Company: FLYE
Filing Date: 2025-02-19
Form Type: 10-Q
Source: 0001213900-25-015334
Chunk: 24

Company: Fly-E Group, Inc.
Filing Date: 2025-02-19
Form: 10-Q
Item: Part I, Item 1
Chunk 24
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 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 $37,363 and $27,714 of warranty reserves under accrued expenses and
other payables as of December 31, 2024 and March 31, 2024, respectively. The Company has no contract assets and contract liabilities
balances as of December 31, 2024 and March 31, 2024, respectively.

Rental Revenue

The Company operates rental business primarily from the Go Fly rental
mobile app and selected Fly E-Bike stores that provide users with a flexible and affordable e-bike rental option.

The
Company offers rental services through its subsidiaries,
GOBIKE INC and FLYLA INC. All the products available for rent are owned by the Company. The Company leases products to customers, and
as a result, the Company considers itself to be the accounting lessor, as applicable, in these arrangements in accordance with ASC 842.
Rental business operating costs include refunded products repair fee and other operating costs, as applicable. 

Due to the short-term nature of the rental business,
the Company classifies these rentals operating leases. Revenue generated from the rental services is recognized over the rental period,
which is typically one day, one week or more.

Disaggregated information of revenues by business lines are as follows:

    For the Three Months Ended  December 31,  
    For the Nine Months Ended  December 31, 

    2024  
    2023  
    2024