

and other services.

(1) Audit fees consist of fees related to professional services rendered in connection with the audit of our

annual financial statements, review of our quarterly financial statements and review of our registration statement on Form S-1 relating

to our initial public offering.

Our policy is to pre-approve

all audit and permissible non-audit services performed by the independent accountants.

These services may include audit services, audit-related

services, tax services and other services.

The pre-approval is made by the audit committee of the board of directors.

Our board approved all services that our

independent accountants provided to us in the past two fiscal years.

Our board approved

all services that our independent accountants provided to us prior to our IPO.

Following the completion of our IPO, such services were

reviewed and approved by the Audit Committee.

Exhibits, Financial Statement Schedules

following documents are filed as part of this report:

(1) Financial

(a) The following documents

are filed as part of this report:

(1) Financial Statements:

Report of Independent Registered Public Accounting Firm (PCAOB ID:5395)

Consolidated Balance Sheets as of March 31, 2025 and 2024

Statements of Income and Comprehensive Income for the Years Ended March 31, 2024 and 2023

Consolidated Statements of Operations and Comprehensive (Loss) Income for the Years Ended March 31, 2025 and 2024

Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended March 31, 2025 and 2024

1 unchanged sentence

Notes to Consolidated Financial Statements

(2) Financial

Statement Schedules:

(2) Financial Statement Schedules:

All financial statement schedules are omitted

4 unchanged sentences

Exhibits which are incorporated herein by reference can be inspected on the SEC website at www.sec.gov.

Form 10-K Summary

Not Applicable.

EXHIBIT INDEX

Underwriting Agreement, dated as of June 5, 2024, by and between the Company and The Benchmark Company, LLC.

Amended and Restated Articles of Incorporation, as amended.

Amended and Restated Bylaws.

Underwriting Agreement, dated as of June 5, 2024, by and between the Company and The Benchmark Company, LLC (incorporated by reference to Exhibit 1.1 to Form 8-K filed on June 7, 2024)

Amended and Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to Form 8-K filed on June 7, 2024)

Certificate of Amendment of Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Form 8-K filed on March 14, 2025)

The Second Certificate of Amendment of Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Form 8-K filed on July 2, 2025)

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s registration statement on Form S-1 (File No.

333-276830) filed on April 22, 2024 and incorporated herein by reference.

Description of Securities of the Registrant

Form of Underwriter's Warrant, dated June 7, 2024 1

Employment agreement dated April 1,

2023 by and between FLYEBIKE Inc and Zhou Ou.

Employment agreement dated April 1,

2023 by and between FLYEBIKE Inc and Ruifeng Guo.

Form of Underwriter’s Warrant, dated June 7, 2024 (incorporated by reference to Exhibit 4.1 to Form 8-K filed on June 7, 2024)

Form of Warrant (incorporated by reference to Exhibit 4.1 to Form 8-K filed on June 5, 2025)

Employment agreement dated April 1, 2023 by and between FLYEBIKE Inc and Zhou Ou.

(incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K filed on June 28, 2024)†

Employment Agreement dated November 7, 2024 by and between the Company and Shiwen Feng.

(incorporated by reference to Exhibit 10.1 to Form 8-K filed on November 8, 2024)†

Fly-E Group, Inc.

2024 Omnibus Incentive Plan.

2024 Omnibus Incentive Plan (incorporated by reference to Appendix A to the Company’s Proxy Statement on Schedule 14A filed on February 21, 2025)†

Form of the Independent Director’s Agreement of Fly-E Group, Inc.

Form of Indemnification Agreement 1

(incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K filed on June 28, 2024)

Form of Indemnification Agreement (incorporated by reference to Exhibit 10.5 to the Company’s Annual Report on Form 10-K filed on June 28, 2024)

Engagement Letter dated March 6, 2021, by and between the Company and DGLG Accounting and Tax LLC.

(incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K filed on June 28, 2024)

Contract Agreement for the Development of POS and ERP System dated December 13, 2023 between the Company and DF Technology US Inc.

Contract of Sale dated March 19, 2024 by and between He’s Realty Holdings LLC and AOFL LLC #

Code of Ethics

Insider Trading Policy

(incorporated by reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K filed on June 28, 2024)

Placement Agency Agreement, dated April 22, 2025, by and between the Company and American Trust Investment Services, Inc., as amended (incorporated by reference to Exhibit 1.1 to the Company’s registration statement on Form S-1 (File No.

333-286678) filed on April 22, 2025 and incorporated herein by reference.

Joint Amendment to Placement Agency Agreement and Engagement Letter, dated May 13, 2025, by and between the Company and American Trust Investment Services, Inc.

Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to Form 8-K filed on June 5, 2025)

Loan and Security Agreement dated as of August 5, 2024, by and among the Company, Fly-E-Bike Inc., Fly EV, Inc.

and Peapack-Gladstone Bank (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on August 16, 2024)

Contract Agreement dated as of July 5, 2024, by and between the registrant and DF Technology US Inc (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on August 16, 2024)

Agreement dated as of April 1, 2023, by and between the Company and PJMG LLC (incorporated by reference to Exhibit 10.3 to the

Company’s Quarterly Report on Form 10-Q filed on August 16, 2024)

Code of Ethics (incorporated by reference to Exhibit 14.1 to the Company’s Annual Report on Form 10-K filed on June 28, 2024)

Insider Trading Policy (incorporated by reference to Exhibit 19.1 to the Company’s Annual Report on Form 10-K filed on June 28, 2024)

List of Subsidiaries.

Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules

13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules

13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Executive Officer Pursuant to 18 U.S.C.

2 unchanged sentences

Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Clawback policy

Clawback policy (incorporated by reference to Exhibit 97.1 to the Company’s Annual Report on Form 10-K filed on June 28, 2024)

Inline XBRL Instance Document.

5 unchanged sentences

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Filed as an exhibit to the Company’s registration statement on Form S-1 (File No.

333-276830) filed on May 3, 2024 and incorporated herein by reference.

Filed as an exhibit to the Company’s current report on Form 8-K filed on June 7, 2024 and incorporated herein by reference.

Filed herewith.

1 unchanged sentence

Compensatory plan or arrangement.

The exhibits and schedules to this Exhibit have been omitted pursuant

to Item 601(a)(5) of Regulation S-K.

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 Commission upon request.

Pursuant to the requirements of the Securities Exchange Act of 1934,

the Registrant has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.

June 27, 2024

Pursuant to the requirements of the Securities

Exchange Act of 1934, the Registrant has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.

July 15, 2025

FLY-E GROUP, INC.

5 unchanged sentences

Chief Executive Officer (Principal Executive Officer) and Director

June 27, 2024

/s/ Ruifeng Guo

Chief Financial Officer (Principal Accounting and Financial Officer) and

June 27, 2024

/s/ Alan Jacobs

June 27, 2024

July 15, 2025

/s/ Shiwen Feng

Chief Financial Officer (Principal Accounting and Financial Officer) and Director

July 15, 2025

/s/ Zanfeng Zhang

July 15, 2025

Zanfeng Zhang

FLY-E GROUP, INC.

2 unchanged sentences

Consolidated Balance Sheets as of March 31, 2025 and 2024 F-3

Consolidated Statements of Income and Comprehensive Income for the Years Ended March 31, 2024 and 2023 F-4

Consolidated Statements of Operations and Comprehensive (Loss) Income for the Years Ended March 31, 2025 and 2024 F-4

Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended March 31, 2025 and 2024 F-5

5 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Fly-E

(the “Company”) as of March 31, 2024 and 2023, the related consolidated statements of income and comprehensive

income, stockholders’ equity and cash flows for each of the years in the two-year period ended March 31, 2024, and the related notes

(collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all

material respects, the financial position of the Company as of March 31, 2024 and 2023, and the results of its operations and its cash

flows for each of the years in the two-year period ended March 31, 2024, in conformity with accounting principles generally accepted in

the United States of America.

We have audited the accompanying consolidated

balance sheets of Fly-E Group, Inc.

(the “Company”) as of March 31, 2025 and 2024, the related consolidated statements of

operations and comprehensive (loss) income, changes in stockholders’ equity and cash flows for each of the years in the two-year

period ended March 31, 2025, and the related notes (collectively referred to as the “financial statements”).

In our opinion,

the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2025 and 2024,

and the results of its operations and its cash flows for each of the years in the two-year period ended March 31, 2025, in conformity

with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying financial statements have been

prepared assuming that the Company will continue as a going concern.

As more fully described in Note 1, the Company has incurred significant

losses and significant cash outflows from operating and investing activities, and needs to raise additional funds to meet its obligations

and sustain its operations.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

plans in regard to these matters are also described in Note 1.

The financial statements do not include any adjustments that might result

from the outcome of this uncertainty.

Basis for Opinion

25 unchanged sentences

Marcum Asia CPAs LLP

We have served as the Company’s auditor

since 2022 (such date takes into account the acquisition of certain assets of Friedman LLP by Marcum Asia CPAs LLP effective September

New York , NY

June 27, 2024

We have served as the Company’s auditor since 2022 (such date

takes into account the acquisition of certain assets of Friedman LLP by Marcum Asia CPAs LLP effective September 1, 2022).

New York, New York

July 15, 2025

NEW YORK OFFICE ● 7 Penn Plaza ● Suite

2 unchanged sentences

www.marcumasia.com

CONSOLIDATED FINANCIAL STATEMENTS

FLY-E GROUP, INC.

BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS

(Expressed in U.S.

dollars, except for the number of shares)

dollars, except for the

number of shares)

Current Assets

Accounts receivable

Accounts receivable – related parties

Accounts receivable, net – related parties

Inventories, net

1 unchanged sentence

Prepayments and other receivables – related parties

Assets held for sale

Total Current Assets

10 unchanged sentences

Accounts payable

Short-term loan payables

Current portion of long-term loan payables

3 unchanged sentences

Taxes payable

Liabilities held for sale

Total Current Liabilities

Long-term loan payables

Long-term loan payables – related parties

Operating lease liabilities – non-current

2 unchanged sentences

Stockholders’ Equity

Preferred stock, $ 0.01 par value, 4,400,000 shares authorized and nil outstanding as of March 31, 2024 and March 31, 2023*

Common stock, $ 0.01 par value, 44,000,000 shares authorized and 22,000,000 shares outstanding as of March 31, 2024 and March 31, 2023*

Preferred stock, $ 0.01 par value, 10,000,000 shares authorized and nil outstanding as of March 31, 2025 March 31, 2024*

Common stock, $ 0.01 par value, 300,000,000 shares authorized and 4,917,500 shares outstanding as of March 31, 2025 and 100,000,000 shares authorized and 4,400,000 shares outstanding as of March 31, 2024*

Additional paid-in capital

Shares subscription receivable

Retained Earnings

(Accumulated deficit) Retained Earnings

Accumulated other comprehensive loss

FLY-E Group, Inc.

Total FLY-E Group, Inc.

Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

* Shares and per share data are presented on a retroactive basis

to reflect the nominal share issuance on December 21, 2022 and to give effect to the stock split completed on April 2, 2024.

The accompanying notes are an integral part of these consolidated financial

* Shares and per share data are presented on a retroactive basis to reflect

the 1-for-110,000 stock split completed on April 2, 2024 and the 1-for-5 reverse stock split completed on July 3, 2025.

The accompanying notes are an integral part of

these consolidated financial statements.

FLY-E GROUP, INC.

STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE (LOSS) INCOME

(Expressed in U.S.

dollars, except for the number of shares)

dollars, except for the

number of shares)

For the Years Ended

4 unchanged sentences

Total Operating Expenses

Income from Operations

Other Expenses, net

Income (Loss) from Operations

( 4,559,966 )

Other Income (Expenses), net

Interest Expenses, net

Income Before Income Taxes

Income (Loss) Before Income Taxes

( 4,954,993 )

Income Tax Expense

( 1,182,933 )

Net Income (Loss)

$ ( 5,291,159 )

Other Comprehensive Income (Loss)

Foreign currency translation adjustment

Total Comprehensive Income

Earnings per Share*

Total Comprehensive Income (Loss)

$ ( 5,318,389 )

Earnings (Losses) per Share*

Weighted Average Number of Common Stock

– Basic and Diluted*

* Shares and per share data are presented on a retroactive basis

to reflect the nominal share issuance on December 21, 2022 and to give effect to the stock split completed on April 2, 2024.

The accompanying notes are an integral part of these consolidated financial

* Shares and per share data are presented on a retroactive basis to reflect

the 1-for-110,000 stock split completed on April 2, 2024 and the 1-for-5 reverse stock split completed on July 3, 2025.

The accompanying notes are an integral part of

these consolidated financial statements.

FLY-E GROUP, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDERS’ EQUITY

(Expressed in U.S.

dollars, except for the number of shares)

dollars, except for the

number of shares)

Preferred Stock

3 unchanged sentences

$ ( 219,998 )

Capital Contribution

Foreign currency translation adjustment

Balance at March 31, 2024

Capital contributions

( 5,291,159 )

Issuance of common stock upon initial public offering, net

Foreign currency translation adjustment

1 unchanged sentence

$ ( 219,998 )

* Shares and per share data are presented on a retroactive basis

to reflect the nominal share issuance on December 21, 2022 and to give effect to the stock split completed on April 2, 2024.

The accompanying notes are an integral part of these consolidated financial

$ ( 895,510 )

* Shares and per share data are presented on a retroactive basis to reflect

the 1-for-110,000 stock split completed on April 2, 2024 and the 1-for-5 reverse stock split completed on July 3, 2025.

The accompanying notes are an integral part of

these consolidated financial statements.

FLY-E GROUP, INC.

STATEMENTS OF CASH FLOWS

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S.

dollars, except for the number of shares)

For the Years Ended

Cash flows from operating activities

Adjustments to reconcile net income to net cash provided by operating activities:

Loss on disposal of property, and equipment

dollars, except for the

number of shares)

Cash flows from operating

$ ( 5,291,159 )

to reconcile net (loss) income to net cash (used in) provided by operating activities:

Loss on disposal of property

and equipment

(Gain) Loss on termination

of operating lease

(Gain) Loss on disposal

of subsidiaries

Credit loss for accounts

Depreciation expense

Amortization expense

Deferred income taxes expenses

Amortization of operating lease right-of-use assets

Loss from termination of operating lease

Deferred income taxes (benefits)

Amortization of operating

lease right-of-use assets

Inventories reserve

Changes in operating assets and liabilities:

Changes in operating assets

and liabilities:

Accounts receivable

Accounts receivable – related parties

Accounts receivable – related

( 2,736,241 )

( 1,981,515 )

Prepayments and other receivables

Prepayments for operation services to related parties

( 2,677,904 )

Prepayments for operation

services to related parties

Security deposits

Accounts payable

Accrued expenses and other payables

Accrued expenses and other

Operating lease liabilities

1 unchanged sentence

( 1,933,760 )

Taxes payable

Net cash provided by operating activities

Cash flows from investing activities

Purchases of equipment

( 1,525,371 )

Purchases of property rights

Prepayments for property

Prepayment for purchasing software from a related party

cash (used in) provided by operating activities

( 10,059,466 )

Payment received from a related party

Cash flows from investing

Purchases of properties

and equipment

( 1,634,174 )

( 1,253,555 )

Purchase of software and

hardware from a related party

( 1,392,580 )

( 1,279,000 )

Cash held at disposal entities

Repayment from a related

Advance to a related party

Net cash used in investing activities

Prepayments for property

of property rights

cash used in investing activities

( 2,901,272 )

Cash flows from financing activities

( 3,200,843 )

Cash flows from financing

Borrowing from loan payables

Repayments of loan payables

Repayments on other payables - related parties

( 3,661,559 )

Payments of related party loan

Deferred IPO Cost

Capital contributions from Stockholders

Net cash used in financing activities

( 1,350,364 )

Net changes in cash

Effect of exchange rate changes on cash

Cash at beginning of the year

Cash at the end of the year

Supplemental disclosure of cash flow information

Cash paid for interest expense

Cash paid for income taxes

Supplemental disclosure of non-cash investing and financing activities

Settlement of accounts payable by related parties

Settlement of accounts payable by capital contribution

Purchase of vehicle funded by loan

Repayments on other payables

- related parties

Payments of related party

Capital Contributions from

Payments of IPO cost

proceeds from issuance of common stock - IPO

cash provided by (used in) financing activities

Net changes in cash including

cash classified within current assets held for sale

Effect of exchange rate

changes on cash

net decrease in cash

classified within current assets held for sale

at beginning of the year

at the end of the year

Supplemental disclosure

of cash flow information

paid for interest expense

paid for income taxes

Supplemental disclosure

of non-cash investing and financing activities

Settlement of accounts

payable by related parties

Settlement of accounts

payable by capital contribution

Purchase of vehicle funded

Purchase of office funded

Purchase software and office

by using previous prepayments

Purchase property rights

by using previous prepayments

Properties used for rental

Unpaid deferred IPO cost

Termination of operating lease right-of-use assets and operating lease liabilities

Deferred IPO cost recognized

as additional paid-in capital

Uncollected proceeds from

disposal of subsidiaries

Termination of operating

lease right-of-use assets and operating lease liabilities

$ ( 2,473,686 )

Right-of-use assets obtained in exchange for operating lease liabilities

The accompanying notes are an integral part of these consolidated financial

Notes to Consolidated

Financial Statements

1 — DESCRIPTION OF BUSINESS, ORGANIZATION AND BASIS OF PRESENTATION

$ ( 2,814,235 )

Right-of-use assets obtained

in exchange for operating lease liabilities

The accompanying notes are an integral part of

these consolidated financial statements.

