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Item 2. Management’s Discussion and Analysis

2025-08-08 compared with 2025-05-09 · 193 added, 82 removed, 393 unchanged (41% of the section changed)

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

The discussion and analysis should be read together with the Condensed Consolidated Financial Statements as of March 31, 2025 and December 31, 2024, for the three months ended March 31, 2025 and 2024, and the related notes thereto, that are included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”).

The discussion and analysis should be read together with the Condensed Consolidated Financial Statements as of June 30, 2025 and December 31, 2024, for the three and six months ended June 30, 2025 and 2024, and the related notes thereto, that are included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”).

This discussion and analysis should also be read together with the historical audited annual Consolidated Financial Statements as of and for the years ended December 31, 2024 and 2023, included in the Annual Report on Form 10-K (the “Annual Report”).

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We believe that this expected long-term increase in demand will offset increased costs and that the operational challenges we may experience in the near term can be managed in a manner that will allow us to support increased demand, though we cannot provide any assurances.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”).

Among other things, the OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation.

We are currently evaluating the impact of the OBBBA on our business and financial statements.

KEY COMPONENTS OF OUR RESULTS OF OPERATIONS

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RESULTS OF OPERATIONS

Comparison of the Three Months Ended March 31, 2025 to the Three Months Ended March 31, 2024

The following table sets forth our Condensed Consolidated Statements of Operations information for the three months ended March 31, 2025 and 2024 and should be reviewed in conjunction with the financial statements and notes included elsewhere in this Quarterly Report.

Comparison of the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024

The following table sets forth our Condensed Consolidated Statements of Operations information for the three months ended June 30, 2025 and 2024 and should be reviewed in conjunction with the financial statements and notes included elsewhere in this Quarterly Report.

$s in thousands Three Months Ended

March 31, 2025 Three Months Ended

March 31, 2024 Period Over Period Change ($) Period Over Period Change (%)

June 30, 2025 Three Months Ended

June 30, 2024 Period Over Period Change ($) Period Over Period Change (%)

Revenues $ 30,751 $ 13,014 $ 17,737 136%

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Total cost of revenues 18,700 9,867 8,833 90%

Gross loss (1,561) (3,699) 2,138 (58%)

Gross income 12,051 3,147 8,904 283%

Selling, general and administrative expense 6,524 7,902 (1,378) (17%)

Operating income (loss) 5,527 (4,755) 10,282 (216%)

Interest expense (5,737) (5,854) 117 (2%)

Other income 700 144 556 386%

Income (loss) before income taxes 490 (10,465) 10,955 (105%)

Income tax (expense) benefit (182) 484 (666) (138%)

Net income (loss) $ 308 $ (9,981) $ 10,289 (103%)

Revenues increased by $17.7 million, or 136%, to $30.8 million for the three months ended June 30, 2025, from $13.0 million for the three months ended June 30, 2024.

Revenues by service offering for the three months ended June 30, 2025 and 2024 were as follows:

$s in thousands Three Months Ended

June 30, 2025 Three Months Ended

June 30, 2024 Period Over Period Change ($) Period Over Period Change (%)

Fire suppression $ 18,075 $ 7,466 $ 10,609 142%

Aerial surveillance 4,023 3,514 509 14%

MRO 5,356 1,817 $ 3,539 195%

Other services 3,297 217 3,080 1,419%

Total revenues $ 30,751 $ 13,014 $ 17,737 136%

Fire suppression revenue increased by $10.6 million, or 142%, to $18.1 million for the three months ended June 30, 2025, from $7.5 million for the three months ended June 30, 2024.

The increase was primarily driven by increased utilization for our Super Scoopers for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Aerial surveillance increased by $0.5 million, or 14%, to $4.0 million for the three months ended June 30, 2025, from $3.5 million for the three months ended June 30, 2024.

The increase was primarily driven by increased utilization for our Pilatus aircraft for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Maintenance repair increased by $3.5 million, or 195%, to $5.4 million for the three months ended June 30, 2025, compared to $1.8 million for the three months ended June 30, 2024.

