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Subsequent Events
3 Months Ended
Mar. 31, 2020
Subsequent Events [Abstract]  
Subsequent Events
Subsequent Events

On April 24, 2020 and May 5, 2020, the Company received $3.1 million and $535,000, respectively, pursuant to loans under the Paycheck Protection Program (the “PPP”) of the CARES Act administered by the Small Business Association. The loans have a maturity of two (2) years from the disbursement of the funds. The Company intends to use the funds from these loan only for the purposes included in the PPP, including payroll, employee benefits, and rent, and to apply for forgiveness of a portion of the loans in compliance with the CARES Act.

On May 29, 2020, the stockholders of the Company approved the grant of stock options to certain employees and directors. The stockholders of the Company also approved increases and repricing of certain options previously granted to certain employees. Options granted to certain employees and directors to purchase up to 2,250,000 shares of the Company’s common stock were approved at the exercise price of $3.49. The Company also repriced 1,250,000 shares of outstanding, unexercised stock options granted previously to certain employees at various exercise prices to the exercise price of $3.49.
On June 3, 2020, the Company renegotiated the SPA with Jack’s Flight Club. Pursuant to the original terms of the outstanding Promissory Notes, the Company owed $10.0 million plus interest (the “Outstanding Amount”) to the Sellers on April 30, 2020. On June 3, 2020, the parties reached a negotiated settlement for the Outstanding Amount with the following terms: (a) $1.5 million was forgiven in settlement of certain outstanding indemnification claims disputed by the Sellers; (b) $6.8 million, plus accrued interest, was paid to the Sellers by Travelzoo, and (c) the remaining $1.7 million is to be paid in June 2021 pursuant to new promissory notes with each of the Sellers that contain a 12% interest rate and are secured by 9.7% of the Shares. Travelzoo also agreed that the additional payment set forth in the SPA (equal to 20% of 2020 net profit) would be payable to the Sellers regardless of whether EBITDA targets are achieved and the put/call is exercised in 2021. The parties also agreed to a new put/call option exercisable in 2022 by the Sellers or Travelzoo, as applicable, only if the put/call option for 2021 as set forth in the SPA is not exercised, with a EBITDA threshold of $4.3 million and a purchase price equal to 40% of 2021 EBITDA multiplied by 3.5, and an additional payment equal to 20% of 2021 net profit. The Company will account for the impact of this settlement and amended SPA in the second quarter of 2020 as income or expense based on the fair value of the consideration. These adjustments are not considered measurement period adjustments to the purchase consideration since there is not a clear and direct link to the consideration transferred in the SPA entered into on January 13, 2020.

On June 16, 2020, in connection with its Asia Pacific exit plan, the Company completed a sale of 100% of the outstanding capital stock of Travelzoo Japan K.K to Mr. Hajime Suzuki, the General Manager of Japan ("Buyer") for consideration of JPY1. The parties also entered into a License Agreement, whereby the Buyer obtained a license to use intellectual property from Travelzoo exclusively in Japan in exchange for quarterly royalty payments based on revenue over a 5 year term, with an option to renew. An interest free loan was provided to the Buyer for JPY46.0 million (approximately $430,000) to be repaid over 3 years.