RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

9 Months Ended

Sep. 30, 2022

Accounting Changes and Error Corrections [Abstract]

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

In connection with the preparation of the Company’s consolidated financial statements as of and for the year ended December 31, 2022, the Company’s management identified an error in its previously issued unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2022. The identified error related to the recognition of a goodwill impairment charge that should have been recognized during the three months ended September 30, 2022.

In connection with these errors, the Company is restating the previously issued unaudited condensed consolidated financial statements, and related notes thereto, as of and for the three and six months ended September 30, 2022, as filed in the Company’s Quarterly Report on Form 10-Q on November 9, 2022. The Company’s unaudited condensed consolidated financial statements as of and for the three and six months ended September 30, 2022 included in this Form 10-Q/A have been restated to correct the error as presented in the following tables.

The table below sets forth the unaudited condensed consolidated balance sheet information as of September 30, 2022, including the balances as reported, adjustments and the balances as restated (in thousands, except per share amounts):


	September 30, 2022
	As Reported		Adjustments		As Restated
ASSETS
Current assets:
Cash and cash equivalents	$	285,498			$	285,498
Accounts receivable, net	127,354				127,354
Other receivables	8,920				8,920
Parts and supplies inventories, net	18,127				18,127
Aircraft inventory	33,231				33,231
Aircraft held for sale	20,113				20,113
Prepaid expenses	38,561				38,561
Other current assets	19,790				19,790
Total current assets	551,594		—		551,594
Property and equipment, net	387,802				387,802
Operating lease right-of-use assets	111,250				111,250
Goodwill	521,847		(62,000)		459,847
Intangible assets, net	146,881				146,881
Restricted cash	26,416				26,416
Other non-current assets	63,948				63,948
Total assets	$	1,809,738	$	(62,000)	$	1,747,738
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	48,962			$	48,962
Accrued expenses	128,557				128,557
Deferred revenue, current	966,367				966,367
Operating lease liabilities, current	30,051				30,051
Intangible liabilities, current	2,000				2,000
Other current liabilities	18,126				18,126
Total current liabilities	1,194,063		—		1,194,063
Deferred revenue, non-current	1,885				1,885
Operating lease liabilities, non-current	87,027				87,027
Warrant liability	2,003				2,003
Intangible liabilities, non-current	12,583				12,583
Other non-current liabilities	2,742				2,742
Total liabilities	1,300,303		—		1,300,303
Equity:
Class A common stock, $0.0001 par value; 2,500,000,000 authorized; 248,131,546 shares issued and 245,744,961 shares outstanding as of September 30, 2022	25				25
Additional paid-in capital	1,522,368				1,522,368
Accumulated deficit	(988,964)		(62,000)		(1,050,964)
Accumulated other comprehensive loss	(16,647)				(16,647)
Treasury stock, at cost, 2,386,585 shares	(7,347)				(7,347)
Total Wheels Up Experience Inc. stockholders’ equity	509,435		(62,000)		447,435
Non-controlling interests	—				—
Total equity	509,435		(62,000)		447,435
Total liabilities and equity	$	1,809,738	$	(62,000)	$	1,747,738

The table below sets forth the unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2022, including the balances as reported, adjustments and the as restated balances (in thousands, except per share amounts):


	September 30, 2022
	Three Months Ended						Nine Months Ended
	As Reported		Adjustments		As Restated		As Reported		Adjustments		As Restated
Revenue	$	420,356			$	420,356	$	1,171,503			$	1,171,503

Costs and expenses:
Cost of revenue	403,042				403,042		1,144,698				1,144,698
Technology and development	16,639				16,639		42,436				42,436
Sales and marketing	30,830				30,830		87,761				87,761
General and administrative	44,323				44,323		130,200				130,200
Depreciation and amortization	16,500				16,500		46,862				46,862
Gain on sale of aircraft held for sale	(1,316)				(1,316)		(3,950)				(3,950)
Impairment of goodwill	—		62,000		62,000		—		62,000		62,000
Total costs and expenses	510,018		62,000		572,018		1,448,007		62,000		1,510,007

Loss from operations	(89,662)		(62,000)		(151,662)		(276,504)		(62,000)		(338,504)

Other income (expense):
Change in fair value of warrant liability	2,504				2,504		8,265				8,265
Loss on extinguishment of debt	—				—		—				—
Interest income	1,130				1,130		1,612				1,612
Interest expense	—				—		—				—
Other expense, net	(625)				(625)		(1,505)				(1,505)
Total other income (expense)	3,009		—		3,009		8,372		—		8,372

Loss before income taxes	(86,653)		(62,000)		(148,653)		(268,132)		(62,000)		(330,132)

Income tax expense	(185)				(185)		(505)				(505)

Net loss	$	(86,838)	$	(62,000)	$	(148,838)	$	(268,637)	$	(62,000)	$	(330,637)
Less: Net loss attributable to non-controlling interests	—				—		(387)				(387)
Net loss attributable to Wheels Up Experience Inc.	$	(86,838)	$	(62,000)	$	(148,838)	$	(268,250)	$	(62,000)	$	(330,250)

Net loss per share of Class A common stock - basic and diluted	$	(0.36)	$	(0.25)	$	(0.61)	$	(1.10)	$	(0.25)	$	(1.35)
Weighted-average shares of Class A common stock outstanding - basic and diluted	244,350,959				244,350,959		244,347,871				244,347,871

The tables below sets forth the unaudited condensed consolidated statements of comprehensive (loss) income for the three and nine months ended September 30, 2022, including balances as reported, adjustments and balances as restated amounts (in thousands):


	September 30, 2022
	Three Months Ended						Nine Months Ended
	As Reported		Adjustments		As Restated		As Reported		Adjustments		As Restated
Net loss	$	(86,838)	$	(62,000)	$	(148,838)	$	(268,637)	$	(62,000)	$	(330,637)
Other comprehensive loss:
Foreign currency translation adjustments	(8,329)				(8,329)		(16,647)				(16,647)
Comprehensive loss	(95,167)		(62,000)		(157,167)		(285,284)		(62,000)		(347,284)
Less: Comprehensive loss attributable to non-controlling interests	—				—		(387)				(387)
Comprehensive loss attributable to Wheels Up Experience Inc.	$	(95,167)	$	(62,000)	$	(157,167)	$	(284,897)	$	(62,000)	$	(346,897)

The table below sets forth the unaudited condensed consolidated statement of stockholders’ equity at September 30, 2022, including balances as reported, adjustments and balances as restated amounts (in thousands):


	Class A Common Stock									Treasury Stock
	Shares	Amount		Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive loss		Shares	Amount		Non-controlling interests		Total
Balance at September 30, 2022 as reported	248,131,546	$	25	$	1,522,368	$	(988,964)	$	(16,647)	2,386,585	$	(7,347)	$	—	$	509,435
Adjustment to net loss						(62,000)									(62,000)
Balance at September 30, 2022 as restated	248,131,546	$	25	$	1,522,368	$	(1,050,964)	$	(16,647)	2,386,585	$	(7,347)	$	—	$	447,435

The table below sets forth the unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2022, including balances as reported, adjustments and balances as restated amounts (in thousands):


	Nine Months Ended September 30, 2022
	As Reported		Adjustments		As Restated
OPERATING ACTIVITIES:
Net loss	$	(268,637)	$	(62,000)	$	(330,637)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	46,862				46,862
Amortization of deferred financing costs and debt discount	—				—
Equity-based compensation	65,839				65,839
Change in fair value of warrant liability	(8,265)				(8,265)
Provision for bad debt expense	—				—
Provision for (recovery of) expected credit losses	(489)				(489)
Gain on sale of aircraft held for sale	(3,950)				(3,950)
Loss on extinguishment of debt	—				—
Impairment of goodwill	—		62,000		62,000
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable	(31,474)				(31,474)
Other receivables	(859)				(859)
Parts and supplies inventories	(8,544)				(8,544)
Aircraft inventory	(33,231)				(33,231)
Prepaid expenses	(8,065)				(8,065)
Other current assets	(2,477)				(2,477)


Other non-current assets	(27,534)				(27,534)
Operating lease liabilities, net	(624)				(624)
Accounts payable	(2,885)				(2,885)
Accrued expenses	(1,131)				(1,131)
Other current liabilities	812				812
Other non-current liabilities	(1,036)				(1,036)
Deferred revenue	(2,653)				(2,653)
Net cash (used in) provided by operating activities	(288,341)		—		(288,341)

INVESTING ACTIVITIES:
Purchases of property and equipment	(80,039)				(80,039)
Purchase of aircraft held for sale	(39,894)				(39,894)
Proceeds from sale of aircraft held for sale, net	41,833				41,833
Acquisition of businesses, net of cash acquired	(75,093)				(75,093)
Capitalized software development costs	(18,532)				(18,532)
Net cash (used in) provided by investing activities	(171,725)		—		(171,725)

FINANCING ACTIVITIES:
Proceeds from stock option exercises	—				—
Purchase of Shares for Treasury	(7,347)				(7,347)
Proceeds from Business Combination and PIPE Investment	—				—
Transaction costs in connection with the Business Combination and PIPE Investment	—				—
Proceeds from long-term debt	—				—
Repayments of long-term debt	—				—
Repayment of loans to employees	—				—
Net cash used in financing activities	(7,347)		—		(7,347)

Effect of exchange rate changes on cash	(7,395)				(7,395)

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(474,808)				(474,808)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH BEGINNING OF PERIOD	786,722				786,722
CASH, CASH EQUIVALENTS AND RESTRICTED CASH END OF PERIOD	$	311,914	$	—	$	311,914