What changed in this filing

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Item 1A. Risk Factors

2026-02-27 compared with 2025-02-27 · 164 added, 108 removed, 367 unchanged (43% of the section changed)

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Additionally, recent focus on reducing the size of the federal workforce could negatively impact the availability of resources within the FAA which could delay our progress towards certification.

We are also pursing certification of our aircraft and approval to operate our services in other countries.

We are also pursuing certification of our aircraft and approval to operate our services in other countries.

While many of these countries have established processes for validating a type certificate issued by the FAA, others, such as the UAE, are developing new processes to leverage our work with the FAA and provide a path for approval of initial operations that could precede type certification in the United States.

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regulatory framework, the FAA or other regulatory authorities within the markets in which we intend to operate may disagree with this view, which may prohibit, restrict, or delay our ability to launch in the relevant market.

In addition, any changes to the National Airspace System, as a result of privatization or otherwise, could increase the costs to operate our service.

In addition, any changes to the NAS, as a result of privatization or otherwise, could increase the costs to operate our service.

Finally, regulatory authorities have in the past and may in the future introduce changes specifically to address high-volume flights that could delay our ability to launch our service and have an adverse impact on our business, financial condition and results of operations.

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A failure to increase air traffic capacity in the airspace serving key markets, including around major airports, could create capacity limitations for our future operations and could have a material adverse effect on our business.

Weaknesses in the National Airspace System and the Air Traffic Control (“ATC”) system, such as outdated procedures and technologies, could result in capacity constraints during peak travel periods or adverse weather conditions, resulting in delays and disruptions to our service.

While our aircraft is designed to operate in the National Airspace System under existing rules, our business at scale will likely require airspace allocation for UAM operations and could result in regulatory changes.

Our inability to obtain sufficient access to the National Airspace System or to comply with any regulatory changes could

increase our costs and pricing of our services, which could reduce demand and have an adverse impact on our business, financial condition and results of operations.

Weaknesses in the NAS and the Air Traffic Control (“ATC”) system, such as outdated procedures and technologies, could result in capacity constraints during peak travel periods or adverse weather conditions, resulting in delays and disruptions to our service.

While our aircraft is designed to operate in the NAS under existing rules, our business at scale will likely require airspace allocation for UAM operations and could result in regulatory changes.

Our inability to obtain sufficient access to the NAS or to comply with any regulatory changes could increase our costs and pricing of our services, which could reduce demand and have an adverse impact on our business, financial condition and results of operations.

Changes in government regulation could increase our operating costs or extend our certification timeline.

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Given the great discretion the government has in issuing or denying such authorizations, there can be no assurance we will be successful in our future efforts to secure and maintain necessary licenses, registrations, or other regulatory approvals which may have an adverse impact on our business, financial condition and results of operations.

In addition, the global economy has recently seen a rise in tariffs and threats of tariffs.

While tariffs have not had a material impact on our business, financial condition or results of operations to date, new tariffs could increase the costs of raw materials and other goods, both for us and our suppliers, which could impact our business, particularly as we begin to scale our manufacturing operations.

We will be subject to rapidly changing and increasingly restrictive laws, regulations and other obligations relating to privacy, data protection, and data security, which may be costly and difficult to comply with.

We will be collecting, using, and disclosing personal information of passengers and others in the course of operating our business.

These activities are or may become regulated by a variety of domestic and foreign laws and regulations relating to privacy, data protection, and data security, which are complex, rapidly evolving, and increasingly restrictive.

Global trade policies, including tariffs, could adversely affect our operations.

The global economy has recently seen a rise in tariffs and other protective trade measures.

In 2025, significant new and expanded tariffs were imposed by the United States, and reciprocal tariffs were imposed by other countries.

These tariffs

have applied to a wide range of finished goods and raw materials.

In some cases, these tariffs were later paused, modified or suspended, making it difficult to plan for or predict the ultimate impact of these tariffs.

In response to the U.S.

imposed tariffs and other geopolitical events, some countries have imposed or threatened to impose reciprocal tariffs, export restrictions and other protective trade measures.

While we manufacture many of the components for our aircraft in the United States, our supply chain depends, in part, on components and raw materials acquired from third-party suppliers across the globe, particularly with respect to batteries and related materials.

While tariffs have not had a material impact on our business, financial condition or results of operations to date due to the limited scale of our prototype manufacturing and focus on certification efforts, over time, new tariffs or other restrictions imposed in connection with trade wars or political instability could increase the costs of raw materials and other goods, both for us and our suppliers, and could make it difficult to source certain materials or components on which we rely for our production and certification efforts.

This could impact our business, financial condition and prospects, particularly as we begin to scale our manufacturing operations and produce aircraft for commercial use.

In addition, the imposition of tariffs and threats of tariffs has contributed to volatility in global equity markets which, we believe, has also impacted and may continue to impact the price of our common stock.

We are subject to rapidly changing and increasingly restrictive laws, regulations and other obligations relating to privacy, data protection, and data security, which may be costly and difficult to comply with.

Our Blade subsidiary collects, uses, and discloses personal information of passengers and others in the course of operating its business, and we will do so in connection with our air taxi services.

These activities are regulated by a variety of domestic and foreign laws and regulations relating to privacy, data protection, and data security, which are complex, rapidly evolving, and increasingly restrictive.

Several states and foreign countries have granted residents expanded rights related to their personal information, including the right to request deletion of their personal information and receive detailed reports of how their personal information is used and shared.

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Despite our best efforts, we may not be successful in complying with the rapidly evolving privacy, data protection, and data security requirements.

Any actual or perceived non-compliance could result in litigation and proceedings against us by governmental entities, passengers, or others, which could result in fines, civil or criminal penalties, limited ability or inability to operate our business, offer services, or market our platform in certain jurisdictions, negative publicity and harm to our brand and reputation, which could have a material adverse effect on our business, financial condition or results of operations.

