Company: FLYE
Filing Date: 2025-07-15
Form Type: 10-K
Source: 0001213900-25-064293
Chunk: 2523

Company: Fly-E Group, Inc.
Filing Date: 2025-07-15
Form: 10-K
Item: Item 14
Chunk 2523
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714 of warranty reserves under accrued expenses and
other payables as of March 31, 2025 and 2024, respectively. The Company has no contract assets and contract liabilities balances as of
March 31, 2025 and 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, FLYLA INC, and FLYTORONTO CORP. 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 years Ended  March 31, 

    2025  
    2024 
  
    Product revenues - retail (ASC 606) 
    $21,725,817  
    $26,389,720 
  
    Product revenues - wholesale (ASC 606) 
     3,529,479  
     5,815,946 
  
    Revenues - rental services (ASC 842) 
     171,867  
     — 
  
    Net revenues 
    $25,427,163  
    $32,205,666 

(p) Selling Expenses

Selling expenses mainly consist of advertising
costs, and payroll and related expenses for personnel engaged in selling and marketing activities. Advertising expenses, which consist
primarily of online and offline advertisements, are expenses when the services are received. The advertising expenses were $273,816 and
$64,423 for the years ended March 31, 2025 and 2024, respectively.

F-15

(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