10-Q

Large accelerated filer

Accelerated filer

Non-accelerated
filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM

10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission file number:

001-41603

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Delaware		88-3599336
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

90 Aviation Lane Belgrade, MT		59714
(Address of Principal Executive Offices)		(Zip code)

(406)

813-0079

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	BAER	The Nasdaq Stock Market LLC
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share	BAERW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act). Yes ☐ No ☒

As of May 10, 2023, there were 43,769,290 shares of the registrant’s common stock, par value $0.0001 per share, issued and outstanding.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

BRIDGER AEROSPACE GROUP HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in U.S. dollars)


	As of March 31, 2023			As of December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	2,290,244		$	30,162,475
Restricted cash		12,398,725			12,297,151
Investments in marketable securities		30,322,527			54,980,156
Accounts receivable 1		367,336			28,902
Aircraft support parts		434,894			1,761,270
Prepaid expenses and other current assets		3,076,473			1,835,032
Deferred offering costs		—			5,800,144

Total current assets		48,890,199			106,865,130
Property, plant and equipment, net		203,422,599			192,091,413
Intangible assets, net		181,783			208,196
Goodwill		2,457,937			2,457,937
Other noncurrent assets		6,739,998			4,356,225

Total assets	$	261,692,516		$	305,978,901

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	3,503,466		$	3,170,354
Accrued expenses and other current liabilities		13,063,960			18,669,572
Operating right-of-use current liability		22,126			21,484
Current portion of long-term debt, net of debt issuance costs		2,446,320			2,445,594

Total current liabilities		19,035,872			24,307,004
Long-term accrued expenses and other noncurrent liabilities		5,804,275			45,659
Operating right-of-use noncurrent liability		745,989			754,673
Long-term debt, net of debt issuance costs 2		205,241,626			205,471,958

Total liabilities	$	230,827,762		$	230,579,294

COMMITMENTS AND CONTINGENCIES
MEZZANINE EQUITY
Series A Preferred Stock, $0.0001 par value; 315,789.473684 shares authorized, issued and outstanding at March 31, 2023		336,933,387			—
Legacy Bridger Series C Preferred Shares, $0.001 par value; 315,789.473684 shares authorized, issued and outstanding at December 31, 2022		—			489,021,545
STOCKHOLDERS’ DEFICIT
Common Stock, $0.0001 par value; 1,000,000,000 shares authorized; 43,769,290 shares issued and outstanding at March 31, 2023; 39,081,744 shares issued and outstanding at December 31, 2022		4,832			3,908
Additional paid-in capital		73,406,859			—
Accumulated deficit		(381,032,705	)		(415,304,343	)
Accumulated other comprehensive income		1,552,381			1,678,497

Total stockholders’ deficit		(306,068,633	)		(413,621,938	)

Total liabilities, mezzanine equity and stockholders’ deficit	$	261,692,516		$	305,978,901

1	Includes related party accounts receivable of $321,244 as of March 31, 2023.

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

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

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BRIDGER AEROSPACE GROUP HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STOCKHOLDERS’ DEFICIT

(All Amounts in U.S. dollars, except share amounts)


	Legacy Bridger Series A Preferred Shares				Legacy Bridger Series B Preferred Shares				Legacy Bridger Series C Preferred Shares / Series A Preferred Stock					Common Stock				Additional Paid-in Capital			Accumulated Deficit			Accumul ated Other Compreh ensive Income			Total Stockholders’ Deficit
	Share		Value		Share		Value		Share		Value			Share		Value		Additional Paid-in Capital			Accumulated Deficit			Accumul ated Other Compreh ensive Income			Total Stockholders’ Deficit

Balance at December 31, 2021		10,500,000	$	1,050		60,000,000	$	6,000		—	$	—			39,081,744	$	3,908	$	—		$	(84,843,803	)	$	24,706		$	(84,815,189	)
Liquidation preference on Legacy Bridger Series A Preferred Shares		—		—		—		—		—		—			—		—		—			(4,339,767	)		—			(4,339,767	)
Unrealized gain on derivative instruments		—		—		—		—		—		—			—		—		—			—			674,381			674,381
Foreign currency translation adjustment		—		—		—		—		—		—			—		—		—			—			(287	)		(287	)
Stock based compensation attributable to Legacy Bridger holders prior to reverse recapitalization		—		—		—		—		—		—			—		—		—			2,558			—			2,558
Net loss		—		—		—		—		—		—			—		—		—			(14,873,009	)		—			(14,873,009	)

Balance at March 31, 2022		10,500,000	$	1,050		60,000,000	$	6,000		—	$	—			39,081,744	$	3,908	$	—		$	(104,054,021	)	$	698,800		$	(103,351,313	)

Balance at December 31, 2022		—		—		—		—		315,789	$	489,021,545			39,081,744	$	3,908	$	—		$	(415,304,343	)	$	1,678,497		$	(413,621,938	)
Unrealized loss on derivative instruments		—		—		—		—		—		—			—		—		—			—			(271,801	)		(271,801	)
Unrealized gain on investment in marketable securities		—		—		—		—		—		—			—		—		—			—			318,645			318,645
Reclassification of realized gains on investments in marketable securities to earnings		—		—		—		—		—		—			—		—		—			—			(173,152	)		(173,152	)
Foreign currency translation adjustment		—		—		—		—		—		—			—		—		—			—			192			192
Net loss		—		—		—		—		—		—			—		—		—			(44,684,938	)		—			(44,684,938	)
Effect of the Closing		—		—		—		—		—		(156,362,597	)		4,687,546		684		52,084,522			78,956,576			—			131,041,782
Series A Preferred Stock adjustment to maximum redemption value		—		—		—		—		—		4,274,439			—		—		(4,274,439	)		—			—			(4,274,439	)
Stock based compensation after reverse recapitalization		—		—		—		—		—		—			2,400,354		240		25,596,776			—			—			25,597,016

