SEC Info - Wheels Up Experience Inc. - ‘10-K’ for 12/31/23

WHEELS UP EXPERIENCE INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


	December 31, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	i 263,909	$	i 585,881
Accounts receivable, net	i 38,237		i 112,383
Other receivables	i 11,528		i 5,524
Parts and supplies inventories, net	i 20,400		i 29,000
Aircraft inventory	i 1,862		i 24,826
Aircraft held for sale	i 30,496		i 8,952
Prepaid expenses	i 55,715		i 39,715
Other current assets	i 11,887		i 13,338
Total current assets	i 434,034		i 819,619
Property and equipment, net	i 337,714		i 394,559
Operating lease right-of-use assets	i 68,910		i 106,735
Goodwill	i 218,208		i 348,118
Intangible assets, net	i 117,766		i 141,765
Restricted cash	i 28,916		i 34,272
Other non-current assets	i 110,512		i 78,157
Total assets	$	i 1,316,060	$	i 1,923,225
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	i 23,998	$	i 27,006
Accounts payable	i 32,973		i 43,166
Accrued expenses	i 102,475		i 148,947
Deferred revenue, current	i 723,246		i 1,075,133
Operating lease liabilities, current	i 22,869		i 29,945
Intangible liabilities, current	i 1,525		i 2,000
Other current liabilities	i 416		i 18,023
Total current liabilities	i 907,502		i 1,344,220
Long-term debt, net	i 235,074		i 226,234
Deferred revenue, non-current	i 983		i 1,742
Operating lease liabilities, non-current	i 54,956		i 82,755
Warrant liability	i 12		i 751
Intangible liabilities, non-current	i 10,677		i 12,083
Other non-current liabilities	i 6,983		i 3,520
Total liabilities	i 1,216,187		i 1,671,305
Commitments and contingencies (Note 15)	i		i
Mezzanine equity:
Executive performance award	i 2,476		i —
Total mezzanine equity	i 2,476		i —
Stockholders’ equity:


Common stock, $ i i 0.0001 / par value; i i 1,500,000,000 / authorized; i 697,131,838 and i 25,198,298 shares issued and i 696,856,131 and i 24,933,857 common shares outstanding as of as of December 31, 2023 and December 31, 2022, respectively	i 70		i 3
Additional paid-in capital	i 1,879,009		i 1,545,530
Accumulated deficit	( i 1,763,260)		( i 1,275,873)
Accumulated other comprehensive loss	( i 10,704)		( i 10,053)
Treasury stock, at cost, i 275,707 and i 264,441 shares, respectively	( i 7,718)		( i 7,687)
Total Wheels Up Experience Inc. stockholders’ equity	i 97,397		i 251,920
Non-controlling interests	i —		i —
Total stockholders’ equity	i 97,397		i 251,920
Total liabilities and equity	$	i 1,316,060	$	i 1,923,225

The accompanying notes are an integral part of these consolidated financial statements.

WHEELS UP EXPERIENCE INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

Year Ended December 31,

2023

2022

2021

Revenue

i 1,253,317

i 1,579,760

i 1,194,259

Costs and expenses:

Cost of revenue (exclusive of items shown separately below)

i 1,232,506

i 1,540,325

i 1,117,633

Technology and development

i 61,873

i 57,240

i 33,579

Sales and marketing

i 88,828

i 117,110

i 80,071

General and administrative

i 145,873

i 183,531

i 113,331

Depreciation and amortization

i 58,533

i 65,936

i 54,198

Gain on sale of aircraft held for sale

( i 16,939)

( i 4,375)

( i 1,275)

Impairment of goodwill

i 126,200

i 180,000

i —

Total costs and expenses

i 1,696,874

i 2,139,767

i 1,397,537

Loss from operations

( i 443,557)

( i 560,007)

( i 203,278)

Other income (expense):

Change in fair value of warrant liability

i 739

i 9,516

i 17,951

Loss on divestiture

( i 2,991)

i —

Loss on extinguishment of debt

( i 4,401)

i —

( i 2,379)

Interest income

i 6,121

i 3,670

i 53

Interest expense

( i 41,255)

( i 7,515)

( i 9,519)

Other expense, net

( i 660)

( i 1,041)

i —

Total other income (expense)

( i 42,447)

i 4,630

i 6,106

Loss before income taxes

( i 486,004)

( i 555,377)

( i 197,172)

Income tax expense

( i 1,383)

( i 170)

( i 58)

Net loss

( i 487,387)

( i 555,547)

( i 197,230)

Less: Net loss attributable to non-controlling interests

i —

( i 387)

( i 7,210)

Net loss attributable to Wheels Up Experience Inc.

( i 487,387)

( i 555,160)

( i 190,020)

Net loss per share of Common Stock:

Basic and Diluted

( i i 3.69 / )

( i i 22.60 / )

( i i 9.28 / )

Weighted-average shares of Common Stock outstanding:

Basic and Diluted

i i 132,194,747 /

i i 24,567,164 /

i i 20,478,090 /

The accompanying notes are an integral part of these consolidated financial statements.

WHEELS UP EXPERIENCE INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

Year Ended December 31,

2023

2022

2021

Net loss

( i 487,387)

( i 555,547)

( i 197,230)

Other comprehensive loss:

Foreign currency translation adjustments

( i 651)

( i 10,053)

i —

Comprehensive loss

( i 488,038)

( i 565,600)

( i 197,230)

Less: Comprehensive loss attributable to non-controlling interests

i —

( i 387)

( i 7,210)

Comprehensive loss attributable to Wheels Up Experience Inc.

( i 488,038)

( i 565,213)

( i 190,020)

The accompanying notes are an integral part of these consolidated financial statements.

WHEELS UP EXPERIENCE INC.

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands, except share data)

Common Stock

Treasury Stock

(in thousands)

Amount

Additional paid-in capital

Accumulated
deficit

Accumulated
other comprehensive loss

Amount

Non-controlling interests

Total

Balance at December 31, 2020

i 16,971,715

i 1

i 798,493

( i 530,693)

i —

i 26,025

i 293,826

Consideration issued for business combinations

i 396,890

—

i 30,172

—

i 30,172

Exercise of stock options

i 35,205

—

i 2,107

—

i 2,107

Exchange of profits interests

i 19,937

—

i 1,866

—

( i 1,866)

i —

Equity-based compensation

—

i 32,433

—

i 17,240

i 49,673

Issuance of Common Stock in connection with Business Combination and PIPE Investment

i 7,159,710

i 1

i 656,303

—

i 656,304

Transaction costs attributable to the issuance of common stock in connection with Business Combination and PIPE Investment

—

( i 70,406)

—

( i 70,406)

Balance at Acquisition of warrant liabilities

—

( i 28,219)

—

( i 28,219)

Change in non-controlling interests allocation

—

i 28,112

—

( i 28,112)

i —

Net loss

—

( i 190,020)

—

( i 7,210)

( i 197,230)

Balance at December 31, 2021

i 24,583,457

i 2

i 1,450,861

( i 720,713)

i —

i 6,077

i 736,227

Equity-based compensation

—

i 54,549

—

i 34,430

i 88,979

Change in non-controlling interests allocation

—

i 40,120

—

( i 40,120)

i —

Shares withheld for employee taxes on vested equity awards

—

i 264,441

( i 7,687)

—

( i 7,687)

Issuance of Common Stock upon settlement of restricted stock units

i 614,841

i 1

—

i 1

Net loss

—

( i 555,160)

—

( i 387)

( i 555,547)

Other comprehensive loss

—

( i 10,053)

—

( i 10,053)

Balance at December 31, 2022

i 25,198,298

i 3

i 1,545,530

( i 1,275,873)

( i 10,053)

i 264,441

( i 7,687)

i —

i 251,920

Equity-based compensation

—

i 21,881

—

i 1,276

i 23,157

Change in non-controlling interests allocation

—

i 1,276

—

( i 1,276)

i —

Issuance of Common Stock in connection with debt issuance

i 671,239,941

i 67

i 310,322

—

i 310,389

Reverse stock split fractional shares

—

i 859

( i 3)

—

( i 3)

Shares withheld for employee taxes on vested awards

—

i 10,407

( i 28)

—

( i 28)

Issuance of Common Stock upon settlement of restricted stock units

i 693,599

—

Net loss

—

( i 487,387)

—

( i 487,387)

Other comprehensive loss

—

( i 651)

—

( i 651)

Balance at December 31, 2023

i 697,131,838

i 70

i 1,879,009

( i 1,763,260)

( i 10,704)

i 275,707

( i 7,718)

i —

i 97,397

The accompanying notes are an integral part of these consolidated financial statements.

WHEELS UP EXPERIENCE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Year Ended December 31,

2023

2022

2021

OPERATING ACTIVITIES:

Net loss

( i 487,387)

( i 555,547)

( i 197,230)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Depreciation and amortization

i 58,533

i 65,936

i 54,198

Amortization of deferred financing costs and debt discount

i 329

i 766

i 618

Payment in kind interest

i 10,453

i —

Equity-based compensation

i 25,633

i 88,979

i 49,673

Change in fair value of warrant liability

( i 739)

( i 9,516)

( i 17,951)

Provision for expected credit losses

i 1,705

i 8,129

i 3,264

Loss on divestiture

i 2,991

i —

Loss on extinguishment of debt

i 4,401

i —

i 2,379

Gain on sale of aircraft held for sale

( i 16,939)

( i 4,375)

i —

Impairment of goodwill

i 126,200

i 180,000

i —

Other

i 5,825

i 1,575

i —

Changes in operating assets and liabilities, net of effects from acquisitions:

Accounts receivable

i 30,062

( i 23,946)

( i 21,923)

Other receivables

( i 3,164)

i 2,537

i 144

Parts and supplies inventories

i 4,686

( i 21,693)

( i 3,418)

Aircraft inventory

i 11,010

( i 29,470)

i —

Prepaid expenses

( i 17,315)

( i 3,058)

( i 11,360)

Other non-current assets

( i 32,289)

( i 41,555)

( i 34,218)

Operating lease liabilities, net

( i 552)

( i 490)

( i 1,949)

Accounts payable

( i 8,089)

( i 9,702)

i 13,116

Accrued expenses

( i 35,110)

i 19,143

i 14,616

Deferred revenue

( i 348,419)

i 103,313

i 278,827

Other current assets and liabilities

i 2,890

( i 1,715)

( i 2,296)

Net cash (used in) provided by operating activities

( i 665,285)

( i 230,689)

i 126,490

INVESTING ACTIVITIES:

Purchases of property and equipment

( i 20,168)

( i 83,559)

( i 15,234)

Acquisition of businesses, net of cash acquired

i —

( i 75,093)

i 7,844

Proceeds from sale of divested business

i 13,200

i —

Purchases of aircraft held for sale

( i 4,240)

( i 40,105)

( i 31,669)

Proceeds from sale of aircraft held for sale, net

i 68,308

i 51,208

i 13,568

Other

i 267

i —

Capitalized software development costs

( i 16,497)

( i 27,693)

( i 13,179)

Net cash provided by (used in) investing activities

i 40,870

( i 175,242)

( i 38,670)

FINANCING ACTIVITIES:

Proceeds from stock option exercises

i —

i 2,107

Purchase of shares for treasury

( i 28)

( i 7,687)

i —

Purchase of fractional shares

( i 3)

i —

Proceeds from Business Combination and PIPE Investment

i —

i 656,304

Transaction costs in connection with the Business Combination and PIPE Investment

i —

( i 70,406)

Proceeds from notes payable

i 70,000

i —

Repayment of notes payable

( i 70,000)

i —

Proceeds from long-term debt

i 382,200

i 259,200

i —

Payment of debt issuance costs

( i 21,692)

( i 6,727)

i —

Repayments of long-term debt

( i 59,523)

i —

( i 214,081)

Loans to employees

i —

i 102

Net cash provided by financing activities

i 300,954

i 244,786

i 374,026

Effect of exchange rate changes on cash

( i 3,867)

( i 5,424)

i —

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

( i 327,328)

( i 166,569)

i 461,846

CASH, CASH EQUIVALENTS AND RESTRICTED CASH BEGINNING OF PERIOD

i 620,153

i 786,722

i 324,876

CASH, CASH EQUIVALENTS AND RESTRICTED CASH END OF PERIOD

i 292,825

i 620,153

i 786,722

CASH PAID DURING THE PERIOD FOR:

Interest

i 31,397

i —

i 11,661

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Non-cash consideration issued for business acquisition of Mountain Aviation, LLC

i —

i 30,172

Assumption of warrant liability in Business Combination

i —

i 28,219

Non-cash issuance of Common Stock in connection with debt issuance

i 310,322

i —

The accompanying notes are an integral part of these consolidated financial statements.

WHEELS UP EXPERIENCE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. i ORGANIZATION AND OPERATIONS

Wheels Up Experience Inc. (together with its consolidated subsidiaries, “Wheels Up”, the “Company”, “our”, “we”, and “us”) is a leading provider of on-demand private aviation in the United States (“U.S.”) and one of the largest companies in the industry.

2021 Business Combination

On July 13, 2021 (the “Business Combination Closing Date”), we consummated the transactions contemplated by the Agreement and Plan of Merger (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 Business Combination 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).

Reverse Stock Split

Immediately after the close of business on the New York Stock Exchange (the “NYSE”) on June 7, 2023, we effected the reverse stock split of the outstanding shares of our Class A common stock, $ i 0.0001 par value per share (“Common Stock”), at a reverse stock split ratio of 1-for-10 (the “Reverse Stock Split”) and contemporaneously with the Reverse Stock Split, a proportionate reduction in the number of authorized shares of Common Stock from i 2.5 billion shares of Common Stock to i 250 million shares (the “Authorized Share Reduction”). Accordingly, the presentation of all periods covered by the consolidated financial statements contained herein have been adjusted to give retroactive effect to the Reverse Stock Split, including adjustments to per share net loss and other share and per share of Common Stock amounts

2023 Credit Facility & Common Stock Issuances

On September 20, 2023 (the “Credit Agreement Closing Date”), the Company entered into a Credit Agreement (the “Credit Agreement”), by and among the Company, as borrower, certain subsidiaries of the Company as guarantors (collectively with the Company, the “Loan Parties”), Delta Air Lines, Inc. (“Delta”), CK Wheels LLC (“CK Wheels”), and Cox Investment Holdings, Inc. (“CIH” and collectively with Delta and CK Wheels, the “Lenders”), and U.S. Bank Trust Company, N.A., as administrative agent for the Lenders and as collateral agent for the secured parties, pursuant to which (i) the Lenders provided a term loan facility (the “Initial Term Loan”) in the aggregate original principal amount of $ i 350.0 million and (ii) Delta provided commitments for a revolving loan facility (the “Revolving Credit Facility”) in the aggregate original principal amount of $ i 100.0 million.

On November 15, 2023 (the “Final Closing Date”), the Company entered into Amendment No. 1 to Credit Agreement (the “Credit Agreement Amendment” and together with the Original Credit Agreement, the “Credit Agreement”), by and among the Company, as borrower, the other Loan Parties party thereto, as guarantors, the Initial Lenders, each of Whitebox Multi-Strategy Partners, LP, Whitebox Relative Value Partners, LP, Pandora Select Partners, LP, Whitebox GT Fund, LP and Kore Fund Ltd (collectively, the “Incremental Term Lenders” and together with the Initial Lenders, the “Lenders”), and the Agent, pursuant to which, among other things, the Incremental Term Lenders joined the Credit Agreement and provided an additional term loan facility (the “Incremental Term Loan” and together with the Initial Term Loan, the “Term Loan”) in the aggregate original principal amount of $ i 40.0 million. Upon the closing of the Incremental Term Loan, the Credit Facility consisted of (i) the Term Loan in the aggregate principal amount of $ i 390.0 million and (ii) the Revolving Credit Facility in the aggregate original principal amount of $ i 100.0 million (see Note 9).

In connection with the funding of the Initial Term Loan, the Company entered into the Investment and Investor Rights Agreement, dated as of the First Closing Date (the “Original Investor Rights Agreement”), by and among the Company and the Initial Lenders. Pursuant to the Original Investor Rights Agreement, the Company issued to the Initial Lenders i 141,313,671 shares in the aggregate (the “Initial Shares”) of Common Stock in a private placement (the “Initial Issuance”). In addition, the Company agreed to issue an additional i 529,926,270 shares in the aggregate (the “Deferred Shares” and, together with the Initial Shares, the “Investor Shares”) of Common Stock (the “Deferred Issuance” and together with the Initial Issuance, the “Investor Issuances”).

On November 9, 2023, the Company’s stockholders approved, at a special meeting of the Company’s stockholders (the “2023 Special Meeting”), the Amended and Restated Certificate of Incorporation of Wheels Up, filed with the Secretary of State of the State of Delaware on November 15, 2023 (the “Amended and Restated Certificate of Incorporation”), which, among other things, increased the number of shares of Common Stock available for issuance thereunder. In connection with the transactions contemplated by the Credit Agreement Amendment, the Company entered into Amendment No. 1 to Investment and Investor Rights Agreement, dated as of the Final Closing Date (the “Investor Rights Agreement Amendment” and together with the Original Investor Rights Agreement, the “Investor Rights Agreement”), with each Initial Lender, which contained, among others, certain revisions to reflect the issuance of the Deferred Shares. Substantially concurrently with entering into the Investor Rights Agreement Amendment, on the Final Closing Date, the Company and Initial Lenders entered into joinders to the Investor Rights Agreement (collectively, the “Investor Rights Agreement Joinders”) with each Incremental Term Lender (or its applicable affiliate), pursuant to which each Incremental Term Lender (or its applicable affiliate) joined the Investor Rights Agreement and assumed the rights and obligations of an Additional Investor (as defined in the Investor Rights Agreement) thereunder, including the right to receive a pro rata portion of the Investor Shares. The Company issued the Deferred Shares to the Lenders on the Final Closing Date in a private placement. The Investor Shares were issued in private placements such that after the Investor Issuances, each Lender was issued a number of shares equal to its pro rata portion of the Investor Shares based on its participation in the Term Loan (see Note 9).

2. i SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The consolidated financial statements include the accounts of Wheels Up Experience Inc. and its wholly-owned subsidiaries, after elimination of intercompany transactions and accounts. 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).

Liquidity

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the ordinary course of business.

As disclosed on August 14, 2023, in the notes to the consolidated financial statements for the interim period ended June 30, 2023, the Company experienced various adverse conditions that raised substantial doubt about the Company’s ability to continue as a going concern. These adverse conditions included insufficient liquidity, a working capital deficit, net operating cash outflows, recurring losses from operations, and the applicability of certain liquidity covenants in connection with the Equipment Notes (as defined in Note 9).

Subsequent to August 14, 2023, we obtained funding as discussed in Note 9, Long-Term Debt, amended the Equipment Notes to reduce liquidity covenant requirements and divested the non-core aircraft management business as discussed in Note 6, Acquisitions and Divestitures. During the third and fourth quarters of 2023, we began to realize the impacts of our spend reduction efforts, as a result of the restructuring and operational changes implemented throughout 2023. We have concluded that these events and circumstances, and continued execution of our previously implemented plans, have alleviated the conditions that previously raised substantial doubt about our ability to continue as a going concern.

Use of Estimates

Preparing the 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 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. 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.

Fair Value Measurements

The carrying values of cash and cash equivalents, accounts receivable, deferred revenue and accounts payable approximate fair value due to either the short-term nature of such instruments or the fact that the interest rate of the long-term debt is based upon current market rates.

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 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.

The determination of where an asset or liability falls in the hierarchy requires significant judgment. When developing fair value estimates, we maximize the use of observable inputs and minimize the use of unobservable inputs. When available, the estimated fair value of financial instruments is based on quoted prices in active markets that are available on the measurement date. If quoted prices in active markets are not available, the determination of estimated fair value is based on standard market valuation methodologies, giving priority to observable inputs. To the extent that the valuation is based on models or inputs that are unobservable in the market, the determination of fair value requires management to exercise a high degree of judgment. Changes in significant unobservable inputs could result in a higher or lower fair value measurement of the associated assets and liabilities.

The following methods and assumptions were used to estimate the fair value of each class of financial assets and liabilities for which it is practicable to estimate fair value:

•Cash equivalents — The carrying amount of money market funds approximates fair value and is classified within Level 1 because we determined the fair value through quoted market prices.

•Long-term debt — We utilized Level 2 or 3 inputs to determine the fair value, as deemed appropriate.

•Warrant liability — Public Warrants (as defined below) are classified within Level 1 as these securities are traded on an active market. Private Warrants (as defined below) are classified within Level 2. We utilized the value of the Public Warrants as an approximation of the value of the Private Warrants as they are substantially similar to the Public Warrants, but not directly traded or quoted on an active market.

Certain non-financial assets are measured at fair value on a non-recurring basis, including property and equipment, goodwill and intangible assets. These assets are subject to fair value adjustments in certain circumstances, such as when there is evidence of an impairment.

Cash Equivalents

Cash equivalents consist of highly liquid investments that are readily convertible into cash. We consider securities with initial maturities of three months or less, when purchased, to be cash equivalents.

Restricted Cash

Restricted cash is pledged as security for letters of credit and also includes cash and cash equivalents that are unavailable for immediate use due to contractual restrictions. We classify restricted cash as current or non-current based on the remaining term of the restriction.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable, net, primarily consists of contractual amounts we expect to collect from members and customers related to membership subscriptions and flights, including amounts currently due from credit card companies. We record accounts receivable at the original invoiced amount.

We monitor exposure for losses and maintain an allowance for credit losses for any receivables that may be uncollectible. We estimate uncollectible receivables based on the receivable’s age, customer credit-worthiness, past transaction history with the customer, changes in payment terms and the condition of the general economy and the industry as a whole. When it is determined that the amounts are not recoverable, the receivable is written off against the allowance. i Changes in the allowance for credit losses from December 31, 2021 to December 31, 2023 were as follows (in thousands):


	Amount
Balance as of December 31, 2021	$	i 5,918
Current period provision	i 8,129
Write-offs, net and other	( i 4,065)
Balance as of December 31, 2022	i 9,982
Current period provision	i 1,705
Write-offs, net and other	( i 3,823)
Balance as of December 31, 2023	$	i 7,864

Concentration of Credit Risk

Financial instruments that may potentially expose us to concentrations of credit risk primarily consist of cash, cash equivalents, restricted cash and receivables. We place cash and cash equivalents with financial institutions that

we believe have high credit quality. To the extent that our international cash holdings increase or decrease in the future, our exposure to fluctuations in foreign currency exchange rates may correspondingly increase or decrease and could have a material adverse effect on our business, financial condition or results of operations. Accounts are guaranteed by the Federal Deposit Insurance Corporation up to certain limits and although deposits are held with multiple financial institutions, deposits at times may exceed the federally insured limits. We have not experienced any losses in such accounts.

