Company: FLYE
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078571
Chunk: 117

Company: Fly-E Group, Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 8
Chunk 117
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, except when it is related
to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. DTAs are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that some portion or all the DTAs will not be realized. Current
income taxes are provided for in accordance with the laws of the relevant taxing authorities.

An uncertain tax position is recognized as a benefit only if it is “more likely than
not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount
recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not
meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment
of income tax are classified as income tax expense in the period incurred. The tax returns filed in 2018 to 2024 are subject to examination
by any appropriate tax authorities. For the three months ended June 30, 2025 and 2024, the Company accrued nil and $60,076 income tax
related penalty included in current income taxes expenses, respectively.

(r) 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.

14

Lessee

The Company recognizes right-of