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Nature of Business | 9 Months Ended
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Sep. 30, 2024
Nature of Business |
Nature of Business | (1) Nature of Business Inspirato Incorporated and its subsidiaries (the “Company”, also referred to as “Inspirato”) is a subscription-based luxury travel company that provides exclusive access to a managed and controlled portfolio of curated vacation options, delivered through an innovative model designed to ensure the service, certainty and value that discerning customers demand. The Inspirato portfolio includes branded luxury vacation homes, accommodations at five-star hotel and resort partners and custom travel experiences. For travelers, the Company offers access to a diverse portfolio of curated luxury vacation options that includes approximately 360 private luxury vacation homes available to the Company’s customers and accommodations at approximately 230 luxury hotel and resort partners in the Company’s over 200 destinations around the world as of September 30, 2024. The Company’s portfolio also includes Inspirato Only experiences, featuring one-of-a-kind luxury safaris, cruises and other experiences with Inspirato-only member lists along with Bespoke trips, which offer custom-designed “bucket list” itineraries. Every Inspirato trip comes with the Company’s personalized service envelope — including pre-trip planning, on-site concierge and daily housekeeping — designed to meet the needs of discerning travelers and drive exceptional customer satisfaction. As of September 30, 2024, the Company’s only subsidiary is Inspirato LLC. Inspirato LLC generally has subsidiaries in the jurisdictions where the Company has rental properties. These entities typically lease local properties. Investment Agreement On August 12, 2024, the Company entered into an investment agreement (the “Investment Agreement”) with One Planet Group LLC (“One Planet Group”), a Delaware limited liability company (the “Purchaser”), to sell 2.9 million shares of Class A Common Stock, $0.0001 par value per share, at $3.43 per share, and 2.9 million warrants (the “Investment Warrants”) each redeemable for a share of Class A Common Stock, for an aggregate purchase price of $10.0 million (the “One Planet Group Financing”). At the initial closing on August 13, 2024, the Purchaser acquired the first tranche of 1,335,271 shares for $4.6 million. At the second closing on September 13, 2024, the Purchaser acquired the remaining 1,580,180 shares and the 2.9 million Investment Warrants for $5.4 million. In addition, pursuant to the Investment Agreement, the Purchaser was granted an option to acquire additional shares of Class A Common Stock after November 29, 2024 and prior to December 29, 2024 for $3.43 per share with an aggregate purchase price of up to $2.5 million and with each incremental share purchase the Purchaser would also receive an equal number of additional Investment Warrants (collectively, the “Investment Agreement Option”). Each Investment Warrant can be exercised in exchange for a share of Class A Common Stock at $3.43 per share and is exercisable for 5 years from issuance. Further, on October 22, 2024, the Company entered into a secondary investment agreement (the “Secondary Investment Agreement”) with two investors (the “Secondary Purchasers”), to sell approximately 757,576 shares of Class A Common Stock, $0.0001 par value per share, at $3.96 per share, the closing price at October 22, 2024, for an aggregate purchase price of $3.0 million. The closing of the transactions contemplated by the Secondary Investment Agreement occurred on October 24, 2024. Liquidity During the year ended December 31, 2023, and the nine months ended September 30, 2024, the Company experienced declines in active subscriptions and nights delivered. As a result of these negative trends, revenues declined to $69.1 million and $216.7 million for the three and nine months ended September 30, 2024, respectively, from $82.6 million and $258.4 million for the three and nine months ended September 30, 2023, respectively. The Company also experienced negative cash flows from operating activities of $22.7 million and $45.4 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, the Company had $13.5 million of cash and cash equivalents and $10.7 million of restricted cash compared to $36.6 million of cash and cash equivalents and $5.7 million of restricted cash balances as of December 31, 2023. As result of the continued operational challenges and significance of those conditions in relation to the Company’s liquidity needs, management developed and executed on plans to address improvements in operations, including the Reorganization Plan, as defined and discussed in Note 18 – Restructuring Charges, which was developed in conjunction with the One Planet Group Financing. Additionally, in October 2024, the Company obtained an additional new capital injection of $3.0 million through the Secondary Investment Agreement to purchase shares of Class A Common Stock. The Purchaser also has an option to purchase an additional $2.5 million in Class A Shares and Investment Warrants between November 29, 2024 and December 29, 2024. The Company believes these investments will allow the Company to continue to meet its projected working capital and capital expenditure requirements for a period of at least the next twelve months.

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- Definition The entire disclosure for the nature of an entity's business, major products or services, principal markets including location, and the relative importance of its operations in each business and the basis for the determination, including but not limited to, assets, revenues, or earnings. For an entity that has not commenced principal operations, disclosures about the risks and uncertainties related to the activities in which the entity is currently engaged and an understanding of what those activities are being directed toward. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 275 -Publisher FASB -URI https://asc.fasb.org/275/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -SubTopic 10 -Topic 275 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482861/275-10-50-1 + Details
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