Commitment and Contingencies
|9 Months Ended|
Sep. 30, 2023
|Commitments and Contingencies Disclosure [Abstract]|
|Commitments and Contingencies||Commitments and Contingencies
Capacity Purchase Agreements
Blade has contractual relationships with various aircraft operators to provide aircraft service. Under these CPAs, the Company pays the operator contractually agreed fees (carrier costs) for operating these flights. The fees are generally based on fixed hourly rates for flight time multiplied by hours flown. Under these CPAs, the Company is also responsible for landing fees and other costs, which are either passed through by the operator to the Company without any markup or directly incurred by the Company.
As of September 30, 2023, the Company has remaining unfulfilled obligations under agreements with various aircraft operators to provide aircraft service. The remaining unfulfilled obligation includes amounts within operating lease liability related to aircraft leases embedded within our capacity purchase agreements as discussed in Note 3 – Right-of-Use Asset and Operating Lease Liability. These future unfulfilled obligations were as follows:
(1) Within total unfulfilled obligation, the following amounts are where Blade has the ability for immediate termination if a government authority enacts travel restrictions.
(2) Within total unfulfilled obligation, the following amounts are where Blade could terminate for convenience upon 30 or 60 days’ notice, with a one-year annual minimum guarantee being pro-rated as of the termination date.
Legal and Environmental
From time to time, we may be a party to litigation that arises in the ordinary course of business. Other than described below, we do not have any pending litigation that, separately or in the aggregate, would, in the opinion of management, have a material adverse effect on its results of operations, financial condition or cash flows. As of September 30, 2023, management believes, after considering a number of factors, including (but not limited to) the information currently available, the views of legal counsel, the nature of contingencies to which the Company is subject and prior experience, that the ultimate disposition of these other litigation and claims will not materially affect the Company's consolidated financial position or results of operations. The Company records liabilities for legal and environmental claims when a loss is probable and reasonably estimable. These amounts are recorded based on the Company's assessments of the likelihood of their eventual disposition.
In July 2022, Trinity Air Medical, LLC, a wholly owned subsidiary of Blade Urban Air Mobility, Inc., received a federal grand jury subpoena seeking records related to the provision of transplant transportation services. On August 2, 2023, the Company received notice that the grand jury investigation into the transplant transportation services industry has been closed and that the Company is no longer bound by the obligations placed on it by the subpoena.
Contingent Consideration Compensation (earn-out)
On September 15, 2021, the Company completed its acquisition of 100% of Trinity Air Medical, Inc. (“Trinity”) shares. In connection with the Trinity acquisition, potential earn-out payments may be made contingent upon Trinity’s achievement of an EBITDA target for the year 2023. The final earn-out payment will be calculated and is to be paid in the beginning of the calendar year 2024. The sellers are eligible for the earn-out only while employed with the Company, classifying it as compensation expense. At least 70% of the payment is required to be made in cash. For the three and nine months ended September 30, 2023, the Company included an estimate of $2,700 and $5,700, respectively in connection with Trinity’scontingent consideration compensation (earn-out) with a corresponding amount within accounts payable and accrued expenses, the expected final payment is evenly recognized throughout the year as the sellers render their services.
The entire disclosure for commitments and contingencies.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef