What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2025-02-28 compared with 2024-03-06 · 120 added, 106 removed, 266 unchanged (46% of the section changed)

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We have not paid any cash dividends on our common stock to date.

We intend to retain all earnings for use in our business operations and for purchases of our common stock, accordingly, our Board of Directors does not anticipate declaring any dividends in the foreseeable future.

We intend to retain all earnings for use in our business operations and, accordingly, our Board of Directors does not anticipate declaring any dividends in the foreseeable future.

Any determination to pay dividends in the future will be at the discretion of our Board and will depend upon our results of operations, financial condition, restrictions imposed by applicable law and our financing agreements and other factors that our Board of Directors deems relevant.

In addition, our debt facilities restrict our ability to make dividend payments.

Recent Sales by the Company of Unregistered Securities

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Repurchases of Securities

Our Board of Directors publicly announced a stock and warrant repurchase plan (“Repurchase Plan”) on November 9, 2015 and increased the Repurchase Plan to $35.0 million on November 4, 2016.

Our Board of Directors publicly announced a stock repurchase plan (“Repurchase Plan”) on November 9, 2015 and increased the Repurchase Plan to $35.0 million on November 4, 2016.

This Repurchase Plan authorizes us to purchase from time to time our outstanding common stock through open market repurchases in compliance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended, and/or in privately negotiated transactions based on market and business conditions, applicable legal requirements and other factors.

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The repurchases exclude shares repurchased to settle statutory employee tax withholding related to the vesting of stock awards.

No shares were repurchased under the Repurchase Plan during the three months ended December 31, 2023.

No shares were repurchased under the Repurchase Plan during the three months ended December 31, 2024 and $12.0 million remained available for repurchase under the Repurchase Plan.

The following table represents information with respect to shares of common stock withheld from vesting of stock-based compensation awards for employee income taxes, for the periods indicated:

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FTSE 100 Index

Not applicable.

Management ’ s Discussion and Analysis of the Results of Operations and Financial Condition

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

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

We currently operate a fleet of ten owned expedition ships and operate six seasonal charter vessels under the Lindblad Expeditions, LLC.

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

We currently operate a fleet of 12 owned expedition ships and seven seasonal charter vessels under the Lindblad Expeditions, LLC.

(“Lindblad”) brand.

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

This relationship, which was recently expanded and extended in November 2023, includes a co-selling, co-marketing and global branding arrangement whereby our owned vessels carry the National Geographic name, and National Geographic sells our expeditions through its internal travel division.

This relationship, which was recently expanded and extended through 2040, includes a co-selling, co-marketing and global branding arrangement whereby our owned vessels carry the National Geographic name, and National Geographic sells our expeditions through its internal travel division.

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

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

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

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

Natural Habitat, Inc.

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

Thomson Group, consisting of Wineland-Thomson Adventures, LLC (“Thomson Family Adventures”), Thomson Safaris Ltd (“Thomson Safaris”), Nature Discovery Ltd (“Nature Discovery”), and the Ngorongoro lodge and farm under the Ngorongoro Safari Lodge Ltd (“Gibb’s Farm”), provides global custom and private tours, family travel experiences, socially responsible and positively impactful light-treading Tanzanian safaris with expert local wildlife guides providing exceptional insight, treks to the summit of Kilimanjaro, the Roof of Africa, with 30 years of experience and a commitment to environmental and social responsibility, and high-end lodging at the award-winning Gibb’s Farm, an 80-acre sanctuary located near the Ngorongoro Crater.

2024 Highlights

During 2023, we delivered record financial results with tour revenues of $569.5 million and Adjusted EBITDA of $71.2 million, exceeding the financial results of the Company prior to the pandemic, due in large part to additional guest counts across our fleet and land-based businesses.

During May 2023, we issued $275.0 million of 9.00% senior secured notes, maturing 2028, with proceeds used primarily to pay the outstanding borrowings under our prior senior secured credit agreements (the “Export Credit Agreements”).

During June 2023, Natural Habitat renewed its partnership agreement with WWF through December 31, 2028.

