Bridger Aerospace Group Holdings, Inc.

Previous wording

The following discussion and analysis is intended to help you understand our business, financial condition, results of operations, liquidity and capital resources. The discussion and analysis should be read together with the Condensed Consolidated Financial Statements as of March 31, 2025 and December 31, 2024, for the three months ended March 31, 2025 and 2024, and the related notes thereto, that are included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”). This discussion and analysis should also be read together with the historical audited annual Consolidated Financial Statements as of and for the years ended December 31, 2024 and 2023, included in the Annual Report on Form 10-K (the “Annual Report”). This discussion and analysis contains forward-looking statements based upon our current expectations, estimates and projections that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements due to, among other considerations, the matters discussed in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.”

Current wording

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 June 30, 2025 and December 31, 2024, for the three and six months ended June 30, 2025 and 2024, and the related notes thereto, that are included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”). This discussion and analysis should also be read together with the historical audited annual Consolidated Financial Statements as of and for the years ended December 31, 2024 and 2023, included in the Annual Report on Form 10-K (the “Annual Report”). This discussion and analysis contains forward-looking statements based upon our current expectations, estimates and projections that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements due to, among other considerations, the matters discussed in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.”

Previous wording

Fire suppression revenue increased by $1.9 million, or 49%, to $5.8 million for the three months ended March 31, 2025, from $3.9 million for the three months ended March 31, 2024. The increase was primarily driven by increased flight hours for our Super Scoopers due to an earlier start to the 2025 wildfire season for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Current wording

Fire suppression revenue increased by $10.6 million, or 142%, to $18.1 million for the three months ended June 30, 2025, from $7.5 million for the three months ended June 30, 2024. The increase was primarily driven by increased utilization for our Super Scoopers for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Previous wording

Aerial surveillance increased by $1.1 million, or 193%, to $1.7 million for the three months ended March 31, 2025, from $0.6 million for the three months ended March 31, 2024. The increase was primarily driven by increased flight hours for our Pilatus aircraft for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Current wording

Aerial surveillance increased by $0.5 million, or 14%, to $4.0 million for the three months ended June 30, 2025, from $3.5 million for the three months ended June 30, 2024. The increase was primarily driven by increased utilization for our Pilatus aircraft for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Previous wording

Maintenance repair was $7.9 million for the three months ended March 31, 2025, compared to $0.4 million for the three months ended March 31, 2024. The increase in the amount is primarily due to the revenues from maintenance and repair work performed by FMS, which was acquired in June 2024, and the return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement. Refer to“Note 2 – Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional details.

Current wording

Maintenance repair increased by $3.5 million, or 195%, to $5.4 million for the three months ended June 30, 2025, compared to $1.8 million for the three months ended June 30, 2024. The increase was primarily due to the return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement, and the revenues from maintenance and repair work performed by FMS, which was acquired in June 2024. Refer to“Note 2 – Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional details.

Previous wording

Other services revenue decreased by $0.4 million, or 57%, to $0.3 million for the three months ended March 31, 2025, from $0.6 million for the three months ended March 31, 2024. The decrease was primarily due to a decrease in third-party training and flight operations services utilizing our aircraft for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Current wording

Other services revenue increased by $3.1 million, or 1,419%, to $3.3 million for the three months ended June 30, 2025, from $0.2 million for the three months ended June 30, 2024. The increase was primarily due to an increase in third-party training and flight operations services utilizing our aircraft for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Previous wording

United States revenue increased by $5.3 million, or 117%, to $9.7 million for the three months ended March 31, 2025, from $4.5 million for the three months ended March 31, 2024. The increase for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, was primarily driven by increased flight hours due to an earlier start to the 2025 wildfire season and maintenance and repair work performed by FMS, which was acquired in June 2024.

Current wording

United States revenue increased by $14.5 million, or 129%, to $25.7 million for the three months ended June 30, 2025, from $11.2 million for the three months ended June 30, 2024. The increase for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, was primarily driven by increased utilization of our aircraft and maintenance and repair work performed by FMS, which was acquired in June 2024.

Previous wording

Spain revenue increased by $4.9 million, or 475% to $5.9 million for the three months ended March 31, 2025, from $1.0 million for the three months ended March 31, 2024. The increase is due to the return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement. Refer to“Note 2 – Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional details.

Current wording

Spain revenue increased by $3.3 million, or 180% to $5.1 million for the three months ended June 30, 2025, from $1.8 million for the three months ended June 30, 2024. The increase is due to the return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement. Refer to“Note 2 – Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional details.

Previous wording

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

Current wording

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

Previous wording

Flight operations expenses increased by $1.2 million, or 25%, to $6.3 million for the three months ended March 31, 2025, from $5.0 million for the three months ended March 31, 2024. The increase was primarily attributable to an increase in salaries and wages expense of $0.8 million, an increase of contractor labor expenses of $0.2 million, an increase in depreciation expense of $0.1 million, and an increase in aircraft lease expense of $0.1 million, in each case for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Current wording

Flight operations expenses increased by $2.8 million, or 54%, to $7.9 million for the three months ended June 30, 2025, from $5.1 million for the three months ended June 30, 2024. The increase was primarily attributable to an increase in depreciation expense of $1.5 million, an increase in salaries and wages expense of $0.6 million, an increase in travel expenses of $0.4 million, an increase in training expenses of $0.1 million, an increase in aircraft license expenses of $0.1 million, and an increase in aircraft lease expense of $0.1 million, in each case for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Previous wording

Maintenance expenses increased by $6.8 million, or 161%, to $11.0 million for the three months ended March 31, 2025, from $4.2 million for the three months ended March 31, 2024. The increase was primarily driven by an increase in aircraft maintenance and modification expense of $5.4 million, an increase in salaries and wages expense of $1.1 million and an increase in depreciation expense of $0.3 million, in each case for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Current wording

Maintenance expenses increased by $6.1 million, or 128%, to $10.8 million for the three months ended June 30, 2025, from $4.8 million for the three months ended June 30, 2024. The increase was primarily driven by an increase in aircraft maintenance and modification expense of $5.4 million due to the return-to-service work performed on the Spanish Scoopers in connection with the MAB services agreement and maintenance and repair work performed by FMS, which was acquired in June 2024. Refer to“Note 2 – Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional details. The increase was partially driven by an increase in salaries and wages expense of $0.7 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Previous wording

Selling, general and administrative expense decreased by $3.0 million, or 26%, to $8.6 million for the three months ended March 31, 2025, from $11.6 million for the three months ended March 31, 2024. The decrease was primarily attributable to a decrease in stock-based compensation of $3.7 million associated with restricted stock units (“RSUs”) issued to senior management and employees of Bridger, partially offset by an increase in the market value of the Public Warrants and Private Placement Warrants (collectively, the “Warrants”) of $0.6 million and an increase in amortization expense of $0.2 million.

Current wording

Selling, general and administrative expense decreased by $1.4 million, or 17%, to $6.5 million for the three months ended June 30, 2025, from $7.9 million for the three months ended June 30, 2024. The decrease was primarily attributable to a decrease in the market value of contingent consideration of $2.8 million, a decrease in stock-based compensation of $2.7 million associated with restricted stock units (“RSUs”) issued to senior management and employees of Bridger, partially offset by an increase in the market value of the Public Warrants and Private Placement Warrants (collectively, the “Warrants”) of $2.6 million, an increase in professional services expenses of $0.6 million, an increase in amortization expense of $0.4 million, and an increase in contractor labor expense of $0.3 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Previous wording

Interest expense decreased by $0.2 million, or 3%, to $5.7 million for the three months ended March 31, 2025, from $5.9 million for the three months ended March 31, 2024. The decrease was driven by lower interest rates for the Live Oak Bank Loans. Refer to “Note 15 – Long-Term Debt” of the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report for additional details.

Current wording

Interest expense decreased by $0.1 million, or 2%, to $5.7 million for the three months ended June 30, 2025, from $5.9 million for the three months ended June 30, 2024. The decrease was driven by lower interest rates for the Live Oak Bank Loans. Refer to “Note 15 – Long-Term Debt” of the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report for additional details.

Previous wording

Other income decreased by $0.6 million, or 48%, to $0.6 million for the three months ended March 31, 2025, from $1.2 million for the three months ended March 31, 2024. The decrease was primarily driven by a fair value adjustment of embedded derivative of Series A Preferred Stock of $0.9 million for three months ended March 31, 2024. The decrease was partially offset by currency gain of $0.2 million and dividend income on cash equivalents of $0.1 million, in each case for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Current wording

Other income increased by $0.6 million, or 386%, to $0.7 million for the three months ended June 30, 2025, from $0.1 million for the three months ended June 30, 2024. The increase was primarily driven by a currency gain of $0.5 million and an increase in dividend income on cash equivalents of $0.1 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Previous wording

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

Current wording

Income tax expense increased by $0.9 million, or 192%, to $0.4 million for the six months ended June 30, 2025, primarily from an income tax benefit of $0.5 million for the six months ended June 30, 2024. The increase was driven by a discrete benefit generated from the FMS Acquisition during 2024.

