TRAVELZOO 10-K

Item 8. Financial Statements and Supplementary Data TRAVELZOO INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of KPMG LLP - Independent Registered Public Accounting Firm (PCAOB ID: 185 ) 39 Consolidated Balance Sheets 41 Consolidated Statements of Operations 42 Consolidated Statements of Comprehensive Income 43 Consolidated Statement of Stockholders' Equity (Deficit) 45 Consolidated Statements of Cash Flows 45 Notes to Consolidated Financial Statements 46 38 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Travelzoo: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Travelzoo and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Sufficiency of audit evidence over revenue related to advertising fees As discussed in Notes 1(b) and 11 to the consolidated financial statements, the Company enters into contracts with advertisers to promote their respective advertisements through the Travelzoo website and emails. Advertising revenue is recognized by the Company upon the delivery of the emails to its members or each time a user clicks on the respective advertisements. For the year ended December 31, 2025, the Company recorded $78.4 million in advertising and commerce revenues, which included advertising fee revenues from email newsletters and cost-per-click advertising. We identified the evaluation of the sufficiency of audit evidence over revenue related to advertising fees for email newsletters and cost-per-click advertising as a critical audit matter. The Company’s reliance on its information technology (IT) system to capture the number of emails and clicks for revenue recognition required a heightened level of auditor judgment due to the extensive automation of the process. Our audit procedures required the involvement of IT professionals with specialized skills 39 and knowledge and auditor judgment was required to determine the nature and extent of procedures and to evaluate audit evidence obtained. The following are the primary procedures we performed to address this critical audit matter. We applied auditor judgment to determine the nature and extent of procedures to be performed. We involved IT professionals with specialized skills and knowledge, who assisted in evaluating the design and testing the operating effectiveness of certain internal controls over the Company’s revenue process, including general IT controls and IT application controls over the tracking of emails and clicks recorded. We performed a software-assisted data analysis to test relationships among certain revenue transactions. For a selection of transactions, we assessed the recorded revenue by comparing the amounts recognized for consistency to underlying documentation, including contract terms, number of emails or clicks, and subsequent cash, if applicable. We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of such evidence. /s/ KPMG LLP We have served as the Company’s auditor since 2023. New York, New York March 11, 2026 40 TRAVELZOO CONSOLIDATED BALANCE SHEETS (In thousands, except par value) December 31, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 10,007 $ 17,064 Accounts receivable, net of allowance of $ 1,222 and $ 1,612 as of December 31, 2025 and 2024, respectively 10,723 12,825 Prepaid income taxes 1,364 736 Prepaid expenses and other 1,302 1,148 Total current assets 23,396 31,773 Deposits and other 166 374 Deferred tax assets 4,202 3,380 Restricted cash 756 675 Operating lease right-of-use assets 4,047 5,655 Property and equipment, net 231 423 Intangible assets, net 1,450 1,498 Goodwill 10,944 10,944 Total assets $ 45,192 $ 54,722 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 7,761 $ 6,162 Merchant payables 11,665 16,294 Accrued expenses and other 3,926 3,404 Deferred revenue 8,728 6,545 Operating lease liabilities 1,811 2,472 Income tax payable 279 1,619 Total current liabilities 34,170 36,496 Long-term tax liabilities 9,260 7,851 Long-term operating lease liabilities 4,184 5,646 Other long-term liabilities — 376 Total liabilities 47,614 50,369 Stockholders’ equity (deficit): Preferred stock, $ 0.01 par value per share ( 5,000 shares authorized; none issued) — — Common stock, $ 0.01 par value ( 20,000 shares authorized as of December 31, 2025 and 2024, respectively; 10,932 shares issued and outstanding as of December 31, 2025 and 11,836 shares issued and outstanding as of December 31, 2024) 109 118 Additional paid-in capital — — Tax indemnification ( 9,537 ) ( 9,537 ) Retained earnings 7,243 14,284 Accumulated other comprehensive loss ( 5,331 ) ( 5,327 ) Total Travelzoo stockholders’ equity (deficit) ( 7,516 ) ( 462 ) Non-controlling interest 5,094 4,815 Total stockholders’ equity (deficit) ( 2,422 ) 4,353 Total liabilities and stockholders’ equity (deficit) $ 45,192 $ 54,722 See accompanying notes to consolidated financial statements. 41 TRAVELZOO CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Year Ended December 31, 2025 2024 Revenues $ 91,719 $ 83,902 Cost of revenues 18,076 10,469 Gross profit 73,643 73,433 Operating expenses: Sales and marketing 45,267 34,470 Product development 2,551 2,407 General and administrative 18,921 18,058 Total operating expenses 66,739 54,935 Operating income 6,904 18,498 Other income, net 753 588 Income before income taxes 7,657 19,086 Income tax expense 2,679 5,404 Net income 4,978 13,682 Net income attributable to non-controlling interest 279 118 Net income attributable to Travelzoo $ 4,699 $ 13,564 Net income per share—basic $ 0.42 $ 1.08 Net income per share —diluted $ 0.41 $ 1.06 Shares used in per share calculation from operations—basic 11,180 12,594 Shares used in per share calculation from operations—diluted 11,477 12,852 See accompanying notes to consolidated financial statements. 42 TRAVELZOO CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) Year Ended December 31, 2025 2024 Net income $ 4,978 $ 13,682 Other comprehensive income (loss): Foreign currency translation adjustment ( 4 ) ( 720 ) Total comprehensive income $ 4,974 $ 12,962 See accompanying notes to consolidated financial statements. 43 TRAVELZOO CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (In thousands) Common Stock Treasury Stock Additional Paid-In Capital Tax Indemnification Note Receivable from Shareholder Retained Earnings Accumulated Other Comprehensive Loss Non-Controlling interest Total Stockholders’ Equity (Deficit) Shares Amount Balances, December 31, 2023 13,575 $ 136 $ — $ 439 $ ( 9,537 ) $ ( 1,753 ) $ 19,508 $ ( 4,607 ) $ 4,697 $ 8,883 Stock-based compensation expense — — — 1,646 — — — — — 1,646 Repurchase of common stock (1) — — ( 19,094 ) — — — — — — ( 19,094 ) Retirement of treasury stock ( 1,888 ) ( 18 ) 19,094 ( 288 ) ( 18,788 ) — — Exercise of stock options and taxes paid for net share settlement 149 — — ( 1,797 ) — — — — — ( 1,797 ) Proceeds from Note receivable from shareholder — — — — 1,753 — — 1,753 Foreign currency translation adjustment — — — — — — — ( 720 ) — ( 720 ) Net income—Travelzoo — — — — — — 13,564 — 118 13,682 Balances, December 31, 2024 11,836 118 — — ( 9,537 ) — 14,284 ( 5,327 ) 4,815 4,353 Stock-based compensation expense — — — 1,446 — — — — — 1,446 Repurchase of common stock (1) — — ( 13,091 ) — — — — — — ( 13,091 ) Retirement of treasury stock ( 912 ) ( 9 ) 13,091 ( 1,342 ) — — ( 11,740 ) — — — Exercise of stock options and taxes paid for net share settlement 8 — — ( 104 ) — — — — — ( 104 ) Foreign currency translation adjustment — — — — — — — ( 4 ) — ( 4 ) Net income—Travelzoo — — — — — — 4,699 — 279 4,978 Balances, December 31, 2025 10,932 $ 109 $ — $ — $ ( 9,537 ) $ — $ 7,243 $ ( 5,331 ) $ 5,094 $ ( 2,422 ) (1) Includes a 1 % excise tax applicable to share repurchases. See accompanying notes to consolidated financial statements. 44 TRAVELZOO CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2025 2024 Cash flows from operating activities: Net income $ 4,978 $ 13,682 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 305 907 Stock-based compensation 1,446 1,646 Deferred income tax ( 558 ) ( 518 ) Net foreign currency effect ( 215 ) ( 33 ) Provision for accounts receivable and refund reserves 182 40 Changes in operating assets and liabilities: Accounts receivable 2,374 ( 145 ) Prepaid income taxes ( 617 ) ( 107 ) Prepaid expenses and other 181 950 Accounts payable 1,473 1,716 Merchant payables ( 5,184 ) ( 4,057 ) Accrued expenses and other 214 ( 282 ) Deferred revenue 2,015 4,556 Income tax payable ( 1,379 ) 857 Other liabilities 446 1,888 Net cash provided by operating activities 5,661 21,100 Cash flows from investing activities: Purchases of property and equipment ( 65 ) ( 177 ) Net cash used in investing activities ( 65 ) ( 177 ) Cash flows from financing activities: Repurchase of common stock ( 12,964 ) ( 18,929 ) Proceeds from payment of promissory note — 1,753 Exercise of stock options, net of taxes paid for net share settlement of equity awards ( 104 ) ( 1,797 ) Net cash used in financing activities ( 13,068 ) ( 18,973 ) Effect of exchange rate changes on cash and cash equivalents 495 ( 599 ) Net increase (decrease) in cash, cash equivalents and restricted cash ( 6,977 ) 1,351 Cash, cash equivalents and restricted cash at beginning of year 17,740 16,389 Cash, cash equivalents and restricted cash at end of year $ 10,763 $ 17,740 Supplemental disclosure of cash flow information: Cash paid (refund) for income taxes, net $ 3,835 $ 1,943 Right-of-use assets obtained in exchange for lease obligations—operating leases $ 321 $ 1,273 Cash paid for amounts included in the measurement of lease liabilities $ 3,459 $ 3,368 Non-cash investing and financing activities: Accrued excise tax for share repurchases $ 129 $ 165 See accompanying notes to consolidated financial statements. 45 TRAVELZOO NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1: Basis of Presentation and Summary of Significant Accounting Policies (a) The Company and Basis of Presentation Travelzoo® (including its subsidiaries and affiliates, the “Company” or “we”), the club for travel enthusiasts, is a global Internet media company. We reach 30 million travelers. Club Members, who pay a membership fee, receive Club Offers negotiated and rigorously vetted by our deal experts around the globe. Our relationships with thousands of top travel suppliers give us access to irresistible deals. Our club and its benefits are built around the lifestyle of a modern travel enthusiast. Our most important products and services are the Travelzoo website (travelzoo.com), the Travelzoo iOS and Android apps, the Top 20® email newsletter, Standalone email newsletters, the Travelzoo Network , and Jack's Flight Club ® . Our Travelzoo website and newsletters include Local Deals and Getaways listings that allow our members to purchase vouchers for offers from local businesses such as spas, hotels and restaurants. Jack's Flight Club is a subscription service that provides members with information about exceptional airfares. Travelzoo membership has historically been free, however, beginning in 2024, we introduced an annual membership fee of $ 40 (or local equivalent) for new members in the United States, Canada, United Kingdom and Germany, with the 2024 annual fee waived for existing members as of December 31, 2023. On January 1, 2026, we increased the annual membership fee to $ 50 for new members in the United States only. For existing members, the new pricing will apply from the next renewal of their membership after February 1, 2026. Jack’s Flight Club subscription options are quarterly, semi-annually, and annually. We recognize subscription revenues ratably over the respective subscription periods. We also license Travelzoo products, services and intellectual property to licensees in (a) Australia, New Zealand, and Singapore and (b) Japan and South Korea, in each case, where the Company is entitled to quarterly royalty payments based on a percentage of net revenue. The Company recognized $ 68,000 and $ 71,000 in royalties in 2025 and 2024, respectively. Under the licensing agreements, Travelzoo's existing members in the applicable territories continue to be owned by the Company. Through Travelzoo META, we plan to include Metaverse travel experiences as a benefit of Travelzoo club membership in 2026, allowing us to utilize and leverage all we have learned and developed over the past few years for Travelzoo META for the benefit of our Club Members. Jack’s Flight Club In January 2020, Travelzoo acquired a 60 % interest in JFC Travel Group Co. (“Jack’s Flight Club”), which operates Jack’s Flight Club , a subscription service that provides members with information about exceptional airfares. Jack’s Flight Club’s revenues are generated by subscription fees paid by members. APAC Licensing Model Travelzoo currently has license agreements covering Australia, New Zealand and Singapore, as well as Japan and South Korea. The license agreement for Australia, New Zealand and Singapore provides the licensee exclusive rights to use Travelzoo products, services and intellectual property in Australia, New Zealand and Singapore in exchange for quarterly royalty payments based upon net revenue over a 5 year term, with an option to renew. The Company recognized royalties of $ 38,000 and $ 41,000 from the licensee for the years ended December 31, 2025 and 2024, respectively. 46 The license agreement for Japan and South Korea provides the licensee exclusive rights to use Travelzoo products, services, and intellectual property in exchange for quarterly royalty payments based on net revenue over a 5 year term, with an option to renew. The Company recognized royalties of $ 30,000 from the licensee for the both years ended December 31, 2025 and 2024, respectively. Going Concern In accordance with the requirements of Accounting Standards Update (“ASU”) 2014-15, “Presentation of Financial Statements Going Concern (ASU 2014-15)”, and ASC 205, “Presentation of Financial Statements”, the Company is responsible to evaluate at each reporting period, including interim periods, whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations. In its evaluation for this report, management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and conditional and unconditional obligations due within one year following the date of issuance of this Annual Report on Form 10-K. The Company believes it has the ability to meet its obligations for at least one year from the date of issuance of this Form 10-K. Accordingly, the accompanying consolidated financial statements have been prepared assuming it will continue as a going concern and contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Ownership Ralph Bartel, who founded Travelzoo, is the sole beneficiary of the Ralph Bartel 2005 Trust, which is the controlling shareholder of Azzurro. Azzurro is the Company’s largest shareholder, and as of December 31, 2025, holds approximately 33.5 % of the Company's outstanding shares. Holger Bartel, the Company's Global CEO, is Ralph Bartel's brother and did not hold any of the Company's outstanding shares as of December 31, 2025 . Basis of Presentation and Consolidation The consolidated financial statements have been prepared in conformity with generally accepted accounting principles ("GAAP") in the United States ("U.S."). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. For our consolidated financial statements as of and for the period ended December 31, 2025 , we evaluated subsequent events and transactions for potential recognition or disclosure through the date that we filed this Form 10-K with the Securities and Exchange Commission (SEC). Management has made a number of estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with GAAP. Significant estimates included in the consolidated financial statements and related notes include income taxes, stock-based compensation, loss contingencies, purchase price allocation for business combinations, and projections and assumptions used in related impairment assessments. Actual results could differ materially from those estimates. (b) Revenue Recognition The Company follows Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” (Topic 606), under which revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The Company's revenues consist of (1) advertising and commerce revenues, derived from and generated in connection with purchases made by Travelzoo members, (2) membership fees and (3) other. Advertising and Commerce Revenues Advertising revenues are generated from the publishing of travel and entertainment deals on the Travelzoo website, in Top 20 email newsletters, in Standalone email newsletters and through the Travelzoo Network. The Company also generates transaction-based commerce revenues in the form of commissions from the sale of vouchers (our Local Deals and Getaways offerings), operation of our hotel booking platform and limited offerings of vacation packages and sales of pre-purchased vouchers or hotel inventory. Specifically, for fixed-fee website advertising, the Company recognizes revenues ratably over the contracted placement period. For Top 20 email newsletters and other email products, the Company recognizes revenues when the emails are delivered to its members. For cost-per-click advertising, whereby an advertiser pays the Company when a user clicks on an ad (typically 47 served on Travelzoo properties or Travelzoo Network partner properties), the Company recognizes revenues each time a user clicks on the ad. For transaction-based advertising revenues, including from products such as Local Deals and Getaways prepaid voucher sales, hotel platform bookings, vacation package sales and sales of pre-purchased vouchers or hotel inventory, the Company evaluates whether it is acting as principal (thereby reporting revenue on a gross basis) versus agent (thereby reporting revenue on a net basis). Accordingly, the Company reports transaction-based advertising revenues on a net basis, as third-party suppliers are primarily responsible for fulfilling the underlying good or service, which the Company does not control prior to its transfer to the customer. For Local Deals and Getaways prepaid voucher sales, the Company earns a fee for acting as an agent on the sale, while vouchers can subsequently be redeemed for goods or services with third-party merchants. Commission revenues are, accordingly, presented net of amounts due to third-party merchants for fulfilling the underlying goods and services, and net of estimated future refunds to consumers, as the terms of the vouchers permit. Certain merchant contracts allow the Company to retain the proceeds from unredeemed vouchers. With these contracts, the Company estimates the value of vouchers that will ultimately not be redeemed and records the estimate as revenues in the same period. In certain scenarios, the Company will 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, the Company is not acting as the agent, but rather as the principal. The pre-purchased vouchers are recorded as inventory, within prepaid expenses and other on the condensed consolidated balance sheet until sold to and purchased by Travelzoo members, at which point, the amount for which the vouchers were sold to Travelzoo members is recognized fully as revenue and the amount for which the vouchers were purchased from the hotel or spa partners is recognized as cost of revenues. Commission revenues generated from bookings on our hotel platform are recognized ratably over the periods of guest stays, net of an allowance for estimated cancellations, based upon historical patterns. For bookings of non-cancelable reservations, where the Company’s performance obligation is deemed to be completed upon the successful booking, the Company records commission revenue at such time. In certain instances, the Company’s contracts with customers may include multiple performance obligations, whereby the Company allocates revenues to each performance obligation based on its standalone selling price. The Company determines standalone selling prices based on overall pricing objectives, taking into consideration the type of goods or services, geographical region of the customers, rate card pricing and customary discounts. Standalone selling prices are generally determined based on the prices charged to customers when the good or service is sold separately. The Company relies upon certain practical expedients and exemptions provided for in Topic 606. The Company expenses sales commissions when incurred, as the amortization period would be one year or less, which are recorded in sales and marketing expenses. In addition, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less, and contracts for which it recognizes revenues at the amount to which it has the right to invoice for services performed. Membership Fee Revenues Membership fee revenues are generated from subscription fees paid by Travelzoo and Jack's Flight Club members. We recognize subscription revenues ratably over the applicable subscription periods. Travelzoo membership has historically been free, however, on January 1, 2024, Travelzoo introduced an annual membership fee of $ 40 (or local equivalent) for new members in the United States, Canada, United Kingdom and Germany. The 2024 annual fee was waived for existing members as of December 31, 2023. Other Revenues Other revenues include licensing fees and revenues generated from MTE, including but not limited to sales from the existing retail business of MTE. Deferred Revenues 48 Deferred revenue primarily consists of deferred membership fees, customer prepayments and undelivered Company performance obligations related to contracts comprising multiple performance obligations. At December 31, 2025, deferred revenue was $ 8.7 million of which $ 2.2 million was for Jack's Flight Club, and $ 6.5 million was for Travelzoo North America and Travelzoo Europe. At December 31, 2024, deferred revenue was $ 6.5 million , of which $ 2 million was for Jack's Flight Club, and $ 4.5 million was for Travelzoo North America and Travelzoo Europe. (c) Reserve for Refunds to Members; Merchant Payables The Company estimates and records a reserve for future refunds on member purchases of Local Deals and Getaways vouchers, at the time revenue is recorded. We consider various factors such as historical refund timeframes from dates of sale, reasons for refunds, time periods remaining until expiration, changes in refund procedures and estimates of redemptions and breakage. Should any of these factors change, the estimates made by management will also change, which could impact the level of our future reserve for refunds to members. Specifically, if the financial condition of our merchant partners, on behalf of whom vouchers are sold, were to deteriorate, affecting their ability to provide the goods or services to our members, additional reserves for refunds to members may be required and may adversely affect future revenues as the liability is recorded against revenue. As of December 31, 2025 , t he expiration dates of unexpired vouchers are through December 2026; provided, that expiration dates may sometimes be extended on a case-by-case basis and final payments to merchants upon expiration may not be due for up to a year later. As of December 31, 2025, the Company had approximately $ 2.9 million of unredeemed vouchers that had been sold, representing the Company’s commission earned. The Company estimated and recorded a refund reserve of $ 188,000 for these unredeemed vouchers as of December 31, 2025, which is recorded as a reduction of revenues on the consolidated statements of operations and accrued expenses and other on the consolidated balance sheet. As of December 31, 2024 , the Company had approximatel y $ 4.1 million of unredeemed vouchers that had been sold, representing the Company’s commission earned, and estimated and recorded a refund reserve of $ 144,000 for these unredeemed vouchers as of December 31, 2024, as a reduction of revenues on the consolidated statements of operations and accrued expenses and other on the consolidated balance sheet. If our judgments regarding estimated member refunds are inaccurate, reported results of operations could differ from amounts previously accrued. Merchant payables of $ 11.7 million as of December 31, 2025 is recorded on the consolidated balance sheet, representing amounts payable to merchants by the Company for vouchers sold but not redeemed. (d) Business Combinations The purchase price of an acquisition is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired and liabilities assumed, such excess is allocated to goodwill. The Company determines the estimated fair values after review and consideration of relevant information, including discounted cash flows, quoted market prices and estimates made by management. The Company records the net assets and results of operations of an acquired entity from the acquisition date and adjusts the preliminary purchase price allocation, as necessary, during the measurement period of up to one year after the acquisition closing date, as it obtains more information as to facts and circumstances existing at the acquisition date impacting asset valuations and liabilities assumed. Acquisition-related costs are recognized separately from the acquisition and are expensed as incurred. (e) Identifiable intangible assets Upon acquisition, identifiable intangible assets are recorded at fair value and are carried at cost less accumulated amortization. Identifiable intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. The carrying values of all intangible assets are reviewed for impairment annually, and whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. (f) Goodwill Goodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible and intangible assets. Goodwill is evaluated for impairment annually, and whenever events or changes in circumstances indicate its carrying value may not be recoverable. The Company performs an impairment test by comparing the book value of the reporting unit to the fair value of the reporting unit utilizing a combination of valuation techniques, including an income approach (discounted cash flows) and market approach (guideline company method). The Company performed its annual impairment testing as of October 31, 2025 and 2024 and no impairment charges were identified in connection with the annual impairment tests. 49 (g) Allowance for Expected Losses The Company records a provision for credit losses based on its historical experience with uncollectible amounts due and a detailed assessment of accounts receivable and allowance for expected credit losses. In estimating the provision for credit losses, management considers the age of the accounts receivable, historical provisioning and write-offs, creditworthiness of the debtor, the economic conditions of the debtor’s industry and general economic conditions, among other factors. Should any of these factors change, estimates made by management may also change, which could impact the level of future provisioning for credit losses. Specifically, if the financial condition of our clients were to deteriorate, affecting their ability to make payments, additional provisioning for credit losses may be required. (h) Advertising Costs Advertising costs are expensed as incurred. Online advertising is expensed as incurred over the period the advertising is displayed. Advertising costs for Travelzoo North America and Travelzoo Europe amounted to $ 10 million and $ 2.9 million for the years ended December 31, 2025 and 2024, respectively. Advertising costs for Jack's Flight Club were $ 1.8 million and $ 1 million for the years ended December 31, 2025 and 2024, respectively. Advertising costs for New Initiatives were $ 0 and $ 25,000 for the years ended December 31, 2025 and 2024, respectively. (i) Operating Leases The Company determines if an arrangement contains a lease at inception. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized based on the present value of future minimum lease payments due over the lease term, at commencement date. The lease payments used to determine the operating lease assets may include lease incentives and stated rent increases. The Company does not include options to extend or terminate until it is reasonably certain that an option will be exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company uses its incremental borrowing rate based on the information available at the commencement date in determining lease liabilities, as the Company’s leases generally do not provide an implicit rate. The Company elected not to recognize leases with an initial term of 12 months or less on its consolidated balance sheets. The Company’s leases are reflected in operating lease ROU assets, operating lease liabilities and long-term operating lease liabilities on our accompanying consolidated balance sheet as of December 31, 2025. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company also has a lease agreement for real estate which it subleases to a third party. The Company recognizes sublease income in Other income (expense), net on a straight-line basis over the sublease term in its consolidated statements of operations. (j) Stock-Based Compensation The Company accounts for employee stock option grants under the fair value method, which requires stock-based compensation to be estimated using the fair value on the date of grant, employing an option pricing model. The value of the portion of the award that is expected to vest is recognized as expense over the related employees’ requisite service periods in the Company’s consolidated statements of operations. See Note 9 to the consolidated financial statements for a further discussion of stock-based compensation. (k) Foreign Currency All foreign subsidiaries use the local currency of their respective countries as their functional currency. Assets and liabilities are translated into U.S. dollars at exchange rates prevailing at the balance sheet dates. Revenues, costs and expenses are translated into U.S. dollars at average exchange rates for the period. Gains and losses resulting from translation are recorded as a component of accumulated other comprehensive income (loss). Realized gains and losses from foreign currency transactions are recognized as gain or loss on foreign currency in the consolidated statements of operations. Total foreign currency transaction net gains of $ 235,000 and $ 129,000 for 2025 and 2024, respectively, are included in Other income (loss), net in the Company’s consolidated statements of operations. (l) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are recognized for deductible temporary differences, along with net operating loss carryforwards and credit carryforwards, if it is more likely than not that the tax benefits will be realized. To the extent a deferred tax asset cannot be recognized under the preceding criteria, valuation allowances are established. Deferred tax 50 assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. Significant judgment is required in evaluating the Company's uncertain tax positions and determining the Company's provision for income taxes. Although the Company believes it has adequately reserved for its uncertain tax positions, no assurance can be given that the final outcomes of these matters will not be different. The Company adjusts its reserves in light of changing facts and circumstances, such as the progress or closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate, as well as the related net interest. (m) Comprehensive Income Comprehensive income consists of two components, net income and other comprehensive income (loss). Other comprehensive income (loss) refers to certain changes in equity that are excluded from net income. For the Company, other comprehensive income (loss) includes foreign currency translation adjustments. Total comprehensive income (loss) for all periods presented has been disclosed in the consolidated statements of comprehensive income. (n) Certain Risks and Uncertainties The Company’s business is subject to risks associated with its ability to attract and retain advertisers and offer goods or services on compelling terms to our members. The Company’s cash, cash equivalents and a ccounts receivable are potentially subject to concentration of credit risk. Cash and cash equivalents are placed with financial institutions that management believes are of high credit quality. Accounts receivable are derived from revenues earned from customers located in the U.S. and internationally. As of December 31, 2025 and 2024 , the Company did not have any customers that accounted for 10% or more its accounts receivable. As of December 31, 2025 , the Company had merchant payables of $ 11.7 million related to the sale of vouchers. In the Company’s financial statements presented in this 10-K report, following GAAP accounting principles, we classified all merchant payables as current. As such, the consolidated balance sheet reflects negative net working capital (defined as current assets minus current liabilities) of $ 10.8 million at December 31, 2025 . Payables to merchants are generally due upon the redemption of vouchers by members who purchased them from the Company. As of December 31, 2025 , unredeemed vouchers have maturities through December 2026; however, expiration dates may be extended on a case-by-case basis and final payment to merchants upon expiration may not be due for up to a year after. Based on current projections of future redemption activity, management expects that cash on hand as of December 31, 2025 will be sufficient to provide for working capital needs for at least the next twelve months. (o) Cash, Cash Equivalents and Restricted Cash Cash equivalents consist of highly liquid investments with maturities of three months or less from the date of purchase. Restricted cash includes cash and cash equivalents that is restricted through legal contracts, regulations or our intention to use the cash for a specific purpose. Our restricted cash primarily relates to refundable security deposits for real estate leases and funds held in escrow. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the total amounts shown in the statements of cash flows (in thousands): December 31, December 31, 2025 2024 Cash and cash equivalents $ 10,007 $ 17,064 Restricted cash 756 676 Total cash, cash equivalents and restricted cash in the consolidated statements of cash flows $ 10,763 $ 17,740 51 (p) Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Additions and improvements are capitalized. Maintenance and repairs are expensed as incurred. The Company also includes in fixed assets the capitalized cost of internal-use software and website development, including software used to upgrade and enhance its website and processes supporting the Company’s business, in accordance with the framework established and guidance provided by the FASB relating to accounting for the cost of computer software developed or obtained for internal use, and website development costs. Costs incurred in the planning stage and operating stage are expensed as incurred, while costs incurred in the application development stage and infrastructure development stage are capitalized, assuming such costs are deemed to be recoverable. Depreciation is determined using the straight-line method over the estimated useful lives of the assets. Estimated useful lives are 3 to 5 years for computer hardware and software, capitalized internal-use software and website development costs, and office equipment and furniture. The Company depreciates leasehold improvements over the term of the lease or the estimated useful life of the asset, whichever is shorter. (q) Impairment of Property and Equipment The Company accounts for long-lived assets in accordance with the accounting standard relating to impairment of long-lived assets, which requires an impairment loss to be recognized on assets to be held and used if the carrying amount of a long-lived asset group is not recoverable from its undiscounted cash flows. The amount of impairment loss is measured as the difference between the carrying amount and the fair value of the asset group. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. The Company evaluates long-lived assets for impairment annually and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. No impairment loss was recognized during the year ended December 31, 2025 and 2024 . (r) Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topics 740): Improvements to Income Tax Disclosures", to expand the disclosure requirements for income taxes, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. We adopted ASU 2023-09 for the year ended December 31, 2025 using a prospective transition method. See Note 6– Income Taxes . (s) Recent Accounting Pronouncements Not Yet Adopted On November 4, 2024, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The guidance requires more detailed disclosure for expenses. This standard is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the ASU to determine its impact on our disclosures. Note 2: Net Income (Loss) Per Share Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding for the period. Diluted net income per share is computed by adjusting the weighted-average number of common shares outstanding for the effect of dilutive potential common shares outstanding during the period. Potential common shares included in the diluted calculation consist of incremental shares issuable upon the exercise of outstanding stock options calculated using the treasury stock method. 52 The following table sets forth the calculation of basic and diluted net income (loss) per share (in thousands, except per share amounts): Year Ended December 31, 2025 2024 Numerator: Net income attributable to Travelzoo operations $ 4,699 $ 13,564 Denominator: Weighted average common shares—basic 11,180 12,594 Effect of dilutive securities: stock options 297 258 Weighted average common shares—diluted 11,477 12,852 Net income (loss) per share —basic $ 0.42 $ 1.08 Net income (loss) per share—diluted $ 0.41 $ 1.06 Note 3: Acquisitions Intangible Assets The following table presents the gross fair values and estimated useful lives of intangible assets from acquisitions (in thousands): Fair Value Estimated Life (Years) Customer relationships (Jack's Flight Club) $ 3,500 5.0 Trade name (Jack's Flight Club) 2,460 indefinite Assets Measured at Fair Value on a Non-recurring Basis The Company’s non-financial assets, such as goodwill, intangible assets and property and equipment, are adjusted to fair value if an impairment is recognized during the period. The fair value measurements are based on Level 3 inputs which are unobservable inputs based on management assumptions used to measure assets at fair value. The goodwill assessment was performed by comparing the fair value of the reporting units to their carrying value. The fair value estimates for the reporting units were based on a blended analysis of the present value of future discounted cash flows and the market value approach, using Level 3 inputs. The indefinite-lived intangible assets assessment was performed using the relief-from-royalty method, which includes unobservable inputs, classified as Level 3 inputs, including projected revenues and an approximate 5 % royalty rate. The Company performed an annual impairment test in October 2025 and 2024, and did not identify any indicators of impairment for the years ended December 31, 2025 and 2024. Amortization of Acquired Intangible Assets The following table presents the activities of intangible assets for the years ended December 31, 2025 and 2024 (in thousands): Jack's Flight Club Secret Escapes Spain member database Secret Escapes U.S. member database Intangible assets, net—December 31, 2023 $ 1,710 $ 186 $ 195 Amortization of intangible assets with definite lives ( 250 ) ( 148 ) ( 195 ) Intangible assets, net—December 31, 2024 $ 1,460 $ 38 $ — Amortization of intangible assets with definite lives ( 10 ) ( 38 ) — Intangible assets, net—December 31, 2025 $ 1,450 $ — $ — 53 Amortization expense for acquired intangibles was $ 48,000 and $ 593,000 for the years ended December 31, 2025 and 2024, respectively. The Company performed its annual impairment testing of Trade name as of October 31, 2025 and 2024 using a relief from royalty method, respectively. No impairment was identified in 2025 and 2024 . As of December 31, 2025, the carrying value of the Trade name was $ 1.5 million. Note 4: Balance Sheet Components Prepaid expenses an d other consists of the following (in thousands): December 31, 2025 2024 Prepaid expenses $ 829 $ 921 Deposits 259 83 Inventory 124 — Other current assets 90 144 Total prepaid expenses and other $ 1,302 $ 1,148 Property and equipment co nsists of the following (in thousands): December 31, 2025 2024 Office equipment and furnishings $ 2,316 $ 2,164 Capitalized internal-use software and website development 2,169 2,196 Leasehold improvements 813 763 Computer hardware and software 47 45 Property and equipment 5,345 5,168 Less accumulated depreciation and amortization ( 5,114 ) ( 4,745 ) Total property and equipment, net $ 231 $ 423 Depreciation expense was $ 130,000 and $ 209,000 for the years ended December 31, 2025 and 2024, respectively. Amortization of capitalized internal-use software and website development costs w as $ 116,000 and $ 154,000 for the years ended December 31, 2025 and 2024 , respectively. Amortization of acquired intangible assets is presented in Note 3 above . Changes to the allowance for credit losses and reserve for member refunds are as follows (in thousands): Allowance for credit losses Reserve for member refunds Balance at December 31, 2023 $ 1,484 $ 268 Additions — charged to costs and expenses, or contra revenue 244 152 Deductions — recoveries of amounts previously reserved ( 24 ) — Deductions — write-offs or refunds ( 92 ) ( 276 ) Balance at December 31, 2024 1,612 144 Additions — charged to costs and expenses, or contra revenue 410 222 Deductions — recoveries of amounts previously reserved ( 67 ) — Deductions — write-offs or refunds ( 733 ) ( 178 ) Balance at December 31, 2025 $ 1,222 $ 188 Accrued expenses and other consists of the following (in thousands): 54 December 31, 2025 2024 Accrued compensation expense $ 1,485 $ 1,343 Reserve for member refunds 188 144 Accrued advertising expense 1,041 536 Other accrued expenses 1,212 1,381 Total accrued expenses and other $ 3,926 $ 3,404 At December 31, 2025 and 2024, accounts receivable, accounts payable and accrued expenses are not measured at fair value; however, the Company believes that the carrying amounts of these assets and liabilities are a reasonable estimate of their fair values because of their relative short maturities. Note 5: Commitments and Contingencies From time to time, the Company is subject to various claims and legal proceedings, either asserted or unasserted, that arise in the ordinary course of business. The Company accrues for legal contingencies if management can estimate the potential liability and believes it is probable that the matter will be ruled on adversely. Accruals for legal contingencies were not material as of December 31, 2025 or 2024. If a legal claim for which the Company did not accrue is resolved against it, the Company would record the expense in the period in which the ruling was made. The Company believes that the likelihood of an ultimate amount of liability, if any, for any pending claims of any type (alone or combined) that will materially affect the Company’s financial position, results of operations or cash flows is remote. The ultimate outcome of any litigation is uncertain, however, and unfavorable outcomes could have a material negative impact on the Company’s financial condition and operating results. Regardless of outcome, litigation can have an adverse impact on the Company because of defense costs, negative publicity, diversion of management resources and other factors. The Company leases office space in Canada, France, Germany, Spain, the U.K., and the U.S. under operating leases. Our leases have remaining terms ranging from less than one year to up to five years . The C ompany maintains standby letters of credit (“LOC”) to serve as collateral issued to the landlords. The LOCs are collateralized with cash which is included in the line item “Restricted cash” in the Consolidated Balance Sheets. Rent expense was $ 2.9 million and $ 2.7 million for the years ended December 31, 2025 and 2024, respectively. Se e Note 14– Leases for more information. The Company has purchase commitments aggregating approximately $ 733,154 as of December 31, 2025, which represent the minimum obligations the Company has under agreements with certain third-party service providers. These minimum obligations are less than the Company's projected use for those periods. Payments may be more than the minimum obligations based on actual use. Note 6: Income Taxes The components of income before income tax expense are as follows (in thousands): Year Ended December 31, 2025 2024 U.S. $ 5,713 $ 12,747 Foreign 1,944 6,339 $ 7,657 $ 19,086 Income tax expense consists of current and deferred components, further categorized by federal, state and foreign jurisdictions, as shown below. The current provision is generally that portion of income tax expense that is currently payable to the taxing authorities. The Company makes estimated payments of these amounts during the year. The deferred tax provision results from changes in the Company’s deferred tax assets (future deductible amounts) and tax liabilities (future taxable amounts), which are presented in the table below: 55 Current Deferred Total (In thousands) Year Ended December 31, 2025 Federal $ 1,871 $ ( 233 ) $ 1,638 State 371 ( 31 ) 340 Foreign 995 ( 294 ) 701 $ 3,237 $ ( 558 ) $ 2,679 Year Ended December 31, 2024 Federal $ 3,044 $ ( 471 ) $ 2,573 State 877 ( 19 ) 858 Foreign 2,001 ( 28 ) 1,973 $ 5,922 $ ( 518 ) $ 5,404 Income tax expense differed from the amounts computed by applying the U.S. federal statutory tax rates applicable to the Company’s level of pretax income as a result of the following (in thousands): Year Ended December 31, 2024 Federal tax at statutory rates $ 4,005 State taxes, net of federal income tax benefit 520 Uncertain tax positions 263 Foreign income taxed at different rates 586 Stock-based compensation ( 90 ) Other 120 Total income tax expense $ 5,404 The effective tax rate of the Company's provision (benefit) for income taxes under ASU 2023-09 differs from the federal statutory rate as follows (in thousands): December 31, 2025 US Federal Statutory Tax Rate $ 1,608 21.00 % Domestic federal Nontaxable and nondeductible Items 124 1.62 % Effect of Cross-Border Tax Laws ( 71 ) ( 0.92 ) % Other 26 0.35 % State and Local Income Taxes, Net of Federal Income Tax Effect 239 3.12 % Foreign Tax Effects Canada Statutory rate differential ( 184 ) ( 2.41 ) % Provincial tax 354 4.62 % Other ( 10 ) ( 0.13 ) % Other foreign jurisdictions 72 0.94 % Worldwide changes in unrecognized tax benefits 521 6.80 % Tax Expense (Benefit) / Effective Tax Rate 2,679 34.99 % 56 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities as of December 31, 2025 and 2024 are as follows (in thousands): December 31, 2025 2024 Deferred tax assets: Net operating loss and credit carryforwards $ 3,548 $ 3,279 Operating lease liabilities 1,276 1,575 State income taxes 56 117 Accruals and allowances 306 408 Stock-based compensation 648 433 Unrealized foreign exchange losses 290 23 Deferred revenue 1,005 616 Property, equipment and intangible assets 267 266 Capital loss carryforward 403 401 Total deferred tax assets 7,799 7,118 Valuation allowance ( 2,806 ) ( 2,806 ) Total deferred tax assets net of valuation allowance 4,993 4,312 Deferred tax liabilities: Operating lease right-of-use assets ( 791 ) ( 932 ) Total deferred tax liabilities ( 791 ) ( 932 ) Net deferred tax assets $ 4,202 $ 3,380 Changes in the deferred tax assets valuation allowance for the years ended December 31, 2025 and 2024 are as follows (in thousands): Balance at the beginning of the year Charged (Credited) to expenses Charged (Credited) to other account (*) Balance at end of year Deferred tax assets valuation allowance Year Ended December 31, 2024 $ 2,878 ( 72 ) — $ 2,806 Year Ended December 31, 2025 $ 2,806 — — $ 2,806 (*) Amounts not charged (credited) to expenses are charged (credited) to stockholders' equity or deferred tax assets (liabilities). The cash paid for income taxes (net of refunds) during the year ended December 31, 2025 was as follows (in thousands): December 31, 2025 Federal $ 228 State and Local California * Illinois * Other 86 Foreign Canada 1,270 United Kingdom 2,164 Other 87 Total Tax Paid $ 3,835 * The amount of income taxes paid during the year does not meet the 5% disaggregation threshold. 57 As of December 31, 2025, the Company has a valuation allowance of approximately $ 2.4 million related to foreign net operating loss (“NOL”) carryforwards of approximately $ 14.6 million primarily related to the Company's Asia Pacific entities for which it is more likely than not that the tax benefit will not be realized. The amount of the valuation allowance represented an increase of approximately $ 1,000 over the amount recorded as of December 31, 2024, and was due to the increase of deferred tax assets and related valuation allowance for Travelzoo Asia. If not utilized, $ 14.6 million of the remaining foreign NOL may be carried forward indefinitely. As of December 31, 2025, the Company has US federal NOL carryforwards of $ 31.2 million as a result of the transaction with MTE. If not utilized, $ 7.4 million may be carried forward indefinitely, and $ 23.8 million will expire at various times between 2032 and 2037. As of December 31, 2025, the Company has state and local NOL carryforwards of $ 119.9 million, which will expire at various times between 2035 and 2044. The Company has not recorded these net operating losses because an uncertain tax position has been recorded relating to them. As of December 31, 2025, the Company is permanently reinvested in certain Non-U.S. subsidiaries and does not have a deferred tax liability related to its undistributed foreign earnings. The estimated amount of the unrecognized deferred tax liability attributed to future withholding taxes on dividend distributions of undistributed earnings for certain non-U.S. subsidiaries, which the Company intends to reinvest the related earnings indefinitely in its operations outside the U.S., is approximately $ 984.7 thousand at December 31, 2025. The total amount of gross unrecognized tax benefits was $ 23.9 million as of December 31, 2025, of which up to $ 16.6 million would affect the Company’s effective tax rate if realized. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits in 2024 and 2025 is as follows (in thousands): Gross unrecognized tax benefits balance at December 31, 2023 23,895 Increase related to current year tax positions — Settlements — Gross unrecognized tax benefits balance at December 31, 2024 23,895 Increase related to current year tax positions — Settlements — Gross unrecognized tax benefits balance at December 31, 2025 $ 23,895 The Company’s policy is to include provisions for interest and penalties related to uncertain and unrecognized tax positions in income tax expense. To the extent accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction in the overall income tax provision in the period that such determination is made. As of December 31, 2025, and December 31, 2024, the Company had approximately $ 1.59 million and $ 1.1 million in accrued interest, respectively. The Company files income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company is subject to U.S. federal and certain state tax examinations for certain years after 2020 and is subject to California tax examinations for years after 2019. Although the timing of initiation, resolution and/or closure of audits is highly uncertain, it is reasonably possible that the balance of the gross unrecognized tax benefits related to the method of computing income taxes in certain jurisdictions and losses reported on certain income tax returns could significantly change in the next 12 months. These changes may occur through settlement with the taxing authorities or the expiration of the statute of limitations on the returns filed. The Company is unable to estimate the range of possible adjustments to the balance of the gross unrecognized tax benefits. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. This legislation includes changes to U.S. federal tax law, which may be subject to further clarification and the issuance of interpretive guidance. We have assessed the legislation and its effect on our consolidated financial statements. The enactment of the OBBBA Act did not have a material impact for the period ended December 31, 2025. We will continue to monitor any future guidance or legislative developments related to the OBBBA Act to assess its potential implications on our tax position. 58 Note 7: Accumulated Other Comprehensive Loss The following table summarizes changes in accumulated balances of other comprehensive loss (in thousands): Year Ended December 31, 2025 2024 Beginning balance $ ( 5,327 ) $ ( 4,607 ) Other comprehensive loss due to foreign currency translation, net of tax ( 4 ) ( 720 ) Ending balance $ ( 5,331 ) $ ( 5,327 ) There were no amounts reclassified from accumulated other comprehensive loss for the years ended December 31, 2025 and 2024. Accumulated other comprehensive loss consists of foreign currency translation gain. Note 8: Employee Benefit Plan The Company maintains a 401(k) Profit Sharing Plan & Trust (the “401(k) Plan”) for its employees in the United States. The 401(k) Plan allows employees of the Company to contribute up to 80 % of their eligible compensation, subject to certain limitations. Since 2006, the Company has matched employee contributions up to $ 1,500 per year. Employee contributions are fully vested upon contribution, whereas the Company’s matching contributions are fully vest after the first year of service. The Company also has various defined contribution plans for its international employees. The Company’s contributions to these benefit plans were approximately $ 832,000 and $ 730,000 for the years ended December 31, 2025 and 2024, respectively. Note 9: Stock-Based Compensation and Stock Options The Company accounts for its employee stock options under the fair value method, which requires stock-based compensation to be estimated using the fair value on the date of grant, employing an option-pricing model. The value of the portion of awards expected to vest is recognized on a straight-line basis as expense over the related employees’ requisite service periods in the Company’s consolidated statements of operations. In September 2019, pursuant to executed Option Agreements, the Company granted six employees stock options to purchase 50,000 shares of common stock each ( 300,000 in the aggregate) with an exercise price of $ 10.79 , of which 75,000 options vest and become exercisable annually starting on September 5, 2020 and ending on December 31, 2023. The options expire in September 2024. On May 29, 2020, the shareholders of the Company approved the grants, as well as certain amendments to the Option Agreements, which increased and repriced all outstanding, unexercised options granted to such employees. Pursuant to the applicable amendments, the exercise price for the options was repriced to the official NASDAQ closing share price on March 30, 2020 (the date of execution of the amendments to the Option Agreements, which immediately followed the date of approval of the grants from the Board of Directors of the Company), which was $ 3.49 , the option grants were each increased to 100,000 each, resulting in 300,000 additional options in the aggregate. In 2020, 100,000 unvested options were forfeited upon an employee's departure, 75,000 options were exercised and 54,258 shares of common stock were issued as the result of a cashless exercise which were approved by Travelzoo’s Board of Directors. In 2021, 125,000 unvested options were forfeited upon employees’ departure, 150,000 options were exercised and 88,917 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which were approved by Travelzoo’s Board of Directors . No option was exercised in 2022. In 2023, 50,000 options were exercised and 18,098 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which were approved by Travelzoo’s Board of Directors . As of December 31, 2023, stock-based compensation related to these Option Agreements and applicable Option Agreement Amendments were fully expensed. In 2024, 75,000 options were exercised and 27,546 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which was approved by Travelzoo’s Board of Directors. As of December 31, 2024 , all options granted under these Option Agreements have been exercised or forfeited. On May 29, 2020, pursuant to an executed Option Agreement, the shareholders of the Company approved the grant of stock options to purchase 800,000 shares of common stock to Mr. Ralph Bartel, Chairman of the Board of Directors of the Company at the time, with an exercise price of $ 3.49 and quarterly vesting beginning June 30, 2020 and ending on March 31, 2022. This grant was approved at the 2020 Annual Meeting of the shareholders. In 2021, 600,000 options were exercised and 390,809 shares of common stock were issued as the result of the cashless exercises which were approved by Travelzoo’s Board of Directors. Stock-based compensation related to this grant was fully expensed in 2022. In 2023, 200,000 options were exercised and 121,307 shares of common stock were issued as the result of the cashless exercises which were approved by Travelzoo’s Board of Directors. The options expired in March 2025. 59 On May 29, 2020, pursuant to an executed Option Agreement, the shareholders of the Company approved the grant of stock options to purchase 200,000 shares of common stock to two key employees, with an exercise price of $ 3.49 with annual vesting starting March 30, 2021 a nd ending on March 31, 2024. The options expired in March 2025. In 2021, 50,000 options were exercised and 24,474 shares of common stock were issued as the result of cashless exercises which were approved by Travelzoo’s Board of Directors. In 2022, 50,000 unvested options were forfeited upon one employee's departure, 25,000 options were exercised and 4,676 shares of common stock were issued as the result of cashless exercise or net settlement with respect to the option exercise price which were approved by Travelzoo’s Board of Directors. In 2023, 50,000 options were exercised and 16,619 shares of common stock were issued as the result of the cashless exercise which were approved by Travelzoo’s Board of Directors. In 2024, 25,000 options were exercised and 8,420 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which was approved by Travelzoo’s Board of Directors. Stock-based compensation related to this grant was fully expensed in 2024 and all options granted under this Option Agreement have been exercised or forfeited as of December 31, 2025. On June 1, 2021, pursuant to an executed Option Agreement, the shareholders of the Company approved the grant of stock options to purchase 50,000 shares of common stock to one employee, with an exercise price of $ 9.44 , with annual vesting starting January 1, 2022 and ending on January 1, 2025. The options expire in 2026. In 2024, 37,500 options were exercised and 3,358 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which was approved by the Company’s Board of Directors. As of December 31, 2025, 12,500 options were vested and outstanding. Stock-based compensation related to this grant was fully expensed in 2024. The options expired in 2026. In March 3, 2022, pursuant to an executed Option Agreement, the Company granted its Global Chief Executive Officer, Holger Bartel, options to purchase 600,000 shares of common stock of the Company, with an exercise price of $ 8.14 and vesting 25 % every six months over two years beginning on June 30, 2022 and ending on December 31, 2023. The options expire in March 2027. This grant was approved at the 2022 Annual Meeting of the shareholders. In 2024, 200,000 options were exercised and 53,753 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which was approved by Travelzoo’s Board of Directors. As of December 31, 2025, 400,000 options were vested and outstanding. Stock-based compensation related to this grant was fully expensed in 2023. In June 2022, the Company granted an employee options to purchase 100,000 shares of common stock with an exercise price of $ 6.78 and quarterly vesting beginning on September 30, 2022 and ending on June 30, 2025 with vesting based on both time-based service condition and also performance conditions. However, if the performance targets are not met as of the first date on which the time condition is met, the time condition may be extended by one quarter up to three times. The options expire in June 2027. The Company did not recognize stock-based compensation expense for this grant as the performance targets were not achieved and thus no shares were vested in 2022. Total stock-based compensation related to this option grant of $ 89,000 was recorded in sales and marketing expenses for 2023, with 25,000 shares were vesting. Total stock-based compensation related to this option grant of $ 89,000 was recorded in sales and marketing expenses for 2024, with 25,000 shares vesting. Total stock-based compensation related to this option grant of $ 89,000 was recorded in sales and marketing expenses for 2025, with 25,000 shares vesting. Stock-based compensation related to this grant was fully expensed in 2025. In March 2023, the Com pany granted its General Counsel and Head of Global Functions, Christina Sindoni Ciocca, options to purchase 200,000 shares of common stock of the Company, with an exercise price of $ 4.96 and vesting 12.5 % every six months over four years beginning on June 30, 2023 and ending on December 31, 2026. This grant was approved at the Annual Meeting of Stockholders held in June 2023. The options expire in March 2028. Total stock-based compensation related to this option grant of $ 139,000 was recorded in general and administrative expenses for each the year ended December 31, 2025 and 2024, respectively. In 2024, 75,000 options were exercised and 19,584 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which was approved by Travelzoo’s Board of Directors. In 2025, 25,000 options were exercised and 7,890 shares of common stock were issued as the result of the cashless exercises or net settlement with respect to the option exercise price which was approved by Travelzoo’s Board of Directors. As of December 31, 2025, there was approximately $ 139,000 of unrecognized stock-based compensation expense relating to these options. This amount is expected to be recognized over 1.0 year. In March 2024, the Compensation Committee of the Board of Directors granted Holger Bartel 600,000 stock options that vest through December 31, 2025. On April 26, 2024, pursuant to an executed Option Agreement, the shareholders of the Company approved to grant Holger Bartel, options to purchase 600,000 shares of common stock of the Company, with an exercise price of $ 8.58 and vesting 25.0 % every six months over two years beginning on June 30, 2024 and ending on December 31, 2025. The options expire in March 2029. Stock-based compensation related to this grant was fully expensed in 2025. 60 The Company recorded $ 1.4 million of stock-based compensation in general and administrative expenses for the year ended December 31, 2025. The Company utilizes the Black-Scholes option pricing model to value the stock options, with an expected life as defined under the simplified method, using an average of the contractual term and vesting period of the stock options, and risk-free interest rates based on the U.S. Treasury yield curve in effect at the time of grant. Historical volatility is calculated based upon implied volatility of the Company's historical stock prices. The Company accounts for forfeitures as they occur. There were no stock options granted in 2025. The fair value of stock options granted in 2024 was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions: 2025 2024 Weighted-average fair value of options granted per share $ — $ 4.06 Historical volatility — % 64 % Risk-free interest rate — % 4.84 % Dividend yield — — Expected life in years 0.0 3.1 As of December 31, 2025, there was approximately $ 139,000 of unrecognized stock-based compensation expense related to outstanding stock options, expected to be recognized over 0.2 years . Option activities during the years ended December 31, 2023, 2024 and 2025 were as follows: Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life Aggregate Intrinsic Value (In thousands) Outstanding at December 31, 2023 1,050,000 $ 7.02 3.11 years Options Granted 600,000 8.58 Exercised options ( 462,500 ) 6.74 Options forfeited and canceled ( 8,333 ) 6.78 Outstanding at December 31, 2024 1,179,167 $ 7.99 3.33 years Options Granted — $ — Exercised options ( 25,000 ) $ 4.96 Options forfeited and canceled — — Outstanding at December 31, 2025 1,154,167 $ 8.06 2.33 years $ ( 1,129 ) Exercisable and fully vested at December 31, 2025 1,104,167 2.34 years $ ( 1,235 ) Outstanding at December 31, 2025 and expected to vest thereafter 50,000 2.18 years $ 106 The aggregate intrinsic values in the table above represent the total pre-tax intrinsic values (the difference between the Company’s closing stock price on the last trading day of the year ended December 31, 2025 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders, had all option holders exercised their options on December 31, 2025. These amounts change based on the fair value of the Company’s stock. The Company’s policy is to issue shares from authorized shares to fulfill stock option exercises. 61 Outstanding options at December 31, 2025 were as follows: Exercise Price Options Outstanding Options Outstanding Weighted-Average Remaining Contractual Life Weighted-Average Exercise Price Options Outstanding and Exercisable Options Exercisable Weighted-Average Remaining Contractual Life $ 4.96 100,000 2.18 years $ 4.96 50,000 2.18 years $ 6.78 41,667 1.42 years $ 6.78 41,667 1.42 years $ 8.14 400,000 1.17 years $ 8.14 400,000 1.17 years $ 8.58 600,000 3.24 years $ 8.58 600,000 3.24 years $ 9.44 12,500 0.00 years $ 9.44 12,500 0.00 years Note 10: Stock Repurchase Program The Company's stock repurchase programs assist in offsetting the impact of dilution from employee equity compensation and with capital allocation. Management is allowed discretion in the execution of repurchase programs, based upon market conditions and consideration of capital allocation. On October 24, 2023, the Company announced that its board of directors authorized the repurchase of up to 1,000,000 shares of the Company's outstanding common stock. In 2023, the Company repurchased 600,000 shares of common stock for an aggregate purchase price of $ 5.0 million, excluding excise tax due under the Inflation Reduction Act of 2022, with such shares retired and recorded as a reduction of additional paid-in capital. In 2024, the Company repurchased the remaining 400,000 shares of common stock for an aggregate purchase price of $ 3.9 million, excluding excise tax due under the Inflation Reduction Act of 2022, with such shares retired and recorded as a reduction of additional paid-in capital until extinguished with the remaining amount reflected as a reduction of retained earnings. On April 30, 2024, the Company announced that its board of directors authorized the repurchase of up to 1,000,000 shares of the Company's outstanding common stock. In 2024, the Company repurchased 1,000,000 shares of common stock for an aggregate purchase price of $ 8.8 million, excluding excise tax due under the Inflation Reduction Act of 2022, with such shares retired and recorded as a reduction of additional paid-in capital until extinguished with the remaining amount reflected as a reduction of retained earnings. On June 15, 2024, the Company entered into a Stock Repurchase Agreement with Mr. Holger Bartel to privately repurchase an aggregate of 200,000 shares of the Company’s common stock for an aggregate purchase price of $ 1.5 million, excluding excise tax due under the Inflation Reduction Act of 2022, with such shares retired and recorded as a reduction of additional paid-in capital until extinguished with the remaining amount reflected as a reduction of retained earnings. This transaction was approved by the Compensation Committee of the Board of Directors. See Note 12: Related Party Transactions for further information. On October 23, 2024, the Company announced that its board of directors authorized the repurchase of up to 1,000,000 shares of the Company's outstanding common stock. In 2024, the Company repurchased 88,471 shares of common stock for an aggregate purchase price of $ 1.50 million, excluding excise tax due under the Inflation Reduction Act of 2022, with such shares retired and recorded as a reduction of additional paid-in capital until extinguished with the remaining amount reflected as a reduction of retained earnings. For year ended December 31, 2025, the Company repurchased 911,529 shares of common stock for an aggregate purchase price of $ 12.9 million, excluding excise tax due under the Inflation Reduction Act of 2022, with such shares retired and recorded as a reduction of additional paid-in capital until extinguished with the remaining amount reflected as a reduction of retained earnings. On March 5, 2026, the Company announced that its board of directors authorized the repurchase of up to 1,000,000 shares of the Company's outstanding common stock. Note 11: Segment Reporting and Significant Customer Information During 2025, the Company had four reportable operating segments: Travelzoo North America, Travelzoo Europe, Jack’s Flight Club and New Initiatives. Travelzoo North America consists of the Company’s operations in the U.S. and Canada. Travelzoo Europe consists of the Company’s operations in France, Germany, Spain and the U.K. Jack’s Flight Club consists of subscription revenues from premium members to access and receive flight deals from Jack’s Flight Club via email or mobile applications. New Initiatives consists of Travelzoo’s licensing activities in certain Asia Pacific territories, the Travelzoo META subscription service and MTE. 62 Our chief operating decision maker ("CODM") is our Global Chief Executive Officer. The CODM primarily use operating income (loss) to evaluate each segment's performance allocate resources and make capital investments. We allocate certain software and license costs, such as IT and customer support, across all segments but do not allocate expenses such as legal-related costs or income taxes. Financial information is utilized along with forecasts to enable the CODM to manage our business across all operating segments. For the year ended December 31, 2025 , Travelzoo North America operations comprised 66 % of revenues, Travelzoo Europe operations comprised 28 % of revenues and Jack's Flight Club co mprised 6 % of revenues. The following is a summary of operating results by business segment (in thousands): Year Ended December 31, 2025 Travelzoo North America Travelzoo Europe Jack's Flight Club New Initiatives Consolidated Revenues from unaffiliated customers $ 59,001 $ 27,122 $ 5,516 $ 80 $ 91,719 Intersegment revenues 1,291 ( 1,146 ) ( 145 ) — — Total net revenues 60,292 25,976 5,371 80 91,719 Sales and marketing (1) 25,501 17,396 2,370 — 45,267 Other costs and expenses (2) 25,795 10,895 2,663 195 39,548 Operating income (loss) $ 8,996 $ ( 2,315 ) $ 338 $ ( 115 ) $ 6,904 Other income, net $ 753 Income from continuing operations before income taxes $ 7,657 (1) Includes advertising and promotional costs, employee-related expenses for sales, marketing, and production teams, conference participation costs, professional services, public relations expenses, and facilities costs. (2) Includes costs and expenses related to cost of revenues, product development, and general and administrative. Travelzoo North America and Travelzoo Europe general and administrative expenses include stock based compensation of $ 1.4 million and $ 0 , respectively. Year Ended December 31, 2024 Travelzoo North America Travelzoo Europe Jack's Flight Club New Initiatives Consolidated Revenues from unaffiliated customers $ 54,968 $ 24,113 $ 4,714 $ 107 $ 83,902 Intersegment revenues 124 ( 42 ) ( 82 ) — — Total net revenues $ 55,092 $ 24,071 $ 4,632 $ 107 $ 83,902 Sales and marketing (1) 19,748 12,561 1,881 280 34,470 Other costs and expenses (2) 19,461 8,429 2,707 337 30,934 Operating income (loss) $ 15,883 $ 3,081 $ 44 $ ( 510 ) 18,498 Other income, net $ 588 Income from continuing operations before income taxes $ 19,086 (1) Includes advertising and promotional costs, employee-related expenses for sales, marketing, and production teams, conference participation costs, professional services, public relations expenses, and facilities costs. (2) Includes costs and expenses related to cost of revenues, product development, and general and administrative. Travelzoo North America and Travelzoo Europe general and administrative include stock based compensation of $ 1.5 million and $ 0 , respectively. A measure of segment assets is not currently provided to the Chief Operating Decision Maker and has therefore not been provided. As of December 31, 2025, the Company did not have any customers that accounted for 10% or more of revenue. For the year ended December 31, 2024, the Company had one customer that accounted for more than 10% of revenues at $ 8.8 million across Travelzoo North America and Travelzoo Europe. As of December 31, 2025 and 2024, the Company did not have any customers that accounted for 10% or more of accounts receivable. 63 The following table sets forth the breakdown of revenues (in thousands) by category Advertising and Commerce, Membership Fees, and Other. Advertising and Commerce includes travel publications ( Top 20 , Travelzoo website, Standalone email newsletters, Travelzoo Network ), Getaways vouchers, hotel platform, vacation packages, Local Deals vouchers and entertainment offers (vouchers and direct bookings). Membership Fees includes subscription fees paid by Travelzoo, Jack’s Flight Club and Travelzoo META members. Other includes licensing fees from license agreements and the retail business acquired with MTE. Year Ended December 31, 2025 2024 Advertising and Commerce $ 78,446 $ 78,396 Membership Fees 13,193 5,399 Other 80 107 Total revenues $ 91,719 $ 83,902 The following table sets forth revenues for individual countries that comprised 10% or more of total revenue (in thousands): Year Ended December 31, 2025 2024 Revenue United States $ 55,301 $ 49,473 United Kingdom 19,894 20,607 Rest of the world 16,524 13,822 Total revenues $ 91,719 $ 83,902 The Company disaggregates its revenue by geographic region based on the location of the legal entity providing the service. Note 12: Related Party Transactions Stock Repurchase Agreements Travelzoo, from time to time, engages in share repurchases. On June 15, 2024, the Company entered into a Stock Repurchase Agreement (the “First SRA”) with Holger Bartel, the Company's Global Chief Executive Officer, to repurchase an aggregate of 200,000 shares of the Company’s common stock at a price of $ 7.66 per share. The Compensation Committee of the Board of Directors negotiated the purchase price with Holger Bartel after receiving advice from an independent financial adviser. The aggregate purchase price of $ 1.5 million was paid during the second quarter of 2024, following the execution of the First SRA. On September 5, 2024, the Company entered into a Stock Repurchase Agreement (the “Second SRA”) with Holger Bartel, the Company's Global Chief Executive Officer, to repurchase an aggregate of 200,000 shares of the Company’s common stock at a price of $ 11.44 per share. The Compensation Committee of the Board of Directors negotiated the purchase price with Holger Bartel after receiving advice from an independent financial adviser. The aggregate purchase price of $ 2.4 million was paid in 2024, following the execution of the Second SRA. Consulting Agreement with Ralph Bartel On January 1, 2023, with the unanimous approval of the Audit Committee, the Company entered into a Consulting Agreement with Ralph Bartel (the "Consulting Agreement"). The Consulting Agreement was amended and renewed, effective January 1, 2026. Ralph Bartel, who founded Travelzoo, is the sole beneficiary of the Ralph Bartel 2005 Trust, which is the controlling shareholder of Azzurro. Azzurro is the Company's largest shareholder. Pursuant to the Consulting Agreement, Mr. Bartel provides strategic advisory for Travelzoo META, advisory on talent search, performance management consulting, strategic advisory to IT and brand strategy and public relations support. In 2025, the fee payable to Mr. Bartel pursuant to the Consulting Agreement was $ 313,000 , included within General and Administrative expenses. In 2024, the fee payable to Mr. Bartel was $ 164,000 . 64 Framework Agreement with Talenti Milanesi S.R.L. On February 28, 2019, with the unanimous approval of the Audit Committee, the Company entered into a Framework Agreement (the “Framework Agreement”) with Donna Elissa S.R.L. (“Donna Elissa”), a company controlled by Azzurro. Azzurro is the Company’s largest shareholder. Pursuant to the Framework Agreement, Donna Elissa provided certain strategic services to the Company, including the engagement of contractors and provision of office space in Milan. On January 24, 2025, the Audit Committee unanimously approved the assignment of Donna Elissa’s rights and obligations under the Framework Agreement to Talenti Milanesi S.R.L. (“Talenti”). In 2025, the aggregate fee payable to Donna Elissa and Talenti pursuant to the Framework Agreement was $ 208,000 . Note 13: Non-Controlling Interest The Company’s consolidated financial statements include Jack's Flight Club, which the Company has operating control over but owns a 60 % equity interest in. Non-controlling interest for the years ended December 31, 2025 and 2024 was as follows (in thousands): Non-controlling interest—December 31, 2023 $ 4,697 Net Income attributable to non-controlling interest 118 Non-controlling interest—December 31, 2024 $ 4,815 Net Income attributable to non-controlling interest 279 Non-controlling interest—December 31, 2025 $ 5,094 Note 14: Leases The Company has operating leases for real estate and certain equipment. The Company leases office space in Canada, Germany, Spain, the U.K. and the U.S. under operating leases. Our leases have remaining lease terms ranging from less than one year to up to five years . Certain leases include one or more options to renew. In addition, we sublease certain real estate to a third party. All of our leases qualify as operating leases. The following table summarizes the components of lease expense for the years ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 Operating lease cost $ 2,266 $ 2,133 Short-term lease cost 617 544 Variable lease cost 428 496 Total lease cost $ 3,311 $ 3,173 Cash payments against the operating lease liabilities totaled $ 3.5 million and $ 3.4 million for the years ended December 31, 2025 and 2024. ROU assets obtained in exchange for lease obligations was and $ 321,000 and $ 1.3 million for the year ended December 31, 2025 and 2024, respectively. 65 The following table summarizes the presentation in our consolidated balance sheets of our operating leases (in thousands): Year Ended December 31, 2025 2024 Assets: Operating lease right-of-use assets $ 4,047 $ 5,655 Liabilities: Operating lease liabilities $ 1,811 $ 2,472 Long-term operating lease liabilities 4,184 5,646 Total operating lease liabilities $ 5,995 $ 8,118 Weighted average remaining lease term (years) 3.84 4.43 Weighted average discount rate 4.1 % 4.8 % Maturities of remaining lease liabilities at December 31, 2025 were as follows (in thousands): Years ending December 31, 2026 $ 2,984 2027 1,509 2028 1,464 2029 1,454 2030 225 Total lease payments 7,636 Less interest ( 1,641 ) Present value of operating lease liabilities $ 5,995 66 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None