Accounts receivable are spread over many members and customers. We monitor credit quality on an ongoing basis and maintain reserves for estimated credit losses. There were no customers that accounted for 10% or more of accounts receivable as of December 31, 2023 and 2022.

There were no customers that accounted for 10% or more of revenue for the years ended December 31, 2023, 2022 and 2021.

Parts and Supplies Inventories

Inventories are used in operations and are generally not for sale. Inventories are comprised of spare aircraft parts, materials and supplies, which are valued at the lower of cost or net realizable value. Cost of inventories are determined using the specific identification method. We determine, based on the evidence that exists, whether or not it is appropriate to maintain a reserve for excess and obsolete inventory. The reserve is based on historical experience related to the disposal of inventory due to damage, physical deterioration, obsolescence or other causes. As of each of December 31, 2023 and 2022, the reserve was not material. Storage costs and indirect administrative overhead costs related to inventories are expensed as incurred.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets include security deposits, which relate primarily to contractual prepayments to third-parties for future services, the current portion of capitalized costs related to sales commissions and referral fees and insurance claims receivable.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization for all property and equipment are calculated using the straight-line method over the estimated useful lives of the related assets. Residual values estimated for aircraft are approximately i 50% of the original purchase price. Expenditures that increase the value or productive capacity of assets are capitalized, and repairs and maintenance are expensed as incurred. The estimated useful lives of property and equipment are principally as follows: aircraft — i seven years, furniture and fixtures — i three years, vehicles — i five years, building and improvements — i 27 years, computer equipment — i three years and tooling — i ten years. Leasehold improvements are amortized over the shorter of either the estimated useful life of the asset or the remaining term of the lease (see Note 4).

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Software Development Costs

We incur costs related to developing the Wheels Up website, mobile application and other internal use software. The amounts capitalized include employees’ payroll and payroll-related costs, directly associated with the development activities, as well as external direct costs of services used in developing the software. We amortize capitalized costs using the straight-line method over the estimated useful life, which is currently i three years, beginning when the software is ready for its intended use. Costs incurred during the preliminary project and post-implementation stages are expensed as incurred.

Leases

We determine if an arrangement is a lease at inception on an individual contract basis. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current, and operating lease liabilities, non-current, on the consolidated balance sheets. Operating lease right-of-use assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments

arising from the lease. Operating lease right-of-use assets and operating lease liabilities are recognized at lease commencement date based on the present value of the future minimum lease payments over the lease term. The interest rate implicit in our leases is not readily determinable to discount lease payments. As a result, for all leases, we use an incremental borrowing rate that is based on the estimated rate of interest for a collateralized borrowing of a similar asset, using a similar term as the lease payments at the commencement date.

The operating lease right-of-use assets and operating lease liabilities include any lease payments made, including any variable amounts that are based on an index or rate, and exclude lease incentives. Variability that is not due to an index or rate, such as payments made based on hourly rates, are excluded from the lease liability. Lease terms may include options to extend or terminate the lease. Renewal option periods are included within the lease term and the associated payments are recognized in the measurement of the operating right-of-use asset and operating lease liability when they are at our discretion and considered reasonably certain of being exercised. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

We have elected the practical expedient not to recognize leases with an initial term of 12 months or less on our consolidated balance sheets and associated lease expense is recognized on a straight-line basis over the term of the lease. For real estate leases, we have elected the practical expedient to account for both the lease and non-lease components as a single lease component and not allocate the consideration in the contract. Certain real estate leases contain fixed lease payments that include real estate taxes, common area maintenance and insurance. These fixed payments are considered part of the lease payment and are included in the operating lease right-of-use assets and operating lease liabilities. For non-real estate leases, including aircraft, we have separated the lease and non-lease components. The non-lease components of aircraft leases are typically for maintenance services and insurance that are expensed as incurred (see Note 12).

Impairment of Long-Lived Assets

Long-lived assets consist of aircraft, including aircraft held for sale, property and equipment, finite-lived intangible assets and operating lease right-of-use assets. We review the carrying value of long-lived assets for impairment when events and circumstances indicate that the carrying value may not be recoverable based on the estimated undiscounted future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value of the asset or asset group, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of the asset or asset group.

During the second and third quarters of 2023, there were indications that the carrying value of the long-lived assets associated with the WUP Legacy (as defined below) reporting unit may not be recoverable (See Note 7 for further discussion on triggering events). As a result, we performed an undiscounted cash flow analysis of our long-lived assets for potential impairment as of June 1, 2023 and September 20, 2023. Based on the analyses, it was determined that there was i no impairment to our long-lived assets.

i Acquisitions

We account for business combinations and asset acquisitions using the acquisition method of accounting, which requires allocation of the purchase price to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date. For acquisitions meeting the definition of a business combination, the excess of the purchase price over the amounts recognized for assets acquired and liabilities assumed is recorded as goodwill. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed in a business combination with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the consolidated statements of operations. Acquisition costs, such as legal and consulting fees, are expensed as incurred for business combinations.

For acquisitions meeting the definition of an asset acquisition, the fair value of the consideration transferred, including transaction costs, is allocated to the assets acquired and liabilities assumed based on their relative fair values. No goodwill is recognized in an asset acquisition.

Goodwill

Goodwill represents the excess of the consideration transferred over the fair value of the identifiable assets acquired and liabilities assumed in business combinations. The carrying value of goodwill is tested for impairment on an annual basis or on an interim basis if events or changes in circumstances indicate that an impairment loss may have occurred (i.e., a triggering event). Our annual goodwill impairment testing date is October 1st. The test for goodwill is performed at the reporting unit level. Subsequent to acquisition, we determined that Air Partner represents a new reporting unit for the purposes of assessing potential impairment of goodwill, and therefore the private aviation services operating segment, our only reportable segment, was divided into i two reporting units, the Air Partner reporting unit and the legacy Wheels Up reporting unit (“WUP Legacy”).

Goodwill impairment is the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. We use both qualitative and quantitative approaches when testing goodwill for impairment. Our qualitative approach evaluates various events including, but not limited to, macroeconomic conditions, changes in the business environment in which we operate and other specific facts and circumstances. If, after assessing qualitative factors, we determine that it is more-likely-than-not that the fair value of a reporting unit is greater than its carrying value, then performing a quantitative impairment assessment is unnecessary and the reporting unit is not considered to be impaired. However, if based on the qualitative assessment we cannot conclude that it is more-likely-than-not that the fair value of the reporting unit exceeds its carrying value, or if we elect to bypass the optional qualitative assessment approach, we proceed with performing the quantitative impairment assessment using a discounted cash flow model, or income approach, and relevant data from guideline public companies, or market approach, to quantify the amount of impairment, if any (see Note 7).

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Intangible Assets

Intangible assets other than goodwill primarily consist of acquired finite-lived trade names, customer relationships and developed technology. At initial recognition, intangible assets acquired in a business combination are recognized at their fair value as of the date of acquisition. Following initial recognition, intangible assets are carried at cost less accumulated amortization and impairment losses, if any, and are amortized on a straight-line basis over the estimated useful life of the asset, which was determined based on management’s estimate of the period over which the asset will contribute to our future cash flows (see Note 7).

We evaluate the remaining useful life of our intangible assets each reporting period to determine whether events and circumstances warrant a revision to the remaining period of amortization. If the estimate of an intangible asset's remaining useful life is changed, the remaining carrying amount of the intangible asset will be amortized prospectively over that revised remaining useful life. In connection with entering into the Investor Rights Agreement, the Company and Delta entered into Amendment No. 2 to Commercial Cooperation Agreement, dated as of September 21, 2023 (collectively with the Commercial Cooperation Agreement, dated as of January 17, 2020, and Amendment No. 1 thereto, dated as of March 15, 2021, in each case with Delta, the “CCA”), which extended the term of the CCA to September 20, 2029. Certain of our intangible assets were initially valued based on the terms of the original CCA. As a result, we revised the estimated useful life of those assets to reflect the extended contract term.

Other Current Liabilities

Other current liabilities consist of deposits from owners for managed aircraft. Deposits are collected at the inception of the contract with each owner and returned on the contract termination date, to the extent there are no outstanding payments due at such time.

Warrant Liability

We determine if warrants are equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether warrants meet

all of the requirements for equity classification under ASC 815, including whether warrants are indexed to our Common Stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all of the criteria for equity classification, warrants are required to be recorded as a liability at their fair value on the date of issuance and each balance sheet date thereafter. Changes in the estimated fair value of warrants are recognized as an unrealized gain or loss.

We recorded the Private Warrants and Public Warrants (as each term is defined below) assumed as part of the Business Combination (see Note 3, Note 9 and Note 1 9) as liabilities.

Deferred Offering Costs

We capitalized certain legal, accounting and other direct third-party costs related to the Business Combination (see Note 3). Deferred offering costs were included as an asset on the consolidated balance sheets and were deferred until the Business Combination Closing Date, at which time they were deducted from additional paid-in capital of the combined business.

Revenue

We determine revenue recognition through the following steps:

•Identification of the contract, or contracts, with a customer;

•Identification of the performance obligations in the contract;

•Determination of the transaction price;

•Allocation of the transaction price to the performance obligations in the contract; and

•Recognition of revenue when, or as, a performance obligation is satisfied.

For the periods presented in the consolidated statements of operations contained herein, revenue is derived from a variety of sources including, (i) memberships, (ii) flights, (iii) aircraft management and (iv) other.

Revenue is recorded net of discounts on standard pricing and incentive offerings including special pricing agreements and certain promotions.

Deferred revenue is an obligation to transfer services to a customer for which we have already received consideration. Upon receipt of a prepayment from a customer for all or a portion of the transaction price, we initially recognize a contract liability. The contract liability is settled, and revenue is recognized, when we satisfy our performance obligation to the customer at a future date.

(i) Memberships

Wheels Up membership agreements are signed by each member. Wheels Up membership agreements together with the terms and conditions in the flight services agreement govern the use of the Wheels Up membership. We account for a contract when both parties have approved and are committed to perform their obligations, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable.

New members are typically charged a one-time initiation fee at the commencement of their membership, which is generally non-refundable. In the first year of membership, a portion of the initiation fee is applied to their annual dues. The remainder of the initiation fee, less any flight credits, is deferred and recognized on a straight-line basis over the estimated duration of the customer relationship period, which is estimated to be approximately i three years.

Members are charged recurring annual dues to maintain their membership. Revenue related to the annual dues is deferred and recognized on a straight-line basis over the related contractual period, which is generally but not always i 12 months. If a customer qualifies to earn SkyMiles (as defined below) as part of their membership, then a portion of the transaction price is allocated to this performance obligation at contract inception. The amount of the allocation is determined based on our contractual cost for SkyMiles purchases with Delta. If at any time the membership is terminated, any previously unrecognized amounts are recognized in the period of termination.

(ii) Flights

Flights and flight-related services, along with the related costs of the flights, are earned and recognized as revenue at the point in time in which the service is provided. For round trip flights, revenue is recognized upon arrival at the destination for each flight segment. In addition to retail flights, we also have flight service agreements to sell wholesale flights to customers that are non-members and do not pay annual dues or initiation fees.

Members pay a fixed quoted amount for flights. The amount can be based on a contractual capped or fixed rate or dynamically priced based on market demand at time of booking. Wholesale customers primarily pay a fixed rate for flights. In addition, flight costs can be paid by members through the purchase of dollar-denominated credits that can be applied to future costs incurred by members, including flight services, annual dues, and other incidental costs such as catering and ground transportation (“Prepaid Blocks”). Prepaid Blocks are deferred and recognized as revenue when the member completes a flight segment. Prepaid Blocks also can generally be used to purchase commercial flights on Delta. Wheels Up, acting in the capacity of an agent, charges the member a ticketing fee to use their commingled funds on a flight provided by Delta, which is recorded on a net basis at the time of booking.

In addition, Wheels Up provides Medallion Status (“Status”) in Delta’s SkyMiles® Program (“SkyMiles”) for purchases of Prepaid Blocks. A member is granted Status free of charge for use during the term of the contract and may assign the Status to any designated individual. A member can use their SkyMiles for purchases of Prepaid Blocks, but they do not earn SkyMiles on Wheels Up flights. Any members that meet the designated spend thresholds for Prepaid Blocks or the designated dollar-denominated flight spend thresholds during the year receive the same Status. We do not owe Delta any consideration for the grant of each Status provided. Status is not a material right at contract inception and does not give rise to a separate performance obligation. The provided Status is not recognized as revenue, but instead is considered a marketing incentive related to future purchases on Delta.

Revenue and the associated costs are recognized on a net basis when acting as an agent to arrange for services to be provided by another party, including acting as an intermediary ticketing agent for travel as part of the CCA with Delta and when managed aircraft owners charter their own aircraft. Members can use Prepaid Blocks (defined below) to purchase commercial flights on Delta. Wheels Up charges the member a ticketing fee to use their funds with Delta, which is recorded on a net basis in revenue at the time of booking. Wheels Up passes along the fulfillment of the performance obligation to Delta who actually provides the flight to the member. Owner charter revenue is recognized for flights where the owner of a managed aircraft sets the price for the trip. Wheels Up records owner charter revenue at the time of flight on a net basis for the margin we receive to operate the aircraft.

(iii) Aircraft Management

We generate fee revenue under management agreements with third-party aircraft owners, which includes the recovery of owner incurred expenses including maintenance coordination, cabin crew and pilots, as well as recharging of certain incurred aircraft operating costs and expenses such as maintenance, fuel, landing fees, parking and other related operating costs. We pass the recovery and recharge costs back to owners at either cost or a predetermined margin. Aircraft management related revenue contains two types of performance obligations. One performance obligation is to provide management services over the contract period. Revenue earned from management services is recognized over the contractual term, on a monthly basis. The second performance

obligation is the cost to operate and maintain the aircraft, which is recognized as revenue at the point in time such services were completed.

On September 30, 2023, we completed the sale of our non-core aircraft management business to an unrelated third party. We do not expect to recognize any significant revenue or expenses associated with aircraft management activities in future periods.

(iv) Other

Ground Services

Fixed-base operator (“FBO”) ground services are provided for aircraft customers that use our facility at Cincinnati/Northern Kentucky International Airport (“CVG”). FBO ground services are comprised of a single performance obligation for aircraft facility services such as fueling, parking, ground power and cleaning. FBO related revenue is recognized at the point in time each service is provided.

We also separately provide maintenance, repair and operations (“MRO”) ground services for aircraft owners and operators at certain of our facilities. MRO ground services are comprised of a single performance obligation for aircraft maintenance services such as modifications, repairs and inspections. MRO related revenue is recognized over time based on the cost of inventory consumed and labor hours worked for each service provided.

Flight-Related Services

As part of each flight, there is the option to request flight-related services such as catering or ground transportation for an additional charge. Flight-related services, which are passed through at either cost or a predetermined margin, were $ i 2.8 million, $ i 4.6 million and $ i 3.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Software Subscription

Subscription revenue consists of fees earned, typically monthly, from third-party operators and other businesses in the private aviation industry for web-based access to Avianis, which is a collaborative suite of flight software tools that we offered through our acquisition of Avianis Systems LLC. Our subscription services provided users software licenses and related support and updates during the term of the arrangement to enable management of flight operations. Revenue was generally recognized from such subscription contracts on a straight-line basis over the contract period. Contracts for related professional services, such as customized training or implementation programs, were either on a time and materials or fixed fee basis. Professional services revenue was generally recognized at the point in time the services were performed.

Other

Other revenue includes sales of whole aircraft (as described below), group charter revenue, cargo revenue, revenue sponsorships and partnership fees, safety and security revenue and special missions including government, defense, emergency and medical transport.

Aircraft Sales

We acquire aircraft from vendors and various other third-party sellers in the private aviation industry. On the acquisition date, we determine whether our intent is to sell the aircraft. Additionally, we may identify certain aircraft within our property and equipment which we intend to sell. If an aircraft is available to be used to service member or customer flights and all of the six specified accounting criteria in ASC 360-10-45-9 are met, we classify the aircraft as an asset held for sale on the consolidated balance sheets. Assets held for sale are reported at the lower of cost or fair value less costs to sell. The gain or loss upon sale of such aircraft is recorded on a net basis as part of income (loss) from operations in the consolidated statements of operations.

If we do not intend to use the aircraft to service member or customer flights prior to the sale, we classify the purchase as aircraft inventory on the consolidated balance sheets. Aircraft inventory is valued at the lower of cost or

net realizable value. Sales are recorded on a gross basis within other revenue and cost of revenue in the consolidated statements of operations. We recorded $ i 18.2 million and $ i 86.8 million of other revenue for aircraft sales during the years ended December 31, 2023 and 2022, respectively. There was i no revenue recognized for aircraft sales during the year ended December 31, 2021.

Aircraft Maintenance and Repair

Regular maintenance for owned and leased aircraft is expensed as incurred unless covered by a third-party, long-term flight hour service agreement. We have separate service agreements in place covering scheduled and unscheduled repairs of certain aircraft components, as well as the engines for certain owned and leased aircraft in our fleet. Certain of these agreements, whose original terms generally range from i 10 to i 15 years, require monthly payments at rates based either on the number of cycles each aircraft was operated during each month or the number of flight hours each engine was operated during each month, subject to annual escalations. These power-by-the-hour agreements transfer certain risks, including cost risks, to the third-party service providers. The agreements generally fix the amount we pay per flight hour or number of cycles in exchange for maintenance and repairs under a predefined maintenance program, which are representative of the time and materials that would be consumed. These costs are expensed as the related flight hours or cycles are incurred.

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Advertising Costs

We expense the cost of advertising and promoting our services as incurred. Such amounts are included in sales and marketing expense in the consolidated statements of operations and totaled $ i 8.0 million, $ i 10.5 million and $ i 12.3 million, for the years ended December 31, 2023, 2022 and 2021, respectively.

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Equity-Based Compensation

Prior to the Business Combination, we issued equity-based compensation awards to employees and consultants, including stock options, profits interests and restricted interests, under the WUP Management Incentive Plan and WUP Option Plan (as each term is defined in Note 13). In connection with the Business Combination, we adopted and issued restricted stock units (“RSUs”) and stock options under the Wheels Up Experience Inc. 2021 Long-Term Incentive Plan, as amended and restated April 1, 2023 (the “Amended and Restated 2021 LTIP”). Equity-based compensation awards are measured on the date of grant based on the estimated fair value of the respective award and the resulting compensation expense is recognized over the requisite service period of the respective award. We account for forfeitures of awards as they occur.

WUP restricted interests had a performance condition that provides for accelerated vesting upon the occurrence of a change in control or an initial public offering including consummation of a transaction with a special-purpose acquisition company. For performance-based awards such as WUP restricted interests and PSUs (as defined below), the grant date fair value of the award is expensed over the vesting period when the performance condition is considered probable of being achieved.

RSUs are measured based upon the fair value of a share of our Common Stock on the date of grant. RSUs typically vest upon a service-based requirement, and we recognize compensation expense on a straight-line basis over the requisite service period. Certain of our RSUs granted under the Amended and Restated 2021 LTIP vest upon achievement of pre-determined performance objectives (“PSUs”), or certain market-based vesting conditions, and may be subject to a participant’s continued service. Compensation expense associated with PSUs is recognized based on the quantity of awards we have determined are probable of vesting and is recognized over the longer of the estimated performance goal attainment period or time vesting period. The grant date fair value of awards with market-based vesting conditions is recognized over the derived service period for the award unless the market condition is satisfied in advance of the derived service period, in which case a cumulative catch-up is recognized as of the date of achievement.

Earnout Shares (as defined below) potentially issuable in i three separate tranches to holders of WUP profits interests and restricted interests as part of the Business Combination (see Note 3 and Note 13) are recorded as equity-based compensation. Earnout Shares contain market conditions for vesting. Compensation expense related to

an award with a market condition is recognized on a tranche-by-tranche basis (accelerated attribution method) over the requisite service period and is not reversed if the market condition is not satisfied.

Income Taxes

We account for income taxes using the asset and liability method. Deferred tax assets and liabilities reflect the expected future consequences of temporary differences between the financial reporting and tax bases of assets and liabilities as well as operating losses, capital losses, and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to be in effect when these differences are anticipated to reverse. Management makes estimates, assumptions, and judgments to determine our provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against deferred tax assets. We assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, we establish a valuation allowance.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. Interest and penalties related to unrecognized tax benefits are recognized within income tax expense.

Net Income (Loss) per Share

Basic net income (loss) per share is computed by dividing net income (loss) attributable to Wheels Up by the weighted average number of shares of Common Stock outstanding during the period. Diluted net income (loss) per share is computed based on the weighted average number of shares of Common Stock outstanding plus the effect of dilutive potential shares of Common Stock outstanding during the period. During the periods when there is a net loss, potentially dilutive shares of Common Stock are excluded from the calculation of diluted net loss per share as their effect is anti-dilutive.

Segment Reporting

We identify operating segments as components of Wheels Up for which discrete financial information is available and is regularly reviewed by the chief operating decision maker, or decision-making group, in making decisions regarding resource allocation and performance assessment. The chief operating decision maker is the chief executive officer. We determined that Wheels Up operates in a single operating and reportable segment, private aviation services, as the chief operating decision maker reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenue, for purposes of making operating decisions, allocating resources, and assessing performance.

Foreign Currency Translation Adjustments

Assets and liabilities of foreign subsidiaries, where the functional currency is not the 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 consolidated balance sheets and the consolidated statements of other comprehensive loss as a cumulative translation adjustment.

Accounting Pronouncements Not Yet Effective

In November 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” or ASU 2023-07. The amendments in ASU 2023-07 aim to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 will be effective for the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent interim periods, with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” or ASU 2023-09. The amendments in ASU 2023-09 aim to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 will be effective for the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements.

3. i 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 U.S. Securities and Exchange Commission (“SEC”) registrant, meaning that all historical financial information presented in the 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 i 19.0 million shares of Common Stock and rolled over into the combined business. In addition, there were i 2.9 million outstanding WUP profits interests recapitalized in connection with the Business Combination that can be exchanged on a value-for-value basis for Common Stock subject to vesting.

Upon closing of the Business Combination, Aspirational and Aspirational’s public shareholders held i i 600 / thousand and i i 1.1 / million shares of Common Stock, respectively.

All references to numbers of common shares and per common share data prior to the Business Combination in these 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 i 0.4604, which was based on the Wheels Up implied price per share prior to the Business Combination (the “Exchange Ratio”). On the Business Combination Closing Date, we received approximately $ i 656.3 million in gross proceeds. In connection with the Business Combination, we incurred $ i 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 i 5.5 million shares of common stock at a price of $ i 100.00 per share (the “PIPE Shares”) for an aggregate purchase price of $ i 550 million (the “PIPE Investment”), which closed simultaneously with the consummation of the Business Combination. On the Business Combination Closing Date, the PIPE Shares were automatically converted into shares of Common Stock on a i 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 i 0.9 million additional shares of Common Stock in i three equal tranches, which are issuable upon the achievement of Common Stock share price thresholds of $ i 125.00, $ i 150.00 and $ i 175.00 for any i 20 trading days within a period of i 30 consecutive trading days within i five years of the Business Combination Closing Date, respectively (the “Earnout Shares”).

Public Warrants and Private Warrants

The Warrants assumed in the Business Combination include (i) i 7,991,544 redeemable warrants sold by Aspirational as part of its initial public offering (the “Public Warrants”) of i 23,974,362 units, which consisted of i one

share of Common Stock and one-third of one warrant exercisable for Common Stock, and (ii) i 4,529,950 warrants privately sold by Aspirational at a price of $ i 1.50 per Warrant to Aspirational Consumer Lifestyle Sponsor LLC (the “Sponsor”) simultaneously with the closing of the Aspirational initial public offering exercisable for Common Stock (the “Private Warrants” and collectively with the Public Warrants, the “Warrants”). Taking into account the Reverse Stock Split, each whole Warrant entitles the holder to purchase 1/10th of one share of Common Stock at an exercise price of $ i 115.00 per whole share of Common Stock.

4. i 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):

Year Ended December 31,

2023

2022

2021

Services transferred at a point in time:

Flights, net of discounts and incentives

i 884,065

i 1,073,094

i 873,724

Aircraft management

i 159,150

i 232,248

i 215,368

Other

i 102,352

i 166,732

i 20,910

Services transferred over time:

Memberships

i 82,857

i 90,132

i 69,592

Aircraft management

i 16,679

i 9,784

i 9,897

Other

i 8,214

i 7,770

i 4,768

Total

i 1,253,317

i 1,579,760

i 1,194,259

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct service to the customer and is the basis of revenue recognition. To determine the proper revenue recognition method for contracts, we used judgment to evaluate whether two or more contracts should be combined and accounted for as a portfolio and whether the combined or single contract should be accounted for as more than one performance obligation.

Transaction Price

The transaction prices for each of our primary revenue streams are as follows:

•Flights — The fixed quoted amount including any flight credits.

•Memberships — The initiation fee, less any flight credits, when signing up and annual dues for all years thereafter.

•Aircraft management — The fixed monthly fee to manage the aircraft over the contractual term plus the recovery of owner-incurred expenses and recharge costs that are based on the expenses we incur to operate and maintain the aircraft; and

•Other — Generally based on contractual amounts or time and materials incurred for the work performed or services rendered.

If there is a group of performance obligations bundled in a contract, the transaction price is allocated based upon the relative standalone selling prices of the promised services underlying each performance obligation.

Payment Terms

Under standard payment terms, the member or customer agrees to pay the full stated price in the contract and financing of the transaction is not provided. Revenue in the consolidated statements of operations is presented net of discounts and incentives of $ i 9.6 million, $ i 12.2 million and $ i 17.0 million, for the years ended December 31, 2023, 2022 and 2021, respectively. We generally do not issue refunds for flights unless there is a failure to meet a service obligation with respect to such flight. Refunded amounts for initiation fees and annual dues are granted to some customers that no longer wish to remain members following their first flight and were $ i 3.5 million and $ i 3.0 million for the years ended December 31, 2023 and 2022, respectively.

Contract Balances

Receivables from members and customer contracts are included within accounts receivable, net, on the consolidated balance sheets. Accounts receivable, net consists of the following (in thousands):


	December 31, 2023		December 31, 2022
Gross receivables from members and customers	$	i 43,970	$	i 112,243
Undeposited funds	i 2,131		i 10,122
Less: Allowance for credit losses	( i 7,864)		( i 9,982)
Accounts receivable, net	$	i 38,237	$	i 112,383

Contract liabilities represent obligations to transfer services to a member or customer for which we have already received consideration. Purchases of flights, Prepaid Blocks, initiation fees, including flight credits, and annual dues payments are received up front in advance of performance under the contract and initially deferred as a liability.

The balance classified as current deferred revenue includes prepaid flights and flight credits, annual dues and initiation fees. Prepaid flights and flight credits are redeemable for flights at any time. The balance classified as non-current deferred revenue includes amounts to be recognized beyond 12 months following the balance sheet date.

Deferred revenue consists of the following (in thousands):


	December 31, 2023		December 31, 2022
Flights - prepaid	$	i 686,413	$	i 1,023,985
Memberships - annual dues	i 33,890		i 43,970
Memberships - initiation fees	i 2,377		i 3,899
Flights - credits	i 1,366		i 4,246
Other	i 183		i 775
Deferred revenue - total	$	i 724,229	$	i 1,076,875

Changes in deferred revenue for the year ended December 31, 2023 were as follows (in thousands):


Deferred revenue as of December 31, 2022	$	i 1,076,875
Amounts deferred during the period	i 593,635
Revenue recognized from amounts included in the deferred revenue beginning balance	( i 680,892)
Revenue from current period sales	( i 265,389)
Deferred revenue as of December 31, 2023	$	i 724,229

Revenue expected to be recognized in future periods for performance obligations that are unsatisfied, or partially unsatisfied, as of December 31, 2023 was as follows (in thousands):


2024	$	i 484,009
2025	i 120,155
2026	i 120,065
Total	$	i 724,229

Costs to Obtain Contract

Commissions are granted to certain employees and consultants separately for the initial sales of memberships, additional subsequent contract renewals, flights or when members purchase Prepaid Blocks on their accounts. Commissions are also granted for the execution of aircraft management agreements, additional subsequent contract renewals and performance over the contractual term. In addition, members are eligible to receive a credit if they refer a new customer who signs up for a membership in the Wheels Up program. The cost of commissions and referral fees are capitalized as an asset on the consolidated balance sheets as these are incremental amounts directly related to attaining a contract with a member. Capitalized costs related to sales commissions and referral fees were $ i 8.1 million, $ i 16.3 million and $ i 13.2 million for the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023 and 2022, capitalized sales commissions and referral fees of $ i 4.8 million and $ i 8.7 million, respectively, were included in Other current assets, and $ i 0.4 million and $ i 1.3 million, respectively, were included in Other non-current assets on the consolidated balance sheets.

Amounts capitalized for certain costs incurred to obtain a contract are periodically reviewed for impairment and amortized on a straight-line basis concurrently over the same period of benefit in which the associated contract revenue is recognized. Amortization expense related to capitalized sales commissions and referral fees included in sales and marketing expense in the consolidated statements of operations was $ i 9.5 million, $ i 16.3 million and $ i 9.1 million for the years ended December 31, 2023, 2022 and 2021, respectively.

5. i PROPERTY AND EQUIPMENT

Property and equipment consist of the following (in thousands):


	December 31, 2023		December 31, 2022
Aircraft	$	i 475,058	$	i 566,338
Software development costs	i 81,075		i 65,303
Leasehold improvements	i 22,899		i 11,930
Computer equipment	i 3,515		i 3,014
Building and improvements	i 1,424		i 1,424
Furniture and fixtures	i 4,618		i 3,208
Tooling	i 3,898		i 3,835
Vehicles	i 2,166		i 1,538
	i 594,653		i 656,590

Less: Accumulated depreciation and amortization	( i 256,939)		( i 262,031)
Total	$	i 337,714	$	i 394,559

Depreciation and amortization expense related to property and equipment was $ i 37.1 million, $ i 43.5 million and $ i 34.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Amortization expense related to software development costs, included as part of depreciation and amortization expense of property and equipment, was $ i 15.1 million, $ i 14.6 million and $ i 6.8 million for the years ended December 31, 2023, 2022 and 2021 respectively.

6. i ACQUISITIONS AND DIVESTITURES

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 $ i 108.2 million in cash. Air Partner is a United Kingdom-based international aviation services group that upon acquisition provided us with operations in i 18 locations across i four continents. Acquisition-related costs for Air Partner of $ i 2.9 million were included in general and administrative expense in the consolidated statements of operations for the year ended December 31, 2022. The acquisition of Air Partner was determined to be a business combination.

As of the date of acquisition, the total 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	$	i 49,617
Property and equipment, net	i 2,012
Operating lease right-of-use assets	i 2,780
Goodwill	i 83,910
Intangible assets	i 20,921
Restricted cash	i 27,507
Other assets	i 1,686
Total assets acquired	i 188,433
Total liabilities assumed	( i 80,239)
Net assets acquired	$	i 108,194

Current assets of Air Partner included $ i 18.0 million of cash and $ i 16.6 million of accounts receivable.

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.

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	$	i 16,521	i 5.7
Backlog	i 1,458		i 1.5
Trade name	i 1,931		i 1.9
Developed technology	i 1,011		i 5.8
Total acquired intangible assets	$	i 20,921	i 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 2). The valuation method used for the Air Partner intangible assets was the income approach.

The results of Air Partner were included in the consolidated statement of operations from the date of acquisition. Revenue for Air Partner was $ i 87.6 million, net of intercompany eliminations, and income from operations was $ i 8.3 million from the date of acquisition through December 31, 2022.

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 $ i 15.5 million in cash. Alante Air added i 12 Light jets to our controlled fleet and expanded our presence in the Western U.S. Acquisition-related costs for Alante Air of $ i 0.5 million were included in General and administrative expense in the consolidated statements of operations for the year ended December 31, 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. As of the date of acquisition, the total 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	$	i 4,452
Goodwill	i 13,069
Other assets	i 22,048
Total assets acquired	i 39,569
Total liabilities assumed	( i 24,101)
Net assets acquired	$	i 15,468

Current assets of Alante Air included $ i 3.0 million of cash and $ i 1.4 million of accounts receivable, including $ i 15.0 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 of Alante Air’s aircraft and existing business processes with our other acquisitions. The acquired goodwill is deductible for tax purposes.

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The results of Alante Air were included in the consolidated statement of operations from the date of acquisition. Revenue for Alante Air was $ i 2.8 million, net of intercompany eliminations, and loss from operations was $ i 3.1 million from the date of acquisition through December 31, 2022.

Mountain Aviation, LLC Acquisition

On January 5, 2021, we acquired all of the outstanding equity of Mountain Aviation, LLC (“Mountain Aviation”) for a total purchase price of $ i 40.2 million, consisting of $ i 30.2 million in WUP common interests and $ i 10.0 million in cash. In addition, there was a potential incremental cash earn-out of up to $ i 15.0 million based on achieving certain financial performance metrics related to certain special missions, which represented contingent consideration, and would have been payable in the second quarter of 2023 to the extent achieved. The estimated fair value of the earn-out payment using a Monte Carlo simulation model as of the acquisition date was $ i 0. No contingent consideration was received during the year ended December 31, 2023. The valuation of the earn-out was based on significant inputs that are not observable in the market; therefore, it was a Level 3 financial instrument. Mountain Aviation added to our Super-Midsize jet fleet and operations, provided full-service in-house maintenance capabilities, expanded our presence in the Western U.S. and enhanced our on-demand transcontinental charter flight capabilities. Acquisition-related costs for Mountain Aviation of $ i 2.0 million were included in general and administrative expense in the consolidated statements of operations for the year ended December 31, 2022. The acquisition of Mountain Aviation was determined to be a business combination.

As of the date of acquisition, the total purchase price allocated to the Mountain Aviation assets acquired and liabilities assumed according to their estimated fair values were as follows (in thousands):


Current assets	$	i 32,667
Property and equipment	i 741
Intangible assets	i 5,040
Goodwill	i 37,238
Other assets	i 45,874
Total assets acquired	i 121,560
Total liabilities assumed	( i 81,388)
Net assets acquired	$	i 40,172

Current assets of Mountain Aviation included $ i 17.8 million of cash and $ i 10.8 million of accounts receivable, including $ i 1.5 million 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 and intangible assets. The allocated value of goodwill primarily relates to anticipated synergies and economies of scale by combining the use of Mountain Aviation's aircraft, maintenance capabilities and existing business processes with our other acquisitions. The acquired goodwill is approximately i 25.0% deductible for tax purposes.

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The amounts allocated to acquired intangible assets and their associated weighted-average amortization periods, were determined based on the period the assets are expected to contribute directly or indirectly to our cash flows, consists of the following:


	Amount (In thousands)		Weighted-Average Amortization Period (Years)
Customer relationships - non-defense	$	i 3,400	i 7.0
Customer relationships - defense	i 1,200		i 4.0
Trade name	i 330		i 1.0
Non-competition agreement	i 110		i 1.0
Total acquired intangible assets	$	i 5,040	i 5.8

The results of Mountain Aviation were included in the consolidated statement of operations from the date of acquisition. Revenue for Mountain Aviation was $ i 100.9 million, net of intercompany eliminations, and income from operations was $ i 18.0 million from the date of acquisition through December 31, 2021.

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 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 2021 reflect the results for the year ended December 31, 2021. The unaudited pro forma financial results for 2022 reflect the results for the year ended December 31, 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).


	Year Ended December 31,
	2022		2021
Net revenue	$	i 1,617,578	$	i 1,346,140
Net loss	$	( i 505,538)	$	( i 186,752)
Net loss attributable to Wheels Up Experience Inc.	$	( i 505,151)	$	( i 180,740)
Net loss per share	$	( i i 20.56 / )	$	( i i 8.83 / )

Divestiture of Aircraft Management Business

On September 30, 2023, (the “ACM Closing Date”), WUP, pursuant to an equity purchase agreement (the “Purchase Agreement”) with Executive AirShare LLC, completed the sale of i 100% of the issued and outstanding equity interests of Circadian Aviation LLC, our indirect subsidiary (“Circadian”). The ACM Closing Date fair value of the aggregate consideration transferred was $ i 19.1 million and the Company recognized a loss on the sale of $ i 3.0 million. The $ i 19.1 million was comprised of $ i 13.2 million of cash received on the ACM Closing Date, contingent consideration with a fair value of $ i 4.8 million, an escrow receivable of $ i 0.6 million and a non-contingent consideration receivable of $ i 0.5 million. The fair value of the contingent consideration was deemed to be the approximate contract value as of the ACM Closing Date. We received a post-closing final working capital settlement of $ i 3.4 million in the first quarter of 2024.

102

Circadian was released from all guarantor obligations with respect to the Equipment Notes and Credit Facility (as each term is defined below) on the ACM Closing Date pursuant to certain debt release letters entered into concurrently with the Purchase Agreement.

Concurrently with entering into the Purchase Agreement: (i) WUP entered into a transition services agreement with Circadian, pursuant to which WUP will provide Circadian certain specified services on a temporary basis; (ii) Wheels Up Partners LLC, our indirect subsidiary (“WUP LLC”), entered into a master operating agreement with Circadian, pursuant to which Circadian will conduct certain on-demand charter operations for certain of WUP LLC’s owned aircraft after the ACM Closing Date while such aircraft are transitioned from a FAA operating certificate held by Circadian to the Company’s subsidiaries, and WUP LLC will provide certain maintenance, pilots services, management and other related services for WUP LLC’s owned aircraft during the transition period; and (iii) certain of the Company’s subsidiaries entered into fleet management agreements with Circadian, pursuant to which Circadian will provide certain maintenance, pilots services, management and other related services for managed aircraft after the ACM Closing Date while they are transitioned from a FAA operating certificate held by the applicable Company subsidiary to Circadian.

7. i GOODWILL AND INTANGIBLE ASSETS

Goodwill

The following table presents goodwill carrying value and the movements, by reporting unit, during the years ended December 31, 2023 and 2022 (in thousands):

WUP Legacy

Air Partner

Total

Balance as of December 31, 2021

i 437,398

i —

i 437,398

Acquisition of Alante Air

i 13,069

i —

i 13,069

Acquisition of Air Partner

i —

i 83,559

Impairment of goodwill

( i 180,000)

i —

( i 180,000)

Foreign currency translation adjustment

i —

( i 5,908)

Balance as of December 31, 2022(1)

i 270,467

i 77,651

i 348,118

Acquisitions(2)

i —

i 350

Impairment of goodwill

( i 126,200)

i —

( i 126,200)

Divestitures(3)

( i 8,169)

i —

( i 8,169)

Foreign currency translation adjustment

i —

i 4,109

Balance as of December 31, 2023(4)

i 136,098

i 82,110

i 218,208

(1) Net of accumulated impairment losses of $ i 180 million, all of which was recognized during the year ended December 31, 2022.

(2) Reflects the current period impact of measurement period adjustments (See Note 6).

(3) Reflects the amount of goodwill allocated to the divestiture of the aircraft management business (See Note 6).

(4) Net of accumulated impairment losses of $ i 306.2 million.

Goodwill Impairment

During the third quarter of 2022, we determined that because of continued deterioration in our stock price, resulting in a market capitalization that was below the carrying value of our equity, there was an indication that a triggering event occurred and the carrying value of WUP Legacy may not be recoverable. As a result, we performed a quantitative impairment test using the income approach. The fair value using the income approach was based on the present value of estimated future cash flows. The significant underlying unobservable inputs used to measure the fair value included forecasted revenue growth rates and margins, weighted average cost of capital, normalized working capital level and projected long-term growth rates. As a result of this assessment, a goodwill impairment charge of $ i 62.0 million was recorded to WUP Legacy as of September 30, 2022. The decline in the fair value of the

103

reporting unit, as compared to the quantitative analysis performed as of June 1, 2022, was primarily due to an increase in the discount rate.

During December 2022, we saw sustained decreases in the quoted price of our Common Stock and revised our forecast for the WUP Legacy reporting unit. As a result of these factors, we concluded a triggering event had occurred for WUP Legacy and, accordingly, performed an interim quantitative impairment test over the reporting unit as of December 31, 2022. Using the income approach, we calculated the fair value of WUP Legacy as of December 31, 2022, based on the present value of estimated future cash flows. The significant underlying unobservable inputs used to measure the fair value included forecasted revenue growth rates and margins, weighted average cost of capital, normalized working capital level and projected long-term growth rates. As a result of this assessment, a goodwill impairment charge of $ i 118.0 million was recorded to WUP Legacy. The decline in the fair value of the reporting unit, as compared to the quantitative impairment test performed as of October 1, 2022, was primarily due to the revised forecast for the reporting unit.

During the second quarter of 2023, we determined that, because of continued negative cash flows and changes in our management and business strategy, we determined that there was an indication that it was more likely than not that the fair value of our WUP Legacy reporting unit was less than its carrying amount. We performed an interim quantitative impairment assessment of goodwill as of June 1, 2023. Using a discounted cash flow approach, we calculated the fair value of WUP Legacy based on the present value of estimated future cash flows. The significant underlying inputs used to measure the fair value included forecasted revenue growth rates and margins, weighted average cost of capital, normalized working capital level and projected long-term growth rates. As a result of this assessment, we recognized a goodwill impairment charge of $ i 70.0 million relating to the WUP Legacy reporting unit during the three months ended June 30, 2023. The decline in the fair value of the reporting unit was primarily due to a more material reduction in working capital than expected during the three months ended June 30, 2023, as well as an increase in the discount rate.

To facilitate reconciliation of the fair value of our reporting units to our market capitalization as of June 1, 2023, we elected to perform a quantitative impairment assessment of the Air Partner reporting unit as of June 1, 2023, using a combination of the discounted cash flow and guideline public company methods, which did not result in impairment to goodwill. Based on the valuation, the fair value of the Air Partner reporting unit exceeded its carrying value by more than i 10%.

During the third quarter of 2023, we determined that upon entering into the Term Loan and Revolving Credit Facility on September 20, 2023 (see Note 10), and due to associated changes to our ownership and governance structure on that same date (see Note 13), there was an indication that the fair value of the WUP Legacy reporting unit was less than its carrying amount. We performed an interim quantitative impairment assessment of goodwill as of September 20, 2023. Using a discounted cash flow approach, we calculated the fair value of WUP Legacy, based on the present value of estimated future cash flows. The significant underlying inputs used to measure the fair value included forecasted revenue growth rates and margins, weighted average cost of capital, normalized working capital level and projected long-term growth rates. As a result of this assessment, we recognized a goodwill impairment charge of $ i 56.2 million relating to the WUP Legacy reporting unit during the three months ended September 30, 2023. The impairment charge represents the amount by which the carrying value of the reporting unit as of the assessment date exceeded the estimated fair value of the reporting unit as of the assessment date. Since the previous analysis on June 1, 2023, the fair value of the reporting unit increased as a result of the run-off of unprofitable periods in our estimated future cash flows; however, the carrying value of the reporting unit increased in a substantially equivalent amount due to the issuance of the Term Loan (see Note 10) and Initial Shares (as defined in Note 13).

To facilitate reconciliation of the fair value of our reporting units to our market capitalization as of September 20, 2023, we elected to perform a quantitative impairment assessment of the Air Partner reporting unit as of September 20, 2023, using a combination of the discounted cash flow and guideline public company methods, which did not result in impairment to goodwill. Based on the valuation, the fair value of the Air Partner reporting unit exceeded its carrying value by more than i 20%.

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We completed our annual goodwill impairment tests over our reporting units as of October 1, 2023, and determined that there was no impairment as of that date.