Any actual or perceived non-compliance could result in litigation and proceedings against us by governmental entities, passengers, or others, which could result in fines, penalties, limited ability or inability to operate our business, offer services, or market our platform in certain jurisdictions, negative publicity and harm to our brand and reputation, which could have a material adverse effect on our business, financial condition or results of operations.

Market & Service

The market for UAM has not been established with precision, is still emerging and may not achieve the growth potential we expect or may grow more slowly than expected.

The UAM market is still emerging and has not been established with precision.

It is uncertain to what extent market acceptance will grow, if at all.

This market is new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, new aircraft and unknown consumer demands and behaviors.

We intend to initially launch operations in a limited number of metropolitan areas.

The success of these markets and the opportunity for future growth in these markets may not be representative of the potential market for UAM in other metropolitan areas.

Our success will depend to a substantial extent on regulatory approval and availability of eVTOL technology, as well as the willingness of commuters and travelers to widely adopt air mobility as an alternative to ground transportation.

If the public does not perceive UAM as beneficial, or chooses not to adopt UAM then the market for our offerings may not develop, may develop more slowly than we expect or may not achieve the growth potential we expect.

As a result, the number of potential passengers using our services cannot be predicted with any degree of certainty, and we cannot assure you that we will be able to operate in a profitable manner in any of our targeted markets.

Any of the foregoing could materially adversely affect our business, financial condition and results of operations.

There may be reluctance by consumers to adopt this new form of mobility, or unwillingness to pay our projected prices.

The market for UAM has not been established with precision.

Customers may be reluctant to adopt this new form of mobility, or to pay our projected prices.

Our growth is highly dependent upon consumer adoption of an entirely new form of mobility offered by eVTOL aircraft and the UAM market.

If consumers do not adopt this new form of mobility or are not willing to pay the prices we project for our services, our business may never materialize.

If the public does not perceive UAM as beneficial, chooses not to adopt this new form of mobility, or is unwilling to pay the prices we project for our services, then the market for our offerings may not develop, may develop more slowly than we expect or may not achieve the growth potential we expect.

Our success in a given market will depend on our ability to develop a service network that provides passengers significant time savings when compared with alternative modes of transportation and accurately assess and predict passenger demand and price sensitivity, which may fluctuate based on a variety of factors, including general economic conditions, quality of service, negative publicity, safety incidents, perceived political or geopolitical affiliations, or general dissatisfaction with our services.

If we fail to attract passengers, deliver sufficient value to our passengers, or accurately predict demand and price sensitivity, it would harm our financial performance and our competitors’ products may achieve greater market adoption and may grow at a faster rate than our service.

If we fail to attract passengers, deliver sufficient value to our passengers, or accurately predict demand and price sensitivity, it could materially adversely affect our business, financial condition and results of operations.

We may face delays in launching our commercial service.

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We also have not yet received FAA certification of our aircraft or other required airspace or operational authority and approvals, which are essential to operate our service, and for aircraft production and operation.

Our pre-certification operations may also reveal issues with our aircraft, which could result in certification delays.

Our pre-certification operations may also reveal issues with our aircraft design, which could result in certification delays.

For example, in February 2022, one of our remotely piloted, experimental prototype aircraft was involved in an accident during flight testing.

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Any delay in the financing, design, manufacture and commercial release of our aircraft, which are often experienced by aircraft manufacturers, could materially damage our brand, business, prospects, financial condition and operating results.

If we are not able to overcome these challenges, our business, prospects, operating results and financial condition will be negatively impacted and our ability to grow our business will be harmed.

We may be unable to effectively build a customer-facing business or app.

Errors or vulnerabilities in software code could harm our business.

The application through which users will book trips is still under development.

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Any failure to timely and effectively resolve any such errors or vulnerabilities could adversely affect our business, financial condition and results of operations as well as negatively impact our reputation or brand.

We may be unable to reduce end-user pricing at rates sufficient to drive expected growth for our service.

We may be unable to reduce end-user pricing at rates sufficient to drive growth for our service.

We may not be able to reduce end-user pricing over time to increase demand, address new market segments and develop a significantly broader customer base.

We expect that our initial end-user pricing may be most attractive to relatively affluent consumers, and we will need to address new markets and expand our customer base in order to further grow our business.

In particular, we intend for our aerial ridesharing service to be economically accessible to a broad segment of the population and appeal to the customers of ground-based ridesharing services, taxis, and other methods of transportation.

In time, we intend for our aerial ridesharing service to be economically accessible to a broad segment of the population and appeal to the customers of ground-based ridesharing services, taxis, and other methods of transportation.

Reducing end-user pricing is dependent on accurately estimating the unit economics of our aircraft and the corresponding service.

Our estimates rely, in part, on future technology advancements, such as aerial and ground-based autonomy.

If our estimates are inaccurate regarding factors such as production volumes, utilization rates, demand elasticity, operating conditions, deployment volumes, production costs, indirect cost of goods sold, landing fees, charging fees, electricity availability and/or other operating expenses, or if technology such as aerial and ground-based autonomy fails to develop, mature or be commercially available within the periods we expect, we may be unable to offer our service at pricing that is sufficiently compelling to bring about the local network effects that we are predicting and may have an adverse impact on our business, financial condition and results of operations.

If our estimates are inaccurate regarding factors such as production volumes, utilization rates, demand elasticity, operating conditions, deployment volumes, production costs, cost of goods sold, landing fees, charging fees, electricity availability and/or other operating expenses, or if technology such as aerial and ground-based autonomy fails to develop, mature or be commercially available within the periods we expect, we may be unable to offer our service at pricing that is sufficiently compelling to bring about the local network effects that we are predicting, and this may have an adverse impact on our business, financial condition and results of operations.

Our competitors may commercialize their technology before us, or we may not be able to fully capture the first mover advantage that we anticipate.

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We do not intend to own or operate the ground portion of our multimodal service.

Our business and our brand will be affiliated with these third-party ground operators, and we may experience harm to our reputation if they suffer from financial instability, poor service, negative publicity, accidents, or safety incidents which could have an adverse impact on our business, financial condition and results of operations.

Our reputation may be harmed by the broader industry, and customers may not differentiate our services from our competitors.

and our brand will be affiliated with these third-party ground operators, and we may experience harm to our reputation if they suffer from financial instability, poor service, negative publicity, accidents, or safety incidents which could have an adverse impact on our business, financial condition and results of operations.

Customers may not differentiate our services from our competitors.

Passengers and other stakeholders may not differentiate between us and the broader aviation industry or, more specifically, the UAM service industry.

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We may fail to adequately differentiate our brand, our services and our aircraft from others in the market which could impact our ability to attract passengers or engage with other key stakeholders and have an adverse impact on our business, financial condition and results of operations.

Our prospects may be adversely affected by changes in consumer preferences, discretionary spending and other economic conditions that affect demand for our services, including changes resulting from the COVID-19 pandemic.

Our prospects may be adversely affected by changes in consumer preferences, discretionary spending and other economic conditions that affect demand for our services.

Our business is primarily concentrated on UAM services, which we expect may be vulnerable to changes in consumer preferences, discretionary spending and other market changes.

The global economy has in the past, and will in the future, experience periods of economic instability, inflation and recession, such as the financial impact of the global COVID-19 pandemic.

The global economy has in the past, and will in the future, experience periods of economic instability, inflation and recession.

During such periods, passengers may reduce overall spending on discretionary purchases.

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If we are unable to obtain and maintain adequate facilities and infrastructure, including access to key infrastructure such as airports, we may be unable to offer our service in a way that is useful to passengers.

To operate and expand our proposed aerial ridesharing service, we must secure or otherwise develop adequate landing, charging and maintenance infrastructure in desirable locations in metropolitan areas for our aircraft.

We may not be able to ensure that our plans for new service can be implemented in a commercially viable manner given present landing fee structures and infrastructure constraints, including those imposed by inadequate facilities at desirable locations and increasingly congested airports and heliports.

To operate and expand our proposed aerial ridesharing service, we must secure or otherwise develop adequate landing, charging and maintenance infrastructure in desirable locations.

We may not be able to ensure that our plans can be implemented in a commercially viable manner given present landing fee structures and infrastructure constraints, including those that may exist at desirable locations and increasingly congested airports and heliports.

Access to these facilities may be prohibitively expensive, unavailable, or may be inconsistent with our projections.

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There is also a complex patchwork of federal, regional and municipal regulatory considerations applicable to asset management and property development in general, and aviation assets and infrastructure in particular.

Applicable regulations can vary widely by locality.

These regulations can vary widely by locality.

Local community groups, some of which may be opposed to property development in general, and new aviation infrastructure in particular, can impact the application of these regulations or the development of new regulations.

Additionally, we may not be able to obtain necessary permits and approvals and to make necessary infrastructure changes to enable adoption of our aircraft, such as installation of charging equipment.

We may not be able to obtain necessary permits and approvals to make necessary infrastructure changes to enable adoption of our aircraft, such as installation of charging equipment.

If we are unable to acquire or maintain space for passenger terminal or maintenance operations in desirable locations, this could prevent our service from being practical for our customers and have a material adverse effect on our business, results of operations and financial condition.

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Aircraft utilization is reduced by delays and cancellations from various factors, many of which are beyond our control, including adverse weather conditions, security requirements, air traffic congestion and unscheduled maintenance events.

The success of our business is dependent, in part, on the utilization rate of our aircraft, and reductions in utilization

will adversely impact our financial performance, cause passenger dissatisfaction and may have an adverse impact on our business, financial condition and results of operations.

The success of our business is dependent, in part, on the utilization rate of our aircraft, and reductions in utilization will adversely impact our financial performance, cause passenger dissatisfaction and may have an adverse impact on our business, financial condition and results of operations.

Aircraft and Production

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Software is inherently complex and often contains defects and errors when first introduced.

While we have performed extensive testing, in some instances we are still relying on projections and models to validate the expected performance of our aircraft.

While we have performed extensive testing, in some instances we are still relying on projections and models to validate the

expected performance of our aircraft.

To date, we have been unable to validate the performance of our aircraft over the expected lifetime of the aircraft.

We may incur significant costs to address any performance issues, or if not detected or addressed, such issues could negatively impact our business, financial condition, operating results and prospects.

We expect to introduce new and additional features and capabilities to the aircraft and our service over time.

For example, we plan to initially operate under VFR only, and then add the ability to operate under IFR pursuant to block upgrade to the aircraft.

We expect to introduce new and additional features and capabilities to the aircraft and our service over time through block upgrades.

For example, we may implement the ability to operate under IFR conditions or advancements to battery or other technologies that may increase our range or other performance specifications pursuant to block upgrades to the aircraft.

We may be unable to develop or certify these upgrades in a timely manner or at all which may have an adverse impact on our business, financial condition and results of operations.

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There are significant challenges associated with producing aircraft in the volumes that we are projecting.

Our manufacturing facility and processes remain in the prototype stage.

Our manufacturing facility and processes are in the early pre-type-certification production stage.

The aerospace industry has traditionally been characterized by significant barriers to entry, including large capital requirements, investment costs of designing and manufacturing aircraft, long lead times to bring aircraft to market, the need for specialized design and development expertise, extensive regulatory requirements, and the need to establish maintenance and service locations.

As a manufacturer of electric aircraft, we face a variety of added barriers to entry including additional costs of developing and producing an electric powertrain, regulations associated with the transport of lithium-ion batteries and unproven customer demand for a fully electric aerial mobility service.

As a manufacturer of electric aircraft, we face a variety of added barriers to entry including additional costs of developing and producing an electric powertrain, regulations associated with the transport of lithium-ion batteries, and unproven customer demand for a fully electric aerial mobility service and aircraft.

Additionally, we are developing production lines for components and at volumes for which there is little precedent within the traditional aerospace industry.

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We will need to do extensive testing to ensure that the aircraft is in compliance with all applicable regulations prior to beginning scaled production.

In addition to certification of the aircraft, we will be required to obtain approval from the FAA to manufacture completed aircraft pursuant to an FAA-approved type design ( e.g.

, type certificate).

In addition to certification of the aircraft, we will be required to obtain approval from the FAA to manufacture completed aircraft pursuant to an FAA-approved type certificate.

Production approval involves initial FAA manufacturing approval and extensive ongoing oversight of aircraft production.

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government may modify or terminate its contracts with us, without prior notice and at its convenience.

We believe that the Department of Defense is potentially shifting its priorities under the Agility Prime program towards hybrid aircraft and autonomous flight technology and, as a result, our existing contracts may be reduced or modified.

In addition, funding may be reduced or withheld as part of the annual U.S.

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government agencies both prior to receiving an airworthiness certificate from the FAA and after.

While we believe we are uniquely qualified to participate in future initiatives,

particularly those related to autonomous flight and hybrid aircraft, there can be no guarantees of our ability to negotiate and secure additional contracts in these areas.

While we believe we are uniquely qualified to participate in future initiatives, particularly those related to autonomous flight and hybrid aircraft, there can be no guarantees of our ability to negotiate and secure additional contracts in these areas.

Failure to obtain these contracts could limit our ability to gain additional operational learnings about our aircraft and secure meaningful revenue, which could have a material adverse effect on our business, financial condition and results of operations.

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Failure to comply with these requirements or secure necessary approvals could negatively impact our business, financial condition and operating results.

Risks Related to our Blade Air Charter Operations

We may not realize the anticipated benefits of our acquisition of Blade, and the acquisition may expose us to integration challenges, additional liabilities and costs, and potential dilution.

Successfully integrating Blade’s business and operations, retaining key personnel, and realizing anticipated benefits will require significant management attention and could divert resources from our core aircraft development, certification and manufacturing efforts.

In addition, our acquisition agreement provides for additional payments of up to $45 million that may become payable in the future.

We may elect to satisfy all or a portion of these payments in shares of our common stock.

Any issuance of shares could be dilutive to our stockholders and could depress our stock price, and any failure to achieve expected benefits from the acquisition could adversely affect our business, financial condition and results of operations.

We may not recognize the expected benefits of our acquisition of the Blade business, including market access, an established customer base, operational expertise, airport relationships and infrastructure across key markets.

Following certification of our eVTOL aircraft, we intend to begin integrating that aircraft into our Blade operations over time.

If we are unable to integrate and operate the Blade business, this could harm our broader eVTOL commercialization strategy and ultimately impact our business, financial condition and operating results.

We could suffer losses and adverse publicity stemming from accidents involving small aircraft, helicopters, or charter flights generally and, in particular, from any accident or incident involving Blade charter flights.

Aircraft operations are subject to various risks, and demand for air transportation has been and may in the future be impacted by accidents or other safety issues regardless of whether such accidents or issues involve Blade charter flights.

Hazards, such as adverse weather conditions, fire or mechanical failures, could result in death or injury to personnel and passengers which could impact passenger confidence and could lead to a reduction in volume, particularly if such accidents were due to a safety issue.

We believe that safety and reliability are two of the primary attributes passengers consider when selecting air transportation services.

Our failure, or that of our third-party operators, to maintain standards of safety and reliability that are satisfactory to our customers may adversely impact our ability to retain current customers and attract new customers.

We are at risk of adverse publicity stemming from any public incident involving our company, our people, or our brand.

Such an incident could involve the actual or alleged behavior of any of our employees or third-party aircraft operators.

Further, if our personnel, one of our third-party operators’ aircraft, or one of our third-party operators’ Blade-branded aircraft, is involved in an incident, accident, or regulatory enforcement action, which could be attributed, in part, to a lack of sufficient safety auditing, we could be exposed to significant reputational harm and potential legal liability.

Blade-branded aircraft have in the past been involved in accidents and despite our best efforts, there can be no guarantee that such events will not occur in the future.

The insurance we carry may be inapplicable or inadequate to cover any such incident or accident, or regulatory action.

In the event that our insurance is inapplicable or inadequate, we may be forced to bear substantial losses from an incident or accident.

In addition, any such incident, accident, or action involving our employees, one of the Blade-branded aircraft used by us belonging to our third-party operators’ fleet (or personnel and aircraft of our third-party operators), or the same type of aircraft as used by our third-party operators could create an adverse public perception, which could harm our reputation, resulting in current or prospective customers being reluctant to use our services and adversely impacting our business, results of operations, and financial condition.

If one or more of our third-party aircraft operators were to suffer an accident or lose the ability to fly certain aircraft due to safety concerns or investigations, we may be required to cancel or delay certain flights until replacement aircraft and personnel are obtained.

The markets for our Blade offerings are still in relatively early stages of growth, and such markets may not continue to grow, or may grow more slowly than we expect.

Blade’s urban air mobility services have grown rapidly, however, our service offerings are still relatively new, and it is uncertain to what extent market acceptance will continue to grow, if at all.