FLY-E GROUP, INC.

Notes to Consolidated Financial Statements

1 — DESCRIPTION OF BUSINESS, ORGANIZATION

AND BASIS OF PRESENTATION

Organization and principal activities

Fly-E Group, Inc.

(the “Company” or “Fly-E Group”)

was incorporated under the laws of the State of Delaware on November 1, 2022.

The Company has no substantive operations other than

holding all of the issued and outstanding shares of Fly E-Bike Inc.

(the “Company” or

“Fly-E Group”) was incorporated under the laws of the State of Delaware on November 1, 2022.

The Company has no substantive

operations other than holding all of the issued and outstanding shares of Fly E-Bike Inc.

(“Fly E-Bike”) and Fly EV, Inc.

Fly E-Bike and Fly EV were incorporated under the laws of the State of Delaware on August 22, 2022 and November 1, 2022, respectively.

Fly E-Bike and Fly EV were incorporated under the laws of the State of Delaware on August 22, 2022 and November 1,

2022, respectively.

Fly EV has no substantive operations.

The Company, through its wholly owned subsidiaries, is principally engaged in designing, installing

and selling smart electric bikes (“E-bikes”), electric motorcycles (“E-motorcycles”), electric scooters (“E-scooters”),

and related accessories under the brand name of “Fly E-Bike.” The Company’s principal operations and geographic markets

are mainly in the United States of America (the “U.S.”).

As of June 27, 2024, the Company has opened a total of 40 stores,

including 39 stores in the U.S and one store in Canada.

The Company also operates one online store, focusing on selling E-motorcycles,

E-bikes, and E-scooters.

The Company plans to open another online store focusing on selling gas bikes in the future.

The Company’s business was initially operated under CTATE INC.

The Company, through its wholly owned subsidiaries, is principally engaged in

designing, installing and selling smart electric bikes (“E-bikes”), electric motorcycles (“E-motorcycles”), electric

scooters (“E-scooters”), and related accessories under the brand name of “Fly E-Bike.” The Company’s principal

operations and geographic markets are mainly in the United States of America (the “U.S.”).

During the year ended March

31, 2025, the Company closed four stores in the U.S.

As of July 15, 2025, the Company has opened a total of 20 retail stores, including

19 retail stores in the U.S and one retail store in Canada.

The Company offers rental services from selected locations.

The Company also operates one online store, focusing on selling E-motorcycles, E-bikes, and E-scooters.

The Company plans to open another

online store focusing on selling gas bikes in the future.

The Company’s business was initially operated

under CTATE INC.

(“Ctate”), a corporation formed under the laws of the State of New York in 2018.

Before merging with Fly E-Bike, Ctate

owned 27 companies, each of which operated a Fly E-Bike store.

On September 12, 2022, Ctate and Fly E-Bike, which was a wholly-owned

subsidiary of Ctate, entered into an Agreement and Plan of Merger, pursuant to which Ctate merged into and with Fly E-Bike, with Fly E-Bike

being the surviving corporation (the “Merger”).

As a result of the Merger, the original shareholders of Ctate became the stockholders

of Fly E-Bike and subsequently effectively controlled the combined entity.

On December 21, 2022, Fly-E Group and Fly E-Bike entered into

a Share Exchange Agreement, pursuant to which Fly-E Group acquired all of the issued and outstanding shares of Fly E-Bike by issuing its

shares to the stockholders of Fly E-Bike on a one-for-one basis (the “Share Exchange”).

As a result of the Share Exchange,

Fly E-Bike became a wholly owned subsidiary of Fly-E Group.

As a result of the Merger and the Share Exchange, Fly E-Bike and its

subsidiaries are under common control of Fly-E Group, resulting in the consolidation of Fly E-Bike and its subsidiaries, which was accounted

as a reorganization of entities under common control at carrying value.

The consolidated financial statements are prepared on the basis

as if the reorganization became effective as of the beginning of the first period presented in the consolidated financial statements of

The consolidated financial statements include the financial statements

of the Company and each of the following subsidiaries as of March 31, 2024.

Background Ownership

Before merging with

Fly E-Bike, Ctate owned 27 companies, each of which operated a Fly E-Bike store.

On September 12, 2022, Ctate and Fly E-Bike, which

was a wholly-owned subsidiary of Ctate, entered into an Agreement and Plan of Merger, pursuant to which Ctate merged into and with Fly

E-Bike, with Fly E-Bike being the surviving corporation (the “Merger”).

As a result of the Merger, the original shareholders

of Ctate became the stockholders of Fly E-Bike and subsequently effectively controlled the combined entity.

On December 21, 2022, Fly-E Group and Fly

E-Bike entered into a Share Exchange Agreement, pursuant to which Fly-E Group acquired all of the issued and outstanding shares of Fly

E-Bike by issuing its shares to the stockholders of Fly E-Bike on a one-for-one basis (the “Share Exchange”).

of the Share Exchange, Fly E-Bike became a wholly owned subsidiary of Fly-E Group.

As a result of the Merger and the Share Exchange,

Fly E-Bike and its subsidiaries are under common control of Fly-E Group, resulting in the consolidation of Fly E-Bike and its subsidiaries,

which was accounted as a reorganization of entities under common control at carrying value.

The consolidated financial statements are

prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the consolidated

financial statements of Fly-E Group.

On June 7, 2024, the Company issued 450,000 shares

of common stock, at a price of $ 20.00 per share in its initial public offering (“IPO”).

The gross proceeds of the offering

were $ 9.0 million, prior to deducting the underwriting discounts, commissions and offering expenses payable by the Company.

the Company granted the underwriters a 30-day option to purchase an additional 67,500 shares of common stock at the initial public offering

price, less underwriting discounts and commissions, to cover over-allotments.

On June 25, 2024, the Company issued an additional 67,500

shares of common stock to the underwriters of its IPO for gross proceeds of $ 1.4 million upon full exercise of the underwriters’

over-allotment option.

Net proceeds received by the Company from its initial public offering, including the exercise of the over-allotment

option, were approximately $ 9.2 million.

The Company also issued to The Benchmark Company, LLC (“Benchmark”), the representative

of the underwriters warrants to purchase 25,875 shares.

On June 4, 2025, the Company issued 5,719,111

shares of common stock, at a price of $ 1.2140 per share in its second public offering.

The gross proceeds of the offering were $ 6.9 million,

prior to deducting the placement agent’s fees and offering expenses payable by the Company.

Each share of common stock was sold

together with two warrants, with each warrant to purchase one share of common stock.

Each warrant is exercisable immediately with an exercise

price equal to 120 % of the offering price ($ 1.4565 per share) and expires on the fifth anniversary of the issuance date, subject to certain

On July 3, 2025, the Company implemented a 1-for-5

reverse stock split of its issued and outstanding shares of common stock.

As a result, all share and per share information has been retroactively

adjusted to reflect the reverse stock split for all periods presented.

The reverse stock split reduced the number of shares of common

stock issued and outstanding from 24,587,500 to 4,917,500 as of March 31, 2025.

The par value per share remained unchanged at $ 0.01 .

The reverse stock split was accounted for retrospectively

in the accompanying consolidated financial statements and notes for all periods presented.

All references to the number of shares of common

stock, including per share amounts, have been adjusted to reflect the reverse stock split.

The consolidated financial statements include

the financial statements of the Company and each of the following subsidiaries as of March 31, 2025.

Name Background Ownership

FLY-E GROUP, INC.

21 unchanged sentences

● A New York corporation

● Incorporated on April 29, 2020

● A retail store

100% owned by Fly E-Bike, Inc.

● A New York corporation

● Incorporated on July 3, 2018

7 unchanged sentences

● Incorporated on October 14, 2020

● A retail store

● No operation

100% owned by Fly E-Bike, Inc.

3 unchanged sentences

100% owned by Fly E-Bike, Inc.

● A New York corporation

● Incorporated on November 13, 2020

● A retail store

100% owned by Fly E-Bike, Inc.

● A New York corporation

● Incorporated on December 15, 2020

● A retail store

100% owned by Fly E-Bike, Inc.

FLYAM INC ● A New York corporation

16 unchanged sentences

● Incorporated on June 8, 2021

● A retail store

100% owned by Fly E-Bike, Inc.

ESEBIKE INC ● A New York corporation

● Incorporated on October 13, 2021

● A retail store

● No operation

100% owned by Fly E-Bike, Inc.

1 unchanged sentence

● Incorporated on June 30, 2021

● A retail store

● No operation

100% owned by Fly E-Bike, Inc.

1 unchanged sentence

● Incorporated on July 23, 2021

● A retail store

100% owned by Fly E-Bike, Inc.

● A New York corporation

● Incorporated on September 15, 2021

● A retail store

100% owned by Fly E-Bike, Inc.

EDISONEBIKE INC.

● A New York corporation

● Incorporated on October 13, 2021

● A retail store

● No operation

100% owned by Fly E-Bike, Inc.

12 unchanged sentences

100% owned by Fly E-Bike, Inc.

● A New York corporation

● Incorporated on March 2, 2022

● A retail store

100% owned by Fly E-Bike, Inc.

FLYCORONA INC.

7 unchanged sentences

100% owned by Fly E-Bike, Inc.

FLY6AVE, INC.

● A New York corporation

● Incorporated on April 16, 2022

● A retail store

100% owned by Fly E-Bike, Inc.

FLY E BIKE NJ3, INC ● A New Jersey corporation

2 unchanged sentences

100% owned by Fly E-Bike, Inc.

FLYEBIKE BROOKLYN, INC.

● A New York corporation

● Incorporated on November 2, 2022

● A retail store

100% owned by Fly E-Bike, Inc.

FLY E-BIKE SAN ANTONIO INC ● A Texas corporation

● Incorporated on January 1, 2023

● A retail store

● No operation

100% owned by Fly E-Bike, Inc.

18 unchanged sentences

100% owned by Fly E-Bike, Inc.

FLYMHT659 INC.

● A New York corporation

● Incorporated on June 2, 2023

● A retail store

100% owned by Fly E-Bike, Inc.

FLYBX745 INC.

● A New York corporation

● Incorporated on June 15, 2023

● A retail store

100% owned by Fly E-Bike, Inc.

FLYJH8509 INC.

19 unchanged sentences

● Incorporated on December 1, 2023

● A retail and rental store

100% owned by Fly E-Bike, Inc.

● A New York corporation

● Incorporated on April 3, 2024

● A retail store

100% owned by Fly E-Bike, Inc.

As of March 31, 2024, the Company had working capital of approximately

$ 0.34 million and cash of approximately $ 1.4 million.

The Company had net income of approximately $ 1.9 million and

$ 1.4 million for the years ended March 31, 2024 and 2023, respectively.

● A Maryland corporation

● Incorporated on April 9, 2024

● A retail store

100% owned by Fly E-Bike, Inc.

AOFL LLC ● A New York corporation

● Incorporated on June 25, 2024

● A holding company

100% owned by Fly E-Bike, Inc.

GOBIKE INC ● A New York corporation

● Incorporated on July 16, 2024

● A rental store

100% owned by Fly E-Bike, Inc.

FLYEBIKE BOSTON INC.

● A Massachusetts corporation

● Incorporated on September 1, 2024

● A retail store

100% owned by Fly E-Bike, Inc.

FLYNJ1 INC ● A Massachusetts corporation

● Incorporated on January 29, 2025

● A retail store

100% owned by Fly E-Bike, Inc.

Liquidity and Going Concern

In assessing the Company’s liquidity, the

Company monitors and analyzes its cash on-hand and its operating and capital expenditure commitments.

The Company’s liquidity needs

are to meet its working capital requirements, operating expenses and capital expenditure obligations.

Debt financing from financial institutions

and equity financings have been utilized to finance the working capital requirements of the Company.

On June 7, 2024, the Company closed the IPO of

4 unchanged sentences

and received net proceeds of approximately $ 1.2 million.

The management plans to increase the Company’s revenue by strengthening

its sales force, providing attractive sales incentive programs, and increasing marketing and promotion activities.

The working capital

requirements are affected by the efficiency of operations and depend on the Company’s ability to increase its revenue.

anticipates that it will continue to generate net income for the foreseeable future and believes that its cash on hand and operating cash

flows will be sufficient to fund its operations over at least the next 12 months from the date of issuance of these consolidated

financial statements.

2 — SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES

As of March 31, 2025, the Company had working capital of approximately

$ 1.3 million and cash of approximately $ 0.8 million.

During the year ended March 31, 2025, the Company had net loss of approximately

$ 5.3 million.

During the year ended March 31, 2025, net cash used in operating activities of the Company was approximately $ 10.1 million.

As of March 31, 2025, the Company had a current portion of contractual obligation of approximately $ 8.9 million.

On June 4, 2025, the

Company closed a public offering of (i) 5,719,111 shares of the common stock at the price of $ 1.2140 per share and (ii) 11,438,222 warrants

to purchase 11,438,222 shares of common stock, resulting in net proceeds to the Company of $ 6.1 million after deducting placement agent’s

fees and offering expenses.

Management has determined there is substantial doubt about its ability to continue as a going concern.

plans to alleviate the going concern risk through (i) equity financing to support the Company’s working capital;

(ii) other available

sources of financing (including debt) from banks and other financial institutions;

and (iii) financial support from the Company’s

related parties.

There is no assurance that the Company will be successful in implementing the foregoing plans or that additional financing

will be available to the Company on commercially reasonable terms, or at all.

The Company’s inability to secure needed financing

when required could require material changes to the Company’s business plans and could have a material adverse effect on the Company’s

ability to continue as a going concern and results of operations.

The consolidated financial statements have been prepared on a going

concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.

The consolidated

financial statements do not include any adjustments that might result from the outcome of such uncertainties.

2 — SUMMARY OF SIGNIFICANT ACCOUNTING

(a) Basis of Presentation

The accompanying consolidated financial statements of the Company have

been prepared in accordance with accounting principles generally accepted in the U.S.

GAAP”) and regulations

of the Securities Exchange Commission (the “SEC”).

The accompanying consolidated financial statements

of the Company have been prepared in accordance with accounting principles generally accepted in the U.S.

and regulations of the Securities Exchange Commission (the “SEC”).

(b) Principles of Consolidation

The consolidated financial statements include the financial statements

of the Company and its subsidiaries over which the Company exercises control and, when applicable, entities for which the Company has

a controlling financial interest.

All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.

The consolidated financial statements include

the financial statements of the Company and its subsidiaries over which the Company exercises control and, when applicable, entities for

which the Company has a controlling financial interest.

All transactions and balances among the Company and its subsidiaries have been

eliminated upon consolidation.

The Company’s chief operating decision-makers (i.e., chief executive

officer and his direct reports) review financial information presented on a consolidated basis, accompanied by disaggregated information

about revenues by different revenues streams for purposes of allocating resources and evaluating financial performance.

The Company and

its subsidiaries offer E-bikes, E-motorcycles, E-scooters and other items and services in its stores.

The Company’s retail operating

divisions are geographically based, have similar economic characteristics and similar expected long-term financial performance.

substantially all of the Company’s long-lived assets and revenues are located in and derived from the U.S., geographical segments

are not presented.

The Company’s chief operating decision-makers

(“CODM”) (i.e., chief executive officer and his direct reports) review financial information presented on a consolidated basis,

accompanied by disaggregated information about revenues by different revenues streams for purposes of allocating resources and evaluating

financial performance.

The Company and its subsidiaries offer E-bikes, E-motorcycles, E-scooters and other items and services in its stores.

The Company’s retail operating divisions are geographically based, have similar economic characteristics and similar expected long-term

financial performance.

Because substantially all of the Company’s long-lived assets and revenues are located in and derived from

the U.S., geographical segments are not presented.

The Company’s operating segments are reported in one reportable segment.

There are no segment managers who are

held accountable for operations, operating results and plans for levels or components below the consolidated unit level.

