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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-08 · 188 added, 101 removed, 400 unchanged (42% of the section changed)

1 unchanged sentence

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, 2026 and December 31, 2025, for the three months ended March 31, 2026 and 2025, 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, 2026 and December 31, 2025, for the three and six months ended June 30, 2026 and 2025, 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, 2025 and 2024, included in the Annual Report on Form 10-K (the “Form 10-K”).

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

We expect that our existing cash and cash equivalents as well as cash generated from our operations will be sufficient to meet our current working capital and capital expenditure requirements for a period of at least 12 months from the date of this Quarterly Report.

We expect that our existing cash and cash equivalents, available borrowing capacity, and cash generated from our operations will be sufficient to meet our current working capital and capital expenditure requirements for a period of at least 12 months from the date of this Quarterly Report.

The Reverse Recapitalization

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

Cost of revenues also includes lease expense for hangar facilities used to house and maintain aircraft supporting revenue-generating operations.

Selling, General and Administrative Expense

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These functions include costs for items such as salaries, benefits, stock-based compensation and other personnel-related costs, maintenance and supplies, professional fees for external legal, accounting, and other consulting services, insurance, intangible asset amortization and depreciation expense.

Selling, general and administrative expenses also include gains or losses on the disposal of fixed assets.

Selling, general and administrative expenses also include lease expense for corporate and administrative office space and gains or losses on the disposal of fixed assets.

Interest Expense

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RESULTS OF OPERATIONS

Comparison of the Three Months ended March 31, 2026 to the Three Months Ended March 31, 2025

The following table sets forth our Condensed Consolidated Statements of Operations information for the three months ended March 31, 2026 and 2025 and should be reviewed in conjunction with the financial statements and notes included elsewhere in this Quarterly Report.

For the three months ended March 31,

dollars in thousands 2026 2025 Period Over Period Change ($) Period Over Period Change (%)

Revenues $ 8,512 $ 15,646 $ (7,134) (46%)

Comparison of the Three Months ended June 30, 2026 to the Three Months Ended June 30, 2025

The following table sets forth our Condensed Consolidated Statements of Operations information for the three months ended June 30, 2026 and 2025 and should be reviewed in conjunction with the financial statements and notes included elsewhere in this Quarterly Report.

For the three months ended June 30,

dollars in thousands

Period Over Period Change ($)

Period Over Period Change (%)

Cost of revenues:

Flight operations

Maintenance 10,487 10,955 (468) (4%)

Total cost of revenues

Gross loss (8,536) (1,561) 6,975 447%

Selling, general and administrative expense

Interest expense

Other income 140 599 (459) (77%)

(Loss) income before income taxes

Income tax benefit (expense)

Net (loss) income

Revenues decreased by $0.3 million, or 1%, to $30.5 million for the three months ended June 30, 2026, from $30.8 million for the three months ended June 30, 2025.

Revenues by service offering for the three months ended June 30, 2026 and 2025 were as follows:

For the three months ended June 30,

dollars in thousands

Period Over Period Change ($)

Period Over Period Change (%)

Fire suppression

Aerial surveillance

Other services

Total revenues

Fire suppression revenue increased by $3.5 million, or 19%, to $21.5 million for the three months ended June 30, 2026, from $18.1 million for the three months ended June 30, 2025.

The increase was primarily driven by increased flight hours for our Super Scoopers for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Aerial surveillance revenue increased by $1.4 million, or 36%, to $5.5 million for the three months ended June 30, 2026, from $4.0 million for the three months ended June 30, 2025.

The increase was primarily driven by increased flight hours for our surveillance aircraft for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Maintenance repair revenue decreased by $1.9 million, or 35%, to $3.5 million for the three months ended June 30, 2026, from $5.4 million for the three months ended June 30, 2025.

The decrease was primarily driven by a decrease in the return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

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

Other services revenue decreased by $3.3 million, or 99%, to $21,000 for the three months ended June 30, 2026, from $3.3 million for the three months ended June 30, 2025.

The decrease was primarily due to non-recurring third-party training and flight operations services utilizing our aircraft for the three months ended June 30, 2025 that did not occur for the three months ended June 30, 2026.

Revenues by geographic area for the three months ended June 30, 2026 and 2025 were as follows:

For the three months ended June 30,

dollars in thousands

Period Over Period Change ($)

Period Over Period Change (%)

United States

Total revenues

United States revenue increased by $4.0 million, or 16%, to $29.7 million for the three months ended June 30, 2026, from $25.7 million for the three months ended June 30, 2025.

The increase was primarily driven by increased flight hours for our Super Scoopers and surveillance aircraft for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Spain revenue decreased by $4.3 million, or 84%, to $0.8 million for the three months ended June 30, 2026, from $5.1 million for the three months ended June 30, 2025.

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

Cost of Revenues

Total cost of revenues increased by $0.5 million, or 3%, to $19.2 million for the three months ended June 30, 2026, from $18.7 million for the three months ended June 30, 2025.

Flight Operations

Flight operations expenses increased by $2.2 million, or 28%, to $10.1 million for the three months ended June 30, 2026, from $7.9 million for the three months ended June 30, 2025.

The increase reflects an increase in aircraft depreciation and fuel expense of $1.4 million and personnel costs necessary to support operational growth of $1.0 million.

The increase was partially offset by a decrease in aircraft lease expense of $0.2 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Maintenance expenses decreased by $1.7 million, or 16%, to $9.1 million for the three months ended June 30, 2026, from $10.8 million for the three months ended June 30, 2025.

The decrease was primarily driven by a decrease in return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement of $2.6 million.

The decrease was partially offset by an increase in hangar lease expense of $0.7 million and an increase in depreciation expense of $0.2 million, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Selling, General and Administrative Expense

Selling, general and administrative expense decreased by $1.2 million, or 19%, to $5.3 million for the three months ended June 30, 2026, from $6.5 million for the three months ended June 30, 2025.

The decrease was primarily attributable to a change in the fair value of the Warrants of $3.7 million.

In addition, there was a decrease in stock-based compensation of $2.4 million, mainly attributable to adjustments in connection with a separation agreement with a former executive.

Refer to “Note 19 – Stockholders’ Deficit” .

The decrease was partially offset by a decrease in the fair value of the contingent consideration of $2.6 million in the three months ended June 30, 2025 that did not occur in the three months ended June 30, 2026, an increase in higher workforce costs of $1.5 million and an increase in non-recurring deal and organizational costs of $0.8 million, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Interest Expense

Interest expense increased by $0.9 million, or 15%, to $6.6 million for the three months ended June 30, 2026, from $5.7 million for the three months ended June 30, 2025.

The increase was driven by increased borrowings offset by favorable changes in financing terms related to the October 2025 debt refinancing.

Other income decreased by $0.6 million, or 87%, to $0.1 million for the three months ended June 30, 2026, from $0.7 million for the three months ended June 30, 2025.

The decrease was partially driven by a decrease in dividend income on cash equivalents of $0.3 million and a decrease in foreign currency gains of $0.3 million, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Income Tax Benefit (Expense)

Income tax expense decreased by $0.2 million, or 103%, to an income tax benefit of $5,000 for the three months ended June 30, 2026, from an income tax expense of $0.2 million for the three months ended June 30, 2025.

The decrease was driven by a decrease in the state taxes for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Comparison of the Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025

The following table sets forth our unaudited condensed consolidated statements of operations information for the six months ended June 30, 2026 and 2025 and should be reviewed in conjunction with the financial statements and notes included elsewhere in this Quarterly Report.

For the six months ended June 30,

dollars in thousands

Period Over Period Change ($)

Period Over Period Change (%)

Cost of revenues:

Flight operations

Total cost of revenues

Selling, general and administrative expense

Interest expense

Loss before income taxes

Income tax expense

Net loss $ (31,304) $ (15,538) $ 15,766 101%

Revenues decreased by $7.1 million, or 46%, to $8.5 million for the three months ended March 31, 2026, from $15.6 million for the three months ended March 31, 2025.

