Company: FLYE
Filing Date: 2025-07-15
Form Type: 10-K
Source: 0001213900-25-064293
Chunk: 1918

Company: Fly-E Group, Inc.
Filing Date: 2025-07-15
Form: 10-K
Item: Item 9B
Chunk 1918
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, 2025 and 2024, the Company accrued
$30,301 and $60,487 income tax related penalty included in current income taxes expenses, respectively.

(s) Leases

The Company accounts for leases in accordance
with ASC 842. The Company leases premises for offices, warehouses, and retail stores under non-cancellable operating leases, and
the Company leases its products to customers under non-cancellable operating leases.

Lessor

The Company’s lease arrangements include
products rentals to customers. The lease term is from one hour to one month. Due to the short-term   nature of these arrangements,
the Company classifies these leases as operating leases. The Company does not separate lease and non-lease components, such as insurance
or roadside assistance provided to the lessee, in its lessor lease arrangements. Lease payments are primarily fixed and are recognized
as revenue in the period over which the lease arrangement occurs. Taxes or other fees assessed by governmental authorities that are both
imposed on and concurrent with each lease revenue-producing transaction and collected by the Company from the lessee are excluded from
the consideration in its lease arrangements. The Company mitigates residual value risk of its leased assets by performing regular maintenance
and repairs, as necessary, and through periodic reviews of asset depreciation rates based on the Company’s ongoing assessment of
present and estimated future market conditions.

F-16

Lessee

The Company recognizes right-of-use assets and
lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted
for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms. Leases
with an initial term of 12 months or less are short-term leases and not recognized as operating lease right-of-use assets and operating
lease liabilities on the consolidated balance sheets. The Company recognizes lease expense for short-term leases on a straight-line basis
over the lease term.

Right-of-use assets are initially measured at
cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date,
plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives
received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any
remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

Right-of-use assets are depreciated using the
straight