Based on qualitative

and quantitative criteria established by Accounting Standards Codification (“ASC”) 280, “Segment Reporting”, the

Company considers itself to be operating within one reportable segment.

are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated

Based on qualitative and quantitative criteria established by Accounting Standards Codification (“ASC”) 280, “Segment

Reporting”, the Company considers itself to be operating within one reportable segment.

The Company has concluded that consolidated

net (loss) income is the measure of segment profitability.

The CODM assesses performance for the Company, monitors budget versus actual

results, and determines how to allocate resources based on consolidated net (loss) income as reported in the consolidated statements of

operations and other comprehensive (loss) income.

There are no other expense categories regularly provided to the CODM that are not already

included in the primary financial statements herein.

(d) Use of Estimates

In the application of the Company’s accounting policies, management

is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent

from other sources.

The estimates and associated assumptions are based on historical experience and other factors that are considered

Significant accounting estimates include, but not limited to, useful lives of depreciable property and equipment, impairment

of long-lived assets, the realization of deferred income tax assets, allowance for inventories, and discount rate for operating leases.

In the application of the Company’s

accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and

liabilities that are not readily apparent from other sources.

The estimates and associated assumptions are based on historical

experience and other factors that are considered relevant.

Significant accounting estimates include allowance for inventories.

Changes in facts and circumstances may result in revised estimates.

Actual results could differ from those estimates, and as such, differences

may be material to the consolidated financial statements.

Actual results could differ from those estimates, and as such,

differences may be material to the consolidated financial statements.

(e) Commitments and Contingencies

In the normal course of business, the Company is subject to loss contingencies,

such as legal proceedings and claims arising out of its business, which cover a wide range of matters, including, among others, government

investigations, shareholder lawsuits, and non-income tax matters.

An accrual for a loss contingency is recognized when it is probable

that a liability has been incurred and the amount of loss can be reasonably estimated.

If a potential material loss contingency is not

probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with

an estimate of the range of possible loss if determinable and material, is disclosed.

Cash consists of cash on hand and cash deposited with banks.

The Company’s

cash is maintained at financial institutions in the U.S.

Deposits in these financial institutions may, from time to time, exceed

the Federal Deposit Insurance Corporation’s (the “FDIC”) federally insured limit, which is $ 250,000 .

The Company has

not incurred any losses in the past for amount over the FDIC limits.

As of March 31, 2024 and 2023, no balance deposited with banks

was uninsured.

In the normal course of business, the Company

is subject to loss contingencies, such as legal proceedings and claims arising out of its business, which cover a wide range of matters,

including, among others, government investigations, shareholder lawsuits, and non-income tax matters.

An accrual for a loss contingency is recognized

when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated.

If a potential material loss

contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability,

together with an estimate of the range of possible loss if determinable and material, is disclosed.

Cash consists of cash on hand and cash deposited

The Company’s cash is maintained at financial institutions in the U.S.

Deposits in these financial institutions

may, from time to time, exceed the Federal Deposit Insurance Corporation’s (the “FDIC”) federally insured limit, which

is $ 250,000 .

The Company has not incurred any losses in the past for amount over the FDIC limits.

As of March 31, 2025 and March 31,

2024, nil and nil deposited with banks was uninsured, respectively.

(g) Accounts Receivable

Accounts receivable includes trade account due from customers.

receivable is recorded at the invoiced amount less an allowance for any uncollectible accounts and does not bear interest, which is due

after 30 to 90 days, depending on the credit term with the customers.

Management considers the following factors when determining

the collectability of specific accounts:

historical experience, credit worthiness of the clients, aging of the receivables and other specific

circumstances related to the accounts.

An allowance for doubtful accounts is made and recorded into general and administrative expenses

based on the aging of accounts receivable and on any specifically identified accounts receivable that may become uncollectible.

receivable which is deemed to be uncollectible is charged off against the allowance after all means of collection have been exhausted

and the potential for recovery is considered remote.

No allowance for doubtful accounts as of March 31, 2024 and 2023 was recorded.

On April 1, 2023, the Company adopted ASU 2016-13, “Financial

Instruments – Credit Losses (Topic 326):

Measurement on Credit Losses on Financial Instruments”, including certain subsequent

amendments, transitional guidance and other interpretive guidance within ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, ASU 2020-02

and ASU 2020-03 (collectively, including ASU 2016-13, “ASC 326”).

ASC 326 introduces an approach based on expected losses

to estimate the allowance for doubtful accounts, replacing the previous incurred loss impairment model, which makes allowances when there

is substantial doubt as to the collectability and a loss is determined to be probable.

The Company adopt the current expected credit loss model (“CECL

model”) to estimate the expected credit losses, which is determined by multiplying the probability of default.

In determining the

probability of default, the Company mainly considers factors such as aging schedule of receivables, migration rate of receivables, assessment

of receivables due from specific identifiable counterparties that are considered at risk or uncollectible, current market conditions,

as well as reasonable and supportable forecasts of future economic conditions.

The Company concludes that there is no impact over the

initial adoption of CECL model, which should be treated as cumulative-effect adjustment on retained earnings as of March 31, 2023.

There was nil and nil provision of allowance for credit losses as of

March 31, 2024 and 2023, respectively.

Accounts receivable includes trade account due

from customers.

Accounts receivable is recorded at the invoiced amount less an allowance for any credit loss and does not bear interest,

which is due after 30 to 90 days, depending on the credit term with the customers.

Accounts receivable which is deemed

to be uncollectible is charged off against the allowance after all means of collection have been exhausted and the potential for recovery

is considered remote.

The Company adopt the current expected credit

loss model (“CECL model”) to estimate the expected credit losses, which is determined by multiplying the probability of default.

In determining the probability of default, the Company mainly considers factors such as aging schedule of receivables, migration rate

of receivables, assessment of receivables due from specific identifiable counterparties that are considered at risk or uncollectible,

current market conditions, as well as reasonable and supportable forecasts of future economic conditions.

As of March 31, 2025, the Company accrued credit

losses of $ 116,746 , consisting of $ 41,100 related to accounts receivable from a related party customer and $ 75,646 related to accounts

receivable from a third party customer.

As of March 31, 2024, no credit losses were recognized.

(h) Inventories, Net

Inventories, consisting of products available for sale, are stated

at the lower of cost or net realizable value using the first-in-first-out method.

Adjustments to the carrying value are recorded for estimated

obsolescence or excess inventory equal to the difference between the cost of inventory and the estimated net realizable value based upon

assumptions about future demand and market conditions.

Inventory cost consists of the direct cost of merchandise including freight.

the years ended March 31, 2024 and 2023, the impairment loss was $ 456,209 and $ 151,378 , respectively.

Inventories, consisting of products available

for sale, are stated at the lower of cost or net realizable value using the first-in-first-out method.

Adjustments to the carrying value

are recorded for estimated obsolescence or excess inventory equal to the difference between the cost of inventory and the estimated net

realizable value based upon assumptions about future demand and market conditions.

Inventory cost consists of the direct cost of merchandise

including freight.

For the years ended March 31, 2025 and 2024, the impairment loss was $870,589 and $456,209 , respectively.

(i) Prepayments and Other Receivables

Prepayments and other receivables are mainly prepayments to vendors,

prepaid expenses paid to service providers, prepaid taxes, advances to employees, and other deposits.

Management regularly reviews the

aging of such balances and changes in payment and realization trends and records allowances when management believes that the collection

of amounts due is at risk.

Accounts considered uncollectable are written off against allowances after exhaustive efforts at collection

Prepayments and other receivables are mainly prepayments

to vendors, prepaid expenses paid to service providers, prepaid taxes, advances to employees, and other deposits.

Management regularly

reviews the aging of such balances and changes in payment and realization trends and records allowances when management believes that

the collection of amounts due is at risk.

Accounts considered uncollectable are written off against allowances after exhaustive efforts

at collection are made.

As of March 31, 2025 and 2024, no allowance against prepayments and other receivables was recorded.

(j) Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation

and any recorded impairment.

Property and equipment are stated at cost less

accumulated depreciation and any recorded impairment.

The estimated useful lives are as follows:

4 unchanged sentences

Motor vehicles

Depreciation on property and equipment is calculated on the straight-line

method over the estimated useful lives of the assets.

The cost and related accumulated depreciation of assets sold or otherwise retired

are eliminated from the accounts and any gain or loss is included in the consolidated statements of operations.

Expenditures for maintenance

and repairs are charged to earnings as incurred, while additions, renewals, and betterments, which are expected to extend the useful life

of assets, are capitalized.

The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances

warrant revised estimates of useful lives.

Properties used for lease

Computer hardware and software

Depreciation on property and equipment is calculated

on the straight-line method over the estimated useful lives of the assets.

The cost and related accumulated depreciation of assets sold

or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of operations.

for maintenance and repairs are charged to earnings as incurred, while additions, renewals, and betterments, which are expected to extend

the useful life of assets, are capitalized.

The Company also re-evaluates the periods of depreciation to determine whether subsequent

events and circumstances warrant revised estimates of useful lives.

Construction in progress

Direct costs that are related to the construction of property, equipment

and software and incurred in connection with bringing the assets to their intended use are capitalized as construction in progress.

in progress is transferred to specific property, equipment and software items and the depreciation of these assets commences when the

assets are ready for their intended use.

In December 2023, the Company engaged DF Technology US Inc (“DFT”), a related

party, for certain technology services, such as enterprise resource planning system (“ERP system”).

As of March 31, 2024,

construction in progress was $ 275,000 and primarily relating to the cost incurred to develop the software from DFT.

(k) Definite-Lived Intangible Assets

The Company owns property rights of certain technologies and designs

that relate to the Underwriter Laboratories certificates issued for its products.

The Company capitalizes the costs associated with design,

development, acquisition and maintenance of its acquired property rights and amortizes these assets over their remaining useful lives

on a straight-line basis.

Any further payments made to maintain or develop the property rights would be capitalized and amortized over

the balance of the useful life for the property rights.

The estimated useful life and amortization method are reviewed at the end of each

reporting period, with the effect of any changes in the estimate being accounted for on a prospective basis.

The estimated useful lives of intangibles assets are as follows:

Direct costs that are related to the construction

of property, equipment and software and incurred in connection with bringing the assets to their intended use are capitalized as construction

Construction in progress is transferred to specific property, equipment and software items and the depreciation of these

assets commences when the assets are ready for their intended use.

In December 2023, the Company engaged DF Technology US Inc (“DFT”),

a former related party which ceased to be the related party on November 6, 2024, for certain technology services, such as enterprise resource

planning system (“ERP system”).

During the fiscal year of 2025, the Company reclassified $ 2,310,000 from construction in process

to computer hardware and software and started for depreciation.

As of March 31, 2025 and 2024, construction in progress was nil and

$ 275,000 , respectively, and primarily relating to the cost incurred to develop the software by DFT.

(k) Intangible Assets

Intangible asset is stated at cost less accumulated

amortization and amortized in a method which reflects the pattern in which the economic benefits of the intangible asset are expected

to be consumed or otherwise used up.

The balance of intangible asset represents internal use software and property rights.

is acquired externally tailored to the Company’s requirements.

The Company capitalizes the costs associated with design, development,

acquisition and maintenance of its acquired intangible assets and amortizes these assets over their remaining useful lives on a straight-line

Any further payments made to maintain or develop these assets would be capitalized and amortized over the balance of the useful

life for the assets.

The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect

of any changes in the estimate being accounted for on a prospective basis.

The estimated useful lives of intangibles assets

are as follows:

Property rights

(l) Impairment of Long-lived Assets

At the end of each reporting period, the Company reviews the carrying

amounts of its property, plant and equipment, intangible assets subject to amortization, and right-of-use assets, to determine whether

there is any indication that the carrying value of an asset may not be recoverable.

The Company assesses the recoverability of the assets

based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted

future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less

than the carrying value of the asset.

If an impairment is identified, the Company will reduce the carrying amount of the asset to its

estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values.

March 31, 2024 and 2023, no impairment of long-lived assets was recognized.

At the end of each reporting period, the Company

reviews the carrying amounts of its property and equipment, intangible assets subject to depreciation and amortization, and right-of-use

assets, to determine whether there is any indication that the carrying value of an asset may not be recoverable.

The Company assesses

the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment

loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition

of the asset, if any, are less than the carrying value of the asset.

If an impairment is identified, the Company will reduce the carrying

amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable

market values.

As of March 31, 2025 and 2024, no impairment of long-lived assets was recognized.

(m) Deferred IPO Costs

The Company complies with the requirements of FASB ASC Topic 340-10-S99-1,

“Other Assets and Deferred Costs — SEC Materials” (“ASC 340-10-S99”) and SEC Staff Accounting

Bulletin Topic 5A, “Expenses of Offering”.

Deferred IPO costs consist of underwriting, legal, accounting and other professional

expenses incurred through the balance sheet date that are directly related to the initial public offering of the Company and that will

be charged to additional paid in capital upon the completion of the offering.

The Company complies with the requirements of

FASB ASC Topic 340-10-S99-1, “Other Assets and Deferred Costs — SEC Materials” (“ASC 340-10-S99”)

and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering”.

Deferred IPO costs consist of underwriting, legal,

accounting and other professional expenses incurred through the balance sheet date that are directly related to the initial public offering

of the Company and that will be charged to additional paid in capital upon the completion of the offering.

Total deferred offering

cost of $ 502,198 as of March 31, 2024 was charged to additional paid-in capital upon IPO.

(n) Fair Value Measurements

Fair value is defined as the price that would be received for an asset,

or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.

Valuation techniques maximize

the use of observable inputs and minimize the use of unobservable inputs.

When determining the fair value measurements for assets and

liabilities, the Company considers the principal or most advantageous market in which it would transact and consider assumptions that

market participants would use when pricing the asset or liability.

The following summarizes the three levels of inputs required to measure

fair value, of which the first two are considered observable and the third is considered unobservable:

Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in

active markets.

Fair value is defined as the price that would

be received for an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.

Valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs.

When determining the fair value

measurements for assets and liabilities, the Company considers the principal or most advantageous market in which it would transact and

consider assumptions that market participants would use when pricing the asset or liability.

The following summarizes the three levels

of input required to measure fair value, of which the first two are considered observable and the third is considered unobservable:

Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Include other inputs that are directly or indirectly observable in the marketplace.

Unobservable inputs which are supported by little or no market activity.

The fair value for certain assets and liabilities such as cash, accounts

receivable, other receivables, prepayments and other current assets, short-term loans, accounts payable, contract liabilities, accrued

expenses and other payables, and tax payables have been determined to approximate carrying amounts due to the short maturities of these

The Company believes that its long-term loan to a third party approximates the fair value based on current yields for debt

instruments with similar terms.

The Company and its subsidiaries did not have any non-financial assets or liabilities that are measured

at fair value on a recurring basis as of March 31, 2024 and 2023.

The fair value for certain assets and liabilities

such as cash, accounts receivable, other receivables, prepayments and other current assets, short-term loans, accounts payable, contract

liabilities, accrued expenses and other payables, and tax payables have been determined to approximately carrying amounts due to the short

maturities of these instruments.

The Company believes that its long-term loan to a third party approximates the fair value based on current

yields for debt instruments with similar terms.

The Company and its subsidiaries did not have any non-financial assets or liabilities

that are measured at fair value on a recurring basis as of March 31, 2025 and 2024.

(o) Revenue Recognition

The Company follows the revenue accounting requirements of Accounting

Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers.

The core principle underlying the revenue

recognition of this ASC allows the Company to recognize revenue that represents the transfer of products and services to customers in

an amount that reflects the consideration to which the Company expects to be entitled in such exchange.

Product revenue

The Company follows the revenue accounting requirements

of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers.

The core principle underlying

the revenue recognition of this ASC allows the Company to recognize revenue that represents the transfer of products and services to customers

in an amount that reflects the consideration to which the Company expects to be entitled in such exchange.

This will require the Company

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on when control of products and services transfers to a customer.

To achieve that core principle, the Company applies a five-step model

to recognize revenue from customer contracts.

The five-step model requires that the Company (i) identify the contract with the customer,

(ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration

to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective

performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.

Product revenue — Performance obligation satisfied

at point in time

The Company generates substantially all its revenues from sales of

products such as smart E-bikes, E-motorcycles, E-scooters and accessories to the retail and wholesale customers through its wholly owned

subsidiaries stores.

In accordance with ASC 606, the Company’s performance obligations are satisfied upon the control of products

being passed to the customer, which is the point in time that the customers are able to direct the use of and obtain substantially all

of the economic benefit of the products or services.

The transfer of control typically occurs at a point in time based on consideration

of when the customer has an obligation to pay for the products, and physical possession of, legal title to, and the risks and rewards

of ownership of the products have been transferred, and the customer has accepted the products.

