What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-02 compared with 2022-08-02 · 261 added, 341 removed, 942 unchanged (39% of the section changed)

4 unchanged sentences

(In thousands, except share and per share data)

June 30, 2022

September 30, 2022

December 31, 2021

51 unchanged sentences

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

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

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

68,090  

7 unchanged sentences

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

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

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

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

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

53,132,670 and 50,800,786 issued, 53,065,365 and 50,755,546 outstanding as of September 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 June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 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 )  

Operating income (loss)

Other (expense) income:

Interest expense, net

( 9,416 )  

( 5,705 )  

( 18,130 )  

(Loss) gain on foreign currency

( 676 )  

( 546 )  

Loss on foreign currency

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

( 964 )  

( 2,357 )  

( 1,113 )  

( 28,558 )  

( 35,735 )  

( 70,706 )  

Income tax expense (benefit)

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 June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

Other comprehensive income:

15 unchanged sentences

Total Stockholders'

Balance as of March 31, 2022

Balance as of June 30, 2022

Stock-based compensation

Net activity related to equity compensation plans

Issuance of stock for conversion of preferred stock

Redeemable noncontrolling interest

1 unchanged sentence

Net loss attributable to Lindblad Expeditions Holdings, Inc

Balance as of June 30, 2022

Balance as of September 30, 2022

Additional Paid-In

9 unchanged sentences

Net loss attributable to Lindblad Expeditions Holdings, Inc.

Balance as of June 30, 2022

Balance as of September 30, 2022

LINDBLAD EXPEDITIONS HOLDINGS, INC.

8 unchanged sentences

Equity (Deficit)

Balance as of March 31, 2021

Balance as of June 30, 2021

Stock-based compensation

3 unchanged sentences

Net loss attributable to Lindblad Expeditions Holdings, Inc.

Balance as of June 30, 2021

Balance as of September 30, 2021

Additional Paid-In

10 unchanged sentences

Net loss attributable to Lindblad Expeditions Holdings, Inc.

Balance as of June 30, 2021

Balance as of September 30, 2021

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

3 unchanged sentences

(In thousands)

For the six months ended June 30,

For the nine months ended September 30,

Cash Flows From Operating Activities

$ ( 70,706 )  

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

22,354  

16,462  

Amortization of deferred financing costs and other, net

Amortization of right-to-use lease assets

( 20 )  

Right-of-use lease asset

Stock-based compensation

Deferred income taxes

( 1,128 )  

Change in fair value of contingent acquisition consideration

Loss (gain) on foreign currency

Loss 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

( 19,388 )  

Unearned passenger revenues

58,387  

76,747  

Other long-term assets

1 unchanged sentence

Accounts payable and accrued expenses

11,971  

Operating lease liabilities

Net cash provided by operating activities

18,640  

21,838  

Cash Flows From Investing Activities

Purchases of property and equipment

( 23,550 )  

Acquisition (net of cash acquired)

Net cash used in investing activities

( 23,550 )  

Cash Flows From Financing Activities

Proceeds from long-term debt

360,000  

15,484  

Repayments of long-term debt

( 340,491 )  

Payment of deferred financing costs

( 10,804 )  

Repurchase under stock-based compensation plans and related tax impacts

( 753 )  

Net cash provided by financing activities

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

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

172,693  

204,515  

Cash, cash equivalents and restricted cash at end of period

$ 175,735  

$ 203,546  

Supplemental disclosures of cash flow information:

Cash paid during the period:

$ 6,204  

$ 8,571  

Non-cash investing and financing activities:

Non-cash preferred stock dividend

$ 2,581  

$ 2,622  

Value of shares issued for acquisition

4 unchanged sentences

BUSINESS AND BASIS OF PRESENTATION

Lindblad Expeditions Holdings, Inc.

and its consolidated subsidiaries’

Lindblad Expeditions Holdings, Inc.’s and its consolidated subsidiaries’

(the “Company”

2 unchanged sentences

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

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

The Company operates the following two reportable business segments:

19 unchanged sentences

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

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

Basis of Presentation

6 unchanged sentences

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

Ramp of Fleet Operations and COVID- 19 Business Update

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.

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

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

Ramp of Fleet Operations 

The Company resumed operation in June 2021 and, since then, has continually ramped its operations, providing immersive expeditions in 2022 across all ten of its owned vessels.

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

The Company believes there are a variety of strategic advantages that enabled it to deploy its ships safely and quickly as travel restrictions were lifted.

Most notably, the size of its owned and operated vessels, which range from 48 to 148 passengers, allows for a highly controlled environment that includes stringent cleaning protocols.

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

Balance Sheet and Liquidity

As of 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.

As of September 

30, 2022, the Company had $ 116.4  million in unrestricted cash and $ 29.5 million in restricted cash primarily related to deposits on future travel originating from U.S.

ports and credit card reserves.

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. 

As of September 30, 2022, the Company had a total debt position of $ 572.4 million and was in compliance with all of its debt covenants in effect.

The Company believes 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.

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

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

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.

NOTE 2 —

6 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 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, 

For the three and nine months ended September 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 nine months ended September 30, 2022, 

approximately 0.8  million restricted shares, 1.4  million shares issuable upon exercise of options and 7.4  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, 2021, 

three and nine months ended September 30, 2021, 

0.8  million restricted shares, 1.5  million shares issuable upon exercise of options and 9.5 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,

Loss per share was calculated as follows:

For the three months ended September 30,

For the nine months ended September 30,

(In thousands, except share and per share data)

35 unchanged sentences

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

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

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

Contract Liabilities

(In thousands)

(unaudited)  

Balance as of December 31, 2021

$ 147,783  

Recognized in tour revenues during the period

Additional contract liabilities in period

Balance as of June 30, 2022

296,296  

Balance as of September 30, 2022

$ 148,255  

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

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 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 six months ended June 30,

For the nine months ended September 30,

(In thousands)

9 unchanged sentences

Restricted cash consists of the following:

As of June 30, 2022

As of September 30, 2022

As of December 31, 2021

3 unchanged sentences

$ 10,536  

Federal Maritime Commission escrow

25,918  

Federal Maritime Commission and other escrow

Certificates of deposit and other restricted securities

2 unchanged sentences

$ 21,940  

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.

Amounts within prepaid expenses and other current assets in excess of 5% of current assets as of September 30, 2022 were prepaid tour expenses of $ 20.7  million and prepaid marketing, commission and other expenses of $ 12.9 million, and as of December 31, 2021, 

were prepaid tour expenses of $ 10.3 million. 

As of September 30, 2022 

and December 31, 2021, no  individual amounts within accounts payable and accrued expenses were in excess of 

5% of current liabilities.

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

The priority use of grant funds 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 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.

As 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 September 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. 

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

six months ended June 30, 2022.

nine months ended September 30, 2022.

The following is a rollforward of the loan receivable balance:

5 unchanged sentences

Amortization of deferred costs

Balance as of June 30, 2022

Balance as of September 30, 2022

$ 4,044  

1 unchanged sentence

LONG-TERM DEBT

As of June 30, 2022

As of September 30, 2022

As of December 31, 2021

46 unchanged sentences

$ 518,658  

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.

For the three and nine months ended September 30, 2022, deferred financing costs charged to interest expense was $ 0.7  million and $ 2.1  million, respectively.

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

1 unchanged sentence

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

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

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

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

12 unchanged sentences

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.

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.

In September 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. 

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 6.75 % over the borrowing period covering September 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.

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.

In September 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 5.56 % 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 margin of 3.50 % per annum, for an aggregated rate of 7.07 % over the borrowing period covering September 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 June 30, 2022. 

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

September 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. 

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

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

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

2 unchanged sentences

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 4.79 % as of June 30, 2022.

The loan bears a variable interest rate equal to one -month LIBOR plus a spread of 3.00 %, or 6.14 % as of September 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.

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.

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. 

On October 11, 2022, the Company amended the covenants of its Senior Secured Credit Agreements to use an annualized EBITDA calculation in its net leverage ratio covenant for the periods from March 31, 2023 through September 30, 2023.

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

NOTE 6 —

17 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 June 30, 2022:

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

(In thousands)

5 unchanged sentences

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

As of June 30, 2022

As of September 30, 2022

As of December 31, 2021

8 unchanged sentences

Interest rate cap (a)

Foreign exchange forward (b)

Recorded in other current assets.

Recorded in prepaid expenses and other current assets. 

$ 1,392  

Foreign exchange forward (a)

$ 1,392  

Recorded in prepaid expenses and other current assets.

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

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

8 unchanged sentences

Interest rate cap (a)

( 297 )  

Foreign exchange forward (c)

2 unchanged sentences

$ ( 668 )  

$ ( 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 months ended September 30, 2022, recognized as income in interest expense, net.

For the nine months ended September 30, 2022, $ 1.3  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, 

nine  months ended 

September 30, 2021, 

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

1 unchanged sentence

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.

nine  months ended 

September 30, 2021, 

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

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.

1 unchanged sentence

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 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. 

As of September 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 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.

The Company estimates the approximate fair value of its long-term debt to be $ 495.3  million as of September 30, 2022, based on the terms of the agreements and comparable market data as of September 30, 2022.

As of September 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 —

STOCKHOLDERS ’

Stock and Warrant Repurchase Plan

Stock Repurchase Plan

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

3 unchanged sentences

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

The remaining balance for the Repurchase Plan was $ 12.0  million as of September 30, 2022.

The Repurchase Plan is suspended due to restrictions related to the Main Street Expanded Loan Facility program that continue for one year upon repayment.

The Company repaid the Main Street Expanded Loan Facility in February 2022. 

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. 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.

The Preferred Stock is entitled to cumulative dividends of 6.00 % per annum, and for the first two years the dividends were 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 

5 unchanged sentences

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 $ 2.1  million as of June 30, 2022, recorded as reduction to preferred stock on balance sheet.

The Preferred Stock deferred issuance costs were approximately $ 2.1  million as of September 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.

During the nine months ended September 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 $ 1.0  million and $ 3.6  million for the three and nine months ended September 30, 2022, respectively, and $ 1.3 million and $ 4.0  million for the three and nine months ended September 30, 2021, respectively.

As of September 30, 2022, the 62,000 shares of Preferred Stock outstanding and accumulated dividends could be converted at the option of the holders into approximately 7.4  million shares of the Company’s common stock.

NOTE 8 —

STOCK BASED COMPENSATION

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 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.

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 September 2021.

As of September 30, 2022, approximately 3.6  million shares were available to be granted under the Plan.

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

The Company recorded stock-based compensation expense of $ 1.6  million and $ 5.3 million, during the three and nine months ended September 30, 2022, respectively, and $ 1.4  million and $ 4.1  million during the three and nine months ended September 30, 2021, respectively.

Long-Term Incentive Compensation

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 .

During the nine months ended September 30, 2022, the Company granted 342,602 restricted stock units ("RSUs") with a weighted average grant price of $ 13.27 .

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

During the 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 .

During the nine months ended September 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.

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

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

The number of MSUs earned shall be determined and shall vest on March 31, 2025, subject to the recipient’s continued employment or service with the Company on the vesting date.

Natural Habitat Contingent Arrangement

9 unchanged sentences

NOTE 10 —

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.

As of September 30, 2022 

and December 31, 2021, the Company had no unrecognized tax benefits recorded. The Company's effective tax rate for the three and nine months ended September 30, 2022 was an expense of 46.0 % and 0.8 %, respectively, versus an expense of 12.1 % and a benefit of 2.8 % for the three and nine months ended September 30, 2021, respectively.

NOTE 11 —

26 unchanged sentences

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

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

5 unchanged sentences

Net income (loss) attributable to noncontrolling interest

( 437 )  

( 229 )  

Redemption value adjustment of put option

17,957  

Acquired businesses' noncontrolling interest

( 941 )  

Ending balance

9 unchanged sentences

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 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 expense for the three and nine months ended September 30, 2022 was $ 1.9 million and $ 4.5 million, respectively, and was $ 0.7  million and $ 0.9 million for the three and nine months ended September 30, 2021, respectively.

The royalty balance payable to National Geographic as of September 30, 2022 and December 31, 2021 was $ 1.8  million and $ 0.9  million, respectively, and are included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets.

Royalty Agreement –

3 unchanged sentences

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 $ 0.4  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.

This royalty fee expense was $0.4  million and $1.0  million for the three and nine months ended September 30, 2022, respectively, and $ 0.2  million and $ 0.3  million for the three and nine months ended September 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 June 30, 2022 are as follows:

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

For the years ended December 31,

1 unchanged sentence

(unaudited)  

2022 (six months)

2022 (three months)

$ 3,130  

12,188  

$ 15,318  

NOTE 13 —

5 unchanged sentences

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

For the three and 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,

Operating results for the Company’s reportable segments were as follows:

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

11 unchanged sentences

105,477  

41,291  

64,186  

Total tour revenues

5 unchanged sentences

$ 221,985  

Operating loss:

Operating income (loss):

$ ( 7,142 )  

8 unchanged sentences

( 686 )  

Total operating loss

13,315  

Total operating income (loss)

$ 5,808  

3 unchanged sentences

$ ( 81,303 )  

$ 33,552  

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

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

16 unchanged sentences

(In thousands)

As of June 30, 2022

As of September 30, 2022

As of December 31, 2021

13 unchanged sentences

11,361  

Total intangibles, net

7 unchanged sentences

$ 42,017  

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.

For the three and nine months ended September 30, 2022 

there was $ 1.7  million and $ 5.3  million, respectively, in intercompany tour revenues between the Lindblad and Land Experiences reportable segments, which were eliminated in consolidation. For the three and nine months ended September 30, 2021, there was $ 1.0 and $ 1.1 million, respectively, of intercompany tour revenues between the Lindblad and Land Experiences reportable segments eliminated in consolidation.

NOTE 14 —

SUBSEQUENT EVENTS

MANAGEMENT ’

5 unchanged sentences

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

) on February 28, 2022.

) on February 28, 2022. Unless the context otherwise requires, in this Form 10-Q, “Company,”

“Lindblad,”

“we,”

“us,”

“our,”

and “ours”

refer to Lindblad Expeditions Holdings, Inc., and its subsidiaries.

Cautionary Note Regarding Forward-Looking Statements

39 unchanged sentences

We do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or uncertainties after the date hereof or to reflect the occurrence of unanticipated events.

Unless the context otherwise requires, in this Form 10-Q, “Company,”

“Lindblad,”

“we,”

“us,”

“our,”

and “ours”

refer to Lindblad Expeditions Holdings, Inc., and its subsidiaries.

Business Overview

19 unchanged sentences

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 2022, we have provided immersive expeditions to our guests, on all ten of our owned and operated vessels, to Alaska, Antarctica, the Arctic, Baja California’s Sea of Cortez, British Columbia, Canada's Northwest Passage, French Polynesia, the Galápagos Islands, Greenland, Iceland, Norway, the Pacific Northwest, South America and elsewhere. 

During third quarter 2022, we launched the National Geographic Islander II , our spacious all-suite ship, for expeditions in the Galápagos Islands.

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. On October 11, 2022, we amended the covenants our senior secured credit agreements to use an annualized EBITDA calculation in our net leverage ratio covenant for the periods from March 31, 2023 through September 30, 2023.

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.

1 unchanged sentence

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 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.

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

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

Ramp of Fleet Operations  

We resumed operation in June 2021 and, since then, have continually ramped our operations, providing immersive expeditions in 2022 across all ten of our owned vessels.

During the third quarter of 2022, operations included trips to Alaska, the Arctic, the Pacific Northwest, British Columbia, Canada's Northwest Passage, the Galápagos Islands, Greenland, Iceland, Norway and South America. Travel restrictions related to COVID-19 have diminished dramatically, and we will resume operations in additional geographies in the remainder of 2022 and throughout 2023. Where travel restrictions remain, which primarily 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. Previously, due to the spread of the COVID-19 virus and the effects of travel restrictions around the world, we had suspended or rescheduled the majority of its expeditions departing between March 16, 2020 through May 31, 2021.

We believe there are a variety of strategic advantages that enabled us to deploy our ships safely and quickly as travel restrictions were lifted.

Most notably, the size of our owned and operated vessels, which range from 48 to 148 passengers, allows for a highly controlled environment that includes stringent cleaning protocols.

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

Bookings Trends

We have 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.

We have substantial advanced reservations for future travel despite some continued impact from the COVID-19 virus, including, but not limited to, elevated cancellations, as well as some impact related to itinerary changes due to the Russia-Ukraine conflict. Bookings for 2023 are 23% ahead of the bookings for the full year 2020 at the same point in 2019.

Balance Sheet and Liquidity

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.

As of September 30, 2022, we had $116.4 million in unrestricted cash and $29.5 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 $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.

Our total debt position was $572.4 million as of September 30, 2022, and we were in compliance with all of our debt covenants currently in effect.

As we continue to ramp operations, we 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.

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.

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.

1 unchanged sentence

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

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

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

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

55 unchanged sentences

Results of Operations - Consolidated

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

4 unchanged sentences

Depreciation and amortization

Operating loss

Operating income (loss)

Undistributed loss per share available to stockholders:

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

Comparison of the Three and Nine Months Ended September 30, 2022 to Three and Nine Months Ended September 30, 2021 —

Tour Revenues

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.

Tour revenues for the three months ended September 30, 2022 increased $80.3 million, to $144.8 million, compared to $64.5 million for the three months ended September 30, 2021.

The Lindblad segment tour revenues increased by $50.6 million, and the Land Experiences segment increased $29.6 million, primarily due to the ramp of expeditions and trips, and higher pricing.

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.

Tour revenues for the nine months ended September 30, 2022 increased $222.0 million, to $303.5 million, compared to $81.6 million for the nine months ended September 30, 2021.

The Lindblad segment tour revenues increased by $157.8 million, and the Land Experiences segment increased $64.2 million, primarily due to the ramp of expeditions and trips, and higher pricing.

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 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. 

Total cost of tours for the three months ended September 30, 2022 increased $42.0 million, or 92%, to $87.6 million, compared to $45.6 million for the three months ended September 30, 2021.

The Lindblad segment cost of tours increased by $25.5 million, and the Land Experiences segment increased $16.5 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 nine months ended September 30, 2022 increased $134.8 million to $208.0 million, compared to $73.3 million for the nine months ended September 30, 2021.

The Lindblad segment cost of tours increased by $97.0 million, and the Land Experiences segment increased $37.8 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 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. 

General and administrative expenses for the three months ended September 30, 2022 increased $7.5 million, or 44%, to $24.5 million, compared to $17.0 million for the three months ended September 30, 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. At the Land Experiences segment, general and administrative expenses increased $2.9 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 nine months ended September 30, 2022 increased $22.8 million, or 49%, to $68.9 million, compared to $46.1 million for the nine months ended September 30, 2021.

At the Lindblad segment, general and administrative expenses increased $14.2 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 $8.6 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 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.

Selling and marketing expenses for the three months ended September 30, 2022 increased $5.8 million, or 57%, to $16.0 million, compared to $10.2 million for the three months ended September 30, 2021.

At the Lindblad segment, selling and marketing expenses increased $4.2 million, primarily due to higher commissions related to the ramp in operations.

At the Land Experiences segment, selling and marketing expenses increased $1.6 million, primarily due to increased marketing spend associated with the ramp 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 nine months ended September 30, 2022 increased $23.5 million to $41.2 million, compared to $17.7 million for the nine months ended September 30, 2021.

At the Lindblad segment, selling and marketing expenses increased $20.0 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.

At the Land Experiences segment, selling and marketing expenses increased $3.5 million, primarily due to increased marketing spend associated with the ramp 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 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.

Depreciation and amortization expenses for the three months ended September 30, 2022 increased $1.5 million, or 16%, to $10.8 million, compared to $9.3 million for the three months ended September 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 was replaced in August 2022, and the amortization of acquired intangibles.

Depreciation and amortization expenses for the nine months ended September 30, 2022 increased $7.4 million, or 29%, to $33.2 million, compared to $25.8 million for the nine months ended September 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 was replaced in August 2022, and the amortization of acquired intangibles.

Other Income (Expense)

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:

Other expense for the three months ended September 30, 2022, increased $6.4 million to $9.5 million from $3.1 million for the three months ended September 30, 2021, primarily due to the following:

A $2.3 million increase in interest expense, net to $8.4 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 $0.6 million decrease in loss on foreign currency translation.

A $4.6 million increase in other expenses due to the $4.4 million related to expenses covered under the grant for the Coronavirus Economic Relief for Transportation Services (“CERTS”) Act recognized in third quarter 2021.

Other expense for the nine months ended September 30, 2022, increased $13.5 million to $27.8 million from $14.2 million for the nine months ended September 30, 2021, primarily due to the following:

A $9.1 million increase in interest expense, net to $26.5 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.

A $0.3 million increase in loss on foreign currency translation.

A $4.3 million decrease in other income 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, during 2022, and the $4.4 million related to expenses covered under the CERTS grant during 2021, mostly offset by the by recognition of $11.6 million related to expenses covered under the CERTS grant during 2022.

Results of Operations —

1 unchanged sentence

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 June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

2 unchanged sentences

Total tour revenues

Operating loss:

Operating income (loss):

Land Experiences

Total operating loss

Total operating income (loss)

Adjusted EBITDA:

1 unchanged sentence

Total adjusted EBITDA

Comparison of Three and Six Months Ended June 30, 2022 to Three and Six Months Ended June 30, 2021 at the Lindblad Segment

Comparison of Three and Nine Months Ended September 30, 2022 to Three and Nine Months Ended September 30, 2021 at the Lindblad Segment

Tour Revenues

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.

Tour revenues for the three months ended September 30, 2022 increased $50.6 million to $83.7 million, compared to $33.1 million for the three months ended September 30, 2021.

The increase in 2022 was a result of the ramp in expeditions and higher pricing compared with the third quarter of 2021. 

Tour revenues for the nine months ended September 30, 2022 increased $157.8 million to $198.1 million, compared to $40.3 million for the nine months ended September 30, 2021.

The increase in 2022 was a result of the ramp in expeditions and higher pricing compared with the nine months ended September 30, 2021.

Operating Loss

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

Operating loss for the three months ended September 30, 2022 improved by $15.2 million to a loss of $7.1 million compared to a loss of $22.3 million for the three months ended September 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 and increased depreciation mainly from the delivery of the National Geographic Resolution .

Operating loss for the nine months ended September 30, 2022 improved $20.2 million to a loss of $60.4 million compared to a loss of $80.6 million for the nine months ended September 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 Nine Months Ended September 30, 2022 to Three and Nine Months Ended September 30, 2021 at the Land Experiences Segment

Tour Revenues

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.

Tour revenues for the three months ended September 30, 2022 increased $29.6 million to $61.0 million compared to $31.4 million for the three months ended September 30, 2021, primarily as a result of operating additional trips during the third quarter 2022, higher pricing and the inclusion of results for Classic Journeys in 2022, which was acquired in the fourth quarter of 2021.

Tour revenues for the nine months ended September 30, 2022 increased $64.2 million to $105.5 million compared to $41.3 million for the nine months ended September 30, 2021, primarily as a result of operating additional trips during 2022, higher pricing 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.

Operating income for the three months ended September 30, 2022 improved $8.4 million to $13.0 million compared to operating income of $4.6 million for the three months ended September 30, 2021, primarily a result of operating additional trips during the third quarter of 2022 and the inclusion of results for Classic Journeys in 2022, which was acquired in the fourth quarter of 2021.

Operating income of $12.6 million for the nine months ended September 30, 2022 improved by $13.3 million compared to a loss of $0.7 million for the nine months ended September 30, 2021.

The improvement in operating income 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, and the results for Classic Journeys, which was acquired in the fourth quarter of 2021.

Adjusted EBITDA —

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.

The following table outlines the reconciliation of net loss to consolidated Adjusted EBITDA.

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

Interest expense, net

Income tax benefit

Income tax expense (benefit)

Depreciation and amortization

Gain on foreign currency

Loss on foreign currency

Other expense (income)

Stock-based compensation

Adjusted EBITDA

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.

The following tables outline the reconciliation for each reportable segment from operating income to Adjusted EBITDA.

Lindblad Segment

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

4 unchanged sentences

Land Experiences Segment

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

5 unchanged sentences

Lindblad Segment

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

For the three months ended June 30,

For the six months ended June 30,

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 September 30,

For the nine months ended September 30,

Available Guest Nights

2 unchanged sentences

Number of Guests

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

The following table shows the calculations of Gross and Net Yield.

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 June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

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

7 unchanged sentences

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

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

Operating loss

Operating income (loss)

Cost of tours

3 unchanged sentences

Other tour expenses

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

The following table shows the calculations of Gross and Net Cruise Costs:

Calculation of Gross and Net Cruise Cost

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

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

17 unchanged sentences

Liquidity and Capital Resources

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

As of June 30, 2022, we had approximately $578.2 million in long-term debt obligations, including the current portion of long-term debt.

As of September 30, 2022, we had approximately $572.4 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 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 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 

We 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. 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.

However, there can be no assurance that cash flows from operations will be available to fund future obligations or that we will not experience delays or cancellations with respect to the resumption of our operations.

Sources and Uses of Cash for the Nine Months Ended September 30, 2022 and 2021

Net cash provided by operating activities was $0.8 million for the nine months ended September 30, 2022 compared to $21.5 million for the same period in 2021. The $20.7 million decrease is primarily due to higher costs during 2022 as we ramped operations. 

Net cash used in investing activities was $29.6 million for the nine months ended September 30, 2022 compared to $96.3 million in the same period in 2021.

2022 primarily included routine vessel maintenance across the fleet and renovations to the National Geographic Islander II  for its launch during the third quarter of this year, while 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 

Net cash provided by financing activities was $2.1 million for the nine months ended September 30, 2022 compared to $55.3 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 $61.7 million under a senior secured credit agreement for the remaining payments on the 

National Geographic Resolution.

2 unchanged sentences

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

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

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

4 unchanged sentences

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

New Revolving Credit Facility 

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

2 unchanged sentences

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

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

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

Senior Secured Credit Agreements

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

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

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

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

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

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, 

In September 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 further 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 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.

We were in compliance with our covenants in effect as of September 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 6.75% over the borrowing period covering September 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 7.07% over the borrowing period covering September 30, 2022. On October 11, 2022, we amended the covenants of our export credit agreements to use an annualized EBITDA calculation in our net leverage ratio covenant for the periods from March 31, 2023 through September 30, 2023.

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 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.

Bressler, the founder of Natural Habitat, with an outstanding principal amount of $0.8 million as of September 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 September 2023 for the purchase of guest transportation vehicles.

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

2 unchanged sentences

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 4.79% as of June 30, 2022.

The loan bears a variable interest rate equal to one-month LIBOR plus a spread of 3.00%, or 6.14% as of September 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”

4 unchanged sentences

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

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

The Preferred Stock has senior and preferential ranking to our 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.

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

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

1 unchanged sentence

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. 

During the nine months ended September 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 September 30, 2022, the outstanding Preferred Stock and accumulated dividends could be converted, at the option of the holders, into approximately 7.4 million shares of our common stock. 

Funding Needs

4 unchanged sentences

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

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. 

As of September 30, 2022, we had a working capital deficit of $126.4 million, and as of December 31, 2021, we had a working capital deficit of $79.1 million. 

Critical Accounting Policies

1 unchanged sentence

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