LINDBLAD EXPEDITIONS HOLDINGS INC

Previous wording

We currently operate a fleet of ten owned expedition ships and operate six seasonal charter vessels under the Lindblad Expeditions, LLC. (“Lindblad”) brand. Each expedition ship is fully equipped with state-of-the-art tools for in-depth exploration, and the majority of our expeditions involve travel to remote places, such as voyages to Alaska, the Arctic, Antarctic, the Galápagos Islands, Baja’s Sea of Cortez, the South Pacific, Costa Rica and Panama. We have a longstanding relationship with the National Geographic Society dating back to 2004, which is based on a shared interest in exploration, research, technology and conservation. This relationship, which was recently expanded and extended in November 2023 to the end of 2040 through a Brand License Agreement with National Geographic Partners, LLC (“National Geographic”), includes a co-selling, co-marketing and global branding arrangement whereby National Geographic promotes our offerings in its marketing campaigns across web-based, email, print and other marketing platforms and distributes our expeditions through the Disney Signature Experiences platform and our owned vessels carry the National Geographic name. We collaborate with National Geographic on voyage planning to enhance the guest experience by having National Geographic experts, including photographers, writers, marine biologists, naturalists, field researchers and film crews, join our expeditions. Guests are able to interact with these experts through lectures, excursions, dining and other experiences throughout their voyage.

Current wording

We currently operate a fleet of ten owned expedition ships and operate six seasonal charter vessels. Each expedition ship is fully equipped with state-of-the-art tools for in-depth exploration, and the majority of our expeditions involve travel to remote places, such as voyages to Alaska, the Arctic, Antarctic, the Galápagos Islands, Baja’s Sea of Cortez, the South Pacific, Costa Rica and Panama. We have a longstanding relationship with the National Geographic Society dating back to 2004, which is based on a shared interest in exploration, research, technology and conservation. This relationship, which was recently expanded and extended in November 2023 to the end of 2040 through a Brand License Agreement with National Geographic Partners, LLC (“National Geographic”), includes a co-selling, co-marketing and global branding arrangement whereby National Geographic promotes our offerings in its marketing campaigns across web-based, email, print and other marketing platforms and distributes our expeditions through the Disney Signature Experiences platform under the National Geographic-Lindblad Expeditions brand, and our owned vessels carry the National Geographic name. We collaborate with National Geographic on voyage planning to enhance the guest experience by having National Geographic experts, including photographers, writers, marine biologists, naturalists, field researchers and film crews, join our expeditions. Guests are able to interact with these experts through lectures, excursions, dining and other experiences throughout their voyage.

Previous wording

We operate two segments consisting of (i) the Lindblad segment, which consists of the operations of our Lindblad brand, and (ii) the Land Experiences segment, consisting of our Natural Habitat, DuVine, Off the Beaten Path and Classic Journeys brands.

Current wording

We operate two segments consisting of (i) the Lindblad segment, which consists of the operations of our Lindblad brand, and (ii) the Land Experiences segment, consisting of our Natural Habitat, DuVine, Off the Beaten Path, Classic Journeys and Wineland-Thomson Adventures brands.

Previous wording

During the six months ended June 30, 2024, we provided immersive expeditions to our guests across all our ships including voyages to Alaska, Antarctica, the Arctic, Baja California’s Sea of Cortez, British Columbia, the Channel Islands, the Galápagos Islands, Greece, Iceland, the Pacific Northwest, Patagonia, Spain, South Georgia and the Falkland Islands, Central America, Australia, New Zealand, the South Pacific and elsewhere. Our Land Experiences guests traveled on adventures to locations such as Costa Rica, the Amazon, Brazil’s Pantanal, Mexico, China, India, Sri Lanka, Borneo, Bhutan, Africa including Kenya, Tanzania, Botswana, South Africa and Madagascar, Portugal, Italy, the Cotswold’s, Croatia, France, Spain, Alaska, Yellowstone National Park and Canyons Southwest USA.

Current wording

During the nine months ended September 30, 2024, we provided immersive expeditions to our guests across all our ships including voyages to Alaska, Antarctica, the Arctic, Baja California’s Sea of Cortez, British Columbia, the Channel Islands, the Galápagos Islands, Greece, Greenland, Iceland, the Northwest Passage, the Pacific Northwest, Patagonia, Spain, South Georgia and the Falkland Islands, Central America, Australia, New Zealand, the South Pacific and elsewhere. Our Land Experiences guests traveled on adventures to locations such as our Alaska Bear Camps, Costa Rica, the Amazon, Brazil’s Pantanal, Mexico, China, Iceland, India, Sri Lanka, Borneo, Bhutan, Africa including Kenya, Tanzania, Botswana, South Africa and Madagascar, Portugal, Italy, the Cotswold’s, Croatia, France, Spain, Alaska, Yellowstone National Park and Canyons Southwest USA.

Previous wording

During June 2024, we announced 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 will expand our vessels and guest capacity in one of our core markets. We expect the acquisition to close January 2025.

Current wording

During June 2024, we announced 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 will expand our vessels and guest capacity in one of our core markets. We expect the acquisition to close in January 2025.

Previous wording

Following the end of the quarter, on July 31, 2024, we acquired Wineland-Thomson Adventures, Inc., and other related entities, (“WTA”) to further expand our land-based experiential travel offerings and increase our addressable market, for $24.0 million in cash and $6.0 million in Lindblad common stock, representing 682,593 shares. WTA consists of four adventure travel brands, including the respected Tanzania safari specialists Thomson Safaris, with more than 40 years of experience in the country, was founded on the principles of quality and integrity, with the goal of leading socially responsible and positively impactful light-treading safari tours. In addition to its adventure travel brands, the acquisition includes three leading Tanzania tour operators, the historic award-winning Gibb’s Farm lodge, an 80-acre sanctuary for the senses located near the Ngorongoro Crate, the industry-leading operator of Kilimanjaro treks Nature Discovery, Limited, which has more than 30 years of experience and is the recommended Tanzanian partner for over 20 specialist trekking and safari travel agents around the world, and Thomson Safaris Limited.

Current wording

On July 31, 2024, we acquired Wineland-Thomson Adventures, Inc., and other related entities, (“Wineland-Thomson Adventures”) to further expand our land-based experiential travel offerings and increase our addressable market, for $24.0 million in cash and $6.0 million in Lindblad common stock, representing 682,593 shares. Wineland-Thomson Adventures consists of four adventure travel brands, including the respected Tanzania safari specialists Thomson Safaris, with more than 40 years of experience in the country, was founded on the principles of quality and integrity, with the goal of leading socially responsible and positively impactful light-treading safari tours. In addition to its adventure travel brands, the acquisition includes three leading Tanzania tour operators, the historic award-winning Gibb’s Farm lodge, an 80-acre sanctuary for the senses located near the Ngorongoro Crater, the industry-leading operator of Kilimanjaro treks Nature Discovery, Limited, which has more than 30 years of experience and is the recommended Tanzanian partner for over 20 specialist trekking and safari travel agents around the world, and Thomson Safaris Limited.

Previous wording

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

Current wording

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

Previous wording

Traditionally, our Lindblad brand tour revenues are mildly seasonal, historically larger in the first and third quarters. The seasonality of our operating results fluctuates due primarily to our vessels being taken out of service for scheduled maintenance or drydocking, which is typically during nonpeak demand periods, in the second and fourth quarters. Our drydock schedules are subject to cost and timing differences from year-to-year due to the availability of shipyards for certain work, drydock locations based on ship itineraries, operating conditions experienced especially in the polar regions and the applicable regulations of class societies in the maritime industry, which require periodically more extensive reviews. Drydocking impacts operating results by reducing tour revenues and increasing cost of tours. Our Natural Habitat, Off the Beaten Path, DuVine and Classic Journeys brands are seasonal businesses, with the majority of Natural Habitat’s tour revenue recorded in the third and fourth quarters from its summer season departures and polar bear tours, while the majority of Off the Beaten Path, DuVine and Classic Journeys’ revenues recorded during the second and third quarters from their spring and summer season departures.

Current wording

Traditionally, our Lindblad brand tour revenues are mildly seasonal, historically larger in the first and third quarters. The seasonality of our operating results fluctuates due primarily to our vessels being taken out of service for scheduled maintenance or drydocking, which is typically during nonpeak demand periods, in the second and fourth quarters. Our drydock schedules are subject to cost and timing differences from year-to-year due to the availability of shipyards for certain work, drydock locations based on ship itineraries, operating conditions experienced especially in the polar regions and the applicable regulations of class societies in the maritime industry, which require periodically more extensive reviews. Drydocking impacts operating results by reducing tour revenues and increasing cost of tours. Our Natural Habitat, Off the Beaten Path, DuVine, Classic Journeys and Wineland-Thomson Adventures brands are seasonal businesses, with the majority of Natural Habitat’s tour revenue recorded in the third and fourth quarters from its summer season departures and polar bear tours, while the majority of Off the Beaten Path, DuVine and Classic Journeys’ revenues recorded during the second and third quarters from their spring and summer season departures, and the majority of Wineland-Thomson Adventures’ revenues being recorded during the third quarter from the height of their safari season tours.

Previous wording

Our consolidated results for the three and six months ended June 30, 2024 and 2023 are set forth below.

Current wording

Our consolidated results for the three and nine months ended September 30, 2024 and 2023 are set forth below.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2024 and 2023 —** Consolidated**

Current wording

Comparison of the Three and Nine Months Ended September 30, 2024 and 2023 —** Consolidated**

Previous wording

Total cost of tours for the six months ended June 30, 2024 increased $8.2 million, or 6%, to $157.9 million, compared to $149.7 million for the six months ended June 30, 2023. The Lindblad segment cost of tours decreased by $0.5 million. The Land Experiences segment increased $8.7 million, or 23%, primarily due to operating additional trips, higher costs and impact of foreign currency on operating expenses.

Current wording

Total cost of tours for the three months ended September 30, 2024 increased $8.9 million, or 9%, to $104.5 million, compared to $95.6 million for the three months ended September 30, 2023, primarily due to the inclusion of Wineland-Thomson Adventures within our Land Experiences segment, operating additional expeditions and trips, and higher operating costs. The Lindblad segment cost of tours increased by $0.6 million, or 1% and the Land Experiences segment increased $8.2 million, or 20%.

Previous wording

Total cost of tours for the three months ended June 30, 2024 increased $1.0 million, or 1%, to $78.6 million, compared to $77.7 million for the three months ended June 30, 2023. The Lindblad segment cost of tours decreased by $2.1 million, or 4%, partially due to lower port costs, resulting from cancelled voyages, and lower fuel expense. The Land Experiences segment increased $3.1 million, or 14%, primarily due to operating additional trips and higher operating costs.

Current wording

Total cost of tours for the nine months ended September 30, 2024 increased $17.1 million, or 7%, to $262.4 million, compared to $245.3 million for the nine months ended September 30, 2023, primarily due to the inclusion of Wineland-Thomson Adventures within our Land Experiences segment, operating additional trips, and higher operating costs. The Lindblad segment cost of tours increased by $0.1 million and the Land Experiences segment increased $17.0 million, or 22%.

Previous wording

General and administrative expenses for the three months ended June 30, 2024 increased $4.9 million, or 17%, to $34.1 million, compared to $29.2 million for the three months ended June 30, 2023. At the Lindblad segment, general and administrative expenses increased $1.6 million, or 8%, from the prior year period, primarily due to higher personnel costs, increased information technology costs and transaction-related costs. At the Land Experiences segment, general and administrative expenses increased $3.3 million, or 40%, primarily due to increased personnel costs related to operating additional trips, higher credit card commissions due to the strong booking environment, and transaction-related costs.

Current wording

General and administrative expenses for the three months ended September 30, 2024 increased $4.3 million, or 14%, to $34.3 million, compared to $30.0 million for the three months ended September 30, 2023, primarily due to higher personnel expense, credit card commissions due to a strong booking environment, transaction-related costs and the inclusion of the results of Wineland-Thomson Adventures. At the Lindblad segment, general and administrative expenses increased $1.5 million, or 7%, from the prior year period, and the Land Experiences segment increased $2.8 million, or 31%.

Previous wording

Selling and marketing expenses for the three months ended June 30, 2024 increased $3.1 million, or 21%, to $18.3 million, compared to $15.2 million for the three months ended June 30, 2023. At the Lindblad segment, selling and marketing expenses increased $2.0 million, or 17%, primarily due to higher royalties associated with the new National Geographic agreement and increased marketing spend to support future growth. At the Land Experiences segment, selling and marketing expenses increased $1.1 million, or 37%, primarily due to increased marketing spend to drive future bookings and higher commissions related to revenue growth.

Current wording

Selling and marketing expenses for the three months ended September 30, 2024 increased $5.6 million, or 29%, to $25.0 million, compared to $19.4 million for the three months ended September 30, 2023, primarily due to higher royalties associated with the new National Geographic agreement, increased marketing spend to support future growth, and the inclusion of the results of Wineland-Thomson Adventures. At the Lindblad segment, selling and marketing expenses increased $4.1 million, or 26%, and the Land Experiences segment increased $1.5 million, or 39%.

Previous wording

Selling and marketing expenses for the six months ended June 30, 2024 increased $5.2 million, or 15%, to $41.0 million, compared to $35.8 million for the six months ended June 30, 2023. At the Lindblad segment, selling and marketing expenses increased $4.3 million, or 15%, primarily due to higher royalties associated with the new National Geographic agreement and increased marketing spend to support future growth. At the Land Experiences segment, selling and marketing expenses increased $0.9 million, or 12%, primarily due to primarily due to increased marketing spend to drive future bookings.

Current wording

Selling and marketing expenses for the nine months ended September 30, 2024 increased $10.8 million, or 20%, to $66.0 million, compared to $55.2 million for the nine months ended September 30, 2023, primarily due to higher royalties associated with the new National Geographic agreement, increased marketing spend to support future growth, and the inclusion of the results of Wineland-Thomson Adventures. At the Lindblad segment, selling and marketing expenses increased $8.4 million, or 19%, and the Land Experiences segment increased $2.4 million, or 22%.

Previous wording

Depreciation and amortization expenses for the three months ended June 30, 2024 increased $2.3 million, or 20%, to $13.6 million, compared to $11.3 million for the three months ended June 30, 2023.

Current wording

Depreciation and amortization expenses for the three months ended September 30, 2024 increased $2.2 million, or 21%, to $12.7 million, compared to $10.5 million for the three months ended September 30, 2023.

Previous wording

Depreciation and amortization expenses for the six months ended June 30, 2024 increased $1.8 million, or 8%, to $24.9 million, compared to $23.1 million for the six months ended June 30, 2023.

Current wording

Depreciation and amortization expenses for the nine months ended September 30, 2024 increased $4.0 million, or 12%, to $37.7 million, compared to $33.7 million for the nine months ended September 30, 2023.

Previous wording

Other expense for the six months ended June 30, 2024, decreased $2.2 million to $23.1 million from $25.3 million for the six months ended June 30, 2023, due primarily to the May 2023 write-off of $3.9 million of deferred financing costs, fees and other expenses related to the repayment of our prior Export Credit Agreements, partially offset by a $0.8 million increase in interest expense and a $0.8 million increased loss on foreign exchange.

Current wording

Other expense for the nine months ended September 30, 2024, decreased $3.1 million to $34.2 million from $37.3 million for the nine months ended September 30, 2023, due primarily to the May 2023 write-off of $3.9 million of deferred financing costs, fees and other expenses related to the repayment of our prior Export Credit Agreements, partially offset by a $0.5 million increase in interest expense.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2024 and 2023 at the Lindblad Segment

Current wording

Comparison of the Three and Nine Months Ended September 30, 2024 and 2023 at the Lindblad Segment

Previous wording

Operating loss of $9.4 million for the three months ended June 30, 2024 decreased $1.6 million compared to a loss of $11.0 million for the three months ended June 30, 2023, as the increase in tour revenues was partially offset by higher operating expenses. Operating expenses included a decrease in cost of tours, offset by expenses associated with the increased revenue, including higher sales and marketing costs, primarily due to increased royalties associated with the new National Geographic agreement and increased marketing spend to support future growth, and higher general and administrative costs, primarily due to increased personnel costs, increased information technology costs and transaction-related costs.