Revenue is recognized net of estimates

of variable consideration, including product returns, customer discounts and allowance.

which occurs at the point of sale, or the services

have been rendered.

Historically, the Company has not experienced any significant returns nor provided significant customer discounts.

The Company offers an assurance-type warranty to its customers.

assurance-type warranty guarantees that the product will perform as promised and is not a performance obligation.

This type of warranty

promises to repair or replace a delivered good or service if it does not perform as expected.

Since an assurance-type warranty guarantees

the functionality of a product, the warranty is not accounted for as a separate performance obligation, and thus no transaction price

is allocated to it.

Rather, to account for an assurance-type warranty the vendor should estimate and accrue a warranty liability when

the promised good or service is delivered to the customer (see ASC 460-10).

Since the contract price and term are fixed and enforceable, and an

assurance-type warranty guarantees the functionality of a product, and the warranty is not accounted for as a separate performance obligation,

no transaction price is allocated to it.

The Company recognizes sales in full at the point in time when the products are delivered or

accepted by the customers, in accordance with the acceptance term specified in the contract.

The Company records estimated future warranty

costs under ASC 460.

Such estimated costs for warranties are estimated at the time of delivery and these warranties are not service

warranties separately sold by the Company.

Generally, the estimated claim rates of warranty are based on actual warranty experience or

the Company’s best estimate.

The Company accrued $ 27,714 and $ 22,056 of warranty reserves under accrued expenses and other payables

as of March 31, 2024 and 2023, respectively.

The Company has no contract assets and contract liabilities balances as of March 31,

2024 and 2023, respectively.

Disaggregated information of revenues by business lines are as follows:

To achieve that core principle, the Company applies

a five-step model to recognize revenue from customer contracts.

The five-step model requires that the Company (i) identify the contract

with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including

variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction

price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the

performance obligation.

The Company generates substantially all its revenues

from sales of products such as smart E-bikes, E-motorcycles, E-scooters and accessories to the retail and wholesale customers through

its wholly owned subsidiaries stores.

In accordance with ASC 606, the Company’s performance obligations are satisfied upon

the control of products being passed to the customer, which is the point in time that the customers are able to direct the use of and

obtain substantially all of the economic benefit of the products or services.

The transfer of control typically occurs at a point in time

based on consideration of when the customer has an obligation to pay for the products, and physical possession of, legal title to, and

the risks and rewards of ownership of the products have been transferred, and the customer has accepted the products.

Revenue is recognized

net of estimates of variable consideration, including product returns, customer discounts and allowance.

which occurs at the point of

sale, or the services have been rendered.

Historically, the Company has not experienced any significant returns nor provided significant

customer discounts.

The Company offers an assurance-type warranty

to its customers.

An assurance-type warranty guarantees that the product will perform as promised and is not a performance obligation.

This type of warranty promises to repair or replace a delivered good or service if it does not perform as expected.

Since an assurance-type

warranty guarantees the functionality of a product, the warranty is not accounted for as a separate performance obligation, and thus no

transaction price is allocated to it.

Rather, to account for an assurance-type warranty the vendor should estimate and accrue a warranty

liability when the promised good or service is delivered to the customer (see ASC 460-10).

Since the contract price and term are fixed and

enforceable, and an assurance-type warranty guarantees the functionality of a product, and the warranty is not accounted for as a separate

performance obligation, no transaction price is allocated to it.

The Company recognizes sales in full at the point in time when the products

are delivered or accepted by the customers, in accordance with the acceptance term specified in the contract.

The Company records estimated

future warranty costs under ASC 460.

Such estimated costs for warranties are estimated at the time of delivery and these warranties

are not service warranties separately sold by the Company.

Generally, the estimated claim rates of warranty are based on actual warranty

experience or the Company’s best estimate.

The Company accrued $ 20,131 and $ 27,714 of warranty reserves under accrued expenses and

other payables as of March 31, 2025 and 2024, respectively.

The Company has no contract assets and contract liabilities balances as of

March 31, 2025 and 2024, respectively.

Rental Revenue

The Company operates rental business primarily

from the Go Fly rental mobile app and selected Fly E-Bike stores that provide users with a flexible and affordable e-bike rental option.

The Company offers rental services through its subsidiaries,

GOBIKE INC, FLYLA INC, and FLYTORONTO CORP.

All the products available for rent are owned by the Company.

The Company leases products

to customers, and as a result, the Company considers itself to be the accounting lessor, as applicable, in these arrangements in accordance

with ASC 842.

Rental business operating costs include refunded products repair fee and other operating costs, as applicable.

Due to the short-term nature of the rental business,

the Company classifies these rentals operating leases.

Revenue generated from the rental services is recognized over the rental period,

which is typically one day, one week or more.

Disaggregated information of revenues by business

lines are as follows:

For the years Ended

Revenues-retail

Revenues-wholesale

Product revenues - retail (ASC 606)

Product revenues - wholesale (ASC 606)

Revenues - rental services (ASC 842)

(p) Selling Expenses

Selling expenses mainly consist of advertising costs, marketing referring

expenses and payroll and related expenses for personnel engaged in selling and marketing activities.

Selling expenses mainly consist of advertising

costs, and payroll and related expenses for personnel engaged in selling and marketing activities.

Advertising expenses, which consist

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$ 64,423 for the years ended March 31, 2025 and 2024, respectively.

(q) Software Development Costs

ASC Topic 985-20, Software — Costs of Software

to Be Sold, Leased, or Marketed, requires companies to expense software development costs as they incur them until technological feasibility

has been established, at which time those costs are capitalized until the product is available for general release to customers.

The development

of the Fly E-Bike app is still in its preliminary stage and the development of core functions has not yet been completed.

the Company expensed the development costs of the Fly E-Bike app as they incurred.

(q) Research and Development Expenses

Research and development expenses include salaries

for the Company’s research and development personnel, as well as related development expenses paid to the third-party development

The Company recognizes internal use software acquired and internally developed in accordance with ASC 350-40 “Software—internal

use software”.

The Company expenses all costs that are incurred in connection with the planning and implementation phases of development,

and costs that are associated with maintenance of the existing software for internal use.

Certain costs associated with developing internal-use

software are capitalized when such costs are incurred within the application development stage of software development.

As a result, the

Company expensed the development costs of the Fly E-Bike app as they incurred.

For the years ended March 31, 2025 and 2024, development

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(r) Income Taxes

Current income taxes are provided based on net income/(loss) for financial

reporting purposes and adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance

with the regulations of the relevant tax jurisdictions.

Deferred taxes are accounted for using the asset and liability method

in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated

financial statements and the corresponding tax basis used in the computation of assessable tax profit.

In principle, deferred tax liabilities

are recognized for all taxable temporary differences.

Deferred tax assets (the “DTAs”) are recognized to the extent that it

is probable that taxable profit will be available against which deductible temporary differences can be utilized.

Deferred tax is calculated using tax rates that are expected to apply

to the period when the asset is realized, or the liability is settled.

Deferred tax is charged or credited in the income statement, except

when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity.

are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all the DTAs

will not be realized.

Current income taxes are provided based on net

income/(loss) for financial reporting purposes and adjusted for income and expense items which are not assessable or deductible for income

tax purposes, in accordance with the regulations of the relevant tax jurisdictions.

Deferred taxes are accounted for using the asset

and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities

in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit.

In principle,

deferred tax liabilities are recognized for all taxable temporary differences.

Deferred tax assets (the “DTAs”) are recognized

to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized.

Deferred tax is calculated using tax rates that

are expected to apply to the period when the asset is realized, or the liability is settled.

Deferred tax is charged or credited in the

income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt

with in equity.

DTAs are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion

or all the DTAs will not be realized.

Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.

An uncertain tax position is recognized as a benefit only if it is

“more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed

The amount recognized is the largest amount of tax benefit that is greater than 50 % likely of being realized on examination.

An uncertain tax position is recognized as a benefit

only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination

being presumed to occur.

The amount recognized is the largest amount of tax benefit that is greater than 50 % likely of being realized

on examination.

For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

Penalties and interest incurred

related to underpayment of income tax are classified as income tax expense in the period incurred.

The tax returns filed in 2018 to 2023

are subject to examination by any appropriate tax authorities.

For the year ended March 31, 2024, the Company accrued $ 60,487 income

tax related penalty included in taxes payable in the consolidated balance sheets.

For the year ended March 31, 2023, no penalties

and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred.

The Company accounts for leases in accordance with ASC 842.

Company leases premises for offices, warehouses, and retail stores under non-cancellable operating leases.

The Company recognizes right-of-use assets and lease liabilities for

all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition

exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Leases with an initial term of

12 months or less are short-term leases and not recognized as operating lease right-of-use assets and operating lease liabilities

on the consolidated balance sheets.

The Company recognizes lease expense for short-term leases on a straight-line basis over the lease

Right-of-use assets are initially measured at cost, which comprises

the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct

costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received.

assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the

lease liabilities.

Penalties and interest

incurred related to underpayment of income tax are classified as income tax expense in the period incurred.

The tax returns filed in 2018

to 2024 are subject to examination by any appropriate tax authorities.

For the years ended March 31, 2025 and 2024, the Company accrued

$ 30,301 and $ 60,487 income tax related penalty included in current income taxes expenses, respectively.

The Company accounts for leases in accordance

with ASC 842.

The Company leases premises for offices, warehouses, and retail stores under non-cancellable operating leases, and

the Company leases its products to customers under non-cancellable operating leases.

The Company’s lease arrangements include

products rentals to customers.

The lease term is from one hour to one month.

Due to the short-term nature of these arrangements,

the Company classifies these leases as operating leases.

The Company does not separate lease and non-lease components, such as insurance

or roadside assistance provided to the lessee, in its lessor lease arrangements.

Lease payments are primarily fixed and are recognized

as revenue in the period over which the lease arrangement occurs.

Taxes or other fees assessed by governmental authorities that are both

imposed on and concurrent with each lease revenue-producing transaction and collected by the Company from the lessee are excluded from

the consideration in its lease arrangements.

The Company mitigates residual value risk of its leased assets by performing regular maintenance

and repairs, as necessary, and through periodic reviews of asset depreciation rates based on the Company’s ongoing assessment of

present and estimated future market conditions.

The Company recognizes right-of-use assets and

lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted

for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

with an initial term of 12 months or less are short-term leases and not recognized as operating lease right-of-use assets and operating

lease liabilities on the consolidated balance sheets.

The Company recognizes lease expense for short-term leases on a straight-line basis

over the lease term.

Right-of-use assets are initially measured at

cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date,

plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives

Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any

remeasurement of the lease liabilities.

Right-of-use assets are presented on a separate line in the consolidated balance sheets.

Right-of-use assets are depreciated using the straight-line method

from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the

lease payments, which comprise fixed payments, in-substance fixed payments, variable lease payments which depend on an index or a rate.

Right-of-use assets are depreciated using the

straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of

the lease terms.

Lease liabilities are initially measured at the

present value of the lease payments, which comprise fixed payments, in-substance fixed payments, variable lease payments which depend

on an index or a rate.

The lease payments are discounted using the interest rate implicit in a lease if that rate can be readily determined.

If that rate cannot

be readily determined, the Company uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at

amortized cost using the effective interest method, with interest expense recognized over the lease terms.

When there is a change in a

lease term or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company

remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets.

However, if the carrying amount of the right-of-use

assets is reduced to zero , any remaining amount of the remeasurement is recognized in profit or loss.

Lease liabilities are presented

on a separate line in the consolidated balance sheets.

Variable lease payments that do not depend on an index or a rate are

recognized as expenses in the periods in which they are incurred.

If that rate cannot be readily determined, the Company uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities

are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms.

is a change in a lease term or a change in future lease payments resulting from a change in an index or a rate used to determine those

payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets.

However, if the carrying

amount of the right-of-use assets is reduced to zero , any remaining amount of the remeasurement is recognized in profit or loss.

liabilities are presented on a separate line in the consolidated balance sheets.

Variable lease payments that do not depend on

an index or a rate are recognized as expenses in the periods in which they are incurred.

(t) Concentration Risk

Concentration of customers and suppliers

No customers individually represented greater than 10% of total net

revenues of the Company for the years ended March 31, 2024 and 2023.

For the year ended March 31, 2024, the Company’s top three

suppliers represented 36 %, 21 % and 13 % of total purchases of the Company, respectively.

No customers individually represented greater

than 10% of total net revenues of the Company for the years ended March 31, 2025 and 2024.

For the year ended March 31, 2025, the Company’s

top three suppliers represented 33 %, 21 % and 12 % of total purchase of the Company respectively.

As of March 31, 2024, three suppliers

top two suppliers represented 42 % and 32 % of total purchases of the Company, respectively.

For the year ended March 31, 2024, the Company’s

top three suppliers represented 36 %, 21 %, and 13 % of total purchases of the Company, respectively.

As of March 31, 2025, two suppliers

accounted for 63 % and 25 % of accounts payable balance, respectively.

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Concentration of credit risk

Financial instruments that are potentially subject to credit risk consist

principally of accounts receivable.

The Company believes the concentration of credit risk in its account receivable is substantially mitigated

by its ongoing credit evaluation process and relatively short collection terms.

The Company does not generally require collateral from

The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific

customers, historical trends, and other information.

Historically, the Company did not have any bad debt on its account receivable.

Financial instruments that potentially expose the Company to concentrations

of credit risk consist principally of cash and cash equivalents, term deposits, restricted cash, short-term investments, and accounts

receivable, net.

The Company’s investment policy requires cash and cash equivalents, term deposits, restricted cash, and short-term

investments to be placed with high-quality financial institutions and to limit the amount of credit risk from any one issuer.

regularly evaluates the credit standing of the counterparties or financial institutions.

Financial instruments that are potentially subject

to credit risk consist principally of accounts receivable.

The Company believes the concentration of credit risk in its account receivable

is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms.

The Company does not generally

require collateral from customers.

The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding

the credit risk of specific customers, historical trends, and other information.

Historically, the Company did not have any bad debt on

its account receivable.

Financial instruments that potentially expose

the Company to concentrations of credit risk consist principally of cash and cash equivalents, term deposits, restricted cash, short-term

investments, and accounts receivable, net.

The Company’s investment policy requires cash and cash equivalents, term deposits, restricted

cash, and short-term investments to be placed with high-quality financial institutions and to limit the amount of credit risk from any

The Company regularly evaluates the credit standing of the counterparties or financial institutions.

(u) Related Parties

A related party is generally defined as (i) any person and or

their immediate family hold 10% or more of the Company’s securities (ii) the Company’s management and/or their immediate

family, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone

who can significantly influence the financial and operating decisions of the Company.

A transaction is considered to be a related party

transaction when there is a transfer of resources or obligations between related parties.

Related parties may be individuals or corporate

Transactions involving related parties cannot be presumed to be carried out on an arm’s length basis, as the requisite

conditions of competitive, free market dealings may not exist.

Representations about transactions with related parties, if made, shall

not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s length transactions

unless such representations can be substantiated.

(v) Earnings Per Share

The Company computes earnings per share (“EPS”) in accordance

with ASC 260, “Earnings per Share”.

A related party is generally defined as (i) any

person and or their immediate family hold 10% or more of the Company’s securities (ii) the Company’s management and/or

their immediate family, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the

Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company.

A transaction is considered

to be a related party transaction when there is a transfer of resources or obligations between related parties.

Related parties may be

individuals or corporate entities.

Transactions involving related parties cannot be presumed to be carried out on an arm’s length

basis, as the requisite conditions of competitive, free market dealings may not exist.

Representations about transactions with related

parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s

length transactions unless such representations can be substantiated.

(v) Earnings (Loss) Per Share

The Company computes earnings per share (“EPS”)

in accordance with ASC 260, “Earnings per Share”.

ASC 260 requires companies to present basic and diluted EPS.

is measured as net income divided by the weighted average common stock outstanding for the period.

Diluted EPS presents the dilutive effect

on a per share basis of the potential common stock (e.g., convertible securities, options, and warrants) as if they had been converted

at the beginning of the periods presented, or issuance date, if later.

Potential shares of common stock that have an anti-dilutive effect

(i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

For the years ended March 31, 2024 and 2023, there were no dilutive

measured as net income divided by the weighted average common stock outstanding for the period.

Diluted EPS takes into account the potential

dilution that could occur if securities or other contracts to issue ordinary shares were exercised and converted into ordinary shares.

Potential shares of common stock that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share)

are excluded from the calculation of diluted EPS.

For the year ended March 31, 2025, the Company

had potential shares of common stock issuable upon the exercise of the Representative’s Warrants (as defined below).

