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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 10-Q
________________
[Mark One]
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission File Number: 001-04321
WHEELS UP EXPERIENCE INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation or Organization)
95-1557048
(I.R.S. Employer Identification No.)


601 West 26th Street, Suite 900,
New York, New York
 (Address of Principal Executive Offices)
10001
(Zip Code)
Registrant’s Telephone Number, Including Area Code: (212) 257-5252

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A common stock, $0.0001 par value per shareUPNew York Stock Exchange
Redeemable warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50UP WSNew York Stock Exchange

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.   Yes  þ No  
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes þ No  
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated Filer
þ
Smaller reporting company
þ
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes     No  þ
As of May 9, 2022, 245,911,301 shares of Class A common stock, $0.0001 par value per share, were issued and outstanding.





TABLE OF CONTENTS

Page
Item 3.
Item 4.
PART II.
Other Information
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.



CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside of the control of Wheels Up Experience Inc. (“Wheels Up,” or “we,” “us,” or “our”), that could cause actual results to differ materially from the results discussed in the forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding the expectations, hopes, beliefs, intentions or strategies of Wheels Up regarding the future including, without limitation, statements regarding: (i) the size, demands and growth potential of the markets for Wheels Up’s products and services and Wheels Up’s ability to serve those markets, (ii) the degree of market acceptance and adoption of Wheels Up’s products and services, (iii) Wheels Up’s ability to develop innovative products and services and compete with other companies engaged in the private aviation industry and (iv) Wheels Up’s ability to attract and retain customers. In addition, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that statement is not forward-looking. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the “Risk Factors” described under Part I, Item 1A in our most recent Annual Report on Form 10-K and Part II, Item 1A of this Quarterly Report. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made, and Wheels Up undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, changes in expectations, future events or otherwise.






PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WHEELS UP EXPERIENCE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
March 31, 2022
(Unaudited)
December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents$537,699 $784,574 
Accounts receivable, net78,034 79,403 
Other receivables8,914 8,061 
Parts and supplies inventories, net9,686 9,410 
Aircraft held for sale56,203 18,101 
Prepaid expenses and other 42,344 33,525 
Total current assets 732,880 933,074 
Property and equipment, net 380,225 317,836 
Operating lease right-of-use assets117,667 108,582 
Goodwill449,575 437,398 
Intangible assets, net141,734 146,959 
Restricted cash2,148 2,148 
Other non-current assets 60,754 35,067 
Total assets $1,884,983 $1,981,064 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $51,503 $43,672 
Accrued expenses 102,325 107,153 
Deferred revenue, current903,245 933,527 
Operating lease liabilities, current28,695 31,617 
Intangible liabilities, current2,000 2,000 
Other current liabilities16,189 17,068 
Total current liabilities 1,103,957 1,135,037 
Deferred revenue, non-current1,834 1,957 
Operating lease liabilities, non-current95,307 83,461 
Warrant liability6,637 10,268 
Intangible liabilities, non-current13,583 14,083 
Other non-current liabilities30 30 
Total liabilities 1,221,348 1,244,836 
Commitments and contingencies (Note 11)
Equity:
Class A common stock, $0.0001 par value; 2,500,000,000 authorized; 245,911,301 shares issued and 244,228,921 shares outstanding as of March 31, 2022; and 245,834,569 shares issued and outstanding as of December 31, 2021
25 25 
Additional paid-in capital 1,476,241 1,450,839 
Accumulated deficit (809,366)(720,713)
Treasury stock, at cost, 1,682,380 and 0 shares, respectively
(6,107) 
Total Wheels Up Experience Inc. stockholders’ equity660,793 730,151 
Non-controlling interests2,842 6,077 
Total equity663,635 736,228 
Total liabilities and equity $1,884,983 $1,981,064 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4


WHEELS UP EXPERIENCE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except share and per share data)
Three Months Ended March 31,
20222021
Revenue$325,635 $261,657 
Costs and expenses:
Cost of revenue332,758 234,508 
Technology and development 11,191 7,024 
Sales and marketing 23,243 15,794 
General and administrative 38,904 18,168 
Depreciation and amortization14,228 13,831 
Gain on sale of aircraft held for sale(1,971) 
Total costs and expenses418,353 289,325 
Loss from operations(92,718)(27,668)
Other income (expense):
Change in fair value of warrant liability3,631  
Interest income77 12 
Interest expense (4,557)
Other expense, net(30) 
Total other income (expense)3,678 (4,545)
Loss before income taxes(89,040)(32,213)
Income tax expense  
Net loss (89,040)(32,213)
Less: Net loss attributable to non-controlling interests(387)(2,804)
Net loss attributable to Wheels Up Experience Inc.$(88,653)$(29,409)
Net loss per share of Class A common stock:
Basic$(0.36)$(0.17)
Diluted$(0.36)$(0.17)
Weighted-average shares of Class A common stock outstanding:
Basic244,609,635 168,845,565 
Diluted244,609,635 168,845,565 
The accompanying notes are an integral part of these condensed consolidated financial statements.



5


WHEELS UP EXPERIENCE INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited, in thousands, except share data)
Class A common stockTreasury stock
SharesAmountAdditional paid-in capitalAccumulated
deficit
SharesAmountNon-controlling interestsTotal
Balance as of December 31, 2021245,834,569 $25 $1,450,839 $(720,713) $ $6,077 $736,228 
Equity-based compensation — — 13,659 — — — 8,895 22,554 
Change in non-controlling interests allocation— — 11,743 — — — (11,743) 
Shares withheld for employee taxes on vested equity awards— — — — 1,682,380 (6,107)— (6,107)
Issuance of Class A common stock upon settlement of restricted stock units76,732 — — — — — — — 
Net loss— — — (88,653)— — (387)(89,040)
Balance as of March 31, 2022245,911,301 $25 $1,476,241 $(809,366)1,682,380 $(6,107)$2,842 $663,635 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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WHEELS UP EXPERIENCE INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited, in thousands, except share data)
Class A common stock
SharesAmountAdditional paid-in capitalAccumulated
deficit
Non-controlling interestsTotal
Balance as of December 31, 2020169,717,147 $17 $798,478 $(530,693)$26,025 $293,827 
Consideration issued for business combination3,968,900 — 30,172 — — 30,172 
Equity-based compensation — — 1,160 — 254 1,414 
Change in non-controlling interests allocation— — (2,620)— 2,620  
Net loss— — — (29,409)(2,804)(32,213)
Balance as of March 31, 2021173,686,047 $17 $827,190 $(560,102)$26,095 $293,200 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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WHEELS UP EXPERIENCE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Three Months Ended March 31,
20222021
OPERATING ACTIVITIES:
Net loss$(89,040)$(32,213)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 14,228 13,831 
Amortization of deferred financing costs and debt discount 334 
Equity-based compensation22,554 1,414 
Change in fair value of warrant liability(3,631) 
Provision for expected credit losses(384)275 
Gain on sale of aircraft held for sale(1,971) 
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable3,088 5,364 
Other receivables(853)(6,078)
Parts and supplies inventories(277)(1,247)
Prepaid expenses and other (8,747)(2,183)
Other non-current assets(25,688)22 
Operating lease liabilities, net(161)(302)
Accounts payable7,599 13,679 
Accrued expenses(6,648)(11,980)
Other current liabilities(879)(24)
Other non-current liabilities 107 
Deferred revenue(30,406)(65,719)
Net cash used in operating activities(121,216)(84,720)
INVESTING ACTIVITIES:
Purchases of property and equipment(66,343)(2,273)
Purchases of aircraft held for sale(51,073) 
Proceeds from sale of aircraft held for sale, net14,942  
Acquisition of businesses, net of cash acquired(11,530)7,844 
Capitalized software development costs(5,548)(2,652)
Net cash (used in) provided by investing activities(119,552)2,919 
FINANCING ACTIVITIES:
Purchases of shares for treasury(6,107) 
Repayments of long-term debt (12,445)
Payments of deferred offering costs (443)
Repayment of loan to employee 102 
Net cash used in financing activities(6,107)(12,786)
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(246,875)(94,587)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH BEGINNING OF PERIOD786,722 324,876 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH END OF PERIOD$539,847 $230,289 
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Non-cash consideration issued for business acquisition of Mountain Aviation, LLC$ $30,172 
The accompanying notes are an integral part of these condensed consolidated financial statements.



WHEELS UP EXPERIENCE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.ORGANIZATION AND OPERATIONS
Wheels Up Experience Inc. (together with its consolidated subsidiaries, “Wheels Up”, the “Company”, “our”, “we”, and “us”) is a leading brand in private aviation that strives to deliver a total private aviation solution.
On July 13, 2021 (the “Closing Date”), we consummated the transactions contemplated by the Agreement and Plan of Merger (as amended, the “Merger Agreement”), dated as of February 1, 2021, as amended on May 6, 2021, by and among Aspirational Consumer Lifestyle Corp., a blank check company incorporated as a Cayman Islands exempted company (“Aspirational”), Wheels Up Partners Holdings LLC, a Delaware limited liability company (“WUP”), Kittyhawk Merger Sub LLC., a Delaware limited liability company and a direct wholly owned subsidiary of Aspirational (“Merger Sub”), Wheels Up Blocker Sub LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Aspirational (“Blocker Sub”), the Blocker Merger Subs (as defined in the Merger Agreement) and the Blockers (as defined in the Merger Agreement). In connection with the closing of the Merger Agreement, Aspirational filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which Aspirational was domesticated and continues as a Delaware corporation, changing its name to “Wheels Up Experience Inc.” (the “Domestication”).
On the Closing Date, (i) the Blockers simultaneously merged with and into the respective Blocker Merger Subs, with the Blockers surviving each merger as wholly owned subsidiaries of Wheels Up (the “First Step Blocker Mergers”), (ii) thereafter, the surviving Blockers simultaneously merged with and into Blocker Sub, with Blocker Sub surviving each merger (the “Second Step Blocker Mergers”), and (iii) thereafter, Merger Sub merged with and into WUP, with WUP surviving the merger, with Wheels Up as its managing member (the “Company Merger” and collectively with the First Step Blocker Mergers and the Second Step Blocker Mergers, the “Mergers” and, together with the Domestication, the “Business Combination”) (See Note 3).

