Fly-E Group's Revenue Plummets 37% Amid Store Closures, Losses Widen

TL;DR

**FLYE is burning cash and shrinking its footprint; the recent capital raises are a band-aid, not a cure.**

AI Summary

Fly-E Group, Inc. (FLYE) reported a significant decline in revenue and a widening net loss for the six months ended September 30, 2025. Revenues decreased by 37.15% to $9,237,060 from $14,697,832 in the prior year period. The net loss widened substantially to $3,784,773, compared to a net loss of $1,322,356 for the six months ended September 30, 2024. This deterioration was driven by a 46.07% drop in gross profit to $3,237,896 and a 40.76% increase in interest expenses to $1,085,771. The company strategically disposed of 9 retail stores in the U.S. through subsidiary sales on July 1, August 1, and September 1, 2025, aiming to streamline operations and reduce costs. Despite these challenges, FLYE raised significant capital through a registered direct offering of 285,956 shares for $6.9 million in June 2025 and a private placement of 687,500 shares for $11 million in September 2025, though only $3.4 million of the private placement proceeds were received by September 2025. Cash increased to $2,538,076 as of September 30, 2025, from $840,102 at March 31, 2025, primarily due to these financing activities.

Why It Matters

Fly-E Group's substantial revenue decline and widening losses signal significant operational challenges and a potential struggle for market share in the competitive electric vehicle sector. The strategic divestiture of 9 retail stores, while intended to streamline operations, also indicates a contraction of its physical footprint, which could impact customer reach and brand visibility. For investors, the increased net loss and high interest expenses raise concerns about profitability and debt sustainability, despite recent capital raises. Employees at the divested stores face job uncertainty, and customers may experience reduced access to Fly E-Bike products and services, potentially benefiting competitors in the e-bike and e-scooter market.

Risk Assessment

Risk Level: high — The company reported a net loss of $3,784,773 for the six months ended September 30, 2025, and a loss from operations of $2,553,198, indicating significant cash burn. Furthermore, the substantial increase in interest expenses to $1,085,771 for the six months ended September 30, 2025, up from $91,877 in the prior year, highlights a growing debt burden and financial instability.

Analyst Insight

Investors should exercise extreme caution and consider divesting, as Fly-E Group's declining revenues, widening losses, and increasing debt burden suggest a challenging path to profitability. Monitor future filings for evidence of successful operational streamlining and a clear path to sustainable revenue growth, as current trends are concerning.

Financial Highlights

revenue

$9.24M

total Assets

$31.63M

total Debt

$16.33M

net Income

-$3.78M

eps

-$6.58

gross Margin

35.05%

cash Position

$2.54M

revenue Growth

-37.15%

Key Numbers

• $9.24M — Revenues (Decreased by 37.15% from $14.70M in the prior year period.)
• $3.78M — Net Loss (Widened from $1.32M in the prior year period.)
• $1.09M — Interest Expenses (Increased by 40.76% from $91,877 in the prior year period.)
• 9 — Retail Stores (Number of U.S. retail stores sold during the three months ended September 30, 2025.)
• $2.54M — Cash (Increased from $840,102 at March 31, 2025, due to financing activities.)
• 1,632,351 — Common Stock Shares Outstanding (As of September 30, 2025, reflecting reverse stock splits.)
• $6.58 — Losses per Share (For the six months ended September 30, 2025, compared to $5.60 in prior year.)
• $7.71M — Net Cash Used in Operating Activities (For the six months ended September 30, 2025, indicating significant cash burn.)

Key Players & Entities

• Fly-E Group, Inc. (company) — registrant
• Fly E-Bike Inc. (company) — wholly owned subsidiary
• Fly EV, Inc. (company) — wholly owned subsidiary
• Nasdaq Stock Market LLC (regulator) — exchange where common stock is registered
• The Benchmark Company, LLC (company) — representative of underwriters
• $9,237,060 (dollar_amount) — revenues for six months ended September 30, 2025
• $3,784,773 (dollar_amount) — net loss for six months ended September 30, 2025
• $1,085,771 (dollar_amount) — interest expenses for six months ended September 30, 2025
• September 30, 2025 (date) — end of reporting period
• July 3, 2025 (date) — date of 1-for-5 reverse stock split

FAQ

Risk Factors

• Significant Cash Burn and Need for Future Financing [high — financial]: The company reported net cash used in operating activities of $7.71 million for the six months ended September 30, 2025. This substantial cash burn, coupled with a widening net loss, indicates a continued reliance on external financing to sustain operations. Future financing may be dilutive to existing shareholders.
• Store Closures and Operational Streamlining [medium — operational]: Fly-E Group disposed of 9 retail stores in the U.S. during the period. While intended to streamline operations and reduce costs, this action signifies a contraction in the company's physical retail footprint and may impact future revenue generation from these locations.
• Increased Interest Expenses [medium — financial]: Interest expenses increased by 40.76% to $1,085,771 for the six months ended September 30, 2025, compared to the prior year period. This rise in financing costs puts additional pressure on profitability.
• Deteriorating Gross Profit Margins [high — financial]: Gross profit decreased by 46.07% to $3,237,896 for the six months ended September 30, 2025. This significant drop in gross profit, outpacing the revenue decline, suggests potential issues with cost of goods sold or pricing pressures.

Industry Context

Fly-E Group operates in a challenging retail environment, likely facing intense competition and evolving consumer preferences. The trend towards online retail and the need for efficient supply chains are critical factors. Companies in this sector often undergo restructuring and seek strategic partnerships or capital infusions to navigate market shifts.

Regulatory Implications

The company's financing activities, including registered direct offerings and private placements, are subject to securities regulations. Any future equity issuances must comply with disclosure requirements. The disposal of assets and potential restructuring may also have implications for various local and federal regulations.

What Investors Should Do

1. Monitor cost management and gross margin trends
2. Assess the effectiveness of store disposals
3. Analyze future financing needs and dilution
4. Scrutinize the increase in interest expenses

Key Dates

• 2025-06-01: Registered Direct Offering — Raised $6.9 million, providing crucial capital to the company. This indicates investor confidence despite operational challenges.
• 2025-07-01: Disposal of U.S. Retail Stores — First of three tranches of retail store disposals, aimed at operational streamlining and cost reduction.
• 2025-09-01: Private Placement of Shares — Raised $11 million, with $3.4 million received by September 30, 2025. This further bolstered cash reserves.
• 2025-09-30: End of Period Reporting — Reflects a significant increase in cash to $2.54M from $0.84M at the start of the fiscal year, largely due to financing activities.

Glossary

Accumulated Deficit

The total net losses of a company since its inception that have not been offset by net income. (Indicates the company has historically incurred more losses than profits, with the deficit widening significantly in the current period.)

Assets Held for Sale

Assets that a company intends to sell within one year and are available for immediate sale in their present condition. (The company had $2.46 million in assets held for sale as of March 31, 2025, which were no longer present as of September 30, 2025, likely related to the store disposals.)

Operating Lease Right-of-Use Assets

An asset representing the lessee's right to use an underlying leased asset for the lease term. (These assets decreased significantly from $10.93 million to $6.89 million, reflecting the disposal of retail stores and associated leases.)

Reverse Stock Split

A corporate action to reduce the number of outstanding shares of a company's stock, increasing the share price. (The share count and per share data are presented retroactively to reflect a 1-for-5 reverse stock split on July 3, 2025, and a 1-for-20 split on November 4, 2025, impacting share count and EPS calculations.)

Year-Over-Year Comparison

For the six months ended September 30, 2025, Fly-E Group experienced a significant revenue decline of 37.15% compared to the prior year, falling to $9.24 million. This was accompanied by a substantial widening of the net loss to $3.78 million from $1.32 million. Gross profit saw a sharp decrease of 46.07%, indicating deteriorating profitability. While cash reserves increased to $2.54 million due to financing activities, this was offset by a significant increase in interest expenses (40.76%) and a high net cash burn from operations ($7.71 million).

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 par value per share FLYE The Nasdaq Sto

Filing Documents

• ea0266530-10q_flyegroup.htm (10-Q) — 1222KB
• ea026653001ex31-1_flyegroup.htm (EX-31.1) — 10KB
• ea026653001ex31-2_flyegroup.htm (EX-31.2) — 10KB
• ea026653001ex32-1_flyegroup.htm (EX-32.1) — 4KB
• ea026653001ex32-2_flyegroup.htm (EX-32.2) — 4KB
• 0001213900-25-123281.txt ( ) — 8527KB
• flye-20250930.xsd (EX-101.SCH) — 80KB
• flye-20250930_cal.xml (EX-101.CAL) — 70KB
• flye-20250930_def.xml (EX-101.DEF) — 406KB
• flye-20250930_lab.xml (EX-101.LAB) — 721KB
• flye-20250930_pre.xml (EX-101.PRE) — 422KB
• ea0266530-10q_flyegroup_htm.xml (XML) — 1103KB

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 37 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 54 Item 4.

Controls and Procedures

Controls and Procedures 54 PART II OTHER INFORMATION 55 Item 1.

Legal Proceedings

Legal Proceedings 55 Item 1A.

Risk Factors

Risk Factors 56 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 57 Item 3. Defaults Upon Senior Securities 57 Item 4. Mine Safety Disclosures 57 Item 5. Other Information 57 Item 6. Exhibits 57

Signatures

Signatures 58 i CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q (the "Report") contains "forward-looking statements" within the meaning of Section 27A of the Securities Act, as amended (the "Securities Act"), Section 21E of the Exchange Act, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be preceded by, or contain, words such as "may," "will," "expect," "anticipate," "intend," "plan," "believe," "estimate," "predict," "potential," "might," "could," "would," "should" or other words indicating future results, though not all forward-looking statements necessarily contain these identifying words. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, without limitation, statements about our future business operations and results, our strategy and competition. These statements represent our current expectations or beliefs concerning various future events and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations, including, but not limited to: our ability to obtain additional funding to market our vehicles and develop new products; our ability to produce our vehicles with sufficient volume and quality to satisfy customers; the inability of our principal vendors to deliver the necessary components for our vehicles at prices and volumes acceptable to us; our principal vendors failing to perform quality control on our products; the inability to obtain sufficient intellectual property protection for our brand and technologies; our vehicles failing to perform as expected; our facing product warranty claims or product recalls; our facing adverse determinations in significant product liability claims; customers not adopting electric vehicles; the development of alternative technology that adversely affects our

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements FLY-E GROUP, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Expressed in U.S. dollars, except for the number of shares) September 30, 2025 March 31, 2025 ASSETS Current Assets Cash $ 2,538,076 $ 840,102 Accounts receivable, net 1,474,637 466,187 Accounts receivable, net – a related party 32,030 37,465 Inventories, net 6,548,287 6,397,274 Prepayments and other receivables 5,923,496 3,676,986 Prepayments and other receivables – related parties 236,826 120,000 Assets held for sale — 2,462,502 Total Current Assets 16,753,352 14,000,516 Property and equipment, net 6,826,815 7,287,213 Security deposits 518,908 728,450 Deferred tax assets, net 152,212 94,983 Operating lease right-of-use assets 6,891,886 10,933,068 Intangible assets, net 486,581 525,865 Long-term prepayment for software development – a related party — 136,580 Total Assets $ 31,629,754 $ 33,706,675 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $ 550,249 $ 1,272,305 Short-term loan payables 5,532,230 5,191,058 Current portion of long-term loan payables 222,479 100,835 Accrued expenses and other payables 484,236 1,366,968 Accrued expenses and other payables – related parties 225 — Operating lease liabilities – current 1,819,911 2,617,762 Liabilities held for sale — 2,152,447 Total Current Liabilities 8,609,330 12,701,375 Long-term loan payables 2,004,123 2,065,040 Operating lease liabilities – non-current 5,718,256 9,106,928 Total Liabilities 16,331,709 23,873,343 Commitment and Contingencies Stockholders' Equity Preferred stock, $ 0.01 par value, 10,000,000 shares authorized and nil outstanding as of September 30, 2025 and March 31, 2025* — — Common stock, $ 0.01 par value, 300,000,000 shares authorized and 1,632,351 shares outstanding as of September 30, 2025 and 300,000,000 shares authorized and 245,875 shares outsta

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