What changed in Strata Critical Medical, Inc.'s 10-K — 2023 vs 2024

Blade also offers additional services including donor logistics coordination and support evaluating potential donor organs through our Trinity Organ Placement Services (“TOPS”) offering, launched at the end of 2023. Our Business Model Blade leverages an asset-light business model: we primarily utilize aircraft that are owned and/or operated by third parties on Blade’s behalf.

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 Blade’s oversight. See Item 2. Properties “—Aircraft Assets” in this Annual Report for more information. We prioritize the use of owned aircraft and dedicated aircraft under CPAs, which provide better economies of scale.

As part of our broader Medical segment, we also provide technology-enabled solutions to help transplant centers and organ procurement organizations streamline organ evaluation and logistics. This service enhances the efficiency and cost-effectiveness of organ placement, further strengthening our position in the organ transportation industry.

In the year ended December 31, 2024, approximately 47% of Blade’s flight costs were pursuant to CPAs that included flight volume guarantees from Blade. While limited in number, our owned aircraft fleet represents a meaningful portion of our Medical segment operations.

Assuming a full year of operations for all ten aircraft, they will account for approximately 17% of Blade’s total company flight costs and nearly one-third of all Medical segment flying, underscoring the strategic impact of our targeted asset ownership approach.

In our TOPS business line, where we help our customers evaluate the suitability of potential donor organs for transplant, we primarily compete with transplant centers’ own internal resources or a limited number of specialty firms focused on organ evaluation and placement.

We compete primarily on our ability to save our customers money while enabling them to efficiently evaluate a larger number of organ offers for potential transplant. Many of our TOPS customers also utilize our logistics services given the ease of use inherent in our integrated offering, but this is not required.

However, some companies that manufacture organ preservation technology or provide surgical organ recovery, services that we do not currently offer, now also provide bundled organ transportation that competes with us.

Among these employees, we had 310 permanent employees and 12 temporary employees. Our workforce consists of 91 employees in our Passenger segment, 199 employees in our Medical segment, and 32 employees in our headquarters functions. None of our employees are represented by a labor union.

The California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (“CCPA”) broadly defines personal information gives California residents expanded privacy rights and protections, and provides for civil penalties for certain violations.

Many other states have either passed, proposed or are considering privacy laws similar to, and in some respects more stringent than, the CCPA. The patchwork of privacy laws in the U.S. heightens the cost of compliance, the risks of noncompliance, and the potential for enforcement actions by individual state attorneys general, regulators, and lawsuits brought by private plaintiffs.

In addition, our business may be subject to laws regulating marketing activities by telephone, email, mobile device and the internet, including the CAN-SPAM Act of 2003 and the Telephone Consumer Protection Act of 1991, and federal and state laws prohibiting unfair or deceptive acts and practices, including Section 5 of the Federal Trade Commission Act.

In Canada, the Personal Information Protection and Electronic Documents Act or PIPEDA, and provincial laws, require that companies provide privacy notices to consumers, with some exceptions obtain consent to use personal information, and provide data subject rights to individuals.

The Protected Health Information (“PHI”) that our Medical segment receives is subject to the Health Insurance Portability and Accountability Act, as amended, and implementing privacy, security, and breach notification regulations (“HIPAA”).

HIPAA limits the use and disclosure of PHI, and requires the implementation of administrative, physical, and technical safeguards to ensure the confidentiality, integrity, and availability of individually identifiable health information in both paper and electronic form.

We are a Business Associate under HIPAA, and may be subject to penalties for, or required to enter into monitoring or resolution agreements for, among other activities, failing to enter into written agreements where required by law and violations of HIPAA, including breaches.

Under the breach notification rule, covered entities must notify affected individuals without unreasonable delay in the case of a breach of unsecured PHI, which compromises the privacy or security of the PHI. In addition, notification must be provided to the U.S.

Department of Health and Human Services and the local media in cases where a breach affects 500 or more individuals. Breaches affecting fewer than 500 individuals must be reported to the Department of Health and Human Services (“HHS”) on an annual basis.

There can be no assurance that we will not be the subject of an investigation (arising out of a reportable breach incident, audit, or otherwise) alleging non-compliance with HIPAA in our maintenance of PHI.

In some cases, HIPAA violations have resulted in lawsuits, settlement payments, and actions by state attorneys general to prosecute HIPAA violations committed against residents of their states.

While HIPAA does not create a private right of action that would allow individuals to sue in civil court for a HIPAA violation, its standards have been used as the basis for the duty of care in state civil suits, such as those for negligence or recklessness in misusing personal information.

Healthcare The procurement and transportation of organs is coordinated by OPOs, which are nonprofit entities that provide or arrange for the transportation of donated organs to transplant centers and that meet certain statutory criteria and performance standards. OPO advisory boards have the authority to recommend policies for the transportation of organs to transplant hospitals.

OPOs must meet certain requirements to have their organ procurement services to hospitals covered by Medicare and Medicaid. Hospitals that receive Medicare and Medicaid funding must separately meet certain conditions of participation related to organ, tissue, and eye procurement.

A number of federal and state healthcare laws, generally referred to as fraud and abuse laws, apply to healthcare providers and others that make, offer, seek or receive referrals or payments for products or services that may be paid for through any federal or state healthcare program and in some instances any private health insurance program.

Given the breadth of these laws and regulations, they may affect our business, either directly or because they apply to our hospital and other clients.

For example, the federal Anti-Kickback Statute (the “AKS”) is broadly worded and prohibits, among other things, knowingly and willfully offering, paying, soliciting, or receiving remuneration, directly or indirectly, in cash or in kind, in return for or to induce (1) the referral of an individual covered by federal healthcare programs, such as Medicare and Medicaid, to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a federal healthcare program, or (2) the purchasing, leasing, or ordering, or arranging for or recommending the purchasing, leasing, or ordering of any good, facility, service, or item for which payment may be made in whole or in part under a federal healthcare program.

Court decisions have held that the AKS can be violated even if only “one purpose” of remuneration is to induce or reward referrals or other business generated between the parties. Further, a person or entity does not need to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation.

Violations of the AKS include imprisonment for up to ten years, exclusion from participation in federal healthcare programs, including Medicare and Medicaid, potential liability under the federal civil False Claims Act, and significant civil and criminal fines and monetary penalties, plus a civil assessment of up to three times the total payments between the parties to the arrangement.

Under HIPAA, there are additional provisions regarding healthcare fraud and false statements relating to healthcare matters, which if not complied with, could have an impact on our business. The healthcare fraud provision prohibits knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private payors.

Similar to the AKS, a person or entity no longer needs to have actual knowledge of the healthcare fraud provision or specific intent to violate it in order to have committed a violation.

The false statements provision prohibits knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false, fictitious, or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items, or services.

Violations of these provisions are felonies and may result in fines or imprisonment, or, in the case of the healthcare fraud provision, exclusion from government programs. 9 Table of Contents Additionally, the Civil Monetary Penalties Law authorizes the imposition of civil monetary penalties, assessments, and exclusion against an individual or entity based on a variety of prohibited conduct, including, but not limited to: presenting, or causing to be presented, claims, reports, or records relating to payment by Medicare, Medicaid or other government payors that the individual or entity knows or should know are for an item or service that was not provided as claimed or is false or fraudulent; violating the AKS; making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim for payment for items and services furnished under a federal healthcare program; and failing to report and return an overpayment owed to the federal government.

Violations of applicable fraud and abuse laws could result in substantial civil monetary penalties that may be imposed under the federal Civil Monetary Penalties Law and may vary depending on the underlying violation.

In addition, an assessment of not more than three times the total amount claimed for each item or service may also apply and a violator may be subject to exclusion from federal and state healthcare programs. Many states, including certain states in which we conduct our business, have adopted fraud and abuse laws similar to the federal laws described above.

Some state fraud and abuse laws apply to items and services reimbursed by any third-party payor, including commercial insurers. For example, several states have anti-kickback and self-referral prohibitions, which may apply regardless of whether the payor for such claims is Medicare or Medicaid and which may affect our ability to enter into financial relationships with certain entities or individuals.

A determination of liability under state fraud and abuse laws could result in fines, penalties, and restrictions on our ability to operate in these jurisdictions, administrative sanctions, exclusions from governmental healthcare programs, refund requirements, and disciplinary action by the applicable governmental authority, and could have a material adverse effect on our business, financial condition, results of operations, cash flows, and reputation.

Corporate Background Our predecessor was a special purpose acquisition company incorporated in Delaware in 2019 under the name of Experience Investment Corp. (“EIC”). In 2021, EIC acquired Blade Urban Air Mobility, Inc. (“Old Blade”) and changed its name to Blade Air Mobility, Inc.