Quarterly report [Sections 13 or 15(d)]

Acquisitions

v3.26.3
Acquisitions
 9 Months Ended
Sep. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
Business Combination
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 initial purchase consideration of $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 $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 $0.3 million. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations, and the assets acquired and liabilities assumed were recognized at their 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 expense in the Company’s condensed consolidated statements of operations. At September 30, 2026 and December 31, 2025, the Retention Earnout liability was $12.8 million and $4.0 million, respectively (Note 5).
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 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 condensed 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 provided for payments of up to $17.5 million contingent upon the achievement of certain EBITDA targets over the 12-month period from September 1, 2025 through September 1, 2026. At December 31, 2025, the fair value of the EBITDA Earnout was $13.4 million (Note 5), calculated using 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%. The performance period ended on September 1, 2026, and the maximum EBITDA targets were achieved. Accordingly, the performance contingency was resolved and the contractual amount payable was fixed at $17.5 million. On September 8, 2026, the Company settled the EBITDA Earnout through the issuance of 2,419,801 shares of its common stock with a fair value of $16.6 million. As a result, no EBITDA Earnout liability remained outstanding as of September 30, 2026.
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 may be paid, at the Company’s election, in cash or in shares of the Company’s common stock.
The measurement period for the Blade acquisition ended on August 29, 2026, and the purchase price allocation is final. The following table summarizes the Company’s final allocation of the purchase consideration, as adjusted for measurement-
period adjustments that were not material, to the acquisition-date fair values of the assets acquired and liabilities assumed (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 75,100 
Total assets $ 112,816 
Liabilities
Accounts payable $ 1,600 
Accrued expenses and other current liabilities 14,622 
Operating lease liabilities, current portion 2,882 
Operating lease liabilities, net of current portion 2,240 
Other non-current liabilities 336 
Total liabilities $ 21,680 
Total net assets acquired $ 91,136 

The following table summarizes the 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 
The fair value of each acquired intangible asset was 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 9.5%. 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 9.5%. 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 9.5%. Key assumptions include forecasted revenue, royalty rate, income tax rate, and discount rate.
In connection with the acquisition, the Company recognized $75.1 million of goodwill, which represents the excess of the purchase price over the fair value of the identifiable net assets acquired.
The acquired goodwill is tax deductible. It represents the excess of the purchase consideration over the aggregate fair values of identifiable net 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 $6.0 million of transaction costs during the year ended December 31, 2025, which were related to financial advisory, legal, accounting and other professional fees and were included within selling, general and administrative expense in the Company’s condensed consolidated statements of operations.
Asset acquisition
On March 6, 2026, the Company acquired 100% of the equity interests in a special purpose entity that holds an industrial property located in Ohio for a total acquisition cost of $62.3 million. The acquisition was accounted for as an asset acquisition in accordance with ASC 805-50, which requires the cost of the acquisition, including transaction costs, to be allocated to the assets acquired on a relative fair value basis. The acquired assets consist primarily of land ($3.1 million), building ($55.7 million) and identifiable intangible assets related to the existing third-party lease ($3.5 million), including in-place lease value and leasing-related intangibles. The property is subject to a long-term third-party lease that generates rental income for the Company. The allocation of the purchase price is based on a third-party valuation and reflects management’s estimates of fair value.