Company: UP
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001819516-25-000028
Chunk: 45

Company: Wheels Up Experience Inc.
Filing Date: 2025-05-05
Form: 10-Q
Item: Item 1
Chunk 45
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 Equipment Notes— — 317,484 317,484 Term Loan— — 284,845 284,845 Total liabilities$— $20 $602,329 $602,349 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 (as defined below) were accounted for as a liability in accordance with ASC 815-40. The Warrant liability was measured at fair value upon assumption and on a recurring basis, with changes in fair value presented in the condensed consolidated statements of operations. As of each of March 31, 2025 and December 31, 2024, we used Level 2 inputs for the Warrants. See Note 10 for additional information about the Warrants.The estimated fair value of the Revolving Equipment Notes is categorized as a Level 3 valuation. We considered the appraised value of aircraft subject to first-priority liens under the Revolving Equipment Notes, as sourced during the fourth quarter of 2024 and as required under the Revolving Equipment Notes, to determine the fair value of the Revolving Equipment Notes as of March 31, 2025. The estimated fair value of the Term Loan is categorized as a Level 3 valuation. The estimated fair value as of March 31, 2025 was estimated using a discounted cash flows analysis, based on our current estimated incremental borrowing rate for a similar type of borrowing arrangement.  

19

The following table presents the changes in the fair value of the warrant liability (in thousands):Public WarrantsPrivate WarrantsTotal Warrant LiabilityFair value as of  December 31, 2024$13 $7 $20 Change in fair value of warrant liability— — — Fair value as of March 31, 2025$13 $7 $20 

8.LEASES

Leases primarily pertain to certain controlled aircraft, office spaces and operational facilities, which are all accounted for as operating leases. 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 certain aircraft lessors that contain payment terms based on an hourly lease rate multiplied by the number of flight hours for the applicable aircraft 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 net lease cost were as follows (