CLEAR SECURE, INC. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-Q)

The following Management's Discussion and Analysis of Financial Condition and
Results of Operations ("MD&A") is intended to help readers understand our
results of operations, financial condition and cash flows and should be read in
conjunction with the audited consolidated financial statements and the related
notes included in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2021 ("Annual Report on Form 10-K"). This discussion contains
forward-looking statements that involve risks and uncertainties. Our actual
results could differ materially from those discussed below.

For purposes of this MD&A, the term "we" and other forms thereof refer to Clear
Secure, Inc. and its subsidiaries (collectively, the "Company"), which includes
Alclear Holdings, LLC ("Alclear").

Forward-looking statements

This quarterly report includes certain forward-looking statements within the
meaning of the federal securities laws regarding, among other things, our or
management's intentions, plans, beliefs, expectations or predictions of future
events, which are considered forward-looking statements. You should not place
undue reliance on those statements because they are subject to numerous
uncertainties and factors relating to our operations and business environment,
all of which are difficult to predict and many of which are beyond our control.
Forward-looking statements include information concerning our possible or
assumed future results of operations, including descriptions of our business
strategy. These statements often include words such as "may," "will," "should,"
"believe," "expect," "anticipate," "intend," "plan," "estimate," or similar
expressions. These statements are based upon assumptions that we have made in
light of our experience in the industry, as well as our perceptions of
historical trends, current conditions, expected future developments and other
factors that we believe are appropriate under the circumstances. As you read
this quarterly report, you should understand that these statements are not
guarantees of performance or results. They involve known and unknown risks,
uncertainties and assumptions, including those described under the heading "Risk
Factors" in our Annual Report on Form 10-K. Although we believe that these
forward-looking statements are based upon reasonable assumptions, you should be
aware that many factors, including those described under the heading "Risk
Factors" in our Annual Report on Form 10-K, could affect our actual financial
results or results of operations and could cause actual results to differ
materially from those in the forward-looking statements.

Our forward-looking statements made herein are made only as of the date of this
quarterly report. We expressly disclaim any intent, obligation or undertaking to
update or revise any forward-looking statements made herein to reflect any
change in our expectations with regard thereto or any change in events,
conditions or circumstances on which any such statements are based. All
subsequent written and oral forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by the
cautionary statements contained in this quarterly report.

Insight

We are a member-centric secure identity platform operating under the brand name
CLEAR. At CLEAR we know that you are always you-your biometric identity is
foundational to helping enable frictionless everyday experiences, connecting you
to all the things that make you, YOU, and transforming the way you live, work
and travel. Members enroll in CLEAR to create an unbreakable link between their
identity and biometrics (e.g., eyes, face and fingerprints). CLEAR's current
offerings include: CLEAR Plus, a consumer aviation subscription service, which
enables access to predictable and fast experiences through dedicated entry lanes
in airport security checkpoints nationwide; the flagship CLEAR App including
Home to Gate and Health Pass; and Reserve powered by CLEAR, our virtual queuing
technology that enables customers to manage lines. CLEAR also has software
development kits, ("SDK") and application programming interface ("API")
capabilities to enable our partners to seamlessly integrate directly into our
platform to enable better, faster and more frictionless experiences for our
partners' customers. Use cases enabled by SDKs and APIs include identity
validation, identity verification, attribute validation such as age validation,
vaccine status and payment, among others.

Key Factors Affecting Performance

We believe that our current and future financial growth depends on many factors, including the key factors affecting performance described below.

Ability to increase the total number of cumulative registrations

We are focused on growing Total Cumulative Enrollments and the number of members
that engage with our platform. Our operating results and growth opportunities
depend, in part, on our ability to attract new members, including paying
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members (CLEAR Plus members) as well as new platform members. We rely on
multiple channels to attract new CLEAR Plus members, including in-airport (our
largest channel) which in turn is dependent on the ongoing ability of our
ambassadors to successfully engage with the traveling public. We also rely on
numerous digital channels such as paid search and partnerships. In many cases,
we offer limited time free trials to new members who may convert to paying
members upon the completion of their trial. Our future success is dependent on
those channels continuing to drive new members and our ability to convert free
trial members into paying members.

We believe we will see an acceleration of Total Cumulative Platform Uses
relative to Total Cumulative Enrollments over time as our members use our
products across multiple locations and use cases. We believe this dynamic will
grow the long-term economic value of our platform by increasing total
engagement, expanding our margins and maximizing our revenue. Our future success
is dependent upon maintaining and growing our partnerships as well as ensuring
our platform remains compelling to members.

Although we have historically increased the number of new members over time and successfully converted some free trial members to paid members, our future success depends on our continued ability to do so.

Ability to retain CLEAR Plus members

Our ability to execute on our growth strategy is focused, in part, on our
ability to retain our existing CLEAR Plus members. Frequency and recency of
usage are the leading indicators of retention, and we must continue to provide
frictionless and predictable experiences that our members will use in their
daily lives. The value of the CLEAR platform to our members increases as we add
more use cases and partnerships, which in turn drives more frequent usage and
increases retention. Historically, CLEAR Plus members who used CLEAR in both
aviation and non-aviation venues renewed at rates materially above those who
used CLEAR only in aviation. We cannot be sure that we will be successful in
retaining our members due to any number of factors such as our inability to
successfully implement a new product, adoption of our technology, harm to our
brand or other factors.

Ability to add new partners, retain existing partners, and generate new revenue streams

Our partners include local airport authorities, airlines and other businesses.
Our future success depends on maintaining those relationships, adding new
relationships and maintaining favorable business terms. In addition, our growth
strategy relies on creating new revenue streams such as per partner, per member
or per use transaction fees. Although we believe our service provides
significant value to our partners, our success depends on creating mutually
beneficial partnership agreements. We are focused on innovating both our product
and our platform to improve our members' experience, improve safety and security
and introduce new use cases. We intend to accelerate our pace of innovation to
add more features and use cases, to ultimately deliver greater value to our
members and partners. In the near term, we believe that growing our member base
facilitates our ability to add new partnerships and provide additional
offerings, which we expect will lead to revenue generation opportunities in the
long term.

Schedule of launches of new partners, products and locations

Our financial performance is dependent in part on new partner, product and
location launches. In many cases, we cannot predict the exact timing of those
launches. Delays, resulting either from internal or external factors may have a
material effect on our financial results.

Expenditure schedule; Discretionary investments

Although many of our expenses occur in a predictable manner, some expenses may fluctuate from period to period due to timing.

