Company: UP
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001628280-25-049230
Chunk: 69

Company: Wheels Up Experience Inc.
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 1
Chunk 69
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 reasserted counterclaims for amounts it claims it is owed under the GRP Agreement, and FE filed a motion to dismiss on 

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jurisdictional grounds, to which the Company filed its answer, defenses and opposition on October 22, 2025. The parties are actively engaged in the discovery process.The Company intends 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. The Company’s success in recovering the amounts from FE will depend on several factors, including the availability of funds by FE for the recoverable amounts. The Company is in the process of evaluating the effects of the foregoing events and it cannot make a reasonable estimate of any outcome, recovery or loss at this time.Sales and Use Tax LiabilityThe Company regularly provides 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. The Company determined that there is uncertainty as to what constitutes nexus in respective states for a state to levy taxes, fees and surcharges relating to its activity. As of each of September 30, 2025 and December 31, 2024, the Company estimated the potential exposure to such tax liability was $5.5 million, the expense for which was included in Accrued expenses on the condensed consolidated balance sheets.

14.RELATED PARTIES

The Company engages in transactions with certain stockholders who are also members, ambassadors or customers. Such transactions primarily relate to their membership in the Wheels Up program, flights and flight-related services.

The Company incurred expenses of nil and $0.2 million for the three and nine months ended September 30, 2025, respectively, and nil and $1.1 million for the three and nine months ended September 30, 2024, respectively, from transactions related to the Original CCA or Amended CCA, as applicable, with Delta. As of September 30, 2025 and December 31, 2024, $2.6 million and $2.4 million, respectively, were included in Accrued expenses and Accounts payable on the condensed consolidated balance sheet related to transactions associated with the Original CCA and Amended CCA, as applicable, with Delta. 

15.INCOME TAXES

We are subject to U.S. federal, state and local income taxes with respect to our allocable share of any taxable income or loss