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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 June 30, 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)
98-1617611
(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 August 9, 2022, 244,472,138 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, (iv) Wheels Up’s ability to attract and retain customers, and (v) general economic and geopolitical conditions, including due to fluctuations in interest rates, inflation, foreign currencies, consumer and business spending decisions, and general levels of economic activity. 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 for the year ended December 31, 2021, Part II, Item 1A of this Quarterly Report, and elsewhere in 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)
June 30, 2022
(Unaudited)
December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents$426,984 $784,574 
Accounts receivable, net114,024 79,403 
Other receivables12,111 8,061 
Parts and supplies inventories, net12,355 9,410 
Aircraft inventory30,464  
Aircraft held for sale37,375 18,101 
Prepaid expenses40,481 21,789 
Other current assets18,144 11,736 
Total current assets 691,938 933,074 
Property and equipment, net 389,395 317,836 
Operating lease right-of-use assets113,291 108,582 
Goodwill528,327 437,398 
Intangible assets, net154,666 146,959 
Restricted cash27,432 2,148 
Other non-current assets 63,998 35,067 
Total assets $1,969,047 $1,981,064 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $61,957 $43,672 
Accrued expenses 124,073 107,153 
Deferred revenue, current1,039,279 933,527 
Operating lease liabilities, current28,378 31,617 
Intangible liabilities, current2,000 2,000 
Other current liabilities16,678 17,068 
Total current liabilities 1,272,365 1,135,037 
Deferred revenue, non-current1,793 1,957 
Operating lease liabilities, non-current90,801 83,461 
Warrant liability4,508 10,268 
Intangible liabilities, non-current13,083 14,083 
Other non-current liabilities3,741 30 
Total liabilities 1,386,291 1,244,836 
Commitments and contingencies (Note 11)
Equity:
Class A common stock, $0.0001 par value; 2,500,000,000 authorized; 246,187,546 shares issued and 244,274,300 shares outstanding as of June 30, 2022; and 245,834,569 shares issued and outstanding as of December 31, 2021
25 25 
Additional paid-in capital 1,499,864 1,450,839 
Accumulated deficit (902,126)(720,713)
Accumulated other comprehensive loss(8,318) 
Treasury stock, at cost, 1,913,246 and 0 shares, respectively
(6,689) 
Total Wheels Up Experience Inc. stockholders’ equity582,756 730,151 
Non-controlling interests 6,077 
Total equity582,756 736,228 
Total liabilities and equity $1,969,047 $1,981,064 
The accompanying notes are an integral part of these condensed consolidated financial statements.
1


WHEELS UP EXPERIENCE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except share and per share data)
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Revenue$425,512 $285,580 $751,147 $547,237 
Costs and expenses:
Cost of revenue408,898 255,188 741,656 489,695 
Technology and development14,606 8,025 25,797 15,049 
Sales and marketing 33,688 17,895 56,931 33,689 
General and administrative 46,973 15,786 85,877 33,955 
Depreciation and amortization16,134 13,482 30,362 27,313 
Gain on sale of aircraft held for sale(663) (2,634) 
Total costs and expenses519,636 310,376 937,989 599,701 
Loss from operations(94,124)(24,796)(186,842)(52,464)
Other income (expense):
Change in fair value of warrant liability2,129  5,760  
Interest income405 6 482 18 
Interest expense (4,164) (8,721)
Other expense, net(850) (880) 
Total other income (expense)1,684 (4,158)5,362 (8,703)
Loss before income taxes(92,440)(28,954)(181,480)(61,167)
Income tax expense(320) (320) 
Net loss(92,760)(28,954)(181,800)(61,167)
Less: Net loss attributable to non-controlling interests (2,798)(387)(5,602)
Net loss attributable to Wheels Up Experience Inc.$(92,760)$(26,156)$(181,413)$(55,565)
Net loss per share of Class A common stock:
Basic$(0.38)$(0.15)$(0.74)$(0.33)
Diluted$(0.38)$(0.15)$(0.74)$(0.33)
Weighted-average shares of Class A common stock outstanding:
Basic244,086,036 169,023,943 244,347,439 168,935,745 
Diluted244,086,036 169,023,943 244,347,439 168,935,745 
The accompanying notes are an integral part of these condensed consolidated financial statements


2



WHEELS UP EXPERIENCE INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited, in thousands)
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Net loss$(92,760)$(28,954)$(181,800)$(61,167)
 Other comprehensive loss:
Foreign currency translation adjustments(8,318) (8,318) 
Comprehensive loss(101,078)(28,954)(190,118)(61,167)
Less: Comprehensive loss attributable to non-controlling interests (2,798)(387)(5,602)
Comprehensive loss attributable to Wheels Up Experience Inc.$(101,078)$(26,156)$(189,731)$(55,565)
The accompanying notes are an integral part of these condensed consolidated financial statements

3


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
Accumulated
other comprehensive loss
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 
Equity-based compensation— — 12,328 — — — — 8,453 20,781 
Change in non-controlling interests allocation— — 11,295 — — — — (11,295) 
Shares withheld for employee taxes on vested equity awards— — — — — 230,866 (582)— (582)
Issuance of Class A common stock upon settlement of restricted stock units276,245 — — — — — — — — 
Net loss— — — (92,760)— — —  (92,760)
Foreign currency translation adjustments— — — — (8,318)— — — (8,318)
Balance as of June 30, 2022246,187,546 $25 $1,499,864 $(902,126)$(8,318)1,913,246 $(6,689)$ $582,756 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4


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 
Equity-based compensation— — 1,117 — 231 1,348 
Change in non-controlling interests allocation— — (3,106)— 3,106  
Net loss— — — (26,156)(2,798)(28,954)
Balance as of June 30, 2021173,686,047 $17 $825,201 $(586,258)$26,634 $265,594 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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WHEELS UP EXPERIENCE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Six Months Ended June 30,
20222021
OPERATING ACTIVITIES:
Net loss$(181,800)$(61,167)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 30,362 27,313 
Amortization of deferred financing costs and debt discount 618 
Equity-based compensation43,335 2,762 
Change in fair value of warrant liability(5,760) 
Provision for expected credit losses200 498 
Gain on sale of aircraft held for sale(2,634) 
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable(17,394)(1,461)
Other receivables(4,050)(2,091)
Parts and supplies inventories(2,754)(2,114)
Aircraft inventory(30,464) 
Prepaid expenses(9,442)413 
Other current assets(520)(678)
Other non-current assets(27,496)(49)
Operating lease liabilities, net(563)(504)
Accounts payable9,345 14,158 
Accrued expenses(6,979)(7,275)
Other current liabilities(655)(508)
Other non-current liabilities(297)132 
Deferred revenue67,391 (88,958)
Net cash used in operating activities(140,175)(118,911)
INVESTING ACTIVITIES:
Purchases of property and equipment(76,464)(4,780)
Purchases of aircraft held for sale(43,774) 
Proceeds from sale of aircraft held for sale, net27,135  
Acquisitions of businesses, net of cash acquired(75,093)7,844 
Capitalized software development costs(12,901)(5,732)
Net cash used in investing activities(181,097)(2,668)
FINANCING ACTIVITIES:
Purchases of shares for treasury(6,689) 
Repayments of long-term debt (29,250)
Payments of deferred offering costs (1,426)
Repayment of loan to employee 102 
Net cash used in financing activities(6,689)(30,574)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(4,345) 
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(332,306)(152,153)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH BEGINNING OF PERIOD786,722 324,876 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH END OF PERIOD$454,416 $172,723 
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 originally 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 the coronavirus pandemic, 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.
Foreign Currency Translation Adjustments
Assets and liabilities of foreign subsidiaries, where the functional currency is not the United States (“U.S.”) dollar, have been translated at period-end exchange rates and profit and loss accounts have been translated using weighted-average exchange rates. Adjustments resulting from currency translation have been recorded in the equity section of the condensed consolidated balance sheets and the condensed consolidated statements of other comprehensive loss as a cumulative translation adjustment.
Interim Impairment Test
During the second quarter of 2022, we determined that because of a sustained decrease in the quoted market price of our Class A common stock from the Closing Date, combined with a further decline in our operating margins, there was an indication that a triggering event occurred and the carrying value of our long-lived assets and goodwill may not be recoverable. As a result, we performed an undiscounted cash flow analysis of our long-lived assets for potential impairment as of June 1, 2022, and based on the analysis, it was determined that there was no impairment to our long-lived assets. In addition, we performed an interim quantitative impairment assessment of goodwill on June 1, 2022, using a discounted cash flow approach, which did not result in impairment to goodwill.
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
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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 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.

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4.     PROPERTY AND EQUIPMENT
Property and equipment consist of the following (in thousands):
June 30,
2022
December 31, 2021
Aircraft $557,525 $482,848 
Software development costs49,520 35,818 
Leasehold improvements 9,023 12,584 
Computer equipment 2,441 2,147 
Buildings and improvements1,425 1,424 
Furniture and fixtures2,767 1,960 
Tooling 3,507 3,129 
Vehicles1,514 1,142 
627,722 541,052 
Less: Accumulated depreciation and amortization (238,327)(223,216)
Total $389,395 $317,836 
Depreciation and amortization expense of property and equipment was $10.1 million and $19.6 million for the three and six months ended June 30, 2022, respectively, and $8.6 million and $17.6 million for the three and six months ended June 30, 2021, respectively.
Capitalized costs related to the internal development of software was $7.4 million and $12.9 million for the three and six months ended June 30, 2022, respectively, and $3.1 million and $5.7 million for the three and six months ended June 30, 2021, respectively.
Amortization expense related to software development costs, included as part of depreciation and amortization expense of property and equipment, was $3.1 million and $5.3 million for the three and six months ended June 30, 2022, respectively, and $1.5 million and $3.0 million for the three and six months ended June 30, 2021, respectively.