Previous wording

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

Current wording

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

Previous wording

As of March 31, 2025, our principal sources of liquidity were cash and cash equivalents of $22.3 million which were held for working capital purposes and restricted cash of $9.2 million. Restricted cash consists primarily of cash reserved for debt servicing on the Series 2022 Bonds. From time to time, the Company invests its excess cash in highly rated available-for-sale securities, with the primary objective of minimizing the potential risk of principal loss.

Current wording

As of June 30, 2025, our principal sources of liquidity were cash and cash equivalents of $17.0 million which were held for working capital purposes and restricted cash of $13.8 million. Restricted cash consists primarily of cash reserved for debt servicing on the Series 2022 Bonds. 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.

Previous wording

We may receive up to $306.5 million from the exercise of the 9,400,000 private placement warrants and 17,249,874 public warrants of the Company outstanding, assuming the exercise in full of all the Warrants for cash, but not from the sale of the shares of Common Stock issuable upon such exercise. On March 31, 2025, the closing price of our Common Stock was $1.13 per share. 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. There can be no assurance that our Warrants will be in the money prior to their January 24, 2028 expiration date, and therefore, we may not receive any cash proceeds from the exercise of our Warrants to fund our operations. Accordingly, we have not relied on the receipt of proceeds from the exercise of our Warrants in assessing our capital requirements and sources of liquidity.

Current wording

We may receive up to $306.5 million from the exercise of the 9,400,000 private placement warrants and 17,249,874 public warrants of the Company outstanding, assuming the exercise in full of all the Warrants for cash, but not from the sale of the shares of Common Stock issuable upon such exercise. On June 30, 2025, the closing price of our Common Stock was $1.93 per share. For so long as the market price of our Common Stock is below the exercise price of our Warrants ($11.50 per share), our Warrants remain “out-of-the money,” and holders of our Warrants are unlikely to cash exercise their Warrants, resulting in little or no cash proceeds to us. There can be no assurance that our Warrants will be in the money prior to their January 24, 2028 expiration date, and therefore, we may not receive any cash proceeds from the exercise of our Warrants to fund our operations. Accordingly, we have not relied on the receipt of proceeds from the exercise of our Warrants in assessing our capital requirements and sources of liquidity.

Previous wording

The Company’s shares of 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 $11.00 per share at the time of conversion. The Series A Preferred Stock will continue to accrue interest daily at 7% per annum for the first six years, 9% per annum for the seventh year, and 11% per annum thereafter. Accrued interest for the Series A Preferred Stock was $6.6 million as of March 31, 2025.

Current wording

The Company’s shares of 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 $11.00 per share at the time of conversion. The Series A Preferred Stock will continue to accrue interest daily at 7% per annum for the first six years, 9% per annum for the seventh year, and 11% per annum thereafter. Accrued interest for the Series A Preferred Stock was $13.2 million for the six months ended June 30, 2025.

Previous wording

As of March 31, 2025, it was probable that the Series A Preferred Stock may become redeemable at the holder’s option on or after March 29, 2027. We have elected to recognize changes in redemption value immediately, adjusting the preferred shares to the maximum redemption value at each reporting date. As of March 31, 2025, Series A Preferred Stock had a carrying value and redemption value of $386.7 million.

Current wording

As of June 30, 2025, it was probable that the Series A Preferred Stock may become redeemable at the holder’s option on or after March 29, 2027. We have elected to recognize changes in redemption value immediately, adjusting the preferred shares to the maximum redemption value at each reporting date. As of June 30, 2025, Series A Preferred Stock had a carrying value and redemption value of $393.4 million.

Previous wording

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

Current wording

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

Previous wording

Net cash used in operating activities was $17.7 million for the three months ended March 31, 2025, compared to Net cash used in operating activities of $22.8 million for the three months ended March 31, 2024. Net cash used in operating activities reflects Net loss of $15.5 million for the three months ended March 31, 2025 compared to Net loss of $20.1 million for the three months ended March 31, 2024. Net cash used in operating activities for the three months ended March 31, 2025 reflects add-backs to Net loss for non-cash charges totaling $4.2 million, primarily attributable to depreciation and amortization expense of $2.0 million and stock-based compensation expense of $2.0 million, net of changes in working capital. Net cash used in operating activities for the three months ended March 31, 2024 reflects add-backs to Net loss for non-cash charges totaling $6.5 million, primarily attributable to stock-based compensation expense of $5.9 million and partially attributable to depreciation and amortization expense of $1.3 million, net of changes in working capital.

Current wording

Net cash used in operating activities was $16.2 million for the six months ended June 30, 2025, compared to Net cash used in operating activities of $25.6 million for the six months ended June 30, 2024. Net cash used in operating activities reflects Net loss of $15.2 million for the six months ended June 30, 2025 compared to Net loss of $30.1 million for the six months ended June 30, 2024. Net cash used in operating activities for the six months ended June 30, 2025 reflects add-backs to Net loss for non-cash charges totaling $8.4 million, primarily attributable to depreciation and amortization expense of $6.0 million and stock-based compensation expense of $3.7 million, and partially offset by change in fair value of earnout consideration of $2.7 million net of changes in working capital. Net cash used in operating activities for the six months ended June 30, 2024 reflects add-backs to Net loss for non-cash charges totaling $11.0 million, primarily attributable to stock-based compensation expense of $10.4 million and partially attributable to depreciation and amortization expense of $3.3 million, and partially offset by change in fair value of Warrants of $2.1 million net of changes in working capital.

Previous wording

Net cash used in investing activities was $2.6 million for the three months ended March 31, 2025, compared to Net cash provided by investing activities of $2.8 million for the three months ended March 31, 2024. Net cash used in investing activities for the three months ended March 31, 2025 reflects purchases of property, plant and equipment of $3.3 million, expenditures for capitalized software of $0.3 million and partially offset by sales of property, plant and equipment of $0.9 million. Net cash provided by investing activities for the three months ended March 31, 2024 reflects proceeds from sales and maturities of marketable securities of $1.1 million partially offset by purchases of property, plant and equipment of $1.0 million.

Current wording

Net cash used in investing activities was $3.9 million for the six months ended June 30, 2025, compared to Net cash provided by investing activities of $4.4 million for the six months ended June 30, 2024. Net cash used in investing activities for the six months ended June 30, 2025 reflects purchases of property, plant and equipment of $4.2 million, expenditures for capitalized software of $0.6 million and partially offset by sales of property, plant and equipment of $1.0 million. Net cash provided by investing activities for the six months ended June 30, 2024 reflects the collection of note receivable of $3.0 million, cash acquired through FMS Acquisition of $2.6 million, proceeds from sales, and maturities of marketable securities of $1.1 million partially offset by purchases of property, plant and equipment of $1.9 million.

Previous wording

Net cash used in financing activities was $1.2 million for the three months ended March 31, 2025, compared to Net cash used in financing activities of $0.9 million for the three months ended March 31, 2024. Net cash used in financing activities for the three months ended March 31, 2025 primarily reflects repayments on debt of $0.8 million and restricted stock units settled in cash of $0.3 million. Net cash used in financing activities for the three months ended March 31, 2024 primarily reflects repayments of debt of $0.7 million.

Current wording

Net cash used in financing activities was $2.0 million for the six months ended June 30, 2025, compared to Net cash provided by financing activities of $6.7 million for the six months ended June 30, 2024. Net cash used in financing activities for the six months ended June 30, 2025 primarily reflects repayments on debt of $1.6 million and restricted stock units settled in cash of $0.4 million. Net cash provided by financing activities for the six months ended June 30, 2024 primarily reflects proceeds from issuance of Common Stock in the registered direct offering of $9.2 million, partially offset by repayments of debt of $1.5 million.

Previous wording

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. The terms of the agreements provide that the Company will manage the return to service upgrades of the Spanish Scoopers while they are owned and funded by MAB. The Company has the right, but not the obligation, to acquire each plane as it is ready to be contracted and returned to service. In the event that the Company does not purchase the aircraft within the time periods set forth in the agreements, then either party may initiate a sales process for the sale of all aircraft that have not been purchased by the Company, which sales process the Company will oversee and manage. If the aircraft are sold to a third party through such process, then the Company must pay MAB’s subsidiary a cash fee equal to the amount, if any, by which the aggregate price of the Company’s purchase options for such aircraft exceeds the consideration paid by the third-party purchaser for the same aircraft, not to exceed $15.0 million in aggregate. If the aircraft are not sold to a third party and MAB’s subsidiary has not otherwise entered into an operating lease with a third party for the aircraft, then the Company must pay MAB’s subsidiary $15.0 million.

Current wording

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. The terms of the agreements provide that the Company will manage the return to service upgrades of the Spanish Scoopers while they are owned and funded by MAB. The Company has the right, but not the obligation, to acquire each plane as it is ready to be contracted and returned to service. In the event that the Company does not purchase the aircraft within the time periods set forth in the agreements, then either party may initiate a sales process for the sale of all aircraft that have not been purchased by the Company, which sales process the Company will oversee and manage. If the aircraft are sold to a third party through such process, then the Company must pay MAB’s subsidiary a cash fee equal to the amount, if any, by which the aggregate price of the Company’s purchase options for such aircraft exceeds the consideration paid by the third-party purchaser for the same aircraft, not to exceed $15.0 million in aggregate. If the aircraft are not sold to a third party and MAB’s subsidiary has not otherwise entered into an operating lease with a third party for the aircraft, then the Company must pay MAB’s subsidiary $15.0 million. As of May 30, 2025, the Company has initiated the sales process and continues the return to service work on the remaining Spanish Scoopers. As of the quarter ended June 30, 2025, no sale has been completed, and the process remains ongoing.

Previous wording

The Omnibus Plan expires on January 23, 2033 and authorizes 17,078,863 shares of Common Stock for grant during the life of the Omnibus Plan. As of March 31, 2025, 9,289,249 shares of Common Stock remain available under the Omnibus Plan.

Current wording

The Omnibus Plan expires on January 23, 2033 and authorizes 17,078,863 shares of Common Stock for grant during the life of the Omnibus Plan. As of June 30, 2025, 9,365,896 shares of Common Stock remain available under the Omnibus Plan.

Previous wording

When we elect to perform a qualitative assessment and conclude it is more likely that the fair value of the reporting unit is greater than its carrying value, no further assessment of that reporting unit’s goodwill is necessary. Otherwise, a quantitative assessment is performed, and the fair value of the reporting unit is determined. If the carrying value of the reporting unit exceeds its fair value, an impairment loss equal to the excess is recorded. Conditions that would trigger an impairment assessment include, but are not limited to, a significant adverse change in legal factors or the business climate that could affect the value of an asset or an adverse reaction. As of the October 1, 2024 annual goodwill impairment test, the Company’s qualitative analysis indicated the fair value of the Company’s reporting units exceeded carrying value. No goodwill impairment charges were recorded for the three months ended March 31, 2025 or 2024.

Current wording

When we elect to perform a qualitative assessment and conclude it is more likely that the fair value of the reporting unit is greater than its carrying value, no further assessment of that reporting unit’s goodwill is necessary. Otherwise, a quantitative assessment is performed, and the fair value of the reporting unit is determined. If the carrying value of the reporting unit exceeds its fair value, an impairment loss equal to the excess is recorded. Conditions that would trigger an impairment assessment include, but are not limited to, a significant adverse change in legal factors or the business climate that could affect the value of an asset or an adverse reaction. As of the October 1, 2024 annual goodwill impairment test, the Company’s qualitative analysis indicated the fair value of the Company’s reporting units exceeded carrying value.

Previous wording

We follow ASC 810-10-15 guidance with respect to accounting for VIEs. These entities do not have sufficient equity at risk to finance their activities without additional subordinated financial support from other parties or whose equity investors lack any of the characteristics of a controlling financial interest. 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. For the three months ended March 31, 2025 and 2024, Northern Fire Management Services, LLC, a VIE of which the Company was identified as the primary beneficiary, is consolidated into our financial statements. Refer to “Note 2 – Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional information.

Current wording

We follow ASC 810-10-15 guidance with respect to accounting for VIEs. These entities do not have sufficient equity at risk to finance their activities without additional subordinated financial support from other parties or whose equity investors lack any of the characteristics of a controlling financial interest. 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. For the three and six months ended June 30, 2025 and 2024, Northern Fire Management Services, LLC, a VIE of which the Company was identified as the primary beneficiary, is consolidated into our financial statements. Refer to “Note 2 – Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for additional information.

Previous wording

We will use this extended transition period for complying with new or revised accounting standards that have different effective dates for public business entities and non-public business entities until the earlier of the date that we (a) are no longer an emerging growth company or (b) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. The extended transition period exemptions afforded by our emerging growth company status may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of this exemption because of the potential differences in accounting standards used. Refer to “Note 2 – Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for the recent accounting pronouncements adopted and the recent accounting pronouncements not yet adopted for the three months ended March 31, 2025 and the year ended December 31, 2024.

Current wording

We will use this extended transition period for complying with new or revised accounting standards that have different effective dates for public business entities and non-public business entities until the earlier of the date that we (a) are no longer an emerging growth company or (b) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. The extended transition period exemptions afforded by our emerging growth company status may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of this exemption because of the potential differences in accounting standards used. Refer to “Note 2 – Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report for the recent accounting pronouncements adopted and the recent accounting pronouncements not yet adopted for the three and six months ended June 30, 2025 and the year ended December 31, 2024.