Balance at March 31, 2023		—	$	—	$	—	$	—		315,789	$	336,933,387			46,169,644	$	4,832	$	73,406,859		$	(381,032,705	)	$	1,552,381		$	(306,068,633	)

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

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BRIDGER AEROSPACE GROUP HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All Amounts in U.S. dollars)


	For the three months ended March 31,
	2023			2022
Cash Flows from Operating Activities:
Net loss	$	(44,684,938	)	$	(14,873,009	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
(Gain) loss on sale of fixed assets		(1,459	)		781,492
Depreciation and amortization		1,751,045			1,266,922
Stock based compensation expense		25,597,016			2,558
Change in fair value of the Warrants		(1,599,000	)		—
Change in fair value of freestanding derivative		50,559			—
Amortization of debt issuance costs		239,319			44,866
Interest accrued on Legacy Bridger Series B Preferred Shares		—			2,857,921
Change in fair value of Legacy Bridger Series C Preferred Shares		(345,585	)		—
Realized gain on investments in marketable securities		(258,618	)		—
Changes in operating assets and liabilities
Accounts receivable 1		(338,434	)		34,992
Aircraft support parts		1,326,376			138,699
Prepaid expense and other current and noncurrent assets		(3,897,015	)		556,422
Accounts payable, accrued expenses and other liabilities		(14,491,847	)		1,771,711

Net cash used in operating activities		(36,652,581	)		(7,417,426	)

Cash Flows from Investing Activities:
Investments in construction in progress – buildings		(1,045,600	)		(177,583	)
Proceeds from sales and maturities of marketable securities		25,061,740			—
Sale of property, plant and equipment		113,659			286,400
Purchases of property, plant and equipment		(11,170,664	)		(2,460,944	)

Net cash provided by (used in) investing activities		12,959,135			(2,352,127	)

Cash Flows from Financing Activities:
Payment of finance lease liability		(8,440	)		—
Proceeds from the Closing		3,193,536			—
Costs incurred related to the Closing		(6,793,574	)		—
Borrowings from various First Interstate Bank vehicle loans		—			63,070
Repayments on debt		(468,925	)		(477,671	)

Net cash used in financing activities		(4,077,403	)		(414,601	)

Effects of exchange rate changes		192			(287	)
Net change in cash, cash equivalents and restricted cash		(27,770,657	)		(10,184,441	)
Cash, cash equivalents and restricted cash – beginning of the period		42,459,626			17,261,132

Cash, cash equivalents and restricted cash – end of the period	$	14,688,969		$	7,076,691

Less: Restricted cash – end of the period		12,398,725			3,452,932

Cash and cash equivalents – end of the period	$	2,290,244		$	3,623,759

Supplemental disclosure of non-cash operating and financing activities
Assumption of Jack Creek liabilities	$	7,463,673		$	—
Recognition of warrant liabilities	$	5,863,000		$	—
Recognition of Deferred underwriting fee	$	1,500,000		$	—
Supplemental cash flow information
Interest paid 2	$	10,311,545		$	3,715,257
Fixed assets in accounts payable	$	1,468,890		$	2,640,384
Conversion of Promissory Note to Common Stock	$	897,400		$	—
Series A Preferred Stock – adjustment for deemed dividend upon Closing	$	48,300,000		$	—
Series A Preferred Stock – adjustment to eliminate 50% multiplier	$	156,362,597		$	—
Series A Preferred Stock - adjustment to maximum redemption value	$	4,274,439		$	—
Legacy Bridger Series A Preferred Shares – adjustment for redemption, extinguishment and accrued interest	$	—		$	4,339,767

1	Includes related party accounts receivable of $321,244 for the three months ended March 31, 2023.

2	Includes related party interest paid of approximately $ 575,000 for the 2022 taxable industrial revenue bond for the three months ended March 31, 2023.

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

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BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S. dollars, except as stated)

Note 1 – Organization and Basis of Presentation

Nature of Business

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

As of March 31, 2023, the Company owns

aircraft, including 5 Twin Commander surveillance platforms, 4 Quest Kodiaks, 6 Viking CL415EAFs, 2 Aurora eVOTL Skiron and 1 Pilatus PC-12.

Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). The unaudited condensed consolidated financial statements include the financial statements of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest.

Reverse Recapitalization

On January 24, 2023, (the “Closing Date”), Jack Creek Investment Corp (“JCIC”) completed the reverse recapitalization (the “Closing” and the
“Reverse Recapitalization”) with the Company’s predecessor, Bridger Aerospace Group Holdings, LLC and its subsidiaries (collectively, “Legacy Bridger”), which operated the majority of the historical business and was identified as the acquirer and predecessor upon the consummation of the transactions contemplated by the agreement and plan of merger (the “Transaction Agreements”) entered into on August 3, 2022. On the Closing Date, pursuant to the Transaction Agreements, JCIC and Legacy Bridger became wholly owned subsidiaries of a new public entity that was renamed Bridger Aerospace Group Holdings, Inc, and JCIC shareholders and Legacy Bridger equity holders converted their equity ownership in JCIC and Legacy Bridger, respectively, into equity ownership in Bridger.

Upon the consummation of the Reverse Recapitalization, Bridger issued Common Stock to the Legacy Bridger equity holders and Series A Preferred Stock (as defined below) as summarized below:

•

the surrender and exchange of all 606,061

Legacy Bridger incentive units (“Incentive Units”) into

583,308

shares of Bridger’s common stock, par value $0.0001, (“Common Stock”) at a deemed value of

$10.00 per share as adjusted by the per share

ommon

tock consideration of approximately 0.96246 (the “Exchange Ratio”), rounded down to the nearest share for each holder;

•

the direct or indirect surrender and exchange of the remaining 40,000,000 issued and outstanding shares of Legacy Bridger common shares (excluding Incentive Units) into 38,498,436 shares of

ommon

tock at a deemed value of $10.00 per share as adjusted by the Exchange Ratio, rounded down to the nearest share for each holder; and

•

the surrender and exchange of all 315,789.473684

issued and outstanding Series C preferred shares of Legacy Bridger (the “Legacy Bridger Series C Preferred Shares”), which were surrendered and exchanged on a one-to-one basis in connection with the Reverse Recapitalization into

315,789.473684

shares of preferred stock of Bridger that have the rights, powers, designations, preferences, and qualifications, limitations and restrictions set forth in Section 4.5 of the Amended and Restated Certificate of Incorporation (the “Series A Preferred Stock”). The Series A Preferred Stock are convertible at the election of the holders into shares of Common Stock, without the payment of additional consideration by the holders into such number of shares of Common Stock as determined by dividing the original issue price, plus accrued interest by a conversion price equal to $11 at the time of conversion.

Other related events occurred in connection with the Reverse Recapitalization, are summarized below:

•

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

•

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

•

during the period from the Closing until five years following the Closing, JCIC subjected

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

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BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S. dollars, except as stated)

Immediately after giving effect to the Transaction Agreements, the following were outstanding:

•

43,769,290

shares of Common Stock;

•

315,789.473684

shares of Bridger Series A Preferred Stock;

•

9,400,000

private placement warrants (“Private Placement Warrants”) to purchase shares of Common Stock at an exercise price of

$11.50 per share

;

•

17,250,000

public warrants (“Public Warrants”) to purchase shares of Common Stock at an exercise price of $

11.50 per

;

•

6,581,497

restricted stock units issued to the executives and senior management of the Company.

In connection with the Reverse Recapitalization, the Company paid transaction costs of $

10,302

thousand as of the Closing.

The transactions contemplated by the Transaction Agreements were accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, JCIC was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of Bridger represent a continuation of the financial statements of Legacy Bridger with the Reverse Recapitalization treated as the equivalent of Legacy Bridger issuing stock for the net assets of JCIC, accompanied by a recapitalization. The net assets of JCIC will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Reverse Recapitalization will be those of Legacy Bridger in future reports of Bridger.

Legacy Bridger has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

•

Legacy Bridger equity holders have a relative majority of the voting power of Bridger;

•

Bridger’s board of directors (the “Board”) has nine (9) members, and representatives or designees of the Legacy Bridger equity holders comprise the majority of the members of the Board;

•

Legacy Bridger’s senior management comprise the senior management roles and be responsible for the

day-to-day

operations of Bridger;

•

Bridger assumed Legacy Bridger’s name of business;

•

The strategy and operations of Bridger continue Legacy Bridger’s former strategy and operations; and

•

The Reverse Recapitalization created an operating public company, with management continuing to use Legacy Bridger operations to grow the business.

The Sponsor Earnout Shares are determined to be equity classified instruments of Bridger and the Public Warrants and Private Placement Warrants are determined to remain liability classified instruments upon the Closing.

In accordance with guidance applicable to these circumstances, the equity structure has been recast in all comparative periods up to the Closing to reflect the number of shares of Common Stock issued to Legacy Bridger’s stockholders in connection with the Reverse Recapitalization. As such, the shares and corresponding capital amounts and earnings per share related to Legacy Bridger’s common stock prior to the Reverse Recapitalization have been retroactively recasted as shares of Common Stock using the Exchange Ratio.

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

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BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S. dollars, except as stated)

Liquidity

The Company had $2,290 thousand and $30,162 thousand of cash and cash equivalents as of March 31, 2023 and December 31, 2022, respectively. The Company had $30,323 thousand and $54,980 thousand of investments in debt securities classified as

available-for-sale

with short-term maturities of less than one year and carried at fair value as of March 31, 2023 and December 31, 2022, respectively.

The Company has entered into various term loan agreements and other long-term debt to fund the purchase of aircraft, finance the construction of aircraft hangars and to supplement its cash balance. As of March 31, 2023, the Company has $2,446 thousand of current portion of long-term debt, net of debt issuance costs. As of March 31, 2023, future contractual payments related to the construction of the third hangar are $2,467 thousand for the next twelve months.

The Company believes it will be sufficiently funded for its short-term liquidity needs and the execution of its business plan for at least 12 months following the date at which the unaudited condensed consolidated financial statements were filed. As of April 30, 2023, the Company has cash and cash equivalents of

$3,721

thousand, restricted cash of

$12,437

thousand and investments in debt securities classified as available-for-sale of

$24,591

housand.

Note 2 - Summary of Significant Accounting Policies

Principles of Consolidation

The Company consolidates those entities in which it, through the existing owners, has control over significant operating, financial or investing decisions of the entity. All significant intercompany balances and transactions have been eliminated in consolidation.

