Company: FLYE
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078571
Chunk: 171

Company: Fly-E Group, Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 8
Chunk 171
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 accounting policies require a higher degree of
judgment than others in their application and require us to make significant accounting estimates.

43

Estimated Allowance for Inventory Obsolescence Reserve

Our estimated allowance for the inventory obsolescence
reserves is based on our assessment of realization of inventory. Adjustments are recorded to write down the cost of inventories to the
estimated net realizable value due to slow-moving merchandise and obsolescence, which is dependent upon factors such as inventory aging,
historical and forecasted consumer demand, and market conditions that impact pricing. As of June 30, 2025 and March 31, 2025, we recorded
inventory allowance balance of $1,189,455 and $1,107,569, respectively.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable to smaller reporting companies.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures designed to ensure
that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under
the Exchange Act is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer (together, the “Certifying
Officers”), to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our Certifying
Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as
defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure
controls and procedures were not effective as of the end of the period covered by this Report due to the material weakness identified
below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control
over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial
statements will not be prevented or detected on a timely basis. The material weaknesses that have been identified in internal control
over financial reporting included our lack of (i) sufficient financial reporting and accounting personnel with appropriate knowledge
of generally accepted accounting principles in the United States of America (the “U.S. GAAP