| LOAN PAYABLES |
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. | | (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 | |
|