Company: FLYE
Filing Date: 2025-02-19
Form Type: 10-Q
Source: 0001213900-25-015334
Chunk: 131

Company: Fly-E Group, Inc.
Filing Date: 2025-02-19
Form: 10-Q
Item: Part I, Item 8
Chunk 131
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 services are received. The advertising expenses were $32,681 and
$6,629 for the three months ended December 31, 2024 and 2023, respectively. The advertising expenses were $230,742 and $32,695 for the
nine months ended December 31, 2024 and 2023, respectively.

14

(q) 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 December 31, 2024 and 2023,
development costs amounted to $125,312 and $89,420, respectively, which were recorded under general and administrative expenses. For the
nine months ended December 31, 2024 and 2023, development costs amounted to $434,760 and $96,880, respectively, which were recorded under
general and administrative expenses.

(r) 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, except when it is related to items credited or charged directly