Company: FLYE
Filing Date: 2025-12-18
Form Type: 10-Q
Source: 0001213900-25-123281
Chunk: 99

Company: Fly-E Group, Inc.
Filing Date: 2025-12-18
Form: 10-Q
Item: Item 1
Chunk 99
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 based partly on certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in Internal Control over Financial
Reporting

There was no change in our internal control over
financial reporting that occurred during the period covered by this Report that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.

54

PART II - Other Information

Item
1. Legal Proceedings.

From time to time, we may be subject to legal
proceedings arising in the ordinary course of business. Regardless of the outcome of any existing or future litigation, litigation can
have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

Federal securities class action instituted
on September 8, 2025

On September 8, 2025, a federal securities class
action was filed in the United States District Court, Eastern District of New York, by plaintiff Dino Kurt, individually and on behalf
of all others similarly situated, against defendants, the Company, chief executive officer (the "CEO") Zhou Ou, and former chief
financial officer (the "CFO") Shiwen Feng. The complaint alleges violations of Sections 10(b) and 20(a) of the Exchange Act
and Rule 10b-5 during the class period spanning from July 15, 2025, to August 14, 2025. The plaintiff claims that defendants provided
materially false and misleading positive statements about revenue growth, brand reputation, and business expansion, while concealing or
minimizing material adverse facts concerning the safety of the Company’s lithium battery and inadequate forecasting processes, which
were already taking a material toll on E-vehicle (the "EV") sales revenue. The plaintiff alleged when the Company filed a form
NT 10-Q on August 14, 2025, which disclosed a 32% decrease in net revenues primarily driven by a decline in total units sold, attributed
by the Company to "recent lithium-battery accidents involving E-Bikes and E-Scooters"; the price of Company’s common stock
declined dramatically by about 87% in a single day, resulting in economic loss for the plaintiff and the class.

The relief sought includes determining that the
action may be maintained as a class action, requiring defendants to pay damages sustained by the plaintiff and the class, and awarding
pre-judgment and