Company: FLYE
Filing Date: 2025-12-18
Form Type: 10-Q
Source: 0001213900-25-123281
Chunk: 289

Company: Fly-E Group, Inc.
Filing Date: 2025-12-18
Form: 10-Q
Item: Item 2
Chunk 289
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, 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 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