Table of Contents
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, 20222023
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.)
499 East 34th55 Hudson Yards, Street14th Floor
New York, NY
1001610001
(Address of principal executive offices)(Zip Code)
(212) 967-1009
(Registrant’s telephone number, including area code)
Securities registered under 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 fileroAccelerated filero
Non-accelerated filerxSmaller reporting companyx
Emerging growth companyx
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 2, 2022,5, 2023, there were 70,874,32073,168,346 shares of the registrant’s Common stock,Stock, $0.0001 par value per share, issued and outstanding.


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BLADE AIR MOBILITY, INC.

FORM 10-Q

TABLE OF CONTENTS
Page
40
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
\
BLADE AIR MOBILITY, INC.
Unaudited Interim Condensed Consolidated Balance Sheets
March 31, 2022 and December 31, 2021
(in thousands, except share and per share data)
March 31, 2022December 31, 2021March 31,
2023
December 31, 2022
AssetsAssetsAssets
Current assets:
Current assetsCurrent assets
Cash and cash equivalentsCash and cash equivalents$2,496 $2,595 Cash and cash equivalents$41,739 $43,296 
Restricted cashRestricted cash1,680 630 Restricted cash2,080 1,127 
Accounts receivableAccounts receivable6,019 5,548 Accounts receivable16,462 10,877 
Short-term investments (cost: March 31, 2022 - $268,702; December 31, 2021 - $280,263)266,560 279,374 
Short-term investmentsShort-term investments135,209 150,740 
Prepaid expenses and other current assetsPrepaid expenses and other current assets8,503 6,798 Prepaid expenses and other current assets13,708 12,086 
Total current assetsTotal current assets285,258 294,945 Total current assets209,198 218,126 
Non-current assets:Non-current assets:Non-current assets:
Property and equipment, netProperty and equipment, net2,333 2,045 Property and equipment, net2,445 2,037 
Investment in joint ventureInvestment in joint venture200 200 Investment in joint venture390 390 
Intangible assets, netIntangible assets, net23,670 24,421 Intangible assets, net45,399 46,365 
GoodwillGoodwill13,328 13,328 Goodwill39,890 39,445 
Operating right-of-use assetOperating right-of-use asset958 713 Operating right-of-use asset24,092 17,692 
Other non-current assetsOther non-current assets880 232 Other non-current assets1,018 970 
Total assetsTotal assets$326,627 $335,884 Total assets$322,432 $325,025 
Liabilities and Stockholders' EquityLiabilities and Stockholders' EquityLiabilities and Stockholders' Equity
Current liabilities:Current liabilities:Current liabilities:
Accounts payable and accrued expensesAccounts payable and accrued expenses$9,012 $6,369 Accounts payable and accrued expenses$11,389 $16,536 
Deferred revenueDeferred revenue6,281 5,976 Deferred revenue7,788 6,709 
Operating lease liability, currentOperating lease liability, current496 438 Operating lease liability, current4,029 3,362 
Total current liabilitiesTotal current liabilities15,789 12,783 Total current liabilities23,206 26,607 
Non-current liabilities:Non-current liabilities:Non-current liabilities:
Warrant liabilityWarrant liability28,758 31,308 Warrant liability6,517 7,083 
Operating lease liability, long-termOperating lease liability, long-term466 278 Operating lease liability, long-term20,792 14,970 
Deferred tax liabilityDeferred tax liability144 144 Deferred tax liability1,716 1,876 
Total liabilitiesTotal liabilities45,157 44,513 Total liabilities52,231 50,536 
Commitments and Contingencies (Note 10)00
Commitments and Contingencies (Note 8)Commitments and Contingencies (Note 8)
Stockholders' EquityStockholders' EquityStockholders' Equity
Preferred stock, $0.0001 par value, 2,000,000 shares authorized at March 31, 2022 and December 31, 2021. No shares issued and outstanding at March 31, 2022 and December 31, 2021.— — 
Common stock, $0.0001 par value; 400,000,000 authorized; 70,845,636 and 70,667,381 shares issued at March 31, 2022 and December 31, 2021, respectively.
Additional paid-in capital370,794 368,680 
Accumulated other comprehensive loss(1,901)(898)
Preferred stock, $0.0001 par value, 2,000,000 shares authorized at March 31, 2023 and December 31, 2022. No shares issued and outstanding at March 31, 2023 and December 31, 2022.Preferred stock, $0.0001 par value, 2,000,000 shares authorized at March 31, 2023 and December 31, 2022. No shares issued and outstanding at March 31, 2023 and December 31, 2022.— — 
Common stock, $0.0001 par value; 400,000,000 authorized; 72,498,822 and 71,660,617 shares issued at March 31, 2023 and December 31, 2022, respectively.Common stock, $0.0001 par value; 400,000,000 authorized; 72,498,822 and 71,660,617 shares issued at March 31, 2023 and December 31, 2022, respectively.
Additional paid in capitalAdditional paid in capital380,852 375,873 
Accumulated other comprehensive incomeAccumulated other comprehensive income3,212 2,287 
Accumulated deficitAccumulated deficit(87,430)(76,418)Accumulated deficit(113,870)(103,678)
Total stockholders' equityTotal stockholders' equity281,470 291,371 Total stockholders' equity270,201 274,489 
Total Liabilities and Stockholders' EquityTotal Liabilities and Stockholders' Equity$326,627 $335,884 Total Liabilities and Stockholders' Equity$322,432 $325,025 
See Notes to Unaudited Interim Condensed Consolidated Financial Statements

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BLADE AIR MOBILITY, INC.
Unaudited Interim Condensed Consolidated Statements of Operations
Three Months Ended March 31, 2022 and 2021
(in thousands, except share and per share data)
Three Months Ended March 31,
20222021
Revenue$26,630 $9,273 
Operating expenses
Cost of revenue(1)23,707 7,797 
Software development(1)835 289 
General and administrative(1)13,978 4,825 
Selling and marketing(1)1,800 587 
Total operating expenses40,320 13,498 
Loss from operations(13,690)(4,225)
Other non-operating income
Change in fair value of warrant liabilities2,550 — 
Interest income, net264 
Realized loss from sale of short term investments(136)— 
Total other non-operating income2,678 
Net loss$(11,012)$(4,221)
Net loss per share (Note 8):
Basic$(0.16)$(0.16)
Diluted$(0.16)$(0.16)
Weighted-average shares used to compute net loss per share:
Basic70,774,138 26,099,102 
Diluted70,774,138 26,099,102 
__________
Three Months Ended March 31,
20232022
Revenue$45,271 $26,630 
Operating expenses
Cost of revenue38,107 23,707 
Software development1,123 835 
General and administrative16,257 13,978 
Selling and marketing2,611 1,800 
Total operating expenses58,098 40,320 
Loss from operations(12,827)(13,690)
Other non-operating income (expense)
Interest income, net1,954 264 
Change in fair value of warrant liabilities566 2,550 
Realized loss from sales of short-term investments(81)(136)
Total other non-operating income2,439 2,678 
Loss before income taxes(10,388)(11,012)
Income tax benefit(196)— 
Net loss$(10,192)$(11,012)
Net loss per share (Note 7):
Basic$(0.14)$(0.16)
Diluted$(0.14)$(0.16)
Weighted-average number of shares outstanding:
Basic71,992,771 70,774,138 
Diluted71,992,771 70,774,138 
(1) Prior period amounts have been updated to conform to current period presentation.
See Notes to Unaudited Interim Condensed Consolidated Financial Statements

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BLADE AIR MOBILITY, INC.
Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss
Three Months Ended March 31, 2022 and 2021Income (Loss)
(in thousands)
Three Months Ended March 31,Three Months Ended March 31,
2022202120232022
Net lossNet loss$(11,012)$(4,221)Net loss$(10,192)$(11,012)
Other comprehensive income (loss):Other comprehensive income (loss):Other comprehensive income (loss):
Net unrealized investment losses(1,244)— 
Net unrealized investment income (losses) Net unrealized investment income (losses)29 (1,380)
Less: Reclassification adjustment for losses included currently in net lossLess: Reclassification adjustment for losses included currently in net loss51 136 
Foreign currency translation adjustments for the period Foreign currency translation adjustments for the period241 —  Foreign currency translation adjustments for the period845 241 
Other comprehensive income (loss)Other comprehensive income (loss)925 (1,003)
Comprehensive lossComprehensive loss$(12,015)$(4,221)Comprehensive loss$(9,267)$(12,015)

See Notes to Unaudited Interim Condensed Consolidated Financial Statements

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BLADE AIR MOBILITY, INC.
Unaudited Interim Condensed Consolidated Statements of Stockholders' Equity
Three Months Ended March 31, 2022 and 2021
(in thousands, except share data)
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated
Deficit
Total
Stockholders'
Equity
Shares Amount
Balance at January 1, 202270,667,381 $$368,680 $(898)$(76,418)$291,371 
Issuance of common stock upon exercise of stock options115,103 21 21 
Issuance of common stock upon settlement of restricted stock units65,965 
Stock-based compensation - restricted stock2,098 2,098 
Shares withheld related to net share settlement(2,813)(5)(5)
Comprehensive loss:
Net loss(11,012)(11,012)
Other comprehensive loss(1,003)(1,003)
Balance at March 31, 202270,845,636 $$370,794 (1,901)(87,430)$281,470 
Balance at January 1, 202126,069,962 $$49,492 $— $(39,499)$9,996 
Issuance of common stock upon exercise of stock options45,878 17 17 
Stock-based compensation - restricted stock1,795 1,795 
Stock-based compensation - stock options109 109 
Comprehensive loss:
Net loss(4,221)(4,221)
Balance at March 31, 202126,115,840 $$51,413 $— $(43,720)$7,696 

Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balances 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 - restricted stock— — 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)
Balances as of March 31, 202372,498,822 $7 $380,852 $3,212 $(113,870)$270,201 
Balances as of January 1,202270,667,381 $7 $368,680 $(898)$(76,418)$291,371 
Issuance of common stock upon exercise of stock options115,103 — 21 — — 21 
Issuance of common stock upon settlement of restricted stock units65,965 — — — — — 
Stock-based compensation - restricted stock— — 2,098 — — 2,098 
Shares withheld related to net share settlement(2,813)— (5)— — (5)
Other comprehensive loss— — — (1,003)— (1,003)
Net loss— — — — (11,012)(11,012)
Balances as of March 31, 202270,845,636 $7 $370,794 $(1,901)$(87,430)$281,470 

See Notes to Unaudited Interim Condensed Consolidated Financial Statements

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BLADE AIR MOBILITY, INC.
Unaudited Interim Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 2022 and 2021
(in thousands)
Three Months Ended March 31,
20232022
Cash Flows From Operating Activities:
Net loss$(10,192)$(11,012)
Adjustments to reconcile net loss to net cash and restricted cash used in operating activities:
Depreciation and amortization1,652 1,145 
Stock-based compensation3,221 2,098 
Change in fair value of warrant liabilities(566)(2,550)
Realized loss from sales of short-term investments81 136 
Realized foreign exchange (gain)/loss(5)
Accretion of interest income on held-to-maturity securities(1,386)— 
Deferred tax benefit(196)— 
Changes in operating assets and liabilities:
Prepaid expenses and other current assets(1,621)(1,705)
Accounts receivable(5,585)(465)
Other non-current assets(42)(648)
Operating right-of-use assets/lease liabilities77 
Accounts payable and accrued expenses(3,383)2,636 
Deferred revenue1,080 304 
Net cash used in operating activities(16,855)(10,065)
Cash Flows From Investing Activities:
Purchase of property and equipment(646)(437)
Purchase of short-term investments(121)(265)
Proceeds from sales of short-term investments16,000 11,699 
Purchase of held-to-maturity investments(130,145)— 
Proceeds from maturities of held-to-maturity investments131,187 — 
Net cash provided by investing activities16,275 10,997 
Cash Flows From Financing Activities:
Proceeds from the exercise of common stock options54 21 
Taxes paid related to net share settlement of equity awards(81)(5)
Net cash (used in) / provided by financing activities(27)16 
Effect of foreign exchange rate changes on cash balances
Net increase (decrease) in cash and cash equivalents and restricted cash(604)951 
Cash and cash equivalents and restricted cash - beginning44,423 3,225 
Cash and cash equivalents and restricted cash - ending$43,819 $4,176 
Reconciliation to the unaudited interim condensed consolidated balance sheets
Cash and cash equivalents$41,739 $2,496 
Restricted cash2,080 1,680 
Total$43,819 $4,176 
Non-cash investing and financing activities
New leases under ASC 842 entered into during the period$7,166 $415 
Three Months Ended March 31,
20222021
Cash Flows From Operating Activities:
Net loss$(11,012)$(4,221)
Adjustments to reconcile net loss to net cash and restricted cash used in operating activities:
Depreciation and amortization1,145 126 
Stock-based compensation2,098 1,904 
Change in fair value of warrant liabilities(2,550)— 
Realized loss from sale of short term investments136 — 
Unrealized foreign exchange gain / losses(5)— 
Changes in operating assets and liabilities:
Prepaid expenses and other current assets(1,705)(828)
Accounts receivable(465)473 
Other non-current assets(648)74 
Operating lease assets/liabilities(2)
Accounts payable and accrued expenses2,636 1,872 
Deferred revenue304 (3)
Net cash used in operating activities(10,065)(605)
Cash Flows From Investing Activities:
Purchase of property and equipment(437)(53)
Purchase of short-term investments(265)— 
Proceeds from sales of short-term investments11,699 — 
Net cash provided by (used in) investing activities10,997 (53)
Cash Flows From Financing Activities:
Proceeds from the exercise of stock options21 17 
Taxes paid related to net share settlement of equity awards(5)— 
Deferred recapitalization costs related to the merger— (1,770)
Net cash provided by (used in) financing activities16 (1,753)
Effect of foreign exchange rate changes on cash balances— 
Net increase (decrease) in cash and cash equivalents and restricted cash951 (2,411)
Cash and cash equivalents and restricted cash - beginning3,225 10,337 
Cash and cash equivalents and restricted cash - ending$4,176 $7,926 
Reconciliation to the unaudited interim condensed consolidated balance sheets
Cash and cash equivalents$2,496 $7,511 
Restricted cash1,680 415 
Total$4,176 $7,926 
Non-cash investing and financing activities
Adoption of new leases under ASC 842 entered into during the period$415 $12 


See Notes to Unaudited Interim Condensed Consolidated Financial Statements

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







Note 1 – Description of Business and BasisSummary of PresentationSignificant Accounting Policies
Description of Business
Blade Air Mobility, Inc. (“Blade” or the “Company”), headquartered in New York, New York, is a technology-powered, global air mobility platform that provides consumers with a cost effective and time efficient alternative to ground transportation for congested routes. BladeBlade’s Passenger reporting segment arranges charter and by-the-seat flights using helicopters, jets, turboprops, and amphibious seaplanes operating in various locations throughout the United States.States and abroad. Blade’s Medical reporting segment is one of the largest air medical transporters of human organs in the United States, providing end-to-end logistics for transplant centers and organ procurement organizations utilizing helicopters, jets, turboprops and ground vehicles. Blade’s platform utilizes a technology-powered,an asset-light business model. Blade providesmodel, providing transportation to its customers through a network of contracted aircraft operators. Blade does not own or operate aircraft.
On May 7, 2021 (the “Closing Date”), privately held Blade Urban Air Mobility, Inc., a Delaware corporation formed on December 22, 2014 (“Old Blade”), consummated transactions contemplated by the Agreement and Plan of Merger (the “Merger Agreement”), dated December 14, 2020, by and among Experience Investment Corp. (“EIC”), Experience Merger Sub, Inc., a wholly owned subsidiary of EIC (“Merger Sub”), and Old Blade. The Merger Agreement provided for the acquisition of Old Blade by EIC pursuant to the merger of Merger Sub with and into Old Blade (the “Merger”), with Old Blade continuing as the surviving entity and a wholly-owned subsidiary of EIC. On the Closing Date, and in connection with the closing of the Merger Agreement (the “Closing”), EIC changed its name to Blade Air Mobility, Inc. See Note 3 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2021 for additional information.
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 accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 20222023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022.2023. 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 September 30, 2021.December 31, 2022.
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 at March 31, 2023 and December 31, 2022 was $130,700 and $130,382, respectively. The market value of the held-to-maturity securities at March 31, 2023 and December 31, 2022 was $130,834 and $130,352, respectively.

On February 1,Other Short-Term Investments
Other short-term investments consist of highly-liquid investments available for sale. As of March 31, 2023, other short-term investments consisted of an available-for-sale, traded, debt securities fund, which is recorded at fair value with unrealized gains and losses reported, net of tax, in “Accumulated other comprehensive income (loss)”, unless unrealized losses are determined to be unrecoverable. Realized gains and losses on the sale of securities are determined by specific identification. The Company considers all available-for-sale securities as available to support current operational liquidity needs and, therefore, classifies all securities as current assets within short-term investments on the Company’s unaudited interim condensed consolidated balance sheets. These other short-term investments are excluded from disclosure under “fair value of financial instruments” due to the Net Asset Value practical expedient. The other short-term investments balance at March 31, 2023 and December 31, 2022 was $4,509 and $20,358, respectively. The cost of other short-term investments at March 31, 2023 and December 31, 2022 was $4,531 and $20,460, respectively.

Accounts Receivable and Allowances for Expected Credit Losses

Accounts receivable consists principally of amounts due from the Board of Directors approved a changeCompany’s MediMobility Organ Transport customers, which are large hospitals that receive terms for payment. The allowance for expected credit losses on receivables is used to present accounts receivable, net at an amount that represents the Company’s estimate of the Company’s fiscal year-end from September 30related transaction price recognized as revenue. The allowance represents an estimate of expected credit losses over the lifetime of the receivables, even if the loss is considered remote, and reflects expected recoveries of amounts previously written-off. We have determined our allowance for expected credit losses based on a specific evaluation of individual receivables and an analysis

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BLADE AIR MOBILITY, INC.
Notes to December 31. The Company’s 2022 fiscal year beganUnaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share, per share data and exchange rates)






of past default experience for remaining receivables. We have historically not experienced significant losses on January 1, 2022 and will end on Decemberour receivables. We generally do not require customers to provide collateral for purchases. During the three months ended March 31, 2022.2023 we determined that no allowance for expected uncollectible accounts was required.

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.
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BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
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, the allowance for doubtful accounts,but are not limited to, the carrying value of long-lived assets, the carryingfair value of intangible assets and goodwill, revenue recognition, contingencies, 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, and the fair value of stock options and other stock-based awards.accounts.
Reclassification
Certain amounts in prior periods have been reclassified to conform to the current period presentation.
Note 2 – Summary of Significant Accounting Policies
Revenue Recognition
The Company recognizes revenue underRecently Issued Accounting Standards Codification (“ASC”)- Adopted

On January 1, 2023, we adopted ASU 2021-08, Accounting for Contract Assets and Contract Liabilities From Contracts With Customers, or ASU 2021-08, that requires acquiring companies to apply ASC 606 Revenueto recognize and measure contract assets and contract liabilities from Contractscontracts with Customers. The core principle ofcustomers acquired in a business combination consistent with those recorded by the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods and services transferred to the customer. The following five steps are applied to achieve that core principle:
Step 1: Identify the contract with the customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the Company satisfies a performance obligation
acquiring company. The Company does not have any significant contracts with customers requiring performance beyond delivery.

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






For performance beyond delivery. To the extent we acquire additional companies in our existing lines of business, the adoption of this standard will not have a material impact on our results of operations or financial position.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The ASU changes accounting for credit losses on loans receivable and debt securities from an incurred loss methodology to an expected credit loss methodology. Among other things, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Accordingly, ASU 2016-13 requires the use of forward-looking information to form credit loss estimates. In addition, ASU 2016-13 amends the accounting for credit losses on debt securities and purchased financial assets with credit deterioration. The Company adopted ASU 2016-13 as of January 1, 2023. The company’s financial assets that are subject to the new standard are predominantly accounts receivable and short-term investments classified as held-to-maturities (e.g., U.S. Treasury obligations). The Company’s receivables consist principally of MediMobility Organ Transport customers, which are large hospitals that receive terms of 45 days or less. U.S. Treasury obligations are rated as investment grade with maturities of less than 365 days. Given our historical experience, the short duration lifetime of these financial assets and the short time horizon over which to consider expectations of future economic conditions, the company assessed that non-collection of the cost basis of these financial assets is remote. The adoption of ASU 2016-13 did not materially impact the Company’s unaudited interim condensed consolidated financial statements.

Recently Issued Accounting Pronouncements - Not Adopted

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40). The objective of this update is to simplify the accounting for convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, (“ASC 470-20”), that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC 470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives. In addition, the amendments revise the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract. This amendment also further revises the guidance in ASU 260, Earnings per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. The amendments in ASU 2020-06 are effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company does not expect the adoption of ASU 2020-06 to have a significant impact on its consolidated financial statements.
Note 2 – Revenue
Revenue Recognition
Short Distance revenue, seats or monthly or annual flight passesproducts 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 as the service is completed.

MediMobility Organ Transport and 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 charter payments are typically collected at the time of booking while before the performance of the related service. The revenue is recognized as the service is completed.

MediMobility Organ Transport paymentsproducts 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 as the service is completed.


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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)






The Company initially records flight sales in its unearned revenue, deferring revenue recognition until the travel occurs. Unearned revenue from customer credit and gift card purchases is recognized as revenue when a flight is flown or upon the expiration of the gift card. Unearned revenue from the Company’s monthly commuter pass and annual passpasses 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.
Contract liability is 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, 20222023 and December 31, 2021,2022, the Company's contract liability balance is $6,281was $7,788 and $5,976,$6,709, respectively. This balance consists of unearned revenue, prepaid monthly and annual flight passes, customer credits and gift card obligations. Unearned revenue represents principally the flight revenues received in advance of the actual flight. Customer credits represents unearned revenue for flight reservations that typically were cancelled for good reason by the customer. The customer has one year to use the credit as payment for a future flight with the Company. Gift cards represent prepayment of flight costs.flights. The Company recognizes revenue for expired customer credits and gift cards upon expiration.

The table below presents a roll forward of the contract liability balance:
Three Months Ended March 31,
20222021
Balance, beginning of period$5,976 $4,418 
Additions15,835 9,246 
Revenue recognized(15,530)(9,249)
Balance, end of period$6,281 $4,415 

Three Months Ended
March 31,
20232022
Balance, beginning of period$6,709 $5,976 
Additions13,599 15,835 
Revenue recognized(12,520)(15,530)
Balance, end of period$7,788 $6,281 
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. For the three months ended March 31, 2022, the Company recognized $2,888 of revenue that was included in the contract liability balance as of January 1, 2022. For the three months ended March 31, 2021, the Company recognized $1,341 of revenue that was included in the contract liability balance as of January 1, 2021.

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, itsthe second and third quartersquarter (ended on June 30 and September 30, respectively) financial results have reflected higher Short Distance travel demand and were better than the first and fourth quarter (ended March 31 and December 31) financial results. Historically, MediMobility Organ Transport demand has not been seasonal. Jet and Other revenue have historically been stronger in the first and fourth quarter (ended on March 31 and December 31, respectively) given that the Company’s by-the-seat jet service has operated only between November and April.
Blade operates in three key product lines of business:across two segments (see Note 5 - “Segment and Geographic Information” for further information on reportable segments):

Passenger segment
Short Distance – Consisting primarily of helicopter and amphibious seaplane flights in the United States, Canada and CanadaEurope between 10 and 100 miles in distance with prices starting at approximately $195 per seat (or, in the case of our New York City airport transfer service, as low as $95 per seat with the purchase of an annual Airport Pass for $795).distance. Flights are also available for purchase both by-the-seat and on a full aircraft charter basis. Prices per seat are presented at full dollar value and not rounded.
MediMobility Organ TransportJet and JetOther –  ConsistingConsists principally of transportation of human organs for transplant,revenues from non-medical jet charter, and, by-the-seat jet flights between New York and South Florida.Florida, revenue from brand partners for exposure to Blade fliers and certain ground transportation services.

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






Medicalsegment
OtherMediMobility Organ Transport Consists principallyConsisting of revenues from ground transportation services and brand partnersof human organs for exposure to Blade fliers.transplant and/or the medical teams supporting these services.

Disaggregated revenue by product line and segment was as follows:

Three Months Ended
March 31,
20222021
Product Line(1):
Short Distance$4,203 $1,051 
MediMobility Organ Transport and Jet22,115 7,727 
Other312 495 
Total Revenue$26,630 $9,273 

Three Months Ended
March 31,
20232022
Passenger Segment
Short Distance$10,425 $4,203 
Jet and Other(1)8,079 9,752 
Total$18,504 $13,955 
Medical Segment
MediMobility Organ Transport(1)$26,767 $12,675 
Total$26,767 $12,675 
Total Revenue$45,271 $26,630 
__________
(1) Prior period amounts have been updated to conform to current period presentation.

Note 3 – Right-of-Use Asset and Operating Lease Liability
Blade’s operating leases consist of airport and heliport terminals, offices 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 capacity purchase agreement 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 quarter ended March 31, 2023, the Company added aircraft leases that are embedded within two of our capacity purchase agreements.

One became effective in February 2023 for a three-year term ending February 14, 2026 for three aircraft (previous term was less than one year). In case of early termination by Blade, a one-year revenue guarantee will be pro-rated to the date of the termination. In addition, Blade has the right for immediate termination with no penalty if a government authority enacts travel restrictions.

A second agreement for seven aircraft was restated and amended in March 2023 for an additional two years for a total five-year term, ending March 31, 2028 (previous term was for three-years ending March 31, 2025 for six aircraft). 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 allocated 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

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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)






with flight operations. The Company determined its best estimate of the standalone value of the individual components by considering observable information from publicly available market rates.

See Note 8, “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, 2023December 31, 2022
Operating leases:
Operating right-of-use asset$24,092 $17,692 
Operating lease liability, current4,029 3,362 
Operating lease liability, long-term20,792 14,970 

As of March 31, 2023, included in the table above is $21,374, $2,332 and $19,693 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, 2022, included in the table above is $14,916, $1,748 and $13,705 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,
20232022
Lease cost:
Short-term lease cost$94 $38 
Operating lease cost467 183 
Operating lease cost - Cost of revenue990 — 
Total$1,551 $221 
Operating lease costs related to aircraft leases that are embedded within capacity purchase agreements are reported as part of Cost of Revenuerevenue.

Other information related to leases is presented below:
March 31, 2023
Weighted-average discount rate – operating lease9.00 %
Weighted-average remaining lease term – operating lease (in years)6.9

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

As of March 31, 2023, the expected annual minimum lease payments of the Company’s operating lease liabilities were as follows:
For the Year Ended December 31
Remainder of 2023$4,577 
20246,125 
20254,989 
20263,969 
20273,828 
Thereafter10,622 
Total future minimum lease payments, undiscounted34,110 
Less: Imputed interest for leases in excess of one year(9,289)
Present value of future minimum lease payments$24,821 
Note 4 – Stock-Based Compensation
Stock Option Awards
Following is a summary of stock option activities for the three months ended March 31, 2023:
OptionsWeighted
Average
Exercise Price
Weighted
Average
Grant Date
Fair Value
Weighted
Average
Remaining
Life
(years)
Intrinsic
Value
Outstanding – January 1, 20237,603,864 $0.19 $0.21 4.6$25,795 
Granted— — — 
Exercised(300,785)0.18 0.24 
Forfeited— — — 
Outstanding – March 31, 20237,303,079 $0.19 $0.21 4.3$23,312 
Exercisable as of March 31, 20237,303,079 $0.19 $0.21 4.3$23,312 
For the three months ended March 31, 2023 and 2022, the Company recorded no stock option expense. As of March 31, 2023, there are no remaining stock options subject to amortization.
Restricted Stock
During the three months ended March 31, 2023, the Company granted an aggregate of 177,389 of the Company's restricted stock units to various employees, officers, directors, consultants, and service providers under the 2021 Equity Incentive Plan. The restricted stock units have various vesting dates, ranging from vesting on the grant date to as late as four years from the date of grant.

Restricted Stock Units
Weighted Average Grant Date
Fair Value
Non-vested – January 1, 20237,466,636 $5.52 
Granted177,389 3.26 
Vested(160,237)8.09 
Forfeited(24,751)6.49 
Non-vested – March 31, 20237,459,037 $5.41 

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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)






For the three months ended March 31, 2023 and 2022, the Company recorded $3,221 and $2,098 in employee and officers restricted stock compensation expense. As of March 31, 2023, unamortized stock-based compensation costs related to restricted share arrangements was $32,285 and will be recognized over a weighted average period of 3.3 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,
20232022
Software development$168 $275 
General and administrative(1)2,636 1,723 
Selling and marketing78 100
Total stock-based compensation expense$2,882 $2,098 
________
(1) For the three months ended March 31, 2023, the Company includes a credit of $339 in connection with the settlement of the equity-based portion of Trinity’s contingent consideration that was paid in 2023 in respect of 2022 results.
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 reported segment if the segments have similar economic characteristics. The Company has identified two reporting segments - Passenger and Medical. Our CODM is our senior management team. Our senior management team regularly reviews discrete information for those two reporting 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 in the Revenue Recognition section.

The CODM evaluates the performance of the segments and allocates resources primarily based on their respective revenue, Flight Profit and Flight Margins. Flight Profit is defined as revenue less cost of revenue. Cost of revenue consists principally of flight costs paid to operators of aircraft and cars, landing fees, ROU asset amortization and internal costs incurred in generating ground transportation revenue using the Company’s owned cars. Flight Margin for a period is defined as Flight Profit for the period divided by revenue for the same period. The CODM does not evaluate operating segments or allocate resources using asset information and, accordingly, we do not report asset information by segment.


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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)






The following table reflects certain financial data of the Company’s reportable segments:
Three Months Ended
March 31,
20232022
Segment revenue
Passenger$18,504 $13,955 
Medical26,767 12,675 
Total revenue$45,271 $26,630 
Segment Flight Profit
Passenger$2,812 $689 
Medical4,352 2,234 
Total Flight Profit$7,164 $2,923 
Reconciling items:
All other operating costs(1)(19,991)(16,613)
Loss from operations$(12,827)$(13,690)
Segment net income (loss)
Passenger$(5,118)$(5,516)
Medical1,637522
Consolidated net loss from reportable segments(3,481)(4,994)
Unallocated corporate costs & software development(2)(9,346)(8,696)
Other non-operating income2,439 2,678 
Loss before income taxes$(10,388)$(11,012)
Segment Flight Margin
Passenger15.2 %4.9 %
Medical16.3 %17.6 %
Total Flight Margin15.8 %11.0 %
March 31,
2023
December 31,
2022
Goodwill
Passenger$26,562 $26,117 
Medical13,328 13,328 
Total goodwill$39,890 $39,445 
________
(1) All other operating costs consists of direct costs of service delivery, staff, selling and marketing as well as allocated staff, general and administrative expenses.
(2) Unallocated corporate costs & software development includes costs that are not directly attributable to our reportable segments. Corporate costs also include shared costs such as finance, accounting, tax, human resources, information technology, legal costs and costs of the development of our application.

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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)






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,
20232022
Revenue
United States$37,999 $24,843 
Other7,272 1,787 
Total revenue$45,271 $26,630 
March 31,
2023
December 31,
2022
Long-lived assets
United States$13,806 $7,195 
Other12,731 12,534 
Total long-lived assets$26,537 $19,729 
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. 

Income tax benefit was $196 and $0, for the three months ended March 31 2023 and 2022, respectively. The tax benefit in the 2023 period is attributable to Blade France net profits. The difference in the tax benefit in the 2023 period compared to the 2022 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. and Canada net operating losses, which management believes the Company will not be able to utilize.

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.


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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)







A reconciliation of net loss and common stock share amounts used in the computation of basic and diluted earnings per share is presented below.
Three Months Ended
March 31,
20232022
Basic and dilutive loss per common share:
Net loss attributable to Blade Air Mobility, Inc.$(10,192)$(11,012)
Total weighted-average basic common shares outstanding71,992,771 70,774,138 
Net loss per common share:
Basic and diluted loss per common share$(0.14)$(0.16)

The following table represents common stock equivalents that were excluded from the computation of diluted earnings per share for the three months ended March 31, 2023 and 2022 because the effect of their inclusion would be anti-dilutive:
Three Months Ended
March 31,
20232022
Warrants to purchase shares of common stock14,166,644 14,166,666 
Options to purchase shares of common stock7,303,079 7,969,573 
Restricted shares of common stock7,459,037 2,471,923 
Total potentially dilutive securities28,928,760 24,608,162 
Note 8 – Commitments and Contingencies
Capacity Purchase Agreements
Blade has contractual relationships with various aircraft operators to provide aircraft service. Under these Capacity Purchase Agreements (“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, 2023, the Company has a remaining unfulfilled obligation for the years ending December 31, 2023, 2024, 2025, 2026, 2027, 2028 and for each of the years ending December 31, 2029 through 2032 under agreements with various aircraft operators to purchase flights with an aggregate value of approximately $9,244, $24,654, $22,419, $20,727, $18,624, $18,624 and $8,124, respectively. The above 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. Blade has the right for immediate termination of certain agreements if a government authority enacts travel restrictions, this right is applicable to unfulfilled obligation for the years ending December 31, 2023, 2024, 2025, 2026, 2027 and 2028 with an aggregate value of approximately $184, $16,530, $14,295, $12,603, $10,500 and $10,500, respectively. In addition, obligations amounting to $11,833 and $10,500 for the years ending December 31, 2024, and for each of the years ending December 31, 2025 through 2028, respectively, could be terminated by Blade for convenience upon 30 or 60 days’ notice with the 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,

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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)






have a material adverse effect on its results of operations, financial condition or cash flows. As of March 31, 2023, 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 July 2022, Trinity Air Medical, LLC (“Trinity”), a wholly owned subsidiary of Blade Urban Air Mobility, Inc., received a federal grand jury subpoena seeking records related to the provision of transplant transportation services. Trinity is cooperating with the subpoena.
Note 9 – Warrant Liabilities
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 — Once the warrants become exercisable, 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 — Commencing ninety days after the warrants become exercisable, 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. 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.

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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)






Note 10 – Fair Value Measurements
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, 2023 and December 31, 2022, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
LevelMarch 31, 2023December 31, 2022
Warrant liabilities - Public Warrants1$4,217 $4,583 
Warrant liabilities - Private Warrants22,300 2,500 
Fair value of aggregate warrant liabilities$6,517 $7,083 
The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within “Warrant liability” on the Company’s unaudited interim condensed 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 unaudited interim condensed 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 the Closing Date 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, 2023$4,583 $2,500 $7,083 
Change in fair value of warrant liabilities
(366)(200)(566)
Fair value as of March 31, 2023$4,217 $2,300 $6,517 
Note 11 – Subsequent Events

The Company has completed an evaluation of all subsequent events through the filing of this Quarterly Report on Form 10-Q to ensure that these unaudited interim condensed consolidated financial statements include appropriate disclosure of events both recognized in the unaudited interim condensed consolidated financial statements and events which occurred but were not recognized in the unaudited interim condensed consolidated financial statements. The Company has concluded that no subsequent event has occurred that requires disclosure.

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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, 2022.
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 impact of COVID-19 and its related effects on our results of operations, financial performance or other financial metrics;
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;
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;
effects of competition;
our reliance on contractual arrangementsrelationships 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, 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;
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 “emerging growth company” and “smaller reporting company” exemptions from disclosure requirements;
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, 2022, 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 is a technology-powered, global air mobility platform committed to reducing travel friction by providing cost-effective air transportation alternatives to some of the most congested ground routes in the U.S. and abroad. Today, we predominantly use helicopters and amphibious aircraft for our passenger routes and are also one of the largest air medical transporters of human organs for transplant in the world. Our asset-light model, coupled with our exclusive passenger terminal infrastructure, is designed to facilitate a seamless transition to Electric Vertical Aircraft (“EVA” or “eVTOL”), which is expected to enable lower cost air mobility to the public 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 of transportation of human organs for transplant and/or the medical teams supporting these services.
Blade Europe Acquisition

On September 1, 2022, Blade acquired, through Blade Europe SAS, a wholly-owned French société par actions simplifiée subsidiary (“Blade Europe”), 100% of the share capital and voting rights of Héli Tickets France SAS (“Héli Tickets France”), a French société par actions simplifiée, which was then renamed “Blade France SAS” (“Blade France”) and of Helicopter Monaco SARL (“Helicopter Monaco”), a Monegasque société à responsabilité limitée, which was then renamed “Blade Monaco SARL” (“Blade Monaco”). We refer to the three European legal entities (Blade Europe, Blade France and Blade Monaco) collectively as “Blade Europe”. These acquisitions are part of Blade’s growth strategy of leveraging its asset-light model, technology and recognized brand to aggregate the best use cases for urban air mobility. The routes in Southern France, Monaco, Italy and Switzerland, meet the criteria given the geography, short distances and large addressable markets. In addition these markets have connectivity to our existing service areas where the Blade brand enjoys recognition, creating the opportunity for cross pollination between our North American and European customer base. As a result of this acquisition and an Aircraft Operator Agreement Blade Europe entered into in connection with the acquisition, Blade gained the right to act as the exclusive air charter broker and/or reseller of air transportation services to be operated and provided by the operator partners at pre-negotiated fixed hourly rates and with a minimum number of annual flight hours guaranteed to the operators by Blade. The initial term of the Aircraft Operator Agreement ends on December 31, 2032 and it will automatically renew for successive three year periods.

Seats Flown

The following table reflects the key operating metric we use to evaluate the Passenger segment:
Three Months Ended
March 31,
20232022
Seats flown – all passenger flights28,550 18,494 

We define “Seats flown — all passenger flights” 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 — all passenger flights” 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; growth in these areas is captured by “Seats flown — all passenger flights,” but has less impact on revenue, which 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 — all passenger flights” 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.

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Recent Developments — Impact of COVID-19
The COVID-19 Pandemic
COVID-19, which was declared a global health pandemic by the World Health Organization in March 2020, drove the implementation of significant government-imposed measures to prevent or reduce its spread, including travel restrictions, “shelter in place” orders, and business closures. At the onset of the pandemic, we experienced a substantial decline in the demand for our Short Distance product line due to travel restrictions that significantly reduced the number of commercial airline passengers and office closures that required many people to work from home, lowering commuter demand.
We began to see a recovery in Short Distance demand in Summer 2021 that has continued to date. However, future adverse developments related to the pandemic, such as the emergence of new viral strains that are not responsive to a vaccine, a sustained or increased reduction in business travel in favor of virtual meetings, or a decrease in demand for air travel from the public, could reduce demand for our Short Distance products and postpone our ability to launch route expansions.

Our Business Model

Blade leverages an asset-light business model: we neither own nor operate aircraft. 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 the client 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.

We typically pre-negotiate fixed hourly rates and flight times with our aircraft operators, paying only for flights actually flown, creating a predictable and flexible cost structure. Blade will sometimes provide guaranteed flight commitments to our aircraft operators.

Blade’s proprietary “customer-to-cockpit” technology stack enables us to manage fliers and organ transports across numerous simultaneous flights, coordinating multiple operators flying between terminals across our route network. We believe that this technology, which provides us with enhanced logistics capabilities and information from our fliers signaling their interest in new routes, 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 flier 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 fees.infrastructure (“vertiports”) in our existing and new markets. In the interim, we purchase offsets to counteract the carbon emissions generated by our urban air mobility services.
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 services by current fliers. We plan to continue making significant investments and implementing 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. Moreover, 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.
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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 MediMobility Organ Transport Customers evaluate our performance.

We utilize the same aircraft and aircraft operators in our Passenger segment. Historically, the combination of our Passenger and MediMobility Organ Transport demand, has been enough to incentivize operators to provide dedicated aircraft and crews for our use. However, there is no guarantee that we will continue to be able to secure dedicated aircraft at favorable rates, particularly given significant increases in demand for private jet aircraft in the United States in recent years. Recent increased demand for private jets has led to increased charter costs and more limited availability in the spot jet charter market, but has not limited our ability to maintain or increase our access to dedicated jet aircraft at fixed prices.
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. 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. 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. 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. 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.
Growth of our business will require significant investments in our infrastructure, technology, and marketing and sales efforts. Historically, cash flow from operations has not been sufficient to support these needs. If our business does not generate the level of available cash flow required to support these investments, our results of operations will be negatively affected. Further, our ability to effectively manage growth and expansion of our operations will also require us to enhance our operational systems, internal controls and infrastructure, human resources policies, and reporting systems. These enhancements will require significant capital expenditures and allocation of valuable management and employee resources.
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, manufacturers, individual operators that will purchase EVA, and pilots must receive requisite approvals from federal transportation authorities before EVA can fly passengers. No EVA aircraft are currently certified by the FAA for commercial operations in the United States, and 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
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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 has historically operated only between November and April.

Medical segment

Historically, MediMobility Organ Transport demand has not been seasonal.
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 as 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 as 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 as the service is completed.
Cost of Revenue

Cost of revenue consists of flight costs paid to operators of aircraft and cars, landing fees, ROU asset amortization and internal costs incurred in generating ground transportation revenue using the Company's owned cars.
Software Development
Software development expenses consist primarily of staff costs and stock-based compensation costs. Software development costs are expensed as incurred.
Selling and Marketing

Selling and marketing expenses consist primarily of advertising costs, staff salaries and stock-based compensation, marketing expenses, and promotion costs. Advertising costs, which are included in “Selling and marketing expenses”, are expensed as incurred. Advertising costs were $1,338 and $517 for the three months ended March 31, 2022 and 2021, respectively.

General and AdministrativeCapacity Purchase Agreements

General and administrative expenses principally include personnel costs, stock-based compensation, facility fees, credit card processing fees, and professional fees.
Stock-Based Compensation
The Company accounts for stock-based compensation in accordanceBlade has contractual relationships with ASC 718, Compensation - Stock Compensationvarious aircraft operators to provide aircraft service. Under these Capacity Purchase Agreements (“ASC 718”CPAs”). ASC 718 establishes accounting for stock-based awards exchanged for employee and consultant services. Under the provisions of ASC 718, stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the employee’s requisite service period (generally the vesting period of the equity grant).
Restricted stock awards are granted at the discretion of the Company’s Board of Directors. These awards are restricted as to the transfer of ownership and generally vest over the requisite service period.
Income Taxes

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between U.S. GAAP treatment and tax treatment of assets and liabilities using enacted tax rates in effect for the
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BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by considering taxable income in carryback years, existing taxable temporary differences, prudent and feasible tax planning strategies and estimated future taxable profits.

Each period, the Company analyzes whether it is more-likely-than-not that tax positions will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the positions. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the Company presumes that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. When differences exist between tax positions taken in a tax return and amounts meeting the more-likely-than-not threshold, the Company will record an uncertain tax position, resulting in one or more of the following: an increase in a liability for income taxes payable, a reduction of an income tax refund receivable, a reduction in a deferred tax asset, or an increase in a deferred tax liability. The Company records penalties and interest relating to uncertain tax positions as part of income tax expense. As of March 31, 2022, the Company has no unrecognized tax benefits. See Note 7pays the operator contractually agreed fees (carrier costs) for additional information.
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. See Note 8.

Cash and Cash Equivalents and Restricted Cash
operating these flights. The Company considers all highly liquid investments with a maturity of three months or less on their acquisition date as cash and cash equivalents. Restricted cash consists principally of Company funds on deposit with a financial institution, which supports a letter of credit by the financial institution in favor of the Company’s obligations to the United States Department of Transportation as well as deposits posted for collateral with certain of the Company’s vendors.
Short-Term Investments
Short-term investments consist of highly-liquid investments available for sale. As of March 31, 2022, short-term investments consisted of available-for-sale, traded, debt securities funds, whichfees are recorded at fair value with unrealized gains and losses reported, net of tax, in “Accumulated other comprehensive income (loss)”, unless unrealized losses are determined to be unrecoverable. Realized gains and losses on the sale of securities are determined by specific identification. The Company considers all available-for-sale securities as available to support current operational liquidity needs and, therefore, classifies all securities as current assets within short-term investments on the Company’s unaudited interim condensed consolidated balance sheets. These short-term investments are excluded from disclosure under “fair value of financial instruments” due to the Net Asset Value practical expedient.
Accounts Receivable
Accounts receivable consists principally of amounts due from the Company’s MediMobility Organ Transport customers, which are large hospitals that receive terms for payment. Receivables are reviewed on a regular basis for collectability. Based upon these reviews and historical collection experience, the Company determined that no allowance for uncollectible accounts was required as of March 31, 2022 and December 31, 2021.
Prepaid Expenses and Other Current Assets

Prepaid expenses include prepaid insurance, the costs of which are amortized on a straight-line basis over the related coverage periods, prepaid marketing supplies and prepayments to aircraft operators, which are expensed based upon usage or flight time.
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BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)

Property and Equipment, Net

Property and equipment are carried at cost, net of accumulated depreciation. Depreciation is computed utilizing the straight-line method over the estimated useful life of the asset. Leasehold improvements depreciation is computed over the shorter of the lease term or estimated useful life of the asset. Additions and improvements are capitalized, while repairs and maintenance are expensed as incurred.

Useful Life
(in years)
March 31, 2022December 31, 2021
Furniture and fixtures5$530 $520 
Technology equipment3435 351 
Leasehold improvementsShorter of useful life or life of lease2,715 2,512 
Vehicles5378 239 
Total property and equipment, gross4,058 3,622 
Less: Accumulated depreciation and amortization(1,725)(1,577)
Total property and equipment, net$2,333 $2,045 
For the three months ended March 31, 2022 and 2021, the Company recorded depreciation and amortization expense for property and equipment of $148 and $79, respectively.

Acquisitions
The Company accounts for acquisitions of entities or asset groups that qualify as businesses in accordance with ASC 805, “Business Combinations” (“ASC 805”). The purchase price of the acquisition is allocated to the tangible and intangible assets acquired and liabilities assumedgenerally based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recorded as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the consolidated statements of operations. See Note 4 to the consolidated financial statements included in the Company’s Annual Report on Form 10-Kfixed hourly rates for the year ended September 30, 2021 for additional information.

Joint Venture
Investments in joint arrangements are classified as joint ventures. Joint ventures are accounted for using the equity method. When the Company’s investment in the joint venture does not qualify for accounting under the equity method because the Company does not have sufficient control or influence, then, except as provided for below, the investment in the joint venture would be accounted for at fair value.
Specifically, ASC 321-10-35-2 states, in part, that an entity may measure an equity security without a readily determinable fair value that does not qualify for the practical expedient to estimate fair value in accordance with paragraph 820-10-35-59 at its cost minus impairment, if any. As such, Blade has recorded its investment in the joint venture at cost less impairment, if any. See Note 3 for additional information.

Intangibles Assets, Net
The Company has finite-lived and indefinite-lived intangible assets, including goodwill. Finite-lived intangible assets are amortized over their estimated useful lives. Goodwill and indefinite-lived intangible assets are not amortized but are reviewed for impairment on an annual basis, or more frequently if events or circumstances indicate that the asset may be impaired. Research and development costs are expensed as incurred. Following initial recognition of the finite-lived intangible asset, the asset is carried at cost less any accumulated amortization. Amortization of the asset begins when the asset is available for use. Amortization is recorded in general and administrative expenses on the Company’s consolidated statement of operations. See Note 4 for additional information.
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BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)

Impairment of Long-Lived Assets
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. Impairment expense is recognized to the extent an asset’s expected undiscounted future cash flows are less than the asset’s carrying amount. There were no impairment charges during the three months ended March 31, 2022 and 2021.

Goodwill
In testing goodwill for impairment, the Company has the option to begin with a qualitative assessment, commonly referred to as “Step 0”, to determine whether it is more likely than not that the fair value of a reporting unit containing goodwill is less than its carrying value. This qualitative assessment may include, but is not limited to, 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. If the Company determines 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 impairment analysisflight time multiplied by comparing the carrying amount to the fair value of the reporting unit. If the carrying amount exceeds the fair value, goodwill will be written down to the fair value and recorded as impairment expense in the consolidated statements of operations. The Company performs its impairment testing annually and when circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. There were no impairment charges during the three months ended March 31, 2022 and 2021.

Leases
Leases are recorded on the balance sheet as “right-of-use” assets and lease liabilities. Leases are classified as either operating or finance leases and lease expense is recognized within “General and administrative expenses.” As a lessee, for operating leases, total lease expense is recognized using a straight-line method. Finance leases are treated as the purchase of an asset on a financing basis. See Note 5 for additional information.

Warrant Liability
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent, quarterly, period-end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance and each balance sheet date thereafter. The Company accounts for the warrants issued in connection with its Initial Public Offering in accordance with the guidance contained in ASC 815-40-15-7D, under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the warrants as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s consolidated statement of operations. See Notes 11 and 12 for additional information.
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 ofhours flown. Under these deposits.
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BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
Major Customers
For the three months ended March 31, 2022 and 2021, there was no single customer that generated 10% or more of the Company’s revenue.
Most of the Company’s Short Distance and Jet customers remit payment in advance of the date of the flight. Accounts receivable consists principally of amounts due from the Company’s MediMobility Organ Transport customers, which are large hospitals that receive terms for payment, along with receivables from credit card processors. One customer accounted for 10% of the Company’s accounts receivables as of March 31, 2022 and no customer accounted for more than 10% of Company’s outstanding accounts receivable as of December 31, 2021.
Major Vendors
For the three months ended March 31, 2022, there were two operating vendors that accounted for 14% and 11%, respectively of the Company’s purchases from operating vendors.No operating vendor accounted for 10% or more of the Company’s purchases from operating vendors for the three months ended March 31, 2021.
One vendor accounted for 15% of the Company’s outstanding accounts payable as of March 31, 2022. One vendor accounted for 13% of the Company’s outstanding accounts payable as of December 31, 2021.
Recently Issued Accounting Pronouncements - Adopted
In December 2019, FASB issued ASU 2019-12, Simplification of Income Taxes (Topic 740) Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for public companies for annual periods beginning after December 15, 2020, including interim periods within those fiscal years. The adoption of the ASU did not have a significant impact on the Company’s consolidated financial statements.
Recently Issued Accounting Pronouncements - Not Adopted
In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40). The objective of this update is to simplify the accounting for convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, (“ASC 470-20”), that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC 470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives. In addition, the amendments revise the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract. This amendment also further revises the guidance in ASU 260, Earnings per Share, to require entities to calculate diluted EPS for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. The amendments in ASU 2020-06 are effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company does not expect the adoption of ASU 2020-06 to have a significant impact on its consolidated financial statements.
Note 3 – Investment in Joint Venture
On March 24, 2019, and as amended on February 25, 2020, the Company entered into a joint venture agreement and a license agreement (the “First Amended Joint Venture and License Agreements”) with Hunch Ventures and Investments Private Limited, a private limited company incorporated under the laws of India (“Hunch”) and FlyBlade India Private Limited, a company incorporated and validly existing under the provisions of the Companies Act, 2013 (“FlyBlade India”), whereby the Company and Hunch initially invested $200 for 10% interest and $1,800 for 90% interest, respectively, for
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BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Consolidated Financial Statements
(amounts in thousands, except share and per share data)

undertaking the business of FlyBlade India. Subsequently, upon the issuance of additional shares to Hunch in exchange for additional investment by Hunch, the Company’s interest fell below 10%. Pursuant to the First Amended Joint Venture and License Agreements, the Company and Hunch agreed to establish FlyBlade India as a joint venture and support it in carrying on the business operations. The Company agreed to provide the licensed IP support related to the software developed for short distance aviation services along with its trademarks in exchange for quarterly royalty payments of 4% of Gross Revenue for the period where Gross Revenue was up to $10,000 in a calendar year, quarterly royalty payments of 3% on Gross Revenue in excess of $10,000 and up to $40,000 in a calendar year, and quarterly royalty payments of 1.5% on Gross Revenue exceeding $40,000 (collectively, the Royalties) in a calendar year. In addition to the Royalties, the Company could receive 3% of FlyBlade India’s profits before tax in each year that FlyBlade India attained a minimum of $3,500 in annual profits before income tax. Hunch agreed to provide support in carrying out the day to day operations, including the implementation of the business plan and hiring of personnel, ensuring compliance with local requirements and assisting with legal arrangements as needed by the business. For the three months ended March 31, 2022 and 2021, the Company recorded royalty revenue of $12 and $19, respectively, under this arrangement.
In accordance with the First Amended Joint Venture and License Agreements, FlyBlade India was permitted to have a total of 5 directors, 3 of which were permitted to be appointed by Hunch and provided that Blade held at least a 10% interest, a single director was permitted to be appointed by the Company. Based upon Blade having less than ten percent (10)% interest on March 31, 2022, Blade held no board seat and lacked the power to appoint members of the FlyBlade India executive management team. As such,CPAs, the Company is viewed as having minimal influencealso responsible for landing fees and control over FlyBlade India.
The Company has recordedother costs, which are either passed through by the investment at cost less impairment if any. Based upon a qualitative assessment,operator to the Company has determined thatwithout any markup or directly incurred by the investment should not be impaired. Qualitative considerations included an evaluation of the COVID-19 pandemic delays to the start-up of flight operations in India. Both Hunch and Blade remain committed to the venture and discussions are underway with third parties to raise the next round of equity capital for the joint venture. As such, no impairment was warranted as of March 31, 2022.Company.
As of March 31, 2022 and2023, the Company has a remaining unfulfilled obligation for the years ending December 31, 2021, other non-current assets included amounts due from Blade India of $1322023, 2024, 2025, 2026, 2027, 2028 and $120, respectively.
Note 4 – Intangible Assets
The following table presents information about the Company's intangible assets as of:
March 31, 2022December 31, 2021
Estimated Useful Life
Gross
Carrying
Amount
Accumulated
Amortization

 
Net
Gross
Carrying
Amount

Accumulated
Amortization

Net
Exclusive rights to Helijet’s scheduled passenger routes in Canada5 years$12,617 $(841)$11,776 $12,357 $(206)$12,151 
Customer list5-10 years11,542 (1,270)10,272 11,542 (957)10,585 
Domain nameIndefinite504 — 504 504 — 504 
Trademarks6-10 years1,006 (93)913 1,006 (51)955 
Developed technology3 years250 (45)205 250 (24)226 
Total$25,919 $(2,249)$23,670 $25,659 $(1,238)$24,421 
For the three months ended March 31, 2022 and 2021, amortization of its finite-lived intangible assets was $997 and $47, respectively.
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BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
As of March 31, 2022, the estimated amortization expense of its finite-lived intangible assets for each of the next five years areending December 31, 2029 through 2032 under agreements with various aircraft operators to purchase flights with an aggregate value of approximately $9,244, $24,654, $22,419, $20,727, $18,624, $18,624 and $8,124, respectively. The above remaining unfulfilled obligation includes amounts within operating lease liability related to aircraft leases embedded within our capacity purchase agreements as follows:

For the Year Ended December 31,
2022 (nine months)$3,017 
20233,938 
20243,810 
20253,751 
20263,751 
discussed in Note 53 – Right-of-Use Asset and Operating Lease Liability
The Company has entered into operating leases consisting principally of its airport and heliport terminals.
At the inception of a contract, the Company will assess whether the contract is, or contains, a lease. The Company's assessment is based on: (i) whether the contract involves the use of a distinct identified asset, (ii) whether the Company obtained the right to substantially all the economic benefit from the use of the asset throughout the period, and (iii) whether the CompanyLiability. Blade has the right for immediate termination of certain agreements if a government authority enacts travel restrictions, this right is applicable to directunfulfilled obligation for the useyears ending December 31, 2023, 2024, 2025, 2026, 2027 and 2028 with an aggregate value of approximately $184, $16,530, $14,295, $12,603, $10,500 and $10,500, respectively. In addition, obligations amounting to $11,833 and $10,500 for the years ending December 31, 2024, and for each of the asset.years ending December 31, 2025 through 2028, respectively, could be terminated by Blade for convenience upon 30 or 60 days’ notice with the annual minimum guarantee being pro-rated as of the termination date.
The Company generally uses its incremental borrowing rate as the discount rate for leases, unless an interest rate is implicitly statedLegal and Environmental
From time to time, we may be a party to litigation that arises in the lease. The Company’s incremental borrowing rate used for all leases under ASC 842 was 5.00%,ordinary course of business. Other than described below, we do not have any pending litigation that, separately or in the rateaggregate, would, in the opinion of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The lease term for the Company’s leases include the noncancellable period of the lease plus any additional periods covered by either a Company option to extend the lease that the Company is reasonably certain to exercise, or an option to extend the lease controlled by the lessor. ROU assets, once recorded, are reviewed for impairment.
Lease expense for operating leases consists of the lease payments plus any initial direct costs and is recognized on a straight-line basis over the lease term.
Balance sheet information related to the Company’s leases is presented below:
Operating leases:March 31, 2022December 31, 2021
Operating right-of-use asset$958 $713 
Operating lease liability, current496 438 
Operating lease liability, long term466 278 
The following provides details of the Company’s lease expense:
Three Months Ended March 31,
Lease cost:20222021
Short-term lease cost$38 $12 
Operating lease cost183 115 
Total$221 $127 
Other information related to leases is presented below:
March 31, 2022
Weighted-average discount rate – operating lease5.00 %
Weighted-average remaining lease term – operating lease (in months)23
management,
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BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Consolidated Financial Statements
(amounts in thousands, except share and per share data)

As of March 31, 2022, the expected annual minimum lease payments of the Company’s operating lease liabilities and other short-term leases were as follows:
For the Year Ended December 31,
Remainder of 2022$413 
2023468 
2024103 
202528 
Total future minimum lease payments, undiscounted1,012 
Less: Imputed interest for leases in excess of one year(50)
Present value of future minimum lease payments$962 
Note 6 – Stock-Based Compensation
Stock Option Awards
Following is a summary of stock option activities for the three months ended March 31, 2022:
OptionsWeighted
Average
Exercise Price
Weighted
Average
Grant Date
Fair Value
Weighted
Average
Remaining
Life
(years)
Intrinsic
Value
Outstanding – January 1, 20228,084,676 $0.19 $0.21 5.6$69,875 
Granted— — — 
Exercised(115,103)0.18 0.34 
Forfeited— — — 
Outstanding – March 31, 20227,969,573 $0.19 $0.21 5.3$67,126 
Exercisable as of March 31, 20227,969,573 $0.19 $0.21 5.3$67,126 
For the three months ended March 31, 2022 and 2021, the Company recorded $0 and $109, respectively, in stock option expense. The fair value of stock options is amortized on a straight-line basis over the requisite service periods of the respective awards. As of March 31, 2022, $0 of stock options remain subject to amortization.
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BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share, and per share data)
Restricted Stock
During the three months ended March 31, 2022, the Company granted an aggregate of 150,556 of the Company's restricted stock units to various employees, officers, directors, consultants,data and service providers under the 2021 Equity Incentive Plan. The restricted stock units have various vesting dates, ranging from vesting on the grant date to as late as four years from the date of grant.


Restricted Stock Units
Weighted Average Grant Date
Fair Value
Non-vested – January 1, 20222,373,523 $8.22 
Granted150,556 7.21 
Vested(41,340)7.61 
Forfeited(10,816)8.67 
Non-vested – March 31, 20222,471,923 $8.20 
For the three months ended March 31, 2022 and 2021, the Company recorded $2,098 and $1,795 in employee and officers restricted stock compensation expense. As of March 31, 2022, unamortized stock-based compensation costs related to restricted share arrangements was $15,128 and will be recognized over a weighted average period of 2.62 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,
20222021
Software development$275 $71 
General and administrative1,723 1,833 
Selling and marketing100 
Total stock-based compensation expense$2,098 $1,904 
Note 7 – Income Taxes

The Company has not recorded tax benefits on the loss before income taxes due to a full valuation allowance that offsets potential deferred tax assets resulting from net operating loss carry forwards, reflecting the inability to demonstrate the realizability of such loss carry forwards.

As of March 31, 2022, the Company has a net deferred tax liability, due to what is referred to as a “naked credit.” The naked credit exists when a deferred tax liability can only be offset up to 80% by NOLs generated in tax years beginning in 2018 and beyond, as well as NOLs available after consideration of IRC Section 382 limitation. The remaining portion that cannot be used remains as a liability. In future years, if the deferred tax assets are determined by management to be “more likely than not” to be realized, the recognized tax benefits relating to the reversal of the valuation allowance as of March 31, 2022 will be recorded. The Company will continue to assess and evaluate strategies that will enable the deferred tax asset, or portion thereof, to be utilized, and will reduce the valuation allowance appropriately as such time when it is determined that the “more likely than not” criteria is satisfied.
Note 8 – Earnings Per Share
A reconciliation of net loss and common stock share amounts used in the computation of basic and diluted earnings per share is presented below.exchange rates)






have a material adverse effect on its results of operations, financial condition or cash flows. As of March 31, 2023, 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 July 2022, Trinity Air Medical, LLC (“Trinity”), a wholly owned subsidiary of Blade Urban Air Mobility, Inc., received a federal grand jury subpoena seeking records related to the provision of transplant transportation services. Trinity is cooperating with the subpoena.
Note 9 – Warrant Liabilities
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 — Once the warrants become exercisable, 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 — Commencing ninety days after the warrants become exercisable, 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. 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.

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


Three Months Ended
March 31,
20222021
Basic and dilutive loss per common share:
Net loss attributable to Blade Air Mobility, Inc.$(11,012)$(4,221)
Total weighted-average basic and dilutive common shares outstanding70,774,138 26,099,102 
Net loss per common share:
Basic and dilutive loss per common share$(0.16)$(0.16)





Note 10 – Fair Value Measurements
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, 2023 and December 31, 2022, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
LevelMarch 31, 2023December 31, 2022
Warrant liabilities - Public Warrants1$4,217 $4,583 
Warrant liabilities - Private Warrants22,300 2,500 
Fair value of aggregate warrant liabilities$6,517 $7,083 
The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within “Warrant liability” on the Company’s unaudited interim condensed 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 unaudited interim condensed 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 the Closing Date 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, 2023$4,583 $2,500 $7,083 
Change in fair value of warrant liabilities
(366)(200)(566)
Fair value as of March 31, 2023$4,217 $2,300 $6,517 
Note 11 – Subsequent Events

The Company has completed an evaluation of all subsequent events through the filing of this Quarterly Report on Form 10-Q to ensure that these unaudited interim condensed consolidated financial statements include appropriate disclosure of events both recognized in the unaudited interim condensed consolidated financial statements and events which occurred but were not recognized in the unaudited interim condensed consolidated financial statements. The Company has concluded that no subsequent event has occurred that requires disclosure.

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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, 2022.
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 impact of COVID-19 and its related effects on our results of operations, financial performance or other financial metrics;
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;
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;
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, 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;
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 “emerging growth company” and “smaller reporting company” exemptions from disclosure requirements;
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, 2022, 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 is a technology-powered, global air mobility platform committed to reducing travel friction by providing cost-effective air transportation alternatives to some of the most congested ground routes in the U.S. and abroad. Today, we predominantly use helicopters and amphibious aircraft for our passenger routes and are also one of the largest air medical transporters of human organs for transplant in the world. Our asset-light model, coupled with our exclusive passenger terminal infrastructure, is designed to facilitate a seamless transition to Electric Vertical Aircraft (“EVA” or “eVTOL”), which is expected to enable lower cost air mobility to the public 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 of transportation of human organs for transplant and/or the medical teams supporting these services.
Blade Europe Acquisition

On September 1, 2022, Blade acquired, through Blade Europe SAS, a wholly-owned French société par actions simplifiée subsidiary (“Blade Europe”), 100% of the share capital and voting rights of Héli Tickets France SAS (“Héli Tickets France”), a French société par actions simplifiée, which was then renamed “Blade France SAS” (“Blade France”) and of Helicopter Monaco SARL (“Helicopter Monaco”), a Monegasque société à responsabilité limitée, which was then renamed “Blade Monaco SARL” (“Blade Monaco”). We refer to the three European legal entities (Blade Europe, Blade France and Blade Monaco) collectively as “Blade Europe”. These acquisitions are part of Blade’s growth strategy of leveraging its asset-light model, technology and recognized brand to aggregate the best use cases for urban air mobility. The routes in Southern France, Monaco, Italy and Switzerland, meet the criteria given the geography, short distances and large addressable markets. In addition these markets have connectivity to our existing service areas where the Blade brand enjoys recognition, creating the opportunity for cross pollination between our North American and European customer base. As a result of this acquisition and an Aircraft Operator Agreement Blade Europe entered into in connection with the acquisition, Blade gained the right to act as the exclusive air charter broker and/or reseller of air transportation services to be operated and provided by the operator partners at pre-negotiated fixed hourly rates and with a minimum number of annual flight hours guaranteed to the operators by Blade. The initial term of the Aircraft Operator Agreement ends on December 31, 2032 and it will automatically renew for successive three year periods.

Seats Flown

The following table represents common stock equivalentsreflects the key operating metric we use to evaluate the Passenger segment:
Three Months Ended
March 31,
20232022
Seats flown – all passenger flights28,550 18,494 

We define “Seats flown — all passenger flights” 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 were excluded“Seats flown — all passenger flights” 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; growth in these areas is captured by “Seats flown — all passenger flights,” but has less impact on revenue, which 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 — all passenger flights” 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.

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Recent Developments — Impact of COVID-19
The COVID-19 Pandemic
COVID-19, which was declared a global health pandemic by the World Health Organization in March 2020, drove the implementation of significant government-imposed measures to prevent or reduce its spread, including travel restrictions, “shelter in place” orders, and business closures. At the onset of the pandemic, we experienced a substantial decline in the demand for our Short Distance product line due to travel restrictions that significantly reduced the number of commercial airline passengers and office closures that required many people to work from home, lowering commuter demand.
We began to see a recovery in Short Distance demand in Summer 2021 that has continued to date. However, future adverse developments related to the pandemic, such as the emergence of new viral strains that are not responsive to a vaccine, a sustained or increased reduction in business travel in favor of virtual meetings, or a decrease in demand for air travel from the computationpublic, could reduce demand for our Short Distance products and postpone our ability to launch route expansions.

Our Business Model

Blade leverages an asset-light business model: we neither own nor operate aircraft. Pilots, maintenance, hangar, insurance, and fuel are all costs borne by our network of diluted earnings per shareoperators, 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 the client 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.

We typically pre-negotiate fixed hourly rates and flight times with our aircraft operators, paying only for flights actually flown, creating a predictable and flexible cost structure. Blade will sometimes provide guaranteed flight commitments to our aircraft operators.

Blade’s proprietary “customer-to-cockpit” technology stack enables us to manage fliers and organ transports across numerous simultaneous flights, coordinating multiple operators flying between terminals across our route network. We believe that this technology, which provides us with enhanced logistics capabilities and information from our fliers signaling their interest in new routes, 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 flier 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 three monthsdevelopment of new, vertical landing infrastructure (“vertiports”) in our existing and new markets. In the interim, we purchase offsets to counteract the carbon emissions generated by our urban air mobility services.
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 services by current fliers. We plan to continue making significant investments and implementing 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. Moreover, 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.
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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 MediMobility Organ Transport Customers evaluate our performance.

We utilize the same aircraft and aircraft operators in our Passenger segment. Historically, the combination of our Passenger and MediMobility Organ Transport demand, has been enough to incentivize operators to provide dedicated aircraft and crews for our use. However, there is no guarantee that we will continue to be able to secure dedicated aircraft at favorable rates, particularly given significant increases in demand for private jet aircraft in the United States in recent years. Recent increased demand for private jets has led to increased charter costs and more limited availability in the spot jet charter market, but has not limited our ability to maintain or increase our access to dedicated jet aircraft at fixed prices.
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. 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. 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. 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. 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.
Growth of our business will require significant investments in our infrastructure, technology, and marketing and sales efforts. Historically, cash flow from operations has not been sufficient to support these needs. If our business does not generate the level of available cash flow required to support these investments, our results of operations will be negatively affected. Further, our ability to effectively manage growth and expansion of our operations will also require us to enhance our operational systems, internal controls and infrastructure, human resources policies, and reporting systems. These enhancements will require significant capital expenditures and allocation of valuable management and employee resources.
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, manufacturers, individual operators that will purchase EVA, and pilots must receive requisite approvals from federal transportation authorities before EVA can fly passengers. No EVA aircraft are currently certified by the FAA for commercial operations in the United States, and 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
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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 2022(Q1) and 2021, becauseDecember 31 (Q4).

Jet and Other revenue has historically been stronger in the effect of their inclusion would be anti-dilutive:first and fourth quarter (Q1 and Q4) given that our by-the-seat jet service has historically operated only between November and April.

March 31,
20222021
Warrants to purchase shares of common stock14,166,666 — 
Options to purchase shares of common stock7,969,573 9,699,468 
Restricted shares of common stock2,471,923 — 
Total potentially dilutive securities24,608,162 9,699,468 

Medical segment

Historically, MediMobility Organ Transport demand has not been seasonal.
Note 9 – Related Party Transactions
The Company contracted for certain air charter services with Underhill, a related party up to April 2021. The rates charged by Underhill for these air charter services are comparable to those that could be obtained in an arm’s-length transaction with an unrelated third party. Through January 20, 2021, Melissa Tomkiel,Key Components of the Company’s PresidentResults of Operations
Revenue
Short Distance products are typically purchased using the Blade App and General Counsel, had a 20% interest in Underhill. On January 23, 2021, Ms. Tomkielpaid for principally via credit card transactions, wire, check, customer credit, and Underhill entered into an agreement under which one half of Ms. Tomkiel’s interest was immediately transferred back to Underhill and under which pursuant to the satisfaction of certain conditionsgift cards, with payments principally collected by Underhill, Ms. Tomkiel’s interest would be fully transferred to Underhill. On April 8, 2021, those conditions were satisfied and Ms. Tomkiel’s remaining interest was transferred to Underhill.
For the three months ended March 31, 2021, the Company in advance of the performance of related services. The revenue is recognized as the service is completed.

Jet products are typically purchased through our Flier Relations associates and our app and are paid Underhill approximately $312 for air charter services.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 as the service is completed.

Note 10 – CommitmentsMediMobility Organ Transport products are typically purchased through our medical logistics coordinators and Contingenciesare 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 as the service is completed.
Cost of Revenue

Cost of revenue consists of flight costs paid to operators of aircraft and cars, landing fees, ROU asset amortization and internal costs incurred in generating ground transportation revenue using the Company's owned cars.
Software Development
Software development expenses consist primarily of staff costs and stock-based compensation costs. Software development costs are expensed as incurred.
Capacity Purchase Agreements
Blade has contractual relationships with various aircraft operators to provide aircraft service. Under these Capacity Purchase Agreements (“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, 2022,2023, the Company has a remaining unfulfilled obligation for the years ending December 31, 2022, 2023, 2024, 2025, 2026, 2027, 2028 and 2024for each of the years ending December 31, 2029 through 2032 under agreements with various aircraft operators to purchase flights with an aggregate value of approximately $4,075, $7,989$9,244, $24,654, $22,419, $20,727, $18,624, $18,624 and $1,128,$8,124, respectively. The above 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. Blade has the right for immediate termination of certain agreements if a government authority enacts travel restrictions, this right is applicable to unfulfilled obligation for the years ending December 31, 2022, 2023, 2024, 2025, 2026, 2027 and 20242028 with an aggregate value of approximately $1,942, $1,128$184, $16,530, $14,295, $12,603, $10,500 and $1,128,$10,500, respectively. In addition, obligations amounting to $6,861$11,833 and $10,500 for the yearyears ending December 31, 20232024, and for each of the years ending December 31, 2025 through 2028, respectively, could be terminated by Blade for convenience upon 30 or 60 days’ notice.

See also Note 14 - Subsequent Events for details on a CPA amended in April 2022.
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BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
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,

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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)






have a material adverse effect on its results of operations, financial condition or cash flows. As of March 31, 2022,2023, 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.

On April 1, 2021, Shoreline Aviation, Inc. (SAI) filed an Amended Complaint in the United States District Court for the Eastern DistrictIn July 2022, Trinity Air Medical, LLC (“Trinity”), a wholly owned subsidiary of New York naming Cynthia L. Herbst, Sound Aircraft Flight Enterprises, Inc (SAFE)., Ryan A. Pilla, Blade Urban Air Mobility, Inc., Robert Wiesenthal and Melissa Tomkiel as defendants. The casereceived a federal grand jury subpoena seeking records related to the provision of transplant transportation services. Trinity is captioned Shoreline Aviation, Inc. v. Sound Aircraft Flight Enterprises, Inc. et al., No. 2:20-cv-02161-JMA-SIL (E.D.N.Y.). The complaint alleged, among other things, claims of misappropriation, violation ofcooperating with the Defend Trade Secrets Act, unfair competition, tortious interference with business relations, constructive trust, tortious interference with contract, and aiding and abetting breach of fiduciary duty against Blade, Robert Wiesenthal and Melissa Tomkiel (together the “Blade Defendants”).
On March 16, 2022, SAI and the Blade Defendants filed a Joint Stipulation and Order of Dismissal with Prejudice in the Court, in which, SAI and the Blade Defendants stipulated and agreed that pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii), all of SAI’s claims against the Blade Defendants were dismissed with prejudice. The Blade Defendants expressly denied any wrongdoing and did not admit any liability.subpoena.
Note 119Warrant Liabilities
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, 20252026 or earlier upon redemption or liquidation.
The Company will not be obligated to deliver any shares of common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable, and the Company will not be obligated to issue any shares of common stock upon exercise of a warrant unless common stock, issuable upon such warrant exercise, has been registered, qualified, or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. On June 7, 2021, the Company’s Form S-1 registering the shares issuable upon exercise of the warrants was declared effective by the SEC and on January 27, 2022 it was amended by post-effective amendment.
Redemptions of Warrants for Cash — Once the warrants become exercisable, 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.
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
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BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
Redemption of Warrants for Shares of Common Stock — Commencing ninety days after the warrants become exercisable, 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. 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.

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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)






Note 1210 – Fair Value Measurements
The Company follows the guidance in 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 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.
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BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
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, 20222023 and December 31, 2021,2022, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
LevelMarch 31, 2022December 31, 2021LevelMarch 31, 2023December 31, 2022
Warrant liabilities - Public WarrantsWarrant liabilities - Public Warrants1$18,608 $20,258 Warrant liabilities - Public Warrants1$4,217 $4,583 
Warrant liabilities - Private WarrantsWarrant liabilities - Private Warrants210,150 11,050 Warrant liabilities - Private Warrants22,300 2,500 
Fair value of aggregate warrant liabilitiesFair value of aggregate warrant liabilities$28,758 $31,308 Fair value of aggregate warrant liabilities$6,517 $7,083 
The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within “Warrant liability” on the Company’s unaudited interim condensed 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 unaudited interim condensed consolidated statements of operations.
The Public Warrants are considered part of levelLevel 1 of the fair value hierarchy, as those securities are traded on an active public market. At the Closing Date and at March 31, 2022,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, 2022$20,258 $11,050 $31,308 
Change in fair value of warrant liabilities(1,650)(900)(2,550)
Fair value as of March 31, 2022$18,608 $10,150 $28,758 
Public
Warrants
Private
Placement
Warrants
Total Warrant
Liability
Fair value as of January 1, 2023$4,583 $2,500 $7,083 
Change in fair value of warrant liabilities
(366)(200)(566)
Fair value as of March 31, 2023$4,217 $2,300 $6,517 
Note 13 – COVID-19 Risks and Uncertainties
COVID-19, which was declared a global health pandemic by the World Health Organization in March 2020, has driven the implementation and continuation of significant government-imposed measures to prevent or reduce its spread, including travel restrictions, “shelter in place” orders, and business closures. We experienced a substantial decline in the demand for some of our passenger services due to travel restrictions that significantly reduced the number of commercial airline passengers and office closures that required many people to work from home, lowering commuter demand.
As a result of this decline, we paused our New York airport service from March 2020 through June 2021. Additionally, we significantly reduced the number of Northeast commuter flights we offered in the typically high-demand summer season during 2020. However, we began to see a recovery in the Northeast commuter demand in Summer 2021. Despite the reduction in volume, our cost of revenue on a per flight basis for both 2020 and 2021 remained generally consistent compared to 2019 for our by-the-seat routes. Despite the decline in our Short Distance business, we have seen increased demand for our MediMobility Organ Transport and Jet services during the pandemic. We implemented new measures to focus on the personal safety of our air and ground passengers during the pandemic, which did not materially increase our costs.
On April 8, 2020, we received a loan in the principal amount of approximately $1,200 through the Paycheck Protection Program under the CARES Act, which we used to help sustain our employee payroll costs and rent. On May 7, 2021, we repaid the PPP Loan in full.
While the ultimate impact of the current COVID-19 pandemic is highly uncertain and subject to change, we were able to resume our New York by-the-seat airport flights on June 1, 2021, beginning with service between Manhattan and JFK Airport and later adding Newark Airport. Additionally, we have seen recovering demand on our other short distance routes.
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BLADE AIR MOBILITY, INC.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(amounts in thousands, except share and per share data)
However, adverse developments related to the pandemic, such as the emergence of new viral strains that are not responsive to the vaccine, a reduction in business travel in favor of virtual meetings, or a continued lack of demand for air travel from the public, could slow the recovery of our short distance products and postpone our ability to resume paused services or launch planned route expansions.
Note 1411 – Subsequent Events
In April 2022,
The Company has completed an evaluation of all subsequent events through the filing of this Quarterly Report on Form 10-Q to ensure that these unaudited interim condensed consolidated financial statements include appropriate disclosure of events both recognized in the unaudited interim condensed consolidated financial statements and events which occurred but were not recognized in the unaudited interim condensed consolidated financial statements. The Company amended its CPA with one of its aircraft operators, the operator dedicated 4 (with the plan to expand to 6) aircraft for the exclusive use of Blade for three years. The amended agreement increases the Company’s Capacity Purchase Agreementsobligations (as provided in Note 10) for the years ending December 31, 2022, 2023, 2024 and 2025 by $0, $6,000, $600 and $6,000, respectively. Blade has the right to terminate this agreement without cause upon 60 days written notice, upon such termination the guarantee will be pro-rated to the date of the termination and the operator will be entitled to retain any unapplied deposit at the time of such termination.concluded that no subsequent event has occurred that requires disclosure.
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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 September 30, 2021.

On February 1, 2022, the Board of Directors approved a change of the Company's fiscal year-end from September 30 to December 31. The Company's 2022 fiscal year began on January 1, 2022 and will end on December 31, 2022.
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 includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be,contain “forward-looking statements.”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,“anticipates”, “expects”, “seeks”, “projects”, “intends”, plans,”“plans”, “may”, “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward- lookingforward-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, and the markets in which we operate.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. Factorsus 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 impactcause actual results to differ materially from such forward-looking statements include: statements:

continued occurrence of significant losses, which we have experienced since inception;
the durationimpact of COVID-19 and severityits related effects on our results of the COVID-19 pandemic, failure of operations, financial performance or other financial metrics;
the markets for our offeringsin which we operate may fail to grow as expected, or at all; may grow more slowly than expected;
our ability to attracteffectively market and retain customerssell air transportation as a substitute for conventional methods of transportation;
changes in consumer preferences, discretionary spending and increase existing customer utilization rates; other economic conditions;
the inability or unavailability to use or take advantage of the shift, or lack thereof, to EVA technology or the failure of such technology to deliver the expected results and cost savings; technology;
our ability to successfully enter new markets and launchoffer new offerings;routes and services;
any adverse publicity stemming from accidents or safety-related events involving small aircraft, that create adverse publicity; the helicopters or charter flights and, in particular, any accidents involving our third-party operators;
effects of competition; effects of pricing pressures; injuries
our reliance on contractual relationships with certain transplant centers, hospitals and Organ Procurement Organizations;
harm to our reputation and brand; challenges to
our ability to provide qualityhigh-quality customer support at scale; events that cause decreases in support;
our ability to maintain a high daily aircraft usage ratesrate and flier utilization rates; shifts in customer preferences, discretionary spendingto aggregate fliers on our by-the-seat flights;
impact of natural disasters, outbreaks and the ability of our customers to pay for our services; disruption of operations at the helioportspandemics, economic, social, weather, growth constraints, and regulatory conditions or other circumstances on metropolitan areas and airports where our operations are concentrated; risks associatedwe have geographic concentration;
the effects of climate change, including potential increased impacts of severe weather and regulatory activity; change;
the availability of aircraft fuel; technology
our ability to address system failures, defects, errors or vulnerabilities and cyber-based attacks;in our ability to receive favorablewebsite, 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 in mobile application marketplaces and effectively operate ourwithin mobile operating systems and applications; application marketplaces;
our ability to protect our intellectual property rights; risks related to
our use of open source software;
our ability to expand and maintain and expand our facility and infrastructure network;
our ability to obtainaccess additional funding on acceptable terms, or at all; our ability to successfully navigatefunding;
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 future growth effectively; our abilitygrowth;
increases in insurance costs or that of our third-party operators to obtain sufficientreductions in insurance at reasonable cost, or at all; 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 the operations ofinsurance costs or reductions in insurance coverage for our third-party aircraft operators;
the possibility that our third-party aircraft operators their failure to perform adequately,may illegally, improperly or their misuse of Blade-brandedotherwise inappropriately operate our branded aircraft; the loss of
our existing relationships with third-party operators or our inability to attract and retain qualified new operators to meet demand; disruptions or interference in our use ofreliance on third-party web services; service providers;
changes in our regulatory environment, including aviation law and FAA regulations; environment;
regulatory obstacles that may block our ability to offer our services in certain jurisdictions on a profitable basis, or at all; our ability to comply withlocal governments;
the expansion of domestic and foreign privacy data protection, consumer protections and security laws;
the expansion of environmental laws and regulations and changes to such laws and their interpretations; regulation;
our ability to remediate any material weaknesses or maintain effective aninternal controls over financial reporting;
our ability to maintain effective system of disclosureinternal controls and internal control over financial reporting; disclosure controls;
changes in the 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 “emerging growth company” and “smaller reporting company” exemptions from disclosure requirements;
provisions in our charter that may discourage unsolicited takeover proposals;
provisions in our charter that designate exclusive forum; and
the other factors beyond our control; and other factors beyond our control. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in “Risk Factors” includeddescribed elsewhere in the Annual Report on Form 10-K for the year ended September 30, 2021,December 31, 2022, included under the headings “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition” or as described in ourthe other filingsdocuments and reports we file with the SecuritiesSEC.

Actual results, performance or achievements may differ materially, and Exchange Commission (the SEC). Exceptpotentially 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 required by law,a predictor of future performance. All information set forth herein speaks only as of the date hereof and we do not assumedisclaim any intention or obligation to update any forward-looking statements, whether as a result of new information, changes in expectations, future events or otherwise.
Merger and Organization
On May 7, 2021 (the “Closing Date”), privately held Blade Urban Air Mobility, Inc., a Delaware corporation formed on December 22, 2014, (“Old Blade”) consummated the previously announced transactions contemplated by the Agreement
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and Plan of Merger (the “Merger Agreement”), dated December 14, 2020, by and among Experience Investment Corp. (“EIC”), Experience Merger Sub, Inc., a wholly owned subsidiary of EIC (“Merger Sub”), and Old Blade. The Merger Agreement provided for the acquisition of Old Blade by EIC pursuant to the merger of Merger Sub with and into EIC (the “Merger”), with Old Blade continuing as the surviving entity and a wholly-owned subsidiary of EIC. On the Closing Date, and in connection with the closing of the business combination (the “Closing”), EIC changed its name to Blade Air Mobility, Inc. Unless the context indicates otherwise, the discussion of the Company and its financial condition and results of operations is with respect to Blade following the Closing Date and with respect to Old Blade prior to the Closing Date.
See Note 3 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2021 for additional information.
Significant Transactions
Purchase of Exclusive Rights to Helijet International, Inc.’s Scheduled Passenger Routes in Canada
On November 30, 2021, the Company through its wholly-owned subsidiaries Blade Urban Air Mobility, Inc. and Blade Urban Air Mobility (Canada) Inc. entered into an agreement with Helijet International, Inc. (Helijet), a British Columbia-based aviation solutions company and with Pacific Heliport Services Ltd. (“PHS”), a wholly-owned subsidiary of Helijet. Pursuant to this agreement, Blade has acquired exclusive rights to offer scheduled helicopter flights operated by Helijet and to utilize passenger terminals at heliports controlled by PHS, for cash consideration of $12 million. The agreement has an initial term of five years and will be automatically renewed for successive two-year periods. This transaction is consistent with Blade’s asset-light model, where the Company organically creates or purchases, valuable routes and contracts with incumbent aircraft operators to fly on its behalf. Routes are between Vancouver, Victoria and Nanaimo, British Columbia where Blade will invest in Helijet’s heliport terminal infrastructure; flights range from 20 to 40 minutes. Flights revenue generated through those exclusive rights are included in the Short Distance line of business.
This transaction was accounted for as a purchase of an intangible asset under ASC 350, Intangibles—Goodwill and Other, per which the Company capitalized the consideration paid and acquisition related costs as an intangible asset and amortize it over five years. See Note 4 to the unaudited interim condensed consolidated financial statements for additional information on the intangibles.
Acquisition of Trinity Air Medical, Inc.
In September 2021, the Company completed its acquisition of 100% of Trinity Air Medical, Inc. (“Trinity”) shares. Trinity is an asset-light, multi-modal organ transport business working with transplant centers and organ procurement organizations in 16 states. The results of Trinity are included in the MediMobility Organ Transport and Jet line of business. For additional information, see Note 4 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2021.
Business Overview

Blade is a technology-powered, global air mobility platform committed to reducing travel friction by providing cost-effective air transportation alternatives to some of the most congested ground routes in the U.S. and abroad. Today, we predominantly use helicopters and amphibious aircraft for our passenger routes and are also one of the largest air medical transporters of human organs for transplant in the world. Our asset-light model, coupled with our exclusive passenger terminal infrastructure, is designed to facilitate a seamless transition to Electric Vertical Aircraft (“EVA” or “eVTOL”), enablingwhich is expected to enable lower cost air mobility to the public that is both quiet and emission-free. Blade currently 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 CanadaEurope between 10 and 100 miles in distance with prices starting at approximately $195 per seat (or, in the case of our New York City airport transfer service, as low as $95 per seat with the purchase of an annual Airport Pass for $795).distance. Flights are also available for purchase both by-the-seat and on a full aircraft charter basis. Prices per seat are presented at full dollar value and not rounded.
MediMobility Organ TransportJet and JetOther — Consisting–  Consists principally of transportation of human organs for transplant,revenues from non-medical jet charter and limited, by-the-seat jet flights between New York and South Florida.
Other — Consists principally of revenuesFlorida, revenue from brand partners for exposure to Blade fliers and certain ground transportation services.
Medical segment
MediMobility Organ Transport – Consisting of transportation of human organs for transplant and/or the medical teams supporting these services.
Blade Europe Acquisition

On September 1, 2022, Blade acquired, through Blade Europe SAS, a wholly-owned French société par actions simplifiée subsidiary (“Blade Europe”), 100% of the share capital and voting rights of Héli Tickets France SAS (“Héli Tickets France”), a French société par actions simplifiée, which was then renamed “Blade France SAS” (“Blade France”) and of Helicopter Monaco SARL (“Helicopter Monaco”), a Monegasque société à responsabilité limitée, which was then renamed “Blade Monaco SARL” (“Blade Monaco”). We refer to the three European legal entities (Blade Europe, Blade France and Blade Monaco) collectively as “Blade Europe”. These acquisitions are part of Blade’s growth strategy of leveraging its asset-light model, technology and recognized brand to aggregate the best use cases for urban air mobility. The routes in Southern France, Monaco, Italy and Switzerland, meet the criteria given the geography, short distances and large addressable markets. In addition these markets have connectivity to our existing service areas where the Blade brand enjoys recognition, creating the opportunity for cross pollination between our North American and European customer base. As a result of this acquisition and an Aircraft Operator Agreement Blade Europe entered into in connection with the acquisition, Blade gained the right to act as the exclusive air charter broker and/or reseller of air transportation services to be operated and provided by the operator partners at pre-negotiated fixed hourly rates and with a minimum number of annual flight hours guaranteed to the operators by Blade. The initial term of the Aircraft Operator Agreement ends on December 31, 2032 and it will automatically renew for successive three year periods.

Seats Flown

The following table reflects the key operating metric we use to evaluate the Passenger segment:
Three Months Ended
March 31,
20232022
Seats flown – all passenger flights28,550 18,494 

We define “Seats flown — all passenger flights” 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 — all passenger flights” 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; growth in these areas is captured by “Seats flown — all passenger flights,” but has less impact on revenue, which 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 — all passenger flights” 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.

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Recent Developments — Impact of COVID-19
The COVID-19 Pandemic
COVID-19, which was declared a global health pandemic by the World Health Organization in March 2020, drove the implementation of significant government-imposed measures to prevent or reduce its spread, including travel restrictions, “shelter in place” orders, and business closures. At the onset of the pandemic, we experienced a substantial decline in the demand for our Short Distance product line due to travel restrictions that significantly reduced the number of commercial airline passengers and office closures that required many people to work from home, lowering commuter demand.
We began to see a recovery in Short Distance demand in Summer 2021 that has continued to date. However, future adverse developments related to the pandemic, such as the emergence of new viral strains that are not responsive to a vaccine, a sustained or increased reduction in business travel in favor of virtual meetings, or a decrease in demand for air travel from the public, could reduce demand for our Short Distance products and postpone our ability to launch route expansions.

Our Business Model

Blade leverages an asset-light business model: we neither own nor operate aircraft. 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 schedulemaintain the relationship with the client from booking through flight arrival. For flights offered for sale by-the-seat, Blade schedules flights based on demand analysis and maintain the relationship with the flier from booking through flight arrival. Blade takes the economic risk of aggregating fliers to optimize flight profitability, providing predictable margins for our operators.

We typically pre-negotiate fixed hourly rates and flight times with our aircraft operators, paying only for flights actually flown, creating a predictable and flexible cost structure. Our costs are variable based on how many flights we offer, so if demand recedes, we are able to adjust our supply requirements accordingly by using fewer operators and reducing our by-the-seat flights. Blade will sometimes provide an annual guaranteed number of flight hourscommitments to theour aircraft operators.

Blade’s proprietary “customer-to-cockpit” technology stack enables us to manage hundreds of fliers and organ transports across numerous simultaneous flights, coordinating multiple operators flying between terminals across our route network. We believe that this technology, which provides us with enhanced logistics capabilities and information from our fliers signaling their interest in new routes, 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 flier 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 helicoptersaircraft 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. In the interim, we purchase offsets to contractcounteract the carbon emissions generated by our urban air mobility services.
Key Business Metric
We collect, measure, and evaluate operating and financial data of our business to evaluate our performance, measure our progress, and make strategic decisions. The following table reflects the key operating metric we use to evaluate our business:
Three Months Ended
March 31,
20222021
Seats flown – all passenger flights(1)18,494 2,255 
__________
(1) Prior period amounts have been updated to conform to current period presentation.
We define “Seats flown — all passenger flights” as the total number of seats purchased by paying passengers on all flights, whether sold by-the-seat or within a charter arrangement, and excludes organ transportation flights regardless of whether the organ is accompanied by a medical team. Our long-term strategy is primarily focused on growth in by-the-seat products, and we believe that “Seats flown — all flights” 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; growth in these areas is captured by “Seats flown — all passenger flights,” but has less impact on revenue, which is heavily influenced by our MediMobility Organ Transport and Jet product line where we typically fly fewer or sometimes no passengers over long distances at a high price. We believe the “Seats flown — all flights” metric is useful to investors in understanding the overall scale of our business and trends in the number of passengers paying to use our service.
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Recent Developments — Impact of COVID-19
COVID-19, which was declared a global health pandemic by the World Health Organization in March 2020, has driven the implementation and continuation of significant government-imposed measures to prevent or reduce its spread, including travel restrictions, “shelter in place” orders, and business closures. We experienced a substantial decline in the demand for some of our passenger services due to travel restrictions that significantly reduced the number of commercial airline passengers and office closures that required many people to work from home, lowering commuter demand.
As a result of this decline, we paused our New York airport service from March 2020 through June 2021. Additionally, we significantly reduced the number of Northeast commuter flights we offered in the typically high-demand summer season during 2020 and implemented new measures to focus on the personal safety of our air and ground passengers during the pandemic, which did not materially increase our costs. Despite the decline in our Short Distance business, we have seen increased demand for our MediMobility Organ Transport and Jet services during the pandemic.
On April 8, 2020, we received a loan in the principal amount of approximately $1.2 million through the Paycheck Protection Program (“PPP”) under the Coronavirus Aid Relief and Economic Security Act (“CARES Act”), which we used to help sustain our employee payroll costs and rent. On May 7, 2021, we repaid the PPP Loan in full.

While the ultimate impact of the current COVID-19 pandemic is highly uncertain and subject to change, we were able to resume our New York by-the-seat airport flights on June 1, 2021, beginning with service between Manhattan and JFK Airport and later adding Newark Airport. Additionally, we have seen recovering demand on our other short distance routes. However, adverse developments related to the pandemic, such as the emergence of new variants that are not responsive to the vaccine, a reduction in business travel in favor of virtual meetings, or a continued lack of demand for air travel from the public, could slow the recovery of our short distance products and postpone our ability to resume paused services or launch planned route expansions. For example, the emergence of the Omicron variant resulted in a negative impact to our Short Distances services during the quarter ending March 31, 2022, while our MediMobility Organ Transport and Jet businesses remained unaffected.
Factors Affecting our Performance
Ability to attract and retain fliers in our Short Distance businessproduct line
Our success depends in part on our ability to cost-effectively attract new fliers, retain existing fliers and increase utilization of our services by current fliers. We plan to continue making significant investments and implementing 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. Moreover, 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.
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Ability to attract and retain customers in our MediMobility Organ Transport and Jet business

and Other product line
Our MediMobility Organ Transport businessproduct line primarily serves transplant centers, organ procurement organizations and Organ Procurement Organizations (OPOs and, together, MediMobility Customers).hospitals. Transportation for the hearts, lungs and livers that make up the vast majority of this businessproduct 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 MediMobility Organ Transport Customers evaluate our performance.

We utilize the same fixed wing aircraft and aircraft operators forin our retail jet charter customers, who are also primarily concerned with availability and pricing, but typically book with much more advance notice.

Passenger segment. Historically, the combination of Blade's retail jet charterour Passenger and MediMobility Organ Transport demand, has been enough to incentivize operators to provide dedicated jet aircraft and crews for our MediMobility Organ Transport and Jet business line.use. However, there is no guarantee that we will continue to be able to secure dedicated aircraft at favorable rates, particularly given recent significant increases in demand for private jet aircraft in the United States.States in recent years. Recent increased demand for private jets has led to increased charter costs and more limited availability in the spot jet charter market, but has not limited Blade'sour ability to maintain or increase our access to dedicated jet aircraft at fixed prices.
28Impact of inflation to our business

Table
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 Contentsfuel price increases above a set threshold. 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 consumer-facingPassenger segment growth plan is focused on dense urban areas, primarily those with existing air transportation infrastructure in the Northeast and on the West Coast, that are facing increasing ground congestion. In these areas, Blade’sour 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. 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. In addition to these domestic target markets, we will continue to explore international markets through joint ventures, as in India. For example, as discussed above, in November 2021 we entered into an agreement with Helijet, which expanded our business in Canada. The number of potential fliers using our urban air mobility services in any of these marketsmarket 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.
Growth of our business will require significant investments in our infrastructure, technology, and marketing and sales efforts. Historically, cash flow from operations has not been sufficient to support these needs. If our business does not generate the level of available cash flow required to support these investments, our results of operations will be negatively affected. Further, our ability to effectively manage growth and expansion of our operations will also require us to enhance our operational systems, internal controls and infrastructure, human resources policies, and reporting systems. These enhancements will require significant capital expenditures and allocation of valuable management and employee resources.
Development, approval and acceptance of EVA for passenger travelcommercial service
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, vertiports in our existing and new markets. However, manufacturers, individual operators that will purchase EVA, and pilots must receive requisite approvals from federal transportation authorities before EVA can fly passengers. No EVA aircraft are currently certified by the FAA for commercial operations in the United States, and 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. WeIn our Passenger segment, we believe our existing short distanceShort Distance routes arewill 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
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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 businessesproduct 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). In calendar year 2020, we experienced less seasonality as a result of the COVID-19 pandemic

Jet and related restrictions, which altered typical travel patterns. In 2021, we saw a recoveryOther revenue has historically been stronger in demand for summer travel, resulting in a return to more typical seasonality. Thus far in 2022, we have seen a continued recovery in demand trends more in line with typical seasonality, however we did experience a minimal impact from the COVID-19 Omicron variant during the first quarter. Blade’s Short Distance expansion strategy is focused on routes with significantly less seasonality, such as intercity transfers, airport, and year-round commuter routes. We also continue to expandfourth quarter (Q1 and Q4) given that our by-the-seat jet service has historically operated only between November and April.

Medical segment

Historically, MediMobility Organ Transport business, which sees consistent year-round demand both organically and through acquisition. Thus, we expect that seasonality in revenue will decrease as our business grows and our revenue mix shifts to these new, year-round routes.has not been seasonal.
Key Components of the Company’s Results of Operations
Revenue
Short Distance products are typically purchased using the Blade generates revenue through the sale of air travel services. Our fliers primarily purchaseApp and manage reservations using our self-service mobile and web applications, but some choose to call, email, or text our dedicated team of Flier Relations professionals. Fliers paypaid for principally via credit card transactions, wire, check, customer credits,credit, and gift cards, and generally, we collect
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with payments principally collected by the Company in advance of performingthe performance of related services. The revenue is recognized as 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 services. We also collect fees from add-ons, suchservice. The revenue is recognized as trip insurance and ground transportation services, and changes to non-refundable seats sold. Our the service is completed.

MediMobility Organ Transport customers receive termsproducts are typically purchased through our medical logistics coordinators and make payments to usare paid for principally via checks and wires. Payments are generally collected after we performthe performance of the related service. Most of our accounts receivable consist of amounts due from MediMobility Organ Transport customers. Additionally, our joint venture agreement for operationsservice in India entitles us to receive quarterly royalty payments.accordance with the client's payment terms. The revenue is recognized as the service is completed.
Cost of Revenue

Cost of revenue consists principally of flight costs paid to operators of aircraft and cars, landing fees.fees, ROU asset amortization and internal costs incurred in generating ground transportation revenue using the Company's owned cars.
Software Development
Software development expenses consist primarily of staff costs and stock-based compensation costs. Software development costs are expensed as incurred.
General and Administrative

General and administrative expenses principally include personnelstaff costs including stock-based compensation, facilitydepreciation and amortization, directors and officers insurance costs, professional fees, credit card processing fees and professional fees. We expect that general and administrative expenses will increase for the foreseeable future as we expand our service offerings to additional cities and increase flight volumes on existing routes. We expect to incur additional expenses as a result of operating as a public company, including expenses related to compliance with reporting obligations under the rules and regulations of the SEC, rules and regulations applicable to companies listed on a national securities exchange, and higher expenses for director and officer insurance, investor relations, and professional services.establishment costs.
Selling and Marketing

Selling and marketing expenses consist primarily of advertising costs, staff salaries andcosts including stock-based compensation, marketing expenses, sales commissions and promotion costs. We expect that selling and marketing expenses will increase for the foreseeable future as they represent a key component of our initiatives to expand into new markets. 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 unaudited interim condensed consolidated statements of operations for the periods indicated:
Three Months Ended
March 31,
20222021
(in thousands)
Revenue$26,630 $9,273 
Operating expenses
Cost of revenue(1)23,707 7,797 
Software development(1)835 289 
General and administrative(1)13,978 4,825 
Selling and marketing(1)1,800 587 
Total operating expenses40,320 13,498 
Loss from operations(13,690)(4,225)
Other non-operating income (expense)
Change in fair value of warrant liabilities2,550 — 
Interest income, net264 
Realized loss from sale of short term investments(136)— 
Total other non-operating income2,678 
Net loss$(11,012)$(4,221)
__________
Three Months Ended
March 31,
20232022
(in thousands)
Revenue$45,271 $26,630 
Operating expenses
Cost of revenue38,107 23,707 
Software development1,123 835 
General and administrative16,257 13,978 
Selling and marketing2,611 1,800 
Total operating expenses58,098 40,320 
Loss from operations(12,827)(13,690)
Other non-operating income (expense)
Interest income, net1,954 264 
Change in fair value of warrant liabilities566 2,550 
Realized loss from sales of short-term investments(81)(136)
Total other non-operating income2,439 2,678 
Loss before income taxes(10,388)(11,012)
Income tax benefit(196)— 
Net loss$(10,192)$(11,012)
(1) Prior period amounts have been updated to conform to current period presentation.



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Comparison of the Three Months Ended March 31, 20222023 and 20212022

Revenue
Three Months Ended
March 31,
20222021% Change
(in thousands, except percentages)
Revenue$26,630 $9,273 187 %

Disaggregated revenue by product line was as follows:
Three Months Ended
March 31,
20222021
(in thousands)
Product Line(1):
Short Distance$4,203 $1,051 
MediMobility Organ Transport and Jet22,115 7,727 
Other312 495 
Total Revenue$26,630 $9,273 
Three Months Ended
March 31,
20232022% Change
(in thousands, except percentages)
Product Line:
Short Distance$10,425 $4,203 148 %
Jet and Other(1)8,079 9,752 (17)%
MediMobility Organ Transport(1)26,767 12,675 111 %
Total Revenue$45,271 $26,630 70 %
__________
(1) Prior period amounts have been updated to conform to current period presentation.

For the three months ended March 31, 20222023 and 2021,2022, revenue increased by $17.4$18.6 million or 187%70%, from $9.3 million in 2021 to $26.6 million in 2022. The increase2022 to $45.3 million in revenue was driven by the acquisition2023.
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Table of Trinity (September 2021), the acquisition of Helijet’s scheduled routes in Vancouver, Canada (November 2021) and organic growth in both Short Distance and MediMobility Organ Transport and Jet.Contents
Short Distance aviation servicesrevenue increased by $3.2$6.2 million in 2023, an increase of 148%, from $4.2 million in 2022 an increase of 300%.to $10.4 million in 2023. Growth in Short Distance was driven by the acquisition of Helijet’s scheduled routesBlade Europe in Vancouver,September 2022 and increased passenger volumes for Blade Canada increased demand for helicopter charter flights, and the reintroduction ofin our New York by-the-seat airport transfer products, beginningproducts.
Jet and Other revenue decreased by $1.7 million in June 2021.2023, a decrease of (17)%, from $9.8 million in 2022 to $8.1 million in 2023. The decrease was driven by lower flight volumes and a lower average price per trip.

MediMobility Organ Transport revenue increased by $14.1 million in 2023, an increase of 111% from $12.7 million in 2022 to $26.8 million in 2023. Growth in MediMobility Organ Transport was driven by the addition of new hospital clients and Jet businessesgrowth within existing clients, both in terms of trip volume and average price per trip as hospitals accepted more organs for transplant involving longer travel distances.

Cost of Revenue
Three Months Ended
March 31,
20232022% Change
(in thousands, except percentages)
Cost of revenue$38,107 $23,707 61 %
Percentage of revenue84 %89 %

For the three months ended March 31, 2023 and 2022, cost of revenue increased by $14.4 million, or 61%, from $23.7 million during 2022 to $38.1 million in 2022, an increase of 186%. In MediMobility Organ Transport, growth was2023 driven by the acquisition of Trinity and organic growth from new hospital clients onboarded in recent months. In Jet, growth was driven by the successful acquisition of additional fliers, more frequent trips from existing fliersincreased flight volume and an increase in the average price per trip.

Other revenue decreased from $0.5 million to $0.3 million driven primarily by lower revenue from ground transportation services.
Cost of Revenuerevenue as a percentage of revenues decreased by 5 percentage points from 89% to 84%. This change is attributable primarily to (i) higher passenger utilization at Blade Canada in the current year period, compared with the three months ended March 31, 2022 which was negatively impacted by the COVID-19 Omicron variant; and (ii) the acquisition of Blade Europe, which operates at a lower cost of revenue as a percentage of revenue compared with our Short Distance and Medical products.
Three Months Ended
March 31,
20222021% Change
(in thousands, except percentages)
Cost of revenue(1)$23,707 $7,797 204 %
Percentage of revenue89 %84 %
__________Software Development
(1) Prior period amounts have been updated to conform to current period presentation.
Three Months Ended
March 31,
20232022% Change
(in thousands, except percentages)
Software development$1,123 835 34 %
Percentage of revenue%%

For the three months ended March 31, 2023 and 2022, and 2021, cost of revenuesoftware development costs increased by $15.9$0.3 million, or 204%34%, from $7.8$0.8 million during 20212022 to $23.7$1.1 million in 2023, attributable primarily to a $0.3 million increase in consulting costs related to improvements to our software following our expansion to Europe and Canada.
General and Administrative
Three Months Ended
March 31,
20232022% Change
(in thousands, except percentages)
General and administrative$16,257 $13,978 16 %
Percentage of revenue36 %52 %
For the three months ended March 31, 2023 and 2022, drivengeneral and administrative expense increased by increased flight volume and an increase and the average price per$2.3 million, or 16%, from $14.0 million during 2022 to $16.3 million in 2023.

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trip. Cost of revenue as a percentage of revenues increased by 5 points from 84% to 89%, attributable primarily to (i) the reintroduction of our by-the-seat airport transfer service, which was paused during the comparable 2021 period and is currently operating below breakeven during the ramp period, as expected; and (ii) the impact of the Omicron variant on demand for travel in Vancouver, Canada, where significant public health restrictions were in effect during the period.
Software Development
Three Months Ended
March 31,
20222021% Change
(in thousands, except percentages)
Software development(1)$835 289 189 %
Percentage of revenue%%
For the three months ended March 31, 2022 and 2021, software development costs increased $0.5 million, or 189%, from $0.3 million during 2021 to $0.8 million in 2022, attributable to a $0.3 million increase in staff costs due to hiring and an increase of $0.2 million in stock based compensation.
General and Administrative
Three Months Ended
March 31,
20222021% Change
(in thousands, except percentages)
General and administrative(1)$13,978 $4,825 190 %
Percentage of revenue52 %52 %
__________
(1) Prior period amounts have been updated to conform to current period presentation.
For the three months ended March 31, 2022 and 2021, general and administrative expense increased by $9.2 million, or 190%, from $4.8 million during 2021 to $14.0 million in 2022.

The primary drivers of the net increase were: (i) a $2.7$1.9 million increase in staff costs attributable to new hires in order to support our significant growth, both organically and through the consolidationour acquisition of Trinity, across new geographies and product lines as well as the requirement for additional roles following the Company becoming public in May 2021;Blade Europe (September 2022); (ii) a $1.7$0.9 million increase in legal and regulatory advocacy fees, which we do not expect to reoccur at this level, in connection with the proposed flight volume restrictions at East Hampton Airport, potential operational restrictions on large jet aircraft at Westchester Airport and our recent settlement of the Shoreline matter;stock-based compensation costs; (iii) a $1.6$0.6 million increase in Directors & Officers (“D&O”) insurance expense followingfor accruals related to our short term incentive plan for the Company becoming public;year 2023; (iv) a $1.0$0.5 million increase in intangibles amortization costs as a result of our acquisition of Blade Europe, which did not exist in connection with the Trinity and Helijet transactions; andprior year period; (v) a $1.0$0.4 million increase in professionalrent and lease costs attributable to new leases; and (vi) a $0.9 million increase across other various general and administrative items in line with the company’s growth and geographical expansion; those increases were partially offset by a $2.2 million decrease in non-recurring legal and M&A transaction fees related to certain mergersincurred in the prior year period and acquisitions transactions.

a $0.8 million decrease in other recurring corporate costs.
Selling and Marketing
Three Months Ended
March 31,
Three Months Ended
March 31,
20222021% Change20232022% Change
(in thousands, except percentages)(in thousands, except percentages)
Selling and marketing(1)Selling and marketing(1)$1,800 $587 207 %Selling and marketing(1)$2,611 $1,800 45 %
Percentage of revenuePercentage of revenue%%Percentage of revenue%%
For the three months ended March 31, 20222023 and 2021,2022, selling and marketing expense increased by $1.2$0.8 million, or 207%45%, from $0.6$1.8 million during 20212022 to $1.8$2.6 million in 2022.2023. The increase is attributable primarily to higher marketing spend in connection with the recently re-launched Blade Airport products and higher marketing activity in line with the overallto: (i) a $0.3 million increase in flights.
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sales commissions attributable to MediMobility Organ Transport revenue growth from new clients, and to Blade Europe (which was acquired after prior year period) where certain hotels earn commissions for facilitating transactions; and (ii) a $0.3 million increase in staff costs due to increased headcount.
Other non-operating income (expense)
Three Months Ended
March 31,
20222021% Change
(in thousands, except percentages)
Change in fair value of warrant liabilities$2,550 $— 
Interest income, net$264 $
Realized loss from sale of short term investments$(136)$— 
Total other non-operating income$2,678 $NM(1)
__________
(1) Percentage not meaningful
Three Months Ended
March 31,
20232022% Change
(in thousands, except percentages)
Interest income, net$1,954 $264 
Change in fair value of warrant liabilities566 2,550 
Realized loss from sales of short-term investments(81)(136)
Total other non-operating income$2,439 $2,678 (9)%
For the three months ended March 31, 2022,2023, other non-operating income consistsconsisted of: (i) $2.0 million interest income, net of $2.6interest expense attributable to higher interest rates on our short-term investments and our money market funds in the current year period; (ii) $0.6 million non-cash income due to fair value revaluation of warrant liabilities $0.3 million interest income, netas the value of interest expensethe warrant liabilities fluctuates with the warrants’ market price; and a(iii) $0.1 million realized loss from salethe sales of short-term investments during the quarter.


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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, Segment Flight Profit and Segment Flight Margin
The following table presents our segment results for the periods indicated (in thousands, except percentages):

Three Months Ended March 31,
20232022% Change
Segment Revenue
Passenger$18,504 $13,955 33 %
Medical26,767 12,675 111 %
Total revenue$45,271 $26,630 70 %
Segment Flight Profit
Passenger$2,812 $689 308 %
Medical4,352 2,234 95 %
Total Flight Profit$7,164 $2,923 145 %
Segment Flight Margin
Passenger15.2 %4.9 %
Medical16.3 %17.6 %
Total Flight Margin15.8 %11.0 %

Passenger segment

For the three months ended March 31, 2023 and 2022, Passenger revenue increased by $4.5 million or 33%, from $14.0 million in 2022 to $18.5 million in 2023. The increase was attributable to a $6.2 million increase in Short Distance offset by a decrease of $1.7 million in Jet and Other. Refer to the disaggregated revenue discussion above under “—Comparison of the Three Months Ended March 31, 2023 and 2022—Revenue” for more details.
Passenger Flight Profit increased by $2.1 million or 308% for the three months ended March 31, 2023, from $0.7 million in the same period of 2022 to $2.8 million in 2023. The increase was attributable primarily to the acquisition of Blade Europe in September 2022, which was not included in the prior year period and improvement at Blade Canada, partially offset by a lower profit contribution from our seasonal jet services.

Passenger Flight Margin increased from 4.9% in the three months ended March 31, 2022 to 15.2% in the same period in 2023. The increase was attributable primarily to: (i) Blade Canada moving to positive margin in 2023, due to higher passenger utilization, from negative margin in the three months ended March 31, 2022, which was negatively impacted by the COVID-19 Omicron variant; and (ii) the acquisition of Blade Europe, which operates at higher flight margins than our company average; partially offset by a negative margin impact driven by lower utilization in our seasonal jet service.

Medical segment

For the three months ended March 31, 2023 and 2022, Medical revenue increased by $14.1 million or 111%, from $12.7 million in 2022 to $26.8 million in 2023. Refer to the disaggregated revenue discussion above under “Comparison of the Three Months Ended March 31, 2023 and 2022—Revenue” for more details.

Medical Flight Profit increased by $2.1 million or 95% for the three months ended March 31, 2023, from $2.2 million in the same period of 2022 to $4.4 million in 2023. The increase was attributable primarily to increased revenue from new and existing clients.

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Medical Flight Margin decreased from 17.6% in the three months ended March 31, 2022 to 16.3% in the same period in 2023. The decrease was attributable primarily to faster than expected acquisition of new clients and faster than expected growth within existing clients, which necessitated greater use of non-dedicated aircraft at lower flight margins.

Segment Adjusted EBITDA

Segment Adjusted EBITDA is defined as segment net income (loss) excluding non-cash items or certain transactions that are not indicative of ongoing Company operating performance and/or items that management does not believe are reflective of our ongoing core operations.

Three Months Ended March 31,
20232022% Change
Segment net income (loss)
Passenger$(5,118)$(5,516)%
Medical1,637 522 214 %
Total segment net loss$(3,481)$(4,994)30 %
Segment Adjusted EBITDA(1)
Passenger$(3,055)$(2,609)(17)%
Medical1,880 951 98 %
Total segment Adjusted EBITDA$(1,175)$(1,658)29 %
__________
(1) See section titled “Reconciliations of Non-GAAP Financial Measures” for more information and reconciliations to the most directly
comparable GAAP financial measure.

Passenger segment

For the three months ended March 31, 2023 and 2022, Passenger net loss decreased by $0.4 million or 7%, from $(5.5) million in 2022 to $(5.1) million in 2023. The decrease is attributable primarily to a $2.1 million increase in Flight Profit, driven by the acquisition of Blade Europe and improved Flight Profit for Blade Canada, partially offset by increased fixed costs related to the acquisition of Blade Europe, which operated at a net loss during the quarter due to seasonably low Flight Profit that did not cover fixed costs during this period, as expected. Increase in staff costs (partially due to the 2023 short term investments. We earn interest income on our money marketincentive plan) and short-term investments. An unrealized change in fair value of short term investments was realized upon the sale of part of the underlying investmentmarketing costs were fully offset by decrease in professional fees (due to less legal and M&A fees in the current quarter.year period).

Passenger Adjusted EBITDA decreased by $0.4 million or (17)% from $(2.6) million in 2022 to $(3.1) million in 2023.The decrease is attributable to a $2.1 million increase in Flight Profit, driven by the acquisition of Blade Europe and improved Flight Profit for Blade Canada, which was more than offset by: (i) increased fixed costs related to the acquisition of Blade Europe which operated at a net loss during the quarter due to seasonably low Flight Profit that did not cover fixed costs during this period, as expected; (ii) increased staff costs, partially due to the 2023 short term incentive plan; and (iii) increased marketing costs.
Medical segment

For the three months ended March 31, 2023 and 2022, Medical net income increased by $1.1 million or 214%, from $0.5 million in 2022 to $1.6 million in 2023. The increase is attributable to a $2.1 million increase in Flight Profit due to higher revenue with the addition of new clients, growth within existing clients and organ transplant market growth, partially offset by a $1.0 million increase in fixed costs, primarily staff costs.

Medical Adjusted EBITDA increased by $0.9 million or 98%, from $1.0 million in 2022 to $1.9 million in 2023. The increase is attributable to $2.1 million increase in Flight Profit due to higher revenue with the addition of new clients, growth within existing clients and organ transplant market growth, partially offset by a $1.1 million increase in fixed costs excluding one time transactions, amortization and shares based compensation.

Reconciliation of Non-GAAP Financial Measures

Certain non-GAAP measures included in this segment results of operations review have been derived from amounts calculated in accordance with GAAP but are not themselves GAAP measures. Blade believes that the non-GAAP measure discussed below,
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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 measure presented herein may not be comparable to similarly titled measures presented by other companies. This includes Segment Adjusted EBITDA, which we define, explain the use of and reconcile to the nearest GAAP financial measure below.

Segment Adjusted EBITDA

Segment Adjusted EBITDA is defined as segment net income (loss) excluding non-cash items or certain transactions that are not indicative of ongoing Company operating performance and / or items that management does not believe are reflective of our ongoing core operations (as shown in the table below).

Three Months Ended March 31, 2023Three Months Ended March 31, 2022
PassengerMedicalPassengerMedical
Segment net income (loss)$(5,118)$1,637 $(5,516)$522 
Reconciling items:
Depreciation and amortization1,134 466 734 376 
Stock-based compensation360 116 426 53 
Legal and regulatory advocacy fees(1)423 — 1,747 — 
Executive severance costs146 — — — 
Contingent consideration compensation (earn-out)(2)— (339)— — 
Segment Adjusted EBITDA$(3,055)$1,880 $(2,609)$951 
__________
(1) Represents certain legal and regulatory advocacy fees for specific matters (primarily the proposed restrictions at East Hampton Airport and the potential operational restrictions on large jet aircraft at Westchester Airport) that we do not consider representative of legal and regulatory advocacy costs that we will incur from time to time in the ordinary course of our business.
(2) Represents a credit recorded in connection with the settlement of the equity-based portion of Trinity's contingent consideration that was paid in 2023 in respect of 2022 results.





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Quarterly Disaggregated Revenue
The following table sets forth our unaudited quarterly disaggregated revenue by product line for each of the eight quarters leading up to the period ended March 31, 2022.2023. These unaudited quarterly disaggregated revenue by product line have been prepared on the same basis as our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Three Months Ended
March 31,
2022
December 31, 2021September 30,
2021
June 30,
2021
(in thousands)
Product Line:(1)
Short Distance$4,203 $6,255 $13,403 $5,798 
MediMobility Organ Transport and Jet22,115 17,976 6,543 6,423 
Other312 387 370 730 
Total Revenue$26,630 $24,618 $20,316 $12,951 
Three Months Ended
March 31,
2023
December 31,
2022
September 30,
2022
June 30,
2022
(in thousands)
Passenger Segment
Short Distance$10,425 $9,418 $20,402 $10,963 
Jet and Other8,079 7,081 5,101 7,421 
Total$18,504 $16,499 $25,503 $18,384 
Medical Segment
MediMobility Organ Transport$26,767 $21,636 $20,219 $17,249 
Total$26,767 $21,636 $20,219 $17,249 
Total Revenue$45,271 $38,135 $45,722 $35,633 

Three Months Ended
March 31,
2021
December 31,
2020
September 30, 2020June 30,
2020
(in thousands)
Product Line:(1)
Short Distance$1,051 $2,210 $3,753 $692 
MediMobility Organ Transport and Jet7,727 5,444 4,333 2,573 
Other495 332 233 173 
Total Revenue$9,273 $7,986 $8,319 $3,438 
Three Months Ended
March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
(in thousands)
Passenger Segment
Short Distance$4,203 $6,255 $13,403 $5,798 
Jet and Other(1)9,752 8,541 4,668 5,603 
Total$13,955 $14,796 $18,071 $11,401 
Medical Segment
MediMobility Organ Transport(1)$12,675 $9,822 $2,245 $1,550 
Total$12,675 $9,822 $2,245 $1,550 
Total Revenue$26,630 $24,618 $20,316 $12,951 
__________
(1) Prior period amounts have been updated to conform to current period presentation.

Liquidity and Capital Resources
Sources of liquidityLiquidity
Since inception and until May 2021, Old Blade financed its operations primarily from sales of convertible preferred stock. On May 7, 2021 the Company raised $333.3 million in net proceeds upon the consummation of the merger with EICExperience Investment Corp. (“EIC”) and
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the sale of common stock through a private investment in public equity (“PIPE”) financing. As of March 31, 20222023 and December 31, 2021,2022, we had total liquidity of $176.9 million and $194.0 million, respectively, consisting of cash and cash equivalents of $2.5$41.7 million and $2.6$43.3 million, , respectively, and restricted cashshort-term investments of $1.7$135.2 million and $0.6$150.7 million, , respectively. In addition, as of March 31, 2023 and December 31, 2022, we had $266.6restricted cash of $2.1 million and $1.1 million, respectively. As of March 31, 2023, $135.2 million of short-term investments consisted of securities that are traded in a traded mutual fund which could be liquidated with a one day notice. Wehighly liquid markets.
With $176.9 million of total liquid funds as of March 31, 2023, we anticipate that our available cash and cash equivalents and short-term investments will bewe have sufficient funds to meet our current operational needs for at least the next 12 months from the date of filing this Quarterly Report. Our future capital requirements will depend on many factors including the pace
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Liquidity Requirements
As of March 31, 2022, we2023, the Company had net working capital of $269.5$186.0 million, , includingzero debt, cash and cash equivalents of $2.5 million. We had a net loss of $11.0$41.7 million and $4.2short-term investments of $135.2 million. The Company had net losses of $10.2 million and $11.0 million for the three months ended March 31, 2023 and 2022, and 2021, 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 March 31, 20222023, we had unfulfilled capacitycommitments to purchase agreements withflights from various aircraft operators towith aggregate minimum flight purchase flights with an aggregate valueguarantees of $4.1$9.2 million and $24.7 million for the yearyears ending December 31, 2022, $1.92023 and 2024, respectively, $0.2 million and $16.5 million, respectively, of which may be cancelled by us immediately if a government authority enacts travel restrictions.restrictions and nil and $11.8 million, respectively, of which could be terminated by Blade for convenience upon 30 or 60 days’ notice with the annual minimum guarantee being pro-rated as of the termination date. See “—Capacity Purchase Agreements” within Note 108 to the unaudited interim condensed consolidated financial statements for additional information and for information about future periods. Additionally, the Company has operating lease obligations related to real estate leases with expected annual minimum lease payments of $1.5 million and $1.4 million for the years ending December 31, 2023 and 2024, respectively. See Note 3 “Right-of-Use Asset and Operating Lease Liability” to the unaudited interim condensed consolidated financial statements for additional information and for information about future periods.
We expect to incur net losses in the short term, as we continue to execute our strategic initiatives. Based on our current liquidity, we believe that no additional capital will be needed to execute our current business plan over the next 12 months. Our long-term capital requirementslonger term liquidity requirement will depend on many factors including the pace of our expansion into new markets, our ability to attract and retain fliers,customers for our existing products, capital expenditures acquisitions, as well as the timing of regulatory approval and market adoption of EVAs for urban air mobility.acquisitions.
Cash Flows
The following table summarizes our cash flows for the periods indicated:
Three Months Ended
March 31,
20222021% Change
(in thousands, except percentages)
Net cash used in operating activities$(10,065)$(605)1,564 %
Net cash provided by (used in) investing activities10,997 (53)(20,849)%
Net cash provided by (used in) financing activities16 (1,753)(101)%
Three Months Ended March 31,
20232022
(in thousands, except percentages)
Net cash used in operating activities$(16,855)$(10,065)
Net cash provided by investing activities16,275 10,997 
Net cash (used in) / provided by financing activities(27)16 
Effect of foreign exchange rate changes on cash balances
Net increase (decrease) in cash and cash equivalents and restricted cash(604)951 
Cash Used In Operating Activities
For the three months ended March 31, 2023, net cash used in operating activities was $16.9 million, primarily driven by $9.5 million of cash used for working capital requirements and a net loss of $10.2 million, adjusted for non-cash items consisting of income from change in fair value of warrant liabilities of $0.6 million, stock-based compensation expense of $3.2 million, depreciation and amortization of $1.7 million, realized loss of $0.1 million from the sale of short-term investments, $1.4 million non-cash accretion of interest income on held-to-maturity securities and deferred tax benefit of $0.2 million. The $9.5 million of cash used for working capital requirements was primarily driven by an increase in accounts receivable of $5.6 million (attributable to the rapid revenue growth in MediMobility Organ Transport), an increase in prepaid expenses and other current assets of $1.6 million (driven by prepayments to operators in connection with capacity purchase agreements) and a decrease in accounts payable and accrued expenses of $3.4 million (driven by the payment of the Trinity contingent consideration compensation and the 2022 short-term incentive plan), partially offset by an increase in deferred revenue of $1.1 million (driven by client prepayments).
For the three months ended March 31, 2022, net cash used in operating activities was $10.1 million, primarily driven by a $0.1 million cash benefit from working capital requirements and a net loss of $11.0 million, partially offset by a change in operating assets and liabilities of $0.1 million and adjusted for non-cash items consisting of income from change in fair value of warrant liabilities of $2.6 million, stock-based compensation expense of $2.1 million and depreciation and amortization of $1.1 million. The net change in operating assets and liabilitiescash benefit from working capital requirements was primarily driven by increases in accounts payable and accrued expenses of $2.6 million and deferred revenue of $0.3 million, partially offset by increases in accounts receivable of $0.5 million, other non-current assets of $0.6 million and prepaid expenses and other current assets of $1.7 million.
For the three months ended March 31, 2021, net cash used in operating activities was $0.6 million, primarily driven by a net loss of $4.2 million, partially offset by a change in operating assets and liabilities of $1.6 million and adjusted for non-cash items consisting of stock-based compensation of $1.9 million and depreciation and amortization of $0.1 million,. The net change in operating assets and liabilities was primarily driven by a $1.9 million increase in accounts payable and accrued expenses and a $0.5 million decrease in accounts receivable, partially offset by a $0.8 million increase in prepaid expenses and other current assets.
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Cash Provided by Investing Activities
For the three months ended March 31, 2023, net cash provided by investing activities was $16.3 million, driven by $16.0 million of proceeds from the sales of other short-term investments, $131.2 million of proceeds from maturities of held-to-maturity investments, partially offset by $130.1 million in purchases of held-to-maturity investments, $0.1 million in purchases of other short-term investments and $0.6 million in purchases of property and equipment (consisting of leasehold improvements, furniture and fixtures and vehicles).
For the three month ended March 31, 2022, net cash provided by investing activities was $11.0 million, driven by $11.7 million of proceeds from the salesales of other short-term investments, partially offset by $0.4 million in purchases of property and equipment and $0.3 million in purchases of short termother short-term investments.
Cash (Used In) Provided by Financing Activities
For the three months ended March 31, 2021,2023, net cash used in investingfinancing activities was $27.0 thousand, primarily reflecting $0.1 million drivencash paid for payroll tax payments made on behalf of employees in exchange for shares withheld by $0.1 million in purchasesthe Company (“net share settlement”), partially offset by $54.0 thousand of property and equipment.proceeds from the exercise of stock options.
Financing Activities
For the three months ended March 31, 2022, net cash provided by financing activities was $0.02 million,$16.0 thousand, primarily reflecting proceeds from the exercise of stock options.
For the three months ended March 31, 2021, net cash used in financing activities was $1.8 million, primarily reflecting deferred recapitalization costs related to the reverse merger.

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

For information on the Company’s significant accounting policies and estimates refer to Note 1 “—Use“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to these policies and Note 2 to the Company’s unaudited interim condensed consolidated financial statements.estimates as of March 31, 2023.
Item 3. Quantitative and qualitative disclosures about market risk
Not applicable.There have been no material changes in market risk from the information provided in "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended December 31, 2022.

Item 4. Controls and Procedures

As of the end of the period covered by this report, our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on their evaluation of our disclosure controls and procedures, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of March 31, 2022,2023, to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is (a) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (b) accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow for timely decisions regarding required disclosure.

Management has concluded that the Company’s disclosure controls and procedures were not effective as of March 31, 2022. We determined that our internal control over financial reporting had the following material weakness -weaknesses:

Management’s evaluation of the design effectiveness of internal controls to prevent or detect material misstatements or omissions has identified a large number of control deficiencies across all business processes
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including information technology (“IT”) general controls related to financially relevant IT applications. Although these deficiencies are not individually material in nature, in aggregate they constitute a material weakness; and
The Company has not developed a formal framework that enables management to assess the operating effectiveness of internal controls over financial reporting including IT general controls related to financially relevant IT applications, specifically lacking evidential matter to support:

Management’s evaluation of whether the internal controls are designed to prevent or detect material misstatements or omissions;
Management’s conclusion that controls tests were appropriately planned and performed to adequately assess the operating effectiveness of the controls; and
That the results of the controlcontrols tests were appropriately considered.
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Management has concluded that these deficiencies may impact the Company’s financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis and represent a material weakness in the Company’s internal control over financial reporting.

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

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

Management’s Plans for Remediation

The Company is remediating thisthese material weaknessweaknesses as efficiently and effectively as possible, with the hiringimplementation in Q4 2022 of a Director of Internal ControlsSOX compliance software to assist in the overall evaluation and documentation of the design and operating effectiveness of our internal controls over financial reporting. This software is being used:
To document specific remediation plans to address all identified key control design gaps and / or weaknesses and track implementation progress of these remediation plans; and
To help ensure appropriate evidential matter is available to support management’s conclusion that controls tests were appropriately planned and performed to adequately assess the operating effectiveness of the controls and that the results of the controls tests were appropriately considered.

These plans are subject to ongoing review by senior management with Audit Committee oversight. As we continue to evaluate and work to improve our internal control over financial reporting, management may implement additional measures to address the material weaknessweaknesses or modify the remediation plan described above and will continue to review and make necessary changes to the overall design of our internal controls over financial reporting. The Company expects to complete the required remedial action during 2022.2023.

Changes in Internal Control over Financial Reporting

Other than the specific remediation steps discussed above, there were no other changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Securities Exchange Act of 1934, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.reporting in the fiscal quarter ending March 31, 2023.

Limitations on Internal Control over Financial Reporting

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


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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In the opinion of management, other than as described below, we are not involved in any claims,
There have been no material changes to our legal actions, or regulatory proceedings as of March 31, 2022, the ultimate disposition of which would have a material adverse effectpreviously disclosed in our Annual Report on our consolidated financial position, results of operations, or cash flows.
On April 1, 2021, Shoreline Aviation, Inc. (SAI) filed an Amended Complaint in the United States District CourtForm 10-K for the Eastern District of New York naming Cynthia L. Herbst, Sound Aircraft Flight Enterprises, Inc. (SAFE), Ryan A. Pilla, Blade Urban Air Mobility, Inc., Robert Wiesenthal and Melissa Tomkiel as defendants. The case is captioned Shoreline Aviation, Inc. v. Sound Aircraft Flight Enterprises, Inc. et al., No. 2:20-cv-02161-JMA-SIL (E.D.N.Y.). The complaint alleged, among other things, claims of misappropriation, violation of the Defend Trade Secrets Act, unfair competition, tortious interference with business relations, constructive trust, tortious interference with contract, and aiding and abetting breach of fiduciary duty against Blade, Robert Wiesenthal and Melissa Tomkiel (together the “Blade Defendants”).
On March 16, 2022, SAI and the Blade Defendants filed a Joint Stipulation and Order of Dismissal with Prejudice in the Court, in which, SAI and the Blade Defendants stipulated and agreed that pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii), all of SAI’s claims against the Blade Defendants were dismissed with prejudice. The Blade Defendants expressly denied any wrongdoing and did not admit any liability.year ended December 31, 2022.

Item 1A. Risk Factors
You should carefully consider the risks described under “Risk Factors” in our Annual Report on Form 10-K for the year ended September 30, 2021.December 31, 2022. These risks could materially affect our business, results of operations or financial condition, cause the trading price of our common stock to decline materially or cause our actual results to differ materially from those expected or those expressed in any forward-looking statements made by, or on behalf of, the Company. These risks are not exclusive, and additional risks to which we are subject include, but are not limited to, the factors mentioned under “Forward-Looking Statements” and the risks of our businesses described elsewhere in this Quarterly Report on Form 10-Q.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Not applicable.
On March 28, 2023, pursuant to the terms of a Purchase and Sale Agreement (the “Purchase Agreement”), dated as of September 2, 2021, by and among Blade Urban Air Mobility, Inc. (“BUAM”), our wholly owned subsidiary, and the other parties thereto, pursuant to which BUAM acquired Trinity Air Medical, Inc., and a related letter agreement, dated February 23, 2023, by and among BUAM and certain of the other parties to the Purchase Agreement, we issued an aggregate of 384,756 shares in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Rule 4(a)(2) thereunder. The shares were issued to two former stockholders of Trinity Air Medical, Inc. in settlement of the equity-based portion of contingent consideration that was owed to them pursuant to the Purchase Agreement in respect of certain fiscal year 2022 results.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other information
NoneNone.




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Item 6. Exhibits
Exhibit No.Description
2.1(1)
3.1(1)(2)
3.2(2)(3)
10.1(4)
31.1*
31.2*
32.1*
32.2*
101.INS*Interactive Data Files pursuant to Rule 405 of Regulation S-T formatted in Inline Extensible Business Reporting Language (“Inline XBRL”)
101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH*XBRL Taxonomy Extension Schema Document
101.DEF*XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

*Filed herewith
(1)Incorporated by reference to Exhibit 2.1 of our Form 8-K (file number 001-39046) filed on May 19, 2022.
(2)Incorporated by reference to Exhibit 3.1 of our Form 8-K (file number 001-39046) filed on May 13, 2021.
(2)(3)Incorporated by reference to Exhibit 3.2 of our Form 8-K (file number 001-39046) filed on May 13, 2021.

(4)
Incorporated by reference to Exhibit 10.1 of our Form 8-K (file number 001-39046) filed on March 30, 2023.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BLADE AIR MOBILITY, INC.
Date: May 10, 202211, 2023By:/s/ Robert S. Wiesenthal
Name:Robert S. Wiesenthal
Title:Chief Executive Officer
(Principal Executive Officer)
Date: May 10, 202211, 2023By:/s/ William A. Heyburn
Name:William A. Heyburn
Title:Chief Financial Officer
(Principal Financial Officer)
Date: May 10, 202211, 2023By:/s/ Amir M. Cohen
Name:Amir M. Cohen
Title:Chief Accounting Officer
(Principal Accounting Officer)
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