BigBear.ai Holdings, Inc.

Note 1—Description of the Business

BigBear.ai Holdings, Inc.’s (“BigBear.ai”, “BigBear.ai Holdings”, “BigBear” or the “Company”) mission is to help deliver clarity for the world’s most complex decisions. BigBear.ai is a leading provider of Edge AI-powered decision intelligence solutions for national security, supply chain management and digital identity. Customers and partners rely on BigBear.ai’s predictive analytics capabilities in highly complex, distributed, mission-based operating environments. We are a technology-led solutions organization, providing both software and services to our customers. Unless otherwise indicated, references to “we”, “us” and “our” refer collectively to BigBear.ai Holdings, Inc. and its consolidated subsidiaries.

Note 2—Summary of Significant Accounting Policies

Basis of Presentation

We prepared these accompanying unaudited condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of SEC Regulation S-X. Accordingly, they do not include all information and notes required by GAAP for complete financial statements. Amounts presented within the condensed consolidated financial statements and accompanying notes are presented in thousands of U.S. dollars unless stated otherwise, except for percentages, units, shares, per unit and per share amounts.

In the opinion of management, these condensed consolidated financial statements reflect all adjustments that are of a normal recurring nature necessary for a fair presentation of our results of operations, financial condition and cash flows for the interim periods presented. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. We base these estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources.

Our actual results may differ materially from these estimates. Significant estimates inherent in the preparation of our condensed consolidated financial statements include, but are not limited to, accounting for revenue and cost recognition; evaluation of goodwill; intangible assets; and other assets for impairment; income taxes; equity-based compensation; fair value measurements; and contingencies. We eliminate intercompany balances and transactions in consolidation.

The results of operations for the interim periods presented are not necessarily indicative of results to be expected for the full year or future periods. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Recent Accounting Pronouncements

Recent Accounting Pronouncements Adopted

In July 2025, the FASB issued Accounting Standards Update 2025-05, Financial Instruments - Credit Losses - Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. The Company adopted ASU 2025-05 prospectively for interim and annual periods on January 1, 2026. The adoption of ASU 2025-05 did not have a material impact on the Company’s financial statements and disclosures.

Note 3—Restructuring Charges

The following table presents the employee separation costs, net of tax, associated with the Company’s organizational restructuring for the following periods, as well as the unpaid employee separation costs remaining related to the organizational restructurings at the end of each period:

The table below presents the activity in accrued restructuring charges for the three months ended March 31, 2026:

The restructuring expenses for all periods presented are recorded in the restructuring charges line on the condensed consolidated statements of operations and comprehensive loss. The restructuring accrual is included in the other current liabilities line in the condensed consolidated balance sheets.

Note 4—Business Combinations

Ask Sage Acquisition

On December 31, 2025, pursuant to the agreement and plan of merger (“Ask Sage Merger Agreement”), dated November 10, 2025, by and among Atlas 2025 Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of the Company (“Ask Sage Merger Sub”) and Ask Sage, Inc., a Delaware corporation (“Ask Sage” or “Seller”) and Shareholder Representative Services LLC, a Colorado limited liability company solely in its capacity as the representative of the Ask Sage securityholders, pursuant to which, among other matters, Ask Sage Merger Sub merged with and into Ask Sage with Ask Sage Merger Sub ceasing to exist and Ask Sage surviving as a wholly-owned subsidiary of the Company (“Ask Sage Merger”).

Purchase consideration for the Ask Sage Merger and the related transactions as contemplated by the Ask Sage Merger Agreement of $272.1 million, which was subject to customary adjustments for indebtedness, cash, working capital and transaction expenses, was comprised of $262.4 million of cash paid at closing of the Ask Sage Merger, $5.2 million of cash paid shortly after closing, and $4.5 million withheld under the terms of the Ask Sage Merger Agreement at the time of the closing to cover any post-closing adjustments to the purchase price (“Adjustment Escrow Amount”). The Company is required to segregate the Adjustment Escrow Amount from its corporate funds and is restricted from using it for operating expenses or any other corporate purposes. The cash withheld for the Adjustment Escrow Amount is presented in restricted cash on the Company’s condensed consolidated balance sheets at March 31, 2026. The Adjustment Escrow Amount is presented in other current liabilities on the Company’s condensed consolidated balance sheets at March 31, 2026.

The following table summarizes the fair value of the consideration transferred and the fair values of the major classes of assets acquired and liabilities assumed as of the acquisition date. These fair values were based on management’s estimates and assumptions; however, certain working capital amounts, income taxes, and residual goodwill remain preliminary and are subject to adjustment as additional information is obtained about the facts and circumstances that existed as of the acquisition date. The final determination of the fair values, related income tax impacts and residual goodwill will be completed as soon as practicable, and within the measurement period of up to one year from the acquisition date as permitted under GAAP. Any adjustments to provisional amounts that are identified during the measurement period will be recorded in the reporting period in which the adjustment is determined.

(1) Includes adjustments to net working capital and the estimated income tax provision.

The following table summarizes the intangible assets acquired by class and the weighted-average estimated useful lives:

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 fair value of the acquired licenses and certifications was determined using the cost replacement 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 not deductible.

The following table presents the net revenues, net loss and transaction expenses related to the Ask Sage Merger included in the results of operations for the following period:

Pro Forma Financial Data (Unaudited)

The following table presents the pro forma consolidated results of operations of BigBear.ai for the three months ended March 31, 2025, as though the acquisition of Ask Sage had been completed as of January 1, 2024.

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 Ask Sage business combination had taken place as of January 1, 2024, 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.

Transaction expenses of $2.2 million attributable to the acquisition of Ask Sage have been recorded in the pro forma results for the three months ended March 31, 2025.

Acquisition of CargoSeer

On January 16, 2026, the Company acquired certain assets and liabilities of CargoSeer Ltd (“CargoSeer”), an Israel-based leader in unified AI decision support technology for customs and border operations. Purchase consideration for the acquisition of CargoSeer of $5.0 million, which was subject to net working capital adjustments for indebtedness, was paid in cash during the three months ended March 31, 2026. 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 preliminary fair value of the assets acquired and liabilities assumed is primarily comprised of acquired technology intangible assets of $4.5 million with an estimated useful life ofseven years and customer relationships intangible assets of $0.5 million with an estimated useful life offour years. The acquired net working capital balances and goodwill areimmaterial.

The net revenues and net loss included in the results of operations are immaterial for the three months ended March 31, 2026. The pro forma results of operations of the Company would not be materially different as a result of the acquisition of CargoSeer and therefore are not presented. Transaction expenses of $0.6 million attributable to the acquisition of CargoSeer have been recorded in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2026.

Note 5—Fair Value of Financial Instruments

Cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses and other current assets, accounts payable, short-term debt, accrued liabilities and other current liabilities are reflected on the condensed consolidated balance sheets at amounts that approximate fair value because of the short-term nature of these financial assets and liabilities.

Certain warrants that were issued at BigBear.ai’s initial public offering (“IPO Private Warrants”), warrants issued in BigBear.ai’s 2023 and 2024 private placement warrants (“PIPE Warrants”), and warrants issued in BigBear.ai’s 2023, 2024 and 2025 registered direct offering warrants (“RDO Warrants”) are valued using a modified Black-Scholes option pricing model (“OPM”). The conversion options of the 2026 Convertible Notes (“2026 Notes Conversion Option”) and 2029 Convertible Notes (“2029 Notes Conversion Option”) are valued using a binomial lattice convertible bond model and discounted cash flow method, considering the traded price of the 2026 Convertible Notes and 2029 Convertible Notes, respectively, and other unobservable input assumptions. The 2026 Notes Conversion Option, 2029 Notes Conversion Option, IPO Private Warrants, PIPE Warrants and RDO Warrants are considered to be Level 3 fair value measurements. See Note 17—Derivatives for information on the Level 3 inputs used to value the IPO Private Warrants, PIPE Warrants, RDO Warrants, 2026 Notes Conversion Option, and the 2029 Notes Conversion Option.

Valuations of available for sale investments are provided by independent pricing service providers who have experience in valuing these securities and are compared to the average of quoted market prices obtained from independent brokers. These fair value measurements based on quoted prices in markets that are not active or for which all significant inputs are observable, directly or indirectly, and are considered to be Level 2 fair value measurements.

The table below presents the financial assets and liabilities measured at fair value:

The changes in the fair value of the Level 3 liabilities are as follows:

Note 6—Investments in Debt Securities

The Company’s investments in debt securities comprise U.S. Treasury securities and corporate bonds and are classified as available for sale (“AFS”), and recorded at fair value. Unrealized gains and losses on AFS investments, net of applicable taxes, are reported in other comprehensive (loss) income.

The table below summarizes the Company’s AFS investments:

Interest income on the AFS investments of $3.4 million wasrecognized duringthe three months ended March 31, 2026, and is presented ininterest income on thecondensed consolidated statements of operations and comprehensive loss. There wereno sales of AFS investments during the three months ended March 31, 2026.

The Company hadno investments in debt securities duringthe three months ended March 31, 2025.

The table below presents the contractual maturity by major class of AFS investments. In some cases, the issuers may have the right to call obligations without penalties prior to the contractual maturity date.

Note 7—Goodwill

There wereno goodwill impairment charges recorded during the three months ended March 31, 2026 and March 31, 2025. Accumul ated impairment losses to goodwill were$209.2 million as of March 31, 2026.

The table below presents the changes in carrying amount of goodwill:

(1) Refer to Note 4—Business Combinations for details on the measurement period adjustments to goodwill.

Note 8—Intangible Assets, net

The intangible asset balances, accumulated amortization, and accumulated impairment are as follows:

The table below presents all amortization and impairment expense related to all intangible assets as well as amortization expense related to capitalized software for the following periods:

The table below presents the estimated amortization expense on intangible assets for the next five years and thereafter as of March 31, 2026:

Note 9—Prepaid Expenses and Other Current Assets

The table below presents details on prepaid expenses and other current assets:

(1) Costs incurred to fulfill a contract in advance of the contract being awarded are included in prepaid expenses and other current assets if we determine that those costs relate directly to a contract or to an anticipated contract that we can specifically identify and contract award is probable, the costs generate or enhance resources that will be used in satisfying performance obligations, and the costs are recoverable (referred to as pre-contract costs).

Note 10—Accrued Liabilities

The table below presents details on accrued liabilities:

(1) Inclusive of employer portion of taxes related to the vesting of equity awards and accrued subcontractor labor.

Note 11—Debt

The table below presents the Company’s debt balances:

2026 Convertible Notes

On December 7, 2021, the Company issued $200.0 million of unsecured convertible notes (the“2026 Convertible Notes”) to certain investors. The 2026 Convertible Notes bear interest at a rate of 6.0% per annum, payable semi-annually, and not including any interest payments that are settled with the issuance of shares, were initially convertible into 17,391,304 shares of the Company’s common stock at an initial conversion price of $11.50 (the “Conversion Price”). The Conversion Price is subject to adjustments. On May 29, 2022, pursuant to the 2026 Convertible Notes indenture, the conversion rate applicable to the 2026 Convertible Notes was adjusted to 94.2230 (previously 86.9565) shares of common stock per $1,000 principal amount of 2026 Convertible Notes because the average of the daily volume-weighted average price of the common stock during the preceding 30 trading days was less than $10.00 (the “Conversion Rate Reset”). After giving effect to the Conversion Rate Reset, the Conversion Price is $10.61 and the 2026 Convertible Notes are convertible into 18,844,600 shares, not including any interest payments that are settled with the issuance of shares. The 2026 Convertible Note financing matures on December 15, 2026.

The Company may, at its election and subject to certain conditions, force conversion of the 2026 Convertible Notes after December 15, 2022 and prior to October 7, 2026 if the trading price of the Company’s common stock exceeds 130% of the conversion price for 20 out of the preceding 30 trading days and the 30-day average daily trading volume ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to $3.0 million for the firsttwo years after the initial issuance of the 2026 Convertible Notes and $2.0 million thereafter. In connection with such forced conversion, the conversion rate for the 2026 Convertible Notes will be increased but no Interest Make-Whole Payment (as defined below) will be made in connection with such forced conversion. In the event that a holder of the 2026 Convertible Notes elects to convert the 2026 Convertible Notes (a) prior to December 15, 2024, the Company will be obligated to pay an amount equal totwelve months of interest or (b) on or after December 15, 2024 but prior to December 15, 2025, any accrued and unpaid interest plus any remaining amounts that would be owed up to, but excluding, December 15, 2025 (such interest payments, “Interest Make-Whole Payments”). The Interest Make-Whole Payments will be payable in cash or shares of the common stock, depending on the average of the daily volume-weighted average price per share of the Company’s common stock for a specified period immediately prior to such conversion, as set forth in the Indenture.

Following certain corporate events that occur prior to the maturity date or if the Company exercises its mandatory conversion right, the conversion rate will be increased in certain circumstances for a holder who elects, or has been forced, to convert its 2026 Convertible Notes in connection with such corporate events or such mandatory conversion.

If a Fundamental Change (as defined in the 2026 Convertible Notes indenture) occurs prior to the maturity date, holders of the 2026 Convertible Notes will have the right to require the Company to repurchase all or any portion of their 2026 Convertible Notes in principal amounts ofone thousand dollars or an integral multiple thereof, at a repurchase price equal to the principal amount of the 2026 Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.

On May 29, 2022, pursuant to the conversion rate adjustment provisions in the indenture, governing the 2026 Convertible Notes, the Conversion Price was adjusted to $10.61 (or 94.2230 shares of common stock perone thousand dollars of principal amount of Convertible Notes). Subsequent to the adjustment, the 2026 Convertible Notes are convertible into 18,844,600 shares, not including any interest payments that are settled with the issuance of shares.

The 2026 Convertible Notes require the Company to meet certain financial and other covenants. As of March 31, 2026, the

Company was in compliance with all covenants related to the 2026 Convertible Notes.

The 2026 Convertible Notes contain conversion features that meet the definition of a derivative and require separate accounting treatment from the debt host. Refer to Note 17—Derivatives for more information on the 2026 Notes Conversion Option.

The following table presents the carrying amounts and fair values associated with the 2026 Convertible Notes as of March 31, 2026. The fair value of the 2026 Convertible Notes is considered to be a Level 3 fair value measurement.

2029 Convertible Notes

On December 19, 2024, the Company entered into privately negotiated exchange agreements (each, an “Exchange Agreement”) with a limited number of holders of the Company’s 2026 Convertible Notes, to exchange the 2026 Convertible Notes for new senior secured convertible notes due 2029 (the “2029 Convertible Notes”, together with the 2026 Convertible Notes, the “Convertible Notes”). The Company exchanged (the “Exchange Transaction”) approximately $124.6 million principal amount of the 2026 Convertible Notes for $182.3 million in aggregate principal amount of the Company’s 2029 Convertible Notes and approximately $0.4 million in cash, with such cash payment representing the accrued and unpaid interest on the 2026 Convertible Notes at the time of the Exchange Transaction. The 2029 Convertible Notes bear interest at a rate of (i)6.0% per annum, if interest is paid in cash and (ii)7.0% per annum, if the Company elects, subject to certain conditions, to pay interest in kind with shares of its common stock. To the extent that the certain liquidity conditions of the Company and its subsidiaries are not satisfied as of the last business day of any calendar month, then with respect to the period applicable to the interest payment date immediately following the month in which such liquidity condition is not satisfied, the interest rate will be (i)9.00% per annum, if interest is paid in cash and (ii)10.00% per annum, if the Company elects, subject to certain conditions, to pay interest in kind with shares of its common stock (it being understood that such increased rate shall apply solely for such six-month period applicable to such interest payment date). Interest is payable semi-annually. The conversion rate is 281.4491 shares of common stock per $1,000 principal amount of 2029 Convertible Notes, which represents an initial conversion price of $3.55 per share of the Company’s common stock. The conversion rate and the conversion price are subject to adjustments. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the 2029 Convertible Notes Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

The exchange was accounted for as an extinguishment of the 2026 Convertible Notes and the 2029 Convertible Notes were recognized at fair value, which approximated the carrying amount of the principal balances exchanged. For the year ended December 31, 2024, the Company recognized a loss on extinguishment of $31.3 million on the consolidated statements of operations related to the unamortized debt issuance costs of the exchanged 2026 Convertible Notes. The Company was in compliance with all covenants through the extinguishment of the exchanged 2026 Convertible Notes.

The 2029 Convertible Notes were issued pursuant to, and are governed by, an indenture (the “2029 Convertible Notes Indenture”), dated as of December 27, 2024. The 2029 Convertible Notes will be fully and unconditionally guaranteed, on a senior, secured basis, by the Company and certain of its existing and future direct and indirect subsidiaries, subject to certain exceptions (the “Guarantors”), and will initially be secured on a first-priority basis by substantially all assets of the Company and such Guarantors, subject to certain exceptions.

Upon completion of the Exchange Transaction, the aggregate principal amount of the 2026 Convertible Notes outstanding was $17.7 million. The Company did not receive any cash proceeds from the issuance of the 2029 Convertible Notes pursuant to the Exchange Transactions.

During the three months ended March 31, 2025, $57.7 million of the 2029 Convertible Notes were voluntarily converted by noteholders following the Exchange Transaction. These conversions have resulted in the issuance of 16.7 million shares of common stock.

On January 2, 2026, the Company announced that all 2029 Convertible Notes outstanding as of January 16, 2026 (the “Redemption Date”), would be redeemed for cash at a price equal to the principal amount of such notes plus accrued and unpaid interest, as provided by the terms of the Exchange Agreement. All of the 2029 Convertible Notes, with a par value of$124.6 million, were voluntarily converted by noteholders prior to the Redemption Date. These conversions resulted in the issuance of approximately 38.1 million shares of common stock in exchange for the retirement of the respective notes.

Holders who converted their 2029 Convertible Notes were also entitled to an interest make-whole payment of up to 7.5% of the aggregate principal amount of notes converted, subject to reduction as further described in the 2029 Convertible Notes Indenture. Interest make-whole payments were paid in cash and shares of common stock, depending on the average of the daily volume-weighted average price per share of the Company’s common stock for a specified period immediately prior to the conversion. Payment of the interest make-whole in shares was at a price equal to 95% of such average of the daily volume-weighted average price.

The 2029 Convertible Notes contained conversion features that met the definition of a derivative and required separate accounting treatment from the debt host. Refer to Note 17—Derivatives for more information on the 2029 Notes Conversion Option.

The table below summarizes the components of interest expense for the following periods:

Note 12—Leases

The Company is obligated under operating leases for certain real estate and office equipment assets. The Company’s finance leases are not material. Certain leases contained predetermined fixed escalation of minimum rents at rates ranging from 2.5% to 10.0% per annum and remaining lease terms of up toten years, some of which include renewal options that could extend certain leases to up to an additional five years.

The following table presents supplemental information related to leases:

The table below summarizes total lease costs for the following periods:

(1)As of March 31, 2026 and March 31, 2025, the Company has subleased three andthree of its real estate leases, respectively.

The following table presents supplemental cash flow and non-cash information related to leases:

As of March 31, 2026, the future annual minimum lease payments for operating leases are as follows:

Note 13—Income Taxes

The table below presents the effective income tax rate for the following periods:

The Company was taxed as a corporation for federal, state and local income tax purposes for the three months ended March 31, 2026 and March 31, 2025. The effective tax rate for the three month periods ended March 31, 2026 and March 31, 2025 differ from the U.S. federal income tax rate of 21.0% primarily due to foreign, state, and local income taxes, permanent differences between book and taxable income, certain discrete items, and the change in valuation allowance.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. We have assessed its impact on our financial statements and OBBBA did not have a material impact on our financial statements.

Note 14—Commitments and Contingencies

Contingencies in the Normal Course of Business

Under certain contracts with the U.S. government and certain governmental entities, contract costs, including indirect costs, are subject to audit by and adjustment through negotiation with governmental representatives. Revenue is recorded in amounts expected to be realized on final settlement of any such audits.

Legal Proceedings

The Company is subject to litigation, claims, investigations and audits arising from time to time in the ordinary course of business. Although legal proceedings are inherently unpredictable, the Company intends to defend itself vigorously with respect to any matters currently pending against it. The outcome of these matters, individually and in the aggregate, is not expected to have a material impact on the Company’s consolidated balance sheets, consolidated statements of operations, or cash flows. As of March 31, 2026, the Company has accrued $0.3 million related to various ongoing legal disputes. The $0.3 million balance as of March 31, 2026, reflects management’s best estimate as of that date and is net of any anticipated amounts recoverable through insurance.

Note 15—Stockholders’ Equity

Common Stock

The table below presents the details of the Company’s authorized common stock as of the following periods:

Treasury Stock

These shares are measured at cost and presented as treasury stock on the condensed consolidated balance sheets and condensed consolidated statements of stockholders’ equity (deficit).

During the three months ended March 31, 2026, we retired 9,952,803 shares of treasury stock. As a result of this retirement, we reclassified a total of $57.4 million from treasury stock to additional paid-in capital, on the condensed consolidated balance sheets and condensed consolidated statements of stockholders’ equity (deficit).

Dividend Rights

Subject to applicable law and the rights, if any, of the holders of any outstanding series of the Company’s preferred stock or any class or series of stock having a preference over or the right to participate with the Company’s common stock with respect to the payment of dividends, dividends may be declared and paid ratably on the Company’s common stock out of the assets of the Company that are legally available for this purpose at such times and in such amounts as the Company’s Board of Directors (the “Board”) in its discretion shall determine.

Voting Rights

Each outstanding share of the Company’s common stock is entitled toone vote on all matters submitted to a vote of stockholders. Holders of shares of common stock do not have cumulative voting rights.

Conversion or Redemption Rights

The Company’s common stock is neither convertible nor redeemable.

Liquidation Rights

Upon the Company’s liquidation, the holders of the Company’s common stock are entitled to receive pro rata the Company’s assets that are legally available for distribution, after payment of all debts and other liabilities and subject to the prior rights of any holders of the Company’s preferred stock then outstanding.

Preferred Stock

The table below presents the details of the Company’s authorized preferred stock as of the following periods:

The Company’s Board may, without further action by the Company’s stockholders, from time to time, direct the issuance of shares of preferred stock in series and may, at the time of issuance, determine the designations, powers, preferences, privileges and relative participating, optional or special rights as well as the qualifications, limitations or restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights of the Company’s common stock. Satisfaction of any dividend preferences of outstanding shares of the Company’s preferred stock would reduce the amount of funds available for the payment of dividends on shares of the Company’s common stock. Upon the affirmative vote of a majority of the total number of directors then in office, the Company’s Board may issue shares of the Company’s preferred stock with voting and conversion rights which could adversely affect the holders of shares of the Company’s common stock.

Note 16—At-the-Market Offering

In April 2023, the Company filed an automatic shelf registration statement on Form S-3 (the “2023 Shelf Registration Statement”) with the SEC registering an indeterminate amount of its common stock, preferred stock, warrants, rights, and units (collectively, “Company securities”), which the SEC declared effective on April 21, 2023. Pursuant to the Company’s controlled equity offering agreement (the “Controlled Equity Offering Agreement”) dated as of May 10, 2024, with Cantor Fitzgerald & Co. (“Cantor”), as sales agent, under an “at the market” offering program (the “ATM Program”), the Company agreed to pay commissions to Cantor as its sales agent for their service with respect to the sales of common stock through the ATM Program.

Pursuant to the Controlled Equity Offering Agreement, the Company may offer and sell common stock having an aggregate offering price of up to $150.0 million from time to time to or through Cantor, subject to the Company’s compliance with applicable laws and the applicable requirements of the Controlled Equity Offering Agreement. The Controlled Equity Offering Agreement stipulates that the Company will pay Cantor a commission of up to 3.0% of the gross offering proceeds of any shares of common stock sold to or through Cantor pursuant to the Controlled Equity Offering Agreement. The Company intends to use the net proceeds from sales of common stock issued under the ATM Program for general corporate and working capital purposes. The timing of any sales and the number of shares sold will depend on a variety of factors to be determined and considered by the Company. The Company is not obligated to sell any shares under the Controlled Equity Offering Agreement.

During the three months ended March 31, 2025, the Company sold 1,936,000 shares of common stock under the ATM Program for an aggregate offering price of $6.6 million. Total issuance costs related to the ATM Program were approximately $0.1 million, resulting in aggregate net proceeds of approximately $6.5 million during the three months ended March 31, 2025.

During the remainder of the year ended December 31, 2025, the Company filed various prospectus supplements to the 2023 Shelf Registration Statement which allowed the Company to sell, from time to time and at its discretion, Company securities having an aggregate offering price of up to $487.1 million including shares of common stock that may be sold pursuant to the Company’s Controlled Equity Offering Agreement (the “Sales Agreements”). During the remainder of the year ended December 31, 2025, the Company sold 140,317,313 shares of common stock under the Sales Agreements for an aggregate offering price of $630.5 million. Total issuance costs related to the ATM Program were approximately $8.2 million, resulting in aggregate net proceeds of approximately $622.3 million.

The sales commissions and expenses related to each of the above Common Stock ATM Offerings are considered direct and incremental costs and are charged against additional paid-in capital on the condensed consolidated balance sheets in the period in which the corresponding shares are issued and sold.

As of March 31, 2026, no capacity remained available under the 2023 Shelf Registration Statement.

Note 17—Derivatives

2026 Notes Conversion Option

On December 7, 2021, the Company issued $200 million of unsecured convertible notes (the“2026 Convertible Notes”) to certain investors. The 2026 Convertible Notes contain conversion features that meet the definition of a derivative and require separate accounting treatment from the debt host (the “2026 Notes Conversion Option”).

The table below presents the value of the 2026 Notes Conversion Option under the Binomial Lattice Model using the following assumptions as of the following dates:

As of March 31, 2026, the 2026 Notes Conversion Option had a fair value of $0.3 million and is presented on thecondensed consolidated balance sheets within derivative liabilities. The following was recognized as a result of the change in fair value and is presented in net increase in fair value of derivatives on the condensed consolidated statements of operations and comprehensive loss:

As of March 31, 2026, the remaining principal of the 2026 Convertible Notes outstanding was$17.7 million.

2029 Notes Conversion Option

On December 19, 2024, the Company entered into privately negotiated Exchange Agreements with a limited number of holders of the Company’s 2026 Convertible Notes, to exchange the 2026 Convertible Notes for 2029 Convertible Notes (the “2029 Notes Conversion Option”). The 2029 Convertible Notes contain conversion features that meet the definition of a derivative and require separate accounting treatment from the debt host.

The table below presents the value of the 2029 Notes Conversion Option under the as-converted basis using the following assumptions as of the following dates:

During the three months ended March 31, 2025, $57.7 million of the 2029 Convertible Notes were voluntarily converted by noteholders following the Exchange Transaction. These conversions resulted in the issuance of approximately 16.7 million shares of common stock in exchange for the retirement of the respective notes. Upon conversion of the notes, there was a mark-to-market adjustment to increase the debt conversion option derivative liability, resulting in a loss of $59.9 million, which is presented in net increase in fair value of derivatives on the condensed consolidated statements of operations and comprehensive loss. In conjunction with the conversion, a loss of $2.6 million was recognized related to the convertible debt discount and unamortized deferred financing costs, and is presented in loss on extinguishment of debt on the condensed consolidated statements of operations and comprehensive loss

During the three months ended March 31, 2026, $124.6 million of the 2029 Convertible Notes were voluntarily converted by noteholders following the Exchange Transaction. These conversions resulted in the issuance of approximately 38.1 million shares of common stock in exchange for the retirement of the respective notes. Upon conversion of the notes, there was a mark-to-market adjustment to increase the debt conversion option derivative liability, resulting in a loss of $28.3 million, which is presented in net increase in fair value of derivatives on the condensed consolidated statements of operations and comprehensive loss. In conjunction with the conversion, a loss of $15.8 million was recognized related to the convertible debt discount and unamortized deferred financing costs, and is presented in loss on extinguishment of debt on the consolidated statements of operations.

The following was recognized as a result of the change in fair value and is presented in net increase in fair value of derivatives on the condensed consolidated statements of operations and comprehensive loss:

2024 RDO Warrants

In consideration for the immediate and full exercise of the RDO warrants, on February 28, 2024, the RDO Investor received a new unregistered common stock purchase warrant to purchase up to an aggregate of 5,800,000 of the Company’s common stock (the “2024 RDO warrants”) in a private placement. The 2024 RDO warrants became exercisablesix months after issuance and had afive-year term, with an exercise price per share equal to$3.78.

On February 5, 2025, the Company entered into a warrant exercise agreement (the “RDO Warrant Exercise Agreement”) with an existing accredited investor (the “RDO Investor”) to exercise in full the outstanding 2024 RDO warrants to purchase up to an aggregate of 5,800,000 shares of the Company’s common stock for gross proceeds of$21.9 million. Upon settlement of the RDO warrants, a loss of $14.3 million was recognized for the year ended March 31, 2025 and is presented in net increase in fair value of derivatives on the condensed consolidated statements of operations and comprehensive loss.

The following was recognized as a result of the change in fair value and ispresented innet increase in fair value of derivatives on thecondensed consolidated statements of operations and comprehensive loss:

2025 RDO Warrants

In consideration for the immediate and full exercise of the 2024 RDO warrants, on February 5, 2025, the RDO Investor received a new unregistered common stock purchase warrant to purchase up to an aggregate of 3,770,000 of the Company’s common stock (the “2025 RDO warrants”) in a private placement. The 2025 RDO warrants will become exercisablesix months after issuance and have afive-year term, with an exercise price per share equal to$9.00.

The table below presents the value of the 2025 RDO warrants under the Black-Scholes OPM using the following assumptions as of the following dates:

As of March 31, 2026, the 2025 RDO warrants had a fair value of$9.6 millionand is presented on thecondensed consolidated balance sheets within derivative liabilities. The following was recognized as a result of the change in fair value and is presented in net increase in fair value of derivatives on the condensed consolidated statements of operations and comprehensive loss:

As of March 31, 2026 there were 3,770,000 2025 RDO warrants issued and outstanding.

2024 PIPE Warrants

In consideration for the immediate and full exercise of the 2023 PIPE warrants, on March 5, 2024, the PIPE Investor received a new unregistered common stock purchase warrant to purchase up to an aggregate of 9,000,000 shares of the Company’s common stock (the “2024 PIPE warrant”) in a private placement. The 2024 PIPE warrants became exercisablesix months after issuance and had afive-year term, with an exercise price per share equal to$4.75.

On February 10, 2025, the Company entered into a warrant exercise agreement (the “PIPE Warrant Exercise Agreement”) with an existing accredited investor (the “PIPE Investor”) to exercise 4,500,000 of the outstanding PIPE warrants to purchase up to an aggregate of 9,000,000 shares of the Company’s common stock for gross proceeds of$21.4 million. Upon settlement of the PIPE warrants, a gain of $0.3 million was recognized as a result of the change in fair value for the three months ended March 31, 2025 and is presented in net increase in fair value of derivatives on the condensed consolidated statements of operations and comprehensive loss.

On February 11, 2025, the Company entered into an additional PIPE Warrant Exercise Agreement with the same PIPE Investor to exercise the remaining 4,500,000 of the outstanding PIPE warrants to purchase up to an aggregate of 9,000,000 shares of the Company’s common stock for gross proceeds of$21.4 million. Upon settlement of the PIPE warrants, a gain of $0.1 million was recognized as a result of the change in fair value for three months ended March 31, 2025 and is presented in net increase in fair value of derivatives on the condensed consolidated statements of operations and comprehensive loss.

The following was recognized as a result of the change in fair value and ispresented innet increase in fair value of derivatives on thecondensed consolidated statements of operations and comprehensive loss:

IPO Public Warrants

Each warrant issued in connection with the Company’s initial public offering (the “IPO public warrants”) entitles the registered holder to purchaseone share of common stock at a price of $11.50 per share, subject to adjustment. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of common stock. This means only a whole warrant may be exercised at a given time by a warrant holder. The warrants will expire on December 7, 2026, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

The Company may call the IPO public warrants for redemption as follows: (1) in whole and not in part; (2) at a price of $0.01 per warrant; (3) upon a minimum of 30 days’ prior written notice of redemption; (4) if there is an effective registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus available throughout the 30-day notice period; and (5) only if the last reported closing price of the common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

If the Company calls the IPO public warrants for redemption, management will have the option to require all holders that wish to exercise the Company IPO public warrants to do so on a “cashless basis.”

The exercise price and number of shares of common stock issuable upon exercise of the IPO public warrants may be adjusted in certain circumstances including stock dividends, stock splits, extraordinary dividends, consolidation, combination, reverse stock split or reclassification of shares of the Company’s common stock or other similar event. In no event will the Company be required to net cash settle the warrant shares.

The table below presents the Company’s IPO public warrants issued and outstanding as of the following periods:

IPO Private Warrants

The terms and provisions of the IPO public warrants above also apply to the private warrants issued by the Company (“IPO private warrants”). If the IPO private warrants are held by holders other than GigAcquisitions4, LLC (“Sponsor”), Oppenheimer & Co. Inc. and Nomura Securities International, Inc. (together, the“Underwriters”), or any respective permitted transferees, the IPO private warrants will be redeemable by the Company and exercisable by the holders on the same basis as the IPO public warrants. The Sponsor, the Underwriters and any respective permitted transferees have the option to exercise the IPO private warrants on a cashless basis.

The table below presents the value of the IPO private warrants under the Black-Scholes OPM using the following assumptions as of the following dates:

As of March 31, 2026, the IPO private warrants had a fair value of $— million and is presented on the condensed consolidated balance sheets within derivative liabilities. The following was recognized as a result of the change in fair value and is presented in net increase in fair value of derivatives on the condensed consolidated statements of operations and comprehensive loss:

The table below presents the Company’s IPO private warrants issued and outstanding as of the following periods:

Note 18—Equity-Based Compensation

Class B Unit Incentive Plan

In February 2021, the Company’s former parent, BBAI Ultimate Holdings, LLC (“Former Parent”) adopted a compensatory benefit plan (the“Class B Unit Incentive Plan”) to provide incentives to directors, managers, officers, employees, consultants, advisors and/or other service providers of the Company’s Former Parent or its subsidiaries in the form of the Former Parent’s Class B Units (“Incentive Units”). Incentive Units have a participation threshold of $1.00 and are divided into three tranches (“Tranche I,” “Tranche II,” and “Tranche III”). Tranche I Incentive Units are subject to performance-based, service-based and market-based conditions. The grant date fair value for the Incentive Units was $5.19 per unit.

On July 29, 2021, the Company’s Former Parent amended the Class B Unit Incentive Plan so that the Tranche I and the Tranche III Incentive Units immediately became fully vested, subject to continued employment or provision of services, upon the closing of the transaction stipulated in the Agreement and Plan of Merger (the“Gig Business Combination Agreement”) dated June 4, 2021. The Company’s Former Parent also amended the Class B Unit Incentive Plan so that the Tranche II Incentive Units will vest on any liquidation event, as defined in the Class B Unit Incentive Plan, rather than only upon the occurrence of an Exit Sale (as defined therein), subject to the market-based condition stipulated in the Class B Unit Incentive Plan prior to its amendment. The modification date fair value of the Incentive Units was $9.06 per unit.

During the three months ended March 31, 2025, the Company’s Former Parent disposed of its interest in BigBear. The liquidity event triggered the measurement of the market-related conditions of the unvested Tranche II Incentive Units. The market conditions were not met, and as a result, all unvested Incentive Units were forfeited.

Stock Options

On December 7, 2021, the Company adopted the BigBear.ai Holdings, Inc. 2021 Long-Term Incentive Plan (the“Plan”). The purpose of the Plan is to promote the long-term success of the Company and the creation of stockholder value by providing eligible employees, prospective employees, consultants and non-employee directors of the Company the opportunity to receive stock- and cash-based incentive awards.

Pursuant to the Plan, the Company’s Board of Directors grants certain grantees stock options (“Stock Options”) to purchase shares of the Company’s common stock. The Stock Options vest over four years with 25% vesting on the one year anniversary of the grant date and 6.25% vesting on the last day of each calendar quarter thereafter until the grant is fully vested. Vesting is contingent upon continued employment or service to the Company and is accelerated in the event of death, disability, or a change in control, subject to certain conditions; both the vested and unvested portion of a grantee’s Stock Options will be immediately forfeited and cancelled if the grantee ceases employment or service to the Company. The Stock Options expire on the 10 th anniversary of the grant date.

No Stock Options were granted during the three months ended March 31, 2026.

The table below presents the activity and other information on the outstanding stock options:

Restricted Stock Units

During the three months ended March 31, 2026, pursuant to the Plan, the Company’s Board communicated the key terms and committed to grant Restricted Stock Units (“RSUs”) to certain employees and certain nonemployee directors and consultants. The Company granted 6,262,159 RSUs to employees andzero RSUs to nonemployee directors during the three months ended March 31, 2026. RSUs granted to employees generally vest over four years, with 25% vesting on the one year anniversary of the grant date and then 6.25% per each quarter thereafter on the two, three and four year anniversary of the grant date. RSUs granted to nonemployee directors vest 25% each quarter following the grant date or 100% upon the first anniversary of the grant date. Vesting of RSUs is accelerated in the event of death, disability, or a change in control, subject to certain conditions.

The table below presents the activity and other information on the outstanding RSUs:

Performance Stock Units

Pursuant to the Plan, the Company’s Board communicated the key terms and granted Performance Stock Units (“PSUs”) to certain employees. The Company grants PSUs to certain employees with performance measures specific to the role of that employee or as a retention incentive (“Discretionary PSUs”). During the three months ended March 31, 2026, the Company grantedno Discretionary PSUs. The Company granted zero Short-Term Incentive PSUs (“STI PSUs”) to employees, which contain performance measures based on a combination of the Company’s financial performance as well as the individual’s personal performance. The number of STI PSUs that will vest is based on the achievement of the performance criteria during each respective annual measurement period, provided that the employees remain in continuous service on each vesting date. Vesting will not occur unless a minimum performance criteria threshold is achieved.

