Company: FLYE
Filing Date: 2025-02-19
Form Type: 10-Q
Source: 0001213900-25-015334
Chunk: 50

Company: Fly-E Group, Inc.
Filing Date: 2025-02-19
Form: 10-Q
Item: Part I, Item 1
Chunk 50
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,813 
  
    Total lease payments 
     17,975,557 
  
    Less: interest 
     (2,671,190)
  
    Present value of lease liabilities 
    $15,304,367 

12 — COMMITMENTS AND CONTINGENCIES

Commitments

The Company has not entered any off-balance sheet
financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. The Company has
not entered any derivative contracts that are indexed to its shares and classified as shareholder’s equity or that are not reflected
in its unaudited condensed consolidated financial statements. Furthermore, the Company does not have any retained or contingent interest
in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. The Company
does not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to
itself or engages in leasing, hedging or product development services with itself.

Contingencies

Legal

From time to time, the Company is a party to certain
legal proceedings, as well as certain asserted and unasserted claims. Amounts accrued, as well as the total amount of reasonably possible
losses with respect to such matters, individually and in the aggregate, are not deemed to be material to the unaudited condensed consolidated
financial statements.

The Company’s products and other production
facilities as well as the packaging, storage, distribution, advertising and labeling of its products, are subject to extensive legal and
regulatory requirements. For example, pursuant to the DMV registration requirement, the Company must satisfy the DMV Registration requirements
and conduct required testing for all of its products sold in U.S. Loss of or failure to renew or obtain necessary permits, licenses,
registrations, or certificates could prevent the Company from legally selling its products in the U.S. If the Company were found
to be in violation of applicable laws and regulations, it could be subject to administrative punishment, including fines, injunctions,
recalls or asset seizures, as well as potential criminal sanctions, any of which could have a material adverse effect on its business,
financial condition, results of operations and prospects. As of the date hereof, the Company believes it is in compliance with the relevant
regulations in the U.S.

Inflation

Inflationary factors, such as increases in personnel
and overhead costs, could impair the Company’s operating results