On February 29, 2024, pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated November 4, 2023, by and among BigBear.ai, Pangiam Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of the Company (“Merger Sub”), Pangiam Purchaser, LLC, a Delaware limited liability company and a direct wholly-owned subsidiary of the Company (“Pangiam Purchaser”), Pangiam Ultimate Holdings, LLC, a Delaware limited liability company (the “Seller”), and Pangiam Intermediate Holdings, LLC, a Delaware limited liability company (“Pangiam Intermediate”), (i) Merger Sub merged with and into Pangiam Intermediate, with Merger Sub ceasing to exist and Pangiam Intermediate surviving as a wholly-owned subsidiary of the Company (the “First Merger”), and (ii) immediately following the First Merger, Pangiam Intermediate merged with and into Pangiam Purchaser, with Pangiam Intermediate ceasing to exist and Pangiam Purchaser continuing as a wholly-owned subsidiary of the Company (the “Second Merger”, together with the First Merger, the “Mergers”).

As consideration for the Mergers and the related transactions contemplated by the Merger Agreement, BigBear.ai issued a total of 61,838,072 shares of the Company’s common stock to Seller based on the 20-day volume-weighted average price for common

stock ending on the trading day immediately prior to the date of the Merger Agreement of $1.3439, representing an enterprise value of $70 million (which was subject to customary adjustments for indebtedness, cash, working capital and transaction expenses) (the “Purchase Price”), less $3.5 million that was held back from the Purchase Price at the time of the closing of the Mergers to cover any post-closing downward adjustments to the Purchase Price (the “Holdback Amount”). On July 2, 2024 (the “Finalization Date”), BigBear.ai issued 2,144,073 shares of common stock at $1.3905 per share (as determined according to the volume weighted average price over the 20 trading days ending immediately prior to the Finalization Date) as settlement of the final determination of the post-close adjusted Purchase Price.


	February 29, 2024, as reported at March 31, 2024		Measurement period adjustments		February 29, 2024, as reported at December 31, 2024
Holdback amount	$	3,500	$	(513)	$	2,987
Equity issued	207,776		(6)		207,770
Purchase consideration	$	211,276	$	(519)	$	210,757
Assets:
Cash	$	13,935	$	—	$	13,935
Accounts receivable	5,848		(369)		5,479
Prepaid expenses and other current assets	143		150		293
Property and equipment	635		—		635
Right-of-use assets	5,754		188		5,942
Intangible assets	39,100		(1,035)		38,065
Other non-current assets	1,772		—		1,772
Total assets acquired	$	67,187	$	(1,066)	$	66,121
Liabilities:
Accounts payable	1,137		—		1,137
Accrued expenses	2,454		36		2,490
Other current liabilities	69		(24)		45
Deferred revenue	1,148		—		1,148
Current portion of long-term lease liability	1,080		(874)		206
Long-term lease liability	6,109		(373)		5,736
Total liabilities acquired	$	11,997	$	(1,235)	$	10,762
Fair value of net identifiable assets acquired	55,190		169		55,359
Goodwill	$	156,086	$	(688)	$	155,398

The Holdback Amount is calculated for any potential differences between the estimated and final amount of cash balance, working capital and Seller transaction costs and is presented as other current liabilities on BigBear.ai’s consolidated balance sheets. The Holdback Amount will be settled in Company shares and the number of shares will be calculated based on the volume weighted-average price for the BigBear.ai Holdings, Inc. shares over the 20 trading days ending on the Merger’s closing date.

The fair value of the acquired technology and trade name was determined using the relief from royalty (“RFR”) method. The fair value of the acquired customer relationships was determined using the excess earnings method.

The acquisition was accounted for as a business combination, whereby the excess of the purchase consideration over the fair value of identifiable net assets was allocated to goodwill. The goodwill reflects the potential synergies and expansion of the Company’s offerings across product lines and markets complementary to its existing products and markets. For tax purposes, the goodwill related to the acquisition is deductible.

The results of operations of Pangiam for the period from February 29, 2024, as reported at December 31, 2024 to December 31, 2024 have been included in the results of operations for the year ended December 31, 2024. The post-acquisition net revenues and net loss included in the results of operations for the year ended December 31, 2024 were $38.7 million and $82.6 million, respectively.

The following table presents the pro forma consolidated results of operations of BigBear.ai for the year ended December 31, 2024 and the year ended December 31, 2023 as though the acquisition of Pangiam had been completed as of January 1, 2023.

The amounts included in the pro forma information are based on the historical results and do not necessarily represent what would have occurred if the business combination had taken place as of January 1, 2023, nor do they represent the results that may occur in the future. Accordingly, the pro forma financial information should not be relied upon as being indicative of the results that would have been realized had the acquisition occurred as of the date indicated or that may be achieved in the future.

The Company incurred $1.5 million of transaction expenses attributable to the acquisition of Pangiam during the year ended December 31, 2024, which have been recorded in the pro forma results for the twelve months ended December 31, 2023. The Company incurred $85.0 million of goodwill impairment as outlined in Note 8—Goodwill during the year ended December 31, 2024, which has been recorded in the pro forma results for the year ended December 31, 2024.

On April 7, 2022, the Company’s subsidiary BigBear.ai, LLC acquired 100% of the equity interest in ProModel Corporation (“ProModel Corporation”), a leader in simulation-based predictive and prescriptive analytic software for process improvement enabling organizations to make better decisions, for approximately $16.1 million, subject to certain adjustments. This acquisition complements the Company’s previous acquisition of ProModel, which closed on December 21, 2020. The acquisition was funded through a combination of cash on hand and the issuance of 649,976 shares of the Company’s common stock. ProModel Corporation is aligned under the Company’s Analytics business segment.

The purchase agreement with the sellers of ProModel Corporation also stipulates that certain funds would be held in escrow (“Indemnity Escrow Deposit”, “Distribution Withholding Deposit”, and “Adjustment Escrow Deposit”), for the benefit of the seller. Pursuant to and subject to the terms and conditions of the Escrow Agreement, the Adjustment Escrow Amount of $200 thousand the Distribution Withholding Escrow Amount of $100 thousand, and the Indemnity Escrow Amount of $100 thousand shall be held in escrow until released in accordance with the purchase agreement and the Escrow Agreement.


	April 7, 2022
Cash paid	$	8,559
Equity issued	7,501
Purchase consideration	$	16,060
Assets:
Cash	$	4,094
Accounts receivable	743
Prepaid expenses and other current assets	1,600
Contract assets	398

Property and equipment	83
Other non-current assets	21
Intangible assets	9,300
Total assets acquired	$	16,239
Liabilities:
Accounts payable	5
Accrued liabilities	7,752
Contract liabilities	1,555
Deferred tax liabilities	1,458
Total liabilities acquired	$	10,770
Fair value of net identifiable assets acquired	5,469
Goodwill	$	10,591

The results of operations of ProModel Corporation for the period from April 7, 2022 to December 31, 2022 have been included in the results of operations for the year ended December 31, 2022. The post-acquisition net revenues and net losses included in the results of operations for the year ended December 31, 2022 were $4,626 and $5,120, respectively.