499E

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, ~~2022~~2023


o			TRANSITION 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)


Delaware						84-1890381
(State or other jurisdiction of incorporation or organization)						(I.R.S.Employer Identification No.)

~~499 East 34~~th55 Hudson Yards, ~~Street~~14th Floor New York, NY						~~10016~~10001
(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 class

Trading Symbol(s)

Name of each exchange on

which registered

Common Stock, $0.0001 par value per share

BLDE

The Nasdaq Stock Market

Warrants, each exercisable for one share of Common Stock at an exercise price of $11.50 per share

BLDEW

The 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 filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act). Yes o No x

As of May ~~2, 2022,~~5, 2023, there were ~~70,874,320~~73,168,346 shares of the registrant’s Common ~~stock,~~Stock, $0.0001 par value per share, issued and outstanding.

Table of Contents

BLADE AIR MOBILITY, INC.

FORM 10-Q

TABLE OF CONTENTS



































		Page
PART I. FINANCIAL INFORMATION		3
Item 1.	Financial statements	3
	Unaudited Interim Condensed Consolidated Balance Sheets as of March 31, ~~202~~22023 and December 31, ~~2021~~2022	3
	Unaudited Interim Condensed Consolidated Statements of Operations for the three months ended March 31, ~~202~~2 2023 and ~~202~~20221	4
	Unaudited Interim Condensed Consolidated Statements of Comprehensive ~~Loss~~Income (Loss) for the three months ended March 31, ~~2022~~2023 and ~~202~~20221	5
	Unaudited Interim Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, ~~2022~~2023 and ~~202~~20221	6
	Unaudited Interim Condensed Consolidated Statements of Cash Flows for the three months ended March 31, ~~2022~~2023 and ~~202~~12022	7
	Notes to Unaudited Interim Condensed Consolidated Financial Statements	8
Item 2.	Management’s discussion and analysis of financial condition and results of operations	2521
Item 3.	Quantitative and qualitative disclosures about market risk	3635
Item 4.	Controls and procedures	3635

PART II. OTHER INFORMATION		3837
Item 1.	Legal proceedings	3837
Item 1A.	Risk factors	3837
Item 2.	Unregistered sales of equity securities and use of proceeds	3837
Item 3.	Defaults upon senior securities	3837
Item 4.	Mine safety disclosures	3837
Item 5.	Other information	3837
Item 6.	Exhibits	3938
SIGNATURES		40 39

Table of Contents

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, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Assets	Assets					Assets
Current assets:
Current assets						Current assets
Cash and cash equivalents	Cash and cash equivalents	$	2,496	$	2,595	Cash and cash equivalents	$	41,739	$	43,296
Restricted cash	Restricted cash	1,680		630		Restricted cash	2,080		1,127
Accounts receivable	Accounts receivable	6,019		5,548		Accounts receivable	16,462		10,877
Short-term investments (cost: March 31, 2022 - $268,702; December 31, 2021 - $280,263)		266,560		279,374

Short-term investments						Short-term investments	135,209		150,740
Prepaid expenses and other current assets	Prepaid expenses and other current assets	8,503		6,798		Prepaid expenses and other current assets	13,708		12,086
Total current assets	Total current assets	285,258		294,945		Total current assets	209,198		218,126

Non-current assets:	Non-current assets:					Non-current assets:
Property and equipment, net	Property and equipment, net	2,333		2,045		Property and equipment, net	2,445		2,037
Investment in joint venture	Investment in joint venture	200		200		Investment in joint venture	390		390
Intangible assets, net	Intangible assets, net	23,670		24,421		Intangible assets, net	45,399		46,365
Goodwill	Goodwill	13,328		13,328		Goodwill	39,890		39,445
Operating right-of-use asset	Operating right-of-use asset	958		713		Operating right-of-use asset	24,092		17,692
Other non-current assets	Other non-current assets	880		232		Other non-current assets	1,018		970
Total assets	Total assets	$	326,627	$	335,884	Total assets	$	322,432	$	325,025

Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity					Liabilities and Stockholders' Equity
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable and accrued expenses	Accounts payable and accrued expenses	$	9,012	$	6,369	Accounts payable and accrued expenses	$	11,389	$	16,536
Deferred revenue	Deferred revenue	6,281		5,976		Deferred revenue	7,788		6,709
Operating lease liability, current	Operating lease liability, current	496		438		Operating lease liability, current	4,029		3,362

Total current liabilities	Total current liabilities	15,789		12,783		Total current liabilities	23,206		26,607

Non-current liabilities:	Non-current liabilities:					Non-current liabilities:
Warrant liability	Warrant liability	28,758		31,308		Warrant liability	6,517		7,083
Operating lease liability, long-term	Operating lease liability, long-term	466		278		Operating lease liability, long-term	20,792		14,970
Deferred tax liability	Deferred tax liability	144		144		Deferred tax liability	1,716		1,876
Total liabilities	Total liabilities	45,157		44,513		Total liabilities	52,231		50,536

Commitments and Contingencies (Note 10)		0		0
Commitments and Contingencies (Note 8)						Commitments and Contingencies (Note 8)

Stockholders' Equity	Stockholders' Equity					Stockholders' 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.		7		7
Additional paid-in capital		370,794		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.	7		7
Additional paid in capital						Additional paid in capital	380,852		375,873
Accumulated other comprehensive income						Accumulated other comprehensive income	3,212		2,287
Accumulated deficit	Accumulated deficit	(87,430)		(76,418)		Accumulated deficit	(113,870)		(103,678)
Total stockholders' equity	Total stockholders' equity	281,470		291,371		Total stockholders' equity	270,201		274,489

Total Liabilities and Stockholders' Equity	Total 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,
2022 2021
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 expenses 40,320 13,498
Loss from operations (13,690) (4,225)
Other non-operating income
Change in fair value of warrant liabilities 2,550 —
Interest income, net 264 4
Realized loss from sale of short term investments (136) —
Total other non-operating income 2,678 4
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:
Basic 70,774,138 26,099,102
Diluted 70,774,138 26,099,102
~~__________~~


	Three Months Ended March 31,
	2023		2022
Revenue	$	45,271	$	26,630

Operating expenses
Cost of revenue	38,107		23,707
Software development	1,123		835
General and administrative	16,257		13,978
Selling and marketing	2,611		1,800
Total operating expenses	58,098		40,320

Loss from operations	(12,827)		(13,690)

Other non-operating income (expense)
Interest income, net	1,954		264
Change in fair value of warrant liabilities	566		2,550
Realized loss from sales of short-term investments	(81)		(136)


Total other non-operating income	2,439		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:
Basic	71,992,771		70,774,138
Diluted	71,992,771		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 2021~~Income (Loss)

(in thousands)


		Three Months Ended March 31,					Three Months Ended March 31,
		2022		2021			2023		2022
Net loss	Net 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 loss						Less: Reclassification adjustment for losses included currently in net loss	51		136
Foreign currency translation adjustments for the period	Foreign currency translation adjustments for the period	241		—		Foreign currency translation adjustments for the period	845		241
Other comprehensive income (loss)						Other comprehensive income (loss)	925		(1,003)
Comprehensive loss	Comprehensive loss	$	(12,015)	$	(4,221)	Comprehensive loss	$	(9,267)	$	(12,015)