The increase was primarily due to the return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement, and the revenues from maintenance and repair work performed by FMS, which was acquired in June 2024.

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

Other services revenue increased by $3.1 million, or 1,419%, to $3.3 million for the three months ended June 30, 2025, from $0.2 million for the three months ended June 30, 2024.

The increase was primarily due to an increase in third-party training and flight operations services utilizing our aircraft for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Revenues by geographic area for the three months ended June 30, 2025 and 2024 were as follows:

$s in thousands Three Months Ended

June 30, 2025 Three Months Ended

June 30, 2024 Period Over Period Change ($) Period Over Period Change (%)

United States $ 25,669 $ 11,197 $ 14,472 129%

Spain 5,082 1,817 3,265 180%

Total revenues $ 30,751 $ 13,014 $ 17,737 136%

United States revenue increased by $14.5 million, or 129%, to $25.7 million for the three months ended June 30, 2025, from $11.2 million for the three months ended June 30, 2024.

The increase for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, was primarily driven by increased utilization of our aircraft and maintenance and repair work performed by FMS, which was acquired in June 2024.

Spain revenue increased by $3.3 million, or 180% to $5.1 million for the three months ended June 30, 2025, from $1.8 million for the three months ended June 30, 2024.

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

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

Cost of Revenues

Total cost of revenues increased by $8.8 million, or 90%, to $18.7 million for the three months ended June 30, 2025, from $9.9 million for the three months ended June 30, 2024.

Flight Operations

Flight operations expenses increased by $2.8 million, or 54%, to $7.9 million for the three months ended June 30, 2025, from $5.1 million for the three months ended June 30, 2024.

The increase was primarily attributable to an increase in depreciation expense of $1.5 million, an increase in salaries and wages expense of $0.6 million, an increase in travel expenses of $0.4 million, an increase in training expenses of $0.1 million, an increase in aircraft license expenses of $0.1 million, and an increase in aircraft lease expense of $0.1 million, in each case for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Maintenance expenses increased by $6.1 million, or 128%, to $10.8 million for the three months ended June 30, 2025, from $4.8 million for the three months ended June 30, 2024.

The increase was primarily driven by an increase in aircraft maintenance and modification expense of $5.4 million due to the return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement and maintenance and repair work performed by FMS, which was acquired in June 2024.

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

The increase was partially driven by an increase in salaries and wages expense of $0.7 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Selling, General and Administrative Expense

Selling, general and administrative expense decreased by $1.4 million, or 17%, to $6.5 million for the three months ended June 30, 2025, from $7.9 million for the three months ended June 30, 2024.

The decrease was primarily attributable to a decrease in the market value of contingent consideration of $2.8 million, a decrease in stock-based compensation of $2.7 million associated with restricted stock units (“RSUs”) issued to senior management and employees of Bridger, partially offset by an increase in the market value of the Public Warrants and Private Placement Warrants (collectively, the “Warrants”) of $2.6 million, an increase in professional services expenses of $0.6 million, an increase in amortization expense of $0.4 million, and an increase in contractor labor expense of $0.3 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Interest Expense

Interest expense decreased by $0.1 million, or 2%, to $5.7 million for the three months ended June 30, 2025, from $5.9 million for the three months ended June 30, 2024.

The decrease was driven by lower interest rates for the Live Oak Bank Loans.

Refer to “ Note 15 – Long-Term Debt ” of the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report for additional details.

Other income increased by $0.6 million, or 386%, to $0.7 million for the three months ended June 30, 2025, from $0.1 million for the three months ended June 30, 2024.

The increase was primarily driven by a currency gain of $0.5 million and an increase in dividend income on cash equivalents of $0.1 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Income Tax (Expense) Benefit

Income tax expense increased by $0.7 million to $0.2 million for the three months ended June 30, 2025, from an income tax benefit of $0.5 million for the six months ended June 30, 2024.

The increase was due primarily to a discrete income tax benefit generated from the FMS Acquisition during 2024.

Comparison of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024

The following table sets forth our unaudited condensed consolidated statements of operations information for the six months ended June 30, 2025 and 2024 and should be reviewed in conjunction with the financial statements and notes included elsewhere in this Quarterly Report.

