What changed in this filing

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Item 1. Financial Statements

2022-05-05 compared with 2021-11-02 · 419 added, 847 removed, 665 unchanged (66% of the section changed)

4 unchanged sentences

(In thousands, except share and per share data)

As of September 30, 2021

As of March 31, 2022

As of December 31, 2021

(unaudited)  

Current Assets:

19 unchanged sentences

12,830  

13,235  

Deferred tax asset

27 unchanged sentences

Series A redeemable convertible preferred stock, 165,000 shares authorized;

85,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

80,000 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

85,201  

83,901  

Redeemable noncontrolling interest

Redeemable noncontrolling interests

14,458  

1 unchanged sentence

99,659  

94,527  

STOCKHOLDERS’

(DEFICIT) EQUITY

Preferred stock, $ 0.0001 par value, 1,000,000 shares authorized;

85,000 Series A shares issued and outstanding as of September 30, 2021 and December 31, 2020

80,000 Series A shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

Common stock, $ 0.0001 par value, 200,000,000 shares authorized;

50,191,647 and 49,905,512 issued, 50,146,407 and 49,818,676 outstanding as of September 30, 2021 and December 31, 2020, respectively

50,933,471 and 50,800,786 issued, 50,888,231 and 50,755,546 outstanding as of March 31, 2022 and December 31, 2021, respectively

Additional paid-in capital

4 unchanged sentences

Accumulated other comprehensive loss

( 741 )  

Total stockholders' (deficit) / equity

( 57,001 )  

Total stockholders' deficit

( 123,405 )  

Total liabilities, mezzanine equity and stockholders' equity

Total liabilities, mezzanine equity and stockholders' deficit

$ 840,635  

5 unchanged sentences

(In thousands, except share and per share data)

For the three months ended September 30,

For the nine months ended September 30,

For the three months ended March 31,

Tour revenues

$ 64,507  

$ 1,019  

$ 81,555  

$ 81,991  

Operating expenses:

Cost of tours

45,600  

73,270  

62,988  

General and administrative

17,023  

46,123  

36,170  

Selling and marketing

10,213  

17,680  

18,413  

Depreciation and amortization

25,785  

23,728  

Total operating expenses

82,159  

27,833  

162,858  

141,299  

Operating loss

( 17,652 )  

( 26,814 )  

( 81,303 )  

Other (expense) income:

Interest expense, net

( 6,063 )  

( 4,529 )  

( 17,436 )  

(Loss) gain on foreign currency

( 1,434 )  

( 1,165 )  

Other income (expense)

( 74 )  

Gain on foreign currency

Total other expense

( 3,140 )  

( 3,614 )  

( 14,239 )  

Loss before income taxes

( 20,792 )  

( 30,428 )  

( 95,542 )  

Income tax expense (benefit)

( 2,893 )  

( 2,648 )  

( 23,299 )  

( 27,535 )  

( 92,894 )  

Net income (loss) attributable to noncontrolling interest

( 156 )  

( 17 )  

Income tax benefit

Net loss attributable to noncontrolling interest

Net loss attributable to Lindblad Expeditions Holdings, Inc.

( 24,338 )  

( 27,379 )  

( 92,877 )  

Series A redeemable convertible preferred stock dividend

Net loss available to stockholders

$ ( 25,678 )  

$ ( 27,804 )  

$ ( 96,839 )  

Weighted average shares outstanding

50,110,188  

49,779,525  

50,013,191  

49,715,663  

50,110,188  

49,779,525  

50,013,191  

49,715,663  

Undistributed loss per share available to stockholders:

$ ( 0.50 )  

$ ( 0.56 )  

$ ( 1.87 )  

$ ( 0.50 )  

$ ( 0.56 )  

$ ( 1.87 )  

The accompanying notes are an integral part of these condensed consolidated financial statements.

3 unchanged sentences

(In thousands)

For the three months ended September 30,

For the nine months ended September 30,

Other comprehensive income (loss):

For the three months ended March 31,

Other comprehensive income:

Cash flow hedges:

Net unrealized (loss) gain

Net unrealized loss

Reclassification adjustment, net of tax

Total other comprehensive income (loss)

Total other comprehensive income

Total comprehensive loss

comprehensive income (loss) attributive to non-controlling interest

comprehensive loss attributive to non-controlling interest

Comprehensive loss attributable to stockholders

3 unchanged sentences

Condensed Consolidated Statements of Stockholders ’

 (Deficit) Equity

(In thousands, except share data)

2 unchanged sentences

Total Stockholders'

Balance as of June 30, 2021

50,139,831  

$ 50,777  

$ ( 82,733 )  

$ ( 943 )  

(Deficit) Equity

Balance as of December 31, 2021

Stock-based compensation

Issuance of stock for equity compensation plans, net

51,816  

( 37 )  

Other comprehensive income, net

Redeemable noncontrolling interest

Series A preferred stock dividend

( 1,340 )  

Net loss attributable to Lindblad Expeditions Holdings, Inc.

( 24,338 )  

Balance as of September 30, 2021

50,191,647  

$ 52,146  

$ ( 108,411 )  

$ ( 741 )  

Balance as of March 31, 2022

Additional Paid-In

1 unchanged sentence

Total Stockholders'

Balance as of January 1, 2021

49,905,512  

$ 48,127  

$ ( 11,572 )  

$ ( 1,602 )  

$ 34,958  

Balance as of December 31, 2020

Stock-based compensation

Issuance of stock for equity compensation plans, net

203,833  

( 1,763 )  

Issuance of stock for acquisition

82,302  

Other comprehensive income, net

Series A preferred stock dividend

( 3,962 )  

Net loss attributable to Lindblad Expeditions Holdings, Inc.

( 92,877 )  

Balance as of September 30, 2021

50,191,647  

$ 52,146  

$ ( 108,411 )  

$ ( 741 )  

The accompanying notes are an integral part of these condensed consolidated financial statements.

LINDBLAD EXPEDITIONS HOLDINGS, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders ’

Equity (continued)

(In thousands, except share data)

Additional Paid-In

Accumulated Other Comprehensive

Total Stockholders'

Balance as of June 30, 2020

49,822,955  

$ 47,394  

$ 45,403  

$ ( 8,824 )  

$ 83,978  

Stock-based compensation

Issuance of stock for equity compensation plans, net

52,231  

( 42 )  

Other comprehensive income, net

Redeemable noncontrolling interest

Series A preferred shares dividend

( 425 )  

Net loss attributable to Lindblad Expeditions Holdings, Inc.

( 27,379 )  

Balance as of September 30, 2020

49,875,186  

$ 47,662  

$ 19,473  

$ ( 7,079 )  

$ 60,061  

Additional Paid-In

Accumulated Other Comprehensive

Total Stockholders'

Balance as of January 1, 2020

49,717,522  

$ 46,271  

$ 81,655  

( 4,681 )  

$ 123,250  

Stock-based compensation

Issuance of stock for equity compensation plans, net

166,181  

( 393 )  

Repurchase of shares and warrants

( 8,517 )  

( 127 )  

Other comprehensive loss, net

( 2,398 )  

Redeemable noncontrolling interest

Series A preferred shares dividend

( 425 )  

Net loss attributable to Lindblad Expeditions Holdings, Inc.

( 68,973 )  

Balance as of September 30, 2020

49,875,186  

$ 47,662  

$ 19,473  

$ ( 7,079 )  

$ 60,061  

Balance as of March 31, 2021

The accompanying notes are an integral part of these condensed consolidated financial statements.

3 unchanged sentences

(In thousands)

For the nine months ended September 30,

For the three months ended March 31,

Cash Flows From Operating Activities

3 unchanged sentences

11,178  

23,728  

Amortization of National Geographic fee

Amortization of deferred financing costs and other, net

3 unchanged sentences

( 149 )  

Loss on foreign currency

Change in fair value of contingent acquisition consideration

Gain on foreign currency

( 130 )  

Write-off of unamortized issuance costs related to debt refinancing

Changes in operating assets and liabilities

Marine operating supplies and inventories

( 375 )  

Prepaid expenses and other current assets

2 unchanged sentences

29,563  

21,438  

Other long-term assets

( 261 )  

Other long-term liabilities

2 unchanged sentences

Net cash provided by (used in) operating activities

21,520  

Cash Flows From Investing Activities

2 unchanged sentences

Acquisition (net of cash acquired)

( 7,177 )  

Net cash used in investing activities

3 unchanged sentences

360,000  

183,339  

Repayments of long-term debt

3 unchanged sentences

Repurchase under stock-based compensation plans and related tax impacts

( 1,763 )  

Proceeds from Series A preferred stock issuance

85,000  

Repurchase of warrants and common stock

Net cash provided by financing activities

55,292  

261,442  

Net (decrease) increase in cash, cash equivalents and restricted cash

Net cash provided by (used in) financing activities

14,529  

Net increase (decrease) in cash, cash equivalents and restricted cash

12,169  

10 unchanged sentences

Non-cash investing and financing activities:

Non-cash preferred share dividend

Non-cash preferred stock dividend

$ 1,298  

Shares issued for acquisition

$ 1,301  

Shares issued for acquisition

The accompanying notes are an integral part of these condensed consolidated financial statements.

Lindblad Expeditions Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

Notes to the Unaudited Condensed Consolidated Financial Statements

NOTE 1 —

4 unchanged sentences

or “Lindblad”) mission is offering life-changing adventures around the world and pioneering innovative ways to allow its guests to connect with exotic and remote places.

The Company currently operates a fleet of ten owned expedition ships and five seasonal charter vessels under the Lindblad brand, operates land-based eco-conscious expeditions and active nature focused tours under the Natural Habitat, Inc.

(“Natural Habitat”) and Off the Beaten Path, LLC (“Off the Beaten Path”) brands and operates luxury cycling and adventure tours under the DuVine Cycling + Adventure Company (“DuVine”) brand.

The Company currently operates a fleet of ten owned expedition ships and five seasonal charter vessels under the Lindblad brand, operates land-based, eco-conscious expeditions and active nature focused tours under the Natural Habitat, Inc.

(“Natural Habitat”) and Off the Beaten Path, LLC (“Off the Beaten Path”) brands, designs handcrafted walking tours under the Classic Journeys, LLC (“Classic Journeys”) brand and operates luxury cycling and adventure tours under the DuVine Cycling + Adventure Company (“DuVine”) brand.

The Company operates the following two reportable business segments:

Lindblad Segment.

  The Lindblad segment consists primarily of ship-based expeditions aboard customized, nimble and intimately-scaled vessels that are able to venture where larger cruise ships cannot, thereby allowing Lindblad to offer up-close experiences in the planet’s wild and remote places and capitals of culture.

Many of these expeditions involve travel to remote places with limited infrastructure and ports, such as Antarctica and the Arctic, or places that are best accessed by a ship, such as the Galápagos, Alaska and Baja’s Sea of Cortez and foster active engagement by guests.

Each expedition ship is designed to be comfortable and inviting, while being fully equipped with state-of-the-art tools for in-depth exploration.

The Company has an alliance with National Geographic Partners (“National Geographic”), which provides for National Geographic experts, including photographers, writers, marine biologists, naturalists, field researchers and film crews, to join many of the Company’s expeditions.

 The Lindblad segment primarily provides ship-based expeditions aboard customized, nimble and intimately-scaled vessels that are able to venture where larger cruise ships cannot, thus allowing Lindblad to offer up-close experiences in the planet’s wild and remote places and capitals of culture.

Each expedition ship is fully equipped with state-of-the-art tools for in-depth exploration and the majority of expeditions involve travel to remote places with limited infrastructure and ports, such as Antarctica and the Arctic, or places that are best accessed by a ship, such as the Galápagos Islands, Alaska, Baja California’s Sea of Cortez and Panama, and foster active engagement by guests.

The Company has an alliance with National Geographic Partners, LLC (“National Geographic”), which provides for lecturers and National Geographic experts, including photographers, writers, marine biologists, naturalists, field researchers and film crews, to join many of the Company’s expeditions.

Land Experiences Segment.

The Land Experiences segment includes our three primarily land-based brands, Natural Habitat, DuVine and Off the Beaten Path.

Natural Habitat  offers over 100 different expedition itineraries in more than 45 countries spanning all seven  continents.

The expeditions focus on small groups led by award-winning naturalists to achieve close-up wildlife and nature experiences. Examples of expeditions offered include safaris in Botswana, grizzly bear adventures in Alaska, polar bear tours in Canada and small-group Galápagos tours.

Many of the expeditions feature access to private wildlife reserves, remote corners of national parks and distinctive lodges and camps for the best wildlife viewing.

 The Land Experiences segment includes our 

four  primarily land-based brands, Natural Habitat, DuVine, Off the Beaten Path and Classic Journeys.

Natural Habitat  specializes in conservation-oriented adventures, providing life-enhancing forays into the natural world that feature wild habitats and the animals and people who live there.

Natural Habitat’s travel adventures provide unparalleled access to the planet's most extraordinary wildlife, landscapes and cultures.

Natural Habitat’s unique itineraries include access to private wildlife reserves, remote corners of national parks and distinctive, secluded and remote lodges and camps situated where wildlife viewing is best such as polar bear tours in Churchill, Canada, Alaskan grizzly bear adventures, small-group Galápagos Islands tours and African safaris.

Natural Habitat has partnered with World Wildlife Fund (“WWF”) to offer conservation travel, which is sustainable travel that contributes to the protection of nature and wildlife.

DuVine  offers luxury cycling and adventure tours around the world, providing immersive cultural and culinary experiences through thoughtfully designed itineraries led by expert local guides.

Offerings primarily include tours throughout Europe, the United States and South America.

Examples of DuVine's tours include cycling and culinary tours throughout the Bordeaux and Burgundy wine making regions, Tuscan truffle, porcini and chestnut harvest regions, Napa and Sonoma wine making regions and lakes and volcanos throughout Patagonia. DuVine's trips include top-quality gear and support and are tailored to riders of all abilities with an emphasis on exceptional food and wine experiences, along with boutique accommodations.

Off the Beaten Path  offers active small-group and private custom journeys around the world with a long-standing focus on offering unique adventures and experiences throughout the U.S.

National Parks.

In addition to other U.S.-based adventures such as ranch vacations and fly-fishing expeditions, Off the Beaten Path's small group product offerings include international expeditions across Europe, Africa, Australia, Central and South America and the South Pacific.

Examples of international expeditions include hiking through the Dolomites, enjoying a family adventure in Patagonia’s Lake District and experiencing the culture, architecture and village life of Morocco.

All Off the Beaten Path expeditions are defined by a focus on outdoor activity, including wildlife viewing, hiking, rafting, snorkeling, kayaking and snowshoeing, and comprehensive pre-trip materials paired with experienced, friendly guides.

DuVine  specializes in luxury cycling and adventure tours around the world, providing immersive cultural and culinary experiences through thoughtfully designed itineraries led by expert local guides.

Offerings primarily include tours throughout Europe, the United States and South America. Examples of DuVine's tours include cycling and culinary tours throughout the Bordeaux and Burgundy wine making regions, Tuscan truffle, porcini and chestnut harvest regions, Napa and Sonoma wine making regions and lakes and volcanos throughout Patagonia.

DuVine's trips include top-quality gear and support and are tailored to riders of all abilities with an emphasis on exceptional food and wine experiences, along with boutique accommodations.

Off the Beaten Path  provides active small-group and private custom journeys around the world with a long-standing focus on offering unique adventures and experiences throughout United States (“U.S.”) National Parks.

In addition to other U.S.-based adventures such as ranch vacations and fly-fishing expeditions, Off the Beaten Path's small-group product offerings include international expeditions across Europe, Africa, Australia, Central and South America and the South Pacific such as hiking through the Dolomites, family adventures in Patagonia’s Lake District and experiencing the culture of Morocco.

All Off the Beaten Path expeditions are defined by a focus on outdoor activity led by experienced, friendly guides.

Classic Journeys  offers highly curated active small-group and private custom journeys centered around cinematic walks focused on engaging experiences that immerse guests into the history and culture of the places they are exploring and the people who live there, led by expert local guides in over 

50  countries around the world. Classic Journeys’

tours are highlighted by luxury boutique accommodations and handcrafted itineraries curated through years of local connections such as experiencing Tuscan farmhouse kitchens, exploring Minoan ruins in Crete, or eating and dancing around a Berber encampment campfire.

The Company’s common stock is listed on the NASDAQ Capital Market under the symbol “LIND”.

6 unchanged sentences

All intercompany balances and transactions have been eliminated in these unaudited condensed consolidated financial statements.

These unaudited condensed consolidated financial statements and footnotes should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto for the year ended December 31, 2020 contained in the Company’s Annual Report on Form 10 -K filed with the SEC on March 12, 2021 ( the “2020 Annual Report”).

These unaudited condensed consolidated financial statements and footnotes should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto for the year ended December 31, 2021 contained in the Company’s Annual Report on Form 10 -K filed with the SEC on February 28, 2022 ( the “2021 Annual Report”).

There have been no significant changes to the Company’s accounting policies from those disclosed in the 2021 Annual Report.

Return to Fleet Operations 

The Company resumed ship operations in June 2021 and as of November 2, 2021 had eight of its ten vessels providing expeditions to guests.

During June 2021, the Company launched three ships in Alaska and another in the Galapagos, and during the third quarter the Company resumed operations on the majority of its remaining vessels with additional ships operating in Alaska, the Galapagos, Iceland and the Pacific Northwest. The Company continues to work with local authorities on plans to operate in additional geographies, such as Antarctica, during the remainder of the year and early 2022.

As the COVID- 19 virus effects travel restrictions in various locations around the world, the Company also continues to work with its guests to reschedule travel plans and refund payments or issue future travel certificates, as applicable, for those expeditions and trips that the Company is not able to operate.

Ramp of Fleet Operations and COVID- 19 Business Update

During the first quarter of 2022 the Company continued to ramp up its operations, providing expeditions to guests on nine of its ten owned vessels including trips to Antarctica, Baja California’s Sea of Cortez, Bahamas, Belize, Costa Rica and Panama, and the Galápagos.

Due to the spread of the COVID- 19 virus and the effects of travel restrictions around the world, the Company had previously suspended or rescheduled the majority of its expeditions departing between March 16, 2020 through May 31, 2021.

Travel restrictions related to COVID- 19 have diminished dramatically and the Company continues to work with local authorities on plans to operate itineraries in additional geographies during 2022 and 2023.

Where travel restrictions remain, which now also includes a limited number of itineraries impacted by the Russia-Ukraine conflict, the Company works with guests to reschedule travel plans and refund payments or issue future travel certificates, as applicable.

The Company believes there are a variety of strategic advantages that enable it to deploy its ships safely and quickly, while mitigating the risk of COVID- 19 as travel restrictions are lifted.

The most notable is the size of its owned and operated vessels which range from 48 to 148 passengers, allowing for a highly controlled environment that includes stringent cleaning protocols.

The small nature of the Company’s ships also allows it to efficiently and effectively test its guests and crew prior to boarding. Additionally, all guests age 12 and older, crew and staff are required to be fully vaccinated and the majority of expeditions take place in remote locations where human interactions are limited, so there is less opportunity for external influence.

While the Company’s ships were not in operations, the majority of the fleet was being maintained with minimally required crew on-board to ensure they complied with all necessary regulations and could be fully put back into service quickly as needed.

Ahead of launching each ship, crew levels were increased as necessary to prepare each vessel for operations as well as for crew training and vaccinations.

The Company’s offices primarily remain closed, and most employees are working remotely to maintain general business operations, to provide assistance to existing and potential guests and to maintain information technology systems.

The Company continues to adhere to the comprehensive plan it implemented in March 2020 to mitigate the impact of COVID- 19 and preserve and enhance its liquidity position. Prior to resuming operations, this plan employed a variety of cost reduction and cash preservation measures including significantly reducing ship and land-based expedition costs such as capital expenditures, crew payroll, land costs, fuel and food, and meaningfully reducing general and administrative expenses through reduced payroll and the elimination of all non-essential travel, office expenses and discretionary spending.

The Company also accessed available capital under existing debt facilities and through the issuance of preferred stock.

With the majority of operations resuming, operating costs are ramping back up, but given the continued uncertainty around COVID- 19 and given that guest counts have not yet returned to traditional levels, the Company continues to minimize expenditures as appropriate.

The small nature of the Company’s ships also allows it to efficiently and effectively test its guests and crew prior to boarding, or as otherwise needed. Additionally, all guests age five and older, crew and staff are required to be fully vaccinated and the majority of expeditions take place in remote locations where human interactions are limited, so there is less opportunity for external influence.

Balance Sheet and Liquidity

As of September 30, 2021, the Company had $ 155.6  million in unrestricted cash and $ 29.5  million in restricted cash primarily related to deposits on future travel originating from U.S.

As of March 31, 2022, the Company had $ 154.8  million in unrestricted cash and $ 30.0  million in restricted cash primarily related to deposits on future travel originating from U.S.

ports and credit card reserves.

During August 2021, the Company received a $ 21.0 million grant under the Coronavirus Economic Relief for Transportation Services (“CERTS”) Act, which provided grants to eligible motorcoach, school bus, passenger vessel, and pilotage companies, see Note 4 —

Financial Statement Details for additional information.

As of September 30, 2021, the Company had a total debt position of $ 561.8  million and was in compliance with all of its debt covenants.

During September 2021, the Company drew down $ 46.2 million under its second export credit agreement in conjunction with its final payment upon delivery of the National Geographic Resolution.

In April 2021 the Company drew down $ 15.5 million under the second export credit agreement in conjunction with its fourth installment payment for the vessel. 

During June 2021, the Company amended its export credit agreements to, among other things, extend the deferral of scheduled amortization payments of the first export credit facility through December 2021 in the aggregate amount of $ 15.7 million, extend the waiver of its total net leverage ratio covenant through March 31, 2022, increase the interest rate spreads of the export credit facilities by 50 basis points and annualize EBITDA used in its covenant calculation through December 31, 2022.

The deferred principal payments will amortize quarterly over three years starting in March 2022.

Certain other covenants continue to be more restrictive during the extended covenant waiver period.

During April 2021, the Company amended its term loan and revolving credit facilities to, among other things, extend the waiver of its total net leverage ratio covenant through March 31, 2022, annualize EBITDA used in its covenant calculation through December 31, 2022 and increase the interest rate spreads of the term loan, excluding the Main Street Loan, and the revolving credit facility by an additional 50 basis points.

Certain other covenants continue to be more restrictive during the extended covenant waiver period.

Given the dynamic and unpredictable nature of the COVID- 19 pandemic, the Company cannot reasonably estimate the potential impacts the pandemic will have on its financial condition, results of operations, cash flows, plans and growth for the foreseeable future.

It is unknown when full travel restrictions and various remaining border closures will be lifted and what the demand for expedition travel will be once restrictions are no longer in place.

Based on the actions taken to date by the Company, its planned and anticipated actions and its current forecast, the Company believes that it can meet its obligations for the next 12 months from November 2, 2021, the date of this Quarterly Report on Form 10 -Q.  

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU 

2019 - 12, Income Taxes (Topic 740 )—Simplifying the Accounting for Income Taxes.

The amendments of this ASU are intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740.

The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.

The Company adopted this ASU as required, and it has not had, nor is it expected to have, a material impact to the Company’s financial statements.

Recent Accounting Pronouncements

In March 2020, the FASB issued ASU 2020 - 4, Reference Rate Reform (Topic 848 )—Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

The guidance of this ASU is designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, borrowings) necessitated by reference rate reform.

It also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by reference rate reform.

Application of the guidance is optional, is only available in certain situations, and is only available for companies to apply until December 31, 2022.

The Company is currently reviewing its agreements impacted by the reference rate reform and does not expect this ASU to have a material impact to the Company’s financial statements.

In August 2020, the FASB issued ASU 2020 - 06, Debt–Debt with conversion and Other Options (Subtopic 470 - 20 ) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815 - 40 )—Accounting for Convertible Instruments and Contracts in an Entity's Own Equity.

The amendments in this ASU address issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity.

The amendments reduce the number of accounting models for convertible debt instruments and convertible preferred stock, and address convertible instruments with conversion features, as well as other items.

This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021.

The Company will adopt this ASU as required and does not expect it to have a material impact to the Company’s financial statements.

As of March 31, 2022, the Company had a total debt position of $ 584.1  million and was in compliance with all of its debt covenants.

On February 4, 2022, the Company issued $ 360.0 million of 6.75 % senior secured notes, maturing 2027, and entered into a new $ 45.0 million revolving credit facility, including a letter of credit sub-facility in an aggregate principal amount of up to $ 5.0 million.

Proceeds from the senior secured note issuance were used primarily to pay the outstanding borrowings under the Company's prior credit agreement, including the term facility, Main Street Loan and the revolving credit facility.

The senior secured notes are guaranteed on a senior secured basis by the Company and certain of the Company’s subsidiaries and are collateralized by certain of the Company’s assets.

NOTE 2 —

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Earnings per Common Share

Earnings (loss) per common share is computed using the two -class method related to its Series A Redeemable Convertible Preferred Stock, par value of $ 0.0001 , (“Preferred Stock”).

Under the two -class method, undistributed earnings available to stockholders for the period are allocated on a pro rata basis to the common stockholders and to the holders of the Preferred Stock based on the weighted average number of common shares outstanding and number of shares that could be issued upon

conversion of the Preferred Stock.

Earnings (loss) per common share is computed using the two -class method related to its Series A Redeemable Convertible Preferred Stock, par value of $ 0.0001  (“Preferred Stock”).

Diluted earnings per share is computed using the weighted average number of common shares outstanding and, if dilutive, potential common shares outstanding during the period.

1 unchanged sentence

When a net loss occurs, potential common shares have an anti-dilutive effect on earnings per share and such shares are excluded from the diluted earnings per share calculation.

For the three and nine months ended September 30, 2021 and 2020, the Company incurred a net loss from operations, therefore basic and diluted net loss per share are the same for the periods.

For the three and nine months ended September 30, 2021, 

approximately 0.8 million restricted shares, 1.5 million shares issuable upon exercise of options and 9.5 million common shares issuable upon the conversion of the Preferred Stock were excluded from dilutive potential common shares for the periods as they were anti-dilutive.

For the three months ended March 31, 2022 and 2021, the Company incurred a net loss from operations, therefore basic and diluted net loss per share are the same for the periods.

For the three months ended March 31, 2022, 

approximately 0.8  million restricted shares, 1.5 million shares issuable upon exercise of options and 9.3  million common shares issuable upon the conversion of the Preferred Stock were excluded from dilutive potential common shares for the periods as they were anti-dilutive.

For the 

three and nine months ended September 30, 2020, 

0.3  million restricted shares, 0.2  million shares issuable upon exercise of options and 8.9 million common shares issuable upon conversion of the Preferred Stock were excluded from dilutive potential common shares for the periods as they are anti-dilutive.

For the three and nine months ended September 30, 2021 and 2020, the Company calculated earnings (loss) per share as follows:

For the three months ended September 30,

For the nine months ended September 30,

three months ended March 31, 2021, 

0.9  million restricted shares, 0.5  million shares issuable upon exercise of options and 9.3 million common shares issuable upon conversion of the Preferred Stock were excluded from dilutive potential common shares for the periods as they were anti-dilutive.

For the three months ended March 31, 2022 and 2021, the Company calculated earnings (loss) per share as follows:

For the three months ended March 31,

(In thousands, except share and per share data)

Net loss attributable to Lindblad Expeditions Holdings, Inc.

$ ( 24,338 )  

$ ( 27,379 )  

$ ( 92,877 )  

Series A redeemable convertible preferred stock dividend

Undistributed loss available to stockholders

$ ( 25,678 )  

$ ( 27,804 )  

$ ( 96,839 )  

Weighted average shares outstanding:

Total weighted average shares outstanding, basic

50,110,188  

49,779,525  

50,013,191  

49,715,663  

Total weighted average shares outstanding, diluted

50,110,188  

49,779,525  

50,013,191  

49,715,663  

Undistributed loss per share available to stockholders:

$ ( 0.50 )  

$ ( 0.56 )  

$ ( 1.87 )  

$ ( 0.50 )  

$ ( 0.56 )  

$ ( 1.87 )  

NOTE 3 —

6 unchanged sentences

The Company does not consider guest deposits to be a contract liability until the guest no longer has the right, resulting from the passage of time, to cancel their reservation and receive a full refund. In conjunction with the suspension or rescheduling of expeditions, the Company provided guests an option of either a refund or future travel certificates, which in some instances exceeded the original cash deposit.

The Company has recorded liabilities up to the amount of cash deposits and additional value of any future travel certificates are being recognized as a discount when applied to future expeditions. The change in contract liabilities within unearned passenger revenues presented in our condensed consolidated balance sheets are as follows:

The Company has recorded liabilities up to the amount of cash deposits.

The additional value of any future travel certificates are being recognized as a discount when applied to future expeditions. The change in contract liabilities within unearned passenger revenues presented in our condensed consolidated balance sheets are as follows:

Contract Liabilities

(In thousands)

Balance as of January 1, 2021

(unaudited)  

Balance as of December 31, 2021

$ 147,783  

2 unchanged sentences

64,017  

Balance as of September 30, 2021

Balance as of March 31, 2022

$ 145,688  

The following table disaggregates our tour revenues by the sales channel it was derived from:

For the three months ended September 30,

For the nine months ended September 30,

For the three months ended March 31,

Guest ticket revenue:

3 unchanged sentences

Tour revenues

NOTE 4 — 

FINANCIAL STATEMENT DETAILS

The following is a reconciliation of cash, cash equivalents and restricted cash to the statement of cash flows:

For the nine months ended September 30,

For the three months ended March 31,

(In thousands)

9 unchanged sentences

Restricted cash consists of the following:

As of September 30, 2021

As of March 31, 2022

As of December 31, 2021

(In thousands)

Federal Maritime Commission escrow

Credit card processor reserves

$ 13,894  

$ 10,536  

Credit card processor reserves

Federal Maritime Commission escrow

14,796  

3 unchanged sentences

$ 21,940  

The Company’s prepaid expenses and other current assets consist of the following:

As of September 30, 2021

As of December 31, 2020

(In thousands)

Prepaid tour expenses

$ 12,145  

$ 5,630  

Prepaid marketing, commissions and other expenses

Prepaid client insurance

Prepaid air expense

Prepaid port agent fees

Prepaid corporate insurance

Prepaid income taxes

Total prepaid expenses

$ 27,078  

$ 17,014  

The Company’s accounts payable and accrued expenses consist of the following:

As of September 30, 2021

As of December 31, 2020

(In thousands)

$ 16,677  

Accrued other expense

10,150  

Accounts payable

Bonus compensation liability

Employee liability

Refunds and commissions payable

Travel certificate liability

Royalty payable

Accrued travel insurance expense

Income tax liabilities

Foreign currency forward contract liability

Total accounts payable and accrued expenses

$ 48,317  

$ 22,341  

During August 2021, the Company received a $ 21.0 million grant under the CERTS Act, which provided grants to eligible motorcoach, school bus, passenger vessel, and pilotage companies that have experienced annual revenue losses of 25 percent or more as result of COVID- 19.

The priority use of grant funds must be for payroll costs, though grants may be used for operating expenses and the repayment of debt accrued to maintain payroll.

The Company is accounting for the grant as a current liability on its balance sheet, as any amounts not appropriately used within one year of the grant date must be returned to the U.S.

Treasury and will recognize the grant in other income on the income statement as permitted expenses for the grant are incurred.

During the three and nine months ended September 30, 2021, the Company recognized $ 4.4  million of the CERTS grant in other income for permitted payroll costs and ship operating expenses.

As of March 31, 2022 and December 31, 2021, prepaid tour revenues of $ 20.6 million and $ 10.3 million, respectively, are the only items of prepaid expenses and other current assets in excess of 5% of current assets. 

As of March 31, 2022 and December 31, 2021, accounts payable of $ 20.2 million and $ 9.7 million, respectively, are the only items of accounts payable and accrued expenses in excess of 5% of current liabilities.

In 2021, the Company received a $ 27.0 million grant under the CERTS Act, which provided grants to eligible motorcoach, school bus, passenger vessel, and pilotage companies that have experienced annual revenue losses of 25 percent or more as result of COVID- 19.

The priority use of grant funds was required to be for payroll costs, though grants could be used for operating expenses and the repayment of debt accrued to maintain payroll.

The Company accounted for the grant as a current liability on its balance sheet, as any amounts not appropriately used within one year of the grant date would have to be returned to the U.S.

Treasury and recognized the grant in other income on the income statement as permitted expenses for the grant were incurred.

During the three months ended March 31, 2022, the Company recognized $ 11.6 million of the CERTS grant in other income for permitted payroll costs and ship operating expenses.

The Company’s loan receivable is recorded at amortized cost within other long-term assets.

The Company reviewed its loan receivable for credit losses in connection with the preparation of its condensed consolidated financial statements for the period ended September 30, 2021. 

The Company reviewed its loan receivable for credit losses in connection with the preparation of its condensed consolidated financial statements for the period ended March 31, 2022. 

In evaluating the allowance for loan losses, the Company considered factors such as historical loss experience, the type and amount of loan, adverse situations that 

2 unchanged sentences

no  allowance for loan loss for the 

three  or 

nine months ended September 30, 2021.

three  months ended March 31, 2022.

