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Item 2. Management’s Discussion and Analysis

2024-11-13 compared with 2024-08-13 · 174 added, 172 removed, 460 unchanged (43% of the section changed)

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The following discussion and analysis is intended to help you understand our business, financial condition, results of operations, liquidity and capital resources.

The discussion and analysis should be read together with the condensed consolidated financial statements as of June 30, 2024 and December 31, 2023, for the three and six months ended June 30, 2024 and 2023, and the related notes thereto, that are included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”).

The discussion and analysis should be read together with the condensed consolidated financial statements as of September 30, 2024 and December 31, 2023, for the three and nine months ended September 30, 2024 and 2023, and the related notes thereto, that are included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”).

This discussion and analysis should also be read together with the historical audited annual consolidated financial statements as of and for the years ended December 31, 2023 and 2022, included in the Annual Report on Form 10-K/A (the “Annual Report”).

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BUSINESS OVERVIEW

Bridger provides aerial wildfire surveillance, relief and suppression and aerial firefighting services using next-generation technology and environmentally friendly and sustainable firefighting methods primarily throughout the United States.

Our mission is to save lives, property and habitats threatened by wildfires, leveraging our high-quality team, specialized aircraft and innovative use of technology and data.

We are meeting an underserved and growing need for next-generation full-service aerial firefighting platforms.

Our portfolio is organized across two core offerings:

Our portfolio is organized across three core offerings:

• Fire Suppression:

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Consists of providing aerial surveillance via manned (“Air Attack”) aircraft for fire suppression aircraft over an incident and providing tactical coordination with the incident commander.

• Maintenance Repair:

Consists of maintenance and repair services for return-to-service upgrades of the Spanish Scoopers as well as airframe modifications and integration solutions for government and commercial customers.

We manage our operations as a single segment for purposes of assessing performance, making operating decisions and allocating resources.

We have made and will continue to make significant investments in capital expenditures to build and expand our aerial forest fire management technologies.

We expect that our existing cash and cash equivalents as well as cash generated from our operations and potential additional sales of our common stock, par value $0.0001 per share (“Common Stock”), through our at-the-market offering and other offerings will be sufficient to meet our current working capital and capital expenditure requirements for a period of at least 12 months from the date of this Quarterly Report, depending on the cash generated from our seasonal firefighting operations in 2024 and 2025.

We have made and will continue to make significant investments in capital expenditures to build and expand our integrated response solutions.

Refer to the “Liquidity and Capital Resources” section below and “Note 1 – Organization and Basis of Presentation” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional details on management’s assessment of the Company’s ability to continue as a going concern.

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On January 24, 2023 (the “Closing Date”), Jack Creek Investment Corp (“JCIC”) completed the reverse recapitalization (the “Closing” and the “Reverse Recapitalization”) with the Company’s predecessor, Bridger Aerospace Group Holdings, LLC and its subsidiaries (collectively, “Legacy Bridger”).

As a result of the Reverse Recapitalization, Legacy Bridger and JCIC each became wholly-owned subsidiaries of the Company, and the JCIC shareholders and the equity holders of Legacy Bridger converted their equity ownership in JCIC and Legacy Bridger, respectively, into equity ownership in the Company.

Legacy Bridger has been determined to be the accounting acquirer with respect to the Reverse Recapitalization, which will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP.

As a result of the Reverse Recapitalization, JCIC and Legacy Bridger each became wholly-owned subsidiaries of a new public company that was renamed Bridger Aerospace Group Holdings, Inc, and JCIC shareholders and Legacy Bridger equity holders converted their equity ownership in JCIC and Legacy Bridger, respectively, into equity ownership in Bridger.

Legacy Bridger was determined to be the accounting acquirer as of the Closing Date with respect to the Reverse Recapitalization, which has been accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP.

Upon consummation of the Reverse Recapitalization, the most significant change in Legacy Bridger’s future reported financial position and results of operations was a gross decrease in cash and cash equivalents (as compared to Legacy Bridger’s balance sheet at December 31, 2022), of approximately $17.0 million.

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KEY COMPONENTS OF OUR RESULTS OF OPERATIONS

Our primary source of revenues is from providing services, which are disaggregated into fire suppression, aerial surveillance and other services.

Our primary source of revenues is from providing services, which are disaggregated into fire suppression, aerial surveillance, maintenance repair and other services.

Revenues and growth for our fire suppression and aerial surveillance services are driven by climate trends, specifically the intensity and timing of the North American fire season.

Maintenance repair includes revenue from return-to-service and maintenance repair services performed externally for third parties.

Other services primarily consist of extraneous fulfillment of contractual services such as extended availability and mobilizations.

Other services also include maintenance services performed externally for third parties.

We charge daily and hourly rates depending upon the type of firefighting service rendered and under which contract the services are performed.

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

Other revenue consists of additional contractual items that can be charged to the customer, such as leasing revenues for facilities, as well as maintenance, repair and return-to-service work performed on customer aircraft.

Maintenance repair consists of maintenance, repair and return-to-service work performed on customer aircraft.

Other revenue consists of additional contractual items that can be charged to the customer, such as leasing revenues for facilities.

Cost of Revenues

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These include labor, depreciation, subscriptions and fees, travel and fuel.

Cost of revenues also includes routine aircraft maintenance expenses and repairs, consisting primarily of labor, parts, consumables, travel and subscriptions unique to each airframe.

Cost of revenues also includes routine aircraft maintenance expenses and repairs, including maintenance and modification repair work for third-party aircraft, consisting primarily of labor, parts, consumables, travel and subscriptions unique to each airframe.

Selling, General and Administrative Expense

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RESULTS OF OPERATIONS

Comparison of the Three Months Ended June 30, 2024 to the Three Months Ended June 30, 2023

The following table sets forth our Condensed Consolidated Statements of Operations information for the three months ended June 30, 2024 and 2023 and should be reviewed in conjunction with the financial statements and notes included elsewhere in this Quarterly Report.

Comparison of the Three Months Ended September 30, 2024 to the Three Months Ended September 30, 2023

The following table sets forth our Condensed Consolidated Statements of Operations information for the three months ended September 30, 2024 and 2023 and should be reviewed in conjunction with the financial statements and notes included elsewhere in this Quarterly Report.