We currently operate our Blade offering in a limited number of metropolitan areas.

The success of these markets to date and the opportunity for future growth in these markets may not be representative of the potential market for urban air mobility in other metropolitan areas.

In new markets, the lack of brand recognition may result in difficulties gaining and retaining customers and building partnerships with local entities.

In addition, competition in new markets may be strong, with established companies and new entrants

offering similar services.

The potential intense competition and limited brand recognition could make it difficult for us to establish a strong market position and generate profitable returns.

Growth of our Blade offering will require significant investments in our infrastructure, technology, and marketing and sales efforts.

Historically, cash flow from Blade operations has not been sufficient to support these needs and additional cash flow required to support the Blade offering could negatively impact our core eVTOL operations.

Further, our ability to effectively manage growth and expansion of Blade operations may require us to enhance operational systems, internal controls and infrastructure, human resources policies, and reporting systems, which could require significant capital expenditures and allocation of valuable resources.

If we are unable to obtain and maintain adequate facilities and infrastructure, we may be unable to offer our existing Blade flight schedule and to expand our route network in the future.

To operate our existing and proposed schedule and, where desirable, add service along new or existing routes, we must be able to maintain or obtain space for passenger terminals.

As airports and heliports around the world become more congested, it may not be possible for us to ensure that our plans for new service can be implemented in a commercially viable manner, given operating constraints at airports and heliports throughout our network, including those imposed by inadequate facilities at desirable locations.

Any limitation on our ability to acquire or maintain space for passenger terminal operations could have a material adverse effect on our business, results of operations, and financial condition.

Blade leases and licenses exclusive passenger terminal infrastructure from airport and heliport operators in key markets.

These leases, licenses, and permits vary in term, ranging from month-to-month permits to multi-year use and occupancy agreements that are coterminous with the airport or heliport operator’s underlying lease with the municipality that owns the premises.

While our experience with these multi-year use and occupancy agreements have led to long-term uninterrupted usage thus far, certain municipalities, including New York, retain the authority to terminate a heliport operator’s lease upon as short as 30 days’ notice.

If a municipality exercised its termination rights, under certain conditions, our agreements with the airport or heliport operator would concurrently terminate.

Termination of one or more of our leases could negatively impact our ability to provide services in our existing markets and have a material adverse effect on our business, results of operations, and financial condition.

We rely on our third-party operators to provide and operate aircraft.

If such third-party operators do not perform adequately or terminate their relationships with us, our costs may increase.

We rely on third-party contractors to own and operate aircraft.

Should we experience complications with any of these third-party contractors or their aircraft, we may need to delay or cancel flights.

We have experienced, and may in the future experience, operational complications with our contractors.

The ability of our contractors to effectively satisfy our requirements could also be impacted by any such contractor’s financial difficulty or damage to their operations caused by fire, terrorist attack, natural disaster and public health threats.

The failure of any contractors to perform to our expectations could result in delayed or canceled flights and harm our business.

Our reliance on contractors and our inability to fully control any operational difficulties with our third-party contractors could have a material adverse effect on our business, financial condition, and results of operations.

Illegal, improper, or otherwise inappropriate operation of branded aircraft by our third-party aircraft operators, regardless of whether they are operating aircraft on our behalf, could harm our reputation, business, brand, financial condition, and results of operations.

Some of our third-party aircraft operators operate Blade-branded aircraft on a non-exclusive basis, enabling them to utilize Blade-branded aircraft for flight operations unrelated to Blade.

If our third-party aircraft operators were to operate Blade-branded aircraft, regardless of whether such aircraft is flying on our behalf, in an illegal, improper, or otherwise inappropriate manner, such as violating local noise-abatement regulations or ignoring suggested noise-abatement flight paths and procedures, we could be exposed to significant reputational harm.

While we have implemented various measures intended to anticipate, identify, and address the risk of these types of activities, these measures may not adequately address or prevent all illegal, improper, or otherwise inappropriate activity by our third-party aircraft operators.

Negative publicity related to the foregoing, whether or not such incident occurred while flying on our behalf, could adversely affect our reputation and brand or public perception of the urban air mobility industry as a whole, which could negatively affect demand for platforms like ours and potentially lead to increased regulatory or litigation exposure.

Any of the foregoing risks could harm our business, financial condition, and results of operations.

Risks Related to Our Finances and Operations

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Such financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could harm our business.

For example, the global COVID-19 health crisis and related financial impact resulted in significant disruption and volatility of global financial markets.

Similar pandemics or other disruptions to global markets could adversely impact our ability to access capital.

In addition, increased interest rates in 2022 and 2023 led to a widespread slowdown in investment and funding opportunities, especially for pre-revenue companies.

We may sell equity securities or debt securities in one or more transactions at prices and in a manner that may materially dilute our current investors.

For example, in 2024 we sold 46,000,000 shares of our common stock at a price per share of $5.05 in an underwritten public offering and entered into a Stock Purchase Agreement to issue and sell up to an aggregate of 99,403,579 shares of our common stock to Toyota.

We also entered into an Equity Distribution Agreement for the sale

of up to an additional $300,000,000 of our common stock in an “at the market” offering.

Any debt financing, if available, may involve restrictive covenants that could reduce our operational flexibility or profitability.

Debt financing, if available, may result in a significant financial burden if interest rates remain high for a prolonged period or increase in the future.

For example, in 2025 we sold 35,075,000 shares of our common stock at a price per share of $16.85 in an underwritten public offering for net proceeds of $575.9 million, and sold 49,701,790 shares of our common stock to Toyota at a price per share of $5.03 pursuant to the Stock Purchase Agreement we signed in October 2024 for net proceeds of $249.9 million.

