10-Q 1 blde-20240331.htm 10-Q blde-20240331
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499E
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2024
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from     to
Commission File Number 001-39046
BLADE AIR MOBILITY, INC.
(Exact name of registrant as specified in its charter)
Delaware84-1890381
(State or other jurisdiction
of incorporation or organization)
(I.R.S.Employer
Identification No.)
55 Hudson Yards, 14th Floor
New York, NY
10001
(Address of principal executive offices)(Zip Code)
(212) 967-1009
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)
Name of each exchange on
which registered
Common Stock, $0.0001 par value per shareBLDEThe Nasdaq Stock Market
Warrants, each exercisable for one share of Common Stock at an exercise price of $11.50 per shareBLDEWThe Nasdaq Stock Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S–T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non–accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “ smaller reporting company,” and “emerging growth company” in Rule 12b–2 of the Exchange Act.
Large accelerated filero
Accelerated filer
x
Non-accelerated filero
Smaller reporting company
x
Emerging growth company
x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act). Yes o No x
As of May 1, 2024, there were 77,346,018 shares of the registrant’s Common Stock, $0.0001 par value per share, issued and outstanding.


BLADE AIR MOBILITY, INC.

FORM 10-Q

TABLE OF CONTENTS
Page
2

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

BLADE AIR MOBILITY, INC.
Unaudited Interim Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
March 31, 2024December 31, 2023
Assets
Current assets
Cash and cash equivalents$36,758 $27,873 
Restricted cash1,302 1,148 
Accounts receivable, net of allowance of $127 and $98 at March 31, 2024 and December 31, 2023, respectively
23,550 21,005 
Short-term investments114,215 138,264 
Prepaid expenses and other current assets18,183 17,971 
Total current assets194,008 206,261 
Non-current assets:
Property and equipment, net3,468 2,899 
Intangible assets, net19,524 20,519 
Goodwill39,777 40,373 
Operating right-of-use asset24,576 23,484 
Other non-current assets1,439 1,402 
Total assets$282,792 $294,938 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses$10,836 $23,859 
Deferred revenue7,981 6,845 
Operating lease liability, current4,428 4,787 
Total current liabilities23,245 35,491 
Non-current liabilities:
Warrant liability1,480 4,958 
Operating lease liability, long-term21,101 19,738 
Deferred tax liability357 451 
Total liabilities46,183 60,638 
Commitments and Contingencies (Note 9)
Stockholders' Equity
Preferred stock, $0.0001 par value, 2,000,000 shares authorized; no shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively
  
Common stock, $0.0001 par value; 400,000,000 authorized; 77,146,050 and 75,131,425 shares issued at March 31, 2024 and December 31, 2023, respectively
7 7 
Additional paid in capital397,477 390,083 
Accumulated other comprehensive income3,113 3,964 
Accumulated deficit(163,988)(159,754)
Total stockholders' equity236,609 234,300 
Total Liabilities and Stockholders' Equity$282,792 $294,938 
See Notes to Unaudited Interim Condensed Consolidated Financial Statements.

3

BLADE AIR MOBILITY, INC.
Unaudited Interim Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
Three Months Ended March 31,
20242023
Revenue$51,514 $45,271 
Operating expenses
Cost of revenue 41,375 38,107 
Software development670 1,123 
General and administrative17,209 16,257 
Selling and marketing2,128 2,611 
Total operating expenses61,382 58,098 
Loss from operations(9,868)(12,827)
Other non-operating income
Interest income2,072 1,954 
Change in fair value of warrant liabilities3,478 566 
Realized loss from sales of short-term investments (81)
Total other non-operating income5,550 2,439 
Loss before income taxes(4,318)(10,388)
Income tax benefit
(84)(196)
Net loss
$(4,234)$(10,192)
Net loss per share (Note 7):
Basic$(0.06)$(0.14)
Diluted$(0.06)$(0.14)
Weighted-average number of shares outstanding:
Basic75,796,411 71,992,771 
Diluted75,796,411 71,992,771 

See Notes to Unaudited Interim Condensed Consolidated Financial Statements.

4

BLADE AIR MOBILITY, INC.
Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss
(in thousands)
Three Months Ended March 31,
20242023
Net loss$(4,234)$(10,192)
Other comprehensive income:
     Net unrealized investment income 29 
Less: Reclassification adjustment for losses included currently in net income 51 
     Foreign currency translation adjustments for the period(851)845 
Other comprehensive income
(851)925 
Comprehensive loss
$(5,085)$(9,267)
See Notes to Unaudited Interim Condensed Consolidated Financial Statements.

5

BLADE AIR MOBILITY, INC.
Unaudited Interim Condensed Consolidated Statements of Stockholders' Equity
(in thousands, except share data)

Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive IncomeAccumulated
Deficit
Total
Stockholders'
Equity
Shares Amount
Balance as of January 1,202475,131,425 $7 $390,083 $3,964 $(159,754)$234,300 
Issuance of common stock upon exercise of stock options508,181 — 91 — — 91 
Issuance of common stock upon settlement of restricted stock units509,565 — — — — — 
Stock-based compensation— — 4,318 — — 4,318 
Shares withheld related to net share settlement(12,119)— (37)— — (37)
Issuance of common stock for settlement of contingent consideration compensation (earn-out) 1,008,998 — 3,022 — — 3,022 
Other comprehensive loss— — — (851)— (851)
Net loss— — — — (4,234)(4,234)
Balance as of March 31, 202477,146,050 $7 $397,477 $3,113 $(163,988)$236,609 
Balance as of January 1,202371,660,617 $7 $375,873 $2,287 $(103,678)$274,489 
Issuance of common stock upon exercise of stock options300,785 — 54 — — 54 
Issuance of common stock upon settlement of restricted stock units159,875 — — — — — 
Stock-based compensation— — 3,221 — — 3,221 
Shares withheld related to net share settlement(7,211)— (81)— — (81)
Issuance of common stock for settlement of contingent consideration (earn-out)384,756 — 1,785 — — 1,785 
Other comprehensive income— — — 925 — 925 
Net loss— — — — (10,192)(10,192)
Balance as of March 31, 202372,498,822 $7 $380,852 $3,212 $(113,870)$270,201 
See Notes to Unaudited Interim Condensed Consolidated Financial Statements

6

BLADE AIR MOBILITY, INC.
Unaudited Interim Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended March 31,
20242023
Cash Flows From Operating Activities:
Net loss$(4,234)$(10,192)
Adjustments to reconcile net loss to net cash and restricted cash used in operating activities:
Depreciation and amortization1,594 1,652 
Stock-based compensation4,318 3,221 
Change in fair value of warrant liabilities(3,478)(566)
Gain on lease modification(47) 
Realized loss from sales of short-term investments 81 
Realized foreign exchange loss3 5 
Accretion of interest income on held-to-maturity securities(1,481)(1,386)
Deferred tax benefit(84)(196)
Bad debt expense31  
Changes in operating assets and liabilities:
Prepaid expenses and other current assets(416)(1,621)
Accounts receivable(2,609)(5,585)
Other non-current assets(44)(42)
Operating right-of-use assets/lease liabilities(27)77 
Accounts payable and accrued expenses(10,237)(3,383)
Deferred revenue1,160 1,080 
Net cash used in operating activities(15,551)(16,855)
Cash Flows From Investing Activities:
Capitalized software development costs(311) 
Purchase of property and equipment(816)(646)
Purchase of short-term investments (121)
Proceeds from sales of short-term investments 16,000 
Purchase of held-to-maturity investments(77,051)(130,145)
Proceeds from maturities of held-to-maturity investments102,740 131,187 
Net cash provided by investing activities24,562 16,275 
Cash Flows From Financing Activities:
Proceeds from the exercise of common stock options91 54 
Taxes paid related to net share settlement of equity awards(37)(81)
Net cash provided by / (used in) financing activities54 (27)
Effect of foreign exchange rate changes on cash balances(26)3 
Net increase (decrease) in cash and cash equivalents and restricted cash
9,039 (604)
Cash and cash equivalents and restricted cash - beginning
29,021 44,423 
Cash and cash equivalents and restricted cash - ending
$38,060 $43,819 
Reconciliation to the unaudited interim condensed consolidated balance sheets
Cash and cash equivalents
$36,758 $41,739 
Restricted cash
1,302 2,080 
Total cash, cash equivalents and restricted cash$38,060 $43,819 
Non-cash investing and financing activities:
New leases under ASC 842 entered into during the period2,581 7,166 
Common stock issued for settlement of earn-out (1)3,022 1,785 
Purchases of PPE in accounts payable and accrued expenses 285  
(1) Prior year amounts have been updated to conform to current period presentation.
See Notes to Unaudited Interim Condensed Consolidated Financial Statements

7

BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share, per share data and exchange rates)






Note 1 – Description of Business and Summary of Significant Accounting Policies
Description of Business
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, Southern Europe and Western Canada. 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.
Basis of Presentation and Principles of Consolidation
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Management’s opinion is that all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented have been included. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024. These financial statements should be read in conjunction with the Company’s consolidated financial statements and accompanying Notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Short-Term Investments
Held-to-Maturity Securities
The Company's investments in held-to-maturity securities consist of investment grade U.S. Treasury obligations with maturity dates of less than 365 days. The Company has the ability and intention to hold these securities until maturity. Accordingly, these securities are recorded in the Company's unaudited interim condensed consolidated balance sheet at amortized cost and interest is recorded within interest income on the Company's unaudited interim condensed consolidated statement of operations. The held-to-maturity securities balance and market value at March 31, 2024 and December 31, 2023 were $114,215 and $114,137, and $138,264 and $138,285, respectively. The fair value hierarchy of the valuation inputs the Company utilized to determine such market value is Level 2. See Note 11 – Fair Value Measurements for additional information.
Software Development Costs

The Company incurs costs related to the development of its technology stack. The costs consist of personnel costs (including related benefits and stock-based compensation) and external vendor costs incurred during the development stage. Capitalization of costs begins when two criteria are met: (1) the preliminary project stage is completed, and (2) it is probable that the software will be completed and used for its intended function. Capitalization ceases when the project is substantially complete and the developed features are ready for their intended use, including the completion of all significant testing. Costs related to preliminary project activities, post implementation operating activities and system maintenance are expensed as incurred.

Capitalized costs are included in intangible assets and amortized over three years, on a straight-line basis, which represents the manner in which the expected benefit will be derived. The amortization of capitalized software development costs are recorded within software development expense in our unaudited interim condensed consolidated statement of operations.

Concentrations

Financial instruments which potentially subject the Company to concentrations of credit risk consists principally of cash
amounts on deposit with financial institutions. At times, the Company’s cash in banks is in excess of the Federal Deposit
Insurance corporation (“FDIC”) insurance limit. The Company has not experienced any loss as a result of these deposits.

Major Vendors

8

BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share, per share data and exchange rates)






One vendor accounted for 14% of the Company’s purchases from operating vendors for the three months ended March 31, 2024. One vendor accounted for 12% of the Company’s purchases from operating vendors for the three months ended March 31, 2023.

One vendor accounted for 18% of the Company’s outstanding accounts payable as of March 31, 2024. Two vendors accounted for 17% and 10%, respectively, of the Company’s outstanding accounts payable as of December 31, 2023.

Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include, but are not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected to use such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company that is not an emerging growth company or is an emerging growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company bases its estimates on historical experience, current business factors, and various other assumptions that the Company believes are necessary to consider to form a basis for making judgments about the carrying values of assets and liabilities, the recorded amounts of revenue and expenses, and the disclosure of contingent assets and liabilities. The Company is subject to uncertainties such as the impact of future events, economic and political factors, and changes in the Company’s business environment; therefore, actual results could differ from these estimates. Accordingly, the accounting estimates used in the preparation of the Company’s financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment evolves.
Changes in estimates are made when circumstances warrant. Such changes in estimates and refinements in estimation methodologies are reflected in reported results of operations; if material, the effects of changes in estimates are disclosed in the notes to the financial statements. Significant estimates and assumptions by management include, but are not limited to, the fair value of intangible assets and goodwill, the determination of whether a contract contains a lease, the allocation of consideration between lease and nonlease components, the determination of incremental borrowing rates for leases and the provision for income taxes and related deferred tax accounts.
Recently Issued Accounting Pronouncements - Not Adopted

In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements. The new guidance clarifies or improves disclosure and presentation requirements on a variety of topics in the codification. The amendments in the update are intended to align the requirements in the FASB ASC with the SEC’s regulations. The amendments are effective prospectively on the date each individual amendment is effectively removed from Regulation S-X or Regulation S-K, or if

9

BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share, per share data and exchange rates)





the SEC has not removed the requirements by June 30, 2027, this amendment will be removed from the Codification and will not become effective for any entity. The Company is in the process of evaluating the impact the adoption of this ASU will have on the financial statements and related disclosures, which is not expected to be material.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands the segment disclosures of public entities. This expansion includes the requirement to disclose significant segment expenses that are regularly provided to the chief operating decision maker and are included within each reported measure of segment profit or loss. Additionally, the ASU mandates the disclosure of the amount and description of the composition of other segment items, as well as interim disclosures of a reportable segment's profit or loss and assets. These disclosure requirements apply to public entities with a single reportable segment as well. The ASU will be effective for the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and early adoption is allowed. The Company is in the process of evaluating the impact the adoption of this ASU will have on the financial statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is in the process of evaluating the impact the adoption of this ASU will have on the financial statements and related disclosures.

In March 2024, the FASB issued ASU 2024-02, Codification Improvements - Amendments to Remove References to the Concept Statements. This ASU amends the Codification to remove references to various concepts statements and impacts a variety of topics in the Codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance. Generally, the amendments in ASU 2024-02 are not intended to result in significant accounting changes for most entities. ASU 2024-02 is effective January 1, 2025. The Company is in the process of evaluating the impact the adoption of this ASU will have on the financial statements and related disclosures.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) and the SEC have not had, or are not anticipated to have, a significant effect on the Company's unaudited interim condensed consolidated financial statements, both present and future.
Note 2 – Revenue
Revenue Recognition
Blade operates in three key product lines across two segments (see Note 5 for further information on reportable segments):

Passenger segment

Short Distance – Consisting primarily of helicopter and amphibious seaplane flights in the United States, Canada 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. 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, with the exception of Europe where institutional clients pay after the performance of related services under payment terms. The revenue is recognized when the service is completed.
Jet and Other –  Consists principally of revenues from non-medical jet charter and by-the-seat jet flights between New York and South Florida, revenue from brand partners for exposure to Blade fliers and certain ground transportation services. 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.

10

BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share, per share data and exchange rates)





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. 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.

The Company initially records advance payments for passenger flights in deferred revenue, deferring revenue recognition until the travel occurs. Deferred revenue from advance payments, customer credit and gift card purchases is recognized as revenue when a flight is flown. Deferred revenue from the Company’s passes is recognized ratably over the term of the pass. For travel that has more than one flight segment, the Company deems each segment as a separate performance obligation and recognizes revenue for each segment as travel occurs. Fees charged in association with add-on services or changes or extensions to non-refundable seats sold are considered part of the Company's passenger performance obligation. As such, those fees are deferred at the time of collection and recognized at the time the travel is provided.
Disaggregated Revenue

Disaggregated revenue by product line and segment was as follows:

Three Months Ended March 31,
20242023
Passenger Segment
Short Distance
$9,810 $10,425 
Jet and Other5,678 8,079 
Total$15,488 $18,504 
Medical Segment
MediMobility Organ Transport$36,026 $26,767 
Total$36,026 $26,767 
Total Revenue
$51,514 $45,271 
Contract Liabilities
Contract liabilities are defined as entity’s obligation to transfer goods or services to a customer for which the entity has received consideration (or the amount is due) from the customer. As of March 31, 2024 and December 31, 2023, the Company's contract liability balance is $7,981 and $6,845 respectively, and is recorded as deferred revenue on its unaudited interim condensed consolidated balance sheets. This balance consists of payments from customers received in advance of the actual flight, prepaid monthly and annual flight passes, customer credits for flight reservations that were cancelled for good reason by the customer, and prepaid gift card obligations. The customer has one year to use the credit as payment for a future flight with the Company. Gift cards represent prepayment of flights. The table below presents a roll forward of the contract liability balance:

11

BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share, per share data and exchange rates)





Three Months Ended March 31,
20242023
Balance, beginning of period$6,845 $6,709 
Additions11,960 13,599 
Revenue recognized(10,824)(12,520)
Balance, end of period$7,981 $7,788 
For the three months ended March 31, 2024, the Company recognized $2,095 of revenue that was included in the contract liability balance as of January 1, 2024. For the three months ended March 31, 2023, the Company recognized $2,686 of revenue that was included in the contract liability balance as of January 1, 2023.

Certain governmental taxes are imposed on the Company's flight sales through a fee included in flight prices. The Company collects these fees and remits them to the appropriate government agency. These fees are excluded from revenue.
The Company’s quarterly financial data is subject to seasonal fluctuations. Historically, its second and third quarter (ended on June 30 and September 30, respectively) financial results have reflected higher Passenger travel demand and were better than the first and fourth quarter financial results.
Note 3 – Right-of-Use Asset and Operating Lease Liability
Blade’s operating leases consist of airport and heliport terminals, offices, vehicles and aircraft leases that are embedded within certain Capacity Purchase Agreements (“CPAs”). Upon meeting certain criteria as stated in ASC 842 Leases, the lease component of a CPA would be accounted for as an embedded lease, with a corresponding balance included in the operating right-of-use (“ROU”) asset and lease liability.
During the three months ended March 31, 2024, the Company added the following leases in accordance with ASC 842:

Effective in March 2022, Blade entered into an agreement for a three-year term ending March 31, 2025 for six aircraft. This CPA was restated and amended in March 2023 for seven aircraft and additional two years (for a total five-year term ending March 31, 2028). This CPA was restated and amended in December 2023 for up to eight aircraft for a five-year term ending March 31, 2028. This CPA was further restated and amended in January 2024 for eight aircraft for a four-year term ending November 30, 2027. The additional eighth aircraft commenced January 1, 2024. Blade has the right to terminate the agreement without cause upon 60 days’ written notice, upon such termination a one-year flight hour guarantee will be pro-rated to the date of the termination and the operator will be entitled to retain any unapplied deposit paid by Blade at the time of such termination, in addition, Blade has the right for immediate termination with no penalty if a government authority enacts travel restrictions.

The Company allocates the consideration in the capacity purchase agreements to the lease and non-lease components based on their relative standalone value. The non-lease components for these agreements primarily consist of the costs associated with flight operations. The Company determines its best estimate of the standalone value of the individual components by considering observable information from publicly available market rates.

See Note 9, “Commitments and Contingencies”, for additional information about our capacity purchase agreements.
Balance sheet information related to the Company’s leases is presented below:
March 31, 2024December 31, 2023
Operating leases:
Operating right-of-use asset$24,576 $23,484 
Operating lease liability, current4,428 4,787 
Operating lease liability, long-term21,101 19,738 

12

BLADE AIR MOBILITY, INC.
Notes to Consolidated Financial Statements
(amounts in thousands, except share and per share data)


As of March 31, 2024, included in the table above is $23,165, $3,857 and $20,287 of operating right-of-use asset, current operating lease liability, and long-term operating lease liability, respectively, under aircraft leases that are embedded within the capacity purchase agreements. As of December 31, 2023, included in the table above is $21,081, $3,215 and $18,871 of operating right-of-use asset, current operating lease liability, and long-term operating lease liability, respectively, under aircraft leases that are embedded within the capacity purchase agreements.

The following provides details of the Company’s lease expense:
Three Months Ended March 31,
20242023
Lease cost:
Short-term lease cost
$98 $94 
Operating lease cost
356 467 
Operating lease cost - Cost of revenue
1,456 990 
Total$1,910 $1,551 
Operating lease costs related to aircraft leases that are embedded within CPAs are recorded within Cost of revenue on the Company’s unaudited interim condensed consolidated statement of operations.

Other information related to leases is presented below:
March 31, 2024
Weighted-average discount rate – operating lease
8.90 %
Weighted-average remaining lease term – operating lease (in years)
6.3
As of March 31, 2024, the expected annual minimum lease payments of the Company’s operating lease liabilities were as follows:
For the Year Ended December 31
Remainder of 2024$4,832 
20256,166 
20265,846 
20274,842 
20282,387 
Thereafter8,779 
Total future minimum lease payments, undiscounted
32,852 
Less: Imputed interest for leases in excess of one year
(7,323)
Present value of future minimum lease payments
$25,529 
Leases Not Yet Commenced
As of March 31, 2024, the Company had additional operating real estate leases that had not yet commenced of $5,311. These operating leases will commence over the next 12 months.
Construction of the leased facilities will be managed and contracted by the Lessor.
Note 4 – Stock-Based Compensation
Equity Compensation Plans

The Company maintains the 2021 Omnibus Incentive Plan (the “2021 Plan”), which has been approved by our stockholders and provides for the issuance of shares of common stock to our employees, officers, directors, consultants and

13

BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share, per share data and exchange rates)





advisors, subject to its terms. The 2021 Plan is administered by the Compensation Committee of our Board of Directors. Awards granted under the 2021 Plan are subject to individual award agreements that, among other things, specify the conditions for vesting, termination and forfeiture. The requisite vesting periods for time-based awards made to date range from vesting on grant date to as late as four years from the date of grant. The expiration date of the 2021 Plan, on and after which date no awards may be granted under the 2021 Plan, is May 7, 2031 (the tenth anniversary of the effective date of the 2021 Plan); provided, however, that such expiration shall not affect awards then outstanding under the 2021 Plan, and the terms and conditions of the 2021 Plan shall continue to apply to such awards.

The number of shares of our common stock available for issuance under the 2021 Plan (the “Absolute Share Limit”) automatically increases on the first day of each fiscal year by the lesser of (a) 4,653,484 shares of common stock, (b) 5% of the total number of shares of common stock outstanding on the last year of the immediately preceding fiscal year and (c) a lower number of shares of common stock as determined by our Board of Directors. The Absolute Share Limit is also automatically increased by any shares of common stock underlying awards outstanding under the Fly Blade, Inc. 2015 Equity Incentive Plan (the “2015 Plan”) that, on or after the effective date of the 2021 Plan, expire or are canceled, forfeited, terminated, settled in cash or otherwise settled without issuance to the holder. Pursuant to the annual automatic increase feature of the 2021 Plan, our Board of Directors approved an increase of 3,756,471 shares of common stock available for issuance under the 2021 Plan, effective January 1, 2024, for a total of 20,521,493 shares available for issuance under the 2021 Plan as of such date.
Stock Option Awards
All of the outstanding stock options awards are fully vested. To date, there have been no stock option awards granted under the 2021 Plan (as defined below).

Following is a summary of stock option activities for the three months ended March 31, 2024:
OptionsWeighted
Average
Exercise Price
Weighted
Average
Grant Date
Fair Value
Weighted
Average
Remaining
Life
(years)
Intrinsic
Value
Outstanding – January 1, 20247,217,074 $0.19 $0.21 3.5
Exercised(508,181)0.18 0.22 
Forfeited   
Outstanding – March 31, 2024
6,708,893 $0.19 $0.21 3.2$17,856 
Exercisable as of March 31, 2024
6,708,893 $0.19 $0.21 3.2$17,856 
For the three months ended March 31, 2024 and 2023, the Company recorded no stock option expense. As of March 31, 2024, there are no remaining stock options subject to amortization.
Restricted Stock

During the three months ended March 31, 2024, the Company granted an aggregate of 7,149,318 of the Company's restricted stock units (“RSUs”), of which 2,092,178 were to various employees, officers, directors, consultants, and service providers and 5,057,140 Performance-Based Restricted Stock Units (“PSUs”) were to named executive officers and key employees under the Blade Air Mobility, Inc. 2021 Omnibus Incentive Plan (the “Plan”). The RSUs have various vesting dates, ranging from vesting on the grant date to as late as four years from the date of grant. The PSUs will vest subject to the achievement of certain financial performance metrics by the Company. Each PSU represents the right to receive one share of the Company’s common stock. The grant date fair value of these PSUs was $3.94 per share. Compensation expense associated with PSUs is recognized over the service period of the awards that are ultimately expected to vest when the related performance objective is met.

14

BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share, per share data and exchange rates)






The Company's current default tax withholding method for the vesting of RSUs is the sell-to-cover method, under which shares with a market value equivalent to the estimated tax withholding obligation are withheld from the holder of the RSUs upon vesting and sold on behalf of such holder to cover their applicable tax withholding liability, and the cash proceeds from such sales are then remitted by the Company to the applicable tax authorities. This approach is used for the vesting of RSUs held by the majority of the Company’s employees, including all of the Company’s Section 16 “officers” as defined by Section 16 of the Securities and Exchange Act of 1934, as amended.