$s in thousands Three Months Ended

June 30, 2024 Three Months Ended

June 30, 2023 Period Over Period Change ($) Period Over Period Change (%)

September 30, 2024 Three Months Ended

September 30, 2023 Period Over Period Change ($) Period Over Period Change (%)

Revenues $ 64,507 $ 53,619 $ 10,888 20%

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Selling, general and administrative expense 8,641 15,064 (6,423) (43%)

Operating loss (4,755) (14,082) 9,327 (66%)

Operating income 32,865 22,584 10,281 46%

Interest expense (5,989) (5,970) (19) —%

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Loss before income taxes 27,346 17,174 10,172 59%

Income tax benefit 484 — 484 n/a

Net loss $ (9,981) $ (19,022) $ 9,041 (48%)

Revenues increased by $1.4 million, or 12%, to $13.0 million for the three months ended June 30, 2024, from $11.6 million for the three months ended June 30, 2023.

Revenues by service offering for the three months ended June 30, 2024 and 2023 were as follows:

Income tax benefit — 314 (314) (100%)

Net income $ 27,346 $ 17,488 $ 9,858 56%

Revenues increased by $10.9 million, or 20%, to $64.5 million for the three months ended September 30, 2024, from $53.6 million for the three months ended September 30, 2023.

Revenues by service offering for the three months ended September 30, 2024 and 2023 were as follows:

$s in thousands Three Months Ended

June 30, 2024 Three Months Ended

June 30, 2023 Period Over Period Change ($) Period Over Period Change (%)

September 30, 2024 Three Months Ended

September 30, 2023 Period Over Period Change ($) Period Over Period Change (%)

Fire suppression $ 50,591 $ 46,154 $ 4,437 10%

Aerial surveillance 7,623 7,355 268 4%

Maintenance repair 3,774 — 3,774 n/a

Other services 2,519 110 2,409 2,190%

Total revenues $ 64,507 $ 53,619 $ 10,888 20%

Fire suppression revenue decreased by $3.0 million, or 29%, to $7.5 million for the three months ended June 30, 2024, from $10.4 million for the three months ended June 30, 2023.

The decrease was primarily due to less Super Scoopers deployed for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Fire suppression revenue increased by $4.4 million, or 10%, to $50.6 million for the three months ended September 30, 2024, from $46.2 million for the three months ended September 30, 2023.

The increase was primarily driven by increased flight hours for our Super Scoopers for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

In 2023, the Company actively expanded our aerial firefighting operations in Canada.

Aerial surveillance increased by $2.4 million, or 213%, to $3.5 million for the three months ended June 30, 2024, from $1.1 million for the three months ended June 30, 2023.

The increase was primarily due to the higher rate of the Pilatus aircraft operating for the three months ended June 30, 2024 compared to the Twin Commander aircraft operating for three months ended June 30, 2023.

Other services revenue increased by $2.0 million, or 4,630%, to $2.0 million for the three months ended June 30, 2024, from $43,000 for the three months ended June 30, 2023.

The increase was primarily due to return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement.

The Company has had no aerial firefighting operations in Canada in 2024.

Aerial surveillance increased by $0.3 million, or 4%, to $7.6 million for the three months ended September 30, 2024, from $7.4 million for the three months ended September 30, 2023.

The increase was primarily due to the higher rate of the Pilatus aircraft operating for the three months ended September 30, 2024 compared to the Twin Commander aircraft operating for three months ended September 30, 2023.

Maintenance repair was $3.8 million for the three months ended September 30, 2024, compared to none for the three months ended September 30, 2023.

This amount is primarily due to the new revenues from maintenance and repair work performed by FMS and the return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement.

Refer to “Note 2 – Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional details.

Revenues by type for the three months ended June 30, 2024 and 2023 were as follows:

Other services revenue increased by $2.4 million, or 2,190%, to $2.5 million for the nine months ended September 30, 2024, from $0.1 million for the nine months ended September 30, 2023.

The increase was primarily due to third-party training and flight operations services utilizing our aircraft for the nine months ended September 30, 2024 that did not occur in the prior year period.

Revenues by type for the three months ended September 30, 2024 and 2023 were as follows:

$s in thousands Three Months Ended

June 30, 2024 Three Months Ended

June 30, 2023 Period Over Period Change ($) Period Over Period Change (%)

September 30, 2024 Three Months Ended

September 30, 2023 Period Over Period Change ($) Period Over Period Change (%)

Flight revenue $ 33,958 $ 28,323 $ 5,635 20%

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Total revenues $ 64,507 $ 53,619 $ 10,888 20%

Flight revenue decreased by $1.3 million, or 23%, to $4.5 million for the three months ended June 30, 2024, from $5.8 million for the three months ended June 30, 2023.

The decrease in flight revenue was primarily due to less Super Scoopers deployed for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Flight revenue increased by $5.6 million, or 20%, to $34.0 million for the three months ended September 30, 2024, from $28.3 million for the three months ended September 30, 2023.

The increase in flight revenue was primarily driven by increased flight hours for our Super Scoopers for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

In 2023, the Company actively expanded our aerial firefighting operations in Canada.

The Company has had no aerial firefighting operations in Canada in 2024.

Standby revenue increased by $1.4 million, or 27% to $6.5 million for the three months ended June 30, 2024, from $5.1 million for the three months ended June 30, 2023.

Other revenue increased by $1.3 million, or 194%, to $2.0 million for the three months ended June 30, 2024, from $0.7 million for the three months ended June 30, 2023.

The increase was primarily due to return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement.

Standby revenue increased by $0.7 million, or 3% to $25.7 million for the three months ended September 30, 2024, from $25.0 million for the three months ended September 30, 2023.

Other revenue increased by $4.5 million, or 1,556%, to $4.8 million for the three months ended September 30, 2024, from $0.3 million for the three months ended September 30, 2023.

The increase was primarily due to the maintenance and repair work performed by FMS and the return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement.

Refer to “Note 2 – Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional details.

Cost of Revenues

Total cost of revenues decreased by $0.6 million, or 6%, to $9.9 million for the three months ended June 30, 2024, from $10.5 million for the three months ended June 30, 2023.

Total cost of revenues increased by $7.0 million, or 44%, to $23.0 million for the three months ended September 30, 2024, from $16.0 million for the three months ended September 30, 2023.

Flight Operations

Flight operations expenses decreased by $1.2 million, or 19%, to $5.1 million for the three months ended June 30, 2024, from $6.3 million for the three months ended June 30, 2023.

The decrease was primarily due to a decrease in depreciation expense due to a decrease in flight hours for the Super Scoopers in the three months ended June 30, 2024.

Maintenance expenses increased by $0.5 million, or 13%, to $4.8 million for the three months ended June 30, 2024, from $4.2 million for the three months ended June 30, 2023.

The increase was primarily driven by an increase in employee labor expenses during the three months ended June 30, 2024.

Flight operations expenses increased by $4.9 million, or 48%, to $15.1 million for the three months ended September 30, 2024, from $10.2 million for the three months ended September 30, 2023.