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Basis of Presentation
The unaudited interim condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial reporting and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the condensed consolidated balance sheet as of December 31, 2021, has been derived from the audited consolidated financial statements at that date, but certain notes or other information that are normally required by U.S. GAAP have been omitted if they substantially duplicate the disclosures contained in our annual audited consolidated financial statements. The condensed consolidated financial statements include the accounts of Wheels Up Experience Inc. and its wholly-owned subsidiaries. We consolidate Wheels Up Partners MIP LLC (“MIP LLC”) and record the profits interests held in MIP LLC that Wheels Up does not own as non-controlling interests (see Note 14). All intercompany transactions and balances have been eliminated in consolidation.
Certain information and footnote disclosure normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to instructions, rules and regulations prescribed by the United States Securities and Exchange Commission (“SEC”). In the opinion of management, the unaudited financial information for the interim periods presented reflects all adjustments, which are normal and recurring, necessary for a fair presentation of the consolidated statement of operations, financial position, and cash flows. Interim results should not be regarded as indicative of results that may be expected for any other period or the entire year. The unaudited interim condensed consolidated financial statements should be read in conjunction with
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the audited consolidated financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2021.
Use of Estimates
Preparing the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates due to risks and uncertainties, including uncertainty in the current economic environment due to COVID-19, and any evolutions thereof (“COVID-19”). The most significant estimates include, but are not limited to, the useful lives and residual values of purchased aircraft, the fair value of financial assets and liabilities, acquired intangible assets, goodwill, contingent consideration, and other assets and liabilities, sales and use tax, the estimated life of member relationships, the determination of the allowance for credit losses, impairment assessments, the determination of the valuation allowance for deferred tax assets and the incremental borrowing rate for leases.
Reclassifications
Certain reclassifications have been made to the prior years condensed consolidated financial statements to conform to the current year presentation.
Adopted Accounting Pronouncements
In October 2021, the Financial Accounting Standards Board (“FASB”) issued accounting standards update (“ASU”) 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASC 805). This standard simplifies the measurement and recognition of contract assets and contract liabilities from contracts with customers acquired in a business combination. This guidance will generally result in the recognition of contract assets and contract liabilities consistent with those reported by the acquiree immediately before the acquisition date. We adopted ASU 2021-08 on January 1, 2022. This adoption did not have a material impact on our consolidated financial statements.

3.BUSINESS COMBINATION
The Business Combination was accounted for as a reverse recapitalization, where Aspirational was treated as the acquired company for financial reporting purposes. This accounting treatment is the equivalent of Wheels Up issuing stock for the net assets of Aspirational, accompanied by a recapitalization whereby no goodwill or other intangible assets are recorded. Accordingly, WUP is deemed the accounting predecessor of the combined business, and Wheels Up, as the parent company of the combined business, is the successor SEC registrant, meaning that all historical financial information presented in the condensed consolidated financial statements prior to the closing of the Business Combination represents the accounts of WUP.
Upon closing of the Business Combination, all outstanding WUP common interests and WUP preferred interests (including WUP restricted interests), as well as shares underlying WUP options, were converted into 190.0 million shares of Class A common stock and rolled over into the combined business. In addition, there were 29.0 million outstanding WUP profits interests recapitalized in connection with the Business Combination that can be exchanged on a value-for-value basis for Class A common stock subject to vesting.
Upon closing of the Business Combination, Aspirational and Aspirational’s public shareholders held 6.0 million and 10.6 million shares, respectively, of Class A common stock.
All references to numbers of common shares and per common share data prior to the Business Combination in these condensed consolidated financial statements and related notes have been retroactively adjusted to account for the effect of the reverse recapitalization. The reported share and per share amounts, have been converted by applying the exchange ratio established in the Merger Agreement of 0.4604, which was based on the Wheels Up implied price per share prior to the Business Combination (the “Exchange Ratio”). On the Closing Date, we received
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approximately $656.3 million in gross proceeds. In connection with the Business Combination, we incurred $70.4 million of transaction costs, consisting of advisory, legal, share registration and other professional fees, which are recorded within additional paid-in capital as a reduction of proceeds.
PIPE Investment
In connection with the Business Combination, Aspirational entered into subscription agreements with certain investors (the “PIPE Investors”), whereby Aspirational issued 55,000,000 shares of common stock at a price of $10.00 per share (the “PIPE Shares”) for an aggregate purchase price of $550 million (the “PIPE Investment”), which closed simultaneously with the consummation of the Business Combination. On the Closing Date, the PIPE Shares were automatically converted into shares of Class A common stock on a one-for-one basis.
Earnout Shares
Further, as part of the Business Combination, existing holders of WUP equity, including holders of profits interests and restricted interests, but excluding holders of stock options, have the right to receive up to an aggregate of 9,000,000 additional shares of Class A common stock in three equal tranches, which are issuable upon the achievement of Class A common stock share price thresholds of $12.50, $15.00, and $17.50 for any 20 trading days within a period of 30 consecutive trading days within five years of the Closing Date, respectively (the “Earnout Shares”).
Public Warrants and Private Warrants
The warrants assumed in the Business Combination include (i) 7,991,544 redeemable warrants sold by Aspirational as part of its initial public offering (the “Public Warrants”) of 23,974,362 units, consisting of one share of Class A common stock and one-third of one warrant exercisable for Class A common stock and (ii) 4,529,950 warrants privately sold by Aspirational at a price of $1.50 per warrant (the “Private Warrants”) to Aspirational Consumer Lifestyle Sponsor LLC (the “Sponsor”) simultaneously with the closing of the Aspirational initial public offering exercisable for Class A common stock.

4.     PROPERTY AND EQUIPMENT
Property and equipment consist of the following (in thousands):
March 31,
2022
December 31, 2021
Aircraft $548,300 $482,848 
Software development costs41,416 35,818 
Leasehold improvements 8,301 12,584 
Computer equipment 2,147 2,147 
Buildings and improvements1,424 1,424 
Furniture and fixtures1,997 1,960 
Tooling 3,402 3,129 
Vehicles1,157 1,142 
608,144 541,052 
Less: Accumulated depreciation and amortization (227,919)(223,216)
Total $380,225 $317,836 
Depreciation and amortization expense of property and equipment was $9.5 million and $8.9 million for the three months ended March 31, 2022 and 2021, respectively.
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Capitalized costs related to the internal development of software was $5.5 million and $2.7 million for the three months ended March 31, 2022 and 2021, respectively.
Amortization expense related to software development costs, included as part of depreciation and amortization expense of property and equipment, was $2.3 million and $1.5 million for the three months ended March 31, 2022 and 2021, respectively.

5.     REVENUE
Disaggregation of Revenue
The following table disaggregates revenue by service type and the timing of when these services are provided to the member or customer (in thousands):
Three Months Ended March 31,
20222021
Services transferred at a point in time:
Flights, net of discounts and incentives$236,363 $190,474 
Aircraft management58,049 48,423 
Other7,178 4,289 
Services transferred over time:
Memberships 20,647 14,974 
Aircraft management2,457 2,457 
Other941 1,040 
Total $325,635 $261,657 
Revenue in the condensed consolidated statements of operations is presented net of discounts and incentives of $3.2 million for each of the three months ended March 31, 2022 and 2021.
Contract Balances
Receivables from member and customer contracts are included within accounts receivable, net on the condensed consolidated balance sheets. As of March 31, 2022 and December 31, 2021, gross receivables from members and customers were $71.6 million and $71.8 million, respectively. As of March 31, 2022 and December 31, 2021, undeposited funds, included within accounts receivable, net, were $11.2 million and $13.5 million, respectively. As of March 31, 2022 and December 31, 2021, the allowance for expected credit losses was $4.8 million and $5.9 million, respectively.
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Deferred revenue consists of the following (in thousands):
 March 31, 2022December 31, 2021
Flights - Prepaid Blocks and jet cards$848,275 $876,750 
Memberships - annual dues46,339 47,069 
Memberships - initiation fees3,824 4,072 
Flights - credits6,081 6,633 
Other560 960 
Deferred revenue - total 905,079 935,484 
Less: Deferred revenue - current (903,245)(933,527)
Deferred revenue - non-current $1,834 $1,957 
Changes in deferred revenue for the three months ended March 31, 2022 were as follows (in thousands):
Deferred revenue - beginning balance$935,484 
Amounts deferred during the period230,653 
Revenue recognized from amounts included in the deferred revenue beginning balance(206,728)
Revenue from current period sales(54,330)
Deferred revenue - ending balance$905,079 
Revenue expected to be recognized in future periods for performance obligations that are unsatisfied, or partially unsatisfied, as of March 31, 2022 approximates $470.5 million for the remaining three quarters of 2022 and $296.7 million, $69.3 million and $68.6 million for 2023, 2024 and 2025, respectively.
Costs to Obtain a Contract
Capitalized costs related to sales commissions and referral fees were $4.3 million and $1.7 million for the three months ended March 31, 2022 and 2021, respectively.
As of March 31, 2022 and December 31, 2021, capitalized sales commissions and referral fees of $9.5 million and $8.6 million, respectively, are in prepaid expenses and other current assets and $1.5 million and $1.4 million, respectively, are in other non-current assets on the condensed consolidated balance sheets. Amortization expense related to capitalized sales commissions and referral fees included in sales and marketing expense in the condensed consolidated statements of operations was $3.5 million and $2.8 million for the three months ended March 31, 2022 and 2021, respectively.
6.    ACQUISITIONS
Alante Air Charter, LLC Acquisition
On February 3, 2022, we acquired all of the outstanding equity of Alante Air Charter, LLC (“Alante Air”) for a total purchase price of $14.6 million in cash. Alante Air adds 12 Light jets to our controlled fleet and expands our presence in the Western United States. Acquisition-related costs for Alante Air of $0.5 million were included in general and administrative expense in the condensed consolidated statements of operations for the three months ended March 31, 2022. The acquisition of Alante Air was determined to be a business combination.
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As of the date of acquisition, the total preliminary purchase price allocated to the Alante Air assets acquired and liabilities assumed according to their estimated fair values were as follows (in thousands):
Current assets$4,452 
Goodwill12,177 
Other assets22,048 
Total assets acquired38,677 
Total liabilities assumed(24,101)
Net assets acquired$14,576 
Current assets of Alante Air included $3.0 million of cash and $1.4 million of accounts receivable, including $15 thousand owed from Wheels Up that was eliminated in consolidation upon acquisition.
The above initial fair value estimates of the assets acquired and liabilities assumed were provisional based on the information that was available as of the acquisition date.
Goodwill represents the excess of the purchase price over the fair values of the acquired net tangible assets. The allocated value of goodwill primarily relates to anticipated synergies and economies of scale by combining the use of Alante Air’s aircraft and existing business processes with our other acquisitions. The acquired goodwill is deductible for tax purposes.
The results of Alante Air were included in the condensed consolidated statement of operations from the date of acquisition. Revenue for Alante Air was $2.4 million, net of intercompany eliminations, and loss from operations was $3.5 million from the date of acquisition through March 31, 2022.
Unaudited Pro Forma Summary of Operations
The accompanying unaudited pro forma summary represents the consolidated results of operations as if the 2021 acquisition of Mountain Aviation, LLC had been completed as of January 1, 2021 and the 2022 acquisition of Alante Air had been completed as of January 1, 2021. The unaudited pro forma financial results for 2022 reflect the results for the three months ended March 31, 2022, as well as the effects of pro forma adjustments for the transaction in 2022. The unaudited pro forma financial information includes the accounting effects of the acquisition, including professional fees associated with the transaction. The pro forma results were based on estimates and assumptions, which we believe are reasonable. The unaudited pro forma summary does not necessarily reflect the actual results that would have been achieved had the companies been combined during the periods presented, nor is it necessarily indicative of future consolidated results (in thousands, except per share data).
Three Months Ended March 31,
20222021
Net revenue$328,035 $270,059 
Net loss$(88,454)$(32,436)
Net loss attributable to Wheels Up Experience Inc. $(88,074)$(29,614)
Net loss per share$(0.36)$(0.18)

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7.    GOODWILL AND INTANGIBLE ASSETS
Goodwill
The change in the carrying value of goodwill for the three months ended March 31, 2022, was as follows (in thousands):
Balance as of December 31, 2021$437,398 
Acquisition of Alante Air12,177 
Balance as of March 31, 2022$449,575 
Intangible Assets
The gross carrying value, accumulated amortization and net carrying value of intangible assets consisted of the following (in thousands):
March 31, 2022
Gross Carrying
Value
Accumulated AmortizationNet Carrying
Value
Status$80,000 $17,644 $62,356 
Customer relationships74,600 16,403 58,197 
Non-competition agreement210 210  
Trade name14,230 6,046 8,184 
Developed technology19,545 7,085 12,460 
Leasehold interest - favorable 600 63 537 
Total $189,185 $47,451 $141,734 
December 31, 2021
Gross Carrying
Value
Accumulated AmortizationNet Carrying
Value
Status$80,000 $15,644 $64,356 
Customer relationships74,600 14,443 60,157 
Non-competition agreement210 209 1 
Trade name14,230 5,493 8,737 
Developed technology19,545 6,380 13,165 
Leasehold interest - favorable 600 57 543 
Total $189,185 $42,226 $146,959 
Amortization expense of intangible assets was $5.2 million and $5.3 million for the three months ended March 31, 2022 and 2021, respectively.
Intangible Liabilities
The gross carrying value, accumulated amortization and net carrying value of intangible liabilities consisted of the following (in thousands):
March 31, 2022
Gross Carrying
Value
Accumulated AmortizationNet Carrying
Value
Intangible liabilities$20,000 $4,417 $15,583 
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December 31, 2021
Gross Carrying
Value
Accumulated AmortizationNet Carrying
Value
Intangible liabilities$20,000 $3,917 $16,083 
Amortization of intangible liabilities, which reduces amortization expense was $0.5 million and $0.5 million for the three months ended March 31, 2022 and 2021, respectively.
Future amortization expense of intangible assets and intangible liabilities held as of March 31, 2022, are as follows (in thousands):
Year ending December 31, Intangible AssetsIntangible Liabilities
2022$14,898 $1,500 
202319,864 2,000 
202419,701 2,000 
202519,288 2,000 
202618,604 2,000 
Thereafter49,379 6,083 
Total$141,734 $15,583 

8.    CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash Equivalents
As of March 31, 2022 and December 31, 2021, cash equivalents on the condensed consolidated balance sheets were $408.1 million and generally consisted of investments in money market funds, United States (“U.S.”) treasury bills and time deposits.
Interest income from cash equivalents of $77 thousand and $12 thousand were recorded in interest income in the condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021, respectively.
Restricted Cash
As of March 31, 2022 and December 31, 2021, restricted cash on the condensed consolidated balance sheets represents amounts held by financial institutions to establish a standby letter of credit required by the lessor of certain corporate office space.
A reconciliation of cash and cash equivalents and restricted cash from the condensed consolidated balance sheets to the condensed consolidated statements of cash flows is shown below (in thousands):
March 31, 2022March 31, 2021
Cash and cash equivalents$537,699 $215,027 
Restricted cash2,148 15,262 
Total$539,847 $230,289 

9.    FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, an exit price, in an orderly transaction between unaffiliated willing market participants on the measurement date under
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current market conditions. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available and activity in the markets used to measure fair value. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.
Level 1 -Quoted prices, unadjusted, in active markets for identical assets or liabilities that can be accessed at the measurement date.
Level 2 -Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 -Unobservable inputs developed using our own estimates and assumptions, which reflect those that market participants would use in pricing the asset or liability.
Financial instruments that are measured at fair value on a recurring basis and their corresponding placement in the fair value hierarchy consist of the following (in thousands):
March 31, 2022
Level 1Level 2Level 3Fair Value
Assets:
Cash equivalents$408,139 $ $ $408,139 
Liabilities:
Warrant liability - Public Warrants4,236   4,236 
Warrant liability - Private Warrants 2,401  2,401 
Total liabilities$4,236 $2,401 $ $6,637 
December 31, 2021
Level 1Level 2Level 3Fair Value
Assets:
Cash equivalents$408,082 $ $ $408,082 
Liabilities:
Warrant liability - Public Warrants6,553   6,553 
Warrant liability - Private Warrants 3,715  3,715 
Total liabilities$6,553 $3,715 $ $10,268 
The carrying amount of cash equivalents approximates fair value and is classified within Level 1 because we determined the fair value through quoted market prices.
The warrants were accounted for as a liability in accordance with ASC 815-40 (see Note 18). The warrant liability was measured at fair value upon assumption and on a recurring basis, with changes in fair value presented in the condensed consolidated statements of operations.
As of March 31, 2022 and December 31, 2021, we valued the warrants by applying the valuation technique of a Monte Carlo simulation model to reflect the redemption conditions. We used Level 1 inputs for the Public Warrants and Level 2 inputs for the Private Warrants. The Private Warrants are substantially similar to the Public Warrants, but not directly traded or quoted on an active market.
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The following table presents the changes in the fair value of the warrant liability (in thousands):
Public WarrantsPrivate WarrantsTotal
Warrant Liability
Fair value as of December 31, 2021$6,553 $3,715 $10,268 
Change in fair value of warrant liability(2,317)(1,314)(3,631)
Fair value as of March 31, 2022$4,236 $2,401 $6,637 

10.    LONG-TERM DEBT
On July 21, 2021, in connection with proceeds received from the Business Combination, we repaid substantially all of the outstanding principal of our long-term debt, together with all accrued and unpaid interest in the amount of $175.5 million.
Amortization expense for debt discounts and deferred financing costs of $0.3 million was recorded in interest expense in the condensed consolidated statements of operations for the three months ended March 31, 2021.
Debt Covenants
Our credit facilities contained certain restrictive covenants. We have satisfied these covenants for all periods presented.

11.    COMMITMENTS AND CONTINGENCIES
Legal Proceedings
We are party to various legal actions arising in the normal course of business. While we do not expect that the ultimate resolution of any of these pending actions will have a material effect on our consolidated results of operations, financial position, or cash flows, litigation is subject to inherent uncertainties. As such, there can be no assurance that any pending legal action, which we believe to be immaterial as of March 31, 2022, does not become material in the future.
Sales and Use Tax Liability
We 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, 2022 and December 31, 2021, respectively, we estimate the potential exposure to such tax liability to be $9.0 million and $8.5 million, respectively, the expense for which is included in accrued expenses on the condensed consolidated balance sheets and cost of revenue in the condensed consolidated statements of operations.