As the Company

incurred losses for the year ended March 31, 2025, inclusion of these potential shares of common stock would have reduced the net loss

Therefore, these potential shares were excluded from the calculation of diluted net loss per share.

For the year ended

March 31, 2024, there were no dilutive shares.

(w) Foreign Currencies Translation

Transactions denominated in currencies other than the functional currency

are translated into the functional currency at the exchange rates prevailing at the dates of the transaction.

Monetary assets and liabilities

denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange

rates at the balance sheet dates.

Transactions denominated in currencies other than

the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction.

Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency

using the applicable exchange rates at the balance sheet dates.

The resulting exchange differences are recorded in the statement of operations.

The reporting currency

of the Company is United States Dollar ($).

The Company’s subsidiary in Canada maintains its books and records in its local

currency, Canadian dollar (CAD), which is the functional currency for this subsidiary as it is the primary currency of the economic environment

in which this entity operates.

In general, for consolidation purposes, assets and liabilities of subsidiaries

whose functional currency is not United States Dollar are translated into United States Dollar in accordance with ASC Topic 830-30,

“Translation of Financial Statement”, using the exchange rate on the balance sheet date.

Revenues and expenses are translated

at average rates prevailing during the period.

The gains and losses resulting from translation of financial statements of foreign subsidiaries

are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

(x) Recent Accounting Pronouncements

The Company considers the applicability and impact of all accounting

standards updates (“ASUs”).

Management periodically reviews new accounting standards that are issued.

Under the Jumpstart

Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging

growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the

adoption of these accounting standards until they would apply to private companies.

The reporting currency of the Company is United States Dollar ($).

The Company’s subsidiary in Canada maintains its books and

records in its local currency, Canadian dollar (CAD), which is the functional currency for this subsidiary as it is the primary currency

of the economic environment in which this entity operates.

In general, for consolidation purposes, assets

and liabilities of subsidiaries whose functional currency is not United States Dollar are translated into United States Dollar

in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet

Revenues and expenses are translated at average rates prevailing during the period.

The gains and losses resulting from translation

of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within

the statement of stockholders’ equity.

(x) Representative’s Warrants

Upon the closing of the IPO in June 2024, the

Company issued to Benchmark underwriters warrants (the “Representative’s Warrants”) to purchase 25,875 shares

of common stock which warrants are also exercisable on a cashless basis.

The Company accounts for these warrants as either equity-classified

or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance

in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification ASC 480, Distinguishing Liabilities from

Equity and ASC 815, Derivatives and Hedging.

The Company accounts for its warrants as equity that meet all of the criteria (i) require

physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical

settlement or net-share settlement), the warrants are required to be recorded as a component of additional paid-in capital at the time

of issuance and subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity.

(y) Held for Sale

The Company classifies assets and liabilities

to be sold (disposal group) as held for sale in the period when all of the applicable criteria are met, including:

(i) management commits

to a plan to sell, (ii) the disposal group is available to sell in its present condition, (iii) there is an active program to locate a

buyer, (iv) the disposal group is being actively marketed at a reasonable price in relation to its fair value, (v) significant changes

to the plan to sell are unlikely, and (vi) the sale of the disposal group is generally probable of being completed within one year.

performs an assessment at least quarterly or when events or changes in business circumstances indicate that a change in classification

may be necessary.

Assets and liabilities held for sale are presented

separately within the consolidated balance sheets with any adjustments necessary to measure the disposal group at the lower of its carrying

value or fair value less costs to sell.

For each period the disposal group remains classified as held for sale, its recoverability is

reassessed, and any necessary adjustments are made to its carrying value.

The Company does not report the results of operations

of a business as discontinued operations as the disposal is not a strategic shift that will have a major effect on its operations and

financial results.

(z) Newly adopted accounting pronouncements

In November 2023, the FASB issued ASU

2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” This guidance requires a public entity to

disclose for each reportable segment, on an interim and annual basis, the significant expense categories and amounts that are regularly

provided to the chief operating decision-maker (“CODM”) and included in each reported measure of a segment’s profit

Additionally, it requires a public entity to disclose the title and position of the individual or the name of the group or committee

identified as the CODM.

This guidance is effective for fiscal years beginning after December 31, 2023, and interim periods within fiscal

years beginning after December 15, 2024.

Early adoption is permitted and the guidance should be applied retrospectively to all periods

presented in the financial statements, unless it is impracticable.

The Company plans to adopt the provisions of this guidance in conjunction

with its Form 10-K for the fiscal year ending March 31, 2025.

Improvements to Reportable Segment Disclosures.” This guidance requires a

public entity to disclose for each reportable segment, on an interim and annual basis, the significant expense categories and

amounts that are regularly provided to the chief operating decision-maker (“CODM”) and included in each reported measure

of a segment’s profit or loss.

Additionally, it requires a public entity to disclose the title and position of the individual

or the name of the group or committee identified as the CODM.

This guidance is effective for fiscal years beginning after December

15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted, and the guidance

should be applied retrospectively to all periods presented in the financial statements, unless it is impracticable.

adopted the ASU for the fiscal year ending March 31, 2025 and applied retrospectively to all prior periods presented.

of this ASU had no material impact on reportable segments identified and had no effect on the Company’s financial position,

results of operations, or cash flows.

(aa) Recent accounting pronouncements not yet

The Company considers the applicability and impact

of all accounting standards updates (“ASUs”).

Management periodically reviews new accounting standards that are issued.

the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of

an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which

delays the adoption of these accounting standards until they would apply to private companies.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes

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adoption is permitted, and this guidance should be applied prospectively but there is the option to apply it retrospectively.

plans to adopt the provisions of this guidance in conjunction with its Form 10-K for the fiscal year ending March 31, 2026.

Except as mentioned above, the Company does not believe other recently

issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated

balance sheets, statements of income and comprehensive income and statements of cash flows.

(y) Reclassification

The Company has reclassified certain prior year amounts to conform

to current year presentation.

The Company reclassified $ 279,985 from inventories reserve to changes in inventories for the year ended

March 31, 2023 in the consolidated statement of cash flows.

The reclassification had no impact to the Company’s net cash provided

by operating activities for the year ended March 31, 2023.

is currently evaluating the impact of this guidance on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03,

“Income Statement – Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation

of Income Statement Expenses, requiring public business entities to disclose additional information about specific expense categories

in the notes to the financial statements at interim and annual reporting periods, including purchases of inventory, employee compensation,

depreciation, and intangible asset amortization.” The provisions of this update are effective for annual periods beginning after

December 15, 2026, and interim reporting periods beginning after December 15, 2027, using either a prospective or retrospective approach.

The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

3 — INVENTORIES, NET

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Inventory reserves

( 1,107,569 )

Inventories, net

2 unchanged sentences

Ending Balance

As of March 31, 2024 and 2023, the inventory

allowance balance was $ 514,021 and $ 431,363 , respectively.

For the years ended March 31, 2024 and 2023, the impairment loss

was $ 456,209 and $ 151,378 , respectively.

As of March 31, 2025 and 2024, the inventory allowance

balance was $ 1,107,569 and $ 514,021 , respectively.

For the years ended March 31, 2025 and 2024, the impairment loss was $ 870,589 and $ 456,209 ,

respectively.

4 — PREPAYMENTS AND OTHER RECEIVABLES

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31, 2025 and 2024 consisted of the following:

Prepayments to vendors

Prepayments to vendors (i)

Prepaid iCloud Server

Prepayments to DMV

Prepaid insurance

Prepayments to other service providers

Prepaid income tax

Other receivable from third parties (ii)

Total Prepayment and Other Receivables

(i) As of March 31, 2025 and 2024, the prepayments to vendors were $ 2.4 million and $ 0.1 million , respectively.

The increase in prepayments to vendors was primarily due to the Company’s anticipation of growth in future sales and rental services.

The Company plans to purchase more E-vehicles and related accessories from oversea and U.S.

vendors to support the expansion in retail and rental markets.

These prepayments to vendors are expected to be settled by the end of October 2025.

(ii) On December 17, 2024, the management team approved a plan to sell 100 % of its equity interests in subsidiaries FLYMHT INC, FLY14 CORP, EDISONEBIKE INC, and FLY6AVE INC to third-party individuals (the “Buyers”).

On January 1, 2025, the Company entered into share transfer agreements with the Buyers for total cash consideration of $ 635,193 .

The full consideration should be settled in cash at closing date, which was January 1, 2025.

As of March 31, 2025, the Company did not any receive consideration (See Note - 14 — DISPOSAL OF SUBSIDIARIES).

As of March 31, 2025, the Company had other receivables of $ 29,074 from a third-party individual.

5 — PROPERTY AND EQUIPMENT, NET

Property and equipment as of March 31, 2024 and 2023 consisted

of the following:

Property and equipment as of March 31, 2025 and

2024 consisted of the following:

Furniture & Fixtures

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Leasehold improvements

Building (ii)

Computer hardware and software (i)

Construction in progress-Software

Properties for rental business (iii)

Property and Equipment

1 unchanged sentence

Property and Equipment, net

For the years ended March 31, 2024 and 2023, the depreciation

expenses were $ 272,708 and $ 145,783 , respectively.

In December 2023, the Company engaged DFT,

a related party, for certain technology services, for example ERP system.

The total contract price for the technology services provided

will be up to $ 2.5 million, which will be payable in installments as per the milestones outlined.

The final delivery of the ERP system

is scheduled for May 10, 2025, subject to adjustments mutually agreed upon by the parties in response to any changes in project scope

or unforeseen delays.

As of March 31, 2024, construction in progress was $ 275,000 and primarily relating to the cost incurred to develop

the software from DFT.

As of March 31, 2024, the Company had a prepayment of $ 1,279,000 to DFT (see Note 13 – Long-term prepayment

for software development – related parties, net).

In the future, the Company needs to pay up to $ 0.9 million to DFT.

For the years ended March 31, 2025 and 2024, the

depreciation expenses were $ 631,280 and $ 272,708 , respectively.

(i) In December 2023, the Company engaged DFT, a former related party, for certain technology services, such as ERP system.

The total contract price for the ERP system is $ 2,500,000 .

The ERP system is fully completed and delivered on May 20, 2025.

As of March 31, 2025 and 2024, the accumulative payments to DFT for development of the ERP system were $ 2,446,580 and $ 1,554,000 , respectively.

During the fiscal year of 2025, the Company started to use part of the ERP system which was valued at $ 2,310,000 and treated that part as computer hardware and software and started for depreciation.

As of March 31, 2025 and 2024, construction in progress was nil and $ 275,000 , respectively, and primarily relating to the cost incurred to develop the software by DFT.

As of March 31, 2025 and 2024, the Company had a prepayment of $ 136,580 and $ 1,279,000 , respectively, to DFT (see Note 13 – Long-term prepayment for software development – related parties, net).

(ii) On August 12, 2024, the

Company entered into a purchase agreement with He’s Realty Holdings LLC (the “Seller”), a third party, to purchase

an office property.

The final purchase price of the property was $ 3,594,000 and closing cost was $ 69,215 .

The Company paid $ 628,211 in

cash to the Seller, withdrew $ 1,235,004 from its line of credit with Peapack-Gladstone Bank, and financed the remaining $ 1,800,000 .

August 13, 2024, the Company’s subsidiary, AOFL LLC, obtained a one-year short-term loan of $ 1,800,000 from He’s Realty Holdings

LLC with an annual interest rate of 6.5 %.

The principal amount shall be paid to He’s Realty Holdings LLC in one or more installments

on or before August 11, 2025, and during the one-year borrowing period, AOFL LLC needs to pay interest of $ 9,750 to He’s Realty

Holdings LLC on a monthly basis.

The collateral provided was the office purchased by AOFL LLC.

The loan was paid off in full on November

(iii) In October 2024, the Company started to offer rental services through its subsidiaries, GOBIKE INC, in New York, FLYLA INC, in Log Angeles, and FLYTORONTO CORP, in Toronto.

The rental term is from one hour to one month.

In New York, the Company offers a single model of E-Bike for rent, FLY 11 PRO GOFLY as of the date of this report.

In Log Angeles, the Company offers 31 types of E-Bikes and E-scooters for rent, including FLY AIR2, FLY TANK, and FLY 11 PRO.

In Toronto, the Company offers three types of E-Bikes for rent, FLY 7, FLY 11, and FLY 11 PRO.

6 — INTANGIBLE ASSETS, NET

Intangible assets as of March 31, 2024 and 2023 consisted of

the following:

Intangible assets as of March 31, 2025 and 2024

consisted of the following:

Property rights

2 unchanged sentences

Intangible assets, net

For the years ended March 31, 2024 and 2023, the amortization

expenses were $ 1,648 and nil , respectively.

For the years ended March 31, 2025 and 2024, the

amortization expenses were $ 65,091 and $ 1,648 , respectively.

In July 2024, the Company engaged DFT, a former

related party, to develop a new APP, GO FLY APP, for the rental business.

The total contract price for the GO FLY APP is $ 500,000 , and

the GO FLY APP was delivered on September 5, 2024.

7 — ACCRUED EXPENSES AND OTHER PAYABLES

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Accrued freight in cost

Accrued UL penalty (i)

Accrued professional fee

Accrued Expenses and Other Current Liabilities

(i) See Note 12 — Commitments and contingencies

8 — LOAN PAYABLE

A summary of the Company’s loans is listed as follows:

A summary of the Company’s loans is listed

Lender Due Date March 31,

2025 March 31,

Flushing Bank (i) June 1, 2027 $ —

Chase Bank (ii) October 25, 2027 176,366 214,529

Chase Bank (iii) January 12, 2028 56,580 68,051

Chase Bank (x) September 28, 2028 221,197 —

Xuper Funding (iv)(v) May 01, 2023 —

Leaf Capital Funding, LLC (vi) September 30, 2027 46,856 58,263

Sinoelite Corp (vii) April 03, 2024 100,000 100,000

Automobile Loan – Honda (viii) June 25, 2027 28,833 —

Bank of Hope (ix) September 15, 2024 391,227 —

Bank of Hope (ix) September 22, 2024 400,000 —

Bank of Hope (ix) December 12, 2024 205,000 —

Chase Bank (i) October 25, 2027 —

Chase Bank (ii) January 12, 2028 301 56,580

Chase Bank (vii) September 28, 2028 —

Leaf Capital Funding, LLC (iii) September 30, 2027 34,620 46,856

Sinoelite Corp (iv) April 3, 2024 —

Automobile Loan – Honda (v) June 25, 2027 20,353 28,833

Bank of Hope (vi) September 15, 2024 —

Bank of Hope (vi) September 22, 2024 —

Bank of Hope (vi) December 12, 2024 —

Milea Truck Sales of Queens Inc.

(viii) August 22, 2027 106,093 —

Milea Truck Sales of Queens Inc.

(viii) July 26, 2027 76,779 —

Peapack-Gladstone Bank (ix) August 31, 2025 4,936,058 —

Veiocity Commercial Capital, LLC (x) December 1, 2054 1,927,729 —

AOWINV LLC (xi) December 1, 2054 255,000 —

Total loan payables 7,356,933 1,626,059

Current portion of loan payables ( 1,213,242 ) ( 412,224 )

Short-term loan payables ( 5,191,058 ) —

Current portion of long-term loan payables ( 100,835 ) ( 1,213,242 )

Long-term loan payables $ 2,065,040 $ 412,817

(i) On June 14, 2022, Ctate (now merged into Fly E-Bike,

Inc.) obtained a five-year long-term loan of $ 500,000 from Flushing Bank with an annual interest rate of 7 %.

The collateral provided

includes all of Ctate’s inventory, accounts, notes, machinery, equipment, fixtures and other products, and any proceeds and products

generated from these items in any form.

On September 20, 2023, the Company paid off this loan in full.

(ii) On October 25, 2022, the Company’s subsidiary, Universe

(i) On October 25, 2022, the Company’s subsidiary, Universe

obtained a five-year long-term loan of $ 230,000 from JPMorgan Chase Bank, N.A.

5 unchanged sentences

of its properties, whether now owned or hereinafter acquired and whether now existing or hereafter arising.

From April 1 to June

26, 2024, the Company paid $9,888 on principal and interest of the loan.

(iii) On January 12, 2023, the Company’s subsidiary, Arfy Corp.

On August 9, 2024, the Company

paid off this loan in full.

(ii) On January 12, 2023, the Company’s subsidiary, Arfy Corp.

obtained a five-year long-term loan of $ 70,000 from JPMorgan Chase Bank, N.A.

4 unchanged sentences

whether now owned or hereinafter acquired and whether now existing or hereafter arising.

From April 1 to June 26, 2024, the Company

paid $4,455 on principal and interest of the loan.

