Company: FLYE
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078571
Chunk: 24

Company: Fly-E Group, Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 24
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 the interest rate implicit in a lease if that rate can be readily determined. If that rate cannot be readily determined,
the Company uses the lessee’s incremental borrowing rate. Subsequently, lease liabilities are measured at amortized cost using
the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term or a change
in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease
liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is
reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate
line in the consolidated balance sheets.

Variable lease payments that do not depend on an index or a rate are recognized as expenses
in the periods in which they are incurred.

(s) Concentration Risk

Concentration of customers and suppliers

No customers individually represented greater than 10% of total net revenues of the Company
for the three months ended June 30, 2025 and 2024.

For
the three months ended June 30, 2025, the Company’s top two suppliers represented approximately 65% and 12% of total purchases of
the Company, respectively. For the three months ended June 30, 2024, the Company’s top two suppliers represented approximately 41%
and 38% of total purchases of the Company, respectively. As of June 30, 2025, three suppliers accounted for approximately 56%, 23%, and
16% of accounts payable balance, respectively.   As
of March 31, 2025, two suppliers accounted for approximately 63% and 25% of accounts payable balance, respectively.

Concentration of credit risk

Financial instruments that are potentially subject to credit risk consist principally of
accounts receivable. The Company believes the concentration of credit risk in its account receivable is substantially mitigated by its
ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers.
The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers,
historical trends, and other information. Historically, the Company did not have any bad debt on its account receivable.

Financial instruments that potentially expose the Company to concentrations of credit risk
consist principally of cash and cash equivalents, term