See Notes to Unaudited Interim Condensed Consolidated Financial Statements

Table of Contents

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 Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated
Deficit Total
Stockholders'
Equity
Shares Amount
Balance at January 1, 2022 70,667,381 $ 7 $ 368,680 $ (898) $ (76,418) $ 291,371
Issuance of common stock upon exercise of stock options 115,103 21 21
Issuance of common stock upon settlement of restricted stock units 65,965
Stock-based compensation - restricted stock 2,098 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, 2022 70,845,636 $ 7 $ 370,794 (1,901) (87,430) $ 281,470
Balance at January 1, 2021 26,069,962 $ 3 $ 49,492 $ — $ (39,499) $ 9,996
Issuance of common stock upon exercise of stock options 45,878 17 17
Stock-based compensation - restricted stock 1,795 1,795
Stock-based compensation - stock options 109 109
Comprehensive loss:
Net loss (4,221) (4,221)
Balance at March 31, 2021 26,115,840 $ 3 $ 51,413 $ — $ (43,720) $ 7,696


	Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
		Shares			Amount
Balances as of January 1,2023		71,660,617	$	7		$	375,873	$	2,287	$	(103,678)	$	274,489
Issuance of common stock upon exercise of stock options		300,785	—			54		—		—		54
Issuance of common stock upon settlement of restricted stock units		159,875	—			—		—		—		—
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, 2023		72,498,822	$	7		$	380,852	$	3,212	$	(113,870)	$	270,201

Balances as of January 1,2022		70,667,381	$	7		$	368,680	$	(898)	$	(76,418)	$	291,371
Issuance of common stock upon exercise of stock options		115,103	—			21		—		—		21
Issuance of common stock upon settlement of restricted stock units		65,965	—			—		—		—		—
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, 2022		70,845,636	$	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,
	2023		2022
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 amortization	1,652		1,145
Stock-based compensation	3,221		2,098
Change in fair value of warrant liabilities	(566)		(2,550)

Realized loss from sales of short-term investments	81		136
Realized foreign exchange (gain)/loss	5		(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 liabilities	77		1
Accounts payable and accrued expenses	(3,383)		2,636
Deferred revenue	1,080		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 investments	16,000		11,699
Purchase of held-to-maturity investments	(130,145)		—
Proceeds from maturities of held-to-maturity investments	131,187		—
Net cash provided by investing activities	16,275		10,997

Cash Flows From Financing Activities:
Proceeds from the exercise of common stock options	54		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	3		3
Net increase (decrease) in cash and cash equivalents and restricted cash	(604)		951
Cash and cash equivalents and restricted cash - beginning	44,423		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 cash	2,080		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,
2022 2021
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 amortization 1,145 126
Stock-based compensation 2,098 1,904
Change in fair value of warrant liabilities (2,550) —
Realized loss from sale of short term investments 136 —
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 1 (2)
Accounts payable and accrued expenses 2,636 1,872
Deferred revenue 304 (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 investments 11,699 —
Net cash provided by (used in) investing activities 10,997 (53)
Cash Flows From Financing Activities:
Proceeds from the exercise of stock options 21 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 activities 16 (1,753)
Effect of foreign exchange rate changes on cash balances 3 —
Net increase (decrease) in cash and cash equivalents and restricted cash 951 (2,411)
Cash and cash equivalents and restricted cash - beginning 3,225 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 cash 1,680 415
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 ~~Basis~~Summary of ~~Presentation~~Significant 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. ~~Blade~~Blade’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 provides~~model, 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, ~~2022~~2023 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 change~~Company’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 30~~related 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 began~~Unaudited 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 December~~our 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.

~~Table of Contents~~

~~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 ~~carrying~~fair 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 under~~Recently 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 ~~Revenue~~to recognize and measure contract assets and contract liabilities from ~~Contracts~~contracts with ~~Customers. The core principle of~~customers 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 passes~~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.

~~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 ~~payments~~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.

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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 pass~~passes is recognized ratably over the term of the pass. For travel that has more than one flight segment, the Company deems each segment as a separate performance obligation and recognizes revenue for each segment as travel occurs. Fees charged in association with add-on services or changes or extensions to non-refundable seats sold are considered part of the Company's passenger performance obligation. As such, those fees are deferred at the time of collection and recognized at the time the travel is provided.

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, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company's contract liability balance ~~is $6,281~~was $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,
2022 2021
Balance, beginning of period $ 5,976 $ 4,418
Additions 15,835 9,246
Revenue recognized (15,530) (9,249)
Balance, end of period $ 6,281 $ 4,415


	Three Months Ended March 31,
		2023		2022
Balance, beginning of period		$	6,709	$	5,976
Additions		13,599		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, ~~its~~the second and third ~~quarters~~quarter (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 ~~Canada~~Europe 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 Transport~~Jet and ~~Jet~~Other – ~~Consisting~~Consists 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

•~~Other~~MediMobility Organ Transport – ~~Consists principally~~Consisting of ~~revenues from ground~~ transportation ~~services and brand partners~~of 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,
2022 2021
Product Line(1):
Short Distance $ 4,203 $ 1,051
MediMobility Organ Transport and Jet 22,115 7,727
Other 312 495
Total Revenue $ 26,630 $ 9,273


	Three Months Ended March 31,
	2023		2022
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, 2023		December 31, 2022
Operating leases:
Operating right-of-use asset	$	24,092	$	17,692
Operating lease liability, current	4,029		3,362
Operating lease liability, long-term	20,792		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,
	2023		2022
Lease cost:
Short-term lease cost	$	94	$	38
Operating lease cost	467		183
Operating lease cost - Cost of revenue	990		—
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 ~~Revenue~~revenue.

Other information related to leases is presented below:


	March 31, 2023
Weighted-average discount rate – operating lease	9.00	%
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
2024	6,125
2025	4,989
2026	3,969
2027	3,828
Thereafter	10,622
Total future minimum lease payments, undiscounted	34,110
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:


	Options	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Weighted Average Remaining Life (years)	Intrinsic Value
Outstanding – January 1, 2023	7,603,864	$	0.19	$	0.21	4.6	$	25,795
Granted	—	—		—
Exercised	(300,785)	0.18		0.24
Forfeited	—	—		—
Outstanding – March 31, 2023	7,303,079	$	0.19	$	0.21	4.3	$	23,312
Exercisable as of March 31, 2023	7,303,079	$	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, 2023	7,466,636	$	5.52
Granted	177,389	3.26
Vested	(160,237)	8.09
Forfeited	(24,751)	6.49
Non-vested – March 31, 2023	7,459,037	$	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,
	2023		2022
Software development	$	168	$	275
General and administrative(1)	2,636		1,723
Selling and marketing	78		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,
	2023			2022


Segment revenue
Passenger	$	18,504		$	13,955
Medical	26,767			12,675
Total revenue	$	45,271		$	26,630

Segment Flight Profit
Passenger	$	2,812		$	689
Medical	4,352			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)
Medical	1,637			522
Consolidated net loss from reportable segments	(3,481)			(4,994)
Unallocated corporate costs & software development(2)	(9,346)			(8,696)
Other non-operating income	2,439			2,678
Loss before income taxes	$	(10,388)		$	(11,012)


























Segment Flight Margin
Passenger	15.2		%	4.9		%
Medical	16.3		%	17.6		%
Total Flight Margin	15.8		%	11.0		%























	March 31, 2023			December 31, 2022
Goodwill
Passenger	$	26,562		$	26,117
Medical	13,328			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,
	2023		2022


Revenue
United States	$	37,999	$	24,843


Other	7,272		1,787
Total revenue	$	45,271	$	26,630

	March 31, 2023		December 31, 2022
Long-lived assets
United States	$	13,806	$	7,195
Other	12,731		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,
	2023		2022


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 outstanding	71,992,771		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,
	2023	2022


Warrants to purchase shares of common stock	14,166,644	14,166,666
Options to purchase shares of common stock	7,303,079	7,969,573
Restricted shares of common stock	7,459,037	2,471,923
Total potentially dilutive securities	28,928,760	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.





	Level	March 31, 2023		December 31, 2022
Warrant liabilities - Public Warrants	1	$	4,217	$	4,583
Warrant liabilities - Private Warrants	2	2,300		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

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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 ~~arrangements~~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 reflects the key operating metric we use to evaluate the Passenger segment:


	Three Months Ended March 31,
	2023	2022
Seats flown – all passenger flights	28,550	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.

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.

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 Administrative~~Capacity 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 accordance~~Blade has contractual relationships with ~~ASC 718,~~ ~~Compensation - Stock Compensation~~various 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 7~~pays the operator contractually agreed fees (carrier costs) for ~~additional information.~~

~~Net Loss per Common Share~~

~~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, which~~fees 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, 2022 December 31, 2021
Furniture and fixtures 5 $ 530 $ 520
Technology equipment 3 435 351
Leasehold improvements Shorter of useful life or life of lease 2,715 2,512
Vehicles 5 378 239
Total property and equipment, gross 4,058 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 Hedgin~~g (“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 influence~~also responsible for landing fees and ~~control over FlyBlade India.~~

~~The Company has recorded~~other 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 that~~without 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 and~~2023, 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 $132~~2023, 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, 2022 December 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 Canada 5 years $ 12,617 $ (841) $ 11,776 $ 12,357 $ (206) $ 12,151
Customer list 5-10 years 11,542 (1,270) 10,272 11,542 (957) 10,585
Domain name Indefinite 504 — 504 504 — 504
Trademarks 6-10 years 1,006 (93) 913 1,006 (51) 955
Developed technology 3 years 250 (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 ~~are~~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 ~~follows:~~

For the Year Ended December 31,
2022 (nine months) $ 3,017
2023 3,938
2024 3,810
2025 3,751
2026 3,751

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 ~~direct~~unfulfilled obligation for the ~~use~~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 ~~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 stated~~Legal 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 ~~rate~~aggregate, 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, 2022 December 31, 2021
Operating right-of-use asset $ 958 $ 713
Operating lease liability, current 496 438
Operating lease liability, long term 466 278

~~The following provides details of the Company’s lease expense:~~

Three Months Ended March 31,
Lease cost: 2022 2021
Short-term lease cost $ 38 $ 12
Operating lease cost 183 115
Total $ 221 $ 127

~~Other information related to leases is presented below:~~

~~March 31, 2022~~

~~Weighted-average discount rate – operating lease~~

~~5.00 %~~

~~Weighted-average remaining lease term – operating lease (in months)~~

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
2023 468
2024 103
2025 28
Total future minimum lease payments, undiscounted 1,012
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:~~

Options Weighted
Average
Exercise Price
Weighted
Average
Grant Date
Fair Value
Weighted
Average
Remaining
Life
(years)
Intrinsic
Value
Outstanding – January 1, 2022 8,084,676 $ 0.19 $ 0.21 5.6 $ 69,875
Granted — — —
Exercised (115,103) 0.18 0.34
Forfeited — — —
Outstanding – March 31, 2022 7,969,573 $ 0.19 $ 0.21 5.3 $ 67,126
Exercisable as of March 31, 2022 7,969,573 $ 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, 2022 2,373,523 $ 8.22
Granted 150,556 7.21
Vested (41,340) 7.61
Forfeited (10,816) 8.67
Non-vested – March 31, 2022 2,471,923 $ 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,
2022 2021
Software development $ 275 $ 71
General and administrative 1,723 1,833
Selling and marketing 100 —
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)

Note 9 – Warrant Liabilities

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

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;

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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,
2022 2021
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 outstanding 70,774,138 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 3: Unobservable inputs based on management’s assessment of the assumptions that market participants would use in pricing the asset or liability.





	Level	March 31, 2023		December 31, 2022
Warrant liabilities - Public Warrants	1	$	4,217	$	4,583
Warrant liabilities - Private Warrants	2	2,300		2,500
Fair value of aggregate warrant liabilities		$	6,517	$	7,083

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