The following is a rollforward of the loan receivable balance:

For the nine months ended September 30, 2021

Loan Receivable

(In thousands)

Balance as of January 1, 2021

Balance as of December 31, 2021

$ 3,964  

Adjustment for ship building expense

Legal invoices deferred

Accrued interest

Amortization of deferred costs

Balance as of September 30, 2021

Balance as of March 31, 2022

$ 3,990  

1 unchanged sentence

LONG-TERM DEBT

September 30, 2021

December 31, 2020

As of March 31, 2022

As of December 31, 2021

(unaudited)  

(In thousands)

1 unchanged sentence

Deferred Financing Costs, net

Credit Facility

$ 360,000  

1 unchanged sentence

$ 349,553  

First Export Credit Agreement

104,470  

1 unchanged sentence

102,445  

1st Senior Secured Credit Agreement

107,695  

1 unchanged sentence

105,605  

Second Export Credit Agreement

117,722  

1 unchanged sentence

115,315  

2nd Senior Secured Credit Agreement

120,281  

1 unchanged sentence

117,808  

Credit Facility

284,170  

5 unchanged sentences

44,310  

45,000  

( 341 )  

44,659  

Total long-term debt

16 unchanged sentences

$ 518,658  

For the three and nine months ended September 30, 2021, deferred financing costs charged to interest expense were $ 0.8  million and $ 2.3  million, respectively.

For the three and nine months ended September 30, 2020, deferred financing costs charged to interest expense were $ 0.5  million and $ 1.5 million, respectively.

Credit Facility

In March 2018, the Company entered into the Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”) providing for a $ 200.0 million senior secured term facility (the “Term Facility”), maturing March 2025, and a $ 45.0 million senior secured revolving credit facility (the “Revolving Facility”) maturing March 2023, which includes a $ 5.0 million letter of credit sub-facility.

In March 2020, the Company drew $ 45.0 million against the Revolving Facility as a reserve for general corporate purposes and other expense needs due to the uncertainty related to the COVID- 19 pandemic.

In August 2020, the Company amended the Amended Credit Agreement to waive the application of the total net leverage ratio covenant through June 2021.

In connection with the amendment, the interest rate of the Term Facility was increased 125 basis points, to be paid-in-kind at maturity, a LIBOR minimum of 0.75 % was added to the Term Facility and certain covenants were amended to be more restrictive. 

In December 2020, the Company amended the Amended Credit Agreement to provide for the borrowing of a new tranche of incremental term loans under the Amended Credit Agreement in an amount of $ 85.0 million, maturing December 2025, made under the Main Street Expanded Loan Facility (the “Main Street Loan”). Interest on the Main Street Loan shall be paid-in-kind for the first year and the principal shall amortize at a rate of 15 % in each of the third and fourth years, with the remaining amounts to be paid at maturity.

The Company may voluntarily prepay the Main Street Loan at any time and from time to time, without premium or penalty, other than customary “breakage costs”

and fees for LIBOR-based loans.

During April 2021, the Company further amended its Amended Credit Agreement to, among other things, extend the waiver of its total net leverage ratio covenant through March 2022, annualize EBITDA used in its covenant calculation through December 31, 2022 and increase the interest rate spreads of the Term Facility, excluding the Main Street Loan, and the Revolving Facility by 50 basis points.

Certain other covenants under the Amended Credit Agreement continue to be more restrictive during the extended covenant waiver period.

The Term Facility, as amended, bears interest at an adjusted Intercontinental Exchange (“ICE”) Benchmark administration LIBOR with a minimum of 0.75 %, plus a spread of 5.25 %, for an aggregated rate of 6.00 % as of September 30, 2021.

125 basis points of the spread are to be paid-in-kind at maturity.

Borrowings under the Revolving Facility as amended, bears interest at an adjusted ICE Benchmark administration LIBOR, plus a spread of 3.50 %, for an aggregated rate of 3.58 % as of September 30, 2021.

The Main Street Loan bears interest at a rate per annum adjusted ICE Benchmark administration LIBOR for an interest period of 3 -months plus 3.00 %, for an aggregated rate of 3.13 % as of September 30, 2021.

For the three months ended March 31, 2022 and 2021, deferred financing costs charged to interest expense was $ 0.5  million and $ 0.8  million, respectively.

During the three months ended March 31, 2022, $ 9.0 million of deferred financing costs related to the repayment of the Company’s prior credit agreement, including the term facility, Main Street Loan and revolving credit facility were written-off to other expense.

On February 4, 2022, the Company issued $ 360.0 million aggregate principal amount of 6.75 % senior secured notes due 

2027  (the “Notes”) in a private offering.

The Notes bear interest at a rate of 6.75% per year, accruing from February 4, 2022 and interest on the Notes is payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2022.

The Notes will mature on February 15, 2027, subject to earlier repurchase or redemption.

The Company used the net proceeds from the offering to prepay in full all outstanding borrowings under its prior credit agreement, including the term facility, Main Street Loan, and revolving credit facility, to pay any related premiums and to terminate in full its prior credit agreement and the commitments thereunder. The Notes are senior secured obligations of the Company and are guaranteed on a senior secured basis by the Company and certain of the Company’s subsidiaries (collectively, the “Guarantors”) and secured by first -priority 

pari passu  liens, subject to permitted liens and certain exceptions, on substantially all the assets of the Company and the Guarantors.

The Notes may be redeemed by the Company, at set redemption prices and premiums, plus accrued and unpaid interest, if any. 

The Notes contain covenants that, among other things, restrict the Company’s ability, and the ability of the Company’s restricted subsidiaries, to incur certain additional indebtedness and issue preferred stock and make certain dividend payments, distributions, investments and other restricted payments.

These covenants are subject to a number of important exceptions and qualifications set forth in the Notes. 

New Revolving Credit Facility 

On February 4, 2022, the Company entered into a new senior secured revolving credit facility (the “New Revolving Credit Facility”), which provides for an aggregate principal amount of commitments of $ 45.0 million, maturing February 2027, including a letter of credit sub-facility in an aggregate principal amount of up to $ 5.0 million.

The obligations under the New Revolving Credit Facility are guaranteed by the Company and the Guarantors and are secured by first -priority pari passu 

liens, subject to permitted liens and certain exceptions, on substantially all the assets of the Company and the Guarantors.

Borrowings under the New Revolving Credit Facility, if any, will bear interest at a rate per annum equal to, at the Company’s option, an adjusted Secured Overnight Financing Rate (“SOFR”) rate plus a spread or a base rate plus a spread.

The New Revolving Credit Facility contains customary affirmative and negative covenants, as well as financial covenants and event of default provisions.

Senior Secured Credit Agreement

In January 2018, the Company entered into a senior secured credit agreement (the “First Export Credit Agreement”) with Citibank, N.A., London Branch and Eksportkreditt Norge AS, to make available to the Company a loan in an aggregate principal amount not to exceed $ 107.7 million for the purpose of providing financing for up to 80 % of the purchase price of the Company’s new ice class vessel, the National Geographic Endurance .

During March 2020, the Company took possession of the National

Geographic Endurance and borrowed $ 107.7 million under the First Export Credit Agreement for final payment .

In June 2020, the Company amended its First Export Credit Agreement to defer scheduled amortization payments from June 2020 through March 2021 and to suspend the total net leverage ratio covenant from June 2020 through June 2021.

During June 2021, the Company further amended its First Export Credit Agreement to, among other things, extend the deferral of scheduled amortization payments through December 2021 in the aggregate amount of $ 15.7 million, extend the waiver of its total net leverage ratio covenants through March 31, 2022, increase the interest rate spread by 50 basis points and annualize EBITDA used in its covenant calculation through December 31, 2022.

The deferred principal payments will amortize quarterly over three years starting in March 2022.

Certain other covenants continue to be more restrictive during the extended covenant waiver period. The First Export Credit Agreement, as amended, bears interest at a floating interest rate equal to three -month LIBOR plus a margin of 3.50 % per annum, for an aggregated rate of 3.62 % over the borrowing period covering September 30, 2021. 

In April 2019, the Company entered into a senior secured credit agreement (the “Second Export Credit Agreement”) with Citibank, N.A., London Branch and Eksportkreditt Norge AS, to make available to the Company, at the Company's option and subject to certain conditions, a loan in an aggregate principal amount not to exceed $ 122.8 million for the purpose of providing pre- and post-delivery financing for up to 80 % of the purchase price of the Company’s new expedition ice-class cruise vessel, the 

National Geographic Resolution .

During September 2021, the Company took possession of the 

National Geographic Resolution and as of September 30, 2021 

had borrowed $ 122.8 million under the Second Export Credit Agreement, drawing approximately $ 30.5 million in 2019,  $ 30.6 million in 2020 and $ 61.7 million in 2021.

In June 2020, the Company amended its Second Export Credit Agreement to suspend the total net leverage ratio covenant from June 2020 through June 2021.

During June 2021, the Company further amended its Second Export Credit Agreement to, among other things, extend the waiver of its total net leverage ratio covenants through March 31, 2022, increase the interest rate spread by 50 basis points and annualize EBITDA used in its covenant calculation through December 31, 2022.

In January 2018, the Company entered into a senior secured credit agreement (the “First Export Credit Agreement”) making available to the Company a loan in an aggregate principal amount not to exceed $ 107.7 million for the purpose of providing financing for up to 80 % of the purchase price of the Company’s new ice class vessel, the National Geographic Endurance , delivered in March 2020.

During June 2021, the Company amended its First Export Credit Agreement to, among other things, extend the deferral of scheduled amortization payments through December 2021 in the aggregate amount of $ 15.7 million, extend the waiver of its total net leverage ratio covenants through March 31, 2022, increase the interest rate spread by 50 basis points and annualize EBITDA used in its covenant calculation through December 31, 2022.

The deferred principal payments began amortizing quarterly over three years starting March 2022.

Certain other covenants continue to be more restrictive during the extended covenant waiver period. The First Export Credit Agreement, as amended, bears interest at a variable interest rate equal to three -month LIBOR plus a margin of 3.50 % per annum, for an aggregated rate of 4.33 % over the borrowing period covering March 31, 2022. 

In April 2019, the Company entered into a senior secured credit agreement (the “Second Export Credit Agreement”), to make available to the Company and subject to certain conditions, a loan in an aggregate principal amount not to exceed $ 122.8 million for the purpose of providing pre- and post-delivery financing for up to 80 % of the purchase price of the Company’s new expedition ice-class cruise vessel, the 

National Geographic Resolution , delivered in September 2021 and borrowed $ 122.8 million under the Second Export Credit Agreement.

During June 2021, the Company amended its Second Export Credit Agreement to, among other things, extend the waiver of its total net leverage ratio covenants through March 31, 2022, increase the interest rate spread by 50 basis points and annualize EBITDA used in its covenant calculation through December 31, 2022.

Certain other covenants continue to be more restrictive during the extended covenant waiver period.

The Second Export Credit Agreement, as amended, bears a variable interest rate equal to three -month LIBOR plus a margin of 3.50 % per annum, or 3.63 % over the borrowing period covering September 30, 2021.

The Second Export Credit Agreement, as amended, bears a variable interest rate equal to three -month LIBOR plus a margin of 3.50 % per annum, for an aggregated rate of 4.43 % over the borrowing period covering March 31, 2022.

Notes Payable

In connection with the Natural Habitat acquisition in May 2016, Natural Habitat issued a $ 2.5 million unsecured promissory note, amended in May 2020, to Benjamin L.

Bressler, the founder of Natural Habitat, with an outstanding principal amount of $ 1.7 million as of September 30, 2021. 

The promissory note accrues interest at a rate of 1.44 % annually, with interest payable every six months and the remaining principal payments to be due in equal installments on December 22, 2021 and 2022.

The Company’s Amended Credit Agreement, First Export Credit Agreement and Second Export Credit Agreement contain financial and restrictive covenants that include among others, net leverage ratios, limits on additional indebtedness and limits on certain investments.

As of September 30, 2021, the net leverage ratio covenant of the Company’s Amended Credit Agreement, First Export Credit Agreement and Second Export Credit Agreement have been waived through March 2022.

The Company was in compliance with its covenants in effect as of September 30, 2021.

NOTE 6  — 

Bressler, the founder of Natural Habitat, with an outstanding principal amount of $ 0.8 million as of March 31, 2022. 

The promissory note accrues interest at a rate of 1.44 % annually, with interest payable every six months and the remaining principal payment due on December 22, 2022. 

The Company’s Off the Beaten Path subsidiary has a loan maturing June 2023 for the purchase of guest transportation vehicles.

The loan’s original principal was $ 0.3 million, is collateralized by the vehicles and bears an interest rate of 4.77 % annually.

The Company’s Off the Beaten Path subsidiary has a $ 0.8 million loan under the Main Street Expanded Loan Facility, originated on December 11, 2020.

For the first 12 months, interest is not payable and accrued to the principal balance, thereafter, monthly interest payments are required.

The outstanding balance will amortize at a rate of 15 % on both December 2023 and December 2024, with the remaining balance due December 2025.

The loan bears a variable interest rate equal to one -month LIBOR plus a spread of 3.00 %, or 3.45 % as of March 31, 2022.

This loan may be voluntarily prepaid at any time and from time to time, without premium or penalty, other than customary “breakage costs”

and fees for LIBOR-based loans.

The Company’s DuVine subsidiary has a EUR 0.1 million State Assistance Loan related to the financial consequences of the COVID- 19 pandemic, for the purpose of employment preservation.

This loan matures August 2025, with monthly payments, and bears an interest rate of 0.53 % annually. 

The Company’s Notes, New Revolving Credit Facility, First Export Credit Agreement and Second Export Credit Agreement contain financial and restrictive covenants that include among others, net leverage ratios, limits on additional indebtedness and limits on certain investments.

As of March 31, 2022, the net leverage ratio covenant of the Company’s First Export Credit Agreement and Second Export Credit Agreement have been waived.

The Company was in compliance with its covenants in effect as of March 31, 2022.

NOTE 6 —

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

6 unchanged sentences

Currency Risk .

The Company uses currency exchange contracts to manage its exposure to changes in currency exchange rates associated with certain of its non-U.S.-dollar denominated receivables and payables.

The Company primarily hedges a portion of its current-year currency exposure to the Canadian and New Zealand dollars, the Brazilian Real, the South African Rand, the Euro and the British pound sterling.

The Company uses currency exchange forward contracts to manage its exposure to changes in currency exchange rates associated with certain of its non-U.S.-dollar denominated receivables and payables.

The Company primarily economically hedges a portion of its current-year currency exposure to the Canadian and New Zealand dollars, the Brazilian Real, the South African Rand, the Euro and the British pound sterling.

The fluctuations in the value of these forward contracts largely offset the impact of changes in the value of the underlying risk they economically hedge.

Interest Rate Risk .

The Company uses interest rate caps, designated as cash flow hedges, to manage the risk related to its floating rate corporate debt.

The Company records the effective portion of changes in the fair value of its cash flow hedges to other comprehensive income (loss), net of tax, and subsequently reclassifies these amounts into earnings in the period during which the hedged transaction is recognized.

The Company previously used interest rate caps to manage the risk related to its previously existing variable rate corporate debt.

The Company recorded the effective portion of changes in the fair value of its cash flow hedges to other comprehensive income (loss), net of tax, and subsequently reclassified these amounts into earnings in the period during which the hedged transaction was recognized.

Any changes in fair values of hedges that are determined to be ineffective are immediately reclassified from accumulated other comprehensive income (loss) into earnings.

No gains or losses of the Company’s cash flow hedges were considered to be ineffective and reclassified from other comprehensive income (loss) to earnings for the period ended September 30, 2021.

The Company reclassified $ 2.7 million from other comprehensive income (loss) to earnings for the period ended September 30, 2021 

due to the maturity of a cash flow hedge and the hedged item.

The Company estimates that it will not recognize any losses currently recorded in accumulated other comprehensive income (loss) in earnings over the next 12 months.

The Company will continue to assess the effectiveness of the hedges on an ongoing basis.

The Company held the following derivative instruments with absolute notional values as of September 30, 2021:

The Company reclassified $ 0.6  million from other comprehensive income (loss) to earnings for the period ended March 31, 2022, 

due to the termination of a cash flow hedge relationship between the Company’s interest rate caps and the Company’s underlying corporate variable rate debt, which was repaid during February 2022. 

The Company held the following derivative instruments with absolute notional values as of March 31, 2022:

(In thousands)

3 unchanged sentences

Foreign exchange contracts

11,191  

Estimated fair values (Level 2 ) of derivative instruments were as follows:

As of September 30, 2021

As of March 31, 2022

As of December 31, 2021

5 unchanged sentences

Derivative instruments designated as cash flow hedging instruments:

Foreign exchange forward (a)

$ 2,008  

Interest rate cap (a)

Derivative instruments not designated as cash flow hedging instruments:

Interest rate cap (a)

Foreign exchange forward (b)

Recorded in accounts payable and accrued expenses.

Recorded in other current assets.

Recorded in prepaid expenses and other current assets. 

Changes in the fair value of the Company’s hedging instruments are recorded in accumulated other comprehensive income, pursuant to the guidelines of cash flow hedge accounting as outlined in ASC 815.

