What changed in this filing

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Item 1A. Risk Factors

2026-03-11 compared with 2025-03-19 · 92 added, 92 removed, 374 unchanged (33% of the section changed)

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We forecast our future expense levels based on our operating plans and our estimates of future revenues.

In the future, depending on various factors, including but not limited to, market conditions, changes in the general economy and the travel industry, we may need to cut expenses to preserve profitability or, alternatively, we may find it necessary to significantly accelerate expenditures to meet increased demand or to maintain brand awareness.

We may also expand, upgrade and/or add technology and make investments in existing or new products that may impact our profitability.

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Our quarterly and annual operating results may fluctuate significantly in the future due to a variety of factors that could affect our revenues or our expenses in any particular period.

You should not rely on our quarter to quarter comparisons of our results of operations, as they are not considered an indication of future performance.

You should not rely on quarter to quarter comparisons of our results of operations, as they are not considered an indication of future performance.

Factors that may affect quarterly results include:

consumer refund rate;

level of investment in member acquisition, consumer refund rate;

mismatches between resource allocation and client demand due to difficulties in predicting client demand;

changes in general economic conditions (perceived or actual) that could impair consumer spending;

the magnitude and timing of marketing initiatives, including member acquisition and expansion efforts;

the introduction, development, timing, competitive pricing and market acceptance of our products and services and those of our competitors;

our ability to attract, hire and retain key personnel;

our ability to maintain merchant and member satisfaction such that we are able to continue to attract high-quality merchants and members;

our ability to maintain merchant and member satisfaction and continue to attract high-quality merchants and members;

our ability to manage our planned growth;

our ability to encourage our existing members to engage with our products and services and to convert them to revenue-generating users;

technical difficulties or system downtime affecting the Internet or our products and services;

and volatility of our operating results in new markets.

our ability to encourage member engagement with our products and services and convert non-paying members to Club Members;

our ability to encourage renewals and retention of Club Members;

and technical difficulties or system downtime.

We may significantly decrease our operating expenses in response to changes in general economic conditions, performance and/or declines in consumer demand.

We may significantly increase our operating expenses for a certain period if, among other reasons, we see a unique opportunity for a brand marketing campaign, if we find it necessary to respond to increased brand marketing by a competitor, or if we decide to accelerate our acquisition of new members or engagement of existing members.

We may significantly increase our operating expenses for a certain period if, among other reasons, we see a unique opportunity to accelerate our acquisition of new members or engagement of existing members.

If revenues fall below our expectations in any quarter and we are unable to quickly reduce our operating expenses in response, our operating results would be lower than expected and our stock price may fall.

Expansion of product offerings may result in additional costs that exceed revenue and may trigger additional stock price volatility.

In December of 2023, we announced that effective January 1, 2024, we would be moving to a paid membership model, with existing Travelzoo members grandfathered in through the end of the year.

In Q4 2024, we introduced additional member benefits, including but not limited to, Club Offers, early access to the Top 20, airport lounge access for delayed flights and a weekly giveaway.

In March of 2022, we announced the creation of our new Metaverse business, following a test and learn strategy, with plans for the launch of a subscription membership service that provides members with exclusive access to Metaverse travel experiences to follow.

On January 1, 2024, we moved to a paid membership model, with existing Travelzoo members grandfathered in through the end of the year.

Since then, we have introduced additional Club Member benefits.

In March of 2022, we announced the creation of our Metaverse business.

We plan to include Metaverse travel experiences as a benefit of Travelzoo membership in 2026.

The voucher product typically has a 14-day refund policy, but we may in the future alter or update the product, including refund windows, or invest in upgraded technology or new technology or products.

product modifications and expansions may result in an increase in costs in the near-term and an increase in cost structure in the long-term, which may be in excess of incremental revenue.

If our expanded product offerings are not embraced by our users or our advertising partners, or if we are unsuccessful in our efforts to monetize these initiatives, our business and financial results could be adversely affected.