The table below presents the activity and other information on the outstanding PSUs:

There is no unrecognized compensation costs related to the PSUs as of March 31, 2026.

Employee Share Purchase Plan (“ESPP”)

Concurrently with the adoption of the Plan, the Company’s Board adopted the 2021 Employee Stock Purchase Plan (the “ESPP”), which authorizes the grant of rights to purchase common stock of the Company to employees, officers and directors (if they are otherwise employees) of the Company. As of March 31, 2026, the Company reserved an aggregate of 9,240,007 common shares (subject to annual increases on January 1 of each year and ending in 2031) of the Company’s common stock for grants under the ESPP. During the three months ended March 31, 2026, zero shares were sold under the ESPP. As of March 31, 2026, the

Company has withheld employee contributions of $0.9 million for future ESPP purchases, which are presented on thecondensed consolidated balance sheets within other current liabilities.

Equity-based compensation expense related to purchase rights issued under the ESPP is based on the Black-Scholes OPM fair value of the estimated number of awards as of the beginning of the offering period. Equity-based compensation expense is recognized using the straight-line method over the offering period.

The table below presents the assumptions used to estimate the grant date fair value of the purchase rights under the ESPP:

(1)Expected volatility is based on a combination of implied and historical equity volatility of selected reasonably similar publicly traded companies.

As of March 31, 2026, there was approximately $0.3 million of unrecognized compensation costs related to the ESPP, which is expected to be recognized over the remaining weighted average period of 0.17 years.

Equity-based Compensation Expense

The table below presents the total equity-based compensation expense recognized for Class B Units, Stock Options, RSUs, PSUs, and ESPP in selling, general and administrative expense, cost of revenues, and research and development for the following periods:

Note 19—Net Loss Per Share

The numerators and denominators of the basic and diluted netloss per share are computed as follows (in thousands, except per share, unit and per unit data):

The following securities were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive:

Although certain convertible notes were converted during the three months ended March 31, 2026 and March 31, 2025, application of the if-converted method would have been anti-dilutive due to the Company’s net loss for the period; accordingly, such instruments were excluded from diluted earnings per share.

Note 20—Revenues

Substantially all revenues were generated within the United States of America.

The table below presents total revenues by contract type for the following periods:

The table below presents the revenue recognition pattern for the following periods:

The table below presents total revenues by major customer type for the following periods:

The table below summarizes the activity in the allowance for expected credit losses:

Concentration of Risk

Revenue earned from customers contributing in excess of 10% of total revenues are presented in the tables below for the following periods:

(1) Customers that contributed in excess of 10% of consolidated revenues in any period presented have been included in all periods presented for comparability.

As of March 31, 2026 and March 31, 2025, the Company had no customers with accounts receivable balances that exceeded 10% of total accounts receivable.

Contract Balances

The table below presents the contract assets and contract liabilities included on the condensed consolidated balance sheets for the following periods:

We receive payments from customers based on a billing schedule as established in our contracts. Contract assets relate to our conditional right to consideration for our completed performance under the contract. Accounts receivables are recorded when the right to consideration becomes unconditional. Contract liabilities relates to payments received in advance of performance under a contract. Contract liabilities are recognized as revenue as (or when) we perform under the contract. Included in the contract liabilities balance as of March 31, 2026 are $11.6 million of contract liabilities from our acquisition of Ask Sage. Refer to Note 4—Business Combinations. Revenue recognized in the three months ended March 31, 2026 that was included in thecontract liability balance as of December 31, 2025 was$7.1 million. Revenue recognized in the three months ended March, 31, 2025 that was included in thecontract liability balance as of December 31, 2024 was$0.9 million.

When the Company’s estimate of total costs to be incurred to satisfy a performance obligation exceeds the expected revenue, the Company recognizes the loss immediately. When the Company determines that a change in estimate has an impact on the associated profit of a performance obligation, the Company records the cumulative positive or negative adjustmentin the condensed consolidated statements of operations and comprehensive loss. Changes in estimates and assumptions related to the status of certain long-term contracts may have a material effect on the Company’s operating results.

The following table summarizes the impact of the net estimates at completion (“EAC”) adjustments on the Company’s operating results:

(1) Due to the Company being in a net taxable loss position for all periods presented, the impact of income taxes is insignificant.

Remaining Performance Obligations

The Company includes in its computation of remaining performance obligations customer orders for which it has accepted signed sales orders and generally includes the funded and unfunded components of contracts that have been awarded. As of March 31, 2026, the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied, or partially unsatisfied, was approximately$7.8 million. As of March 31, 2026, the estimated revenue expected to be recognized in the future related to remaining performance obligations is presented in the table below.

Note 21—Segments

The Company has determined that it operates in a single operating and reportable segment as the Chief Operating Decision Maker (“CODM”) reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. The Company’s segment provides predictive analytics capabilities in highly complex, distributed, mission-based operating environments. It is a technology-led solutions organization, providing both software and services to our customers. The Company’s CODM is its Chief Executive Officer.

Consolidatednet loss, as reported on thecondensed consolidated statements of operations and comprehensive lossas consolidatednet loss, is the primary measure of segment profitability used by the CODM to assess performance and to allocate resources to the segment. Consolidatednet loss is used to monitor budget versus actual results. The monitoring of budgeted versus actual results is used in assessing performance of the segment and in establishing management’s compensation. All expense categories on thecondensed consolidated statements of operations and comprehensive loss are significant and there are no other significant segment expenses that would require disclosure or are regularly provided to the CODM.

The measure of segment assets is reported on thecondensed consolidated balance sheets as total consolidated assets. Assets provided to the CODM are consistent with those reported on thecondensed consolidated balance sheets.