Company: FLYE
Filing Date: 2025-07-15
Form Type: 10-K
Source: 0001213900-25-064293
Chunk: 121

Company: Fly-E Group, Inc.
Filing Date: 2025-07-15
Form: 10-K
Item: Item 1
Chunk 121
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 substantially all its revenues
from sales of products such as smart E-bikes, E-motorcycles, E-scooters and accessories to the retail and wholesale customers through
its wholly owned subsidiaries stores. In accordance with ASC 606, the Company’s performance obligations are satisfied upon
the control of products being passed to the customer, which is the point in time that the customers are able to direct the use of and
obtain substantially all of the economic benefit of the products or services. The transfer of control typically occurs at a point in time
based on consideration of when the customer has an obligation to pay for the products, and physical possession of, legal title to, and
the risks and rewards of ownership of the products have been transferred, and the customer has accepted the products. Revenue is recognized
net of estimates of variable consideration, including product returns, customer discounts and allowance. which occurs at the point of
sale, or the services have been rendered. Historically, the Company has not experienced any significant returns nor provided significant
customer discounts.

The Company offers an assurance-type warranty
to its customers. An assurance-type warranty guarantees that the product will perform as promised and is not a performance obligation.
This type of warranty promises to repair or replace a delivered good or service if it does not perform as expected. Since an assurance-type
warranty guarantees the functionality of a product, the warranty is not accounted for as a separate performance obligation, and thus no
transaction price is allocated to it. Rather, to account for an assurance-type warranty the vendor should estimate and accrue a warranty
liability when the promised good or service is delivered to the customer (see ASC 460-10).

Since the contract price and term are fixed and
enforceable, and an assurance-type warranty guarantees the functionality of a product, and the warranty is not accounted for as a separate
performance obligation, no transaction price is allocated to it. The Company recognizes sales in full at the point in time when the products
are delivered or accepted by the customers, in accordance with the acceptance term specified in the contract. The Company records estimated
future warranty costs under ASC 460. Such estimated costs for warranties are estimated at the time of delivery and these warranties
are not service warranties separately sold by the Company. Generally, the estimated claim rates of warranty are based on actual warranty
experience or the Company’s best estimate. The Company accrued $20,131 and $27,714 of warranty reserves under accrued expenses and
other payables as of