Variable Interest Entities

The Company follows ASC

810-10-15

guidance with respect to accounting for variable interest entities (“VIE”). These entities do not have sufficient equity at risk to finance their activities without additional subordinated financial support from other parties or whose equity investors lack any of the characteristics of a controlling financial interest. A variable interest is an investment or other interest that will absorb portions of a VIE’s expected losses or receive portions of its expected returns and are contractual, ownership or pecuniary in nature and that change with changes in the fair value of the entity’s net assets. A reporting entity is the primary beneficiary of a VIE and must consolidate it when that party has a variable interest, or combination of variable interests, that provide it with a controlling financial interest. A party is deemed to have a controlling financial interest if it meets both of the power and loss/benefits criteria. The power criterion is the ability to direct the activities of the VIE that most significantly impact its economic performance. The losses/benefits criterion is the obligation to absorb losses from, or right to receive benefits from, the VIE that could potentially be significant to the VIE. 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.

Northern Fire Management Services, LLC (“NFMS, LLC”) is considered to be a VIE, as it lacks sufficient equity and is consolidated in the Company’s financial statements. For the three months ended March 31, 2022, Mountain Air, LLC (“MA, LLC”) is considered to be a VIE, as it lacks sufficient equity and is consolidated in the Company’s financial statements. For the three months ended March 31, 2023 and 2022 and the year ended December 31, 2022, NFMS, LLC held immaterial assets and liabilities in its financial statements. For the three months ended March 31, 2022, MA, LLC held immaterial assets and liabilities in its financial statements. For the three months ended March 31, 2023 and 2022 and the year ended December 31, 2022, the following entities were considered to be VIEs but were not consolidated in the unaudited condensed consolidated financial statements due to the lack of the power criterion or the losses/benefits criterion: AE

Côte-Nord

Canada

(“Côte-Nord”)

and Ensyn BioEnergy Canada, Inc (“EBC”).

Northern Fire Management Services, LLC:

The Company assisted in designing and organizing NFMS, LLC with a business purpose of employing Canadian aviation professionals for the Company. A master services agreement exists between NFMS, LLC, the Company, and Bridger Air Tanker, LLC, a wholly owned subsidiary of the Company, to transfer all annual expenses incurred to the Company in exchange for the Canadian employees to support the Company’s water scooper aircraft. NFMS, LLC is

% owned by a Canadian citizen, and

owned by Bridger Aerospace Group, LLC (“BAG, LLC”). The Company is responsible for the decisions related to all of NFMS, LLC’s expenditures, which solely relates to payroll. Based on these facts, it was determined that the Company is the primary beneficiary of NFMS, LLC. Therefore, NFMS, LLC has been consolidated by the Company. All intercompany expenses associated with NFMS, LLC and its service agreement have been eliminated in consolidation.

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BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S. dollars, except as stated)

Mountain Air, LLC:

As of November 7, 2022, MA, LLC

was

a wholly-owned subsidiary of Bridger. Prior to MA, LLC becoming a wholly-owned subsidiary of the Company, MA, LLC was owned 50

by Timothy Sheehy, the Chief Executive Officer and a director of Bridger, and

by an entity affiliated with Matthew Sheehy, a director of Bridger. MA, LLC is a Federal Aviation Administration (“FAA”) part 135 certificate holder and is
designed to hold aerial firefighting contracts. Bridger Aviation Services, LLC (“Bridger Aviation”), a wholly-owned subsidiary of Bridger, was a party
to a certain Management Services Agreement

(the “Aviation Agreement”), dated April 13, 2018, with MA, LLC. Pursuant to the Aviation Agreement, Bridger Aviation leased certain aircraft to MA, LLC. MA, LLC operated the aircraft and paid Bridger Aviation a fee equal to

99% of all revenue it received from the use and deployment of Bridger Aviation’s aircraft. MA, LLC was obligated to operate and maintain the aircraft in accordance with applicable FAA standards.

Timothy Sheehy originally conducted aerial operations through MA, LLC before Bridger’s current legal organizational structure was put into place, which created the need for the Aviation Agreement and resulting VIE treatment.

Seasonality

The Company’s business is generally seasonal, with a significant portion of total revenue occurring during the second and third quarters of the fiscal year due to the North American fire season. However, the weather dependency and seasonal fluctuation in the need to fight wildfires based upon location and the varying intensity of the fire season may lead our operating results to fluctuate significantly from quarter to quarter and year to year.

Use of Estimates

The preparation of financial statements in conformity with US GAAP, requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities, disclosure of gain or loss contingencies as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from their estimates and such differences could be material to the unaudited condensed consolidated financial statements. Significant items subject to such estimates and assumptions include: (a) excess and aging aircraft support parts reserves, (b) allowance for doubtful accounts, (c) useful lives of property, plant and equipment, net (d) impairment of long-lived assets, goodwill and other intangible assets, (e) disclosure of fair value of financial instruments, (f) variable interest entities, (g) accounting for Series A Preferred Stock and Legacy Bridger Series C Preferred Shares, (h) revenue recognition, (i) estimates and assumptions made in determining the carrying values of goodwill and other intangible assets, (j) incentive units and (k) Public Warrants and Private Placement Warrants.

Reclassifications

Certain amounts from prior periods have been reclassified to conform to the current period presentation. The Company previously separately presented General and administrative and Business development operating expenses, which are now presented combined within “Selling, general and administrative expense” on the Unaudited Condensed Consolidated Statement of Operations. The reclassification had no impact on previously reported net loss or accumulated deficit.

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BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S. dollars, except as stated)

Deferred Offering Costs

Deferred offering costs primarily consist of capitalized legal, accounting and other third-party costs incurred that are directly related to the

Reverse Recapitalization

, which

has been

accounted for as a reverse recapitalization. These costs were charged to Stockholders’ deficit as a reduction of Additional paid-in capital generated upon the completion of the

Reverse Recapitalization

. As of March 31, 2023,

the Company charged $

9,778 thousand to Stockholders’ deficit. As of December 31, 2022

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

Revenue Recognition

The Company charges daily and hourly rates depending upon the type of firefighting services rendered and under which contract the services are performed. These services are primarily split into flight revenue and standby revenue. Flight revenue is primarily earned at an hourly rate when the engines of the aircraft are started and stopped upon request of the customer, tracked via a Hobbs meter. Standby revenue is earned primarily as a daily rate when aircraft are available for use at a fire base, awaiting request from the customer for flight deployment.

The Company enters into short, medium and long-term contracts with customers, primarily with government agencies to deploy aerial fire management assets during the firefighting season. Revenue is recognized when performance obligations under the terms of a contract with our customers are satisfied and payment is typically due within 30 days of invoicing. This occurs as the services are rendered and include the use of the aircraft, pilot and field maintenance personnel to support the contract.

Contracts are based on either a Call-When-Needed (“CWN”) or Exclusive Use (“EU”) basis. Rates established are generally more competitive based on the security of the revenue from the contract (i.e., an EU versus only on an

as-needed

basis in CWN). These rates are delineated by the type of service, generally flight time or time available for deployment. Once an aircraft is deployed on a contract the fees are earned at these rates and cannot be obligated to another customer. Contracts have no financing components and consideration is at

pre-determined

rates. No variable considerations are constrained within the contracts.

The transaction prices are allocated on the service performed and tracked real-time by each operator in a duty log. On at least a monthly basis, the services performed and rates are validated by each customer. Acceptance by the customer is evidenced by the provision of their funded task order or accepted invoice.

The Company has not incurred incremental costs for obtaining contracts with customers. In addition, the Company evaluates whether or not it should capitalize the costs of fulfilling a contract. Such costs would be capitalized when they are not within the scope of other standards and: (1) are directly related to a contract; (2) generate or enhance resources that will be used to satisfy performance obligations; and (3) are expected to be recovered. The Company has elected to use the practical expedient detailed in ASC

340-40-25-4

to expense any costs to fulfill a contract as they are incurred when the amortization period would be one year or less.

Contract assets are classified as a receivable when the reporting entity’s right to consideration is unconditional, which is when payment is due only upon the passage of time. As the Company invoices customers for performance obligations that have been satisfied, at which point payment is unconditional, contracts do not typically give rise to contract assets. Contract liabilities are recorded when cash payments are received or due in advance of performance.

Payment terms vary by customer and type of revenue contract. The Company generally expects that the period of time between payment and transfer of promised goods or services will be less than one year. In such instances, the Company has elected the practical expedient to not evaluate whether a significant financing component exists. As permitted under the practical expedient available under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, and (ii) contracts for which the Company recognizes revenue at the amount which it has the right to invoice for services performed.

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BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S. dollars, except as stated)

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

Revenue Disaggregation

The following shows the disaggregation of revenue by service for the three months ended March 31, 2023 and March 31 2022.


	For the three months ended March 31,
	2023		2022
Fire suppression	$	—	$	—
Aerial surveillance		—		—
Other services		365,373		69,292

Total revenues	$	365,373	$	69,292

The following shows the disaggregation of revenue by type for the three months ended March 31, 2023 and March 31, 2022.


	For the three months ended, March 31
	2023		2022
Flight revenue	$	—	$	—
Standby revenue		—		—
Other revenue		365,373		69,292

Total revenues	$	365,373	$	69,292

Concentration Risk

For the three months ended March 31, 2023, the Company had one customer who individually accounted for 65% of total revenues. As of March 31, 2023, one customer accounted for 83% of accounts

receivable. Refer to “

Note 16 – Related Party Transactions

” for

additional information.

For the three months ended March 31, 2022, the Company had one customer who individually accounted for 100% of total revenues. As of December 31, 2022, one customer accounted for 62% of accounts receivable.

Hedging Transactions and Derivative Financial Instruments

The Company is directly and indirectly affected by changes in certain market conditions. These changes in market conditions may adversely impact the Company’s financial performance and are referred to as “market risks.” The Company, when deemed appropriate, uses derivatives as a risk management tool to mitigate the potential impact of certain market risks. The Company manages interest rate risk through the use of derivative instruments

, such as swap agreements.

A swap agreement is a contract between two parties to exchange cash flows based on specified underlying notional amounts, assets and/or indices. The Company does not enter into derivative financial instruments for trading purposes.

The accounting for gains and losses that result from changes in the fair values of derivative instruments depends on whether the derivatives have been designated and qualify as hedging instruments and the type of hedging relationships. The changes in fair values of derivatives that have been designated and qualify as cash flow hedges are recorded in accumulated other comprehensive income and are reclassified into the line item on the Unaudited Condensed Consolidated Statements of Comprehensive Loss in which the hedged items are recorded in the same period the hedged items affect earnings. The changes in fair values of freestanding derivatives with no hedging designation are recorded in earnings through interest expense on the Unaudited Condensed Consolidated Statement of Operations.

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BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S. dollars, except as stated)

The Company formally assesses whether the financial instruments used in hedging transactions are effective at offsetting changes in either the fair values or cash flows of the related underlying exposures. Any ineffective portion of a financial instrument’s change in fair value is immediately recognized into earnings. The fair value is based on prevailing market data and using standard valuation models based on reasonable estimates about future relevant market conditions. Refer to

“Note 12 – Long-Term Debt.”

The notional amounts of the derivative financial instruments do not necessarily represent amounts exchanged by the parties and, therefore, are not a direct measure of the Company’s exposure to the financial risks described above.

