LINDBLAD EXPEDITIONS HOLDINGS, INC. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our principal executive officer and principal financial officer, our management conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2024. Management ’ s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”). Our internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that our receipts and expenditures are being made only in accordance with authorizations of our management and our directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting, as of December 31, 2024, using the criteria described in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the evaluation under the updated internal control framework in Internal Control-Integrated Framework (2013), management concluded that our internal control over financial reporting was effective as of December 31, 2024. The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which appears in Item 9A of this Annual Report on Form 10-K. Changes in Internal Control Over Financial Reporting Thomson Group Acquisition The Thomson Group acquisition was completed on July 31, 2024, which is discussed in detail in Note 9—Acquisitions to the consolidated financial statements. Our evaluation of the effectiveness of the Company’s internal control over financial reporting and of the design and operation of our disclosure controls and procedures did not encompass that of Thomson Group. This decision aligns with the general guidance from the SEC Staff, allowing the exclusion of an assessment of a recently acquired business from management’s scope for an internal controls audit for up to one year post-acquisition. Thomson Group contributed approximately 2% to our total revenues for the year ended December 31, 2024. As of December 31, 2024, the total assets of the acquired business represented about 2% of total consolidated assets, mainly comprising of goodwill, intangibles and cash. Except as noted above with respect to the Thomson Group Acquisition, there have been no changes in the internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting. 56 Inherent Limitations on Effectiveness of Controls We do not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. 57 Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Lindblad Expeditions Holdings, Inc. Opinion on Internal Control Over Financial Reporting We have audited Lindblad Expeditions Holdings, Inc. and Subsidiaries’ internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Lindblad Expeditions Holdings, Inc. and Subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria. As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Wineland-Thomson Adventures, Inc., which is included in the 2024 consolidated financial statements of the Company and constituted 2% of total assets as of December 31, 2024 and 2% of total revenues for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Wineland-Thomson Adventures, Inc. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2024 consolidated balance sheets of Lindblad Expeditions Holdings, Inc. and Subsidiaries as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, stockholders' deficit and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated February 28, 2025 expressed an unqualified opinion thereon. Basis for Opinion The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 58 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Hartford, Connecticut February 28, 2025 59 Item 9B. Other Information Rule 10b5 - 1 Trading Plans Directors and Executive Officers. Our directors and executive officers may purchase or sell shares of our common stock in the market from time to time, including pursuant to equity trading plans adopted in accordance with Rule 10b5 - 1 under the Exchange Act (“Rule 10b5 - 1” ) and in compliance with guidelines specified by the Company. In accordance with Rule 10b5 - 1 and the Company’s insider trading policy, directors, officers and certain employees who, at such time, are not in possession of material non-public information about the Company are permitted to enter into written plans that pre-establish amounts, prices and dates (or formula for determining the amounts, prices and dates) of future purchases or sales of the Company’s common stock, including shares acquired pursuant to the Company’s equity plans (“Rule 10b5 - 1 Trading Plans”). Under a Rule 10b5 - 1 Trading Plan, a broker executes trades pursuant to parameters established by the director or executive officer when entering into the plan, without further direction from them. The following table describes contracts, instructions or written plans for the sale or purchase of our securities adopted, terminated or modified by our directors and executive officers during the three months ended December 31, 2024, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5 - 1 (c). Name and Title Adoption, Termination or Modification Date of Adoption, Termination or Modification Scheduled Expiration Date of Plan Number of Shares to be Purchased under the Plan Alex P. Schultz ( Director ) Adoption December 19, 2024 April 20, 2026 330,629 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. PART III Item 10. Directors, Executive Officers and Corporate Governance Information concerning our executive officers, directors and corporate governance is incorporated herein by reference to our Definitive Proxy Statement to be filed with the Securities and Exchange Commission (“SEC”) within 120 days after the end of our fiscal year covered by this Form 10-K with respect to our 2025 Annual Meeting of Stockholders. Code of Conduct and Ethics We have adopted Codes of Business Conduct and Ethics that apply to our employees, including our principal executive officer, principal financial officer and persons performing similar functions, and our directors. Our codes of ethics and business conduct can be found posted in the investor relations sections on our website at http://investors.expeditions.com . None of the websites referenced in this Annual Report on the information contained therein is incorporated herein by reference. Future material amendments or waivers relating to the Code of Ethics will be disclosed on our website referenced in this paragraph within four business days following the date of such amendment or waiver. Item 11. Executive Compensation Information concerning our executive officers, directors and corporate governance is incorporated herein by reference to our Definitive Proxy Statement to be filed with the Securities and Exchange Commission (“SEC”) within 120 days after the end of our fiscal year covered by this Form 10-K with respect to our 2025 Annual Meeting of Stockholders. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information concerning our executive officers, directors and corporate governance is incorporated herein by reference to our Definitive Proxy Statement to be filed with the Securities and Exchange Commission (“SEC”) within 120 days after the end of our fiscal year covered by this Form 10-K with respect to our 2025 Annual Meeting of Stockholders. 60 Securities Authorized for Issuance under Equity Compensation Plans Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column) Equity compensation plans approved by security holders (1) 3,186,834 $ 8.98 1,503,043 (2) Equity compensation plans not approved by security holders N/A N/A N/A (1) Information is as of December 31, 2024 (2) Consists of shares available for issuance under our 2021 Long-Term Incentive Plan. Item 13. Certain Relationships and Related Transactions, and Director Independence Information concerning our executive officers, directors and corporate governance is incorporated herein by reference to our Definitive Proxy Statement to be filed with the Securities and Exchange Commission (“SEC”) within 120 days after the end of our fiscal year covered by this Form 10-K with respect to our 2025 Annual Meeting of Stockholders. Item 14. Principal Accountant Fees and Services Information concerning our executive officers, directors and corporate governance is incorporated herein by reference to our Definitive Proxy Statement to be filed with the Securities and Exchange Commission (“SEC”) within 120 days after the end of our fiscal year covered by this Form 10-K with respect to our 20254 Annual Meeting of Stockholders. 61 PART IV Item 15. Exhibits, Financial Statement Schedules (a) The following documents are filed as part of this Form 10-K or incorporated herein by reference: (1) Consolidated Financial Statements. See Index to Consolidated Financial Statements on page F-1. (2) Financial Statement Schedules. None. (3) Exhibits. The following exhibits are filed or incorporated by reference as part of this Form 10-K. Number Description Included Form Filing Date 3.1 Second Amended Certificate. By Reference DEFM 14-A June 24, 2015 3.2 Amended Bylaws By Reference 8-K March 26, 2020 3.3 Registration Rights Agreement by and between Lindblad Expeditions Holdings, Inc. and The Investors Party thereto. By Reference 8-K August 31, 2020 4.1 Specimen Common Stock Certificate. By Reference 8-K July 10, 2015 4.2 Securities Registered Pursuant to Section 12. By Reference 10-K February 26, 2020 4.3 Certificate of Designations of 6.0% Series A Convertible Preferred Stock of Lindblad Expeditions Holdings, Inc. By Reference 8-K August 31, 2020 4.4 Indenture, dated as of February 4, 2022, among Lindblad Expeditions, LLC, Lindblad Expeditions Holdings, Inc. and the other guarantors named therein and Wilmington Trust, National Association, as trustee and collateral trustee, relating to the 6.750% Senior Secured Notes due 2027. By Reference 8-K February 7, 2022 4.4.1 First Supplemental Indenture, dated May 2, 2023, to Indenture, dated as of February 4, 2022, among Lindblad Expeditions, LLC, Lindblad Expeditions Holdings, Inc. and the other guarantors named therein and Wilmington Trust, National Association, as trustee and collateral trustee, relating to the 6.750% Senior Secured Notes due 2027 . By Reference 10-Q May 3, 2023 4.5 Form of 6.750% Senior Secured Notes due 2027 ( included in Indenture, dated as of February 4, 2022, among Lindblad Expeditions, LLC, Lindblad Expeditions Holdings, Inc. and the other guarantors named therein and Wilmington Trust, National Association, as trustee and collateral trustee, relating to the 6.750% Senior Secured Notes due 2027. Exhibit 4.4 ). By Reference 8-K February 7, 2022 4.6 Indenture, dated as of May 2, 2023, among the Issuer, each of the guarantors named therein and Wilmington Trust, National Association, as trustee and collateral agent, governing the terms of the Issuer’s $275,000,000 aggregate principal amount of 9.000% Senior Secured Notes due 2028. By Reference 8-K May 2, 2023 4.7 Form of 9.000% Senior Secured Notes due 2028 (included in Exhibit 4.6). By Reference 8-K May 2, 2023 10.1 Registration Rights Agreement among the Company and each of Capitol Acquisition Management 2 LLC, Lawrence Calcano, Richard C. Donaldson, Piyush Sodha and L. Dyson Dryden. By Reference 8-K May 15, 2013 10.2 2015 Long-Term Incentive Plan* By Reference DEFM 14-1 July 10, 2015 10.3 Non-Competition Agreement between Sven-Olof Lindblad and the Company. By Reference 8-K July 10, 2015 62 10.4 Employment Agreement between Trey Byus and the Company and Assignment and Assumption of Option Award Agreement.* By Reference 8-K July 10, 2015 10.5 Registration Rights Agreement between the shareholders of Lindblad Expeditions, Inc. and Capitol Acquisitions Corp. II. By Reference 8-K July 10, 2015 10.6 Brand License Agreement, dated as of November 14, 2023 . †# By Reference 8-K November 15, 2023 10.7 Lindblad 2012 Stock Incentive Plan .* By Reference 8-K July 10, 2015 10.8 Form of Executive Officer Stock Option Award Agreement. * By Reference 8-K October 30, 2015 10.9 Form of Non-Employee Director Restricted Stock Award Agreement. * By Reference 10-K March 14, 2016 10.1 0 Non-Employee Director Deferred Compensation Plan. * By Reference 10-K March 14, 2016 10.11 Employment Agreement by and between Natural Habitat, Inc., Lindblad Expeditions Holdings, Inc. and Ben Bressler. * By Reference 8-K May 5, 2016 10.1 2 Lindblad Expeditions Holdings, Inc. Employee Incentive Plan. * By Reference 8-K April 3, 2017 10.1 3 Form of Restricted Stock Unit Agreement. * By Reference 8-K April 3, 2017 10. 14 Form of Performance Share Unit Agreement. * By Reference 8-K April 3, 2017 10. 15 Amendment No. 1 dated as of September 4, 2018 to Employment Agreement between the Company and Dean (Trey) Byus. * By Reference 8-K September 6, 2018 10.1 6 Investment Agreement Dated as of August 26, 2020 by and among Lindblad Expeditions Holdings, Inc. and The Purchasers. By Reference 8-K August 27, 2020 10.1 7 Form of Market Stock Unit Award Agreement. By Reference 8-K October 5, 2020 10. 18 Amendment to Employment Agreement by and between Lindblad Expeditions Holdings, Inc. and Ben Bressler. * By Reference 10-Q May 6, 2020 10. 19 Amendment to Natural Habitat, Inc.’s Stockholders’ Agreement by and between Lindblad Expeditions Holdings, Inc., Natural Habitat, Inc. and Ben Bressler. By Reference 10-Q May 6, 2020 10.20 Lindblad Expeditions Holdings, Inc. 2021 Long Term Incentive Plan. * By Reference DEF 14A April 19, 2021 10. 21 Collateral Trust Agreement, dated as of February 4, 2022, by and among Lindblad Expeditions, LLC, Lindblad Expeditions Holdings, Inc., the other grantors party thereto, Wilmington Trust, National Association as trustee and collateral trustee, Credit Suisse AG, Cayman Islands Branch, as administrative agent under the Revolving Credit Agreement and each additional authorized representative from time to time party thereto. By Reference 8-K February 7, 2022 10. 22 Revolving Credit Agreement, dated as of February 4, 2022, by and among Lindblad Expeditions, LLC, Lindblad Expeditions Holdings, Inc., the lenders and other parties party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent, and Credit Suisse Securities (USA) LLC, JPMorgan Chase Bank, N.A., and Citibank, N.A. as joint bookrunners, joint lead arrangers and syndication agents. By Reference 8-K February 7, 2022 10.23 Employment Agreement by and between Lindblad Expeditions Holdings, Inc. and Noah Brodsky. * By Reference 8-K May 31, 2022 10.24 Second Amendment to Stockholders Agreement by and among Lindblad Expeditions Holdings, Inc. Natural Habitat, Inc. and Ben Bressler. By Reference 8-K December 27, 2022 10.25 Amendment 2 to the Employment Agreement by and between Lindblad Expeditions Holdings, Inc. and Benjamin Bressler.* By Reference 8-K December 27, 2022 10.26 Employment Agreement by and between Lindblad Expeditions Holdings, Inc. and Natalya Leahy. * By Reference 8-K December 10, 2024 10.27 Employment Agreement by and between Lindblad Expeditions Holdings, Inc. and Frederick Goldberg. * By Reference 8-K December 10, 2024 19.1 Company Insider Trading Policy By Reference 10-K March 6, 2024 21.1 Subsidiaries. Herewith 63 23.1 Consent of Ernst & Young LLP. Herewith 31.1 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Herewith 31.2 Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Herewith 32.1 Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Herewith 32.2 Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Herewith 97.1 Policy Relating to Recovery of Erroneously Awarded Compensation. By Reference 10-K March 6, 2024 101.INS Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) Herewith 101.SCH Inline XBRL Taxonomy Extension Schema Document Herewith 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document Herewith 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document Herewith 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document Herewith 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document Herewith 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Management compensatory agreement. # Schedules and similar attachments to this Exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Lindblad Expeditions Holdings, Inc. agrees to furnish supplementally a copy of any omitted schedule or exhibit to the U.S. Securities and Exchange Commission upon request. † Certain portions of this Exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The omitted information is (i) not material and (ii) the type that the Company and Lindblad Expeditions Holdings, Inc. each treat as private or confidential. Lindblad Expeditions Holdings, Inc. agrees to furnish supplementally an unredacted copy of this Exhibit to the U.S. Securities and Exchange Commission upon request. Item 16. Form 10-K Summary None. 64 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized on February 28, 2025. LINDBLAD EXPEDITIONS HOLDINGS, INC. (Registrant) By: /s/ Natalya Leahy Natalya Leahy Chief Executive Officer (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Natalya Leahy Chief Executive Officer February 28, 2025 Natalya Leahy (Principal Executive Officer) /s/ Frederick Goldberg Chief Financial Officer February 28, 2025 Frederick Goldberg (Principal Financial and Accounting Officer) /s/ Elliott Bisnow Director February 28, 2025 Elliott Bisnow /s/ L. Dyson Dryden Director February 28, 2025 L. Dyson Dryden /s/ Mark D. Ein Co-Chair February 28, 2025 Mark D. Ein /s/ John M. Fahey Jr. Director February 28, 2025 John M. Fahey Jr. /s/ Pamala Kaufman Director February 28, 2025 Pamala Kaufman /s/ Sven Lindblad Founder and Co-Chair February 28, 2025 Sven Lindblad /s/ Annette Reavis Director February 28, 2025 Annette Reavis /s/ Catherine B. Reynolds Director February 28, 2025 Catherine B. Reynolds /s/ Alex Schultz Director February 28, 2025 Alex Schultz /s/ Thomas S. Smith, Jr. Director February 28, 2025 Thomas S. Smith, Jr. /s/ Andy Stuart Director February 28, 2025 Andy Stuart 65 LINDBLAD EXPEDITIONS HOLDINGS, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID 42 ) F-2 Consolidated Balance Sheets as of December 31, 2024 and 2023 F-4 Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022 F-5 Consolidated Statements of Comprehensive Loss for the years ended December 31, 2024, 2023 and 2022 F-6 Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2024, 2023 and 2022 F-7 Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022 F-8 Notes to Consolidated Financial Statements F-9 F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Lindblad Expeditions Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Lindblad Expeditions Holdings, Inc. and Subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, stockholders' deficit and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2025, expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Valuation of acquired tradename Description of the Matter As disclosed in Note 9 to the consolidated financial statements, the Company acquired Thomson Group on July 31, 2024, for consideration of approximately $30.0 million. This transaction was accounted for as a business combination. Auditing the valuation of a tradename in connection with a business combination is judgmental due to the estimation uncertainty in determining the fair value of the asset. The fair value of the tradename asset was sensitive to judgment in the selection of the appropriate royalty rate, discount rate and forecast of the amount and timing of expected future cash flows. The forecast assumption is forward-looking and could be affected by future economic and market conditions. F-2 How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company's process to estimate the fair value of the acquired tradename, including the valuation methodology, assumptions used and the completeness and accuracy of data utilized in such process. To test the estimated fair value of the acquired tradename in connection with the acquisition of the Thomson Group, our audit procedures included, among others, evaluating the valuation methodologies used, evaluating the assumptions described above, and testing the completeness and accuracy of the underlying data used by the Company in its analyses. We involved our internal valuation specialists to assist in assessing the methodologies and certain assumptions used to value the acquired tradename. For example, we compared certain assumptions detailed above to historical results of the acquired business and evaluated the projected revenue growth rate to comparable companies within the same industry. As part of this evaluation, we also compared the royalty rate used in the valuation of the tradename to market data. In addition, we performed a sensitivity analysis on the assumptions detailed above. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2022. Hartford, Connecticut February 28, 2025 F-3 LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except share and per share data) As of December 31, 2024 As of December 31, 2023 ASSETS Current Assets: Cash and cash equivalents $ 183,941 $ 156,845 Restricted cash 32,202 30,499 Prepaid expenses and other current assets 62,290 57,158 Total current assets 278,433 244,502 Property and equipment, net 518,390 526,002 Goodwill 59,031 42,017 Intangibles, net 15,923 9,412 Other long-term assets 5,128 9,364 Total assets $ 876,905 $ 831,297 LIABILITIES Current Liabilities: Unearned passenger revenues $ 318,666 $ 252,199 Accrued expenses 58,054 48,901 Accounts payable 13,860 16,154 Lease liabilities - current 1,845 1,923 Long-term debt - current 29 47 Total current liabilities 392,454 319,224 Long-term debt, less current portion 625,425 621,778 Deferred tax liabilities 3,537 2,118 Other long-term liabilities 1,024 1,943 Total liabilities 1,022,440 945,063 Commitments and contingencies - - Series A redeemable convertible preferred stock, 165,000 shares authorized; 62,000 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively 78,155 73,514 Redeemable noncontrolling interests 29,424 37,784 107,579 111,298 STOCKHOLDERS’ DEFICIT Preferred stock, $ 0.0001 par value, 1,000,000 shares authorized; 62,000 Series A shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively - - Common stock, $ 0.0001 par value, 200,000,000 shares authorized; 54,507,977 and 53,390,082 issued, 54,376,154 and 53,332,150 outstanding as of December 31, 2024 and December 31, 2023, respectively 6 5 Additional paid-in capital 109,473 97,139 Accumulated deficit ( 362,881 ) ( 322,208 ) Accumulated other comprehensive income 288 - Total stockholder’s deficit ( 253,114 ) ( 225,064 ) Total liabilities, mezzanine equity and stockholders’ deficit $ 876,905 $ 831,297 The accompanying notes are an integral part of these consolidated financial statements. F-4 LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES Consolidated Statements of Operations (In thousands, except share and per share data) For the years ended December 31, 2024 2023 2022 Tour revenues $ 644,727 $ 569,543 $ 421,500 Operating expenses: Cost of tours 343,673 322,376 283,217 General and administrative 139,921 118,431 96,291 Selling and marketing 87,018 71,426 60,996 Depreciation and amortization 52,562 46,711 44,042 Total operating expenses 623,174 558,944 484,546 Operating income (loss) 21,553 10,599 ( 63,046 ) Other (expense) income: Interest expense, net ( 45,738 ) ( 45,014 ) ( 37,495 ) (Loss) gain on foreign currency ( 1,065 ) 751 ( 1,236 ) Other income (expense) 159 ( 4,066 ) ( 307 ) Total other expense ( 46,644 ) ( 48,329 ) ( 39,038 ) Loss before income taxes ( 25,091 ) ( 37,730 ) ( 102,084 ) Income tax expense 3,104 3,146 6,076 Net loss ( 28,195 ) ( 40,876 ) ( 108,160 ) Net income attributable to noncontrolling interest 2,984 4,734 3,221 Net loss attributable to Lindblad Expeditions Holdings, Inc. ( 31,179 ) ( 45,610 ) ( 111,381 ) Series A redeemable convertible preferred stock dividend 4,641 4,373 4,671 Net loss available to stockholders $ ( 35,820 ) $ ( 49,983 ) $ ( 116,052 ) Weighted average shares outstanding Basic 53,817,462 53,256,513 52,018,987 Diluted 53,817,462 53,256,513 52,018,987 Undistributed loss per share available to stockholders: Basic $ ( 0.67 ) $ ( 0.94 ) $ ( 2.23 ) Diluted $ ( 0.67 ) $ ( 0.94 ) $ ( 2.23 ) The accompanying notes are an integral part of these consolidated financial statements. F-5 LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Loss (In thousands) For the years ended December 31, 2024 2023 2022 Net loss $ ( 28,195 ) $ ( 40,876 ) $ ( 108,160 ) Other comprehensive income: Change in foreign currency translation adjustments 288 - - Cash flow hedges: Reclassification adjustment, net of tax - - 634 Total other comprehensive income 288 - 634 Total comprehensive loss ( 27,907 ) ( 40,876 ) ( 107,526 ) Less: comprehensive income attributive to non-controlling interest 2,984 4,734 3,221 Comprehensive loss attributable to Lindblad Expeditions Holdings, Inc. $ ( 30,891 ) $ ( 45,610 ) $ ( 110,747 ) The accompanying notes are an integral part of these consolidated financial statements. F-6 LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders’ Deficit (In thousands, except share data) Common Stock Additional Paid-In Accumulated Accumulated Other Comprehensive Total Stockholders' Shares Amount Capital Deficit (Loss) Income Deficit Balance as of December 31, 2021 50,800,786 $ 5 $ 58,485 $ ( 136,439 ) $ ( 634 ) $ ( 78,583 ) Stock-based compensation - - 6,992 - - 6,992 Net activity related to equity compensation plans 267,090 - ( 1,056 ) - - ( 1,056 ) Issuance of stock for conversion of preferred stock 2,109,561 - 19,429 - - 19,429 Other comprehensive income, net - - - - 634 634 Redeemable noncontrolling interest - - - ( 14,039 ) - ( 14,039 ) Series A preferred stock dividend - - - ( 4,671 ) - ( 4,671 ) Net loss attributable to Lindblad Expeditions Holdings, Inc. - - - ( 111,381 ) - ( 111,381 ) Balance as of December 31, 2022 53,177,437 $ 5 $ 83,850 $ ( 266,530 ) $ - $ ( 182,675 ) Stock-based compensation - - 13,886 - - 13,886 Net activity related to equity compensation plans 212,645 - ( 597 ) - - ( 597 ) Redeemable noncontrolling interest - - - ( 5,695 ) - ( 5,695 ) Series A preferred stock dividend - - - ( 4,373 ) - ( 4,373 ) Net loss attributable to Lindblad Expeditions Holdings, Inc. - - - ( 45,610 ) - ( 45,610 ) Balance as of December 31, 2023 53,390,082 $ 5 $ 97,139 $ ( 322,208 ) $ - $ ( 225,064 ) Stock-based compensation - - 9,833 - - 9,833 Net activity related to equity compensation plans 435,302 1 ( 1,575 ) - - ( 1,574 ) Issuance of stock for acquisition 682,593 - 6,000 - - 6,000 Other comprehensive income, net - - - - 288 288 Redeemable noncontrolling interest - - ( 1,924 ) ( 4,853 ) - ( 6,777 ) Series A preferred stock dividend - - - ( 4,641 ) - ( 4,641 ) Net loss attributable to Lindblad Expeditions Holdings, Inc. - - - ( 31,179 ) - ( 31,179 ) Balance as of December 31, 2024 54,507,977 $ 6 $ 109,473 $ ( 362,881 ) $ 288 $ ( 253,114 ) The accompanying notes are an integral part of these consolidated financial statements. F-7 LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands) For the years ended December 31, 2024 2023 2022 Cash Flows From Operating Activities Net loss $ ( 28,195 ) $ ( 40,876 ) $ ( 108,160 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 52,562 46,711 44,042 Amortization of deferred financing costs and other, net 3,699 3,368 2,669 Amortization of right-to-use lease assets 893 811 608 Stock-based compensation 9,833 13,886 6,992 Deferred income taxes 2,052 2,719 5,481 Loss (gain) on foreign currency 1,065 ( 751 ) 1,236 Write-off of unamortized issuance costs related to debt refinancing - 3,860 9,004 Changes in operating assets and liabilities Prepaid expenses and other current assets ( 1,238 ) ( 3,454 ) ( 19,695 ) Unearned passenger revenues 52,966 7,098 32,503 Other long-term assets ( 2,037 ) ( 1,871 ) 2,556 Other long-term liabilities - - 689 Accounts payable and accrued expenses 1,750 ( 5,210 ) 20,530 Operating lease liabilities ( 995 ) ( 850 ) ( 658 ) Net cash provided by (used in) operating activities 92,355 25,441 ( 2,203 ) Cash Flows From Investing Activities Purchases of property and equipment ( 33,520 ) ( 29,963 ) ( 38,205 ) Acquisition (net of cash acquired) ( 10,559 ) - - Sale of securities - 15,163 ( 15,000 ) Proceeds from loan principal repayment - - 3,610 Net cash used in investing activities ( 44,079 ) ( 14,800 ) ( 49,595 ) Cash Flows From Financing Activities Purchase of redeemable noncontrolling interest ( 16,721 ) - - Proceeds from long-term debt - 275,000 360,000 Repayments of long-term debt ( 49 ) ( 205,704 ) ( 352,941 ) Payment of deferred financing costs ( 21 ) ( 7,489 ) ( 10,874 ) Repurchase under stock-based compensation plans and related tax impacts ( 2,974 ) ( 1,128 ) ( 1,056 ) Net cash (used in) provided by financing activities ( 19,765 ) 60,679 ( 4,871 ) Effect of exchange rate changes on cash 288 - - Net increase in cash, cash equivalents and restricted cash 28,799 71,320 ( 56,669 ) Cash, cash equivalents and restricted cash at beginning of period 187,344 116,024 172,693 Cash, cash equivalents and restricted cash at end of period $ 216,143 $ 187,344 $ 116,024 Supplemental disclosures of cash flow information: Cash paid during the period: Interest $ 49,423 $ 43,695 $ 25,815 Income taxes 319 711 309 Non-cash investing and financing activities: Non-cash preferred stock dividend $ 4,641 $ 4,373 $ 4,671 Shares issued in connection with acquisition 6,000 - - Additional paid-in capital exercise proceeds of option shares 145 - - Additional paid-in capital exchange proceeds used for option shares ( 145 ) - - The accompanying notes are an integral part of these consolidated financial statements. F-8 Lindblad Expeditions Holdings, Inc. Notes to the Consolidated Financial Statements NOTE 1 — BUSINESS Organization Lindblad Expeditions Holdings, Inc. and its consolidated subsidiaries’ (the “Company” or “Lindblad”) mission is offering life-enhancing adventures around the world and pioneering innovative ways to allow its guests to connect with exotic and remote places. The Company operates the following reportable business segments: Lindblad Segment. The Lindblad segment currently operates a fleet of 12 owned expedition ships and seven seasonal charter vessels, and primarily provides ship-based expeditions aboard customized, nimble and intimately-scaled vessels that are able to venture where larger cruise ships cannot, thus allowing Lindblad to offer up-close experiences in the planet’s wild and remote places and capitals of culture. Each expedition ship is fully equipped with state-of-the-art tools for in-depth exploration and the majority of expeditions involve travel to remote places with limited infrastructure and ports, such as Antarctica and the Arctic, or places that are best accessed by a ship, such as the Galápagos Islands, Alaska, Baja California’s Sea of Cortez and Panama, and foster active engagement by guests. The Company has an agreement with National Geographic Partners, LLC (“National Geographic”), which provides for lecturers and National Geographic experts, including photographers, writers, marine biologists, naturalists, field researchers and film crews, to join many of the Company’s expeditions. Land Experiences Segment . The Land Experiences segment includes the five primarily land-based brands, Natural Habitat, Inc. (“Natural Habitat”), Off the Beaten Path, LLC (“Off the Beaten Path”), DuVine Cycling + Adventure Company (“DuVine”), Classic Journeys, LLC (“Classic Journeys”), and Thomson Group, comprised 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”). Natural Habitat offers over 100 different expedition itineraries in more than 45 countries spanning all seven continents, with eco-conscious expeditions and nature-focused, small-group tours that include polar bear tours in Churchill, Canada, Alaskan grizzly bear adventures, small-group Galápagos Islands tours and African safaris. Natural Habitat has partnered with World Wildlife Fund (“WWF”) to offer conservation travel, which is sustainable travel that contributes to the protection of nature and wildlife. Off the Beaten Path offers active small-group adventures, led by local, experienced guides, with distinct focus on wildlife, hiking national parks and culture. Off the Beaten Path offerings include insider national park experiences in the Rocky Mountains, Desert Southwest, and Alaska, as well as unique trips across Central and South America, Oceania, Europe and Africa. DuVine offers intimate group cycling and adventure tours around the world with local cycling experts as guides, immersive in local cultural, cuisine and high-quality accommodations. International cycling tours include the exotic Costa Rican rainforests, the rocky coasts of Ireland and the vineyards of Spain while cycling adventures in the United States include cycling beneath the California redwoods, pedaling through Vermont farmland and wine tastings in the world-class vineyards of Napa and Sonoma. Classic Journeys offers highly curated active small-group and private custom journeys centered around cinematic walks led by expert local guides in over 50 countries around the world. These walking tours are highlighted by expert local guides, 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 , comprised of Wineland-Thomson Adventures, LLC and Thomson Safaris Ltd (together “Thomson Safaris”), Nature Discovery Ltd (“Nature Discovery”), and the Ngorongoro lodge and farm under the Ngorongoro Safari Lodge Ltd (“Gibb’s Farm”), offers socially responsible and positively impactful light-treading Tanzanian safaris, industry-leading Kilimanjaro treks, global custom and private tours, family travel experiences, and operates the historic award-winning Gibb’s Farm, an 80 -acre sanctuary and high-end lodge located near the Ngorongoro Crater. F-9 NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements include the accounts of the Company after elimination of all intercompany accounts and transactions. The consolidated financial statements and accompanying footnotes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”). Use of Estimates The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities as well as revenues and expenses and related disclosures. Actual results could differ from such estimates. Management estimates include determining the estimated lives of long-lived and intangible assets, the valuation of stock-based compensation awards, future travel certificate breakage, annual goodwill impairment assessment, and the recovery of deferred tax assets. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the consolidated financial statements in the period that they are determined to be necessary. Revenue Recognition Revenues are measured based on consideration specified in the Company’s contracts with guests and are recognized as the related performance obligations are satisfied. The majority of the Company’s revenues are derived from guest ticket contracts which are reported as tour revenues. The Company’s primary performance obligation under these contracts is to provide an expedition, trip or tour, and may include pre- and post-expedition excursions, hotel accommodations, land-based expeditions and air transportation to and from the ships or the trip or tour beginning or end point. Upon satisfaction of the Company’s primary performance obligation, revenue is recognized over the duration of each expedition, trip or tour. Tour revenues also include revenues from the sale of goods and services onboard the Company’s ships, cancellation fees and trip insurance. Revenues from the sale of goods and services rendered onboard are recognized upon purchase. Guest cancellation fees are recognized as tour revenues at the time of the cancellation. The Company records a liability for estimated trip insurance claims based on the Company’s claims history. Proceeds received from trip insurance premiums in excess of this liability are recorded as revenue in the period in which they are received. The Company sources its guest bookings through a combination of direct selling and various agency networks and alliances. The following table disaggregates tour revenues by the sales channel it was derived from: For the years ended December 31, Lindblad Segment 2024 2023 2022 Guest ticket revenue: Direct (a) $ 254,725 $ 226,151 $ 154,345 Agencies 92,809 90,185 66,298 Affinity 25,520 29,535 19,949 Guest ticket revenue 373,054 345,871 240,592 Other tour revenue 50,252 51,539 37,857 Tour revenues $ 423,306 $ 397,410 $ 278,449 For the years ended December 31, Land Experiences Segment 2024 2023 2022 Guest ticket revenue: Direct $ 184,420 $ 143,837 $ 115,309 Agencies 22,385 17,129 17,713 Affinity 3,741 3,134 3,100 Guest ticket revenue 210,546 164,100 136,122 Other tour revenue 10,875 8,033 6,929 Tour revenues $ 221,421 $ 172,133 $ 143,051 (a) Under the brand license agreement between the Company and National Geographic, effective January 1, 2024, National Geographic no longer receives commissions on sales bookings through the former National Geographic sales channel as the co-selling arrangement operates as direct sales through the Company’s booking system. For the years ended December 31, 2023 and 2022, the National Geographic sales channel accounted for $ 68.7 million and $ 59.0 million, respectively, of the Company’s consolidated guest ticket revenue. In the table above, 2023 and 2022 guest ticket revenues derived through the previous National Geographic sales channel have been classified as direct sales to conform to current period’s presentation. F- 10 Customer Deposits and Contract Liabilities The Company’s guests remit deposits in advance of tour embarkation. Guest deposits consist of guest ticket revenues as well as revenues from the sale of pre- and post-expedition excursions, hotel accommodations, land-based expeditions and certain air transportation. Guest deposits represent unearned revenues and are reported as unearned passenger revenues when received and are subsequently recognized as tour revenue over the duration of the expedition. The Company does not consider guest deposits to be a contract liability until the guest no longer has the right, resulting from the passage of time, to cancel their reservation and receive a full refund. In conjunction with the previous suspension or rescheduling of expeditions, guests were previously provided an option of either a refund or future travel certificates, which in some instances the value of the future travel certificate exceeded the original cash deposit. The value of future travel certificates in excess of cash received is being recognized as a discount to tour revenues at the time the related expedition occurs and includes an estimate of breakage based on historical behavior of the customer and/or time to expiration of the certificate. As of December 31, 2024, the value of future travel certificates n not significant. As of December 31, 2024 and 2023 the Company has recorded $ 318.7 million and $ 252.2 million, related to unearned passenger revenue, respectively. The change in contract liabilities within unearned passenger revenues are as follows: Contract Liabilities (In thousands) Balance as of December 31, 2023 $ 93,906 Recognized in tour revenues during the period ( 618,823 ) Additional contract liabilities in period 715,198 Balance as of December 31, 2024 $ 190,281 Cost of Tours Cost of tours represents the direct costs associated with revenues during expeditions, trips and tours, including costs of pre- or post-expedition excursions, hotel accommodations, land-based expeditions, air and other transportation expenses and costs of goods and services rendered onboard, payroll and related expenses for shipboard, guides and expedition personnel, food costs for guests and crew, fuel and related costs and other expenses such as land costs, port costs, repairs and maintenance, equipment expense, drydock, ship insurance and charter hire expenses. General and Administrative Expense General and administrative expenses represent the costs of the Company’s administrative functions, and includes salaries and related benefits, professional fees and occupancy costs, shore-side vessel support, credit card commissions, and reservations functions. Selling and Marketing Expense Selling and marketing expenses include commissions, royalties and a broad range of advertising and marketing expenses. These include advertising costs of direct mail, email, digital media, traditional media, travel agencies and brand websites, as well as costs associated with website development and maintenance, social media and corporate sponsorship costs. Advertising is charged to expense as incurred. Advertising expenses totaled $ 39.4 million, $ 33.2 million and $ 31.6 million for the years ended December 31, 2024, 2023 and 2022, respectively. The largest component of advertising expense for each of the years ended December 31, 2024, 2023 and 2022 was online advertising, which totaled $ 19.9 million, $ 17.3 million and $ 14.7 million, respectively. F- 11 Cash and Cash Equivalents The Company considers all highly liquid instruments with an original maturity of three months or less , as well as deposits in financial institutions, to be cash and cash equivalents. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows: As of December 31, 2024 2023 2022 (In thousands) Cash and cash equivalents $ 183,941 $ 156,845 $ 87,177 Restricted cash 32,202 30,499 28,847 Total cash, cash equivalents and restricted cash as presented in the statement of cash flows $ 216,143 $ 187,344 $ 116,024 Concentration of Currency Risk The Company maintains cash in several financial institutions in the U.S. and other countries which, at times, may exceed the federally insured limits. Accounts held in the U.S. are guaranteed by the Federal Deposit Insurance Corporation up to certain limits. As of December 31, 2024 and 2023, the Company’s cash held in financial institutions outside of the U.S. amounted to $ 7.4 million and $ 5.8 million, respectively. Restricted Cash The amounts held in restricted cash represent principally funds required to be held by certain vendors and regulatory agencies and are classified as restricted cash since such amounts cannot be used by the Company until the restrictions are removed by those vendors and regulatory agencies. These amounts are principally held in certificates of deposit and interest income is recognized when earned. In order to operate guest tour expedition vessels from U.S. ports, the Company is required to either post a performance bond with the Federal Maritime Commission or escrow all unearned guest deposits plus an additional 10% in restricted accounts, up to a maximum of $ 32 million. To satisfy this requirement, the Company entered into an agreement with a financial institution to escrow the required amounts. Restricted cash consist of the following: As of December 31, 2024 2023 (In thousands) Credit card processor reserves $ 12,750 $ 20,250 Federal Maritime Commission and other escrow 18,101 8,958 Certificates of deposit and other restricted deposits 1,351 1,291 Total restricted cash $ 32,202 $ 30,499 Prepaid Expenses and Other Current Assets The Company records prepaid expenses and other current assets at cost and expenses them in the period the services are provided or the goods are delivered. Marine operating supplies and inventories are included in prepaid expenses and other current assets and consist primarily of fuel, provisions, gift shop merchandise and other items for resale, other supplies used in the operation of marine expeditions. Fuel, provisions and other supplies are recorded at cost while items for sale are stated at the lower of cost or net realizable value and their cost is determined using the first -in, first -out method. The Company’s prepaid expenses and other current assets consist of the following: As of December 31, 2024 2023 (In thousands) Prepaid tour expenses $ 28,585 $ 26,123 Other 33,705 31,035 Total prepaid expenses and other current assets $ 62,290 $ 57,158 F- 12 Property and Equipment, net Property and equipment is recorded at cost, and the cost of improvements that extend the useful life of property and equipment is capitalized when incurred. These capitalized costs may include structural costs, equipment, fixtures, floor, and wall coverings. Prop erty and equipment, net is stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, as follows: Years Vessels and vessel improvements 15 to 25 Buildings and building improvements 3 to 40 Furniture & equipment 5 Computer hardware and software 5 to 10 Leasehold improvements, including expedition sites and port facilities Shorter of lease term or related asset life The ship-based tour and expedition industry is very capital intensive. As of December 31, 2024, the Company owned and operated ten expedition vessels, and acquired two additional vessels during January 2025. The Company has a capital program for the improvement of its vessels and for asset replacements in order to enhance the effectiveness and efficiency of its operations; comply with, or exceed, all relevant legal and statutory requirements related to health, environment, safety, security and sustainability; and gain strategic benefits or provide newer improved product innovations to its guests. Vessel improvement costs that add value to the Company’s vessels, such as those discussed above, are capitalized and depreciated over the shorter of the improvements, or the vessel’s estimated remaining useful life, while costs of repairs and maintenance, including minor improvement costs and drydock expenses, are charged to expense as incurred and included in cost of tours. Drydock costs primarily represent planned maintenance activities that are incurred when a vessel is taken out of service. For U.S. flagged ships, the statutory requirement traditionally is an annual docking and U.S. Coast Guard inspections, normally conducted in drydock. Internationally flagged ships have scheduled dockings approximately every 12 months, for a period of up to three to six weeks. Goodwill The Company tests for impairment annually as of September 30, or more frequently if warranted. The Company assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the estimated fair value of goodwill is less than its carrying amount. The Company completed the annual impairment test as of September 30, 2024, noting no indication of goodwill impairment. See Note 5—Goodwill and Intangible Assets for further details on the Company’s goodwill. Intangible Assets, net 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. Based on the Company’s analysis, amortization of the tradenames and customer lists were computed using the estimated useful lives of 15 and 5 years, respectively. See Note 5—Goodwill and Intangible Assets for further information on the Company’s intangible assets. The Company operates two vessels year-round in the Galápagos National Park in Ecuador, the National Geographic Endeavour II with 96 berths and the National Geographic Islander II with 48 berths. In order to operate these vessels within the park, the Company is required to have in its possession cupos (licenses) sufficient to cover the total available berths on each vessel. The cupos expire in 2042, and have a renewable 20 -year term, subject to early termination by the Ecuadorean Province of Galápagos government for non-compliance with the terms of the contract and applicable law regulations. Upon the occurrence of a triggering event, any event or circumstance that indicates that the fair value or the Company’s intangible assets might be below its carrying amount, the assessment of possible impairment of the Company’s intangible assets will be based on the Company’s ability to recover the carrying value of its 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. If a quantitative assessment is needed, judgement is required in estimating the future cash flows and fair values of its tradenames, customer lists and operating rights. As of and for the year ended December 31, 2024 and 2023 the Company determined that there were no triggering events regarding its intangible assets. F- 13 Long-Lived Asset Impairment Assessment The Company reviews its long-lived assets, principally its vessels, 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 the Company’s ability to recover the carrying value of its 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 of the asset’s carrying value over its estimated fair value. If a quantitative assessment is needed, judgment is required in estimating the future cash flows and fair values of its vessels. As of and for the years December 31, 2024 and 2023, the Company determined that there were no triggering events regarding its long-lived assets. Accounts Payable and Accrued Expenses The Company records accounts payable and accrued expenses for the cost of such items when the service is provided or when the related product is delivered. Leases The Company leases office and warehousing space with lease terms ranging from one to ten years, computer hardware and software and office equipment with lease terms ranging from three to six years and land for safari base camps with terms ranging from 12 to 95 years. At the inception of a lease, the Company recognizes right-of-use lease assets and related lease liabilities measured as the present value of future lease payments. The Company’s right-of-use lease assets are recorded in other long-term assets and the Company’s long-term lease liabilities are recorded in other long-term liabilities. Lease expense is recognized on a straight-line basis over the term of the lease. The Company reviewed its contracts with vendors, determining that its right-to-use lease assets consisted primarily of office space and land operating leases. In determining the right-to-use lease assets and related lease liabilities, the Company did not recognize any lease extension options and elected to exclude leases with terms of 12 -months or less. Short-term leases are accounted for monthly over the lease term. Fair Value Measurements Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three -tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows: Level 1 Quoted market prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at measurement date. Level 2 Quoted market prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly. Fair value is determined through the use of models or other valuation methodologies. Level 3 Significant unobservable inputs for assets or liabilities that cannot be corroborated by market data. Fair value is determined by the reporting entity’s own assumptions utilizing the best information available and includes situations where there is little market activity for the investment. Level 3 financial liabilities consist of obligations for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. The asset’s or liability’s fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. Derivative Instruments and Hedging Activities As of December 31, 2024, the Company did not have any material derivative instruments. F- 14 Currency Risk . The Company uses currency exchange contracts to manage its exposure to changes in currency exchange rates associated with certain of its non-U.S. dollar denominated receivables and payables. The Company primarily hedges a portion of its current-year currency exposure to several currencies, which normally include, but are not limited to, the Canadian and New Zealand dollars, the euro and the British pound sterling. The fluctuations in the value of these forward contracts largely offset the impact of changes in the value of the underlying risk they economically hedge. The Company also uses foreign exchange forward contracts, designated as cash flow hedges, from time-to-time as necessary, to manage its exposure to foreign denominated contracts. By entering into derivative instrument contracts, the Company exposes itself, from time to time, to counterparty credit risk. Counterparty credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is in an asset position, the counterparty has a liability to the Company, which creates credit risk for the Company. The Company continues to monitor counterparty credit risk as part of its ongoing derivative assessments. The Company’s derivative assets and liabilities consist principally of currency exchange contracts, which are carried at fair value based on significant observable inputs (Level 2 inputs). Derivatives entered into by the Company are typically executed over-the-counter and are valued using quoted market prices for similar assets or liabilities when available or internal valuation techniques, when quoted market prices are not readily available. The valuation technique and inputs depend on the type of derivative and the nature of the underlying exposure. The Company principally uses discounted cash flows along with fair value models that primarily use market observable inputs. These models take into account a variety of factors including, where applicable, maturity, currency exchange rates, interest rate yield curves and counterparty credit risks. The Company records derivatives on a gross basis in other long-term assets and/or other liabilities. The accounting for changes in value of the derivative depends on whether or not the transaction has been designated and qualifies for hedge accounting. Derivatives that are not designated for hedge accounting are measured and reported at fair value through earnings. The Company, from time-to-time, applies hedge accounting to foreign exchange rate and interest rate derivatives entered into for risk management purposes. To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the exposure being hedged. In addition, key aspects of achieving hedge accounting are documentation of hedging strategy and hedge effectiveness at the hedge inception and substantiating hedge effectiveness on an ongoing basis. A derivative must be highly effective in accomplishing the hedge objective of offsetting changes in the cash flows of the hedged item for the risk being hedged. The effective portion of changes in the fair value of derivatives designated in a hedge relationship and that qualify as cash flow hedges is recorded in accumulated other comprehensive income, net of tax, and is subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions at the inception of the hedging relationship. This documentation includes linking cash flow hedges to specific assets and liabilities on the balance sheet or to specific forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in fair values or cash flows of the hedged items. Income Taxes The Company is subject to income taxes in both the U.S. and the non-U.S. jurisdictions in which it operates. The Company accounts for income taxes using the asset and liability method, under which it recognizes deferred income taxes for the tax consequences attributable to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities, as well as for tax loss carryforwards and tax credit carryforwards. The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recoverable or settled. The Company provides a valuation allowance against deferred tax assets if, based upon the weight of available evidence, the Company does not believe it is “more-likely-than- not” that some or all of the deferred tax assets will be realized. The Company will continue to evaluate the deferred tax asset valuation allowance balances in all of its foreign and U.S. companies to determine the appropriate level of valuation allowances. The Company regularly assesses the potential outcome of current and future examinations in each of the taxing jurisdictions when determining the adequacy of the provision for income taxes. The Company has only recorded financial statement benefits for tax positions which it believes are “more-likely-than- not” to be sustained. The Company is subject to tax audits in all jurisdictions for which it files tax returns. Tax audits by their very nature are often complex and can require several years to complete. Currently, there are no U.S. federal, state or foreign jurisdiction tax audits pending. The Company’s corporate U.S. federal and state tax returns for the current year and four prior years remain subject to examination by tax authorities and the Company’s foreign tax returns for the current year and five prior years remain subject to examination by tax authorities. F- 15 Other Long-Term Assets Other long-term assets include the Company’s right-to-use lease assets, deferred tax assets and long-term prepaid value-added taxes. The Company expects to earn tax credits over time that will reduce the value-added taxes and has applied for such tax credits with the Ecuadorian tax authorities. Deferred Financing Costs Deferred financing costs relate to the issuance costs of debt liabilities and are a direct deduction from the debt carrying amount. Deferred financing costs are amortized over the life of the debt or loan agreement through interest expense, net. See Note 6—Long -term Debt. Foreign Currency Translation The Company’s reporting currency is the U.S. dollar. The functional currencies of the Company’s operating entities are the U.S. dollar and Tanzanian shilling, and the remeasurement adjustments and gains or losses resulting from foreign currency transactions are recorded as foreign exchange gains or losses. Adjustments resulting from translating the foreign currency into U.S. dollars are recorded in other comprehensive income. Stock-Based Compensation Stock-based compensation awards issued to employees, non-employee directors or other service providers are recorded at their fair value on the date of grant and amortized over the service period of the award. The Company recognizes stock-based compensation costs on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the equity instrument issued, within general and administrative expenses. Series A Redeemable Convertible Preferred Stock The Company’s Series A redeemable convertible preferred stock (“Preferred Stock”) is accounted for as a temporary equity instrument. The redemption or conversion of the Preferred Stock into shares of the Company’s common stock is not solely controlled by the Company. At the six -year anniversary of the issuance, the holders have the right to require the Company to repurchase their Preferred Stock. The Preferred Stock is convertible into the Company’s common stock (i) any time at the holder’s election, (ii) at the six -year anniversary of the issuance of those shares not redeemed at the request of the holder, or (iii) by the Company under certain circumstances. See Note 12—Stockholders’ Equity. Recently Adopted Accounting Pronouncements During November 2023, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023 - 07 ― Segment Reporting (Topic 280 ) — Improvements to Reportable Segment Disclosures . The amendments in this ASU are intended to improve and enhance disclosures about reportable segments’ significant segment expenses. ASU 2023 - 07 is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024. The Company adopted this guidance January 1, 2024 for its annual reporting, as required, and for its interim reporting will adopt January 1, 2025, as required. These amendments require the Company to disclose, among others, the name of its Chief Operating Decision Maker (“CODM”) and significant segment expenses that are regularly provided to the CODM and are included within each reported measure of segment operating results. See Note 14—Segment Information for disclosures related to ASU 2023 - 07. Recent Accounting Pronouncements During December 2023, FASB issued ASU 2023 - 09 ― Income Taxes (Topic 740 ) – Improvements to Income Tax Disclosures . The amendments in this ASU are intended to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023 - 09 is effective for fiscal years beginning after December 15, 2024. The Company will adopt this guidance January 1, 2025 for its annual reporting, as required. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures. F- 16 During November 2024, FASB issued ASU 2024 - 03 ― Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220 - 40 ) — Disaggregation of Income Statement Expenses . The amendments in this ASU are intended to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. This ASU may be applied either (i) prospectively to financial statements issued for reporting periods after the effective date or (ii) retrospectively to any or all prior periods presented in the financial statements. ASU 2024 - 03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company will adopt this ASU on January 1, 2027, as required, and is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures. NOTE 3 — EARNINGS PER SHARE Earnings per common share is computed using the two -class method related to its Preferred Stock. Under the two -class method, undistributed earnings available to stockholders for the period are allocated on a pro rata basis to the common stockholders and to the holders of convertible preferred shares based on the weighted average number of common shares outstanding and number of shares that could be issued upon conversion of the Preferred Stock. Diluted earnings per share is computed using the weighted average number of common shares outstanding and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the dilutive incremental common shares associated with restricted stock awards, shares issuable upon the exercise of stock options, using the treasury stock method, and the potential common shares that could be issued from conversion of the Preferred Stock, using the if-converted method. 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 years ended December 31, 2024, 2023 and 2022, the Company incurred a net loss from operations, therefore potential common shares were excluded from the diluted earnings per share calculation. For the year ended December 31, 2024, 0.8 million restricted shares, 2.4 million options and 8.4 million common shares issuable upon the conversion of the Preferred Stock were excluded. For the year ended December 31, 2023, 0.8 million restricted shares, 0.2 million options and 8.0 million common shares issuable upon the conversion of the Preferred Stock were excluded. For the year ended December 31, 2022, 0.7 million restricted shares, 1.5 million options and 7.4 million common shares issuable upon the conversion of the Preferred Stock were excluded. For the years ended December 31, 2024, 2023 and 2022, the Company calculated earnings per share as follows: For the years ended December 31, 2024 2023 2022 (In thousands, except share and per share data) Net loss attributable to Lindblad Expeditions Holdings, Inc. $ ( 31,179 ) $ ( 45,610 ) $ ( 111,381 ) Series A redeemable convertible preferred stock dividend 4,641 4,373 4,671 Undistributed income (loss) available to stockholders $ ( 35,820 ) $ ( 49,983 ) $ ( 116,052 ) Weighted average shares outstanding: Total weighted average shares outstanding, basic 53,817,462 53,256,513 52,018,987 Total weighted average shares outstanding, diluted 53,817,462 53,256,513 52,018,987 Undistributed loss per share available to stockholders: Basic $ ( 0.67 ) $ ( 0.94 ) $ ( 2.23 ) Diluted $ ( 0.67 ) $ ( 0.94 ) $ ( 2.23 ) F- 17 NOTE 4 — PROPERTY AND EQUIPMENT, NET Property and equipment, net are as follows: As of December 31, 2024 2023 (In thousands) Vessels and improvements $ 799,652 $ 776,622 Furniture and equipment 59,132 42,055 Land 729 - Buildings and improvements 2,435 - Leasehold improvements 1,425 1,424 Total property and equipment, gross 863,373 820,101 Less: Accumulated depreciation ( 344,983 ) ( 294,099 ) Property and equipment, net $ 518,390 $ 526,002 Total depreciation expense of the Company’s property and equipment for the years ended December 31, 2024, 2023 and 2022 was $ 50.5 million, $ 44.9 million and $ 41.0 million, respectively. For the year ended December 31, 2024, the Company had $ 33.5 million in capital expenditures, which primarily includes vessel improvement projects. For the year ended December 31, 2023, the Company had $ 30.0 million in capital expenditures, which primarily includes vessel improvement projects and digital investments. NOTE 5 — GOODWILL AND INTANGIBLE ASSETS The Company's goodwill relates to the acquisition of its Land Experiences Segment subsidiaries, see Note 9—Acquisitions. The following is a rollforward of the Company’s goodwill: (In thousands) Land Experiences Segment Balance as of December 31, 2021 $ 42,017 Activity - Balance as of December 31, 2022 42,017 Activity - Balance as of December 31, 2023 42,017 Acquisitions (a) 16,957 Foreign exchange translation 57 Balance as of December 31, 2024 $ 59,031 (a) Increase to goodwill relates to the 2024 acquisition of Thomson Group. For additional information, see Note 9—Acquisition. The Company’s intangible assets consist of finite lived assets related to the acquisition of its Land Experiences Segment subsidiaries and the value of its cupos operating rights. Total amortization expense for the years ended December 31, 2024, 2023 and 2022, was $ 2.1 million, $ 1.8 million and $ 2.0 million, respectively. F- 18 The carrying amounts and accumulated amortization of intangibles, net are as follows: As of December 31, 2024 2023 (In thousands) Gross Carrying Amount (a) Accumulated Amortization Net Carrying Amount Weighted Average Useful Life Remaining (years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Tradenames $ 14,939 $ ( 2,911 ) $ 12,028 12.1 $ 7,069 $ ( 2,222 ) $ 4,847 Customer Lists 6,907 ( 4,517 ) 2,390 1.7 6,182 ( 3,209 ) 2,973 Operating rights 6,529 ( 5,024 ) 1,505 17.2 6,529 ( 4,937 ) 1,592 Total intangibles, net $ 28,375 $ ( 12,452 ) $ 15,923 11.0 $ 19,780 $ ( 10,368 ) $ 9,412 (a) Increase to the gross carrying amounts of intangibles relate to the 2024 acquisition of Thomson Group. For additional information, see Note 9—Acquisition. Future expected amortization expense related to these intangibles are as follows: Year Amount (In thousands) 2025 $ 2,465 2026 1,708 2027 1,229 2028 1,229 2029 1,178 Thereafter 8,114 $ 15,923 NOTE 6 — LONG-TERM DEBT 6.75% Notes On February 4, 2022, the Company issued $ 360.0 million aggregate principal amount of 6.75 % senior secured notes due 2027 (the “6.75% Notes”) in a private offering. The 6.75% Notes bear interest at a rate of 6.75% per year, accruing from February 4, 2022, and interest on the 6.75% Notes is payable semiannually in arrears on February 15 and August 15 of each year. The 6.75% Notes will mature on February 15, 2027, subject to earlier repurchase or redemption. The Company used the net proceeds from the offering to prepay in full all outstanding borrowings under its prior credit agreement, including the term facility, Main Street Expanded Loan Facility, and former revolving credit facility, pay any related premiums and terminate in full its prior credit agreement and the commitments thereunder. The Company incurred $ 10.9 million in financing fees related to the 6.75% Notes, recorded as deferred financing costs as part of long-term debt. The 6.75% Notes are senior secured obligations of the Company and are guaranteed on a senior secured basis by the Company and certain of the Company’s subsidiaries (collectively, the “Guarantors”) and secured by first -priority pari passu liens, subject to permitted liens and certain exceptions, on substantially all the assets of the Company and the Guarantors. The 6.75% Notes may be redeemed by the Company, at set redemption prices and premiums, plus accrued and unpaid interest, if any. Revolving Credit Facility On February 4, 2022, the Company entered into a senior secured revolving credit facility (the “Revolving Credit Facility”), which provides for an aggregate principal amount of commitments of $ 45.0 million, maturing February 2027, including a letter of credit sub-facility in an aggregate principal amount of up to $ 5.0 million. The obligations under the Revolving Credit Facility are guaranteed by the Company and the Guarantors and are secured by first -priority pari passu liens, subject to permitted liens and certain exceptions, on substantially all the assets of the Company and the Guarantors. Borrowings under the Revolving Credit Facility, if any, will bear interest at a rate per annum equal to, at the Company’s option, an adjusted Secured Overnight Financing Rate plus a spread or a base rate plus a spread. The Company is required to pay a 0.5 % quarterly commitment fee on undrawn amounts under the Revolving Credit Facility. As of December 31, 2024, the Company had no borrowings under its Revolving Credit Facility. F- 19 9.00% Notes On May 2, 2023, the Company issued $ 275.0 million aggregate principal amount of 9.00 % senior secured notes due 2028 (the “9.00% Notes”) in a private offering. 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 Company used the net proceeds from the offering to prepay in full all outstanding borrowings under its prior senior secured credit agreements, to pay any related premiums and to terminate in full its prior senior secured credit agreements and the commitments thereunder. The 9.00% Notes are senior unsecured obligations of the Company and are guaranteed (i) on a senior secured basis by certain of the Company’s subsidiaries (collectively, the “Secured Guarantors”) and secured by a first -priority lien, subject to permitted liens and certain exceptions, on the equity and substantially all the assets of the Secured Guarantors, and (ii) on a senior unsecured basis by certain other subsidiaries of the Company. The 9.00% Notes may be redeemed by the Company, at set redemption prices and premiums, plus accrued and unpaid interest, if any. Covenants The 6.75% Notes, 9.00% Notes and Revolving Credit Facility contain covenants that, among other things, restrict the Company’s ability and the ability of its restricted subsidiaries to incur certain additional indebtedness and make certain dividend payments, distributions, investments and other restricted payments. These covenants are subject to a number of important exceptions and qualifications set forth in the 6.75% Notes, 9.00% Notes and Revolving Credit Facility. As of December 31, 2024, the Company was in compliance with the covenants currently in effect. Other The Company’s DuVine subsidiary has a EUR 0.1 million State Assistance Loan related to the financial consequences of the COVID- 19 pandemic, for the purpose of employment preservation. This loan matures August 2025, with monthly payments, and bears an annual interest rate of 0.53 %. Long-Term Debt Outstanding As of December 31, 2024 and 2023, long-term debt and other borrowing arrangements consisted of: As of December 31, 2024 2023 (In thousands) Principal Deferred Financing Costs, net Balance Principal Deferred Financing Costs, net Balance 6.75% Notes $ 360,000 $ ( 4,576 ) $ 355,424 $ 360,000 $ ( 6,771 ) $ 353,229 9.00% Notes 275,000 ( 4,999 ) 270,001 275,000 ( 6,481 ) 268,519 Other 29 - 29 77 - 77 Total long-term debt 635,029 ( 9,575 ) 625,454 635,077 ( 13,252 ) 621,825 Less current portion ( 29 ) - ( 29 ) ( 47 ) - ( 47 ) Total long-term debt, non-current $ 635,000 $ ( 9,575 ) $ 625,425 $ 635,030 $ ( 13,252 ) $ 621,778 Future minimum principal payments of long-term debt are as follows: Year Amount (In thousands) 2025 $ 29 2026 - 2027 360,000 2028 275,000 2029 - Thereafter - $ 635,029 F- 20 For the years ended December 31, 2023 and 2022, the Company recorded deferred financing costs of $ 7.5 million and $ 10.9 million, respectively, in long-term debt, amortizing the costs over the term of the financing using the straight-line method. For the years ended December 31, 2024, 2023 and 2022, deferred financing costs charged to interest expense were $ 3.7 million, $ 3.4 million and $ 2.7 million, respectively. In 2023, the Company repaid its prior senior secured credit agreements (the “First Export Credit Agreement” and the “Second Export Credit Agreement”), with the proceeds of the 9.00% Notes and $ 3.9 million of related deferred financing costs were written-off to other expense. In 2022, the Company repaid its prior credit agreement, including the term facility, Main Street Loan and revolving credit facility, with the proceeds from its 6.75% Notes, and $ 9.0 million of related deferred financing costs were written-off to other expense. Letters of Credit As of December 31, 2024 and 2023, the Company had $ 1.2 million in letters of credit outstanding with financial institutions. The annual fee for letters of credit is 1.0 % of the outstanding balance. The letters of credit are secured by a certificate of deposit maintained at the financial institutions and that mature in November 2025. See Note 10—Commitments and Contingencies for more information. NOTE 7 — FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS The carrying amounts of cash and cash equivalents, accounts payable and accrued expenses and unearned passenger revenue approximate fair value, due to the short-term nature of these instruments. As of December 31, 2024 and 2023, other than derivative instruments and investments in securities , the Company had no other assets or liabilities that were measured at fair value on a recurring basis. The Company estimates the fair value of its long-term debt to be $ 644.3 million as of December 31, 2024, based on the terms of the agreements and comparable market data. NOTE 8 — INCOME TAXES The Company provides for income taxes based on the Federal and state statutory rates on taxable income. U.S. and foreign components of income before incomes taxes are presented below: For the years ended December 31, (In thousands) 2024 2023 2022 Domestic $ 7,093 $ ( 11,630 ) $ ( 21,403 ) Foreign ( 32,184 ) ( 26,100 ) ( 80,681 ) Total $ ( 25,091 ) $ ( 37,730 ) $ ( 102,084 ) The income tax expense (benefit) is comprised of the following: For the years ended December 31, (In thousands) 2024 2023 2022 Current Federal $ 316 $ - $ - State 52 218 244 Foreign — Other 984 209 392 Total current 1,352 427 636 Deferred Federal 842 1,492 5,709 State 298 625 218 Foreign — Other 612 602 ( 487 ) Total deferred 1,752 2,719 5,440 Income tax expense $ 3,104 $ 3,146 $ 6,076 F- 21 A reconciliation of the U.S. federal statutory income tax (benefit) expense to the Company’s effective income tax provision is as follows: For the years ended December 31, 2024 2023 2022 Tax provision at statutory rate – federal 21.0 % 21.0 % 21.0 % Tax provision at effective state and local rates ( 1.4 %) ( 2.1 %) ( 0.3 %) Foreign tax rate differential ( 32.7 %) ( 17.1 %) ( 16.6 %) Executive compensation ( 4.8 %) ( 5.0 %) 0.0 % Valuation allowance 6.8 % ( 5.9 %) ( 9.4 %) Other ( 1.3 %) 0.8 % ( 0.7 %) Total effective income tax rate ( 12.4 %) ( 8.3 %) ( 6.0 %) The Company, through its subsidiaries and affiliated entities in the U.S., the Cayman Islands, Ecuador and Tanzania are subject to US Federal, US state, Ecuadorian Federal and Tanzanian Federal income taxes. The Cayman Islands do not impose federal or local income taxes. The movement in the effective tax rate related to the foreign tax rate differential is driven by a change in the jurisdictional mix of the foreign earnings and smaller consolidated pre-tax losses in 2024. Deferred tax (liabilities) assets, net, are comprised of the following: As of December 31, (In thousands) 2024 2023 Deferred tax assets: Net operating loss carryforward $ 21,564 $ 26,086 Disallowed interest carryforward 18,256 15,286 Other 1,209 2,020 Valuation allowance ( 23,362 ) ( 24,726 ) Total net deferred assets 17,667 18,666 Deferred tax liabilities: Property and equipment ( 19,111 ) ( 18,542 ) Other ( 1,160 ) ( 676 ) Total net deferred liabilities ( 20,271 ) ( 19,218 ) Deferred tax (liabilities) assets $ ( 2,604 ) $ ( 552 ) Deferred tax assets and liabilities are recorded on the consolidated balance sheet based on tax jurisdictions. For the years ended December 31, 2024 and 2023, the Company has recorded deferred tax assets of $ 0.9 million and $ 1.6 million, respectively, within other long-term assets, and for the years ended December 31, 2024 and 2023, a deferred tax liability of $ 3.5 million and $ 2.1 million, respectively. The Company recognizes valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. In assessing the likelihood of realization, management considers: (i) future reversals of existing taxable temporary differences; (ii) future taxable income exclusive of reversing temporary differences and carryforwards; (iii) taxable income in prior carryback year(s) if carryback is permitted under applicable tax law; and (iv) tax planning strategies. The Company has deferred tax assets related to U.S. federal loss carryforwards of $ 81.2 million as of December 31, 2024, with an indefinite carryforward period. The timing and manner in which the Company will utilize the net operating loss carryforwards in any year, or in total, may be limited in the future as a result of changes in the Company’s ownership and any limitations imposed by the jurisdictions in which the Company operates. As a result of the transition to the territorial tax regime effectuated by the Tax Cuts and Jobs Act enacted in 2017, any potential dividends from the Company’s foreign subsidiaries would no longer be subject to Federal tax in the United States. The Company continue to assert its prior position regarding the repatriation of historical foreign earnings from its Ecuadorian subsidiaries. The Company currently has no intention to remit any additional undistributed earnings of its Ecuadorian subsidiaries in a taxable manner. The Company no longer remains permanently reinvested in the earnings of its Cayman subsidiary. No taxes have been accrued as a result of this change because no taxes are expected to be imposed by either the United States or the Cayman Islands upon such a remittance. F- 22 The Company is subject to income taxes in the U.S. and various state and foreign jurisdictions. The Company establishes liabilities for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes may be due. These liabilities are established when the Company believes that certain positions might be challenged despite its belief that its tax return positions are fully supportable. The Company adjusts these liabilities in light of changing facts and circumstances, such as the outcome of a tax audit. The provision for income taxes includes the impact of changes to these liabilities. As of December 31, 2024 and 2023, the Company had no unrecognized tax positions. As of December 31, 2022, the Company had $ 1.4 million of unrecognized tax benefits. The Company has elected an accounting policy to classify interest and penalties related to unrecognized tax benefits as a component of income tax expense. For the years ended December 31, 2024, 2023 and 2022, interest and penalties included in income tax expense related to unrecognized tax benefits and/or uncertain tax positions were insignificant. The Company is subject to tax audits in all jurisdictions for which it files tax returns. Tax audits by their very nature are often complex and can require several years to complete. Currently, there are no U.S. federal, state or foreign jurisdiction tax audits pending. The Company’s corporate U.S. federal and state tax returns for the current year and the four prior years remain subject to examination by tax authorities and the Company’s foreign tax returns for the current year and the five prior years remain subject to examination by tax authorities. NOTE 9 — ACQUISITION On July 31, 2024, the Company, through its land-based subsidiary Natural Habitat, acquired the Thomson Group to further expand its land-based experiential travel offerings and increase its addressable market. Thomson Group consists of three adventure travel brands, including Tanzania safari specialists Thomson Safaris, with more than 40 years of experience in the country, Gibb’s Farm lodge, an 80 -acre sanctuary for the senses located near the Ngorongoro Crater, the operator of Kilimanjaro treks Nature Discovery, which has more than 30 years of experience, and Thomson Safaris Limited. The aggregate purchase price for the Thomson Group was $ 30.0 million, consisting of $ 24.0 million in cash and $ 6.0 million in Lindblad common stock, representing 682,593 shares. Pursuant to the agreement, the Company has the option to acquire Tanzania Conservation Limited. The acquisition was accounted for under purchase accounting and is included in the consolidated results from the acquisition date. Acquisition related costs were $ 2.7 million and are included in general and administrative expenses for the year ended December 31, 2024. The Company recorded $ 8.6 million in intangible assets related to tradenames and customer relationships and $ 17.0 million in goodwill related to the acquisition. The fair value of the tradename assets was sensitive to judgment in the selection of appropriate royalty rate, discount rates and forecasts of the amount and timing of expected future cash flows. The forecast assumption is forward-looking and could be affected by future economic and market conditions. Following are pro forma revenue and net loss available to stockholders for the years ended December 31, 2024 and 2023, assuming the Company had completed the acquisition on January 1, 2023: For the years ended December 31, 2024 2023 (In thousands) Revenue $ 593,318 $ 471,060 Net loss available to stockholders ( 46,458 ) ( 17,140 ) NOTE 10 — COMMITMENTS AND CONTINGENCIES Redeemable Non-Controlling Interest Contingent Arrangements The Company has controlling interests in its Natural Habitat, Off the Beaten Path, DuVine and Classic Journeys consolidated subsidiaries. The noncontrolling interests are subject to put/call agreements. The agreements were established to provide formal exit opportunities for the minority interest holders and a path to 100% ownership for the Company. The put options, under certain conditions, enable the minority holders, but do not obligate them, to sell the remaining interests to the Company. The Company has call options which enable it, but does not obligate it, to acquire the remaining interests in the subsidiaries, subject to certain dates, expirations and similar redemption value purchase measurements as the put options. F- 23 Mr. Bressler, founder of Natural Habitat, retains a 9.9 % noncontrolling interest in Natural Habitat, which is subject to a put/call arrangement, amended May 2020 and December 2022. Mr. Bressler exercised a first put option in April 2024, that enabled him to sell 9.95 % interest in Natural Habitat to the Company, valued as of December 31, 2023, for $ 15.2 million, increasing the Company’s ownership of Natural Habitat to 90.1 %. Mr. Bressler has a second put option that under certain conditions, and subject to providing notice by January 31, 2026, that enables him, but does not obligate him, to sell his remaining interest in Natural Habitat to the Company, valued as of December 31, 2025. The Company has a call option, but not an obligation, with an expiration of March 31, 2029, under which it can acquire Mr. Bressler’s remaining interest at a similar fair value measure as Mr. Bressler’s put option, subject to a call purchase price minimum. Mr. Lawrence, President of Off the Beaten Path, through a combination of his original minority interest and the profit interest units he received, retains a 19.9 % noncontrolling interest in Off the Beaten Path, which is subject to a put/call arrangement. Mr. Lawrence has a put option, that under certain conditions and subject to providing notice by October 31, 2025, that enables him, but does not obligate him, to sell his remaining interest in Off the Beaten Path to the Company, valued as of December 31, 2025. The Company has a call option, but not an obligation, on or after October 31, 2025, with an expiration of December 31, 2030, under which it can acquire Mr. Lawrence’s remaining interest at a similar fair value measure as Mr. Lawrence’s put option. Mr. Levine, founder of DuVine, retains a 25 % noncontrolling interest in DuVine, which is subject to a put/call arrangement. During April 2024, the Company exercised a portion of its call option on DuVine, acquiring an additional 5 % of the business and increasing its total ownership of DuVine to 75 %, for $ 1.5 million. Mr. Levine has a put option, that under certain conditions and subject to providing notice by January 31, 2026, that enables him, but does not obligate him, to sell his remaining interest in DuVine to the Company, valued as of December 31, 2025. The Company has a first call option, expiring December 31, 2025, to acquire an additional 10 % of DuVine from Mr. Levine, and a second call option, but not an obligation, on or after December 31, 2025, with an expiration of December 31, 2030, under which it can acquire Mr. Levine’s remaining interest at a similar fair value measure as Mr. Levine’s put option, subject to a call purchase price minimum. Mr. and Mrs. Piegza, founders of Classic Journeys, retain a 19.9 % noncontrolling interest in Classic Journeys, which is subject to a put/call arrangement. Mr. and Mrs. Piegza have a put option that under certain conditions, and subject to providing notice by November 13, 2026, that enables them, but does not obligate them, to sell their remaining interest in Classic Journeys to the Company, valued as of the fiscal quarter prior to the put notice. The Company has a call option, but not an obligation, under which it can acquire Mr. and Mrs. Piegza’s remaining interest at a similar fair value measure as Mr. and Mrs. Piegza’s put option. Since the redemption of these noncontrolling interests is not solely in the Company’s control, the Company is required to record the redeemable noncontrolling interest outside of stockholders’ equity but after its total liabilities. In addition, if it is probable that the instrument will become redeemable, as such solely due to the passage of time, the redeemable noncontrollable interest should be adjusted to the redemption value via one of two measurement methods. The Company elected the income classification-excess adjustment and accretion method for recognizing changes in the redemption value of the put options. Under this methodology, a calculation of the present value of the redemption value is compared to the carrying value of the redeemable noncontrolling interest and the carrying value of the redeemable noncontrolling interest is adjusted to the redemption value’s present value. Any adjustments to the carrying value of the redeemable noncontrolling interest, up to the fair value of the noncontrolling interest, are classified to retained earnings. Adjustments in excess of the fair value of the noncontrolling interest, are treated as a decrease to net income available to common stockholders. The fair value of the put options was determined using a discounted cash flow model. The redemption values were adjusted to their present values using the Company’s weighted average cost of capital. The following is a rollforward of the redeemable noncontrolling interest: For the years ended December 31, 2024 2023 2022 Beginning balance $ 37,784 $ 27,886 $ 10,626 Net income attributable to noncontrolling interest 2,984 4,734 3,221 Redemption value adjustment of put option 4,853 5,695 14,039 Distribution ( 1,400 ) ( 531 ) - Redemption of put and/or call options ( 14,797 ) - - Ending balance $ 29,424 $ 37,784 $ 27,886 F- 24 Lease Commitments The Company leases office space, land for safari base camps and equipment under long-term leases, which are classified as operating leases. As of December 31, 2024, the Company’s remaining weighted average operating lease terms were approximately 18.7 years. A reconciliation of operating lease payments undiscounted cash flows to lease liabilities recognized as of December 31, 2024 is as follows: (In thousands) Operating Lease Payments 2025 $ 1,845 2026 513 2027 409 2028 16 2029 16 Thereafter 654 Present value discount ( 8 % weighted average) ( 674 ) Total $ 2,779 Lease expense was $ 2.6 million, $ 2.7 million and $ 2.3 million for the years ended December 31, 2024, 2023 and 2022, respectively. These amounts are recorded within general and administrative expenses. Brand License Agreement – National Geographic The Company is party to a brand license agreement with National Geographic through 2040 , which includes a co-selling and co-marketing arrangement through which National Geographic promotes the Company’s offerings in its marketing campaigns across web-based, email, print and other marketing platforms and distributes the Company’s expeditions through the Disney Signature Experiences platform and also allows the Company to use the National Geographic name and logo. In return for these rights, the Company is charged a royalty fee, which is included within selling and marketing expense. The fee is calculated based upon a percentage of substantially all 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. Beginning in 2026, the agreement has minimum royalties that increase annually through the end of the agreement term, which based on current performance are expected to be exceeded. In 2023 and 2022, the Company operated under its former alliance and license agreement with National Geographic, where National Geographic sold the Company’s expeditions through its internal travel division in return for a commission fee and also allowed the Company to use the National Geographic name and logo in return for a royalty fee. Both the commission and royalty fees were recorded within selling and marketing expense. Charter Commitments From time to time, the Company enters into agreements to charter vessels onto which it holds its tours and expeditions, and with third parties to provide chartered air service for guests and crew on certain of its expeditions. Future minimum payments on its charter agreements are as follows: For the years ended December 31, Amount (In thousands) 2025 $ 16,692 2026 11,567 Total $ 28,259 Other Commitments The Company had an agreement for the acquisition of Torcatt Enterprises Limitada, a holding company that operates two vessels in the Galápagos Islands, for $ 17.0 million. The acquisition closed on January 9, 2025 . The Company participates, with other tour operators, in the Consumer Protection Insurance Plan sponsored by the United States Tour Operators Association (“USTOA”). The USTOA requires a $ 1.0 million performance bond, letter of credit or assigned certificate of deposit from its members to insure this plan. The Company has assigned a $1.0 million letter of credit to the USTOA to satisfy this requirement. This letter of credit will be used only if the Company becomes insolvent and cannot refund its customers’ deposits. F- 25 Legal Proceedings The Company is involved in various claims, legal actions and regulatory proceedings arising from time to time in the ordinary course of business. In the opinion of management, after consulting legal counsel, there are no outstanding proceedings that are expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows. NOTE 11 — EMPLOYEE BENEFIT PLAN The Company has a 401 (k)-profit sharing plan and trust for its employees. The Company matched 30 % in 2024, 2023 and 2022, respectively, of employee contributions up to a per employee annual maximum of $ 2,400 for 2024, 2023 and 2022. The Company’s 401 (k) plan contributions amounted to $ 0.9 million, $ 0.7 million and $ 0.6 million for the years ended December 31, 2024, 2023 and 2022, respectively, and are recorded within general and administrative expenses. NOTE 12 — STOCKHOLDERS ’ EQUITY Company Stock The Company has 1,000,000 shares of preferred stock authorized, $ 0.0001 par value and 200,000,000 shares of common stock authorized, $ 0.0001 par value. Preferred Stock On August 31, 2020, the Company 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 December 31, 2024, 62,000 shares of Preferred Stock are outstanding. 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 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 the Company’s option. During 2024, the Company has continued to pay dividends in-kind. 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 Company may, at its option, convert all, but not less than all, of the Preferred Stock into common stock if the closing price of shares of common stock is at least 150% of the conversion price for 20 out of 30 consecutive trading days. The number of shares of common stock received in such conversion shall be equal to the quotient obtained by dividing the then-current accrued value by the conversion price. At the six -year anniversary of the closing date, each investor has the right to require the Company to repurchase their Preferred Stock and any Preferred Stock not requested to be repurchased shall be converted into common shares of the Company equal to the quotient obtained by dividing the then-current accrued value by the conversion price. The Preferred Stock deferred issuance costs was $ 2.1 million as of December 31, 2024. 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 the Company’s common stock. No shares of Preferred Stock were converted into shares during the years ended December 31, 2024 and 2023. For the years ended December 31, 2024, 2023 and 2022, the Company recorded $ 4.6 million, $ 4.4 million and $ 4.6 million, respectively, in accrued dividends for Preferred Stock. As of December 31, 2024, the Preferred Stock could be converted at the option of the holders into 8.4 million shares of the Company’s common stock. Stock Repurchase Plan In 2016, the Company’s Board of Directors approved a $ 15.0 million increase to the Company’s existing stock and warrant repurchase plan (“Repurchase Plan”), to $ 35.0 million. This Repurchase Plan authorizes the Company to purchase from time to time the Company’s outstanding common stock and previously outstanding warrants. Any shares purchased are retired. The Repurchase Plan has no time deadline and will continue until otherwise modified or terminated at the sole discretion of the Company’s Board of Directors. The repurchases exclude shares repurchased to settle statutory employee tax withholding related to the vesting of stock awards. Since the Repurchase Plan inception, the Company has cumulatively repurchased 875,218 shares of common stock for $ 8.3 million and 6,011,926 warrants for $ 14.7 million, as of December 31, 2024. All repurchases were made using cash resources. The balance available for the Repurchase Plan as of December 31, 2024 was $ 12.0 million. F-26 NOTE 13  — STOCK-BASED COMPENSATION During 2021, the Company’s compensation committee approved the 2021 Long-Term Incentive Plan, which supersedes the 2015 Long-Term Incentive Plan, and authorizes restricted time and performance awards and stock options to key employees. The Company's stock-based compensation program is a long-term retention program that provides for the grant of options, restricted stock, restricted stock units (“RSUs”), performance-based restricted stock or units (“PSUs”) and/or market stock units (“MSUs”) to attract, retain and provide incentives for directors, officers and employees. The maximum number of shares reserved for the grant of awards under the plan is 4.7 million, with approximately 1.5 million shares available as of December 31, 2024. The Company settles stock-based awards with newly issued shares. Restricted Stock and Restricted Stock Units Restricted stock is shares of stock granted to an employee, non-employee director or other service providers for which sale is prohibited for a specified period of time. Restricted stock typically vests ratably over a one or three -year period following the date of grant. RSUs represent a promise to deliver shares to the employee, non-employee director or other service providers at a future date if certain vesting conditions are met. RSUs typically vest ratably over a three -year period following the date of grant. The Company does not deliver the shares associated with the RSUs to the employee, non-employee director or other service providers until the vesting conditions are met. The number of shares or units granted are determined based upon the closing price of the Company's common stock on the date of the award. Market Stock Units MSUs represent a promise to deliver shares to the employee, non-employee director or other service providers at a future date if certain performance and vesting conditions are met. 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 a determined closing price. Each MSU represents the right to receive one share of Company stock multiplied by a performance multiplier or, at the option of the Company, an amount of cash. 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. Awards, if earned, will vest after a determined performance period and may be earned at a level ranging from 0 %- 150 % of the number of MSUs granted, depending on performance. The number of units granted were determined based upon the closing price of the Company's common stock on the date of the award. The Company assessed the applicable metrics related to the MSU grants, estimating the fair value of employee MSU awards and the amount of stock compensation expense using the Monte-Carlo pricing model. Performance Stock Units PSUs represent a promise to deliver shares to the employee, non-employee director or other service providers at a future date if certain performance and vesting conditions are met. PSUs generally vest three years following the date of grant based on the attainment of performance- or market-based goals, all of which are subject to a service condition. The Company does not deliver the shares associated with the PSUs to the employee, non-employee director or other service providers until the performance and vesting conditions are met. The PSUs granted may be earned based on the Company's performance against metrics relating to annual Adjusted EBITDA and annual revenue. Awards, if earned, will vest after a three -year performance period and may be earned at a level ranging from 0 %- 200 % of the number of PSUs granted, depending on performance. The number of units were determined based upon the closing price of the Company's common stock on the date of the award. The Company assessed the applicable metrics related to the PSU grants, determined the blended probability of achieving the performance metrics and valued the awards based on the fair value at the date of grant with the amount of stock compensation expense determined based on the number of PSU’s expected to vest. F- 27 Long-Term Incentive Compensation See the following table for a summary of PSU, restricted stock, RSU and MSU activity. Performance-based Stock Units Restricted Stock and Restricted Stock Units Market-based Stock Units Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Balance, December 31, 2023 66,684 $ 9.56 657,207 $ 11.06 61,881 $ 17.48 Granted 70,378 9.33 553,156 8.74 - - Vested and released - - ( 454,346 ) 10.55 ( 18,639 ) 18.90 Forfeited ( 53,640 ) 9.45 ( 81,774 ) 10.34 ( 33,850 ) 17.36 Balance, December 31, 2024 83,422 9.44 674,243 9.60 9,392 15.08 Stock Options Stock options represent a right to buy a number of shares by the employee, non-employee director or other service providers at a future date, for a pre-set price, or exercise price, for a fixed period of time. Stock options generally vest over one to four years, with a term of ten years. Stock compensation expense related to options are recorded based on the fair value of stock option grants, amortized on a straight-line basis over the employee’s required service period. The Company estimated the fair value of employee stock options using the Black-Scholes option pricing model. The Company uses the simplified method for determining an option term under Black-Sholes as the Company issues options infrequently. The fair values of employee stock options granted under the 2021 plan were estimated using the following assumptions: Stock Option Grants 2024 2023 2022 Exercise price $ 7.40 - 8.44 $ 9.56 $ 12.64 - 14.36 Dividend yield 0.0 % 0.00 % 0.00 % Expected volatility 64.6 - 77.8 % 64.6 % 57.79 % Risk-free interest rate 3.63 - 4.48 % 3.63 % 2.75 - 3.15 % Expected term in years 5.0 - 6.25 6.25 6.25 The following table is a summary of stock option activity: Number of Options Weighted Average Exercise Price Weighted Average Contractual Live (Years) Aggregate Intrinsic Value Options outstanding as of December 31, 2023 888,458 $ 10.55 7.7 $ - Granted 1,944,319 8.12 Exercised ( 263,000 ) 9.50 Forfeited ( 150,000 ) 9.56 Options outstanding as of December 31, 2024 2,419,777 8.77 9.0 7,910,071 As of December 31, 2024 Number of Options Weighted Average Exercise Price Weighted Average Contractual Live (Years) Aggregate Intrinsic Value Options vested and/or expected to vest 2,419,777 $ 8.77 9.0 $ 7,910,071 Options exercisable 1,594,548 8.76 9.1 5,162,571 During the year ended 2024, 263,000 options with an intrinsic value of $ 0.3 million were exercised, and during the year ended 2022, 77,500 options with an intrinsic value of $ 0.3 million were exercised. No options were exercised during the year ended December 31, 2023. F- 28 Stock-based Compensation Expense Stock-based compensation expense for the years ended December 31, 2024, 2023 and 2022 was $ 9.8 million, $ 13.9 million and $ 7.0 million, respectively, and is included in general and administrative expenses. The total income tax benefit recognized for stock-based compensation plans for the years ended December 31, 2024, 2023 and 2022 was $ 0.0 million. As of December 31, 2024, unrecognized stock-based compensation expense was $ 12.7 million. This amount is expected to be recognized over a weighted average period of approximately 1.5 years. Mr. Bressler has an equity incentive opportunity to earn an award of options based on the financial performance of Natural Habitat, where if the final year equity value of Natural Habitat, as defined in Mr. Bressler's employment agreement, as amended, exceeds $ 25.0 million, effective as of December 31, 2025, Mr. Bressler would be granted options with a fair value equal to 10.1 % of such excess, subject to certain conditions. Mr. Bressler exercised a one -time right to elect an early option award of 50 % valued as of December 31, 2023, and as of result of the early exercise, during the three months ended March 31, 2024, the Company granted 1.3 million options, with an exercise price of $ 8.44 , to Mr. Bressler, and he retains the remaining amount of the equity incentive effective as of December 31, 2025. The options vested on the grant date and have a term of ten years. During the year ended December 31, 2023, the Company determined it was probable the performance condition would be met and therefore, recorded all expense related to it. The actual number of options granted will be determined by the calculated final year equity value of Natural Habitat and the Black-Scholes per share option value, factoring in the Company’s stock price on the date of the grant, its volatility and a discount rate. The performance condition related to the remaining equity incentive opportunity through December 31, 2025 was also deemed probable in 2023 and is being expensed over Mr. Bressler’s service period. For the years ended December 31, 2024 and 2023, stock-based compensation expense related to this award was $ 3.2 million and $ 8.0 million, respectively. NOTE 14 — SEGMENT INFORMATION The Company’s chief operating decision maker, or CODM, is Natalya Leahy, the Chief Executive Officer. The CODM assesses performance and allocates resources based upon the separate financial information from the Company’s operating segments. In identifying its reportable segments, the Company organized them around the nature of services provided and other relevant factors. The Company is primarily an experiential travel operator with operations in two segments, Lindblad, which provides ship-based expeditions, and Land Experiences, which provides active, land-based trips, tours, treks and safari adventures. While both segments have similar characteristics, the two operating and reporting segments cannot be aggregated because they fail to meet the requirements for aggregation. The Company evaluates the performance of the business based largely on the results of its operating segments. The CODM and management review operating results monthly, and base operating decisions on the total results at a consolidated level, as well as at a segment level. The reports provided to the Board of Directors are at a consolidated level and also contain information regarding the separate results of both reportable segments. The Company evaluates the performance of its business segments based largely on tour revenues and operating income, without allocating other income and expenses, net, income taxes and interest expense, net. For the years ended December 31, 2024, 2023 and 2022, reportable segment operating results were as follows: For the years ended December 31, 2024 2023 2022 (In thousands) Tour revenues: Lindblad $ 423,306 $ 397,410 $ 278,449 Land Experiences 221,421 172,133 143,051 Total tour revenues $ 644,727 $ 569,543 $ 421,500 Operating income: Lindblad $ ( 2,928 ) $ ( 8,692 ) $ ( 77,871 ) Land Experiences 24,481 19,291 14,825 Operating income (loss) $ 21,553 $ 10,599 $ ( 63,046 ) F- 29 The following table presents the Lindblad segment expenses: For the years ended December 31, (In thousands) 2024 2023 2022 Tour revenues $ 423,306 $ 397,410 $ 278,449 Cost of tours 217,408 222,413 201,255 General and administrative 92,662 83,004 67,564 Selling and marketing 67,731 57,334 46,226 Depreciation and amortization 48,433 43,351 41,275 Operating loss $ ( 2,928 ) $ ( 8,692 ) $ ( 77,871 ) The following table presents the Land Experiences segment expenses: For the years ended December 31, (In thousands) 2024 2023 2022 Tour revenues $ 221,421 $ 172,133 $ 143,051 Cost of tours 126,265 99,963 81,962 General and administrative 47,259 35,427 28,727 Selling and marketing 19,287 14,092 14,770 Depreciation and amortization 4,129 3,360 2,767 Operating income $ 24,481 $ 19,291 $ 14,825 Intercompany tour revenues between the Lindblad and Land Experiences segments are eliminated in consolidation and in the presentation above for the years ended December 31, 2024, 2023 and 2022 were $ 6.6 million, $ 7.9 million and $ 6.0 million, respectively. During the years ended December 31, 2024, 2023 and 2022, the Lindblad segment had $ 30.0 million, $ 28.6 million and $ 34.3 million of capital expenditures, respectively, and the Land Experiences segment had $ 3.5 million, $ 2.6 million and $ 3.9 million of capital expenditures, respectively. Depreciation and amortization expense is included in segment operating income as shown below: For the years ended December 31, 2024 2023 2022 (In thousands) Depreciation and amortization: Lindblad: Depreciation $ 48,345 $ 43,263 $ 41,080 Amortization 88 88 195 Land Experiences: Depreciation 2,131 1,641 946 Amortization 1,998 1,719 1,821 Total depreciation and amortization $ 52,562 $ 46,711 $ 44,042 F- 30 The following table presents the Company’s total assets, intangibles, net and goodwill by segment: As of December 31, 2024 2023 (In thousands) Total Assets: Lindblad $ 667,799 $ 675,432 Land Experiences 209,106 155,865 Total assets $ 876,905 $ 831,297 Intangibles, net: Lindblad $ 1,505 $ 1,592 Land Experiences 14,418 7,820 Total intangibles, net $ 15,923 $ 9,412 Goodwill: Lindblad $ - $ - Land Experiences 59,031 42,017 Total goodwill $ 59,031 $ 42,017 F-31