Company: FLYE
Filing Date: 2025-05-05
Form Type: S-1/A
Source: 0001213900-25-039419
Chunk: 143

Company: Fly-E Group, Inc.
Filing Date: 2025-05-05
Form: S-1/A
Chunk 143
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3. (o) Revenue Recognition The Company follows the revenue accounting requirements of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. The core principle underlying the revenue recognition of this ASC allows the Company to recognize revenue that represents the transfer of products and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of products and services transfers to a customer. To achieve that core principle, the Company applies a five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. F-15

Product revenue - Performance obligation satisfied at point in time

The Company generates 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