Warrant Liabilities

The Company accounts for the Public Warrants and Private Placement Warrants (collectively, the “Warrants”) issued in connection with the Reverse Recapitalization in accordance with the guidance contained in accordance with ASC 480,

Distinguishing Liabilities from Equity

and ASC

815-40,

Derivatives and Hedging—Contracts in Entity’s Own Equity

, under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjusts the Warrants to fair value at each reporting period. The warrant liabilities are subject to remeasurement at each balance sheet date until exercised, and any change in fair value is recorded in earnings through Selling, general and administrative expense on the Unaudited Condensed Consolidated Statement of Operations.

Income Taxes

For periods prior to the Reverse Recapitalization, Legacy Bridger was a partnership for federal income tax purposes. Consequently, federal income taxes were not payable or provided for by Legacy Bridger. Members were taxed individually on their pro rata ownership share of Legacy Bridger’s earnings. Legacy Bridger’s net income or loss was allocated among the members in accordance with Legacy Bridger’s operating agreement.

Subsequent to the Reverse Recapitalization, the Company became the successor of Legacy Bridger as discussed in

“Note 1 – Organization and Basis of Presentation.”

Bridger is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to net taxable income or loss and any related tax credits of the Company. Bridger is also subject to taxes in foreign jurisdictions in which it operates.

The Company provides for income taxes and the related accounts under the asset and liability method. Income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. The Company is subject to income taxes predominantly in the U.S., where tax laws are often complex and may be subject to different interpretations.

Deferred income taxes arise from temporary differences between the financial statement carrying amount and the tax basis of assets and liabilities and are measured using the enacted tax rates expected to be in effect during the year in which the basis difference reverses. In evaluating the ability to recover its deferred tax assets within the jurisdiction from which they arise, the Company considers all available positive and negative evidence. If based upon all available positive and negative evidence, it is more likely than not that the deferred tax assets will not be realized, a valuation allowance is established. The valuation allowance may be reversed in a subsequent reporting period if Bridger determines that it is more likely than not that all or part of the deferred tax asset will become realizable. At this time, a valuation allowance has been recorded against the deferred tax assets.

The Company’s interpretations of tax laws are subject to review and examination by various taxing authorities and jurisdictions where the Company operates, and disputes may occur regarding its view on a tax position. These disputes over interpretations with the various tax authorities may be settled by audit, administrative appeals or adjudication in the court systems of the tax jurisdictions in which the Company operates. The Company regularly reviews whether it may be assessed additional income taxes as a result of the resolution of these matters, and the Company records additional reserves as appropriate. In addition, the Company may revise its estimate of income taxes due to changes in income tax laws, legal interpretations and business strategies. The Company recognizes the financial statement effects of uncertain income tax positions when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. For additional information in income taxes, see

“Note 19 – Income Taxes.”

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BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S. dollars, except as stated)

Net Income (Loss) Per Share

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

after-tax

impact of changes to the fair value of the Warrants, to the extent they are dilutive.

As noted above, the Company accounted for the Closing as a reverse recapitalization. Net income (loss) per share calculations for all periods prior to the Closing have been retrospectively adjusted by the Exchange Ratio for the equivalent number of shares of Common Stock outstanding immediately after the Closing to effect the reverse recapitalization. Subsequent to the Closing, net income (loss) per share is calculated based on the weighted average number of shares of Common Stock outstanding.

Collaboration Agreements

The Company analyzes its collaboration arrangement to assess if it is within the scope of ASC Topic 808, Collaborative Agreements (“ASC 808”) by determining whether such an arrangement involves joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. If the Company concluded that it has a customer relationship with its collaborator, the collaboration arrangement would be accounted for under ASC 606.

Stock-Based Compensation

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

Legacy Bridger granted select board members and an executive incentive unit awards (“Incentive Units”) which contain service and performance vesting conditions. Compensation cost for Incentive Units is measured at their grant-date fair value and is equal to the value of the Legacy Bridger’s Class D Common shares, which is estimated using an option pricing model. Compensation cost for service-based units is recognized over the requisite service period on a straight-line basis. For performance related units, expense is recognized when the performance related condition is considered probable.

In connection with the Closing, the Company along with the Board established and approved and assumed the Bridger Aerospace Group Holdings, Inc. 2023 Omnibus Incentive Plan (the “Plan”) which allowed the Company to grant RSUs to certain executives and senior management (the “Participants”) of the Company. Upon satisfying the vesting conditions, each RSU provides the Participants the right to receive one share of Common Stock. The fair value of RSUs is determined based on the number of shares granted and the quoted market price of the Common Stock on the date of grant. Compensation cost for the RSUs is recognized as the performance condition of the Closing of the transaction was met and over the requisite service period based on the graded-vesting method. The Company accounts for forfeitures as they occur. Stock-based compensation is included in Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations.

Advertising Expense

Advertising costs are expensed as incurred and are included in Selling, general and administrative expense on the Unaudited Condensed Consolidated Statement of Operations. Advertising expense for the three months ended March 31, 2023 and 2022 was $24 thousand and $51 thousand, respectively.

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BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S. dollars, except as stated)

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU

No. 2016-13,

Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this ASU replace the incurred loss model for recognition of credit losses with a methodology that reflects expected credit losses over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. The Company adopted this standard on January 1, 2023. The adoption of this standard did not have a significant impact on the Company’s unaudited condensed consolidated financial statements.

