Company: FLYE
Filing Date: 2025-02-19
Form Type: 10-Q
Source: 0001213900-25-015334
Chunk: 168

Company: Fly-E Group, Inc.
Filing Date: 2025-02-19
Form: 10-Q
Item: Part I, Item 8
Chunk 168
---
 and recognized as cost of sales upon sale of products to our customers.

Gross Profit and Gross Margin

We calculate gross profit as net sales less cost
of revenue. Gross margin represents gross profit as a percentage of net sales.

Selling, General and Administrative Expenses

Selling, general and administrative expenses primarily
consist of retail operational expenses, salaries and benefits costs, marketing, advertising, and corporate overhead.

Marketing costs primarily consist of advertising
and payroll and related expenses for personnel engaged in marketing and selling activities.

We expect that our selling and marketing expenses
will continue to increase in the foreseeable future, as we plan to further expand our sales network and retail channels, and engage in
more selling and marketing activities to enhance our brand and attract more purchases from new and existing customers.

General and administrative expenses primarily
consist of costs for corporate functions, including payroll and related expenses, facilities and equipment expenses, such as depreciation
and amortization expense and rent, and professional fees. We expect that our general and administrative will increase in the foreseeable
future, as we hire additional personnel and incur additional expenses related to the anticipated growth of our business and our operation
as a public company after the completion of our initial public offering.

Non-GAAP Financial Measures

To supplement our financial information presented
in accordance with the generally accepted accounting principles in the United States (the “U.S. GAAP”), management
periodically uses certain “non-GAAP financial measures,” as such term is defined under the rules of the SEC, to clarify and
enhance understanding of past performance and prospects for the future. Generally, a non-GAAP financial measure is a numerical measure
of a company’s operating performance, financial position or cash flows that excludes or includes amounts that are included in or
excluded from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. For example, non-GAAP
measures may exclude the impact of certain items such as acquisitions, divestitures, gains, losses and impairments, or items outside of
management’s control. Management believes that the following non-GAAP financial measure provides investors and analysts useful insight
into our financial position and operating performance. Any non-GAAP measure provided should be viewed in addition to, and not as an alternative
to, the most directly comparable measure determined in accordance with U.S. GAAP. Further, the calculation of these non-GAAP
financial measures may differ from the calculation of similarly titled financial measures presented by other companies