Business Context and Reporting Period
The provided filing is a Form 10-K for Blade Air Mobility, Inc., not Strata Critical Medical, Inc. It covers the fiscal year ended September 30, 2021, including the fourth quarter. Blade operates an asset-light air mobility platform that arranges helicopter, seaplane, turboprop and jet transportation through third-party aircraft operators. Its principal businesses are Short Distance, MediMobility Organ Transport and Jet, and Other services.
Blade completed its business combination with Experience Investment Corp. on May 7, 2021 and acquired Trinity Air Medical, Inc. on September 15, 2021. Trinity’s results were included for approximately two weeks in the MediMobility Organ Transport and Jet segment.
Key Financial Metrics
| Metric | FY 2021 | FY 2020 | Change |
|---|---|---|---|
| Revenue | $50.5 million | $23.4 million | Up 116% |
| Cost of revenue | $39.7 million, 79% of revenue | $21.1 million, 90% of revenue | Margin improved |
| Operating expenses | $74.6 million, 148% of revenue | $33.8 million, 144% of revenue | Up 121% |
| Loss from operations | $24.1 million | $10.4 million | Loss increased |
| Net loss | $40.1 million | $10.2 million | Loss increased |
| Basic and diluted loss per share | $0.93 | $0.40 | Loss per share increased |
| Operating cash flow | $(15.6) million | $(10.8) million | Greater use of cash |
| Cash, cash equivalents and restricted cash | $7.6 million | $12.3 million | Down $4.7 million |
| Short-term investments | $297.2 million | None reported | New liquidity source |
Revenue by product line was $22.3 million from Short Distance, $26.3 million from MediMobility Organ Transport and Jet, and $1.9 million from Other. Seats flown increased to 27,665 from 17,346 in 2020, but remained below 32,845 in 2019.
General and administrative expense rose to $29.9 million from $9.3 million, driven by $8.4 million of additional stock-based compensation, $7.3 million of higher professional fees, $2.9 million of higher insurance expense and increased staffing and public-company costs. Stock-based compensation totaled $9.6 million.
Net loss included $18.3 million of non-cash warrant-liability remeasurement expense and $1.7 million of recapitalization costs attributable to warrant liabilities. The company reported a $3.6 million income-tax benefit, substantially related to deferred taxes.
Liquidity, Capital Resources and Debt
Blade raised $333.3 million in net proceeds from the May 2021 business combination and PIPE financing. At September 30, 2021, it reported $304.9 million of net working capital, including $297.2 million of short-term investments that management stated could be liquidated with one day’s notice. Management expected existing liquidity to fund current operations for at least the next 12 months, while also expecting continued near-term net losses.
Net cash used in investing activities was $321.3 million, primarily reflecting $308.8 million invested in short-term investments and $23.1 million paid for Trinity. Financing cash flow was $332.3 million, primarily from the merger and PIPE financing.
The $1.2 million Paycheck Protection Program loan was repaid in full on May 7, 2021. No other material debt was reported. The balance sheet included $42.2 million of warrant liabilities, and the company had 14.2 million warrants outstanding with an exercise price of $11.50 per share.
Material Changes and Management Commentary
- Short Distance revenue increased 135% to $22.3 million as airport-transfer and commuter demand recovered after COVID-19 restrictions eased. New York airport service resumed June 1, 2021.
- MediMobility Organ Transport and Jet revenue increased 96% to $26.3 million, supported by hospital customer additions, organ-transport demand and increased private-jet usage during the pandemic.
- Fourth-quarter revenue was $20.3 million, including $13.4 million from Short Distance and $6.6 million from MediMobility Organ Transport and Jet. The fourth quarter reflected a substantial sequential recovery in Short Distance revenue.
- The Trinity acquisition added organ-transport capabilities in 16 states and generated approximately 5% of 2021 revenue growth; its purchase-price allocation included $13.3 million of goodwill and $11.9 million of identifiable intangible assets.
- In November 2021, Blade acquired exclusive rights to offer scheduled Helijet helicopter flights and use certain Pacific Heliport Services terminals for $12 million.
- Blade expects to transition toward Electric Vertical Aircraft when commercially and regulatorily approved, but no such aircraft had FAA certification for U.S. commercial passenger operations as of the filing.
Guidance, Outlook, Risks and Unusual Items
The filing does not provide formal revenue, earnings or operating-margin guidance. Management expects continued net losses in the short term and anticipates higher general and administrative and selling and marketing costs as the company expands.
- COVID-19 variants, reduced business travel, remote work and renewed travel restrictions could slow recovery in Short Distance services.
- The business is concentrated in a limited number of metropolitan areas and airports, particularly New York, exposing results to weather, regulatory, infrastructure, airport-access and local-demand risks.
- Blade relies on third-party operators for aircraft, pilots, maintenance, fuel and insurance. Capacity constraints, operator failures, labor shortages or higher charter costs could cause cancellations or reduce margins.
- Electric Vertical Aircraft remain subject to development, certification, infrastructure, safety, cost and market-acceptance risks.
- The company reported a material weakness in internal control over financial reporting and ineffective disclosure controls as of September 30, 2021. Management hired a Director of Internal Controls and expected remediation during 2022. Previously identified weaknesses involving segregation of duties and IT controls were reported as remediated.
- A lawsuit brought by Shoreline Aviation seeks more than $13 million in damages and other relief. Management stated that the outcome was not expected to result in a material contingency, and no reserve was recorded.
- The filing reports no material off-balance-sheet arrangements. Capacity purchase agreements contained remaining obligations of approximately $4.5 million for 2022, $1.1 million for 2023 and $8.3 million for 2024, subject to specified termination rights.
Investor Verification Checklist
- Verify that the filing and company name correspond to the intended issuer; the supplied document is Blade Air Mobility, Inc., while the request metadata names Strata Critical Medical, Inc.
- Reconcile the substantial liquidity balance, including the $297.2 million short-term investment portfolio, with projected cash burn and planned acquisitions or expansion.
- Assess whether Short Distance demand and utilization can return to sustainable pre-pandemic levels without materially increasing operator costs.
- Monitor remediation of the material weakness and the effectiveness of disclosure controls in subsequent filings.
- Evaluate dilution and earnings volatility from approximately 14.2 million warrants, approximately 9.0 million options and restricted equity awards.
- Review the final purchase-price allocation and operating performance of Trinity, as the acquisition accounting was preliminary at September 30, 2021.
- Track COVID-19 developments, FAA and other regulatory approvals for Electric Vertical Aircraft, airport and heliport access, and the Shoreline litigation.