Intangible Assets

The gross carrying value, accumulated amortization and net carrying value of intangible assets consisted of the following (in thousands):

Gross Carrying
Value

Accumulated Amortization

Net Carrying
Value

Status

i 80,000

i 31,325

i 48,675

Customer relationships

i 89,121

i 34,920

i 54,201

Trade name

i 11,939

i 5,402

i 6,537

Developed technology

i 20,556

i 12,329

i 8,227

Leasehold interest – favorable

i 600

i 102

i 498

Foreign currency translation adjustment

( i 589)

( i 217)

( i 372)

Total

i 201,627

i 83,861

i 117,766

Gross Carrying
Value

Accumulated Amortization

Net Carrying
Value

Status

i 80,000

i 23,644

i 56,356

Customer relationships

i 91,121

i 24,613

i 66,508

Trade name

i 16,161

i 8,294

i 7,867

Developed technology

i 20,556

i 9,332

i 11,224

Leasehold interest – favorable

i 600

i 80

i 520

Backlog

i 1,458

i 880

i 578

Foreign currency translation adjustment

( i 1,662)

( i 374)

( i 1,288)

Total

i 208,234

i 66,469

i 141,765

Amortization expense of intangible assets was $ i 23.3 million, $ i 24.4 million and $ i 21.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Intangible Liabilities

Associated with our acquisition of Delta Private Jets on January 17, 2020, we recognized intangible liabilities for the fair value of complimentary Connect Memberships provided to existing Delta SkyMiles 360 customers as of the acquisition date. The gross carrying value, accumulated amortization and net carrying value of intangible liabilities consisted of the following (in thousands):

Gross Carrying
Value

Accumulated Amortization

Net Carrying
Value

Intangible liabilities

i 20,000

i 7,798

i 12,202

Gross Carrying
Value

Accumulated Amortization

Net Carrying
Value

Intangible liabilities

i 20,000

i 5,917

i 14,083

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Amortization of intangible liabilities, which reduces amortization expense was $ i 1.9 million, $ i 2.0 million and $ i 2.0 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Future amortization expense of intangible assets and intangible liabilities held as of December 31, 2023 are as follows (in thousands):


Year ending December 31,	Intangible Assets		Intangible Liabilities
2024	$	i 20,743	$	i 1,525
2025	i 20,330		i 1,525
2026	i 19,463		i 1,525
2027	i 14,889		i 1,525
2028	i 14,239		i 1,525
Thereafter	i 28,102		i 4,577
Total	$	i 117,766	$	i 12,202

8. i CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Cash Equivalents

Cash and cash equivalents consisted of the following (in thousands):


	December 31, 2023		December 31, 2022
Cash	$	i 263,815	$	i 155,555
Money market funds	i 94		i 230,626
Treasury bills	i —		i 199,700
Total	$	i 263,909	$	i 585,881

Interest income from cash equivalents of $ i 6.1 million, $ i 3.7 million and $ i 0.1 million was recorded in interest income in the consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021, respectively.

Restricted Cash

As of December 31, 2023 and December 31, 2022, restricted cash primarily consisted of $ i 17.9 million and $ i 26.3 million, respectively, related to funds held but unavailable for immediate use due to contractual restrictions, and $ i 6.2 million and $ i 7.7 million, respectively, held by financial institutions to establish standby letters of credit required by the lessors of certain corporate office space that we leased as of such dates, and $ i 3.4 million and i nil, respectively, held by financial institutions to collateralize against our credit card programs. The standby letters of credit required by lessors expire on December 31, 2033 and June 30, 2034.

i i

A reconciliation of cash and cash equivalents and restricted cash from the consolidated balance sheets to the consolidated statements of cash flows is shown below (in thousands):


	December 31, 2023		December 31, 2022
Cash and cash equivalents	$	i 263,909	$	i 585,881
Restricted cash	i 28,916		i 34,272
Total	$	i 292,825	$	i 620,153

/ /

Air Carrier Payroll Support Program

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On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law. The CARES Act provides aid in the form of loans, grants, tax credits and other forms of government assistance. Specifically, the CARES Act provided the airline industry with up to $ i 25.0 billion in grants with assurances the support was to be used exclusively for employee salaries, wages, and benefits.

During 2020, Wheels Up applied for government assistance under the Payroll Support Program from the U.S. Department of the Treasury (the “Treasury”) as directed by the CARES Act. We were awarded a total grant of $ i 76.4 million to support ongoing operations through payroll funding, which was all received by October 2020. We utilized all of the proceeds to offset payroll expenses incurred for the year ended December 31, 2020.

The support payments were conditioned on our agreement to refrain from conducting involuntary employee layoffs or furloughs through September 30, 2020. Other conditions include continuing essential air service as directed by the U.S. Department of Transportation and certain limitations on executive compensation. Based on the amount received, we were not required to provide financial protection to the Treasury in conjunction with the payroll support obtained.

The CARES Act also provides for deferred payment of the employer portion of social security taxes through the end of 2020, with 50% of the deferred amount due December 31, 2021 and the remaining 50% due December 31, 2022. As of December 31, 2021, the total amount of deferred payments outstanding was $ i 3.1 million. The amounts paid as of December 31, 2022 were $ i 2.4 million and the remaining balance of $ i 0.7 million was recorded in other current liabilities on the consolidated balance sheet and fully repaid during the year ended December 31, 2023.

9. i LONG-TERM DEBT

The following table presents the components of long-term debt on our consolidated balance sheet at December 31, 2023 (in thousands, except weighted average interest rates):

Weighted Average Interest Rate

2022-1 Equipment Note Financing

i 12.0

i 214,878

i 270,000

Term Loan

i 10.0

i 400,453

i —

Total debt

i 615,331

i 270,000

Less: Total unamortized debt discount and debt issuance costs

i 356,259

i 16,760

Less: Current maturities of long-term debt

i 23,998

i 27,006

Long-term debt, net

i 235,074

i 226,234

/ i

Maturities of our debt for the next five years are as follows (in thousands):


	Maturities
2024	$	i 23,998
2025	i 41,412
2026	i 37,809
2027	i 32,161
2028	i 479,951

Total	$	i 615,331

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2022-1 Equipment Note Financing

On October 14, 2022, Wheels Up Partners LLC, our indirect subsidiary (“WUP LLC”), issued $ i 270.0 million aggregate principal of i 12% fixed rate equipment notes (collectively, the “Equipment Notes”) using an EETC (enhanced equipment trust certificate) loan structure. The Equipment Notes were issued for net proceeds (before transaction-related expense) of $ i 259.2 million. The final expected distribution date of the Equipment Notes varies from July 15, 2025 to October 15, 2029, unless redeemed earlier by WUP LLC. The Equipment Notes bear interest at the rate of i 12% per annum with annual amortization of principal amount equal to i 10% per annum with balloon payments due at each maturity date. The Equipment Notes were initially secured by first-priority liens on i 134 of the Company’s owned aircraft fleet and by liens on certain intellectual property assets of the Company and certain of its subsidiaries. WUP LLC’s obligations under the Equipment Notes are guaranteed by the Company and certain of its subsidiaries.

The Equipment Notes were sold pursuant to a Note Purchase Agreement, dated as of October 14, 2022 (the “Note Purchase Agreement”), and issued under separate Trust Indentures and Mortgages, dated as of October 14, 2022 (each, an “Indenture” and collectively, the “Indentures”). On September 20, 2023, the Company, WUP LLC, certain other subsidiaries of the Company that guaranteed and/or granted collateral to secure WUP LLC’s obligations under the Equipment Notes, Wilmington Trust, National Association, and the Equipment Note lenders entered into the Omnibus Amendment No. 1 (the “Omnibus Amendment”). The Omnibus Amendment provides for, among other things (i) reducing the minimum liquidity covenant under the guarantee agreement related to the Equipment Notes (as amended, the “Guarantee”) with respect to the Company and its subsidiaries from $ i 125 million as of the end of each fiscal quarter to $ i 75.0 million on any date, (ii) permitting the execution of the Credit Agreement, (iii) the consent of the Equipment Note lenders that will allow the Company to effect a sale of certain guarantors under the Guarantee, (iv) that if a prepayment under the Term Loan results in the weighted average life of the Term Loan being shorter than that of the Equipment Notes, a redemption of a portion of the Equipment Notes is required, and (v) that if an Equipment Note has a maturity date on or after the maturity of the Term Loan, all obligations under such Equipment Note will be due i 90 days prior the maturity of the Term Loan.

The Note Purchase Agreement, the Indentures and the Guarantee, as each was amended by the Omnibus Amendment, contain certain covenants, including a liquidity covenant that requires the Company to maintain minimum aggregate available cash and Cash Equivalents (as defined in the Note Purchase Agreement), including $ i 20.0 million held in deposit for the benefit of the lenders and presented in Other non-current assets on our consolidated balance sheet as of December 31, 2023, of $ i 75.0 million on any date, a covenant that limits the maximum loan to appraised value ratio of all aircraft financed, subject to certain cure rights of the Company, and restrictive covenants that provide limitations under certain circumstances on, among other things: (i) making certain acquisitions, mergers or disposals of its assets; (ii) making certain investments or entering into certain transactions with affiliates; (iii) prepaying, redeeming or repurchasing the Equipment Notes, subject to certain exceptions; and (iv) paying dividends and making certain other specified restricted payments. Each Indenture contains customary events of default for Equipment Notes of this type, including cross-default provisions among the Equipment Notes and the Term Loan and Revolving Credit Facility. WUP LLC’s obligations under the Equipment Notes are guaranteed by the Company and certain of its subsidiaries. WUP LLC is also obligated to cause additional subsidiaries and affiliates of WUP LLC to become guarantors under certain circumstances. The Equipment Notes issued with respect to each aircraft are cross-collateralized by the other aircraft for which Equipment Notes were issued under the Indentures. The maturity of the Equipment Notes may be accelerated upon the occurrence of certain events of default under the Note Purchase Agreement and each Indenture and the related guarantees. As of December 31, 2023, we were in compliance with the covenants under the Note Purchase Agreement, each Indenture and the related guarantees.

Interest and principal payments on the Equipment Notes are payable quarterly on each January 15, April 15, July 15 and October 15, beginning on January 15, 2023. During the year ended December 31, 2023, the Company redeemed in-full the Equipment Notes for i 12 aircraft, which reduced the aggregate principal amount outstanding under the Equipment Notes by $ i 28.9 million. We recognized losses on extinguishment of debt associated with the redemptions of $ i 4.4 million in the consolidated statement of operations of during the year ended December 31, 2023. As of December 31, 2023, the carrying value of the i 122 aircraft that were subject to first-priority liens under the Equipment Notes was $ i 283.6 million. Amortization expense for debt discounts and deferred financing costs of

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$ i 3.7 million and $ i 0.8 million were recorded in interest expense in the consolidated statement of operations for the year ended December 31, 2023 and 2022, respectively. We recognized $ i 4.9 million in General and administrative expense in the consolidated statement of operations associated with executing the Omnibus Amendment during the year ended December 31, 2023.

Delta Promissory Note

On August 8, 2023, the Company entered into a Secured Promissory Note (the “Note”) with Delta, as payee, which was subsequently amended pursuant to the First Amendment thereto, dated August 15, 2023, the Second Amendment thereto, dated August 21, 2023, the Third Amendment thereto, dated September 6, 2023, and the Fourth Amendment thereto, dated September 14, 2023 (collectively with the Note, the “Amended Note”), pursuant to which Delta provided $ i 70.0 million aggregate principal amount of short-term funding to the Company at an interest rate of i 10% per annum, which was payable in kind and capitalized to the outstanding principal amount of the Amended Note on a quarterly basis and a maturity date of February 4, 2024. The Amended Note was secured by a first-priority lien on unencumbered assets of the Company and its direct and indirect wholly-owned U.S. subsidiaries, including unencumbered aircraft of WUP LLC. The Amended Note was guaranteed by the Company’s wholly-owned U.S. subsidiaries. On September 20, 2023, the Company repaid all amounts due and owed under the Amended Note using a portion of the proceeds from the Term Loan and entered into a Letter Agreement, dated as of September 20, 2023 with Delta, which terminated the Amended Note and released all liens and guarantees thereunder in connection with such repayment. The repayment of all amounts due and owed under the Amended Note was accounted for as a debt extinguishment, and no gain or loss was recognized.

Term Loan and Revolving Credit Facility

On September 20, 2023, the Company entered into the Credit Agreement, pursuant to which (i) the Lenders provided the Term Loan in the aggregate original principal amount of $ i 350.0 million and (ii) Delta provided commitments for the Revolving Credit Facility in the aggregate original principal amount of $ i 100.0 million. On September 20, 2023, the Company issued the Term Loan of $ i 350.0 million to the Lenders for net proceeds (before transaction-related expense) of $ i 343.0 million.

On November 15, 2023, the Company entered into the Credit Agreement Amendment, pursuant to which, among other things, the Incremental Term Lenders joined the Credit Agreement and provided the Incremental Term Loan in the aggregate original principal amount of $ i 40.0 million. On November 15, 2023, the Company issued the Incremental Term Loan of $ i 40.0 million to the Lenders for net proceeds (before transaction-related expense) of $ i 39.2 million. Upon the closing of the Incremental Term Loan, the Credit Facility consisted of (i) the Term Loan in the aggregate principal amount of $ i 390.0 million and (ii) the Revolving Credit Facility in the aggregate original principal amount of $ i 100.0 million.

The scheduled maturity date for the Term Loan is September 20, 2028, and the scheduled maturity date for the Revolving Credit Facility is the earlier of September 20, 2028 and the first date after September 20, 2025 on which all amounts owed with respect to borrowings under the Revolving Credit Facility have been repaid, subject in each case to earlier termination upon acceleration or termination of any obligations upon the occurrence and continuation of an event of default. Interest on the Term Loan and any borrowings under the Revolving Credit Facility (each, a “Loan” and collectively, the “Loans”) accrues at a rate of i 10% per annum on the unpaid principal balance of the Loans then outstanding. Accrued interest on each Loan is payable in kind as compounded interest and capitalized to the principal amount of the applicable Loan on the last day of each of March, June, September and December, and the applicable maturity date. Also, upon the occurrence and during the continuance of an event of default under the Credit Agreement, (y) interest will accrue on the unpaid principal balance of the Loans at the rate then applicable to such Loans plus i 2% and (z) interest will accrue on all other outstanding liabilities, interest, expenses, fees and other sums under the Credit Agreement, at a rate equal to the Alternate Base Rate (as defined in the Credit Agreement) plus i 2% per annum. If in the future the Company or its subsidiaries either redeem in full the outstanding Equipment Notes or commence payoff at maturity thereof, the Company may elect to make interest payments (or some portion thereof) on any Loans then outstanding in cash.

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The Credit Agreement also contains certain covenants and events of default, in each case customary for transactions of this type. The obligations under the Credit Agreement are secured by a first-priority lien on unencumbered assets of the Loan Parties (excluding certain accounts, including any segregated account exclusively holding customer deposits, and other assets specified in the Credit Agreement), as well as a junior lien on the Equipment Note Collateral. The Credit Agreement is initially guaranteed by all U.S. and certain non-U.S. direct and indirect subsidiaries of the Company. In the future, the Company may be required to add any new or after-acquired subsidiaries of the Company that meet certain criteria as guarantors. As of December 31, 2023, we were in compliance with the covenants under the Credit Agreement and related credit documents.

In connection with the funding of the Initial Term Loan, the Company entered into the Original Investor Rights Agreement, pursuant to which the Company issued to the Initial Lenders i 141,313,671 shares in the aggregate of Common Stock in a private placement. In addition, the Company agreed to issue an additional i 529,926,270 shares in the aggregate of Common Stock. The Investor Rights Agreement also contains certain other terms and conditions related to the Lenders’ ownership of Common Stock, including, among other things, that the Initial Lenders have the right to designate certain members of the Board depending on the level of Common Stock ownership and certain transfer restrictions and liquidity rights.

On November 9, 2023, the Company’s stockholders approved, at the 2023 Special Meeting, the Amended and Restated Certificate of Incorporation, which, among other things, increased the number of shares of Common Stock available for issuance thereunder. In connection with the transactions contemplated by the Credit Agreement Amendment, the Company entered into the Investor Rights Agreement Amendment with each Initial Lender, which contained, among others, certain revisions to reflect the issuance of the Deferred Shares. Substantially concurrently with entering into the Investor Rights Agreement Amendment, on the Final Closing Date, the Company and Initial Lenders entered into the Investor Rights Agreement Joinders with each Incremental Term Lender (or its applicable affiliate), pursuant to which each Incremental Term Lender (or its applicable affiliate) joined the Investor Rights Agreement and assumed the rights and obligations of an Additional Investor (as defined in the Investor Rights Agreement) thereunder, including the right to receive a pro rata portion of the Investor Shares. The Company issued the Deferred Shares to the Lenders on the Final Closing Date in a private placement. The Investor Shares were issued in private placements such that after the Investor Issuances, each Lender was issued a number of shares equal to its pro rata portion of the Investor Shares based on its participation in the Term Loan.

In accordance with ASC 470, Debt, the value of the Initial Term Loan, Initial Issuance, and Deferred Issuance was allocated using a relative fair value allocation. We evaluated features of the i three instruments in accordance with ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging. The Company determined that the Term Loan, Initial Issuance and Deferred Issuance did not contain any features that would qualify as a derivative or embedded derivative and require bifurcation. In addition, the Company determined the Initial Issuance and Deferred Issuance should be classified as equity. The allocation on a relative fair value basis resulted in gross amounts recorded of $ i 44.9 million for the Initial Term Loan, $ i 64.2 million for the Initial Issuance and $ i 240.9 million for the Deferred Issuance. The fair value of debt was principally based on inputs such as estimated credit risk, recently completed market transactions and estimates based on interest rates, maturities, credit risk and underlying collateral. These inputs are primarily classified as Level 3 within the ASC 820 fair value hierarchy. The fair value of the Initial Issuance and Deferred Issuance were based on the quoted market prices of Common Stock on the Credit Agreement Closing Date, which represent Level 1 within the ASC 820 fair value hierarchy given these issuances were announced and known by the public.

Issuance costs of $ i 26.6 million were incurred in connection with the Credit Agreement and Investor Rights Agreement. The deferred issuance costs were allocated on a relative fair value basis, resulting in an allocation of $ i 3.4 million for the Term Loan, $ i 4.9 million for the Initial Issuance, and $ i 18.3 million for the Deferred Issuance. The initial carrying value of the Term Loan was $ i 41.4 million as of September 20, 2023, which reflected the $ i 3.4 million of unamortized debt issuance costs and $ i 305.2 million of unamortized debt discount.

In accordance with ASC 815, Derivatives and Hedging, we determined the reallocation of the Deferred Issuance between the Lenders in connection with the Credit Agreement Amendment and Investor Rights Agreement Joinders that resulted in a pro rata portion of the Investor Shares being issued to the Incremental Term Lenders on the Final Closing Date (“Reallocated Issuance”) represents a modification of a freestanding equity-classified written call

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option and the modification is to be recognized as if cash had been paid as consideration for the shares of Common Stock issued to the Incremental Term Lenders (collectively, the “Reallocated Shares”). Accordingly, the Reallocated Shares were treated as a debt discount in accordance with the guidance in ASC 835, Interest, and the value of the Incremental Term Loan and the Reallocated Shares was apportioned using a relative fair value allocation. The allocation on a fair value basis resulted in gross amounts recorded of $ i 9.4 million for the Incremental Term Loan and $ i 30.6 million for the Reallocated Shares. The fair value of debt was principally based on inputs such as estimated credit risk, recently completed market transactions and estimates based on interest rates, maturities, credit risk and underlying collateral. These inputs are primarily classified as Level 3 within the ASC 820 fair value hierarchy. The fair value of the Reallocated Shares was based on the quoted closing market price per share of Common Stock on the Final Closing Date, which represent Level 1 within the ASC 820 fair value hierarchy given the Deferred Issuance was announced and known by the public.

Issuance costs of $ i 2.9 million were incurred in connection with the Credit Agreement Amendment and Investor Rights Agreement Amendment. The deferred issuance costs were allocated on a relative fair value basis, resulting in an allocation of $ i 0.7 million for the Incremental Term Loan and $ i 2.2 million for the Reallocated Shares. The initial carrying value of the Incremental Term Loan was $ i 8.7 million as of November 15, 2023, which reflected $ i 0.7 million of unamortized debt issuance costs and $ i 30.6 million of unamortized debt discount.

Amortization of debt discounts and deferred issuance costs associated with the Term Loan of $ i 3.4 million were recorded in interest expense in the consolidated statement of operations for the year ended December 31, 2023.

Prior Financing Arrangements and Promissory Notes

Amortization expense for debt discounts and deferred financing costs, which were associated with debt extinguished in prior periods, of $ i 0.6 million and $ i 1.6 million were recorded in interest expense in the consolidated statement of operations for the years ended December 31, 2022 and December 31, 2021, respectively. As a result of the early repayment of credit facilities and promissory notes in prior periods, we recorded a $ i 2.4 million loss on extinguishment of debt for the year ended December 31, 2021, related to the write off of unamortized debt discounts and deferred financing costs.

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10. i FAIR VALUE MEASUREMENTS

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):

Level 1

Level 2

Level 3

Fair Value

Assets:

Money market funds

i 94

i —

i 94

Total assets

i 94

i —

i 94

Liabilities:

Warrant liability - Public Warrants

i 7

i —

i 7

Warrant liability - Private Warrants

i —

i 5

i —

i 5

Equipment Notes

i —

i 256,256

Term Loan

i —

i 297,800

Total liabilities

i 7

i 5

i 554,056

i 554,068

Level 1

Level 2

Level 3

Fair Value

Assets:

Money market funds

i 230,626

i —

i 230,626

Treasury bills

i 199,700

i —

i 199,700

Total Assets

i 430,326

i —

i 430,326

Liabilities:

Warrant liability - Public Warrants

i 479

i —

i 479

Warrant liability - Private Warrants

i —

i 272

i —

i 272

Equipment notes

i —

i 270,000

i —

i 270,000

Total liabilities

i 479

i 270,272

i —

i 270,751

The carrying amount of money market funds 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 1 3). The warrant liability was measured at fair value upon assumption and on a recurring basis, with changes in fair value presented in the consolidated statements of operations. As of December 31, 2023 and 2022, we valued the Warrants by applying the valuation technique of a Monte Carlo simulation model to reflect the redemption conditions. We used Level 2 inputs for the Warrants as of December 31, 2023. We used Level 1 inputs for the Public Warrants and Level 2 inputs for the Private Warrants as of December 31, 2022.

The estimated fair value of the Equipment Notes is categorized as a Level 3 valuation. We considered the appraised value of aircraft subject to first-priority liens under the Equipment Notes, as sourced during the third quarter of 2023 and as required under the Equipment Notes, to determine the fair value of the Equipment Notes as of December 31, 2023.

