Company: FLYE
Filing Date: 2025-02-19
Form Type: 10-Q
Source: 0001213900-25-015334
Chunk: 226

Company: Fly-E Group, Inc.
Filing Date: 2025-02-19
Form: 10-Q
Item: Part I, Item 2
Chunk 226
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 battery safety and disposal. These requirements create additional costs and possible production delay
in connection with the testing and manufacturing of our products. We also benefit from environmental regulations in our target
markets which include economic incentives to purchasers of EVs and tax credits for EV manufacturers. The Governor of New York State
signed a legislative package in July 2024 aimed at raising awareness about the safe use of e-bikes and lithium-ion battery products,
prohibiting the sale of non-compliant batteries, requiring safety protocols and training for first responders, mandating operating
manuals for e-bike retailers, and improving accident reporting and registration processes for e-bikes and mopeds. Additionally, in
January 2025, the New York City Department of Transportation launched a $2 million trade-in program, allowing eligible food delivery
workers to replace their unsafe e-bikes, e-mobility devices, and batteries with certified, high-quality versions.   Our
Fly-11 PRO was chosen for the official model of DOT and participates in this program. The first batch of delivery workers is
expected to complete enrollment on February 17, 2025. The company has also been actively cooperating with the government to provide
information and promote the model. While we expect relevant regulations to
provide a tailwind to our growth, it is possible for other regulations to result in margin pressures.

How to Assess Our Performance

In assessing performance, management considers
a variety of performance and financial measures, including principal growth in net sales, gross profit, gross margin, selling, general
and administrative expenses and EBITDA. The key measures that we use to evaluate the performance of our business are set forth below.

Net Sales

We generate revenue from sales of our EVs, their
accessories and spare parts, and provision of repair services at our retail stores. Our net sales comprise gross sales net of discounts
and return allowances. We do not record sales taxes as a component of retail revenues as we consider it a pass-through conduit for collecting
and remitting sales taxes. Return allowances, which reduce net revenues, are estimated based on historical experience.

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E-bikes, E-motorcycles and E-scooters sales.
We generate a substantial majority of our revenues from sales of E-bikes, E-motorcycles and E-scooters directly to customers through
our online store and retail stores, and to our distributors.

Accessories and spare parts sales. We
also sell accessories and spare parts for our EVs, such as rear