Fly-E Group Announces Second Quarter and First Half of Fiscal Year 2025 Financial Results

NEW YORK,Nov. 21,2024 -- Fly-E Group,Inc. (Nasdaq: FLYE) ("Fly-E" or the "Company"),an electric vehicle company engaged in designing,installing and selling smart electric motorcycles,electric bikes,electric scooters,and related accessories,today announced its unaudited financial results for the second quarter and first half of fiscal year 2025 ended September 30,2024.

Selected Second Quarter Financial Results

Revenue: $6.8 million,compared with $8.8 million in Q2 2023.

Gross profit: $2.9 million,compared with $3.8 million in Q2 2023.

Total operating expense: $4.1 million,compared with $2.7 million in Q2 2023.

Net loss: $1.1 million,or $0.05 per share,compared with net income of $0.7 million,or $0.03 per share,in Q2 2023.

Mr. Zhou (Andy) Ou,Chairman and Chief Executive Officer of Fly-E,remarked,"Despite recent market challenges,we remain committed to driving growth and expanding our market presence. In the second quarter of fiscal year 2025,we held a stable gross margin above 40%,even as operating expenses increased with our efforts to add e-bike rental business. For the first half of fiscal 2025,our gross margin improved to 40.9%,up from 39.0% last year,reflecting disciplined cost management and a commitment to profitability. While we saw a dip in revenue due to external factors,these stable margins underscore the effectiveness of our approach.

On the product and market side,we're energized by the success of our recent initiatives. At October's Electrify Expo in New York,our product lineup— featuring 11 models spanning e-bikes,e-motorcycles,and e-scooters,with three newly launched models in the e-motorcycles—drew strong interest and received highly positive feedback. Additionally,the launch of our e-bike Rental Service offers customers a flexible,affordable way to experience our products and positions us well to meet shifting consumer needs. As part of our growth strategy,we're expanding into key markets like Miami,Los Angeles and Toronto and broaden our presence . On the technological front,we are leveraging innovation to enhance customer convenience,including ongoing development of our mobile apps designed to streamline user experiences and provide more features for our customers. Our involvement in New York City's Trade-in Program for e-bikes and batteries is aligned with our commitment to setting high safety standards in the electric vehicle industry,helping provide UL-certified e-bikes for delivery workers. Moving forward,our dedication to innovation,safety,and superior customer experience is expected to continue to drive growth and enhance value for our shareholders."

Second Quarter of Fiscal Year 2025 Financial Results

Net revenues were $6.8million for the second quarter of fiscal year 2025,a decrease of 22.1%,from $8.8million for the same period last year. The decrease in net revenues was primarily due to the decrease in sales volume by 5,850 units,from 20,906 units for the same period last year to 15,056 units for the second quarter of fiscal year 2025.

Retail sales revenue was $5.9 million for the second quarter of fiscal year 2025,adecrease of12.5%,from $6.8millionfor the same period last year. Wholesale revenue was $0.9millionfor the second quarter of fiscal year 2025,a decrease of 54.8% from$2.0million for the same period last year. The decrease in retail sales revenue is mainly due to recent lithiumbatteryaccidents involving E-Bikes and E-Scooters. With an increasing number of lithium-battery explosion incidents in New York,customers are less inclined to purchase E-Bikes. Consequently,the management believes that sales have declined as customers opt for oil-powered vehicles over electric vehicles. The decrease in wholesales revenue was driven primarily by the decrease in orders from the top two customers who closed their stores.

Cost of Revenues

Cost of revenues was $3.9million for the second quarter of fiscal year 2025,a decrease of21.6%,from $5.0million for the same period last year. The decrease in cost of revenues was primarily attributable to a reduction in units sold,which declined by 5,to 15,056 units for the second quarter of fiscal year 2025 from 20,906 units for the same period last year.

Gross Profit

Gross profit was $2.9 million for the second quarter of fiscal year 2025,a decrease of 22.8%,from $3.8 million for the same period last year. Gross margin was 42.6% for the second quarter of fiscal year 2025,compared to 42.9% for the same period last year.

Total Operating Expenses

Total operating expenses were $4.1 million for the second quarter of fiscal year 2025,an increase of 54.5%,from $2.7 million for the same period last year. The increase in operating expenses was attributable to the increase in payroll expenses,rent expenses,advertising expenses,professional fees,and insurance expenses as the Company expanded its business.

Selling expenses were $2.0 million for the second quarter of fiscal year 2025,compared to $1.6 million for the same period last year. Selling expenses primarily consist of payroll expenses,rent,utilities expenses,and advertising expenses of retail stores. Total payroll expenses were $0.9 million for the second quarter of fiscal year 2025,compared to $0.4 million for the same period last year. Rent expenses were $0.8 million for the second quarter of fiscal year 2025,compared to $0.6 million for the same period last year. Advertising expenses were $0.1 million for the second quarter of fiscal year 2025,compared to $14,339 for the same period last year. The increase in these expenses was primarily due to the increased number of new employees hired for repair and maintenance business operation in the second quarter of fiscal year 2025.


General and administrative expenses were $2.1 million for the second quarter of fiscal year 2025,compared to $1.1 million for the same period last year. Professional fees increased to $0.9 million for the second quarter of fiscal year 2025,compared to $0.3 million for the same period last year,primarily attributable to the increase in audit fee,consulting fee,legal fee and IR expenses associated with ongoing reporting obligations. Payroll expenses increased to $0.4 million for the second quarter of fiscal year 2025 from $0.2 million for the same period last year primarily due to additional employees hired in operation departments. Insurance expenses increased to $0.3 million for the second quarter of fiscal year 2025,compared to $24,570 for the same quarter of prior year as a result of purchase of the directors and officers liability insurance after initial public offering in the second quarter of fiscal year 2025.

Net Income (Loss)

Net loss was $1.1 million for the second quarter of fiscal year 2025,compared to net income of $0.7 million for the same period last year.

Basic and Diluted Earnings (Losses) per Share

Basic and diluted losses per share were $0.05 for the second quarter of fiscal year 2025,compared to basic and diluted earnings per share of $0.03 forthe same period last year.

EBITDA

EBITDA was negative$1.2 million for the second quarter of fiscal year 2025,compared to positive EBITDA of$1.3 million forthe same period last year.

First Half of Fiscal Year 2025 Financial Results

Net Revenues

Net revenues were $14.7million for the first half of fiscal year 2025,a decrease of 11.5%,from $16.6million for the same period last year. The decrease in net revenues was driven primarily by a decrease in total units sold,which decreased by 4,067 units,to 31,936unitsfor the first half of fiscal year 2025 from 36,003unitsfor the same period last year. For the six months ended September 30,2023 and for the six months ended September 30,2024,the quantity of E-bikes and batteries sold decreased by 2,963 and 2,624,respectively.

Retail sales revenue was $12.8 million for the first half of fiscal year 2025,adecrease of1.1%,from $12.9millionfor the same period last year. Wholesale revenue was $1.9millionfor the first half of fiscal year 2025,a decrease of 48.1% to$3.7million for the same period last year. The decrease in retail sales revenue is mainly due to recent lithium-battery accidents involving E-Bikes and E-Scooters. With an increasing number of lithium-battery explosion incidents in New York,sales have declined as customers opt for oil-powered vehicles over electric vehicles. The decrease in wholesales revenue was driven primarily by the closure of stores by the top two customers who closed their stores in December 2023 due to lack of profitability.

Cost of Revenues

Cost of revenues was $8.7million for the for the first half of fiscal year 2025,a decrease of14.1%,from $10.1million for the same period last year. The decrease in cost of revenues was primarily attributable to more favorable pricing the Company obtained from its suppliers,particularly for batteries,as well as a reduction in battery sales volume. These factors collectively contributed to the overall decrease in cost of revenues. The unit cost for battery decreased 36%,to $75 in the first half of fiscal year 2025 from $117 in the same period last year.

Gross Profit

Gross profit was $6.0 million for the first half of fiscal year 2025,a decrease of 7.4%,from $6.5 million for the same period last year. Gross margin was 40.9% for the first half of fiscal year 2025,increased from 39.0% for the same period last year.