If we cannot attract members to our product offerings, our financial results could be affected.

Such product modifications and expansions may result in an increase in costs in the near-term and an increase in cost structure in the long-term, which may be in excess of incremental revenue.

If we are unsuccessful in our efforts to monetize these initiatives, our business and financial results could be adversely affected.

If we cannot attract members to our product offerings or our advertisers do not embrace the changes in our product offerings, our financial results could be affected.

We can give no assurances that any of our product offerings will yield the benefits we expect and will not result in additional costs.

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Our Local Deals and Getaways products include the sale of vouchers directly to consumers to advertise promotional offers provided by merchants.

This format may require additional investments to maintain and grow the business including the hiring of additional sales personnel and additional spend on customer service, marketing, technology tracking systems and payment processing.

Our vouchers typically have a 14-day refundability period, but as of April 2022, also have a surcharge option, where members can pay an extra fee for full refundability of the voucher.

In some instances, we pre-purchase vouchers/hotel rooms in bulk.

The voucher format may require additional investments to maintain and grow the business.

Our vouchers typically have a 14-day refundability period and also have a surcharge option.

However, since before 2021, we have seen a general decline in demand for voucher products.

It is possible in the future that the Company may strategically move away from offering the surcharge or vouchers in general, or the Company may invest further in voucher offerings to expand them from a product perspective.

It is possible in the future that the Company may strategically move away from offering the surcharge option or vouchers in general, or the Company may invest further in voucher offerings to expand them from a product perspective.

While we are continually evolving our strategy, we may not always be successful in doing so and the demand for our vouchers may decline or refund rates may increase and may adversely impact revenues.

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Future events and changing market conditions may lead us to re-evaluate the assumptions reflected in the current forecast which may result in additional impairment charges, which could have a material adverse effect on our results of operation s.

Our business could be negatively affected by changes in search engine algorithms or other traffic-generating arrangements.

We utilize Internet search engines such as Google, principally through the purchase of travel-related keywords and through organic search, to generate additional traffic to our websites.

The number of users we attract from search engines to our websites is due in large part to how and where information from, and links to, our websites are displayed on search engine results pages.

The display, including rankings, of unpaid search results can be affected by a number of factors, many of which are not in our control and may change frequently.

Search engines frequently update and change the logic that determines the placement and display of results of a user’s search, such that the placement or cost of links to our websites can be negatively affected.

In addition, a significant amount of traffic is directed to our websites through our participation in pay-per-click and display advertising campaigns on search engines, travel metasearch engines, and Internet media properties.

Our business could be negatively affected by reliance on digital platforms and changes in search engine algorithms or other traffic-generating arrangements.

We rely heavily on our ability to attract and convert users into Club Members through our websites and mobile apps in a cost-effective manner.

We utilize digital advertising platforms (including social media), Internet search engines (through the purchase of travel-related keywords and through organic/algorithmic search) and other online sources to generate additional traffic to our websites.

These platforms increasingly incorporate generative AI features, such as AI-generated answers, assistants, and recommendations, that may satisfy user intent without directing users to our websites or may favor the platform's own or affiliated offerings.

In addition, changes in algorithms, ranking methodologies, user interfaces, access terms, pricing, or the placement of AI-generated content by these platforms could reduce the visibility of our services, increase member acquisition costs or decrease traffic.

A significant amount of traffic is directed to our websites through our participation in pay-per-click, pay-per-acquisition and display advertising campaigns on social media channels, search engines, travel metasearch engines, and Internet media properties.

Pricing and operating dynamics for these traffic sources can experience rapid change, both technically and competitively.

Also, we may scale back our expenditures at any time.

Moreover, a search or metasearch engine could alter its search algorithms or display of results, causing a website to place lower in search query results.

This would adversely affect our business and financial performance, potentially to a material extent.

We could also face a significant decrease in traffic to our websites and/or increased costs.

We could also face a significant decrease in traffic to our websites, decreased efficiencies and/or increased costs.

Additionally, in some of our contracts we or the other party have agreed to bidding restrictions.

If bidding restrictions are held to be illegal or otherwise unenforceable, our performance marketing costs may increase if bidding on affected key words (especially those related to us) becomes more expensive, which could adversely affect our marketing efficiency and results of operations.

If bidding restrictions are held to be illegal or otherwise unenforceable, our

performance marketing costs may increase if bidding on affected key words (especially those related to us) becomes more expensive, which could adversely affect our marketing efficiency and results of operations.

Trends in consumer use of mobile devices continue to create challenges.

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A number of European Union member states have taken steps to unilaterally introduce a services tax.

For example, effective in January 2021, Spain began taxing digital services at 3% of revenues for companies that operate globally and have a significant digital footprint in Spain.

Many questions remain regarding these digital services taxes.

It is not clear whether digital services taxes can be deducted for income tax purposes or whether there is potential for double taxation on the same transaction.

The interpretation and implementation of these taxes (especially if there is inconsistency in the application of these taxes across tax jurisdictions) could have a material adverse impact on our business, results of operations and cash flows.

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These examinations may lead to ordinary course adjustments or proposed adjustments to our taxes or our net operating income.

The Company’s use of the net operating losses (“NOLs”) of MTE or the NOLs themselves maybe audited by the Internal Revenue Service (“IRS”) or other taxing agency.

The Company’s use of the net operating losses (“NOLs”) of MTE or the NOLs themselves may be audited by the Internal Revenue Service (“IRS”) or other taxing agency.

The IRS may disagree with the Company’s position that the NOLs may be fully utilized, resulting in a whole or partial limitation on the use of the NOLs by the Company.

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To be successful, we must provide online marketing solutions that achieve broad market acceptance by travel and entertainment companies.

In addition, we must attract sufficient Internet users with attractive demographic characteristics to our products.

In addition, we must attract sufficient Internet users with attractive demographic characteristics to our products via channels, such as social media, that they are frequently using.

It is possible that we will be required to further adapt our business model and products in response to changes in the online advertising market or travel industry or if our current or planned business model is not successful.

For example, uncertainty surrounding the ability to travel would require us to adapt our product offerings to move away from our reliance on advertising fees and to provide consumers with additional flexibility in order to attract them to purchase.

If we do not adapt to these trends fully or quickly enough, we may lose revenue as consumer usage may decline.

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Further, the new revenue may cost more to generate, impacting our operating results.

If our advertisers do not meet the needs and expectations of our members, our business could suffer.

If our advertisers and content do not meet the needs and expectations of our members, our business could suffer.

Our business depends on our reputation for providing high-quality offers, and our brand and reputation may be harmed by actions taken by advertisers, partners, or merchants that are outside our control.

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Further, actions by third parties to block, impose restrictions on, or charge for the delivery of emails or other messages could also materially and adversely impact our business.

From time to time, Internet service providers block bulk email transmissions or otherwise

experience technical difficulties that result in our inability to successfully deliver emails or other messages to third parties.

From time to time, Internet service providers block bulk email transmissions or otherwise experience technical difficulties that result in our inability to successfully deliver emails or other messages to third parties.

In addition, our use of email and other messaging services to send communications about our website or other matters may result in legal claims against us, which if successful might limit or prohibit our ability to send emails or other messages.

Any disruption or restriction on the distribution of emails or other messages or any increase in costs would materially and adversely affect our revenue and profitability.

disruption or restriction on the distribution of emails or other messages or any increase in costs would materially and adversely affect our revenue and profitability.

In addition, the shift in our traffic originating from mobile devices accessing our services may decrease our members' willingness to use our services and could decrease their willingness to be an email member.

“Cookie” laws could negatively impact the way we do business.

A "cookie" is a text file that is stored on a user's computer or mobile device.

Cookies are common tools used by thousands of websites and mobile apps to, among other things, store or gather information (e.g., remember log-on details), market to consumers and enhance the user experience.

Cookies are valuable tools to improve the customer experience and increase conversion.

Many jurisdictions, including the European Union and more recently, California, have adopted regulations governing the use of cookies.

To the extent any such regulations require "opt-in" consent before certain cookies can be placed on a user's computer or mobile device, our ability to serve certain consumers in the manner we currently do might be adversely affected and our ability to continue to improve and optimize performance on our website might be impaired, either of which could negatively affect a consumer's experience using our services and our business, market share and results of operations.

Additionally, in January 2024, Google began the process of phasing out third-party cookies in its Chrome browser.

We expect that similar changes to Apple, Google or other browser or mobile platforms could occur, further limiting our ability to optimize performance for consumers.

“Cookie”, “pixel” and tracking technology laws could negatively impact the way we do business.

Cookies, pixels and other similar tracking technologies are common tools used by thousands of websites and mobile apps to, among other things, store or gather information (e.g., remember log-on details), market to consumers and enhance the user experience.

They are valuable tools to improve the customer experience and increase conversion.

Many jurisdictions, including the European Union and several U.S.

states, have adopted regulations governing the use of tracking technology.

To the extent any such regulations require "opt-in" consent before certain tracking technology may be placed on a user's computer or mobile device, our ability to serve certain consumers in the manner we currently do might be adversely affected and our ability to continue to improve and optimize performance on our website might be impaired, either of which could negatively affect a consumer's experience using our services and our business, market share and results of operations.

In addition, web and mobile browser developers, such as Apple, Microsoft or Google, have implemented and may continue to implement changes, including requiring additional user permissions, in their browser or device operating system that impair our ability to measure and improve the effectiveness of advertising on our platform.

For example, Apple has its Intelligent Tracking Prevention (“ITP”) feature in its Safari browser, which blocks some or all third-party cookies by default on mobile and desktop and has become increasingly restrictive over time.

Google has shifted its approach from completely phasing out third-party cookies to allowing users to make browser-level privacy choices, which could impact our advertising.

These web and mobile browser developers have also implemented and may continue to implement changes and restrictions in browser or device functionality that limit our ability to communicate with or understand the identity of our members.

Our reported reach may be higher than the actual reach and may not be representative of the number of persons who are active potential customers.

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however, these expiration dates may sometimes be extended on a case-by-case basis and final payment may not be due for up to a year after expiration.

However, if redemption activities accelerate, if our business is not profitable, and if our planned targets for cash flows from operations are not met, we may need to obtain additional financing in the future.

Additionally, planned investments in member acquisition require significant funds, but we believe that renewals in 2026 and beyond, as well as efficiencies we find in our acquisition activities allowing for a quick payback, should enable us to fund member acquisition with our own cash flow.

However, if redemption activities accelerate, if our marketing activities are no longer efficient, if our renewal rates are lower than expected, if our business is not profitable, or if our planned targets for cash flows from operations are not met, we may need to obtain additional financing in the future.

We may not be able to obtain financing on commercially reasonable terms, or at all, especially due to volatile market conditions.

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Specifically, our business is primarily dependent on the demand for online advertising from travel and entertainment companies.

Events like war, political instability or other conflicts (including the war in Ukraine and the Israel-Hamas war), terrorist attacks, mass shooting incidents, strikes, natural disasters and extreme weather situations (e.g., hurricanes, fires, droughts and floods), plane crashes, major public health events and logistical challenges such as widespread travel disruptions may have a negative impact on the travel industry and affect travelers’ behavior by limiting their ability or willingness to visit certain locations.

Events like war, political instability, international trade disputes or other conflicts (including the war in Ukraine, the

Israel-Hamas war and the recent Iran conflict), terrorist attacks, mass shooting incidents, strikes, natural disasters and extreme weather situations (e.g., hurricanes, fires, droughts and floods), plane crashes, major public health events and logistical challenges such as widespread travel disruptions may have a negative impact on the travel industry and affect travelers’ behavior by limiting their ability or willingness to visit certain locations.

In addition, advertisers may choose to limit advertising spend, which can adversely impact our business.

Macroeconomic factors and uncertainties such as tariffs, rising interest rates, persistently high inflation and/or recession fears

may have a negative impact on consumer behavior by reducing consumers’ ability or willingness to engage in discretionary spending on travel.

Macroeconomic factors and uncertainties such as the implementation of tariffs (by the United States and other governments), rising interest rates, persistently high inflation and/or recession fears may have a negative impact on consumer behavior by reducing consumers’ ability or willingness to engage in discretionary spending on travel (e.g., we have seen some reluctance from our Canadian members to travel to the United States).

In turn, that could have a negative impact on demand for our services.

Since the majority of our revenue is derived from members and advertisers within the United States, economic conditions in the United States have a greater impact on us.

We are not in a position to evaluate the net effect of these circumstances as many of these events cannot be reliably forecasted.

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We are subject to payments-related and fraud risks.

We accept payments for the sale of vouchers using a variety of methods, including credit cards and debit cards.

We accept payments for the sale of vouchers and for membership fees using a variety of methods, including credit cards and debit cards.

We pay interchange and other fees, which may increase over time, raise our operating expenses, and lower profitability.

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The cost of these changes may negatively impact our results of operations during the transition.

Increased focus on environmental, social, and governance ("ESG") responsibilities have and will likely continue to result in additional costs and risks, and may adversely impact our business.

There has been an increased focus on ESG practices of companies, including climate change, diversity, equity and inclusion, human capital management, data privacy and security, supply chains (including human rights issues), among other topics, by institutional, individual, and other investors, proxy advisory services, regulatory authorities, consumers, employees and other stakeholders.

However, we cannot predict what, when and how the new administration in the U.S.

may take actions to rollback or otherwise revise existing laws, rules or regulations focused on ESG.

Failure to meet environmental, social, and governance ("ESG") expectations or standards or achieve the Company's voluntary ESG-related goals may adversely impact our business, reputation, brand, results of operations, and/or financial condition.

There has been continued focus on the ESG practices of companies, including climate change, greenhouse gas emissions, diversity, equity and inclusion, human capital management, data privacy and security, supply chains (including human and civil rights issues), among other topics, by institutional, individual, and other investors, proxy advisory services, regulatory authorities, consumers, employees and other stakeholders.

This has resulted in expanding and increasingly complex expectations related to reporting, diligence, and disclosure on ESG topics.

In addition, companies that implement ESG practices may face pushback from ESG opponents, anti-ESG legislation or regulation, and negative public reactions.

These evolving expectations and our efforts and ability to respond to and manage these issues, provide updates on them, and establish and meet appropriate goals, commitments, and targets present numerous risks, any of which may be outside of our control or could have a material adverse impact on our business.

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Our international operations may result in operating losses and are subject to other material risks.

We may continue to invest in marketing as well as additional employees to support our operations (including licensing arrangements) o r develop new products, such as Travelzoo META or the Travelzoo paid membership, whic h may generate operating losses.

We may continue to invest in marketing as well as additional employees to support our operations (including licensing arrangements) o r develop new products, such as Travelzoo META or the Travelzoo club membership, whic h may generate operating losses.

Furthermore, operating losses in certain jurisdictions may not have any recognizable tax benefit.

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We may not be able to continue developing awareness of our brand names.

We believe that continuing to build awareness of the Travelzoo and Jack’s Flight Club brand names, and starting to build awareness of the Travelzoo META brand name, are critical to achieving widespread acceptance of our business.

We believe that continuing to build awareness of the Travelzoo, Travelzoo META, and Jack’s Flight Club brand names, are critical to achieving widespread acceptance of our business.

Brand recognition is a key differentiating factor among providers of online advertising opportunities.

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If we reduce our member acquisition costs, we cannot assure you that this will not adversely impact our ability to acquire new members.

If we are unable to acquire new members who purchase our membership and deals in numbers sufficient to grow our business, or if members cease to purchase, the revenue we generate may decrease and our operating results will be adversely affected.

If we are unable to acquire new members who purchase our membership and deals, and renew, in numbers sufficient to grow our business, or if members cease to purchase or renew, the revenue we generate may decrease and our operating results will be adversely affected.

If the level of usage by our members declines or does not grow as expected, we may suffer a decline in growth or revenue.

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The markets for the services we offer are intensely competitive, constantly evolving and subject to rapid change, and current and new competitors can launch new services at a relatively low cost.

We compete for advertising dollars with large Internet portal sites, such as Tripadvisor, that offer listings or other advertising opportunities to travel, entertainment and local businesses.

These companies have significantly greater financial, technical, marketing and other resources and larger advertiser bases.

They may be able to research, develop and deploy new products and technologies (including in the area of generative AI) faster than us.

We compete with companies like Groupon that sell vouchers for deals from local businesses such as spas, hotels and restaurants and tour operators for vacation packages.

We compete with search engines like Google that offer pay-per-click listings.

Additionally, certain search engines have increased their focus on acquiring or launching travel products, such as Google Flights.

We compete with newspapers, magazines and other traditional media companies that operate websites which provide online advertising opportunities.

We compete with travel metasearch engines like Kayak.com (owned by Booking Holdings) and online travel and entertainment deal publishers (including online restaurant reservation services).

We compete with large online travel agencies like the Expedia Group and Booking Holdings, as well as thousands of individual travel agencies around the world, that also offer advertising placements and hotel booking platforms and capture consumer interest.

We also compete with companies that offer similar services to Jack’s Flight Club, like Going (formerly Scott’s Cheap Flights) and Dollar Flight Club.

There has been substantial consolidation of the global travel industry and we believe this trend will continue.

Some of our competitors are large and have significant resources and substantial international operations.

Such companies have also completed acquisitions to further consolidate the industry.

There has also been a proliferation of new channels and platforms through which accommodation providers can offer reservations.

For example, companies such as Airbnb (which acquired HotelTonight), HomeAway and VRBO (which are both owned by Expedia Group) offer services providing alternative accommodation property owners, particularly individuals, an online place to list their alternative accommodations, which compete with our hotel offers.

Further, meta-search services may lower the cost for new companies to enter the market by providing a distribution channel without the cost of promoting the new entrant's brand to drive consumers directly to its website.

There has also been substantial consolidation of the global travel industry and we believe this trend will continue.

Many of our competitors have significantly greater financial, technical, marketing and other resources and larger advertiser bases.

They may be able to research, develop and deploy new products and technologies faster than us, including developing or deploying generative AI-powered travel planning and booking tools that could reduce reliance on our services.

We may not be able to keep up with these rapid changes and our ability to integrate and develop new and evolving technologies will require increased financial and personnel investments that could have an adverse impact on our operations unless and until we achieve expected return on these investments.

Our future success will depend on our ability to adapt to rapidly changing technologies, to adapt our services to evolving industry standards and local preferences, and to continually innovate and improve the performance, features, and reliability of our services in response to competitive service offerings and the evolving demands of the marketplace.

Some competitors offer a variety of online services, such as food delivery, shopping, gaming or search services, many of which are used by consumers more frequently than online travel services.

As a result, a competitor that has established other, more frequent, online interactions with consumers may be able to more easily acquire customers for its travel services than we can.

If any of these platforms are successful in offering similar services to consumers who would otherwise use our platforms or if we are unable to offer our services to consumers within these super-apps, our customer acquisition efforts could be less effective and our customer acquisition costs could increase, either of which would harm our business and results of operations.

We also have seen that some competitors will accept lower margins, or even negative margins, to attract attention and acquire new members.

If competitors engage in group buying initiatives in which merchants receive a higher percentage of the face value than we currently offer, we may be forced to pay a higher percentage of the face value than we currently offer, which may reduce our revenue.

If any of these platforms are successful in offering similar services to consumers who would otherwise use our platforms or if we are unable to offer our services to consumers within these super-apps, our member acquisition efforts could be less effective and our member acquisition costs could increase, either of which would harm our business and results of operations.

We expect to face additional competition as other companies enter the online advertising market.

Competition could result in reduced margins on our services, loss of market share or less use of Travelzoo by advertisers and consumers.

Competition could result in reduced margins on our services, loss of market share or less use of Travelzoo by advertisers and members.

If we are not able to compete effectively with current or future competitors as a result of these and other factors, our business could be materially adversely affected.

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failure to successfully develop the acquired business;

liability for activities of the acquired company;

liability for activities of the

acquired company;

litigation or other claims in connection with the acquired company;

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For example, the business of MTE which Travelzoo acquired in December 2022 will require management resources to grow strategically and we cannot guarantee that MTE as part of Travelzoo will be able to source Metaverse travel experiences as successfully as anticipated.

The pre-purchasing of vouchers and hotel inventory could create additional risks or liabilities for our business.

We sometimes pre-purchase vouchers or hotel inventory (in the form of credit amounts, vouchers or gift cards) in bulk from clients and partners (e.g., hotel or spa partners).

In those scenarios, we are not acting as the agent of the client, but rather as the principal, meaning the risk of selling the inventory is on the Company.

The pre-purchased vouchers are considered “inventory” in our books until sold to and purchased by Travelzoo members.

The vouchers are usually only redeemable with the client during a specified period and the Company does allow refunds in accordance with our policies.

If we are unable to sell all of these pre-purchased vouchers, we may be required to impair that inventory and our operating results could be adversely affected.

A significant impairment would have an adverse effect on our business, financial condition and results of operations.

Because we recognize revenue from subscriptions for our club membership over the term of the subscription, downturns or upturns may not be immediately reflected in our operating results.

We generally recognize membership revenue ratably over the terms of their agreements, which are typically one year.

As a result, most of the revenue we report in each quarter is the result of subscription agreements entered into during previous quarters.

Consequently, a decline in new or renewed subscriptions in any one quarter may not be reflected in our revenue results for that quarter.

Any such decline, however, will negatively affect our revenue in future quarters.

Accordingly, the effect of significant downturns or declines in conversion or retention rates, may not be fully apparent or reflected in our results of operations until future periods.

Our subscription model also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as revenue from new customers must be recognized over the applicable subscription term.

Risks Related to Legal Uncertainty

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Federal Trade Commission and certain states (including California and Minnesota) have introduced or are considering laws aimed at eliminating or regulating "junk fees" that require us to include all mandatory, non-governmental fees and charges in the prices we display, even though these are set by our partners.

The costs of compliance, which may arise in the future as a result of changes in these laws and regulations or in their interpretation, could individually or in the aggregate make the Company’s services less attractive, delay the introduction of new products, or cause the Company to change or limit its business practices or incur more costs to comply or defend itself.

products, or cause the Company to change or limit its business practices or incur more costs to comply or defend itself.

We have implemented policies and procedures designed to ensure compliance, but there can be no assurance that our employees, contractors, partners, or agents will not violate such laws and regulations or the Company’s policies and procedures.

In particular, we cannot predict what, when and how the new administration in the U.S.

In particular, we cannot predict what, when and how the current administration in the U.S.

may take actions to rollback or otherwise revise existing laws or regulations, or the ultimate impact such changes may have on our results of operations.

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These risks are elevated in certain jurisdictions, where our liability for such third-party actions may be less clear and we may be less protected.

In addition, we could incur significant costs in investigating and defending such claims, even if we ultimately are not found liable.

In addition, we

could incur significant costs in investigating and defending such claims, even if we ultimately are not found liable.

We are subject to risks associated with information disseminated through our websites and applications, including content that is produced by our editorial staff and errors or omissions related to our product offerings.

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Outside parties may attempt to fraudulently induce disclosure of sensitive information in order to gain access to our secure networks or to take over customer accounts.

A party that is able to

circumvent our security systems could steal proprietary or other sensitive information.

A party that is able to circumvent our security systems could steal proprietary or other sensitive information.

A security breach at any third-party supplier could result in negative publicity and exposure.

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For these purposes, financial institutions are broadly defined to include money services businesses such as providers of prepaid access cards.

Examples of requirements imposed include customer identification and verification programs, suspicious activity monitoring and reporting, record retention policies and transaction reporting.

We do not believe that we are a financial institution subject to these regulations based, in part, upon the closed loop nature and other characteristics of vouchers and our role with respect to the distribution of vouchers to members.

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Under the final rule, providers of closed loop vouchers, such as those offered through the Local Deals and Getaways , would only be subject to registration if the vouchers exceed $2,000 in total value or if they are sold in aggregate amounts exceeding $10,000 to any single person in one day.

Should the $2,000 limit be exceeded or should more than $10,000 in aggregate vouchers be sold to any individual person (sales to businesses for resale or distribution are excluded) then we may be deemed either a seller or provider of prepaid access subject to regulation.

Should these limits be exceeded, then we may be deemed either a seller or provider of prepaid access subject to regulation.

In the event that we become subject to these requirements or any other anti-money laundering laws or regulations imposing obligations on us as a money services business, our regulatory compliance costs to meet these obligations would likely increase which could reduce our net income.

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Our internal control over financial reporting may not be effective which could impact our business.

We are unable to predict if we may have future ineffective controls and procedures, if we will be able to effectively and efficiently remediate any such deficiencies and whether these deficiencies or the corresponding remediation efforts could result in a negative impact to our business.

The SEC approved amendments in 2018 that raised the cap for status as a “smaller reporting company” .

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However, we may be obligated to do so if we were no longer a smaller reporting company.

We are unable to predict if we may have future ineffective controls and procedures, if we

will be able to effectively and efficiently remediate any such deficiencies and whether these deficiencies or the corresponding remediation efforts could result in a negative impact to our business.

We may be unable to protect our registered trademark or other proprietary intellectual property rights and may face liability from intellectual property litigation.

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Azzurro is the Company’s largest shareholder, and as of December 31, 2025, holds approximately 33.5% of the Company's outstanding shares.

Azzurro previously held greater than 50% ownership until approximately 2018 and again from late 2022 until Q2 2023 and should Azzurro purchase additional shares or should the Company repurchase additional shares of its common stock, Azzurro’s ownership percentage could increase again, potentially above 50%, resulting in the Company being a controlled company again.

in the Company being a controlled company again.

The Company already has in place applicable corporate governance processes and procedures necessary for a controlled company to ensure independence (e.g., board of directors with majority independent directors, committees comprised solely of independent directors, etc.).

Holger Bartel, the Company’s Global Chief Executive Officer, is Ralph Bartel’s brother and holds less than 1% of t he Company’s outstanding shares.

Holger Bartel, the Company’s Global Chief Executive Officer, is Ralph Bartel’s brother and did not hold any of the Company’s outstanding shares as of December 31, 2025.

It is possible that the interests of Azzurro may conflict with those of the Company or its other stockholders in the future.

As a result of Azzurro’s

ownership interests and voting power, they could be in a position to influence significant corporate actions.

As a result of Azzurro’s ownership interests and voting power, they could be in a position to influence significant corporate actions.

Our other stockholders will therefore have limited influence and control on matters requiring stockholder approval and this significant ownership position could discourage others from initiating any potential merger or takeover that may otherwise be beneficial to Travelzoo stockholders.

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 1A. Risk Factors