Company: FLYE
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078571
Chunk: 114

Company: Fly-E Group, Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 8
Chunk 114
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 be entitled in such exchange. This will require the Company to identify contractual
performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of
products and services transfers to a customer.

To achieve that core principle, the Company applies a five-step model to recognize revenue
from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify
the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent
that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance
obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.

12

The Company generates substantially all its revenues from sales of products such as smart
E-bikes, E-motorcycles, E-scooters and accessories to the retail and wholesale customers through its wholly owned subsidiaries stores.
In accordance with ASC 606, the Company’s performance obligations are satisfied upon the control of products being passed
to the customer, which is the point in time that the customers are able to direct the use of and obtain substantially all of the economic
benefit of the products or services. The transfer of control typically occurs at a point in time based on consideration of when the customer
has an obligation to pay for the products, and physical possession of, legal title to, and the risks and rewards of ownership of the
products have been transferred, and the customer has accepted the products. Revenue is recognized net of estimates of variable consideration,
including product returns, customer discounts and allowance. which occurs at the point of sale, or the services have been rendered. Historically,
the Company has not experienced any significant returns nor provided significant customer discounts.

The Company offers an assurance-type warranty to its customers. An assurance-type warranty
guarantees that the product will perform as promised and is not a performance obligation. This type of warranty promises to repair or
replace a delivered good or service if it does not perform as expected. Since an assurance-type warranty guarantees the functionality
of a product, the warranty 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