Company: FLYE
Filing Date: 2025-02-19
Form Type: 10-Q
Source: 0001213900-25-015334
Chunk: 153

Company: Fly-E Group, Inc.
Filing Date: 2025-02-19
Form: 10-Q
Item: Part I, Item 8
Chunk 153
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7 million and $40,332 related to net operating loss carryforwards that can be used to offset taxable income in future periods,
$5.2 million and $5.8 million related to lease liability, and $0.3 million and $0.2 million related to inventory allowance.

As of December 31, 2024 and March 31, 2024,
the Company had approximately $5.4 million and $6.0 million, respectively, which included $0.5 million and $0.5 million, respectively,
in the DTLs that related to accumulated depreciation and $4.9 million and $5.5 million related to ROU assets.

Deferred
tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards.
As of December 31, 2024 and March 31, 2024, the Company recorded approximately $62,206 and $40,199, respectively, in the net DTAs.
The tax losses in Canada can be carried forward for twenty years to offset future taxable profit. The tax losses of entities in Canada
will begin to expire in 2044, if not utilized.   As of December
31, 2024, management considered it more likely than not that the Company will have sufficient taxable income in the future that will allow
the Company to realize these net DTAs.

As a result of the Tax Cuts and Jobs Act (TCJA),
US NOLs arising after December 31, 2017, may be carried forward indefinitely and can offset only up to 80% of taxable income in any future
year.

Uncertain Tax Positions

The Company evaluates each uncertain tax position
(including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits
associated with the tax positions. As of December 31, 2024 and March 31, 2024, the Company did not have any significant unrecognized
uncertain tax positions.

26

11 — LEASES

The Company adopted Topic 842 for all periods
presented. At the inception of a contract, the Company determines if the arrangement is, or contains, a lease. The leases of the Company
mainly consisted of offices, retail stores, and warehouses.

The Company’s operating right-of-use (“ROU”) assets
and