Fly-E Group, Inc.

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Significant changes or developments with respect to domestic and international customs, tariffs, and trade policies, corresponding or retaliatory actions by other countries and related uncertainties could adversely affect our financial results and profitability.

Previous report

On February 1, 2025, President Trump issued an executive order imposing a 10% ad valorem tariff on all imports from China, effective February 4, 2025. This tariff applies in addition to any existing duties, fees, or charges and is expected to remain in effect indefinitely, with the potential for further increases if China retaliates. As a company that imports raw materials and parts from China, we are subject to these increased costs, which could have a material adverse impact on our financial condition, results of operations, and profitability. The additional tariffs may increase our cost of goods sold, reduce our gross margins, and require us to pass higher costs on to customers, potentially affecting demand for our products. Additionally, supply chain disruptions and delays resulting from the new tariff policies could impact our ability to procure necessary materials in a timely manner. We will seek to mitigate these risks through alternative sourcing strategies, price adjustments, or operational efficiencies; however, there is no guarantee that such measures will fully offset the financial impact of the tariffs. Furthermore, given the evolving nature of U.S. trade policy, there is uncertainty regarding the duration and scope of these tariffs, as well as the potential for retaliatory measures by China that could further impact our supply chain and market conditions.