12.    LEASES
Leases primarily pertain to certain controlled aircraft, corporate headquarters, and operational facilities, including aircraft hangars, which are all accounted for as operating leases. We sublease the corporate headquarters and aircraft hangar at Cincinnati/Northern Kentucky International Airport from Delta.
We have certain variable lease agreements with aircraft owners that contain payment terms based on an hourly lease rate multiplied by the number of flight hours during a month. Variable lease payments were $4.4 million and $4.6 million for the three months ended March 31, 2022 and 2021, respectively.
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The components of net lease cost are as follows (in thousands):
Three Months Ended March 31,
20222021
Operating lease costs$9,102 $7,554 
Short-term lease costs5,293 7,048 
Total lease costs$14,395 $14,602 
Costs related to leased aircraft and operational facilities were $12.5 million and $13.0 million for the three months ended March 31, 2022 and 2021, respectively, and are included in cost of revenue in the condensed consolidated statements of operations. Costs related to leased corporate headquarters and other office space including expenses for non-lease components were $1.9 million and $1.5 million for the three months ended March 31, 2022 and 2021, respectively, and are included in general and administrative expense in the condensed consolidated statements of operations.
Supplemental cash flow information related to leases are as follows (in thousands):
Three Months Ended March 31,
20222021
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows paid for operating leases$9,119 $7,867 
Right-of-use assets obtained in exchange for operating lease obligations$37,180 $40,093 
Supplemental balance sheet information related to leases are as follows:
March 31, 2022December 31, 2021
Weighted-average remaining lease term (in years):
Operating leases6.16.4
Weighted-average discount rate:
Operating leases9.0 %9.5 %
Maturities of lease liabilities, as of March 31, 2022, are as follows (in thousands):
Year ending December 31,Operating Leases
2022$29,320 
202335,583 
202429,954 
202517,329 
202611,323 
Thereafter42,580 
Total lease payments 166,089 
Less: Imputed interest(42,087)
Total lease obligations$124,002 
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13.    STOCKHOLDER’S EQUITY AND EQUITY-BASED COMPENSATION
Pursuant to the Wheels Up Experience Inc. certificate of incorporation, we are authorized to issue 2,500,000,000 shares of Class A common stock, par value of $0.0001 per share, and 25,000,000 shares of preferred stock, par value $0.0001 per share. Holders of Class A common stock are entitled to one vote per share.
As of March 31, 2022, we have the following nine equity-based compensation plans that were approved by the board of directors of WUP prior to the Business Combination, Wheels Up Partners Holdings LLC Equity Incentive Plan (“MIP Plan”), Wheels Up Partners Holdings LLC Equity Incentive Plan II (“MIP Plan II”); Wheels Up Partners Holdings LLC Equity Incentive Plan III (“MIP Plan III”); Wheels Up Partners Holdings LLC Equity Incentive Plan IV (“MIP Plan IV”); and Wheels Up Partners Holdings LLC Equity Incentive Plan V (“MIP Plan V”); Wheels Up Partners Holdings LLC Equity Incentive Plan VI (“MIP Plan VI”); Wheels Up Partners Holdings LLC Equity Incentive Plan VII (“MIP Plan VII”) and Wheels Up Partners Holdings LLC Equity Incentive Plan VIII (“MIP Plan VIII”); which collectively constitute the management incentive plan and the Wheels Up Partners Holdings LLC Option Plan, which is the WUP stock option plan. As of March 31, 2022, no grants can be made under the WUP management incentive plan or the WUP stock option plan.
In connection with the Business Combination, the board of directors (the “Board”) and stockholders of Wheels Up adopted the Wheels Up Experience Inc. 2021 Long-Term Incentive Plan (the “2021 LTIP”), for employees, consultants and other qualified persons.
WUP Management Incentive Plan
WUP Profits Interests
As of March 31, 2022, an aggregate of 31.3 million profits interests have been authorized and issued under the WUP management incentive plan.
The following table summarizes the profits interests activity under the WUP management incentive plan as of March 31, 2022:
 Number of WUP
Profits Interests
Weighted-Average Grant
Date Fair Value
 (in thousands)
Outstanding WUP profits interests as of January 1, 202228,819 $0.42 
Granted   
Exchanged  
Expired/forfeited (6)0.24 
Outstanding WUP profits interests as of March 31, 202228,813 $0.42 
The weighted-average remaining contractual term as of March 31, 2022, for WUP profits interests outstanding was approximately 9.3 years.
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The following table summarizes the status of non-vested WUP profits interests as of March 31, 2022:
 Number of WUP
Profits Interests
Weighted-Average Grant
Date Fair Value
 (in thousands)
Non-vested WUP profits interests as of January 1, 20224,733 $0.35 
Granted 
Vested (2,362)0.34 
Forfeited(6)0.24 
Non-vested WUP profits interests as of March 31, 20222,365 $0.37 
The total unrecognized compensation cost related to non-vested WUP profits interests was $0.6 million as of March 31, 2022 and is expected to be recognized over a weighted-average period of 0.9 years. The total fair value for WUP profits interests that vested was approximated $0.8 million for the three months ended March 31, 2022.
WUP Restricted Interests
As of March 31, 2022, under MIP Plan VII, 4.7 million WUP restricted interests have been authorized and issued to certain Wheels Up employees.
The following table summarizes the restricted interests activity under the WUP management incentive plan as of March 31, 2022:
Number of WUP Restricted InterestsWeighted-Average Grant Date Fair Value
(in thousands)
Non-vested WUP restricted interests as of January 1, 20224,662 $3.98 
Granted  
Vested(3,582)4.00 
Forfeited  
Non-vested WUP restricted interests as of March 31, 20221,080 $3.91 
The weighted-average remaining contractual term as of March 31, 2022, for WUP restricted interests outstanding was approximately 7.8 years.
The total unrecognized compensation cost related to non-vested WUP restricted interests was $0.2 million as of March 31, 2022 and is expected to be recognized over a weighted-average period of 0.4 years. WUP restricted interests are time and performance-based awards that vest with a change in control or initial public offering. As a result, we started recording compensation cost for WUP restricted interests on the Closing Date. The total fair value for WUP restricted interests that vested was approximated $14.3 million for the three months ended March 31, 2022.
The WUP restricted interests granted vest when both of the following conditions exist: (i) ratably over a four-year service period and (ii) upon the first to occur of (A) a change of control and (B) the later to occur of (1) six months after an initial public offering and (2) 30 days after the expiration of any applicable lock-up period in connection with an initial public offering. The WUP restricted interests lock-up period expired on February 8, 2022. As of this date, the holders of WUP restricted interests met the vesting conditions for the portion of their awards that did not require further service.
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WUP Stock Option Plan
As of March 31, 2022, the number of WUP stock options authorized and issued in aggregate under the WUP stock option plan was 17.5 million. Each outstanding stock option is exercisable for one share of Class A common stock.
The following table summarizes the activity under the WUP stock option plan as of March 31, 2022:
Number of WUP
Stock Options
Weighted-
Average Exercise
Price
Weighted-Average Grant
Date Fair Value
(in thousands)
Outstanding WUP stock options as of January 1, 202215,713 $7.52 $1.19 
Granted   
Exercised   
Forfeited(440)7.72 1.35 
Expired   
Outstanding WUP stock options as of March 31, 202215,273 $7.51 $1.18 
Exercisable WUP stock options as of March 31, 202212,070 $7.41 $1.04 
The aggregate intrinsic value as of March 31, 2022, for WUP stock options that were outstanding and exercisable was $0.
The weighted-average remaining contractual term as of March 31, 2022, for WUP stock options that were outstanding and exercisable was approximately 7.6 years and 7.4 years, respectively.
The following table summarizes the status of non-vested WUP stock options as of March 31, 2022:
 Number of WUP Stock Options Weighted-Average Grant
Date Fair Value
 (in thousands)
Non-vested WUP stock options as of January 1, 20223,971 $1.63 
Granted   
Vested (556)1.13 
Expired  
Forfeited(212)1.78 
Non-vested WUP stock options as of March 31, 20223,203 $1.70 
The total unrecognized compensation cost related to non-vested WUP stock options was $3.6 million as of March 31, 2022 and is expected to be recognized over a weighted-average period of 1.3 years. The total fair value for WUP stock options that vested was approximated $0.6 million for the three months ended March 31, 2022.
2021 LTIP
As of March 31, 2022, an aggregate of 27.3 million shares were authorized for issuance under the 2021 LTIP.
Restricted Stock Units (“RSUs”)
The following table summarizes the activity under the 2021 LTIP related to RSUs as of March 31, 2022:
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Number of RSUsWeighted-Average Grant
Date Fair Value
(in thousands)
Non-vested RSUs as of January 1, 20228,411 $7.32 
Granted7,699 3.95 
Vested(95)7.48 
Forfeited(439)7.17 
Non-vested RSUs as of March 31, 202215,576 $5.66 
The total unrecognized compensation cost related to non-vested RSUs was $73.2 million as of March 31, 2022 and is expected to be recognized over a weighted-average period of 2.4 years. The total fair value for RSUs that vested was approximated $0.7 million for the three months ended March 31, 2022.
Wheels Up Stock Options
The following table summarizes the activity under the 2021 LTIP related to Wheels Up stock options as of March 31, 2022:
Number of Wheels Up
Stock Options
Weighted-
Average Exercise
Price
Weighted-Average Grant
Date Fair Value
(in thousands)
Outstanding Wheels Up stock options as of January 1, 2022921 $10.00 $4.75 
Granted   
Exercised   
Forfeited   
Expired   
Outstanding Wheels Up stock options as of March 31, 2022921 $10.00 $4.75 
Exercisable Wheels Up stock options as of March 31, 2022230