| PROPERTY AND EQUIPMENT, NET |
6
— PROPERTY AND EQUIPMENT, NET
Property
and equipment as of March 31, 2026 and 2025 consisted of the following:
| | |
As of
March 31, | | |
As of
March 31, | |
| | |
2026 | | |
2025 | |
| Furniture and Fixtures | |
$ | 294,510 | | |
$ | 400,080 | |
| Machinery and Equipment | |
| 145,820 | | |
| 230,015 | |
| Automobile | |
| 468,238 | | |
| 669,902 | |
| Leasehold improvements | |
| 254,065 | | |
| 683,595 | |
| Building | |
| 3,663,215 | | |
| 3,663,215 | |
| Computer hardware and software (i) | |
| 2,500,000 | | |
| 2,310,000 | |
| Properties for rental business (ii) | |
| 188,182 | | |
| 193,963 | |
| Property and Equipment | |
| 7,514,030 | | |
| 8,150,770 | |
| Less: Accumulated depreciation | |
| (1,163,052 | ) | |
| (863,557 | ) |
| Less: Accumulated impairment loss (iii) | |
| (558,063 | ) | |
| — | |
| Property and Equipment, net | |
$ | 5,792,915 | | |
$ | 7,287,213 | |
For the years ended March 31, 2026 and 2025, the
depreciation expenses were $719,383 and $631,280 and the impairment loss were $558,063 and nil, respectively.
| (i) | In
December 2023, the Company engaged DFT, a former related party, for certain technology services, such as ERP system. The total contract
price for the ERP system is $2,500,000. The ERP system is fully completed and delivered on May 20, 2025. During the fiscal year of 2025,
the Company started to use part of the ERP system which was valued at $2,310,000 and treated that part as computer hardware and software
and started for depreciation. The remaining balance of $190,000 was capitalized upon full completion in May 2025, bringing the total
capitalized cost to $2,500,000 as of March 31, 2026. As of March 31, 2026 and 2025, the Company had a prepayment of nil and $136,580,
respectively, to DFT (see Note 14– Long-term prepayment for software development – a related party). |
| (ii) | In October 2024, the Company started to offer rental services through its subsidiaries, GOBIKE INC, in New York, FLYLA INC, in Log Angeles, and FLYTORONTO CORP., in Toronto. The rental term is from one hour to one month. In New York, the Company offers a single model of E-Bike for rent, FLY 11 PRO GOFLY as of the date of this report. In Log Angeles, the Company offers 31 types of E-Bikes and E-scooters for rent, including FLY AIR2, FLY TANK, and FLY 11 PRO. |
| (iii) | During the year ended March 31, 2026, the Company identified impairment indicators related to its certain technology services ERP system, due to technological obsolescence of the existing system. The Company performed an impairment assessment of the ERP system asset group in accordance with ASC 360. The asset group tested comprised the capitalized costs of the ERP system, including software licenses, implementation and customization costs, and related hardware, with a carrying amount of $2,232,250 prior to impairment. The Company determined the fair value of the asset group using the income approach, based on the present value of expected future cash flows, which represents a Level 3 fair value measurement. The impairment loss of $558,063 represents the excess of the carrying amount of the asset group over its estimated fair value. The loss is presented within general and administrative expenses in the accompanying statement of operations. |
|