Company: FLYE
Filing Date: 2025-12-18
Form Type: 10-Q
Source: 0001213900-25-123281
Chunk: 73

Company: Fly-E Group, Inc.
Filing Date: 2025-12-18
Form: 10-Q
Item: Item 1
Chunk 73
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 Unfavorable changes in any of these
general industry conditions could negatively affect demand for our products and materially and adversely affect our results of operations.

While our business is influenced by these general
factors, our results of operations are more directly affected by company specific factors, including the following major factors:

New Customers

Our growth will depend on our ability to achieve sales targets, including
our ability to attract new customers, which in turn depends in part on our ability to execute our retail strategy and produce effective
marketing initiatives to expand our brand perception with prospective customers. As of December 16, 2025, we currently operate 13 stores,
including 12 retail stores in the U.S. and one retail store in Canada. During the three months ended September 30, 2025, 9 retail
stores in the U.S were sold for streamlining the Company’s corporate structure and reducing complexity in financial reporting and
operating costs. We offer rental services from selected locations. We also operate one online store, focusing on selling E-motorcycles,
E-bikes, and E-scooters and selling our product in the United States. It is critical for us to successfully manage production ramp-up
and quality control to deliver to customers in adequate volume and quality.

With respect to branding and marketing, we plan
to raise brand awareness through both traditional and social media channels and connect with customers through physical touchpoints such
as our retail stores and distributors. We believe that effective marketing can boost our brand awareness and contribute to increased
sales. In addition, we intend to provide superior customer experience through our trained technicians who will provide after-sale maintenance
and repair services at our retail stores. An inability to attract new customers would substantially impact our ability to grow revenue
or improve our financial results.

Product Sales Price and Volume

For the three months ended September 30, 2025,
our net revenues decreased by 42.7% to $3.9 million, compared to $6.8 million for the same period in 2024, which was primarily driven
by a decrease in average unit price of EVs which dropped by 61% as a result of lowering the selling prices to reduce aged inventory for
the three months ended September 30, 2025.

For the six months ended September 30, 2025,
our net revenues decreased by 37.2% to $9.2 million, compared to $14.7 million for the same period in 2024, which was primarily