Company: FLYE
Filing Date: 2025-07-15
Form Type: 10-K
Source: 0001213900-25-064293
Chunk: 635

Company: Fly-E Group, Inc.
Filing Date: 2025-07-15
Form: 10-K
Item: Item 2
Chunk 635
---

     2,858,681 

Off-Balance Sheet Arrangements

We have not entered into
any transactions, agreements or other contractual arrangements that would result in off-balance sheet liabilities.

Quantitative and Qualitative Disclosures about
Market Risk

Foreign Exchange Risk

A substantial majority of
all of our revenues and expenses are denominated in U.S. dollars. We do not believe that we currently have any significant direct
foreign exchange risk and have not used any derivative financial instruments to hedge exposure to such risk. In addition, as our business
and operation expand in European and other overseas markets in the future, we may be exposed to increased foreign exchange risks for
other currencies.

Interest Rate Risk

Our exposure to interest
rate risk primarily relates to the interest expenses on our short-term and long-term bank borrowings. Our short-term and long-term bank
borrowings bear interests at fixed rates. We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes
in market interest rates. However, our future interest expenses may exceed expectations due to changes in market interest rates. If we
were to renew these short-term and long-term bank borrowings, we might be subject to interest rate risk.

Critical Accounting Estimates

An accounting estimate is
considered critical if it requires to be made based on assumptions about matters that are highly uncertain at the time such estimate
is made, and if different accounting estimates that reasonably could have been used, or changes in the accounting estimate that are reasonably
likely to occur periodically, could materially impact the consolidated financial statements.

42

We prepare our consolidated
financial statements in conformity with U.S. GAAP, which requires us to make estimates and assumptions. We continually evaluate these
estimates and assumptions based on the most recently available information, our own historical experiences and various other assumptions
that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting
process, actual results could differ from our expectations as a result of changes in our estimates. Some of our accounting policies require
a higher degree of judgment than others in their application and require us to make significant accounting estimates.

Estimated Allowance for Inventories

Our estimated allowance for
the inventory obsolescence reserves is based on our assessment of realization of inventory. Adjustments are recorded to write down the
cost of inventories to the estimated net realizable value due to slow-moving merchandise and obsolescence, which is dependent upon factors