(iv) On January 11, 2023, Fly E-Bike, Inc.

obtained a seven-month

short-term loan of $ 250,000 from Xuper Funding with annual interest rate of 136 %.

On May 1, 2023, the Company paid off this loan

(v) On February 23, 2023, Fly E-Bike, Inc.

obtained a seven-month

short-term loan of $ 100,000 from Xuper Funding with an annual interest rate of 54 %.

On May 1, 2023, the Company paid off this loan

(vi) On August 24, 2022, Universe King Corp.

On August 9, 2024, the Company paid $ 52,069 and

as of March 31, 2025, the outstanding balance is $ 301 .

(iii) On August 24, 2022, Universe King Corp.

obtained a five-year long-term

3 unchanged sentences

all other substitutions, renewals, replacements and improvements and all proceeds of the foregoing.

From April 1 to June 26, 2024,

the Company paid $3,785 on principal and interest of the loan.

(vii) On January 3, 2023, Fly E-Bike, Inc.

obtained a one-year

and three-month long-term loan of $ 100,000 from Sinoelite Corp with no interest.

On April 25, 2024, the Company paid off this loan in

(viii) On June 12, 2023, Flyebikemiami Inc obtained a four-year long-term

loan of $ 34,974 from AutoNation Honda Miami Lakes with an annual interest rate of 3.98 %.

The collateral provided was the Honda vehicle

purchased by Flyebikemiami Inc.

From April 1 to June 26, 2024, the Company paid $1,579 on principal and interest of the loan.

(ix) On September 20, 2023, Fly-E Group, Inc obtained a line

of credit of $ 1,000,000 from Bank of Hope with a floating annual interest rate, currently at 8.5 %.

On the same date, the Company withdrew

$ 391,226 from Bank of Hope to pay off the loan balance with Flushing Bank as of September 15, 2023.

On September 22, 2023 and

December 12, 2023, the Company withdrew $ 400,000 and $ 205,000 , respectively, from Bank of Hope to support its business operations.

As of March 31, 2025, the outstanding

balance is $ 34,620 .

From April 1 to July 15, 2025, the Company paid $ 3,785 on principal and interest of the loan.

(iv) On January 3, 2023, Fly E-Bike, Inc.

obtained a one-year and three-month long-term loan of $ 100,000 from Sinoelite Corp with no interest.

On April 25, 2024, the Company paid off this loan in full.

(v) On June 12, 2023, Flyebikemiami Inc obtained a four-year long-term loan of $ 34,974 from AutoNation Honda Miami Lakes with an annual interest rate of 3.98 %.

The collateral provided was the Honda vehicle purchased by Flyebikemiami Inc.

As of March 31, 2025, the outstanding balance is $ 20,353 .

From April 1 to July 15, 2025, the Company paid $ 2,368 on principal and interest of the loan.

(vi) On September 20, 2023, Fly-E Group, Inc obtained a line of credit of $ 1,000,000 from Bank of Hope with a floating annual interest rate, currently at 8.5 %.

On the same date, the Company withdrew $ 391,226 from Bank of Hope to pay off the loan balance with Flushing Bank as of September 15, 2023.

On September 22, 2023 and December 12, 2023, the Company withdrew $ 400,000 and $ 205,000 , respectively, from Bank of Hope to support its business operations.

Zhou Ou, the Company’s Chief Executive Officer, and Mr.

Ke Zhang, the Company’s Chief Human Resource Officer, provided

a guarantee on this loan.

Ke Zhang, the Company’s Chief Human Resource Officer, provided a guarantee on this loan.

To secure payment and performance of the liabilities, Fly-E Group pledged to Bank of Hope the following items:

inventory, chattel paper, accounts, equipment, and general intangibles of first 29 incorporated subsidiaries of the Company.

(x) On October 2, 2023, the Company’s subsidiary, Fly14 Corp.

On August 9, 2024, the Company paid off this loan in full.

(vii) On October 2, 2023, the Company’s subsidiary, Fly14 Corp.

obtained a five-year long-term loan of $ 240,000 from JPMorgan Chase Bank, N.A.

with an annual interest rate of 10.40 %.

To secure payment

and performance of the liabilities, Fly14 Corp.

pledged to JPMorgan Chase Bank, N.A., a continuing security interest in all of its right,

title and interest in all of its properties, whether now owned or hereinafter acquired and whether now existing or hereafter arising.

From April 1 to June 26, 2024, the Company paid $10,329 on principal and interest of the loan.

For the years ended March 31, 2024 and 2023, the total interest

expenses on the Company’s outstanding loans amounted to $ 152,050 and $ 100,387 , respectively.

To secure payment and performance of the liabilities, Fly14 Corp.

pledged to JPMorgan Chase Bank, N.A., a continuing security interest in all of its rights, title and interest in all of its properties, whether now owned or hereinafter acquired and whether now existing or hereafter arising.

On August 9, 2024, the Company paid off this loan in full.

(viii) On August 22, 2024, Fly E-Bike, Inc.

obtained a three-year long-term loan of $ 128,132 from Milea Truck Sales of Queens Inc.

with an annual interest rate of 9.90 %.

The collateral provided was the FTR 2025 vehicle purchased by Fly E-Bike, Inc.

As of March 31, 2025, the outstanding balance is $ 106,093 .

From April 1 to July 15, 2025, the Company paid $ 12,385 on principal and interest of the loan.

On July 26, 2024, Fly E-Bike, Inc.

obtained a three-year long-term loan of $ 96,506 from Milea Truck Sales of Queens Inc.

with an annual interest rate of 7.03 %.

The collateral provided was the NRR-CAB 2025 vehicle purchased by Fly E-Bike, Inc.

As of March 31, 2025, the outstanding balance is $ 76,779 .

From April 1 to July 15, 2025, the Company paid $ 8,943 on principal and interest of the loan.

(ix) On August 5, 2024, Fly-E Group, Inc obtained a line of credit of $ 5 million from Peapack-Gladstone Bank with a floating annual interest rate and the current annual interest rate is 8.8 %.

On August 5, 2024, the Company withdrew from this line of credit to pay off the outstanding principal and interest of loans from Bank of Hope in total of $ 996,476 and the loan from JPMorgan Chase Bank, N.A obtained by Fly14 Corp in total of $ 208,601 .

On August 6, 2024, the Company withdrew in total $ 214,905 from this line of credit to pay off the outstanding principal and interest of loans from JPMorgan Chase Bank, N.A.

From August 7, 2024 to August 19, 2024, the Company withdrew $ 3,490,000 from the line of credit.

Zhou Ou, the Company’s Chief Executive Officer, and Mr.

Ke Zhang, the Company’s Chief Human Resource Officer, provided a guarantee on this loan.

To secure payment and performance of the liabilities, Fly-E Group granted Peapack-Gladstone Bank a continuing lien on and security interest in all assets of the Company, 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 of first 39 incorporated subsidiaries of the Company.

From January 1 to February 19, 2025, the Company paid $ 102,492 on interest of the line of credit.

(x) On November 27, 2024, the Company’s subsidiary, AOFL LLC (the “borrower”) obtained four thirty-year long-term loans of $ 525,000 , $ 560,000 , $ 595,000 , and $ 420,000 , respectively, from Veiocity Commercial Capital, LLC (the “lender”) with an annual interest rate of 11.24 %.

The lender charged a total of $ 170,933 loan settlement fees for closing the loan which included attorney fee, escrow fee, origination fee, and so on.

The Company amortized the $ 170,933 over the loan term.

To secure payment and performance of the liabilities, AOFL LLC pledged to Veiocity Commercial Capital, LLC a continuing lien on and security interest in any and all deposits or other sums at any time credited by or due from lender to the borrower and any cash, securities, instruments or other property of the borrower in the possession of lender.

From April 1 to July 15, 2025, the Company paid $ 61,142 on principal and interest of the loan.

On August 13, 2024, the Company’s subsidiary, AOFL LLC, obtained a one-year short-term loan of $ 1,800,000 from He’s Realty Holdings LLC with an annual interest rate of 6.5 %.

The principal amount shall be paid to He’s Realty Holdings LLC in one or more installments on or before August 11, 2025, and during the one-year borrowing period, AOFL LLC only needs to pay interest of $ 9,750 to He’s Realty Holdings LLC on a monthly basis.

The collateral provided was the office purchased by AOFL LLC.

The loan was paid off in full on November 29, 2024.

(xi) On February 10, 2023, Fly E-Bike, Inc.

obtained a five-month short-term loan of $ 255,000 from AOWINV LLC with no interest.

On June 10, 2025, the Company paid off this loan in full.

For the years ended

March 31, 2025 and 2024, the total interest expenses on the Company’s outstanding loans amounted to $ 405,615 and $ 152,050 ,

respectively.

The weighted average interest rate on short-term borrowings outstanding as of March 31, 2025 and 2024 was 13.1 % and

nil , respectively.

9 — STOCKHOLDER’S EQUITY

Prior to the effectiveness of the stock split discussed below, the

Company was authorized to issue 400 shares of common stock having a par value of $ 0.01 per share and 40 shares of preferred stock having

a par value of $ 0.01 per share.

There were 200 shares of common stock were issued and outstanding prior to the effectiveness of the stock

On March 27, 2024, the Company’s board of directors approved

a 1-for-110,000 stock split of the Company’s capital stock.

Prior to the effectiveness of the 2024 Stock Split and 2025 Reverse

Stock Split discussed below, the Company was authorized to issue 400 shares of common stock having a par value of $ 0.01 per share and

40 shares of preferred stock having a par value of $ 0.01 per share.

There were 200 shares of common stock were issued and outstanding

prior to the effectiveness of the stock splits.

2024 Stock Split

On March 27, 2024, the Company’s board of

directors approved a 1-for-110,000 stock split of the Company’s capital stock.

The stock split became effective on April 2, 2024.

The par value of

the Company’s common stock remained unchanged at $ 0.01 per share, and the number of authorized shares of the Company’s capital

stock was increased from 440 to 48,400,000 , with the number of authorized shares of common stock and preferred stock being increased from

400 to 44,000,000 and from 40 to 4,400,000 , respectively.

As of March 31, 2024 and 2023, the subscription receivable represents

the unpaid capital contribution of $ 219,998 by the stockholders.

The par value of the Company’s common stock remained unchanged at $ 0.01 per share, and the number of authorized shares of the Company’s

capital stock was increased from 440 to 48,400,000 , with the number of authorized shares of common stock and preferred stock being increased

from 400 to 44,000,000 and from 40 to 4,400,000 , respectively.

On June 7, 2024, the Company amended and restated the certificate of incorporation

to authorize the Company to issue up to 110,000,000 shares.

The par value of the Company’s common stock remained unchanged at $ 0.01

per share, and the number of authorized shares of the Company’s capital stock increased to 110,000,000 , with the number of authorized

shares of common stock and preferred stock being increased 100,000,000 and 10,000,000 , respectively.

On March 10, 2025, the Company amended

and restated the certificate of incorporation to authorize the Company to increase the authorized shares of common stock of the Company

from 100,000,000 shares to 300,000,000 shares.

The par value of the Company’s common stock remained unchanged at $ 0.01 per share.

On June 7, 2024, the Company completed its initial

public offering and issued 450,000 shares of common stock, at a price of $ 20.00 per share.

The gross proceeds of the offering were $ 9.0

million, prior to deducting the underwriting discounts, commissions and offering expenses payable by the Company.

In addition, the Company

granted the underwriters a 30-day option to purchase an additional 67,500 shares of common stock at the initial public offering price,

less underwriting discounts and commissions, to cover over-allotments.

On June 25, 2024, the Company issued an additional 67,500 shares

of common stock to the underwriters for gross proceeds of $ 1.4 million upon full exercise of the underwriters’ over-allotment option.

Net proceeds received by the Company from the initial public offering, including the exercise of over-allotment option, were approximately

$ 9.2 million.

2025 Reverse Stock Split

On July 3, 2025, the Company implemented a 1-for-5

reverse stock split of its issued and outstanding shares of common stock.

The reverse stock split reduced the number of shares of common

stock issued and outstanding from 24,587,500 to 4,917,500 as of March 31, 2025.

The par value per share remained unchanged at $ 0.01 .

The reverse stock split was accounted for retrospectively

in the accompanying consolidated financial statements and notes for all periods presented.

All references to the number of shares of common

stock, including per share amounts, have been adjusted to reflect the reverse stock split.

Upon the closing of IPO offering in June 2024,

the Company issued to Benchmark the representative of the underwriters warrants to purchase 25,875 shares of common stock.

The Representative’s

Warrants have an exercise price equal to $ 20.00 per share and are exercisable until the date on June 7, 2029, after the date of commencement

on December 7, 2024.

The Representative’s Warrants are also exercisable on a cashless basis.

As the Representative’s Warrants

are considered indexed to the Company’s own stock and meet the criteria for equity classification according to ASC:815-40, the Representative’s

Warrants are classified as equity.

None of the Representative’s Warrants were exercised as of March 31, 2025.

The fair value of the warrant, using the Black-Scholes

Model on the date of issuance was $ 274,472 .

The key inputs into the Black-Scholes Model variables were as follows at measurement date:

Risk-free interest rate

Exercise price

Dividend yield

The stock price and exercise prices stated herein

have been retroactively adjusted to reflect the reverse stock split that occurred in July 2025.

The following table summarizes the Company’s

activities and status of the Representative’s Warrants:

Exercise Price

Remaining Term

Outstanding as of March 31, 2024 —

Issued 25,875 $ 20.00 4.2

Forfeited or expired —

Outstanding as of March 31, 2025 25,875 $ 20.00 4.2

The number of shares and warrants, as well as

the exercise prices stated herein, have been retroactively adjusted to reflect the reverse stock split that occurred in July 2025.

As of March 31, 2025 and 2024, the subscription

receivable represents the unpaid capital contribution of $ 219,998 by the stockholders.

During the year ended March 31, 2024, Mr.

Ou paid certain

vendors of the Company to settle certain accounts payable balance on behalf the Company.

paid certain vendors of the Company to settle certain accounts payable balance on behalf the Company.

On June 30, 2023, the Company transferred

1 unchanged sentence

Ou as capital contribution (see Note 13).

As of March 31, 2024, a total of $ 2.4 million were transferred and recorded as

capital contribution (see Note 13).

On June 30, 2023, a total of $ 2.4 million were transferred and recorded as capital

contribution (see Note 13).

10 — INCOME TAX

(a) Income Tax Expense

The company conduct business both domestically and internationally

and, as a result, the parent company and most of its subsidiaries file a consolidated income tax return in U.S.

federal, U.S.

The company conduct business both domestically

and internationally and, as a result, the parent company and most of its subsidiaries file a consolidated income tax return in U.S.

states and U.S.

Cities, and one of the subsidiaries files a foreign income tax return in certain foreign jurisdictions.

The Company will file a consolidated annual U.S.

federal tax return

for tax year ending March 31, 2024, as well as combined tax returns for New Jersey, New York State, Florida, Texas, California, District

of Columbia, and New York City.

Most subsidiaries of the Company were incorporated in the State of New York and are subject to the U.S.

federal tax return for tax year ending March 31, 2025, as well as combined tax returns for New Jersey, New York State, Florida, Texas,

California, District of Columbia, Massachusetts, Maryland, and New York City.

Most subsidiaries of the Company were incorporated in the

State of New York and are subject to the U.S.

federal corporate income taxes with a tax rate of 21.0 %.

The State of New York levies a corporate income tax rate of 8.45 % on state-level

In addition, a sum of fixed dollar minimum taxes is imposed on the taxable group members, in accordance with their gross receipts

within the State of New York.

The City of New York levies a 6.50 % city corporate income tax, along with a sum of fixed dollar minimum

taxes, applied to taxable group members based on their gross receipts within the city.

Four of the Company’s subsidiaries are located

in New Jersey, which imposes a state income tax rate of 9.0 %.

One of the Company’s subsidiaries is located in Florida, which imposes

The State of New York levies a

corporate income tax rate of 8.45 % on state-level earnings.

In addition, a sum of fixed dollar minimum taxes is imposed on the taxable

group members, in accordance with their gross receipts within the State of New York.

The City of New York levies a 6.50 % city corporate

income tax, along with a sum of fixed dollar minimum taxes, applied to taxable group members based on their gross receipts within the

Five of the Company’s subsidiaries are located in New Jersey, which imposes a state income tax rate of 9.0 %.

Two of the Company’s

subsidiaries is located in Florida, which imposes a state income tax rate of 5.5 %.

Two subsidiaries of the Company are located in Texas,

which imposes a state income tax rate of 0.75 % on the appointed state revenue.

One of the Company’s subsidiaries is located in California,

which imposes a state income tax rate of 8.84 %.

One of the Company’s subsidiaries is located in District of Columbia, which imposes

a state income tax rate of 8.25 %.

Two subsidiaries of the Company are located in Texas, which imposes a state income tax rate of 0.75 %

on the appointed state revenue.

One of the Company’s subsidiaries is located in California, which imposes a state income tax rate

One of the Company’s subsidiaries is located in District of Columbia, which imposes a state income tax rate of 8.25 %.

The Company’s wholly owned foreign subsidiary in Canada will file a

Canadian federal tax return for tax year ending March 31, 2024, as well as Ontario state tax return.

It is subject to the Canadian federal

corporate income taxes with a tax rate of 15.0 % and Ontario state corporate income taxes with a tax rate of 11.5 %.

Income tax on unappropriated earnings is accrued during the period

the earnings arise and adjusted to the extent that distributions are approved by the stockholders in the following year.

Income tax expense for the years ended March 31, 2024 and 2023 amounted

to $ 1.18 million and $ 0.82 million, respectively.

Significant components of the provision for income taxes are as follows:

For the Year Ended

The provision for income taxes is based on the following pretax income

For the Year Ended

For the year ended March 31, 2024, the total pre-tax income was $ 3.1

million, which included $ 3.3 million pre-tax income in U.S.

One of the Company’s subsidiaries is located in Massachusetts, which imposes a state income tax

rate of 8.25 %.

One of the Company’s subsidiaries is located in Maryland, which imposes a state income tax rate of 8.00 %.

The Company’s wholly owned foreign subsidiary

in Canada will file a Canadian federal tax return for tax year ending March 31, 2025, as well as Ontario state tax return.

It is subject

to the Canadian federal corporate income taxes with a tax rate of 15.0 % and Ontario state corporate income taxes with a tax rate of 11.5 %.

Income tax on unappropriated earnings is accrued

during the period the earnings arise and adjusted to the extent that distributions are approved by the stockholders in the following year.

Income tax expense for the years ended March 31,

2025 and 2024 amounted to $ 0.34 million and $ 1.18 million, respectively.

Significant components of the provision for income

taxes are as follows:

For the years ended

The provision for income taxes is based on the

following pretax income (loss):

For the years ended

$ ( 4,690,634 )

$ ( 4,954,993 )

For the years ended March 31, 2025, the total

pre-tax loss was $ 4.9 million, which included $ 4.7 million pre-tax loss in the U.S.

and $ 0.2 million pre-tax loss in Canada.

For the year ended March 31 2023,

the total pre-tax income was $ 2.2 million all of which was generated in the U.S.

The following table reconciles to the Company’s effective tax

For the Year Ended

Pre-tax book income

ended March 31, 2024, the total pre-tax income was $ 3.1 million, which included $ 3.3 million pre-tax income in U.S.

and $ 0.2 million pre-tax

loss in Canada.

The following table reconciles to the Company’s

effective tax rate:

For the years ended

Pre-tax book (loss) income

$ ( 4,954,993 )

Federal Statutory rate

3 unchanged sentences

Permanent differences

Valuation allowance of deferred tax assets

Return to project adjustment

Penalties and interest incurred related to underpayment of income tax

are classified as income tax expenses in the period incurred.

For the years ended March 31, 2024, the Company accrued $ 60,487 in

income tax related penalty included in taxes payable in the consolidated balance sheets.

Penalties and interest incurred related to underpayment

of income tax are classified as income tax expenses in the period incurred.

For the years ended March 31, 2025 and 2024, the Company accrued

$ 30,301 and $ 60,487 income tax related penalty included in current income taxes expenses, respectively.

United States

Income tax expense for the year ended March 31, 2024 and 2023 amounted

to $ 1.22 million and $ 0.82 million, respectively.

Significant components of the provision for income taxes are as follows:

For the Year Ended

Fly Toronto Corp, a subsidiary of the Company, was formed under the

laws of Canada and conducts its business primarily in Canada.

Income tax benefit for the year ended March 31, 2024 and

2023 amounted to $ 40,007 and nil , respectively.

Income tax expense for the year ended March 31,

2025 and 2024 amounted to $ 0.40 million and $ 1.22 million, respectively.

Significant components of the provision for income

taxes are as follows:

For the Years Ended

Fly Toronto Corp, a subsidiary of the Company,

was formed under the laws of Canada and conducts its business primarily in Canada.

Income tax benefit for the year ended March 31,

2025 and 2024 amounted to $ 59,829 and 40,007 , respectively.

Significant components of the provision for income taxes are as follows:

For the Year Ended

For the Years Ended

(b) Deferred Tax Assets (Liabilities)

Net DTAs as of March 31, 2024 amounted to $ 35,199 , and as of March 31,

2023, net Deferred Tax Assets (the “DTLs”) amounted to $ 211,100 .

Net DTAs as of March 31, 2025 and 2024 amounted

to $ 94,983 and $ 35,199 , respectively.

Significant components of DTAs (DTLs), net are as follows:

1 unchanged sentence

Inventory reserve

Lease liability

Valuation allowance

Operating right-of-use liability

Amortization difference

Total deferred tax assets (DTAs)

Valuation allowance

( 1,714,000 )

Deferred tax assets, net of valuation allowance

Accumulated depreciation

Operating lease right-of-use assets

( 4,494,000 )

3 unchanged sentences

( 6,001,133 )

Total deferred tax assets, net

Deferred tax assets, net

Deferred tax assets (liabilities) – U.S., net

Deferred tax assets – Canada, net

As of March 31, 2024 and 2023, the Company had approximately $ 6.04 million

and $ 3.95 million, respectively, in the DTAs, which respectively included approximately $ 0.04 million and $ 0.09 million

related to net operating loss carryforwards that can be used to offset taxable income in future periods, $ 5.81 million and $ 3.70 million

related to lease liability, and $ 0.19 million and $ 0.16 million related to inventory allowance.

As of March 31, 2024 and 2023, the Company had approximately $ 6.00

million and $ 3.74 million, respectively, which included $ 0.48 million and $ 0.23 million, respectively, in the DTLs that related

to accumulated depreciation and $ 5.52 million and $ 3.51 million related to ROU asset.

Deferred tax assets and liabilities are recognized for the estimated

future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities

and their respective tax bases, and operating loss and tax credit carryforwards.

As of March 31, 2024 and 2023, the Company recorded

approximately $ 0.04 million and $ 0.21 million, respectively, in the net DTAs.

As of March 31, 2025 and 2024, the Company

had approximately $ 5.0 million and $ 6.0 million, respectively, in the DTAs, which respectively included approximately $ 1.5 million and

$ 40,332 related to net operating loss carryforwards that can be used to offset taxable income in future periods, $ 4.8 million and

$ 5.8 million related to lease liability, and $ 0.4 million and $ 0.2 million related to inventory allowance.

As of March 31, 2025 and 2024, the Company

had approximately $ 5.0 million and $ 6.0 million, respectively, which included $ 0.5 million and $ 0.5 million, respectively, in

the DTLs that related to accumulated depreciation and $ 4.5 million and $ 5.5 million related to ROU assets.

Deferred tax assets and liabilities are recognized

for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets

and liabilities and their respective tax bases, and operating loss and tax credit carryforwards.

As of March 31, 2025 and 2024, the

Company recorded approximately $ 94,983 and $ 40,199 , respectively, in the net DTAs.

The tax losses in Canada can be carried forward for

1 unchanged sentence

The tax losses of entities in Canada will begin to expire in 2044, if not utilized.

March 31, 2024, management considered it more likely than not that the Company will have sufficient taxable income in the future

As of March 31, 2025, management considered it more likely than not that the Company will have sufficient taxable income in the future

that will allow the Company to realize these net DTAs.

For the year ended March 31, 2024 and 2023, the Company’s

pre-tax book income in the U.S.

was approximately $ 3.08 million and $ 2.20 million, respectively, and all of previous net tax

loss carry forward was used to reduce taxable income in the current period.

In addition, for the years ended March 31, 2024 and 2023,

the Company’s pre-tax book loss in Canada was approximately $ 0.20 million and nil , respectively.

As a result of the Tax Cuts and Jobs Act (TCJA),

US NOLs arising after December 31, 2017, may be carried forward indefinitely and can offset only up to 80 % of taxable income in any future

Based upon the Company’s recent taxable loss history, the Company performed an analysis and determined that it was necessary

to establish a valuation allowance of $1,714,000 with respect to its net deferred income tax assets as of and for the fiscal year ended

March 31, 2025.

Uncertain Tax Positions

The Company evaluates each uncertain tax position (including the potential

application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions.

As of March 31, 2024 and 2023, the Company did not have any significant unrecognized uncertain tax positions.

Effective on April 1, 2019, the Company adopted Topic 842.

The Company evaluates each uncertain tax position

(including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits

associated with the tax positions.

As of March 31, 2025 and 2024, the Company did not have any significant unrecognized uncertain

tax positions.

The Company adopted Topic 842 for all periods

At the inception of a contract, the Company determines if the arrangement is, or contains, a lease.

The leases of the Company mainly consisted

of offices, retail stores and warehouses.

The Company’s operating right-of-use (“ROU”) assets

and lease liabilities were as follows:

The leases of the Company

mainly consisted of offices, retail stores, and warehouses.

The Company’s operating right-of-use (“ROU”)

assets and lease liabilities were as follows:

Operating ROU:

4 unchanged sentences

Total lease liabilities

The Company had 38 and 31 leases as of March 31, 2024 and 2023,

respectively.

The weighted average lease term, discount rates, and remaining lease

terms for the operating leases as of March 31, 2024 were as follows:

The Company had 36 and 38 leases as of March 31,

2025 and 2024, respectively.

The weighted average lease term, discount rates,

and remaining lease terms for the operating leases as of March 31, 2025 were as follows:

Remaining lease term and discount rate:

1 unchanged sentence

Weighted average remaining lease term (years) 4.67 years

The weighted average lease term, discount rates, and remaining lease

terms for the operating lease as of March 31, 2023 were as follows:

The weighted average lease term, discount rates,

and remaining lease terms for the operating leases as of March 31, 2024 were as follows:

Remaining lease term and discount rate:

1 unchanged sentence

Weighted average remaining lease term (years) 5.51 years

The Company leases its offices, warehouse, and retail stores under

non-cancellable operating lease agreements.

Lease expenses were $ 3.31 million, including $ 0.66 million cost of goods-occupancy

cost, $ 2.42 million rent expense in selling expense, and $ 0.23 million rent expense in general and administrative expense for

the year ended March 31, 2024.

Lease expenses were $ 2.34 million, including $ 0.48 million cost of goods-occupancy cost,

$ 1.74 million rent expense in selling expense, and $ 0.12 million rent expense in general and administrative expense for the

year ended March 31, 2023.

As of March 31, 2024, future minimum lease liabilities, all under

office and facilities non-cancellable operating lease agreements, were as follows:

The Company leases its offices, warehouse, and

retail stores under non-cancellable operating lease agreements.

During the year ended March 31, 2025, lease expenses were $ 4.3 million,

including $ 1.4 million in cost of goods-occupancy cost, $ 2.9 million in rent expense included in selling expense, and $ 62,527

in rent expense in general and administrative expense.

During the year ended March 31, 2024, lease expenses were $ 3.3 million, including

$ 0.7 million in cost of goods-occupancy cost, $ 2.4 million in rent expense in selling expense, and $ 0.2 million in rent

expense in general and administrative expense.

For the year ended March 31, 2025, the Company

terminated 12 leases.

As of March 31, 2025, future minimum lease liabilities,

all under office and facilities non-cancellable operating lease agreements, were as follows:

As of March 31

4 unchanged sentences

12 — COMMITMENTS AND CONTINGENCIES

The Company has not entered any off-balance sheet financial guarantees

or other off-balance sheet commitments to guarantee the payment obligations of any third parties.

The Company has not entered any derivative

contracts that are indexed to its shares and classified as shareholder’s equity or that are not reflected in its consolidated financial

Furthermore, the Company does not have any retained or contingent interest in assets transferred to an unconsolidated entity

that serves as credit, liquidity or market risk support to such entity.

The Company does not have any variable interest in any unconsolidated

entity that provides financing, liquidity, market risk or credit support to itself or engages in leasing, hedging or product development

services with itself.

As of March 31, 2024, the remaining commitment amount for purchase of software development is $ 946,000 , and

the Company will pay this amount within one year.

As of March 31, 2024, the remaining commitment amount for purchase of office property

is $ 3,144,000 , and the Company will pay $ 1,589,700 within one year and mortgage the rest $ 1,554,300 .

The Company has not entered any off-balance sheet

financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties.

The Company has

not entered any derivative contracts that are indexed to its shares and classified as shareholder’s equity or that are not reflected

in its consolidated financial statements.

Furthermore, the Company does not have any retained or contingent interest in assets transferred

to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.

The Company does not have any variable

interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to itself or engages in leasing,

hedging or product development services with itself.

Contingencies

From time to time, the Company is a party to certain legal proceedings,

as well as certain asserted and unasserted claims.

Amounts accrued, as well as the total amount of reasonably possible losses with respect

to such matters, individually and in the aggregate, are not deemed to be material to the consolidated financial statements.

The Company’s products and other production facilities as well

as the packaging, storage, distribution, advertising and labeling of its products, are subject to extensive legal and regulatory requirements.

For example, pursuant to the DMV registration requirement, the Company must satisfy the DMV Registration requirements and conduct required

testing for all of its products sold in U.S.

Loss of or failure to renew or obtain necessary permits, licenses, registrations, or

certificates could prevent the Company from legally selling its products in the U.S.

If the Company were found to be in violation

of applicable laws and regulations, it could be subject to administrative punishment, including fines, injunctions, recalls or asset seizures,

as well as potential criminal sanctions, any of which could have a material adverse effect on its business, financial condition, results

of operations and prospects.

As of the date hereof, the Company believes it is in compliance with the relevant regulations in the U.S.

Inflationary factors, such as increases in personnel and overhead costs,

could impair the Company’s operating results.

Although the Company does not believe that inflation has had a material impact on

the Company’s financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect

on the Company’s ability to maintain current levels of gross margin and operating expenses as a percentage of sales revenue if the

revenues do not increase with such increased costs.

From time to time, the Company is a party to certain

legal proceedings, as well as certain asserted and unasserted claims.

Amounts accrued, as well as the total amount of reasonably possible

losses with respect to such matters, individually and in the aggregate, are not deemed to be material to the consolidated financial statements.

The Company’s products and other production

facilities as well as the packaging, storage, distribution, advertising and labeling of its products, are subject to extensive legal and

regulatory requirements.

For example, pursuant to the DMV registration requirement, the Company must satisfy the DMV Registration requirements

and conduct required testing for all of its products sold in U.S.

Loss of or failure to renew or obtain necessary permits, licenses,

registrations, or certificates could prevent the Company from legally selling its products in the U.S.

If the Company were found

to be in violation of applicable laws and regulations, it could be subject to administrative punishment, including fines, injunctions,

recalls or asset seizures, as well as potential criminal sanctions, any of which could have a material adverse effect on its business,

financial condition, results of operations and prospects.

As of the date hereof, the Company believes it is in compliance with the relevant

regulations in the U.S.

UL Litigation

On or about March 12, 2025, UL LLC (“UL”)

filed a complaint against the Company, along with the Company’s certain subsidiaries and certain individuals, in the Eastern District

of New York (the “Complaint”).

The Complaint alleges that the Company improperly used UL’s trademark by claiming certain

products were certified by UL.

On May 21, 2025, the Company and UL LLC (“UL”) entered into a settlement and release agreement

(the “Settlement Agreement”) on mutually acceptable settlement terms.

Pursuant to the Settlement Agreement, the Company agreed

to pay UL an aggregate amount of $ 1,000,000 before November 30, 2025 (Refer to Note 7 — Accrued Expenses and other payables).

From May 28 to July 15, 2025, the Company paid $ 350,000 to UL.

Inflationary factors, such as increases in personnel

and overhead costs, could impair the Company’s operating results.

Although the Company does not believe that inflation has had a

material impact on the Company’s financial position or results of operations to date, a high rate of inflation in the future may

have an adverse effect on the Company’s ability to maintain current levels of gross margin and operating expenses as a percentage

of sales revenue if the revenues do not increase with such increased costs.

13 — RELATED PARTY TRANSACTIONS

(A) Related party balances

Accounts receivable — related parties

Accounts receivable, net — related

Name of Related Party Relationship Nature March 31,

2 unchanged sentences

Accounts receivable – related parties 78,565 326,914

In June 2024, the Company received $ 282,814 from Fly E Bike

Prepayments and other receivables — related parties

Allowance for credit loss 41,100 —

Accounts receivable, net - related parties $ 37,465 $ 326,914

During the year ended March 31, 2025, the Company

received $ 290,359 from Fly E Bike SRL.

The Company accrued $ 41,100 credit losses during the year ended March 31, 2025.

Prepayments and other receivables — related

Name of Related Party Relationship Nature March 31,

1 unchanged sentence

Fly E Bike SRL Zhou Ou (CEO), owns over 50% equity interest of this entity Other receivables $ —

PJMG LLC Ruifeng Guo (CFO), owns over 50% equity interest of this entity Prepayments $ 60,000 —

PJMG LLC Ruifeng Guo (former CFO who resigned on November 6, 2024), owns over 50% equity interest of this entity Prepayments 120,000 60,000

Prepayments and other receivables – related parties $ 120,000 $ 240,256

During the year ended March 31, 2024, the Company advanced $ 291,756

to Fly E Bike SRL, a distributor the Company works with and in which Mr.

During the year ended March 31, 2025, the Company

advanced nil to Fly E Bike SRL, a distributor the Company works with and in which Mr.

Ou holds over 50 % of the equity interest.

This advance is

unsecured, bears no interest and does not have a maturity date.

During the year ended March 31, 2024, Fly E Bike SRL repaid $ 111,500 to

is unsecured, bears no interest and does not have a maturity date.

On June 12, 2024, the Company received $ 180,256 from Fly E Bike SRL.

For the prepayments to PJMG LLC, please refer to Note

13 - Loan payables — related party.

On April 1, 2023, the Company agreed to retain the services of PJMG, a company in which Mr.

Guo, the Company’s former CFO who resigned

on November 6, 2024, holds over 50 % of the equity interests as a consultant following the completion of its IPO.

PJMG was engaged to provide

compliance consulting services related to accounting, finance, and management, as well as to oversee market planning and development,

follow-on fundraising, and investor relationship management from June 2024 to May 2025.

The service fee is $ 45,000 for the first month

and from the second month the fees will be $ 15,000 per month.

To secure these services, the Company prepaid a total of $ 120,000 to PJMG

as of March 31, 2025.

From August 9, 2024 to September 17, 2024, the Company advanced $ 480,000 to Mr.

Ou, Chairman and CEO of the Company,

for personal use.

This advance is unsecured, bears no interest and does not have a maturity date.

As of March 31, 2025, the advance was

paid back in full.

Long-term prepayment for software development

2 unchanged sentences

2025 March 31,

DF Technology US Inc Ruifeng Guo (CFO), owns over 50% equity interest of this entity Long-term prepayment for software development $ 1,279,000 $ —

Long-term prepayment for software development — related parties,

net $ 1,279,000 $ —

In December 2023, the Company engaged DFT for certain technology

Guo, the Company’s CFO, owns over 50 % of the equity interest in DFT.

As of March 31, 2024, the Company paid

$ 1,279,000 to DFT as prepayment for software development.

As of March 31, 2024, construction in progress was $ 275,000 (see Note 5 –

Property and Equipment).

DF Technology US Inc Ruifeng Guo (former CFO who resigned on November 6, 2024), owns over 50% equity interest of this entity Long-term prepayment for software development $ 136,580 $ 1,279,000

Long-term prepayment for software development — related parties, net $ 136,580 $ 1,279,000

In December 2023, the Company engaged DFT

for development of certain technology services.

Guo, the Company’s former CFO who resigned on November 6, 2024, owns over

50 % of the equity interest in DFT.

As of March 31, 2025 and 2024, the Company paid $ 136,580 and $ 1,279,000 to DFT as prepayment for

software development, respectively.

During the fiscal year of 2025, the Company started to use part of the ERP system which was valued

at $ 2,310,000 and treated that part as computer hardware and software and started for depreciation.

As of March 31, 2025 and 2024, construction

in progress was nil and $ 275,000 , respectively (see Note 5 – Property and Equipment).

Other payables — related parties

Name of Related Party Relationship Nature

Name of Related Party Relationship Nature March 31,

2025 (i) March 31, 2024 (i)

Zhou Ou Chairman, CEO of the Company Other payable $ —

Other Payables-related parties $ —

(i) Represents the remaining balance of the advance provided

by the related party to the Company’s subsidiaries for the purpose of supporting their business operations.

All of the above payables are unsecured, non-interest bearing, and

due on demand.

(i) Represents the remaining balance

of the advance provided by the related party to the Company’s subsidiaries for the purpose of supporting their business operations.

All of the above payables are unsecured, non-interest

bearing, and due on demand.

The Company paid a total of $ 92,229 and $ 290,252 to Mr.

1 unchanged sentence

2024, respectively.

Loan payables — related party

Name of Related Party Relationship Nature March 31,

2024 March 31,

PJMG LLC Ruifeng Guo (CFO) owns over 50% equity interest of this entity Loan payable $ —

Loan Payables-related parties $ —

On February 1, 2023, PJMG LLC (“PJMG”), a company

Guo, the Company’s CFO, holds over 50 % of the equity interests, provided a loan of $ 150,000 to the Company (the

“PJMG Loan”).

The PJMG Loan was unsecured, bore no interest and was set to mature on May 31, 2024.

Furthermore, the Company

has agreed to retain the services of PJMG as a consultant following the completion of its IPO.

To secure these services, the Company prepaid

a total of $ 210,000 to PJMG during the year ended March 31, 2024, of which $ 150,000 was applied to offset the PJMG Loan.

The remaining

prepayments balance was $ 60,000 as of March 31, 2024, and it will be used from June 2024.

See Note 13 - Prepayments and other receivables

— related parties.

(B) Related party transactions

Revenues — related party

Revenues — related parties

For the Years Ended

2 unchanged sentences

Revenues — related parties $ 42,010 $ 326,914

During the years ended March 31, 2024 and 2023, Fly E Bike SRL

purchased certain EV products from the Company in the amount of $ 326,914 and $ 136,565 , respectively.

During the years ended March 31, 2025 and 2024,

Fly E Bike SRL, a distributor the Company works with and in which Mr.

Ou holds over 50 % of the equity interest, purchased certain

EV products from the Company in the amount of $ 42,010 and $ 326,914 , respectively.

Purchase of Intangible Assets — related

Name of Related Party Relationship Nature March 31,

2025 March 31, 2024

DF Technology US Inc Ruifeng Guo (former CFO who resigned on November 6, 2024), owns over 50% equity interest of this entity Purchase of Software $ 500,000 $ —

Purchase of Intangible Assets — related parties $ 500,000 $ —

In December 2023, the Company engaged DFT

for development of certain technology services.

Guo, the Company’s former CFO who resigned on November 6, 2024, owns over

50 % of the equity interest in DFT.

In July 2024, the Company engaged DFT for development of a new APP, GO FLY APP, for the rental

The total contract price for the GO FLY APP is $ 500,000 , and the GO FLY APP was delivered on September 5, 2024.

(i) During the year ended March 31, 2024, Mr.

certain vendors of the Company to settle certain accounts payable balance on behalf the Company.

On June 30, 2023, the Company transferred

$ 2,263,630 , a portion of the accounts payable balance, along with a cash contribution of $ 136,370 from Mr.

Zhou Ou as capital contribution

(see Note 9).

On July 18, 2023, Mr.

Ou paid $ 50,000 to one of the vendors on behalf the Company.

As of March 31, 2024, a total

of $ 2,400,000 were transferred and recorded as capital contribution (see Note 9).

(ii) On March 6, 2021, the Company and DGLG entered into

an engagement letter, pursuant to which the Company engaged DGLG as a consultant to assist the Company in its IPO planning, financing

On March 6, 2021, the Company and DGLG entered

into an engagement letter, pursuant to which the Company engaged DGLG as a consultant to assist the Company in its IPO planning, financing

and tax services.

Guo, the Company’s CFO, is a partner at DGLG.

Under the terms of the engagement agreement

with DGLG, the Company has agreed to compensate DGLG for consulting services based on an hourly fee arrangement.

DGLG’s consulting

fees were $ 100,000 and $ 25,000 for the years ended March 31, 2024 and 2023, respectively.

In addition, during the year ended March 31,

2024, the Company paid DGLG a total of $ 123,000 for tax services rendered by DGLG.

Guo, the Company’s former CFO who resigned on November 6, 2024, is a partner at DGLG.

the terms of the engagement agreement with DGLG, the Company has agreed to compensate DGLG for consulting services based on an hourly

fee arrangement.

DGLG’s consulting fees were $ 225,000 and $ 100,000 for the years ended March 31, 2025 and 2024, respectively.

addition, during the year ended March 31, 2025 and 2024, the Company paid DGLG a total of $ 61,050 and $ 123,000 for tax services, including

sales tax services, payroll tax services, and income tax services, rendered by DGLG, respectively.

On April 1, 2023, the Company agreed to retain

the services of PJMG, a company in which Mr.

Guo, the Company’s former CFO who resigned on November 6, 2024, holds over 50 % of the

equity interests as a consultant following the completion of its IPO.

To secure these services, the Company prepaid a total of $ 120,000

to PJMG as of March 31, 2025.

During the year ended March 31, 2025, the Company paid PJMG a total of $ 372,047 for consulting services.

$ 312,047 was expensed as consulting expenses during the year ended March 31, 2025.

14 — DISPOSAL OF SUBSIDIARIES

During the year ended March 31, 2025, the Company

committed to the disposal of certain subsidiaries.

The decision was driven by two primary factors:

(1) to simplify the Company’s legal and operational structure, and (2) to create a more streamlined and transparent organizational

structure, thereby reducing the complexity of consolidation across auditing, finance, and tax reporting.

These subsidiaries were not part

of a strategic exit from the New York region or the retail industry.

Rather, the disposal was intended to enhance administrative efficiency

and align the Company’s structure with its long-term operational goals.

In December, 2024, the Company decided to

proceed with the disposal plan and sell 100 % of its equity interests in subsidiaries FLYMHT INC, FLY14 CORP, EDISONEBIKE INC, and

FLY6AVE INC to third-party individuals (the “Buyers”).

On January 1, 2025, the Company entered into share transfer

agreements with the Buyers.

Pursuant to the terms of the agreements, the Company agreed to sell, transfer, and assign all its

rights, title, and interests in the shares of the subsidiaries to the Buyers, free and clear of all liens and encumbrances.

Buyers agreed to purchase the shares for total cash consideration of $ 635,193 .

There were no contingent payments, earn-outs, or

post-closing adjustments specified in the agreements.

There was $ 84,302 gain from this disposal.

As of March 31, 2025, the Company

did not receive any consideration from the third parties.

In June, 2025, the Company received $ 103,000 from the Buyers.

On March 11, 2025, the management team approved

to sell 100 % of its equity interests in subsidiaries FLYEBIKE BROOKLYN INC, FLYMHT659 INC, and FLYBX745 INC to third-party individuals

(the “Buyers”).

On April 1, 2025, the Company entered into share transfer agreements with the Buyers.

Pursuant to the terms

of the agreements, the Company agreed to sell, transfer, and assign all its rights, title, and interests in the shares of the subsidiaries

to the Buyers, free and clear of all liens and encumbrances.

The Buyers agreed to purchase the shares for total cash consideration of

There were no contingent payments, earn-outs, or post-closing adjustments specified in the agreements.

In June 2025, the Company

received $ 30,000 from the Buyers.

disposal of these subsidiaries were

not considered discontinued operations under ASC 205-20, as their disposal did not represent a strategic shift that had a major effect

on the Company’s operations and financial results.

As of March 31, 2025, the Company had classified

the assets and liabilities of the subsidiaries that were sold on April, 1, 2025 as held for sale in accordance with ASC 360-10.

The classification

criteria were met when the management committed to a plan to sell.

Summarized Held for Sale Financial Information

A summary of the carrying amounts of major classes

of assets and liabilities, which are included in assets and liabilities held for sale in the consolidated balance sheet, is as follows:

Inventories, net

Prepayments and other receivables

Property and equipment, net

Security deposits

Operating lease right-of-use assets

Assets held for sale

Accrued expenses and other payables

Operating lease liabilities – current

Operating lease liabilities – non-current

Liabilities held for sale

There was no gain or loss on the sale of subsidiaries:

Total consideration determined:

Net assets disposed excluded intercompany other

Gain on disposal:

15 — SUBSEQUENT EVENTS

The Company has evaluated subsequent events after March 31, 2024,

up through June 27, 2024, the date at which the consolidated financial statements were issued, except for the event mentioned below the

Company did not identify any subsequent events with material financial impact on the Company’s consolidated financial statements.

On April 25, 2024, the Company paid off the loan from Sinoelite Corp

of $ 100,000 .

On June 7, 2024, the Company completed its initial public offering

and issued 2,250,000 shares of common stock, at a price of $ 4.00 per share.

The gross proceeds of the offering were $ 9.0 million, prior

to deducting the underwriting discounts, commissions and offering expenses payable by the Company.

In addition, the Company granted the

underwriters a 30-day option to purchase an additional 337,500 shares of common stock at the initial public offering price, less underwriting

discounts and commissions, to cover over-allotments.

On June 25, 2024, the Company issued an additional 337,500 shares of common stock

to the underwriters for gross proceeds of $ 1.4 million upon full exercise of the underwriters’ over-allotment option.

received by the Company from the initial public offering, including the exercise of over-allotment option, were approximately $ 9.2 million.

The Company also issued to The Benchmark Company, LLC, the representative of the underwriters, and its designees warrants to purchase

129,375 shares of its common stock.

On June 1, 2024, the Company engaged

Taptalk LLC to promote the Company’s designated products or corporate image on the TikTok shop platform.

The contract is valid from

June 1, 2024 to June 2025.

On June 14, 2024, the Company paid $ 160,500 to Taptalk LLC.

The Company has evaluated subsequent events after

March 31, 2025, up through July 15, 2025 , the date at which the consolidated financial statements

Except for the events mentioned below, the Company did not identify any subsequent events with material financial impact

on the Company’s consolidated financial statements.

On April 1, 2025, the Company sold three subsidiaries:

FLYEBIKE BROOKLYN INC, FLYMHT659 INC, and FLYBX745 INC to third-party individuals (Refer to Note - 14 — Disposal of Subsidiaries).

On April 29, 2025, the Company obtained a short-term

loan of $ 1,575,000 from Agile Capital Funding, LLC, which requires weekly repayments of $ 70,000 .

From April 29 to July 15, 2025, the Company

paid $ 372,500 on principal and interest of the loan.

On May 1, 2025, the Company sold three subsidiaries:

ARFY CORP., FLY GC INC., and ESEBIKE INC to third-party individuals.

The consideration determined was $ 156,517 .

As of July 15, 2025, the Company did not receive any consideration from the third-party

On June 1, 2025, the Company sold two subsidiaries:

UFOTS CORP and FLYCORONA INC to third-party individuals.

The consideration determined was $ 60,207 .

As of July 15, 2025, the Company did not receive any consideration from the third-party

On June 4, 2025, the Company issued 5,719,111

shares of common stock, at a price of $ 1.2140 per share in its second public offering.

The gross proceeds of the offering were $ 6.9 million,

prior to deducting the placement agent’s fees and offering expenses payable by the Company.

Each share of common stock was sold

together with two warrants, with each warrant to purchase one share of common stock.

Each warrant is exercisable immediately with an exercise

price equal to 120 % of the offering price ($ 1.4565 per share) and expires on the fifth anniversary of the issuance date, subject to certain

On June 10, 2025, the Company paid off the short-term

loan of $ 255,000 from AOWINV LLC.

On June 23, 2025, a total of 19 subsidiaries of

the Company obtained short-term loans from Strip Inc.

with an aggregate principal amount of $ 379,900 .

The loan terms vary across subsidiaries,

with repayment periods ranging from 42 weeks to 12 months.

Repayment schedules differ by agreement and include both weekly and monthly

installment options.

The stated annual interest rates range from 12.0 % to 22.8 %.

On July 1, 2025, the Company sold three subsidiaries:

OFLYO INC, FLYCYCLE INC, and FLYBX2381 INC to third-party individuals.

The consideration determined was $ 106,647 .

As of July 15, 2025,

the Company did not receive any consideration from the third-party individuals.

On July 3, 2025, the Company implemented a 1-for-5

reverse stock split of its common stock.

The reverse stock split reduced the number of shares of common stock issued and outstanding from

53,183,053 to approximately 10,636,611 as of July 3, 2025.

The par value per share remained unchanged at $ 0.01 .

From June 24, 2025 to July 9, 2025, certain holders of the Company’s outstanding warrants exercised their

rights to acquire common stock.

The exercises were completed on a cashless basis pursuant to the terms of the warrant agreements, resulting

in the issuance of 7,419,477 shares of common stock.

The exercises did not generate any cash proceeds to the Company.

All share numbers

for warrant exercises prior to the reverse stock split have been retroactively adjusted to reflect the 1-for-5 reverse stock split.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures