Company: FLYE
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078571
Chunk: 48

Company: Fly-E Group, Inc.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 48
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 asset seizures, as well
as potential criminal sanctions, any of which could have a material adverse effect on its business, financial condition, results of operations
and prospects. As of the date hereof, the Company believes it is in compliance with the relevant regulations in the U.S.

UL Litigation

On or about March 12, 2025, UL LLC (“UL”)
filed a complaint against the Company, along with the Company’s certain subsidiaries and certain individuals, in the Eastern District
of New York (the “Complaint”). The Complaint alleges that the Company improperly used UL’s trademark by claiming certain
products were certified by UL. On May 21, 2025, the Company and UL entered into a settlement and release agreement (the “Settlement
Agreement”) on mutually acceptable settlement terms. Pursuant to the Settlement Agreement, the Company agreed to pay UL an aggregate
amount of $1,000,000 before November 30, 2025 (Refer to Note 7 — Accrued Expenses and other payables). From July 1 to August
19, 2025, the Company paid $350,000 to UL.

Inflation

Inflationary factors, such as increases in personnel and overhead costs, could impair the
Company’s operating results. Although the Company does not believe that inflation has had a material impact on the Company’s
financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on the Company’s
ability to maintain current levels of gross margin and operating expenses as a percentage of sales revenue if the revenues do not increase
with such increased costs.

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13 — RELATED PARTY TRANSACTIONS

(A) Related party balances

Accounts
receivable, net — a related party

  Name of Related Party  Relationship  Nature  June 30,  2025   March 31,  2025   Fly E Bike SRL  Zhou Ou (CEO), owns over 50% equity interest of this entity  Accounts receivable  $78,565   $78,565   Accounts receivable – a related party         78,565    78,565   Less: Allowance for credit losses         41,100    41,100   Accounts receivable, net - a related party        $37,465   $37,465  

During