Company: FLYE
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078571
Chunk: 218

Company: Fly-E Group, Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 2
Chunk 218
---
-term and
long-term bank borrowings, we might be subject to interest rate risk.

Critical Accounting Estimates

An accounting estimate is considered critical if it requires to be
made based on assumptions about matters that are highly uncertain at the time such estimate is made, and if different accounting estimates
that reasonably could have been used, or changes in the accounting estimate that are reasonably likely to occur periodically, could materially
impact the unaudited condensed consolidated financial statements.

We prepare our unaudited condensed consolidated financial statements
in conformity with U.S. GAAP, which requires us to make estimates and assumptions. We continually evaluate these estimates and assumptions
based on the most recently available information, our own historical experiences and various other assumptions that we believe to be
reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results
could differ from our expectations as a result of changes in our estimates. Some of our 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