00018195162135 American WayChambleeGeorgiaFALSE00018195162024-05-062024-05-06

 
 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
 CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
 Date of Report (Date of earliest event reported): September 30, 2023
 
WHEELS UP EXPERIENCE INC.
(Exact name of registrant as specified in its charter)
 
Delaware001-3954198-1617611
(State or other jurisdiction(Commission(I.R.S. Employer
of incorporation)File Number)Identification No.)
2135 American Way
 
Chamblee, Georgia
30341
(Address of principal executive offices)(Zip Code)
(212) 257-5252
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 ☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class 
Trading
Symbol(s)
 
Name of each exchange
on which registered
Class A common stock, $0.0001 par value per share UP New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



EXPLANATORY NOTE
As first disclosed under “Divestiture of Aircraft Management Business” in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of Wheels Up Experience Inc.’s (the “Company”) Quarterly Report on Form 10-Q filed with the U.S. Securities and Exchange Commission on November 9, 2023, on September 30, 2023 (the “Closing Date”), Wheels Up Partners Holdings LLC (“WUP”), a direct subsidiary of the Company, entered into an Equity Purchase Agreement, dated as of the Closing Date (the “Purchase Agreement”), with Executive AirShare LLC (the “Purchaser”), pursuant to which on the Closing Date, WUP completed the sale of 100% of the issued and outstanding equity interests of Circadian Aviation LLC, the Company’s former indirect subsidiary (“Circadian”), which held the Company’s non-core aircraft management business. The Company determined that the disposition of the non-core aircraft management business required the Company to present pro forma financial information pursuant to Item 9.01(b) of Form 8-K and Article 11 of Regulation S-X, which was not readily available at the time the Company would have been required to report such disposition on a Current Report on Form 8-K. As a result, the Company is filing this Current Report on Form 8-K to provide the disclosures that would have been required under Items 2.01, 9.01(b) and 9.01(d) of Form 8-K within four business days after the Closing Date.
Item 2.01     Completion of Acquisition or Disposition of Assets.
On the Closing Date, pursuant to the Purchase Agreement, WUP completed the sale of 100% of the issued and outstanding equity interests of Circadian, which held the Company’s non-core aircraft management business, to the Purchaser. The transaction was part of the Company’s efforts to divest non-core assets as it focused on its operational efficiency and other cost reduction initiatives. The fair value of the aggregate consideration transferred, as of September 30, 2023, was $19.1 million and the Company recognized a loss on the sale of $3.0 million. The $19.1 million was comprised of $13.2 million of cash received on the Closing Date, contingent consideration with a fair value of $4.8 million, an escrow receivable of $0.6 million and a non-contingent consideration receivable of $0.5 million. The fair value of the contingent consideration was deemed to be the approximate contract value as of the Closing Date. Concurrently with the closing of the transaction, certain subsidiaries of the Company and the Purchaser entered into short-term transition services, aircraft operating and fleet management agreements to facilitate the transition of the remaining assets and services that comprise the aircraft management business to the Purchaser. Circadian and its subsidiary were also released from all guarantor obligations with respect to the Company’s debt obligations on the Closing Date pursuant to certain debt release letters.
Item 9.01     Financial Statements and Exhibits.
 (b)    Pro forma financial information.
Unaudited Pro Forma Condensed Consolidated Financial Information of the Company, which reflects the disposition described in Item 2.01, is filed herewith as Exhibit 99.1 and is incorporated herein by reference.
 (d)    Exhibits.
Exhibit NumberDescription
99.1
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
WHEELS UP EXPERIENCE INC.
    
    
Date: June 7, 2024By:/s/ George Mattson
  Name:George Mattson
  Title:Chief Executive Officer


Exhibit 99.1

WHEELS UP EXPERIENCE INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On September 30, 2023 (the “Closing Date”), Wheels Up Partners Holdings LLC, a Delaware limited liability company (“WUP”) and a direct subsidiary of Wheels Up Experience Inc., a Delaware corporation (the “Company” or “Wheels Up”), completed the disposition of 100% of the issued and outstanding equity interests of Circadian Aviation LLC, a Delaware limited liability company (“Circadian”) and a direct subsidiary of WUP (such disposition, the “Circadian Sale”), pursuant to an Equity Purchase Agreement, dated as of the Closing Date (the “Purchase Agreement”), by and between WUP and Executive AirShare LLC (the “Purchaser”). 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, an indirect subsidiary of the Company (“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 Closing Date while such aircraft are transitioned from a U.S. Federal Aviation Administration (“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 Closing Date while they are transitioned from a FAA operating certificate held by the applicable Company subsidiary to Circadian. The Circadian Sale, when taken together with certain post-closing agreements and covenants, including those in the preceding sentence, resulted in the disposition of the Company’s non-core aircraft management business (the “Aircraft Management Business” and such transactions, collectively the “Divestiture”).
As of the Closing Date, the fair value of the aggregate consideration transferred was $19.1 million and was subject to a post-closing final working capital adjustment under the terms of the Purchase Agreement. The $19.1 million of consideration was comprised of $13.2 million of cash received on the Closing Date, contingent consideration with a fair value of $4.8 million, an escrow receivable of $0.6 million and a non-contingent consideration receivable of $0.5 million. The fair value of the contingent consideration for the Divestiture was deemed to be the approximate contract value as of the Closing Date.
The Company determined that the Divestiture is considered a disposition of a significant business under Rule 1-02(w) of Regulation S-X and does not meet the criteria requiring discontinued operations presentation in accordance with accounting principles generally accepted in the United States of America. The unaudited pro forma condensed consolidated financial statements are based on the historical consolidated financial statements of the Company, and in the opinion of management, all adjustments and disclosures have been prepared in accordance with Article 11 of Regulation S-X. All adjustments shown are transaction accounting adjustments and do not reflect the potential uses of proceeds, synergies, and or dis-synergies that may be derived in future periods.
The following unaudited pro forma condensed consolidated balance sheet as of June 30, 2023, has been prepared as if the Divestiture, as described in the notes to the unaudited pro forma condensed consolidated financial statements included herein, had occurred on June 30, 2023. The unaudited pro forma condensed consolidated statement of operations for the six months ended June 30, 2023 and for the year ended December 31, 2022, have been prepared as if the Divestiture occurred on January 1, 2022, in that they reflect the removal of the Aircraft Management Business for all periods presented.
The unaudited pro forma condensed consolidated financial information reflects certain assumptions, estimates and accounting adjustments that the Company’s management believes are reasonable under the circumstances and necessary to present fairly the unaudited pro forma condensed consolidated balance sheet as of June 30, 2023, and the unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2023 and the year ended December 31, 2022, in each case as of the date of the Current Report on Form 8-K to which this unaudited pro forma condensed consolidated financial information is filed as Exhibit 99.1. Certain amounts presented herein are estimates or involve subjective or complex judgments, which required the Company’s management to make assumptions with respect to values or conditions, including regarding the effect of matters that are inherently uncertain, in accordance with the Company’s accounting policies. Such assumptions, estimates and accounting adjustments are described in the accompanying notes, which should be read together with the unaudited pro forma condensed consolidated financial information.





The unaudited pro forma condensed consolidated financial information has been provided for informational purposes only and does not purport to project the future or historical financial position or results of operations of the Company, Circadian or the Aircraft Management Business on a stand-alone basis. The unaudited pro forma condensed consolidated financial information presented herein is not necessarily indicative of the Company’s future consolidated results of operations, cash flows, liquidity or financial condition. The actual results of the Company may differ significantly from those reflected herein.
The unaudited pro forma condensed consolidated financial information and the accompanying notes should be read in conjunction with the Company's historical financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2022 and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2023.

WHEELS UP EXPERIENCE INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands, except for share data)
As of June 30, 2023

Wheels UpDivestiture of Aircraft Management Business
(a)		Transaction Accounting AdjustmentsPro Forma
ASSETS
Current assets:
Cash and cash equivalents$151,828 $(2)$21,779 (b)$173,605 
Accounts receivable, net85,352 (42,580)— 42,772 
Other receivables3,872 — — 3,872 
Parts and supplies inventories, net23,423 — — 23,423 
Aircraft inventory5,383 — — 5,383 
Aircraft held for sale12,388 — — 12,388 
Prepaid expenses53,626 (714)— 52,912 
Other current assets14,001 — — 14,001 
Total current assets349,873 (43,296)21,779 328,356 
Property and equipment, net401,021 (337)— 400,684 
Operating lease right-of-use assets91,409 (1,753)— 89,656 
Goodwill282,133 (8,766)— 273,367 
Intangible assets, net130,588 (1,507)— 129,081 
Other non-current assets131,147 (8)— 131,139 
Total assets$1,386,171 $(55,667)$21,779 $1,352,283 
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt$26,504 $— $— $26,504 
Accounts payable52,110 (2,303)— 49,807 
Accrued expenses115,864 (8,265)751 (c)108,350 
Deferred revenue, current828,607 (3,756)— 824,851 
Other current liabilities47,632 (16,410)— 31,222 
Total current liabilities1,070,717 (30,734)751 1,040,734 
Long-term debt, net210,051 — — 210,051 
Operating lease liabilities, non-current71,323 (607)— 70,716 
Warrant liability5 — — 5 
Other non-current liabilities21,256 — — 21,256 
Total liabilities1,373,352 (31,341)751 1,342,762 
Equity:
Common Stock, $0.0001 par value; 250,000,000 authorized; 25,622,496 shares issued and 25,357,196 common shares outstanding as of June 30, 2023
$3 $— $— $3 
Additional paid-in capital1,563,672 (1,582)— 1,562,090 
Accumulated deficit(1,537,332)(22,744)21,028 (d)(1,539,048)
Accumulated other comprehensive loss(5,834)— — (5,834)
Treasury stock, at cost, 265,300 shares
(7,690)— — (7,690)
Total Wheels Up Experience Inc. stockholders’ equity12,819 (24,326)21,028 9,521 
Non-controlling interests— — — — 
Total equity12,819 (24,326)21,028 9,521 
Total liabilities and equity$1,386,171 $(55,667)$21,779 $1,352,283 

WHEELS UP EXPERIENCE INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except for share data)
For the Six Months Ended June 30, 2023
Wheels UpDivestiture of Aircraft Management Business
(e)		Transaction Accounting AdjustmentsPro Forma
Revenue$686,874 $(120,601)$— $566,273 
— 
Costs and expenses:— 
Cost of revenue681,694 (110,385)— 571,309 
Technology and development30,303 (1,307)— 28,996 
Sales and marketing 48,952 (2,475)— 46,477 
General and administrative 79,481 (3,832)— 75,649 
Depreciation and amortization29,568 (611)— 28,957 
Gain on sale of aircraft held for sale(3,487)— — (3,487)
Impairment of goodwill70,000 (3,061)— 66,939 
Total costs and expenses936,511 (121,671)— 814,840 
Loss from operations(249,637)1,070 — (248,567)
— 
Other income (expense):— 
Loss on extinguishment of debt(870)— — (870)
Change in fair value of warrant liability746 — — 746 
Interest income5,686 — — 5,686 
Interest expense(15,777)— — (15,777)
Other expense, net(1,435)(24)— (1,459)
Total other income (expense)(11,650)(24)— (11,674)
Loss before income taxes(261,287)1,046 — (260,241)
— 
Income tax benefit (expense)(172)— — (172)
— 
Net loss(261,459)1,046 — (260,413)
Less: Net loss attributable to non-controlling interests— — — 
Net loss attributable to Wheels Up Experience Inc.$(261,459)$1,046 $— $(260,413)
Net loss per share of Common Stock:
Basic and diluted$(10.27)$(10.23)
Weighted-average shares of Common Stock outstanding:
Basic and diluted25,446,199 25,446,199 

WHEELS UP EXPERIENCE INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except for share data)
For the Twelve Months Ended December 31, 2022
Wheels UpDivestiture of Aircraft Management Business
(e)		Transaction Accounting AdjustmentsPro Forma
Revenue$1,579,760 $(217,333)$— $1,362,427 
Costs and expenses:
Cost of revenue (exclusive of items shown separately below)1,540,325 (192,133)— 1,348,192 
Technology and development 57,240 (2,798)— 54,442 
Sales and marketing 117,110 (5,604)— 111,506 
General and administrative 183,531 (7,824)751 (c)176,458 
Depreciation and amortization65,936 (1,500)— 64,436 
Gain on sale of aircraft held for sale(4,375)— — (4,375)
Impairment of goodwill180,000 (7,871)— 172,129 
Total costs and expenses2,139,767 (217,730)751 1,922,788 
Loss from operations(560,007)397 (751)(560,361)
Other income (expense):
Gain on divestiture— — 401 
(f)
401 
Change in fair value of warrant liability9,516 — — 9,516 
Interest income3,670 (5)— 3,665 
Interest expense(7,515)2 — (7,513)
Other expense, net(1,041)— — (1,041)
Total other income (expense)4,630 (3)401 5,028 
Loss before income taxes(555,377)394 (350)(555,333)
Income tax expense(170)— — 
(g)
(170)
Net loss (555,547)394 (350)(555,503)
Less: Net loss attributable to non-controlling interests(387)(387)
Net loss attributable to Wheels Up Experience Inc.$(555,160)$394 $(350)$(555,890)
Net loss per share of Common Stock:
Basic and diluted$(22.60)$(22.63)
Weighted-average shares of Common Stock outstanding:
Basic and diluted24,567,164 24,567,164 


WHEELS UP EXPERIENCE INC.
NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.BASIS OF PRESENTATION
The unaudited pro forma condensed consolidated financial statements give effect to the pro forma adjustments necessary to reflect the Divestiture as if the transaction had occurred on June 30, 2023 for the unaudited pro forma condensed consolidated balance sheet and as of January 1, 2022 for each of the unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2023 and year ended December 31, 2022.
2.PRO FORMA ADJUSTMENTS
(a)To reflect adjustments to remove the historical results of the Aircraft Management Business, assuming the Divestiture occurred on June 30, 2023.
(b)To adjust for the fair value of the aggregate consideration transferred as of the Closing Date inclusive of working capital adjustments and net of transaction and other associated costs incurred by Wheels Up pursuant to the Divestiture that are not already reflected in the historical results. The use of the proceeds from the Divestiture is not reflected in the unaudited pro forma condensed consolidated balance sheet, because such uses are not contractually committed or estimable.
(c)To adjust for the transaction and other associated costs incurred by Wheels Up pursuant to the Divestiture that are not already reflected in the historical results. All such costs were incurred and included and reflected in the Company’s unaudited condensed consolidated financial statements for the three months ended September 30, 2023.
(d)To remove the estimated pre-tax gain resulting from the Divestiture of $0.4 million, which is subject to customary closing adjustments under the terms of the Purchase Agreement, as well as the effect of the transaction accounting adjustments, as noted herein.
(e)To reflect adjustments to remove the historical results of the Aircraft Management Business, assuming the Divestiture occurred on January 1, 2022.
(f)To adjust for the estimated pre-tax gain resulting from the Divestiture, which is subject to customary closing adjustments under the terms of the Purchase Agreement.
(g)There are no income tax impacts related to the pro forma adjustments reflected in the unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2022. Wheels Up, the United States legal entity holding the divested entity, has sufficient current year losses and net operating loss carryforwards available to allow us to fully offset the estimated gain for tax purposes.

v3.24.1.1.u2
Cover
May 06, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Sep. 30, 2023
Entity Registrant Name WHEELS UP EXPERIENCE INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-39541
Entity Tax Identification Number 98-1617611
Entity Address, Address Line One 2135 American Way
Entity Address, City or Town Chamblee
Entity Address, State or Province GA
Entity Address, Postal Zip Code 30341
City Area Code 212
Local Phone Number 257-5252
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A common stock, $0.0001 par value per share
Trading Symbol UP
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001819516
Amendment Flag false
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