What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-13 compared with 2023-08-10 · 440 added, 312 removed, 1075 unchanged (41% of the section changed)

3 unchanged sentences

(All amounts in U.S.

June 30, 2023 As of

September 30, 2023 As of

December 31, 2022

3 unchanged sentences

Investments in marketable securities 2,249,068 54,980,156

Accounts receivable 1

11,815,732 28,902

Accounts and note receivable 25,401,837 28,902

Aircraft support parts 488,145 1,761,270

6 unchanged sentences

Other noncurrent assets 1

13,896,708 4,356,225

Total assets $ 290,711,452 $ 305,978,901

4 unchanged sentences

Operating right-of-use current liability 2

1,531,567 21,484

Current portion of long-term debt, net of debt issuance costs 1,940,914 2,445,594

2 unchanged sentences

Operating right-of-use noncurrent liability 3

6,764,776 754,673

Long-term debt, net of debt issuance costs 4

4 unchanged sentences

Series A Preferred Stock, $ 0.0001 par value;

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

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

348,786,994 —

5 unchanged sentences

1,000,000,000 shares authorized;

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

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

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

4 unchanged sentences

Total liabilities, mezzanine equity, and stockholders’ deficit $ 290,711,452 $ 305,978,901

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

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

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

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

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

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

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

3 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

4 unchanged sentences

Total cost of revenues 15,208,192 12,618,212 32,967,002 28,567,099

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

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

Selling, general and administrative expense 2

Operating loss ( 14,082,626 ) ( 2,403,504 ) ( 54,194,456 ) ( 13,702,810 )

15,826,474 18,058,418 64,242,773 28,635,304

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

Interest expense 3

( 5,970,547 ) ( 6,984,901 ) ( 17,175,959 ) ( 12,993,129 )

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

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

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

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

Income tax benefit 314,080 — 314,080 —

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

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

3 unchanged sentences

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

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

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

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

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

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

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

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

Weighted average Common Stock outstanding – diluted 78,895,759 38,770,646 77,903,350 38,770,646

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

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

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

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(All Amounts in U.S.

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

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

Other comprehensive (loss) income, net of tax

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

Other comprehensive income (loss), net of tax

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

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

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

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

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

Total other comprehensive (loss) income, net of tax ( 32,810 ) 309,678 ( 158,926 ) 983,772

Comprehensive loss $ ( 19,054,412 ) $ ( 4,253,197 ) $ ( 63,865,466 ) $ ( 18,452,112 )

Total other comprehensive income (loss), net of tax 23,508 487,266 ( 135,418 ) 1,471,038

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

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

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STOCKHOLDERS’ DEFICIT

For the Six Months Ended June 30, 2022

For the Nine Months Ended September 30, 2022

(All Amounts in U.S.

23 unchanged sentences

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

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

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

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

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

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

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

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

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

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STOCKHOLDERS’ DEFICIT

For the Six Months Ended June 30, 2023

For the Nine Months Ended September 30, 2023

(All Amounts in U.S.

28 unchanged sentences

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

Unrealized gain on derivative instruments — — — — — — — — — — 180,525 180,525

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

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

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

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

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

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

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

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

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

2 unchanged sentences

(All Amounts in U.S.

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Cash Flows from Operating Activities:

Net loss $ ( 46,218,564 ) $ ( 25,086,610 )

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

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

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

2 unchanged sentences

Stock based compensation expense 38,650,880 7,003

Loss on extinguishment of debt — 844,925

Change in fair value of the Warrants 1,865,500 —

6 unchanged sentences

Changes in operating assets and liabilities

Accounts receivable 1

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

Accounts and note receivable ( 25,372,935 ) ( 10,885,879 )

Aircraft support parts 1,273,125 183,390

7 unchanged sentences

Purchases of property, plant and equipment ( 18,054,137 ) ( 23,818,386 )

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

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

3 unchanged sentences

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

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

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

Payment of finance lease liability ( 22,790 ) —

3 unchanged sentences

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

Payment of offering costs — (896,108)

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

12 unchanged sentences

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

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

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

10 unchanged sentences

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

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

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

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

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

7 unchanged sentences

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

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

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

Basis of Presentation

12 unchanged sentences

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

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

21 unchanged sentences

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

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

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

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

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

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

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

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

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

Note 2 - Summary of Significant Accounting Policies

12 unchanged sentences

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

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

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

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

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

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

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

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Northern Fire Management Services, LLC:

16 unchanged sentences

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

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

However, the weather dependency and seasonal

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

Use of Estimates

2 unchanged sentences

Significant items subject to such estimates and assumptions include:

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

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

Reclassifications

2 unchanged sentences

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Accounts and Note Receivable

Accounts receivable consist of amounts due from our customers.

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

For the three and nine months ended September 30, 2023 and 2022, the Company did not record any bad debt expense as accounts receivable have historically been collected in accordance with the policy and there is not history of write-offs.

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

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

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

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

Deferred Offering Costs

1 unchanged sentence

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

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

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

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

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

Revenue Recognition

5 unchanged sentences

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.

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

13 unchanged sentences

and (3) are expected to be recovered.

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

The Company has elected to use the practical expedient detailed in ASC 340-40, Other Assets and Deferred Costs—Contracts with Customers , to expense any costs to fulfill a contract as they are incurred when the amortization period would be one year or less.

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

4 unchanged sentences

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

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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.

Revenue Disaggregation

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

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

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

3 unchanged sentences

Total revenues $ 53,619,117 $ 32,452,593 $ 65,599,770 $ 45,275,556

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

4 unchanged sentences

Concentration Risk

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

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

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

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

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

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

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

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

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

Business Combinations

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

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

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

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

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

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

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

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

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

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

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

Hedging Transactions and Derivative Financial Instruments

5 unchanged sentences

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

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

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

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

11 unchanged sentences

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

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

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

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

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

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

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

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

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

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

Subsequent to the Reverse Recapitalization, Bridger Aerospace Group Holdings, Inc.

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

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

2 unchanged sentences

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

The Company is subject to income taxes predominantly in the U.S., where tax laws are often complex and may be subject to different interpretations.

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

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

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

2 unchanged sentences

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

At this time, a valuation allowance has been recorded against the deferred tax assets.

The Company’s interpretations of tax laws are subject to review and examination by various taxing authorities and jurisdictions where the Company operates, and disputes may occur regarding its view on a tax position.

These disputes over interpretations with the various tax authorities may be settled by audit, administrative appeals or adjudication in the court systems of the tax jurisdictions in which the Company operates.

The Company regularly reviews whether it may be assessed additional income taxes as a result of the resolution of these matters, and the Company records additional reserves as appropriate.

In addition, the Company may revise its estimate of income taxes due to changes in income tax laws, legal interpretations and business strategies.

The Company recognizes the financial statement effects of uncertain income tax positions when it is more likely than not, based on the technical merits, that the position will be sustained upon examination.

For additional information in income taxes, see “Note 19 – Income Taxes.”

Net Income (Loss) Per Share

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

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

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

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

Net (Loss) Income Per Share

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

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

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

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

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

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

Collaboration Agreements

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

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

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

1 unchanged sentence

Stock-Based Compensation

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

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

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

11 unchanged sentences

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

Recent Accounting Pronouncements

15 unchanged sentences

Recently Issued Accounting Pronouncements

In June 2020, the FASB issued ASU No.

In September 2020, the FASB issued ASU No.

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

2 unchanged sentences

These updates provide optional expedients and exceptions for applying US GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met.

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

The optional guidance is

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

In December 2022, the FASB issued ASU No.

5 unchanged sentences

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

June 30, 2023 As of

September 30, 2023 As of

December 31, 2022

6 unchanged sentences

Money market fund $ 9,251,919 $ 9,284,362

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

As of June 30, 2023

As of September 30, 2023

Price Unrealized

4 unchanged sentences

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

Government securities 4,684,574 — ( 287 ) 4,684,287

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

8 unchanged sentences

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

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

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

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

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

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

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

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

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Note 4 – Accounts and Note Receivable

Accounts and note receivable consist of the following:

As of September 30,

2023 As of December 31,

Trade accounts receivable $ 22,383,983 $ 28,902

Note receivable 3,000,000 —

Other receivables 17,854 —

Total accounts and note receivable $ 25,401,837 $ 28,902

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

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

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

Note 5 – Aircraft Support Parts

Aircraft support parts consist of the following:

As of June 30,

As of September 30,

2023 As of December 31,

4 unchanged sentences

Prepaid expenses and other current assets consist of the following:

As of June 30,

As of September 30,

2023 As of December 31,

Prepaid insurance $ 1,491,823 $ 968,721

Deposits 1,206,769 65,641

Prepaid subscriptions 1,207,655 770,724

7 unchanged sentences

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

As of June 30,

As of September 30,

2023 As of December 31,

11 unchanged sentences

Total property, plant and equipment, net $ 198,472,301 $ 192,091,413

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

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

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

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

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

2 unchanged sentences

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Aircraft that is temporarily not in service is not depreciated until placed into service.

