Flywire Corp

From time to time, we may be subject to legal proceedings and claims in the ordinary course of business, including patent, commercial, product liability, employment, class action, whistleblower, and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. In addition, third parties may from time to time assert claims against us in the form of letters and other communications. We are not currently a party to any legal proceedings that we believe to be material, individually or in the aggregate, to our business or condensed consolidated financial statements. The results of any future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

On February 28, 2024, Plaintiff Aaron Jones (Plaintiff), on behalf of himself and all similarly situated stockholders of Flywire, filed a putative class action complaint styled Aaron Jones v. Alex Finkelstein, et al., 2024-0178-JTL (Del. Ch.) (the Action), against Flywire and its directors (collectively, Defendants) alleging breaches of fiduciary duty in connection with the approval, adoption, and maintenance of certain provisions in Flywire’s Amended and Restated Bylaws, effective May 28, 2021 (the Bylaws). Flywire and the director defendants do not believe the Bylaws required amendment under applicable law and deny that any breach of fiduciary duties or other wrongful conduct occurred, and solely to avoid the costs, distractions, and uncertainties inherent in litigation, on March 15, 2024, amended the Bylaws, which mooted Plaintiff’s claims. On March 27, 2024, the Court entered an Order dismissing the Action with prejudice as to Plaintiff and without prejudice as to any actual or potential claims of any other members of the putative class, retaining jurisdiction solely for the purpose of determining Plaintiff’s counsel’s application for attorneys’ fees and reimbursement of expenses (the Fee Application). To avoid the time and expense of continued litigation, the parties agreed to resolve the Fee Application in exchange for a payment by Flywire of $435,000 to Plaintiff’s counsel.

In the course of implementing geolocation data-based sanctions screening measures, we identified certain payments which, based on geolocation data and other factors, appear to have been initiated from Cuba, Iran, Syria or the Crimea region of Ukraine, in potential violation of applicable sanctions regimes. Although Flywire continues to evaluate whether these or other transactions constitute potential violations of OFAC sanctions (including whether certain of these payments may have been authorized by general licenses or license exemptions under the relevant sanctions regulations), in August 2023, Flywire made a voluntary submission to OFAC to report the potential violations, and in April 2024 furnished a supplemental submission to OFAC. Flywire is currently engaging with OFAC to resolve these matters. Based upon the results of the internal investigation completed to date, we do not believe that the amount of any loss incurred as a result of this matter would be material to our business, financial condition, results of operations or cash flows.