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Item 7. Management’s Discussion and Analysis

2025-03-14 compared with 2024-03-20 · 173 added, 230 removed, 306 unchanged (57% of the section changed)

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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 and Overhaul (“MRO”) :

Consists of maintenance and repair services for return-to-service upgrades of certain Canadair CL-215T Amphibious (“Spanish Scoopers”) aircraft as well as airframe modification and integration solutions for governmental 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.

However, we do not expect that our existing cash and cash equivalents provided by equity and debt financing 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 Annual Report on Form 10-K.

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

We expect that our existing cash and cash equivalents as well as cash generated from our operations 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 Annual Report on Form 10-K.

Refer to the Liquidity and Capital Resources section below and “ Note 1 – Organization and Basis of Presentation ” of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional details on management’s assessment of the Company’s ability to continue as a going concern.

The Reverse Recapitalization

On January 24, 2023 we consummated the Reverse Recapitalization.

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.

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, 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.

Total direct and incremental transaction costs of Bridger, JCIC and Legacy Bridger paid at the closing of the Reverse Recapitalization on January 24, 2023 (the “Closing”) were approximately $16.6 million and have been treated as a reduction of the cash proceeds and deducted from our additional paid-in capital.

Public Company Costs

We have become the successor to an SEC-registered and Nasdaq-listed company, which has required, and in the future may require, us to hire additional staff and implement procedures and processes to address public company regulatory requirements and customary practices.

We have incurred and expect to incur additional annual expenses for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting, legal and administrative resources and fees.

KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS

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As such, our financial condition and results of operations are significantly affected by the weather, as well as environmental and other factors affecting climate change, which impact the number and severity of fires in any given period.

The intensity and duration of the North American fire season is affected by multiple factors, some of which, according to a 2016 article by Climate Central, a nonprofit climate science news organization, are weather patterns including warmer springs and longer summers, lower levels of mountaintop snowpack which lead to drier soils and vegetation and frequency of lightning strikes.

The intensity and duration of the North American fire season is affected by multiple factors, some of which, according to a 2023 article by Climate Central, a nonprofit climate science news organization, are weather patterns including warmer springs and longer summers, decreasing relative humidity which lead to drier soils and vegetation and frequency of lightning strikes.

Based on the climate change indicators published by the Environmental Protection Agency (“EPA”), these factors have shown year over year increases linked to the effects of climate change and the overall trend in increased temperatures.

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Larger wildfires and longer seasons are expected to continue as droughts increase in frequency and duration, according to a 2024 article by the EPA.

However, revenue was lower than the Company initially anticipated for 2023 due to a less intense wildfire season.

Per the 2024 National Centers for Environmental Information annual report, approximately 8.8 million acres of U.S.

land burned in 2023, 62.4% lower than the 2001-2020 annual average and the total number of wildfires during 2023 was 19.1% lower than the 2001-2020 annual average.

Additionally, according to data from the National Interagency Coordination Center, the national wildland fire preparedness level last reached Level 5 in 2021, while reaching only Level 4 in both 2023 and 2022.

This decrease in the U.S.

national level of wildland fire preparedness in 2022 was partially attributed to the Western United States, which experienced one of the slowest wildfire seasons in recent years due to increased and timely precipitation and cooler temperatures.

land burned in 2024, 25.7% above the 2001-2020 annual average and the total number of wildfires during 2024 was approximately 90.0% of the 2001-2020 annual average with approximately 61,000 wildfires reported.

Additionally, according to data from the National Interagency Coordination Center, the national wildland fire preparedness level reached Level 5 in 2024 and Level 4 in 2023.

Limited Supply of Specialized Aircraft and Replacement and Maintenance Parts

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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, MRO 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.

MRO includes revenue from return-to-service and maintenance and 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.

The recognition of revenues for our services are primarily split into flight, standby and other revenues.

Flight revenue is primarily earned at an hourly rate when the engines of the aircraft are cycled, upon request of the customer.

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 and repair on externally owned aircraft.

Cost of Revenues

Cost of revenues includes costs incurred directly related to flight operations including expenses associated with operating the aircraft on revenue generating contracts.

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.

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

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 and travel unique to each airframe.

Selling, General and Administrative Expense

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Interest Expense

Interest expense consists of interest costs related to our Gallatin municipal bond issuances by Legacy Bridger that closed in July and August 2022 (the “Series 2022 Bonds”), our permanent and term loan agreements, the Series C preferred shares of Legacy Bridger (the “Legacy Bridger Series C Preferred Shares”), the Series B preferred shares of Legacy Bridger (the “Legacy Bridger Series B Preferred Shares”), which were fully redeemed prior to Closing, the change in fair value of the freestanding derivative, and the net effect of our interest rate swap.

Interest expense also includes amortization of debt issuance costs associated with our loan agreements.

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Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023

The following table sets forth our Consolidated Statements of Operations information for the years ended December 31, 2023 and 2022 and should be reviewed in conjunction with the financial statements and notes included elsewhere in this Annual Report on Form 10-K.

$s in thousands Year Ended December 31, 2023 Year Ended December 31, 2022 Period Over

Change ($) Period Over

The following table sets forth our Consolidated Statements of Operations information for the years ended December 31, 2024 and 2023.

For the years ended December 31,

$s in thousands 2024 2023 Period Over Period Change ($) Period Over Period Change (%)

Revenues $ 98,613 $ 66,708 $ 31,905 48%

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Selling, general and administrative expense 35,820 82,863 (47,043) (57%)

Operating loss (57,495) (22,626) (34,869) 154%

Operating income (loss) 5,318 (57,495) 62,813 (109)%

Interest expense (23,714) (23,218) (496) 2%

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Loss before income taxes (16,329) (77,660) 61,331 (79)%

Income tax benefit 302 — 302 n/a

Income tax benefit 762 302 460 152%

Net loss $ (15,567) $ (77,358) $ 61,791 (80%)

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Revenues by service offering for the years ended December 31, 2024 and 2023 were as follows:

$s in thousands Year Ended December 31, 2023 Year Ended December 31, 2022 Period Over

Change ($) Period Over

For the years ended December 31,

$s in thousands 2024 2023 Period Over Period Change ($) Period Over Period Change (%)

Fire suppression $ 66,765 $ 56,022 $ 10,743 19%

Aerial surveillance 13,062 9,730 3,332 34%

MRO 13,918 48 13,870 28,896%

Other services 4,868 908 3,960 436%

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Fire suppression revenue increased by $10.7 million, or 19%, to $66.8 million for the year ended December 31, 2024, from $56.0 million for the year ended December 31, 2023.

The increase was primarily driven by a higher number of aircraft operating for the full 2023 wildfire season compared to the 2022 wildfire season.

The increase was partially driven by increased flight hours for our Super Scoopers in the year ended December 31, 2024 compared to the year ended December 31, 2023 resulting from a more intense U.S.

wildfire season.

The increase was also partially due to an earlier start to the 2024 wildfire season in March and April of 2024 for our Super Scoopers for the year ended December 31, 2024 compared to the year ended December 31, 2023.

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

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

The increase in fire suppression revenue accounted for 34% of the total increase in revenues for the year ended December 31, 2024.

Aerial surveillance revenue increased by $3.3 million, or 34%, to $13.1 million for the year ended December 31, 2024, from $9.7 million for the year ended December 31, 2023.

The increase was primarily driven by the type of aircraft operating during 2023 compared to 2022.

The increase was primarily driven by the higher rate of the Pilatus PC-12 (“Pilatus”) aircraft operating for the year ended December 31, 2024 compared to the Twin Commander aircraft operating for the year ended December 31, 2023.

The increase was also partially due to an earlier deployment of our surveillance aircraft in the year ended December 31, 2024 compared to the year ended December 31, 2023.

The increase in aerial surveillance revenue accounted for 10% of the total increase in revenues for the year ended December 31, 2024.

MRO revenue was $13.9 million for the year ended December 31, 2024, compared to $48,000 for the year ended December 31, 2023.

This amount is primarily due to the return-to-service work performed on the Spanish Scoopers in connection with the MAB Funding, LLC (“MAB”) services agreement and MRO work performed by Flight Test & Mechanical Solutions, Inc.

(“FMS”) which was acquired in June 2024.

Refer to “Note 2 – Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional details.

The increase in MRO revenue accounted for 43% of the total increase in revenues for the year ended December 31, 2024.

Other services revenue increased by $4.0 million, or 436%, to $4.9 million for the year ended December 31, 2024, from $0.9 million for the year ended December 31, 2023.

The increase was primarily due to labor, maintenance and improvements to an aircraft under the ownership of a related party and additional contractually specified items.

Refer to “Note 19 – Related Party Transactions” of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional details.

Revenues by type for the years ended December 31, 2023 and 2022 were as follows:

$s in thousands Year Ended December 31, 2023 Year Ended December 31, 2022 Period Over

Change ($) Period Over

Flight revenue $ 34,171 $ 25,105 $ 9,066 36%

Standby revenue 30,650 20,772 9,878 48%

Other revenue 1,887 511 1,376 269%

Total revenues $ 66,708 $ 46,388 $ 20,320 44%

Flight revenue increased by $9.1 million, or 36%, to $34.2 million for the year ended December 31, 2023, from $25.1 million for the year ended December 31, 2022.

The increase was primarily driven by a higher number of Super Scooper aircraft flying on deployment for the full 2023 wildfire season compared to the 2022 wildfire season.

Standby revenue increased by $9.9 million, or 48%, to $30.7 million for the year ended December 31, 2023, from $20.8 million for the year ended December 31, 2022.

The increase was primarily driven by a higher number of Super Scooper aircraft available for deployment for the full 2023 wildfire season compared to the 2022 wildfire season.

Other revenue increased by $1.4 million, or 269%, to $1.9 million for the year ended December 31, 2023, from $0.5 million for the year ended December 31, 2022.

The increase was primarily due to labor, maintenance and improvements to an aircraft under the ownership of a related party and additional contractually specified items.

Refer to “Note 19 – Related Party Transactions” of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional details.

The increase was primarily due to third-party training and flight operations services utilizing our aircraft for the year ended December 31, 2024 that did not occur for the year ended December 31, 2023.

The increase in other services revenue accounted for 12% of the total increase in revenues for the year ended December 31, 2024.

Revenues by geographic area for the years ended December 31, 2024 and 2023 were as follows:

$s in thousands Year Ended December 31, 2023 Year Ended December 31, 2022 Period Over

Change ($) Period Over

For the years ended December 31,

$s in thousands 2024 2023 Period Over Period Change ($) Period Over Period Change (%)

United States $ 88,527 $ 49,486 $ 39,041 79%

Canada 17,174 — 17,174 n/a

Spain 10,086 48 10,038 20,913%

Canada — 17,174 (17,174) (100%)

Total revenues $ 98,613 $ 66,708 $ 31,905 48%

United States revenue increased by $39.0 million, or 79%, to $88.5 million for the year ended December 31, 2024, from $49.5 million for the year ended December 31, 2023.

The increase was primarily driven by a higher number of aircraft operating during 2023 compared to 2022.

The increase in Unites States revenue accounted for 15% of the total increase in revenues for the year ended December 31, 2023.

Canada revenue was $17.2 million for the year ended December 31, 2023 compared to zero for the year ended December 31, 2022.

The increase was primarily driven by the result of our first expansion of aerial firefighting operations into Canada in 2023.

The increase was primarily driven by increased flight hours due to an earlier start to the 2024 wildfire season and a more intense wild fire season for the year ended December 31, 2024 compared to the year ended December 31, 2023.

Spain revenue was $10.1 million for the year ended December 31, 2024, compared to $48,000 for the year ended December 31, 2023.

This amount is due to 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 Consolidated Financial Statements included in this Annual Report on Form 10-K for additional details.

Canada revenue was zero for the year ended December 31, 2024 compared to 17.2 million for the year ended December 31, 2023.

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

Cost of Revenues

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Flight operations costs increased by $6.6 million, or 27%, to $31.0 million for the year ended December 31, 2024, from $24.4 million for the year ended December 31, 2023.

The increase was primarily attributable to an increase in employee labor expenses of $5.0 million and an increase in depreciation expense of $1.5 million, partially offset by a decrease in fuel expense of $0.8 million in 2023 compared to 2022.

The increase in employee labor and depreciation was primarily due to an increase in flight hours associated with two additional Super Scooper aircraft placed into service in September 2022 and February 2023, respectively.

2023 employee labor expenses also include higher non-cash stock-based compensation from increased employee equity grants.

The decrease in fuel expense is primarily attributable to a decrease in aerial surveillance, training and resource flight hours in 2023 compared to 2022.

The increase was primarily attributable to an increase in depreciation expense of $3.4 million, an increase in employee labor expenses of $1.6 million, an increase in training expenses of $0.8 million and an increase in aircraft lease expense of $0.8 million due to two Pilatus operating leases commencing in July 2023 and a Twin Otter operating lease commencing in April 2023, in each case for the year ended December 31, 2024 compared to the year ended December 31, 2023.

Maintenance costs increased by $9.5 million, or 56%, to $26.5 million for the year ended December 31, 2024, from $16.9 million for the year ended December 31, 2023.

The increase was primarily attributable to an increase in employee labor expenses of $1.4 million and an increase in other maintenance costs of $0.5 million, primarily attributable to two additional Super Scooper aircraft placed into service in September 2022 and February 2023, respectively.

The increase was primarily driven by an increase in aircraft maintenance and modification expense of $5.2 million, an increase in employee labor expenses of approximately $2.9 million and increase in depreciation expense of $1.4 million, in each case for the year ended December 31, 2024 compared to the year ended December 31, 2023.

Selling, General and Administrative Expense

Selling, general and administrative expense increased by $47.7 million, or 136%, to $82.9 million for the year ended December 31, 2023, from $35.1 million for the year ended December 31, 2022.

The increase was primarily attributable to $45.7 million of non-cash stock-based compensation for RSUs issued to management and employees in 2023.

The remaining increase was primarily attributable to a $10.7 million increase in business development, insurance, professional services and other expenses associated with operating as a publicly-traded company in 2023 and impairment charges of $2.4 million associated with three of our Twin Commander aircraft and our two Aurora eVTOL Skiron drone aircraft due to our plan to phase out our use of these specific platforms in our aerial surveillance operations.

The increase was partially offset by $10.1 million of transaction related bonuses for employees recorded in the third quarter of 2022 in connection with the issuance of the Bridger Series C Preferred Shares, issuance of the Series 2022 Bonds, execution of the Transaction Agreements and initial filing of the proxy statement/prospectus.

Selling, general and administrative expense decreased by $47.0 million, or 57%, to $35.8 million for the year ended December 31, 2024, from $82.9 million for the year ended December 31, 2023.

The decrease was primarily attributable to the decrease in stock-based compensation of $32.1 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 was partially attributable to a decrease of $5.7 million in business development, insurance, professional services and other expenses associated with becoming a public company in 2023, a decrease in the market value of the Warrants of $4.3 million, impairment charges of $2.4 million associated with three of our Twin Commander aircraft and our two Aurora eVTOL Skiron drone aircraft due to our plan to phase out our use of these specific platforms in our aerial surveillance operations for the year ended 2023, a decrease in employee labor expenses of approximately $0.9 million, and an increase in capitalized software development costs of $0.8 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.

Interest Expense

Interest expense increased by $0.5 million, or 2%, to $23.7 million for the year ended December 31, 2024, from $23.2 million for the year ended December 31, 2023.

The increase was primarily driven by a full year, or $18.4 million, of interest expense on the Series 2022 Bonds issued in July 2022, partially offset by lower interest expense on the Legacy Bridger Series A-1 and Series A-2 Preferred Shares and Legacy Bridger Series B Preferred Shares which were fully redeemed in August 2022 and April 2022, respectively.

Other income increased by $2.5 million, or 486%, to $3.1 million for the year ended December 31, 2023, from $0.5 million for the year ended December 31, 2022.

The increase was primarily attributable to a $1.3 million increase in interest income, a $0.7 million decrease in losses on extinguishment of debt and a $0.5 million increase in gains on sales of marketable securities in 2023 compared to 2022.

The increase was primarily driven by a lower capitalized interest associated with the financing of the construction of fixed assets for the year ended December 31, 2024 compared to the year ended December 31, 2023.

Other income decreased by $1.0 million, or 32%, to $2.1 million for the year ended December 31, 2024, from $3.1 million for the year ended December 31, 2023.

The decrease was primarily attributable to non-recurring interest income earned in 2023, prior to the sale of certain investments by December 31, 2023.

Income Tax Benefit

Income tax benefit increased to $0.3 million for the year ended December 31, 2023, from zero for the year ended December 31, 2022.

The increase was attributable to a discrete benefit generated from the Ignis acquisition during 2023.

Income tax benefit increased by $0.5 million, or 152%, to $0.8 million for the year ended December 31, 2024, from $0.3 million for the year ended December 31, 2023.