Current wording

Operating income of $11.7 million for the three months ended September 30, 2024 increased $4.2 million compared to income of $7.5 million for the three months ended September 30, 2023, as the increase in tour revenues was partially offset by higher operating expenses. The increase in operating expenses was primarily due to expenses associated with increased revenue, including higher sales and marketing costs, driven by increased royalties associated with the new National Geographic agreement, and higher general and administrative costs, driven by higher credit card commissions, increased information technology costs and transaction-related costs.

Previous wording

During the six months ended June 30, 2024, we incurred an operating loss of $1.6 million compared to operating income of $1.1 million for the six months ended June 30, 2023, as the increase in tour revenues was more than offset by higher operating expenses. Operating expenses included expenses associated with increased revenue, including higher sales and marketing costs, primarily due to increased royalties associated with the new National Geographic agreement and marketing spend to drive future booking growth, and higher general and administrative costs, primarily due to increased personnel costs, higher credit card commissions due to the revenue and bookings growth, increased information technology costs and transaction-related costs.

Current wording

Operating income of $10.1 million for the three months ended September 30, 2024 increased $1.5 million compared to income of $8.6 million for the three months ended September 30, 2023. Increased revenue was partially offset by higher operating expenses, primarily due to expenses associated with increased revenue, including higher sales and marketing costs, driven by increased royalties associated with the new National Geographic agreement and marketing spend to drive future booking growth, and higher general and administrative costs, driven by increased personnel costs, higher credit card commissions due to the revenue and bookings growth, increased costs related to consulting, information technology and transaction-related costs.

Previous wording

Comparison of Three and Six Months Ended June 30, 2024 and** 2023** at the Land Experiences Segment

Current wording

Comparison of Three and Nine Months Ended September 30, 2024 and 2023 at the Land Experiences Segment

Previous wording

Operating income of $1.2 million for the three months ended June 30, 2024 decreased $1.3 million compared to $2.5 million for the three months ended June 30, 2023, as the increase in tour revenue was more than offset by higher operating and personnel costs, higher marketing spend to drive future growth, and transaction-related costs.

Current wording

Operating income of $17.8 million for the three months ended September 30, 2024 increased $4.8 million compared to $13.0 million for the three months ended September 30, 2023. The increase was driven by higher revenues from the existing businesses and the inclusion of the results of Wineland-Thomson Adventures since its acquisition, partially offset by higher operating and personnel costs due to operating additional tours, higher marketing spend to drive future growth, and transaction-related costs.

Previous wording

Operating income of $1.2 million for the six months ended June 30, 2024 decreased $1.7 million compared to $2.9 million for the six months ended June 30, 2023, as the increase in tour revenue was more than offset by higher operating and personnel costs related to operating additional departures, higher marketing spend to drive future growth, transaction-related costs, and the impact of foreign currency on operating expenses.

Current wording

Operating income of $19.0 million for the nine months ended September 30, 2024 increased $3.1 million compared to $15.9 million for the nine months ended September 30, 2023. The increase was driven by higher revenues from the existing businesses and the inclusion of the results of Wineland-Thomson Adventures since its acquisition, partially offset by higher operating and personnel costs related to operating additional departures, higher marketing spend to drive future growth, and transaction-related costs.

Previous wording

As of June 30, 2024, the Company had $168.1 million in unrestricted cash and cash equivalents and $49.5 million in restricted cash primarily related to deposits on future travel originating from U.S. ports and credit card reserves.

