Company: FLYE
Filing Date: 2025-07-15
Form Type: 10-K
Source: 0001213900-25-064293
Chunk: 25

Company: Fly-E Group, Inc.
Filing Date: 2025-07-15
Form: 10-K
Item: Item 1
Chunk 25
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 retaliation. The adoption and expansion of trade restrictions, the
occurrence of a trade war, or other governmental action related to tariffs, trade agreements or related policies have the potential to
adversely impact our supply chain and access to equipment, our costs and our product margins. The additional tariffs imposed on components
or equipment that we source from China will increase our costs and could have an adverse impact on our operating results and financial
conditions in future periods.

We rely on third parties for quality control
on the parts sourced from China.

We rely on one of our principal
vendors in China to monitor the factories manufacturing the parts sourced from China for use in our vehicles. We have limited control
over the ability of third-party manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If our
principal vendor fails to perform its duties, including proper inspections on sample products before mass production, the third-party
manufacturers may fail to manufacture our product components according to our schedule and requirements or at all. The quality of our
products is crucial to our continued growth. If our principal vendor fails to perform its supervising and inspecting duties properly,
our final products could have quality issues, which could result in product recall, return of products and potential lawsuits against
us if our products cause any injuries or damages due to the quality issues. Any occurrence of the foregoing could hurt our relationship
with our customers and result in negative publicity, damage to our brand and a material and adverse effect on our business, prospects,
financial condition and operating results.

Our success will depend on our ability to
economically produce our vehicles at scale, and our ability to produce vehicles of sufficient quality and appeal to customers on schedule
and at scale is unproven.

Our 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.

We currently have one facility
in which we assemble all of our products in Maspeth, New York. We have no experience in large-scale production of our vehicles, and
we do not know whether we will be able to develop efficient, automated, low-cost production capabilities and processes, such that we will
be able to meet the quality, price and production standards, as well as the production volumes, required to successfully market our vehicles
and meet our business objectives and customer needs. Any failure to develop and scale our production capability and processes