Company: FLYE
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078571
Chunk: 219

Company: Fly-E Group, Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 2
Chunk 219
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 our Certifying
Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as
defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure
controls and procedures were not effective as of the end of the period covered by this Report due to the material weakness identified
below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control
over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial
statements will not be prevented or detected on a timely basis. 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 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