In addition, management may make discretionary investments when it sees an
opportunity to accelerate growth, add a new partner or acquire talent, among
other reasons. This may lead to volatility or unpredictability in our expense
base and in our profitability.

Maintain a strong unitary economy

Our business model is powered by network effects and has historically been characterized by efficient member acquisition and high retention rates. This is evident by our lifetime value of approximately 18 times over our

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Customer Acquisition Cost for CLEAR Plus members who joined during 2021. The
Lifetime Value relative to our Customer Acquisition Cost for CLEAR Plus members
who joined during 2021 is consistent with the average for prior periods. While
we believe our unit economics will remain attractive, this is dependent on our
ability to add new members efficiently and maintain our historically strong
retention rates. As we grow our market penetration, the cost to acquire new
members could increase and the experience we deliver to members could degrade,
causing lower retention rates. For our definitions of "Lifetime Value" and
"Customer Acquisition Cost" and information about how we calculate these
metrics, see the section titled "-Our Member Acquisition and Retention Strategy"
in our Annual Report on Form 10-K.

Macro environment changes

Our business is dependent on macroeconomic and other events outside of our
control, such as decreased levels of travel or attendance at events, terrorism,
civil unrest, political instability, union and other transit related strikes and
other general economic conditions. We are also subject to changes in
discretionary consumer spending.

Impact of the coronavirus pandemic (COVID-19)

As the impact of the COVID-19 pandemic subsides and the demand for our services
increases, we expect our expenses to increase, in some cases significantly, in
comparison to the second quarter of 2021 and the 2020 fiscal year when we had
lower staffing needs and proactively reduced our operating expenses. These
increased expenses will include higher cost of direct salaries and benefits
driven by field labor, sales and marketing, research and development costs, and
general and administrative (including costs associated with being a public
company and increased equity-based compensation expense). Due to the nature of
our revenue recognition policy (e.g., CLEAR Plus revenues are recognized over
the life of a subscription, which is typically 12 months), our reported revenues
are expected to lag behind Total Bookings. We may incur net losses and negative
adjusted EBITDA in the long term if we are required to increase expenses to
support our growth. See "Risk Factors-Risks Related to Our Financial
Performance" in our Annual Report on Form-10K.

Reorganization operations

Prior to the completion of our initial public offering ("IPO"), we undertook
certain reorganization transactions (the "Reorganization Transactions") such
that Clear Secure, Inc. is now a holding company, and its sole material asset is
a controlling equity interest in Alclear. As the general partner of Alclear,
Clear Secure, Inc. operates and controls all of the business and affairs of
Alclear, has the obligation to absorb losses and receive benefits from Alclear
and, through Alclear and its subsidiaries, conducts our business.

The Reorganization Transactions were accounted for as a reorganization of
entities under common control. As a result, the consolidated financial
statements of the Company recognized the assets and liabilities received in the
Reorganization Transactions at their historical carrying amounts, as reflected
in the historical financial statements of Alclear. The Company consolidates
Alclear on its consolidated financial statements and records a non-controlling
interest, related to the Alclear non-voting common units ("Alclear Units") held
by our founders and pre-IPO members, on its consolidated balance sheets and
statement of operations. See Note 1 in our condensed consolidated financial
statements for a more detailed discussion of the Reorganization Transactions.

Taxes and expenses

After the consummation of our IPO, we became subject to U.S. federal, state and
local income taxes with respect to our allocable share of any taxable income of
Alclear and will be taxed at the prevailing corporate tax rates. Alclear, is
treated as a flow-through entity for U.S. federal income tax purposes, and as
such, has generally not been subject to U.S. federal income tax at the entity
level. Accordingly, the historical results of operations and other financial
information set forth in the Annual Report on Form 10-K do not include any
material provisions for U.S. federal income tax for the periods prior to our
IPO.

In addition to tax expense, we incur expenses related to our operations, plus
payments under the tax receivable agreement ("TRA") described below, which we
expect to be significant. We intend to cause Alclear to make distributions in an
amount sufficient to allow us to pay our tax obligations and operating expenses,
including distributions to fund any ordinary course payments under the TRA.

Following our IPO, we have and we expect to continue to incur increased amounts
of compensation expense, including related to equity awards granted under the
2021 Omnibus Incentive Plan to both existing employees and newly-hired
employees, and grants in connection with new hires could be significant. In
addition, as a new public company, we are implementing additional procedures and
processes for the purpose of addressing the standards and requirements
applicable to
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Public enterprises. We expect to incur additional expenses related to these steps and, among other things, additional directors’ and officers’ liability insurance, attendance fees, SECONDtransfer agent fees, hiring of additional accounting, legal and administrative staff, increased audit and legal fees and other similar expenses.

Agreement on tax claims

In connection with the IPO we entered into the TRA with the Alclear Investments,
LLC and Alclear Investments II, LLC (collectively, the "Alclear Members") that
provides for the payment by us to the Alclear Members of 85% of the amount of
cash savings, if any, in U.S. federal, state and local income tax or franchise
tax that we actually realize (computed using simplifying assumptions to address
the impact of state and local taxes) as a result of (i) any increase in tax
basis in Alclear's assets resulting from (a) exchanges by the Alclear Members
(or their transferees or other assignees) of Alclear Units (along with the
corresponding shares of our Class C Common Stock or Class D Common Stock (as
each defined below), as applicable) for shares of our Class A Common Stock,
$0.00001 par value per share ("Class A Common Stock") or Class B Common Stock,
$0.00001 par value per share ("Class B Common Stock") as applicable, and
purchases of Alclear Units and corresponding shares of Class C Common stock, par
value $0.00001 per share ("Class C Common Stock") or Class D Common Stock,
$0.00001 par value per share ("Class D Common Stock" and, together with the
Class A Common Stock, Class B Common Stock and Class C Common Stock,
collectively, "Common Stock"), as the case may be, from Alclear Members (or
their transferees or other assignees) or (b) payments under the TRA, and (ii)
tax benefits related to imputed interest deemed arising as a result of payments
made under the TRA.

The actual increase in tax basis, as well as the amount and timing of any
payments under these agreements, varies depending upon a number of factors,
including the timing of exchanges by or purchases from the Alclear Members, the
price of our Class A Common Stock at the time of the exchange, the extent to
which such exchanges are taxable, the amount and timing of the taxable income we
generate in the future and the tax rate then applicable and the portion of our
payments under the TRA constituting imputed interest. During the six months
ended June 30, 2022, the Company recognized certain exchanges. As of June 30,
2022, the Company did not record a TRA liability as a result of these exchanges.

Acquisitions

During the year ended December 31, 2021, the Company made strategic acquisitions
of Whyline, Inc., our virtual queuing technology that enables customers to
manage lines and certain assets of Atlas Certified, LLC., our automated solution
to verify professional licenses and certification data across industries.
Revenues and operating loss related to these acquisitions were insignificant to
the condensed consolidated financial statements.

Key performance indicators

To evaluate performance of the business, we utilize a variety of other non-GAAP
financial reporting and performance measures. These key measures include Total
Bookings, Total Cumulative Enrollments, Total Cumulative Platform Uses, and
Annual CLEAR Plus Net Member Retention.

Total reservations

Total Bookings represent our total revenue plus the change in deferred revenue
during the period. Total Bookings in any particular period reflect sales to new
and renewing CLEAR Plus subscribers plus any accrued billings to partners.
Management believes that Total Bookings is an important measure of the current
health and growth of the business and views it as a leading indicator.

                                              Three Months Ended                                                      Six Months Ended
                    June 30,           June 30,                                              June 30,          June 30,
                      2022               2021             $ Change             % Change        2022              2021             $ Change            % Change
Total Bookings (in
millions)          $  122.9          $    70.0          $    52.9                     76  % $  230.7          $  132.0          $    98.7                   75  %



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Total Bookings increased by $52.9 million, or 76%, for the three months ended
June 30, 2022 compared to the three months ended June 30, 2021. The increase was
primarily driven by the continued rebound in air travel and continued strength
of our partnership channels, leading to higher new member enrollments and
retention rates.

Total Bookings increased by $98.7 million, or 75%, for the six months ended June
30, 2022 compared to the six months ended June 30, 2021. The increase was
primarily driven by the continued rebound in air travel and continued strength
of our partnership channels, leading to higher new member enrollments and
retention rates.

Total cumulative registrations

We define Total Cumulative Enrollments as the number of enrollments since
inception as of the end of the period. An Enrollment is defined as any member
who has registered for the CLEAR platform since inception and has a profile
(including limited time free trials regardless of conversion to paid membership)
net of duplicate and/or purged accounts. This includes CLEAR Plus members who
have completed enrollment with CLEAR and have ever activated a payment method,
plus associated family accounts. Management views this metric as an important
tool to analyze the efficacy of our growth and marketing initiatives as new
members are potentially a current and leading indicator of revenues.
                                                                            As of
                                    June 30,                    June 30,
                                      2022                        2021                      Change                % Change
Total Cumulative Enrollments
(in thousands)                       13,097                       6,322                     6,775                   107%


Total Cumulative Enrollments were 13,097 as of June 30, 2022 and 6,322 as of
June 30, 2021, which represented a 107% increase. The year over year growth was
driven by continued strength in air travel and platform (mobile) enrollments.

Total Cumulative Platform Usages

We define Total Cumulative Platform Uses as the number of individual engagements
across CLEAR use cases, including in-airport verifications, since inception as
of the end of the period. We also include airport lounge access verifications,
sports and entertainment venue verifications and Health Pass surveys since
inception as of the end of the period. Management views this metric as an
important tool to analyze the level of engagement of our member base which can
be a leading indicator of future growth, retention and revenue.

                                                                           As of
                                     June 30,                    June 30,
                                       2022                        2021                    Change                % Change
Total Cumulative Platform
Uses (in thousands)                  106,631                      65,503                   41,128                   63%



Total Cumulative Platform Uses was 106,631 as of June 30, 2022 and 65,503 as of
June 30, 2021, which represented a 63% increase, driven by CLEAR Plus
verifications in connection with a rebound in air travel, and continuing use of
Health Pass and Digital Vaccine Pass at large events and return to work for
enterprise partners.

Annual retention of CLEAR Plus Net members

We define Annual CLEAR Plus Net Member Retention as one minus the CLEAR Plus net
member churn on a rolling 12 month basis. We define "CLEAR Plus net member
churn" as total cancellations net of winbacks in the trailing 12 month period
divided by the average active CLEAR Plus members as of the beginning of each
month within the same 12 month period. Winbacks are defined as reactivated
members who have been cancelled for at least 60 days. Active CLEAR Plus members
are defined as members who have completed enrollment with CLEAR and have ever
activated a payment method for our in-airport CLEAR Plus service, including
their registered family plan members. Active CLEAR Plus members also include
those in a grace period of up to 45 days after a billing failure during which
time we attempt to collect updated payment information. Management views this
metric as an important tool to analyze the level of engagement of our member
base, which can be a leading indicator of future growth and revenue, as well as
an indicator of customer satisfaction and long term business economics.
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                                                             As of
                                           June 30,         June 30,
                                             2022             2021            Change
Annual CLEAR Plus Net Member Retention       94.3%            80.6%         

13.7%


Annual CLEAR Plus Net Member Retention was 94.3% as of June 30, 2022 and 80.6%
as of June 30, 2021, a year-over year increase of 1,370 basis points. The
performance was driven by strength in gross renewals and winbacks of previously
cancelled members.
Non-GAAP Financial Measures

In addition to our results as determined in accordance with GAAP, we disclose
Adjusted EBITDA, Free Cash Flow, Adjusted Net Income (Loss) and Adjusted Net
Income (Loss) Per Common Share, Diluted as non-GAAP financial measures that
management believes provide useful information to investors. These measures are
not financial measures calculated in accordance with GAAP and should not be
considered as a substitute for net income (loss), net cash provided by (used in)
operating activities or any other operating performance measure calculated in
accordance with GAAP, and may not be comparable to a similarly titled measure
reported by other companies. Our non-GAAP financial measures are expressed in
thousands.

Adjusted EBITDA

We define Adjusted EBITDA (Loss) as net income (loss) adjusted for income taxes,
interest (income) expense net, depreciation and amortization, losses on asset
disposals, equity-based compensation expense, mark to market of warrant
liabilities, other income (expense), net, acquisition-related costs and changes
in fair value of contingent consideration. Adjusted EBITDA (Loss) is an
important financial measure used by management and our board of directors in
determining performance-based compensation for our management and key employees.

Adjusted net profit (loss)

We define Adjusted Net Income (Loss) as Net income (loss) attributable to Clear
Secure, Inc. adjusted for the net income (loss) attributable to non-controlling
interests, equity-based compensation expense, amortization of acquired
intangible assets, acquisition-related costs, changes in fair value of
contingent consideration and the income tax effect of these adjustments.
Adjusted Net Income (Loss) is used in the calculation of Adjusted Net Income
(Loss) per Common Share as defined below.

Adjusted net earnings (loss) per common share

We compute Adjusted Net Income (Loss) Per Common Share, Basic as Adjusted Net
Income (Loss) divided by Adjusted Weighted-Average Shares Outstanding for our
Class A Common Stock, Class B Common Stock, Class C Common Stock and Class D
Common Stock assuming the exchange of all vested and outstanding common units in
Alclear at the end of each period presented. We do not present Adjusted Net
Income (Loss) per Common Share for shares of our Class B Common Stock although
they are participating securities based on the assumed conversion of those
shares to our Class A Common Stock. We do not present Adjusted Net Income (Loss)
per Common Share on a dilutive basis for periods where we have Adjusted Net Loss
since we do not assume the conversion of any potentially dilutive equity
instruments as the result would be antidilutive. In periods where we have
Adjusted Net Income, the Company also calculates Adjusted Net Income (Loss) Per
Common Share, Diluted based on the effect of potentially dilutive equity
instruments for the periods presented using the treasury stock/if-converted
method, as applicable. Adjusted Net Income (Loss) per Common Share is only
applicable for periods after June 29, 2021, post the Reorganization Transactions
and IPO.

Adjusted Net Income (Loss) and Adjusted Earnings (Loss) Per Common Share
exclude, to the extent applicable, the tax effected impact of non-cash expenses
and other items that are not directly related to our core operations. These
items are excluded because they are connected to the Company's long term growth
plan and not intended to increase short term revenue in a specific period.
Further, to the extent that other companies use similar methods in calculating
non-GAAP measures, the provision of supplemental non-GAAP information can allow
for a comparison of the company's relative performance against other companies
that also report non-GAAP operating results.

Free movement of capital

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We define Free Cash Flow as net cash provided by (used in) operating activities
adjusted for purchases of property and equipment plus the value of share
repurchases over fair value. With regards to our CLEAR Plus subscription
service, we generally collect cash from our members upfront for annual
subscriptions. As a result, when the business is growing, Free Cash Flow can be
a real time indicator of the current trajectory of the business.

See below for reconciliations of these non-GAAP financial measures to their most comparable GAAP measures.

Reconciliation of Net Earnings (Net Loss) to Adjusted EBITDA (Loss):

                                        Three Months Ended             Six Months Ended
                                     June 30,       June 30,       June 30,       June 30,
(In thousands)                         2022           2021           2022           2021
Net loss                            $ (12,323)     $ (38,099)     $ (31,117)     $ (51,227)
Income tax expense (benefit)             (147)           211            155            217
Interest (income) expense, net           (187)           142           (194)           213
Other (income) expense, net              (465)             -           (197)             -
Depreciation and amortization           4,328          2,664          8,712 

5,202

Stock-based compensation expense 12,307 5,897 25,436

         7,216
Warrant liabilities                         -         10,903              -         12,796
Adjusted EBITDA (Loss)              $   3,513      $ (18,282)     $   2,795      $ (25,583)

Reconciliation of Net Earnings (Net Loss) to Adjusted Net Earnings (Net Loss)

                                                    Three Months Ended                     Six Months Ended
                                               June 30,            June 30,           June 30,           June 30,
(In thousands)                                   2022                2021               2022               2021

Net loss attributable to ClearSecure, Inc. ($7,155) $(2,004)

         $ (17,482)         $  (2,004)
Reallocation of net loss attributable to
non-controlling interests                        (5,168)            (2,375)           (13,635)            (2,375)
Net loss per above                              (12,323)            (4,379)           (31,117)            (4,379)
Equity-based compensation expense                12,307              3,913             25,436              3,913
Amortization of acquired intangibles                711                  -              1,580                  -
Income tax effect                                  (203)                 -               (405)                 -
Adjusted Net Income (Loss)                   $      492          $    (466)         $  (4,506)         $    (466)


Calculation of adjusted weighted average of outstanding shares Basic

                                                                                         Three Months Ended
                                                                            June 30, 2022                   June 30, 2021

Weighted average number of shares outstanding, basic for Class A common shares

                                                                 79,420,204                      57,371,788

Adjustments

Assumed weighted average conversion of issued and outstanding Class B common shares

                                                                  1,042,234                       1,042,234

Assumed weighted average conversion of the issued and outstanding Class C common Store

                                                                 41,892,237                      44,407,609

Assumed weighted average conversion of issued and outstanding Class D common shares

                                                                 26,705,315                      24,756,018

Assumed weighted average conversion of vested and outstanding warrants

     194,108                       2,431,206
Adjusted Weighted-Average Number of Shares Outstanding, Basic               149,254,098                     130,008,855



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                                                                                        Six Months Ended
                                                                            June 30, 2022                 June 30, 2021

Weighted average number of shares outstanding, basic for Class A common shares

                                                                 78,053,957                      57,371,788

Adjustments

Assumed weighted average conversion of issued and outstanding Class B common shares

                                                                  1,042,234                       1,042,234

Assumed weighted average conversion of the issued and outstanding Class C common Store

                                                                 42,940,757                      44,407,609

Assumed weighted average conversion of issued and outstanding Class D common shares

                                                                 26,705,365                      24,756,018

Assumed weighted average conversion of vested and outstanding warrants

     178,619                       2,431,206
Adjusted Weighted-Average Number of Shares Outstanding, Basic               148,920,932                     130,008,855



Calculation of adjusted basic net earnings (loss) per common share

                                             Three Months Ended                                           Six Months Ended
                                  June 30,                       June 30,                      June 30,                      June 30,
                                    2022                           2021                          2022                          2021
Adjusted net income
(loss)                                       492                           (466)                      (4,506)                          (466)
Adjusted
weighted-average number
of shares outstanding,
basic                                149,254,098                    130,008,855                  148,920,932                    130,008,855
Adjusted Net Income
(Loss) per Common
Share, Basic                                    $0.00                          $0.00                      $(0.03)                          $0.00


Calculation of adjusted net earnings (loss) per common share, diluted

                                                                                 Three Months Ended
                                                                                      June 30,
                                                                                        2022
Adjusted net income                                                                           492
Adjusted weighted-average number of shares outstanding, basic               

149 254 098

Weighted-average impact of unvested RSA's                                               1,213,374
Weighted-average impact of unvested RSU's                                                 642,547
Total                                                                       

151 110 019

Adjusted Net Income per Common Share, Diluted:                                                      $0.00



As noted above, since the Company incurred an adjusted net loss for certain periods presented, the Company has not calculated the adjusted, diluted weighted average number of shares outstanding for those periods, as the result would be anti-dilutive. .

Below is a summary of the company’s adjusted net earnings (loss) per share:

                                                    Three Months Ended                              Six Months Ended
                                            June 30,                 June 30,               June 30,                 June 30,
                                              2022                     2021                   2022                     2021
Adjusted net loss per common share,
basic                                              $0.00                    $0.00                $(0.03)                    $0.00
Adjusted net income (loss) per common
share, diluted                                     $0.00                    $0.00                $(0.03)                    $0.00


Reconciliation of net cash provided by operating activities to Free Cash Flow:

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                                                 Three Months Ended            Six Months Ended
                                               June 30,       June 30,      June 30,      June 30,
(In thousands)                                   2022           2021          2022          2021
Net cash provided by operating activities    $   50,923      $  3,419      $ 75,855      $   3,084
Purchases of property and equipment              (9,681)       (6,416)      (15,214)       (15,210)
Share repurchases over fair value                     -             -             -            712
Free Cash Flow                               $   41,242      $ (2,997)     $ 60,641      $ (11,414)

Components of operating results

Revenue

The Company derives substantially all of its revenue from subscriptions to its
consumer aviation service, CLEAR Plus. The Company offers certain limited-time
free trials, family pricing, and other beneficial pricing through several
channels, including airline and credit card partnerships. Membership
subscription revenue is presented net of taxes, refunds, credit card
chargebacks, and estimated amounts due to a credit card partner.

The Company also generates revenue in relation to sports stadiums and Health
Pass which are and historically have been immaterial to our results. Sports
stadium revenues consist of fees for use of the Company's pods for security
entry at various venues as well as access for members to dedicated entry lanes
at various sports stadiums across the country. Additionally, the Company
generates revenue from transaction fees charged either per use or per user over
a predefined time period, which may include one-time implementation fees,
platform licensing fees, hardware-leasing fees or incremental transaction fees.

Functionnary costs

The Company's expenses consist of cost of revenue share fees, cost of direct
salaries and benefits, research and development, sales and marketing, general
and administrative expenses and depreciation and amortization expenses.

Revenue Cost Sharing Fee

The Company operates as a concessionaire in airports and shares a portion of the
gross receipts generated from the Company's members with the host airports and
airlines ("Revenue Share"). The Revenue Share fee is generally prepaid to the
host airport in the period collected from the member. The Revenue Share fee is
capitalized and subsequently amortized to operating expense over each member's
subscription period, as the payments are refundable on a pro rata basis. Such
prepayments are recorded in "Prepaid Revenue Share fee" in the Company's
condensed consolidated balance sheets. Cost of Revenue Share Fee also includes a
fixed fee component which is expensed in the period incurred and certain
overhead related expenses paid to the airports in relation to our Revenue Share
arrangements.

Cost of direct salaries and benefits

Cost of direct salaries and benefits includes employee-related expenses and
allocated overhead associated with our field ambassadors directly assisting
members and their corresponding travel related costs. Employee-related costs
recorded in direct salaries and benefits consist of salaries, taxes, benefits
and equity-based compensation. Such amounts are direct costs of services and are
recorded in "Cost of direct salaries and benefits" in the Company's condensed
consolidated statement of operations.

Research and development

Research and development expenses consist primarily of employee related
expenses, allocated overhead costs and costs for contractors related to the
Company's development of new products and services and improving existing
products and services. Research and development costs are generally expensed as
incurred, except for costs incurred in connection with the development of
internal-use software that qualify for capitalization as described in our
internal-use software policy. Employee-related expenses consist of salaries,
taxes, benefits and equity-based compensation.

Sales and Marketing

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Sales and marketing expenses consist primarily of costs of general marketing and
promotional activities, advertising fees used to drive subscriber acquisition,
commissions, the production costs to create our advertisements, expenses related
to employees who manage our marketing and brand and allocated overhead costs.

General and administrative

General and administrative expenses consist primarily of employee-related
expenses for the executive, finance, accounting, legal, and human resources
functions. Employee-related expenses consist of salaries, taxes, benefits and
equity-based compensation. General and administrative costs also include the
Company's warrant expense and changes in the fair value of contingent
consideration. In addition, general and administrative expenses include
non-personnel costs, such as legal, accounting and other professional fees,
variable credit card fees and variable mobile enrollment costs, and and all
other supporting corporate expenses not allocated to other departments.

Interest income, net

Interest Income, net consists of interest income from our investment holdings
partially offset by interest expense, which primarily includes amortization of
discounts on our marketable securities and issuance costs on our revolving
credit facility.

Other income (expenses), net

Other income (expense), net includes certain non-recurring non-operating items, including income recognized in connection with a minimum annual guarantee paid to us by a business partner and the impairment of long-lived assets.

Provision for income taxes

As a result of the IPO and Reorganization, the Company became the sole managing
member of Alclear, which is treated as a partnership for U.S. federal and most
applicable state and local income tax purposes. As a partnership, Alclear is not
subject to U.S. federal and most state and local income taxes. Any taxable
income or loss generated by Alclear is passed through to and included in the
taxable income or loss of its members, including the Company, based on ownership
interest. The Company is subject to U.S. federal income taxes, in addition to
state and local income taxes with respect to its allocable share of any taxable
income or loss of Alclear, as well as any stand-alone income or loss generated
by the Company. The Company is also subject to income taxes in Israel,
Argentina, and Mexico.

Comparison of the three and six months ended June 30, 2022 and 2021 (in
millions):

                                                         Three Months Ended
                                         June 30,      June 30,
                                           2022          2021        $ Change       % Change
Revenue                                 $  102.7      $   55.2      $    47.5           86  %
Operating expenses:
Cost of revenue share fee               $   12.3      $    8.3      $     4.0           48  %
Cost of direct salaries and benefits    $   25.3      $   15.8      $     9.5           60  %
Research and development                $   14.3      $   10.9      $     3.4           31  %
Sales and marketing                     $   11.4      $   10.9      $     0.5            5  %
General and administrative              $   48.2      $   44.3      $     3.9            9  %
Depreciation and amortization           $    4.3      $    2.7      $     1.6           59  %
Operating loss                          $  (13.1)     $  (37.7)     $    24.6          (65) %
Other income (expense)
Interest income (expense), net          $    0.2      $   (0.1)     $     0.3             N/A
Other income (expense), net             $    0.5      $      -      $     0.5             N/A
Income (loss) before tax                $  (12.4)     $  (37.8)     $    25.4          (67) %
Income tax benefit (expense)            $    0.1      $   (0.2)     $     0.3             N/A
Net income (loss)                       $  (12.3)     $  (38.0)     $    25.7          (68) %



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                                                          Six Months Ended
                                         June 30,      June 30,
                                           2022          2021        $ Change       % Change
Revenue                                 $  193.3      $  105.7      $    87.6           83  %
Operating expenses:
Cost of revenue share fee               $   24.5      $   16.1      $     8.4           52  %
Cost of direct salaries and benefits    $   48.3      $   28.0      $    20.3           73  %
Research and development                $   29.8      $   19.9      $     9.9           50  %
Sales and marketing                     $   19.2      $   15.9      $     3.3           21  %
General and administrative              $   94.1      $   71.5      $    22.6           32  %
Depreciation and amortization           $    8.7      $    5.2      $     3.5           67  %
Operating loss                          $  (31.4)     $  (50.9)     $    19.5          (38) %
Other income (expense)
Interest income (expense), net          $    0.2      $   (0.2)     $     0.4             N/A
Other income (expense), net             $    0.2      $      -      $     0.2             N/A
Income (loss) before tax                $  (31.0)     $  (51.1)     $    20.1          (39) %
Income tax benefit (expense)            $   (0.2)     $   (0.2)     $       -             N/A
Net income (loss)                       $  (31.2)     $  (51.3)     $    20.1          (39) %

Information on our results of operations for the three and six months ended June 30, 2022 and 2021 is shown below.

Revenue

                              Three Months Ended                                     Six Months Ended
             June 30,      June 30,                                 June 30,      June 30,
               2022          2021         $ Change       % Change     2022          2021        $ Change       % Change
Revenue     $  102.7      $    55.2      $    47.5           86  % $  193.3      $  105.7      $    87.6           83  %



Revenue increased by $47.5 million, or 86%, for the three months ended June 30,
2022 compared to the three months ended June 30, 2021. The increase was
primarily due to an 85% increase in the number of average CLEAR Plus members and
a 1,370 bps increase in Annual CLEAR Plus Net Member Retention. Approximately
30% and 28% of paying CLEAR Plus members in the three months ended June 30, 2022
and 2021, respectively, were on a family plan as of June 30, 2022.

Revenue increased by $87.6 million, or 83%, for the six months ended June 30,
2022 compared to the six months ended June 30, 2021. The increase was primarily
due to a 79% increase in the number of average CLEAR Plus members 1,370 bps
increase in Annual CLEAR Plus Net Member Retention. Approximately 30% and 28% of
paying CLEAR Plus members in the three months ended June 30, 2022 and 2021,
respectively, were on a family plan as of June 30, 2022.

Revenue Cost Sharing Fee

                                              Three Months Ended                                                        Six Months Ended
                     June 30,           June 30,                                               June 30,           June 30,
                       2022               2021             $ Change             % Change         2022               2021             $ Change            % Change
Cost of revenue
share fee          $    12.3          $     8.3          $     4.0                     48  % $    24.5          $    16.1          $     8.4                   52  %



Cost of revenue share fee increased by $4.0 million, or 48%, for the three
months ended June 30, 2022 compared to the three months ended June 30, 2021. The
change was driven by an increase of $0.7 million due to a 26% increase in fixed
airport fees and $3.3 million due to a 59% increase in per member fees, and
partially offset by a $0.9 million non-recurring benefit.

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Cost of revenue share fee increased by $8.4 million, or 52%, for the six months
ended June 30, 2022 compared to the six months ended June 30, 2021. The change
was driven by an increase of $1.5 million due to a 31% increase in fixed airport
fees and $6.9 million due to a 61% increase in per member fees, and partially
offset by a $0.9 million non-recurring benefit.

Cost of salaries and direct benefits

                                                Three Months Ended                                                        Six Months Ended
                       June 30,           June 30,                                               June 30,           June 30,
                         2022               2021             $ Change             % Change         2022               2021             $ Change            % Change
Cost of direct
salaries and
benefits             $    25.3          $    15.8          $     9.5                   60.1  % $    48.3          $    28.0          $    20.3                   73  %


Cost of direct salaries and benefits expenses increased by $9.5 million, or 60%,
for the three months ended June 30, 2022 compared to the three months ended June
30, 2021. The change was primarily due to increased employee compensation costs
of $8.9 million caused by increasing travel volumes leading to higher staffing
needs.

Cost of direct salaries and benefits increased by $20.3 million, or 73%, for the
six months ended June 30, 2022 compared to the six months ended June 30, 2021.
The change was primarily due to increased employee compensation costs of $19.3
million caused by increasing travel volumes leading to higher staffing needs.

Research and development

                                                        Three Months Ended                                                        Six Months Ended
                               June 30,           June 30,                                               June 30,           June 30,
                                 2022               2021             $ Change             % Change         2022               2021             $ Change            % Change

Research and development $14.3 $10.9 $3.4

                     31  % $    29.8          $    19.9          $     9.9                   50  %


Research and development expenses increased by $3.4 million, or 31%, for the
three months ended June 30, 2022 compared to the three months ended June 30,
2021. The change was primarily due to an increase of $3.9 million of
employee-related expenses, including equity-based compensation costs, partially
offset by a decrease of $0.6 million for professional fees.

Research and development expenses increased by $9.9 million, or 50%, for the six
months ended June 30, 2022 compared to the six months ended June 30, 2021. The
change was primarily due to an increase of $10.8 million of employee-related
expenses, including equity-based compensation costs, partially offset by a
decrease of $1.3 million for professional fees.

Sales and marketing

                                                      Three Months Ended                                                        Six Months Ended
                             June 30,           June 30,                                               June 30,           June 30,
                               2022               2021             $ Change             % Change         2022               2021             $ Change            % Change
Sales and marketing        $    11.4          $    10.9          $     0.5                      5  % $    19.2          $    15.9          $     3.3                   21  %



Sales and marketing expenses increased by $0.5 million, or 5%, for the three
months ended June 30, 2022 compared to the three months ended June 30, 2021. The
change was driven primarily by increased ambassador commission expense of $3.6
million due to higher new member enrollments, partially offset by a $2.8 million
decrease in discretionary marketing expenses and a $0.5 million decrease for
professional fees.

Sales and marketing expenses increased by $3.3 million, or 21%, for the six
months ended June 30, 2022 compared to the six months ended June 30, 2021. The
change was driven primarily by increased ambassador commission expense of $6.6
million due to higher new member enrollments and a $0.7 million increase for
employee-related expenses, including equity-
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based compensation costs, partially offset by a $3.8 million decrease in discretionary marketing expenses and a $0.5 million reduction in professional fees.

general and administrative

                                                          Three Months Ended                                                        Six Months Ended
                                 June 30,           June 30,                                               June 30,           June 30,
                                   2022               2021             $ Change             % Change         2022               2021             $ Change            % Change
General and administrative     $    48.2          $    44.3          $     3.9                      9  % $    94.1          $    71.5          $    22.6                   32  %



General and administrative expenses increased by $3.9 million, or 9%, for the
three months ended June 30, 2022 compared to the three months ended June 30,
2021. The change was primarily driven by a $2.2 million increase for technology
related costs and a $2.0 million increase in credit card fees related to higher
enrollments. Additionally, employee-related expenses increased by $11.3 million,
including equity-based compensation costs, offset by an decrease in non-employee
equity-based compensation costs of $12.6 million, which included a reduction in
the mark to market of warrant liabilities of $10.9 million.

General and administrative expenses increased by $22.6 million, or 32%, for the
six months ended June 30, 2022 compared to the six months ended June 30, 2021.
The change was primarily driven by a $25.1 million increase in employee-related
expenses, including equity-based compensation costs, offset by an decrease in
non-employee equity-based compensation costs of $14.7 million, which included a
reduction in the mark to market of warrant liabilities of $12.8 million.
Additionally, technology costs increased by $4.6 million, credit card fees
increased by $4.1 million related to higher enrollments, and insurance costs
increased by $2.0 million. These increases were partially offset by a decrease
in professional fees for $1.7 million.

Non-operating income (expenses)

                                                     Three Months Ended                                                      Six Months Ended
                             June 30,           June 30,                                             June 30,           June 30,
                               2022               2021             $ Change            % Change        2022               2021             $ Change           % Change
Interest Income, net       $     0.2          $    (0.1)         $     0.3                     N/A $     0.2          $    (0.2)         $     0.4                   N/A



Interest income, net increased by $0.3 million, for the three months ended June
30, 2022 compared to the three months ended June 30, 2021. The increase was
driven by higher interest income on our marketable securities, partially offset
by higher amortization of discounts on our marketable securities.

Interest income, net increased by $0.4 million, for the six months ended June
30, 2022 compared to the six months ended June 30, 2021. The increase was driven
by higher interest income on marketable securities, partially offset by higher
amortization of discounts on our marketable securities.

                                                Three Months Ended                                                       Six Months Ended
                       June 30,             June 30,                                             June 30,           June 30,
                         2022                 2021             $ Change            % Change        2022               2021             $ Change           % Change
Other income        $    0.5              $       -          $     0.5                     N/A $     0.5          $       -          $     0.5                   N/A
Other expense       $      -              $       -          $       -                     N/A $    (0.3)         $       -          $    (0.3)                  N/A
Other income
(expense), net      $    0.5              $       -          $     0.5                     N/A $     0.2          $       -          $     0.2                   N/A


Other income (expenses), net increased by $0.5 millionfor the three months ended June 30, 2022 compared to the three months ended June 30, 2021. The variation is mainly explained by a non-recurring customer payment for $0.5 million.

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Other income (expense), net decreased by $0.2 million, for the six months ended
June 30, 2022 compared to the six months ended June 30, 2021. The change was
primarily driven by a non-recurring customer settlement for $0.5 million,
partially offset by an impairment of long-lived assets during the current year.

Income tax benefit (expense)
                                             Three Months Ended                                                      Six Months Ended
                     June 30,           June 30,                                             June 30,           June 30,
                       2022               2021             $ Change            % Change        2022               2021             $ Change           % Change
Income tax benefit
(expense)          $     0.1          $    (0.2)         $     0.3                     N/A $    (0.2)         $    (0.2)         $       -                   N/A



Income tax benefit increased by $0.3 million for the three months ended June 30,
2022 compared to the three months ended June 30, 2021. The change was primarily
due to the impact of state and foreign taxes.

There was no change in income tax profit/(expense) for the six months ended
June 30, 2022 compared to the half-year ended June 30, 2021.

Cash and capital resources

Our operations have been funded primarily through equity financing and cash flow from operations. Of the June 30, 2022we had cash and cash equivalents of $339.7 million and negotiable securities of $333.9 million.

Historically, our principal uses of cash and cash equivalents have included
funding our operations, capital expenditures, repurchases of members' equity and
more recently, business combinations that enhance our strategic positioning. We
may also use our cash and cash equivalents to repurchase our Class A Common
Stock. We plan to finance our operations and capital expenditures largely
through cash generated from the proceeds of our IPO and operations. We believe
our existing cash and cash equivalents, marketable securities, cash provided by
operations and the availability of additional funds under our Credit Agreement
(as defined below) will be sufficient to meet our working capital and capital
expenditure needs for at least the next 12 months, including known commitments
and contingencies as discussed below. Future capital expenditure will generally
relate to building enhancements to the functionality of our current platform,
equipment, leasehold improvements and furniture and fixtures related to office
expansion and relocation, and general corporate infrastructure. We have planned
capital expenditures related to the build out of our new office space of
approximately $16.5 million in the next 12 months. As is the case with any
large-scale construction project, the timing and amounts of these expenditures
are subject to uncertainty.

On May 13, 2022, the Company's Board authorized a share repurchase program
pursuant to which the Company may purchase up to $100,000 of its Class A Common
Stock. Under the repurchase program, the Company may purchase shares of its
Class A Common Stock on a discretionary basis from time to time through open
market repurchases, privately negotiated transactions, or other means, including
through Rule 10b5-1 trading plans. The timing and actual number of shares
repurchased will be determined by management depending on a variety of factors,
including stock price, trading volume, market conditions, and other general
business considerations. The repurchase program has no expiration date and may
be modified, suspended, or terminated at any time. No shares have been
repurchased to date during the period covered by this report.

As a result of the COVID-19 pandemic, our operations have been, and we expect
they will continue to be, adversely impacted by government mandated regulations,
and the social distancing practices and health concerns of our guests and
employees. In light of the evolving nature of COVID-19 and the uncertainty it
has produced around the world, we do not believe it is possible to predict the
cumulative and ultimate impact of the COVID-19 pandemic on our future business,
results of operations and financial condition. See "Risk Factors-Risk Related to
Our Business, Brand and Operations-The COVID-19 pandemic has impacted, and may
continue to impact, our business, results of operations and financial condition"
in our Annual Report on Form 10-K.

credit agreement

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On March 31, 2020, we entered into a credit agreement (the "Credit Agreement")
for a three-year $50 million revolving credit facility that expires on March 31,
2023. Borrowings under the Credit Agreement generally will bear interest between
1.5% and 2.5% per year and will also include interest based on the greater of
the prime rate, LIBOR or New York Federal Reserve Bank ("NYFRB") rate, plus an
applicable margin for specific interest periods. In April 2021, the Company
increased the size of the revolving credit facility to $100 million. As of
June 30, 2022, we had not drawn on the revolving credit facility and did not
have outstanding borrowings under the Credit Agreement.

We have the option to repay any borrowings under the Credit Agreement without
premium or penalty prior to maturity. In addition, the Credit Agreement contains
certain other covenants (none of which relate to financial condition), events of
default and other customary provisions, and also contains customary LIBOR
replacement mechanics. The Credit Agreement contains customary affirmative
covenants, such as financial statement reporting requirements and delivery of
borrowing base certificates, as well as customary covenants that restrict our
ability to, among other things, incur additional indebtedness, sell certain
assets, guarantee obligations of third parties, declare dividends or make
certain distributions, and undergo a merger or consolidation or certain other
transactions.

To June 30, 2022the Company complied with all financial and non-financial covenants of the credit agreement.

Cash flow

Here is a summary of our cash flow for the six months ended June 30, 2022
and June 30, 2021 (in millions):

Semester completed

                                                         June 30, 2022                June 30, 2021              $ Change
Net cash provided by operating activities                    $75.8                         $3.1                   $72.7
Net cash used in investing activities                       ($15.5)                      ($15.5)                    $-

Net cash (used) provided by financing activities ($0.3)

               $64.6                  ($64.9)
Net increase in cash, cash equivalents, and
restricted cash                                              $60.0                        $52.2                    $7.8
Cash, cash equivalents, and restricted cash,
beginning of year                                            $309.1                       $139.1                  $170.0

Net exchange differences on cash, cash equivalents and restricted cash

                                          ($0.1)                         $-                    ($0.1)

Cash, cash equivalents and restricted cash, end of period

                                                       $369.0                       $191.3                  $177.7


Cash flow from operating activities

For the six months ended June 30, 2022, net cash provided by operating
activities was $75.8 million compared to net cash provided by operating
activities of $3.1 million for the six months ended June 30, 2021, an increase
of $72.7 million due to favorable changes in working capital of $40.5 million
primarily related to prepaid and other current assets, accrued liabilities and
deferred revenue. Additionally, there was a decrease in net loss of $20.1
million and an increase in non-cash adjustments to net loss of $12.1 million.

Cash flow from investing activities

For the six months ended June 30, 2022 and the six months ended June 30, 2021net cash used in investing activities remained stable at $15.5 million. Cash flow from financing activities

For the six months ended June 30, 2022, net cash used in financing activities
was $0.3 million compared to net cash provided by financing activities of $64.6
million for the six months ended June 30, 2021, a decrease of $64.9 million. The
change was primarily due to a decrease of $80.3 million in the proceeds from the
issuance of members'units offset by a decrease in amounts used to repurchase
member's deficit of $11.7 million and a decrease in distribution to members of
$4.0 million.

Commitments and Contingencies

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We have non-cancelable operating lease arrangements for office space. As of June
30, 2022, we had future minimum payments of $32.3 million, with $2.3 million due
in 2022. See Note 8 within the condensed consolidated financial statements for
information related to our lease obligations.

On November 4, 2021, the Company entered into a lease of an office building to
house the Company's corporate headquarters. The Lease Agreement provides for a
commencement on the later of October 1, 2022 or the date on which the Landlord
delivers possession of the premises with certain agreed upon improvements to be
made by the Landlord completed. The term of the Lease Agreement is fifteen years
after the date that rent obligations begin, with an option to renew for one
5-year or 10-year period at Fair Market Value (as defined in the Lease
Agreement) by providing the Landlord with 18 months' notice and certain other
requirements. The aggregate undiscounted future minimum lease payments are
approximately $177.5 million.

We enter into agreements with airports for access to floor and office space. As
of June 30, 2022, we had future minimum payments of $36.8 million. See Note 19
within the condensed consolidated financial statements.

The Company has commitments for future marketing expenditures at sports stadiums in $2.1 million of the June 30, 2022.

The Company is subject to certain minimum expenditure commitments of approximately
$11.7 million over the next two years under service arrangements.

Significant Accounting Policies and Estimates

The preparation of the condensed consolidated financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosures of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the reported periods. The Securities and Exchange
Commission ("SEC") has defined a company's critical accounting policies as the
ones that are most important to the portrayal of a company's financial condition
and results of operations, and which require a company to make its most
difficult and subjective judgments. Based on this definition, we have identified
the critical accounting policies and judgments addressed below. We base our
estimates on historical experience and on various other assumptions that we
believe to be reasonable under the circumstances. Actual results may differ from
these estimates.

Tax Receivable Agreement

The Company entered into a Tax Receivable Agreement ("TRA") which generally
provides for payment by the Company to the remaining members of Alclear, the
"TRA Holders," of 85% of the net cash savings, if any, in U.S. federal, state
and local income tax and franchise tax that the Company actually realizes or is
deemed to realize in certain circumstances. The Company will retain the benefit
of the remaining 15% of these net cash savings. As of June 30, 2022, the Company
did not record a liability from the TRA.

Business combinations

Accounting for business combinations requires us to make significant estimates
and assumptions with respect to the the fair value of identifiable assets and
liabilities acquired in a business combination, especially with respect to
intangible assets. The initial fair values recorded are subject to adjustments
for up to one year after the closing date of the acquisition to reflect final
valuations.

Recent accounting pronouncements

See Note 2, Summary of Significant Accounting Policies in the Condensed Consolidated Financial Statements, for recently issued accounting pronouncements and their expected impact.

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