Travelzoo 2005 Annual Report Download - page 68

TRAVELZOO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
director in 2000 and 2001. A total of 210,000 options were granted. The options expire in October 2011.
150,000 options and 17,275 options were exercised during the years ended December 31, 2004 and 2005,
respectively. As of December 31, 2005, 42,725 options are vested and remain outstanding.
In March 2002, Travelzoo Inc. granted to each director options to purchase 5,000 shares of common
stock with an exercise price of $3.00 per share that vested in connection with their services as a director in
2002. A total of 35,000 options were granted. In October 2002, 1,411 options were cancelled upon the
resignation of a director. The options expire in March 2012. 23,589 of these options were exercised during the
year ended December 31, 2004. None of these options were exercised during the year ended December 31,
2005. As of December 31, 2005, 10,000 options are vested and remain outstanding.
In October 2003, the Company completed an underwritten secondary oÅering of 402,500 shares of
common stock sold by the Company's Chief Executive OÇcer and principal stockholder. The oÅering was
intended primarily to allow the Company to satisfy the requirement for listing on the NASDAQ SmallCap
Market that the Company have 300 round lot holders. The costs of the oÅering of $328,000 were paid for by
the Company and were included in general and administrative expenses.
In October 2004, the Company completed a private placement oÅering of 750,000 newly-issued shares of
common stock for gross proceeds of $30.0 million to a group of investors. The proceeds from the oÅering were
intended to be used for general corporate purposes, including new product development and marketing
expenditures, and potential acquisitions or strategic investments. In 2005, the Company incurred issuance
costs of $123,729 related to the registration of these shares of common stock with the SEC.
The following table presents the activity related to stock options granted by the Company for the years
ended December 31, 2005, 2004, and 2003.
Year Ended December 31,
2005 2004 2003
Outstanding at beginning of year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,228,349 2,401,938 2,401,938
Granted ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì
ExercisedÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17,275 173,589 Ì
Cancelled ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì
Outstanding at end of year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,211,074 2,228,349 2,401,938
Exercisable at end of yearÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,211,074 2,228,349 2,401,938
Weighted-average fair value of options granted during the
year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì
The following table summarizes information about stock options outstanding as of December 31, 2005:
Shares Weighted-Average
Outstanding and Remaining Weighted-Average
Exercise Price Exercisable Contractual Life Exercise Price
$1.00 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,158,349 6.08 years $1.00
$2.00 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 42,725 6.83 years 2.00
$3.00 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10,000 7.25 years 3.00
2,211,074 6.30 years $1.03
(6) SigniÑcant Customer Information and Segment Reporting
SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information, establishes
standards for the reporting by business enterprises of information about operating segments, products and
47