Fly-E Group (FLYE) risk factors, FY2026 10-K

Risks Related to the Company’s Business, Operations, and Industry

1. 01An adverse determination in any significant product liability claim against us could materially adversely affect our business, results of operations or financial condition
2. 02We are subject to a pending securities class action lawsuit, and we may become subject to additional legal proceedings that could adversely affect our business, financial condition, and results of operationsNew
3. 03We may be unable to meet our growing production plans and delivery plans, any of which could harm our business and prospects
4. 04The current tensions in international trade policies and rising political tensions, particularly between the United States and China, may adversely impact our business and operating results
5. 05We rely on third parties for quality control on the parts sourced from China
6. 06Our business success will depend in large part on our ability to economically produce, market and sell our vehicles at sufficient capacity to meet the demands of our customers. We will need to scale our production capacity in order to successfully implement our growth strategy
7. 07Changes in our supply chain may result in increased cost. If we are unsuccessful in our efforts to control and reduce supplier costs and manage inventory at optimal levels, our operating results will suffer
8. 08This could potentially compel us to procure vehicle components at higher costs, leading to a backorder situation or unfulfilled customer orders, which could lead to potential cancellations or loss of customers to competitors and negatively impact our brand image and reputation
9. 09Increases in costs, disruption of supply, or shortage of materials used to manufacture the component parts used in our vehicles, including potential risks stemming from the conflict between Russia and Ukraine, could harm our business
10. 10Our vehicles may not perform in line with customer expectations
11. 11Demand for our products depends to a large extent on general, economic, political and social conditions in a given market and the introduction of new electric vehicles and technologies. As our business grows, economic conditions and trends will impact our business, prospects and operating results as well
12. 12The electric mobility industry is subject to rapidly changing and often complex regulatory environments
13. 13We may be unable to adequately control the costs associated with our operations
14. 14We may not succeed in establishing, maintaining and strengthening our brand, which could materially and adversely affect customer acceptance of our products, which could in turn materially affect our business, results of operations or financial condition
15. 15We have a relatively short operating history, which makes it difficult to evaluate our future prospects, forecast financial results, and assess the risks and challenges we may face
16. 16We believe there is substantial doubt about our ability to continue as a going concern as of the date of this annual report. The going concern may be included in our future reports and could materially limit our ability to raise additional funds through the issuance of new debt or equity securities or otherwise
17. 17The markets in which we operate are in their infancy and highly competitive, and we may not be successful in competing in this industry72% rewritten
18. 18We are dependent upon our executives for their services and any interruption in their ability to provide their services could cause us to cease operations
19. 19Our management team does not have any experience in operating a publicly traded company
20. 20We may need to defend ourselves against patent or trademark infringement claims, which may be time-consuming and would cause us to incur substantial costs
21. 21If we are unable to adequately establish, maintain, protect and enforce our intellectual property and proprietary rights, our reputation may be harmed, we may be subject to litigation, and our business may be adversely affected
22. 22Improper activities by third parties, exploitation of encryption technology, new data-hacking tools and discoveries and other events or developments may result in future intrusions into or compromise of our networks and technology systems
23. 23We may be unable to improve our existing products and develop and market new products that respond to customer needs and preferences and achieve market acceptance
24. 24We have limited experience servicing our vehicles, and if we are unable to address the service requirements of our customers, our business could be materially and adversely affected
25. 25Significant product repair and/or replacement due to product warranty claims or product recalls could have a material adverse impact on our business, results of operations or financial condition
26. 26If our vehicle owners customize our vehicles or change the charging infrastructure with aftermarket products, the vehicle may not operate properly, which may create negative publicity and could harm our business

Risks Related to Our Securities

1. 27An active, liquid and orderly trading market for our common stock may not develop or be maintained, and our stock price may be volatile
2. 28Our directors and executive officers will continue to exercise significant control over us, which will limit your ability to influence corporate matters and could delay or prevent a change in corporate control
3. 29The price of our common stock may be volatile and fluctuate substantially and rapidly, which could result in the loss of a significant part of your investment
4. 30We incur increased costs as a result of being a publicly traded company
5. 31If securities or industry analysts do not publish research or reports about us, or if they adversely change their recommendations regarding our common stock, then our stock price and trading volume could decline
6. 32We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our common stock less attractive to investors
7. 33We are a “smaller reporting company” and, even if we no longer qualify as an emerging growth company, we may still be subject to reduced reporting requirements
8. 34We may issue shares of preferred stock in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our common stock, which could depress the price of our common stock
9. 35We have never declared or paid any cash dividends or distributions on our capital stock. We currently intend to retain our future earnings, if any, to support operations and to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable future
10. 36Future sales of our common stock in the public market could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us30% rewritten
11. 37Delaware law and provisions in our amended and restated certificate of incorporation and bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of our common stock
12. 38Our management is required to devote a substantial amount of time to comply with public company regulations
13. 39We are subject to an SEC investigation, which could adversely affect our business, financial condition, results of operations and stock priceNew
14. 40We are subject to a securities class action lawsuit and may be subject to similar litigation in the future, which could adversely affect our business, financial condition, results of operations and stock priceNew
15. 41There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq97% rewritten
16. 42The Company filed the proxy for its 2026 annual general meeting (“2026 AGM”) on May 26, 2026 and the 2026 AGM was held on June 17, 2026. Accordingly, Staff has determined that the Company complies with the Listing Rule 5620(a) and this matter is now closedNew
17. 43FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our common stock
18. 44Holders of the Warrants will have no rights as a common stockholder until they acquire our common stock
19. 45If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our securities adversely, our stock price and trading volume could decline