What changed in this filing

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Item 1. Financial Statements

2023-08-10 compared with 2023-05-12 · 547 added, 631 removed, 840 unchanged (58% of the section changed)

3 unchanged sentences

(All amounts in U.S.

March 31, 2023

June 30, 2023 As of

December 31, 2022

4 unchanged sentences

Accounts receivable 1

11,815,732 28,902

Aircraft support parts 434,894 1,761,270

4 unchanged sentences

Intangible assets, net 155,369 208,196

Goodwill 2,457,937 2,457,937

Other noncurrent assets 7,583,603 4,356,225

Total assets $ 253,435,635 $ 305,978,901

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT

2 unchanged sentences

Accrued expenses and other current liabilities 7,823,154 18,669,572

Operating right-of-use

current liability

Operating right-of-use current liability 355,119 21,484

Current portion of long-term debt, net of debt issuance costs 2,459,654 2,445,594

1 unchanged sentence

Long-term accrued expenses and other noncurrent liabilities 6,864,516 45,659

Operating right-of-use

noncurrent liability

Operating right-of-use noncurrent liability 1,449,911 754,673

Long-term debt, net of debt issuance costs 2

205,060,810 205,471,958

Total liabilities $ 230,249,105 $ 230,579,294

2 unchanged sentences

Series A Preferred Stock, $ 0.0001 par value;

315,789.473684 shares authorized, issued and outstanding at March 31, 2023

Legacy Bridger Series C Preferred Shares,

$ 0.001 par value;

315,789.473684 shares authorized, issued and outstanding at June 30, 2023

342,738,969 —

Legacy Bridger Series C Preferred Shares, $ 0.001 par value;

315,789.473684 shares authorized, issued and outstanding at December 31, 2022

— 489,021,545

STOCKHOLDERS’ DEFICIT

Common Stock,

$ 0.0001 par value;

Common Stock, $ 0.0001 par value;

1,000,000,000 shares authorized;

shares issued and outstanding

at March 31, 2023;

44,505,944 shares issued and outstanding at June 30, 2023;

39,081,744 shares issued and outstanding at December 31, 2022

Additional paid-in

Additional paid-in capital 78,977,391 —

Accumulated deficit ( 400,054,307 ) ( 415,304,343 )

( 381,032,705

( 415,304,343

Accumulated other comprehensive income 1,519,571 1,678,497

Total stockholders’ deficit ( 319,552,439 ) ( 413,621,938 )

( 306,068,633

( 413,621,938

Total liabilities, mezzanine equity, and stockholders’ deficit $ 253,435,635 $ 305,978,901

Includes related party accounts receivable of $ 321,244 as of March 31, 2023.

Includes related party debt

of $ 10,000,000 for the 2022 taxable industrial revenue bond as of March 31, 2023 and December 31, 2022, respectively.

1 Includes related party accounts receivable of $ 427,454 as of June 30, 2023.

2 Includes related party debt of $ 10,000,000 for the 2022 taxable industrial revenue bond as of June 30, 2023 and December 31, 2022, respectively.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

2023 2022 2023 2022

$ 11,615,280 $ 12,753,671 $ 11,980,653 $ 12,822,963

Cost of revenues:

Flight operations 6,299,122 5,849,562 10,032,383 9,514,914

Maintenance 4,210,976 3,571,986 7,726,427 6,433,973

Total cost of revenues 10,510,098 9,421,548 17,758,810 15,948,887

Gross income (loss) 1,105,182 3,332,123 ( 5,778,157 ) ( 3,125,924 )

Selling, general and administrative expense 15,187,808 5,735,627 48,416,299 10,576,886

1 unchanged sentence

Interest expense 2

( 5,540,867 ) ( 2,293,682 ) ( 11,205,412 ) ( 6,008,228 )

Other income 601,891 134,311 1,693,328 275,154

Net loss $ ( 19,021,602 ) $ ( 4,562,875 ) $ ( 63,706,540 ) $ ( 19,435,884 )

Series A Preferred Stock – adjustment for deemed dividend upon Closing $ — $ — $ ( 48,300,000 ) $ —

1 unchanged sentence

Series A Preferred Stock – adjustment to maximum redemption value $ ( 5,805,582 ) $ — $ ( 10,080,022 ) $ —

Legacy Bridger Series A Preferred Shares – adjustment for redemption, extinguishment and accrued interest

Net income (loss) attributable to Common stockholders – basic and diluted

Net income (loss) per Common Stock – basic

Net income (loss) per Common Stock – diluted

Legacy Bridger Series A Preferred Shares – adjustment for redemption, extinguishment, accrued interest, and change in fair value $ — $ ( 81,323,569 ) $ — $ ( 85,663,336 )

Legacy Bridger Series C Preferred Shares - adjustment to maximum redemption value $ — $ ( 191,240,782 ) $ — $ ( 191,240,782 )

Net (loss) income attributable to Common stockholders - basic and diluted $ ( 24,827,184 ) $ ( 277,127,226 ) $ 34,276,036 $ ( 296,340,002 )

Net (loss) income per Common Stock - basic $ ( 0.55 ) $ ( 7.15 ) $ 0.77 $ ( 7.64 )

Net (loss) income per Common Stock - diluted $ ( 0.55 ) $ ( 7.15 ) $ 0.44 $ ( 7.64 )

Weighted average Common Stock outstanding – basic 45,388,892 38,770,646 44,443,930 38,770,646

Weighted average Common Stock outstanding – diluted 45,388,892 38,770,646 77,199,129 38,770,646

Includes related party revenues of $ 321,244 for the three months ended March 31, 2023.

Includes related party interest of approximately $ 284,000 for the 2022 taxable industrial revenue bond for the three months ended March 31, 2023.

1 Includes related party revenues of $ 112,210 and $ 433,454 for the three and six months ended June 30, 2023, respectively.

2 Includes related party interest for the 2022 taxable industrial revenue bond of approximately $ 279,000 and $ 563,000 for the three and six months ended June 30, 2023, respectively.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

2023 2022 2023 2022

Net loss $ ( 19,021,602 ) $ ( 4,562,875 ) $ ( 63,706,540 ) $ ( 19,435,884 )

Other comprehensive (loss) income, net of tax

Foreign currency translation adjustment 214 24 406 ( 263 )

Unrealized (loss) gain on derivative instruments

Unrealized gain on investments in marketable securities

Unrealized gain (loss) on derivative instruments 203,467 309,654 ( 68,334 ) 984,035

Unrealized (loss) gain on investments in marketable securities ( 28,301 ) — 290,344 —

Reclassification of realized gains on investments in marketable securities to earnings ( 208,190 ) — ( 381,342 ) —

4 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STOCKHOLDERS’ DEFICIT

For the Six Months Ended June 30, 2022

(All Amounts in U.S.

1 unchanged sentence

Legacy Bridger Series A Preferred

Legacy Bridger

Shares Legacy Bridger

Series B Preferred

Legacy Bridger

Shares Legacy Bridger

Series C Preferred

Shares / Series A

Preferred Stock

Stockholders’

Preferred Stock Common Stock Additional

Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Stockholders' Deficit

Share Value Share Value Share Value Share Value

Balance at December 31, 2021 10,500,000 $ 1,050 60,000,000 $ 6,000 — $ — 39,081,744 $ 3,908 $ — $ ( 84,843,803 ) $ 24,706 $ ( 84,815,189 )

Liquidation preference on

Legacy Bridger

A Preferred Shares

Liquidation preference on Legacy Bridger Series A Preferred Shares — — — — — — — — — ( 4,339,767 ) — ( 4,339,767 )

Unrealized gain on derivative instruments — — — — — — — — — — 674,381 674,381

Foreign currency translation adjustment — — — — — — — — — — ( 287 ) ( 287 )

attributable to

Bridger holders prior to

recapitalization

Stock based compensation attributable to Legacy Bridger holders prior to reverse recapitalization — — — — — — — — — 2,558 — 2,558

Net loss — — — — — — — — — ( 14,873,009 ) — ( 14,873,009 )

Balance at March 31, 2022 10,500,000 $ 1,050 60,000,000 $ 6,000 — $ — 39,081,744 $ 3,908 $ — $ ( 104,054,021 ) $ 698,800 $ ( 103,351,313 )

( 104,054,021

( 103,351,313

Legacy Bridger Series A Preferred Shares adjustment for redemption, extinguishment and revaluation — — — — — — — — — ( 81,323,569 ) — ( 81,323,569 )

Legacy Bridger Series C Preferred Shares adjustment to maximum redemption value — — — — — — — — — ( 191,240,782 ) — ( 191,240,782 )

Unrealized gain on derivative instruments — — — — — — — — — — 309,654 309,654

Foreign currency translation adjustment — — — — — — — — — — 24 24

Stock based compensation attributable to Legacy Bridger holders prior to reverse recapitalization — — — — — — — — — 2,222 — 2,222

Net loss — — — — — — — — — ( 4,562,875 ) — ( 4,562,875 )

Balance at June 30, 2022 10,500,000 $ 1,050 60,000,000 $ 6,000 — $ — 39,081,744 $ 3,908 $ — $ ( 381,179,025 ) $ 1,008,478 $ ( 380,166,639 )

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STOCKHOLDERS’ DEFICIT

For the Six Months Ended June 30, 2023

(All Amounts in U.S.

dollars, except share amounts)

Legacy Bridger Series A Preferred

Shares Legacy Bridger

Series B Preferred

Shares Legacy Bridger

Series C Preferred

Shares / Series A

Preferred Stock Common Stock Additional

Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Stockholders' Deficit

Share Value Share Value Share Value Share Value

Balance at December 31, 2022 — $ — — $ — 315,789 $ 489,021,545 39,081,744 $ 3,908 $ — $ ( 415,304,343 ) $ 1,678,497 $ ( 413,621,938 )

( 415,304,343

( 413,621,938

Unrealized loss on derivative instruments — — — — — — — — — — ( 271,801 ) ( 271,801 )

Unrealized gain on investment in marketable

Reclassification of realized gains on

investments in marketable securities to

Unrealized gain on investment in marketable securities — — — — — — — — — — 318,645 318,645

Reclassification of realized gains on investments in marketable securities to earnings — — — — — — — — — — ( 173,152 ) ( 173,152 )

Foreign currency translation adjustment — — — — — — — — — — 192 192

Net loss — — — — — — — — — ( 44,684,938 ) — ( 44,684,938 )

Effect of the Closing — — — — — ( 156,362,597 ) 4,687,546 684 52,084,522 78,956,576 — 131,041,782

( 156,362,597

Series A Preferred Stock adjustment to

maximum redemption

compensation after

recapitalization

Series A Preferred Stock adjustment to maximum redemption value — — — — — 4,274,439 — — ( 4,274,439 ) — — ( 4,274,439 )

Stock based compensation after reverse recapitalization — — — — — — 2,400,354 240 25,596,776 — — 25,597,016

Balance at March 31, 2023 — $ — — $ — 315,789 $ 336,933,387 46,169,644 $ 4,832 $ 73,406,859 $ ( 381,032,705 ) $ 1,552,381 $ ( 306,068,633 )

( 381,032,705

( 306,068,633

Unrealized gain on derivative instruments — — — — — — — — — — 203,467 203,467

Unrealized loss on investment in marketable securities — — — — — — — — — — ( 28,301 ) ( 28,301 )

Reclassification of realized gains on investments in marketable securities to earnings — — — — — — — — — — ( 208,190 ) ( 208,190 )

Foreign currency translation adjustment — — — — — — — — — — 214 214

Net loss — — — — — — — — — ( 19,021,602 ) — ( 19,021,602 )

Series A Preferred Stock adjustment to maximum redemption value — — — — — 5,805,582 — — ( 5,805,582 ) — — ( 5,805,582 )

Bonuses paid in Class A Common Stock — — — — — — 736,554 74 4,927,546 — 4,927,620

Stock based compensation after reverse recapitalization — — — — — — — — 6,448,568 — — 6,448,568

Balance at June 30, 2023 — $ — — $ — 315,789 $ 342,738,969 46,906,198 $ 4,906 $ 78,977,391 $ ( 400,054,307 ) $ 1,519,571 $ ( 319,552,439 )

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(All Amounts in U.S.

For the three months ended March 31,

For the Six Months Ended June 30,

Cash Flows from Operating Activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities

(Gain) loss on sale of fixed assets

Net loss $ ( 63,706,540 ) $ ( 19,435,884 )

Adjustments to reconcile net loss to net cash used in operating activities

Loss on sale/disposal of fixed assets 392,472 781,492

Depreciation and amortization 4,986,192 4,094,854

Impairment of long-lived assets 626,848 —

Stock based compensation expense 32,045,584 4,780

4 unchanged sentences

Change in fair value of Legacy Bridger Series C Preferred Shares — 945,455

Change in fair value of Series A Preferred Stock ( 224,080 ) —

Realized gain on investments in marketable securities ( 407,761 ) —

1 unchanged sentence

Accounts receivable 1

( 11,786,830 ) ( 4,611,847 )

Aircraft support parts 1,326,376 170,475

9 unchanged sentences

Cash Flows from Financing Activities:

Payment to Legacy Bridger Series A Preferred Shares members — ( 100,000,000 )

Payment to Legacy Bridger Series B Preferred Shares members — ( 69,999,223 )

Borrowing from Legacy Bridger Series C Preferred shares members, net of issuance costs — 293,684,675

Payment of finance lease liability ( 15,615 ) —

2 unchanged sentences

Borrowings from various First Interstate Bank vehicle loans — 202,217

Payment of debt issuance costs — ( 3,000 )

Repayments on debt ( 880,613 ) ( 962,904 )

Net cash used in financing activities

Net cash (used in) provided by financing activities ( 4,496,266 ) 122,921,765

Effects of exchange rate changes 406 ( 263 )

8 unchanged sentences

Recognition of Deferred underwriting fee $ 1,500,000 $ —

Recognition of new right-of-use asset and corresponding operating lease liability $ 1,092,519 $ —

Bonuses paid in Class A Common Stock $ 4,927,620 $ —

Deferred offering costs included in accrued expenses and other current liabilities $ 388,120 $ 1,455,840

Issuance costs on Legacy Bridger Series C Preferred Shares $ — $ 5,000,000

Supplemental cash flow information

Interest paid 2

$ 11,489,494 $ 3,715,257

Fixed assets in accounts payable $ 1,841,142 $ 2,640,384

4 unchanged sentences

Legacy Bridger Series A Preferred Shares – adjustment for redemption, extinguishment and accrued interest $ — $ 85,663,336

Includes related party accounts receivable of $ 321,244

for the three months ended March 31, 2023.

Includes related party interest paid of approximately $

575,000 for the 2022 taxable industrial revenue bond for the three months ended March 31, 2023.

Legacy Bridger Series C Preferred Shares - adjustment for maximum redemption value $ — $ 191,240,782

1 Includes related party accounts receivable of $ 427,454 for the six months ended June 30, 2023.

2 Includes related party interest paid of approximately $ 575,000 for the 2022 taxable industrial revenue bond for the six months ended June 30, 2023.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7 unchanged sentences

and its subsidiaries (“Bridger”, “the Company,” “we,” “us” or “our”) provide aerial wildfire management, relief and suppression and delivery of firefighting services using next generation technology and sustainable and environmentally safe firefighting methods.

As of March 31, 2023, the Company owns

aircraft, including 5 Twin Commander surveillance platforms, 4 Quest Kodiaks, 6 Viking CL415EAFs, 2 Aurora eVOTL Skiron and 1 Pilatus PC-12.

As of June 30, 2023, the Company owns 17 aircraft, including 4 Twin Commander surveillance platforms, 4 Quest Kodiaks, 6 Viking CL415EAFs, 2 Aurora eVOTL Skirons, and 1 Pilatus PC-12.

Basis of Presentation

3 unchanged sentences

Reverse Recapitalization

On January 24, 2023, (the “Closing Date”), Jack Creek Investment Corp (“JCIC”) completed the reverse recapitalization (the “Closing” and the

“Reverse Recapitalization”) with the Company’s predecessor, Bridger Aerospace Group Holdings, LLC and its subsidiaries (collectively, “Legacy Bridger”), which operated the majority of the historical business and was identified as the acquirer and predecessor upon the consummation of the transactions contemplated by the agreement and plan of merger (the “Transaction Agreements”) entered into on August 3, 2022.

On January 24, 2023, (the “Closing Date”), Jack Creek Investment Corp (“JCIC”) completed the reverse recapitalization (the “Closing” and the “Reverse Recapitalization”) with the Company’s predecessor, Bridger Aerospace Group Holdings, LLC and its subsidiaries (collectively, “Legacy Bridger”), which operated the majority of the historical business and was identified as the acquirer and predecessor upon the consummation of the transactions contemplated by the agreement and plan of merger (the “Transaction Agreements”) entered into on August 3, 2022.

On the Closing Date, pursuant to the Transaction Agreements, JCIC and Legacy Bridger became wholly owned subsidiaries of a new public entity that was renamed Bridger Aerospace Group Holdings, Inc, and JCIC shareholders and Legacy Bridger equity holders converted their equity ownership in JCIC and Legacy Bridger, respectively, into equity ownership in Bridger.