$s in thousands Six Months Ended

June 30, 2025 Six Months Ended

June 30, 2024 Period Over Period Change ($) Period Over Period Change (%)

Revenues $ 46,397 $ 18,521 $ 27,876 151%

Cost of revenues:

Flight operations 14,108 10,115 3,993 39%

Maintenance 21,799 8,958 12,841 143%

Total cost of revenues 35,907 19,073 16,834 88%

Gross income (loss) 10,490 (552) 11,042 (2000%)

Selling, general and administrative expense 15,114 19,512 (4,398) (23%)

Operating loss (4,624) (20,064) 15,440 (77%)

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Loss before income taxes (14,797) (30,538) 15,741 (52)%

Income tax expense (251) (14) (237) 1,693%

Income tax (expense) benefit

(433) 470 (903) (192)%

Net loss $ (15,230) $ (30,068) $ 14,838 (49%)

Revenues increased by $10.1 million, or 184%, to $15.6 million for the three months ended March 31, 2025, from $5.5 million for the three months ended March 31, 2024.

Revenues by service offering for the three months ended March 31, 2025 and 2024 were as follows:

$s in thousands Three Months Ended

March 31, 2025 Three Months Ended

March 31, 2024 Period Over Period Change ($) Period Over Period Change (%)

MRO $ 7,890 $ 428 $ 7,462 1,743%

Revenues increased by $27.9 million, or 151%, to $46.4 million for the six months ended June 30, 2025, from $18.5 million for the six months ended June 30, 2024.

Revenues by service offering for the six months ended June 30, 2025 and 2024 were as follows:

$s in thousands Six Months Ended

June 30, 2025 Six Months Ended

June 30, 2024 Period Over Period Change ($) Period Over Period Change (%)

Fire suppression $ 23,858 $ 11,347 $ 12,511 110%

Aerial surveillance 5,734 4,097 1,637 40%

MRO 13,246 2,245 11,001 490%

Other services 3,559 832 2,727 328%

Total revenues $ 46,397 $ 18,521 $ 27,876 151%

Maintenance repair was $7.9 million for the three months ended March 31, 2025, compared to $0.4 million for the three months ended March 31, 2024.

The increase in the amount is primarily due to the revenues from maintenance and repair work performed by FMS, which was acquired in June 2024, and the return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement.

Fire suppression revenue increased by $12.5 million, or 110%, to $23.9 million for the six months ended June 30, 2025, from $11.3 million for the six months ended June 30, 2024.

The increase was primarily driven by increased utilization for our Super Scoopers for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Aerial surveillance revenue increased by $1.6 million, or 40%, to $5.7 million for the six months ended June 30, 2025, from $4.1 million for the six months ended June 30, 2024.

The increase was primarily driven by increased utilization for our Pilatus aircraft operating for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Maintenance repair revenue increased by $11.0 million, or 490%, to $13.2 million for the six months ended June 30, 2025, compared to $2.2 million for the six months ended June 30, 2024.

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

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

Fire suppression revenue increased by $1.9 million, or 49%, to $5.8 million for the three months ended March 31, 2025, from $3.9 million for the three months ended March 31, 2024.

The increase was primarily driven by increased flight hours for our Super Scoopers due to an earlier start to the 2025 wildfire season for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Aerial surveillance increased by $1.1 million, or 193%, to $1.7 million for the three months ended March 31, 2025, from $0.6 million for the three months ended March 31, 2024.

The increase was primarily driven by increased flight hours for our Pilatus aircraft for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Other services revenue decreased by $0.4 million, or 57%, to $0.3 million for the three months ended March 31, 2025, from $0.6 million for the three months ended March 31, 2024.

The decrease was primarily due to a decrease in third-party training and flight operations services utilizing our aircraft for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Revenues by geographic area for the three months ended March 31, 2025 and 2024 were as follows:

$s in thousands Three Months Ended

March 31, 2025 Three Months Ended

March 31, 2024 Period Over Period Change ($) Period Over Period Change (%)

Other services revenue increased by $2.7 million, or 328%, to $3.6 million for the six months ended June 30, 2025, from $0.8 million for the six months ended June 30, 2024.

The increase was primarily due to third-party training and flight operations services utilizing our aircraft for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Revenues by geographic area for the six months ended June 30, 2025 and 2024 were as follows:

$s in thousands Six Months Ended

June 30, 2025 Six Months Ended

June 30, 2024 Period Over Period Change ($) Period Over Period Change (%)

United States $ 35,406 $ 15,676 $ 19,730 126%

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Total revenues $ 46,397 $ 18,521 $ 27,876 151%

United States revenue increased by $5.3 million, or 117%, to $9.7 million for the three months ended March 31, 2025, from $4.5 million for the three months ended March 31, 2024.

The increase for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, was primarily driven by increased flight hours due to an earlier start to the 2025 wildfire season and maintenance and repair work performed by FMS, which was acquired in June 2024.

Spain revenue increased by $4.9 million, or 475% to $5.9 million for the three months ended March 31, 2025, from $1.0 million for the three months ended March 31, 2024.

United States revenue increased by $19.7 million, or 126%, to $35.4 million for the six months ended June 30, 2025, from $15.7 million for the six months ended June 30, 2024.

The increase for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, was primarily driven by increased utilization of our aircraft and maintenance and repair work performed by FMS, which was acquired in June 2024.

Spain revenue increased by $8.1 million, or 286% to $11.0 million for the six months ended June 30, 2025, from $2.8 million for the six months ended June 30, 2024.

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

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Cost of Revenues

Total cost of revenues increased by $8.0 million, or 87%, to $17.2 million for the three months ended March 31, 2025, from $9.2 million for the three months ended March 31, 2024.

Total cost of revenues increased by $16.8 million, or 88%, to $35.9 million for the six months ended June 30, 2025, from $19.1 million for the six months ended June 30, 2024.

Flight Operations

Flight operations expenses increased by $1.2 million, or 25%, to $6.3 million for the three months ended March 31, 2025, from $5.0 million for the three months ended March 31, 2024.

The increase was primarily attributable to an increase in salaries and wages expense of $0.8 million, an increase of contractor labor expenses of $0.2 million, an increase in depreciation expense of $0.1 million, and an increase in aircraft lease expense of $0.1 million, in each case for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Maintenance expenses increased by $6.8 million, or 161%, to $11.0 million for the three months ended March 31, 2025, from $4.2 million for the three months ended March 31, 2024.

The increase was primarily driven by an increase in aircraft maintenance and modification expense of $5.4 million, an increase in salaries and wages expense of $1.1 million and an increase in depreciation expense of $0.3 million, in each case for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Flight operations expenses increased by $4.0 million, or 39%, to $14.1 million for the six months ended June 30, 2025, from $10.1 million for the six months ended June 30, 2024.

The increase was primarily attributable to an increase in depreciation expense of $1.6 million, an increase in salaries and wages expense of $1.3 million, an increase in travel expenses of $0.5 million, an increase in aircraft lease expense of approximately $0.2 million, an increase in contractor labor expense of $0.2 million, an increase in training costs of $0.1 million, and an increase in aircraft license expenses of $0.1 million, in each case for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Maintenance expenses increased by $12.8 million, or 143%, to $21.8 million for the six months ended June 30, 2025, from $9.0 million for the six months ended June 30, 2024.

The increase was primarily driven by an increase in aircraft maintenance and modification expense of $10.8 million due to the return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement and maintenance and repair work performed by FMS, which was acquired in June 2024.

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

The increase was partially driven by an increase in salaries and wages of $2.0 million, in each case for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Selling, General and Administrative Expense

Selling, general and administrative expense decreased by $3.0 million, or 26%, to $8.6 million for the three months ended March 31, 2025, from $11.6 million for the three months ended March 31, 2024.

The decrease was primarily attributable to a decrease in stock-based compensation of $3.7 million associated with restricted stock units (“RSUs”) issued to senior management and employees of Bridger, partially offset by an increase in the market value of the Public Warrants and Private Placement Warrants (collectively, the “Warrants”) of $0.6 million and an increase in amortization expense of $0.2 million.

