Company: UP
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001819516-25-000028
Chunk: 139

Company: Wheels Up Experience Inc.
Filing Date: 2025-05-05
Form: 10-Q
Item: Item 8
Chunk 139
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 as well as attorneys’ fees and costs. On September 19, 2023, FE removed the NY State Court lawsuit to the NY Federal Court. On September 19, 2023, FE filed a motion to dismiss for lack of personal jurisdiction or, in the alternative, motion to transfer the lawsuit to the United States District Court for the Eastern District of North Carolina. On October 9, 2023, the Company filed a motion to remand the lawsuit back to the NY State Court due to the NY Federal Court’s lack of subject matter jurisdiction. On March 28, 2025, the Company prevailed on the jurisdictional motion and the NY Federal Court remanded the lawsuit back to the NY State Court. On April 9, 2025, FE filed in the NY State Court an answer and its defenses to the Company’s claims, as well as counterclaims for unpaid amounts it claims it is owed under the GRP Agreement. On April 22, 2025, the Company answered FE’s counterclaims and also filed a motion to amend and proposed amended complaint against FE in NY State Court, 

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which included, among other things, additional breach of contract claims and added Thomas James Segrave Jr., FE’s founder and Chief Executive Officer, as a defendant with respect to a claim based on piercing the corporate veil.We intend to vigorously pursue the action to recover the outstanding deposits and other damages from FE and defend against any related counterclaims, but there can be no assurance as to the outcome of the dispute with FE. Our success in recovering the amounts from FE will depend on several factors, including the availability of funds by FE for the recoverable amounts. We are in the process of evaluating the effects of the foregoing events and we cannot make a reasonable estimate of any outcome, recovery or loss at this time.Sales and Use Tax LiabilityWe regularly provide services to members in various states within the continental U.S., which may create sales and use tax nexus via temporary presence, potentially requiring the payment of these taxes. We determined that there is uncertainty as to what constitutes nexus in respective states for a state to levy taxes, fees and surcharges relating to our activity. As of March 31, 2025 and December 31, 2024, we estimated the potential exposure to such tax liability was $5.5 million, respectively, the expense for which was included in Accrued expenses on the condensed consolidated balance sheets and in cost of revenue in the condensed consolidated statements of operations as