v3.25.1
Acquisitions
 3 Months Ended
Mar. 31, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
Stock Purchase Agreement (“SPA”) between Travelzoo and Azzurro
In connection with the acquisition of Metaverse Travel Experiences (“MTE”), formerly a wholly-owned subsidiary of Azzurro, the Company completed a private placement of newly issued shares with Azzurro. Ralph Bartel, who founded the Company, is the sole beneficiary of the Ralph Bartel 2005 Trust, which is the controlling shareholder of Azzurro. Azzurro was the Company’s largest shareholder at the time of the MTE acquisition and, as of December 31, 2022, Azzurro and Ralph Bartel, in his individual capacity, owned approximately 50.3% of the Company’s outstanding shares. On December 28, 2022, the stockholders of Travelzoo approved the issuance and sale of 3.4 million shares of common stock (the “Shares”) of Travelzoo to Azzurro, in exchange for certain consideration, and on December 30, 2022 (the “Closing Date”), the transaction was
consummated. The closing price of Travelzoo’s common stock on December 30, 2022 was $4.45 per share, resulting in an aggregate fair value of the Shares of $15.2 million. The consideration for the Shares consisted of the following: (a) $1.0 million in cash paid on the Closing Date; (b) $4.8 million paid in the form of a promissory note, carrying a 12% interest rate per annum, issued on the Closing Date and payable by June 30, 2023; and (c) the transfer to the Company of all outstanding capital stock of MTE, which was effected pursuant to a merger of MTE with a wholly-owned subsidiary of the Company on the Closing Date. In October 2023, the Company and Azzurro agreed to a payment plan for payment of the promissory note in five installments, ending in February 2024, with interest on the outstanding principal accruing at 16% per annum beginning on July 1, 2023. During the year ended December 31, 2023, Azzurro paid $3.0 million of principal. The remaining principal amount of $1.8 million together with interest of $19,000, was paid off in October 2024. Azzurro paid interest of $0 and $70,000 in the three months ended March 31, 2025 and 2024, respectively.
Intangible Assets
The following table represents the fair value and estimated useful lives of intangible assets from acquisitions (in thousands):
Fair ValueEstimated Life (Years)
Customer relationships (Jack’s Flight Club)$3,500 5.0
Trade name (Jack’s Flight Club)2,460 indefinite
Non-compete agreements (Jack’s Flight Club)660 4.0
Secret Escapes Spain member database445 3.0
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, including projected revenues and approximately 5% royalty rate.
The Company performed an annual impairment test as of October 31, 2024 and did not identify any indicators of impairment for the year ended December 31, 2024.
Amortization of Acquired Intangible Assets
The following table represents the activities of intangible assets for the three months ended March 31, 2025 and 2024 (in thousands):
Jack’s Flight ClubSecret Escape Spain
Intangible assets—December 31, 20231,710 186 
Amortization of intangible assets with definite lives(75)(48)
Intangible assets—March 31, 20241,635 138 
Amortization of intangible assets with definite lives(59)(28)
Intangible assets—June 30, 20241,576 110 
Amortization of intangible assets with definite lives(58)(37)
Intangible assets—September 30, 20241,518 73 
Amortization of intangible assets with definite lives(58)(35)
Intangible assets—December 31, 20241,460 38 
Amortization of intangible assets with definite lives(3)(24)
Intangible assets—March 31, 2025$1,457 $14 
Amortization expense for acquired intangibles was $26,000 and $318,000 for the three months ended March 31, 2025 and 2024, respectively.
Expected future amortization expense of acquired intangible assets as of March 31, 2025 is as follows (in thousands):
Years ending December 31,
202521 
$21 
The Company performed its annual impairment testing of Trade name as of October 31, 2024 using a relief from royalty method. No impairment was identified in 2024. As of March 31, 2025, the carrying value of the Trade name was $1.5 million. The Company did not identify any indicators of impairment during the three months ended March 31, 2025.