Company: FLYE
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078571
Chunk: 26

Company: Fly-E Group, Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 26
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 common stock would have reduced the net loss per share. Therefore, these potential shares were excluded from the calculation
of diluted net loss per share.  

(v) Foreign Currencies Translation

Transactions denominated in currencies other than the functional currency are translated
into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated
in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the
balance sheet dates. The resulting exchange differences are recorded in the statement of operations. The reporting currency of the Company
is United States Dollar ($). The Company’s subsidiary in Canada maintains its books and records in its local currency, Canadian
dollar (CAD), which is the functional currency for this subsidiary as it is the primary currency of the economic environment in which
this entity operates.

In general, for consolidation purposes, assets and liabilities of subsidiaries whose functional
currency is not United States Dollar are translated into United States Dollar in accordance with ASC Topic 830-30, “Translation
of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates
prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded
as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

(w) Representative’s Warrants

Upon the closing of the IPO in June 2024, the
Company issued to Benchmark underwriters warrants (the “Representative’s Warrants”) to purchase 25,875 shares
of common stock which warrants are also exercisable on a cashless basis. The Company accounts for these warrants as either equity-classified
or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance
in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification ASC 480, Distinguishing Liabilities from
Equity and ASC 815, Derivatives and Hedging. The Company accounts for its warrants as equity that meet all of the criteria (i) require
physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical
settlement or net-share settlement), the warrants are required to be recorded as a component of additional paid-in capital at the time
of issuance and subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity.  

(x