Acquisition Activity

12 Months Ended

Dec. 31, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Acquisition Activity

NOTE 9 – ACQUISITION ACTIVITY

2024 Acquisition Activity

On June 28, 2024, the Company completed the acquisition of all the outstanding equity interests of Flight Test & Mechanical Solutions, Inc. (“FMS” and the “FMS Acquisition”), a turn-key provider of integration solutions for government and commercial customers including instrumentation, flight testing and airworthiness certification, for total initially estimated consideration of $21.2 million, payable in unregistered shares of Bridger’s Common Stock, with $19.0 million fair value of Common Stock consideration paid at closing to the former stockholders of FMS (consisting of 3,728,945 restricted shares of Common Stock determined based upon a volume-weighted average per-share price (“VWAP”) of the Common Stock for the 90 consecutive trading days ended June 27, 2024). The shares issued at close were issued at the fair value upon the closing date. The remaining $2.2 million of fair value Common Stock consideration that is contingent upon the achievement of certain earnout conditions and, assuming achievement of such conditions, will be issued to the former stockholders of FMS in 2025 and 2026 with the price per share determined based upon a trailing 90-day VWAP of the Common Stock at the time of each issuance. During the measurement period, the Company revised the total purchase consideration of the FMS Acquisition due to changes in working capital adjustments, closing price adjustments and a deferred tax liability adjustment. As a result, total consideration decreased by $4.8 million. These adjustments resulted in a corresponding decrease in goodwill of $4.0 million. The maximum number shares of Common Stock issuable to the former FMS stockholders as contingent earnout consideration will not exceed 5,892,509 shares in the aggregate. All of the shares of Common Stock to be issued in the FMS Acquisition will be subject to transfer restrictions for an 18-month period after each issuance, with the transfer restrictions expiring with respect to 1/18th of the total shares of Common Stock each month over the 18-month period following such issuance.

None of the shares of Common Stock issued or issuable in connection with the FMS Acquisition were registered under the Securities Act of 1933, as amended (the “Securities Act”), on the FMS Acquisition date in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. Recipients of shares of Common Stock in connection with the FMS Acquisition will have customary resale registration rights with respect to such shares of Common Stock pursuant to the terms and conditions of the FMS Acquisition.

The Company accounted for the FMS Acquisition under the acquisition method of accounting and has reported the results of operations of the FMS Acquisition as of the respective date of the FMS Acquisition. The Company based the estimated fair values of intangible assets on an income approach utilizing the relief from royalties and excess earnings methods. The income approach utilizes management’s estimates of future operating results and cash flows using a weighted average cost of capital that reflects market participant assumptions. For all other assets acquired and liabilities assumed, the fair value reflects the carrying value of the asset or liability due to their short maturity. The Company recorded the excess of the fair value of the consideration transferred in the FMS Acquisition over the fair value of net assets acquired as goodwill. The goodwill reflects our expectations of favorable future growth opportunities.

The Company has not presented pro forma combined results for the FMS Acquisition because the impact on previously reported statements of operations was not material.

The Company has performed a preliminary valuation analysis of the fair market value of the assets acquired and liabilities assumed in the FMS Acquisition. The preliminary purchase price allocation will be subject to further refinement as management continues to implement the Company’s accounting policies and refine its estimates and assumptions based on the information available at the acquisition date. The allocations of acquired intangible assets, goodwill, deferred taxes, and the analysis around revenue and accounting policy alignment are being finalized. These refinements may result in material changes to the estimated fair value of assets acquired and liabilities assumed. The estimated useful lives of acquired intangible assets are also preliminary. The final purchase price allocation will be determined when the Company has completed and fully reviewed the detailed valuations. The purchase price allocation adjustments can be made throughout the end of the Company’s measurement period, which is not to exceed one year from the acquisition date.

The following tables summarizes the FMS Acquisition consideration and the preliminary fair value estimates of assets acquired and liabilities assumed, recognized at the date of the FMS Acquisition, with preliminary purchase price allocation adjustments since the preliminary purchase price allocation as previously disclosed as of June 30, 2024:

$s in thousands	As of June 30, 2024		Net Working Capital Adjustment		Closing Price Adjustment		As of December 31, 2024
Common Stock	$	16,197	$	—	$	(3,136)	$	13,061
Working Capital Excess Shares	233		—		(59)		174
Closing Cash Shares Adjustment	1,792		(1,600)		(49)		143
Accrued Dividends Payable Adjustment	800		—		—		800
Earnout Shares	2,164		—		—		2,164
Total purchase price	$	21,186	$	(1,600)	$	(3,244)	$	16,342

$s in thousands	As of June 30, 2024		Adjustments		As of December 31, 2024
Cash and cash equivalents	2,592		—		2,592
Accounts receivable1	2,684		17		2,701
Aircraft support parts	265		—		265
Prepaid expenses and other current assets	124		—		124
Property, plant and equipment	1,014		—		1,014
Intangible assets	3,900		—		3,900
Other noncurrent assets	838		1,016		1,854
Accounts payable	(259)		—		(259)
Dividends payable	(800)		—		(800)
Deferred revenue	(90)		(90)		(180)
Accrued expenses and other current liabilities	(170)		—		(170)
Operating right-of-use current liability	—		(56)		(56)
Operating right-of-use noncurrent liability	—		(960)		(960)
Deferred tax liability	(490)		(779)		(1,269)
Total identifiable net assets	9,608		(852)		8,756
Goodwill	11,578		(3,992)		7,586
Total purchase price	$	21,186	$	(4,844)	$	16,342

1     Balance includes $1.0 million in unbilled receivable. Fair value of accounts receivable approximates the     contractual amount.