We also entered into an Equity Distribution Agreement in December 2024 for the sale of up to an additional $300.0 million of our common stock in an “at the market” offering of which we sold 29,950,799 shares during 2024 and 2025 for net proceeds of $282.4 million.

Any debt financing, if available, may involve restrictive covenants that could reduce our operational flexibility or profitability and may result in a significant financial burden if interest rates remain high for a prolonged period or increase in the future.

If we cannot raise funds on acceptable terms, we may not be able to grow our business or respond to competitive pressures which may have an adverse impact on our business, financial condition and results of operations.

The Toyota Investment is subject to closing conditions, including conditions beyond our control, and no assurance can be given that closing will take place on the timeline currently anticipated or at all.

Any failure to close one or both of the tranches of the Toyota Investment could adversely impact our future liquidity and our financial condition.

The Toyota Investment is subject to closing conditions, including conditions beyond our control, and no assurance can be given that the second tranche closing will take place on the timeline currently anticipated or at all.

Any failure to close the second tranche of the Toyota Investment could adversely impact our future liquidity and our financial condition.

On October 1, 2024, we entered into the Stock Purchase Agreement with Toyota providing for the potential issuance and sale of up to an aggregate of 99,403,579 shares of our common stock to Toyota (the “Toyota Investment”).

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The closing of each tranche is subject to the satisfaction of certain closing conditions set forth in the Stock Purchase Agreement.

The first tranche is subject to conditions including, but not limited to:

(i) the satisfaction of certain regulatory approvals or clearances, including with respect to the Committee on Foreign Investment in the United States and under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder;

(ii) the adoption of certain changes to the provisions of our amended and restated bylaws;

(iii) the authorization by our board of directors of an amendment to certain provisions of our Certificate of Incorporation (the “Charter Amendment”), subject to approval by our stockholders at our annual meeting in 2025;

(iv) the execution of an amendment and restatement of the Amended and Restated Collaboration Agreement, dated August 30, 2019, between us and Toyota;

(v) the execution of a services agreement by us and Toyota;

and (vi) certain other customary closing conditions.

The second tranche is subject to conditions including, but not limited to:

(i) the execution of a strategic alliance agreement relating to, among other things, manufacturing arrangements, by us and Toyota;

(ii) the approval of the Charter Amendment by our stockholders at our annual meeting in 2025;

and (iii) certain other customary closing conditions.

The first tranche closing occurred in May 2025.

The second tranche is subject to conditions including, but not limited to the execution of a strategic alliance agreement relating to, among other things, manufacturing arrangements, by us and Toyota and certain other customary closing conditions.

The agreements to be entered into in connection with such conditions are subject to the receipt of regulatory approvals, the parties negotiating and entering into definitive agreements and the conditions included within the applicable definitive documents.

As of the date of this Annual Report, no closings have occurred under the Stock Purchase Agreement.

We may experience delays and difficulties in satisfying the conditions for closing on either or both of the tranches of the Toyota Investment, and no assurance can be given that closing will take place on the timeline currently anticipated or at all.

We may experience delays and difficulties in satisfying the conditions for closing the second tranche of the Toyota Investment, and no assurance can be given that closing will take place on the timeline currently anticipated or at all.

Some of the conditions to closing are outside of our control and it is possible that not all of the closing conditions to the Toyota Investment will be satisfied or that we will not receive the entire amount of expected proceeds on the timeline currently anticipated or at all.

For example, the second tranche of the Toyota Investment is subject to, among others, the approval of the Charter Amendment by our stockholders at our annual meeting in 2025.

In addition, certain closing conditions require us and Toyota to successfully negotiate and enter into definitive agreements.

For example, certain closing conditions require us and Toyota to successfully negotiate and enter into definitive agreements.

The final terms of such definitive agreements are not yet established and the negotiation and execution of such agreements may take longer than expected or may not be possible to accomplish on terms acceptable to us, or at all.

No assurance can be given that any agreement we may reach will achieve our goals or be on terms that prove to be economically or strategically beneficial to us.

Such adverse developments, including any failure to close one or both of the tranches of the Toyota Investment, could adversely impact our business, financial condition, results of operations and liquidity.

Such adverse developments, including any failure to close the second tranche of the Toyota Investment, could adversely impact our business, financial condition, results of operations and liquidity.

We have broad discretion in how we use our assets, and we may not use them effectively.

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In general, an “ownership change” occurs if there is a greater than 50 percentage point change (by value) in a corporation’s equity ownership by certain stockholders over a rolling three-year period.

We may have experienced ownership changes in the past and may experience

ownership changes in the future as a result of subsequent shifts in our stock ownership (some of which shifts are outside our control).

We may have experienced ownership changes in the past and may experience ownership changes in the future as a result of subsequent shifts in our stock ownership (some of which shifts are outside our control).

As a result, our ability to use our pre-change federal NOLs and other tax attributes to offset future taxable income and taxes could be subject to limitations.

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In order to maintain and improve the effectiveness of our internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight.

If any of these new or improved controls and systems, or the existing systems and third-party software applications that we rely on for financial reporting, do not perform as expected, we may experience further deficiencies in our controls and we may not be able to meet our financial reporting obligations.

If any of these new or improved controls and systems, or the existing systems and third-party

software applications that we rely on for financial reporting, do not perform as expected, we may experience further deficiencies in our controls and we may not be able to meet our financial reporting obligations.

If there are material weaknesses or failures in our ability to meet any of the requirements related to the maintenance and reporting of our internal control, investors may lose confidence in the accuracy and completeness of our financial reports and that could cause the price of our common stock to decline.

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We intend to continue to rely on these and other means, including patent protection, in the future.

However, the steps we take to protect our intellectual property may be inadequate, and unauthorized parties may attempt to copy aspects of our intellectual property or obtain and use information that we regard as proprietary.

If successful, these attempts may harm our ability to compete, accelerate the development of our competitors’ programs, and/or harm our competitive position in the market.

However, the steps we take to protect our intellectual property may be inadequate or circumvented, and unauthorized parties may attempt to copy or misuse aspects of our intellectual property, or otherwise improperly obtain and use information that we regard as proprietary.

If successful, these attempts may harm our ability to compete, may benefit our competitors’ programs, including by accelerating their development, and/or harm our competitive position in the market.

Further, we may not be able to prevent or seek redress for infringement upon our intellectual property rights without incurring substantial time and expense, or at all.

For example, in November 2025, we filed a complaint against a competitor and a former employee alleging, among other things, breach of contract and misappropriation of trade secrets related to the improper acquisition, retention, and use of our confidential and proprietary business information and trade secrets.

Moreover, our non-disclosure agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to ours.

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The intellectual property rights we own or license may not provide competitive advantages and could be challenged or circumvented by our competitors.

Further, obtaining and maintaining patent, copyright, and trademark protection can be costly.

Further, obtaining and maintaining patent, copyright, trademark, and other intellectual property protections can be costly.

We may choose not to, or may fail to, pursue or maintain such forms of protection for our technology in the United States or foreign jurisdictions, which could harm our ability to maintain our competitive advantage in such jurisdictions.

It is also possible that we will fail to identify patentable aspects of our technology before it is too late to obtain patent protection, that we will be unable to devote the resources to file and prosecute all patent applications for such technology, or that we will lose protection for

failing to comply with all procedural, documentary, payment, and other obligations during the patent prosecution process.

The laws of some countries do not protect proprietary rights to the same extent as the laws of the United States, and mechanisms for enforcement of intellectual property rights in some foreign countries may be inadequate to prevent other parties from infringing our proprietary technology.

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Our collaborators or strategic partners may develop, either alone or with others, products in related fields that are competitive with our products.

Specifically, conflicts with Toyota Motor Corporation may adversely impact our ability to manufacture aircraft or scale production, while conflicts with Uber Technologies, Inc.

and Delta Air Lines may adversely impact our ability to successfully launch and maintain our consumer-facing UAM services.

Conflicts with foreign partners may adversely impact our ability to scale operations outside the U.S.

If such conflicts arise it may adversely affect our business, financial condition and results of operations.

Specifically, conflicts with Toyota Motor Corporation could adversely impact our ability to manufacture aircraft or scale production, while conflicts with Uber Technologies, Inc.

and Delta Air Lines could adversely impact our ability to successfully launch and maintain our consumer-facing UAM services.

Conflicts with foreign partners could adversely impact our ability to scale operations outside the U.S.

If such conflicts arise, it could adversely affect our business, financial condition and results of operations.

We may invest significant resources in developing new offerings and exploring the application of our proprietary technologies for other uses and those opportunities may never materialize.

While our primary focus is on the design, manufacture and operation of our eVTOL aircraft and the related aerial mobility service, we may invest significant resources in developing new technologies, services, products and offerings.

However, we may not realize the expected benefits of these investments.

Such research and development initiatives may also have a high degree of risk and involve unproven business strategies and technologies with which we have limited operating or development experience.

They may involve claims and liabilities, expenses, regulatory challenges and other risks that we may not be able to anticipate.

We may not be able to predict whether consumer demand for such initiatives will exist or be sustained at the levels that we anticipate, or whether any of these initiatives will generate sufficient revenue to offset any expenses or liabilities associated with these investments.

For example, our subsidiary, H2FLY, is working on the development of an optimized fuel cell system for hydrogen-electric aircraft.

Additionally, in 2024 we acquired the assets of the autonomy division of Xwing Inc.

Any such research and development efforts could distract management from current operations and would divert capital and other resources from our more established technologies.

Even if we are successful in developing new products, services, offerings or technologies, regulatory authorities may subject us to new rules or restrictions in response to our innovations that may increase our expenses or prevent us from successfully commercializing new products, services, offerings or technologies and have an adverse impact on our business, financial condition and results of operations.

In 2024 we acquired the assets of the autonomy division of Xwing Inc., and in 2025 announced a collaboration with L3Harris Technologies on a gas-turbine hybrid variant of our aircraft for defense applications.

Additionally, in August 2025 we acquired the Blade passenger business.

Our initiatives related to new offerings and technologies can have a high degree of risk and involve unproven business strategies and technologies with which we have limited operating or development experience.

Further, we have and may in the future seek to acquire or invest in businesses, applications or technologies that we believe could compliment or expand our technical or other capabilities or otherwise offer growth opportunities.

However, we may not realize the expected benefits of these investments and we cannot assure you that we would be able to successfully complete any acquisition or investment we choose to pursue, or that we would be able to successfully integrate any acquired personnel, operations, business, product or technology in a cost-effective and non-disruptive manner.

In addition, we may not be able to successfully or effectively manage the combined business following an acquisition.

The pursuit of these potential opportunities may divert the attention of management and cause us to incur costs and expenses in identifying, investigating and pursuing suitable acquisitions and other opportunities, whether or not they are consummated.

In addition, such opportunities may involve claims and liabilities, expenses, regulatory challenges and other risks that we may not be able to anticipate.

We may not be able to identify desirable opportunities or be successful in entering into an agreement with any particular counterparty or obtain the expected benefits of any opportunity or investment.

Even if we are successful, regulatory authorities may subject us to new rules or restrictions that may increase our expenses or prevent us from successfully commercializing new products, services, offerings or technologies.

Such transactions and acquisitions could result in dilutive issuances of equity securities, the use of our available cash, or the issuance of debt, which could harm our operating results.

These risks may have an adverse impact on our business, financial condition and results of operations.

Any material disruption in our information systems could adversely affect our business.

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We rely on information technology networks and systems to operate and manage our business and store our confidential and proprietary information.

Our services will also involve the storage, processing and transmission of our customers’ data, including personal and financial information.

We also engage third-party service providers to store and process this data.

The services of our Blade subsidiary involve, and our planned air taxi services will also involve the storage, processing and transmission of our customers’ data, including personal and financial information.

We engage third-party service providers to store and process this data.

While we believe we and our service providers take reasonable steps to secure these networks and systems, our information technology infrastructure may be vulnerable to computer viruses or physical or electronic intrusions that our security measures may not detect.

Any such security incident, including those resulting from cybersecurity attacks, phishing attacks, unauthorized access or usage, virus or similar breach or disruption could result in the loss, destruction, alteration or disclosure of this data, which could damage our reputation and lead to litigation, regulatory investigations, or other

These attacks may come from individual hackers, corporations, criminal groups, and state-sponsored organizations.

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damage our brand and reputation;

force us to cease operations for some length of time;

force us to cease

operations for some length of time;

and materially adversely affect our business, results of operations, and financial condition.

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Our Santa Cruz testing facilities, in particular, are located in an area that is at high risk due to wildfire.

These facilities are also subject to a

risk of closure due to zoning and permitting issues.

These facilities are also subject to a risk of closure due to zoning and permitting issues.

Destruction or our inability to use any of our facilities for a prolonged period of time could materially impact our ability to meet our projected timelines.

The potential effects of climate change, such as increased frequency and severity of storms, floods, fires, sea-level rise and other climate-related events, could affect our operations, infrastructure and financial results.

We could incur significant costs to improve the climate resiliency of our infrastructure and otherwise prepare for, respond to, and mitigate such effects.

We could incur significant costs to improve the resiliency of our infrastructure and otherwise prepare for, respond to, and mitigate such effects.

We cannot accurately predict the materiality of any potential losses or costs associated with the effects of climate change.

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Additionally, our manufacturing operations are hazardous at times and may expose us to safety risks, including environmental risks and health and safety hazards to our employees or third parties.

Furthermore, there is an increasing focus on environmental disclosure and regulation at the local, state and federal levels.

Furthermore, there is an increasing focus on environmental disclosure and regulation at the local, state and international levels.

Additional laws in these areas, if enacted, could be difficult or costly to comply with.

We maintain general liability insurance, aviation flight testing insurance, aircraft liability coverage, directors and officers (“D&O”) insurance, and other insurance policies, and we believe our level of coverage is customary in the industry and adequate to protect against claims.

We maintain general liability insurance, aviation flight testing insurance, aircraft liability coverage, directors and officers (“D&O”) insurance, and other insurance policies, and in some cases, we self-insure where we believe it is appropriate to do so.

We believe our level of coverage is customary in the industry and adequate to protect against claims.

However, there can be no assurance that our insurance will be sufficient to cover all potential claims or that present levels of coverage will be available in the future at reasonable cost or at all.

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We have in the past, and may in the future, experience delays in filling certain positions.

In addition, in December 2024, our Chief Financial Officer notified us of his resignation, effective December 13, 2024, for personal reasons.

While we search for a new Chief Financial Officer, these duties are being carried out by other individuals within the management team.

For example, our Chief Financial Officer resigned in December 2024, for personal reasons.

Our current Chief Financial Officer joined in May 2025.

During the interim period, the duties of the Chief Financial Officer were carried out by other individuals within the management team.

In addition, there is a shortage of pilots that is expected to exacerbate over time as more pilots in the industry approach mandatory retirement age.

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We compete against airlines and other air mobility and transportation services for pilots and other skilled labor, some of which will offer wages or benefit packages exceeding ours.

The loss of any of the members of our senior management team or other highly skilled personnel, or our inability to hire, train, and retain qualified pilots and mechanics could harm our business and prevent us from implementing our growth plans.

The loss of members of our senior management team or other highly skilled personnel, or our inability to hire, train, and retain qualified pilots and mechanics could harm our business and prevent us from implementing our growth plans.

Our business may be adversely affected by union activities.

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As restrictions on resale end, the sale or possibility of sale of these shares could have the effect of increasing the volatility in our share price or the market price of our common stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.

Our Certificate of Incorporation, Bylaws, and policies and procedures are designed to ensure compliance with applicable aviation regulations.

Our Certificate of Incorporation provides that we will ensure we are in compliance with applicable provisions of law and regulations relating to ownership and control of a United States air carrier, including Title 49, United States Code, Section 40102 and interpretations and guidance thereof issued by the United States Department of Transportation or its successor, or as the same may be from time to time amended.

Current restrictions imposed by federal law on foreign ownership of United States air transportation operations require that no more than 25% of an air carrier's voting stock be voted, directly or indirectly, by persons who are not U.S.

Our Bylaws contain provisions to ensure United States ownership interest in, and actual control of, the air carrier, free from non-citizen ownership, control, and influence.

Pursuant to such provisions, we or a designated transfer agent shall maintain a Foreign Stock Record for registered common stock known to us to be owned and/or controlled by non-U.S.

citizens, we will not operate under a Federal Aviation Administration Part 135 air carrier or operating certificate unless in compliance with applicable requirements for such certificate and we will

implement policies and procedures to ensure compliance with these requirements.

If we fail to ensure such compliance or do not implement adequate policies and procedures related to voting rights of persons who are not U.S.

citizens, we will be unable to operate in the United States as a United States air carrier.

Once our aircraft is certified, the inability to operate as a United States air carrier could have a material adverse effect on our business, prospects, financial condition and results of operations.

If we are deemed to be an investment company under the Investment Company Act of 1940, our results of operations could be harmed.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors