Strata Critical Medical Inc.
03/03/2026 | Press release | Distributed by Public on 03/03/2026 10:53
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with other sections of this Annual Report on Form 10-K, including our consolidated financial statements and the related notes and other financial information included elsewhere in this Annual Report on Form 10-K.
In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. For important information regarding these forward-looking statements, please see the discussion above under the caption "Note Regarding Forward-Looking Statements."
Overview
Strata Critical Medical, Inc. (f/k/a Blade Air Mobility, Inc.) ("Strata" or the "Company") is a time-critical logistics and medical services provider to the United States healthcare industry. The Company operates one of the nation's largest air transport and surgical services networks for transplant hospitals and organ procurement organizations, offering an integrated "one call" solution for donor organ recovery. Strata's core services include air and ground logistics, surgical organ recovery, organ placement and normothermic regional perfusion for the transplant industry, as well as perfusion staffing and equipment solutions for cardiovascular surgery centers, offered under the Trinity Medical Solutions ("Trinity") and Keystone brands.
Strata's mission is to increase the number of organs that are successfully transplanted while leveraging the Company's expertise and resources to provide other medical and logistics services to a broader customer base. Strata's goals are closely aligned with those of all participants in the transplant ecosystem, including transplant centers, regulators, Organ Procurement Organizations ("OPOs") and other service providers. We believe that, by working with Strata, industry participants can save money, save more lives and operate more efficiently.
Beginning with the fourth quarter of 2025, following the integration of Keystone, Strata operates across two segments: Logistic and Clinical (see Note 11, to the consolidated financial statements included in this Annual Report on form 10-K for further information on reportable segments), both offering services related to organ transplant and the broader healthcare industry. All of Strata's services are provided to transplant centers, organ procurement organizations, hospitals or other businesses that pay the Company directly. Strata provides:
Logistics Segment
Strata's Logistics segment is marketed under the Trinity brand name and includes the following:
•Air Logistics - Air transportation of human organs for transplant as well as related staff, equipment, blood samples, and tissue samples. Service is typically provided on fixed wing aircraft operating specifically for each individual organ. Strata also offers on-board couriers for commercial flights and "next flight out" shipping coordination.
•Ground Logistics - Ground transportation of human organs for transplant as well as related staff, equipment, blood samples, and tissue samples.
•Organ Placement - Administrative services related to the acceptance of potential donor organs for recipients and support coordinating with the transplant process.
Clinical Segment
Strata's Clinical segment is marketed under the Keystone brand name and includes the following:
Transplant Clinical
•Organ Recovery - Surgical procurement of donor organs.
•Normothermic Regional Perfusion ("NRP") - In situ perfusion of donor organs with oxygenated blood to improve clinical outcomes and enable functional assessment prior to recovery.
•Preservation - Operation of devices utilized to preserve organs prior to being transplanted into a recipient.
Other Clinical Services
•Cardiac Care - Cardiac perfusion, blood management & autotransfusion and disposables. Services are typically provided under contract with hospitals to support open-heart surgery procedures.
•Other - Extracorporeal Membrane Oxygenation ("ECMO") services, perfusion temporary staffing and equipment rental offered to healthcare providers.
Outlined below are recent material transactions impacting this Annual Report on Form 10-K.
Sale of Passenger business
On August 29, 2025, the Company completed the previously disclosed sale of its Passenger business to Joby Aero, Inc. ("Joby Buyer"), pursuant to an Equity Purchase Agreement, dated August 1, 2025 (the "Joby Purchase Agreement"). The Passenger business acquired by the Joby Buyer pursuant to the Joby Purchase Agreement consisted of the Company's business of offering, selling, promoting, marketing, planning, booking, brokering, coordinating and arranging the transportation of passengers on aircraft operated by other entities and related ground transportation services. The purchase price received by the Company upon the consummation of the transactions contemplated by the Joby Purchase Agreement was approximately $76.0 million based on the closing price per share of $14.27 of Joby Aviation Inc's ("Joby Aviation") common stock as of August 28, 2025), after giving effect to certain pre-closing adjustments and indemnity holdbacks pursuant to the terms of the Joby Purchase Agreement, consisting of 5,325,585 shares of Joby Aviation's common stock, par value $0.0001 per share (the "Buyer Shares"). The Company subsequently sold the Buyer Shares received in connection with closing for net proceeds of $70.2 million. The Company may receive up to an additional $35.0 million in consideration upon the satisfaction of certain financial performance and employee retention targets described in the Joby Purchase Agreement during the 12 and 18 months, respectively, following the closing of this transaction, payable in cash or Buyer Shares at Joby Buyer's election, as well as the release of up to $10.0 million in indemnity holdbacks. The number of Buyer Shares issued to the Company, if any, shall be based on the average of the daily volume-weighted average sales price per Buyer Share on the New York Stock Exchange for each of the ten consecutive trading days ending on and including the first trading day preceding the applicable measurement dates described in the Joby Purchase Agreement.
The sale qualified as a discontinued operation under ASC 205-20. The Passenger business acquired by Joby Buyer included all operations previously reported within the Passenger segment, as well as certain assets and activities previously
reported within unallocated corporate expenses and software development, including certain costs related to software development personnel, the Company's former CEO and headquarter lease.
The assets and liabilities of the Passenger business as of December 31, 2024 were retrospectively classified as held for sale and presented as discontinued operations. The results of operations for the years ended December 31, 2025 and 2024 reflect the financial results of the Passenger business, including activity through August 29, 2025, the transaction date, as discontinued operations. The cash flows and comprehensive income of the Passenger business have not been separately presented and are included in the consolidated statements of cash flows and consolidated statements of comprehensive loss, respectively, for all periods presented. Unless otherwise indicated, the information in the notes to the consolidated financial statements refer only to Strata's continuing operations and do not include discussion of balances or activity of the Passenger business.
Acquisition of Keystone Perfusion Services, LLC.
On September 16, 2025, the Company completed the acquisition of Keystone Perfusion Services, LLC ("Keystone"), an organ recovery and normothermic regional perfusion service provider to the transplant industry, pursuant to a Purchase and Sale Agreement, dated September 16, 2025 (the "Keystone Purchase Agreement"), for the following upfront payments: cash $111.3 million (comprised of $67.0 million paid directly to the seller and $44.3 million directed by the seller to other parties on the close date) and 3,434,609 shares (where 1,717,303 are held in escrow). The purchase consideration price is subject to final adjustment, upward or downward by up to $12.4 million, based on Keystone's actual 2025 Adjusted EBITDA performance, with the adjustment to be determined by March 2026. In addition, total potential earn-out payments of up to $23.0 million in the aggregate for the three-year period from 2026 through 2028 may be made contingent upon Keystone's achievement of gross profit targets (as defined in the Keystone Purchase Agreement). See Note 4 to the consolidated financial statements included in this Annual Report on Form 10-K for additional information.
Our Business Model
Logistics Services
We typically provide logistics services to transplant centers, organ procurement organizations and other businesses on a contractual basis including provisions stipulating that Strata will be the "first call" for any transportation needs.
Pricing is based on a fixed price per flight hour flown with a fuel cost surcharge above a set benchmark. Ancillary costs such as landing fees and de-icing are passed through to the end customer.
Strata leverages an asset-light air logistics business model: we primarily utilize aircraft that are owned and/or operated by third parties on Strata's behalf. In these arrangements, pilots, maintenance, hangar, insurance, and fuel are all costs borne by our network of operators, which provide aircraft flight time to Strata at fixed hourly rates. This enables our operator partners to focus on training pilots, maintaining aircraft and flying, while we maintain the relationship with our customer from booking through flight arrival.
When utilizing third-party aircraft and/or aircraft operators, we typically pre-negotiate fixed hourly rates and flight times, paying only for flights actually flown, creating a predictable and flexible cost structure. Strata provides guaranteed flight commitments to some of our third-party operators through capacity purchase agreements ("CPAs"), which enable Strata to ensure dedicated access to such aircraft with enhanced crew availability, lower costs and, in many cases, the ability to unlock more favorable rates when flying more than the minimum number of hours we guarantee to the operator. Additionally, a significant portion of trips are flown by safety-vetted operators to whom we make no commitments, providing us with additional flexible capacity for high demand periods.
Over the course of 2024, we acquired ten fixed wing aircraft that are dedicated to the Logistics segment. We made the decision to invest in a limited number of owned aircraft based in high-volume geographies as we believe direct asset ownership will enable (i) improved economies of scale; (ii) increased uptime, enabling more reliable service and higher asset utilization; and (iii) the ability to compete for certain contracts where asset ownership is preferred or required. All of these aircraft are operated and maintained by third-party service providers under Strata's oversight. We prioritize the use of owned aircraft and dedicated aircraft under CPAs, which provide better economies of scale. We size our owned fleet and our commitments under CPAs significantly below our expected demand, enabling us to maximize utilization on those aircraft while fulfilling incremental demand through our network of non-dedicated operators.
We provide ground logistics using a combination of owned vehicles, which are allocated to hub positioned near our customers across the United States, and third-party providers.
We utilize a combination of company employees and contractors as couriers to facilitate the transportation of organs, typically kidneys, aboard scheduled commercial flights. For next flight out (NFO) services, where kidneys are placed in the cargo hold of a commercial flight, we coordinate with third-party providers on behalf of our customer.
Organ placement services are provided on a contractual basis with a fixed monthly fee based on the size of the customer's program.
Clinical Services
We employ perfusionists and transplant surgeons that are primarily dedicated to a specific customer in a particular geography. We own perfusion equipment which is often provided as part of our services or offered through a traditional leasing arrangement.
Our clinical work for OPOs typically consists of surgical recovery, NRP services and related equipment provided on a contractual basis with a combination of retainer and per case fees.
For transplant centers, surgical recovery and NRP services are typically provided on an ad hoc basis with pricing on a per case basis. We leverage surgeons, perfusionists and equipment in place to support our OPO customers to provide more efficient options to transplant centers, utilizing locally available resources wherever possible to avoid incremental logistics costs.
For cardiac care hospitals, we typically provide perfusion staffing, often combined with perfusion equipment, on a contractual basis with a combination of retainer and per case fees.
Technology
We also utilize proprietary technology to manage staffing, training and chain of custody, as well as help customers streamline organ evaluation, procurement and logistics. Our technology enhances the efficiency and cost-effectiveness of our service offerings, further strengthening our position in the organ transportation industry.
Factors Affecting our Performance
Availability of Donor Organs
The majority of our business is directly tied to the volume of heart, liver and lung transplants performed in the United States, which is driven primarily by the supply of donor organs that become available.
In recent years, the supply of donor organs has increased consistently, driven primarily by (i) increased utilization of Donation after Circulatory Death, which has expanded the pool of eligible donors; (ii) advancements in technology, including machine and regional perfusion; and (iii) regulatory changes enabling more efficient allocation of organs to recipients with higher need. However, there is no guarantee that this growth will continue, for example, recent months have shown a flattening in the number of deceased organ donors in America.
The supply of donor organs is subject to numerous factors outside our control, including changes in organ donation rates, advancements in medical technology, legislative, regulatory or policy changes affecting organ procurement and allocation, and shifts in public attitudes toward organ donation. Additionally, unforeseen events such as pandemics, public health crises, or changes in accident rates may impact the availability of donor organs. If the supply of viable organs declines or if legislative, regulatory or policy changes limit our ability to efficiently transport them, our medical transport business could be adversely affected, which could negatively impact our financial condition and growth prospects.
Ability to Attract and Retain Customers
We primarily serve transplant centers, organ procurement organizations and hospitals. Logistics support for the hearts, lungs and livers transplantations that make up the vast majority of our business is typically requested only hours before the required departure time. Our ability to successfully fulfill these requests with consistent pricing on the requested aircraft type is the primary metric by which our customers evaluate our logistics performance.
The organ logistics marketplace is highly competitive and we compete primarily on our ability to provide reliable, end-to-end air and ground transportation at competitive pricing. Increasingly, we compete directly with manufacturers of organ preservation equipment that also offer transportation or with providers that offer additional services, such as surgical organ recovery, that our customers find valuable.
We have responded to customer demand by introducing new services through our acquisition of Keystone, which launched our Clinical segment and enabled us to provide surgical recovery, NRP and other related services as part of an end-to-end offering. We have also added new offerings organically, such as our TOPS organ placement offering, whereby we assist customers in evaluating the suitability of potential donor organs for transplant. However, customers may still demand services or technology that we cannot provide, which could have a material adverse effect on our business, results of operations, and financial condition.
The market for our clinical service offerings, including surgical organ recovery, organ placement, and perfusion, both for transplant and for cardiac care hospitals, is also highly competitive. We compete in our Clinical segment primarily on our ability to provide high-quality, reliable service integrating electronic recordkeeping to demonstrate compliance with best practices.
Specifically for our transplant-related services, we also compete on our ability to integrate offerings from our Logistics and Clinical segments, resulting in more streamlined communication and efficient transportation, saving time and money for our customers. Some of our competitors offer many of the same services we provide in an integrated "one call" offering, but we believe that our offering is more comprehensive in terms of both the variety of services we provide and the breadth of third-party devices that we support.
Ability to Secure Aircraft Capacity
Historically, our ability to aggregate significant demand for flights has been enough to incentivize operators to provide aircraft and crews for our use. However, there is no guarantee that we will continue to be able to secure dedicated aircraft at favorable rates, particularly given significant increases in demand for private jet aircraft in the United States in recent years. Periods of increased demand for private jets have historically led to increased charter costs and more limited availability in the spot jet charter market. Although this has not limited our ability to maintain or increase our access to dedicated jet aircraft at fixed prices in recent periods, there is no guarantee this will continue in the future.
To manage this risk, we enter into long-term capacity purchase agreements with aircraft owners and operators and have purchased a number of jet aircraft, all of which are 100% dedicated to Strata's needs.
Ability to Hire, Train and Retain Clinicians
Our surgical recovery, NRP, organ placement and cardiac care offerings depend on our ability to hire, train and retain clinicians, particularly perfusionists and organ recovery surgeons.
Historically, our ability to aggregate demand across transplant centers and cardiac care hospitals has made us an attractive employer for clinicians and enabled us to optimize our staffing model to offer both competitive pricing to customers and attractive pay to our employees. However, given the significant growth in these fields as well as increasing competition, there is no guarantee this will continue.
Impact of Inflation to our Business
We generally pay a fixed hourly rate to our third-party operators based on flight hours flown. These rates are susceptible to inflation and are typically renegotiated on a yearly basis, though some multi-year contracts have fixed rate increases. Some contracts with operators allow for pass-through of fuel price increases above a set threshold. For our owned aircraft, we are more directly exposed to inflation of aircraft operating expenses, including pilot salaries, fuel, insurance, parts and maintenance.
Given significant growth in organ transplant volumes and an increasing percentage of organs that are recovered by commercial surgeons and undergo NRP, demand for clinicians skilled in these procedures is high resulting in inflation in salaries and fees paid to these practitioners.
We have historically passed through cost inflation to customers and most logistics contracts with customers automatically pass through any fuel surcharges, but there is no guarantee this will continue in the future.
Seasonality
Our Logistics trip volumes and Clinical case volumes are correlated with the overall supply of donor hearts, livers and lungs in the United States, which can be volatile due to a variety of factors. Over the last several years, industry transplant volumes exhibited modest seasonal softness in the calendar third quarter, though our own case and flight volumes have not always followed this industry trend.
Key Components of the Company's Results of Operations
Revenue
Services are typically purchased through our coordinators and are paid for principally via checks and wires. Logistics services are typically provided and billed on a fee-for-service basis, while Clinical services are provided and billed on both a fee-for-service and retainer basis. Payments are generally collected after the performance of the related service in accordance with the client's payment terms. Fee-for-service revenue is recognized when the service is completed, while retainer revenue is recognized over the retainer contractual term.
Cost of Revenue
Cost of revenue consists of costs of operating our aircraft fleet, including pilots' salaries, flight costs paid to operators of aircraft and vehicles, depreciation of aircraft, vehicles and medical devices, staff costs directly supporting Logistics and Clinical services, and costs of disposable medical products.
Selling, General and Administrative
Selling, general and administrative ("SG&A") expenses consist primarily of: staff costs for employees in the commercial, technology, executive, marketing and administrative functions; sales commissions; stock-based compensation; professional and consulting fees; insurance; facilities; information technology and software development costs; promotional expenses; pilot training costs; impairment of assets; and other general corporate overhead costs. SG&A expenses are expensed as incurred..
Amortization of Intangible Assets
Amortization of intangible assets consists of amortization of customer lists, trademarks, technology acquired in business combinations and capitalized software development costs. Amortization expense is recognized on a straight-line basis over their estimated useful lives.
Discontinued Operations
On August 29, 2025, we completed the sale of our Passenger business to the Joby Buyer pursuant to the Joby Purchase Agreement. We determined that the sale of the Passenger business represented a strategic shift that will have a major effect on our operations and financial results. Accordingly, the sale is classified as discontinued operations.
We present discontinued operations when a disposal of a component or group of components represents a strategic shift that will have a major effect on our operations and financial results. The results from discontinued operations of the Passenger business prior to and through its sale are presented as net income (loss) from discontinued operations, net of income taxes, in the consolidated statements of operations and comprehensive loss for all periods presented. The assets and liabilities of the Passenger business have been classified as discontinued operations and segregated for all periods presented in the consolidated balance sheets. See Note 5 to the consolidated financial statements included in this Annual Report on Form 10-K for additional information.
Results of Operations
The following table presents our consolidated statements of operations for the periods indicated:
| Year Ended December 31, | |||||||||||||||||||||||
| 2025 | % of Revenue | 2024 | % of Revenue | ||||||||||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||||||||||
| Revenue | $ | 197,141 | 100% | $ | 146,817 | 100% | |||||||||||||||||
|
Cost of revenue
|
156,015 | 79% | 117,228 | 80% | |||||||||||||||||||
| Gross Profit | 41,126 | 21% | 29,589 | 20% | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
|
Selling, general and administrative
|
60,875 | 31% | 50,856 | 35% | |||||||||||||||||||
|
Amortization of intangible assets
|
2,604 | 1% | 1,258 | 1% | |||||||||||||||||||
| Total operating expenses | 63,479 | 32% | 52,114 | 35% | |||||||||||||||||||
| Operating loss from continuing operations | (22,353) | (22,525) | |||||||||||||||||||||
| Other non-operating income (loss) | |||||||||||||||||||||||
|
Interest income
|
4,241 | 7,214 | |||||||||||||||||||||
| Change in fair value of warrant liabilities | 4,278 | (850) | |||||||||||||||||||||
| Change in fair value of assets and other liabilities | (1,037) | - | |||||||||||||||||||||
| Realized loss from sales of short-term investments | (5,195) | - | |||||||||||||||||||||
| Total other non-operating income | 2,287 | 6,364 | |||||||||||||||||||||
| Loss from continuing operations before income taxes | (20,066) | (16,161) | |||||||||||||||||||||
| Income tax expense (benefit) from continuing operations | - | - | |||||||||||||||||||||
| Net loss from continuing operations | $ | (20,066) | $ | (16,161) | |||||||||||||||||||
| Net income (loss) from discontinued operations | 61,413 | (11,146) | |||||||||||||||||||||
|
Net income (loss)
|
$ | 41,347 | $ | (27,307) | |||||||||||||||||||
| Basic and diluted earnings (loss) per share | |||||||||||||||||||||||
| Continuing operations | $ | (0.24) | $ | (0.21) | |||||||||||||||||||
| Discontinued operations | $ | 0.75 | $ | (0.14) | |||||||||||||||||||
| Total basic and diluted earnings (loss) per share | $ | 0.50 | $ | (0.35) | |||||||||||||||||||
| Weighted-average number of shares outstanding, basic and diluted | 82,092,345 | 77,499,423 | |||||||||||||||||||||
Comparison of Years Ended December 31, 2025 and 2024
Revenue
Disaggregated revenue by segment was as follows:
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | % Change | ||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||
| Logistics | ||||||||||||||||||||
| Logistics | $ | 176,793 | $ | 146,817 | 20.4 | % | ||||||||||||||
| Clinical | ||||||||||||||||||||
| Transplant clinical | $ | 8,964 | $ | - | NM(1) | |||||||||||||||
| Other clinical | 11,384 | - | NM(1) | |||||||||||||||||
| Total Clinical | $ | 20,348 | $ | - | NM(1) | |||||||||||||||
| Total revenue | $ | 197,141 | $ | 146,817 | 34.3 | % | ||||||||||||||
(1) Percentage not meaningful.
For the years ended December 31, 2025 and 2024, revenue increased by $50.3 million or 34.3%, from $146.8 million in 2024 to $197.1 million in 2025.
Logistics revenue increased by $30.0 million, or 20.4% from $146.8 million in 2024 to $176.8 million in 2025, driven by growth in flight hours, ground transportation and revenue per trip. The increase in flight hours was attributable to both existing and new clients, with several major new contracted clients commencing operations in the second quarter of the year 2025.
Clinical revenue was $20.3 million in 2025, reflecting the acquisition of Keystone in mid-September 2025. There was no clinical revenue in 2024. Clinical revenue in 2025 was comprised of transplant clinical revenue of $9.0 million and other clinical revenue of $11.4 million.
Gross Profit and Gross Margin
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||
| Gross profit: | |||||||||||||||||
| Logistics | $ | 36,631 | $ | 29,589 | 23.8 | % | |||||||||||
| Clinical | 4,495 | - | NM(1) | ||||||||||||||
| Total gross profit | $ | 41,126 | $ | 29,589 | 39.0 | % | |||||||||||
| Gross margin: | |||||||||||||||||
| Logistics | 21 | % | 20 | % | |||||||||||||
| Clinical | 22 | % | - | ||||||||||||||
| Total gross margin | 21 | % | 20 | % | |||||||||||||
(1) Percentage not meaningful.
For the years ended December 31, 2025 and 2024, Logistics gross profit increased by $7.1 million, or 23.8%, from $29.6 million in 2024 to $36.6 million in 2025, attributable to the 20.4% increase in revenue and an increase in gross margin from 20% to 21% attributable primarily to operational leverage in ground services with the expansion of ground hubs. For the year ended December 31, 2025, Clinical gross profit of $4.5 million was attributable to the acquisition of Keystone in mid-September 2025.
Total gross margin increased from 20% in 2024 to 21% in 2025, attributable primarily to the acquisition of Keystone in mid-September 2025, which operates at a higher average gross margin, as well as an improvement in Logistics gross margin, as discussed above.
Selling, General and Administrative
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | % Change | |||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||
| General and administrative staff and related costs | $ | 21,459 | $ | 19,676 | 9.1 | % | |||||||||||
| Selling and marketing including staff costs | 1,407 | 563 | 149.9 | % | |||||||||||||
| Software development including staff costs | 3,052 | 2,790 | 9.4 | % | |||||||||||||
| Professional fees | 11,559 | 4,974 | 132.4 | % | |||||||||||||
| Facilities and insurance | 4,588 | 4,057 | 13.1 | % | |||||||||||||
| Stock-based compensation | 16,958 | 18,471 | (8.2) | % | |||||||||||||
| Depreciation and impairment of property and equipment | 1,852 | 325 | 469.8 | % | |||||||||||||
| Total selling, general and administrative | $ | 60,875 | $ | 50,856 | 19.7 | % | |||||||||||
| Percentage of revenue | 31 | % | 35 | % | |||||||||||||
For the years ended December 31, 2025 and 2024, total selling, general and administrative expense increased by $10.0 million, or 19.7%, from $50.9 million in 2024 to $60.9 million in 2025.
The primary drivers of the increase were: (i) a $1.8 million increase in general and administrative staff and related costs attributable to the acquisition of Keystone in mid-September and increases commensurate with the growth in Logistics revenue; (ii) an $0.8 million increase in selling and marketing attributable to new hires as well as sales commissions commensurate with the revenue growth; (iii) a $6.6 million increase in professional fees, driven by a $4.7 million year-over-year increase related to settlement costs and legal fees associated with the Drulias lawsuit settled and paid in December 2025 (as discussed in "-Legal and Environmental" within Note 14 to the consolidated financial statements included in this Annual Report on Form 10-K), as well as M&A transaction costs related to the acquisition of Keystone; and (iv) an increase in depreciation and impairment of property and equipment in 2025 attributable to an impairment of aircraft's airframe for $1.7 million; partially offset by a $1.5 million decrease in stock-based compensation attributable to forfeiture of awards previously granted to the former CEO prior to his transfer to the Joby Buyer.
Amortization of intangible assets
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | % Change | |||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||
|
Amortization of intangible assets
|
$ | 2,604 | $ | 1,258 | 107.0 | % | |||||||||||
| Percentage of revenue | 1 | % | 1 | % | |||||||||||||
For the years ended December 31, 2025 and 2024, amortization of intangible assets increased by $1.3 million, or 107.0%, from $1.3 million in 2024 to $2.6 million in 2025, primarily attributable to (i) $1.1 million in amortization of intangibles generated from the acquisition of Keystone in mid-September 2025 and (ii) a $0.2 million increase due to higher amortization of capitalized software costs, as more development projects were completed and entered the amortization phase during 2025.
Other Non-Operating Income
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | % Change | |||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||
| Interest income | $ | 4,241 | $ | 7,214 | |||||||||||||
| Change in fair value of warrant liabilities | 4,278 | (850) | |||||||||||||||
| Change in fair value of assets and other liabilities | (1,037) | - | |||||||||||||||
| Realized loss from sales of short-term investments | (5,195) | - | |||||||||||||||
|
Total other non-operating income
|
$ | 2,287 | $ | 6,364 | (64.1)% | ||||||||||||
For the year ended December 31, 2025, total other non-operating income consisted of: (i) $4.2 million interest income, attributable to our short-term investments and our money market funds in the current year period (lower interest income is attributable to lower invested balances compared to the prior year period); (ii) $4.3 million non-cash income due to fair value revaluation of warrant liabilities as the value of the warrant liabilities fluctuates with the warrants' market price; (iii) $(1.0) million non-cash expense attributable to fair value remeasurement of contingent consideration (related to the Passenger divestiture and Keystone acquisition) and equity consideration held in escrow (related to the Keystone acquisition); and a (iv) $(5.2) million realized loss on the sale of securities received as consideration in the Passenger business divestiture. Fair value for these assets and liabilities, where applicable, is remeasured each reporting period.
For the year ended December 31, 2024, total other non-operating income consisted of: (i) $7.2 million interest income, attributable to short-term investments and money market funds; and a (ii) $0.9 million non-cash expense due to fair value revaluation of warrant liabilities as the value of the warrant liabilities fluctuates with the warrants' market price.
Income (loss) from discontinued operations, net of tax
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | % Change | ||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||
| Net income (loss) from discontinued operations | $ | 61,413 | $ | (11,146) | NM (1) | |||||||||||||||
(1) Percentage not meaningful.
For the year ended December 31, 2025, total net income from discontinued operations was $61.4 million and primarily consisted of: gain on disposal of discontinued operations of $57.0 million and operating income of $5.0 million attributable to revenue of $76.6 million from air transportation for passengers in the United States and Europe. This was offset by tax expense of $0.4 million, primarily due to limitations on the utilization of U.S. federal, state, and local net operating losses, including the U.S. federal limitation of post-2017 net operating losses to 80% of taxable income.
For the year ended December 31, 2024, total net loss from discontinued operations was $(11.1) million and primarily consisted of operating loss before tax of $(11.4) million attributable to revenue of $101.9 million from air transportation for passengers in the United States, Canada and Europe.
Operating income (loss) before tax from discontinued operations improved from $(11.4) million in 2024 to $5.0 million in 2025, driven primarily by a $5.8 million impairment charge associated with Blade Canada during the prior year period coupled with a reduction in associated amortization costs, a significant improvement in the profitability of the European operations following restructuring in October 2024, and a reduction in selling and marketing expense.
Adjusted EBITDA
The following table presents our consolidated results on a continuing operations basis for Adjusted EBITDA:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | % Change | |||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||
| Adjusted EBITDA (1) | $ | 14,051 | $ | 3,752 | 274 | % | |||||||||||
(1) See section titled "Reconciliations of Non-GAAP Financial Measures" for more information and a reconciliation to the most directly comparable GAAP financial measure.
Comparison of the Years Ended December 31, 2025 and 2024
Adjusted EBITDA from continuing operations improved by $10.3 million for the year ended December 31, 2025 from $3.8 million in 2024 to $14.1 million in 2025. The improvement is attributable to a $13.9 million increase in gross profit excluding depreciation, partially offset by a $3.6 million increase in fixed costs, commensurate with the growth in revenue and with the addition of fixed costs related to Keystone, which was acquired in mid-September 2025.
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA is a non-GAAP measure that has been derived from amounts calculated in accordance with GAAP, although it is not itself a GAAP measure. Strata believes that Adjusted EBITDA viewed in addition to and not in lieu of our reported U.S. GAAP results, provide useful information to investors by providing a more focused measure of operating results, enhancing the
overall understanding of past financial performance and future prospects, and allowing for greater transparency with respect to a key metric used by management in its financial and operational decision making. The non-GAAP measure presented herein may not be comparable to similarly titled measures presented by other companies. Adjusted EBITDA is defined and reconciled to the nearest GAAP financial measure below.
Adjusted EBITDA
Adjusted EBITDA is defined as net loss from continuing operations adjusted to exclude: (1) depreciation and amortization; (2) stock-based compensation; (3) change in fair value of warrant liabilities and other assets and liabilities; (4) interest income (5) income tax; (6) realized gains and losses on short-term investments; (7) impairment of intangible assets or property and equipment; and (8) certain other non-recurring items (shown below) that management does not believe are indicative of the Company's ongoing operating performance and would impact the comparability of results between periods.
| Year Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in thousands, except percentages) | ||||||||||||||
| Net loss from continuing operations | $ | (20,066) | $ | (16,161) | ||||||||||
| Add (deduct): | ||||||||||||||
| Depreciation and amortization | 6,900 | 3,258 | ||||||||||||
| Stock-based compensation | 16,958 | 18,471 | ||||||||||||
| Change in fair value of warrant liabilities | (4,278) | 850 | ||||||||||||
| Change in fair value of assets and other liabilities | 1,037 | - | ||||||||||||
| Realized loss from sales of short-term investments (1) | 5,195 | - | ||||||||||||
| Interest income | (4,241) | (7,214) | ||||||||||||
| Legal expenses and regulatory advocacy fees (2) | 6,022 | 1,382 | ||||||||||||
| Impairment of property and equipment | 1,655 | - | ||||||||||||
| M&A transaction costs and integration of the acquired company (3) | 2,237 | 241 | ||||||||||||
| Reorganization and rebranding costs related to the sale of the Passenger business (4) | 610 | - | ||||||||||||
| Corporate staff costs included in the sold Passenger business (5) | 2,022 | 2,386 | ||||||||||||
| Other (6) | - | 539 | ||||||||||||
| Adjusted EBITDA | $ | 14,051 | $ | 3,752 | ||||||||||
| Revenue | $ | 197,141 | $ | 146,817 | ||||||||||
| Adjusted EBITDA as a percentage of revenue | 7.1 | % | 2.6 | % | ||||||||||
(1) Consists of realized loss on the sale of securities of Joby Aviation received as consideration in the Passenger business divestiture.
(2) Includes settlement costs and legal fees related to the Drulias class action lawsuit which the parties entered into a Stipulation of Settlement to fully resolve the matter in December 2025 (see "- Legal and Environmental" within Note 14 to the consolidated financial statements included in this Annual Report on Form 10-K). We consider this matter to be non-recurring and not representative of the legal and regulatory advocacy costs typically incurred in the ordinary course of business.
(3) Consists of M&A transaction costs, including legal fees and professional fees related to financial, legal, and tax due diligence; and costs of integrating Keystone into a public company environment, including SOX compliance, preparation of standalone audited financial statements and pro forma financial information required for significant acquisitions (as defined by the SEC), enterprise resource planning migration, and software development costs to enhance Keystone's internally developed software to meet internal control standards.
(4) Consists of costs incurred in the process of decommissioning the Blade brand and introducing the Strata brand, including consultant fees, fleet rebranding, software application costs, as well as accounting fees associated with the carve-out and additional SEC filings required following the sale of the Passenger business.
(5) Represents corporate staff costs related to employees who transferred to Joby Aviation following the sale of the Passenger business on August 29, 2025. This adjustment is intended to enhance period-to-period comparability by excluding from all periods, costs associated with transferred employees whose corporate functions were not replaced. Under U.S. GAAP (ASC 205-20), these costs were required to remain in continuing operations prior to the divestiture because they were not directly attributable to discontinued operations.
(6) For the year ended December 31, 2024, consists of SOX readiness costs of $399 and executive severance costs of $140.
Liquidity and Capital Resources
Sources of Liquidity
As of December 31, 2025 and 2024, we had total liquidity of $61.2 million and $124.8 million, respectively, consisting of cash and cash equivalents of $31.0 million and $16.1 million, respectively, and short-term investments of $30.3 million and $108.8 million, respectively. In addition, as of December 31, 2025 and 2024, we had restricted cash of $0.3 million and $0.3 million, respectively. As of December 31, 2025, $30.3 million of short-term investments consisted of securities that are traded in highly liquid markets. The Company had net income of $41.3 million for the year ended December 31, 2025. During the year ended December 31, 2025, we realized net proceeds of $70.2 million from the sale of Buyer Shares received from the sale of the Passenger business.
With $61.2 million of total liquid funds as of December 31, 2025, we anticipate that we have sufficient funds to meet our current operational needs for at least the next 12 months from the date this Annual Report is filed. Although we have not historically sought external sources of financing to help fund our operational needs, in January 2026 we entered into a revolving credit facility (the "ABL Facility") backed by our accounts receivable, that provides additional liquidity and financial flexibility. This facility provides for borrowings of up to $30.0 million and includes an accordion feature permitting increases of up to an additional $20.0 million, subject to lender consent and other conditions.We may also, in the future, seek to take advantage of market opportunities to obtain additional financing on terms we deem attractive. The ABL Facility matures on January 30, 2029.
Borrowings under the ABL Facility bear interest, at the Company's election, at either (i) an adjusted term Secured Overnight Financing Rate ("SOFR") plus an applicable margin of 2.00% or (ii) a floating SOFR-based rate plus an applicable margin of 2.00%. The Company is also required to pay a commitment fee of 0.25% per annum on the unused portion of the facility. For further information on the ABL Facility, refer to Note 18 - "Subsequent Events" in the consolidated financial statements included in this Annual Report on Form 10-K.
Liquidity Requirements
As of December 31, 2025, the Company had net working capital of $106.4 million, cash and cash equivalents of $31.0 million and short-term investments of $30.3 million.
In the course of our business, we have certain contractual relationships with third-party aircraft operators pursuant to which we may be contingently required to make payments in the future. As of December 31, 2025, we had commitments to purchase flights from various aircraft operators with aggregate minimum flight purchase guarantees under CPAs of $2.6 million for the year ending December 31, 2026. See "-Capacity Purchase Agreements" within Note 14 to the consolidated financial statements included in this Annual Report on Form 10-K for additional information. Additionally, the Company has operating lease obligations related to real estate and vehicles with expected annual minimum lease payments of $0.6 million in each of 2026 and 2027. In January 2026, the Company entered into an agreement to purchase an additional aircraft for a purchase price of $3.8 million, of which a $0.2 million deposit was paid during the year ended December 31, 2025.
We may be required to make earn-out payments in connection with the acquisition of Keystone Perfusion Services, LLC, and may be entitled to receive earn-out proceeds in connection with the Passenger business divestiture. The fair value of the related contingent consideration assets and liabilities is reflected in the consolidated balance sheets. See Notes 4 and 5, respectively, to the consolidated financial statements included in this Annual Report on Form 10-K for additional information.
Based on our current liquidity, we believe that no additional capital will be needed to execute our current business plan over the next 12 months. Our longer-term liquidity requirement will depend on many factors including the pace of our expansion into new markets, our ability to attract and retain customers for our existing services, capital expenditures and acquisitions.
Cash Flows
The cash flows of the discontinued Passenger business have not been separately presented and are included in the consolidated statements of cash flows and the discussions below for all periods presented.
For 2025, Passenger cash flows are reflected from January 1 through the August 29, 2025 divestiture date, after which the related assets and liabilities were derecognized. Cash flows of Keystone are included beginning on the September 16, 2025 acquisition date. As a result, period-over-period changes may not be directly comparable and should be evaluated in light of the divestiture and acquisition.
The following table summarizes our cash flows for the periods indicated:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Net cash used in operating activities | $ | (48,914) | $ | (2,519) | |||||||
| Net cash (used in) / provided by investing activities | 69,750 | (1,016) | |||||||||
| Net cash used in financing activities | (8,912) | (5,759) | |||||||||
| Effect of foreign exchange rate changes on cash balances | (339) | (80) | |||||||||
|
Net increase (decrease) in cash and cash equivalents and restricted cash
|
$ | 11,585 | $ | (9,374) | |||||||
Cash Used In Operating Activities
For the year ended December 31, 2025, net cash used in operating activities was $48.9 million, driven by net income of $41.3 million, adjusted for net non-cash items of $29.5 million; transaction costs paid related to the sale of the Passenger business of $7.4 million; $44.3 million Keystone acquisition consideration for the settlement of seller-assumed liabilities (which were directed to third parties and therefore classified within operating activities and not within investing activities); and net cash used of $9.1 million from changes in working capital assets and liabilities. The $9.1 million net cash used from changes in working capital was primarily driven by: an increase of $12.0 million in accounts receivable (attributable to revenue growth and $2.1 million attributable to Passenger business activity prior to the sale); an increase of $1.7 million in prepaid and other current assets driven by timing of operator prepayments; partially offset by an increase of $2.4 million in accounts payable and accrued liabilities of $1.5 million attributable to Passenger business activity prior to the sale and $0.9 million increase in cost of revenue; an increase of $1.7 million in deferred revenue attributable to Passenger business activity prior to the sale and representing client prepayments; and a decrease of $0.7 million in other non-current assets.
For the year ended December 31, 2024, net cash used in operating activities was $2.5 million, driven by a net loss of $27.3 million, net non-cash items of $27.9 million and net $3.0 million of cash used by changes in our working capital assets and liabilities. The net cash used of $3.0 million from changes in our working capital assets and liabilities was primarily driven by a decrease in accounts payable and accrued expenses of $8.3 million, due to the cash payment for the Trinity contingent consideration compensation in the first quarter, an increase in accounts receivable of $1.0 million (attributable to revenue growth) and a decrease in deferred revenue of $0.1 million; partially offset by a decrease in prepaid expenses and other current assets of $6.4 million (driven by the utilization of $9.3 million of prepaid deposits under CPAs with M&N Equipment, LLC as part of the purchase of seven aircraft partially offset by new prepayments made to operators in connection with new CPAs).
Cash Provided by Investing Activities
For the year ended December 31, 2025, net cash provided by investing activities was $69.8 million, driven by $70.2 million of proceeds from the sale of Buyer Shares received in connection with the sale of the Passenger business and $226.2 million of proceeds from maturities of held-to-maturity investments; partially offset by $146.3 million in purchases of held-to-maturity investments, $66.5 million in cash consideration paid in connection with the Keystone acquisition, $9.7 million in purchases of property and equipment, consisting primarily of a spare engine, aircraft capitalized maintenance costs, and vehicles for ground logistics, $1.4 million in capitalized software development costs, and $2.8 million in cash transferred with the sale of the Passenger business, including post-close net working capital adjustment payment.
For the year ended December 31, 2024, net cash used in investing activities was $1.0 million, driven by $143.3 million in purchases of held-to-maturity investments, $30.9 million in purchases of property and equipment, consisting primarily of $27.1 million in the acquisition of ten aircraft and related capitalized maintenance costs to support the Logistics segment, with the remainder related to furniture and fixtures for new office space in Arizona and vehicles used in generating revenue
by the Logistics segment, $2.2 million in consideration paid for the acquisition of CJK and $2.1 million in capitalized software development costs, partially offset by $177.5 million of proceeds from maturities of held-to-maturity investments.
Cash Used In Financing Activities
For the year ended December 31, 2025, net cash used in financing activities was $8.9 million, driven by $9.1 million in cash paid for payroll tax payments on behalf of employees in exchange for shares withheld by the Company; partially offset by $0.2 million of proceeds from the exercise of stock options.
For the year ended December 31, 2024, net cash used in financing activities was $5.8 million, reflecting $5.7 million in cash paid for payroll tax payments on behalf of employees in exchange for shares withheld by the Company and $0.2 million in repurchases and retirement of common stock under a share repurchase program (expired on March 31, 2025); partially offset by $0.2 million of proceeds from the exercise of stock options.
Critical Accounting Estimates
This discussion and analysis of the Company's financial condition and results of operations is based on the Company's consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. In accordance with U.S. GAAP, the Company bases its estimates on historical experience and on various other assumptions the Company believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
We consider an accounting estimate to be critical if: (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.
We believe that of our significant accounting policies, which are described in the notes to the consolidated financial statements, the following accounting policies involve a greater degree of judgments, estimates and assumptions. Accordingly, these are the policies that we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. For information on the Company's significant accounting policies and estimates refer to Note 2 "Summary of Significant Accounting Policies" and the "Use of Estimates" section of Note 1 "Business and Basis of Presentation" in the consolidated financial statements included in this Annual Report on Form 10-K.
Stock-based compensation
Performance-based restricted stock units ("PSUs") are granted under our 2021 Omnibus Incentive Plan with vesting contingent upon the achievement of predetermined financial performance metrics over multi-year performance periods, generally three to four years. Performance metrics may include Adjusted EBITDA, Free Cash Flow and/or revenue, and certain awards are subject to a relative total shareholder return ("TSR") modifier. The number of shares ultimately earned generally ranges from 50% to 200% of target based on performance and is subject to continued service through the vesting date. For awards with a TSR modifier, the number of PSUs otherwise earned may be adjusted to 80%, 100% or 120% based on our TSR ranking relative to a peer group; for purposes of estimating expected payouts, we assumed a 100% modifier, which we believe is not material to our stock-based compensation expense.
We recognize compensation expense for PSUs based on the grant-date fair value and our estimate of the expected level and timing of achievement of the applicable performance targets. We reassess expected payout levels each reporting period and recognize changes in estimates on a cumulative catch-up basis. Changes in assumptions regarding the likelihood or timing of achieving performance targets could result in material adjustments to stock-based compensation expense.
Business Combinations and Valuation of Assets and Liabilities
We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make
significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, customer list and trademark, based on expected revenue growth rates and profitability margins, customer attrition rates, royalty rates for similar brand licenses, and discount rates.
Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Allocation of purchase consideration to identifiable assets and liabilities affects our amortization expense, as acquired finite-lived intangible assets are amortized over the useful life, whereas goodwill is not amortized. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.
For further information on the Company's acquisitions, refer to Note 4 - "Acquisitions" in the consolidated financial statements included in this Annual Report on Form 10-K.
Contingent Consideration
In connection with the acquisition of Keystone in September 2025, the Company agreed to pay additional consideration to the sellers contingent upon the achievement of certain post-acquisition financial performance targets. The contingent consideration arrangements include earn-out payments that are primarily based on specified EBITDA and gross profit metrics over defined measurement periods. The estimated fair value of the contingent consideration is recorded as a liability on the acquisition date and is remeasured to fair value at each reporting date, with changes in fair value recognized in earnings.
The fair value of the contingent consideration is estimated using an option-pricing model, which requires management to apply significant judgment and assumptions, including projected financial performance of the acquired business, the expected variability in future results, the probability of achieving the earn-out targets, the expected timing of payments, and an appropriate market-based discount rate. These assumptions are inherently uncertain, and changes in assumptions, particularly projected performance and volatility, could result in changes to the estimated fair value.
The Company also holds an earn-out receivable related to the sale of its Passenger business, which is contingent upon the achievement of specified EBITDA targets by the buyer and the retention of the Blade CEO with the Buyer. The earn-out receivable is measured at fair value using an option-based valuation approach. While its valuation requires judgment, it is based on a shorter-term, achieved performance framework and does not involve the same level of estimation uncertainty as contingent consideration liabilities associated with business combinations.
For further information on contingent consideration and earn-out arrangements, refer to Note 4 - "Acquisitions" and Note 5 - "Discontinued Operations" in the consolidated financial statements included in this Annual Report on Form 10-K.
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