Company: FLYE
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078571
Chunk: 116

Company: Fly-E Group, Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 8
Chunk 116
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ASC 842) 
     138,138  
     — 
  
    Net revenues 
    $5,328,198  
    $7,873,426 

(o) Selling Expenses

Selling expenses mainly consist of advertising costs, and payroll and related expenses
for personnel engaged in selling and marketing activities. Advertising expenses, which consist primarily of online and offline advertisements,
are expenses when the services are received. The advertising expenses were $17,413 and $68,519 for the three months ended June 30, 2025
and 2024, respectively.

13

(p) Research and Development Expenses

Research and development expenses include salaries for the Company’s research and
development personnel, as well as related development expenses paid to the third-party development team. The Company recognizes internal
use software acquired and internally developed in accordance with ASC 350-40 “Software—internal use software”. The
Company expenses all costs that are incurred in connection with the planning and implementation phases of development, and costs that
are associated with maintenance of the existing software for internal use. Certain costs associated with developing internal-use software
are capitalized when such costs are incurred within the application development stage of software development. As a result, the Company
expensed the development costs of the Fly E-Bike app as they incurred. For the three months ended June 30, 2025 and 2024, development
costs amounted to $169,299 and $145,582, respectively, which were recorded under general and administrative expenses.

(q) Income Taxes

Current income taxes are provided based on net income/(loss) for financial reporting purposes
and adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations
of the relevant tax jurisdictions.

Deferred taxes are accounted for using the asset and liability method in respect of temporary
differences arising from differences between the carrying amount of assets and liabilities in the unaudited condensed consolidated financial
statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are
recognized for all taxable temporary differences. Deferred tax assets (the “DTAs”) are recognized to the extent that it is
probable that taxable profit will be available against which deductible temporary differences can be utilized.

Deferred tax is calculated using tax rates that are expected to apply to the period when
the asset is realized, or the liability is settled. Deferred tax is charged or credited in the income statement