Fly-E Group, Inc. 10-K

Item 9A. 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 include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our 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. Management’s Annual Report on Internal Control over Financial Reporting In our 10-K for the year ended March 31, 2026, we identified material weaknesses in our internal control over financial reporting. The material 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 “U.S. 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. We 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, 2026. Accordingly, we continue to consider these material weaknesses to be ongoing as of that date. As of March 31, 2026, 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 Reporting 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 objectives. 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 detected. Item 9B. Other Information 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. Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevent Inspections. Not applicable. 51 Part III Item 10. Directors, Executive Officers and Corporate Governance Executive Officers and Directors Set forth below is certain information with respect to our directors and executive officers: Name Age Position Zhou Ou 36 Chief Executive Officer Lisa Fan 46 Director and Chief Financial Officer Leqi Dong 37 Director Dongperez Hua 64 Director Chun Min (Max) Lin 54 Director Set forth below is biographical information about each of the individuals named in the table above: Zhou Ou, Founder, Chief Executive Officer. Mr. Ou founded Fly E-Bike in 2018 and has since served as our 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. We believe that Mr. 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 CEO. Lisa Fan, Director and Chief Financial Officer. Ms. Fan has served as our Chief Financial Officer (“CFO”) and a member of our board of directors since September 2025. Ms. Fan has served as a financial consultant at Baizan Consulting Firm from May 2022 to May 2025 where she led financial structuring and initial-public-offering readiness planning for private enterprises. Before that, she was the Director of Internal Audit at Souche Group from July 2019 to April 2022 where she managed the financial system reconstruction and internal control compliance, and intermediary coordination and data preparation for listing for both U.S. and Hong Kong markets. Ms. Fan earned her bachelor’s degree from Zhejiang Institute of Finance and Economics in 2000. Ms. Fan holds a certificate from Chinese Institute of Certified Public Accountants. Leqi Dong, Director. Mr. Dong has served as a member of our board of directors since September 2025, and serves as the Chairman of our Audit Committee. Mr. Dong has served as the real estate bridge loan originator and fund manager at Golden Harbor Capital LLC since September 2018, where he founded and managed a private real estate debt fund. Mr. Dong earned his bachelor’s degree from Brauch College, Zichlin School of Business in 2013. Dongperez Hua, Director. Mr. Hua has served as a member of our board of directors since October 2025, and serves as the Chairman of our Nominating and Corporate Governance Committee. Mr. Hua has served as the senior manager to Joyor Vehicles Co., Ltd. from November 2015 to December 2024 where he managed the research, development, manufacturing and sales of electric vehicles, led more than 100 staffs, and supported the company’s expansion to Europe and North America. Mr. Hua earned his bachelor’s degree of Business Administration degree from Zhuhai College of Science & Engineering in 1995. Chun Min (Max) Lin, Director. Mr. Lin has served as a member of our board of directors since October 2025, and serves as the Chairman of our Compensation Committee. Mr. Lin has served as the product director for Spinnr Tech Ltd. from September 2022 to present. Prior to that, Mr. Lin served as the product director for Royce Tech Ltd. from June 2020 to August 2022. Mr. Lin earned his master’s degree in graphic communication management and technology from New York University in 2022 and his bachelor’s degree in advertising and strategic marketing from Ming Chuan University (Taiwan) in 1999. 52 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 CEO 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 for a term expiring at the next Annual Shareholders’ Meeting (“ASM”) and until their successors have been elected and qualified or until he or she resigns or have been removed or disqualified. The position of each director is up for re-election each year at the ASM. 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 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 committees. Each committee’s members and functions are described below. Audit Committee. Our Audit Committee consists of three independent directors. The members of the Audit Committee are Leqi Dong, Dongperez Hua, and Chun Min (Max) Lin, with Leqi Dong serving as the committee chair. The Audit Committee consists exclusively of directors who are financially literate. Leqi Dong is considered an “audit committee financial expert” as defined by the SEC’s rules and regulations. The Audit Committee responsibilities include: ● overseeing the compensation and work of and performance by our independent auditor and any other registered public accounting firm performing audit, review or attestation services for us; ● engaging, retaining and terminating our independent auditor and determining the terms thereof; ● assessing the qualifications, performance and independence of the independent auditor; ● evaluating whether the provision of permitted non-audit services is compatible with maintaining the auditor’s independence; ● reviewing and discussing the audit results, including any comments and recommendations of the independent auditor and the responses of management to such recommendations; ● reviewing and discussing the annual and quarterly financial statements with management and the independent auditor; ● producing a committee report for inclusion in applicable SEC filings; ● reviewing the adequacy and effectiveness of internal controls and procedures; ● establishing procedures regarding the receipt, retention and treatment of complaints received regarding the accounting, internal accounting controls, or auditing matters and conducting or authorizing investigations into any matters within the scope of the responsibility of the Audit Committee; and ● reviewing transactions with related persons for potential conflict of interest situations. 53 Compensation Committee. Our Compensation Committee consists of three independent directors. The members of the Compensation Committee are Leqi Dong, Dongperez Hua, and Chun Min (Max) Lin, with Chun Min (Max) Lin serving as the committee chair. The committee has primary responsibility for: ● reviewing and recommending all elements and amounts of compensation for each executive officer, including any performance goals applicable to those executive officers; ● reviewing and recommending for approval the adoption, any amendment and termination of all cash and equity-based incentive compensation plans; ● once required by applicable law, causing to be prepared a committee report for inclusion in applicable SEC filings; ● approving any employment agreements, severance agreements or change of control agreements that are entered into with the CEO and certain executive officers; and ● reviewing and recommending the level and form of non-employee director compensation and benefits. Nominating and Governance Committee. The Nominating and Governance Committee consists of three independent directors. The members of the Nominating and Governance Committee are Leqi Dong, Dongperez Hua, and Chun Min (Max) Lin, with Dongperez Hua serving as the committee chair. The Nominating and Governance Committee’s responsibilities include: ● recommending persons for election as directors by the stockholders; ● recommending persons for appointment as directors to the extent necessary to fill any vacancies or newly created directorships; ● reviewing annually the skills and characteristics required of directors and each incumbent director’s continued service on the board; ● reviewing any stockholder proposals and nominations for directors; ● advising the board of directors on the appropriate structure and operations of the board and its committees; ● reviewing and recommending standing board committee assignments; ● developing and recommending to the board Corporate Governance Guidelines, a Code of Business Conduct and Ethics and other corporate governance policies and programs and reviewing such guidelines, code and any other policies and programs at least annually; ● making recommendations to the board as to determinations of director independence; and ● making recommendations to the board regarding corporate governance based upon developments, trends, and best practices. The Nominating and Governance Committee will consider stockholder recommendations for candidates for the board of directors. 54 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; or ● 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 . 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”). 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. 55 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. Item 11. Executive Compensation The following table shows the compensation awarded to or earned during the years ended March 31, 2026 and 2025 by our chief executive officer. Other than as listed below, we did not have any officers that received more than $100,000 in compensation during the years ended March 31, 2026 and 2025. The person listed in the following table is referred to herein as the “named executive officer.” Name and principal position Year Salary Bonus Stock Awards Option Awards All Other Compensation Total ($) Zhou Ou 2026 $ 100,000 — — — — $ 100,000 Chief Executive Officer 2025 $ 100,000 — — — — $ 100,000 Narrative Disclosure to Summary Compensation Table Zhou Ou, Chief Executive Officer Mr. Ou has entered into an employment agreement with one of our subsidiaries, FLYEBIKE Inc, dated April 1, 2023. Under the agreement, Mr. Zhou 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. If Mr. 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. “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 or omission. The agreement includes covenants for non-disclosure, non-solicitation, and non-competition. For two years post-termination, Mr. Ou agrees not to solicit the Company’s customers or engage in competing business activities within New York State. 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, 2026 and 2025. Outstanding Option Awards As of March 31, 2026, there were no option or stock awards outstanding. 56 Employee Benefit Plans 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 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. 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. Awards 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 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. 57 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 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 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. 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. 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. 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. 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 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 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. 58 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 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 The following table sets forth information as to the compensation paid to our directors in the year ended March 31, 2026: Name Cash Compensation Stock Awards Total Leqi Dong $ 8,800 $ - $ 8,800 Dongperez Hua - - - Chun Min (Max) Lin - - - Bin Wang 37,500 - 37,500 Lun Feng - - - Zanfeng Zhang 22,500 - 22,500 Zhou Ou (1) - - - Lisa Fan (2) $ 22,000 $ - $ 22,000 (1) Mr. Ou does not receive any additional compensation as a director in addition to his compensation disclosed in the Summary Compensation Table. (2) Ms. Fan receives a total annual compensation of $60,000 for serving as CFO and director of the Company. Ms. Fan does not receive any additional compensation as a director. Director Agreements Each of the Company’s independent directors, Leqi Dong, Dongperez Hua and Chun Min (Max) Lin, 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. Dong, Mr. Hua and Mr. Lin each is entitled to an annual cash fee of $26,400. 