Note 7 – Goodwill and Intangible Assets, Net

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

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

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

Aircraft that is temporarily not in service is not depreciated until placed back into service.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

Note 8 – Acquisition Activity

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

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

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

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

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

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

The remaining $ 8,319 thousand of Common Stock consideration is contingent upon the achievement of certain operational milestones and, assuming achievement of such milestones, will be issued to the Ignis shareholders in 2024, 2025, and 2026, with the price per share determined based upon a trailing 120 -day VWAP of the Common Stock at the time of each issuance.

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

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

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

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

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

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

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

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

The goodwill reflects our expectations of favorable future growth opportunities.

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

Acquisition-related costs associated with the Acquisition are included within Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations.

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

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

Purchase Price Allocation

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

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

The final allocations

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

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

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

Common Stock $ 11,561,000

Aggregate purchase price 11,561,000

Cash and cash equivalents 2,542

Intangible assets (Weighted average useful life of 5.0 years)

Accounts payable ( 36,716 )

Long-term accrued expenses and other noncurrent liabilities ( 67,180 )

Deferred tax liability ( 314,080 )

Net assets acquired 884,566

Goodwill $ 10,676,434

Note 9 – Goodwill and Intangible Assets, Net

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

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

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

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

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

Addition from acquisition 10,676,434

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

Intangible assets consisted of the following:

As of June 30, 2023

As of September 30, 2023

(Years) Gross

3 unchanged sentences

Internal-use software 3 296,675 ( 183,093 ) 113,582

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

Total intangible assets $ 1,664,298 $ ( 235,342 ) $ 1,428,956

6 unchanged sentences

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

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

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

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

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

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

1 unchanged sentence

Other noncurrent assets consisted of the following:

As of June 30,

As of September 30,

2023 As of December 31,

1 unchanged sentence

Operating lease right-of-use asset 8,119,086 671,054

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

Prepaid subscriptions 3,226,388 1,246,128

Interest rate swap 1,519,326 1,407,135

Other assets 31,908 31,908

Total other noncurrent assets $ 13,896,708 $ 4,356,225

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Note 11 – Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following:

As of June 30,

As of September 30,

2023 As of December 31,

7 unchanged sentences

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

Contingent consideration 8,319,000 —

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

5 unchanged sentences

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Warrant liabilities

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

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

Public Warrants

4 unchanged sentences

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

3 unchanged sentences

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

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

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

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

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

Private Placement Warrants

2 unchanged sentences

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

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

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

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

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

Contingent consideration

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

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Note 12 - Interest Rate Swap and Freestanding Derivative

3 unchanged sentences

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

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

Each month, the Company made interest payments to RMB under its loan agreement based on the current applicable one-month LIBOR rate plus the contractual LIBOR margin then in effect with respect to the term loan, without reflecting the interest rate swap until June 30, 2023.

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

As of June 30, 2023

As of September 30, 2023

Date Maturity

1 unchanged sentence

Amount Fair Value Pay Fixed Receive Rate

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

4/15/2020 3/15/2030 $ 10,627,419 $ 1,519,326 3.887 % 1 Month SOFR + 2.5 %

As of December 31, 2022

5 unchanged sentences

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

The unrealized gain is reported in other comprehensive income.

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

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

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

Freestanding Derivative

2 unchanged sentences

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

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

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

The Company paid $ 1,119 thousand and the remaining $ 1,118 thousand of the excess hold fee in June and July 2023, respectively.

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

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Note 13 - Fair Value Measurements

Long-term debt, net of debt issuance costs

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

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

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

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

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

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

As of June 30, 2023

As of September 30, 2023

Level 1 Level 2 Level 3

Cash $ 19,378,525 $ — $ —

Cash equivalents:

Money market fund — — —

Total Cash and cash equivalents 844,582 — —

Restricted cash:

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Warrant liabilities – Private Placement Warrants — 2,726,000 —

Contingent consideration — — 8,319,000

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

Total liabilities $ 5,002,000 $ 2,726,000 $ 9,312,952

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

As of December 31, 2022

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Total liabilities $ — $ — $ 3,225,613

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Interest Rate Swap and Freestanding Derivative

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The Legacy Bridger Series B Preferred Shares were redeemed during the year ended December 31, 2022 as furthered discussed in “Note 20 – Mandatorily Redeemable Preferred Shares.”

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

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Refer to “Note 11 – Accrued Expenses and Other Liabilities” for additional details.

Contingent consideration

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

The preliminary fair value of the liability for the contingent payments recognized upon the acquisition as part of the purchase accounting opening balance sheet totaled $ 8,319 thousand.

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

Assumptions used in this calculation are equity volatility, estimated future stock prices and various probability factors.

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

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

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

Refer to “Note 11 – Accrued Expenses and Other Liabilities” for additional details.

Non-Recurring Fair Value Measurements

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

Note 14 – Long-Term Debt

Long-term debt consisted of the following:

As of June 30,

As of September 30,

2023 As of December 31,

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Total long-term debt, net of debt issuance costs $ 205,219,737 $ 205,471,958

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

2020 Loan Agreements

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

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

These notes are also subject to financial covenants requiring the Company to maintain a Senior Leverage Ratio on a quarterly basis not to

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

exceed 7 .00 to 1.00 through Quarter 3, 2024, 6 .00 to 1.00 through Quarter 3, 2025 and 5 .00 to 1.00 thereafter.

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

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

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

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

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

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

2021 Loan Agreements

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Debt issuance costs for this loan were $ 570 thousand.

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

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

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

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No debt issuance costs were incurred.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

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

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

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

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

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

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

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

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

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

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

The uncertainty regarding the company’s ability to diligently prosecute remediation plan to completion and the potential impact on the bonds maturity as a result of the anticipated debt covenant violations at subsequent compliance dates could result in the 2022 Bonds becoming immediately due and payable, which raises substantial doubt about our ability to continue as a going concern.

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

Note 15 – Commitments and Contingencies

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and Viking for the purchase of six Viking CL415EAF aircraft.

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

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

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

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

As of June 30, 2023:

Remainder of 2023 $ 758,960

Total $ 758,960

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

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

Note 16 – Collaborations

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

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

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

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

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

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

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

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

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

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

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

Note 17 – Stock-Based Compensation

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

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

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

Forfeitures are accounted for as they occur.

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

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

Forfeitures are accounted for as they occur.

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

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Discount for lack of marketability (%) 30

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

Time-Vesting Incentive Units Exit-Vesting Incentive Units

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

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

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

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

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

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

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Restricted Stock Units

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

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

Management Awards Employee Awards

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

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

The fair value of the

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

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

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

Management Awards Employee Awards Non-Employee Director

Awards Weighted average

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grant date fair

value Number of

Awards Weighted average

grant date fair

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

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Vested ( 2,400,354 ) 9.00 — — — —

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

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

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

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

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

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

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

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

Note 18 – Related Party Transactions

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

On July 10, 2023, the Company entered into two operating lease agreements, each for a Pilatus PC-12 under the ownership of Mr.

Timothy Sheehy, the Chief Executive Officer.

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

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

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

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

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

Timothy Sheehy, the Chief Executive Officer.

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

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

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

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

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

Refer to “Note 14 – Long-Term Debt.”

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Note 19 – Mezzanine Equity

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

Series A Preferred Stock

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

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

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

Accrued interest for the Series A Preferred Stock was $ 16,128 thousand as of September 30, 2023.

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

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

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

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

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

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

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

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

Refer to table below.

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

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

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

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

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

Additionally, the reduction of the conversion price from $ 12.90 per share to $ 11.00 per share triggered a down round conversion feature embedded in the Series A Preferred Stock upon Closing.

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

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

Redeemable Series A Preferred Stock

2 unchanged sentences

Adjustment to maximum redemption value — 16,128,047

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

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

Redeemable Legacy Bridger Series C

9 unchanged sentences

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

6 unchanged sentences

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

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

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

Legacy Bridger Series A Preferred Shares

2 unchanged sentences

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

12 unchanged sentences

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

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

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

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

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

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

Note 21 – Income Taxes

6 unchanged sentences

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

The effective tax rate was 0 % for three and six months ended June 30, 2023, respectively.

The tax rate differs from the federal statutory rate as a result of the full valuation allowance recognized against the Company’s deferred tax assets.

As a result of the Reverse Recapitalization, the Company recognized a deferred tax asset to account for the difference between the Company’s book and tax basis in its investment in Legacy Bridger.

Tax basis exceeds book basis largely because of the tax basis step-up created in various business and equity transactions prior to the Reverse Recapitalization.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

The Company expects to generate more deferred tax assets related to the issuance of stock-based compensation discussed in “Note 15 – Stock-Based Compensation” and federal net operating losses.

