Company: FLYE
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078571
Chunk: 20

Company: Fly-E Group, Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 20
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 physical possession of, legal title to, and the risks and rewards of ownership of the
products have been transferred, and the customer has accepted the products. Revenue is recognized net of estimates of variable consideration,
including product returns, customer discounts and allowance. which occurs at the point of sale, or the services have been rendered. Historically,
the Company has not experienced any significant returns nor provided significant customer discounts.

The Company offers an assurance-type warranty to its customers. An assurance-type warranty
guarantees that the product will perform as promised and is not a performance obligation. This type of warranty promises to repair or
replace a delivered good or service if it does not perform as expected. Since an assurance-type warranty guarantees the functionality
of a product, the warranty is not accounted for as a separate performance obligation, and thus no transaction price is allocated to it.
Rather, to account for an assurance-type warranty the vendor should estimate and accrue a warranty liability when the promised good or
service is delivered to the customer (see ASC 460-10).

Since the contract price and term are fixed and enforceable, and an assurance-type warranty
guarantees the functionality of a product, and the warranty is not accounted for as a separate performance obligation, no transaction
price is allocated to it. The Company recognizes sales in full at the point in time when the products are delivered or accepted by the
customers, in accordance with the acceptance term specified in the contract. The Company records estimated future warranty costs under
ASC 460. Such estimated costs for warranties are estimated at the time of delivery and these warranties are not service warranties
separately sold by the Company. Generally, the estimated claim rates of warranty are based on actual warranty experience or the Company’s
best estimate. The Company accrued $8,158 and $20,131 of warranty reserves under accrued expenses and other payables as of June 30, 2025
and March 31, 2025, respectively. The Company has no contract assets and contract liabilities balances as of June 30, 2025 and March
31, 2025, 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