 The effects of derivatives recognized in the Company’s condensed consolidated financial statements were as follows:

For the three months ended September 30,

For the nine months ended September 30,

Changes in the fair value of the Company’s hedging instruments are recorded in accumulated other comprehensive income. The effects of derivatives recognized in the Company’s condensed consolidated financial statements were as follows:

For the three months ended March 31,

(In thousands)

(unaudited)  

Derivative instruments designated as cash flow hedging instruments:

Foreign exchange forward (a)

$ ( 109 )  

$ ( 1,745 )  

$ ( 605 )  

$ 2,261  

Interest rate cap (b)

( 93 )  

( 256 )  

Interest rate cap (a)

Foreign exchange forward (b)

Derivative instruments not designated as cash flow hedging instruments:

Foreign exchange forward (c)

$ ( 756 )  

Interest rate cap (a)

( 451 )  

Foreign exchange forward (c)

$ ( 321 )  

For the three and nine months ended September 30, 2021, $ 0.9 million and $ 1.0 million, respectively, was recognized as a loss on foreign currency in the condensed consolidated statements of income, and $ 2.4  million and $ 2.0  million losses, respectively, were recognized, net of tax, as a component of other comprehensive income (loss) within stockholders’ equity.

For the three and nine months ended September 30, 2020, $ 5.3 million was recognized as a loss on foreign currency in the condensed consolidated statements of income, and a $ 1.7 million gain and a $ 7.6 million loss, respectively, was recognized, net of tax, as a component of other comprehensive income (loss) within stockholders’ equity.

Recognized, net of tax, as a component of other comprehensive income (loss) within stockholders’ equity.

For the three months ended March 31, 2022, $ 0.2  million was recognized, net of tax, in interest expense and $ 0.6  million was reclassified from other comprehensive income (loss) to interest expense.

For the three months ended March 31, 2021, $ 0.1 million was recognized, net of tax, as a component of other comprehensive income (loss) within stockholders’ equity.

For the three months ended March 31, 2021, $ 0.4 million was recognized, net of tax, as a component of other comprehensive income (loss) within stockholders’ equity.

Gains (losses) related to derivative instruments are expected to be largely offset by (losses) gains on the underlying exposures being hedged.

During the three and nine months ended September 30, 2021, a gain of $ 0.3  million and $ 0.2  million, respectively, were recognized in gain (loss) on foreign currency.

During the three and nine months ended September 30, 2020, a gain of $ 1.0 million and a loss of $ 1.0 million was recognized in gain (loss) on foreign currency.

Fair Value Measurements

During the three months ended March 31, 2022, a gain of $ 0.1  million was recognized in gain (loss) on foreign currency.

During the three months ended March 31, 2021, a gain of $ 0.1 million was recognized in gain (loss) on foreign currency.

In connection with the acquisition of Classic Journeys, the purchase agreement includes a contingent consideration earnout, see Note 11—Acquisitions, which is required to be recorded at fair value at each period.

The possible contingent acquisition consideration earnout is either zero or $ 0.6 million, depending on the achievement of certain average annual net profits targets for the years ended December 31, 2022 and 2023 by the acquired operation.

As of March 31, 2022, the contingent liability had a value of $ 0.2 million using a Level 3 valuation method, which was recorded in other long-term liabilities. 

The carrying amounts of cash and cash equivalents, accounts payable and accrued expenses, approximate fair value due to the short-term nature of these instruments.

The carrying value of long-term debt approximates fair value given that the terms of the agreements were comparable to the market as of September 30, 2021.

As of September 30, 2021 and December 31, 2020, the Company had no other significant liabilities that were measured at fair value on a recurring basis.

The carrying value of long-term debt approximates fair value given that the terms of the agreements were comparable to the market as of March 31, 2022.

As of March 31, 2022 and December 31, 2021, the Company had no other significant liabilities that were measured at fair value on a recurring basis.

NOTE 7 —

6 unchanged sentences

These repurchases exclude shares repurchased to settle statutory employee tax withholding related to the exercise of stock options and vesting of stock awards.

In March 2020, the Repurchase Plan was suspended due to the uncertain impact of the COVID- 19 pandemic and borrowings through the Main Street Expanded Loan Facility program restricts stock repurchases. The Company has cumulatively repurchased 875,218  shares of common stock for $ 8.3  million and 6,011,926 warrants for $ 14.7 million, since plan inception.

The remaining balance for the Repurchase Plan was $ 12.0  million as of September 30, 2021.

In March 2020, the Repurchase Plan was suspended due to the uncertain impact of the COVID- 19 pandemic and it remains suspended due to restrictions related to the Main Street Expanded Loan Facility program. The Company has cumulatively repurchased 875,218  shares of common stock for $ 8.3  million and 6,011,926 warrants for $ 14.7 million, since plan inception.

The remaining balance for the Repurchase Plan was $ 12.0  million as of March 31, 2022.

Preferred Stock

On August 31, 2020, the Company issued and sold 85,000 shares of Preferred Stock for $ 1,000 per share for gross proceeds of $ 85.0 million.

The Preferred Stock has senior and preferential ranking to the Company’s common stock.

In August 2020, the Company issued and sold 85,000 shares of Preferred Stock for $ 1,000 per share for gross proceeds of $ 85.0 million. During the year ended December 31, 2021, 5,000 shares of Preferred Stock and related accumulated dividends were converted by the holder into 566,364 shares of the Company’s common stock. The Preferred Stock has senior and preferential ranking to the Company’s common stock.

The Preferred Stock is entitled to cumulative dividends of 6.00 % per annum, and for the first two years, the dividends will be paid-in-kind.

After the second anniversary of the issuance date, the dividends may be paid-in-kind or be paid in cash at the Company’s option.

The Preferred Stock is convertible at any time, at the holder’s election, into a number of shares of common stock of the Company equal to the quotient obtained by dividing the then-current accrued value by the conversion price of $ 9.50 .

At any time after the third anniversary of the issuance, the Company may, at its option, convert all, but not less than all, of the Preferred Stock into common stock if the closing price of shares of common stock is at least 150% of the conversion price for 20 out of 30 consecutive trading days.

The number of shares of common stock received in such conversion shall be equal to the quotient obtained by dividing the then-current accrued value by the conversion price.

At the six -year anniversary of the closing date, each investor has the right to require the Company to repurchase their Preferred Stock and any Preferred Stock not requested to be repurchased shall be converted into common shares of the Company equal to the quotient obtained by dividing the then-current accrued value by the conversion price.

The Preferred Stock deferred issuance costs were approximately $ 2.9  million as of September 30, 2021.

The Company recorded accrued dividends for Preferred Stock of $ 1.3 million and $ 4.0 million for the three and nine months ended September 30, 2021, respectively, and $ 0.4 million for the three and nine months ended September 30, 2020.

As of September 30, 2021, the Preferred Stock could be converted at the option of the holders into approximately 9.5 million shares of the Company’s common stock.

After the second anniversary of the issuance date, the dividends may be paid-in-kind or be paid in cash at the Company’s option. At any time after the 

third  anniversary of the issuance, the Company 

at its option, convert all, but 

not  less than all, of the Preferred Stock into common stock if the closing price of shares of common stock is at least 

150%  of the conversion price for 

20  out of 

30  consecutive trading days. The Preferred Stock is convertible at any time, at the holder’s election, into a number of shares of common stock of the Company equal to the quotient obtained by dividing the then-current accrued value by the conversion price of $ 9.50 .

The Preferred Stock deferred issuance costs were approximately $ 2.7  million as of March 31, 2022.

The Company recorded accrued dividends for Preferred Stock of $ 1.3 million for the three months ended March 31, 2022 

As of March 31, 2022, the 80,000 shares of Preferred Stock could be converted at the option of the holders into approximately 9.3 million shares of the Company’s common stock.

NOTE 8 —

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The Company is authorized to issue up to 4.7 million shares of common stock under the 2021 Long-Term Incentive Plan (“the Plan”) which was approved by shareholders in June 2021.

As of September 30, 2021, approximately 3.9  million shares were available to be granted under the Plan.

As of September 30, 2021 and December 31, 2020, options to purchase an aggregate of 1.5 million and 510,000 shares of the Company’s common stock, respectively, with a weighted average exercise price of $ 14.37 and $ 10.30 , respectively, were outstanding.

As of September 30, 2021, 188,000  options were exercisable.

The Company recorded stock-based compensation expense of $ 1.4  million and $ 4.1  million during the three and nine months ended September 30, 2021, respectively, and $ 0.3  million and $ 1.9 million during the three and nine months ended September 30, 2020, respectively.

As of March 31, 2022, approximately 3.6  million shares were available to be granted under the Plan.

As of March 31, 2022 and December 31, 2021, options to purchase an aggregate of 1.5 million and 1.5 million shares of the Company’s common stock, respectively, with a weighted average exercise price of $ 14.37 and $ 10.30 , respectively, were outstanding.

As of March 31, 2022, 265,500  options were exercisable.

The Company recorded stock-based compensation expense of $ 1.8  million during the three months ended March 31, 2022, and $ 1.6  million during the three months ended March 31, 2021.

Long-Term Incentive Compensation

During the nine months ended September 30, 2021, the Company granted 224,506  restricted stock units ("RSUs") with a weighted average grant price of $ 17.45 .

During the three months ended March 31, 2022, the Company granted 212,066  restricted stock units ("RSUs") with a weighted average grant price of $ 15.27 .

The RSUs will primarily vest equally over three years on the anniversary of the grant date, subject to the recipient’s continued employment or service with the Company on the applicable vesting date. The number of shares were determined based upon the closing price of our common stock on the date of the award.

During the nine months ended September 30, 2021, the Company awarded 50,072  market performance share units (“MSUs”) with a weighted average grant price of $ 18.90 .

During the three months ended March 31, 2022, the Company awarded 56,209  market performance share units (“MSUs”) with a weighted average grant price of $ 15.08 .

The MSUs are market-based equity incentive awards based on a performance-multiplier of change in the stock price of the Company’s common stock between the grant date and March 31, 2025.

The number of shares that will eventually be earned and vest may be more or less then the number of MSUs that are awarded, depending on the Company's common stock price, at a level ranging from 0 % to 150 %.

The number of shares that will eventually be earned and vest may be more or less than the number of MSUs that are awarded, depending on the Company's common stock price, at a level ranging from 0 % to 150 %.

The number of MSUs earned shall be determined and shall vest on March 31, 2025.

As a new grant under his compensation agreement, the Company granted to Mr.

Berle, the Company’s new Chief Executive Officer, 1.0 million options on May 10, 2021 and, after Mr.

Berle purchased a required amount of the Company’s common stock in the open market, as specified in this compensation agreement, granted 58,452 RSUs to him on June 3, 2021.

The options were granted with an exercise price of $ 16.38 , and vest ratably over five years and the RSUs were granted with a weighted average grant price of $ 17.33 and vest ratably over five years.

Natural Habitat Contingent Arrangement

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Bressler will be granted options with a fair value equal to 10.1 % of such excess, subject to certain conditions.

Lawrence, President of Off the Beaten Path, was issued 1,007 profit interest units in the equity of Off the Beaten Path as part of the acquisition.

The profit interest units had a $ 132.86 per share grant date fair value and are considered vested upon issuance.

The Company recorded $ 0.1 million in stock-based compensation expense related to the value of these profit units for the nine months ended September 30, 2021, included in the Company’s total stock-based compensation disclosed above.

NOTE 9  —

NOTE 9 —

RELATED PARTY TRANSACTIONS

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Bressler, the founder of Natural Habitat.

See Note 5 —

Long-term Debt for more information.

NOTE 10  —

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.

The measurement of net deferred tax assets is reduced by the amount of any tax benefit that, based on available evidence, is not expected to be realized, and a corresponding valuation allowance is established.

The determination of the required valuation allowance against net deferred tax assets was made without taking into account the deferred tax liabilities created from the book and tax differences on indefinite-lived assets.

The Company accounts for income taxes using the asset and liability method, under which it recognizes deferred income taxes for the tax consequences attributable to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities, as well as for tax loss carryforwards and tax credit carryforwards.

The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recoverable or settled.

The Company recognizes the effect on deferred taxes of a change in tax rates

in income in the period that includes the enactment date.

The Company provides a valuation allowance against deferred tax assets if, based upon the weight of available evidence, the Company does not believe it is “more-likely-than- not”

that some or all of the deferred tax assets will be realized.

The Company will continue to evaluate the deferred tax asset valuation allowance balances in all of our foreign and U.S.

companies to determine the appropriate level of valuation allowances.

The Company is subject to income taxes in both the U.S.

and the non-U.S.

jurisdictions in which it operates.

The Company regularly assesses the potential outcome of current and future examinations in each of the taxing jurisdictions when determining the adequacy of the provision for income taxes.

The Company has only recorded financial statement benefits for tax positions which it believes reflect the “more-likely-than- not”

criteria of FASB’s authoritative guidance on accounting for uncertainty in income taxes, and it has established income tax reserves in accordance with this guidance where necessary.

Once a financial statement benefit for a tax position is recorded or a tax reserve is established, the Company adjusts it only when there is more information available or when an event occurs necessitating a change.

While the Company believes that the amount of the recorded financial statement benefits and tax reserves reflect the more-likely-than- not criteria, it is possible that the ultimate outcome of current or future examinations may result in a reduction to the tax benefits previously recorded on its condensed consolidated financial statements or may exceed the current income tax reserves in amounts that could be material.

As of September 30, 2021, and December 31, 2020, the Company had a liability for unrecognized tax benefits of $ 0.0 million.

The Company’s policy is to record interest and penalties on uncertain tax positions as a component of income tax expense. During the three and nine months ended September 30, 2021 and 2020, interest and penalties related to uncertain tax positions included in income tax expense are not significant.

The Company's effective tax rate for the three and nine months ended September 30, 2021 was an expense of 12.1 % and benefit of 2.8 %, respectively, primarily due to lower losses in the third quarter then forecast and the amount of losses expected for the full year 2021.

The effective tax rates for the three and nine months ended September 30, 2020 were a benefit of 9.5 % and 9.9 %, respectively, due to the impact of the COVID- 19 pandemic on the Company's operations.

The Company is subject to tax audits in all jurisdictions for which it files tax returns.

Tax audits by their very nature are often complex and can require several years to complete.

Currently, there are no U.S.

federal, state or foreign jurisdiction tax audits pending.

The Company’s corporate U.S.

federal and state tax returns for the current year and three prior years remain subject to examination by tax authorities and the Company’s foreign tax returns for the current year and four prior years remain subject to examination by tax authorities.

NOTE 11  —

To further expand the Company’s land-based experiential travel offerings and increase its addressable market, on February 1, 2021, the Company acquired, through its Natural Habitat subsidiary, 90.1 % of the outstanding common stock of Off the Beaten Path, LLC, a land-based travel operator specializing in authentic national park experiences, and on March 3, 2021, acquired 70 % of the outstanding common stock of DuVine Cycling + Adventure LLC, an international luxury cycling and adventure company focused on exceptional food and wine experiences. 

The acquisitions had an aggregate purchase price of $ 10.6 million, including $ 1.8 million in Company stock at closing.

The acquisitions were accounted for under purchase accounting and are included in our consolidated results from the acquisition dates.

Acquisition related cost were approximately $ 0.4 million and are included in general and administrative expenses in the condensed consolidated statements of operations for the nine months ended September 30, 2021.

The Company recorded approximately $ 6.5 million in intangible assets related to tradenames and customer lists and approximately $ 10.7  million in goodwill related to these acquisitions.

The acquired businesses contributed aggregate revenue of $ 10.5  million and $ 14.0  million during the three and nine months ended September 30, 2021, respectively, while their aggregate net income contributed for the three and nine months ended September 30, 2021 was immaterial to the Company's financial statements.

Following are pro forma revenue and net loss available to stockholders for the three and nine months ended September 30, 2021 and 2020, assuming the Company had completed the acquisitions on January 1, 2020: 

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

$ 64,507  

$ 2,130  

$ 81,608  

$ 84,829  

Net loss available to stockholders

( 25,678 )  

( 28,046 )  

( 97,142 )  

In addition to the businesses acquired above, during September 2021, the Company acquired the Crystal Esprit yacht for $ 13.3 million.

The Company expects to modify the vessel to a capacity of 48 guest, along with other changes, and replace the National Geographic Islander with it in the Galapagos.

NOTE 12  —

See Note 5—Long -term Debt for more information.

NOTE 10 —

As of March 31, 2022, and December 31, 2021, the Company had no unrecognized tax benefits recorded.

The Company’s policy is to record interest and penalties on uncertain tax positions as a component of income tax expense. The Company's effective tax rate for the three months ended March 31, 2022 was a benefit of 0.4 % versus a benefit of 7.6 % for the three months ended March 31, 2021, 

primarily due to the expected results for 2022  compared to the 2021 due to the impact of the COVID- 19 pandemic on the Company's operations.

NOTE 11 —

To further expand the Company’s land-based experiential travel offerings and increase its addressable market, the Company completed three acquisitions during 2021.

On February 1, 2021 ,  the Company acquired 

80.1 % of the outstanding common stock of Off the Beaten Path, a land-based travel operator specializing in authentic national park experiences, on 

March 3, 2021 ,  the Company acquired 

70 % of the outstanding common stock of DuVine, an international luxury cycling and adventure company focused on exceptional food and wine experiences, and on October 13, 2021, the Company acquired 80.1 % of Classic Journeys, a leading luxury walking tour company. 

The acquisitions had an aggregate purchase price of $ 23.6 million, including $ 1.8 million in Company stock and $ 0.2 million in deferred contingent consideration.

The deferred contingent consideration has an earnout potential between zero and $ 0.6 million.

The acquisitions were accounted for under purchase accounting and are included in the Company's consolidated financial statements since the date of the acquisitions.

The Company preliminarily recorded $ 10.4 million in intangible assets related to tradenames and customer lists and $ 19.9 million in goodwill related to these acquisitions.

The amount recorded for the intangible assets and goodwill is subject to possible adjustment when the valuation of Classic Journeys is finalized. 

NOTE 12 —

COMMITMENTS AND CONTINGENCIES

Redeemable Non-Controlling Interest  

Bressler, founder of Natural Habitat, retains a 19.9 % noncontrolling interest in Natural Habitat, which is subject to a put/call arrangement, amended in May 2020.

The arrangement between the Company and Mr.

Bressler was established in order to provide a formal exit opportunity for Mr.

Bressler and a path to 100% ownership for the Company.

Bressler has a put option that under certain conditions, and subject to providing notice by January 31, 2024, that enables him, but does not obligate him, to sell his remaining interest in Natural Habitat to the Company, valued as of December 31, 2023.

The Company has a call option, but not an obligation, on or after January 31, 2024, with an expiration of March 31, 2029, under which it can buy Mr.

Bressler’s remaining interest at a similar fair value measure as Mr.

Bressler’s put option, subject to a call purchase price minimum.

Lawrence, through a combination of his original minority interest and the profit interest units he received, retains a 19.9 % noncontrolling interest in Off the Beaten Path, which is subject to a put/call arrangement.

The arrangement between the Company and Mr.

Lawrence was established in order to provide a formal exit opportunity for Mr.

Lawrence and a path to 100% ownership for the Company.

Lawrence has a put option, that under certain conditions and subject to providing notice by October 31, 2025, that enables him, but does not obligate him, to sell his remaining interest in Off the Beaten Path to the Company on December 31, 2025.

The Company has a call option, but not an obligation, on or after October 31, 2025, with an expiration of December 31, 2030, under which it can buy Mr.

Lawrence’s remaining interest at a similar fair value measure as Mr.

Lawrence’s put option.

Levine, founder of DuVine, retains a 30 % noncontrolling interest in DuVine, which is subject to a put/call arrangement.

The arrangement between the Company and Mr.

Levine was established in order to provide a formal exit opportunity for Mr.

Levine and a path to 100% ownership for the Company.

Levine has a put option, that under certain conditions and subject to providing notice by January 31, 2026, that enables him, but does not obligate him, to sell his remaining interest in DuVine to the Company as of December 31, 2025.

The Company has a first call option, but not an obligation, on or after December 31, 2023, expiring December 31, 2025, to acquire an additional 10 % of DuVine from Mr.

Levine, and a second call option, but not an obligation, on or after December 31, 2025, 

with an expiration of December 31, 2030, under which it can buy Mr.

Levine’s remaining interest at a similar fair value measure as Mr.

Levine’s put option, subject to a call purchase price minimum.

Redeemable Non-Controlling Interest

The Company has controlling interests in its Natural Habitat, Off the Beaten Path, DuVine and Classic Journeys consolidated subsidiaries.

The noncontrolling interests are subject to put/call agreements.

The put options enable the minority holders, but do 

not obligate them, to sell the remaining interests to the Company.

The Company has call options which enable it, but does not obligate it, to acquire the remaining interests in the subsidiaries, subject to certain dates, expirations and similar redemption value purchase measurements as the put options.

Since the redemption of the noncontrolling interests are not solely in the Company’s control, the Company is required to record the redeemable noncontrolling interest outside of stockholders’

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Under this methodology, a calculation of the present value of the redemption value is compared to the carrying value of the redeemable noncontrolling interest and the carrying value of the redeemable noncontrolling interest is adjusted to the redemption value’s present value.

Any adjustments to the carrying value of the redeemable noncontrolling interest, up to the fair value of the noncontrolling interest, are classified to retained earnings.

Adjustments in excess of the fair value of the noncontrolling interest, are treated as a decrease to net income available to common stockholders.

The fair value of the put options were determined using a discounted cash flow model.

Any adjustments to the carrying value of the redeemable noncontrolling interest, up to the redemption value of the noncontrolling interest, are classified to retained earnings.

Adjustments in excess of the redemption value of the noncontrolling interest, are treated as a decrease to net income available to common stockholders.

The redemption value of the put options were determined using a discounted cash flow model.

The redemption values were adjusted to their present value using the Company’s weighted average cost of capital. 

The following is a rollforward of redeemable non-controlling interest:

For the three months ended September 30,

For the nine months ended September 30,

For the three months ended March 31,

(In thousands)

(unaudited)  

Beginning balance

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$ 7,494  

$ 16,112  

Net income (loss) attributable to noncontrolling interest

( 156 )  

Net loss attributable to noncontrolling interest

( 427 )  

Acquired businesses' noncontrolling interest

( 941 )  

Fair value adjustment of put option

( 1,874 )  

Balance September 30,

$ 10,134  

$ 7,940  

Redemption value adjustment of put option

Ending balance

$ 14,458  

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In return for these rights, the Company is charged a royalty fee.

The royalty fee is included

within selling and marketing expense on the accompanying condensed consolidated statements of operations.

The amount is calculated based upon a percentage of certain ticket revenues less travel agent commission, including the revenues received from cancellation fees and any revenues received from the sale of pre- and post-expedition extensions.

Royalty expense for the three and nine months ended September 30, 2021 was $ 0.7  million and $ 0.9  million, respectively, and $ 0.0  million and $ 1.3 million for the three and nine months ended September 30, 2020, respectively.

The royalty balance payable to National Geographic as of September 30, 2021 and December 31, 2020 was $ 0.7  and $ 0.0  million, respectively, and are included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets.

The royalty fee is included within selling and marketing expense on the accompanying condensed consolidated statements of operations.

The fee is calculated based upon a percentage of certain ticket revenues less travel agent commission, including the revenues received from cancellation fees and any revenues received from the sale of pre- and post-expedition extensions.

Royalty expense for the three months ended March 31, 2022 was $1.2 million and was $ 0.0  million for the three months ended March 31, 2021.

The royalty balance payable to National Geographic as of March 31, 2022 and December 31, 2021 was $1.5 and $ 0.9  million, respectively, and are included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets.

Royalty Agreement –

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The fees are included within selling and marketing expense on the accompanying condensed consolidated statements of operations.

This royalty fee expense was $ 0.2  million and $ 0.3  million for the three and nine months ended September 30, 2021, respectively, and for the three and nine months ended September 30, 2020 was $ 0.1 million and $ 0.1 million, respectively.

This royalty fee expense was $ 0.2  million and $ 0.0 million for the three months ended March 31, 2022 

and 2021, respectively.

Charter Commitments

From time to time, the Company enters into agreements to charter vessels onto which it holds its tours and expeditions.

Future minimum payments on its charter agreements as of September 30, 2021 are as follows:

Future minimum payments on its charter agreements as of March 31, 2022 are as follows:

For the years ended December 31,

(In thousands)

2021 (three months)

(unaudited)  

2022 (nine months)

$ 8,178  

Legal Proceedings

From time to time, the Company is party to litigation and regulatory matters and claims.

The Company expenses legal fees as incurred.

The Company records a provision for contingent losses when it is both probable that a liability will be incurred and the amount or range of the loss can be reasonably estimated.

The results of complex proceedings and reviews are difficult to predict and the Company’s view of these matters may change in the future as events related thereto unfold.

An unfavorable outcome to any legal or regulatory matter, if material, could have an adverse effect on the Company’s operations or its financial position, liquidity or results of operations.

NOTE 13  —

10,156  

$ 18,334  

NOTE 13 —

SEGMENT INFORMATION

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The chief operating decision maker and management review operating results monthly, and base operating decisions on the total results at a consolidated level, as well as at a segment level.

The reports provided to the Board of Directors are at a consolidated level and also contain information regarding the separate results of both segments.

The reports provided to the Board of Directors are at a consolidated level and contain information regarding the separate results of both segments.

The Company evaluates the performance of its business segments based largely on tour revenues and operating income, without allocating other income and expenses, net, income taxes and interest expense, net.

For the three and nine months ended September 30, 2021 and 2020, operating results for the Company’s reportable segments were as follows:

For the three months ended September 30,

For the nine months ended September 30,

For the three months ended March 31, 2022 and 2021, operating results for the Company’s reportable segments were as follows:

For the three months ended March 31,

(In thousands)

(unaudited)  

Tour revenues:

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$ 49,790  

$ 40,264  

$ 69,533  

$ ( 29,269 )  

Land Experiences

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16,276  

41,291  

12,458  

28,833  

Total tour revenues

2 unchanged sentences

$ 66,066  

$ 81,555  

$ 81,991  

$ ( 436 )  

Operating (loss) income:

$ ( 22,282 )  

$ ( 24,835 )  

$ 2,553  

Operating loss:

$ ( 33,569 )  

4 unchanged sentences

( 3,770 )  

( 5,021 )  

Total operating loss

2 unchanged sentences

$ ( 3,179 )  

$ ( 81,303 )  

$ ( 59,308 )  

$ ( 21,995 )  

Depreciation and amortization are included in segment operating income as shown below:

For the three months ended

September 30,

For the nine months ended

September 30,

For the three months ended March 31,

(In thousands)

(unaudited)  

Depreciation and amortization:

2 unchanged sentences

$ 2,874  

$ 24,618  

$ 22,075  

$ 2,543  

Land Experiences

( 202 )  

( 34 )%  

( 486 )  

Total depreciation and amortization

2 unchanged sentences

$ 2,929  

$ 23,728  

$ 2,057  

The following table presents our total assets, intangibles, net and goodwill by segment:

(In thousands)

As of September 30, 2021

As of March 31, 2022

As of December 31, 2021

Total Assets:

(unaudited)  

$ 714,926  

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Land Experiences

11,084  

11,361  

Total intangibles, net

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$ 42,017  

For the three and nine months ended September 30, 2021 there was $ 1.0 million and $ 1.1 million, respectively, in intercompany tour revenues between the Lindblad and Land Experiences reportable segments eliminated in consolidation.

For the 

three and nine months ended September 30, 2020, 

there were $ 0.0  million and $ 2.2  million, respectively in intercompany tour revenues between the Lindblad and Land Experiences reportable segments eliminated in consolidation.

NOTE 14  —

SUBSEQUENT EVENTS

On October 8, 2021, the Company received $ 6.0 million, representing the remainder of its grant, under the US Treasury’s Coronavirus Economic Relief for Transportation Services (“CERTS”) Act.

The CERTS Act, provided grants to eligible motorcoach, school bus, passenger vessel, and pilotage companies that have experienced annual revenue losses of 25 percent or more as result of COVID- 19.

The priority use of grant funds must be for payroll costs, though grants may be used for operating expenses and the repayment of debt accrued to maintain payroll.

The Company anticipates using the granted funds primarily for permitted payroll costs and ship operating expenses.

On October 14, 2021, to further expand its land-based experiential travel offerings, the Company acquired 80.1 % of the outstanding ownership interests in Classic Journeys, LLC for $ 12.8 million in cash.

Classic Journeys, LLC is a leading luxury walking tour company that offers highly curated active small-group and private custom journeys that are centered around cinematic walks led by expert local guides in over 50 countries around the world. 

For the three months ended March 31, 2022 and 2021, there was $ 1.6  million and $ 0.0 million, respectively, in intercompany tour revenues between the Lindblad and Land Experiences reportable segments eliminated in consolidation.

MANAGEMENT ’

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s Annual Report on Form 10-K filed with the Securities and Exchange Commission ( “

) on March 12, 2021.

) on February 28, 2022.

Cautionary Note Regarding Forward-Looking Statements

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Potential risks and uncertainties include, but are not limited to:

suspended operations, cancelling or rescheduling of voyages and other potential disruptions to our business and operations related to the novel coronavirus COVID-19;

the impacts of the novel coronavirus COVID-19 on our financial condition, liquidity, results of operations, cash flows, employees, plans and growth;

the impacts of the novel coronavirus COVID-19 on future travel and the cruise and airline industries in general;

suspended operations, cancelling or rescheduling of voyages and other potential disruptions to our business and operations related to the COVID-19 virus and the Russia-Ukraine conflict;

the impacts of the COVID-19 virus and/or the Russia-Ukraine conflict on our financial condition, liquidity, results of operations, cash flows, employees, plans and growth, fuel prices, changes in fuels consumed and availability of fuel supply in the geographies in which we operate or in general;

adverse worldwide economic, geopolitical or other conditions could reduce the demand for expedition travel;

adverse publicity regarding the cruise industry in general; 

unscheduled disruptions in our business due to travel restrictions, weather events, mechanical failures, pandemics or other events; 

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our ability to maintain our relationship with National Geographic;

compliance with new and existing laws and regulations, including environmental regulations and travel advisories and restrictions;

compliance with the financial and/or operating covenants in our debt arrangements;

adverse publicity regarding the cruise industry in general; 

the impact of severe or unusual weather conditions, including climate change, on our business;

loss of business due to competition;

the result of future financing efforts;

delays and costs overruns with respect to the construction and delivery of newly constructed vessels;

compliance with new and existing laws and regulations, including environmental regulations and travel advisories and restrictions;

the loss of key employees, our inability to recruit or retain qualified shoreside and shipboard employees and increased labor costs; 

the inability to meet or achieve our sustainability related goals, aspirations, initiatives, and our public statements and disclosures regarding them;

our common stock ranks junior to our Series A Preferred Stock with respect to dividends and amounts payable in the event of our liquidation, dissolution or winding up our affairs;

those risks discussed herein and in Item 1A.

Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on March 12, 2021 (the “2020 Annual Report”).

Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on February 28, 2022(the “2021 Annual Report”).

We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this Form 10-Q.

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Business Overview

We provide expedition cruising, land-based adventure travel and cycling touring experiences, using itineraries that feature up-close encounters with wildlife, nature, history and culture, and promote guest empowerment, human connections and interactivity.

Our mission is offering life-changing adventures around the world and pioneering innovative ways to allow our guests to connect with exotic and remote places. 

We currently operate a fleet of ten owned expedition ships, having taken possession of our new polar ice class vessel, the National Geographic Resolution , in September 2021, and operate five seasonal charter vessels under the Lindblad Expeditions Holdings, Inc.

(“Lindblad”) brand.

Additionally, during September 2021, we purchased the Crystal Esprit yacht and expect to begin operating it in 2022.

Our voyages include destinations such as the Arctic, Antarctic, the Galápagos, Alaska and Baja's Sea of Cortez.

We provide expedition cruising and land-based adventure travel fostering a spirit of exploration and discovery, using itineraries featuring up-close encounters with wildlife and nature, history and culture and promote guest empowerment, human connections and interactivity.

Our mission is to offer life-changing adventures around the world and pioneering innovative ways to allow our guests to connect with exotic and remote places. 

We currently operate a fleet of ten owned expedition ships and operate five seasonal charter vessels under the Lindblad Expeditions, LLC. (“Lindblad”) brand.

Each expedition ship is fully equipped with state-of-the-art tools for in-depth exploration and the majority of our expeditions involve travel to remote places, such as voyages to the Arctic, Antarctic, the Galápagos Islands, Alaska, Baja’s Sea of Cortez, the South Pacific, Costa Rica and Panama.

We have a longstanding relationship with the National Geographic Society dating back to 2004, which is based on a shared interest in exploration, research, technology and conservation.

This relationship includes a co-selling, co-marketing and branding arrangement with National Geographic Partners, LLC (“National Geographic”), whereby our owned vessels carry the National Geographic name and National Geographic sells our expeditions through its internal travel division.

This relationship includes a co-selling, co-marketing and branding arrangement whereby our owned vessels carry the National Geographic name and National Geographic sells our expeditions through its internal travel division.

We collaborate with National Geographic on voyage planning to enhance the guest experience by having National Geographic experts, including photographers, writers, marine biologists, naturalists, field researchers and film crews, join our expeditions.

Guests have the ability to interface with these experts through lectures, excursions, dining and other experiences throughout their voyage.

We deploy chartered vessels for various seasonal offerings and continually seek to optimize our charter fleet to balance our inventory with demand and maximized yields.

We use our charter inventory as a mechanism to both increase travel options of our existing and prospective guests and also to test demand for certain areas and seasons to understand the potential for longer term deployments and additional vessel needs.

We operate land-based nature adventure travel expeditions around the globe, with unique itineraries designed to offer intimate encounters with nature and the planet's wild destinations and the animals and people who live there.

Guests are able to interface with these experts through lectures, excursions, dining and other experiences throughout their voyage.

We operate land-based nature adventure travel expeditions around the globe, with unique itineraries designed to offer intimate encounters with nature and the planet’s wild destinations and the animals and people who live there.

Natural Habitat, Inc.

(“Natural Habitat”) creates opportunities for adventure and discovery that transform lives with eco-conscious expeditions and nature-focused, small-group tours that include polar bear tours in Churchill, Canada, Alaskan grizzly bear adventures, small-group Galápagos tours and African safaris.

(“Natural Habitat”) provides eco-conscious expeditions and nature-focused, small-group experiences that include polar bear tours in Churchill, Canada, Alaskan grizzly bear adventures, small-group Galápagos Islands tours and African safaris.

Natural Habitat has partnered with World Wildlife Fund (“WWF”) to offer conservation travel, which is sustainable travel that contributes to the protection of nature and wildlife. 

DuVine Cycling + Adventure Company (“DuVine”) provides international cycling adventures and unforgettable travel experiences, connecting with local character and culture on small, intimate group cycling tours around the world with cycling experts as guides, immersion in local cuisine, accommodations and history. International cycling tours include the exotic Costa Rican rainforests, the rocky coasts of Ireland, deep in the vineyards of Spain, or high in the Swiss Alps.

Cycling adventures in the United States vary from cycling beneath the California redwoods to pedaling through Vermont farmland, wine tastings in the world-class vineyards of Napa and Sonoma or farm-to-table renaissance dining.

Off the Beaten Path, LLC (“Off the Beaten Path”) provides small group travel, led by local, experienced guides, with distinct focus on wildlife, hiking national parks and culture, to change people's lives through exceptional travel.

Off the Beaten Path is known for providing distinctive insider national park experiences in the Rocky Mountains, Desert Southwest, and Alaska, and includes unique trips across Europe, Africa, Australia, Central and South America and the South Pacific, for connecting the heart of the traveler with the soul of the place.

We operate two segments including the Lindblad segment, which consists of the operations of our Lindblad brand, and the Land Experiences segment, consisting of our Natural Habitat, DuVine and Off the Beaten Path brands.

2021 Highlights

We resumed ship operations in June 2021 and as of November 2, 2021 had eight of our ten vessels providing expeditions to guests.

During June 2021, we launched three ships in Alaska and another in the Galapagos and during the third quarter the Company resumed operations on the majority of its remaining vessels with additional ships operating in Alaska, the Galapagos, Iceland and the Pacific Northwest. 

During September 2021, we drew down $46.2 million under the second export credit agreement in conjunction with our final payment upon delivery of the National Geographic Resolution . In April 2021 we drew down $15.5 million under the second export credit agreement in conjunction with our fourth installment payment for the vessel. 

During the first quarter of 2021, we completed the acquisitions of Off the Beaten Path, a land-based travel operator specializing in authentic national park experiences, and DuVine, an international luxury cycling and adventure company focused on exceptional food and wine experiences.

During September 2021, we acquired the Crystal Esprit yacht for $13.3 million.

We expect to modify the vessel to a capacity of 48 guest, along with other changes, and replace the National Geographic Islander in the Galapagos.

Return to Fleet Operations and COVID-19 Business Update 

We resumed ship operations in June 2021 and, as of November 2, 2021, had eight of our ten operating vessels providing expeditions to guests.

During June 2021, we launched three ships in Alaska and another in the Galapagos, and during the third quarter, we resumed operations on the majority of our remaining vessels with additional ships operating in Alaska, the Galapagos, Iceland and the Pacific Northwest.

We continue to work with local authorities on plans to operate in additional geographies during remainder of the year and in early 2022.

As the COVID-19 virus effects travel restrictions in various locations around the world, we also continue to work with our guests to reschedule travel plans and refund payments or issue future travel certificates, as applicable, for those expeditions and trips that we are not able to operate due to local restrictions.

We believe there are a variety of strategic advantages that enable us to deploy our ships safely and quickly, while mitigating the risk of COVID-19 as travel restrictions are lifted.

The most notable is the size of our owned and operated vessels which range from 48 to 148 passengers, allowing for a highly controlled environment that includes stringent cleaning protocols.

The small nature of our ships also allows us to efficiently and effectively test our guests and crew prior to boarding. Additionally, all guests age 12 and older, crew and staff are required to be fully vaccinated and the majority of expeditions take place in remote locations where human interactions are limited, so there is less opportunity for external influence.

While our ships were not in operations, the majority of the fleet was being maintained with minimally required crew on-board to ensure they complied with all necessary regulations and could be fully put back into service quickly as needed.

Ahead of launching each ship, crew levels were increased as necessary to prepare each vessel for operations as well as for crew training and vaccinations.

Our offices primarily remain closed, and most employees are working remotely to maintain general business operations, to provide assistance to existing and potential guests and to maintain information technology systems.

We continue to adhere to the comprehensive plan we implemented in March 2020 to mitigate the impact of COVID-19 and preserve and enhance our liquidity position. Prior to resuming operations, this plan employed a variety of cost reduction and cash preservation measures including significantly reducing ship and land-based expedition costs such as capital expenditures, crew payroll, land costs, fuel and food, and meaningfully reducing general and administrative expenses through reduced payroll and the elimination of all non-essential travel, office expenses and discretionary spending.

We also accessed available capital under existing debt facilities and through the issuance of preferred stock.

With the majority of operations resuming, operating costs are ramping back up, but given the continued uncertainty around COVID-19 and given that guest counts have not yet returned to traditional levels, we continue to minimize expenditures as appropriate.

DuVine Cycling + Adventure Company (“DuVine”) provides intimate cycling adventures and travel experiences, led by expert guides, with a focus on connecting with local character and culture, including high-quality local cuisine and accommodations.

International cycling tours include the exotic Costa Rican rainforests, the rocky coasts of Ireland and the vineyards of Spain, while cycling adventures in the United States include cycling beneath the California redwoods, pedaling through Vermont farmland and wine tastings in the world-class vineyards of Napa and Sonoma.

Off the Beaten Path, LLC (“Off the Beaten Path”) provides small group travel, led by local, experienced guides, with distinct focus on wildlife, hiking national parks and culture.

Off the Beaten Path offerings include insider national park experiences in the Rocky Mountains, Desert Southwest, and Alaska, as well as unique trips across Europe, Africa, Australia, Central and South America and the South Pacific.

Classic Journeys, LLC (“Classic Journeys”) offers highly curated active small-group and private custom journeys centered around cinematic walks led by expert local guides in over 50 countries around the world.

These walking tours are highlighted by luxury boutique accommodations and handcrafted itineraries that immerse guests into the history and culture of the places they are exploring and the people who live there.

2022 First Quarter Highlights

During the first quarter of 2022 the Company continued to ramp its operations, providing expeditions to guests on nine of its ten owned vessels including trips to Antarctica, Baja California’s Sea of Cortez, Bahamas, Belize, Costa Rica and Panama, and the Galápagos.

On February 4, 2022, we issued $360.0 million of 6.75% senior secured notes due 2027 and entered into a new $45.0 million revolving credit facility, which remains undrawn and matures February 2027.

We used the proceeds from the notes to prepay in full all outstanding borrowings under our prior term loan, including the Main Street Loan, and revolving credit facility, and paid all related premiums, terminating in full our existing credit agreement and the commitments thereunder.

On February 25, 2022, our cupos necessary for tours in the Galápagos Islands were contractually renewed for a 20-year period.

Ramp of Fleet Operations and COVID-19 Business Update  

During the first quarter of 2022, we continued to ramp up our operations, providing expeditions to guests on nine of our ten owned vessels including trips to Antarctica, Baja California’s Sea of Cortez, Bahamas, Belize, Costa Rica and Panama, and the Galápagos.

Due to the spread of the COVID-19 virus and the effects of travel restrictions around the world, we had previously suspended or rescheduled the majority of our expeditions departing between March 16, 2020 through May 31, 2021.

Travel restrictions related to COVID-19 have diminished dramatically and we continue to work with local authorities on plans to operate itineraries in additional geographies during 2022 and 2023.

Where travel restrictions remain, which now also includes a limited number of itineraries impacted by the Russia-Ukraine conflict, we work with guests to reschedule travel plans and refund payments or issue future travel certificates, as applicable.

We believe there are a variety of strategic advantages that enable us to deploy our ships safely and quickly, while mitigating the risk of COVID-19 as travel restrictions are lifted.

The most notable is the size of our owned and operated vessels which range from 48 to 148 passengers, allowing for a highly controlled environment that includes stringent cleaning protocols.

The small nature of our ships also allows us to efficiently and effectively test our guests and crew prior to boarding, or as otherwise needed. Additionally, all guests age five and older, crew and staff are required to be fully vaccinated and the majority of expeditions take place in remote locations where human interactions are limited, so there is less opportunity for external influence.

Bookings Trends

We have experienced a substantial negative impact from the COVID-19 virus including elevated cancellations and softness in near-term demand.

Despite the COVID-19 impact, we continue to see significant new bookings across the fleet and have substantial advanced reservations for future travel.

Bookings for the full year 2022 are 51% ahead of the bookings for 2021 as of the same date a year ago and 25% ahead of the bookings for 2020 as of the same date two years ago.

For voyages that were cancelled or rescheduled, we offered guests future travel credits or full refunds and the majority of guests opted for future travel credits.   

We have substantial advanced reservations for future travel despite some continued impact from the COVID-19 virus, including elevated cancellations and softness in near-term demand, as well as some impact related to itinerary changes due to the Russia-Ukraine conflict. Bookings for the second half of 2022 are 50% ahead of the bookings for the second half of 2019 at the same point three years ago and 32% ahead of the bookings for 2020 two years ago.

Balance Sheet and Liquidity

As of September 30, 2021, we had $155.6 million in unrestricted cash and $29.5 million in restricted cash primarily related to deposits on future travel originating from U.S.

As of March 31, 2022, we had $154.8 million in unrestricted cash and $30.0 million in restricted cash primarily related to deposits on future travel originating from U.S.

ports and credit card reserves.

During August 2021, we received a $21.0 million grant under the Coronavirus Economic Relief for Transportation Services (“CERTS”) Act, which provided grants to eligible motorcoach, school bus, passenger vessel and pilotage companies that have experienced annual revenue losses of 25 percent or more as result of COVID-19.

The priority use of grant funds must be for payroll costs, though grants may also be used for permitted operating expenses and the repayment of debt accrued to maintain payroll.

As of September 30, 2021, we had a total debt position of $561.8 million and were in compliance with all of our debt covenants currently in effect.

In conjunction with the continuing economic risk of the COVID-19 pandemic, during 2021 we have taken a variety of steps to strengthen our balance sheet and increase liquidity including:

During June 2021, we further amended our export credit facilities to, among other things, extend the deferral of scheduled amortization payments of the first export credit facility through December 2021 in the aggregate amount of $15.7 million, extend the effective suspension of the total net leverage ratio covenant through March 2022, increase the interest rate for the export credit facilities by 50 basis points and annualize EBITDA used in the covenant calculation through December 31, 2022.

The deferred principal payments will amortize quarterly over three years starting in March 2022.

Certain other covenants continue to be more restrictive during the extended covenant waiver period.

During April 2021, we further amended our term loan and revolving credit agreement to, among other things, extend the waiver of its total net leverage ratio covenant through March 31, 2022, annualized EBITDA used in our covenant calculation through December 31, 2022 and increase the interest rate spreads of the Term Facility, excluding the Main Street Loan, and the Revolving Facility by 50 basis points, such additional interest to be paid in cash.

Certain other covenants continue to be more restrictive during the extended covenant waiver period.

As we continue to ramp up operations, our monthly cash usage will increase as we incur costs in operating expeditions, preparing additional ships for return to service, spending to market and advertise upcoming expeditions and trips.

Our total debt position was $584.1 million, and we were in compliance with all of our debt covenants currently in effect.

As we continue to ramp operations, our monthly cash usage will increase as we incur costs in operating expeditions, preparing additional ships for return to service, spending to market and advertise upcoming expeditions and trips.

We also anticipate a significant increase in guest payments as we receive final payments for upcoming expeditions as well as deposits for new reservations for future travel.

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a description of certain line items and operational and financial metrics we utilize to assist us in managing our business;

results and a comparable discussion of our consolidated and segment results of operations for the three and nine months ended September 30, 2021 and 2020;

results and a comparable discussion of our consolidated and segment results of operations for the three months ended March 31, 2022 and 2021;

a discussion of our liquidity and capital resources, including future capital and contractual commitments and potential funding sources;

48 unchanged sentences

dollar is the functional currency in our foreign operations and re-measurement adjustments and gains or losses resulting from foreign currency transactions are recorded as foreign exchange gains or losses in the condensed consolidated statements of operations.

Traditionally, our Lindblad brand tour revenues from the sale of guest tickets are mildly seasonal, historically larger in the first and third quarters.

The seasonality of our operating results fluctuates due to our vessels being taken out of service for scheduled maintenance or drydocking, which is typically during nonpeak demand periods, in the second and fourth quarters. Our drydock schedules are subject to cost and timing differences from year to year due to the availability of shipyards for certain work, drydock locations based on ship itineraries, operating conditions experienced especially in the polar regions and the applicable regulations of class societies in the maritime industry, which require more extensive reviews periodically. Drydocking impacts operating results by reducing tour revenues and increasing cost of tours.

Natural Habitat, DuVine and Off the Beaten Path are seasonal businesses, with the majority of Natural Habitat’s tour revenue recorded in the third and fourth quarters from its summer season departures and polar bear tours, while the majority of Off the Beaten Path and DuVine’s revenues are recorded during the second and third quarters from their summer season tours and cycling adventures.

Traditionally, our Lindblad brand tour revenues are mildly seasonal, historically larger in the first and third quarters.

Our drydock schedules are subject to cost and timing differences from year-to-year due to the availability of shipyards for certain work, drydock locations based on ship itineraries, operating conditions experienced especially in the polar regions and the applicable regulations of class societies in the maritime industry, which require more extensive reviews periodically.

Drydocking impacts operating results by reducing tour revenues and increasing cost of tours.

Our Natural Habitat, DuVine, Off the Beaten Path and Classic Journeys brands are seasonal businesses, with the majority of Natural Habitat’s tour revenue recorded in the third and fourth quarters from its summer season departures and polar bear tours, while the majority of Off the Beaten Path, DuVine and Classic Journeys’

revenues are recorded during the second and third quarters from their spring and summer season departures.

Results of Operations - Consolidated

For the three months ended September 30,

For the nine months ended September 30,

For the three months ended March 31,

(In thousands)

6 unchanged sentences

Undistributed loss per share available to stockholders:

Comparison of the Three and Nine Months Ended September 30, 2021 to Three and Nine Months Ended September 30, 2020 - Consolidated

Comparison of the Three Months Ended March 31, 2022 to Three Months Ended March 31, 2021 - Consolidated

Tour Revenues

Tour revenues for the three months ended September 30, 2021 increased $63.5 million, to $64.5 million, compared to $1.0 million for the three months ended September 30, 2020.

The Lindblad segment tour revenues increased by $33.1 million and the Land Experiences segment increased $30.4 million, primarily as a result of restarting expeditions and trips.

The Land Experiences segment also includes the results of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021. 

Tour revenues for the nine months ended September 30, 2021 decreased $0.4 million to $81.6 million, compared to $82.0 million for the nine months ended September 30, 2020.

The Lindblad segment tour revenues decreased by $29.3 million, primarily as a result of cancelled, disrupted and rescheduled expeditions due to COVID-19.

At the Land Experiences segment, tour revenues increased $28.8 million over the prior year period, primarily due to operating additional trips and from the inclusion of the results of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021.

Tour revenues for the three months ended March 31, 2022 increased $66.1 million, to $67.8 million, compared to $1.8 million for the three months ended March 31, 2021.

The Lindblad segment tour revenues increased by $49.8 million and the Land Experiences segment increased $16.3 million, primarily due to the ramp of expeditions and trips.

The Land Experiences segment also includes a full quarter of results for Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021, and Classic Journeys which was acquired during the fourth quarter of 2021. 

Cost of Tours

Total cost of tours for the three months ended September 30, 2021 increased $37.5 million, to $45.6 million compared to $8.1 million for the three months ended September 30, 2020.

At the Lindblad segment, cost of tours increased $18.3 million, due to the restart of expeditions.

At the Land Experiences segment, cost of tours increased $19.2 million, due to operating additional trips during the third quarter of 2021 and the inclusion of the results of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021.

Total cost of tours for the nine months ended September 30, 2021 increased $10.3 million, or 16%, to $73.3 million, compared to $63.0 million for the nine months ended September 30, 2020.

At the Lindblad segment, cost of tours decreased $6.9 million, primarily related to cancelled, disrupted and rescheduled expeditions due to COVID-19.

At the Land Experiences segment, cost of tours increased $17.2 million, primarily due to operating additional trips and the inclusion of the results of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021.

Total cost of tours for the three months ended March 31, 2022 increased $49.7 million, to $57.9 million compared to $8.3 million for the three months ended March 31, 2021.

The Lindblad segment cost of tours increased by $40.0 million and the Land Experiences segment increased $9.7 million, primarily due to the ramp of expeditions and trips. The Land Experiences segment also includes a full quarter of results for Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021, and Classic Journeys which was acquired during the fourth quarter of 2021. 

General and Administrative

General and administrative expenses for the three months ended September 30, 2021 increased $7.9 million, or 86%, to $17.0 million compared to $9.1 million for the three months ended September 30, 2020.

At the Lindblad segment, general and administrative expenses increased $4.5 million from the prior year period primarily due to higher personnel costs associated with restarting operations, increased stock-based compensation expense and higher credit card commissions due to the strong booking environment.

At the Land Experiences segment, general and administrative expenses increased $3.4 million, primarily due to increased personnel costs related to operating additional trips, higher credit card commissions due to the strong booking environment and the inclusion of the results of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021. 

General and administrative expenses for the nine months ended September 30, 2021 increased $9.9 million, or 28%, to $46.1 million compared to $36.2 million for the nine months ended September 30, 2020.

At the Lindblad segment, general and administrative expenses increased $4.7 million from the prior year period primarily due higher personnel costs associated with restarting operations, increased stock-based compensation expense and increased credit card commissions due to a strong booking environment.

At the Land Experiences segment, general and administrative expenses increased $5.2 million, primarily due to increased personnel costs related to operating additional trips, higher credit card commissions due to a strong booking environment and the impact of the acquisitions of Off the Beaten Path and DuVine, which were completed during the first quarter of 2021.

General and administrative expenses for the three months ended March 31, 2022 increased $6.8 million, or 49%, to $20.6 million, compared to $13.8 million for the three months ended March 31, 2021.

At the Lindblad segment, general and administrative expenses increased $4.6 million from the prior year period primarily due to higher personnel costs associated with the ramp in operations and higher credit card commissions due to the strong booking environment and increased stock-based compensation expense. At the Land Experiences segment, general and administrative expenses increased $2.2 million, primarily due to increased personnel costs related to operating additional trips, higher credit card commissions due to the strong booking environment and the inclusion of a full quarter of the results of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021, and Classic Journeys which was acquired during the fourth quarter of 2021. 

Selling and Marketing

Selling and marketing expenses for the three months ended September 30, 2021 increased $8.1 million to $10.2 million, compared to $2.1 million for the three months ended September 30, 2020.

At the Lindblad segment, selling and marketing expenses increased $6.7 million primarily due to higher commissions and increased advertising spend.

At the Land Experiences segment, selling and marketing expenses increased $1.4 million, primarily due to increased marketing spend and higher commissions associated with the ramp up in operations and the inclusion of the results of Off the Beaten Path and DuVine which were acquired during the first quarter of 2021.

Selling and marketing expenses for the nine months ended September 30, 2021 decreased $0.7 million, or 4%, to $17.7 million, compared to $18.4 million for the nine months ended September 30, 2020.

At the Lindblad segment, selling and

marketing expenses decreased $3.2 million, primarily due to lower commission expenses due to the cancellation, disruption and rescheduling of expeditions due to COVID-19 partially offset by increased marketing spend related to the ramp up in operations.

At the Land Experiences segment, selling and marketing expenses increased $2.5 million, primarily due to increased marketing spend and higher commissions associated with the ramp up in operations and the inclusion of the results of Off the Beaten Path and DuVine which were acquired during the first quarter of 2021.

Selling and marketing expenses for the three months ended March 31, 2022 increased $9.8 million to $12.3 million, compared to $2.5 million for the three months ended March 31, 2021.

At the Lindblad segment, selling and marketing expenses increased $8.6 million primarily due to higher commissions related to the ramp in operations and increased advertising spend to drive future growth.

At the Land Experiences segment, selling and marketing expenses increased $1.2 million, primarily due to increased marketing spend associated with the ramp up in operations and the inclusion of the results of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021, and Classic Journeys which was acquired during the fourth quarter of 2021.

Depreciation and Amortization

Depreciation and amortization expenses for the three months ended September 30, 2021 increased $0.8 million, or 10%, to $9.3 million, compared to $8.5 million for the three months ended September 30, 2020, primarily due to information technology assets placed into service, accelerated depreciation for the National Geographic Islander and the amortization of acquired intangibles.

Depreciation and amortization expenses for the nine months ended September 30, 2021 increased $2.1 million, or 9%, to $25.8 million, compared to $23.7 million for the nine months ended September 30, 2020, primarily due to a full nine months of depreciation of the National Geographic Endurance  which was added to the fleet in March 2020.

Depreciation and amortization expenses for the three months ended March 31, 2022 increased $2.9 million, or 36%, to $11.2 million, compared to $8.2 million for the three months ended March 31, 2021, primarily due to depreciation for the National Geographic Resolution placed into service in September 2021, depreciation of technology assets placed into service to support our digital initiatives, accelerated depreciation for the National Geographic Islander , which will be replaced later in 2022, and the amortization of acquired intangibles.

Other Income (Expense)

Other expenses for the three months ended September 30, 2021, decreased $0.5 million to $3.1 million from $3.6 million for the three months ended September 30, 2020, primarily due to the following:

A $1.4 million loss in foreign currency translation in 2021, compared to a gain of $1.0 million in 2020 which was due primarily to $2.5 million loss on the maturity of a foreign currency hedge related to the final payment for the 

National Geographic Resolution  upon its delivery in September 2021.

A $1.5 million increase in interest expense, net to $6.1 million in 2021, primarily due to increased borrowings under our term loan facility as part of the Main Street Lending Program, and the additional drawdowns under our export credit agreements related to the National Geographic Resolution , as well as higher rates on our debt facilities. 

Recognition of $4.4 million in other income related to expenses covered under the CERTS grant received in September 2021.

Other expenses, for the nine months ended September 30, 2021, decreased $4.1 million to $14.2 million from $18.3 million for the nine months ended September 30, 2020, primarily due to the following:

A $1.2 million loss in foreign currency translation in 2021, compared to a $6.3 million loss in foreign currency translation in 2020 primarily due to lower losses on the maturity of foreign currency hedges related to installment payments for the National Geographic Resolution in 2021 as compared with 2020.

A $5.7 million increase in interest expense, net to $17.4 million in 2021, primarily due to increased borrowings under our term loan facility as part of the Main Street Lending Program, the higher rates on our debt facilities and the additional drawdowns under our export credit agreements related to our new builds, the National Geographic Endurance  and the National Geographic Resolution . 

Recognition of $4.4 million in other income related to expenses covered under the CERTS grant received in September 2021.

Other expenses for the three months ended March 31, 2022, increased $2.5 million to $8.1 million from $5.6 million for the three months ended March 31, 2021, primarily due to the following:

A $3.0 million increase in interest expense, net to $8.7 million in 2022, primarily due to additional drawdowns throughout 2021 under our export credit agreements related to the delivery of the National Geographic Resolution , as well as increased principal and higher rates on our debt facilities. 

A net gain of $0.6 million primarily due to recognition of $11.6 million in other income related to expenses covered under the CERTS grant received in 2021, partially offset by the write-off of $9.0 million of deferred financing costs and $1.9 million of fees and other expenses related to the repayment of our prior credit agreement, including the term facility, Main Street Loan and revolving credit facility.

Results of Operations –

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The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

For the three months ended September 30,

For the nine months ended September 30,

For the three months ended March 31,

(In thousands)

2 unchanged sentences

Total tour revenues

Operating (loss) income:

Operating loss:

Land Experiences

Total operating loss

Total operating (loss) income

Adjusted EBITDA:

1 unchanged sentence

Total adjusted EBITDA

Results of Operations –

Comparison of Three Months Ended March 31, 2022 to Three Months Ended March 31, 2021 at the Lindblad Segment

Tour Revenues

Tour revenues for the three months ended March 31, 2022 increased $49.8 million to $50.3 million, compared to $0.5 million for the three months ended March 31, 2021.

The increase was a result of the ramp in expeditions compared with cancelling, disrupting and rescheduling all expeditions due to COVID-19 in the first quarter of 2021. 

Operating Loss

Operating loss increased $6.3 million to $33.6 million for the three months ended March 31, 2022 compared to an operating loss of $27.3 million for the three months ended March 31, 2021 as the increase in tour revenues was more than offset primarily by higher cost of tours and personnel costs due to the ramp in operations, increased commissions related to the revenue and bookings growth and higher marketing costs to drive future growth.

Comparison of Three Months Ended March 31, 2022 to Three Months Ended March 31, 2021 at the Land Experiences Segment

Tour Revenues

Tour revenues for the three months ended March 31, 2022 increased $16.3 million to $17.6 million compared to $1.3 million for the three months ended March 31, 2021, primarily as a result of operating additional trips during the first quarter 2022 and the inclusion of a full quarter of results for Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021, and Classic Journeys which was acquired during the fourth quarter of 2021.

Operating Loss

Operating loss improved by $3.1 million to a loss of $0.7 million for the three months ended March 31, 2022, compared to an operating loss of $3.8 million for the three months ended March 31, 2021.

The lower operating loss was primarily a result of operating additional trips during the first quarter of 2022 and the inclusion of a full quarter of results for Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021, and Classic Journeys which was acquired during the fourth quarter of 2021.

Adjusted EBITDA –

The following table outlines the reconciliation of net loss to consolidated Adjusted EBITDA for the three months ended March 31, 2022 and 2021.

For the three months ended March 31,

(In thousands)

Interest expense, net

Income tax benefit

Depreciation and amortization

Gain on foreign currency

Stock-based compensation

Adjusted EBITDA

The following tables outline the reconciliation for each reportable segment from operating income to Adjusted EBITDA for the three months ended March 31, 2022 and 2021.

Lindblad Segment

The following table sets forth our Available Guest Nights, Guest Nights Sold, Occupancy, Maximum Guests, Number of Guests and Voyages for the three and nine months ended September 30, 2021 and 2020:

For the three months ended September 30,

For the nine months ended September 30,

For the three months ended March 31,

(In thousands)

Operating loss

Depreciation and amortization

Stock-based compensation

Adjusted EBITDA

Land Experiences Segment

For the three months ended March 31,

(In thousands)

Operating loss

Depreciation and amortization

Stock-based compensation

Adjusted EBITDA

Guest Metrics –

Lindblad Segment

The following table sets forth our Available Guest Nights, Guest Nights Sold, Occupancy, Maximum Guests, Number of Guests and Voyages for the three months ended March 31, 2022 and 2021:

For the three months ended March 31,

Available Guest Nights

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Number of Guests

The following table shows the calculations of Gross Yield and Net Yield for the three and nine months ended September 30, 2021 and 2020.

The following table shows the calculations of Gross and Net Yield for the three months ended March 31, 2022 and 2021.

Gross Yield is calculated by dividing Tour Revenues by Available Guest Nights and Net Yield is calculated by dividing Net Revenue by Available Guest Nights:

Calculation of Gross Yield per Available Guest Night and Net Yield per Available Guest Night

For the three months ended September 30,

For the nine months ended September 30,

Calculation of Gross and Net Yield per Available Guest Night

For the three months ended March 31,

(In thousands, except for Available Guest Nights, Gross and Net Yield per Available Guest Night)

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The following table reconciles operating income to our Net Yield Guest Metric for the Lindblad Segment:

For the three months ended

September 30,

For the nine months ended

September 30,

For the three months ended March 31,

(In thousands)

5 unchanged sentences

Other tour expenses

The following table shows the calculations of Gross Cruise Cost and Net Cruise Costs for the three and nine months ended September 30, 2021 and 2020:

Calculation of Gross Cruise Cost and Net Cruise Cost

For the three months ended September 30,

For the nine months ended September 30,

The following table shows the calculations of Gross and Net Cruise Costs for the three months ended March 31, 2022 and 2021:

Calculation of Gross and Net Cruise Cost

For the three months ended March 31,

(In thousands, except for Available Guest Nights, Gross and Net Cruise Cost per Avail.

8 unchanged sentences

Stock-based compensation

National Geographic fee amortization

Adjusted Net Cruise Cost Excluding Fuel

6 unchanged sentences

Adjusted Net Cruise Cost per Available Guest Night

Comparison of Three and Nine Months Ended September 30, 2021 to Three and Nine Months Ended September 30, 2020 at the Lindblad Segment

Tour Revenues

Tour revenues for the three months ended September 30, 2021 increased $33.1 million to $33.1 million.

The increase was a result of restarting expeditions during 2021 compared with cancelling, disrupting and rescheduling all expeditions due to COVID-19 in the third quarter of 2020.

Tour revenues for the nine months ended September 30, 2021 decreased $29.3 million to $40.3 million, compared to $69.5 million for the nine months ended September 30, 2020.

The decrease was primarily driven by additional cancelled, disrupted and rescheduled expeditions due to COVID-19 during 2021.

Operating Loss

Operating loss decreased $2.6 million to a loss of $22.3 million for the three months ended September 30, 2021 compared to an operating loss of $24.8 million for the three months ended September 30, 2020. The decrease was a result of restarting expeditions during 2021 compared with cancelling, disrupting and rescheduling all expeditions due to COVID-19 during the third quarter of 2020.

Operating loss increased $26.3 million to a loss of $80.6 million for the nine months ended September 30, 2021, compared to a loss of $54.3 million for the nine months ended September 30, 2020.

The increase was primarily driven by lower revenue from cancelled, disrupted and rescheduled voyages due to COVID-19.

Results of Operations –

Land Experiences Segment

Comparison of Three and Nine Months Ended September 30, 2021 to Three and Nine Months Ended September 30, 2020

Tour Revenues

Tour revenues for the three months ended September 30, 2021 increased $30.4 million to $31.4 million compared to $1.0 million for the three months ended September 30, 2020, primarily as a result of operating additional trips during the third quarter 2021 and the inclusion of the results of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021. 

Tour revenues for the nine months ended September 30, 2021 increased $28.8 million to $41.3 million compared to $12.5 million for the nine months ended September 30, 2020, due primarily to operating additional trips beginning the second quarter of 2021, the cancelled, disrupted and rescheduled expeditions due to COVID-19 during 2020, and by the inclusion of the operations of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021.

Operating Income (Loss)

Operating income increased $6.6 million to $4.6 million for the three months ended September 30, 2021, compared to an operating loss of $2.0 million for the three months ended September 30, 2020.

The higher operating income was primarily a result of operating additional trips during the third quarter of 2021.

The third quarter of 2021 also included the results of Off the Beaten Path and DuVine which were acquired during the first quarter of 2021.

Operating loss for the nine months ended September 30, 2021 decreased $4.3 million to a loss of $0.7 million compared to a loss of $5.0 million for the nine months ended September 30, 2020.

The decrease was primarily a result of operating additional trips and from the inclusion of the results of Off the Beaten Path and DuVine which were acquired during the first quarter of 2021.

Adjusted EBITDA –

The following table outlines the reconciliation of net loss to consolidated Adjusted EBITDA for the three and nine months ended September 30, 2021 and 2020.

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

Interest expense, net

Income tax expense (benefit)

Depreciation and amortization

Loss (gain) on foreign currency

Other (income) expense

Stock-based compensation

National Geographic fee amortization

Adjusted EBITDA

The following tables outline the reconciliation for each reportable segment from operating income to Adjusted EBITDA for the three and nine months ended September 30, 2021 and 2020.

Lindblad Segment

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

Operating loss

Depreciation and amortization

Stock-based compensation

National Geographic fee amortization

Adjusted EBITDA

Land Experiences Segment

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

Operating income (loss)

Depreciation and amortization

Stock-based compensation

Adjusted EBITDA

Liquidity and Capital Resources

The COVID-19 pandemic has had a material negative impact on our operations and financial results and while we have substantially resumed operations, given the dynamic nature of this situation, we cannot reasonably estimate the impacts of the COVID-19 pandemic on our financial condition, results of operations, cash flows, plans and growth for the foreseeable future.

It is unknown when travel restrictions and various border closures will be completely lifted and what the demand for expedition travel will be once these restrictions are no longer in place.

During August 2021, we received a $21.0 million grant under the CERTS Act, which provided grants to eligible motorcoach, school bus, passenger vessel, and pilotage companies, see the notes to the condensed consolidated financial statements for more information. 

As of September 30, 2021, we had approximately $561.8 million in long-term debt obligations, including the current portion of long-term debt.

We believe that our cash on hand and expected future operating cash inflows will be sufficient to fund operations, debt service requirements and necessary capital expenditures, assuming that our operations continue to ramp up as we currently expect. 

As we continue to ramp up operations, our monthly cash usage will increase as we incur costs in operating expeditions, preparing additional ships for return to service, and spending to market and advertise upcoming expeditions and trips.

We also anticipate a significant increase in guest payments as we receive final payments for upcoming expeditions as well as deposits for new reservations for future travel. However, there can be no assurance that cash flows from operations will be available to fund future obligations or that we will not experience delays or cancellations with respect to the resumption of our operations.

Sources and Uses of Cash for the Nine Months Ended September 30, 2021 and 2020

Net cash provided by operating activities was $21.5 million in 2021 compared to net cash used in operating activities of $71.7 million in 2020. The $93.3 million increase is primarily due to cash received from guests for final payments and deposits on upcoming expeditions and trips, partially offset by costs of operations.

The current period also included $21.0 million received for the CERTS grant.

Net cash used in investing activities was $96.3 million in 2021 compared to $152.8 million in 2020.

The $56.5 million decrease was primarily due to payments for the completion of the National Geographic Endurance  during the first quarter 2020, partially offset during 2021 by costs associated with building the 

National Geographic Resolution , the purchase of the Crystal Esprit and the net cash used for the acquisitions of Off the Beaten Path and DuVine. 

Net cash provided by financing activities was $55.3 million in 2021 compared to $261.4 million in 2020.

The $206.2 million decrease is primarily due to the borrowing $107.7 million under the senior secured credit agreement for the final contracted payment of the National Geographic Endurance , a $45.0 million drawdown of our revolving credit facility, the $85.0 million generated from the issuance of Preferred Stock and the borrowing of $30.6 million under the senior secured credit agreement for an installment payment on the National Geographic Resolution  during 2020, partially offset by the borrowing of $61.7 million under the senior secured credit agreement for remaining payments on the National Geographic Resolution .

The COVID-19 pandemic has had a material negative impact on our operations and financial results and, while we have substantially resumed operations, given the dynamic nature of this situation, we cannot reasonably estimate the impacts of the COVID-19 pandemic on our financial condition, results of operations, cash flows, plans and growth for the foreseeable future. 

As of March 31, 2022, we had approximately $584.1 million in long-term debt obligations, including the current portion of long-term debt.

As we continue to ramp up operations, our monthly cash usage will increase as we incur costs in operating additional expeditions and trips, prepare additional ships for return to service, and spending to market and advertise upcoming expeditions and trips.

We also anticipate a significant increase in guest payments as we receive final payments for upcoming expeditions and trips, as well as deposits for new reservations for future travel. However, there can be no assurance that cash flows from operations will be available to fund future obligations or that we will not experience delays or cancellations with respect to the resumption of our operations.

Sources and Uses of Cash for the three Months Ended March 31, 2022 and 2021

Net cash provided by operating activities was $5.2 million in 2022 compared to net cash used in operating activities of $6.9 million in 2021. The $12.1 million increase is primarily due to the ramp in operations and guest final payments and deposits for upcoming expeditions and trips, partially offset by the costs of operations.

Net cash used in investing activities was $7.5 million in 2022 compared to $10.7 million in 2021 as increased capital expenditures primarily from routine vessel maintenance across the fleet and renovations to the National Geographic Islander II ahead of its launch later this year was more than offset by the net cash used in 2021 for the acquisitions of Off the Beaten Path and DuVine. 

Net cash provided by financing activities was $14.5 million in 2022 compared to net cash used in financing activities in 2021 of $0.5 million primarily due to the issuance of new senior secured notes which were used to repay the prior credit agreement, including the term facility, including the Main Street Loan and the revolving facility.

Funding Sources

Debt Facilities  

Credit Facility

Our Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”), provides a $200.0 million senior secured first lien term loan facility (the “Term Facility”), maturing March 2025, and a $45.0 million senior secured revolving credit facility (the “Revolving Facility”), which includes a $5.0 million letter of credit sub-facility.

In March 2020, we drew $45.0 million on our Revolving Facility, which matures in March 2023.

The Amended Credit Agreement was amended in August 2020 to waive the application of the total net leverage ratio covenant through June 2021. In connection with the amendment, the interest rate of the Term Facility was increased 125 basis points, to be paid-in-kind at maturity, a LIBOR minimum of 0.75% was added to the Term Facility and certain covenants were amended to be more restrictive.

In December 2020, we amended the Amended Credit Agreement to provide for the borrowing of a new tranche of incremental term loans under the Amended Credit Agreement in an amount of $85.0 million, maturing December 2025, made under the Main Street Expanded Loan Facility (the “Main Street Loan”).

Interest on the Main Street Loan shall be paid-in-kind for the first year and the principal shall amortize at a rate of 15% in each of the third and fourth years, with the remaining amounts to be paid at maturity.

During April 2021, we further amended our Amended Credit Agreement that, among other things, extends the waiver of the total net leverage ratio covenant through March 31, 2022, annualized EBITDA used in the covenant calculation through December 31, 2022 and increases the interest rate spreads of the Term Facility, excluding the Main Street Loan, and the Revolving Facility by 50 basis points.

Certain other covenants under the Amended Credit Agreement continue to be more restrictive during the extended covenant waiver period.

The Term Facility (excluding the Main Street Loan), as amended, as of September 30, 2021, bears interest at an adjusted Intercontinental Exchange (“ICE”) Benchmark administration LIBOR, with a minimum of 0.75%, plus a spread of 5.25%, for an aggregated rate of 6.00% as of September 30, 2021, and the Revolving Facility bears interest at an adjusted ICE Benchmark administration LIBOR plus a spread of 3.50%, for an aggregated rate of 3.58% as of September 30, 2021.

The Main Street Loan bears interest at a rate per annum of an adjusted ICE Benchmark administration LIBOR for an interest period of 3-months plus 3.00%, for an aggregated rate of 3.13% as of September 30, 2021.

In 2018, we entered into interest rate cap agreements to hedge our exposure to interest rate movements and manage our interest rate expense related to the Term Facility.

On February 4, 2022, we issued $360.0 million aggregate principal amount of 6.75% senior secured notes due 2027 (the “Notes”) in a private offering.

The Notes will mature on February 15, 2027, subject to earlier repurchase or redemption.

We used the net proceeds from the offering to prepay in full all outstanding borrowings under our prior credit agreement, including the term facility, Main Street Loan, and revolving credit facility, to pay any related premiums and to terminate in full our prior credit agreement and the commitments thereunder. The Notes are senior secured obligations and are guaranteed on a senior secured basis by us and certain of our subsidiaries (collectively, the “Guarantors”) and secured by first-priority 

pari passu  liens, subject to permitted liens and certain exceptions, on substantially all of our and the Guarantors’ assets.

We may redeem the Notes at set redemption prices and premiums,

plus accrued and unpaid interest, if any. 

The Notes contain covenants that, among other things, restrict our ability and the ability of our restricted subsidiaries to incur certain additional indebtedness and issue preferred stock and make certain dividend payments, distributions, investments and other restricted payments.

These covenants are subject to a number of important exceptions and qualifications set forth in the Notes. 

New Revolving Credit Facility 

On February 4, 2022, we entered into a new senior secured revolving credit facility (the “New Revolving Credit Facility”), which provides for an aggregate principal amount of commitments of $45.0 million, maturing February 2027, including a letter of credit sub-facility in an aggregate principal amount of up to $5.0 million.

The obligations under the New Revolving Credit Facility are guaranteed by us and the Guarantors and are secured by first-priority pari passu 

liens, subject to permitted liens and certain exceptions, on substantially all the assets of the Company and the Guarantors.

Borrowings under the New Revolving Credit Facility, if any, will bear interest at a rate per annum equal to, at our option, an adjusted SOFR rate plus a spread or a base rate plus a spread.

The New Revolving Credit Facility contains customary affirmative and negative covenants, as well as financial covenants and event of default provisions.

Senior Secured Credit Agreements

Our first senior secured credit agreement (the “First Export Credit Agreement”) made available a loan in an aggregate principal amount not to exceed $107.7 million for the purpose of providing financing for up to 80% of the purchase price of our new polar ice class vessel, the National Geographic Endurance .

During March 2020, we borrowed the $107.7 million under the First Export Credit Agreement for the final contracted payment of the National Geographic Endurance .

Our second senior secured credit agreement (the “Second Export Credit Agreement”) made available to us a loan in an aggregate principal amount not to exceed $122.8 million for the purpose of providing pre- and post-delivery financing for up to 80% of the purchase price of the National Geographic Resolution , which was delivered during September 2021. As of September 30, 2021, we borrowed the $122.8 million available under the Second Export Credit Agreement, drawing approximately $30.5 million in 2019, $30.6 million in 2020 and $61.7 million in 2021. 

In June 2020, we amended our export credit agreements to defer scheduled amortization payments from June 2020 to March 2021 and suspend the total net leverage ratio covenant through June 2021.

During June 2021, we further amended our export credit agreements to, among other things, extend the deferral of scheduled amortization payments of the First Export Credit Agreement through December 2021 in the aggregate amount of $15.7 million, extend the waiver of the total leverage ratio covenant

through March 31, 2022, increase interest rate spreads of the export credit agreements by 50 basis points and annualize EBITDA used in the covenant calculation through December 31, 2022.

Our first senior secured credit agreement (the “First Export Credit Agreement”) made available a loan for the purpose of providing financing for up to 80% of the purchase price of our new polar ice class vessel, the National Geographic Endurance .

During March 2020, we borrowed $107.7 million under the First Export Credit Agreement for the final contracted payment of the National Geographic Endurance .

Our second senior secured credit agreement (the “Second Export Credit Agreement”) made available a loan for the purpose of providing pre- and post-delivery financing for up to 80% of the purchase price of the National Geographic Resolution.

We borrowed $122.8 million under the Second Export Credit Agreement, drawing approximately $30.5 million in 2019, $30.6 million in 2020 and $61.7 million in 2021, with the ship delivered in September 2021. 

During June 2021, we amended our export credit agreements to, among other things, extend the deferral of scheduled amortization payments of the First Export Credit Agreement through December 2021 in the aggregate amount of $15.7 million, extend the waiver of the total leverage ratio covenant through March 31, 2022, increase interest rate spreads of the export credit agreements by 50 basis points and annualize EBITDA used in the covenant calculations through December 31, 2022.

The deferred principal payments will amortize quarterly over three years starting March 2022.

Certain other covenants continue to be more restrictive during the extended covenant waiver period.

We were in compliance with our covenants in effect as of September 30, 2021.

The First Export Credit Agreement, as amended, bears interest at a floating interest rate equal to three-month LIBOR plus a spread of 3.50% per annum, or 3.62% over the borrowing period covering September 30, 2021.

The Second Export Credit Agreement, as amended, bears a variable interest rate equal to three-month LIBOR plus a spread of 3.50% per annum, or 3.63% over the borrowing period covering September 30, 2021.

We were in compliance with our covenants in effect as of March 31, 2022.

The First Export Credit Agreement, as amended, bears interest at a variable interest rate equal to three-month LIBOR plus a spread of 3.50% per annum, or 4.33% over the borrowing period covering March 31, 2022.

The Second Export Credit Agreement, as amended, bears a variable interest rate equal to three-month LIBOR plus a spread of 3.50% per annum, or 4.43% over the borrowing period covering March 31, 2022.

Notes Payable

In connection with the Natural Habitat acquisition in May 2016, Natural Habitat issued a $2.5 million unsecured promissory note, amended in May 2020, to Benjamin L.

Bressler, the founder of Natural Habitat, with an outstanding principal amount of $0.8 million as of March 31, 2022. The promissory note accrues interest at a rate of 1.44% annually, with interest payable every six months and the remaining principal payment due on December 22, 2022. 

Our Off the Beaten Path subsidiary has a loan maturing June 2023 for the purchase of guest transportation vehicles.

The loan’s original principal was $0.3 million, is collateralized by the vehicles and bears an annual interest rate of 4.77%.

Our Off the Beaten Path subsidiary has a $0.8 million loan under the Main Street Expanded Loan Facility, originated on December 11, 2020.

For the first 12 months, interest is not payable and accrued to the principal balance, thereafter, monthly interest payments are required.

The outstanding balance will amortize at a rate of 15% on both December 2023 and December 2024, with the remaining balance due December 2025.

The loan bears a variable interest rate equal to one-month LIBOR plus a spread of 3.00%, or 3.45% as of March 31, 2022.

This loan may be voluntarily prepaid at any time and from time to time, without premium or penalty, other than customary “breakage costs”

and fees for LIBOR-based loans.

Our DuVine subsidiary has a EUR 0.1 million State Assistance Loan related to the financial consequences of the COVID-19 pandemic, for the purpose of employment preservation.

This loan matures August 2025, with monthly payments, and bears an annual interest rate of 0.53%. 

Preferred Stock

In August 2020, we issued and sold 85,000 shares of Series A Redeemable Convertible Preferred Stock, par value of $0.0001, (“Preferred Stock”) for $1,000 per share for gross proceeds of $85.0 million.

As of March 31, 2022, 80,000 shares of Preferred Stock were outstanding.

The Preferred Stock has senior and preferential ranking to our common stock.

2 unchanged sentences

The Preferred Stock is convertible at any time, at the holder’s election, into a number of shares of our common stock equal to the quotient obtained by dividing the then-current accrued value by the conversion price of $9.50.

At any time after the third anniversary of the issuance, we may, at our option, convert all, but not less than all, of the Preferred Stock into common stock if the closing price of shares of common stock is at least 150% of the conversion price for 20 out of 30 consecutive trading days.

The number of shares of common stock received in such conversion shall be equal to the quotient obtained by dividing the then-current accrued value by the conversion price.

At the six-year anniversary of the closing date, each investor has the right to request that we repurchase their Preferred Stock and any Preferred Stock not requested to be repurchased shall be converted into our common shares equal to the quotient obtained by dividing the then-current accrued value by the conversion price.

3 unchanged sentences

These advance passenger receipts remain a current liability until the expedition date and the cash generated from these advance receipts is used interchangeably with cash on hand from other cash from operations.

The cash received as advanced receipts can be used to fund operating expenses for the applicable future expeditions or otherwise, pay down credit facilities, make long-term investments or any other use of cash.

Traditionally, we run a working capital deficit due primarily to a large balance of unearned passenger revenues and as of September 30, 2021 we had a working capital deficit of $39.5 million. As of December 31, 2020 we had positive working capital of $73.4 million as a result of lower unearned passenger revenues while we were not operating and higher cash balances driven by the debt borrowings and a preferred share offering during the year.

As of September 30, 2021 and December 31, 2020, we had $155.6 million and $187.5 million, respectively, in cash and cash equivalents, excluding restricted cash.

Our Board of Directors approved a stock and warrant repurchase plan (“Repurchase Plan”) in November 2015 and increased the repurchase plan to $35.0 million in November 2016.

The Repurchase Plan authorizes us to purchase from time to time our outstanding common stock and our previously outstanding warrants.

Any shares and warrants purchased will be retired.

The Repurchase Plan has no time deadline and will continue until otherwise modified or terminated at the sole discretion of our Board of Directors.

These repurchases exclude shares repurchased to settle statutory employee tax withholding related to the exercise of stock options and vesting of stock awards.

During March 2020, the Repurchase Plan was suspended due to the uncertain impact of the COVID-19 pandemic and our borrowings through the Main Street Expanded Loan Facility program places restrictions on stock repurchases.

We have cumulatively repurchased 875,218 shares of common stock for $8.3 million and 6,011,926 warrants for $14.7 million since plan inception.

All repurchases were made using cash resources.

The balance for the Repurchase Plan was $12.0 million as of September 30, 2021. 

The additional borrowings under the Second Export Credit Agreement and amendments of the First Export Credit Agreement created material changes in our future obligations from those reported in our 2020 Annual Report.

The changed or amended obligations as of September 30, 2021 are as follows:

Payments due by period

(In thousands)

Financing Activities:

Export Credit Agreement (a)

Second Export Credit Agreement (b)

The June 2021 amendment to the First Export Credit Agreement deferred principal amortization payments through December 31, 2021, as described above.

The balance and future obligations reflect the April 2021 and September 2021 additional borrowings of $15.5 million and $46.2 million, respectively, under the Second Export Credit Agreement for contracted installment payment on the National Geographic Resolution .

The cash received as advanced receipts can be used to fund operating expenses for the applicable future expeditions or otherwise, pay down debt, make long-term investments or any other use of cash.

Traditionally we run a working capital deficit due primarily to a large balance of unearned passenger revenues.

As of March 31, 2022, we had a working capital deficit of $89.1 million, and as of December 31, 2021, we had a working capital deficit of $79.1 million. 

Critical Accounting Policies

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements