Company: FLYE
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078571
Chunk: 59

Company: Fly-E Group, Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 59
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 August 2025, the Company sold 14 subsidiaries to third-party individuals in multiple transactions, for an aggregated
cash consideration of approximately $1.5 million, of which $112,000 has been collected as of August 19, 2025.  See “Note
14— Disposal of Subsidiaries” in the accompanying consolidated financial statements for details.

34

Key Factors that Affect Operating Results

Our results of operations and financial condition are affected by
the general factors driving the U.S.’s electric two-wheeled vehicles industry, including, among others, the U.S.’s overall
economic growth, the increase in per capita disposable income, the expansion of urbanization, the growth in consumer spending and consumption
upgrades, the competitive environment, governmental policies and initiatives towards electric two-wheeled vehicles, as well as the general
factors affecting the electric two-wheeled vehicles industry in overseas markets. Unfavorable changes in any of these general industry
conditions could negatively affect demand for our products and materially and adversely affect our results of operations.

While our business is influenced by these general factors, our results
of operations are more directly affected by company specific factors, including the following major factors:

New Customers

Our growth will
depend on our ability to achieve sales targets, including our ability to attract new customers, which in turn depends in part on our
ability to execute our retail strategy and produce effective marketing initiatives to expand our brand perception with prospective customers.
As of August 19, 2025, we have 16 stores, including 15 retail stores in the U.S. and one retail store in Canada. We offer rental
services from selected locations. We also operate one online store, focusing on selling E-motorcycles, E-bikes, and E-scooters and selling
our product in the United States. It is critical for us to successfully manage production ramp-up and quality control to deliver to customers
in adequate volume and quality.

With respect to branding and marketing, we plan to raise brand awareness
through both traditional and social media channels and connect with customers through physical touchpoints such as our retail stores
and distributors. We believe that effective marketing can boost our brand awareness and contribute to increased sales. In addition, we
intend to provide superior customer experience through our trained technicians who will provide after-sale maintenance and repair services
at our retail stores. An inability to attract new customers would substantially impact our ability to grow revenue or improve our financial
results.