Wheels Up Experience (UP) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Presents unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, equity, and cash flows, with detailed notes Condensed Consolidated Balance Sheets Presents the company's financial position, detailing assets, liabilities, and equity at specific dates Condensed Consolidated Balance Sheets (Unaudited, in thousands): | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | ASSETS | | | | Cash and cash equivalents | $107,000 | $216,426 | | Total current assets | $233,671 | $332,069 | | Total assets | $1,005,726 | $1,158,011 | | LIABILITIES AND EQUITY | | | | Deferred revenue, current | $727,099 | $749,432 | | Total current liabilities | $902,180 | $917,284 | | Long-term debt, net | $391,335 | $376,308 | | Total liabilities | $1,353,477 | $1,354,239 | | Total equity | $(347,751) | $(202,109) | - Total assets decreased by $152.285 million from December 31, 2024, to June 30, 2025, primarily driven by a significant reduction in cash and cash equivalents[9] - Total equity saw a substantial decrease, moving from a deficit of $202.109 million at December 31, 2024, to a deficit of $347.751 million at June 30, 2025[12] Condensed Consolidated Statements of Operations Details the company's revenues, expenses, and net loss over specific reporting periods Condensed Consolidated Statements of Operations (Unaudited, in thousands, except per share data): | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $189,637 | $196,285 | $367,167 | $393,386 | | Total costs and expenses | $249,237 | $275,339 | $507,533 | $556,988 | | Loss from operations | $(59,600) | $(79,054) | $(140,366) | $(163,602) | | Net loss | $(82,299) | $(96,973) | $(181,612) | $(194,366) | | Basic and diluted net loss per share | $(0.12) | $(0.14) | $(0.26) | $(0.28) | - Net loss improved for both the three months ($82.3 million vs. $97.0 million) and six months ($181.6 million vs. $194.4 million) ended June 30, 2025, compared to the prior year, indicating a reduction in losses[14] - Revenue decreased by 3% for the three months and 7% for the six months ended June 30, 2025, compared to the same periods in 2024[14] Condensed Consolidated Statements of Comprehensive Loss Reports net loss and other comprehensive income/loss items, such as foreign currency adjustments Condensed Consolidated Statements of Comprehensive Loss (Unaudited, in thousands): | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(82,299) | $(96,973) | $(181,612) | $(194,366) | | Foreign currency translation adjustments | $6,472 | $(98) | $9,578 | $(1,640) | | Comprehensive loss | $(75,827) | $(97,071) | $(172,034) | $(196,006) | - Comprehensive loss improved for both the three months ($75.8 million vs. $97.1 million) and six months ($172.0 million vs. $196.0 million) ended June 30, 2025, compared to the prior year, largely due to positive foreign currency translation adjustments in 2025[16] Condensed Consolidated Statements of Equity Outlines changes in stockholders' equity, including common stock, paid-in capital, and accumulated deficit Condensed Consolidated Statements of Equity (Unaudited, in thousands, except share data): | Metric | Balance at December 31, 2024 | Balance at June 30, 2025 | | :----------------------------------- | :--------------------------- | :----------------------- | | Common Stock (shares) | 698,342,097 | 699,803,945 | | Additional paid-in capital | $1,921,581 | $1,948,418 | | Accumulated deficit | $(2,102,895) | $(2,284,507) | | Total Wheels Up Experience Inc. stockholders' equity | $(202,109) | $(347,751) | - Total stockholders' equity decreased significantly from a deficit of $202.1 million at December 31, 2024, to $347.8 million at June 30, 2025, primarily due to accumulated deficit and treasury stock repurchases[19][117] - Equity-based compensation contributed $16.587 million to additional paid-in capital during the six months ended June 30, 2025[19] Condensed Consolidated Statements of Cash Flows Summarizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands): | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(110,804) | $(98,956) | | Net cash provided by investing activities | $19,914 | $24,093 | | Net cash used in financing activities | $(17,560) | $(41,396) | | Net decrease in cash, cash equivalents and restricted cash | $(105,226) | $(117,434) | | Cash, cash equivalents and restricted cash, end of period | $141,242 | $175,391 | - Net cash used in operating activities increased to $110.8 million for the six months ended June 30, 2025, from $99.0 million in the prior year, primarily due to the net loss and changes in working capital[24][226] - Net cash provided by investing activities decreased to $19.9 million in 2025 from $24.1 million in 2024, despite higher proceeds from aircraft sales, due to increased purchases of property and equipment[24][227] - Net cash used in financing activities significantly decreased to $17.6 million in 2025 from $41.4 million in 2024, driven by lower repayments of long-term debt and proceeds from new Revolving Equipment Notes[24][228] Notes to Condensed Consolidated Financial Statements Provides detailed explanations and disclosures supporting the condensed consolidated financial statements 1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Outlines the company's business, reporting segment, and key accounting principles and policies - Wheels Up Experience Inc. is a leading provider of on-demand private aviation in the U.S., operating as a single segment[26][31] - The financial statements are prepared in accordance with U.S. GAAP for interim reporting and include all necessary adjustments for fair presentation[27] - The Company is evaluating the impact of new FASB ASUs 2023-09 (Income Tax Disclosures) and 2024-03 (Disaggregation of Income Statement Expenses), effective for fiscal years ending December 31, 2025, and 2027, respectively[32][33] 2. REVENUE RECOGNITION Details the company's revenue streams, disaggregated by service type, and related deferred revenue balances Revenue Disaggregation by Service Type (in thousands): | Service Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Flights, net of discounts and incentives | $158,330 | $163,684 | $305,898 | $314,613 | | Other (point in time) | $22,827 | $16,162 | $42,611 | $44,946 | | Memberships (over time) | $7,474 | $16,046 | $16,663 | $32,900 | | Other (over time) | $1,006 | $393 | $1,995 | $927 | | Total Revenue | $189,637 | $196,285 | $367,167 | $393,386 | - Membership revenue decreased significantly by 53% for the three months and 49% for the six months ended June 30, 2025, compared to the prior year, due to streamlining offerings and shifting less frequent fliers to charter[34][187][200] - Deferred revenue totaled $727.1 million as of June 30, 2025, with $358.6 million expected to be recognized in the remainder of 2025[36][37] 3. PROPERTY AND EQUIPMENT Presents the net book value of property and equipment, including aircraft and software development costs Property and Equipment, Net (in thousands): | Asset Category | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Aircraft | $397,523 | $443,193 | | Software development costs | $93,325 | $85,112 | | Total Property and equipment, net | $317,912 | $348,339 | - Total property and equipment, net, decreased by $30.4 million from December 31, 2024, to June 30, 2025, primarily due to a reduction in aircraft value[40] - Amortization expense for software development costs increased to $11.0 million for the six months ended June 30, 2025, from $10.6 million in the prior year[41] 4. GOODWILL AND INTANGIBLE ASSETS Details the company's goodwill, intangible assets, and related amortization expenses and liabilities Goodwill and Intangible Assets (in thousands): | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Goodwill | $224,419 | $217,045 | | Intangible assets, net | $87,367 | $96,904 | | Intangible liabilities, net | $9,914 | $10,677 | - Goodwill increased by $7.374 million due to foreign currency translation adjustments[42] - Net intangible assets decreased by $9.537 million, while intangible liabilities decreased by $0.763 million from December 31, 2024, to June 30, 2025[43][45] - Future amortization expense for intangible assets is projected to be $10.290 million for the remainder of 2025 and $19.703 million in 2026[46] 5. CASH EQUIVALENTS AND RESTRICTED CASH Provides a breakdown of cash, cash equivalents, and restricted cash balances at period-end Cash, Cash Equivalents, and Restricted Cash (in thousands): | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $107,000 | $216,426 | | Restricted cash | $34,242 | $30,042 | | Total | $141,242 | $246,468 | - Cash and cash equivalents decreased by $109.426 million from December 31, 2024, to June 30, 2025, primarily due to a reduction in money market funds[48] - Restricted cash increased by $4.2 million, mainly due to funds held for contractual restrictions and standby letters of credit[49] 6. LONG-TERM DEBT Details the company's long-term debt obligations, including Revolving Equipment Notes and Term Loan Long-Term Debt, Net (in thousands): | Debt Type | Maturity Date | Interest Rate (June 30, 2025) | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------------------- | :------------ | :---------------- | | Revolving Equipment Notes | 2029 | SOFR + 1.75% | $300,136 | $317,484 | | Term Loan | 2028 | 10.0% | $470,357 | $443,864 | | Total debt | | | $770,493 | $761,348 | | Long-term debt, net | | | $391,335 | $376,308 | - Total debt increased by $9.145 million to $770.493 million as of June 30, 2025, primarily due to the Term Loan[51] - The Revolving Equipment Notes Facility has an aggregate principal amount up to $332.0 million, with $300.1 million outstanding as of June 30, 2025, and $31.2 million available for future aircraft acquisitions[53][218] - The Term Loan, totaling $390.0 million, accrues interest at 10% per annum, payable-in-kind, and matures on September 20, 2028[64][65] 7. FAIR VALUE MEASUREMENTS Discloses fair value measurements for financial instruments, categorized by valuation input levels Fair Value Measurements (in thousands): | Financial Instrument | Level | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :----------------------------------- | :---- | :----------------------- | :--------------------------- | | Money market funds | 1 | $20,995 | $80,812 | | Warrant liability - Public Warrants | 2 | $13 | $13 | | Warrant liability - Private Warrants | 2 | $7 | $7 | | Revolving Equipment Notes | 3 | $307,927 | $317,484 | | Term Loan | 3 | $307,556 | $284,845 | - Money market funds, classified as Level 1, decreased significantly from $80.8 million to $21.0 million[77] - The Term Loan's fair value (Level 3) increased to $307.6 million from $284.8 million, estimated using a discounted cash flow analysis[77][82] 8. LEASES Presents information on the company's lease arrangements, including lease costs and right-of-use assets Net Lease Cost (in thousands): | Lease Cost Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease costs | $3,732 | $7,509 | $9,350 | $15,049 | | Short-term lease costs | $1,797 | $173 | $2,665 | $386 | | Variable lease payments | $1,086 | $5,826 | $3,062 | $10,139 | | Total lease costs | $6,615 | $13,508 | $15,077 | $25,574 | - Total lease costs decreased by 51% for the three months and 41% for the six months ended June 30, 2025, compared to the prior year, driven by reductions in operating and variable lease payments[85] - The Company recorded a $20.2 million non-cash impairment charge in Q1 2025 for a right-of-use asset related to vacating a larger New York City corporate office space[87] - The weighted-average remaining lease term for operating leases is 6.8 years, with a weighted-average discount rate of 10.5% as of June 30, 2025[88] 9. STOCKHOLDERS' EQUITY AND EQUITY-BASED COMPENSATION Details changes in stockholders' equity and expenses related to equity-based compensation plans Equity-Based Compensation Expense (in thousands): | Expense Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Compensation expense for RSUs and PSUs | $3,306 | $3,153 | $6,440 | $6,332 | | Compensation expense for Executive Performance Plans | $4,989 | $11,115 | $14,516 | $19,147 | | Total equity-based compensation expense | $8,295 | $14,268 | $20,956 | $25,479 | - Total equity-based compensation expense decreased by 42% for the three months and 18% for the six months ended June 30, 2025, primarily due to a reduction in Executive Performance Plans compensation[112] - As of June 30, 2025, unrecognized compensation cost for non-vested RSUs was $29.9 million (expected over 2.8 years) and for Executive Performance Plans was $127.9 million (expected over 3.5 years)[97][107] - The Company repurchased 225,378 shares of Common Stock for $0.3 million under its Share Repurchase Program during the six months ended June 30, 2025[117] 10. WARRANTS Provides information on outstanding Warrants, their terms, and exercise status - As of June 30, 2025, 12,521,494 Warrants (Public and Private) remain outstanding, each entitling the holder to purchase 1/10th share of Common Stock at $115.00 per whole share, expiring on July 13, 2026[118] - No Warrants had been exercised as of June 30, 2025[118] 11. NON-CONTROLLING INTERESTS Explains the accounting for non-controlling interests in consolidated entities - Wheels Up consolidates MIP LLC, recording profits interests held by other members as non-controlling interests, which are treated as permanent equity[119] - As of June 30, 2025, the non-controlling interests weighted-average ownership percentage was nil, and no WUP common units were issuable upon conversion of vested/unvested WUP profits interests[122][123] 12. COMMITMENTS AND CONTINGENCIES Discloses significant commitments and potential liabilities, including legal proceedings and tax estimates - The Company is involved in a lawsuit against Exclusive Jets, LLC (flyExclusive) for wrongful termination of the GRP Agreement, seeking compensatory damages and return of material deposits[126] - The NY State Court granted Wheels Up's motion to amend its complaint, adding FE's CEO as a defendant for piercing the corporate veil[128] - The Company estimates a potential sales and use tax liability of $5.5 million as of June 30, 2025[130] 13. RELATED PARTIES Details transactions and balances with related parties, such as Delta - Expenses from transactions with Delta related to the Commercial Cooperation Agreement decreased to $0.2 million for the six months ended June 30, 2025, from $1.1 million in the prior year[132] 14. INCOME TAXES Presents income tax expense, effective tax rates, and deferred tax asset valuation allowances Income Tax Expense (in thousands): | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax benefit (expense) | $(959) | $(441) | $(1,037) | $(327) | | Effective tax rate | (0.5)% | (0.5)% | (0.6)% | (0.2)% | - The effective tax rate for the six months ended June 30, 2025, was (0.6)%, differing from the federal statutory rate primarily due to a full valuation allowance against most net deferred tax assets[134][137] - An ownership change in Q3 2023 limits the utilization of pre-change net operating losses, but the impact is not material due to the full valuation allowance[138] 15. NET LOSS PER SHARE Calculates basic and diluted net loss per share, considering outstanding shares and anti-dilutive securities Net Loss Per Share (in thousands, except per share data): | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to Wheels Up Experience Inc. | $(82,299) | $(96,973) | $(181,612) | $(194,366) | | Basic and diluted net loss per share | $(0.12) | $(0.14) | $(0.26) | $(0.28) | | Weighted-average shares outstanding | 698,996,977 | 697,458,966 | 698,641,618 | 697,403,388 | - Basic and diluted net loss per share improved to $(0.12) for the three months and $(0.26) for the six months ended June 30, 2025, compared to $(0.14) and $(0.28) in the prior year, respectively[142] - Anti-dilutive securities, including Warrants, Earnout Shares, RSUs, and stock options, totaling 24.95 million as of June 30, 2025, were excluded from diluted EPS calculation[145] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management discusses Wheels Up's financial condition, operational results, strategic developments, and liquidity for the periods ended June 30, 2025, versus 2024 Overview of Our Business Describes Wheels Up as a leading U.S. private aviation provider, offering on-demand charter and membership programs - Wheels Up is a leading U.S. private aviation provider offering on-demand charter and membership programs, leveraging a controlled aircraft fleet and a global network of charter operators[147][148][152] - The Company is executing a fleet modernization strategy to transition from four legacy private jet models to Embraer Phenom 300 series and Bombardier Challenger 300 series aircraft, while retaining King Air 350i[153] Controlled Aircraft Fleet as of June 30, 2025: | Category | Owned | Leased | Total | | :----------------------------------- | :---- | :----- | :---- | | Premium Jets (Bombardier Challenger 300/350) | 2 | 2 | 4 | | Premium Jets (Embraer Phenom 300/350) | 17 | 1 | 18 | | Super-Midsize Jets (Cessna Citation X) | — | 24 | 24 | | Midsize Jets (Cessna Citation Excel/XLS) | 10 | 3 | 13 | | Light Jets (Cessna Citation CJ3) | — | 3 | 3 | | Light Jets (Hawker 400XP) | 25 | — | 25 | | Turboprops (King Air 350i) | 38 | — | 38 | | Total Aircraft | 92 | 35 | 127 | Recent Developments Highlights recent strategic initiatives, including cost savings, a share repurchase program, and an extended credit facility - Wheels Up announced initiatives expected to drive approximately $50 million in annual cash cost savings, with full impact anticipated in Q3 and Q4 2026[157] - The Board approved a $10.0 million share repurchase program on April 30, 2025, with no expiration date[158] - Delta extended the availability period for the $100.0 million Revolving Credit Facility to September 20, 2026; no amounts were outstanding as of June 30, 2025[159] Non-GAAP Financial Measures Provides reconciliation and analysis of non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDAR, and Adjusted Contribution Adjusted EBITDA and Adjusted EBITDAR Reconciliation (in thousands): | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(82,299) | $(96,973) | $(181,612) | $(194,366) | | Adjusted EBITDA | $(29,037) | $(37,355) | $(53,187) | $(86,584) | | Adjusted EBITDAR | $(25,119) | $(28,759) | $(43,911) | $(69,844) | Adjusted Contribution and Adjusted Contribution Margin Reconciliation (in thousands): | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $189,637 | $196,285 | $367,167 | $393,386 | | Gross profit (loss) | $2,192 | $(10,998) | $1,088 | $(27,552) | | Adjusted Contribution | $23,070 | $15,298 | $45,511 | $17,313 | | Adjusted Contribution Margin | 12.2% | 7.8% | 12.4% | 4.4% | - Adjusted EBITDA improved by 22% for the three months and 39% for the six months ended June 30, 2025, reflecting reduced operating losses[163] - Adjusted Contribution Margin increased significantly by 440 basis points for the three months and 800 basis points for the six months ended June 30, 2025, driven by cost savings and operational efficiency[169][190][204] Key Operating Metrics Presents key operational performance indicators, including flight legs, utility, and on-time performance Key Operating Metrics: | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | | :----------------------------------- | :------------------------------- | :------------------------------- | :------- | | Total Gross Bookings (in thousands) | $261,948 | $265,346 | (1)% | | Private Jet Gross Bookings (in thousands) | $208,326 | $216,843 | (4)% | | Live Flight Legs | 11,971 | 12,855 | (7)% | | Private Jet Gross Bookings per Live Flight Leg | $17,403 | $16,868 | 3% | | Utility (monthly average hours) | 41.1 | 37.4 | 10% | | Completion Rate | 98% | 98% | n/m | | On-Time Performance (D-60) | 88% | 91% | n/m | - Live Flight Legs decreased by 7% for both the three and six months ended June 30, 2025, compared to the prior year[173] - Utility (monthly average hours) increased by 10% to 41.1 hours for the three months ended June 30, 2025, indicating improved efficiency of controlled aircraft[173][174] - Private Jet Gross Bookings per Live Flight Leg increased by 3% for the three months and 9% for the six months ended June 30, 2025, due to a greater mix of flights on larger and premium cabins[173][188][201] Results of Operations for the Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024 Compares the company's financial performance for the three months ended June 30, 2025, against the same period in 2024 Revenue by Type (Three Months Ended June 30, in thousands): | Revenue Type | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------------- | :----- | :----- | :--------- | :--------- | | Membership | $7,474 | $16,046 | $(8,572) | (53)% | | Flight | $158,330 | $163,684 | $(5,354) | (3)% | | Other | $23,833 | $16,555 | $7,278 | 44% | | Total | $189,637 | $196,285 | $(6,648) | (3)% | - Cost of revenue decreased by $17.7 million (9%), driven by reductions in employee compensation, aircraft lease costs, and non-cash charges for parts inventory, partially offset by a $7.7 million increase in fleet modernization expenses[189] - General and administrative expenses decreased by $5.7 million (16%), primarily due to a $5.2 million decrease in equity-based compensation related to Executive Performance Awards[193] - Interest expense increased by $5.4 million (33%), mainly due to paid-in-kind interest associated with the Term Loan[196] Results of Operations for the Six Months Ended June 30, 2025 compared to the Six Months Ended June 30, 2024 Compares the company's financial performance for the six months ended June 30, 2025, against the same period in 2024 Revenue by Type (Six Months Ended June 30, in thousands): | Revenue Type | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------------- | :----- | :----- | :--------- | :--------- | | Membership | $16,663 | $32,900 | $(16,237) | (49)% | | Flight | $305,898 | $314,613 | $(8,715) | (3)% | | Other | $44,606 | $45,873 | $(1,267) | (3)% | | Total | $367,167 | $393,386 | $(26,219) | (7)% | - Cost of revenue decreased by $57.6 million (15%), driven by reduced headcount, lower aircraft lease costs, and decreased pilot travel costs, partially offset by a $10.8 million increase in fleet modernization expenses[203] - General and administrative expenses increased by $14.9 million (21%), primarily due to a $20.2 million non-cash impairment charge for a right-of-use asset related to vacating former office space[207] - Interest expense increased by $10.7 million (34%), mainly due to paid-in-kind interest associated with the Term Loan[210] Liquidity and Capital Resources Discusses the company's ability to meet short-term and long-term financial obligations and funding strategies Liquidity Position (in thousands): | Metric | June 30, 2025 | | :----------------------------------- | :------------ | | Cash and cash equivalents | $107,000 | | Restricted cash | $34,242 | | Long-term debt obligations | $770,493 | | Working capital deficit | $668,500 | | Net cash used in operating activities (six months) | $(110,804) | - The Company expects to meet its liquidity needs for the next 12 months using cash, cash equivalents, operating cash flows, strategic asset dispositions, and borrowings under the Revolving Equipment Notes Facility and, if needed, the Revolving Credit Facility[214] - The Revolving Credit Facility provides $100.0 million in commitments from Delta, available to be drawn through September 20, 2026, with no amounts outstanding as of June 30, 2025[213][220][223] - The fleet modernization strategy is capital intensive and will be funded by existing cash, aircraft sales proceeds, operating cash flows, and available debt facilities, with potential for additional financing[230] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to market risks primarily related to interest rates, aircraft fuel prices, and foreign currency exchange rates - Principal market risks include interest rates, aircraft fuel prices, and foreign currency exchange[234] - No material changes to market risks have occurred since the Annual Report[234] ITEM 4. CONTROLS AND PROCEDURES Management concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to ongoing remediation efforts for material weaknesses - Disclosure controls and procedures were not effective as of June 30, 2025, due to ongoing remediation of material weaknesses in internal control over financial reporting[237] - Management believes the financial statements fairly present the Company's financial position, results of operations, and cash flows[238] - Remediation actions include redesigning access administration, enhancing user access review, restricting elevated access, redesigning change management procedures, and engaging external advisors[240] - The Company aims to complete its remediation plan before December 31, 2025, with deficiencies considered remediated only after controls operate effectively for a sufficient period[241] PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is involved in the GRP Litigation against Exclusive Jets, LLC for wrongful termination, seeking damages and return of deposits - Wheels Up filed a lawsuit against flyExclusive for wrongful termination of the GRP Agreement, seeking compensatory damages and the return of material deposits[246] - The NY State Court granted Wheels Up's motion to amend its complaint, adding flyExclusive's CEO as a defendant[247] - FlyExclusive's financial disclosures indicate a net loss, negative operating cash flows, and a significant working capital deficit, raising concerns about its ability to fund recoverable amounts[248] ITEM 1A. RISK FACTORS Highlights various risk factors that could impact the Company's business, including stock price volatility due to industry changes and macroeconomic conditions - The price of Common Stock and Warrants may be volatile due to factors like changes in the private aviation industry, general market conditions, and macroeconomic conditions[252] - Other factors influencing stock price volatility include competitor developments, regulatory changes, operational performance, liquidity levels, stockholder actions, and global economic/political conditions[252] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Details equity security purchases, including shares withheld for tax liabilities and repurchases under the Share Repurchase Program Issuer Purchases of Equity Securities (Three Months Ended June 30, 2025): | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that may yet be Purchased under the Plans or Programs | | :----------------------------------- | :------------------------------- | :--------------------------- | :------------------------------------------------------------------------------- | :------------------------------------------------------------------------------------------------- | | April 1, 2025 through April 30, 2025 | — | $— | — | $— | | May 1, 2025 through May 31, 2025 | 31,045 | $1.64 | — | $10,000,000 | | June 1, 2025 through June 30, 2025 | 476,256 | $1.13 | 225,378 | $9,750,281 | | For the three months ended June 30, 2025 | 507,301 | $1.19 | 225,378 | | - The Company repurchased 225,378 shares under its $10.0 million Share Repurchase Program during June 2025, with $9.75 million remaining available[253][254] ITEM 3. DEFAULTS UPON SENIOR SECURITIES No defaults upon senior securities were reported for the period - No defaults upon senior securities[256] ITEM 4. MINE SAFETY DISCLOSURES This item is not applicable to the Company - Mine Safety Disclosures are not applicable[257] ITEM 5. OTHER INFORMATION Director Lee Moak terminated a Rule 10b5-1 trading arrangement for potential sale of Common Stock - Director Lee Moak terminated a Rule 10b5-1 trading arrangement for up to 63,166 shares of Common Stock on June 13, 2025[258] ITEM 6. EXHIBITS Lists all exhibits filed as part of, or incorporated by reference into, the Quarterly Report - Key exhibits include Amendment No. 3 to Credit Agreement (April 30, 2025), Amendment No. 2 to 2021 Long-Term Incentive Plan, and various certifications[261] Signatures The Quarterly Report was duly signed on August 7, 2025, by the Chief Executive Officer and Chief Accounting Officer - The Quarterly Report was signed by George Mattson (CEO) and Alex Chatkewitz (Chief Accounting Officer) on August 7, 2025[267]