blde-20220630

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: June 30, 2022


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.)

55 Hudson Yards, 14th Floor New York, NY						10001
(Address of principal executive offices)						(Zip Code)


			(212) 967-1009
			(Registrant’s telephone number, including area code)

Securities registered 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 August 2, 2022, there were 71,432,103 shares of the registrant’s Common 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 June 3 0 , 2022 and December 31, 2021	3
	Unaudited Interim Condensed Consolidated Statements of Operations for the three and six months ended June 3 0 , 2022 and 2021	4
	Unaudited Interim Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 3 0 , 2022 and 2021	5
	Unaudited Interim Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 3 0 , 2022 and 2021	6
	Unaudited Interim Condensed Consolidated Statements of Cash Flows for the six months ended June 3 0 , 2022 and 2021	8
	Notes to Unaudited Interim Condensed Consolidated Financial Statements	9
Item 2.	Management’s discussion and analysis of financial condition and results of operations	22
Item 3.	Quantitative and qualitative disclosures about market risk	36
Item 4.	Controls and procedures	36

PART II. OTHER INFORMATION		38
Item 1.	Legal proceedings	38
Item 1A.	Risk factors	38
Item 2.	Unregistered sales of equity securities and use of proceeds	38
Item 3.	Defaults upon senior securities	38
Item 4.	Mine safety disclosures	38
Item 5.	Other information	38
Item 6.	Exhibits	39
SIGNATURES		40

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BLADE AIR MOBILITY, INC.

Unaudited Interim Condensed Consolidated Balance Sheets

June 30, 2022 and December 31, 2021

(in thousands, except share and per share data)





	June 30, 2022		December 31, 2021
Assets
Current assets
Cash and cash equivalents	$	186,556	$	2,595
Restricted cash	1,690		630
Accounts receivable	9,672		5,548
Short-term investments (cost: June 30, 2022 - $70,308; December 31, 2021 - $280,263)	69,607		279,374
Prepaid expenses and other current assets	10,700		6,798
Total current assets	278,225		294,945

Non-current assets:
Property and equipment, net	2,304		2,045
Investment in joint venture	200		200
Intangible assets, net	22,743		24,421
Goodwill	13,328		13,328
Operating right-of-use asset	6,003		713
Other non-current assets	1,384		232
Total assets	$	324,187	$	335,884

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses	$	7,648	$	6,369
Deferred revenue	8,500		5,976
Operating lease liability, current	2,364		438

Total current liabilities	18,512		12,783

Non-current liabilities:
Warrant liability	9,492		31,308
Operating lease liability, long-term	3,748		278
Deferred tax liability	144		144
Total liabilities	31,896		44,513

Commitments and Contingencies (Note 9)

Stockholders' Equity
Preferred stock, $0.0001 par value, 2,000,000 shares authorized at June 30, 2022 and December 31, 2021. No shares issued and outstanding at June 30, 2022 and December 31, 2021.	—		—
Common stock, $0.0001 par value; 400,000,000 authorized; 71,397,326 and 70,667,381 shares issued at June 30, 2022 and December 31, 2021, respectively.	7		7
Additional paid in capital	371,690		368,680
Accumulated other comprehensive loss	(388)		(898)
Accumulated deficit	(79,018)		(76,418)
Total stockholders' equity	292,291		291,371

Total Liabilities and Stockholders' Equity	$	324,187	$	335,884

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 and Six Months Ended June 30, 2022 and 2021

(in thousands, except share and per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenue	$	35,633	$	12,951	$	62,263	$	22,224

Operating expenses
Cost of revenue (1)	30,522		9,976		54,229		17,773
Software development (1)	1,062		323		1,897		612
General and administrative (1)	12,144		9,808		26,122		14,633
Selling and marketing (1)	1,638		615		3,438		1,202
Total operating expenses	45,366		20,722		85,686		34,220

Loss from operations	(9,733)		(7,771)		(23,423)		(11,996)

Other non-operating income (expense)
Change in fair value of warrant liabilities	19,266		(14,913)		21,816		(14,913)
Realized loss from sales of short term investments	(1,576)		—		(1,712)		—
Recapitalization costs attributable to warrant liabilities	—		(1,742)		—		(1,742)
Interest income, net	455		140		719		144

Other non-operating income (expense)	18,145		(16,515)		20,823		(16,511)





Net income (loss)	$	8,412	$	(24,286)	$	(2,600)	$	(28,507)

Net income (loss) per share (Note 7):
Basic	$	0.11	$	(0.47)	$	(0.04)	$	(0.74)
Diluted	$	0.10	$	(0.47)	$	(0.04)	$	(0.74)
Weighted-average shares used to compute net income ( loss) per share:
Basic	71,051,523		51,569,634		70,913,597		38,547,863
Diluted	78,497,356		51,569,634		70,913,597		38,547,863

(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 Income (Loss)

Three and Six Months Ended June 30, 2022 and 2021

(in thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income (loss)	$	8,412	$	(24,286)	$	(2,600)	$	(28,507)
Other comprehensive income (loss):
Unrealized investment losses	(140)		—		(1,520)		—
Less: Reclassification adjustment for losses included currently in net income (loss)	1,576		—		1,712		—
Foreign currency translation adjustments for the period	77		—		318		—
Other comprehensive income	1,513		—		510		—
Comprehensive income (loss)	$	9,925	$	(24,286)	$	(2,090)	$	(28,507)

See Notes to Unaudited Interim Condensed Consolidated Financial Statements

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BLADE AIR MOBILITY, INC.

Unaudited Interim Condensed Consolidated Statements of Stockholders' Equity

Three and Six Months Ended June 30, 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
Balances as of April 1,2022		70,845,636	$	7		$	370,794	$	(1,901)	$	(87,430)	$	281,470
Issuance of common stock upon exercise of stock options		325,040	—			58		—		—		58
Issuance of common stock upon settlement of restricted stock units		356,376	—			—		—		—		—
Stock-based compensation - restricted stock		—	—			1,844		—		—		1,844

Shares withheld related to net share settlement		(129,726)	—			(1,006)		—		—		(1,006)




Other comprehensive income		—	—			—		1,513		—		1,513
Net income		—	—			—		—		8,412		8,412
Balances as of June 30, 2022		71,397,326	$	7		$	371,690	$	(388)	$	(79,018)	$	292,291

Balances as of April 1, 2021		26,115,840	$	3		$	51,413	$	—	$	(43,720)	$	7,696
Issuance of common stock upon exercise of stock options		9,627	—			5		—		—		5
Stock-based compensation- restricted stock		—	—			1,862		—		—		1,862
Stock-based compensation- stock options		—	—			656		—		—		656
Shares withheld related to net share settlement		—	—			(52)		—		—		(52)

EIC shares recapitalized, net of issuance costs and the fair value of warrant liabilities		30,778,021	3			191,180		—		—		191,183
Shares issued in PIPE, net of issuance costs		12,500,000	1			119,633		—		—		119,634
Net loss		—	—			—		—		(24,286)		(24,286)




Balance as of June 30, 2021		69,403,488	$	7		$	364,697	$	—	$	(68,006)	$	296,698

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	Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
		Shares			Amount

Balance 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		440,143	—			79		—		—		79
Issuance of common stock upon settlement of restricted stock units		422,341	—			—		—		—		—
Stock-based compensation - restricted stock		—	—			3,942		—		—		3,942

Shares withheld related to net share settlement		(132,539)	—			(1,011)		—		—		(1,011)




Other comprehensive income		—	—			—		510		—		510
Net loss		—	—			—		—		(2,600)		(2,600)
Balances as of June 30, 2022		71,397,326	$	7		$	371,690	$	(388)	$	(79,018)	$	292,291

Balance as of January 1, 2021		26,069,962	$	3		$	49,492	$	—	$	(39,499)	$	9,996
Issuance of common stock upon exercise of stock options		55,505	—			22		—		—		22

Stock-based compensation - restricted stock		—	—			3,657		—		—		3,657
Stock-based compensation - stock options		—	—			765		—		—		765
Shares withheld related to net share settlement		—	—			(52)		—		—		(52)
EIC shares recapitalized, net of issuance costs and the fair value of warrant liabilities		30,778,021	3			191,180		—		—		191,183
Shares issued in PIPE, net of issuance costs		12,500,000	1			119,633		—		—		119,634




Net loss		—	—			—		—		(28,507)		(28,507)

Balance as of June 30, 2021		69,403,488	$	7		$	364,697	$	—	$	(68,006)	$	296,698

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

Six Months Ended June 30, 2022 and 2021

(in thousands)


	Six Months Ended June 30,
	2022		2021
Cash Flows From Operating Activities:
Net loss	$	(2,600)	$	(28,507)
Adjustments to reconcile net loss to net cash and restricted cash used in operating activities:
Depreciation and amortization	2,300		266
Stock-based compensation	3,942		4,422
Change in fair value of warrant liabilities	(21,816)		14,913
Realized loss from sales of short term investments	1,712		—
Unrealized foreign exchange gain / losses	(5)		—

Recapitalization costs attributable to warrant liabilities	—		1,742
Loss on disposal of property and equipment	65		—
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(3,902)		(5,745)
Accounts receivable	(4,124)		(167)
Other non-current assets	(1,152)		(32)
Operating right-of-use assets/lease liabilities	106		18
Accounts payable and accrued expenses	1,275		2,419
Deferred revenue	2,524		848

Net cash used in operating activities	(21,675)		(9,823)

Cash Flows From Investing Activities:


Purchase of property and equipment	(626)		(197)
Purchase of short-term investments	(453)		(303,163)
Proceeds from sales of short-term investments	208,700		—
Net cash provided by / (used in) investing activities	207,621		(303,360)

Cash Flows From Financing Activities:
Proceeds from the exercise of common stock options	79		22
Taxes paid related to net share settlement of equity awards	(1,011)		—


Repayment of note payable	—		(1,165)
Proceeds from recapitalization of EIC, net of issuance costs	—		214,988
Proceeds from sale of common stock in PIPE, net of issuance costs	—		119,634
Net cash (used in) / provided by financing activities	(932)		333,479

Effect of foreign exchange rate changes on cash balances	7		—
Net increase in cash and cash equivalents and restricted cash	185,021		20,296
Cash and cash equivalents and restricted cash - beginning	3,225		10,337
Cash and cash equivalents and restricted cash - ending	$	188,246	$	30,633

Reconciliation to the unaudited interim condensed consolidated balance sheets
Cash and cash equivalents	$	186,556	$	30,003
Restricted cash	1,690		630
Total	$	188,246	$	30,633






Non-cash investing and financing activities
New leases under ASC 842 entered into during the period	$	5,871	$	13

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)

Note 1 – Description of Business and Summary of 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 arranges charter and by-the-seat flights using helicopters, jets, turboprops, and amphibious seaplanes operating in various locations throughout the United States. Blade’s platform utilizes a technology-powered, asset-light business model. Blade provides 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 and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022. 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.

On February 1, 2022, the Board of Directors approved a change of the Company’s fiscal year-end from September 30 to December 31. The Company’s 2022 fiscal year began on January 1, 2022 and will end on December 31, 2022.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include, but are not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

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BLADE AIR MOBILITY, INC.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

(amounts in thousands, except share and per share data)

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected to use such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company that is not an emerging growth company or is an emerging growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company bases its estimates on historical experience, current business factors, and various other assumptions that the Company believes are necessary to consider to form a basis for making judgments about the carrying values of assets and liabilities, the recorded amounts of revenue and expenses, and the disclosure of contingent assets and liabilities. The Company is subject to uncertainties such as the impact of future events, economic and political factors, and changes in the Company’s business environment; therefore, actual results could differ from these estimates. Accordingly, the accounting estimates used in the preparation of the Company’s financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment evolves.

Changes in estimates are made when circumstances warrant. Such changes in estimates and refinements in estimation methodologies are reflected in reported results of operations; if material, the effects of changes in estimates are disclosed in the notes to the financial statements. Significant estimates and assumptions by management include the allowance for doubtful accounts, the carrying value of long-lived assets, the carrying value of intangible assets and goodwill, revenue recognition, contingencies, the provision for income taxes and related deferred tax accounts, and the fair value of stock options and other stock-based awards.

Reclassification

Certain amounts in prior periods have been reclassified to conform to the current period presentation.

Recently Issued Accounting Standards - 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.

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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)

Recently Issued Accounting Standards - 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 Accounting Standards Codification (“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 2 – Revenue

Revenue Recognition

For Short Distance revenue, seats or monthly or annual flight passes 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.

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.

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

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 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 June 30, 2022 and December 31, 2021, the Company's contract liability balance is $8,500 and $5,976, 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 flights. The Company recognizes

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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)

revenue for expired customer credits and gift cards upon expiration. The table below presents a roll forward of the contract liability balance:


	Six Months Ended June 30,
		2022		2021
Balance, beginning of period		$	5,976	$	4,418
Additions		36,662		22,591
Revenue recognized		(34,138)		(21,743)
Balance, end of period		$	8,500	$	5,266

For the six months ended June 30, 2022, the Company recognized $3,603 of revenue that was included in the contract liability balance as of January 1, 2022. For the six months ended June 30, 2021, the Company recognized $2,224 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, the second and third 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 lines of business:

•Short Distance – Consisting primarily of helicopter and amphibious seaplane flights in the United States and Canada 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). Flights are also available on a full aircraft charter basis. Prices per seat are presented at full dollar value and not rounded.

•MediMobility Organ Transport – Consisting of transportation of human organs for transplant.

•Jet and Other – Consists principally of revenues from non-medical jet charter, 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.

Disaggregated revenue by product line was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Product Line(1):
Short Distance	$	10,963	$	5,798	$	15,166	$	6,849
MediMobility Organ Transport	17,249		1,550		29,924		2,885
Jet and Other	7,421		5,603		17,173		12,490
Total Revenue	$	35,633	$	12,951	$	62,263	$	22,224

__________

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

Cost of Revenue

Cost of revenue consists of flight costs paid to operators of aircraft and cars, landing fees and internal costs incurred in generating ground transportation revenue using the Company's owned cars.

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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)

Note 3 – Intangible Assets

The following table presents information about the Company's intangible assets as of:





		June 30, 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	$	12,705	$	(1,482)	$	11,223	$	12,357	$	(206)	$	12,151
Customer list	5-10 years	11,542		(1,582)		9,960		11,542		(957)		10,585
Domain name	Indefinite	$	504	—		504		504		—		504
Trademarks	6-10 years	$	1,006	(134)		872		1,006		(51)		955
Developed technology	3 years	$	250	(66)		184		250		(24)		226
Total		$	26,007	$	(3,264)	$	22,743	$	25,659	$	(1,238)	$	24,421

For the three months ended June 30, 2022 and 2021, amortization of its finite-lived intangible assets were $1,001 and $47, respectively. For the six months ended June 30, 2022 and 2021, amortization of its finite-lived intangibles assets were $1,998 and $94, respectively.

As of June 30, 2022, the estimated amortization expense of its finite-lived intangible assets for each of the next five years are as follows:


For the Year Ended December 31,
2022 (balance of the year)	$	2,020
2023	3,956
2024	3,827
2025	3,768
2026	3,578

Note 4 – 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.

As of June 30, 2022, the Company have two significant leases and are as follows: an operating lease for office space located at 55 Hudson Yards in New York, New York for an initial term of 2.5 years, signed in May 2022; and aircraft leases that are embedded within one of its capacity purchase agreements, signed in April 2022. The Company allocated the consideration in the capacity purchase agreement to the lease and nonlease components based on their relative standalone value. The lease components of this agreement consist of a lease of up to 6 aircraft for a three-year term, and the nonlease components primarily consist of the costs associated with flight operations. Blade has the right to terminate this agreement without cause upon 60 days written notice, upon such termination the guarantee will be pro-rated to the date of the termination and the operator will be entitled to retain any unapplied deposit 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 determined its best estimate of the standalone value of the individual components by

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BLADE AIR MOBILITY, INC.

Notes to Unaudited Interim Consolidated Financial Statements

(amounts in thousands, except share and per share data)

considering observable information from publicly available market rates. See Note 9, “Commitments and Contingencies”, for additional information about our capacity purchase agreements.

Balance sheet information related to the Company’s leases is presented below:





Operating leases:	June 30, 2022		December 31, 2021
Operating right-of-use asset	$	6,003	$	713
Operating lease liability, current	2,364		438
Operating lease liability, long term	3,748		278

As of June 30, 2022, included in the table above is $2,510, $824 and $1,687 of operating right-of-use asset, current operating lease liability, and long-term operating lease liability, respectively, under aircraft leases that are embedded within a capacity purchase agreement. As of December 31, 2021 there were no aircraft leases embedded within a capacity purchase agreement. As of June 30, 2022, included in the table above is $2,654, $1,064 and $1,690 of operating right-of-use asset, current operating lease liability, and long-term operating lease liability, respectively, under the new office space located at 55 Hudson Yards in New York, New York.

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


	Three Months Ended June 30,				Six Months Ended June 30,
Lease cost:	2022		2021		2022		2021
Short-term lease cost	$	59	$	66	$	97	$	78
Operating lease cost	227		116		410		231
Operating lease cost - cost of revenue	250		—		250		—
Total	$	536	$	182	$	757	$	309

Operating lease costs related to aircraft leases that are embedded within a capacity purchase agreements are reported as part of Cost of Revenue.

Other information related to leases is presented below:


	June 30, 2022
Weighted-average discount rate – operating lease	6.60	%
Weighted-average remaining lease term – operating lease (in years)	2.4

As of June 30, 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	$	1,365
2023	2,699
2024	2,281
2025	300
2026 and thereafter	10
Total future minimum lease payments, undiscounted	6,655
Less: Imputed interest for leases in excess of one year	(543)
Present value of future minimum lease payments	$	6,112

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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)

Note 5 – Stock-Based Compensation

Stock Option Awards

Following is a summary of stock option activities for the six months ended June 30, 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	(440,143)	0.18		0.22
Forfeited	—	—		—
Outstanding – June 30, 2022	7,644,533	$	0.19	$	0.21	5.1	$	32,661
Exercisable as of June 30, 2022	7,644,533	$	0.19	$	0.21	5.1	$	32,661

For the three months ended June 30, 2022 and 2021, the Company recorded $0 and $656, respectively, in stock option expense. For the six months ended June 30, 2022 and 2021, the Company recorded $0 and $765, 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 June 30, 2022, $0 of stock options remain subject to amortization.

Restricted Stock

During the three months ended June 30, 2022, the Company granted an aggregate of 270,357 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, 2022	2,373,523	$	8.22
Granted	420,913	7.27
Vested	(394,430)	8.01
Forfeited	(45,777)	8.88
Non-vested – June 30, 2022	2,354,229	$	8.24

For the three months ended June 30, 2022 and 2021, the Company recorded $1,844 and $1,862 in employee and officers restricted stock compensation expense. For the six months ended June 30, 2022 and 2021, the Company recorded $3,942 and $3,657 in employee and officers restricted stock compensation expense. As of June 30, 2022, unamortized stock-based compensation costs related to restricted share arrangements was $14,970 and will be recognized over a weighted average period of 2.6 years.

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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)

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 June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Software development	$	254	$	86	$	529	$	156
General and administrative	1,495		2,425		3,218		4,259
Selling and marketing	95		7		195		7
Total stock-based compensation expense	$	1,844	$	2,518	$	3,942	$	4,422

Note 6 – 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 (“NOL”) carry forwards, reflecting the inability to demonstrate the realizability of such loss carry forwards.

As of June 30, 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 June 30, 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.

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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)

Note 7 – Earnings Per Share

The Company has granted restricted stock awards with dividend rights that are considered to be participating securities. Accordingly, a portion of the Company’s earnings is allocated to those participating securities in the earnings per share (“EPS”) calculation under the two-class method. Basic earnings per common share is computed using the two-class method by dividing income available to common stockholders after the allocation of dividends and undistributed earnings to the participating securities by the weighted average number of common shares outstanding for the period. Diluted earnings per common share is calculated using the more dilutive of the treasury stock method or the two-class method. Diluted earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised, and is computed after giving consideration to the weighted average dilutive effect of the Company’s stock options, warrants, and nonvested restricted stock, where applicable. Diluted EPS under the two-class method also considers the allocation of earnings to the participating securities. Antidilutive securities are disregarded in earnings per share calculations. Diluted EPS for the three months ended June 30, 2022 shown below reflects the two-class method, as diluted EPS under the two-class method was more dilutive than under the treasury stock method.

A reconciliation of net earnings (loss) and common stock share amounts used in the computation of basic and diluted earnings per share is presented below.


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Basic and dilutive earnings (loss) per common share:
Net income ((loss) attributable to Blade Air Mobility, Inc.	$	8,412	$	(24,286)	$	(2,600)	$	(28,507)
Less: Undistributed earnings allocated to nonvested restricted stockholders	(256)		—		—		—
Basic net earnings (loss) available to common stockholders	8,156		(24,286)		(2,600)		(28,507)
Add: Undistributed earnings allocated to nonvested restricted stockholders	256		—		—		—
Less: Reallocation of undistributed earnings to nonvested restricted stockholders	(233)		—		—		—
Diluted net earnings (loss) available to common stockholders	8,179		(24,286)		(2,600)		(28,507)

Total weighted-average basic common shares outstanding	71,051,523		51,569,634		70,913,597		38,547,863
Effect of dilutive securities:
Stock options	7,445,833		—		—		—
Total effect of dilutive securities	7,445,833		—		—		—
Total weighted-average diluted common shares outstanding	78,497,356		51,569,634		70,913,597		38,547,863

Net earnings (loss) per common share:
Basic earnings (loss) per common share	$	0.11	$	(0.47)	$	(0.04)	$	(0.74)
Dilutive earnings (loss) per common share	$	0.10	$	(0.47)	$	(0.04)	$	(0.74)

The following table represents common stock equivalents that were excluded from the computation of diluted earnings per share for the three and six months ended June 30, 2022 and 2021, because the effect of their inclusion would be anti-dilutive:


	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Warrants to purchase shares of common stock	14,166,644	14,166,666	14,166,644	14,166,666
Options to purchase shares of common stock	—	9,689,826	7,644,533	9,689,826
Restricted shares of common stock	1,051,549	703,137	2,354,229	703,137
Total potentially dilutive securities	15,218,193	24,559,629	24,165,406	24,559,629