blde-20220930

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: September 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 November 2, 2022, there were 71,653,281 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 September 30, 2022 and December 31, 2021	3
	Unaudited Interim Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021	4
	Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2022 and 2021	5
	Unaudited Interim Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2022 and 2021	6
	Unaudited Interim Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 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	25
Item 3.	Quantitative and qualitative disclosures about market risk	39
Item 4.	Controls and procedures	39

PART II. OTHER INFORMATION		41
Item 1.	Legal proceedings	41
Item 1A.	Risk factors	41
Item 2.	Unregistered sales of equity securities and use of proceeds	41
Item 3.	Defaults upon senior securities	41
Item 4.	Mine safety disclosures	41
Item 5.	Other information	41
Item 6.	Exhibits	42
SIGNATURES		43

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BLADE AIR MOBILITY, INC.

Unaudited Interim Condensed Consolidated Balance Sheets

September 30, 2022 and December 31, 2021

(in thousands, except share and per share data)





	September 30, 2022		December 31, 2021
Assets
Current assets
Cash and cash equivalents	$	51,845	$	2,595
Restricted cash	1,139		630
Accounts receivable	11,271		5,548

Short-term investments	150,378		279,374
Prepaid expenses and other current assets	10,773		6,798
Total current assets	225,406		294,945

Non-current assets:
Property and equipment, net	2,220		2,045
Investment in joint venture	390		200
Intangible assets, net	48,533		24,421
Goodwill	31,852		13,328
Operating right-of-use asset	16,944		713
Other non-current assets	1,312		232
Total assets	$	326,657	$	335,884

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses	$	11,562	$	6,369
Deferred revenue	6,036		5,976
Operating lease liability, current	2,627		438

Total current liabilities	20,225		12,783

Non-current liabilities:
Warrant liability	9,067		31,308
Operating lease liability, long-term	14,516		278
Deferred tax liability	144		144
Total liabilities	43,952		44,513

Commitments and Contingencies (Note 9)

Stockholders' Equity
Preferred stock, $0.0001 par value, 2,000,000 shares authorized at September 30, 2022 and December 31, 2021. No shares issued and outstanding at September 30, 2022 and December 31, 2021.	—		—
Common stock, $0.0001 par value; 400,000,000 authorized; 71,506,665 and 70,667,381 shares issued at September 30, 2022 and December 31, 2021, respectively.	7		7
Additional paid in capital	373,223		368,680
Accumulated other comprehensive loss	(2,262)		(898)
Accumulated deficit	(88,263)		(76,418)
Total stockholders' equity	282,705		291,371

Total Liabilities and Stockholders' Equity	$	326,657	$	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 Nine Months Ended September 30, 2022 and 2021

(in thousands, except share and per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenue	$	45,722	$	20,316	$	107,985	$	42,540

Operating expenses
Cost of revenue (1)	36,456		15,855		90,685		33,628
Software development (1)	2,026		844		3,923		1,456
General and administrative (1)	15,812		12,115		41,934		26,748
Selling and marketing (1)	1,856		1,231		5,294		2,433
Total operating expenses	56,150		30,045		141,836		64,265

Loss from operations	(10,428)		(9,729)		(33,851)		(21,725)

Other non-operating income (expense)
Change in fair value of warrant liabilities	425		(3,418)		22,241		(18,331)
Realized loss from sales of short-term investments	(359)		—		(2,071)		—
Recapitalization costs attributable to warrant liabilities	—		11		—		(1,731)
Interest income, net	1,173		309		1,892		453

Total other non-operating income (expense)	1,239		(3,098)		22,062		(19,609)

Loss before income taxes	(9,189)		(12,827)		(11,789)		(41,334)

Income tax expense (benefit)	56		(3,643)		56		(3,643)

Net loss	$	(9,245)	$	(9,184)	$	(11,845)	$	(37,691)

Net loss per share (Note 8):
Basic	$	(0.13)	$	(0.13)	$	(0.17)	$	(0.77)
Diluted	$	(0.13)	$	(0.13)	$	(0.17)	$	(0.77)
Weighted-average shares used to compute net loss per share:
Basic	71,466,085		69,011,623		71,099,764		48,814,039
Diluted	71,466,085		69,011,623		71,099,764		48,814,039

(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 and Nine Months Ended September 30, 2022 and 2021

(in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net loss	$	(9,245)	$	(9,184)	$	(11,845)	$	(37,691)
Other comprehensive income (loss):
Unrealized investment income (loss)	101		(297)		(1,419)		(297)
Less: Reclassification adjustment for losses included currently in net loss	359		—		2,071		—
Foreign currency translation adjustments for the period	(2,334)		—		(2,016)		—
Other comprehensive loss	(1,874)		(297)		(1,364)		(297)
Comprehensive loss	$	(11,119)	$	(9,481)	$	(13,209)	$	(37,988)

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 Nine Months Ended September 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 July 1,2022		71,397,326	$	7		$	371,690	$	(388)	$	(79,018)	$	292,291
Issuance of common stock upon exercise of stock options		10,000	—			2		—		—		2
Issuance of common stock upon settlement of restricted stock units		124,527	—			—		—		—		—
Stock-based compensation - restricted stock		—	—			1,685		—		—		1,685

Shares withheld related to net share settlement		(25,188)	—			(154)		—		—		(154)




Other comprehensive loss		—	—			—		(1,874)		—		(1,874)
Net loss		—	—			—		—		(9,245)		(9,245)
Balances as of September 30, 2022		71,506,665	$	7		$	373,223	$	(2,262)	$	(88,263)	$	282,705

Balances as of July 1, 2021		69,403,488	$	7		$	364,697	$	—	$	(68,006)	$	296,698
Issuance of common stock upon exercise of stock options		698,924	—			120		—		—		120
Stock-based compensation- restricted stock		—	—			3,924		—		—		3,924

Shares withheld related to net share settlement		(6,011)	—			—		—		—		—

EIC shares recapitalized, net of issuance costs and the fair value of warrant liabilities		—	—			(32)		—		—		(32)
Other comprehensive loss		—	—			—		(297)		—		(297)
Net loss		—	—			—		—		(9,184)		(9,184)




Balance as of September 30, 2021		70,096,401	$	7		$	368,709	$	(297)	$	(77,190)	$	291,229

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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		450,143	—			81		—		—		81
Issuance of common stock upon settlement of restricted stock units		546,868	—			—		—		—		—
Stock-based compensation - restricted stock		—	—			5,627		—		—		5,627

Shares withheld related to net share settlement		(157,727)	—			(1,165)		—		—		(1,165)




Other comprehensive loss		—	—			—		(1,364)		—		(1,364)
Net loss		—	—			—		—		(11,845)		(11,845)
Balances as of September 30, 2022		71,506,665	$	7		$	373,223	$	(2,262)	$	(88,263)	$	282,705

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		754,429	—			142		—		—		142

Stock-based compensation - restricted stock		—	—			7,581		—		—		7,581
Stock-based compensation - stock options		—	—			765		—		—		765
Shares withheld related to net share settlement		(6,011)	—			(52)		—		—		(52)
EIC shares recapitalized, net of issuance costs and the fair value of warrant liabilities		30,778,021	3			191,148		—		—		191,151
Shares issued in PIPE, net of issuance costs		12,500,000	1			119,633		—		—		119,634


Other comprehensive loss		—	—			—		(297)		—		(297)

Net loss		—	—			—		—		(37,691)		(37,691)

Balances as of September 30, 2021		70,096,401	$	7		$	368,709	$	(297)	$	(77,190)	$	291,229

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

Nine Months Ended September 30, 2022 and 2021

(in thousands)


	Nine Months Ended September 30,
	2022		2021
Cash Flows From Operating Activities:
Net loss	$	(11,845)	$	(37,691)
Adjustments to reconcile net loss to net cash and restricted cash used in operating activities:
Depreciation and amortization	3,741		457
Stock-based compensation	5,627		8,346
Change in fair value of warrant liabilities	(22,241)		18,331
Recapitalization costs attributable to warrant liabilities	—		1,731
Realized loss from sales of short-term investments	2,071		—
Realized foreign exchange loss	7		—
Accretion of interest income on held-to-maturity securities	(311)		—
Deferred tax benefit	—		(3,643)

Loss on disposal of property and equipment	197		—
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(3,781)		(3,940)
Accounts receivable	(4,461)		39
Other non-current assets	(1,059)		(116)
Operating right-of-use assets/lease liabilities	196		35
Accounts payable and accrued expenses	4,255		600
Deferred revenue	(417)		236
Other	(5)		1
Net cash used in operating activities	(28,026)		(15,614)

Cash Flows From Investing Activities:
Acquisitions, net of cash acquired	(48,101)		(23,065)


Investment in joint venture	(190)		—
Purchase of property and equipment	(719)		(264)
Purchase of short-term investments	(120,489)		(308,772)
Proceeds from sales of short-term investments	248,377		11,300
Net cash provided by / (used in) investing activities	78,878		(320,801)

Cash Flows From Financing Activities:
Proceeds from the exercise of common stock options	81		142
Taxes paid related to net share settlement of equity awards	(1,165)		(52)


Repayment of note payable	—		(1,165)
Proceeds from recapitalization of EIC, net of issuance costs	—		215,101
Proceeds from sale of common stock in PIPE, net of issuance costs	—		119,634
Net cash (used in) / provided by financing activities	(1,084)		333,660

Effect of foreign exchange rate changes on cash balances	(9)		—
Net (decrease) increase in cash and cash equivalents and restricted cash	49,759		(2,755)
Cash and cash equivalents and restricted cash - beginning	3,225		10,337
Cash and cash equivalents and restricted cash - ending	$	52,984	$	7,582

Reconciliation to the unaudited interim condensed consolidated balance sheets
Cash and cash equivalents	$	51,845	$	6,952
Restricted cash	1,139		630
Total	$	52,984	$	7,582






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, per share data and exchange rates)

Note 1 – Description of Business and Summary of Significant Accounting Policies

Description of Business

Blade Air Mobility, Inc. (“Blade” or the “Company”), 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 and abroad. 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 nine months ended September 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.

Currency Conversion

The presentation currency of the Company is U.S. dollars (US$) and the unaudited interim condensed consolidated financial statements have been prepared on this basis. The period ended September 30, 2022 unaudited interim condensed consolidated statement of operations is prepared using average exchange rates of Euro (€) €1.02 to the US$ and Canadian dollars (C$) C$1.29 to the US$. The unaudited interim condensed consolidated balance sheet as at September 30, 2022 has been prepared using the exchange rates on that day of €1.02 to the US$ and C$1.37 to the US$ (December 31, 2021: C$1.27).

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 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 September 30, 2022 and December 31, 2021 was $120,222 and nil, respectively. The market value of the held-to-maturity securities at September 30, 2022 and December 31, 2021 was $120,119 and nil, respectively.

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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)

Other Short-Term Investments

Other short-term investments consist of highly-liquid investments available for sale. As of September 30, 2022, 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 September 30, 2022 and December 31, 2021 was $30,156 and $279,374, respectively. The cost of other short-term investments at September 30, 2022 and December 31, 2021 was $30,399 and $280,263, respectively.

Emerging Growth Company

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

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

Use of Estimates

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

Changes in estimates are made when circumstances warrant. Such changes in estimates and refinements in estimation methodologies are reflected in reported results of operations; if material, the effects of changes in estimates are disclosed in the notes to the financial statements. Significant estimates and assumptions by management include, but are not limited to, the allowance for doubtful accounts, the carrying value of long-lived assets, the carrying 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, the provision for income taxes and related deferred tax accounts, and the fair value of stock-based awards.

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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)

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.

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. 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.

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

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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)

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 September 30, 2022 and December 31, 2021, the Company's contract liability balance was $6,036 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 revenue for expired customer credits and gift cards upon expiration.

The table below presents a roll forward of the contract liability balance:


	Nine Months Ended September 30,
		2022		2021
Balance, beginning of period		$	5,976	$	4,418
Additions		58,470		41,991
Revenue recognized		(58,410)		(41,755)
Balance, end of period		$	6,036	$	4,654

For the nine months ended September 30, 2022, the Company recognized $4,158 of revenue that was included in the contract liability balance as of January 1, 2022. For the nine months ended September 30, 2021, the Company recognized $2,990 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, Canada and France between 10 and 100 miles in distance. Flights are available for purchase both by-the-seat and on a full aircraft charter basis.

•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.

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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)

Disaggregated revenue by product line was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Product Line(1):
Short Distance	$	20,402	$	13,403	$	35,568	$	20,252
MediMobility Organ Transport	20,219		2,245		50,143		5,130
Jet and Other	5,101		4,668		22,274		17,158
Total Revenue	$	45,722	$	20,316	$	107,985	$	42,540

__________

(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.

Note 3 – Acquisitions

Acquisition of Blade Europe

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 (the “Shares”) 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”). These acquisitions are part of Blade growth strategy of leveraging its asset-light model, technology and recognized brand to aggregate the 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.

We hereafter refer to the three European legal entities (Blade Europe, Blade France and Blade Monaco) collectively as “Blade Europe”.

Prior to the completion of the acquisition, the sellers completed a series of reorganization transactions in which all assets and liabilities relating to the distribution and commercial passenger transportation activities of Héli Sécurité SAS, a French société par actions simplifiée (“Héli Sécurité”) and Azur Hélicoptère SAS, a French société par action simplifiée (“Azur”) were transferred to Héli Tickets France and all assets and liabilities relating to the distribution and commercial passenger transportation activities of Monacair S.A.M., a Monegasque société anonyme (“Monacair” and collectively with Héli Sécurité and Azur, the “Operators”) were transferred to Helicopter Monaco.

Simultaneously with the acquisition, on September 1, 2022 Blade Europe entered into an Aircraft Operator Agreement (the “Europe AOA”) with the sellers and the Operators. The Europe AOA governs the terms of the operating relationship between the parties thereto, including among other things, the right of Blade to act as exclusive air charter broker and/or reseller of the air transportation services to be operated and provided by the Operators thereto for specific routes at pre-negotiated fixed hourly rates and with a minimum number of annual flight hours guaranteed to the Operators by Blade. The

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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)

agreement’s initial term ends on December 31, 2032 and it will thereafter automatically renew for successive three year periods.

The Company accounted for the lease component of the minimum guarantee included in the Europe AOA as an embedded lease, with a corresponding balance included in the operating right-of-use (“ROU”) asset and lease liability reported in the Company’s unaudited interim condensed consolidated balance sheets (see Note 5).

Blade paid an aggregate cash purchase price for the Shares of Héli Tickets France and Helicopter Monaco of €47,800 ($48,101). Acquisition costs of $2,785 were expensed as incurred and are included in general and administrative expenses in the unaudited interim condensed consolidated statement of operations for the period ended September 30, 2022.

The results of Blade Europe for the period from the September 1, 2022 (“acquisition date”) to September 30, 2022 are included in the Short Distance line of business.

Net Assets Acquired

The assets acquired and liabilities assumed have been included in the unaudited interim condensed consolidated financial statements as of the acquisition date. Total assets acquired included a preliminary estimate of identifiable intangible asset of $28,861. At the time of acquisition, the Company recognized an asset for a preliminary estimate of goodwill, determined as the excess of the purchase price over the net fair value of the assets acquired and liabilities assumed that amounted to $19,026. The value of the components within goodwill included expected revenue and cost synergies, exclusivity rights for transportation services, new customers and key personnel.

The purchase price allocation is preliminary and, as additional information becomes available, the Company may further revise the preliminary purchase price allocation during the remainder of the measurement period, which will not exceed 12 months from the acquisition date. Measurement period adjustments will be recognized in the reporting period in which the adjustment amounts are determined. The purchase price was allocated on a preliminary basis as follows:


Accounts receivable	$	1,307
Prepaid expenses and other current assets	190
Property and equipment, net	143
Identifiable intangible assets	28,861
Operating right-of-use asset	11,913
Other non-current assets	69
Total identifiable assets acquired	42,483
Accounts payable and accrued expenses	1,003
Operating lease liability	11,913
Deferred revenue	492
Total liabilities assumed	13,408
Net assets acquired	29,075
Goodwill	19,026
Total consideration	$	48,101

A preliminary assessment of the fair value of identified intangible assets and their respective lives as of the acquisition date are as follows:


	Estimated Useful Life	Fair Value
Exclusive rights to air transportation services	10	$	25,975
Customer list	3	2,886
Total identifiable intangible assets		$	28,861

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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)

Preliminary identified intangible assets in the table above are amortized on a straight-line basis over the estimated useful lives. The Company believes that the straight-line method of amortization is the most appropriate methodology as it is supported by the pattern in which the economic benefits of the intangible assets are consumed.

Unaudited Pro Forma Information

The following unaudited pro forma financial information presents what our results would have been had Blade Europe been acquired on January 1, 2021. The unaudited pro forma information presented below is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the consolidated business had the acquisition actually occurred at the beginning of 2021 or of the results of our future operations of the consolidated business.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Reported Revenue	$	45,722	$	20,316	$	107,985	$	42,540
Impact of Blade Europe	10,846		12,038		23,702		16,624
Pro forma Revenue	$	56,568	$	32,354	$	131,687	$	59,164

The Company did not include net profit (loss) pro forma information as it is deemed impractical. Historical information was not available as the acquired companies have never operated as stand-alone businesses with the distribution and commercial transportation activities being operated by a different party than the operational activities. The pro forma profit (loss) of the acquired companies is based primarily on the hourly flying rates set annually with the Operators through the Europe AOA. As this agreement did not exist prior to the acquisition, it is not possible to compute the pro forma profit (loss) for these entities.

Note 4 – Goodwill and Intangible Assets

The changes in the carrying value of goodwill are as follows:


Goodwill balance, December 31, 2021	$	13,328
Additions(1)	19,026
Foreign currency translation	(502)
Goodwill balance, September 30, 2022	$	31,852

_________

(1) Additions represent goodwill associated with the acquisition of Blade Europe. See Note 3 for additional information.

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





		September 30, 2022						December 31, 2021
	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Exclusive rights to air transportation services(1)(2)	5-10 years	$	36,788	$	(2,127)	$	34,661	$	12,357	$	(206)	$	12,151
Customer list(1)	3-10 years	14,352		(1,974)		12,378		11,542		(957)		10,585
Domain name	Indefinite	504		—		504		504		—		504
Trademarks	6-10 years	1,006		(179)		827		1,006		(51)		955
Developed technology	3 years	250		(87)		163		250		(24)		226
Total		$	52,900	$	(4,367)	$	48,533	$	25,659	$	(1,238)	$	24,421

__________

(1) Includes preliminary estimate for intangible assets associated with the acquisition of Blade Europe. See Note 3 for additional information.

(2) Exclusive rights to air transportation services include exclusive rights to Helijet’s scheduled passenger routes in Canada acquired in 2021.

For the three months ended September 30, 2022 and 2021, amortization of its finite-lived intangible assets were $1,247 and $102, respectively. For the nine months ended September 30, 2022 and 2021, amortization of its finite-lived intangibles assets were $3,246 and $196, respectively.

As of September 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)	$	1,816
2023	7,179
2024	7,051
2025	6,680
2026	5,864

Note 5 – 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 September 30, 2022, the Company has three significant leases: 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 two of our capacity purchase agreements, one signed in April 2022 for a three-year term for up to 6 aircraft and the other signed in September 2022 (the “Europe AOA”, see Note 3). The Europe AOA was signed simultaneously with the acquisition of Blade Europe and is for an initial ten-year term for 14 aircraft. The Company allocated the consideration in the capacity purchase agreements to the lease and nonlease components based on their relative standalone value. The nonlease components for these agreements primarily consist of the costs associated with

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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)

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.

Under the April 2022 capacity purchase agreement, Blade has the right to terminate the agreement without cause upon 60 days’ written notice, upon such termination the 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.

Under the Europe AOA, the number of aircraft available to Blade and the corresponding number of minimum flight hours guaranteed to the operators by Blade, could be adjusted at the beginning of each calendar year upon reaching a mutual agreement.

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:	September 30, 2022		December 31, 2021
Operating right-of-use asset	$	16,944	$	713
Operating lease liability, current	2,627		438
Operating lease liability, long-term	14,516		278

As of September 30, 2022, included in the table above is $13,839, $1,080 and $12,855 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, 2021 there were no aircraft leases embedded within a capacity purchase agreement.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
Lease cost:	2022		2021		2022		2021
Short-term lease cost	$	116	$	43	$	213	$	121
Operating lease cost	341		112		751		343
Operating lease cost - Cost of revenue	398		—		648		—
Total	$	855	$	155	$	1,612	$	464

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:


	September 30, 2022
Weighted-average discount rate – operating lease	8.40	%
Weighted-average remaining lease term – operating lease (in years)	7.7

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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 September 30, 2022, the expected annual minimum lease payments of the Company’s operating lease liabilities were as follows:


For the Year Ended December 31,
Remainder of 2022	$	593
2023	4,535
2024	4,117
2025	2,136
2026	1,847
Thereafter	11,017
Total future minimum lease payments, undiscounted	24,245
Less: Imputed interest for leases in excess of one year	(7,102)
Present value of future minimum lease payments	$	17,143

Note 6 – Stock-Based Compensation

Stock Option Awards

Following is a summary of stock option activities for the nine months ended September 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	(450,143)	0.18		0.22
Forfeited	—	—		—
Outstanding – September 30, 2022	7,634,533	$	0.19	$	0.21	4.8	$	29,335
Exercisable as of September 30, 2022	7,634,533	$	0.19	$	0.21	4.8	$	29,335

For the three months ended September 30, 2022 and 2021, the Company recorded $0 in stock option expense. For the nine months ended September 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 September 30, 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, per share data and exchange rates)

Restricted Stock

During the three months ended September 30, 2022, the Company granted an aggregate of 150,118 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	571,031	6.89
Vested	(518,957)	8.05
Forfeited	(72,580)	8.44
Non-vested – September 30, 2022	2,353,017	$	8.19

For the three months ended September 30, 2022 and 2021, the Company recorded $1,685 and $3,924 in employee and officers restricted stock compensation expense. For the nine months ended September 30, 2022 and 2021, the Company recorded $5,627 and $7,581 in employee and officers restricted stock compensation expense. As of September 30, 2022, unamortized stock-based compensation costs related to restricted share arrangements was $13,943 and will be recognized over a weighted average period of 2.4 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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Software development	$	189	$	325	$	718	$	481
General and administrative	1,439		3,371		4,657