In January 2017, the FASB issued ASU

No. 2017-04,

Intangibles-Goodwill and Other (Topic 350): Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment. This update modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. In order to reduce complexity, an entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. The Company adopted this standard on January 1, 2023. The adoption of this standard did not have a significant impact on the Company’s unaudited condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In March 2020, the FASB issued ASU

No. 2020-04,

Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and in January 2021, issued ASU

No. 2021-01,

Reference Rate Reform: Scope. These updates provide optional expedients and exceptions for applying US GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The optional guidance is provided to ease the potential burden of accounting for reference rate reform. The guidance is effective and could be adopted no later than December 31, 2022. In December 2022, the FASB issued ASU

No. 2022-06,

Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, to extend the temporary accounting rules under Topic 848 from December 31, 2022 to December 31, 2024. The Company is currently evaluating the impact of adopting the new accounting guidance on the Company’s unaudited condensed consolidated financial statements.

Note 3 – Cash Equivalents and Investments in Marketable Securities

The investments in marketable securities are classified as

available-for-sale

debt securities with short-term maturities of less than one year. The fair values, gross unrealized gains and losses of the

available-for-sale

securities by type are as follows:


	As of March 31, 2023		As of December 31, 2022

	Carrying Value
Cash equivalents
Commercial paper	$	—	$	29,890,313
Money market fund		2,025,399		12,640

Total cash equivalents	$	2,025,399	$	29,902,953

Restricted cash
Money market fund	$	9,381,562	$	9,284,362


	As of March 31, 2023
	Purchase Price		Unrealized Gains		Unrealized Losses		Fair Value
Investment in marketable securities
Commercial paper	$	13,421,156	$	276,857	$	—	$	13,698,013
Corporate bonds and notes		9,924,092		36,043		—		9,960,135
Government securities		6,658,634		5,745		—		6,664,379

Total marketable securities	$	30,003,882	$	318,645	$	—	$	30,322,527

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BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S. dollars, except as stated)


	As of December 31, 2022
	Purchase Price		Unrealized Gains		Unrealized Losses			Fair Value
Investment in marketable securities
Commercial paper	$	32,635,849	$	277,674	$	—		$	32,913,523
Corporate bonds and notes		15,413,122		3,668		—			15,416,790
Government securities		6,658,634		—		(8,791	)		6,649,843

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

The net unrealized gain included in total other comprehensive (loss) income for the three months

ended March 31, 2023 is $319 thousand. The Company did not have investments in marketable securities during the three months ended March 31, 2022.

The proceeds from sales of

available-for-sale

securities and gross realized gains included in earnings from sales of

available-for-sale

securities for the three months ended March 31, 2023 are $25,062 thousand and $259 thousand, respectively. The Company determines gains and losses using the

first-in

first-out

method. For the three months ended March 31, 2023, $173 thousand has been reclassified out of accumulated other comprehensive income. There have been no impairments measured for the three months ended March 31, 2023 and March 31, 2022, respectively.

Note 4 – Aircraft Support Parts

Aircraft support parts consist of the following:


	As of March 31, 2023		As of December 31, 2022
Repairables and expendables	$	434,894	$	1,734,292
Other support parts		—		26,978

Total aircraft support parts	$	434,894	$	1,761,270

Note 5 – Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:


	As of March 31, 2023		As of December 31, 2022
Prepaid insurance	$	1,882,782	$	968,721
Prepaid subscriptions		1,090,397		770,724
Other current assets		103,294		95,587

Total prepaid expenses and other current assets	$	3,076,473	$	1,835,032

Note 6 –Property, Plant and Equipment, Net

Property, plant and equipment, net consist of the

following:


	As of March 31, 2023			As of December 31, 2022

Aircraft	$	188,645,160		$	160,113,061
Less: accumulated depreciation		(17,794,943	)		(16,783,360	)

Aircraft, net		170,850,217			143,329,701

Construction-in-progress—Aircraft		—			16,992,010

Buildings		16,522,454			16,519,231
Vehicles and equipment		2,871,841			2,810,560
Construction-in-progress - Buildings		15,219,361			13,780,316
Finance lease right-of-use-asset		130,378			130,378
Licenses		234,682			234,682

Less: accumulated depreciation		(2,406,334	)		(1,705,465	)

Buildings and equipment, net		32,572,382			31,769,702

Total property, plant and equipment, net	$	203,422,599		$	192,091,413

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BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S. dollars, except as stated)

For

the three months ended March 31, 2023, the Company recorded $1,005 thousand and $719 thousand of depreciation expense in Cost of revenu

and Selling, general and administrative expense, respectively. For the three months ended March 31, 2022, the Company recorded $1,004 thousand and $255 thousand of depreciation expense in Cost of revenues and Selling, general and administrative expense, respectively.

For the three months ended March 31, 2023 and 2022, the Company recorded a gain on sale of assets

of $1

thousand

and a loss on disposals of assets related to the obsolescence of an aging aircraft of

781

thousand, respectively, in Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations.

For the three months ended March 31, 2023 and 2022, capitalized interest to equipment from debt financing was $393 thousand and $53 thousand, respectively. Aircraft that is currently being manufactured is considered construction in process and is not depreciated until the aircraft is placed into service. Aircraft that is temporarily not in service is not depreciated until placed into service.

Note 7 – Goodwill and Intangible Assets, Net

The Company’s goodwill originated from the acquisition of MA, LLC in April 2018. The carrying amount of goodwill was $2,458 thousand as of March 31, 2023 and December 31, 2022, respectively. There were no impairment charges recorded for goodwill for the three months ended March 31, 2023 and 2022.

