Company: FLYE
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078571
Chunk: 23

Company: Fly-E Group, Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 23
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 to customers under
non-cancellable operating leases.

Lessor

The Company’s lease arrangements include products rentals to customers. The lease
term is from one hour to one month. Due to the short-term   nature of these arrangements, the Company classifies these leases
as operating leases. The Company does not separate lease and non-lease components, such as insurance or roadside assistance provided
to the lessee, in its lessor lease arrangements. Lease payments are primarily fixed and are recognized as revenue in the period over
which the lease arrangement occurs. Taxes or other fees assessed by governmental authorities that are both imposed on and concurrent
with each lease revenue-producing transaction and collected by the Company from the lessee are excluded from the consideration in its
lease arrangements. The Company mitigates residual value risk of its leased assets by performing regular maintenance and repairs, as
necessary, and through periodic reviews of asset depreciation rates based on the Company’s ongoing assessment of present and estimated
future market conditions.

14

Lessee

The Company recognizes right-of-use assets and lease liabilities for all leases at the
commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption
where lease payments are recognized as expenses on a straight-line basis over the lease terms. Leases with an initial term of 12 months
or less are short-term leases and not recognized as operating lease right-of-use assets and operating lease liabilities on the consolidated
balance sheets. The Company recognizes lease expense for short-term leases on a straight-line basis over the lease term.

Right-of-use assets are initially measured at cost, which comprises the initial measurement
of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and
an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently
measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use
assets are presented on a separate line in the consolidated balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement
dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which
comprise fixed payments, in-substance fixed payments, variable lease payments which depend on an index or a rate. The lease payments
are discounted using