A securities‑fraud class action was filed in the U.S. District Court for the Eastern District of New York on 2025‑11‑03 against Fly‑E Group, Inc. The lawsuit, brought by investors who purchased shares between 2025‑07‑15 and 2025‑08‑14, accuses the company of making false and misleading statements about the safety of its lithium‑ion batteries, its revenue projections, and its ability to secure favorable supplier pricing.
Fly‑E’s financial performance has deteriorated in recent periods. Fiscal year 2025, ending March 31, 2025, reported net revenues of $25.4 million, down 21.0% from $32.2 million in fiscal year 2024, and a net loss of $5.3 million. The first quarter of fiscal year 2026, ending June 30, 2025, generated net revenues of $5.3 million, a 32.3% decline from $7.9 million in the same quarter last year. Segment‑level data show retail sales revenue of $21.7 million (a 17.7% drop from FY2024), wholesale revenue of $3.5 million (a 39.3% decline), and rental services revenue of $0.2 million.
The company has faced a series of battery‑safety incidents, including fatal fires in New York City in January 2021, March 2023, and a charger‑related blaze in 2022. In March 2025, Fly‑E was sued by UL Solutions for marketing products as “UL Certified” without authorization, resulting in a $1 million settlement. New York City agencies have issued summonses and violations related to Fly‑E’s products and sales, adding regulatory pressure.
Liquidity concerns have intensified. As of September 30, 2024, cash reserves stood at $1.3 million, while net cash used in operations reached $9.4 million for the first half of fiscal year 2025. The company has relied on equity financing, including a $6.1 million public offering and a $6.94 million offering in June 2025, both dilutive. A 1‑for‑20 reverse stock split became effective on 2025‑11‑04.
CEO Andy Ou stated in July 2025 that fiscal year 2025 was a “pivotal year” and that the company achieved gross‑margin improvement through cost reductions and favorable supplier pricing, particularly in battery sourcing. He also highlighted positive growth prospects despite revenue dips caused by short‑term external factors and investments in marketing and product diversification. The class action alleges that these statements were misleading and that investors were induced to purchase shares at inflated valuations.
Investors who purchased shares during the class period may consider joining the class action before the November 7 deadline.
Investors who purchased shares during the class period may consider joining the class action before the November 7 deadline.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.