Company: FLYE
Filing Date: 2025-12-18
Form Type: 10-Q
Source: 0001213900-25-123281
Chunk: 221

Company: Fly-E Group, Inc.
Filing Date: 2025-12-18
Form: 10-Q
Item: Item 8
Chunk 221
---
 and review our unaudited condensed 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. 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 September 30, 2025. Accordingly, we continue to consider these material weaknesses to be
ongoing as of that date.

As of September 30, 2025, we believe that our
internal controls over financial reporting were not effective in providing reasonable assurance regarding the reliability of our financial
reporting due to the material weaknesses identified above.

We do not expect that our disclosure controls
and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.
Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits
must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation
of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances
of fraud, if any. The design of disclosure controls