The increase was primarily attributable to an increase in depreciation expense of $4.3 million, an increase in training costs of $0.3 million, and an increase of employee labor expenses of $0.3 million, in each case for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Maintenance expenses increased by $2.2 million, or 38%, to $7.9 million for the three months ended September 30, 2024, from $5.7 million for the three months ended September 30, 2023.

The increase was primarily driven by an increase in aircraft maintenance and modification expense of $1.4 million, an increase in depreciation expense of $0.5 million, an increase in subscriptions, licenses, and fees of $0.1 million, and an increase in training expenses of $0.1 million, in each case for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Selling, General and Administrative Expense

Selling, general and administrative expense decreased by $7.3 million, or 48%, to $7.9 million for the three months ended June 30, 2024, from $15.2 million for the three months ended June 30, 2023.

Selling, general and administrative expense decreased by $6.4 million, or 43%, to $8.6 million for the three months ended September 30, 2024, from $15.1 million for the three months ended September 30, 2023.

The decrease was primarily attributable to a decrease in the market value of the Warrants of $4.3 million.

The decrease was partially attributable to the decrease in stock-based compensation of $3.0 million associated with RSUs issued to senior management and employees of Bridger.

The decrease was also partially attributable to a decrease in professional service fees of approximately $0.8 million due to higher costs associated with becoming a public company in January 2023.

The remaining decrease is primarily attributable to a loss on disposal of $0.6 million related to an aging surveillance aircraft recorded in the three months ended June 30, 2023.

Interest Expense

Interest expense increased by $0.3 million, or 6%, to $5.9 million for the three months ended June 30, 2024, from $5.5 million for the three months ended June 30, 2023.

The increase was primarily driven by lower capitalized interest associated with the financing of the construction of fixed assets for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Other income decreased by $0.5 million, or 76%, to $0.1 million for the three months ended June 30, 2024, from $0.6 million for the three months ended June 30, 2023.

The decrease was primarily driven by realized gains from available-for-sale securities of $0.3 million.

Other income decreased by $0.1 million, or 16%, to $0.5 million for the three months ended September 30, 2024, from $0.6 million for the three months ended September 30, 2023.

The decrease was primarily driven by realized gains on available-for-sale securities of $0.1 million.

Refer to “ Note 4 – Cash Equivalents and Investment in Marketable Securities ” of the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report for additional details.

The decrease was also partially attributable to interest income for the embedded derivative of Legacy Bridger Series C Preferred Shares of $0.2 million.

Refer to “ Note 17 – Mezzanine Equity ” of the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report for additional details.

Income Tax Benefit

Income tax benefit increased to $0.5 million for the three months ended June 30, 2024, from zero for the three months ended June 30, 2023.

The increase was attributable to a discrete benefit generated from the FMS Acquisition during 2024.

Comparison of the Six Months Ended June 30, 2024 to the Six Months Ended June 30, 2023

The following table sets forth our unaudited condensed consolidated statements of operations information for the six months ended June 30, 2024 and 2023 and should be reviewed in conjunction with the financial statements and notes included elsewhere in this Quarterly Report.

$s in thousands Six Months Ended

June 30, 2024 Six Months Ended

June 30, 2023 Period Over Period Change ($) Period Over Period Change (%)

Income tax benefit decreased by $0.3 million to zero for the three months ended September 30, 2024, from $0.3 million for the nine months ended September 30, 2023.

The decrease was driven by a discrete benefit generated from the Ignis Acquisition for the three months ended September 30, 2023.

Comparison of the Nine Months Ended September 30, 2024 to the Nine Months Ended September 30, 2023

The following table sets forth our unaudited condensed consolidated statements of operations information for the nine months ended September 30, 2024 and 2023 and should be reviewed in conjunction with the financial statements and notes included elsewhere in this Quarterly Report.

$s in thousands Nine Months Ended

September 30, 2024 Nine Months Ended

September 30, 2023 Period Over Period Change ($) Period Over Period Change (%)

Revenues $ 83,028 $ 65,600 $ 17,428 27%

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Total cost of revenues 42,074 33,730 8,344 25%

Gross loss (552) (5,778) 5,226 (90%)

Gross income 40,954 31,870 9,084 29%

Selling, general and administrative expense 28,153 63,480 (35,327) (56%)

Operating loss (20,064) (54,194) 34,130 (63%)

Operating income (loss) 12,801 (31,610) 44,411 (140%)

Interest expense (17,766) (17,176) (590) 3%

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Loss before income taxes (3,192) (46,533) 43,341 (93)%

Income tax benefit 470 — 470 n/a

Income tax benefit 470 314 156 50%

Net loss $ (2,722) $ (46,219) $ 43,497 (94%)

Revenues increased by $6.5 million, or 55%, to $18.5 million for the six months ended June 30, 2024, from $12.0 million for the six months ended June 30, 2023.

Revenues by service offering for the six months ended June 30, 2024 and 2023 were as follows:

$s in thousands Six Months Ended

June 30, 2024 Six Months Ended

June 30, 2023 Period Over Period Change ($) Period Over Period Change (%)

Revenues increased by $17.4 million, or 27%, to $83.0 million for the nine months ended September 30, 2024, from $65.6 million for the nine months ended September 30, 2023.

Revenues by service offering for the nine months ended September 30, 2024 and 2023 were as follows:

$s in thousands Nine Months Ended

September 30, 2024 Nine Months Ended

September 30, 2023 Period Over Period Change ($) Period Over Period Change (%)

Fire suppression $ 61,570 $ 56,603 $ 4,967 9%

Aerial surveillance 11,959 8,479 3,480 41%

Maintenance repair 5,591 — 5,591 n/a

Other services 3,908 518 3,390 654%

Total revenues $ 83,028 $ 65,600 $ 17,428 27%

Fire suppression revenue increased by $0.9 million, or 9%, to $11.3 million for the six months ended June 30, 2024, from $10.4 million for the six months ended June 30, 2023.

The increase was primarily due to an earlier start to the 2024 wildfire season in March and April of 2024, compared to the six months ended June 30, 2023, which led to more aircraft operating for the six months ended June 30, 2024.

Aerial surveillance revenue increased by $3.0 million, or 265%, to $4.1 million for the six months ended June 30, 2024, from $1.1 million for the six months ended June 30, 2023.

The increase was primarily due to the higher rate of the Pilatus aircraft operating for the six months ended June 30, 2024 compared to the Twin Commander aircraft operating for the six months ended June 30, 2023.

The increase was partially due to an earlier start to the 2024 wildfire season in March and April of 2024, compared to the six months ended June 30, 2023, which led to more aircraft operating for the six months ended June 30, 2024.

Other services revenue increased by $2.7 million, or 654%, to $3.1 million for the six months ended June 30, 2024, from $0.4 million for the six months ended June 30, 2023.

The increase was primarily due to return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement.

Fire suppression revenue increased by $5.0 million, or 9%, to $61.6 million for the nine months ended September 30, 2024, from $56.6 million for the nine months ended September 30, 2023.

The increase was primarily due to an earlier start to the 2024 wildfire season in March and April of 2024 and increased flight hours for our Super Scoopers, compared to the nine months ended September 30, 2023.

Aerial surveillance revenue increased by $3.5 million, or 41%, to $12.0 million for the nine months ended September 30, 2024, from $8.5 million for the nine months ended September 30, 2023.

The increase was primarily due to the higher rate of the Pilatus aircraft operating for the nine months ended September 30, 2024 compared to the Twin Commander aircraft operating for the nine months ended September 30, 2023.

The increase was partially due to an earlier start to the 2024 wildfire season in March and April of 2024, compared to the nine months ended September 30, 2023, which led to more aircraft operating for the nine months ended September 30, 2024.

Maintenance repair was $5.6 million for the nine months ended September 30, 2024, compared to none for the nine months ended September 30, 2023.

Refer to “Note 2 – Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional details.

Revenues by type for the six months ended June 30, 2024 and 2023 were as follows:

$s in thousands Six Months Ended

June 30, 2024 Six Months Ended

June 30, 2023 Period Over Period Change ($) Period Over Period Change (%)

Other services revenue increased by $3.4 million, or 654%, to $3.9 million for the nine months ended September 30, 2024, from $0.5 million for the nine months ended September 30, 2023.

The increase was primarily due to third-party training and flight operations services utilizing our aircraft for the nine months ended September 30, 2024 that did not occur in the prior year period.

Revenues by type for the nine months ended September 30, 2024 and 2023 were as follows:

$s in thousands Nine Months Ended

September 30, 2024 Nine Months Ended

September 30, 2023 Period Over Period Change ($) Period Over Period Change (%)

Flight revenue $ 39,354 $ 34,117 $ 5,237 15%

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Total revenues $ 83,028 $ 65,600 $ 17,428 27%

Flight revenue decreased by $0.4 million, or 7%, to $5.4 million for the six months ended June 30, 2024, from $5.8 million for the six months ended June 30, 2023.

The decrease in flight revenue was primarily due to less flight hours for our Super Scoopers in the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Flight revenue increased by $5.2 million, or 15%, to $39.4 million for the nine months ended September 30, 2024, from $34.1 million for the nine months ended September 30, 2023.

The increase in flight revenue was primarily driven by increased flight hours for our Super Scoopers in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

In 2023, the Company actively expanded our aerial firefighting operations in Canada.

The Company has had no aerial firefighting operations in Canada in 2024.

Standby revenue increased by $4.8 million, or 94%, to $10.0 million for the six months ended June 30, 2024, from 5.1 million for the six months ended June 30, 2023.

Standby revenue increased by $5.6 million, or 19%, to $35.7 million for the nine months ended September 30, 2024, from 30.1 million for the nine months ended September 30, 2023.

The increase was also attributable to the early deployment of two Super Scoopers in March and April of 2024.

Other revenue increased by $2.1 million, or 199%, to $3.1 million for the six months ended June 30, 2024, from $1.1 million for the six months ended June 30, 2023.

The increase was primarily due to return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement.

Other revenue increased by $6.6 million, or 493%, to $7.9 million for the nine months ended September 30, 2024, from $1.3 million for the nine months ended September 30, 2023.

The increase was primarily due to the new revenues from maintenance and repair work performed by FMS and the return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement.

Refer to “Note 2 – Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional details.

Cost of Revenues

Total cost of revenues increased by $1.3 million, or 7%, to $19.1 million for the six months ended June 30, 2024, from $17.8 million for the six months ended June 30, 2023.

Total cost of revenues increased by $8.3 million, or 25%, to $42.1 million for the nine months ended September 30, 2024, from $33.7 million for the nine months ended September 30, 2023.

Flight Operations

Flight operations expenses increased by $0.1 million, or 1%, to $10.1 million for the six months ended June 30, 2024, from $10.0 million for the six months ended June 30, 2023.

The increase was primarily attributable to an increase of employee labor expenses of $0.9 million, an increase in aircraft lease expense of approximately $0.7 million due to two Pilatus operating leases commencing in July 2023 and a Twin Otter operating lease commencing in April 2023, and an increase in training costs of $0.3 million.

The increase was partially offset by a decrease of $1.8 million in depreciation expense due to a decrease in flight hours for the Super Scoopers in the six months ended June 30, 2024.

Maintenance expenses increased by $1.2 million, or 16%, to $9.0 million for the six months ended June 30, 2024, from $7.7 million for the six months ended June 30, 2023.

The increase was primarily driven by an increase in salaries and wages of $0.6 million, increase in depreciation expense of $0.4 million, and higher subscriptions, licenses, and fees of $0.2 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Flight operations expenses increased by $5.0 million, or 24%, to $25.2 million for the nine months ended September 30, 2024, from $20.3 million for the nine months ended September 30, 2023.

The increase was primarily attributable to an increase in depreciation expense of $2.5 million, an increase in aircraft lease expense of approximately $0.8 million due to two Pilatus operating leases commencing in July 2023 and a Twin Otter operating lease commencing in April 2023, an increase in training costs of $0.6 million, and an increase of employee labor expenses of $0.6 million, in each case for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Maintenance expenses increased by $3.4 million, or 25%, to $16.8 million for the nine months ended September 30, 2024, from $13.5 million for the nine months ended September 30, 2023.

The increase was primarily driven by an increase in aircraft maintenance and modification expense of $1.3 million, an increase depreciation expense of $1.0 million, an increase in salaries and wages of $0.8 million, and an increase subscriptions, licenses, and fees of $0.3 million, in each case for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Selling, General and Administrative Expense

Selling, general and administrative expense decreased by $28.9 million, or 60%, to $19.5 million for the six months ended June 30, 2024, from $48.4 million for the six months ended June 30, 2023.

Selling, general and administrative expense decreased by $35.3 million, or 56%, to $28.2 million for the nine months ended September 30, 2024, from $63.5 million for the nine months ended September 30, 2023.

The decrease was primarily attributable to the decrease in stock-based compensation of $25.9 million primarily associated with the immediate vesting of RSUs issued to executives and senior management of Bridger in connection with the Reverse Recapitalization in January 2023.

The remaining decrease is partially attributable to a decrease in professional service fees of $2.0 million due to higher costs associated with becoming a public company in the first six months of 2023 and a decrease in the market value of the Warrants of $1.7 million.

The remaining decrease is partially attributable to a decrease in the market value of the Warrants of $6.0 million and a decrease in professional service fees of $2.2 million due to higher costs associated with becoming a public company in the first nine months of 2023.

Interest Expense

Interest expense increased by $0.6 million, or 5%, to $11.8 million for the six months ended June 30, 2024, from $11.2 million for the six months ended June 30, 2023.

The increase was primarily driven by lower capitalized interest associated with the financing of the construction of fixed assets for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Other income decreased by $0.4 million, or 23%, to $1.3 million for the six months ended June 30, 2024, from Other income of $1.7 million for the six months ended June 30, 2023.

The decrease was primarily driven by realized gains on available-for-sale securities of $0.7 million.

The decrease was offset primarily by an increase in dividend income of $0.3 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Interest expense increased by $0.6 million, or 3%, to $17.8 million for the nine months ended September 30, 2024, from $17.2 million for the nine months ended September 30, 2023.

The increase was primarily driven by lower capitalized interest associated with the financing of the construction of fixed assets for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Other income decreased by $0.5 million, or 21%, to $1.8 million for the nine months ended September 30, 2024, from Other income of $2.3 million for the nine months ended September 30, 2023.

The decrease was primarily attributable to interest income for the embedded derivative of Legacy Bridger Series C Preferred Shares of $1.2 million.

Refer to “ Note 17 – Mezzanine Equity ” of the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report for additional details.

The decrease was offset primarily by an increase in interest income of $0.6 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Income Tax Benefit

Income tax benefit increased to $0.5 million for the six months ended June 30, 2024, from zero for the six months ended June 30, 2023.

Income tax benefit increased by $0.2 million, or 50%, to $0.5 million for the nine months ended September 30, 2024, from $0.3 million for the nine months ended September 30, 2023.

The increase was attributable to a discrete benefit generated from the FMS Acquisition during 2024.

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We also believe these measures help investors compare our operating performance with its results in prior periods in a way that is consistent with how management evaluates such performance.

Each of the profitability measures described below are not recognized under GAAP and do not purport to be an alternative to net income or loss determined in accordance with GAAP as a measure of our performance.

Each of the profitability measures described below is not recognized under GAAP and does not purport to be an alternative to net income or loss determined in accordance with GAAP as a measure of our performance.

Such measures have limitations as analytical tools, and should not be considered in isolation or as substitutes for our results as reported under GAAP.

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EBITDA and Adjusted EBITDA

EBITDA is a non-GAAP profitability measure that represents net income or loss for the period before the impact of the interest expense, income tax benefit and depreciation and amortization of property, plant and equipment and intangible assets.

EBITDA is a non-GAAP profitability measure that represents net income or loss for the period before the impact of the interest expense, income tax expense (benefit) and depreciation and amortization of property, plant and equipment and intangible assets.

EBITDA eliminates potential differences in performance caused by variations in capital structures (affecting financing expenses), the cost and age of tangible assets (affecting relative depreciation expense) and the extent to which intangible assets are identifiable (affecting relative amortization expense).

Adjusted EBITDA is a non-GAAP profitability measure that represents EBITDA before certain items that are considered to hinder comparison of the performance of our businesses on a period-over-period basis or with other businesses.

During the periods presented, we exclude from Adjusted EBITDA certain costs that are required to be expensed in accordance with GAAP, including non-cash stock-based compensation, business development and integration expenses, offering costs, gain on disposal of fixed assets, non-cash adjustments to the fair value of earnout consideration, and non-cash adjustments to the fair value of Warrants issued in connection with the Reverse Recapitalization.

During the periods presented, we exclude from Adjusted EBITDA certain costs that are required to be expensed in accordance with GAAP, including non-cash stock-based compensation, business development and integration expenses, offering costs, gains and losses on disposal of fixed assets, non-cash adjustments to the fair value of earnout consideration, and non-cash adjustments to the fair value of Warrants issued in connection with the Reverse Recapitalization.

Our management believes that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA are appropriate to provide additional information to investors about certain material non-cash items and about unusual items that we do not expect to continue at the same level in the future.

The reconciliation of Net loss, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA for the three months ended June 30, 2024 and 2023 is as follows:

The reconciliation of Net income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA for the three months ended September 30, 2024 and 2023 is as follows:

$s in thousands Three Months Ended

June 30, 2024 Three Months Ended

June 30, 2023 Period Over Period Change ($) Period Over Period Change (%)

Net loss $ (9,981) $ (19,022) $ 9,041 (48%)

Income tax benefit (484) — (484) n/a

September 30, 2024 Three Months Ended

September 30, 2023 Period Over Period Change ($) Period Over Period Change (%)

Net income $ 27,346 $ 17,488 $ 9,858 56%

Income tax benefit — (314) 314 (100%)

Depreciation and amortization 11,471 5,248 6,223 119%

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105 662 (557) (84%)

Loss on disposal 6

— 1,054 (1,054) (100)%

Adjusted EBITDA $ 46,974 $ 38,738 $ 8,236 21%

Net loss margin 7

(77 %) (164 %)

Net income margin 6

Adjusted EBITDA margin 6

1 Represents non-cash stock-based compensation expense associated with employee and non-employee equity awards.

2 Represents expenses related to potential acquisition targets and additional business lines.

3 Represents non-cash fair value adjustment for earnout consideration issued in connection with the acquisition of Ignis Technologies, Inc.

2 Represents expenses related to integration costs for completed acquisitions and expenses related to potential acquisition targets and additional business lines.

3 Represents non-cash fair value adjustment for earnout consideration issued in connection with the acquisitions of Ignis Technologies, Inc.

and Flight Test & Mechanical Solutions, Inc.

4 Represents the non-cash fair value adjustment for Warrants issued in connection with the Reverse Recapitalization.

5 Represents one-time costs for professional service fees related to the preparation for potential offerings that have been expensed during the period.

6 Represents loss on the disposal of an aging aircraft and the non-cash impairment charges on a retired aircraft.

7 Net loss margin calculated as Net loss divided by Total revenue and Adjusted EBITDA margin calculated as Adjusted EBITDA divided by Total revenue.

The reconciliation of Net loss, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA for the six months ended June 30, 2024 and 2023 is as follows:

$s in thousands Six Months Ended

June 30, 2024 Six Months Ended

June 30, 2023 Period Over Period Change ($) Period Over Period Change (%)

6 Net income margin calculated as Net income divided by Total revenue and Adjusted EBITDA margin calculated as Adjusted EBITDA divided by Total revenue.

The reconciliation of Net loss, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA for the nine months ended September 30, 2024 and 2023 is as follows:

$s in thousands Nine Months Ended

September 30, 2024 Nine Months Ended

September 30, 2023 Period Over Period Change ($) Period Over Period Change (%)

Net loss $ (2,722) $ (46,219) $ 43,497 (94%)

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Net loss margin 7

(162 %) (532 %)

Adjusted EBITDA margin 7

(36 %) (81 %)

1 Represents non-cash stock-based compensation expense associated with employee and non-employee equity awards.

2 Represents expenses related to potential acquisition targets and additional business lines.

2 Represents expenses related to integration costs for completed acquisitions and expenses related to potential acquisition targets and additional business lines.

3 Represents non-cash fair value adjustment for earnout consideration issued in connection with the acquisition of Ignis Technologies, Inc.

and Flight Test & Mechanical Solutions, Inc.

4 Represents the non-cash fair value adjustment for Warrants issued in connection with the Reverse Recapitalization.

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

For the six months ended June 30, 2024, the Company had an operating loss of $20.1 million, net loss of $30.1 million and cash flow used in operating activities of $22.6 million.

In addition, as of June 30, 2024, the Company had unrestricted cash and investments of $8.5 million.

As disclosed in detail under the section entitled “Liquidity and Capital Resources—Indebtedness” below, the Company is not in compliance, and is projected to not be in compliance, with certain financial covenants associated with the Series 2022 Bonds during the next 12 months.

For the nine months ended September 30, 2024, the Company had an operating income of $12.8 million, net loss of $2.7 million and cash flow provided by operating activities of $0.2 million.

In addition, as of September 30, 2024, the Company had unrestricted cash and investments of $33.3 million.

As disclosed in detail under the section entitled “Liquidity and Capital Resources—Indebtedness” below, the Company is not in compliance, and it is possible it will not be in compliance, with certain financial covenants associated with the Series 2022 Bonds during the next 12 months.

Beginning in November 2023, management has implemented steps to help improve the Company’s near-term cash position through a combination of cost reduction measures and the raising of funds through a number of potential avenues, including additional sales of our Common Stock through our at-the-market offering and registered direct equity offering.

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.

As of August 9, 2024, $5,869,526 is available for potential future sales under the 2024 ATM Agreement, which may be utilized for future financings under our effective shelf registration statement.

As of November 8, 2024, $5,869,526 is available for potential future sales under the 2024 ATM Agreement, which may be utilized for future financings under our effective shelf registration statement.

The amount registered for potential future sales under the 2024 ATM Agreement was reduced to $5,869,526 on April 15, 2024 in accordance with General Instruction I.B.6 of Form S-3 in connection with the Company’s Registered Direct Offering of 2,183,366 shares of Common Stock described in “Note 18 – Stockholders’ Deficit” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report.

Current and anticipated noncompliance with financial covenants and uncertainty regarding the Company’s ability to diligently prosecute the cost reduction plan and to raise additional cash funding 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 period ended June 30, 2024.

Current and possible future noncompliance with financial covenants and uncertainty regarding the Company’s ability to diligently prosecute the cost reduction plan and to raise additional cash funding 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 period ended September 30, 2024.

Cash and Marketable Securities

As of June 30, 2024, our principal sources of liquidity were cash and cash equivalents of $8.5 million which were held for working capital purposes and restricted cash of $14.0 million.

As of September 30, 2024, our principal sources of liquidity were cash and cash equivalents of $33.3 million which were held for working capital purposes and restricted cash of $9.3 million.

Restricted cash consists primarily of cash reserved for debt servicing on the Series 2022 Bonds.

From time to time, the Company invests its excess cash in highly rated available-for-sale securities, with the primary objective of minimizing the potential risk of principal loss.

As of June 30, 2024, the Company had zero of investments in debt securities classified as available-for-sale.

As of September 30, 2024, the Company had zero of investments in debt securities classified as available-for-sale.

We may receive up to $306.5 million from the exercise of the 9,400,000 private placement warrants and 17,249,874 public warrants of the Company outstanding (collectively, the “Warrants”), assuming the exercise in full of all the Warrants for cash, but not from the sale of the shares of Common Stock issuable upon such exercise.

On June 28, 2024, the closing price of our Common Stock was $3.74 per share.

On September 30, 2024, the closing price of our Common Stock was $2.22 per share.

For so long as the market price of our Common Stock is below the exercise price of our Warrants ($11.50 per share), our Warrants remain “out-of-the money,” and holders of our Warrants are unlikely to cash exercise their Warrants, resulting in little or no cash proceeds to us.

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We may in the future seek to raise additional funds through various potential sources, such as equity and debt financing for general corporate purposes or for specific purposes, including in order to pursue growth initiatives.

Based on our unrestricted cash and cash equivalents balance as of June 30, 2024, and our projected cash use, we would anticipate the need to raise additional funds through equity or debt financing (or the issuance of stock as acquisition consideration) to pursue any significant acquisition opportunity, at the time of such acquisition opportunity.

Based on our unrestricted cash and cash equivalents balance as of September 30, 2024, and our projected cash use, we would anticipate the need to raise additional funds through equity or debt financing (or the issuance of stock as acquisition consideration) to pursue any significant acquisition opportunity, at the time of such acquisition opportunity.

Our ability to generate proceeds from equity financings will significantly depend on the market price of our Common Stock.

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However, there can be no assurance that this acquisition will be completed upon the timeline discussed above or at all, nor that the Company will be able to successfully contract with various foreign governments to generate revenue.

As of June 30, 2024, we held $24.9 million of current liabilities, $16.2 million of which was accrued expenses and other current liabilities.

As of June 30, 2024, we held $217.6 million of long-term liabilities with $203.6 million of total long-term debt, net of debt issuance costs, which are comprised of the Series 2022 Bonds, two separate credit facilities brokered through Live Oak Bank, two separate credit facilities with Rocky Mountain Bank and various short term vehicle loans through First Interstate Bank.

As of September 30, 2024, we held $21.7 million of current liabilities, $13.6 million of which was accrued expenses and other current liabilities.

As of September 30, 2024, we held $216.2 million of long-term liabilities with $203.0 million of total long-term debt, net of debt issuance costs, which are comprised of the Series 2022 Bonds, two separate credit facilities brokered through Live Oak Bank, two separate credit facilities with Rocky Mountain Bank, now known as Citywide Banks and various short term vehicle loans through First Interstate Bank.

Series 2022 Bonds

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In addition, the acceleration of our debt obligations may in some instances (as set forth in our Amended and Restated Charter) result in an increase in the dividend rate of the Series A Preferred Stock by 2.00% per annum from the dividend rate otherwise in effect at such time.

The Company is not in compliance with the DSCR covenant as of June 30, 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.

The Company is in compliance with the $8.0 million minimum liquidity requirement as of June 30, 2024.

However, management anticipates that the Company 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 and 2025.

The Company is not in compliance with the DSCR covenant as of September 30, 2024 and management anticipates the Company may 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 the unknown intensity of the 2025 wildfire season.

The Company is in compliance with the $8.0 million minimum liquidity requirement as of September 30, 2024.

It is possible that the Company 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 2025.

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 non-compliance and management diligently prosecutes the remediation plan to completion.

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

However, this plan is in progress and there is no assurance that management will be able 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.

While management has made significant progress, this plan is in process 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 possible future 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.

Live Oak Bank Loans

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

The Company is in compliance with such financial covenants as of June 30, 2024.

Rocky Mountain Bank Loans

Through certain of our subsidiaries, we entered into two credit facilities with Rocky Mountain Bank to finance in part (i) the construction of airplane hangars on September 30, 2019 and (ii) the purchase of four Quest Kodiak aircraft on February 3, 2020.

The Company is in compliance with such financial covenants as of September 30, 2024.

Citywide Banks Loans

Through certain of our subsidiaries, we entered into two credit facilities with Citywide Banks (formerly known as Rocky Mountain Bank) to finance in part (i) the construction of airplane hangars on September 30, 2019 and (ii) the purchase of four Quest Kodiak aircraft on February 3, 2020.

In connection with such credit facilities, we also entered into various term loan and other long-term debt agreements which contain certain financial covenants, including, that we maintain (i) a debt service coverage ratio that exceeds 1.25x (generally calculated as the ratio of the net operating income over the debt service payments made or as the ratio of adjusted EBITDA over the aggregate amount of interest and principal payments, in each case, as determined in the applicable agreement) and (ii) certain senior leverage ratios that do not exceed 7.00x through the third quarter of 2024, 6.00x through the third quarter of 2025, or 5.00x thereafter (generally calculated as the ratio of the senior funded debt over EBITDA, as determined in the applicable agreement).

The Company is in compliance with such financial covenants as of June 30, 2024.

The Company is in compliance with such financial covenants as of September 30, 2024.

Mezzanine and Permanent Equity

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Following the Closing, the Series A Preferred Stock will continue to accrue interest daily at 7% per annum for the first six years, 9% per annum for the seventh year, and 11% per annum thereafter.

Accrued interest for the Series A Preferred Stock was $34.6 million as of June 30, 2024.

As of June 30, 2024, it was probable that the Series A Preferred Stock may become redeemable at the holder’s option on or after March 29, 2027.

Accrued interest for the Series A Preferred Stock was $41.0 million as of September 30, 2024.

As of September 30, 2024, it was probable that the Series A Preferred Stock may become redeemable at the holder’s option on or after March 29, 2027.

We have elected to recognize changes in redemption value immediately, adjusting the preferred shares to the maximum redemption value at each reporting date.

As of June 30, 2024, Series A Preferred Stock had a carrying value and redemption value of $367.2 million.

As of June 30, 2024 and December 31, 2023, we had 53,157,874 and 44,776,926 shares of Common Stock issued and outstanding, respectively.

As of September 30, 2024, Series A Preferred Stock had a carrying value and redemption value of $373.7 million.

As of September 30, 2024 and December 31, 2023, we had 53,992,839 and 44,776,926 shares of Common Stock issued and outstanding, respectively.

Historical Cash Flows

Our consolidated cash flows from operating, investing and financing activities for the six months ended June 30, 2024 and 2023 were as follows:

$s in thousands Six Months Ended

June 30, 2024 Six Months Ended

June 30, 2023

Net cash used in operating activities $ (22,558) $ (53,445)

Our consolidated cash flows from operating, investing and financing activities for the nine months ended September 30, 2024 and 2023 were as follows:

$s in thousands Nine Months Ended

September 30, 2024 Nine Months Ended

September 30, 2023

Net cash provided by (used in) operating activities $ 166 $ (41,491)

Net cash provided by investing activities 80 35,852

Net cash provided by (used in) financing activities 5,407 (5,105)

Effects of exchange rate changes — (44)

Net change in cash and cash equivalents $ 5,653 $ (10,788)

Operating Activities

Net cash used in operating activities was $22.6 million for the six months ended June 30, 2024, compared to Net cash used in operating activities of $53.4 million for the six months ended June 30, 2023.

Net cash used in operating activities reflects Net loss of $30.1 million for the six months ended June 30, 2024 compared to Net loss of $63.7 million for the six months ended June 30, 2023.

Net cash used in operating activities for the six months ended June 30, 2024 reflects add-backs to Net loss for non-cash charges totaling $11.0 million, primarily attributable to stock-based compensation expense of $10.4 million and depreciation and amortization of $3.3 million, partially offset by the change in fair value of the Warrants of $2.1 million and the change in fair value of embedded derivative of $0.9 million.

Net cash used in operating activities for the six months ended June 30, 2023 reflects add-backs to Net loss for non-cash charges totaling $37.4 million, primarily attributable to stock-based compensation expense of $32.0 million and partially attributable to depreciation and amortization expense of $5.0 million.

Net cash provided by (used in) operating activities was $0.2 million for the nine months ended September 30, 2024, compared to Net cash used in operating activities of $41.5 million for the nine months ended September 30, 2023.

Net cash used in operating activities reflects Net loss of $2.7 million for the nine months ended September 30, 2024 compared to Net loss of $46.2 million for the nine months ended September 30, 2023.

Net cash used in operating activities for the nine months ended September 30, 2024 reflects add-backs to Net loss for non-cash charges totaling $24.5 million, primarily attributable to depreciation and amortization expense of $14.8 million, stock-based compensation expense of $13.7 million, and partially offset by the change in fair value of the Warrants of $4.0 million.

Net cash used in operating activities for the nine months ended September 30, 2023 reflects add-backs to Net loss for non-cash charges totaling $52.0 million, primarily attributable to stock-based compensation expense of $38.7 million and partially attributable to depreciation and amortization expense of $10.2 million.

Investing Activities

Net cash used in investing activities was $1.4 million for the six months ended June 30, 2024, compared to Net cash provided by investing activities of $28.6 million for the six months ended June 30, 2023.

Net cash used in investing activities for the six months ended June 30, 2024 reflects purchases of property, plant and equipment of $1.9 million, which primarily comprised of purchases aircraft improvements, and expenditures for capitalized software of $0.8 million, partially offset by cash acquired through the FMS acquisition of $2.6 million and proceeds from maturities of marketable securities of $1.1 million.

Net cash provided by investing activities for the six months ended June 30, 2023 reflects proceeds from sales and maturities of marketable securities of $42.7 million partially offset by purchases of property, plant and equipment of $12.5 million, which is primarily comprised of aircraft improvements, and the construction in progress of the third hangar of $2.4 million.

Net cash provided by investing activities was $0.1 million for the nine months ended September 30, 2024, compared to Net cash provided by investing activities of $35.9 million for the nine months ended September 30, 2023.

Net cash used in investing activities for the nine months ended September 30, 2024 reflects purchases of property, plant and equipment of $3.1 million, which primarily comprised of purchases aircraft improvements, and expenditures for capitalized software of $1.0 million, partially offset by cash acquired through the FMS Acquisition of $2.6 million and proceeds from maturities of marketable securities of $1.1 million.

Net cash provided by investing activities for the nine months ended September 30, 2023 reflects proceeds from sales and maturities of marketable securities of $53.1 million partially offset by purchases of property, plant and equipment of $18.1 million, which is primarily comprised of aircraft improvements.

Financing Activities

Net cash provided by financing activities was $6.7 million for the six months ended June 30, 2024, compared to Net cash used in financing activities of $4.5 million for the six months ended June 30, 2023.

Net cash provided by financing activities for the six months ended June 30, 2024 primarily reflects proceeds from issuance of Common Stock in the Registered Direct Offering of $9.2 million, partially offset by repayments on debt of $1.5 million and payment of issuance costs for Common Stock in offerings of $0.7 million.

Net cash used in financing activities for the six months ended June 30, 2023 primarily reflects costs incurred related to the Closing of $6.8 million and repayments of debt of $0.9 million, partially offset by proceeds from the Closing of $3.2 million.

Net cash provided by financing activities was $5.4 million for the nine months ended September 30, 2024, compared to Net cash used in financing activities of $5.1 million for the nine months ended September 30, 2023.

Net cash provided by financing activities for the nine months ended September 30, 2024 primarily reflects proceeds from issuance of Common Stock in the Registered Direct Offering of $9.2 million, partially offset by repayments on debt of $2.2 million and payment of issuance costs for Common Stock in offerings of $1.0 million.

Net cash used in financing activities for the nine months ended September 30, 2023 primarily reflects costs incurred related to the Closing of $6.8 million and repayments of debt of $1.5 million, partially offset by proceeds from the Closing of $3.2 million.

Contractual Obligations

Our principal commitments consist of obligations for outstanding leases and debt.

The following table summarizes our contractual obligations as of June 30, 2024:

The following table summarizes our contractual obligations as of September 30, 2024:

Payments Due by Period

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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.

As of June 30, 2024 and December 31, 2023, we did not have any other relationships with special purpose or variable interest entities which have been established for the purpose of facilitating off-balance sheet arrangement, which have not been consolidated in the consolidated financial statements of the Company.

As of September 30, 2024 and December 31, 2023, we did not have any other relationships with special purpose or variable interest entities which have been established for the purpose of facilitating off-balance sheet arrangement, which have not been consolidated in the consolidated financial statements of the Company.

Refer to “Note 2 – Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional information.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Bridger is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information otherwise required under this item.

Bridger is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and is not required to provide the information otherwise required under this item.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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The Omnibus Plan expires on January 23, 2033 and authorizes 15,099,137 shares of Common Stock for grant life of the Omnibus Plan.

As of June 30, 2024, 8,942,234 shares of Common Stock remain available under the Omnibus Plan.

As of June 30, 2024, the Company has granted participants RSUs and bonuses paid in Common Stock under the Omnibus Plan.

As of September 30, 2024, 8,358,442 shares of Common Stock remain available under the Omnibus Plan.

As of September 30, 2024, the Company has granted participants RSUs and bonuses paid in Common Stock under the Omnibus Plan.

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

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As of the October 1, 2023 annual goodwill impairment test, the Company’s qualitative analysis indicated the fair value of the Company’s reporting unit exceeded its carrying value.

No goodwill impairment charges were recorded for the three and six months ended June 30, 2024 or 2023.

No goodwill impairment charges were recorded for the three and nine months ended September 30, 2024 or 2023.

Long-Lived Assets

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Cost Method Investments

We hold equity securities without a readily determinable fair value, which are only adjusted for observable price changes in orderly transactions for the same or similar equity securities or any impairment, totaling $5.0 million as of June 30, 2024 and December 31, 2023.

Variable Interest Entities

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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.

For the three and six months ended June 30, 2024 and 2023, Northern Fire Management Services, LLC, a VIE of which the Company was identified as the primary beneficiary, is consolidated into our financial statements.

For the three and nine months ended September 30, 2024 and 2023, Northern Fire Management Services, LLC, a VIE of which the Company was identified as the primary beneficiary, is consolidated into our financial statements.

Refer to “ Note 2 – Summary of Significant Accounting Policies ” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional information.

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The extended transition period exemptions afforded by our emerging growth company status may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of this exemption because of the potential differences in accounting standards used.

Refer to “ Note 2 – Summary of Significant Accounting Policies ” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for the recent accounting pronouncements adopted and the recent accounting pronouncements not yet adopted for the three and six months ended June 30, 2024 and the year ended December 31, 2023.

We will remain an “emerging growth company” under the JOBS Act until the earliest of (a) December 31, 2028, (b) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 billion, (c) the last date of our fiscal year in which we are deemed to be a “large accelerated filer” under the rules of the Securities and Exchange Commission with at least $700.0 million of outstanding securities held by non-affiliates or (d) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years.

Refer to “ Note 2 – Summary of Significant Accounting Policies ” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for the recent accounting pronouncements adopted and the recent accounting pronouncements not yet adopted for the three and nine months ended September 30, 2024 and the year ended December 31, 2023.

Securities and Exchange Commission with at least $700.0 million of outstanding securities held by non-affiliates or (d) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years.

We will be a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.

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(4) the magnitude, timing, and benefits from any cost reduction actions;

(5) Bridger’s exploration of, need for, or completion of any future financings, and (6) anticipated investments in additional aircraft, capital resources, and research and development and the effect of these investments.

(5) Bridger’s exploration of, need for, or completion of any future financings;

(6) Bridger’s ability to continue as a going concern, as well as potential sources of liquidity and capital resources;

(7) Bridger’s remediation plan for its material weaknesses in Bridger’s internal control over financial reporting and (8) anticipated investments in additional aircraft, capital resources, and research and development and the effect of these investments.

These statements are based on various assumptions and estimates, whether or not identified in this Quarterly Report, and on the current expectations of Bridger’s management and are not predictions of actual performance.

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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 2. Management’s Discussion and Analysis