# Strata Critical Medical, Inc. (SRTA) FY 2024 MD&A

Verbatim Item 7 Management's Discussion and Analysis from Strata Critical Medical, Inc.'s 10-K for fiscal year 2024.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1779128/000177912825000010/blde-20241231.htm
Accession: 0001779128-25-000010
Filing date: 2025-03-13
Report date: 2024-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

Company profile: /company/SRTA/
All MD&A years: /company/SRTA/mda/
Previous year: /company/SRTA/mda/fy2023/ (FY 2023)
Next year: /company/SRTA/mda/fy2025/ (FY 2025)

Item 7. 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 other sections of this Annual Report on Form 10-K, including our consolidated financial statements and the related notes and other financial information included elsewhere in this Annual Report on Form 10-K.

In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. For important information regarding these forward-looking statements, please see the discussion above under the caption “Note Regarding Forward-Looking Statements.”

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Overview

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

Blade operates in three key product lines across two segments (see Note 8 to the consolidated financial statements included in this Annual Report for further information on reportable segments):

Passenger segment

•Short Distance – Consisting primarily of helicopter and amphibious seaplane flights in the United States and Europe between 10 and 100 miles in distance. Flights are available for purchase both by-the-seat and on a full aircraft charter basis. This product line previously also included flights in Canada, which we discontinued in August 2024.

•Jet and Other –  Consists principally of revenues from non-medical jet charter, revenue from brand partners for exposure to Blade fliers and certain ground transportation services. This product line previously also included by-the-seat jet flights between New York and South Florida, which we discontinued in November 2023.

Medical segment

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

Seats Flown

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

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

[[GREPCENT_TABLE]]
[["","","","Year Ended December 31,"],["","","","","2024","","2023"],["Seats flown \u2013 all passenger flights (1)","","","","","94,733","","","95,781"]]
[[/GREPCENT_TABLE]]

(1) Prior year amounts have been updated to conform to current period presentation.

We discontinued our operations in Canada on August 31, 2024. As a result, the Seats Flown metric above excludes activity in Canada for the years ended December 31, 2024, and 2023. The Seats Flown in Canada amounted to 36,465 and 55,924 for the years ended December 31, 2024 and 2023, respectively.

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

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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 (“CPAs”), 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.

Over the course of 2024, we acquired ten fixed wing aircraft that are currently dedicated to the Medical segment. We made the decision to invest in a limited number of owned aircraft based in high-volume geographies as we believe direct asset ownership will enable (i) improved economies of scale; (ii) increased uptime, enabling more reliable service and higher asset utilization; and (iii) the ability to compete for certain contracts where asset ownership is preferred or required. All of these aircraft are operated and maintained by third-party service providers under Blade’s oversight. See Item 2. Properties “—Aircraft Assets” in this Annual Report for more information. We prioritize the use of owned aircraft and dedicated aircraft under CPAs, which provide better economies of scale. We size our owned fleet and our commitments under CPAs 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

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grow our flier base, retain existing fliers, or increase the overall utilization of our platform, our business, financial condition, and results of operations could be adversely affected.

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

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

The organ transportation market is highly competitive and we compete for organ transportation business primarily on our ability to provide reliable, end-to-end air and ground transportation at competitive pricing. Increasingly, we compete directly with manufacturers of organ preservation equipment that also offer transportation or with providers that offer additional services, such as surgical organ recovery, that our customers find valuable. We may face increased competition as our Medical Customers may prefer a streamlined logistics offering. We have responded to customer demand by introducing new services, such as our TOPS offering, whereby we assist customers in evaluating the suitability of potential donor organs for transplant, but they may demand services or technology that we cannot provide, which could have a material adverse effect on our business, results of operations, and financial condition.

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

Impact of inflation to our business

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

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

Passenger Expansion into New Geographic Markets

Our Passenger segment growth plan is focused on dense urban areas, primarily those with existing air transportation infrastructure that are facing increasing ground congestion. For example, in 2022, we acquired the entities that we collectively refer to as “Blade Europe”, which operate in Southern France and Monaco. Blade Europe acts as the air charter broker and/or reseller of air transportation services operated and provided by our operator partners for routes in Southern France, Monaco, Italy and Switzerland. 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

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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 OEMs to develop and our third-party aircraft operators to adopt. However, before EVA can fly passengers or cargo, OEMs must receive requisite approvals from federal transportation authorities. No EVA aircraft are currently certified by the FAA for commercial operations in the United States, and there is no assurance that OEM research and development will result in government certified aircraft that are market-viable or commercially successful in a timely manner, or at all. In order to gain government certification, the performance, reliability, and safety of EVA must be proven, none of which can be assured. Even if EVA aircraft are certified, individual operators must conform EVA aircraft to their licenses, which requires FAA approval, and individual pilots also must be licensed and approved by the FAA to fly EVA aircraft, which could contribute to delays in any widespread use of EVA and potentially limit the number of EVA operators available to our business. There is no assurance that research and development will result in government certified aircraft that are market-viable or commercially successful in a timely manner, or at all.

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

Seasonality

Passenger segment

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

Jet and Other revenue has historically been stronger in the first and fourth quarter (Q1 and Q4) given that our by-the-seat jet service between New York and South Florida has historically operated only between November and April. We discontinued this service in November 2023.

Medical segment

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

Key Components of the Company’s Results of Operations

Revenue

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

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

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

Cost of Revenue

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

Software Development

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

General and Administrative

General and administrative expenses principally include staff costs including stock-based compensation, intangibles amortization, depreciation, establishment costs, impairment of intangible assets, directors and officers insurance costs, pilot training costs for owned aircraft, professional fees and credit card processing fees.

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.

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Results of Operations

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

[[GREPCENT_TABLE]]
[["","","","Year Ended December 31,"],["","","","","2024","","% of Revenue","","2023","","% of Revenue"],["","","","","(in thousands, except share and per share data)"],["Revenue","","","","","$","248,693","","","100%","","$","225,180","","","100%"],["Operating expenses"],["Cost of revenue","","","","","189,774","","","76%","","183,058","","","81%"],["Software development","","","","","3,184","","","1%","","4,627","","","2%"],["General and administrative","","","","","81,711","","","33%","","95,174","","","42%"],["Selling and marketing","","","","","7,950","","","3%","","10,438","","","5%"],["Total operating expenses","","","","","282,619","","","114%","","293,297","","","130%"],["Loss from operations","","","","","(33,926)","","","","","(68,117)"],["Other non-operating income (expense)"],["Interest income","","","","","7,214","","","","","8,442"],["Change in fair value of warrant liabilities","","","","","(850)","","","","","2,125"],["Realized gain from sales of short-term investments","","","","","\u2014","","","","","8"],["Total other non-operating income","","","","","6,364","","","","","10,575"],["Loss before income taxes","","","","","(27,562)","","","","","(57,542)"],["Income tax benefit","","","","","(255)","","","","","(1,466)"],["Net loss","","","","","$","(27,307)","","","","","$","(56,076)"],["Net loss per share, basic and diluted","","","","","$","(0.35)","","","","","$","(0.76)"],["Weighted-average number of shares outstanding, basic and diluted","","","","","77,499,423","","","","","73,524,476"]]
[[/GREPCENT_TABLE]]

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Comparison of the Years Ended December 31, 2024 and 2023

Revenue

Disaggregated revenue by product line was as follows:

[[GREPCENT_TABLE]]
[["","","Year Ended December 31,"],["","2024","","2023","","% Change"],["","","(in thousands, except percentages)"],["Product Line:"],["Short Distance","","$","72,203","","","$","70,700","","","2.1","%"],["Jet and Other","","29,673","","","27,876","","","6.4","%"],["MediMobility Organ Transport","","146,817","","","126,604","","","16.0","%"],["Total Revenue","","$","248,693","","","$","225,180","","","10.4","%"]]
[[/GREPCENT_TABLE]]

For the years ended December 31, 2024 and 2023, revenue increased by $23.5 million or 10.4%, from $225.2 million in 2023 to $248.7 million in 2024.

Short Distance revenue increased by $1.5 million or 2.1% from $70.7 million in 2023 to $72.2 million in 2024. Growth in Short Distance was primarily driven by growth in our Hamptons seasonal service for a $2.6 million increase, growth in our New York airport transfer products, including annual pass activity, for a $1.5 million increase, and increased volumes of Northeast helicopter charters for a $1.5 million increase. This was partially offset by the discontinuation of the Canada routes on August 31, 2024 for a $4.1 million decrease.

Jet and Other revenue increased by $1.8 million, or 6.4%, from $27.9 million in 2023 to $29.7 million in 2024. This increase was driven by a $4.7 million growth in jet charters, higher brand partnership revenues for $0.4 million, and revenue from the introduction of the new seasonal Hamptons Streamliner Bus in the current year period for $0.3 million. This was partially offset by a $3.9 million decrease attributable to the discontinuation of our seasonal by-the-seat jet service between New York and South Florida.

MediMobility Organ Transport revenue increased by $20.2 million or 16.0% from $126.6 million in 2023 to $146.8 million in 2024. The growth was driven primarily by $8.3 million attributable to the addition of new hospital clients, including for our TOPS organ placement service, and higher revenue from existing clients of $16.2 million related to higher volumes, higher revenue per trip and higher ground revenue. Growth in revenue from existing clients was partially impacted by reduced repositioning flight hours due to positioning own aircraft closer to our clients, providing efficiencies and improved service for our customers. Those increases were further offset by a $4.3 million decrease due to one temporary customer we supported only in the 2023 period. Excluding the impact of the temporary customer, revenue would have grown 20% versus the 2023 period.

Cost of Revenue

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["2024","","2023","","% Change"],["","(in thousands, except percentages)"],["Cost of revenue","$","189,774","","","$","183,058","","","3.7","%"],["Percentage of revenue","76","%","","81","%"]]
[[/GREPCENT_TABLE]]

For the years ended December 31, 2024 and 2023, cost of revenue increased by $6.7 million, or 3.7%, from $183.1 million during 2023 to $189.8 million in 2024 driven by increased flight volume.

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

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Software Development

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["2024","","2023","","% Change"],["","(in thousands, except percentages)"],["Software development","$","3,184","","","4,627","","","(31.2)","%"],["Percentage of revenue","1","%","","2","%"]]
[[/GREPCENT_TABLE]]

For the years ended December 31, 2024 and 2023, software development costs decreased by $(1.4) million, or (31.2)%, from $4.6 million during 2023 to $3.2 million in 2024. This decrease was primarily due to a higher proportion of software development costs being capitalized in 2024 rather than expensed. Specifically, in 2024, we had more software development projects that reached technological feasibility. Additionally, stock-based compensation costs decreased by $0.4 million, contributing to the overall decrease.

General and Administrative

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["2024","","2023","","% Change"],["","(in thousands, except percentages)"],["General and administrative","$","81,711","","","$","95,174","","","(14.1)","%"],["Percentage of revenue","33","%","","42","%"]]
[[/GREPCENT_TABLE]]

For the year ended December 31, 2024 and 2023, general and administrative expense decreased by $(13.5) million, or (14.1)%, from $95.2 million in 2023 to $81.7 million in 2024.

The primary drivers for the decrease were: a $20.8 million decrease in impairment expense related to Blade Europe’s intangible assets in the prior year period, a $9.7 million decrease attributable to contingent consideration compensation (earn-out) in the prior year period and a $3.2 million decrease in intangibles amortization costs. These decreases were partially offset by the following increases: a $7.5 million increase in stock-based compensation largely due to performance-based stock units granted in the first quarter of 2024; a $5.8 million impairment expense related to the exclusive rights to air transportation services intangible asset associated with Blade Canada, which was discontinued in 2024; a $1.9 million increase in staff costs attributable mainly to the growth in our Medical segment; a $1.7 million increase in legal and regulatory advocacy fees associated with two specific cases (the Drulias lawsuit discussed in “Item 3. Legal Proceedings” of this Annual Report and to the proposed restrictions at East Hampton Airport); a $1.6 million increase in expenses related to the owned aircraft, including pilot training, hangar costs and insurance (which did not exist in the prior year period); and a $1.4 million increase due to restructuring costs in Europe, where we eliminated redundant positions overlapping with our exclusive operator.

Selling and Marketing

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["2024","","2023","","% Change"],["","(in thousands, except percentages)"],["Selling and marketing","$","7,950","","","$","10,438","","","(23.8)","%"],["Percentage of revenue","3","%","","5","%"]]
[[/GREPCENT_TABLE]]

For the years ended December 31, 2024 and 2023, selling and marketing expense decreased by $(2.5) million, or (23.8)%, from $10.4 million in 2023 to $8.0 million in 2024. The decrease is attributable primarily to a $1.7 million decrease in media spend, primarily driven by the discontinuation of our seasonal by-the-seat jet service between New York and South Florida (which was discontinued in November 2023) and more disciplined media spend in the winter months, and a $1.5 million decrease in cash commissions in the Medical segment. Those decreases were partially offset by a $0.5 million increase in stock-based compensation.

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Other non-operating income (expense)

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["2024","","2023","","% Change"],["","(in thousands, except percentages)"],["Interest income, net","$","7,214","","","$","8,442"],["Change in fair value of warrant liabilities","(850)","","","2,125"],["Realized gain from sales of short-term investments","\u2014","","","8"],["Total other non-operating income","$","6,364","","","$","10,575","","","(39.8)%"]]
[[/GREPCENT_TABLE]]

For the year ended December 31, 2024, total other non-operating income consisted of $7.2 million interest income, attributable to our short-term investments and our money market funds; and $0.9 million non-cash loss due to fair value revaluation of warrant liabilities as the value of the warrant liabilities fluctuates with the warrants’ market price.

For the year ended December 31, 2023, total other non-operating income consisted of $8.4 million interest income, attributable to our short-term investments and our money market funds; and $2.1 million non-cash gain due to fair value revaluation of warrant liabilities as the value of the warrant liabilities fluctuates with the warrants’ market price.

Segment Results of Operations

We operate our business as two reportable segments - Passenger and Medical. For additional information about our segments, see Note 8 to the consolidated financial statements included in this Annual Report.

Segment Revenue and Segment Adjusted EBITDA

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

[[GREPCENT_TABLE]]
[["","","","","","Year Ended December 31,"],["","","","","","","","2024","","2023","","% Change"],["","","","","","","(in thousands, except percentages)"],["Segment Revenue"],["Passenger","","","","","","","$","101,876","","","$","98,576","","","3.3","%"],["Medical","","","","","","","146,817","","","126,604","","","16.0","%"],["Total revenue","","","","","","","$","248,693","","","$","225,180","","","10.4","%"],["Segment Adjusted EBITDA"],["Passenger","","","","","","","$","3,568","","","$","(4,988)","","","NM(4)"],["Medical","","","","","","","19,286","","","10,754","","","79.3","%"],["Adjusted unallocated corporate expenses and software development (1)","","","","","","","(21,649)","","","(22,399)","","","(3.3)","%"],["Total Adjusted EBITDA (2)","","","","","","","$","1,205","","","$","(16,633)","","","NM(4)"],["Segment Adjusted EBITDA Margin (3)"],["Passenger","","","","","","","3.5","%","","(5.1)","%"],["Medical","","","","","","","13.1","%","","8.5","%"],["Adjusted EBITDA Margin (2)","","","","","","","0.5","%","","(7.4)","%"],["(1) Includes costs that are not directly attributable to reportable segments such as finance, accounting, tax, information technology, human resources, legal costs and software development costs (primarily consists of staff and contractors costs), and excludes non-cash items and certain transactions that management does not believe are reflective of our ongoing core operations.(2) Total Adjusted EBITDA is a non-GAAP measure. See the section titled \u201cReconciliations of Non-GAAP Financial Measures\u201d below for more information and reconciliations to the most directly comparable GAAP financial measure.(3) Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of revenue. Segment Adjusted EBITDA is defined as segment Adjusted EBITDA as a percentage of segment revenue.(4) Percentage not meaningful."]]
[[/GREPCENT_TABLE]]

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Passenger segment

For the years ended December 31, 2024 and 2023, Passenger revenue increased by $3.3 million, or 3.3%, from $98.6 million in 2023 to $101.9 million in 2024. The increase was attributable to a $1.5 million increase in Short Distance and a $1.8 million increase in Jet and Other. Refer to the disaggregated revenue discussion above under “—Comparison of the Years Ended December 31, 2024 and 2023—Revenue” for more details.

Passenger Adjusted EBITDA improved by $8.6 million for the year ended December 31, 2024 from $(5.0) million in the same period of 2023 to $3.6 million in 2024. The improvement is primarily attributable to higher revenue combined with lower effective cost of revenue per flight across Passenger flights (Short Distance and Jet flights) compared to the prior year period for a $6.4 million impact, attributable to improved pricing and improved load factor. Further improvements are attributable to a $1.6 million decrease in marketing expenses and a $0.5 million decrease in personnel costs.

Medical segment

For the years ended December 31, 2024 and 2023, Medical revenue increased by $20.2 million, or 16.0%, from $126.6 million in 2023 to $146.8 million in 2024. Refer to the disaggregated revenue discussion above under “—Comparison of the Years Ended December 31, 2024 and 2023—Revenue” for more details.

Medical Adjusted EBITDA increased by $8.5 million, or 79.3%, for the year ended December 31, 2024 from $10.8 million in the same period of 2023 to $19.3 million in 2024. $10.2 million of the increase is attributable to increase in revenue coupled with lower effective cost of revenue per trip driven by higher revenue per flight hour; mix-shift to dedicated aircraft, partially driven by our acquisitions of aircraft, which generally have lower operating costs per flight hour; and mix shift to ground revenue, which is, on average, higher margin versus air. This was partially offset by a $1.7 million increase in fixed costs, primarily staff costs to support the higher activity, including costs related to aircraft ownership that did not exist in the prior year period.

Consolidated Net Loss, Adjusted EBITDA, Gross Profit, Flight Profit, Gross Margin, and Flight Margin

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

[[GREPCENT_TABLE]]
[["","","","","","Year Ended December 31,"],["","","","","","","","2024","","2023","","% Change"],["","","","","","","(in thousands, except percentages)"],["Net Loss","","","","","","","$","(27,307)","","","$","(56,076)","","","(51)","%"],["Adjusted EBITDA(1)","","","","","","","$","1,205","","","$","(16,633)","","","NM(2)"],["Gross Profit","","","","","","","$","40,652","","","$","22,458","","","81.0","%"],["Flight Profit(1)","","","","","","","$","58,919","","","$","42,122","","","39.9","%"],["Gross Margin","","","","","","","16.3","%","","10.0","%"],["Flight Margin(1)","","","","","","","23.7","%","","18.7","%"]]
[[/GREPCENT_TABLE]]

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

(2) Percentage not meaningful.

Comparison of the Years Ended December 31, 2024 and 2023

Net loss improved by $28.8 million for the year ended December 31, 2024 from $(56.1) million in the same period of 2023 to $(27.3) million in 2024. See Results of Operations for further discussion. Adjusted EBITDA improved by $17.8 million for the year ended December 31, 2024 from $(16.6) million in the same period of 2023 to $1.2 million in 2024. The improvement is primarily attributable to Adjusted EBITDA improvements of $8.6 million and $8.5 million in Passenger and Medical, respectively (refer to the discussion above), coupled with a $0.8 million decrease in Adjusted unallocated corporate costs and software development, mostly attributable to a $0.7 million decrease in staff costs and a $0.3 million decrease in professional services and insurance.

Gross Profit increased by $18.2 million, or 81%, for the year ended December 31, 2024 from $22.5 million in the same period of 2023 to $40.7 million in 2024. Flight Profit increased by $16.8 million, or 40%, for the year ended December 31, 2024 from

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$42.1 million in the same period of 2023 to $58.9 million in 2024. The increase was partially driven by a 10% increase in revenue coupled with lower effective cost of revenue per flight across all of Passenger product lines (Short Distance and jet flights) compared to the prior year period, attributable to improved pricing and improved load factor (in the by-the-seat products). The increase was also driven by improvements in Medical including: (i) increased volumes; (ii) higher revenue per flight hour; (iii) mix shift to dedicated aircraft, partially driven by our acquisitions of aircraft, which generally have lower operating costs per flight hour; and (iv) mix shift to ground revenue, which is, on average, higher margin versus air. These improvements in Medical were partially offset by reduced repositioning flight hours due to positioning owned aircraft closer to our clients, resulting in improved service for our customers.

Gross Margin increased from 10.0% in the year ended December 31, 2023 to 16.3% in the same period of 2024. Flight Margin increased from 18.7% in the year ended December 31, 2023 to 23.7% in the same period of 2024, attributable to lower effective cost of revenue per flight in both Passenger and Medical flights as described above under Flight Profit.

Reconciliation of Non-GAAP Financial Measures

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

Adjusted EBITDA

Adjusted EBITDA is defined as net loss adjusted to exclude (1) depreciation and amortization, (2) stock-based compensation, (3) change in fair value of warrant liabilities, (4) interest income and expense, (5) income tax, (6) realized gains and losses on short-term investments, (7) impairment of intangible assets and (8) certain other non-recurring items (shown below) that management does not believe are indicative of ongoing Company operating performance and would impact the comparability of results between periods. The Company believes the presentation of Adjusted EBITDA and Adjusted EBITDA as a percentage of revenue are relevant and useful for investors because it allows investors to view our performance in the same manner as the primary method used by management to evaluate performance and make decisions about allocating resources.

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[[GREPCENT_TABLE]]
[["","","","","Year Ended December 31,"],["","","","","","","2024","","2023"],["","","","","","","(in thousands)"],["Net loss","","","","","","$","(27,307)","","","$","(56,076)"],["Add (deduct):"],["Depreciation and amortization","","","","","","5,962","","","7,111"],["Stock-based compensation","","","","","","19,995","","","12,501"],["Impairment of intangible assets","","","","","","5,759","","","20,753"],["Change in fair value of warrant liabilities","","","","","","850","","","(2,125)"],["Realized gain from sales of short-term investments","","","","","","\u2014","","","(8)"],["Interest income","","","","","","(7,214)","","","(8,442)"],["Income tax benefit","","","","","","(255)","","","(1,466)"],["Legal and regulatory advocacy fees (1)","","","","","","1,713","","","686"],["Executive severance costs","","","","","","140","","","447"],["SOX readiness costs","","","","","","399","","","252"],["Contingent consideration compensation (earn-out) (2)","","","","","","\u2014","","","9,734"],["M&A transaction costs","","","","","","241","","","\u2014"],["Gain on lease modification (3)","","","","","","(519)","","","\u2014"],["Restructuring costs (4)","","","","","","1,441","","","\u2014"],["Adjusted EBITDA","","","","","","$","1,205","","","$","(16,633)"],["Revenue","","","","","","$","248,693","","","$","225,180"],["Adjusted EBITDA as a percentage of revenue","","","","","","0.5","%","","(7.4)","%"]]
[[/GREPCENT_TABLE]]

(1) Includes legal advocacy fees 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. For the year ended December 31, 2024, these costs primarily related to the Drulias lawsuit (see “— Legal and Environmental” within Note 12 to the consolidated financial statements included in this Annual Report for additional information) and to the proposed restrictions at East Hampton Airport. For the year ended December 31, 2023, these costs primarily related to certain proposed restrictions at East Hampton Airport and the potential operational restrictions on large jet aircraft at Westchester Airport

(2) Represents contingent consideration in connection with the Trinity acquisition; 2023 was the last year subject to an earn-out payment.

(3) Gain from derecognition of the embedded lease following the amendment of the Aircraft Operator Agreement (see Note 6 to the consolidated financial statements included in this Annual Report for additional information); excluded from Adjusted EBITDA as a non-cash gain not indicative of ongoing operating performance or comparable between periods.

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

Flight Profit and Flight Margin

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

Gross Profit and Gross Margin

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

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Reconciliation of Gross Profit to Flight Profit

[[GREPCENT_TABLE]]
[["","","","","Year Ended December 31,"],["","","","","","","2024","","2023"],["","","","","","","(in thousands, except percentages)"],["Revenue","","","","","","$","248,693","","","$","225,180"],["Less:"],["Cost of revenue (1)","","","","","","189,774","","","183,058"],["Depreciation and amortization (2)","","","","","","3,422","","","6,361"],["Stock-based compensation","","","","","","185","","","193"],["Other (3)","","","","","","14,660","","","13,110"],["Gross Profit","","","","","","$","40,652","","","$","22,458"],["Gross Margin","","","","","","16.3","%","","10.0","%"],["Gross Profit","","","","","","$","40,652","","","$","22,458"],["Reconciling items:"],["Depreciation and amortization (2)","","","","","","3,422","","","6,361"],["Stock-based compensation","","","","","","185","","","193"],["Other (3)","","","","","","14,660","","","13,110"],["Flight Profit","","","","","","$","58,919","","","$","42,122"],["Flight Margin","","","","","","23.7","%","","18.7","%"]]
[[/GREPCENT_TABLE]]

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

(2) Real estate depreciation and intangibles amortization included within general and administrative.

(3) Other costs include credit card processing fees, direct staff costs (primarily customer facing, logistics and coordination personnel), commercial costs and establishment costs.

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Liquidity and Capital Resources

Sources of Liquidity

As of December 31, 2024 and 2023, we had total liquidity of $127.1 million and $166.1 million, respectively, consisting of cash and cash equivalents of $18.4 million and $27.9 million, respectively, and short-term investments of $108.8 million and $138.3 million, respectively. In addition, as of December 31, 2024 and 2023, we had restricted cash of $1.3 million and $1.1 million, respectively. As of December 31, 2024, $108.8 million of short-term investments consisted of securities that are traded in highly liquid markets.

With $127.1 million of total liquid funds as of December 31, 2024, we anticipate that we have sufficient funds to meet our current operational needs for at least the next 12 months from the date of filing this Annual Report.

Liquidity Requirements

As of December 31, 2024, the Company had net working capital of $138.0 million, cash and cash equivalents of $18.4 million and short-term investments of $108.8 million. The Company had net losses of $27.3 million and $56.1 million for the years ended December 31, 2024 and 2023, respectively.

In the course of our business, we have certain contractual relationships with third-party aircraft operators pursuant to which we may be contingently required to make payments in the future. As of December 31, 2024, we had commitments to purchase flights from various aircraft operators with aggregate minimum flight purchase guarantees of $5.8 million and $5.4 million for the years ending December 31, 2025 and 2026, respectively, $5.0 million and $5.4 million, respectively, of which may be cancelled by us immediately if a government authority enacts travel restrictions and $1.6 million and $0.0 million, respectively, of which could be terminated by Blade for convenience upon 60 days’ notice with the annual minimum guarantee being pro-rated as of the termination date. See “—Capacity Purchase Agreements” (“CPAs”) within Note 12 to the consolidated financial statements included in this Annual Report for additional information and for information about future periods. Additionally, the Company has operating lease obligations related to real estate and vehicles with expected annual minimum lease payments of $2.0 million and $1.8 million for the years ending December 31, 2025 and 2026, respectively. See Note 6 “Right-of-Use Asset and Operating Lease Liability” to the consolidated financial statements included in this Annual Report for additional information and for information about future periods.

We have non-cancellable commitments which primarily relate to cloud services and other items in the ordinary course of business. The amounts are determined based on the non-cancellable quantities to which we are contractually obligated. In December 2023, the Company entered into a technology service agreement with a vendor for cloud computing services where we are committed to spend $1.0 million and $1.6 million for the years ending December 31, 2025 and 2026, respectively.

On March 20, 2024, we announced that our Board of Directors had authorized a stock repurchase program, pursuant to which the Company may repurchase, from time to time, up to an aggregate of $20.0 million of the Company's common stock, exclusive of any fees, commissions or other expenses related to such repurchases. During the year ended December 31, 2024, the Company repurchased $0.2 million of common stock pursuant to this program ending with a remaining potential repurchase capacity under the program of approximately $19.8 million. No shares were repurchased in the quarter ended December 31, 2024. The timing and actual number of shares repurchased will depend on a variety of factors, including corporate and regulatory requirements, price and other market conditions and management’s determination as to the appropriate use of our cash. Our stock repurchases have been funded with cash on hand and we intend to continue funding future repurchases with existing cash.

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

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Cash Flows

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

[[GREPCENT_TABLE]]
[["","Year Ended December 31,"],["2024","","2023"],["","(in thousands)"],["Net cash used in operating activities","$","(2,519)","","","$","(32,349)"],["Net cash (used in) / provided by investing activities","(1,016)","","","17,089"],["Net cash used in financing activities","(5,759)","","","(76)"],["Effect of foreign exchange rate changes on cash balances","(80)","","","(66)"],["Net decrease in cash and cash equivalents and restricted cash","$","(9,374)","","","$","(15,402)"]]
[[/GREPCENT_TABLE]]

Cash Used In Operating Activities

For the year ended December 31, 2024, net cash used in operating activities was $2.5 million, driven by a net loss of $27.3 million and $3.0 million of cash used for working capital requirements, adjusted for non-cash items consisting of stock-based compensation expense of $19.9 million, impairment of intangible assets of $5.8 million, depreciation and amortization of $6.0 million, non-cash accretion of interest income on held-to-maturity securities of $4.0 million, loss from change in fair value of warrant liabilities of $0.9 million, deferred tax benefit of $0.3 million and gain on lease modification of $0.6 million. The $3.0 million of cash used for working capital requirements was primarily driven by a decrease in accounts payable and accrued expenses of $8.3 million, driven by the cash payment for the Trinity contingent consideration compensation in the first quarter, an increase in accounts receivable of $1.0 million (attributable to the revenue growth in the Medical segment) and a decrease in deferred revenue of $0.1 million; partially offset by a decrease in prepaid expenses and other current assets of $6.4 million (driven by the utilization of $9.3 million of prepaid deposits under CPAs with M&N Equipment, LLC as part of the purchase of seven aircraft, slightly offset by new prepayments made to operators in connection with new CPAs).

For the year ended December 31, 2023, net cash used in operating activities was $32.3 million, primarily driven by a net loss of $56.1 million and $6.7 million cash used for working capital requirements, adjusted for non-cash items consisting of impairment of intangible assets of $20.8 million, stock-based compensation expense of $12.5 million, depreciation and amortization of $7.1 million, non-cash accretion of interest income on held-to-maturity securities of $6.5 million, income from change in fair value of warrant liabilities of $2.1 million, and a deferred tax benefit of $1.5 million. The $6.7 million cash used for working capital requirements was primarily driven by an increase in accounts receivable of $10.3 million, due to the rapid growth in the Medical segment, and an increase in prepaid expenses and other current assets of $6.0 million, driven by prepayments to operators in connection with capacity purchase agreements; partially offset by an increase in accounts payable and accrued expenses of $9.0 million, driven by the accrual for the Trinity contingent consideration compensation payment and for the 2023 short term incentive plan, and an increase in lease liabilities of $0.4 million.

Cash (Used In) / Provided by Investing Activities

For the year ended December 31, 2024, net cash used in investing activities was $1.0 million, driven by $143.3 million in purchases of held-to-maturity investments; $30.9 million in purchases of property and equipment, consisting primarily of $27.1 million in the acquisition of ten aircraft and related capitalized maintenance costs, utilized by the Medical segment, with the remaining in furniture and fixtures (for new office space in Arizona used by the Medical segment), and purchase of vehicles utilized by the Medical segment for organ ground transportation; $2.2 million in consideration paid for the acquisition of CJK and $2.1 million in capitalized software development costs, offset by $177.5 million of proceeds from maturities of held-to-maturity investments.

For the year ended December 31, 2023, net cash provided by investing activities was $17.1 million, driven by $264.5 million of proceeds from maturities of held-to-maturity investments, $20.5 million of proceeds from sales of other short-term investments, partially offset by $265.8 million in purchases of held-to-maturity investments, $2.1 million in purchases of property and equipment, consisting of leasehold improvements, furniture and fixtures for lounges used by the Passenger segment, and vehicles used in generating revenue by the Medical segment.

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Cash Used In Financing Activities

For the year ended December 31, 2024, net cash used in financing activities was $5.8 million, reflecting $5.7 million cash paid for payroll tax payments on behalf of employees in exchange for shares withheld by the Company (“net share settlement”) and $0.2 million in repurchases and retirement of common stock under the share repurchase program announced March 20, 2024; partially offset by $0.2 million of proceeds from the exercise of stock options.

For the year ended December 31, 2023, net cash used in financing activities was $0.1 million, primarily reflecting $0.1 million cash paid for payroll tax payments made on behalf of employees in exchange for shares withheld by the Company (“net share settlement”), partially offset by $0.1 million of proceeds from the exercise of stock options.

Critical Accounting Estimates

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

We consider an accounting estimate to be critical if: (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.

We believe that of our significant accounting policies, which are described in the notes to the consolidated financial statements, the following accounting policies involve a greater degree of judgments, estimates and assumptions. Accordingly, these are the policies that we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. For information on the Company’s significant accounting policies and estimates refer to Note 2 “Summary of Significant Accounting Policies” and the “Use of Estimates” section of Note 1 “Business and Basis of Presentation” in the consolidated financial statements included in this Annual Report.

Valuation of Goodwill

We account for goodwill in accordance with ASC 350, “Intangibles - Goodwill and Other” (“ASC 350”). Under ASC 350, goodwill is not amortized, but instead is tested for impairment annually (in the fourth quarter) or whenever events or changes in circumstances indicate that goodwill might be impaired. Our goodwill impairment assessment is performed by reporting unit. A reporting unit is the operating segment, or a business one level below that operating segment (the component level) if discrete financial information is prepared and regularly reviewed by segment management. We make certain judgments and assumptions to determine our reporting units and in allocating shared assets and liabilities to determine the carrying values for each of our reporting units. Determination of reporting units is based on a judgmental evaluation of the level at which senior management reviews financial results, evaluates performance, and allocates resources.

We assess goodwill for impairment initially using a qualitative approach for our MediMobility and Blade Europe reporting units, which have goodwill balances of $15,540 and $25,510, respectively, as of December 31, 2024. However, should the qualitative assessment indicate potential impairment, a subsequent quantitative test must be performed.

Judgment in the assessment of qualitative factors of impairment include, among other factors: reviewing factors such as macroeconomic conditions, industry and market considerations, cost factors, entity-specific financial performance and other events, such as changes in the Company’s management, strategy and primary customer base, and factors affecting the reporting unit. To the extent we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company performs a quantitative goodwill and indefinite-lived intangible asset impairment analysis by comparing the carrying amount to the fair value of the reporting unit.

Performing a quantitative goodwill impairment test includes the determination of the fair value of a reporting unit by considering both guideline transaction multiples (a market approach) and projected discounted future cash flows (an

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income approach) and involves significant estimates and assumptions. These estimates and assumptions include, among others, revenue growth rates and operating margins used to calculate projected future cash flows, discount rates, future economic and market conditions, and the determination of appropriate revenue multiples.

As of November 30, 2024, for the Blade Europe reporting unit, a quantitative goodwill impairment test (“Step 1 test”) was performed as it was determined that it is more likely than not that the fair value of the reporting unit was less than its carrying amount. Based on our Step 1 test, which used a 50/50 allocation between the income and market approach, we determined that the fair value was greater than its respective carrying value by 5%, and therefore, no further action was necessary. Revenue growth rate, operating margins and the discount rate based on the reporting unit’s weighted average cost of capital (“WACC”) were the assumptions that were most sensitive and susceptible to change as they require significant management judgment. Specifically, the key assumptions utilized were as follows:

a.EVA introduction timeline

b.Revenue Compound Annual Growth Rate (“CAGR”) of 8.7% from the beginning of the projection period through the terminal year.

c.Operating margins projected to increase by 760 basis points in the period leading up to EVA introduction, with an additional 390 basis point expansion after EVA introduction and through the terminal year of the projection period

d.WACC of 13.0%

The Company believes the estimates and assumptions used in the calculations are reasonable. However, certain future events and circumstances, including deterioration of market conditions, higher cost of capital, a decline in actual and expected consumer demand, could result in changes to those assumptions and judgments. A revision of those assumptions could cause the fair value of the reporting unit to fall below its respective carrying value. If in future years, our reporting units’ actual results are not consistent with our estimates and assumptions used to calculate fair value, we may be required to recognize material impairments to goodwill.

Impairment of Finite-Lived Intangible Assets

The Company assesses long-lived assets for impairment in accordance with the provisions of ASC 360, Property, Plant and Equipment (“ASC 360”). Long-lived assets, except for goodwill and indefinite intangible assets, are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. If such events or changes in circumstances arise, the Company assesses the recoverability of finite-lived intangible assets by comparing the estimated undiscounted future cash flows expected to be generated by the asset group to its carrying amount. If the carrying amount exceeds the undiscounted future cash flows, an impairment loss is recognized based on the excess of the asset’s carrying value over its fair value. The recoverability assessment considers various factors, including revenue growth, operating margins, capital expenditures, and expected long-term cash flow growth rates.

Blade Europe’s finite-lived intangible assets undiscounted future cash flows exceeded the carrying value, as a result, no impairment was required, and no further fair value assessment was necessary. The key assumptions utilized were as follows:

•EVA introduction timeline

•Revenue Compound Annual Growth Rate (“CAGR”) of 8.7% from the beginning of the projection period through the terminal year.

•Operating margins projected to increase by 760 basis points in the period leading up to EVA introduction, with an additional 390 basis point expansion after EVA introduction and through the terminal year of the projection period

Operating margins for the years prior to EVA commercialization represents our estimate of the operating margins similar to the overall Blade business.

Our determination of projected cash flows are sensitive to the risk of future variances due to industry and market conditions as well as business unit execution risks. Management assesses the projected cash flows by considering factors unique to its assets, including recent operating results, business plans, economic projections, anticipated future cash flows, and other data. Projected cash flows can also be significantly impacted by the future growth opportunities for the cash generating assets as well as for the Company itself, general market and geographic sentiment.

Assumptions used in impairment testing are made at a point in time and require significant judgment; therefore, they are subject to change based on the facts and circumstances present at each annual and interim impairment test date. Additionally, these assumptions are generally interdependent and do not change in isolation. Consequently, if future results fall below our forward-looking projections for an extended period of time, the results of future impairment tests could indicate there is an impairment.

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Leases

Blade’s operating leases consist of airport and heliport terminals, offices, vehicles and aircraft leases that are embedded within certain CPAs. The accounting for leases requires the application of judgments and assumptions in the following areas:

•Determination of whether an arrangement contains a lease at inception.

•Classifying leases as either operating or finance leases.

•Estimation of the incremental borrowing rate - the Company calculates the present value of lease payments over the lease term, based on the incremental borrowing rate. Our incremental borrowing rate is an estimate based on an analysis of publicly traded debt securities of companies with credit and financial profiles similar to our own.

•Determination of lease term when a renewal option exists - some of the Company's leases include options to extend the lease term. The Company uses judgment in determining whether these options are reasonably certain to be exercised, as this determination impacts the ROU amortization period and the value of the ROU asset and the lease liability.

•Allocation of lease components in embedded leases under CPAs - for certain CPAs with third-party aircraft operators, the Company estimates the portion of the minimum guarantee that represents a lease component, requiring judgment in distinguishing between lease and non-lease components.

Changes to our assumptions regarding the allocation of lease components in embedded leases under CPAs, as well as our determination of IBR, could result in changes to the valuation of the underlying ROU asset and lease liability.

Market Risks

We are exposed to market risks in the ordinary course of business, primarily related to foreign currency risk. Blade has not, to date, been exposed to material market risks.

We are exposed to foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar (predominantly the Euro). Accordingly, changes in exchange rates may negatively affect our future revenue and other operating results as expressed in U.S. dollars. We might experience fluctuations in our net income (loss) as a result of transaction gains or (losses) related to remeasurement of our asset and liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded.