What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-20 compared with 2023-03-20 · 1083 added, 998 removed, 324 unchanged (87% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

BRIDGER AEROSPACE GROUP HOLDINGS, LLC

(PREDECESSOR TO BRIDGER AEROSPACE

GROUP HOLDINGS, INC.)

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID 173 )

Consolidated Balance Sheets as of December 31, 2023 and 2022

1 unchanged sentence

Consolidated Statements of Comprehensive Loss for the years ended December 31, 2023 and 2022

Consolidated Statements of Members Deficit for the years ended December 31, 2022 and 2021

Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2023 and 2022

Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022

1 unchanged sentence

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and the Board of Directors of

Bridger Aerospace

Group Holdings, Inc.

Stockholders and the Board of Directors of

Bridger Aerospace Group Holdings, Inc.

Belgrade, Montana

Opinion on the

Financial Statements

We have audited the accompanying consolidated balance sheets of Bridger Aerospace Group Holdings, LLC (the Company)

as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, members deficit, and cash flows for each of the two years in the period ended December 31, 2022, and the related notes

(collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of

its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Bridger Aerospace Group Holdings, Inc.

(the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, stockholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations, operating cash flow deficits, debt covenant violations, and insufficient liquidity to fund its operations that raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 1.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the

responsibility of the Companys management.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight

Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the

financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ Crowe LLP

served as the Companys auditor since 2022.

We have served as the Company’s auditor since 2022.

Atlanta, Georgia

March 20, 2024

BRIDGER AEROSPACE GROUP HOLDINGS, LLC

(PREDECESSOR TO BRIDGER AEROSPACE GROUP HOLDINGS, INC.)

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(All amounts in U.S.

(In thousands, except per share amounts)

As of December 31,

3 unchanged sentences

Investments in marketable securities 1,009 54,980

Accounts receivable

Accounts and note receivable 4,113 29

Aircraft support parts 488 1,761

4 unchanged sentences

Intangible assets, net 1,730 208

Goodwill 13,163 2,458

Other noncurrent assets 1

LIABILITIES, MEZZANINE EQUITY AND MEMBERS DEFICIT

Total assets $ 273,470 $ 305,979

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT

Current liabilities:

Accounts payable 2

$ 3,978 $ 3,170

Accrued expenses and other current liabilities 3

right-of-use current liability

Current portion of Series B Preferred shares

17,168 18,670

Operating right-of-use current liability 4

Current portion of long-term debt, net of debt issuance costs 2,099 2,446

1 unchanged sentence

Long-term accrued expenses and other noncurrent liabilities 10,777 46

right-of-use noncurrent liability

Long-term debt, net of debt issuance

Operating right-of-use noncurrent liability 5

Long-term debt, net of debt issuance costs 6

204,585 205,471

Total liabilities 246,539 230,579

1 unchanged sentence

MEZZANINE EQUITY

Series A Preferred shares, $0.001 par value;

10,500,000 shares authorized, issued and outstanding

at December 31, 2021

Series C Preferred shares, $0.001 par value;

315,789.473684 shares authorized, issued and

outstanding at December 31, 2022

MEMBERS DEFICIT

Series A Preferred Stock, $ 0.0001 par value;

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

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

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

STOCKHOLDERS’ DEFICIT

Common Stock, $ 0.0001 par value;

1,000,000,000 shares authorized;

44,776,926 shares issued and outstanding at December 31, 2023;

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

Additional paid-in capital 84,771 —

Accumulated deficit ( 413,672 ) ( 415,304 )

Accumulated other comprehensive income 987 1,678

Total members deficit

Total liabilities, mezzanine equity and members deficit

Includes related party debt of $10,000,000 for the 2022 taxable industrial revenue bond.

Total stockholders’ deficit ( 327,909 ) ( 413,622 )

Total liabilities, mezzanine equity, and stockholders’ deficit $ 273,470 $ 305,979

1 Includes related party operating lease right-of-use assets of $ 6.3 million as of December 31, 2023 .

2 Includes related party accounts payable of $ 0.1 million and $ 0.3 million as of December 31, 2023 and 2022, respectively.

3 Includes related party accrued interest expense of $ 0.4 million as of December 31, 2023 and 2022.

4 Includes related party operating lease right-of-use current liabilities of $ 1.7 million as of December 31, 2023.

5 Includes related party operating lease right-of-use noncurrent liabilities of $ 4.6 million as of December 31, 2023.

6 Includes related party debt of $ 10.0 million as of December 31, 2023 and 2022.

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

BRIDGER AEROSPACE GROUP HOLDINGS, LLC

(PREDECESSOR TO BRIDGER AEROSPACE GROUP HOLDINGS, INC.)

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(All Amounts in U.S.

(In thousands, except per share amounts)

For the years ended December 31,

$ 66,708 $ 46,388

Cost of revenues:

Flight operations 2

24,412 18,762

Maintenance 16,928 15,124

Total cost of revenues 41,340 33,886

Gross income 25,368 12,502

Selling, general and administrative expense 82,863 35,128

Operating (loss) income

Operating loss ( 57,495 ) ( 22,626 )

Interest expense 3

Series C Preferred shares adjustment to maximum redemption value

Series A Preferred shares adjustment for redemption, extinguishment, and accrued interest

Net loss attributable to common shareholders basic and diluted

Net loss per share attributable to common shareholders basic and diluted

Weighted-average shares outstanding basic and diluted

Includes related party interest of approximately $517,000 for the 2022 taxable industrial revenue bond.

( 23,218 ) ( 20,020 )

Other income 3,053 521

Loss before income taxes ( 77,660 ) ( 42,125 )

Income tax benefit 302 —

Net loss $ ( 77,358 ) $ ( 42,125 )

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

Series A Preferred Stock—adjustment to eliminate 50% multiplier 156,363 —

Series A Preferred Stock—adjustment to maximum redemptions value ( 22,181 ) —

Legacy Bridger Series A Preferred Shares—adjustment for redemption, extinguishment and accrued interest — ( 85,663 )

Legacy Bridger Series C Preferred Shares - adjustment to maximum redemption value — ( 202,689 )

Net income (loss) attributable to Common stockholders - basic and diluted $ 8,524 $ ( 330,477 )

Net income (loss) per Common Stock - basic $ 0.19 $ ( 8.20 )

Net income (loss) per Common Stock - diluted $ 0.11 $ ( 8.20 )

Weighted average Common Stock outstanding – basic 45,269,201 40,287,478

Weighted average Common Stock outstanding – diluted 78,908,017 40,287,478

1 Includes related party revenues of $ 0.4 million for the year ended December 31, 2023.

2 Includes related party cost of revenues of $ 1.2 million and $ 0.3 million for the years ended December 31, 2023 and 2022, respectively.

3 Includes related party interest of $ 1.2 million and $ 0.4 million for the years ended December 31, 2023 and 2022, respectively.

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

BRIDGER AEROSPACE GROUP HOLDINGS, LLC

(PREDECESSOR TO BRIDGER AEROSPACE GROUP HOLDINGS, INC.)

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(All Amounts in U.S.

(In thousands)

For the years ended December 31,

Other comprehensive income:

Net loss $ ( 77,358 ) $ ( 42,125 )

Other comprehensive loss, net of tax:

Foreign currency translation adjustment ( 42 ) —

Unrealized gain on derivative instruments

Unrealized (loss) gain on derivative instruments ( 290 ) 1,381

Unrealized gain on investments in marketable securities 247 272

Total other comprehensive income

Reclassification of realized gains on investments in marketable securities to earnings ( 606 ) —

Total other comprehensive (loss) income, net of tax ( 691 ) 1,653

Comprehensive loss $ ( 78,049 ) $ ( 40,472 )

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

BRIDGER AEROSPACE GROUP HOLDINGS, LLC

(PREDECESSOR TO BRIDGER AEROSPACE GROUP HOLDINGS, INC.)

CONSOLIDATED STATEMENTS OF MEMBERS DEFICIT

(All Amounts in U.S.

Comprehensive

Income (Loss)

Total Members

Balance at January 1, 2021

Liquidation preference on Series A Preferred shares

Unrealized gain on derivative instruments

Foreign currency translation adjustment

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(In thousands, 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

Share Value Share Value Share Value Share Value Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Stockholders’

Balance at December 31, 2021 10,500,000 $ 1 60,000,000 $ 6 — $ — 39,081,744 $ 4 $ — $ ( 84,844 ) $ 25 $ ( 84,815 )

Series A Preferred shares adjustment for redemption, extinguishment and revaluation

Series C Preferred shares adjustment to maximum redemption value

Net loss — — — — — — — — — ( 42,125 ) — ( 42,125 )

Unrealized gain on derivative instruments — — — — — — — — — — 1,381 1,381

Unrealized gain on investments in marketable securities

Unrealized gain on investments on marketable securities — — — — — — — — — — 272 272

Legacy Bridger Series A Preferred Shares adjustment for redemption, extinguishment and revaluation ( 10,500,000 ) ( 1 ) — — — — — — — ( 85,663 ) — ( 85,663 )

Legacy Bridger Series B Preferred Shares redemption — — ( 60,000,000 ) ( 6 ) — — — — — 6 — 6

Legacy Bridger Series C Preferred shares adjustment to maximum redemption value — — — — 315,789 489,022 — — — ( 202,689 ) — ( 202,689 )

Stock based compensation attributable to Legacy Bridger holders prior to Reverse Recapitalization — — — — — — — — — 11 — 11

Balance at December 31, 2022 — $ — — $ — 315,789 $ 489,022 39,081,744 $ 4 $ — $ ( 415,304 ) $ 1,678 $ ( 413,622 )

Net loss — — — — — — — — — ( 77,358 ) — ( 77,358 )

Foreign currency translation adjustment — — — — — — — — — — ( 42 ) ( 42 )

Stock based compensation

Unrealized loss on derivative instruments — — — — — — — — — — ( 290 ) ( 290 )

Unrealized gain on investments in marketable securities — — — — — — — — — — 247 247

Reclassification of realized gains on investments in marketable securities to earnings — — — — — — — — — — ( 606 ) ( 606 )

Effect of the Closing — — — — — ( 156,363 ) 4,687,546 1 52,085 78,990 — 131,076

Series A Preferred Stock adjustment to maximum redemption value — — — — — 22,181 — — ( 22,181 ) — — ( 22,181 )

Bonuses paid in Class A Common Stock — — — — — — 736,554 — 3,829 — — 3,829

Class A Common Stock issued in Acquisition — — — — — — 426,531 — 3,242 — — 3,242

Stock based compensation after Reverse Recapitalization — — — — — — 2,268,129 — 47,796 — — 47,796

Balance at December 31, 2023 — $ — — $ — 315,789 $ 354,840 47,200,504 $ 5 $ 84,771 $ ( 413,672 ) $ 987 $ ( 327,909 )

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

BRIDGER AEROSPACE GROUP HOLDINGS, LLC

(PREDECESSOR TO BRIDGER AEROSPACE GROUP HOLDINGS, INC.)

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(All Amounts in U.S.

(In thousands)

For the years ended

Cash Flows from Operating Activities:

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

Loss on sale of fixed assets

Net loss $ ( 77,358 ) $ ( 42,125 )

Adjustments to reconcile net loss to net cash used in operating activities, net of acquisitions:

Depreciation and amortization 11,089 9,091

Stock-based compensation expense 47,796 9

Impairment of long-lived assets 2,529 —

Amortization of debt issuance costs 968 601

Loss (gain) on extinguishment of debt

Change in fair value of Series A Preferred shares

Change in fair value of Series C Preferred shares embedded derivatives

Accrued interest on Series B Preferred shares

Changes in operating assets and liabilities

Loss on disposal of fixed assets 1,183 1,770

Change in fair value of Warrants ( 267 ) —

Change in fair value of embedded derivative ( 155 ) 1,039

Change in fair value of freestanding derivative 51 3

Change in fair value of earnout consideration 167 —

Realized gain on investments in marketable securities ( 794 ) —

Deferred tax benefit ( 342 ) —

Loss on extinguishment of debt — 845

Change in fair value of Legacy Bridger Series A Preferred Shares — 3,919

Interest accrued on Legacy Bridger Series B Preferred Shares — 3,587

Changes in operating assets and liabilities, net:

Accounts receivable ( 1,085 ) 6

Aircraft support parts 1,273 183

Prepaid expense and other current and non current assets

Prepaid expense and other current and noncurrent assets ( 2,381 ) ( 372 )

Accounts payable, accrued expenses and other liabilities ( 9,482 ) 11,526

Net cash (used in) provided by operating activities

Net cash used in operating activities ( 26,808 ) ( 9,918 )

Cash Flows from Investing Activities:

Investments in construction in progress - aircraft

Investments in construction in progress - buildings

Purchases of marketable securities

Proceeds from sales and maturities of marketable securities 55,406 5,500

Investment in Overwatch Imaging, Inc.

Sale of property, plant and equipment

Purchases of marketable securities ( 999 ) ( 60,207 )

Investment in equity securities ( 4,000 ) —

Purchases of property, plant and equipment 1

Net cash used in investing activities

( 20,738 ) ( 25,582 )

Sale of property, plant and equipment 817 286

Expenditures for capitalized software ( 328 ) —

Issuance of note receivable ( 3,000 ) —

Investments in construction in progress - buildings — ( 9,810 )

Net cash provided by (used in) investing activities 27,158 ( 89,813 )

Cash Flows from Financing Activities:

Contributions from Series A Preferred shares members

Contributions from Series B Preferred shares members

Payment to Series A Preferred shares members

Payment to Series B Preferred shares members

Borrowings from Series C Preferred shares members, net of issuance costs

Costs incurred related to the Closing ( 6,794 ) —

Proceeds from the Closing 3,194 —

Repayments on debt ( 2,201 ) ( 2,036 )

Payment of finance lease liability ( 30 ) ( 27 )

Borrowings from 2022 taxable industrial revenue

Payment to Legacy Bridger Series A Preferred Shares members — ( 236,250 )

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

Borrowings from Legacy Bridger Series C Preferred Shares members, net of issuance costs — 288,517

Borrowings from 2022 taxable industrial revenue bond 2

Extinguishment of 2021 Taxable Industrial Revenue Bond — ( 7,550 )

Borrowings from IPFS insurance loan

Borrowings from various First Interstate Bank vehicle loans

Borrowings from vehicle loans — 202

Payment of debt issuance costs — ( 4,418 )

Payment of offering costs — ( 3,509 )

Repayments on debt

Net cash provided by financing activities

Net cash (used in) provided by financing activities ( 5,831 ) 124,930

Effects of exchange rate changes ( 42 ) —

4 unchanged sentences

Cash and cash equivalents – end of the year $ 22,956 $ 30,163

Supplemental cash flow information

Interest paid 2

Deferred offering costs included in accrued expenses and other current liabilities

Fixed assets in accounts payable

Adjustment of Series C Preferred shares to maximum redemption value

Includes related party debt of $10,000,000 for the 2022 taxable industrial revenue bond.

Includes related party interest paid of approximately $128,000 for the 2022 taxable industrial revenue bond.

1 Includes purchase of related party aircraft of $ 3.9 million for the year ended December 31, 2022.

2 Includes related party debt of $ 10.0 million for the year ended December 31, 2022.

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

Nature of Business

Aerospace Group Holdings, LLC and its subsidiaries (Bridger, the Company, we, us or our) provides aerial wildfire management, relief and suppression and delivering firefighting services

using next generation technology and sustainable and environmentally safe firefighting methods.

The Company was formed on

November 20, 2018 and registered in the State of Delaware.

The legal name of the Company was officially changed from ElementCompany Operations, LLC to Bridger Aerospace Group Holdings, LLC through an amendment with the State of Delaware,

effective January 1, 2020.

As of December 31, 2022, the Company owns 17 aircraft, including 5 Twin Commander surveillance

platforms, 4 Quest Kodiaks, 5 Viking CL415EAFs, 2 Aurora eVTOL Skiron and 1 Pilatus PC-12.

Bridger Aerospace Group Holdings, Inc.

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.

The Company was formed on November 20, 2018 and registered in the State of Delaware.

The legal name of the Company was officially changed from ElementCompany Operations, LLC to Bridger Aerospace Group Holdings, LLC through an amendment with the State of Delaware, effective January 1, 2020.

As of December 31, 2023, the Company owns fifteen aircraft, including six Viking CL-415EAFs (“Super Scoopers”), four Twin Commander surveillance platforms (“Twin Commanders”), four Daher Kodiaks 100s (“Daher Kodiaks”), and one Pilatus PC-12 (“Pilatus”).

Liquidity and Going Concern

In accordance with Accounting Standards Codification (“ASC”) Topic 205-40, Going Concern , the Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within 12 months after the date that these consolidated financial statements are issued.

This evaluation includes considerations related to the covenants contained in the Company’s loan agreements as well as the Company’s liquidity position overall.

As detailed in Note 16 - Long-Term Debt , the Company’s municipal bond issuances by Legacy Bridger that closed in July and August 2022 (the “Series 2022 Bonds”) contain customary covenants and restrictions, including financial and non-financial covenants.

The financial covenants require the Company to maintain a debt service coverage ratio (“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 to maintain liquidity of $ 8.0 million in the form of unrestricted cash or investments (excluding margin accounts and retirement accounts) at all times.

Failure to comply with these covenants could result in an event of default, subject to certain exceptions.

