Company: FLYE
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078571
Chunk: 158

Company: Fly-E Group, Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 8
Chunk 158
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, and logistic costs. The logistic costs incurred to receive products
from our vendors are included in our inventory 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