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

NON-GAAP FINANCIAL MEASURES

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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 do 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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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 stock-based compensation, business development and integration expenses, offering costs, loss on disposal of fixed assets and non-cash impairment charges, non-cash adjustments to the fair value of earnout consideration, non-cash adjustments to the fair value of Warrants issued in connection with the Reverse Recapitalization, loss on extinguishment of debt, and discretionary bonuses to employees and executives.

During the periods presented, we exclude from Adjusted EBITDA certain costs that are required to be expensed in accordance with GAAP, including 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 years ended December 31, 2024 and 2023 is as follows:

($s in thousands) Year Ended December 31, 2023 Year Ended December 31, 2022 Period Over

Change ($) Period Over

For the years ended December 31,

($s in thousands) 2024 2023 Period Over Period Change ($) Period Over Period Change (%)

Net loss $ (15,567) $ (77,358) $ 61,791 (80%)

Income tax benefit (302) — (302) n/a

Income tax benefit (762) (302) (460) 152%

Depreciation and amortization 17,451 11,089 6,362 57%

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1,140 5,687 (4,547) (80%)

Change in fair value of earnout consideration 3

(393) 167 (560) (335%)

Change in fair value of Warrants 4

(4,530) (267) (4,263) 1,597%

Offering costs 5

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— 2,869 (2,869) (100%)

Change in fair value of earnout consideration 5

167 — 167 n/a

Change in fair value of Warrants 6

(266) — (266) n/a

Loss on extinguishment of debt 7

— 845 (845) n/a

Discretionary bonuses to employees and executives 8

— 10,137 (10,137) n/a

Adjusted EBITDA $ 37,336 $ 18,672 $ 18,664 100%

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Adjusted EBITDA margin 7

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

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

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

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.

(“Ignis”) and FMS.

4 Represents the non-cash fair value adjustment for Warrants issued in connection with 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 non-cash impairment charges on aircraft with projected cash flow losses.

5 Represents the fair value adjustment for earnout consideration issued in connection with the Ignis Acquisition.

6 Represents the fair value adjustment for Warrants issued in connection with the Reverse Recapitalization.

7 Represents loss on extinguishment of debt related to the Series 2021 Bond.

8 Represents one-time discretionary bonuses to certain employees and executives of Bridger in connection with the issuance of the Legacy Bridger Series C Preferred Shares, the issuance of the Series 2022 Bonds, execution of the Reverse Recapitalization transaction agreements and the initial filing of the proxy/statement/prospectus prepared in connection with the Reverse Recapitalization.

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

LIQUIDITY AND CAPITAL RESOURCES

Going Concern

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

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

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

For the year ended December 31, 2024, the Company had an operating income of $5.3 million, net loss of $15.6 million and cash flow provided by operating activities of $9.4 million.

In addition, as of December 31, 2024, the Company had unrestricted cash and investments of $39.3 million.

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

Additionally, based on projected cash use, management anticipates that without additional cash funding the Company will not have sufficient cash on hand to fund operations within the next 12 months, until the Company begins to collect cash from its seasonal firefighting operations in 2024.

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 issuing additional shares of common stock pursuant to our shelf registration statement.

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

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

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

In the prior reporting period, the Company identified certain conditions that raised substantial doubt about its ability to continue as a going concern.

These conditions included noncompliance with certain financial covenants, including maintaining minimum liquidity requirements and uncertainty regarding the Company’s ability to diligently prosecute a cost reduction plan.

However, in the subsequent period, the Company is in compliance with all financial covenants and successfully improved cash flow.

As a result, management has concluded that substantial doubt no longer exists.

As of March 10, 2025, $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 19 – Stockholders' Deficit ” of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

Cash and Marketable Securities

As of December 31, 2024, our principal sources of liquidity were cash and cash equivalents of $39.3 million which were held for working capital purposes and restricted cash of $13.7 million.

The restricted cash was procured through a county bond and is accessed for financing capital projects.

As of December 31, 2023, the Company had $1.0 million of investments in debt securities classified as available-for-sale with short-term maturities of less than one year and carried at fair value.

The Company’s available-for-sale securities investment portfolio is primarily invested in highly rated securities, with the primary objective of minimizing the potential risk of principal loss.

In connection with the Reverse Recapitalization, stockholders owning 34,245,643 JCIC Class A ordinary shares exercised their rights to have those shares redeemed for cash at a redemption price of approximately $10.16 per share, or an aggregate of $347.8 million.

Following the payment of redemptions and expenses related to the Trust Account, there was approximately $2.4 million in remaining cash in the Trust Account, which was paid to UBS Securities LLC as a portion of its deferred underwriting fee from the JCIC’s initial public offering.

As a result, we did not receive any cash proceeds from the Reverse Recapitalization.

Total direct and incremental transaction costs of Bridger, JCIC and Legacy Bridger paid at Closing were approximately $16.6 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 December 31, 2024, the Company had zero 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.

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

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 was $39.3 million, with $14.8 million payable in unregistered shares of Common Stock, and the remainder of $24.5 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 the 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 $0.5 million for all fees incurred in connection with the proposed transaction.

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 the Company’s wholly-owned subsidiary, Bridger Aerospace Europe, S.L.U.

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

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

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

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

Our management team estimates that the cost to renovate and upgrade these Spanish Scoopers will be approximately $8 million to $12 million per aircraft.

Assuming timely completion of such renovations and upgrades, we expect these modified Spanish Scoopers to generate revenue and Adjusted EBITDA in-line with Bridger’s current fleet of Super Scoopers once contracting mechanics are negotiated with various foreign governments during their respective return-to-service timeframes.

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 December 31, 2023, we held $25.4 million of current liabilities, $17.2 million of which was accrued expenses and other current liabilities.

As of December 31, 2023, we held $221.1 million of long-term liabilities with $204.6 million of total long-term debt, net of debt issuance costs, 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.

We believe our cash on hand, and cash expected to be generated from operating activities will be sufficient to fund our operations for the next twelve months.

As described in “Item 1A.

Risk Factors” included in this Annual Report on Form 10-K, our quarterly and annual operating results have fluctuated in the past and may vary in the future due to a variety of factors, many of which are external to our control.

If the conditions in our industry deteriorate (such as due to the seasonality of our business), or if we are unable to sufficiently increase our revenues or further reduce our expenses, we may experience, in the future, a significant negative impact to our financial results and cash flows from operations.

In such a situation, we could need to seek liquidity from sources other than our operations.

Series 2022 Bonds

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Bank Trust Company, National Association, Salt Lake City, Utah.

Mandatory and Extraordinary Redemptions —Subject to the terms of the Indenture, the Series 2022 Bonds must be redeemed, including, among other things, (i) from all the proceeds of the sale of any Super Scooper, (ii) in an amount equal to (a) 50% of our operating revenues less the portion used to pay or establish reserves for all our expenses, debt payments, capital improvements, replacements, and contingencies (“Excess Cash Flow”) or (b) 100% of Excess Cash Flow, in each case, in the event we fall below certain debt service coverage ratio requirements set forth in the Indenture, and (iii) upon a change of control (each a “Mandatory Redemption”).

Mandatory and Extraordinary Redemptions —Subject to the terms of the Indenture, the Series 2022 Bonds must be redeemed, including, among other things, (i) from all the proceeds of the sale of any Super Scooper, (ii) in an amount equal to (a) 50% of our operating revenues less the portion used to pay or establish reserves for all our expenses, debt payments, capital improvements, replacements, and contingencies (“Excess Cash Flow”) or (b) 100% of Excess Cash Flow, in each case, in the event we fall below certain debt service coverage ratio (“DSCR”) requirements set forth in the Indenture, and (iii) upon a change of control (each a “Mandatory Redemption”).

For each Mandatory Redemption, the Series 2022 Bonds will be redeemed in whole or in part, at a redemption price equal to 100% of the principal amount of each Series 2022 Bond redeemed plus any premium that would be applicable to an optional redemption of the Series 2022 Bonds on such date (and if such redemption occurs prior to September 1, 2025, the applicable premium shall be three percent (3%)) and accrued interest.

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Financial Covenants — In connection with the Series 2022 Bonds, we are a party to certain loan agreements that contain customary representation and warranties, negative covenants, including, limitations on indebtedness, reduction of liquidity below certain levels, and asset sales, merger and other transactions, and remedies on and events of default.

Under the terms of such loan agreements, we are subject to certain financial covenants, that require, among other things, that we operate in a manner and to the extent permitted by applicable law, to produce sufficient gross revenues so as to be at all relevant times in compliance with the terms of such covenants, including that we maintain (i) beginning with the fiscal quarter ending December 31, 2023, a minimum debt service coverage ratio (generally calculated as the aggregate amount of our total gross revenues, minus operating expenses, plus interest, depreciation and amortization expense, for any period, over our maximum annual debt service requirements, as determined under such loan agreement) that exceeds 1.25x and (ii) beginning with the fiscal quarter ending September 30, 2022, a minimum liquidity of not less than $8 million in the form of unrestricted cash and cash equivalents, plus liquid investments and unrestricted marketable securities at all times.

Under the terms of such loan agreements, we are subject to certain financial covenants, that require, among other things, that we operate in a manner and to the extent permitted by applicable law, to produce sufficient gross revenues so as to be at all relevant times in compliance with the terms of such covenants, including that we maintain (i) beginning with the fiscal quarter ended December 31, 2023, a minimum DSCR (generally calculated as the aggregate amount of our total gross revenues, minus operating expenses, plus interest, depreciation and amortization expense, for any period, over our maximum annual debt service requirements, as determined under such loan agreement) that exceeds 1.25x and (ii) beginning with the fiscal quarter ended September 30, 2022, a minimum liquidity of not less than $8 million in the form of unrestricted cash and cash equivalents, plus liquid investments and unrestricted marketable securities at all times.

Subject to the terms of the loan agreements, in the event we are unable to comply with the terms of the financial covenants, we may be required (among other potential remedial actions) to engage an independent consultant to review, analyze and make recommendations with respect to our operations or in some instances, this could result in an event of default and/or the acceleration of our debt obligations under the loan agreements.

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

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

The Company is in compliance with the DSCR covenant as of December 31, 2024 and management anticipates the Company will remain in compliance with the DSCR covenant at future quarterly measurement periods during the next 12 months.

The Company is in compliance with the $8.0 million minimum liquidity requirement as of December 31, 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 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.

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.

Our loans with Live Oak Bank 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 1.25x 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 December 31, 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.

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).

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 DSCR 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 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 December 31, 2024.

Mandatorily Redeemable Preferred Stock

Legacy Bridger Series B Preferred Shares

On April 25, 2022, we used a portion of the proceeds from the issuance of the Legacy Bridger Series C Preferred Shares to redeem all 60,000,000 of our outstanding Legacy Bridger Series B Preferred Shares for $70.0 million, inclusive of $10.0 million in accrued interest.

Legacy Bridger Series A Preferred Shares

On April 25, 2022, we and our investors included a new mandatory redemption provision requiring Legacy Bridger Series A Preferred Shares to be redeemed on April 25, 2032.

Due to the mandatory redemption provision, Legacy Bridger Series A Preferred Shares were reclassified from mezzanine equity to liability.

We elected the fair value option to measure the modification of the Legacy Bridger Series A Preferred Shares.

On July 25, 2022, we used the proceeds from the Series 2022 Bonds plus cash on hand to redeem in full the remaining 6,055,556 shares of the Legacy Bridger Series A Preferred Shares for aggregate proceeds of $136.3 million.

The fair values of the Legacy Bridger Series A Preferred Shares increased by $3.9 million from interest accrued since the modification on April 25, 2022 and no gain or loss were recorded to net loss upon redemption.

Mezzanine and Permanent Equity

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

Upon the Closing and exchange of Legacy Bridger Series C Preferred Shares for Series A Preferred Stock, the 50% multiplier, applicable to redemptions of Legacy Bridger Series C Preferred Shares, valued at $157.9 million as of December 31, 2022, was removed and treated as a deemed dividend.

As of December 31, 2024, Series A Preferred Stock had a carrying value and redemption value of $380.2 million.

Legacy Bridger had 30,000,000 Legacy Bridger 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 Legacy Bridger’s equityholders.

These Legacy Bridger Class A common shares were issued to ElementCompany, LLC.

Legacy Bridger had 9,756,130 Legacy Bridger Class B common shares issued and outstanding as of December 31, 2022.

The holders of these Legacy Bridger Class B common shares were entitled to one vote for each share held of record on all matters submitted to a vote of Legacy Bridger’s equityholders.

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

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

These Legacy Bridger Class C common shares and Legacy Bridger Class D common shares were non-voting shares.

Prior to the Closing, Legacy Bridger’s voting power followed the structure of the elected board members with three (3) designees from the holders of Legacy Bridger Class A common shares and two (2) designees from the holders of Legacy Bridger Class B common shares.

This remained in place until the Closing.

Upon the Closing on January 24, 2023 and at December 31, 2023, we had 43,769,290 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 years ended December 31, 2024 and 2023 were as follows:

$s in thousands Year Ended December 31, 2023 Year Ended December 31, 2022

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

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

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

For the years ended December 31,

$s in thousands 2024 2023

Net cash provided by (used in) operating activities $ 9,355 $ (26,808)

Net cash provided by investing activities 2,056 27,158

Net cash provided by (used in) financing activities 4,673 (5,831)

Effects of exchange rate changes 62 (42)

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Operating Activities

Net cash used in operating activities was $26.8 million for the year ended December 31, 2023, compared to Net cash used in operating activities of $9.9 million for the year ended December 31, 2022.

Net cash used in operating activities reflects Net loss of $77.4 million for the year ended December 31, 2023 compared to $42.1 million for the year ended December 31, 2022.

Net cash provided by operating activities was $9.4 million for the year ended December 31, 2024, compared to Net cash used in operating activities of $26.8 million for the year ended December 31, 2023.

Net cash provided by operating activities reflects Net loss of $15.6 million for the year ended December 31, 2024 compared to Net loss of $77.4 million for the year ended December 31, 2023.

Net cash provided by operating activities for the year ended December 31, 2024 reflects add-backs to Net loss for non-cash charges totaling $28.0 million, primarily attributable to depreciation and amortization of $17.5 million, stock-based compensation expense of $16.2 million, and partially offset by the change in fair value of the Warrants of $4.5 million.

Net cash used in operating activities for the year ended December 31, 2023 reflects add-backs to Net loss for non-cash charges totaling $62.2 million, primarily attributable to stock-based compensation expense of $47.8 million and depreciation and amortization of $11.1 million.

Net cash used in operating activities for the year ended December 31, 2022 reflects add-backs to Net loss for non-cash charges totaling $20.9 million, primarily attributable to depreciation and amortization of $9.1 million, change in fair value of Legacy Bridger Series A Preferred Shares of $3.9 million and interest accrued on Legacy Bridger Series B Preferred Shares of $3.6 million.

Investing Activities

Net cash provided by investing activities was $27.2 million for the year ended December 31, 2023, compared to Net cash used in investing activities of $89.8 million for the year ended December 31, 2022.

Net cash provided by investing activities was $2.1 million for the year ended December 31, 2024, compared to Net cash provided by investing activities of $27.2 million for the year ended December 31, 2023.

Net cash provided by investing activities for the year ended December 31, 2024 reflects purchases of property, plant and equipment of $4.1 million, which is primarily comprised of purchases, aircraft improvements and expenditures for capitalized software of $1.2 million, partially offset by the collection of cash from note receivable of $3.0 million, 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 year ended December 31, 2023 primarily reflects proceeds from sales and maturities of marketable securities of $55.4 million, partially offset by purchases of property, plant and equipment of $20.7 million.

Net cash used in investing activities for the year ended December 31, 2022 primarily reflects purchases of marketable securities of $60.2 million and purchases of property, plant and equipment and investments in construction in progress of $35.4 million.

Financing Activities

Net cash used in financing activities was $5.8 million for the year ended December 31, 2023, compared to Net cash provided by financing activities of $124.9 million for the year ended December 31, 2022.

Net cash provided by financing activities was $4.7 million for the year ended December 31, 2024, compared to Net cash used in financing activities of $5.8 million for the year ended December 31, 2023.

Net cash provided by financing activities for the year ended December 31, 2024 primarily reflects gross proceeds from issuance of Common Stock in offerings of $9.3 million, partially offset by repayments on debt of $3.0 million and payment of issuance costs for Common Stock in offerings of $1.0 million.

Net cash used in financing activities for the year ended December 31, 2023 primarily reflects costs incurred related to the Closing of $6.8 million and repayments of debt of $2.2 million partially offset by proceeds from the Closing of $3.2 million.

Net cash provided by financing activities for the year ended December 31, 2022 primarily reflects borrowings from the Legacy Bridger Series C Preferred Shares and Series 2022 Bonds of $448.5 million, partially offset by payments to Legacy Bridger Series A and Series B Preferred Shares members of $306.2 million.

Contractual Obligations

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$ 218,926 $ 5,622 $ 213,304

On February 14, 2023, we made the final $9.1 million payment for the purchase of aircraft under our purchase agreement with Longview Aviation Services Inc.

and Viking Air Limited (the manufacturer of our Super Scooper aircraft and an affiliate of Longview Aviation Services Inc.), dated April 13, 2018.

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.

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Off-Balance Sheet Arrangements

On November 17, 2023, we 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.

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.

On November 17, 2023, we entered into a series of agreements designed to facilitate the purchase and return-to-service of the Spanish Scoopers originally awarded to the Company’s 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 its 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 the Company’s wholly-owned Spanish subsidiary, Albacete Aero, S.L., while they are owned and funded by MAB.

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

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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 December 31, 2023 and 2022, 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 December 31, 2024 and 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 arrangements, 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 Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.

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Revenue Recognition

We charge 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 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.

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

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

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

Contracts are based on either a CWN or EU basis.

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

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

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

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

No variable considerations are constrained within the contracts.

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

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

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

Other revenue consists of leasing revenues from the rental of BSI, LLC facilities to another related party as well as external repair work performed on customer aircraft by Bridger Aviation Repair, LLC.

Payment terms vary by customer and type of revenue contract.

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

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

As permitted under the practical expedient available under ASC 606, Revenue from Contracts with Customers , we do 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 we recognize revenue at the amount which we have the right to invoice for services performed.

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.

Contracts with our customers generally include a termination for convenience clause.

The majority of our contracts are started and completed within the same year.

We recognize revenue under Accounting Standards Codification 606, “Revenue from Contracts with Customers” (“ASC 606”), which utilizes a five-step model.

The definition of a contract for us is typically defined as a customer purchase order as this is when we achieve an enforceable right to payment.

The deliverables within a customer purchase order are analyzed to determine the number of performance obligations.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under ASC 606.

A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, control is transferred and the performance obligation is satisfied.

The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services are highly interrelated or meet the series guidance.

For contracts with multiple performance obligations, we allocate the contract transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract.

The primary method used to estimate the standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service.

For Aerial firefighting contracts, the Company primarily performs the following activities as part of a stand-ready obligation:

(i) providing our aircraft, pilot, and field maintenance personnel necessary to operate the aircraft (ii) performing the services required on the contract, whether it be fire suppression or aerial surveillance services.

The integrated firefighting services that we perform under each contract represent a single performance obligation satisfied over time, as a series of distinct time increments.

The amounts billed to the customer are determined based on varying rates applicable to the specific activities performed on a daily basis.

Such consideration is allocated to the distinct daily increment it relates to within the contract and therefore, recognized as we perform the daily firefighting services on the contract.

We utilize the output method to recognize revenue over time as this depicts the Company’s performance toward complete satisfaction of the performance obligation

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

For maintenance repair contracts, we manufacture products to customer specifications and the product cannot be easily modified to satisfy another customer’s order or we perform return-to-service work on customer aircraft.

As such, these products are deemed to have no alternative use once the manufacturing process begins.

In the event the customer invokes a termination for convenience clause, we would be entitled to costs incurred to date plus a reasonable profit.

Contract costs typically include labor, materials, overhead, and when applicable, subcontractor costs.

For most of our products, we are building assets with no alternative use and have enforceable right to payment, and thus, we recognize revenue using the over-time method.

For return-to-service contracts, the customer maintains control of the asset as we perform the services.

The majority of our performance obligations are satisfied over time as work progresses.

Typically, revenue is recognized over time using an input measure (i.e., costs incurred to date relative to total estimated costs at completion, also known as cost-to-cost plus reasonable profit) to determine progress.

Contract estimates are based on various assumptions to project the outcome of future events that can span multiple months or years.

These assumptions include labor productivity and availability;

the complexity of the work to be performed;

the cost and availability of materials;

and the performance of subcontractors.

As a significant change in one or more of these estimates could affect the progress completed (and related profitability) on our MRO contracts, we review and update our contract-related estimates on a regular basis.

We recognize such adjustments under the cumulative catch-up method.

Under this method, the impact of the adjustment is recognized in the period the adjustment is identified.

Revenue and profit in future periods of contract performance is recognized using the adjusted estimate.

The impact of adjustments in contract estimates on our operating earnings can be reflected in either operating costs and expenses or revenue.

Business Combinations

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Stock-Based Compensation

In January 2023, the Company along with the Board established and approved and assumed the Bridger Aerospace Group Holdings, Inc.

In January 2023, the Company along with its board of directors established and approved and assumed the Bridger Aerospace Group Holdings, Inc.

2023 Omnibus Incentive Plan (the “Omnibus Plan”).

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The Omnibus Plan provides, among other things, the ability for the Company to grant options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance awards and other stock-based and cash-based awards to employees, consultants and non-employee directors.

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

As of December 31, 2023, 5,314,546 shares of common stock remain available for grant under the Omnibus Plan.

The Omnibus Plan expires on January 23, 2033.

As of December 31, 2024, the Omnibus Plan authorized an aggregate of 15,994,676 shares of Common Stock for issuance.

As of December 31, 2024, 8,422,192 shares of Common Stock remain available under the Omnibus Plan.

As of December 31, 2024, the Company has granted participants RSUs and bonuses paid in Common Stock under the Omnibus Plan.

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

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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Upon vesting of each RSU, the Company will issue one share of Common Stock to the RSU holder.

Prior to the adoption of the Omnibus Plan, Legacy Bridger granted incentive units (the “Legacy Bridger Incentive Units”) to selected board members and executives.

Within each grant, 80% of the Legacy Bridger 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 Legacy Bridger Incentive Units vest upon a qualifying change of control event (the “Exit-Vesting Incentive Units”).

In connection with the Reverse Recapitalization, the Company assumed all of the remaining 242,424 outstanding and unvested Legacy Bridger Incentive Units.

Upon vesting of each Legacy Bridger Incentive Unit, the Company will issue Common Stock to the Incentive Unit holder at an exchange ratio of 0.96246 shares of Common Stock per Incentive Unit.

Notwithstanding the above, any unvested Time-Vesting Incentive Units will become vested Time-Vesting Incentive Units 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 December 31, 2023.

Forfeitures are accounted for as they occur.

Compensation cost for the Legacy Bridger Incentive Units was measured at their grant-date fair value.

The value of Legacy Bridger common shares was derived through an option pricing model, which incorporated various assumptions.

Refer to “ Note 18 – Stock-Based Compensation ” of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for a summary of the assumptions utilized in determining grant-date fair value.

Impairment of Goodwill and Long-Lived Assets

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

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

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

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Conditions that would trigger an impairment assessment include, but are not limited to, a significant adverse change in legal factors or the business climate that could affect the value of an asset or an adverse reaction.

As of the October 1, 2023 and December 31, 2022 annual goodwill impairment tests, the Company’s qualitative analysis indicated the fair value of the Company’s reporting unit exceeded its carrying value.

As of the October 1, 2024 and 2023 annual goodwill impairment tests, the Company’s qualitative analysis indicated the fair value of the Company’s reporting units exceeded carrying value.

Long-Lived Assets

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

Depreciation for vehicles and equipment and buildings is computed using the straight-line method over the estimated useful lives of the property, plant and equipment.

Depreciation for vehicles and equipment, buildings and leasehold improvements is computed using the straight-line method over the estimated useful lives of the property, plant and equipment.

Airplane hangars located on leased airport property are considered leasehold improvements with useful lives determined based on the estimated life of the underlying ground lease.

Depreciable lives by asset category are as follows:

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Buildings 50 years

Leasehold improvements 27 - 29 years

Property, plant and equipment are reviewed for impairment as discussed above under “ Long-Lived Assets ”.

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 and $1.0 million as of December 31, 2023 and 2022, respectively.

Variable Interest Entities

We follow ASC 810-10-15 guidance with respect to accounting for VIEs.

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.

In accordance with ASC 810-10-15, Consolidation , guidance with respect to accounting for VIEs, these entities do not have sufficient equity at risk to finance their activities without additional subordinated financial support from other parties or whose equity investors lack any of the characteristics of a controlling financial interest.

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

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Fair Value of Financial Instruments

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

In accordance with ASC 820, Fair Value Measurement , fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

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

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Refer to “ Note 2 – Summary of Significant Accounting Policies ” of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for the recent accounting pronouncements adopted and the recent accounting pronouncements not yet adopted for the years ended December 31, 2024 and 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 SEC 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.

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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INTERNAL CONTROL OVER FINANCIAL REPORTING

We have identified material weaknesses in our internal control over financial reporting, which we are in the process of, and are focused on, remediating.

The first material weakness is related to reviewing third party accounting advice and properly accounting for complex transactions, especially related to merger and acquisition activity, within our financial statement closing and reporting process.

The second material weakness arises from our failure to design and maintain effective IT general controls over the IT systems used within the processing of key financial transactions.

Specifically, we did not design and maintain user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate company personnel.

Within the same material weakness, we have also failed to maintain adequate documentation around the process of implementing new software solutions.

Lastly, we identified a third material weakness in our internal control over financial reporting related to the period-end account reconciliation and financial statement review controls which did not operate within a sufficient level of precision.

We have begun the process of, and are focused on, designing and implementing effective internal controls measures to improve our internal control over financial reporting and remediate the material weaknesses, including:

• the recruitment of additional personnel with extensive knowledge of GAAP, implementation of software to facilitate the accumulation and review of our financial information, and utilization of third party consultants and specialists to supplement our internal resources, as well as implementing processes and controls to segregate key functions within our finance systems, as appropriate;

• designing and following a formalized control plan related to IT general controls, including controls related to developing, implementing, and managing access to and implementing financially significant systems within our IT environment;

• engaging internal and external resources to assist with the design and evaluation of internal controls and the remediation of deficiencies, as necessary.

While these actions and planned actions are subject to ongoing management evaluation and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles, we are committed to the continuous improvement of our internal control over financial reporting and will continue to diligently review our internal control over financial reporting.

We have identified two material weaknesses in our internal control over financial reporting, which we are in the process of, and are focused on, remediating.

The material weaknesses are related to the accounting for complex transactions within our financial statement closing and reporting process, and maintaining and monitoring user access to certain IT systems contributing to our financial reporting.

While we remediated substantial parts of these pre-existing material weaknesses throughout the year, we concluded that we may be exposed to the risk of material misstatement in our financial reports by a deficiency in our precision of the review of the inputs provided by external technical accounting experts, as well as the assignment and monitoring of user access in some of our IT applications.

We have already begun the process of, and are focused on, increasing the effectiveness of our internal control over financial reporting and remediating the material weakness, including:

• improving the workflow for complex accounting transactions to include multiple levels of review and increase the time available to thoroughly evaluate the application of GAAP and improve the precision of review of assumptions made within third party accounting experts’ work product and

• hiring a Director of Technical Accounting and Reporting in December 2024 to augment and improve our review of third-party accounting advice.

• restricting privileged access in our general ledger and account reconciliation applications to ensure the strict enforcement of workflows, and

• designing controls to closely monitor the way in which remaining privileged access to financially relevant IT applications is exercised by those who hold it.

While these ongoing and planned actions are subject to constant management evaluation and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles, we are committed to the improvement of our internal control over financial reporting and will continue to diligently review our internal control over financial reporting.

Although we plan to complete this remediation process as quickly as possible, we are unable, at this time, to estimate how long it will take, and our efforts may not be successful in remediating the identified material weaknesses.

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Pursuant to Item 305(e) of Regulation S-K, the Company is not required to provide the information required by this Item as it is a “smaller reporting company.”

Pursuant to Item 305(e) of Regulation S-K, the Company is not required to provide the information required by this Item as it is a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934.

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What changed 10-K

Item 7. Management’s Discussion and Analysis