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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 June 30,Six Months Ended June 30,
2022202120222021
Services transferred at a point in time:
Flights, net of discounts and incentives$284,071 $212,660 $520,434 $403,134 
Aircraft management58,307 47,594 116,356 96,017 
Other55,789 5,450 62,967 9,739 
Services transferred over time:
Memberships 24,020 16,188 44,667 31,162 
Aircraft management2,411 2,361 4,868 4,818 
Other914 1,327 1,855 2,367 
Total $425,512 $285,580 $751,147 $547,237 
Revenue in the condensed consolidated statements of operations is presented net of discounts and incentives of $3.5 million and $6.7 million for the three and six months ended June 30, 2022, respectively, and $4.3 million and $7.5 million, respectively, for the three and six months ended June 30, 2021.
Contract Balances
Receivables from member and customer contracts are included within accounts receivable, net on the condensed consolidated balance sheets. As of June 30, 2022 and December 31, 2021, gross receivables from members and customers were $106.3 million and $71.8 million, respectively. As of June 30, 2022 and December 31, 2021, undeposited funds, included within accounts receivable, net, were $12.5 million and $13.5 million, respectively. As of June 30, 2022 and December 31, 2021, the allowance for expected credit losses was $4.8 million and $5.9 million, respectively.
Deferred revenue consists of the following (in thousands):
 June 30, 2022December 31, 2021
Flights - Prepaid Blocks and jet cards$989,019 $876,750 
Memberships - annual dues42,886 47,069 
Memberships - initiation fees3,785 4,072 
Flights - credits5,190 6,633 
Other192 960 
Deferred revenue - total 1,041,072 935,484 
Less: Deferred revenue - current (1,039,279)(933,527)
Deferred revenue - non-current $1,793 $1,957 
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Changes in deferred revenue for the six months ended June 30, 2022 were as follows (in thousands):
Deferred revenue - beginning balance$935,484 
Amounts deferred during the period702,882 
Revenue recognized from amounts included in the deferred revenue beginning balance(378,699)
Revenue from current period sales(218,595)
Deferred revenue - ending balance$1,041,072 
Revenue expected to be recognized in future periods for performance obligations that are unsatisfied, or partially unsatisfied, as of June 30, 2022 approximates $338.0 million for the remaining two quarters of 2022 and $452.1 million, $125.7 million and $125.3 million for 2023, 2024 and 2025, respectively.
Costs to Obtain a Contract
Capitalized costs related to sales commissions and referral fees were $5.0 million and $9.3 million for the three and six months ended June 30, 2022, respectively, and $2.3 million and $4.0 million for the three and six months ended June 30, 2021, respectively.
As of June 30, 2022 and December 31, 2021, capitalized sales commissions and referral fees of $10.2 million and $8.6 million, respectively, are in other current assets and $1.6 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 $4.2 million and $7.7 million for the three and six months ended June 30, 2022, respectively, and $1.9 million and $3.5 million for the three and six months ended June 30, 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 $15.5 million in cash. Alante Air added 12 Light jets to our controlled fleet and expands our presence in the Western U.S. 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 six months ended June 30, 2022. The acquisition of Alante Air was determined to be a business combination.
We have allocated the purchase price for Alante Air to its individual assets and liabilities assumed. While the purchase price allocation is substantially complete, it is still preliminary and subject to change. 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 
Goodwill13,069 
Other assets22,048 
Total assets acquired39,569 
Total liabilities assumed(24,101)
Net assets acquired$15,468 
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.
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
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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 $2.6 million, net of intercompany eliminations, and loss from operations was $13.7 million from the date of acquisition through June 30, 2022.
Air Partner plc Acquisition
On April 1, 2022, we acquired all of the outstanding equity of Air Partner plc (“Air Partner”) for a total purchase price of $108.2 million in cash. Air Partner is a United Kingdom-based international aviation services group that provides us with operations in 18 locations across four continents. Acquisition-related costs for Air Partner of $2.9 million were included in general and administrative expense in the condensed consolidated statements of operations for the six months ended June 30, 2022. The acquisition of Air Partner was determined to be a business combination.
As of the date of acquisition, the total preliminary purchase price allocated to the Air Partner assets acquired and liabilities assumed according to their estimated fair values were as follows (in thousands):
Current assets$51,723 
Property and equipment, net2,012 
Operating lease right-of-use assets2,960 
Goodwill83,399 
Intangible assets20,919 
Restricted cash27,507 
Other assets1,536 
Total assets acquired190,056 
Total liabilities assumed(81,865)
Net assets acquired$108,191 
Current assets of Air Partner included $18.0 million of cash and $17.4 million of accounts receivable.
The above initial fair value estimates of the assets acquired and liabilities assumed are provisional. We are still evaluating the fair value of intangible assets, and income taxes, in addition to ensuring all other assets, liabilities and contingencies have been identified and recorded. We have estimated the preliminary fair value of assets acquired and liabilities assumed based on information currently available and will continue to adjust those estimates as additional information pertaining to events or circumstances present at the acquisition date becomes available during the measurement period.
The allocated value of goodwill primarily relates to anticipated synergies and economies of scale by combining the use of Air Partner’s existing business processes with our platform to expand on an international basis. The acquired goodwill is not deductible for tax purposes.
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The amounts allocated to acquired intangible assets and their associated weighted-average amortization periods, which were determined based on the period the assets are expected to contribute directly or indirectly to our cash flows, consist of the following:
Amount
(In thousands)
Weighted-Average Amortization Period
(Years)
Customer relationships$16,521 5.7
Backlog1,457 1.5
Trade name1,930 1.9
Developed technology1,011 5.8
Total acquired intangible assets$20,919 5.1
The intangible asset fair value measurements are primarily based on significant inputs that are not observable in the market which represent a Level 3 measurement (see Note 9). The valuation method used for the Air Partner intangible assets was the income approach.
The results of Air Partner were included in the condensed consolidated statement of operations from the date of acquisition. Revenue for Air Partner was $34.8 million, net of intercompany eliminations, and income from operations was $4.9 million from the date of acquisition through June 30, 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 acquisitions of Alante Air and Air Partner had been completed as of January 1, 2021. The unaudited pro forma financial results for 2022 reflect the results for the three and six months ended June 30, 2022, as well as the effects of pro forma adjustments for the transactions in 2022. The unaudited pro forma financial information includes the accounting effects of the acquisitions, including adjustments to the amortization of intangible assets and professional fees associated with the transactions. The pro forma results were based on estimates and assumptions, which we believe are reasonable but remain subject to adjustment. 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 June 30,Six Months Ended June 30,
2022202120222021
Net revenue$425,512 $316,908 $788,966 $605,114 
Net loss$(91,443)$(27,450)$(179,132)$(61,477)
Net loss attributable to Wheels Up Experience Inc. $(91,443)$(24,798)$(178,756)$(55,846)
Net loss per share$(0.37)$(0.15)$(0.73)$(0.33)

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7.    GOODWILL AND INTANGIBLE ASSETS
Goodwill
The change in the carrying value of goodwill for the six months ended June 30, 2022, was as follows (in thousands):
Balance as of December 31, 2021$437,398 
Acquisition of Alante Air13,069 
Acquisition of Air Partner83,399 
Foreign currency translation adjustments(5,539)
Balance as of June 30, 2022$528,327 
Intangible Assets
The gross carrying value, accumulated amortization and net carrying value of intangible assets consisted of the following (in thousands):
June 30, 2022
Gross Carrying
Value
Accumulated AmortizationNet Carrying
Value
Status$80,000 $19,644 $60,356 
Customer relationships89,880 19,081 70,799 
Non-competition agreement210 210  
Trade name16,015 6,761 9,254 
Developed technology20,480 7,831 12,649 
Leasehold interest - favorable 600 69 531 
Backlog1,348 271 1,077 
Total $208,533 $53,867 $154,666 
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 $6.5 million and $11.7 million for the three and six months ended June 30, 2022, respectively, and $5.3 million and $10.6 million for the three and six months ended June 30, 2021, respectively.
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Intangible Liabilities
The gross carrying value, accumulated amortization and net carrying value of intangible liabilities consisted of the following (in thousands):
June 30, 2022
Gross Carrying
Value
Accumulated AmortizationNet Carrying
Value
Intangible liabilities$20,000 $4,917 $15,083 
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 $1.0 million for the three and six months ended June 30, 2022, respectively, and $0.5 million and $1.0 million for the three and six months ended June 30, 2021, respectively.
Future amortization expense of intangible assets and intangible liabilities held as of June 30, 2022, are as follows (in thousands):
Year ending December 31, Intangible AssetsIntangible Liabilities
2022$