For the year ended December 31, 2023, the Company had an operating loss of $ 57.5 million, net loss of $ 77.4 million and cash flow used in operating activities of $ 26.8 million.

In addition, as of December 31, 2023, the Company had unrestricted cash or investments of $ 24.0 million.

The Company is not in compliance with the DSCR covenant as of December 31, 2023 and management anticipates the Company to continue to not be in compliance with the DSCR covenant at future quarterly measurement periods in the next 12 months, primarily attributable to the seasonal nature of our business and a less intense 2023 wildfire season.

Although the Company is in compliance with the $ 8.0 million minimum liquidity requirement as of December 31, 2023, based on projected cash use, management anticipates that without additional cash funding the Company will not have sufficient cash on hand to fund operations, including $ 18.4 million of required interest payments associated with the Series 2022 Bonds, or to comply with the minimum liquidity covenant within the next 12 months, or until the Company begins to collect cash from its seasonal firefighting operations in 2024.

The Series 2022 Bonds agreements provide that, with regard to covenant violations, other than non-payment of principal or interest, no event of default shall be deemed to have occurred so long as a reasonable course of action to remedy a violation commences within 30 days of written notice of non-compliance from the trustee and management diligently prosecutes the remediation plan to completion.

Management consulted with bond counsel on the impact of covenant violations and proactively developed a cost reduction plan, and began implementing the plan in November 2023, to help remedy the anticipated covenant breaches in 2024.

However, this plan is in progress and there is no assurance that management will be able diligently prosecute the remediation plan to completion.

In addition to the cost reduction measures implemented in November 2023, the Company plans to seek additional cash funding through a number of potential avenues, including additional sales of our common stock through our at-the-market offering, described in further detail in Note 24 - Subsequent Events, and issuing additional shares of common stock pursuant to our shelf registration statement.

These additional sources of working capital are not currently assured, and consequently do not sufficiently mitigate the risks and uncertainties disclosed above.

Our ability to raise additional funds will depend on, among other factors, financial, economic and market conditions, many of which are outside of our control and there can be no assurance that we will be able to obtain additional funding on satisfactory terms or at all.

Current and anticipated noncompliance with financial covenants and uncertainty regarding the Company’s ability to diligently prosecute the cost reduction plan and to raise additional cash funding for operations, including required interest payments associated with the Series 2022 Bonds, raise substantial doubt about the Company’s ability to continue as a going concern within 12 months following the issuance date of the consolidated financial statements as of and for the period ended December 31, 2023.

These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

Basis of Presentation

The consolidated financial statements have been prepared in accordance with U.S.

generally accepted accounting

principles (US GAAP).

generally accepted accounting principles (“GAAP”).

The consolidated financial statements include the financial statements of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest.

Business Combination

January 24, 2023, (the Closing Date), Jack Creek Investment Corp (JCIC) completed the business combination (the Business Combination or the Closing) with the Company 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 the Company became a wholly owned subsidiary of a new public entity that was

renamed Bridger Aerospace Group Holdings, Inc.

(New Bridger).

The Company had $30,162 thousand and $13,689 thousand of cash and cash equivalents as of December 31, 2022 and 2021,

respectively.

As of December 31, 2022, the Company had $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.

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 December 31, 2022 the Company has $2,446 thousand of current portion of long-term debt, net of debt issuance

As of December 31, 2022, future contractual payments related to the purchase of aircraft and the construction of the third hangar are $9,098 thousand and $3,756 thousand, respectively, 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 consolidated financial statements were available to be issued.

As of February 28, 2023, the Company has cash and cash equivalents of $16,819 thousand (unaudited), restricted cash of

$12,365 thousand (unaudited) and investments in debt securities classified as available-for-sale of $32,199 thousand (unaudited).

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 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 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 $ 11.00 at the time of conversion.

Other related events occurred in connection with the Reverse Recapitalization, are summarized below:

• 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.

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

• 43,769,290 shares of Common Stock;

• 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;

• 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 $ 10.3 million as of the Closing.

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

Under this method of accounting, JCIC was treated as the “acquired” company for financial reporting purposes.

Accordingly, for accounting purposes, the financial statements of Bridger represent a continuation of the financial statements of Legacy Bridger with the Reverse Recapitalization treated as the equivalent of Legacy Bridger issuing stock for the net assets of JCIC, accompanied by a recapitalization.

The net assets of JCIC will be stated at historical cost, with no goodwill or other intangible assets recorded.

Operations prior to the Reverse Recapitalization will be those of Legacy Bridger in future reports of Bridger.

Legacy Bridger has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

• Legacy Bridger equity holders have a relative majority of the voting power of Bridger;

• Bridger’s board of directors (the “Board”) has eleven 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 are responsible for the day-to-day operations of Bridger;

• Bridger assumed Legacy Bridger’s name of business;

• The strategy and operations of Bridger continue Legacy Bridger’s former strategy and operations;

• The Reverse Recapitalization created an operating public company, with management continuing to use Legacy Bridger operations to grow the business.

The Sponsor Earnout Shares are determined to be equity classified instruments of Bridger and the Public Warrants and Private Placement Warrants are determined to remain liability classified instruments upon the Closing.

In accordance with guidance applicable to these circumstances, the equity structure has been recast in all comparative periods up to the Closing to reflect the number of shares of Common Stock issued to Legacy Bridger’s stockholders in connection with the Reverse Recapitalization.

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 recast 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.”

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

Company consolidates those entities in which it, through the existing owners, has control over significant operating, financial or investing decisions of the entity.

All significant intercompany balances and transactions have been eliminated in

consolidation.

The Company consolidates those entities in which it, through the existing owners, has control over significant operating, financial or investing decisions of the entity.

All significant intercompany balances and transactions have been eliminated in consolidation.

Variable Interest Entities

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.

A variable interest is an investment or other interest that will absorb portions of a VIEs expected losses or receive portions of its expected returns and are contractual, ownership or

pecuniary in nature and that change with changes in the fair value of the entitys net assets.

A reporting entity is the primary beneficiary of a VIE and must consolidate it when that party has a variable interest, or combination of variable

interests, that provide it with a controlling financial interest.

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.

A variable interest is an investment or other interest that will absorb portions of a VIE’s expected losses or receive portions of its expected returns and are contractual, ownership or pecuniary in nature and that change with changes in the fair value of the entity’s net assets.

A reporting entity is the primary beneficiary of a VIE and must consolidate it when that party has a variable interest, or combination of variable interests, that provide it with a controlling financial interest.

A party is deemed to have a controlling financial interest if it meets both of the power and loss/benefits criteria.

The power criterion is the ability to direct the activities of the

VIE that most significantly impact its economic performance.

The power criterion is the ability to direct the activities of the VIE that most significantly impact its economic performance.

The losses/benefits criterion is the obligation to absorb losses from, or right to receive benefits from, the VIE that could potentially be significant to the VIE.

The VIE model requires

an ongoing reconsideration of whether a reporting entity is the primary beneficiary of a VIE due to changes in the facts and circumstances.

For the year ended December 31, 2022 Northern Fire Management Services, LLC (NFMS, LLC) is considered to be a VIE, as it

lacks sufficient equity and is consolidated in the Companys financial statements.

For the year ended December 31, 2021 the following entities were considered to be VIEs, as they lack sufficient equity and are consolidated in the

Companys financial statements:

NFMS, LLC and Mountain Air, LLC (MA, LLC).

For the years ended December 31, 2022 and 2021, NFMS, LLC held immaterial assets and liabilities in its financial statements.

For the years ended

December 31, 2021, MA, LLC held immaterial assets and liabilities in its financial statements.

For the years ended December 31, 2022 and 2021, the following entities were considered to be VIEs but were not consolidated in the 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 (EBC).

Northern Fire Management Services, LLC:

The Company assisted in designing and organizing NFMS, LLC

with a business purpose of employing Canadian aviation professionals for the Company.

A master services agreement exists between NFMS, LLC and the Company, 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 Companys water scooper aircraft.

NFMS, LLC is 50% owned by a member of the executive team, Timothy Sheehy, who is also an owner of the Company and 50% owned

by a Bridger Aerospace Group, LLC (BAG, LLC) employee.

The ownership split is economic only and common control is retained by the ownership of the executive member.

The Company is responsible for the decisions related to all of its

expenditures, which solely relates to payroll.

Based on these facts, it was determined that the Company is the primary beneficiary of NFMS, LLC.

Therefore, NFMS, LLC has been consolidated by the Company.

All intercompany expenses associated with

NFMS, LLC and its service agreement have been eliminated in consolidation.

Mountain Air, LLC:

As of November 7, 2022, MA, LLC

is a wholly-owned subsidiary of Bridger.

Prior to the transfer of their interests to Bridger for $1.00 on November 7, 2022, MA, LLC was owned 50% by Timothy Sheehy, the Chief Executive Officer and, after the Closing, a director of New Bridger,

and 50% by an entity affiliated with Matthew Sheehy, Chairman of Bridger prior to Closing, and after the Closing, a director of New 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 that certain Management Services Agreement (the Aviation Agreement), dated

April 13, 2018, with MA, LLC.

The VIE model requires an ongoing reconsideration of whether a reporting entity is the primary beneficiary of a VIE due to changes in the facts and circumstances.

Northern Fire Management Services, LLC (“NFMS, LLC”):

The Company assisted in designing and organizing NFMS, LLC with a business purpose of employing Canadian aviation professionals to provide services to the Company.

A master services agreement exists between NFMS, LLC and the Company, 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.

NFMS, LLC is 50 % owned by a Canadian citizen, and 50 % owned by Bridger Aerospace Group, LLC (“BAG, LLC”).

NFMS, LLC was determined to be a VIE primarily due to the entity’s lack of sufficient equity investment at risk and the Company was determined to be the primary beneficiary of the VIE primarily attributable to the Company’s responsibility for all decisions related to NFMS, LLC’s expenditures.

Accordingly, NFMS, LLC has been consolidated by the Company for the years ended December 31, 2023 and 2022 and all intercompany expenses associated with NFMS, LLC and its service agreement have been eliminated in consolidation.

For the years ended December 31, 2023 and 2022, NFMS, LLC’s assets and liabilities were immaterial to the Company’s financial statements.

Mountain Air, LLC (“MA, LLC”):

As of November 7, 2022, MA, LLC is 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 Aviations aircraft.

MA, LLC was obligated to operate and maintain the aircraft in accordance with Federal Aviation.

Timothy Sheehy originally conducted aerial operations through MA, LLC before New Bridgers legal organizational structure was put into

place to accommodate Bridgers capital structure and financing, which created the need for the Aviation Agreement and resulting VIE treatment.

MA, LLC had not been previously transferred into the Bridger legal organizational structure due to

the administrative convenience.

The Companys business is generally seasonal, with a significant portion of total revenue occurring during the second and third quarters

of the fiscal year due to the North American fire season.

However, the weather dependency and seasonal fluctuation in the need to fight wildfires based upon location and the varying intensity of the fire season may lead our operating results to

fluctuate significantly from quarter to quarter and year to year.

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.

MA, LLC was determined to be a VIE primarily due to the entity’s lack of sufficient equity investment at risk and the Company was determined to be the primary beneficiary of the VIE primarily attributable to the Company’s substantial control.

Accordingly, the Company consolidated MA, LLC for the periods prior to November 7, 2022 and all intercompany expenses associated with MA, LLC and its Aviation Agreement were eliminated in consolidation.

On November 17, 2023, we entered into a series of agreements designed to facilitate the purchase and return to service of four Canadair CL-215T Amphibious Aircraft (the “Spanish Scoopers”) originally awarded to our wholly-owned subsidiary, Bridger Aerospace Europe, S.L.U.

(“BAE”), in September 2023 via a public tender process from the Government of Spain for € 40.3 million.

Under the terms of the agreements, we agreed to sell the entire outstanding equity interest in BAE to MAB and purchase $ 4.0 million of non-voting Class B units of MAB.

We also entered into a services agreement with MAB whereby we will manage the return to service upgrades of the Spanish Scoopers through our wholly-owned Spanish subsidiary, Albacete Aero, S.L., while they are owned and funded by MAB.

The service agreement also provides that we have the right, but not the obligation, to acquire each Spanish Scooper as it is ready to be contracted and returned to service.

The Company assessed both MAB and BAE for variable interest entity accounting under ASC 810-10-15 and determined that MAB is a voting interest entity and BAE is a variable interest entity.

However, neither entity is consolidated in the consolidated financial statements as the Company does not have a controlling financial interest in MAB and the Company is not the primary beneficiary of BAE.

Accordingly, neither of these entities have been consolidated in the consolidated financial statements of the Company for the year ended December 31, 2023.

Refer to “Note 17 – Commitments and Contingencies” included in this Annual Report on Form 10-K for additional details.

The Company’s business is generally seasonal, with a significant portion of total revenue occurring during the second and third quarters of the fiscal year due to the North American fire season.

However, the weather dependency and seasonal fluctuation in the need to fight wildfires based upon location and the varying intensity of the fire season may lead our operating results to fluctuate significantly from quarter to quarter and year to year.

Use of Estimates

The preparation of financial statements in conformity with US GAAP, requires management to make assumptions and estimates that affect the

reported amounts of assets and liabilities, disclosure of gain or loss contingencies as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from their

estimates and such differences could be material to the consolidated financial statements.

The preparation of financial statements in conformity with GAAP, requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities, disclosure of gain or loss contingencies as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from their estimates and such differences could be material to the consolidated financial statements.

Significant items subject to such estimates and assumptions include:

(a) excess and aging aircraft support parts reserves, (b) allowance for

doubtful accounts, (c) useful lives of property, plant and equipment, net (d) impairment of long-lived assets, goodwill and other intangible assets, (e) disclosure of fair value of financial instruments, (f) variable interest

entities, (g) accounting for Series A Preferred shares, Series B Preferred shares and Series C Preferred shares, (h) revenue recognition, (i) estimates and assumptions made in determining the carrying values of goodwill and other

intangible assets and (j) incentive units.

Reclassifications

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 Consolidated Statement of Operations.

The reclassification had

no impact on previously reported net loss or accumulated deficit.

The Company previously presented all subscription costs as Prepaid expenses and other current assets.

Long term subscription costs are now presented as other noncurrent assets on the

Consolidated Balance Sheets.

(a) excess and aging aircraft support parts reserves, (b) allowance for doubtful accounts, (c) useful lives of property, plant and equipment, net, (d) allocation of the purchase price to the fair value of assets acquired and liabilities assumed, (e) impairment of long-lived assets, goodwill and other intangible assets, (f) disclosure of fair value of financial instruments, (g) variable interest entities, (h) accounting for Series A Preferred Stock and Legacy Bridger Series C Preferred Shares, (i) revenue recognition, (j) estimates and assumptions made in determining the carrying values of goodwill, other intangible assets, and contingent consideration and (k) Public Warrants and Private Placement Warrants .

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and all highly liquid, readily convertible investments with a maturity of three months or less.

equivalents are placed primarily in time deposits and money market funds including commercial paper of $29,890 thousand due in three months or less.

The Companys subsidiaries generally maintain cash account balances sufficient to meet

their short-term working capital requirements and periodically remit funds to the parent company to pay intercompany lease, maintenance and other charges.

Cash equivalents are placed primarily in time deposits and money market funds due in three months or less.

The Company’s subsidiaries generally maintain cash account balances sufficient to meet their short-term working capital requirements and periodically remit funds to the parent company to pay intercompany lease, maintenance and other charges.

Substantially all of the Company’s cash is concentrated in a few financial institutions.

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Restricted cash includes cash and cash equivalents that are not readily available for use in the Company’s operating activities.

Company had $12,297 thousand and $3,572 thousand of restricted cash as of December 31, 2022 and 2021, respectively.

Restricted cash consists of proceeds from taxable industrial development revenue bonds under the Committee on Uniform

Securities Identification Procedures (CUSIP) of Gallatin County, issued in August 2022.

The Company had $ 14.0 million and $ 12.3 million of restricted cash as of December 31, 2023 and 2022, respectively.

These funds are held in a demand deposit account or highly rated money market fund.

As of December 31, 2022, the company had

$9,290 thousand in restricted cash related to the CUSIP bond and $3,007 thousand of restricted cash held in escrow.

Investments in

Marketable Securities

Investments in debt securities are classified as available-for-sale and are carried at fair value, with unrealized gains and losses reported as accumulated other comprehensive income (loss).

The Company had $ 14.0 million and $ 9.3 million in restricted cash related to the Series 2022 Bonds and zero and $ 3.0 million of restricted cash held in escrow as of December 31, 2023 and 2022, respectively.

Investments in Marketable Securities

Investments in debt securities are classified as available-for-sale and are carried at fair value, with unrealized gains and losses reported as accumulated other comprehensive income.

Gains and losses are recognized when realized.

Unrealized losses

are evaluated for impairment to determine if the impairment is credit related.

Unrealized losses are evaluated for impairment to determine if the impairment is credit related.

An other-than-temporary credit impairment would be recognized as an adjustment to income.

Gains and losses are determined using the first-in first-out method.

in marketable securities are classified as current assets with short-term maturities of less than one year.

Accounts Receivable

Investments in marketable securities are classified as current assets with short-term maturities of less than one year.

Accounts and Note Receivable

Accounts receivable consist of amounts due from our customers.

The Company maintains an allowance for doubtful accounts equal to the estimated

losses expected to be incurred based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions.

For the years ended December 31, 2022 and 2021, the Company did not record any bad

debt expense as accounts receivable have historically been collected in accordance with the policy and there is no history of write-offs.

Support Parts

Aircraft support parts consist of repairables and expendables that are used for servicing aircraft and support parts

for universal application amongst the aviation fleet.

The Company maintains an allowance for doubtful accounts equal to the estimated losses expected to be incurred based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions.

For the years ended December 31, 2023 and 2022, the Company did not record any bad debt expense as accounts receivable have historically been collected in accordance with the policy and there is no history of write-offs.

Notes receivable consists of a promissory note to pay a specific sum, with interest, within a defined period.

Each reporting period, the Company evaluates the collectability of the outstanding note receivable balance.

If the promissory note is deemed uncollectible, the Company will record the value of the note and the accrued interest as bad debt expense.

For the years ended December 31, 2023 and 2022, the Company did not record any bad debt expense based on the assessment of the receivable.

Aircraft Support Parts

Aircraft support parts consist of repairables and expendables that are used for servicing aircraft and support parts for universal application amongst the aviation fleet.

Aircraft support parts are tracked by serial number and capitalized at cost in the Consolidated Balance Sheets and expensed in the Consolidated Statements of Operations when used in operations.

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Property, plant and equipment are recorded at cost when acquired.

Except for aircraft, engines and rotable parts, depreciation is computed on

the straight-line basis over the estimated useful life of property, plant and equipment and is recorded in Cost of revenues and Selling, general and administrative expense in the Consolidated Statements of Operations.

Depreciation for aircraft,

engines and rotable parts is recorded over the estimated useful life based on flight hours.

Except for aircraft, engines and rotable parts, depreciation is computed on the straight-line basis over the estimated useful life of property, plant and equipment and is recorded in Cost of revenues and Selling, general and administrative expense in the Consolidated Statements of Operations.

Depreciation for aircraft, engines and rotable parts is recorded over the estimated useful life based on flight hours.

The table below summarizes depreciable lives by asset category:

Estimated Useful Life

Aircraft, engines and rotable parts

1,500 6,000 flight hours

Unmanned aerial vehicles

Vehicles and equipment

Aircraft undergo maintenance activities including routine repairs, inspections, part replacements and

overhauls as required by regulatory authorities or manufacturer specifications.

Aircraft, engines and rotable parts 1,500 – 6,000 flight hours

Vehicles and equipment 3 – 5 years

Buildings 40 years

Aircraft undergo maintenance activities including routine repairs, inspections, part replacements and overhauls as required by regulatory authorities or manufacturer specifications.

Costs of routine maintenance of aircraft are expensed as incurred as Cost of revenues in the Consolidated Statements of Operations.

Costs that increase the value of the

aircraft are capitalized as property, plant and equipment, net in the Consolidated Balance Sheets and are depreciated over the assets useful life.

Upon retirement or sale, the property, plant and equipment disposed of and the related accumulated depreciation are removed from the

Consolidated Balance Sheets and any resulting gain or loss is recorded as Selling, general and administrative expense in the Consolidated Statements of Operations.

Interest on long-term debt for the development or manufacturing of Company assets is capitalized to the asset until the asset enters

production or use, and thereafter all interest is charged to expense as incurred.

Costs that increase the value of the aircraft are capitalized as Property, plant and equipment, net in the Consolidated Balance Sheets and are depreciated over the asset’s useful life.

Upon retirement or sale, the property, plant and equipment disposed of and the related accumulated depreciation are removed from the Consolidated Balance Sheets and any resulting gain or loss is recorded as Selling, general and administrative expense in the Consolidated Statements of Operations.

Interest on long-term debt for the development or manufacturing of Company assets is capitalized to the asset until the asset enters production or use, and thereafter all interest is charged to expense as incurred.

Business Combinations

The Company records tangible and intangible assets acquired and liabilities assumed in business combinations under the acquisition method of accounting in accordance with ASC 805, Business Combinations .

Under the acquisition method of accounting, amounts paid for the acquisition are allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition inclusive of identifiable intangible assets.

Acquisition consideration includes contingent consideration with payment terms based on the achievement of certain targets of the acquired business.

The estimated fair value of identifiable assets and liabilities, including intangibles, are based on valuations that use information and assumptions available to management.

The Company allocates any excess purchase price over the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed to goodwill.

Significant management judgments and assumptions are required in determining the fair value of assets acquired and liabilities assumed, particularly acquired intangible assets, including estimated useful lives.

The valuation of purchased intangible assets is based upon estimates of the future performance and discounted cash flows of the acquired business.

Each asset acquired or liability assumed is measured at estimated fair value from the perspective of a market participant.

Contingent consideration represents an obligation of the acquirer to transfer additional assets or equity interests to the seller if future events occur or conditions are met, is recognized when probable and reasonably estimable.

Contingent consideration recognized is included in the initial cost of the assets acquired and recorded in Accrued expenses and other current liabilities and Long-term accrued expenses and other noncurrent liabilities in the Consolidated Balance Sheets.

Subsequent changes in the estimated fair value of contingent consideration are recognized as Selling, general and administrative expenses in the Consolidated Statements of Operations.

Intangible Assets

Intangible assets consist of finite-lived intangible assets acquired through the Company’s historical business combinations and software developed for internal-use.

In accordance with ASC Topic 350-40, Software - Internal-Use Software , the Company capitalizes certain direct costs of developing internal-use software that are incurred in the application development stage, when developing or obtaining software for internal use.

Once the internal use software is ready for its intended use, it is amortized on a straight-line basis over its useful life.

Refer to “Note 11 – Goodwill and Intangible Assets, Net” included in this Annual Report on Form 10-K.

Acquired intangible assets are initially recorded at fair value and subsequently amortized over their useful lives using the straight-line method, which reflects the pattern of benefit, and assumes no residual value.

Intangible assets with definite lives are reviewed for impairment whenever events or circumstances indicate that the carrying value of an asset may not be recoverable.

The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.

If the carrying value is deemed not to be recoverable, an impairment loss is recorded equal to the amount by which the carrying value of the long-lived asset exceeds its fair value.

The remaining estimated useful lives of definite-lived intangible assets are routinely reviewed and, if the estimate is revised, the remaining unamortized balance is amortized over the revised estimated useful life.

Goodwill represents the excess of purchase price over fair value of the net assets acquired in an acquisition.

Other intangible

assets consist of finite-lived intangible assets acquired through the Companys historical business combinations and software developed for internal-use.

In accordance with ASC Topic 350-40, Software - Internal-Use Software (ASC 350-40), the Company capitalizes certain direct costs of developing internal-use software that are incurred in the application development stage, when developing or obtaining software for internal use.

Once the internal use software is ready for its intended use, it is amortized on

a straight-line basis over its useful life.

Refer to Note 8 - Goodwill and Intangible Assets.

The Company tests goodwill for impairment annually as of December 31 or more frequently

if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit or indefinite-lived intangible asset below its carrying value.

Goodwill is tested for impairment at the reporting unit level using a

fair value approach.

The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value, a Step 0 analysis.

If, based on a review of

qualitative factors, it is more likely than not that the fair value of a reporting unit is less than its carrying value the Company performs Step 1 of the goodwill impairment test by comparing the fair value of a reporting unit with its

carrying amount.

Refer to “Note 11 – Goodwill and Intangible Assets, Net” included in this Annual Report on Form 10-K.

Beginning in 2023, the Company assesses goodwill for impairment as of October 1 annually or more frequently upon an indicator of impairment.

Prior to 2023, the Company assessed goodwill for impairment as of December 31 annually or more frequently upon an indicator of impairment.

The change to an October 1 annual goodwill impairment assessment date was made to ensure the completion of the Company’s assessment prior to the end of its annual reporting period, thereby aligning impairment testing procedures with its year-end financial reporting.

Goodwill is tested for impairment at the reporting unit level using a fair value approach.

The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.

If, based on a review of qualitative factors, it is more likely than not that the fair value of a reporting unit is less than its carrying value the Company compares the fair value of a reporting unit with its carrying amount.

The Company determines the fair value of a reporting unit by estimating the present value of expected future cash flows, discounted by the applicable discount rate.

If the carrying value exceeds the fair value, the Company measures

the amount of impairment loss, if any, by comparing the implied fair value of the reporting unit goodwill with its carrying amount, the Step 2 analysis.

If the carrying value exceeds the fair value, the Company measures the amount of impairment loss, if any, by comparing the implied fair value of the reporting unit goodwill with its carrying amount.

No impairment charges have been required.

Intangible Assets

assets are initially recorded at fair value and subsequently amortized over their useful lives using the straight-line method, which reflects the pattern of benefit, and assumes no residual value.

Intangible assets with definite lives are reviewed

for impairment whenever events or circumstances indicate that the carrying value of an asset may not be recoverable.

The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result

from the use and eventual disposition of the asset.

If the carrying value is deemed not to be recoverable, an impairment loss is recorded equal to the amount by which the carrying value of the long-lived asset exceeds its fair value.

The remaining

estimated useful lives of definite-lived intangible assets are routinely reviewed and, if the estimate is revised, the remaining unamortized balance is amortized over the revised estimated useful life.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not

be recoverable.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

If the carrying amount of the asset exceeds its estimated undiscounted net cash flow, excluding interest, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds its fair value.

The Company identified impairment indicators within their investment in Côte-Nord which arose

from the risk that this entity will not be able to meet its initial growth projections.

This facility is currently not in operation and reduced to minimal activity to avoid the obsolescence of its equipment.

In 2021, the facility began the process

of a bankruptcy filing.

In 2021, the Company wrote-off its loan receivable in Selling, general and administrative expense and associated accrued interest in Other income with

Côte-Nord for $414 thousand in the Consolidated Statements of Operations.

This decision was made based on the estimation the loan will not be recoverable given the

Côte-Nords bankruptcy status.

Investments accounted for under the equity method are

recorded based upon the amount of the Companys investment and are adjusted each period for the Companys share of the investees income or loss.

Investments are reviewed periodically for changes in circumstances or the occurrence of

events that suggest an other-than-temporary event where the investment may not be recoverable.

Investments accounted for under the equity method are recorded based upon the amount of the Company’s investment and are adjusted each period for the Company’s share of the investee’s income or loss.

Investments are reviewed periodically for changes in circumstances or the occurrence of events that suggest an other-than-temporary event where the investment may not be recoverable.

Cost Method Investments

The Company holds equity securities without a readily determinable fair value, which are only adjusted for observable price changes in orderly

transactions for the same or similar equity securities or any impairment, totaling $1,000 thousand as of December 31, 2022 and 2021, and are included within Other noncurrent assets in the Companys Consolidated Balance Sheets.

Deferred Offerings Costs

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

the Business Combination, which is to be accounted for as a reverse recapitalization.

These costs will be charged to Members deficit as a reduction of Accumulated deficit generated upon the completion of the Business Combination.

December 31, 2022 the Company recorded $5,800 thousand of deferred offering costs in the Consolidated Balance Sheets.

The Company did not record any deferred offering costs as of December 31, 2021.

The Company holds equity securities without a readily determinable fair value, which are only adjusted for observable price changes in orderly transactions for the same or similar equity securities or any impairment.

As of December 31, 2023 and 2022, the Company had $ 5.0 million and $ 1.0 million of cost method investments included in Other noncurrent assets in the Consolidated Balance Sheets, respectively.

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, which has been accounted for as a reverse recapitalization.

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

As of December 31, 2023, the Company recorded $ 18.0 million to Stockholders’ deficit in the Consolidated Balance Sheets.

For the year ended December 31, 2023, the Company recorded $ 0.5 million to Selling, general and administrative expense in the Consolidated Statements of Operations.

As of December 31, 2022, the Company recorded $ 5.8 million of deferred offering costs in the Consolidated Balance Sheets.

Debt Issuance Costs

Debt issuance costs consist of expenditures associated with obtaining debt financing, principally legal and bank commitment fees.

are deferred and amortized over the term of the related credit arrangements using a method that approximates the effective interest method.

Debt issuance costs are included in the Consolidated Balance Sheets as a direct deduction from the carrying

amount of long-term debt and are included in Interest expense in the Consolidated Statements of Operations.

Such costs are deferred and amortized over the term of the related credit arrangements using a method that approximates the effective interest method.

Debt issuance costs are included in the Consolidated Balance Sheets as a direct deduction from the carrying amount of long-term debt and are included in Interest expense in the Consolidated Statements of Operations.

The payment of debt issuance costs is recorded under financing activities in the Consolidated Statements of Cash Flows.

Fair Value of Financial Instruments

The Company follows guidance in ASC 820, Fair Value Measurement (ASC 820), where fair value is defined as the price that would be

received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Fair value measurements are determined within a framework that establishes a three-tier hierarchy which

maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes.

The Company follows guidance in ASC 820, Fair Value Measurement (“ASC 820”), where fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Fair value measurements are determined within a framework that establishes a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes.

Inputs may be observable or unobservable.

Observable inputs reflect the

assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company.

Unobservable inputs reflect the Companys own assumptions about the assumptions market

participants would use in pricing the asset or liability based on the information available.

ASC 820 classifies the inputs used to

measure these fair values into the following hierarchy:

Level 1 Unadjusted quoted prices in active markets for identical

assets or liabilities.

Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company.

Unobservable inputs reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the information available.

ASC 820 classifies the inputs used to measure these fair values into the following hierarchy:

Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs and quoted prices in active markets for similar assets and liabilities.

Level 3 — Unobservable inputs and models that are supported by little or no market activity.

In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety has been determined based on the

lowest level of input that is significant to the fair value measurement.

In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety has been determined based on the lowest level of input that is significant to the fair value measurement.

Revenue Recognition

The Company charges daily and hourly rates depending upon the type of firefighting service rendered and under which contract the services are

The Company charges daily and hourly rates depending upon the type of firefighting service rendered and under which contract the services are performed.

These services are primarily split into flight revenue and standby revenue.

Flight revenue is earned primarily at an hourly rate when the engines of the aircraft are started and stopped upon request of the customer, tracked via a Hobbs

Flight revenue is earned primarily at an hourly rate when the engines of the aircraft are started and stopped upon request of the customer, tracked via flight logs for Super Scoopers or a Hobbs meter for other aircraft.

Standby revenue is earned primarily as a daily rate when aircraft are available for use at a fire base, awaiting request from the customer for flight deployment.

The Company enters into short, medium and long-term contracts with customers, primarily with government agencies during the firefighting

season, to deploy aerial fire management assets.

The Company enters into short, medium and long-term contracts with customers, primarily with government agencies during the firefighting season, to deploy aerial fire management assets.

Revenue is recognized when performance obligations under the terms of a contract with our customers are satisfied and payment is typically due within 30 days of invoicing.

This occurs as the services

are rendered and include the use of the aircraft, pilot and field maintenance personnel to support the contract.

Contracts are based on

either a Call-When-Needed (CWN) or Exclusive Use (EU) basis.

Invoicing occurs as the services are rendered and includes the use of the aircraft, pilot and field maintenance personnel to support the contract.

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).

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.

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.

The transaction prices are allocated on the service performed and tracked real-time by each

operator in a duty log.

The transaction prices are allocated on the service performed and tracked real-time by each operator in a duty log.

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.

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.

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

Such costs would be capitalized when they are not within the scope of other standards and:

(1) are directly related to a contract;

(2) generate or enhance resources that will be used to

satisfy performance obligations;

(2) generate or enhance resources that will be used to satisfy performance obligations;

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

Contract assets are classified as a receivable when the reporting entitys right to consideration is unconditional, which is

when payment is due only upon the passage of time.

The Company has elected to use the practical expedient detailed in ASC 340-40, Other Assets and Deferred Costs-Contracts with Customers , 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.

As the Company invoices customers for performance obligations that have been satisfied, at which point payment is unconditional, contracts do not typically give rise to contract assets.

liabilities are recorded when cash payments are received or due in advance of performance.

Payment terms vary by customer and type of

revenue contract.

Contract liabilities are recorded when cash payments are received or due in advance of performance.

Payment terms vary by customer and type of revenue contract.

The Company generally expects that the period of time between payment and transfer of promised goods or services will be less than one year.

In such instances, the Company has elected the practical expedient to not evaluate whether

a significant financing component exists.

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.

In such instances, the Company has elected the practical expedient to not evaluate whether a significant financing component exists.

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.

Revenue Disaggregation

following shows the disaggregation of revenue by service for the years ended December 31, 2022 and 2021.

The following table presents the disaggregation of revenue by service:

For the Years Ended December 31,

$s in thousands 2023 2022

Fire suppression $ 56,022 $ 38,845

2 unchanged sentences

Total revenues $ 66,708 $ 46,388

The following shows the disaggregation of revenue by type for the years ended December 31, 2022 and 2021.

The following table presents the disaggregation of revenue by type:

For the Years Ended December 31,

$s in thousands 2023 2022

Flight revenue $ 34,171 $ 25,105

2 unchanged sentences

Total revenues $ 66,708 $ 46,388

The following table presents the disaggregation of revenue by geographic area:

For the Years Ended December 31,

$s in thousands 2023 2022

United States $ 49,534 $ 46,388

Canada 17,174 —

Total revenues $ 66,708 $ 46,388

Concentration Risk

During the year ended December 31, 2022, the Company had one customer who individually accounted for 95% of total revenues.

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

During the year ended December 31, 2021, the Company had two customers who individually accounted for 74% and 18% of total revenues, respectively.

December 31, 2021, one customer accounted for 92% of accounts receivable.

The Company is treated as a partnership for federal income tax purposes.

Consequently, federal income taxes are not payable or provided for by

Members are taxed individually on their pro rata ownership share of the Companys earnings.

The Companys net income or loss is allocated among the members in accordance with the Companys operating agreement.

During the year ended December 31, 2023, the Company had three customers who individually accounted for 65 %, 12 %, and 11 % of total revenues and two customers accounted for 39 % and 34 % of accounts receivable.

During the year ended December 31, 2022, the Company had one customer who individually accounted for 95 % of total revenues and one customer who individually accounted for 62 % of accounts receivable.

For periods prior to the Business Combination, Bridger Aerospace Group Holdings, LLC is a partnership for federal income tax purposes.

Consequently, federal income taxes are not payable or provided for by Legacy Bridger.

Members are taxed individually on their pro rata ownership share of the Legacy Bridger’s earnings.

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

Subsequent to the Business Combination, Bridger Aerospace Group Holdings, Inc.

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.

Bridger is also subject to taxes in foreign jurisdictions in which it operates.

The Company provides for income taxes and the related accounts under the asset and liability method.

Income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid.

The Company is subject to income taxes predominantly in the U.S.

These tax laws are often complex and may be subject to different interpretations.

Deferred income taxes arise from temporary differences between the financial statement carrying amount and the tax basis of assets and liabilities and are measured using the enacted tax rates expected to be in effect during the year in which the basis difference reverses.

In evaluating the ability to recover its deferred tax assets within the jurisdiction from which they arise, the Company considers all available positive and negative evidence.

If based upon all available positive and negative evidence, it is more likely than not that the deferred tax assets will not be realized, a valuation allowance is established.

The valuation allowance may be reversed in a subsequent reporting period if Bridger determines that it is more likely than not that all or part of the deferred tax asset will become realizable.

Segment Reporting

segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources to an individual

segment and in assessing performance.

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance.

The Company’s Chief Executive Officer is the Company’s CODM.

The Company manages its operations as a single segment for purposes of assessing performance, making operating decisions and allocating

The Company manages its operations as a single segment for purposes of assessing performance, making operating decisions and allocating resources.

This one operating and reporting segment primarily focuses on aerial firefighting.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial

institution, which, at times may exceed the Federal Depository Insurance Coverage of $250 thousand.

During the years ended December 31, 2022 and 2021, the Company did not experience losses on these accounts and management believes the

Company is not exposed to significant risks on such accounts.

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000.

During the years ended December 31, 2023 and 2022, the Company did not experience losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

Hedging Transactions and Derivative Financial Instruments

The Company is directly and indirectly affected by changes in certain market conditions.

These changes in market conditions may adversely

impact the Companys financial performance and are referred to as market risks. The Company, when deemed appropriate, uses derivatives as a risk management tool to mitigate the potential impact of certain market risks.

manages interest rate risk through the use of derivative instruments.

These changes in market conditions may adversely impact the Company’s financial performance and are referred to as “market risks.” The Company, when deemed appropriate, uses derivatives as a risk management tool to mitigate the potential impact of certain market risks.

The Company manages interest rate risk through the use of derivative instruments, such as swap agreements.

A swap agreement is a contract between two parties to exchange cash flows based on specified underlying notional amounts, assets and/or indices.

The Company does not enter into

derivative financial instruments for trading purposes.

The accounting for gains and losses that result from changes in the fair values of

derivative instruments depends on whether the derivatives have been designated and qualify as hedging instruments and the type of hedging relationships.

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 in the Consolidated Statements of Comprehensive Loss in which the hedged items are recorded in the same period the hedged items affect earnings.

The Company formally assesses whether the financial instruments used in hedging transactions are effective at offsetting changes in

either the fair values or cash flows of the related underlying exposures.

The Company does not enter into derivative financial instruments for trading purposes.

The accounting for gains and losses that result from changes in the fair values of derivative instruments depends on whether the derivatives have been designated and qualify as hedging instruments and the type of hedging relationships.

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 in the Consolidated Statements of Comprehensive Loss in which the hedged items are recorded in the same period the hedged items affect earnings.

The Company formally assesses whether the financial instruments used in hedging transactions are effective at offsetting changes in either the fair values or cash flows of the related underlying exposures.

Any ineffective portion of a financial instrument’s change in fair value is immediately recognized into earnings.

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 13 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 Companys exposure to the financial risks described above.

The Company applies for and receives new hire, training and other grants.

In December 2020, the Big Sky Economic Development Trust

Fund Job Creation Program awarded $5 thousand per employee for eligible Gallatin Valley new hires in 2021 up to $138 thousand, net of fees.

As of December 31, 2021, the Company had received approval and reimbursement for

$101 thousand.

The grant completion date was December 31, 2021, at which point $37 thousand remained unused.

Grants are recognized as reductions of expense when received in the Consolidated Statements of Operations.

Paycheck Protection Program

Under the Paycheck Protection Program (PPP), on April 16, 2020, a Company SBA loan application was approved and the Company

received loan proceeds in the amount of $774 thousand.

On April 2, 2021, this PPP loan was forgiven in full by the SBA and removed from the Companys Balance Sheet under Section 1106 of the CARES Act.

The forgiveness of this loan

was recognized in Other income on the Consolidated Statements of Operations.

The Company has accounted for this under the guidance of ASC 470.

Loss Per Share

Basic net loss per share is computed by dividing net loss attributable to the common shareholders by the

weighted-average number of common shares outstanding during the period.

Diluted net loss per share is computed by dividing net loss attributable to the common shareholders by the weighted-average number of common shares outstanding during the

period, adjusted for the impact of securities that would have a dilutive effect on net loss per share.

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 16 – Long-Term Debt ” included in this Annual Report on Form 10-K.

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.

Earnings (Loss) Per Share

Basic earnings per share is based on the weighted average number of shares of Common Stock outstanding during the period.

Diluted earnings per share is based on the weighted average number of shares of Common Stock used for the basic earnings 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, earnings for diluted earnings 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.

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 of Common Stock outstanding immediately after the Closing to effect the reverse recapitalization.

Subsequent to the Closing, earnings per share is calculated based on the weighted average number of shares of Common Stock outstanding.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is

probable that a liability has been incurred and the amount can be reasonably estimated.

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.

Legal costs incurred in connection with loss contingencies are expensed as incurred.

Collaboration Agreements

Company analyzes its collaboration arrangement to assess if it is within the scope of ASC Topic 808, Collaborative Agreements (ASC 808) by determining whether such an arrangement involves joint operating activities performed by parties

that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities.

This assessment is performed throughout the life of the arrangement based on changes in the

responsibilities of all parties in the arrangement.

The Company analyzes its collaboration arrangement to assess if it is within the scope of ASC Topic 808, Collaborative Agreements (“ASC 808”) by determining whether such an arrangement involves joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities.

This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement.

If the Company concluded that it has a customer relationship with its collaborator, the collaboration arrangement would be accounted for under ASC 606.

Stock-Based Compensation

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.

Select board members and an executive were granted 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 Companys Class D Common shares, which is estimated using an option pricing model.

Compensation cost for

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

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

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.

For performance related units, expense is recognized when the performance related condition is considered probable.

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 “Omnibus 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.

The fair value of RSUs is determined based on the number of shares granted and the quoted market price of the Common Stock on the date of grant.

Compensation cost for the RSUs is recognized as the performance condition of the Closing of the transaction was met and over the requisite service period based on the graded-vesting method.

The Company accounts for forfeitures as they occur.

Stock-based compensation is included in both Cost of revenues and Selling, general and administrative expense in the Consolidated Statements of Operations.

Advertising Expense

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

Advertising expense for the years ended December 31, 2022 and 2021 was $687 thousand and

$89 thousand, respectively.

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

Advertising expense for the years ended December 31, 2023 and 2022 was $ 0.1 million and $ 0.7 million, respectively.

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No.

1 unchanged sentence

Measurement of Credit Losses on Financial Instruments .

The amendments in this ASU replace the incurred loss model for recognition of credit losses with a methodology that reflects expected credit losses over the life of the loan and requires

consideration of a broader range of reasonable and supportable information to calculate credit loss estimates.

The new guidance is effective for the Company for its fiscal years beginning after December 15, 2022, including interim periods

within those fiscal years.

The Company is currently evaluating the impact of adopting the new accounting guidance on the Companys consolidated financial statements.

The amendments in this ASU replace the incurred loss model for recognition of credit losses with a methodology that reflects expected credit losses over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates.

The Company adopted this standard on January 1, 2023.

The adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU No.

2 unchanged sentences

Simplifying the Test for Goodwill Impairment .

This update modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that

exists when the carrying amount of a reporting unit exceeds its fair value.

In order to reduce complexity, an entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a

reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination.

The new guidance is effective for the Company for its fiscal years beginning after December 15, 2022.

The Company is

currently evaluating the impact of adopting the new accounting guidance on the Companys consolidated financial statements.

2020, the FASB issued ASU No.

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

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and in January 2021, issued ASU No.

2021-01, Reference Rate Reform:

These updates provide optional expedients and exceptions for applying US GAAP to contracts, hedging relationships and other transactions affected by reference

rate reform if certain criteria are met.

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.

2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848, to extend the temporary accounting rules under Topic 848 from December 31, 2022 to

December 31, 2024.

This update modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value.

In order to reduce complexity, an entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination.

The Company adopted this standard on January 1, 2023.

The adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

In October 2023, the FASB issued ASU No.

2023-06, Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative .

This update modifies the disclosure or presentation requirements of a variety of topics in the codification.

The effective date for each amendment will be the date on with the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective.

Early adoption is prohibited.

The Company is currently evaluating the impact of adopting the new accounting guidance on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

This update expands annual and interim reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This new guidance is effective for the Company for its fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company does not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

This update enhances the transparency and decision usefulness of income tax disclosures to provide investors information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows.

This new guidance is effective for the Company for its fiscal years beginning after December 15, 2024.

The Company is currently evaluating the impact of adopting the new accounting guidance on the Company’s consolidated financial statements.

NOTE 3 – 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, the Company consummated the Reverse Recapitalization between JCIC and Legacy Bridger.

Subsequent to the Closing, the Company’s Common Stock is the only authorized and issued class of common stock.

Legacy Bridger Common Shares

Legacy Bridger had 30,000,000 Class A Common Shares issued and outstanding as of December 31, 2022.

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 9,756,130 Class B Common Shares issued and outstanding as of December 31, 2022.

The holders of these shares are 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 hold 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.

In connection with the Ignis Acquisition, the Company issued 426,531 shares of Common Stock which were issued to the shareholders of the Seller.

Refer to “Note 10 – Acquisition Activity” included in this Annual Report on Form 10-K.

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.

NOTE 4 – SUPPLEMENTAL CASH FLOW INFORMATION

For the Years Ended December 31,

$s in thousands 2023 2022

Interest paid $ 23,220 $ 12,747

Fixed assets in accounts payable 205 911

Conversion of Promissory Note to Common Stock 897 —

Series A Preferred Stock - adjustment for deemed dividend upon Closing 48,300 —

Series A Preferred Stock - adjustment to eliminate 50% multiplier 156,363 —

Series A Preferred Stock - adjustment to maximum redemption value 22,181 —

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

Legacy Bridger Series C Preferred Shares - adjustment for maximum redemption value — ( 202,689 )

Non-cash operating and financing activities:

Assumption of Jack Creek liabilities $ 7,464 $ —

Recognition of warrant liabilities 5,863 —

Cancellation of Deferred underwriting fee 1,500 —

Recognition of new right-of-use asset and corresponding operating lease liability 7,940 130

Bonuses paid in Class A Common Stock 3,829 —

Purchase consideration of Ignis acquisition paid in Class A Common Stock 3,242 —

Deferred offering costs included in accrued expenses and other current liabilities — 2,291

NOTE 5 – 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 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 December 31,

Carrying Value

$s in thousands Carrying Value

Cash equivalents:

5 unchanged sentences

As of December 31, 2023

Investment in marketable securities

$s in thousands Purchase

Price Unrealized

Gains Unrealized Losses Fair Value

Investments in marketable securities:

Government securities 999 10 — 1,009

Total investments in marketable securities $ 999 $ 10 $ — $ 1,009

As of December 31, 2022

$s in thousands Purchase

Price Unrealized

Gains Unrealized

Losses Fair Value

Investments in marketable securities:

Commercial paper $ 32,636 $ 278 $ — $ 32,914

1 unchanged sentence

Government securities 6,659 — ( 9 ) 6,650

Total marketable securities

The net unrealized gain included in accumulated other comprehensive income for the year ended

December 31, 2022 is $273 thousand.

The Company did not have investments in marketable securities as of December 31, 2021.

The proceeds from sales of available-for-sale securities and

gross realized gains included in earnings for the year ended December 31, 2022 are $5,500 thousand and $627 thousand, respectively.

Total investments in marketable securities $ 54,708 $ 281 $ ( 9 ) $ 54,980

The net unrealized gain included in accumulated other comprehensive income for the years ended December 31, 2023 and 2022 was $ 0.2 million and $ 0.3 million, respectively.

The proceeds from sales of available-for-sale securities and gross realized gains included in earnings for the years ended December 31, 2023 and 2022 are $ 55.4 million and $ 5.5 million, respectively, and $ 0.8 million and $ 0.6 million, respectively.

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

There have been no impairments measured and no amounts reclassified out of accumulated other comprehensive income for the years ended December 31, 2022 and 2021.

Note 4 Accounts Receivable

receivable consisted of the following:

There have been no impairments measured for the years ended December 31, 2023 and 2022.

For the years ended December 31, 2023 and 2022, the Company reclassified out of accumulated other comprehensive income of $ 0.6 million and zero , respectively.

NOTE 6 – ACCOUNTS AND NOTE RECEIVABLE

Accounts and note receivable consist of the following:

As of December 31,

$s in thousands 2023 2022

Trade accounts receivable $ 681 $ 29

Other receivables

Total accounts receivable

Note receivable 3,000 —

Total accounts and note receivable $ 4,113 $ 29

On September 5, 2023, the Company entered into a secured promissory note in the amount of $ 3.0 million.

This note accrues interest at a rate of 8.5 % per annum and is due and payable on January 20, 2024.

Other receivables consists primarily of value-added taxes paid in 2023 and expected to be refunded in 2024.

NOTE 7 – AIRCRAFT SUPPORT PARTS

1 unchanged sentence

As of December 31,

$s in thousands 2023 2022

Repairables and expendables $ 488 $ 1,734

Other support parts

Total aircraft support parts $ 488 $ 1,761

2 unchanged sentences

As of December 31,

$s in thousands 2023 2022

Prepaid insurance $ 1,324 $ 969

Deposits 120 65

Prepaid subscriptions 1,115 771

Other current assets

Total prepaid expenses and other current assets $ 2,648 $ 1,835

2 unchanged sentences

As of December 31,

$s in thousands 2023 2022

Aircraft $ 186,167 $ 160,113

Accumulated depreciation ( 25,656 ) ( 16,783 )

Aircraft, net 160,511 143,330

Construction-in-progress -

Construction-in-progress - Aircraft — 16,992

Buildings 35,941 16,519

Vehicles and equipment 2,993 2,811

Construction-in-progress -

Construction-in-progress - Buildings 5 13,780

Finance lease right-of-use-asset 121 130

Licenses 235 235

Accumulated depreciation ( 3,195 ) ( 1,705 )

Buildings and equipment, net 36,100 31,770

Property, plant and equipment, net

For the year ended December 31, 2022, the Company recorded $7,864 thousand and $1,136 thousand

of depreciation expenses in Cost of revenues and Selling, general and administrative expense, respectively.

For the year ended December 31, 2021, the Company recorded $6,046 thousand and $595 thousand of depreciation expenses in Cost

of revenues and Selling, general and administrative expense, respectively.

For the years ended December 31, 2022 and 2021, the

Company recorded losses on disposals and sale of assets of $1,769 thousand and $996 thousand, respectively, in Selling, general and administrative expense in the Consolidated Statements of Operations related to the obsolescence of aging

For the years ended December 31, 2022 and 2021, capitalized interest to equipment from debt financing was

$677 thousand and $89 thousand, respectively.

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

Aircraft that is temporarily not in service

is not depreciated until placed into service.

Note 8 Goodwill and Intangible Assets

The Companys goodwill originated from the acquisition of MA, LLC in April 2018.

The carrying amount of goodwill was $2,458 thousand

as of December 31, 2022 and 2021.

Total property, plant and equipment, net $ 196,611 $ 192,092

For the year ended December 31, 2023, the Company recorded $ 9.6 million and $ 1.3 million of depreciation expense in Cost of revenues and Selling, general and administrative expense, respectively.

For the year ended December 31, 2022, the Company recorded $ 7.9 million and $ 1.1 million of depreciation expense in Cost of revenues and 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 noted that increasing maintenance costs associated with three of our Twin Commander aircraft and the lack of customers for our two Aurora eVTOL Skiron drone aircraft indicated that these aircraft were not viable contract operating planes, resulting in anticipated cash flow losses as a result of being unable to generate revenues.

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

For the year ended December 31, 2023, the Company recorded associated impairment charges of $ 2.4 million in Selling, general and administrative expense in the Consolidated Statements of Operations.

For the year ended December 31, 2022, the Company recorded no impairment charges.

For the years ended December 31, 2023 and 2022, the Company recorded losses on disposals of assets of $ 1.2 million and $ 1.8 million, respectively, in Selling, general and administrative expense in the Consolidated Statements of Operations.

For the years ended December 31, 2023 and 2022, capitalized interest to equipment from debt financing was $ 1.2 million and $ 0.7 million, respectively.

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

NOTE 10 – ACQUISITION ACTIVITY

On September 12, 2023, the Company completed the acquisition of all outstanding equity interests of Ignis Technologies, Inc.

(“Ignis”), a fire technology company developing mission-critical intelligence and technology solutions for firefighting organizations, for total consideration of $ 11.6 million, payable in unregistered shares of Bridger’s Common Stock, consisting of $ 3.3 million payable at closing (the “Acquisition”).

At closing, 426,531 restricted shares of Common Stock were issued to the Ignis shareholders (determined based upon a volume-weighted average per-share price (“VWAP”) of the Common Stock for the 30 consecutive trading days ended September 11, 2023).

The remaining $ 8.3 million of Common Stock consideration is contingent upon the achievement of certain operational milestones and, assuming achievement of such milestones, will be issued to the Ignis shareholders in 2024, 2025, and 2026, with the price per share determined based upon a trailing 120 -day VWAP of the Common Stock at the time of each issuance.

All of the shares of Common Stock to be issued in the Acquisition will be subject to transfer restrictions for a 12 -month period after each issuance, with 1/12th of the total shares of Common Stock vesting each month over the one -year period after each issuance.

None of the shares of Common Stock issued or issuable in connection with the Acquisition were registered under the Securities Act of 1933, as amended (the “Securities Act”), on the Acquisition date in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.

Recipients of shares of Common Stock in connection with the Acquisition will have customary resale registration rights with respect to such shares of Common Stock pursuant to the terms and conditions of the Acquisition.

The Company accounted for the Acquisition under the acquisition method of accounting and has reported the results of operations of the Acquisition as of the respective date of the Acquisition.

The Company based the estimated fair values of intangible assets on an income approach utilizing the relief from royalties model.

The income approach utilizes management’s estimates of future operating results and cash flows using a weighted average cost of capital that reflects market participant assumptions.

For all other assets acquired and liabilities assumed, the fair value reflects the carrying value of the asset or liability due to their short maturity.

The Company recorded the excess of the fair value of the consideration transferred in the Acquisition over the fair value of net assets acquired as goodwill.

The goodwill reflects our expectations of favorable future growth opportunities.

The Company expects that substantially all of the goodwill will not be deductible for federal income tax purposes.

Acquisition-related costs associated with the Acquisition of $ 0.1 million are included in Selling, general and administrative expense on the Consolidated Statements of Operations for the year ended December 31, 2023.

The Company has not presented pro forma combined results for the Acquisition because the impact on previously reported statements of operations was not material.

As of December 31, 2023, the Company finalized the purchase accounting for the Acquisition.

The following table summarizes the final purchase price allocation:

$s in thousands Purchase Price Allocation

Cash and cash equivalents $ 3

Intangible assets 1,300

Accounts payable ( 37 )

Long-term accrued expenses and other noncurrent liabilities ( 67 )

Deferred tax liability ( 314 )

Total identifiable net assets 885

Goodwill 10,676

Total purchase price $ 11,561

Goodwill of $ 10.7 million arising from the acquisition is primarily attributable to the assembled workforce of Ignis and expected synergies from combining operations.

None of the acquired goodwill is expected to be deductible for income tax purposes.

Acquired intangible assets consist entirely of in-process research and development (“IPR&D”) and is expected to be amortized over its useful life of five years when placed into service.

The Company concluded that the IPR&D is an identifiable intangible asset that would be accounted for as a single asset in a business combination.

The fair value of the IPR&D was determined using an income approach based on significant unobservable inputs.

NOTE 11 – GOODWILL AND INTANGIBLE ASSETS, NET

The change in goodwill for the year ended December 31, 2023 was as follows:

$s in thousands Goodwill

As of December 31, 2022 $ 2,458

Ignis acquisition 10,676

Measurement period adjustment 29

As of December 31, 2023 $ 13,163

The Company’s goodwill as of December 31, 2022 originated from the acquisition of MA, LLC in April 2018.

There were no impairment charges recorded for goodwill for the years ended December 31, 2023 and 2022.

Other intangible assets consisted of the following:

Intangible assets consisted of the following:

As of December 31, 2023

$s in thousands Estimated

Life (Years) Cost Accumulated

Amortization Net

Licenses 10 $ 67 $ ( 54 ) $ 13

Internal-use software 3 297 ( 208 ) 89

IPR&D 5 1,628 — 1,628

Total intangible assets $ 1,992 $ ( 262 ) $ 1,730

As of December 31, 2022

$s in thousands Estimated Life (Years) Cost Accumulated Amortization Net

Licenses 10 $ 67 $ ( 47 ) $ 20

Internal-use software 3 297 ( 109 ) 188

Capitalized internal-use software in progress

Total intangible assets $ 364 $ ( 156 ) $ 208

During 2018, intangible assets arose from the acquisition of MA, LLC.

These intangibles relate to the value of

the FAA part certification licenses acquired as a part of the business.

During 2020, the Company created a website for internal-use specific for the tracking of fire-fighting assets and contract deliverables to support operations.

Additional internal-use software is in progress for the

development of an application meant to provide end-users with consolidated imagery and data regarding critical wildfire incidents.

This included costs associated with salaries, administration expenses and

contractor fees.

Amortization expense for intangible assets and other noncurrent assets was $91 thousand and $33 thousand for

the years ended December 31, 2022 and 2021, respectively.

IPR&D is the historical know-how, software, formula protocols, designs, and procedures expected to be needed to complete the development of the technology asset and receive regulatory approval.

The Company expects to amortize the IPR&D over its useful life of five years when placed into service.

As of December 31, 2023, the Company capitalized costs of $ 0.3 million related to IPR&D.

Amortization expense for intangible assets and other noncurrent assets was $ 0.1 million for the years ended December 31, 2023 and 2022, respectively.

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

Future amortization expense for intangible assets subject to amortization is:

Year Ending December 31:

Future amortization expense for intangible assets subject to amortization is expected to be as follows:

$s in thousands Expected

NOTE 12 – OTHER NONCURRENT ASSETS

1 unchanged sentence

As of December 31,

Investment in Overwatch

Operating lease

right-of-use asset

Interest rate swap

$s in thousands 2023 2022

Operating lease right-of-use asset $ 7,777 $ 671

Investment in MAB Funding, LLC 4,000 —

Prepaid subscriptions 2,877 1,246

Interest rate swap 1,117 1,407

Investment in Overwatch Imaging, Inc.

Total other noncurrent assets $ 16,771 $ 4,356

Note 10 Accrued Expense and Other Liabilities

Investment in MAB Funding, LLC

On November 17, 2023, the Company entered into a series of agreements with MAB Funding, LLC (“MAB”) and its subsidiary designed to facilitate the purchase and return to service of four Canadair CL-215T Amphibious Aircraft (the “Spanish Scoopers”) originally awarded to the Company’s wholly-owned subsidiary, Bridger Aerospace Europe, S.L.U.

(“BAE”), in September 2023 via a public tender process from the Government of Spain for € 40.3 million.

Under the terms of the agreements, the Company agreed to sell its entire outstanding equity interest in BAE to MAB and purchase $ 4.0 million of non-voting Class B units of MAB.

The Company also entered into a services agreement with MAB whereby the Company will manage the return to service upgrades of the Spanish Scoopers through the Company’s wholly-owned Spanish subsidiary, Albacete Aero, S.L., while they are owned and funded by MAB.

The service agreement also provides that the Company has the right, but not the obligation, to acquire each Spanish Scooper as it is ready to be contracted and returned to service.

The Company assessed both MAB and BAE for variable interest entity accounting under ASC 810-10-15 and determined that MAB is a voting interest entity and BAE is a variable interest entity.

The Company accounts for its investment in MAB in accordance with ASC 321 as the Company determined that it did not have significant influence as its interests in MAB are non-voting and the Company does not have representation on the Board of Directors of MAB, which makes all significant decisions.

Because MAB is privately held and there is no readily determinable fair value for its stock, the Company will avail itself of the accounting alternative provided by ASC 321 whereby the investment will be accounted for at cost less impairment charges, adjusted for observable price changes in orderly transactions for an identical or similar investment in MAB.

Investment in Overwatch Imaging, Inc.

On February 22, 2022, the Company entered into a collaboration agreement (the “Collaboration Agreement”) with Overwatch Imaging, Inc.

(“Overwatch”), a Delaware corporation, under which the Company and Overwatch collaborate to develop and implement the technical and imaging needs of the Company.

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.

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 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.

The Company does not consider its obligations under the Collaboration Agreement as an output of the Company’s ordinary activities in exchange for consideration and Overwatch is not considered a customer under ASC 606.

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

For the years ended December 31, 2023 and 2022, the Company recorded zero and $ 0.8 million, respectively, of purchases of imaging systems under the Collaboration Agreement in Property, plant and equipment, net, and $ 39,000 and $ 0.4 million, respectively of engineering services provided by Overwatch under the Collaboration Agreement in Selling, general and administrative expense.

NOTE 13 – ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consisted of the following:

As of December 31,

$s in thousands 2023 2022

Contingent consideration $ 8,486 $ —

Accrued interest expense 6,448 6,435

Warrant liabilities 5,596 —

Accrued foreign tax 2,707 —

Deferred underwriting fee payable 1,500 —

Accrued salaries, wages and bonuses 1,099 6,516

right-of-use liability

Embedded derivative of Series A Preferred Stock 885 —

Accrued professional fees 851 2,291

Embedded derivative of Series C Preferred shares

Accrued interest expense and other accrued liabilities

Finance right-of-use liability 46 68

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

Embedded derivative of Legacy Bridger Series C Preferred Shares — 1,040

Other 327 180

Total accrued expenses and other liabilities 27,945 18,716

1 unchanged sentence

Total long-term accrued expenses and other noncurrent liabilities $ 10,777 $ 46

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 Bridger Series C Preferred Shares, issuance of the Series 2022 Bonds and execution

of the Transaction Agreements.

As of December 31, 2022, $3,087 thousand of the discretionary cash bonuses remained accrued and unpaid.

Note 11 Interest Rate Swap

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 13-

Long-term Debt.

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 Series 2022 Bonds for $ 160.0 million and execution of the Transaction Agreements.

Warrant liabilities

The warrant liabilities consist of the following Warrants issued by the Company in connection with the Reverse Recapitalization:

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

The exercise price and number of shares of Common Stock issuable upon exercise of the Warrants may also be adjusted in certain circumstances including in the event of a share dividend, recapitalization, reorganization, merger or consolidation.

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.

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.

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 December 31, 2023, 17,249,874 Public Warrants remain outstanding.

The Public Warrants are liability-classified with a balance of $ 3.6 million and a fair value of $ 0.21 per warrant as of December 31, 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 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 December 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 $ 2.0 million and a fair value of $ 0.21 per warrant as of December 31, 2023.

Contingent consideration

The Company assumed Contingent consideration as part of the Acquisition discussed in “Note 10 – Acquisition Activity.” The Company is required to make contingent payments to the sellers based on the achievement of certain operational milestones.

The fair value of the liability for the contingent payments was recognized upon the acquisition as part of the purchase accounting opening balance sheet.

The initial cost was recognized at fair value on the closing date with subsequent changes in estimated fair value recognized as Selling, general and administrative expenses in the Consolidated Statements of Operations.

As of December 31, 2023, the Company recognized $ 4.8 million in Accrued expenses and other current liabilities and $ 3.6 million in Long-term accrued expenses and other noncurrent liabilities in the Consolidated Balance Sheets.

The change in contingent consideration for the year ended December 31, 2023 was as follows:

$s in thousands Contingent Consideration

As of December 31, 2022 $ —

Ignis acquisition 8,319

Change in fair value of contingent consideration 167

As of December 31, 2023 $ 8,486

NOTE 14 – INTEREST RATE SWAP AND FREESTANDING DERIVATIVE

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 16 – 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 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.

At the end of each calendar month, the Company receives or makes

payments on the interest rate swap difference, if any, based on the receive interest rate set forth in the table below.

Interest payments on the Companys term loan and payments received or made on the interest rate swap are reported net in the

Consolidated Statements of Operations as interest expense.

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

Each month, the Company made 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 until June 30, 2023.

Effective July 1, 2023, LIBOR was replaced by 1-month CME Term Secured Overnight Financing Rate (“SOFR”) plus 0.11448% tenor spread adjustment plus the 2.5 % contractual SOFR margin then in effect with respect to the term loan.

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.

Interest payments on the Company’s term loan and payments received or made on the interest rate swap are reported net on the Consolidated Statements of Operations as interest expense.

The Company had the following interest rate swap designated as a cash flow hedge ($s in thousands):

As of December 31, 2023

1 Month LIBOR + 2.5%

Date Maturity

Date Notional

Amount Fair Value Pay Fixed Receive Rate

4/15/2020 3/15/2030 $ 10,466 $ 1,117 3.887 % 1 Month SOFR + 2.61448%

As of December 31, 2022

Date Maturity

Date Notional

Amount Fair Value Pay Fixed Receive Rate

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

The Company accounts for the interest rate swap as a cash flow hedge for accounting purposes

under US GAAP.

The Company accounts for the interest rate swap as a cash flow hedge for accounting purposes under GAAP.

The Company reflects the effect of this hedging transaction in the consolidated financial statements.

The unrealized gain is reported in other comprehensive income.

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 members deficit, into earnings on the Consolidated Statements of Operations.

No amounts were

reclassified relating to the Companys designated cash flow hedge during 2022 or 2021.

The unrealized gain is reported in other comprehensive (loss) income.

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 in the Consolidated Statements of Operations.

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 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 Company paid $ 1.1 million and the remaining $ 1.1 million of the excess hold fee in June and July 2023, respectively.

As of December 31, 2022, the fair value of the freestanding derivative on Legacy Bridger Series C Preferred Shares was $ 2.2 million.

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

NOTE 15 – FAIR VALUE MEASUREMENTS

Long-term debt, net of debt issuance costs

As of December 31, 2022, the Company has $156,329 thousand of fixed rate and $51,589 thousand of variable rate debt outstanding.

Based on current market rates, the fair value of the fixed rate debt as of December 31, 2022 was estimated to be 161,793 thousand.

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

Long-term debt

As of December 31, 2023, the Company has $ 160.2 million of fixed rate and $ 51.2 million of variable rate debt outstanding.

Based on current market rates, the fair value of the fixed rate debt as of December 31, 2023 was estimated to be $ 174.7 million.

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 Companys debts as of December 31, 2022 and 2021.

Debt financing activities and loan agreements are further described in Note 13.

When valuing fixed rate debt, the fair value is capped at par value.

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 December 31, 2023 and 2022.

Debt financing activities and loan agreements are further described in “Note 16 – Long-Term Debt.”

Recurring Fair Value Measurement

Our cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other current assets and liabilities (excluding

derivative instruments) are carried at amounts which reasonably approximate their fair values due to their short-term nature.

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

Our cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other current assets and liabilities (excluding derivative instruments) are carried at amounts which reasonably approximate their fair values due to their short-term nature.

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 December 31, 2023

$s in thousands Level 1 Level 2 Level 3

Cash $ 22,956 $ — $ —

Restricted cash:

Money market fund 13,981 — —

Total restricted cash 13,981 — —

Investments in marketable securities — 1,009 —

Interest rate swap — 1,117 —

Total assets $ 36,937 $ 2,126 $ —

Warrant liabilities - Public Warrants 3,622 — —

Warrant liabilities - Private Placement Warrants — 1,974 —

Contingent consideration — — 8,486

Embedded derivative of Series A Preferred Stock — — 885

Total liabilities $ 3,622 $ 1,974 $ 9,371

As of December 31, 2022

($s in thousands) Level 1 Level 2 Level 3

Cash $ 260 $ — $ —

Cash equivalents:

8 unchanged sentences

Interest rate swap — 1,407 —

Embedded derivative of Series C Preferred shares

Total liabilities

As of December 31, 2021

Cash and cash equivalents

Restricted cash

Interest rate swap

Mandatorily redeemable Series B Preferred shares

Total assets $ 12,570 $ 86,277 $ —

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

Embedded derivative of Legacy Bridger Series C Preferred Shares — — 1,040

Total liabilities $ — $ — $ 3,226

Interest Rate Swap

The Companys 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 11 - Interest Rate Swap.

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.

The fair value of the Companys

interest rate swap agreement was determined based on the present value of expected future cash flows using discount rates appropriate with the terms of the swap agreement.

The fair value indicates an estimated amount the Company would be required to

receive if the contracts were canceled or transferred to other parties.

The Company used a Level 2 valuation methodology to assess this interest rate swap.

Mandatorily Redeemable Series B Preferred shares

The Companys mandatorily redeemable Series B Preferred shares are measured at fair value based on capital contributions, plus accrued but

unpaid interest.

The Series B Preferred shares were redeemed during the year ended December 31, 2022 as furthered discussed in Note 19 Mandatorily Redeemable Preferred Stock.

Embedded derivative of Series C Preferred shares

The Company identified a redemption feature of the Series C Preferred shares that required bifurcation from the host instrument as an embedded

derivative liability, as discussed in Note 18 Mezzanine Equity.

The embedded derivative was initially valued and remeasured using a with-and-without

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

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 14 – 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.”

The fair value of the Company’s interest rate swap agreement was determined based on the present value of expected future cash flows using discount rates appropriate with the terms of the swap agreement.

The fair value indicates an estimated amount the Company would be required to receive if the contracts were canceled or transferred to other parties.

The Company calculates the fair value of interest rate swap agreement quarterly based on the quoted market price for the same or similar financial instruments.

The fair value of the freestanding derivative was determined based on the present value of the excess hold fee expected to be owed on March 15, 2023, after taking into account the probability of such excess hold fee being outstanding on the same date.

The excess hold fee was considered a freestanding derivative instrument until March 15, 2023 and became a fee payable thereafter, noted above as an excess hold fee payable on Series A Preferred Stock.

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

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 21 – 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 20 – 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.

Under this methodology, the difference in the estimated fair value between the instrument with the embedded derivative and the instrument without the embedded derivative represents the estimated fair value of the embedded derivative.

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

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 Series C Preferred shares.

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

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 20 – 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 5 – Cash Equivalents and Investment in Marketable Securities” included in this Annual Report on Form 10-K for additional details.

Warrant Liabilities

The Company issued Warrants in connection with the Reverse Recapitalization.

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 Statements 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 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.

Refer to “ Note 13 – Accrued Expenses and Other Liabilities ” included in this Annual Report on Form 10-K for additional details.

Contingent Consideration

In connection with the Acquisition, the Company is required to make contingent payments to the sellers based on the achievement of certain operational milestones.

The fair value of the liability for the contingent payments recognized upon the acquisition as part of the purchase accounting opening balance sheet totaled $ 8.3 million.

The fair value of the contingent consideration was determined using the Monte-Carlo simulation-based model discounted to present value.

Assumptions used in this calculation are equity volatility, estimated future stock prices and various probability factors, including management’s estimate of the likelihood of meeting certain operational milestones.

The ultimate settlement of the contingent consideration could deviate from current estimates based on the actual results of these financial measures.

This liability is considered to be a Level 3 financial liability that is remeasured each reporting period.

Changes in estimated fair value of contingent consideration are recognized as Selling, general and administrative expenses within the Unaudited Condensed Consolidated Statements of Operations.

Refer to “ Note 13 – Accrued Expenses and Other Liabilities ” included in this Annual Report on Form 10-K 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.

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 December 31, 2022 and 2021, 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.

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

As of December 31, 2023, the Company recorded impairment charges of $ 2.4 million related to three of our Twin Commander aircraft and our two Aurora eVTOL Skiron drone aircraft.

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

Refer to “ Note 9 – Property, Plant and Equipment, Net ” included in this Annual Report on Form 10-K for additional details.

NOTE 16 – LONG-TERM DEBT

1 unchanged sentence

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

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

rate, maturing October 1, 2035

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

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

Taxable industrial revenue bonds, dated February 24, 2021, 6.5% interest rates, maturing

February 21, 2040

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

September 1, 2027

Various term loan agreements with earliest start at November 18, 2020, 3.89-4.52% interest rates, latest maturation on November 18, 2022

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

$s in thousands 2023 2022

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

$ 160,000 $ 160,000

Permanent loan agreement, dated August 21, 2020, greater of Prime + 1.5 % or 4.75 % interest rate, maturing August 21, 2035 2

18,391 18,852

Permanent loan agreement, dated October 1, 2020, greater of Prime + 1.5 % or 4.75 % interest rate, maturing October 1, 2035 2

18,457 18,924

Term loan agreement dated September 30, 2019, SOFR + 2.61448 % interest rate, maturing March 15, 2030 3

10,466 11,111

Term loan agreement dated February 3, 2020, SOFR + 2.61448 % interest rate, maturing February 3, 2027 4

Various term loan agreements, earliest start at September 9, 2021, 3.89 - 5.5 % interest rates, latest maturation on November 17, 2027 5

Loans payable 211,374 213,575

3 unchanged sentences

Total long-term debt, net of debt issuance costs $ 204,585 $ 205,471

2020 Loan Agreements

In 2020, the Company entered into two separate credit facilities brokered through Live Oak Bank (LOB) and backed by the US

Department of Agriculture (USDA) for the completed purchase of the Companys first two 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.

1 On July 21, 2022, the Company closed on the Series 2022 Bonds, upon which the Company received aggregate proceeds of $ 135.0 million on July 21, 2022 and $ 25.0 million on August 10, 2022.

The proceeds were designated to redeem in full the 2021 Bonds and the 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 CL-415EAF aircraft.

The Series 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 Series 2022 Bonds were $ 4.2 million.

The Series 2022 Bonds are subject to redemption or prepayment prior to maturity, as follows:

(a) optional redemption in whole or in part, on any day thereafter at par plus accrued interest, and on certain dates, a premium;

(b) mandatory redemption at par plus any premium applicable to optional redemptions and a 3 % premium if such redemptions are made prior to September 1, 2025, in whole or in part, in the event of the occurrence of certain events;

and (c) extraordinary redemption at par plus accrued interest due to the occurrence of certain casualty, condemnation, or other unexpected events.

Optional redemptions are subject to 3 %, 2 %, and 0 % premiums if redemptions are made on or after September 1, 2025, September 2026, and September 2027, respectively.

At the Company’s direction, the Series 2022 Bonds may be redeemed by Gallatin County at any time, at a redemption price equal to 100 % of the principal amount plus accrued interest upon the occurrence of certain events

2 In 2020, the Company entered into two separate credit facilities brokered through Live Oak Bank (“LOB”) and backed by the US Department of Agriculture for the completed purchase of the Company’s first two Viking CL-415EAF aircraft.

The Company issued two $ 19.0 million promissory notes to LOB, established as 15 -year maturity, first two 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 1.25x at the aircraft or entity level and for the Companys debt to worth ratio to not exceed 5.00x at the aircraft or entity level.

Debt issuance costs for BAT1 and BAT2 were $ 1.0 million and $ 0.9 million, respectively.

3 On September 20, 2019, the Company entered into a credit facility with RMB for $ 12.9 million, 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 SOFR plus 2.61448 %.

Debt issuance costs for this loan were $ 0.1 million.

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

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%.

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 1.25x 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).

In response to the COVID-19 pandemic, the U.S.

Small Business Administration (the SBA) made available low-interest rate loans to qualified small businesses, including under its

Paycheck Protection Program (the PPP).

On April 7, 2020, in order to supplement its cash balance, the Company applied for this PPP loan.

On April 16, 2020, the Companys SBA loan application was approved, and the Company

received loan proceeds in the amount of $774 thousand.

The SBA loan had an interest rate of 1% and was scheduled to mature on April 16, 2022.

On April 2, 2021, this PPP loan was forgiven in full by the SBA and removed from the

Companys Consolidated Balance Sheets under Section 1106 of the CARES Act.

The forgiveness of this loan was recognized in Other income on the Consolidated Statements of Operations.

The Company entered into a short-term loan to finance aviation insurance premiums through Insurance Premium Financing Leader

(IPFS) on November 18, 2020.

This was financed for $432 thousand with a maturity of one year and at a rate of 4.52%.

No debt issuance costs were incurred.

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.

2021 Loan Agreements

On February 24, 2021, the Company issued taxable industrial development revenue bonds under the CUSIP of Gallatin County for

$7,330 thousand (2021 Bonds).

This was done through an offering of the first tranche of which the Company is approved to issue up to $160,000 thousand.

These proceeds are designated to finance the construction and equipping of

the Companys 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%.

Debt issuance costs for this loan

were $570 thousand.

On July 21, 2022, upon the closing of a taxable industrial development revenue bond transaction under the

CUSIP of Gallatin County for $160,000 thousand (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 Consolidated Statements of

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%.

A promissory note was issued for $ 5.6 million, 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 SOFR plus 2.61448 %.

Debt issuance costs for this loan was $ 0.1 million.

5 On November 18, 2021, the Company re-entered into a new short-term loan to finance aviation insurance premiums with Insurance Premium Financing Leader.

This was financed for $ 0.6 million 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.

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.

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 Series A Preferred shares, to finance the construction and equipping of the Companys 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.

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

The 2022 Bonds are

subject to redemption or prepayment prior to maturity, as follows:

(a) optional redemption in whole or in part, on any day thereafter at par plus accrued interest, and on certain dates, a premium;

(b) mandatory redemption at par plus any

premium applicable to optional redemptions and a 3% premium if such redemptions are made prior to September 1, 2025, in whole or in part, in the event of the occurrence of certain events;

and (c) extraordinary redemption at par plus

accrued interest due to the occurrence of certain casualty, condemnation, or other unexpected events.

Optional redemptions are subject to 3%, 2%, and 0% premiums if redemptions are made on or after September 1, 2025, September 2026, and

September 2027, respectively.

At the Companys direction, the 2022 Bonds may be redeemed by Gallatin County at any time, at a redemption price equal to 100% of the principal amount plus accrued interest upon the occurrence of certain events.

The 2022 Bonds are subject to financial covenants requiring the Company to maintain a DSCR that exceeds 1.25x 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 $601 thousand and $173 thousand for the years ended December 31, 2022 and 2021,

respectively.

The Company also 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 $ 29,000 to $ 72,000 and were at rates from 4.8 % to 5.5 % and at durations from 5 to 6 years, with the latest maturation on November 17, 2027.

The Series 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 to maintain liquidity of $ 8.0 million in the form of unrestricted cash or investments (excluding margin accounts and retirement accounts) at all times and to be reported.

The Company is not in compliance with the DSCR covenant as of December 31, 2023 and management anticipates the Company to continue to not be in compliance with the DSCR covenant at future quarterly measurement periods during the next 12 months, primarily attributable to the seasonal nature of our business and a less intense 2023 wildfire season.

Although the Company is in compliance with the $ 8.0 million minimum liquidity requirement as of December 31, 2023, based on projected cash use, management anticipates that without additional cash funding the Company will not have sufficient cash on hand to comply with the minimum liquidity covenant or to fund operations, including $ 18.4 million of required interest payments associated with the Series 2022 Bonds, within the next 12 months, until the Company begins to collect cash from its seasonal firefighting operations in 2024.

The Series 2022 Bonds agreements provide that, with regard to covenant violations, other than non-payment of principal or interest, no event of default shall be deemed to have occurred so long as a reasonable course of action to remedy a violation commences within 30 days of written notification of non-compliance from the trustee and management diligently prosecutes the remediation plan to completion.

However, this plan is in progress and there is no assurance that management will be able diligently prosecute the remediation plan to completion.

The uncertainty regarding the company’s ability to diligently prosecute the remediation plan to completion and the potential impact on the bonds maturity as a result of the anticipated debt covenant violations at subsequent compliance dates or failure to make required interest payments, could result in the Series 2022 Bonds becoming immediately due and payable, which raises substantial doubt about our ability to continue as a going concern as further disclosed in “ Note 1 – Organization and Basis of Presentation.

The LOB loans are subject to financial covenants requiring the Company to maintain a 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.

The Company is in compliance with such financial covenants as of December 31, 2023.

Both of the loans 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).

As of December 31, 2022, the Company was in compliance with 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.

The Company is in compliance with such financial covenants as of December 31, 2023.

Amortization of debt issuance costs was $ 1.0 million and $ 0.6 million for the years ended December 31, 2023 and 2022, respectively.

Principal maturities of the outstanding debt as of December 31, 2023 are as follows:

Year Ending December 31:

$ in thousands Maturities

Thereafter 33,411

Total $ 211,374

NOTE 17 – COMMITMENTS AND CONTINGENCIES

Legal Matters

From time to time,

the Company is subject to various litigation and other claims in the normal course of business.

From time to time, the Company is subject to various litigation and other claims in the normal course of business.

No amounts have been accrued in the consolidated financial statements with respect to any matters.

Due to the nature of our business, we may become, from time to time, involved in routine litigation or subject to disputes or claims related

to our business activities.

In the opinion of our management, there are no pending litigation, disputes or claims against us which, if decided adversely, will have a material adverse effect on our financial condition, cash flows or results of

Due to the nature of our business, we may become, from time to time, involved in routine litigation or subject to disputes or claims related to our business activities.

In the ordinary course of its operations, the Company will continue to vigorously enforce its legal and contractual rights to ensure that its business and operations continue on an unimpaired basis.

On April 13, 2018, the Company executed an aircraft purchase agreement with Longview Aviation Asset Management, Inc.

and Viking Air

Limited (Viking) for the purchase of six Viking CL415EAF aircraft.

Payments made under the aircraft purchase agreement were $9,098 thousand and $19,381 thousand for the years ended December 31, 2022 and 2021, respectively.

Un-invoiced commitments were $9,098 thousand and $18,196 thousand as of December 31, 2022 and 2021, respectively.

On January 21, 2021, the Company entered as statement of work with Viking Air Limited (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.

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 $9,810 thousand for the year ended December 31, 2022.

There were no payments made for construction of the hangar under the Sievert contract for the year ended December 31, 2021.

Un-invoiced commitments were $3,756 thousand as of December 31, 2022.

As of December 31, 2022, future payments related to the purchase of aircraft under the aircraft purchase agreement and for the

construction of the hangar are as follows:

As of December 31:

and Viking Air Limited (“Viking”) for the purchase of six Viking CL-415EAF aircraft.

For the year ended December 31, 2022, the Company paid $ 9.1 million and received its sixth Viking CL-415EAF, the final remaining aircraft under the aircraft purchase agreement, in 2023.

Uninvoiced commitments were zero and $ 9.1 million as of December 31, 2023 and 2022.

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

Payments made under the agreement were $ 3.2 million and $ 9.8 million for the years ended December 31, 2023 and 2022, respectively.

Un-invoiced commitments were zero and $ 3.8 million as of December 31, 2023 and 2022.

Under ASC 842, leases are separated into two classifications:

operating leases and financial leases.

Lease classification under ASC 842 is

relatively similar to ASC 840.

Lease classification under ASC 842 is relatively similar to ASC 840.

For a lease to be classified as a finance lease, it must meet one of the five finance lease criteria:

(1) transference of title/ownership to the lessee, (2) reasonably certain to exercise a purchase option,

(3) lease term for major part of the remaining economic life of the asset, (4) present value represents substantially all of the fair value of the asset and (5) asset specialization.

Any lease that does not meet these criteria is

classified as an operating lease.

(1) transference of title/ownership to the lessee, (2) reasonably certain to exercise a purchase option, (3) lease term for major part of the remaining economic life of the asset, (4) present value represents substantially all of the fair value of the asset and (5) asset specialization.

Any lease that does not meet these criteria is classified as an operating lease.

ASC 842 requires all leases to be recognized on the Company’s balance sheet.

Specifically, for operating leases, the Company recognizes an ROU asset and a corresponding lease liability upon lease commitment.

Specifically, for operating leases, the Company recognizes a right-of-use asset and a corresponding lease liability upon lease commitment.

Company as a lessee

The Company is

the lessee in a lease contract when the Company obtains the right to use the asset.

Operating leases are included in the line items.

The ROU asset represents the Companys right to use an underlying asset for the lease term and lease

obligations represent the Companys obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date.

Company has also elected the short-term lease exception.

Leases with a term of 12 months or less at inception are not recorded on the Consolidated Balance Sheets and are expensed on a straight-line basis over the lease term in our Consolidated

Statements of Operations.

The Company is the lessee in a lease contract when the Company obtains the right to use the asset.

The right-of-use asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date.

The Company has also elected the short-term lease exception whereby leases with a term of 12 months or less at inception are not recorded on the Consolidated Balance Sheets and are expensed on a straight-line basis over the lease term in our Consolidated Statements of Operations.

The Company determines the lease term by agreement with the lessor.

Options to renew are considered in lease terms if reasonably considered to be exercised.

ASC 842 requires a lessee to use the rate implicit in the lease whenever that rate is

readily determinable, otherwise the incremental borrowing rate (IBR) should be used.

Given the nature of the Companys lease portfolio, which consists of leases of hangar spaces, aircraft, vehicles, copiers, buildings, aircraft

equipment, this information is not readily available.

As a result, the Company is not able to use the borrowing rate implicit in the lease but will use its incremental borrowing rate as the discount rate.

The IBR is the rate of interest that a

lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

The determination of the incremental borrowing rate requires judgment and is determined using

the Companys current unsecured borrowing rate.

The following schedule represents the components of the Companys operating and

finance lease assets and liabilities as of December 31, 2022 and 2021:

Options to renew are considered in lease terms if reasonably expected to be exercised.

ASC 842 requires a lessee to use the rate implicit in the lease whenever that rate is readily determinable, otherwise the incremental borrowing rate (“IBR”) should be used.

Given the nature of the Company’s lease portfolio, which consists of leases of hangar spaces, aircraft, vehicles, copiers, buildings, aircraft equipment, the implicit rate is often unavailable.

In such cases, the Company uses its incremental borrowing rate as the discount rate.

The IBR is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

The determination of the IBR requires judgment and is derived from the Company’s weighted average cost of capital.

Components of the Company’s operating and finance lease assets and liabilities as of December 31, 2023 and 2022 are as follows:

As of December 31,

Classification

Operating lease

right-of-use asset

Other noncurrent assets

Finance lease

right-of-use asset

Property, plant and equipment, net

Operating lease

right-of-use liabilities (current)

Operating right-of-use liability (current)

Finance lease

right-of-use liabilities (current)

Accrued expenses and other current liabilities

Operating lease

right-of-use liabilities (non-current)

Operating right-of-use liability (noncurrent)

Finance lease

right-of-use liabilities (non-current)

Accrued expenses and other noncurrent liabilities

$s in thousands Financial Statement Line Item 2023 2022

Operating lease right-of-use asset Other noncurrent assets $ 7,777 $ 671

Finance lease right-of-use asset, net Property, plant and equipment, net 40 62

Operating lease right-of-use liabilities (current) Operating right-of-use liability (current) $ 2,153 $ 21

Finance lease right-of-use liabilities (current) Accrued expenses and other current liabilities 22 23

Operating lease right-of-use liabilities (non-current) Operating right-of-use liability (noncurrent) 5,779 755

Finance lease right-of-use liabilities (non-current) Accrued expenses and other noncurrent liabilities 24 46

The Company leases various property and premises on a short-term basis and leases some of its premises under non-cancelable operating leases that expire on various dates through January 2051.

The Company recorded

$493 thousand and $785 thousand of expenses associated with these operating leases in Cost of Revenues and Selling, general and administrative expense in the Consolidated Statements of Operations for the years ended December 31, 2022

The Company recorded $ 1.5 million and $ 0.5 million of expenses associated with these operating leases in Cost of Revenues and Selling, general and administrative expense in the Consolidated Statements of Operations for the years ended December 31, 2023 and 2022.

The Company recorded expenses associated with finance leases in Cost of revenues and Selling, general and administrative expense in the Consolidated Statements of Operations.

Operating lease cost includes $204 thousand of short-term

lease expense and $182 thousand of variable lease expense for the year ended December 31, 2022.

Operating lease cost includes $104 thousand of short-term lease expense and $576 thousand of variable lease expense for the year

ended December 31, 2021.

Operating lease cost includes approximately $ 40,000 of short-term lease expense and approximately $ 0.1 million of variable lease expense for the year ended December 31, 2023.

Operating lease cost includes $ 0.2 million of short-term lease expense and $ 0.2 million of variable lease expense for the year ended December 31, 2022.

Supplemental cash flow information related to leases is as follows:

Year Ended December 31,

$s in thousands 2023 2022

Cash paid for amounts included in the measurement of lease liabilities:

2 unchanged sentences

Financing cash flows from finance leases 6 9

assets obtained in exchange for lease liabilities:

Right-of-use assets obtained in exchange for lease liabilities:

Operating leases $ 7,940 $ 130

As of December 31, 2022, future minimum lease payments with a weighted average

remaining lease term of 24.6 years are as follows:

Finance Leases

As of December 31, 2023, future minimum lease payments are as follows:

$s in thousands Operating Leases Finance Leases

Year Ending December 31:

2024 $ 2,153 $ 26

2025 2,153 21

Thereafter 2,307 —

Total lease payments 11,104 51

interest ( 3,172 ) ( 5 )

Total lease liabilities $ 7,932 $ 46

Weighted average remaining lease term:

8.8 years 2.0 years

Weighted average discount rate:

Company as a lessor

The Company acts as a lessor of a facility and records this as Other Revenue in the Consolidated Statements of Operations.

Lease revenue was

$253 thousand and $276 thousand for the years ended December 31, 2022 and 2021, respectively.

Lease revenue was $ 12,000 and $ 0.3 million for the years ended December 31, 2023 and 2022, respectively.

The lease is a sublet arrangement and classified as an operating lease.

This lease expired in 2023 and was not renewed.

The minimum lease

payments received were recognized on a straight-line basis over the lease term.

The minimum lease payments received were recognized on a straight-line basis over the lease term.

The leased asset was included in Property, Plant and Equipment, net in the Consolidated Balance Sheets and depreciated over its estimated useful life.

There were no

variable lease conditions or purchase options.

Note 15 Collaborations

On February 22, 2022, the Company entered into a collaboration agreement (the Collaboration Agreement) with Overwatch Imaging,

(Overwatch), a Delaware corporation, under which the Company and Overwatch collaborate to develop and implement FireTrac.

FireTrac is a program in which the Company will collect timely imagery of areas affected by wildland fire

using Overwatchs products and services.

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

the Collaboration Agreement.

Overwatchs 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 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.

The Company does not consider its obligations under the Collaboration Agreement as an output of the Companys ordinary activities in exchange for consideration and Overwatch is not considered a

customer under ASC 606.

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

For the year ended

December 31, 2022, the Company recorded $832 thousand of purchases of imaging systems under the Collaboration Agreement in Property, plant and equipment, net, and $366 thousand of engineering services provided by Overwatch under the

Collaboration Agreement in Selling, general and administrative expense.

There were no variable lease conditions or purchase options.

Contingencies

On November 17, 2023, the Company entered into a series of agreements with MAB and its subsidiary designed to facilitate the purchase and return to service of four Spanish Scoopers originally awarded to the Company in September 2023 via a public tender process from the Government of Spain.

The terms of the agreements provide that the Company will manage the return to service upgrades of the Spanish Scoopers while they are owned and funded by MAB.

The Company has the right, but not the obligation, to acquire each plane as it is ready to be contracted and returned to service.

In the event that Bridger does not purchase the aircraft within the time periods set forth in the agreements, then either party may initiate a sales process for the sale of all aircraft that have not been purchased by the Company, which sales process the Company will oversee and manage.

If the aircraft are sold to a third party through such process, then the Company must pay the MAB’s subsidiary a cash fee equal to the amount, if any, by which the aggregate price of the Company’s purchase options for such aircraft exceeds the consideration paid by the third-party purchaser for the same aircraft, not to exceed $ 15.0 million in aggregate.

If the aircraft are not sold to a third party and MAB’s subsidiary has not otherwise entered into an operating lease with a third party for the aircraft, then the Company must pay MAB’s subsidiary $ 15.0 million.

NOTE 18 – STOCK-BASED COMPENSATION

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

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).

Notwithstanding the above, any unvested Time-Vesting Incentive Units will become vested if a qualifying change of control event occurs prior to the respective awards four year

service-based vesting period.

Incentive Units

During the year ended December 31, 2022, the Company 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”).

Notwithstanding the above, any unvested Time-Vesting Incentive Units will become vested if a qualifying change of control event occurs prior to the respective award’s four year service-based vesting period.

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.

Upon vesting of each Incentive Unit, the Company will issue 0.96246 shares of Common Stock to the Incentive Unit holder.

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

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 December 31, 2022.

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 December 31, 2023.

Forfeitures are accounted for as they occur.

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

The value of the Companys common shares is derived through an option pricing model, which incorporates various assumptions.

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

The fair value of the Company’s Incentive Units was derived through an option pricing model, which incorporated various assumptions.

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

Expected volatility was calculated based on the observed equity volatility for comparable companies.

The expected time to liquidity event is based

on managements estimate of time to an expected liquidity event.

The expected time to liquidity event was based on management’s estimate of time to an expected liquidity event.

The dividend yield was based on the Company’s expected dividend rate.

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

zero-coupon issues.

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

Treasury zero-coupon issues.

The weighted-average assumptions the Company used in the option pricing model for 2022 are as follows:

2 unchanged sentences

Risk-free interest rate 1.26 %

Term (in years)

Term 5.00 years

Discount for lack of marketability 30 %

Incentive Unit activity under the Plan for the period from January 1, 2022 to December 31, 2022 was

Time-Vesting Incentive Units

Exit-Vesting Incentive Units

Unvested as of January 1, 2022

Unvested as of December 31, 2022

On October 4, 2021, one of the Companys board members resigned from his board seat.

At the time of

his resignation, 25% of his Time-Vesting Incentive Units had vested and the Company agreed to accelerate the vesting of all of his remaining unvested Time-Vesting Incentive Units and Exit-Vesting Incentive Units.

For the year ended December 31, 2022, the Company recognized stock-based compensation

expense of $9 thousand within Selling, general and administrative expense on the Consolidated Statements of Operations.

For the year ended December 31, 2021, the stock-based compensation expense related to the Incentive Units did not have

a material impact on the Companys consolidated financial statements.

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.

Incentive Unit activity for the period from January 1, 2023 to December 31, 2023 is as follows:

Time-Vesting Incentive Units Exit-Vesting Incentive Units

Awards Weighted

fair value Number of

Awards Weighted

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

Granted — — — —

Vested ( 40,404 ) 0.01 — —

Forfeited ( 121,212 ) 0.22 ( 40,404 ) 0.22

Outstanding as of December 31, 2023 — $ — 40,404 $ 0.01

For the years ended December 31, 2023 and 2022, the Company recognized stock-based compensation expense related to Incentive Units of $ 0 and $ 9,000 within Selling, general and administrative expense on the Consolidated Statements of Operations, respectively.

As of December 31, 2023 there was $ 0 of unrecognized compensation expense related to unvested Incentive Units.

Restricted Stock Units

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

RSUs are settled in shares of Common Stock as the RSUs vest.

The RSUs accrue dividend equivalents associated with the underlying shares of Common Stock as the Company declares dividends.

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

For the purposes of calculating compensation expense, the fair value of RSUs is the closing stock price on the date of grant.

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

Upon vesting of each RSU, the Company will issue one share of Common Stock to the RSU holder.

RSU activity for the period from January 1, 2023 to December 31, 2023 is as follows:

Awards Weighted

Outstanding as of December 31, 2022 — $ —

Granted 9,481,469 8.34

Vested ( 2,423,578 ) 8.97

Forfeited/Cancelled ( 433,432 ) 5.50

Outstanding as of December 31, 2023 6,624,459 $ 8.30

The total fair value of RSUs vested during the year ended December 31, 2023 was $ 24.6 million, based on the closing stock price on the date of vesting.

For the year ended December 31, 2023, the Company recorded stock-based compensation expense related to RSUs of $ 2.1 million and $ 44.6 million within Total cost of revenues and Selling, general and administrative expense, respectively, on the Consolidated Statements of Operations.

Stock-based compensation expense recorded to Selling, general and administrative expense for the year ended December 31, 2023 includes $ 21.6 million of expense associated with 2,400,350 RSUs that vested immediately upon Closing.

As of December 31, 2023, there was $ 31.0 million of unrecognized total compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average period of 2.9 years.

NOTE 19 – RELATED PARTY TRANSACTIONS

In July 2022, the Company paid $3,850 thousand in cash for the acquisition of the Pilatus PC-12

aircraft from Mr.

Timothy Sheehy, the Chief Executive Officer without any guarantees given or received.

After the purchase, the Company repaired and upgraded the Pilatus PC-12 aircraft for use of the

Companys business.

As of December 31, 2022, the Company had no outstanding payables or commitments related to the purchase of the Pilatus PC-12 aircraft.

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 arms length basis during the public offering for the 2022 Bond, and on the same terms and conditions that were offered to all Bond purchasers.

The Company has paid approximately $128 thousand in interest to these three bond holders.

Refer to Note 13 Long-term Debt.

For the year ended December 31, 2023, the Company earned $ 0.4 million in revenues from services performed on an aircraft under the ownership of Mr.

Timothy Sheehy, the Company’s Chief Executive Officer.

For the years ended December 31, 2023 and 2022, the Company incurred $ 0.5 million and $ 0.3 million, respectively, in training expenses provided by an entity in which Mr.

Timothy Sheehy has a partial ownership, with $ 0.1 million and $ 0.3 million in related outstanding accounts payable as of December 31, 2023 and 2022, respectively.

On November 17, 2023, the Company entered into a series of agreements designed to facilitate the purchase and return to service of the Spanish Scoopers originally awarded to our wholly-owned subsidiary, Bridger Aerospace Europe, S.L.U.

(“BAE”), in September 2023 via a public tender process from the Government of Spain for € 40.3 million.

Under the terms of the agreements, we agreed to sell the entire outstanding equity interest in BAE to MAB and purchase $ 4.0 million of non-voting Class B units of MAB.

ASSF Holdings LP (“Avenue Investor”) made capital contributions totaling $ 13.0 million in exchange for 13,031 voting Class A Units of MAB.

Avenue Investor holds approximately 10 % of Bridger’s outstanding convertible Series A Preferred Stock which represents approximately 6.6 % interest in BAER Common Stock on a fully diluted basis.

On July 10, 2023, the Company entered into two operating lease agreements, each for a Pilatus PC-12 under the ownership of Mr.

Timothy Sheehy.

The Company recorded approximately $ 6.3 million of right-of-use assets, $ 1.7 million of right-of-use current liabilities, and $ 4.6 million of right-of-use noncurrent liabilities as of December 31, 2023, and incurred approximately $ 0.8 million in lease expense for year ended December 31, 2023, associated with the two related party leases.

On July 21, 2022, the Company closed on the Series 2022 Bonds, upon which the Company received from aggregate proceeds of $ 135.0 million on July 21, 2022 and $ 25.0 million on August 10, 2022.

In connection with the original issuance, three senior executives of the Company purchased approximately $ 10.0 million of the Series 2022 Bonds, which purchases were entered into on an arm’s length basis during the public offering for the Series 2022 Bonds, and on the same terms and conditions that were offered to all Bond purchasers.

The Company has paid approximately $ 1.2 million and $ 0.1 million in interest to these three bond holders during the years ended December 31, 2023 and 2022, respectively, and incurred $ 1.2 million and $ 0.4 million in interest expense for the years ended December 31, 2023 and 2022, respectively.

Refer to “Note 16 – Long-Term Debt” included in this Annual Report on Form 10-K for additional information on the Series 2022 Bonds.

In July 2022, the Company paid $ 3.9 million for the acquisition of a Pilatus PC-12 aircraft from Mr.

Timothy Sheehy without any guarantees given or received.

After the purchase, the Company repaired and upgraded the Pilatus PC-12 aircraft for the Company’s operational use.

NOTE 20 – MEZZANINE EQUITY

On April 25, 2022, the Company authorized and issued 315,789.473684 Series C Preferred shares with a par value of $0.001 per share for

aggregate proceeds of $288,516 thousand, net of issuance costs of $11,484 thousand.

The Series C Preferred shares rank senior to the Companys common shares and rank subordinate to the Companys Series A Preferred shares, which

were later redeemed in 2022, with respect to the distribution of assets upon liquidation or certain triggering events.

The Series C Preferred shares do not participate in earnings of the Company and are

non-voting shares.

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

shares accrue interest daily at 7% per annum for the first year, 9% per annum for the second year and 11% per annum thereafter and are compounded semi-annually at June 30 th and December 31 st of each year.

Following the consummation of a qualified public offering, the Series C Preferred shares 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 Series C Preferred shares was $15,344 thousand as of December 31, 2022 recorded to increase the redemption amount in mezzanine equity.

The Series C Preferred shares are convertible at the election of the holder into shares of the Companys Class B Common shares 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 Class B Common shares as determined by dividing the original issue price,

plus accrued interest by a conversion price in effect at the time of conversion.

The Series C Preferred shares conversion price shall initially be equal to $12.929104.

The applicable conversion price is subject to future adjustments upon the

occurrence of a qualified public offering.

The shares are mandatorily redeemable by the Company 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 is 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 is equal to the stated value, plus accrued but unpaid

The Series C Preferred shares are also redeemable upon certain triggering events outside of the control of the Company.

The redemption events include redemption by the holder after March 29, 2027 and prior to a qualified public

offering, or a fundamental change in the Companys voting and governance structure such as the sale of the Company or its subsidiaries representing more than 50% of the Companys voting stock or a similar liquidity event.

Given the conversion feature is considered substantive, the mandatory redemption date is not certain and the optional redemption is upon the

occurrence of certain events that are considered not solely within the Companys control, the Series C Preferred shares are 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 Series C Preferred shares contains a clause which allows for an increase of 2% interest per annum to be accrued by the holders of the 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 is cured or remediated.

The Company expects 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 is $1,039 thousand recorded as a liability in the consolidated balance sheets and remeasured to fair

value at each balance sheet date with changes in fair value recorded within Interest expense in the 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

inception and as of December 31, 2022.

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 $ 288.5 million, net of issuance costs of $ 11.5 million.

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 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 $ 15.3 million 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 $ 332.7 million 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 shares 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.

The conversion price of Legacy Bridger Series C Preferred Shares was initially equal to $ 12.929104 .

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

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 Shares 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.

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 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 $ 1.0 million 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 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 14 – Interest Rate Swap and Freestanding Derivative.”

The Company determined the fair value of the other features requiring bifurcation, both individually and in the aggregate were immaterial at inception and as of December 31, 2022.

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

As of December 31, 2022, it is probable that the Series C Preferred shares may become redeemable at either the holders option on or

after March 29, 2027 and prior to the consummation of a qualified public offering or in the event of a qualified public offering.

The Company has elected to recognize changes in redemption value immediately, adjusting the preferred shares to

the maximum redemption value at each reporting date.

As of December 31, 2022, the Series C Preferred shares had a carrying value of $331,134 thousand and a redemption value of $489,022 thousand.

Redeemable Series C Preferred Shares

Issuance of Series C Preferred shares

315,789.473684

As of December 31, 2022, it was probable that the Legacy Bridger Series C Preferred Shares may become redeemable at either the holder’s option on or after March 29, 2027 and prior to the consummation of a qualified public offering or in the event of a qualified public offering.

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 of $ 489.0 million.

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 $ 22.2 million as of December 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 December 31, 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 $ 332.7 million, the 50 % multiplier, valued at $ 156.4 million, was removed.