Revenues by service offering for the three months ended March 31, 2026 and 2025 were as follows:

For the three months ended March 31,

dollars in thousands 2026 2025 Period Over Period Change ($) Period Over Period Change (%)

Revenues decreased by $7.4 million, or 16%, to $39.0 million for the six months ended June 30, 2026, from $46.4 million for the six months ended June 30, 2025.

Revenues by service offering for the six months ended June 30, 2026 and 2025 were as follows:

For the six months ended June 30,

dollars in thousands

Period Over Period Change ($)

Period Over Period Change (%)

Fire suppression

Aerial surveillance

MRO 4,648 7,890 $ (3,242) (41)%

Other services

Total revenues

Fire suppression revenue decreased by $3.5 million, or 61%, to $2.3 million for the three months ended March 31, 2026, from $5.8 million for the three months ended March 31, 2025.

The decrease was primarily driven by decreased flight hours for our Super Scoopers for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Aerial surveillance decreased by $0.1 million, or 8%, to $1.6 million for the three months ended March 31, 2026, from $1.7 million for the three months ended March 31, 2025.

The decrease was primarily driven by unfavorable rate decreases for our surveillance aircraft for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Maintenance repair decreased by $3.2 million, or 41% to $4.6 million for the three months ended March 31, 2026 from $7.9 million for the three months ended March 31, 2025.

The decrease was primarily driven by a decrease in the return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Fire suppression revenue decreased by $0.1 million, to $23.8 million for the six months ended June 30, 2026, from $23.9 million for the six months ended June 30, 2025.

The decrease was driven by normal fluctuations in fire suppression revenue.

Aerial surveillance revenue increased by $1.3 million, or 23%, to $7.0 million for the six months ended June 30, 2026, from $5.7 million for the six months ended June 30, 2025.

The increase was primarily driven by increased flight hours for our surveillance aircraft for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Maintenance repair revenue decreased by $5.1 million, or 39%, to $8.1 million for the six months ended June 30, 2026, compared to $13.2 million for the six months ended June 30, 2025.

This amount is primarily 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 Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report for additional details.

Other services revenue decreased by $0.2 million, or 93%, to $18,000 for the three months ended March 31, 2026, from $0.3 million for the three months ended March 31, 2025.

The decrease was primarily due to third-party training and flight operations services utilizing our aircraft for the three months ended March 31, 2025 that did not occur for the three months ended March 31, 2026.

Revenues by geographic area for the three months ended March 31, 2026 and 2025 were as follows:

For the three months ended March 31,

dollars in thousands 2026 2025 Period Over Period Change ($) Period Over Period Change (%)

Other services revenue decreased by $3.5 million, or 99%, to $39,000 for the six months ended June 30, 2026, from $3.6 million for the six months ended June 30, 2025.

The decrease was primarily due to non-recurring third-party training and flight operations services utilizing our aircraft for the six months ended June 30, 2025 that did not occur for the six months ended June 30, 2026.

Revenues by geographic area for the six months ended June 30, 2026 and 2025 were as follows:

For the six months ended June 30,

dollars in thousands

Period Over Period Change ($)

Period Over Period Change (%)

United States

Spain 1,693 5,909 (4,216) (71)%

Total revenues

United States revenue decreased by $2.9 million, or 30%, to $6.8 million for the three months ended March 31, 2026, from $9.7 million for the three months ended March 31, 2025.

The decrease was primarily driven by decreased flight hours for our Super Scoopers for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Spain revenue decreased by $4.2 million, or 71%, to $1.7 million for the three months ended March 31, 2026, from $5.9 million for the three months ended March 31, 2025.

The decrease was primarily driven by a decrease in the return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

United States revenue increased by $1.1 million, or 3%, to $36.5 million for the six months ended June 30, 2026, from $35.4 million for the six months ended June 30, 2025.

The increase was primarily driven by increased flight hours for our Super Scoopers and surveillance aircraft for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Spain revenue decreased by $8.5 million, or 77%, to $2.5 million for the six months ended June 30, 2026, from $11.0 million for the six months ended June 30, 2025.

The decrease 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 Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report for additional details.

Cost of Revenues

Total cost of revenues decreased by $0.2 million, or 1%, to $17.0 million for the three months ended March 31, 2026, from $17.2 million for the three months ended March 31, 2025.

Total cost of revenues increased by $0.3 million, or 1%, to $36.2 million for the six months ended June 30, 2026, from $35.9 million for the six months ended June 30, 2025.

Flight Operations

Flight operations expenses increased by $0.3 million, or 5%, to $6.6 million for the three months ended March 31, 2026, from $6.3 million for the three months ended March 31, 2025.

The increase reflects an increase in personnel costs necessary to support operational growth of $0.7 million.

The increase was partially offset by a decrease in aircraft lease expense of $0.4 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Maintenance expenses decreased by $0.5 million, or 4%, to $10.5 million for the three months ended March 31, 2026, from $11.0 million for the three months ended March 31, 2025.

Flight operations expenses increased by $2.5 million, or 18%, to $16.6 million for the six months ended June 30, 2026, from $14.1 million for the six months ended June 30, 2025.

The increase reflects an increase in personnel costs necessary to support operational growth of $2.1 million and aircraft depreciation of $1.0 million.

The increase was partially offset by a decrease in aircraft lease expense of $0.6 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Maintenance expenses decreased by $2.2 million, or 10%, to $19.6 million for the six months ended June 30, 2026, from $21.8 million for the six months ended June 30, 2025.

The decrease was primarily driven by a decrease in return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement of $4.2 million.

The decrease was partially offset by an increase in hangar lease expense of $0.7 million and an increase in depreciation expense of $0.5 million, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

The decrease was partially offset by an increase in hangar lease expense of $1.5 million and an increase in depreciation expense of $0.4 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Selling, General and Administrative Expense

Selling, general and administrative expense increased by $8.1 million, or 95%, to $16.7 million for the three months ended March 31, 2026, from $8.6 million for the three months ended March 31, 2025.

The increase was primarily attributable to a change in the fair value of the Warrants, which resulted in an unfavorable period-over-period variance of $4.8 million, an increase in higher workforce costs of $2.1 million and an increase in non-recurring deal and organizational costs of $1.2 million, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Selling, general and administrative expense increased by $6.9 million, or 46%, to $22.0 million for the six months ended June 30, 2026, from $15.1 million for the six months ended June 30, 2025.

The increase was primarily attributable to an increase in higher workforce costs of $2.4 million, a decrease in the fair value of the contingent consideration of $2.7 million in the six months ended June 30, 2025 that did not occur in the six months ended June 30, 2026, a change in the fair value of the Warrants of $1.1 million, and an increase in non-recurring deal and organizational costs of $0.4 million.

The increase is partially offset by a decrease in stock-based compensation of $2.6 million mainly attributable to adjustments in connection with a separation agreement with a former executive (refer to “ Note 19 – Stockholders’ Deficit ” for additional details), for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Interest Expense

Interest expense increased by $0.4 million, or 7%, to $6.2 million for the three months ended March 31, 2026, from $5.7 million for the three months ended March 31, 2025.

Interest expense increased by $1.3 million, or 11%, to $12.8 million for the six months ended June 30, 2026, from $11.5 million for the six months ended June 30, 2025.

The increase was driven by increased borrowings offset by favorable changes in financing terms related to the October 2025 debt refinancing.

Other income decreased by $0.5 million, or 77%, to $0.1 million for the three months ended March 31, 2026, from $0.6 million for the three months ended March 31, 2025.

The decrease was primarily driven by a decrease in dividend income on cash equivalents of $0.3 million, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Other income decreased by $1.1 million, or 82%, to $0.2 million for the six months ended June 30, 2026, from $1.3 million for the six months ended June 30, 2025.

The decrease was partially driven by a decrease in dividend income on cash equivalents of $0.6 million and a decrease in foreign currency gains of $0.5 million, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Income Tax Expense

Income tax expense decreased by $0.3 million, or 89%, to $28,000 for the three months ended March 31, 2026, from $0.3 million for the three months ended March 31, 2025.

The decrease was driven by a decrease in the state taxes for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Income tax expense decreased by $0.4 million, or 95%, to $23,000 for the six months ended June 30, 2026, from $0.4 million for the six months ended June 30, 2025.

The decrease was driven by a decrease in the state taxes for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

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, 2026 and 2025 is as follows:

For the three months ended March 31,

dollars in thousands 2026 2025 Period Over Period Change ($) Period Over Period Change (%)

Net loss $ (31,304) $ (15,538) $ (15,766) 101%

The reconciliation of Net (loss) income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA for the three months ended June 30, 2026 and 2025 is as follows:

For the three months ended June 30,

dollars in thousands

Period Over Period Change ($)

Period Over Period Change (%)

Net (loss) income

Income tax (benefit) expense

Depreciation and amortization

Interest expense

Stock-based compensation 1

Business development & integration expenses 2

Change in fair value of earnout consideration 3

Change in fair value of Warrants 4

Offering costs 5

Non-recurring executive transition costs 6

Adjusted EBITDA

Net (loss) income margin 7

Adjusted EBITDA margin 7

1 Represents non-cash stock-based compensation expense associated with employee and non-employee equity and liability classified 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 Represents expenses associated with the build out and transition of the executive leadership team.

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

The reconciliation of Net loss, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA for the six months ended June 30, 2026 and 2025 is as follows:

For the six months ended June 30,

dollars in thousands

Period Over Period Change ($)

Period Over Period Change (%)

Income tax expense

1 unchanged sentence

Interest expense

EBITDA (23,076) (7,572) (15,504) 205%

Stock-based compensation 1

2,432 1,991 441 22%

Business development & integration expenses 2

804 232 572 247%

Change in fair value of earnout consideration 3

(30) (152) 122 80%

Change in fair value of Warrants 4

5,063 266 4,797 1803%

Offering costs 5

42 158 (116) (73%)

Non-recurring executive transition costs 6

284 — 284 100%

Adjusted EBITDA

Net loss margin 7

(368 %) (99 %)

Adjusted EBITDA margin 7

(170 %) (32 %)

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

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LIQUIDITY AND CAPITAL RESOURCES

For the three months ended March 31, 2026, the Company had net loss of $31.3 million and cash flow used in operating activities of $21.1 million.

In addition, as of March 31, 2026, the Company had unrestricted cash of $9.0 million.

On March 18, 2025, the Company entered into a sales agreement (“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 by any method permitted by law and deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act, including sales made directly on or through the Nasdaq Global Market, or any other existing trading market for such shares or in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices by any method permitted by law and deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act, including sales made directly on or through the Nasdaq Global Market, or any other existing trading market for such shares or in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices.

As of May 4, 2026, $100.0 million remains available for potential future sales under the ATM Agreement, which may be utilized for future financings under our effective shelf registration statement.

For the three and six months ended June 30, 2026, the Company had net loss of $0.5 million and $31.8 million, respectively.

For the six months ended June 30, 2026, the Company had cash flow used in operating activities of $36.8 million.

In addition, as of June 30, 2026, the Company had unrestricted cash of $7.2 million.

As of August 3, 2026, $100.0 million remains available for potential future sales under the ATM Agreement, which may be utilized for future financings under our effective shelf registration statement.

Refer to “Note 19 – Stockholders’ Deficit” of the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Cash and Marketable Securities

As of March 31, 2026, our principal sources of liquidity were cash and cash equivalents of $9.0 million which were held for working capital purposes.

As of June 30, 2026, our principal sources of liquidity were cash and cash equivalents of $7.2 million which were held for working capital purposes.

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

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

On March 31, 2026, the closing price of our Common Stock was $1.98 per share.

On June 30, 2026, the closing price of our Common Stock was $1.92 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, 2026, 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, 2026, 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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Management believes the transaction provides sufficient liquidity to fund near‑term operating needs and supports the Company’s long‑term growth plan.

As of March 31, 2026, the Company had drawn $210.0 million on the Initial Term Loans, $10.3 million under the DDTL, and $6.0 million under the Revolver, with remaining availability of $89.7 million on the DDTL and $15.5 million on the Revolver.

As of June 30, 2026, the Company had drawn $210.0 million on the Initial Term Loans, $24.3 million under the DDTL, and $10.0 million under the Revolver, with remaining availability of $75.7 million on the DDTL and $11.5 million on the Revolver.

Credit Agreement Overview

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• Minimum Operating Cash Flow (as defined in the agreement) of at least $30.0 million.

The Company was in compliance with all covenants under the Credit Agreement as of March 31, 2026.

The Company was in compliance with all financial covenants under the Credit Agreement as of June 30, 2026.

The Credit Agreement consists of the following three instruments:

7 unchanged sentences

Revolving loans bear interest at the same rate options as the Initial Term Loans.

As of March 31, 2026, the Company had drawn $6.0 million for working capital needs with $15.5 million remaining under the facility.

As of June 30, 2026, the Company had drawn $10.0 million for working capital needs with $11.5 million remaining under the facility.

The DDTL provides up to $100.0 million in additional term loan commitments, available through October 28, 2027.

2 unchanged sentences

Borrowings under the DDTL bear interest at the same rate options applicable to the Initial Term Loans.

As of March 31, 2026, the Company had drawn $10.3 million, with $89.7 million remaining available under the facility.

As of June 30, 2026, the Company had drawn $24.3 million, with $75.7 million remaining available under the facility.

Other Indebtedness

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For additional information regarding the terms and conditions of the Series A Preferred Stock, see “ Note 18 – Mezzanine Equity ” for additional details.

As of March 31, 2026, it was probable that the Series A Preferred Stock may become redeemable on April 25, 2032.

As of March 31, 2026, the Series A Preferred Stock had both a carrying value and redemption value of $414.3 million.

As of June 30, 2026, it was probable that the Series A Preferred Stock may become redeemable on April 25, 2032.

As of June 30, 2026, the Series A Preferred Stock had both a carrying value and redemption value of $421.4 million.

Historical Cash Flows

Our consolidated cash flows from operating, investing and financing activities for the three months ended March 31, 2026 and 2025 were as follows:

For the three months ended March 31,

Our consolidated cash flows from operating, investing and financing activities for the six months ended June 30, 2026 and 2025 were as follows:

For the six months ended June 30,

dollars in thousands

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Operating Activities

Net cash used in operating activities was $21.1 million for the three months ended March 31, 2026, compared to Net cash used in operating activities of $17.7 million for the three months ended March 31, 2025.

Net cash used in operating activities reflects Net loss of $31.3 million for the three months ended March 31, 2026 compared to Net loss of $15.5 million for the three months ended March 31, 2025.

Net cash used in operating activities for the three months ended March 31, 2026 reflects add-backs to Net loss for non-cash charges totaling $10.1 million, primarily attributable to a change in fair value of warrants of $5.1 million, stock-based compensation expense of $2.4 million and depreciation and amortization expense of $2.1 million net of changes in working capital.

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 was $36.8 million for the six months ended June 30, 2026, compared to Net cash used in operating activities of $16.2 million for the six months ended June 30, 2025.

Net cash used in operating activities reflects Net loss of $31.8 million for the six months ended June 30, 2026 compared to Net loss of $15.2 million for the six months ended June 30, 2025.

Net cash used in operating activities for the six months ended June 30, 2026 reflects add-backs to Net loss for non-cash charges totaling $11.9 million, primarily attributable to depreciation and amortization expense of $6.9 million, a change in fair value of warrants of $2.1 million, stock-based compensation expense of $1.8 million, and amortization of debt issuance costs and revolver asset of $1.1 million, net of changes in working capital.

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.

Investing Activities

Net cash used in investing activities was $6.0 million for the three months ended March 31, 2026, compared to Net cash used in investing activities of $2.6 million for the three months ended March 31, 2025.

Net cash used in investing activities for the three months ended March 31, 2026 reflects purchases of property, plant and equipment of $5.7 million, which is primarily comprised of aircraft purchases and aircraft improvements and capitalized costs related to IPR&D of $0.3 million.

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, capitalized costs related to IPR&D of $0.3 million and partially offset by sales of property, plant and equipment of $0.9 million.

Net cash used in investing activities was $9.2 million for the six months ended June 30, 2026, compared to Net cash used in investing activities of $3.9 million for the six months ended June 30, 2025.

Net cash used in investing activities for the six months ended June 30, 2026 reflects purchases of property, plant and equipment of $8.5 million, which is primarily comprised of aircraft purchases and aircraft improvements, and capitalized costs related to IPR&D of $0.7 million.

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, capitalized costs related to IPR&D of $0.6 million and partially offset by sales of property, plant and equipment of $1.0 million.

Financing Activities

Net cash provided by financing activities was $4.8 million for the three months ended March 31, 2026, compared to Net cash used in financing activities of $1.2 million for the three months ended March 31, 2025.

Net cash provided by financing activities for the three months ended March 31, 2026 primarily reflects drawdown of the Revolver of $6.0 million and partially offset by repayments on debt of $0.7 million and cash paid for taxes related to net share settlement of equity awards of $0.5 million.

Net cash used in financing activities for the three months ended March 31, 2025 primarily reflects repayments of debt of $0.8 million and cash paid for taxes related to net share settlement of equity awards of $0.3 million.

Net cash provided by financing activities was $22.0 million for the six months ended June 30, 2026, compared to Net cash used in financing activities of $2.0 million for the six months ended June 30, 2025.

Net cash provided by financing activities for the six months ended June 30, 2026 primarily reflects a drawdown of the DDTL of $14.0 million and drawdowns of the Revolver totaling $10.0 million, partially offset by repayments on debt of $1.5 million.

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

Contractual Obligations

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

The following table summarizes our contractual obligations as of March 31, 2026:

The following table summarizes our contractual obligations as of June 30, 2026:

Payments Due by Period

dollars in thousands Total Current Noncurrent

dollars in thousands

Lease obligations

Debt obligations

Total $ 261,122 $ 7,863 $ 253,259

On November 17, 2023, the Company entered into a series of agreements with MAB and its subsidiary designed to facilitate the purchase and return-to-service of four Spanish Scoopers originally awarded to the Company in September 2023 via a public tender process from the Government of Spain.

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On December 23, 2025, we purchased two of the Spanish Scoopers from MAB for an aggregate purchase price of $50.0 million, allocating $25.0 million per aircraft.

Accordingly, no liability has been recorded in the consolidated financial statements as of March 31, 2026.

Accordingly, no liability has been recorded in the consolidated financial statements as of June 30, 2026.

The Company will continue to monitor the situation and assess the need for recognition or further disclosure in future periods.

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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, 2026 and December 31, 2025, 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, 2026 and December 31, 2025, 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 Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report for additional information.

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The Omnibus Plan expires on January 23, 2033.

As of March 31, 2026, the Omnibus Plan authorized an aggregate of 18,196,755 shares of Common Stock for issuance, of which 15,099,137 shares are currently registered for issuance.

As of March 31, 2026, 6,761,008 shares of Common Stock remain available under the Omnibus Plan, of which, 3,663,388 shares of Common Stock are currently registered for issuance.

As of March 31, 2026, the Company has granted participants RSUs under the Omnibus Plan.

As of June 30, 2026, the Omnibus Plan authorized an aggregate of 18,196,755 shares of Common Stock for issuance.

As of June 30, 2026, 6,429,306 shares of Common Stock remain available under the Omnibus Plan.

As of June 30, 2026, 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, 2025 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, 2026 or 2025.

No goodwill impairment charges were recorded for the three and six months ended June 30, 2026 or 2025.

Long-Lived Assets

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Estimated useful life

Aircraft, engines and rotable parts 1,500 –6,000 flight hours

Vehicles and equipment 3 – 5 years

Buildings 50 years

Leasehold improvements 10 years

Aircraft, engines and rotable parts

1,500 –6,000 flight hours

Vehicles and equipment

Leasehold improvements

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

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 $5.5 million as of March 31, 2026 and December 31, 2025.

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, 2026 and 2025, 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, 2026 and 2025, 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 Unaudited 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 Unaudited 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, 2026 and the year ended December 31, 2025.

Refer to “ Note 2 – Summary of Significant Accounting Policies ” of the Notes to Unaudited 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, 2026 and the year ended December 31, 2025.

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.

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

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

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

Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.

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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