What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-02 compared with 2022-05-05 · 397 added, 198 removed, 886 unchanged (40% of the section changed)

4 unchanged sentences

(In thousands, except share and per share data)

As of March 31, 2022

As of December 31, 2021

June 30, 2022

December 31, 2021

(unaudited)  

50 unchanged sentences

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

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

62,000 and 80,000 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

67,052  

6 unchanged sentences

STOCKHOLDERS’

(DEFICIT) EQUITY

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

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

62,000 and 80,000 Series A shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

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

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

53,064,077 and 50,800,786 issued, 53,018,837 and 50,755,546 outstanding as of June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

14 unchanged sentences

(In thousands, except share and per share data)

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

Tour revenues

$ 90,910  

$ 15,266  

$ 158,756  

$ 17,047  

Operating expenses:

Cost of tours

62,499  

19,391  

120,447  

27,670  

General and administrative

23,710  

15,288  

44,347  

29,100  

Selling and marketing

12,839  

25,168  

Depreciation and amortization

11,176  

22,354  

16,462  

Total operating expenses

110,224  

47,854  

212,316  

80,699  

Operating loss

( 19,314 )  

( 32,588 )  

( 53,560 )  

Other (expense) income:

Interest expense, net

Gain on foreign currency

( 9,416 )  

( 5,705 )  

( 18,130 )  

(Loss) gain on foreign currency

( 676 )  

( 546 )  

Other (expense) income

( 116 )  

Total other expense

( 10,208 )  

( 5,504 )  

( 18,259 )  

Loss before income taxes

( 29,522 )  

( 38,092 )  

( 71,819 )  

Income tax benefit

Net loss attributable to noncontrolling interest

( 964 )  

( 2,357 )  

( 1,113 )  

( 28,558 )  

( 35,735 )  

( 70,706 )  

Net income (loss) attributable to noncontrolling interest

( 437 )  

( 229 )  

Net loss attributable to Lindblad Expeditions Holdings, Inc.

( 28,756 )  

( 35,298 )  

( 70,477 )  

Series A redeemable convertible preferred stock dividend

Net loss available to stockholders

$ ( 30,039 )  

$ ( 36,616 )  

$ ( 73,058 )  

Weighted average shares outstanding

51,195,280  

50,064,152  

50,976,203  

49,964,693  

51,195,280  

50,064,152  

50,976,203  

49,964,693  

Undistributed loss per share available to stockholders:

$ ( 0.59 )  

$ ( 0.71 )  

$ ( 1.43 )  

$ ( 0.59 )  

$ ( 0.71 )  

$ ( 1.43 )  

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

3 unchanged sentences

(In thousands)

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

Other comprehensive income:

Cash flow hedges:

Net unrealized loss

Net unrealized income

Reclassification adjustment, net of tax

1 unchanged sentence

Total comprehensive loss

comprehensive loss attributive to non-controlling interest

comprehensive income (loss) attributive to non-controlling interest

Comprehensive loss attributable to stockholders

3 unchanged sentences

Condensed Consolidated Statements of Stockholders ’

 (Deficit) Equity

 Deficit

(In thousands, except share data)

2 unchanged sentences

Total Stockholders'

(Deficit) Equity

Balance as of March 31, 2022

Stock-based compensation

Net activity related to equity compensation plans

Issuance of stock for conversion of preferred stock

Redeemable noncontrolling interest

Series A preferred stock dividend

Net loss attributable to Lindblad Expeditions Holdings, Inc.

Balance as of June 30, 2022

Additional Paid-In

Accumulated Other Comprehensive

Total Stockholders'

Balance as of December 31, 2021

Stock-based compensation

Issuance of stock for equity compensation plans, net

Net activity related to equity compensation plans

Issuance of stock for conversion of preferred stock

Other comprehensive income, net

2 unchanged sentences

Net loss attributable to Lindblad Expeditions Holdings, Inc.

Balance as of June 30, 2022

LINDBLAD EXPEDITIONS HOLDINGS, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders ’

 (Deficit) Equity (continued)

(In thousands, except share data)

Additional Paid-In

Accumulated Other

Total Stockholders'

Comprehensive Loss

Equity (Deficit)

Balance as of March 31, 2021

Stock-based compensation

Net activity related to equity compensation plans

Other comprehensive income, net

Series A preferred shares dividend

Net loss attributable to Lindblad Expeditions Holdings, Inc.

Balance as of June 30, 2021

Additional Paid-In

Accumulated Other Comprehensive

Accumulated Other

Total Stockholders'

Comprehensive Loss

Equity (Deficit)

Balance as of December 31, 2020

Stock-based compensation

Issuance of stock for equity compensation plans, net

Net activity related to equity compensation plans

Issuance of stock for acquisition

2 unchanged sentences

Net loss attributable to Lindblad Expeditions Holdings, Inc.

Balance as of March 31, 2021

Balance as of June 30, 2021

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

3 unchanged sentences

(In thousands)

For the three months ended March 31,

For the six months ended June 30,

Cash Flows From Operating Activities

3 unchanged sentences

22,354  

16,462  

Amortization of deferred financing costs and other, net

Amortization of right-to-use lease assets

( 20 )  

Stock-based compensation

2 unchanged sentences

Change in fair value of contingent acquisition consideration

Gain on foreign currency

( 130 )  

Loss (gain) on foreign currency

Write-off of unamortized issuance costs related to debt refinancing

1 unchanged sentence

Marine operating supplies and inventories

( 1,676 )  

Prepaid expenses and other current assets

4 unchanged sentences

Other long-term assets

( 261 )  

Other long-term liabilities

1 unchanged sentence

11,971  

Net cash provided by (used in) operating activities

Net cash provided by operating activities

18,640  

21,838  

Cash Flows From Investing Activities

7 unchanged sentences

360,000  

15,484  

Repayments of long-term debt

3 unchanged sentences

Repurchase under stock-based compensation plans and related tax impacts

Net cash provided by (used in) financing activities

( 753 )  

Net cash provided by financing activities

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

12,169  

Cash, cash equivalents and restricted cash at beginning of period

12 unchanged sentences

$ 2,622  

Shares issued for acquisition

Value of shares issued for acquisition

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

22 unchanged sentences

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.

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.

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.

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Operating results for the periods presented are not necessarily indicative of the results of operations to be expected for the full year due to seasonality and other factors.

Certain information and footnote disclosures normally included in the consolidated financial statements in accordance with U.S.

GAAP have been omitted in accordance with the rules and regulations of the SEC for interim reporting.

Certain information and footnote disclosures normally included in the consolidated financial statements in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC for interim reporting.

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

2 unchanged sentences

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 continued to ramp its operations during the second quarter of 2022, providing immersive expeditions across all ten of its owned vessels including trips to Alaska, the Arctic, the Galápagos Islands, Iceland, Norway and the Baltic and North Seas.

Due to the spread of the COVID- 19 virus and the effects of travel restrictions around the world, the Company 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 the second half of 2022 and in 2023.

Where travel restrictions remain, which also includes a limited number of itineraries impacted by the Russia-Ukraine conflict, the Company is adjusting itineraries where possible, and working 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.

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Balance Sheet and Liquidity

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.

As of June 30, 2022, the Company had $ 126.9 million in unrestricted cash and $ 48.8  million in restricted cash primarily related to deposits on future travel originating from U.S.

ports and credit card reserves.

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.

As of June 30, 2022, the Company had a total debt position of $ 578.2  million and was in compliance with all of its debt covenants in effect.

The Company estimates that it will be in compliance with all applicable covenants over the next 12 months. 

During May 2022, the Company further amended its senior secured export credit agreements to extend the waiver of its net leverage coverage ratio from March 2022 through December 31, 2022.

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.

9 unchanged sentences

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 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 six months ended June 30, 2022 and 2021, the Company incurred net losses from operations, therefore basic and diluted net loss per share are the same for each period.

For the three and six months ended June 30, 2022, 

approximately 0.8  million restricted shares, 1.4  million shares issuable upon exercise of options and 7.3  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 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,

three and six months ended June 30, 2021, 

0.8  million restricted shares, 1.5  million shares issuable upon exercise of options and 9.4 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 and six months ended June 30, 2022 and 2021, the Company calculated earnings (loss) per share as follows:

For the three months ended June 30,

For the six months ended June 30,

(In thousands, except share and per share data)

Net loss attributable to Lindblad Expeditions Holdings, Inc.

$ ( 28,756 )  

$ ( 35,298 )  

$ ( 70,477 )  

Series A redeemable convertible preferred stock dividend

Undistributed loss available to stockholders

$ ( 30,039 )  

$ ( 36,616 )  

$ ( 73,058 )  

Weighted average shares outstanding:

Total weighted average shares outstanding, basic

51,195,280  

50,064,152  

50,976,203  

49,964,693  

Total weighted average shares outstanding, diluted

51,195,280  

50,064,152  

50,976,203  

49,964,693  

Undistributed loss per share available to stockholders:

$ ( 0.59 )  

$ ( 0.71 )  

$ ( 1.43 )  

$ ( 0.59 )  

$ ( 0.71 )  

$ ( 1.43 )  

NOTE 3 —

10 unchanged sentences

(In thousands)

(unaudited)  

Balance as of December 31, 2021

$ 147,783  

Recognized in tour revenues during the period

Additional contract liabilities in period

64,017  

Balance as of March 31, 2022

$ 145,688  

Balance as of June 30, 2022

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

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

Guest ticket revenue:

6 unchanged sentences

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

For the three months ended March 31,

For the six months ended June 30,

(In thousands)

9 unchanged sentences

Restricted cash consists of the following:

As of March 31, 2022

As of June 30, 2022

As of December 31, 2021

9 unchanged sentences

$ 21,940  

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.

As of June 30, 2022 and December 31, 2021, prepaid tour expenses of $ 25.8  million and $ 10.3 million, respectively, is the only item of prepaid expenses and other current assets in excess of 5% of current assets. 

As of June 30, 2022 and December 31, 2021, accounts payable of $ 17.8  million and $ 9.7 million, respectively, is the only item 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 March 31, 2022. 

The Company had 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, as permitted expenses for the grant were incurred the corresponding amounts were recognized in other income on the income statement.

During the three months ended March 31, 2022, the Company recognized the remaining $ 11.6 million of the CERTS grant in other income for permitted payroll costs and ship operating expenses, and as of June 30, 2022, has no further liability recorded for the grant.

The Company’s loan receivable is recorded at amortized cost within other current  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 June 30, 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  months ended March 31, 2022.

six months ended June 30, 2022.

The following is a rollforward of the loan receivable balance:

5 unchanged sentences

Amortization of deferred costs

Balance as of March 31, 2022

Balance as of June 30, 2022

$ 4,017  

1 unchanged sentence

LONG-TERM DEBT

As of March 31, 2022

As of June 30, 2022

As of December 31, 2021

46 unchanged sentences

$ 518,658  

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.

For the three and six months ended June 30, 2022, deferred financing costs charged to interest expense was $ 0.7  million and $ 1.4  million, respectively.

For the three and six months ended June 30, 2021, deferred financing costs charged to interest expense was $ 0.8  million and $ 1.5  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.

6 unchanged sentences

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.

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 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. 

5 unchanged sentences

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

Senior Secured Credit Agreements

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 June 2021, the Company amended its First Export Credit Agreement to, among other things, waive the net leverage coverage ratio through March 2022 and annualize EBITDA used in its covenant calculation through December 31, 2022.

During May 2022, the Company further amended its First Export Credit Agreement to extend the waiver of its net leverage coverage ratio from March 2022 through December 31, 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 5.22 % over the borrowing period covering June 30, 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.

In June 2021, the Company amended its Second Export Credit Agreement to, among other things, waive the net leverage coverage ratio through March 2022 and annualize EBITDA used in its covenant calculation through December 31, 2022.

During May 2022, the Company further amended its Second Export Credit Agreement to extend the waiver of its net leverage coverage ratio from March 2022 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, for an aggregated rate of 4.43 % 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 margin of 3.50 % per annum, for an aggregated rate of 5.56 % over the borrowing period covering June 30, 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. 

Bressler, the founder of Natural Habitat, with an outstanding principal amount of $ 0.8 million as of June 30, 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. 

2 unchanged sentences

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.

For the first 12 months, interest was 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.

The loan bears a variable interest rate equal to one -month LIBOR plus a spread of 3.00 %, or 4.79 % as of June 30, 2022.

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

3 unchanged sentences

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.

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

The Company was in compliance with its covenants in effect as of June 30, 2022 and estimates that it will be in compliance for the next 12 months.

NOTE 6 —

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Currency Risk .

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 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.

6 unchanged sentences

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:

The Company held the following derivative instruments with absolute notional values as of June 30, 2022:

(In thousands)

3 unchanged sentences

Foreign exchange contracts

13,872  

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

As of March 31, 2022

As of June 30, 2022

As of December 31, 2021

12 unchanged sentences

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,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

(unaudited)  

Derivative instruments designated as cash flow hedging instruments:

Interest rate cap (a)

$ ( 86 )  

Foreign exchange forward (b)

( 79 )  

Derivative instruments not designated as cash flow hedging instruments:

3 unchanged sentences

( 676 )  

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 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.

( 546 )  

$ ( 522 )  

$ ( 165 )  

$ ( 843 )  

For the three months ended June 30, 2022 recognized as income in interest expense, net.

For the six months ended June 30, 2022, $ 0.3  million was recognized as income in interest expense, net and $ 0.6  million was reclassified from other comprehensive income (loss) to interest expense, net.

For the 

three  and 

six  months ended 

June 30, 2021, 

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

For the 

three  and 

six  months ended 

June 30, 2021, 

$ 0.1  million was recognized as a loss on foreign currency in the condensed consolidated statements of income, and a $ 0.0  million and a $ 0.4  million gain, respectively, 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 and 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. 

As of June 30, 2022, the contingent liability had a value of $ 0.3 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 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.

The Company estimates the approximate fair value of its long-term debt to be $ 483.6  million as of June 30, 2022, based on the terms of the agreements and comparable market data as of June 30, 2022.

As of June 30, 2022 and December 31, 2021, the Company had no other significant liabilities that were measured at fair value on a recurring basis.

NOTE 7 —

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The Repurchase Plan has no time deadline and will continue until otherwise modified or terminated at the sole discretion of the Company’s 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.

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.

These repurchases exclude shares repurchased to settle statutory employee tax withholding related to the exercise of stock options and vesting of stock awards. 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 June 30, 2022.

The Repurchase Plan is suspended due to restrictions related to the Main Street Expanded Loan Facility program. 

Preferred 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.

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. 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. At any time after the 

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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.

The Preferred Stock deferred issuance costs were approximately $ 2.1  million as of June 30, 2022, recorded as reduction to preferred stock on balance sheet.

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.

During the six months ended June 30, 2022, 18,000 shares of Preferred Stock and related accumulated dividends were converted by the holder into 2,109,561  shares of the Company’s common stock.

The Company recorded accrued dividends for Preferred Stock of $ 1.3  million and $ 2.6  million for the three and six months ended June 30, 2022, respectively, and $1.3 million and $ 2.6 million for the three and six months ended June 30, 2021, respectively.

As of June 30, 2022, the 62,000 shares of Preferred Stock outstanding and accumulated dividends could be converted at the option of the holders into approximately 7.3 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 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.

As of June 30, 2022, approximately 3.7  million shares were available to be granted under the Plan.

As of June 30, 2022 and December 31, 2021, options to purchase an aggregate of 1.4  million and 1.5 million shares of the Company’s common stock, respectively, with a weighted average exercise price of $ 15.10  and $ 10.30 , respectively, were outstanding.

As of June 30, 2022, 388,000  options were exercisable.

The Company recorded stock-based compensation expense of $ 1.8 million and $ 3.7 million, during the three and six months ended June 30, 2022, respectively, and $ 1.1  million and $ 2.7  million during the three and six months ended June 30, 2021, respectively.

Long-Term Incentive Compensation

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 .

During the six months ended June 30, 2022, the Company granted 247,470  restricted stock units ("RSUs") with a weighted average grant price of $ 15.02 .

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 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 .

During the six months ended June 30, 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.

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Bressler's amended employment agreement, exceeds $ 25.0 million, effective as of December 31, 2023, 

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

NOTE 9 —

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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.

As of June 30, 2022 

and December 31, 2021, the Company had no unrecognized tax benefits recorded. The Company's effective tax rate for the three and six months ended June 30, 2022 was a benefit of 3.3 % and 1.5 %, respectively, versus a benefit of 6.2 % and 6.9 % for the three and six months ended June 30, 2021, respectively, primarily due to the expected results for 2022  compared to the 2021 results due to the impact of the COVID- 19 pandemic on the Company's operations.

NOTE 11 —

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

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

(unaudited)  

Beginning balance

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$ 10,473  

Net loss attributable to noncontrolling interest

$ 10,626  

Acquired businesses' noncontrolling interest

$ 7,494  

Net income (loss) attributable to noncontrolling interest

( 437 )  

( 229 )  

Redemption value adjustment of put option

Acquired businesses' noncontrolling interest

Ending balance

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$ 10,036  

$ 19,595  

$ 10,036  

Royalty Agreement –

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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 expense for the three and six months ended June 30, 2022 was $ 1.7 million and $ 2.9  million, respectively, and was $ 0.1  million for both the three and six months ended June 30, 2021.

The royalty balance payable to National Geographic as of June 30, 2022 and December 31, 2021 was $ 2.1  million 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 $ 0.0 million for the three months ended March 31, 2022 

and 2021, respectively.

This royalty fee expense was $ 0.2  million and $ 0.4  million for the three and six months ended June 30, 2022, respectively, and $ 0.0  million and $ 0.1  million for the three and six months ended June 30, 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 March 31, 2022 are as follows:

Future minimum payments on its charter agreements as of June 30, 2022 are as follows:

For the years ended December 31,

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(unaudited)  

2022 (nine months)

$ 8,178  

2022 (six months)

$ 4,961  

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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 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,

For the three and six months ended June 30, 2022 and 2021, operating results for the Company’s reportable segments were as follows:

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

(unaudited)  

Tour revenues:

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$ 6,680  

$ 57,367  

$ 114,321  

$ 7,164  

$ 107,157  

Land Experiences

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18,277  

44,435  

34,552  

Total tour revenues

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$ 75,644  

$ 158,756  

$ 17,047  

$ 141,709  

Operating loss:

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$ 11,368  

$ ( 53,239 )  

$ ( 58,335 )  

$ 5,096  

Land Experiences

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( 321 )  

( 5,317 )  

Total operating loss

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$ 13,274  

$ ( 53,560 )  

$ ( 63,652 )  

$ 10,092  

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

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

(unaudited)  

Depreciation and amortization:

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$ 2,434  

$ 20,998  

$ 15,690  

$ 5,308  

Land Experiences

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$ 2,963  

$ 22,354  

$ 16,462  

$ 5,892  

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

(In thousands)

As of March 31, 2022

As of June 30, 2022

As of December 31, 2021

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$ 42,017  

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.

For the three and six months ended June 30, 2022 

there was $ 2.0 million and $ 3.6 million, respectively, in intercompany tour revenues between the Lindblad and Land Experiences reportable segments, which were eliminated in consolidation. For the three and six months ended June 30, 2021, there was no intercompany tour revenues between the Lindblad and Land Experiences reportable segments.

MANAGEMENT ’

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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 COVID-19 virus and the Russia-Ukraine conflict;

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

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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.

We currently operate a fleet of ten owned expedition ships and 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.

We have a longstanding relationship with the National Geographic Society (“National Geographic”) 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 whereby our owned vessels carry the National Geographic name and National Geographic sells our expeditions through its internal travel division.

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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, Off the Beaten Path and Classic Journeys brands.

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.

2022 Highlights

During the second quarter 2022, all ten of our owned vessels were in operations, providing immersive expeditions to guests to Alaska, the Arctic, the Galápagos Islands, Iceland, Norway and the Baltic and North Seas.

During May 2022, we amended our senior secured credit agreements to, among other things, extend the waiver of the net leverage ratio covenant through December 31, 2022.

During February 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.

During February 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.

During the second quarter of 2022, we continued to ramp up our operations, providing expeditions to guests on all ten owned vessels, including trips to Alaska, the Arctic, the Galápagos Islands, Iceland, Norway and the Baltic and North Seas.

Due to the spread of the COVID-19 virus and the effects of travel restrictions around the world, we 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 the second half of 2022 and in 2023.

Where travel restrictions remain, which now also includes a limited number of itineraries impacted by the Russia-Ukraine conflict, we are adjusting itineraries where possible, and working 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.

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Bookings Trends

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.

We have substantial advanced reservations for future travel despite some continued impact from the COVID-19 virus, including, but not limited to, 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 2023 are 26% ahead of the bookings for the full year 2020 at the same point in 2019, which was prior to the pandemic.

Balance Sheet and Liquidity

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.

As of June 30, 2022, we had $126.9 million in unrestricted cash and $48.8 million in restricted cash primarily related to deposits on future travel originating from U.S.

ports and credit card reserves.

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.

Our total debt position was $578.2 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, including the impact of higher fuel costs and inflation, 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.

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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 months ended March 31, 2022 and 2021;

results and a comparable discussion of our consolidated and segment results of operations for the three and six months ended June 30, 2022 and 2021;

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

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Results of Operations - Consolidated

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

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Undistributed loss per share available to stockholders:

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

Comparison of the Three and Six Months Ended June 30, 2022 to Three and Six Months Ended June 30, 2021 —

Tour Revenues

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. 

Tour revenues for the three months ended June 30, 2022 increased $75.6 million, to $90.9 million, compared to $15.3 million for the three months ended June 30, 2021.

The Lindblad segment tour revenues increased by $57.3 million, and the Land Experiences segment increased $18.3 million, primarily due to the ramp of expeditions and trips.

The Land Experiences segment also includes the results for Classic Journeys for 2022, which was acquired in the fourth quarter of 2021. 

Tour revenues for the six months ended June 30, 2022 increased $141.7 million, to $158.7 million, compared to $17.0 million for the six months ended June 30, 2021.

The Lindblad segment tour revenues increased by $107.1 million, and the Land Experiences segment increased $34.6 million, primarily due to the ramp of expeditions and trips.

For 2022, the Land Experiences segment also includes results for the full year-to-date period for Off the Beaten Path and DuVine, which were acquired in the first quarter of 2021, and the results for Classic Journeys, which was acquired during the fourth quarter of 2021. 

Cost of Tours

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. 

Total cost of tours for the three months ended June 30, 2022 increased $43.1 million, to $62.5 million, compared to $19.4 million for the three months ended June 30, 2021.

The Lindblad segment cost of tours increased by $31.5 million, and the Land Experiences segment increased $11.6 million, primarily due to the ramp of expeditions and trips. The Land Experiences segment also includes the results for Classic Journeys for 2022, which was acquired in the fourth quarter of 2021. 

Total cost of tours for the six months ended June 30, 2022 increased $92.7 million, to $120.4 million, compared to $27.7 million for the six months ended June 30, 2021.

The Lindblad segment cost of tours increased by $71.4 million, and the Land Experiences segment increased $21.3 million, primarily due to the ramp of expeditions and trips. The Land Experiences segment also includes results for the full year-to-date period for Off the Beaten Path and DuVine, which were acquired in the first quarter of 2021, and the results for Classic Journeys, which was acquired in the fourth quarter of 2021. 

General and Administrative

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. 

General and administrative expenses for the three months ended June 30, 2022 increased $8.4 million, or 55%, to $23.7 million, compared to $15.3 million for the three months ended June 30, 2021.

At the Lindblad segment, general and administrative expenses increased $4.9 million from the prior year period, primarily due to higher personnel costs associated with the ramp in 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 $3.5 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 results for Classic Journeys, which was acquired in the fourth quarter of 2021. 

General and administrative expenses for the six months ended June 30, 2022 increased $15.2 million, or 52%, to $44.3 million, compared to $29.1 million for the six months ended June 30, 2021.

At the Lindblad segment, general and administrative expenses increased $9.5 million from the prior year period, primarily due to higher personnel costs associated with the ramp in operations, increased credit card commissions due to the strong booking environment and higher stock-based compensation expense. At the Land Experiences segment, general and administrative expenses increased $5.7 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 results for the full year-to-date period for Off the Beaten Path and DuVine, which were acquired in the first quarter of 2021, and the results for Classic Journeys, which was acquired in the fourth quarter of 2021. 

Selling and Marketing

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.

Selling and marketing expenses for the three months ended June 30, 2022 increased $7.8 million to $12.8 million, compared to $5.0 million for the three months ended June 30, 2021.

At the Lindblad segment, selling and marketing expenses increased $7.1 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 $0.7 million, primarily due to increased marketing spend associated with the ramp up in operations and the inclusion of results for Classic Journeys, which was acquired in the fourth quarter of 2021.

Selling and marketing expenses for the six months ended June 30, 2022 increased $17.7 million to $25.2 million, compared to $7.5 million for the six months ended June 30, 2021.

At the Lindblad segment, selling and marketing expenses increased $15.7 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 $2.0 million, primarily due to increased marketing spend associated with the ramp up in operations, and includes results for the full year-to-date period for Off the Beaten Path and DuVine, which were acquired in the first quarter of 2021, and the results for Classic Journeys, which was acquired in the fourth quarter of 2021.

Depreciation and Amortization

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.

Depreciation and amortization expenses for the three months ended June 30, 2022 increased $3.0 million, or 36%, to $11.2 million, compared to $8.2 million for the three months ended June 30, 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.

Depreciation and amortization expenses for the six months ended June 30, 2022 increased $5.9 million, or 36%, to $22.4 million, compared to $16.5 million for the six months ended June 30, 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 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.

Other expenses for the three months ended June 30, 2022, increased $4.7 million to $10.2 million from $5.5 million for the three months ended June 30, 2021, primarily due to the following:

A $3.7 million increase in interest expense, net to $9.4 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 on our notes as a result of the debt refinancing in February 2022 and higher rates across our debt facilities. 

A net loss of $0.8 million primarily due to a loss on foreign currency translation.

Other expenses for the six months ended June 30, 2022, increased $7.2 million to $18.3 million from $11.1 million for the six months ended June 30, 2021, primarily due to the following:

A $6.8 million increase in interest expense, net to $18.1 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 on our notes as a result of the debt refinancing in February 2022 and higher rates across our debt facilities. 

A net loss of $0.1 million primarily due to 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, and a $0.6 million loss on foreign currency translation, mostly offset by recognition of $11.6 million in other income related to expenses covered under the CERTS grant.

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 March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

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Land Experiences

Total operating (loss) income

Total operating loss

Adjusted EBITDA:

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Total adjusted EBITDA

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

Comparison of Three and Six Months Ended June 30, 2022 to Three and Six Months Ended June 30, 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. 

Tour revenues for the three months ended June 30, 2022 increased $57.3 million to $64.0 million, compared to $6.7 million for the three months ended June 30, 2021.

The increase in 2022 was a result of the ramp in expeditions compared with the second quarter of 2021. 

Tour revenues for the six months ended June 30, 2022 increased $107.1 million to $114.3 million, compared to $7.2 million for the six months ended June 30, 2021.

The increase in 2022 was a result of the ramp in expeditions compared with the six months ended June 30, 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

Operating loss for the three months ended June 30, 2022 improved by $11.3 million to a loss of $19.7 million compared to a loss of $31.0 million for the three months ended June 30, 2021, primarily due to the increase in tour revenues, partially offset by higher cost of tours and personnel costs due to the ramp in operations, increased commissions related to the revenue and bookings growth, higher marketing costs to drive future growth and increased depreciation mainly from the delivery of the National Geographic Resolution .

Operating loss for the six months ended June 30, 2022 improved $5.1 million to a loss of $53.2 million compared to a loss of $58.3 million for the six months ended June 30, 2021, primarily due to the increase in tour revenues, partially offset by higher cost of tours and personnel costs due to the ramp in operations, increased commissions related to the revenue and bookings growth, higher marketing costs to drive future growth and increased depreciation mainly from the delivery of the National Geographic Resolution .

Comparison of Three and Six Months Ended June 30, 2022 to Three and Six Months Ended June 30, 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.

Tour revenues for the three months ended June 30, 2022 increased $18.3 million to $26.9 million compared to $8.6 million for the three months ended June 30, 2021, primarily as a result of operating additional trips during the second quarter 2022 and the inclusion of results for Classic Journeys in 2022, which was acquired in the fourth quarter of 2021.

Tour revenues for the six months ended June 30, 2022 increased $34.6 million to $44.5 million compared to $9.9 million for the six months ended June 30, 2021, primarily as a result of operating additional trips during 2022 and the inclusion of the full year-to-date period of results for Off the Beaten Path and DuVine, which were acquired in the first quarter of 2021, and the results for Classic Journeys, which was acquired in the fourth quarter of 2021.

