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Item 9A. Controls and Procedures

2023-03-31 compared with 2022-03-31 · 46 added, 32 removed, 69 unchanged (53% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Based on management’s evaluation (with the participation of the Company’s Chief Executive Officer (CEO) and Chief Accounting Officer (CAO)), as of December 31, 2021, our CEO and CAO have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in U.S.

Securities and Exchange Commission (SEC) rules and forms, and that such information is accumulated and communicated to management, including our CEO and CAO, as appropriate, to allow timely decisions regarding required disclosure.

Disclosure controls and procedures are defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to mean controls and other procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

At the end of the period covered by this Annual Report on Form 10-K an evaluation was carried out under the supervision of and with the participation of our management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operations of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act).

Based on this evaluation, our CEO and CFO concluded that certain of our disclosure controls and procedures were not effective as of December 31, 2022, related to financial reporting and disclosure of non-routine, non-recurring, unusual and complex transactions, as further described below.

However, after giving full consideration to the material weakness, management believes that our consolidated financial statements included in this Annual Report on Form 10-K have been prepared in accordance with US GAAP.

Our CEO and CFO have certified that, based on such officer’s knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report.

Material Weakness

We have identified a material weakness in our internal control over financial reporting related to having sufficient resources for the accounting for certain non-routine, non-recurring, unusual or complex transactions within our financial statement closing and reporting process.

Specifically, the Company did not have internal financial staff with sufficient specific expertise to ensure complete and timely financial reporting and disclosures related to technical and complex accounting transactions.

Remediation Plan

To remediate a material weakness in our internal controls over financial reporting in case of any future non-routine, non-recurring, unusual and complex transactions, we have decided to take the following planned measures:

• Engage sufficient outside subject matter experts and specialists to ensure the complete and timely accounting and financial reporting for certain non-routine, unusual or complex transactions and technical matters, where appropriate.

In some cases, multiple experts may be required.

• Maintain adequate internal qualified personnel to properly supervise and review the information provided by outside subject matter experts and specialists.

We cannot assure you that these planned measures will be sufficient to remediate the material weakness or to avoid potential future material weaknesses.

We are unable to predict the time when we will again have a non-routine, non-recurring, unusual and complex transaction.

The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures.

Accordingly, any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurances.

In addition, 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.

We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but there can be no assurance that such improvements will be sufficient.

Changes in Internal Control Over Financial Reporting

4 unchanged sentences

Management based its assessment on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2021 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external reporting purposes in accordance with generally accepted accounting principles.

Based on this assessment, management has concluded that our internal control over financial reporting was not effective as of December 31, 2022 for the reasons discussed above.

This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm on our internal control over financial reporting because we are a smaller reporting company and are not subject to auditor attestation requirements under applicable SEC rules.

/s/ HOLGER BARTEL

1 unchanged sentence

Global Chief Executive Officer

Chief Accounting Officer

/s/ WAYNE LEE

Chief Financial Officer

March 31, 2023

Other Information

Stock Repurchase Agreement with Holger Bartel

Travelzoo from time to time, engages in share repurchases and on March 27, 2021, the Company entered into a Stock Repurchase Agreement (the “SRA”) with Holger Bartel to repurchase an aggregate of 100,000 shares of the Company’s common stock at a price of $15.83 per share.

The SRA provides that the purchase price is based on the 10-day volume weighted average price calculated using the VWAP function on Bloomberg, from the dates of March 15, 2021 through and including March 26, 2021, less a 5% discount.

The aggregate purchase price of $1.6 million was paid on the first business day following the execution of the SRA.

Prior to the execution of the SRA and because Mr.

Bartel is an executive officer of the Company, the Company’s board of directors delegated to its compensation committee, which consists of independent and disinterested directors, the exclusive power and authority to determine whether any potential transaction to acquire shares from Mr.

Bartel was advisable, fair to and in the best interests of the Company and its stockholders, other than Mr.

In connection with its determination, the compensation committee engaged independent legal counsel and an independent financial advisor and unanimously approved the SRA.

The SRA contains customary terms for transactions of this type, including, but not limited to, representations and warranties made by the Company and Mr.

The foregoing description of the SRA does not purport to be complete and is qualified in its entirety by reference to the SRA, a copy of which is attached as Exhibit 10.11 to this Form 10-K, and which is incorporated by reference herein.

Not applicable.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Directors, Executive Officers and Corporate Governance

14 unchanged sentences

Consolidated Statements of Operations 51

Consolidated Statements of Comprehensive Income (Loss) 52

Consolidated Statements of Comprehensive Income 52

Consolidated Statements of Stockholders’ Equity (Deficit) 53

5 unchanged sentences

See attached Exhibit Index

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Chief Accounting Officer

March 30, 2022

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Lisa Su as his or her attorney-in-fact, with full power of substitution, for him or her in any and all capacities, to sign any and all amendments to this Form 10-K, with all exhibits and any and all documents required to be filed with respect thereto, with the Securities and Exchange Commission or any regulatory authority, granting unto such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in order to effectuate the same as fully to all intents and purposes as he or she might or could do if personally present, hereby ratifying and confirming all that such attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signatures Title(s) Date

/s/ RALPH BARTEL Chairman of the Board of Directors March 30, 2022

/s/ HOLGER BARTEL Global Chief Executive Officer March 30, 2022

Holger Bartel

/s/ LISA SU Chief Accounting Officer March 30, 2022

/s/ CHRISTINA SINDONI CIOCCA Director March 30, 2022

Christina Sindoni Ciocca

/s/ CARRIE LIQUN LIU Director March 30, 2022

Carrie Liqun Liu

/s/ MARY REILLY Director March 30, 2022

/s/ BEATRICE TARKA Director March 30, 2022

Beatrice Tarka

EXHIBIT INDEX

31 unchanged sentences

† Furnished herewith

Form 10-K Summary

/s/ WAYNE LEE

Chief Financial Officer

March 31, 2023

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Wayne Lee as his or her attorney-in-fact, with full power of substitution, for him or her in any and all capacities, to sign any and all amendments to this Form 10-K, with all exhibits and any and all documents required to be filed with respect thereto, with the Securities and Exchange Commission or any regulatory authority, granting unto such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in order to effectuate the same as fully to all intents and purposes as he or she might or could do if personally present, hereby ratifying and confirming all that such attorney-in-fact and agent or his substitute or substitutes, may lawfully do or cause to be done.

Signatures Title(s) Date

/s/ CHRISTINA SINDONI CIOCCA Chair of the Board of Directors March 31, 2023

Christina Sindoni Ciocca

/s/ HOLGER BARTEL Global Chief Executive Officer March 31, 2023

Holger Bartel

/s/ WAYNE LEE Chief Financial Officer March 31, 2023

/s/ VOLODYMYR CHEREVKO Director March 31, 2023

Volodymyr Cherevko

/s/ MICHAEL KARG Director March 31, 2023

/s/ CARRIE LIQUN LIU Director March 31, 2023

Carrie Liqun Liu

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures