# Strata Critical Medical, Inc.: Form 10-Q for the period ended Sep 30, 2024

- Company: [Strata Critical Medical, Inc.](/companies/srta.md) (CIK 1779128)
- Form: 10-Q
- Filed: 2024-11-12
- Accepted by EDGAR: Nov 12, 2024, 12:20 ET
- Period: 2024-09-30
- Accession: 0001779128-24-000126
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1779128/000177912824000126/blde-20240930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1779128/000177912824000126/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-07-01 to 2024-09-30 | $74.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2024-01-01 to 2024-09-30 | $194.3m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-07-01 to 2024-09-30 | $55.0m | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2024-01-01 to 2024-09-30 | $148.0m | us-gaap:CostOfRevenue |
| Operating income | 3 months, 2024-07-01 to 2024-09-30 | −$3.5m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-01-01 to 2024-09-30 | −$25.6m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-07-01 to 2024-09-30 | −$118.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-01-01 to 2024-09-30 | −$150.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-07-01 to 2024-09-30 | −$2.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-01-01 to 2024-09-30 | −$17.5m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-07-01 to 2024-09-30 | −$0.03 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-01-01 to 2024-09-30 | −$0.23 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | −$0.03 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | −$0.23 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-07-01 to 2024-09-30 | 78,044,254 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-01-01 to 2024-09-30 | 77,151,361 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | −$767.0k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-01-01 to 2024-09-30 | $26.3m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 9 months, 2024-01-01 to 2024-09-30 | $244.0k | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2024-09-30 | $20.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-09-30 | $171.8m | us-gaap:AssetsCurrent |
| Total assets | at 2024-09-30 | $282.9m | us-gaap:Assets |
| Current liabilities | at 2024-09-30 | $27.2m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-09-30 | $49.4m | us-gaap:Liabilities |
| Shareholders' equity | at 2024-09-30 | $233.5m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 70,906 characters.

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.*

*In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs.*

### Forward-Looking Statements

This Quarterly Report on Form 10-Q may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified using forward-looking terminology, including the terms “believes”, “estimates”, “anticipates”, “expects”, “seeks”, “projects”, “intends”, “plans”, “may”, “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in several places throughout this report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, results of operations, financial condition, liquidity, prospects, growth, strategies, the markets in which we operate and the development of Electric Vertical Aircraft (“EVA”) technology. Such forward-looking statements are based on available current market material and management’s expectations, beliefs, and forecasts concerning future events impacting us and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.

Our operations and financial results are subject to various risks and uncertainties. The following are among those factors, but are not the only factors, that could adversely affect us and/or that may cause actual results to differ materially from such forward-looking statements:

- continued occurrence of significant losses, which we have experienced since inception;
- the markets in which we operate may fail to grow or may grow more slowly than expected;
- our ability to effectively market and sell air transportation as a substitute for conventional methods of transportation;
- changes in consumer preferences, discretionary spending and other economic conditions;
- reliance on certain customers which could impact our Passenger segment revenue;
- the inability or unavailability to use or take advantage of the shift, or lack thereof, to EVA technology;
- our ability to enter new markets and offer new routes and services;
- any adverse publicity stemming from accidents involving small aircraft, helicopters or charter flights and, in particular, any accidents involving our third-party operators;
- any change to the ownership of our aircraft and the operational and business challenges related thereto;
- effects of competition;
- our reliance on contractual relationships with certain transplant centers, hospitals and Organ Procurement Organizations;
- harm to our reputation and brand;
- our ability to provide high-quality customer support;
- our ability to maintain a high daily aircraft usage rate and to aggregate fliers on our by-the-seat flights;
- impact of natural disasters, outbreaks and pandemics, economic, social, weather, growth constraints, geopolitical, and regulatory conditions or other circumstances on metropolitan areas and airports where we have geographic concentration;
- the effects of climate change;
- the availability of aircraft fuel;
- our ability to address system failures, defects, errors or vulnerabilities in our website, applications, backend systems or other technology systems or those of third-party technology providers;
- interruptions or security breaches of our information technology systems;
- our placements within mobile operating systems and application marketplaces;
- our ability to protect our intellectual property rights;
- our use of open source software;
- our ability to expand and maintain our infrastructure network;
- our ability to access additional funding;
- the increase of costs and risks associated with international expansion;
- our ability to identify, complete and successfully integrate future acquisitions;
- our ability to manage our growth;
- increases in insurance costs or reductions in insurance coverage;
- the loss of key members of our management team;
- our ability to maintain our company culture;
- effects of fluctuating financial results;
- our reliance on third-party operators to provide and operate aircraft;
- the availability of third-party aircraft operators to match demand;
- disruptions to third-party operators and providers workforce;
- increases in insurance costs or reductions in insurance coverage for our third-party aircraft operators;
- the possibility that our third-party aircraft operators may illegally, improperly or otherwise inappropriately operate our branded aircraft;
- our reliance on third-party web service providers;
- changes in our regulatory environment;
- risk and impact of any litigation we may be subject to;
- regulatory obstacles in local governments;
- the expansion of domestic and foreign privacy and security laws;
- the expansion of environmental regulation;
- our ability to remediate any material weaknesses or maintain effective internal controls over financial reporting;
- our ability to maintain effective internal controls and disclosure controls;
- changes in fair value of our warrants;
- changes to the price of our securities;
- the possibility that our warrants may expire worthless;
- our ability to redeem outstanding warrants;
- our intention to not declare any dividends in the foreseeable future;
- the possibility that we may issue additional equity securities;
- our use of “smaller reporting company” exemptions from disclosure requirements;
- impact of our loss of “emerging growth company” status;
- provisions in our charter that may discourage unsolicited takeover proposals;
- provisions in our charter that designate exclusive forum; and
- the other factors described elsewhere in the Annual Report on Form 10-K for the year ended December 31, 2023, included under the headings “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition” or as described in the other documents and reports we file with the SEC.

Actual results, performance or achievements may differ materially, and potentially adversely, from any forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance. All information set forth herein speaks only as of the date hereof and we disclaim any intention or obligation to update any forward-looking statements, whether as a result of new information, changes in expectations, future events or otherwise.

### Overview

Blade Air Mobility, Inc. (“Blade” or the “Company”) provides air transportation and logistics for hospitals across the United States, where it is one of the largest transporters of human organs for transplant, and for passengers, with helicopter and fixed wing services primarily in the Northeast United States and Southern Europe. Based in New York City, Blade's asset-light model, coupled with its exclusive passenger terminal infrastructure and proprietary technologies, is designed to facilitate a seamless transition from helicopters and fixed-wing aircraft to Electric Vertical Aircraft (“EVA” or “eVTOL”), enabling lower cost air mobility that is both quiet and emission-free.

Blade operates in three key product lines across two segments (see Note 7 to the Unaudited Interim Condensed Consolidated Financial Statements included herein for further information on reportable segments):

#### Passenger segment

- *Short Distance –* Consisting primarily of helicopter and amphibious seaplane flights in the United States and Europe between 10 and 100 miles in distance. Flights are available for purchase both by-the-seat and on a full aircraft charter basis.
- *Jet and Other –* Consists principally of revenues from non-medical jet charter and by-the-seat jet flights between New York and South Florida (discontinued in November 2023), revenue from brand partners for exposure to Blade fliers and certain ground transportation services.

#### Medical segment

- *MediMobility Organ Transport –* Consisting primarily of transportation of human organs for transplant and/or the medical teams supporting these services. Blade also offers additional services including donor logistics coordination and support evaluating potential donor organs through Trinity Organ Placement Services (“TOPS”), launched at the end of 2023.

### Seats Flown

The following table reflects the key operating metric we use to evaluate the Passenger segment:

| 2024 | Three Months Ended September 30, 2023 | 2024 | Nine Months Ended September 30, 2023 |  |
| --- | ---: | ---: | ---: | ---: |
| Seats flown – all passenger flights | 45,977 | 50,821 | 117,722 | 121,008 |

We define “Seats flown — all passenger flights” (Seats Flown) as the total number of seats purchased by paying passengers on all flights, whether sold by-the-seat or within a charter arrangement. Our long-term consumer-facing strategy is primarily focused on growth in by-the-seat products, and we believe that Seats Flown is an important indicator of our progress in executing on this growth strategy. This metric is not always directly correlated with revenue given the significant variability in the price we charge per seat flown across our various products and routes. For products and routes sold by-the-seat, we fly significantly more passengers at a low price per seat; which is captured by Seats Flown. Passenger revenue is heavily influenced by the Jet and Other product lines where we typically fly fewer passengers over long distances at a high price. We believe the Seats Flown metric is useful to investors in understanding the overall scale of our Passenger segment and trends in the number of passengers paying to use our service.

The Activity in Canada ended on August 31, 2024. As a result, the three- and nine-month periods ending September 30, 2024, and 2023 included two and eight months, and three and nine months, respectively, of Seats Flown activity in Canada.

### Our Business Model

Blade leverages an asset-light business model: we primarily utilize aircraft that are owned and/or operated by third-parties on Blade’s behalf. In these arrangements, pilots, maintenance, hangar, insurance, and fuel are all costs borne by our network of operators, which provide aircraft flight time to Blade at fixed hourly rates. This enables our operator partners to focus on training pilots, maintaining aircraft and flying, while we maintain the relationship with our customer from booking through flight arrival. For flights offered for sale by-the-seat, Blade schedules flights based on demand analysis and takes the economic risk of aggregating fliers to optimize flight profitability, providing predictable margins for our operators.

When utilizing third-party aircraft and/or aircraft operators, we typically pre-negotiate fixed hourly rates and flight times, paying only for flights actually flown, creating a predictable and flexible cost structure. Blade provides guaranteed flight commitments to some of our third-party operators through capacity purchase agreements, which enable Blade to ensure dedicated access to such aircraft with enhanced crew availability, lower costs and, in many cases, the ability to unlock more favorable rates when flying more than the minimum number of hours we guarantee to the operator. Additionally, a significant portion of Blade trips are flown by safety-vetted operators to whom Blade makes no commitments, providing us with additional flexible capacity for high demand periods.

We also own a small number of fixed wing aircraft, operated and maintained by a third-party, that we utilize primarily for the Medical segment. We prioritize the use of owned aircraft and dedicated aircraft under capacity purchase agreements, which provide better economies of scale. We size our owned fleet and our commitments under capacity purchase agreements significantly below our expected demand, enabling us to maximize utilization on those aircraft while fulfilling incremental demand through our network of non-dedicated operators.

Blade’s proprietary “customer-to-cockpit” technology stack enables us to manage fliers and organ transports across numerous simultaneous flights with multiple operators around the world. We believe that this technology, which provides (i) real-time tracking of organ transports and passenger flights; (ii) profit/loss information on a flight-by-flight basis; (iii) customized portals for all relevant parties including pilots, accounting teams, operator dispatch, transplant coordinators and Blade’s logistics team; and (iv) a customer-facing app for passenger missions, will enable us to continue to scale our business. This technology stack was built with future growth in mind and is designed to allow our platform to be easily scaled to accommodate, among other things, rapid increases in volume, new routes, new operators, broader flight schedules, international expansion, next-generation verticraft and ancillary services (e.g., last/first-mile ground connections, trip cancellation insurance, baggage delivery) through our mobile apps, website and cloud-based tools.

Our asset-light business model was developed to be scalable and profitable using conventional aircraft today while enabling a seamless transition to EVA, once they are certified for public use. We intend to leverage the expected lower operating costs of EVA versus helicopters to reduce the consumer’s price for our flights. Additionally, we expect the reduced noise footprint and zero carbon emission characteristics of EVA to allow for the development of new, vertical landing infrastructure (“vertiports”) in our existing and new markets.

### Factors Affecting our Performance

### Ability to attract and retain fliers in our Short Distance product line

Our success depends, in part, on our ability to cost-effectively attract new fliers, retain existing fliers, and increase utilization of our platform by existing fliers. Historically, we have made, and expect that we will need to continue to make, significant investments and implement strategic initiatives in order to attract new fliers, such as flier acquisition campaigns and the launching of new scheduled routes. These investments and initiatives may not be effective in generating sales growth or profits. In addition, marketing campaigns can be expensive and may not result in the acquisition of additional fliers in a cost-effective manner, if at all. As our brand becomes more widely known, future marketing campaigns or brand content may not attract new fliers at the same rate as past campaigns or brand content. If we are unable to attract new fliers, our business, financial condition, and results of operations will be adversely affected.

Our fliers have a wide variety of options for transportation, including business aviation, commercial airlines, private aircraft operators, personal vehicles, rental cars, taxis, public transit, and ride-sharing offerings. To expand our flier base, we must appeal to new fliers who have historically used other forms of transportation. If fliers do not perceive our urban air mobility services to be reliable, safe, and cost-effective, or if we fail to offer new and relevant services and features on our platform, we may not be able to attract or retain fliers or increase their utilization of our platform. If we fail to continue to grow our flier base, retain existing fliers, or increase the overall utilization of our platform, our business, financial condition, and results of operations could be adversely affected.

### Ability to attract and retain customers in our MediMobility Organ Transport and Jet and Other product lines

Our MediMobility Organ Transport product line primarily serves transplant centers, organ procurement organizations and hospitals (collectively, “Medical Customers”). Transportation for the hearts, lungs and livers that make up the vast majority of this product line is typically requested only hours before the required departure time. Our ability to successfully fulfill these requests with consistent pricing on the requested aircraft type, be it jet, turboprop or helicopter, is the primary metric by which Medical Customers evaluate our performance.

The organ transportation market is highly competitive and we compete for organ transportation business primarily on our ability to provide reliable, end-to-end air and ground transportation at competitive pricing. Increasingly, we compete directly with manufacturers of organ preservation equipment that also offer transportation or with providers that offer additional services, such as surgical organ recovery, that our customers find valuable. We may face increased competition as our Medical Customers may prefer a streamlined logistics offering, including services or technology that we cannot provide, which could have a material adverse effect on our business, results of operations, and financial condition.

We utilize the same aircraft and aircraft operators in the Jet and Other product line of our Passenger segment. Historically, the combination of our Passenger and MediMobility Organ Transport demand, has been enough to incentivize operators to provide dedicated aircraft and crews for our use. However, there is no guarantee that we will continue to be able to secure dedicated aircraft at favorable rates, particularly given significant increases in demand for private jet aircraft in the United States in recent years. Periods of increased demand for private jets have historically led to increased charter costs and more limited availability in the spot jet charter market. Although this has not limited our ability to maintain or increase our access to dedicated jet aircraft at fixed prices in recent periods, jet charter, which makes up the majority of our Jet and Other product line, is highly competitive and volumes and pricing have historically been significantly influenced by overall market supply and demand.

### Impact of inflation to our business

We generally pay a fixed hourly rate to our third-party operators, based on flight hours flown. These rates are susceptible to inflation and are typically renegotiated on a yearly basis, though some multi-year contracts have fixed rate increases. Some contracts with operators allow for pass-through of fuel price increases above a set threshold. For our owned aircraft, we are more directly exposed to inflation of aircraft operating expenses, including pilot salaries, fuel, insurance, parts and maintenance.

We have historically passed through cost inflation to customers and most contracts with our MediMobility Organ Transport customers automatically pass through any fuel surcharges, but there is no guarantee this will continue in the future.

### Passenger Expansion into New Geographic Markets

Our Passenger segment growth plan is focused on dense urban areas, primarily those with existing air transportation infrastructure that are facing increasing ground congestion. Growth in our Passenger segment will depend in part on our ability to successfully enter into new markets, create and introduce new routes, and expand our existing routes by adding more frequent flights. In these areas, our urban air mobility services can provide the most time savings for our fliers, and given the short distances involved, costs for our services can be comparable to luxury, private car services. Significant changes to our existing routes or the introduction of new and unproven routes may require us to obtain and maintain applicable permits, authorizations, or other regulatory approvals. In addition, EVA may be commercially viable sooner in these markets given that battery technology constraints may limit the range of early models. Large urban markets with existing heliport infrastructure should be able to accommodate EVA while other cities may need several years to permit and build such infrastructure.

If these new or expanded routes are unsuccessful or fail to attract a sufficient number of fliers to be profitable, or we are unable to bring new or expanded routes to market efficiently, our business, financial condition, and results of operations could be adversely affected. Furthermore, new third-party aircraft operator or flier demands regarding our services, including the availability of superior routes or a deterioration in the quality of our existing routes, could negatively affect the attractiveness of our platform and the economics of our business and require us to make substantial changes to and additional investments in our routes or our business model. The number of potential fliers using our urban air mobility services in any market cannot be predicted with any degree of certainty, and we cannot provide assurance that we will be able to operate in a profitable manner in any of our current or targeted future markets.

### Development, approval and acceptance of EVA for commercial service

We intend to leverage the expected lower operating costs of EVA versus helicopters to reduce the price for our flights. Additionally, we expect the reduced noise footprint and zero carbon emission characteristics of EVA to allow for the development of new vertiports in our existing and new markets. However, EVA involves a complex set of technologies, which we rely on original equipment manufacturers (“OEMs”) to develop and our third-party aircraft operators to adopt. However, before EVA can fly passengers or cargo, OEMs must receive requisite approvals from federal transportation authorities. No EVA aircraft are currently certified by the FAA for commercial operations in the United States, and there is no assurance that OEM research and development will result in government certified aircraft that are market-viable or commercially successful in a timely manner, or at all. In order to gain government certification, the performance, reliability, and safety of EVA must be proven, none of which can be assured. Even if EVA aircraft are certified, individual operators must conform EVA aircraft to their licenses, which requires FAA approval, and individual pilots also must be licensed and approved by the FAA to fly EVA aircraft, which could contribute to delays in any widespread use of EVA and potentially limit the number of EVA operators available to our business. There is no assurance that research and development will result in government certified aircraft that are market-viable or commercially successful in a timely manner, or at all.

We believe that Blade is well positioned to introduce EVA into commercial service, once available, for a number of reasons. In our Passenger segment, we believe our existing Short Distance routes will be compatible with EVA, which are initially expected to have a limited range, and our existing terminal space will accommodate EVA. Additionally, we believe that the last-mile transports we perform using helicopters or ground vehicles in our Medical segment may be compatible with EVA, reducing organ transport time and cost for our customers. Blade’s unit economics are designed to be profitable using either conventional helicopters or EVA, even if early EVA do not deliver significant cost savings relative to helicopters. Moreover, Blade’s asset-light business model and technology platform are operator and aircraft agnostic, enabling a seamless transition to EVA.

### Seasonality

#### Passenger segment

Historically, we have experienced significant seasonality in our Short Distance product line with flight volume peaking during the quarters ended June 30 (Q2) and September 30 (Q3) of each fiscal year due to the busy summer travel season, with lower volume during the first and fourth quarter (Q1 and Q4).

Jet and Other revenue has historically been stronger in the first and fourth quarter (Q1 and Q4) given that our by-the-seat jet service between New York and South Florida has historically operated only between November and April. We discontinued this service in Q4 2023 and do not expect the seasonality in our Jet and Other revenue to be significant in 2024.

#### Medical segment

Historically, seasonality in our MediMobility Organ Transport product line has not been significant, though our trip volumes are correlated with the overall supply of donor hearts, livers and lungs in the United States, which can be volatile due to a variety of factors.

### Key Components of the Company’s Results of Operations

### Revenue

Short Distance products are typically purchased using the Blade App and paid for principally via credit card transactions, wire, check, customer credit, and gift cards, with payments principally collected by the Company in advance of the performance of related services. The revenue is recognized when the service is completed.

Jet products are typically purchased through our Flier Relations associates and our app and are paid for principally via checks, wires and credit card. Jet payments are typically collected at the time of booking before the performance of the related service. The revenue is recognized when the service is completed.

MediMobility Organ Transport products are typically purchased through our medical logistics coordinators and are paid for principally via checks and wires. Payments are generally collected after the performance of the related service in accordance with the client's payment terms. The revenue is recognized when the service is completed.

### Cost of Revenue

Cost of revenue consists of flight costs paid to operators of aircraft and vehicles, landing fees, depreciation of aircraft and vehicles, ROU asset amortization, internal costs incurred in generating organ ground transportation revenue using the Company's owned vehicles and costs of operating our owned aircraft including fuel, management fees paid to the operator, maintenance costs and pilot salaries.

### Software Development

Software development expenses consist primarily of staff costs, stock-based compensation costs and capitalized software amortization costs.

### General and Administrative

General and administrative expenses principally include staff costs including stock-based compensation, depreciation and amortization, impairment of intangible assets, directors and officers insurance costs, pilot training costs for owned aircraft, professional fees, credit card processing fees and establishment costs. Depreciation of revenue-generating assets such as aircraft and vehicles are included in Cost of revenue.

### Selling and Marketing

Selling and marketing expenses consist primarily of advertising costs, staff costs including stock-based compensation, marketing expenses, sales commissions and promotion costs. The trend and timing of our brand marketing expenses will depend in part on the timing of our expansion into new markets and other marketing campaigns.

### Results of Operations

The following table presents our consolidated statements of operations for the periods indicated:

*(in thousands)*

| 2024 | Three Months Ended September 30, 2023 | 2024 | Nine Months Ended September 30, | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $74,877 | $71,442 | $194,336 | $177,702 |
| Operating expenses |  |  |  |  |
| Cost of revenue | 55,040 | 55,863 | 148,006 | 144,590 |
| Software development | 800 | 1,076 | 2,441 | 3,639 |
| General and administrative | 20,412 | 19,265 | 62,757 | 53,932 |
| Selling and marketing | 2,162 | 2,686 | 6,686 | 8,025 |
| Total operating expenses | 78,414 | 78,890 | 219,890 | 210,186 |
| Loss from operations | (3,537) | (7,448) | (25,554) | (32,484) |
| Other non-operating income (expense) |  |  |  |  |
| Interest income | 1,764 | 2,147 | 5,624 | 6,178 |
| Change in fair value of warrant liabilities | (299) | 5,719 | 2,266 | 3,823 |
| Realized loss from sales of short-term investments | — | — | — | (95) |
| Total other non-operating income | 1,465 | 7,866 | 7,890 | 9,906 |
| (Loss) income before income taxes | (2,072) | 418 | (17,664) | (22,578) |
| Income tax (benefit) expense | (118) | 129 | (150) | (443) |
| Net (loss) income | $(1,954) | $289 | $(17,514) | $(22,135) |

33

### Revenue

Disaggregated revenue by product line was as follows:

*(in thousands, except percentages)*

| 2024 Product Line: | Three Months Ended September 30, 2023 | % Change | 2024 | Nine Months Ended September 30, 2023 | % Change |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Short Distance | $32,352 | $30,388 | 6% | $63,070 | $59,997 | 5% |
| Jet and Other | 6,463 | 7,607 | (15)% | 20,837 | 23,092 | (10)% |
| MediMobility Organ Transport | 36,062 | 33,447 | 8% | 110,429 | 94,613 | 17% |
| Total Revenue | $74,877 | $71,442 | 5% | $194,336 | $177,702 | 9% |

### Comparison of the Three Months Ended September 30, 2024 and 2023

For the three months ended September 30, 2024 and 2023, revenue increased by $3.4 million or 5%, from $71.4 million in 2023 to $74.9 million in 2024.

Short Distance revenue increased by $2.0 million or 6%, from $30.4 million in 2023 to $32.4 million in 2024. Growth in Short Distance was primarily driven by growth in our Hamptons seasonal service for a $2.3 million increase, and increased volumes of Northeast helicopter charters for a $0.8 million increase. This was partially offset by the August 31, 2024 termination of our Canada routes for a $0.8 million decrease, and lower activity in Europe for a $0.4 million decrease.

Jet and Other revenue decreased by $1.1 million or (15)% from $7.6 million in 2023 to $6.5 million in 2024. The decline was driven by a decrease in jet charters of $1.4 million, partially offset by the introduction of the new seasonal Hamptons Streamliner Bus for a $0.3 million increase.

MediMobility Organ Transport revenue increased by $2.6 million or 8% from $33.4 million in 2023 to $36.1 million in 2024. Growth in MediMobility Organ Transport was driven primarily by growth in ground revenue for $1.8 million and $0.4 million for TOPS (TOPS was launched at the end of 2023), the remainder was due to new clients.

### Comparison of the Nine Months Ended September 30, 2024 and 2023

For the nine months ended September 30, 2024 and 2023, revenue increased by $16.6 million or 9%, from $177.7 million in 2023 to $194.3 million in 2024.

Short Distance revenue increased by $3.1 million or 5% from $60.0 million in 2023 to $63.1 million in 2024. Growth in Short Distance was primarily driven by growth in our Hamptons seasonal service for a $2.2 million increase, growth in our New York airport transfer products, including annual pass activity, for a $1.0 million increase, and increased volumes of Northeast helicopter charters for a $1.0 million increase. This was partially offset by lower activity and the termination of our Canada routes for a $1.1 million decrease.

Jet and Other revenue decreased by $(2.3) million or (10)% from $23.1 million in 2023 to $20.8 million in 2024. $3.9 million decrease is attributable to the discontinuation of our seasonal by-the-seat jet service between New York and South Florida. This decrease was partially offset by a $0.9 million growth in jet charters, and higher brand partnership revenues and revenue from the introduction of the new seasonal Hamptons Streamliner Bus in the current year period.

MediMobility Organ Transport revenue increased by $15.8 million or 17% from $94.6 million in 2023 to $110.4 million in 2024. The growth was driven primarily by: $6.6 million attributable to the addition of new hospital clients including of TOPS; higher revenue from existing clients of $13.5 million (higher volumes, higher revenue per trip and higher ground revenue). Those increases were partially offset by a $4.3 million decrease due to one temporary customer we supported only in the 2023 period. Excluding the impact of the temporary customer, revenue would have grown 22% versus the 2023 period.

### Cost of Revenue

*(in thousands, except percentages)*

| 2024 | Three Months Ended September 30, 2023 | % Change | 2024 | Nine Months Ended September 30, 2023 | % Change |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Cost of revenue | $55,040 | $55,863 | (1)% | $148,006 | $144,590 | 2% |
| Percentage of revenue | 74% | 78% | (4)% | 76% | 81% | (5)% |

### Comparison of the Three Months Ended September 30, 2024 and 2023

For the three months ended September 30, 2024 and 2023, cost of revenue decreased by $(0.8) million, or (1)% from $55.9 million during 2023 to $55.0 million in 2024, driven by lower effective cost of revenue per flight (explained in the following paragraph), only partially offset by the higher volumes.

Cost of revenue as a percentage of revenues decreased by 4 percentage points from 78% in 2023 to 74% in 2024. This change is attributable primarily to mix-shift to dedicated aircraft which operate at enhanced economies of scale in the Medical segment, higher revenue per flight hour in the Medical segment and improved pricing along with improved load factor in our New York airport transfer and Hamptons by-the-seat products, as well as lower cost of revenue in Canada of $1.5 million impact (Canada operated at a loss in the prior year period with cost of revenue higher than revenue) due to our exit from the Canadian market on August 31, 2024.

### Comparison of the Nine Months Ended September 30, 2024 and 2023

For the nine months ended September 30, 2024 and 2023, cost of revenue increased by $3.4 million or 2%, from $144.6 million during 2023 to $148.0 million during 2024 driven by increased flight volume.

Cost of revenue as a percentage of revenues decreased by 5 percentage points from 81% in 2023 to 76% in 2024, attributable primarily to: a mix-shift to dedicated aircraft in the Medical segment, which operate at enhanced economies of scale; increased revenue per flight hour in our Medical segment; improved pricing with improved load factor in our Hamptons by-the-seat product and in our New York airport transfer products, New York airport products moved to profit from a loss position in the prior year period; and improved pricing in jet charter flights compared to the prior year period.

### Software Development

*(in thousands, except percentages)*

| 2024 | Three Months Ended September 30, 2023 | % Change | 2024 | Nine Months Ended September 30, 2023 | % Change |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Software development | $800 | 1,076 | (26)% | $2,441 | 3,639 | (33)% |
| Percentage of revenue | 1% | 2% |  | 1% | 2% |  |

### Comparison of the Three Months Ended September 30, 2024 and 2023

For the three months ended September 30, 2024 and 2023, software development costs decreased by $(0.3) million, or (26)%, from $1.1 million during 2023 to $0.8 million in 2024, primarily due to software capitalization of development costs due to more development initiatives in the 2024 period.

### Comparison of the Nine Months Ended September 30, 2024 and 2023

For the nine months ended September 30, 2024 and 2023, software development costs decreased by $(1.2) million, or (33)%, from $3.6 million during 2023 to $2.4 million during 2024, primarily due to software capitalization of development costs due to more development initiatives in the 2024 period for a $0.8 million impact, and a decrease of $0.4 million in stock-based compensation costs.

### General and Administrative

*(in thousands, except percentages)*

| 2024 | Three Months Ended September 30, 2023 | % Change | 2024 | Nine Months Ended September 30, 2023 | % Change |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| General and administrative | $20,412 | $19,265 | 6% | $62,757 | $53,932 | 16% |
| Percentage of revenue | 27% | 27% |  | 32% | 30% |  |

### Comparison of the Three Months Ended September 30, 2024 and 2023

For the three months ended September 30, 2024 and 2023, general and administrative expense increased by $1.1 million, or 6%, from $19.3 million during 2023 to $20.4 million in 2024.

The primary drivers for the increase were a $2.1 million increase in stock-based compensation largely due to the PSUs granted in the first quarter of the current year period; a $0.8 million increase in expenses related to the owned aircraft (acquired in the second quarter of 2024 and did not exist in the prior year period) as pilot training, hangar costs and insurance; a $0.7 million increase in staff costs mostly attributable to the growth in our Medical segment; a $0.5 million charge for restructuring costs in Europe; and a $0.5 million increase in professional fees. These increases were partially offset by a $2.7 million decrease attributable to a contingent consideration compensation (earn-out) in the prior year period; and a $1.1 million decrease in intangibles amortization costs.

### Comparison of the Nine Months Ended September 30, 2024 and 2023

For the nine months ended September 30, 2024 and 2023, general and administrative expense increased by $8.8 million or 16%, from $53.9 million during 2023 to $62.8 million in 2024.

The primary drivers for the increase were: a $6.5 million increase in stock-based compensation largely due to the PSUs granted in the first quarter of the current year period; a $5.8 million impairment charge of the exclusive rights to air transportation services associated with Blade Canada recorded in current year period; a $2.1 million increase in staff costs attributable mainly to the growth in our Medical segment, a $1.2 million increase in expenses related to the owned aircraft (did not exist in the prior year period) as pilot training, hangar costs and insurance; and a $0.5 million increase due to restructuring costs in Europe; partially offset by a $5.7 million decrease attributable to a contingent consideration compensation (earn-out) in the prior year period, and a $2.1 million decrease in intangibles amortization costs.

### Selling and Marketing

*(in thousands, except percentages)*

| 2024 | Three Months Ended September 30, 2023 | % Change | 2024 | Nine Months Ended September 30, 2023 | % Change |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Selling and marketing | $2,162 | $2,686 | (20)% | $6,686 | $8,025 | (17)% |
| Percentage of revenue | 3% | 4% |  | 3% | 5% |  |

### Comparison of the Three Months Ended September 30, 2024 and 2023

For the three months ended September 30, 2024 and 2023, selling and marketing expense decreased by $(0.5) million, or (20)%, from $2.7 million during 2023 to $2.2 million in 2024. The decrease is attributable primarily to a $0.4 million decrease in cash commissions in the Medical segment and a $0.1 million decrease in stock-based compensation.

### Comparison of the Nine Months Ended September 30, 2024 and 2023

For the nine months ended September 30, 2024 and 2023, selling and marketing expense decreased by $(1.3) million, or (17)%, from $8.0 million during 2023 to $6.7 million in 2024. The decrease is attributable primarily to: a $1.1 million decrease in media spend, primarily driven by the discontinuation of our seasonal by-the-seat jet service between New York and South Florida (which was discontinued in November 2023) and a more disciplined media spend in the winter months; and a $0.9 million decrease in cash commissions in the Medical segment; those decreases were partially offset by a $0.5 million increase in staff costs, inclusive of stock-based compensation.

### Other non-operating income (expense)

*(in thousands, except percentages)*

| 2024 | Three Months Ended September 30, 2023 | % Change | 2024 | Nine Months Ended September 30, 2023 | % Change |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Interest income | $1,764 | $2,147 |  | $5,624 | $6,178 |  |
| Change in fair value of warrant liabilities | (299) | 5,719 |  | 2,266 | 3,823 |  |
| Realized loss from sales of short-term investments | — | — |  | — | (95) |  |
| Total other non-operating income | $1,465 | $7,866 | (81)% | $7,890 | $9,906 | (20)% |

### Comparison of the Three Months Ended September 30, 2024 and 2023

For the three months ended September 30, 2024, total other non-operating income consisted of: (i) $1.8 million interest income, attributable to our short-term investments and our money market funds in the current year period; and (ii) $0.3 million non-cash loss due to fair value revaluation of warrant liabilities as the value of the warrant liabilities fluctuates with the warrants’ market price.

For the three months ended September 30, 2023, total other non-operating income consisted of: (i) $2.1 million interest income, attributable to our short-term investments and our money market funds; and (ii) $5.7 million non-cash gain due to fair value revaluation of warrant liabilities as the value of the warrant liabilities fluctuates with the warrants’ market price.

### Comparison of the Nine Months Ended September 30, 2024 and 2023

For the nine months ended September 30, 2024, total other non-operating income consists of: (i) $5.6 million interest income, attributable to our short-term investments and our money market funds in the current year period; and (ii) $2.3 million non-cash gain due to fair value revaluation of warrant liabilities as the value of the warrant liabilities fluctuates with the warrants’ market price.

For the nine months ended September 30, 2023, total other non-operating income consisted of: (i) $6.2 million interest income, attributable to our short-term investments and our money market funds; and (ii) $3.8 million non-cash gain due to fair value revaluation of warrant liabilities as the value of the warrant liabilities fluctuates with the warrants’ market price.

### Segment Results of Operations

We operate our business as two reportable segments - Passenger and Medical. For additional information about our segments, see Note 7 “Segment and Geographic Information” in the notes to the unaudited interim condensed consolidated financial statements of this Quarterly Report on Form 10-Q.

#### Segment Revenue and Segment Adjusted EBITDA

The following table presents our segment results for the periods indicated:

*(in thousands, except percentages)*

| Segment Revenue | Three Months Ended September 30, 2024 | 2023 | % Change | Nine Months Ended September 30, 2024 | 2023 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Passenger | $38,815 | $37,995 | 2% | $83,907 | $83,089 | 1% |
| Medical | 36,062 | 33,447 | 8% | 110,429 | 94,613 | 17% |
| Total revenue | $74,877 | $71,442 | 5% | $194,336 | $177,702 | 9% |
| **Segment Adjusted EBITDA** |  |  |  |  |  |  |
| Passenger | $5,593 | $2,777 | 101% | $3,724 | $(2,353) | NM(4) |
| Medical | 3,851 | 3,346 | 15% | 13,784 | 8,249 | 67% |
| Adjusted unallocated corporate expenses and software development (1) | (5,264) | (5,336) | (1)% | (15,916) | (17,281) | (8)% |
| Adjusted EBITDA(2) | $4,180 | $787 | 431% | $1,592 | $(11,385) | NM(4) |
| Segment Adjusted EBITDA Margin(3) |  |  |  |  |  |  |
| Passenger | 14.4% | 7.3% |  | 4.4% | (2.8)% |  |
| Medical | 10.7% | 10.0% |  | 12.5% | 8.7% |  |
| Adjusted EBITDA Margin | 5.6% | 1.1% |  | 0.8% | (6.4)% |  |
| (1) Includes costs that are not directly attributable to reportable segments such as finance, accounting, tax, information technology, human resources, legal costs and software development costs (primarily consists of staff and contractors costs), and excludes non-cash items and certain transactions that management does not believe are reflective of our ongoing core operations. (2) See section titled “Reconciliations of Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measure. (3) Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of revenue. Segment Adjusted EBITDA is defined as segment Adjusted EBITDA as a percentage of segment revenue. (4) Percentage not meaningful. |  |  |  |  |  |  |

#### Passenger segment

For the three months ended September 30, 2024 and 2023, Passenger revenue increased by $0.8 million or 2%, from $38.0 million in 2023 to $38.8 million in 2024. The increase was attributable to a $2.0 million increase in Short Distance offset by a $1.1 million decrease in Jet and Other. Refer to the disaggregated revenue discussion above under “—Comparison of the Three Months Ended September 30, 2024 and 2023—Revenue” for more details.

Passenger Adjusted EBITDA improved by $2.8 million or 101% for the three months ended September 30, 2024 from $2.8 million in the same period of 2023 to $5.6 million in 2024. The improvement is primarily attributable: to a $2.2 million impact from lower effective cost of revenue per flight in our New York airport transfer and Hamptons products (attributable to improved pricing and load factor in the by-the-seat products) and in Europe; and a $0.7 million improvement in Canada, which moved from a negative to a positive revenue less cost of revenue in the current year period compared to the prior year period (attributable to improved load factor and our exit from the Canadian market on August 31, 2024).

For the nine months ended September 30, 2024 and 2023, Passenger revenue increased by $0.8 million or 1% from $83.1 million in 2023 to $83.9 million in 2024. The increase was attributable to a $3.1 million increase in Short Distance that was partially offset by a $2.3 million decrease in Jet and Other. Refer to the disaggregated revenue discussion above under “—Comparison of the Nine Months Ended September 30, 2024 and 2023—Revenue” for more details.

Passenger Adjusted EBITDA improved by $6.1 million for the nine months ended September 30, 2024 from $(2.4) million in the same period of 2023 to $3.7 million in 2024. The improvement is primarily attributable to higher revenue combined with lower effective cost of revenue per flight across all of Passenger flights (short distance and jet flights) compared to the prior year period for a $4.9 million impact, attributable to improved pricing and improved load factor. Further improvements are attributable to a

$1.1 million decrease in marketing expenses and a $0.4 million decrease in personnel costs. These improvements were partially offset by a $0.4 million increase in staff costs.

#### Medical segment

For the three months ended September 30, 2024 and 2023, Medical revenue increased by $2.6 million or 8%, from $33.4 million in 2023 to $36.1 million in 2024. Refer to the disaggregated revenue discussion above under “—Comparison of the Three Months Ended September 30, 2024 and 2023—Revenue” for more details.

Medical Adjusted EBITDA increased by $0.5 million or 15%, for the three months ended September 30, 2024 from $3.3 million in the same period of 2023 to $3.9 million in 2024. Due to: $1.3 million increase in revenue less cost of revenue (excluding depreciation) due to higher volumes combined with lower effective cost of revenue per flight (due to higher revenue per flight hour and mix-shift towards dedicated aircraft operating at enhanced economies of scale). This increase was partially offset by a $0.8 million increase in fixed costs, primarily due to an increase in staff costs in order to support the higher activity and the new TOPS offering.

For the nine months ended September 30, 2024 and 2023, Medical revenue increased by $15.8 million or 17%, from $94.6 million in 2023 to $110.4 million in 2024. Refer to the disaggregated revenue discussion above under “—Comparison of the Nine Months Ended September 30, 2024 and 2023—Revenue” for more details.

Medical Adjusted EBITDA increased by $5.5 million or 67%, for the nine months ended September 30, 2024 from $8.2 million in the same period of 2023 to $13.8 million in 2024. $8.3 million of the increase is attributable to higher revenue less cost of revenue (excluding depreciation) due to: larger volumes combined with lower effective cost of revenue, attributable to: higher revenue per flight hour, mix-shift to dedicated aircraft and mix shift to ground revenue (which is characterized with lower effective cost of revenue). This was partially offset by a $2.8 million increase in fixed costs, primarily staff costs in order to support the higher activity, adding ground hubs and the new TOPS offering that did not exist in the prior year period.

#### Adjusted EBITDA, Flight Profit and Flight Margin

The following table presents our consolidated Adjusted EBITDA, Flight Profit and Flight Margin results:

*(in thousands, except percentages)*

|  | Three Months Ended September 30, 2024 | 2023 | % Change | Nine Months Ended September 30, 2024 | 2023 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Adjusted EBITDA(1) | $4,180 | $787 | 431% | $1,592 | $(11,385) | NM(2) |
| Flight Profit(1) | $19,837 | $15,579 | 27% | $46,330 | $33,112 | 40% |
| Flight Margin(1) | 26.5% | 21.8% |  | 23.8% | 18.6% |  |

(1) See section titled “Reconciliations of Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measure.

(2) Percentage not meaningful.

### Comparison of the Three Months Ended September 30, 2024 and 2023

*Adjusted EBITDA* improved by $3.4 million for the three months ended September 30, 2024 from $0.8 million in the same period of 2023 to $4.2 million in 2024. The improvement is primarily attributable to improvements in both Passenger and Medical Adjusted EBITDA (refer to the discussion above), coupled with a $0.1 million decrease in Adjusted unallocated corporate expenses and software development staff costs.

*Flight Profit* increased by $4.3 million or 27% for the three months ended September 30, 2024 from $15.6 million in the same period of 2023 to $19.8 million in 2024. The increase was driven by a 5% increase in revenue coupled with lower effective cost of revenue per flight for both Passenger and Medical flights. In Passenger the lower effective cost of revenue per flight is attributable to improved pricing along with improved load factor in our US Short Distance flights, and a $0.7 million improvement in Canada (which operated at a negative Flight Profit in the prior year period). The lower effective cost of revenue per flight in Medical flights is attributable to higher revenue per flight hour and mix-shift to dedicated aircraft operating at enhanced economies of scale.

*Flight Margin* increased from 21.8% in the three months ended September 30, 2024 to 26.5% in the same period of 2023, attributable to lower effective cost of revenue per flight in both Passenger and Medical flights as described above under Flight Profit.

### Comparison of the Nine Months Ended September 30, 2024 and 2023

*Adjusted EBITDA* improved by $13.0 million for the nine months ended September 30, 2024 from $(11.4) million in the same period of 2023 to $1.6 million in 2024. The improvement is primarily attributable to Adjusted EBITDA improvements of $6.1 million and $5.5 million in Passenger and Medical, respectively (refer to the discussion above), coupled with a $1.4 million decrease in Adjusted unallocated corporate costs and software development, attributable to a $1.0 million decrease in staff costs and a $0.5 million decrease in professional services and insurance.

*Flight Profit* increased by $13.2 million or 40% for the nine months ended September 30, 2024 from $33.1 million in the same period of 2023 to $46.3 million in 2024. The increase was driven by a 9% increase in revenue coupled with lower effective cost of revenue per flight across all of Passenger product lines (Short Distance and jet flights) compared to the prior year period attributable to improved pricing and improved load factor (in the by-the-seat products). In addition lower effective cost of revenue in Medical due to higher revenue per flight hour, mix-shift to dedicated aircraft and mix shift to ground revenue (which is characterized with lower effective cost of revenue).

*Flight Margin* increased from 18.6% in the nine months ended September 30, 2023 to 23.8% in the same period of 2024, attributable to lower effective cost of revenue per flight in both Passenger and Medical flights as described above under Flight Profit.

### Reconciliation of Non-GAAP Financial Measures

Certain non-GAAP measures included in this segment results of operations review have been derived from amounts calculated in accordance with GAAP but are not themselves GAAP measures. Blade believes that the non-GAAP measure discussed below, viewed in addition to and not in lieu of our reported U.S. GAAP results, provide useful information to investors by providing a more focused measure of operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. The non-GAAP measures presented herein may not be comparable to similarly titled measures presented by other companies. These include Adjusted EBITDA, Flight Profit and Flight Margin, which we define, explain the use of and reconcile to the nearest GAAP financial measure below.

#### Adjusted EBITDA

Adjusted EBITDA is defined as net loss adjusted to exclude (1) depreciation and amortization, (2) stock-based compensation, (3) change in fair value of warrant liabilities, (4) interest income and expense, (5) income tax, (6) realized gains and losses on short-term investments, (7) impairment of intangible assets and (8) certain other non-recurring items (shown below) that management does not believe are indicative of ongoing Company operating performance and would impact the comparability of results between periods.

*(in thousands)*

|  | Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| **Net (loss) income** | **$(1,954)** | **$289** | **$(17,514)** | **$(22,135)** |
| Add (deduct): |  |  |  |  |
| Depreciation and amortization | 1,279 | 1,843 | 4,432 | 5,305 |
| Stock-based compensation | 5,345 | 3,330 | 15,434 | 9,348 |
| Change in fair value of warrant liabilities | 299 | (5,719) | (2,266) | (3,823) |
| Realized loss from sales of short-term investments | — | — | — | 95 |
| Interest income | (1,764) | (2,147) | (5,624) | (6,178) |
| Income tax (benefit) expense | (118) | 129 | (150) | (443) |
| Legal and regulatory advocacy fees (1)(2) | 165 | 217 | 427 | 640 |
| Executive severance costs | 140 | — | 140 | 265 |
| SOX readiness costs | 220 | 145 | 302 | 180 |
| Contingent consideration compensation (earn-out) (3) | — | 2,700 | — | 5,361 |
| M&A transaction costs | 85 | — | 169 | — |
| Impairment of intangible assets | — | — | 5,759 | — |
| Restructuring costs - Blade Europe (4) | 483 | — | 483 | — |
| **Adjusted EBITDA** | **$4,180** | **$787** | **$1,592** | **$(11,385)** |
| Revenue | $74,877 | $71,442 | $194,336 | $177,702 |
| Adjusted EBITDA as a percentage of revenue | 6% | 1% | 1% | (6)% |

(1) For the three and nine months ended September 30, 2024, represents legal advocacy fees related to the *Drulias* lawsuit (see “— Legal and Environmental” within Note 11) that we do not consider representative of legal and regulatory advocacy costs that we will incur from time to time in the ordinary course of our business.

(2) For the three and nine months ended September 30, 2023, represents certain legal and regulatory advocacy fees for certain proposed restrictions at East Hampton Airport and the potential operational restrictions on large jet aircraft at Westchester Airport, that we do not consider representative of legal and regulatory advocacy costs that we will incur from time to time in the ordinary course of our business. It is worth noting that we do not anticipate incurring any further legal fees related to the Westchester litigation.

(3) Trinity’s contingent consideration, 2023 was the last year subject to an earn-out payment.

(4) Includes severance, retention, legal and other one-time restructuring costs associated with a reorganization of Blade Europe.

#### Flight Profit and Flight Margin

Flight Profit is calculated as revenue less cost of revenue. Flight Margin is calculated as Flight Profit divided by revenue. Flight Profit and Flight Margin are measures that management uses to assess the performance of the business. Blade believes that Flight Profit and Flight Margin provide a useful measure of the profitability of the Company's flight and ground operations, as they focus solely on the non discretionary direct costs associated with generating revenue such as third party variable costs and costs of owning and operating Blade’s owned aircraft.

#### Gross Profit and Gross Margin

Gross Profit, which is the most directly comparable GAAP financial measure to Flight Profit, is calculated as revenue less cost of revenue and other costs directly related to revenue generating transactions, including credit card processing fees, depreciation and amortization, direct staff costs including stock-based compensation, commercial costs and establishment costs. Gross Margin is calculated as Gross Profit divided by revenue. The reconciliation of Gross Profit to Flight Profit can be found in the table below.

*(in thousands, except percentages)*

|  | Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $74,877 | $71,442 | $194,336 | $177,702 |
| Less: |  |  |  |  |
| Cost of revenue (1) | 55,040 | 55,863 | 148,006 | 144,590 |
| Depreciation and amortization (2) | 558 | 1,627 | 2,769 | 4,742 |
| Stock-based compensation | 36 | 44 | 149 | 124 |
| Other (3) | 4,805 | 3,865 | 11,786 | 9,893 |
| Gross Profit | $14,438 | $10,043 | $31,626 | $18,353 |
| Gross Margin | 19.3% | 14.1% | 16.3% | 10.3% |
| Gross Profit | $14,438 | $10,043 | $31,626 | $18,353 |
| Reconciling items: |  |  |  |  |
| Depreciation and amortization (2) | 558 | 1,627 | 2,769 | 4,742 |
| Stock-based compensation | 36 | 44 | 149 | 124 |
| Other (3) | 4,805 | 3,865 | 11,786 | 9,893 |
| Flight Profit | $19,837 | $15,579 | $46,330 | $33,112 |
| Flight Margin | 26.5% | 21.8% | 23.8% | 18.6% |

(1) Cost of revenue consists of flight costs paid to operators of aircraft and vehicles, landing fees, depreciation of aircraft and vehicles, ROU asset amortization, internal costs incurred in generating organ ground transportation revenue using the Company's owned vehicles and costs of operating our owned aircraft including fuel, management fees paid to the operator, maintenance costs and pilot salaries.

(2) Depreciation and amortization included within general and administrative expenses.

(3) Other costs include credit card processing fees, direct staff costs, commercial costs and establishment costs.

### Liquidity and Capital Resources

### Sources of Liquidity

As of September 30, 2024 and December 31, 2023, we had total liquidity of $136.3 million and $166.1 million, respectively, consisting of cash and cash equivalents of $20.0 million and $27.9 million, respectively, and short-term investments of $116.3 million and $138.3 million, respectively. In addition, as of September 30, 2024 and December 31, 2023, we had restricted cash of $1.4 million and $1.1 million, respectively. As of September 30, 2024, $116.3 million of short-term investments consisted of securities that are traded in highly liquid markets.

With $136.3 million of total liquid funds as of September 30, 2024, we anticipate that we have sufficient funds to meet our current operational needs for at least the next 12 months from the date of filing this Quarterly Report.

### Liquidity Requirements

As of September 30, 2024, the Company had net working capital of $144.6 million, zero debt, cash and cash equivalents of $20.0 million and short-term investments of $116.3 million. The Company had net losses of $17.5 million and $22.1 million for the nine months ended September 30, 2024 and 2023, respectively.

In the course of our business, we have certain contractual relationships with third-party aircraft operators pursuant to which we may be contingently required to make payments in the future. As of September 30, 2024, we had commitments to purchase flights from various aircraft operators with aggregate minimum flight purchase guarantees of $2.4 million and $15.4 million for the years ending December 31, 2024 and 2025, respectively, $0.2 million and $8.7 million, respectively, of which may be cancelled by us immediately if a government authority enacts travel restrictions and $— million and $2.8 million, respectively, of which could be terminated by Blade for convenience upon 60 days’ notice with the annual minimum guarantee being pro-rated as of the termination date. See “—Capacity Purchase Agreements” (“CPAs”) within Note 11 to the unaudited interim condensed consolidated financial statements for additional information and for information about future periods. Additionally, the Company has operating lease obligations related to real estate and vehicles with expected annual minimum lease payments of $0.4 million and $2.0 million for the years ending December 31, 2024 and 2025, respectively. See Note 5 “Right-of-Use Asset and Operating Lease Liability” to the unaudited interim condensed consolidated financial statements for additional information and for information about future periods.

We have non-cancellable commitments which primarily relate to cloud services and other items in the ordinary course of business. The amounts are determined based on the non-cancellable quantities to which we are contractually obligated. In December 2023, the Company entered into a technology service agreement with a vendor for cloud computing services where we are committed to spend $0.1 million and $1.1 million for the years ending December 31, 2024 and 2025, respectively.

On March 20, 2024, we announced that our Board of Directors had authorized a stock repurchase program, pursuant to which the Company may repurchase, from time to time, up to an aggregate of $20.0 million of the Company's common stock, exclusive of any fees, commissions or other expenses related to such repurchases. During the nine months ended September 30, 2024, the Company repurchased $0.2 million of common stock pursuant to this program ending with a remaining potential repurchase capacity under the program of approximately $19.8 million. No shares were repurchased in the quarter ended September 30, 2024. The timing and actual number of shares repurchased will depend on a variety of factors, including corporate and regulatory requirements, price and other market conditions and management’s determination as to the appropriate use of our cash. Our stock repurchases have been funded with cash on hand and we intend to continue funding future repurchases with existing cash.

We expect to incur net losses in the short term, as we continue to execute our strategic initiatives. Based on our current liquidity, we believe that no additional capital will be needed to execute our current business plan over the next 12 months. Our longer term liquidity requirement will depend on many factors including the pace of our expansion into new markets, our ability to attract and retain customers for our existing products, capital expenditures and acquisitions.

### Cash Flows

The following table summarizes our cash flows for the periods indicated:

*(in thousands)*

| 2024 | Nine Months Ended September 30, 2023 |  |
| --- | ---: | ---: |
| Net cash used in operating activities | $(767) | $(23,029) |
| Net cash (used in) / provided by investing activities | (4,992) | 17,014 |
| Net cash used in financing activities | (1,885) | (53) |
| Effect of foreign exchange rate changes on cash balances | 29 | (81) |
| Net decrease in cash and cash equivalents and restricted cash | (7,615) | (6,149) |

#### Cash Used In Operating Activities

For the nine months ended September 30, 2024, net cash used in operating activities was $0.8 million, driven by a net loss of $17.5 million and $3.2 million of cash used for working capital requirements, adjusted for non-cash items consisting of stock-based compensation expense of $15.4 million, impairment of intangible assets of $5.8 million, depreciation and amortization of $4.4 million, non-cash accretion of interest income on held-to-maturity securities of $3.1 million and income from change in fair value of warrant liabilities of $2.3 million. The $3.2 million of cash used for working capital requirements was primarily driven by a decrease in accounts payable and accrued expenses of $8.3 million, driven by the cash payment for the Trinity contingent consideration compensation and for the 2023 short term incentive plan paid in March of 2024, an increase in accounts receivable of $3.6 million (attributable to the revenue growth in the Medical segment) and a decrease in deferred revenue of $0.2 million (driven by Passenger client prepayments and gift cards); partially offset by a decrease in prepaid expenses and other current assets of $8.3 million (driven by the utilization of $9.3 million of prepaid deposits under CPAs with M&N as part of the purchase of the seven aircraft, slightly offset by new prepayments made to operators in connection with new CPAs) and a decrease in other non-current assets of $0.5 million (a lease deposit refund).

For the nine months ended September 30, 2023, net cash used in operating activities was $23.0 million, primarily driven by a net loss of $22.1 million and $6.8 million cash used for working capital requirements, adjusted for non-cash items consisting of stock-based compensation expense of $9.3 million, depreciation and amortization of $5.3 million, non-cash accretion of interest income on held-to-maturity securities of $4.7 million, income from change in fair value of warrant liabilities of $3.8 million, realized loss of $0.1 million from the sale of short-term investments, and a deferred tax benefit of $0.4 million. The $6.8 million cash used for working capital requirements was primarily driven by an increase in accounts receivable of $10.4 million, due to the rapid growth in the Medical segment, and an increase in prepaid expenses and other current assets of $1.1 million, driven by prepayments to operators in connection with capacity purchase agreements; partially offset by an increase in accounts payable and accrued expenses of $4.1 million, and an increase in lease liabilities of $0.4 million.

#### Cash (Used In) / Provided by Investing Activities

For the nine months ended September 30, 2024, net cash used in investing activities was $5.0 million, driven by $168.0 million of proceeds from maturities of held-to-maturity investments offset by $142.8 million in purchases of held-to-maturity investments; $26.3 million in purchases of property and equipment, consisting primarily of $22.8 million in the acquisition of ten aircraft and related capitalized costs to support the Medical segment, with the remaining in furniture and fixtures for new office space in Arizona used by the Medical segment, and purchase of vehicles used in generating revenue by the Medical segment; $2.2 million in consideration paid for the acquisition of CJK and $1.7 million in capitalized software development costs.

For the nine months ended September 30, 2023, net cash provided by investing activities was $17.0 million, driven by $20.5 million of proceeds from sales of other short-term investments; $264.5 million of proceeds from maturities of held-to-maturity investments, partially offset by $265.8 million in purchases of held-to-maturity investments; $0.1 million in purchases of other short-term investments; and $2.1 million in purchases of property and equipment, consisting of leasehold improvements and furniture and fixtures for lounges used by the Passenger segment, and vehicles used in generating revenue by the Medical segment.

#### Cash Used In Financing Activities

For the nine months ended September 30, 2024, net cash used in financing activities was $1.9 million, reflecting $1.8 million cash paid for payroll tax payments on behalf of employees in exchange for shares withheld by the Company (“net share settlement”) and $0.2 million in repurchases and retirement of common stock under the share repurchase program announced March 20, 2024; partially offset by $0.1 million of proceeds from the exercise of stock options.

For the nine months ended September 30, 2023, net cash used in financing activities was $0.05 million, primarily reflecting $0.1 million cash paid for payroll tax payments made on behalf of employees in exchange for shares withheld by the Company (“net share settlement”), partially offset by $0.06 million of proceeds from the exercise of stock options.

### Critical Accounting Policies and Significant Judgments and Estimates

This discussion and analysis of the Company’s financial condition and results of operations is based on the Company’s consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. In accordance with U.S. GAAP, the Company bases its estimates on historical experience and on various other assumptions the Company believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

For information on the Company’s significant accounting policies and estimates refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes to these policies and estimates as of September 30, 2024.

## Market risk

As filed, 225 characters.

There have been no material changes in market risk from the information provided in "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended December 31, 2023.

## Controls and procedures

As filed, 5,519 characters.

As of the end of the period covered by this report, our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on their evaluation of our disclosure controls and procedures, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of September 30, 2024, to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is (a) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (b) accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow for timely decisions regarding required disclosure.

We determined that our internal control over financial reporting had the following material weaknesses:

- A lack of effective IT General Controls in relation to:
- user access controls that adequately restrict user access to financial applications, programs and data affecting underlying accounting records, and
- the change management controls for certain operational applications that ensure IT program and data changes are identified, tested, authorized and implemented properly.
- A number of control deficiencies in relation to the revenue process that, although not individually material in nature, in aggregate constitute a material weakness.

Management has concluded that these deficiencies may impact the Company’s financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis and represent a material weakness in the Company’s internal control over financial reporting.

Because disclosure controls and procedures include those components of internal control over financial reporting that provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, management also determined that its disclosure controls and procedures were not effective as a result of the above-mentioned material weaknesses in its internal control over financial reporting.

Notwithstanding these material weaknesses, management has concluded that the unaudited interim condensed consolidated financial statements included in this quarterly report on Form 10-Q present fairly, in all material respects, our financial position, results of operations, and cash flows in conformity with GAAP.

### Management’s Plans for Remediation

We have identified and implemented, and continue to implement, certain remediation efforts to improve the effectiveness of our internal control over financial reporting. These remediation efforts are ongoing and include the following measures to address the material weaknesses identified:

- We have completed controls testing to enable management to assess the operating effectiveness of the change management controls for the Company’s main operational IT application and we are in the process of implementing those same change management controls for our other operational IT applications.
- We are re-enforcing procedures on proper user access administration and the need for timely documentation of associated requests and approvals.
- We have designed additional controls to supplement the existing business process controls in relation to revenues, with these controls implemented in Q3 2024.

We expect the above actions will be completed before the end of the fiscal year ending December 31, 2024. The material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. As we continue to evaluate and improve the applicable controls, management may take additional remedial measures or modify the remediation plan described above.

### Changes in Internal Control over Financial Reporting

Other than the specific remediation steps discussed above, there were no other changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Securities Exchange Act of 1934, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting in the fiscal quarter ending September 30, 2024.

### Limitations on Internal Control over Financial Reporting

An internal control system over financial reporting has inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

## Risk factors

As filed, 722 characters.

You should carefully consider the risks described under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023. These risks could materially affect our business, results of operations or financial condition, cause the trading price of our common stock to decline materially or cause our actual results to differ materially from those expected or those expressed in any forward-looking statements made by, or on behalf of, the Company. These risks are not exclusive, and additional risks to which we are subject include, but are not limited to, the factors mentioned under “Forward-Looking Statements” and the risks of our businesses described elsewhere in this Quarterly Report on Form 10-Q.

Filed Nov 12, 2024.
Source: SEC EDGAR, the filing index for accession 0001779128-24-000126. Last ingested by Listed: Nov 3, 2026, 14:11 ET. No prices; not investment advice.