Company: FLYE
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078571
Chunk: 172

Company: Fly-E Group, Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 8
Chunk 172
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”) and SEC reporting requirements
to properly address complex U.S. GAAP accounting issues and to prepare and review our unaudited condensed 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 June 30, 2025. Accordingly, we continue to consider these material weaknesses to be ongoing as of that date.

As of June 30, 2025, 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.

We do not expect that our disclosure controls and procedures will prevent all errors and
all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls
and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs.
Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can
provide absolute assurance that we have detected all our