Current wording

As of September 30, 2024, the Company had $193.9 million in unrestricted cash and cash equivalents and $30.7 million in restricted cash primarily related to deposits on future travel originating from U.S. ports and credit card reserves.

Previous wording

As of June 30, 2024, we had $635.1 million in long-term debt obligations, including the current portion of long-term debt. We believe that our cash on hand and expected future operating cash inflows will be sufficient to fund operations, debt service requirements, and necessary capital expenditures for at least the next 12 months.

Current wording

As of September 30, 2024, we had $635.0 million in long-term debt obligations, including the current portion of long-term debt. We believe that our cash on hand and expected future operating cash inflows will be sufficient to fund operations, debt service requirements, and necessary capital expenditures for at least the next 12 months.

Previous wording

Sources and Uses of Cash for the Six Months Ended June 30, 2024 and 2023

Current wording

Sources and Uses of Cash for the Nine Months Ended September 30, 2024 and 2023

Previous wording

Net cash provided by operating activities was $62.6 million for the six months ended June 30, 2024 compared to $19.5 million for the same period in 2023. The $43.1 million increase is primarily due to increased cash received from guests for future travel.

Current wording

Net cash provided by operating activities was $90.7 million for the nine months ended September 30, 2024 compared to $35.3 million for the same period in 2023. The $55.4 million increase is primarily due to increased cash received from guests for future travel.

Previous wording

Net cash used in investing activities was $13.9 million for the six months ended June 30, 2024 compared to $0.4 million in cash provided by investing activities during the same period in 2023. 2024 primarily included capital expenditures on our vessels, while 2023 primarily included divesting of marketable securities, partially offset by capital expenditures on our vessels and our digital transformation initiatives.

Current wording

Net cash used in investing activities was $34.4 million for the nine months ended September 30, 2024 compared to $7.6 million in cash provided by investing activities during the same period in 2023. 2024 primarily included the acquisition of Wineland-Thomson Adventures and capital expenditures on our vessels, while 2023 primarily included capital expenditures on our vessels and our digital transformation initiatives, partially offset by divesting of marketable securities.

Previous wording

Net cash used in financing activities was $18.4 million for the six months ended June 30, 2024 compared to $61.5 million provided by financing activities for the same period in 2023. 2024 primarily included expenditures for the acquisition of an additional 9.95% of Natural Habitat and 5% of DuVine related to the respective puts and calls of the redeemable non-controlling interests, and income tax withholdings for stock-based compensation, while 2023 primarily included the issuance of $275.0 million of new senior notes which were used primarily to repay our prior export credit agreements*.*

Current wording

Net cash used in financing activities was $19.1 million for the nine months ended September 30, 2024 compared to $61.0 million provided by financing activities for the same period in 2023. 2024 primarily included expenditures for the acquisition of an additional 9.95% of Natural Habitat and 5% of DuVine related to the respective puts and calls of the redeemable non-controlling interests, and income tax withholdings for stock-based compensation, while 2023 primarily included the issuance of $275.0 million of new senior notes which were used primarily to repay our prior export credit agreements*.*

Previous wording

The 6.75% Notes, Revolving Credit Facility and 9.00% Notes contain covenants that, among other things, restrict our ability and the ability of our restricted subsidiaries to incur certain additional indebtedness and make certain dividend payments, distributions, investments and other restricted payments. These covenants are subject to a number of important exceptions and qualifications set forth in the 6.75% Notes, Revolving Credit Facility and 9.00% Notes. As of June 30, 2024, we were in compliance with the covenants currently in effect.

Current wording

The 6.75% Notes, Revolving Credit Facility and 9.00% Notes contain covenants that, among other things, restrict our ability and the ability of our restricted subsidiaries to incur certain additional indebtedness and make certain dividend payments, distributions, investments and other restricted payments. These covenants are subject to a number of important exceptions and qualifications. As of September 30, 2024, we were in compliance with the covenants currently in effect.