As of December 31, 2023, the Series A Preferred Stock had both a carrying value and redemption value of $ 354.8 million.

Refer to table below.

As of December 31, 2023 the fair value of the embedded derivative related to the event of default is $ 0.9 million recorded as a liability on the 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 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 December 31, 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 $ 12.90 per share to $ 11.00 per share 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, decreasing income attributable to common stockholders in the computation of the earnings (loss) per share by $ 48.3 million for the year ended December 31, 2023.

As of December 31, 2023, there are 32,258,180 shares of Common Stock issuable upon conversion.

Redeemable Series A Preferred Stock

$s in thousands Shares Amounts

Issued as of closing date 315,789.473684 $ 332,659

Adjustment to maximum redemption value — 22,181

Balance as of December 31, 2023 315,789.473684 $ 354,840

315,789.473684

Note 19 Mandatorily Redeemable Preferred Stock

Series B Preferred Shares

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

The 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 Series B Preferred shares plus their accrued interest in March of 2022.

Accrued interest for these Series B Preferred shares was $6,413 thousand for the year

ended December 31, 2021.

The shares were mandatorily redeemable by the Company 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 the Company or its subsidiaries representing more than 50% of the Companys voting stock or assets, a

qualified IPO or a similar liquidity event.

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

The shares had preference to the common shares of the

Company, were non-voting and did not participate in the earnings of the Company.

These Series B Preferred shares accrued interest at 17.5% annually, compounded quarterly.

If not redeemed on or prior to

March 31, 2022, the series B preferred stock would have accrued interest at 21.5% annually, compounded quarterly.

As the shares of Series B Preferred shares were mandatorily redeemable at a specified date,

the security was classified as a liability in the Consolidated Balance Sheets.

On April 25, 2022, the Company used a portion of the

proceeds from the issuance of the Series C Preferred shares to redeem all 60,000,000 of the Companys outstanding Series B Preferred shares for $69,999 thousand, inclusive of $9,999 thousand in accrued interest.

Series A Preferred Shares

Company was authorized to issue 10,500,000 shares of Series A-1 and A-2 Preferred shares with a par value of $0.001 share for $105,000 thousand.

The Series A-1 and A-2 Preferred Shares ranks senior to the Companys common shares and Series C Preferred shares with respect to distribution of assets upon liquidation or certain

triggering events, but do not participate in earnings of the Company.

The Series A-1 and A-2 Preferred shares are voting and

non-voting shares, respectively.

On April 25, 2022, the Company used the proceeds from the

issuance of the Series C Preferred to redeem 4,444,444 shares of the 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 Consolidated Balance Sheets.

On April 25, 2022, the

Company and its investors included a new mandatory redemption provision requiring the Series A-1 and Series A-2 Preferred shares to be redeemed on April 25, 2032.

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

The Company elected the

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

The modification

of the 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 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 Series A Preferred shares accrue interest on a liquidation preference defined as the combined capital contributions plus accrued preferred

interest amounts at a rate of 12% per annum.

The Series A-1 and

A-2 Preferred shares are redeemable upon certain triggering events outside of the control of the Company in the event of board expansion and deemed liquidation.

Failure to pay the Series A Preferred shares

interest amount on a timely basis triggers a board expansion event that provides the holders of the Series A Preferred shares the option to obtain control of the Companys board of directors and initiate a triggering event.

The triggering

events include the sale of the Company or its subsidiaries representing more than 50% of the Companys voting stock or assets, a qualified IPO or a similar liquidity event.

The Series A-1 and A-2 Preferred shares are redeemable at any time at the option of the Company 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.

The Company identified certain redemption features that would be required to be considered for

The Company 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, the Company used the proceeds from the 2022 Bonds plus cash on hand to redeem in full the

remaining 6,055,556 shares of the Series A-1 and A-2 shares for aggregate proceeds of $136,250 thousand.

The fair values of the 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.

As of December 31, 2021, the Company had 10,243,936 shares of Series A-1 Preferred shares and 256,064 shares of Series A-2 Preferred shares issued and outstanding.

As of December 31, 2021, the Series

A-1 and A-2 Preferred shares had a carrying value of $105,000 thousand and a redemption value of $146,668 thousand.

Note 20 Net Loss Per Share

Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted-average number of common shares

Change in fair value of Series A-1 and A-2 Preferred shares and the adjustment to maximum redemption value of Series C Preferred shares are subtracted from

net loss attributable to the Company in determining net loss per share attributable to common shareholders.

Diluted net loss per share is

computed by dividing net loss attributable to common shareholders by the weighted-average number of common shares outstanding plus the number of Class D common shares issuable upon the vesting of the Time-Vesting Incentive Units and

Exit-Vesting Incentive Units to the extent the effect would be dilutive.

The following table sets forth the computation of the

Companys basic and diluted earnings (loss) per share:

Year Ended December 31,

Basic and diluted net loss per share

Series C Preferred shares adjustment to maximum redemption value

Series A Preferred shares adjustment for redemption, extinguishment and accrued interest

Net loss attributable to common shareholders basic and diluted

Weighted average shares outstanding - basic and diluted

Net loss per share attributable to common shareholders - basic and diluted

The 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):

For the year ended December 31,

Series C Preferred shares

Class D common shares upon vesting

Note 21 Members Deficit

Common Shares The Company has 30,000,000 shares of Class A Common shares issued and outstanding as of

December 31, 2022 and 2021.

The holders of these shares are entitled to one vote for each share held of record on all matters submitted to a vote of our shareholders.

These Class A shares were issued to ElementCompany, LLC.

The Company has 9,756,130 shares of Class B Common shares issued and outstanding as of December 31, 2022 and 2021.

The holders of

these shares are entitled to one vote for each share held of record on all matters submitted to a vote of our shareholders.

The Company has 243,871 shares of Class C Common shares issued and outstanding as of

December 31, 2022 and 2021.

The Company also has 606,061 shares of Class D Common shares issued and outstanding as of December 31, 2022 and 2021, respectively.

These Class C and Class D shares are non-voting.

The current voting power of the Company follows 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 will remain in place while the holders of Class B Common shares in aggregate hold at least 10% of the common

shares outstanding and prior to any initial public offering, at which point voting power changes, based on the relevant shares outstanding.

This structure will remain in place unless a board expansion event occurs as defined in the operating

Note 22 Subsequent Events

The Company evaluated its activities through March 20, 2023, the date at which the consolidated financial statements were available to be

On January 23, 2023, the Company granted its executives and senior management a total of 8,826,168 shares of restricted

stock units (RSUs) under New Bridgers 2023 Omnibus Incentive Plan (2023 Omnibus Plan) in connection with the Business Combination.

The RSUs are subject to performance and service vesting conditions with 21.5% of the

RSUs vested upon the Closing Date and the remaining 78.5% of the RSUs will vest annually from the Closing Date over graded service vesting periods of three years and six years for the executives and senior management, respectively.

The estimated

grant date fair value of the RSUs is approximated to be $88.3 million based on the estimated fair value of New Bridgers common stock of $10.00 per share based on the Transaction Agreements.

On January 24, 2023, JCIC completed the Business Combination with the Company contemplated by the Transaction Agreements entered into on

August 3, 2022.

The Business Combination will be accounted for as a reverse recapitalization in accordance with GAAP.

Under this method of accounting, JCIC will be treated as the acquired company for financial reporting purposes.

Accordingly, for accounting purposes, the financial statements of Bridger Aerospace Group Holdings, Inc will represent a continuation of the financial statements of the Company with the Business Combination treated as the equivalent of the Company

issuing stock for the net assets of JCIC, accompanied by a recapitalization.

On the Closing Date, pursuant to the Transaction Agreements:

(i) JCIC and the Company became a wholly owned subsidiary of a new public entity that was renamed Bridger Aerospace Group Holdings, Inc., (ii) each of the Companys common shares then issued and outstanding was automatically surrendered

and exchanged into 0.96246 share of New Bridgers common stock, rounded down to the nearest share for each holder, and (iii) each of the Series C Preferred shares was automatically surrendered and exchanged into one New Bridgers

Redeemable Legacy Bridger Series C Preferred Shares

$s in thousands Shares Amounts

Issuance of Legacy Bridger Series C Preferred shares 315,789.473684 $ 286,333

Adjustment to maximum redemption value — 202,689

Balance as of December 31, 2022 315,789.473684 $ 489,022

NOTE 21 – MANDATORILY REDEEMABLE PREFERRED SHARES

Legacy Bridger Series B Preferred Shares

Legacy Bridger had 60,000,000 shares of 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 the 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 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 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 shares of Legacy Bridger Series B Preferred shares were mandatorily redeemable at a specified date, the security was classified as a liability in the 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 $ 70.0 million, inclusive of $ 10.0 million in accrued interest.

There were no Legacy Bridger Series B Preferred Shares outstanding as of December 31, 2023 or 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 $ 105.0 million.

The 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 do 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.

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 $ 100.0 million.

The loss on redemption of $ 34.6 million was reflected as a reduction to Accumulated deficit on the 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 were 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 $ 132.3 million at modification.

The modification of the Legacy Bridger Series A-1 and A-2 Preferred Shares was accounted for as an extinguishment, with the change in fair value of $ 45.6 million recorded to Accumulated deficit on the Consolidated Balance Sheets with no gain or loss recorded to net loss.

The loss on extinguishment was 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 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.

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 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 Series 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 Shares for aggregate proceeds of $ 136.3 million.

The fair values of the Legacy Bridger Series A-1 and A-2 Preferred Shares were increased by $ 3.9 million 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-1 and A-2 Preferred Shares outstanding as of December 31, 2023 or December 31, 2022.

NOTE 22 – INCOME TAXES

The components of our loss before income taxes for the years ended December 31, 2023 and 2022, are as follows:

For the Years Ended December 31,

$s in thousands 2023 2022

Domestic $ ( 77,659 ) $ ( 42,125 )

Foreign ( 1 ) —

Loss before income taxes $ ( 77,660 ) $ ( 42,125 )

The components of the current tax provision and deferred tax benefit for the years ended December 31, 2023 and 2022, are as follows:

For the Years Ended December 31,

$s in thousands 2023 2022

Current tax provision:

Federal $ — $ —

State and local 40 —

Total current tax provision 40 —

Deferred tax benefit:

Federal ( 273 ) —

State and local ( 69 ) —

Total deferred tax benefit ( 342 ) —

Income tax benefit $ ( 302 ) $ —

The reconciliation between the statutory federal income tax rate and the effective income tax rate for the years ended December 31, 2023 and 2022, are as follows:

For the Years Ended December 31,

Income tax - at U.S.

statutory tax rate 21.0 % — %

State and local taxes - net of federal 3.3 % — %

Nondeductible officer compensation ( 7.5 ) % — %

Tax credits — % — %

Valuation allowance ( 15.5 ) % — %

Other ( 0.9 ) % — %

Effective rate of tax 0.4 % — %

In addition to the US federal statutory income tax rate, significant recurring items that affect the Company’s income tax rate are state and local income taxes, nondeductible officer compensation, and change in valuation allowance recognition.

The components of the total net deferred tax assets and liabilities as of December 31, 2023 and 2022, consisted of the following:

As of December 31,

$s in thousands 2023 2022

Deferred tax assets:

Partnership $ 17,750 $ —

Stock compensation 6,282 —

Interest expense limitation - 163(j) 5,690 —

Net operating losses 21,400 —

Total deferred tax assets 51,865 —

Valuation allowance for deferred tax assets ( 51,523 ) —

Net deferred tax assets 342 —

Deferred tax liabilities:

Intangibles - Ignis ( 342 ) —

Total deferred tax liabilities ( 342 ) —

Net deferred tax assets (liabilities) $ — $ —

The total deferred tax liability presented in the financial statements as of December 31, 2023 is subject to certain significant estimates.

The valuation allowance recorded as of December 31, 2023 is reliant on the scheduling of future taxable income.

This is highly subjective in nature and may materially change within the next 12 months.

As of December 31, 2023, the Company had $ 81.2 million of federal net operating loss carryforwards available, and all have an unlimited carryforward period.

Future federal NOL utilization is limited to 80% of taxable income on an annual basis.

As of December 31, 2023, the Company had $ 81.2 million of state net operating loss carryforwards available.

As of December 31, 2023, the Company had $ 21.6 million of interest expense limitation available, and all of the limitation has an unlimited carryforward period.

Future interest expense utilization is limited to 30% of taxable income on an annual basis.

Due to uncertainty regarding future utilization, a valuation allowance has been recorded in respect of all federal and state deferred tax assets, inclusive of federal and state net operating loss carryforwards and state credit carryforwards.

The Company has a valuation allowance of $ 51.5 million as of December 31, 2023 due to management’s determination that it is more likely than not that the benefit of such loss and credit carryforwards will not be fully realized.

NOTE 23 – EARNINGS (LOSS) PER SHARE

Earnings (loss) per share of Common Stock is calculated in accordance with ASC 260, Earnings per share.

Earnings (loss) per share – Basic is calculated by dividing net income (loss) attributable to Common Stockholders by the weighted-average shares of Common Stock outstanding.

Earnings (loss) per share – Diluted is based on the average number of shares of Common Stock used for the Earnings (loss) per share - Basic 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.

Earnings (loss) attributable to Common Stockholders – Basic and 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 (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 outstanding immediately after the Closing to effect the reverse recapitalization.

Subsequent to the Closing, earnings (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 earnings (loss) per share:

For the years ended December 31,

($s in thousands, except per share amounts) 2023 2022

Net loss $ ( 77,358 ) $ ( 42,125 )

Adjustments to Net loss:

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

Legacy Bridger Series A Preferred Shares—adjustment for redemption, extinguishment and accrued interest — ( 85,663 )

Legacy Bridger Series C Preferred Shares - adjustment to maximum redemption value — ( 202,689 )

Series A Preferred Stock—adjustment to eliminate 50% multiplier 156,363 —

Series A Preferred Stock—adjustment to maximum redemptions value ( 22,181 ) —

Earnings (loss) attributable to Common Stockholders – Basic and Diluted $ 8,524 $ ( 330,477 )

Weighted average Common Stock outstanding—Basic 45,269,201 40,287,478

Weighted average effect of dilutive securities:

Series A Preferred Stock 32,258,180 —

Upon the Closing, the Company expects to adjust the carrying value of New Bridgers Series A Preferred

Stock to approximately $332,659 thousand, to exclude an amount calculated from the product of the initial issue price multiplied by 0.50 historically included in the carrying value of Series C Preferred shares.

Additionally, the Closing

triggered a down round conversion feature embedded in the Series C Preferred shares.

The Company expects to recognize the effect of the down round conversion feature as a deemed dividend, increasing the loss available to common stockholders in the

computation of net loss per share by approximately $82,074 thousand based on a preliminary fair value estimate.

In addition, the

Company assumed all of JCICs issued and outstanding securities, which were converted into New Bridgers securities upon the Closing, including:

(i) 2,084,357 shares of New Bridgers common stock held by public shareholders, (ii)

2,603,189 shares of New Bridgers common stock held by JCICs sponsor and independent directors, and (iii) 26,650,000 warrants issued by JCIC upon its initial public offerings (the Warrants), of which 17,250,000 were issued to

public shareholders (Public Warrants) and 9,400,000 were issued through a private sale (Private Placement Warrants).

Each of the Warrants allows the holder to purchase one share of New Bridgers common stock at $11.50

The Warrants remained liability classified instruments upon assumption at the Closing Date.

The estimated fair value of the Warrants on the date of assumption is approximated to be $5.9 million based on the trading price of the

Public Warrants on the date of assumption, which was $0.22 per Warrant.

On January 25, 2023, Bridger Aerospace Group Holdings, Inc.

began trading on the NASDAQ

under the ticker symbol BAER.

On February 14, 2023, the Company paid $9.1 million and received its 6 th Viking CL415EAF, the remaining aircraft under the aircraft purchase agreement with Longview Aviation Asset Management, Inc.

See Note 14 Commitments and Contingencies for further

Unvested Restricted Stock Units 540,713 —

Unvested Legacy Bridger Incentive Units 38,800 —

Sponsor Earnout Shares 801,123 —

Weighted average Common Stock outstanding - Diluted 78,908,017 40,287,478

Earnings (loss) per share - Basic $ 0.19 $ ( 8.20 )

Earnings (loss) per share - Diluted $ 0.11 $ ( 8.20 )

The following table summarizes the potentially dilutive common shares that were excluded from diluted Earnings (loss) per share - Diluted computations because the effect would have been anti-dilutive:

For the years ended December 31,

Legacy Bridger Series C Preferred Shares — 25,611,505

Public Warrants 17,249,874 —

Private Placement Warrants 9,400,000 —

Unvested Legacy Bridger Incentive Units — 242,424

NOTE 24 – SUBSEQUENT EVENTS

The Company evaluated its activities through the issuance date of the filing of the Consolidated Financial Statements.

In January 2024, we entered into a sales agreement with Stifel, Nicolaus & Company, Incorporated (“Stifel”) and Virtu Americas LLC (“Virtu”) under which we could offer and sell shares of our Common Stock having an aggregate offering proceeds of up to $ 100.0 million.

From January 26, 2024 through the date of this filing, we sold an aggregate of 33,798 shares of common stock at a weighted-average price of $ 5.13 per share for net proceeds of $ 0.2 million, net of fees of $ 5,000 .

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data