LINDBLAD EXPEDITIONS HOLDINGS INC

Previous 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.

Current wording

We currently operate a fleet of 12 owned expedition ships and operate seven 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 through 2040, includes a co-selling, co-marketing and global branding arrangement whereby our owned vessels carry the National Geographic name, and National Geographic sells our expeditions through its internal travel division. We collaborate with National Geographic on voyage planning to enhance the guest experience by having National Geographic experts, including photographers, writers, marine biologists, naturalists, field researchers and film crews, join our expeditions. Guests have the ability to interact with these experts through lectures, excursions, dining and other experiences throughout their voyage.

Previous wording

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

Current wording

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

Previous wording

Natural Habitat, Inc. (“Natural Habitat”) provides eco-conscious expeditions and nature-focused, small-group experiences 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.

Current wording

Natural Habitat, Inc. (“Natural Habitat”) provides eco-conscious expeditions and nature-focused, small-group experiences 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”) for more than 20 years to offer conservation travel, which is sustainable travel that contributes to the protection of nature and wildlife.

Previous wording

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

Current wording

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

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, Classic Journeys and Wineland-Thomson Adventures 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, Off the Beaten Path, DuVine, Classic Journeys brands and the Thomson Group.

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 in January 2025.

Current wording

On January 9, 2025, we completed the acquisition of Torcatt Enterprises Limitada, a holding company that owns and operates two vessels in the Galápagos Islands, for $16.0 million in cash. The acquisition expands our vessels and guest capacity in one of our core markets.

Previous wording

General and administrative expenses include the cost of shoreside vessel support, reservations and other administrative functions, including salaries and related benefits, credit card commissions, professional fees and rent.

Current wording

General and administrative expenses include the cost of shoreside vessel support, reservations and other administrative functions, including salaries and related benefits, professional fees and rent.

Previous wording

Adjusted EBITDAis net income (loss) excluding depreciation and amortization, net interest expense, other income (expense), income tax (expense) benefit, (gain) loss on foreign currency, (gain) loss on transfer of assets, reorganization costs, and other supplemental adjustments. Other supplemental adjustments include certain non-operating items such as stock-based compensation, executive severance costs, the debt refinancing costs, acquisition-related expenses and other non-recurring charges. We believe Adjusted EBITDA, when considered along with other performance measures, is a useful measure as it reflects certain operating drivers of the business, such as sales growth, operating costs, selling and administrative expense, and other operating income and expense. We believe Adjusted EBITDA helps provide a more complete understanding of the underlying operating results and trends and an enhanced overall understanding of our financial performance and prospects for the future. Adjusted EBITDA is not intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income as it does not take into account certain requirements, such as unearned passenger revenues, capital expenditures and related depreciation, principal and interest payments, and tax payments. Our use of Adjusted EBITDA may not be comparable to other companies within the industry.

Current wording

Adjusted EBITDAis net income (loss) excluding depreciation and amortization, net interest expense, other income (expense), income tax (expense) benefit, (gain) loss on foreign currency, (gain) loss on transfer of assets, reorganization costs, and other supplemental adjustments. Other supplemental adjustments include certain non-operating items such as stock-based compensation, executive severance costs, debt refinancing costs, acquisition-related expenses and other non-recurring charges. We believe Adjusted EBITDA, when considered along with other performance measures, is a useful measure as it reflects certain operating drivers of the business, such as sales growth, operating costs, selling and administrative expense, and other operating income and expense. We believe Adjusted EBITDA helps provide a more complete understanding of the underlying operating results and trends and an enhanced overall understanding of our financial performance and prospects for the future. Adjusted EBITDA is not intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income as it does not take into account certain requirements, such as unearned passenger revenues, capital expenditures and related depreciation, principal and interest payments, and tax payments. Our computation and use of Adjusted EBITDA may not be comparable to other companies within the industry.

Previous wording

Adjusted Net Cruise Costrepresents Net Cruise Cost adjusted for non-GAAP other supplemental adjustments which include certain non-operating items such as stock-based compensation, the National Geographic fee amortization, and acquisition-related expenses.

Current wording

Adjusted Net Cruise Costrepresents Net Cruise Cost adjusted for non-GAAP other supplemental adjustments which include certain non-operating items such as stock-based compensation, and acquisition-related expenses.

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, 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.

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 to our vessels being taken out of service for scheduled maintenance or drydocking, which is typically during nonpeak demand periods, generally 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 more extensive reviews periodically. Drydocking impacts operating results by reducing tour revenues and increasing cost of tours. Our Natural Habitat, Off the Beaten Path, DuVine, Classic Journeys brands and Thomson Group are seasonal businesses, with the majority of Natural Habitat’s tour revenue recorded in the third and fourth quarters from its summer season departures and polar bear tours, the majority of Off the Beaten Path and DuVine's revenues are recorded during the second and third quarters from their spring and summer season departures, and the majority of Thomson Group’s revenues being recorded during the third quarter from the height of their safari season tours, while Classic Journeys’ revenue is somewhat less seasonal with the majority of revenues recorded during their second, third and fourth quarters.

Previous wording

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

Current wording

Our consolidated results for the three months ended March 31, 2025 and 2024 are set forth below.

Previous wording

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

Current wording

Comparison of the Three Months Ended March 31, 2025 and 2024 —** Consolidated**

Previous wording

Tour revenues for the three months ended September 30, 2024 increased $30.0 million, or 17%, to $206.0 million, compared to $176.0 million for the three months ended September 30, 2023. Of the $30.0 million increase, $12.5 million is due to a 7% increase in guest nights sold and a 2% increase in guests traveled, $8.7 million is due to an increase in pricing, and includes the results of Wineland-Thomson Adventures since its acquisition on July 31, 2024. The Lindblad segment tour revenues increased by $12.5 million, or 12%, and the Land Experiences segment increased $17.5 million, or 26%.

Current wording

Tour revenues for the three months ended March 31, 2025 increased $26.1 million, or 17%, to $179.7 million, compared to $153.6 million for the three months ended March 31, 2024. Of the $26.1 million increase, we realized a $6.7 million increase due to a 3% increase in guest nights sold and a 7% increase in guests traveled for the continuing operations, a $13.2 million increase due to the change in mix of itineraries and trips and pricing, and the inclusion of the operations of Thomson Group for the quarter, which was acquired in July 2024. The Lindblad segment tour revenues increased by $12.8 million, or 11%, and the Land Experiences segment increased $13.3 million, or 38%, as Company revenues grew primarily due to increased guest nights sold, an increase of guests traveling for the continuing operations, operating additional trips and higher pricing and the inclusion of the results of Thomson Group.

Previous 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%.

Current wording

Total cost of tours for the three months ended March 31, 2025 increased $8.4 million, or 10%, to $92.8 million, compared to $84.5 million for the three months ended March 31, 2024, primarily due to operating additional voyages and trips and higher costs. The Lindblad segment cost of tours increased by $2.4 million, or 4%, and the Land Experiences segment increased $6.0 million, or 27%, including the operations of Thomson Group.

Previous 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%.

Current wording

General and administrative expenses for the three months ended March 31, 2025 increased $5.5 million, or 20%, to $32.7 million, compared to $27.2 million for the three months ended March 31, 2024. The increase was primarily related to higher personnel costs and stock-based compensation expense. At the Lindblad segment, general and administrative expenses increased $2.4 million, or 13%, from the prior year period, and at the Land Experiences segment, general and administrative expenses increased $3.1 million, or 37%, including the operations of Thomson Group.

Previous 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%.

Current wording

Selling and marketing expenses for the three months ended March 31, 2025 increased $5.5 million, or 24%, to $28.2 million, compared to $22.8 million for the three months ended March 31, 2024, primarily due to higher commissions associated with increased revenues and increased marketing spend to support future growth. At the Lindblad segment, selling and marketing expenses increased $3.8 million, or 20%, and at the Land Experiences segment, selling and marketing expenses increased $1.7 million, or 45%, including the operations of Thomson Group.

Previous wording

Selected information for our reportable segments is below. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Current wording

Selected information for our reportable segments is below. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Percentages that are not meaningful to the change are noted as NM in the table.

Previous wording

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

Current wording

Comparison of the Three Months Ended March 31, 2025 and 2024 at the Lindblad Segment

Previous wording

Tour revenues for the three months ended September 30, 2024 increased $12.5 million, or 12%, to $121.3 million, compared to $108.7 million for the three months ended September 30, 2023. Of the $12.5 million increase, $8.0 million is related to a 7% increase in guest nights sold and $4.5 million is related to a 4% increase in revenue per guest nights sold as compared to the prior year period.

Current wording

Tour revenues for the three months ended March 31, 2025 increased $12.8 million, or 11%, to $131.1 million, compared to $118.3 million for the three months ended March 31, 2024. Of the $12.8 million increase, $3.9 million is related to a 3% increase in guest nights sold and $8.9 million is related to a 7% increase in revenue per guest nights sold as compared to the prior year period. Net yield per available guest night increased 25% to $1,521 from $1,219 in 2024, reflecting the higher pricing and a 13-basis point increase in occupancy compared with the same period in 2024.

Previous 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.

Current wording

Operating income was $8.4 million for the three months ended March 31, 2025, an increase of $0.6 million compared to $7.8 million for the three months ended March 31, 2024, as the increase in tour revenues was partially offset by higher operating expenses. Operating expenses included higher cost of tours, higher sales and marketing costs, primarily due to increased royalties associated with the National Geographic agreement increased marketing spend to support future growth, and higher general and administrative costs, primarily due to increased personnel costs and higher stock-based compensation expense.

Previous wording

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

Current wording

Comparison of Three Months Ended March 31, 2025 and** 2024** at the Land Experiences Segment

Previous wording

Tour revenues for the nine months ended September 30, 2024 increased $21.0 million, or 7%, to $332.6 million, compared to $311.7 million for the nine months ended September 30, 2023. Of the $21.0 million increase, $13.2 million is related to a 4% increase in guest nights sold and $7.8 million is related to a 2% increase in revenue per guest nights sold as compared to the prior year period.

Current wording

Tour revenues for the three months ended March 31, 2025 increased $13.3 million, or 38%, to $48.6 million compared to $35.3 million for the three months ended March 31, 2024, including the results of Thomson Group, acquired in July 2024. Of the $13.3 million increase, $2.8 million is related to a 7% increase in the number of guests traveled for the continuing operations, $4.3 million is related to a 12% increase in revenue per guest as compared to the prior year period due to a change in itineraries, destinations and pricing, and the inclusion of the results of Thomson Group.

Previous 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.

Current wording

Operating income for the three months ended March 31, 2025 was $2.2 million compared to $0.1 million for the three months ended March 31, 2024, as the increase in tour revenue was partially offset by higher operating and personnel costs related to operating additional departures, higher marketing spend to drive future growth and the inclusion of the results of Thomson Group.

Previous wording

The following table outlines the reconciliation of net income (loss) to consolidated Adjusted EBITDA. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Current wording

The following table outlines the reconciliation of net income (loss) to Adjusted EBITDA on a consolidated basis and for each reportable segment. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Previous wording

Reconciliation of Operating Income to Adjusted EBITDA Lindblad Segment

Current wording

Reconciliation of Operating Income to Adjusted EBITDA—** Segments**

Previous 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.

Current wording

As of March 31, 2025, the Company had $188.9 million in unrestricted cash and cash equivalents and $46.4 million in restricted cash primarily related to deposits on future travel originating from U.S. ports and credit card reserves.

Previous 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.

Current wording

As of March 31, 2025, 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 as well as availability under our Revolving Credit Facility 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 Nine Months Ended September 30, 2024 and 2023

Current wording

Sources and Uses of Cash for the Three Months Ended March 31, 2025 and 2024

Previous 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.

Current wording

Net cash provided by operating activities was $48.4 million for the three months ended March 31, 2025 compared to $43.9 million for the same period in 2023. The $4.5 million increase is primarily due to improved operating results.

Previous 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.

Current wording

Net cash used in investing activities was $29.0 million for the three months ended March 31, 2025 compared to $6.5 million in cash used in investing activities during the same period in 2023. 2025 primarily included the acquisition of Torcatt Enterprises Limitada and capital expenditures on our vessels, while 2024 primarily included capital expenditures on our vessels and our digital transformation initiatives.

Previous 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*.*

Current wording

Net cash used in financing activities was $0.3 million for the three months ended March 31, 2025 compared to $0.6 million for the same period in 2024. 2025 and 2024 primarily included income tax withholdings for stock-based compensation*.*

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. As of September 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 set forth in the 6.75% Notes, Revolving Credit Facility and 9.00% Notes. As of March 31, 2025, 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 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.

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, 2025, 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 March 31, 2025, the outstanding Preferred Stock and accumulated dividends could be converted, at the option of the holders, into approximately 8.6 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 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.

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 March 31, 2025, we had a working capital deficit of $124.7 million, and as of December 31, 2024, we had a working capital deficit of $114.0 million.

Previous wording

Our preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. For a detailed discussion of our Critical Accounting Policies, please see our 2023 Annual Report, where we have discussed those policies and estimates that we believe are critical and require the use of complex judgment in their application. There have been no significant changes to our accounting policies from those disclosed in the 2023 Annual Report.

Current wording

Our preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. For a detailed discussion of our Critical Accounting Policies, please see our 2024 Annual Report, where we have discussed those policies and estimates that we believe are critical and require the use of complex judgment in their application. Except for the presentation of credit card fee expenses discussed in Note 1 to the financial statements, there have been no significant changes to our accounting policies from those disclosed in the 2024 Annual Report.