Due to the relatively short period of time between the issuance of the Term Loan and the measurement date of December 31, 2023, we believe the fair value of the Term Loan as of December 31, 2023, approximated the carrying value (See Note 9).

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The following table presents the changes in the fair value of the warrant liability (in thousands):

Public Warrants

Private Warrants

Total
Warrant Liability

Fair value as of December 31, 2021

i 6,553

i 3,715

i 10,268

Change in fair value of warrant liability

( i 6,074)

( i 3,443)

( i 9,517)

Fair value as of December 31, 2022

i 479

i 272

i 751

Change in fair value of warrant liability

( i 472)

( i 267)

( i 739)

Fair value as of December 31, 2023

i 7

i 5

i 12

11. i LEASES

Leases primarily pertain to certain controlled aircraft and our corporate headquarters and operational facilities, including aircraft hangars and the Atlanta Member Operations Center, which are all accounted for as operating leases. We sublease an aircraft hangar at Cincinnati/Northern Kentucky International Airport from Delta. Certain of these operating leases have renewal options to further extend for additional time periods at our discretion.

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 are not included in the right-of-use asset and lease liability balances but rather are expensed as incurred.

The components of total lease costs are as follows (in thousands):

Year Ended December 31,

2023

2022

2021

Operating lease costs

i 38,442

i 38,818

i 36,079

Short-term lease costs

i 7,215

i 10,725

i 25,334

Variable lease payments

i 30,854

i 17,997

i 16,747

Total lease costs

i 76,511

i 67,540

i 78,160

Lease costs related to leased aircraft and operational facilities are included in cost of revenue in the consolidated statements of operations. Lease costs related to leased corporate headquarters and other office space, including expenses for non-lease components, are included in General and administrative expense in the consolidated statements of operations.

Sublease income is presented in General and administrative expenses in the consolidated statements of operations. Sublease income was not material for any of the years ended December 31, 2023, 2022 and 2021.

Supplemental cash flow information related to leases are as follows (in thousands):


	Year Ended December 31,
	2023		2022		2021
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows paid for operating leases	$	i 35,914	$	i 38,934	$	i 38,080
Right-of-use assets obtained in exchange for operating lease obligations	$	i 7,989	$	i 50,385	$	i 69,808

/ i

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Supplemental balance sheet information related to leases are as follows:


	December 31, 2023		December 31, 2022
Weighted-average remaining lease term (in years):
Operating leases	i 6.7		i 5.9
Weighted-average discount rate:
Operating leases	i 9.2	%	i 9.0	%

Maturities of lease liabilities, as of December 31, 2023, are as follows (in thousands):


Year ending December 31,	Operating Leases
2024	$	i 28,885
2025	i 17,937
2026	i 10,466
2027	i 7,531
2028	i 6,360
Thereafter	i 36,751
Total lease payments	i 107,930
Less: Imputed interest	( i 30,105)
Total lease obligations	$	i 77,825

12. i STOCKHOLDERS’ EQUITY AND EQUITY-BASED COMPENSATION

Stockholders’ Equity

Authorized Shares

Pursuant to the Amended and Restated Certificate of Incorporation, we are authorized to issue i 1,525,000,000 shares, consisting of (i) i 1,500,000,000 shares of Common Stock and (ii) i 25,000,000 shares of preferred stock. Holders of Common Stock are entitled to i one vote per share; provided, that by agreement (i) certain Incremental Term Lenders (collectively, the “Non-Citizen Investors”) that are not “citizens of the United States” (as defined in 49 USC § 40102(a)(15)(C)), may be afforded collective voting rights equal to i 1% of all shares of Common Stock entitled to vote at a meeting of the Company’s stockholders; (ii) for so long as such Non-Citizen Investors collectively hold such shares of Common Stock, the shares of Common Stock held by CK Wheels in excess of i 23.9% of all shares of Common stock entitled to vote at a meeting of the Company’s stockholders, will not have voting rights (subject to ratable adjustment if the Non-Citizen Investors cease to own (beneficially or of record) a certain number of shares of Common Stock); and (iii) any shares owned by Delta above i 29.9% will be neutral shares with respect to voting rights, will be voted in proportion to all other votes cast (“for”, “against” or “abstain”) at a meeting of stockholders by stockholders other than Delta.

Reverse Stock Split

Following approval by the Company’s stockholders at the Company’s 2023 Annual Meeting of Stockholders held on May 31, 2023 (the “2023 Annual Meeting”), the Board of Directors of the Company (the “Board”) approved the Reverse Stock Split of Wheels Up’s outstanding shares of Common Stock, at a reverse stock split ratio of 1-for-10 and contemporaneously with the Reverse Stock Split, the Authorized Share Reduction, which provided for a proportionate reduction in the number of authorized shares of Common Stock from i 2.5 billion shares of Common Stock to i 250 million shares, each of which became effective immediately after the close of trading on the NYSE on June 7, 2023. The Company’s total stockholders’ equity, in the aggregate, did not change as a result of the Reverse Stock Split and Authorized Share Reduction. In addition, the par value for the Company’s Common Stock remained unchanged. Holders of Common Stock who would otherwise have held fractional shares because the number of

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shares of Common Stock they held before the Reverse Stock Split was not evenly divisible by the reverse stock split ratio received cash (without interest, and subject to any required tax withholding applicable to a holder) in lieu of issuance of such fractional shares.

As a result of the Reverse Stock Split, equitable adjustments corresponding to the reverse stock split ratio were made to the number of shares of Common Stock underlying Wheels Up’s outstanding equity awards and the number of shares issuable under Wheels Up’s equity incentive plans, as well as any exercise prices, hurdle amounts or market-based vesting conditions of such equity awards, as applicable. In addition, equitable adjustments corresponding to the reverse stock split ratio of 1-for-10 were made to the Warrants (as defined below), resulting in each Warrant becoming exercisable for 1/10th of one share of Common Stock at an exercise price of $ i 115.00 per whole share of Common Stock and the stated redemption prices per Warrant being proportionately reduced (see Note 12).

2023 Common Stock Issuances

In connection with the transactions contemplated by the Credit Agreement, the Company entered into the Investor Rights Agreement on September 20, 2023. Pursuant to the Investor Rights Agreement, the Company issued the Lenders i 141,313,671 Initial Shares in a private placement that closed after the end of the trading day on the Credit Agreement Closing Date, which represented approximately i 80% of the Company’s issued and outstanding shares of Common Stock on a fully diluted basis. The Initial Shares were issued such that each Lender received a pro rata portion of the Initial Shares equal to the proportion of its participation in the Term Loan as of the Credit Agreement Closing Date. The amount recorded for the Initial Issuance was determined using the relative fair value basis, which resulted in allocated gross proceeds of $ i 64.2 million for the Initial Issuance. Issuance costs of $ i 4.9 million were recorded as a reduction to Additional paid-in capital.

The Company recorded the Deferred Issuance as a forward contract for Common Stock within Additional paid-in capital on the consolidated balance sheet during the third quarter of 2023. The amount recorded for the Deferred Issuance was determined using the relative fair value basis, which resulted in allocated gross proceeds of $ i 240.9 million for the Deferred Issuance. Issuance costs of $ i 18.3 million were recorded as a reduction to Additional paid-in capital during the year ended December 31, 2023.

On the November 15, 2023, the Company and Initial Lenders entered into the Investor Rights Agreement Joinders with each Incremental Term Lender (or its applicable affiliate), pursuant to which each Incremental Term Lender (or its applicable affiliate) joined the Investor Rights Agreement and assumed the rights and obligations of an Additional Investor (as defined in the Investor Rights Agreement) thereunder, including the right to receive a pro rata portion of the Investor Shares. As a result, i 68,845,122 of the Deferred Shares (the Reallocated Shares) were issued to the Incremental Term Lenders. The Company recorded the Reallocated Shares within Additional paid-in capital on the consolidated balance sheet during the fourth quarter of 2023. The amount recorded for the Reallocated shares was determined using the relative fair value basis, which resulted in allocated gross proceeds of $ i 30.6 million. Issuance costs of $ i 2.2 million were recorded as a reduction to Additional paid-in capital during the year ended December 31, 2023.

Equity-Based Compensation

As of December 31, 2023, we had i nine equity-based compensation plans that were approved by the board of directors of WUP (collectively, the “WUP Management Incentive Plan”) prior to the Business Combination, as well

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as the Wheels Up Partners Holdings LLC Option Plan (the “WUP Option Plan”). Following the consummation of the Business Combination, no new grants can be made under the WUP Management Incentive Plan or the WUP Option Plan.

In connection with the Business Combination, the Board and stockholders of Wheels Up adopted the Wheels Up Experience Inc. Long-Term Incentive Plan (the “Original 2021 LTIP”), for employees, consultants and other qualified persons. Following approval by the Board, at the 2023 Annual Meeting, the Company’s stockholders approved the Amended and Restated 2021 LTIP to increase the aggregate number of shares of Common Stock available for awards made thereunder by i 24,150,000 shares ( i 2,415,000 shares after giving effect to the Reverse Stock Split) and amend certain other plan provisions. The Amended and Restated 2021 LTIP provides for the grant of incentive options, nonstatutory options, restricted stock, RSUs, rights, other stock-based awards, performance awards, cash awards or any combination of the foregoing.

As of the Business Combination Closing Date, in connection with the Business Combination, the Board granted accelerated vesting of approximately i 18 months on all outstanding equity-based compensation awards granted under the WUP Management Incentive Plan or WUP Option Plan. This modification to our awards resulted in the acceleration of all remaining compensation cost due to a shorter requisite service period as compared to the original award. There was no change to the fair value or incremental compensation cost incurred.

On June 30, 2022, the Board adopted the Wheels Up Experience Inc. 2022 Inducement Grant Plan (the “2022 Inducement Grant Plan”) to be used for a one-time employment inducement grant, pursuant to NYSE Rule 303A.08, for Todd Smith, in connection with his appointment as Chief Financial Officer. The maximum number of awards that could be granted under the 2022 Inducement Grant Plan were i 2,051,282 shares of Common Stock ( i 205,128 shares of Common Stock after giving effect to the Reverse Stock Split), which were all granted in the form of RSUs to Mr. Smith on July 1, 2022. RSU awards granted under the 2022 Inducement Grant Plan contain generally the same terms as other awards granted under the Original 2021 LTIP during the fiscal year ended December 31, 2022.

WUP Management Incentive Plan

In March 2014, the WUP Management Incentive Plan was established, which provided for the issuance of WUP profits interests, restricted or unrestricted, to employees, consultants and other qualified persons.

WUP Profits Interests

As of December 31, 2023, an aggregate of i 3.1 million profits interests have been authorized and issued under the WUP Management Incentive Plan. Vested WUP profits interests are eligible to be exchanged into shares of Common Stock. Amounts of WUP profits interests reported in the tables below represent the maximum number of WUP profits interests outstanding or that could be realized upon vesting and immediately exchanged for the maximum number of shares of Common Stock. The actual number of shares of Common Stock received upon exchange of such WUP profits interests will depend on the trading price per share of Common Stock at the time of such exchange.

The following table summarizes the WUP profits interests activity under the WUP Management Incentive Plan as of December 31, 2023:


	Number of WUP Profits Interests	Weighted-Average Grant Date Fair Value
	(In thousands)
Outstanding WUP profits interests as of January 1, 2023	i 2,881	$	i 4.16
Granted	i —	i —
Exchanged	i —	i —
Expired/forfeited	i —	i —
Outstanding WUP profits interests as of December 31, 2023	i 2,881	$	i 4.16

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The weighted-average remaining contractual term as of December 31, 2023 for WUP profits interests outstanding was approximately i 7.5 years.

The following table summarizes the status of non-vested WUP profits interests as of December 31, 2023:


	Number of WUP Profits Interests	Weighted-Average Grant Date Fair Value
	(In thousands)
Non-vested WUP profits interests as of January 1, 2023	i 170	$	i 4.19
Granted	i —	i —
Vested	( i 170)	i 4.19
Forfeited	i —	i —
Non-vested WUP profits interests as of December 31, 2023	i —	$	i —

The total fair value of vested WUP profits interests amounted to $ i 0.7 million for the year ended December 31, 2023.

WUP Restricted Interests

WUP restricted interests were time and performance-based awards that vested with a change in control or initial public offering. As a result, we started recording compensation cost for WUP restricted interests on the Business Combination Closing Date.

The WUP restricted interests granted vested when both of the following conditions were met: (i) ratably over a i i 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) i six months after an initial public offering and (2) i 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 and all remaining WUP restricted interests vested during the year ended December 31, 2022.

WUP Option Plan

In December 2016, the WUP Option Plan was established, which provided for the issuance of stock options to purchase WUP common interests at an exercise price based on the fair market value of the interests on the date of grant. Generally, WUP stock options granted vest over a i four-year service period and expire on the tenth anniversary of the grant date. As of December 31, 2023, the number of WUP stock options authorized and issued in aggregate under the WUP stock option plan was i 1.8 million.

The following table summarizes the activity under the WUP Option Plan as of December 31, 2023:

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, 2023

i 1,280

i 75.10

i 12.02

Granted

i —

Exercised

i —

Forfeited

( i 141)

i 72.48

i 7.55

Expired

( i 10)

i 72.71

i 6.74

Outstanding WUP stock options as of December 31, 2023

i 1,129

i 75.45

i 12.64

Exercisable WUP stock options as of December 31, 2023

i 1,129

i 75.45

i 12.64

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The aggregate intrinsic value as of December 31, 2023 for WUP stock options that were outstanding and exercisable was i nil .

The weighted-average remaining contractual term as of December 31, 2023 for WUP stock options that were outstanding and exercisable was approximately i 5.6 years and i 5.6 years, respectively.

The following table summarizes the status of non-vested WUP stock options as of December 31, 2023:


	Number of WUP Stock Options	Weighted-Average Grant Date Fair Value
	(In thousands)
Non-vested WUP stock options as of January 1, 2023	i 104	$	i 19.95
Granted	i —	i —
Vested	( i 102)	i 20.03
Expired	i —	i —
Forfeited	( i 2)	i 16.01
Non-vested WUP stock options as of December 31, 2023	i —	$	i —

The total fair value of WUP stock options that vested was $ i 2.1 million, $ i 3.9 million and $ i 9.0 million during the years ended December 31, 2023, 2022 and 2021, respectively. The total intrinsic value of WUP stock options exercised during the years ended December 31, 2023 2022 and 2021 was i nil, i nil and $ i 0.2 million, respectively.

The WUP profits interests, WUP restricted interests, WUP stock options and Wheels Up stock options valuations were determined using Level 3 inputs. The expected i seven-year term was estimated using the midpoint of the i four-year service period and the i i ten-year / contractual term of the awards. Expected volatility was estimated based on the historical volatilities of publicly traded companies within the airline industry and certain comparable travel technology companies. We used the published yields for i zero-coupon Treasury notes to determine the risk-free interest rate. The expected dividend yield is i zero as we have never paid and do not currently anticipate paying any cash dividends in the foreseeable future.

Amended and Restated 2021 LTIP

As of December 31, 2023, an aggregate of i 5.2 million shares were authorized for issuance under the Amended and Restated 2021 LTIP.

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RSUs

Wheels Up RSUs granted under the Amended and Restated 2021 LTIP generally vest at intervals over up to a i three-year service period. i The following tables summarize the activity under the Amended and Restated 2021 LTIP related to RSUs as of December 31, 2023:


	Number of RSUs(1)	Weighted-Average Grant Date Fair Value
	(In thousands)
Non-vested and outstanding RSUs as of January 1, 2023	i 1,617	$	i 34.64
Granted(1)	i 2,324	i 2.68
Vested	( i 708)	i 33.44
Forfeited	( i 1,385)	i 15.35
Non-vested and outstanding RSUs as of December 31, 2023	i 1,848	$	i 9.35

(1) RSU awards granted under the 2022 Inducement Grant Plan contain generally the same terms as other RSU awards granted under the Original 2021 LTIP during the fiscal year ended December 31, 2022. The number of RSUs and weighted-average grant date fair value include i 205,128 RSUs granted under the 2022 Inducement Grant Plan in July 2022, of which i 136,752 RSUs had vested as of December 31, 2023 and the remaining i 68,376 RSUs are scheduled to vest on December 30, 2024, subject to continued service through the final vesting date.

The weighted-average grant-date fair value of RSUs granted was $ i 6.2 million, $ i 54.9 million, $ i 62.2 million during the years ended December 31, 2023, 2022 and 2021, respectively. The total fair value of RSUs that vested during the years ended December 31, 2023, 2022 and 2021 was $ i 23.7 million, $ i 35.3 million and $ i 0.6 million, respectively.

The total unrecognized compensation cost related to non-vested RSUs was $ i 12.3 million as of December 31, 2023 and is expected to be recognized over a weighted-average period of i 1.4 years.

PSUs

Under the terms of the PSUs granted to certain employees, upon the achievement of certain pre-determined performance objectives, each PSU may settle into shares of our Common Stock. The PSUs will vest, if at all, upon the actual achievement of the related performance objectives, subject to specified change of control exceptions.

The following table summarizes the activity under the Amended and Restated 2021 LTIP related to PSUs as of December 31, 2023:


	Number of PSUs	Weighted-Average Grant Date Fair Value
	(in thousands)
Non-vested PSUs as of January 1, 2023	i 96	$	i 21.68
Granted	i 145	i 2.93
Vested	( i 32)	i 12.19
Forfeited	( i 191)	i 11.59
Non-vested PSUs as of December 31, 2023	i 18	$	i 2.89

The weighted-average grant-date fair value of PSUs granted during the years ended December 31, 2023, 2022 and 2021 were $ i 0.4 million, $ i 2.5 million and i nil, respectively. The total fair value of PSUs that vested during the years ended December 31, 2023, 2022 and 2021 were $ i 0.3 million, i nil and i nil, respectively.

Compensation expense associated with PSUs is recognized over the vesting period of the awards that are ultimately expected to vest when the achievement of the related performance objectives becomes probable. The total grant date fair value of unvested PSUs as of December 31, 2023 was $ i 0.1 million.

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RSUs Subject to Market-Based Vesting Conditions (“Market-Based RSUs”)

The Company previously granted Market-Based RSUs to certain employees, which were settleable into shares of Common Stock. The Market-Based RSUs were subject to vesting, if at all, based on the closing trading price per share of our Common Stock over any i 30 consecutive trading day-period that occurred prior to the end date specified in the underlying award agreement, subject to continued service through each such vesting date. Based on the Common Stock trading price, the market conditions for the outstanding Market-Based RSUs were not met, and no shares vested as of June 30, 2023. All outstanding unvested Market-Based RSUs were forfeited and cancelled during the three months ended June 30, 2023.

Wheels Up Stock Options

Wheels Up stock options granted under the Amended and Restated 2021 LTIP vest quarterly over a i i three-year / service period and expire on the tenth anniversary of the grant date. The following table summarizes the activity under the Amended and Restated 2021 LTIP related to Wheels Up stock options as of December 31, 2023:

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, 2023

i 77

i 100.00

i 47.52

Granted

i —

Exercised

i —

Forfeited

i —

Expired

i —

Outstanding Wheels Up stock options as of December 31, 2023

i 77

i 100.00

i 47.52

Exercisable Wheels Up stock options as of December 31, 2023

i 77

i 100.00

i 47.52

The weighted-average grant-date fair value of Wheels Up stock options granted during the years ended December 31, 2023, 2022 and 2021 were i nil, i nil and $ i 4.4 million, respectively. The total fair value of Wheels Up stock options that vested during the years ended December 31, 2023, 2022 and 2021 were i nil, $ i 2.9 million and $ i 0.7 million, respectively. No options were exercised during the years ended December 31, 2022 and 2021.

The aggregate intrinsic value as of December 31, 2023 for Wheels Up stock options that were outstanding and exercisable was $ i 0.

The weighted-average remaining contractual term as of December 31, 2023 for Wheels Up stock options that were outstanding and exercisable was approximately i 3.9 years and i 3.9 years, respectively.

Executive Performance Award

On November 30, 2023, the Compensation Committee of the Board approved the Wheels Up Experience Inc. Performance Award Agreement, dated as of November 30, 2023 (the “CEO Performance Award”), granted to George Mattson, the Company’s Chief Executive Officer. Except as set forth in Section III.A of the Amended and Restated 2021 LTIP, the CEO Performance Award incorporates the terms of the existing Amended and Restated 2021 LTIP, as it may be amended from time-to-time. The CEO Performance Award is intended to constitute a standalone employee benefit plan and any shares of Common Stock issued under the CEO Performance Award will not be issued under, or count against the number of shares of Common Stock reserved pursuant to, the Amended and Restated 2021 LTIP. The issuance of any shares under the CEO Performance Award upon vesting is contingent upon receipt of the approval of the award by the Company’s stockholders. If the CEO Performance Award is not approved by the Company’s stockholders at a future annual or special meeting of the Company’s stockholders or by written consent of the Company’s stockholders, or if on any Determination Date (as defined below) there is not a sufficient amount of shares authorized by the Company's stockholders to deliver the number of shares due under the

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CEO Performance Award, then upon vesting, if at all, any amounts payable under the CEO Performance Award will not be paid in the form of the issuance of new shares of Common Stock and instead will be payable in cash.

The CEO Performance Award is a one-time performance award granted to our Chief Executive Officer in lieu of future annual equity compensation grants and is intended to provide him with the opportunity to share in the long-term growth of the value of the Company. The award consists of a contingent right to receive a number of newly issued shares of Common Stock upon: (i) repayment of the Company’s borrowings under the $ i 390.0 million Term Loan, if at all; and (ii) satisfaction of service-based vesting conditions, which provide that i i i i 25 / / / % of the CEO Performance Award will be eligible to vest on each of September 20, 2024, 2025, 2026 and 2027, so long as our Chief Executive Officer remains employed with the Company as of such dates. A “Repayment Event” includes certain refinancings of the Term Loan on or before September 20, 2028, the scheduled maturity date of the Term Loan. Subject to the satisfaction of the applicable vesting conditions described above, the number of shares of Common Stock that may vest and be issued to our Chief Executive Officer will first be determined on December 31st of the year in which a Repayment Event occurs, and then on December 31st of each subsequent year (each such date, a “Determination Date”) until December 31, 2028 (the “Final Determination Date”). At any Determination Date following a Repayment Event, the number of shares of Common Stock issuable to our Chief Executive Officer in connection with such Determination Date, if any, will be determined using the then applicable percentage associated with the service-based vesting condition (the “Service Vested Percentage”).

The number of shares of Common Stock subject to vesting and issuance, if any, to our Chief Executive Officer on each Determination Date following a Repayment Event is based on a formula that aligns the number of shares of Common Stock issuable to our Chief Executive Officer with the repayment or refinancing of the Term Loan and Revolving Credit Facility, the then applicable dollar value of the shares of Common Stock issued to the Lenders under the Investor Rights Agreement and the volume weighted average price per share of Common Stock during the 60 trading day period prior to the applicable Determination Date (the “VWAP”). The number of shares of Common Stock, if any, issuable under the CEO Performance Award will vary depending on, among other things: (i) the occurrence and timing of a Repayment Event; (ii) the Lenders’ Total Investor Return (as defined in the CEO Performance Award) as a multiple of the aggregate principal amount of the Term Loan and any borrowings under the Revolving Credit Facility (as of the applicable Determination Date, the “Investor Multiple on Invested Capital”), if any; and (iii) the Service Vested Percentage as of the applicable Determination Date. There can be no assurance that the vesting conditions will be satisfied or that the foregoing variables will result in the vesting and issuance of any shares of Common Stock or payments of cash pursuant to the CEO Performance Award.

The performance-based vesting conditions for the CEO Performance Award were not met and i no shares vested as of December 31, 2023. As of December 31, 2023, the achievement of the related performance objective was deemed probable of being achieved on September 20, 2028, the scheduled maturity date of the Term Loan. The grant-date fair value of the CEO Performance Award, using a Monte Carlo simulation model, was $ i 148.4 million. The derived service period for the award began on November 30, 2023, and is i 5.2 years. For the CEO Performance Award, if realized, to be fully settled in connection with the Final Determination Date at a level consistent with the estimated grant date fair value, the Investor Multiple on Invested Capital will need to be greater than four times. We recognized compensation expense of $ i 2.5 million associated with the CEO Performance Award during the year ended December 31, 2023, and the remaining outstanding expense is expected to be recognized over i 5.1 years. As of December 31, 2023, since we have not obtained authorization from the Company’s stockholders for shares of Common Stock to satisfy settlement of the award in the form of the issuance of new shares, the carrying amount of award has been classified as mezzanine equity in the consolidated balance sheet under Contingent performance awards.

Subsequent to December 31, 2023, we granted a contingent performance award to our Chief Financial Officer with similar performance- and service-based vesting conditions with a grant-date fair value, using a Monte Carlo simulation model, of $ i 50.9 million (see Note 21).

Fair Value Estimates

We estimated fair value to measure compensation cost of the WUP profits interests, WUP restricted interests, WUP stock options, Wheels Up stock options and the CEO Performance Award on the date of grant using

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techniques that are considered to be consistent with the objective of measuring fair value. In selecting the appropriate technique, management considered, among other factors, the nature of the instrument, the market risks that it embodies, and the expected means of settlement.

Estimating fair values of the WUP profits interests, WUP restricted interests, WUP stock options, Wheels Up stock options and CEO Performance Award requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external factors. In addition, option-pricing models are highly volatile and sensitive to changes.

The following table summarizes the significant assumptions used to estimate the fair value on the date of grant:

2023(1)

2022

2021(2)

Expected term (in years)

i 5.2

n/a

i 7

Volatility

i 60

n/a

i 46

Risk-free rate

i 4.3

n/a

i 1.2

Expected dividend rate

i 0

n/a

i 0

(1) Assumptions used in the Monte Carlo simulation related to the CEO Performance Award.

(2) Assumptions used in the Black Scholes model related to the Wheels Up Stock Options.

Equity-Based Compensation Expense

Compensation expense for WUP profits interests recognized in the consolidated statements of operations was $ i 0.1 million, $ i 1.3 million and $ i 1.7 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Compensation expense for WUP restricted interests recognized in the consolidated statements of operations was i nil, $ i 4.3 million and $ i 14.2 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Compensation expense for WUP stock options under the WUP Option Plan and Wheels Up stock options under the Amended and Restated 2021 LTIP recognized in the consolidated statements of operations was $ i 1.1 million, $ i 7.7 million and $ i 8.5 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Compensation expense for RSUs and PSUs under the Amended and Restated 2021 LTIP recognized in the consolidated statements of operations was $ i 16.7 million, $ i 41.1 million and $ i 7.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Compensation expense for the CEO Performance Award recognized in the consolidated statements of operations was $ i 2.5 million, i nil and i nil for the years ended December 31, 2023, 2022 and 2021, respectively.

The following table summarizes equity-based compensation expense recognized by consolidated statement of operations line item (in thousands):

Year Ended December 31,

2023

2022

2021

Cost of revenue

i 3,927

i 14,456

i 4,541

Technology and development

i 2,096

i 3,180

i 1,340

Sales and marketing

i 1,764

i 11,009

i 5,185

General and administrative

i 17,846

i 60,334

i 38,607

Total equity-based compensation expense

i 25,633

i 88,979

i 49,673

Earnout Shares

The i 0.9 million Earnout Shares vest with the achievement of separate market conditions. One-third of the Earnout Shares will meet the market condition when the closing Common Stock price is greater than or equal to

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$ i 125.00 for any i 20 trading days within a period of i 30 consecutive trading days within i five years of the Business Combination Closing Date. An additional one-third will vest when the Common Stock is greater than or equal to $ i 150.00 over the same measurement period. The final one-third will vest when the Common Stock is greater than or equal to $ i 175.00 over the same measurement period.

Earnout Shares are attributable to vested WUP profits interests and restricted interests as of the date each of the Earnout Share market conditions are met. No Earnout Shares have been issued as of December 31, 2023.

The grant-date fair value of the Earnout Shares attributable to the holders of WUP profits interests and restricted interests, using a Monte Carlo simulation model, was $ i 57.9 million. The derived service period began on the Closing Date and had a weighted-average period of i 1.7 years.

Based on the Common Stock trading price the market conditions were not met and no Earnout Shares vested as of December 31, 2023. Compensation expense for Earnout Shares recognized in the consolidated statements of operations was $ i 1.4 million, $ i 38.5 million and $ i 18.0 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Treasury Stock

As of December 31, 2023, we had i 275,707 shares of treasury stock. The increase in treasury stock during the year ended December 31, 2023 reflects shares of Common Stock withheld to settle employee taxes due upon the vesting of RSUs, as well as shares of Common Stock acquired from stockholders who would otherwise have held fractional shares because the number of shares of Common Stock they held before the Reverse Stock Split was not evenly divisible by the reverse stock split ratio, which the Company acquired for cash (without interest, and subject to any required tax withholding applicable to a holder) in lieu of issuance of such fractional shares of Common Stock. During the year ended December 31, 2023, we did not cancel or reissue any shares of Common Stock held as treasury stock.

13. i WARRANTS

Prior to the Business Combination, Aspirational issued i 7,991,544 Public Warrants and i 4,529,950 Private Warrants. On the Business Combination Closing Date, Wheels Up assumed the Warrants. Each whole warrant entitles the holder to purchase 1/10th of one share of Common Stock at an exercise price of $ i 115.00 per whole share of Common Stock. The Warrants became exercisable on September 25, 2021, which was i 12 months after the closing of the Aspirational initial public offering, and expire on July 13, 2026 or earlier upon redemption or liquidation.

The Warrants are redeemable if certain conditions are met, as described below:

Redemption of Warrants when the price of Common Stock equals or exceeds $ i 180.00: Once the Warrants become exercisable, Wheels Up may redeem the outstanding Warrants (except as described below with respect to the Private Warrants):

•in whole and not in part;

•at a price of $ i 0.01 per Warrant;

•upon a minimum of i 30 days’ prior written notice of redemption to each Warrant holder;

•if, and only if, the last reported Common Stock sales price for any i 20 trading days within a i 30 trading day period ending on the third trading day prior to the date on which Wheels Up sends the notice of redemption to the Warrant holders (the “Reference Value”) equals or exceeds $ i 180.00 per share (as adjusted); and

•if there is an effective registration statement covering the issuance of the shares of Common Stock issuable upon exercise of the Warrants available during the 30-day redemption period.

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Redemption of Warrants when the price of Common Stock equals or exceeds $ i 100.00: Once the Warrants become exercisable, Wheels Up may redeem the outstanding Warrants:

•in whole and not in part;

•at a price of $ i 0.10 per Warrant upon a minimum of i 30 days’ prior written notice of redemption; provided, that holders will be able to exercise their Warrants on a cashless basis prior to redemption and receive that number of shares determined based on the redemption date and the then applicable fair market value per whole share of Common Stock;

•if, and only if, the Reference Value equals or exceeds $ i 100.00 per share (as adjusted); and

•if the Reference Value is less than $ i 180.00 per share (as adjusted), the Private Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants.

The exercise price and number of shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend or subdivision of shares, extraordinary dividend, share consolidation or combination, or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of shares at a price below its exercise price. Additionally, in no event will Wheels Up be required to net cash settle the Public Warrants.

The Private Warrants are identical to the Public Warrants underlying the units sold in the Aspirational initial public offering, except that the Private Warrants and the Common Stock issuable upon the exercise of the Private Warrants were not transferable, assignable or salable until i 30 days after the Business Combination Closing Date, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by Wheels Up and exercisable by such holders on the same basis as the Public Warrants.

In connection with the Business Combination, we filed a Registration Statement on Form S-1 that was declared effective by the SEC on August 24, 2021, as amended by Post-Effective Amendment No. 1 thereto that was declared effective by the SEC on March 21, 2022, as further amended by Post-Effective Amendment No. 2 to Form S-1 on Form S-3 filed with the SEC on July 20, 2022, and as further amended by Post-Effective Amendment No. 3 to Form S-1 on Form S-3 that was declared effective by the SEC on August 10, 2022 (collectively, the “Selling Stockholder Registration Statement”). The Selling Stockholder Registration Statement relates to the issuance of an aggregate of i 1,252,149 shares of Common Stock underlying the Public Warrants and Private Warrants. As of December 31, 2022, there have not been any warrants exercised and i 12,521,494 remain outstanding. The Public Warrants were delisted from trading on the NYSE on July 17, 2023 and deregistered under the Exchange Act effective October 5, 2023.

The warrant agreement governing the Warrants includes a provision that provides for potential changes to the settlement amounts dependent upon the characteristics of the holder of the Warrants. In addition, the warrant agreement includes a provision that in the event of a tender or exchange offer made to and accepted by holders of more than i 50% of the outstanding shares of a single class of ordinary shares, all holders of the Warrants would be entitled to receive cash for their Warrants (the “Tender Offer Provision”).

We evaluated the Warrants under ASC 815-40-15, which addresses equity versus liability treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s common stock. Under ASC 815-40-15, a warrant is not indexed to the issuer’s common stock if the terms of the warrant require an adjustment to the exercise price upon a specified event and that event is not an input to the fair value of the warrant. We determined that the Private Warrants are not indexed to Common Stock in the manner contemplated by ASC 815-40-15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. In addition, we concluded the Tender Offer Provision included in the warrant agreement fails the classified

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as equity criteria as contemplated by ASC 815-40-25. As a result of the above, the Warrants are classified as derivative liabilities.

14. i NON-CONTROLLING INTERESTS

MIP LLC is a single purpose entity formed for the purpose of administering and effectuating the award of WUP profits interests to employees, consultants and other qualified persons. Wheels Up is the sole managing member of MIP LLC and, as a result, consolidates the financial results of MIP LLC. We record non-controlling interests representing the ownership interest in MIP LLC held by other members of MIP LLC. In connection with the Business Combination, the Seventh Amended and Restated LLC Agreement of WUP was adopted, allowing members of MIP LLC, subject to certain restrictions, to exchange their vested WUP profits interests for cash or a corresponding number of shares of Common Stock, at the option of Wheels Up, based on the value of such WUP profits interests relative to their applicable participation threshold.

The decision of whether to exchange WUP profits interests for cash or Common Stock is made solely at the discretion of Wheels Up. Accordingly, the WUP profits interests held by MIP LLC are treated as permanent equity and changes in the ownership interest of MIP LLC are accounted for as equity transactions. Future exchanges of WUP profits interests will reduce the amount recorded as non-controlling interests and increase additional paid-in-capital on the consolidated balance sheets.

The calculation of non-controlling interests is as follows:

Number of LLC common units held by Wheels Up(1)

i 696,856,131

i 100.0

i 24,933,857

i 100.0

Number of vested WUP profits interests attributable to non-controlling interests(2)

i —

Total LLC common units and vested WUP profits interests outstanding

i 696,856,131

i 100.0

i 24,933,857

i 100.0

(1) WUP common units represent an equivalent ownership of Common Stock outstanding.

(2) Based on the closing price of Common Stock on the last trading day of the period covered by this Annual Report, there would be i no WUP common units issuable upon conversion of vested and unvested WUP profits interests outstanding as of December 31, 2023.

Weighted average ownership percentages are used to allocate net loss to Wheels Up and the non-controlling interest holders. The non-controlling interests weighted average ownership percentage was i 0.0%, i 0.1% and i 3.5% for the years ended December 31, 2023, 2022 and 2021, respectively.

15. i COMMITMENTS AND CONTINGENCIES

The Company has contractual obligations and commitments, primarily in the form of obligations to provide services for which we have already received deferred revenue (see Note 4), lease arrangements (see Note 1 1), repayment of long-term debt (see Note 9), legal proceedings and sales and use tax liability.

Legal Proceedings

From time to time, we are subject to various legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. While the outcome of these matters cannot be predicted with certainty, as of the date of this Annual Report we do not believe that the outcome of any of these matters, individually or in the aggregate, will have a material adverse effect on our financial condition, results of operations or cash flows.

GRP Litigation

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enforce our rights and remedies for wrongful termination by FE of that certain Fleet Guaranteed Revenue Program Agreement, dated November 1, 2021, between WUP and FE (the “GRP Agreement”). On June 30, 2023, FE notified us in writing of its immediate termination of the GRP Agreement. We believe that FE wrongfully terminated such agreement in breach thereof. We are seeking compensatory damages, including the return of material deposits held by FE under the GRP Agreement that are recorded in Other non-current assets on our consolidated balance sheets for each of the years ended December 31, 2023 and 2022, as well as attorneys’ fees and costs. We intend to vigorously pursue the action to recover the outstanding deposits and other damages from FE, but there can be no assurance as to the outcome of the lawsuit against FE. Our success in recovering the amounts from FE will depend upon several factors including the availability of funds by FE for the recoverable amounts. We are in the process of evaluating the effects of the foregoing events and we cannot make a reasonable estimate of any outcome, recovery or loss at this time.

Sales and Use Tax 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 December 31, 2023 and December 31, 2022, respectively, we estimate the potential exposure to such tax liability to be $ i 10.5 million and $ i 10.4 million, the expense for which is included in accrued expenses on the consolidated balance sheets and cost of revenue in the consolidated statements of operations.

16. i RELATED PARTIES

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

We incurred expenses of $ i 1.9 million, i nil and $ i 4.9 million for the years ended December 31, 2023, 2022 and 2021, respectively, from transactions related to the CCA with Delta. As of December 31, 2023, and December 31, 2022, $ i 0.4 million and $ i 2.4 million, respectively, were included in Accrued expenses on the consolidated balance sheets, and $ i 3.6 million and i nil, respectively, were included in Other non-current liabilities on the consolidated balance sheets related to transactions associated with the CCA with Delta.

The Company completed certain financing transactions with Delta, CK Wheels and Cox during the year ended December 31, 2023, including the Amended Note, the Term Loan and the issuance of a portion of the Investor Shares to each such party, as applicable, in each case in pro rata amounts equal to the amount of the Term Loan funded by each such party in relation to the total Term Loan. See Note 9 and Note 1 2 for additional information about the Term Loan, Revolving Credit Facility and issuance of pro rata portions of the Investor Shares to Delta, CK Wheels and Cox during the year ended December 31, 2023.

The remaining transactions with related parties during the years ended December 31, 2023, 2022 and 2021 were immaterial individually and in the aggregate for financial reporting purposes.

17. i RESTRUCTURING AND RELATED CHARGES

On March 1, 2023, we announced a restructuring plan (the “Restructuring Plan”) as part of our previously announced focus on implementing cost reductions and improving the efficiency of our operations, which consisted of a reduction in headcount (excluding pilots, maintenance and operations-support personnel).

During the year ended December 31, 2023, we incurred $ i 17.7 million of charges associated with the Restructuring Plan related to severance payments, employee benefits and equity-based compensation, which represents all cash and non-cash charges expected under the Restructuring Plan. During the fourth quarter of December 31, 2022, we recorded $ i 7.2 million of expenses related to actions taken in the fourth quarter of 2022 and in connection with the Restructuring Plan. i During the first half of 2023, the remaining $ i 10.5 million of expenses /

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related to the Restructuring Plan were incurred and recorded in the Company’s consolidated statement of operations, as follows (in thousands):



Cost of revenue	$	i 755
Technology and development	i 2,299
Sales and marketing	i 2,058
General and administrative	i 5,408
Total restructuring expenses	$	i 10,520

As of December 31, 2023, all charges associated with the Restructuring Plan have been paid.

18. i INCOME TAXES

We are subject to U.S. federal, state and local income taxes with respect to our allocable share of any taxable income or loss of WUP, as well as any standalone income or loss Wheels Up generates. WUP is treated as a partnership for U.S. federal and most applicable state and local income tax purposes and generally does not pay income taxes in most jurisdictions. Instead, any taxable income or loss generated by WUP is passed through to and included in the taxable income or loss of its members, including Wheels Up. We are also subject to income taxes in the various foreign jurisdictions in which we operate.

Income Tax Expense

The components of income (loss) before income taxes are follows (in thousands):


	Year Ended December 31,
	2023		2022		2021
Domestic	$	( i 493,787)	$	( i 555,889)	$	( i 197,172)
Foreign	i 7,783		i 512		i —
Loss before income taxes	$	( i 486,004)	$	( i 555,377)	$	( i 197,172)

The components of income tax expense are as follows (in thousands):

Year Ended December 31,

2023

2022

2021

Current income taxes

Federal

i —

State and local

i 139

i 101

i 75

Foreign

i 1,999

i 202

i —

Total current income taxes

i 2,138

i 303

i 75

Deferred income taxes

Federal

i —

State and local

( i 2)

( i 13)

( i 17)

Foreign

( i 753)

( i 120)

i —

Total deferred income taxes

( i 755)

( i 133)

( i 17)

Income tax expense

i 1,383

i 170

i 58

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A reconciliation from the statutory federal income tax rate to the effective income tax rate is as follows:

Year Ended December 31,

2023

2022

2021

Expected federal income taxes at statutory rate

i 21.0

State and local income taxes

i —

i 1.9

Permanent differences

( i 0.4)

( i 0.5)

i —

Partnership earnings not subject to tax

i —

( i 6.7)

Foreign tax rate differential

( i 0.3)

i —

Change in valuation allowance

( i 20.6)

( i 20.5)

( i 16.2)

Effective income tax rate

( i 0.3)

i —

The effective tax rate was ( i 0.3)%, i 0.0%, and i 0.0% for the years ended December 31, 2023, 2022 and 2021, respectively. Our effective tax rate for the years ended December 31, 2023, 2022 and 2021 differs from the federal statutory rate of 21% primarily due to a full valuation allowance against our net deferred tax assets where it is more likely than not that the deferred tax assets will not be realized.

Deferred Tax Assets and Liabilities

i The components of deferred tax assets and liabilities are as follows (in thousands):


	December 31, 2023		December 31, 2022
Deferred tax assets
Investment in partnership	$	i 98,322	$	i 145,000
Net operating loss carryforwards	i 145,683		i 87,745
Transaction costs	i 1,267		i 1,432
Tax credits	i 6,377		i 3,521
Deferred revenue	i 1,121		i 951
Equity-based compensation	i 1,851		i 685
Interest expense carryforwards	i 14,210		i 1,993
Other	i 566		i 600
Total deferred tax assets	i 269,397		i 241,927
Valuation allowance	( i 268,045)		( i 240,649)
Deferred tax assets, net	$	i 1,352	$	i 1,278

Deferred tax liabilities
Intangibles	$	( i 2,177)	$	( i 2,781)
Other	( i 864)		( i 902)
Total deferred tax liabilities	$	( i 3,041)	$	( i 3,683)
Net deferred tax assets (liabilities)	$	( i 1,689)	$	( i 2,405)

As of December 31, 2023, our U.S. federal and state net operating loss carryforwards for income tax purposes were $ i 579.0 million and $ i 456.0 million, respectively. Of our total federal net operating losses, $ i 480.0 million can be carried forward indefinitely, and the remainder will begin to expire in 2032 and fully expire in 2037 if not utilized. Our state net operating losses begin to expire in 2027.

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We evaluate the realizability of our deferred tax assets on a quarterly basis and establish valuation allowances when it is more likely than not that all or a portion of our deferred tax assets may not be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income and tax-planning strategies. As of December 31, 2023 and 2022, we concluded, based on the weight of all available positive and negative evidence, that it is more likely than not that the majority of deferred tax assets will not be realized. Accordingly, a valuation allowance of $ i 268.0 million has been established as of December 31, 2023. The $ i 27.4 million increase in valuation allowance was the result of a charge to deferred tax expense of $ i 70.5 million from operations and a $ i 97.9 million benefit to additional paid in capital, primarily resulting from the 2023 Common Stock Issuances (see Note 12). If or when recognized, approximately $ i 1.1 million of tax benefits related to the reversal of the valuation allowance on deferred tax assets as of December 31, 2023 will be credited directly to equity.

We currently expect the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested. Accordingly, the Company has not provided for the tax effect, if any, of limited outside basis differences of its foreign subsidiaries. If these foreign earnings are repatriated to the U.S., or if the Company determines that such earnings are repatriated to the U.S., or if the Company determines that such earnings will be remitted in a future period, additional tax provisions may be required.

Additionally, the Company is subject to the income tax effects associated with the Global Intangible Low-Taxed Income (“GILTI”) provisions. We have elected to recognize GILTI income in the period it arises and do not recognize deferred taxes for basis differences that may reverse in future years.

Section 382 Transaction

In general, under Section 382 of the Internal Revenue Code of 1986 (as amended, the “Code”), a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change net operating losses or tax credits to offset future taxable income or taxes. As a result of the Initial Issuance, the Company experienced an ownership change for the purpose of Section 382 of the Code during the third quarter of 2023, that will limit the availability of our tax attributes offset future income. A formal Section 382 analysis is being performed to determine the extent of the limitations. Our net operating losses and tax attributes are currently subject to a full valuation allowance. Accordingly, we do not believe it will have a material impact on our consolidated financial statements.

Uncertain Tax Positions

The Company is subject to tax in the U.S. and various foreign jurisdictions in which we operate. There were no reserves for uncertain tax positions as of December 31, 2023 and 2022. Additionally, although WUP is treated as a partnership for U.S. federal and state income taxes purposes, it is still required to file annual federal, state and local income tax returns, which are subject to examination by the taxing authorities. The statute of limitations is generally open for years beginning after 2019 for U.S. federal and state jurisdictions for WUP. WUP is currently under examination by the U.S. Internal Revenue Service for the 2020 tax year. As the audit remains in the initial stages, probability and potential magnitude of exposure cannot be estimated at this time.

OECD Pillar Two

The Organization for Economic Co-operation and Development has issued Pillar Two model rules introducing a new global minimum tax of 15% intended to be effective on January 1, 2024. While the US has not yet adopted the Pillar Two rules, various other governments around the world have implemented the legislation, including jurisdictions in which Wheels Up’s companies operate, and many other jurisdictions are in the process of implementing it. The Company is currently monitoring these developments and is in the process of evaluating the potential impact on its consolidated financial statements.

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19. i NET LOSS PER SHARE

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share data):

Year Ended December 31,

2023

2022

2021

Numerator:

Net loss attributable to Wheels Up Experience Inc. - basic and diluted

( i i 487,387 / )

( i i 555,160 / )

( i i 190,020 / )

Denominator:

Weighted-average shares of Common Stock outstanding - basic and diluted

i i 132,194,747 /

i i 24,567,164 /

i i 20,478,090 /

Basic and diluted net loss per share of Common Stock

( i i 3.69 / )

( i i 22.60 / )

( i i 9.28 / )

There were i i i no / / dividends declared or paid during the years ended December 31, 2023, 2022 or 2021.

Basic and diluted net loss per share were computed using the two-class method. The two-class method is an allocation formula that determines earnings or loss per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings or losses. Shares of unvested restricted stock are considered participating securities, because these awards contain a non-forfeitable right to participate equally in any dividends prior to forfeiture of the restricted stock, if any, irrespective of whether the awards ultimately vest. WUP restricted interests were converted into shares of restricted stock as of the Business Combination Closing Date (see Note 3). All issued and outstanding shares of restricted stock, whether vested or unvested, were included in the weighted-average shares of Common Stock outstanding beginning on the Business Combination Closing Date.

WUP profits interests held by other members of MIP LLC, which comprise the non-controlling interests (see Note 14), are not subject to the net loss per share calculation until such time the vested WUP profits interests are actually exchanged for shares of Common Stock.

The following securities were not included in the computation of diluted shares outstanding, because the effect would be anti-dilutive, or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period:

Year Ended December 31,

2023

2022

2021

Warrants(1)

i 1,252,149

Earnout Shares

i 900,000

RSUs and PSUs(2)

i 2,115,286

i 1,877,105

i 806,760

Stock options

i 1,205,754

i 1,359,295

i 1,648,470

Total anti-dilutive securities(3)

i 5,473,189

i 5,388,549

i 4,607,379

(1) Each Warrant entitles the holder to purchase 1/10th of one share of Common Stock at an exercise price of $ i 115.00 per whole share of Common Stock.

(2) Includes total RSUs and PSUs outstanding as of December 31, 2023 and total RSUs, PSUs and Market-Based RSUs outstanding as of December 31, 2022.

(3) Excludes shares issuable under the CEO Performance Award, as the number of shares issuable under the CEO Performance Award are not readily determinable until the first Determination Date after vesting and each successive Determination Date thereafter, if applicable.

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20. i GEOGRAPHIC INFORMATION

The Company attributes revenue among geographic areas based upon the location of the flight or service. i The following table summarizes the geographic allocation of total revenues for the years indicated (in thousands):


	Year Ended December 31,
	2023		2022		2021
United States	$	i 1,157,113	$	i 1,499,453	$	i 1,194,259
Other(1)	i 96,204		i 80,307		i —
Total	$	i 1,253,317	$	i 1,579,760	$	i 1,194,259

(1) Revenue for the year ended December 31, 2022 includes revenue from Air Partner from the date of acquisition, April 1, 2022.

Long-lived assets consist of property, equipment and leasehold improvements, internally developed capitalized software, net of accumulated depreciation and amortization, and operating lease right-of-use assets. The following table presents long-lived assets by geographic area on the dates indicated (in thousands):


	As of December 31,
	2023		2022
United States	$	i 401,965	$	i 497,396
Other	i 4,659		i 3,898
Total	$	i 406,624	$	i 501,294

21. i SUBSEQUENT EVENTS

Executive Performance Award

On March 3, 2024, the Compensation Committee of the Board approved the Wheels Up Experience Inc. Performance Award Agreement, dated as of March 3, 2024 (the “CFO Performance Award”), granted to Todd Smith, the Company’s Chief Financial Officer. Except as set forth in Section III.A of the Amended and Restated 2021 LTIP, the CFO Performance Award incorporates the terms of the existing Amended and Restated 2021 LTIP, as it may be amended from time-to-time. The CFO Performance Award is intended to constitute a standalone employee benefit plan and any shares of Common Stock issued under the CFO Performance Award will not be issued under, or count against the number of shares of Common Stock reserved pursuant to, the Amended and Restated 2021 LTIP. The issuance of any shares under the CFO Performance Award upon vesting is contingent upon receipt of the approval of the award by the Company’s stockholders. If the CFO Performance Award is not approved by the Company’s stockholders at a future annual or special meeting of the Company’s stockholders or by written consent of the Company’s stockholders, or if on any Determination Date there is not a sufficient amount of shares authorized by the Company’s stockholders to deliver the number of shares due under the CFO Performance Award, then upon vesting, if at all, any amounts payable under the CFO Performance Award will not be paid in the form of the issuance of new shares of Common Stock and instead will be payable in cash.

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of the year in which a Repayment Event occurs, and then on each Determination Date until the Final Determination Date At any Determination Date following a Repayment Event, the number of shares of Common Stock issuable to our Chief Financial Officer in connection with such Determination Date, if any, will be determined using the then applicable Service Vested Percentage.

The number of shares of Common Stock subject to vesting and issuance, if any, to our Chief Financial Officer on each Determination Date following a Repayment Event is based on a formula that aligns the number of shares of Common Stock issuable to our Chief Financial Officer with the repayment or refinancing of the Term Loan and Revolving Credit Facility, the then applicable dollar value of the shares of Common Stock issued to the Lenders under the Investor Rights Agreement and the VWAP. The number of shares of Common Stock, if any, issuable under the CFO Performance Award will vary depending on, among other things: (i) the occurrence and timing of a Repayment Event; (ii) the Investor Multiple on Invested Capital; and (iii) the Service Vested Percentage as of the applicable Determination Date. There can be no assurance that the vesting conditions will be satisfied or that the foregoing variables will result in the vesting and issuance of any shares of Common Stock or payments of cash pursuant to the CFO Performance Award.

The terms of the CFO Performance Award are substantially similar to the terms of the CEO Performance Award described in Note 15, Stockholders Equity and Equity-Based Compensation in our Notes to Financial Statements, except that the potential number of shares of Common Stock or payments of cash, as applicable, under the CFO Performance Award are lower than under the CEO Performance Award and certain differences in the definitions used for purposes of determining treatment upon a termination of service to the Company. The performance-based vesting conditions for the CFO Performance Award were not met and no shares vested as of the date of this Annual Report. As of the date of this Annual Report, the achievement of the related performance objective was deemed probable of being achieved on September 20, 2028, the scheduled maturity date of the Term Loan. The grant-date fair value of the CFO Performance Award, using a Monte Carlo simulation model, was $ i 50.9 million. The derived service period for the award began on March 3, 2024, and is i 4.9 years.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act of 1934, as amended (the “Exchange Act”)), that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow for timely decisions regarding required disclosure. It should be noted that, because of inherent limitations, our disclosure controls and procedures, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the disclosure controls and procedures are met.

As required by Rule 13a-15(b) under the Exchange Act, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the period covered by this Annual Report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2023, our disclosure controls and procedures were not effective to provide reasonable assurance that the information we are required to disclose was accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. Management reached this conclusion due to the Company’s failure to timely file a Current Report on Form 8-K to announce the disposition of the non-core aircraft management business. In response, we enhanced and formalized our processes to include additional levels of review to determine the appropriate filing requirements for material non-routine transactions. However, our failure to file such Current Report on Form 8-K does not impact our financial statements or results of operations. Our remediation of this deficiency is still ongoing.

Management's Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect transactions and the dispositions of assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures are being made only in accordance with appropriate authorizations of management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on its financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023 based on the criteria described in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management, including the Company’s Chief Executive Officer and Chief Financial Officer, concluded that our internal control over financial reporting was effective as of December 31, 2023 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.

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Remediation of Previously Identified Material Weaknesses

We previously identified and disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022, material weaknesses in our internal control over financial reporting related to information technology (“IT”) and the financial statement close and key business processes. Due to the actions taken by the Company to enhance controls and procedures, management has concluded that the previously identified and disclosed material weaknesses have been remediated as of December 31, 2023. Our remediation actions included:

•filling key open positions across our IT and finance organizations;

•reviewing elevated access entitlements in the systems supporting our financial processes and have further restricted access;

•implementing periodic user access reviews to ensure more timely review of elevated access, removal of terminated users and appropriateness of user provisioning on a whole;

•re-enforcing procedures on proper access administration and the need to retain documentation supporting requests and approvals;

•implementing preventative controls to better ensure segregation of duties;

•improving system capabilities around posting of journal entries, enhancing journal entry review and approval controls; and

•formalizing our accounting policies and ensuring training of relevant personnel on the importance of internal controls and compliance with policies.

Changes in Internal Control over Financial Reporting

Except for the items noted above, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Inherent Limitation on the Effectiveness of Internal Control over Financial Reporting and Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected or preventable.

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ITEM 9B. OTHER INFORMATION

(a) On March 3, 2024, the Compensation Committee of the Board approved the Wheels Up Experience Inc. Performance Award Agreement, dated as of March 3, 2024 (the “CFO Performance Award”), granted to Todd Smith, the Company’s Chief Financial Officer. The CFO Performance Award is intended to constitute a standalone employee benefit plan and any shares of Common Stock issued under the CFO Performance Award will not be issued under, or count against the number of shares of Common Stock reserved pursuant to, the Amended and Restated 2021 LTIP. Except as set forth in Section III.A of the Amended and Restated 2021 LTIP, the CFO Performance Award incorporates the terms of the existing Amended and Restated 2021 LTIP, a description of which is included under the caption “Proposal No. 4 – Amendment and Restatement of Wheels Up Experience Inc. 2021 Long-Term Incentive Plan” beginning on page 19 of the Company’s definitive proxy statement on Schedule 14A filed with the SEC on April 19, 2023, and which proposal was approved by the Company’s stockholders at the Company’s 2023 Annual Meeting of Stockholders held on May 31, 2023. The issuance of any shares under the CFO Performance Award upon vesting is contingent upon receipt of the approval of the award by the Company’s stockholders. If the CFO Performance Award is not approved by the Company’s stockholders at a future annual or special meeting of the Company’s stockholders or by written consent of the Company’s stockholders, or if on any Determination Date (as defined below) there are not a sufficient amount of shares authorized by the Company's stockholders to deliver the number of shares due under the CFO Performance Award, then upon vesting, if at all, any amounts payable under the CFO Performance Award will not be paid in the form of the issuance of new shares of Common Stock and instead will be payable in cash.

The CFO Performance Award is a one-time performance award granted to our Chief Financial Officer in lieu of future annual equity compensation grants and is intended to provide him with the opportunity to share in the long-term growth of the value of the Company. The award consists of a contingent right to receive a number of newly issued shares of Common Stock upon: (i) repayment of the Company’s borrowings under the $390.0 million Term Loan, if at all; and (ii) satisfaction of service-based vesting conditions, which provide that 25% of the CFO Performance Award will be eligible to vest on each of September 20, 2024, 2025, 2026 and 2027, so long as our Chief Financial Officer remains employed with the Company as of such dates. A “Repayment Event” includes certain refinancings of the Term Loan on or before September 20, 2028, the scheduled maturity date of the Term Loan. Subject to the satisfaction of the applicable vesting conditions described above, the number of shares of Common Stock that may vest and be issued to our Chief Financial Officer will first be determined on December 31st of the year in which a Repayment Event occurs, and then on December 31st of each subsequent year (each such date, a “Determination Date”) until December 31, 2028 (the “Final Determination Date”). At any Determination Date following a Repayment Event, the number of shares of Common Stock issuable to our Chief Financial Officer in connection with such Determination Date, if any, will be determined using the then applicable percentage associated with the service-based vesting condition (the “Service Vested Percentage”).

The number of shares of Common Stock subject to vesting and issuance, if any, on each Distribution Date following a Repayment Event is based on a formula that aligns the number of shares of Common Stock issuable to our Chief Financial Officer with the repayment or refinancing of the Term Loan and Revolving Credit Facility, the then applicable dollar value of the shares of Common Stock issued to the Lenders under the Investor Rights Agreement, and the volume weighted average price per share of Common Stock during the 60 trading day period prior to the applicable Determination Date. The number of shares of Common Stock, if any, issuable under the CFO Performance Award will vary depending on, among other things: (i) the occurrence and timing of a Repayment Event; (ii) the Lenders’ Total Investor Return (as defined in the CFO Performance Award) as a multiple of the aggregate principal amount of the Term Loan and any borrowings under the Revolving Credit Facility, if any; and (iii) the Service Vested Percentage as of the applicable Determination Date, as more fully described and set forth in the CFO Performance Award. As a result, the maximum number of shares of Common Stock that may be issued, if any, under the Performance Award will not be readily determinable until the first Determination Date following a Repayment Event and at each successive Determination Date thereafter through the Final Determination Date. There can be no assurance that the vesting conditions will be satisfied or that the foregoing variables will result in the vesting and issuance of any shares of Common Stock or payments of cash pursuant to the CFO Performance Award.

The CFO Performance Award also prescribes the following treatment of such award for certain termination of service scenarios, including a Change of Control (as defined in the CFO Performance Award):

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•If Mr. Smith voluntarily terminates his employment with the Company for any reason other than Good Reason (as defined in Mr. Smith’s Offer Letter, dated June 18, 2022 (the “Smith Offer Letter”)) or his employment terminates due to his death or Disability (as defined in the Amended and Restated 2021 LTIP), the Service Vested Percentage of the CFO Performance Award will be determined as of the last anniversary of September 20, 2023 (the “Vesting Commencement Date”) preceding his termination date and the total number of shares of Common Stock to be distributed to Mr. Smith or his estate, as applicable, will be determined as of each Determination Date through and until the Final Determination Date, without any condition of continuing employment or service. Any percentage of the Performance Award in excess of the Service Vested Percentage will be forfeited for no consideration.

•If Mr. Smith’s employment is terminated by the Company without Cause (which has the same meaning ascribed to the definition of “termination for cause” set forth in the Smith Offer Letter) or he resigns with Good Reason (as defined in the Smith Offer Letter): (i) the Service Vested Percentage of the Performance Award will be determined as-if he had remained employed though the next anniversary of the Vesting Commencement Date after the date of termination, or if the next anniversary of the Vesting Commencement Date is less than three (3) months following the date of termination, the Service Vested Percentage will be determined as-if he had remained employed through the next two (2) anniversaries of the Vesting Commencement Date; and (ii) the total number of shares of Common Stock to be distributed to Mr. Smith will be determined as of each Determination Date through and until the Final Determination Date, without any condition of continuing employment or service. Any percentage of the CFO Performance Award in excess of the Service Vested Percentage after taking into account the prior sentences will be forfeited for no consideration.

•If Mr. Smith is terminated by the Company for Cause (which has the same meaning ascribed to the definition of “termination for cause” set forth in the Smith Offer Letter), the CFO Performance Award, including any Service Vested Percentage thereof, will be forfeited for no consideration.

•If a Change of Control (for each use in this paragraph, as defined in the CFO Performance Agreement) occurs prior to any Determination Date, the date of the consummation of the Change of Control will be deemed a Repayment Event and the Final Determination Date, and the Service Vested Percentage will be 100% upon the consummation of such Change of Control. In addition, if a Change of Control is consummated within six (6) months following the termination of Mr. Smith’s employment for any reason other than for Cause (which has the same meaning ascribed to the definition of “termination for cause” set forth in the Smith Offer Letter), he will become 100% vested as of the date of the Change of Control.

Except as described above with respect to the definitions of “Cause,” “Good Reason” and “Disability,” the material terms of the CFO Performance Award, including the vesting conditions and computation to determine the number of shares of Common Stock issuable upon vesting, are substantially similar to the terms of the performance award granted to our Chief Executive Officer described under the subheading “Executive Performance Award” in Note 15, Stockholders’ Equity and Equity-Based Compensation of the Notes to Consolidated Financial Statements included herein; provided, that the potential number of shares of Common Stock or payments of cash, as applicable, under the CFO Performance Award are lower than under the CEO Performance Award.

The foregoing summary of the CFO Performance Award does not purport to be complete and is qualified in their entirety by reference to the CFO Performance Award, a copy of which is attached as Exhibit 10.29 to this Annual Report and incorporated by reference herein.

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ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

None.

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PART III.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information required by this Item 10. “Directors, Executive Officers and Corporate Governance,” is set forth under the headings “Proposal No. 1 – Election of Directors,” “Corporate Governance,” and “Information Regarding Executive Officers” in our definitive proxy statement to be filed with the SEC related to our 2024 Annual Meeting of Stockholders (the “Proxy Statement”), and is incorporated by reference.

Code of Ethics

Wheels Up has adopted a code of ethics entitled “Wheels Up Code of Business Conduct and Ethics” that applies to directors, officers, employees and contractors, including the Company’s principal executive officer and principal financial officer. It may be accessed through the “Governance” section of the Company's investor relations website at wheelsup.com/investors. Wheels Up also elects to disclose the information required by Item 5.05 of Form 8-K, “Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code of Ethics,” through the Company's investor relations website, and such information will remain available on such website for at least a 12-month period. A copy of the “Wheels Up Code of Business Conduct and Ethics” is available in print to any stockholder upon request.

Information on our website or available by hyperlink from our website is not incorporated into this Annual Report or our other securities filings and is not a part of those filings.

ITEM 11. EXECUTIVE COMPENSATION

Information required by this Item 11. “Executive Compensation,” is set forth under the headings “Executive Compensation” and “Director Compensation” in our Proxy Statement, and is incorporated by reference.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNER AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Securities Authorized for Issuance Under Equity Compensation Plans

The following table provides information on our equity compensation plans as of December 31, 2023.


Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants and rights (b)			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by stockholders(1)	1,906,342	(2)	$	100.00	(3)	3,046,200
Equity compensation plans not approved by stockholders(4)	1,197,398	(5)	75.45		(6)	—
Total	3,103,740		$	98.44		3,046,200

__________

(1) Consists of the Amended and Restated 2021 LTIP.

(2) Consists of (i) 1,829,610 RSUs that may be settled into a maximum of 1,829,610 shares of Common Stock under the Amended and Restated 2021 LTIP and (ii) 76,732 stock options to purchase up to 76,732 shares of Common Stock under the Amended and Restated 2021 LTIP.

(3) Reflects the weighted-average exercise price of outstanding stock options under the Amended and Restated 2021 LTIP as of December 31, 2023. The calculation of the weighted-average exercise price does not include outstanding equity awards that are received or exercised for no consideration.

(4) Consists of (i) the Wheels Up Partners Holdings LLC Option Plan (“WUP option plan”) and (ii) the 2022 Inducement Grant Plan. All awards made under the WUP option plan were made prior to the Business Combination Closing Date and were assumed by the Company in connection with the Business Combination. No further awards may be made under the WUP option plan and 2022 Inducement Grant Plan.

(5) Consists of (i) 1,129,022 stock options to purchase up to 1,129,022 shares of Common Stock under the WUP option plan and (ii) 68,376 RSUs that may be settled into a maximum of 68,376 shares of Common Stock under the 2022 Inducement Grant Plan.

(6) Reflects the weighted-average exercise price of outstanding stock options under the WUP option plan as of December 31, 2023. The calculation of the weighted-average exercise price does not include outstanding equity awards that are received or exercised for no consideration.

The above table excludes shares issuable under the CEO Performance Award, as no shares of Common Stock were authorized for issuance under the award as of December 31, 2023.

Other information required by this Item 12. “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” is set forth under the heading “Security Ownership of Certain Beneficial Owners and Management” in our Proxy Statement, and is incorporated by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information required by this Item 13. “Certain Relationships and Related Transactions, and Director Independence,” is set forth under the headings “Corporate Governance” and “Certain Relationships and Related Person Transactions” in our Proxy Statement, and is incorporated by reference.

139

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Information required by this Item 14. “Principal Accountant Fees and Services,” is set forth under the heading “Proposal No. 3 – Ratification of Appointment of Independent Registered Public Accounting Firm – Principal Accountant Fees and Services,” in our Proxy Statement, and is incorporated by reference.

PART IV.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)(1) Financial Statements

The financial statements are provided under Part II, Item 8. “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

(a)(2) Financial Statement Schedules

No financial statement schedules are provided because the information called for is not applicable or not required or is included in the consolidated financial statements or the notes thereto provided under Part II, Item 8. “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

(a)(3) Exhibits

The information required by this Item is set forth below.

The following exhibits are filed as part of, or incorporated by reference into, this Annual Report:



No.						Description of Exhibit
2.1						Agreement and Plan of Merger, dated as of February 1, 2021 by and among the Registrant, Wheels Up Partners Holdings LLC, KittyHawk Merger Sub LLC, Wheels Up Blocker Sub LLC, the Blocker Merger Subs (as defined in therein) and the Blockers (as defined therein) (Incorporated by reference to Exhibit 2.1 to Aspirational Consumer Lifestyle Corp’s Current Report on Form 8-K/A filed with the SEC on February 2, 2021)
2.2						Amendment No. 1 to Agreement and Plan of Merger, dated as of May 6, 2021 (incorporated by reference to Exhibit 2.1 to Aspirational Consumer Lifestyle Corp.’s Current Report on Form 8-K, filed with the SEC on May 6, 2021)
3.1						Amended and Restated Certificate of Incorporation of Wheels Up Experience Inc., filed on November 15, 2023 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on November 16, 2023)
3.2*						Amended and Restated By-Laws of Wheels Up Experience Inc., effective as of November 15, 2023
4.1						Specimen Class A Common Stock Certificate of Wheels Up Experience Inc. (incorporated by reference to Exhibit 4.5 to Aspirational Consumer Lifestyle Corp.’s Registration Statement on Form S-4/A (Registration No. 333-254304), filed with the SEC on May 6, 2021)
4.2						Warrant Agreement, dated as of September 25, 2020, between Aspirational Consumer Lifestyle Corp. and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 to Aspirational Consumer Lifestyle Corp.’s Current Report on Form 8-K, filed with the SEC on September 25, 2020)
4.3^						Note Purchase Agreement, dated as of October 14, 2022, among Wheels Up Partners LLC, Wheels Up Class A-1 Loan Trust 2022-1 and Wilmington Trust, National Association, as subordination agent and trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on October 17, 2022)

140


4.4						Intercreditor Agreement, dated as of October 14, 2022, among Wheels Up Class A-1 Loan Trust 2022-1 and Wilmington Trust, National Association, not in its individual capacity except as described therein, but solely as subordination agent and trustee (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K, filed with the SEC on October 17, 2022)
4.5***						Form of Participation Agreement N[_____], among Wheels Up Partners LLC, Wilmington Trust, National Association, not in its individual capacity, except as expressly stated therein, but solely as mortgagee, Wheels Up Class A-1 Loan Trust 2022-1, and Wilmington Trust, National Association, not in its individual capacity, except as expressly stated therein, but solely as subordination agent (Exhibit B to Note Purchase Agreement) (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K, filed with the SEC on October 17, 2022)
4.6***						Form of Trust Indenture and Mortgage N[_____], between Wheels Up Partners LLC and Wilmington Trust, National Association, not in its individual capacity, except as expressly stated therein, but solely as mortgagee (Exhibit C to Note Purchase Agreement) (incorporated by reference to Exhibit 4.4 to the Registrant’s Current Report on Form 8-K, filed with the SEC on October 17, 2022)
4.7						Form of Equipment Notes (incorporated by reference to Exhibit 4.5 to the Registrant’s Current Report on Form 8-K, filed with the SEC on October 17, 2022)
4.8						Guarantee, dated as of October 14, 2022 from each person listed in Schedule I thereto and each other person that becomes an additional guarantor pursuant thereto, to the beneficiaries listed in Schedule II thereto (incorporated by reference to Exhibit 4.6 to the Registrant’s Current Report on Form 8-K, filed with the SEC on October 17, 2022)
4.9						Loan Agreement, dated as of October 14, 2022, by and among Wheels Up Class A-1 Loan Trust 2022-1, each lender from time to time party thereto, and their permitted successors and assigns, and Wilmington Trust, National Association, as facility agent and security trustee for the lenders (incorporated by reference to Exhibit 4.7 to the Registrant’s Current Report on Form 8-K, filed with the SEC on October 17, 2022)
4.10						Security Agreement, dated as of October 14, 2022, among Wheels Up Class A-1 Loan Trust 2022-1 and Wilmington Trust, National Association, not in its individual capacity but solely as security trustee and the facility agent (incorporated by reference to Exhibit 4.8 to the Registrant’s Current Report on Form 8-K, filed with the SEC on October 17, 2022)
4.11^						Security Agreement (Intellectual Property), dated as of October 14, 2022, among Wheels Up Partners LLC, certain affiliates of Wheels Up Partners LLC listed on the signature pages thereto, and Wilmington Trust, National Association, as loan trustee (incorporated by reference to Exhibit 4.9 to the Registrant’s Current Report on Form 8-K, filed with the SEC on October 17, 2022)
4.12^						Omnibus Amendment No. 1, dated as of September 20, 2023, by and among Wheels Up Partners LLC, certain Affiliates of Wheels Up Partners LLC listed on the signature pages thereof, certain Guarantors listed on the signature pages thereof, Wheels Up Class A-1 Loan Trust 2022-1, each Lender party to the Loan Agreement described therein, Wilmington Trust, National Association, not in its individual capacity but solely as mortgagee, security trustee, facility agent, loan trustee, subordination agent and trustee, as applicable (incorporated by reference to Exhibit 10.12 to the Registrant’s Current Report on Form 8-K, filed with the SEC on September 21, 2023)
4.13*						Description of Our Securities
10.1						Amended and Restated Registration Rights Agreement, dated as of July 13, 2021, by and among Wheels Up Experience Inc., Aspirational Consumer Lifestyle Sponsor LLC, the owners of the Blockers and certain equity holders of Wheels Up and certain of their respective affiliates, as applicable, and the other parties thereto (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed with the SEC on July 19, 2021)
10.2						Seventh Amended and Restated Limited Liability Company Agreement of Wheels Up Partners Holdings LLC (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K, filed with the SEC on July 19, 2021)

141


10.3						Amendment No. 1 to the Seventh Amended and Restated Limited Liability Company Agreement of Wheels Up Partners Holdings LLC, dated as of April 1, 2022 (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q filed with the SEC on May 13, 2022)
10.4						Amendment No. 2 to Seventh Amended and Restated Limited Liability Company Agreement of Wheels Up Partners Holdings LLC, dated as of June 7, 2023 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on June 8, 2023)
10.5^						Credit Agreement, dated as of September 20, 2023, among Wheels Up Experience Inc., as Borrower, the subsidiaries of Wheels Up Experience Inc. party thereto, as guarantors, the lenders party thereto from time to time and U.S. Bank Trust Company, N.A., as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on September 21, 2023)
10.6						Amendment No. 1 to Credit Agreement, dated as of November 15, 2023, among Wheels Up Experience Inc., as Borrower, the subsidiaries of Wheels Up Experience Inc. party thereto, as guarantors, the lenders party thereto and U.S. Bank Trust Company, N.A., as administrative agent and collateral agent (with a conformed version of the Credit Agreement through and including Amendment No. 1 thereto provided in Exhibit A thereto) (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on November 16, 2023)
10.7^						Security Agreement, dated as of September 20, 2023, by and among U.S. Bank Trust Company, N.A., as collateral agent, Wheels Up Experience Inc., as Borrower, and the guarantor parties thereto (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed with the SEC on September 21, 2023)
10.8+^						Aircraft Mortgage and Security Agreement (First-Priority Lien), dated as of September 20, 2023, by Wheels Up Parents LLC, as owner, in favor of U.S. Bank Trust Company, N.A., in its capacity as Collateral Agent as mortgagee for the Secured Parties (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K, filed with the SEC on September 21, 2023)
10.9+^						Aircraft Mortgage and Security Agreement (Junior Lien), dated as of September 20, 2023, by Wheels Up Partners LLC, as owner in favor of U.S. Bank Trust Company, N.A., in its capacity as Collateral Agent as mortgagee for the Secured Parties (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K, filed with the SEC on September 21, 2023)
10.10+^						Investment and Investor Rights Agreement, dated as of September 20, 2023, by and among Wheels Up Experience Inc. and the entities listed on Schedule A thereto (incorporated by reference to Exhibit 10.10 to the Registrant’s Current Report on Form 8-K, filed with the SEC on September 21, 2023)
10.11+						Amendment No. 1 to Investment and Investor Rights Agreement, dated as of November 15, 2023, by and between Wheels Up Experience Inc. and the entities listed on the signature pages thereto (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed with the SEC on November 16, 2023)
10.12						Form of Joinder to Investment and Investor Rights Agreement (Exhibit A to Amendment No. 1 to Investment and Investor Rights Agreement (included in Exhibit 10.2 thereto) (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K, filed with the SEC on November 16, 2023)
10.13+						Registration Rights Agreement, dated as of September 20, 2023, by and among Wheels Up Experience Inc. and the equity holders set forth on Schedule 1 thereto (incorporated by reference to Exhibit 10.11 to the Registrant’s Current Report on Form 8-K, filed with the SEC on September 21, 2023)
10.14						Form of Joinder to Registration Rights Statement (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K, filed with the SEC on November 16, 2023)
10.15†						Wheels Up Partners Holdings LLC Option Plan, and the form of Option Agreement thereunder (incorporated by reference to Exhibit 10.18 to Aspirational Consumer Lifestyle Corp.’s Registration Statement on Form S-4 (Registration No. 333-254304), filed with the SEC on March 15, 2021).

142


10.16†						Wheels Up Partners Holdings LLC Equity Incentive Plan I (incorporated by reference to Exhibit 10.19 to Aspirational Consumer Lifestyle Corp.’s Registration Statement on Form S-4 (Registration No. 333-254304), filed with the SEC on March 15, 2021)
10.17†						Wheels Up Partners Holdings LLC Equity Incentive Plan II (incorporated by reference to Exhibit 10.20 to Aspirational Consumer Lifestyle Corp.’s Registration Statement on Form S-4 (Registration No. 333-254304), filed with the SEC on March 15, 2021)
10.18†						Wheels Up Partners Holdings LLC Equity Incentive Plan III (incorporated by reference to Exhibit 10.21 to Aspirational Consumer Lifestyle Corp.’s Registration Statement on Form S-4 (Registration No. 333-254304), filed with the SEC on March 15, 2021)
10.19†						Wheels Up Partners Holdings LLC Equity Incentive Plan IV (incorporated by reference to Exhibit 10.22 to Aspirational Consumer Lifestyle Corp.’s Registration Statement on Form S-4 (Registration No. 333-254304), filed with the SEC on March 15, 2021)
10.20†						Wheels Up Partners Holdings LLC Equity Incentive Plan V (incorporated by reference to Exhibit 10.23 to Aspirational Consumer Lifestyle Corp.’s Registration Statement on Form S-4 (Registration No. 333-254304), filed with the SEC on March 15, 2021)
10.21†						Wheels Up Partners Holdings LLC Equity Incentive Plan VI (incorporated by reference to Exhibit 10.24 to Aspirational Consumer Lifestyle Corp.’s Registration Statement on Form S-4 (Registration No. 333-254304), filed with the SEC on March 15, 2021)
10.22†						Wheels Up Partners Holdings LLC Equity Incentive Plan VII (incorporated by reference to Exhibit 10.25 to Aspirational Consumer Lifestyle Corp.’s Registration Statement on Form S-4 (Registration No. 333-254304), filed with the SEC on March 15, 2021)
10.23†						Wheels Up Partners Holdings LLC Equity Incentive Plan VIII (incorporated by reference to Exhibit 10.26 to Aspirational Consumer Lifestyle Corp.’s Registration Statement on Form S-4 (Registration No. 333-254304), filed with the SEC on March 15, 2021)
10.24†						Form of Profits Interest Award Agreement under Equity Incentive Plans I-VIII (incorporated by reference to Exhibit 10.27 to Aspirational Consumer Lifestyle Corp.’s Registration Statement on Form S-4 (Registration No. 333-254304), filed with the SEC on March 15, 2021)
10.25†						Form of Restricted Interest Award Agreement under Equity Incentive Plans I-VIII (incorporated by reference to Exhibit 10.28 to Aspirational Consumer Lifestyle Corp.’s Registration Statement on Form S-4 (Registration No. 333-254304), filed with the SEC on March 15, 2021)
10.26†						Wheels Up Experience Inc. 2021 Long-Term Incentive Plan, as amended and restated April 1, 2023, and forms of award agreements thereunder (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on June 1, 2023)
10.27†						Wheels Up Experience Inc. 2022 Inducement Grant Plan and forms of award agreements thereunder (incorporated by reference to Exhibit 99.1 to the Registrant’s Registration Statement on Form S-8 (File No. 333-265991) filed with the SEC on July 1, 2022)
10.28†+						Wheels Up Experience Inc. Performance Award Agreement, dated as of November 30, 2023, by and between Wheels Up Experience Inc. and George Mattson (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed with the SEC on December 1, 2023)
10.29†+						Wheels Up Experience Inc. Performance Award Agreement, dated as of March 3, 2024 , by and between Wheels Up Experience Inc. and Todd Smith
10.30†+						Amended and Restated Employment Agreement, dated as of November 30, 2023, by and among Wheels Up Experience Inc., Wheels Up Partners LLC and George Mattson (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on December 1, 2023)
10.31†						Offer Letter, dated June 18, 2022, by and between Todd Smith and Wheels Up Partners LLC (and attachments) (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on June 23, 2022)

143


10.32†^						Employment Agreement, dated as of December 28, 2020, by and between Laura Heltebran and Wheels Up Partners LLC (incorporated by reference to Exhibit 10.30 to the Registrant’s Current Report on Form 8-K, filed with the SEC on July 19, 2021)
10.33†^						Amendment No.1 to Employment Agreement, dated as of December 31, 2021, by and between Laura Heltebran and Wheels Up Partners LLC originally dated December 28, 2020 (incorporated by reference to Exhibit 10.24 to the Registrant’s Annual report on Form 10-K, filed with the SEC on March 10, 2022)
10.34†+						Offer Letter, dated July 19, 2022, by and between Mark Briffa and Air Partner Limited (including the Director’s Service Agreement attached as Annex A thereto and Amendment No. 1 thereto) (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on May 9, 2023)
10.35†+						Offer Letter, dated April 28, 2023, by and between David Godsman and Wheels Up Partners LLC (and attachments) (incorporated by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on August 14, 2023)
10.36†+						Offer Letter, dated May 2, 2023, by and between Kristen Lauria and Wheels Up Partners LLC (and attachments) (incorporated by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on August 14, 2023)
10.37†						Offer Letter, dated February 1, 2024, by and between David Holtz and Wheels Up Partners LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on February 5, 2024 )
10.38†						Employment Agreement, dated as of October 28, 2020, by and between Lee Applbaum and Wheels Up Partners LLC (incorporated by reference to Exhibit 10.42 to Aspirational Consumer Lifestyle Corp.’s Registration Statement on Form S-4/A (Registration No. 333‑254304), filed with the SEC on May 6, 2021)
10.39†+						Separation and Release Agreement, dated April 26, 2023, by and between Lee Applbaum and Wheels Up Partners LLC (incorporated by reference to Exhibit 10.1.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on May 2, 2023)
10.40†						Employment Agreement, dated as of April 17, 2020, by and among Kenneth Dichter, Wheels Up Partners LLC and Wheels Up Partners Holdings LLC (incorporated by reference to Exhibit 10.39 to Aspirational Consumer Lifestyle Corp.’s Registration Statement on Form S-4/A (Registration No. 333-254304), filed with the SEC on May 6, 2021)
10.41†						Release and Waiver, dated as of May 9, 2023, by and among Kenneth Dichter, Wheels Up Experience Inc., Wheels Up Partners Holdings LLC, Wheels Up Partners LLC and Wheels Up MIP LLC (solely with respect to Section 2(c)(2) thereof) (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on May 9, 2023)
10.42†						Executive Chairman Agreement, dated as of May 9, 2023, by and between Ravi Thakran and Wheels Up Experience Inc.(incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed with the SEC on May 9, 2023)
10.43†						Consulting Agreement, dated as of June 23, 2023, by and between Ravi Thakran and Wheels Up Partners LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K/A, filed with the SEC on June 27, 2023)
10.44†						Employment Offer Letter, dated as of November 8, 2021, by and between Stevens J. Sainte-Rose and Wheels Up Partners LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on May 12, 2022)
10.45†						Form of Indemnification Agreement (incorporated by reference to Exhibit 10.32 to the Registrant’s Current Report on Form 8-K, filed with the SEC on July 19, 2021)
10.46+^						Commercial Cooperation Agreement, dated as of January 17, 2020, by and among Delta Air Lines, Inc., Wheels Up Partners LLC and Wheels Up Partners Holdings LLC (incorporated by reference to Exhibit 10.43 to Aspirational Consumer Lifestyle Corp.’s Registration Statement on Form S-4/A (Registration No. 333-254304), filed with the SEC on May 6, 2021)

144


10.47+						Amendment No. 1 to Commercial Cooperation Agreement, dated as of March 15, 2021, by and among Delta Air Lines, Inc., Wheels Up Partners LLC and Wheels Up Partners Holding LLC (incorporated by reference to Exhibit 10.44 to Aspirational Consumer Lifestyle Corp.’s Registration Statement on Form S-4/A (Registration No. 333-254304), filed with the SEC on May 6, 2021)
10.48						Amendment No. 2 to Commercial Cooperation Agreement, dated as of September 2 1 , 2023, by and among Delta Air Lines, Inc., Wheels Up Partners LLC and Wheels Up Partners Holdings LLC (incorporated by reference to Exhibit 10.13 to the Registrant’s Current Report on Form 8-K, filed with the SEC on September 21, 2023)
10.49						Secured Promissory Note , dated as of August 8, 2023, between Wheels Up Experience Inc. and Delta Air Lines, Inc., as Payee (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K, filed with the SEC on September 21, 2023)
10.50						First Amendment to Secured Promissory Note, dated as of August 15, 2023, between Wheels Up Experience Inc. and Delta Air Lines, Inc., as Payee (incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K, filed with the SEC on September 21, 2023)
10.51						Second Amendment to Secured Promissory Note, dated as of August 21, 2023, between Wheels Up Experience Inc. and Delta Air Lines, Inc., as Payee (incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8-K, filed with the SEC on September 21, 2023)
10.52						Third Amendment to Secured Promissory Note, dated as of September 6, 2023, between Wheels Up Experience Inc. and Delta Air Lines, Inc., as Payee (incorporated by reference to Exhibit 10.8 to the Registrant’s Current Report on Form 8-K, filed with the SEC on September 21, 2023)
10.53						Fourth Amendment to Secured Promissory Note, dated as of September 14, 2023, between Wheels Up Experience Inc. and Delta Air Lines, Inc., as Payee (incorporated by reference to Exhibit 10.9 to the Registrant’s Current Report on Form 8-K, filed with the SEC on September 21, 2023)
10.54						Letter Agreement, dated as of July 31, 2023, by and among Wheels Up Partners LLC, Wheels Up Class A-1 Loan Trust 2022-1, Wilmington Trust National Association, as facility agent, security trustee, mortgagee, subordination agent and loan trustee, and each lender listed on the signature pages thereof (incorporated by reference to Exhibit 10.13 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on November 9, 2023)
10.55						Letter Agreement, dated as of August 4, 2023, by and among Wheels Up Partners LLC, Wheels Up Class A-1 Loan Trust 2022-1, Wilmington Trust National Association, as facility agent, security trustee, mortgagee, subordination agent and loan trustee, and each lender listed on the signature pages thereof (incorporated by reference to Exhibit 10.14 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on November 9, 2023)
10.56						Letter Agreement, dated as of August 9, 2023, by and among Wheels Up Partners LLC, Wheels Up Class A-1 Loan Trust 2022-1, Wilmington Trust National Association, as facility agent, security trustee, mortgagee, subordination agent and loan trustee, and each lender listed on the signature pages thereof (incorporated by reference to Exhibit 10.15 to the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on November 9, 2023)
16.1						Letter from Marcum LLP to the U.S. Securities and Exchange Commission dated July 19, 2021 (incorporated by reference to Exhibit 16.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on July 19, 2021).
21.1*						List of Subsidiaries
23.1*						Consent of Grant Thornton LLP
24.1*						Power of Attorney (included on signature pages)
31.1*						Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*						Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**						Certification of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**						Certification of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97.1*						Wheels Up Experience Inc. Executive Compensation Recoupment Policy, adopted December 12, 2022

145


99.1***						Schedule I (revised as of December 31, 2023 )
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101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document
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* Filed herewith.

** Furnished herewith.

*** Filed herewith. Pursuant to Instruction 2 to Item 601 of Regulation S-K, Exhibit 99.1 incorporated by reference herein contains a list of documents applicable to the aircraft collateral as of December 31, 2023 that are described in Exhibits 4.5 and 4.6 incorporated by reference herein, which documents are substantially identical to those in Exhibits 4.5 and 4.6 incorporated by reference herein, except for the information identifying the aircraft collateral in question and various information relating to the principal amounts of the Equipment Notes (as defined in Exhibit 4.5 incorporated by reference herein) relating to such aircraft collateral. Exhibit 99.1 incorporated by reference herein sets forth the details by which such documents differ from the corresponding representative sample of documents incorporated by reference herein as Exhibits 4.5 and 4.6 with respect to the aircraft collateral as of December 31, 2023.

† Identifies each management contract or compensatory plan or arrangement.

+ Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Item (601)(b)(10) of Regulation S-K.

^ Schedules and exhibits have been omitted pursuant to Item 601(a)(5) and/or Item 601(b)(2) of Regulation S-K. The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

ITEM 16. FORM 10-K SUMMARY

None.

146

SIGNATURES

Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	WHEELS UP EXPERIENCE INC.


March 7, 2024		/s/ *George Mattson*
	Name:	George Mattson
	Title:	Chief Executive Officer
		(Principal Executive Officer)


March 7, 2024		/s/ *Todd Smith*
	Name:	Todd Smith
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)

Each person whose individual signature appears below hereby authorizes and appoints George Mattson and Todd Smith, and each of them, with full power of substitution and resubstitution and full power to act without the other, as his or her true and lawful attorney-in-fact and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file any and all amendments to this annual report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his or her substitute or substitutes may lawfully do or cause to be done by virtue thereof.

147

Pursuant to the requirements of Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ George Mattson

Chief Executive Officer and Director

George Mattson

(Principal Executive Officer)

/s/ Todd Smith

Chief Financial Officer

Todd Smith

(Principal Financial and Accounting Officer)

/s/ Adam Zirkin

Chairman of the Board of Directors

Adam Zirkin

/s/ David Adelman

Director

David Adelman

/s/ Timothy Armstrong

Director

Timothy Armstrong

/s/ Alain Bellemare

Director

Alain Bellemare

/s/ Adam Cantor

Director

Adam Cantor

/s/ Andrew Davis

Director

Andrew Davis

/s/ Dwight James

Director

Dwight James

/s/ Daniel Janki

Director

Daniel Janki

/s/ Thomas Klein

Director

Thomas Klein

/s/ Zachary Lazar

Director

Zachary Lazar

/s/ Lee Moak

Director