Quarterly report [Sections 13 or 15(d)]

Acquisitions

v3.25.3
Acquisitions
 9 Months Ended
Sep. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
On August 29, 2025, the Company completed the acquisition of 100% of the outstanding equity of Blade Urban Air Mobility, Inc., a wholly owned subsidiary of Strata Critical Medical, Inc, f/k/a Blade Air Mobility, Inc. (“Seller”). Blade Urban Air Mobility, Inc. and its subsidiaries (“Blade”) operate a technology-powered, global urban air mobility platform through which they provide air charter broker and other services. The transaction is expected to unlock immediate market access and infrastructure across key urban corridors in New York City and Southern Europe and allow the Company to combine its best-in-class technology with Blade’s experience of delivering premium customer transportation at scale.
The Company acquired all assets and assumed liabilities of Blade for total purchase consideration of approximately $92.4 million, consisting of (i) 5,325,585 shares of the Company’s common stock with an aggregate fair value of $74.5 million, calculated net of $1.5 million attributed to the Company’s post-combination compensation expense, (ii) payments contingent upon the achievement of future Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) targets with a fair value of approximately $7.6 million (“EBITDA Earnout”), (iii) indemnity holdback amount of $10.0 million (“Indemnity Holdback”), and (iv) pre-combination-attributed fair value of substitution RSUs of approximately $0.3 million. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations, which requires that the assets acquired and liabilities assumed in a business combination be recognized at their estimated acquisition-date fair values.
In connection with the acquisition, the Company agreed to make payments up to $17.5 million to the Seller, in cash or common stock at the Company’s election, subject to certain adjustments, payable 18 months following the acquisition date if certain key employees of Blade remain employed by the Company (“Retention Earnout”). The Company also issued substitution RSUs with an estimated post-combination-attributed fair value of $2.5 million to certain officers and employees of Blade. The substitution RSUs vest contingent upon each employee’s continued employment with the Company or its subsidiaries, and are recognized as stock-based compensation expense over the RSUs’ vesting terms, commencing on the acquisition date. The Retention Earnout and the substitution RSUs are accounted for as post-combination compensation expense within selling, general and administrative in the Company’s consolidated statements of operations.
The Company also entered into a transition services agreement (“TSA”) and Commercial Agreement (“CA”) with the Seller in connection with the acquisition. Under the TSA, the Company and the Seller will provide to each other certain transitional services, including technology support, safety and legal support, business unit and flight operations support, certain administrative services, and access to shared contracts and insurance arrangements. Costs incurred in connection with the TSA will be recognized as expense in the period incurred in the Company’s consolidated statements of operations. Under the CA, the Seller must generally offer the Company the right to provide certain medical transport services before engaging competing providers for a period of eight years from the closing date
The EBITDA Earnout provides for payments of up to $17.5 million contingent upon the achievement of certain EBITDA targets over the first fiscal year following the acquisition date. The fair value of the EBITDA Earnout was calculated by a risk-neutral Monte Carlo simulation, using Geometric Brownian Motion (GBM), which included significant unobservable Level 3 inputs, such as projected adjusted EBITDA and a discount rate of 7.2%.
As part of the acquisition, $10.0 million was retained by the Company to satisfy the Company’s post-closing indemnification claims, if any, against the seller. The Indemnity Holdback will be released and paid to the seller 18 months following the closing date, subject to reduction to satisfy indemnification obligations of the seller, if any. All or a portion of the Indemnity Holdback or the EBITDA Earnout may be paid, at the Company’s election, in cash or in shares of the Company’s common stock.
The following table summarizes the Company’s preliminary allocation of the purchase consideration to the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands):
Assets
Cash and cash equivalents $ 1,070 
Restricted cash 813 
Accounts and other receivables 4,194 
Prepaid expenses and other current assets 7,126 
Property and equipment, net 2,111 
Operating lease right-of-use assets 4,964 
Intangible assets 17,000 
Other non-current assets 438 
Goodwill 76,072 
Total assets $ 113,788 
Liabilities
Accounts payable $ 1,600 
Accrued expenses and other current liabilities 14,361 
Operating lease liabilities, current portion 2,882 
Operating lease liabilities, net of current portion 2,240 
Other non-current liabilities 318 
Total liabilities $ 21,401 
Total net assets acquired $ 92,387 
The fair values of the acquired assets are still provisional and subject to change within the measurement period. The final determination of the fair values of the acquired assets is expected to be completed as soon as practicable, but no later than one year from the acquisition date. The primary areas that are preliminary relate to net working capital adjustments, the fair values of goodwill, intangible assets, certain tangible assets and liabilities, and income taxes. Any changes to the preliminary estimates of the fair value during the measurement period will be recorded as adjustments to those assets and liabilities with a corresponding adjustment to goodwill.
The following table summarizes the preliminary estimated fair value and useful lives of intangible assets acquired (in thousands):
Estimated Useful Life
         (Years)		 Estimated Fair Value
Exclusive rights to air transportation services 10 $ 8,800 
Developed technology 2 6,200 
Customer relationships 2 1,000 
Trade name 2 1,000 
Total intangible assets $ 17,000 
Each of the intangible assets acquired fair values were evaluated with the following valuation methodology:
•Exclusive rights to air transportation services agreements were evaluated using the Multi-period Excess Earnings Method, a form of the Income approach. Free cash flows were discounted using a discount rate of 9.0%. Key assumptions include forecasted revenue, EBITDA, income tax rate, contributory asset charges, and discount rate.
•Developed technology was evaluated using the Cost to Recreate Method, a form of the Cost Approach. Key assumptions include direct and indirect developer costs, developer’s profit, and opportunity cost.
•Customer relationships were valued using the With and Without Method, a form of the Income Approach, and then discounted to present value using a discount rate of 9.0%. Key assumptions include forecasted free cash flows with and without the customers in place, income tax rate, and discount rate.
•Trade names were evaluated using the Relief-from Royalty Method, a form of the Income Approach, and then discounted to present value using a discount rate of 9.0%. Key assumptions include forecasted revenue, royalty rate, income tax rate, and discount rate.
In connection with the acquisition, the Company recognized $76.1 million of goodwill, which represents the excess of the purchase price over the fair values of the net assets acquired and liabilities assumed.
The acquired goodwill is tax deductible. It represents the excess of the purchase consideration over the aggregate preliminary fair values of identifiable assets acquired at the acquisition date and is primarily attributable to the assembled workforce and expected synergies at the time of the acquisition.
In connection with the acquisition, the Company recognized $5.8 million of transaction costs, which were related to financial advisory, legal, accounting and other professional fees and were included within selling, general and administrative in the Company’s consolidated statements of operations.