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. 59 Item 12. 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 July 23, 2026 by: ● each person known to us to beneficially own 5% or more of our common stock; ● each director; ● each of our executive officers; and ● 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 July 23, 2026. 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 Shares beneficially owned Percentage owned Executive Officers and Directors Zhou Ou 77,000 4.717 % Lisa Fan - Leqi Dong - Dongperez Hua - Chun Min (Max) Lin - Directors and Officers as a group (five persons) 77,000 4.717 % Securities Authorized for Issuance Under Equity 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. There are 37,000 shares of common stock reserved for future issuance under the 2024 Plan. We have not issued any grants or awards under the 2024 Plan. Item 13. Certain Relationships and Related Transactions, and Director Independence 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, 2024 to March 31, 2026, our CEO Mr. Ou, provided financial support to the Company by advancing funds and making various payments on behalf of the Company totaling $961,294. These amounts payable to Mr. Ou are unsecured, bear no interest and do not have a maturity date. From April 1, 2024 to March 31, 2026, the Company repaid the amount due to Mr. Ou in full. As of March 31, 2026 and 2025, the remaining balance of these payables was nil and nil, 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. 60 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. Mr. Guo is a partner at DGLG. 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, 2026 and 2025, DGLG’s consulting fees were $nil and $225,000, respectively. For the years ended March 31, 2026 and 2025, the Company paid DGLG a total of $nil and $61,050, respectively, for tax services. As of March 31, 2025, the Company did not owe any amount to DGLG. Following Mr. Guo’s resignation on February 2, 2026, DGLG is no longer a related party of the Company as of the date of this report. 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. 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 are $15,000 per month. To secure these services, the Company prepaid a total of $120,000 to PJMG as of March 31, 2025. $312,047 was expensed as consulting expenses during the year ended March 31, 2025. $120,000 was expensed as consulting expenses during the year ended March 31, 2026. Following Mr. Guo’s resignation on February 2, 2026, DGLG is no longer a related party of the Company as of the date of this report. 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, 2026 and 2025, Fly E Bike SRL purchased certain EV products from the Company in the amount of $nil and $42,010, respectively. As of March 31, 2026 and 2025, the Company had accounts receivable from Fly E Bike SRL in the amounts of $32,030 and $37,465, 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 March 31, 2025, the advance was paid back in full. During the year ended March 31, 2026, the Company advanced a total of $161,560 to Fly E Bike SRL. Such advance is unsecured, bears no interest and does not have a maturity date. In December 2023, the Company engaged DF Technology US Inc (“DFT”) for certain technology services. Mr. Guo, the Company’s former CFO, owns over 50% of the equity interest in DFT. As of March 31, 2026 and March 31, 2025, the accumulative payments to DFT for development of the ERP system were $nil and $2,500,000, 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, 2026 and 2025, 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, 2026 and March 31, 2025, the Company had a prepayment of nil and $136,580, respectively, to DFT. 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. Following Mr. Guo’s resignation on February 2, 2026, DFT is no longer a related party of the Company as of the date of this report. Director Independence We believe that each of our directors, Messrs. Dong, Hua and Lin, is an independent director under the Nasdaq listing rules. Related Party Transaction Policy 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. 61 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; (iii) any Company contractual obligations; (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 Law. Item 14. Principal Accounting Fees and Services Marcum Asia CPAs LLP (“Marcum Asia”) served as our independent registered public accounting firm for the year ended March 31, 2025 and for reviewing our financial statements for quarters ended June 30, 2025 and September 30, 2025. Fortune CPA served as our independent registered public accounting firm for conducting a quarter review of our financial statements as of December 31, 2025, and for auditing our consolidated financial statements as of and for the fiscal year ending March 31, 2026. The following table sets forth the fees billed by Marcum Asia and Fortune CPA, our previous and current registered independent public accounting firms, for 2026 and 2025 for the categories of services indicated. Fees billed by Marcum Aisa Year Ended March 31, 2026 2025 Audit fees (1) $ 523,757 $ 608,727 Tax Fees - - All Other Fees - - Total All Fees $ 523,757 $ 608,727 Fees billed by Fortune CPA Year Ended March 31, 2026 2025 Audit fees (1) $ 285,000 $ - Tax Fees - - All Other Fees - - Total All Fees $ 285,000 $ - (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 prior to our IPO. Following the completion of our IPO, such services were reviewed and approved by the Audit Committee. 62 Part IV Item 15. Exhibits, Financial Statement Schedules (a) The following documents are filed as part of this report: (1) Financial Statements: Page Report of Independent Registered Public Accounting Firm (PCAOB ID:6901) F-2 Report of Independent Registered Public Accounting Firm (PCAOB ID:5395) F-3 Consolidated Balance Sheets as of March 31, 2026 and 2025 F-4 Consolidated Statements of Operations and Comprehensive Loss for the Years Ended March 31, 2026 and 2025 F-5 Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended March 31, 2026 and 2025 F-6 Consolidated Statements of Cash Flows for the Years Ended March 31, 2026 and 2025 F-7 Notes to Consolidated Financial Statements F-8 (2) Financial Statement Schedules: All financial statement schedules are omitted because they are not applicable or the amounts are immaterial and not required, or the required information is presented in the financial statements and notes thereto beginning on page F-1. (3) Exhibits We hereby file as part of this report the exhibits listed in the attached Exhibit Index. Exhibits which are incorporated herein by reference can be inspected on the SEC website at www.sec.gov. Item 16. Form 10-K Summary Not Applicable. EXHIBIT INDEX Exhibit number Description 1.1 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) 3.1 Amended and Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to Form 8-K filed on June 7, 2024) 3.2 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) 3.3 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) 3.4 Certificate of Amendment of Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Current Form 8-K filed on October 31, 2025) 3.5 Amended and Restated Bylaws of Fly-E Group, Inc. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed by the registrant on June 7, 2024) 4.1* Description of Securities of the Registrant 4.2 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) 4.3 Form of Warrant (incorporated by reference to Exhibit 4.1 to Form 8-K filed on June 5, 2025) 10.1 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)† 10.2 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)† 10.3 Fly-E Group, Inc. 2024 Omnibus Incentive Plan (incorporated by reference to Appendix A to the Company’s Proxy Statement on Schedule 14A filed on February 21, 2025)† 63 10.4 Form of the Independent Director’s Agreement of Fly-E Group, Inc. (incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K filed on June 28, 2024) 10.5 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) 10.6 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) 10.7 # Contract Agreement for the Development of POS and ERP System dated December 13, 2023 between the Company and DF Technology US Inc. (incorporated by reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K filed on June 28, 2024) 10.8 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. 10.9 Joint Amendment to Placement Agency Agreement and Engagement Letter, dated May 13, 2025, by and between the Company and American Trust Investment Services, Inc. (incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K filed on July 15, 2025) 10.10 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to Form 8-K filed on June 5, 2025) 10.11 # 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) 10.12 # 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) 10.13 Letter 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) 14.1 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) 19.1 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) 21.1* List of Subsidiaries. 31.1* 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 31.2* 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 32.1** Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2** Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1 Clawback policy (incorporated by reference to Exhibit 97.1 to the Company’s Annual Report on Form 10-K filed on June 28, 2024) 101.INS* Inline XBRL Instance Document. 101.SCH* Inline XBRL Taxonomy Extension Schema Document. 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Filed herewith. ** Furnished herewith † 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 registrant hereby agrees to furnish a copy of any omitted schedules to the Commission upon request. 64 SIGNATURES 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. Date: July 23, 2026 FLY-E GROUP, INC. By: /s/ Zhou Ou Name: Zhou Ou Title: Chief Executive Officer (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this annual report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Zhou Ou Chief Executive Officer (Principal Executive Officer) July 23, 2026 Zhou Ou /s/ Lisa Fan Chief Financial Officer (Principal Accounting and Financial July 23, 2026 Lisa Fan Officer) and Director /s/ Leqi Dong Director July 23, 2026 Leqi Dong /s/ Dongperez Hua Director July 23, 2026 Dongperez Hua /s/ Chun Min (Max) Lin Director July 23, 2026 Chun Min (Max) Lin 65 FLY-E GROUP, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID 6901) F-2 Report of Independent Registered Public Accounting Firm (PCAOB ID:5395) F-3 Consolidated Balance Sheets as of March 31, 2026 and 2025 F-4 Consolidated Statements of Operations and Comprehensive Loss for the Years Ended March 31, 2026 and 2025 F-5 Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended March 31, 2026 and 2025 F-6 Consolidated Statements of Cash Flows for the Years Ended March 31, 2026 and 2025 F-7 Notes to Consolidated Financial Statements F-8 – F-40 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders Fly-E Group Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Fly-E Group Inc. (“the Company”) as of March 31, 2026, and the related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity, and cash flows for the year then ended, 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, 2026, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. The Company’s Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered losses from operations. Therefore, the Company has stated substantial doubt about its ability to continue as a going concern. Management’s 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 These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Going Concern As described further in Note 1 to the financial statements, the Company financial statements are prepared assuming that the Company will continue as a going concern. We determined the Company’s ability to continue as a going concern is a critical audit matter due to the estimation and uncertainty regarding the Company’s future cash flows and the risk of bias in management’s judgments and assumptions in estimating these cash flows. Our audit procedures related to the Company’s assertion on its ability to continue as a going concern included the following, among others: We reviewed the Company’s working capital and liquidity ratios, operating expenses, and uses and sources of cash used in management’s assessment of whether the Company has sufficient liquidity to fund operations for at least one year from the financial statement issuance date. This testing included the inquiries with management, analyzing the subsequent company financial position, and consideration the positive and negative evidence impacting management’s arrangements in place as of the report date. /s/ Fortune CPA, Inc We have served as the Company’s auditor since 2026. Garden Grove, CA July 23, 2026 PCAOB # 6901 F- 2 Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors of Fly-E Group, Inc. Opinion on the Financial Statements We have audited, before the effects of the retrospective adjustment related to the reverse stock split described in Note 10, the accompanying consolidated balance sheet of Fly-E Group, Inc. (the “Company”) as of March 31, 2025, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity and cash flows for the year ended March 31, 2025, and the related notes (collectively referred to as the “financial statements” before the effects of the adjustments discussed in Note 10 are not presented herein). In our opinion, the financial statements, before the effects of the retrospective adjustment related to the reverse stock split described in Note 10, present fairly, in all material respects, the financial position of the Company as of March 31, 2025, and the results of its operations and its cash flows for the year ended March 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We were not engaged to audit, review, or apply any procedures to the adjustments to retroactively apply the effects of the 1-for-20 reverse stock split completed on November 4, 2025 described in Note 10, and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by Fortune CPA, Inc. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide s a reasonable basis for our opinion. /s/ Marcum Asia CPAs LLP Marcum Asia CPAs LLP We served as the Company’s auditor from 2022 (such date takes into account the acquisition of certain assets of Friedman LLP by Marcum Asia CPAs LLP effective September 1, 2022) through 2026. New York, New York July 15, 2025 NEW YORK OFFICE ● 7 Penn Plaza ● Suite 830 ● New York, New York ● 10001 Phone 646.442.4845 ● Fax 646.349.5200 ● www.marcumasia.com F- 3 CONSOLIDATED FINANCIAL STATEMENTS FLY-E GROUP, INC. CONSOLIDATED BALANCE SHEETS (Expressed in U.S. dollars, except for the number of shares) As of March 31, 2026 As of March 31, 2025 ASSETS Current Assets Cash $ 265,236 $ 840,102 Accounts receivable, net 7,049,592 466,187 Accounts receivable, net – a related party 32,030 37,465 Inventories, net 2,334,484 6,397,274 Prepayments and other receivables 6,967,596 3,676,986 Prepayments and other receivables – related parties 161,560 120,000 Assets held for sale — 2,462,502 Total Current Assets 16,810,498 14,000,516 Property and equipment, net 5,792,915 7,287,213 Security deposits 369,249 728,450 Deferred tax assets, net — 94,983 Operating lease right-of-use assets 4,289,237 10,933,068 Intangible assets, net 431,193 525,865 Long-term prepayment for software development 1,800,000 — Long-term prepayment for software development – a related party — 136,580 Total Assets $ 29,493,092 $ 33,706,675 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Accounts payable $ 433,188 $ 1,272,305 Short-term loan payables 3,936,058 5,191,058 Current portion of long-term loan payables 93,980 100,835 Accrued expenses and other payables 680,200 1,366,968 Accrued expenses and other payables – a related party 225 — Operating lease liabilities – current 1,507,340 2,617,762 Taxes payable 151,930 — Liabilities held for sale — 2,152,447 Total Current Liabilities 6,802,921 12,701,375 Long-term loan payables 1,945,442 2,065,040 Operating lease liabilities – non-current 3,302,325 9,106,928 Total Liabilities 12,050,688 23,873,343 Commitment and Contingencies Stockholders’ Equity Preferred stock, $ 0.01 par value, 10,000,000 shares authorized and nil outstanding as of March 31, 2026 and 2025* — — Common stock, $ 0.01 par value, 300,000,000 shares authorized and 1,632,386 shares outstanding as of March 31, 2026 and 300,000,000 shares authorized and 245,875 shares outstanding as of March 31, 2025* 16,324 2,459 Additional paid-in capital 27,826,643 10,987,440 Shares subscription receivable ( 219,998 ) ( 219,998 ) Accumulated deficit ( 10,153,318 ) ( 895,510 ) Accumulated other comprehensive loss ( 27,247 ) ( 41,059 ) Total FLY-E Group, Inc. Stockholders’ Equity 17,442,404 9,833,332 Total Liabilities and Stockholders’ Equity $ 29,493,092 $ 33,706,675 * Shares and per share data are presented on a retroactive basis to reflect the 1-for-5 reverse stock split completed on July 3, 2025 and the 1-for-20 reverse stock split completed on November 4, 2025. The accompanying notes are an integral part of these consolidated financial statements. F- 4 FLY-E GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Expressed in U.S. dollars, except for the number of shares) For the Years Ended March 31, 2026 2025 Revenues $ 19,063,357 $ 25,427,163 Cost of Revenues 14,404,283 14,976,266 Gross Profit 4,659,074 10,450,897 Operating Expenses Selling Expenses 3,478,740 7,403,374 General and Administrative Expenses 7,618,603 7,607,489 Total Operating Expenses 11,097,343 15,010,863 Loss from Operations ( 6,438,269 ) ( 4,559,966 ) Other (Income) Expenses, net ( 684,775 ) 10,588 Interest Expenses, net ( 1,806,085 ) ( 405,615 ) Loss Before Income Taxes ( 8,929,129 ) ( 4,954,993 ) Income Tax Expenses ( 328,679 ) ( 336,166 ) Net Loss $ ( 9,257,808 ) $ ( 5,291,159 ) Other Comprehensive (Loss) Income Foreign currency translation adjustment 13,812 ( 27,230 ) Total Comprehensive Loss $ ( 9,243,996 ) $ ( 5,318,389 ) Losses per Share* $ ( 8.38 ) $ ( 21.95 ) Weighted Average Number of Common Stock – Basic and Diluted* 1,104,494 241,050 * 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, the 1-for-5 reverse stock split completed on July 3, 2025 and the 1-for-20 reverse stock split completed on November 4, 2025. The accompanying notes are an integral part of these consolidated financial statements. F- 5 FLY-E GROUP, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Expressed in U.S. dollars, except for the number of shares) Accumulated Retained Additional Shares Other Earnings Total Preferred Stock Common Stock Paid-in Subscription Comprehensive (Accumulated Stockholders’ Shares* Amount Shares* Amount Capital Receivables Loss Deficit) Equity Balance at March 31, 2024 — $ — 220,000 $ 2,200 $ 2,617,800 $ ( 219,998 ) $ ( 13,829 ) $ 4,395,649 $ 6,781,822 Net loss — — — — — — — ( 5,291,159 ) ( 5,291,159 ) Issuance of common stock upon initial public offering, net — — 25,875 259 8,369,640 — — — 8,369,899 Foreign currency translation adjustment — — — — — — ( 27,230 ) — ( 27,230 ) Balance at March 31, 2025 — $ — 245,875 $ 2,459 $ 10,987,440 $ ( 219,998 ) $ ( 41,059 ) $ ( 895,510 ) $ 9,833,332 Net loss — — — — — — — ( 9,257,808 ) ( 9,257,808 ) Issuance of common stock upon private placement offering, net — — 973,456 9,735 16,843,333 — — — 16,853,068 Exercise of warrants — — 410,982 4,110 ( 4,110 ) — — — — Round up of shares for reverse stock split — — 2,073 20 ( 20 ) — — — — Foreign currency translation adjustment — — — — — — 13,812 — 13,812 Balance at March 31, 2026 — $ — 1,632,386 $ 16,324 $ 27,826,643 $ ( 219,998 ) $ ( 27,247 ) $ ( 10,153,318 ) $ 17,442,404 * 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, the 1-for-5 reverse stock split completed on July 3, 2025 and the 1-for-20 reverse stock split completed on November 4, 2025. The accompanying notes are an integral part of these consolidated financial statements. F- 6 FLY-E GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in U.S. dollars, except for the number of shares) For the Years Ended March 31, 2026 2025 Cash flows from operating activities Net loss $ ( 9,257,808 ) $ ( 5,291,159 ) Adjustments to reconcile net loss to net cash used in operating activities: Loss on disposal of property and equipment 13,058 108,593 Gain on termination of operating lease — ( 111,564 ) Gain on sales and liquidations of subsidiaries ( 1,587,439 ) ( 84,302 ) Impairment loss on property and equipment 558,063 — Expected credit losses on accounts receivable 176,379 116,746 Depreciation expense 719,383 631,280 Amortization expense 110,149 65,091 Deferred income taxes benefits ( 42,112 ) ( 64,829 ) Amortization of operating lease right-of-use assets 1,932,762 5,084,535 Inventories reserve 478,019 870,589 Changes in operating assets and liabilities: Accounts receivable ( 6,843,808 ) ( 329,029 ) Accounts receivable – a related party 5,435 248,349 Inventories 1,940,751 ( 2,736,241 ) Prepayments and other receivables 628,903 ( 2,677,904 ) Prepayments for operation services to a related party 120,000 ( 60,000 ) Security deposits 66,550 ( 84,605 ) Accounts payable ( 839,117 ) 91,509 Accrued expenses and other payables ( 472,870 ) 460,364 Accrued expenses and other payables – a related party 225 — Operating lease liabilities ( 1,674,854 ) ( 4,771,518 ) Taxes payable 118,417 ( 1,525,371 ) Net cash used in operating activities ( 13,849,914 ) ( 10,059,466 ) Cash flows from investing activities Purchases of properties and equipment ( 74,609 ) ( 1,634,174 ) Payments of property rights ( 15,477 ) — Proceeds from disposal of properties and equipment 13,133 — Prepayment for purchasing software from a related party — ( 1,392,580 ) Prepayment for purchasing software ( 1,800,000 ) — Cash released from disposal of entities ( 447,279 ) ( 54,774 ) Repayment from a related party — 660,256 Advance to a related party ( 161,560 ) ( 480,000 ) Net cash used in investing activities ( 2,485,792 ) ( 2,901,272 ) Cash flows from financing activities Proceeds from borrowings 1,959,846 7,367,795 Repayments of borrowings ( 3,127,434 ) ( 3,661,559 ) Repayments on other payables - related parties — ( 92,229 ) Payments of offering cost ( 516,490 ) ( 282,403 ) Net proceeds from issuance of common stock 17,369,558 9,154,500 Net cash provided by financing activities 15,685,480 12,486,104 Net changes in cash including cash classified within current assets held for sale ( 650,226 ) ( 474,634 ) Effect of exchange rate changes on cash 13,812 ( 27,230 ) Less: net change in cash classified within current assets held for sale 61,548 ( 61,548 ) Cash at beginning of the period 840,102 1,403,514 Cash at the end of the period $ 265,236 $ 840,102 Supplemental disclosure of cash flow information Cash paid for interest expense $ 1,806,085 $ 405,615 Cash paid for income taxes $ 42,640 $ 1,957,867 Supplemental disclosure of non-cash investing and financing activities Purchase of vehicle funded by loan $ — $ 224,638 Purchase of office funded by loan $ — $ 1,800,000 Purchase of software and office by using previous prepayments $ 136,580 $ 1,729,000 Purchase of property rights by using previous prepayments $ — $ 54,572 Properties used for rental services $ 49,811 $ 193,964 Deferred IPO cost recognized as additional paid-in capital $ — $ 502,198 Uncollected proceeds from disposal of subsidiaries $ 2,704,973 $ 635,193 Termination of operating lease right-of-use assets and operating lease liabilities $ 320,077 $ ( 2,473,686 ) Right-of-use assets obtained in exchange for operating lease liabilities $ — $ 2,490,547 The accompanying notes are an integral part of these consolidated financial statements. F- 7 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. (“Fly E-Bike”) and Fly EV, Inc. (“Fly EV”). 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.”). During the year ended March 31, 2026, the Company closed 8 stores in U.S. During the fiscal year ended March 31, 2025, the Company closed four stores in the U.S. As of July 23, 2026, the Company currently operates a total of 4 retail stores in the U.S. During the year ended March 31, 2026, 24 retail stores in the U.S. were sold for streamlining the Company’s corporate structure and reducing complexity in financial reporting and operating costs. These 24 retail stores were operated through certain subsidiaries of the Company that were disposed pursuant to share transfer agreements, as discussed in Note 15 to the Consolidated Financial Statements in this Report. 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’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 for as a reorganization of entities under common control. 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 22,500 shares of common stock, at a price of $ 400.00 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. In addition, the Company granted the underwriters a 30-day option to purchase an additional 3,375 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 3,375 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 1,294 shares. On June 4, 2025, the Company issued 285,956 shares of common stock, at a price of $ 24.28 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 ($ 29.13 per share) and expires on the fifth anniversary of the issuance date, subject to certain adjustments. On September 18, 2025, the Company entered into a securities purchase agreement with third-party individuals to sell 687,500 shares of the common stock at the price of $ 16.0 per share for a total consideration of $ 11,000,000 . During the year ended March 31, 2026, the Company received net proceeds of $ 10,996,558 from the investors. On July 3, 2025 and November 4, 2025, the Company implemented a 1-for-5 and 1-for-20 reverse stock split of its issued and outstanding shares of common stock, respectively. As a result, all share and per share information has been retroactively adjusted to reflect the reverse stock split for all periods presented. As of March 31, 2026, the Company had 1,632,386 shares of common stock issued and outstanding. The par value per share remained unchanged at $ 0.01 , respectively. 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. F- 8 The consolidated financial statements include the financial statements of the Company and each of the following subsidiaries as of March 31, 2026. Name Background Ownership FLY-E GROUP, INC. ● A Delaware corporation Parent Company ● Incorporated on November 1, 2022 ● A holding company FLY EV, INC. ● A Delaware corporation 100 % owned by Fly-E Group, Inc. ● Incorporated on November 1, 2022 ● A holding Company FLY E-BIKE, INC. ● A Delaware Company 100 % owned by Fly-E Group, Inc. ● Incorporated on August 22, 2022 ● A holding Company UNIVERSE KING CORP ● A New York corporation 100 % owned by Fly E-Bike, Inc. ● Incorporated on November 19, 2018 ● A retail store FLYEBIKE INC ● A New York corporation 100 % owned by Fly E-Bike, Inc. ● Incorporated on March 30, 2021 ● A retail store FLYEBIKE WORLD INC. ● A New York corporation 100 % owned by Fly E-Bike, Inc. ● Incorporated on February 27, 2023 ● A retail store FLY DELIVERY INC. ● A New York corporation 100 % owned by Fly E-Bike, Inc. ● Incorporated on March 2, 2023 ● A delivery store FLYDC INC. ● A Washington, DC corporation 100 % owned by Fly E-Bike, Inc. ● Incorporated on May 31, 2023 ● A retail store FLYLA INC. ● A California corporation 100 % owned by Fly E-Bike, Inc. ● Incorporated on December 1, 2023 ● A retail and rental store AOFL LLC ● A New York corporation 100 % owned by Fly E-Bike, Inc. ● Incorporated on June 25, 2024 ● A holding company GOBIKE INC ● A New York corporation 100 % owned by Fly E-Bike, Inc. ● Incorporated on July 16, 2024 ● A rental store FLYEBIKE BOSTON INC. ● A Massachusetts corporation 100 % owned by Fly E-Bike, Inc. ● Incorporated on September 1, 2024 ● A retail store FLYE ELYX INC. ● A New York corporation 100 % owned by Fly-E Group, Inc. ● Incorporated on November 18, 2025 ● A holding Company F- 9 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 4, 2025, the Company closed a public offering of (i) 285,956 shares of the common stock at the price of $ 24.28 per share and (ii) 571,912 warrants to purchase 571,912 shares of common stock, resulting in net proceeds to the Company of approximately $ 6.1 million after deducting placement agent’s fees and offering expenses. On September 18, 2025, the Company entered into a securities purchase agreement with third-party individuals offering of 687,500 shares of the common stock at the price of $ 16.0 per share for a total consideration of $ 11,000,000 . During the year ended March 31, 2026, the Company received net proceeds of $ 10,996,558 from the investors. As of March 31, 2026, the Company had working capital of approximately $ 10.0 million and cash of approximately $ 0.3 million. During the year ended March 31, 2026, the Company had net loss of approximately $ 9.3 million. During the year ended March 31, 2026, net cash used in operating activities of the Company was approximately $ 13.8 million. As of March 31, 2026, the Company had a current portion of contractual obligation of approximately $ 5.5 million, including short-term loan payables of approximately $ 3.9 million, current portion of long-term loan payables of approximately $ 0.1 million and current portion of operating lease liabilities of approximately $ 1.5 million. The Company defaulted on its repayment obligations under the Peapack-Gladstone Bank of approximately $ 4.9 million between August 2025 and November 2025. On November 7, 2025, the Company entered into forbearance and modification agreement with the bank for extension of repayment deadline to March 31, 2026. Subsequent to the execution of the forbearance agreement, the Company has received written notices from Peapack Private Bank asserting defaults and reserving the lender’s rights to pursue remedies under the applicable loan documents. During the year ended March 31, 2026, the Company paid $ 1,000,000 , $ 669,725 and $ 117,921 on principal, interest and forbearance fee of the loan, respectively. The Company entered into a forbearance and modification agreement with the bank on May 28, 2026, extending the repayment deadline to June 30, 2026, at an interest rate of 12.875 %, and the agreement requires the Company to pay $ 123,877 in interest and a $ 4,000 forbearance fee in respect of the loan. As of July 23, 2026, the Company is in ongoing negotiations with the bank for a renewal. Management has determined there is substantial doubt about its ability to continue as a going concern. Management 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 POLICIES (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. (the “U.S. GAAP”) and regulations of the Securities Exchange Commission (the “SEC”). The accompanying consolidated financial statements contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Company’s ability to operate profitably, to generate cash flows from operations, and its ability to attract investors and to borrow funds on reasonable economic terms. F- 10 (b) Principles of Consolidation A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power, or (ii) the Company has the power to appoint or remove the majority of the members of the board of directors, to cast a majority of votes at board meetings, or to govern the financial and operating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. The accompanying consolidated financial statements include the consolidated financial statements of the Company and its wholly owned subsidiary. A subsidiary is an entity over which the Company has control. Control is achieved when the Company has power over the investee, is exposed to, or has rights to, variable returns from its involvement with the investee, and has the ability to use its power to affect those returns. A subsidiary is consolidated from the date on which the Company obtains control. The Company reassesses whether it controls an investee if facts and circumstances indicate changes to one or more of the three elements of control listed above. All inter-company balances and transactions are eliminated upon consolidation. The results of subsidiary acquired are recorded in the consolidated statements of operations from the effective date of acquisition, as appropriate. All significant transactions and balances between the Company and its subsidiary have been eliminated. (c) Segment Information The Company adopted ASU No. 2023-07 (“ASU 2023-07”), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures for the year ended March 31, 2026 and applied it retrospectively for the prior period 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. Under ASC 280, operating segments are defined as components of an enterprise for which separate financial information is available and is evaluated regularly by the chief operating decision maker (the “CODM”) for resource allocation and performance assessment. The Company and its subsidiaries offer E-bikes, E-motorcycles, E-scooters and other items and services in its stores. The Company’s revenue streams share similar economic characteristics and are managed as a single business unit. The Company applies the management approach, which uses the internal organization and reporting reviewed by the CODM as the basis for identifying its reportable operating segments. Because the CODM makes resource allocation and performance assessment decisions based on consolidated results, the Company has determined that it has only one reportable operating segment. (d) Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The Company continually evaluates its estimates, including, but not limited to, those related to revenue recognition, the incremental borrowing rates of operating lease liabilities, lower of cost and net realizable value of inventories, allowance for expected credit losses, recoverability and useful lives of long-lived assets, warranty reserves, fair value of warrant, and valuation allowance for deferred tax assets. The Company bases its estimates on historical experience and on various other assumptions that it is believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to the Company’s reported amounts of revenue, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. F- 11 (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. (f) Cash 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, 2026 and March 31, 2025, nil and nil deposited with banks was uninsured, respectively. (g) Accounts Receivable, Net 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 adopted 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 size, aging schedule of receivables, the customer’s payment history, 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 allowance is based on management’s best estimates of specific losses on individual customer exposures, as well as the historical trends of collections. As of March 31, 2026 and 2025, the Company provided allowance for expected credit losses of $ 217,479 and $ 116,746 , consisting of $ 41,100 and $ 41,100 related to accounts receivable from a related party customer and $ 176,379 and $ 75,646 related to accounts receivable from third-party customers, respectively. (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. For the years ended March 31, 2026 and 2025, impairment loss was $478,019 and $ 870,589 , 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 are made. As of March 31, 2026 and 2025, no allowance for credit losses provided against prepayments and other receivables was recorded. F- 12 (j) Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation and any recorded impairment. The estimated useful lives are as follows: Furniture and fixtures 5 years Machinery and equipment 5 years Automobile 5 years Leasehold improvements 3 – 10 years (shorter of lease term or useful lives) Buildings 30 years Computer hardware and software 10 years Properties used for rental business 2 years 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 and comprehensive loss. 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. (k) Intangible Assets, Net Intangible assets are 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. The software 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 basis. 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 useful lives of intangibles assets have been assessed as follows: Property rights 5 - 20 years Software 5 years (l) Impairment of Long-lived Assets At the end of each reporting period, the Company reviews the carrying amounts of its property and equipment, intangible assets and right-of-use assets subject to depreciation or amortization, 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. For the years ended March 31, 2026 and 2025, the Company recognized an impairment loss of $ 558,063 and nil against the property and equipment, respectively. F- 13 (m) 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 input required to measure fair value, of which the first two are considered observable and the third is considered unobservable: Level-1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level-2 — Include other inputs that are directly or indirectly observable in the marketplace. Level-3 — Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: Market Approach—Uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. Income Approach—Uses valuation techniques to convert future amounts to a single present value, based on current market expectations about those future amounts. Cost Approach—Based on the amount that would currently be required to replace an asset. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, investments, deposits, amounts due from or to related parties, other receivables, accounts payable, accrued expenses, and other payables. The carrying amounts of these financial instruments approximates their fair value due to their short-term maturity. 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, 2026 and 2025. (n) Revenue Recognition 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 to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based 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. 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. F- 14 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 $ 51,418 and $ 20,131 of warranty reserves under accrued expenses and other payables as of March 31, 2026 and 2025, respectively. The Company has no contract assets and contract liabilities balances as of March 31, 2026 and 2025, respectively. The following table summarizes the changes in the Company's warranty reserve: As of March 31, 2026 2025 Beginning balance $ 20,131 $ 27,714 Additions charged to warranty expense 51,418 20,131 Adjustments to prior estimates ( 20,131 ) ( 27,714 ) Ending balance $ 51,418 $ 20,131 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 March 31, 2026 2025 Product revenues - retail (ASC 606) $ 6,922,972 $ 21,725,817 Product revenues - wholesale (ASC 606) 11,560,343 3,529,479 Revenues - rental services (ASC 842) 580,042 171,867 Net revenues $ 19,063,357 $ 25,427,163 (o) Selling Expenses Selling expenses mainly consist of advertising expenses, and payroll and related expenses for personnel engaged in selling and marketing activities. Advertising expenses, which consist primarily of online and offline advertisements, are expenses when the services are received. The advertising expenses were $ 36,604 and $ 273,816 for the years ended March 31, 2026 and 2025, respectively. F- 15 (p) 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 team. 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, 2026 and 2025, development costs amounted to $ 340,949 and $ 549,368 , respectively, which were included in general and administrative expenses. (q) 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. 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 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 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 2024 are subject to examination by any appropriate tax authorities. For the years ended March 31, 2026 and 2025, the Company accrued $33,464 and $30,301 of income tax related penalty included in current income taxes expenses, respectively. (r) Leases 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. Lessor 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. F- 16 Lessee 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 accounted for by 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 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 received. 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. 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. (s) 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, 2026 and 2025, respectively. As of March 31, 2026, no customers individually represented greater than 10% of accounts receivable balances. As of March 31, 2025, three customers accounted for approximately 24.0 %, 13.1 % and 11.7 % of accounts receivable balances, respectively. For the year ended March 31, 2026, the Company’s top two suppliers represented 70 % and 19 % of total purchases of the Company. For the years ended March 31, 2025, the Company’s top two suppliers represented 42 % and 32 % of total purchases of the Company, respectively. As of March 31, 2026, three suppliers accounted for approximately 39 %, 31 %, and 15 % of accounts payable balance, respectively. As of March 31, 2025, two suppliers accounted for approximately 63 % and 25 % of accounts payable balance, respectively. 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 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. F- 17 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. The Company regularly evaluates the credit standing of the counterparties or financial institutions. (t) 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 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. (u) 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. Basic EPS is 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 years ended March 31, 2026 and 2025, the Company had 1,294 and 1,294 potential shares of common stock issuable upon the exercise of the Representative’s Warrants and 2025 Warrants (as defined below), respectively. As the Company incurred losses for the years ended March 31, 2026 and 2025, inclusion of these potential shares of common stock would have reduced the net loss per share. Therefore, these potential shares were excluded from the calculation of diluted net loss per share. (v) 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. 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. F- 18 (w) 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 1,294 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. (x) Warrants On June 4, 2025, the Company closed its public offering and issued 571,912 warrants (“2025 Warrants”) to purchase common stock at an exercise price equal to $ 29.13 . The 2025 Warrants are also exercisable on a cashless basis. The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB Accounting Standards Codification ASC 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. During the year ended March 31, 2026, all holders of the Company’s 2025 Warrants exercised their rights to acquire common stock. The exercises were completed on a cashless basis pursuant to the terms of the warrant agreements. 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 and 1-for-20 reverse stock split . During the year ended March 31, 2026, 571,912 of the 2025 Warrants were exercised on a cashless basis pursuant to the terms of the warrant agreements, resulting in the issuance of 410,982 shares of common stock. 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. Management 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. F- 19 (z) Recent accounting pronouncements not yet adopted 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. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This guidance requires a public entity to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if the items meet a quantitative threshold. The guidance also requires all entities to disclose annually income taxes paid (net of refunds received) disaggregated by federal (national), state and foreign taxes and to disaggregate the information by jurisdiction based on a quantitative threshold. This guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted, and this guidance should be applied prospectively but there is the option to apply it retrospectively. The Company 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 — ACCOUNTS RECEIVABLE, NET Accounts receivable, net consisted of the following: As of March 31, As of March 31, 2026 2025 Accounts receivable $ 7,225,971 $ 541,833 Allowance of expected credit losses ( 176,379 ) ( 75,646 ) Accounts receivable, net $ 7,049,592 $ 466,187 Movements of allowance for expected credit losses are as follows: For the Years Ended March 31, 2026 2025 Beginning balance $ 75,646 $ — Addition 176,379 75,646 Write off ( 75,646 ) — Ending Balance $ 176,379 $ 75,646 As of March 31, 2026 and 2025, the Company provided allowance for expected credit losses of $ 176,379 and $ 75,646 related to accounts receivable from a third-party customer, respectively. F- 20 4 — INVENTORIES, NET Inventories, net consisted of the following: As of March 31, As of March 31, 2026 2025 Batteries $ 1,795,389 $ 2,084,890 Electric Vehicles 892,143 3,070,224 Tires 290,594 482,364 Accessories 215,551 1,867,365 Inventories 3,193,677 7,504,843 Inventory reserves ( 859,193 ) ( 1,107,569 ) Inventories, net $ 2,334,484 $ 6,397,274 Movements of inventory reserves are as follows: For the Years Ended March 31, 2026 2025 Beginning balance $ 1,107,569 $ 514,021 Addition 478,019 870,589 Write off ( 726,395 ) ( 277,041 ) Ending Balance $ 859,193 $ 1,107,569 As of March 31, 2026 and 2025, the inventory reserves balance was $ 859,193 and $ 1,107,569 respectively. For the years ended March 31, 2026 and 2025, and impairment loss was $ 478,019 and $ 870,589 , respectively. 5 — PREPAYMENTS AND OTHER RECEIVABLES Prepayments and other receivables as of March 31, 2026 and 2025 consisted of the following: As of March 31, As of March 31, 2026 2025 Prepaid rent $ — $ 157,683 Prepayments to vendors (i) 1,040,809 2,353,105 Prepaid insurance 128,685 214,111 Prepayments to other service providers 1,641,052 269,693 Prepaid income tax — 18,127 Other receivable from third parties (ii) 4,157,050 664,267 Total Prepayment and Other Receivables $ 6,967,596 $ 3,676,986 (i) As of March 31, 2026 and 2025, the prepayments to vendors were approximately $ 1.0 million and $ 2.4 million, respectively. The increase in prepayments to vendors was primarily due to the Company’s anticipation of growth in future sales and rental services and expanded maintenance services. Besides, the Company plans to purchase more E-vehicles and related accessories from overseas and U.S. vendors to avoid shortage of E-vehicles and related accessories as one of its major suppliers closed down during the year ended March 31, 2026. F- 21 (ii) On January 1, 2025, the Company entered into share transfer agreements for sales of 100 % of its equity interests in subsidiaries – FLYMHT INC, FLY14 CORP, EDISONEBIKE INC, and FLY6AVE INC – to third-party buyers for a total cash consideration of $ 635,193 , with no contingent payments or adjustments. In June 2025, the Company received $ 103,000 from the buyers. As of March 31, 2026, the remaining consideration due from such buyers was $ 532,193 (See Note - 15 — DISPOSAL OF SUBSIDIARIES). On April 1, 2025, the Company entered into share transfer agreements for the sale of 100 % of its equity interests in subsidiaries – FLYEBIKE BROOKLYN INC, FLYMHT659 INC, and FLYBX745 INC – to third-party buyers for a total cash consideration of $ 310,055 , with no contingent payments or adjustments. In June 2025, the Company received $ 30,000 from the buyers. As of March 31, 2026, the remaining consideration due from such buyers was $ 280,055 (See Note - 15 — DISPOSAL OF SUBSIDIARIES). On May 1, 2025, the Company entered into share transfer agreements for the sale of 100 % of its equity interests in subsidiaries – ARFY CORP., FLY GC INC., and ESEBIKE INC – to third-party buyers for a total cash consideration of $ 156,517 , with no contingent payments or adjustments. In June 2025, the Company received $ 55,000 from the buyers. As of March 31, 2026, the remaining consideration due from such buyers was $ 101,517 (See Note - 15 — DISPOSAL OF SUBSIDIARIES). On June 1, 2025, the Company entered into share transfer agreements for the sale of 100 % of its equity interests in subsidiaries – UFOTS CORP and FLYCORONA INC – to third-party buyers for a total cash consideration of $ 60,207 , with no contingent payments or adjustments. In June 2025, the Company received $ 27,000 from the buyers. As of March 31, 2026, the remaining consideration due from such buyers was $ 33,207 (See Note - 15 — DISPOSAL OF SUBSIDIARIES). On July 1, 2025, the Company entered into share transfer agreements for the sale of 100 % of its equity interests in subsidiaries –OFLYO INC, FLYCYCLE INC and FLYBX2381 INC– to third-party buyers for a total cash consideration of $ 57,991 , $ 71,301 and $ 106,647 respectively, with no contingent payments or adjustments. As of March 31, 2026, the remaining consideration due from such buyers was $ 57,991 , $ 71,301 and $ 106,647 , respectively, (See Note - 15 — DISPOSAL OF SUBSIDIARIES). On August 1, 2025, the Company entered into share transfer agreements for the sale of 100 % of its equity interests in subsidiaries –FLYAM INC, FLYTRON INC and MEEBIKE – to third-party buyers for a total cash consideration of $ 36,879 , $ 19,959 and $ 39,289 , respectively, with no contingent payments or adjustments. As of March 31, 2026, the remaining consideration due from such buyers was $ 36,879 , $ 19,959 and $ 39,289 , respectively, (See Note - 15 — DISPOSAL OF SUBSIDIARIES). On September 1, 2025, the Company entered into share transfer agreements for the sale of 100 % of its equity interests in subsidiaries –TKPGO CORP, FIYET INC and FLYCLB INC – to third-party buyers for a total cash consideration of $ 1,707 , $ 1 and $ 1 , respectively, with no contingent payments or adjustments. As of March 31, 2026, the remaining consideration due from such buyers was $ 1,709 (See Note - 15 — DISPOSAL OF SUBSIDIARIES). On December 19, 2025, the Company entered into share transfer agreements for the sale of 100 % of its equity interests in subsidiaries – DCMOTOR INC and FLYNJ1 INC to third-party buyers for a total cash consideration of $ 1 and $ 1 , respectively, with no contingent payments or adjustments. As of March 31, 2026, the remaining consideration due from such buyers was $ 2 (See Note - 15 — DISPOSAL OF SUBSIDIARIES). On January 1, 2026, the Company entered into share transfer agreements for the sale of 100 % of its equity interests in subsidiaries – FLYFLS INC, FLYNJ2 INC, FLY E BIKE NJ3, INC, FLYNJ4 INC, FLYTORONTO Corp to third-party buyers for a total cash consideration of $ 69,420 , $ 68,627 , $ 511,353 , $ 146,473 and$ 628,151 , respectively, with no contingent payments or adjustments. On February 10, 2026, the Company advanced retail store renovation fees on behalf of FLYFLS INC, DCMOTOR INC, FLYNJ1 INC and FLY E BIKE NJ3, with cash payments of $ 400,000 , $ 400,000 , $ 400,000 and $ 100,000 , respectively, which are recovered from these companies. F- 22 6 — PROPERTY AND EQUIPMENT, NET Property and equipment as of March 31, 2026 and 2025 consisted of the following: As of March 31, As of March 31, 2026 2025 Furniture and Fixtures $ 294,510 $ 400,080 Machinery and Equipment 145,820 230,015 Automobile 468,238 669,902 Leasehold improvements 254,065 683,595 Building 3,663,215 3,663,215 Computer hardware and software (i) 2,500,000 2,310,000 Properties for rental business (ii) 188,182 193,963 Property and Equipment 7,514,030 8,150,770 Less: Accumulated depreciation ( 1,163,052 ) ( 863,557 ) Less: Accumulated impairment loss (iii) ( 558,063 ) — Property and Equipment, net $ 5,792,915 $ 7,287,213 For the years ended March 31, 2026 and 2025, the depreciation expenses were $ 719,383 and $ 631,280 and the impairment loss were $ 558,063 and nil , 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. 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. The remaining balance of $ 190,000 was capitalized upon full completion in May 2025, bringing the total capitalized cost to $ 2,500,000 as of March 31, 2026. As of March 31, 2026 and 2025, the Company had a prepayment of nil and $ 136,580 , respectively, to DFT (see Note 14– Long-term prepayment for software development – a related party). (ii) 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. (iii) During the year ended March 31, 2026, the Company identified impairment indicators related to its certain technology services ERP system, due to technological obsolescence of the existing system. The Company performed an impairment assessment of the ERP system asset group in accordance with ASC 360. The asset group tested comprised the capitalized costs of the ERP system, including software licenses, implementation and customization costs, and related hardware, with a carrying amount of $ 2,232,250 prior to impairment. The Company determined the fair value of the asset group using the income approach, based on the present value of expected future cash flows, which represents a Level 3 fair value measurement. The impairment loss of $ 558,063 represents the excess of the carrying amount of the asset group over its estimated fair value. The loss is presented within general and administrative expenses in the accompanying statement of operations. F- 23 7 — INTANGIBLE ASSETS, NET Intangible assets as of March 31, 2026 and 2025 consisted of the following: As of March 31, As of March 31, 2026 2025 Property rights $ 108,081 $ 92,604 GO FLY App 500,000 500,000 Total Intangible assets 608,081 592,604 Less: Accumulated amortization ( 176,888 ) ( 66,739 ) Intangible assets, net $ 431,193 $ 525,865 For the years ended March 31, 2026 and 2025, the amortization expenses were $ 110,149 and $ 65,091 , respectively. 8 — ACCRUED EXPENSES AND OTHER PAYABLES As of March 31, As of March 31, 2026 2025 Accrued payroll $ 64,834 $ 62,068 Advances from customers 412,023 28,144 Advances from IGH Holding Inc 49,000 49,000 Accrued warranty 51,418 20,131 Payroll tax and sales tax payable 25,265 113,601 Accrued store expenses 69,370 58,044 Accrued freight in cost 8,290 35,980 Accrued UL penalty (i) — 1,000,000 Accrued Interest — — Total Accrued Expenses and Other Payables $ 680,200 $ 1,366,968 (i) 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 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. During the year ended March 31, 2026, the Company paid $ 1,000,000 to UL. F- 24 9 — LOAN PAYABLES A summary of the Company’s loans is listed as follows: As of March 31, As of March 31, Lender Due Date 2026 2025 Chase Bank (i) January 12, 2028 $ — $ 301 Leaf Capital Funding, LLC (ii) December 31, 2027 — 34,620 Automobile Loan – Honda (iii) June 25, 2027 — 20,353 Milea Truck Sales of Queens Inc. (iv) August 22, 2027 65,234 106,093 Milea Truck Sales of Queens Inc. (iv) July 26, 2027 45,404 76,779 Peapack-Gladstone Bank (v) March 31, 2026 3,936,058 4,936,058 Velocity Commercial Capital, LLC (vi) December 1, 2054 1,921,240 1,927,729 AOWINV LLC (vii) June 10, 2025 — 255,000 Stripe, Inc. (ix) December 22, 2026 7,544 — Total loan payables 5,975,480 7,356,933 Short-term loan payables ( 3,936,058 ) ( 5,191,058 ) Current portion of long-term loan payables ( 93,980 ) ( 100,835 ) Total Long-term loan payables $ 1,945,442 $ 2,065,040 (i) 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. with an annual interest rate of 9.8 %. Mr. Tong Chen, an original stockholder of the Company, provided a guarantee on this loan. To secure payment and performance of the liabilities, Arfy 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. As of March 31, 2026, the Company paid off this loan in full. (ii) On August 24, 2022, Universe King Corp. obtained a five-year long-term loan of $ 63,674 from Leaf Capital Funding, LLC with an annual interest rate of 7.0 %. The collateral provided included the Fuso trucks, whether now owned or hereafter acquired by Universe King Corp., and together with all accessories, accessions, attachments thereto, and all other substitutions, renewals, replacements and improvements and all proceeds of the foregoing. As of March 31, 2026, the company paid off this loan in full. (iii) 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, 2026, the outstanding balance is nil . (iv) 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, 2026, the outstanding balance is $ 65,234 . From April 1 to May 31, 2026, the Company paid nil 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, 2026, the outstanding balance is $ 45,404 . From April 1 to May 31, 2026, the Company paid $ 2,980 on principal and interest of the loan. F- 25 (v) 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 %. From August 5 to August 6, 2024, the Company withdrew $ 996,476 and $ 423,506 from its line of credit to repay loans from Bank of Hope and JPMorgan Chase Bank, N.A., respectively. From August 7 to August 19, 2024, the Company withdrew $ 3,490,000 from the line of credit. Mr. 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. The Company became default of repayment since August 31, 2025. The Company entered into forbearance and modification agreement with the bank on November 7, 2025 for extension of repayment deadline with interest rate of 12.875 % to March 31, 2026. Subsequent to the execution of the forbearance agreement, the Company has received written notices from Peapack Private Bank asserting defaults and reserving the lender’s rights to pursue remedies under the applicable loan documents. During the year ended March 31, 2026, the Company paid $ 1,000,000 , $ 669,725 and $ 117,921 on principal, interest and forbearance fee of the loan, respectively. The Company entered into a forbearance and modification agreement with the bank on May 28, 2026, extending the repayment deadline to June 30, 2026, at an interest rate of 12.875 %, and the agreement requires the Company to pay $ 123,877 in interest and a $ 4,000 forbearance fee in respect of the loan. As of July 23, 2026, the Company is in ongoing negotiations with the bank for a renewal. (vi) 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 Velocity 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 Velocity 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. (vii) On February 10, 2025, 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. (viii) On April 29, 2025, the Company obtained a 30-week short-term loan of $ 1,575,000 from Agile Capital Funding, LLC, with an annual interest rate of 72.8 %, which requires weekly repayments of $ 74,550 . The collateral provided included all properties, rights and assets of FLY E-BIKE, INC. As of March 31, 2026, the Company paid off this loan in full. (ix) On June 23, 2025, a total of 8 subsidiaries of the Company obtained 42-week short-term loans from Stripe, Inc. with an aggregate principal amount of $ 126,100 and 18-month long-term loans from Stripe, Inc. with an aggregate principal amount of $ 216,000 . Repayment schedules differ by agreement and include both weekly and 60-day installment options. The stated annual interest rates range from 10.2 % to 20.4 %. For the years ended March 31, 2026 and 2025, the total interest expenses on the Company’s loans amounted to $ 1,806,085 and $ 405,615 , respectively. The weighted average annual interest rate on borrowings outstanding as of March 31, 2026 and 2025 was 9.1 % and 13.1 %, respectively. As of March 31, 2026, the current loan payable and non-current loan payable were $ 4,030,038 and $ 1,945,442 , respectively. The principal repayment schedule of the bank loans was as follows: Ending March 31, Repayment 2027 $ 4,029,893 2028 40,631 2029 9,675 2030 10,941 2031 12,373 Thereafter 1,871,967 Total $ 5,975,480 F- 26 10 — STOCKHOLDERS’ EQUITY Prior to the effectiveness of the stock splits 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. 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 (the “IPO”) and issued 22,500 shares of common stock, at a price of $ 400.00 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 3,375 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 3,375 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. On September 18, 2025, the Company entered into a securities purchase agreement with third-party individuals offering of 687,500 shares of the common stock at the price of $ 16.0 per share for a total consideration of $ 11,000,000 . The Company partially received net proceeds of $ 3,400,000 from the investors in September 2025, and received the remaining net proceeds of $ 7,596,558 in October and November 2025. 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 par value per share remained unchanged at $ 0.01 . On November 4, 2025, the Company implemented a 1-for-20 reverse stock split of its issued and outstanding shares of common stock. The par value per share remained unchanged at $ 0.01 . The reverse stock splits were 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. As of March 31, 2026 and 2025, the number of issued and outstanding shares of common stock was 1,632,386 and 245,875 , respectively. Representative’s Warrants Upon the closing of IPO in June 2024, the Company issued to Benchmark, the representative of the underwriters, warrants to purchase 1,294 shares of common stock. The Representative’s Warrants have an exercise price equal to $ 400.00 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, 2026. F- 27 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: June 7, 2024 Stock price $ 400.00 Risk-free interest rate 4.46 % Volatility 56.52 % Exercise price $ 400.00 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 and November 2025. Registered Direct Offering Warrants On June 4, 2025, the Company closed its public offering of 285,956 shares of common stock and 571,912 warrants (“2025 Warrants”) to purchase common stock (including shares of common stock underlying warrants) at a public offering price of $ 24.28 . Each share of common stock was sold together with two 2025 Warrants, with each 2025 Warrants to purchase one share of common stock. Each 2025 Warrants is exercisable immediately upon issuance, have an exercise price equal to $ 29.13 which is 120 % of the offering price and will expire five years from the date of issuance. Each 2025 Warrant is exercisable for one share of common stock, subject to adjustment in the event of stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting the Company’s common stock. A holder may not exercise any portion of a 2025 Warrant to the extent that the holder, together with its affiliates and any other person or entity acting as a group, would own more than 4.99 % of the Company’s outstanding shares of common stock after exercise, as such ownership percentage is determined in accordance with the terms of the 2025 Warrants, except that upon notice from the holder to the Company, the holder may waive such limitation up to a percentage, not in excess of 9.99 %. The 2025 Warrants are also exercisable on a cashless basis. The 2025 Warrants are classified as equity as they are indexed to the Company’s own stock and meet the criteria for equity classification according to ASC:815-40. All the 2025 Warrants were exercised as of March 31, 2026. The fair value of the 2025 Warrant, using the Black-Scholes Model on the date of issuance was $ 21,296,598 . The key inputs into the Black-Scholes Model variables were as follows at measurement date: June 4, 2025 Stock price $ 55.5 Risk-free interest rate 3.93 % Volatility 53.92 % Exercise price $ 29.13 Dividend yield $ — Expected term (in years) 5.0 Fair value per warrant $ 37.24 Number of warrants issued 571,912 Total fair value of 2025 Warrants $ 21,296,598 The stock price and exercise prices stated herein have been retroactively adjusted to reflect the reverse stock split that occurred in July 2025 and November 2025. F- 28 The following table summarizes the Company’s activities and status of the Representative’s Warrants and 2025 Warrants: Weighted Weighted Average Average Remaining Number of Exercise Term Warrant Price (Years) Outstanding as of March 31, 2025 1,294 $ 400.00 4.2 Issued 571,912 29.13 Exercised ( 571,912 ) 29.13 Forfeited or expired — — Outstanding as of March 31, 2026 1,294 $ 400.00 3.2 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 and November 2025. During the year ended March 31, 2026, all holders of the Company’s 2025 Warrants exercised their rights to acquire common stock. The exercises were completed on a cashless basis pursuant to the terms of the warrant agreements. 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 and the 1-for-20 reverse stock split. During the year ended March 31, 2026, 571,912 of the 2025 Warrants were exercised on a cashless basis pursuant to the terms of the warrant agreements, resulting in the issuance of 410,982 shares of common stock. Subscription Receivable As of March 31, 2026 and 2025, the subscription receivable represents the unpaid capital contribution of $ 219,998 by the stockholders. On September 18, 2025, the Company entered into a securities purchase agreement with third-party individuals offering of 687,500 shares of the common stock at the price of $ 16.0 per share for a total consideration of $ 11,000,000 . The Company partially received net proceeds of $ 3,400,000 from the investors in September 2025, and received the remaining net proceeds of $ 7,596,558 in October and November 2025. The following table reconciles the Company’s common shares outstanding from March 31, 2025 to March 31, 2026: Common Stock Shares Number of Shares Outstanding as of March 31, 2025 245,875 Public offering in June 2025 285,956 Private placement in September 2025 687,500 Cashless exercise of warrants 410,982 Fractional shares / other adjustments 2,073 Outstanding as of March 31, 2026 1,632,386 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 and November 2025. 11 —INCOME TAX (a) Income Tax Expense The Company conducts 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. 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, 2026, 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 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 city. 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 %. 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 %. F- 29 The Company’s wholly owned foreign subsidiary in Canada will file a Canadian federal tax return for tax year ending March 31, 2026, 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, 2026 and 2025 amounted to $ 0.33 million and $ 0.34 million, respectively. Significant components of the provision for income taxes are as follows: For the Years Ended March 31, 2026 2025 Current Federal $ ( 3,108 ) $ 94,113 State 258,325 183,598 City ( 49,431 ) 123,284 Foreign 165,005 — Deferred Federal — ( 4,000 ) State — 1,000 City — ( 2,000 ) Foreign ( 42,112 ) ( 59,829 ) Total $ 328,679 $ 336,166 The provision for income taxes is based on the following pretax income (loss): For the Years Ended March 31, 2026 2025 U.S. $ ( 9,904,580 ) $ ( 4,690,634 ) Canada 975,451 ( 264,359 ) Total $ ( 8,929,129 ) $ ( 4,954,993 ) For the years ended March 31, 2026, the total pre-tax loss was $ 8.9 million, which included $ 9.9 million pre-tax loss in the U.S. and $ 1.0 million pre-tax income in Canada. 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. The following table reconciles to the Company’s effective tax rate: For the Years Ended March 31, 2026 2025 Pre-tax book loss $ ( 8,929,129 ) $ ( 4,954,993 ) Federal Statutory rate 21.0 % 21.0 % State income tax rate, net of federal income tax benefit 5.5 % 4.6 % City income tax rate, net of federal income tax benefit 7.8 % 5.5 % Foreign statutory rate 0.9 % 0.4 % Permanent differences 0.2 % ( 1.2 )% Valuation allowance of deferred tax assets ( 41.3 )% ( 34.6 )% Return to project adjustment 2.2 % ( 2.5 )% Total ( 3.7 )% ( 6.8 )% F- 30 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, 2026 and 2025, the Company accrued $ 33,464 and $ 30,301 of income tax related penalty included in current income taxes expenses, respectively. United States Income tax expense for the year ended March 31, 2026 and 2025 amounted to $ 0.21 million and $ 0.40 million, respectively. Significant components of the provision for income taxes are as follows: For the Years Ended March 31, 2026 2025 Current Federal $ ( 3,108 ) $ 94,113 State 258,325 183,598 City ( 49,431 ) 123,284 Deferred Federal — ( 4,000 ) State — 1,000 City — ( 2,000 ) Total $ 205,786 $ 395,995 Canada Fly Toronto Corp, a subsidiary of the Company, was formed under the laws of Canada and conducts its business primarily in Canada. Income tax loss for the year ended March 31, 2026 and income tax benefit 2025 amounted to $ 122,893 and $ 59,829 , respectively. Significant components of the provision for income taxes are as follows: For the Years Ended March 31, 2026 2025 Current Federal $ 93,399 $ — State 71,606 — City — — Deferred Federal ( 23,837 ) ( 33,866 ) State ( 18,275 ) ( 25,963 ) City — — Total $ 122,893 $ ( 59,829 ) F- 31 (b) Deferred Tax Assets (Liabilities) Net DTAs as of March 31, 2026 and 2025 amounted to nil and $ 94,983 , respectively. Significant components of DTAs (DTLs), net are as follows: As of March 31, As of March 31, 2026 2025 Net operating loss carry forwards $ 3,250,235 $ 1,506,378 Inventory reserve 332,000 410,000 Operating right-of-use liability 1,801,000 4,837,000 ECL allowances 83,000 — Depreciation and amortization difference 175,765 10,000 Total deferred tax assets (DTAs) 5,642,000 6,763,378 Valuation allowance ( 4,037,000 ) ( 1,714,000 ) Deferred tax assets, net of valuation allowance $ 1,605,000 ) $ 5,049,378 Accumulated depreciation ( 460,395 ) Operating lease right-of-use assets ( 1,605,000 ) ( 4,494,000 ) Total deferred tax liabilities (DTLs) ( 1,605,000 ) ( 4,954,395 ) Deferred tax assets, net $ — $ 94,983 Deferred tax assets (liabilities) – U.S., net $ — $ — Deferred tax assets – Canada, net $ — $ 94,983 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, 2026 and 2025, the Company recorded approximately $ nil and $ 94,983 , respectively, in the net DTAs. As of March 31, 2026, 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. 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 year. 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 $ 4,037,000 with respect to its net deferred income tax assets as of and for the fiscal year ended March 31, 2026. 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, 2026 and 2025, the Company did not have any significant unrecognized uncertain tax positions. 12 — LEASES The Company adopted Topic 842 for all periods presented. At the inception of a contract, the Company determines if the arrangement is, or contains, a lease. The Company’s leases mainly consisted of offices, retail stores, and warehouses. F- 32 The Company’s operating right-of-use (“ROU”) assets and lease liabilities were as follows: As of March 31, As of March 31, 2026 2025 Operating ROU: ROU assets $ 4,289,237 $ 10,933,068 Total operating ROU assets $ 4,289,237 $ 10,933,068 As of March 31, As of March 31, 2026 2025 Operating lease obligations: Current operating lease liabilities $ 1,507,340 $ 2,617,762 Non-current operating lease liabilities 3,302,325 9,106,928 Total lease liabilities $ 4,809,665 $ 11,724,690 The Company had 9 and 36 leases as of March 31, 2026 and 2025, respectively. The weighted average lease term, discount rates, and remaining lease terms for the operating leases as of March 31, 2026 were as follows: Remaining lease term and discount rate: Weighted average annual discount rate 7.2 % Weighted average remaining lease term (years) 2.93 years 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: Weighted average annual discount rate 7.2 % Weighted average remaining lease term (years) 4.67 years The Company leases its offices, warehouse, and retail stores under non-cancellable operating lease agreements. During the year ended March 31, 2026, lease expenses were approximately $ 2.6 million, including approximately $ 1.5 million in cost of revenues and approximately $ 1.1 million in selling expense and nil in general and administrative expense. During the year ended March 31, 2025, lease expenses were approximately $ 4.3 million, including approximately $ 1.4 million in cost of revenues and approximately $ 2.9 million in selling expense and $ 62,527 in general and administrative expense. For the year ended March 31, 2026, the Company terminated 28 leases. For the year ended March 31, 2025, the Company terminated 12 leases. F- 33 As of March 31, 2026, future minimum lease liabilities, all under office and facilities non-cancellable operating lease agreements, were as follows: Operating Lease Twelve months ending March 31, Liabilities 2027 $ 1,794,325 2028 1,838,582 2029 1,568,299 2030 135,103 Thereafter — Total lease payments 5,336,309 Less: interest ( 526,644 ) Present value of lease liabilities $ 4,809,665 13 — COMMITMENTS AND CONTINGENCIES Commitments 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 Legal 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. F- 34 Federal securities class action instituted on September 8, 2025 On September 8, 2025, a federal securities class action was filed in the United States District Court, Eastern District of New York, by plaintiff Dino Kurt, individually and on behalf of all others similarly situated, against defendants, the Company, chief executive officer (the “CEO”) Zhou Ou, and former chief financial officer (the “CFO”) Shiwen Feng (the “Class Action”). The complaint alleges violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 during the class period spanning from July 15, 2025, to August 14, 2025. The plaintiff claims that defendants provided materially false and misleading positive statements about revenue growth, brand reputation, and business expansion, while concealing or minimizing material adverse facts concerning the safety of the Company’s lithium battery and inadequate forecasting processes, which were already taking a material toll on E-vehicle (the “EV”) sales revenue. The plaintiff alleged when the Company filed a form NT 10-Q on August 14, 2025, which disclosed a 32 % decrease in net revenues primarily driven by a decline in total units sold, attributed by the Company to “recent lithium-battery accidents involving E-Bikes and E-Scooters”; the price of Company’s common stock declined dramatically by about 87 % in a single day, resulting in economic loss for the plaintiff and the class. The relief sought includes determining that the action may be maintained as a class action, requiring defendants to pay damages sustained by the plaintiff and the class, and awarding pre-judgment and post-judgment interest, along with reasonable attorneys’ fees, expert fees, and other costs, with the monetary damages sought being certified to be in excess of $ 150,000 . On May 22, 2026, the lead plaintiff in the Class Action filed an Amended Complaint. The Company's response to the Amended Complaint is due August 14, 2026. Given the preliminary stage of the lawsuit and the inherent uncertainties of litigation, the Company cannot determine with certainty the outcome of the Class Action at this time. Any potential loss associated with the action is not reasonably estimable at this early stage. The Company did not accrue any material loss contingencies in this respect as of March 31, 2026. Shareholder derivative actions instituted on October 28, 2025 and November 17, 2025 On October 28, 2025, a shareholder derivative lawsuit was filed purportedly on behalf of the Company, as nominal defendant, against certain of its current and former directors and officers in the United States Court for the Eastern District of New York, captioned Flynn v. Ou et al, No. 1:25-cv-06036 (E.D.N.Y.) (the “Flynn Action”). The complaint filed in the Flynn Action alleges claims for alleged breach of fiduciary duties and gross mismanagement, among others. On November 17, 2025, an additional putative shareholder derivative lawsuit was filed purportedly on behalf of the Company, as nominal defendant, against certain of its current and former directors and officers in the United States Court for the Eastern District of New York, captioned Shah v. Ou et al, No. 1:25-cv-06372 (E.D.N.Y.) (the “Shah Action”). The complaint filed in the Shah Action alleges claims for alleged breach of fiduciary duty, unjust enrichment, waste of corporate assets, gross mismanagement, abuse of control, among others. The Flynn Action and Shah Action are based on the same alleged facts and circumstances as the Class Action and seek damages from the current and former directors and officers and an order directing the Company and current and former directors and officers to take actions to reform and improve corporate governance and internal procedures. On December 9, 2025, the Court consolidated the Flynn Action and Shah Action into a single consolidated action captioned In re Fly-E Group, Inc. Stockholder Derivative Litigation, No. 1:25-cv-06036 (E.D.N.Y.)(the “Consolidated Derivative Action”), and appointed co-lead counsel. The current and former director and officer defendants dispute the allegations in the complaints and intend to vigorously defend against all claims. Given the preliminary stage of the lawsuit and the inherent uncertainties of litigation, we cannot determine with certainty the outcome of the Consolidated Derivative Action at this time. SEC Investigation On January 21, 2026, the Company was notified by the U.S. Securities and Exchange Commission (the “Commission”) that it has initiated an investigation involving the Company. The Company has not been provided with substantive details regarding the investigation, and is fully cooperating with the investigation. 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 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 8 — Accrued Expenses and other payables). During the year ended March 31, 2026, the Company paid $ 1,000,000 to UL. F- 35 Inflation 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. 14 — RELATED PARTY TRANSACTIONS (A) Related party balances Accounts receivable, net — a related party Name of Related Party Relationship Nature As of March 31, 2026 As of March 31, 2025 Fly E Bike SRL Zhou Ou (CEO), owns over 50% equity interest of this entity Accounts receivable $ 73,130 $ 78,565 Accounts receivable – a related party 73,130 78,565 Less: Allowance for credit losses ( 41,100 ) ( 41,100 ) Accounts receivable, net – a related party $ 32,030 $ 37,465 During the year ended March 31, 2026, the Company received $ 5,435 from Fly E Bike SRL. Prepayments and other receivables — related parties As of March 31, As of March 31, Name of Related Party Relationship Nature 2026 2025 Fly E Bike SRL Zhou Ou (CEO), owns over 50% equity interest of this entity Other receivables $ 161,560 $ — PJMG LLC Ruifeng Guo (former CFO who resigned on November 6, 2024), owns over 50% equity interest of this entity Prepayments — 120,000 Prepayments and other receivables – related parties $ 161,560 $ 120,000 During the year ended March 31, 2026, the Company advanced $ 161,560 to Fly E Bike SRL, a distributor the Company works with and in which Mr. Ou holds over 50 % of the equity interest. The amount is unsecured, non-interest bearing and repayable on demand. F- 36 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 originally from June 2024 to May 2025, further extended to September 2025. The service fee is $ 45,000 for the first month and from the second month the fees will be $ 15,000 per month. PJMG was terminated after the services were completed on December 31, 2025. The prepayment of $ 120,000 was recognized as expenses in the year ended March 31, 2026. Long-term prepayment for software development – a related party As of March 31, As of March 31, Name of Related Party Relationship Nature 2026 2025 DF Technology US Inc (“DFT”) 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 Long-term prepayment for software development — a related party $ — $ 136,580 In December 2023, the Company engaged DFT for development of certain technology services. Mr. 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, 2026 and 2025, the Company paid nil and $ 136,580 to DFT as prepayment for software development, respectively. The total contract price for the ERP system is $ 2,500,000 , and the ERP system was delivered on May 20, 2025. (see Note 6 – Property and Equipment). Accrued expenses and other payables – a related party During the years ended March 31, 2026 and 2025, the Company’s former CEO advanced $ 225 to the Company for payments of operating expenses. The amount is unsecured, non-interest bearing and repayable on demand. (B) Related party transactions Revenues — a related party For the Years Ended March 31, Name of Related Party Relationship Nature 2026 2025 Fly E Bike SRL Zhou Ou (CEO), owns over 50% equity interest of this entity Product sales $ — $ 42,010 Revenues — a related party $ — $ 42,010 During the years ended March 31, 2026 and 2025, Fly E Bike SRL, purchased certain EV products from the Company in the amount of nil and $ 42,010 , respectively. F- 37 (C) Other Related Party Transactions 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. Mr. Guo, the Company’s former CFO who resigned on November 6, 2024, 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 nil and nil for the years ended March 31, 2026 and 2025, respectively. In addition, during the years ended March 31, 2026 and 2025, the Company paid DGLG a total of nil and $ 61,050 for tax services, including sales tax services, payroll tax services, and income tax services, rendered by DGLG, respectively. 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. 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, and $ 120,000 was expensed as consulting expenses during the year ended March 31, 2026. 15 — DISPOSAL OF SUBSIDIARIES During the year ended March 31, 2026, 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. The 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. During the year ended March 31, 2026, 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 $ 310,055 . There were no contingent payments, earn-outs, or post-closing adjustments specified in the agreements. During the year ended March 31, 2026, the Company received $ 30,000 from the Buyers. There was no gain or loss on the sale of subsidiaries. On April 2, 2025, the management team approved to sell 100 % of its equity interests in subsidiaries ARFY CORP., FLY GC INC., and ESEBIKE INC to third-party individuals (the “Buyers”). On May 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 $ 156,517 . There were no contingent payments, earn-outs, or post-closing adjustments specified in the agreements. During the year ended March 31, 2026, the Company received $ 55,000 from the Buyers. There was no gain or loss on the sale of subsidiaries. F- 38 On May 6, 2025, the management team approved to sell 100 % of its equity interests in subsidiaries UFOTS CORP and FLYCORONA INC to third-party individuals (the “Buyers”). On June 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 $ 60,207 . There were no contingent payments, earn-outs, or post-closing adjustments specified in the agreements. During the year ended March 31, 2026, the Company received $ 27,000 from the Buyers. There was no gain or loss on the sale of subsidiaries. On June 17, 2025, the management team approved to sell 100 % of its equity interests in subsidiaries OFLYO INC, FLYCYCLE INC, and FLYBX2381 INC to third-party individuals (the “Buyers”). On July 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 $ 235,939 . There were no contingent payments, earn-outs, or post-closing adjustments specified in the agreements. On July 18, 2025, the management team approved to sell 100 % of its equity interests in subsidiaries MEEBIKE, FIYTRON INC and FLYAM INC to third-party individuals (the “Buyers”). On August 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 $ 96,327 There were no contingent payments, earn-outs, or post-closing adjustments specified in the agreements. On August 19, 2025, the management team approved to sell 100 % of its equity interests in subsidiaries TKPGO CORP., FIYET INC and FLYCLB INC to third-party individuals (the “Buyers”). On September 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 $ 1,709 . There were no contingent payments, earn-outs, or post-closing adjustments specified in the agreements. On December 19, 2025, the management team approved to sell 100 % of its equity interests in subsidiaries DCMOTOR INC and FLYNJ1 INC to third-party individuals (the “Buyers”). On December 19, 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 $ 1 and $ 1 . There were no contingent payments, earn-outs, or post-closing adjustments specified in the agreements. On December 21, 2025, the management team approved to sell 100 % of its equity interests in subsidiaries FLYFLS INC, FLYNJ2 INC., FLYE BIKE NJ3, INC, FLYNJ4 INC. and FLYTORONTO CORP to third-party individuals (the “Buyers”). On January 1, 2026, 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 $ 1,424,024 . There were no contingent payments, earn-outs, or post-closing adjustments specified in the agreements. There was gain on the sale of subsidiaries of $ 1,778,482 for the year ended March 31, 2026. F- 39 During the year ended March 31, 2026, the Company completed the disposal of certain subsidiaries. In accordance with ASC 205-20, Discontinued Operations, the Company evaluated whether these disposals represent a strategic shift that has (or will have) a major effect on the Company’s operations and financial results. Based on this evaluation, the Company concluded that these disposals do not qualify for presentation as discontinued operations. To support this conclusion, the following table presents a quantitative comparison of the disposed subsidiaries’ financial metrics against those of the consolidated Company for the most recent annual period prior to disposal: Metric Disposed Subsidiaries Consolidated Company % of Consolidated Revenues $ 1,584,030 $ 19,063,357 8.3 % Net assets $ 463,144 $ 17,442,404 2.7 % As illustrated above, the disposed subsidiaries in the aggregate represent a quantitatively insignificant portion of the Company’s revenues or net assets. The Company therefore concluded that these disposals do not constitute a strategic shift that has a major effect on the Company’s operations and financial results as contemplated by ASC 205-20-45-1B. Accordingly, the results of operations of the disposed subsidiaries are presented within continuing operations for all periods presented. 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: As of March 31, As of March 31, 2026 2025 ASSETS Cash $ — $ 61,548 Accounts receivables — — Inventories, net — 195,192 Prepayments and other receivables — 22,096 Property and equipment, net — 154,876 Security deposits — 73,025 Deferred tax assets, net — — Operating lease right-of-use assets — 1,955,765 Assets held for sale $ — $ 2,462,502 LIABILITIES Accrued expenses and other payables $ — $ — Short-term loan payables — 25,498 Operating lease liabilities – current — 319,874 Operating lease liabilities – non-current — 1,807,075 Liabilities held for sale $ — $ 2,152,447 There was no gain or loss on the sale of subsidiaries on January 1, 2025: Total consideration determined: $ 310,055 Net assets disposed of, excluding intercompany other receivables: $ 310,055 16 — SUBSEQUENT EVENTS The Company has evaluated subsequent events after March 31, 2026, up through July 23, 2026, the date at which the consolidated financial statements were issued. 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. F- 40