Upon the consummation of the Reverse Recapitalization, Bridger issued Common Stock to the Legacy Bridger equity holders and Series A Preferred Stock (as defined below) as summarized below:

the surrender and exchange of all 606,061 Legacy Bridger incentive units (“Incentive Units”) into

583,308 shares of Bridger’s common stock, par value $ 0.0001 , (“Common Stock”) at a deemed value of

$ 10.00 per share as adjusted by the per share C

tock consideration of approximately 0.96246 (the “Exchange Ratio”), rounded down to the nearest share for each holder;

the direct or indirect surrender and exchange of the remaining 40,000,000 issued and outstanding shares of Legacy Bridger common shares (excluding Incentive Units) into 38,498,436 shares of C

tock at a deemed value of $ 10.00 per share as adjusted by the Exchange Ratio, rounded down to the nearest share for each holder;

the surrender and exchange of all 315,789.473684 issued and outstanding Series C preferred shares of Legacy Bridger (the “Legacy Bridger Series C Preferred Shares”), which were surrendered and exchanged on a one-to-one basis in connection with the Reverse Recapitalization into

315,789.473684 shares of preferred stock of Bridger that have the rights, powers, designations, preferences, and qualifications, limitations and restrictions set forth in Section 4.5 of the Amended and Restated Certificate of Incorporation (the “Series A Preferred Stock”).

• the surrender and exchange of all 606,061 Legacy Bridger incentive units (“Incentive Units”) into 583,308 shares of Bridger’s common stock, par value $ 0.0001 , (“Common Stock”) at a deemed value of $ 10.00 per share as adjusted by the per share Common Stock consideration of approximately 0.96246 (the “Exchange Ratio”), rounded down to the nearest share for each holder;

• the direct or indirect surrender and exchange of the remaining 40,000,000 issued and outstanding shares of Legacy Bridger common shares (excluding Incentive Units) into 38,498,436 shares of Common Stock at a deemed value of $ 10.00 per share as adjusted by the Exchange Ratio, rounded down to the nearest share for each holder;

• the surrender and exchange of all 315,789.473684 issued and outstanding Series C preferred shares of Legacy Bridger (the “Legacy Bridger Series C Preferred Shares”), which were surrendered and exchanged on a one -to-one basis in connection with the Reverse Recapitalization into 315,789.473684 shares of preferred stock of Bridger that have the rights, powers, designations, preferences, and qualifications, limitations and restrictions set forth in Section 4.5 of the Amended and Restated Certificate of Incorporation (the “Series A Preferred Stock”).

The Series A Preferred Stock are convertible at the election of the holders into shares of Common Stock, without the payment of additional consideration by the holders into such number of shares of Common Stock as determined by dividing the original issue price, plus accrued interest by a conversion price equal to $ 11 at the time of conversion.

1 unchanged sentence

• the filing and effectiveness of the Amended and Restated Certificate of Incorporation of Bridger and the effectiveness of the Amended and Restated Bylaws of Bridger, each of which occurred immediately prior to the Closing;

the adoption and assumption of the 2023 Omnibus Incentive Plan and any grants or awards issued thereunder and adoption of the 2023 Employee Stock Purchase Plan upon the Closing to grant equity awards to Bridger employees;

during the period from the Closing until five years following the Closing, JCIC subjected

20 % of JCIC’s issued and outstanding common stock (“Sponsor Earnout Shares”), comprised of two separate tranches of 50 % of the Sponsor Earnout Shares per tranche, to potential forfeiture to Bridger for no consideration until the occurrence (or deemed occurrence) of certain triggering events.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

• the adoption and assumption of the 2023 Omnibus Incentive Plan and any grants or awards issued thereunder and adoption of the 2023 Employee Stock Purchase Plan upon the Closing to grant equity awards to Bridger employees;

• during the period from the Closing until five years following the Closing, JCIC subjected 20 % of JCIC’s issued and outstanding common stock (“Sponsor Earnout Shares”), comprised of two separate tranches of 50 % of the Sponsor Earnout Shares per tranche, to potential forfeiture to Bridger for no consideration until the occurrence (or deemed occurrence) of certain triggering events.

Immediately after giving effect to the Transaction Agreements, the following were outstanding:

1 unchanged sentence

• 315,789.473684 shares of Bridger Series A Preferred Stock;

9,400,000 private placement warrants (“Private Placement Warrants”) to purchase shares of Common Stock at an exercise price of

$ 11.50 per share ;

public warrants (“Public Warrants”) to purchase shares of Common Stock at an exercise price of $

• 9,400,000 private placement warrants (“Private Placement Warrants”) to purchase shares of Common Stock at an exercise price of $ 11.50 per share;

• 17,250,000 public warrants (“Public Warrants”) to purchase shares of Common Stock at an exercise price of $ 11.50 per share;

• 6,581,497 restricted stock units issued to the executives and senior management of the Company.

In connection with the Reverse Recapitalization, the Company paid transaction costs of $

10,302 thousand as of the Closing.

In connection with the Reverse Recapitalization, the Company paid transaction costs of $ 10,302 thousand as of the Closing.

The transactions contemplated by the Transaction Agreements were accounted for as a reverse recapitalization in accordance with GAAP.

6 unchanged sentences

• Bridger’s board of directors (the “Board”) has nine (9) members, and representatives or designees of the Legacy Bridger equity holders comprise the majority of the members of the Board;

Legacy Bridger’s senior management comprise the senior management roles and be responsible for the day-to-day

operations of Bridger;

• Legacy Bridger’s senior management comprise the senior management roles and are responsible for the day-to-day operations of Bridger;

• Bridger assumed Legacy Bridger’s name of business;

4 unchanged sentences

As such, the shares and corresponding capital amounts and earnings per share related to Legacy Bridger’s common stock prior to the Reverse Recapitalization have been retroactively recasted as shares of Common Stock using the Exchange Ratio.

On January 25, 2023, shares of the Company’s Common Stock began trading on the Nasdaq Global Market under the ticker symbol “BAER.”

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

The Company had $ 2,290 thousand and $ 30,162 thousand of cash and cash equivalents as of March 31, 2023 and December 31, 2022, respectively.

The Company had $ 30,323 thousand and $ 54,980 thousand of investments in debt securities classified as available-for-sale

with short-term maturities of less than one year and carried at fair value as of March 31, 2023 and December 31, 2022, respectively.

On January 25, 2023, shares of the Company’s Common Stock began trading on the Nasdaq Global Market under the ticker symbol “BAER.”

The Company had $ 845 thousand and $ 30,162 thousand of cash and cash equivalents as of June 30, 2023 and December 31, 2022, respectively.

The Company had $ 12,573 thousand and $ 54,980 thousand of investments in debt securities classified as available-for-sale with short-term maturities of less than one year and carried at fair value as of June 30, 2023 and December 31, 2022, respectively.

The Company has entered into various term loan agreements and other long-term debt to fund the purchase of aircraft, finance the construction of aircraft hangars and to supplement its cash balance.

As of March 31, 2023, the Company has $ 2,446 thousand of current portion of long-term debt, net of debt issuance costs.

As of March 31, 2023, future contractual payments related to the construction of the third hangar are $ 2,467 thousand for the next twelve months.

As of June 30, 2023, the Company has $ 2,460 thousand of current portion of long-term debt, net of debt issuance costs.

As of June 30, 2023, future contractual payments related to the construction of the third hangar are $ 759 thousand for the next twelve months.

The Company believes it will be sufficiently funded for its short-term liquidity needs and the execution of its business plan for at least 12 months following the date at which the unaudited condensed consolidated financial statements were filed.

As of April 30, 2023, the Company has cash and cash equivalents of

$ 3,721 thousand, restricted cash of

$ 12,437 thousand and investments in debt securities classified as available-for-sale of

As of July 31, 2023, the Company has cash and cash equivalents of $ 2,562 thousand, restricted cash of $ 12,281 thousand and investments in debt securities classified as available-for-sale of $ 10,189 thousand.

Note 2 - Summary of Significant Accounting Policies

3 unchanged sentences

Variable Interest Entities

The Company follows ASC 810-10-15

guidance with respect to accounting for variable interest entities (“VIE”).

The Company follows ASC 810-10-15 guidance with respect to accounting for variable interest entities (“VIE”).

These entities do not have sufficient equity at risk to finance their activities without additional subordinated financial support from other parties or whose equity investors lack any of the characteristics of a controlling financial interest.

6 unchanged sentences

Northern Fire Management Services, LLC (“NFMS, LLC”) is considered to be a VIE, as it lacks sufficient equity and is consolidated in the Company’s financial statements.

For the three months ended March 31, 2022, Mountain Air, LLC (“MA, LLC”) is considered to be a VIE, as it lacks sufficient equity and is consolidated in the Company’s financial statements.

For the three months ended March 31, 2023 and 2022 and the year ended December 31, 2022, NFMS, LLC held immaterial assets and liabilities in its financial statements.

For the three months ended March 31, 2022, MA, LLC held immaterial assets and liabilities in its financial statements.

For the three months ended March 31, 2023 and 2022 and the year ended December 31, 2022, the following entities were considered to be VIEs but were not consolidated in the unaudited condensed consolidated financial statements due to the lack of the power criterion or the losses/benefits criterion:

Canada (“Côte-Nord”)

and Ensyn BioEnergy Canada, Inc (“EBC”).

For the three and six months ended June 30, 2022, Mountain Air, LLC (“MA, LLC”) was considered to be a VIE, as it lacked sufficient equity and is consolidated in the Company’s financial statements.

For the three and six months ended June 30, 2023 and 2022 and the year ended December 31, 2022, NFMS, LLC held immaterial assets and liabilities in its financial statements.

For the three and six months ended June 30, 2022, MA, LLC held immaterial assets and liabilities in its financial statements.

For the three and six months ended June 30, 2023 and 2022 and the year ended December 31, 2022, the following entities were considered to be VIEs but were not consolidated in the unaudited condensed consolidated financial statements due to the lack of the power criterion or the losses/benefits criterion:

AE Côte-Nord Canada (“Côte-Nord”) and Ensyn BioEnergy Canada, Inc.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Northern Fire Management Services, LLC:

1 unchanged sentence

A master services agreement exists between NFMS, LLC, the Company, and Bridger Air Tanker, LLC, a wholly owned subsidiary of the Company, to transfer all annual expenses incurred to the Company in exchange for the Canadian employees to support the Company’s water scooper aircraft.

50 % owned by a Canadian citizen, and

owned by Bridger Aerospace Group, LLC (“BAG, LLC”).

NFMS, LLC is 50 % owned by a Canadian citizen, and 50 % owned by Bridger Aerospace Group, LLC.

The Company is responsible for the decisions related to all of NFMS, LLC’s expenditures, which solely relates to payroll.

2 unchanged sentences

All intercompany expenses associated with NFMS, LLC and its service agreement have been eliminated in consolidation.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Mountain Air, LLC:

As of November 7, 2022, MA, LLC was

a wholly-owned subsidiary of Bridger.

Prior to MA, LLC becoming a wholly-owned subsidiary of the Company, MA, LLC was owned 50 %

by Timothy Sheehy, the Chief Executive Officer and a director of Bridger, and

by an entity affiliated with Matthew Sheehy, a director of Bridger.

MA, LLC is a Federal Aviation Administration (“FAA”) part 135 certificate holder and is

designed to hold aerial firefighting contracts.

Bridger Aviation Services, LLC (“Bridger Aviation”), a wholly-owned subsidiary of Bridger, was a party

to a certain Management Services Agreement

(the “Aviation Agreement”), dated April 13, 2018, with MA, LLC.

As of November 7, 2022, MA, LLC was a wholly-owned subsidiary of Bridger.

Prior to MA, LLC becoming a wholly-owned subsidiary of the Company, MA, LLC was owned 50 % by Timothy Sheehy, the Chief Executive Officer and a director of Bridger, and 50 % by an entity affiliated with Matthew Sheehy, a director of Bridger.

MA, LLC is a Federal Aviation Administration (“FAA”) part 135 certificate holder and is designed to hold aerial firefighting contracts.

Bridger Aviation Services, LLC (“Bridger Aviation”), a wholly-owned subsidiary of Bridger, was a party to a certain Management Services Agreement (the “Aviation Agreement”), dated April 13, 2018, with MA, LLC.

Pursuant to the Aviation Agreement, Bridger Aviation leased certain aircraft to MA, LLC.

MA, LLC operated the aircraft and paid Bridger Aviation a fee equal to

99 % of all revenue it received from the use and deployment of Bridger Aviation’s aircraft.

MA, LLC operated the aircraft and paid Bridger Aviation a fee equal to 99 % of all revenue it received from the use and deployment of Bridger Aviation’s aircraft.

MA, LLC was obligated to operate and maintain the aircraft in accordance with applicable FAA standards.

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Certain amounts from prior periods have been reclassified to conform to the current period presentation.

The Company previously separately presented General and administrative and Business development operating expenses, which are now presented combined within “Selling, general and administrative expense” on the Unaudited Condensed Consolidated Statement of Operations.

The reclassification had no impact on previously reported Net loss or Accumulated deficit.

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Deferred Offering Costs

Deferred offering costs primarily consist of capitalized legal, accounting and other third-party costs incurred that are directly related to the

Reverse Recapitalization

accounted for as a reverse recapitalization.

These costs were charged to Stockholders’ deficit as a reduction of Additional paid-in capital generated upon the completion of the

Reverse Recapitalization

As of March 31, 2023, the Company charged $

9,778 thousand to Stockholders’ deficit.

As of December 31, 2022 ,

the Company recorded $ 5,800 thousand of deferred offering costs in the Unaudited Condensed Consolidated Balance Sheets.

Deferred offering costs primarily consist of capitalized legal, accounting and other third-party costs incurred that are directly related to the Reverse Recapitalization, which has been accounted for as a reverse recapitalization.

These costs were charged to Stockholders’ deficit as a reduction of Additional paid-in capital generated upon the completion of the Reverse Recapitalization.

As of June 30, 2023, the Company charged $ 17,961 thousand to Stockholders’ deficit.

As of June 30, 2023 and December 31, 2022, the Company recorded $ 388 thousand and $ 5,800 thousand of deferred offering costs in the Unaudited Condensed Consolidated Balance Sheets, respectively.

Revenue Recognition

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Contracts are based on either a Call-When-Needed (“CWN”) or Exclusive Use (“EU”) basis.

Rates established are generally more competitive based on the security of the revenue from the contract (i.e., an EU versus only on an as-needed

basis in CWN).

Rates established are generally more competitive based on the security of the revenue from the contract (i.e., an EU versus only on an as-needed basis in CWN).

These rates are delineated by the type of service, generally flight time or time available for deployment.

Once an aircraft is deployed on a contract the fees are earned at these rates and cannot be obligated to another customer.

Contracts have no financing components and consideration is at pre-determined

Once an aircraft is deployed on a contract the fees are earned at these rates, the aircraft cannot be obligated to another customer.

Contracts have no financing components and consideration is at pre-determined rates.

No variable considerations are constrained within the contracts.

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On at least a monthly basis, the services performed and rates are validated by each customer.

Acceptance by the customer is evidenced by the provision of their funded task order or accepted invoice.

The Company has no t incurred incremental costs for obtaining contracts with customers.

Acceptance by the customer is evidenced by their funded task order or accepted invoice.

The Company has not incurred incremental costs for obtaining contracts with customers.

In addition, the Company evaluates whether or not it should capitalize the costs of fulfilling a contract.

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and (3) are expected to be recovered.

The Company has elected to use the practical expedient detailed in ASC 340-40-25-4

to expense any costs to fulfill a contract as they are incurred when the amortization period would be one year or less.

The Company has elected to use the practical expedient detailed in ASC 340-40-25-4 to expense any costs to fulfill a contract as they are incurred when the amortization period would be one year or less.

Contract assets are classified as a receivable when the reporting entity’s right to consideration is unconditional, which is when payment is due only upon the passage of time.

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As permitted under the practical expedient available under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, and (ii) contracts for which the Company recognizes revenue at the amount which it has the right to invoice for services performed.

Other revenue consists of leasing revenues for facilities as well as external repair work performed on customer aircraft.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

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dollars, except as stated)

Other revenue consists of leasing revenues for facilities as well as external repair work performed on customer aircraft.

Revenue Disaggregation

The following shows the disaggregation of revenue by service for the three months ended March 31, 2023 and March 31 2022.

The following shows the disaggregation of revenue by service for the three and six months ended June 30, 2023 and June 30, 2022.

For the Three Months Ended

June 30, For the Six Months Ended

2023 2022 2023 2022

Fire suppression $ 10,449,427 $ 11,682,263 $ 10,449,427 $ 11,682,263

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Total revenues $ 11,615,280 $ 12,753,671 $ 11,980,653 $ 12,822,963

The following shows the disaggregation of revenue by type for the three months ended March 31, 2023 and March 31, 2022.