Selling, general and administrative expense decreased by $4.4 million, or 23%, to $15.1 million for the six months ended June 30, 2025, from $19.5 million for the six months ended June 30, 2024.

The decrease was primarily attributable to the decrease in stock-based compensation of $6.5 million associated with RSUs issued to senior management and employees of Bridger and a decrease in the market value of the contingent consideration of $3.0 million.

The decrease is partially offset by an increase in the market value of the Warrants of $3.2 million, and an increase in amortization expense of $0.8 million, an increase in professional services expenses of $0.6 million, in each case for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Interest Expense

Interest expense decreased by $0.2 million, or 3%, to $5.7 million for the three months ended March 31, 2025, from $5.9 million for the three months ended March 31, 2024.

Interest expense decreased by $0.3 million, or 3%, to $11.5 million for the six months ended June 30, 2025, from $11.8 million for the six months ended June 30, 2024.

The decrease was driven by lower interest rates for the Live Oak Bank Loans.

Refer to “ Note 15 – Long-Term Debt ” of the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report for additional details.

Other income decreased by $0.6 million, or 48%, to $0.6 million for the three months ended March 31, 2025, from $1.2 million for the three months ended March 31, 2024.

The decrease was primarily driven by a fair value adjustment of embedded derivative of Series A Preferred Stock of $0.9 million for three months ended March 31, 2024.

The decrease was partially offset by currency gain of $0.2 million and dividend income on cash equivalents of $0.1 million, in each case for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Income Tax Expense

Income tax expense increased by $0.2 million to $0.3 million for the three months ended March 31, 2025, from $14,000 for the three months ended March 31, 2024.

The increase was driven by franchise tax expense for the three months ended March 31, 2025.

Other income of $1.3 million for the six months ended June 30, 2025 primarily consisted of dividend income on cash equivalents of $0.6 million and a currency gain of $0.5 million.

Other income of $1.3 million for the six months ended June 30, 2024 consisted of interest income for the embedded derivative of Legacy Bridger Series C Preferred Shares of $0.8 million and a currency gain of $0.4 million.

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

Income Tax (Expense) Benefit

Income tax expense increased by $0.9 million, or 192%, to $0.4 million for the six months ended June 30, 2025, primarily from an income tax benefit of $0.5 million for the six months ended June 30, 2024.

The increase was driven by a discrete benefit generated from the FMS Acquisition during 2024.

NON-GAAP FINANCIAL MEASURES

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

The reconciliation of Net loss, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA for the three months ended March 31, 2025 and 2024 is as follows:

The reconciliation of Net income (loss), the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA for the three months ended June 30, 2025 and 2024 is as follows:

$s in thousands Three Months Ended

March 31, 2025 Three Months Ended

March 31, 2024 Period Over Period Change ($) Period Over Period Change (%)

June 30, 2025 Three Months Ended

June 30, 2024 Period Over Period Change ($) Period Over Period Change (%)

Net income (loss) $ 308 $ (9,981) $ 10,289 (103%)

Income tax expense (benefit) 182 (484) 666 (138%)

Depreciation and amortization 4,019 1,998 2,021 101%

Interest expense 5,737 5,854 (117) (2%)

EBITDA 10,246 (2,613) 12,859 (492%)

Stock-based compensation 1

1,737 4,477 (2,740) (61)%

Business development & integration expenses 2

355 149 206 138%

Change in fair value of earnout consideration 3

(2,597) 192 (2,789) (1,453%)

Change in fair value of Warrants 4

799 (1,865) 2,664 (143%)

Offering costs 5

279 (149) 428 (287%)

Adjusted EBITDA $ 10,819 $ 191 $ 10,628 5,564%

Net income (loss) margin 6

Adjusted EBITDA margin 6

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

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

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

and Flight Test & Mechanical Solutions, Inc.

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

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

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

The reconciliation of Net loss, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA for the six months ended June 30, 2025 and 2024 is as follows:

Six Months Ended

June 30, 2025 Six Months Ended

June 30, 2024 Period Over Period Change ($) Period Over Period Change (%)

Net loss $ (15,230) $ (30,068) $ 14,838 (49%)

Income tax expense 251 14 237 1,693%

Income tax expense (benefit) 433 (470) 903 (192%)

Depreciation and amortization 5,999 3,288 2,711 82%

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Offering costs 5

158 — 158 n/a

437 (149) 586 (393%)

Adjusted EBITDA $ 5,744 $ (6,737) $ 12,481 (185%)

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Adjusted EBITDA margin 6

(32 %) (126 %)

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

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Cash and Marketable Securities

As of March 31, 2025, our principal sources of liquidity were cash and cash equivalents of $22.3 million which were held for working capital purposes and restricted cash of $9.2 million.

As of June 30, 2025, our principal sources of liquidity were cash and cash equivalents of $17.0 million which were held for working capital purposes and restricted cash of $13.8 million.

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

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

On March 31, 2025, the closing price of our Common Stock was $1.13 per share.

On June 30, 2025, the closing price of our Common Stock was $1.93 per share.

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

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

Based on our unrestricted cash and cash equivalents balance as of March 31, 2025, and our projected cash use, we would anticipate the need to raise additional funds through equity or debt financing (or the issuance of stock as acquisition consideration) to pursue any significant acquisition opportunity, at the time of such acquisition opportunity.

Based on our unrestricted cash and cash equivalents balance as of June 30, 2025, and our projected cash use, we would anticipate the need to raise additional funds through equity or debt financing (or the issuance of stock as acquisition consideration) to pursue any significant acquisition opportunity, at the time of such acquisition opportunity.

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

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

The Company is in compliance with the DSCR covenant as of March 31, 2025 and management anticipates the Company will remain in compliance with the DSCR covenant at future quarterly measurement periods in the next 12 months.

The Company is in compliance with the $8.0 million minimum liquidity requirement as of March 31, 2025.

The Company is in compliance with the DSCR covenant as of June 30, 2025 and management anticipates the Company will remain in compliance with the DSCR covenant at future quarterly measurement periods in the next 12 months.

The Company is in compliance with the $8.0 million minimum liquidity requirement as of June 30, 2025.

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

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

The Company is in compliance with such financial covenants as of March 31, 2025.

The Company is in compliance with such financial covenants as of June 30, 2025.

Citywide Banks Loans

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

The Company is in compliance with such financial covenants as of March 31, 2025.

The Company is in compliance with such financial covenants as of June 30, 2025.

Mezzanine and Permanent Equity

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

Accrued interest for the Series A Preferred Stock was $6.6 million as of March 31, 2025.

As of March 31, 2025, it was probable that the Series A Preferred Stock may become redeemable at the holder’s option on or after March 29, 2027.

Accrued interest for the Series A Preferred Stock was $13.2 million for the six months ended June 30, 2025.

As of June 30, 2025, it was probable that the Series A Preferred Stock may become redeemable at the holder’s option on or after March 29, 2027.

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

As of March 31, 2025, Series A Preferred Stock had a carrying value and redemption value of $386.7 million.

As of June 30, 2025, Series A Preferred Stock had a carrying value and redemption value of $393.4 million.

Historical Cash Flows

Our consolidated cash flows from operating, investing and financing activities for the three months ended March 31, 2025 and 2024 were as follows:

$s in thousands Three Months Ended

March 31, 2025 Three Months Ended

March 31, 2024

Our consolidated cash flows from operating, investing and financing activities for the six months ended June 30, 2025 and 2024 were as follows:

$s in thousands Six Months Ended

June 30, 2025 Six Months Ended

June 30, 2024

Net cash used in operating activities $ (16,215) $ (25,558)

Net cash (used in) provided by investing activities (3,890) 4,448

Net cash used in financing activities (1,159) (896)

Net cash (used in) provided by financing activities (2,010) 6,718

Effects of exchange rate changes (95) —

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Operating Activities

Net cash used in operating activities was $17.7 million for the three months ended March 31, 2025, compared to Net cash used in operating activities of $22.8 million for the three months ended March 31, 2024.

Net cash used in operating activities reflects Net loss of $15.5 million for the three months ended March 31, 2025 compared to Net loss of $20.1 million for the three months ended March 31, 2024.

Net cash used in operating activities for the three months ended March 31, 2025 reflects add-backs to Net loss for non-cash charges totaling $4.2 million, primarily attributable to depreciation and amortization expense of $2.0 million and stock-based compensation expense of $2.0 million, net of changes in working capital.

Net cash used in operating activities for the three months ended March 31, 2024 reflects add-backs to Net loss for non-cash charges totaling $6.5 million, primarily attributable to stock-based compensation expense of $5.9 million and partially attributable to depreciation and amortization expense of $1.3 million, net of changes in working capital.

Net cash used in operating activities was $16.2 million for the six months ended June 30, 2025, compared to Net cash used in operating activities of $25.6 million for the six months ended June 30, 2024.

Net cash used in operating activities reflects Net loss of $15.2 million for the six months ended June 30, 2025 compared to Net loss of $30.1 million for the six months ended June 30, 2024.

Net cash used in operating activities for the six months ended June 30, 2025 reflects add-backs to Net loss for non-cash charges totaling $8.4 million, primarily attributable to depreciation and amortization expense of $6.0 million and stock-based compensation expense of $3.7 million, and partially offset by change in fair value of earnout consideration of $2.7 million net of changes in working capital.

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

Investing Activities

Net cash used in investing activities was $2.6 million for the three months ended March 31, 2025, compared to Net cash provided by investing activities of $2.8 million for the three months ended March 31, 2024.

Net cash used in investing activities for the three months ended March 31, 2025 reflects purchases of property, plant and equipment of $3.3 million, expenditures for capitalized software of $0.3 million and partially offset by sales of property, plant and equipment of $0.9 million.

Net cash provided by investing activities for the three months ended March 31, 2024 reflects proceeds from sales and maturities of marketable securities of $1.1 million partially offset by purchases of property, plant and equipment of $1.0 million.

Net cash used in investing activities was $3.9 million for the six months ended June 30, 2025, compared to Net cash provided by investing activities of $4.4 million for the six months ended June 30, 2024.

Net cash used in investing activities for the six months ended June 30, 2025 reflects purchases of property, plant and equipment of $4.2 million, expenditures for capitalized software of $0.6 million and partially offset by sales of property, plant and equipment of $1.0 million.

Net cash provided by investing activities for the six months ended June 30, 2024 reflects the collection of note receivable of $3.0 million, cash acquired through FMS Acquisition of $2.6 million, proceeds from sales, and maturities of marketable securities of $1.1 million partially offset by purchases of property, plant and equipment of $1.9 million.

Financing Activities

Net cash used in financing activities was $1.2 million for the three months ended March 31, 2025, compared to Net cash used in financing activities of $0.9 million for the three months ended March 31, 2024.

Net cash used in financing activities for the three months ended March 31, 2025 primarily reflects repayments on debt of $0.8 million and restricted stock units settled in cash of $0.3 million.

Net cash used in financing activities for the three months ended March 31, 2024 primarily reflects repayments of debt of $0.7 million.

Net cash used in financing activities was $2.0 million for the six months ended June 30, 2025, compared to Net cash provided by financing activities of $6.7 million for the six months ended June 30, 2024.

Net cash used in financing activities for the six months ended June 30, 2025 primarily reflects repayments on debt of $1.6 million and restricted stock units settled in cash of $0.4 million.

Net cash provided by financing activities for the six months ended June 30, 2024 primarily reflects proceeds from issuance of Common Stock in the registered direct offering of $9.2 million, partially offset by repayments of debt of $1.5 million.

Contractual Obligations

On March 18, 2025, the Company entered into a sales agreement (“2025 ATM Agreement”) under which we may offer and sell, from time to time, shares of our Common Stock having an aggregate offering price of up to $100.0 million in negotiated transactions that are deemed to be an “at the market offering.” As of May 5, 2025, $100.0 million remains available for potential future sales under the 2025 ATM Agreement, which may be utilized for future financings under our effective shelf registration statement.

On March 18, 2025, the Company entered into a sales agreement (“2025 ATM Agreement”) under which we may offer and sell, from time to time, shares of our Common Stock having an aggregate offering price of up to $100.0 million in negotiated transactions that are deemed to be an “at the market offering.” As of August 4, 2025, $100.0 million remains available for potential future sales under the 2025 ATM Agreement, which may be utilized for future financings under our effective shelf registration statement.

Refer to “ Note 18 – Stockholders’ Deficit ” of the Notes to Consolidated Financial Statements included in this Quarterly Report for additional information.

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

The following table summarizes our contractual obligations as of March 31, 2025:

The following table summarizes our contractual obligations as of June 30, 2025:

Payments Due by Period

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If the aircraft are not sold to a third party and MAB’s subsidiary has not otherwise entered into an operating lease with a third party for the aircraft, then the Company must pay MAB’s subsidiary $15.0 million.

As of May 30, 2025, the Company has initiated the sales process and continues the return to service work on the remaining Spanish Scoopers.

As of the quarter ended June 30, 2025, no sale has been completed, and the process remains ongoing.

Off-Balance Sheet Arrangements

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

As of March 31, 2025 and December 31, 2024, we did not have any other relationships with special purpose or variable interest entities which have been established for the purpose of facilitating off-balance sheet arrangement, which have not been consolidated in the consolidated financial statements of the Company.

As of June 30, 2025 and December 31, 2024, we did not have any other relationships with special purpose or variable interest entities which have been established for the purpose of facilitating off-balance sheet arrangement, which have not been consolidated in the consolidated financial statements of the Company.

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

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The Omnibus Plan expires on January 23, 2033 and authorizes 17,078,863 shares of Common Stock for grant during the life of the Omnibus Plan.

As of March 31, 2025, 9,289,249 shares of Common Stock remain available under the Omnibus Plan.

As of March 31, 2025, the Company has granted participants RSUs under the Omnibus Plan.

As of June 30, 2025, 9,365,896 shares of Common Stock remain available under the Omnibus Plan.

As of June 30, 2025, the Company has granted participants RSUs under the Omnibus Plan.

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

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

No goodwill impairment charges were recorded for the three months ended March 31, 2025 or 2024.

As of June 30 2025, as a result of revised downward forecasts and updated expectations regarding the FMS reporting unit’s business performance, we noted that there were indicators of a possible impairment loss.

Accordingly, we performed an interim quantitative impairment assessment related to the aforementioned triggering event noted on the reporting unit.

The fair value of the reporting unit was determined using a weighted average of the income approach and market approach.

The Company’s interim test results as of June 30, 2025 indicated that the fair values of the reporting unit exceeded the carrying value and thus, no impairment of goodwill existed.

No goodwill impairment charges were recorded for the three and six months ended June 30, 2025 or 2024.

Long-Lived Assets

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Cost Method Investments

We hold equity securities without a readily determinable fair value, which are only adjusted for observable price changes in orderly transactions for the same or similar equity securities or any impairment, totaling $5.0 million as of March 31, 2025 and December 31, 2024.

Variable Interest Entities

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

For the three months ended March 31, 2025 and 2024, Northern Fire Management Services, LLC, a VIE of which the Company was identified as the primary beneficiary, is consolidated into our financial statements.

For the three and six months ended June 30, 2025 and 2024, Northern Fire Management Services, LLC, a VIE of which the Company was identified as the primary beneficiary, is consolidated into our financial statements.

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

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

Refer to “ Note 2 – Summary of Significant Accounting Policies ” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for the recent accounting pronouncements adopted and the recent accounting pronouncements not yet adopted for the three months ended March 31, 2025 and the year ended December 31, 2024.

Refer to “ Note 2 – Summary of Significant Accounting Policies ” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for the recent accounting pronouncements adopted and the recent accounting pronouncements not yet adopted for the three and six months ended June 30, 2025 and the year ended December 31, 2024.

We will remain an “emerging growth company” under the JOBS Act until the earliest of (a) December 31, 2028, (b) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 billion, (c) the last date of our fiscal year in which we are deemed to be a “large accelerated filer” under the rules of the U.S.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis