Company: FLYE
Filing Date: 2025-07-15
Form Type: 10-K
Source: 0001213900-25-064293
Chunk: 503

Company: Fly-E Group, Inc.
Filing Date: 2025-07-15
Form: 10-K
Item: Item 1C
Chunk 503
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management, with the participation of our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our
disclosure controls and procedures as of March 31, 2025. Based on the evaluation of our disclosure controls and procedures, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31,
2025 due to the material weaknesses in financial reporting as described below.

Management’s
Annual Report on Internal Control over Financial Reporting

In
our 10-K for the year ended March 31, 2025, we identified material weaknesses in our internal control over financial reporting. The material
weaknesses that have been identified in internal control over financial reporting included our lack of (i) sufficient financial reporting
and accounting personnel with appropriate knowledge of generally accepted accounting principles in the United States of America (the
“U.S. GAAP”) and SEC reporting requirements to properly address complex U.S. GAAP accounting issues and to prepare and review
our consolidated financial statements and related disclosures to fulfill U.S. GAAP and SEC financial reporting requirements, (ii) formal
internal control policies and internal independent supervision functions to establish formal risk assessment process and internal control
framework, and (iii) sufficient controls designed and implemented in IT environment and IT general control activities, which are mainly
associated with areas of logical access management, change management, computer operation, service organization management as well as
cyber security management. To remediate the material weaknesses, we have engaged a third party consultant to perform internal review
and assist us to set up more reliable internal control processes. The consultant commenced work in February 2025. We have begun organizing
regular training programs for our accounting personnel, with a focus on U.S. GAAP and SEC reporting requirements, in order to improve
the competence and awareness of our finance team. In addition, we plan to enhance our IT infrastructure by outsourcing our IT department
to a provider to manage PC operations and system monitoring. Furthermore, we are developing and plan to implement an enterprise resource
planning system to streamline sales, inventory, financial reporting, and order management. We will devote resources to remediate these
material weaknesses as we grow and such resources required for implementing proper internal controls for financial reporting are available. 

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We
have performed testing to evaluate the operating effectiveness of these remediation measures. Based on the results of our testing, we
concluded that these material weaknesses had not been fully remediated as of March 31