Company: FLYE
Filing Date: 2025-07-15
Form Type: 10-K
Source: 0001213900-25-064293
Chunk: 487

Company: Fly-E Group, Inc.
Filing Date: 2025-07-15
Form: 10-K
Item: Item 1C
Chunk 487
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-scooter manufacturing. While some agreements have temporarily delayed their
implementation, ongoing trade tensions could lead to supply chain disruptions, increased costs, and pricing pressures within the industry.
Tariffs on e-bikes and e-scooters or their components would likely increase prices for consumers, and create challenges for U.S. manufacturers
and retailers. While there could be long-term opportunities for domestic production, the immediate impact would likely be negative for
the growing e-bike and e-scooter market.

Regulatory Landscape

We operate in an
industry that is subject to extensive environmental, safety and other laws and regulations, which include products safety and
testing, as well as battery safety and disposal. These requirements create additional costs and possible production delay in
connection with the testing and manufacturing of our products. We also benefit from environmental regulations in our target markets
which include economic incentives to purchasers of EVs and tax credits for EV manufacturers. The Governor of New York State signed a
legislative package in July 2024 aimed at raising awareness about the safe use of e-bikes and lithium-ion battery products,
prohibiting the sale of non-compliant batteries, requiring safety protocols and training for first responders, mandating operating
manuals for e-bike retailers, and improving accident reporting and registration processes for e-bikes and mopeds. Additionally, in
January 2025, the New York City Department of Transportation launched a $2 million trade-in program, allowing eligible food delivery
workers to replace their unsafe e-bikes, e-mobility devices, and batteries with certified, high-quality versions. Our Fly-11 PRO was
chosen for the official model of DOT and participates in this program. From January 2025 to June 2025, we participated in this
program and completed the delivery of Fly-11 Pro models to our retail partner participating in the program. While we expect relevant
regulations to provide a tailwind to our growth, it is possible for other regulations to result in margin pressures.

How to Assess Our Performance

In assessing performance, management considers
a variety of performance and financial measures, including principal growth in net sales, gross profit, gross margin, selling, general
and administrative expenses and EBITDA. The key measures that we use to evaluate the performance of our business are set forth below.

35

Net Sales

We generate revenue from sales of our EVs, their
accessories and spare parts, and provision of repair services at our retail stores. Our net sales comprise gross