Previous wording

In August 2020, we issued and sold 85,000 shares of Series A Redeemable Convertible Preferred Stock, par value of $0.0001, (“Preferred Stock”) for $1,000 per share for gross proceeds of $85.0 million. As of March 31, 2024, 62,000 shares of Preferred Stock were outstanding. The Preferred Stock has senior and preferential ranking to our common stock. The Preferred Stock is entitled to cumulative dividends of 6.00% per annum, and for the first two years, the dividends were required to be paid-in-kind. After the second anniversary of the issuance date, the dividends may be paid-in-kind or be paid in cash at our option. During 2024, we thus far have continued to pay Preferred Stock dividends in-kind. At any time after the third anniversary of the issuance, we may, at our option, convert all, but not less than all, of the Preferred Stock into common stock if the closing price of shares of common stock is at least 150% of the conversion price for 20 out of 30 consecutive trading days. The Preferred Stock is convertible at any time, at the holder’s election, into a number of shares of our common stock equal to the quotient obtained by dividing the then-current accrued value by the conversion price of $9.50. At the six-year anniversary of the closing date, each investor has the right to request that we repurchase their Preferred Stock, and any Preferred Stock not requested to be repurchased shall be converted into our common shares equal to the quotient obtained by dividing the then-current accrued value by the conversion price. As of June 30, 2024, the outstanding Preferred Stock and accumulated dividends could be converted, at the option of the holders, into approximately 8.2 million shares of our common stock.

Current wording

In August 2020, we issued and sold 85,000 shares of Series A Redeemable Convertible Preferred Stock, par value of $0.0001, (“Preferred Stock”) for $1,000 per share for gross proceeds of $85.0 million. As of March 31, 2024, 62,000 shares of Preferred Stock were outstanding. The Preferred Stock has senior and preferential ranking to our common stock. The Preferred Stock is entitled to cumulative dividends of 6.00% per annum, and for the first two years, the dividends were required to be paid-in-kind. After the second anniversary of the issuance date, the dividends may be paid-in-kind or be paid in cash at our option. During 2024, we have continued to pay Preferred Stock dividends in-kind. At any time, we may, at our option, convert all, but not less than all, of the Preferred Stock into common stock if the closing price of shares of common stock is at least 150% of the conversion price for 20 out of 30 consecutive trading days. The Preferred Stock is convertible at any time, at the holder’s election, into a number of shares of our common stock equal to the quotient obtained by dividing the then-current accrued value by the conversion price of $9.50. At the six-year anniversary of the closing date, each investor has the right to request that we repurchase their Preferred Stock, and any Preferred Stock not requested to be repurchased shall be converted into our common shares equal to the quotient obtained by dividing the then-current accrued value by the conversion price. As of September 30, 2024, the outstanding Preferred Stock and accumulated dividends could be converted into approximately 8.3 million shares of our common stock.

Previous wording

We generally rely on a combination of cash flows provided by operations and the incurrence of additional debt to fund obligations. A vast majority of guest ticket receipts are collected in advance of the applicable expedition date. These advance passenger receipts remain a current liability until the expedition date, and the cash generated from these advance receipts is used interchangeably with cash on hand from other cash from operations. The cash received as advanced receipts can be used to fund operating expenses for the applicable future expeditions or otherwise, pay down debt, make long-term investments or any other use of cash. Traditionally we run a working capital deficit due primarily to a large balance of unearned passenger revenues. As of June 30, 2024, we had a working capital deficit of $99.0 million, and as of December 31, 2023, we had a working capital deficit of $74.7 million.

Current wording

We generally rely on a combination of cash flows provided by operations and the incurrence of additional debt to fund obligations. A vast majority of guest ticket receipts are collected in advance of the applicable expedition date. These advance passenger receipts remain a current liability until the expedition date, and the cash generated from these advance receipts is used interchangeably with cash on hand from other cash from operations. The cash received as advanced receipts can be used to fund operating expenses for the applicable future expeditions or otherwise, pay down debt, make long-term investments or any other use of cash. Traditionally we run a working capital deficit due primarily to a large balance of unearned passenger revenues. As of September 30, 2024, we had a working capital deficit of $98.3 million, and as of December 31, 2023, we had a working capital deficit of $74.7 million.