Purchase price allocation adjustments related primarily to net working capital, closing price and deferred tax liability adjustments.

Goodwill of $7.6 million arising from the FMS Acquisition is primarily attributable to the assembled workforce of FMS and expected synergies from combining operations. None of the acquired goodwill is expected to be deductible for income tax purposes. Acquired intangible assets consist of the following:

•Trade name: expected to be amortized over its useful life of 9.5 years as of the date of the FMS Acquisition. The fair value of the trade name was determined using the relief from royalty method.

•Customer relationships: expected to be amortized over its useful life of 3.5 years as of the date of the FMS Acquisition. The fair value of the customer relationships were determined using the multi-period excess earnings method.

•Contracts: expected to be amortized over its useful life of 5.5 years when placed into service. The fair value of the contracts were determined using the multi-period excess earnings method.

The transaction costs related to the acquisition were not material. The operating results of the acquisition have been included in the Company’s results of operations from the effective date of the acquisition. The amounts of revenue and operating loss of FMS included in the Company’s condensed consolidated statement of operations for the year end December 31, 2024 were $3.0 million and $0.9 million, respectively.

2023 Acquisition Activity

On September 12, 2023, the Company completed the acquisition of all outstanding equity interests of Ignis Technologies, Inc. (“Ignis” and the “Ignis Acquisition”), a fire technology company developing mission-critical intelligence and technology solutions for firefighting organizations, for total consideration of $11.6 million, payable in unregistered shares of Bridger’s Common Stock, consisting of $3.3 million payable at closing. At closing, 426,531 restricted shares of Common Stock were issued to the Ignis shareholders (determined based upon a VWAP) of the Common Stock for the 30 consecutive trading days ended September 11, 2023). The remaining $8.3 million of Common Stock consideration is contingent upon the achievement of certain operational milestones and, assuming achievement of such milestones, will be issued to the Ignis shareholders in 2025 and 2026, with the price per share determined based upon a trailing 120-day VWAP of the Common Stock at the time of each issuance. The maximum number of shares of Common Stock issuable to the Ignis shareholders as contingent earnout consideration will not exceed 8,399,198 shares in the aggregate. All of the shares of Common Stock to be issued in the Ignis Acquisition will be subject to transfer restrictions for a 12-month period after each issuance, with 1/12th of the total shares of Common Stock vesting each month over the one-year period after each issuance.

During 2024, certain performance conditions were met, resulting in a total settlement payment of $4.0 million, which was settled in shares on June 30, 2024. The excess over the initial fair value estimate was recorded as an expense in acquisition related costs in the Consolidated Statements of Operations. As of December 31, 2024, there is $3.7 million remaining of contingent consideration obligations related to the acquisition.

None of the shares of Common Stock issued or issuable in connection with the Ignis Acquisition were registered under the Securities Act on the Ignis Acquisition date in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. Recipients of shares of Common Stock in connection with the Ignis Acquisition will have customary resale registration rights with respect to such shares of Common Stock pursuant to the terms and conditions of the Ignis Acquisition.

The Company accounted for the Ignis Acquisition under the acquisition method of accounting and has reported the results of operations of the Ignis Acquisition as of the respective date of the Ignis Acquisition. The Company based the estimated fair values of intangible assets on an income approach utilizing the relief from royalties model. The income approach utilizes management’s estimates of future operating results and cash flows using a weighted average cost of capital that reflects market participant assumptions. For all other assets acquired and liabilities assumed, the fair value reflects the carrying value of the asset or liability due to their short maturity. The Company recorded the excess of the fair value of the consideration transferred in the Ignis Acquisition over the fair value of net assets acquired as goodwill. The goodwill reflects our expectations of favorable future growth opportunities. The Company expects that substantially all of the goodwill will not be deductible for federal income tax purposes.

The Company has not presented pro forma combined results for the Ignis Acquisition because the impact on previously reported statements of operations was not material.

As of December 31, 2023, the Company finalized the purchase accounting for the Ignis Acquisition. The following table summarizes the final purchase price allocation:

$s in thousands	Purchase Price Allocation
Cash and cash equivalents	$	3
Intangible assets	1,300
Accounts payable	(37)
Long-term accrued expenses and other noncurrent liabilities	(67)
Deferred tax liability	(314)
Total identifiable net assets	885
Goodwill	10,676
Total purchase price	$	11,561

Goodwill of $10.7 million arising from the Ignis Acquisition is primarily attributable to the assembled workforce of Ignis and expected synergies from combining operations. None of the acquired goodwill is expected to be deductible for income tax purposes. Acquired intangible assets consist entirely of in-process research and development (“IPR&D”) and is expected to be amortized over its useful life of five years when placed into service. The Company concluded that the IPR&D is an identifiable intangible asset that would be accounted for as a single asset in a business combination. The fair value of the IPR&D was determined using an income approach based on significant unobservable inputs.