Total Operating Expenses

Total operating expenses were $7.3 million for the first half of fiscal year 2025,an increase of 57.2%,from $4.6 million for the same period last year. The increase in operating expenses was attributable to the increase in payroll expenses,meals and entertainment expenses,and development expenses as the Company expanded business.

Selling expenses were $3.7 million for the first half of fiscal year 2025,compared to $2.7 million for the same period last year. Selling expenses primarily consist of payroll expenses,and advertising expenses of retail stores. Total payroll expenses were $1.5 million for the first half of fiscal year 2025,compared to $0.8 million for the same period last year. Rent expenses were $1.5million for the first half of fiscal year 2025,compared to $1.1million for the same period last year. Utilities expenses were $119,252 for the first half of fiscal year 2025,compared to $68,863 for the same period last year. Advertising expenses were $0.2 million for the first half of fiscal year 2025,compared to $26,066 for the same period last year. The increase in these expenses was primarily due to the increase number of new employees hired for business operating in the first half of fiscal year 2025.


General and administrative expenses were $3.6 million for the first half of fiscal year 2025,compared to $1.9 million for the same period last year. Professional fees increased to $1.3million for the first half of fiscal year 2025,compared to $0.5million for the same period last year,legal fee and IR expenses associated with the Company's initial public offering and ongoing reporting obligations.Payroll expenses increased to $0.8million for the first half of fiscal year 2025,from $0.4 million for the same period las year primarily due to additional employees hired in operation and accounting departments. Insurance expenses increased to $0.5million for the first half of fiscal year 2025,compared to $0.1 million for the same period of prior year as a result of purchase of directors and officers liability insurance after initial public offering in the first half of fiscal year 2025. Software development fee increase to $0.3 million for the first half of fiscal year 2025,compared to $0.1 million for the same period last year as a result of maintenance for Fly E-Bike app during the first half of fiscal year 2025.

Net Income (Loss)

Net loss was $1.3 million for the first half of fiscal year 2025,compared to net income of $1.2 million for the same period last year.

Basic and Diluted Earnings (Losses) per Share

Basic and diluted losses per share were $0.06 for the first half of fiscal year 2025,compared to basic and diluted earnings per share of $0.05 forthe same period last year.

EBITDA

EBITDA was negative$1.1 million for the first half of fiscal year 2025,compared to positive EBITDA of$2.1 million forthe same period last year.

Financial Condition

As ofSeptember30,the Company had cash of $1.3 million.

Net cash used in operating activities was $9.4 million for the first half of fiscal year 2025,compared to net cash provided by operating activities of $1.6 million for the same period last year.

Net cash used in investing activities was $2.8 million for the first half of fiscal year 2025,compared to $0.5 million for the same period last year.

Net cash provided by financing activities was $12.1 million for the first half of fiscal year 2025,compared to net cash used in financing activities of $0.3 million for the same period last year.

Business Update

At the Electrify Expo in New York,a leading event in the micromobility industry held from October 12 to 13,the Company showcased its full product lineup,featuring 11 models,including e-bikes,and e-scooters. Among the highlights were three newly launched e-motorcycle models: the DT,designed for off-road adventures; the EK,offering a balanced mix of stability and efficiency; and the DP,delivering a powerful and exhilarating riding experience.

Over the two-day event,Fly-E captivated more than 10,000 attendees,facilitating over 1,500 successful test rides and receiving overwhelmingly positive feedback. With four dedicated booths and meticulous preparation,the Company's offerings attracted a diverse audience,ranging from couples and families to young professionals. Many attendees expressed interest in visiting the Company's New York stores in Queens,Manhattan,Bronx,and Brooklyn for further exploration and in-store shopping.

As part of its growth strategy,Fly-E is committed to prioritizing eco-friendly innovation and enhancing user experience in its product development. Leveraging insights gained from the event,the Company plans to refine its offerings and expand its market presence.

About Fly-E Group,Inc.

Fly-E Group,Inc. is an electric vehicle company that is principally engaged in designing,electric scooters and related accessories under the brand "Fly E-Bike." The Company's commitment is to encourage people to incorporate eco-friendly transportation into their active lifestyles,ultimately contributing towards building a more environmentally friendly future. For more information,please visit the Company's website: https://investors.flyebike.com.

Non-GAAP Financial Measures

To supplement the Company's financial information presented in accordance with the generally accepted accounting principles in the United States (the "U.S. GAAP"),management periodically uses certain "non-GAAP financial measures," as such term is defined under the rules of the SEC,to clarify and enhance understanding of past performance and prospects for the future. Generally,a non-GAAP financial measure is a numerical measure of a company's operating performance,financial position or cash flows that excludes or includes amounts that are included in or excluded from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. For example,non-GAAP measures may exclude the impact of certain items such as acquisitions,divestitures,gains,losses and impairments,or items outside of management's control. Management believes that the following non-GAAP financial measure provides investors and analysts useful insight into its financial position and operating performance. Any non-GAAP measure provided should be viewed in addition to,and not as an alternative to,the most directly comparable measure determined in accordance with U.S. GAAP. Further,the calculation of these non-GAAP financial measures may differ from the calculation of similarly titled financial measures presented by other companies and therefore may not be comparable among companies.

The Company uses EBITDA (earnings before interest,taxes,depreciation,and amortization) to evaluate its operating performance. The Company believes EBITDA provides additional insight into its underlying,ongoing operating performance and facilitates year-to-year comparisons by excluding the earnings impact of interest,tax,depreciation and amortization and that presenting EBITDA is more representative of its operational performance and may be more useful for investors.

The Company reconciles its non-GAAP financial measure to its net income,which is its most directly comparable financial measure calculated and presented in accordance with U.S. GAAP. EBITDA includes adjustments for provision for income taxes,as applicable,interest income and expense,and amortization. EBITDA does not represent and should not be considered an alternative to net income as determined by U.S. GAAP,and its calculations thereof may not be comparable to those reported by other companies. The Company believes EBITDA is an important measure of operating performance and provides useful information to investors because it highlights trends in its business that may not otherwise be apparent when relying solely on U.S. GAAP measures and because it eliminates items that have less bearing on its operating performance. EBITDA,as presented herein,is a supplemental measure of its performance that is not required by,or presented in accordance with,U.S. GAAP. The Company uses non-GAAP financial measures as supplements to its U.S. GAAP results in order to provide a more complete understanding of the factors and trends affecting its business. EBITDA is a measure of operating performance that is not defined by U.S. GAAP and should not be considered a substitute for net (loss) income as determined in accordance with U.S. GAAP.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company'scurrent expectations and projections about future events that the Company believes may affect its financial condition,results of operations,business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as "approximates," "believes," "hopes," "expects," "anticipates," "estimates," "projects," "intends," "plans," "will," "would," "should," "could," "may" or other similar expressions. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable,it cannot assure you that such expectations will turn out to be correct. The Company cautions investors that actual results may differ materially from the anticipated results,and that the forward-looking statements contained in this press release are subject to the risks set forth in the Company's filings with the Securities and Exchange Commission (the "SEC"),including the section under "Risk Factors"of its most recent Annual Report on Form 10-K for the fiscal year ended March 21,filed with the SEC on June 28,2024. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances,or changes in its expectations,except as may be required by law.

For investor and media inquiries,please contact:

Fly-E Group,Inc.


Investor Relations Department


Email: ir@flyebike.com

Ascent Investor Relations LLC


Tina Xiao


Phone: +1-646-932-7242


Email: investors@ascent-ir.com

FLY-E GROUP,INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Expressed in U.S.dollars,except for the number of shares)


September30,


2024


March31,


2024


ASSETS


Current Assets


Cash


$

1,274,935


$

1,403,514


Accounts receivable


366,838


212,804


Accounts receivable–related parties


91,885


326,914


Inventories,net


8,596,108


5,364,060


Prepayments and other receivables


2,453,340


588,660


Prepayments and other receivables–related parties


387,808


240,256


Total Current Assets


13,170,914


8,136,208


Property and equipment,net


6,644,717


1,755,022


Security deposits


837,179


781,581


Deferred IPO costs


-


502,198


Deferred tax assets,net


497,939


35,199


Operating lease right-of-use assets


15,438,347


16,000,742


Intangible assets,net


527,538


36,384


Long-term prepayment for property


-


450,000


Long-term prepayment for software development– related parties


1,055,980


1,279,000


Total Assets


$

38,172,614


$

28,976,334


LIABILITIES AND STOCKHOLDERS' EQUITY


Current Liabilities


Accounts payable


$

365,129


$

1,180,796


Short-term loan payables


4,909,982


-


Current portion of long-term loan payables


90,809


1,213,242


Short term mortgage loan payables


1,800,000


-


Accrued expenses and other payables


545,206


925,389


Other payables–related parties


-


92,229


Operating lease liabilities–current


3,149,827


2,852,744


Taxes payable


-


1,530,416


Total Current Liabilities


10,860,953


7,794,816


Long-term loan payables


191,128


412,817


Operating lease liabilities–non-current


13,288,194


13,986,879


Total Liabilities


24,340,275


22,194,512


Commitment and Contingencies


Stockholders' Equity


Preferred stock,$0.01 par value,4,400,000 shares authorized and nil


outstanding as of September 30,2024 and March31,2024*




Common stock,44,000 shares authorized and 24,587,500


shares outstandingas of September 30,2024 and 22,000 shares


outstanding as of March 31,2024*


245,875


220,000


Additional Paid-in Capital


10,744,024


2,000


Shares Subscription Receivable


(219,998)


(219,998)


Retained Earnings


3,073,293


4,395,649


Accumulated other comprehensive loss


(10,855)


(13,829)


Total FLY-E Group,Inc. Stockholders' Equity


13,832,339


6,781,822


Total Liabilities and Stockholders' Equity


$

38,334


*

Shares and per share data are presented on a retroactive basis to reflect the nominal share issuance on


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

FLY-E GROUP,INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE (LOSS) INCOME

(Expressed in U.S.dollars,except for the number of shares)


Forthe Three Months Ended


September 30,


Forthe Six Months Ended


September 30,


2024


2023


2024


2023


Revenues


$

6,824,406


$

8,763,839


$

14,697,832


$

16,606,185


Cost of Revenues


3,919,952


5,002,540


8,693,744


10,122,171


Gross Profit


2,904,454


3,761,299


6,004,088


6,484,014


Operating Expenses


Selling Expenses


2,041,435


1,618,439


3,653,930


2,701,545


General and Administrative Expenses


2,094,078


1,058,235


3,626,716


1,930,300


Total Operating Expenses


4,135,513


2,676,674


7,280,646


4,631,845


(Loss) Income from Operations


(1,231,059)


1,084,625


(1,276,558)


1,169


Other Income (Expenses),net


(53,929)


40,779


(47,411)


29,701


Interest Expenses,net


(23,795)


(17,969)


(91,877)


(50,592)


(Loss) Income Before Income Taxes


(1,308,783)


1,107,435


(1,415,846)


1,831,278


Income Tax Benefit (Expense)


165,935


(360,879)


93,490


(644,279)


Net (Loss) Income


$

(1,142,848)


$

746,556


$

(1,322,356)


$

1,186,999


Other Comprehensive Income (Loss)


Foreign currency translation adjustment


4,298



2,974



Total Comprehensive (Loss) Income


$

(1,138,550)


$

746,319,382)


$

1,999


(Losses) Earnings per Share*


$

(0.05)


$

0.03


$

(0.06)


$

0.05


Weighted Average Number of Common Stock


–Basic and Diluted*


24,500


22,000


23,622,596


22,000


*

Shares and per share data are presented on a retroactive basis to reflect the nominal share issuance on


December 21,INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S.dollars,except for the number of shares)


Forthe Six Months Ended


September 30,


2024


2023


Cash flows from operating activities


Net (loss) income


$

(1,999


Adjustments to reconcile net (loss) income to net cash (used in) provided


by operating activities:


Depreciation expense


180,910


190,559


Amortization expense


8,846



Deferred income taxes (benefits) expenses


(462,740)


189,600


Amortization of operating lease right-of-use assets


1,991


1,221,280


Inventories reserve


330,823


159,851


Changes in operating assets and liabilities:


Accounts receivable


(154,034)


(463,949)


Accounts receivable–related parties


235,029


(203,069)


Inventories


(3,562,871)


(1,672,986)


Prepayments and other receivables


(1,864,681)


5,223


Prepayments for operation services to related parties


(180,000)



Security deposits


(55,598)


(78,191)


Accounts payable


(815,667)


1,813,644


Accrued expenses and other payables


(380,183)


33,873


Operating lease liabilities


(1,516,198)


(1,132,114)


Taxes payable


(1,416)


343,148


Net cash (used in) provided by operating activities


(9,412,145)


1,593,868


Cash flows from investing activities


Purchases of equipment


(1,575,936)


(526,214)


Purchase of Software from a related party


(500,000)



Prepayment for purchasing software from a related party


(801,980)



Repayment from a related party


510,381



Advance to a related party


(477,933)



Net cash used in investing activities


(2,845,468)


(526,214)


Cash flows from financing activities


Advance to a related party



(99,500)


Borrowing from loan payables


3,737,500


400,000


Repayments of loan payables


(391,308)


(335,374)


Repayments on other payables - related parties


(92,229)


(198,615)


Payments of related party loan



(120,000)


Capital Contributions from Stockholders



136,370


Payments of IPO cost


(282,403)


(100,000)


Net proceeds from issuance of common stock - IPO


9,154,500



Net cash provided by (used in) financing activities


12,126,060


(317,119)


Net changes in cash


(131,553)


750,535


Effect of exchange rate changes on cash


2,974



Cash at beginning of the period


1,514


358,894


Cash at the end of the period


$

1,109,429


Supplemental disclosure of cash flow information


Cash paid for interest expense


$

91,877


$

50,592


Cash paid for income taxes


$

1,940,595


$

185,347


Supplemental disclosure of non-cash investing and financing activities


Settlement of accounts payable by related parties


$


$

50,000


Settlement of accounts payable by capital contribution


$


$

2,263,630


Purchase of vehicle funded by loan


$

219,668


$

34,974


Purchase of office funded by loan


$

1,000


$


Purchase software and office by using previous prepayments


$

1,975,000


$


Deferred IPO cost recognized as additional paid-in capital


$

502,198


$


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


$

(280,087)


$


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


$

1,394,682


$

2,523,012


The following table sets forth the components of our EBITDA for the three months ended September 30,2024 and 2023,with reconciliations to the nearest GAAP financial measures provided below:


For theThree Months Ended September 30,


2024


2023


Change


Percentage


Change


(Loss) Income from Operations


$

(1,889,404)


(253.1)

%

Income Tax (Benefit) Expense


(165,935)


360,879


(526,814)


(146.0)

%

Depreciation


85,859


126,891


(41,032)


(32.3)

%

Interest Expenses


23,795


17,969


5,826


32.4

%

Amortization


7,895



7,895


100.0

%

EBITDA


$

(1,191,234)


$

1,252,295


$

(2,443,529)


(195.1)

%

Percentage of Revenue


(17.5)

%


14.3

%


(31.7)

%

The following table sets forth the components of our EBITDA for the six months ended September 30,with reconciliations to the nearest GAAP financial measures provided below:


For theSix Months Ended September 30,999


$

(2,509,355)


(211.4)

%

Income Tax provision


(93,490)


644,279


(737,769)


(114.5)

%

Depreciation


180,559


(9,649)


(5.1)

%

Interest Expenses


91,877


50,592


41,285


81.6

%

Amortization


8,846



8,846


100.0

%

EBITDA


$

(1,134,213)


$

2,072,429


$

(3,206,642)


(154.7)

%

Percentage of Revenue


(7.7)

%


12.5

%


(20.2)

%

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