On March 12, 1994, at 0730 mountain standard time, a Head AX9-118 balloon, N45289, collided with the ground during an unarrested descent near Sedona, Arizona. The balloon was operated by Northern Light Balloon Expeditions of Sedona, Arizona, and was engaged in for hire sightseeing operations. Visual meteorological conditions prevailed at the time and no flight plan was filed. The balloon sustained a 30-foot envelope tear in the ground collision sequence when it became entangled in trees. The certificated commercial balloon pilot and two passengers were not injured; however, one passenger sustained serious injuries consisting of fractured ankle and foot bones and one passenger incurred minor injuries. The flight originated from a field near Sedona on the day of the mishap at 0705 hours as a local area flight. In a telephone interview, the pilot reported that he intended to descend while in cruise flight to about 400 feet agl to give the passengers a better view of the surroundings. As the balloon was descending, the burner pilot light went out. The pilot said that he attempted unsuccessfully to relight the pilot light up until ground impact. Examination of the balloon determined that it consisted of a Head AX9-118 envelope attached to a Balloon Works 5.5 basket, which included a Balloon Works Mirage F-1 burner, serial number 077. The installed propane gas regulator was found to be a Marshall Brass Company model 300. The envelope and basket, produced by different manufacturers, were combined together in accordance with Federal Aviation Administration (FAA) Supplemental Type Certificate (STC) SL1748 on October 27, 1993. The burner and regulator were removed from the balloon and sent to the Balloon Works company in Statesville, North Carolina, for functional testing under the supervision of an FAA airworthiness inspector. The burner was tested to factory specification. The regulator was found to be the incorrect part for the Mirage F-1 burner. Functional testing of the regulator determined that it flowed at 8 psi, with a maximum adjustment range of 11.5 psi. According to FAA approved Balloon Works engineering drawings, the correct regulator for the Mirage burner is a Marshall Brass Company model 301, part number 301-18. The model 301 regulator has a Balloon Works Company specified pressure range of 18 to 25 psi. According to a Balloon Works company representative, low regulator pressure might make reigniting the pilot lights and burners difficult once snuffed out in flight.