Operating Income (Loss)

Operating income of $0.4 million for the three months ended June 30, 2022, improved $1.9 million compared to an operating loss of $1.5 million for the three months ended June 30, 2021, primarily a result of operating additional trips during the second quarter of 2022.

Operating loss for the six months ended June 30, 2022 improved by $5.0 million to a loss of $0.3 million, compared to a loss of $5.3 million for the six months ended June 30, 2021.

The lower operating loss was primarily a result of operating additional trips during 2022 and the inclusion of the full year-to-date period of results for Off the Beaten Path and DuVine, which were acquired in the first 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.

The following table outlines the reconciliation of net loss to consolidated Adjusted EBITDA for the three and six months ended June 30, 2022 and 2021.

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

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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.

The following tables outline the reconciliation for each reportable segment from operating income to Adjusted EBITDA for the three and six months ended June 30, 2022 and 2021.

Lindblad Segment

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

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Land Experiences Segment

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

Operating loss

Operating income (loss)

Depreciation and amortization

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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,

The following table sets forth our Available Guest Nights, Guest Nights Sold, Occupancy, Maximum Guests, Number of Guests and Voyages for the three and six months ended June 30, 2022 and 2021:

For the three months ended June 30,

For the six months ended June 30,

Available Guest Nights

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Number of Guests

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

The following table shows the calculations of Gross and Net Yield for the three and six months ended June 30, 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 and Net Yield per Available Guest Night

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

(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 March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

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Other tour expenses

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

The following table shows the calculations of Gross and Net Cruise Costs for the three and six months ended June 30, 2022 and 2021:

Calculation of Gross and Net Cruise Cost

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

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

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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 of June 30, 2022, we had approximately $578.2 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 as we currently expect. 

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.

As we continue to ramp operations, our monthly cash usage will continue to increase as we incur costs in operating additional expeditions and trips and increase 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.

Sources and Uses of Cash for the Six Months Ended June 30, 2022 and 2021

Net cash provided by operating activities was $18.6 million for the six months ended June 30, 2022 compared to $21.8 million for the same period in 2021. The $3.2 million decrease is primarily due to higher costs during 2022 as we ramped operations. 

Net cash used in investing activities was $23.6 million six months ended June 30, 2022 compared to $32.4 million in the same period in 2021.

2021 primarily included costs associated with building the 

National Geographic Resolution and the acquisitions of Off the Beaten Path and DuVine.

2022 primarily included routine vessel maintenance across the fleet and renovations to the National Geographic Islander II ahead of its launch later this year. 

Net cash provided by financing activities was $7.9 million six months ended June 30, 2022 compared to $9.6 million for the same period in 2021. 2022 primarily included the issuance of new senior secured notes which were used to repay the prior credit agreement, including the term facility, the Main Street Loan and the revolving facility.

2021 mainly included the drawdown of $15.5 million under a senior secured credit agreement for a contracted payment of the 

National Geographic Resolution.

Funding Sources

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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.

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 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. 

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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.

In June 2021, we amended our export credit agreements to, among other things, annualize EBITDA used in the covenant calculations through December 31, 2022.

During May 2022, we amended our export credit agreements to extend the waiver of the total net leverage ratio covenant through December 31, 

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 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.

We were in compliance with our covenants in effect as of June 30, 2022 and are expected to be in compliance for the next 12 months. 

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 5.22% over the borrowing period covering June 30, 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 5.56% over the borrowing period covering June 30, 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. 

Bressler, the founder of Natural Habitat, with an outstanding principal amount of $0.8 million as of June 30, 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.

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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.

The loan bears a variable interest rate equal to one-month LIBOR plus a spread of 3.00%, or 4.79% as of June 30, 2022.

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

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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.

As of June 30, 2022, 62,000 shares of Preferred Stock were outstanding.

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

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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.

During the six months ended June 30, 2022, 18,000 shares of Preferred Stock and related accumulated dividends were converted by the holder into 2,109,561 shares of our common stock.

As of June 30, 2022, the outstanding Preferred Stock and accumulated dividends could be converted, at the option of the holders, into approximately 7.3 million shares of our common stock. 

Funding Needs

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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. 

As of June 30, 2022, we had a working capital deficit of $123.5 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