Fly-E Group, Inc. (Nasdaq: FLYE), an electric vehicle company focused on e-bikes and e-motorcycles, filed its annual report for the fiscal year ended March 31, 2026, providing updates on several material legal proceedings and a previously undisclosed settlement.
UL Trademark Litigation Settled
The company disclosed that it resolved a trademark infringement lawsuit brought by UL LLC. The complaint, filed in March 2025 in the Eastern District of New York, alleged that Fly-E improperly used UL’s certification marks by claiming certain products were certified when they were not. UL sought $2,000,000 for each instance of alleged counterfeiting, along with claims for federal trademark infringement, unfair competition, and unjust enrichment.
In May 2025, the parties entered into a settlement and release agreement. Fly-E and the other defendants agreed to pay UL an aggregate of $1,000,000 and consented to a permanent injunction barring the sale of products bearing UL marks that were not tested and certified by UL. The company paid the full settlement amount during the fiscal year, and the agreement resolves all pending litigation between the parties.
Securities Class Action Proceeds
The annual report also details a federal securities class action filed on September 8, 2025, in the Eastern District of New York. The suit, brought on behalf of purchasers of Fly-E securities between July 15, 2025, and August 14, 2025, names the company, CEO Zhou Ou, and former CFO Shiwen Feng as defendants.
The complaint alleges that the defendants made materially false and misleading statements about revenue growth and business expansion while concealing the negative impact of lithium-battery safety concerns on sales. When Fly-E filed a late notification for its quarterly report on August 14, 2025, disclosing a 32% decline in net revenues that it attributed to recent battery accidents, its stock price fell approximately 87% in a single day. The plaintiffs seek class certification, damages, and attorneys' fees.
An amended complaint was filed by the lead plaintiff on May 22, 2026, and the company's response is due by August 14, 2026. Fly-E stated that it cannot predict the outcome and has not accrued any material loss contingency for this matter as of March 31, 2026.
Shareholder Derivative Actions Consolidated
Two shareholder derivative lawsuits were filed in the Eastern District of New York in late 2025, purportedly on behalf of the company against certain current and former directors and officers. The complaints allege breach of fiduciary duty, gross mismanagement, waste of corporate assets, and related claims based on the same underlying facts as the securities class action. The court consolidated the two actions in December 2025 into a single proceeding captioned In re Fly-E Group, Inc. Stockholder Derivative Litigation. The company stated that the individual defendants intend to vigorously defend against the claims.
Nasdaq Notice
Separately, the company received a delinquency notification from Nasdaq on July 21, 2026, because the annual report itself was filed late. The notice has no immediate effect on the company's listing, and Fly-E can submit a plan to regain compliance by September 21, 2026.