The Company has assessed the realizability of the net deferred tax assets and in that analysis has considered the relevant positive and negative evidence available to determine that it is more likely than not that the deferred tax assets will not be realized as the Company does not expect to generate sufficient taxable income in the near term.

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

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

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

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

The Company’s income tax filings will be subject to audit by various taxing jurisdictions.

2 unchanged sentences

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

Note 20 – Net (Loss) Income Per Share

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

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

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

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

Note 22 – Net Income (Loss) Per Share

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

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

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

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

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

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

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

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

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

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

Numerator—basic and diluted

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

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

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

3 unchanged sentences

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

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

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

Denominator—basic

4 unchanged sentences

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

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

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

7 unchanged sentences

Weighted average Common Stock outstanding—diluted 78,895,759 38,770,646 77,903,350 38,770,646

Basic and diluted net (loss) income per share

Basic net (loss) income per Common Stock $ ( 0.55 ) $ ( 7.15 ) $ 0.77 $ ( 7.64 )

Diluted net (loss) income per Common Stock $ ( 0.55 ) $ ( 7.15 ) $ 0.44 $ ( 7.64 )

Basic and diluted net income (loss) per share

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

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

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

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

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

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

Shares excluded from diluted net (loss) income per share

Shares excluded from diluted net income (loss) per share

Series A Preferred Stock 315,789 — — —

7 unchanged sentences

For periods prior to the Closing, Legacy Bridger had Class A, Class B, Class C and Class D Common shares.

As described in “Note 1—Organization and Basis of Presentation,” on January 24, 2023, we consummated the Reverse Recapitalization between Jack Creek Investment Corporation and Legacy Bridger.

As described in “Note 1 – Organization and Basis of Presentation,” on January 24, 2023, the Company consummated the Reverse Recapitalization between JCIC and Legacy Bridger.

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

13 unchanged sentences

Of the shares issued to Legacy Bridger Common shareholders and JCIC Sponsor, 233,323 and 855,000 shares are subject to continuing vesting conditions, respectively.

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

Refer to “Note 8 – Acquisition Activity.”

Holders of Common Stock are entitled to full economic rights, including the right to receive dividends when and if declared by the Board, subject to any statutory or contractual restrictions of the payment of dividends and any restrictions on the payment of dividends imposed by the vesting conditions of the unvested Common Stock.

Each holder of Common Stock is entitled to one vote for each Common Stock held.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

2 unchanged sentences

dollars, except as stated)

Each holder of Common Stock is entitled to one vote for each Common Stock held.

Note 24 – Revision of Previously Issued Financial Statements

140 unchanged sentences

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

On July 21, 2023, we entered into a Purchase and Sale Agreement (the “Purchase Agreement”), through our subsidiary Bridger Bighorn, LLC, to acquire Big Horn Airways, Inc., for a total purchase price of $ 39.25 million, with $ 14.75 million payable in unregistered shares of Bridger’s Common Stock, and the remainder payable in cash which may be adjusted pursuant to the terms of the Purchase Agreement, including for Bighorn’s cash, indebtedness, and net working capital as of the closing.

The number of shares of Common Stock issuable to the sellers at closing will be determined based upon a 60 -day volume-weighted average per-share price (VWAP) of Bridger’s Common Stock, consisting of the 30 consecutive trading days ending on the trading day immediately preceding July 21, 2023 and the 30 consecutive trading days beginning on July 21, 2023.

Consummation of the transaction is subject to satisfaction or waiver of customary closing conditions including raising cash and regulatory approvals.

The Common Stock consideration will be subject to transfer restrictions for a three-year period post-closing, with 1/36th of the total shares of Common Stock issued to the sellers vesting each month over such three-year period.

The Purchase Agreement also provides Sellers with customary resale registration rights with respect to their Common Stock consideration.

Consummation of the Transaction is subject to the satisfaction or waiver of customary closing conditions and is expected to occur on or before September 22, 2023;

however, if Bridger has not paid the cash consideration by such date, the closing date will automatically be extended to December 31, 2023.

The Purchase Agreement may be terminated under certain customary and limited circumstances at any time prior to the closing, including by mutual written consent, and will automatically be terminated if the closing does not occur on or before January 31, 2024.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S.

dollars, except as stated)

The Purchase Agreement contains customary representations, warranties, covenants, and post-closing indemnification obligations of the parties thereto.

The Sellers have agreed to certain customary non-competition and non-solicitation covenants for a period of five years following the closing.

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

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

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

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

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

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

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

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

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

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

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements