Business Context and Reporting Period
The filing is a Form 10-Q for the quarter and six months ended June 30, 2023. The filing identifies the registrant as Blade Air Mobility, Inc. (Nasdaq: BLDE), not Strata Critical Medical, Inc. Blade operates an asset-light air mobility platform through Passenger and Medical segments and does not own or operate aircraft.
The Passenger segment includes Short Distance and Jet and Other services. The Medical segment provides MediMobility Organ Transport services for transplant centers, hospitals and organ procurement organizations.
Financial Performance and Position
| Metric | Q2 2023 | Q2 2022 | Six Months 2023 | Six Months 2022 |
|---|---|---|---|---|
| Revenue | $61.0 million | $35.6 million | $106.3 million | $62.3 million |
| Loss from operations | $(12.2) million | $(9.7) million | $(25.0) million | $(23.4) million |
| Net income (loss) | $(12.2) million | $8.4 million | $(22.4) million | $(2.6) million |
| Net loss per diluted share | $(0.17) | $0.10 | $(0.31) | $(0.04) |
| Operating cash flow | Not separately presented for the quarter | $(25.1) million | $(21.7) million | |
| Total flight profit | $10.4 million | $5.1 million | $17.5 million | $8.0 million |
| Total flight margin | 17.0% | 14.3% | 16.5% | 12.9% |
Passenger revenue increased 45% to $26.6 million in Q2 and 39% to $45.1 million for the six-month period. Medical revenue increased 99% to $34.4 million in Q2 and 104% to $61.2 million for the six-month period. Jet and Other revenue was essentially flat in Q2 and declined 10% for the six-month period.
Cost of revenue represented 83% of revenue in both Q2 and the six-month period, compared with 86% and 87%, respectively, in the prior-year periods. Management attributed the improvement to greater use of dedicated aircraft, the Blade Europe acquisition, improved passenger pricing and utilization, and lower spot-market jet charter costs.
At June 30, 2023, cash and cash equivalents were $37.3 million, restricted cash was $2.0 million and short-term investments were $132.3 million. Total liquidity, excluding restricted cash, was $169.6 million. The company reported zero debt, net working capital of $179.7 million, total assets of $320.2 million and stockholders’ equity of $260.8 million.
Six-month investing cash flow was $20.0 million, primarily reflecting short-term investment maturities and sales, partially offset by purchases of held-to-maturity securities and $1.4 million of capital expenditures. The company issued no material equity financing during the period; financing cash flow was negative $0.05 million.
Material Changes Versus the Prior Comparable Period
- Revenue grew 71% in both the quarter and six-month period, driven primarily by the Medical segment and the September 2022 acquisition of Blade Europe.
- Seats flown increased to 41,637 in Q2 from 28,241 and to 70,187 for the six-month period from 46,735.
- Despite higher revenue and flight margins, the company remained unprofitable. The six-month net loss widened to $22.4 million from $2.6 million.
- Q2 2022 included a $19.3 million gain from the change in fair value of warrant liabilities; Q2 2023 included a $2.5 million non-cash warrant revaluation expense. For the six-month periods, the comparable amounts were a $21.8 million gain in 2022 and a $1.9 million expense in 2023.
- General and administrative expense increased 52% in Q2 and 33% for the six-month period, primarily due to additional personnel, Blade Europe-related costs, amortization and a $3.0 million Trinity acquisition earn-out compensation expense.
- Passenger Adjusted EBITDA was negative $2.1 million in Q2 and negative $5.1 million for the six-month period, while Medical Adjusted EBITDA was $3.0 million and $4.9 million, respectively.
- Accounts receivable increased to $22.5 million from $10.9 million at year-end 2022, principally reflecting rapid growth in MediMobility Organ Transport.
Guidance, Outlook, Risks and Unusual Items
Management stated that existing liquidity should fund current operational needs and the current business plan for at least the next 12 months, and that no additional capital is expected to be needed over that period. Management also expects short-term net losses as it continues strategic initiatives. No formal revenue or earnings guidance was provided.
The company expects approximately $6.0 million of Trinity acquisition earn-out payments in 2024 for 2023 performance; $3.0 million was accrued during the six months ended June 30, 2023. Remaining capacity purchase obligations totaled $8.9 million for the remainder of 2023 and $18.9 million for 2024, subject to stated termination provisions. Future undiscounted operating lease payments totaled $32.9 million.
The company continues to pursue expansion into new markets and development of its platform for eventual electric vertical aircraft. No such aircraft are currently certified by the FAA for commercial passenger operations in the United States, and the timing and commercial viability of that technology remain uncertain.
Key risks include continued operating losses and negative operating cash flow, dependence on third-party aircraft operators, aircraft availability and pricing, reliance on medical customers and contractual relationships, seasonality, competition, regulatory approval, safety events, technology or cybersecurity failures, international expansion, acquisition integration, inflation and fuel costs, and the need to access additional funding for longer-term growth.
A federal grand jury investigation concerning transplant transportation services was closed on August 2, 2023, and the company stated that it was no longer bound by the related subpoena obligations.
Management concluded that disclosure controls and procedures were not effective as of June 30, 2023 because of material weaknesses in internal control over financial reporting. The weaknesses involved broad control deficiencies, including IT general controls, and inadequate documentation supporting the planning, performance and evaluation of control testing. The company expected to complete remediation during 2023.
Most Important Facts to Verify
- Confirm the issuer identity: the supplied filing is for Blade Air Mobility, Inc., whereas the request metadata names Strata Critical Medical, Inc.
- Assess whether strong revenue and flight-margin growth can offset persistent operating losses, corporate costs and acquisition-related expenses.
- Review the sustainability and collection timing of the substantial increase in medical-segment accounts receivable.
- Evaluate liquidity consumption, including six-month operating cash burn of $25.1 million and contractual aircraft, lease and earn-out obligations.
- Monitor remediation of the disclosed material weaknesses in internal control and disclosure controls.
- Separate recurring operating performance from material non-cash warrant valuation changes and other unusual items.
- Assess the performance and seasonality of Blade Europe, which contributed growth but operated at a loss during the reported period.