Company: FLYE
Filing Date: 2025-02-19
Form Type: 10-Q
Source: 0001213900-25-015334
Chunk: 167

Company: Fly-E Group, Inc.
Filing Date: 2025-02-19
Form: 10-Q
Item: Part I, Item 8
Chunk 167
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 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. The first batch of delivery workers is
expected to complete enrollment on February 17, 2025. The company has also been actively cooperating with the government to provide
information and promote the model. 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.

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 sales net of discounts
and return allowances. We do not record sales taxes as a component of retail revenues as we consider it a pass-through conduit for collecting
and remitting sales taxes. Return allowances, which reduce net revenues, are estimated based on historical experience.

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E-bikes, E-motorcycles and E-scooters sales.
We generate a substantial majority of our revenues from sales of E-bikes, E-motorcycles and E-scooters directly to customers through
our online store and retail stores, and to our distributors.

Accessories and spare parts sales. We
also sell accessories and spare parts for our EVs, such as rear storage boxes and front baskets. In addition, we offer Fly E-Bike branded
accessories and general merchandise, such as decorative car plates, key chains and apparel.

Service revenues. We also provide
repair services at our retail stores for a fee.

Cost of Sales

Cost of sales includes product costs, warehouse
rent expenses, payroll costs, depreciation costs, inventory reserves, warranty costs, and logistic costs. The logistic costs incurred
to receive products from our vendors are included in our inventory