During November 2023, we entered into a Brand License Agreement with National Geographic Partners, LLC (“National Geographic”) through 2040, as an expansion of our longstanding relationship with National Geographic.

We will continue to collaborate with National Geographic on science, conservation, education, exploration, storytelling, sustainability and photography in order to provide travel experiences and disseminate geographic knowledge around the globe.

We have the global license to use the National Geographic Expeditions brand to market, sell and operate co-branded trips on expedition ships and river cruises, and leverage of The Walt Disney Company as an affiliate of National Geographic to distribute product through their powerful sales channels and support robust joint marketing campaigns.

Under the Brand License Agreement, we will no longer pay National Geographic commission on reservations through their channels but royalty fees, based on performance, in connection with the co-branded partnership.

Bookings Trends

We have substantial advance reservations for future travel with strong gross bookings, partially offset by the short-term impact of instability in Ecuador and the Middle East.

As of February 26, 2024, bookings for travel during 2024 have increased 2% as compared with bookings in 2023 as of the same date a year ago and the Lindblad segment had 85% of full year 2024 projected guest ticket revenues already on the books.

During April 2024, we increased our ownership of Natural Habitat from 80.1% to 90.1% for $15.2 million, as Mr.

Bressler, President of Natural Habitat, exercised a portion of his put option, and increased our ownership of DuVine from 70% to 75% for $1.5 million, by exercising a portion of our call option on DuVine,

During June 2024, we announced an agreement and on January 9, 2025, we completed the acquisition of Torcatt Enterprises Limitada, a holding company that owns and operates two vessels in the Galápagos Islands, for $17.0 million.

The acquisition expands our vessels and guest capacity in one of our core markets.

During July 2024, we acquired Thomson Group to further expand our land-based experiential travel offerings and increase our addressable market, for $24.0 million in cash and $6.0 million in Lindblad common stock, representing 682,593 shares.

Thomson Group consists of four adventure travel brands, including the respected Tanzania safari specialists Thomson Safaris, with more than 40 years of experience in the country, was founded on the principles of quality and integrity, with the goal of leading socially responsible and positively impactful light-treading safari tours.

In addition to its adventure travel brands, the acquisition includes three leading Tanzania tour operators, the historic award-winning Gibb’s Farm lodge, an 80-acre sanctuary for the senses located near the Ngorongoro Crater, the industry-leading operator of Kilimanjaro treks Nature Discovery Limited, which has more than 30 years of experience and is the recommended Tanzanian partner for over 20 specialist trekking and safari travel agents around the world, and Thomson Safaris Limited.

Financial Presentation

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Operational and Financial Metrics

We use a variety of operational and financial metrics, including non-GAAP financial measures, such as Adjusted EBITDA, Net Yields, Occupancy and Net Cruise Cost, to enable us to analyze the performance and financial condition of our ship operations.

We use a variety of operational and financial metrics, including non-GAAP financial measures, such as Net Yields, Occupancy and Net Cruise Cost, to enable us to analyze the performance and financial condition of our ship operations, and measures such as Adjusted EBITDA to analyze the performance and financial condition of our segments and consolidated results.

We utilize these financial measures to manage our business on a day-to-day basis and believe that they are the most relevant measures of performance.

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You should read this discussion and analysis of our results of operations and financial condition together with the consolidated financial statements and the related notes thereto also included in Item 8 of this Annual Report on Form 10-K.

Adjusted EBITDA is net income (loss) excluding depreciation and amortization, net interest expense, other income (expense), income tax (expense) benefit, (gain) loss on foreign currency, (gain) loss on transfer of assets, reorganization costs, and other supplemental adjustments.

Other supplemental adjustments include certain non-operating items such as stock-based compensation, executive severance costs, debt refinancing costs, acquisition-related expenses and other non-recurring charges.

Other supplemental adjustments include certain non-operating items such as stock-based compensation, reorganization costs, executive severance costs, debt refinancing costs, acquisition-related expenses, (gain) loss on transfer of assets, and other non-recurring charges.

We believe Adjusted EBITDA, when considered along with other performance measures, is a useful measure as it reflects certain operating drivers of the business, such as sales growth, operating costs, selling and administrative expense, and other operating income and expense.

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Voyages represent the number of ship expeditions completed during the period.

The following metrics apply to our Land Experiences segment:

Number of Guests represents the number of guests that travel with us in a period.

Departures represent the number of trips, tours, treks and safaris completed during the period.

Foreign Currency Translation

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

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

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

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

Our Natural Habitat, Off the Beaten Path, DuVine and Classic Journeys brands are seasonal businesses, with the majority of Natural Habitat’s tour revenue recorded in the third and fourth quarters from its summer season departures and polar bear tours, the majority of Off the Beaten Path and DuVine's revenues are recorded during the second and third quarters from their spring and summer season departures, while Classic Journeys’ revenue is somewhat less seasonal with the majority of revenues recorded during their second, third and fourth quarters.

Our Natural Habitat, Off the Beaten Path, DuVine, Classic Journeys brands and Thomson Group are seasonal businesses, with the majority of Natural Habitat’s tour revenue recorded in the third and fourth quarters from its summer season departures and polar bear tours, the majority of Off the Beaten Path and DuVine's revenues are recorded during the second and third quarters from their spring and summer season departures, and the majority of Thomson Group’s revenues being recorded during the third quarter from the height of their safari season tours, while Classic Journeys’ revenue is somewhat less seasonal with the majority of revenues recorded during their second, third and fourth quarters.

Results of Operations – Consolidated

Our reported consolidated results of operations for the years ended December 31, 2023, 2022 and 2021 are shown in the following table (percentages that are not meaningful to the change are noted as NM in the table):

Our reported consolidated results of operations for the years ended December 31, 2024, 2023 and 2022 are shown in the following table:

For the years ended December 31,

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Tour revenues for the year ended December 31, 2024 increased $75.2 million, or 13%, to $644.7 million, compared to $569.5 million for the year ended December 31, 2023.

Lindblad segment tour revenues increased by $118.9 million, or 43%, and Land Experiences segment increased $29.1 million, or 20%, primarily due to operating additional expeditions and trips, and from higher pricing.

Of the $75.2 million increase, the continuing operations realized a $31.3 million increase due to a 4% increase in guest nights sold and a 7% increase in guests traveled, and a $27.7 million increase due to pricing and the change in mix of itineraries and trips.

The $75.2 million increase also includes the results of Thomson Group since its acquisition on July 31, 2024.

The Lindblad segment tour revenues increased by $25.9 million, or 7%, and the Land Experiences segment increased $49.3 million, or 29%, inclusive of $15.1 million generated by the Thomson Group since its July 31, 2024 acquisition.

Cost of Tours

Total cost of tours for the year ended December 31, 2023 increased $39.2 million, or 14%, to $322.4 million compared to $283.2 million for the year ended December 31, 2022.

The Lindblad segment cost of tours increased $21.2 million and the Land Experiences segment increased $18.0 million primarily due to operating additional expeditions and trips.

Total cost of tours for the year ended December 31, 2024 increased $21.3 million, or 7%, to $343.6 million, compared to $322.4 million for the year ended December 31, 2023, primarily due to the inclusion of Thomson Group within our Land Experiences segment, operating additional trips, and higher operating costs.

The Lindblad segment cost of tours decreased by $5.0 million and the Land Experiences segment increased $26.3 million, or 26%, inclusive of $7.0 million related to the Thomson Group since its July 31, 2024 acquisition.

General and Administrative Expenses

General and administrative expenses for the year ended December 31, 2023 increased $22.1 million, or 23%, to $118.4 million compared to $96.3 million for the year ended December 31, 2022.

At the Lindblad segment, general and administrative expenses increased $15.4 million, or 23%, from the prior year period, primarily due to higher personnel and sales tax costs associated with the ramp in operations, higher credit card commissions due to the strong booking environment and increased stock-based compensation expense.

At the Land Experiences segment, general and administrative expenses increased $6.7 million, or 23%, primarily due to increased personnel costs related to operating additional trips and higher credit card commissions due to the strong booking environment.

General and administrative expenses for the year ended December 31, 2024 increased $21.5 million, or 18%, to $139.9 million, compared to $118.4 million for the year ended December 31, 2023, primarily due to higher personnel expense, credit card commissions due to a strong booking environment, transaction-related costs, the inclusion of the results of Thomson Group and a legal settlement.

At the Lindblad segment, general and administrative expenses increased $6.7 million, or 8%, and the Land Experiences segment increased $11.8 million, or 33%.

Selling and Marketing Expenses

Selling and marketing expenses increased $10.4 million, or 17%, to $71.4 million for the year ended December 31, 2023 compared to $61.0 million for the year ended December 31, 2022.

At the Lindblad segment, selling and marketing expenses increased $11.1 million, or 24%, primarily due to higher commissions related to the ramp in operations and increased sales and marketing spend to drive future bookings.

At the Land Experiences segment, selling and marketing expenses decreased $0.7 million, or 5%, primarily due to decreased commission expense, partially offset by higher marketing spend to drive future bookings .

Selling and marketing expenses for the year ended December 31, 2024 increased $15.6 million, or 22%, to $87.0 million, compared to $71.4 million for the year ended December 31, 2023, primarily due to higher royalties associated with the new National Geographic agreement, increased marketing spend to support future growth, and the inclusion of the results of Thomson Group.

At the Lindblad segment, selling and marketing expenses increased $10.4 million, or 18%, and the Land Experiences segment increased $5.2 million, or 37%.

Depreciation and Amortization Expenses

Depreciation and amortization expenses increased $2.7 million, or 6%, to $46.7 million for the year ended December 31, 2023 compared to $44.0 million for the year ended December 31, 2022, primarily due to depreciation of assets placed into service to support our digital initiatives.

Depreciation and amortization expenses increased $5.9 million, or 13%, to $52.6 million for the year ended December 31, 2024 compared to $46.7 million for the year ended December 31, 2023, primarily due to depreciation of assets placed into service to support our vessel fleet and amortization of intangible assets related to the Thomson Group acquisition.

Other Expense

Other expenses were $46.6 million for the year ended December 31, 2024 , compared to other expenses of $48.3 million for the year ended December 31, 2023.

The $9.3 million increase was primarily due to:

The $1.7 million decrease was primarily due to:

the May 2023 write-off of $3.9 million of deferred financing costs, fees and other expenses related to the repayment of our prior Export Credit Agreements, partially offset by;

a $1.8 million higher loss on foreign currency during 2024;

a $0.7 million increase in interest expense from higher interest rates across our debt facilities and increased borrowings.

the write-off of $3.9 million of deferred financing costs, fees and other expenses related to the repayment of our prior Export Credit Agreements during 2023.

2022 primarily included a $9.0 million write off 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 $1.4 million loss on foreign currency translation, which was mostly offset by recognition of $11.6 million in other income related to expenses covered under the grant for the Coronavirus Economic Relief for Transportation Services Act grant.

Comparison of Years Ended December 31, 2023 and 2022 - Consolidated

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Total tour revenues

Operating income (loss):

Operating income:

Land Experiences

Total operating income (loss)

Operating income (loss)

Adjusted EBITDA:

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Total adjusted EBITDA

Results of Operations – Lindblad Segment

Comparison of Years Ended December 31, 2023 and 2022

Tour Revenues

Tour revenues for the year ended December 31, 2023 increased $118.9 million, to $397.4 million compared to $278.4 million for the year ended December 31, 2022.

The 43% increase in 2023 was primarily driven by higher guest ticket revenues from a 33% increase in available guest nights due to greater fleet utilization and a 12% increase in net yield per available guest night to $1,097 reflecting higher pricing and a two-percentage point increase in occupancy compared with 2022.

Reconciliation of Net Loss to Adjusted EBITDA

For the years ended December 31,

(In thousands)

Interest expense, net

Income tax expense

Depreciation and amortization

Loss (gain) loss on foreign currency

Other (income) expense

Stock-based compensation

Transaction-related costs

Legal settlement

Reorganization costs

Adjusted EBITDA

The following tables outline the reconciliation for each segment from operating income (loss) to Adjusted EBITDA:

Lindblad Segment

For the years ended December 31,

(In thousands)

Operating loss

Operating loss improved $68.7 million to a loss of $8.7 million for the year ended December 31, 2023 compared to a loss of $77.9 million for the year ended December 31, 2022.

The decrease in operating loss was 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 sales and increased marketing spend to support future bookings and stock-based compensation expense.

Depreciation and amortization

Stock-based compensation

Legal settlement

Transaction-related costs

Reorganization costs

Adjusted EBITDA

Reconciliation of Operating (Loss) Income to Adjusted EBITDA

Land Experiences Segment

For the years ended December 31,

(In thousands)

Operating income

Depreciation and amortization

Transaction-related costs

Stock-based compensation

Adjusted EBITDA

Results of Operations – Lindblad Segment

Guest Metrics — Lindblad Segment

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Stock-based compensation

Legal settlement

Transaction-related costs

Reorganization costs

Adjusted Net Cruise Cost Excluding Fuel

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Adjusted Net Cruise Cost per Available Guest Night

Comparison of Years Ended December 31, 2024 and 2023

Tour Revenues

Tour revenues for the year ended December 31, 2024 increased $25.9 million, to $423.3 million compared to $397.4 million for the year ended December 31, 2023.

Of the $25.9 million increase, $17.8 million is related to a 4% increase in guest nights sold and $8.1 million is related to a 2% increase in revenue per guest nights sold as compared to the prior year period.

Net yield per available guest night increased 7% to $1,170, from $1,097 in 2023, reflecting higher pricing and a one-percentage point increase in occupancy compared with 2023.

Operating Loss

We incurred an operating loss of $2.9 million for the year ended December 31, 2024 compared to a loss of $8.7 million for the year ended December 31, 2023.

The $5.8 million decrease in operating loss was due to the increased revenue, partially offset by higher operating expenses, primarily due to expenses associated with increased revenue, including higher sales and marketing costs driven by increased royalties associated with the new National Geographic agreement and marketing spend to drive future booking growth, and higher general and administrative costs, driven by increased personnel costs, higher credit card commissions due to the revenue and bookings growth, transaction-related costs and a legal settlement.

Results of Operations – Land Experiences Segment

Guest Metrics — Land Experiences Segment

The following tables set forth our Guest Metrics for the Land Experiences segment.

Please refer to our Description of Certain Line Items above for the specific definition by line item and segment.

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 years ended December 31,

Comparison of Years Ended December 31, 2024 to December 31, 2023

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Tour revenues for the year ended December 31, 2024 increased $49.3 million, or 29%, to $221.4 million compared to $172.1 million in 2023, primarily as a result of operating additional trips, and higher pricing.

2024 also includes the results of Thomson Group since its acquisition on July 31, 2024.

Of the $49.3 million increase, $19.6 million is due to an 11% increase in average revenue per guest, which is a combination of pricing increases and changes to trip and tour itinerary mix, and $13.6 million is related to a 7% increase in guests traveled for the continuing operations.

Operating Income

Operating income increased $5.2 million, or 27%, to $24.5 million for the year ended December 31, 2024 compared to $19.3 million in 2023.

The increase was primarily due to the higher tour revenue, partially offset by increased cost of tours and personnel costs related to operating additional departures, higher credit card commissions related to revenue growth and increased marketing spend to drive future bookings.

