What changed in this filing

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Item 1. Financial Statements

2024-05-14 compared with 2023-11-13 · 490 added, 1023 removed, 492 unchanged (75% of the section changed)

1 unchanged sentence

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in U.S.

September 30, 2023 As of

CONDENSED CONSOLIDATED BALANCE SHEETS

($s in thousands, except par value amounts)

March 31, 2024 As of

December 31, 2023

6 unchanged sentences

Prepaid expenses and other current assets 3,740 2,648

Deferred offering costs — 5,800,144

Total current assets 25,207 45,195

8 unchanged sentences

Accounts payable 3

$ 3,932 $ 3,978

Accrued expenses and other current liabilities 4

Operating right-of-use current liability 2

11,955 17,168

Operating right-of-use current liability 5

Current portion of long-term debt, net of debt issuance costs 2,028 2,099

2 unchanged sentences

Operating right-of-use noncurrent liability 6

6,764,776 754,673

Long-term debt, net of debt issuance costs 7

4 unchanged sentences

Series A Preferred Stock, $ 0.0001 par value;

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

348,786,994 —

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

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

315,789.473684 shares authorized, issued and outstanding at March 31, 2024 and December 31, 2023

361,029 354,840

2 unchanged sentences

1,000,000,000 shares authorized;

44,776,926 shares issued and outstanding at September 30, 2023;

44,842,587 shares issued and outstanding at March 31, 2024;

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

4 unchanged sentences

Total liabilities, mezzanine equity, and stockholders’ deficit $ 252,431 $ 273,470

1 Includes related party operating lease right-of-use assets of approximately $ 6,569,000 for the two Pilatus PC-12 leases as of September 30, 2023.

2 Includes related party operating lease right-of-use current liabilities of approximately $ 1,173,000 for the two Pilatus PC-12 leases as of September 30, 2023 .

3 Includes related party operating lease right-of-use noncurrent liabilities of approximately $ 5,396,000 for the two Pilatus PC-12 leases as of September 30, 2023.

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

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

1 Includes related party accounts receivable of $ 0.1 million as of March 31, 2024 .

2 Includes related party operating lease right-of-use assets of $ 6.0 million and $ 6.3 million as of March 31, 2024 and December 31, 2023, respectively.

3 Includes related party accounts payable of $ 0.6 million and $ 0.1 million as of March 31, 2024 and December 31, 2023, respectively.

4 Includes related party accrued interest expense of $ 0.1 million and $ 0.4 million as of March 31, 2024 and December 31, 2023, respectively.

5 Includes related party operating lease right-of-use current liabilities of $ 1.7 million as of March 31, 2024 and December 31, 2023.

6 Includes related party operating lease right-of-use noncurrent liabilities of $ 4.3 million and $ 4.6 million as of March 31, 2024 and December 31, 2023, respectively.

7 Includes related party debt of $ 10.0 million as of March 31, 2024 and December 31, 2023.

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(All Amounts in U.S.

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($s in thousands, except per share amounts)

For the Three Months Ended March 31,

$ 5,507 $ 365

3 unchanged sentences

Total cost of revenues 9,206 7,248

Gross income 38,410,925 19,834,381 32,632,768 16,708,457

Gross loss ( 3,699 ) ( 6,883 )

Selling, general and administrative expense 2

11,610 33,229

Operating income (loss) 22,584,451 1,775,963 ( 31,610,005 ) ( 11,926,847 )

Operating loss ( 15,309 ) ( 40,112 )

Interest expense 3

( 5,923 ) ( 5,665 )

Other income (expense) 559,992 ( 441,788 ) 2,253,320 ( 166,634 )

Income (loss) before income taxes 17,173,896 ( 5,650,726 ) ( 46,532,644 ) ( 25,086,610 )

Income tax benefit 314,080 — 314,080 —

Net income (loss) $ 17,487,976 $ ( 5,650,726 ) $ ( 46,218,564 ) $ ( 25,086,610 )

Other income 1,159 1,092

Loss before income taxes ( 20,073 ) ( 44,685 )

Income tax expense ( 14 ) —

Net loss $ ( 20,087 ) $ ( 44,685 )

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

Series A Preferred Stock – adjustment to eliminate 50% multiplier — 156,362

Series A Preferred Stock – adjustment to maximum redemption value $ ( 6,048,025 ) $ — $ ( 16,128,047 ) $ —

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

Legacy Bridger Series C Preferred Shares - adjustment to maximum redemption value $ — $ ( 5,643,337 ) $ — $ ( 196,884,119 )

Net income (loss) attributable to Common stockholders - basic and diluted $ 11,439,951 $ ( 11,294,063 ) $ 45,715,987 $ ( 307,634,065 )

Net income (loss) per Common Stock - basic $ 0.25 $ ( 0.29 ) $ 1.02 $ ( 7.93 )

Net income (loss) per Common Stock - diluted $ 0.15 $ ( 0.29 ) $ 0.59 $ ( 7.93 )

Series A Preferred Stock – adjustment to maximum redemptions value ( 6,189 ) ( 4,274 )

(Loss) earnings attributable to Common Stockholders - Basic and Diluted $ ( 26,276 ) $ 59,103

(Loss) earnings per share - Basic $ ( 0.55 ) $ 1.36

(Loss) earnings per share - Diluted $ ( 0.55 ) $ 0.79

Weighted average Common Stock outstanding – Basic 47,602,241 43,488,468

Weighted average Common Stock outstanding – Diluted 47,602,241 74,986,752

1 Includes related party revenues of approximately $ 68,000 and $ 501,000 for the three and nine months ended September 30, 2023, respectively.

2 Includes related party lease expense of approximately $ 139,000 for the three and nine months ended September 30, 2023, respectively.

3 Includes related party interest for the 2022 taxable industrial revenue bond of approximately $ 293,000 and $ 856,000 for the three and nine months ended September 30, 2023, respectively, and $ 95,000 for three and nine months ended September 30, 2022, respectively.

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

1 Includes related party revenues of $ 0.1 million and $ 0.3 million for the three months ended March 31, 2024 and 2023, respectively.

2 Includes related party cost of revenues of $ 1.0 million and $ 0.1 million for the three months ended March 31, 2024 and 2023, respectively.

3 Includes related party interest expense of $ 0.3 million for the three months ended March 31, 2024 and 2023.

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(All Amounts in U.S.

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

Net income (loss) $ 17,487,976 $ ( 5,650,726 ) $ ( 46,218,564 ) $ ( 25,086,610 )

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

($s in thousands)

For the Three Months Ended March 31,

Net loss $ ( 20,087 ) $ ( 44,685 )

Other comprehensive income (loss), net of tax

Foreign currency translation adjustment ( 43,687 ) ( 96 ) ( 43,281 ) ( 359 )

Unrealized gain on derivative instruments 180,525 459,150 112,191 1,443,185

Unrealized (loss) gain on investments in marketable securities ( 12,942 ) 28,212 277,402 28,212

Reclassification of realized gains on investments in marketable securities to earnings ( 100,388 ) — ( 481,730 ) —

Unrealized gain (loss) on derivative instruments 116 ( 272 )

Unrealized gain on investments in marketable securities — 319

Reclassification of realized loss (gain) on investments in marketable securities to earnings 30 ( 173 )

Total other comprehensive income (loss), net of tax 146 ( 126 )

Comprehensive income (loss) $ 17,511,484 $ ( 5,163,460 ) $ ( 46,353,982 ) $ ( 23,615,572 )

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

Comprehensive loss $ ( 19,941 ) $ ( 44,811 )

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STOCKHOLDERS’ DEFICIT

For the Nine Months Ended September 30, 2022

(All Amounts in U.S.

dollars, except share amounts)

Legacy Bridger Series A Preferred

Shares Legacy Bridger

Series B Preferred

Shares Legacy Bridger

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

($s in thousands)

Legacy Bridger

Series C Preferred

2 unchanged sentences

Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Stockholders' Deficit

Share Value Share Value Share Value Share Value

Share Value Share Value

Balance at December 31, 2022 351,789 $ 489,022 39,081,744 $ 4 $ — $ ( 415,304 ) $ 1,678 $ ( 413,622 )

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

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

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

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

Net loss — — — — — ( 44,685 ) — ( 44,685 )

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

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

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

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

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

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

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

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

Legacy Bridger Series C Preferred Shares adjustment to maximum redemption value — — — — — — — — — ( 5,643,337 ) — ( 5,643,337 )

Unrealized gain on derivative instruments — — — — — — — — — — 459,150 459,150

Unrealized gain on investments in marketable securities — — — — — — — — — — 28,212 28,212

Foreign currency translation adjustment — — — — — — — — — — ( 96 ) ( 96 )

Stock based compensation attributable to Legacy Bridger holders prior to reverse recapitalization — — — — — — — — — 2,223 — 2,223

Net loss — — — — — — — — — ( 5,650,726 ) — ( 5,650,726 )

Balance at September 30, 2022 10,500,000 $ 1,050 60,000,000 $ 6,000 — $ — 39,081,744 $ 3,908 $ — $ ( 392,470,865 ) $ 1,495,744 $ ( 390,971,213 )

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STOCKHOLDERS’ DEFICIT

For the Nine Months Ended September 30, 2023

(All Amounts in U.S.

dollars, except share amounts)

Legacy Bridger Series A Preferred

Shares Legacy Bridger

Series B Preferred

Shares Legacy Bridger

Series C Preferred

Shares / Series A

Preferred Stock Common Stock Additional

Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Stockholders' Deficit

Share Value Share Value Share Value Share Value

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

Unrealized loss on derivative instruments — — — — — — ( 272 ) ( 272 )

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

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

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

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

Unrealized gain on investments in marketable securities — — — — — — 319 319

Reclassification of realized gain on investments in marketable securities to earnings — — — — — — ( 173 ) ( 173 )

Effect of the Closing — ( 156,363 ) 4,687,546 1 52,084 78,956 — 131,041

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

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

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

Stock based compensation — — 2,400,354 — 25,597 — — 25,597

Balance at March 31, 2023 351,789 $ 336,933 46,169,644 $ 5 $ 73,407 $ ( 381,033 ) $ 1,552 $ ( 306,069 )

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

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

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

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

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

Net loss — — — — — ( 20,087 ) — ( 20,087 )

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

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

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

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

Unrealized gain on derivative instruments — — — — — — 116 116

Unrealized loss on investment in marketable securities — — — — — — — — — — ( 12,942 ) ( 12,942 )

Reclassification of realized gains on investments in marketable securities to earnings — — — — — — — — — — ( 100,388 ) ( 100,388 )

Foreign currency translation adjustment — — — — — — — — — — ( 43,687 ) ( 43,687 )

Net income — — — — — — — — — 17,487,976 — 17,487,976

Series A Preferred Stock adjustment to maximum redemption value — — — — — 6,048,025 — — ( 6,048,025 ) — — ( 6,048,025 )

Class A Common Stock issued in Acquisition — — — — — — 426,531 43 3,241,957 — — 3,242,000

Stock based compensation after reverse recapitalization — — — — — — — — 6,605,296 — — 6,605,296

Balance at September 30, 2023 — $ — — $ — 315,789 $ 348,786,994 47,332,729 $ 4,949 $ 82,776,619 $ ( 382,566,331 ) $ 1,543,079 $ ( 298,241,684 )

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

Reclassification of realized loss on investments in marketable securities to earnings — — — — — — 30 30

Series A Preferred Stock adjustment to maximum redemptions value — 6,189 — — ( 6,189 ) — — ( 6,189 )

Sales of Common Stock through the at-the-market offering — — 33,798 — 168 — — 168

Costs related to the at-the-market offering — — — — ( 670 ) — — ( 670 )

Stock based compensation — — 31,863 — 5,873 — — 5,873

Balance at March 31, 2024 315,789 $ 361,029 47,266,165 $ 5 $ 83,953 $ ( 433,759 ) $ 1,133 $ ( 348,668 )

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All Amounts in U.S.

For the Nine Months Ended September 30,

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

($s in thousands)

For the Three Months Ended March 31,

Cash Flows from Operating Activities:

Net loss $ ( 20,087 ) $ ( 44,685 )

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

Loss on sale/disposal of fixed assets 423,187 1,588,361

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

Loss (gain) on disposal of fixed assets 255 ( 1 )

Depreciation and amortization 1,290 1,751

Impairment of long-lived assets 626,848 —

Stock-based compensation expense 5,873 25,597

Loss on extinguishment of debt — 844,925

Change in fair value of the Warrants ( 266 ) ( 1,599 )

1 unchanged sentence

Amortization of debt issuance costs 192 239

Interest accrued on Legacy Bridger Series B Preferred Shares — 3,586,586

Change in fair value of Legacy Bridger Series C Preferred Shares — 3,918,636

Change in fair value of Series A Preferred Stock ( 45,378 ) —

Change in fair value of embedded derivative ( 885 ) ( 346 )

Change in fair value of earnout consideration 15 —

Realized gain on investments in marketable securities ( 16 ) ( 259 )

1 unchanged sentence

Accounts and note receivable 1

( 813 ) ( 338 )

Aircraft support parts 12 1,326

1 unchanged sentence

Accounts payable, accrued expenses and other liabilities 2

( 4,953 ) ( 14,492 )

Net cash used in operating activities ( 19,762 ) ( 36,653 )

Cash Flows from Investing Activities:

Investments in construction in progress – buildings — ( 7,739,841 )

Proceeds from sales and maturities of marketable securities 1,055 25,062

Sale of property, plant and equipment 817,000 286,400

Purchases of property, plant and equipment ( 957 ) ( 11,171 )

Purchases of marketable securities — ( 38,508,475 )

Net cash provided by (used in) investing activities 35,851,528 ( 69,780,302 )

Expenditures for capitalized software ( 312 ) —

Investments in construction in progress – leasehold improvements — ( 1,046 )

Sale of property, plant and equipment — 114

Net cash (used in) provided by investing activities ( 214 ) 12,959

Cash Flows from Financing Activities:

Payment to Legacy Bridger Series A Preferred Shares members — ( 236,250,000 )

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

Borrowing from Legacy Bridger Series C Preferred shares members, net of issuance costs — 288,684,675

Borrowings from 2022 Taxable Industrial Revenue bond — 160,000,000

Extinguishment of 2021 Taxable Industrial Revenue bond — (7,549,900)

Repayments on debt ( 733 ) ( 469 )

Payment of issuance costs for Common Stock in the at-the-market offering ( 324 ) —

Proceeds from issuance of Common Stock in the at-the-market offering 168 —

Payment of finance lease liability ( 7 ) ( 8 )

Proceeds from the Closing 3,193,536 —

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

Borrowings from various First Interstate Bank vehicle loans — 202,216

Payment of debt issuance costs — ( 4,417,806 )

Payment of offering costs — (896,108)

Repayments on debt ( 1,482,425 ) ( 1,463,862 )

Net cash (used in) provided by financing activities ( 5,105,253 ) 128,309,992

Effects of exchange rate changes ( 43,281 ) ( 359 )

Proceeds from the Closing — 3,194

Net cash used in financing activities ( 896 ) ( 4,077 )

Net change in cash, cash equivalents and restricted cash ( 20,872 ) ( 27,771 )

3 unchanged sentences

Cash and cash equivalents – end of the period $ 6,776 $ 2,290

Supplemental disclosure of non-cash operating and financing activities

Assumption of Jack Creek liabilities $ 7,463,673 $ —

Recognition of warrant liabilities $ 5,863,000 $ —

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

Recognition of new right-of-use asset and corresponding operating lease liability $ 7,940,044 $ —

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

Purchase consideration of Ignis acquisition paid in Class A Common Stock $ 3,242,000 $ —

Deferred offering costs included in accrued expenses and other current liabilities $ — $ 3,762,322

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

Supplemental cash flow information

Interest paid 1

$ 21,995,073 $ 11,936,730

Fixed assets in accounts payable $ 16,847 $ 448,850

Conversion of Promissory Note to Common Stock $ 897,400 $ —

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

Series A Preferred Stock – adjustment to eliminate 50% multiplier $ 156,362,597 $ —

Series A Preferred Stock - adjustment to maximum redemption value $ 16,128,046 $ —

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

Legacy Bridger Series C Preferred Shares - adjustment for maximum redemption value $ — $ 196,884,119

1 Includes related party interest paid of approximately $ 1,150,000 for the 2022 taxable industrial revenue bond for the nine months ended September 30, 2023.

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

1 Includes related party accounts receivable of $ 0.1 million and $ 0.3 million for the three months ended March 31, 2024 and 2023, respectively.

2 Includes related party accounts payable of $ 1.0 million and $ 0.1 million for the three months ended March 31, 2024 and 2023, respectively.

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

2 unchanged sentences

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

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

As of March 31, 2024, the Company owns fifteen aircraft, including six Viking CL-415EAFs (“Super Scoopers”), four Twin Commander surveillance platforms, four Daher Kodiak 100s (“Daher Kodiaks”) and one Pilatus PC-12 (“Pilatus”).

Liquidity and Going Concern

In accordance with Accounting Standards Codification (“ASC”) 205-40 , Presentation of Financial Statements—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 condensed 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 15 – Long-Term Debt” included in this Quarterly Report on Form 10-Q (the “Quarterly Report”), 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, 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 three months ended March 31, 2024, the Company had an operating loss of $ 15.3 million, net loss of $ 20.1 million and net cash used in operating activities of $ 19.8 million.

In addition, as of March 31, 2024, the Company had unrestricted cash or investments of $ 6.8 million.

The Company is not in compliance with the DSCR covenant as of March 31, 2024 and management anticipates the Company will 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.

In addition, the Company is not in compliance with the $ 8.0 million minimum liquidity requirement as of March 31, 2024 and management anticipates that it may not be in compliance with the minimum liquidity requirement at future quarterly measurement periods in the next 12 months depending on the cash generated 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 still in progress and there is no assurance that management will be able to diligently prosecute the remediation plan to completion.

Additionally, as described in further detail in “Note 22 – Subsequent Events,” the Company raised additional cash through a registered direct equity offering in April 2024 resulting in net cash proceeds of approximately $ 9.2 million.

However, depending on the cash generated from its seasonal firefighting operations in 2024, there may be periods in the next 12 months where the Company may not be in compliance with the $ 8.0 million minimum liquidity requirement.

The Company plans to seek additional cash funding through sales of our common stock through our at-the-market offering, described in further detail in “Note 18 – Stockholders' Deficit” included in this Quarterly Report.

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 maintain minimum liquidity requirements raise substantial doubt about the Company’s ability to continue as a going concern within 12 months following the issuance date of the condensed consolidated financial statements as of and for the three months ended March 31, 2024.

These condensed 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 unaudited condensed consolidated financial statements have been prepared in accordance with U.S.

generally accepted accounting principles (“US GAAP”).

The unaudited condensed 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.

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

generally accepted accounting principles (“GAAP”).

The condensed 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.

The condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations;

however, the Company believes that the disclosures are adequate to prevent the information presented from being misleading.

In the opinion of management, all adjustments necessary to fairly present the financial position of the Company at March 31, 2024 and December 31, 2023, the results of the Company’s operations for the three months ended March 31, 2024 and 2023 and the Company’s cash flows for the three months ended March 31, 2024 and 2023 have been included and are of a normal, recurring nature except as otherwise disclosed.

Management also has evaluated the impact of events occurring after March 31, 2024 up to the date of issuance of these condensed financial statements, and these statements contain all necessary adjustments and disclosures resulting from that evaluation.

Due to seasonal fluctuations and other factors, the Company’s operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or for any future period.

The condensed financial statements and notes thereto should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Reverse Recapitalization

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• 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;

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

• the adoption and assumption of the Bridger Aerospace Group Holdings, Inc.

2023 Omnibus Incentive Plan (the “Omnibus 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.

5 unchanged sentences

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

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

In connection with the Reverse Recapitalization, the Company paid transaction costs of $ 10.3 million as of the Closing.

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

5 unchanged sentences

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

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

• 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;

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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 recasted as shares of Common Stock using the Exchange Ratio.

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.”

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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Variable Interest Entities

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

The Company follows ASC 810-10-15, Consolidation , 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.

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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”) is considered to be a VIE, as it lacks sufficient equity and is consolidated in the Company’s financial statements.

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

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

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

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

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

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.

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, the Company, and Bridger Air Tanker, LLC, a wholly-owned subsidiary of the Company, to transfer all annual expenses incurred to the Company in exchange for the Canadian employees to support the Company’s water scooper aircraft.

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

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

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 was a wholly-owned subsidiary of Bridger.

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

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

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

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

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

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

Timothy Sheehy originally conducted aerial operations through MA, LLC before Bridger’s current legal organizational structure was put into place, which created the need for the Aviation Agreement and resulting VIE treatment.

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 three months ended March 31, 2024 and 2023 and the year ended December 31, 2023, and all intercompany expenses associated with NFMS, LLC and its service agreement have been eliminated in consolidation.

For the three months ended March 31, 2024 and 2023, NFMS, LLC’s assets and liabilities were immaterial to the Company’s financial statements.

Bridger Aerospace Europe, S.L.U.

(“BAE”) and MAB Funding, LLC (“MAB”):

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, 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 three months ended March 31, 2024 and the year ended December 31, 2023.

Refer to “Note 16 – Commitments and Contingencies” included in this Quarterly Report 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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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.

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 unaudited condensed 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 condensed 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) 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, (k) incentive units and (l) Public Warrants and Private Placement Warrants.

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 Unaudited Condensed Consolidated Statements of Operations.

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

(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, (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.

Accounts and Note Receivable

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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 three and nine months ended September 30, 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 not history of write-offs.

For the three months ended March 31, 2024 and 2023, 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.

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

1 unchanged sentence

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 three and nine months ended September 30, 2023 and 2022, the Company did not record any bad debt expense based on the assessment of the receivable.

Deferred Offering Costs

1 unchanged sentence

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

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

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

As of March 31, 2024 and December 31, 2023, the Company recorded $ 18.6 million and $ 18.0 million to Stockholders’ deficit in the Condensed Consolidated Balance Sheets, respectively.

For the three months ended March 31, 2023, the Company recorded $ 0.5 million to Selling, general and administrative expense in the Condensed Consolidated Statements of Operations.

Revenue Recognition

Revenues are recognized when control of the promised services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

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

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

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

Flight revenue is primarily earned 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 to deploy aerial fire management assets during the firefighting season.

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.

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

16 unchanged sentences

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.

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

Contract liabilities are recorded when cash payments are received or due in advance of performance and are recorded as deferred revenue within Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets.

Payment terms vary by customer and type of revenue contract.

1 unchanged sentence

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

As the Company has a right to consideration from customers in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date, the Company has applied the practical expedient to recognize revenue in the amount to which we have the right to invoice.

As permitted under the practical expedient available under ASC 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.

Sales taxes and value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from Revenues.

Other revenue consists of leasing revenues for facilities as well as external repair and return-to-service work performed on customer aircraft.

The Company commonly contracts with third-parties to perform certain repair and return-to-service work that we have promised in our customer agreements.

The Company considers itself the principal in these arrangements as we control the timing and nature of the services ultimately provided by the third-party to the customer.

Other services and Other revenue presented in the tables below for the three months ended March 31, 2024 includes $ 1.0 million of return-to-service revenue associated with the Spanish Scoopers.

This revenue is recognized over time using a cost-to-cost measure because it best depicts the transfer of value to the customer and also correlates with the amount of consideration to which the Company expects to be entitled in exchange for transferring the promised services to the customer.

Under the cost-to-cost measure of progress, progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation.

Revenues are recorded proportionally as costs are incurred.

Revenue Disaggregation

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

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

The following table presents the disaggregation of revenue by service:

For the Three Months Ended March 31,

$s in thousands 2024 2023

Fire suppression $ 3,881 $ —

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Total revenues $ 5,507 $ 365

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

The following table presents the disaggregation of revenue by type:

For the Three Months Ended March 31,

$s in thousands 2024 2023

Flight revenue $ 913 $ —

3 unchanged sentences

Concentration Risk

For the three and nine months ended September 30, 2023, the Company had one customer who individually accounted for 75 % and 67 % of total revenues, respectively.

For the three and nine months ended September 30, 2022, the Company had one customer who individually accounted for 96 % and 97 % of total revenues, respectively.

As of September 30, 2023, two customers accounted for 45 % and 32 % of accounts receivable, respectively.

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

For the three months ended March 31, 2024, the Company had two customers who individually accounted for 69 % and 19 % of total revenues, respectively.

For the three months ended March 31, 2023, the Company had two customers who individually accounted for 88 % and 12 % of total revenues, respectively.

As of March 31, 2024, two customers accounted for 82 % and 13 % of accounts receivable, respectively.

As of December 31, 2023, three customers accounted for 39 %, 34 % and 19 % of accounts receivable, respectively.

Business Combinations

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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 within the Unaudited Condensed Consolidated Balance Sheets.

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

Contingent consideration, representing 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.

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

Hedging Transactions and Derivative Financial Instruments

5 unchanged sentences

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 on the Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) in which the hedged items are recorded in the same period the hedged items affect earnings.

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

The changes in fair values of derivatives that have been designated and qualify as cash flow hedges are recorded in Accumulated other comprehensive income and are reclassified into the line item on the Condensed 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.

1 unchanged sentence

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

Refer to “Note 15 – Long-Term Debt” included in this Quarterly Report for additional details.

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

Warrant Liabilities

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

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

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

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

For periods prior to the Reverse Recapitalization, 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 Legacy Bridger’s earnings.

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

The warrant liabilities are subject to remeasurement at each balance sheet date until exercised.

Refer to “Note 12 – Accrued Expenses and Other Liabilities” included in this Quarterly Report for additional details.

For periods prior to the Reverse Recapitalization, Bridger Aerospace Group Holdings, LLC was a partnership for federal income tax purposes.

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

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

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

Subsequent to the Reverse Recapitalization, 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.

became the successor of Legacy Bridger as discussed in “Note 1 – Organization and Basis of Presentation” included in this Quarterly Report.

Bridger is subject to U.S.

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

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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.

Net Income (Loss) Per Share

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

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

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

(Loss) Earnings Per Share

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

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

(Loss) 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, (loss) earnings per share is calculated based on the weighted average number of shares of Common Stock outstanding.

Collaboration Agreements

The Company analyzes its collaboration arrangement to assess if it is within the scope of ASC 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.

The Company analyzes its collaboration arrangement to assess if it is within the scope of ASC 808, Collaborative Agreements , 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.

6 unchanged sentences

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

In connection with the Closing, the Company along with the Board established and approved and assumed 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.

2 unchanged sentences

The Company accounts for forfeitures as they occur.

Stock-based compensation is included in Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations.

Advertising Expense

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

Advertising expense for the three and nine months ended September 30, 2023 was approximately $ 52 thousand and $ 104 thousand, respectively, and for the three and nine months ended September 30, 2022 was approximately $ 153 thousand and $ 520 thousand, respectively.

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

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments - Credit Losses (Topic 326):

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 Company adopted this standard on January 1, 2023.

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

In January 2017, the FASB issued ASU No.

2017-04, Intangibles-Goodwill and Other (Topic 350):

Intangibles - Goodwill and Other:

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 Company adopted this standard on January 1, 2023.

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

Recently Issued Accounting Pronouncements

In September 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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

provided to ease the potential burden of accounting for reference rate reform.

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 condensed 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 condensed consolidated financial statements.

In December 2023, 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.

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

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 condensed consolidated financial statements.

NOTE 3 – SUPPLEMENTAL CASH FLOW INFORMATION

For the Three Months Ended March 31,

$s in thousands 2024 2023

Interest paid $ 10,415 $ 10,312

Fixed assets in accounts payable 27 1,469

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 6,189 4,274

Non-cash operating and financing activities:

Issuance costs for ATM offering included in accounts payable, accrued expense and other liabilities $ 346 $ —

Assumption of JCIC liabilities — 7,464

Recognition of Warrant liabilities — 5,863

Cancellation of deferred underwriting fee — 1,500

NOTE 4 – CASH EQUIVALENTS AND INVESTMENTS IN MARKETABLE SECURITIES

1 unchanged sentence

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

September 30, 2023 As of

March 31, 2024 As of

December 31, 2023

Carrying Value

($s in thousands) Carrying Value

Cash equivalents:

4 unchanged sentences

Money market fund $ 9,289 $ 13,981

As of September 30, 2023

Price Unrealized

Gains Unrealized

Losses Fair Value

Investment in marketable securities

Commercial paper $ 1,908,494 $ 90,606 $ — $ 1,999,100

Corporate bonds and notes 246,465 3,503 — 249,968

Total marketable securities $ 2,154,959 $ 94,109 $ — $ 2,249,068

As of December 31, 2023

$s in thousands Purchase

Price Unrealized

2 unchanged sentences

Investment in marketable securities:

Commercial paper $ 32,635,849 $ 277,674 $ — $ 32,913,523

Corporate bonds and notes 15,413,122 3,668 — 15,416,790

Government securities $ 999 $ 10 $ — $ 1,009

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

The net unrealized gain included in total other comprehensive income (loss) for the three and nine months ended September 30, 2023 is $( 13 ) thousand and $ 277 thousand, respectively.

The net unrealized gain included in total other comprehensive income (loss) for each of the three and nine months ended September 30, 2022 is $ 28 thousand.

The proceeds from sales of available-for-sale securities and gross realized gains included in earnings from sales of available-for-sale securities for the nine months ended September 30, 2023 are $ 53,089 thousand and $ 562 thousand, respectively.

The net unrealized gain included in accumulated other comprehensive income for the three months ended March 31, 2024 and 2023 is zero and $ 0.3 million, respectively.

The proceeds from sales of available-for-sale securities and gross realized gains included in earnings for the three months ended March 31, 2024 and 2023 are $ 1.1 million and $ 25.1 million, respectively, and $ 16,000 and $ 0.3 million, respectively.

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

For the three and nine months ended September 30, 2023, $ 100 thousand and $ 482 thousand has been reclassified out of accumulated other comprehensive income, respectively.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

For the three months ended March 31, 2024 and 2023, the Company reclassified out of accumulated other comprehensive income a loss of $ 30,000 and a gain of $ 0.2 million, respectively.

NOTE 5 – ACCOUNTS AND NOTE RECEIVABLE

Accounts and note receivable consist of the following:

As of September 30,

$s in thousands As of March 31,

2024 As of December 31,

1 unchanged sentence

Note receivable — 3,000

Other receivables 17,854 —

Other 262 432

Total accounts and note receivable $ 4,926 $ 4,113

On September 5, 2023, the Company entered into a secured promissory note in the amount of $ 3,000 thousand.

This note accrues interest at a rate of 8.5 % per annum and is due and payable on the 60 th day after termination of the note.

Other receivables consists primarily of accrued interest on the Note receivable.

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

This note accrued interest at a rate of 8.5 % per annum and was paid in January 2024.

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

NOTE 6 – AIRCRAFT SUPPORT PARTS

Aircraft support parts consist of the following:

As of September 30,

$s in thousands As of March 31,

2024 As of December 31,

Repairables and expendables $ 476 $ 488

Other support parts — 26,978

Total aircraft support parts $ 476 $ 488

1 unchanged sentence

Prepaid expenses and other current assets consist of the following:

As of September 30,

$s in thousands As of March 31,

2024 As of December 31,

Prepaid insurance $ 2,414 $ 1,324

Deposits 1,206,769 65,641

Prepaid subscriptions 1,122 1,115

Other current assets 62,563 29,946

Deposits 183 120

Total prepaid expenses and other current assets $ 3,740 $ 2,648

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

NOTE 8 – PROPERTY, PLANT AND EQUIPMENT, NET

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

As of September 30,

$s in thousands As of March 31,

2024 As of December 31,

2 unchanged sentences

Aircraft, net 160,075 160,511

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

Buildings 34,779,836 16,519,231

Leasehold improvements 35,916 35,941

Vehicles and equipment 3,209 2,993

Construction-in-progress - Buildings 4,500 13,780,316

Construction-in-progress - Leasehold improvements 5 5

Finance lease right-of-use asset 121 121

1 unchanged sentence

Accumulated depreciation ( 3,690 ) ( 3,195 )

Buildings and equipment, net 35,245,974 31,769,702

Leasehold improvements and equipment, net 35,796 36,100

Total property, plant and equipment, net $ 195,871 $ 196,611

For the three and nine months ended September 30, 2023, the Company recorded $ 5,072 thousand and $ 9,057 thousand of depreciation expense in Cost of revenues, respectively, and $ 149 thousand and $ 1,097 thousand of depreciation expense in Selling, general and administrative expense, respectively.

For the three and nine months ended September 30, 2022, the Company recorded $ 4,118 thousand and $ 7,590 thousand of depreciation expense in Cost of revenues, respectively, and $ 322 thousand and $ 910 thousand of depreciation expense in Selling, general and administrative expense, respectively.

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

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

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

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

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

For the three and nine months ended September 30, 2022, the Company recorded no impairment charges.

For the three and nine months ended September 30, 2023, the Company recorded a net loss on sale/disposal of assets of $ 34 thousand and $ 426 thousand, respectively, in Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations.

For the three and nine months ended September 30, 2022, the Company recorded a loss on disposals of assets related to the obsolescence of an aging aircraft of $ 807 thousand and $ 1,588 thousand, respectively, in Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations.

For the three and nine months ended September 30, 2023, capitalized interest to equipment from debt financing was $ 419 thousand and $ 1,242 thousand, respectively.

For the three and nine months ended September 30, 2022, capitalized interest to equipment from debt financing was $ 216 thousand and $ 358 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 back into service.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

For the three months ended March 31, 2024, the Company recorded $ 0.9 million and $ 0.4 million of depreciation expense in Cost of revenues and Selling, general and administrative expense, respectively.

For the three months ended March 31, 2023, the Company recorded $ 1.0 million and $ 0.7 million of depreciation expense in Cost of revenues and Selling, general and administrative expense, respectively.

For the three months ended March 31, 2024 and 2023, capitalized interest to property, plant and equipment from debt financing was zero and $ 0.4 million, respectively.

NOTE 9 – ACQUISITION ACTIVITY

During 2023, the Company completed the following acquisition of Ignis Technologies, Inc.

(“Ignis”) with the intention of expanding the technology used in implementing our firefighting services.

Ignis is a fire technology company delivering mission-critical intelligence and technology solutions to firefighting organizations.

This acquisition was not individually material to our financial position, results of operations, or cash flows.

On September 12, 2023, the Company completed the acquisition of all the outstanding equity interests of Ignis (the “Acquisition”) for total consideration of $ 11,561 thousand, payable in unregistered shares of Bridger’s Common Stock, consisting of $ 3,242 thousand payable at closing.

At the 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 $ 8,319 thousand 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.

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

(“Ignis” and the “Acquisition”), 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.

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.

The maximum number of shares of Common Stock issuable to the Ignis shareholders as contingent earnout consideration will not exceed 8,399,198 shares in the aggregate.

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 was or will be registered under the Securities Act of 1933, as amended (the “Securities Act”), at the time of sale in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.

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.

6 unchanged sentences

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 are included within Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations.

Acquisition-related costs incurred for the Acquisition completed during each of the three and nine months ended September 30, 2023 were $ 117 thousand.

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

Purchase Price Allocation

The Company has performed a preliminary valuation analysis of the fair market value of the assets acquired and liabilities assumed in the Acquisition.

The final purchase price allocation will be determined when the Company has completed and fully reviewed the detailed valuations which could differ materially from the preliminary allocations.

The final allocations

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

may include changes in allocations of acquired intangible assets as well as goodwill and other changes to assets and liabilities, including deferred taxes.

The estimated useful lives of acquired intangible assets are also preliminary.

The aggregate purchase price of this acquisition was allocated on a preliminary basis as follows :

Common Stock $ 11,561,000

Aggregate purchase price 11,561,000

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 (Weighted average useful life of 5.0 years)

Intangible assets 1,300

Accounts payable ( 37 )

1 unchanged sentence

Deferred tax liability ( 314 )

Net assets acquired 884,566

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 10 – GOODWILL AND INTANGIBLE ASSETS, NET

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

During the nine months ended September 30, 2023, the Company’s goodwill increased from the Acquisition.

There were no impairment charges recorded for goodwill for the three and nine months ended September 30, 2023 and 2022.

The changes in the carrying amount of goodwill for the nine months ended September 30, 2023, are as follows:

As of December 31, 2022 $ 2,457,937

Addition from acquisition 10,676,434

As of September 30, 2023 $ 13,134,371

As of March 31, 2024 and December 31, 2023, goodwill was $ 13.2 million, respectively.

There were no impairment charges recorded for goodwill for the three months ended March 31, 2024 and 2023.

Intangible assets consisted of the following:

As of September 30, 2023

As of March 31, 2024

$s in thousands Estimated

(Years) Gross

3 unchanged sentences

Internal-use software 3 297 ( 233 ) 64

In-process research and development (“IPR&D”) 5 $ 1,300,000 $ — $ 1,300,000

IPR&D 5 1,941 — 1,941

Total intangible assets $ 2,305 $ ( 289 ) $ 2,016

As of December 31, 2023

$s in thousands Estimated

(Years) Gross

3 unchanged sentences

Internal-use software 3 297 ( 208 ) 89

IPR&D 5 1,628 — 1,628

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

IPR&D was acquired in the Acquisition discussed in “Note 8 – Acquisition Activity.” Included in the IPR&D is the historical know-how, software, formula protocols, designs, and procedures expected to be needed to complete the technology asset and receive regulatory approval.

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.

Upon completion, the Company expects to amortize the IPR&D over its useful life of five years.

The Company valued the IPR&D using an income approach based on significant unobservable inputs.

Amortization expense for intangible assets and other noncurrent assets was approximately $ 26 thousand and $ 79 thousand for the three and nine months ended September 30, 2023, respectively, and $ 27 thousand and $ 62 thousand for the three and nine months ended September 30, 2022, respectively.

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

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.

For the three months ended March 31, 2024, the Company capitalized costs of $ 0.3 million related to IPR&D.

Amortization expense for intangible assets and other noncurrent assets was $ 26,000 for the three months ended March 31, 2024 and 2023, respectively.

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

NOTE 11 – OTHER NONCURRENT ASSETS

Other noncurrent assets consisted of the following:

As of September 30,

$s in thousands As of March 31,

2024 As of December 31,

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

Operating lease right-of-use asset $ 7,395 $ 7,777

Investment in MAB 4,000 4,000

Prepaid subscriptions 2,546 2,877

Interest rate swap 1,233 1,117

Other assets 31,908 31,908

Investment in Overwatch Imaging, Inc.

Total other noncurrent assets $ 16,174 $ 16,771

1 unchanged sentence

Accrued expenses and other liabilities consisted of the following:

As of September 30,

$s in thousands As of March 31,

2024 As of December 31,

Contingent consideration $ 8,501 $ 8,486

Warrant liabilities 5,330 5,596

Accrued interest expense 1,872 6,448

Accrued salaries, wages and bonuses 1,542 1,099

Finance right-of-use liability 50,903 68,310

Deferred underwriting fee payable 1,500 1,500

Deferred revenue 1,278 —

Accrued professional fees 1,253 851

Embedded derivative of Legacy Bridger Series C Preferred Shares — 1,039,330

Accrued foreign tax 925 2,707

Finance right-of-use liability 40 46

Embedded derivative of Series A Preferred Stock — 885

Warrant liabilities 7,728,464 —

Deferred underwriting fee payable 1,500,000 —

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

Contingent consideration 8,319,000 —

Accrued interest expense and other accrued liabilities 2,843,183 6,614,065

Other 206 327

Total accrued expenses and other liabilities 22,447 27,945

1 unchanged sentence

Total long-term accrued expenses and other noncurrent liabilities $ 10,492 $ 10,777

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Warrant liabilities

11 unchanged sentences

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 September 30, 2023, 17,249,874 Public Warrants remain outstanding.

The Public Warrants are liability-classified with a balance of $ 5,002 thousand and a fair value of $ 0.29 per warrant as of September 30, 2023.

As of March 31, 2024 and December 31, 2023, 17,249,874 Public Warrants remain outstanding.

The Public Warrants are liability-classified with a balance of $ 3.5 million and $ 3.6 million, respectively, and a fair value of $ 0.20 and $ 0.21 per warrant as of March 31, 2024 and December 31, 2023, respectively.

Private Placement Warrants

2 unchanged sentences

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

The Private Placement Warrants are liability-classified with a balance of $ 2,726 thousand and a fair value of $ 0.29 per warrant as of September 30, 2023.

As of March 31, 2024 and 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 $ 1.9 million and $ 2.0 million, respectively, and a fair value of $ 0.20 and $ 0.21 per warrant as of March 31, 2024 and December 31, 2023, respectively.

Contingent consideration

The Company assumed Contingent consideration as part of the Acquisition discussed in “Note 8 – Acquisition Activity.” The Company is required to make contingent payments to the sellers based on the achievement of certain operational milestones.

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

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

As of September 30, 2023, the Company recognized $ 4,756 thousand in Accrued expenses and other current liabilities and $ 3,563 thousand in Long-term accrued expenses and other noncurrent liabilities within the Unaudited Condensed Consolidated Balance Sheets.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Note 12 - Interest Rate Swap and Freestanding Derivative

Interest Rate Swap

The Company assumed contingent consideration as part of the Acquisition discussed in “ Note 9 – Acquisition Activity ” included in this Quarterly Report.

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 Condensed Consolidated Statements of Operations.

As of March 31, 2024 and December 31, 2023, $ 4.9 million and $ 4.8 million of accrued contingent consideration is included in Accrued expenses and other current liabilities, respectively, and $ 3.6 million and $ 3.7 million of accrued contingent consideration is included in Long-term accrued expenses and other noncurrent liabilities, respectively, in the Condensed Consolidated Balance Sheets.

The change in contingent consideration for the three months ended March 31, 2024 was as follows:

$s in thousands Contingent Consideration

As of December 31, 2023 $ 8,486

Change in fair value of contingent consideration 15

As of March 31, 2024 $ 8,501

NOTE 13 – 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 14 – Long-Term Debt.” The interest rate swap is designated as a cash flow hedge.

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

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 15 – Long-Term Debt” included in this Quarterly Report.

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 Condensed Consolidated Balance Sheets.

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.

LIBOR was replaced by 1-month CME Term Secured Overnight Financing Rate (“SOFR”) plus 0.11448 % tenor spread adjustment.

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 Unaudited Condensed Consolidated Statements of Operations as interest expense.

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

As of September 30, 2023

Interest payments on the Company’s term loan and payments received or made on the interest rate swap are reported net on the Condensed 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 March 31, 2024

Date Maturity

6 unchanged sentences

Amount Fair Value Pay Fixed Receive Rate

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

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

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

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

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

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 $ 1,119 thousand and the remaining $ 1,118 thousand 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 $ 2,186 thousand.

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

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 condensed consolidated financial statements.

The unrealized gain is reported in Other comprehensive income (loss), net of tax in the Condensed Consolidated Statements of Comprehensive Loss included in this Quarterly Report.

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 Condensed Consolidated Statements of Operations included in this Quarterly Report.

NOTE 14 – FAIR VALUE MEASUREMENTS

Long-term debt, net of debt issuance costs

As of September 30, 2023, the Company had $ 156,903 thousand of fixed rate and $ 50,258 thousand of variable rate debt outstanding, respectively.

Long-term debt

As of March 31, 2024, the Company has $ 160.2 million of fixed rate debt and $ 50.4 million of variable rate debt outstanding.

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

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

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

Debt financing activities and loan agreements are further described in “Note 14 – Long-Term Debt.”

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 March 31, 2024 and December 31, 2023.

Debt financing activities and loan agreements are further described in “Note 15 – Long-Term Debt” included in this Quarterly Report for additional details.

Recurring Fair Value Measurement

1 unchanged sentence

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 September 30, 2023

Level 1 Level 2 Level 3

As of March 31, 2024

$s in thousands Level 1 Level 2 Level 3

Cash $ 6,776 $ — $ —

1 unchanged sentence

Money market fund 9,289 — —

Other restricted cash 3,040,812 — —

Total restricted cash 9,289 — —

Investments in marketable securities — 2,249,068 —

Interest rate swap — 1,233 —

3 unchanged sentences

Contingent consideration — — 8,501

Embedded derivative of Series A Preferred Stock — — 993,952

Total liabilities $ 3,450 $ 1,880 $ 8,501

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

As of December 31, 2023

Level 1 Level 2 Level 3

$s in thousands Level 1 Level 2 Level 3

Cash $ 22,956 $ — $ —

Cash equivalents:

Commercial paper — 29,890,313 —

Money market fund 12,640 — —

Total Cash and cash equivalents 272,162 29,890,313 —

Restricted cash:

Money market fund 13,981 — —

Other restricted cash 3,012,789 — —

Total restricted cash 13,981 — —

2 unchanged sentences

Total assets $ 36,937 $ 2,126 $ —

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

Embedded derivative of Legacy Bridger Series C Preferred Shares — — 1,039,330

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

Interest Rate Swap and Freestanding Derivative

The Company’s derivative financial instruments are measured at fair value on a recurring basis based on quoted market prices or using standard valuation models as described in “Note 12 – 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.”

Interest Rate Swap

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 13 – Interest Rate Swap” included in this Quarterly Report.

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 used a Level 2 valuation methodology to measure this interest rate swap.

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 20 – Mandatorily Redeemable Preferred Shares.”

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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.

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

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.

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.

2 unchanged sentences

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 19 – 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.

Refer to “Note 4 – Cash Equivalents and Investment in Marketable Securities” included in this Quarterly Report for additional details.

Warrant Liabilities

1 unchanged sentence

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 Unaudited Condensed Consolidated Statements of Operations.

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 Condensed Consolidated Statements of Operations included in this Quarterly Report.

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.

4 unchanged sentences

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 11 – Accrued Expenses and Other Liabilities” for additional details.

Refer to “Note 12 – Accrued Expenses and Other Liabilities” included in this Quarterly Report 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 preliminary fair value of the liability for the contingent payments recognized upon the acquisition as part of the purchase accounting opening balance sheet totaled $ 8,319 thousand.

The preliminary 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.

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 11 – Accrued Expenses and Other Liabilities” for additional details.

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

Refer to “Note 12 – Accrued Expenses and Other Liabilities” included in this Quarterly Report for additional details.

Non-Recurring Fair Value Measurements

2 unchanged sentences

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

As of March 31, 2024, the Company did not have any significant assets or liabilities that were remeasured at fair value on a non-recurring basis in periods subsequent to initial recognition.

NOTE 15 – LONG-TERM DEBT

Long-term debt consisted of the following:

As of September 30,

$s in thousands As of March 31,

2024 As of December 31,

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

2 unchanged sentences

18,250 18,457

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

10,627,419 11,110,484

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

3,952,500 4,371,000

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

160,000,000 160,000,000

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

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

10,305 10,466

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 210,640 211,374

3 unchanged sentences

Total long-term debt, net of debt issuance costs $ 204,115 $ 204,585

2020 Loan Agreements

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

Department of Agriculture for the completed purchase of the Company’s first two Viking Air Limited (“Viking”) CL415EAF aircraft.

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

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

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

Both of these notes are subject to financial covenants requiring the Company to maintain a debt service coverage ratio (“DSCR”), generally calculated as the ratio of the net cash flow (as defined in the applicable note agreements) to the amount of interest and servicing fees required to be paid over the succeeding 12 months on the principal amount of the note, as applicable, that will be outstanding on the payment date following such date of determination, that exceeds 1.25 x at the aircraft or entity level and for the Company’s debt to worth ratio to not exceed 5.00 x at the aircraft or entity level.

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

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

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 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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

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

As of September 30, 2023, the Company was not in violation of the Senior Leverage Ratio requirement related to the credit facilities entered with RMB.

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 Company’s third aircraft hangar in Belgrade, Montana.

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

Debt issuance costs for this loan were $ 570 thousand.

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

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

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

No debt issuance costs were incurred.

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

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

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

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

On July 21, 2022, the Company closed on the 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 Stock, to finance the construction and equipping of the Company’s third and fourth aircraft hangars in Belgrade, Montana and to fund the purchase of four additional Super Scoopers.

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;

2 unchanged sentences

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 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.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

The Company is in compliance with such financial covenants as of September 30, 2023.

However, management anticipates that the Company will be in violation of the DSCR and liquidity covenants during the twelve-month period subsequent to the date of this filing, primarily due to lower than expected revenues and cash.

The 2022 Bond agreement provides 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 non-compliance and management diligently prosecutes the remediation plan to completion.

Management has consulted with bond counsel on the potential impact of future covenant violations and has proactively developed a cost reduction plan to remedy the anticipated covenant breaches in 2024.

Management began to implement portions of the plan in November 2023.

However, this plan is in progress and there is no assurance that management will be able diligently prosecute the remediation plan to completion, and the Company does not have sufficient liquidity to fund its outstanding obligations for the 2022 Bonds if they became immediately due and payable following subsequent compliance reporting dates.

The uncertainty regarding the company’s ability to diligently prosecute 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 could result in the 2022 Bonds becoming immediately due and payable, which raises substantial doubt about our ability to continue as a going concern.

Amortization of debt issuance costs was $ 242 thousand and $ 726 thousand for the three and nine months ended September 30, 2023, respectively, and $ 199 thousand and $ 289 thousand for the three and nine months ended September 30, 2022, 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.

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

Department of Agriculture for the completed purchase of the Company’s first two Super Scoopers.

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 $ 1.0 million and $ 0.9 million, respectively.

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.

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

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.

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 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 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 still in progress and there is no assurance that management will be able to 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” included in this Quarterly Report.

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 March 31, 2024.

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).

The Company is in compliance with such financial covenants as of March 31, 2024.

Amortization of debt issuance costs was $ 0.2 million and $ 0.2 million for the three months ended March 31, 2024 and 2023, respectively.

NOTE 16 – COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company is involved in legal proceedings and litigation in the ordinary course of business.

Other than routine litigation incidental to the Company’s business, there are no material pending legal proceedings to which the Company is a party or to which any of the Company’s properties are subject.

On April 13, 2018, the Company executed an aircraft purchase agreement with Longview Aviation Asset Management, Inc.

and Viking for the purchase of six Viking CL415EAF aircraft.

For the year ended December 31, 2022, the Company paid $ 9,098 thousand and received its sixth Viking CL415EAF, the final remaining aircraft under the aircraft purchase agreement, during the three months ended March 31, 2023.

Un-invoiced commitments were $ 9,098 thousand as of December 31, 2022.

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

Payments made under the agreement were $ 1,289 thousand and $ 3,215 thousand for the three and nine months ended September 30, 2023.

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

Note 16 – Collaborations

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 FireTrac.

FireTrac is a program in which the Company will collect timely imagery of areas affected by wildland fire using Overwatch’s products and services.

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 are 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.

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

The Collaboration Agreement will end upon termination by (i) a mutual agreement between the Company and Overwatch, (ii) either or both parties upon revenue payment to Overwatch not meeting certain thresholds stipulated in the Collaboration

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Agreement within the second, third, or fourth anniversary of the effective date of the Collaboration Agreement, or (iii) either party upon a material breach of the Collaboration Agreement uncured within thirty (30) days after written notice from the non-breaching party.

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

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 three and nine months ended September 30, 2022, the Company recorded zero and $ 432 thousand of purchases of imaging systems under the Collaboration Agreement in Property, plant and equipment, net, and did not make any purchases during the three and nine months ended September 30, 2023.

For the three and nine months ended September 30, 2022, the Company recorded $ 96 thousand and $ 241 thousand of engineering services provided by Overwatch under the Collaboration Agreement in Selling, general and administrative expense, respectively.

For the three and nine months ended September 30, 2023, the Company recorded $ 14 thousand and $ 40 thousand of engineering services provided by Overwatch under the Collaboration Agreement in Selling, general and administrative expense, respectively.

Note 17 – Stock-Based Compensation

Incentive Units

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

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.

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

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

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

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

Forfeitures are accounted for as they occur.

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

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

Expected volatility was calculated based on the observed equity volatility for comparable companies.

The expected time to liquidity event is 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.

Treasury zero-coupon issues.

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

Dividend yield (%) 0

Expected volatility (%) 46.5

Risk-free interest rate (%) 1.26

Term (in years) 5.00

Discount for lack of marketability (%) 30

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

Time-Vesting Incentive Units Exit-Vesting Incentive Units

Awards Weighted

fair value Number of

Awards Weighted

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

Granted — — — —

Vested 80,808 0.11 — —

Forfeited — — — —

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

Granted — — — —

Vested — — — —

Forfeited ( 121,212 ) 0.22 ( 40,404 ) 0.22

Unvested as of September 30, 2023 40,404 $ 0.01 40,404 $ 0.01

For the three and nine months ended September 30, 2023, the Company recognized stock-based compensation expense related to incentive units of $ 2 thousand and $ 7 thousand within Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations, respectively.

For the three and nine months ended September 30, 2022, the Company recognized stock-based compensation expense related to incentive units of $ 2 thousand and $ 7 thousand within Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations, respectively.

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

Restricted Stock Units

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

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

The RSUs accrue dividend equivalents associated with the underlying shares of Common Stock as the Company declares dividends.

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

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

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

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

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

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

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

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

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

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

On September 13, 2023, the Company granted 194,436 RSUs to one of the Company’s non-employee directors.

These RSUs vest over a period of one to five years , subject to the participant’s service with the Company.

The fair value of the

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

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

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

Management Awards Employee Awards Non-Employee Director

Awards Weighted average

grant date fair

value Number of

Awards Weighted average

grant date fair

value Number of

Awards Weighted average

grant date fair

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

Granted 6,581,496 9.76 2,234,750 4.56 194,436 7.59

Forfeited — — ( 135,875 ) 4.56 — —

Vested ( 2,400,354 ) 9.00 — — — —

Unvested as of September 30, 2023 4,181,142 $ 10.19 2,098,875 $ 4.56 194,436 $ 7.59

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

For the three and nine months ended September 30, 2023, the Company recorded stock-based compensation expense related to RSUs of $ 6,605 thousand and $ 38,651 thousand within Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations.

As of September 30, 2023, total compensation cost related to all RSUs not yet recognized was $ 36,605 thousand, which is expected to be recognized over a weighted-average period of 1.51 years.

Note 18 – Related Party Transactions

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 Chief Executive Officer.

The Company recorded approximately $ 6,569 thousand of right-of-use assets, $ 1,173 thousand of right-of-use current liabilities, and $ 5,396 thousand of right-of-use noncurrent liabilities as of September 30, 2023, respectively.

The Company incurred approximately $ 139 thousand in lease expense for each of the three and nine months ended September 30, 2023.

For the three and nine months ended September 30, 2023, the Company earned zero and $ 433 thousand, respectively, in revenues due to labor, maintenance and improvements to an aircraft under the ownership of Mr.

Timothy Sheehy, the Chief Executive Officer.

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

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

The Company paid $ 575 thousand and $ 1,150 thousand in interest to these three bond holders during the three and nine months ended September 30, 2023, respectively, and incurred approximately $ 293 thousand and $ 856 thousand in interest for the three and nine months ended September 30, 2023, respectively.

The Company incurred approximately $ 95 thousand in interest for each of the three and nine months ended September 30, 2022.

Refer to “Note 14 – Long-Term Debt.”

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 condensed 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 conditions, cash flows or results of operations.

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.

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 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 17 – MEZZANINE EQUITY

Legacy Bridger Series C Preferred Shares

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

compounded semi-annually at June 30th and December 31st of each year.

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

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

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

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

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

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

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 .

6 unchanged sentences

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

The Company also entered into a letter agreement with 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 12 – 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 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 $ 489,022 thousand.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

As of December 31, 2022, the Legacy Bridger Series C Preferred Shares were carried at their redemption value of $ 489.0 million.

Series A Preferred Stock

1 unchanged sentence

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 $ 16,128 thousand as of September 30, 2023.

Accrued interest for the Series A Preferred Stock was $ 6.2 million as of March 31, 2024.

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 September 30, 2023, it is probable that the Series A Preferred Stock may become redeemable on April 25, 2032.

As of the Closing Date and March 31, 2024, it is probable that the Series A Preferred Stock may become redeemable on April 25, 2032.

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

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

As of September 30, 2023, the Series A Preferred Stock had both a carrying value and redemption value of $ 348,787 thousand.

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 March 31, 2024, the Series A Preferred Stock had both a carrying value and redemption value of $ 361.0 million.

Refer to table below.

As of September 30, 2023 the fair value of the embedded derivative related to the event of default is $ 994 thousand recorded as a liability on the Unaudited Condensed Consolidated Balance Sheets and remeasured to fair value at each balance sheet date with changes in fair value recorded within Interest expense or income on the Unaudited Condensed Consolidated Statements of Operations.

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

As of March 31, 2024 and December 31, 2023, the fair value of the embedded derivative related to the event of default is zero and 0.9 million recorded as a liability on the Condensed Consolidated Balance Sheets and remeasured to fair value at each balance sheet date with changes in fair value recorded within Interest expense on the Condensed Consolidated Statements of Operations.

The Company determined the fair value of the other features requiring bifurcation, both individually and in the aggregate were immaterial at March 31, 2024.

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, increasing loss available to common stockholders in the computation of the net income (loss) per share by approximately zero and $ 48 million during the three and nine months ended September 30, 2023.

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

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 (loss) earnings per share by approximately zero and $ 48.3 million during the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, there are 32,820,828 shares of Common Stock issuable upon conversion.

Redeemable Series A Preferred Stock

Shares Amounts

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

Adjustment to maximum redemption value — 16,128,047

Balance as of September 30, 2023 315,789.473684 $ 348,786,994

Redeemable Legacy Bridger Series C

Preferred Shares

Shares Amounts

Issuance of Legacy Bridger Series C Preferred Shares 315,789.473684 $ 286,332,735

Adjustment to maximum redemption value — 202,688,810

$s in thousands Shares Amounts

Balance as of December 31, 2023 315,789.473684 $ 354,840

Note 20 – Mandatorily Redeemable Preferred Shares

Legacy Bridger Series B Preferred Shares

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

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

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

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

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

Legacy Bridger Series A Preferred Shares

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

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

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

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

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

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

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

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

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

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

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

The Legacy Bridger Series A-1 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.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

The fair values of the Legacy Bridger Series A-1 and A-2 Preferred Shares were increased by $ 3,919 thousand from interest accrued since the modification on April 25, 2022 and no gains or losses were recorded to net loss upon extinguishment.

There were no Legacy Bridger Series A Preferred Shares outstanding as of September 30, 2023 and December 31, 2022.

Adjustment to maximum redemptions value — 6,189

Balance as of March 31, 2024 315,789.473684 $ 361,029

NOTE 18 – STOCKHOLDERS’ DEFICIT

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.

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 three months ended March 31, 2024 is as follows:

Awards Weighted average

grant date fair

Outstanding as of December 31, 2023 6,624,459 $ 8.30

Granted 1,028,917 5.27

Vested ( 1,703,592 ) 8.30

Forfeited/Cancelled ( 227,501 ) 6.82

Outstanding as of March 31, 2024 5,722,283 $ 7.81

The total fair value of RSUs vested during the three months ended March 31, 2024 and 2023 was $ 9.3 million and $ 21.6 million, respectively, based on the closing stock price on the date of vesting.

For the three months ended March 31, 2024, the Company recorded stock-based compensation expense related to RSUs of $ 0.4 million and $ 5.5 million within Total cost of revenues and Selling, general and administrative expense, respectively, on the Condensed Consolidated Statements of Operations.

As of March 31, 2024, there was $ 29.1 million of unrecognized total compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average period of 2.7 years.

Incentive Units

Prior to the adoption of the Omnibus Plan, 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 vested 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”).

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

For the Exit-Vesting Incentive Units, expense will be recognized when a qualifying change of control event is considered probable, which has not occurred as of March 31, 2024.

As of March 31, 2024, 40,404 Exit-Vesting Incentive Units with a weighted-average grant date fair value of $ 0.01 remain outstanding.

Upon vesting of each Incentive Unit, the Company will issue 0.96246 shares of Common Stock to the Incentive Unit holder.

At-the-Market (“ATM”) Offering

On January 26, 2024, the Company entered into a sales agreement (“2024 ATM Agreement”) with Stifel, Nicolaus & Company, Incorporated (“Stifel”) and Virtu Americas LLC (together with Stifel, the “Agents”) under which we could offer and sell, from time to time, shares of our Common Stock having an aggregate offering price of up to $ 100.0 million through the Agents in negotiated transactions that are deemed to be an “at the market offering.”

The offering was registered under the Securities Act, pursuant to our shelf registration statement on Form S-3 (Registration Statement No.

333-276721), as previously filed with the Securities and Exchange Commission (“SEC”) and declared effective on February 6, 2024.

We filed a prospectus supplement, dated February 6, 2024, with the SEC that provides for the sale of shares of Common Stock having an aggregate offering price of up to approximately $ 22.2 million (“2024 ATM Shares”).

Under the 2024 ATM Agreement, the Agents may sell the 2024 ATM Shares by any method permitted by law and deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act, including sales made directly on or through the Nasdaq Global Market, or any other existing trading market for the 2024 ATM Shares or in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices.

Actual sales will depend on a variety of factors to be determined by the Company from time to time, including, among other things, market conditions, the trading price of the common stock, capital needs and determinations by the Company of the appropriate sources of funding for the Company.

The Company is not obligated to make any sales of the 2024 ATM Shares under the 2024 ATM Agreement.

The offering of the 2024 ATM Shares pursuant to the 2024 ATM Agreement will terminate upon the termination of the 2024 ATM Agreement by the Agents or us, as permitted therein.

The 2024 ATM Agreement contains customary representations, warranties and agreements by the Company, and customary indemnification and contribution rights and obligations of the parties.

The Company agreed to pay the Agents an aggregate commission of up to 3.0 % of the aggregate gross proceeds from each sale of the 2024 ATM Shares.

The Company also agreed to reimburse the Agents for certain specified expenses in connection with entering into the 2024 ATM Agreement.

During the three months ended March 31, 2024, the Company 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 under the 2024 ATM Agreement.

NOTE 19 – RELATED PARTY TRANSACTIONS

For the three months ended March 31, 2024 and 2023, the Company incurred $ 0.6 million and $ 0.1 million, respectively, in training expenses provided by an entity in which Mr.

Timothy Sheehy has a partial ownership, with $ 0.6 million and $ 0.1 million in related outstanding accounts payable as of March 31, 2024 and December 31, 2023, 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, 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.

On July 10, 2023, the Company entered into two operating lease agreements, each for a Pilatus under the ownership of Mr.

Timothy Sheehy.

The Company recorded approximately $ 6.0 million of right-of-use assets, $ 1.7 million of right-of-use current liabilities, and $ 4.3 million of right-of-use noncurrent liabilities as of March 31, 2024, respectively, and incurred approximately $ 0.4 million in lease expense for the three months ended March 31, 2024.

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, respectively.

For the three months ended March 31, 2023, the Company earned $ 0.3 million in revenues from services performed on an aircraft under the ownership of Mr.

Timothy Sheehy, the Chief Executive Officer.

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.

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 accrued approximately $ 0.1 million and $ 0.4 million in interest for these three bond holders as of March 31, 2024 and December 31, 2023, respectively.

The Company paid approximately $ 0.6 million in interest to these three bond holders during the three months ended March 31, 2024 and 2023, and incurred approximately $ 0.3 million in interest for the three months ended March 31, 2024 and 2023.

Refer to “Note 15 – Long-Term Debt” included in this Quarterly Report for additional information on the Series 2022 Bonds .

NOTE 20 – INCOME TAXES

As a result of the Reverse Recapitalization, the Company became the successor of Legacy Bridger, as discussed in “Note 1 – Organization and Basis of Presentation , ” which is treated as a partnership for U.S.

As a result of the Business Combination, the Company became the successor of Legacy Bridger, as discussed in “Note 1 – Organization and Basis of Presentation” included in this Quarterly Report, which is treated as a partnership for U.S.

federal income tax purposes.

As a partnership, Legacy Bridger’s net income or loss is allocated among the members in accordance with the Company’s operating agreement, and federal income taxes are not payable or provided for by Legacy Bridger.

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

Subsequent to the Reverse Recapitalization, the Company became the successor of Legacy Bridger.

The Company is subject to U.S.

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

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 jurisdiction in which it operates.

For the three and nine months ended September 30, 2023, the Company recorded an income tax benefit of $ 314 thousand.

The effective tax rate was 0.68 % for the nine months ended September 30, 2023.

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

For the three months ended March 31, 2024, the Company recorded income tax expense of $ 14,000 .

The effective tax rate was ( 0.07 )% for the three months ended March 31, 2024.

The Company has assessed the realizability of the net deferred tax assets and in that analysis has considered the relevant positive and negative evidence available to determine whether it is more likely than not that some portion or all of the deferred tax assets will be realized.

3 unchanged sentences

federal, state and local income tax returns are currently under examination by the respective taxing authorities.

Note 22 – Net Income (Loss) Per Share

Basic and diluted net income (loss) per share of Common Stock is calculated in accordance with ASC 260, Earnings per share.

Net income (loss) per Common Stock – basic is calculated by dividing net income (loss) attributable to Common Stockholders by the weighted-average shares of Common Stock outstanding.

Net income (loss) per Common Stock – diluted is based on the average number of shares of Common Stock used for the basic earnings per share calculation, adjusted for the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method and if-converted method, as applicable.

Net income (loss) attributable to Common Stockholders – diluted is adjusted for the impact of changes in the fair value of the Public Warrants and Private Placement Warrants, to the extent they are dilutive.

Earnings per share calculations for all periods prior to the Closing have been retrospectively adjusted by the Exchange Ratio for the equivalent number of shares outstanding immediately after the Closing to effect the reverse recapitalization.

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

The following table sets forth the computation of the Company’s basic and diluted income (loss) per share:

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

(in USD, except share data) 2023 2022 2023 2022

Numerator—basic and diluted

Net income (loss) $ 17,487,976 $ ( 5,650,726 ) $ ( 46,218,564 ) $ ( 25,086,610 )

NOTE 21 – (LOSS) EARNINGS PER SHARE

(Loss) earnings per share of Common Stock is calculated in accordance with ASC 260, Earnings per share.

(Loss) earnings per share – Basic is calculated by dividing (loss) earnings attributable to Common Stockholders - Basic and Diluted by the Weighted average Common Stock outstanding - Basic.

(Loss) earnings per share – Diluted is based on the average number of shares of Common Stock used for the (loss) earnings 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.

(Loss) earnings 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.

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

Subsequent to the Closing, (loss) earnings per share is calculated based on the Weighted average Common Stock outstanding.

The following table sets forth the computation of the Company’s (loss) earnings per share:

For the Three Months Ended March 31,

$s in thousands, except per share amounts 2024 2023

Net loss $ ( 20,087 ) $ ( 44,685 )

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 — — — ( 85,663,336 )

Legacy Bridger Series C Preferred Shares - adjustment to maximum redemption value — ( 5,643,337 ) — ( 196,884,119 )

Series A Preferred Stock—adjustment to eliminate 50% multiplier — 156,362

Series A Preferred Stock—adjustment to maximum redemptions value ( 6,189 ) ( 4,274 )

Net income (loss) attributable to Common Stockholders – basic and diluted $ 11,439,951 $ ( 11,294,063 ) $ 45,715,987 $ ( 307,634,065 )

Denominator—basic

Weighted average Common Stock outstanding—Legacy Bridger shareholders 38,848,420 38,770,646 38,848,420 38,770,646

Weighted average Common Stock outstanding—Public shareholders 2,084,357 — 1,908,752 —

Weighted average Common Stock outstanding—Sponsor and independent directors of JCIC 1,748,189 — 1,600,906 —

Weighted average vested restricted stock units outstanding 2,400,354 — 2,198,126 —

Weighted average Class A Common Stock outstanding - bonus paid to executives 736,554 — 350,740 —

Weighted average Class A Common Stock outstanding - Ignis acquisition 88,088 — 29,685 —

Weighted average Common Stock outstanding—basic 45,905,962 38,770,646 44,936,629 38,770,646

Denominator—diluted

(Loss) earnings attributable to Common Stockholders – Basic and Diluted $ ( 26,276 ) $ 59,103

Weighted average Common Stock outstanding—Basic 47,602,241 43,488,468

1 unchanged sentence

Series A Preferred Stock — 30,624,501

Unvested Restricted Stock Units 895,923 — 945,295 —

Unvested Legacy Bridger Incentive Units — 237,283

1 unchanged sentence

Weighted average Common Stock outstanding—Diluted 47,602,241 74,986,752

Basic and diluted net income (loss) per share

Basic net income (loss) per Common Stock $ 0.25 $ ( 0.29 ) $ 1.02 $ ( 7.93 )

Diluted net income (loss) per Common Stock $ 0.15 $ ( 0.29 ) $ 0.59 $ ( 7.93 )

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

The following table summarizes the potentially dilutive common shares that were excluded from diluted net income (loss) per share computations because the effect would have been anti-dilutive (in thousands):

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

Shares excluded from diluted net income (loss) per share

(Loss) earnings per share—Basic $ ( 0.55 ) $ 1.36

(Loss) earnings per share—Diluted $ ( 0.55 ) $ 0.79

The following table summarizes the potentially dilutive common shares that were excluded from diluted (Loss) earnings per share - Diluted computations because the effect would have been anti-dilutive:

For the Three Months Ended March 31,

Series A Preferred Stock 32,820,828 —

Legacy Series C Preferred Shares — 315,789 — 315,789

Unvested Restricted Stock Units 5,722,283 4,181,142

3 unchanged sentences

Sponsor Earnout Shares 855,000 —

Note 23 – 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 and 2021.

The holders of these shares were entitled to one vote for each share held of record on all matters submitted to a vote of our shareholders.

Legacy Bridger had 243,871 Class C Common Shares issued and outstanding as of December 31, 2022.

Legacy Bridger also had 606,061 shares of Class D Common Shares issued and outstanding as of December 31, 2022.

The Class C and Class D shares were non-voting shares.

The voting power of Legacy Bridger followed the structure of the elected Board members with 3 designees from the holders of Class A Common Shares and 2 designees from the holders of Class B Common Shares.

This was planned to remain in place while the holders of Class B Common Shares in aggregate held at least 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

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

Refer to “Note 8 – Acquisition Activity.”

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.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Note 24 – Revision of Previously Issued Financial Statements

The Company identified an immaterial error in its previously issued annual and interim financial statements.

The error relates to accounting for the freestanding derivative instrument further described in the “Note 12 – Interest Rate Swap and Freestanding Derivative,” affecting annual financial statements as of and for the year ended December 31, 2022 and interim financial statements as of and for the six months ended June 30, 2022 and as of and for the nine months ended September 30, 2022.

The impact of the error to prior periods’ financial statements were determined to be quantitatively and qualitatively immaterial.

In order to improve the consistency and comparability of the financial statements, the Company has revised its previously issued annual and interim financial statements to correct the error.

The below tables present line items for prior period impacted financial statements that have been affected by the following error, referred to as the “Revision”:

(i) an error in the accounting for a freestanding instrument which requires separate accounting under ASC 815, Derivatives and Hedging related to Legacy Bridger Series C Preferred Shares’ features.

As of December 31, 2022

As Previously

Reported Impact of

Revision As Revised

Balance Sheets:

Total assets $ 305,978,901 $ — $ 305,978,901

Accrued expenses and other current liabilities 16,483,289 2,186,283 18,669,572

Total current liabilities 22,120,721 2,186,283 24,307,004

Total liabilities 228,393,011 2,186,283 230,579,294

Legacy Bridger Series C Preferred Shares 489,021,545 — 489,021,545

Accumulated deficit ( 413,118,060 ) ( 2,186,283 ) ( 415,304,343 )

Total members’ deficit ( 411,435,655 ) ( 2,186,283 ) ( 413,621,938 )

Total liabilities, mezzanine equity and members’ deficit $ 305,978,901 $ — $ 305,978,901

For the year ended December 31, 2022

As Previously

Reported Impact of

Revision As Revised

Statements of Operations:

Interest expense $ ( 20,017,177 ) $ ( 2,709 ) $ ( 20,019,886 )

Net loss $ ( 42,121,959 ) $ ( 2,709 ) $ ( 42,124,668 )

Legacy Bridger Series C Preferred Shares adjustment for maximum redemption value ( 200,505,236 ) ( 2,183,574 ) ( 202,688,810 )

Net loss attributable to common shareholders $ ( 328,290,531 ) $ ( 2,186,283 ) $ ( 330,476,814 )

Net loss per share attributable to common shareholders – basic and diluted $ ( 8.15 ) $ ( 0.05 ) $ ( 8.20 )

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

For the year ended December 31, 2022

As Previously

Reported Impact of

Revision As Revised

Statements of Members’ Equity:

Legacy Bridger Series C Preferred Shares adjustment for maximum redemption value $ ( 200,505,236 ) $ ( 2,183,574 ) $ ( 202,688,810 )

Net loss ( 42,121,959 ) ( 2,709 ) ( 42,124,668 )

Accumulated deficit ( 413,118,060 ) ( 2,186,283 ) ( 415,304,343 )

Accumulated other comprehensive income 1,678,497 — 1,678,497

Total members’ deficit $ ( 411,435,655 ) $ ( 2,186,283 ) $ ( 413,621,938 )

For the year ended December 31, 2022

As Previously

Reported Impact of

Revision As Revised

Statements of Cash Flows:

Cash Flows from Operating Activities:

Net loss $ ( 42,121,959 ) $ ( 2,709 ) $ ( 42,124,668 )

Change in fair value of freestanding derivative — 2,709 2,709

Net cash used in operating activities ( 9,917,608 ) — ( 9,917,608 )

Net change in cash, cash equivalents, and restricted cash 25,198,494 — 25,198,494

Cash, cash equivalents and restricted cash and cash equivalents – end of period $ 42,459,626 $ — $ 42,459,626

Cash and cash equivalents – end of period $ 30,162,475 $ — $ 30,162,475

As of September 30, 2022

As Previously

Reported Impact of

Revision As Revised

Balance Sheets:

Total assets $ 320,554,139 $ — $ 320,554,139

Accrued expenses and other current liabilities 12,355,584 2,124,265 14,479,849

Total current liabilities 19,472,020 2,124,265 21,596,285

Total liabilities $ 226,008,817 $ 2,124,265 $ 228,133,082

Series C Preferred shares 483,385,214 — 483,385,214

Accumulated deficit ( 390,307,424 ) ( 2,124,265 ) ( 392,431,689 )

Total members’ deficit ( 388,839,892 ) ( 2,124,265 ) (391,036,037)

Total liabilities, mezzanine equity and members’ deficit $ 320,554,139 $ — $ 320,554,139

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

For the nine months ended September 30, 2022

As Previously

Reported Impact of

Revision As Revised

Statements of Operations:

Interest expense $ ( 13,052,438 ) $ 59,309 $ ( 12,993,129 )

Net loss $ ( 25,117,707 ) $ 59,309 $ (25,058,398)

Legacy Bridger Series C Preferred Shares adjustment for maximum redemption value ( 194,700,545 ) ( 2,183,574 ) ( 196,884,119 )

Net loss attributable to common shareholders $ ( 305,481,588 ) $ ( 2,124,265 ) $ (307,605,853)

Net loss per share attributable to common shareholders – basic and diluted $ ( 7.58 ) $ ( 0.06 ) $ (7.64)

For the nine months ended September 30, 2022

As Previously

Reported Impact of

Revision As Revised

Statements of Members’ Equity:

Legacy Bridger Series C Preferred Shares adjustment for maximum redemption value $ ( 194,700,545 ) $ ( 2,183,574 ) $ ( 196,884,119 )

Net loss ( 25,117,707 ) 59,309 (25,058,398)

Accumulated deficit ( 390,307,424 ) ( 2,124,265 ) ( 392,431,689 )

Total members’ deficit $ ( 388,839,892 ) $ ( 2,124,265 ) $ ( 390,964,157 )

For the nine months ended September 30, 2022

As Previously

Reported Impact of

Revision As Revised

Statements of Cash Flows:

Cash Flows from Operating Activities:

Net loss $ ( 25,117,707 ) $ 59,309 $ (25,058,398)

Change in fair value of freestanding derivative — ( 59,309 ) ( 59,309 )

Net cash used in by operating activities ( 7,930,502 ) — (7,930,502)

Net change in cash, cash equivalents, and restricted cash 89,107,304 — 89,107,304

Cash, cash equivalents and restricted cash and cash equivalents – end of period $ 106,368,436 $ — $ 106,368,436

Cash and cash equivalents – end of period $ 94,143,466 $ — $ 94,143,466

As of June 30, 2022

As Previously

Reported Impact of

Revision As Revised

Balance Sheets:

Total assets $ 309,603,293 $ — $ 309,603,293

Accrued expenses and other current liabilities 10,359,417 2,183,574 12,542,991

Total current liabilities 32,207,636 2,183,574 34,391,210

Total liabilities 209,837,425 2,183,574 212,020,999

Series C Preferred shares 477,741,883 — 475,558,309

Accumulated deficit ( 378,984,493 ) ( 2,183,574 ) ( 381,168,067 )

Total members’ deficit ( 377,976,015 ) ( 2,183,574 ) (380,159,589)

Total liabilities, mezzanine equity and members’ deficit $ 309,603,293 $ — $ 309,603,293

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

For the six months ended June 30, 2022

As Previously

Reported Impact of

Revision As Revised

Statements of Operations:

Net loss $ ( 19,435,884 ) $ — $ ( 19,435,884 )

Legacy Bridger Series C Preferred Shares adjustment for maximum redemption value ( 189,057,208 ) ( 2,183,574 ) ( 191,240,782 )

Net loss attributable to common shareholders $ ( 294,156,428 ) $ ( 2,183,574 ) $ ( 296,340,002 )

Net loss per share attributable to common shareholders – basic and diluted $ ( 7.30 ) $ ( 0.06 ) $ ( 7.36 )

For the six months ended June 30, 2022

As Previously

Reported Impact of

Revision As Revised

Statements of Members’ Equity:

Legacy Bridger Series C Preferred Shares adjustment for maximum redemption value $ ( 189,057,208 ) $ ( 2,183,574 ) $ ( 191,240,782 )

Net loss ( 19,435,884 ) — ( 19,435,884 )

Accumulated deficit ( 378,984,493 ) ( 2,183,574 ) ( 381,168,067 )

Accumulated other comprehensive income 1,008,478 — 1,008,478

Total members’ deficit $ ( 377,976,015 ) $ ( 2,183,574 ) $ ( 380,159,589 )

NOTE 22 – SUBSEQUENT EVENTS

The Company evaluated its activities through the date of the filing of the Unaudited Condensed Consolidated Financial Statements.

On October 13, 2023, the Company amended the purchase agreement with Ignis to limit the number of shares issuable as part of the Acquisition.

Specifically, Ignis shareholders will have the contingent right to receive up to an aggregate maximum of 8,825,729 shares of Common Stock.

The actual number of shares issued to satisfy the contingent consideration will be determined based upon a trailing 120-day VWAP of the Common Stock at the time of each issuance.

Any adjustment to the contingent consideration liability as a result of this amendment will be made as part of the Company’s final purchase price allocation during the measurement period.

On July 21, 2023, we entered into a Purchase and Sale Agreement (the “Bighorn Purchase Agreement”), through our subsidiary Bridger Bighorn, LLC, with Robert Eisele and Christopher Eisele (the “Bighorn Sellers”), the owners of Big Horn Airways, Inc.

(“Bighorn”), pursuant to which we agreed to acquire 100 % of the outstanding equity interests of Bighorn.

The aggregate consideration for the Bighorn acquisition is $ 39.25 million, with $ 14.75 million payable in unregistered shares of Common Stock, and the remainder of $ 24.50 million payable in cash, as may be adjusted pursuant to the terms of the Bighorn Purchase Agreement, including for Bighorn’s cash, indebtedness, and net working capital as of the closing of the Bighorn acquisition.

In November 2023, the Company and Bighorn sellers mutually agreed to terminate the Bighorn Purchase Agreement.

There are no termination fees payable by either party and the Company has agreed to reimburse Bighorn for all fees incurred in connection with the proposed transaction.

The amount of reimbursable transaction fees cannot be estimated at this time.

The Company evaluated its activities through the date of the filing of the Condensed Consolidated Financial Statements.

On April 15, 2024, the Company entered into securities purchase agreements with certain accredited investors (the “Purchasers”), pursuant to which the Company agreed to sell and issue to the Purchasers, severally, an aggregate of 2,183,366 shares of Common Stock, in a registered direct equity offering (the “Registered Direct Offering”).

808,080 of the shares in the Registered Direct Offering were sold to certain directors and executive officers of the Company at an offering price of $ 4.95 per share, which was the closing bid price for shares of the Common Stock on the Nasdaq Global Market on April 15, 2024.

The remaining 1,375,286 shares were sold in the Registered Direct Offering at an offering price of $ 4.25 per share.

The aggregate net proceeds to the Company from the Registered Offering were approximately $ 9.2 million, after deducting fees payable to the placement agent and other offering expenses payable by the Company.

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

What changed 10-Q

Item 1. Financial Statements