Company: FLYE
Filing Date: 2025-12-18
Form Type: 10-Q
Source: 0001213900-25-123281
Chunk: 19

Company: Fly-E Group, Inc.
Filing Date: 2025-12-18
Form: 10-Q
Item: Item 1
Chunk 19
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 term with the customers. Accounts receivable which is deemed
to be uncollectible is charged off against the allowance after all means of collection have been exhausted and the potential for recovery
is considered remote.

The Company adopt the current expected credit
loss model (“CECL model”) to estimate the expected credit losses, which is determined by multiplying the probability of default.
In determining the probability of default, the Company mainly considers factors such as aging schedule of receivables, migration rate
of receivables, assessment of receivables due from specific identifiable counterparties that are considered at risk or uncollectible,
current market conditions, as well as reasonable and supportable forecasts of future economic conditions. As of September 30, 2025
and March 31, 2025, the Company provided allowance for credit losses of $116,746, consisting
of $41,100 related to accounts receivable from a related party customer and $75,646 related to accounts receivable from a third party
customer, respectively.

11

(h) Inventories, Net

Inventories, consisting of products available for sale, are stated
at the lower of cost or net realizable value using the first-in-first-out method. Adjustments to the carrying value are recorded for estimated
obsolescence or excess inventory equal to the difference between the cost of inventory and the estimated net realizable value based upon
assumptions about future demand and market conditions. Inventory cost consists of the direct cost of merchandise including freight. For
the three months ended September 30, 2025 and 2024, impairment loss was $339,978 and $154,751, respectively. For the six months ended
September 30, 2025 and 2024, impairment loss was $569,787 and $330,823, respectively.

(i) Prepayments and Other Receivables

Prepayments and other receivables are mainly
prepayments to vendors, prepaid expenses paid to service providers, prepaid taxes, advances to employees, and other deposits. Management
regularly reviews the aging of such balances and changes in payment and realization trends and records allowances when management believes
that the collection of amounts due is at risk. Accounts considered uncollectable are written off against allowances after exhaustive
efforts at collection are made. As of September 30, 2025 and March 31, 2025, no allowance for credit losses provided against
prepayments and other receivables was recorded.

(j