The following shows the disaggregation of revenue by type for the three and six months ended June 30, 2023 and June 30, 2022.

For the Three Months Ended

June 30, For the Six Months Ended

2023 2022 2023 2022

Flight revenue $ 5,794,315 $ 6,417,520 $ 5,794,315 $ 6,417,520

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Concentration Risk

For the three months ended March 31, 2023, the Company had one customer who individually accounted for 65 % of total revenues.

As of March 31, 2023, one customer accounted for 83 % of accounts

Refer to “ Note 16 – Related Party Transactions

additional information.

For the three months ended March 31, 2022, the Company had one customer who individually accounted for 100 % of total revenues.

For the three months ended June 30, 2023, the Company had three customers who individually accounted for 41 %, 30 %, and 27 % of total revenues, respectively.

For the three months ended June 30, 2022, the Company had one customer who individually accounted for 99 % of total revenues.

For the six months ended June 30, 2023, the Company had three customers who individually accounted for 39 %, 30 %, and 26 % of total revenues, respectively.

For the six months ended June 30, 2022, the Company had one customer who individually accounted for 98 % of total revenues.

As of June 30, 2023, three customers accounted for 37 %, 29 %, and 27 % of accounts receivable, respectively.

As of December 31, 2022, one customer accounted for 62 % of accounts receivable.

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The changes in fair values of derivatives that have been designated and qualify as cash flow hedges are recorded in accumulated other comprehensive income and are reclassified into the line item on the Unaudited Condensed Consolidated Statements of Comprehensive Loss in which the hedged items are recorded in the same period the hedged items affect earnings.

The changes in fair values of freestanding derivatives with no hedging designation are recorded in earnings through interest expense on the Unaudited Condensed Consolidated Statement of Operations.

The changes in fair values of freestanding derivatives with no hedging designation are recorded in earnings through interest expense on the Unaudited Condensed Consolidated Statements of Operations.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

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The fair value is based on prevailing market data and using standard valuation models based on reasonable estimates about future relevant market conditions.

Refer to “Note 12 – Long-Term Debt.”

The notional amounts of the derivative financial instruments do not necessarily represent amounts exchanged by the parties and, therefore, are not a direct measure of the Company’s exposure to the financial risks described above.

Refer to “Note 12 – Long-Term Debt.” The notional amounts of the derivative financial instruments do not necessarily represent amounts exchanged by the parties and, therefore, are not a direct measure of the Company’s exposure to the financial risks described above.

Warrant Liabilities

and ASC 815-40,

Derivatives and Hedging—Contracts in Entity’s Own Equity

, under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities.

The Company accounts for the Public Warrants and Private Placement Warrants (collectively, the “Warrants”) issued in connection with the Reverse Recapitalization in accordance with the guidance contained in accordance with ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity , under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities.

Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjusts the Warrants to fair value at each reporting period.

The warrant liabilities are subject to remeasurement at each balance sheet date until exercised, and any change in fair value is recorded in earnings through Selling, general and administrative expense on the Unaudited Condensed Consolidated Statement of Operations.

For periods prior to the Reverse Recapitalization, Legacy Bridger was a partnership for federal income tax purposes.

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Legacy Bridger’s net income or loss was allocated among the members in accordance with Legacy Bridger’s operating agreement.

Subsequent to the Reverse Recapitalization, the Company became the successor of Legacy Bridger as discussed in “Note 1 – Organization and Basis of Presentation.”

Bridger is subject to U.S.

Subsequent to the Reverse Recapitalization, the Company became the successor of Legacy Bridger as discussed in “Note 1 – Organization and Basis of Presentation.” Bridger is subject to U.S.

federal income taxes, in addition to state and local income taxes, with respect to net taxable income or loss and any related tax credits of the Company.

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dollars, except as stated)

Net Income (Loss) Per Share

Basic net income (loss) per share is based on the weighted average number of shares of Common Stock outstanding during the period.

Diluted net income (loss) per share is based on the weighted average number of shares of Common Stock used for the basic net income (loss) per share calculation, adjusted for the dilutive effect of restricted stock units (“RSUs”), Warrants, and Incentive Units, if any, using the “treasury stock” method, the Series A Preferred Stock that is convertible into shares of Common Stock, and the Sponsor Earnout Shares that will fully vest upon certain stock price metrics being achieved.

In addition, net income (loss) for diluted net income (loss) per share is adjusted for the after-tax

impact of changes to the fair value of the Warrants, to the extent they are dilutive.

Net (Loss) Income Per Share

Basic net (loss) income per share is based on the weighted average number of shares of Common Stock outstanding during the period.

Diluted net (loss) income per share is based on the weighted average number of shares of Common Stock used for the basic net (loss) income per share calculation, adjusted for the dilutive effect of restricted stock units (“RSUs”), Warrants, and Incentive Units, if any, using the “treasury stock” method, the Series A Preferred Stock that is convertible into shares of Common Stock, and the Sponsor Earnout Shares that will fully vest upon certain stock price metrics being achieved.

In addition, net (loss) income for diluted net (loss) income per share is adjusted for the after-tax impact of changes to the fair value of the Warrants, to the extent they are dilutive.

As noted above, the Company accounted for the Closing as a reverse recapitalization.

Net income (loss) per share calculations for all periods prior to the Closing have been retrospectively adjusted by the Exchange Ratio for the equivalent number of shares of Common Stock outstanding immediately after the Closing to effect the reverse recapitalization.

Subsequent to the Closing, net income (loss) per share is calculated based on the weighted average number of shares of Common Stock outstanding.

Net (loss) income per share calculations for all periods prior to the Closing have been retrospectively adjusted by the Exchange Ratio for the equivalent number of shares of Common Stock outstanding immediately after the Closing to effect the reverse recapitalization.

Subsequent to the Closing, net (loss) income per share is calculated based on the weighted average number of shares of Common Stock outstanding.

Collaboration Agreements

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The Company accounts for its stock-based compensation in accordance with provisions of ASC 718, Compensation-Stock Compensation (“ASC 718”) at the grant date fair value.

Legacy Bridger granted select board members and an executive incentive unit awards (“Incentive Units”) which contain service and performance vesting conditions.

Compensation cost for Incentive Units is measured at their grant-date fair value and is equal to the value of the Legacy Bridger’s Class D Common shares, which is estimated using an option pricing model.

Legacy Bridger granted Incentive Units which contain service and performance vesting conditions to select board members and an executive officer.

Compensation cost for Incentive Units is measured at their grant-date fair value and is equal to the value of the Legacy Bridger’s Class D Common shares, which was estimated using an option pricing model.

Compensation cost for service-based units is recognized over the requisite service period on a straight-line basis.

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In connection with the Closing, the Company along with the Board established and approved and assumed the Bridger Aerospace Group Holdings, Inc.

2023 Omnibus Incentive Plan (the “Plan”) which allowed the Company to grant RSUs to certain executives and senior management (the “Participants”) of the Company.

2023 Omnibus Incentive Plan (the “Plan”) which allowed the Company to grant RSUs to Bridger employees (the “Participants”).

Upon satisfying the vesting conditions, each RSU provides the Participants the right to receive one share of Common Stock.

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Advertising Expense

Advertising costs are expensed as incurred and are included in Selling, general and administrative expense on the Unaudited Condensed Consolidated Statement of Operations.

Advertising expense for the three months ended March 31, 2023 and 2022 was $ 24 thousand and $ 51 thousand, respectively.

Advertising costs are expensed as incurred and are included in Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations.

Advertising expense for the three and six months ended June 30, 2023 was approximately $ 28 thousand and $ 52 thousand, respectively, and for the three and six months ended June 30, 2022 was approximately $ 316 thousand and $ 367 thousand, respectively.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

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Recently Issued Accounting Pronouncements

In March 2020, the FASB issued ASU No.

In June 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848):

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The optional guidance is provided to ease the potential burden of accounting for reference rate reform.

The guidance is effective and could be adopted no later than December 31, 2022.

In December 2022, the FASB issued ASU No.

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Note 3 – Cash Equivalents and Investments in Marketable Securities

The investments in marketable securities are classified as available-for-sale

debt securities with short-term maturities of less than one year.

The fair values, gross unrealized gains and losses of the available-for-sale

securities by type are as follows:

As of March 31,

As of December 31,

The investments in marketable securities are classified as available-for-sale debt securities with short-term maturities of less than one year.

The fair values, gross unrealized gains and losses of the available-for-sale securities by type are as follows:

June 30, 2023 As of

December 31, 2022

Carrying Value

5 unchanged sentences

Money market fund $ 9,211,360 $ 9,284,362

As of March 31, 2023

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

As of June 30, 2023

Price Unrealized

Gains Unrealized

Losses Fair Value

Investment in marketable securities

3 unchanged sentences

Total marketable securities $ 12,391,398 $ 181,839 $ ( 287 ) $ 12,572,950

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

As of December 31, 2022

Price Unrealized

Gains Unrealized

Losses Fair Value

Investment in marketable securities

3 unchanged sentences

Total marketable securities $ 54,707,605 $ 281,342 $ ( 8,791 ) $ 54,980,156

The net unrealized gain included in total other comprehensive (loss) income for the three months

ended March 31, 2023 is $ 319 thousand.

The Company did not have investments in marketable securities during the three months ended March 31, 2022.

The proceeds from sales of available-for-sale

securities and gross realized gains included in earnings from sales of available-for-sale

securities for the three months ended March 31, 2023 are $ 25,062 thousand and $ 259 thousand, respectively.

The Company determines gains and losses using the first-in

For the three months ended March 31, 2023, $ 173 thousand has been reclassified out of accumulated other comprehensive income.

There have been no impairments measured for the three months ended March 31, 2023 and March 31, 2022, respectively.

The net unrealized (loss) gain included in total other comprehensive loss for the three and six months ended June 30, 2023 is $( 28 ) thousand and $ 290 thousand, respectively.

The Company did not have investments in marketable securities during the three and six months ended June 30, 2022.

The proceeds from sales of available-for-sale securities and gross realized gains included in earnings from sales of available-for-sale securities for the six months ended June 30, 2023 are $ 42,724 thousand and $ 408 thousand, respectively.

The Company determines gains and losses using the first-in first-out method.

For the three and six months ended June 30, 2023, $ 208 thousand and $ 381 thousand has been reclassified out of accumulated other comprehensive income, respectively.

There have been no impairments measured for the three and six months ended June 30, 2023 and June 30, 2022, respectively.

Note 4 – Aircraft Support Parts

Aircraft support parts consist of the following:

As of March 31,

As of June 30,

2023 As of December 31,

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Prepaid expenses and other current assets consist of the following:

As of March 31,

As of June 30,

2023 As of December 31,

3 unchanged sentences

Total prepaid expenses and other current assets $ 2,892,240 $ 1,835,032

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Note 6 – Property, Plant and Equipment, Net

Property, plant and equipment, net consist of the following:

As of March 31,

As of June 30,

2023 As of December 31,

Aircraft $ 188,179,561 $ 160,113,061

Accumulated depreciation ( 20,344,539 ) ( 16,783,360 )

1 unchanged sentence

Construction-in-progress—Aircraft — 16,992,010

Buildings 16,536,319 16,519,231

Vehicles and equipment 2,895,113 2,810,560

Construction-in-progress

Construction-in-progress - Buildings 17,047,327 13,780,316

Finance lease right-of-use asset 130,378 130,378

Licenses 234,682 234,682

Accumulated depreciation ( 2,628,452 ) ( 1,705,465 )

1 unchanged sentence

Total property, plant and equipment, net $ 202,050,389 $ 192,091,413

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

the three months ended March 31, 2023, the Company recorded $ 1,005 thousand and $ 719 thousand of depreciation expense in Cost of revenu es

and Selling, general and administrative expense, respectively.

For the three months ended March 31, 2022, the Company recorded $ 1,004 thousand and $ 255 thousand of depreciation expense in Cost of revenues and Selling, general and administrative expense, respectively.

For the three months ended March 31, 2023 and 2022, the Company recorded a gain on sale of assets

of $ 1 thousand

and a loss on disposals of assets related to the obsolescence of an aging aircraft of

thousand, respectively, in Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations.

For the three months ended March 31, 2023 and 2022, capitalized interest to equipment from debt financing was $ 393 thousand and $ 53 thousand, respectively.

For the three and six months ended June 30, 2023, the Company recorded $ 2,980 thousand and $ 3,985 thousand of depreciation expense in Cost of revenues, respectively, and $ 229 thousand and $ 948 thousand of depreciation expense in Selling, general and administrative expense, respectively.

For the three and six months ended June 30, 2022, the Company recorded $ 2,468 thousand and $ 3,472 thousand of depreciation expense in Cost of revenues, respectively, and $ 333 thousand and $ 588 thousand of depreciation expense in Selling, general and administrative expense, respectively.

Aircraft are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.

In 2023, the Company identified indicators of impairment for one of the Twin Commander surveillance platforms.

The Company determined this asset group is not a viable contract operating plane due to a significant adverse change in the physical state of the asset, preventing the asset from acting as a revenue generating asset and anticipating sure cash flow losses.

The Company believes the lack of cash flow and continued maintenance expenditure render the carrying amount of the asset unrecoverable.

For the three and six months ended June 30, 2023, the Company recorded total impairment charges of $ 627 thousand, respectively, in Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations.

For the three and six months ended June 30, 2022, the Company recorded no impairment charges, respectively.

For the three and six months ended June 30, 2023, the Company recorded a net loss on sale/disposal of assets of $ 300 thousand and $ 392 thousand, respectively, in Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations.

For the three and six months ended June 30, 2022, the Company recorded a loss on disposals of assets related to the obsolescence of an aging aircraft of zero and $ 781 thousand, respectively, in Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations.

For the three and six months ended June 30, 2023, capitalized interest to equipment from debt financing was $ 429 thousand and $ 822 thousand, respectively.

For the three and six months ended June 30, 2022, capitalized interest to equipment from debt financing was $ 89 thousand and $ 142 thousand, respectively.

Aircraft that is currently being manufactured is considered construction in process and is not depreciated until the aircraft is placed into service.

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The Company’s goodwill originated from the acquisition of MA, LLC in April 2018.

The carrying amount of goodwill was $ 2,458 thousand as of March 31, 2023 and December 31, 2022, respectively.

There were no impairment charges recorded for goodwill for the three months ended March 31, 2023 and 2022.

The carrying amount of goodwill was $ 2,458 thousand as of June 30, 2023 and December 31, 2022, respectively.

There were no impairment charges recorded for goodwill for the three and six months ended June 30, 2023 and 2022, respectively.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Intangible assets consisted of the following:

As of March 31, 2023

As of June 30, 2023

(Years) Gross

Amount Accumulated

Amortization Net

Licenses 10 $ 67,623 $ ( 50,558 ) $ 17,065

Internal-use software 3 296,675 ( 158,371 ) 138,304

Total intangible assets $ 364,298 $ ( 208,929 ) $ 155,369

As of December 31, 2022

(Years) Gross

Amount Accumulated

Amortization Net

Licenses 10 $ 67,623 $ ( 47,177 ) $ 20,446

Internal-use software 3 296,675 ( 108,925 ) 187,750

Total intangible assets $ 364,298 $ ( 156,102 ) $ 208,196

Amortization expense for intangible assets and other noncurrent assets was $ 26 thousand and $ 8 thousand for the three months ended March 31, 2023 and 2022, respectively.

Amortization expense for intangible assets and other noncurrent assets was approximately $ 27 thousand and $ 53 thousand for the three and six months ended June 30, 2023, respectively, and $ 27 thousand and $ 35 thousand for the three and six months ended June 30, 2022, respectively.

Amortization expense is included in Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Note 8 – Other Noncurrent Assets

Other noncurrent assets consisted of the following:

As of March 31,

As of June 30,

2023 As of December 31,

Investment in Overwatch $ 1,000,000 $ 1,000,000

Operating lease right-of-use

Operating lease right-of-use asset 1,638,130 671,054

Interest rate swap 1,338,801 1,407,135

Prepaid subscriptions 3,574,764 1,246,128

Other assets 31,908 31,908

Total other noncurrent assets $ 7,583,603 $ 4,356,225

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Note 9 – Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following:

As of March 31,

As of June 30,

2023 As of December 31,

Accrued salaries, wages, and bonuses $ 484,340 $ 6,515,774

Finance right-of-use

Finance right-of-use liability 56,012 68,310

Accrued professional fees 87,961 2,291,469

4 unchanged sentences

Freestanding derivative on Legacy Bridger Series C Preferred Shares — 2,186,283

Excess hold fee payable on Series A Preferred Stock

Accrued interest expense and other accrued liabilities 6,414,132 6,614,065

1 unchanged sentence

Current accrued expenses and other current liabilities ( 7,823,154 ) ( 18,669,572 )

Total long-term accrued expenses and other noncurrent

Total long-term accrued expenses and other noncurrent liabilities $ 6,864,516 $ 45,659

On May 24, 2023, the Company issued $ 4.9 million in Class A Common Stock in lieu of bonuses paid for the bonus pool accrued as of December 31, 2022.

The Company’s bonus pool was accrued throughout the year and was based upon 2022 performance milestones.

On August 19, 2022, the Company also granted $ 10.1

million of discretionary cash bonuses to employees and executives in connection with the issuance of the Legacy Bridger Series C Preferred Shares, issuance of the taxable industrial development revenue bond transaction under the CUSIP of Gallatin County for $ 160,000 thousand (“2022 Bonds”) and execution of the Transaction Agreements.

As of March 31, 2023, $

3,087 thousand of the discretionary cash bonuses remained accrued and unpaid.

On August 19, 2022, the Company also granted $ 10.1 million of discretionary cash bonuses to employees and executives in connection with the issuance of the Legacy Bridger Series C Preferred Shares, issuance of the taxable industrial development revenue bond transaction under the CUSIP of Gallatin County for $ 160,000 thousand (“2022 Bonds”) and execution of the Transaction Agreements.

Warrant liabilities

1 unchanged sentence

Public Warrants

The Company issued Public Warrants to purchase 17,250,000

shares of Common Stock at an exercise price of

11.50 per share in exchange for the 17,250,000

JCIC warrants originally issued by JCIC in its initial public offering.

The Company issued Public Warrants to purchase 17,250,000 shares of Common Stock at an exercise price of $ 11.50 per share in exchange for the 17,250,000 JCIC warrants originally issued by JCIC in its initial public offering.

The Warrants may only be exercised for a whole number of shares of Common Stock.

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In no event will the Company be required to net cash settle any Warrant.

The Warrants became exercisable 30 days following the Reverse Recapitalization and will expire January 24, 2028.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

The Warrants became exercisable 30 days following the Reverse Recapitalization and will expire January 24, 2028.

Under certain circumstances, the Company may elect to redeem the Public Warrants at a redemption price of

per Public Warrant at any time during the term of the warrant in which the Common Stock trading price has been at least

18.00 per share for 20 trading days within the 30

period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the Warrant holders.

If the Company elects to redeem the Public Warrants, it must notify the Public Warrant holders in advance, who would then have at least

30 days from the date of notification to exercise their respective warrants.

Under certain circumstances, the Company may elect to redeem the Public Warrants at a redemption price of $ 0.01 per Public Warrant at any time during the term of the warrant in which the Common Stock trading price has been at least $ 18.00 per share for 20 trading days within the 30 trading-day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the Warrant holders.

If the Company elects to redeem the Public Warrants, it must notify the Public Warrant holders in advance, who would then have at least 30 days from the date of notification to exercise their respective warrants.

If the warrant is not exercised within that 30-day period, it will be redeemed pursuant to this provision.

The Company may also elect to redeem the outstanding Warrants at a redemption price of

$ 0.10 per Warrant at any time during the term of the Warrant in which the Common Stock trading price is between

$ 10.00 per share and

$ 18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganization, recapitalizations and the like) for any

20 trading days within the 30 trading-day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the Warrant holders.

The Company may also elect to redeem the outstanding Warrants at a redemption price of $ 0.10 per Warrant at any time during the term of the Warrant in which the Common Stock trading price is between $ 10.00 per share and $ 18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganization, recapitalizations and the like) for any 20 trading days within the 30 trading-day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the Warrant holders.

In such case, the Warrant holders will be able to exercise their Warrants on a cashless basis prior to the redemption for a number of shares of our Common Stock determined based on the redemption date and the fair market value of the Common Stock.

As of March 31, 2023, the Company had 17,250,000 outstanding P

arrants to purchase 17,250,000 shares of Common Stock.

The Public Warrants are liability-classified with a balance of $ 2,760 thousand and a fair value of $ 0.16 per warrant as of March 31, 2023.

As of June 30, 2023, the Company had 17,250,000 outstanding Public Warrants to purchase 17,250,000 shares of Common Stock.

The Public Warrants are liability-classified with a balance of $ 3,450 thousand and a fair value of $ 0.20 per warrant as of June 30, 2023.

Private Placement Warrants

The Company issued Private Placement Warrants to purchase 9,400,000 shares of Common Stock at an exercise price of $

11.50 per share in exchange for the 9,400,000 JCIC w

arrants originally purchased in a private placement by JCIC Sponsor, LLC (“JCIC Sponsor”) contemporaneously with JCIC’s initial public offering.

The Company issued Private Placement Warrants to purchase 9,400,000 shares of Common Stock at an exercise price of $ 11.50 per share in exchange for the 9,400,000 JCIC warrants originally purchased in a private placement by JCIC Sponsor, LLC (“JCIC Sponsor”) contemporaneously with JCIC’s initial public offering.

JCIC Sponsor, or its permitted transferees, has the option to exercise the Private Placement Warrants on a cashless basis.

If the Private Placement Warrants are held by holders other than JCIC Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by the holders on the same basis as the Public Warrants.

As of March 31, 2023, the Company had 9,400,000 outstanding

Private Placement Warrants

to purchase 9,400,000 shares of Common Stock.

The Private Placement Warrants are liability-classified with a balance of $ 1,504 thousand and a fair value of $ 0.16 per warrant as of March 31, 2023.

As of June 30, 2023, the Company had 9,400,000 outstanding Private Placement Warrants to purchase 9,400,000 shares of Common Stock.

The Private Placement Warrants are liability-classified with a balance of $ 1,880 thousand and a fair value of $ 0.20 per warrant as of June 30, 2023.

Note 10 – Interest Rate Swap and Freestanding Derivative

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The Company assesses interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely affect expected future cash flows and by evaluating hedging opportunities.

The Company entered an interest rate swap with Rocky Mountain Bank (“RMB”) on March 12, 2020 to reduce risk related to variable-rate debt from the term loan, which was subject to changes in market rates of interest as discussed in “Note 12

Long-Term Debt.”

The interest rate swap is designated as a cash flow hedge.

The Company records its corresponding derivative asset on a gross basis in Other noncurrent assets at fair value on the Unaudited Condensed Consolidated Balance Sheets.

Each month, the Company makes interest payments to RMB under its loan agreement based on the current applicable one-month

LIBOR rate plus the contractual LIBOR margin then in effect with respect to the term loan, without reflecting the interest rate swap.

Each month, the Company makes interest payments to RMB under its loan agreement based on the current applicable one-month LIBOR rate plus the contractual LIBOR margin then in effect with respect to the term loan, without reflecting the interest rate swap.

At the end of each calendar month, the Company receives or makes payments on the interest rate swap difference, if any, based on the received interest rate set forth in the table below.

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The Company had the following interest rate swap designated as a cash flow hedge:

As of March 31, 2023

As of June 30, 2023

Date Maturity

Date Notional

Amount Fair Value Pay Fixed Receive Rate

4/15/2020 3/15/2030 $ 10,788,441 $ 1,338,801 3.887 % 1 Month LIBOR + 2.5 %

As of December 31, 2022

Date Maturity

Date Notional

Amount Fair Value Pay Fixed Receive Rate

4/15/2020 3/15/2030 $ 11,110,484 $ 1,407,135 3.887 % 1 Month LIBOR + 2.5 %

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If the Company terminates the interest rate swap agreement, the cumulative change in fair value at the date of termination would be reclassified from Accumulated other comprehensive income, which is classified in stockholders’ deficit, into earnings on the Unaudited Condensed Consolidated Statements of Operations.

No amounts were reclassified relating to the Company’s designated cash flow hedge during the three months ended March 31, 2023 and during the year ended December 31, 2022.

No amounts were reclassified relating to the Company’s designated cash flow hedge during the six months ended June 30, 2023 and during the year ended December 31, 2022.

Freestanding Derivative

On April 9, 2022, JPMorgan Chase Funding Inc.

(“JPMCF”) entered into a letter agreement with the Company to receive an excess hold fee of

5 % of the aggregate initial stated value of the Legacy Bridger Series C Preferred S

hares held by JPMCF in excess of $ 157,894,736.84 as of March 15, 2023.

(“JPMCF”) entered into a letter agreement with the Company to receive an excess hold fee of 5 % of the aggregate initial stated value of the Legacy Bridger Series C Preferred Shares held by JPMCF in excess of $ 157,894,736.84 as of March 15, 2023.

The excess hold fee was considered a freestanding derivative instrument until March 15, 2023 and became a fee payable thereafter.

The initial freestanding derivative and subsequent excess hold fee payable were recorded at fair value in Accrued expenses and other current liabilities on the Unaudited Condensed Consolidated Balance Sheets.

As of March 31, 2023, the fair value of the fee payable is $ 2,237 thousand.

As of December 31, 2022, the fair value of the freestanding derivative on Legacy Bridger Series C Preferred S

hares was $ 2,186 thousand.

The Company paid $ 1,119 thousand of the excess hold fee in June 2023.

As of June 30, 2023, the remaining $ 1,118 thousand is payable and recorded in Accounts payable on the Unaudited Condensed Consolidated Balance Sheets.

As of December 31, 2022, the fair value of the freestanding derivative on Legacy Bridger Series C Preferred Shares was $ 2,186 thousand.

Realized gains and losses arising from changes in fair value of the freestanding derivative are recorded in earnings.

For the three months ended March 31, 2023, the Company recorded a realized loss of $ 51 thousand in interest expense on the Unaudited Condensed Consolidated Statement of Operations.

For the three and six months ended June 30, 2023, the Company recorded a realized loss of zero and $ 51 thousand in interest expense on the Unaudited Condensed Consolidated Statements of Operations, respectively.

Note 11— Fair Value Measurements

Long-term debt, net of debt issuance costs

As of March 31, 2023, the Company had $ 156,524 thousand of fixed rate and $ 51,164 thousand of variable rate debt outstanding, respectively.

The majority of the fixed rate debt was entered into recently, and therefore, based on current market rates.

As of June 30, 2023, the Company had $ 156,715 thousand of fixed rate and $ 50,806 thousand of variable rate debt outstanding, respectively.

The majority of the fixed rate debt is based on current market rates.

The Company estimated the fair value of the fixed rate debt using quoted market prices (Level 2 inputs) within the fair value hierarchy.

The variable rate debt approximates fair value based on the closing or estimated market prices of similar securities comparable to the Company’s debts as of March 31, 2023 and December 31, 2022.

The variable rate debt approximates fair value based on the closing or estimated market prices of similar securities comparable to the Company’s debts as of June 30, 2023 and December 31, 2022.

Debt financing activities and loan agreements are further described in “Note 12 – Long-Term Debt.”

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The following tables summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy:

As of March 31, 2023

As of June 30, 2023

Level 1 Level 2 Level 3

Cash $ 844,582 $ — $ —

Cash equivalents:

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Interest rate swap — 1,338,801 —

Total assets $ 13,084,401 $ 13,911,751 $ —

Warrant liabilities – Public Warrants $ 3,450,000 $ — $ —

Warrant liabilities – Private Placement Warrants — 1,880,000 —

Excess hold fee payable on Series A Preferred Stock

Embedded derivative of Series A Preferred Stock — — 815,250

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As of December 31, 2022

Level 1 Level 2 Level 3

Cash $ 259,522 $ — $ —

Cash equivalents:

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Interest rate swap — 1,407,135 —

Total assets $ 12,569,313 $ 86,277,604 $ —

Freestanding derivative on Legacy Bridger Series C Preferred Shares $ — $ — $ 2,186,283

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Total liabilities $ — $ — $ 3,225,613

Interest Rate Swap and Freestanding Derivative

The Company’s derivative financial instruments are measured at fair value on a recurring basis based on quoted market prices or using standard valuation models as described in “Note 10—Interest Rate Swap and Freestanding Derivative.”

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

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dollars, except as stated)

Interest Rate Swap and Freestanding Derivative

The notional amounts of the derivative financial instruments do not necessarily represent amounts exchanged by the parties and, therefore, are not a direct measure of our exposure to the financial risks described in “Note 2—Summary of Significant Accounting Policies.”

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The Company used a Level 3 valuation methodology to measure this freestanding derivative.

As of March 31, 2023 the excess hold fee became a known, fixed payable and therefore is a Level 1 fair value measurement.

Mandatorily Redeemable Legacy Bridger Series B Preferred Shares

The Company’s mandatorily redeemable Legacy Bridger Series B Preferred Shares are measured at fair value based on capital contributions, plus accrued but unpaid interest.

The Legacy Bridger Series B Preferred Shares were redeemed during the year ended December 31, 2022 as furthered discussed in “Note 18 – Mandatorily Redeemable Preferred Stock.”

The Legacy Bridger Series B Preferred Shares were redeemed during the year ended December 31, 2022 as furthered discussed in “Note 18 – Mandatorily Redeemable Preferred Shares.”

Embedded derivative of Legacy Bridger Series C Preferred Shares and Series A Preferred Stock

The Company identified a redemption feature of the Legacy Bridger Series C Preferred Shares that required bifurcation from the host instrument as an embedded derivative liability, as discussed in “Note 17 – Mezzanine Equity.”

The embedded derivative was initially valued and remeasured using a “with-and-without” method.

The “with-and-without” methodology involved valuing the entire instrument both with and without the embedded derivative using a discounted cash flow approach.

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This valuation methodology is based on unobservable estimates and judgements, and therefore is classified as a Level 3 fair value measurement.

interest per annum to be accrued by the holders of the Legacy Bridger Series C Preferred Shares.

Legacy Bridger Series C Preferred Shares were re-issued

as Series A Preferred Stock as part of the Closing, as further discussed in “Note 17 – Mezzanine Equity.”

The significant unobservable input used in the estimated fair value measurement of the embedded derivative is the timing for which the Company may be in default of certain financing facilities that would require an increase of 2 % interest per annum to be accrued by the holders of the Legacy Bridger Series C Preferred Shares.

Legacy Bridger Series C Preferred Shares were re-issued as Series A Preferred Stock as part of the Closing, as further discussed in “Note 17 – Mezzanine Equity.”

Commercial paper and Investments in marketable securities

The fair values of the commercial paper and available-for-sale

marketable securities are based on observable market prices, and therefore classified as a Level 2 fair value measurement.

Refer to “Note 3 – Cash Equivalents and Investments in Marketable Securities”

for additional details.

The fair values of the commercial paper and available-for-sale marketable securities are based on observable market prices, and therefore classified as a Level 2 fair value measurement.

Refer to “Note 3 – Cash Equivalents and Investments in Marketable Securities” for additional details.

Warrant Liabilities

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The Company classifies the Warrants as liabilities at their fair value and adjust the Warrants to fair value at each reporting period.

The warrant liabilities are subject to remeasurement at each balance sheet date until exercised, and any change in fair value are recorded in earnings through Selling, general and administrative expense on the Consolidated Statement of Operations.

The Public Warrants are publicly traded under the symbol “BAERW,” and the fair value of the Public Warrants at a specific date is determined by the closing price of the Public Warrants as of that date.

Therefore, the Public Warrants are classified as Level 1 of the fair value hierarchy.

The Public Warrants are redeemable at any time during the term of the warrant in which the Common Stock share trading price has been at least $

18.00 per share for 20 trading days within the 30 trading-day

JCIC Sponsor can redeem both the Private Placement Warrants and the Public Warrants when the stock price is between $ 10.00 to

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

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dollars, except as stated)

Therefore, the Public Warrants are classified as Level 1 of the fair value hierarchy.

The Public Warrants are redeemable at any time during the term of the warrant in which the Common Stock share trading price has been at least $ 18.00 per share for 20 trading days within the 30 trading-day period.

JCIC Sponsor can redeem both the Private Placement Warrants and the Public Warrants when the stock price is between $ 10.00 to $ 18.00 .

As such, it is economically beneficial for the Company to redeem the Private Placement Warrants any time before the stock price crosses the $ 18.00 threshold.

Therefore, the Warrants have similar economic value, hence Private Placement Warrants are deemed to have the same value as the Public Warrants and are classified Level 2 of the fair value hierarchy.

“Note 9 – Accrued Expenses and Other Liabilities”

for additional details.

Non-Recurring

Fair Value Measurements

The Company measures certain assets at fair value on a non-recurring

basis, including long-lived assets and goodwill and cost and equity method investments, which are evaluated for impairment.

Refer to “Note 9 – Accrued Expenses and Other Liabilities” for additional details.

Non-Recurring Fair Value Measurements

The Company measures certain assets at fair value on a non-recurring basis, including long-lived assets and goodwill and cost and equity method investments, which are evaluated for impairment.

Long-lived assets include property, plant and equipment, net, and certain intangible assets.

The inputs used to determine the fair value of long-lived assets are considered Level 3 measurements due to their subjective nature.

As of March 31, 2023 and December 31, 2022, the Company did not have any significant assets or liabilities that were remeasured at fair value on a non-recurring

basis in periods subsequent to initial recognition

As of June 30, 2023 and December 31, 2022, the Company did not have any significant assets or liabilities that were remeasured at fair value on a non-recurring basis in periods subsequent to initial recognition.

Note 12 – Long-Term Debt

Long-term debt consisted of the following:

As of March 31,

As of June 30,

2023 As of December 31,

Permanent loan agreement, dated August 21, 2020, greater of Prime + 1.5 % or 4.75 % interest rate, maturing August 21, 2035

$ 18,734,612 $ 18,852,476

Permanent loan agreement, dated October 1, 2020, greater of Prime + 1.5 % or 4.75 % interest rate, maturing October 1, 2035

18,797,058 18,924,229

Term loan agreement dated September 30, 2019, LIBOR + 2.5 %, maturing March 15, 2030

10,788,441 11,110,484

Term loan agreement dated February 3, 2020, LIBOR + 2.5 %, maturing February 3, 2027

4,092,000 4,371,000

Taxable industrial revenue bonds, dated July 21, 2022, 11.5 % interest rates, maturing September 1, 2027

Various term loan agreements, with earliest start at September 9, 2021, 5 - 5.5 %

interest rates, latest maturation on November 17, 2027

160,000,000 160,000,000

Various term loan agreements, with earliest start at September 9, 2021, 5 - 5.5 % interest rates, latest maturation on November 17, 2027

282,537 317,073

Loans payable 212,694,648 213,575,262

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Total long-term debt, net of debt issuance costs $ 205,060,810 $ 205,471,958

2020 Loan Agreements

In 2020, the Company entered into two separate credit facilities brokered through Live Oak Bank (“LOB”) and backed by the U.S.

Department of Agriculture (“USDA”) for the completed purchase of the Company’s first two Viking Air Limited (“Viking”) Cl415EAF aircraft.

The Company issued two

$ 19,000 thousand promissory notes to LOB, established as 15 -year

maturity, first 2 years interest only payments monthly, then 13 -year

term principal plus interest due monthly at the rate of the greater of prime plus 1.5 % or 4.75 % per annum.

The first of these notes was issued on August 21, 2020 and the second was issued October 1, 2020 to BAT1, LLC and BAT2, LLC, respectively.

Debt issuance costs for BAT1 and BAT2 were $ 951 thousand and $ 877 thousand, respectively.

Both of these notes are subject to financial covenants requiring the Company to maintain a debt service coverage ratio (“DSCR”), generally calculated as the ratio of the net cash flow (as defined in the applicable note agreements) to the amount of interest and servicing fees required to be paid over the succeeding 12 months on the principal amount of the note, as applicable, that will be outstanding on the payment date following such date of determination, that exceeds

1.25 x at the aircraft or entity level and for the Company’s debt to worth ratio to not exceed 5.00 x at the aircraft or entity level.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

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dollars, except as stated)

2020 Loan Agreements

In 2020, the Company entered into two separate credit facilities brokered through Live Oak Bank (“LOB”) and backed by the U.S.

Department of Agriculture for the completed purchase of the Company’s first two Viking Air Limited (“Viking”) Cl415EAF aircraft.

The Company issued two $ 19,000 thousand promissory notes to LOB, established as 15 -year maturity, first 2 years interest only payments monthly, then 13 -year term principal plus interest due monthly at the rate of the greater of prime plus 1.5 % or 4.75 % per annum.

The first of these notes was issued on August 21, 2020 and the second was issued October 1, 2020 to BAT1, LLC and BAT2, LLC, respectively.

Debt issuance costs for BAT1 and BAT2 were $ 951 thousand and $ 877 thousand, respectively.

On February 3, 2020, the Company entered into a credit facility with RMB to finance in part the purchase of four Quest Kodiak aircraft.

A promissory note was issued for $ 5,580 thousand, established as a 7 -year

maturity, first 8 months interest only payments monthly, 60 day draw period, then 76 -month

term plus principal interest due monthly on a 10 -year

amortization at the rate of 1 month LIBOR plus 2.5 %.

A promissory note was issued for $ 5,580 thousand, established as a 7 -year maturity, first 8 months interest only payments monthly, 60 day draw period, then 76 -month term plus principal interest due monthly on a 10 -year amortization at the rate of 1 month LIBOR plus 2.5 %.

Debt issuance costs for this loan was $ 86 thousand.

The Company also maintained a credit facility with RMB issued in 2019 for $ 12,882 thousand, established as a 10 -year

maturity, 6 -month

draw period, first 6 months interest only payments monthly, then 10 -year

term principal plus interest due monthly on a 20 -year

amortization at the rate of 1 month LIBOR plus 2.5 %.

The Company also maintained a credit facility with RMB issued in 2019 for $ 12,882 thousand, established as a 10 -year maturity, 6 -month draw period, first 6 months interest only payments monthly, then 10 -year term principal plus interest due monthly on a 20 -year amortization at the rate of 1 month LIBOR plus 2.5 %.

Debt issuance costs for this loan were $ 116 thousand.

Both of these notes with RMB are subject to financial covenants requiring the Company to maintain a debt service coverage ratio (“DSCR”), calculated as the ratio of adjusted EBITDA (as defined in the applicable note agreements) to the amount of interest and principal payments for the fiscal year ending on the compliance date, that exceeds 1.25 x for the Company.

Both of these notes with RMB are subject to financial covenants requiring the Company to maintain a DSCR, calculated as the ratio of adjusted EBITDA (as defined in the applicable note agreements) to the amount of interest and principal payments for the fiscal year ending on the compliance date, that exceeds 1.25 x for the Company.

These notes are also subject to financial covenants requiring the Company to maintain a Senior Leverage Ratio on a quarterly basis not to exceed 7 .00 to 1.00 through Quarter 3, 2024, 6 .00 to 1.00 through Quarter 3, 2025 and 5 .00 to 1.00 thereafter.

This is calculated as Total Funded Senior Debt (as defined in the applicable note agreements) less municipal debt, divided by adjusted EBITDA (as defined in the applicable note agreements).

of December 31, 2022, the Company was not in violation of the Senior Leverage Ratio requirement related to the credit facilities entered with RMB, as RMB amended the loan agreements prior to year-end.

As of December 31, 2022, the Company was not in violation of the Senior Leverage Ratio requirement related to the credit facilities entered with RMB, as RMB amended the loan agreements prior to year-end.

These amendments modified the definition of EBITDA to be used in the Senior Leverage Ratio calculation to include certain allowable addbacks and modified the timing requirement of the Senior Leverage Ratio.

As of June 30, 2023, the Company was in violation of the Senior Leverage Ratio requirement related to the credit facilities entered with RMB.

The calculation for this RMB covenant based on quarterly financials is a violation for only June 30, 2023.

The acceleration of the obligation has been waived for the most recent quarter.

2021 Loan Agreements

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These proceeds are designated to finance the construction and equipping of the Company’s third aircraft hangar in Belgrade, Montana.

They were issued with a 15 -year

maturity, first two years interest only payments monthly at the rate of 6.5 %.

They were issued with a 15 -year maturity, first two years interest only payments monthly at the rate of 6.5 %.

Debt issuance costs for this loan were $ 570 thousand.

On July 21, 2022, upon the closing of the 2022 Bonds, the Company redeemed in full the 2021 Bonds, and recorded a loss of $

845 thousand on debt extinguishment in Other (expense) income in the Condensed Consolidated Statements of Operations.

The Company re-entered

into a new short-term loan to finance aviation insurance premiums with IPFS on November 18, 2021.

On July 21, 2022, upon the closing of the 2022 Bonds, the Company redeemed in full the 2021 Bonds, and recorded a loss of $ 845 thousand on debt extinguishment in Other (expense) income in the Condensed Consolidated Statements of Operations.

The Company re-entered into a new short-term loan to finance aviation insurance premiums with IPFS on November 18, 2021.

This was financed for $ 610 thousand with a maturity of one year and at a rate of 3.89 %.

No debt issuance costs were incurred.

The Company entered into six various term loan agreements for the purchase of vehicles through First Interstate Bank with the earliest date of September 9, 2021.

These loans ranged from $ 29 thousand to $ 66 thousand and were at rates from 5 % to 5.5 % and at durations from 5 to 6 years, with the latest maturation on November 17, 2027 .

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

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dollars, except as stated)

The Company entered into various term loan agreements for the purchase of vehicles through First Interstate Bank with the earliest date of September 9, 2021.

These loans ranged from $ 29 thousand to $ 66 thousand and were at rates from 5 % to 5.5 % and at durations from 5 to 6 years, with the latest maturation on November 17, 2027.

2022 Loan Agreements

The Company entered into two various term loan agreements for the purchase of vehicles through First Interstate Bank with the date of April 21, 2022.

These loans ranged from $ 65 thousand to $ 72 thousand and were at a rate of 4.8 % and at a duration of 5 years, with the maturation on May 5, 2027 .

The Company entered into two term loan agreements for the purchase of vehicles through First Interstate Bank with the date of April 21, 2022.

These loans were for $ 65 thousand and $ 72 thousand and were at a rate of 4.8 % and at a duration of 5 years, with the maturation on May 5, 2027.

On July 21, 2022, the Company closed on the 2022 Bonds, upon which the Company received from aggregate proceeds of $ 135,000 thousand on July 21, 2022 and $ 25,000 thousand on August 10, 2022.

The proceeds were designated to redeem in full the 2021 Bonds and the Legacy Bridger Series A Preferred Shares, to finance the construction and equipping of the Company’s third and fourth aircraft hangar in Belgrade, Montana and to fund the purchase of additional CL415EAF aircraft.

The 2022 Bonds mature on

September 1, 2027 , with an annual interest rate of 11.5 % payable semiannually on March 1 and September 1 of each year , commencing on September 1, 2022.

The 2022 Bonds mature on September 1, 2027, with an annual interest rate of 11.5 % payable semiannually on March 1 and September 1 of each year, commencing on September 1, 2022.

Debt issuance costs for the 2022 Bonds were $ 4,224 thousand.

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The 2022 Bonds are subject to financial covenants requiring the Company to maintain a DSCR that exceeds 1.25 x commencing with the fiscal quarter ending December 31, 2023, operate in such a manner to produce gross revenues so as to be at all relevant times in compliance with the DSCR covenant and have $ 8,000 thousand in the form of cash or investments (excluding margin accounts and retirement accounts) at all times and to be reported.

Amortization of debt issuance costs was $ 239 thousand and $ 45 thousand for the three months ended March 31, 2023 and March 31 2022, respectively.

Amortization of debt issuance costs was $ 245 thousand and $ 484 thousand for the three and six months ended June 30, 2023, respectively, and $ 45 thousand and $ 90 thousand for the three and six months ended June 30, 2022, respectively.

Note 13 – Commitments and Contingencies

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and Viking for the purchase of six Viking CL415EAF aircraft.

For the three months ended March 31, 2023, the Company paid

$ 9,098 thousand and received its 6 th

Viking CL415EAF, the remaining aircraft under the aircraft purchase agreement.

commitments were $ 18,196 thousand as of December 31, 2022.

On January 21, 2021, the Company entered

statement of work with Viking to provide a Supplemental Structural Life Management Program (“SSLMP”) Subscription.

This program is a 5-year subscription service providing the Company with a structural program for the 6 CL415EAF purchased aircraft to meet contractual inspection requirements from the US Forest Service.

The undiscounted cost of the program will be $

3,500 thousand payable through the delivery of the 6 th

aircraft, the first payment of which was due and paid January 2021, and the final payment paid February 2023.

For the six months ended June 30, 2023, the Company paid $ 9,098 thousand and received its 6th Viking CL415EAF, the remaining aircraft under the aircraft purchase agreement.

Un-invoiced commitments were $ 18,196 thousand as of December 31, 2022.

On March 23, 2022, the Company entered into an agreement with Sievert Construction, Inc (“Sievert”) for the construction of a hangar at the Bozeman Yellowstone International Airport in Belgrade, Montana.

Payments made under the agreement were $ 1,567 thousand and $ 1,926 thousand for the three and six months ended June 30, 2023.

Un-invoiced commitments were $ 759 thousand and $ 3,756 thousand as of June 30, 2023 and December 31, 2022, respectively.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

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dollars, except as stated)

On March 23, 2022, the Company entered into a statement of work with Sievert Construction, Inc (“Sievert”) for the construction of a hangar at the Bozeman Yellowstone International Airport in Belgrade, Montana.

Payments made under the agreement were $ 359 thousand for the three months ended March 31, 2023.

commitments were $ 2,467 thousand and $ 3,756 thousand as of March 31, 2023 and December 31, 2022, respectively.

As of March 31, 2023, future payments related to the construction of the hangar are as follows:

As of March 31, 2023:

As of June 30, 2023, future payments related to the construction of the hangar are as follows:

As of June 30, 2023:

Remainder of 2023 $ 758,960

Total $ 758,960

Note 14 – Collaborations

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Overwatch agrees to provide the products and services at a discount to the Company under the Collaboration Agreement.

Overwatch’s products and services under the Collaboration Agreement include, but not limited to, imaging systems, software engineer labor related to software-as-a-service

support, labor related to sensor operations, and cloud-based image data web service.

Overwatch’s products and services under the Collaboration Agreement include, but not limited to, imaging systems, software engineer labor related to software-as-a-service support, labor related to sensor operations, and cloud-based image data web service.

In exchange, the Company agrees to pay Overwatch a 7.5 % share of revenue from FireTrac on a quarterly basis.

As stipulated under the Collaboration Agreement, FireTrac is not expected to generate revenue until the second quarter of 2023.

The Collaboration Agreement will end upon termination by (i) a mutual agreement between the Company and Overwatch, (ii) either or both parties upon revenue payment to Overwatch not meeting certain thresholds stipulated in the Collaboration Agreement within the second, third, or fourth anniversary of the effective date of the Collaboration Agreement, or (ii) either party upon a material breach of the Collaboration Agreement uncured within thirty (30) days after written notice from the non-breaching

FireTrac has not generated revenue since the Company entered into the Collaboration Agreement.

The Collaboration Agreement will end upon termination by (i) a mutual agreement between the Company and Overwatch, (ii) either or both parties upon revenue payment to Overwatch not meeting certain thresholds stipulated in the Collaboration Agreement within the second, third, or fourth anniversary of the effective date of the Collaboration Agreement, or (iii) either party upon a material breach of the Collaboration Agreement uncured within thirty (30) days after written notice from the non-breaching party.

The Company determined that both the Company and Overwatch are active participants and exposed to the significant risks and rewards of the collaboration under the Collaboration Agreement.

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Therefore, the Company considers the collaboration to be within the scope of ASC 808.

For the three months ended March 31, 2022, the Company recorded $ 432 thousand of purchases of imaging systems under the Collaboration Agreement in Property, plant and equipment, net, and did no t make any purchases during the three months ended March 31, 2023.

For the three months ended March 31, 2023, the Company recorded $ 11 thousand of engineering services provided by Overwatch under the Collaboration Agreement in Selling, general and administrative expense.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

For the three and six months ended June 30, 2022, the Company recorded $ 145 thousand and $ 577 thousand of purchases of imaging systems under the Collaboration Agreement in Property, plant and equipment, net, and did not make any purchases during the three and six months ended June 30, 2023, respectively.

For the three and six months ended June 30, 2023, the Company recorded $ 15 thousand and $ 26 thousand of engineering services provided by Overwatch under the Collaboration Agreement in Selling, general and administrative expense, respectively.

Note 15 – Stock-Based Compensation

Incentive Units

During the years ended December 31, 2022 and 2021, Legacy Bridger granted Incentive Units

to selected board members and executives.

During the years ended December 31, 2022 and 2021, Legacy Bridger granted Incentive Units to selected board members and executives.

Within each grant, 80 % of the Incentive Units vest annually over a four year period subject to continued service by the grantee (the “Time-Vesting Incentive Units”), and the remaining 20 % of the Incentive Units vest upon a qualifying change of control event (the “Exit-Vesting Incentive Units”).

1 unchanged sentence

Upon termination of the board member or executive, the Company has the right, but not the obligation, to repurchase all or any portion of the vested Incentive Units at fair market value.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

For the Time-Vesting Incentive Units, compensation cost is recognized over the requisite service period on a straight-line basis.

Upon a qualifying change of control event, the unrecognized compensation expense related to the Time-Vesting Incentive Units will be recognized when the change of control event is considered probable.

For the Exit-Vesting Incentive Units, expense is recognized when a qualifying change of control event is considered probable, which has not occurred as of March 31, 2023.

For the Exit-Vesting Incentive Units, expense is recognized when a qualifying change of control event is considered probable, which has not occurred as of June 30, 2023.

Forfeitures are accounted for as they occur.

Compensation cost for the Incentive Units is measured at their grant-date fair value.

The fair value of the Incentive Units is derived through an option pricing model

, which incorporates various assumptions.

The fair value of the Incentive Units is derived through an option pricing model, which incorporates various assumptions.

Use of a valuation model requires management to make certain assumptions with respect to selected model inputs.

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The risk-free interest rate is based on U.S.

Treasury zero-coupon

Treasury zero-coupon issues.

The weighted-average assumptions the Company used in the option pricing model for 2021 are as follows:

4 unchanged sentences

Discount for lack of marketability (%) 30

Incentive Unit activity under the Plan for the period from January 1, 2022 to March 31, 2023 was as follows:

Time-Vesting Incentive Units

Exit-Vesting Incentive Units

Incentive Unit activity under the Plan for the period from January 1, 2022 to June 30, 2023 was as follows:

Time-Vesting Incentive Units Exit-Vesting Incentive Units

Awards Weighted

fair value Number of

Awards Weighted

Unvested as of January 1, 2022 242,424 $ 0.15 80,808 $ 0.11

Granted — — — —

Vested 80,808 0.11 — —

Forfeited — — — —

Unvested as of December 31, 2022 161,616 $ 0.17 80,808 $ 0.11

Unvested as of March 31, 2023

Granted — — — —

Vested — — — —

Forfeited — — — —

Unvested as of June 30, 2023 161,616 $ 0.17 80,808 $ 0.11

For the three and six months ended June 30, 2023, the Company recognized stock-based compensation expense related to incentive units of $ 2 thousand and $ 5 thousand within Selling, general and administrative expense on the Condensed Consolidated Statements of Operations, respectively.

For the three and six months ended June 30, 2022, the Company recognized stock-based compensation expense related to incentive units of $ 2 thousand and $ 5 thousand within Selling, general and administrative expense on the Condensed Consolidated Statements of Operations, respectively.

As of June 30, 2023, there was $ 22 thousand and $ 9 thousand of unrecognized compensation expense related to the unvested Time-Vesting Incentive Units and Exit-Vesting Incentive Units, respectively.

As of December 31, 2022, there was $ 27 thousand and $ 9 thousand of unrecognized compensation expense related to the unvested Time-Vesting Incentive Units and Exit-Vesting Incentive Units, respectively.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

For the three months ended March 31, 2023 and 2022, the Company recognized stock-based compensation expense related to incentive units of $ 2 thousand and $ 3 thousand within Selling, general and administrative expense on the Condensed Consolidated Statements of Operations, respectively.

As of March 31, 2023, there was $ 25 thousand and $ 9 thousand of unrecognized compensation expense related to the unvested Time-Vesting Incentive Units and Exit-Vesting Incentive Units, respectively.

Restricted Stock Units

In January 2023, in connection with the Closing, the Company and its Board established and approved and assumed the Plan, which allowed the Company to grant RSUs to certain executives and senior management (the “Participants”) of the Company.

In January 2023, in connection with the Closing, the Company and its Board established and approved and assumed the Plan, which allowed the Company to grant RSUs to Bridger employees (the “Participants”).

RSUs are settled in shares of Common Stock as the RSUs become vested.

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Dividends will be paid to holders of RSUs in cash upon the vesting date of the associated RSU and will be forfeited if the RSU does not vest.

On January 24, 2023, the Company granted

6,581,496 RSUs, of which 2,400,354 RSUs vested immediately upon Closing and will settle on or after January 24, 2024.

The fair value of the RSUs

immediately upon Closing is the closing stock price on the date of grant, subject to a discount for lack of marketability due to the post-vesting restrictions.

The remaining

4,181,142 RSUs vest over a period ranging from three to six years

, subject to the participant’s continued employment.

On January 24, 2023, the Company granted 6,581,496 RSUs, of which 2,400,354 RSUs vested immediately upon Closing and will settle on or after January 24, 2024.

The fair value of the RSUs that vested immediately upon Closing is the closing stock price on the date of grant, subject to a discount for lack of marketability due to the post-vesting restrictions.

The remaining 4,181,142 RSUs vest over a period ranging from three to six years , subject to the participant’s continued employment.

The fair value of the RSUs that vest over time is the closing stock price on the date of grant.

Upon vesting of the award, the Company will issue shares of Common Stock to the award holder.

The following is a summary of RSU activity for the period ended March 31, 2023:

Restricted Stock Units

Weighted average

On April 13, 2023, the Company granted 2,234,750 RSUs to all employees of the Company.

These RSUs vest over a period of one to six years , subject to the participant’s continued employment.

The fair value of the RSUs that vest over time is the closing stock price on the date of grant.

Upon vesting of the award, the Company will issue shares of Common Stock to the award holder.

The following is a summary of RSU activity for the period ended June 30, 2023:

Management Awards Employee Awards

Awards Weighted average

grant date fair

value Number of

Awards Weighted average

grant date fair

Unvested as of December 31, 2022 — $ — — $ —

Unvested as of March 31, 2023

The total fair value of RSUs vested during the three months ended March 31, 2023 was $ 21,603 thousand.

For the three months ended March 31, 2023, the Company recorded stock-based compensation expense related to RSUs of $ 25,597 thousand within Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations.

As of March 31, 2023, total compensation cost related to all RSUs not yet recognized was $ 38,612 thousand, which is expected to be recognized over a weighted-average period of 1.51 years.

Granted 6,581,496 9.76 2,234,750 4.56

Forfeited — — — —

Vested ( 2,400,354 ) 9.00 — —

Unvested as of June 30, 2023 4,181,142 $ 10.19 2,234,750 $ 4.56

The total fair value of RSUs vested during the six months ended June 30, 2023 was $ 21,603 thousand.

For the three and six months ended June 30, 2023, the Company recorded stock-based compensation expense related to RSUs of $ 6,449 thousand and $ 32,046 thousand within Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations.

As of June 30, 2023, total compensation cost related to all RSUs not yet recognized was $ 42,285 thousand, which is expected to be recognized over a weighted-average period of 1.52 years.

Note 16 – Related Party Transactions

For the three months ended March 31, 2023, the Company earned $ 321,244 in revenues due to labor, maintenance and improvements to an aircraft under the ownership of Mr.

For the three and six months ended June 30, 2023, the Company earned $ 112,210 and $ 433,454 , respectively, in revenues due to labor, maintenance and improvements to an aircraft under the ownership of Mr.

Timothy Sheehy, the Chief Executive Officer.

As of March 31, 2023, the Company had $ 321,244 in accounts receivable related to the revenues earned for the three months ended March 31, 2023.

As of June 30, 2023, the Company had $ 427,454 in accounts receivable related to the revenues earned for the three and six months ended June 30, 2023.

On July 21, 2022, the Company closed on the 2022 Bonds, upon which the Company received from aggregate proceeds of $ 135,000 thousand on July 21, 2022 and $ 25,000 thousand on August 10, 2022.

In connection with the original issuance, three senior executives of the Company purchased approximately $ 10,000 thousand of the 2022 Bonds, which purchases were entered into on an arm’s length basis during the public offering for the 2022 Bond, and

The Company paid zero and $ 575 thousand in interest to these three bond holders during the three and six months ended June 30, 2023, respectively, and incurred approximately $ 279 thousand and $ 563 thousand in interest for the three and six months ended June 30, 2023, respectively.

Refer to “Note 12 – Long-Term Debt.”

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

on the same terms and conditions that were offered to all Bond purchasers.

The Company paid $

575 thousand in interest to these three bond holders during the three months ended March 31, 2023, and incurred approximately $

thousand in interest for the three months ended March 31, 2023.

to “Note 12 – Long-Term Debt.”

Note 17 – Mezzanine Equity

Legacy Bridger Series C Preferred Shares

On April 25, 2022, Legacy Bridger authorized and issued

315,789.473684 Legacy Bridger Series C Preferred Shares for aggregate proceeds of

$ 288,516 thousand, net of issuance costs of $ 11,484

On April 25, 2022, Legacy Bridger authorized and issued 315,789.473684 Legacy Bridger Series C Preferred Shares for aggregate proceeds of $ 288,516 thousand, net of issuance costs of $ 11,484 thousand.

The Legacy Bridger Series C Preferred Shares ranked senior to Legacy Bridger’s common shares and ranked subordinate to Legacy Bridger Series A Preferred Shares, which were later redeemed in 2022, with respect to the distribution of assets upon liquidation or certain triggering events.

The Legacy Bridger Series C Preferred Shares did not participate in earnings of Legacy Bridger and were non-voting

Prior to the consummation of the qualified public offering, the Legacy Bridger Series C Preferred S

hares accrued interest daily at 7 % per annum for the first year, 9 % per annum for the second year and 11 % per annum thereafter and were compounded semi-annually at June 30 th

and December 31 st

of each year.

Following the consummation of a qualified public offering, the Legacy Bridger Series C Preferred S

hares were to accrue interest daily at 7 % per annum for the first 6 years, 9 % per annum for the seventh year and 11 % per annum thereafter, compounded semi-annually.

Accrued interest for the Legacy Bridger Series C Preferred S

hares was $ 15,344 thousand as of December 31, 2022 recorded to increase the redemption amount in mezzanine equity.

Upon the Closing, Legacy Bridger surrendered and exchanged all

315,789.473684

issued and outstanding Legacy Bridger Series C Preferred Shares into 315,789.473684 shares of Series A Preferred Stock.

The Company’s Certificate of Incorporation included provisions of the Legacy Bridger Series C Preferred Shares that were already in effect prior to the consummation of the

Reverse Recapitalization

As a result of the

Reverse Recapitalization

, the maximum redemption value of the Company’s Series A Preferred Stock changed to approximately

thousand and excluded the

% multiplier which had historically been included in the maximum redemption value of Legacy Bridger Series C Preferred

The Legacy Bridger Series C Preferred Shares did not participate in earnings of Legacy Bridger and were non-voting shares.

Prior to the consummation of the qualified public offering, the Legacy Bridger Series C Preferred Shares accrued interest daily at 7 % per annum for the first year, 9 % per annum for the second year and 11 % per annum thereafter and were compounded semi-annually at June 30th and December 31st of each year.

Following the consummation of a qualified public offering, the Legacy Bridger Series C Preferred Shares were to accrue interest daily at 7 % per annum for the first 6 years, 9 % per annum for the seventh year and 11 % per annum thereafter, compounded semi-annually.

Accrued interest for the Legacy Bridger Series C Preferred Shares was $ 15,344 thousand as of December 31, 2022 recorded to increase the redemption amount in mezzanine equity.

Upon the Closing, Legacy Bridger surrendered and exchanged all 315,789.473684 issued and outstanding Legacy Bridger Series C Preferred Shares into 315,789.473684 shares of Series A Preferred Stock.

The Company’s Certificate of Incorporation included provisions of the Legacy Bridger Series C Preferred Shares that were already in effect prior to the consummation of the Reverse Recapitalization .

As a result of the Reverse Recapitalization , the maximum redemption value of the Company’s Series A Preferred Stock changed to approximately $ 332,659 thousand and excluded the 50 % multiplier which had historically been included in the maximum redemption value of Legacy Bridger Series C Preferred Shares.

The Legacy Bridger Series C Preferred Shares were convertible at the election of the holder into shares of Legacy Bridger’s Class B common stock after the occurrence of certain specified events, including after a qualified public offering, without the payment of additional consideration by the holder into such number of Legacy Bridger Class B common stock as determined by dividing the original issue price, plus accrued interest by a conversion price in effect at the time of conversion.

1 unchanged sentence

The applicable conversion price was subject to future adjustments upon the occurrence of a qualified public offering.

The Legacy Bridger Series C Preferred S

hares were mandatorily redeemable by Legacy Bridger on April 25, 2032 at an amount dependent on whether the redemption occurs prior or following a qualified public offering.

If the mandatory redemption occurs prior to the consummation of a qualified public offering, the redemption amount was equal to the stated value, plus the initial issue price multiplied by

50 %, plus accrued but unpaid interest.

The Legacy Bridger Series C Preferred Shares were mandatorily redeemable by Legacy Bridger on April 25, 2032 at an amount dependent on whether the redemption occurs prior or following a qualified public offering.

If the mandatory redemption occurs prior to the consummation of a qualified public offering, the redemption amount was equal to the stated value, plus the initial issue price multiplied by 50 %, plus accrued but unpaid interest.

If the mandatory redemption occurs following the consummation of a qualified public offering, the redemption amount was equal to the stated value, plus accrued but unpaid interest.

The Legacy Bridger Series C Preferred S

hares were also redeemable upon certain triggering events outside of the control of Legacy Bridger.

The redemption events include redemption by the holder after March 29, 2027 and prior to a qualified public offering, or a fundamental change in Legacy Bridger’s voting and governance structure such as the sale of Legacy Bridger or its subsidiaries representing more than

50 % of Legacy Bridger’s voting stock or a similar liquidity event.

The Legacy Bridger Series C Preferred Shares were also redeemable upon certain triggering events outside of the control of Legacy Bridger.

Given the conversion feature was considered substantive, the mandatory redemption date was not certain and the optional redemption was upon the occurrence of certain events that are considered not solely within Legacy Bridger’s control, the Legacy Bridger Series C Preferred Shares were classified as mezzanine equity.

The Company identified certain conversion and redemption features that are required to be bifurcated from the host instrument as embedded derivative liabilities.

The Legacy Bridger Series C Preferred S

hares contained a clause which allow ed

for an increase of 2 % interest per annum to be accrued by the holders of the Legacy Bridger Series C Preferred

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

hares in the event of a default under certain financing facilities, including noncompliance with certain financial covenants, during the period from 30 days after the occurrence of such default until such default was cured or remediated.

The Company identified certain conversion and redemption features that are required to be bifurcated from the host instrument as embedded derivative liabilities.

The Legacy Bridger Series C Preferred Shares contained a clause which allowed for an increase of 2 % interest per annum to be accrued by the holders of the Legacy Bridger Series C Preferred Shares in the event of a default under certain financing facilities, including noncompliance with certain financial covenants, during the period from 30 days after the occurrence of such default until such default was cured or remediated.

The Company expected to be exposed to the 2 % interest rate increase for no more than 2 months.

As of December 31, 2022, the fair value of the embedded derivative was $ 1,039 thousand recorded as a liability in the Condensed Consolidated Balance Sheets and remeasured to fair value at each balance sheet date with changes in fair value recorded within Interest expense in the Condensed Consolidated Statements of Operations.

The Company also entered into a letter agreement with JPMorgan Chase Funding Inc.

(“JPMCF”) on April 9, 2022 to pay an excess hold fee of

5 % of the aggregate initial stated value of the Legacy Bridger Series C Preferred S

hares held by JPMCF in excess of $ 157,894,736.84 as of March 15, 2023.

The Company also entered into a letter agreement with JPMCF on April 9, 2022 to pay an excess hold fee of 5 % of the aggregate initial stated value of the Legacy Bridger Series C Preferred Shares held by JPMCF in excess of $ 157,894,736.84 as of March 15, 2023.

Further details of the freestanding derivative and subsequent excess hold fee payable are described in “Note 10 – Interest Rate Swap and Freestanding Derivative.”

3 unchanged sentences

The Company elected to recognize changes in redemption value immediately, adjusting the Legacy Bridger Series C Preferred Shares to the maximum redemption value at each reporting date.

As of December 31, 2022, the Legacy Bridger Series C Preferred Shares were carried at their redemption value

As of December 31, 2022, the Legacy Bridger Series C Preferred Shares were carried at their redemption value of $ 489,022 thousand.

Series A Preferred Stock

Shares of Series A Preferred

Stock are mandatorily redeemable by the Company on April 25, 2032 at a redemption amount that is equal to the stated value, plus accrued but unpaid interest.

Accrued interest for the Series A Preferred Stock was $ 4,274

thousand as of March 31, 2023.

Shares of Series

A Preferred Stock are also redeemable upon certain triggering events outside of the control of the Company.

The triggering events include redemption by the holder on or after April 25, 2027, or a fundamental change in the Company’s voting and governance structure such as the sale of the Company

or its subsidiaries representing more than

50 % of the Company’s voting stock or a similar liquidity event.

As of the Closing Date and March 31, 2023, it is probable that the Series A Preferred Stock may become redeemable on April 25, 2032.

Shares of Series A Preferred Stock are mandatorily redeemable by the Company on April 25, 2032 at a redemption amount that is equal to the stated value, plus accrued but unpaid interest.

Accrued interest for the Series A Preferred Stock was $ 10,080 thousand as of June 30, 2023.

Shares of Series A Preferred Stock are also redeemable upon certain triggering events outside of the control of the Company.

The triggering events include redemption by the holder on or after April 25, 2027, or a fundamental change in the Company’s voting and governance structure such as the sale of the Company or its subsidiaries representing more than 50 % of the Company’s voting stock or a similar liquidity event.

As of the Closing Date and June 30, 2023, it is probable that the Series A Preferred Stock may become redeemable on April 25, 2032.

The Company has elected to recognize changes in redemption value immediately, adjusting the preferred stock to the maximum redemption value at each reporting date.

Upon Closing, the Series A Preferred Stock had both a carrying value and redemption value of $ 332,659 thousand, the 50 % multiplier, valued at $ 156,363 thousand, was removed.

As of March 31, 2023, the Series A Preferred Stock had both a carrying value and redemption value of $ 336,933 thousand.

As of June 30, 2023, the Series A Preferred Stock had both a carrying value and redemption value of $ 342,739 thousand.

Refer to table below.

As of March 31, 2023 the fair value of the embedded derivative related to the event of default is $ 694

thousand recorded as a liability on the Unaudited Condensed Consolidated Balance Sheets and remeasured to fair value at each balance sheet date with changes in fair value recorded within Interest expense or income on the Unaudited Condensed Consolidated Statements of Operations.

The Company determined the fair value of the other features requiring bifurcation, both individually and in the aggregate were immaterial at March 31, 2023.

As of June 30, 2023 the fair value of the embedded derivative related to the event of default is $ 815 thousand recorded as a liability on the Unaudited Condensed Consolidated Balance Sheets and remeasured to fair value at each balance sheet date with changes in fair value recorded within Interest expense or income on the Unaudited Condensed Consolidated Statements of Operations.

The Company determined the fair value of the other features requiring bifurcation, both individually and in the aggregate were immaterial at June 30, 2023.

The fair value of these features will be assessed at each reporting date and will be recognized and remeasured at fair value, if material.

Additionally, the reduction of the conversion price from $ 12.9 to $ 11 triggered a down round conversion feature embedded in the Series A Preferred Stock upon Closing.

The Company recognized the value of the effect of a down round feature as a deemed dividend, increasing loss available to common stockholders in the computation of the net loss per share by approximately $

48 million during the three months ended March 31, 2023.

As of March 31, 2023, there are 30,264,501

shares of Common Stock issuable upon conversion.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

Additionally, the reduction of the conversion price from $ 12.9 to $ 11 triggered a down round conversion feature embedded in the Series A Preferred Stock upon Closing.

The Company recognized the value of the effect of a down round feature as a deemed dividend, increasing loss available to common stockholders in the computation of the net (loss) income per share by approximately zero and $ 48 million during the three and six months ended June 30, 2023.

As of June 30, 2023, there are 31,158,962 shares of Common Stock issuable upon conversion.

Redeemable Series A Preferred Stock

Shares Amounts

Issued as of the Closing Date 315,789.473684 $ 332,658,947

315,789.473684

Adjustment to maximum redemption value — 10,080,022

Balance as of March 31, 2023

315,789.473684

Balance as of June 30, 2023 315,789.473684 $ 342,738,969

Redeemable Legacy Bridger Series C

Preferred Shares

Issuance of Legacy Bridger Series C Preferred S

315,789.473684

Shares Amounts

Issuance of Legacy Bridger Series C Preferred Shares 315,789.473684 $ 288,332,735

Adjustment to maximum redemption value — 202,688,810

Balance as of December 31, 2022 315,789.473684 $ 489,021,545

315,789.473684

Note 18 – Mandatorily Redeemable Preferred Shares

Legacy Bridger Series B Preferred Shares

Legacy Bridger had

60,000,000 Legacy Bridger Series B Preferred S

hares issued and outstanding as of December 31, 2021 at $

1.00 per share.

The Legacy Bridger Series B Preferred S

hares were non-voting and accrued interest at

17.5 % per annum, compounded quarterly.

A mandatory redemption period was required for the Legacy Bridger Series B Preferred S

hares plus their accrued interest in March of 2022.

Legacy Bridger had 60,000,000 Legacy Bridger Series B Preferred Shares issued and outstanding as of December 31, 2021 at $ 1.00 per share.

The Legacy Bridger Series B Preferred Shares were non-voting and accrued interest at 17.5 % per annum, compounded quarterly.

A mandatory redemption period was required for the Legacy Bridger Series B Preferred Shares plus their accrued interest in March of 2022.

The shares were mandatorily redeemable by Legacy Bridger at an amount equal to the capital contribution, plus accrued but unpaid interest on the earlier of certain redemption events or March 31, 2022.

The redemption events included the sale of Legacy Bridger or its subsidiaries representing more than

50 % of Legacy Bridger’s voting stock or assets, a qualified IPO or a similar liquidity event.

The redemption events included the sale of Legacy Bridger or its subsidiaries representing more than 50 % of Legacy Bridger’s voting stock or assets, a qualified IPO or a similar liquidity event.

The shares were redeemable at any time at the option of Legacy Bridger at a redemption price equal to face value, plus accrued, but unpaid interest.

The shares had preference to the common shares of Legacy Bridger, were non-voting and did not participate in the earnings of Legacy Bridger.

These Legacy Bridger Series B Preferred S

hares accrued interest at

17.5 % annually, compounded quarterly.

If not redeemed on or prior to March 31, 2022, the Legacy Bridger Series B Preferred Shares

would have accrued interest at

21.5 % annually, compounded quarterly.

As the Legacy Bridger Series B Preferred S

hares were mandatorily redeemable at a specified date, the security was classified as a liability on the Unaudited Condensed Consolidated Balance Sheets.

On April 25, 2022, Legacy Bridger used a portion of the proceeds from the issuance of the Legacy Bridger Series C Preferred S

hares to redeem all

of Legacy Bridger’s outstanding Legacy Bridger Series B Preferred S

69,999 thousand, inclusive of $ 9,999 thousand in accrued interest.

no Legacy Bridger

Series B Preferred S

hares as of March 31, 2023 and December 31, 2022.

These Legacy Bridger Series B Preferred Shares accrued interest at 17.5 % annually, compounded quarterly.

If not redeemed on or prior to March 31, 2022, the Legacy Bridger Series B Preferred Shares would have accrued interest at 21.5 % annually, compounded quarterly.

As the Legacy Bridger Series B Preferred Shares were mandatorily redeemable at a specified date, the security was classified as a liability on the Unaudited Condensed Consolidated Balance Sheets.

On April 25, 2022, Legacy Bridger used a portion of the proceeds from the issuance of the Legacy Bridger Series C Preferred Shares to redeem all 60,000,000 of Legacy Bridger’s outstanding Legacy Bridger Series B Preferred Shares for $ 69,999 thousand, inclusive of $ 9,999 thousand in accrued interest.

There were no Legacy Bridger Series B Preferred Shares as of June 30, 2023 and December 31, 2022.

Legacy Bridger Series A Preferred Shares

Legacy Bridger was authorized to issue 10,500,000 shares of Series A-1 and A-2 preferred shares (the “Legacy Bridger Series A-1 and A-2

Preferred Shares”) with a par value of

$ 0.001 share for $ 105,000

The Legacy Bridger Series A-1

Preferred Shares ranked senior to Legacy Bridger’s common shares and Legacy Bridger Series C Preferred Shares with respect to distribution of assets upon liquidation or certain triggering events, but did not participate in earnings of Legacy Bridger.

The Legacy Bridger Series A-1

Preferred Shares were voting and non-voting

shares, respectively.

On April 25, 2022, Legacy Bridger used the proceeds from the issuance of the Legacy Bridger Series C Preferred S

hares to redeem

4,444,444 shares

of the Legacy Bridger Series A-1

hares for $ 100,000 thousand.

The loss on redemption of $ 34,622 thousand was reflected as a reduction to Accumulated deficit on the Unaudited Condensed Consolidated Balance Sheets.

Legacy Bridger was authorized to issue 10,500,000 shares of Series A-1 and A-2 preferred shares (the “Legacy Bridger Series A-1 and A-2 Preferred Shares”) with a par value of $ 0.001 share for $ 105,000 thousand.

The Legacy Bridger Series A-1 and A-2 Preferred Shares ranked senior to Legacy Bridger’s common shares and Legacy Bridger Series C Preferred Shares with respect to distribution of assets upon liquidation or certain triggering events, but did not participate in earnings of Legacy Bridger.

The Legacy Bridger Series A-1 and A-2 Preferred Shares were voting and non-voting shares, respectively.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

On April 25, 2022, Legacy Bridger and its investors included a new mandatory redemption provision requiring the Legacy Bridger Series A-1

and Series A-2

Preferred Shares to be redeemed on April 25, 2032.

Due to the mandatory redemption provision, the Legacy Bridger Series A-1

Preferred Shares have been reclassified from mezzanine equity to liability.

Legacy Bridger elected the fair value option to measure the modification of the Legacy Bridger Series A-1

Preferred Shares, recording a value of

thousand at modification.

The modification of the Legacy Bridger Series A-1

Preferred Shares have been accounted for as an extinguishment, with the change in fair value of $45,609 thousand recorded to Accumulated deficit on the Unaudited Condensed Consolidated Balance Sheets with no gain or loss recorded to net loss.

On April 25, 2022, Legacy Bridger used the proceeds from the issuance of the Legacy Bridger Series C Preferred Shares to redeem 4,444,444 shares of the Legacy Bridger Series A-1 and A-2 Preferred Shares for $ 100,000 thousand.

The loss on redemption of $ 34,622 thousand was reflected as a reduction to Accumulated deficit on the Unaudited Condensed Consolidated Balance Sheets.

On April 25, 2022, Legacy Bridger and its investors included a new mandatory redemption provision requiring the Legacy Bridger Series A-1 and Series A-2 Preferred Shares to be redeemed on April 25, 2032.

Due to the mandatory redemption provision, the Legacy Bridger Series A-1 and A-2 Preferred Shares have been reclassified from mezzanine equity to liability.

Legacy Bridger elected the fair value option to measure the modification of the Legacy Bridger Series A-1 and A-2 Preferred Shares, recording a value of $ 132,331 thousand at modification.

The modification of the Legacy Bridger Series A-1 and A-2 Preferred Shares have been accounted for as an extinguishment, with the change in fair value of $ 45,609 thousand recorded to Accumulated deficit on the Unaudited Condensed Consolidated Balance Sheets with no gain or loss recorded to net loss.

The loss on extinguishment has been included in net loss attributable to common shareholders used to calculate net loss per share.

The Legacy Bridger Series A-1 and A-2 Preferred Shares accrued interest on a liquidation preference defined as the combined capital contributions plus accrued preferred interest amounts at a rate of

12 % per annum.

The Legacy Bridger Series A-1

Preferred Shares were redeemable upon certain triggering events outside of the control of Legacy Bridger in the event of board expansion and deemed liquidation.

Failure to pay the Legacy Bridger Series A-1 and A-2 Preferred Shares interest amount on a timely basis would trigger a board expansion event that provided the holders of the Legacy Bridger Series A-1 and A-2 Preferred Shares the option to obtain control of

Legacy Bridger’s board of directors and initiate a triggering event.

The triggering events included the sale of Legacy Bridger or its subsidiaries representing more than

of Legacy Bridger’s voting stock or assets, a qualified IPO or a similar liquidity event.

The Legacy Bridger Series A-1

Preferred Shares were redeemable at any time at the option of Legacy Bridger at a redemption price equal to the greater of the product of the investment amount multiplied by

plus any indemnification amounts or aggregate liquidation preference.

The Legacy Bridger Series A-1 and A-2 Preferred Shares accrued interest on a liquidation preference defined as the combined capital contributions plus accrued preferred interest amounts at a rate of 12 % per annum.

The Legacy Bridger Series A-1 and A-2 Preferred Shares were redeemable upon certain triggering events outside of the control of Legacy Bridger in the event of board expansion and deemed liquidation.

The triggering events included the sale of Legacy Bridger or its subsidiaries representing more than 50 % of Legacy Bridger’s voting stock or assets, a qualified IPO or a similar liquidity event.

The Legacy Bridger Series A-1 and A-2 Preferred Shares were redeemable at any time at the option of Legacy Bridger at a redemption price equal to the greater of the product of the investment amount multiplied by 2.25 plus any indemnification amounts or aggregate liquidation preference.

Legacy Bridger identified certain redemption features that would be required to be considered for bifurcation.

Legacy Bridger elected the fair value option and as such, valued the host preferred shares and embedded features as one instrument.

On July 21, 2022 and August 10, 2022, Legacy Bridger used the proceeds from the 2022 Bonds plus cash on hand to redeem in full the remaining

6,055,556 shares of the Legacy Bridger Series A-1 and A-2 Preferred Shares for aggregate proceeds of

$ 136,250 thousand.

The fair values of the Legacy Bridger Series A-1

Preferred Shares were increased by

$ 3,919 thousand from interest accrued since the modification on April 25, 2022 and no gain or loss were recorded to net loss upon extinguishment.

There were no Legacy Bridger Series A Preferred S

hares outstanding as of March 31, 2023 and December 31, 2022.

On July 21, 2022 and August 10, 2022, Legacy Bridger used the proceeds from the 2022 Bonds plus cash on hand to redeem in full the remaining 6,055,556 shares of the Legacy Bridger Series A-1 and A-2 Preferred Shares for aggregate proceeds of $ 136,250 thousand.

The fair values of the Legacy Bridger Series A-1 and A-2 Preferred Shares were increased by $ 3,919 thousand from interest accrued since the modification on April 25, 2022 and no gain or loss were recorded to net loss upon extinguishment.

There were no Legacy Bridger Series A Preferred Shares outstanding as of June 30, 2023 and December 31, 2022.

Note 19 – Income Taxes

As a result of the Reverse Recapitalization, the Company became the successor of Legacy Bridger, as discussed in “Note 1 – Organization and Basis of Presentation

which is treated as a partnership for U.S.

As a result of the Reverse Recapitalization, the Company became the successor of Legacy Bridger, as discussed in “Note 1 – Organization and Basis of Presentation , ” which is treated as a partnership for U.S.

federal income tax purposes.

4 unchanged sentences

federal income taxes, in addition to state and local income taxes, with respect to net taxable income or loss and any related tax credits of the Company.

The effective tax rate was 0 % for three months ended March 31, 2023.

The effective tax rate was 0 % for three and six months ended June 30, 2023, respectively.

The tax rate differs from the federal statutory rate as a result of the full valuation allowance recognized against the Company’s deferred tax assets.

As a result of the Reverse Recapitalization, the Company recognized a deferred tax asset (“DTA”) to account for the difference between the Company’s book and tax basis in its investment in Legacy Bridger.

Tax basis exceeds book basis largely because of the tax basis step-up

created in various business and equity transactions prior to the Reverse Recapitalization.

The Company expects to generate more deferred tax assets related to the issuance of stock-based compensation discussed in “Note 15 – Stock-Based Compensation”

and federal net operating losses.

As a result of the Reverse Recapitalization, the Company recognized a deferred tax asset to account for the difference between the Company’s book and tax basis in its investment in Legacy Bridger.

Tax basis exceeds book basis largely because of the tax basis step-up created in various business and equity transactions prior to the Reverse Recapitalization.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

The Company expects to generate more deferred tax assets related to the issuance of stock-based compensation discussed in “Note 15 – Stock-Based Compensation” and federal net operating losses.

The Company has assessed the realizability of the net deferred tax assets and in that analysis has considered the relevant positive and negative evidence available to determine that it is more likely than not that the deferred tax assets will not be realized as the Company does not expect to generate sufficient taxable income in the near term.

3 unchanged sentences

federal, state and local income tax returns are currently under examination by the respective taxing authorities.

Note 20 – Net Income (Loss) Per Share

Basic and diluted net income (loss) per share of Common Stock is calculated in accordance with ASC 260, Earnings per share.

Net income (loss) per Common Stock – basic is calculated by dividing net income (loss) attributable to Common Stockholders by the weighted-average shares of Common Stock outstanding.

Net income (loss) per Common Stock – diluted is based on the average number of shares of Common Stock used for the basic earnings per share calculation, adjusted for the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method and if-converted

method, as applicable.

Net income (loss) attributable to Common Stockholders – diluted is adjusted for the impact of changes in the fair value of the Public Warrants and Private Placement Warrants, to the extent they are dilutive.

Note 20 – Net (Loss) Income Per Share

Basic and diluted net (loss) income per share of Common Stock is calculated in accordance with ASC 260, Earnings per share.

Net (loss) income per Common Stock – basic is calculated by dividing net (loss) income attributable to Common Stockholders by the weighted-average shares of Common Stock outstanding.

Net (loss) income per Common Stock – diluted is based on the average number of shares of Common Stock used for the basic earnings per share calculation, adjusted for the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method and if-converted method, as applicable.

Net (loss) income attributable to Common Stockholders – diluted is adjusted for the impact of changes in the fair value of the Public Warrants and Private Placement Warrants, to the extent they are dilutive.

Earnings per share calculations for all periods prior to the Closing have been retrospectively adjusted by the Exchange Ratio for the equivalent number of shares outstanding immediately after the Closing to effect the reverse recapitalization.

Subsequent to the Closing, net income (loss) per share is calculated based on the weighted average number of Common Stock outstanding.

The following table sets forth the computation of the Company’s basic and diluted earnings (loss) per share:

Subsequent to the Closing, net (loss) income per share is calculated based on the weighted average number of Common Stock outstanding.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

The following table sets forth the computation of the Company’s basic and diluted (loss) income per share:

For the Three Months Ended

June 30, For the Six Months Ended

(in USD, except share data) 2023 2022 2023 2022

Numerator—basic and diluted

Net loss $ ( 19,021,602 ) $ ( 4,562,875 ) $ ( 63,706,540 ) $ ( 19,435,884 )

Series A Preferred Stock—adjustment for deemed dividend upon Closing — — ( 48,300,000 ) —

Legacy Bridger Series A Preferred Shares—adjustment for redemption, extinguishment and accrued interest — ( 81,323,569 ) — ( 85,663,336 )

Legacy Bridger Series C Preferred Shares - adjustment to maximum redemption value — ( 191,240,782 ) — ( 191,240,782 )

Series A Preferred Stock—adjustment to eliminate 50% multiplier — — 156,362,598 —

Series A Preferred Stock—adjustment to maximum redemptions value ( 5,805,582 ) — ( 10,080,022 ) —

Net income (loss) attributable to Common Stockholders – basic and diluted

( 19,212,776 )

Net (loss) income attributable to Common Stockholders – basic and diluted $ ( 24,827,184 ) $ ( 277,127,226 ) $ 34,276,036 $ ( 296,340,002 )

Denominator—basic

3 unchanged sentences

Weighted average vested restricted stock units outstanding 2,400,354 — 2,095,337 —

Weighted average Class A Common Stock outstanding - bonus paid to executives 307,572 — 154,636 —

Weighted average Common Stock outstanding—basic 45,388,892 38,770,646 44,443,930 38,770,646

3 unchanged sentences

Series A Preferred Stock — — 31,158,962 —

Unvested Restricted Stock Units — — 612,940 —

Unvested Legacy Bridger Incentive Units — — 236,944 —

1 unchanged sentence

Weighted average Common Stock outstanding—diluted 45,388,892 38,770,646 77,199,129 38,770,646

Basic and diluted net income (loss) per share

Basic net income (loss) per Common Stock

Diluted net income (loss) per Common Stock

Basic and diluted net (loss) income per share

Basic net (loss) income per Common Stock $ ( 0.55 ) $ ( 7.15 ) $ 0.77 $ ( 7.64 )

Diluted net (loss) income per Common Stock $ ( 0.55 ) $ ( 7.15 ) $ 0.44 $ ( 7.64 )

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

following table summarizes the potentially dilutive common shares that were excluded from diluted net loss per share computations because the effect would have been anti-dilutive (in thousands):

The following table summarizes the potentially dilutive common shares that were excluded from diluted net loss (income) per share computations because the effect would have been anti-dilutive (in thousands):

For the Three Months Ended

Shares excluded from diluted net income (loss) per share

June 30, For the Six Months Ended

2023 2022 2023 2022

Shares excluded from diluted net (loss) income per share

Series A Preferred Stock 315,789 — — —

Legacy Series C Preferred Shares — 315,789 — 315,789

Unvested Restricted Stock Units 6,400,892 — — —

2 unchanged sentences

Unvested Legacy Bridger Incentive Units 233,324 323,232 — 323,232

Sponsor Earnout Shares 855,000 — — —

Note 21 – Stockholders’ Deficit

For periods prior to the Closing, Legacy Bridger had Class A, Class B, Class C and Class D Common shares.

As described in “Note 1—Organization and Basis of Presentation,”

on January 24, 2023, we consummated the Reverse Recapitalization between Jack Creek Investment Corporation and Legacy Bridger.

As described in “Note 1—Organization and Basis of Presentation,” on January 24, 2023, we consummated the Reverse Recapitalization between Jack Creek Investment Corporation and Legacy Bridger.

Subsequent to the Closing, the Company’s Common Stock is the only authorized and issued class of common stock.

1 unchanged sentence

Legacy Bridger had 30,000,000 Class A Common Shares issued and outstanding as of December 31, 2022.

The holders of these shares were

one vote for each share held of record on all matters submitted to a vote of our shareholders.

The holders of these shares were entitled to one vote for each share held of record on all matters submitted to a vote of our shareholders.

These Class A Common Shares were issued to ElementCompany, LLC.

Legacy Bridger had

Class B Common Shares issued and outstanding as of December 31, 2022 and 2021.

The holders of these shares were entitled to

one vote for each share held of record on all matters submitted to a vote of our shareholders.

Legacy Bridger had 243,871

Class C Common Shares issued and outstanding as of December 31, 2022.

Legacy Bridger also had

606,061 shares of Class D Common Shares issued and outstanding as of December 31, 2022.

Legacy Bridger had 9,756,130 Class B Common Shares issued and outstanding as of December 31, 2022 and 2021.

The holders of these shares were entitled to one vote for each share held of record on all matters submitted to a vote of our shareholders.

Legacy Bridger had 243,871 Class C Common Shares issued and outstanding as of December 31, 2022.

Legacy Bridger also had 606,061 shares of Class D Common Shares issued and outstanding as of December 31, 2022.

The Class C and Class D shares were non-voting shares.

The voting power of Legacy Bridger followed the structure of the elected Board members with 3 designees from the holders of Class

A Common Shares and 2 designees from the holders of Class B Common Shares.

This was planned to remain in place while the holders of Class B Common Shares in aggregate held at least

of the common shares outstanding and prior to any initial public offering, at which point voting power would change, based on the relevant shares outstanding.

The voting power of Legacy Bridger followed the structure of the elected Board members with 3 designees from the holders of Class A Common Shares and 2 designees from the holders of Class B Common Shares.

This was planned to remain in place while the holders of Class B Common Shares in aggregate held at least 10 % of the common shares outstanding and prior to any initial public offering, at which point voting power would change, based on the relevant shares outstanding.

Bridger Common Stock

In connection with the Reverse Recapitalization, the Company issued 43,769,290 shares of Common Stock, of which 39,081,744 shares were issued to Legacy Bridger Common shareholders, 2,084,357 shares were issued to the public shareholders of JCIC and 2,603,189 shares were issued to JCIC Sponsor and independent directors of JCIC upon Closing.

Of the shares issued to Legacy Bridger Common shareholders and JCIC Sponsor, 233,323 and 855,000 shares are subject to continuing vesting conditions, respectively.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

Bridger Common Stock

In connection with the

Reverse Recapitalization

, the Company issued

43,769,290 shares of Common Stock, of which

shares were issued to Legacy Bridger Common shareholders,

2,084,357 shares were issued to the public shareholders of JCIC and

shares were issued to JCIC Sponsor and independent directors of JCIC upon Closing.

Of the shares issued to Legacy Bridger Common shareholders and JCIC Sponsor,

233,323 and 855,000 shares are subject to continuing vesting conditions, respectively.

Holders of Common Stock are entitled to full economic rights, including the right to receive dividends when and if declared by the Board, subject to any statutory or contractual restrictions of the payment of dividends and any restrictions on the payment of dividends imposed by the vesting conditions of the unvested Common Stock.

Each holder of

Common Stock is entitled to

one vote for each Common Stock held.

Each holder of Common Stock is entitled to one vote for each Common Stock held.

Note 22 – Revision of Previously Issued Financial Statements

The Company identified an immaterial error in its previously issued annual and interim financial statements.

The error relates to accounting for the freestanding derivative instrument further described in the “Note 10 – Interest Rate Swap and Freestanding Derivative,”

affecting annual financial statements as of and for the year ended December 31, 2022 and interim financial statements as of and for the six months ended June 30, 2022 and as of and for the nine months ended September 30, 2022.

The error relates to accounting for the freestanding derivative instrument further described in the “Note 10 – Interest Rate Swap and Freestanding Derivative,” affecting annual financial statements as of and for the year ended December 31, 2022 and interim financial statements as of and for the six months ended June 30, 2022 and as of and for the nine months ended September 30, 2022.

The impact of the error to prior periods’ financial statements were determined to be quantitatively and qualitatively immaterial.

In order to improve the consistency and comparability of the financial statements, the Company has revised its previously issued annual and interim financial statements to correct the

In order to improve the consistency and comparability of the financial statements, the Company has revised its previously issued annual and interim financial statements to correct the error.

The below tables present line items for prior period impacted financial statements that have been affected by the following error, referred to as the “Revision”:

an error in the accounting for a freestanding instrument which requires separate accounting under ASC 815, Derivatives and Hedging

related to Legacy Bridger Series C Preferred Shares’ features.

(i) an error in the accounting for a freestanding instrument which requires separate accounting under ASC 815, Derivatives and Hedging related to Legacy Bridger Series C Preferred Shares’ features.

As of December 31, 2022

As Previously

Reported Impact of

Revision As Revised

Balance Sheets:

Total assets $ 305,978,901 $ — $ 305,978,901

Accrued expenses and other current liabilities 16,483,289 2,186,283 18,669,572

3 unchanged sentences

Accumulated deficit ( 413,118,060 ) ( 2,186,283 ) ( 415,304,343 )

( 413,118,060

( 415,304,343

Total members’ deficit ( 411,435,655 ) ( 2,186,283 ) ( 413,621,938 )

( 411,435,655

( 413,621,938

Total liabilities, mezzanine equity and members’ deficit $ 305,978,901 $ — $ 305,978,901

1 unchanged sentence

As Previously

Reported Impact of

Revision As Revised

Statements of Operations:

Interest expense $ ( 20,017,177 ) $ ( 2,709 ) $ ( 20,019,886 )

Net loss $ ( 42,121,959 ) $ ( 2,709 ) $ ( 42,124,668 )

Legacy Bridger Series C Preferred Shares adjustment for maximum redemption value ( 200,505,236 ) ( 2,183,574 ) ( 202,688,810 )

( 200,505,236

( 202,688,810

Net loss attributable to common shareholders $ ( 328,290,531 ) $ ( 2,186,283 ) $ ( 330,476,814 )

( 328,290,531

( 330,476,814

Net loss per share attributable to common shareholders – basic and diluted $ ( 8.15 ) $ ( 0.05 ) $ ( 8.20 )

5 unchanged sentences

As Previously

Reported Impact of

Revision As Revised

Statements of Members’ Equity:

Legacy Bridger Series C Preferred Shares adjustment for maximum redemption value $ ( 200,505,236 ) $ ( 2,183,574 ) $ ( 202,688,810 )

( 200,505,236

( 202,688,810

Net loss ( 42,121,959 ) ( 2,709 ) ( 42,124,668 )

Accumulated deficit ( 413,118,060 ) ( 2,186,283 ) ( 415,304,343 )

( 413,118,060

( 415,304,343

Accumulated other comprehensive income 1,678,497 — 1,678,497

Total members’ deficit $ ( 411,435,655 ) $ ( 2,186,283 ) $ ( 413,621,938 )

( 411,435,655

( 413,621,938

For the year ended December 31, 2022

As Previously

Reported Impact of

Revision As Revised

Statements of Cash Flows:

Cash Flows from Operating Activities:

Net loss $ ( 42,121,959 ) $ ( 2,709 ) $ ( 42,124,668 )

Change in fair value of freestanding derivative — 2,709 2,709

5 unchanged sentences

As Previously

Reported Impact of

Revision As Revised

Balance Sheets:

Total assets $ 320,554,139 $ — $ 320,554,139

Accrued expenses and other current liabilities 12,355,584 2,124,265 14,479,849

3 unchanged sentences

Accumulated deficit ( 390,307,424 ) ( 2,124,265 ) ( 392,431,689 )

( 390,307,424

( 392,431,689

Total members’ deficit ( 388,839,892 ) ( 2,124,265 ) ( 391,036,037 )

( 388,839,892

( 391,036,037

Total liabilities, mezzanine equity and members’ deficit $ 320,554,139 $ — $ 320,554,139

5 unchanged sentences

As Previously

Reported Impact of

Revision As Revised

Statements of Operations:

Interest expense $ ( 13,052,438 ) $ 59,309 $ ( 12,993,129 )

Net loss $ ( 25,117,707 ) $ 59,309 $ ( 25,058,398 )

Legacy Bridger Series C Preferred Shares adjustment for maximum redemption value ( 194,700,545 ) ( 2,183,574 ) ( 196,884,119 )

( 194,700,545

( 196,884,119

Net loss attributable to common shareholders $ ( 305,481,588 ) $ ( 2,124,265 ) $ ( 307,605,853 )

( 305,481,588

( 307,605,853

Net loss per share attributable to common shareholders – basic and

Net loss per share attributable to common shareholders – basic and diluted $ ( 7.58 ) $ ( 0.06 ) $ ( 7.64 )

For the nine months ended September 30, 2022

As Previously

Reported Impact of

Revision As Revised

Statements of Members’ Equity:

Legacy Bridger Series C Preferred Shares adjustment for maximum

redemption value

( 194,700,545

( 196,884,119

Legacy Bridger Series C Preferred Shares adjustment for maximum redemption value $ ( 194,700,545 ) $ ( 2,183,574 ) $ ( 196,884,119 )

Net loss ( 25,117,707 ) 59,309 ( 25,058,398 )

Accumulated deficit ( 390,307,424 ) ( 2,124,265 ) ( 392,431,689 )

( 390,307,424

( 392,431,689

Total members’ deficit $ ( 388,839,892 ) $ ( 2,124,265 ) $ ( 390,964,157 )

( 388,839,892

( 390,964,157

For the nine months ended September 30, 2022

As Previously

Reported Impact of

Revision As Revised

Statements of Cash Flows:

Cash Flows from Operating Activities:

Net loss $ ( 25,117,707 ) $ 59,309 $ ( 25,058,398 )

Change in fair value of freestanding derivative — ( 59,309 ) ( 59,309 )

5 unchanged sentences

As Previously

Reported Impact of

Revision As Revised

Balance Sheets:

Total assets $ 309,603,293 $ — $ 309,603,293

Accrued expenses and other current liabilities 10,359,417 2,183,574 12,542,991

3 unchanged sentences

Accumulated deficit ( 378,984,493 ) ( 2,183,574 ) ( 381,168,067 )

( 378,984,493

( 381,168,067

Total members’ deficit ( 377,976,015 ) ( 2,183,574 ) (380,159,589)

( 377,976,015

( 380,159,589

Total liabilities, mezzanine equity and members’ deficit $ 309,603,293 $ — $ 309,603,293

5 unchanged sentences

As Previously

Reported Impact of

Revision As Revised

Statements of Operations:

Net loss $ ( 19,435,884 ) $ — $ ( 19,435,884 )

Legacy Bridger Series C Preferred Shares adjustment for maximum redemption value ( 189,057,208 ) ( 2,183,574 ) ( 191,240,782 )

( 189,057,208

( 191,240,782

Net loss attributable to common shareholders $ ( 294,156,428 ) $ ( 2,183,574 ) $ ( 296,340,002 )

( 294,156,428

( 296,340,002

Net loss per share attributable to common shareholders – basic and diluted $ ( 7.30 ) $ ( 0.06 ) $ (7.36)

1 unchanged sentence

As Previously

Reported Impact of

Revision As Revised

Statements of Members’ Equity:

Legacy Bridger Series C Preferred Shares adjustment for maximum redemption value $ ( 189,057,208 ) $ ( 2,183,574 ) $ ( 191,240,782 )

( 189,057,208

( 191,240,782

Net loss ( 19,435,884 ) — ( 19,435,884 )

Accumulated deficit ( 378,984,493 ) ( 2,183,574 ) ( 381,168,067 )

( 378,984,493

( 381,168,067

Accumulated other comprehensive income 1,008,478 — 1,008,478

Total members’ deficit $ ( 377,976,015 ) $ ( 2,183,574 ) $ ( 380,159,589 )

( 377,976,015

( 380,159,589

Note 23 – Subsequent Events

The Company evaluated its activities through the date of the filing of the Unaudited Condensed Consolidated Financial Statements.

On April 7, 2023, the Company sold one of its five Twin Commander surveillance platforms for $ 0.7 million.

On July 21, 2023, we entered into a Purchase and Sale Agreement (the “Purchase Agreement”), through our subsidiary Bridger Bighorn, LLC, to acquire Big Horn Airways, Inc., for a total purchase price of $ 39.25 million, with $ 14.75 million payable in unregistered shares of Bridger’s Common Stock, and the remainder payable in cash which may be adjusted pursuant to the terms of the Purchase Agreement, including for Bighorn’s cash, indebtedness, and net working capital as of the closing.

The number of shares of Common Stock issuable to the sellers at closing will be determined based upon a 60 -day volume-weighted average per-share price (VWAP) of Bridger’s Common Stock, consisting of the 30 consecutive trading days ending on the trading day immediately preceding July 21, 2023 and the 30 consecutive trading days beginning on July 21, 2023.

Consummation of the transaction is subject to satisfaction or waiver of customary closing conditions including raising cash and regulatory approvals.

The Common Stock consideration will be subject to transfer restrictions for a three-year period post-closing, with 1/36th of the total shares of Common Stock issued to the sellers vesting each month over such three-year period.

The Purchase Agreement also provides Sellers with customary resale registration rights with respect to their Common Stock consideration.

Consummation of the Transaction is subject to the satisfaction or waiver of customary closing conditions and is expected to occur on or before September 22, 2023;

however, if Bridger has not paid the cash consideration by such date, the closing date will automatically be extended to December 31, 2023.

The Purchase Agreement may be terminated under certain customary and limited circumstances at any time prior to the closing, including by mutual written consent, and will automatically be terminated if the closing does not occur on or before January 31, 2024.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

The Purchase Agreement contains customary representations, warranties, covenants, and post-closing indemnification obligations of the parties thereto.

The Sellers have agreed to certain customary non-competition and non-solicitation covenants for a period of five years following the closing.

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-Q

Item 1. Financial Statements