Company: FLYE
Filing Date: 2025-12-18
Form Type: 10-Q
Source: 0001213900-25-123281
Chunk: 74

Company: Fly-E Group, Inc.
Filing Date: 2025-12-18
Form: 10-Q
Item: Item 1
Chunk 74
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driven by a decrease in total units sold and reductions in selling prices to reduce aged inventory for the six months ended
September 30, 2025.

We currently have a streamlined product portfolio
consisting of three categories, with multiple models and specifications for each category. Our ability to increase the sales price and
volume will depend on our ability to continually enhance our brand to attract customers, as well as our ability to successfully operate
our retail stores and expand our sales network globally. However, our product sales price is influenced by various factors such as market
demand and competitors’ pricing, and although we continue working on product improvements and retail expansion, there can be no
guarantee of sustained sales price increase or improved sales volume. If our prices remain stable, increasing sales volume would become
important for continued revenue growth, and failure to do so would significantly impact our ability to grow revenue or improve our financial
results.

41

Employees

Our payroll expenses were $0.6 million for the three months ended September
30, 2025, compared to $0.9 million for the three months ended September 30, 2024. Our payroll expenses were $1.2 million for the six months
ended September 30, 2025, compared to $1.5 million for the six months ended September 30, 2024. As 17 stores were sold and 1 store was
closed during the six months ended September 30, 2025, and the Company is planning to sell more stores in the subsequent quarter we expect
a decrease in payroll expenses in the next quarter due to reduced demand for store sales staff. Each of our retail stores has a minimum
of two employees, and additional office employees will be hired to support retail stores in customer service and marketing. In addition,
to maintain excellent customer service in our retail stores, each store will have at least one trained repair professional. Effective
management of payroll expenses remains crucial to our ability to grow revenue and enhance our financial results, especially as we navigate
a reduced workforce.

Vendor and Supply Management

During the three months ended September 30, 2025,
we worked with two principal vendors, Depcl Corp. and Xiamen Innolabs Technology Co., Ltd, each of which respectively supplied approximately
72.0% and 6.6% of the accessories and components used in all our products for the three months ended September 30, 2025. During the six
months ended September 30, 202