Reconciliation of Net Loss to Adjusted EBITDA

For the years ended December 31,

(In thousands)

Interest expense, net

Income tax expense (benefit)

Depreciation and amortization

(Gain) loss on foreign currency

Other expense (income)

Stock-based compensation

Adjusted EBITDA

The following tables outline the reconciliation for each segment from operating income (loss) to Adjusted EBITDA:

Reconciliation of Operating (Loss) Income to Adjusted EBITDA

Lindblad Segment

For the years ended December 31,

(In thousands)

Operating loss

Depreciation and amortization

Stock-based compensation

Adjusted EBITDA

Land Experiences Segment

For the years ended December 31,

(In thousands)

Operating income

Depreciation and amortization

Stock-based compensation

Adjusted EBITDA

The increase was driven by higher revenues from the existing businesses, the inclusion of the results of Thomson Group since its acquisition, partially offset by higher operating and personnel costs related to operating additional departures, higher marketing spend to drive future growth, higher credit card commissions related to revenue growth and transaction-related costs.

Liquidity and Capital Resources

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ports and credit card reserves.

As of December 31, 2023, we had $635.1 million in long-term debt obligations, including the current portion of long-term debt.

As of December 31, 2024, we had $635.0 million in long-term debt obligations, including the current portion of long-term debt, which is insignificant.

We continually assess our available liquidity and our expected cash requirements.

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Sources and Uses of Cash

Net cash provided by operating activities was $25.4 million in 2023 compared to $2.2 million used in operations in 2022.

The $27.6 million increase was primarily due to increased operating results and higher guest deposits for future travel.

Net cash provided by operating activities was $92.4 million in 2024 compared to $25.4 million cash used in operations in 2023.

The $67.0 million increase was primarily due to higher guest deposits for future travel and increased operating results.

Net cash used in investing activities was $44.1 million in 2024 compared to $14.8 million in 2023.

2024 primarily included the acquisition of Thomson Group and capital expenditures on our vessels.

2023 included capital expenditures on our vessels and our digital transformation initiatives, partially offset by a sale of marketable securities.

2022 primarily included routine vessel maintenance across the fleet, renovations to the newly acquired National Geographic Islander II ahead of its 2022 launch, investment in digital initiatives and an investment in marketable securities, partially offset by the $3.6 million principal loan repayment by Ulstein Verft.

Net cash provided by financing activities was $60.7 million in 2023 compared to $4.9 million used in financing activities in 2022.

Net cash used by financing activities was $19.8 million in 2024 compared to $60.7 million cash provided by financing activities in 2023.

2024 primarily included expenditures for the acquisition of an additional 9.95% of Natural Habitat and 5% of DuVine related to the respective puts and calls of the redeemable non-controlling interests, and income tax withholdings for stock-based compensation.

2023 primarily included the issuance of $275.0 million of 9.00% senior secured notes which were used mainly to repay our prior Export Credit Agreements.

2022 primarily included the issuance of $360 million in 6.75% senior secured notes which were used to repay the prior credit agreement, including the term facility, the Main Street Loan and the revolving facility and principal payments on the senior secured credit agreements prior to repayment.

Contractual Obligations

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Charter commitments

Investing Activities:

Purchase obligations

Financing Activities:

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The 9.00% Notes bear interest at a rate of 9.00% per year, and interest is payable semiannually in arrears on May 15 and November 15 of each year.

The 9.00% Notes will mature on May 15, 2028, subject to earlier repurchase or redemption.

The 9.00% Notes mature on May 15, 2028, subject to earlier repurchase or redemption.

The 6.75% Notes, 9.00% Notes and Revolving Credit Facility contain covenants that, among other things, restrict our ability and the ability of our restricted subsidiaries to incur certain additional indebtedness and make certain dividend payments, distributions, investments and other restricted payments.

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As of December 31, 2024, we were in compliance with the covenants currently in effect.

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

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

Preferred Stock

On August 31, 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.

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

On August 31, 2020, we sold and issued 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 December 31, 2024, 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 were required to be paid-in-kind.

After the second anniversary of the issuance date, the dividends may be paid-in-kind or be paid in cash at our option and we have continued to pay dividends in-kind through December 31, 2023.

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

During 2024, we have continued to pay Preferred Stock dividends in-kind.

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

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

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

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

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

During the years ended December 31, 2022 and 2021, 18,000 and 5,000 shares, respectively, of Preferred Stock and related accumulated dividends were converted by the holders into 2,109,561 and 566,364 shares of our common stock, respectively.

As of December 31, 2023, the outstanding Preferred Stock and related accumulated dividends could be converted, at the option of the holder, into approximately 8.0 million shares of our common stock.

During the year ended December 31, 2022, 18,000 shares of Preferred Stock and related accumulated dividends were converted by the holders into 2,109,561 shares of our common stock.

As of December 31, 2024, the outstanding Preferred Stock and related accumulated dividends could be converted into approximately 8.4 million shares of our common stock.

Funding Needs

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We traditionally run a working capital deficit due primarily to a large balance of unearned passenger revenues and as of December 31, 2024 and 2023, we had working capital deficit of $114.0 million and $74.7 million, respectively.

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

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

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

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

The Repurchase Plan was suspended through February 4, 2023, due to restrictions related to the now-terminated Main Street Expanded Loan Facility program that remained in place for one-year upon repayment.

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

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

All repurchases were made using cash resources.

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Ships, including ship improvements, are our most significant assets.

We make accounting estimates with respect to our ship accounting related to estimating the useful life of each of our ships as well as their residual values.

We make accounting estimates with respect to our ship accounting related to estimating the useful life of each of our ships as well as their residual values, which are based on industry norms.

If conditions relating to industry norms or where we will use a ship change, we may need to change our assumptions of ship useful lives and residual values, which could impact future depreciation expense and loss on retirement of ship and/or components.

We believe we have made reasonable estimates for ship accounting purposes.

Future Travel Certificates

We have issued and currently have outstanding future travel certificates, some of which expire and some of which do not.

In determining the value of these certificates as of each period end, as well as the amount that impacts revenues, we estimate the amount of breakage that will occur in the future.

This estimate is primarily based on historical customer behavior and, if applicable, the time remaining until the certificates expire.

Based on customer behaviors, our estimate may change.

We believe we have made reasonable estimates related to future travel certificates.

Stock-Based Compensation

We account for stock-based compensation issued to employees, non-employee directors or other service providers in accordance with Accounting Standards Codification 718, Compensation - Stock Compensation, that requires awards to be recorded at their fair value on the date of grant, which is based on assumptions of performance, volatility and expected term or grant instrument.

Stock-based compensation costs are recognized on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the equity instrument issued.

Valuation of Long-Lived Assets

We review our long-lived assets, principally our vessels and operating rights, for impairment whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable.

Upon the occurrence of a triggering event, the assessment of possible impairment is based on our ability to recover the carrying value of our asset, which is determined by using the asset’s estimated undiscounted future cash flows.

If these estimated undiscounted future cash flows are less than the carrying value of the asset, an impairment charge is recognized for the excess, if any, of the asset’s carrying value over its estimated fair value.

A significant amount of judgment is required in estimating the future cash flows and fair values of our vessels and operating rights.

Intangible Assets

Our Intangible assets include tradenames, customer lists and operating rights.

Tradenames are words, symbols, or other devices used in trade or business to indicate the source of products and to distinguish it from other products and are registered with government agencies and are protected legally by continuous use in commerce.

Customer lists are established relationships with existing customers that resulted in repeat purchases and customer loyalty.

Operating rights relate to our cupos (licenses) required to operate within the Galápagos National Park in Ecuador.

We make accounting estimates, with respect to our intangible assets related to estimating their initial value from acquisitions, their useful lives as well as their residual values.

In event conditions change in our ability to recover the carrying value of our intangible assets, which is determined by using the asset’s estimated undiscounted future cash flows, an impairment charge would be recognized for the excess, if any, of the asset’s carrying value over its estimated fair value.

A significant amount of judgment is required in estimating the future cash flows and fair values of our tradenames, customer lists and operating rights.

Future Application of Accounting Standards

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What changed 10-K

Item 5. Market for Registrant’s Common Equity