Restricted Stock Units
Weighted Average Grant Date
Fair Value
Non-vested – January 1, 20245,259,982 $4.99 
Granted (1)
7,149,318 3.77 
Vested
(509,565)4.85 
Forfeited
(432,724)3.61 
Non-vested – March 31, 2024
11,467,011 $4.29 
(1) 5,057,140 PSUs will vest subject to the achievement of certain financial performance metrics by the Company as discussed above.
For the three months ended March 31, 2024 and 2023, the Company recorded $4,318 and $3,221 in stock compensation expense for restricted stock unit awards. As of March 31, 2024, unamortized stock-based compensation costs related to restricted stock unit arrangements was $45,182 and will be recognized over a weighted average period of 3.2 years.
Stock-Based Compensation Expense
Stock-based compensation expense for stock options and restricted stock units in the unaudited interim condensed consolidated statements of operations is summarized as follows:
Three Months Ended March 31,
20242023
Software development (1)
$(20)$168 
General and administrative (2)
4,197 2,636 
Selling and marketing
366 78
Total stock-based compensation expense (3)
$4,543 $2,882 
(1) For the three months ended March 31, 2024, a cumulative adjustment of $181 was recorded due to the forfeiture of restricted stock units of certain former employees.
(2) For the three months ended March 31, 2023, the Company included a credit of $339 in connection with the settlement of the equity-based portion of contingent consideration related to the acquisition of Trinity Air Medical, Inc. (“Trinity”) that was paid in the first quarter of 2023 in respect of 2022 results.
(3) Stock-based compensation expenses for the period ended March 31, 2024 include $225 accrued expenses.
Note 5 – Segment and Geographic Information

Segment Information

Operating segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) and is used in resource allocation and performance assessments. In addition, per ASC 280, Segment Reporting, paragraph 280-10-50-11, two or more operating segments may be aggregated into a single reportable segment if the segments have similar economic characteristics. The Company has identified two reportable segments - Passenger and Medical, as our Chief Executive Offer, who is our CODM regularly reviews discrete information for those two reportable segments. The Passenger segment consists of our two product lines Short Distance and Jet and Other. The Medical segment consists of the MediMobility Organ Transport product line. Our product lines are defined in Note 2 Revenue.

Beginning in the first quarter of 2024, the Company changed its primary measure of segment performance to Adjusted EBITDA, as the CODM evaluates the performance of the segments and allocates resources primarily based on their

15

BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share, per share data and exchange rates)





respective Adjusted EBITDA. Adjusted EBITDA reflects the operational efficiency and core results of our segment, independent of tax implications and non-operational financial factors. 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, and (7) 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.

The following table reflects certain financial data of the Company’s reportable segments:
Three Months Ended March 31,
20242023
Segment revenue
Passenger
$15,488 $18,504 
Medical
36,026 26,767 
Total revenue
$51,514 $45,271 
Segment Adjusted EBITDA
Passenger$(2,651)$(3,055)
Medical4,409 1,880 
Adjusted unallocated corporate expenses and software development (1)(5,304)(6,549)
Total Adjusted EBITDA(3,546)(7,724)
Reconciling items:
Depreciation and amortization(1,594)(1,652)
Stock-based compensation(4,543)(3,221)
Change in fair value of warrant liabilities3,478 566 
Realized (gain) loss from sales of short-term investments (81)
Interest income, net2,072 1,954 
Legal and regulatory advocacy fees (2)(3)(123)(423)
Executive severance costs (146)
Contingent consideration compensation (earn-out) (4) 339 
M&A transaction costs(62) 
Loss before income taxes$(4,318)$(10,388)
(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) For the three months ended March 31, 2024, represents legal advocacy fees related to the Drulias lawsuit (see “— Legal and Environmental” within Note 9) 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.
(3) For the three months ended March 31, 2023, represents certain legal and regulatory advocacy fees for certain proposed restrictions at East Hampton Airport and 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.
(4) Represents the credit recorded in connection with the settlement of the equity-based portion of Trinity’s contingent consideration that was paid in the first quarter of 2023 in respect of 2022 results. 2023 was the last year subject to an earn-out payment.

16

BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share, per share data and exchange rates)







March 31,
2024
December 31,
2023
Goodwill
Passenger$26,449 $27,045 
Medical13,328 13,328 
Total goodwill$39,777 $40,373 
Geographic Information

Revenue by geography is based on where the flight’s operator is based. Long-lived assets, net includes property and equipment, net and operating right-of-use assets. Summary financial data attributable to various geographic regions for the periods indicated is as follows:
Three Months Ended March 31,
20242023
Revenue
United States
$45,301 $37,999 
Other
6,213 7,272 
Total revenue
$51,514 $45,271 
March 31,
2024
December 31,
2023
Long-lived assets
United States
$14,150 $13,727 
Other
13,894 12,656 
Total long-lived assets
$28,044 $26,383 
Note 6 – Income Taxes

The Company’s effective tax rate represents the Company’s estimated tax rate for the year based on projected income and the mix of income among the various foreign tax jurisdictions, adjusted for discrete transactions occurring during the period. 

For the three months ended March 31, 2024 and 2023, income tax benefit was $84 and $196, respectively. The tax benefit in the 2024 period is attributable to Blade Monaco. The difference in the tax benefit in the 2024 period compared to the 2023 period is attributable to the mix of pretax profits from foreign operations and the mix of tax rates in those jurisdictions, while no offsetting tax benefits arising from the Company’s U.S., Canada and France net operating losses.
Note 7 – Net Loss per Common Share
Basic loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding, plus the impact of common shares, if dilutive, resulting from the exercise of outstanding stock options, restricted shares, and warrants.


17

BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share, per share data and exchange rates)





A reconciliation of net loss and common stock share amounts used in the computation of basic and diluted loss per common share is presented below.
Three Months Ended March 31,
20242023
Basic and dilutive loss per common share:
Net loss attributable to Blade Air Mobility, Inc.$(4,234)$(10,192)
Total weighted-average basic common shares outstanding75,796,411 71,992,771 
Net loss per common share:
Basic and diluted loss per common share$(0.06)$(0.14)

The following table represents common stock equivalents that were excluded from the computation of diluted loss per common share for the three months ended March 31, 2024 and 2023 because the effect of their inclusion would be anti-dilutive:
Three Months Ended March 31,
20242023
Warrants to purchase shares of common stock14,166,644 14,166,644 
Options to purchase shares of common stock6,708,893 7,303,079 
Restricted shares of common stock
11,467,011 7,459,037 
Total potentially dilutive securities32,342,548 28,928,760 
Note 8 – Related Party Transactions
The Company occasionally engages in transactions for certain air charter services with jet operators who are part of the portfolio of RedBird Capital Partners Management LLC, which is an investor in the Company. Additionally, one member of the Company’s board of directors is a Partner of an affiliated company of RedBird Capital Partners Management LLC.

During the three months ended March 31, 2024 and 2023, the Company paid these jet operators approximately $61 and $68, respectively for air charter services. These costs were recorded within Cost of revenue on the Company’s unaudited interim condensed consolidated statement of operations.
Note 9 – Commitments and Contingencies
Capacity Purchase Agreements
Blade has contractual relationships with various aircraft operators to provide aircraft service. Under these CPAs, the Company pays the operator contractually agreed fees (carrier costs) for operating these flights. The fees are generally based on fixed hourly rates for flight time multiplied by hours flown. Under these CPAs, the Company is also responsible for landing fees and other costs, which are either passed through by the operator to the Company without any markup or directly incurred by the Company.
As of March 31, 2024, the Company has remaining unfulfilled obligations under agreements with various aircraft operators to provide aircraft service. The remaining unfulfilled obligation includes amounts within operating lease liability related to aircraft leases embedded within our capacity purchase agreements as discussed in Note 3 – Right-of-Use Asset and Operating Lease Liability. These future unfulfilled obligations were as follows:

18

BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share, per share data and exchange rates)





For the Year Ended December 31
Total Unfulfilled Obligation Immediate Termination (1)Termination for Convenience (2)
Remainder of 2024$16,354 $10,201 $1,882 
2025
22,539 16,135  
2026
20,925 14,521  
2027
20,352 13,947  
20286,405   
2029 - 2032 (each year)
6,405   
(1) Within total unfulfilled obligation, the following amounts are where Blade has the ability for immediate termination if a government authority enacts travel restrictions.
(2) Within total unfulfilled obligation, the following amounts are where Blade could terminate for convenience upon 30 or 60 days’ notice, with a one-year annual minimum guarantee being pro-rated as of the termination date.

Legal and Environmental
From time to time, we may be a party to litigation that arises in the ordinary course of business. Other than described below, we do not have any pending litigation that, separately or in the aggregate, would, in the opinion of management, have a material adverse effect on its results of operations, financial condition or cash flows. As of March 31, 2024, management believes, after considering a number of factors, including (but not limited to) the information currently available, the views of legal counsel, the nature of contingencies to which the Company is subject and prior experience, that the ultimate disposition of these other litigation and claims will not materially affect the Company's consolidated financial position or results of operations. The Company records liabilities for legal and environmental claims when a loss is probable and reasonably estimable. These amounts are recorded based on the Company's assessments of the likelihood of their eventual disposition.

In February 2024, two putative class action lawsuits relating to the acquisition of Blade Urban Air Mobility, Inc. (“Old Blade”) were filed in the Delaware Court of Chancery. On April 16, 2024, these cases have been consolidated under the caption Drulias et al. v. Affeldt, et al., C.A. No. 2024-0161-SG (Del. Ch.) (“Drulias”). Plaintiffs assert claims for breach of fiduciary duty and unjust enrichment claims against the EIC Directors, the former officers of EIC, Experience Sponsor LLC (“Sponsor”) and KSL Capital Partners, LLC (“KSL”), and aiding and an abetting breach of fiduciary duty claim against Sponsor and KSL. The Complaint alleges, amongst other things, that the Merger Proxy insufficiently disclosed EIC’s cash position, Old Blade’s value prospects and risks, and information related to Old Blade’s chief executive officer, who is also our current chief executive officer. The complaints seek, among other things, damages and attorneys’ fees and costs. Litigation is ongoing. The Company believes that all claims in the lawsuit are without merit and intends to defend itself vigorously against them.

Non-Cancellable Commitments with Vendors

In December 2023, the Company entered into a technology service agreement with a vendor for cloud computing services where we are committed to spend $0.3 million, $1.1 million and $1.6 million for the years ending December 31, 2024, 2025 and 2026, respectively.
Note 10 – Warrant Liabilities
On May 7, 2021, the merger between Old Blade and EIC was consummated (the “Merger”). The warrants acquired in the Merger include (a) redeemable warrants issued by EIC and sold as part of the units in the EIC Initial Public Offering (“EIC IPO”) (whether they were purchased in the EIC IPO or thereafter in the open market), which are exercisable for an aggregate of 9,166,644 shares of common stock at a purchase price of $11.50 per share (the “Public Warrants”) and (b) warrants issued by EIC to the Experience Sponsor LLC (“Sponsor”) in a private placement simultaneously with the closing of the EIC IPO, which are exercisable for an aggregate of 5,000,000 shares of common stock at a purchase price of $11.50 per share (the “Private Placement Warrants”).

The Company evaluated its warrants under Accounting Standards Codification (“ASC”) ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and concluded that they do not meet the criteria to be classified in stockholders’ equity. Accordingly, the Company classifies the warrants as liabilities at their fair value and adjusts the

19

BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share, per share data and exchange rates)





warrants to fair value at each reporting period. This liability is subject to remeasurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s unaudited interim condensed consolidated statement of operations. See Note 11 – Fair Value Measurements for additional information.

Warrants — Public Warrants may only be exercised for a whole number of shares. The Public Warrants became exercisable on June 7, 2021. The Public Warrants will expire on May 7, 2026 or earlier upon redemption or liquidation.
Redemptions of Warrants for Cash — The Company may redeem the Public Warrants:
in whole and not in part;
at a price of $0.01 per warrant;
upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
if, and only if, the reported last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to each warrant holder.
Redemption of Warrants for Shares of Common Stock — The Company may redeem the outstanding warrants:
in whole and not in part;
at a price equal to a number of shares of common stock to be determined, based on the redemption date and the fair market value of the Company’s common stock;
upon a minimum of 30 days’ prior written notice of redemption;
if, and only if, the last reported sale price of the Company’s common stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations, and the like) on the trading day prior to the date on which the Company sends the notice of redemption to the warrant holders; and
if, and only if, there is an effective registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating thereto is available throughout the 30-day period after the written notice of redemption is given.
If the Company calls the Public Warrants for redemption for cash, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis”, as described in the warrant agreement. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, recapitalization, reorganization, merger, or consolidation. However, except as described below, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net-cash settle the warrants.
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the initial public offering, except that the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees (unless the Class A common stock equals or exceed $10 per share and the Company redeem all the Public Warrants). If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
Note 11 – Fair Value Measurements
The Company follows the guidance in ASC 820, Fair Value Measurement (“ASC 820”), for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market

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BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share, per share data and exchange rates)





participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1:    Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2:    Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3:    Unobservable inputs based on management’s assessment of the assumptions that market participants would use in pricing the asset or liability.
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
LevelMarch 31, 2024December 31, 2023
Warrant liabilities - Public Warrants
1$958 $3,208 
Warrant liabilities - Private Warrants
2522 1,750 
Fair value of aggregate warrant liabilities
$1,480 $4,958 
The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within “Warrant liability” on the Company’s consolidated balance sheets. The warrant liabilities are measured at fair value upon assumption and on a recurring basis, with changes in fair value presented within “Change in fair value of warrant liabilities” in the consolidated statements of operations.
The Public Warrants are considered part of Level 1 of the fair value hierarchy, as those securities are traded on an active public market. At May 7, 2021 and thereafter, the Company valued the Private Warrants using Level 2 of the fair value hierarchy. The Company used the value of the Public Warrants as an approximation of the value of the Private Warrants as they are substantially similar to the Public Warrants, but not directly traded or quoted on an active market.
Subsequent Measurement

The following table presents the changes in fair value of the warrant liabilities:
Public
Warrants
Private
Placement
Warrants
Total Warrant
Liability
Fair value as of January 1, 2024
$3,208 $1,750 $4,958 
Change in fair value of warrant liabilities
(2,250)(1,228)(3,478)
Fair value as of March 31, 2024
$958 $522 $1,480 
Note 12 – Stockholders' Equity

Preferred Stock

The board of directors of the Company is authorized to provide, out of the unissued shares of Preferred Stock, for one or more series of Preferred Stock and, with respect to each such series, to fix, without further stockholder approval, the number of shares constituting such series and the designation of such series, the powers (including voting powers), preferences and relative, participating, optional and other special rights, and the qualifications, limitations or restrictions thereof, of such series of Preferred Stock. The powers (including voting powers), preferences and relative, participating, optional and other special rights of, and the qualifications, limitations or restrictions thereof, of each series of Preferred Stock, if any, may differ from those of any and all other series at any time outstanding. There was no preferred stock issued and outstanding as of March 31, 2024 or December 31, 2023.

Share Repurchase Program

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BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share, per share data and exchange rates)






On March 20, 2024, the Company announced that its Board of Directors has 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 Class A common stock, exclusive of any fees, commissions or other expenses related to such repurchases. The Company’s stock repurchase programs may be suspended, modified or discontinued by the Board at any time without prior notice at the Company's discretion. 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.
Note 13 – Subsequent Events

On March 11, 2024, Blade entered into definitive agreements to acquire eight fixed-wing aircraft (the “Acquired Aircraft”) from M&N Equipment, LLC (“M&N”), Atlas Jet Inc. and Aviation Bridge, LLC for a combined purchase price of approximately $21.0 million, funded by the application of approximately $9.3 million in existing prepaid deposits under existing Capacity Purchase Agreements with M&N, and approximately $11.7 million in cash, subject to traditional closing conditions, inspections, holdbacks and adjustments. During the period from April 1, 2024 through May 2, 2024, Blade completed the acquisition of seven of the eight aircraft, with the acquisition of the remaining one aircraft expected to complete in the coming months. Blade intends to utilize the Acquired Aircraft, which were previously dedicated to Blade under existing Capacity Purchase Agreements, to support its Medical business line. The Acquired Aircraft will continue to be operated by the same operator.



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Item 2. Management’s discussion and analysis of financial condition and results of operations
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;
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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 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, Southern Europe and Western Canada. 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 5 to the unaudited interim condensed consolidated financial statements included herein for further information on reportable segments):

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Passenger segment

Short Distance – Consisting primarily of helicopter and amphibious seaplane flights in the United States, Canada 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, 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.
Seats Flown

The following table reflects the key operating metric we use to evaluate the Passenger segment:
Three Months Ended March 31,
20242023
Seats flown – all passenger flights
27,708 28,550 
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.
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
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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 line
Our MediMobility Organ Transport product line primarily serves transplant centers, organ procurement organizations and hospitals. 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 business line of our Passenger segment. Historically, the combination of our Passenger and MediMobility Organ Transport demand, has been enough to incentivize operators to
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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 business 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 will be 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.
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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 quarters ended March 31 (Q1) and December 31 (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 business has not been significant.
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 cars, landing fees, depreciation for cars, ROU asset amortization and internal costs incurred in generating organ ground transportation revenue using the Company's owned cars.
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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, professional fees, credit card processing fees and establishment costs.
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:
Three Months Ended March 31,
20242023
(in thousands)
Revenue$51,514 $45,271 
Operating expenses
Cost of revenue
41,375 38,107 
Software development
670 1,123 
General and administrative
17,209 16,257 
Selling and marketing
2,128 2,611 
Total operating expenses
61,382 58,098 
Loss from operations
(9,868)(12,827)
Other non-operating income
Interest income, net
2,072 1,954 
Change in fair value of warrant liabilities
3,478 566 
Realized loss from sales of short-term investments— (81)
Total other non-operating income5,550 2,439 
Loss before income taxes(4,318)(10,388)
Income tax benefit(84)(196)
Net loss$(4,234)$(10,192)
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Comparison of the Three Months Ended March 31, 2024 and 2023

Revenue
Disaggregated revenue by product line was as follows:
Three Months Ended March 31,
20242023% Change
(in thousands, except percentages)
Product Line:
Short Distance$9,810 $10,425 (6)%
Jet and Other5,678 8,079 (30)%
MediMobility Organ Transport36,026 26,767 35 %
Total Revenue
$51,514 $45,271 14 %

For the three months ended March 31, 2024 and 2023, revenue increased by $6.2 million or 14%, from $45.3 million in 2023 to $51.5 million in 2024.
Short Distance revenue decreased by $0.6 million or 6% from $10.4 million in 2023 to $9.8 million in 2024. The decrease was primarily driven by lower activity of Europe for a $0.6 million decrease, mostly due to significant weather impacts, and lower activity in Canada for a $0.4 million decrease. These were partially offset by growth in our New York airport transfer products for a $0.3 million increase and a $0.1 million increase in other US Short Distance.

Jet and Other revenue decreased by $2.4 million or 30% from $8.1 million in 2023 to $5.7 million in 2024. The decrease was driven primarily by the discontinuation of our seasonal by-the-seat jet service between New York and South Florida, resulting in a $2.9 million decrease, partially offset by growth in Jet charters of $0.3 million and growth in brand partnership revenues of $0.2 million.
MediMobility Organ Transport revenue increased by $9.3 million or 35% from $26.8 million in 2023 to $36.0 million in 2024. The growth was driven primarily by the addition of new hospital clients resulting in a $3.8 million increase, higher activity from existing clients, resulting in a $2.1 million increase, as hospitals accepted more organs for transplant involving longer travel distances, increasing average flight hours per trip, higher revenue per flight hour resulting in a $1.0 million increase and an increase in ground revenue for $2.0 million (from both existing and new clients).
Cost of Revenue
Three Months Ended March 31,
20242023% Change
(in thousands, except percentages)
Cost of revenue$41,375 $38,107 %
Percentage of revenue80 %84 %

For the three months ended March 31, 2024 and 2023, cost of revenue increased by $3.3 million or 9%, from $38.1 million during 2023 to $41.4 million in 2024 driven by increased flight volume and an increase in the average Medical flight distance.
Cost of revenue as a percentage of revenues decreased by 4 percentage points from 84% to 80%, attributable primarily to increased use of dedicated aircraft (which typically have lower costs per flight hour and enhanced economies of scale) and increased revenue per flight hour in our Medical business, these improvements were partially offset by higher cost of revenue as a percent of revenue in Europe and Canada compared to the same period last year.
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Software Development
Three Months Ended March 31,
20242023% Change
(in thousands, except percentages)
Software development
$670 1,123 (40)%
Percentage of revenue%%
For the three months ended March 31, 2024 and 2023, software development costs decreased $0.5 million, or 40%, from $1.1 million during 2023 to $0.7 million in 2024, attributable primarily to a decrease in staff and contractors costs and a decrease of $0.2 million in stock-based compensation costs (due to a forfeiture).
General and Administrative
Three Months Ended March 31,
20242023% Change
(in thousands, except percentages)
General and administrative
$17,209 $16,257 %
Percentage of revenue33 %36 %
For the three months ended March 31, 2024 and 2023, general and administrative expense increased by $1.0 million, or 6%, from $16.3 million in 2023 to $17.2 million in 2024.

The primary driver for the increase was a $2.0 million increase in staff costs, of which $1.5 million is attributable to stock-based compensation and $0.5 million is attributable to increased headcount to support growth in Medical. Those increases were partially offset by a $0.6 million decrease in legal and insurance expense and a $0.3 million decrease in intangibles amortization costs.
Selling and Marketing
Three Months Ended March 31,
20242023% Change
(in thousands, except percentages)
Selling and marketing
$2,128 $2,611 (18)%
Percentage of revenue%%
For the three months ended March 31, 2024 and 2023, selling and marketing expense decreased by $0.5 million, or 18%, from $2.6 million in 2023 to $2.1 million in 2024. The decrease is attributable primarily to a $1.0 million decrease in marketing expenses, primarily driven by the discontinuation of seasonal jet service between New York and South Florida. This decrease was partially offset by a $0.5 million increase in staff costs, inclusive of stock-based compensation and sales commissions.
Other non-operating income (expense)
Three Months Ended March 31,
20242023% Change
(in thousands, except percentages)
Interest income, net$2,072 $1,954 
Change in fair value of warrant liabilities3,478 566 
Realized loss from sales of short-term investments— (81)
Total other non-operating income
$5,550 $2,439 128%
For the three months ended March 31, 2024 and 2023, other non-operating income increased by $3.1 million, or 128% from $2.4 million in 2023 to $5.6 million in 2024. This increase was driven primarily by a $2.9 million decrease in the fair value of our warrant liabilities as the value of the warrant liabilities fluctuates with the warrants’ market price. Interest income associated with our short-term investments and money market accounts also increased $0.1 million.
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Segment Results of Operations

We operate our business as two reportable segments - Passenger and Medical. For additional information about our segments, see Note 5 - “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):

Three Months Ended March 31,
20242023% Change
(in thousands, except percentages)
Segment Revenue
Passenger
$15,488 $18,504 (16)%
Medical
36,026 26,767 35 %
Total revenue
$51,514 $45,271 14 %
Segment Adjusted EBITDA
Passenger$(2,651)$(3,055)(13)%
Medical4,409 1,880 135 %
Adjusted unallocated corporate expenses and software development (1)(5,304)(6,549)(19)%
Adjusted EBITDA(2)$(3,546)$(7,724)(54)%
Segment Adjusted EBITDA Margin(3)
Passenger(17)%(17)%
Medical12 %%
Adjusted EBITDA Margin(7)%(17)%
(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.

Passenger segment

For the three months ended March 31, 2024 and 2023, Passenger revenue decreased by $3.0 million or 16%, from $18.5 million in 2023 to $15.5 million in 2024. The decrease was attributable to a $0.6 million decrease in Short Distance and a $2.4 million decrease in Jet and Other. Refer to the disaggregated revenue discussion above under “—Comparison of the Three Months Ended March 31, 2024 and 2023—Revenue” for more details.
Passenger Adjusted EBITDA improved by $0.4 million or 13% for the three months ended March 31, 2024 from $(3.1) million in the same period of 2023 to $(2.7) million in 2024. The improvement is primarily attributable to a $1.0 million decrease in marketing expenses and a $0.2 million decrease in personnel costs. These were partially offset by higher effective cost of revenue per flight attributable to difficult weather, which drove high cancellation rates compared to the prior year period for a $0.7 million impact.
Medical segment
For the three months ended March 31, 2024 and 2023, Medical revenue increased by $9.3 million or 35%, from $26.8 million in 2023 to $36.0 million in 2024. Refer to the disaggregated revenue discussion above under “Comparison of the Three Months Ended March 31, 2024 and 2023—Revenue” for more details.

Medical Adjusted EBITDA increased by $2.5 million or 135%, for the three months ended March 31, 2024 from $1.9 million in the same period of 2023 to $4.4 million in 2024. $3.7 million of the increase is attributable to: (i) larger volume for both air and
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ground missions, from new and existing clients (ii) increased average air trip distance (iii) lower effective cost of revenue per flight due to higher utilization of dedicated aircraft, which typically have lower cost per flight hour. Those increases were partially offset by a $1.2 million increase in fixed costs, primarily staff costs in order to support the higher activity.

Adjusted EBITDA, Flight Profit and Flight Margin

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

Three Months Ended March 31,
20242023% Change
(in thousands, except percentages)
Adjusted EBITDA(1)$(3,546)$(7,724)(54)%
Flight Profit(1)$10,139 7,164 42 %
Flight Margin(1)19.7 %15.8 %</