Intangible assets consisted of the following:


			As of March 31, 2023
	Estimated Life (Years)		Gross Carrying amount		Accumulated Amortization			Net Carrying Amount
Licenses		10	$	67,623	$	(48,867	)	$	18,756
Internal-use software		3		296,675		(133,648	)		163,027

Total intangible assets			$	364,298	$	(182,515	)	$	181,783


			As of December 31, 2022
	Estimated Life (Years)		Gross Carrying amount		Accumulated Amortization			Net Carrying Amount
Licenses		10	$	67,623	$	(47,177	)	$	20,446
Internal-use software		3		296,675		(108,925	)		187,750

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

Amortization expense for intangible assets and other noncurrent assets was $26 thousand and $8 thousand for the three months ended March 31, 2023 and 2022, respectively. Amortization expense is included in Selling, general and administrative expense on the Unaudited Condensed Consolidated Statements of Operations.

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BRIDGER AEROSPACE GROUP HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in U.S. dollars, except as stated)

Note 8 – Other Noncurrent Assets

Other noncurrent assets consisted of the following:


	As of March 31, 2023		As of December 31, 2022
Investment in Overwatch	$	1,000,000	$	1,000,000
Operating lease right-of-use asset		636,355		671,054
Interest rate swap		1,152,383		1,407,135
Prepaid subscriptions		3,919,352		1,246,128
Other assets		31,908		31,908

Total other noncurrent assets	$	6,739,998	$	4,356,225

Note 9 – Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following:


	As of March 31, 2023			As of December 31, 2022

Accrued salaries, wages, and bonuses	$	7,359,232		$	6,515,774
Finance right-of-use liability		61,615			68,310
Accrued professional fees		612,111			2,291,469
Embedded derivative of Legacy Bridger Series C Preferred Shares		—			1,039,330
Embedded derivative of Series A Preferred Stock		693,745			—
Warrant liabilities		4,264,000			—
Deferred underwriting fee payable		1,500,000			—
Freestanding derivative on Legacy Bridger Series C Preferred Shares		—			2,186,283
Excess hold fee payable on Series A Preferred Stock		2,236,842			—
Accrued interest expense and other accrued liabilities		2,140,690			6,614,065

Total accrued expenses and other liabilities		18,868,235			18,715,231
Less: Current accrued expenses and other current liabilities		(13,063,960	)		(18,669,572	)

Total long-term accrued expenses and other noncurrent liabilities	$	5,804,275		$	45,659

The Company’s bonus pool was accrued throughout the year and was based upon 2022 performance milestones. On August 19, 2022, the Company also granted $10.1

million of discretionary cash bonuses to employees and executives in connection with the issuance of the Legacy Bridger Series C Preferred Shares, issuance of the taxable industrial development revenue bond transaction under the CUSIP of Gallatin County for $160,000 thousand (“2022 Bonds”) and execution of the Transaction Agreements. As of March 31, 2023, $

3,087 thousand of the discretionary cash bonuses remained accrued and unpaid.

Warrant liabilities

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

Public Warrants

The Company issued Public Warrants to purchase 17,250,000

shares of Common Stock at an exercise price of

11.50 per share in exchange for the 17,250,000

JCIC warrants originally issued by JCIC in its initial public offering. The Warrants may only be exercised for a whole number of shares of Common Stock. The exercise price and number of shares of Common Stock issuable upon exercise of the Warrants may also be adjusted in certain circumstances including in the event of a share dividend, recapitalization, reorganization, merger or consolidation. In no event will the Company be required to net cash settle any Warrant.

Table of Contents


		Page
Part I	Financial Information		2

Item 1.	Financial Statements (Unaudited)		2

	Condensed Consolidated Balance Sheets		2

	Condensed Consolidated Statements of Operations		3

	Condensed Consolidated Statements of Comprehensive Loss		4

	Condensed Consolidated Statements of Stockholders’ Deficit		5

	Condensed Consolidated Statements of Cash Flows		6

	Notes to Condensed Consolidated Financial Statements		7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		39

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		56

Item 4.	Controls and Procedures		57

Part II	Other Information		58

Item 1.	Legal Proceedings		58

Item 1A.	Risk Factors		58

Item 6.	Exhibits		59


	For the three months ended March 31,
	2023			2022

Revenues 1	$	365,373		$	69,292
Cost of revenues:
Flight operations		3,733,261			3,665,352
Maintenance		3,515,451			2,861,987

Total cost of revenues		7,248,712			6,527,339

Gross loss		(6,883,339	)		(6,458,047	)
Selling, general and administrative expense		33,228,491			4,841,259

Operating loss		(40,111,830	)		(11,299,306	)
Interest expense 2		(5,664,545	)		(3,714,546	)
Other income		1,091,437			140,843

Net loss	$	(44,684,938	)	$	(14,873,009	)

Series A Preferred Stock – adjustment for deemed dividend upon Closing	$	(48,300,000	)	$	—
Series A Preferred Stock – adjustment to eliminate 50% multiplier	$	156,362,597		$	—
Series A Preferred Stock – adjustment to maximum redemption value	$	(4,274,439	)	$	—
Legacy Bridger Series A Preferred Shares – adjustment for redemption, extinguishment and accrued interest	$	—		$	(4,339,767	)

Net income (loss) attributable to Common stockholders – basic and diluted	$	59,103,220		$	(19,212,776	)

Net income (loss) per Common Stock – basic	$	1.36		$	(0.50	)
Net income (loss) per Common Stock – diluted	$	0.79		$	(0.50	)
Weighted average Common Stock outstanding – basic		43,488,468			38,770,646
Weighted average Common Stock outstanding – diluted		74,986,752			38,770,646